COMPARATIVE FEDERALISM: Best Practices Analysis of Environmental Protection Authorities in Federal States 2010 COMPARATIVE FEDERALISM: BEST PRACTICES ANALYSIS OF ENVIRONMENTAL PROTECTION AUTHORITIES IN FEDERAL STATES Environmental Law Institute 2010 1 ACKNOWLEDGEMENTS This publication is a project of the Environmental Law Institute (ELI). The study was conducted under Contract 7154442 from the World Bank Group. This report was written by Vrinda Manglik, Vikki Leitch, Catherine McLinn, John A. Pendergrass, Daniel Schramm, and Louise H. Yeung. The authors offer thanks for assistance provided by Ana Parente, Bo Xiaobo, and Yige Zhang. ELI is responsible for the views and research contained in this report, including any omissions or inaccuracies that may appear. The conclusions are solely those of ELI. 2 EXECUTIVE SUMMARY Many nations throughout the world use a federalist form of government. Under this form of government sovereignty is shared between the central national government and constituent bodies, such as provinces or states. Shared sovereignty means that the two levels of government each have responsibilities to govern, some shared and some allocated to one or the other. This report provides a comparative study of how a number of federalist nations govern with respect to environmental issues, and more specifically pollution control and prevention. The principal nations studied include Brazil, China, Mexico, and the United States, while information on selected aspects of environmental governance is provided for Australia, Canada, Germany, and Switzerland. At the most basic level these nations vary significantly in how they organize governance of pollution control and environmental protection. Brazil’s constitution explicitly provides that the federal, state, and municipal governments share power to protect the environment, while Germany’s constitution states that the federal government holds such power. Nevertheless, in both these nations, as with the others, legislation provides more specific direction concerning shared and divided authority to govern with respect to the environment. Such variation extends to all aspects of governance of environmental protection and pollution prevention and control. The fundamental organization of government between federal and provincial or state bodies significantly affects allocation of authority over environmental and pollution matters. China is unusual in that its system is formally a unitary rather than a federalist form of government, yet provinces have significant authority to implement the general directives issued by the central government. In countries such as Switzerland and the United States the federal government has limited powers and cantons or states retain all residual power, which generally leads to greater autonomy in the constituent bodies. In contrast Mexico’s version of federalism provides greater power to the central government. As a result the canton/state environmental agencies in Switzerland and the United States have more independence from the federal agencies than do Mexico’s state agencies. These differences should be considered when making comparisons between the various federalist countries. The case studies presented here demonstrate that there is no single best method and no single model for governing environmental issues in a federalist system. Best practices may be found in each of the nations studied and with respect to some issues it is not clear that any practice has clearly been demonstrated to be most effective. As a result, numerous sections of the chapter on “Best Practices” include examples from several countries in order to demonstrate the range of alternatives that have been put to use. Of the countries studied, the United States has the longest experience with shared responsibility for environmental protection while China has perhaps the least experience. As a result of its long experience, the United States has developed strong institutions and extensive mechanisms for environmental protection and pollution prevention and control at 3 the federal and state levels. China, in contrast, is still developing its institutions and mechanisms for governing in this field. Despite this relative inexperience, however, China has developed a number of innovative and potentially effective institutions, including the adoption of ‘green benches’ by some of its courts. As a general matter the United States has well-developed institutions and mechanisms for fiscal management, oversight of environmental agencies, compliance monitoring, enforcement, capacity-building for state agencies, compliance assistance, accountability, addressing grievances, involving the public in decision-making, transparency, and prosecution of crimes. In part the effectiveness of these institutions and mechanisms is due to the type of federalism in the United States. The relative autonomy of US states has allowed many of them to make significant innovations in environmental policy and management at the state level, with many of the best policies and management ideas being adopted at the federal level. Brazil’s Ministério Público, or office of the public attorney, is one of the most effective institutions for assuring accountability of a nation’s system for environmental protection. These public attorneys are charged with protecting the public interest and have broad powers to accomplish that goal including investigations and requiring police investigations. They operate at the federal and state levels and have oversight authority over all levels of government as well as to prosecute crimes and bring lawsuits on behalf of the public. The Ministério Público is effective at the state and federal levels in many roles from assuring accountability of the environmental agencies to civil and criminal enforcement against industrial and municipal or other government violators of environmental law. Mexico has developed an ecological gross domestic product to measure progress toward its sustainable development goals. Mexico also has well-developed systems for monitoring and overseeing the funding of its environmental agencies, although the actual levels of funding are acknowledged to be lower than needed. Each of the countries studied has mechanisms for providing the public with information about environmental issues and decisions and public participation in environmental protection. Several nations have particularly noteworthy provisions relating to public participation. Access to public information is a constitutional right in Mexico. Brazil has a national environmental education policy requiring environmental education in all public and private schools at all levels. Canada provides funding to non-profit organizations to participate in environmental impact assessment processes. China requires Environmental Protection Bureaus to respond to public complaints about pollution with an inspection within two hours in urban areas and six hours in rural areas. The polluter pays principle is universally applied among the nations studied as key to effective enforcement of pollution control laws. The United States has developed a significant mechanism for assuring that violators do not obtain an economic benefit as a result of their non-compliance. US EPA has developed methods for determining that amount of benefit a polluter gained as a result of the violation and adds that amount to the penalty to assure that the penalty is greater than the illicit benefit gained through violating the law. The benefit can be measured by amount of money saved by not installing required equipment or by excess profits earned by failing to comply. 4 TABLE OF CONTENTS ACKNOWLEDGEMENTS ........................................................................................................... 2 EXECUTIVE SUMMARYTABLE OF CONTENTS ........................................................................... 3 TABLE OF CONTENTS ............................................................................................................. 5 INTEGRATIVE ANALYSIS OF BEST PRACTICES ........................................................................ 11 I. STATUS AND DESIGN ........................................................................................................ 11 1. National Environmental Protection Authority (NEPA) ............................................... 11 2. State Environmental Protection Authorities ................................................................ 17 II. FUNCTIONS AND OPERATIONS (INCLUDING ALLOCATION WITH STATES) ............................. 23 1. EIA ............................................................................................................................... 23 2. Promulgation of regulations, interpretation, and establishing guidance ...................... 30 3. Procedure for setting and revising standards ............................................................... 31 4. Permits and approvals .................................................................................................. 32 5. Research ....................................................................................................................... 32 6. Economic and other reviews of proposed legislation or regulations ........................... 33 7. Special programs such as compliance assistance for small and medium sized enterprises ........................................................................................................................ 34 8. Approaches to critically