Partnership with the private sector : lessons from Batangas Bay, the Philippines

Fb__*~~~~~~~ GEE 21208 L ESSONSN OTE Novem er Encouraging private sector involvement in GEF projects was the topic of GEF Lessons Note No. 2, published earlier this year. This issue focuses on the experience in this area from Batangas Bay in the Philippines. The Batangas Bay Demonstration Project was part of the Regional Programme on Prevention and Management of Marine Pollution in the East Asian Seas, a UNDP/GEF project. While the specific focus of this project is on integrated coastal man- agement to address marine pollution problems, the lessons learned at Batangas Bay about building partnerships between the public and private sectors are applicable to the wide range of efforts to address global environmental issues. The GEF Lessons Notes series is aimed primarily at project designers, managers, and evalu- ators in GEF implementing and executing agencies. To make sure we are meeting your needs and providing the kind of information that is most useful to you, we invite your feedback on this and other editions of the Notes, and suggestions on how to improve them. Jarle Harstad GEF Senior Monitoring and Evaluation Coordinator PARTNERSHIP WITH THE PRIVATE SECTOR: LESSONS FROM BATANGAS BAY, THE PHILIPPINES In 1993, GEF and the United Nations Development Program (UNDP) approved a project to prevent and manage marine pollution in the East Asian Seas. Implemented by the International Maritime Organization with the cooperation of participating countries, the project aims to demonstrate the effectiveness of various approaches to integrated coastal management (ICM) in tackling marine pollution. Among the project's major activities was a demonstration project at Batangas Bay in the Philippines. The deepwater port at Batangas Bay is expected to become the nation's second largest within a few years. As development proceeds, the risk of degradation from land-based activities and oil and chemical spills from maritime operations and accidents increases. The bay is already lined with more than fifty industrial plants (from oil refining to food processing to ship building) and supports 1,000 fishermen. Industrial effluents, municipal sewage, and organic wastes from agri- culture are regularly discharged into the bay. Despite this, the bay is still in the relatively early stages of development. In addition, it has valuable environmental resources, such as coral reefs which attract thousands of tourists every year. The project's management strategy, therefore, focuses on the preventive aspects of ICM and emphasizes collaboration between the public and private sectors to anticipate waste management problems. The project has included the private sector as a stakeholder in framing major policies within the management process. It has also actively sought opportunities for developing private/public partnerships, particularly in the area of waste management. Responsibility for project activities was given to a newly-created Batangas Bay Region Environmental Protection Council. In addi- tion to members from the provincial government, municipal governments in the bay area, the Coast Guard, Ports Authority, and other government and nongovernmental organizations, the Council provided a seat to the private sector, represented by an industry-based NGO, the Batangas Coastal Resources Management Foundation (BCRMF). The involvement of the FILE COPY  G E F L e s s o n s N o t e s BCRMF has been a major factor in the success of project efforts to date. As a member of the Batangas Bay Council, the Foundation has: * Helped develop management and action plans to address pollution in the region * Coordinated the signature of voluntary agreements between industries and cen- tral and local governments on waste reduction * Served as the vehicle for providing oil spill equipment and industry involvement in response exercises * Participated in pollution management audits and a program to monitor marine pollution. Lessons Learned at Batangas Bay Although the specific activities carried out at Batangas Bay relate to prevention and management of pollution of marine resources, the lessons learned about ways to build partnerships with the private sector apply to other projects designed to address global environmental problems. Three lessons especially stand out: LESSON: Projects need to create a forum to bring the private sector into the management structure. This promotes dialogue with other stakeholders, particu- larly different levels of government. The Batangas Bay Region Environmental Protection Council provided an important forum through which stakeholders could together address environmental concerns. The Council was given authority to oversee the formulation, adoption, implementation, and policy direction of a strategic environmental management plan for the Batangas Bay region and related actions. It was empowered to make decisions. It was not just an infor- mal or advisory body. Membership on the Council was particularly crucial to private sector involvement. It provided an avenue for industry participation in pollution man- agement other than being a regulated entity or a polluter, and for industry and govern- ment to work together rather than to view each other as adversaries. LESSON: Providing a forum is, by itself, not enough. The private sector needs a range of incentives and enabling conditions to participate actively. Making an institution like the Batangas Bay Council work has not been easy. Not only must it provide a forum for discussion and negotiation, but participants must believe that their point of view will be taken seriously. Project participants have had to build a rela- tionship of trust to work successfully together. They have had to overcome public dis- trust at having industry involved in policy making, as well as industry's lack of confi- dence in the capacity of government to regulate fairly and equitably among and across sectors. By devolving powers to the provincial Environment and Natural Resources Office, the national government allowed government at all levels to work through the Batangas Bay Council. This led to a decision-making process through which clear and broadly accept- ed policies were instituted. From the perspective of the private sector, it gave them an active stake in finding solutions to the region's environmental problems. It allowed them to influence the long-term, rather than to leave it to the regulatory system to set com- pliance schedules and goals. The Council provided the incentive of sitting with others, particularly government agencies, to shape policies that affect private industries. For example, through its seat on the Council, the Foundation actively participated in devel- oping the Batangas coastal environmental profile, the strategic environmental manage- ment plan, and the integrated waste management action plan. Another incentive encouraging the participation of private companies in the project was the opportunity to negotiate voluntary agreements with the national Department of 2  G E F L e s s o n s N o t e s Environment and Natural Resources, its provincial counterpart, and the City of Batangas. These agreements provide industries a grace period before pollution emission standards are strictly enforced. In return, each industry has agreed to a targeted reduction in hazardous waste, to implement a pollution management audit, and to develop and implement by the year 2000 a follow-on work plan and schedule for achieving the identified goals. Unlike other voluntary agreements in the region, the Batangas Bay initiative is not just focused on industry's role, but also the roles and responsibilities of both the public and private sectors in addressing a common environmental problem, voluntarily and in partnership with each other. Each signatory must fulfill its identified role and action in order to allow others to implement theirs. LESSON: The private sector itself needs a vehicle through which to channel its par- ticipation in project management structures. The Foundation gave the private sector an opportunity to become involved in the project as a group. Government preferred to work with an association of private industries rather than with individual businesses. This reduced the appearances that a single company may be receiving special treatment. It also provided a means for the broader concerns of the private sector to be expressed and for the private sector's positions to gain legitimacy. The BCRMF was established in 1991 through the initiatives of the Batangas governor and five of the largest private companies in the region. Its membership has since grown to include 23 businesses. Initially, the Foundation carried out public awareness events, but had no clear strategy or program to contribute to or influence more broadly coastal resources management. The selection of Batangas Bay as a demonstration site for the East Asian Seas project provided the opportunity to "revitalize" the Foundation, and to serve as a channel for private sector contributions to pollution prevention and management issues in the region. Beyond serving as the representative of industry views in the Council, the Foundation plays three key roles that have contributed to successful private sector involvement in the project. First, it coordinated industry participation in project activities as the implementing agency for several measures identified in the integrated waste management action plan. These included (a) the inventory of hazardous waste sources, storage, treatment, recycling, and disposal facilities in the Batangas Bay region; (b) development of a pool of expertise among industries through training on pollution management appraisals; (c) implementation of an industrial hazardous waste minimization program; (d) identification and evaluation of transitional technologies, practices, and facilities for off-site hazardous waste processing and disposal; and (e) preparation of a proposal concerning a hazardous waste storage, treat- ment, and disposal facility for the region and, eventually, joint ventures for these facilities and services. Second, the Foundation serves as a venue for raising environmental concerns and sharing of best practices among its member companies. It has also been important that several of the key members of the Foundation are multi-national corporations that have stan- dards with which they must comply, often greater awareness of globally-acceptable indus- try practices, and some of the technical, financial, and human resources needed to reach these standards. Third, it has reached out to other companies within the region and invited them to join its efforts and be part of the Foundation. Partially because of the BCRMF's example, the Batangas Chamber of Commerce and Industry, which includes smaller and medium industries and businesses, has also begun efforts similar to the Foundation. For Further Information This issue of GEF Lessons Notes was based largely on three documents: (1) The Study of GEF Project Lessons, conducted by Resource Futures International in 1997; (2) a (draft) case study entitled "Private Sector Involvement in Coastal Management" written by N. Steven Nakashima for UNDP's Strategic Initiative for Ocean and Coastal Management 3  G E F L e s s o n s N o t e s (SIOCAM) project; and (3) a paper by Frederick Contreras entitled "The BCRMF and Its Role in the Environmental Management of Batangas Bay, Philippines", prepared for the Regional Workshop on Partnerships in the Application of Integrated Coastal Management held in November 1997. The Study of GEF Project Lessons may be obtained from the GEF Secretariat (see below). For Mr. Nakashima's paper, or for further information on SIOCAM, contact Philip Reynolds, Chief, Water Program, Sustainable Energy and Environment Division, United Nations Development Program, 1 UN Plaza, Room FF-1036, New York, NY 10017, or by email at philip.reynolds@undp.org. For Mr. Contreras's paper, or for further information about the Regional Programme on Prevention and Management of Marine Pollution in the East Asian Seas and/or the Batangas Bay Demonstration Project, contact Dr. Chua Thia-Eng, Regional Programme Manager, at P.O. Box 2502, Quezon City 1165 Philippines, or by email at info@imo.org.ph. The project website is http.:/www. imo. org.ph. FEEDBACK AND SUGGESTIONS We hope this series will be a catalyst for an on-going dialogue on what is working, what is not, and how people involved in the GEF have found solutions to challenges that face all of us. We would like your reactions to this edition of GEF Lessons Notes, and your response to the questions listed below. We would also like your suggestions of topics that would be of interest to you. Please send us an email at geflessons@gefweb.org-or contact us at the coordinates listed below to let us know: * Did you find this edition of GEF Lessons Notes helpful to you in your work? If not, what kind of information would have been more useful? * What are the implications of this experience for your activities? * What obstacles do you see in carrying them out? * What additional experience or examples can you share related to these lessons? * What else would you like to know about this or similar activities? * How can we meet your needs better in future editions of GEF Lessons Notes? OTHER GEF MONITORING AND EVALUATION PUBLICATIONS OF INTEREST Earlier issues of GEF Lessons Notes can be obtained from the GEF website (www.gefweb.org) or from the GEF Secretariat monitoring and evaluation team. If you would like to be on the mailing list for regular receipt of GEF Lessons Notes, please con- [ _ tact our email address-geflessons@gefweb.org, or the address below. Please let us know whether you wish to receive an electronic version or a hard copy, and which language (English, French, or Spanish) you would prefer. The Summary Report of the Study of GEF Project Lessons (January 1998) may be obtained by writing us or from the GEF's website. In addition, a report of the recently-com- pleted Evaluation of Experience with Conservation Trust Funds is now available in English on the website. Key findings and lessons learned from the evaluation will be featured in future numbers of GEF Lessons Notes and other publications. The report will be printed and translated into French and Spanish in early 1999. GEF Secretariat Monitoring and Evaluation Program 1818 H Street, NW Telephone: 202-458-7387 Washington, DC 20433 Fax: 202-522-3240 email: geflessons@gefweb.org 4