Chapter 2 Current Status and Issues of IEM · 2. Current Status and Issues of IEM EX CORPORATION 2-2 Machinery and tool manufacturing Pulp and paper manufacturing Other industries

Chapter 2

Current Status and Issues of IEM

The Study on Environmental Management with Public and Private Sector Ownership (EMPOWER) JICA

2. Current Status and Issues of IEM EX CORPORATION

2-1

2 Current Status and Issues of IEM

This chapter identifies current status and issues of Industrial Environmental Management

(IEM) by company, industry association, environmental NGO, government organization

involved in IEM promotion. The section 2.1 deals with current status and issues for

individual companies based on the results of company survey conducted under the

EMPEOER project.

The section 2.2 reviews status and issues of IEM promotion by NGOs and industry

associations using information obtained from the hearing survey conducted under the

EMPOWER project. Moreover, the section 2.3, status and issues on promoting IEM by

governmental organizations with the same survey results. In the section 2.3, roles and IEM

policies of governmental organizations are shown by policy area.

Finally the section 2.4 summarizes issues on promoting IEM in Philippines comprehensively.

2.1 Current Status and Issues of IEM by Individual Companies

2.1.1 Interview surveys on IEM activities by individual companies

(1) Target Industry

Under the EMPOWER project, an interview survey was conducted for CEOs and PCOs (Pollution Control Officer) to gather information on current IEM activities. The target industries are as follows:

� Food industry

- Beverages - Coconut-based industries, edible oil and spirit distillation - Food processing (tuna, small scale food processing)

- Sugar milling and refining

� Ceramic industry

- Cement manufacturing - Glass and glass products

� Chemical products (industrial and agricultural)

- Cosmetics - Pharmaceuticals - Soap and detergents - Plastics and rubber

� Metal processing

- Electroplating and metal finishing - Foundry and forging



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� Machinery and tool manufacturing

� Pulp and paper manufacturing

� Other industries

- Petroleum products - Offset printing - Spinning, textiles and dyeing

(2) Industries’ Impacts on the Environment and Issues on IEM

Table 2.1.1 summarizes general characteristics of industries’ impacts on the environment and issues on IEM.

Table 2.1.1 Target industries’ impacts on the environment and issues on IEM

Impacts on the Environment Issues on IEM

Food processing

Water-use intensive industry

Any processes – any sub-sectors, involves with discharging organic effluents. In many cases, the processes use steam that generates exhaust gas from boilers. Wastes such as residues and sludge also are generated.

Reduction in volume and environmental load of effluent Establishment of wastewater treatment plants Exhaust gas control (fuel conversion) Waste treatment Energy conservation Recycling products (containers and packaging)

Ceramic industry

Energy intensive industry Exhaust gas from kilns and glass melting furnaces is the major problem. In case of glass manufacturing, grinding sludge is generated.

Re-circulation of cooling water Exhaust gas control Waste control (including hazardous waste) Energy conservation

Chemicals Varies by factory. Chemical and chemical material factories emit exhaust gas from boilers, discharge wastewater, and generate sludge. Pharmaceuticals, polymers, plastic processing have low environmental load.

Reduction in volume and environmental load of effluent Exhaust gas control for boilers Waste management (including hazardous waste) Energy conservation

Metal processing

Wastewater and inorganic sludge containing toxic substances are generated through metal processing/treatment. Waste molding sand is generated. Exhaust gas from electric furnace.

Reduction in volume and environmental load of effluent. Wastewater treatment and sludge disposal Exhaust gas control from electric furnace. Energy conservation

Machinery / tools

Organic wastes such as waste lubricant and waste solvent are generated through assembling

Waste management Energy conservation

Pulp / paper

Water and energy intensive industry A large volume of organic effluent is discharged. A large volume of residues is also generated. Exhaust gas from boilers

Reduction in volume and environmental load of effluent. Wastewater treatment and sludge disposal Exhaust gas control from boilers Energy conservation



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Impacts on the Environment Issues on IEM

Other Varies by industry Exhaust gas and wastewater for lubricant. High effluent load (water color) due to dyeing for fabric/textile industry. Lubricant and waste inks for printing industry

Abovementioned measures, depending upon industry types

Individual companies’ degree of interest - ratio of respondents checked - in various

environmental issues by industry type is shown in

Figure 2.1.1. Ceramic industry, including cement industry, which is responsible for large

amount of CO2 emissions, showed high interest in GHG emissions. Interest in air pollution

is obviously corresponding to usage of thermal equipment/facilities; food, metal processing,

chemical, paper & pulp, and foundry industries are highly concerned about the problem. As

for water pollution, food, metal, chemical, paper & pulp, foundry industries hold high

interest.

Hazardous waste and chemical substances did not draw much attention from all industries.

Machinery industry showed high interest in noise and vibration but not in other

environmental problems. Industries that are pollution sources are highly concerned about

the pollution.

0.00

0.20

0.40

0.60

0.80

1.00

Green House

Effect

Air Pollution

Water Pollution

Industrial Waste

Hzw

Chemical Material

Noise and Vibration

Odour

Food

Ceramics

Chemical

Steel

Paper&Pul

Machinery

Others

Figure 2.1.1 Degree of Interest in Environmental Problems by Industry Type



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(3) Evaluation Method of Current IEM at Individual Company

Elements of IEM at each company are roughly divided into 1) internal organization/system

and 2) implementation of concrete IEM measures.

Ideal IEM in terms of internal organization/system is;

a. The business owner/top executive integrates the “environment” in business

management.

b. The business owner/top executive understands environmental problems and gives

necessary instructions.

c. The business owner/top executive assigns staff or establishes a section for energy

conservation and/or environmental management.

d. In-house codes or rules on environmental management are documented.

e. Data necessary for environmental management is well managed within the

company.

f. EMS is established to manage, report and check above data (acquisition of

ISO14001 certificate).

g. An environmental performance report is prepared.

h. An environmental performance report is published and disclosed to the public.

Likewise, ideal IEM in terms of implementation of concrete IEM measures is;

a. Rationalize water usage and implement wastewater treatment (comply with effluent

standards).

b. Implement exhaust gas control (comply with emission standards).

c. Conduct waste prevention, recycling, and waste treatment.

d. Conduct hazardous waste prevention, recycling, and treatment.

e. Take back waste products and containers.

f. Manufacture environmentally sound products.

g. Energy conservation

h. Introduce environmental accounting.

i. Implement green procurement



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Though there are not many companies that have actually implemented all of above items

even in industrialized nations, they are set as ideal figures. Level of IEM implementation by

Philippine companies ware surveyed in line with these ideal figures.

(4) Structure for Environmental Management

Organizational structure for environmental management in companies is shown Figure 2.1.2.

The company that has neither environmental management section nor internal committee

takes up approximately 35% while the company that has both environmental section and

corresponding internal committee is 31%. All companies in ceramic industry and

paper/pulp industry categorized as apparatus industry possess some kind of environmental

management system. Four out of five companies in the machinery industry that are small

and do not equip a continuous manufacturing process do not have any means of

environmental management system at all.

Both, 31

One of two, 34

None, 35

Figure 2.1.2 Ratio of Companies with Environmental Management System

(5) Appointment of PCO and Establishment of Environmental Section

Although DAO92-26 of DENR requires any enterprises emitting pollutants to appoint PCO,

only 73 companies answered that they have PCOs.1 The companies with no answer are

those not having PCOs. When there is no PCO, a business owner or company staff

answered the questions prepared for PCO from the PCO’s viewpoint. Therefore, attention

should be paid that all the responses to the questions for PCOs are not necessarily from

PCOs.

1 Companies in the machinery industry that do not release pollutants are not required to appoint PCO.



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Figure 2.1.3 Ratio of Companies with Appointment of PCO

As answers by PCOs, 52 companies responded that there is a section specifically manage

environmental matters while as answers by business owners/top executives, 59 companies

responded so. The former is slightly less than the latter.

Ratio of the companies with the environmental section against the companies surveyed in the

same sector is shown in Figure 2.1.4. The ratio of the pulp and paper industry is 1.0, which

means all the companies surveyed in the said sector have established an environmental

section. The ratio of the ceramic industry is 0.87. It is clear that a company in the

apparatus industry is likely to establish an environmental section. The ratio of the

machinery industry, which has less impact on the environment compared to others, is very

low.

Fu ｌ l-time,

48

Part-time

only, 2

No-answer,



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0.500

0.875

0.387

0.500

1.000

0.200

0.636

0.000

0.200

0.400

0.600

0.800

1.000

1.200

Food Ceramics Chemical Steel Paper&Pulp Machinery Others

Figure 2.1.4 Ratio of Companies with Environmental Section by Industry

(6) Environmental Management System (EMS)

The number of the companies that have established EMS is 32 as shown in Figure 2.1.5;

majority of the companies have not established yet.

yes

32%

No

60%

No answer

8%

Figure 2.1.5 Ratio of Companies with Establishment of EMS

The ratio of the companies that have established EMS against the companies surveyed in the

same sector is summarized in Table 2.1.2. The ratios of the ceramic industry and the pulp

and paper industry that are the apparatus industry with high environmental load are low.

Establishment of EMS is a challenge to many companies.



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Table 2.1.2 Ratio of EMS Implementation by Industry

Industry Sector

# of Company Surveyed

Ratio of EMS Implementation

Ratio of Env. Report Published

Food 30 0.33 0.50

Foundry & forging 8 0.38 0.38

Chemical 31 0.39 0.55

Metal 10 0.40 0.50

Pulp & Paper 5 0.20 0.60

Machinery 5 0.00 0.20

Other 11 0.18 0.45

Total 100 0.32 0.49

As for the preparation of an environmental report, 49 companies responded that they prepare

it as shown in Figure 2.1.6. Although the purpose of the report preparation was not

surveyed, the report is assumed to be prepared for environmental management and reporting

to the business owner/top executive. The report does not seem to be for public and

customer relations because only 6 companies out of 49 make the report open to the public.

yes

49%

No

37%

No answer

14%

Figure 2.1.6 Ratio of Companies with Environmental Report Prepared

(7) EMS Implementation Level

Items on EMS surveyed are listed in Table 2.1.3. When a company responded that they

implement all the 15 items, it gets EMS implementation level of 1.00.



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Table 2.1.3 Survey Items on Environmental Management System

1. Is there a unit or section in your company that is specifically assigned to work on environmental management?

2. Is there a company-wide committee comprised of employees to work on environmental management?

3. Has EMS been established in your company? (not necessarily require ISO 14001)

4. Does your company prepare an annual environmental report?

5. Is the report disclosed to the public?

6. ISO 14001 Certification

7. Identification of environmental load

8. Setting numerical targets for reduction in environmental load

Which items from the following have been implemented in your company?

9. Evaluation of environmental performance of the company (target monitoring)

10. Preparation and dissemination of environmental reports

11. Environmental accounting

12. Staff training on environmental management

13. Has your company estimated actual cost reduction due to energy conservation?

14. Has your company estimated actual cost reduction due to water conservation?

15. Has your company estimated actual cost reduction due to waste minimization?

Figure 2.1.7 shows number of companies by IEM implementation levels.

12

14

30

2021

3

0

5

10

15

20

25

30

35

0 0.2< ≦0.2 ≦0.4 ≦0.6 ≦0.8

Figure 2.1.7 Number of Companies by EMS Implementation Level

Only 24 companies implemented nine or more items out of 15 (60% or more). There are

only 44 companies implemented 6 or more items out of 15 (40% or more). The rest of the

companies (56) are evaluated as low in EMS implementation level.



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Actual numbers of the companies that implement each EMS item are shown in Figure 2.1.8.

There are only 32 companies that establish EMS (those checked EMS item #3). As for the

management of data, which is basics of EMS, majority (73 companies) identifies

environmental load (item #7) but not cost reduction by IEM measures. Cost reduction by

energy saving (item #13), water conservation (item # 14), and waste minimization (item #15)

are practiced by 50, 35, 35 companies respectively. The companies surveyed seem to be

weak in management of cost data relevant to environmental management.

Less than half of the companies surveyed set targets (item #8) and evaluate their

environmental performance (item #9), which are important items to EMS; target setting and

performance evaluation are practiced by 46 and 41 companies respectively.

59

37

32

49

6

10

71

46

41

44

19

52

50

35

35

0 20 40 60 80 100

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Item

s

Number

Note: Item number in the figure corresponds to that in Table 2.1.3

Figure 2.1.8 Number of Companies Implementing EMS by Item

Table 2.1.4 shows average ratio of EMS items implemented by the companies by industry.

As one can see, the ratio of the pulp and paper industry is higher than other industry sectors,

and that of the metal processing industry and the machinery industry is lower than other

industry sectors.



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Table 2.1.4 Ratio of EMS Items Implemented by Industry

Industry sector Average Ratio of

EMS Items Implemented

Standardized Average Ratio (Total average =

1.00)

Food 0.404 1.07

Foundry & Forging 0.433 1.15

Chemical 0.400 1.06

Metal 0.273

0.72

Pulp and paper 0.547 1.45

Machinery 0.219 0.58

Other 0.367 0.97

Total 0.378 1.00

(8) Implementation of Environmental Management

1) Survey Items

There are many items identified in the survey; this section summarizes basic items relevant to

environmental management. Table 2.1.5 shows the 21 items relevant to environment

management. In general, the more a company selects the items, the better it implements

environmental management. Attention should be paid however, a ratio of the items

implemented by a company is low when it does not put so much environmental load.

Table 2.1.5 Selected Survey Items

1. Facility investment to control emissions and effluents

2. Implementation of waste minimization

Which items from the following have been implemented in your company?

3. Implementation of energy-saving

4. Green procurement

5. Green product design

Water conservation/ Effluent control

What measures does your company implement to reduce water consumption?

6. Minimize water consumption by reviewing operation

7. Recycle used water

What measures does your company implement to reduce water pollutants?

8. Reduce raw materials by reviewing production processes and lines

9. Use input materials with less toxic substances or precursors of pollutants

10. Reduce input materials by introducing cleaner production technology

11. Install wastewater treatment facility



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Emission Control

What measures does your company implement to reduce air pollutants?

12. Reduce raw materials by reviewing production processes and lines

13. Use input materials with less toxic substances or precursors of pollutants

14. Use fuels with less toxic substances or precursors of pollutants

15. Reduce input materials by introducing cleaner production technology

16. Install gas treatment facility/ equipment

Non-hazardous Industrial Solid Waste and Hazardous Industrial Waste Management

What actions has your company been taking to properly manage waste?

17. Measure and record quantity of waste generated by waste type

18. Analyze chemical characteristics of wastes 19. Package and label HW for storage and

transportation 20. Treat waste at on-site facilities 21. Check the off-site treaters to ensure proper

final disposal of waste

2) Level of Environmental Measures Implementation

Figure 2.1.9 shows distribution of ratios of the items implemented by the target companies.

The average ratio is 0.35. The companies whose ratio is equal to or more than 0.6 are only

11. Those equal to or more than 0.4 are still 33; the ratios of the items are by and large low.

3

25

39

22

10

1

0

5

10

15

20

25

30

35

40

45

0 0.2< ≦0.2 ≦0.4 ≦0.6 ≦0.8

Figure 2.1.9 Number of Companies by Ratio of Environmental Management Items Implemented

Figure 2.1.10 shows number of the companies that practice the corresponding items in Table

2.1.5.



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58

79

73

21

21

65

52

29

22

22

55

15

12

18

13

28

54

29

26

25

11

0 20 40 60 80 100

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

Figure 2.1.10 Number of Companies Implementing Environmental Management by Measure type

There are 56 companies that answered they have invested in pollution control facilities. The

number corresponds to the 55 companies that installed the wastewater treatment facility (item

11). Companies implementing waste minimization (item 2) are 79, and energy saving (item

3) are 73; most of the companies are implementing these two measures. In addition, those

conducting water use rationalization (item 6, 7) are 65 and 52 respectively.

The items 8 through 11 are relevant to wastewater management. Among the measures,

installment of a wastewater treatment facility (item 11) was conducted by 55 companies

while reduction of environmental load in the production process (items 8, 9, 10) by less than

30 companies.

The items 12 through 16 are relevant to air pollution management. Among the measures,

installment of flue gas treatment facility (item 16) was implemented most (28 companies)

while cleaner production was introduced by only 13 companies.

The items 17 through 21 are relevant to industrial waste management. Identification of

waste quantity by waste type (item 17) was conducted by more than half of the companies

(54), but other management items were practiced by less than 30 companies. Although



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confirmation of proper waste disposal by off-site treater in (item 21) is an important item in

environmental management, it was conducted by only 11 companies.

(9) Relationship between primary environmental management items and EMS

implementation

The most important items among EMS are target setting for reduction in environmental loads,

monitoring and evaluation of environmental performance, and preparation and disclosure of

environmental reports; they are considered as essential. Levels of production management

and environmental management vary by implementation of these items. Table 2.1.6 shows

companies’ EMS implementation levels by implementation of the three primary

environmental management items.

Table 2.1.6 Companies Implementing the Three Primary Environmental Management Items and EMS

Implementation of the

Three Primary EM

Items (A)

Establishment of

Env. Section (B)

Ratio

（B/A）

EMS

Implementation

(C)

Ratio

（C/A）

ISO14001

Acquisition

3 items 29 23 0.79 19 0.66 8

2 items 12 10 0.83 3 0.25 1

1 item 20 11 0.55 6 0.30 1

None 39 15 0.38 4 0.10 -

Total 100 56 0.56 31 0.31 10

Note: PCOs’ answers are used for EMS Implementation (C).

The companies implementing the three primary environmental management items are 29;

they have higher score in production management and higher ratio of establishment of an

environmental section as well as EMS implementation. Among the 10 companies with ISO

14001 accreditation, eight are those implementing the three items. The companies

implementing two of the three primary environmental management items have a considerably

lower ratio of EMS implementation compared to those implementing the three items; this

might be a recognition gap regarding environmental management between CEO and PCO.

There are 41 companies that implement two or more of the three primary items and 31 EMS.

Among the 100 companies surveyed, 30 to 40% of them have reached at a certain level of

EMS while the rest of the companies have room to promote EMS.

(10) EMS and Environmental Measures

Figure 2.1.11 shows relationship between levels of EMS implementation and environmental

measures. Although there are some cases where environmental measures level is low while



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EMS implementation level is high, one can see a trend that the higher the EMS

implementation level, the higher the environmental measures level.

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0.00 0.20 0.40 0.60 0.80 1.00

EMS

Enviro

nm

enta

l Measure

s

Figure 2.1.11 Relationship between Level of EMS and Environmental Measures

(11) Factors to Advance and Hinder Environmental Management

1) Interested Agenda on Business Management by CEOs

Productivity improvement, quality improvement, and marketing strategies and networking

were selected as the most important business agenda by the 21 companies respectively.

Based on the average ranking score, business agenda is prioritized as below.

1. Productivity improvement ：2.5（21 companies）

2. Quality improvement ：2.9（21 companies）

3. Marketing strategies and networking ：3.6（21 companies）

4. Improvement of financial situation ：3.7 (14 companies)

5. Development of new products and technology ：4.5（9 companies）

6. Expand productivity and products ：4.7 (8 companies)

7. Implementation of environmental management ：4.9（2 companies） Note: Numbers represent the total ranking score divided by numbers of respondents ranked the

corresponding options.

As one can expect, productivity and quality improvement are ranked high while

environmental management is hardly a business agenda.

2) Business Owners/Top Executives’ Motivation for Environmental Management

Ranking of the driving forces for environmental management for business owners/top

executives is as follows:



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1st: Legal requirements (legal compliance) 4.18

2nd

: Internal motivation including social responsibility and cooperate ethic 4.30

3rd

: Cost saving through material and energy conservation 5.88

4th

: Productivity improvement 6.27

5th

: Request from parent company or clients 8.79

6th

: Request from share holders 9.30

7th

: Relationship between competitors (including decision made by

industrial association)

9.61

8th

: Request from consumers 9.78

9th

: Request from environmental NGOs 9.83

10th

: Request from financial institutions 10.35

11th

: Others 11.71

Legal requirement was ranked as the strongest driving force for environmental management,

followed by corporate responsibility; these are basic items for companies to recognize

necessity of environmental management, which reveals that most of the business owners/top

executives are concerned about legal compliance. Cost reduction and productivity

improvement is ranked as the 3rd and 4th.

Items ranked 1st through 4th were mostly selected as driving forces for environmental

management. The number of the business owners/top executives who selected the other

items is very small; the items ranked 5th through 10th are considered to be equivalent in

importance.

3) Incentives for Environmental Management

Figure 2.1.12 shows incentives for implementing environmental management recognized by

business owners/top executives. Cost reduction was selected by most of the companies

(72), followed by tax break for good environmental performance (59 companies), and social

recognition (55 companies). The companies that selected reduction in permission fees or

other charges are 47, and they are mainly form the sectors with large wastewater load such as

food processing, pulp and paper, textile (dyeing), and chemical manufacturing (lubricant,

sulfuric acid, pharmaceuticals, cosmetics).



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59

47

35

55

72

5

0

10

20

30

40

50

60

70

80

1. Tax break for good

environmental

performance

2. Reduction in

permission fees or

other charges

3. Reduction in

governmental procedures

such as reporting

4. Social

recognition

(award, publicity)

5. Reduction in

production costs

6.Other

Nu

mber o

f com

panies

Figure 2.1.12 Incentives for Implementing Environmental Management

4) Factors to Hinder Environmental Management

Many companies listed financial constraints as a factor to hinder environmental management

(see Figure 2.1.13). Lack of information and human resources were also selected by more

than one-third of the respondents. Attention should be paid that more than 30% of the

companies listed a lack of affordable external environmental services and information about

credible environmental service providers as factors to hinder environmental management.

5

30

35

36

37

46

0 5 10 15 20 25 30 35 40 45 50

6. Other

4. Lack of affordable external environmental services such as

sampling/analysis, technical advice, planning on IEM, and environmental

auditing

5. Lack of information about credible environmental service

providers

3. Lack of information and know-how about cost-effective

measures to improve environmental performance

2. Lack of staff with necessary knowledge and skills to plan and implement

necessary measures

1. Lack of financial resources to implement necessary measures

Number of companies

Figure 2.1.13 Factors Hindering Environmental Management



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(12) Future Agenda for Promoting Environmental Management

Results of the hearing from 77 companies on future agenda for promoting environmental

management are summarized by environmental theme in Figure 2.1.14. The largest

number of the companies (19) listed waste management (waste minimization, recycling,

establishment of waste treatment facilities) as the future agenda. Ten companies listed

problems regarding implementation of laws and regulations by the governments. Seventeen

companies listed issues regarding production management and those regarding productivity

improvement. Education, CP technology, and information were also listed by 8, 7, 6

companies respectively.

3

4

5

6

6

7

8

8

8

9

9

10

19

0 5 10 15 20

EMS

Material Management

Finance

Gas emission

Information

CP technology

Water and Effluents

Education

Productivity Improvement

Energy

Other production

Administrative issues

Waste Management

Number of companies

Figure 2.1.14 Future Agenda for Promoting Environmental Management

2.1.2 Follow-up Survey on Companies Participated in the Former Waste Minimization Projects

(1) Objectives and Outline of the Survey

An interview survey was conducted to identify how the companies that participated in the

former waste minimization projects have been expanding and advancing the IEM after the

project completion.

To select 30 companies for the interview survey, 60 companies were listed up. Among the

60 companies, 12 companies were closed and some others were not in operation at the time

of the interview. In addition, many companies listed could not be contacted due to changes

in addresses and owners. Table 2.1.7 shows numbers of the companies interviewed by



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industry sector. Among these companies, 20 are located in Luzon Island and 10 in Cebu

Island.

Table 2.1.7 Number of Companies Interviewed

Industry Sector Number

Beverage 2

Cement 2

Chemical products 1

Coconuts oil, powders 6

Electroplating, metal finishing 4

Food processing 6

Foundry 2

Plastics / rubber 1

Paper / pulp 2

Textile / dye 1

Sugar refining 3

Total 30

The former projects that the target companies participated are the followings:

� Industrial Environmental Management Project (IEMP) by USAID and DENR, 1991-1996 � 22 companies

It conducted pollution management appraisals at 150 facilities nationwide to identify pollution prevention opportunities.

� Metro Manila Environmental Improvement Project (MEIP) by World Bank and

DENR, 1991-1998 � 3companies � US-ASEAN Environmental Improvement Project (US-AEIP) by ASEAN, 1995

It conducted waste reduction assessments of industrials sectors such as food, cement, pulp and paper, and iron and steel.

� Employers Confederation of the Philippines/International Labor Organization/Norway Cleaner Production Project, 1999 � 2 companies

It conducted an in-house training and waste minimization audits of 5 companies.

� Environmental Technology Assessment System (ETAS) Preparatory Study by

UNIDO and DENR-EMB, 1997-1998 � The Wastewater Treatment and Technology Transfer and Cleaner Production

Project by the Australian Agency for International Development through the ASEAN-Australian Economic Cooperation Program (AAECP III)

Two plants (textile and food processing) participated � 2 companies

(Since some companies participated in two or more projects, the sum of the companies listed

above is over 30)

Survey items are as follows:

� Profile and summary of the company



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� Description of the process, and characteristics of environmental impact

� Brief summary of waste minimization project in the past

� Present and past environmental management items

� Major outcomes

� Reasons for implementation

� Reasons if no achievement was result

� Issues for waste minimization efforts and environmental management

� Future prospective

(2) Survey Results and Lessons Learned

Conclusions drawn from the interview survey is summarized below.

It was found that almost all factories surveyed had continuously implemented the IEM

proposed through the former waste minimization projects, and that the projects have brought

about some good results (Though, it should be considered that those companies which

seemed likely to implement IEM were selected for the survey).

Through the interview with participating companies, it is found that the success in the project

participation would be attributable to the following factors.

� Manager’s understanding and willingness toward IEM.

� Measures proposed by external consultant were reasonable.

� The measures did not require investment, and effects were seen in decreased production cost.

Motivation of a company manager was clearly important. It was found that companies with

high level of IEM had the following characteristics.

� Their parent companies are international corporations. (5 companies)

� Their products are mainly for export.

� They are making large efforts to gain competitiveness in the market.

� They have expansive industry and/or stable management.



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Generally, large companies or companies whose parent companies are foreign showed their

strong commitments for environmental management. Yet, there are a number of local

companies that actively implement IEM; they are highly motivated for good business

management. The companies that are aiming for business expansion are likely to show

positive attitude towards IEM, production management, and product quality management.

A conclusion drawn from the study is that a company does not practice a good IEM if its

manager does not have a strong intention for expanding its business and/or improving

competitiveness. Companies with competitiveness and stable management practice a good

IEM, while companies without them do not. The latter companies often say that the poor

company performance is attributable to the Asian economic crisis. However, these

companies are small and medium size, and not enthusiastic about improvement of

productivity. First of all, they need to strengthen company management, which is a

prerequisite for implementation of IEM.

In addition, there are the following two points that influenced company’s IEM action

� Regulation on raw-material import in Basel Convention

� LLDA’s environmental user fee

Concerning the first point, Philippine companies are required to implement a good IEM to

obtain an import permit which is needed to import raw materials that are subject to Basel

Convention. The second point refers to the emission charge system by LLDA. In the

Philippines there has been the standard applied to effluent discharged to public waters.

However, it is said that such standard has not been well observed. Introduction of LLDA’s

environmental user fee system has lead to implementation of environmental monitoring by

LLDA. Then, companies pay not only the fee but also penalty in the case that they do not

meet the effluent standard. This acted as a big pressure on the companies. Introduction of

the fee system induced reduction of water use and emission loads, and encouraged upgrading

wastewater treatment.

They listed wastewater treatment, compliance with the emission standard of the Clean Air

Act, and energy saving as IEM issues after their participation in the projects. Industrial

waste management was also a problem to the companies.

Wastewater treatment is still a problem even to those companies that have implemented

relatively good IEM. The issue is to have a good management so that companies can bear

costs of installing or upgrading and operating a wastewater treatment facility; absorbing costs

of environmental and production investments requires improvement in management and

productivity.



2-22

Emission gas treatment varies by industrial furnace or boiler. Industrial furnace has to be

equipped with gas treatment system, especially dust collector. On the other hand, in the

case of boilers which use solid fuel or banker oil, there are two choices, either shifting to fuel

of better quality or installing gas treatment system.

Energy-intensive companies naturally tackle with energy saving, and other companies tend to

consider it as a future issue. Although a result of energy saving efforts can be easily

observed as reduced cost, it seems that the energy saving is still at early stage judging from

the answers.

Hazardous waste management is one of the serious environmental problems because the

Philippines does not have any hazardous waste treatment facilities. The companies

surveyed store certain kinds of hazardous waste within the company premises. They try to

reduce hazardous waste amount by recycling. Management of sludge generated through

filtering or wastewater treatment is a problem to them; use of the organic sludge for recycling

or energy recovery seems to be an issue.

2.1.3 Issues of IEM Promotion by Individual Companies

(1) Summary of Current Status

As was disclosed through the company survey conducted within the EMPOWER project,

many enterprises recognize the necessity of complying with the environmental regulations.

However, managers’ main interest is the improvement in productivity and product quality.

Their interest in IEM is low. It was found that only a small number of the companies

surveyed have established EMS and that 60 % of them have inadequate system. According

to the survey of the 30 enterprises that participated in the former waste minimization projects,

commitment of company’s top management as well as early realization of the benefit are

factors triggering waste minimization efforts.

According to the interview survey of the 100 enterprises in the 18 sectors as well as the

survey of the 30 companies that participated in the former waste minimization projects,

priority issues expressed by company mangers and decision makers are improvement in

productivity and product quality. IEM was of the lowest priority among management issues

including financial improvement, new product development, and sales increase.

IEMP supported individual companies to reduce environmental loads. Hundreds of

companies implemented measures, but their continuity was evaluated as low. Reasons of

that include employees’ resistance to giving up an operation practice that seems to be good to

them, large amount of time and efforts needed for data collection and monitoring in order to



2-23

persuade business owners to take IEM actions, and low awareness of company’s top

management. The awareness of the top management is a very important factor for the

continuity (USAID, 2000).

(2) Preconditions for Promotion of IEM

It is necessary to confirm preconditions that need to be met for IEM promotion.

Preconditions have been identified as follows through the survey.

� A manager holds strong willingness to expand his/her business.

� A company has a stable management and is willing to increase competitiveness.

� A company has an established system for production and quality control, especially good housekeeping practice.

� A manager recognizes environmental management as a part of business management.

� Employees share the IEM concept and have a willingness to work on the realization of the concept.

The bottom line is that IEM cannot be effectively implemented at any company without

manager’s strong willingness to integrate IEM into business management and prospect of

company’s business expansion. Manager’s determination and energy to improve and

reorganize its business are preconditions for development of IEM. There are companies that

satisfy the preconditions in the Philippines; a question is how to increase the number of these

companies.

Because top management of SMEs has a large managerial power within company, top

management’s commitment is crucial in promotion of waste minimization. Considering

their interest, it is more effective to take an approach aiming at productivity improvement

through input-output control rather than an approach aiming at reducing environmental loads.

The former approach leads to reduction in production costs through improved resource

productivity. Tangible benefit in the form of cost reduction provides the top management

with an incentive for taking measures. It is appropriate that the Ministry of Industry and

Trade and other relevant ministries in charge of supporting the manufacturing industry would

take an initiative to implement policy measures with the productivity improvement approach.

(3) Future Agenda

It is hoped that those who have sound business management and have reached a certain IEM

level should further improve IEM to an international level, strengthen their competitiveness,

and do the following:



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� Establishment of EMS

� Introduction of environmental accounting

� Development of environmentally sound products

� Preparation and dissemination of an environmental performance report

� Implementation of supply chain management

On the other hand, those without sound business management and adequate IEM level need

to start with reforming company management and production management, and then further

extend their efforts to improvement of resource productivity.

1) Diffusion of IEM to Top management

In view of the fact that companies with high competitiveness and growth potential implement

an IEM of high level, it is important to increase awareness of top management of these

companies with respect to IEM concept and its benefits including const reduction.

It is expected that the Philippines Chamber of Commerce and Industry and Management

Association of the Philippines would encourage companies to implement IEM by telling

many success stories to top management.

2) Production Management – First Priority

Most enterprises implement some IEM. In order to implement higher level of IEM, it is

important to establish production management system including process analysis, quality and

cost control, delivery control and higher flexibility. Enhancement of production

management would lead to higher IEM as a part of cost reduction. It is unrealistic to expect

companies without having production management indices to implement a high level IEM.

Without proper production cost management it is impossible to evaluate benefits of IEM

correctly. It is expected that companies would strengthen IEM by assessing all the business

process including environmental aspects, and by reducing operation costs to get some

financial saving.

3) Development of IEM

Reduction of environmental loads (emission) through production process control should be

set as a goal prior to taking end of pipe (EOP) measures.

It is true that compliance with effluent and emission standards is a priority issue for

companies, and it is inevitable for companies to take some EOP measures to some extent. It



2-25

is important to reduce energy and water use in the production process, and improve material

input and product output efficiency so as to reduce costs of EOP investment and operation, or

to secure funds needed to take EOP measures. Improvement of resource productivity would

lead to the reduction in both input material costs and EOP investment/operation costs.

Such improvement is referred to as Cleaner Production (CP) by UNDP, or as Waste

Minimization or Pollution Prevention. These actions should be taken before taking EOP

measures.

4) Information Acquisition and Human Resources Development

Generally, companies are not willing to disclose CP technologies and their benefits that they

use because these technologies are related to the basis of the production. Acquisition of CP

technology information is not easy for many companies. Sources of CP information include

databases prepared by UNDP, EPA of USA, and GEC of Japan. Not many companies are

aware that CP information is available from these sources, and therefore companies should be

informed of these sources.

A company needs a process engineer to apply measures obtained from these data sources.

The process engineer must be able to evaluate suitability of the measures before application.

The factory survey under the EMPOWER project reveals that Philippine factories lack

process engineers though they have engineers specializing in production management. This

might be related to the situation where Philippine companies tend to use imported

technologies as they are, and do not have a process engineering section within the company

to continuously improve the production process.

Philippine companies are obliged to have PCO within companies. PCO is very precious

human resources for IEM promotion. Generally, chemical engineers take a position of

PCO, and they have a basic capacity to be a process engineer. Therefore, PCOs should be

trained not only for dealing with environmental issues but also production management.

5) Establishment of Implementation Structure for IEM Movement Similar to That for

Quality Control

There are no special QC technologies dealt within QC movement (activities). QC activities

are comprised of series of field efforts to rationalize production, eliminate unnecessary

processes, and improve productivity. QC movement is participated by all employees

involved in production. They understand common objective of the QC movement.

Participation by all employees leads to attainment of good results.



2-26

Same analogy as QC movement is applied to IEM. It is important that all company

employees involved in production should understand common objectives of IEM, participate

in IEM, and contribute to improvement. Good IEM results cannot be expected if only

company managers or production managers understand and participate in IEM. Companies

that have implemented QC movement would find it relatively easy to introduce IEM.

6) Establishment of EMS

EMS within company is neither a goal nor an objective of IEM; establishment of EMS is one

of the necessary elements to implement IEM. Essential activities of EMS are measurement

of activities and performance, and management of such information, without which

environmental performance cannot be improved. Establishment of EMS is a prerequisite for

IEM.

There is an international standard for EMS such as ISO14001. Number of companies

holding ISO14001 accreditation is gradually increasing in the Philippines. It is rather costly

for Philippine companies to obtain and maintain ISO14001 accreditation. Many

export-oriented companies are obliged to obtain ISO14001 accreditation because of their

clients’ request. However, it would not be absolutely necessary for local companies to

obtain ISO 14001 accreditation; establishment of a system to accredit EMS with easier

procedure and reasonable costs is expected.

7) Relationship with the Public

Even among the companies that implement a good IEM, there are not many companies that

put environmental protection as one of the company’s management concept. Most

companies do not publicize their environmental actions or environmental performance.

There are almost no companies that publicize their environmental performance to their

neighboring communities or local governments.

Without informing the people about their environmental actions or performance, it would be

difficult for a company to attain trust of the society. It is hoped that leading companies

should prepare and publicize their environmental performance reports. Such disclosure of

information has a secondary effect. Companies in the same line of business would begin to

pay attention to people’s voice, and therefore are encouraged to follow the leading company,

and prepare and publicize environmental reports.



2-27

2.2 Current Status and Issues of IEM Promotion by Industry Associations and Others

2.2.1 IEM Promotion by NGOs and Industry Associations

(1) IEM Promotion by Professional Associations

Among the professional associations actively promoting environmental management are the

Philippine Association of Environmental Assessment Professionals (PAEAP), Philippine

Business for the Environment (PBE), and the Philippine Environmental Industry Association

(PEIA). Also Pollution Control Association of Philippine Industry (PCAPI) and the

Management Association of the Philippines (MAP) are among other organization actively

promoting IEM.

1) Philippine Association of Environmental Assessment Professionals（PAEAP）

PAEAP is an association of EIA professionals and is mainly composed of individual

environmental consultants. It is involved in training on EIA and accreditation system for

EIA prepares.

2) Pollution Control Association of Philippine Industry (PCAPI)

PCAPI is an association of Pollution Control Officers (PCOs). It is the largest professional

organization, composed of 200 institutional members, 200 individuals and 60 life-time

members. It is also the oldest association with its formation in 1980. Its funding comes

from services such as training, members’ dues, and grants. PCAPI plays an important role

in advancement of PCOs’ skills and knowledge.

3) Philippine Business for the Environment (PBE)

PBE is a non-governmental organization that acts as advocate on IEM. It plays a central

role in IEM promotion such as provision of IEM information and IEM seminars. Its

operation is mainly funded by membership fees; its annual budget is about US$100,000.

Under the USAID/USAEP, PBE provided service to industry with a database of

environmental technologies (classified as End of Pipe, Clean Production, and Performance

Monitoring). Under the PRRIME project funded by UNDP, PBE mobilized and help

industry associations to prepare Business Agenda 21 (see (2) of this section).

4) Philippine Environmental Industry Association (PEIA)

PEIA was an association of environmental industry. It was established in 1995, composed

of 70 member companies. It has a wide range of activities as shown in Table 2.2.1.



2-28

5) Clean and Green Foundation (C&GF)

C&GF was established in 1994 and has been engaged in volunteer activities to clean up parks

and towns in Metro Manila. Based on the Memorandum of Agreement to implement the

ecolabeling program (ELP) signed by concerned agencies and institutions, C&GF was

selected as Secretary of the Philippine ecolabeling program.

The ELP organizational structure includes a multi-sectoral Technical Committee,

Product-Specific Technical Working Groups and the ELP Administrator. The ELP Board is

composed of the following:

Chairman: Bureau of Product Standards, DTI

Co-Chair: EMB, DENR

Members: Energy Utilization Management Bureau, Department of Energy

Department of Science and Technology

National Consumer Affairs Council

Citizens Alliance for Consumers Protection

Philippine Business for the Environment

Productivity Development Center, Development Academy of the

Philippines

Clean and Green Foundation Inc.

(Program Secretariat/Administrator)

6) Management Associations of the Philippines (MAP)

MAP is not an environmental NGO, but it has an important role as the only association of the

top management in the country. With the assistance of, MAP developed a video and a

manual on best environmental management practices to increase top management’s

awareness. MAP is very influential among industry circles, and is able to raise funds

without much problem. However, many CEOs lack time to pursue interests and issues.

7) Philippine Institute of Certified Public Accountants (PICPA)

PICPA, the national organization of accountants in the Philippines, is promoting EMS and

CP. It provides a two-day course on environmental cost assessment to track and assess

environmental costs within a company as a tool for implementing CP projects.



2-29

Table 2.2.1 Professional Associations and Their Activities

Association/Yr.

Established #Members Financing Activities

The Philippine

Association of

Environmental

Assessment

Professionals

(PAEAP) 1994

100

(planning and

architecture)

Membership

dues, training

fees

- Training on EIA, Env. Auditing,

ERA, EMS

- Established an accreditation system

for EIA preparers and environmental

auditors.

- Publishes a newsletter.

Pollution Control

Association of

Philippine Industry

(PCAPI) 1980

200 institutions

200 individual

Pollution

Control Officers

60 life members

Members’

dues

Grants

- Continuing education of PCOs (CP

technology and waste minimization,

ISO14001, EMS and marine and

freshwater ecology

- Information dissemination and

awareness-raising - to LGU staff and

small polluting industries), industry

awards

- Policy development and networking

- Development and promotion of

environment-friendly substances

Philippine Business

for the Environment

(PBE) 1992

35 charter

members

(corporate

executives)

Grants - Managed the Business Agenda 21

- Environmental Information Center

for Business and Industry

- Environmental Technology Referral

System (ETRS)

- Business and Environment”

magazine with the Industry Waste

Exchange Program directory

- Training and seminars on EMS,

In-house Environmental Review,

Market-based Solutions to

Environmental Problems,

Environmental Finance and Cost

Accounting, Industry-related

Environmental Legislation and

Policy.

- Drafting the position papers of the

industry on pending environmental

laws

Philippine

Environmental

Industry Association

(PEIA) 1995

70 Fees, dues - Promote ethical and professional

business practices in the environment

industry

- Promote appropriate environmental

policies in trade, promote CP, safety

and risk management, sustainable

resource and efficient energy use,

greening of the supply chain and

ecolabelling

- Develop a database of green



2-30

Association/Yr.

Established #Members Financing Activities

technologies, patents and expertise

available to the public

- Create an experts’ panel on 7 key

environmental topics, promote

consultations and discussions,

maintain an inventory of laws and

regulations, case studies of PEIA

members’ initiatives

- Network with government on

environmental legislation and

implementation, and with academe

on environmental curricula.

Management

Association of the

Philippines (MAP)

- Promote sound corporate

environmental management among

its members and promote

understanding and compliance with

environmental laws and regulations

and strengthen environmental

awareness in industry

- Advocacy - to promote CP and the

3R principle, sustainability of natural

resources, environmental health,

safety and risk management,

ecolabelling and understanding of the

environmental impacts of trade

liberalization

- Environmental leadership

- Network with government and other

regional and international

organizations to further

improvements in environmental

quality and resource conservation.

(2) Current Status of IEM Promotion by Industry Associations

1) IEM Promotion by Industry Associations

Many industry associations have been formed and a good number from various industrial

sectors have inclinations for proper industrial environmental management. A total of 83

industry associations signified strong interest in environmental management in terms of

formulating their own Business Agenda 212, which was coordinated by PBE. The next step

is to take actions listed in the Business Agenda 21.

2 Prepared under the PRIME project funded by UNDP.



2-31

EMPOWER study survey forms to more than 20 business associations in order to know their

present BA-21 related activities. However, only 12 responded, and these are the following:

1. Polystyrene Packaging Council of the Philippines

2. Samahan sa Pilipinas ng mga Industriyang Kimika or Chemical Industry Association of the Philippines (SPIK)

3. Packaging Institute of the Philippines (PIP)

4. Philippine Wood Producers Association (PWPA)

5. Pulp and Paper Manufacturers Association (PULPAPEL)

6. Philippine Metalcasting Association (PMA)

7. Chamber of Automotive Manufacturers of the Philippines (CAMPI)

8. Philippine Oleochemical Association

9. Energy Management Association of the Philippines (ENMAP)

10. Philippine Sugar Millers Association (PSMA)

11. Philippine Environment Industry Association (PEIA)

12. Philippine Chamber of Commerce and Industry

Table 2.2.2 shows the summary of the responses. The main reasons for BA 21 commitment

are concern for the environment and compliance with environmental regulations. Three

respondents added prestige and potential business opportunity. Five associations have their

members contributing to BA 21 activities. Four assessed that their members are highly

committed: Polystyrene, PWPA, PULPAPEL, and CAMPI. Five said their members need

more encouragement to fully commit to BA 21 (PSMA, SPIK, PIP, PEIA, and

PHILFOODEX). The incentives to continue BA 21 commitments are training/technical

assistance (10 associations), information materials (9), recognition or awards (5), tax subsidy

(1), and funds (1).

Table 2.2.2 Summary of Business Association Survey

Reasons for BA 21

Commitment Incentives

Association Yr

Estab.

#

Membe

rs

Contri

b.

BA21 Env.

ConcernRegns. Others

Level of

Member

Commitme

nt Awards Trng./T

A Info. Others

1. PSMA 1922 16 YES X X Prestige

need

encouragem

nt

x x

2.

Polystyrene 1993 18 NO X X high 9 x x



2-32

Reasons for BA 21

Commitment Incentives

Association Yr

Estab.

#

Membe

rs

Contri

b.

BA21 Env.

ConcernRegns. Others

Level of

Member

Commitme

nt Awards Trng./T

A Info. Others

3. SPIK 1977 71 YES X X low 4 x x x

4. PWPA 1951 78 YES X X High 8-9 x x x tax

subsidy

5.

PULPAPEL 1950 14 NO X X high

6. PIP 1967 155 NO No

responseno resp. no resp. low x x x

7.

Metalcasting 1972 93 NO

No

responseno resp. no resp. no response none x x

8.

Automotive 1995 14 YES X X high 9 x x x

9.

Oleochemica

l

no

resp.5

no

respons

e

X X no response none x x

10. PEIA 1963 YES X X Prestige

need

encouragem

nt

x x

11. Phil.

Chamber NO X X low none x x

12.

Philfoodex 1986 200 NO X X X

need

encouragem

nt

x x funds

Table 2.2.3 lists the current BA 21 activities of the associations interviewed, including those

gathered from brochures and Internet. Activities are mainly on policy advocacy and

participation in environmental forum, information support for members, and specific

projects/campaigns. Five associations advocate for policy changes or issues (PSMA,

PWPA, PEIA, Polystyrene, SEIPI). Six provide environmental awareness information

support for members (PSMA, Oleochemical, PEIA, PICPA, ENMAP, PHILFOODEX).

Among the specific projects are promotion of ISO 14001 (PULPAPEL, PMA); campaigns to

reduce, reuse, recycle and substitute (PIP, PULPAPEL, CAMPI); hazardous waste

management (SEIPI, CAMPI); Environmental Management Accounting and Clean

Production (PICPA) and Responsible Care Program (SPIK).

Table 2.2.3 Current BA 21 Activities of Business Associations

Association Activities

Policy advocacy 1.PSMA

Information support to members

2. Polystyrene

Participation on some environmental for and recycling for foam polystyrene food packaging material

3. SPIK Promotion of Responsible Care Program

4. PWPA Helping DENR in the formulation of environment-related IRRs

Solid waste/paper sludge project with DOST

Recycling/solid waste project with DENR

5. PULPAPEL

ISO 14001 certification for paper mills



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Association Activities

Campaign to reduce, reuse, recycle and substitute 6. PIP

Eliminate some form of packaging to reduce municipal and industrial solid waste

7. PMA Seminars on ISO 14001

Provide complete list of toxic substances

Campaign for segregation and on-site/off-site recycling

Reduce electric, water and emission standards

8. CAMPI

compliance on new product

Conduct basic environmental education materials to members 9. Oleochemical

Distribute environmental education materials to members thru newsletters

Strategies for hazardous waste disposal shared among members and adopted by companies

Enhanced compliance of member companies to discharge permit and other regulations

Implementation of DAO 37; environmental monitoring teams and environmental monitoring fund

10. SEIPI

Participation in for on Clean Air Act Implementing Rules and Regulations

Advocacy on environmental issues and concerned education and training of members

Networking with other environmental organization

11. PEIA

Close coordination with concerned government agencies

12. PICPA Active promotion of Environmental Management Accounting and Cleaner Production

provide good environment for workers 13. Printing

use of alternative materials such as water-based inks

14. Philfoodex

Awareness and basic environmental seminars for members

Training seminars on energy efficient technologies for the industry

information dissemination through newsletter "The Energy Manager"

Seminars on new developments in new and renewable energy sources (NRES)

15. ENMAP

Monitoring of commercialization of NRES

2) Responsible Care Program by SPIK

USAEP worked closely with the Chemical Industries Association of the Philippines (SPIK)

for their official adoption of Responsible Care in 1996 and their acceptance by the

International Council of Chemical Associations later that same year. USAEP dispatched

professionals to hold seminars and workshops in order to deepen understanding of the

Responsible Care Program. The Responsible Care Manual for the Philippine Chemical

Industry was launched on November 17, 2000.

(3) Current Status of Environmental Service Providers

IEM Service providers in the Philippines are divided into two groups: engineering and

consulting firms. The former is engaged in manufacturing and sales of equipment for



2-34

wastewater and flue gas treatment. Wastewater treatment facility has a certain level of

domestic demands and can be manufactured in the country because its main system is a

simple structure. However, there is few company that manufactures complicated flue gas

treatment facilities and waste treatment facilities, which are imported from overseas. The

engineering firms are mainly providing products related to EOP but not services to firms for

reducing environmental load.

The consulting firms are providing services for ECC procedures, which a company needs to

obtain, and for wastewater monitoring. There will be demands for consulting services for

establishing and auditing EMS within a company. The consulting firms will not be able to

provide consulting services in the field of CP and waste minimization; it is quite difficult to

recruit personnel who have experiences in process engineering and production practices

relevant to a client company, which is indispensable for those who provide consulting

services in the field. Development of human resources who have experiences in process

engineering is a key to enhance the capacity of the consulting firms.

On the other hand, consultants who are specialized in production management are more

effective to guide CP and waste minimization than environmental consultants.

Development Academy of the Philippines (DAP) is training technical professionals for

production management. DAP is the Philippine representative of the Asian Productivity

Organization (APO) and promoting Green Productivity, whose concept is basically same as

that of CP.

If the ESPs in the Philippines are interested in providing consulting services in the field of

CP, waste minimization, and production management, they needs to conduct a new market

development.

2.2.2 Future Issues of IEM Promotion by Industry Associations and Others

(1) Future Issues in NGOs

Issues common to all NGOs in future concern the need for organizational strengthening and

enhanced activities.

It is anticipated that the PBE, which has a solid track record as an advocate of IEM and is

socially recognized, will play a leading role in future IEM. However the PBE is hampered

by an extremely fragile financial base and is unable to secure or deploy sufficient project

funds or high-level specialist staff for the provision of services. If the PBE is to advocate

and work for the dissemination of IEM, it needs to bolster its financial base through



2-35

increasing member companies and to enhance its functions and services as an IEM center.

In particular, the PBE is expected to play a focal role in the network with related agencies.

C & GF, which serves as the secretariat of ecolabel, needs to enhance its organization to

fulfill that role, as well as securing funds to achieve autonomous running of the ecolabel

program. The challenge ahead concerns raising social awareness of ecolabelled products

and thereby promoting greater understanding of the value and increasing the level of use of

such goods among companies.

PCAPI needs to strengthen its financial base through increasing the number of individual and

group PCO members. In addition, although it already implements a variety of training

programs, it should seek to improve the contents of training with a view to raising the

capability of PCOs. In particular, it is desirable to see the editing and publication of training

texts concerned with IEM specialist know-how and the implementation of regular training

based on such resources. If someone has a degree in chemical engineering from university,

that person is able to obtain certification as a chemical engineer and become a PCO; however,

although university education includes environmental engineering it does not give a thorough

and specialist grounding in it. Therefore, basic knowledge concerning IEM obtained in

university education alone is not considered to be enough, and it is thus desirable for

graduates to obtain further specialist know-how in the IEM field after they leave university.

In Japan, there is a sector-specific certification system for pollution control officers, and a

similar system is also going to be established in Thailand. In the Philippines, too, it is hoped

that methods (not necessarily a system) are discussed with a view of raising the status of

training course completion certificates.

Concerning the Philippine Environmental Industries Association, it is difficult to gauge

activities from the outside. The association does not issue any information to external

circles, and companies in need of IEM improvement find it difficult to search for member

companies that provide the kind of services they are looking for. It is immediately desirable

to strengthen information dissemination and to provide links to the information network.

(2) Future Issues in Industry Associations

1) Enhancement of Implementation Capability

Follow-up survey on the industry associations that participated in BA21 revealed that the

biggest outcome of this venture was that the participation boosted their understanding of

IEM. However, looking at actual activities after that, the slow response to the survey

indicates that no conspicuous progress has been made in terms of organizational activity.

when one takes a look at industry associations in the Philippines, a salient feature is that



2-36

hardly any associations possess a full-time secretariat like the Philippine Chamber of

Commerce and Industry. Absence of a full-time secretariat makes it almost impossible to

execute programs on a regular basis. Running of associations depends on the leadership

qualities of each association’s president. However, since presidents are usually business

owners and, therefore, extremely busy, it is impossible for them to concentrate on association

activities. As a result, it becomes very difficult for organized programs to be implemented.

Furthermore, there is no level for collective work by associations, for example, an approach

whereby business owners assign commitments concerning BA21 activity and mutually report

on the results. There is also no culture of discipline whereby, for example, associations

issue advisories to companies that do not take part in joint activities.

It can thus be seen that industry associations need to play a very important role in promoting

IEM, however, issues to be tackled before this revolve around how to enhance their

organizations and, in cases where there is not enough economic muscle to establish specialist

secretariats and so on, how to establish organizations for promoting functions to external

circles. Concerning this point especially, it is recommended that an organization be

established within the Philippine Chamber of Commerce and Industry.

2) Preparation of an IEM Action Plan by Each Industry Association

Business Agenda 21, which has been compiled by the PBE as one aspect of the PRIME

project, declares actions for the sustainable development of 83 industry associations. It may

be said that this has prepared the ground for strengthening the approach of industry

associations. Meanwhile, the interview survey targeting the industry associations that was

conducted in the EMPOWER project revealed that many member companies are not so

enthusiastic about BA21 implementation, indicating the need for an aggressive lobbying by

industry associations. An effective approach in the future may be to select model

companies, particularly in industry associations that have expressed intent to tackle waste

minimization in BA21, and share their approaches and experiences concerning waste

minimization with other companies in their associations.

Through implementing such an approach, it is anticipated that business owners will become

aware of the conditions and significance of activities by other companies in their sectors and

will be encouraged to implement such activities themselves.

(3) Future Issues in Service Providers

In the field of IEM, latent demand exists mainly for training services to nurture human

resources in companies, productivity assessment services, and services to support the



2-37

development of EMS. With respect to training services, various programs and activities

have already been implemented.

Concerning productivity assessment services and consultant services on environmental

management systems, future market development efforts are required. In the area of

productivity assessment services, it is particularly desirable to strengthen counseling

functions and to develop systems for rewarding companies that succeed in raising

productivity, etc. There is also an urgent need to train technicians (consultants) who can

implement productivity assessment and to create an environment in which SMEs in the

Philippines can readily make use of such personnel.

EMS consulting services are also still at a primitive stage. First of all, it is urgently

necessary to build the training setup for environmental management, while at the same time

nurturing consultants.

2.3 Current Status and Issues of IEM Measures by Government Organizations

2.3.1 Government Organizations for IEM

Following 13 government organizations have been involved in IEM promotion:

1) Board of Investments Department of Trade and Industry (BOI)

2) Department of Environment and Natural Resources Environmental Management Bureau (EMB) and Pollution Adjudication Board (PAB)

3) Laguna Lake Development Authority (LLDA)

4) Philippine Economic Zone Authority (PEZA)

5) Department of Science and Technology (DOST)

6) Board of Products Standards（BPS）

7) Department of Energy (DOE)

8) Department of Health (DOH)

9) National Economic Development Authority (NEDA)

10) Department of Interior and Local Government (DILG)

11) Technology Livelihood Resource Center (TLRC)

12) Development Bank of the Philippines (DBP)



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13) Land Bank of the Philippines (LANDBANK)

(1) Organization’s Role in Advancing the Theory and Practice of IEM

1) Promotion of IEM Theory, Development and Implementation of Plans to Promote

IEM

Each of the government organizations listed above except DILG is in charge of promoting

IEM theory and practice. DENR, LLDA and DOH have an authority to designate

authorized managers for environmental impacts, energy saving, and pollution prevention.

DENR and BOI are the main organizations in this field. LLDA and PEZA play the similar

role in the areas that they have jurisdiction. DENR requires industries to take actions

against industrial pollution while BOI encourages industries to take voluntary actions for

IEM. Both organizations had not prepared a plan to promote IEM.

2) Research

DENR, LLDA, DOST, DOE and DOH have science and technology research but have not

obtained results of studies with their own budget contributing to IEM.

3) Voluntary programs

With the assistance of IISE and PRIME, EMB and BOI are the only agencies advocating and

implementing an environmental management system and aiming for ISO 14001 certification.

DOE, DOH and PEZA are also encouraging their clients to adopt the system or prepare

environmental action plans. DENR, LLDA, PEZA, DOH and DILG encourage

environmental conservation agreement between the factories and surrounding residents or

local government. PEZA and DOE recognize outstanding companies with EMS and energy

conservation in their annual awards.

4) Laboratory services

DENR and LLDA have laboratories to monitor and analyze water quality. With the

implementation of the Clean Air Act, DENR leads in air quality monitoring and analysis.

5) Environmental Training

Among the trainings offered by concerned organizations when funds are available are

followings:

� Environmental Impact Assessment and Environmental Risk Assessment (DENR, DOST and DOH – generally for health impacts),



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� Environmental Compliance Audit (DENR, LLDA and DOH),

� EMS (DENR, DOH, BOI.. DOST, PEZA),

� Hazardous Waste Management (DENR),

� Sampling for Environmental Monitoring and Analysis (DENR, LLDA),

� Environmental Site Assessment (DENR),

� Sustainable Technologies (DOST),

� Solid Waste Management (DILG with the assistance of DENR, LLDA).

6) Market-based instruments

LLDA is the only agency implementing a market-based instrument (pollution charge or

environmental user fee system) to reduce industrial water pollution although DENR/EMB has

a pending incentives as part of voluntary agreement between government and industries.

The pollution charge system comes to be in nation-wide use.

BOI, PEZA and DOE offer financial/economic incentives such as low interest loan, tax

reduction/exemption for environmental investments. LLDA provides financial support for

R&D of environmental technologies.

Development Bank of the Philippines (DBP) and Land Bank (LB) offer industries financial

helps for environmental investments.

Gas and electricity user fee policies are within a jurisdiction of DOE. DOE has no tax

system concerning an environmental factor.

7) Environmental Certification

Although EMB has control over systems assigning PCOs at companies, it has not authorized

a certification system specified for PCO. On the contrary LLDA has its own PCO

certification system. BPS (Bureau of Product Standards) has been working on

establishment of an EMS certification system as a national standard.

(2) Manpower

Only seven agencies gave information on the number of staff involved with IEM. In BOI’s

Office for Industrial Policy, four technical staffs are working on environmental matters

affecting investments. DENR/EMB has the most number of staff, with the EIA Division

counting 24 full time staff and 24 contract-based workers. DOST’s ITDI has 28 staff with

15 devoted to the Integrated Program on Cleaner Production Technologies (IPCT). The



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Environmental Protection and Monitoring Division (EPMD) of DOE has three sections

dealing with environmental management, environmental quality monitoring, environmental

impact assessment permitting assistance, and environmental planning and policy studies.

Seven staff members are involved in environmental management. Agricultural Section of

NEDA is in charge of environmental issues. Six Agriculture Staff of NEDA are involved in

the evaluation of IEM project proposals. PEZA has two Environmental Management

Specialists trained as engineers assisting locators to comply with various government permits.

(3) Funding

Most of the agencies have limited funds to promote environmental management. Only

financial and technical assistances from donors (e.g. World Bank, Asian Development Bank,

JICA, and UNDP enable concerned agencies (e.g. DENR, LLDA, DOST, BOI) to provide

training, seminars, publications and policy studies. BOI has no separate budget for

environment projects. Budgets are kept for paying staff cost and expenses for training and

seminar. Although DOE has regular budgets logistical support for EM activities is

inadequate.

2.3.2 IEM Measures by Government Organizations

(1) Implementation of IEM Measures

Abovementioned government organizations have been carrying out several projects to

promote IEM3 with financial and technical assistance from aid organizations. The projects

carried out and on-going are listed below by the following category:

� Philippine Agenda 21

� Identification of current pollution status

� EMS

� Inventory of pollution abatement technologies/best practices

� Development of environmental performance indicators

� Standardization of ecolabels

� Promotion of voluntary regulation and actions by companies

� IEM Pilot project

� Evaluation of environmental standard

3 See Annex 2 for further information about the projects technically supported by aid organisations.



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� Evaluation of Market-based instruments

1) Philippine Agenda 21

The Philippines attended the Rio Summit in 1992 and established PCSD (Philippine

Conference on Sustainable Development) to promote actions under the commitment for the

international agreement on the establishment of a sustainable society. Head of NEDA is

Chairperson of PCSD, and DENR is the Secretariat. PCSD prepared the Philippine Agenda

21, which defines roles of industry and the public to achieve sustainable development.

President of the Philippines ordered the society to comply with the international agreement

and take actions for the establishment of sustainable society.

2) Identification of current pollution status

DENR/EMB and DTI/BOI conducted studies to identify impacts of industrial activities on the

environment with the support from aid organizations.

2) –1 Pasig River Study (PR), 1990

In 1990 supported by a Danish institution our studies on the nature of pollutant and its impact

on ambient aqua environment of the Pasig River in Philippines were curried out. The study

showed that the main pollutants were effluents households, one from piggeries and beverage

factories.

PRRC, Pasig River Rehabilitation Commission, has been working on the Pasig river

environmental management and rehabilitation projects with a financial aid from ADB since

August of 2000 to June of 2006.

2) –2 Industrial Efficiency and Pollution Control Program (IEPC), 1991-1992

This study was implemented by the Department of Environment and Natural Resources

(DENR) from 1991 to 1992 with funding from the United Nations Development Programme

(UNDP) and the World Bank. It estimated the magnitude of air and water pollution as well

as the environmental impacts of hazardous waste by various human activities in which

industrial activity is the main focus. The Study covering Metro Manila identified the main

source of toxic and hazardous wastes and significant contributors in industries.

2)-3 Laguna Lake Environmental Study (LLES), 1993

Laguna Lake is a sensitive, high value ecosystem under the authority of LLDA (Laguna Lake

Development Authority). Pollution was leading to rapid environmental degradation and

reduction in beneficial use of the Lake. To provide solution to such pollution, the Study

analyzed 1) change in ambient water quality, 2) pollutant sources, sectoral origins and



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volumes, 3) pollution impacts and costs on health and economy (mainly fishery), 4) control

options and costs, 5) benefit evaluation. It identified that BOD load was the major pollutant

while increase in hazardous waste generation became serious and persistent. An important

achievement of the Study was the recommendation of BOD load-based water pollution

charge system, which was later applied by LLDA as the Environmental User Fee System.

2)-4 Philippine Environmental and Natural Resources Accounting Project (ENRAP)

Phase III, 1998

ENRAP, which had originally started since 1991, focused in its Phase III on depreciation of

natural resources and pollution impacts. The result showed that industries had little impact

on environment in the respect of this study. However, hazardous waste problems were

attributed to industries significantly. The study mapped hot-spots, places where immediate

actions must be taken for its environment protection, among all of the polluted areas. It also

identified what sort of action was needed for particular areas. To be noted that this study

was done using mainly statistic data, but visiting sites.

2)-5 Urban Air Quality Program (URBAIR) and Metro Manila Air Quality

Improvement Sector Development Program, 1994

URBAIR was a comprehensive quantitative study which analyzed and modeled air pollutions

sources, evaluated their impact on health and the economy, and made policy

recommendations. With the outcome of the URBAIR MMAQISDP, Metro Manila Air

Quality Improvement Sector Development Program 1998-Dec 2003, commenced with

budgets offered by ADB and JBIC.

2)-6 Environmental Degradation due to Selected Economic Activities, 2000

In 2000 this UNDP-aided study on pollutant resources in industries was conducted by the

National Statistical Coordination Board (NSCB).

2)-7 Master Plan Study on Hazardous Waste Management (HWM), 2001

DENR/EMB carried this study with supports from JICA which was the comprehensive study

on hazardous waste management in the Philippines. It estimated the sector-wise hazardous

waste generation based on the actual generation data collected from HW generators registered

officially. It provided important data sets of sector wide HW generation.



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2)-8 Philippines Environment Monitor (WB/PEM), 2000-2002

The Study summarized description of green (natural resources) and brown (pollution) agenda

in the Philippines. It also showed key environmental indicators, hot spots, and recent

changes in environmental quality.

2)-9 Industrial Environmental Management System (IEM/GIS), 2001-(on-going)

EMB is going to design and establish a GIS system to consolidate all the monitoring

information on industrial emissions (from all media) for the purposes of their administrative

operations (e.g. tracking permissions) and for environmental planning. The system has a

key which can consolidate EMB’s existing data sets on air, water and hazardous wastes, and

can input data on ecological systems and other factors such as population, economy and data

from other studies. This whole system has been yet under construction waiting for all data

input into it.

3) EMS

3)-1 Standardization of EMS

Bureau of Product Standards has adopted ISO14001, an international EMS standard, as

Philippine National Standard (PNS) 1701 (EMS - specifications with guidance for use),

ISO14004 as PNS1704 (EMS - general guidance on principles, systems and supporting

techniques, 1996) and ISO14010 as PNS1710 (guidelines for environmental auditing, 1996).

The main issue of EMS in the Philippines is that obtaining and maintaining accreditation of

ISO14001 puts heavy economic burden on Philippine companies, especially SMEs. Simpler

EMS for SMEs is expected to be developed.

3)-2 Environmental Management System Accreditation Program (EMSAP)

In an effort to prevail EMS in esp. SMEs, there should be more local EMS auditors in the

country with an accreditation and renewal of the certification system affordable to more

people. The Bureau of Product Standards of the Department of Trade and Industry

(BPS/DTI) formally launched the EMS Accreditation Scheme in October, 2002 whose

system accredited ISO14001 auditors.

IISE trained 6 special trainers for EMS audit and PRIME, 36 trainers

3)-3 Industrial Initiatives for a Sustainable Environment (IISE), 2001-2002

The USAID-DENR project Industrial Initiatives for a Sustainable Environment, IISE, used

EMS to sustain advocacy of pollution prevention following the Industrial Environmental

Management Program, IEMP.



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This project aimed to help industries establish EMS and acquire ISO14001, thereby reducing

environmental load in these industries. 232 companies established EMS and 25

companies/organizations were qualified ISO14001 by December, 2001.

3)-4 Private Sector participation in Managing the Environment (PRIME)

PRIME was an environmental project of the United Nations Development Programme

(UNDP) with the Board of Investments of the Department of Trade and Industry (BOI/DTI).

PRIME undertook a pilot program to set up EMS in a group of SMEs and promoted ISO

14001 EMS through strategic training of company and government personnel. This project

supported 9 SMEs, 5 of which succeeded to have ISO 14001.

4) Inventory of Pollution Abatement Technologies/Best Practices

4)-1 Waste Minimization Database

USAID-supported IEMP (1993-1998) accumulated numerous data from its 143 volunteer

firms that participated in pollution management appraisal (PMA). Since some time has past,

the database is not competently utilized.

4)-2 Preparation of Sectoral Guidebooks

The Development Bank of the Philippines (DBP), through the Environmental Infrastructure

Support Credit Program (EISCP) of the Overseas Economic Cooperation Fund of Japan

(OECF), produced sectoral guidebooks in 1999 as an evaluation guide of its account officers

for environmental projects. These guidebooks are for the following industries: coconut oil

milling and refining; cement; fish canning; beverage; pig farming; and pulp and paper.

5) Preparation of Sectoral Guidebooks

The Development Bank of the Philippines, DBP, produced sectoral guidebooks as an

evaluation guide of its account officers for environmental projects.

6) Nation-wide standardization of Ecolabel

With an aid from UNDP PRIME program BPS/DTI set about ISO14024-based Philippine

Ecolabel program concept plan and standardized the program.

7) Promotion of voluntary actions by companies

7)-1 The Philippine Environmental Partnership Programme (PEPP)

With the assistance of IISE, the Philippine Environmental Partnership Program (PEPP) was

established in June 2000 for the purpose of forging an alliance between selected government,



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financial, political and training organizations for the purpose of promoting EMS/CP. The

partnership promotes self-regulation in order to facilitate efficiency in the use of limited

government resources in monitoring industries.

As following an event, a DAO on PEPP was prepared in May, 2003. This enabled that

incentives were given to a company employing EMS, environmental management plans,

environmental reports, and publication of environmental reports. The incentives were

financial and technical ones such as advantages in reports for DENR, acquisition of ECC and

so on.

As another incentive DENR certification labels for product advertisements and packages

were available to a company which maintained proper EMS over 3 years and conducted its

business complying with environmental laws. PEPP also set a program on a company that

failed to be accordance with environmental laws. The program took the company 18-30

months to complete urging it to practice environmental management planning, improvement

in its environmental performance, EMS etc.

8) Pilot projects for IEM implementation

8)-1 Integrated Program on Cleaner Production Technologies (IPCT)

This is a flagship project of the Department of Science and Technology managed by the

Industrial Technology Development Institute. The Center offers seminars and trainings for

SMEs (Basic Ecology and Economics; Clean Production Assessment and Waste

Minimization in Automotive Repair Shops), technical assistance through technology review,

feasibility study, sampling, analysis and monitoring, fund sourcing, and information from CP

technology database. Its information center is through website on verified CP technologies,

interactive CDs, video materials for seminars/workshops, manuals, brochures and newsletter.

8)-2 Industrial Environmental Management Project (IEMP)

The USAID-supported Industrial Environmental Management Project (IEMP) was the first

project to demonstrate that pollution prevention pays. It started in 1992 and ended in 1998.

The following describes the processes involved and results achieved.

8)-2-1 Environmental Risk Ranking System

The IEMP assisted DENR to establish an environmental risk ranking system called the

National/Regional Industry Prioritization Strategy (NRIPS). The purpose was to identify

and rank industry sub-sectors and individual firms presenting the greatest relative potential

risk to public health. IEMP-DENR teams visited each DENR regional office and reviewed

3,328 industry records (about 27% of the DENR records) representing 156 industrial



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categories in order to rank these firms using NRIPS methodology. This ranking enabled the

regional offices to prioritize and target compliance monitoring for those industry sub-sectors

and firms having the greatest relative potential risk to the environment and public health.

The survey identified 867 facilities and 28 industrial categories that presented the greatest

risk to the surrounding environment. The national ranking of sectors that pose potential risk

to public health identified were:

� Gold ore mining

� Coal mining

� Steam heat and power plants

� Sugar milling and refining

� Pulp, paper, and paperboard manufacturing

� Desiccated coconut manufacturing

� Malt liquors and malt production

� Nickel ore mining

� Copper ore mining

� Carpet and rugs manufacturing

8)-2-2 Recruitment of Volunteer Firms

A strategy to recruit volunteer firms for IEMP demonstration is to convince firms that

pollution prevention pays. The marketing approach is the use of pollution management

appraisal (PMA) and the savings that can be realized from using less raw materials and

energy in the production process. Less volume and lower concentrations of pollutants in

wastewater will lower treatment plant operating costs while extending plant operation life.

The project introduced the concept in 22 PMA workshops, using initially U.S. case studies.

As implementation results and success stories became available, the workshops used Filipino

examples. The marketing approach was successful in recruiting over 35 percent of the firms

that attended PMA workshops.

Incentives for and obligations of PMA volunteer firms were established by DAO 17 in

February 1993: Guidelines Governing Voluntary Participation in Pollution Management

Appraisals of the Industrial Environmental Management Project which included the

following: (a) moratorium on compliance to effluent and emission standards; (b) financing



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for investment outlays for waste management; (c) confidential business reports that would not

result in DENR regulatory action and distribution to commercial competitors and other

government agencies; and (d) regulatory actions of sanctions to motivate polluting firms to

join IEMP.

A total of 143 agro-industrial firms volunteered for IEMP pollution management appraisals.

Over 400 firms were actually represented in 22 PMA workshops.

8)2-3 Pollution Management Appraisal

The IEMP introduced in the Philippines the PMA process, which is a multi-phased,

systematic procedure for identifying, selecting, and implementing waste minimization and

improved waste management. It consists of four phases: planning and organization,

assessment, feasibility analysis, and implementation. The process is recurring as new

assessments are conducted by management in response to the recognized need to continue

improving operational efficiency by reducing waste generation.

The project formed a PMA team and implemented PMA at some enterprises.

9) Evaluation of Environmental Standards for Selected Industrial Sub-Sectors

(EESSIS), 1997

EESSIS is a detailed study on affordability of the existing environmental standards for a few

polluting industrial sectors based on detailed data gathered at the plant level. The industrial

sub-sectors covered include power generation and cement and sugar industries. It provided

a detailed data of sub-sector profile and pollution control technology options and their costs.

10) Potential Use of Market-Based Instruments

10)-1 Potential Use of Market-Based Instruments for Environmental Management in

the Philippines (ADB-MBIs), 1997

ADB conducted a study to review structure of environmental management effectiveness of

various MBIs in the Philippines in 1997. It estimated that introduction of MBIs could

reduce environmental control costs by US 300 million per year and yield US$ 77-115 million

per year from BOD discharges, compared to the costs of implementing regulatory standards.

Various MBIs were recommended for different polluting sectors (transportation, industry,

etc.)



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10)-2 An Assessment of Fiscal/Financial Incentives for Environment Project (IISE/Fiscal

and Finance), 2001

This study was the first comprehensive review and assessment of existing fiscal and financial

incentives available in the Philippines. It identified reasons for lack of their availment, e.g.

high interest rate, lack of banks’ capacity of evaluating environmental cost/benefit of the

project, high collateral requirement, etc.

(2) Future Issues

1) IEM Policy Direction

Policy actions in the field of IEM in the Philippines have mainly been implemented with

assistance from aid organizations from the 1990s onwards. These activities have produced

immense benefits, but maybe the biggest achievement so far has been the fact that business

owners in general have come to commonly understand that running businesses without

paying attention to the environment is no longer feasible. In addition, advice on improving

production processes provided by external experts has proven to be effective in various

projects.

Another noteworthy achievement has been the progress made in understanding the actual

state of industrial pollution. It appears that hardly any industries in the Philippines generate

pollution on a level that is damaging to health. Rather, current issues mainly concern

measures to deal with organic-type industrial wastewater. Another issue concerns ensuring

compliance of exhaust gases from point sources with the Clean Air Act. Furthermore,

concerning hazardous wastes, since there are no facilities for carrying out appropriate

treatment and disposal, it is urgently necessary to build such facilities.

Accordingly, legal compliance continues to be a major issue concerning the discharge of

wastewater, waste gas and hazardous wastes from factories. Competent authority over such

matters is legally assigned to the EMB/DENR and the LLDA.

In order for the Philippines to control industrial pollution, it is first necessary to establish

legislative controls and then to construct an administrative system for accurately gauging

pollution sources and utilizing legislative means to encourage compliance with the law.

The Philippines has already reached a certain level regarding the above basic framework,

collection of information (on the side of administration) on pollution sources and database

development. Marked progress in this area was made in the 1990s, and the current system

was more or less completed by the start of 2000. Next, it is necessary to ensure thorough

compliance with the law. However, the EMB/DENR and its local offices, which are the



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competent authorities in the environmental field, are unable to carry this out due to structural

limitations imposed by budget constraints. Since this problem is linked to the fiscal

constraints of the government, it cannot easily be solved.

There are two approaches to promoting industrial pollution countermeasures in the

Philippines; the first is the conventional approach of bolstering legal regulations and

enforcement systems, and the second is to seek voluntary compliance with the law by

securing the participation of pollution sources.

As can be gathered from the measures reviewed in previous sections, the Philippines is

shifting weight from the former to the latter approach, which comprises the following

aspects.

- Establishment of EMS:

Help business owners understand that by establishing EMS in companies, not only does this

ensure voluntary compliance with the law, but also be effective in reducing environmental

countermeasure costs.

- Pilot implementation of waste minimization and CP:

Promote understanding of the significance of IEM through showing the effects of

implementing waste minimization and CP. In doing this, make it possible for companies to

comply with the law.

- Awareness-raising of business owners:

Provide this kind of information to business owners, government agencies and associations

with a view to enlightening related persons.

- Examination of economic instruments:

Utilize economic instruments, for example, environmental user fees, preferential tax

treatment, public soft loans, in order to encourage more companies to take part in IEM.

- Dissemination of Ecolabels

Promote greater environmental awareness among companies by means of ecological

products.

- Flexible approach to application of environmental laws:

Relax applications of environmental laws and regulations and provide other incentives with

respect to voluntary efforts by companies.



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Further bolstering of this policy direction is the issue that faces the Philippines in the future.

For this reason, it is essential for coordination to take place between related ministries and

agencies. The competent authority, the EMB/DENR, is the regulatory organization and

takes the approach of controlling companies. At the same time, the EMB/DENR is a group

of environmental experts who are interested in the environment, but who are not so

concerned with business management and productivity. As a result, companies are always

uncomfortable about being forced into following regulations. Efforts by this regulatory

authority to encourage voluntary IEM activities within industries are viewed with suspicion

by companies.

Meanwhile, strengthening of voluntary IEM by companies needs to be started from the

improvement of business management and productivity improvement. This can then be

followed by investment into productivity improvement and, as one facet of this,

environmental investment. It is thus necessary to understand IEM as an issue of business

management. That is, it is necessary to promote IEM based on the approach of

implementing environmental investment as a management improvement measure. The task

of encouraging this kind of environmental investment is assigned to the BOI/DTI.

Whereas the EMB/DENR approaches IEM from the environmental side, the BOI/DTI

approaches from the side of business management. This is an inevitable difference

considering the differing nature of the duties of each organization, however, if measures are

taken based on only one of these approaches, IEM measures as a whole may become lopsided

and cease to be effective. Therefore, it is desirable for both agencies to adjust their activities

in view of their differing positions, and it is necessary to establish a setup for making such

adjustments.

It is hoped that the BOI/DTI and EMB/DENR examine future necessary measures for

promoting IEM in consideration of past activities and compile them into action plans, while

at the same time carrying out mutual adjustment and checking with each other.

2) Future Impediments and Necessity for IEM Action Plans

The fiscal deficit in the Philippines means that securing state budget for IEM promotion

projects will continue to be difficult in the future. Human resources will also be hard to

acquire in related fields. These points need to be considered as the preconditions for

deploying future IEM measures. Accordingly, it is forecast that measures will need to be

deployed under support from aid organizations for the immediate future.

Until now IEM projects have been commenced under support from numerous aid

organizations, however, the activities have not been well coordinated. As a result, there are



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cases of overlapping projects, as well as cases where past achievements have not been fully

exploited. In order to avoid such wastefulness in the future, it is necessary for each

IEM-related government agency to take the initiative in incorporating IEM measures into

programs. In other words, it is desirable for each government agency to prepare its own

IEM action plan. In order to implement such action plans and achieve results, it is desirable

for each organization to seek support from aid organizations where necessary.

3) Lessons from Projects by Aid Organizations in the Past

3)-1 Promotion of IEM Information Sharing

USAID has noted from its own projects that approaches to reducing environmental load

implemented in IEMP tend not to be replicated to other companies. Information was not

provided to other companies because plant managers thought that the results (countermeasure

plans) of pollution control assessments (PCA) were only intended for the targeted plants, and

because there was no forum for such information to be shared. It has also been pointed out

that factories unable to comply with environmental standards were worried about being

driven to closure if such information was shared with other companies (USAID, 2000).

Considering these points, it is necessary to promote sharing of IEM information within

industries.

3)-2 Promotion of Information Exchange through Participation by Industry

Associations

Industry associations played a major role in the approach to pollution countermeasures that

Japanese companies took during the era of rapid economic growth. The staging of

workshops to exchange information and pass on know-how from larger companies to SMEs

in each industry aided the promotion of environmental countermeasures among Japanese

companies as a whole. The Philippines also has industry associations, however, hardly any

of them possess even a full-time secretariat. As a result, even if information is provided to

industries, it does not filter down to the grassroots level.

Regarding the approach to cutting pollution load in IEMP, participating companies have so

far been solicited on an individual basis. In the future, however, by introducing an approach

combined with measures to organize industry associations (selection of model companies by

industry associations, sharing of model company experiences, and clarification of

industry-wide approaches), it is possible that wider sharing of experience will be promoted.



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3)-3 Facilitating Use of Accumulated Information

Through projects such as IEMP, IISE and PRIME, etc., valuable information that companies

can utilize in promoting IEM has been compiled regarding such items as EMS, environmental

accounting, waste minimization and fundraising methods for environmental investment, etc.

These bodies of information are stored in project implementing agencies (governments and

donors), university libraries, financial institutions and NGOs. Moreover it is expected that

much more information will be prepared by related agencies in the future. In order to avoid

overlapping with existing information and to provide information that corresponds to the

needs of information users, in the future it will be necessary for information providers to

build a system for continually improving the content and form of information.

Furthermore, as more and more websites comes to be started in line with the implementation

of projects, useful information is now available on the Internet. However, since some of

these sites cease to be accessible when projects finish, it will be necessary to build websites

independently of projects so that IEM information continues to be provided.

4) IEM Promotion Measures in Need of Strengthening

In particular, the most fundamental issue that needs to be tackled in promoting corporate IEM

in the Philippines from now concerns how to promote greater understanding among greater

numbers of business managers of the need for IEM and the need for implementation as an

aspect of management improvement and productivity improvement.

First of all, in order to deepen this understanding among business managers, it is desirable to

deploy measures separately according to advanced companies and companies that are

late-developing.

With respect to advanced companies, in order to promote further IEM development, steps

should be taken based on measures to induce IEM actions that are on an equivalent level to

leading global corporations, so that these companies can aim for a higher environmental level

as an element of management innovation.

� Awarding system of advanced companies

� Greater advocacy of IEM and social contribution by advanced companies

� Support of development of IEM technical tools

� Encouragement of participation in an international IEM community

� Dissemination of IEM tools:

► Introduction of environmental accounting



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► Promotion of ecolabel utilization

► Promotion of utilization of environmentally conforming design and LCA, etc.

► Implementation of take back systems for used products

► Green procurement and supply chain management

► Introduction of CP

► Building of recycling networks

As for late-developing companies, the approach should focus on measures to increase

awareness among business managers toward IEM. It is desirable to implement measures

that are effective for that purpose. For example, the following kinds of IEM promotion

measures should be considered:

� Seminars and awareness raising activities

� Support for development and dispatch of skilled personnel for management improvement

� Provision of opportunities for participation in pilot management improvement and CP projects

� Provision of training opportunities for engineers

� Information provision

� Strengthening of economic incentives

� Development and enhancement of industry associations

2.3.3 Current Status and Issues in Environmental Laws and Regulations

(1) Current Status

Law compliance must be the essential part of IEM. The government controls all the targets

for corporate IEM performance such as exhaust gas, effluent, hazardous wastes, industrial

wastes, noise, vibration, and odor by the laws and regulations. It also has a regulation about

EIA that manage environmental impacts of corporate activities. The laws provides basic

concept of environmental management.

Basically the Philippines has established a legal system for controlling activities having

impacts on the environment. The following sections summarize the laws and regulations

with respect to water, air, hazardous waste, EIS, and PCO, which are preconditions for the

companies to implement IEM.



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1) Effluent control

In the Philippines, effluent standards for hazardous substances are at the world level.

Effluent standards for organic substances (BOD, COD) are relatively loose. The standards

discharging to Class C water are BOD80mg/L, COD150mg/L for existing facilities,

BOD50mg/L, COD100mg/L for new facilities. Those discharging to Class D water are

BOD150mg/L, COD250mg/L for existing facilities and BOD120mg/L, COD200mg/L for

new facilities. These standards are applicable only to wastewater treatment facilities

discharging over 30m3 per day.

In spite of lax effluent standards for organic substances, it is said that many companies failed

to comply with the standards. Major reason for that is the government does not have

sufficient budget to enforce the standards by conducting on-site inspections on operation of

wastewater treatment facilities.

Applying the effluent standards for organic substances may not help to improve the water

pollution in the water that the effluent is discharged into. On the ground of this

circumstance, a new Clean Water Act has been in the process of preparation. The new

standards would be stricter; those for existing facilities are integrated into those for new

facilities, and all the wastewater treatment facilities are covered. In addition to the new

standard, the stricter standards, environmental user fees and permission systems for

wastewater discharge are also proposed.

2) Emission control

Clean Air Act of 1990 (RA 8749) provides emission standards for point sources. The

emission standards for hazardous substances are very strict. The standards for sulfur

oxides and nitrogen oxides are not necessarily strict, but measures may be needed for

factories using heavy fuels with high sulfur content because sulfur content of fuels is

regulated as lower than 0.3% (DAO 00-81 Part10, Section 3). The emission standard for

particulates is 150 or 200mg/Nm3, which necessitates the companies using solid fuels to have

dust collectors.

Like effluent control, compliance with the emission standards is not confirmed since

necessary monitoring has not been fully conducted.

Clean Air Act bans open-air burning and discharges of organic solvents and regulates

ozone-depleting substances. The Act requires pollution sources to conduct self-monitoring

and data recording and disclose the data. It also enables the government to implement

emission trading. The next step is to take actions for law enforcement.



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3) Hazardous waste management

Toxic Substances and Hazardous Wastes Control Act (RA6969) defines the basic framework

of management of toxic substances and treatment of hazardous wastes. The IRR of

RA6969, DAO 92-29, provides detailed regulations.

Section 24 of DAO 29 provides that hazardous wastes must be treated to be harmless and

made to be inert residues before being landfilled. In addition, Section 24 defines the

hierarchy of waste management such as minimization of waste generation as the first priority,

followed by recycling and reuse, and treatment and disposal.

A company that generates, handles, transports, stores, treats, or dispose toxic substances

listed on PCL, target substances designated by CCO, or hazardous wastes is subject to the

strict regulations and notifications as well as ‘from the cradle to the grave’ type monitoring.

Any HW generator is required to register with DENR and quarterly report type, amount and

management method of the waste. Without government permit, HW cannot be transported.

HW should be accompanied by a manifesto from a waste generator to the final waste disposal

site in order to ensure proper treatment, disposal and export. Any facility for HW treatment,

storage, or disposal has to apply for construction and operation permits.

Import and export of regulated toxic substances and hazardous wastes needs clearance by

DENR. In the case of agrochemicals such as pesticides and herbicides, clearance by FPA of

DA is necessary, and so is clearance by BFAD of DOH in the case of medicines and foods.

One of the most serious issues concerning HW is that many companies are forced to store

HW on their premises because there is no facility capable of treating organic HW to be

harmless and disposing inert residues in the nation.

4) Industrial Waste Management

All the non-hazardous industrial wastes are handled as municipal wastes under the

jurisdiction of LGUs. The management of such waste is subject to Ecological Solid Waste

Management Act (RA9003). The issue is that LGUs’ landfills are not properly operated

from the environmental point of view. Therefore, companies cannot help worrying about

disposal of their industrial wastes in the landfills.

5) Recycling Policy

The Philippines has not prepared a recycling policy so far, but Ecological Solid Waste

Management Act (RA9003) lists minimization of waste generation and recycling of waste as

the basic policy. Recycling of both municipal and industrial wastes is necessary; the



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important issues are to promote establishment of collection system of used products/wastes

for recycling and how to put products using recycled materials in the market.

Without demand for the recycled products and existence of recycling industry that utilizes

collected materials/wastes, recycling cannot be completed even if used products/wastes are

collected.

Although the government is expected to introduce take back systems for used packaging and

electronic home appliances as requiring manufactures of extended producer responsibility, no

planning has been conducted yet. To establish a sound material cycle society, development

of recycling industry is necessary. According to RA9003, DTI is in charge of formulating

such policy. DTI is urgently required to prepare an inventory of recyclable materials and a

program to promote recycling.

Under Ecological Solid Waste Management Act, the National Solid Waste Management

Commission (whose secretariat is DENR) is in charge of selecting target products for

ecolabeling.

6) Environmental Impact Statement System and Environmental Compliance Certificate

Presidential Decree 1586 was issued to establish an environmental impact statement (EIS)

system in 1978. Section 4 of the Decree provides that the President of the Philippines may,

on her/his own initiative or upon recommendation of the National Environmental Protection

Council, by proclamation declare certain projects, undertakings or areas in the country as

environmentally critical. It prohibits implementation or operation of the projects or

undertakings without first securing an Environmental Compliance Certificate (ECC) issued

by the President or her/his duly authorized representatives.

Based on Section 8 of the Decree, an EIS system has been established by DAO96-37

“Revising DENR Administrative Order No.21, Series of 1992, To Further Strengthen The

Implementation of The Environmental Impact Statement (EIS) System”. The DAO96-37

has been amended to DAO00-05.

Straight interpretation of Section 1, Article 2 of DAO 96-37 gives an idea that it does not

seem to require factories other than environmentally critical projects (ECPs) to prepare an

EIS. That is, most of the factories are not subject to preparation of an EIS. To overcome

the problem, the DAO 96-37 Procedural Manual makes both existing and new factories that

have significant impact on the environment subject to an EIS system based on the definition

of the term, ‘project or undertaking,’ as any activity, regardless of scale or magnitude, which

may have significant impact on the environment by DAO 96-37.



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Section 1, Article 2 of DAO00-25 provides that a firm to be located in an industrial estate or

export processing zone is exempted from securing an individual ECC if an ECC has been

issued for the estate or zone as a whole. In such case, the administrator of the industrial

estate or export processing zone is in charge of controlling locator firms within its premises.

The DAO96-37 Procedural Manual has made it possible for EMB to require more companies

to secure ECCs, in which construction and operation permits are incorporated. The criteria

to judge projects and programs subject to an EIS in the DAO96-37 Procedural Manual are

abstract and leave room for administrative discretion, resulting in a situation that several

companies demanded clearer criteria in their complaints. A company not subject to an EIS

should secure a Certificate of Non-Coverage issued by DENR.

Securing an ECC puts a heavy pressure on companies, for it can require them to comply with

stricter standards for emissions, effluent, and hazardous wastes. The issue is that the criteria

used for setting stricter standards and those for judging necessity of an ECC are not clear.

Companies are expected to secure more permits such as those under Clean Air Act and new

Clean Water Act to be adopted in the future. These permits partly overlap the EIS system,

which puts a burden on firms.

Under the DAO00-05, DENR is authorized to collect environmental monitoring and

guarantee funds from companies. DAO00-05 provides DENR’s authority to conduct overall

monitoring of compliance with ECC including on-site inspection by DENR staff.

7) Pollution Control Officer (PCO)

The Letter of Instruction (LI) No. 588, August 19, 1997, defines PCO. LI No.588 requires

any facility generating or treating pollutants to have a PCO. After some changes,

DAO92-26 of DENR established current PCO system in 1992. DAO92-26 requires a PCO

to be a certified engineer by DENR and lists specific industry sectors that should have a PCO.

For instance, machinery industry, which is originally out of the list of the industries to have a

PCO, would need to have a PCO when DENR sees any potential as a polluter.

As for qualifications for PCO, they should be a registered Chemical, Mechanical, Mining or

Sanitary Engineer or any registered engineer with master's degree in Environmental

Engineering or related field for water pollution control, a registered Chemical Engineer or

Chemist for hazardous waste treatment. Each type of the PCO is ranked by responsibility

level (there are three levels).

Companies with certain sizes of facilities must hire a full-time PCO while the other could

hire a part-time PCO who also could work for another company at the same time.



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8) Regional Regulations

The Laguna Lake Development Authority is a special governmental organization established

to manage natural resources in two regions and have unique relationship with national

organizations such as DENR, regional organizations such as MMDA, and municipalities in

the regions. The LLDA holds a committee consisting of representatives from national

administrative organizations, local governments, local residents, and the private sector. The

committee deals with issues on Laguna Lake development plans and programs and budgetary

planning. The LLDA issues a permit to point sources of water pollution within the Laguna

Lake watershed and charges environmental user fee.

Local government units (LGUs) have authority and function concerning the environment

defined in the environmental laws, namely Clean Air Act and Ecological Solid Waste

Management Act. For example, in air pollution control, LGUs and local communities are

expected to develop an air quality management plan and implement necessary measures

including securing financial resources.

LGUs are also in charge of solid waste management including non-hazardous industrial

wastes.

In addition, environmental permits under the Clean Air Act and the Ecological Solid Waste

Management Act to be issued by LGUs are expected to be developed to complement a

business permit issued by a mayor. A business permit could be used as a tool to implement

environmental policy, but it has not been fully utilized by LGUs.

(2) Future Issues

1) From Regulation to Voluntary Control

Although statutes, discharge standards and control standards have been established for stack

emissions, effluent and wastes generated by industry, such legislation is not thoroughly

enforced. The following factors are listed as leading this weakness of enforcement capacity

(Mertz et al., 1998):

� DENR Regional Offices are in charge of monitoring factories targeted by regulations; however, they are unable to implement sufficient monitoring due to shortages of personnel, means of transport (cars), travel expenses, analysis instruments and reagents, etc.

� Since final judgments concerning punitive measures such as plant closure in cases of infringements are entrusted to the Pollution Adjudication Board (PAB), DENR Regional Offices cannot make decisions on the spot.

� It takes a number of months for reports on violations to reach the PAB from DENR Regional Offices, and analysis findings become often out of date.



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� Due to lack of personnel, DENR Regional Offices have to make decisions concerning compliance or noncompliance with standards based on just one round of sampling; however, companies claim that a single set of samples is not representative of actual operating conditions.

� An inventory of hazardous wastes was compiled in 2002, however, since there is still no inventory concerning wastewater and air pollution, it is not possible to conduct appropriate administrative measures. Moreover, even though companies submit reports relating to hazardous waste control and ECC, there are no means of checking the reports and putting them to use in developing administration.

It will not be possible to resolve and improve these problems in a short time. Accordingly,

it may be more effective to switch from monitoring by regulatory agencies to an approach of

promoting voluntary monitoring by companies and disclosing information about the

monitoring results so that the society as a whole can monitor the environmental performance

of companies.

The issue in the future will be to build up this kind of partnership with companies.

2) Legislative Adjustment for Promotion of IEM

The following issues need to be tackled in order to promote IEM by companies.

1. Examination of legal inducements to promote corporate IEM is desired. In particular, it

is hoped that inducement of IEM based on PEPP (DAO03-14) and establishment of an

EMS certification system for SMEs will be realized.

2. In the DAO96-37 Procedural Manual, applicability of Definition V in Article 3 of

DAO96-37, i.e. “Project or Undertaking – any activity, regardless of scale or magnitude,

which may have significant impact on the environment,” is subject to review by the

EMB, and judgment criteria for factories targeted by such review are not disclosed.

Many factories not having critical environmental impacts are required to secure an ECC,

and this is a burden for SMEs especially. It is desirable to see the clarification of ECC

procedures and examination of measures for relieving the burden of SMEs that are

aiming to secure an ECC (simplification of procedure, relaxation of reporting obligation,

and so forth).

3. As a further step to enhance policy and promote systemization, it is desirable to legally

require environmentally sound procurement by public agencies as a means of supporting

corporate environmental improvements and supply chain management.

3) Planning of Recycling Policy

IEM activities in the product disposal stage consist of product take-back and recycling.

There are two possible approaches to the implementation of recycling; the first is to collect



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used/waste products as municipal wastes and select materials for recycling from them, and

the second is to establish separate collection routes for the recycling of used products. In

the former case, it is difficult to achieve success without establishment of a system to screen

and collect recyclable products, recover resources, utilize collected resources as material

input for other products and supply the products to the market. In other words, in order to

expand recycling, in addition to collecting recyclable materials, it is necessary to utilize the

collected recyclable materials as input for other products, and to develop routes for restoring

them to the market. As for the latter case, recycling cannot be expanded unless target

categories of products are specified and manufacturers are legally required to achieve

collection rates.

RA9003 (Ecological Solid Waste Management Act), which was enacted in 2001, requires the

DTI to plan measures for expanding the recycling market, however, this has not yet been

carried out due to staff and budget shortages. The early planning of such measures is

required together with the inventorying of recyclable materials. Moreover, since RA9003

does not include any stipulations on the legal obligation of parties (in particular industries)

other than the state and local governments with regard to recycling, it will be necessary in the

future to establish the legal basis for recycling by industry. For this reason, an important

issue concerns the establishment of a recycling law and a law concerning the recycling of

individual goods (for example, containers and packaging).

2.3.4 Economic Incentives

(1) Current Status of Economic Incentives

Economic incentives are grouped in two types; (1) Market Type: incentives for encouraging

investment in IEM and (2) Sanction Type: taxes, fees or fines charged to polluters.

Although the Philippines has both types of incentives, they are very limited. The

government offers no subsidy to a company for IEM technology R&D. There is a guarantee

fund scheme by Bureau of Small & Medium Business Development (BSMBD-DTI) for

SMEs for their borrowing money from commercial banks, but it is not functioning in reality.

As incentives to encourage investment in IEM, there are public loans by DBP and Land Bank

and preferential tax treatment for investment by BOI. As one of the effective systems to

reduce wastewater discharge, LLDA employs the Environmental User Fee system, and the

fee system is applied nation-wide by DAO in 2003.



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1) Tax privileges based on BOI Investment Priority Plan

According to the latest Investment Priority Plan (IPP) of the Philippines in 2002, some tax

incentives became available for the following environmental projects:

� Development or conversion of industrial ecosystem

An industrial cluster where waste/pollution minimization or materials and energy cycle maximization is practiced through conversion of waste materials into raw materials or feedstock for another industry. This may include supply of excess hot/chilled water or heat from power generation activities of an industry to nearby communities, institutions and establishments at affordable rates.

Projects that will utilize waste materials as source of power/energy for the production of any product provided that it is for the exclusive use of the producer’s plant/ facilities.

� Self-regulation at the Plant/Firm Level

Activities leading to environmental management systems certification: ISO 14000 refers to the first set of generic standards being developed by the International Organization for Standardization (ISO) that provides business management with a structure for managing environmental impacts. The standards include a broad range of environmental disciplines, including basic environmental management systems (EMS), auditing, environmental performance evaluations (EPE), labeling, life cycle assessment (LCA), and environmental aspects in product standards (EAPS).

Activities in compliance with Multilateral Agreements, (e.g., Montreal Protocol Prescriptions on Ozone Depleting Substances) and International Framework Convention on Climate Change.

Activities on environmental quality improvements as provided for under R.A. 9003 (Ecological Solid Waste Management Act) and future environmental laws.

� Establishment of Toxic and Hazardous Waste (THW) Merchant Facilities

Merchant facility refers to an integrated and self-contained facility capable of handling a wide range of toxic and hazardous waste (THW) for processing that involves treatment, storage and disposal (TSD).

� Establishment of waste handling facilities/sewerage systems for industrial/ municipal wastes (modernization may include rehabilitation)

� Testing/measuring services for emission and effluent and other related environmental parameters (for industrial and vehicular engines preferably with rehabilitation facility)

In addition to the above activities, the following energy conservation activities are also

subject to tax incentives if they comply with the specific requirement provided in the IPP.

Energy conservation activities, in this case, include those which cover the establishment,

operation, and business of providing services in accordance with practical and viable

application of energy conservation concept in order to contribute to the nationwide effort to

save energy, including, but not limited to the following activities:



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� New equipment or modernization of existing energy using equipment leading to improvements in their efficiency;

� Equipment and materials to improve energy utilization in buildings;

� Insulation materials on industrial and distribution systems;

� New, manufacturing plant or process, or modernization of existing manufacturing plant or process, resulting in more efficient utilization of energy than currently achieved;

� New equipment or conversion of existing equipment to enable replacement of one form or sources of energy to another for the purpose of energy conservation

� Building Energy Management Systems (BEMS) composed of micro-processor-based devices that control and optimize the energy utilization efficiency of a building or facility;

� Variable Speed Motor Drives (VSMD) which could be varied to match the load requirements of motor-driven equipment in a building or facility;

� Variable Speed Motor Drives (VSMD) which involve installation of specially designed electric motors, the speed of which could be varied to match the load requirements of motor-driven equipment in a building or facility;

� Highly Energy Efficient Motors (HEEM) which involves the installation of specially engineered electric motors in which iron and copper loss has been reduced by twenty percent (20%) to thirty percent (30%); and,

� Waste Heat Recovery Systems (WHRS) which involve the installation of heat exchanges that recover energy which is otherwise wasted and putting to use the same or its by-product to produce energy.

As indicated above, BOI has preferential tax treatment for investment in environmental

projects (waste minimization in industrial estates, securing electricity for industry generated

from wastes, attainment of ISO14001, activities in compliance with multilateral

environmental agreements, activities on environmental quality improvements as provided for

under RA9003, construction of toxic and hazardous waste merchant facilities, establishment

of waste handling facilities, testing/measuring services for emission and effluent, and energy

saving activities) listed in the Priority Investment Plan.

According the evaluation of fiscal incentives for environmental projects conducted as a part

of the IISE project, the fiscal incentives provide little assistance to firms undertaking

environmental projects (Querbin, 2001). Examples include that only firms that provide

services such as waste management and disposal services to industries and earn from these

services can claim income tax and that duty exemption is only applicable to parts for

imported environmental equipment but equipment per se, which is very expensive. The said

report also points out that weak enforcement of environmental laws and regulations and low

fines of violation and fees compared to investment costs to comply with the laws and

regulations have resulted in a small number of utilization of the fiscal incentives.



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2) Financial Incentives

Financial incentives for IEM promotion include provision of low interest loans and inclusion

of environmental considerations as one of the lending conditions. As for the latter incentive,

only three banks in the Philippines require a company to have an ECC as their lending

conditions. Since companies could borrow money from the other banks that do not require

securing an ECC as prerequisite for borrowers, a mechanism to encourage corporate IEM

activities through loans does not function well.

Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP) have

low interest loans for investment in IEM. Japan Bank for International Cooperation (JBIC)

and the government of Germany provide funds for these loans. The low interest loans have

not been utilized by a large number of companies, and the funds are often under utilized.

According to the assessment of financial incentives for environmental projects (USAID,

2001) conducted as a part of the IISE project revealed restraining factors for SMEs to use the

low interest loans as follows:

� A lender (banks) fails to prioritize cleaner production and/or cost reduction because its weak ability in technical support to SMEs.

� Upon evaluation of loan application, banks do not usually include environmental benefits and cost reduction as judgment criteria.

� Requirements for collateral are strict (DBP would accept shared-collateral).

� Environmental awareness of borrowers is low.

� Although SMEs have capital demand for improvement work, the improvement work is not eligible for the low interest loans.

Other reasons of low utilization of low interest loans by SMEs were identified as follows

from interviews with DBP and LBP staff under the EMPOWER project.

� Conducting a feasibility study on capital investment and filing a loan application accrue costs (although DBP provides technical support to SMEs for the feasibility study, not all the SMEs could receive such support due to limited budget for the technical support).

� SMEs fail to fulfill profit requirements for the loans (usually environmental investment would not increase profits). Relaxing the requirements is being discussed at DBP.

� The government is slow to issue permits necessary for SMEs to establish facilities contributing to improvement of their environmental performance.

� SMEs do not recognize advantage of cost-saving from Cleaner Production.



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3) Environmental User Fee System

LLDA collects levies on effluent discharged into Laguna Lake based on BOD load.

According to the interview with LLDA under the EMPOWER project, BOD load was

decreased by 55% at the time of 1997, and 73.6% at the time of 1999 compared with the load

before the introduction of the environmental user fee. The system is evaluated as well

functioning in terms of reduction in BOD load.

The environmental user fee is determined by BOD level and volume of wastewater.

Table 2.3.1 Environmental User Fee

Fixed fee Wastewater volume 150m3/ a day or over 18,000 Peso

30～150m3/ a day 12,000 Peso

30m3/ a day or less 6,800 Peso

Extra fee BOD concentration 50mg/L or over 5 Peso/kg･BOD

Less than 50mg/L less 30 Peso/kg･BOD

Under this charging system, a company would face unexpectedly hefty fees if the company

discharges large volume of effluent with high BOD concentration. Therefore, there is a

strong incentive for companies to reduce volume and BOD concentration of effluent.

According to LLDA, the annual BOD load discharged to Laguna Lake was reduced to 202

ton in 2002 from 5,403 ton in 1997 (merely 4% of the BOD load in 1997).

The revenue from the user fee is used for monitoring and so forth by LLDA.

(2) Future Issues for Economic Incentives

1) Greater Appeal of Financial Incentives

In the assessment of financial incentives for environmental projects, recommendations are

given for accelerated depreciation, exemption of taxation and duties on environmental

equipment (imported and domestic products), and so forth. In addition to the review of

fines and penalties, these recommendations should be examined and worked into legislation

by related ministries and agencies.

2) Functioning of Financial Incentives

In order to remove the above impediments and make financial incentives more functional, it

is necessary to encourage environmental consideration by financial institutions when making

judgments on loans, to improve conditions for providing funds to environmental investments,

to enhance the technical support capacity of financers, and to enlighten the awareness of

borrowers.



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3) Introduction of Other Incentives and Disincentives

Concerning other environmental incentives and disincentives utilizing the market mechanism,

proposals have been put forward in a study by the ADB concerning the levying of tolls on

water consumption and air pollutant emissions over certain levels, fuel taxation based on

constituent pollutants, trading in wastewater discharging rights, and so forth (ADB, 1997);

however, these measures have not yet been introduced. It is necessary to promote

examination among related ministries and agencies with a view to realization based on the

study findings.

2.4 Conclusion: Summary of IEM Action and Policy Issues

2.4.1 Future Issues for Promotion of IEM in Corporations, NGOs and Industry Associations

(1) Future Issues for Promotion of IEM in Corporations

Future issues are discussed in detail in Section 2.1.3, however, the most essential point is that

business managers gain a true understanding that, in order for companies to voluntarily

promote IEM, implementing measures to improve productivity and to realize cleaner

production from the viewpoint of management improvement will make it possible to

simultaneously reduce production costs and environmental loads.

It is hoped that the business managers who understand this will implement IEM as an element

of management improvement, broadly advertise the results of this to the general public and

contribute to the society by becoming IEM leaders.

(2) Future Issues for Promotion of IEM in NGOs and Industry Associations

Issues concern the clarification of IEM advocating centers and how to enhance and improve

the organizations, finances, functions and services of those centers. It is also necessary to

clarify the division of roles of related NGOs and industry associations, to construct networks

and to improve the quantity and quality of support for companies attempting to tackle IEM.

In order for industry associations to implement industry-wide IEM, they need to prepare

action plans that give more specific expression to Business Agenda 21. Then, they need to

manage the implementation of these plans. However, the fundamental problem impeding

this is the dearth of organizational capability within such organizations. Since this is not

something that can be solved easily, it is desirable to create an environment where secretariat

functions for promoting IEM can be established within the said NGOs and the Philippine

Chamber of Commerce and Industry.



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2.4.2 Issues of IEM Promotion Measures by Government Organizations

Current status and issues of government IEM policies are summarized below.

Table 2.4.1 Activities that related to IEM and their Political Issues

Measures Efforts Made Future Agenda

Seminars Many seminars have been held by PBE, MAP, and APRCP.

・ Coordination of IEM

seminars and integration of information

Recognition system

Award system is in place such as DTI’s Philippine Quality Award.

・ Establishment of a

recognition system that promotes SME’s environmental management

Information Provision

Manuals and leaflets on waste minimization, EMS, and other IEM related topics have been developed and published. An environmental information center for Philippine industry has been set up in PBE.

・ Establishment of a system to

continuously improve contents and provision methods of IEM information

・ Establishment of a clearing

house of IEM information

Measu

res to p

rom

ote v

olu

ntary

action

s

Aw

areness-raisin

g, cap

acity b

uild

ing

of b

usin

ess ow

ners

di

di

i

Training of production / environmental management auditors

Trainings for PCOs have been held.

・ Training of technical experts

who can audit production and environmental management

・ Enhancement of training on

cleaner production

Development and implementation of voluntary action plan

84 industry associations declared to participate in Business Agenda 21 for sustainable development.

・ Implementation

Technical assistance to Waste Minimization

IEMP & IISE projects provided technical assistance to individual companies for introducing waste minimization and developed manuals on waste minimization. Private company’s cooperation at ITDI was realized for technical development.

・ Approach from resource

productivity improvement

・ Increase in business owners /

executives support to IEM

・ IEM promotion by industry

associations

Measu

res to p

rom

ote v

olu

ntary

action

s

Pro

mo

tion

of IE

M to

ols

Introduction of EMS

Awareness raising, technical assistance, trainings for local consultants, and development of relevant manuals for introduction of EMS have been conducted in IISE and PRIME projects.

・ Reduction in procedure costs

for EMS certification (establishment of local accreditation body)

・ Incentives to introduce EMS

・ Promotion of environmental

report preparation and disclosure



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Measures Efforts Made Future Agenda

Environmental Accounting

PICPA commenced trainings on environmental accounting

・ Promotion of introduction of

environment accounting to individual companies

Ecolabel Secretariat has been established for introduction of an ecolabeling program

・ Establishment of standard

procedures for management of the Ecolabeling program

・ Accreditation of the ecolabel

and promotion of ecolabeled products

Green procurement

None ・ Dissemination of supply

chain management

Recycling promotion

None. Each factory takes its own action for recycling promotion.

・ Promotion of recycling and

DFE

Emission control (including Monitoring)

Emission and effluent regulations as well as regulation on hazardous waste management have been set.

・ Introduction of voluntary

monitoring

Appointment of Pollution Control Officers

According to factory type and size, appointment of PCOs is mandated.

・ Accreditation of PCO’s

technical levels

Su

pp

ort fo

r legal co

mp

liance

Promotion of recycling used products

DTI is mandated to formulate measures to expand the recycling market by RA9003.

・ Development and

implementation of policies to develop recycling industry

・ Clarification of industry’s

roles in recycling

Tax exemption Tax exemption is given for investment in environmental projects (including energy saving) listed in “Investment Priority Plan”.

・ Increase the use of the

exemption system

Low interest loan DBP and LBP provide low interest loans for environmental investment.

・ Increase the use of the loan

system

Eco

no

mic m

easures

Environmental user fee

User fee system has been introduced for wastewater discharge into Laguna Lake based on BOD load.

・ Identification of the results of

the existing fee system

・ Application to other areas

Chapter 3

Development Strategy for

Industrial Environment Management

The Study on Environmental Management with Public and Private Ownership (EMPOWER) JICA

3. Development Strategy for Industrial Environment Management EX CORPORATION

3-1

3 Development Strategy for Industrial Environment Management

3.1 Fundamentals for Development of Environment Management in Industry Sector

3.1.1 Fundamentals and Issues of Environment Management in Industry Sector

One of the important findings identified in the EMPOWER project is that every industrial

enterprise increasingly recognizes the necessity of complying with the environmental laws

and regulations provided in the Philippines. This is an achievement of the efforts made by

the Government of the Philippines (GOP) for the past 10 years. However, many of SMEs,

due to their small and limited management and financial capacity, are still facing the

difficulty in investing pollution control or environmental management.

Meanwhile, the large industries, which have already achieved major successes in their

businesses and held enough management and financial capacities, are usually active in

environmental management. They are also strengthening their competitive power in the

market. The gap between LEs and SMEs is getting bigger and bigger in their

competitiveness as well as management and financial capacities.

The most critical issue of SMEs is that both production process and quality control of their

products remain at lower level due to their limited financial capacity for equipment

investment. SMEs are usually forced to apply older production processes with the second

hand machinery and equipment while their limited maintenance capacity increases the defects

in their products as well as lowers the water and energy consumption efficiency. Low or

instable quality of their products reduce their competitiveness in the market and decrease

their business profit. Consequently, expansion of their businesses becomes more and more

difficult. It seems that many SMEs in the Philippines are currently trapped into this kind of

vicious circle in their businesses.

For the SMEs mentioned above, environment management is nothing more than the

additional factor that increases their production cost and makes their businesses more

difficult. The top priority of SMEs is given to the increase in their productivity and profit

with no/or minimized additional investment.

The first step of IEM for the SMEs in the Philippines is to stabilize their businesses through

improvement of their production processes and quality of products with the financially viable

measures. IEM policies, measures and technologies have to be identified in consideration of

such needs of SMEs.



3-2

3.1.2 Relationship among Stakeholders in IEM

Although stabilization of business management is the starting point for development of IEM,

the awareness of management executives in IEM is another key of taking the first step for

IEM. In this regard, it is of great importance how the business enterprises build their

relationship with other relevant stakeholders, i.e. government, consumers, business groups,

citizens, and so forth. Figure 3.1.1 illustrates the relationship between the business

enterprises with other relevant stakeholders.

Technical advice / provide information / training/ tech development/・award(honory )

IEM

Production

Management

& Activities

Idea of

Manager

Community

Monitoring / Complain

Industry group Env. NGOs

Standardize Finance Preferable taxation

Regulations Monitoring Levy

Service Provider (Productivity diagnostics)

Competitors

Environmental

Impacts

Consumers

Distribution / Sales

Purchase / Complian / Popularity

Competition

Engineering

consulting

service

Government Enterprises

Information / Co-Trainings

Information

Report / Registration

Monitoring/Permitting

Support

Support

Partnership

Information / Enlightenment / conciliation Compliant / Suggestion

Figure 3.1.1 Relationship between the business enterprises with other relevant stakeholders

In view of promoting IEM, the government is in a position to motivate business enterprises

for proper IEM through application of various policy instruments, e.g. IEC, technical



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assistance, regulatory measures, economic incentives, and so forth. However, policy

intervention has to be limited to the extent that disturbs the self-reliant efforts by the

enterprises. Excessive intervention such as too stringent application of laws and regulations

or too hospitable assistance such as subsidies should be avoided.

Aside from the government, business enterprises also have relationship with shareholders

alike (business competitors), consumers, suppliers, environmental service providers, business

groups, and so forth. For the factories, relationship with the peoples living in their vicinity

is also of great importance. As our survey on 100 industrial enterprises shows, the pressure

from these relevant stakeholders is another key factor of strongly motivating them for IEM.

3.1.3 Keys of IEM Development

(1) Different level of IEM development between LEs and SMEs

The results of factory survey identify the difference in the level of IEM between LEs and

SMEs. The level of IEM is advanced in LEs while it is still low in SMEs in the Philippines.

SMEs are required to improve and stabilize their business performance through proper

management of production process and quality control of products before full-scale

implementation of IEM. IEM promotion needs different approach depending on the level of

business conditions of each enterprise, especially between LEs and SMEs.

(2) New social roles of the enterprises in sustainable society

Commercial product is the interface between the manufacturing industries and consumers.

The commercial product, through its product lifecycle ranging from procurement of raw

materials, production, and distribution to consumption and disposal, creates long-range

impacts upon the environment. All the industrial enterprises are responsible for minimizing

all these potential environmental impacts (Extended Producers’ Responsibility) as well as for

disclosing such information correctly to the consumers.

For the peoples living in the vicinity of the factories, the enterprises are required to disclose

all the necessary information about the potential environmental impacts of their production

activities and the measures taken to prevent them so as to obtain trust of the peoples.

All of the above are the responsibilities of the enterprises in the era of environmentally sound

and sustainable society as mentioned in the Philippines Agenda 21.

(3) Roles of NGOs, industry groups and environmental service providers (ESPs)

To raise understanding and awareness of IEM among the industrial enterprises, the roles of

industry groups and NGOs are important as the sources of information as well as human

resources who provide and transfer proper technologies and know-how. Environmental



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Service Providers (ESPs) are also expected to take the leading role of building the market of

environmental business in the Philippines through provision of environmental services that

benefit industrial enterprises in terms of pollution control as well as increasing production

efficiency and reduction of production cost. The environmental businesses such as ESCO

(Energy service Company), in which a contingent fee system is applied for the success in

reducing production cost by their proposals of energy and raw material saving options, also

need to be introduced for their market expansion.

3.2 Basic Policies for Promotion of IEM in the Philippines

3.2.1 Definition of the IEM Promotion Policy

IEM promotion policy hereby proposes the orientation of governmental intervention in the

activities of industrial enterprises and other stakeholders for the purpose of promoting IEM.

As mentioned in Chapter 2, the policy interventions are different in their basic methods of

promoting IEM between the regulating authority like EMB/DENR and BOI/DTI, the

authority in charge of developing the national industries in the Philippines. The IEM

promotion policy here focuses on the policies from the viewpoint of industrial development

authority, in this case, the standpoint of BOI/DTI.

However, environmental compliance is the precondition of proper industrial activity that has

to be followed by every enterprise on a voluntary basis. All the government authorities

including EMB/DENR and BOI/DTI take the same stance on this aspect. The difference of

BOI/DTI from other authorities is that it defines IEM as an essential part of proper industrial

development in the Philippines.

Although the IEM promotion policy focuses on how BOI/DTI should make policy

interventions in the industrial activities, it also discusses the roles of other authorities since

coordinated efforts among government ministries and agencies are also required for proper

development of IEM in the Philippines.

3.2.2 Major Constraints

The government budget that can be allocated to IEM promotion is very limited in the

Philippines. Human resources are also limited in number as well as their expertise in the

field of IEM. The EMPOWER project recognizes that these two are the main constraints of

the government in promoting IEM in the Philippines. The policies and measures for IEM

promotion have to be formulated in due consideration of them so that they can be

implemented within the capacity of current government.



3-5

3.2.3 Major Targets of IEM Promotion

(1) Targets of IEM activities

The objective of IEM is to proper control environmental pollution through compliance with

the laws and regulations that are provided so that pollution impacts upon human health and

the environment can be eliminated or minimized. However, the way to achieve this

objective has made major changes during these 10 (ten) years.

The IEM in the previous times focused on the application of so-called end-of-pipe (EOP)

technologies. Legal, regulatory and other policy tools also focused on promotion of EOP

technologies. Since 1990s, however, it was more and more clear that production process

management including control of production input (raw materials, water, energy), efficiency

improvement of production process, and on-site reuse and recycling of resources was a lot

more important and efficient than control of the pollutants at their outlet.

These types of production process management are the ones currently defined as pollution

prevention (PP), waste minimization (WM), cleaner production (CP) or green productivity.

The Environmental Management System (EMS), which is standardized as ISO 14001, is the

institutional and organizational mechanism of systematically conducting the above

production process management within the total operation of business enterprises.

The IEM promotion policies in the EMPOWER project also focus on these types of

production process management in the Philippines. Incorporation of pollutants reduction

into production process management is the main target of IEM in the EMPOWER project.

Combining the environmental management system with the production management system

within the factories and business enterprises is the organizational basis for achieving this IEM

target.

The production process management originally aims at reducing the loss of industrial input,

which is conducive to lowering production cost and increasing productivity as well as quality

of products. It also simultaneously reduces emissions of pollutants and minimizes the

environmental load arising from industrial activities. The production process management

is the win-win approach that contributes to improvement of industrial productivity as well as

protection of the environment.

(2) The roles of IEM in competitiveness of the Philippines Industry and growth of

national economy

Proper IEM is of great importance especially for export-oriented industry that is required to

compete with other industries in the international market that is getting more and more strict

about the environmental consideration all through the lifecycle of industrial products. To



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compete and survive in the international market, the Philippines industry has to comply with

the international environmental standard of industrial activities. Defeat in the competition

in the international market will have a serious negative impact upon sustainable growth of

economy in the Philippines. In this regard, IEM is an essential part of the sustainable

economic growth of the Philippines. Promotion of IEM is also a good opportunity for the

Philippines industry to recognize the importance of efforts not just in the area of

environment, but also innovation of business management, productivity improvement, quality

control of the products and development of new business market.

(3) Focuses on SMEs and consumers

1) SMEs

Most of the Philippines domestic capital based industries are categorized as SMEs. They

are usually troubled with their weak financial, technical as well as human resources capacities

and obliged to keep day-to-day management of their businesses. It is difficult for SMEs to

make any investment in the long-term perspective or even in the short-term perspective such

as for the next 2 or 3 years. The government support has to be first given to SMEs so that

they can introduce IEM within their limited capacities. The IEM promotion Policy here also

primarily focuses on SMEs.

2) Consumers’ understanding of environment issues

Consumers’ support is the basis of the business activity. Although not all the industrial

enterprises provide their products directly to the consumers, all of the products finally go to

consumers, end-users of the products. Although there was no information about the

environmental loads of the products provided to the consumers, the consumers’ awareness of

the environmental impacts of the products they consume is increasing in many developed

countries. Environmental pressures to the industrial enterprises is also increasing and

expands to not just the impacts of production activity itself but also to the environmental

impacts of the raw materials they use as well as the impacts when the products are disposed

after use. Responding to such situation, some of industrial enterprises started to conduct

environmental management of their suppliers, that are called ‘Supply Chain Management’.

The Philippines Industry will be sooner or later involved in this trend. The above examples

of the industries in developed countries also indicate the influence of consumers to the

industry’s behavior. In this regard, environmental education and raising awareness of

environment among consumers are important roles of the government so that the efforts of

the industries in IEM can be properly recognized by the consumers.



3-7

3.2.4 Policies and Measures to Promote IEM

This section discusses the basic framework of policies and measures to promote IEM. As

discussed in the former section, the major issues to be addressed are identified as follows:

• Awareness of corporate managers on the importance of IEM,

• Establishment of organizational mechanism for conducting IEM within each business

enterprise, and

• Improvement of productivity through implementation of IEM

The policies and measures to promote the above efforts are identified as follows:

• IEC Measures to promote voluntary efforts of business enterprises

• Legal and regulatory supports to implementation of IEM

• Financial/economic incentives to promote IEM

(1) IEC measures to promote voluntary efforts of business enterprises

1) Awareness and capacity building of business enterprises in IEM

The measures for awareness and capacity building of business enterprises in IEM mainly

consist of:

• Seminars/workshops

• Provision and dissemination of IEM information

• Establishments of awards or public recognition measures for remarkable efforts of IEM

• Training of human resources working for IEM within the business enterprises

Although many of the above types of activities has been carried out by various stakeholders

including government departments and agencies, NGOs, industry groups, donors, and so

forth, they are often sporadic, fragmented and not well integrated with each other. These

efforts have to be well coordinated and systematically designed so that the business

enterprises constantly update their information and know-how of IEM.

IEC measures should also focus on motivating the businesses to conduct IEM through

presentation of the possible benefits obtained from IEM such as reduction of production cost,

increase in productivity, improvement of product quality, and so forth.

2) IEM tools

IEM tools are mainly divided into two categories, i.e. environmental management software

and hardware. The environmental management software is represented by the guidelines or

manuals for corporate environmental planning, environmental management system (EMS),

corporate environment report, environmental accounting, green purchasing, etc. The



3-8

environmental hardware means the actual technologies to be applied for improving IEM such

as waste minimization, cleaner production, design for environment (DfE), recycling, product

lifecycle assessment, and so forth.

Though all of the above tools should be introduced to the Philippines industries, they have to

be properly designed or modified to adapt to the conditions of IEM and technical/financial

capacity of the Philippines industries.

3) Building relationship among stakeholders

To disseminate IEM among the Philippines industries, a close relationship has to be built

among relevant stakeholders, especially the government, industry groups and environmental

NGOs in the Philippines. An organization or meeting may need to be established so that

each stakeholder can regularly discuss and build consensus on the measures for promoting

IEM in the Philippines.

(2) Legal and regulatory supports to implementation of IEM

Legal and regulatory supports may include promotion of self-regulation by industries through

granting a grace period of enforcing the laws and regulations, establishment of the

Philippines version of standardized environment management system, licensing system of

pollution control officers (PCOs) and other experts working for IEM, and so forth. Legal

and regulatory supports for promotion of recycling are also areas that are not yet well

addressed in the Philippines.

As to the promotion of self-regulation by industries, the Philippines Environmental

Partnership Program (PEPP), with the leadership of EMB/DENR is currently examining the

possible legal and regulatory supports in terms of providing some relaxations or exemptions

of law enforcement upon the industries under the active efforts of IEM. This kind of

initiative has to be strongly supported by other relevant government agencies including

BOI/DTI especially for SMEs.

Standardization of the Philippines version of EMS and licensing system for IEM experts are

needed for establishment of institutional and organizational basis of IEM within each

industry.

Regarding the promotion of recycling, BOI/DTI is mandated, in the Ecological Solid Waste

Management Act (RA9003), to formulate the national recycling policy and program. This

national recycling policy and program needs to be formulated as soon as possible to guide

development of recycling industries in the Philippines.



3-9

(3) Financial and economic instruments

With the financial assistance of donors, financial assistances are provided to some of the

environment investment activities in the form of low interest loan, as well as tax reduction

and exemption. There are some issues to be addressed for increase in the use of these

financial assistance programs since the requirement of utilizing them is still difficult to

comply especially for SMEs. As to the economic instruments, Pollutant charge system is

currently applied by LLDA for discharge of wastewater from the factories based on the

concentration of BOD load. This system has been found effective in the WB assessment

especially for reduction of organic pollutants emissions. EMB/DENR is currently under

examination of applying this system to nation wide with the establishment of Clean Water

Act. Clean Air Act, on the other hand, provides the implementation of emission permit

trading system as another economic instrument though no detail is yet determined.

In applying such economic instruments, the issue of equality has to be properly considered.

Although industry sector is one of the main sources of air and water pollution, there are also

other significant sources of pollution in the Philippines. Focusing only the industrial

sources of pollution may run counter the principle of equality in law enforcement.

In addition, the use of collected charges is another issue of primary attention. Currently, the

collected pollution charges by LLDA are utilized only for general administration of LLDA.

As found in the cases of similar economic instruments applied in developed countries, the

fund collected from pollution charges should be reallocated for pollution control or

environmental protection purposes as much as possible. Current system of pollution charge

needs to be reviewed and revised in this regard.

3.2.5 Scenario of IEM Development in the Philippines

In promoting IEM in the Philippines industry, difference in scale and capacity of industrial

enterprises has to be properly considered. The approach of IEM promotion should be

differentiated especially between LEs and SMEs.

The current level of IEM in the Philippines industry can be illustrated as shown in Figure

3.2.1. Since the industrial enterprises showing high performance of IEM are still minor in

the Philippines industry, they still cannot take the leadership of IEM in the Philippines.



3-10

Industry groups with unsound management practices which need improvement; also the level of IEM performance is low.

Soundness of management practices is secured, but level of IEM performance is low.

Highly sound management practices; also level of IEM performance is high (10 + companies)

Pulled toward low level of

IEM

Figure 3.2.1 Current level of IEM in the Philippines industry

To promote self-reliant IEM by the Philippines industry, the industries of high IEM

performance have to be increased through various promotion measures recommended in the

EMPOWER project. For the industries having stable business management, but limited

efforts in IEM, the government should mainly provide IEC measures to promote voluntary

IEM activities since they are considered to have enough capacity of implementing IEM

mostly by their own. For the industries that are still instable in their industrial production

and lower capacity of IEM such as SMEs, technical and financial assistances need to be

provided in addition to the use of IEC measures. Through the application of different

measures to the industries depending upon the levels of production and management

capacity, the average levels of business and industrial environment management will increase

in the Philippines industry.

Once the Philippines industry reaches a certain level of advanced and stable production and

productivity with stable financial return on investment, financial assistance can be reduced

while IEC measures will dominate the IEM promotion measures.

Industrial enterprises are always aware of the behavior of other enterprises dealing with same

or similar products. If the level of IEM in one enterprise increases, it will influence the

others to keep up with him. The government should contribute to creation of such trend in

IEM in the Philippines.



3-11

Figure 3.2.2 illustrates a developed level of IEM in the Philippines Industry.

Figure 3.2.2 Developed level of IEM in the Philippines Industry

Making profits is always the first priority of all business activities. In this regard, increase

in productivity and value-added of products is the permanent issue for all the industrial

enterprises. The advantage of IEM is that it can contribute to both needs of the industries.

There are a number of technologies that can increase productivity as well as reduce pollutant

emissions. Although some of such technologies require large capital investment, there are

also no or low cost technologies that SMEs can apply within their technical and financial

capacity. SMEs can start with such no or low cost technologies with their focus upon

improvement of productivity and quality of products. Once they succeed in productivity

improvement and gaining more profit, they can take the next step of IEM with the increased

technological and financial capacity.

With the increase of environmental awareness in the Philippines, especially in consumers,

IEM will be an important part of industrial activities to increase value-added of their

products. Environmental value has already been one of the important reasons for consumers

to choose commercial goods, especially in developed countries. At this point of time, IEM

will proceed to the next stage. To reach this advanced stage as early as possible, GOP is

required to provide proper environmental education to the people of the Philippines so that

Industry groups with unsound management practices which need improvement; also the level of IEM performance is low.

Soundness of management practices is secured, but level of IEM performance is still low.

Highly sound management practices and IEM performance. (Several hundreds) They appear large group.

Toward high level of IEM performance



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the Philippines industry can be highly motivated to upgrade its IEM activities and catch up

with the international level of environmental management.

3.3 Identification of Priority Areas

This section discusses the priority areas of IEM in the Philippines in terms of environmental

issues, industry sectors, and policy instruments.

3.3.1 Priority of Environmental Issues

There are a number of environmental media through which the negative impacts of industrial

activities are transferred. Well-known environmental media are air, water, and soil while

environmental load of industrial activities come out in the form of air emissions (inc.

greenhouse gases), wastewater or effluent, solid and hazardous waste, noise, vibration,

offensive odor, and so forth. The focus of the EMPOWER project should be given to

minimize such environmental load of industrial activities. The first priority should be given

to minimization and control of the pollutants having high risk to human health, followed by

those that have higher risk to living and global environment. Priorities of environmental

issues have to be determined with attention to the above criteria. As to the industries, air

and water pollutants as well as hazardous wastes that have serious impacts upon human

health should given the first priority of proper control. Such pollutants include, for

example, dust fall, SOx, and NOx as air emissions, heavy metals and HC (hydrocarbon)

discharged in the form of wastewater, and hazardous wastes. In terms of global

environment, greenhouse gases and ozone depleting substances are of great importance. In

formulating the IEM Action Plan, the EMPOWER project needs to consider the above

criteria for setting the priority of pollutants, as well as the localities threatened by them.

3.3.2 Priority of Industry Sector

There are differences among types of industry in their environmental impacts in terms of their

quantity as well as quality. Reviewing the prior studies and available data in the Philippines

as well as the experience in Japan and other countries, the EMPOWER project identified the

priority sectors of industry through the evaluation of the following indicators:

• Impacts of the industrial activities that can be quantified as air pollutant emissions,

water pollution loads, and amount of solid waste generations (especially hazardous

waste).

• Potential impacts of the industrial activities that can be estimated from the energy,

water, and raw materials input, as well as the current processes applied dominantly in

the Philippines industry.



3-13

In addition, taking into account the major concern for environmental management of SMEs in

the Philippines, the ratio of SMEs by each sub-sector of industry is also considered in

identifying the priority sectors.

Due to limited available data on industries, the EMPOWER project conducted extensive

questionnaire and interview surveys to further identify the current conditions of

environmental load by various industry sectors. As the result of evaluating all the available

data from prior study works as well as those conducted by the team, the EMPOWER project

identified 19 sub-sectors as the priority of promoting IEM as shown below

• Beverage

• Cement manufacturing

• Chemical products (industrial and agrochemical)

• Coconut-based milling, refining and spirit distillation

• Cosmetics

• Electroplating and metal finishing

• Food processing - tuna and small-scale processing

• Glass and glass products

• Machinery and tool manufacturing

• Metal foundry and forging

• Offset printing

• Petroleum products

• Pharmaceuticals

• Plastics and rubber

• Pulp and paper manufacturing

• Soap and detergents, cleaning agents

• Spinning, textiles and dyeing

• Sugar milling and refining

• Wood-based industries

3.3.3 Priority of Policy Instruments

The EMPOWER project basically focuses on all kinds of tools and measures to promote

IEM. It categorizes them into three types, namely suasive measures (information,

knowledge, and awareness raising), legal and regulatory measures, and financial/economic

incentives.

Considering the weakness in institutional and financial capacity of the Philippines

Government, the first priority should be given to suasive measures that can promote

voluntary IEM activities by industries with comparatively lower cost. However, in the

action plan, the EMPOWER project all focuses other types tools and measures based on the

identification of current constraints and issues. In determining the priority of policy

instruments to promote IEM, the EMPOWER project considers the criteria given as follows:



3-14

Time

Good Housekeeping / Basic understanding of IEM

Level

of

IEM

develo

pm

en

t

Material Flow Management = Waste

Minimization, CP & EMS Practices

・ISO14001 / Env. Report

・DFE / Env. Accounting

・LC Management

・Green Procurement

Tertiary Level

Secondary Level

Primary Level

• Policies contributing to both improvement of productivity, competitiveness and

environment in lower cost of investment,

• Policies serving especially for development of IEM by SMEs,

• Policies that are expected to show identifiable effect within the short-term of 2 to 3

years,

• Policies that are expected to have spillover effect upon IEM by industries,

• Policies that promote voluntary efforts of IEM by industry groups and NGOs,

• Policies contributing to establishment of the network among the relevant stakeholders

including industrial enterprises, industry groups, environmental service providers,

government and so forth,

• Policies contributing to building public and private partnership in IEM,

• Policies that can be continuously monitored about their progress and effects,

• Policies that promote self-sustaining development of IEM by industries.

There are various measures to promote IEM that can be utilized depending on the levels of

IEM development within the individual industries. Figure 3.3.1 illustrates the hierarchy of

IEM.

Figure 3.3.1 Hierarchy of IEM

According to the survey on industrial enterprises conducted in the EMPOWER project, a

considerable number of the Philippines industries are still at the primary level of IEM where

proper housekeeping of industrial activities and basic understanding of IEM are required.

Most of them do not achieve the secondary level of IEM at which production input and

output are properly controlled through material flow management and IEM practices such as



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CP and waste minimization are systematically incorporated into the regular industrial

activities under the organized environmental management mechanism like EMS. The

industries that have reached the tertiary level of IEM are still very few in the Philippines.

The priority of IEM promotion has to be given to achievement of primary and secondary

levels of IEM by the Philippines industries.

3.4 Basic Framework of IEM Promotion

Based on the basic policies and priorities of IEM promotion determined above, the

EMPOWER project establishes here the basic framework of IEM promotion in the

Philippines.

3.4.1 IEC Measures to Promote Voluntary IEM by the Philippines Industry

(1) Awareness and capacity building of corporate managers and other key stakeholders

in IEM

To raise awareness and capacity of IEM among corporate managers in the Philippines

industries, proper information needs to be provided through various media such as uploading

of IEM information on the website and documentation of IEM technologies and guidebooks.

Other IEC measures like training seminars and workshops are also required to disseminate

the information more deeply and widely to the Philippines industry.

1) Establishment of IEM information center

To provide industries with proper information in a timely manner, the EMPOWER project

suggests establishing an IEM information center that have well designed stocks of

information database directly connected with industries and other relevant stakeholders of

IEM. As to IEM technology information and database, EMB/DENR and ITDI/DOST have

the largest stocks in the Philippines while PBE, an environmental NGO, has been taking the

leading role of providing such information to the industries through various media (internet,

publications, seminars, etc.). The EMPOWER project strengthened that function of PBE

through the pilot project of building ‘Integrated IEM Information Network’. The

EMPOWER project recommend that the above initiative should be further enhanced through

expansion of current network with industries and other stakeholders in one hand and

continuous update and accumulation of IEM information and data stocks.

2) Compilation of IEM best practices in the Philippines

Corporate mangers always take notice of other companies’ behavior so that they cannot be

left behind the others. Although some of the information about the efforts of IEM by



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individual industries may belong to their confidentiality, it is very important to share the

successes of IEM among the industries.

The prior efforts and successes of IEM by the individual industries with the assistance of the

government and donors are partially disclosed, but they are often ad hoc, fragmentary, and

not well accumulated as the stock of information and data for the use by other industries.

On the other hand, there are some sectoral guidebooks for CP or pollution control prepared

by the government as well as donors while they are often too general to be applied by the

Philippines industry or the compilation of developed countries’ experience that do not well

adapt to the conditions of the Philippines industry. The EMPOWER project, through the

pilot project of ‘Waste Minimization’, formulated several waste minimization manuals based

on the actual experience of WM by the Philippines industries. These types of manuals

reflecting the actual experience and know-how gained from them need to be further

formulated for each industry sub-sector so that other industries can learn from such living

examples. The idea of compiling the best IEM practice of the Philippines industry comes

from the above recognition of current conditions of IEM.

3) Development of IEM leaders in the Philippines industry

To raise awareness of the Philippines industry on IEM, it is necessary to provide advices

from someone who is credible and has extensive experiences in the field. In other words,

such IEM leaders in the Philippine industry need to be trained. Although numerous 1-day

seminars for PCO and corporate managers have been held to date, such seminars do not attain

the credible IEM leaders.

In order to train the IEM leaders, systematic and well-organized IEM training courses should

be developed that, consequently, requires personnel who are capable of developing the

training courses. Fortunately, there are such training courses in foreign donor organizations;

therefore, the EMPOWER project suggests setting up a plan and systematically sending

personnel to those training courses and then disseminates their knowledge and know-how in

the Philippines industry.

(2) Measures to increase IEM practices in the Philippines industry

1) Development of Action Plans on Waste Minimization and CP in industry

Industry associations play important roles in disseminating and increasing IEM practices in

the Philippines industry. Although a number of industrial associations have participated in

development of the Business Agenda 21 and prepared frameworks on IEM, none of them has

reached far enough to target for lessening environmental loads. To this end, the

EMPOWER project formulated several action plans in its pilot projects on Waste



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Minimization for some industrial associations, including food processing, paper & pulp,

chemical, and metal casting industries. Development of such action plans in other industries

should be followed.

The GOP is recommended to promote the development of IEM action plans focusing on WM

and CP for encouragement of such measures in industry associations.

2) Upgrading of Corporations Implementing IEM

As mentioned earlier, it is of great importance for development of the Philippines Industry to

increase the number of corporations implementing higher performance of IEM. Therefore,

the corporations having the potentials to implement IEM at higher level are required to take

the lead in their associations to disseminate implementation of IEM.

3) Strengthening Support for NGOs and Industry Associations

NGOs and industry associations are the key incubators of promoting IEM while they usually

faces difficulties in terms of fund, human resources to play their principal roles.

Strengthening the capacity of NGOs and industry association is also required to support

formulation and implementation of IEM action plans in the Philippines Industry.

3.4.2 Legal and Regulatory Support

(1) Deregulation and Promotion of Voluntary Measures

The Existing laws and regulations are intricate and sometimes overlapped among them in the

Philippines. Many government authorities recognize this problem and are attempting to en

route it by coordination among authorities. Further efforts may be required especially for

the following issues:

• Integration and simplification of permits system (“facility permit” and “one-window

application,” etc.)

• Careful guidance on the compliance with laws and regulations

• Relaxation of the financing requirement for SME by public/private bank (lowering the

current hurdles of loan requirement, e.g. collateral requirement, etc.)

Prior policy studies on IEM made various recommendations regarding legal and regulatory

reforms including the above to further promote IEM. GOP needs to review and evaluate all

of these recommendations in terms of their political, technical, and financial feasibility in the

Philippines.

As to the voluntary measures on IEM, DENR formulated its basic legal framework in the

Department Administration Order of 2003 (DA2003-14) on the Philippine Environmental

Partnership Program (PEPP). PEPP promotes various voluntary measures including



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simplified EMS certification, ecolabeling, voluntary agreement on environment management

with nearby residents or LGUs, and so forth. To implement PEPP, legal, regulatory and

policy coordination is required among the relevant government authorities including

BOI-DTI, DENR, etc.

(2) Other Policies and Measures Needed for Further Promotion of IEM

The following policies and measures may be needed to further promote IEM in the

Philippines:

• Green procurement policy

• National recycling policy

• National EMS accreditation system

• Eco-industrial Park Development Policy

BOI should concentrate on further development and dissemination of currently promoted

green procurement policy and the National Recycling Policy, as required in the Ecological

Waste Management Act. Joint efforts may be required for establishment of the national

EMS accreditation system among the relevant government authorities including BOI, BPS,

DENR and so forth. The eco-industrial park development policy may be first promoted to

more advanced industrial areas, e.g. the industrial areas managed by PEZA.

3.4.3 Economic Incentives

Responding to the success of effluent charge system applied by LLDA, DENR plans to

expand the system to nation wide. On the other hand, the existing financial and economic

incentives on environmental investment are still not well utilized by the Philippines industries

especially SMEs. To further promote the above financial and economic incentives, the

following issues need to be properly addressed:

• Assessment on the impact of effluent charge system upon reduction of pollution load,

estimation of collected charges, and examination on the proper use of collected charges

• Assessment of the current financial and economic incentives on environmental

investment to adapt them to be more easily availed by SMEs

As to the effluent charge system, the use of collected charges as the fund for environmental

investment by industries. The keys of increasing the use of current financial and economic

incentives lie on further public relations of the incentives, lowering the hurdles of loan

requirement for SMEs, and establishment of new incentives such as credit guarantee of SMEs

by the GFIs such as DBP.

In addition, various recommendations have been made by prior policy studies carried out in

the Philippines so far. As is the case of legal and regulatory measures, the result of prior



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studies need to be reviewed in terms of their political, technical and financial feasibility in the

Philippines.

Chapter 4

Industrial Environment Management

Action Plan

The Study on Environmental Management with Public and Private Sector Partnership (EMPOWER) JICA

4. Industrial Environment Management Action Plan (IEMAP) EX CORPORATION

4-1

4 Industrial Environment Management Action Plan (IEMAP)

4.1 Basic Framework of IEMAP

4.1.1 Background and Objectives

The industry sector in the Philippines occupies 34% of the Gross Domestic Product (GDP) in

2000. The manufacturing industry, among others takes an important role in terms of

contributing to 72% of GDP in the industry sector; employing 2.8 million people (10% of the

total employment); occupying 90% of total export and foreign direct investment in the

country. According to the 1997 Annual Survey on Establishments, about 115,700

enterprises are engaged in the manufacturing industry, of which 101,000 are small enterprises

below 10 employees and the remaining 14,700 are more than 10 employees per enterprise.

As shown in the table below, the enterprises with more than 10 employees, occupying only

10% of the total manufacturing enterprises, produces 97% of value-added in this sector. It

implies the big difference between small and medium/large industries in their productivity as

well as profitability.

Table 4.1.1 Comparison between small and medium/large industry in the Philippines

Indicator Medium/Large

Establishments

Small Establishments

No. of workers per establishment 10 or more Less than 10

No. of establishments 14,700 101,000

Employment generated 1,117,000 382,000

Total value added P560 billion P17 billion

The growth of population, industrialization and urbanization over the past 50 years has

increased pressure on the consumption and pollution of the natural resources in the

Philippines. The degradation of natural resources seriously threatens the country’s

economic and social development.

Prior studies pointed out that industrial activity constitutes an important factor environmental

pollution including air and water pollution as well as hazardous waste generation in the

Philippines.

The growth of industry, especially fossil fuel power production, chemical and metal

industries, engendered serious impacts upon the health of factory workers and nearby

residents through emissions of sulfur dioxides, nitrous oxides, volatile compounds, and other

toxic substances.



4-2

In terms of water pollution by industrial effluent, about 20-30% of BOD (Biological Oxygen

Demand) and SS (Soluble Solids) loads emanates from industry (mainly livestock and poultry

processing, sugar, coconut oil refining and pulp and paper) while the major source of toxic

pollutants are also industries including gold mining (mercury), tanning and leather

(chromium and sulfates), fertilizer production (phosphates, fluoride and sulfates), cement

(TOC and ammonia), and iron and basic industries (heavy metals, potassium). The effects

of pollution have not been properly assessed in the Philippines, but it may be more serious

than realized.

There is also concern that the lack of non-hazardous as well as hazardous waste management

in the country may discourage foreign investment and hampers the image and sales of export

products.

Although a number of IEM efforts have been carried out by industries with the assistance

from various stakeholders including government, donors, NGOs and so forth, they still have

not mainstream IEM in the government industrial policies as well as the industrial activities

themselves. There is still a considerable gap among industrial enterprises on the awareness

of IEM in the Philippines, especially between LEs and SMEs or export and non-export

industries.

Further delay of proper IEM may threaten sustainable development of socio-economy in the

Philippines in the following perspectives:

• Increased risks to human health, which will increase social cost of the country in

terms of medical and health care.

• Decreased global competitiveness of the Philippines Industries due to its less

concern for the environment.

• Decline in foreign capital investment in the Philippines due to its insufficient

environmental management capacity and performance.

• Missed opportunities of the industries in adopting innovative production

technologies to increase their productivity, income as well as environmental

performance.

With regard to this situation, IEMAP is formulated as a collaboration work between BOI and

JICA under “Environmental Management with Public-Private Ownership (EMPOWER)”

project.



4-3

The objective of IEMAP is:

To guide BOI in promoting global competitiveness and economic growth by raising

industrial efficiency and productivity through optimum environmental performance

through:

• Encouraging self-reliant IEM activities by industry sector,

• Promoting further development of IEM activities through provision of various

incentives/disincentives, and

• Clarifying the roles of each stakeholder in promoting IEM.

4.1.2 Scope of IEMAP

Based on the 3 (three) priority measures to promote IEM, determined in Section “3.4 Basic

Framework of IEM Promotion” of Chapter “3. Development Strategy for Industrial

Environment Management, namely “IEC Measures to Promote Voluntary IEM by the

Philippines Industry”, “Legal and Regulatory Support”, and “Economic Incentives”, the

EMPOWER project formulated the 3 (three) priority action plans as mentioned below:

• Action Plan on IEC Measures to Promote Voluntary IEM,

• Action Plan on Legal and Regulatory Support for IEM, and

• Action Plan on Economic Incentives to Promote IEM.

4.2 Action Plan on IEC Measures to Promote Voluntary IEM

4.2.1 Objectives

The objective of the action plan on IEC measures to promote voluntary IEM is:

Expanded dissemination of voluntary IEM by individual industries through implementation of the following action programs with public private partnership:

� Development and operation program of the integrated IEM information/knowledge network

� Expanded dissemination program of IEM implementation industries

� Training program of IEM promotion leaders

� IEM best practice guidance/manual publication program



4-4

The programs above are formulated to address the issues identified in “3.4.1 IEC Measures to

Promote Voluntary IEM by the Philippines Industry”.

4.2.2 Development and operation program of the integrated IEM information/ knowledge network

(1) Background and Objectives of the Program

In taking the first step of IEM action by industries, the role of information and knowledge is

of great significance. According to the questionnaire and interview survey done by the

EMPOWER project, the major obstacle of implementing IEM is the lack of information and

knoowledge on IEM.

However, the review of prior activities on IEM in the Philippines proved that guidebooks and

manuals on waste minimization (WM) and cleaner production (CP) has already been

published by several government authorities and various experience and information useful to

IEM by industries has been accumulated. Furthermore, technical services and financial

assistance in IEM do exist in the Philippines while such information is not well recognized by

industries according to the EMPOWER project.

Such information and information sources are fragmented among various public and private

institutions in the form of document, reports, electronic media and so forth. This dispersion

of IEM information makes it difficult for individual industries to obtain reliable information

in their limited time.

To address this situation, the integrated IEM information/knowledge network aims at

establishing the one-stop-shop to provide IEM information, knowledge and know-how

through continual validation and improvement of the latest information collected from the

sources so that it can be more useful to individual industries.

(2) Program Components

This program is based on the integrated IEM information/knowledge network (IEM-NET),

which has already been built upon the EMPOWER pilot project on a web-based IEM

information system. It will have the following 2 (two) major functions:

1) IEM Information/Knowledge Clearinghouse

The IEM information/Knowledge Clearinghouse (IEM Clearinghouse) is defined as the IEM

information platform, which improve and provide all the information obtained from domestic

and international sources in a user-friendly manner. The main contents of IEM

Clearinghouse will consist of:



4-5

• Downloadable files of IEM related publications, reports, and project documents and

hyperlinks to the related websites,

• Environmental related laws, regulations, and policies (downloadable files and

hyperlinks),

• Information about financial and economic incentives available in the Philippines in

relation to implementation of IEM (links to relevant GFIs, and other institutions)

• IEM technology database and search engine

• List of environmental service providers (ESPs)

• Notification of IEM seminars, workshops, and other relevant events.

The above information has already been partially uploaded in the web-based IEM

information system (http://www.iem.net.ph).

The above contents are continuously renewed and updated with the acquisition of new

information from its network. All the information is ready-made and provided for free in

principle to the registered users.

2) IEM Referral Services System

The IEM Referral Services System (IEM-REF) aims at providing so-called custom-made

information in response to the needs of individual industries. In the IEM-REF, the users

submit the prescribed “Information Request Form” on the website while the IEM-REF

operators will reply with the compiled information in response with it.

This system will also be designed to respond to the ESPs, requesting potential clients of their

technologies and services. In this regard, IEM-REF is expected to play the role of

mediating between industries and ESPs through matching of required technologies and

services with their holders.

Currently, a similar system called “waste exchange information page” is currently operated in

the IEM home page mentioned above. In this page, potential providers of recyclable

materials and users can register themselves for making trade agreements between them.

This kind of information exchange and business trade is expected to be expanded to the areas

of IEM technologies and services in IEM-REF.

To support the above two main functions of IEM-NET, the following activities will also be

carried out as the parts of this program:

• Awareness raising seminars/workshops and information exchange events between

different business establishments, and



4-6

• Further expansion of the service areas by IEM-NET to the total IEM

consulting/engineering services, and environmentally friendly business management,

legal and regulatory consulting in the area of environment, and so forth.

The next figure illustrates the schematic image of services provided by IEM-NET.

Y

Via Advocacy, Technical & Extension Service Programs

(direct assistance, technical/financial consultation, mentoring, technology packaging, private-public partnership, regulatory compliance advisory service etc.)

Via IEM Communication Outreach Programs

(seminars, dialogues, demo projects/case studies)

Via Referral Services

(link to environmental service providers, investors, co-financing opportunities, student internship, partnerships)

Via Information Clearinghouse

(reference collections, publications, reports, archives, information dissemination activities)

Note1: * Primary goals of the IEM Network _ _Secondary goals Note2: Quarterly review and enhancement of the IEM Information System through an Editorial Board

Figure 4.2.1 Schematic Image of IEM-NET

TARGETS:

IEM Information Users

IEM Information Providers

• Information*

• Matching Services*

• Advocacy/Promotions

• Empowering Services (referrals only)



4-7

(3) Implementation Plan of the Program

The 3 (three)-year implementation plan of the program is mentioned below.

1) Establishment of the program implementation mechanism (2.5 months)

The program implementation mechanism will be based on the partnership which was built

among the stakeholders upon the pilot project on the integrated IEM information/knowledge

network in EMPOWER project. The following steps will be taken for establishment of the

program implementation mechanism.

1)-1 Selection of program implementation partners and allocation of tasks

The program implementation partners will be selected from the representatives of IEM

information providers and users. The potential partners and their roles are expected as

shown in the table below:

Table 4.2.1 Potential Program Implementation Partners and Their Roles

Partner Roles

PBE ・Operating body of the IEM-NET in the pilot project in the integrated

IEM information/knowledge network

・Operating body of the website in this program

BOI/DTI ・Function as secretariat / coordinator of this program

・Information provider of IEM information (fiscal instruments, and others)

・Information provider for permits and licensing on factory establishment

EMB/DENR ・Information provider of environmental laws and regulations

・ Information provider of permits and licensing for compliance on

environmental laws / regulations

ITDI/DOST ・Information provider of technology / measures on IEM

・Technical assistance for assessing IEM implementation by individual

industry

PEZA, LLDA ・Provision of unique information on IEM implementation within their

jurisdiction

GFIs (DBP, LBP) ・Provision of information on mechanism that offer financial support

Industrial

Associations

・ Provision of information on IEM implementation by industrial

association or individual enterprises

・Advising for program operation in viewpoint of users

ESPs ・Provision of information on available technologies and/or services in

IEM adoption for enterprises

・Advising for program operation in viewpoint of service providers

Donor

organizations

・Dispatch experts who hold technical knowledge and experience

・Technical / financial assistance for program operation

To discuss the program implementation mechanism and roles of each program partner, a

preparatory committee needs to be organized by the potential program partners given above.

Establishment of a working group will also be required to prepare the document and materials



4-8

for the committee. Taking into account these needs, at least two representatives need to

participate in the preparatory committee from each potential partner.

The main issues of discussion in the preparatory committee will be as follows:

• Commitment of each program partner to the program (allocation of roles and program implementation cost)

• Formulation of the 1st year program implementation plan

• Determination of the IEM-NET operating body

• Preparation of the memorandum of agreement (MOA) on the establishment of the program

Based on the examination and agreements in the preparatory committee, each potential

partner will go through internal procedure for obtaining official approval of participation in

the program. The necessary document and materials for such approval will be prepared by

the working group mentioned above.

1)-2 Preparation and conclusion of MOA on the program establishment

The 2nd preparatory committee will be held to finalize the roles of program implementation

partners through preparation of MOA on the program establishment. It will also be

officially announced through mass media.

1)-3 Establishment of program implementation mechanism

Based on conclusion of MOA, the preparatory committee will be officially reorganized as the

program supervision committee while the working group will also be officially authorized

under the committee. The working group will prepare the 1st year program plan (including

work and financial plans) and hold technical workshops on system design of IEM-NET.

2) Design and Installation of IEM-NET (5 months)

Based on the result of technical workshops on IEM-NET, its system design will be made by

the following steps:

2)-1 Examination on the design and contents of IEM-NET

With the support from experts, the working group will examine the design and contents of

IEM-NET. Although IEM-NET will be based on the website built in the pilot project of the

project, its design will be reviewed through hearing from potential information providers and

users of IEM-NET. The contents of IEM-NET will also be reviewed in detail. The



4-9

detailed specification of hardware and software will be determined in response to the types of

information uploaded and services provided in IEA-NET.

2)-2 Selection and Procurement of Hardware and Software

Based on the design and contents of IEM-NET, appropriate hardware and software will be

selected.

2)-3 Installation and Operation of IEM-NET

IEM-NET homepage will be uploaded in the host computer for its operation. IEM NET

operation manual will also be prepared for training of operators.

3) Marketing and Promotion of IEM-NET (Regular Task)

IEM-NET will require adequate income to operate, maintain and upgrade the contents and so

forth. The fund raising measures may include the followings:

• Collection of membership fees from IEM-NET users, e.g. exclusive provision of specific information and services to the members paying membership fees.

• Collection of service fees for the custom made services such as IEM-REF.

• Expansion of services to the total IEM consultancy to individual industries, training, seminars, workshops, and so forth.

4) Evaluation of the program implementation in the program supervision

committees

Quarterly or every 6 months, the program supervision committee will be held for the purpose

of examining the progress of program implementation and financial conditions. The

working group, working together with IEM-NET operators, will prepare the material for the

committee. Annual report will be submitted in the year end committee for discussion of the

next year program.

(4) Roles of Program Partners

Roles of program partners, which have already been mentioned in Table 4.2.1 above, are

shown in the table below.

Table 4.2.2 Roles of Program Partners

Partners Roles

BOI/DTI ・Program managing body

・Function as a chairperson and secretariat of ”program supervision

committee” & “working group”

・Program assistance on policies in industrial / industrial development



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Partners Roles

investments

PBE ・Managing body of “IEM information website”

・Managing body of program implementation through the website

・Supporting roles for the chairperson and secretariat of “program

supervision committee” and “working group”

EMB/DENR ・Information provider of environmental laws and regulations

・environmental legislation and policy for the program

・Consulting task for the web-site users on environmental legislations

ITDI/DOST ・Provision of technical information on IEM in general

・Contents management for IEM technologies on the website

・Consulting task for the website users for IEM adoption

・Provision of technical assistance to participating firms; Shares

technical information through its IPCT; Technology assessment,

packaging and dissemination

GFIs (DBP、LBP) ・Provision of information on financial resources for IEM adoption

・Consulting work for the web-site users for funding

PEZA、LLDA ・Provision of information on IEM implementation within its jurisdiction

Industry

Associations

・Provision of information on IEM implementation in the industry

・Supervision / advising works of the website in viewpoint of the

web-site users

ESPs ・Provision of information on IEM technologies and services

・ Public relation activities / advertising of an enterprise’s own

technologies or services

All of the above program partners are expected to be the members of the program supervision

committee as well as its working group.

(5) Program Implementation Schedule (1st Year)

Table 4.2.3 Program Implementation Schedule

1st year

Outputs / Actions 1st

month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

Program Implementation Schedule

1)

Establishment of the

program implementation

mechanism

a) Selection of program

implementation

partners and allocation

of tasks

b) Preparation and

conclusion of MOA on

the program

establishment

c) Establishment of

program

implementation

mechanism

2) Design and Installation of

IEM-NET

a) Examination on the

design and contents of

IEM-NET

b) Selection and

Procurement of Hardware

and Software

2.5 month

1 month

1 month

1 month

5 month

1 month

2 month



4-11

1st year


month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

c) Installation and

Operation of IEM-NET

3) Marketing and Promotion

of IEM-NET

4)

Evaluation of the

program implementation

in the program

supervision committees

(6) Fund Raising Measures and Expected Effects of the Program

1) Fund raising measures

The program plans to start with provision of ready-made and custom-made information on

IEM as its main services. Based on the reactions and needs of IEM-NET users, its service

may be expanded to the total IEM consulting service to individual industries and formulation

of IEM related projects in cooperation donor agencies.

As far as limiting the current services to the above information provision, the required

incremental cost will range from 10 to 20 thousand dollars annually including the manpower

and computer maintenance and operation. The fund to cover this incremental cost will be

shared by each program partner while fee collection from users will also need to be

considered if the area of services is expanded. In addition, collection of advertisement fee

may be possible if the number of access to IEM-NET increases enough as the potential

market of advertisement.

2) Expected effects of the program

Since the progress and achievement of other priority actions recommended in this project will

also be uploaded in IEM-NET, this program is expected play a role of information and PR

center of this IEM Action Plan.

The information about the needs of IEM-NET users is also expected to support formulation

of more appropriate IEM promotion policies to adapt to local conditions of the Philippines

industry.

This program needs to be operated in consideration of the above potential benefits to be

obtained in the future.

1 month

Regular Task

0.5 mont



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4.2.3 Expanded dissemination program of IEM implementation industries

(1) Background and Objectives

The EMPOWER project conducted waste minimization pilot projects through selection of 1

(one) factory from each of 4 industrial sub-sectors, namely foor processing, chemical, paper

and pulp and metal casting. Each of the selected 4 (four) factories, through the actual

experience of waste minimization, recognizes its importance in terms of IEM as well as

productivity improvement.

The purpose of this program is to disseminate IEM activities through real recognition of its

importance by industries in terms of its environmental benefit as well as economic benefit

obtained from productivity improvement and lowering of production cost per product. The

program targets at implementation of model IEM activities by 40 factories in 3 (three) years,

covering 10 (ten) sub-sectors including 4 (four) above.

(2) Program Components

As clearly shown in chapter 3, there is a big gap in the level of IEM implementation among

the industries in the Philippines. In the hierarchy of IEM as shown in the figure below,

many of SMEs in the Philippines, who only deal with domestic market, is categorized into

the lowest level of IEM implementation. In fact, even the so-called good housekeeping is

not well implemented by most of SMEs in the Philippines.

Figure 4.2.2 Hierarchy of IEM Implementation

Good HousekeepingGood Housekeeping((Regular recordRegular record--keeping of raw materials, energy and utility consumption, produckeeping of raw materials, energy and utility consumption, production output tion output

For proper assessment of productivity)For proper assessment of productivity)

Waste Minimization Waste Minimization

thru. Material Flow Managementthru. Material Flow Management

Production Process ChangeProduction Process Change(including also on(including also on--site reuse of materials, change in input materials, etc)site reuse of materials, change in input materials, etc)

EMS/EMP/ECAEMS/EMP/ECA((EnvEnv. Mgt System/Plan/. Mgt System/Plan/EnvEnv. Cost Accounting). Cost Accounting)

Product life cycle managementProduct life cycle management(Design for Environment, LCA)(Design for Environment, LCA)

Good HousekeepingGood Housekeeping((Regular recordRegular record--keeping of raw materials, energy and utility consumption, produckeeping of raw materials, energy and utility consumption, production output tion output

For proper assessment of productivity)For proper assessment of productivity)

Waste Minimization Waste Minimization

thru. Material Flow Managementthru. Material Flow Management

Production Process ChangeProduction Process Change(including also on(including also on--site reuse of materials, change in input materials, etc)site reuse of materials, change in input materials, etc)

EMS/EMP/ECAEMS/EMP/ECA((EnvEnv. Mgt System/Plan/. Mgt System/Plan/EnvEnv. Cost Accounting). Cost Accounting)

Product life cycle managementProduct life cycle management(Design for Environment, LCA)(Design for Environment, LCA)



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On the other hand, the foreign affiliated and export-oriented industries who are facing serious

competition in the international market, shows higher level of IEM performance to meet the

market requirement of proper consideration on IEM.

Considering the above situation, the program first focuses on promotion of good

housekeeping and waste minimization through material flow management especially in SMEs

in the Philippines through implementation of model IEM activities. Proper recognition on

the advantages of IEM among the owners of SMEs is of primary importance in this program.

Subsequently, the program will promote further upgrade of the IEM activities among the

SMEs who have already experienced its advantages through model activities. It also

requires such SMEs to disseminate their experience an know-how to other SMEs.

(3) Program Implementation Plan

1) Implementation of the demonstration projects on good housekeeping and waste

minimization

Demonstration projects on good housekeeping and waste minimization will be implemented

for the total of 36 factories selected from 10 sub-sectors of manufacturing industry within 3

(three) years. Distribution of sub-sectors selected are as shown in the table below.

Table 4.2.4 Distribution of Sub-Sectors Selected for Demonstration Projects

Industry types Factories for Demonstration Project (target)

4 industries selected for “Waste

Minimization” pilot project in

EMPOWER Project

(Pulp/paper, chemical, food

processing, metal)

Implement the demonstration project for 3 factories

from each sub-sector within 3 years. (1 factory in each

year for each sub-sector.

New industries (select 6

sub-sectors from the priority

industry)

Implement the demonstration project for 4 factories

from each sub-sector in next 3 years

The demonstration project will be implemented by the following steps:

1)-1 Selection of the sub-sectors of demonstration project (1.5 months)

Out of 19 sub-sectors identified as priority industries in this action plan, 6 sub-sectors will be

selected excluding 4 sub-sectors that have already implemented pilot projects on waste

minimization in the current Study. Selection of the 6 sub-sectors will made by the process

given in the table below.



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Table 4.2.5 Selection Process of Sub-Sectors of Demonstration Projects

1st step: Hold the “1st committee for selecting sub-sectors of demonstration projects”

(Members: BOI/DTI, EMB/DENR, ITDI/DOST, Industry Associations, PBE)

・Select 6 sub-sectors targeted for the demonstration project in this committee

2nd step: Select enterprises in the 6 sub-sectors determined for implementing the

demonstration projects (selection requires an agreement with the enterprises).

3rd step: Examine the function and roles for implementing the demonstration among the

committee members

4th step: Hold the “2nd

committee for selecting sub-sectors of demonstration projects”

・Examine and agree the functions and roles among the relevant bodies including

the selected 6 enterprises.

1)-2 Preparation of training program for demonstration project (1 month)

For the preparation of demonstration program, the training program will be prepared in

accordance with the process given in the table below.

Table 4.2.6 Process of Training Program Preparation

STEP 1: Establishment of the technical working group (TWG) to prepare the training

program details and materials (design of training modules, toolkit, etc.)

STEP 2: Selection of resource persons for training the trainers. (domestic or foreign)

STEP 3: Logistical preparation for program implementation

1)-3 Implementation of trainers’ training (1 month)

As there are very limited number of experts who can provide training of good housekeeping

and waste minimization in the Philippines, training of such trainers will be first required.

This program plans to conduct such trainers’ training in the form of overseas group training

and/or domestic group training by international experts dispatched to the Philippines.

1)-4 Training workshop among the demonstration project implementation factories

The trainers trained above will hold training workshops to transfer their knowledge of good

housekeeping and waste minimization to the factories selected for implementation of

demonstration projects.

1)-5 Implementation of demonstration projects (7.5 months)

Each selected factory will conduct demonstration project in accordance with the process

given in the table below.

Table 4.2.7 Process of Demonstration Project Implementation

STEP 1: Pre-assessment of Factory Operation

• Each industry will prepare and organize assessment team and resources.

• Divide production process into unit operations

• Prepare process flow diagrams linking unit operations, establish a “working



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group on training program,” and program materials – i.e. textbook

STEP 2: Analysis of Material Balance

• Measurement and record of process input and output data.

• Analysis of material balance

STEP 3: Identification of Waste Minimization options

Identify and evaluate the waste minimization options from viewpoint of

economic feasibility, technological availability, environmental performance

improvement effects.

• Energy savings (efficient use of energy)

• water use reduction

• efficiency improvement of raw materials use

• internal reuse and recycling of wasted materials

STEP 4: Formulation of IEM Action Plan on a factory basis

Formulate the “Waste Minimization Action Plan” containing following elements:

• Set up quantified targets

• Action and technologies applied with their estimated effects

• Estimated cost of implementing the action plan

• Time schedule of the action plan

STEP 5: Start-up workshops for implementing the “IEM Action Plan”

Hold workshops for each individual industry that formulated the waste minimization

action plan, and revise the Action Plan through sub-sector group discussions and advices

from experts.

STEP 6: Implementation of IEM Action Plan

• Implementation of IEM Action Plan.

• Recording the key indicators.

• Compilation of the results into reports for the workshop.

STEP 7: Evaluation workshops on IEM Action Plan

Through presentation of the results of demonstration projects, each industry transfers

their experiences to other enterprises, receives advices from experts for improvements.

Demonstration project will complete the above process in 7.5 months.

2) Upgrade and Expansion Program of IEM Activities

The industries that have already reached IEM level of good housekeeping and waste

minimization through their own efforts, supports of the demonstration projects, etc. will be

required to further upgrade their level of IEM as well as transfer their technology, knowledge,

and know how to other factories so that the level of IEM can be raised industry wide.

This program is defined as the continuous efforts of IEM by the demonstration factories.

2)-1 Introduction of higher IEM activities by the demonstration factories

Implementation of higher level of IEM activities will be promoted to the demonstration

factories including the factories conducting pilot waste minimization activities in the current

study. The examples of higher level of IEM activities includes:

• Introduction of more dynamic CP technologies such as production process change,



4-16

• Implementation of advanced voluntary IEM activities, e.g. environmental cost accounting (ECA), environmental management System (EMS), voluntary environmental action plan, environmental reporting, and so forth, and

• Implementation of IEM before production (product design, material procurement) as well as after production (use, consumption and disposal of products), such as life cycle assessment (LCA), design for environment (DfE), and so forth.

2)-2 Transfer of IEM technology, knowledge, and know-how to other factories by

demonstration factories

The factories implementing demonstration project will be required to transfer their

technologies, experience, knowledge, and know-how to other factories. Since the

demonstration factories are the important information sources of IEM to other factories,

proper transfer and dissemination of their experience will be their obligation for the overall

development of IEM in their sub-sectors.


Roles of the program partners will be as shown in the table below.


Partners Roles

BOI/DTI ・Program managing body

・Chairperson and secretariat of “committee for selecting sub-sectors

of demonstration projects”

・Program support on industrial policy and development investment

・Organizer of the demonstration project

・Support for industry’s organizational effort

ITDI/DOST ・Technical advice on implementing the demonstration project

・Lecturers for the “trainer training”

・Introduction of higher IEM activities

EMB/DENR ・Lead agency in adjustment and formulation of legal/regulatory

measures for promoting environmental compliance by industries

GFIs (DBP, LBP) ・Provision of preferred credit to participating firms of demonstration

projects including adoption of higher IEM technologies

Industry

Associations

・Organize and lead the demonstration project and introduction of

higher IEM technologies within the industry

Demonstration

participating

industry

・Dissemination and introducing IEM within industry

・Trainers for other industry to new demonstration project after their

demonstration project is completed

ESPs ・Technical advice for participating industry for the demonstration

(TDI/DOST jointly)

・Lecturers of the “trainer training”

・Consulting services for industry intended to implement higher IEM

technologies / activities



4-17

(5) Program Implementation Schedule


1st year


month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month


1)

Implementation of the

“Good Housekeeping /

Waste minimization /

material flow

management”

demonstration project

a) Selection of industry

sub-sectors

b) Preparation of training

programs and materials

c) Training of the trainers

d) Technical workshop on

assessment of factory

operation

e) Assessment of factory

operations

2)

Upgrade and Expansion

Program of IEM

Activities

a) Introduction of higher

IEM activities by the


b) Transfer of IEM

technology, knowledge,

and know-how to other

factories by




The action plan estimates the cost of this program as shown in the table below.

Table 4.2.10 Estimated Implementation Cost of the Program

Unit: US$

Activity / Item Quantity Unit price Estimated

Cost

IEM Demonstration Project (target 40 enterprises/factories in 10

industries)

260,000

(1) Cost for training of trainers 10 Trainers (1 per

industry type)

4,000 40,000

(2) Implementation of the demonstration projects (40 enterprises / factories) 220,000

a. Training for factory assessment 40 (1 per enterprise) 500 20,000

b. Demonstration 40 enterprises 5,000 200,000

1.5 month

1 month

1 month

0.5 month

7.5 month



4-18

The total cost of the program is estimated 260 thousand US dollars for the 3 years of action

plan period. It only includes the cost of first phase demonstration project and does not

include the cost of introducing higher IEM activities as well as transfer of their experience to

others since the action plan considers that such activities have to be made as a voluntary

activity of demonstration factories.

The implementation cost of demonstration project is estimated 6.5 thousand US dollars per

factory including the cost of trainers’ training. Since most of selected demonstration

factories are financially weak SMEs, financial assistance from GOP as well as donors is

required to cover the above cost.

Another option of raising the fund for demonstration project is the provision of fund from the

members of industry groups that the demonstration factories belong to while the

demonstration factories are required to transfer their technologies, experience, and know-how

as much as they can to other factories within the industry groups.

2) Expected Effects of the Program

This program is expected to disseminate good housekeeping and waste minimization practice

among 40 factories over 10 sub-sectors through implementation of demonstration projects.

Moreover, the overall level of IEM activities in the Philippines industry will also be raised

through transfer of technologies, experience, and know-how of demonstration factories to

others.

It is also expected that the demonstration factories will make further efforts of upgrading their

level of IEM activities. However, further enhancement of IEM may require larger capital

investment, therefore financial and economic supports may be required.

4.2.4 Training program of IEM promotion leaders


The factory survey done by EMPOWER project clearly indicated that environmental

awareness at the managing executive level influences performance level of IEM in the

factories. Many IEM demonstration projects had been carried out with the assistance of

donors and other organizations for the purpose of promoting cleaner production, EMS, and so

forth, but such experience was usually limited to the demonstration factories themselves and

not disseminated to others. Many seminars and workshops has been held on IEM related

issues, but their participants are limited to specific factories of having a higher interest in

IEM, therefore the gap between industries in information as well as activities on IEM is very

big among the Philippines industries.



4-19

On the other hand, the awareness and efforts of IEM are also different among the relevant

government authorities, so that coordinated policy support based on common recognition of

IEM issues is still difficult for the government as well.

To properly address these issues, IEM promoters need to be raised in public as well as private

sectors so that strong leadership of IEM can be taken with public and private partnership.

This program aims at raising such IEM promotion leaders in the Philippines in collaboration

with the Expanded dissemination program of IEM implementation industries given above.

This program first targets raising IEM promotion leaders in 10 industry sub-sectors.

(2) Program Components and Implementation Plan

This program consists of “IEM Promotion Leader Training” and “IEM Dissemination by

IEM Promotion Leaders”. The implementation of each sub-program is presented below.

1) IEM Promotion Leader Training

IEM promotion leader training will be carried out in accordance with the following process.

1)-1 Formation of Program Steering Committee and Technical Working Group

The program steering committee will be organized from the representatives of public and

private stakeholders in relation to IEM. A working group will also be established as the

secretariat of the committee. The EMPOWER project suggests that the program steering

committee and its working group should be organized by the same member institutions

participated in the program supervision committee on “Expanded dissemination program of

IEM implementation industries”.

1)-2 Selection of IEM promotion leaders

The program steering committee will select IEM promotion leaders in accordance with the

steps shown in the table below. Candidate IEM promotion leaders may be selected first

from industries. Member industry groups and factories participating in the programs of

“Action Plan on IEC Measures to Promote Voluntary IEM” will be the primary targets of

IEM promotion leaders in the first place.

Table 4.2.11 Process of Selecting IEM Promotion Leaders

STEP 1: Recruiting IEM Promotion Leaders

Prepare materials to recruit IEM promotion leaders and recruit them though

various medias. The material should state requirements as well as advantages

to become an opinion leaders which include trainings and business opportunities.

STEP 2: Selection of the Leaders and Official appointment

The “Program steering committee” will select the IEM Promotion leaders based

upon clear selection criteria.



4-20

Take appropriate measures in case industry participation for recruiting the IEM

promotion leaders turns low, ask cooperation from model industries and

corporations participating other IEMAP programs so that suitable leader will be

selected. Upon selection, the “program steering committee” will officially appoint

the of the IEM promotion leaders.

1)-3 Training of IEM promotion leaders

Training of IEM promotion leaders will be carried out for the transfer of IEM concept, tools,

techniques, best practices, and so forth. Overseas training on advanced IEM technologies

such as cleaner production, greening the supply chain, environmental cost accounting and life

cycle product management will also be carried out if assistance can be obtained from donors.

As the output of the above training, each of IEM promotion leaders is required to prepare his

IEM Dissemination Action Plan, describing concrete actions to be taken for IEM promotion

to his target industries.

1)-4 IEM promotion by leaders

Based on the IEM dissemination action plan prepared above, the IEM promotion leaders will

conduct promotion activities to their target industrial sub-sectors through seminars,

workshops, and so forth.

After approximately 6 months of IEM promotion, the leaders will meet together in a review

and evaluation workshop for the purpose of information exchange and evaluation of each

leader’s activities for further improvement of promotion measures.

Based on the achievement of the above promotion activities, IEM promotion leaders will be

further raised in other industrial sub-sectors.


The table below identifies the roles of program partners.


Partners Roles

BOI/DTI ･Program implementing body

・Function as chairperson and secretariat of the “program steering

committee”

・Management of leader training program

ITDI/DOST ・Lecturer of the leader trainings (IEM technical aspects)

EMB/DENR ・Lecturer of the leader trainings (legal aspects)

GFIs (DBP, LBP) ・Lecturer of the leader trainings (IEM financial aspects)

Industry Associations ・Dispatch of the leaders

・Support the leaders after the trainings finished for promotion of



4-21

Partners Roles

IEM in industry base.

Industry implementing

demonstration

・Candidates for the leaders

ESPs ・Lecturer of the leader trainings (IEM technical aspects）

Donor Organizations ・Accept the leaders as trainees or dispatch experts to the trainings


Table 4.2.13 Program Implementation Shedule

第1年次


month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month


1) Selection of IEM

opinion leaders

a) Recruit of IEM

opinion leaders

b) Selection of the

leader and official

appointment

2) Training of the

Leaders

3) IEM promotion by

the Leaders

4)

Review and evaluate

in workshops for

promotion activities



The cost of the program is estimated as shown in the table below.

Table 4.2.14 Estimated Cost of the Program

Unit: US$

Activity / Item Numbers Unit price Estimated

Cost

IEM Promotion Leader training program 58,000

(1) Training of the leaders 3 times 6,000 18,000

(2) IEM promotion such as seminars by

the leaders in their respective industry

10 times 3,000

(3 days)

30,000

(3) Evaluation seminars and other

meetings

10times 1,000 10,000

The total cost of the program including leader training in 10 sub-sectors and dissemination

activities by the trained leaders is estimated 58 thousand US dollars in the first year. The

cost per leader is 5.8 thousand US dollars in the first year.

2.5 month

1 month

1 month

1 month

8.5 month

0.5 month 0.5 month



4-22

The above cost does not include oversea training or dispatch of overseas experts to train the

leaders. If the program can apply for the cleaner production training program currently

available in JICA, the cost of overseas leader training will be lowered.

The cost of dissemination activities carried out by IEM promotion leaders should be covered

by the members of their industry groups in principle. It is important for individual

industries or industry groups to pay the fees for seminars and workshops since free

participation sometimes lowers their intent of obtaining something from seminars and

workshops.


This program is defined as the supplementary program of “Expanded dissemination program

of IEM implementation industries”. There are considerable number of industries of

advanced IEM performance in the Philippines except those who has conducted IEM

demonstration activities with the support of this project or other donors’ assistance.

Utilization of such industries, especially foreign affiliated ones, as the IEM promotion leaders

will further promote dissemination of IEM in the Philippines.

4.2.5 IEM best practice guidance/manual publication program


As clearly indicated in the current study, various IEM technologies, knowledge, and

know-how are compiled in the form of guidebooks, reports, and so forth in the Philippines.

However, many of them are kept separately by the public and private institutions that carried

out the activities, so that they could not be efficiently utilized by individual industries.

This program aims at compiling such fragmented IEM information, knowledge, experience,

and know-how into guidance/manuals of IEM best practice for efficient use by the

Philippines industries. It targets at preparation of such guidance/manuals for 10 industrial

sub-sectors within the 3 years.


IEM best practice guidance/manual will be prepared in accordance with the steps shown in

the table below.

Table 4.2.15 Process of Preparing IEM Best Practice Guidance/Manual

STEP 1: Formation of Technical Working Group

Establish a “working group” for publication of manuals by relevant bodies

including BOI. The members should be from institutions such as DENR, DOST,

and DBP that have experienced publication of related reports, as well as private



4-23

industries who have experiences in model project or hold many expertise like

PBE.

STEP 2: Selection of Industry Sub-Sectors

In coordination with other programs of this priority action, the working group

will select appropriate sub-sectors to be engaged in this program

STEP 3: Compilation and Technology Assessment of Best IEM Practices from

Secondary Sources, including Internet Search

Best IEM Practices in various industry sectors will be searched from the

Internet and other databases. The new acquisitions will be stored in the

databank of the IEM Information Network.

The searched and data-banked information will be subject to technology

assessment by DOST/ITDI and qualified ESPs for applicability or adaptability to

the Philippine industries. Environmental cost accounting will be prepared for the

promising best practices.

STEP 4: Case Study of Local IEM experience especially EMPOWER pilot and

demonstration projects

The best practices for local IEM experience will be studied and documented.

The local industries will include primarily the model firms of EMPOWER.

STEP 5: Experts' Workshop / Write shop

Series of workshops/write shops will draft and eventually finalize the Codes of

Best IEM Practices by Industry sector based on the primary and secondary

sources of information. The Codes will be presented to the target users in

industry for final evaluation and acceptance.

STEP 6: Publication and Dissemination of Codes of Best IEM Practices by Sector

Publish and distribute the Codes to target users preferably to industry

associations that prepared action plan. The manual will be used in workshops

to disseminate the IEM in the Philippines.


Roles of program partners are shown in the table below.


Partners Roles

BOI/DTI ・Lead implementing body

・Secretariat of the Technical Working Group

ITDI/DOST ・Provision of information / advice / editorial for development of the

manual

EMB/DENR ・Provision of information / advice / editorial for development of the

manual

GFIs (DBP、LBP) ・Provision of information / advice / editorial for development of the

manual

Industry

Associations

・Responsible for editing of manuals by industry

Individual Industries ・Develop the manuals for their industry

ESPs ・Provision of information / advice / editorial for development of the

manual

Donor Organizations

・Provision of information / advice / editorial for development of the

manual



4-24

The table above emphasizes that the main actor of IEM best practice guidance/manual

preparation is industries while the government authorities plays advisory roles through

provision of information accumulated so far.



1st Year


month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month


1)

Formation of

Technical Working

Group

2) Selection of Industry

Sub-Sectors

3)

Compilation and

Technology

Assessment of Best

IEM Practices from

Secondary Sources

4)

1st Experts'

Workshop / Write

shop

5)

2nd Experts'

Workshop / Write

shop

6)

Publication and

Dissemination of

Codes of Best IEM

Practices by Sector


1) Fund Raising Measures

The total cost of the program is estimated as given in the table below.


Unit: US$

Activity / Item Quantity Unit price Cost

IEM best practice guidance/manual publication program 50,000

(1) Cost of Manpower 2MM / sector 1,500 30,000

(2) Workshops 10 times 1,000 10,000

(3) Publishing the Manuals 1,000 copies 10 10,000

The cost of IEM best practice guidance/manual should be covered by their users, i.e. the

Philippines industry. The cost of guidance/manual is estimated approximately 5 thousand

US dollars per sub-sector. It can be covered by the allocation of the fund from members of

relevant industry groups or associations.

1 month

1 month

6 month

2 month

1 month

1 month



4-25


The sub-sector wise IEM best practice guidance/manual is designed as the basic handbook of

IEM used by individual industries. It is expected that dissemination of this guidance/manual

will raise awareness of IEM and its advantage in industry production, so that IEM activities

will be further promoted.

In addition, the guidance/manual will be uploaded in IEM-NET and periodically renewed and

updated on the website. It will enable more dynamic use of this guidance/manual by the

industries.

4.3 Action Plan on Legal and Regulatory Support for IEM

4.3.1 Objectives

The objective of the action plan on Action Plan on Legal and Regulatory Support for IEM is :

To develop basic institutional framework of promoting IEM through

improvement and new establishment of legal, regulatory, and policy

measures by the following programs:

� Philippine Environmental Partnership Program (PEPP) Promotion Program

� Dissemination Program of BOI’s Green Procurement Policy � National Recycling Policy Formulation Program � Review Program of Existing Legal and Regulatory Framework of

IEM

4.3.2 Philippine Environmental Partnership Program (PEPP) Promotion Program


Republic Act No. 8749 (Clean Air Act) of 1999 declares a policy of encouraging cooperation

and self-regulation by industry through the application of market-based instruments. The law

focuses primarily on pollution prevention rather than on control. Together with other laws

such as Ecological Solid Waste Management Act (RA 9003), Pollution Control Law (PD 984

Sec 6), and Environmental Code (PD 1152), the Department of Environment and Natural

Resources (DENR) issued on June 2, 2003 an Administrative Order (DAO 2003-14) creating

the Philippine Environmental Partnership Program (PEPP) to support industry self-regulation

towards improved environmental performance. The objectives of the policy are to:

• Promote mandatory self-monitoring and compliance with environmental standards and to encourage voluntary self-regulation among establishments for improved environmental performance



4-26

• Provide incentives and package of assistance to establishments particularly the SMEs to achieve pollution prevention/cleaner production process

• Build or enhance the capability of establishments and/or their associations on self-regulation; and, to strengthen the capability of DENR-EMB and other Environmental Authorities in implementing the PEPP towards self-regulation.

Companies participating in PEPP are given the opportunity to achieve improved

environmental management systematically and effectively. The government will offer a

package of incentives such as regulatory, economic and technical assistance, and recognition

awards in exchange for industry’s initiative to self-regulate. Participating industries will be

accountable by:

• Implementing the Philippine Environmental Management System (PEMAS), which is revised and simplified EMS to adapt to local conditions of industries, and pollution prevention programs with corresponding verification mechanisms

• Issuing public reports on their environmental performance

• Subscribing to the sustainability of Philippine Business Agenda

EMB/DENR and BOI/DTI jointly developed PEPP, and convinced DOST, Development

Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), and Union of Local

Authorities of the Philippines (ULAP) to join the program. PEPP includes new approaches

such as the application of voluntary agreement on environment management to SMEs in

place of strict application of regulations. The GOP is currently trying to implement more

flexible law enforcement measures.

Considering the above trend of legal and regulatory system in the Philippines, the Action

Plan aims at promoting implementation of PEPP.


PEPP promotion program will be implemented in accordance with steps shown below.

1) Development of institutional framework for PEPP support (6 months)

Institutional framework for PEPP support will be established through the process as shown in

the table below.

Table 4.3.1 Process of Developing Institutional Framework for PEPP Support

STEP 1: Organization of a working committee to develop the institutional framework

of partnership

STEP 2: Discussion and agreement for realizing PEPP

Discuss and agree on institutional responsibilities, synchronized assistance,

schedules and criteria for target industries, and procedures for availability of

incentives, evaluation and monitoring, and training requirement in the working



4-27

groups. The institutional framework should also guide or complement IEM

demonstration project.

STEP 3: Drafting of guidelines, manual and documents for PEPP participation and

partnership

2) Roundtable discussions with industries

• The implementation measures of PEPP will be discussed with industry groups as well as individual industries who have interest in participation of PEPP.

3) Preparation of PEPP information and PR materials

To disseminate the concept of PEPP to general public as well as industries, the following

materials will be prepared:

• PEPP procedural manual, brochures, posters, etc.

• Advertisement of PEPP through mass media.

4) Participation in PEPP by IEM demonstration factories

To examine effectiveness of PEPP in supporting SMEs in IEM, applicability of PPEP support

programs to the IEM demonstration projects will be assessed. The main issues to be

assessed include:

� Applicability of financial assistance by DBP and LBP to demonstration projects under PEPP.

� Preparation of PEMAS and environmental performance report by IEM demonstration factories and their evaluation under PEPP.

� Monitoring of the result of demonstration projects in terms of compliance with the laws and regulations to identify its effectiveness in comparison with the existing law enforcement mechanism.


Roles of program partners are shown in the table below.


Partners Roles

BOI/DTI ・Lead agency for program implementation

・Chairperson and secretariat for the inter-agency liaison committee

and working group.

EMB/DENR ・PEPP implementing body

・Formulate and develop guidelines and PEPP implementing policy

ITDI/DOST ・Technical support for PEPP implementation in IEM

・Advising in guideline development from technical aspect

GFIs (DBP, LBP) ・Financial assistance for industries within framework of PEPP



4-28

Partners Roles

Industry

Associations

・ Support and recommendation to industries on PEPP and

deregulation

・Supporting model adoption of PEPP (selection of enterprises)

Demonstration

industry

・ Implement the project based on PEPP (prepare PEMAS,

environmental performance review)




month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

(1) Development of

institutional framework

for PEPP support

(2) Roundtable discussions

with industries

(3) Preparation of PEPP

information and PR

materials

(4) Participation in PEPP by

IEM demonstration

factories



The cost of the program is estimates as shown in the table below.


Unit: US$

Activity / Item Estimated Cost

1. Philippine Environmental Partnership Program (PEPP)

Promotion Program

6,700

(1) Hold roundtable discussion 2,700

(2) Develop information materials and PR activities 4,000

Since this program is designed to promote implementation of PEPP, GOP should cover its

cost in principle. The cost of the program will also be within the budget capacity of relevant

government authorities in relation to PEPP.

Participation in PEPP by IEM demonstration factories, on the other hand, will require their

voluntary partnership.


PEPP will serve as a test of policy conversion from command-and-control to voluntary

control with public private partnership. PEPP also has similar objectives of this action plan,



4-29

i.e. integration of various policy measures including laws and regulations, financial/economic

incentives, and IEC tools. In this regard, integration of the action plan with PEPP is

expected to further promote implementation of IEM by the Philippines industry.

4.3.3 Dissemination Program of BOI’s Green Procurement Policy


BOI, as the output of the pilot project carried out in the EMPOWER project, adopted the

Green Procurement Policy in March 2003. Its objectives include:

• Increased use of environmentally preferable products and services in BOI’s procurement to the extent feasible, consistent with price, performance, availability, and safety considerations,

• Consideration of environmental factors through actual procurement process,

• Examination of the incentives to promote green procurement as well as development and use of environmentally friendly products and services, and

• Dissemination of green procurement policies to other institutions of DTI.

BOI has already formulated the green procurement guidelines. It also selected initial target

products of green procurement as bond paper, tissue and toilet paper, and pens.

The dissemination program of BOI’s Green Procurement Policy aims at extending it to other

DTI institutions as well as other government authorities in the Philippines.


This program consists to the activities mentioned below.

1) IEC activities to other government authorities

BOI will conduct IEC of green procurement policy through PR in mass media, roundtable

discussion with other government authorities, and so forth.

2) Technical assistance for interested agencies

Technical assistance will be provided to the interested agencies of applying the Green

Procurement Policies. It may include training of procurement officers in other government

authorities, preparation advanced green procurement guidelines, etc.



4-30

3) Additional designation of products preferably procured under Green Procurement

Policy

Under proper coordination with the Green Choice Philippines, environmentally friendly

materials that are preferably procured under the Green Procurement Policy will be further

designated.


The main actor of this program is BOI, the implementing agency of Green Procurement

Policy. As to the expansion of designated products for green procurement, BOI will work

together with “Clean and Green Foundation, who joined designation of the first green

procurement products in “Green Choice Philippine” under the eco-labeling pilot projects in

the EMPOWER project.




month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

A. Dissemination Program of BOI’s Green Procurement Policy

(1) Identification of issues

and constrains on

BOI’s Green

Procurement Policy

(2) IEC activities to other

government authorities

(3) Technical assistance

for interested agencies

(4) Additional designation

of products preferably

procured under Green

Procurement Policy



The total cost of the program is estimated as shown in the table below.


Unit: US$


Dissemination Program for Green Procurement 25,000

a. Hold roundtable discussion 3,000

b. Training seminars and workshops 3,000

c. Supporting the Green Choice Philippines 24,000



4-31

BOI, as the implementation body of Green Procurement Policy, should cover the cost of

roundtables, seminars and workshops for its dissemination from its budget allocation.

As to the cost of additional designation of green procurement products in cooperation with

Green Choice Philippine, financial support from other government authorities as well as the

potential producers of green procurement products, and so forth.


Dissemination of green procurement policy is of great importance in raising environmental

awareness not just in the production activity, but all the product life cycle ranging from

design to consumption and disposal of the products. It will promote upgrade of IEM level

in the Philippines industry.

4.3.4 National Recycling Policy Formulation Program


Although the Ecological Solid Waste Management Act (RA 9003) mandates that BOI shall

formulate the national recycling policy, there are many issues not yet solved to do it

including:

• Inadequate policy and policy instruments on recycling as a critical solid waste management practice,

• Lack of recycling and related SWM programs to implement RA9003, which address recycling market development, specifications, product descriptions and standards for recyclable materials, among others, and

• Lack of policy and policy instruments on environmentally preferable purchasing and non-environmentally acceptable products and packaging

This program aims at making solution to the above issues and marking the beginning of

recycling in the Philippines.


The Program is proposed as a one-year program implemented in accordance with the

following steps.

1) Preparation of a national inventory of recyclable materials

A national level inventory of recyclable materials will be established so as to identify the

market potential of recycling businesses in the Philippines. The national inventory will be

built by conducting the surveys shown in the table below.



4-32

Table 4.3.7 Process of Building National Inventory of Recyclable Materials

STEP 1: Collect information about existing inventory on recyclable materials

STEP 2: Examine current status of recycling industry in the Philippines

STEP 3: Examine the composition of general and industrial wastes (study on recyclable

materials)

STEP 4: Evaluate recycling market in the Philippines

STEP 5: Prepare inventory of resources that can be recycled

STEP 6: Review issues for improving recycling

2) Formulation of policies to promote the recycling industry

Formulation of the policies to promote recycling industry in the Philippines will be made on

the basis of following research and analyses:

• Profiling of recycling industry

• Market analysis for recyclable materials

• Research on recycling practices in other countries, including restrictions such as use of certain hazardous substances in products

3) Examination of legal/regulatory framework and incentives to promote recycling

To identify necessary legal/regulatory framework and incentive for promotion of recycling in

the Philippines, the experience in foreign countries needs to be extensively reviewed on the

following aspects:

• Laws, regulations and incentives on recycling

• Practical application of extended producer responsibility (EPR)

• Methodology for planning recycling targets for each recyclable materials and waste product

• Recycling stakeholders and their respective roles

4) Formulation of the National Recycling Policy

Based on the research and analyses above, the national recycling policy will be formulated

with draft targets, necessary actions, responsible parties, and implementation schedule. The

policy may include the following components:

• National and regional collection and utilization targets by recyclable material and waste product

• Development plan of materials recovery facilities

• Recycling promotion plan

• Standards for recycled products and environment-friendly products



4-33

• Legal/regulatory framework for promotion of recycling

• Framework of economic incentives to promote recycling

• Promotion of green purchasing policy

• R&D plan on recycling technology

• Other necessary issues

5) Formulation of the Action Plan on Recycling

The national recycling policy formulated above may needs to be further specified with the

clearly defined policy and program targets for short-term (2 to 3 years). In this regard, the

action plan on recycling will be formulated to clarify the targets and roles and responsibilities

of each relevant stakeholder.


Formulation of the national recycling policy is also the responsibility of BOI, as provided in

the Ecological Solid Waste Management Act. However, in terms of its relevance to the

environment management, EMB/DENR also has serious concern for this policy. BOI/DTI

and EMB/DENR will be the lead government authorities in formulation of the national

recycling policy. The utilization of environmental consultants may be required for

implementation of the surveys given above.




month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

(1) Preparation of a

national inventory of

recyclable materials

(2) Formulation of

policies to promote

the recycling

industry

(3) Examination of

legal/regulatory

framework and

incentives to

promote recycling

(4) Formulation of the

National Recycling

Policy

(5) Formulation of the

Action Plan on

Recycling



4-34



The cost of this program is estimated as shown in the table below.


Unit: US$


National Recycling Policy Formulation Program 39,000

a. Preparation of a national inventory of recyclable materials 8,000

b. Formulation of policies to promote the recycling industry 4,000

c. Examination of legal/regulatory framework 6,000

d. Formulation of the National Recycling Policy 18,000

e. Formulation of the Action Plan on Recycling 3,000

Although the formulation of national recycling policy is the responsibility of BOI, it may be

difficult for BOI to cover all the cost arising from the surveys required for that policy

formulation. Financial assistance from other government authorities or donors may be

needed.


The importance of national recycling policy is placed on provision of the baseline

information on potential market of recycling business in the Philippines through

implementation of detail field surveys. Furthermore, the policy implication regarding

recycling such as legal/regulatory framework and economic incentives will have a big

influence upon the corporate behavior on recycling of all the relevant businesses including

waste generators, recyclers, haulers, and treaters. In this regard, national level recycling

policy is of great importance to promote recycling in the Philippines.

4.3.5 Review Program of Existing Legal and Regulatory Framework of IEM


There seem a number of policy issues to be addressed so that IEM can be further promoted.

Such issues may include:

• Weak enforcement of IEM-related laws and regulations; uneven playing field

• Poor compliance by SMEs due to their limited technological and financial capacity

With regard to this current situation, this program aims at identifying the issues of current

laws and regulation through a comprehensive review of legal and regulatory framework of



4-35

IEM in view of the regulating authority (government) as well as the regulated community

(industry).

(2) Program Implementation Program

This program will consist of the following activities.

1) Comprehensive review of enforcement conditions of existing laws and regulations

in relation to IEM

The prior studies on the analysis of laws and regulations in relation to IEM and conditions of

their compliance will be comprehensively reviewed to identify their major issues.

2) Consultation with industry or corporate leaders on their perspective and

recommendations on compliance with and enforcement of industry-relevant

environmental laws

• Conduct survey and focus group discussions with industry or corporate leaders on corporate environmental philosophy, IEM practices, and role of environmental laws and regulations as driving or hindering factors to IEM adoption

• Consolidation of industry perspectives and recommendations on the legal and regulatory framework favorable to IEM adoption

3) Experts’ Workshops on assessment of the issues of current legal and regulatory

instruments and possible measure to address them

The expert’s workshop will be held for the purpose of recommending the measures to address

the current issues laws and regulation on the environment.

4) Multi-stakeholder roundtable discussion on the recommendations made in the

expert’s workshop

The result of the above workshop will be intensively discussed in this multi-stakeholder

roundtable to assess possibility of determine further actions to be taken for regarding the

amendments and establishment of new laws and/or regulations to promote IEM.

5) Drafting, consultations and social marketing on proposed revision of laws and/or

new bills promoting IEM

The details of proposed amendments and new laws and/or regulations will be disclosed to all

the stakeholders concerned for their further input to finalize the draft proposal of amendment

and new laws and/or regulations.



4-36

(3) Roles of Program Parters

The roles of program partners are given in the table below.

Table 4.3.10 Roles of Program Parteners

Stakeholders Roles

BOI/DTI Lead agency in formulating and disseminating policies and

measures for promoting IEM adoption (Green Procurement

Policy, Recycling Policy, etc.)

EMB/DENR Lead agency in adjustment and formulation of legal/regulatory

measures for promoting environmental compliance by industries

DOST Provision of technical input to the lead agencies; dissemination

of information on cleaner production technologies and pollution

prevention

Banks Examination and establishment of financial assistance scheme

in enforcing and implementing the above legal/regulatory and

policy measures

Industry associations,

NGOs

Provision of input to the above activities in terms of their needs

of assistance and difficulties in complying with the

laws/regulations or implementing the policies

Local Government Units Promote the programs at local level; form partnerships with

industries and local offices of lead agencies.



1st year


month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

(1) Comprehensive review

of enforcement

conditions of existing

laws and regulations in

relation to IEM

(2) Consultation with

industry or corporate

leaders on their

perspective and

recommendations on

compliance with and

enforcement of

industry-relevant

environmental laws

(3) Experts’ Workshops on

assessment of the

issues of current legal

and regulatory

instruments and

possible measure to

address them

(4) Multi-stakeholder

roundtable discussion

on the

recommendations made

in the expert’s

workshop



4-37

(5) Drafting, consultations

and social marketing on

proposed revision of

laws and/or new bills

promoting IEM

(5) Fund Raising Measures and Expected Effects of the Program the table below

outlines the expected cost and benefit of implementing this priority action plan




Unit: US dollar

Activity/Cost item Amount Unit Total Cost

Policy reform for critical IEM issues 18,900

(1) Evaluation of current laws/regulations 4 man-month 3,000 12,000

(2) Consultation with industry 3 workshops 1,000 3,000

(3) Experts’ workshops 3 workshops 1,000 3,000

(4) Multi-stakeholder roundtables 3 roundtables 300 900

This program aims at efficient ad effective enforcement of laws and regulations; therefore it

has to be carried out as a part of government efforts under national budget in principle. It

may be also possible to receive assistance from donors and international aid agencies such as

ADB and the World Bank since many of them continuously provide policy support in the

area of environment in the Philippines.


The impacts of this program only arises if amended or new laws and regulations and enacted

and enforced as its result. Review of current laws and regulations is an essential task of

government officials so as to comply them with their original purposes.



4-38

4.4 Action Plan on Economic Incentives to Promote IEM

4.4.1 Objectives

The objective of this priority action plan on establishment of innovative financial/economic

incentives to promote IEM adoption is

To promote IEM adoption by industries through a package of

market-based instruments (MBIs), including fiscal, financial and

psychological measures targeted to various industrial sub-sectors. This

would be pursued through the following strategies:

� Gap analysis of existing and potential fiscal, financial and economic measures to promote IEM,

� Select, design and evaluate additional economic incentives on IEM, � Advocate and adjust instruments according to the feedback by the

regulated community, and � Social marketing of new economic incentives on IEM.

4.4.2 Issues to be addressed:

Issues to be addressed in this priority action plan include:

� Examination on the effectiveness of market-based instruments (MBIs) to improve IEM under conditions of weak enforcement and limited compliance with environmental laws and regulations,

� Examination on reaction of industry to negative economic incentives such as environmental charges and taxes, and measures needed to address these concerns,

� Improvement and adjustment of the current financial assistance scheme on IEM investment based on identification the issues for potential users of such assistance,

� Promotion of policy dialogue between the regulating authorities (government) and regulated community (industry) regarding the application of improved or new economic incentives.

4.4.3 Program Implementation Plan

To accomplish the objective above, the EMPOWER project proposes the following activities

to be carried out by the relevant stakeholders in IEM.



4-39

(1) Review of the current economic incentives

The performances of various existing financial and economic incentives are comprehensively

reviewed. This review may consist of the following activities.

• Review studies and current status on impacts of key fiscal instruments implemented in the country affecting IEM (e.g. LLDA’s user fee, fuel pricing, tax breaks),

• Review hurdles in banking sector (especially GFIs such ass DBP and LBP) in promoting IEM,

• Survey stakeholders on perceived benefits and gaps,

1) Feasibility assessment of financial and economic incentives

Based on prior studies on the evaluation of currently applied economic incentives as well as

those addressing the feasibility of introducing new MBIs in relation to IEM, comprehensive

reexamination of such prior studies will be made for the purpose of identifying appropriate

economic incentives and their system designs to best reflect local conditions in the

Philippines. The potential economic incentives to be assessed may include:

• Product charges (Charges to the products that may have impacts upon the environment by their use, consumption, and disposal)

• Presumptive charges on industrial inputs (water, energy, materials),

• Expansion of air and water pollution charges,

• Increased fines for non-compliance,

• Deposit/refund system for containers, batteries, tires, etc.,

• Tax relief on imported IEM equipment,

• Limited and focused subsidies (e.g. hazardous wastes disposal fees for SMEs, relocation subsidies to industrial estates for SMEs),

• Training of bankers for improvement of banking practices (interest rates, collateral, guarantees, loan evaluation methods) to assist IEM by SMEs,

• Including good IEM practices in evaluations by credit rating agencies.

• Promotion of efficient energy and water consumption through application of progressive utility pricing (electricity, water supply, wastewater treatment, etc.)

• Grant type assistance to SMEs in obtaining consulting services on productivity improvement, EMS and other IEM activities.

Based on the preliminary design of implementation mechanism, Feasibility of the above

incentives will be evaluated to identify the most applicable ones in the Philippines. The



4-40

selected most applicable economic incentives will be made in the form of draft amendment

bill of current incentives or new drat bills.

2) Advocacy and consensus building for approval of the proposed incentives

To realize the bills recommended above, the following advocacy and consensus building

activities will be carried out:

• Prepare information materials appropriate for policy makers

• Conduct meetings with management and staff of concerned institutions (DENR, NEDA, DOF, BOI, BSP and GFIs), with industry associations, selected LGUs and relevant NGOs and academe,

• Lobbying to parliamentary members

If some of the amendment or new bills are officially approved, the following activities need

to be carried out.

• Preparation of manual/guidelines for management and operation of amended/new incentives

• Preparation of manual/guidelines for applicants for obtaining amended/new incentives

• Training of personnel who manages and operates amended/new incentives



Key Stakeholders Main Roles

BOI/DTI Coordination and adjustment of existing financial/economic

incentives to meet the needs of industries (especially SMEs)

DENR Provision of input regarding the minimum environmental compliance

level required for industries so that the area of financial and

economic support can be properly established.

DOST Technical input regarding the identification of IEM technologies to be

given financial/economic supports for IEM Promotion.

Banks (DOF, DBP,

LBP)

Coordination and adjustment of existing financing system to

specifically meet the needs of industries (especially SMEs)

Industrial

Associations

Provision of input regarding the needs and constraints of adopting

IEM in terms of financing and economic difficulties



4-41




month

2nd

month

3rd

month

4th

month

5th

month

6th

month

7th

month

8th

month

9th

month

10th

month

11th

month

12th

month

(1) Review of the current

economic incentives

(2) Feasibility assessment

of financial and

economic incentives

(3) Advocacy and

consensus building for

approval of the

proposed incentives





Unit: US dollar

Activity/Cost item Amount Unit Total Cost

1. Review of existing financial and economic incentives 6,000

2. Feasibility assessment of additional measures 18,000

3. Advocacy and consensus building of new incentives 10,000

(1) Preparation of PR materials - - 5,000

(2) Roundtables 10 500 5,000

4. Institution/capacity building for implementing new/improved incentive 20,000

Total 54,000

Examination of economic incentives discussed here is the responsibility of policy making and

implementation authorities of IEM; therefore the cost estimated above should be allocated

from national budget in principle. It may be also considered to receive technical and

financial assistance from donors and international aid agencies, who continuously provide

assistance in this area such as USAID, the World Bank, and ADB.


The expected effects of this program will be as follows:

• Successful introduction of new/improved incentives will enhance IEM potential of the Philippines Industry through proper allocation of the fund available in the financial market.



4-42

• Negative incentives to polluters may increase the government budget potential to be allocated for IEM.

• Involvement of various stakeholders in implementing this program will increase awareness and proper understanding of IEM of each stakeholder including industry, government, GFIs, ESPs, etc.

Part 2

Pilot Projects

Chapter 5

Planning of the Pilot Projects


5. Planning of the Pilot Projects EX CORPORATION

5-1

5 Planning of the Pilot Projects

5.1 Objective of the Pilot Projects

The EMPOWER project through implementing pilot projects aims to enhance capacity of

NGOs and industry associations that are counterparts of government organizations

implementing policies to promote IEM. Therefore the pilot projects were jointly

implemented by government organizations and NGOs with rigorous participation of industry

associations and other private sector organizations.

5.2 Conditions for Planning on the Pilot Projects

5.2.1 Results of Surveys to Identify Current IEM Practices

The JICA Study Team had identified current IEM practices, such as accomplishments of the

existing IEM projects, development of IEM activities at plant level, and IEM activities by

other relevant parties. The important findings from the surveys are summarized below.

(1) Accomplishments of Major IEM Projects

• IEM projects funded by USAID and UNDP are comprehensive efforts

continuously implemented for more than three years.

• IEMP (1992-1998) and IISE (1998-2001) projects supported by USAID helped

DENR to prepare IEM guidelines by sector and encouraged individual

companies to tackle waste minimization. However, the IEMP project was

evaluated low in sustainability and replicability by USAID. According to

USAID (2000), lack of top management commitment was a major hurdle to

sustain implementation of pollution prevention measures, and lack of

opportunities to share information about pollution prevention measures among

the companies in the same sector and fear of being punished due to sharing

information (sharing information may reveal that they are not in compliance

with the regulations) were the factors to prevent replication of pollution

management appraisal recommendations. IISE project promoted EMS through

awareness raising, technical support, and human resource development.

Among the companies assisted through the project, 25 companies have obtained

ISO 14001 certification.

• The PRIME project (1999-2001) was highly evaluated for its achievement.

Especially, Business Agenda 21 (BA21) listing actions towards sustainable



5-2

development, which was compiled by PBE was one of the major results. In

addition, the PRIME project promoted understanding of necessity of IEM in the

business sector. The PRIME project also assisted introduction of EMS to

SMEs and preparation of the ecolabeling program in the Philippines. These

activities have been continued under the EPIC project (2002-2004).

(2) IEM implementation at plant level

• Most of the companies in the Philippines that have obtained ISO14001

certification are foreign firms. Among the 100 companies that were

interviewed under the EMPOWER project, 32 companies answered that they

introduced EMS, but those practice setting goals for environmental load

reduction, environmental performance monitoring, and preparation of annual

environmental report, which are considered to be important for EMS, are less

than 20% of them.

• The companies that collect data necessary for production management by

production line is about 40% of the respondents; it is necessary for them to

practice production management before environmental management.

• The owners/top management recognize productivity and quality improvement as

most important business agenda; promotion of environmental management was

the least priority among the answer options including enhancement of sales

network, improvement of financial status, development of new products, and

production expansion.

• The strongest incentive to implement IEM for owners/top management is the

reduction of production costs followed by tax exemption and social recognition.

• Lack of financial resources, human resources, information about cost-effective

measures, affordable external experts, and credible environmental service

providers are listed as factors hindering IEM promotion.

• During the past waste minimization projects, proposed measures were

implemented when top management had understanding of or will to implement

waste minimization, proposed measures were appropriate and effective to reduce

production costs and their investment costs were minimal.

• Owners/top management who are eager to develop their business are positive to

environmental management when their business operation are stable.



5-3

(3) Activities of Relevant Parties to Promote IEM

• PBE and Clean and Green Foundation have been identified as parties that

bridge the industry sector and government organizations. PBE plays a central

role to promote IEM; it is involved in raising awareness of business

owners/executives and providing information. Clean and Green Foundation

is a NGO established by the first lady of former President Ramos and

designated as Secretariat of the Philippine ecolabeling program. These two

NGOs are working with the industry sector although there are other

environmental NGOs.

• Major industry associations participate in BA21; taking actions are the future

agenda for the participants. Some industry associations recognize that their

member companies are not so eager to implement BA21.

• Among government organizations, the Environmental Division of ITDI/DOST

provides technical assistance regarding IEM and CP.

• BOI, the Philippine counterpart of the EMPOWER project, is the government

organization that is best fit to be in charge of promoting IEM. It is expected

to take an initiative especially in providing economic incentives, planning

recycling policy, and practicing green procurement.

5.2.2 Issues for IEM Promotion

As clarified in Chapter 2, future agenda for individual companies, NGOs, and industry

associations to promote IEM are 1) to deepen business owners/top executives’ understanding

of importance of integrating environmental actions into business operation from the

viewpoint of business management improvement and 2) to establish a coordination system

among organizations advocating IEM, NGOs supporting these organizations, and industry

associations. Government policy agenda for IEM promotion are summarized in Table 2.4.1.

5.3 Next Steps for IEM Promotion and Pilot Projects under the EMPOWER project

5.3.1 Policy on Development of Pilot Project Plans

To narrow down areas suitable for pilot projects under the EMPOWER project, following

criteria were used:

• The project should contribute to enhancement of capacity of the implementer of

policies to promote IEM and its counterpart NGOs.



5-4

• No massive investment is necessary.

• The project is expected to be self-sustainable and expandable after the project

period.

• The project should be completed within a short period (about 8 months), and

results will be realized.

Within the area of policy/regulation and economic incentives, pilot projects cannot address

the issues identified in Table 2.4.1 except accreditation system of PCO’s technical level; the

National IEM Action Plan should handle these issues. As for EMS, there are many

activities to promote EMS. However, EMS was excluded from pilot project themes because

most of the Philippine companies need to tackle production management prior to

environmental management based on the current status of the companies. Moreover, these

companies are not motivated to obtain ISO14001 certification because most of them are not

export-oriented. Furthermore, results of establishment of EMS are not concrete, which

makes it difficult to get business owners/top management involved. Other issues identified

in Table 2.4.1 were taken individually or as a group to be prospective pilot projects.

Table 5.3.1 Discussion about the Future Agenda as Pilot Project

Measures Future Agenda Discussion about the issue

as Pilot Project

Seminar Coordination of IEM seminars and

integration of information

To be considered as the IEM

information system pilot

project

Recognition System Establishment of a recognition system

that promotes SMEs’ environmental

management

To be considered as the waste

minimization pilot project

Information Provision - Establishment of a system to

continuously improve contents and

provision methods of IEM information

- Establishment of a clearing house of

IEM information

To be considered as the IEM

information system pilot

project

Aw

areness-raisin

g, cap

acity b

uild

ing o

f

busin

ess ow

ners an

d in

dustry

associatio

ns

Training of production /

environmental

management auditors

- Training of technical experts who

can audit production and

environmental management

- Enhancement of training on cleaner

production

To be included in the IEM

Action Plan

Development and

implementation of

voluntary action plans

Implementation



Technical assistance to

waste minimization

- Approach from resource productivity

improvement

- Increase in business owners /

executives support to IEM

- IEM promotion by industry

associations



Measu

res to p

rom

ote co

mpan

y’s v

olu

ntary

actions

Pro

motio

n o

f IEM

tools

Introduction of EMS - Reduction in procedure costs for

EMS certification (establishment of

local accreditation body)

- Incentives to introduce EMS

- Promotion of environmental report

preparation and disclosure

To be handled by other

project (EPIC)



5-5

Measures Future Agenda Discussion about the issue

as Pilot Project

Environmental

accounting

Promotion of introduction of

environment accounting to individual

companies

To be considered as the

environmental accounting

pilot project

Ecolabeling - Establishment of standard

procedures for management of the

ecolabeling program

- Accreditation of the ecolabels and

promotion of ecolabeled products

Green procurement Dissemination of supplier chain

management


ecolabeling program and

green procurement pilot

project

Recycling promotion Promotion of recycling and DFE To be included in the IEM

Action Plan

Emission regulation (including

monitoring)

Introduction of voluntary monitoring To be included in the IEM

Action Plan

Appointment of PCOs Accreditation of PCOs’ technical

levels


environmental expert

accreditation system pilot

project

Support to

the leg

al system

Promotion of recycling used

products

- Development and implementation of

policies to develop recycling industry

- Clarification of industry’s roles in

recycling


Action Plan

Tax exemption Increased use of the exemption system To be included in the IEM

Action Plan

Low interest loans Increased use of the loan system To be included in the IEM

Action Plan

Eco

nom

ic measu

res

Environmental user fee Identification of the results of the

existing fee system

Application to other areas


Action Plan

5.3.2 Preparation of Draft Pilot Project Plans

(1) Waste minimization pilot project

Based on the results of the company surveys carried out under the EMPOWER project and

the review of the past IEM projects, important factors for successful IEM promotion are

awareness raising of business owners/executives, shift in approach from reduction in

environmental load to improvement of resource productivity, IEM promotion by industry

associations, and sharing experiences of model companies. Waste minimization (including

CP) means input management at production processes, which increases resource productivity

leading reduction in environmental load and consequently increase in competitiveness. The

JICA study team assumed that business owners/executives are likely to support the concept

of waste minimization and that selecting model companies from the industry associations

participated in BA21 and sharing experiences of the model companies within the industry

sector.

As a pilot project, the following activities are planned with the objectives that Philippine

business owners/executives evaluate waste minimization as contributing to productivity

improvement and that waste minimization models are established:



5-6

• Waste minimization assessment at model companies

• Implementation and evaluation of waste minimization measures by model

companies

• Holding seminars to share experiences of the model companies, and preparation

and distribution of a guidebook on waste minimization

PBE, which manages BA21, and Environmental Division of ITDI/DOST, which provides

technical assistance in the field of IEM and CP were expected to be an implementing body of

the waste minimization pilot project. Target of the capacity building through the pilot

project implementation was industry associations’ encouraging and managing their member

companies’ IEM activities and ITDI’s providing technical assistance to IEM promotion.

(2) Environmental Accounting Pilot Project

Based on the results of the company surveys under the EMPOWER project and the results of

the past IEM projects, the important factor for companies to promote IEM is understanding

and drive of business owners/executives. IEM promotion means integration of

environmental management into regular business management; this is the most important

point that should be recognized by business owners/executives, which could be realized by

environmental accounting. Providing information about objectives, benefits and success

stories of the Philippine companies’ integration of environmental management into the

regular business management by using the tool, environmental accounting, may encourage

other Philippine companies to take actions towards the integration. The PICPA (Philippine

Institute of Certified Public Accountants) has been disseminating the concept of

environmental accounting and prepared case studies on metal working, electronic appliances,

print circuit board, meat products, and cardboard manufacturing.

As a pilot project, the following activities were planned with objectives to deepen business

owners/executives’ understanding towards importance of integration of environmental

management into business management and to increase number of the companies that

practice simplified environmental accounting (since it would be difficult for SMEs to adopt

full environmental accounting, simplified one would be introduced in the pilot project):

• Preparation of a guidebook on simplified environmental accounting

• Introduction and its evaluation of the simplified environmental accounting at

model companies

• Holding seminars and disseminating information to share experiences of the

model companies



5-7

The JICA study team assumed PICPA as an implementing body of the pilot project. Target

of capacity building was PICPA’s disseminating the simplified environmental accounting to

SMEs.

(3) IEM Information System Pilot Project

Through the past IEM projects, information useful to promote IEM such as EMS,

environmental accounting, waste minimization, and financing options for environmental

projects, have been prepared. To provide IEM information that matches users’ needs, there

should be a system that ensures continuous improvement of contents and providing methods

of IEM information established by IEM information providers. Other issues to be addressed

include consolidation of scattered information, transformation of existing information into

electronic files, and establishment of a system to provide information about environmental

service providers and seminars on IEM. PBE has been providing IEM information to the

industry sector, and it is desirable to strengthen its function.

As a pilot project, the following activities were planned with an objective that information

users can obtain IEM information that meets their needs in a manner easy for them to use it:

• Designing a system to continuously improve contents and provision methods of

IEM information

• Establishment of a website providing IEM information

The JICA study team assumed PBE as an implementing body. Target of capacity building

was PBE’s managing the website on IEM information and playing the central role in IEM

information provision in cooperation with IEM information providers.

(4) Ecolabeling program and green procurement pilot project

Preparation of the ecolabeling program had been ongoing under the PRIME project supported

by UNDP, and structure of its implementation was established (the agreement among the

relevant Departments designates Secretary, Technical Committee, and Technical Working

Group for the ecolabeling program). Although the discussion on product criteria for tissue

papers and detergents was started, preparation of a master plan to establish the ecolabeling

program, procedures to manage the program, and necessary documents such as application

forms were not completed. To accredit an ecolabel, the Secretariat was required to promptly

finalize these procedures and documents.

Green procurement, which prefers products with less environmental impacts, supports the

ecolabeling program. In the Philippines, Section 2, Rule XII of IRR of RA9003 (Ecological

Solid Waste Management Act) encourages all government personnel to seek to reduce the

environmental damages associated with their purchases by increasing their acquisition of



5-8

environmentally preferable products and services to the extent feasible, consistent with price,

performance, availability and safety considerations. Declaration of green procurement

policy by government organizations was considered to be effective in terms of increasing

demand for ecolabeled products.

As a pilot project, the following activities were planned with objectives of establishing the

management structure of the ecolabeling program so that Clean and Green Foundation, the

Secretariat, and other relevant parties can accredit the first ecolabeled product, increasing

consumers’ awareness towards ecolabels, and implementing government green procurement

policy:

• Preparation of a master plan to promote the ecolabeling program

• Accreditation of the first ecolabeled product (establishment of procedures to

manage the program)

• Holding seminars to increase awareness of the industry and consumers towards

ecolabels

• Preparation of green procurement policy and awareness raising of government

personnel and product suppliers

The JICA study team assumed C&GF as an implementing body of the ecolabeling program

component of the pilot project. Target of capacity building was C&GF’s managing the

elcolabeling program as the Secretariat. BOI was assumed to be an implementing body of

the green procurement component of the pilot project. Target of capacity building was

BOI’s disseminating its experiences in preparation of green procurement policy to other

government organizations.

As for the ecolabeling program, the EPIC project by UNDP had been financially supporting

the program. The EMPOWER project intended to support the areas that were not covered

by the EPIC project and implement the pilot project in cooperation with the EPIC project.

(5) Environmental experts accreditation system pilot project

Industries may need external assistance for promoting IEM in the fields of environmental

sampling and analysis, establishing EMS and its auditing, engineering, and planning on IEM.

Fees for international environmental service providers are expensive, and there lacks a

system to assure credibility of local ones. Based on the company survey carried out under

the EMPOWER project, the respondents listed a lack of affordable environmental service

providers and information about them as factors hindering industries to promote IEM.

Qualification of environmental auditors has been discussed under the ISO 14001 scheme, and

DENR has been certifying environmental laboratories. However, there exists no system to

accredit technology level of concrete environmental management such as emission, effluent,



5-9

and waste management. DAO 92-26 of DENR requires manufacturing plants to appoint

full- or part- time PCO depending on type and size of the plant. Qualifications of PCO are

certified chemical, mechanical, or sanitary engineers and attendance in the trainings

designated by DENR; it does not accredit specific skills in environmental management.

As a pilot project, the following activities were planned with objectives that the industry

sector and environmental service providers in the Philippines deepen their understanding of

establishment of an accreditation system to assure credibility of the service and develop a

framework of the accreditation system:

• Identification of existing accreditation systems relevant to environmental service

providers

• Preparation of a framework of the accreditation system for environmental

service providers and an action plan to establish the system

• Holding seminars and information campaign for the accreditation system

The JICA study team assumed PAEAP (Philippine Association of Environmental Assessment

Professionals) as an implementing body of the environmental expert accreditation system

pilot project. Target of capacity building was PAEAP’s coordinating environmental service

providers.

5.3.3 Selection of Pilot Project Plans

(1) Intention of Prospective Implementing Bodies

The JICA study team contacted the prospective implementing bodies and asked about their

involvement in the proposed pilot projects. The prospective implementing bodies expressed

their willingness to conduct the pilot project except for the environmental expert accreditation

system pilot project.

(2) Narrowing down of the pilot project plans

When the JICA study team examined the pilot project plans (1) through (4) described in the

section 5.3.2 based on the criteria in the section 5.3.1, it found that the pilot project plan (2)

would require a lot of time to collect data and consequently be difficult to get the results

within 8 months and that impacts on capacity building of relevant parties were not

significant. Therefore, the JICA study team narrowed down to the three pilot project plans

(1) waste minimization, (2) IEM information, and (3) ecolabeling program and green

procurement.



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(3) Selection of Pilot Project Plans

The JICA study team proposed the three pilot projects on waste minimization, IEM

information, and ecolabeling and green procurement at the EMPOWER Steering Committee

meeting held on August 20, 2003. The Steering Committee members agreed on the pilot

project plans in principle.

During the discussion on the activities planned in the pilot projects, BOI requested support

for its obtaining ISO 14001 certification. The JICA study team recognized that BOI’s

experiences in obtaining ISO 14001 certification would beneficial for guiding private

companies and decided to include such component into the ecolabeling program and green

procurement policy pilot project.

Documents

Chapter 2 Current Status and Issues of IEM · 2. Current Status and Issues of IEM EX CORPORATION 2-2 Machinery and tool manufacturing Pulp and paper manufacturing Other industries