Social Infrastructure

1. Social Infrastructure Creating the Conditions for the Completion of the Product Cycle

2. Social Infrastructure • Reasons why businesses need to participate in social infrastructure • Policy instruments • Main Actors • Government: International, National • Non-governmental Organizations • Industry Associations and Other Third Parties • Public-private agreements

3. Reasons why businesses need to participate in social infrastructure • Compliance with regulations, policies and other pressures • Information acquisition • Cost and risk sharing • Credibility

4. Implementation and enforcement of polluter pays principle (fairness or maintaining first mover advantages) • Cost efficiency • Technology and product development freedom • Time (and resources) to develop responses • Social acceptance (local, national, international) Corporate Concerns in Social Infrastructure Development

5. Cost Efficiency and Competition Transaction costs: • Information, • Searching for partners, • Monitoring and enforcing performance, • Compliance needs, • Opportunism.

6. Governance: two basic types • Binding or legal governance • Guidance

7. Forms of Governance • Moral persuasion(guidelines, principles, purchasing, publicity) • Command and Control(emission standards, bans, BAT [best available technology], EIAs) • Market mechanisms Monetary(taxes and fees; subsidies; licenses; deposits; quotas; emissions trading; removal of subsidies, monopolies and other distortions). Information(Emissions release inventory, product labeling, materials imprinting) • Extended Product Responsibility (product stewardship; voluntary/subsidized recycling and compulsory EPR laws) • Government investment(prevention, regeneration, information dissemination, research, education)

8. Governance: Rational Policy Making? • Science led; • Interest group influenced (positive & negative); • Government mediated, implemented and enforced; • Resources limited

9. Government: International • Identification and definition of global or trans-boundary problems • Politicization and agenda setting by national and international advocacy groups • Policy formation through negotiations • Establishment of binding agreements, conventions and protocols, action plans • Implementation by national governments

10. International Environmental Policy-making Process

13. Examples of Hong Kong’s International Environmental Obligations • Montreal Protocol on substances that deplete the ozone layer • Convention on the control of transboundary movements of hazardous wastes and their disposal • Convention on Wetlands of international importance • Agenda 21 Action Plan

14. Government: National (Hong Kong) • Initiation: academics, NGOs, public, media, EPD, international agreements • Formulation: EPD, other departments, consultants • Selection: Exco and Legco decide with external input from private sector, NGOs, ACE • Implementation: EPD, other dept.s, courts • Evaluation: all interested parties

15. Hong Kong’s Environmental Policy Process

16. Academics Media Public NGOs Private Government Consultants Sector EPD, Gov't Bureaus & Dept’s Response Sustainable Development Council Legislation Proposal Industry & Advisory Executive Council Environmental Committee on Lobbyists Environment Legislative Council Implementation & Enforcement (EPD & other Dep'ts) Evaluation Courts Evaluation Hong Kong’s Environmental Policy Process

17. Non-governmental Organizations • International and grassroots organizations • Powerful opponents: KCR, Sha Lo Tung, Canadian trees and electricity, Shell, Tuna • Mutually beneficial partnerships: Environmental Defense Fund, WWF, HK FoE

18. International Conservancy Association Friends of the Earth World Wide Fund for Nature Greenpeace Grassroots Green Power Green Lantau Green Peng Chau Tsing Yi Concern Group HK Marine Conservation Assoc. Hong Kong’s NGOs

19. Company Perspective Market demand NGO credibility External challenge Cross-fertilization Greater efficiency Protect image Engage stakeholders NGO Perspective Markets are powerful Government insufficient Need for funding, expertise Business is credible Cross-fertilization Impact on value chains Greater leverage Mutually Beneficial Partnerships

20. Industry Self-governance To beat costs of escalating regulation requirements, monitoring, reporting and image • Industry Associations • Cross-industry associations • Certifying authorities • Government led agreements (covenants)

21. Industry Specific Institute of Engineers Environmental Law Assoc. Green Restaurant Construction Association Certification Lab.s Institute of Biotechnology Environmental Contractors Waste Management Association Etc. Crossindustry Productivity Council Business Environment Council Cleaner Production Center Local and International Chambers of Commerce Chinese Manufacturers Association Hong Kong’s Environmental Industry Associations

22. Sustainable Growth Conservation Environmental auditing Pollution control Waste recycling Waste recycling Energy efficiency Environmental technology Ozone depletion and such other subjects as may arise from time to time. Mission Statement of HK General Chamber of Commerce Environmental Committee: To study and advise the General Committee and Directorate on issues, reports and legislation, including draft legislation, having a bearing on the environment including:

23. Committee Work of HK’s General Chamber of Commerce • To monitor and encourage development of environmental awareness in Hong Kong. • To initiate workshops, exhibitions, seminars or any other activities related to environmental issues. • To provide education, information and practical advice to members on environmental issues. • From time to time to appoint issues coordinators who have particular experience to lead working groups to study issues and recommend Chamber policy/action. • To liaise as necessary with other Committees of the Chamber and with non-Chamber organizations, including the Hong Kong Government, both locally and internationally. • To carry out any other related work at the request of the General Committee or Directorate. • To observe the attached Guidelines for Chamber Committees.

24. The Netherlands Green Plan • Target groups, themes and indicators • Covenants • Market and technology • Product Life-cycle Policy • Program Evaluation

25. HK Public-Private Partnerships • Rechargable battery recycling program (EPD, NGOs, companies) • Construction Industry waste reduction task force (Gov’t, Academics, Industry associations) • Mai Po Wetlands (WWF, AFCD, Companies)

26. Dunwell Petrochemical Ltd.

27. Dunwell Petrochemical Ltd. RE-REFINERY DIVISION • Aquired used oil re-refinery facility in August 1993 • After a year's upgrade, obtained a Waste Disposal Licence from EPD, and became HK’s first and only fully licenced used oil re-refinery. • One of most advanced in world with capacity of 50 metric tons/day. • Used oil processed by de-watering; de-fueling; and Wiped Film Evaporation ( heart of used oil re-refinery process: at high temperature and under vacuum, oil evaporated and condensed as pure distillate. • Internationally tested and recognized high quality base oil produced as raw materials for various lubricating oil. PRODUCT BLENDING & MARKETING DIVISION • From base oil produced by the Re-refinery, additive packages are blended to hydraulic oil, motor oil, metal cutting fluids, mould release agents and alike. • Shipped to Mainland, overseas and local and OEM markets

28. Re-refinery Process Chart

29. Dunwell Petrochemical Ltd • Accredited for ISO 9002 and ISO 14001certificates (August, 1997 ; August 1999) • Entry into other environmental services and creation of other subsidiaries:spent oil collection, petrol-interceptor wastewater treatment, underground tank cleansing, leak pressure testing service, site remediation, emergency cleanup, collection and proper disposal of rags, oil filters, batteries, oil bottles...etc; Consult, design and installation of industrial wastewater treatment system; and marketing of environmental technologies

30. Dunwell’s Regulatory and Social Conditions • 1991 HK Waste Disposal Ordinance provided with scheme for chemical waste disposal • Identifies producers, users, transporters and disposers and requires registration ($200,000 fine for failure; 8000 expected) • Government sets up system for tracking of waste and charging for disposal; sets up Enviropace to do so • Charges at Enviropace raised over time, but legal penalities for failure are “cost of doing business” • Recycling opportunity for oil envisioned by Australian company • Aus. Co. overcharged by oil sellers, pressed for lower price by market • Bankrupt company bought by Dunwell, who knew local market and were assisted by legal need for disposal coming into force • Dunwell charges for disposal and sells re-refined product • Using all oil in HK, but resistance to importation • Some local resistance to re-refined oil, especially government, most sales to Mainland

31. Dunwell’s Recycled PET Proposal • Urge government to prioritize recycling over disposal • Urge government to tighten control over designation of collected plastic bottles • Urge government to adjust procurement policies so that recycled plastics receive special credits over virgin materials • Ask sectors of community to set up committees for plastic recycling promotion • Target primary and secondary school children aand immigrants for intitial phase of awareness program

32. ‘$50,000 lure’ for minibus LPG switch What physical infrastructure is under development? What land-use considerations are required? What kind of social decisions are being made? Who is involved? Are the decisions being made in a atmosphere of cooperation or conflict?

33. Value Cycle Parts Manufacture Materials Processing Product Assembly Value Cycle supported by Physical and Social Infrastructures Resource Extraction Distribution Recycling Consumption Materials Collection Material & Energy Inputs Pollution Outputs Transfer Impacts

34. What are the infrastructure needs of your company? • What kind of physical infrastructure (roads, electricity, other fuels, sewage, buildings,recycling systems, etc) does your company need or could it convert to? • Should you work with the government, other companies (competitors, suppliers, distributors, recyclers), or NGOs to build these infrastructures? • What kind of values can be created at each stage of the industrial loop to ensure transaction are undertaken? • What kind of regulatory, guideline, membership, or social conditions are necessary to ensure that transactions are undertaken? • Is it feasible to expect the creation of these infrastructures in the short, medium, or long run?