Bolivia - Sectoral environmental assessment of the mining and industrial (manufacturing) sectors (Vol. 1 of 4)

BOLXVIXA UDCTRiL ENTIRONMNTAL 181meSSNw 1uIOmY 07 .... ..... TEN EXZINO AND INDUSTRIAL (NaNUIACYURING) SBCTORS SEC.RETARIA NACIONAL DE MEDIO AMBIENTE MINISTERIO DE MINERIA Y METALURGIA May 1995  I. BACKGROUND 1. This is the summary of the environmental assessment (EA) of the mining and industrial (mauwfacturing) sectors in Bolivia. TMis EA was prepared by Swedish Environmental Systems to lay the foundations for more effective environmental planning and manaement of thes sectors in Bolivia. It presents an overall dignosis of environmental conditions, identifies mining and industrial sectors' priorities for an environmental mitigtion plan, and recommeds envimental action items. 2. The EA served as the basis for preparing the proposed Bolivia - Environment, Industry and Mining Project to be supported by IDA. The Project would: (1) support the implementation and refinement of a regulatory framework to assure that privately-led mining and industrial activities grow in a more sustainable fashion; and (ii) help remediate pellution stocks for which the Govermnent will accept enviromental liability, including as a result of agreements reached with private investors in the mining and hydrocarbons sectors under the Capitalization Program (which wDI involve private participation). Environmental audits for major mining and hydrocarbon properties are either presendy under way or will be commissioned shortly, and are expected to be completed in 1995. They will yield information to inform the allocation of environmental liabilities between the parties to divestment transactions, and define enterprise-specific remediation plans, including for those properties which may be closed. 3. The Project would include components as follows: (a) Studies to Support the Regulatory Framework. The Project would finance two studies aimed at improving environmental management, both at the national level as well as in the important regions of Santa Cruz, Cochabamba and El Alto (La Paz). The studies would cover two types of tasks. First, tasks aimed at basic data collection would: (i) develop data tD identify mines and industries with significant environmental impacts; Cid) develop baseline ambient water quality data for priority surface and subterranean water bodies; and (iii) evaluate the potential costs and benefits of pollution prevention measures in firms in the leather-tanning, meat, and brick-making industries in Cochabamba, sugar refineries and distilleries in Santa Cnrz, and a several cement plants. Second, tasks aimed at policy development and implementation would: C') assist MSDE and the Secretariats of Mining and Industry to develop and implement (through training) policies and procedures to satisfy ETA requirements for investments in the respective sectors; (li) design a system of incentives to encourage adoption of improved environmental practices at the firm level; Ciii) develop a system to finance remediation of pollution stocks on a sustainable basis; (iv) identify hazardous waste sources, characterize hazardous wastes, and design a regulatory framework to manage them; (v) review and update ambient quality and discharge standards for dLe industrial and mining sectors; (vi) develop a 1  national strategy for envirommental monitoring and enforcement; and (vii) develop strategies to communicate environmental risks factually to the public. Studies would Include training components for local staff, to maximize technology transfer. One important output from the various studies would be a set of agreed action plans for Santa Cmz, Cochabamba and El Alto, which could form the bash for fature environmental improvement projects in each region. Program. under this component are estimated to cost US$4.0 million. (b) Laboratory Upgrding. The Project would impleomet a program to upgrade the quality of laboratory testing services in Bolivia, to fostr developmunt of a credible environmental standards-setting and monitoring system. The Project would support a range of activities, acceptable to IDA, to be proposed by beneficiaries, namely Instituto de Investigaciones Geologicas (KG) and the Instituto de Ecologia (IE) at the University Mayor de San Andres, Instituto Boliviano de Normalizacion y Calidad (IBNORCA)), or MSDE. Activities would include: (i) consultdg services, study tours, and short training courses sponsored by MSDE and/or IMNORCA to define and implement the policy and institutional framework within which credible laboratory-based environmental testing services could develop; (ii) a study sponsored by MSDE to inventory and classify national laboratories; (iii) market surveys sponsored by MSDE, IG and/or IE to inform planning for development of analytical and sampling services related to enviromnental testing in Bolivia; (iv) participation in proficiency testing programs with reputed laboratories to enable IG and IE to determine the relative level of their capabilities; (v) stdies related to the international accreditation of IC and/or IE; (vi) preparation of feasibility studies, business plans, and related facility improvement programs for IG, IE, or BNORCA; (vii) training activities sponsored by 1G, EB, IBNORCA, or MSDE to improve the quality of laboratory operadons or field sampling methods in Bolivia; (viii) capital improvement programs for IG, JE, or IMNORCA including services, goods and civil works. Such programs would need to be justified on the basis of feasibility studies and sound business plans, and be linked to the improvement of environmental testing services in Bolivia; and (ix) activities sponsored by MSDE, KB, IG, or IMNORCA to develop a professional association of laboratories in Bolivia. The program is estimated to cost US$2.5 million. A core program of activities to be carried out by MSDE under items (i), (ii), and Ciii) would be executed under the Prject on a priority basis, to establish a decision-making framework for laboratory development in Bolivia. (c) Remediation Investments. The Project would include a component tO finance eligible subprojects for environmental remediation which the State is committed to make in the mining and hydrocarbons sectors, including those resulting from the Capitalization Program. An eligible subproject would be a remediation investment in either sector which promised adequate economic returns to human health, economic indrastructure, or ecosystems, on the basis of risk-based eligibility criteria tailored to the sector concerned. Subprojects would be identfied on the basis of information generated by environmental audits. The tal cost of eligible subprojects under the Project is estimated at US$31.0 million. The ultimate 2  scale of all Project components will depend upon the aivailability of adequate financing. II. BASELINE DATA 3. Geography: Bolivia, with a surface ara of 1,098,S80 kin2, comprises mainly of the Andean region, sub-Andean region, and the eastern lowlands. Becase of the great diversity in topography and physiography, a wide range of climatic conditions are found in the country, ranging from the dry, cold weather and sparse vegetation of the Altiplano to the tropical rain forests of the easterm lowlands. 4. Geology and Mneal Resoures: 'Me major mineral deposits in Bolivia occur in bedrock in the mountains of the Altiplano and contain a wide variety of metallic elemants, including tin, lead, zinc, silver, antimony, tungsten, copper, and bismuth. The veins are generally narrow and steeply dipping. These characteristics make the deposits less amenable to large scale exploitation. In the vast Amazon area, extensive exploitation for alluvial gold is carried out in a number of places. Extraction methods vary from artisanal pnnming to underground exploration to large scale dredging operations. 5. Potential areas for future mining represent about 30% of Bolivia's scirface. Most of the Andes, particularly the areas of Precambrian bedrock in easter Bolivia, are characterized by a high density of mineral occurrences with a great variety of metals and good possibilities for finding new deposits. Also, very extensive potential mining areas for aliuvial gold in the Amazon are still untouched. 6. Hydrology and Water Resources: The hydrological potential of Bolivia (about 317,600 million m3/year) is distributed among the Amazon Basin, Rfo de la tlata Basin, the Closed Basin or Altiplano. Many areas with intensive economic activities coincide with areas where water resources are very scarce. This is true for the entire Altiplano Basin as well as the region of Cochabamba. There is limited data on groundwater resources in Bolivia because most areas rely on surface water. 7. Areas of Ecological Sensitivity: Currenty, 43 areas have been declared nature reserves in Bolivia. The selection criteria for reserve areas are currently under review. 8. Presently, the mining and industrial sectors seem to pose relatively little threat to the primnary areas of high ecological sensitivity, although the baseline data is very limited. The most immediate concern is alluvial gold mining in the Amazon. Also, industrial activity in Santa Cruz and Cochabamba are of potential concem because these areas also drain into the Amazon. Another threatened ecosystem is the closed Altiplano Basin (icluding Lake Titcaca). 3  9. DemographIcs and Soclo-Economic Conditdons: Bolivia is one of the poorest countries in Latin America, with a per capita income of US$700. high infant mortality rate (92 per thousand), and low access to safe water (47% of the population) and adequate sanitation (35% of the populatlon). 10. Bolivia has a population of 6.3 million (1992 census). About 45% of its popuation lives in the Andean Departtnents of La Paz, Oruro, and Potosi. The main growth area is the Deparnent of Santa Cruz, which has expanded from about 15% of the population in 1976 to about 21% in 1992; this increa pardy reflects the migration from the traditional mining areas to the Eastern Lowlands. Tho percentage of Bolivians living in urban areas grew from about 42% in 1976 to about 58% in 1992. 11. The Bolivian population consists of the indigenous and Spanish components. Its distribution, evolution and mixing has been, and still is, influenced by geographical, social, and economic factors. The Aymaras and the Quechuas, who inhabit the Altiplano, the Cordillera Oriental and the eastem valleys, and at present, tirough the migrations of the last ten years, also the eastern part of the oDuntry. The Andean population, traditionally makdng its living from faming and mining, has been profoundly affected by the decline in the economy, which has substantially changed the socio- economic structure and obliged people to look for new alternatives. One of these factors was the massive dismissal of workers at the Comibol mines, which obliged many miners to *relocate" themselves into cooperatives where working conditions are primitive. Another alternative of these unemployed workers was to move towards the northeast and integrate themselves under precarious conditions in the alluvial gold exploitations of the Amazon Basin. SL POLICY, LEGAL AND IIUSTITTIONAL FRAMEWORK 12. Economic Policy: The New Economic Policy, established in 1985, initiated a process of liberalizing the Bolivian economy through inter alia emphasis on expors and elimination of an extensive net of subsidies. This policy has been developed farther in the National Development Strategy, which stresses the importance of the private sector in economic, labor, and management maters (and a corresponding shrinking of govermnent's role in these fields), plus increased decentralization and modernization of the State. 13. Environmental Podicies, Laws and Institutions: In 1992, Bolivia adopted a new umbrella environmental law, which advocates sustainable development and the use of economic incentives. As this law is general and unclear about institutional responsibilities, addidonal laws and regulations are being prepared. Bolivia has also prepared a National Environmental Action Plan. 4  14. The 1992 law created the National Secretariat for the Enviromnent (SENMA), an environmental coordinating body that has the status of a ministry. It also created regional counterparts in each of the nine departments of SENMA. The law also called for all ministries to establish environmental units. ' 15. Sanitary and industrial wastewater discharge regulations exist, although, in general, they are not enforced strictly. New legislation on environmental impact assessment (EIA), environmental quality, water, forestry, and biodiversity is being drafted. Legislation on land use planing is expected to be prepared soon. 16. Environmental monitoring is limited to some communal wastewater treatment plants and certain well-run industries. Systematic monitoring by authorities is virtually nonexistent and regional surveys are only carried out sporadically in connection with intenational cooperation projects. 17. Bolivia has many laboratories that are reasonably well-equipped. However, qualified staff are scarce, quality assurance is low, and operation and maintenance of laboratory facilities are inadequate. This is due to a lack of resources for research and a (historically) poor market for analytical services. 18. Human resource capabilities in the environmental area is currently limited in Bolivia, although there is a good core base of talent upon which to build. Some expertise is available in various government departments and the larger, better financed private sector companies. A large number of non- govermental organizations (NGOs) are active in the environmental area, and serve as the coordinators of multi-disciplinary studies financed by foreign sources and conducted by Bolivian universities and state organizations. 19. Occupaional Health and Safety: Bolivia has a fairly elaborate legal and institutional framework for protecting workers' health and safety. However, awareness of or compliance with these safeguards varies widely. Neither the Government of Bolivia nor foreign assistance organizations appear to give this area sufficient priority. IV. ASSESSMENT OF THE MN1G SECTOR 1 The Government which came to power in 1993 has further emphasized environmental management by establishing a Ministry of Sustainable Development and Environment (MSDE). MSDE subsumed SENMA and the Planning Ministry, and is charged with formulating and implementing national policies to encourage sustainable development. 5  20. History of Mining: Mining has dominated industrial activity in Bolivia sinw 16th century. Some of the first deposits discovered are still being exploited. There is considerable potential for future mining both in the Andes (hard rockl mining) and In the Amazon Basin (alluvi gold mining). 2!. Mineral producdon In Bolivia dedcined from a peak of USS 756 million In gross metal value in 1980 to a low of USS 139 million in 1936 and then incL-ased to USS 367 million in 1991. In spite of all problems, inclnding the present low metal quotations on the world market, the export of the irining sector oflicimily amounted to more than 40% of the nation's total export value in 1991. 22. Hard Rock Mining: Tn 1952, the Government nationalized all major private mii.es under the new Corporacifn Minera do Bolivia (Comibol). Thus, the privat: sector was reduced to a number of smaller operations and bumlSscale mining. This private sector has come to be subdivided into Medium Mining and Small Mining, which nowadays has surpassed Comibol in size of individual operations as well as total output. 23. State Midng (Comibol). Comibol was formed in 1952, but went into technical bankruptcy in 1985 as a result of mismanagement and falling metal prices. All mines were closed, temporarily or permanently, and a progran fbr restructuning and private pardcipation is now being implemented with the support of the World Bank. Over the next two years, all mines that are not going to be closed permanenty will be offered for private picipatio*. 24. Medium Mning (Minerfa Median). Private mining companies which meet certain criteria regarding production, finncing and management are by law affiliated with the Association of Medium Miners (Asociaci6n Nacional de Mieros Medianos). With the weakening of Comibol, this group is now the main force within Bolivian industrial mining, although with a smaller number of people than Comibol. With the present low metal prices, only a very few of these companies are profitable. Environmental awareness among various companies varies greatly. In general, companies with heavy foreign involvement are more environmentally conscious. 25. Small Mining (Minerfa Chica). This is a group of small enterprises ranging from very small family-based operations to industrial operations treating up to 200 tons of ore per day. Many of them are very small and do not differ substantially from the cooperatives (discussed below) in terms of organization or wvork methods. The total number of employed persons within this sector amounts to about 7,000, with an additional 3,000 quarrying for industrial minerals. This is less than one quarter of what it was ten years ago. 26. Cooperatives (Cooperativa). There are groups of miners who work on small deposits or leftovers in closed mines. The total nunber of such 6  workers is many times larger than that of miners employed by the industry. These informal miners are most often memben of a "cooperative," a loose usociation of miners (and their families) that mainly serves the purpose of acquiring the mining permit and selling the product. 27. Usually, the 'cooperativa" mining takes place with complete disregard for occupational health and safety as well as the onviroment. Although the work conditions are primitive and dangerous, the workers are generally unaware of the grave risks to their health and future well-being. In fact, a significant number of workers In this sector are content with their situation as the total family income may be better than that from a "normal" job. 28. This sector will only disappear when the accessible mineralizations are exhausted or through the development of altenative occupations. Until then, measures will have to be sought which can alleviate the worst aspects of the situation without subsidizing or otherwise prolonging these circumstances. 29. Alluvial Gold Mning: Alluvial gold mining is the exploitation of gold that occurs as dispersed grains in the loose overburden or in poorly cDnsolidated sediments. Intensive exploitation of gold from alluvW deposits occurs in the Amazon Basin along the Tipuani and adjoining rivers draining the Eastern Cordilera, and the Madera and Madre de Dios Rivers close to the frontier with Brazil in the mnost northeastern part of Bolivia. 30. Mning areas largely lack basic infrastructure and are generally outsite public control. Environmental quality and workers' health and safety are unknown concepts. Serious accidents are very common and health services are rudimentary. 31. - A particular concern of alluvial gold mining is associated with the discharge of mercury to the environment through mercury condensation during recuperation of gold from the amalgam. Other concerns include degradation of the landscape by dredging, diversion of rivers, and cutting of trees. 32. National Porides, Laws and Institutions: Tle recendy amended mining code has almost no environmental provisions. Most mining activities are supervised by the Mmisty of Mines and Metallurgy (MMM). But, allocation of exploration or exploitation rights (and permits) is carried out by the Superintendency of Mines, which is part of the separate Court of Mining. MMM has established an Environment Unit and has begun to draft regulations. 33. Mining and Environment: Most mining in Bolivia occurs in mountainous areas where there is very little alternative use of resources. Besides preservation of natural resources, there are other competing interests in most places such as small-scale farming, severe conflicts between mining 7  and civil life Oike in Potosi and Oruro), threats to the fish Oike in Lake Poopo), and contamnhation of drinking water from abandoned tailings Oike In La Paz). Another major concern is the well-being of miners and their families. 34. Bolivian mining has caused, and continues to cause, a major negaive impact on the natural as well as human environment. However, data on specific impacts tend to be scattered and not well organized. The major Impacts Include: (a) consumption of scarce or depletable natural resources, (b) transformation of landscape, (c) contamination of surface waters, (d) accumulation of solid wastes, (e) emissions of dust and gases, and (f) occupational health and safety hazards. 35. Th mining industry consumes about 31.5 million m of water each year. This represents about 2% of the total water resources available in the Altiplano, where the great majority of the mines are located. Although this may seem a modest percentage, much competition for scarce water occurs in many mining areas. In processing plants, recycle water averages only 10 to 20%. 36. Effluents from mining operations threaten flora and fauna. They also reduce the water quality for drinking, agriculture and recreation, and cause material losses (e.g. metal pipe corrosion). Mine waters at ten different mines were found to exhibit heavy metal (e.g., copper, cadmium, arsenic, lead and zinc) concentrations ten to one hundred times greater than the discharge standards in industrialized countries. Similar results were obtained for wastewater discharges from 20 beneficiation plants. In addition, process chemicals (e.g. xanthates and cyanides) were observed in these discharges. Furthermore, inadequate management or lack of tailing ponds results in the discharge of 30-50% of all wastewaters to the environment. Another major problem is the "scid mine drainage," caused by the oxidation of sulfides in tailings and waste rock, and the subsequent formation of acid and heavy metal-rich solutions through leaching by rain water. 37. About one half of the present annual solid waste production (5 million tons) is discharged to tailings ponds of atisfactory construction and management. The remaining industrial mining operations will have to be equipped with such facilities at an estimated cost of USS 6.5 million. Reclamation of old tailings (about 104 million tons) requires US$ 72.S miflion. 38. Mercury discharge to the environment is a major concern associated with alluvial gold mining in the Amazon Basin. It is difficult to quantify mercury contamination because of the uncontrolled exploitation and uncertainties about the extent of activities and rate of gold production. This discharge accumulates in fish and may poison the local population. Alluvial mining, particularly if it involves dredging, also results in land degradation. 8  39. Recent environmental trends in the mining sector are: (a) Increased use of toxic process reagents (e.g. xanthates and cyanides) with the shift from tin mining to lead, zinc, and silver mining: (b) decline of pollution control Investments caused by recession; (c) surge of innumerable now small-scale and anal operations causing social, hygiene-related, and enviromnontal problems that are outside of any public or other control; (d) cloed operations usually left without any type of dcan-up or land reclamation, often resulting in acid drainage and other problems and attracting disorderly operations by *cooperativistasm; (e) prmximity of some mining reas to urban areas (in some caues cities that have grown up aound mining) presenting serious public hazards; and (f) arrival of some foreign companies with technical and environmental expertise in the Bolivian mining sector. 40. The following general observations can be made about the future of mining ventures and their environmental impacts: a. For the foreseeable future, the focus of conventional mining in Bolivia will continue to be in the Altiplano and, to a large extent, in previous mining areas. The needed environmental improvements for such operations are reasonably well known and it can be assumed that, with the introduction of new policies and techniques, the problems can be managed in a satisfactory way. It may even happen that clean-up operations in certain old mining areas can be combined with continued or reopened activities. It is quite probable that large bulk mining in open pits will replace underground, selective mining in some areas. b. New possible areas for mining in the eastern part of the country (the Frecambrian Shield) could present new problems and possible conflicts wiih farniing and other interests. In general, these areas do not coincide with areas of ecological sensitivity and nature reserves. However, as explained above, the real extent of possible conflicts cannot be evaluated until at least basic information about new deposit is provided. Exploitation of mineral deposits in nature reserves should be legally prohibited; in this context, it is important to define clearly the boundaries of nature reserves. c. Alluvial gold mining presents the above-mentioned problems. The current exploitation areas will remain for the near future. However, one cannot totally exclude the possibility of finding new deposits in other parts of the Amazon Basin, resulting in the spread of contamination and destruction of new areas. An extensive inventory of all present alluvial operations, with projections for future development and its environmental consequences, is urgently needed. 41. Occupational Health and Safety: The mining sector is estimated to employ 60,000 to 80,000 people, about 15% of them in industrial operations and 85% in semi-mechanized or artisanal activities. Working conditions 9  within the industrial sector range from good to poor, with the larger private companies performing best. Conditions In state mines are deteriorating due to deficient management and inadequate resources. For example, it Is suspoctd that the serious occupational hea-th impacts of mining operations at Comibol (11% of workes having silicosis) still persists. Activities within the small-e and tisanl uctors are charactrized by hazardous haalth and sfety conditions and a general lack of formal employment rights or social Insurance. The potential poisoning threat posed by the use of mercury In alluvial gold mining is a particular concern. 42. Social Impacts: Tne exportation of raw materials Is Bolivia's most important surce of forcign exchanp. This economic structure makes the country very vulnerable to fluctuations In the prices of raw materials on the international market. Thus, the decrease in the price of tin during the last decade has caused a drastic reduction in mine production and given rise to a social upheaval caused by mine closures and unemployment of thousands of workers, plus a general economic recession. 43. From the nationalization of the mines in 1952 unti 1985, Comibol played a findamental role in the social as well as the economic aspects of Bolivian mining. This power generated an excessively large public sector - a situation that has caused major social and economic distortions. Following the introduction of Bolivia's new economic policy in 1985, Comibol's employees were reduced from more than 30,000 to about 6.000. Many unemployed miners went to large cities, while others moved to the informal mining sector or the alluvial gold fields of the Amazon Basin. 44. The shift to a free economy and the coming privatization of Comibol are generating social problems that many miners are not equipped to handle. Instead of being part of a paternalistic system, they now find themselves salaried workers in the private sector or unemployed. Trade unions have been quick to resort to violence to generate political pressure. These tensions have created a critical situation with no clear solution. However, building up the private sector in mining could eventually offer one positive route out of the cycle of unemployment and underemployment. 45. Cooperatives and artisanal mining have grown substanially since 1985 and will increase even more as Comibol begins leasing some of its holdings to cooperatives as part of the privatization process. Tbis situation constitutes a social emergency of such magnitude and gravity that it has to be regarded as the most critical social problem in Bolivian mining today. 46. Mining changed the typical values of individual ownership, experience and commitments to the land of many Andean communities. This process beg as farmers shifted their main occupation to mining, and accelerated as these miners were later obliged to sell or abandon their land, either temporarily or permanently, and often caused the break-up of the core family. The woman's role changed from farming as a "compaiierap to 10  pursuing activities in the Informal urban sector. In some cases, this meant commuting Into town each day to work as a street merchant; at other times, movina to the city with part of the family. 47. Most of the people Involved In alluvial gold mining In the Amazon have migrated from other pu of the country. Many of thom are indignous people from the Andes. There Is almost no information about the Impacts of alluvial gold mining on socid structures In the Amazon, aside fom general impacts on Andean socia structures. Sedentary communities of people who ae Indigenous to the Amazon are relatively small and few in number. No information about Impacts on these communities s available. V. THE INDUSTRIAL (MANUFACTURING) SECTOR 48. HIstorical Perspective: The manufacturing Industry In Bolivia expeienced a recession during the 1980s. Production increased from an extreme low (59% of the 1978 level) in 1985 to 76% in 1991. The most expansive branch of the industry was the food industry, rising from a share of 39% in the period 1972-79 to a share of 56% in 1986-90; whereas the share of the textile industry declined during that same period. 49. lhe role of the manufacturing industry in generating export income tO the country is fairly modest. However, at the same time as the total exports increased from USS 638 million in 1986 to USS 927 million in 1990, the share of the mamnfacturing industry has increased from 17 to 32%. Sugar, soya flour, textiles and leather products were among the most successful export products. 50. The Bolivian manufacturing industry is mainly artisanal. In 1987, private industry comprised some 12,700 enterprises with a total of 49,000 employees, which means that the average workforce was less than 4 persons per manufacturing unit. There are only some 1,300-1,500 enterprises having more than 5 employees, and thus being large enough to be considered as true 'industries.' Among the bigger industries, the dominant ones are oil refineries, cement plants, other chemical industries, food and textile industries. As much as B3% of the industrial added value and 82% of the industrial employment are generated in the departnents of La Paz, Santa Cruz and Cochabamba. 51. Major Categories of Industrial Activity: A brief overview of various manufacturing industries with major environmental and/or health impacts is provided below. 52. Metallurgical Industries. The Vinto smelter near Omro is the biggest metallurgical industry with an installed capacity of about 30,000 tons of tin and 6,000 tons of antimony. There are also several smaller metallurgical plants for converting scrap metal to various products. Another 11  activity in this sector is the recycling of spent lead batteries and tin scrap. Some of these small-scale industries contribute to the substitution of Imported products. This industry serves the local market. 53. Metal and Meal Finishing Industries. This sector, which has a small overal output, consists of a lage number of small enterpriss, paticularly In E- Alto. 54. industrial Minerals. This sector Includes the coment, asbestos and glass industries. The cement and the glass industries are currently growing, whereas the asbestos Industry Is very small and likely to remain the sane. 55. Petroleum Industry. Since 1936, this industry has been completely dominated by the state company Yacimientos Petroliferos Fisca-es Bolivianos (YPFB) with a current production is 30,000 barrels/day of oil and 530 million cubic feetday of gas. Of the natural gas produced, about 40% is exported (almost exclusively to Argentina), 35% is reinjected into the oil- bearing formations and a little more than 10% is sold at the domestic market and/or consumed internally by YPFB. The oil is refined in three refineries located in Cochabamba and Santa Cmz (total capacity 4S,000 barrels/day). Transportation of hydrocarbons to and from the refineries is by pipelines. An oil pipeline also connects the central oil fields with the port of Arica in Chile. Some diesel is imported. A new gas pipeline to Puerto Suarez, for export to Brazil, is expected to be built in the future. 2 56. Prospecting for new oil reserves was limited in the past. But, following a recent change in legislation, several international oil companies have recently become active in Bolivia. 57. Leather Tanning and Shoe Industry. This has been an important sector with many medium-size and small enterprises located mainly in Cochabamba and also in La Paz and Santa Cruz. The tanning industry's export exceeded USS 17 million in 1989. 58. Textile Industry. This industry's products represented less than 8% of the total manufacturing value in 1990. The traditional wool and cotton industry has declined at the expense of synthetic fibers for the export market (amounting to a 25% share of the total of exported manufactured goods in 1990). The textile mills are located mainly in La Paz and also in Santa Cruz, Cochabamba, and Oruro. 59. Paper Industry. The paper and carton manufacturing industry is very small, with mills located in La Paz, Cochabamba, and Santa Cruz. These mills use recycled paper, waste fibers, and/or imp'nrted pulp as raw 2 The Government plans to restructure the hydrocarbons sector, and offer YPFB's assets for private participation. 12  materials. The associated paper converting, graphics and printing Industry consists of many medium-size or small units, mainly concentrated in La Paz. 60. Food Indusry. The dominant position of this sector within the manufcturing industry continues to increase, both with regard to its total value and the number of enterprises and workers. About 90% of food products wero sold in the local market in 1990. Derivatives of soya have been very expansive on the export markets during the last few years. 61. The edible oil plants, sugar mills, distilleries, breweries,jnd a yeast and food factory constitute the largest plants in this industry. The slaughterhouses, milk product factories, soft drink botting plants and cereal processing plants are medium to large size. Larger plants processing soya, sunflower, cotton grains ad sugar cane are located mainly in Santa Cruz, while a big edible oil refinery opertes in Cochabamba. All major cities have at least one brewery, and one or several soft drink bottling plants, slaughterhouses, meatpacking, and canning plants. 62. Many of the private modern food processing factories have adopted the best available international technology. However, several older units still use obsolete technologies. This is particulary true for the municipal-owned slaughterhouses and state-owned sugar mills. 63. ChenIcal Industry. The chemical industry is fairly restricted in Bolivia as far as the total number of enterprises or the total production value is concerned. This sector also includes recycling of waste lubricant oils and manufacturing of various finished plastic and rubber products. Chemical industries are located mosdy in La Paz - El Alto, and also in Cochabanba and Santa Cruz. 64. NatIonal Policies, Ikws and Institutions: The only effective regulation of industrial pollution are associated with a few municipal ordinances regarding water quality. There are no industrial air pollution or hazardous waste regulations in Bolivia. 65. Although the Ministry of Exportation and Economic Competitiveness (MECE) (formerly the Mmistry of Industries) has the authority to regulate industrial pollution, it has not exercised this authority except in very limited cases. MECE is preparing a Presidential decree to create a private institution (Bolivian lnstitute of Norms and Quality) that will draft industrial discharge standards. The National Chamber of Industry has recently created a Conmnittee of Environmental Affairs, which in coordination with SENMA, will be preparing the environmental quality and EIA regulations. 66. Industry and Environment: The environmenta impacts of the manufcturing industry in Bolivia are relatively small, when compared with those of the mining sector. The major issues include: (a) consumption of non-renewable energy (e.g., fossil fuels, raw materials) and non-sustainable 13  use of other natural resources (e.g. siting of Industry in areas with scarce water resources); (b) land degrdation caused by siting of Industry In densely populated aren and loss of recreational arosu, green belts, etc.; (c) contamination of surface waters and groundwaters from industrial wastewatem with high organic loadings (biological oxygen deficiency), slowly degradable orgaic sbstances, nutries, and toxic substaces; (d) poor waste managument pratice of solid and hazardous wastes, and inadequate recycling and rouse; (o) air pollution from dust, noxious gases (SO,, NOg, C02, CFC) and noise; and (f) occupational health and safety hazards. 67. Rational planning of industrial siting Is a relatively recent phenomenon in Bolivia. By far the best example of a well-functioning Industrial estate comes from Santa Cruz, where about 150 Industries were installed in 1989 in 250 hectares of a 750-hectare property set aside for industrial development. The necessary infractructure (roads, water and energy supply, sewer system and storm water collection) and wastewater treatment plant associated with this estate are provided by the municipality. 68. El Alto, Cochabamba and Oruro have also taken initiatives to set up industrial estates, but with much less success. For example, in El Alto, an industrial reserve was designated without any guarantee of land rights and wiftout provision of basic services such as electricity, water supply or sewer system. Also, with few exceptions, there is no special segregation and treatment of industrial or household wastewaters, nor are there adequate systems for solid waste management and disposal. 69. A considerable part of Bolivian industry is located in regions, such as La Paz-El Alto and Cochabamba, where water is scarce. In these areas, there is a clear conflict between industrial, agricultural, and domestic water users. In addition, some industries do not conserve water (e.g., textile, leather tanning, yeast and beer industries in La Paz) and the current water pricing policy does not encourage such conservation. 70. Typically, industrial discharges from sugar mills, breweries, yeast and vegetable oil plants, distilleries, and tanneries have BODs values greater than 500 mg/. In addition, slaughterhouses, petroleum refineries, chemical plants producing soap and detergents, and textile plants discharge wastewaters with high organic contents. Other pollutants such as chromium, sulfides, biocides and dyes are present in tannery effluents; solvents and dyes in texile effluents; and hydrocarbons and solvents in oil refining effluents. Although the general awareness and knowledge about environmental issues are fairly developed among the Bolivian industry managers, there is a lack of clear incentives or wdl-formulated rules to stimulate frther steps towards pollution control. 71. The rivers that receive effluents from highly populated and industrial areas are extremely polluted. For example, the Choqueyapu, Pirai, and Rocha Rivers, which receive wastewaters from the three biggest and most 14  industrialized citles of La Paz, Santa Cruz and Cochabamba, have values above 100 mg/i (and occasionally above 200 mgAI), at least during the dry season. 72. Unlike the mining sector, the manufacturing industry In Bolivia does not yet seem to have caused my major large-scale or regional negative impact on the natural onviromnent. However, there are asrey srevera examples of local or medium-scale detrimental ImpactB on eosystenma, solis and the human environment, Including large fishklills, inpairment of agricultural activities, and sever nuisance to man caused by emissions of toxic substances, dust, bad odors or noise. Such environmontal Impacts have been rarely Investigated In Bolivia. 73. Occupational Health and Safety: As Is the case In the mining sector, the working environment within Bolivia's industrial sector shows great variations from satisfactory to unacceptable. A significant number of the biger and thriving companies in Bolivia exhibit a satisfactory awareness of problems related to occupational health and safety; they have adopted modern technology, safe equipment, and training practices to prevent accidents and educate their workers about potential risks. Meanwhile, in many other companies, especially the smaller enterprises and older plants, ignorance and negligence are a major reason for occupational illness and accidents. Major occupational hazards include inappropriate handling of chemicals, indoor air pollution (and the lack of respiratory protection), bad lighting, noise, and working double shifts. 74. Only a few companies within the industral sector seem to keep records on occupational accidents. However, the petroleum industry and a few other companies stand out as good examples regarding the recordkeeping and reporting of accidents. There is a clear need for improvements in occupational health and safety, including better education and training of the industrial workforce. 75. Social Impacts: Although the manufacturing industry is a relatively small sector within the Bolivian economy, its social impacts have been increasing, particularly as these impacts are linked with broader urban social issues. 76. The development of La Paz-El Alto in Bolivia is linked with rapid urbanization and excessive growth of the capital. Unlike in other Latin American countries, Bolivian industry has developed out of the already existing cheap and abundant workforce, rather than attracting workers from other countries. The large influx of people to La Paz-El Alto has gready exacerbated problems of unemployment and sub-employment. This situation has resulted in a rapid increase in the informal sector. Heavy crime is, however, not yet a major concern. 15  77. Tho very inadequate education level of this population does not permit them to seek qualified work. On the contrary, the abundance of unskilled laborers has brought down the income of the urban poor. Thus, wages are very low and work conditions are extremely deflcient. 78. Thore is litdo data on the impacts of industrial gowth on public health in urban areas. Since most now industrial ventures will presumably locate in existing industrial cen of urban areas, it Is urgent to address existing problems with infrastructure and the related social consequences in citdes such as Cochabamba, El Alto, La Paz, Oruro and Santa Cruz. VI. RECOMMENDED PRIORITIES FOR AN ENVIRONMTAL NMIGATION PLAN FOR THE MINIG AND ND!USTRML SECTORS 79. This section recommends priorities for consideration by the Government of Bolivia in preparing an Environmental Mitigation Plan for the mining and industrial sectors. It consists of: (a) broad policy, legal and institutional issues, (b) major targets for mitigation, (c) recommended priority activities, (d) analysis of alternatives, (e) environmental management and training, and (f) environmental monitoring of activities adopted as part of an environmental mitigation plan. 80. Broad Policy, Legal and Institutional Issues: Key issues include: a. trengening Governmental and &L-Mernmental mztitutioQn. Unclear institutional responsibilities and weak institutional capacity are a major obstacle to carrying out public policy initiatives in Bolivia. Even where policies and laws already exist, it will not be possible to apply them effectively without strengthening institutional capabilities. Improving these problems will require clarifying govemment institutional responsibilities and strengthening institutional capabilities, with particular attention to increasing human resources. b. Overall PlanninL for Sound Use of Land and Natural Resourc. The resource conflicts and planning problems identified in this study reflect larger problems within Bolivia. The National Environmental Law's call for development of an Ordenamiento Territorial is potentially the most comprehensive response. The laws being prepared on biodiversity, indigenous peoples, water and forestry may help to resolve some problems of natural resources management as they apply to different sectors. Some problems related to mining and industry, such as conflicts with specific agricultural and urban uses of water, will have to be 16  addressed case-by-case. Other problems could be addressed through general policies even before formulation of additional laws; in some cases, new actions could be drawn upon existing examples. c. Goal Setting for the Amb_ent Environmena Ouality. Environmental quality is generally st as tget (based on the primary intended use of a given resource base) as a planning tood for managing environmental quality and natural resource use. In the case of Bolivia. in the near term, establishment of detailed, comprehensive environmental quality goals is aWz recommended as this effort would require far more technical resources and institutional capabilities than the Government currently possesses. However, the Government could lay the groundwork for establishing these goals, perhaps initially, through regulations on enviromnental quality. d. New Investment Planning. In the mining sector, the first priority should be to incorporate environmental considerations into the restructuring of Comibol's holdings. In the industrial sector, the emphasis should be to implement the new EIA regulation. SENMA and others involved in this process should consider carefully the number and type of new investments requiring EIA in the near future. This is important to ensure that the extremely limited EIA capabilities in Bolivia are not overwhelmed, and that there are some early successful experiences with this new requirernent. e. C UagMnent. Bolivia needs to adjust its choice of instruments to the realities of local envirownental management capabilities, since there is very limited technical expertise and institutional capacity. f. Promoting Environmentally Sound Technologies and Prcesses. Environmentally sound practices cannot be reached only through formal legal requirements and incentives. This is particularly true for countries like Bolivia that have traditionally weak public administrations. As an alternative, industry can be induced to act voluntarily through information sharing and persuasion. Public opinion and the activity of NGOs are often influential in this respect. Some of the groundwork for encouraging industry awareness and voluntary improvements has been laid thiough Bolivia's use of widespread consultation in developing major environmental initiatives, such as new laws and the PAAB. 17  g. Solld and Hazardous Waste Management. Bolivia needs to establish a basic framework and guidelines for sound waste management practices. At a minimum, the Government needs to identify major categories of waste that should be handled separately; develop policies and guidelines for better waste nanagement, including pollution prevention; and deveop guidelines and/or regulatory requirements for sanitary ledfills. This should be done in close coordination with local government authorities. h. trengthening Laboratory and Monitoring Canacities. Strengthening laboratory and monitoring capabilities is fundamental for improving the technical, scientific, and legal aspects of environmental management in Bolivia. The market for these services will gradually increase as environmental management grows, particularly if, government institutions generally rely on private services. This will require strengthening both technical and human resources. An important step would be establishing a central environmental laboratory charged with setting standards for quality assurance and quality control, serving as a reference laboratory, and helping laboratories across the country to coordinate. i. QOccuational Health and Safet. The main problem here is weak implementation, rather than inadequaqy of existing requirements. The existing legal requirements for occupational health and safety are little respected and the general awareness of these matters is low. One reason for this undoubtedly lies in the major economic and social problems which are affecting Bolivia. However, this predicament must not serve as an excuse for not acting to improve workers' health and safety wherever such possibiities exist. Opportunities do exist in the larger mines and the formal industrial sector and initiatives for improvement will be most efficient if addressed to employers. The Government needs to examine how to increase its own support for worker safety and also how to increase donor support. In the realm of environmental management, occupational health and safety measures could often be linced to broader questions of safe facility operations and emergency preparedness. The occurrence of silicosis among miners is a major concern. In addition, many miners are working in the informal sector, in mines with very rudimentary ventilation and other preventive facdities. As the extent of these problems is not well defined, an in-depth investigation of the miners" health is  status should be undertaken. Another urgent Issue that needs to be investigated is the regular use of mercury in the exploitation of alluvial gold, with resulting possible intoxication, both in connection with the process of amalgamation and, indirectly, through the consumption of mercury-bearing fish. j. Addressaing Environmental Problems of Small-4cale and Informal Mining Seor. The main priority is to gain a better understanding of the small-scale and informa mining activities. Key issues in this area include an understanding of the viability of small-scale mining activities In Bolivia; the measures that can be used to address some of the health and envirnmental problems when the small-scale mining activities are not economically viable; and the lessons learned from experiences of other developing countries in trying to address similar problems. 81. Major Targets for Mitigation: These include cross-utting areas as well as the mining and industrial sectors. 82. Crosswjufflng Areas. The major targets to be focused on are in the areas of: a Planning for New Investments. All new mai2r investments (new facilities and expansions of existing facilities) should be planned and executed according to 'best available and economically feasible' technologies. EIAs should be incoDporated into the permiting procedure for new operations, and environmental audits for existing operations. Using enviromnental audits to help plan the restructuring of Comibol will be a major advance in better planning for new investments. b. Ocupational Healthiand Safet. As discussed in the preceding section, the Government needs to make occupational health and safety a higher priority, at least in formal mining and industrial activities of above a certain size. This should involve examining possible formal and informal incentives and also endisting more support from international donors and assistance organizations. 83. bleMining Sector. The major targets are in the areas of: a. Improvine Environmental Management in Oruro. Environmental conditions in the area of Oruro are grave. The problem is very complex because it involves pollution from many different sources, including: acid mine drainage 19  from a great number of mines In the area; effluents from mineral concentration plants; effluents and air emissions from smelters and other industry; acid drainage from waste rock and tailings; and human waste and sewerae. The impacts of these problems are serious: surface and presumably ground waters ve being contaminated and made unsuitable for human consumption or irrigation; economic damge is causied through destruction of communal water and sewage installations; and the population is directly affected by sanitary problems associated with Industrial and urban pollution. In addition, the ecosystem of Lake Poopo is seriously threatened resulting in adverse impacts on the waterfowl habitat as well as the income fom fishing and the daily livelihood of the Uru Muratos tribe living on the shores of this lake. Although the present knowledge about the enviromnental impacts are superficial, only few initiatives have been undertaken. In the following section on recomnended priority actions, it is suggested that a pilot project be initiated on integrated environmental management in the Oruro area. b. Mono 2nd the Reession of the Mining Sector. The city of Potosi is in a state of prolonged economic crisis due to the recession of the mining sector and the virtual lack of altemative job opportunities. Environmental issues are also complex and include lack of water resources, acid drainage from the Unificada mine, extensive small-scale and artisanal mineral exploitation, unplanned establishment of concentration plants within the city boundaries, uncontrolled discharge of mining wastes, and discharge of communal waste and sewerage into rivers flowing through the city. Soils as well as rivers within the city as well as downstream for tens of kilometers have been polluted. Presently, there is little quantitative information about baseline environmental conditions and the health impact on people living and working in the area. As a preliminary study, it is recommended that SENMA to undertake a study to evaluate the extent of pollution from the small concentration plants within Potosi and the impact of this pollution on the nearby population. In addition, an environmental audit of the Unificada mine (Cerro Rico) is recommended. c. Mining for Alluvial Gold in Parns of the Amazon Basin in Bolivia Parts of the Amazon Basin in Bolivia are seriously affected by destruction and contaniination resulting from alluvial gold mining. There is only very limited information about actual conditions in the area or the interrelation among ecological, economic, technical and social factors. The 1992 20  study conducted by LIDEMA in an excellent start. This type of work should be extended to Tipuani and other areas. Tho potential impacts of this activity on people and the onvironment need to be investigated. Remediation of existing environmental danage will be a complex task. A complicating factor is that the area in question are largely outside of public control and without infrastructure. The more direct task of eliminating the use of mercury or, nore realistically, of improving the procedures used in the amalgamation process is a matter of enforcement (in the limited instances where this is possible) and more generally of education and information. Although this task is fundamentally the responsibility of govemment authorities, NGOs could play a major role. d. Small-Scale and Tnformal Mining Activities. The occupational and environmental hazards linked to small- scale and informal mining are grounded in Bolivia's pressing economic and social problems. Like more general worker health and safety problems, it is difficult to see how these hazards can be significantly improved apart from ameliorating the underlying situation. Comibol's plan to lease mining rights on some of its less productive holdings to cooperatives is likely to result in deteriorating health, safety and environmental conditions. Comibol should explore possibilities for minimizing, if not eliminating, the potential for some of the most dangerous types of small-scale operations to be carried out in holdings that are to be leased. If some success is achieved in this area, Comibol should extend similar measures to other holdings that have been leased. 84. The Industrial Sector. This EA indicates that the environmental and occupational health and safety problems associated with the industrial sector in Bolivia have a more limited scope and are less acute than those identified within the mining sector. Nonetheless, there are several regions where mitigation measures need to be taken in the short or medium term, as summarized below. a. Poor Urban and Industrial Planning in El Alto. Ihe most precarious environmental situation, both with regard to industrialized and urban areas, is encountered in the city of El Alto. The major issues include a lack of adequate industrial and urban planning, poor basic infrastructure and municipal services (e.g. water supply and sewerage systems with appropriate waste treatment facilities), and uncontrolled discharge of wastewaters and solid wastes threatening the 21  very sensitlve ecosystems in the closed Altiplano Basin, including Lake Titicaca. The present efforts to find solutions to the very complex waste disposal problems in El Alto should be given full support. The scope of the problem Is so great that the Government of Bolivia will have to take a responsibility for its solution, probably In cooperation with foreign assistance. b. Pollution of tha ChoQueyu River in La Paz. The heavy pollution of the Choquoyapu River In La Paz, caused by both untreated industrial and domestic wastes, has reached such dimensions that the river can be regarded as an open sewer going through the whole city. In addition to the adverse aesthetic consequences, this situation creates obvious health hazards to the people living close to the river banks, extracting sand and gravel from the river bed, using the water for irrigation downstream of the city, and consumning the crops produced in the irrigated areas. The industries located within the city of La Paz should be given incentives or be forced to reduce their water consumption by recycling of process water and to pretreat at least their most hazardous wastes. As on-site wastewater treatment by all polluting industries may be difficult to implement, a central wastewater treatment plant should be considered. The Municipality of La Paz and the Government of Bolivia should consider developing an institutional arrangement for managing municipal water and sewer services similar to the ones used in Cochabamba and Santa crz. e. Jngradi Wat ed Managrm in Santa Cruz. The municipality of Santa Cruz has already provided adequate facilities for proper environmental management by the great part of its industry that is located in the industrial estate. High priority in environmental management should be given to the remaining industries located in the valleys of the Pirai and Chane Rivers, which lack wastewater treatment. Mitigating pollution of the Pirai River can only be accomplished through an integrated control and management program covering the whole watershed. Sound river basin management is necessary to ensure multi-purpose use of the river for recreation, swimming, fishing and irrigation. Groundwater monitoring is also necessary to determine the extent of contamination and plan protection of this water supply. SERPA, the regional organization responsible for river basin management in the Pirai River area, should be 22  given extended responsibility to carry out more comprehenslve environmental management programs, In cooperation with industry, SAGUAPA C, and the regional Corporation for Development (CORDECRUZ). d. Extending Sewerage SystTmo to Cochahamba. The municipality of Cochabamba has also taken severd commendable initiatives to reduce industrial pollution in the city. The next step should be to extend pollution wontrol activities to those parts of the city which are not presently covered. Studles are already in progress to extend the sewerage systems to the eastern and western parts of the city, and also to provide supplementary wastewater treatment facilities. Industries located in areas that will eventually be equipped with sewers will have to install or upgrade their treatment systems, as well as their solid waste management practices. However, it appears that none of these improvements will be possible until the city can resolve jurisdictional and political disputes with adjacent municipalities. Therefore, top priority should be giving to resolve these disputes. 85. Recommended Priority Activlties: From the broad list of priorities listed above, this section identifies a subset of activities that could help improve future capacity to design and implement effective programs for enviromnental management in the mining and industrial sectors. It may be possible to incorporate some of these activities into ongoing international projects or undertake these activities using new resources. 86. Cross-Cuttinz Themes. In any activity undertaken, there should be a concerted effort to design the work so that it: (a) provides maximum opportunity for building institutional capacity on-the-job training and improvement of technical capabilities and facilities, (b) stresses consensual approaches and broad participation by all affected sectors and parties, (c) helps to promote incentives and minimize disincentives to the efficient use of natural resources, and (d) contributes to building a coherent database on environmental conditions in Bolivia. 87. Imro-ved Environmental ManageMent for Major Sources. The emphasis here should be on improved planning for future investments (both new and expanded facilities) and addressing the most serious problems in existing major facilities. Wherever possible, environmental improvements should be linked to greater production efficiencies. The following actions are recommended: (a) incorporation of environmental considerations into the restructuring of Comibol as effectively as possible; (b) strengthening of the development and application of EIA procedures in the mining and industrial sectors; (c) use of environmental audits for existing facilities to serve as a 23  basis for negotiating noeded Improvements, to be done on a voluntary buls or eventually as part of the permitting process; (d) better planning of infrastructure and manaement of Industrial estates, with El Alto receiving the highest priority; and (e) development of guidelines and pilot projects In cooperation with Industry to build knowledge and experience. Bs. _a R IrIng Futher Sudy. Among the many luau. requiring further dy, the followings are especidly Important: (a) conditlons, undet lying causa and ways to address environmental and health problemn relatd to small-scale hard rock mining and alluvia gold mining; (b) choosing and implementing goals for ambient environmental quality, including development of an effective mix of regulatory instruments; (c) identifying and addressing key economic factors such as clarification of required changes In national or local laws to adopt appropriate price-based regulatory Instruments; pricing and Implementation regimes for water, waste disposal and energy services; and other economic measures that can promote more efficient resource use and management; and (d) clarifying the needed measures to protect sensitive ecosystems from mining and industrial activities, and invenorying available human and technical resources for efficient utilization. 89. Proposal for a Regional Pilot Activity - Integrated Environmental Management of the Oruro Reion. There is a need in Bolivia to address, in an integrated fashion, the complex linkages of existing and projected problems associated with mining and industrial development, as identified in this sectoral EA. It is recommended that such a pilot project be located in the Oruro Region. 90. Oruro represents a striking confluence of many of the major problems identified in this sectoral EA. This drainage basin is experiencing multiple stresses due to the proximity to the mining fields and industrial activities to an urban area and Lake Poopo, a sensitive ecosystem which is the home of the Uru Muratos tribe. Oruro already has an important institutional base, including laboratory and research capabilities. Building technical and institutional capacity for environmental monitoring and environmental management in Oruro would offer a focus for coordinated application of many of the priority activities recommended above. It could also offer a model and training ground for making similar improvements elsewhere in Bolivia. 91. Analysis of Alternatives: The recommended priorities for an Environmental Mitigation Plan will be critical to the success of Bolivia's new efforts to improve environmental management of the mining and industrial sectors and also to lay the groundwork for successful design and implementation of the future environmental projects in these sectors. The proposed areas of concentration are relatively discrete and manageable, factors that are of importance given the limited resources (especially the institutional capacity) that are available in Bolivia. Other national r'anning issues, such as broader questions of land use and resource management, are 24  too difue and Involve too many legal and institutional uncertiaintles to mske them good candidates for activities designed specifically for the mining and Industrial sectors. 92. t Is recommended that the focus be on program design and Implemontation, rather than drafting now loegl requirements. bhe reaons are twofold: First, themr re current projeot to help wit legal drifting -- an ativity that receiv considerable donor support alredy. Second, future enviromnental improvements In the mining and induitril suctors will depend hevily on ngthoenIng practical capabilitkis within Bolivia to identify environmental problems and carry out needed Improvements. 93. As for the proposed regional pilot activity, Oruro seems by far to most suitable area. None of the other regions and citels surveyed has a comparable mix of mining and Industrial activity affecting a nearby, well defined urban area and an Important ecosystem, Including the speclal concerns of an Indigenous tribe. The problems of Potosi are in many way. unique to that area because of Its extreme dependence on mining. The problems of El Alto and La PRz are closely tied to complex urban plannimn issues and have limited relation to current mining activities. Santa Cruz and Cochabamba also lack a significant mining component. Alluvial gold mining In the Amazon Basin is another unique case and It would be exceptionally difficult to monitor conditions there or carry out an extensive mitigation program. 94. Environmental Management and Training: Building institutional capacity for enviromnental management is proposed as a central aspect of all recommended activities. Participants should be drawn from the public and private sectors, including government, commercial enterprises and organizations, universities, research institutes, local communities and NGOr. 95. Environmental Monitoring of Activities Adopted as Par of an Environmental Mitgation Plan: Developing criteria and procedures for monitoring environmental impacts of the recommended activities selected for implementation will be one of the tasks in designing specific projects. VII. PUBLIC PARTICIPATION 96. During preparation of this sectoral EA, a wide range of organizations within and outside of government were consulted. A number of informal meetings were held with the private industry, represented by the National Chamber of Industry, and the National Association of Medium Miners. Tbis was to inform about the objective of the study, to hear the opinions of these organizations, and to urge these organizations to take active part in the imminent formulation of laws, regulations, and codes of conduct. 25  97. As an Integrated part of the study program, two seminars were heid In La Paz: (a) a three-day seminar on "Mining and the Environment"; (b) a two-day seminar regarding the "environmental questlons within the non- mining Industrial sector." Each seminar, arranged by SENMA, was attended by about 60 professionals from the relevant sectors. 93. A draft Executive Summary and the sectoral EA report (both translated Into Spanish) were presented to SENMA for distribution to more than 40 different organizations that representad a wide diversity of expertise and Interests. These organizations were given two to thrae weeks to submit written comments on the draft. Following review of these comments and further consultation with counterparts, two meetings were organized In Cochabamba and La Paz on the mining and industrial issues, respectively. Ihese along with written comments from others were considered In preparing the final version of the sectoral EA. 26