|
Papers
Delivered at International Conference on Cleaner Production |
||
WHY CLEANER PRODUCTION?A paper by Mr. Peter M. Higgins, retired Assistant Deputy Minister, Conservation and Protection, Environment Canada and Mr. Arthur D. FitzGerald, Consultant to the World Bank and the International Finance Corporation. Mr. Higgins and Mr. FitzGerald currently function as the policy advisors on the Canadian team that in concert with their Chinese counterparts is delivering the Canadian International Development Agency’s China-Canada Cooperation Project in Cleaner Production. The Canadian Executing Agency (CEA), PricewaterhouseCoopers LLP/SNC-Lavalin Environment/Essa Technologies Ltd began work on this project in 1996. Following the 1992 UN Conference on Environment and Development, China was the first country to prepare a 15 year program for sustainable development: Agenda 21. In 1994 Canada's Minister of Foreign Affairs and Environmental Trade and China's Minister of Foreign Trade and Economic Cooperation signed a letter of intent offering to develop three projects in Agenda 21's Priority Program. One of the projects, the China-Canada Cooperation Project in Cleaner Production was developed in 1995. Its goal is to promote environmentally sustainable development in China by enhancing its capacity to manage its environment. The purposes of the Project are to assist China in implementing “Cleaner Production” (CP) in priority industrial sectors consistent with China's Priority Program for Agenda 21 by: strengthening the institutional capacity of the State Economic and Trade Commission (SETC) and the State Environmental Protection Administration (SEPA) to promote implementation of “Cleaner Production” in priority industrial sectors in China; and supporting government agencies, industries and enterprises in the application of CP in priority sectors; and fostering cooperation between Chinese and Canadian counterparts. A number of papers at this International Conference will present results that in part have benefited from the China-Canada Cooperation Project on Cleaner Production. One in particular, the implementation of cleaner production in Fuyang Chemical Plant by Mr. Sun Yongqiang, will share the experiences of that enterprise which was the first case study undertaken in the China/Canada project. The authors of this paper, Why Cleaner Production, are uniquely experienced to present these views. Mr. Higgins is a retired Assistant Deputy Minister, Conservation and Protection, Environment Canada and has, in addition, nearly ten years of international consulting experience. During his time spent as a public servant in Canada he was responsible for developing the industrial pollution control strategies put in place in that country spanning a period of over twenty years. He was the architect of the first Canadian Environmental Protection Act that embodied the principles of pollution prevention and life-cycle (cradle to grave) management of toxic chemicals. As an international consultant he has shared the Canadian experience in Central Europe, South and South East Asia, and in Latin America. Mr. Arthur D. FitzGerald was a member of the Nortel environmental group that developed the “Free in Three” strategy for finding alternative technologies that would eliminate the use of ozone-depleting substances in their industrial processes and subsequently sharing that technology globally. Since leaving Nortel he has been a consultant to the International Finance Corporation, the private-sector financing component of the World Bank Group, and is currently advising the environment group of the World Bank. The Pollution Prevention and Abatement Handbook of the World Bank Group is one of Mr. FitzGerald’s many achievements. That handbook is becoming the basic guide for institutions supporting industrial development, as well as being a “benchmark” for many developing countries and lending institutions. The Handbook advocates using “cleaner production technologies” and is being recognized globally as an important and useful tool in achieving sustainable industrial development. Both authors have advised the international banking community on what constitutes an appropriate level of environmental due diligence in order that project environmental and social risks are understood, and that consideration of cleaner and appropriate technologies are deployed so as to ensure sustainability of projects. The authors will argue that Cleaner Production, if fully understood by plant managers and owners, will be adopted by the desire to increase profitability. Sustainable projects that deal appropriately with environmental and social factors are also more likely to be the most profitable. Good business sense argues that the efficient use of energy, raw materials and human resources will result in the lowest unit cost for the end product. Inefficient use of resources results in waste. Waste represents a cost, which if not managed properly, is a cost to the environment and a burden on society as a whole. Even if managed properly waste-handling costs can be extremely high. The authors will present the case that it is more cost effective to avoid generating waste than it is to try to capture it and treat it at the end of a process. The least expensive cost is to use technologies that minimize the production of waste. The next least expensive option is to retain wastes within the process and to re-direct them into the raw material stream or to recover them when they are still in a more valuable state and can be used by others. Companies that employ environmental management systems know where losses are occurring and can reduce their costs by making adjustments to processes to avoid losses. The authors will cite various examples of where the adoption of clean technology has been determined to be an important factor in enhancing industrial productivity. Most of the specific examples are drawn from Canadian experience but the application of this experience is being implemented worldwide in the operations of the Canadian companies cited. The Canadian experience is in no way unique and examples of similar productivity and performance benefits by corporations that embrace environmental management systems and adopt cleaner production technologies can be found in all corners of the globe. A fairly detailed examination of the experience in Canada with the Canadian pulp and paper industry is included as this industrial sector was the first in Canada to be subject to national industrial pollution standards and the process of developing those standards was undertaken with significant input from the pulp and paper industry. The lessons learned in this exercise set the pattern of environmental regulatory activity in Canada. As we now see, the approach had the effect of stimulating the adoption of cleaner production technologies. In the 1970s we called it adopting “best practicable technology”. Over time the language has changed, from BPT (best practicable technology) to BAT (best available technology) to the point we are today where we label the technology of choice CP technology, or cleaner production technology. This has been taken even one step further and planners today are talking about such things as ecological industrial parks and deploying the concepts of industrial ecology. Other examples which are included in lesser detail are the experiences of Nortel Networks and the leadership role it played in switching to less ozone depleting substances in its manufacturing operations; those of INCO Ltd. in addressing the unenviable position of being the largest single source of sulphur dioxide in North America at their Sudbury smelter in Canada; and closer to where we are now Packages, Inc., a Pakistani pulp and paper operation which embraced environmental management systems and instituted major technological improvements in their facility at Lahore, well in advance of any environmental requirements being imposed upon them from either provincial or national governments in Pakistan. The introductory paragraph in the Chapter “Developing a Culture of Industrial Environmental Compliance” in the World Bank Group’s Pollution Prevention and Abatement Handbook is quite reflective of the Canadian experience. It is worth repeating here as an introduction to case study on the Canadian pulp and paper industry. “Efforts to reduce industrial pollution in developing countries have focused on developing environmental and legal frameworks, largely by establishing command and control regulations and market-based incentives. Overall, however, formal regulation by itself has not proven very effective in reducing industrial pollution in these countries. While there is no substitute for an environmental regulatory regime, there is a need to focus on what makes industry take action. Several innovative approaches are now emerging as effecting ways to improve environmental compliance including pollution inventories; information on enterprise performance; cleaner production; environmental management systems; negotiated agreements; and government-industry partnerships. International experience is still limited but suggests that industrializing countries may have much to gain from these approaches in developing a culture that fosters improved industrial environmental compliance and overall environmental performance.” Initially in Canada, as described in the Pulp and Paper Industry case study, government embarked on a unilateral “command and control” initiative which resulted in draft regulations that were focused almost solely on costly end-of-pipe treatment approaches. When presented to industry it pointed out that government had chosen the most inefficient options for dealing with industrial pollution. Fortunately, government agreed to work with industry to jointly develop regulations and strategies for dealing with pollution from the pulp and paper industry. From that beginning evolved an industrial pollution strategy that became the basis of environmental policy in Canada. Today pollution inventories, information on enterprise performance, partnerships, negotiated agreements, voluntary compliance, environmental management systems, and cleaner production have all become part of the government-industry environmental culture in Canada. At the beginning Canadian regulators would have insisted that operators of sulphite pulp and paper mills install chemical recovery systems, and end-of-pipe treatment systems. Industry countered that more efficient approaches were needed, and that technologies that used wood (the raw material) more efficiently would ultimately result in a more competitive industry with less pollution. In the end much of the sector using sulphite pulping technology opted for technology conversion to thermo chemical mechanical pulping (TCMP) which resulted in a significantly higher yield in terms of wood fibre, and significantly less pollution and less water consumption per tonne of pulp produced. The policy that resulted from this experience was that government would not dictate solutions to industry. Governments would establish pollution limits but leave the solution-choices up to business. Subsequently other industry sectors, as well as the pulp and paper industry proposed voluntary solutions and even offered to work together with government in terms of their implementation and explanation to the Canadian public. Examples of these are the Accelerated Reduction of Environmental Toxics (ARET) initiative and the National Pollutant Release Inventory (NPRI). Canadian industry has lead the world in a number of major initiatives including the Canadian chemical industry’s “Responsible Care” programme which is trademarked to the Canadian Chemical Producer’s Association, and now being emulated world-wide in more than forty countries. The “Responsible Care” programme is in effect a voluntary response by industry aimed at ensuring a new ethic within the industry for the safe and environmentally sound management of chemicals over their life cycle. This initiative flowed from the view of industry that by embracing voluntary programmes they could design more efficient solutions to their problems than if they were regulated by governments. More information on CCPA’s “Responsible Care” programme can be found at their website, http://www.ccpa.ca . A paper on the Japanese experience in applying the “Responsible Care” concept is being presented by Mr. Tanaka Yasuo at this Conference. At the conclusion of the paper the authors will list the lessons learned from the Canadian experience. CASE STUDY OF THE PULP AND PAPER INDUSTRY The pulp and paper industry in Canada was a natural choice as the first industry sector to be considered for the development of national industrial water pollution control standards. It represented, on an aggregated basis, the largest source of organic water pollution from industrial sources. Individual plants in many cases represented significantly larger sources of organic pollution burden to the nation’s watercourses than many middle sized urban communities. It was also an industry that was a significant contributor to the GNP, and most of its production was exported. It was both a major employer and major foreign currency earner. Many of the pulp mills, particularly in Eastern Canada, were very old, some of them approaching one hundred years of age. In Western Canada, pulp mills tended to be larger and newer. Almost all mills would have been considered large by Chinese standards. Pulp mill size ranged from several hundred tonnes per day to more than a thousand tonnes per day. The larger mills tended to be ones using the Kraft pulping process and the smaller mills tended to be sulphite mills or groundwood mills making pulp largely for fine papers and the newsprint industry. Initial attempts at making industrial pollution standards relied heavily on information published in the international literature. Not surprisingly Canadian environmental rule-making was heavily influenced by what was happening in the United States. Canada is the United States largest trading partner, as well as the obverse being true. Many of the early Canadian environmental specialists got their environmental training in the United States. At the time Canada began to examine options for industrial pollution control regulations for the pulp and paper industry the US Federal Water Pollution Control Administration (forerunner to the US EPA) had just published what appeared to be an exhaustive examination of the US pulp and paper industry, and proposals for that industry’s regulation. The options being considered were almost exclusively end-of-pipe solutions. Higher levels of environmental control required secondary treatment, and higher still levels of control demanded tertiary levels of treatment. The first draft of the Canadian standards under the Fisheries Act borrowed heavily from these draft regulations in the United States. Had the drafters had more knowledge of the industry, the reaction from the Canadian pulp and paper industry would have been better anticipated. Several important lessons were learned that shaped environmental policy for subsequent rule making for other industrial sectors. The first lesson learned was that most of the knowledge related to solving industry’s environmental problems rests with industry. It was necessary to develop a staff in the Environment Department that was knowledgeable of this industrial experience. This was important if the Environment ministry was going to have an effective dialogue with technical specialists from industry, but essential if they were going to work together to forge workable rules that would both benefit the environment and contribute to an efficient, productive industry. The pulp and paper industry (through the Canadian Pulp and Paper Association) proposed that a joint industry/government expert group should visit (together) governments and pulp and paper companies in Scandinavia. Their suggestion was accepted and a group led jointly by the Canadian Pulp and Paper Association, the author (P.M.Higgins) and a colleague from the Forestry Service in the Department of the Environment spent several weeks in Sweden, Finland and Norway. The team included representatives from the Federal Government, representatives from several provincial agencies, and technical experts from a number of Canadian pulp and paper mills. At the time the Swedish pulp and paper industry was going through a rationalization driven by the high costs of energy and the dwindling supplies of wood fibre. The rationalization program was resulting in industry consolidation (to better locate operations closer to reliable wood supplies), the institution of energy conservation measures, and measures to make better use of the available wood fibre. Environmental controls in Sweden were emphasizing in-plant changes that effected energy savings, fibre-loss control and chemical recovery, all contributing greatly to the reduction of pollution load, but also contributing to the profitability of industry. External (end-of-the-pipe treatment) was only included in the requirements of the Swedish Environmental Protection Board if the in-plant measures did not achieve the level of clean-up necessary to improve environmental conditions to an acceptable level of quality. In today’s terminology we would have described what they were doing as applying Cleaner Production. The mills visited in Norway and in Finland were practicing many of the measures we observed in Sweden, and driven by the same factors (the need to reduce energy costs, and the need to use fibre more efficiently). The Canadian team returned to Canada with a new perspective on what was important in the writing of environmental regulations. From that time forward regulatory initiatives in the first instance considered process modification as the primary strategy for achieving environmental control. The legal authority under which the federal regulations were being developed did not allow the federal government to specify processes, or the internal operations of a plant, but the regulations subsequently developed were most certainly “technology based” and with a full understanding of what role in-plant options could achieve. Starting with the pulp and paper industry, industrial pollution standards under the Fisheries Act were written on the basis of permitting so many units of pollution per unit of production. The regulations did include a requirement that the effluent be non-toxic to fish, by incorporating an acute lethality provision as a test requirement. The regulations did not permit dilution as a means of achieving environmental objectives, and concentration type effluent limitations were avoided for this very reason. The regulations did not tell industry what technologies it must use, or what in-plant measures must be instituted. This was a very important issue of public policy. In the first instance the Federal Government did not have the authority to establish such requirements, but more importantly, leaving the technical choices to industry allowed them to make the most efficient choices. An additional element of legislative authority that was used effectively was a provision in the Fisheries Act that allowed the Minister of Fisheries to request plans and specifications of new projects so that the Minister (through officials) could ascertain whether or not the project was likely to result in the release of a deleterious substance harmful to the fisheries resource. In applying the policy, all new pulp and paper mills were required to meet the effluent requirements at the time they started operations, and their plans were checked by government technical specialists. Existing mills were expected to bring their operation into compliance with the regulatory expectations over a reasonable period of time. Any mill that contemplated a process change, or undertook a significant expansion was subject to the regulatory requirements at the time those changes were made. Again the plans were checked by technical experts of government, but again it was the decision of industry as to what technologies they deployed and how they would attain the regulatory requirements. Government officials might ask to be given assurances that the regulatory limits would be attained but did not specify technologies or solutions. This intervention by government at an early stage in project development pre-dated the Government’s commitment to environmental impact assessment by several years. Examination of the plans for new developments became an operational requirement in 1969 and the Cabinet Decision establishing the federal environmental impact assessment policy was taken in 1973. Over time the examination of project plans and specifications under the Fisheries Act became integrated into the environmental assessment procedures being applied by regulatory authorities as they implemented the requirements of the Government policy. In 1995, with the proclamation of the Canadian Environmental Assessment Act, these requirements became a part of the responsibility under CEAA. It was, and has been, a very important component of pollution prevention in Canada. The pulp and paper regulations of 1971 ultimately embraced two distinct strategies, one for dealing with new investment, or investment in expansion or significant process change; and the other for existing industry. The regulations in effect required new investment to apply up-to-date, efficient, clean technologies. We did not call it “cleaner production” technologies at the time but rather applied the term “best practicable technologies”. But in effect the regulations were requiring the use of technologies that were more resource efficient, thereby reducing the generation of wastes and pollution load. At the time of issuance of the regulations it was stated that “It is recognized that the national baselines for effluents represent minimums of control. More stringent effluent controls might well be required based on particular receiving water conditions. In such cases, special effluent requirements can be tailored to each individual situation based on local or regional requirements.” It was further stated that “It should be emphasized that the national baseline limitations are based on practicable recycling and recovery technology, and not on the environmental quality objectives of the receiving water. They are expressed in terms of permissible limits of substances in units of quantity per unit of production and not on concentrations.” The release went on to state “The principal thrust of our regulatory program will be to minimize pollution. No new plant will be constructed which will not control pollution to the highest degree practicable. Existing industries will be pressed to clean up, with emphasis being placed on water re-use, up-grading of plant housekeeping, and where appropriate full conversion of processes to ones which are less polluting. Less emphasis will be placed on external hardware which is capable of reducing pollution loads, but rather the emphasis will be to reduce and/or eliminate pollutants at their source.” It was further stated “It is recognized that our new pollution control regulations are placing an additional burden on old industries. We are imposing new constraints, new production costs if you will, on plants built when society had a different set of values, and industry naturally built to the rules of the time. We will have to have patience in cleaning up our old plants; it will take time, it is always more costly to build pollution control measures into existing systems than it is to build from scratch.” Existing industry was also given targets for control in the regulations, but the date of application was left open, to allow for plant-by-plant negotiated compliance schedules, and the allowance of pollutants to units of production was somewhat more generous, in recognition of the greater challenge of retrofit situations. The objectives remained the same—to get industry to waste less and thereby reduce pollution load. When the regulations were enacted in 1971, the pulp and paper industry was and still is one of the important industrial sectors within the Canadian economy. In 1971 it contributed about 3% of the GNP, resulted in sales of about $ 3 billion (in 1971 Canadian dollars), employed about 74,000 people directly in the production operations and another 100,000 in woods operations. [Almost all pulp and paper produced in Canada is derived from wood resources, or recycled paper which originally was derived from wood resources.] There were in the order of 150 mills using a variety of technologies. In Eastern Canada the production was generally older and in need of modernization. Rationalization of access to wood resources was also a matter of some considerable concern to some operations. It was in Eastern Canada where the older sulphite and mechanical pulping mills supporting the newsprint industry were concentrated. In Western Canada the industry was generally newer, mills were larger, and they were 'using technology that was more efficient in the use of wood resources, and more conducive to chemical recovery systems. Indeed what was important about chemical recovery was that it was an essential feature of this newer mill technology keeping operating costs lower, and the mills more competitive. The shift from sulphite technology in eastern mills to Kraft technology with chemical recovery in western mills was not driven by environmental requirements, but a reflection of the interest of industry in building new capacity that was more efficient, and also by the fact that the nature of the wood available to western mills made the Kraft technology, the technology of choice. To say that clean up proceeded slowly with existing capacity would be an understatement. [In a parallel industrial pollution control initiative with the petroleum refining industry that industry committed to having requirements in place with “existing” refineries within five years, and met that commitment.] With the pulp and paper industry the plant-by-plant, negotiated compliance programme proceeded at a “snail’s pace”. The early ‘70s saw pulp and newsprint prices to be at historic lows. Canada had lost its position of price-setter to the more efficient, lower cost mills in the Southern US. Profits before and after taxes fell, and there were adverse trends in profits, dividends, retained earnings and research and development expenditures. The effects of global over capacity, and reduced demand was felt especially by Eastern Canadian mills. It was clear that there had to be some rationalization and modernization if the Canadian industry was going to remain globally competitive. Industry was disinclined to commit scarce capital to pulp mill clean up. Recognizing this, and still insisting that the over-riding “polluters pay” principle remain in effect, the Government looked for new strategies to move its environmental agenda ahead. The opportunity presented itself through a programme aimed at regional economic stimulation. In several regions of the country economic activity lagged the rest of the nation and the Government had instituted assistance programmes aimed at the stimulation and creation of new jobs in these economically depressed areas. It was argued that a job saved was equivalent to a new job created, and the opportunity to use these economic stimulation funds to assist in the modernization and rationalization of the pulp and paper sector was initiated. The programme ran only for a few years and was concentrated in Eastern Canada. The western component of the industry complained to government that it should stay out of programmes aimed at modernizing or rationalizing industry, leaving that to the private sector alone, as they argued that government assistance of less competitive components of the industry was distorting, and that if government insisted on being involved, to be fair that the same level of assistance to all should be afforded including retroactive payments to mills that had modernized without government assistance. During the short life of the program, industry modernization/expansion programmes were reviewed by a federal/provincial committee of specialists before the release of any government funds to the project. Included on the committee was an expert from the Department of the Environment to ensure that any opportunities for energy conservation and pollution reduction were included in the modernization plans. Generally the plans submitted were for process changes that made more efficient use of raw materials and hence were less polluting. Indeed the industry’s message to government at the time the regulations were being drafted in the early 1970s, not to require chemical recovery at old sulphite mills, but to allow industry to consider alternative process technologies which would be more cost effective to the mill was borne out in this industry modernization programme where many mills opted for thermal/chemical/mechanical process combinations which allowed for industry to produce pulp more cheaply and utilize a higher proportion of the fibre from their wood supply. This was effectively the adoption of “cleaner production” technology, not for environmental reasons but for business reasons. The regulations enacted in 1971 were being made obsolete by the introduction of new technologies. In fact, the requirements for new mills had not anticipated the kinds of processes that industry was putting in place. Since the regulations permitted an allowable discharge of units of pollution per unit of production, and were linked to the wood processing technology, some of the newer technologies were not covered by the regulations. Experience had also shown that some refinement in the regulations was required. In addition it was determined that it was time to give a definitive date for all mills to meet regulatory requirements. Nearly 20 years had passed since the first national regulations had been promulgated. The strategy of requiring all new investment, or major expansions to meet regulatory requirements had been successful. All 17 new plants complied with the requirements, but the number of existing plants meeting the objectives set for existing plants was not as favourable. The revised regulations issued in late 1991 included provisions for the newer TCMP technologies, and also required full compliance by all existing mills (existing as of 1971) by December 31st 1995. Most mills were expected to comply two years earlier. Also included in the regulations was an innovative requirement that industry undertake and report on environmental effects of their operations. This took reporting requirements beyond reporting on effluent loading, but also required industry to examine the condition of the receiving environment downstream from their facility to determine whether effluent controls were achieving the desirable level of protection. Today the industry is generally in compliance. It prides itself that it has instituted sustainable practices both in its forestry operations and in its production facilities. It is a more competitive industry and better able to respond to the cycles in world demand and price for their product. It still constitutes a major contributor to GNP, and is Canada’s largest industrial employer. The industry (combined pulp and paper and forest industry) added 10,000 jobs in 1997 [22,700 jobs have been added since 1973]. These increases resulted in a total of 261,700 full-time equivalent direct jobs in 1997, including 65,000 employees of pulp and paper companies. There are 155 mills across Canada that are the principal source of employment in over 350 communities. A record $ 9.0 billion (in different forms of taxation) was paid to all levels of government in Canada by the Canadian forest industry. $15.7 billion in compensation and benefits were paid to its employees in 1995 with an average wage per employee of $47,000 in 1997. Four out of every five tonnes of paper produced is exported. In 1996, pulp and paper net exports reached $17.7 billion. The percentage of exports from this sector of industry to total Canadian exports has ranged from 14 to 17 percent over the period 1993 to 1997. The capacity of the industry has increased by almost 20% since the first pulp and paper regulations were enacted in the early 1970s and the reduction of pollution load as measured by Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS) has been reduced by almost 90% as can be seen from the following figure. An industry that has embraced cleaner production options is more efficient, more competitive, and is positioned to continue to participate profitably in global markets. It was driven there by the market place and allowed to make its technology choices by a regulatory regime that permitted those choices to be made.
The Canadian experience with the pulp and paper sector leads one to a number of conclusions as to what might stimulate and encourage “Cleaner Production” and these are set out later in the paper. However there are many differences between the pulp and paper sector in Canada and that in China so Canadian solutions are not necessarily the same as those that will be required to move the Chinese pulp and paper industry toward “Cleaner Production”. For one thing the raw material used in Canada and that used in China are generally different—both technologies require cellulose fibre but in Canada it is largely derived from forest products whereas in China and elsewhere in the world agricultural straw is often the primary raw material. Nonetheless, the principles driving “Cleaner Production” are the same. An enterprise, operating in Lahore, Pakistan, is worthy of note here in terms of its relevance to the problems confronting the pulp and paper sector in China and in terms of making the case that “Cleaner Production” just makes good business sense. This pulp and paper mill, which uses straw as its raw material, had until recently a batch digestion system, without chemical recovery, similar to what the author has seen at pulp mills in China. That company has now installed a continuous digestion system with chemical recovery and did it because it was a good business decision. At the time they made the commitment there were no provincial or national environmental requirements in Pakistan that would have required that kind of investment. The modernization of this facility was receiving investment support from the International Finance Corporation (IFC), the private sector arm of the World Bank Group. At that time one of the authors of this paper was undertaking an independent examination of the application of the IFC’s environmental procedure on behalf of that institution. Packages Inc. was one of the projects selected for testing the survey questionnaire being used in this review and the author had the opportunity to visit the plant in Lahore and review corporate plans with the management of that company. One of the happy benefits of this initiative was that the company recognized in completing the survey questionnaire that it was well along in its corporate business commitment to establishing a corporate environmental management system. The company had been working toward ISO 9000 certification as a means of ensuring quality control and had been gradually instituting the same principles in dealing with their environmental issues. As a result of being a participant in the IFC environmental procedure review they made the decision to put in place a formal environmental management system as a priority. They did so not because they were being required to by any level of regulatory authority or by the IFC but because to them it made good business sense. NORTEL NETWORKS LEADERSHIP Following the conclusion of the Montreal Protocol for the Protection of the Ozone Layer in 1987, Nortel Networks, a global leader in the telecommunications industry, set a corporate goal of eliminating the use of the restricted ozone depleting substance used in their manufacturing processes within three years, their “Free in Three” initiative. They achieved this goal and subsequently made an impressive contribution to the global response to this issue by sharing their technology and assisting other companies in eliminating ozone depleting solvents. Nortel has highlighted their environmental efforts by having a separate part of their web site dedicated to Nortel Networks and the environment. Corporately they have instituted Environment, Health and Safety Management Systems in their operations world-wide, have institute Product Life Cycle Management of their products from design to end-of-life and have established Environmental Performance programmes, with target results being set for their various business units which they subsequently report on. Their successes have been well documented and recognized through numerous international awards since inception of these initiatives in 1985. Nortel Networks states at their web site that “Nortel Networks has demonstrated that sound environmental management can result in financial benefits to the business and added value to customers and other stakeholders. By striving for both economic and environmental efficiencies, we will be a successful business and a responsible member of the global community.” They further state “The ability to demonstrate initiatives that reduce the overall environmental impact of manufacturing, use and disposal of products could provide potential advantages in the market place”. THE INCO STORY In the 1970s, INCO was faced with Provincial environmental control orders that had the objective of improving air quality in the vicinity of their smelter facilities in Sudbury, Ontario. The company response at considerable cost (and with no economic return) was to build a tall stack that improved substantially ground-level impingement conditions but effected no reduction in total sulphur dioxide loading. In effect the company’s air quality problem was transferred from the geographic environs of Sudbury to areas further east as the prevailing winds blew from the west. It was not until it became evident that Canada was suffering a serious acid rain problem and severe acidification was occurring in the soft water lakes of the Canadian Shield that a realization occurred that there had to be massive reductions in the precursors of acid rain. It was not a local problem but a North American problem. More than 50% of the precursors of acid rain effecting the acidification of lakes in Eastern Canada was originating in the mid-west of the United States. The remaining 50% was of Canadian origin and the largest single emission source in North America for sulphur dioxide was the emissions from the INCO operations at Sudbury. INCO had to do more. Stack gas cleaning would have been very expensive and with little return of any economic benefit to the company. The company pleaded for sufficient time to examine new processing alternatives and began a massive research effort examining all aspects of the ore processing cycle. That research resulted in a decision by INCO to completely rebuild their Sudbury, Ontario, smelting complex. With an investment of U.S. $530 million the facility was brought on-line in 1993. INCO has stated “By being innovative in our approach, we designed the new facility not only to curtail emissions but also to improve our productivity and competitiveness. As a result, our Sudbury smelting complex is among the most modern and efficient in the world.” At its corporate web site, INCO gives several examples that demonstrate the company’s view that doing the right thing environmentally is good for business. They have been able to identify business niches including recycling opportunities that they have highlighted under the heading “Recycling is Good Business”, where they make the statement, “Its growth and profitability show that recycling is not only good for the environment, but also offers profitable business opportunities.” It is experience such as this that has given encouragement to the concept of “industrial ecology” which has been discussed in a paper given at this Conference on Ecological industrial networking strategy in Asian industrial development. Some planners are now advocating co-locating enterprises where the producer of a waste commodity can serve as the source of raw materials for another. In Canada, we have experience with the concept of waste exchanges where a registry is maintained so as to be able to put enterprises in touch with one another where one is producing a waste material that might serve as a raw material for another. These examples are by no means unique. They are being replicated around the globe by successful businesses. International financial institutions, both those that are supporting development assistance and those that are supporting capital investment have taken note of the fact that companies that embrace environmental management systems and deploy “Clean Technology” are the ones that are likely to be sustainable in the long run as well as profitable. That is why their due diligence of projects now include consideration of environmental and social considerations. There is considerable convergence occurring amongst this group of important players on this point. It is clear that they have recognized that “DOING THE RIGHT THING IS GOOD FOR BUSINESS!” FINALLY, LESSONS LEARNED FROM THE CANADIAN EXPERIENCE Based on the Canadian experience the following conclusions and recommendations are presented:
WHY CLEANER PRODUCTION? It just makes good business sense. Companies that deploy “cleaner production” and embrace Environmental Management Systems not only benefit the environment but generally benefit the bottom line. They are more efficient in their use of energy, of raw materials and are more profitable. These are the companies that will be around over the longer term because they will remain competitive in an ever more competitive global environment. In remarks made by Mohamed T. El-Ashry, Chief Executive Officer and Chairman of the Global Environment Facility, on the Global Environment and Sustainable Development, presented at the International Conference on Environmental Management, Health and Sustainable Development, in Alexandria, Egypt, in March of 1999, he included the statement, “Where would the world be, what price would countries and their citizens be paying, without the Montreal Protocol on ozone-depleting substances? According to a recent Canadian government study, the overall costs of the Montreal Protocol through the year 2060 will be about $235 billion, compared to likely benefits of $459 billion due to reduced damages in fisheries, agriculture and man-made materials.“ So even on the macro level, business investments involving “cleaner production” have overwhelming cost-benefit advantages. In closing the authors would like to compliment our hosts in the People’s Republic of China for the initiatives that have been taken and are being taken to further the application of “cleaner production”. The City of Taiyuan recently became one of the first, if not the first, municipality in the world to establish municipal by-laws that will encourage the adoption of “cleaner production”. The draft law being developed for the National People’s Congress will be the first national legislation that will require that cleaner production be incorporated into investment decisions. Both the Taiyuan by-laws and the draft legislation on “cleaner production” include the fundamental principles that will make a national strategy for cleaner production work. |
©NDRC 2000-2006