Environmental Goods & Services (EGS) News

Launch of the South African Environmental Goods and Services (EGS) Forum - 3 September 2007

Introduction

The Department of Trade and Industry (the dti) used various media to reach relevant stakeholders and invite them to the launch of the Environmental Goods and Services (EGS) Forum. On 22 August 2007 81 delegates gathered at the Development Bank of Southern Africa (DBSA) to launch the SA EGS Forum.

The dti’s environmental director, Ms Lemao Dorah Nteo, facilitated the proceedings. She welcomed delegates and introduced ‘The Communicator’, an interactive electronic polling device, kindly sponsored by World Wide Fund For Nature (WWF). Within minutes everyone present was registered by means of this system and useful statistics were recorded such as sub-sectors represented and individuals’ desire to serve on the forum steering committee (FSC) - about 30 individuals.

Acting DDG

National Industrial Policy Framework

Mr Sipho Zikode, acting deputy director general of the Enterprise and Industry Development Division (EIDD) delivered the keynote address and focused on the National Industrial Policy Framework (NIPF) and Industrial Policy Action Plan. He alluded to the dti’s economic policy successes since the attainment of democracy in 1994. Government aims to push purposefully towards its 2014 vision to achieve six per cent gross domestic product (GDP) growth from 2010 onwards and to reduce unemployment and poverty by half. Action plans have been developed to fast-track lead sectors with export potential, including (1) Capital/Transport equipment and Metals, (2) Automotives and Components, (3) Chemicals, Plastic fabrication and Pharmaceuticals, and (4) Forestry, Pulp and paper, and Furniture.

The NIPF’s Sector Action Plan for the forestry, pulp and paper and furniture cluster for example demonstrates the key role of natural resources in opening up South Africa’s potential to bring jobs and income to poor rural communities. The forestry sector in 2006 contributed R14 billion to GDP and employed more than 170,000 people. The Sector Action Plan looks at 100,000 ha additional aforestation in the Eastern Cape over the next 10 years. Environmental services would be required to guide Sector Action Plans along a sustainable development path. A variety of environmental equipment will be required to meet legal and best practice standards and verify performance.

Technical Barriers to Trade (TBT)

With the lowering of tariff barriers potential exporters increasingly face technical barriers to trade (TBT), of which environmental requirements are the most common. A high premium is placed on mitigation of greenhouse gases, which makes energy intensive sectors such as the capital goods particularly vulnerable to environmental TBTs. A strong, cohesive and organized domestic EGS sector supplying tailor-made solutions and technologies, contributes to sustainable industrial competitiveness through facilitation of legal compliance and TBT conformity.

Export Opportunities for the Environmental Goods and Services Sector

The services component of the EGS sector has the potential to position itself as a significant export product. The 2006 Environmental Goods and Services (EGS) study pointed out that the SA EGS industry has a clear potential to grow its employment capacity by utilising export opportunities, targeting countries in the southern hemisphere and the African and Southern African regions. A vast and under-utilised pool of donor funding is made available annually to African governments. Dedicated exclusively to sustainable development challenges, many of these donor programmes create a substantive demand for environmental projects. South Africa’s competitive advantage in this regard is that the market acknowledges the gainful combination of South African EGS skills and our keen understanding of African cultures and development objectives. A dedicated effort should be made to position South Africa as a springboard for EGS partnerships.

Chief Director: Technical Infrastructure

In his presentation Dr Tshengedzeni Demana, Chief Director of Technical Infrastructure, explained the relevance of the environmental industry in achieving sustainable economic development. The SA EGS industry is part of a significant international market worth at least US $ 600 billion. Research commissioned by the dti through Nedlac indicated that the South African market, which includes government procurement, spent between R14,5 and R23,2 billion on EGS in 2004.

Context for EGS sector development

Historically the end-of-pipe / clean-up approach was followed to help industry meet environmental regulatory requirements. With the drive towards cleaner and more resource efficient processes, products and materials, and an increasing emphasis on sustainable production and consumption, the EGS sector has diversified and expanded to embrace resource management, emissions reduction and cleaner technologies. Factors driving EGS growth include a growing awareness of environmental issues in addition to the easing pressure that economic development is placing on the climate and the earth’s natural resources. Improved environmental laws and standards underpin the growing demand for EGS.

Cleaner Production

It has been proven by many success stories that Cleaner Production (CP) improves a company’s bottom line. CP is a concept based on the principles of operational efficiency and resource productivity, which in turn lead to savings and higher output. Cleaner Production equals energy and resource efficiency and therefore reduces materials use, waste and emissions. Employees’ careers benefit by skills and understanding acquired in using environmentally preferable equipment and technology. CP is an enabling factor for meeting environmental legal and trade requirements, which improve export performance.

Climate Change, Renewable Energy and Energy Efficiency

There are strong indications that the 2012 review of the international climate change regime, the Kyoto Protocol, would result in binding targets for South Africa to reduce Green House Gas (GHG) emissions, mainly Carbon Dioxide (CO2). CO2 is the logical product of fossil fuel based combustion on which our industrial and transport systems are heavily reliant for energy. The probability of binding reduction targets has inspired a variety of renewable energy and energy efficiency initiatives in South Africa.

Clean Development Mechanism (CDM)

The Clean Development Mechanism (CDM) was established in terms of the Kyoto Protocol to mitigate climate change through CDM projects. The Kyoto Protocol provides opportunities for non-annex one countries such as South Africa, to attract foreign currency by means of CDM projects. South African CDM practitioners in March 2007 decided to combine their efforts and ventured to establish the SA CDM Industry Association, a body that will be used to promote CDM projects in SA and tackle common challenges.

The South African EGS Forum

The dti put a few technical support measures in place to encourage the domestic suppliers of environmental services:

The National Cleaner Production Centre (NCPC) was established to run sector-specific cleaner production projects in priority sectors and promote a culture of cleaner production.
The dti has produced research reports and facilitated five EGS stakeholder workshops. The dti also encouraged the establishment of the SA CDM Industry Association.
Today’s event will take dti support a step further by offering technical support to environmental practitioners to unite and establish their own EGS Forum that would serve mutual interests of environmental practitioners. The dti is therefore committed to continue its support to the National Cleaner Production Centre (NCPC).

Way forward

The EGS Sector Forum in partnership with the dti and key government entities would take up the challenge to formulate an EGS Sector Action Plan and take into account:

Sustainability support to government supply side measures;
SMMEs’ challenge to afford environmental goods and services;
Demographic balance in the EGS sector;
Utilisation of technology programmes such as the Support Programme for Industrial Innovation (SPII) and the Technology and Human Resources for Industry Programme (THRIP);
A comprehensive statistical database to fill information gaps;
A market information system to position SA as a springboard for taking EGS partnerships into African and other markets;
Communication structures to advise government in policy formulation;
Training and other forms of capacity building;
Further strategic interventions

Example from a well organised sector

A Presentation by Dr Laurraine Lotter, Executive Director of the Chemical and Allied Industries Association (CAIA), explained the gains and benefits of having an organised sector. She shared experiences on the challenges we could expect to face in the process. Lessons learned from a chemical industry perspective include that strategy formulation is a self-discovery process. Relevance to the National Industrial Policy Framework should be clearly communicated and strengthened because recognition and prioritisation of sectors is based on contribution to national imperatives.

Other sector strategies and action plans have paved the way for the EGS sector and will contribute to inform process. Essential elements of action plan formulation are stakeholder involvement, focused support from government and an inherent element of continuous monitoring and review. The advantages of a sector action plan include recognition by government. The Forum would also provide a platform for greater policy coherence, clarification of roles, sharing of best practice and focused funding. Structures should be built to facilitate beneficial links with other sectors.

The first challenge to address at the next NIPF review is the absence of EGS in the contents of the NIPF. Environmental goods are recognized as part of other sectors, such as capital goods and electrical and electronic equipment but the role of environmental services needs to be clearly recognized. Maintaining an organization system that accommodates all the diverse sub-sectors would be a challenge. Nothing less than a collective approach by stakeholders in the sector, starting with a clear definition of sector, will be required to establish the sector strategy and action plan. Key action plans should be based on key success factors including success indicators for successful removal of key constraints.

Logical steps in the development of a sector action plan would start with an agreed definition of the SA EGS sector and consensus on a clearly defined scope and vision. The recommendations put forward in the NEDLAC-FRIDGE study on the EGS sector should be considered and implemented. A process of self-discovery would start as institutional issues present themselves. Process demands beyond due process would address the particular needs of the SA EGS industry and ensure that stakeholder commitment is maintained. Optimal and coherent institutional arrangements would ensure economy, effectiveness and efficiency of efforts.

“Rethink Investment in South Africa”

Mr Peet du Plooy introduced this WWF report compiled by himself and partners James Blignaut and Partick Bond. He called upon delegates to embrace the opportunity and responsibility for South Africa to play a leading role amongst developing nations and its African peers in promoting sustainable investment. Responding to this imperative will require careful consideration of the impact of investment on all forms of capital – economic, social and environmental – and the judicious application of policy instruments that encourage sustainable investment, whether foreign or domestic, public or private. Africa is a continent that possesses great natural wealth, but at the same time suffers from the world’s worst levels of poverty. Only thorough appropriate and sustainable investment, will the continent be capable of increasing the economic and social welfare of its population, while conserving its rich natural heritage for future generations. These investment opportunities exist, particularly in the energy sector, where improved efficiency and a move toward renewable energy presents the great improvement in triple bottom line benefit over the status quo, resource and fossil fuel-intensive industry. Sectors such as transport, agriculture, ICT and finance, have a particularly important complimentary role to play in reducing the footprint of human enterprise and to operate within our natural capital budget.

National Cleaner Production Centre

Mr Ndivhuho Raphulu, the director of the National Cleaner Production Centre (NCPC), presented the NCPC’s sector based Cleaner Production projects, which create business opportunities for EGS practitioners in four industrial sectors.

Resolution to Establish the SA EGS Forum and its Steering Committee

Ms Marba Visagie in her presentation quoted Kofi Anan: "There are many positive ways for business to make a difference in the lives of the poor – not through philanthropy but through initiatives that over time will help build new markets" She put forward EGS facts and statistics justifying government’s resolution to give recognition to EGS as an individual industry sector. She proposed a number of strategic objectives that emanated from a recent study to inform strategy but clearly stated that registered EGS Forum members would own the process of formulating a strategy and action plan for the sector. Ms Visagie highlighted the EGS sector’s potential to accelerate its own growth and secure the sustainability of development in general. Environmentally sound technologies and innovation need to be implemented as part of our solutions to achieve sustainable development. Our vision is to grow a diversified, high-value, demographically representative EGS sector, offering knowledge and skills intensive business opportunities. The open invitation to EGS practitioners to register as members was repeated. All registered members would be invited to workshop the pre-final draft and finalise the EGS Sector Strategy and Action Plan.

Delegates concurred with the following suggestions:

Formulation of an EGS Sector Strategy and Action Plan as first priority;
Everyone who expressed a desire to be involved in the forum steering committee (FSC) would be given an opportunity to review drafts and make input;
The group of 30 is however too large and needs to be narrowed down to form an efficient committee for preparing the first draft; In the selection of members for the FSC, care should be taken to represent salient SA EGS sub-sectors;
The dti’s EGS Desk will serve as interim secretariat and focal point.

Media

The following interactions were welcomed in the interest of inclusivity and information dissemination:

National Cleaner Production Centre (NCPC) and Information Technology Association (ITA) set up exhibitions to share information on waste minimisation/ cleaner production and electronic waste management respectively.
The event was covered by a number of newspapers
SABC 3 coverage.
A brief information exchange session with a New Mobility Workshop in Cape Town was conducted by means of video conferencing.
The owners of www.enviropaedia.com offered the use of the Enviropaedia website for publishing EGS news and future events.

Prepared by the dti Environment Section 2007-08-30

The PowerPoint Presentation by Marba Visagie is downloadable as an attachment below.

Download Attachment: marbavisagiedtiegsforum20august2007.ppt

Archive