Competitiveness and Environmental Policies: The Cases of Chile … · 2020. 1. 22. · Claudio Maggi, INEF 1. General purpose and sum - mary of conclusions According to World Bank

1

INEF-ReportInstitut für Entwicklung und Frieden (INEF) derGerhard-Mercator-Universität – GH – Duisburg

Competitiveness and Environmental Policies:The Cases of Chile and Korea*

Claudio Maggi / Kern Soo Yoon

ProjektMesoNRW

Heft 42 / 2000

Gerhard-Mercator-UniversitätGesamthochschule

Duisburg

2

Contents

INTRODUCTION.............................................................................................................. 4

COMPETITIVENESS AND ENVIRONMENTAL POLICY IN CHILE ....................... 6

Elements for a Diagnosis.................................................................................................... 6

1. General purpose and summary of conclusions............................................................ 6

2. The legislative and institutional framework of Chilean environment policy ............. 9

2.1 General antecedents and economic context ........................................................ 9

2.2 Historical regulations and current legal framework ............................................ 11

2.3 Driving principles and selected instruments of environment policy inChile .................................................................................................................. 12

2.4 Creation and functions of the National Environment CommissionCONAMA ......................................................................................................... 14

2.5 Status review of environmental policy: two examples ........................................ 17

3. Actors and their strategies towards Chilean environmental policy............................ 20

3.1 Actors and Strategies ......................................................................................... 21

3.2 Framework and context...................................................................................... 28

3.3 A specific problem: forest certification............................................................... 30

4. Future challenges in Chile's environmental agenda ..................................................... 33

4.1 14 topics and three fundamentals underlying the invigoration of Chile'senvironmental policy.......................................................................................... 33

4.2 Some specific recommendations ........................................................................ 36

5. References ..................................................................................................................... 39

COMPETITIVENESS AND ENVIRONMENTAL POLICY IN THEREPUBLIC OF KOREA.............................................................................................. 41

1. Introduction .................................................................................................................. 41

2. Rapid Industrialization and Enviromental Challenges in Korea ............................... 42

2.1 Rapid Economic Growth and Structural Transformation ......................................... 42

2.2 The Current State of Environmental Quality in Korea .............................................. 43

2. 2.1 Air Quality ...................................................................................................... 43

2.2.2 Water Quality ................................................................................................... 44

2.2.3 Soil Contamination........................................................................................... 45

2.2.4 The Quality of Coastal Waters.......................................................................... 45

3

2.3 Rapid industrialization and Environmental Degradation...........................................45

3. Environmental Policy in Korea ....................................................................................46

3.1 Development of Environmental Policy in Korea : An Overview.................................46

3.1.1 Environmental Policies in the 1960s and 1970s.................................................46

3.1.2 Environmental Policies in the 1980s..................................................................47

3.1.3 Environmental Policies in the 1990s..................................................................48

3.2 The Environmental Administration in Korea..............................................................48

3.2.1 Environmental Administration in the Central Government ................................49

3.2.2 Environmental Administration at the Regional/Local Level ..............................52

3.3 Environmental Laws and Regulations .........................................................................54

3.3.1 Development of Environmental Laws ...............................................................54

3.3.2 Key Points of Environmental Laws ...................................................................55

3.3.3 Other Laws Related to the Environment............................................................55

3.4 Environmental Expenditure by the Government ........................................................56

3.4.1 The Govenment’s Environmental Expenditure ..................................................56

3.4.2 Environmental Expenditure by the MOE...........................................................56

3.4.3 Fiscal Transfers to Local Governments .............................................................573.4.3.1 Financial Resources for Transfers to Local Governments ........................573.4.3.2 Financial Resources for Water Pollution Prevention Projects ..................58

4. The Popular Reponse to Environmental Challenges in Korea....................................59

4.1 The Present Situation of Korean Environmental NGOs .............................................59

4.2 The Development of Korean Environmental Movements ...........................................61

4.2.1 The First Period (1961-1980)............................................................................61

4.2.2 The Second Period (1980-1987)........................................................................61

4.2.3 The Third Period (1987-1992) ..........................................................................62

4.2.4 The Fourth Period (1992 - Present ) ..................................................................63

4.3 Evaluation of the Korean Environmental Movement..................................................64

5. Industry’s Response to the Environmental Challenge in Korea .................................65

5.1 Industry’s Changing Attitude.......................................................................................65

5.2 Response to ISO 14000 in Korea .................................................................................65

6. Concluding Remarks ....................................................................................................69

References...........................................................................................................................70

4 INTRODUCTION

INTRODUCTION

Competitiveness and sustainability share acommon aim: to use resources more effi-ciently. In the long run, unsustainable pro-duction patterns may lead to the depletionor degradation of natural resources, andthat means loss of future competitiveness.

The concept of sustainable developmentwas endorsed by most of the world’s gov-ernments during the Rio Summit in 1992as a priority principle for public agendas atthe local, national and supranational levels.There are ethical, political and economicimplications to this consensus, borne outby an expectation that the sustainability ofa country’s development pattern should bereflected in its capacity to achieve goals insuch interdependent fields as environ-mental balance, social justice and eco-nomic prosperity. (Rio Declaration, 1992)

A state of environmental balance is recog-nized as one of the foundations forachieving sustainable development, notonly in individual countries, but also on aglobal scale. Hence both the Rio Declara-tion and Agenda 21 acknowledge its im-portance and urgency, both as a priority forgovernments and international organiza-tions, and as an objective for economic andpolitical agents, institutions and civil soci-ety.

In this context, the design and implemen-tation of environmental policies at nationallevel may be a decisive factor in promotingcapacity-building processes, at the sametime reconciling issues of environmentalsustainability with goals for developmentand growth. As Jänicke outlines, the debate

on capacity building around environmentalprotection is currently associated above allwith developing countries which are "can-didates "for receiving expertise and thetransfer of good practice from the mostsuccessful donor countries, assuming thatthese might be regarded as models worthimitating“ (Jänicke, 1997).

These considerations acquire special rele-vance in those developing countries whichhave registered major economic growth inthe last few years. The present contribu-tions focus on the recent cases of Chile andSouth Korea, often (though for differentreasons) regarded as economic models ofgrowth in their respective regions, andwhose environmental legislation, capaci-ties and institutions are relatively new.

In the case of Korea, a strong state ledrapid industrialization and sustained higheconomic growth in order to break out ofdomestic poverty in a relatively short pe-riod of time. In some industrial sectorsKorea has been able to develop its owntechnological capacity, and some compa-nies even began to emerge as market lead-ers in first world markets. Because of thisremarkable performance Korea has oftenbeen cited as a model of development bythe World Bank, but too little attention waspaid in the past to the environmental as-pects of this rapidly growing economy. Infact, substantial environment protectionmeasures were incorporated somewhatbelatedly into Korea’s political apparatusaround the early 1990s. Korea is a “latecleaner”. Nevertheless, there are now somenotably active civic organizations andmany more environmental institutions,while the big companies are trying to begreen.

INTRODUCTION 5

The Chilean case is characterized by arather small economy which, from the mid-seventies, pursued a model of growth witha considerable neoliberal bias and broadmarket deregulation as the country openedunilaterally to international trade and therole of the State was pruned back. Thisstrategy was followed from the earlyeighties by strong export incentives, whichhave consistently encouraged a productivestructure geared to the extractive industriesand the primary elaboration (mainly com-modity oriented) of natural resources, bothrenewable (forestry, fishing) and non-renewable (mining), in a context of sus-tained growth (over 7% annual averagerate for the period 1984 –1997) and risinginvestment rates (reaching 29% of GNP in1997).

The two case studies display certain com-mon features, such as a previous lack ofany environmental regulatory frameworkduring decades of strong economic expan-sion, the late arrival of the environmentissue on the public agenda, the slow incor-poration of channels for public participa-tion and dialogue with non-governmentorganizations, and the accrual of an envi-ronmental debt – resulting from the formerabsence of protection – which both socie-ties have had to confront since the begin-ning of the present decade.

Nevertheless, they also provide plentifulillustrations of substantial differences withregard to factors such as the role and lead-ership of the State, capacity-building proc-esses, priorities for environmental instru-mentation, the relationship between theState and industry, and the strategies morerecently adopted by companies under pres-sure to maintain or improve their positionin international markets.

Having identified existing capacities, thestrategies of various actors, and the maininstruments of environmental policy alongwith their performance to date, these pa-pers will in each case single out a numberof elements for the actors (State, compa-nies, institutions) to consider in seeking aframework of protection and an environ-mental balance which will allow them toreconcile aspects of competitiveness andsustainability within their developmentmodels and productive structures.

6 CLAUDIO MAGGI

COMPETITIVENESS ANDENVIRONMENTAL POLICY INCHILE

Elements for a Diagnosis

Claudio Maggi, INEF

1. General purpose and sum-mary of conclusions

According to World Bank statistics, Chilecurrently ranks as an upper-middle incomedeveloping country. Its annual per capitaGNP is around US $5,000 (Central Bankof Chile; 1998), and adjusted to purchasingpower parities, it rises to around US $9,500(WB, 1997).However, the distribution of income ishighly concentrated among the richer seg-ments of the population, so that by 1994the poorest 20% only received around3.5% of national income. According toWorld Bank estimates for the period be-tween 1981-95, 15% of the Chilean popu-lation were still living below the povertythreshold for smaller incomes of US$1 aday. This indicator compares unfavorablywith countries with a lower per capita in-come, such as Colombia or Jamaica, and itis equivalent to that of Mexico (WB,1997).The present paper deals with current envi-ronmental policy in Chile and the part ithas played in promoting competitive andsustainable production patterns and prac-tices in domestic industry. The central con-clusion is that up to now the main incen-tive for any developments in the strategiesand investment projects of larger compa-

nies has come if anything from other fac-tors, such as the requirements of externalmarkets or the internationalization of theeconomy. The government, for its part, hasfocused its efforts since the current envi-ronmental legislation entered force on:first, improving and expanding the legalframework with regulations and standardsof a more specific nature, whose imple-mentation has been rather slow; second,resolving severe problems of environ-mental deterioration1 primarily by meansof command and control measures; third,setting up CONAMA, a governmentagency responsible for ensuring a coherentpublic agenda and coordinating the regu-latory and monitoring agencies which ad-dress environmental issues; and fourth,performing an active participation in inter-national environmental forums and agree-ments.However an obvious delay regarding envi-ronmental matters persists among non-exporters and SMEs, partly due to thetardy design and implementation of newnorms and standards, partly to a poor un-derstanding of its interaction with regula-tory and monitoring bodies (generally per-ceived as punitive entities with neither thecapacity to assist nor the remit to prevent).Another factor is the even weaker link-upwith other institutions involved in technicalconsulting and promoting integrated ap-proaches to competitiveness andsustainability, such as clean production oreco-efficiency. In this segment of compa-nies there is a widespread lack of informa-tion about the scope of specific regulationsand also about networks of potential insti-tutional support. Thus, while there is con-

1 For example, the special program to improve

air quality in Santiago; the PRAT programto rehabilitate Talcahuano´s Bay; and theremediation plan for agro-forestry lands.

COMPETITIVENESS AND ENVIRONMENTAL POLICIES IN CHILE 7

cern about possible sanctions, initiativestowards environmental improvements re-main rare, if not the exception. Even in thefew cases where SMEs have invested inenvironmental improvements, the solutionschosen have often not been the most ap-propriate given their core products, proc-esses, and the scales involved. This indi-cates that market failures are occurring dueto “immaturity” in the current supply ofenvironmental technologies in Chile.As for pollution control measures and theregulation of investments with an envi-ronmental impact, recent efforts and ad-vances should be recognized, in particularimplementation of the System of Envi-ronmental Impact Assessment (SEIA), andthe implementation of special environ-mental remediation plans coordinated byCONAMA. However, inadequacies stillremain in the public institutions, with aweak regulatory framework governingmany sectors, and often precarious institu-tional support for business strategies aimedat achieving environmental compliance.Environmental policies have proved effec-tive to some degree in improving criticalenvironmental problems which confrontedthe government in the early nineties as aresult of widespread deregulation and non-existent environmental policy during themilitary regime. However, the current setof instruments is still far from demon-strating that it can instigate a competitiveand environmentally sustainable path forgrowth.Its credentials will depend on the country’sability, through its various actors, to makesubstantial advances in the following areas:1) Enhancing the current regulatoryframework. Priority should be given todesigning and updating environmentalstandards. It will be especially important toexpand and update laws relating to extrac-

tive activities like mining, fisheries andforestry, given Chile's strong productiveand export focus on natural resources. Inaddition, debate should begin in the gov-ernment and among politicians about scopefor including environmental considerationsin the design of economic policy mecha-nisms such as taxation and subsidies.2) Strengthening public environmentalinstitutions. Current deficits and institu-tional weaknesses must be overcome toexisting environmental policy instrumentsmore effective. Priority should be given torecognizing the high transaction costs in-herent in the coordination function thatCONAMA performs within the publicsector and in its interaction with industriesand civil society. More resources must thenbe assigned to CONAMA to build its tech-nical and professional capacity and supplyit with methodological tools to deal effec-tively with its multiple tasks at nationaland regional level. Similarly, it is impor-tant to strengthen supervisory and moni-toring functions in the environment fieldand improve links between regulators,technical monitoring bodies, industrialchambers, trade unions, employers' asso-ciations and intermediate entities engagedin technical environmental support andconsulting for companies. One initiativethat public institutions could and shouldpromote is the formulation of incentivesand sanctions, such as voluntary agree-ments on environmental action involvingproductive industries or groups of compa-nies together with inspectors from supervi-sory and monitoring agencies and otherintermediates. A third role for the publicinstitutions is to disseminate more infor-mation on environmental issues. Thisranges from arbitration in environmentalconflicts and keeping citizens informed tocirculating information in environmental

8 CLAUDIO MAGGI

markets by means of accreditation systemsabout consultancy, equipment and tech-nologies. The public sector can performanother similar function by playing a moreactive role in promoting environmentalcertification systems and eco-labelling.This, after all, results in better informationfor the consumer, while at the same timehelping to improve the competitiveness ofnational industries in international markets.3) Reinforcing and linking institutionsengaged in environmental research,promotion, and support for public andprivate environmental management. InChile there are still not many bodies with abackground in environmental research,development, and technology transfer todomestic industry, and those that do existare often running below capacity, lack co-ordination, and have little tradition ofworking together, either because some arerecent creations or because cofinancingschemes at public level (mainly competi-tive funding for projects) have not stimu-lated broader recent efforts to achieve ade-quate links between these meso-level in-stitutions; on the contrary, in some casesthese schemes seem to encourage frag-mentation. Networking between these in-stitutions must be stimulated and they mustlearn to address the productive sector in amore coordinated and efficient manner.Another good practice to promote is theregular exchange of experience in success-ful cooperation between these institutionsand industry, as well as groups expressingpublic opinions and the media. In thissense, information has all the qualities of apublic asset, and the state, in its third fieldof functions described above, should ac-tively support its diffusion.It might be argued, incidentally, that al-though many problems persist on Chile'scurrent environmental policy agenda and

still await solution, this may turn out to bean excellent opportunity to avoid the pastmistakes of public environmental admini-strations in other countries, which in prac-tice have been real obstacles to imple-menting high common standards of com-petitiveness and environmentalsustainability. In other words, Chilean en-vironmental policy still has many chal-lenges to tackle and problems to solve, buthaving come so far in its design and regu-latory framework it should not constitutean obstacle to achieving the best interna-tional practice in this field.Section 2 will describe the current legisla-tive and institutional framework of recentChilean environmental policy, its antece-dents, economic context, principles, scope,operation, and decision-making mecha-nisms. It will also examine the currentstatus of two key environmental policyinstruments: the design and implementa-tion of environmental standards, notablyfor water resources, and the system of en-vironmental impact assessment (SEIA).Section 3 will analyze current Chilean en-vironmental policy, considering the actorsat the macro-, meso-, and microlevels, theirstrategies, contexts, and interactions. Thisanalysis will be illustrated by an appropri-ate environmental problem, in this caseforest certification.Finally, Section 4 will single out somecritical aspects and consider how environ-mental trends in external markets might becombined effectively with domestic regu-lations to drive environmentally sustain-able processes and technologies which, inyears to come, will lend a competitive edgeboth to companies and to the country as awhole.


2. The legislative and institu-tional framework of Chileanenvironment policy

Chile is certainly a "latecomer" in envi-ronment policy and in the development ofinstitutional capacity to design and admin-ister this policy. Since the early nineties,when the opposition alliance succeeded themilitary regime, explicit reference has beenmade to environmental issues when for-mulating public priorities. However, theruling coalition recognized that the admini-stration of environmental affairs is embed-ded within an agenda embracing severalother problems that also require appropri-ate solutions, e.g. poverty and improve-ments in education, health, and basic andindustrial infrastructure (Escudero, 1996).If we look back over the milestones todate, we find sound evidence for this be-lated entry of the environmental questioninto the public agenda: It was not until theend of Patricio Aylwin's government, in1993, that the country was given an ex-plicit formulation of fundamental envi-ronmental policy, which took effect in1994 as a Framework Law ("Ley marco").This Law marked the beginning of a com-plex process, with the establishment ofnew standards, regulations and more spe-cific environmental instruments, and it wasnot until January 1998, when the govern-ment issued the first official document onstrategic targets for Chilean environmentpolicy, that 14 environmental issues wereidentified in fairly general terms for thecountry to tackle in the medium term.2

2 These topics are: Integrated water resource

management; conservation and sustainableuse of biodiversity; definition of the regula-tion and management of renewable naturalresources; environmental certification forChilean products; territorial managementand planning; quality of urban life; environ-mental policy for the mining sector; energy

Similarly, environmental awareness is newin Chilean society. It began to make itselffelt in the latter half of the eighties, whennewly arising problems became visible,e.g. air pollution in Santiago,3 the satura-tion of rivers and bays due to water pollu-tion, and conflicts about the collection anddisposal of household garbage and indus-trial waste in the country's biggest cities.However, it was not until the early ninetiesthat the environmental debate began toaffect public opinion, as new environ-mental problems continued to emergewhile older ones grew critical. Moreover,democratic transition opened up morechannels of public information (Rodgers etal, 1998)

2.1 General antecedents and eco-nomic context

For a better understanding of how envi-ronmental concerns are integrated in thecountry's main strategy to enhance nationalcompetitiveness, it is worthwhile placing

and the environment; recovery of environ-mental debt; commitment to global envi-ronmental concerns and their implications inChile; supervision and enforcement of envi-ronmental regulations and standards; envi-ronmental education and changing culturalpatterns; collisions and overlaps betweenprivate rights and public environmental inte-rest; environmental considerations in de-signing economic policy instruments. Secti-on 4 gives more details about nine of thesepoints.

3 Estimates suggest that industry and publictransport release approximately 16 metrictons of particles per day into greater Santia-go´s atmosphere. Industry adds about a-nother 110 tons of SOx per day. Particulateconcentration in Santiago averages over 100micrograms per cubic meter per day. On cri-tical winter days this index can surpass 300,while the standard permitted in the UnitedStates is 50 (quoted in Silva, 1997).

10 CLAUDIO MAGGI

them in rough context, starting from thedevelopment strategy adopted by Chile bythe mid- seventies. Earlier than anywhereelse in the region, this strategy with itsstrong neoliberal bias was used to deregu-late markets and unilaterally open up theeconomy to international trade.This first stage ended abruptly with thecollapse of the economy between 1981 and1982 due to the country's excessive foreigndebt (mainly the private sector) and a dropin the investment rate (under 15% of GNP)which, combined with steep rises in inter-national interest rates, inhibited any newinflux of external capital and threw thecurrent and capital accounts deficit, al-ready high, so off-balance that a deep crisishit the national financial system, leading toan economic contraction of more than 14%of GNP.From that point onwards the military re-gime, upholding the neoliberal principlesof deregulation and open trade, adopted astrategy based on boosting exports bypromoting a high exchange rate, directbenefits to the export sector (such as directdraw-back mechanisms), as well as wage,fiscal, and monetary policies that priori-tized the control of inflation, which fellduring that decade to annual levels of be-tween 12 and 20%, significantly lower thanthose registered in the previous decade.By the end of 1997, as a result of this strat-egy which the democratic governmentsessentially continued, the Chilean economyhad witnessed thirteen consecutive yearswith average GNP growth rates of around7% per annum, constituting the best periodin its economic history this century. Theinvestment share of product grew from17.1% in 1986 to 28.3% in 1996. Savingslikewise increased from 11.5% of GNP toan average of 24.8% in the period between1990-1996. Inflation, meanwhile, exhibited

annual 1-digit rates from 1994 onwards,and is presently at an annual level ofaround 5%.As the strategy intended, exports of goodsand services became a driving force in theeconomy, reaching an average share of36% of GNP in the period 1990-96, calcu-lated on the basis of constant 1986 prices(Meller and Sáez, 1996, in Rodgers et al.,ILO, 1998).Export stimuli combined with the neolib-eral view that markets are the sole guidingforces of the economy, while the state isrelegated to subsidiary roles and its regu-latory function pruned to a minimum,meant that the exporter dynamic shiftedmassively toward natural resources orcommodities with an intensive input ofthese resources, in sectors where the coun-try enjoyed either comparative advantagesof a static nature (Pietrobelli, 1992) or ad-vantages created several decades ago as aresult of medium-term initiatives (Castilloet al., Cepal, 1995; Pérez-Aleman, 1997).Excluding services, which in 1996 ac-counted for 20% of total exports, exportsof merchandise in 1996 broke down ac-cording to the following pattern: 57% natu-ral resources, 32.8% manufactures inten-sive in natural resources, and only 9.5%other manufactures. Another indicative factfor that same year is that, although morethan 3,600 different Chilean products wereexported, the top ten (essentially productsrelated to mining, forestry, fishing andfruits) accounted for no less than 56% ofthe total value of exports.In recent years this highly specialized pat-tern of products primarily for export hasconsiderably increased pressures on thecountry’s existing natural resources. Notonly is this a threat to prospects for sus-tainable economic growth, given a foresee-able loss of productive potential for both


renewable and non-renewable natural re-sources and a growing impact on employ-ment and incomes, but in addition to thisthe environmental degradation caused byoverexploiting these natural resourcescould exert a negative impact on thehealth, productivity and quality of life ofthe human population and on the biodiver-sity of ecosystems, leading to environ-mental distress which, if it can ever be re-versed at all, will call for a very expensiveand slow process of repair (for further de-tails see Silva, 1997). Even the governmenthas recognized this in defining it as one ofthe 14 components of the future environ-mental agenda (CONAMA, 1998).This intensive exploitation of renewablenatural resources (in Chile’s case mainlyforestry and fishing, whose direct contri-bution to GDP is almost 8%) not onlyposes a severe threat to environmentalstandards and to the sustainability of thecountry’s road to growth; in more immedi-ate terms, it undermines the acceptabilityof Chilean products in the internationalmarkets at which they are targeted.Most of these primary exporter industriesalso present investment structures withclear environmental impacts, either due tothe size of the projects (frequently mega-projects worth over US $500 million), or topronounced interaction with the ecosys-tems where they are located, or specifically(in forestry and fishing), to the way theycan affect the existing stock of renewablenatural resources (Scholz et al., 1994).The above reasons suggest that environ-mental debate should not focus only ontopics of more immediate visibility to civilsociety, such as urban contamination andpublic health, but also on how the coun-try’s renewable natural resources are ex-ploited and on the larger investment proj-ects, most of them concentrated in sectors

with a great environmental impact, such asmining, forestry, fisheries and power gen-eration. As the following sections willshow, current regulations also seek to re-flect these priorities.

2.2 Historical regulations and cur-rent legal framework

Chilean legislation includes laws on con-serving natural resources and sanitaryregulations on protecting environmentalhealth which date back to the earliest dec-ades of the present century. However,these regulations were never part of a sin-gle or consistent legal corpus. As a result,they were inorganic in character, dispersedacross different sectors and subject overtime to successive modifications, and dur-ing recent decades there was such wide-spread public and private ignorance abouttheir applications and consequences thatthey were rarely observed, while enforce-ment and monitoring suffered from evidentdeficiencies. (CONAMA, 1998)With this legal framework, public institu-tions devoted to environmental matterswere on the whole scattered and poorlycoordinated. No major changes occurred inthis overall situation until 1990, except foran explicit reference in the Political Con-stitution of 1980 (still valid) to the citizen'sright to live in an unpolluted atmosphere,and to the state's duty to guarantee thisright and to conserve the environmentalheritage. In spite of all this, the only steptaken by the military regime to complywith this constitutional obligation was thecreation in 1984 of the National EcologyCommission with a remit to formulate anational environment policy, a task it nevercompleted. (Silva, 1997)As there was no explicit legal hierarchy orinstitutionalized remit for carrying out the

12 CLAUDIO MAGGI

state's obligations as enshrined in the Con-stitution of 1980, when the democraticgovernment took power in 1990, it under-took to build the legal and institutionalfoundations for a fully-fledged environ-ment policy, and also to generate technicalcapacities in public administration andchannels of participation for citizens tovoice their concerns about the seriousproblem of pollution and the overexploita-tion of renewable natural resources, whichthe state had accepted until then as thenecessary price to pay for targeted produc-tion and export growth, as reflected in themilitary government's economic strategy.(CONAMA, 1998)In March 1994 (a few days before Mr.Aylwin's administration came to an end),the Environmental Foundations Act(LBGMA) came into force. This law con-stitutes a first reference point in a new ju-dicial order governing the country's envi-ronment. It establishes guiding principlesfor regulating various conflicting interests,based on the premise that no activity maybe carried out which violates environ-mental sustainability. The law itself doesnot cover specific issues; rather, it sets up afunctional framework and institutionalresponsibilities, as well as principles andprocedures for applying present and futureenvironment legislation.

2.3 Driving principles and selectedinstruments of environmentpolicy in Chile

Seven principles inspired the formulationof the LBGMA and, in consequence, thecurrent framework for Chilean environ-ment policy. These were:1. Gradual approach: This principle

establishes that managing the envi-ronment should be implemented step

by step, given that reversing any deg-radation and reconciling "progress"with conserving the environmentalheritage may call for more far-reaching interventions than thosetriggered by short-term measures.

2. Realism: The objectives of environ-mental administration should becompatible with true capacity and re-sources available to the state to per-form regulatory and monitoring func-tions. Although the perspective is dif-ferent, this principle ultimately hassimilar practical to the gradual ap-proach described above.

3. Prevention: The aim is to avert envi-ronmental deterioration before it oc-curs by means of appropriate envi-ronmental education, ex-ante systemsof environmental impact assessmentfor all new activity or investment,pollution prevention schemes and aclear demarcation of responsibilities.

4. Polluter pays: This is the principlethat whoever potentially creates envi-ronmental damage must take account,in pricing the goods or services theywish to produce, of the cost of in-vestments and measures required tocounter pollution or to meet the stan-dards laid down in the regulations.

5. Responsibility: This complementsthe previous principle by stipulatingthat anyone responsible for environ-mental damage must compensate thevictims and restore the polluted me-dium (soil, water, air, other).

6. Efficiency: This urges that policymeasures to combat environmentaldegradation should incur minimum so-cial cost, giving preference to market-driven instruments and avoiding in-creased pressures on the state budget.


7. Civic participation: This outlines theneed to encourage the direct participa-tion of those affected and of differentstakeholders in decisions concerningthe approval, rejection or regulation ofprojects and initiatives that may causean environmental impact, and to en-sure regular channels for environ-mental information and education.

The gradual, realistic and efficient compo-nents are clearly intended to preclude fun-damentalist approaches to environmentalregulation and ensure that some considera-tion be given to existing state capacity foraction on environmental matters, whilereaffirming the central pillars of the com-petitive strategy adopted by the country inthe recent past: sustained economicgrowth, commitment to market mecha-nisms as the main instrument for allocatingresources, and a strictly subsidiary role forthe state, with explicit limitations on itssize and a strong emphasis on its effi-ciency. As we shall see below, this self-imposed restriction on the public actor hasbeen the cause of harsh criticism whenevaluating the effectiveness of Chileanenvironment policy, given the size andpower of the companies and investors in-volved in recent conflicts. On the otherhand, it might also be argued that withoutthese principles of political moderation andpragmatism, conflict triggered by abruptmeasures might in many cases have pre-cipitated a legislative impasse rather than asolution.Practice around the preventive principlestarts with the LBGMA itself. This estab-lishes the duty to provide an environmentalimpact assessment report for any invest-ment project, public or private, whether itis based on national or foreign capital, if itexceeds a certain financial volume or envi-

ronment threshold4. The purpose of thisevaluation is to ensure that any costs nec-essary to accomplish environmental stan-dards and minimize impacts on third par-ties are covered. The system of environ-mental impact assessment (SEIA) is de-scribed in detail in the Act, and so far it isthe principal instrument of environmentpolicy in Chile. Besides improving theenvironmental standards of the projects, itis hoped that the SEIA will accumulate abase of institutional knowledge. Moreover,the SEIA is expected to act as a safeguardwhich helps to strengthen Chile's competi-tive credentials in world markets (Silva,1997).The principles of responsibility and pol-luter pays are intended to ensure that anyagent failing to comply with environmentaltargets internalizes the costs incurred,rather than leaving this to the state. Thelaw is clear that whoever causes the pollu-tion should pay the costs of repairing thedamage and preventing future pollution orenvironmental degradation. In practice,however, it is not always easy to establishwho is responsible for particular environ-mental damage, which means that respon-sibility is often evaded. To reinforce theseprinciples, two additional policy instru-ments have been proposed, similar to tra-ditional "end-of-pipe" command and con-trol practices: one, a classic stick-and-carrot scheme, is for companies to signvoluntary agreements individually or col-lectively, whereby the authority refrainsfrom collecting duties or applying sanc-tions as long as industry implements an

4 The typology of projects subject to SEIA is

described in detail in the SEIA regulation. De-pending on their nature and the media and pro-cesses involved, there are many different thres-hold values which determine whether the pro-ject must be submitted for assessment.

14 CLAUDIO MAGGI

environmental program previously drawnup by both sides. The second instrument isto generate a market mechanism in theform of tradable pollution permits. Thefirst step in this direction has been to im-pose a legal duty to declare emissions, inthis instance atmospheric particles andarsenic in Santiago's Metropolitan Region(Escudero, 1996). However, the rare inter-national experience which has been gainedwith these types of instrument shows that,although they work in theory, their admini-stration and control is not at all simple, sothat they seem unlikely to be retained incoming years.Finally, the principle of civic participationamounts initially to the creation of advi-sory boards at both national level and ineach of the country's thirteen Regions.These are formal platforms of consultationand support for the National EnvironmentCommission CONAMA. These advisorybodies consist of university scientists, re-searchers from independent centers, em-ployers' and workers' representatives,NGOs and the government. The presidentof the national advisory board is the StateSecretary of the Presidency, who is alsopresident of the directive board ofCONAMA. In the Regions, each board ischaired by the respective Head of RegionalGovernment (Intendente). This principlehas also influenced the decision structuredefined for CONAMA under the LBGMA,which assigns most decision-making to theregional levels, thereby fostering a decen-tralized structure in a state with a strongcentralist tradition.The Regions have so far displayed differ-ent degrees of progress in consolidatingtheir institutional agencies and adoptingspecific schedules for regional environ-mental policies (CIPMA, 1988). At presentmany critics argue that, on the basis of

recent experience, it is not enough to set upinstitutional channels for civic participa-tion if these are not flanked by systematicmechanisms. Across a broad range of is-sues, the lack of method tends to createconsiderable frustration amongstakeholders about the decisions which areultimately adopted. This applies both to theresolution of environmental conflicts andto polling opinions prior to defining orimproving standards, laws and instrumentsof environmental policy.

2.4 Creation and functions of theNational Environment Com-mission CONAMA

The main institutional provisional con-tained in the Environmental FoundationsAct (LBGMA) was the creation of a Na-tional Environment Commission, orCONAMA. This commission is a decen-tralized public agency whose basic func-tions are:1. to propose and coordinate public ad-ministration in the design and implementa-tion of environmental policies and specificmechanisms;2. to operate the SEIA;3. to coordinate the generation of environ-mental regulations and the definition ofregular and special programs, includingtheir terms of implementation; and4. to promote the participation of the pri-vate sector and civil society in environ-mental issues.It is important to note that CONAMA'srole in generating environmental regula-tions and standards is basically to coordi-nate the state apparatus, since approval is amatter for the different Ministries, throughtheir own technical and legal departments.Reflecting these functions, CONAMAtakes the form of an inter- ministerial


committee whose main decision-makingbody is the Board of Directors, consistingof 13 ministers and chaired by the StateSecretary of the Presidency. The latter is aminister who might be defined as head ofthe President's technical cabinet and whosetask is to coordinate government actionacross the different ministries and publicservices. The Executive Director ofCONAMA acts as secretary of the Boardof Directors.At regional level CONAMA is organizedthrough Regional Environmental Commis-sions, or COREMA, which are semi-autonomous. Each has its own Board of

Directors which, reflecting the structure ofthe national Board, is chaired by the Headof Regional Government (Intendente, des-ignated by the President in each Region)and consists of the regional ministerialsecretaries, four elected consultants for theRegional Council and the Regional Direc-tor of CONAMA, who acts as theCOREMA secretary.The decisions taken by the national andregional boards find expression in agree-ments, which are then complemented byinstructions which each member passes onto the organisms within his or her remit.

Regional implementation of national boardagreements is coordinated by eachCOREMA Director.We can see from thisthat CONAMA is a technical governmentagency which channels public participationtowards elaborating and recommendingagreements which are then approved by theappropriate board at national or regionallevel. To perform these functions, it is as-sisted by advisory councils and a national

staff composed of around 45 professionaland managerial employees and about 20technical and administrative employeesacross the country. In practice, the team issomewhat bigger thanks to third-party orloan-financed support personnel, mostlyspecialists, sometimes working withCONAMA on the basis of internationalagreements on technical cooperation.

CONAMA ORGANIC STRUCTURE( N a t i o n a l D i r e c t i v e B o a r d : P r e s i d e s S t a t e

S e c r e t a r y o f P r e s i d e n c e )

National Advisory Board

Coordinates: Director CONAMA

National Director

Regional DirectiveBoards

Operational Committes

Regional Advisory Boards

Coordinates:Directors COREMA

Regional Directors

Reg.TechicalCommittes

16 CLAUDIO MAGGI

Nevertheless, this is a small work force totackle the wide-ranging tasks of coordina-tion and administration expected of theCommission. Since its creation, therefore,CONAMA has been provided with addi-tional resources from credits and interna-tional grants. The main source is a WorldBank credit worth US$11.5 million, effec-tive since 1993, for developing environ-mental institutions in the public sector. Thepriorities of this program, due to culminatein 1998, are: to support CONAMA's Stra-tegic Plan in the fields of environmentallegislation, SEIA administration, environ-mental education, coordination with otherpublic agencies and reinforcement of theexecutive tier; and to strengthen environ-mental institutions in those sectors re-garded as high-priority, i.e. forestry, min-ing and manufacture.Another large operation was concludedwith the IDB through the Multilateral In-vestment Fund (MIF). It is a grant forUS$2 million, and unlike the World Bankcredit, it is intended, via CONAMA, tobuild private institutions to train and assistindustries in promoting and implementingstandards and regulations now and in theimmediate future (Escudero, 1996).It is essential to realize that the responsi-bility for monitoring compliance with envi-ronmental standards and laws lies eitherwith the regional agencies of public ad-ministration, such as regional environmentand health authorities, municipalities, ormarine inspectorates, or with sectoralagencies such as the National FishingAgency, National Forestry Corporation,Agricultural Agency, General WaterAuthority, etc.).The conception of CONAMA as a coordi-nating body for environmental policieswhose enforcement and supervision is thedirect responsibility of the appropriate

sectoral and territorial agencies has par-ticularly attracted the interest of other latinamerican countries like Guatemala andBolivia, whose governments are just be-ginning to implement environmental poli-cies. It is a model which taps sectoral re-sources from different ministries and drawson mechanisms which facilitate the repre-sentation of diverse opinions in society bymeans of advisory bodies, systematicallyincorporating different components intothe environmental programs and regula-tions which are adopted. (Zazueta, 1995)In the case of CONAMA, given limitedstaff and resources, a first challenge hasbeen to address domestic and internationalpressure for more civic participation byfostering the creation of spaces for dia-logue and thereby helping people to recog-nize environmental reforms as opportuni-ties rather than threats.However, Chile's inexperience in dealingwith environmental conflicts in both thepublic and private arenas, the very magni-tude of these conflicts, the frequentlyasymmetrical balance of power betweenthe stakeholders involved, and a wide lackof leadership training among CONAMAstaff when it comes to the knowledge andskills required to drive civic dialogue, havecombined to raise questions about the le-gitimacy of existing channels for publicparticipation, and often the frustration runsas high as the expectations.The design and structure of CONAMAhave enabled it to fulfil its function ofidentifying inter-sectoral and inter-territorial problems and also of monitoringthese. However, a recurrent problem isposed by the high transaction costs in-curred by coordinating a number of outsideagencies, especially cohesion has to becreated around the action of different bod-ies. Evidently, too, there is limited capacity


to drive dynamic decision-making and toresolve conflicts and differences betweenthe various actors.

2.5 Status review of environmentalpolicy: two examples

To illustrate in more concrete terms howpublic environmental administration hasevolved in Chile, this section will brieflydescribe two key environmental policyinstruments and some recent advances thathave been made. The first example refersto the design and implementation of envi-ronmental standards, which are basicregulatory instruments in any environ-mental policy. It would exceed the scopeof this document to address the full diver-sity of these norms, and so we will confineour remarks to the specific case of waterresources in the context of industrial activ-ity. The second example relates to theSEIA, the most important preventive in-strument for which present legislation pro-vides.

a) Environmental standards for waterThe LBGMA attributes a responsibility toCONAMA to coordinate the various proc-esses aimed at devising new standards andmodifying existing ones. Standards are theprincipal regulatory instrument applied bypublic environmental administration. Envi-ronmental standards may be primary, i.e.serve the protection of human health, andin this case they are uniform throughoutthe country; or they may be secondary, i.e.protect other components of the environ-ment, and these can be restricted to spe-cific territories.According to CONAMA (1998), the pol-lution of water resources in Chile is pri-marily caused by the direct discharge,without previous treatment, of used house-

hold water and industrial liquids residuals(ILR) to the surface of rivers and the ma-rine coast. A second, derived source ofpollution are diffuse discharges from agri-cultural and forestry activities that indi-rectly enter surface or subterranean waterbodies.There are 27 significant hydrographic ba-sins in the country. Water courses herereceive the types of discharge mentionedabove. Those recording higher levels ofpollution are located close to the largestcities: the basins of Elqui (IV Region),Aconcagua (V Region), Maipo and Mapo-cho (Metropolitan Region), Rapel (VI Re-gion), Maule (VII Region), Biobío (VIIIRegion) and Valdivia (X Region). As formarine waters, the main problems are con-centrated along the coasts of Valparaíso–San Antonio, through the Río Maipo withdischarges from the Metropolitan Regionwhere over a third of the country's popula-tion live, and Concepción–San Vicente,through the Río Biobío.Chile's lakes are concentrated in the south,and most of them do not yet show signs ofeutrophication, which results from the ex-cessive input of nutrients and an accumu-lation of heavy metals. (CONAMA, 1998;Mideplan, 1998)Despite broad but fragmentary legislation,most of it local in scope (municipal ordi-nances), and the long-standing SanitaryCode regulations, enforced by the Ministryof Health, which in the main date back tothe first half of the century, the followingstandards for water quality and emissionsapplied until the adoption of the LBGMAand the subsequent creation of CONAMA:- Chilean Standard NCh 777, 1971, issuedby the General Water Authority: regulateswater quality requirements for sources ofthe drinking water supply.

18 CLAUDIO MAGGI

- Chilean Standard NCh 1.333, 1978, is-sued by the General Water Authority: de-fines water quality requirements for spe-cific uses: human consumption, animalconsumption, irrigation, recreation andaquatic life.- Temporary Standard, 1992, issued by theHealth Supervisor: concerns discharges ofliquid residuals to surface bodies of water.When the LBGMA was drafted in 1994,the distinction between environmentalquality standards and emission standards asdirect regulatory instruments applied bythe environmental administration createdan opportunity to supplement the olderregulations laid down as described by theSanitary Code, Mining Code and munici-pal ordinances.CONAMA channeled its response throughthe Prioritized Regulation Programs (PPN),where new regulations are prepared andexisting ones revised in priority areas de-fined on an annual basis. By 1998, 22regulations had been prioritized and estab-lished in the first three PPN (period 1996-1999). Analyzing these programs, we ob-serve that the major prioritization factor inthe first PPN was the availability of infor-mation on which to base implementation.The tendency in the second PPN was thento extend the discussion to new problemswhere, even if information was deficient,there was at least agreement from theregulatory perspective about the urgency oftackling the issue, studies having cast lighton the unresolved aspects. In the case ofthe third PPN the tendency was to providea supporting framework for other environ-mental administration instruments, in par-ticular the environmental RehabilitationPlans for the Metropolitan Region and Tal-cahuano, PRAT. (CONAMA, 1998)As for water, the first PPN (1996) priori-tized primary water quality standards, the

discharge emission of liquid residuals(ILR) into sewer systems, and the dis-charge of liquid residuals into surface wa-ters. In addition, six related secondarynorms were prioritized, regulating chro-mium, molybdenum, other heavy metals,detergents, sulfates, and silts, among otherpollutants.The second PPN prioritized quality stan-dards (as a complement to emission tar-gets) for water courses and surface waterbodies, and quality standards for irrigationwater. The third PPN prioritized, amongother things, discharge standards for ILR insewer systems, and standards for marinewaters in the Region of the Biobío (whereTalcahuano is located).However, only three norms had been ap-proved by the first half of 1998: one onnoise; one on primary air quality and par-ticulate matter; and one on ILR. The latterwas to be the first new regulation govern-ing water resources, and as it is directlylinked with industrial activity, a theme ofconcern here, we will consider its contentand scope.The regulation governing ILR discharge tosewer systems entered force during thesecond half of 1998. It stipulates that newindustrial activities are obliged to complywith its provisions and sets a compliancedeadline of one year for industries whichdischarge ILR into sewer networks if theyalready have treatment plant, and two yearsfor industries without treatment plant.Moreover, it stipulates that ILR must notcontain radioactive, corrosive, poisonous,infectious, explosive or inflammable sub-stances, and it limits the daily dischargewith regard to oil, fats, aluminum, ammo-nia, arsenic, boron, cadmium, cyanide,copper, total and hexavalent chromium,hydrocarbons, phosphorous, mercury,manganese, nickel, leads, foams, solid


silts, suspended solids, sulfates, sulfurs,zinc and temperature.The regulation provides that the silts orsludge generated by ILR treatment mustnot de discharged into the sewer system orany other site if they do not meet prevail-ing standards for solid residuals. It alsodefines maximum volumes for daily aver-age discharges in relation to network ca-pacity, and this must be agreed in eachcase with the local water company.Monitoring compliance with these stan-dards is the task of the water compa-nies5,which also have the right to suspendthe collection of ILR if this compromisesthe quality or continuity of the publicservice. The Health Supervisory Body (asthe public entity which regulates the op-erations of the water companies) is em-powered to inspect and enforce compliancewith the regulation.Finally, it should be mentioned that theregulation on pollutant discharges of liquidresiduals to surface waters (which com-plements to above regulation on dischargesinto sewer networks) was heading towardsdefinitive adoption during the last quarterof 1998.This extremely brief review of advances inthe design and implementation of envi-ronmental standards for water and its useeloquently illustrates two things: first, thatthe process of designing environmentalregulations is structured around prioritizedschedules, that it is consistent at nationallevel, and that it takes account of for andmechanisms of consultation which, how-ever effective, do exist and function, al-

5 Known in Chile as "empresas sanitarias".

Currently they are beginning a complex pri-vatization process which as a first step en-tails the sale of the water companies opera-ting in the most populated Regions: V (Val-paraiso), VIII (Biobío) and the MetropolitanRegion (Santiago).

lowing CONAMA to accumulate institu-tional know-how in an attempt to promotegood practice as well as simple successfactors. The second thing revealed by thisexample is that the process of generatingenvironmental regulations in Chile is ex-tremely slow. The reasons are probablymultiple, and many can be attributed toexternal organisms rather than CONAMA.However, as part of its task as an interdis-ciplinary coordinator, this Commissionshould consider improving the process ofestablishing environmental regulations,since these instruments are key to promot-ing integrated environmental managementamong local companies.

b) System of Environmental Impact As-sessment (SEIA)The LBGMA created the SEIA as its maininstrument for preventing environmentaldamage or industrial non-compliance.The Environmental Impact Assessment is acompulsory evaluation study, or declara-tion in the case of smaller investments. Itsapproval has to be obtained before a proj-ect can be launched, be it public or private,financed with national or foreign capital, aslong as any process, substance or effect isinvolved (such as gas, liquid or solid emis-sions, or noise) which may have an impacton the environment.Submission of an EIA study is obligatory ifany project component or process is likelyto reach or exceed a value or scale definedin the corresponding regulation.6

6 It contemplates minimum physical indexes

for: aqueducts, reservoirs, siphons, drainagesystems, drying surfaces, dredged defenses,power generation, central transmission lines,atomic reactors and related facilities, air-ports, terminals and roads or railroads, ports,navies, real estate projects in urban deve-lopment, mining, dry extraction, pipelines,gaseoducts or similar, diverse industrial fa-cilities (minimum limit determined by in-

20 CLAUDIO MAGGI

Projects on a scale which falls below allthe indexes laid down in the regulationmay opt to submit an EIA declaration or avoluntary EIA study.The SEIA is administered by CONAMAand the power to approve or reject a studyor declaration lies with its regional bodies,the COREMAs (see section 2).Besides assuring the environmental qualityof investment projects, the SEIA is ex-pected to create a base of institutionalknowledge for CONAMA, at the sametime acting as a credential for Chileanproducts and services in the internationalmarkets.The SEIA operated in voluntary form be-tween 1990 and 1994. By January 1999,836 studies and 232 declarations had beenpresented. Of this total, 553 were ap-proved, 412 went to review or appeal, 66were rejected, and the remainder werewithdrawn.To date, the total volume of investmentregistered under the SEIA amounts toUS$38.5 billion. It breaks down mainlyinto the following sectors: mining (38.3%);real estate/tourism (9.9%); industrialmanufactures (9.8%) and forestry (7.5%).Once projects are approved, the LBGMAholds the COREMAs responsible for coor-dination and monitoring. Currently thatwork entails a range of difficulties due tothe meager capacity of most COREMAs

stalled power or average consumption offuels), tanneries, agroindustries, slaugh-terhouses, facilities and cattle stables, deve-lopment projects and forest exploitation,cellulose plants, wooden factories, exploita-tion, cultivation and transformation ofhydrobiological resources, production, sto-rage, transport, disposition or recycling ofcorrosive toxic, explosive, radioactive, in-flammable or reactive substances, projects ofenvironmental reparation, execution ofworks in parks or natural protected areas,application of chemical products in urbanand rural areas.

and the limited support they can expectfrom the national body. The NationalCenter for the Environment (Cenma), ajoint initiative implemented in 1997 byCONAMA, the University of Chile andJapanese cooperation, is expected to pro-vide support for this function. (Cenma,1998)The principal criticisms raised about theSEIA to date concern, firstly, the timetaken to approve studies. Many investorsregard the process as a bureaucratic brakeon the mood of investment in the country,even though the regulation itself stipulatesclear conditions for approval. In spite ofthis, files are left waiting in the in-traywhile officers wait for more details, apractice which makes a nonsense of theestablished terms. The second criticismrelates to the bigger projects, where envi-ronmental impact is usually higher. Thesefrequently unleash differences of opinionin the weak regional structures ofCONAMA, the COREMAs, between pow-erful investors and groups representingvarious interests. This situation is analyzedin more detail in the following section,which considers different actors and theirstrategies in the light of environmentalproblems (government, enterprises).

3. Actors and their strategiestowards Chilean environ-mental policy

This approximate evaluation of the impactwhich present Chilean environmental pol-icy is exerting on the competitive strategiesof both companies and the country as awhole will draw in simplified terms on aframework of categories developed fornational case studies by the EnvironmentalPolicy Research Unit at the Free Univer-sity of Berlin (Jänicke and Weidner, 1995).


This approach distinguishes between thefollowing components, which interact inany system of environmental policy andwhich are recognized in chapter 37 ofAgenda 21 as decisive elements in a coun-try's capacity to develop productive pat-terns of sustainable development (cit. inJänicke, 1997). They are:1) actors,2) policy strategy,3) structural framework conditions,4) the situational context, and5) the environmental problems.Given the purpose of the present work,specific markets or sectors will not be con-sidered (even though the tools would per-fectly enable us to do this). Rather, we willlook in general terms at the first four com-ponents and the way they interact, tryingfrom a national perspective to identify pos-sible incentives or conflicts introduced byenvironmental issues into the competitivestrategies of economic agents and into thecompetitive performance of the countryitself. The fifth component will be ap-proached through a specific problem: theprimary certification of forest products (i.e.forestry exploitation patterns). As a spin-off, some arguments may well emerge forthe debate about the present effectivenessof Chile's environmental instruments, al-though that is not the purpose of thisanalysis.

3.1 Actors and Strategies

Five main actors can be identified on theChilean stage when we talk about highstandards of competitiveness and environ-mental sustainability. They are: i) the gov-ernment, responsible for the design and theimplementation of policy instruments; ii)the public authorities responsible formonitoring compliance with environment

regulations; iii) NGOs with environmentalconcerns; iv) chambers of industry andcompanies, and v) other civil societygroups.

a) The governmentAlthough the current basis of governmentenvironmental policy was described insection 2, along with the guiding princi-ples, the framework legislation (LBGMA),institutionalized support and regulatoryand preventive instruments, it is worthcommenting here on aspects of govern-ment action aimed at promoting competi-tiveness on the basis of sustainable pro-ductive patterns. These are:

a.1) attempts to internalize environ-mental costs: current environmental lawobliges economic agents to internalize thecosts of pollution or environmental degra-dation, by making them pay in full for pre-ventive measures and making those re-sponsible foot the bill for repairing envi-ronmental damage. However, the difficultyof attributing responsibility for real or po-tential environmental damage, coupledwith other weaknesses and institutionalinexperience, has meant that in practicecost internalization is at most partial. Mar-ket instruments to reinforce this strategy,such as the tradable emission permits, arestill under review, as it is not entirely clearhow easy they will be to apply, given lim-ited international experience in this field.On the other hand, the problem of inter-nalizing the costs of environmental pre-vention should in theory have been solvedby requiring a COREMA to approve anenvironmental impact assessment providedby a company manager or investor. Inpractice, if a project entails a major impactthe complex bilateral negotiation game isusually easy to win, with a rather weak

22 CLAUDIO MAGGI

regional public officer sitting on side of thedesk opposite highly competent profes-sional staff hired by powerful private in-vestors. These tensions are often reflectedwithin the state apparatus itself, where wefind the conflicting aims of promoting andfacilitating productive investments whileseeking to prevent their environmentalimpact. This is exacerbated by the fact thatregions tend to be responsible for the latterpolicy, and central tiers of government forthe former.

a.2) growing public expenditure on envi-ronmental measures: there are differentestimates of the total public expendituredevoted to environmental measures. Dur-ing the launch phase of CONAMA and therehabilitation plans formulated to combatpollution in specific areas, the Aylwin ad-ministration probably spent US$33 million,more than five times the total expenditureof the military regime on environmentalmatters (WIR estimate in Silva, 1997).However, this figure rises significantly ifwe consider all public spending on envi-ronment-related programs. For instance, in1991 total public expenditure on environ-ment-related measures rose to US$185million (Solari, 1993, quoted in Rodgers etal., 1998). In any case, whichever statisti-cal source and methodology is used, it isclear that the state had to increase envi-ronmental spending significantly as theonly way to deal with problems whichhave grown more acute in recent years,such as Santiago's air pollution, waterpollution in the north of the country due toextensive copper mining, and the need forreforestation and soil remediation in aridlands.State action has not, however, been con-fined to alleviating the worst environ-mental degradation. Two government

agencies set up to promote company man-agement, have devoted growing portions oftheir budget to subsidizing technical assis-tance for small and medium enterprises inmatters of environmental management andtechnologies (Corfo), and providing de-tailed information about environmentalrequirements in destination markets forexported products (ProChile). As environ-mental questions were raised about the useof copper in pipes and ducts (and almosthalf the domestic output of this metal isstill in state hands), Fundación ProCobreplayed an active role in the debate and inthe search for new uses, financed by con-tributions from the state company Codelco.Public resources have also been channeledinto encouraging upstream efforts in R&D,technology transfer, creation of know-howand even the temporary stimulation of do-mestic supply in immature markets (fore.g. laboratory analysis, environmentalaudits) using the network of public tech-nology institutes (Intec, Infor, Inn, Ifop andCiren), the Mining Research Center Cimm,Fundación Chile, and more recently, theNational Environment Center, Cenma.Most of the money from public resourcesfor these pre-competition environmentalmeasures is decided on the basis of com-petitive funds, and the institutes are re-quired to submit, among other things, aproject business plan which envisages atleast some future leverage of resourcesfrom the private sector.In spite of this range of government actionon the environmental front, evident defi-ciencies persist. One is the reduced com-mitment to research which can guidestrategies and priorities in the field of pub-lic administration. This has resulted in alack of basic information for decision-making in different environmental fields ofpublic administration and also in the man-


agement of other R&D institutions whenthey need to define and prioritize their fo-cal themes. The second deficiency con-cerns an apparent lack of communicationbetween the institutions which finance anddevelop pre-competitive and R&D projectsrelated to the environment. The massiveorientation of resources toward competi-tive mechanisms has strengthened this ten-dency, with different institutions vying forscarce funding. There is little incentive,therefore, to cover the transaction costsincurred by promoting and managing jointor even interlinked initiatives.

a.3) moves toward flexibility, decentrali-zation and coordination in the environ-mental administration: the LBGMA pro-poses various environmental policy in-struments whose use depends not only onenvironmental criteria but also on eco-nomic, technological and social factors.The express intention here is to avoid theclassic rigidity that characterizes most"command and control" instruments, espe-cially in technological matters. Other fea-tures, such as CONAMA's decentralizedstructure, the promotion of voluntaryagreements between the environmentaladministration and industry, and directinteraction between regulators and localmanagement, should encourage "stick andcarrot" schemes to induce companies tocomply with environmental standards.However, the first wave of regulations tobe triggered by the LBGMA have only justentered force, and it is to early to judge.As for intragovernmental coordination, inthe LBGMA and CONAMA's statutesregulators placed particular emphasis onestablishing mechanisms for permanentcoordination with the entire spectrum ofpublic bodies responsible for various pol-icy and sector regulations, and also with

authorities in the economic arena. The lat-ter was to be facilitated by an environ-mental coordination unit at the Ministry ofEconomic Affairs, which would, for exam-ple, maintain regular links with Corfo,ProChile and the technological institutions.It was this unit which generated the Na-tional Secretariat for Cleaner Production inearly 1998.

a.4) accession to international agree-ments: since the environment has becomea major focus of international relation-ships, the Chilean government has recog-nized the need to regulate problems such asthe use of international territories, the de-pletion of common natural resources, ac-tivities which pollute or threaten the hu-man environment, trade and internationaltraffic. It endorses the view that everycountry bears responsibility for the com-mon human heritage and therefore has en-vironmental rights and duties which mayaffect its relationships with other nations(Squire, 1996).Given the strong integration of the Chileaneconomy in the international markets, thedemocratic government has acceded to andparticipated actively in most internationalagreements. In very broad terms, the inter-national agreements to which Chile is aparty can be classified in three chronologi-cal groups:- Long-standing:Antarctic Treaty (1961), Washington Con-vention (1967), Agreement on the Preser-vation of Antarctic Species (1971);- Signed by the military regime:SOLAS (Safety of Life at Sea, 1974, andlater amendments) and CITES (Interna-tional Trade in Endangered Species, 1975),Regulation on Whaling (1979), Bonn Con-vention (1981), Protocols on protectingand combating pollution in the South-EastPacific (1986);

24 CLAUDIO MAGGI

- Signed since 1990 (democratic regime):Montreal Protocol (1990, Chile havingparticipated actively in its preparation) andlater Vienna Convention, Basle Conven-tion (1992), UN Framework Conventionon Climate Change (1992), Commissionon Sustainable Development (Río, 1992),Biodiversity Convention (Río Summit,1992), Agreement on the development ofAndean towns and the protection of SouthAmerican llamas (1994), United NationsConvention on the Law of the Sea (1994),Convention to Combat Desertification,Agenda 21 action plan, and various bilat-eral agreementsThe government recognizes that commit-ment to these international treaties has re-placed the vacuum in domestic legislationwhich persisted for so many years in somefields.

b) Public environmental regulatorsChilean environmental policy draws a cleardistinction between the function of de-signing and promoting measures on theone hand and supervision and monitoringon the other. In this field, CONAMAmerely administers the SEIA, which isintended to prevent environmental damage.All responsibility for supervising environ-mental regulations and penalizing non-compliance lies with decentralized stateagencies, some of them attached to theMinistry of Health, and others based in aparticular sector, such as forestry, agricul-ture, mining, fishing or water resources.The municipalities have powers to inspectactivities and impose sanctions and mayallocate penalties for environmental non-compliance. In Chile public agencies areknown for their commitment to legislationand relatively low levels of corruption.This is borne out by rankings which givethe country the best showing in the region.

However, decentralized structures are oftenhampered by excessive bureaucracy whenmore than one agency is involved, or ifnon-specialist bodies are expected to ad-minister different environment regulations(the case of the municipalities). Ratherthan ensuring better environmental super-vision, this tends to foster confusion andexcessive delays, ultimately encouragingirregularities.We should mention three initiativeslaunched by CONAMA to improve envi-ronmental supervision procedures. Thefirst one is a training module for publicofficials included in the Action Programfinanced from the World Bank credit. Thesecond, more recent, is the promotion ofvoluntary agreements, the aim being tobring together industry, departmental in-spectors and environmental institutions inpursuing a timetable for the gradual im-plementation of environmental standards.This initiative forms part of theCONAMA-MIF Project which operateswith a grant from the IDB. Moreover, theMinistry of Economic Affairs, with sup-port from the German GTZ, has set up theNational Secretariat for Cleaner Productionwhich has been working within CORFOsince mid-1998. The Secretariat is intendedto serve as nexus toward the private sectorto promote the concept of clean produc-tion, based on preventive principles, eco-efficiency and voluntary agreements byindustry. Finally, the third initiative hasbeen the creation and launch of the Na-tional Environment Center, with backingfrom Japan and the University of Chile. Itsmain functions are to generate and improvethe quality of environmental information,to build technical capacity for the design ofenvironmental standards and instruments,to act as a reference center laboratoryanalysis, and to offer broad technical sup-


port to public and private organisms in anytask of environmental concern.

c) environmental NGOsThere is wide consensus about the impor-tant role played by some environmentalNGOs during the eighties, at a time ofwhat we might call extremely weak envi-ronmental policy. Most of them repre-sented or were financed by internationalecological organizations. According toSilva (1997), the origins of the ecologicalmovement in Chile date back to 1963,when the Committee for the Defense ofFlora and Fauna, CODEFF, was founded.Its essential remit was to preserve thebiodiversity, and for many years it wasable to draw on exclusive internationalsupport (including from UNEP). Only inthe last few years has it enjoyed indirectsupport from the state.Some years later the Institute of Ecologywas born, and it tried to influence theauthorities to set up a regulatory environ-mental framework in Chile during themilitary regime (Silva, 1997). The Re-search and Planning Center for the Envi-ronment (CIPMA) has been another refer-ence body in the Chilean environmentlandscape since it was founded in the earlyeighties. Its primary activity is the produc-tion and organization of information aboutenvironmental aspects of the economy,above all designed to promote environ-mental regulations and administration atlocal levels (Zazueta, 1995).The Institute of Political Ecology (IEP)was founded in 1987 with a political per-spective and an orientation toward re-search, the dissemination of its findingsand ecological action. At present its agendafocuses above all on pushing for channelsof civic participation at the level of localactors. It is one of the four organizations

currently supporting the civic networkSustainable Chile.Similarly to the IEP, several environmentalNGOs which emerged in the late seventiesand early eighties developed more radicalenvironmental perspectives along the lineof a "new left" (Silva, 1997), whileCIPMA has maintained its mediating rolein the search for consensus between vari-ous stakeholders and in drawing up a pub-lic agenda for the environment since theearly nineties. Like other, smaller NGOsCIPMA has recently been developing anactive advisory and training role on envi-ronment issues for employers' associations.At the technological and scientific level,there are very few university centersgeared to environmental research, and thisreflects the institutional weakness de-scribed under a). We should mention,among others, the Centro Eula at the Uni-versity of Concepción, devoted to appliedresearch around the basin of the Río Bio-bío, and on other issues there is the re-search into environmental economic policyconducted by Osvaldo Sunkel at CINDA(Inter-University Development Center),which has attracted more attention abroadthan at home. (Min. Economy, 1997)

d) Companiesd.1) companies with a demand for envi-ronmental technologies and services:Among large companies, environmentalconcern certainly began before the currentlegislation came into force. Two factorswould have been key in this: economicglobalization and opening up to foreigninvestment. In mining, big investmentprojects financed by external capital begansetting precedents in innovative environ-mental management in the latter half of theeighties. In many cases an adequate envi-ronmental strategy was seen as a necessary

26 CLAUDIO MAGGI

condition to acquire finance. Somethingsimilar occurred, although on a smallerscale, with capital intensive investments inextractive industry and primary processingbased on other natural resources (e.g. cel-lulose, timber, salmon industry, agroin-dustry).The biggest domestic companies, led bythe state mining companies Codelco andEnami, have increasingly applied environ-mental management technologies in thelast decade, building capacities and ear-marking resources to resolve pollutionproblems, especially treatment for liquideffluents and gaseous emissions. It is no-ticeable that "end-of-pipe" modifications toindustrial processes often preceded theintroduction of new environmental stan-dards in the legislation. (Chilean ForeignInvestment Commission, 1998)Similarly, it is interesting to note what hasbeen happening in companies which exportresource-intensive products or non- com-modities such as salmon, wines or proc-essed timber products, and more recentlythe agro-industries. The requirements ofexternal markets have compelled mostcompanies in these sectors to introduceenvironmental management for such keyaspects of their activity as ingredients,processing and packaging. (Scholz, 1994)The ISO 14000 framework is now alsoencouraging these industries to eliminateenvironmental problems further upstream,i.e. during the cultivation or extraction ofthe natural resources they use. This dem-onstrates that companies are not waitingfor domestic legislation to be introducedbefore displaying their own competitiveresponse to the demands of destinationmarkets.7

7 By January 1999, only 4 companies had

been certified under the ISO 14000 series.All of them are certified under ISO 14001.

However, there is also a less idyllic side tomanagerial behavior. There are at least twoarguments to consider here. First, the sizeand lobbying capacity of major companiesand investors means that –while an in-vestment project or expansion to produc-tion is awaiting EIA approval – the rela-tively weak regional COREMAs oftencome under fire from several quarters,even from within the public administrationitself. This inevitably affects the due proc-ess of technical validation. In the samespirit, we should recognize that the publicenvironment institutions still suffer fromclear technical weaknesses. One sign ofthis is that the COREMAs often have torequest extensions to the deadlines laiddown in the law for the approval or rejec-tion of EIA reports when the projects con-cerned are fairly complex. These delays aregrist to the mill of company or investorlobbyists.The second problem is that the great ma-jority of SMEs have not yet developed thecapacities they need for environmentalmanagement, and it is unlikely that theysucceed in the near future. With the excep-tions of Asexma (exporters of non- tradi-tional manufactures) and Fepach (export-driven agrofood processing industries),most associations of SMEs have not so farencouraged their members to improve theirenvironmental performance or to make useof the public subsidies and technical assis-tance available. On the contrary, they tendto adopt a defensive line towardCONAMA and other public regulators. Amore constructive approach to environ-ment issues is gradually taking hold, with

All of them are large forest and cellulosecompanies: Santa Fe S.A., Monte AguilaS.A., Millalemu S.A. and Linacel S.A. A-mong them, only Monte Aguila is certifiedfor forest exploitation.


the support of more recent private institu-tions which manage public resources ear-marked for technical assistance, such asPropel (Latin American Center for Eco-efficient SMEs) and Cepri (Center for In-dustrial Productivity), an umbrella forvarious bodies. Because relatively smallcompanies are not very well informedabout environmental regulations and theirimplications, they are often tempted toinvest in oversized or inappropriate tech-nologies, spurred on by commercial con-sultants, or else seek to evade standards bymeans of irregular practices, frequentlyundiscovered because of the poor supervi-sory capacity of local agencies, especiallyareas where resources are meager.The informal economy still accounts for asignificant number of outfits in sectorssuch as food processing or electricalmaintenance, although their numbers arenow falling as various promotion programsenable them to formalize their activities.While they remain informal, these compa-nies face a more complex situation, sincethey are not eligible to apply for the pro-grams and measures designed to offertechnical assistance. Although in the mainthis sector is not causing serious pollution,in some cases it does generate nuisances atlocal level, while workshops are often ahealth risk to those who work in them.Being informal, they are excluded frompreventive inspection.Finally, in spite of declared governmentinterest, financing SME investment inclean technologies remains an unresolvedproblem. For companies of this kind,whose revenues are usually US$1 millionper year or less, access to credit is alwaysdifficult, but with investments of this typethe difficulty is compounded by the lack ofknowledge which most bankers have of thesubject. This encourages them to demand

even more exorbitant guarantees thanusual.

d.2) companies supplying the environ-mental markets: The recent normativeframework and growing demand for envi-ronmental technologies and services havestimulated the emergence of a domesticenvironmental market which in 1992 wasestimated to be worth US $560 million ayear, making Chile the largest environ-mental market in the region relative to thesize of its economy. However, the sameestimates suggest that imports account for89% of this market. If this is correct, theaggregate value of domestic supply is onlyUS$60 million. In relative terms, this iscomparable with Argentina, Brazil andMexico, but higher than Colombia andVenezuela. (Source: US-Aid, in Barton,1998)There is no doubt that in recent years someNGOs, but above all new environmentalconsultancies, have established positions inthe environmental services market mainlydue to the state demand for studies and therequirements of the SEIA.

e) Other actorsOther civil society actors are only just be-ginning to enter the environmental debatein Chile. In general, these are campaigngroups composed of people directly af-fected by specific situations. They haveusually been stung into action by projectswhich might cause environmental deterio-ration or threaten their security, health, orcultural heritage.One example of this focused on the projectto build the Ralco hydroelectric powerstation, undertaken by the powerful Chil-ean/ Spanish company Endesa. The Pe-huenche community on the upper Biobíoriver has been resolutely opposed to the

28 CLAUDIO MAGGI

project, which promised major improve-ments to the security of the electricity sup-ply for the entire central region of thecountry, where about 90% of the country'spopulation is concentrated. The familiesconcerned rejected government offers tobuy their land, insisting that these had asacred meaning for their people.The situation created within the govern-ment structures involved. In fact, theCommission of Support to IndigenousTowns (Conadi) had to be re-appointedsoon after this episode to make it easier totransfer the land required to carry out theinvestment. This drew strong criticismfrom environmental conservation organi-zations, concerned about the project's im-pact on a vast ecosystem. This reflected theobjections originally raised made byCONAMA, causing further tensions thegovernment.There have been similar cases, althoughsmaller in impact, where groups of affectedresidents have organized to boost theirnegotiating power in the face of investors,and once the EIA report has been approvedthey have been able to obtain financialcompensation. There have also been casesof citizens motivated purely by an aware-ness of what they perceive as an environ-mental threat, such as the nuclear tests inFrench South Pacific. Apart from theseisolated cases, however, there is a virtualabsence of wider debate about environ-mental economics. In part at least, this canbe ascribed to a lack of public and privateactors whose function is to inform thecommunity and prepare the mechanismsfor discussion.A recent initiative worth mentioning be-cause of its possible consequences in thefuture is the civic network "Sustainable

Chile"8, set up in 1998 by the NGOs Re-nace, IEP, the Latin American Observatoryof Environmental Conflicts, and the Uni-versidad Bolivariana. This network bringstogether opinion makers around an Advi-sory Council, and its first task has been todraft a proposal called " Toward a sustain-able Chile", with a timetable for regionaltasks and targets up to the year 2020. Thiswill be debated with the authorities, rele-vant actors and general public. Their work,however, is still at an early stage.As for the media, their role has been rathersecondary, with a clear bias in economicjournals toward the interests of investors.The information provided lacks deeper,critical analysis.

3.2 Framework and context

In analyzing environmental aspects of thecompetitive challenge in Chile, the keycontextual elements to bear in mind are,first of all, growing environmental re-quirements in destination markets for do-mestic exports; secondly, the internation-alization of the domestic economy; thirdly,mounting civic awareness of the environ-mental problems and risks which certainproductive activities pose for their imme-diate and not so immediate environment;and fourthly, the growing internationaldimension to regulations and commit-ments, which have increasingly fuelled aneed for governance around global envi-ronmental problems.Although each of these factors has exerteda consistent influence on the strategiesadopted by the diverse actors, we shouldnot ignore events which "temporarily de-termine the situational context" (Jänicke,

8 Community-based network "Sustainable Chi-

le/Chile sustentable".


1997), in which environment elements playa relatively pronounced role, affecting ac-tors and strategies to a greater or lesserdegree.

a) Environmental standards in destina-tion markets: If environmental require-ments in destination markets are making animpact, this is undoubtedly due in part tothe fact that the costs associated with therejection of a product are much greaterthan the costs of supplying it, because re-jection is a setback to international marketpositioning, often carrying an entire na-tional sector along with it (consider, forexample, wines, fruit, wood or salmon),incurring sometimes substantial reputationcosts and possibly infecting other destina-tion markets.So far, export companies, their associationsand some technical support institutionshave developed two major responses to theproblem: first, the promotion of environ-mental audits, or systems of environmentalmanagement, aimed in some cases at certi-fication under ISO 14000; and second, theintroduction of self-regulation mecha-nisms, either at the level of export consor-tia or, for smaller companies, in collabora-tion with public agencies like ProChile orCorfo. In this way, environmental issueshave played a part in the broader arena ofquality control and assurance for domesticproducts targeted for export. This tendencyis borne out by empirical evidence thatmarket-opening processes encourageeconomies with lower environmental stan-dards to improve them in order to becomemore competitive in international markets.The view nevertheless persists, especiallyamong industrial chambers and associa-tions, that most environmental objectionsraised about Chilean products in externalmarkets are motivated by protectionism

rather than any real problems or risks. Thishas prompted companies and employersassociations to call on public organizationsto devote more effort to supporting exportsthrough an external network which wouldprevent and discredit such practices, eventhough they realize that the measure is un-likely to be effective and unbureaucratic. Itwould doubtless be preferable to pre-emptthe problem by consistently meeting therequirements of these markets in terms ofproduct ingredients, processing and pack-aging and, in some instances, desirableproductive and extractive processes.

b) Internationalization of the economy:The progressive internationalization of thedomestic economy has facilitated the pro-motion of better practices in environmentalmanagement, as already mentioned, withforeign companies setting a significantexample to the major domestic companies,often in advance of national legislation.Among SMEs in tradable sectors whereChile currently enjoys some competitiveadvantages, the increasing mobility ofmanagers and technical teams, whether onbusiness or technological missions, hasequally given them experience of interna-tional best practices in environmentalmatters. Adoption in these sectors, how-ever, has nevertheless been rather slow forthe reasons described above.

c) Evolution of domestic consumptionpatterns: Public awareness of environ-mental risks and impacts has been influ-encing a progressive change in consump-tion patterns, especially for products ofselective consumption, where the domesticmarket is beginning to discriminate againstor in favor of products labeled, for exam-ple, as "biodegradable" or "ozonefriendly". However, and in spite of a recent

30 CLAUDIO MAGGI

law to protect consumers' rights, the in-formation they usually receive about theenvironmental quality of products theyconsume is confused. There are plenty ofclaims that products are "ecological" or"environment friendly", and this makes itnecessary to establish clearer rules on eco-labeling and take advantage of this con-sumer awareness in order to promote theadoption of cleaner production processesby industry. Moreover, although environ-mental regulators now confront more ac-tive environmental protests from the com-munity, they are also having to face publiccriticism that the most visible problems donot seem to be leading to any definitivesolutions.

d) International agreements: Growingconsensus among the international com-munity about the need to prevent globaldamage to the environment has forced thegovernment, conscious of major Chileaninvolvement in international markets, tosubscribe to most of these initiatives, andin consequence to formulate proposals forimplementing these agreements. In caseswith a more immediate potential impact forthe country (the Montreal Protocol, forexample) the Foreign Ministry has playeda more active role in the appropriate fo-rums for such matters, as well as in caseswhich concern national economic interests(such as the restrictions which the Euro-pean Union was considering on the use ofthe copper in constructions).

3.3 A specific problem: forest cer-tification

In order to illustrate the roles and attitudesadopted by specific actors to a specificenvironmental problem, this section willexamine the background to a survey of

opinion carried out recently in Chile aboutthe certification of sustainable manage-ment and exploitation patterns in forests.As a general rule, certification systems(quality, environmental, etc.) are voluntaryand are inspired by market mechanismswhen consumers reward environmentalbehavior on the basis of reliable informa-tion. In Chile's case adopting these systemscould contribute to providing better infor-mation to consumers and improving theimage of products, which in turn wouldboost these products on the internationalmarkets. Environmental certification, inparticular, benefits from the existence of aquality system which is internationallyaccepted, and can therefore overcome po-tential restrictions to trade induced by iso-lated environmental objections.In general terms we can distinguish be-tween two approaches to certification. Thefirst option focuses on environmental man-agement within a company, covering aspectrum which includes environmentalcertification for everything from inputs andservices to waste management and com-plete process management (ISO 14000).The second approach centers on producteco-labeling, for example, the GermanBlue Angel launched in 1971. (CONAMA,1998)In the case of forestry in Chile, one of thefirst problems is how to set up a standardof primary certification, focusing on thehandling (or exploitation) of forest re-sources, which would enhance the marketimage of derived products (cellulose, pa-per, lumber). Although the four Chileancompanies certified under ISO 14000 workin the forest sector, only one of them in-cluded forest management in its certifica-tion process. Chile has 13.4 million hec-tares of natural, or native forests, of which7.1 million hectares are rated as having


productive potential. The country also hasabout 1.9 million hectares of forest planta-tions, mainly pine (70%) and eucalyptus(25%), both species of very rapid growth.These plantations have received consider-able state support, with about 800,000hectares subsidized between 1980 and1997.Overexploitation and the degradation ofChile's natural forests has been caused byboth traditional and more recent pressures.Traditional factors include consumption offirewood, forest fires, the demand fromwood processing industries, and the ruralpractice of combined pasture. These tradi-tional pressures have increased in recentyears. The new factors relate to the waydevelopment patterns have been evolvingin the sector. First, native forest must com-pete for space against a forest industrybased on monocultures and fast growth,fundamentally geared to cellulose produc-tion. Second, international demand for pul-pable raw timber has increased the pur-

chasing power of small owners whose sub-sistence patterns of exploitation have beenleading to the gradual deterioration anddestruction of the forests without appropri-ate resource management techniques.In this context, we should examine theattitudes of the various actors to the poten-tial for establishing a certification systemwhich could help to limit the negative ef-fects of several of these factors, both tradi-tional and new. A study carried out by theForest Institute (Infor) and CIPMA identi-fied the opinions and arguments of differ-ent groups and relevant actors with regardto forest certification, its merits and whichkind of system to favor. Among its conclu-sions, the study highlights the favorableattitudes of intermediate purchasers ofproducts toward the end of the productionchain, such as publishing houses and de-partment stores. These are the producerswho are located close to the final con-sumer. The principal findings are summa-rized in the following table:

32 CLAUDIO MAGGI

Actors' attitudes to forest certification

Groups and Sectors Attitude Arguments

GovernmentsThe voluntary nature of certifi-cation limits its effectiveness.Active promotion of its usedoes occur nevertheless (e.g.Holland)

To improve forest sustainability.To strengthen the competitive-ness of national producers inexternal markets

International organizations(IDB, World Bank, UN)

They have not developed con-crete measures to promote cer-tification. They support it ver-bally

Sustainability of growth patterns

NGOsFavorable to FSC. They pro-mote its use

Because FSC considers stricterenvironmental and social criteria

ConsumersSensitive to the environmentalaspects, but not very informedabout what exactly forest certi-fication means

Either because it has not been inexistence long or because ofpoor information about certifi-cation

Distributors at the end ofthe chain

They promote the use of FSC Social and consumer recognition

Companies which buy for-est products

They promote use of forestcertification, they prefer inte-grated single system FSC-ISO

They understand the behavior ofthe forest companies, but at thesame time they are pressed byconsumers and NGOs

Forest companiesThey see certification as a costburden. They prefer the ISO orEMAS system to FSC

Systems of environmental ad-ministration are less demandingthan FSC in terms of forest han-dling practices.

EMAS: Eu ropean Un ion Eco -Aud i tFSC: Forest Stewardship Council. Forest certification established in 1994 as internationalstandard.Source: Summarized from the journal Ambiente Ahora, CIPMA, 1998

As we see from this case, attitudes to theenvironmental certification of forest han-dling are not completely polarized, butthere are no further initiatives at present.The situation indicates a relatively frequentphenomenon in the use of voluntary in-struments, which is that the industries con-

cerned (in this case forest companies) willonly advance in the desired direction ifother domestic players or external clientsexert definite pressure, so that companiessee non-certification as a threat to theiroperations.


In the absence of an appropriate regulatoryframework (in Chile the Native Forest Actintended to regulate the sustainable ex-ploitation of this resource has been virtu-ally blocked in its passage through parlia-ment for more than two years), the publicactor will be expected to take more vigor-ous action to promote or address the de-mands of other stakeholders with regard toforest certification, generating information,and channeling cooperation with the forestcompanies towards this end.

4. Future challenges in Chile'senvironmental agenda

As was pointed out in the preceding sec-tions, in spite of the fact that Chile's pres-ent environmental policies display, in theirprinciples and instruments, elements thatwould encourage an invigoration of thecompetitive capacities of both the countryand Chile's businesses, the evidence showsthat any broad application of these princi-ples and the effects anticipated from themhas been limited by the presence ofimperfections on the part of both marketand state, i.e. shortcomings in the areas oflearning costs and capital recovery times.

In the absence of direct competitive pres-sures, the effects on company performanceof introducing clean technologies and envi-ronmental management are for the mostpart not perceived as entailing direct bene-fits for the operational efficiency of thecompanies, but are instead seen as an allo-cation of resources with opportunity costsregarding other elements of their short-term production and marketing strategies.Concepts like clean production or eco-efficiency which cast the competitive

challenges posed by quality, productivity,and sustainability in an integrative light ofare as yet not very widely diffused amongthe business community, especially at theSME level. Another factor that has con-tributed to the slow advance of environ-mental concern within the productive sec-tor is a delay in the implementation ofenvironmental norms provided for theprograms prioritized since 1995.

On the other hand, large companiesdependent on natural resources, especiallyrenewable ones, have only partial and rela-tively short-term visions of the challengesof sustainability associated with their ex-ploitation patterns.

4.1 14 topics and threefundamentals underlying theinvigoration of Chile's envi-ronmental policy

In 1998, the government addressed 14topics considered as strategic priorities ofenvironmental policy in Chile; the gov-ernment has committed itself “generate theguidelines for dealing with the problemssees as the major environmental topics ofconcern to citizens." (CONAMA, 1998)

Of these 14 topics, at least nine must beregarded as closely related to the chal-lenges of competitiveness. These are:

a) Integrated management of water re-sources: This includes the improvement ofcurrent regulations and incentives for theefficient and sustainable administration ofthis basic resource for productive andhuman activities.

34 CLAUDIO MAGGI

b) Definition of political and administra-tive systems for renewable stocks ofnatural resources: Such systems are to beoriented in such a way as to impart to theeconomic activities associated with theman effective regulatory framework (forexample, the implementation of the law onnative forests and improvement of the lawon fisheries) with a view to permitting andpromoting their sustainability.

c) Certification and accreditation of theenvironmental quality of Chilean prod-ucts: The aim is to improve the quality ofinformation for local consumers on thefeatures and environmental effects ofproducts as well as to bolster their intro-duction to international markets.

d) Territorial planning and regulation ofland use: What is meant here is the need toregulate the relationship betweenproductive activities and alternative uses ofland. This is relevant to regulating positiveand negative externalities between thesetwo factors as well as their impact on theregional economies.

e) Environmental policy in mining:Aimed at formalizing this for the first timeas well as to enforcing compliance with thecurrent environmental standards in thisvast sector.

f) Energy and environment: To coordi-nate future energy requirements with envi-ronmental patterns in energy generationand improvements of the efficiency of en-ergy use.

g) Control and implementation of cur-rent environmental regulations: It is rec-ognized that some current control mecha-

nisms are precarious and inadequate, theneed to modernize them is stressed.

h) Compatibility between and limits toprivate rights and the public interest inthe environment: This outlines the need tosystematically establish a set of criteria toharmonize the development of free privateinitiatives, reflected in new investmentsand growth of economic activity, with thepublic interest in the environment, linkedwith the issues of sustainability and thepopulation's quality of life.

i) Introduction of environmental consid-erations in economic-policy instruments:This refers to the need to incorporate envi-ronmental incentives in fiscal instruments(for example, public budget, prioritizationof public investment projects, taxes, subsi-dies), monetary policies (interest rates,exchange rate. Since this is an officialdocument, it constitutes a significant signalin the debate, until now nonexistent, at thegovernment level.It is symptomatic that almost all of thetopics addressed in this public documentare connected with the improvement of theregulatory framework of environmentalpolicies. Only in point c) on environmentalcertification is mention made of mecha-nisms of a voluntary character, but onesthat likewise have regulatory effects inmarkets.

In fact, the full development of the inspi-rations and purposes of Chilean environ-mental policy has as its necessary condi-tion improvement of the system of regula-tions. However, that condition needs to becomplemented by a second high-priorityaxis of reforms and improvementscorresponding to the invigoration of publicenvironmental institutions.


It is evident that even the most complete orsophisticated regulatory framework doesnot guarantee good results per se. Publicinstitutions and services should be able todemonstrate both monitoring and enforce-ment capacities. The effectiveness of moresophisticated instruments such as tradableemission certificates or even SEIA andenvironmental standards depends on theexistence of regulatory competences on thepart of public actors, otherwise they willprove imperfect, ineffective and tend tolack transparency. This implies not only anactive and efficient inspection capacity, italso implies the design, monitoring, gov-ernance, and articulation capacities char-acterized in Section 3.

In the same way, the other functions pres-ent in CONAMA, such as 1) ministerialcoordination; 2) strengthening of cohesionin the public sector; 3) identification andmonitoring of cross-sectoral environmentalproblems; 4) promotion of best practicesand incentives for industry compliancewith environmental standards, and 5) itsfunction as a channel for citizens' opinionsand interests, will be difficult to carry outin the context of the current limitations ofthis entity in terms of both the quantity andthe capacities of its staff. Based on thehigh transaction costs and externalitiesassociated with their operation, efforts di-rected toward strengthening CONAMA´scapabilities should have priority in anyredirection of public resources.

The third axis of future challenges facingenvironmental policies concerns the needfor improvement of articulation amonginstitutions oriented to research, technol-ogy transfer, and promotion of the envi-ronment. The role of private entities orpublic-private partnerships such as busi-

ness associations, foundations, universities,R&D centers, technology transfer antenna,or technology institutes, should not be justto collaborate in the design phase and im-provement of the regulation system butalso in diffusing and supporting initiativeslike ecolabeling, environmental certifica-tion, or other solutions in technology andenvironmental industrial management. Abroader role of this sort has been proven tobe decisive both to induce the formation ofshared visions in society and to build thecapacities of public and private actors toadapt their behaviors and strategies in sucha way as to combine sustainability andenvironmental acceptability requirementswith the exigencies of international com-petitiveness (Porter and Van der Linde,1995)

A critical factor for this institutionalmesospace concerns its financing. Chile,perhaps in more marked form than mostother countries in the region, has privilegedin the last years the use of competitivemechanisms to allocate funds to supportinstitutions on a fixed-term basis. Thesefunding mechanisms have among otheradvantages the ability to stimulate thecompetition to conduct relevant research,discouraging self-referential research, andstimulating the capacity to leverage collat-eral funds from private sources. As a dis-advantage, however, they could bias thework of these institutions toward short-term activities, and when incentives forarticulated and combined work are not atissue, they can favor the fragmentation ofwork, which, in the case of small and weakinstitutional networks such as those inChile, could introduce inefficiencies, dueto lack of critical masses or synergies. It isnecessary to introduce corrective mecha-nisms for these tendencies in order to en-

36 CLAUDIO MAGGI

courage greater articulation and correct anybias against medium-term R&D efforts.(Echeverría, 1998)

4.2 Some specific recommenda-tions

The invigoration of the critical aspectsidentified in the previous point (regulatoryframework, public institutions, andmesospace) requires the explicit will of thepublic actors to advance reforms tostrengthen and to deepen already existinginitiatives as well as an explicit commit-ment and active participation of the otheractors. The following are specific propos-als for stimulating and accompanying thatprocess. The list does not seek to be ex-haustive, although achieving these goalswill contribute to progress in some or all ofsuch critical aspects.

Improvement of the administration ofthe Environmental Impact EvaluationSystem (SEIA): There is no doubt that thisinstrument should play a relevant role inimproving the effectiveness of Chileanenvironmental policy, as well as to ensur-ing the environmental sustainability of thepattern of economic production adopted.Despite the fact that the design of the SEIAwas guided by the basic principles thatoriented also the main normative, thus farits operation has been faced with multipleunresolved difficulties stemming from in-stitutional inexperience in the matter, andaccentuated by inadequate operational re-sources at both the regional and the na-tional level; this usually contrasts with thestrengths and competences of the speakersfrom the investor side, especially in thecase of larger projects, which because of

their size are often supposed to have sig-nificant environmental impacts. There is aneed to endow the regional public bodiesand decision-makers with more technicalcapacities and to prioritize technical crite-ria for the case that discrepancies shouldmaterialize between the regional and cen-tral levels. The argument that more techni-cal stringency would deter FDI reveals arather static and short-term view of thematter. On the contrary, though not deci-sive, it could help to upgrade the invest-ment portfolio by means of attracting moretechnology-based projects with more in-corporated knowledge, that usually havegreater irradiation effects on the localeconomy.

Amplification and invigoration of chan-nels of civic participation: This is an as-pect that has been under considerationsince the conception of CONAMA, but itis of very limited scope in practice.

NGOs that once represented the main civicvoices have gradually been reorientingtheir capacities toward enterprises as cus-tomers of their information services andtechnical consultantship. This new facetcan be considered very positive. In fact,some authors refer to it as a superior stagein the maturation of these organizations(Jänicke, 1997).

However, in the case of Chile this hasmeant a weakening of their role as chan-nels of civic expression. Then, withoutabandoning the current tendency to ap-proach the business sector, they shouldrenovate their civic representativeness inthe advisory levels of CONAMA. Also,NGOs, together with the authorities,should contribute to improving the effec-tiveness of public participation which has


proved decisive in other countries. Thatwould contribute to a better understandingamong the civic society of environmentaltopics and their relevance for economicdevelopment and competitiveness as re-gards the sustainability of developmentpatterns.

Invigoration of programs of technicalenvironmental assistance to SMEs andbetter coordination of control, monitor-ing and municipal services: The subsidiesfor external consultancy services on envi-ronmental management and pollution pre-vention not only provide access to man-agement and technological solutions forsmall businesses, which usually have nointernal competence regarding these topics;they also help to correct a severe marketimperfection of environmental technolo-gies, corresponding to the asymmetries ofinformation between suppliers and poten-tial customers, as explained in Section 3.Considering only formal firms, the SMErepresents 98.7% of the enterprise universeassociated with environmental issues inChile. (Corfo, 1998). It is important to en-sure the consistency and effectiveness ofsuch programs to facilitate optimal coordi-nation with the control and environmentalinspection services. The same is true forthe case of the respective entities that assistthe informal sector.CONAMA should in this case, since this ispart of its main mission, induce this coor-dination and propose the regulations, oreven legislative changes, necessary to giveconsistency to functions of control andpromotion.Remarkable cases of public-private part-nership in cooperation with small firmsalready exist in Chile. One of the better-known cases is the conversion of Santi-ago's bakeries from firewood to gas, elimi-

nating an important fixed source of par-ticulate material and at the same time im-proving the operational profitability ofthese SMEs. A key factor in this experi-ence was the coordination between themonitoring agency (SENMA) and thepromotion agency (Sercotec) as well as therelatively easy access to the loans neededto finance the change of technologies. An-other less well-known experience is that ofsmall proprietors of native forest in the IXRegion of the Araucanía. This project, car-ried out with contributions of Corfo, theGerman DED cooperation service and theproprietors, made it possible to coordinatethe promotion agency (Sercotec), the cor-responding municipality and the NationalForest Corporation (Conaf, forest inspec-tion service), in a combined action planthat have facilitated the formal startup ofthese small entrepreneurs and the sustain-able management of their forests. Theproject encouraged them to join forces todevelop a joint business plan that thus farhas had very good results. This case showsthat what is required, more than legal re-forms, is the will and a partnership be-tween institutions and enterprises, inde-pendent of their size or condition.

Diffusion of successful managerial expe-rience as regards environmental admini-stration: In Section 3, in delineating themanagerial strategies and the frameworkconditions of Chilean environmental pol-icy, emphasis was placed on the role ofexternal markets and the openness of thelocal economy as catalytic agents in intro-ducing good management practices inlarger companies mainly related to theprimary (natural-resource intensive) exportsectors and then gradually irradiating outtoward most exporting enterprises.

38 CLAUDIO MAGGI

In 1997 more than 203,000 companiesregistered formal operation in sectors withpotential environmental impact9. Amongthem, not more than 2,600 could be con-sidered large enterprises (Corfo, 1998), andprobably not more than 3,000 export rela-tively often. Thus it is clear that still thegreat majority of these companies (proba-bly over 90% of the total) are still far frombecoming major environmental concerns.Two simple reasons help to explain thisrelative marginality: first, the lower pres-sure from external markets (in contrast tothe case of investment projects in naturalresource-intensive commodities, perhapsthe strongest pressure has come from theinternational financial markets); and sec-ond, the above-mentioned delay in imple-menting the regulatory framework, duerather to coordination and bureaucraticobstacles than the principle of gradual ap-proach incorporated in the law. This hascaused broad misconceptions and, amongsmall managers, a comprehensible appre-hension to be ahead with a problem thatstill does not appear relevant, either for theside of their direct destination markets orfor the side of internal environmentalregulation. However, just was the case inthe industrialized countries, and in par-ticular in Europe, it has been proven thatboth factors have played a relevant andsynergic role (Zito and Egan, 1998).The experience of the pioneer companiescould and it should be used by environ-mental control and promotion institutions,to diffuse good practices and technicallyeco-efficient solutions. This last concept is

9 In 1997, 526,920 formal enterprises registered

operations in Chile. The numner shown abovecorresponds to the total number of firms in thefollowing sectors: farming, fisheries, manu-facturing, construction, transportation, restau-rants and tourism services.

of particular importance for the diffusionof successful experiences among compa-nies, because it validates the fact that thepollution-prevention strategies could con-tribute to achieving productivity gains,starting with more savings in inputs andenergy. The business associations, just aswas the case with SOFOFA, the chamberof industry and commerce in Chile, withsupport of international cooperation (Ger-man CDG and US Aid) could, through theEP3 diffusion program, assume a relevantfunction in encouraging the dialogue be-tween companies, technological institu-tions, promotion agencies, CONAMA andpublic services responsible for monitoringand control as a means of diffusing andtransferring successful managerial experi-ence in this matter.

Design and implementation of programsfor financing environmental investmentsand factory relocation: Although softsolutions based on a more efficient use ofinputs and eco-efficient productive prac-tices have great potential for application inChile, in many other cases companies willhave to renew their technologies to achieveboth competitive performance and accept-able environmental. Current SME-driventechnical advisory programs are supportingthis process during the preinvestmentphase, guiding companies in the design ofcost-efficient solutions. However, it is of-ten happens that these efforts end up notmaterializing for lack of effective financ-ing schemes for such technological im-provements. In view of the presence ofexternalities (in general, the social benefitsof an environmental investment are signifi-cantly greater than their private benefits)the government, through the Ministry ofthe Treasury, recently signaled its agree-ment with credit programs with preferen-


tial interest rates and special guaranteeschemes which actually could be consid-ered an important sign given the high levelof orthodoxy prevalent in Chile in creditissues. As is well known, these credit lineswill be operated by the banks, which, inabsence of special conditions, will be un-able offer loans of any significant volumesdue to the relatively high transaction costsof each loan operation in relation to itsvalue and the difficulty involved in as-sessing with certainty the direct benefits ofthe investments.

The relative situation for the relocation ofcompanies located in saturated areas orwith critical levels of pollutants is similar.The most important case concerns Santi-ago, a city declared to be a “saturated area”in an ordinance of CONAMA of 1997.This means that new fixed sources of at-mospheric emissions cannot locate hereunless some of those already in operationdiminish their emissions or are relocatedoutside the capital. Also, the city's newregulatory plan establishes a minimumradius of distance to downtown for theoperation of fixed sources. Then, in bothcases, the support for rational relocation ofindustries presents significant externalitieswhich [?should validate] the design of spe-cial financing conditions.

Accreditation systems for consultantsand technology suppliers: Since consul-tancy markets and environmental tech-nologies for companies are relatively re-cent in Chile, is necessary to improve in-formation in order to avoid eventual op-portunistic “free-rider” behaviors such assupplying services without a minimum ofprofessional and technical backup. Thisproblem affects mainly companies ofsmaller size, since large companies gener-

ally have generally dealt with well-knownacknowledged international technologysuppliers. Thus, it should be convenient topromote initiatives oriented to improve themarket information and accredit the localenvironmental advisory services. A posi-tive initiative regarding to this point hasbeen the so-called “clearing houses” cur-rently being developed by some NGOs.Also, Conama and the Secretary of CleanProduction, should play an important rolein this.

5. References

Barton, J. (1998): The North-South Dimensionof the Environmental and Cleaner Tech-nology Industries, in ECLAC ReviewN°64, ECLAC, Santiago.

Castillo, M., Dini, M., y Maggi, C. (1995):Reorganización Industrial y EstrategiasCompetitivas en Chile, in RestructuraciónIndustrial en América Latina, Santiago:ECLAC.

Centro Nacional del Medio Ambiente (1998):Memoria 1997, Santiago.

CIPMA (1998): Ambiente Ahora Review,Santiago: LOM Ediciones.

Foreign Investments Comission (1997): Envi-ronmental Management Framework: Poli-cies, Rules and Procedures, Santiago.

CONAMA (1998): Marco Institucional yReglamentario Ambiental en Chile, ex-tracted from the Conama website.

_______ (1998): Propuestas para un ProgramaTrienal de Normas Ambientales, extractedfrom the Conama website.

_______ (1998): Catorce Grandes Temas Am-bientales que el País debe abordar, Co-nama.

40 CLAUDIO MAGGI

CORFO (1998): La PYME, Desafío a la Mod-ernización Productiva, Draft, Santiago.

Echeverría, R. (1998): Will competitive fund-ing improve the performance of agricul-tural research? Discussion paper, ISNAR,The Hague.

Escudero, J. (1996): La Política Ambiental delGobierno de Chile, Presidence GeneralSecretary, Santiago.

Jänicke, M. (1997): The Political System'sCapacity for Environmental Policy, inNational Environmental Policies. A Com-parative Study of Capacity-Building, Ber-lin: Springer Verlag.

____, and Weidner, H. (eds., 1995): SuccessfulEnvironmental Policy. A Critical Evalua-tion of 24 Cases, Berlin: Sigma Verlag.

MIDEPLAN, Planning Ministry, Preinvest-ment Secretary (1998): CuencasHidrográficas en Chile: Diagnóstico yProyectos, Santiago.

Economic Ministry, Technological InnovationSecretary (1997): Directorio de CentrosCientíficos y Tecnológicos, Santiago.

Pérez-Aleman, P. (1997): Learning and Eco-nomic Development in Chile. The Stateand Transformations Inter-firm Relations.Ph.D. dissertation, Boston: MIT.

Pietrobelli, C. (1992): Technological Capabil-ity and Export Diversification in a Devel-

oping Country: the Case of Chile since1974, Ph.D. thesis, Oxford.

Porter, M. y Van der Linde (1995): Green andCompetitive, Harvard Economic Review,N°5, Boston.

Rodgers, G. (ed.), several authors (1998):Chile. Crecimiento, Empleo y el Desafíode la Justicia Social, Geneva: ILO.

Scholz, I. et. al., (1994): Medio Ambiente yCompetitividad: El Caso del Sector Ex-portador Chileno, Berlin: DIE/GDI.

______, (1998): Comercio, meio ambiente ecompetitividade: o caso da indústriamadereira do Pará, Draft in Programa deBolsas Instituto Rio Branco – BID.

Silva, E. (1997): Chile’s Case, in NationalEnvironmental Policies. A ComparativeStudy of Capacity Building, Berlin:Springer Verlag.

World Bank (1997): World Development Indi-cators, Washington.

Zazueta, A. (1995): Policy Hits the Ground.Participation and Equity in EnvironmentPolicy-Making, Washington: WRI.

Zito, A., y Egan, M. (1998): EnvironmentalManagement Standards, Corporate Strate-gies and Policy Networks, in: Environ-mental Politics, Vol. 7, No.3, London:Frank Cass.

COMPETITIVENESS AND ENVIRONMENTAL POLICY IN THE REPUBLIC OF KOREA 41

COMPETITIVENESS ANDENVIRONMENTAL POLICY INTHE REPUBLIC OF KOREA

Dr. Kern Soo Yoon (INEF)

1. Introduction

The Republic of Korea has experienced adramatic economic transformation over thepast three decades despite its relativelyunfavorable initial conditions, including apoor endowment with natural resourcesand war-ridden depreviation in the 1950s.Its astonishingly high sustained economicgrowth has been recently characterized inthe development literature as a “Miracle”(Worldbank 1993). But it may be moreaptly described as “condensed growth”1),which abridged the normal developmentprocess by omitting or delaying the ad-justments that accompany economicgrowth.If one seeks to measure the country’s pastdevelopment mainly relying on economicperformance data, Korea seems to be aremarkable model for later developingcountries, since it has succeeded in allevi-ating poverty through rapid industrializa-tion and now finds itself on the road tobecoming an advanced industrializedcountry. But in appraising this rush indus-trialization since the 1960s on a somewhatbroader socioeconomic basis, it is ratherdifficult to speak of a “Model Korea” inspite of the World Bank’s favorite repre- 1 This description is very widely used in reform

discussions since the later 1980s in Korea. Itimplies a verification of A.Gerschenkron’shypothesis(1962) that the speed of industriali-zation in an underdeveloped country is usuallymuch faster than that of advanced countries. InJapan K.Ohkawa used the expression compres-sed growth in the same context. Cho 1994,p.5

sentation of Korea as a model countrymarked by “growth with equity.” It be-comes far more difficult and complicatedto judge this issue, if one tries to overviewthe Korean development process from theperspective of quality of life or sustainabledevelopment. Even the World Bank wasunable to find Korea’s economic develop-ment model to be environmentallyfriendly, and it has, in its otherwise vastliterature on the Korean economy, as yetrefrained from comment on the environ-mental aspects of Korea’s rapid economicgrowth.As a matter of fact, Korea has lagged farbehind in its recognition of environmentalproblems, and it is only very recently thatthe government has begun to respond topublic demand for a cleaner environment.The process of industrialization in Koreawas, unlike the case of the Western coun-tries, planned and tightly controlled by thegovernment. In the early stages of industri-alization, the government guided the di-rection of the industrialization process tothe extent that it virtually chose the indus-tries to be created as well as the partici-pants in such industries. It was a highlyauthoritarian and repressive government,which had powers that went far beyondthat wielded by Western democratic gov-ernments. And the ambitions, preferences,and even prejudices of the governmentwere crucial in determining the trajectoryof the country’s rapid development.When it embarked on the industrializationprocess with the first five-year economicdevelopment plan in 1962, maximizing theeconomic growth rate was given the high-est priority as “the” national goal (You1995). So the stage was set for a path ofhigh economic growth at higher social andenvironmental costs.

42 KERN SOO YOON

In the following two decades, the attitudeof the government toward the environmentremained basically the same. Under anauthoritarian regime wholly bent on eco-nomic growth, it was virtually impossibleto disseminate information on the envi-ronmental degradation and its long-termeffects on the quality of life of the popula-tion. It was even dangerous to engage insome political action aimed at changing thecourse of development toward an environ-mentally friendly path. Although no reli-able data exist on the state of the environ-ment during this period, it is quite obviousthat excessive environmental damage oc-curred here. It was only after the beginningof the democratization process in the later1980s that the government undertook ef-forts to put into place any mentionableenvironmental policy.In this contribution I will try first to givean overview of the environmental prob-lems in Korea in relation to economicstrategies and industrial structures and thento comment on the ongoing controversiesabout the (non-)applicability of the Envi-ronmental Kuznets Curve in the Koreancase. Following this macroscopic overviewon rapid economic growth and its envi-ronmental consequences, I will describesomewhat schematically how the mainactors in Korea have responded to envi-ronmental challenges since later 1980s.After a brief review of the development ofKorean environment policy, the currentstructure of environmental administrationand laws will be illustrated. In the samemanner the citizen’s environmental move-ment will be dealt with, and then a some-what detailed illustration will be given ofthe recent environmental behavior of in-dustrial firms under changing internal andexternal circumstances, especially con-cerning the introduction environmental

management system(ISO 14000) includinga case study. This will be concluded withremarks on the question why we cannot besure that Korea will follow a sustainabledevelopment course in the near future bylearning from its past mistakes as well asfrom the experiences of OECD countries.

2. Rapid Industrialization andEnviromental Challengesin Korea

2.1 Rapid Economic Growthand Structural Transfor-mation

Korea is one of the world’s most denselypopulated countries. Its population grewrapidly after liberation from Japanese co-lonial rule, from 15 million in August 1945to 21 million in 1948 and nearly 43 millionin 1989. But the country managed to con-trol the 3 % annual growth rate in 1960down to a figure of less than 1 % after1989. The population is expected to rise to47 million by the year 2000, and its 51 %will live in the six major cities.In spite of this, GNP per capita grew veryrapidly from $67 in 1953 to $1000 in 1977,$2,000 in 1983, $5,000 in 1989, and thenin 1995, just before Korea became a newmember of OECD, the figure went beyonda nominal $10,000, the level the UnitedStates achieved in 1978, Japan in 1984,and Taiwan in 1992.Korea’s rapid industrialization during thepast thirty years has been astonishing byany standard. An export-oriented growthstrategy, tremendous investment in heavyindustries in the late 1960s and 1970s, andpolicies fostering the growth of Koreancompanies into large conglomates com-bined to make South Korea into an


<Table 1> Change of Industrial Structure in Korea (Share of GDP at current prices, %)

1962/66 1970 1980 1990 1995Industry

Agricul. forestry &fishingMining & ManufacturingMaunufacturung onlyConstr/ electr/ gas/ waterOther Services

39.6 26.6 14.7 8.5 6.218.7 22.5 29.7 29.6 29.816.8 21.0 28.2 28.8 29.4 4.5 6.6 10.1 13.5 13.437.2 44.2 45.5 48.4 50.6

Source: the Bank of Korea

advanced industrializing country withinthree decades(Cho 1994).During these years the Korean economyexperienced major structural change. Aftera period of relatively labor-intensivegrowth (1962-1971), basic industries likeiron and steel, nonferrous metals and somechemicals grew rapidly from the beginningof the 1970s, and the drive into heavy andchemical industries accelerated up to theearly 1980s. In the first half of the 1980smachinery, electrical machines, shipbuil-ding and the automobile industry wereamong the major rapidly growing indust-ries, whereas the less pollution-intensiveindustries such as beverages, tobacco, andtextiles grew slowly. In the second half ofthe 1980s and early 1990s, the former in-dustries grew continuously and their sharein industrial production already surpassed30 % in 1989.

2.2 The Current State of Envi-ronmental Quality in Korea

The rapid growth achieved in Korea withthis industrial transformation was pur-chased at great environmental costs, whichwere most visible from the early 1980s.The drive to “rush to industrialization” haspolluted air unbearably in major cities andindustrial areas. And streams, rivers, and

soils were badly polluted by acid rain,chemicals and chemical fertilizers.Since for 20 years environmental concernswere never considered in its economic de-velopment plans, Koreas experienced theclassical degradation of the environmentthrough industrialization. It is very difficultto show the environmental trends since thebeginnig of industrial take-off owing tolacking data in the earlier periodand stillexisting vast discrepancy between officialenvironmental statistics and perceived realsituation2).As there is no alternative information otherthan the official one, I will describe in thefollowing some recent environmentaltrends according to the officially publishedinformation3).

2. 2.1 Air Quality

A recent survey on overall air pollution inKorea shows that there has been improve- 2 There exists only one critical report „Pollution

Map of Korea“(1986) on the environmental si-tuation in 1970s. It was prepared by dissident’sgroup and published with the recommendationwords of Korean Archbishop Suwhan Kim.Time-series of some major envronmentalstatstics are currently available since 1980. En-vironmental statistics in Korea is still very in-complete in scope, not to mention its quality. Itcovers less than 50% of OECD standards forthe present.

3 For more detailed statistical information, seeMOE 1998, MOE 1999 and OECD 1997

44 KERN SOO YOON

ment. The concentrations of sulfur dioxideand total suspended particulates werefound to be on the decline, but the concen-tration of NO2 and ozone was found to berising slowly.

Sulfur dioxide: SO2 pollution has beendeclining in Seoul and Pusan since 1990,as the use of low-sulfur oil has expandedand the use of LNG is now required bylaw. In Seoul the concentration of sulfurdioxide has actually been falling since1980, when it peaked at 0.094ppm. By1988 there was a dramatic decline as thesulfur dioxide concentration level fell to0.062ppm. The decline has continued,reaching 0.051ppm in 1990 and 0.008ppmin 1998. Though the level of sulfur dioxideconcentration was in line with the level of0.015-0.023ppm recenly recommended bythe WHO for every city, no Korean city isable to meet short-and long-term air-quality standards. The sulfur dioxide con-centration is generally high in winter andlow in summer in large cities such as Seouland Pusan. Sulfur dioxide pollution in in-dustrial cities such as Ulsan, on the otherhand, is hardly influenced at all by changesof season.Total Suspended Particulates: The con-centration of total suspended particulates(TSP) in major cities has been steadilydeclining. In Seoul the concentration levelreached a peak (183) in 1986; however, itsteadily declined to 140 in 1990 and 57 in1998, which is well below the annual envi-ronmental quality standard of 150. In 1998the corresponding figures for Pusan,Taegu, and Ulsan were 74, 72 and 72 re-spectively, all of which were also well be-low the environmental quality standard.Acid Rain: The acid-rain problem wasmost serious in Pusan, where the recordedpH value was 4.7 in 1998. The situation in

other cities except Taigu was not muchbetter, since the pH values measured werebelow 5.6 according to new weighted sta-tistics in 1998.Other Pollutants : NO2, O3, and CO levelsin major cities in 1998 revealed that theenvironmental quality standards were gen-erally met, though O3 levels had increasedslightly over the previous years in Seoul,Pusan, Kwangju, and Taejon. But thesepolluntants are problematical, as these gomore frequently beyond the hour-basedstandards because of rapidly increasingcars.The concentration of NO2 decreasd slightlyin Seoul, Pusan, Taejon and Ulsan in 1998,while the concentration of CO rose slightlyonly in Taegu.The concentrations of lead (Pb) and cad-mium (Cd) in the atmosphere in major cit-ies declined or remained at about the samelevels as the year before.

2.2.2 Water Quality

The levels of pollution in the main tribu-taries of the four largest rivers had beenimproving from the record high valuesnoted in 1988, but water shortage com-promised the rivers' natural ability to cleanthemselves, causing concentrations ofvarious pollutants to rise again. Althoughoverall water quality recovered sharply, thewater quality at some points along theNakdong and Youngsan Rivers remainedat grade III. Due to trimendous investmentin environmental infrastructure since thebeginning of the 1990s, the Kumho River,a branch of the Nakdong River, AnyangStream, a branch of the Han River, andMushim Stream, all three of which hadbeen major sources of pollution, have seentheir water quality improve somewhat, but


the water pollution remains still the mostdifficult trouble for the government.

2.2.3 Soil Contamination

Soils in Korea are in general still suitablefor agricultural activities, but the cadmiumconcentration on agricultural land is 10percent higher than the background con-centration. The concentration levels ofheavy metals in the soil in the vicinity ofinactive or abandoned ore mines is actually300 percent higher than those in agricul-tural or residential areas, since most ofthese mine operations were establishedbefore the 1970s, when there were nearlyno environmental regulations in place.

2.2.4 The Quality of Coastal Waters

The water quality along Korea's coasts hasbeen maintained at Grade II (COD 2mg/lor less) since 1991. On average, the watersalong the coasts of Cheju Island are theleast polluted of all. Compared with thecoasts of Cheju Island, the average level ofwater pollution along the coast of the EastSea is higher. The water quality of mostcoastal waters was found to be improving.However, as the concentration levels ofnutrients such as T-N and T-P, which aremajor pollutants causing red tides, far ex-ceed the standards for sea-water quality.

Parallel to the above which is directlybased on the official statistics, one can alsoread recent environmental trends in Koreaindirectly through the government’s actualpolicy responses.In spite of a recent declining trend in sul-fure dioxide concentrations, the increasingnumber of cars in Korea, which reached 10million in 1997, has lead the governmentto tighten measures to reduce vehicle andindustrial pollution through fuel substitu-

tion and low-emission diesel and electricvehicles .Efforts to reduce per capita water use arefocusing on a variety of measures to im-prove water-use efficiency. Ongoing newinvestment in sewage treatment aims toincrease the ratio of treated to untreatedwater from the current 42 percent treat-ment ratio to a ten-year goal of 80 percentby 2005.Soil contamination and cleanup are re-ceiving increasing attention following pas-sage of the Soil Protection Act of 1996,which placed emphasis on developingways to clean up the 140 abandoned mines,100 landfills, and 60 military storage areasin Korea. The new act calls for develop-ment of criteria for soil cleanup and reme-diation and adoption of a “superfund” tocarry out the work. In addition to thesemeasures to reduce national pollution, re-gional pollution problems are challengingthe Korean government increasingly; theseinclude air and water pollution from NorthKorea, acid rain from China, and pollutionof the Yellow Sea.

2.3 Rapid industrialization andEnvironmental Degradation

The environmental Kuznets curve(EKC)describes that while economic growth maylead to increased degradation, other factorsmay cause an eventual downturn, as in-come levels increase continuously. But notall economists accept this hypotheses as ageneral metaphor for the relationship be-tween income level and the environmentalquality. Keneth Arrow, Nobel laureate inEconomics remarks recently that whilethese inverted-U relationships do indicatethat income growth may associated with

46 KERN SOO YOON

improvement in some environmental indi-cators, “they imply neither that incomegrowth is sufficient to induce environ-mental improvement in general, nor thatthe environmental effect of growth may beignored, nor indeed, that the Earth’s re-source base is capable of supporting in-definite economic growth” (Arrow et al1995).After the above described environmentaltrends, it may be tempting to veryfy theEKC hypothesis in Korean case. But un-fortunately it is almost impossible to test itstatstically because of the lacking timeseries data, as was mentioned before. ButKim(1999) has successfully demonstratedthat the inverted U-shape story did nothappen to Korea during the period 1980-95by making use of index of environmentalpressure. And he also shows that each offour types of pollutants(CO2,SO2, NO2and BOD) had different trajectory becausedifferent economic activities and govern-ment regulations have influenced eachemission to a different extent, so that it isdifficult to discern the existence of aKuznets curve by observing one or twopollutant emissions.So it may be asserted that Korea was noexception to the East Asian pattern of rapidindustrialization without any environmentconcerns(O’Connor 1996), and did withoutthe latecomer's advantage.

3. Environmental Policy in Ko-rea

3.1 Development of Environ-mental Policy in Korea : AnOverview

3.1.1 Environmental Policies in the1960s and 1970s

The backbone of environmental admini-stration was formed by the legal and regu-latory measures taken since the 1960s.Asearly as 1963 Korea enacted its first basicstatute regulating environmental policy, thePublic Nuisance Prevention Act4). At thattime, however, there was little concernabout environmental quality and this actwas introduced more with an eye to at-tracting foreign investment and played norole in preserving the environment at thattime. Actually it was not implemented until1969, when the associated regulations wereadopted.As rapid industrialization and urbanizationsince the 1960s made the quality of theenvironment deteriorate rapidly, especiallyfrom the mid-1970s on, the governmentwas pressured to take measures to handleemerging environmental problems. Thegovernment’s response to such pressureswas to enact a new law, the EnvironmentConservation Act (ECA), effective onJuly 1, 1977. The ECA, Korea's first pieceof comperhensive environmental legisla-tion, introduced many important featuresof environmental management such as

4 In contrast to ths is the common view in the

Korean literature such as Chung/Jeong(1994),Eder(1996:15) found the origin of Korean envi-ronmental law in the 1961 New Forest Law,which began a major national reforestorationprogram.


promulgation of environmental standards,environmental monitoring, setting andcontrol of emission standards, and admin-istrative regulation and criminal sanctionsfor violations of environmental regulations.The Act was thereafter several timesamended. Though it could thus create a setof criteria and sanction schemes to dealwith environmental problems, the govern-ment chose not to implement the measuresprescribed by the ECA, mainly owing tothe fear that strict implementation of theECA could burden the economy and slowthe pace of economic growth. In fact, thegovernment did not even establish the ad-ministrative infrastructures that were nec-essary for the implementation of the ECA.The ECA had remained dormant until amajor policy change was made in the early1980´s, when an amendment of the KoreanConstitution introduced the right to a safeenvironment as a basic human right.

3.1.2 Environmental Policies in the1980s

The declaration of Environmental Rights inthe new Constitution and the establishmentof the Environment Administration(or theOffice of Environment) in 1980 were amajor development in the environmentalpolicy in Korea. But the task of this newlyestablished, subcabinet agency of theMinistry of Public Health and Social Af-fars was still narrowly defined, and itsfunction was restricted to prevention ofenvironmental pollution, leaving manyenvironment related functions to the othergovernment agencies.In spite of lacking cohesiveness of envi-ronment policy which had caused seriouscoordination and cooperation problems, inaddition to its low priority and weak ca-pacity, the environmental policies of the

1980s differed substantially from those ofthe 1960s and 1970s in two important as-pects: First, the regulation system becamemore extensive and sophisticated than be-fore. Among the newly introduced regula-tions was the Environment Impact As-sessment (1981), the Effluent Charge Sys-tem (1983), and the creation of an Anti-Pollution Fund (1986) aimed at assistinginvestment in effluent-abatement facilities.Secondly, and more importantly, someactual efforts were made to implement atleast some elements of the law, unlike the1960s and 1970s. Some of the changes inrelation to the implementation of the lawwere as follows: 1) Along with EA, localarms were established to deal with localenvironmental problems, 2) research on thenationwide state of the environment wasinitiated, 3) an effuluent charge system wasimplemented to force firms to pay for ef-fluents they emit, 4) a large public invest-ment was made to build effluent-abatementfacilities such as sewage treatment plantsand clean incinerators, 5) firms that emitlarge quantities of effluents were forced tobuild their own abatement facilities, 6) thegovernment began with a gradual substitu-tion of low-sulfur fuel.It appears that the efforts of the govern-ment during the 1980s to control pollutionmanaged to bring about some visible suc-cesses. For instance, the air quality in mostlarge cities, measured in terms of the per-centage of toxic elements such as sulfurdioxide, carbon monoxide, and nitrogendioxide was improved during this period.However, the measures taken in 1980swere not sufficient to restore the balancebetween economic growth and preserva-tion of the environment. It was generallycriticized that the charges for effluentemissions were far lower than the levelsthat reflect the true social costs, and public

48 KERN SOO YOON

investment in pollution abatement washighly insufficient. There remained manyenvironmental areas still to be addressedby the government.

3.1.3 Environmental Policies in the1990s

As the continuing rapid economic growthraised people‘s incomes and political liber-alization began, the demand for a betterquality of living also grew in Korea. Thegovernment was gradually pressured inter-nally into introducing more stringent envi-ronmental norms and investing more forenvironmental improvement. In order tocope with the above-mentioned coordina-tion problems and strengthen the enforce-ment capacity of the environmentalauthority, the EA was upgraded to thesemi-ministerial level (“HwanKyung-Chur”) and given the name Ministry ofEnvironment(MOE) in 1990, and wasagain upgraded into a real Ministry(“HwanKyungBu”) in 1994. Now theMinister of the Environment was a mem-ber of the cabinet chaired by the President.But in spite of its upgraded position, theauthorative capacity of the Ministry re-mains still limited mainly to the affairsconcerned with pollution prevention.In July 1990, the National Assemblypassed a set of completely new environ-mental statutes as a replacement for theEnvironmental Conservation Act. Thesestatutes included the Basic EnvironmentalPolicy Act (BEPA), the Air Quality Pres-ervation Act, the Water Quality Preserva-tion Act, the Noise and Vibration ControlAct, and the Toxic Chemical Control Act.Futhermore, in March 1991 the NationalAssembly enacted the Excretion and Ani-mal Waste Disposal Act, and again in De-cember 1991 the National Environment

Conservation Act and the EnvironmentEnhancement Expense Burdening Actwere passed by the National Assembly.With this series of enactments, Korea hadan almost complete portfolio of sophisti-cated environmental statutes (25 Acts)5.In 1995 the government provided “GreenVision 21” which recognized the urgentserious effort to improve the Korean envi-ronment and presented an ambitious time-table for the improvement of the environ-ment. After this had found support inMarch 1996 in the “Presidential Vision forthe Environmental Welfare,” a Mid-termComprehensive Environmental Conserva-tion Plan was made by the MOE in 19976).

3.2 The Environmental Admini-stration in Korea

Since Korea is ruled by a presidential sys-tem, most environmental policies havebeen proposed by the MOE and the Presi-dent takes major responsibilities in policydecisions and implementation. As is thecase in many countries, many other minis-tries and agencies are involved in themaking of environmental policy, and theadministrial functions are increasinglyshared by regional offices and local gov-ernments in Korea. The six Regional Envi-ronmental Branch Offices were establishedin 1986 and upgraded to the Regional En-vironmental Offices in 1990 have been thekey organizations handling the affairs ofregional environmental management. Asadministrators and staffs of the Regional

5 For the list of these laws, see OECD 1997

pp40-42 and MOE 1999 p.39 and the followingsection of this paper.

6 See the homepage of Korean Ministry of Envi-ronment(MOE) at www.moenv.go.kr for theplan.


Offices are appointed by the central gov-ernment and there is little room for localgovernments and residents to communicatewith the offices, they have often been criti-cized as an inefficient system incapable ofgiving sufficient consideration to regionalparticularities and the needs of local resi-dents sufficently.Although the environmental administrationin Korea is still highly centralized, someinstitutional rearrangements have beenmade recently for regional environmentalmanagement (Jeong 1997). Legally, theauthorities in charge of regional environ-mental management had been shared bythe local/provincial governments and thenational government. Due to the gover-mental policy of centralized control andthe weak managerial capacities of subna-tional governments, however, the subna-tional government authorities had playedvery limited roles in the implementation ofenvironmental policy until mid-1992. In1992 a number of environmental responsi-bilities were devolved upon city/provincialgovernments as the part of effort to decen-tralizing environmental management. Thedevolved reponsibilities include (1) issuingpermits on the establishment of variouspollution sources (i.e., air pollution, waterpollution, solid waste, noise pollution), (2)compliance monitoring and enforcement,and (3) the imposition and collection ofvarious fines, etc. Considering the weakmanagerial capacities and vulnerable fi-nancial status of subnational government,many environmental experts were warningagainst the rapid devolution of environ-mental responsibilities.

3.2.1 Environmental Administrationin the Central Government

The Ministry of the Environment (MOE) isthe headquarters of environmental preser-vation efforts. It is responsible for the for-mulation of policies and planning such as aMid-term Comprehensive Plan for envi-ronmental improvement aiming to preservethe natural environment and to preventenvironmental pollution. Of the ca. 1,300staff members with MOE, about 400 offi-cials are now working at the headquarters.central organization has a number of sub-sidiary organizations under it: the CentralEnvironmental Dispute Settlement Com-mission, the National Institute of Environ-mental Research, the Environmental Offi-cials Training Institute, the Korea Envi-ronment Institute, four EnvironmentalManagement Offices for each of the fourmajor rivers (Han, Nakdong, Keum andYoungsan), and four Regional Environ-mental Management Offices under each ofthe Environmental Management Offices.a) The Central Environmental DisputeSettlement Commission : Under Article 2of the Environmental Dispute SettlementAct, the MOE oversees a Central Envi-ronmental Dispute Settlement Commissionlocated at headquarters as well as RegionalEnvironmental Dispute Settlement Com-missions in Seoul and in the nation's sixlargest cities and provinces, the task ofwhich is to settle disputes over environ-mental pollution. There are 18 staff mem-bers working for the secretariat of theCentral Environmental Dispute SettlementCommission to handle paperwork for dis-pute settlements. The Central Environ-mental Dispute Settlement Commissionconsists of seven members including thechairman.b) The National Institute of Environ-mental Research: The institute is respon-

50 KERN SOO YOON

sible for supporting the Ministry of theEnvironment in the formulation of envi-ronmental policies through surveys andstudies, research, tests and assessmentsrelated to the prevention of environmentalpollution. This institute was separated fromthe National Health Research Institute inJuly 1978 as a specialized research insti-tute on the environment. With the inaugu-ration of the Environment Administrationin 1980, the institute was transferred to theEnvironment Administration. The instituteconsists of four departments, two sections,one research center and four water-qualityinspection laboratories, with a total of 214staff members employed.c) The Environmental Officials TrainingInstitute: In response to rising demandsfor environment-related administrativework and specialization and diversificationof environmental administration, there hasarisen a need to strengthen education andtraining programs for environmental offi-cials. A training department established inJanuary 1990 under the National Instituteof Environmental Research was expandedin January 1990 to become the Environ-mental Officials Training Institute. Thisinstitute is responsible for the educationand training of government environmentalofficials, private-sector technicians, andenvironmental managers.d) The Korea Environment Institute: AnMOE think-tank, it not only develops andevaluates environmental policies, but alsoreviews environmental impact assesss-ment. It was formed in September 1997from the Korea Environment TechnologyResearch Institute, which was establishedin 1993.e) Environmental Management Offices :In order to delegate some of the environ-mental responsibilities of the MOE, theEnvironmental Management Office was

established under the MOE. The Environ-mental Management Office has four Re-gional Environmental Management Officesunder it. The Regional EnvironmentalManagement Office came out of the Envi-ronment Monitoring Management Office,which was established in July 1980. Alsounder MOE, there are two semi-private,commercial organizations, the Environ-ment Management Corporation and theKorea Recycling Corporation.Related Ministries :As environmentalpolicies relate to a wide range of activities,the government’s environmental admini-stration is splitted among a number ofministries, as the <Table 2> shows. Espe-cially owing to its narrow functional defi-nition, and as an inheritence from its ear-lier institutional structure, MOE in Koreamust coordinate with other ministries andadmistrative bodies responsible for envi-ronment-related policies. Though the taskof MOE widens gradually, it plays still aminor role in the policy decision in thecabinet which is dominated by economyrelated ministers. According to the BasicEnvironmental Policy Act, the major envi-ronmental policy decisions must be coor-dinated by the Environmental Conserva-tion Committee, which is chaired by theprime minister and to which ministers ofMOE and other environment-related min-istries and representatives of nongovern-mental organizations. This committee isresponsible for developing and coordinat-ing comprehensive mid- and long-termconservation plans, deciding on annualpriorities of environmental conservationprojects and allocting the environmentalbudget, supporting the popular environ-mental conservation movement, and re-viewing other environmentally importantissues..


<Table 2> Environment-Related Administration of the Central Government

Ministry of Science &Technology

o Coordination of nuclear safety controlo Establishment and implementation of measures aimed at preventing radioac-tivityo Regulations on transportation, handling and disposal and treatment of nuclearand radioactive industrial wastes

Ministry of Agriculture& Forestry

o Measures for agriculture and forestry pollutiono Planning and technical guidance on the development of agricultural water

Ministry ofCommerce,Industry &Energy

o Import/export of toxic substances and import restrictions on industrial wasteso Allocation and management of industrial siteso Supply of low-sulfur oilo R&D on new and alternative energyo Safety management of nuclear power generators and disposal and treatment ofnuclear wastes

Ministry ofConstruction& Transpor-tation

o Formulation and coordination of a comprehensive plan for national land useo Designation of areas subject to the National Land Use and Management Acto Designation of areas where development is restrictedo Establishment and coordination of a comprehensive plan for water-resourcesdevelopmento Management of rivers, reclamation and use of rivers and lakeso Type approval and performance tests of motor vehicleso Designation and development of tourist attractions

Min. of Laboro Countermeasures against occupational diseases and improvement of workingconditions

Ministry ofCulture &Sports

o Designation, protection and management of national monuments such as rareplants, animals, etc.

Ministry ofMaritimeffairs &Fisheries

o Protection of marine resources and countermeasures against marine pollutiono Reclamation and management of public sea waterso Countermeasures against pollution of coastal waterso Supervision and prevention of marine pollution

The Office ofForestry

o Formulation of Basic Forestry Plano Protection of wild animals and restrictions on huntingo Protection of forests and supervision of activities destructive to forests

AgriculturePromotionAdministra-tion

o Improvement of agricultural land and provision of guidance on soil improve-ment

Source: MOE 1999, p.35

52 KERN SOO YOON

3.2.2 Environmental Administrationat the Regional/Local Level

When the Environmental Conservation Actwas enacted in 1977, the responsibilitiesfor implementing environmental policieswere given to local goverments. But theEA, when establishing the six regionalenvironmental offices in 1986, gave themajor task of implementing regulations tothese offices. Only in 1992 were all of theresponsibilities of monitoring and enforc-ing environmental regulation delegated tothe provincial governments. Since a seriesof water-pollution accidents since 1991,responsibilities for environment policiesare beginning to be shared by the Envi-ronmental Management Offices and pro-vincial governments based on the locationof emission sources. And most implimen-tation tasks have been futher transferred tolocal governments . Now, together with theEnvironmental Management Offices underthe MOE, local governments are responsi-ble for regional environmental manage-ment within their jurisdiction.Local governments carry out tasks dele-gated from the Minister of the Environ-ment, in addition to their own work. Themajor tasks of the provincial/local authori-ties are developing and implementing re-

gional environmental protection withintheir jurisdiction, providing water supplyservices and installing and operating sew-age and waste-water treatment facilities,preparing environment impact assessmentsand ex-post evaluations, mornitoring vio-lations of permissible emission standardsand illegal emissions and discharges, andconducting activities associated with na-ture conservation and design and manage-ment of regional parks.As the administrative task for environ-mental conservation continues to increase,the environmental administrative organi-zation of local governments has been ex-panding rapidly in the 1990s. And alongwith the increasing importance of the envi-ronmental administration, the status of theenvironmental department has risen also.In addition to various Environmental Pro-tection Departments in every local gov-ernment, including cities, counties, anddistricts, which are responsible for admin-istrative environmental work, the provincesas well as six metropolitan areas operatetheir own Health and Environmental Re-search Institutes, which monitor pollutionlevels and are responsible for conductingtests and inspections within their own ju-risdictions.


<Table3>History of Sharing Enforcement Responsibilities in Environmental Administration

Issuing Permits Monitoring/Enforcement Administrative Measures

Before ´84.2. Provinces Provinces Provinces

Provinces

´84.3.- ´86.11 Provinces CentralTask-forces

- Major Industrialcomplexes,- Specific ToxicMaterials,- Type 1-3 Emis-sion Sources inIndustrial Com-plexes

Provinces

Regionalbranchoffices

Pollution Sourcesin Industrial Com-plexSpecific ToxicMaterial Sources

Regionalbranchoffices

Sources in Indus-trial ComplexesSpecific ToxicMaterial Sources- Type 1-3Sourcesoutsideindustrial complex

Re-gionalbranchoffices

Sources in Indus-trial ComplexesSpecfic Toxic Ma-terial SourcesLarge DustSources(ex cementfactories)

´86.12-91.3

Prov-inces

- Sources outsideIndustrial Complex

Provinces- Type 4-5 Sourcesoutside IndustrialComplex

Prov-inces

- Sources outsideIndustrial Complex

RegionalEnviron-mentalOffices

Sources in Indus-trial ComplexesSpecfic Toxic Ma-terial Sources- Large DustSources(ex;cementfactories)

RegionalEnviron-mentalOffices

Sources in Indus-trial ComplexesSpecfic ToxicMaterial Sources- Large DustSources(ex;cementfactories)

´91.3.-´92.7

Prov-inces

- Sources outsideIndustrial Com-plexes

Provinces- Sources outsideIndustrial Complex

Provinces

´92.7-´94.5 Provinces Provinces Provinces

Environ-mentalMan-agementOffices

Sources in Indus-trial ComplexesSpecfic Toxic Ma-terial Sources- Large DustSources(ex;cementfactories

Environ-mentalManage-mentOffices

Sources in Indus-trial ComplexesSpecfic ToxicMaterial Sources- Large DustSources(ex;cementfactories

Environ-mentalMan-agementOffices

Sources in Indus-trial ComplexesSpecfic Toxic Ma-terial Sources- Large DustSources(ex;cementfactories

After ´94.5

Prov-inces


Provinces- Sources outsideIndustrial Com-plexes

Prov-inces


Source:Jeong (1998), p. 282

54 KERN SOO YOON

3.3 Environmental Laws andRegulations

3.3.1 Development of Environ-mental Laws

Article 35 of the Korean Constitutionstates that all people have the right to leada life in a healthy and pleasant environ-ment, and the government and peopleshould make efforts to conserve the envi-ronment. The same article stipulates that“the contents and exercise of environ-mental rights shall be decided by laws,thereby asigning these environmentalrights to environmental laws. Environ-mental laws can thus be regarded as lawsthat specify people's rights as guaranteedby the Constitution, namely, the right forpeople to live pleasant and safe lives in asound and healthy environment. That is,people have a basic right to clean water,clean air, and the natural amenity of theland.As was seen above, the formation and de-velopment of environmental laws andregulations are often closely related to thepublic perception of environmental prob-lems in Korea. Environmental problemsbegan to emerge in the 1960s when thecountry started to pursue ambitious indus-trialization with the launch of the firstFive-year Economic Development Plan. Toaddress environmental problems arisingfrom industrialization, the Public NuisancePrevention Act was enacted in 1963. ThisAct consisted of 21 articles, all of whichwere lacking in regulatory measures andpracticability. The act was drastically re-vised in January 1971 to introduce permis-sible emission standards and a dischargingfacilities permit system. As the economycontinued to experience rapid growth,public concerns about environmental pol-

lution grew. The Public Nuisance Act wasreplaced with the Environmental Preserva-tion Act on December 31, 1977, with theobjective of preventing environmentalpollution. To this end the government alsointroduced new systems to help cope withenvironmental problems more actively andcomprehensively, viz. the EnvironmentalImpact Assessment, environmental stan-dards, and restrictions on the total volumeof pollutants. However, due to the ever-worsening environmental conditionscaused by heavy industrialization in the70s-80s, measures that could deal witheach source of pollution separately wereneeded to effectively address acute envi-ronmental problems. Against this back-drop, the Environmental Preservation Act,enacted in 1977, was broken down into sixlaws on August 1, 1990: the Basic Envi-ronmental Policy Act, the Air QualityPreservation Act, the Water Quality Pres-ervation Act, and the Noise and VibrationControl Act.A number of new environmental laws havebeen enacted more recently: the Soil Pres-ervation Act, which aims to prevent dam-age to human health and the environmentdue to soil contamination and to properlycontrol and preserve soil; the DrinkingWater Act, which aims to control the qual-ity of bottled water; and the UndergroundLiving Space Air Quality Control Act,which aims to control air pollution of un-derground spaces such as subway stations.As of 1998, there are 25 environmentallaws under the jurisdiction of the Ministryof Environment.


3.3.2 Key Points of EnvironmentalLaws

The Basic Environmental Policy Act(1990)can be regarded as the basis of all envi-ronmental laws. The Act clarifies the mainobjectives and basic directions of policiesfor the nation's environmental preservationgoals and provides core principles for envi-ronmental policy. It declares that bothharmony and balance between humans andthe environment are essential to the healthof nation, cultural life, conservation ofnational territories, and sustanable devel-opment. The act also clarifies the polluter-pays principle as the main principle ofpollution control.Other individual laws are more detailedand specified as regards specific areas orsectors of the environment, according tothe objectives of the law.The Natural Environment Preservation Actcalls for protecting the natural environmentfrom any artificial damage and preventingthe extinction of endangered speciesthrough preservation of biological diver-sity.The Air Quality Preservation Act and theWater Quality Preservation Act were en-acted to help prevent damage to people'shealth and the environment due to air andwater pollution. To this end, the laws setspecific standards for pollution emissionsand impose charges for the pollutants thatare discharged. These laws are mostclosely related to the environmental prob-lems that are felt by the general public.The Noise and Vibration Control Act waspassed to control noise and vibration levelsand thus prevent any damage or harm tothe environment or its inhabitants (includ-ing people) due to excessive noise and vi-bration from factories and constructionsites, etc. The act on the Treatment ofSewage, Night Soil, and Livestock Waste-

water aims to efficiently control the treat-ment of these pollutants. The aim of theWaste Management Act is to controlhousehold and industrial wastes efficiently.The Act Relating to the Promotion of Re-source Saving and Reutilization promotesrecycling and enhances resource saving.The Toxic Chemicals Control Act waspassed to establish a comprehensive man-agement system for toxic chemicals and tostrengthen and improve the safety-inspection program. In this way the actaddresses the problems caused by the con-siderable increase in quantity and varietyof toxic chemicals following Korea's rapidindustrialization and economic growth.The Promotion of Waste Treatment Facili-ties and Local Communities Act, the Envi-ronmental Impact Assessment Act, theWater Supply Act and Sewer System Actall are supposed to contribute to improvingpublic health and creating a clean andhealthy environment.

3.3.3 Other Laws Related to the En-vironment

Environment-related laws of other minis-tries have also a significant bearing on en-vironmental issues. Pollution and environ-mental destruction can be minimized onlywhen their environmental impact is as-sessed at the initial stage of planning of adevelopment project.With environmental problems havingemerged as the greatest global challengecurrently facing humanity, domestic andinternational environmental laws are beinglegislated with increasing frequency.There are more than 50 such laws undermore than 15 ministries in Korea. The factthat environment-related laws are dis-persed across many ministries has given

56 KERN SOO YOON

rise to many efficiency- and coordination-related problems, as was mentioned above.And as policy directions of different min-istries may also differ, conflict and frictionbetween ministries result.

3.4 Environmental Expenditureby the Government

3.4.1 The Govenment’s Environ-mental Expenditure

Since the beginning of the 1990s, thegovenment’s environment expenditure hasincreased rapidly, especially investment inenvironmental infrastructure. The govern-ment budget for the environmental sectorhas increased five-fold from 457 billionwon in 1991 to 2.539 trillion won in 1997.The share of the total national budget allo-cated to the environmental budget in-creased to 2.57% in 1997 from 1.16% in1991, and the percentage of GNP also roseto 0.58% from 0.21% during the same pe-riod. The Ministry of Environment's ownbudget increased to 1.802 trillion won in1997 from 139.6 billion won in 1992. Wa-ter quality concessions, which were intro-duced in 1992, increased to 686.7 billionwon in 1997 from 212.5 billion won in1992.

3.4.2 Environmental Expenditureby the MOE

With an eye to efficient management offinancial resources for environmental in-vestment, the Special Account for Envi-ronmental Improvement was introduced onJanuary 1, 1995, and thereafter tax revenue

sources have been expanded and the taxsystem has been improved. The budget forthe 1997 Special Account increased 32.4%over 1996. A total budget of 792.1 billionwon was allocated to the account, includ-ing 258.9 billion won transferred from thegeneral account and 70 billion won inloans transferred to the Special Accountfrom fiscal financing. Revenue from theSpecial Account increased to 463.1 billionwon in 1997, an increase of 29% over theprevious year. However, revenues fromother sources still account for a significant42%, or 328.9 billion won, of the totalbudget for the Special Account.Expenditures for 1997 are composed asfollows: 272.3 billion won for the tap-water supply system, including the con-struction of a water purification system;296.1 billion won for the improvement ofsewage and waste-water treatment facili-ties; 271.7 billion won for the constructionof waste treatment and recycling facilities;6.3 billion won for the conservation of thenatural environment, including biologicaldiversity management and pollution pre-vention in closed mining areas; 8.9 billionwon for air-quality preservation, includingan air-pollution monitoring network; 133.5billion won for the development of envi-ronmental policies and technologies, in-cluding HAN (Highly Advanced NationalProject) environmental engineering tech-nology development, environmental in-dustry development and the construction ofa comprehensive environmental researchcomplex; and 91.4 billion won for envi-ronmental management and others.


<Table 4-1> Environmental Budget of the Central Government Account (Unit : 100 mil. won)

1991 1992 1993 1994 1995 1996 1997

Total environmental budget 4,570 5,819 6,919 11,232 17,394 21,979 25,359Total National budget(percentage of the total budget)

393,669(1.16)

438,421(1.33)

511,879(1.35)

644,575(1.74)

745,344(2.33)

853,083(2.58)

985,933(2.57)

* GNP(percentage of GNP)

2,142,39(0.21)

2,387,04(0.24)

2,655,17(0.26)

3,037,72(0.37)

3,489,79(0.50)

3,734,81(0.59)

4,368,70(0.58)

Min. of Environment Min. of Const. & Transp. Min. of internal Affairs Min. of Agricul. Fishery Min of Economy and Finance

2,7181,75200100

1,3962,1482,1250150

1,8872,3822,5000150

4,7161,9163,6900910

6,7293,0164,7214002,528

8,9673,7535,5784003,281

10,8024,0708,4674001,620

<Table4-2> MOE Budget by Sector (Unit : 1 mil. won)

1996 1997 difference %Total 885,071 1,080,203 195,132 22.0Piped Water Supply 244,153 272,327 28,174 11.5Sewage and waste-water treatment 237,520 296,079 58,559 24.7Waste treatment 187,998 271,734 83,736 44.5Preservation of natural environment 4,282 6,281 2,000 46.7Air-quality preservation 9,968 8,945 -1,023 -10.3Environmental and technology policydevelopment

123,293 133,463 10,170 8.2

Environmental management, etc. 77,857 91,374 13,517 17.4Source:MOE 1999

3.4.3 Fiscal Transfers to LocalGovernments

3.4.3.1 Financial Resources forTransfers to Local Govern-ments

As a means of transferring financial re-sources of the central government to localgovernments, the Special Account fortransfers to local governments was intro-duced in 1991. Certain construction proj-ects for water pollution prevention beganto be financed through this account. The

use of transfers to local governments isrestricted to five types of project underArticle 4 of the Special Account for Trans-fers to Local Governments Act: waterpollution prevention projects, road con-struction, rural development projects,youth education programs, and balancedregional development projects.In 1991, the year in which the system wasfirst introduced, revenues for the SpecialAccount for the transfers to local govern-ments came from various sources, as pro-vided for under Article 5-1 of the Act Re-lating to the Adjustment of National andLocal Tax: 100% of telephone taxes, 15%of liquor taxes, and 50% of taxes gained

58 KERN SOO YOON

from excess land ownership were trans-ferred to local governments. In 1992 trans-fers from the liquor tax were raised sharplyto 60%. In 1994, in order to offset lossesincurred when the oil tax and passenger-car tax were separated from the local tax tobecome a transportation tax, the percentageof the liquor tax to be transferred to localgovernments was raised to 80% from 60%,and was raised again in 1997 to 100%.With tax revenues rising, financial re-sources continue to increase, and morefunds are being allocated to environmentalimprovement projects. Funds for the waterpollution prevention project, among others,saw a noticeable increase since 40% of theRural Development Tax was added to thefund starting in 1995. In 1997 the relatedlaws were revised again to provide an ad-ditional 10% of the liquor tax for waterpollution prevention projects and to raisethe amount allocated to water pollutionprevention projects from 17% to 24.5%.

3.4.3.2 Financial Resources for Wa-ter Pollution PreventionProjects

Financial resources for water pollutionprevention projects increased to 686.7 bil-lion won in 1997 from 221.6 billion won in1992, thanks to institutional improvementslike transfers to local governments. 1997saw a sharp increase in transfers for waterpollution prevention projects due to theadditional 10% of liquor tax and a rise inthe percentage of allocation.Until 1994 only four major projects - con-struction of sewage treatment facilities,replacement of sewage pipelines, con-struction of night-soil treatment facilities,and river-water purification projects - hadbeen subsidized. In 1995 the constructionof sewage systems in rural areas was added

to the list of projects subject to subsidy,and in 1997 the construction of collectivelivestock wastewater treatment facilitieswas added as well.


4. The Popular Reponse to Envi-ronmental Challenges in Ko-rea

Numerous polls conducted around the year1990 show that clean water and air havebecome the most important public concernin Korea today(Koo 1996). Since theirmaterial well-being,especially that of themiddle class has improved, people are nolonger concerned about having sufficientfood, clothing, and housing. As NormanEder(1996) rightly notes in his study onKorean environmental management,“Nowadays no issue is spoken of moreoften than the condition of Korea’s naturalenvironment.”

4.1 The Present Situation ofKorean EnvironmentalNGOs

According to the recent annual report“1999 Environmental White Book” pub-lished by the Ministry of the Environment,there were 440 environmental NGOs inKorea as of April,1999. These are classi-fied in three categories, depending onwhether the organizations were legallyregistered with or permitted by the respon-sible ministry for certain activities. Ofthese, 119 are environmental NGOs regis-tered with the government, 271 are unreg-istered environmental groups, and 50 areunregistered groups originated from othersocial movements, but now active in sig-nificant environmental activities.Among these various groups, the followingcan now be regarded as leading environ-ment NGOs in Korea(Eder 1996):The Korea Federation for the Environ-mental Movement(KFEM) is registered,has now more than 50,000 members and

national-wide 26 branches. KFEM is thecountry's oldest and largest environmentalNGO. Its roots lie in the Anti-PollutionMovement Association, Korea’s firstpurely environmental activist group. Itpublishes Environmental Movement, with acirculation of 20,000.The Baedal Eco-Society, now Green Koreais an unregistered environmental groupwith an annual budget of $600,000 and10,000 members. It has fifteen chaptersaround the country and headquarters inTaejon. Its purpose is to give a greater de-gree of scientific credibility and “sub-stance” to the Korean environmentalmovement.The Citizens’ Council for Economic Jus-tice is unregistered. With its annual budgetof $625,000 and 10,000 members, it pro-motes nonviolent approaches to a varietyof issues, not just environmental. Its Centerfor Environmental Development workstoward putting environmental issues intotheir proper social and economic context.It is not easy to describe the ideologicalcharacteristics and political directions ofthe activities of environmental NGOs onthe whole, but we can classify Korean en-vironmental NGOs in five categories basedon their activities, as follows (Kang 1994):Some organizations perceive environ-mental issues in relation to the structualcontradiction of our society (contradictionsof monopoly capitalist society, and contra-dictions involved in the division of Korea)and pursue anti-nuclear, anti-pollutionmovement in the name of the cause of na-tional democratic movement. They havebeen always critical of the government’sdevelopment-oriented policies. Recentlythey have gradually begun to go along withcitizen`s movements, moving away fromtheir traditional stance of struggle andcharges. This shows that the character and

60 KERN SOO YOON

direction of the environmental movementhas been changing along with the socialchange of the 1990s. The representativeorganizations in this category are the Ko-rea Action Federation for Environment, theYoungkwang Green Club, the YoungduckCommittee for the Boycott of the Buildingof Nuclelar Waste Land, and the GreenTransportation Movement, etc.There are some organizations for the con-servation of nature. They are involved inactivities of the so-called `New VillageMovement`(Seamaeul Woondong), whichwas initiated in the early 70s by the Parkmilitary government. They are esta-bilished, funded, and controlled by thegovernment and are depoliticizing thestructural and political character of envi-ronmental issues by campaigning for na-ture conservation. The representative or-ganizations are the Korean Central Councilfor Nature Preservation, the Korea Envi-ronmental Preservation Association, theKorean Council for Wild Animal Preser-vation, etc. In 1990s there emerged a newstyle of NGOs which also emphasize theecological protection of nature, such as theFriends of Nature, the Love of Nature As-sociation.Some organizations are working for envi-ronmental protection by means of changinglifestyles. Distinct from other organiza-tions, these are active not solely in envi-ronmental issues, and they are more ver-saltile and inclusive. They carry out vari-ous kinds of action such as citizens' envi-ronmental education, the establishment ofa system of counterinformation , interna-tional solidarity, critical action against thegovernment's environmental policies byhighlighting the disputed points of thosepolicies, etc. These includes citizens' or-ganizations, youth organizations, religiousorganizations, labor unions and peasant

organization like YMCA , the Citizens'Coalition for Economic justice, the Con-sumer Union of Korea, the Women`s As-sociation for Democracy, etc. Thoughsome organizations are weak in their ac-tions and relatively narrow in their scopeof action, they have a latent potential asenvironmental movements because of theirwide range of activities and comprehensivearea of work.There are some local environmental or-ganizations whose central concerns arelocal environmental issues. Some of thoseare expanding their area of concern even toenvironmental education and the recyclingmovement, even though they were moti-vated by the preservation of the upperstream of a river for drinking water or theboycott of expansioning pollution facili-ties. Those are the Council for the Relief ofNakding River, the Citizens` Associationfor the Environment of Kunsan/Okgu Re-gion, the Association for EnvironmentalPreservation, etc. The number of theseorganizations are increasing, but manyorganizations are suffering from vulnerablefinances, poor leadership, failure to con-tinuously develop the tasks of action, sothat most of them deserve hardly theirname.Lastly, there are groups of experts and re-search institutes which are exploring alter-native environmental policies for resolvingenvironmental issues. Among those, threeorganizations, the Environment & Pollu-tion Research Group, the Korea Eco-Club,and the Environmental Policy ResearchInstitute, have a close relationship withenvironmental NGOs. Apart from these,many organizations are emerging, but mostare organizations that support the govern-ment or are dependent on governmentprojects.


4.2 The Development of KoreanEnvironmental Movements

The history of environmental movementsin Korea began with collective action bylocal victims of negative environmentalstates of affairs. It is not unproblematicalto define such actions (which, by their na-ture have no continuity and organization)as social movements, but Korean environ-mental movements have grown out of thissprout. It was later combined with an or-ganized effort through the establishment ofPollution Research Institute(1982). Since1988 the movements has expanded to en-compass civic movements. The history ofthe Korean environmental movements canbe divided broadly into four periods(Koo1996 and 1998, Jeong/Lee 1996)

4.2.1 The First Period (1961-1980)

The first Korean environmental action wasrecorded in 1966, an anti-air pollutionprotest against a thermoelectric plant inPusan. While the industrial complex hadgrown rapidly, the environmental move-ment was still led by scattered groups oflocal residents suffering from industrialpollution. The government’s policies atthis period were simply to ignore calls forenvironmental protection, pointing to thecause of economic growth. The govern-ment in this period completely favoredindustry by quashing local residents` com-plaints, denying compensation, and thesimple use of police force and blockades.Sometimes partial compensation or reloca-tion of residence was negotiated by thegovernment, but always with very favour-able terms and results for big industry.Judicial satisfaction was possible, but themany difficult steps and difficulties dis-couraged most local-level pollution vic-

tims. The result was that industrial com-plexes recklessly spread air pollution, wa-ter contamination and industrial waste,ultimately to levels endangering the healthand lives of both employees and residents.The Korean government enacted the “En-vironment Preservation Act” in 1977,which laid the ground for systematic envi-ronmental-protection measures and it alsoannounced the “Charter of EnvironmentalProtection” in 1978. But the environmentalmovement was harshly suppressed by thegovernment. And only individuals, notgroups, were allowed to negotiate withpolluting industries for financial compen-sation and legal settlements.

There was virtually no citizens` environ-mental organization, except “official”ones. This was the dark period of the envi-ronmental movement, harshly suppressedby government and not receiving broadsocial support.

4.2.2 The Second Period (1980-1987)

In the new era called the “1980 Spring ofSeoul”‚ after the assassination of PresidentPark in October 1979, environmental pro-tection was for the first time constitution-ally guaranteed, and the Administration ofthe Environment was established. This newagency began to address the accumulatedenvironmental problems and to respond topublic demands, which led to an improvedsocial atmosphere for the activity of theenvironmental movement. Actually, duringthe period between 1980 and 1987, theenvironmental movement gained momen-tum on an increasingly extensive scale. Asurban residents were becoming aware ofthe value of a clean environment and theredressing necessity, the environmental

62 KERN SOO YOON

movement inspired participation amongthe general public.

The environmental movement at this pe-riod is mainly led by social activists. Butenvironmental organizations were stilluable to transcend local conditions andeach group’s simple concern for its ownimmediate interests. Though local residentsand activitists often raised political issues,their lack of technical expertise could notdovetail into government protocols. Fur-thermore, vested interests and the con-sevative press had no problem weakeningactivist clout and thwarting their success.However, the movement’s dogged exis-tence continued to invigorate citizens’ en-vironmental activities.

Though it cannot be asserted that citizens`movements during this period had mucheffect on government policy, there weresome successful cases. The Ulsan and On-san residents’ environment movements hadforced the government to involve itself inthe investigation of polluted areas, and thisat last resulted in a relocation of inhabi-tants. The “Protect the Youngsan River”campaign in 1983 was a partial success andled to the abandonment of a plan for the JinRo Wine Company to establish itself there.

4.2.3 The Third Period (1987-1992)

The year 1987 is a milestone for Koreandemocracy. thanks to the successful of thedemocratization movement, freedom ofspeech was bolstered in June 1987 andfurther accelerated by the 1988 SeoulOlympic Games. The environmental-movement activists took full advantage ofthis opening and democratizing atmos-phere to enhance public environmentalawareness and to attract numerous profes-sionals. Many citizens joined the move-ment, and the government’s suspicion of

environmental activism began to fade.Also, professional environmentalists andscientists brought new authoritativenessand credibility to environmental activism,and the press stepped up its coverage ofenvironmental issues.

But in this period the thrust of the envi-ronmental had evolved from mere localvictim support to mass public educationand calls for antipollution vigilance. Andthe movement was very “local”, with fewinternational contacts. The governmentwas in a wait-and-see mode, not activelyinvolved in helping pollution victims, andcitizens had to rely on the movement’scapacity to monitor and correct industry‘sabuses.

The environmental movement had grownrapidly by the end of the 1980s. This rapidgrowth of environmental organizations wasinvoked also by the big environmental in-cidents. In 1989 one water-quality analysisshowed heavy metal and water contamina-tion in four large rivers. And again in 1990there arose several incidents of drinkingwater contamination. The activities of en-vironmental organizations and the mediaon these very visible pollution incidentsawakened public awareness and drew na-tionwide attention and condemnation.

In this period the environmental movementbegan to influence public policy and themovement had proceeded increasinglyfrom fighting for victim compensation af-ter the incidents to fighting for preventionof potential dangers. In the beginning ofthis period, the government merely re-sponded to environmentalism, without of-fering support or even much attention.Since the government still viewed envi-ronmental activism negatively, it simplysought to ignore the movement. The massmedia also tended to limit the scope of


environmental exposés, reducing them toschocking but short-lived feature articleswithout any productive in-depth analysis.But ever-stronger green voices and ever-increasing media attention eventually ledthe government to respond to public opin-ion and alter its policies. Professionalsworked to reduce dangers and guide publicparticipation in policy-making. Thus nu-merous development plans for nuclear andsolid waste disposal sites and golf courseswere postponed and some were canceled.The environmental movement at this pe-riod made the government realize the im-portance of citizens` participation in theenvironmental-policy arena.

4.2.4 The Fourth Period (1992 -Present )

With the partial implementation of localautonomy in 1991 and the 1992 UNCED inRio, the citizens` environmental movementin Korea expanded greatly, unifying andreaching out internationally. From theirearly protests against water pollution andnuclear waste disposal, the environmentalmovements changed their focus to interna-tional and global issues and began consid-ering Green Capitalism.The UNCED in Rio in 1992 had a greatimpact on the Korean Green movement.Green activism moved on a grander scale,no longer limited to Seoul now but ex-panding rapidly into a nationwide networkof organizations. Renaming of the organi-zations, expanded interests in global issues,and emphasis on public education charac-terize this period. As Korean environ-mental organizations shared common in-terests with foreign environmental activ-ists, they have tried to build network toaddress global issues as well as domesticones. Religious groups have also dramati-

cally changed their attitudes toward envi-ronmental tasks. In particular, Catholic,Buddhist, and YMCA groups were activelyinvolved in public environmental educa-tion, critical reviewing of governmentpolicies and organizing help for victims.Strongly influenced by the 1992 UNCEDin Rio, the environmental movement wasable to gain public support by releasingenvironmental information and blockingfurther business and government develp-ment plans that might endanger the envi-ronment. The loss of valuable natural re-sources caused by the destruction of theenvironment led people to coalese togetherwith environmental activists to form theirown eco-plans, rejecting the government`stechnical, shortsighted solutions. The Ko-rean government`s attitude shifted posi-tively, embracing the citizens` movement.At last, the Korean government`s intransi-gence and suspicion gave way to free ex-change of information with an eye towardsregulation, and in 1992 it adopted an envi-ronmental policy-making process that wasbased on the opinions of its citizenstakeholders.It is remarkable that environmental activ-ists are beginning to involve themselves inthe government’s plicy making and theirorganizations often collaborated with themto further the greater public interest in thisperiod.The following <table5> summaizes themain characteristics of the environmentalmovement in Korea.

64 KERN SOO YOON

<Table 5> Characterisization of Korean Green Movement

Ist period 2nd Period 3rd Period 4th PeriodParticipants victims vvctims ans third

partiesvictims ans thirdparties

general public

Timing of action after incident after incident after/before inci-dent

after/before inci-dent

Sphere of activity localized Localized regional national and global

Target of activity polluter polluter and go-vernment

Government andpolluter

Public and go-vernment

Major activity Ulsan area protest Onsan area protest Anti-nuclear mo-vement

Educati-on,monitoring andarticipation

Impact on go-vernment policy

none Little A little on impli-mentation

Much on formula-tion and mpli-mentation

Source: Jeong/Lee 1996 and Koo 1996

4.3 Evaluation of the KoreanEnvironmental Movement

The Korean environmental movement em-barked under the repressive conditions ofan authoritarian regime that gave ist high-est priority to a rapid economic growth thatpaid almost no heed to the environmen-tantal consequences. As we saw in theabove, In the early period economic com-pensation was the only motivation for thevictim protest. During the second and thirdperiods, the environmental organizationsrecruited heavily among democratizationor anti-government activists. But manyearly activists showed a tendency to utilizethe movement to achieve their own politi-cal ambitions. Sometimes fights over he-gemony, funds, and membership amongenvironmental organizations hindered co-operation among them. Even though it didnot take long for the Korean environmentalmovement to awaken public awareness andbegin to alter government policy processes,it has been able only gradually to gainpublic credence and bring about the par-ticipation of environmental scientists,

doctors and lawyers, and their professionalorganizations in the movement since 1990.The Korean environmental movement stillhas numerous shortfalls. First of all, mostof the organizations are financially weakand headquartered in Seoul. The Greenshave failed until now to mobilize massivepublic participation nationwide. here is nodoubt that the Korean environmentalmovement will continue to expand its ac-tivities, and thus Korean citizens will havethe more opportunities to speak out, par-ticipate actively in the public policy-making and implementation processes, andultimately even press for governmentalreforms. But in order to influence govern-ment policies effectively by means of analternative strategy and workable solutions,expertise in the latest scientific knowledgeand policy menus are badly needed. Andclose links and networking with interna-tional environmental organizations willbuild up their capacities and prove veryhelpful in gaining a positive influence onKorean government policy.


5. Industry’s Response to theEnvironmental Challenge inKorea

5.1 Industry’s Changing Attitude

Witnessing the growing domestic concernabout pollution incidents and environ-mental degradation caused by industry andincreasing international environmentalpressure, many businessmen in Koreanindustry are being slowly led to considerthe environment as one of the key pa-rameters for their business decisions, andhave begun to adopt environmental-management systems in their practice sincethe early 1990s. Furthermore, companieshave recognized the necessity for the es-tablishment of a comprehensive and sys-tematic environmental management andare now moving to the proactive stage. Thechanging industrial response to environ-mental issues in Korea can be describedsummarily as in Figure 1.The industry's response to environmentalissues as a whole in Korea can not be saidto have been adequate, but recently com-panies are actively adopting environmentalprograms in their business manage-ment.(Lee et al 1999). There exist variousinternal driving forces(self-awareness, im-age enhancement, good relationships withstakeholders) and external ones (trade bar-riers, public opinion, legislation, pressuregroups) for and against moving towardbecoming a greener company. Most com-panies in Korea perceive environmentalchallenges as external pressures.

5.2 Response to ISO 14000 inKorea

Since 1994 the Korean government hasbeen actively tracking global trends instandardization, such as ISO 14000 activi-ties. The government’s concern about ISO14000 as a trade barrier was the drivingforce. Two similar acts on environmentallyfriendly companies, one pushed by theMinistry of Commerce, Industry and En-ergy (MOCIE) and the other by the Minis-triy of Environment(MOE), encouragecompanies to enlist in a voluntary permitprogram under which they provide exten-sive information on their production input,processes, and output of materials, re-sources, and chemicals. If a company isaccepted in the program, it is not subjectedto spot enforcement checks for three years.Korea is one of the 36 officially “p” (par-ticipating) members of ISO/TC 207, whichhas been working on the ISO 14000 series.Unlike many other countries in which theprivate sector takes the initiative, the gov-ernment has played the major role inadopting EMS in Korea. During the incipi-ent stage, the Korea Industrial Advance-ment Administration(KIAA), under theumbrella of MOCIE, was in charge of ISOmatters. Under the superintendent ofKIAA, the Task Force for InternationalStandardization of Environmental Man-agement (TFISEM) was separately estab-lished within the Korea Employer’s Fed-eration (KEF) at the private level. A num-ber of experts from various organizationsof private companies, nongovernmentalorganizations, and the academy have par-ticipated in six sub-committees of ISO/TC207.

66 KERN SOO YOON

Figure 1 . Stage of Responding to Environmental Issues by Korean Industry

Source: quoted from Lee et al (1999, p.53)

KIAA has embarked on a pilot program forthe experimental accreditation of EMS onthe basis of ISO/DIS 14001. For the firstpilot program, 41 companies were selectedin April 1995 for a one-year-long guidanceand auditing process. Following successfulexperimentation, the second pilot programstarted in early 1996 and the formal ac-creditation scheme was formulated andimplemented in October 1996. In themeantime the Korean Accreditation Board(KAB) was founded as a private organiza-tion which plays a key role for accredita-tion and registration. And the task ofmonitoring the ISO 14000 series was alsotransferred from KIAA to the Korean Na-tional Institute of Technology and Quality(NITQ) in the process of governmentalreorganization.KAB, the only accreditation body in Ko-rea, is similar to that of JAB in Japan. As anonprofit private organization establishedin September 1995, KAB is in charge ofaccreditation and registration of quality-and environment-related matters in thesame way that JAB is7.

7 On the short comparison between acredi-

tation scheme in Korea and Japan, see Leeet al 1999 pp.54-56. A detailed analysis ofISO 14001 implementation processs wasdone by M.Mohammed (see Environmen-

Korean industries have been making farquicker responses to the environmental-management system standard (ISO 14001)than they did to the quality-managementsystems (ISO 9000 family). This is thecase for both organizational establishment(accreditation/certification/auditor training)and company-level implementation.The experience from the Uruguay Roundand the ISO 9000 family influenced thisprocess. Korean companies are worriedthat the ISO 14000 series could turn out tobe a trade barrier just like the UruguayRound.8 Perceiving that an early responseto these international standards is desirablefor corporate competitiveness, many lead-ing companies in Korea have tried eagerlyto introduce EMS as soon as possible. It isalso recognized as part of green marketingstrategies, through use of the certificate forcorporate image promotion.The Korea Chamber of Commerce andIndustry(KCCI) recently established a“Civil Environmental Management Pro-

tal Management Vol. 25 No.2 pp. 177-188)

8 This is so in Korea, in espite of theexplicitintroductory statement of ISO 14001, "Thesestandards are not intended to be used to createnon-tariff trade barriers...".

Reactiveto Environmental

Incidents

Cooperative withAuthorities forEnvironmentalImprovement

Proactive & Preventive for Environmental Incidents

1st Stage (Before 1990s)

3rd Stage(Late 1990s)

2nd Stage(Early 1990s)


motion Center”(Lee 1997), which aims topromote industry’s environmental man-agement and has published ‘The IndustrialCharter for Environmental Management’and ‘Action Principles’. KCCI plans notonly to strengthen education and publicitybut to help firms break bottlenecks in es-tablishing EMS.Until June, 30 1999, 348 Korean compa-nies had acquired the ISO 14001 certifi-cate9. Typically following industires havebeen fast in certification:export-orientedindustries (i.e. electronics), environmen-tally sensitive industries (i.e. chemicals),and construction industries, the corporateimage of which are important both domes-tically and internationally(i.e. constructionfirms)Obviously, there are different reasons forthe companies‘ acquisition of EMS certifi-cates. The Doosan Group, which was be-leaguered with a poor environmental imagedue to the phenol leakage accident at Nak-dong River in 1991, has now appeared asone of the most environmentally friendlycompanies in Korea. The company adoptedthe “Integrated Environmental ControlSystem” which is a preventive diagnosticprogram aiming to continuously improvethe environmental performance of theiroperating sites. And recently most sites ofthat business group have acquired EMScertificates to enhance their environmentalimage. A number of export-oriented largecompanies among leading groups likeSamsung, Hyundai, LG, Daewoo have alsobeen very keen to be seen as environmen-tally friendly enterprises and acquiredEMS certificates as a response to potentialtrade barriers.

9 Korea ranks as the 7th in the iso 14000 world.

Most updated information on the number ofaccreditation in international comparison is a-vailable at the internet site www.ecology.or.jp

To illustrate the problems faced by imple-menting firms, let us take a look at the ex-perience of the biggest steel company inKorea, POSCO.EMS Implementation in POSCO:POSCO at a relatively early point of timeplaced great emphasis on environmentalprotection. In the middle of the 1990s, itchanged its management policy from afocus on simply meeting regulatory re-strictions to actively promoting proactivemeasures and continuous improvement tocope with the global environmental chal-lenges. The company's medium- andlong-term environmental plans includeincreasing environmental investments on ascale of several hundred million dollarsthrough the year 2003 and minimizing thedischarge of pollutants and curtailing en-ergy consumption by improving its opera-tional practices. In line with these plans,the company in 1995 enacted the "POSCOEnvironmental Policy". Although POSCOhas a well-compiled environmental code ofpractice with stringent regulations andpublic concerns, the company becameaware of the necessity to introduce theemerging EMS for coping with rapidlygrowing environmental challenges. On thisnecessity, POSCO established its EMS,based on ISO 14001 standards, and ac-quired the official certificate through for-mal inspection by an authorized certifica-tion body in 1996. At present, POSCO isreleasing its environmental information onits Internet web site (www.posco.co.kr).

68 KERN SOO YOON

<Table 6> Number of Certified Companies in Korea

Y e a r

F i r m S i z e

1994 1995 1996 1997 1998 1999(Jun 30)

Total

Large 3 12 71 66 17 6 169Small/ Medium - 2 25 52 29 47 108 Total 3 14 95 118 65 53 348

Source:Korean Accreditation Board (1999.7)

<Table 7> Number of Certified Companies classified by industry~ 1995 1996 1997 1998 1999 .6 Total

Electro/Preci.Ma/Med/Opt 4 13 27 14 9 67Construction 3 14 18 13 18 66Chemistry 2 17 15 8 3 45Machinery/Equipment - 12 15 - 2 29Food/tobacco - 6 3 6 8 23Tansportation Equipment 2 4 12 1 1 20Pulp/paper - 5 5 3 - 13Others 6 24 23 20 12 85Total 17 95 95 65 53 346 Source:Korean Accreditation Board (1999.7)

In the process of establishing an EMS inPOSCO, following problemss were raised(Kim, 1996) :(a) Even though POSCO's top managementis proactively committted to the introduc-tion of EMS and runs its business in anenvironmentally friendly manner, there isstill limited motivation for all employees toparticipate fully in these environmentalprograms.(b) Many POSCO employees feel overbur-dened by the documentation work requiredby ISO. It is one of the pressing issues tobe resolved in establishing and imple-menting EMS.(c) A considerable number of employeesdo not really feel that EMS is an appropri-ate approach for enhancing the company'svalue-added effectively.Though it can be said that Korean compa-nies are actively trying to catch up with the

international movement towards an envi-ronmentally sustainable globe, there are anumber of obstacles in implementing envi-ronmentally friendly management systemsin Korean business. In response to theemerging environmental challenges, it isnow very important for business to con-sider environmental management in orderto improve their environmental perform-ance. Considering that only changing thetraditional corporate paradigm will enablepeople to become part of the environmentrather than its exploiters, substantialchange in the framework of business man-agement is an essential requisite to busi-ness operations for a more environmentallybenign economic system.

Recently the notion has gained increas-ingly recognition among enlightened man-agers that improving environmental per-formance or the development of innovative


and cleaner technologies can provide acompetitive advantage. This emerging en-vironmental-management paradigm hasevolved through a different set of forcesfrom the previous paradigm: ecologicaldegradation and the scientific evidence forit, environmental directives pushing forchange, and the business response. (Lee1997) But it is widely pointed out thatEMS is inadequate for improving compa-nies' environmental performance becausethe establishment and operation of EMSdoes not in itself guarantee better environ-mental performance. Therefore it seemsthat the real challenge for Korean compa-nies must be to make efforts to improvetheir environmental performance throughtaking on of an environmental mindset,engaging in substantial environmental in-vestments, and developing a comprehen-sive managerial regulatory framework.

6. Concluding Remarks

Increasing public demand for a better envi-ronment and global environmental discus-sions have recently led the Korean gov-ernment to change some of its policy ob-jective towards a harmony between eco-nomic growth and preservation of the envi-ronment. It has established necessaryregulatory and institutional mechanismsand is pursuing more effective enforce-ment.But there still remains much to be done forthe country's sustainable development andthe greening of its industry.First, even though public awareness of theenvironmental challenges in Korea hasbeen improved, it is still at the infant stagein terms of becoming part of daily life.More problematical is that the strategicpriority of the environment is still far be-

hind the level required in all sectors of thegovernment and businesses.Second, regulatory frameworks are stillbased on the 'command-and-control' ap-proach. Also, many legal standards are setup on the normative basis without carefuldeliberation of their practicability in com-plying comply with the requirements.Third, Korea has developed some tech-nologies for end-of-pipe treatment of air,waste water and solid wastes, but cleanertechnologies for preventive environmentalimprovement are highly underdeveloped.As a result technical expertise is largelyinsufficient, and core technologies andfacilities are now heavily dependent uponimports from advanced countries.Fourth, like many other countries, Korea'ssmall and medium-size companies are alsohighly deficient in their ability to imple-ment appropriate environmental manage-ment.

As I asserted in the above, Korea has expe-rienced classical environmental degrada-tion owing to rapid industrialization, whichwas rightly described as “poisoned pros-perity”(Eder 1996), and environmentalpolution worsened dramatically till 1980s,with no serious political effort to improveit. Only increasing local pressure and pub-lic protest after frequent environmentalaccidents, especially in the later 1980scould force the government to pay moreattention to the environment and to begintaking some real protective measures forthe environment. Already early in the1980s, though without any substance, thenecessity of balancing or harmonizing theeconomy with the environment was listedas one of many targets in the economicdevelopment plan, but it was not until afterthe Earth Summit (1992) that the environ-

70 KEON SOO YOON

mental issue became a government-wideeconomic issue.So in the presidential “Green Vision” ofMarch 21, 1996, in which the overstrainedambition to build an Eco-Model Countrywas declared, „the integration of environ-ment and economy“ was introduced as thesecond of the five basic principles. But itshoud be noted that it was never a braveact of green enlightenment, just as theother presidential welfare visions declaredaround this period were not, either. It wasrather a forced reflex of both people’s in-creasing environmental needs and a slowrecognition of , or a passive adjustment to,the view gaining worldwide currency thatenvironmental preservation and economicdevelopment should proceed hand in hand( OECD1993, Worldbank 1993). Even thiskind of political gesture has now been lostunfortunately in the new goverment's effortto manage the current economic crisissince December 1997. So the prevailingmotto is the well-known export drive,which reminds us the old motto “strength-ening competitiveness at all costs”, and“growth first, clean later”. Interestingly, incontrast to the whole negligence of envi-ronmental concern on the government side,there continues to be an unabated corporateindustrial movement towards the greenmanagement system in Korea, especiallyamong export-dependent big firms.It is difficult to see when the Korean econ-omy will seek orientation in sustainabledevelopment, but it may be expected thatthis is unlikely to be initiated by the gov-ernment, and it more apt to stem from ex-ternal pressure and more be driven by theprivate and nongovernmental sector.

References

Arrow, K. et al 1995, “Economic Growth,carrying Capacity and the Environment”Science 268, pp 520-521

Cho, Soon 1994, The Dynamics of KoreanEconomic Development, Washington, In-stitute for International Economics

Chung,C.S / Jeong,H.S 1994, “ Korea’s envi-ronmental Policy in the Age of Decen-tralization” in Puschra, W. and Chung, C-S eds. 1994. Environmental Policy To-ward the Year 2000. Seoul, KDI

Eder, Norman R. 1996. Poisoned Prosperity:Development, Modernization, and the En-vironment in South Korea. Armonk, NewYork: M. E. Sharpe, Inc.

Jänicke,M./A.Carius/ H.Jörgens(Hg.) 1997,Nationale Umweltpläne in AusgewältenIndustrieländer, Berlin und Heidelberg :Springer

Jänicke,M. und H. Weidner (eds.) 1997, Na-tional Environment Policies- A Compara-tive Study of Capacity-building, Berlin:Springer

Jenkins, Rhys 1998, “Evironmental Regulationand International Competiveness: A Re-view of Literature and Some EuropeanEvidence”, INTECH Discussion paper9801, Maastricht

Jeong,H.S.1998, “Environmental Administra-tion and its New Agenda in Korea” in En-vironmental Policies:International Issues,Case Studies, and Strategies, Seoul ,KEI

Jeong,H.S/Lee,S.U. 1996, “ The Green move-ment in Korea and Its Impact in the Pol-icy Debate” in Kleindorfer,P.R. et al , En-ergy, Environment and Economy: AsianPerspective ,Cheltenham:Edward Elgar

Kang 1994, “ the Role of NGOs in the Build-ing Process of an Environmentally Sus-tainable Society” in Puschra, W. andChung, C-S eds. 1994. EnvironmentalPolicy Toward the Year 2000. Seoul, KDI


Kim, M. H. 1996, ‘The Establishment of EMSin POSCO’, unpublished working paper,POSCO, Seoul

Kim, Ji-Hyun 1999, “Does an EnvironmentalKuznets Curve Exist in Korea’s case?”,Journal of Environmental Policy and Ad-ministration vol.7. No.1 pp. 169-191

Kim, Jung Wk 1998, “Korea, Land of Envi-ronmental Risk”, Korea Journal, vol.39No.1 Spr.pp.221-240

Koo, Do wan 1998, “Environmental Issues”,in Korea’s Quality of Life, pp.185-222,Seoul, SNU Press

Koo, Do wan 1996, Sociology of Korean En-vironmental Movement, Seoul

Korea Ministry of Environment. 1999. Envi-ronmental Protection in Korea.(Annual re-port on the Environment). Kwachun.

Korea Ministry of Environment. 1998. Statisti-cal Yearbook of Environment, Kwachun

Korea Ministry of Environment. 1996 Korea’sGreen Vision 21. Kwachun.

Korea Ministry of Trade, Industry and Energy1995, The Promotion Act for Conversionto Environmentally-friendly IndustrialStructure, Seoul, Korea.

Lee, B.W. 1997, Environmental Management,Seoul, Bibong

Lee, B. W. /Kim,G.C./Ahn,Y.K.(1999), “ En-vironmental Management System in Ko-rea”, Journal of Environmental Policy andAdministration, Vol. 7. No.1..

Lee, Jin 1996, Environment Policy in theGlobalized Era, Seoul, KiHanJai

Nahm, Y.S., “ Korea” in Jänicke und Weidner(1997), pp199-211

O’Connor, David 1996, “Growth now/CleanLater. Or Pursuit of Sustainable Develop-ment?” OECD Technical Paper no. 111,Paris

OECD 1997, Environment Performance Re-views: Korea. Paris

World Bank 1993, The East Asian Mira-cle.Economic Growth and Public Policy.New York, OUP

You, Jong-il 1995, “ The Korean Model ofDevelopment and ist Environmental Im-plications “ in The North, the South andthe Environment. Ecological Constrainsand the Global Economy ed. by Bashkarand Glyn

Documents

Competitiveness and Environmental Policies: The Cases of Chile … · 2020. 1. 22. · Claudio Maggi, INEF 1. General purpose and sum - mary of conclusions According to World Bank