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Industrial Policy and the Environment in Pakistan

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Industrial Policy and the Environment in Pakistan UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION 11 December 2000 NC/PAK/97/018 Industrial Policy and Environment INDUSTRIAL POLICY AND THE ENVIRONMENT IN PAKISTAN Prepared by UNIDO National Experts: Ms. Zehra Aftab, Industrial Policy; Mr. Ch.Laiq Ali, Environmental Policy; Mr. A. M. Khan, Case Study Faisalabad; Ms. A. C. Robinson, Case Study Karachi; and Mr. I. A. Irshad, Case Study Sheikhupura Project Manager: Ralph A. Luken, Senior Industrial Development Officer, Cleaner Production and Environmental Management Branch Sectoral Support and Environmental Sustainability Division ____________________________________________________________ This paper has not been edited. The views presented are those of the author and are not necessarily shared by UNIDO. References herein to any specific commercial products, process or manufacturer does not necessarily constitute or imply its endorsement or recommendation by UNIDO. h:\draftfinalreport.11.12.00/tb 2 This report was reviewed by Mr.Ralph A. Luken, Senior Industrial Development Officer, Sectoral Support and Environmental Sustainability Division, Cleaner Production and Environmental Management Branch with the contribution of Mr. Philipp Scholtès, Industrial Development Officer, Investment Promotion and Institutional Capacity-Building Division, Industrial Policies and Research Branch, on the Industrial Policy and Mr. Paul Hesp, UNIDO Consultant. The report was written by the following national experts: Ms. Zehra Aftab, Expert on Industrial Policy; Mr. Chaudhary Laiq Ali, Expert on Environmental Policy; Mr. Abdul Matin Khan, Case Study Faisalabad; Ms. Amy C. Robinson, Case Study Karachi and Mr. Irshad Ahmed Irshad, Case Study Sheikhupura. 3 Table of Contents Page SUMMARY 8 1. INTRODUCTION 14 2. SOURCES OF STRESS ON THE ENVIRONMENT 14 3. INDUSTRIAL POLICY, INDUSTRIAL GROWTH & THE ENVIRONMENT 20 3.1 Introduction 20 3.2 Earlier Industrial Policies and the Environment 21 3.3 Recent Industry-related Policies and the Environment 22 3.4 Sectoral Change and its Impact on the Environment 29 3.5 Scale of Manufacturing Operations and its Effects 31 3.6 Industrial Growth and Pollution Potential-an International Comparison 31 3.7 Towards a Strategy for the Manufacturing Sector 34 Bibliography 36 4. PAKISTAN’S ENVIRONMENT POLICY AND REGULATIONS AFFECTING 38 INDUSTRY 4.1 Environmental Legislation 38 4.2 Environmental Policy Initiatives 42 4.3 Current Implementation Status of Laws, Rules and Reguilations 46 4.4 Analysis and Recommendations with Comments on the Direction of Environmental Policies 44 Annex A. 50 Bibliography 56 5. FAISALABAD CASE STUDY 57 5.1 Introduction 57 5.2 Background 57 5.3 Industrial Profile 59 5.4 Industrial Pollution Profile 62 5.5 Environmental Effects of Industrial Pollution 65 5.6 Impacts on Health and Livelihood 66 5.7 Assessment 67 5.8 Recommendations 69 5.9 Conclusions 69 Bibliography 71 6. KARACHI CASE STUDY 73 6.1 Introduction 73 6.2 Background 73 6.3 Industrial Profile 78 6.4 Industrial Pollution Profile 83 6.5 Environmental Effects of Industrial Pollution 86 6.6 Impacts on Health and Livelihood 87 6.7 Assessment 88 6.8 Recommendations 92 6.9 Conclusions 93 Bibliography 95 4 7. SHEIKHUPURA CASE STUDY 97 7.1 Introduction 97 7.2 Background 97 7.3 Industrial Profile 98 7.4 Industrial Pollution Profile 100 7.5 Environmental Effects of Industrial Pollution 101 7.6 Impacts on Health and Livelihood 102 7.7 Assessment 103 7.8 Recommendations 103 7.9 Conclusions 104 Annex B 106 Bibliography 108 8. CONCLUSIONS AND RECOMMENDATIONS 109 8.1 Conclusions-Industrial Policy 109 8.2 Conclusions-Environmental Policy 111 8.3 Recommendations for Minimizing the Environmental Impact of Industrialization 111 9. RECOMMENDATIONS FOR UNIDO SERVICES 116 9.1 Industrial Policy Advice 116 9.2 Capacity Building for Industrial Environmental Management 116 9.3 Industrial Self-regulation and Private Sector Initiative 116 9.4 Industrial Estate 117 9.5 Corporate Responsibility 117 9.6 Centres for Environmental Management 118 Appendices: I- Member of the Advisory Committee for “Industrial Policy and Environment” Study II- Summary of the workshops recommendations III- List of workshop participants IV- UNIDO’s Programme on National Cleaner Production Centres V- Selected Websites on Cleaner Production VI- ISO Standards and Certification 5 Tables Chapter 2: 2.1: Water pollutant effluents from industry of Pakistan 2.2: Toxic substance concentrations in effluent from industries in Karachi 2.3: Estimated air pollutants by sector 2.4: Ambient air pollution data 2.5: Major industries of Pakistan identified with type of potential pollutants Tables Chapter 3: 3.1: Impacts of government intervention on industrial development and the environment in Pakistan 3.2: Inflow of foreign direct investment by industrial subsector 3.3: Productivity growth and pollution intensity in the industrial sector 3.4: Shares of industry branches in total manufacturing output by pollution potential category 3.5: Shares in industrial output by pollution potential category Figure Chapter 4: 4.1: Pakistan environment policy Tables Chapter 5: 5.1: Pollution classification of industries in Faisalabad District 5.2: Wastewater analysis of industries and receiving drains in Faisalabad 5.3: Total incoming quantity of metals and rate of their leaching 5.4: Annual leaching through eight kilometer length of open drain line 5.5: Health data 5.6: Constraints and recommendations for addressing environmental problems in Faisalabad Figures Chapter 5: 5.1: Map of Faisalabad District 5.2: Industrial growth in District Faisalabad 5.3: Industrial growth in District Faisalabad Tables Chapter 6: 6.1: S.I.T.E. DW industrial units and their pollutant potential 6.2: Growth of industry sectors 1991-1999 6.3: Typical range of analysis of Karachi tannery effluents 6.4: Comparison of Lyari river pollutant loading to the Arabian Sea (1975 and 1994) 6.5: Heavy metals in vegetables grown at Gutter Baghicha (KMC Sewerage Farm) Figures Chapter 6: 6.1: Map of S.I.T.E District West Location in Karachi City 6.2: Comparison of Orangi Hospital (S.I.T.E. Area) and Civil Hospital (Karachi City Area) 6 Tables Chapter 7: 7.1: List of industries in Sheikhupura District 7.2: Wastewater analysis industries in Sheikhupura District 7.3: Results of industrial drains from different types of industries in Sheikhupura District 7.4: Issues and Recommendations for addressing industrial environmental problems in Sheikhupura Figures Chapter 7: 7.1: Map of Faisalabad District 7.2: Industrial growth in Sheikhupura District 7.3: BOD loading percentages in Punjab 7.4: THQ Hospital Muridke, Tehsil Ferozwala, District Sheikhupura 7.5: Proportion of major diseases in Kala Shah Kaku 7 ACRONYMS ADB Asian Development Bank BNRMP Balochistan Natural Resource Management Project BOI Board of Investment CCI Chamber of Commerce and Industry CIDA Canadian International Development Agency CO Carbonmonoxide CP Cleaner Production DEC Divisional Environmental Committee EAC Expert Advisory Committee EC European Community EIA Environmental Impact Assessment EIS Environmental Impact Statement EMS Environmental Management Systems EOP End-of-Pipe EPA Environmental Protection Agency PD Environmental Protection Division of Punjab EPRCP Environmental Protection and Resource Conservation Project ETPI Environmental Technology Program for Industry E&UAD Environment and Urban Affairs Division FBS Federal Bureau of Statistics FPCCI Federation of Pakistan Chamber of Commerce and Industry GEF Global Environmental Facility HBP Haigler & Bailey Pakistan IEE Initial Environmental Examination KESC Karachi Electricity Supply Corporation ISO International Standards Organization MoELG&RD Ministry of Environment, Local Government and Rural Development MoIP Ministry of Industry and Production NCS National Conservation Strategy NEQS National Environmental Quality Standards NGOs Non-governmental Organizations NOC No Objection Certificate NORAD Royal Norwegian Development Co-operation NWFP North West Frontier Province OICCI Overseas International Chamber of Commerce and Industries Pak-EPA Pakistan Environmental Protection Agency PEP-Act Pakistan Environmental Protection Act PEPC Pakistan Environmental Protection Council PEPO Pakistan Environmental Protection Ordinance PPIB Private Sector Power and Infrastructure Board PSO Pakistan State Oil SDPI Sustainable Development Policy Institute SMART Self-Monitoring and Reporting Tool SMEs Small and Medium Enterprises SMRS Self Monitoring and Reporting System SPCS Sarhad Provincial Conservation Strategy SRO Statutory Regulatory Order UIEP-Project Urban Industrial and Environment Protection-Project UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organization WAPDA Water and Power Development Authority WASA Water and Sewerage Authority of Faisalabad 8 SUMMARY The objective of this study is to examine the relationship between industrial and environmental policies in Pakistan, and to recommend policy measures that could optimize economic benefits from industrial development with reduced environmental damage. Although data are scarce, it is clear that industrial pollution is increasing rapidly and that the health and productivity impacts are significant and worsening. Pakistani industries are increasingly contributing to air and water pollution. Major industrial contributors to water pollution are the pulp and paper, chemicals, petrochemicals, refining, metalworking, food processing and textile industries; power generation for various industrial purposes and
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