Economy and Environment Program
for Southeast Asia
Tanglin PO Box 101
Singapore 912404
Phone:
Fax:
E-mail:
Web site:
(65) 6831-6854
(65) 6235-1849
[email protected]
www.eepsea.org
The Economy and Environment Program for
Southeast ASia (EEPSEA) was established
in May 1993 to support train ing and
research in environment al and resource
economics ac ross its 10 member
count ries : Cambodia , China, Indonesia,
Laos, Malaysia, Papua New Guinea,
the Phili ppines, Sri Lanka, Th ai land, and
Viet Nam. Its goa! is to strengthen local
capacity for t he economic ana lysis of
environmental problems so that
researchers can provide sound
advice to policymakers.
EEPSEA Policy Briefs summarize t he key
results and lessons generated by EEPSEAsu ppo rted research proj ects, as presented
in detail in EEPSEA Res earch Reports .
EEPSEA Policy Brie fs and Research
Reportsare available on lin e at
http://www.eepsea. org
Industrial
Estates a d the
Environment ••
A Study of Water
Pollution in
Vietnam
EEPSEA POLICY BRIEF. No. 2004·PBl
In Vietnam, as in many other rapidlydeveloping countries in Southeast Asia,
industrial estates have sprung up to
provide the infrastructure that facto r ies
need. Such estates can reduce the
environmental impact of the industries
they support, by providing central
wastewater pollution control facilities .
Since there are economies of scale in
wastewater treatment, sharing common
facilities should reduce costs.
Unfortunately, wastewater treatment is
often not practised and Vietnam is
currently experiencing a lot of water
pollution from the factories in its
industrial zones . ~
A summary of EEPSEA Research Report 2004·RR1, Incentires for Wastewater
Management in Industrial Estates in Vietnam by Le Quang Thong and Nguyen
Anh Ngoc, Facutty of Economics, Nong Lam University, Thu Due, Ho Chi Minh
City, Vietnam. ( Contact: [email protected] )
Water pollution has become
~
highlighted why many industrial
Investigating the
Estates
operational zones. However, it has
estates in Vietnam have not invested
The study, by Le Quang Thong and
the highest amount of invested
in wastewater treatment plants and
Nguyen Anh Ngoc from the Faculty
capital in the country and so looks
why many compani es still fa ll far
of Economics at Nong Lam
set for a rapid expansion in the size
short of the necessary compliance.
University, Ho Chi Minh City,
and number of industrial estates it
It finds that fi n es for polluters are
looked at 32 industrial estates in
contains. Together , the sites in the
ineffective and that factors such as a
four areas: Ho Chi Minh City
areas surveyed comprised almost
lack of investment cap ital, and a
(HCMC), Binh Duong Province,
50% of the industrial estates in the
perception that the fees charged for
Dong Nai Province and Ba Ria-
country.
waste treatment are unfai r, are
Vung Tau Province. These areas
stopping many firms from investing
were chosen because they have the
surveys and meetings with industrial
in wastewater treatment. It makes a
highest levels of industrialisation
zone managers, infrastructure
number of recommendations on
- and the highest number of
construction companies and
how this situation can be improved.
industrial zones - in Vietnam.
investors to gather primary and
Nowa new report has
These include tightening po ll ution
In HCMC, ten industrial zones
Ba Ria-Vung Tau has only five
The study team conducted
secondary data. In each of the 32
monito r ing and assessment and
operate, including two for export
industria l estates, two or three of
imposing stricter legislative controls
processing. Binh Duong Province
the most polluting factories were
and stiffer penalties to deter
has seven industrial zones; Dong
visited. Interviews also helped the
polluters.
Nai has ten, with another nine to be
researchers identify the factors that
estab lished in the next ten years.
affected the decisions compan ies
Factories and Common Treatment Plants in Ho Chi Minh City
EEPSEA Policy Brie' • No. 2004·PBl
a serious issue for all industrial estates
compliance. In addition to this
Cleanup Costs Deter
Action
fieldwork, the Vietnamese
When the researchers investigated
Department of Science, Technology
why companies in the industrial
and suppo rt ed organisations - for
and Environment (DOSTE) he lp ed
estat es did not clean up their waste
example multinational corporations
gather information on water
water properly, small and medium -
- were found to comply more
pollution control.
sized enterprises generally said they
effectively with environmental laws
could not afford to invest in and
than those with less capital.
made on environmenta l
more cost-effective option - were
still too expensive.
In comparison, wel l- resourced
Rivers are Suffering
operate their own treatment
The researchers found that water
systems. These companies also
with strong capital injections (for
pollution has become a serious issue
considered that participating in
example, the Vietnam-Singapore
for all the industrial estates in all
common WWT plants - although a
Industrial Park in Binh Duong
four regions. Overall, they found
Except for a few industrial estates
Province), most prioritized
that a lack of wastewater treatment
(WWT) facilities in these estates
(especially common WWT plants),
together with inappropriate
monitoring procedures, had led to
large amounts of untreated
wastewater being discharged into
Study
sites
rivers. For example, none of the
industrial zones in Ba Ria - Vung Tee
had common WWT plants. Serious
water pollution was observed in
Dong Nai River (Dong Nai), Sai
Gon River (HCMC), and Thi Vai
River ( Ba Ria -Vung Tau).
The type of industries in the
industria l zones had a significant
FHIJ aue<:
IE r-4 GlIAr-4G1I
( If.
Study
sites
impact on the effectiveness of
p ollution control measures. For
example, pollution in the Le Minh
Xuan industrial zone is worse than
in other industrial zones because Le
M inh Xuan has several highlypo lluting industries .
INDUSTRIAL ESTATES AND THE EI'NIRONMENT:
A STUDY OF WATER POLLUTION IN VIETNAM
inves tm e nt in other infrastructure
higher penalty impo se d. G iven th e
support programs should be
systems such as roads, and electri city
high cost of cons truction of
provided.
suppli es, rather than in common
wastewate r t reatment facuit ies, it is
WWT plants. Limited land area was
n ot surprising that co mpanies
however , must go some "st icks" .
also found to b e ano ther major
pref er to breac h the law an d pay a
Th e government , with th e industrial
factor halting the constructi o n of
penalty rather tha n inves t in cle an
estates management boards, need to
up technology.
impleme n t better pollu t ion
common
wwr plants.
Along with these "ca rrots",
monitoring procedures. Penalt ies
Cleanup Charges
Provide the Wrong
Incentives
Weak Enforcement
Compounds Pallutian
Problem
was tewater treatment should be
When th ey looked at why companies
This was comp oun ded by the fact
revised to provide in ce ntives for
were n o t u sing common WWT
that officials condu ct on ly
pollution prevention.
plants, the researchers found th at
in frequent checks on wh e ther
the fee structure fo r wastewater
companies were mee t ing pollution
treatment was often cons id ered
contro l regulations. Beca use of
unfair. In gene r al , compan ie s were
thi s, so me common WWT plants
charged acco rding to the amount of
stopped opera ting betwee n visits
inc om ing water u se d b y the
fr om environmental enforcement
factories, rath er th an t h e am ount of
officers and fre ely d isc h arg ing
water or efflu ent di scharged; the
untreated water in to rivers .
for n o n -co mpliance n ee d to be
increased, a nd the fe e structure for
quant ity or cons iste ncy of th e
wastewater they prod u ced was not
Carrots and Sticks
cons id e red . Such a system provid e
In lig h t o f the pollu tio n problem s
n o incentive to reduce po ll ution
they found, the researchers
loads.
emphasize the need for waste water
Nor were th e penalties imposed
treatment , especially in Dong Nai
fo r non-comp lian ce with
and Ba Ria - V ung Tau. The
e n vironmental sta ndards high
ind ustrial estates may n ee d
enough to act as an effective
governm e nt support to make the
deterre nt. Fin es were gen erally se t
necessary investm ent in p lant. They
at a m aximum of USD 200. Only
suggested tha t credit fac ilities and
u n der exce pti o n al con dition s was a
EEPSEA is an international secretariat administered by Canada's
International Development Research Centre (IDRC) on behalf of EEPSEA's sponsors:
IORC ~ CROI
International Development
Researth Centre
Centre de
recherthe~
develop~ment
pour Ie
international
1+1
Canadian International
Development Agency
~
~Sida
Swedish International Development
Cooperation Agency
Agence canadienne de
developpement international