Transcript http://www.cuts-international.org/documents/presentation.ppt

A Study of Ecolables in India and
European Union and Their Impact on
Export of Leather Products From India
Ghayur Alam
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Objectives-To study:
• The performance of Ecomark in India.
• The factors which affect the popularity of
Ecomark.
• What can be done to increase the popularity and
impact of Ecomark.
• EU’s Ecolable.
• The impact of EU’s Ecolable on export of leather
footwear from India.
• Linkages between sustainable development
and export from developing countries.
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The focus of the study is on leather products.
It is based on more than 50 interviews
with:
•Indian exporters;
•Importers in EU countries;
•Trade Associations in India and EU countries;
•Agencies in India and EU Responsible for
administering Ecolable;
•NGOs and Consumer groups.
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Ecolables-brief introduction
•market-based instruments
•increase consumer awareness
•shift consumer choice in favour of environmentally
friendly products
•induce industry to manufacture environmentally
friendly products.
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Ecolabel-criteria
i) product related. Limited to environmental impact
of product’s use and its disposal.
ii) process and production method (PPM).
•PPM based criteria Requires Life Cycle Assessment.
•They are more relevant for the promotion
of sustainable development
A number of Ecolables are in use. These include India’s
Ecomark, Germany’s Blue Angel, Nordic White Swan and
EU’s green flower
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Ecomark-India
Introduced in 1991
•Available to consumer goods only
•Similar to schemes in other countries
•Life cycle based criteria
•One major difference-linked to quality
•Bureau of Indian Standards is involved
•Available for 17 products, including
leather
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Ecomark-India
Impact
•Only 4 companies with Ecomark
•Three for paper. One for detergents
•None being used
•No impact
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Leather: Focus of the study
Why leather?
•Important source of employment and export
•employs more than 2.5 million people
•export more than US$ 1800 million
•Highly Polluting
•pollution load include salt, chrome
• inefficient use of resources, including water
and energy
•air emission
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Ecomark for leather
Introduced in 1991
Criteria
i. The manufacturer must have consent from the Pollution Control Board
ii. Must conform with the maximum limits of harmful substances.
ii. The material used for product packaging shall be recyclable or reusable
or biodegradable.
Not linked to quality characteristics
Impact
•no leather product with Ecomark
•no impact; no contribution to environmental
performance
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Why Ecomark has not been effective?
general reasons
•Lack of promotional efforts.
•Little consumer demand
•Industry not interested-do not see advantage
in the market place-concerned about brand dilution
•complaints of procedural complexities,
leading to cost and delays
leather specific reasons
• a majority of firms use old and inefficient technologies
• highly polluting
• a majority do not have consent from SPCBs. Not
eligible for Ecomark. (This implies that even if the leather producers were interested
in getting Ecomark, most of them would find it very difficult to meet its criteria.)
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Ecomark should be seen as part
of efforts to promote sustainable
production. It would be effective
only when there is an awareness
and demand for environmentally
friendly products and processes.
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EU’s Ecolable-Introduction
Established: 1992
Criteria based on cradle-to-grave approachtake into account all aspects of a product's life, from
its production and use to its eventual disposal.
Popularity limited to a small number of products
and countries.
Countries: most popular in Italy, Denmark and France.
Products: most popular in textile and paints/varnishes
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Number of ecolable according to countries
Country
Sweden
Greece
Spain
France
Denmark
Italy
Others
Total
Year
2001
9
9
12
17
18
13
10
88
2002
8
9
12
26
23
23
101
2003
11
11
13
30
31
34
20
150
Source: Flower News, various issues available at
http://europa.eu.int/comm/environment/ecolabel/news/flowernews_en.htm
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Reasons for low popularity
Similar to the reasons for the low
popularity of Ecomark in India
•Low Environmental consciousness among consumers
•lack of awareness of ecolable
•poor response from industry
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EU’s Ecolabel and Its Impact on exports from India
Two views:
1. Ecolables can discriminate against imports
from developing countries.
•Lack of transparency
•pressure from local stakeholders
•criteria based on life cycle analysis
•need for new and costly technology to meet EU
Ecolable norms
2. Developing countries can set up Sustainable
Production facilities, Take ecolable and increase
export to developed countries
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EU’s Ecolable and export of
leather footwear from India
EU Ecolable Criteria (footwear)
• significant reduction in COD (Chemical Oxygen Demand)
and chromium in effluent;
• non use of hazardous chemicals (azo dyes,PCP, TCP etc.)
• use of recycled material for packaging.
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Impact on India’s export would depends on:
i how important ecolables are in EU markets of leather footwear
ii. Will Indian firms be able to get Ecolable?
Evidence from India and EU:
• ecolables are not important in footwear market in EU
•ecolables have no impact on export from India
•environmental issues, in general, play small role
• importers are mainly concerned with banned chemicalsnot interested in the sustainability of production process
• social issues (working conditions, minimum wages,
child labour etc.) play greater role. Many large importers
have their own social norms. Small importers not concerned
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Future Scenario
• situation may change-Ecolables may become
important in footwear market as:
• EU companies adopting ESTs
• steps being taken to promote Ecolable
• large Indian exporters are beginning to focus
on higher end of the market
• if Ecolables become important, How would export
from India be affected?
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•Can Indian firms increase their exports by obtaining
EU’s Ecolable?
All Indian exporters already comply with the ban on
hazardous chemicals
•All exporters can use recycled material for packaging
•Main problem: high pollutant load in effluent
(high COD, chromium). Most firms lack technological
and financial resources to upgrade
• Not eligible for EU’s Ecolable and India’s Ecomark.
• Large firms have the capacity to meet the Ecolable criteria if they see
business advantage
• small firms are unlikely to take this route. They will continue to
cater to the lower end of the market, which is largely price driven.
• Sustainable production in not likely to emerge as an important
impetus to export from developing countries. Even if environmental
considerations acquire greater importance in the EU market, only a
handful of large firms will be in a position to take advantage.
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Conclusions
• are Ecolables effective instruments to promote
sustainable development?
• not very effective-especially in developing
countries such as India
• Many reasons• general lack of concern for environment.
• Low awareness of Ecolable schemes, such as
Ecomark in India
• consumers not prepared to pay more for products
with ecolable-companies not prepared to invest
in new technology
•lax enforcement of regulations
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Would adoption of sustainable production methods
promote India’s export of leather goods to EU?
• Present situation: environmental issues play little role
in consumer choice of leather footwear-price of primary
importance. Little link between sustainable production and
export potential.
• Future scenario: role of environmental issues, and
ecolables, may increase. Will this benefit exports from
India and other developing countries?
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Large exporters- yes (May be).
Large Indian firms have technical and financial resources.
If it makes business sense, they may invest in sustainable
production technologies, take ecolable and try to increase
their exports .
Small exporters-no.
Unlikely to meet the conditions to get Ecomark
and Ecolabels. Lack technical, managerial and
financial resources to set up sustainable production
facilities. Their exports are likely to remain restricted
to the lower end of the market.
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To conclude:
Ecolables have not been effective instruments to promote
sustainable development.
• Presently, there is little link between sustainable production
and export to EU market.
• If the situation changes and environmental issues begin to
play greater role in the market, Ecolable, could also become
important.
• The potential of sustainable production as a way of increasing
export to developed countries is small.
• A small number of large Indian firms may benefit by meeting
EU criteria and taking Ecolables. Small firms, however, do not
have resources to do this.
• The overall potential of using sustainable production to
increase exports is limited.
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