Subject: [TWN] Making profits from pollution-Pt.2
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/* Written May 30, 1994 by twn@igc.apc.org in igc:twn.features */
/* ---------- "Making profits from pollution-Pt.2" ---------- */
NORTH'S ENVIRONMENT INDUSTRY EXPANDS TO THIRD WORLD
Eager to profit from potential demand for clean-up
technologies in the industrialising countries of Asia and
Latin America, the North's 'environment industry' is trying
to ensure that Southern governments follow the legislative
path already taken by the North of mitigating pollution
rather than eliminating it. (Second of a two-part series)
By Joshua Karliner
As the environment industry's rapid growth in the North
begins to level off, it is expanding elsewhere. The
industry's entrance into Third World countries is the
culmination of a three-stage process of exporting toxic
industrial development from North to South:
o First, economic 'development' is exported through free
trade policies and financing by multilateral and bilateral
agencies;
o Secondly, environmental regulations to control the
excesses of this development are introduced;
o Finally, 'environmental' technology and services are
exported to service these regulations.
As free trade policies have prised open Third World markets,
transnationals have moved into countries pursuing export-
oriented industrialisation. This has resulted in the rapid
emergence of environmental problems which, until recently,
existed largely in Northern industrialised countries.
For example, the highly toxic chlorine industry, which is at
the root of much of the industrialised North's hazardous
waste crisis, is stagnating in the US and Western Europe.
But leading manufacturers of chlorine -- Dow Chemical,
Solvay and ICI -- are expanding into the Third World,
investing in chlorine production in countries such as
Brazil, Mexico, Saudi Arabia, Egypt, Thailand, India, Taiwan
and China.
In addition, many of the factories, technologies and
products that transnational corporations have moved to the
South are either banned or under pressure for environmental
and health reasons in their country of origin. For example,
DuPont sells leaded petrol throughout Latin America,
although it is banned in the US, Canada and elsewhere.
Similarly, Mitsubishi set up a 'rare earth' processing
factory in Malaysia to make chemicals for colour television
screens, a process which had been judged too dangerous to
site in Japan. Mitsubishi then dumped plastic bags of
radioactive waste behind the factory.
The most blatant example of these double standards is the
cluster of maquiladoras on the Mexico-US border -- free
trade zones where US transnationals, including General
Motors, Union Carbide and Motorola, have set up thousands of
plants to take advantage of low wages, encouraged by lax
laws concerning labour unions, workers' health and safety
and environmental compliance.
Export the Legislation
Until recently, little was done in newly-industrialising
countries to control, regulate or manage any of the waste
produced as a result of this form of development. In the
last five years, however, the pollution has become
increasingly difficult to ignore. Spurred on by local and
international environmental protests, and by international
agreements on environmental issues, a number of Southern
governments are beginning to emulate their Northern
counterparts by legislating, but they are importing
regulatory models from the US, Europe and Japan. Mexico, for
example, passed 77 new environmental regulations in the late
1980s and early 1990s -- many of them based on US and
European law. Similar legislative initiative took place
during the same period in Malaysia, Thailand, Indonesia,
Chile and Poland.
The US and other countries are striving to export their
regulatory models, because as industry representative Levi
Richardson points out, 'regulatory transfer leads to
technology transfer'. With this in mind, the US Agency for
International Development (USAID) and the Environmental
Protection Agency are training and building relations with
policy makers and bureaucrats from various Asian countries,
who will develop their nations' regulatory regimes. The
Japanese government is carrying out similar programmes.
The Asian Development Bank estimates that the Asia Pacific
region will need to spend between $12 billion and $70
billion a year to mitigate the environmental damage due to
the region's economic development. The governments of Hong
Kong, Taiwan and South Korea, for example, are planning to
spend a total of $5 billion between them over the next five
years to develop municipal and industrial waste management
systems. In Malaysia and Thailand, the environment
industry's current annual private sector market of $210
million in each country, is expected to grow by 15 to 25%
annually. The private sector Thai market alone is expected
to reach $1.5 billion by the year 2000.
The 1992 environmental market in the six largest Latin
American countries was estimated to be $2.5 billion, 40% of
which was supplied by imports; this market is expected to
grow by 2.5% in the next few years. In Mexico alone, 1992
expenditures of $614 million are projected to jump to $10
billion in less than 20 years.
Meanwhile, it is estimated that Poland's 'ecological
policy', if implemented, would provide a $260 billion market
over a 30-year period.
Export the Clean-Up
'Environmental' technology is therefore being exported to
Asia, Africa, Latin America and Eastern Europe, much of it
financed by multilateral and bilateral aid agencies. Part of
this 'aid' for 'development' will be given out in contracts
to transnational corporations. Urging US taxpayers' support
for the Global Environmental Facility, a joint World Bank,
United Nations Development Programme (UNDP) and United
Nations Environment Programme (UNEP) fund, a US Treasury
official recently told a US Congressional committee:
'The environmental services industry... stands to derive
significant benefits from the MDBs' (multilateral
development banks) greatly increased emphasis on
environmental work...That is one of the benefits we expect
to get from our participation in the Global Environment
Facility.'
Mexico expects to spend some $2.5 billion to address air
pollution problems in the country's capital, almost half of
which will come from foreign governments and MDBs. Hundreds
of millions more dollars will be allocated by the same
sources to install hazardous waste dumps, incinerators, air
pollution control devices and waste water treatment
facilities to 'clean up' the border area with the US.
Some of the technology exported through aid is outdated. For
instance, after a decade of popular protest, hazardous waste
incineration is declining as the preferred method of waste
disposal in the United States, and the Clinton
administration has proposed tightening US government
controls on it. Yet incinerator exports to the South are
rising.
Competing for Global Waste
Although US, European and Japanese companies still tend to
specialise in the sector emphasised by the regulation of
their country of origin, they are also viewing the globally-
expanding environment industry as an area of competition.
Some mergers, joint ventures and licensing agreements link
US, European and Japanese companies, but general patterns of
'environmental' investments reflect traditional geographic
spheres of interest. According to Harvey Himberg, of the US
Overseas Private Investment Corporation:
'The large American presence in the mining, petroleum, and
industrial sectors, in the (Latin American) region provides
US suppliers with many clients who are already familiar with
their products.'
Member countries of the European Union have an advantage in
all sectors of the business in Eastern Europe, while South-
East Asia received more than 80% of Japan's environmental
equipment exports in 1992.
Competition across the trade blocs takes several different
forms as the world's most powerful nations try to capture
the largest share of the emerging 'environmental' markets of
the South and of Eastern Europe. Some countries are already
taking measures to give their industry a 'competitive' edge
in the global market. The US Congress, for example, is
considering legislation to facilitate the export of US
environmental technologies.
As well as attempting to sell regulatory regimes to client
countries, bilateral aid agencies are also directly
advancing the interests of their national corporations. For
example, a USAID contractor charged with promoting small and
medium-sized US business in Eastern Europe recently spent
two weeks guiding corporate giants WMX and Westinghouse
through Eastern Europe's bureaucracies, in an attempt to
secure environmental clean-up work for them. US Secretary of
Commerce Ron Brown told a gathering of environmental
industrialists recently:
'The more pressure that we put on ourselves, on Mexico and
on every place else in the world to do something about the
environment, the more they're going to reach out for
environmental technology. And where are they going to get
it? They're going to get it from us!'
Profiting from Clean-Up
Cleaning up toxic pollution can contribute to environmental
and human health in many countries. Few would deny that it
is essential to clean up the toxic disasters created by the
maquiladoras on the Mexico-US border or the excesses of
industrialisation in places such as Brazil, Poland,
Thailand, South Korea or Taiwan. In particular, the critical
need for potable water and waste water treatment facilities
in the Third World is one which the environment industry
could help meet.
Yet by applying discredited technologies such as
incineration, the environment industry is concealing the
toxic economic development model being used in the South
behind a thin green veil of environmental management. While
the environment has become big business, the environmental
crisis has continued to escalate. What corporate
'environmentalists' and government bureaucrats often hail as
the solution has become part of the problem.
Since 'corporate environmentalism' has no incentive to make
the requisite changes towards clean production on its own,
and transnationals wield such power over the regulatory
process, pressure for clean production is likely to continue
to come from the communities around the world whose health,
livelihoods and ecosystems are threatened by these
'environmental' corporations. -- 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.
1205/94
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