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Sound and independent information
on the environment

Case Study 5: Portugal

Portugal: Environmental Protocol between the Ministries of Environment & Industry and the Pulp Paper Industry 1988 to 1991/2

5.1 Summary Information on EA

Case Study 5:   Portugal: Contrato-Programa Entre as Secretarias de Estado do Ambiente e dos Recursos Naturais (SEARN) e da Industria (SEI) e o Sector da Pasta de Papel (CELPA)
The Environmental Issue(s) Environmental impact of Pulp Paper Sector
  • waste water quality
  • air emissions
  • waste, and energy reductions
Target Specific targets for 
  • waste water quality
    • TSS: for all mills: 44,300 kg/day
    • BOD: for all mills: 55,863 kg/day
  • air emissions 
    • particulates 150 mg/Nm3 (normal cubic meter)
    • H2S: 10 mg/Nm3
    • SO2: 500 mg/Nm3
Start Date 1988
Timescale Initial Negotiation 1987/88
Signature 1988 (June)
Official End-date (targets binding) 1991/92
Inspection 1991/92
Unofficial end-date 1995
Number of Signatories Government:
  • Ex- SEARN now DGA (Environment Ministry General Directorate of the Environment)
  • Ex- SEI now DGI (Industry Ministry General Directorate of Industry) 

Industry:

  • CELPA – Pulp Paper Association
Parties 3
Type of EA Compliance with existing target standards
Monitoring & Reporting Monthly emissions data from each plant to DGA and DGI and annual report
Complementing other Measures Grants from PEDIP and PEDIP II
Threat of fines for non-compliance
Legal Basis Legally binding

5.1.1 Sector Structure and Coverage

The agreement covers all four companies and the eight mills in the Portuguese pulp paper industry, thereby covering 100% of the sector. The four companies were

  • SOPORCEL – large
  • PORTUCEL – large
  • STORA – medium
  • CAIMA – small

5.1.2 Institutional and Sectoral Aspects

The Portuguese pulp paper sector was one of the sectors which had a significant environmental impact, primarily on water quality and on emissions to air. Given the impending EU legislation, this sector needed to make significant improvements in its environmental performance.

In addition, the pulp paper sector comprised large, medium and small companies, with the larger ones having significant economic power and international connections.

Given the need for environmental improvements and its economic strength and connections the pulp paper industry was regarded as a key candidate for an EA. The large companies could be the EA ‘champions’ within the sector and this would encourage the SMEs to follow suit. This, in turn, would give a useful message to the rest of the Portuguese economy; that reducing environmental impact is possible for SMEs. This message is important given that 90% of Portuguese companies are SMEs.

5.2 Background and Context

5.2.1 The Country Context

5.2.1.1 History of Environmental Regulations, Environmental Policy Approach

The environment was generally a low priority for Portugal before its accession to the European Union in 1986. Through the process of Portugal’s application to join the EU, the environment started to gain in importance, mainly because of the requirements to translate EU Environment Directives and Regulations into national law.

At the company level, awareness of environmental impact, and the introduction of measures to address these and comply with legislation was low in the 1980s. In addition, many SMEs had insufficient in-house environmental expertise and economic muscle to allow them to meet the requirements of legislation in the short-term.

Consequently, the situation could be summarised as being one of general non-compliance with legislation. It was also clear that passing legislation would not be sufficient to ensure environmental compliance. New instruments were needed to complement the new legislation.

The government chose to complement legislation with financial support, through programmes such as PEDIP (now PEDIP II) and started to look for further complementary instruments. Against a background of the Southern Member States’ perception of the EA concept as ‘very nice, but not practical’, the government, together with the AIP (Portuguese Industrial Association), DGA and DGI, decided to experiment with its first EA – that of the pulp paper sector. The pulp paper EA was also intended to offer signals to the rest of industry and to try to turn theory into practice.

5.2.1.2 History of EAs in Portugal

The pulp paper EA, signed in 1988, was the first experience of an EA in Portugal. It was chosen by the government as an appropriate first EA because of the real environmental impact of the sector, the significant potential there was for improving environmental performance and because the sector had the economic strength, and international contacts to enable them to meet the requirements of the EA. In addition, the government thought that the pulp paper sector would be a good example for other industries (such as oil, soap and metallurgy), which signed EA subsequently, in 1991 and 1992.

In 1994, following what was considered to be the success of the pulp paper EA, the government passed the EA General Framework Agreement which formed the basis for a range of new agreements. However, in the first quarter of 1996, after the change of the government, the new minister decided to freeze all EAs. The reasons were

  • that there was already a national air law (but no water law) that had to be complied with; and
  • that most EAs were not showing the improvements hoped. The company response was that the legal requirements could not be met and that they needed EAs to reach the targets.

The history of the development of EAs is littered with difficulties.

 

1987/88: At the time of negotiating the EA, there was no law on water pollution caused by the pulp paper sector. Concern for the environment was being pushed by politicians and not by industry, and politicians had a strong view that industry was bad for the environment. Industry viewed this as an unhelpful preconception.

1990: The government announced in a TV broadcast that it did not need EAs (TV was, at the time, the main method of communicating these environmental policy issues to the public). Result: EAs were effectively blocked.

As the years passed, laws were passed integrating the whole range of environmental directives from the EU into national law. This led to an increasing gap between what the laws were demanding and what the companies (especially SMEs) were able to achieve. This prompted renewed pressure to negotiate new EAs.

Table 5.1: Chronological Development of Environmental Agreements

1987 Discussions on EA in pulp paper sector between DGA, DGI, AIP & CELPA
1988 EA on pulp paper signed (the first EA in Portugal)
1989 EA for leather signed (3 years), with the same philosophy as the pulp paper EA
1990 WWT law – Decreto Lei
Glass packaging (1.5 years) to reduce energy consumption, help increase recycling and meet recycling targets.
Cardboard packaging for liquids (drinks industry – TETRAPAK) (1.5 years) reduce waste, reduce energy etc.
otal of 4 EAs signed
1992 PORTARIA for water with standards to be met by 1995
1994 Global framework for EAs
Further EAs signed (government body responsible shown):
Metallurgy – DGI
Chemicals – DGI
Federation of oils/margarine/soaps – DGI
Marble/granite – Institute of geology and minerals
Pigs – ministry of agriculture
Agriculture – ministry of agriculture
DGA involved in all of the above
1996 Current freeze of EAs – but expected to be unfrozen
Need to see results of other EAs before further EAs signed

In 1992, the new minister addressed the need for new initiatives by passing the ‘PACTO AMBIENTAL’ and by setting up two working groups, one for municipalities and one for industry. The problem does not really lie with large companies like pulp paper and cement, who can get environmental experts from abroad, but with SMEs which often have no recourse to outside expertise. These working groups discussed again the value of EAs and proposed a Framework for EAs, as a basis for giving money to industry.

In 1994, the general agreement/framework for EAs was signed in Portugal. While this was to increase industry’s sensitivity to the need to reduce their environmental impact, in the first year following the signature, little investment and environmental improvement were seen. The government felt that the industry signatories were not meeting their responsibilities and concluded that it was necessary to make the EAs more demanding and to ensure that there are fewer possibilities of industry not meeting its obligations.

5.2.2 The Environmental Issue

The environmental impact of the pulp paper industry was regarded as offering significant room for improvement, particularly with regard to the impact on water quality and air emissions.

The sector was also important as a signal to other sectors – that the government was starting to take environmental impacts seriously and that it is possible for sectors to improve their performance over a short period of time.

5.3 Negotiation of the EA

5.3.1 Overview

5.3.1.1 Parties Involved in the Negotiations:

  • From the Government side – DGA (originally DGQA) and DGI;
  • From industry – initially the AIP and later CELPA; all four of the Portuguese pulp paper companies – Soporcel, Portucel, Stora and Caima.

5.3.1.2 The Barriers to Participating

Initially many company directors were sceptical of the benefits of EAs and, indeed, of government motives, especially in the light of the traditional government approach of regulation rather than negotiation.

5.3.1.3 Industries’ Reasons and Incentives for Participating:

  • EAs allowed a negotiated approach to meeting targets –and industry was less likely to be confronted with by sudden imposition of new environmental legislation;
  • They offered the possibility of improving the relationship and trust between industry and the government;
  • Investment in environmental measures was inevitable anyway and the EA route allowed industry to structure its approach and exchange ideas with other companies.

5.3.1.4 Expected Benefits:

  • Water quality and air emissions to meet standards by 1991/92;
  • Better understanding and co-operation;
  • Financial support for investment.

5.3.2 Development/Negotiation of the EA

5.3.2.1 Industry Sector Coverage

  • EA on pulp paper focused only on pulp paper and did not look at forestry or other paper;
  • Its specific focus allowed closer identification of targets;
  • All companies in sector were covered by the agreement.

5.3.2.2 Negotiation Between Parties

AIP helped in the creation of the EA in 1988. The pulp paper industry is an associate of the AIP. The AIP, together with the DGA and DGI, started discussions. CELPA was contacted following the agreement to negotiate the first EA.

The government chose the pulp paper sector because it has a significant environmental impact that could easily be reduced given the financial strength, size and international connections of the industry. It was also important from the point of view that Portugal is a large exporter of pulp paper.

The development of the EAs was not inspired by German or other EU experiences. They did not follow the structure of EAs in other countries. The Portuguese EA was a separate initiative which led to significant environmental improvements.

5.3.2.3 The Timescale

The official timescale for the EA for pulp paper was from 1988 to 1991, a three-year period to meet the standards set in the EA. In practice, and unofficially, the EA was extended up to 1995. Thereafter, companies were obliged to maintain emissions at or below the level reached at the end of the contract/agreement,.

  • 1987 First contact;
  • 1988 Initial signature (preliminary environmental studies, monitoring, action plan, investments, and further monitoring and reporting);
  • 1989-91 Regular discussions between industry, DGA and regional DGA. Mill-by-mill approach to reach targets.
  • 1991 Standards in EA become binding;
  • 1992 Inspection to verify compliance started;
  • 1995 Unofficial end of EA.

5.3.2.4 The Negotiation Process

The final EA was the result of a series of proposals and counter-proposals. DGQA (now DGA) and DGI initiated the agreement together with the associations, AIP and CELPA. The pulp paper sector was chosen as it was considered to be strong enough to cope with the requirements. The only mill to take it seriously from the beginning was SOPORCEL. Other companies were initially more hesitant. By 1991, when the EA came into force, only SOPORCEL met the standards required. Following inspection of the mills, three mills were found not to meet the EA standards and were fined. The mills went to court, saying that dubious methods were used, and two of the mills won their case.

After this difficult period, the Ministers concluded that it was not very useful to spend time negotiating with industry. Therefore, in 1992, there was an unilateral imposition of regulations. The Ministry of the Environment, Industry and Health together passed the ‘PORTARIA’ (Portaria n. 506/92). This was a regulation setting up detailed conditions regarding the water effluent of this industry.

CELPA put pressure on to negotiate. The PORTARIA gave mills until 1995 to meet standards. After the mills had won their court case and the new regulations were imposed, all of the mills made the required investments to meet the standards. In 1995, at the end of the EA, all of the mills had reached their environmental targets.

In September/October 1995, the Ministry of Industry and the Ministry of Environment announced that the PARCOM (Convention for the Prevention of Maritime Pollution from Land Based Sources – Paris Convention), which comes into force in the year 2000, was to become applicable in 1999. The PORTARIA was then dropped on the understanding that industry would meet the tighter deadline. CELPA again started negotiations with the government on how to meet the 1999 requirements.

5.3.2.5 The Alternative to the EA

The alternative to the EA is the traditional approach of law/regulation, with potential fines and court cases. This, however, might have been more difficult to implement given the greater need for people to monitor and ensure compliance of companies. An alternative law did not always exist. At the time of the first EA, it was the EA that influenced the law rather than the other way round. This is no longer the case.

The PORTARIA on the impact of the pulp paper industry on water quality allowed targets to be met by 1995. Furthermore, another regulation exists for air, following the principles of the EU Large Combustion Plant Directive. This gave industries more time (end 1995) to meet the target.

5.4 Structure of EA and the Targets

5.4.1 Coverage

All of the pulp paper mills were included in the EA, so there was no issue of free-riders from outside the agreement. However, within the EA, only some of the mills made the required investments in the early years of the EA. During that time, the companies not investing were effectively free-riders. However, with the threat of sanctions, all the mills made the required investments (except one that closed). Consequently, by 1993 there was no longer an issue of free-riders.

PEDIP II offers incentives for environmental improvements. All companies, whether in EAs or not, can obtain finance if they meet the PEDIP conditions. EAs and PEDIP are therefore parallel but separate programmes. However, because PEDIP conditions include environmental issues, there is some implicit indirect linkage between the two types of initiative.

5.4.2 Targets

The targets for improvements for the EA include:

  • Water Effluents – Biological Oxygen Demand (BOD), pH, Total suspended solids (TSS);
  • Water consumption;
  • Air emissions – particulates, Sulphur, SO2;
  • Energy saving;
  • Raw materials use and product recovery;
  • Other issues include used oil, waste, PCBs, oil spills etc.

The EA standards set for air emissions were quite demanding (see Table 5.2a). However, for water (as a whole), it was less demanding (see Table 5.2b). Though the first stage of meeting the BOD requirements was fairly demanding, the aim was to induce secondary biological treatment.

Targets set within the EA and the PORTARIA have been superseded by the requirements of the PARCOM. This would require new investments to meet new requirements. However, some standards were higher in the EA – i.e. NOx and TSS (in water). In the cases where the level of environmental standards is less than the maximum limit set by PARCOM, the mills may not reduce quality.

Table 5.2a: Targets: Performance Standards for the Pulp Paper Sector

TSS (kg/day)

BOD5 (kg/day)

Particulates* (mg/Nm3)

H2S*  (mg/Nm3)

SO2* (mg/Nm3)

1987

Target

1987

Target

Target

Target

Target

63070

44341

122796

55863

150

10

500

Source: DGA

*Targets for main boiler unit only; other targets for other auxiliary boiler

 

TSS and BOD5 targets are aggregates for all mills

 

Nm3 = normal cubic meter

 

Table 5.2b: Targets for Waste Water Quality  


TSS (kg/ton)

BOD5 (kg/ton)

Bleached paste (Kraft)

10

9

Sector integrated paper (Kraft Liner)

4

6

Raw pulp (Kraft)

2.5

5

Bleached pulp
(using SO2)

12.5

4.5

Source: Contrato Programa (1988)
Measures on average daily concentrations based on 24-hour monitoring

5.4.3 Other Objectives

The Portuguese Government wanted to use the pulp paper EA as a signal to other industry sectors and to small companies. The government view was that the pulp paper sector:

  • was an economically strong sector and could afford to invest to meet the environmental objectives;
  • was a coherent sector which facilitated monitoring and negotiation;
  • contained some companies which had international contacts and could, therefore, have access to environmental expertise from abroad;
  • had both large, medium and small companies so that the large company SOPORCEL could be used as the EA `champion`, which would encourage the smaller companies to follow, and this, in turn, would be a useful signal to SMEs in other sectors;
  • had significant environmental impact and significant potential to improve its performance and would, therefore, be useful as a successful case, which would encourage other sectors to follow.

5.4.4 Assessment of the Targets

The standards achieved are significantly better than the ‘business as usual’ scenario, and do represent real investment beyond a ‘no regrets’ strategy, particularly because a plausible alternative scenario would have been the continued non-compliance with the laws. The targets eventually became part of national law for the sector and in two cases are tighter than the new EU legislation which is based on the PARCOM.

5.5 Implementation

5.5.1 Responsibilities for Parties

Meeting the target was the company’s responsibility. While CELPA was a key player in the negotiation of the EA with DGA, DGI and AIP, and therefore had the responsibility of encouraging action, all the explicit measures (excluding awareness issues) to reduce emissions were the responsibility of the company. This included monitoring, investments and progress reports. DGA had responsibility for the inspection of water effluents, while the Institute of Meteorology was responsible for the inspection of air emissions.

5.5.2 Measures

Each mill was required to meet the targets. The route that they took was their own decision, with (in contrast to the new EAs) no need to produce a year by year environmental improvement plan for the government demonstrating how the targets were to be met. There was, however, a plan on the estimated expenditure required to meet the targets.

The measures taken by different mills to meet the same standards were not the same. STORA did not need to install secondary treatment equipment to meet the standards, while PORTUCEL did. This installation took longer than expected and PORTUCEL did not initially meet the standards. This partly reflects the fact that PORTUCEL is a state-owned company, and so it takes longer to push decisions through.

5.5.3 Monitoring, Reporting and Progress on Targets

5.5.3.1 Monitoring and Reporting

Each mill had to provide DGA and DGI with monthly environmental data and a yearly report. In addition, when the EA came into force in 1991, government inspectors had the right to enter company premises whenever they wanted. Two to three inspections of the SOPORCEL mill, were carried out, with special attention paid to water quality, in the first year. Air was more difficult given the lack of appropriated equipment and expertise. The responsibility for monitoring was therefore split between the DGA (water) and the Meteorological Department (air). DGI did not carry out investigations.

5.5.3.2 Target Revision

The targets were not revised within the period of the EA, though the target date was allowed to slip from 1991 to 1995.

5.5.3.3 Stages

In this EA, unlike the new EAs, there was no staging of the targets that had to be reached. There was a single set of targets that had to be complied with, by each mill (three years following signature, or by the second half of 1991). As only two of the eight mills met the standards at this time, the timescale for meeting the standards was extended until 1995 through the publication of parallel pieces of legislation (regulations for water and air) detailing the standards that would be binding for the pulp paper sector from 1995 on.

5.5.4 Incentives for Participation and Free-Riders

5.5.4.1 Level of Participation and Free-Riders

All four companies – SOPORCEL, PORTUCEL, STORA, and CAIMA – agreed to take part in the EA, given the perceived benefits. There was, therefore, no issue of companies acting as free-riders by not signing the agreement. The only possibility of free-riding was if signatories did not comply with the standards.

This was the case during the period 1988 to 1992 when only some of the mills made the necessary investments to meet the standards.

5.5.4.2 Penalties for Non-Compliance of Signatories

Companies that did not comply with the standards faced fines/penalties. Indeed, as some of the companies did not meet the targets in 1991, they were taken to court and fined though two of the three companies then took the government to court and won. This was followed, however, by real investments by those mills which were still below the standards. This was an indication that they realised that they would face serious sanctions if improvements were not made.

5.5.4.3 Level of Public Participation

There was no involvement of NGOs or consumer/public representatives. However, the government did use television to discuss the EA – sometimes positively and sometimes negatively. Some of the companies noticed that, after the positive press coverage (which included an explanation of what was being attempted), the number of complaints dropped considerably.

5.6 Outcome

The overall view of most parties to the EA was that the pulp paper EA was a success overall, despite the delay in meeting the targets.

5.6.1 Progress Reported Towards Meeting the Targets

Of the four companies (eight mills), only SOPORCEL had met the standards by the 1991 deadline. One mill closed in 1992/93, because, mainly, of a lack of economic viability and available markets though it was also clear that the mill could not meet the environmental standards required. The closure gave rise to a large number of complaints from the public.

By 1993, nearly all mills had met all the standards and, in many cases, far surpassed them. Mill by mill data for each of the pollutants exist, as required by the EA. Seven of the eight mills showed real environmental improvements over the period 1988 to 1993 and further improvements by 1995. The greatest improvements were on water and on air emissions. Improvements in the area of waste were more modest.

Table 5.3a: Pulp Paper Environmental Performance — Water Quality (1987 & 1993)
 

Total Suspended Solids (TSS)

Biol. Oxygen Demand (BOD5)

Chem. Oxygen Demand (COD)

kg/day 1987

kg/day 1993

% reduction

kg/day 1987

kg/day 1993

% reduction

kg/day 1987

kg/day 1993

% reduction

63 070

103 33

84%

122 796

37 075

70%

467 543

106 092

77%

Source: DGA


In addition for the validity period (1991 cf. 1988), the following reductions had been achieved: TSS 58%; BOD5 72%; COD 52%; AOX 88%.

 

Table 5.3b: Pulp Paper Environmental Performance — Air Emissions (1987 & 1993)

S

Particulates

SO2

H2S

t/yr 1987

t/yr 1993

% reduction

t/yr 1987

t/yr 993

% reduction

t/yr 1993

t/yr 1993

This was a regulation setting up detailed conditions regarding the water effluent of this industry.

17 826

4 082

77%

23 291

4 291

82%

4 636

1 875

Source: DGA


Specific values for S range from 0.1 to 6.4 kg/t pulp paper – across different mills
Specific values for H2S range from 0.03 to 10.5 kg/t pulp paper – across different mills
Specific values for Particulates range from 0.5 to 11.1 kg/t pulp paper – across different mills

 

Table 5.4a Performance in 1993 versus the Standards Required Performance of pulp paper sector as a whole

Total Suspended Solid (TSS)

Biological Oxygen Demand (BOD5)

 

kg/day

% reduction

Target

Perf. vs. target

 

kg/day

% reduction

Target

Perf. vs. target

1987

1993




1987

1993




63 070

10 333

84%

44 341

429%

122 796

37 075

70%

55 863

151%

Source: DGA


Note: TSS - all mills met targets in 1993
BOD5 - one mill was far from standards in 1991, another just over

 

Table.5.4b: Performance in 1993 versus Standards Required Performance of pulp paper sector as a whole

Particulates

H2S

SO2

mg/Nm3

Perf. vs. target

mg/Nm3

Perf. vs. target

mg/Nm3

Perf. vs. target

1993

Target

% red’n

1993

Target

% red’n

1993

Target

% red’n

42

150

357%

3.2

10

313%

84

500

595%

Source: DGA


Note: Targets for main boilers, and performance averages for all mills.
red’n = reduction

 

Table 5.5: Investment in Environmental Measures (in PTE)

Air   (1)

Water   (2)

Material recuperation/ minimisation (3)

Target in plan (=1+2+3)

Realised (1992)

Realised (1995)

6,117,150,000

17,139,700,000

17,836,880,000

41,093,731,000

22,757,738,000 (55% of target)

34,000,000,000 (83% of target)

Source: DGA


Note: PTE - Portuguese Escudos

 

Accelerated progress to existing targets. The EA is now over. Seven of the eight mills met the standards by 1995. The other mill closed on economic grounds. There was no evidence of accelerated progress towards the targets although it should perhaps be noted that two mills were in effect EA ‘champions’ and, with their new investment programme and international support, were able to meet the target more quickly than the others.

5.6.2 Information on Costs of the EA

5.6.2.1 Companies

To meet the environmental targets set in the EA, companies had to invest on average an extra 2.5% over the normal investment sum. Exact figures for the industry as a whole are given in Table 5.5. These are environmental domain specific costs. The management of the process and the monitoring and reporting requirements involved additional costs. These have not been quantified, and are likely to be far less significant than those noted in Table 5.5.

5.6.2.2 Government

Government costs have not been estimated but would include the time taken in negotiation, inspection, the training of local environmental experts and the provision of specific funds to support investment.

5.6.3 Benefits

The use of EAs can encourage industry, by focusing first on the large industries which can afford the costs, such as pulp paper, petrochemicals, cement. The AIP worried about the medium and small companies, though making something work with large companies can encourage SMEs. EAs give companies more time to meet the targets and, therefore, make it more likely that industry will meet them.

The main benefit is the opportunity EAs provide for increasing the level of discussion within and between industries, and between industry and government. In this context, ISO14001 is likely to be of increasing interest. There will probably be a clear benefit from complementing EAs with EMAS or ISO14001. These build on the monitoring, environmental improvement plan and reporting process already instigated by the EA, and would encourage further improvement.

5.6.3.1 Companies

Companies benefited from the pulp paper EA in the following ways:

  • improved trust both between companies and between the sector and government: without EAs the industry would be encouraged to play cat-and-mouse with the government;
  • companies understood that they could meet together and could agree on some points on how to improve performance, sharing solutions;
  • financial support for investment, at the time, through the PEDIP programme (to meet the air and effluent standards, SOPORCEL got around 300,000,000 PTE for investment programmes);
  • internal/staff motivation improved;
  • improved the eco-management, both internally and externally;
  • enhanced public image and relations with neighbours; the government used the EA as a positive example of the new approach –and this led to greater understanding by the local population and fewer complaints;
  • the EA allowed a timescale in which to meet the law and was, therefore, less restrictive than the law itself;
  • allowed companies to meet standards following their own investment cycle and may have led to a minimal cost route of meeting the standards;
  • an EA is not an imposition and companies therefore had a more positive attitude to meeting the standards;
  • companies could develop their own motivation for environmental improvement;
  • companies became more public orientated;
  • improved the technical teams’ ability to tackle environmental issues at the right time;
  • has put the companies in the position to go for EMAS.

5.6.3.2 Government

The pulp paper EA was of benefit to the government in that it:

  • helped ensure that the pulp paper sector complied with environmental legislation;
  • helped increase understanding of the actual environmental impact of the sector, and its ability to improve performance, - effectively, demystifying the process;
  • increased understanding of real impact, thus helping the government in the drafting of legislation;
  • helped prioritise environmental funds allocation to ensure optimal environmental improvement;
  • provided an example and encouragement to other sectors;
  • encouraged a more positive approach to meeting environmental requirements, rather than the traditional approach of taxes, fines, jail, etc.;
  • helped develop greater confidence and trust between government and industry.

5.6.4 Other Impacts

Three of the big mills, which already had ISO9000, decided to go for EMAS. The view is that EMAS is a natural step to take after the EA (with its monitoring requirements etc.) However, EMAS is not yet very well understood in Portugal. It is a new idea, but its benefits are becoming apparent (e.g. in that EMAS could lead to a reduction in licensing).

Foreign competition was considered a real danger. If the system were one of regulation, fines and closure, foreign competitors could take Portuguese companies to the European Court of Justice and claim unfair competition on the grounds that Portuguese companies were not complying with EC law. The EAs helped avoid that.

Criticisms:

  • The targets were not reached by all mills in 1991, the date when the EA was to become binding. With the exception of two mills, serious progress was made only following fines and public pressure;
  • Some people hold the view that the EA gives companies the opportunity to delay before investing in environmental measures;
  • Some experts regard EAs as appropriate only as a temporary measure, while new legislation is being implemented.

5.7 Assessment of Effectiveness

5.7.1 Environmental Assessment

5.7.1.1 The Reference Situation

Prior to the agreement, the environmental situation was as stated in Tables 5.3 and 5.4 (1987 figures).

5.7.1.2 The Baseline

Business as Usual

The baseline for the EA was taken to be the level of environmental performance at the time of negotiation and signature of the EA. Had there been no EA, it is likely that little would have been invested in environmental measures beyond those improvements linked to required investments in changes of capital stock. If the path chosen had been regulation rather than agreement, some companies would probably not have complied with the regulations, would have gone through a period of fines, negotiation and eventual investment. The most appropriate baseline for this assessment is, therefore, the environmental performance of the reference year 1987/88.

5.7.2 Environmental Improvement/Effectiveness

5.7.2.1 Environmental Improvement

The EA started with only two of the eight mills making significant investments in environmental improvements. Only two mills and one company, SOPORCEL, met the standards at the deadline of 1991. Following pressure through fines, court cases and negotiation, a further five mills made serious efforts to improve performance. Consequently, seven of the eight mills (the other one closed) showed marked environmental impact improvements over the period from 1987 to 1993, and further improvements by 1995. By 1993, nearly all mills had met all the standards laid down in the EA, and, in many cases, far surpassed them.

The greatest improvements were in water quality. Reductions in specific air emissions were also very significant. There were more modest improvements on waste reduction.

5.7.2.2 Environmental Effectiveness

Assuming that no significant emissions reductions would have occurred if no EA had been agreed, the baseline is thus close to the environmental situation in the reference scenario – although great uncertainty exists as regards the impact of fines and possible closures. Still, given the absence of a discussion of alternative instruments and the poor data available, no conclusions can be drawn on environmental effectiveness.

5.7.3 Assessment Against Wider Impacts

5.7.3.1 Economic Efficiency

The timescale of the EA allowed investments to be made more in line with the investment cycle of each company than probably would have been the case had mills been suddenly required to meet new legislation. Furthermore, it is likely that there would have been greater costs to the companies through fines and (possibly) closures, had no EA been in place. In addition, there has been some exchange of experience between companies which may have led to some cost reductions. The EA can therefore be regarded as being more cost-effective than the alternative of regulation supported by fines and potential closure. Still, no quantitative data are available to support this.

5.7.3.2 Technical Change

To meet the water and air emissions targets, many of the mills had to make technical changes to their plants. For example, one mill needed to invest in secondary treatment to meet the BOD targets, while another improved process efficiency to meet the same targets. To meet air emissions targets, low sulphur fuels were used and burn efficiencies increased. Insufficient information was available to draw conclusions on whether there was any real innovation in the area of technical change.

5.8 The Future

5.8.1 Future Development of the EA and other EAs

5.8.1.1 Past Improvements

Initially, an EA required a global environmental plan. Now it requires a list of all companies and each company has to put forward a year-by-year environmental improvement plan that must be met. These plans cannot be changed except in exceptional circumstances or if new agreements or Community laws have come into force.

5.8.1.2 Possible Future Improvements

Suggested improvements of the EA could include:

  • greater emphasis on the idea that EAs are there to solve problems and not to enforce the law;
  • EA is an instrument for bringing people together. The increased dialogue role and value of EAs should be further developed;
  • greater reliance on phased EAs, as having a firm end-date is of limited value;
  • the inclusion of a more forward looking element, at least warning of future developments, as some EAs do not talk of IPPC;
  • modest monitoring requirements – e.g. a report every six months or even every year (instead of every month);
  • public access to the results of an EA through the publication of documents containing precise and detailed information on: participating companies/sectors and relevant data on them, standards, company specific water quality, emissions etc., to enable the public to see the real importance of the EA.

5.8.1.3 General Requirements for New EAs (Government View)

  • initial diagnosis required;
  • need for technical or expert advise (environmental consultancy companies);
  • list of companies involved in EA;
  • EA adoption plan for each plant;
  • integrated approach – but with priorities depending on sector environmental impacts;
  • focus on clean measures/processes, prevention rather than clean-up;
  • no discussion on number of standards that have to be reached (as in this EA);
  • no finite end-date to the EA, which should be seen more as a step in an ongoing process.

5.8.1.4 Other EAs

Other EAs are discussed in Section 3 on negotiation and context. A new EA for the pulp paper sector is not yet foreseen. More recent EAs have annual quantified targets, tied to specific agreed measures. These targets are staged, and, tightening year by year, comply with EU legislation, by the end point.

  • Following the pulp paper EA (1988), three more were signed in 1989 and 1990 (though these were more protocols than EAs).
  • These were followed by the signature of a Framework Agreement on EAs (1994) with the subsequent signature of around 10 further EAs.
  • The new government, however, prefers more traditional instruments (regulation, standards etc), and is freezing the current EAs (possibly as a further negotiation tactic which has been used before, even in the pulp paper EA).
  • The use of Portuguese style EAs should be of great interest in countries where there is some difficulty in compliance with legislation, notably when the amount of new legislation being passed is too great to be assimilated by the, often under-staffed (sometimes non-existent), environmental teams in companies. They have a clear potential for other Cohesion Fund countries and new member states.
  • More public involvement could ensure greater public pressure, though this may still be relatively insignificant given the embryonic NGO infrastructure and the low level of environmental awareness among the public, and, therefore, less delaying in meeting the targets. More participation could foster greater environmental awareness and further participation in future.

5.9 Conclusions

The Portuguese Pulp Paper EA, the first EA in Portugal, is generally regarded as a successful application of the EA instrument, despite the fact the many of the mills failed to meet the targets within the agreed timescale. It is regarded as a success because the environmental performance in 1993 was improved significantly beyond the targets set, and the EA has been influential in the development of a whole series of other EAs across a range of other sectors.

5.10 Information Sources

Interviewees

 

Manuel Gil Mata
CEPLA/SOPORCEL
Director-General Industrial – SOPORCEL
Chairman: CELPA Associacao da Industria Papeleira

At SOPORCEL
Lavos, Apartado 5
3080 Figuiera da Foz, Portugal

Tel: +351 1 796 00 54/351 33 940 204/411
Fax: +351 33 940 502

Eng. Delfina Serfa Pinto
Service Director

Joao Rolo 
DGI – Direccao Geral Da Industria

Tel: +351 1 385 91 61
Fax: +351 1 383 10 42

Eng. Barracha
General Deputy
DGA – Direccao-Geral Do Ambiente

Rua da Murgueira, Zambujal
Apartado 7585, Alfragide
2720 Amadora, Portugal

Tel: +351 1 472 8200 (Sw-B)/8206 Dir
Fax: +351 1 471 90 75/74

Ana Teixeira
AIP Associacao Industrial Portuguesa
Comissao da AIP para o Ambiente 
Environment Commission

Praca das Industrias
Apartado 3200
1301 Lisboa CODEX Tel: +351 1 360 10 00/1107
Fax: +351 1 363 56 08

References

 

DGA (1988), Contrato-Programa Entre As Secretarias De Estado Do Ambiente E Dos Recursos Naturais E Da Industria E O Sector Da Pasta De Papel (DGA, 1988), Portugal.

Jose Faria e Santos (1996), Acordos Ambientais como Processo de Desenvolvimento Sustentavel. CAIPA – personnal communication, Portugal.

AIP (1995), Ambiente No 7, 1995, AIP, Portugal.

 




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