Environmental Compliance
and Enforcement (ECE)
Sound Foundation for Sustainable Development
Issues and examples from Latin America
IAIA 2017
Montréal, Québec
5 April 2017
Gunnar Baldwin, Jr.
Environmental compliance
and enforcement (ECE) & Green Growth

How ECE helps “anchor” sustainable development:

Verify & recognize sustainable performance
(avoided pollution, reduced waste, fair labor practices, etc.)

Validate price premiums for sustainable goods

Create certainty that compliance is the least
expensive option

Ensure the integrity of environmental auditors
and certification schemes

Backstop private sector standards with the rule of law
Green growth – Early adopter “green” industries
and policy development
Framework for two-way analysis of enforcement mechanisms and stringency
Policy
formulation
stringency
Policy
Implementation
stringency
Policy
operation
stringency
(Impact on
economic behavior
and impact
avoidance)
I. Policy response
stringency measures
Sustainable industry
performance
Impact on
environmental &
socioeconomic
outcomes
Source: Green Growth
Knowledge Platform
II. Policy impact
stringency measures
Policies,
legislative &
institutional
frameworks
Current ECE
mechanisms &
effectiveness
Current
environmental &
social conditions
”Green” industries
Gap analysis
Gap analysis
Making economic development sustainable

Key challenges for ECE in Latin America

Economic growth always the overarching priority

Exploiting natural resources – fast track to $$$



(Opportunities for green growth must be able compete)
Political will / funding always are issues
Early adopters of “green growth”

Characterized by niche industries

Relationship between public and private sector
environmental regulation can be complex
Framework for ECE analysis
Multilateral environmental & trade agreements
Foreign certification
standards
Environmental laws
& regulations
(national, provincial & local)
Sectoral laws
& regulations
Commercial
Activities
National certification
standards
Private contract
& lender
requirements
Sectoral permit
requirements
ESIA / Project-specific requirements
Government enforcement
1 Cleaner production (CP)
Example: CP industries in Honduras

Issues: Air, water, soil pollution; labor practices

Regulatory model: Hybrid public & private
sector environmental governance


Jointly (public/private) developed CP standards

Regulatory compliance is obligatory part
of CP industry standard

CP requirements enforceable through environmental
license & by private sector CP organization
Focus on waste (pollution) prevention
to drive cost efficiency
 Waste products = Wasted $ assets
1 Cleaner production – Enforcement
Example: CP industries in Honduras
Policy
level
Strategy
level
National Policies
Economic, environmental, & social goals
National Strategy for Compliance with Environmental Legislation
Legal
Framework
Institutional
Framework
Education & Public
Awareness
Compliance Incentives &
Voluntary Mechanisms
Honduras Strategy
and Action Plan
for Cleaner Production
Implementing
organizations
Environmental Ministry
(MiAmbiente / SERNA)
(Public and private)
Regulatory
enforcement
Licensing
requirements
Advice/Input
Lab testing
of samples
Standards &
procedures
Regulated
CP enterprise
Private Sector
National Cleaner Production
Chamber of Commerce
Sectoral
organizations
Auditing
Industry sanctions
1 Cleaner production – Enforcement
Example: CP industries in Honduras

Government enforcement





Fines, warnings, ordered
corrective measures
Facility closure
Criminal sanctions
Testing of samples at national
testing laboratory (CESSCO)
Industry sanctions


Loss or suspension of
CP credentials
Reduced market access and visibility
2 Market-based mechanisms
Example: Renewable fuel production in Brazil

Issues: Verification of reduced CO2
emissions, sustainable land use

Regulatory model:
Key legislation at federal & state level

Public & private sector environmental governance issues
 Includes international & civil society actors
 Compliance with laws & regulations embedded in
industry (private sector) Bonsucro standard requirements

State-level ECE stringency and capacity vary
 Reliance by poorer states on federal enforcement
 Many sustainability indicators (e.g., GHGs, ILUC, ILO)
2 Market-based mechanisms
Case Example: Renewable fuel production in Brazil
Brazil national policies
EU Renewable Energy Directive
(Climate change, energy independence)
National laws applicable to sugarcane
• Land use zoning
• Sugarcane burning and harvesting
“Low capacity” states
“High capacity” states
Few applicable laws
at state level
Advanced state laws on
sugarcane production
(e.g., Maranhão, Bahia)
(e.g., São Paulo)
Enforcement by
Federal authorities
EU renewable fuel standards
• The forest code
• Climate change policy
Enforcement by
State authorities
Sugarcane growers
Ethanol producers
Sugarcane growers
Ethanol producers
(Other states)
(São Paulo)
Bonsucro EU
Sugarcane sustainability
indicators & standard
Incorporates regulatory
compliance obligations –
for both Brazil and EU
Auditing
2 Market-based mechanisms – Enforcement
Case Example: Renewable fuel production in Brazil

Government enforcement





Administrative orders
Fines, warnings
Ensure integrity of certification schemes
Criminal sanctions
Industry sanctions


Required corrections to environmental/social performance
of sugarcane growers & ethanol producers
Loss of certification and access to EU RED compliance market
3 Sustainable infrastructure
Example: TransMilenio Bus Rapid Transit
(BRT) system, Bogotá, Colombia

Issues: Urban air pollution, public health,
respiratory illnesses, premature deaths


Reduced urban air pollution and CO2
Public health cost savings in LA could =
2 to 6 billion $/year (Clean Air Institute)

Regulatory model: Municipal-level monitoring & enforcement
 District Secretariat of the Environment (SDA)
 Urban Environmental Authority of Santafé de Bogotá

Attributes & challenges:
 Distributed air quality monitoring network –14 stations
 Lack of staff, technical & logistical capacity are key challenges
4 Carbon credits from REDD+
Example: Reforestation in Argentina’s
Chaco province

Issues: Deforestation for cattle grazing
and agrofuels; Climate change

Regulatory model:
 Provincial environmental enforcement authorities
 Aided by national monitoring network
 National REDD+ policy implemented through provincial laws

Attributes & challenges:
 Development of LANDSAT Satellite and advanced
on-the-ground monitoring capacity
 Strengthening capacity of provincial environmental agencies
 Creating comprehensive forest inventory system
 Biodiversity in reforested or actively managed areas
4 REDD+ Carbon sequestration
Example: Reforestation in Argentina’s
Chaco province
Argentina national REDD+ policy
1.496/488 National forest law
Law 26.331 - Minimum Standards for the Environmental Protection of the Native Forests
Law 26.432 - Investments in forest cultivation & extension of existing forests
Law 25.080 – Investments in forest cultivation
Provincial forestry laws (Chaco)
•
•
•
International
Grants $$
Law of Environmental Protection of Native Forests
Law 6.409 Territorial ordinance of Native Forests
Law 7.153 Sanction regime under Law 6.409
Government
forest projects
(Preservation &
reforestation)
Private sector
forest projects
(Reforestation,
cultivation, &
forest products)
Secretary of the
Environment and
Sustainable
Development (SAyDS)
Provincial
Environmental
Enforcement
Authorities
Carbon Credits
PES
Forest products
$$
National Environmental Monitoring Network
National forestry laws
•
•
•
•
Conclusions

Variety of ECE competencies needed
 Many types of activities & performance indicators

Coordinate capacity building with macro-level planning and SEA

Need feasible compliance pathways for MSMEs


(Micro, small, & medium-sized enterprises)
Securing political will & adequate resources
 ECE mechanisms must demonstrate economic value (No free ride)
Thank you!
Gunnar Baldwin, Jr.
Consultant, Environmental governance
Email: [email protected]