Social Infrastructure

Creating the Conditions for the Completion of the Product Cycle

Social Infrastructure Reasons why businesses need to participate

in social infrastructure Policy instruments Main Actors

Government: International, National Non-governmental Organizations Industry Associations and Other Third Parties Public-private agreements

Reasons why businesses need to participate in social infrastructure

Compliance with regulations, policies and other pressures

Information acquisition Cost and risk sharing Credibility

Corporate Concerns in Social Infrastructure Development

Implementation and enforcement of polluter pays principle (fairness or maintaining first mover advantages)Cost efficiencyTechnology and product development freedomTime (and resources) to develop responsesSocial acceptance (local, national, international)

Cost Efficiency and Competition

Transaction costs: Information, Searching for partners, Monitoring and enforcing performance, Compliance needs, Opportunism.

Governance: two basic types

Binding or legal governance Guidance

Forms of Governance Moral persuasion (guidelines, principles, purchasing, publicity)

Command and Control (emission standards, bans, BAT [best available technology], EIAs)

Market mechanismsMonetary(taxes and fees; subsidies; licenses; deposits; quotas; emissions

trading; removal of subsidies, monopolies and other distortions).

Information (Emissions release inventory, product labeling, materials imprinting)

Extended Product Responsibility (product stewardship; voluntary/subsidized recycling and compulsory EPR laws)

Government investment (prevention, regeneration, information dissemination, research, education)

Governance: Rational Policy Making?•Science led;

•Interest group influenced (positive & negative);

•Government mediated, implemented and enforced;

•Resources limited

Government: International

Identification and definition of global or trans-boundary problems

Politicization and agenda setting by national and international advocacy groups

Policy formation through negotiations Establishment of binding agreements,

conventions and protocols, action plans Implementation by national governments

International Environmental Policy-making Process

Examples of Hong Kong’s International Environmental Obligations

Montreal Protocol on substances that deplete the ozone layer

Convention on the control of transboundary movements of hazardous wastes and their disposal

Convention on Wetlands of international importance

Agenda 21 Action Plan

Government: National (Hong Kong)

Initiation: academics, NGOs, public, media, EPD, international agreements

Formulation: EPD, other departments, consultants Selection: Exco and Legco decide with external input

from private sector, NGOs, ACE Implementation: EPD, other dept.s, courts Evaluation: all interested parties

Hong Kong’s Environmental Policy Process

Academics Media Public NGOs

GovernmentEPD & Other Gov't Depts

Consultants

Legislation Proposal

Executive Council

Legislative Council

Implementation & Enforcement(EPD & other Dep'ts)

Private Sector

Response

Industry & Environmental

Lobbyists

Advisory Committee on Environment

CourtsEvaluation Evaluation

Council on Sustainable Development

Hong Kong’s Environmental Policy Process

Academics Media Public NGOs

GovernmentEPD, Gov't Bureaus & Dept’s

Consultants

Legislation Proposal

Executive Council

Legislative Council

Implementation & Enforcement(EPD & other Dep'ts)

Private Sector

Response

Industry & Environmental

Lobbyists

Advisory Committee on Environment

CourtsEvaluation Evaluation

SustainableDevelopment

Council

Non-governmental Organizations

International and grassroots organizations Powerful opponents: KCR, Sha Lo Tung,

Canadian trees and electricity, Shell, Tuna Mutually beneficial partnerships:

Environmental Defense Fund, WWF, HK FoE

Hong Kong’s NGOsInternational Conservancy Association Friends of the Earth World Wide Fund for

Nature Greenpeace

Grassroots Green Power Green Lantau Green Peng Chau Tsing Yi Concern

Group HK Marine

Conservation Assoc.

Mutually Beneficial PartnershipsCompany Perspective Market demand NGO credibility External challenge Cross-fertilization Greater efficiency Protect image Engage stakeholders

NGO Perspective Markets are powerful Government insufficient Need for funding, expertise Business is credible Cross-fertilization Impact on value chains Greater leverage

Industry Self-governance

To beat costs of escalating regulation requirements, monitoring, reporting and image

Industry Associations Cross-industry associations Certifying authorities Government led agreements (covenants)

Hong Kong’s Environmental Industry Associations

Industry Specific Institute of Engineers Environmental Law Assoc. Green Restaurant Construction Association Certification Lab.s Institute of Biotechnology Environmental Contractors Waste Management

Association Etc.

Crossindustry Productivity Council Business Environment

Council Cleaner Production Center Local and International

Chambers of Commerce Chinese Manufacturers

Association

Mission Statement of HK General Chamber of Commerce Environmental Committee:

To study and advise the General Committee and Directorate on issues, reports and legislation, including draft legislation, having a bearing on the environment including:

Sustainable Growth Conservation Environmental auditing Pollution control Waste recycling

Waste recycling Energy efficiency Environmental

technology Ozone depletion and such other subjects

as may arise from time to time.

•To monitor and encourage development of environmental awareness in Hong Kong.•To initiate workshops, exhibitions, seminars or any other activities related to environmental issues.•To provide education, information and practical advice to members on environmental issues.•From time to time to appoint issues coordinators who have particular experience to lead working groups to study issues and recommend Chamber policy/action.•To liaise as necessary with other Committees of the Chamber and with non-Chamber organizations, including the Hong Kong Government, both locally and internationally.•To carry out any other related work at the request of the General Committee or Directorate.•To observe the attached Guidelines for Chamber Committees.

Committee Work of HK’s General Chamber of Commerce

The Netherlands Green Plan

Target groups, themes and indicators Covenants Market and technology Product Life-cycle Policy Program Evaluation

HK Public-Private Partnerships

Rechargable battery recycling program (EPD, NGOs, companies)

Construction Industry waste reduction task force (Gov’t, Academics, Industry associations)

Mai Po Wetlands (WWF, AFCD, Companies)

Dunwell Petrochemical Ltd.

Dunwell Petrochemical Ltd.RE-REFINERY DIVISION Aquired used oil re-refinery facility in August 1993 After a year's upgrade, obtained a Waste Disposal Licence from EPD, and became

HK’s first and only fully licenced used oil re-refinery. One of most advanced in world with capacity of 50 metric tons/day. Used oil processed by de-watering; de-fueling; and Wiped Film Evaporation ( heart

of used oil re-refinery process: at high temperature and under vacuum, oil evaporated and condensed as pure distillate.

Internationally tested and recognized high quality base oil produced as raw materials for various lubricating oil.

PRODUCT BLENDING & MARKETING DIVISION From base oil produced by the Re-refinery, additive packages are blended to

hydraulic oil, motor oil, metal cutting fluids, mould release agents and alike. Shipped to Mainland, overseas and local and OEM markets

Re-refinery Process Chart

Dunwell Petrochemical Ltd

Accredited for ISO 9002 and ISO 14001 certificates (August, 1997 ; August 1999)

Entry into other environmental services and creation of other subsidiaries: spent oil collection, petrol-interceptor wastewater treatment, underground tank cleansing, leak pressure testing service, site remediation, emergency cleanup, collection and proper disposal of rags, oil filters, batteries, oil bottles...etc; Consult, design and installation of industrial wastewater treatment system; and marketing of environmental technologies

Dunwell’s Regulatory and Social Conditions 1991 HK Waste Disposal Ordinance provided with scheme for

chemical waste disposal Identifies producers, users, transporters and disposers and requires

registration ($200,000 fine for failure; 8000 expected) Government sets up system for tracking of waste and charging for

disposal; sets up Enviropace to do so Charges at Enviropace raised over time, but legal penalities for failure

are “cost of doing business” Recycling opportunity for oil envisioned by Australian company Aus. Co. overcharged by oil sellers, pressed for lower price by market Bankrupt company bought by Dunwell, who knew local market and

were assisted by legal need for disposal coming into force Dunwell charges for disposal and sells re-refined product Using all oil in HK, but resistance to importation Some local resistance to re-refined oil, especially government, most

sales to Mainland

Dunwell’s Recycled PET Proposal Urge government to prioritize recycling over

disposal Urge government to tighten control over

designation of collected plastic bottles Urge government to adjust procurement policies

so that recycled plastics receive special credits over virgin materials

Ask sectors of community to set up committees for plastic recycling promotion

Target primary and secondary school children aand immigrants for intitial phase of awareness program

‘$50,000 lure’ for minibus LPG switch

1. What physical infrastructure is under development?

2. What land-use considerations are required?

3. What kind of social decisions are being made?

4. Who is involved?5. Are the decisions being made in a

atmosphere of cooperation or conflict?

Value Cycle

ResourceExtraction

MaterialsProcessing

PartsManufacture

ProductAssembly

Distribution

Consumption

MaterialsCollection

Recycling

Value Cycle supported by

Physical and Social Infrastructures

Material & Energy Inputs

Pollution Outputs

Transfer Impacts

What are the infrastructure needs of your company?

What kind of physical infrastructure (roads, electricity, other fuels, sewage, buildings,recycling systems, etc) does your company need or could it convert to?

Should you work with the government, other companies (competitors, suppliers, distributors, recyclers), or NGOs to build these infrastructures?

What kind of values can be created at each stage of the industrial loop to ensure transaction are undertaken?

What kind of regulatory, guideline, membership, or social conditions are necessary to ensure that transactions are undertaken?

Is it feasible to expect the creation of these infrastructures in the short, medium, or long run?