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close this bookBusiness Responsibility for Environmental Protection in Developing Countries - Report on the International Workshop, Heredia, Costa Rica, 22-24 September 1997 (UNRISD, 1998, 56 p.)
close this folderPAPER ABSTRACTS AND SUMMARIES
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The Greening of Business in Mexico

David Barkin

In Mexico, the business climate for environmental protection might be characterized as “very permissive”. There is substantial corporate activity in waste collection and processing, resource management, transportation and power generation, but it generally involves “end of the pipe” approaches to reduce waste streams, rather than more thorough-going restructuring. An area that has been virtually neglected until recently is workplace health and safety. The accelerated process of international economic integration and changes in the development model, which emphasize the export of non-traditional products, have led to a redeployment of production from the central valley of Mexico City and surrounding areas to the northern part of the country. Given the lack of adequate infrastructure and absence of any planning process in this region, environmental problems have been aggravated. Moreover, the situation is unlikely to improve in the near term, given the shortage of fiscal revenues in the major cities along the border with the United States, which has resulted from the generous tax incentives used to attract private enterprise.

The new economic strategy has compounded the problem of environmental planning and remediation. The changing composition of industries is evolving towards sectors where more effluents are generated per million dollars of production. In addition, with the manifold increase in transport volume as a result of burgeoning trade within North America, contamination from truck and plane traffic is also rising dramatically, especially in industrial and commercial centres. Similarly, demand for water is growing rapidly and becoming a source of contention, especially in the northern border regions where agriculture and livestock depend on the extensive irrigation systems built during recent decades. Moves to reduce demands with technological innovations are thwarted by the lack of a financing capacity.

However, in a number of areas market-driven demands have led to the incorporation of environmental considerations directly into production. In agriculture and forestry, for example, the opportunities created for organically produced products and wood harvested sustainably have motivated many groups to search for ways to qualify for certification. There is also an incipient movement to create alternative forms of “responsible tourism” that would be more benign to the environment. Many larger firms have implemented processes which grant them recognition as a “clean industry” by the ministry in charge of environmental affairs (SEMARNAP) and to qualify for ISO 14000 status, as part of the private sector’s international self-regulating process. Investments in this area have concentrated on reducing emissions, and on increasing efficiency in the use of raw materials and energy during production, by adopting new eco-efficient technologies, adjusting processes to eliminate waste and increasing recycling through collection and reprocessing. Such efforts have led to the creation of a number of domestic organizations that are promoting improvements in private sector performance. In general, these have been successful in pre-empting attempts by environmental non-government organizations to increase the intervention of the government regulatory apparatus.

With the creation of the Commission on Environmental Cooperation (CEC) and the Border Environmental Consultative Commission (BECC), products of the environmental side-agreement of the North American Free Trade Agreement (NAFTA), the institutional capacity to deal with environmental problems has increased. In spite of an initial cool reception by the private sector, these initiatives have been successful in stimulating private sector responses, notably in the search for ways to implement technologies that can both be environmentally friendly and cost effective. For example, following the massive killing of migratory birds in central Mexico, the CEC sponsored a study that recommended the introduction of very profitable modifications in the leather tanning industry to reduce contamination through recovery and reuse of spent chemicals. Another project carried out by the recently created “Center for Clean Production” at the National Polytechnic Institute, with assistance from the United Nations Industrial Development Organization, recommended similar modifications in various metal plating industries.

Perhaps the greatest challenge facing both industry and government in Mexico is to develop mechanisms through which the price system will encourage a better use of existing resources and reduce negative environmental and social impacts. The present approach seeks to align domestic prices more closely with international prices for tradable resources and commodities. This is clearly an inadequate solution, given the very different conditions prevailing in Mexico. Furthermore, the dramatic reduction of real wages (more than 50 per cent over the past 20 years) has provoked a deterioration of the quality of life that has had a devastating impact on the environment. Finally, the issue of how to distribute important “common property” resources (water, air, communal lands and forests) and guarantee their quality is a vexing matter that has pitted traditional stakeholders against new corporate claimants on an unequal battleground where the rules of engagement are yet to be determined. Without confronting these problems effectively, both producers and society are condemned to continue their inadequate relationship with their environment.

The corporate community’s attempts to participate actively in the debate about environmental responsibility are very significant. At the same time, the growing awareness of the importance of environmental issues among ever widening circles of society has led environmental organizations to become not just more vocal, but also more active in confronting the problems. Some of this activity takes the form of direct challenges, but generally remains at the level of discussion and negotiation. It is clear that a large distance separates corporate concerns for the short-term interests of their businesses and society’s concerns about community health and safety. Budgetary limitations and a new predisposition to allow the private sector as great a scope for action as possible have led the government to define its focus more narrowly, leaving the broader issues of environmental quality to the realm of academic research and political discourse.