Subject: [TWN] Making profits from pollution-Pt.1
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/* Written May 30, 1994 by twn@igc.apc.org in igc:twn.features */
/* ---------- "Making profits from pollution-Pt.1" ---------- */
NORTH'S ENVIRONMENT INDUSTRY PROFITING FROM POLLUTION
Instead of investing in non-polluting technologies and
products, industrial corporations in Northern countries have
pushed for legislation concentrating on the treatment of
toxic pollution. This has given rise to a powerful and
highly competitive 'environment industry' specialising in
waste treatment and disposal. (First of a two-part series)
By Joshua Karliner
In 1974, DuPont, the largest private producer of toxic waste
in the US, announced: 'We believe that the disposal of
wastes ought to be regulated, instead of regulating the
nature and use of the product or the type of manufacturing
process used.' It was supported by Dow Corporation, the
second largest US producer of hazardous wastes, which argued
that granting the government 'authority to control
production, composition, and distribution of
products...would be devastating to free enterprise
commerce'.
Both companies were responding in US Senate Hearings to
public and government concern about pollution. In reply to
arguments that legislation should focus on the source of the
problems -- that industry should be forced to begin a
fundamental transformation towards clean production -- the
corporations demanded 'end-of-pipe' solutions: investment in
new technologies to dispose of toxic waste more safely.
Dow, DuPont and their allies were largely successful.
Pollution control regulations have been imposed in the US
over the last 20 years -- and a flourishing new sector of
industry has emerged to clean up the toxics produced by the
rest of industry. This 'environment industry' supplies
businesses with the materials, technology and expertise to
comply with the new regulations, and itself operates
commercial waste disposal facilities.
Today, the pollution control and waste treatment industry is
a global giant. While its exact scope is difficult to
define, a study prepared by the Organisation for Economic
Cooperation and Development (OECD) placed the global market
for environmental equipment and services at about $200
billion in 1990 and forecast 50% growth to $300 billion by
the year 2000. The International Finance Corporation, the
arm of the World Bank which lends to the private sector,
used a broader definition to come up with a 1990 figure of
$300 billion, estimating that the industry would double to
$600 billion by the turn of the century. By comparison, the
aerospace industry's annual market is about $180 billion,
while chemical products are estimated at $500 billion.
This new industry is concentrated almost exclusively in the
'brown' end-of-pipe sector of clean-up and control, rather
than the 'green' area of pollution prevention and process
innovation, which makes up less than 1% of the environment
industry in revenue terms. The vast majority of companies
are not investing in clean technologies and products such as
emissions-free, hydrogen-powered cars; non-polluting,
closed-system industrial factories; or solar and wind energy
plants. Instead they create substitutes for
chlorofluorocarbons (CFCs) that are not ozone-friendly and
that contribute to climate change; they spend billions of
dollars on smokestack scrubbers instead of replacing the
smokestack with a clean technology; they build toxic waste
dumps which are delayed-action time-bombs because they will
eventually leak into the groundwater; and they build
hazardous waste incinerators that spew millions of pounds of
poison into the air and leave behind a toxic by-product of
dioxin-laden ash.
As Grant Ferrier, editor of the Environmental Business
Journal, writes, polluters 'pay lip service to proactive
environmental management and pollution prevention, but most
have yet to put their money where their mouth is in terms of
active programmes'. The OECD states that building an
ecologically sound industry is risky 'because clean
technologies involve more fundamental changes in processing;
they will expose companies to greater economic and market
risks and have greater impacts on competitiveness than end-
of-pipe modifications.'
Regulatory Advantage
The environment industry is characterised by an odd
international division of labour, based on a 'regulatory
comparative advantage' among corporations from the three
most powerful economic regions of the world -- Japan, Europe
and North America.
Stringent air quality regulation in Japan has resulted in
Japanese leadership in end-of-pipe air pollution control
technologies, dominated by companies such as Mitsubishi and
Hitachi; whereas a strong European legislative focus on
water quality has given German, Swedish, French and British
companies the edge in creating and selling end-of-pipe water
treatment technologies. In the Netherlands, meanwhile,
efforts to address land contamination issues gave Dutch
companies the lead in advanced soil remediation
technologies. In the US and Canada, legislation led firms to
specialise early on in waste treatment, the largest segment
of the environment industry worldwide.
Indeed, in 1992, the US environment industry as a whole
accounted for about 40% of the world market, brought in
revenues of about $86 billion -- nearly 2% of the country's
gross national product (GNP) -- and employed close to
200,000 people. Roughly half of this turnover came from
60,000 or so small firms. The other half was made up of a
few large firms, many of them polluters in their own right.
For example, four of General Electric's US factories are on
the Environmental Protection Agency's list of the most
dangerous sources of air pollution, although the company has
added air pollution control equipment to its balance sheet,
becoming the top manufacturer in the US and sixth in the
world. DuPont, which produced more than 348 million pounds
of waste in 1989, has developed its own toxic waste
management services, including incineration and deep well
injection.
The military-industrial complex is a growing competitor in
this field. Defence corporations such as Westinghouse, which
profited for years from lucrative nuclear weapons contracts,
are now vying for the billions of dollars the Department of
Energy is handing out to clean up the radioactive mess they
made.
World Waste Watcher
A number of specialist 'environmental service' firms have
taken the lead in hazardous waste disposal: Waste Management
Technologies (WMX), formerly Waste Management Inc; Browning
Ferris Industries; and the Canadian company, Laidlaw.
WMX is the US and world leader, accounting for roughly 10%
of the entire US environment industry's earnings. Dubbed by
one Wall Street analyst as 'the proxy for the environmental
industry', WMX has grown from a collection of small trash-
hauling companies into a global corporation which, in terms
of revenue, is the size of aircraft manufacturer Lockheed,
almost as big as the energy and defence corporation,
Westinghouse, and larger than chemical giant Monsanto or
Weyerhaeuser, the logging multinational. In 1991, it was
ranked 89th among global corporations in terms of revenue,
while its 64,000 employees made it the 66th largest
corporate employer in the world. Its subsidiary, Waste
Management International, is the fastest growing arm of WMX.
With operations in 17 countries in Europe, Asia and Latin
America, its international activities already account for
roughly one-fifth of the corporation's entire revenues.
Like other such companies, WMX has been heavily criticised
by environmental groups in the United States, many of them
from African-American and Latino communities where WMX has
located a disproportionate number of its most hazardous
activities. They have sued the company for civil rights
violations ('environmental racism'), accusing it of
poisoning people and their natural surroundings, of
blatantly disregarding the concerns of local communities, of
destroying opportunities for other, healthier forms of
economic development and of riding roughshod over democratic
decision-making processes.
Further afield, local communities in various parts of Mexico
have managed on at least five occasions to organise
themselves sufficiently to reject WMX plans to build
incinerators and hazardous waste dumps in their areas.
In addition to its conflicts with local communities and
environmentalists, WMX has run foul of government legal and
regulatory agencies. Between 1980 and 1990, the company paid
$45 million in environmentally-related fines, penalties and
out-of-court settlements. During the same period, WMX
received well over 600 citations and orders related to
pollution violations. By the end of 1992, it had been
identified as a potentially-responsible party at 107
Superfund sites -- up from 96 in 1989. In 1992, WMX's
subsidiary Chemical Waste Management pleaded guilty to six
felony violations for 'failure to notify the United States
when reportable quantities of hazardous substances were
released into the environment'. The company agreed to pay a
$11.6 million penalty, in what the US Department of Justice
called the 'largest environmental crimes case ever'.
After reviewing such evidence, a lengthy report by the San
Diego District Attorney concluded that WMX's history
presented 'a combination of environmental and anti-trust
violations and public corruption cases which must be viewed
with considerable concern'. More bluntly, Alabama activist
Kaye Kiker has nicknamed the company 'Criminal Waste
Management'. -- Third World Network Features/The Ecologist
- ends -
About the writer: Joshua Karliner is Executive Director of
the San Francisco-based Environment-Business Bureau.
When reproducing this feature, please credit Third World
Network Features, and (if applicable) the cooperating
magazine or agency involved in the article, and give the
byline. Please send us cuttings.
Published by Third World Network 228, Macalister Road, 10400
Penang, Malaysia. Email: twn@igc.apc.org; Phone:
(+604)373511; Fax: (+604)364505.
1204/94
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