AECEN Regional Forum:Public Participation in Environmental Compliance

and Enforcement in AsiaDecember 13-15, 2007

Challenges and Successes in Compliance and Enforcement

Programs in Asia – Case of Japan

Hidefumi IMURAGraduate School of Environmental Studi

esNagoya University

Institutional Arrangements (1)Historical Development

Before 1960: No effective institutional arrangements both on the national and local levels in terms of legislation and organizationIn the 1960s (Japan’s rapid economic growth period): Revision of existing laws and enactment of new laws, but not effective enough Exploding health damages of residents, e.g., Yokkaichi Asthma, Minamata Disease, Etc.1971: Drastic change and start of systematic environmental policy

Anti-pollution movements developed to anti-government movements which might have led to a political turmoilCourt adopted “no fault liability” principle: Companies which caused health damages were sentenced to be guilty of illegal actions even though they asserted that they were not able to expect the health impacts Companies had to pay huge monetary compensation to victims Decision of the elites (LDP politicians, bureaucrats and business leaders) faced with the risk Amendment of Pollution Control Law (Deletion of “Harmonization” Clause) Establishment of Environment Agency

Institutional Arrangements (2)Japanese Environmental Institutions

Mix of centralized and decentralized approachesEnforcement of environmental laws, including monitoring and inspection, is largely delegated to 47 prefectures and large municipalitiesPrefectures were the pioneer in environmental regulation: they enacted ordinances before national laws were legislated.

National Framework LawPollution Control Law (1967, Amended in 71)

Basic Environmental Law (1994)National Specific Laws

Air Pollution Control LawWater Pollution Control LawHealth Damage Compensation Law

Local OrdinancesPrefectures and municipalities can set more stringent standards than national ones

Ambient Air / Water Standards and Emission/Effluent StandardsStandards desired to be achieved and “obligatory” standards

Planning, Performance and Evaluation

Basic Environmental PlanSet national environmental goals and targetsPrefectures and municipalities also prepare similar plans

Total Pollutant Load Control PlansSpecial Law for Environmental Preservation of Seto Inland SeaLaw of Special Measures for Lake Water QualityAir Pollution (SO2)

Regional Pollution Control PlansPlans to provide special financial assistance to environmental projects in the designated areas (e.g., national subsidies for sewerage treatment plants)

Environmental ReportsThe annual report on the state of environment is prepared and submitted to the National Parliament (Similar reports in prefectures and municipalities). Environmental performance is evaluated in terms of the number of monitoring stations which comply with the standardsMonitoring data from all air and water monitoring stations are collected and evaluated by local governments and sent to the center (Ministry of the Environment).Detailed monitoring results are published in book form They are necessary and useful for environmental assessment

Compliance Monitoring and InspectionCompliance of Emission/Effluent Standards

Prior consultation before new installation or modification of facilitiesPeriodic and sudden inspection by local government officers Improvement order and penalties

Specified Facilities

Environmental Office Of Prefectures and

Municipalities

On-site Inspection

Effluent

Public Waters

Environmental Monitoring

Non-ComplianceImprovement

Order Penalty

Case of Water

National Compliance Monitoring National Compliance Monitoring of Waterof Water

Data 2002300,000 specified facilities40 issues of improvement order 8,434 issues of administrative guidance55,332 visits for on-site inspection (daytime 54,672, nighttime 660)

Number of Persons in Charge of Environmental Management• National (MoE) 1,000• Local (Prefectures and Large Cities) 6,400 * Including Air, Water, and Others

Submit a plan prior to new installation or modification of specified facility

Check of submitted document

Issue of orders to change the plan or take prior measures

Compliance

300,000 Specified facilities / Many, small sources

Environmental Offices of Prefectures and Municipalities

Decentralized Approach

Compliance of EQSCompliance of EQS

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

Com

plia

nce

Rati

o (

%)

Rivers

Lakes

Coastal area

0

100

200

300

400

500

600

Hou

seho

ld

Indu

stry

Oth

ers

Hou

seho

ld

Indu

stry

Oth

ers

Hou

seho

ld

Indu

stry

Oth

ers

Tokyo Bay Ise Bay Seto Inland sea

CO

D lo

adin

g (t

/day

)

19791984198919941999

Water

AirSO2

NO2

1970 2004

1970 2004

Automobilestation

General station

Number of Arrests for Violation of Environmental Laws

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Year

Num

ber

of A

rres

ts

OthersSolid WasteWater

The number of arrests for violating water pollution control law which was more than 1000 in the 70s decreased to almost “0” in the 90s, while the violation of solid waste disposal law (illegal dumping, improper treatment of hazardous wastes, etc.) is sharply increasing in the 2000s after the enforcement of stricter regulations.

Air, Soil, Noise, etc Wild Life Protection, etc.

Violation of Environmental Laws

Enforcement ResponseDesignation of “specified facilities”

Case of Water: 300, 000 factories and other commercial facilities (hotels, stock raising, cleaning, night soil treatment, etc.)Large facilities (more than 50 m3/day) 13%Small facilities (less than 50 m3/day) 87%

Role of prefectures and designated cities Request reports from specified facilitiesOn-site inspections to monitor complianceTake administrative action such as “improvement order”

Response: Large FactoriesSpecified facilities (with a volume of effluent more than 10,000 m3/day in the case of water) must have pollution control managers who are qualified by the relevant lawUse of Bank Loans and Policy-Based Financing (Japan Development Bank)

Response: SMEsReporting and guidance by local environmental authoritiesSubject to monitoring and inspection by prefectures and municipalitiesFinancial assistance by JEC (Japan Environmental Corporation) and local governmentsRelocation to industrial parks with collective treatment systems

Compliance Promotion and IncentivesCooperative Enforcement Using Administrative GuidanceCooperative Enforcement Using Administrative Guidance

Japanese industrial policy in the catching-up period (until 1970s), “Embedded Broker-State” (Jeffrey Broadbent)Cooperative enforcement based on networking and close information exchange between government and industries lowered the cost of complianceClean government (free from corruption and bribes)Networking of companies (“Kyogikai”) also facilitated the dissemination of information

Voluntary Approach: Negotiated AgreementsVoluntary Approach: Negotiated Agreements Pollution Control Agreements （ PCAs ） between local governments and companies (More than 40,000 agreements have been concluded).More stringent compliance is required to companies in terms of effluent levels and items (e.g., specific chemicals, etc.).Companies are required to make periodic reporting, receive inspections, etc.Companies can enjoy some benefits (reduction of transaction cost and “time cost”) in getting licensing and permission by government, and obtaining consent of local residents who do not want to have factories in their neighborhood.

Financial IncentivesFinancial Incentives Low interest rate loans Preferential tax incentives

Public ParticipationRole of Citizens in System Making

Citizens were victims of industrial pollution in the 60s. They backed up the critical anti-pollution campaign against industrial activities.

Role of Citizens as PollutersIn the 90s, citizens identify themselves as polluters: they pollute the environment through their affluent lifestyles, mass consumption and one-way use of resources.There are gaps between awareness and behaviors: increased environmental awareness does not necessarily mean environmentally sound behaviors as consumers.Greater availability of environmental information by TV, books, etcGreater opportunities for citizens to participate in environmental actions

Role of NGOs Weak role of Japanese environmental NGOs in terms of number of organizations, number of members and financial capability.New law enacted to promote the activities of NPOs (non-profit organizations) in 1998.Traditional Japanese ideas on the role of government: “NGOs are not necessary because government must / will do the job.”Lack of systems to financially support NGOs

Optimization According to Japanese Optimization According to Japanese ExperienceExperience

Local, decentralized system proved effective and efficientInventories of sources including a large number of small sources Reporting prior to new construction and modification of existing facilitiesDocument inspection and guidance and advice by local environmental authorities Combination of on-site inspection and monitoring by government and self-monitoring by facilities

Networking and information exchange between government and companies ensured complianceAdministrative guidance based on on-site inspection and monitoring ensured improvement measures by companiesThe use of negotiated agreements (PCAs) lowered the transaction cost.

Financial measures by Government facilitated complianceFinancial assistance to SMEs for technical measuresTax reduction for pollution control investmentNeed of public investment (in urban sewerage systems)