Voluntary Environmental Performance Mechanisms in the Caribbean Kalim

Voluntary Environmental Performance Mechanisms in the Caribbean Kalim Shah 1

ISO14001 Environmental Management Systems The ISO 14001 Model Environmental Performance Management Review Planning Continual Improvement in performance Checking and Reviewing Implementation and Orientation 2

ISO14001 Certifications in the Caribbean Name of Country Number of Firm Level Certificates Barbados 3 Belize 3 Dominican Republic 3 Guyana 3 Jamaica 5 St. Lucia 2 Trinidad & Tobago 12 TOTAL 31 Comparison to Mexico 400 Source: World Resources Institute – Earth Trends Publication 2002 3

Comparative Assessment of Present Status Country Trinidad & Tobago Jamaica Barbados Status of Implementatio n First Firm certified in 1998. In 2002 the TTBS became the official registration and certification body. TTBS has a national mandate. First Firm certified in 1999. The NRCA and Bureau of Standards jointly mandated by Government to drive certifications. First Firm certified in 2000. No national certification focal point. Government position paper an d strategy being drafted. Drivers Educated population, environmental advocacy, growing manufacturing sector, MNC presence, trade competition. Educated population, environmental advocacy, growing manufacturing sector, MNC presence, trade competition. Educated population, environmental advocacy, trade competition. 4

Comparative Assessment Country Trinidad & Tobago Jamaica Barbados Government Policy EMS mentioned in National Environmental Policy. No implementation or incentive plans. National Implementation Plan approved in 2003. Pilot projects jointly funded by CIDA and USAID. No specific mention of EMS in National Policy. National Business and Environ. Committee set up to draft plan. Obstacles Poor national coordination, lack of cost/benefit awareness Little benefit perceived by small and medium businesses Lack of awareness, lack of capacity and capability. 5

Comparative Assessment Country Trinidad & Tobago Jamaica Barbados Capacity to Implement High capacity. MNC expertise. Many certified auditors and training consultants. Adequate capacity for now. Professional capacity can be trained. International funding. Little local capacity at present. Sectors Implementing Petrochemical, Manufacturing, Food and Beverage production. Aluminum, Mining, Food and Beverage manufacturing and production. Beverage and Alcohol, spirits production. 6

Case Study Methodology – The Business and Sustainability Matrix (IFC, 2003) Sustainability Factors: Governance and Management, Stakeholder Engagement, Environ. Process Improvement, Environ. Products and Services, Local Economic Growth, Community and Human Resource Development. Business Success Factors: Revenue Growth and Market Access, Cost Savings and Productivity, Access to Capital, Risk Management and License to Operate, Human Capital, Brand Value and Reputation. 7

Case Study 1: British Gas (Trinidad & Tobago) Governance and Engagement Environmental Focus Socio Economic Development Governance and Management Stakeholder Engagement Environmental Environmental Local econ. Process Products and Gth, community Improvement Services dvpt, human resources. Natural gas exploration and LNG production 4 4 4 4 2 Production 800mmscfd/day 9 9 9 9 3 Revenue Growth and Market Access Cost Savings and Productivity Certified 4 years running Export to U.S. and Europe 5 facilities certified (3 Platforms) Access to Capital 6 6 6 6 2 Risk Management and License to Operate Brand Value and Reputation 9 9 9 9 3 6 6 4 6 2 Reduce vented methane from platforms using BAT. Nitrogen Generator to reduce GHGs, vented gas reduced 52% and being implemented worldwide. CNG training program for auto mechanics 8

CASE Study 2: Atlantic LNG Consortium (T&T) Governance and Engagement Environmental Focus Socio Economic Development Certified 4th year running Governance and Management Stakeholder Engagement Environmental Process Improvement Environmental Products and Services Local econ. Gth, community dvpt, human resources. Formed 1995, partners BP, BG, Repsol, Cabot, NGCTT. 2 1 3 2 2 2 1 3 2 2 Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Risk Management and License to Operate Brand Value and Reputation 4 2 6 4 4 4 2 6 4 4 2 1 3 2 2 3 trains, 4th planned 2005, 1.2 B. First Firm to use TTBS Strong employee culture, integrated in strategy, corporate image. New Plants, already designed with clean technology in mind. Incremental benefits from upgrades. Clean production was pre req. to building and operating. 9

Case Study 3: Mount Gay Rum Distillery (Barbados) Governance and Engagement Environmental Focus Socio Economic Development Internationally famous brand with 300 years history. Governance and Management Stakeholder Engagement Environmental Process Improvement Environmental Products and Services Local econ. Gth, community dvpt, human resources. 1st Barbadian Firm to be certified. 6 4 6 4 4 6 4 6 4 4 Lead on Government, Trade Assoc. and other Boards for Business and Environment. 0 Adherence to Environmental Policy Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Risk Management and License to Operate Brand Value and Reputation 2 0 0 0 3 2 3 2 2 9 6 9 6 6 Significant lower production and material costs. Claims of significant increase in Brand Value and reputation difficult to attribute singularly to ISO14001. 10

Case Study 4: West Indian Aluminium Company (WINDALCO) Jamaica Environmental Focus Socio Economic Development Governance and Management Stakeholder Engagement Environmental Process Improvement Environmental Products and Services Local econ. Gth, community dvpt, human resources. 6 6 9 9 4 Strong R&D emphasis has increased innovation derived benefits. 6 6 9 9 4 Site rehabilitation Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Previously ALCAN Jamaica Governance and Engagement 4 4 6 6 4 2 Alumina refineries 1.2 mil. Tons/yr capacity. Innovative re vegetation technique now used worldwide. Island wide re forestation program Risk Management and License to Operate Brand Value and Reputation 4 4 6 6 4 2 2 3 3 3 Investment in community, now largest producer of milk and beef in Jamaica. 11

Lessons learnt from Case Studies ISO14001 implementation leads to strong improvements in Environmental Focus and Governance, but contributes to weakly to socio economic responsibility factors. Flexibility allows Firms to pursue strategic improvements. Improvements are not readily linked to access to capital, risk management or license to operate, as business success factors. Singular linkages difficult to attribute but managers strongly perceive such linkages. Basis of all improvements is INNOVATIVE CAPACITY built by ISO14001. Response to MNC pressures or incentives rather than institutional or regulatory pressures. 12

Green Globe Certification for the Tourism Industry The Green Globe certification is the premier internationally recognized certification for the tourism and travel industry regarding environmental management and practices. Established in 1994 by the World Travel and Tourism Council (WTTC) It is an Environmental Management System designed along the lines of the EMAS and ISO systems but specifically for the Tourism Industry, intended to implement Agenda 21 principles. Pathway: Awareness – Benchmarking – Certification. Auditing and certification done by an accredited third party auditor. 13

Green Globe Certification for the Tourism Industry Benefits include: - Increased competitiveness - Targets the “green” market (fastest growing market segment) - Protection of natural areas - Cost savings through eco efficient practices - Assists with regulatory compliance 14

Green Globe: Caribbean Participation Country Number of Certificates Antigua and Barbuda 1 Aruba 6 Bahamas 1 Barbados 7 Dominican Republic 5 Dominica 1 Jamaica 40 Netherlands Antilles 8 St. Lucia 4 Turks and Caicos 2 Suriname 1 TOTAL 74 Source : Green Globe 21 Website http://www.greenglobe21.com 15

Case Study 1: Bucati Beach Resort (Aruba) FACTOR Governance and Management Stakeholder Engagement Environmental Process Improvement Environmental Products/ Services Local Economic Growth Community Development Human Resource Management Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Risk Management and License to Operate Brand Value and Reputation ASSESSMENT HIGHLIGHTS Environmental Policy and Vision Statement Supplier Policy requires high environmental performance standards. Linen reuse ( 30 000 savings), solar panels, grey water reuse in gardens. Assist in training suppliers. Advertises certification on website. 50% local community staff, soap production. Community training, Art from Trash, Turtle nesting. Staff training Savings from less waste, improved market access/ new markets. Not quantifiable. YES but not quantifiable. No. No information. No Information Better customer ratings. Not quantifiable. 14 acres of sandy beach. 80 rooms 16

Case Study 2: Casuarina Island Hotel (Barbados) FACTOR Governance and Management Stakeholder Engagement Environmental Process Improvement Environmental Products/ Services Local Economic Growth Community Development Human Resource Management Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Risk Management and License to Operate Brand Value and Reputation ASSESSMENT HIGHLIGHTS Environmental Mission Statement. Partners with several local and international NGOs. Customer service satisfaction 75% Emphasis on preventative maintenance and replacement of old equipment.Architecture. Turtle protection, noise reduction. Local employment and suppliers. Employment of disabled program. Staff training Yes. Not quantifiable. Yes. Yes, but not directly based on GG. No information Increased brand recognition and value. 8 acres of tropical gardens and woods 170 rooms 1800 foot stretch of sandy beach 17

Case Study 3: Almond Beach Resort (Barbados) FACTOR Governance and Management Stakeholder Engagement Environmental Process Improvement Environmental Products/ Services Local Economic Growth Community Development Human Resource Management Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Risk Management and License to Operate Brand Value and Reputation ASSESSMENT HIGHLIGHTS Policy in place; Environment and Conservation Manager, team. Strong Ties with Government Committees. Target setting focus, large effort on golf courses, coast. Weak in this area. Several sponsorships, Environment Day celebrations. Donations of linens to orphanages and health centers. Strong communication system, open door policy. Yes. No information Yes. Not quantified. No information. No information Yes. Not quantified. Established in 1991 Two Properties Total of 35 acres, 500 rooms 2 Golf courses 18

Case Studies Summary Hotel Env. Gov. & Mgmt. Stakehold er Engageme nt Governance & Engagement Enviro. Process Improv. Env. Pdts. And Services Socio Econ. Dvpt. Rev. Gth. And Mkt. Access Environmental Focus SocioEcon. Business Success Factors Cost Savings and Pdvitity Access to Capital Brand Value and Rep. Risk Mgmt. And License to operate Bucati Beach Resort Almond Bay Resort Casuarina Hotel Sandals Negril 2 3 3 2 3 3 3 0 1 0 2 3 3 2 3 2 3 0 1 0 3 3 3 3 3 3 3 2 1 1 3 3 3 2 3 2 3 2 1 0 Couples Ochos Rios Negrils Cabins 2 3 3 2 3 2 3 2 1 0 2 3 3 2 3 3 3 0 1 0 Swept Away Resort Sea Splash Hotel Sandals St. Lucia Fort Young Hotel Dominica 3 3 3 2 3 3 3 0 1 1 2 3 3 2 3 3 3 2 1 0 3 3 3 2 3 2 3 2 1 0 2 2 3 2 2 1 2 2 1 0 24 29 30 21 29 24 (80%) 29 (97%) 12 10 (40% (33%) 2 (6%) 53/60 (88%) 51/60 (85%) 29/30 (97%) 77/150 (51%) 19

Sustainability- Business Matrix for Green Globe Participants Sample Governance and Engagement Environmental Focus Socio Economic Development Governance and Management Environmental Process Improvement Local econ. Gth, community dvpt, human resources. Stakeholder Engagement Environmental Products and Services Revenue Growth and Market Access Cost Savings and Productivity Access to Capital Risk Management and License to Operate Brand Value and Reputation 20

Lessons learnt from Case studies Businesses are very reluctant to divulge cost-benefit information making data on business factors difficult to obtain. Some cost savings readily identifiable e.g. water, electricity. Difficult for managers to quantify revenue growth or increased market access although they strongly believe it has. Certification has little or no impact on gaining access to capital. Certification not being linked with risk management aspects of business. Brand value is an outcome of several factors. “Low hanging fruit” e.g. water conservation and reduced waste more readily achieved than more complex goals such as habitat preservation/ restoration. 21

General Conclusions on VEPMs in the Caribbean A useful alternative/ complement to command and control regulations, more efficient for scarce resources. Improved policy mix. Provides a framework for firms/ businesses from which to proceed with environmental management in a way focused on economic goals. Small business involvement lacking. Financial and investment sectors not fully sensitized. Government should implement supportive policy for VPMs especially to promote the Innovative Capacity engendered. 22

Roles for the OAS - USDE Brokering partnerships between government regulatory agencies, certification bodies or groups and businesses. Aid in developing national VPM programs to add to and modernize the present policy mix in developing countries. Lead initiatives for VPMs through regional bodies, trade and business associations and MNCs. 23

OAS Intra Linkages Science and Technology Unit Official link to ISO. Relationship with regional Standards and Industrial research organizations. Tourism Unit Collaboration on sustainability projects. Contact with regional tourism industry and hotel associations. 24