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Sharing of Innovation on Pollution and Recycling: The Case of Eco-Patent Commons

Date posted: 
Nov 29 2009

Technologies that promote pollution control and prevention, recycling, and energy efficiency have already been developed by many industries and companies. These technologies and practices were products of the research and development efforts by industries. There are benefits to be derived from sharing of these technologies. However, some of these technologies are considered to contribute to the competitive advantage of companies.

Responsible Party: 
Regulated Community
I. Objectives or Impact: 

Various technologies and practices to protect the environment have already been developed in many countries. These practices include energy conservation via improved energy efficiency, pollution prevention, and recycling. Interestingly, these practices have shown to be effective and in fact are embraced by the private sector. One of the barriers though is that these practices are considered to be a private asset. Companies may not be willing to share these technologies so as to preserve competitive advantage in terms of cost efficiency. Given this scenario, other countries or companies would not be able to access these successful and deemed effective technologies. However, it is recognized that certain patents on environment practices may not be a source of competitive advantage. These technologies can create greater benefits if recognized as a “common commodity”. Innovation, similar to that attained in the open source technology market, may be had if such commodity is accessible to other parties. The practice aims at encouraging various forms of innovations that will improve efficient use of resources in producing manufactured commodities. Innovations geared towards proper disposal of wastes are also encouraged.

II. Description of the Good Practice (Outputs): 

The Eco-Patent Common was conceived in Switzerland and New York by the World Business Council for Sustainable Development. Its aim is to make certain technologies accessible to potential users, specifically those who would not be able to afford royalty payments. The identified “commons” will be in a searchable website hosted by the World Business Council for Sustainable Development (WBCSD). It will be dependent on pledges made by participating companies. Practices that can be pledged would be those pertaining to (1) energy conservation, (2) pollution prevention, (3) use of environmentally preferable inputs and materials, (4) materials reduction, and (5) recycling.

Currently, the WBCSD brings together 200 international companies with a common commitment of pushing for sustainable development though the sharing of good technologies and disposal practices.  Members are drawn from 30 countries and 20 industrial sectors. 

 

III. Outcomes or Results: 

The establishment of the Eco-Patent Common is expected to benefit both the contributors and the users. Participation in the Eco-Patent will likely produce global recognition for businesses pursuing activities and innovations geared towards sustainable development. At the same time, by making a practice or technology accessible, it can be a catalyst for further innovation by other users. Also, as opposed to making the innovation public or open to all, the eco-patent would still give the contributor a certain amount of control. The contributor can terminate use if users will assert patents against the contributor. As of date, various companies pledged to support the Eco-Patent Commons. IBM, Nokia, and Sony were among the first group of companies that gave commitment to the Eco-Patent Commons. Recently, Xerox, DuPont, and Bosch pledged their support to the endeavor. The newly pledged patents include technology that converts non-recyclable plastics into fertilizers, automotive technologies that would enable efficient fuel consumption, and technologies that enable recycling of optical discs.

A. Policy Framework: 

Laws of participating countries need to be harmonized to jointly recognize the possibility of participating in the Eco-Patent endeavor. Agreements, especially between private sector contributors and users, pertaining to use, scope, termination, and other conditions of use need to be spelled out clearly.

B. Budgetary and Financial Requirements: 

(not applicable)

C. Human Resources: 

In promoting this endeavor, various expertise would be required. In particular, an over-all body composed of experts from various fields need to be established. Particularly, experts on international law and Intellectual Property Rights might be needed.

D. Material Resources: 

The entire system might also be information-intensive. A sole unit devoted to collecting, cataloguing, disseminating, and monitoring the flow of technology contributions need to be established.

E. Institutional Support: 

The endeavor was made possible due to the support and commitment extended by the private sector. With novel technologies, financial support from the government might also be required. This endeavor will also be heavy on government involvement, since laws on IPR and patents need to be harmonized. Inputs and linkage with the World Intellectual Property Office (WIPO) might be required

F. Planning, Scheduling or Sequencing of Activities: 

(not applicable)

V. Further Information: 

World Business Council for Sustainable Development (www.wbcsd.org)

Re-Evaluating and Continuous Assessment of Biodiversity Issues and the EIA: The Case of Vietnam

Date posted: 
Nov 20 2009

The Environment Impact Assessment is ideally an integral component of a project's planning process. It identifies potential risks given the present scenario and the perceived impact of the project's activities. Given this, the EIA gives recommendations given the set of information available during the time of the assessment. However, once the project takes place, a review of the EIA is seldom made. There is a need to revisit the EIA especially if perceived environment conditions change.

Responsible Party: 
Enforcement Agency
I. Objectives or Impact: 

There is a tendency for the Environment Impact Assessment (EIA) process to focus primarily on technical aspects (e.g. pollution created, emission). However, the process sometimes misses on actual environment concerns will surely be affected by the project, like relocation or biodiversity. Worse, concerns on economic development often takes the prime seat while issues related with conservation and biodiversity are placed aside. The problem is that environmental damages might prove to be irreversible. Also, biodiversity issues that seem to be trivial at initial glance might become big risks as an economic activity or project progresses. The case of cement manufacturing in Ha Tien Plane in Vietnam, a critical ecosystem, displayed the need to continually assess impacts of economic activities on biodiversity. A change in the treatment of the EIA, from being a mere procedural step in project implementation to a guide that advises and gives warning to potential impacts, is highlighted.

II. Description of the Good Practice (Outputs): 

A Swiss-based cement company, Holcim, approached the International Finance Corporation (IFC) about a proposed greenfield cement plant in Hon Chong in 1993. Around that time, Vietnam was experiencing economic growth, and was opening its country to foreign investment. Specifically in the cement industry, the supply of cement from two initial operators was already being overtaken by demand. The proposed site of Holcim was highly scenic, which actually supports tourism activities. However, the view then was that the area appeared to be unproductive. In fact, the site did not appear to meet the IFC’s natural habitat standard. Interestingly, the initial EIA undertaken for the proposed cement factory noted that there is little wildlife in the area and lack of birdlife. The EIA also focused on technical issues (e.g. emission), with modest attention to biodiversity. Issues on biodiversity were raised but it was concluded that the need for cement was of prime importance relative to conservation. With the operation of the cement plant, it was realized that construction and related costs were higher than expected. Also, the production volumes were lower compared with the projected volumes. At the same time, the Asian Crisis halted the growth of the cement industry. Around that time as well, stakeholders slowly learned and realized the biological value of the affected area. Simultaneous with the cement plant’s operation, the IFC revisited the adequacy of the earlier EIA. It was learned that the landscape of the area is one of the world’s most threatened karst landscape. The biodiversity value of the area also changed due to what was happening in the other parts of the region. Grassland habitats were lost throughout the region due to the expansion of shrimp farming and rice cultivation. As grasslands slowly disappear in other areas, the endangered Eastern Sarus Crane (the world’s tallest flying bird), congregated in larger numbers in other areas, specifically the Holcim Vietnam site.

III. Outcomes or Results: 

Given the “change” in the biodiversity value of the site, Holcim and the government were placed in a predicament. The government’s priority was still economic development. At the same time, Holcim holds mineral rights on the limestone of the site. In 1999, the IFC commissioned a biodiversity assessment of the site, and the entire Hon Chong region. The assessment recognized the need for an integrated conservation initiative, encompassing the adjoining limestone, wetland, and sandstone. Though Holcim recognized that the concern is region-wide and not limited to its site, it realized that its corporate image could be affected. The biodiversity issues that emerged prompted Holcim Vietnam and the IFC to form a partnership with the International Crane Organization. Their primary aim was to demonstrate that maintaining the natural habitat could be more economically valuable than pursuing competing activities like shrimp and rice cultivation. An area (Phu My) was finally identified as an area for conservation management. It showed to be economically viable for the area. Other small-scale industries from conservation management also emerged like handicrats-making. The development of the area won the financial support from the World Bank Development Marketplace. Local government support is also strong for the conservation management efforts in the area. The linkage between IFC and the Industrial Bank started in 2004, with the IFC’s initial investment of US$ 52 million on the bank. The first-phase of the risk-sharing arrangement in 2006 made possible the creation of a facility that has been used to leverage a portfolio of US$ 65.7 million of energy efficiency equipment and project loans for small and medium-scale projects. Projects typically pursued were industrial boiler retrofitting, wasted heat recovery, co- and tri-generation projects for district heating, power saving, and optimization of industrial energy use. The initial efforts of the IFC and Industrial Bank attracted two prominent international co-investors, namely the Hang Seng Bank of Hong Kong and Singapore’s GIC Special Investments. In March 2008, participating banks in the CHUEE program approved 70 energy efficiency loans, with a loan portfolio of US$ 243 million. Interestingly, projects financed by the loans contribute to a net annual reduction of greenhouse gases of 4.3 million tons.

A. Policy Framework: 

There is a strong need to review how the EIA is conducted, particularly on the issue of securing commitment to the measures prescribed by the EIA. Also, regulatory and implementation polices that make the review of EIAs possible should be in place, with the fact that economic activities can surely have unforeseen impacts.

B. Budgetary and Financial Requirements: 

The concerned government agency needs to set up a fund that will finance regular review of selected EIAs, particularly large-scale and huge-impact projects.

C. Human Resources: 

There is a need to have a strong monitoring staff that traces whether the stakeholders comply with the measures identified by the EIA and the commitments given by respective parties. Also, given that economic activity could have irreversible consequences, the environment agency should have skills that would allow them to take preventive actions.

D. Material Resources: 

Given that a preventive action is the ideal stance, resources that would enable the regulator to track commitments and performance are necessary. A sole unit, equipped with a good data base system, is required in tracking industry actions.

E. Institutional Support: 

Partnerships with the local government and other stakeholders (NGOs, civic groups) are required to continuously keep track of biodiversity concerns. In the case of Holcim, the clamor for a review of the EIA came from the scientific community.

The Clean Water Act Law of the Philippines: The Use of Incentives to Promote Investments

Date posted: 
Jan 26 2010

The Philippines is once known to be relatively abundant in water resources. However, the pressures of population growth, urbanization, and industrialization placed a toll on the resource. One of the most pressing concerns is the increased competition in the various uses of water. There is also serious concern regarding watershed degradation and unmonitored extraction of groundwater by illegal users. The Clean Water Act Law of the Philippines aims to promote and encourage the protection of the country’s water resources.

Responsible Party: 
Compliance
I. Objectives or Impact: 

The Philippines is once known to be relatively abundant in water resources. However, the pressures of population growth, urbanization, and industrialization placed a toll on the resource. One of the most pressing concerns is the increased competition in the various uses of water. There is also serious concern regarding watershed degradation and unmonitored extraction of groundwater by illegal users. At the same time, pressing issues on water pollution is present. From a World Bank study, 90% of the sewage generated in the country is not treated. Major rivers and waterways are also confronted with pollution and degradation due to the encroachment of settlers, especially in urban centers. The Clean Water Act Law of the Philippines aims to promote and encourage the protection of the country’s water resources. To fully encourage local governments, water districts, communities, and the private sector to partake in efforts on reducing water pollution, provisions on incentives are provided for in the law.

II. Description of the Good Practice (Outputs): 

The Clean Water Act provides incentives to local government units, water districts, enterprises, private entities, and individuals to develop or undertake efforts that would result to effective water quality management and pollution abatement. Specifically, it encourages efforts on wastewater treatment, cleaner production, and adoption of technologies that minimizes waste. Incentives specifically mentioned in the law are tax and duty exemption on imported capital equipment and tax credit on domestic capital equipment.

III. Outcomes or Results: 

The guidelines and procedures on availing the incentives provided by the Clean Water Act have just been recently formulated. However, from the consultations conducted by the Department of Environment and Natural Resources (DENR) with various stakeholders (manufacturers, private sector, NGOs, and local government units), positive response on the incentives was generally elicited.

A. Policy Framework: 

An initial barrier that was encountered was the Clean Water Act’s harmonization with preceding laws on incentives and taxation. For instance, heavy discussions with respect to exemption from Value-Added Tax (VAT) occurred. Also, it was realized that other government agencies are tasked on evaluating the merits of an application for tax exemptions. In the case of the CWA, heavy coordination with other government agencies, specifically with the Bureau of Investments (BOI), was necessary. Another barrier encountered is that though the law mentions the involvement of private lending institutions, it was discovered that lending institutions do not have a regular source of funding for environment projects like waste water treatment and pollution abatement. The funds they are using for existing environment projects are dependent on support given by various international donor agencies.

B. Budgetary and Financial Requirements: 

Another input that was identified as necessary is the availability of personnel within the DENR who can assess whether an application merits the CWA incentives. Also, it was also important to have a unit or regular staff that will assess the performance (in terms of pollution control, discharge) of those who would avail of incentives.

C. Human Resources: 

A complete program on evaluation to monitoring of CWA-related investments and efforts would require funding for regular operations. It was identified that regional DENR office need to have resources in order to conduct evaluation and monitoring of those granted with CWA incentives. Also, additional staff needs to be hired in order to accommodate the administrative tasks related with accommodating applicants.

D. Material Resources: 

The additional administrative tasks related with evaluating the applications would require additional resources like vehicles for inspection and evaluation, and an information and data base system for keeping track of the performance of those granted with the incentives. At the same time, the Bureau of Investment would also require an information system that will aid whether the incentives given were really spend on CWA-related activities.

E. Institutional Support: 

Partnerships with the local government and other stakeholders (NGOs, civic groups) are required to ensure that performance actually improves due to the provision of incentives. Also, regular coordination with other agencies like the Bureau of Internal Revenue and the Department of Finance needs to be undertaken.

F. Planning, Scheduling or Sequencing of Activities: 

Typical programs that provide subsidies or incentives for environment programs have a gestation period. This provides an incentive to stakeholders to immediately implement their program their investment plans. In the case of the Clean Water Act, less than ten years is provided for the the provision of incentives.

V. Further Information: 

Bureau of Investment. www.boi.gov.ph Department of Environment and Natural Resources. www.denr.gov.ph

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