First Pollute 'em, Then Sell 'em the Clean-Up


San Francisco. -- As the environment industry's rapid growth in the North begins to level off, it is expanding elsewhere. The industry's entrance into Third World countries is the culmination of a three-stage proces of exporting toxic industrial development from North to South:

* First, economic "development" is exported through free-trade policies and financing by multilateral and bilateral agencies.

* Second, environmental regulations to control the excesses of this development are introduced.

* Finally, "environmental" technology and services are exported to service these regulations.

As free-trade policies have prised open Third World markets, transnational companies have moved into countries pursuing export-oriented industrialization. This has resulted in the rapid emergence of environmental problems which, until recently, existed largely in Northern industrialized countries.

For example, the highly toxic chlorine industry, which is at the root of much of the industrialized North's hazardous-waste crisis, is stagnating in the U.S. and Western Europe. But leading manufacturers of chlorine -- Dow Chemical, Solvay and ICI -- are expanding into the Third World, investing in chlorine production in countries such as Brazil, Mexico, Saudi Arabia, Egypt, Thailand, India and China.

Many of the factories, technologies and products that transnational corporations have moved to the South are either banned or under pressure for environmental and health reasons in their country of origin. For example, DuPont sells leaded gasoline throughout Latin America, although it is banned in the U.S., Canada and elsewhere.

Similarly, Mitsubishi set up a "rare earth" processing factory in Malaysia to make chemicals for color television screens, a process which had been judged too dangerous to site in Japan. Mitsubishi then dumped plastic bags of radioactive wastes behind the factory.

The most blatant example of these double standards is the cluster of maquiladoras on the Mexico-U.S. border -- free-trade zones where U.S. transnationals, including General Motors, Union Carbide and Motorola, have set up thousands of plants to take advantage of low wages, encouraged by lax laws concerning labor unions, workers' health and safety and environmental compliance.

Until recently, little was done in newly- industrializing countries to control, regulate or manage any of the waste produced as a result of this form of development. In the last five years, however, the pollution has become increasingly difficult to ignore. Spurred on by local and international environmental protests, and by inter- national agreements on environmental issues, a number of Southern governments are beginning to draw up legislation.

They are importing regulatory models from the U.S., Europe and Japan, which strive to export their regulatory models, because as industry representative Levi Richardson points out, "regulatory transfer leads to technology transfer." With this in mind, the U.S. Agency for International Development and the Environmental Protection Agency are training and building relations with policy makers and bureaucrats from various Asian countries, who will develop their nations' regulatory regimes. The Japanese government is carrying out similar programs.

The Asian Development Bank estimates that the Asia Pacific region will need to spend between $12 billion and $70 billion a year to mitigate the environmental damage due to the region's economic development. The governments of Hong Kong, Taiwan and South Korea are planning to spend a total of $5 billion over the next five years to develop municipal and industrial waste-management systems. In Malaysia and Thailand, the environmental industry's current annual private-sector market of $210 million in each country, is expected to grow by 15 to 25 percent annually. The private sector Thai market alone is expected to reach $1.5 billion by the year 2000.

The 1992 environmental market in the six largest Latin American countries was estimated to be $2.5 billion, 40 percent of which was supplied by imports. In Mexico alone, 1992 expenditures of $614 million are projected to jump to $10 billion in less than 20 years.

"Environmental" technology is therefore being exported to Asia, Africa, Latin America and Eastern Europe, much of it financed by multilateral and bilateral aid agencies. Part of this "aid" for "development" will be given out in contracts to transnational corporations. Urging U.S. taxpayers' support for the Global Environmental Facility, a joint project of the World Bank, the U.N. Development Program and the U.N. Environment Program fund, a Treasury official recently told a congressional committee:

"The environmental-services industry . . . stands to derive significant benefits from the [multilateral development banks'] greatly increased emphasis on environmental work. That is one of the benefits we expect to get from our participation in the Global Environment Facility."

Mexico expects to spend some $2.5 billion to address air-pollution problems in the country's capital, almost half of which will come from foreign governments and development programs. Hundreds of millions more dollars will be allocated by the same sources to install hazardous-waste dumps, incinerators, air-pollution control devices and waste-water treatment facil- ities to "clean up" the border area with the U.S.

Some of the technology exported through aid is outdated. For instance, after a decade of popular protest, hazardous-waste incineration is declining as the preferred method of waste disposal in the United Sates, and the Clinton administration has proposed tightening controls on it. Yet incinerator exports to the South are rising.

U.S., European and Japanese companies view the global environment industry as an area of competition. Some mergers, joint ventures and licensing agreements link U.S., European and Japanese companies, but general patterns of "environmental" investments reflect traditional geographic spheres of interest.

Thus the United States, heavily invested in mining and petroleum in Latin America, is now supplying environmental products there. Western European countries have an advantage in all sectors of the business in Eastern Europe, while South-East Asia received more than 80 percent of Japan's environmental-equipment exports in 1992.

As well as attempting to sell regulatory regimes to client countries, bilateral aid agencies are also directly advancing the interests of their national corporations. Secretary of Commerce Ron Brown told a gathering of environmental industrialists recently:

"The more pressure that we put on ourselves, on Mexico and on every place else in the world to do something about the environment, the more they're going to reach out for environmental technology. And where are they going to get it? They're going to get it from us!"

Cleaning up toxic pollution can contribute to environmental and human health in many countries. Few would deny that it is essential to clean up the toxic disasters created by the maquiladoras on the U.S.-Mexican border or the excesses of industrialization in places such as Brazil, Poland, Thailand, South Korea or Taiwan.

In particular, the critical need for potable water and waste-water treatment facilities in the Third World is one which the environment industry could help meet.

Yet by applying discredited technologies such as incineration, the environment industry is concealing the toxic economic-development model being used in he South behind a thin green veil of environmental management. While the environment has become big business, the environmental crisis has continued to escalate. What corporate "environmentalists" and government bureaucrats often hail as the solution has become part of the problem.

Joshua Karliner is executive director of the Environment-Business Bureau. This commentary is distributed by the Third World Network.

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