Transcript Issues emerging from Indian experience on Environmental

Effect of Environmental
Measures on
International Trade
Indian Experience
Structure of the Presentation
Experience of leather, textiles and marine
sectors in India
• Issues emerging from Indian experience
• Issues in standard setting and assistance
for compliance
• Issues relating to International Rules
Experience of Textiles & Leather
Sectors
• Ban on Azo dyes, PCP, harmful amines,
etc.
• Proposal to ban another 300 dyes in EU
suspected to be carcinogenic
• Eco-labels in textiles based on LCA
• Insistence of buyers on eco-labels, ISO
standards
• Animal rights issues in Leather sector
Steps taken by
Government of India
• Banned 112 harmful Azo dyes
• Pro-active role played by Pollution Control
Boards in laying norms for effluent treatment
• Evolved eco-standards in textiles
• Information dissemination efforts
• Technology Upgradation Fund Scheme
• Strengthening testing labs
• Assisting textile units in securing ISO
certification
Effect on Indian Textiles Industry
• Dye substitutes are 2.5 times more expensive
• Azo free dyeing increases costs by 15 – 20%
• Increase in production costs, more due to very
high standards set by PCBs
• Higher cost of testing
• Shift to common ETP, however, problems for
dispersed plants
• Compliance generally by larger units while
smaller units shifted to other markets
Processed Foods, Spices, Tea
• Standards for aflatoxin, pesticides residue in spices
• Problem of aflatoxin levels in peanuts
• Difficulties in export of fresh fruits like mango due to
quarantine restrictions in Australia, Japan, etc.
• High pesticides residues (Ethion, Bicofol) in tea
• Government of India banned a number of pesticides like DDT,
BHC, Aldrin, Aldrox, etc.
• Standards differ from country to country
• Packaging regulations, ban on wooden boxes and jute bags
• Production is predominantly by small farmers and small
processors
Effect on Indian Industry
• Costs went up but a number of units complied with new
environmental measures
• Smaller units unable to meet environment requirements,
Shifted to domestic and other markets
• Lack of credit/funds to upgrade – through in some cases
like textiles and marine, Government introduced specific
scheme
• Lack of technical and managerial capability to upgrade,
particularly for smaller units
• Lack of consultancy firms/agencies/institutions who can
provide assistance
Issues in Standard Development
• Lack of International
product standards
environmental
• Transparency
• Involving exporting firms at an early stage
• Notification requirement in the early stage
• Participation of developing countries in
international
standard
setting
organizations
Issues in Standard Development
(Contd.)
• Environmental measures should be based on the
criteria of sound science
• Proportionality in environment benefits and costs in
compliance including for exporting firms
• Rio-Principle 11 provides that environmental standards
should reflect the environmental and developmental
context to which they apply. Standards applied by some
countries may be inappropriate and of unwarranted
economic and social cost to other countries, in
particular developing countries
Support for compliance
• Lack of price premium on eco-friendly products
• Assistance and subsidies are provided to local firms while
bringing new environmental measures. This places exporting
firms at a disadvantage.
• Bilateral and multilateral assistance for capacity building and
technical assistance to developing countries should be an
integral obligation when introducing new environmental
requirements
• Multilateral funding agencies need to earmark funds for this
purpose
• Assistance to development institutions/certification agencies
in exporting countries who could assist exporting firms in
compliance and certification process
Rules related issues for
environmental measures
• Labeling
• Precautionary approach in developing
standards
• Obligations relating to transparency,
notification, etc.
Labeling requirements
• Mandatory and voluntary schemes
• Large number of labeling schemes
• Lack of international standards
• Equivalence
• Fulfillment of stated environmental objectives
• Transparency and notification requirements
• Problems in certification
• Debate on npr-PPM
• Work Programme in CTE
Different approaches for precaution
in International agreements
• Rio-Principle 15 – Precautionary approach to be applied
where there are threats of serious or irreversible damage to
environment
• Biosafety Protocol – Lack of scientific certainty due to
insufficient sientific information regarding effects on biodiversity and human health should not prevent appropriate
action regarding import
• Article 5.7 of SPS Agreement – Provisional adoption of SPS
measures where scientific evidence is insufficient. Shall seek
additional information within a reasonable period of time.
• Article 2.2 of TBT Agreement – Risk assessment in technical
regulations should be based on available scientific and
technical information
Different approaches to
Precaution
• International
Environmental
Law
recognizes precautionary approach
only for serious or irreversible damage
to environment.
• Environmental
requirements
for
product standards should be based on
sound science and scientific risk
assessment.