Case Studies 4: The Netherlands

 Source: Declaration of intent on the implementation of environmental policy for the Chemical Industry, 1993

For radiation, the maximum permissible risk level (106 per year) must be achieved as quickly as possible. A more stringent target of a level of 108 must be met by 2010.

4.4.2.4 Eutrophication

Quantitative targets are set for reductions in emissions to water of Nitrogen and Phosphorous (Table 4.2).

Table 4.3: Guide Targets for Waste Treatment and Disposal

Source: Declaration of intent on the implementation of environmental policy for the Chemical Industry, 1993

4.4.2.5 Waste Disposal

The objectives set for waste disposal are to reduce the overall amount of waste generated by the chemical industry and to shift from dumping to incineration. The declaration (IETP) sets a number of guiding targets shown in Table 4.3.

The declaration goes on to provide targets for the splitting of disposal into dumping and incineration which should be achieved for different waste streams by the years 2000 and 2010. The targets can be summarised into the total targets for dumping and incineration for industrial waste from the chemical sector and are shown in Table 4.4. Specific targets are also set for three priority waste streams: waste containing halogenated hydrocarbons, phosphoric acid gypsum and plastic waste. These are shown in Table 4.5.

Soil protection is also covered under the waste category. Direct emissions to the ground were to be phased out within five years of the start of the agreement. A number of other provisions are mentioned in the declaration, to be covered by special government orders which were to be issued in 1993, under the soil protection act, to cover the main activities which pose a threat to the soil. These would be followed by general rules. The IETP describes also the responsibilities for cleaning up contaminated sites, which is to be governed by a separate Commission on Soil Cleanup of Industrial Sites in Use.

4.4.2.6 Disturbance

This covers noise, odour, external safety and the storage of dangerous substances (Post-Sandoz), again setting objectives and targets as established by existing policy in these areas. However, these are generally met at a local level.

4.4.2.7 Company-Based Environmental Management Systems

The objective was for all chemical industry companies to have integrated environmental management systems by 1995. This was considered to be necessary for the production of the Company Environmental Plans (CEPs) which were to be completed by April 1995 (see Section 4.5).

The agreement includes a number of other provisions, including details on the production of Company Environmental Plans (see Section 4.5) and the role of the relevant authorities. It also states that the government and VNCI will seek harmonisation of environmental policies at an international level.

It is important to note that the agreement stipulates that companies must still apply the Best Available Control Technology and where this, or other existing policies, lead to environmental improvements beyond the requirements of the agreement, companies must not stop at the target set in the agreement.

A consultative group has been established to oversee the agreements and to monitor progress. The group contains representatives of the licensing authorities (Municipalities, Provinces and Water Boards), the Chemical Industry (represented by VNCI) and the three Ministries which are signatories to the declaration. It does not involves any NGOs or third parties. The consultative group reports annually on progress under the EA. Reports have been published for 1994 and 1995. They cover the consultative group’s activities (including, for example, actions towards the integration of environmental reporting studies which examine international competitiveness/ harmonisation), and the aggregated results from the Company Environmental Plans (CEPs). The declaration and progress reports from the consultative group are available to the public.

The declaration complements existing environmental legislation, including the system of operating licences, which applies to chemical plants. In the case of non-compliance, or for companies not involved in the declaration, the existing licensing system applies.

Each company which is signatory to the declaration must produce a Company Environmental Plan (CEP). The CEP contains data on emissions in the baseline year, and measures to address the different environmental issues covered by the covenant. The CEP is submitted to the appropriate regulatory authorities.

The CEP is drawn up every four years and covers an eight year period. Once a CEP has been approved by the regulatory bodies, it is used as the basis of the application for an operations licence. This has the benefit for the company of simplifying and speeding up the licensing procedures. Companies must report annually on progress on the measures set out in the CEP. The results from the individual CEPs are aggregated to provide a measure of overall progress toward meeting the targets in the declaration. The monitoring conducted by the companies is verified by the regulators, who visit the sites on a regular basis, as they do under the licensing system.

The reports from the companies must be made available to the public and can be obtained by contacting the firms or from the industry association.

Companies are also encouraged to adopt environmental management systems which are seen as necessary for the preparation and required monitoring and reporting of the CEP. It is estimated that a CEP takes 12 to 14 months to prepare. VNCI have established a non-profit-making company called CHEMSERVE, which provides small companies, who do not have the technical staff available in-house, to produce a CEP, with access to free-lance experts (usually made redundant or on early-retirement from the chemical industry) to assist them in the production of the CEP at reasonable rates.

There are two types of regulatory authorities responsible for issuing operating licences for chemical plants- the water boards and the municipality or province. The province is responsible for large installations, whereas municipalities regulate smaller firms. In the past, separate licences were required for water issues and other environmental issues (air etc.). Of the 126 companies considered to be part of the chemical sector, 87 are regulated by provinces, and 39 by municipalities. There are 28 water boards, 18 of which are involved in the implementation of the EA (FO, 1995).

Under the covenant, these authorities must co-ordinate their licensing procedures. This is generally achieved by the province or municipality establishing contact with the appropriate water board. The water board area boundaries do not necessarily coincide with the province borders.

Two annual reports on progress under the declaration have been published (1994 and 1995). Quantitative data are available on progress towards targets for the following areas: climate change, acidification, dispersion to air and water, eutrophication and waste. Table 4.6 presents progress for 1995 for these areas, excluding waste. Progress in the management of industrial waste for the chemical sector is only available for 1995. These data are presented in Table 4.5.

Progress has also been made in the areas covered by the agreement, including:

Soil Protection: Risk analyses have been carried out for 54 companies on 75 to 100% of their activities. 71 companies have undertaken soil protection measures.

Soil Remediation: Contaminated land inventories have been conducted for 104 companies. Further studies were conducted for 80 companies, revealing that clean-up was required for 64 companies. Clean-up is underway in these companies. 40 have achieved clean-up of up to 25%, 14 have achieved between 25 and 75% and the remaining ten companies have achieved remediation of between 75 and 100%.

Disruption: Noise and odour problems are dealt with on a local basis. The report for 1995 presents results for a section of the companies in the chemical sector. Concerning post-Sandoz, 85 of the 97 companies required to submit plans had done so by 1995. The report also describes the sector's compliance with the Seveso directive.

Integrated Environmental Management Systems: Of the 112 companies that submitted CEPs in 1995, 104 presented a statement of environmental policy and 101 companies have established an environmental management programme. These have been implemented to varying degrees across the companies.

From the data available, the consultative group has concluded that three substances are of particular concern as regards progress towards the 2000 targets. However, this does not imply that all other standards and objectives for 2000 will be met. These substances are NO_x, Vinyl Chloride and CO. The CO levels, however, cannot be tackled in practice without raising emissions of CO₂. The main obstacle to the achievement of the NO_x standard is the high cost of the equipment required to reduce emissions. The consultative committee is beginning to consider the feasibility of target-sharing measures to overcome this barrier.

The emissions reductions achieved so far have been reached relatively easily, although it is not possible to say at present to what extent the progress to date has been the result of incremental changes and end of pipe solutions. There is now a debate on how to stimulate the redesign and innovation required to meet the much more demanding targets for the year 2010. These are likely to present a greater challenge to the chemical industry (van Namen, VNCI). The costs of the agreement to industry have not been quantified for the sector. It is likely that initial costs were faced by companies for the establishment of EMSs and reporting systems, where required. VNCI estimates that a CEP requires at least one man year to prepare. However, for a number of companies, cost savings are likely to arise through increased efficiencies associated with the implementation of EMSs. Also, flexibility in planning investments for environmental improvements is likely to have benefits for companies, by allowing these investments to be better integrated into wider investment plans.

Table 4.5: Progress Towards the Targets Set for Waste Disposal

Source: FO (1996) Report from the Consultative Group for 1995

The consultative group has also been involved in activities to integrate environmental reporting requirements under different plans and policies, including the CEP, to reduce the cost of administration to industry.

The costs to the regulators are unlikely to change significantly, although the role of the inspectors has altered, with more emphasis on working with industry and assessing companies' plans for investment in environmental improvements, to allow more flexibility.

Although the realisation of the targets was the primary benefit for the government, there have been a number of spin-offs identified by the parties interviewed, including:

• increased trust between the chemical industry and the regulators and policy makers, where relations had been more difficult in the past;
• greater communication and co-operation within the industry, with better ongoing information (rather than studies providing information on one point in time) on the situation in the industry.
• greater confidence in their work.

VROM indicate that the use of covenants has resulted in an entirely new approach to environmental policy-making and regulation.

Table 4.6: Environmental Assessment for the Dutch Chemical Industry Association Against the 1992 Reference Point and the Baseline

Source: Data taken from the Annual Environment Report of the Chemical Industry for 1995, VNCI 1996, and from the FO annual report for 1995, published by the Consultative Committee in 1996.

4.7.1.1 The Reference Situation

The base year used for the quantitative emissions reduction targets in the EA is 1985 (with the exception of climate change pollutants, for which 1986 and 1989 data are used). However, emissions data are also available for 1992 and this provides a better reference point for assessing the effectiveness of the EA, which was adopted in 1993, as it excludes changes in emissions which occurred before the EA.

The baseline for the targets set for waste management is 1986, and this provides the only reference point data. No data are available for 1992.

4.7.1.2 The Baseline

Business as Usual

Estimating a true baseline to take account of the likely situation in the absence of the EA is not possible because:

• the baseline should cover legislation on a wide range of environmental issues and pollutants.
• there is insufficient information on the environmental improvement which can be attributed directly to all the existing legislation.

However, using data on emissions from the base year used in the EA (1985, 1986 or 1989) and from 1992, it is possible to establish a rough trend that can be used as an indication of expected changes in emissions in the absence of the EA.

4.7.1.3 Environmental Improvement and Effectiveness

The assessment has been conducted against both the reference situation and the estimated baseline. Waste management is an exception, as data are only available for 1986 so the assessment of progress can only be made against this reference point.

The results of the assessment are shown in Table 4.6. The figures highlighted in bold indicate pollutants for which actual emissions for 1995 (under the EA) are below those achieved in 1992 and lower than those for the estimated baseline.

To summarise:

• There has been an environmental improvement (against the reference situation): The environmental assessment reveals that there have been reductions in emissions since 1992 for all except four pollutants: atmospheric emissions of carbon monoxide and ammonium, and emissions to water of copper and lead.
• Furthermore, environmental effectiveness can be claimed, since the assessment against the baseline suggests that the EA has resulted in emissions reductions, for 33 of the 61 pollutants covered, above the level which could be expected on the basis of past emissions reductions.

Those areas where significant improvements had been made between 1985 and 1992 may perform badly against this rough baseline because of difficulties in achieving additional improvements beyond those already obtained. This may be the case for acidification and climate change pollutants. The assessment may also overestimate the effectiveness of the EA for pollutants where little abatement efforts had been made between 1985 and 1992.

It is important to note that this assessment is based on emissions reductions achieved within two years of the establishment of the EA. The targets for 1995 covered 40 of the 61 pollutants prioritised by the agreement. The signatories believe there will be a problem in achieving three of the targets set for 2000: those for vinyl chloride, NO_x and CO.

Assessment of improvements in waste management against the 1986 reference point, and of progress towards the targets set for 2000 for waste reduction and the adoption of incineration as opposed to dumping as the preferred disposal option, is given in Table 4.5 (in Section 4.6).

The data available for 1995 demonstrates the following:

• a reduction in waste production for all the waste streams covered by the agreement (of between 4% and 78%);
• progress towards meeting the targets set for waste prevention and re-use by the year 2000;
• an increase in the proportion of disposal by incineration, through a reduction in dumping;
• three of the four targets set for the switch from dumping to incineration for the year 2000 had almost been achieved or had been exceeded by 1995, and progress had been made on the incineration of plastic waste.

4.7.2.1 Cost-Effectiveness

The increased flexibility for companies under the EA allows planning of environmental improvements to fit in better with the companies’ investment plans, thus reducing the costs of the investments to individual firms.

The integrated approach to environmental improvement under the EA leads to better prioritisation of environmental measures by firms. It also requires co-operation between the two licensing authorities (the regional authority/ municipality and the water board) and reduces the costs for firms of obtaining an operating licence.

The EA includes the wider objective of increasing the use of environmental management systems. This will lead to environmental improvements through changes in management practices and may lead to cost savings through increased efficiency.

The monitoring committee is looking into the feasibility of a tradable permits scheme for NO_x. If established this would lead to target-sharing between the companies in the EA, which would reduce the overall costs of reducing NO_x emissions.

4.7.2.2 Other Outcomes

The Chemical Industry Declaration was the second covenant to be signed under the Target Group approach adopted to implement the NEPP. It has provided valuable lessons for the actors involved, especially the government.

The EA, by promoting increased trust and co-operation between the parties, has allowed a greater exchange of information, so that government and the regulators are better informed of the situation in industry and of the potential for further environmental improvements. This information may be useful for the development of future policy measures.

The increased flexibility for companies allows planning of environmental improvements to fit in better with the company’s investment plans and so reduces the costs of the investments to industry.

There has been no evidence of target-sharing between companies to date (although there has been some flexibility over improvements at different sites operated by the same company). However, the actors are looking into the feasibility of a tradable permits scheme for signatories on NO_x.

The Declaration is thought by industry representatives to have resulted mainly in incremental improvements to date, although there is no quantitative research available to back up this impression. There is an ongoing debate in the Netherlands on how best to bring about the large innovation/ re-design required to meet the more ambitious targets set out in the NEPP for the year 2010. However, the EA has demonstrated that the introduction of greater flexibility between producers and regulation will provide for a more cost-effective response than under the conventional operation of the licensing system.

There is no evidence that the Declaration is damaging to competitiveness, although the consultative committee has commissioned a study to investigate the effects of environmental policy on the competitiveness of Dutch industry at the EU level. The existence of long-term targets and objectives and the good relationship between industry and the regulator, may even come to be seen as a (fair) competitive advantage for the Netherlands.

As the implementation of the declaration progresses, the main signatories are keen for the CEP to move away from the structure of the traditional licence application and become a strategic document for the company. Already the CEPs are becoming less cumbersome.

The consultative committee is establishing a system of integrated environmental reporting for companies under the declaration to reduce the administrative burden on companies, by adopting a format that can be used to report on progress on the CEP, and for reports required under a variety of other environmental initiatives in place in the Netherlands.

Mechanisms for target-sharing, as discussed above, will be considered. This may result in tradable permit schemes for NO_x and SO₂, depending on the results of feasibility studies and the reaction of the companies in the agreement.

• Initial meetings on the new round of negotiations (to start in May 1997) will begin early in 1997, for the second round of CEPs. These are likely to cover:
• increased co-operation and target-sharing between companies;
• efficiency of resource use;
• a more strategic approach for the second round of CEPs;
• the possibility of process re-design in the chemical sector, as more innovative approaches will be required to meet the targets for 2010.

The quantitative assessment suggests that the EA has contributed to bringing about emissions reductions for 33 of 61 priority pollutants, beyond those that could be expected (from historic trends) in its absence. Government and industry believe that these improvements are being achieved at less cost to industry than would have occurred under conventional regulations. Improvements have also been achieved since 1986 in waste management, with progress towards the targets in the agreement. Improvements have also occurred during the life of the EA in other environmental areas. However, the data does not allow an assessment of the extent to which this progress is due to the EA or other policy instruments.

The targets set under the EA for 2010 will present a greater challenge to the chemical industry. A debate has begun on how to stimulate the redesign and innovation required to meet these more demanding targets.

Arthur D. Little, 1996, Sustainable Industrial Development: Sharing Responsibilities in a Competitive World, February, Netherlands.

Bastmeijer, K., 1996, The Covenant as an Instrument of Environmental Policy in the Netherlands: A Case Study for the OECD/PUMA, April, The Netherlands.

Bastmeijer C.J., 1994, Provisional Code of conduct for concluding environmental covenants, VROM.

Biekart, J., 1995, Environmental Covenants Between Government and Industry: A Dutch NGO’s Experience, Review of European Community and International Environmental Law, 4(2).

Biekart, J. W., 1996, Dutch NGO-Experiences with Negotiated Agreements.

Biekart, J.W., 1996, Green Groups: New Instruments as Panacea or Pandora’s Box a Negotiated Agreements, paper prepared for the book ‘New Instruments for Environmental Protection in the European Union’, edited by Jonathan Golub of the European University Institute in Florence, Italy, to be published by Routledge Publishers in summer 1997.

Consultative Group (1995). Annual Report on Progress for 1994.

ERM, 1996, International Comparison of Environmental Controls on Industry, August, Netherlands.

Europe Environment, 1994, Voluntary Approaches and Sustainable Development, Working Paper for the European Commission, No 445, 20 December.

FO industrie, 1995, Declaration of intent to implement environmental policy in the chemical industry, Consultative Group for the Chemical Industry, Annual Report 1994, The Hague (English).

FO industrie, 1996, Declaration of intent to implement environmental policy in the chemical industry, Consultative Group for the Chemical Industry, Annual Report 1995, The Hague (Dutch).

Ingram V.J., 1996, An Environment for Consensus; Negotiated Agreements in Environmental Policy MSc thesis, Imperial College.

Moons, C.M., 1996, Cooperation between Industries and Government, May 23, Brussels.

State of the Netherlands, 1993, Declaration of intent on the implementation of environmental policy for the chemical industry, 2 April, The Hague.

Suurland, J., 1994, Voluntary Agreements with Industry: The Case of Dutch Covenants, European Environment, Vol.4(4), 3-7 August.

VNCI, 1996, Milieuprofiel – Chemische industrie ‘95, published by the VNCI, September 1996.

*: The case study was revised by Jan Willem Biekart (Netherlands Society for Nature and  Environment, Utrecht)