Environment Conservation levy and climate adaptation A response to the ongoing debate

Hemantha Withanage Executive Director, Centre for Environmental Justice

Since the media reports on passing of Environment Conservation Levy Act has been rounding the corner, arguments and counter arguments are frown upon with tinge of personal rivalry among the public, experts and officials. In the process of healthy discourse the larger context should not be missed or diverted.

The main accusation in the article entitled “The Environmental Conservation Levy Bill: Myths and Realities” on 25 April 2008, in the Island newspaper is that my previous article dated 15 April 2007 published in the same Daily is based on wrong information. I would like to refer to two articles written on this subject. Article written by Rohan Samarajiva “What is best for Sri Lanka’s environment: Tax or incentives? appeared in Lanka Business Online on 31 Mar 2008 says “A Bill will be brought to Parliament within days to give broad-ranging discretion to the finance minister to impose an environment conservation levy on households (as defined by the Bill), goods made here or imported, and services provided in Sri Lanka. Do not be fooled by the name. This is a tax; it has nothing to do with the environment; and it subverts the control of finance by Parliament.”

The article written by Manel Abeyrathne appeared in the Daily Mirror on 15 April 2008 also states that “Unfortunately there was no debate on the Bill since parliament was in uproar concerning the appointment of the acting secretary general and in the ensuing confusion the bill is said to have been passed though there appears to have been no clear decision taken regarding it till such time as the speaker expresses his opinion. Whatever the situation of the bill appears to be in parliament one wonders how effective such a levy would be and also the necessity at this juncture to burden the people further with an additional levy.”

Manel also argues that “While it is certainly noteworthy that the environment ministry is concerned about creating an environment friendly atmosphere it is certainly confusing as to how a levy at this junction on the goods mentioned can bring about the required justification. It is stated that households liable to this levy would be those that have a vehicle , a telephone ,  and electricity supply .The Ministry of Environment expects Rs 1,000 million from this source annually from 2008.”

This proves that I am at least not the confused one about the Environmental Conservation Levy. To avoid this confusion as propagated by some officials, it is the public duty of the Ministry of Environment and Natural Resource should make available the final draft of the Bill. While the counter argument referred to the Principle 16 of the Agenda 21 which gives the polluter pays principle, I must remind that the principle 10 of the Agenda 21 also explain about the access to information. In this case, the information is missing or strategically classified.

Principle 16 says “National authorities should endeavour to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment.”

As well Principle 10 of the agenda 21 says “Environmental issues are best handled with the participation of all concerned citizens, at the relevant level. At the national level, each individual shall have appropriate access to information concerning the environment that is held by public authorities, including information on hazardous materials and activities in their communities, and the opportunity to participate in decision-making processes …Effective access to judicial and administrative proceedings, redress and remedy, shall be provided.” To my understanding, the propagated consultation for this Bill was done among selected few by the Ministry but not public consultations.

The article appeared on 25 April 2008 is wrong when it says that ‘Extended Producer Responsibility’ cannot be adopted by Sri Lanka like South Korea as such items are imported to Sri Lanka from other countries. I believe there is no necessity for the producers to be based in the host country to establish EPR regulations. It can be passed on to the producer through the importer. EPR simply extending responsibility for waste from government to private industry, forcing producers to internalize waste management costs in their product prices.

For understanding of the readers, environmental stewardships or EPR regulations encourage all stages and actors involved in the life cycle of a product including manufacturers, retailers, consumers, and government to take responsibility for the environmental and human impacts that result from the production, use, and disposal of that product. Those regulations have both mandatory and voluntary provisions though product take back, product leasing rather than selling, design changes for easy recycling and reuse etc. Part of the regulations cover ban of importation of obsolete products such as used refurbished items such as computers, washing machines etc.

It is important to understand all waste material especially certain products with heavy metals cannot be treated or recycle in Sri Lanka since we don’t have such high technology. Financial resources cannot only solve this problem. Countries such as South Korea also send the toxic parts such as mother boards of computers to China for recycling.

To my knowledge CEA produced its Hazardous Waste Regulation in 1996. If the Ministry and the CEA had the will to implement they should not have idle for 12 more years. I don’t blame the present Minister and the CEA chairman for the inaction. However, I believe CEA has the competent staff to deal with the hazardous waste regulation but no adequate expertise to deal with the recycling of the waste. While CEA can tie together with the expertise of the other agencies it might be worth to give the responsibility of dealing with high polluting material to the producer.

To my understanding it is unwarranted to remind every CEA chairman about the complaints or the requests made earlier by the public regarding environmental matters. The chairman should be forthcoming to take the responsibility from predecessors. Ministry and the CEA should revisit the requests we made regarding the electronic waste since 2004. Perhaps the author of the April 25th article can ask the concerned officer to deal with that matter.

I failed to understand the statement that “there is no evidence that the use of electronic devices reduced traveling time or space. In contrast those have increased the amount of travel.”. I propose Ministry should refer this matter to the communication specialist.

The purpose of the CEA is to set standards and enforce the relevant regulations. I do agree that the need of the financial resources for the conservation efforts of the CEA and the other agencies under the Ministry. I also agree that the tax money which comes from the Treasury is public money and is not adequate for this purpose. However, National Environmental Act (NEA) already provides such a mechanism although it has not adequately followed due to political reasons.

Under the NEA every polluting industry has to obtain an “Environmental Pollution License (EPL)” and pay Rs. 15,000 for a period of three years. According to the NEA, as amended, every person who contravenes the provisions shall be guilty of an offence, and on conviction shall be- liable to a fine of not less than Rs. 10,000 and not exceeding Rs. 100,000, and thereafter in the event of the offence being continued to be committed, to a fine of Rs. 500 for each day on which the offence is so continued to be committed.” As we see there are many defaulters in Sri Lanka. If the existing law be enforced properly and the CEA can set up an effective Legal Department, this is not un-achievable. If the CEA effectively enforce the law there will be adequate funds to deal with environmental conservation cost.

Meanwhile Geological Survey and Mines Bureau (GSMB) deals with large amount of mineral resources and they can easily collect money if they charge proper royalty for the natural resources.

In my argument implementation of the Environmental Conservation Levy Bill needs significant staff and time of the CEA and other agencies. I wonder whether the Ministry has done any cost- benefit analysis of the implementation cost of this levy Bill. Perhaps bringing defaulters of this conservation levy to the legal process might collect more than the funds generated from the levy.

According to the article written by the CEA chairman as appeared in the Daily Mirror on 21 April 2008, the funds could be utilized for providing subsidies for pollution control technologies and for the purpose of granting low interest loans to industrialists. However, I fail to see that the Fund is going to be used for establishing recycling industry for the electronic waste and/or promote producer or importer responsibility and educating general public for proper waste management etc with the intervention of the Ministry. I doubt whether the subsidies and low interest loans finally end up in the pockets of the Corporations.

I am also curious to know how the fund will be utilized in the ‘adaptation fund’. The Bill produced before the Parliament is so vague and misleading that I don’t see any adaptation plan in it. Perhaps the Ministry can elaborate such plans and proposed regulations to the general public as they are bewildered, like me, on the conservation levy and the climate adaptation.

May 2007


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