Acknowledgments This report was produced under the Punjab Green Development Program (P165388) as part of the World Bank Group’s support to the Government of Punjab’s efforts to promote green industrial development in the province. The assessment in this report was prepared by a World Bank Group team made up of Dario Quaranta (Consultant) and Sinem Demir (Operations Officer) under the overall guidance of Martha Licetti Martinez and Nabila Assaf (Practice Managers). Azher Uddin Khan (Consultant) supported the team by collating and analyzing current regulatory regimes in Punjab. The team is grateful to World Bank Group colleagues for guidance and inputs to the analysis as well as feedback on the report. We would particularly like to thank Etienne Kechichian, Kiran Afzal, Jiang Ru, Ahmad Imran Aslam, and Antoine Coste. We also thank Ernesto Sanchez-Triana and Douglas Zhihua Zeng for providing peer review comments on this report. The team benefitted from dialogue with stakeholders from the public and private sectors in Punjab and acknowledges the contributions particularly from Javed Iqbal Malik (Industries Department), Javed Ilyas (Punjab Industrial Estates Management and Development Company [PIEDMC]), Zia Ullah (PIEDMC), Zahid Hussain (Environmental Protection Department [EPD]), Khadija Tul Kubra (EPD), Nasim-ur- Rehman (EPD), Abid Hussainy (Urban Unit), Abdul Moiz Sohail (Urban Unit), Muhammad Abdur Rahman (Punjab Energy Efficiency and Conservation Agency [PEECA]), Marium Khalid (PEECA), Shahzad Azam Khan (Sundar Industrial Estate [SIE]), Tehmir Nabi (SIE), Muhammad Atif (United Nations Industrial Development Organization [UNIDO], Pakistan), Adeel Iqbal (CHT Pakistan Limited), and Haroon Ali (CHT Pakistan Limited). The assessment was supported by the Korea Green Growth Trust Fund (KGGTF), a partnership between the World Bank Group and the Republic of Korea, that aims to mainstream inclusive green growth knowledge, investment and capacity building support though the World Bank operations. The team would like to thank Eun Joo A. Yi (former Program Manager) for her support and guidance. ii TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB CONTENTS Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ii Abbreviations and Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 . Regulatory Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.1 Park Management: Establishment of Industrial Estates . . . . . . . . . . . . . . . . . . . . . . 3 1.2 Park Management: Feasibility/Design Study Requirements . . . . . . . . . . . . . . . . . . 11 1.3 Environment: Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 1.4 Environment: Circularity and Industrial Symbioses . . . . . . . . . . . . . . . . . . . . . . . . . 29 1.5 Environment: Resource Efficiency and Cleaner Production . . . . . . . . . . . . . . . . . . 31 1.6 Environment: Energy Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 1.7 Social: Occupational Health and Safety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 2 . Institutional Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 2.1 Industrial Estate Governance Mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 2.2 Coordination between Agencies to Monitor Environment, Health, and Safety . . . 46 2.3 Capacity for Monitoring, Reporting, and Verification . . . . . . . . . . . . . . . . . . . . . . . . 47 3 . Sundar Industrial Estate Comparison Against the International EIP Framework . . . . . 49 3.1 General Profile of SIE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 3.2 Preliminary Analysis: Evaluation of the Performance Indicators for SIE . . . . . . . . 49 4 . Recommendations for SIE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 4.1 Establishment of a ‘Green Cell’ and Leveraged Manpower to Monitor EIP Related Performances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 4.2 IE-wide Systematized Environmental and Energy Management Systems . . . . . . 73 4.3 Facilitate Industrial Symbioses Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 4.4 Raising Awareness among Tenants on EIP Benefits . . . . . . . . . . . . . . . . . . . . . . . . 76 5 . Conclusions and Key Enablers for Punjab EIPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Annex 1: LAA 1894 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Annex 2: PLGA 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Annex 3: Industrial Air Quality Limit Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Annex 4: One-Window Operations Unit Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 iii List of Boxes Box 1. Industrial site selection decision support system 7 Box 2. PPP potential options for SIE 62 List of Figures Figure 1. Timeline of industrial estate development agencies in Punjab 4 Figure 2. Flow of administrative approval for IEs in Punjab 6 Figure 3. Land acquisition process under LAA 1894 12 Figure 4. EIA evaluation process in practice 17 Figure 5. Average colonization rates of industrial zones 44 Figure 6. Wastewater collection area of SIE 55 Figure 7. Rain harvesting well 55 Figure 8. CETP conceptual design 61 Figure 9. Solar power potential in SIE - Preliminary assessment 66 Figure 10. Three-layer governance structure of green cell 72 Figure 11. Illustrative technology platform structure 75 Figure 12. Conceptual architecture of an industrial symbiosis matchmaking platform 76 List of Tables Table 1. Stepwise administrative actions for the establishment of an IE 6 Table 2. Existing evaluation system, DSS, and EIP criteria assessment of site selection for greenfield EIP projects 9 Table 3. Legal coverage and EIP criteria assessment of site selection for greenfield EIP projects 21 Table 4. Permit requirements 23 Table 5. Hydraulic and BOD pollution loading 24 Table 6. PEQS for biological pollutants in municipal and liquid industrial effluents 24 Table 7. Values for common parameters of wastewater treatment 25 Table 8. NEQS for heavy metals in municipal and liquid industrial effluents 25 Table 9. PEQS for air emissions 27 Table 10. Performance benchmark of RECP in Pakistan 34 Table 11. Sectors with the highest number of firms 50 Table 12. List of park management prerequisites 51 Table 13. List of park management performance indicators 52 Table 14. List of environment prerequisites 54 Table 15. List of environment performance indicators 56 Table 16. Effluent data collected at the collective discharge point in SIE 61 Table 17. List of social prerequisites 67 iv TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Table 18. List of social performance indicators 68 Table 19. List of economic prerequisites 69 Table 20. List of economic performance indicators 69 Table 21. Minimum number of specialized personnel for the management unit 72 Table 22. List of industrial symbiosis relationship among resident firms in mixed IEs 74 Table 23. List of sectoral opportunities for greener manufacturing in IEs 77 Table 24. List of water efficiency practices at firm level in IEs 79 CONTENTS v Abbreviations and Acronyms AAS Atomic Absorption Spectroscopy BAT Best Available Technology BOD Biochemical Oxygen Demand BOM Board of Management CDA Canal and Drainage Act CDM Clean Development Mechanism CDWP Central Development Working Party CETP Common Effluent Treatment Plant CHP Combined Heat and Power CIP Cleaning-in-Place CPI Cleaner Production Institute DBO Design-Build-Operate DIPWM Directorate General, Industries, Prices, Weights, and Measures DOI Department of Industry DSS Decision Support System ECNEC Executive Committee of the National Economic Council EHS Environment, Health, and Safety EIA Environmental Impact Assessment EIP Eco-Industrial Park EKN Embassy of the Kingdom of Netherlands EMMP Environmental Management and Monitoring Plan EMP Environmental Management Plan EMS Environmental Management System EnMS Energy Management System EPC Engineering, Procurement, and Construction EPD Environmental Protection Department ESCO Energy Service Company ESF Environmental and Social Framework ESS Environmental and Social Standards ETP Effluent Treatment Plant FDI Foreign Direct Investment FIE Faisalabad Industrial Estate FIEDMC Faisalabad Industrial Estates Management and Development Company ABBREVIATIONS AND ACRONYMS vii GHG Greenhouse Gas GIZ German Agency for International Cooperation (Deutsche Gesellschaft fur Internationale Zusammenarbeit) GoP Government of Pakistan GRM Grievance Redress Mechanism HAM Hybrid Annuity-Based PPP Model HR Human Resources HVAC Heating, Ventilation, and Air-Conditioning ICT Information and Communication Technology IE Industrial Estate IEE Initial Environmental Examination IFC International Finance Corporation IPP Independent Power Producer IS Industrial Symbiosis ISO International Standards Organization IT Information Technology JICA Japan International Corporation Agency KGGTF Korea Green Growth Trust Fund LAA Land Acquisition Act LAC Land Acquisition Collection LGA Local Government Act LPG Liquefied Petroleum Gas MBAS Methylene Blue Active Substances Assay MBR Membrane Bioreactor MRV Monitoring, Reporting, and Verification MSMEs Micro, Small, and Medium Enterprises NCPC National Cleaner Production Center NDIR Nondispersive Infrared NEQS National Environmental Quality Standards NIP National Industrial Parks Development and Management Company NM Net Metering NOC No Objection Certificate NPV Net Present Value OHS Occupational Health and Safety OWO One-Window Operation P&D Planning and Development Department Pak-EPA Pakistan Environmental Protection Agency PC Planning Commission PCP Planning Commission of Pakistan PDWP Provincial Development Working Party PEECA Punjab Energy Efficiency and Conservation Agency PEPA 1997 Pakistan Environmental Protection Act 1997 PEPA 2012 Punjab Environmental Protection Act 2012 PEQS Provincial Environmental Quality Standards viii TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB PERI Punjab Economic Research Institution PIEDMC Punjab Industrial Estates Management and Development Company PISD Program for Industrial Sustainable Development PLAR Punjab Land Acquisition Rules PLGA Punjab Local Government Act PPE Personal Protective Equipment PPP Public-Private Partnership PSIC Punjab Small Industries Corporation PSQCA Pakistan Standards and Quality Control Authority PV Photovoltaic PWPCM Punjab Wildlife Protection, Conservation, and Management RE Renewable Energy RECP Resource Efficiency and Cleaner Production ROE Return on Equity SBP State Bank of Pakistan SBR Sequence Batch Reactor SDGs Sustainable Development Goals SEU Social and Environment Unit SF Sustainability Framework SIE Sundar Industrial Estate SMEs Small and Medium Enterprises SOP Standard Operating Procedure SPM Suspended Particulate Matter SPV Special Purpose Vehicle STP Sewage Treatment Plant TDS Total Dissolved Solids TOR Terms of Reference TSS Total Suspended Solids UNIDO United Nations Industrial Development Organization USAID US Agency for International Development WWTP Wastewater Treatment Plant ABBREVIATIONS AND ACRONYMS ix Executive Summary Background Demand for industrial parks has soared in the last decades due to the necessity in a globalized economy to optimize industrial activities by reducing costs of common services. While industrial parks have traditionally been seen as a way to increase the competitiveness of the industrial sector in developing and emerging economies, there is an increasing recognition that they can also improve the sustainability of industrial growth by mitigating its negative environmental and social impacts. The eco-industrial park (EIP) model can be an effective tool to address challenges related to inclusive and sustainable industrial development within the scope of the Sustainable Development Goals (SDGs). The World Bank Group, jointly with the United Nations Industrial Development Organization (UNIDO) and the German Agency for International Cooperation (Deutsche Gesellschaft fur Internationale Zusammenarbeit, GIZ), developed a series of tools to adopt a common understanding of what makes an EIP and help policy makers establish EIP programs at the national and park levels.1 The International EIP Framework provides a working definition for EIPs, which recognizes the importance of integrating EIP principles into all phases of industrial parks’ development and operations: “An Eco-Industrial Park can be defined as an earmarked area for industrial use at a suitable site that ensures sustainability through the integration of social, economic, and environmental quality aspects into its siting, planning, management, and operations.” In EIPs, resource use is optimized, pollution is minimized, and industrial production is organized in a synergic and symbiotic manner that can be assimilated to natural ecosystems, so that ‘waste’ from one firm becomes a resource for another firm. In the last decade, several emerging economies, such as China and the Republic of Korea, have made substantial gains in integrating an EIP Framework in their policies to systematically address sustainability issues and mitigate/adapt to climate change, while ensuring competitiveness of the manufacturing sector. The World Bank Group is supporting such efforts in Turkey, Vietnam, Ethiopia, and Bangladesh by assisting industrial parks in these countries to facilitate the shift of the industrial sector toward a more circular economy, encompassing social, environmental, and economic aspects related to the private sector’s sustainable development. Report Objective The aim of this report is to provide the Government of Punjab2 with a preliminary overview of opportunities and obstacles for the adoption of the EIP Framework by industrial estates (IEs) in Punjab, based on the World Bank Group’s experience with emerging economies in implementation 1 See World Bank, UNIDO, and GIZ 2017; World Bank et al. 2018, 2019. 2 Since the preliminary analysis has been conducted by assessing national regulations and policies, the recommendations could be applied to establishing a national-level EIP Framework, not limited only to Punjab. EXECUTIVE SUMMARY xi of the EIP Framework, as well as the results from research on policy regimes and industrial practices in Punjab. As part of this analysis, Sundar Industrial Estate (SIE) has been selected to pilot the high-level technical analysis on the environmental, social, and economic areas to improve, to operationalize the EIP Framework. Results and recommendations in this report are delivered as part of the broader support of the World Bank Group to the government through the Punjab Green Development Program (P165388). In a 2014 assessment of environmental management for Pakistan’s industrial growth, the main findings and recommendations suggest that “to strengthen Pakistan’s industrial growth and industrial estates, the government must provide: (i) sectoral policies that support the greening of Pakistan’s industrial sector to enhance international competitiveness; (ii) upgraded trade facilitation and sustainable infrastructure (particularly transport and energy infrastructure) to address some of the spatial aspects of industrialization; and (iii) strong institutions for effective industrialization initiatives, including those for small and medium enterprises.”3 As IEs can play a pivotal role in industrial development, it is expected that the EIP Framework will help achieve the vision of Punjab’s Growth Strategy 2023 to create “a globally connected and competitive, equitable, culturally vibrant and technologically advanced Punjab with sustainable economic growth driven through a dynamic private sector, an efficient public sector, rich and productive human capital and, a regionally equalized development footprint by 2023.” This report is structured in three main sections: 1. Regulatory analysis: To assess the main issues regarding the current laws and regulations in Punjab that can be improved for the adoption of the EIP Framework 2. Institutional analysis: To identify potential gaps in current public governance systems to promote, oversee, and monitor the implementation of the EIP Framework 3. Technical analysis: To pilot the EIP Framework in SIE in Lahore and assess potential improvements SIE can undertake in terms of infrastructures and rendered services to better comply with the requirements of the EIP Framework. Consequently, the report provides recommendations at the IE and provincial levels to move toward an eco-industrial and competitive development strategy. This report is a preliminary assessment of the technical readiness of Punjab to adopt the EIP Framework for IEs. It has been prepared using technical data collected during two missions by the World Bank Group team (September 2019–March 2020). While it confirms the promising scope for EIPs in Punjab, more in-depth investigations and data collection will be required to refine the assessment and move toward implementation of an provincial EIP program. Main Findings 1. REGULATORY ANALYSIS (a) Park Management The following regulations were analyzed: Establishment of Industrial Estates (Planning Commission [PC] forms), Land Acquisition Act (LAA) 1894 and Punjab Land Acquisition Rules (PLAR) 1983, Antiquity Act 1975, Punjab Local Government Act (PLGA) 2013, and Land Use Regulations. 3 “Sanchez-Triana et al. 2014. xii TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Findings • Even though the regulations of Punjab related to park management cover most of the requirements of the EIP Framework, there is a need to improve the approval process under these regulations to strengthen both (i) the selection of IE sites to enable the development of EIPs and (ii) the technical and financial planning of essential environmental infrastructure (for example, wastewater treatment plants (WWTPs) and sanitary landfills) required for sustainable IE operations that meet and, ideally, go beyond environmental regulatory requirements. Those planning exercises are an essential part of IE master plans, but the site selection process and infrastructure assessments present inconsistencies due to the lack of rigorous feasibility studies able to support IEs’ investment strategies. Such a requirement should be embedded in a more rigorous approval process for the establishment and operations of IEs. • No performance standards have been established with respect to energy, water, and material efficiency of industrial production of IEs. Recommendations • More stringent approval processes that (i) ensure the selection of most suitable sites for new IEs and (ii) require IE developers to include in their assessments the sizing of the infrastructures and phasing of the investments for environmental infrastructures, based on the rigorous demand analysis that has to be performed at the master plan stage and updated as the IE is populated. Poor analysis could affect the competitiveness of the IE, with an impact on the fees to tenant firms (higher costs due to inefficiencies and oversizing of the infrastructures). Demand analysis, phasing, and financial feasibility of the main infrastructures (including, but not limited to, common effluent treatment plant [CETP], air monitoring, water distribution, and renewable energy) are critical tasks and require a methodological and structural approach to ensure they are performed correctly. • Financial feasibility must be ensured as a precondition to release ‘license to operate’ to IE developers. It should include more details on potential options to increase recovery of by-products and waste to generate additional stream of revenues from common infrastructures. In the case of CETPs, the financial feasibility should encompass (i) reuse of wastewater, increasing quality with tertiary treatments; (ii) recovery of biogas from secondary treatment of the sewage treatment plant (STP); (iii) recovery of metals from sludge. It is important to improve the specifications for the feasibility studies of WWTPs, with the aim of maximizing the revenues, optimizing the investment, and minimizing the service fee for tenant firms. The potential increase of investment due to the suggested additional systems/treatment units should be assisted by market demand analysis among resident firms. The benefits for the resident firms consist of (i) potential investment savings (no water treatment plant at a firm level) due to the supply of process water directly from the WWTP to resident firms; (ii) lower service fee, if biogas is recoverable and used to reduce operating expenditure of the wastewater plant; and (iii) lower service fee, if metals are economically recoverable from sludge and sold to the market (if it is not possible to recover them at firm level). (b) Environment The following regulations were analyzed: Pakistan Environmental Protection Act 1997; Canal and Drainage Act (CDA) 1873; Punjab Wildlife Protection, Conservation, and Management Act 1974; National/Provincial Environmental Quality Standards (NEQS/PEQS); Hazardous Substances Rules (2003); Climate Change Act 2017; National Energy Efficiency and Conservation Act (NEECA) 2016; and Net Metering (NM) Policy of the Alternative Energy Development Board. EXECUTIVE SUMMARY xiii Findings • The enforcement mechanism of the Punjab Environmental Protection Department (EPD) for environmental monitoring, social engagement, and auditing needs to be improved to ensure that local, social, and environmental norms and regulations are adopted by IEs while implementing the EIP Framework. • Resource Efficiency and Cleaner Production (RECP) experience in Pakistan is mostly with medium and large industries. • Among the basic services rendered by IEs, solid waste collection presents issues especially due to the lack of extended responsibility on the contractors at the final stage of waste disposal in the absence of proper sanitary landfills. New regulations of waste management and sanitary landfills are required. • Regulations on the minimum lot size in IEs to be allocated to industries should be reviewed in case CETPs are not present. For wastewater treatment, it is mandatory for all the resident firms to install WWTPs in the absence of a CETP at the IE level. However, due to the average size of lots allocated to small and medium resident firms by IEs and the minimum requirement of space for effluent treatment plants (ETPs), only large resident firms seem to be able to install WWTPs in their lots. • As circular economy and industrial symbiosis are not regulated or encouraged by the EPD and IEs, except for hazardous waste, there is a need to develop an effective framework for circularity and industrial symbioses to mitigate environmental and social impacts and systematically instill and encourage the industries to tap into industrial symbiosis practices while increasing competitiveness. Recommendations • The enforcement mechanism of the EPD for environmental monitoring, social engagement, and auditing regulation requires to be further strengthened to ensure that the development and operations of IEs comply with the national legal requirements. With or without the International EIP Framework, compliance with the national, provincial, and local regulations is an absolute requirement for all IEs and their resident firms, regardless of their specific geographic location and characteristics. It is noted, however, that IEs in Punjab are struggling to ensure the enforcement of environmental requirements at firm level. SIE is collaborating with the EPD to suspend rendering basic services to resident firms not adhering to the environmental law. It is a preliminary step to address this main issue. • Dedicated regulations and policies on RECP, clean energy, and circular economy should support micro, small, and medium enterprises (MSMEs) with specific financial incentives/tax credits to invest in interventions (equipment and/or processes) to increase their energy, material, and water efficiency as well as reuse/reduce/recycle (3R) approaches. Specific measures could include, but not be limited to, { Incentives for renewable energy optimizing nonoperational areas in IEs (rooftops, green areas, parking carports, building facades, and so forth); { Tax credit/specific financing for replacing inefficient machinery and equipment; and { Tax credit and/or other incentives and support mechanisms for the reuse and recovery of water/ wastewater, energy, and waste in IEs, including through industrial symbiosis. xiv TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB (c) Social and Economic The following regulations were analyzed: Factories Act 1934, The Punjab Occupational Safety and Health Act 2019, The Sindh Occupational Safety and Health Act 2017. Findings • Occupational health and safety (OHS) legislation is comprehensive, but its enforcement is weak due to the low capacity of the Department of Labor, Punjab, and IEs. Recommendations • The enforcement mechanism of local authorities on social monitoring and auditing regulation requires to be further strengthened (the Environmental and Social Systems Assessment prepared for the Jobs and Competitiveness Program of the World Bank Group notably recommended the establishment and staffing of social and labor units in Punjab Industrial Estates Management and Development Company [PIEDMC] and Faisalabad Industrial Estates Management and Development Company [FIEDMC]) to ensure that the development and operations of IEs comply with the national legal requirements. 2. INSTITUTIONAL ANALYSIS Findings • There is a lack of a formal EIP Framework at the national and provincial levels for the policy/strategy and administrative approval stages of IE development in Pakistan. The responsible institutions often fail to ensure that IE locations are selected with industrialization needs in mind; environmental (including climate change adaptation and mitigation) and social systems (stakeholder engagement, including municipalities and communities affected by the IE’s activities) and common infrastructure are part of feasibility studies; and required budgetary allocations are made. • Rather than a proactive approach, IEs often have a mindset of dependency when it comes to the management of sustainability and competitiveness. Currently, IEs are looking for financial support from provincial and federal governments for the establishment of these infrastructures. To the extent that environmental aspects are considered by IEs, they tend to be narrowly defined in terms of regulatory compliance. IE management boards generally lack incentives and capacity to leverage continuous improvements in environmental performance as a source of both sustainability and competitiveness. • Regulatory institutions, including those in charge of environmental aspects, focus their scrutiny of industrial projects mainly at the time of issuing permits, while the regular monitoring of performance and compliance of industrial projects is often neglected. Recommendations • Policy and administrative approval institutions should incorporate strict criteria related to economic (industrialization needs), environmental (for example, resource efficiency, cleaner production, climate change adaptation), and social (engagement of private and civil society stakeholders) aspects at the feasibility stage of the IEs (PC-I and PC-II forms). Inclusion of these aspects in decision-making will bring IEs in line with the EIP Framework criteria at the development and operational stages. EXECUTIVE SUMMARY xv • PIEDMC and FIEDMC should implement specific mechanisms to support IEs in engaging resident firms to share financial responsibilities for the establishment of common infrastructures when, based on financial feasibilities, they appear to be more economic viable options than firm-level interventions. • Regulatory and IE management institutions should develop capacity to monitor IEs and their resident firms during their operations. PIEDMC, FIEDMC, and the management of individual IEs should establish and/or develop the capacity of units in charge of environmental and social aspects and should expand the scope of their mission to cover broader aspects of sustainability (for example, resource efficiency, material circularity, and renewable energy). • New public-private partnership (PPP) models for common infrastructures should be considered by the PPP authority. Besides the build-operate-transfer/own models, other additional project structuring options could be considered for detailed analysis, including the hybrid annuity-based PPP model (HAM) and design-build-operate (DBO) model. These models commonly involve the creation of a specific company (special purpose vehicle [SPV]) by the successful bidder to deliver the project (construction, financing, operation, and maintenance of the asset). The SPV signs the contract, so all rights and obligations are assumed to rest within the SPV. The revenues generated from the operations are intended to cover operating costs, maintenance, repayment of debt principal, financing costs (including interest and fees), and a return for the SPV’s shareholders. All cash flows inherent to the project are channeled through the SPV, and assets and liabilities related to the project are recorded in its balance sheet. • Capacity building of all the above-stated institutions should be developed through seminars, training workshops, dissemination campaigns, and demonstration under the guidelines of EIPs, including on topics such as RECP and circular economy. 3. TECHNICAL ANALYSIS (SIE) A preliminary gap assessment was carried out by analyzing the data provided by SIE’s Board of Management (BOM) and by the company walkthroughs and interviews of selected resident firms during the two missions. While most of the performance indicators require more granular and detailed sets of data, this preliminary analysis has been sufficient to determine some potential actions for SIE to implement an EIP program. Findings • SIE has established an environmental unit to oversee environmental issues in the IE but does not have any environmental management system (EMS) or energy management system (EnMS) certifications in place. Its environmental unit is yet to collect data from resident firms and measure the environmental performance of the IE. It lacks information on resident firms’ operations, especially in relation to water consumption and reuse, solid waste generation and recycling, wastewater treatment, emission monitoring, and energy efficiency. It has no actions to lower the carbon footprint and monitor greenhouse gas (GHG) emissions and has no green infrastructures (for example, renewables and WWTP with treated wastewater recovery) constructed at the estate level. • SIE purchases energy from the grid and has not invested in any renewable energy plants, even though the potential captive energy generation is significant. Some companies have installed solar panels, but the details are not available. xvi TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB • Even though SIE has a centralized water extraction system, water treatment plant, and distribution network, the volume of water consumed by resident firms is higher than the consumption recorded by SIE. It is likely that resident firms use additional sources of water such as boreholes or alternative water supplies. Recommendations • SIE’s BOM could strengthen the existing environmental unit to create a full-fledged ‘Green Cell’ with more human and technical capacity to monitor and improve EIP-related performances. Where the number of personnel is insufficient for monitoring such measures, external consultants may initially be hired to meet SIE’s needs to improve its green branding and conduct a detailed gap analyses to prioritize the actions to meet EIP performance criteria and prerequisites. This dedicated unit for greening SIE could be entrusted with the transformation of SIE, which involves designing and developing green measures; monitoring and reporting with the firms across the pillars of the EIP Framework; and liaising with PIEDMIC, the EPD, and Punjab Energy Efficiency and Conservation Agency (PEECA) on policy and regulations and with the firms on implementation, among others. • Estate-wide systematized EMS/EnMS. Being a key prerequisite for EIPs, SIE should pursue ISO 50001 (EnMS) and ISO 14001 (EMS) certifications to systematize its control over energy efficiency improvement and control of environmental externalities as it moves toward an EIP model. SIE can collaborate with Pakistan Standards and Quality Control Authority (PSQCA) to adopt internally recognized EMS and with PEECA on EnMS certifications. Regarding wastewater effluents, SIE has to implement a procedure to assess how resident firms are complying with the national and provincial norms and regulations and needs to take actions against those that are not be able to identify proper solutions. Close collaboration with the EPD is required in capacity building to frame the monitoring mechanism. • Facilitate industrial symbioses opportunities. In the identifying and materializing of industrial symbiosis opportunities, accessing information about businesses in other sectors appears to be a challenge. To systematize the waste exchange and mainstream industrial symbioses opportunities, SIE can establish a technology platform along with a dynamic waste exchange portal. This platform will help with (i) opportunity identification, (ii) consultancy on the implementation, and (iii) monitoring of the results to demonstrate. • For captive renewable energy generation, solar photovoltaic (PV) has a high potential in SIE. The investment costs could be higher than other countries, since most of the solar panel should be imported (additional cost – customs duty) and local developers have moved the first steps in this sector only in recent years. Some feedback from resident firms in SIE shows that there is still a lot of misinformation about potential benefits of solar power. SIE should take the lead on this issue and on the one hand evaluate direct investment in solar power to reduce the dependency on the grid and increase sustainability and resilience of the IE. On the other hand, SIE should arrange workshops with PEECA and resident firms to provide basic tools on existing regulation, incentives on renewable energy (solar), and operators in the solar power sector. EXECUTIVE SUMMARY xvii Conclusions This preliminary study on the potential adoption of the EIP Framework in Punjab shows that the regulatory and institutional challenges for GoPunjab are more related to implementation issues (enforcement of the regulations, monitoring of the performances, and financing and financial arrangement—PPP) than to policy and regulation gaps. Most of these challenges could be addressed with a structured reform that strengthens the measures and tools for the private sector to implement investments to increase sustainability and reduce environmental and social impacts, while increasing enforcement and monitoring of the IEs’ environmental and resource efficiency performances. In Pakistan, many industrial processes are resource intensive. Employing resource efficiency methods as part of the implementation of the EIP Framework in IEs will save considerable resources and resource-related costs. Even though it seems costly to implement, investment payback on most resource efficiency techniques/technologies can be relatively short (for example, generally from a few months to three to four years depending on the technology considered). When several inter-firm collaborations are created, significant resource savings are often achieved through spontaneously developed circular economy strategies. In addition to resource efficiency and circular economy measures taken within and between the tenant firms, realization of green infrastructure opportunities creates considerable impact on the resource utilization and environmental performance of EIs. Some examples of green infrastructure opportunities that can enable EIs to save tremendous amount of energy, water, and raw materials are rainwater harvesting, efficient street lighting, water distribution system renovations, electricity generation from biogas, and reuse of treated wastewater. The EIP Framework in Punjab will constitute an important policy tool which assists to create and facilitate increased productivity and competitiveness of the Punjab IE ecosystem as a whole. In addition to fostering industrial development, the EIP Framework implementation will help balance regional development gaps and form collaborative relationships between stakeholders. The EIP Framework strategies reduce the IEs’ dependency on non-renewable resources and thus increase their resilience to shortage in supply. International or multinational companies seeking new plant locations will consider the possible advantages of EIPs. Benefiting from the state-of-the-art green infrastructures (for example, steam supply), ability to develop/maintain by-product exchange, access to resource efficiency consultancy, and proactive marketing opportunities for their supply chains will attract them, which will lead to increased foreign direct investment (FDI) to Pakistan. Obviously, planning and establishing an EIP Framework in Pakistan as well as rehabilitating/ rebranding the existing IEs will need more time and resources when compared to ‘business as usual’ practices in conventional IEs. For instance, setting up an industrial symbiosis network between tenant firms requires matching tenant firms based on their outputs and material/feedstock needs. The green infrastructure to connect facilities (through pipeline, conveyor, or road) may also demand additional resources. Moreover, management of an EIP will need funds to market, recruit potential tenants, and facilitate feasible material exchanges. xviii TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB However, the aforementioned benefits for IEs in adopting the EIP Framework, including better compliance with the environmental, health, and safety legislation, improved efficiency, increased revenue, improved reputation, operational resiliency, ability to attract and retain new tenants, and better access to finance, surpass the invested time and human/capital resources. Thus, the EIP Framework should be seen as a competitive advantage rather than a pure environmentalist movement for existing IEs as well as institutions planning to establish new IEs in Pakistan. EXECUTIVE SUMMARY xix Introduction Demand for industrial parks has soared in the last decades due to the necessity in a globalized economy to optimize industrial activities by reducing costs of common services. While industrial parks have traditionally been seen as a way to increase the competitiveness of the industrial sector in developing and emerging economies, there is an increasing recognition that they can also improve the sustainability of industrial growth by mitigating its negative environmental and social impacts. The eco-industrial park (EIP) model can be an effective tool to address challenges related to inclusive and sustainable industrial development within the scope of the Sustainable Development Goals (SDGs). The design and implementation of an EIP program requires a well-designed policy and institutional framework at the national, regional, and local levels that can cover various types of industrial parks, so that EIPs become part of the wider economic strategies to move the country toward a greener growth path. The International EIP Framework jointly developed by the World Bank Group, the United Nations Industrial Development Organization (UNIDO), and the German Agency for International Cooperation (Deutsche Gesellschaft fur Internationale Zusammenarbeit, GIZ) can be used as a tool to help governments foster the competitiveness of the manufacturing sector and the private sector while meeting their national and international climate pledges, safeguarding the environment, and improving social impact. The framework encompasses 18 prerequisites and 33 performance indicators grouped into four focus areas: park management, environmental, social, and economic. It is a quantitative tool that allows governments to assess and monitor these four areas in a comprehensive way and design interventions to mitigate risks or sustain specific outcomes based on data-driven decisions. The Government of Punjab has an important role to play in designing and implementing a successful EIP program fully integrated into the broader policy framework. A comprehensive policy framework is notably key to stimulate the public and private investment needed to implement the EIP Framework at a large scale. To introduce a range of policy tools, including regulatory reforms, policy mandates, and financial incentives that can facilitate EIP development, it is necessary to assess existing regulations and institutional framework to identify potential gaps that could hinder the implementation of a national EIP program. This report is intended to help the Government of Punjab identify potential regulatory, institutional, and technical gaps and provide preliminary recommendations to consider the adoption of the EIP Framework at the provincial and park levels. It includes five sections structured as follows: Section 1 covers the regulatory analysis based on the current regulations in Punjab on IEs in relation to the development of an EIP program. INTRODUCTION 1 Section 2 assesses the institutional capacity of the Government of Punjab to support the implementation (operations and monitoring) of an EIP program. Section 3 is the application of the EIP Framework to Sundar Industrial Estate (SIE) to assess opportunities and potential technical impediments. Sections 4 and 5 provide recommendations and conclusions for SIE and the whole province, respectively. 2 SUSTAINABLE INDUSTRIAL DEVELOPMENT IN PUNJAB, PAKISTAN 1 Regulatory Analysis The aim of the regulatory analysis is to understand how existing laws can support or hinder the implementation of the EIP Framework. The section encompasses three subsections: park management, environment, and social. In each subsection, a specific set of laws are assessed: Park management: • Establishment of Industrial Estates (Planning Commission [PC] forms) • Land Acquisition Act (LAA) 1894 and Punjab Land Acquisition Rules (PLAR) 1983 • Antiquity Act 1975 • Punjab Local Government Act (PLGA) 2013 and Land Use Regulations Environment: • Pakistan Environmental Protection Act 1997 • Canal and Drainage Act (CDA) 1873 • Punjab Wildlife Protection • Conservation and Management Act 1974 • National/Provincial Environmental Quality Standards (NEQS/PEQS) • Hazardous Substances Rules (2003) • Climate Change Act 2017 and National Energy Efficiency and Conservation Act (NEECA) 2016 • Net Metering (NM) Policy of the Alternative Energy Development Board Social: • Factories Act 1934 • The Punjab Occupational Safety and Health Act 2019 • The Sindh Occupational Safety and Health Act 2017 1.1 Park Management: Establishment of Industrial Estates In Pakistan, most industrial estates (IEs) and management companies have been established as public entities by federal and provincial governments. Sindh Industrial Trade Estate-Karachi was established in 1947 as Pakistan’s first IE, and the first IE in Punjab, Quaid-e-Azam Industrial Estate, was established in 1960. Punjab Small Industries Corporation (PSIC) was created in 1972 to develop small and cottage industries in the province, where it has established and has been operating 29 small IEs. The Government of Punjab established the Punjab Industrial Estate Development and Management Company (PIEDMC) in 2003 and the Faisalabad Industrial Estate Development and Management Company (FIEDMC) in 2004. In 2006, the National Industrial Parks Development and Management Company (NIP) was established by the federal Ministry of Industries and Production of Pakistan. REGULATORY ANALYSIS 3 FIGURE 1. Timeline of industrial estate development agencies in Punjab Ministry of Production, Government of Pakistan established National Establishment of Industrial Parks Pakistan Industrial Development & Development PIEDMC was Management Corporation (PIDC) established Company (NIP) 1947 1952 1960 1972 2003 2004 2006 Sindh Industrial First industrial Punjab Small FIEDMC was Trade Estate- estate, Industries Corporation established Karachi as the first Quaid-e-Azam (PSIC) was established industrial estate established and tasked with in the country installing small IEs Similarly, the Government of Kyber Pukhtunkawa and the Government of Baluchistan also established small IEs throughout the respective provinces. In Pakistan and its provinces, IEs are established under a comprehensive hierarchical institutional and procedural system. Two sets of approvals are applied: (a) Administrative approvals (b) No Objection Certificates (NOCs) (permits) approvals from the relevant departments. 1.1.1 ADMINISTRATIVE APPROVAL IEs are established under the national planning administrative system prepared by the Planning Commission of Pakistan (PCP) and National Economic Council for manufacturing sector projects. The system comprises four PC forms: • PC-I for feasibility of projects (detailed feasibility is required if project is more than PKR 300 million investment) • PC-II for conducting the feasibility of projects • PC-III for annual implementation reporting • PC-IV for project completion report. IE projects are identified, and PC forms are prepared by provincial Planning and Development Department (P&D) and Industries, Commerce, and Investment Department (DOI) in light of provincial policies and strategies (for example, Punjab Growth Strategy 2018, Punjab Industrial Policy 2018, and Punjab Spatial Strategy 2047). PC-I and PC-II forms, along with other technical and financial analyses, require details on social and environmental assessments of the projects under the ‘projects benefits and analysis’ section. Involvement of federal and provincial approving authorities for the approval of IE projects is based on development costs and use of foreign financing. IEs with development costs of PKR 2,000 million without international financing are approved by the provincial P&D and DOI. In the case of IEs, Punjab P&D is supported by Punjab DOI. DOI has established the following three IE development companies: 4 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB • Punjab Small Industries Corporation (PSIC) is an autonomous body for the establishment of small and cottage IEs in the province, established under the Punjab Small Industries Corporation Act in 1973. • Punjab Industrial Estates Management and Development Company (PIEDMC) was established under Section 42 of the Companies Ordinance 1984 for establishing IEs throughout Punjab other than Faisalabad District. • Faisalabad Industrial Estates Management and Development Company (FIEDMC) was established under Section 42 of the Companies Ordinance 1984 for establishing IEs in Faisalabad District. For the establishment of IEs in a selected district, the common procedure requires DOI and companies to consult district governments and agencies. DOI, in collaboration with one of the IEs, prepares and submits the PC-I and PC-II forms (feasibility report) to P&D. P&D technically evaluates the project with the technical assistance of Punjab Economic Research Institution (PERI), an autonomous body attached with P&D. If the project is viable, P&D then submits the PC-I to Provincial Development Working Party (PDWP), which consists of the P&D Board and Finance Department. PDWP has the power to approve projects costing up to PKR 10,000 million, provided the foreign financing share is less than 25 percent of the project cost, and this is the end of the approval process. Projects of higher costs get recommended by PDWP to the approval of the Central Development Working Party (CDWP) at the federal level, which consists of the Ministry of Planning, Development and Reform and Punjab P&D Board. Lastly, projects outside the purview of CDWP are recommended to the Executive Committee of the National Economic Council (ECNEC) for final approval. After the approval by any of the final authorities (that is, PDWP, CDWP, or ECNEC), the Punjab P&D Board issues the administrative approval for the establishment of IEs in coordination with all the concerned departments and agencies (see Figure 2) Table 1. Presents the stepwise administrative actions taken by the provincial authorities for the establishment of IEs in Punjab. 1.1.2 SITE SELECTION Alternative site analysis is generally part of the feasibility report. The analysis is conducted under the framework of • Land market and availability, • Type of IE, • Economics of IE, • Source of financing, • Market demand, and • Environmental and social aspects. One of the main factors in site selection is economic analysis. Environmental and social indicators are marginally covered, and these are reviewed by the Environmental section in P&D. Detailed environmental and social assessments are conducted at the design feasibility stage of the selected site. The private sector and communities linked to the selected site are not consulted at this stage. State-owned land qualifying for the IE Framework is preferred to avoid difficulties linked to acquisition of private lands. If a suitable state land is not available, alternative private lands are identified and analyzed. Thus, the most suitable land is proposed for land acquisition. REGULATORY ANALYSIS 5 FIGURE 2. Flow of administrative approval for IEs in Punjab IE Project Provincial Level Viability Plan Submission P&D Board Attached Autonomous Submission body Department of PIEDMC, FIEDMC or Industries, Commerce PSIC PERI and Investment Should Yes proposed IE project be PDWP recomme Does PDWP PDWP to issue Yes nded have the power administrative ? to issue approval administrative No approval? Yes Should proposed No IE Project Viability Plan No, IE project be to be revised or recommendation approved disregarded to CDWP ? IE Project Federal Level CDWP to issue CDWP Viability Plan administrative NEC EC to to be revised or approval Yes issue Should disregarded administrative Does proposed Should CDWP have Yes IE project be approval No proposed the power to issue approved IE project be Yes administrative No ? IE Project No approved approval? Viability Plan to NEC EC be revised or disregarded Source: Frost and Sullivan 2017. TABLE 1. Stepwise administrative actions for the establishment of an IE Step 1 DOI, under the directions of Government of Punjab and Punjab P&D Board, proposes the establishment of a new IE in a selected district in line with Punjab Growth Strategy and Punjab Industries Sector Plan. Step 2 DOI, based on the size and location of the proposed IE, engages one of the IE development companies for the preparation of the PC-I form of the proposed IE. Step 3 DOI and the company engage district administration, local chambers of commerce, industry sector associations (for example, All Pakistan Textile Mills Association), local governments and agencies (municipal committees (small cities and towns), municipal corporations and development authorities (medium and large cities), and industry and real estate investors for the preparation of the PC-I form. Step 4 DOI submits the PC-I and PC-II forms for approval to P&D. P&D, with the technical assistance of PERI, raises the comments or recommends the project to PDWP for the approval. PDWP either raises the comments or approves the project as per its mandate or recommends the project to CDWP. Step 5 CDWP raises comments or approves the project or recommends it to ECNEC. Step 6 ECNEC raises comments or approves the project. Step 7 The P&D Board, in coordination with concerned departments, grants the administrative approval. 6 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Earlier publications4 reported issues in site selection, such as political influence, unsuitability of location in relation to market demands and environmental and social concerns, and poor site investigations. Poor technical and economic assessment could have a dramatic impact on the success of the IE, and it can be among the main explanations behind the low rate of occupancy of some IEs (for example, Vehari Industrial Estate). The underuse of the infrastructures also equates to increased costs (for example, large up-front investments in physical infrastructure are made, but the IE takes many years to fill, and during this period the infrastructure deteriorates) affecting the economic return of the investment (for example, in many cases, industries did not start production for a long time). In some cases, poor technical analysis can affect environmental performance (for example, in Multan Industrial Estate, the final disposal facility for the wastewater has been located far from the site and farmers are not allowed to build the drain system on the land crossed by the pipeline) and generate substantial disappointment of local communities for not being consulted. Based on the abovementioned impacts of poor technical site assessment, the Urban Unit5 has prepared a comprehensive industrial site selection decision support system (DSS) under industrial site suitability assessments. The PSIC Policy 2019 has made the Urban Unit responsible for the assessment of site selection and feasibility reports. The Urban Unit has informed that DOI uses the system for the selection of sites for future IEs. Box 1 presents the summary of the industrial site selection DSS developed by the Urban Unit. Table 2 presents an assessment of the existing evaluation system and DSS under the criteria proposed in the EIP Framework for evaluating candidate sites for greenfield EIP projects. BOX 1. INDUSTRIAL SITE SELECTION DECISION SUPPORT SYSTEM Step 1: DSS computes the district scores based on weighted scores for nine parameters (raw material, market potential, human capital, environment and ecological vulnerabil- ity, institutional presence, connectivity and logistics, utilities performance, industrial progress, and community) and 141 linked indicators. The system compares the selected district score with other districts in the province. If the district qualifies for the industrial development under inter-district comparative analysis, then the process moves to Step 2. Step 2: DSS conducts alternative site analyses within the selected district, based on a weighted score system under the above-stated nine parameters and linked disaggre- gated sub-indicators. Based on this analysis, suitability of each alternative site for the proposed IE is compared and the site that scores the highest and the most promising is proposed for selection. 4 Frost and Sullivan 2017; World Bank 2016a. 5 The Urban Unit was established in 2006 as a Project Management Unit of P&D of Punjab. In 2012, the Urban Unit was transformed into an independent private sector company fully owned by the Government of Punjab. REGULATORY ANALYSIS 7 Takeaways: Site Selection ASSESSMENT UNDER THE EIP FRAMEWORK The concept of EIP is new to Pakistan and Punjab province. The first attempt in line with the EIP Framework was made in 2013 by the Cleaner Production Institute (CPI) under the Program for Industrial Sustainable Development (PISD) funded by the Kingdom of the Netherlands when Sustainability Frameworks (SFs) for SIE and Quaid-e-Azam Industrial Estate were prepared. Implementation of SFs remained much below the desirable level and DOI did not adopt the SF for IEs. The current administrative approval system for the establishment of IEs (see Table 2) is comprehensive and well established. The topics and subtopics under the EIP Criteria for the evaluation of candidate sites for greenfield EIP projects are mostly covered in the scopes of feasibility studies (PC-I and PC-II), EIAs, design-stage technical studies, and DSS. Overall, the above-stated coverage of EIP Criteria by the existing system and DSS is assessed as good. However, from the implementation point of view, the compliances for environmental, social, and economic topics remain below the desired level. Climate change risk assessment and safe disposal of solid and hazardous wastes are among topics not completely covered in the existing system and proposed DDS. Waste management infrastructures like sanitary landfills in Punjab require substantial interventions to comply with international standards for disposal of industrial hazardous waste. Under the Social topic in Table 2, the subtopics ‘pressure and social dynamics linked to the soil occupation’ and ‘revenue losses for the local population’ are also only partially covered. While all Economic topics are covered, ‘shared services and industrial symbioses potential’ remains majorly uncovered. Lastly, the subtopics of ‘existing industrial parks or areas (competition or complementary)’ and ‘change of land use: local effects and absorption of the resulting costs’ are partially covered. At the administrative approval stage of IEs, the focus remains on economic indicators (direct and indirect employment generation, contribution in gross domestic product, foreign direct investment (FDI), technology transfer and development, economy of scale and economic efficiency, and so on). Most of the environmental topics stated in the EIP Framework are also covered by EIAs, which should be conducted at the site selection stage as it presents important inputs for site selection considerations. In current practice, however, the EIA is conducted at either the PC-II feasibility stage or the design feasibility stage, both after the site has already been selected. At this point, the requirements of the alternative site analysis stated in the scope of the EIA cannot be addressed. Moreover, the scope of the EIA further needs to be expanded with respect to climate risk assessment. The EIA currently covers only disaster management and lacks comprehensive coverage of climate change risk. Detailed soil and subsoil investigations are done at the design-stage feasibility report. Therefore, secondary data and information for soil and subsoil are used in EIAs. Another element in site selection is that stakeholders within the institutional system (mostly government agencies) are engaged and consulted as per procedures and mandates of government agencies. However, consultations with stakeholders from the private sector and communities remain below the desired level. The most important lacking in administrative approval is the low level of engagement of private sector and community stakeholders in the site selection. The DSS developed by the Urban Unit meets most of the EIP requirements for IE site selection, and it is a comprehensive tool for this purpose at the provincial and district levels. It can be further strengthened in line with EIP Criteria for the evaluation of candidate sites for greenfield EIP projects. 8 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 2. Existing evaluation system, DSS, and EIP criteria assessment of site selection for greenfield EIP projects Existing System and DSS Coverage Topic Subtopic Complete Partial No Environment Climate risk Vulnerability of the site to DSS, EIA assessment climate-related hazards Surface and subsurface Subsurface waters: DSS PC-I and PC-II, EIA water Characteristics (capacities, sensibility, and current use) Surface waters: Water DSS PC-I and PC-II, EIA flow direction, velocity and volume, hydrology, drainage, and flood risks Air Air quality, cumulative DSS, EIA effects, and sensitivity of neighboring areas to these effects Sensitivity of the EIA environmental regarding the potential noise generation (construction works, industrial activities, and traffic) Soil and subsoil Physical characteristics of DSS, design-stage the soil and subsoil technical studies Edaphic characteristics: DSS, design-stage Nature and productivity technical studies Environmental Flora DSS, EIA sensibility Fauna DSS, EIA Soil occupation DSS, EIA Waste Collection and valorization DSS, EIA, design-stage of ordinary waste technical studies Connectivity toward a No landfill Collection and treatment of EIA dangerous waste Social General living Existing and future housing EIA conditions Existing and future public DSS, design-stage transport and services technical studies Existing and future DSS, design-stage amenities and community technical studies services Dynamics, Pressure and social EIA opportunities, and dynamics linked to the soil conflicts occupation Potential conflicts with local EIA population New job opportunities, PC-I and PC-II new sources of revenue, and improvement of the living conditions of the local population Revenue losses for the local EIA population continued ⊲ REGULATORY ANALYSIS 9 TABLE 2. Existing evaluation system, DSS, and EIP criteria assessment of site selection for greenfield EIP projects (Continued) Existing System and DSS Coverage Topic Subtopic Complete Partial No Economic Connectivity: Costs Access to drinking water DSS, EIA, PC-I and PC-II for access and Access to electricity DSS, EIA, PC-I and PC-II maintenance Access to other networks/ DSS, EIA, PC-I and PC-II grids Wastewater network DSS, EIA, PC-I and PC-II ICT DSS, PC-I, and PC-II Roads DSS, PC-I and PC-II EIA Port DSS, PC-I and PC-II Airport DSS, PC-I and PC-II Terrain constructability Topography, leveling DSS, design-stage technical studies Flooding DSS, design-stage technical studies Existing economic Existing workforce DSS, PC-I and PC-II ecosystem Research and innovation DSS centers Business development DSS services Existing value chains DSS Existing industrial parks DSS or areas (competition or complementarity) Shared services and No industrial symbioses potential Change of land use: Local PC-I and PC-II, EIA effects and absorption of the resulting costs Note: EIA = Environmental Impact Assessment; ICT = Information and communication technology. Enabling Actions The above-stated administrative approval system can be improved in line with EIP requirements by considering the following actions: (a) Promoting the EIP Framework by incorporating in the national and provincial policy framework main requirements based on the EIP Framework (prerequisites) for the establishment of IEs from the beginning of the administrative approval (for example, in the national and provincial policies, PC-I, and PC-II feasibility stages). (b) Establishing public-private dialogue platforms for stakeholder consultations for project identification, site selection, project costing, and detailed design for environmental and social assessment stages. (c) Improving site selection analyses based on comprehensive criteria comprising economic, environmental, and social indicators by adopting and systematically using the DSS IE site selection system developed by the Urban Unit. 10 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 1.2 Park Management: Feasibility/Design Study Requirements This subsection summarizes the processes of administrative approvals and the legal framework applied at the feasibility stage of greenfield IEs. After administrative approval, DOI designates one of the industrial development and management companies (IEs) to prepare detailed feasibility and development planning of the IE. Developers usually prepare feasibility/design reports with the assistance of consultancy companies. The general scope of feasibility/design reports covers at least the following topics: • Inputs required (for example, land, capital, institutional, and market arrangement) • Duration of the project development and phasing plan for the colonization and operationalization • Physical outputs (for example, compliance with the city master plan [local land use plan in the absence of city master plan for small cities], alternative site analyses, IE master planning, layout plan, land use plan, number of plots by size, types of industries to be located, zoning plan, road and utilities layouts and designs, phasing plan, operational plan, sustainability plan for completion and successful operations, land acquisition requirements, and consultations with other stakeholders such as power and building authorities, business and trade associations, and potential tenants) • Economic and social outcomes (for example, employment generation, gross domestic product contributions, and potential of generating foreign exchange) • Issuance of NOCs from concerned agencies such as local government/city development authorities, Environmental Protection Department (EPD), district government, and Energy Department. At the feasibility/design stage, the following legal instruments are followed. 1.2.1 LAND ACQUISITION ACT 1894 AND PUNJAB LAND ACQUISITION RULES 1983 LAA 1894 was amended from time to time throughout its existence. PLAR 1983 further elaborates on the applied rules for relevant sections of LAA 1894. Amendments were made universal to all land acquisition activities, and in some cases, amendments were also made valid for specific projects. A brief description of LAA 1894 along with rule elaborations stated in LAR 1983 is given below. After the administrative approval, DOI, through the Directorate General, Industries, Prices, Weights, and Measures (DIPWM), starts the process of land acquisition. Preliminary notification is issued under Section 4 that land is needed for the public purpose in the selected district. Issuance of instructions under Section 4 permits the government authorities (appointed Collector or Revenue Officer) to enter, survey, and investigate the selected land to determine the suitability for IEs. Compensation shall be paid for any damage caused by such an entry. The main issues to assess at this stage are • Availability of required amount of land; • Existing land use in the records of the Revenue Department; • Proposed land use under city master plan zoning regulations (if available) or local government records, and land entitlements; • Other physical assets on the land (such as crops, trees, irrigation infrastructure, tube wells, handpumps, and buildings); and • Important natural features of the land. REGULATORY ANALYSIS 11 Within one year of the issue of the Section 4 notice, a formal notification is issued under Section 5 in the official gazette by the Collector that the selected land is needed for public use. Any person may raise objections to the Section 5 notice within 30 days of its issuance. The Collector hears the objections, raises enquiries, and submits a report within 90 days to district administration. The district administration must announce the decision in 90 days; otherwise, objections shall be deemed to have been admitted and acquisition proceedings for the specific land come to an end. If the provincial government is satisfied with the process, within six months of the publication of Section 5, it issues under Section 6 the declaration that the land is suitable for acquisition for IE. After the declaration under Section 6, the Commissioner of Land Acquisition Collection (LAC) shall “direct the Collector to take order for the acquisition of land” under Section 7. The Collector then notifies under Section 8 to mark out, measure, and plan the land, unless this was done after the issue of Section 4. Annex 1 describes in detail all the steps required by LAA 1894, summarized in Figure 3. Figure 3 presents the land acquisition process under LAA 1894: FIGURE 3. Land acquisition process under LAA 1894 Submission of the land detail on prescribed proforma under Rule-3 of LAA 1894 by Requiring body to Acquiring body. Issuance of Notification under Section-4 by the Collector. Within 1 Year Objections under Section-5 A shall be filed within 30 days. Objections shall be disposed Hearing of Objections under Section-5 of by the Collector and report forwarded to 6 Months Commissioner within 60 days. Decision by Within the Commissioner within 30 days. Declaration under Section-6 by Commissioner. 6 Months Collector issues notices to all interested Collector records statement of the persons Within persons under Section-9. interested for claims under Section-10 Collector issues final award under Section-11 Determination of Compensation by the after conducting enquiry into measurement, Collector under Section-15, keeping in view value and claim. provisions of Sections-23 & 24. Section-17: Special Powers in Case of Urgency Payment of compensation by Collector under • Collector may take possession of the land Section-31. after 15 days of the publication of notice under Section-9, Sub Section-1. • Determination of compensation keeping in view Sections-23 & 24. Persons dissatisfied with the award may file • Award under Section-11. their appeals before the Court within 42 days under Section-18. Source: World Bank 2016a. 12 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Takeaways: LAA 1894 and PLAR 1983 ASSESSMENT UNDER THE EIP FRAMEWORK LAA 1894 and PLAR 1983 are comprehensive legislations, legally covering topics stated in EIP Criteria relevant to land acquisition such as ‘potential conflicts with the local population’; ‘new job opportunities (female employment not specifically covered), new sources of revenue, and improvement of the living conditions of the local population’; and ‘revenue losses for the local population’. In Punjab, land was acquired for establishing new IEs and expanding existing IEs. Private lands were acquired under LAA 1894 for SIE, Rahim Yar Khan Industrial Estate, and Faisalabad Industrial Estate. In most of the cases, payments were made for land and loss of assets at market prices to titleholders. In the case of non-titleholders, physical relocation, loss of homes, loss of assets, and the economic impacts of interrupting or obstructing access to assets for other communities were not amicably settled and compensated. In cases where land was acquired under Section 17 (emergency, see Annex 1) of LAA 1894, public consultations were not conducted and affected persons faced sudden dispossession of land and assets, adding to their vulnerability. Most of the IEs are facing legacy issues including Multan Industrial Estate (Section 17 invoked), Quaid-e-Azam Apparel Park (Section 17 invoked) implemented by PIEDMC, Faisalabad Industrial Estate implemented by FIEDMC, and Gujrat Small Industrial Estate implemented by PSIC. Most of the legacy issues are related to compensation rates paid to affected person(s). These issues resulted in delays during the implementation of IEs and caused equity and reputational issues.6 The summary of implementation of LAA 1894 and PLAR 1983 establishes that the legislation is complete, but complete implementation of the legislation in true spirit is lacking. Enabling Actions The following are the enabling actions proposed to bring the implementation of LAA 1894 and PLAR 1983 in compliance with EIP Criteria for the evaluation of candidate sites for greenfield EIP projects: • Land acquisition for IEs should not be conducted under Section 17 (emergency). Application of Section 17 may lead to unfair settlements with the affected person(s) and cause social conflicts, which might result in financial and reputational losses. • Land acquisition should be conducted after the completion of environmental and social assessment feasibility studies as part of PC-I and PC-II or through independent studies. 1.2.2 ANTIQUITY ACT 1975 AND PUNJAB ANTIQUITIES AMENDMENT ACT 2012 Antiquity Act 1975 defines any object belonging or relating to any period before May 1857 as ancient. It includes any human-made ancient product, movable or immovable, illustrative of art, architecture, craft, custom, literature, morals, politics, religion, warfare, science, or any aspect of civilization or culture. It also includes any ancient object or site of historical, ethnographical, anthropological, military, or scientific interest, national monument, or any other object or class of such objects declared to an antiquity by the federal government, by notification in the official gazette. Clause 7 of the act, later amended in 2012 when these powers were also conferred to the Director General, gives the federal government the power to instruct provincial governments to acquire any land that it believed to contain antiquity under LAA 1894. Clause 18 restricts the use of land/property of antiquity for any other purpose inconsistent with its character or a purpose other than that related 6 World Bank 2016b. REGULATORY ANALYSIS 13 to its administration and preservations. Clause 19 prohibits the destruction of protected antiquities by any person. The act of destruction of antiquity is a punishable crime under the Antiquity Act. Clause 22 establishes that no development plan or scheme or new construction on or within 200 feet of a protected immovable antiquity shall be undertaken or executed without the approval of the Director. Takeaways: Antiquity Act 1975 ASSESSMENT UNDER THE EIP FRAMEWORK Antiquity Act 1975 comprehensively covers the protection and management of archeological and antiquity sites. In addition, the ‘Environmental and Social Standard (ESS) 8: Cultural Heritage’ in the World Bank’s Environmental and Social Framework (ESF) demands the protection and management of archeological sites. The EIP Framework also indirectly touches upon physical cultural and antiquity resources. Under the Social topic ‘dynamics, opportunities, and conflicts,’ the EIP Framework covers the subtopics ‘pressure and social dynamics linked to the soil occupation’ and ‘potential conflicts with local population’. IE sites can cause significant impacts on archeological sites and antiquities at the time of site selection and later during construction. Application of the Antiquity Act may therefore have serious effects if antiquities are located within or in proximity of the selected IE site. In such a case, the selected site requires proper screening under the scope of the act. For example, antiquities were discovered in Sukkur at the Lakhwenjdaro Industrial Estate, and location of the IE came under serious scrutiny.7 In Punjab, the provincial Directorate General of Archeology has mapped the archeologically significant sites in 1994–96. This map establishes a number of unprotected and unexcavated archeological sites in Bahawalpur, Rawalpindi, and Multan Districts. While selecting IE sites in these districts, the proponents should contact the Punjab Directorate General of Archeology, secure a permit before selecting the site, and commit that ‘chance finds’ during construction will be immediately reported to the Directorate. Enabling Actions The following are the enabling actions which need to be followed as per the requirements of Antiquity Act 1975 for the policy makers: • Strengthen the requirements of Antiquity Act 1975 in line with the EIP Framework and the World Bank ESF ESS 8: Cultural Heritage before selecting sites for IEs, screen them under Antiquity Act 1975 throughout Punjab, and follow chance-find Antiquity Act procedures if antiquities are found during the construction activities of the IE. • Secure permits from the Directorate General of Archeology for Bahawalpur, Rawalpindi, and Multan districts before the selection of the IE site. 1.2.3 PUNJAB LOCAL GOVERNMENT ACT 2013 AND LAND USE REGULATIONS OF DEVELOPMENT AUTHORITIES/LOCAL GOVERNMENTS The Government of Punjab under the act notifies, demarcates, and declares a local area as rural or urban. On the one hand, most of the rural settlements (as well as census wards in urban areas) 7 J&C, ESSA 2017, the World Bank. 14 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB are governed by the Union Council, the smallest unit in the hierarchy, while rural areas in districts are governed by the District Council. Urban areas, on the other hand, are further notified, demarcated, and declared as Municipal Committee (population 30,000–500,000), Municipal Corporation (mostly secondary cities with populations more than 500,000), or Metropolitan Corporation (such as Lahore, with a population more than 500,000). Regarding the establishment of IEs, see Annex 2 with the relevant functions of the municipal units. Takeaways: PLGA 2013 ASSESSMENT UNDER THE EIP FRAMEWORK Local Government Act (LGA/PLGA) 2013, along with zoning regulations of city master plans, establishes a comprehensive system under which IEs are developed and operated in the province. The most important topics regarding the EIP Framework covered by the act are Environment (surface and subsurface water, air pollution, environmental sensibility, and waste management); Social (general living conditions, dynamics, opportunities, and conflicts); and Economic (connectivity: costs for access and maintenance). All the major cities have prepared long-term master plans by including zoning plans and regulations. Almost all the cities in the province have land use plans with demarcated zones. The implementation of master plans is mostly in variance with the planning and most of the IEs are located on prime agricultural lands instead of zones reserved for industry. The use of these lands was changed by the legal approvals of development authorities and local governments. IEs were developed based on the following permissions from development authorities or local governments: • Land acquisition with the consent of the local government • Change of land use, if required • Master plan, layout plan, and utilities plan of the IE • Building designs along with structure designs as per building bylaws. The compliance of LGA 2013 is generally satisfactory at the development stage. However, the monitoring functions of the development authorities and local governments are weak at the operational stage. Coordination with development and management companies of IEs is also weak and irregular. Enabling Actions The following are the enabling actions needed to be followed: • Strengthen the capacity of development authorities and local governments for the effective management of IEs at the operational stage as per LGA 2013. • IEs should increase coordination with development authorities and local governments during the operational stage. REGULATORY ANALYSIS 15 1.2.4 PAKISTAN ENVIRONMENTAL PROTECTION ACT 1997 AND PUNJAB ENVIRONMENTAL PROTECTION ACT 2012 Punjab Environmental Protection Act 2012 (PEPA 2012) is the overriding environmental legislation in the Province of Punjab. It is a replication of PEPA 1997 with minor changes. Geographical areas lying outside the provinces but within the administrative boundaries of Pakistan are covered by PEPA 1997. Under Section 6, PEPA 2012 instructs Punjab EPD to establish a system of environmental surveillance and monitoring and conduct research and development. Punjab EPD has promulgated PEQS for water, air, and solid waste industrial and municipal emissions as an essential part of PEPA 2012. PEPA 2012 states that noncompliance with PEQS and not paying pollution charges will invoke implementation of the punitive sections of the Environmental Protection Order and penalties to every noncomplying person, corporate body, government agency, local authority, or local councils. Cases challenged by the parties will be settled by the Environmental Magistrates and Tribunals, and if required, the cases can also be appealed in higher courts. Under Section 11 (2) for the levy of pollution charges, PEPA 2012 states that “the Provincial Government may levy a pollution charge on any person who contravenes or fails to comply with the provisions of subsection (1), to be calculated at such rate, and collected in accordance with such procedure as may be prescribed.” Moreover, Section 11 (3) states that “any person who pays the pollution charge levied under sub-section (2) shall not be charged with an offence with respect to that contravention or failure.” In addition, provisions of Section 11 establish that the law is universal and is applied to all sources of pollution including municipal sources. IEs, common effluent treatment plants (CETPs), industrial units located within an IE, and industrial units located outside an IE in their individual capacity are subject to an EIA or an initial environmental examination (IEE). Section 12 of PEPA 2012 establishes that “no proponent of a project shall commence construction or operation unless has filed with the Provincial Agency an IEE or, where the project is likely to cause an adverse environmental effect, an EIA, and has obtained from the Provincial Agency approval in respect thereof.” An Environmental Management Plan (EMP) is an essential part of IEEs/EIAs. Under PEPA 2012, public participation through public hearing is essential as part of the IEE and EIA reports approval. The Pakistan EPA review of IEE and EIA Regulations 2000 prepared by Pakistan EPD stipulates the complete approval system of IEEs and EIAs. Figure 4 presents the IEE/EIA approval process in practice. 1.2.4.1 Pakistan Environmental Protection Agency Review of IEE and EIA Regulations 2000 The Pakistan Environmental Protection Agency (Pak-EPA) Review of IEE and EIA Regulations document sets out the key policy and procedural requirements for conducting IEEs and EIAs. Containing a brief policy statement on the purpose of environmental assessment and the goal of sustainable development, it requires environmental assessment to be integrated with feasibility studies. It defines the jurisdiction of the federal and provincial EPDs and P&D. The document lists the responsibilities of proponents and the duties of responsible authorities and provides schedules for proposals determining whether the project requires an IEE or an EIA. It also provides a tool for screening the projects based on environmental criteria and lays down the procedures for environmental approval. The process of obtaining an NOC covers three main stages of the project: feasibility, construction, and operation. 1.2.4.2 Sectoral Guidelines for Industrial Estate 1997 The Sectoral Guidelines for Industrial Estate 1997 identify the key environmental issues that need to be assessed as well as mitigation measures and project alternatives to be considered 16 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB FIGURE 4. EIA evaluation process in practice Project (PEPA 1997) Environmental Screening (EPA Regulations 2000) IEE including EIA including Environmental No IEE/EIA Required Environmental Management and ReferEPARegulations Management Monitoring Plan (EMMP) 2000Schedule-III Framework EIA Study and Report IEE Study and Report Preparation Preparation EIA/IEE report submitted 10 hard copies to the concerned EPA Pak-EPA(Federallevel), Punjab- and 2 electronic for Review along with EPA, SindhEPA, KPKEPA, copies required application form and Balochistan EPA Review fee Preliminary Scrutiny (10 days) Public Participation (shall not be earlier than 30 days) Report Review Report Review (90 days) (45 days) Decision Approved with Not Approved conditions No Objection Certificate (NOC) issued from concerned Pak-EPA (Federal level), Validity of approval Punjab - EPA, Sindh EPA, KPK, EPA, three (03) years Balochisthan EPA Implementation and follow up Note: KPKEPA = Khyber Pakhtunkhwa Environmental Protection Agency. REGULATORY ANALYSIS 17 in the actual EIA. The guidelines include an overview of the industry and the processes, site evaluation considerations during site selection, potential impacts on environment and social aspects, mitigation measures (abatement technologies), monitoring and reporting, management and training, and a checklist of likely social and environmental impacts and mitigation measures. Takeaways: PEPA 2012 ASSESSMENT UNDER THE EIP FRAMEWORK PEPA 2012, along with federal government regulations and supporting guidelines, establishes a comprehensive legislative and procedural system for IE site selection, design, construction, and operation. It also covers environmental protection, conservation, rehabilitation, and improvement. An effective screening process in the form of Schedule I, II, and III of Pak-EPA’s Review of IEE and EIA Regulations is currently in place. Alternative site analysis including ‘no build option’ for IEs is the mandatory requirement under the IEE/EIA Framework and the sectoral guidelines for IEs. The main assessment statements of the system are summarized below. • The capability of Punjab EPD for environmental and social monitoring is assessed as low. This results in a low level of compliance with PEPA 2012 during implementation and operational phases of IEs.8 • Alternative site analysis requires more structured tools (as the one developed by the Urban Unit and discussed in Section 1.1.2.). Most of the IEs sites were selected before the IEE/EIAs were conducted. • IEEs/EIAs are prepared based on spot data (ambient status of water bodies, air, land use, and so on) and analyses. Cumulative environmental and social impacts need further improvements in the technical analysis, since assessment and prediction of long-term cumulative environment and social impacts are important for IEs. • Community consultations are an essential requirement of PEPA 2012. Communities are consulted at two stages: (a) during the socioeconomic survey of stakeholder communities and (b) through public hearings. The quality of public consultations varies by the size and type of projects. PEPA 2012, through its IEE and EIA Framework, regulations, and guidelines, covers most of the topics and subtopics stated in the EIP Criteria for site selection, construction, and operations of IEs. However, its implementation and compliance by the existing and new IEs is much below the required standard.9 Enabling Actions The enabling actions that could be adopted to improve the assessments are as follows: • Starting the process of the IEE/EIA at the time of site assessments for land acquisition. The environmental and social aspects should be made part of the site selection assessment. • Punjab EPD, in collaboration with development and management, needs to focus on NEQS and EMP compliances that were committed in the EIAs of existing and new IEs. Staff trainings on EIA, 8 World Bank Group 2019. 9 World Bank Group 2019. 18 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB EMP, and PEQS compliances will help in enhancing the capacity of the EPD, while trainings for PEPA 2012 compliance will enhance IEs. • Cumulative environmental and social impacts should be predicted in the EIAs of IEs. These should be part of the terms of references (TORs) of third parties. Punjab EPD should demand this assessment while reviewing EIAs and issuing NOCs for IEs. 1.2.5 CANAL AND DRAINAGE ACT 1873 CDA 1873 focuses on construction and maintenance of drainage channels and defines powers to prohibit obstruction or order their removal. It also covers issues related to canal navigation. It briefly addresses issues relating to environmental pollution. Section 70 (5) of the CDA clearly states that no one can “corrupt or foul the water of any canal so as to render it less fit for the purposes for which it is ordinarily used.” In addition, Section 73 of the CDA enables a person who has willfully damaged or obstructed the canal or “rendered it less useful” to be arrested without warrant or to be taken before the magistrate. Takeaways: CDA 1873 ASSESSMENT UNDER THE EIP FRAMEWORK CDA 1873 covers the EIP topic ‘surface and subsurface water’ and subtopic ‘surface waters: water flow direction, velocity and volume, hydrology, drainage and flood risks’. It is exceedingly rare that IEs discharge wastewater (treated or untreated) into the canals. If an IE plans to discharge wastewater into a canal, the wastewater should be treated. For this case, an NOC from the Provincial Irrigation Department must be issued, and all the conditions of the NOC should be met during the operations of the IE. Enabling Actions While doing site selection for IEs, the developer should make sure that a natural drainage network is available for the discharge of wastewater. Discharge of wastewater, even if treated, is not desirable and should be avoided. 1.2.6 PUNJAB WILDLIFE PROTECTION, CONSERVATION AND MANAGEMENT ACT 1974 PWPCM Act 1974 requires the protection of wildlife species declared as endangered/threatened and rare. It gives protection to these species by declaring their natural living environment as protected and reserved, which includes areas such as national parks, wildlife sanctuaries, and game reserves. The Criminal Code discusses offences where public or private properties and/or human lives are affected due to intentional or accidental misconduct of an individual or body of people. The code defines the charges for violations concerning pollution of air, water bodies, and land. Noise pollution is covered in Section 268. In the context of this program, the Criminal Code can provide a basis for the IEs to coordinate activities with the local authorities to ensure that construction and operation activities do not become a cause of public nuisance or inconvenience. REGULATORY ANALYSIS 19 Takeaways: PWPCMA 1974 ASSESSMENT UNDER THE EIP FRAMEWORK PWPCM Act 1974 demands compliance with PEQS and EIP topics and subtopics related to air, water, and soil pollution. The act directly covers the EIP topic on ‘environmental sensibility’ and subtopics of ‘flora, fauna, and soil occupation’. Enabling Actions The suggested enabling actions are as follows: • During IE site selection, presence of national parks in the vicinity needs to be assessed to ensure that the development and operations of the IE will not disturb the environmental and ecological sensibility of national parks. • IEs cannot be located at sites with rich flora and fauna, and mitigations need to be in place to make sure that the IE operations will not disturb the flora and fauna of the immediate region. 1.2.7 AN OVERALL ASSESSMENT OF THE FEASIBILITY-STAGE LEGAL FRAMEWORK OF PAKISTAN AND PUNJAB IN RELATION TO THE EIP CONCEPT Table 3 shows that the legal framework of Pakistan and Punjab is relatively comprehensive with regard to EIP site selection and assessment criteria for greenfield IEs. Except for climate change and industrial symbiosis aspects, other topics and subtopics are comprehensively covered. The topic of ‘existing economic ecosystem’ and linked subtopics are covered in the feasibility studies. Despite the comprehensive legislation available in Punjab for IE development, none of the IEs in Punjab fall into the EIP category. The main contributing factors to this situation are as follows: • Low enforcement capacity of PEPA 1997 and PEPA 2012. • Even though environmental infrastructures (for example, wastewater treatment plants [WWTPs] and sanitary landfills) are an essential part of the IE master plan, they are underestimated in the infrastructure assessments of economic feasibility studies while developing IEs. The EPD and city development authorities/local governments issue NOCs based on land allocation for treatment plants and landfill sites in the IE master plan, and commitment to build environmental infrastructure is an essential part of the EIA. However, after the issuance of NOCs, the enforcement and monitoring do not ensure the necessary resources to follow these projects. • Management of IEs and resident firms requires more financial support to invest in treatment plants and sanitary landfills. • Resident firms are also generating air pollution and solid waste. Abating air pollution and managing solid waste is the responsibility of the industrial unit as per PEPA 2012. For solid wastes, IEs have made collection and disposal arrangements against a fee. It is questionable whether the solid waste (including hazardous waste) is safely disposed of by IEs in the absence of sanitary landfills within IEs. Regarding air pollution, the EPD and IE development and management companies only react to complaints. There is no formal monitoring system on the part of the EPD and IEs. Monitoring data for air pollution are not available. • IEs could not succeed in developing consensus among IE resident firms and Boards of Management (BOMs) regarding the establishment of environmental infrastructure based on proportionate contributions (for capital investment and operational costs) from resident firms. 20 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 3. Legal coverage and EIP criteria assessment of site selection for greenfield EIP projects Legal Coverage by Existing Regulatory System Topic Subtopic Complete Partial No Environment Climate risk Vulnerability of the site to PEPA 1997 assessment climate-related hazards PEPA 2012 Surface and Subsurface waters: PEPA 1997 subsurface water Characteristics (capacities, PEPA 2012 sensibility, and current use) Surface waters: Water flow PEPA 1997 direction, velocity and PEPA 2012 volume, hydrology, drainage, and flood risks CDA 1873 Air Air quality, cumulative effects, PEPA 1997 and sensitivity of neighboring PEPA 2012 areas to these effects Sensitivity of the environmental regarding the potential noise generation (construction works, industrial activities, and traffic) Soil and subsoil Physical characteristics of the PEPA 1997 soil and subsoil PEPA 2012 Edaphic characteristics: Nature and productivity Environmental Flora PEPA 1997 sensibility Fauna PEPA 2012 Soil occupation PWCPA 1974 Waste Collection and valorization of PEPA 1997 ordinary waste PEPA 2012 Connectivity toward a landfill LGA 2013 Collection and treatment of dangerous waste City Zonal Plans CDA 1873 PWCPA 1974 Social General living Existing and future housing LGA 2013 conditions Existing and future public City Master Plans transport and services Existing and future amenities and community services Dynamics, Pressure and social dynamics LAA 1894 opportunities, linked to the soil occupation PEPA 1997 and conflicts Potential conflicts with local PEPA 2012 population New job opportunities, new sources of revenue, No and improvement of the living conditions of the local population Revenue losses for the local LAA 1894 population continued ⊲ REGULATORY ANALYSIS 21 TABLE 3. Legal coverage and EIP criteria assessment of site selection for greenfield EIP projects (Continued) Legal Coverage by Existing Regulatory System Topic Subtopic Complete Partial No Economic Connectivity: Access to drinking water LGA 2013 Costs for access Access to electricity PEPA 1997 and maintenance Access to other networks/ PEPA 2012 grids City Master Plans Wastewater network ICT Roads Port Airport Terrain Topography, leveling No constructability Flooding CDA 1873 Existing Existing workforce economic Research and innovation No ecosystem centers Business development services Existing value chains Existing industrial parks or areas (competition or complementarity) Shared services and industrial symbioses potential Change of land use: Local LAA 1894 effects and absorption of the LGA 2013 resulting costs City Master Plans Potential improvements could be achieved by implementing a few interventions: • The provincial government, EPD, and development authority/local government should clearly confer the responsibility of establishing environmental infrastructures to IEs as per the legal framework of the province, by ensuring that all IE developers and operators comply with legal and regulatory requirements to establish required environmental infrastructure in IEs. • IEs and resident firms should establish regulations and procedures ensuring adequate financing of capital investment and operational costs required for environmental infrastructure by IE operators and tenant companies. • The EPD and development authority/local government should increase monitoring activities and issue legal notices to IEs to ensure that they fulfill their legal commitments given in the IE master plan and the EIA. • The EPD should increase its firm-level monitoring activities for air pollution abatement and solid waste management. • The capacity of IEs, BOM, resident firms, the EPD, and development authorities/local governments should be substantially enhanced for the establishment and operation of environmental infrastructure and monitoring. 22 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 1.2.8 NOCS AND PERMITS Table 4 presents the institutional NOCs and permits required for the IE to proceed to development and construction activities. 1.3 Environment: Monitoring 1.3.1 WASTEWATER, SOLID WASTE, AND AIR POLLUTION Wastewater. Most of the IEs in Pakistan do not have WWTPs. Even though compliance to NEQS/ PEQS is mandatory for IEs, this is only possible through WWTPs. Therefore, untreated wastewater discharged from most of the IEs in the country, including those in Punjab, does not meet these standards. There are only two CETPs in the country: Korangi Tanneries CETP and Kasur Tanneries CETP. Both CETPs partially comply with PEQS. Almost all IEs discharge wastewater in human-made or natural drains. These drains were constructed to drain subsoil water, control waterlogging and salinity, and carry the surface runoff from surrounding areas. The drains are finally discharged into rivers. Presently, these drains are complementing to the urban sewerage/drainage networks with negligible natural water inflows. These drains are owned by the Provincial Irrigation Departments and governed under CDA 1873. Table 5 presents the hydraulic flows and biological pollution loading of four IEs in Punjab. Data for Quaid-e-Azam Industrial Estate and Multan Industrial Estate were measured at site, and the numbers for SIE and FIE were taken from design reports for CETPs. PEQS comprise two sets of pollution parameters for wastewater: biological and heavy metals. WWTPs only treat biological pollution parameters as heavy metals need different recovery and recycling treatment technologies, such as chrome recovery plants. Most of the heavy metals get settled in the conveyance system and do not reach CETPs. The amount that does reach WWTPs then settles in the sludge of the plant. Table 6 presents PEQS for biological parameters. TABLE 4. Permit requirements Processing Provincial Department Relevant Legislation NOC/Permit Type Time (months) Local Government Land Acquisition Act 1894 Permit to acquire land and 6–12 Department and Revenue permit for the change of land Department use Archeological Department Antiquity Act 2012 Permit in case archeological 3 sites in the vicinity of IE site. Compliance to standard Environmental Protection Punjab Environmental Three NOCs for 3–6 Agency Protection Act 2012 • Design phase, • Construction/completion phase, and • Operational phase Irrigation Department Canal Drainage Act 1873 Permit to discharge treated 3–6 water in the natural body Wildlife Department Punjab Wildlife Conservation Permit if the IE site is in 3 and Management Act 1974 the vicinity of national park or ecologically important marked area REGULATORY ANALYSIS 23 TABLE 5. Hydraulic and BOD pollution loading Industrial Estate Hydraulic Load (m3/day) BOD Pollution Load (kg/day) Sundar Industrial Estate – PIEDMC 120,000 42,000 Quaid-e-Azam Industrial Estate – PIEDMC 60,000 10,140 Multan Industrial Estate – PIEDMC 42,000 18,270 Faisalabad Industrial Estate – FIEDMC 182,000 140,140 Source: PIEDMC and FIEDMC. Note: BOD = Biochemical oxygen demand. TABLE 6. PEQS for biological pollutants in municipal and liquid industrial effluents Parameter Into Inland Waters (mg/L) Into Sewage Treatment (mg/L) Temperature or temperature increase ≤ 3oC ≤ 3oC pH value 6–9 6–9 BOD – mg/l 80 250 Chemical oxygen demand (COD) 150 400 Total suspended solids (TSS) 200 400 Total dissolved solids (TDS) 3,500 3,500 Oil and grease 10 10 Phenolic compounds (as phenol) 0.1 0.3 Chloride (as CL+++) 1,000 1,000 Fluoride (as F+++) 10 10 Cyanide (as CN+++) 1.0 1.0 Anionic detergents (as methylene blue 20 20 active substances assay [MBAS]) Sulfate (SO42-) 600 1,000 Sulfite (S2+++) 1.0 1.0 Ammonia (NH3) 40 40 Pesticides 0.15 0.15 Source: PEPA 2012, notified on July 26, 2013. Table 7 presents the ranges of expected concentration levels of major wastewater pollutants for IEs and drains in which IEs discharge wastewater. Table 7 confirms high levels of BOD, COD, and TSS far exceeding permissible standards. Few industries in the IEs also discharge some of the most toxic and persistent heavy metals and synthetic organic chemicals as constituent of wastewater. It is mandatory for the industry unit to treat/recover the heavy metals at the wastewater discharge point of the industry unit. For example, most of the medium and large tanneries in the country have installed chrome recovery/ recycling plants for reuse purposes. The payback period of a chrome recovery plant is 6–12 months. Technologies for the recovery/reuse of other heavy metals at the discharge point within industrial production units are available, but most of the heavy metal-emitting industries have not yet installed heavy metal recovery/recycle plants. Table 8 presents provincial PEQS for heavy metals. Compliance of these parameters is mandatory. 24 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 7. Values for common parameters of wastewater treatment Common Expected Concentrations Concentration of Drain Effluent Standards Parameters of Effluent (mg/L) before Discharge of Effluent (mg/L) (mg/L) BOD 350–700 135–200 80 COD 700–1400 200–400 150 TSS 300–600 07–14 200 Source: CPI database. TABLE 8. NEQS for heavy metals in municipal and liquid industrial effluents Parameter Into Inland Waters (mg/L) Into Sewage Treatment (mg/L) Cadmium (Cd) 0.10 0.10 Chromium (trivalent and 1.00 1.00 hexavalent) Copper (Cu) 1.00 1.00 Lead (Pb) 0.50 0.50 Mercury (Hg) 0.01 0.01 Selenium (Se) 0.50 0.50 Nickel (Ni) 1.00 1.00 Silver (Ag) 1.00 1.00 Total toxic metals 2.00 2.00 Zinc (Zn) 5.00 5.00 Arsenic (As) 1.00 1.00 Barium (Ba) 1.50 1.50 Iron (Fe) 8.00 8.00 Manganese (Mn) 1.50 1.50 Baron (B) 6.00 6.00 Chlorine (Cl2) 1.00 1.00 Source: PEPA 2012, notified on July 26, 2013. Solid waste. Industries generate both ‘nontoxic and nonpersistent’ and ‘toxic and persistent’ solid wastes. Most of the IEs have hired solid waste collection contractors for the disposal of ‘nontoxic and nonpersistent’ solid waste. Most of the solid waste is either collected by the contractor or reused and recycled by the firms themselves or sold by the firm to solid waste collection vendors. It is rare that the solid waste is indiscriminately disposed of within the IE. Contractors mostly dispose of the solid waste at the designated disposal site of the city/local government. Designated disposal sites are mostly dumping sites without proper arrangements, for example, for soil lining, solid waste sorting, leachate, and air emissions control. Solid waste from IEs is normally mixed with the municipal solid waste. There is no engineered sanitary landfill in Punjab or elsewhere in Pakistan. Poor management of disposal sites has resulted in the contamination of fresh groundwater resources and prime agriculture land. Leaching of heavy metals at disposal sites is one of the major reasons for groundwater contamination. Furthermore, open burning of industrial solid waste at low temperatures in disposal sites produces carcinogenic pollutants with serious public health implications. Indiscriminate disposal of hazardous solid wastes within firms or elsewhere is rare. There are privately owned and operated incinerators. Industries generating hazardous solid waste either REGULATORY ANALYSIS 25 have installed their own incinerators (mostly pharmaceutical firms) or hire the services of private incineration companies. Most of the private incinerators are in the city periphery, while a small number are located in some old IEs as most IEs do not allow the establishment of private sector incinerators in new IEs. Even though the public sector has no hazardous solid waste management facilities, those in the private sector are in need of improvement. The environmental controls of private incinerators are not satisfactory, with major problems in noncompliance to NEQS air pollution standards and incineration at lower temperatures. Environmental pollution control associated with hazardous waste is addressed in PEPA 2012 under Sections 13 and 14. Under Section 13 ‘Prohibition of Import of Hazardous Waste’, no person shall import hazardous waste into Punjab. Under Section 14 ‘Handling Hazardous Substances’, no person shall generate, collect, consign, transport, treat, dispose of, store, handle, or import any hazardous waste except under a license or in accordance with the provision of any other law or of any international treaty, convention, protocol, code, standard, agreement, or other instruments to which Pakistan is a party. According to the Hazardous Substances Rules 2003,10 under PEPA 1997, a license from the Federal or Provincial Agency will be required for the import and transportation of hazardous substances. The application for the license for industrial activity involving generation, collection, consignment, transport, treatment, disposal, storage, handling, or import of hazardous substances will also be accompanied with an EIA report and safety plan. The validity of the license will be for three years from the date of issue. The licensee will notify any major accident occurring at the licensed facility to provincial and federal agencies. There will be safety precautions for the premises and workers as well as packing and labelling requirements to be followed. The licensed facility may be inspected by the provincial or federal staff. Compliance to PEPA (2012) and the Hazardous Substances Rules (2003) needs to be strengthened. EPDs are not proactive, and they act only if complaints from communities and affected persons are issued. A study conducted by the Sustainable Development Policy Institute in 2012 identified 25 sites polluted by hazardous wastes in the province of Punjab.11 Detailed surveys are needed at the firm level and by sector in all the IEs to quantify hazardous solid waste generation. Air pollution is not a serious problem in the new IEs since heavy industries are usually limited or not present. More specifically, cement, iron and steel, fertilizer, sugar, power generation, and brickmaking are the major industry sectors that generate high levels of air pollution. These industries are not generally located in the IEs. Most of these industries also have air pollution control arrangements. Major sources of pollution from firms located in the IEs are power generators, boilers, and other combustion systems rather than main production lines. Two sets of air pollution standards are prescribed in PEQS: ambient air standards and industrial gaseous emissions standards. Ambient air standards are applied at the IE level, and industrial gaseous emissions standards are applied at the point sources located within the industrial unit. Annex 3 presents industrial gaseous emissions standards and Table 9 presents the ambient air standards in PEQS. New industries located in the IEs are required to prepare an EIA/IEE report for securing NOCs from the EPD as enforced in PEPA 2012. EIA/IEE reports should provide information on the ambient air status of the IEs in comparison to ambient air standards. The purpose of this information is to ensure 10 www.environment.gov.pk/images/rules/HAZRU03.PDF. 11 Khwaja, Shaheen, and Yasmeen 2012. 26 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 9. PEQS for air emissions Time-weighted Concentration in Pollutant Average Ambient Air (ug/m3) Method of Measurement Sulfur dioxide (SO2) Annuala 80 Ultraviolet fluorescence 24 hoursb 120 Oxides of nitrogen (NO) Annuala 40 Gas phase chemiluminescence 24 hours b 40 Ozone (O3) 1 hour 130 Nondispersive UV absorption method Suspended particulate Annuala 360 High-volume sampling (average flow matter (SPM) 24 hoursb 500 rate not less than 1.1 m3 per minute Respirable particulate Annuala 120 Preferably B-ray absorption method matter PM10 24 hoursb 150 Respirable particulate Annuala 15 Preferably B-ray absorption method matter PM2.5 24 hoursb 35 Lead (Pb) Annuala 1 Atomic absorption spectroscopy 24 hoursb 1.5 (AAS) method after sampling using EPM 2000 or equivalent filter paper Carbon monoxide (CO) 8 hoursb 5 Nondispersive infrared (NDIR) 1 hour 10 method Source: PEPA 2012, notified on July 26, 2013. Note: a. Annual arithmetic mean of minimum 104 measurements in a year taken twice a week 24 hourly at a uniform interval. b. 24 hourly/8 hourly values should be met 98 percent of the time in a year. About 2 percent of the time, it may exceed but not on two consecutive days. that the new industry’s expected gaseous emissions should not trigger an increase in the ambient air pollution levels. In addition, the EIA/IEE reports of the industries provide information on the estimated gaseous emissions from point sources. Existing industries located in the IEs are required to submit gaseous air monitoring data to the EPD. It is rare that any industry or IE does the ambient and gaseous emissions monitoring. The EPD mostly acts against the complaints for the specific industry. Takeaways: Wastewater, Solid Waste and Air pollution ASSESSMENT UNDER THE EIP FRAMEWORK Compliance to PEQS for air emissions and the safe disposals of wastewater, solid waste, and hazardous waste is mandatory for IEs and resident firms under PEPA 2012. The same is required under EIP Criteria. However, difficulties in enforcing the environmental laws have resulted in problems with compliance to the PEPA and EIP Criteria for most of the IEs. Even though the EPD and IEs react in case of accidents and complaints, an effective emissions monitoring system has not been yet developed by the EPD for IEs. Consequently, collecting consistent emissions monitoring data from IEs is not possible to monitor their performances. REGULATORY ANALYSIS 27 The EPD has identified potential interventions to increase its enforcement capacity and support IEs in prioritizing the development of infrastructures compliant with environmental requirements, such as installing WWTPs, solid waste collection and safe disposal facilities, and enabling air pollution monitoring. Due to the current development of IEs, most of the required infrastructures are at the feasibility study stage and struggle with funding since a public-private partnership (PPP) is an uncommon practice in Pakistan and still at an early stage of implementation. Among the basic services rendered by IEs, solid waste collection represents issues especially due to the lack of extended responsibility on the contractors at the final stage of waste disposal in the absence of sanitary landfills in the country. IEs are struggling to ensure the enforcement of environmental requirements at a firm level. SIE is collaborating with the EPD to suspend provided basic services to resident firms not adhering to the environmental law. It is a preliminary step to address the problem but does not solve the necessity of developing IEs structurally so that the legal requirements are in place and operational. For wastewater treatment, it is mandatory for all the resident firms to install WWTPs in the absence of a CETP at the IE level. However, it is difficult to spare land for WWTPs (effluent treatment plants [ETPs]) in small plot sizes and only possible for the resident firms located on large plot sizes. In SIE, for example, this can only apply to PEPSICO and NESTLE, as the plot sizes of other resident firms are in the range of 1–3 acres. For this reason, effluent treatment at IEs should be promoted and coordinated through an affordability analysis to optimize contribution by resident firms, whose costs would be reduced by a CETP due to economies of scale. A few industries in IEs generate wastewater with higher concentrations of heavy metal than is permissible by PEQS. These industries should install heavy metal recovery plants within their facilities to reduce pollution and a potential operational cost burden on the provisioned CETP. Recovery plants require comparably small areas and offer good payback periods owing to the created economic value achieved by recovery. Enabling Actions Potential areas of intervention could be the following: • IEs should focus on and start to fulfill the commitments made in the EMPs of EIAs and IE master plans to comply with the conditions established in the NOCs, PEPA 2012, and LGA 2013. • Develop waste treatment and management systems for all type of waste streams (water, air, and solid) fully supported by a comprehensive monitoring system. • Enforce PEQS for air pollution, heavy metals, and hazardous waste at the industrial unit level. Such industries should be regulated as per the requirements of PEPA 2012. • IEs should effectively coordinate with the EPD and development authorities/local governments to use the legal powers mandated under PEPA 2012 and LGA 2013 enforcing industries to comply with PEQS and contribute proportionately to the establishment of environmental infrastructure and services along with mandatory performance reporting to IEs, the EPD, and local governments. • IEs should take persistently noncompliant resident firms to court as per the provisions of PEPA 2012 and LGA 2013. • The capacity of IEs, BOM, resident firms, the EPD, and development authorities/local governments needs to be substantially enhanced to implement these recommendations. 28 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 1.4 Environment: Circularity and Industrial Symbioses Circularity and industrial symbioses are already relatively developed in Pakistan’s industrial sector, primarily through the reuse and recycling of valuable industrial waste. Pakistan’s firms operate in competitive national and international markets. Circularity and industrial symbioses not only contribute to resource efficiency and environmental compliance but also increase the competitiveness of the firms. Most of the circularity and industrial symbioses happen under market mechanisms without regulatory arrangement. PEPA 2012 covers recycling, reuse, and environmental pollution controls of hazardous waste under Section 14, ‘Handling Hazardous Substances’: no person shall generate, collect, consign, transport, treat, dispose of, store, handle, or import any hazardous waste except under a license or in accordance with the provision of any other law or of any international treaty, convention, protocol, code, standard, agreement, or other instruments to which Pakistan is a party. According to the Hazardous Substance Rules 2003, under PEPA 1997, a license from the Federal or Provincial Agency will be required for the import and transportation of hazardous substances. The application for the license for industrial activity involving generation, collection, consignment, transport, treatment, disposal, storage, handling or import of hazardous substances will also be accompanied with an EIA report and safety plan. The validity of the license will be for three years from the date of issue. The licensee will notify any major accident occurring at the licensed facility to provincial and federal agencies. There will be safety precautions for the premises and workers as well as packing and labelling requirements to be followed. The licensed facility may be inspected by the provincial or federal staff. Recently, the Appraisal Document of the World Bank-financed Punjab Public Resource Management Program assessed that no regulation in Pakistan, except for hazardous waste, covers the management of recycling and reuse of ICT waste. There are no impediments by law that deter or encourage firms to nonhazardous exchange waste. There is limited circularity and industrial symbioses within IEs. Most industrial waste in the form of metal, plastic, paper, and glass is recycled and reused. Moreover, most resident firms directly sell recyclable and reusable solid waste to recycling contractors, with the majority of these activities happening in the informal sector. Therefore, environmental controls and monitoring of circularity and industrial symbioses remain limited. Moreover, industrial symbiosis networks in IEs could be difficult to be established due to the lack of trust among companies. The IE operators should play a critical role in supporting tenant firms to collaborate and exploit potential synergies. A preliminary survey of the World Bank team on SIE reported some circular economy activities in the IE: • For instance, a glass/aluminum manufacturer has established a buyback scheme with the suppliers of the machinery used for extrusion, cutting, and chemical treatment of aluminum beams. The innovative aspect of this arrangement is that the manufacturers of the machines provide updates and improvements under a service contract. In case the energy efficiency performances of the machines are lower than any new model launched by the machine manufacturers, the buyback clause can be activated. The replacement of the machines causes 15 days of disruption in production that can be managed through their stock. The circular strategy is to extend the life cycle of the machines while the buyback scheme allows the machine manufacturer to sell the REGULATORY ANALYSIS 29 used equipment on a secondary market with an additional warranty. It is a win-win approach that maximizes sustainability by ensuring high levels of energy efficiency and reuse of products. • Another example is a polyester fiber producer that uses only recycled plastics to make carpets and filler for mattresses and pillows. More than 15 tons per day of recycled plastics are converted each day into new products. • A third manufacturer has launched last year a production line of handles for bags from recycled plastics. • A last one is an international chemical company that implements circular economy strategies for resource efficiency (from energy to water to recovery of material). The most innovative strategy it has in place is to collect used drums (hazardous waste) from clients to be refilled and reintroduced in the value chain. Opportunities for reuse of wastewater after tertiary treatment are limited due to heavy cost of treating the wastewater and bringing it to the required quality of intake water for production processes. Industrial wastewater after tertiary treatment can be used for horticulture, but these opportunities also cannot be materialized in the absence of CETPs in IEs. There are opportunities for reusing wastewater for the same production process or other production processes after meeting requirements within the firms. Many industries are practicing water conservation measures such as batch washing in textile industries, where wastewater from the last batch of cloth cleaning is reused for the next batch. Another example is sugar mills, where large amounts of wastewater from evaporators is marginally contaminated with nutrients and is then used for irrigation and horticulture. Many industries in the textile sector have modernized their systems to make use of their hot wastewater by reusing it in downstream production processes or by extracting its heat through heat exchangers. Many industries are using the steam multiple times in their production process. Takeaways Circular Economy and Industrial Symbiosis ASSESSMENT UNDER THE EIP FRAMEWORK Circularity and industrial symbioses are key operating areas in IEs promoted by EIPs. Pakistan’s industry sector and IEs offer many opportunities for further development and adoption of these activities. Examples presented above establish that circular economy is not an abstract concept in Pakistan’s industry sector and IEs, and it is in practice under innovative arrangements. Companies in Pakistan are operating in challenging markets and aim at increasing their competitiveness as well as putting in place strategies to reduce costs (energy/water/material consumption), create added value from additional streams of revenue (by-product/waste/waste heat), and increase synergies with other companies to maximize the use of assets (shared utilities such as steam, CO2, process water, and renewable energy). Circularity and industrial symbioses will be best utilized by implementing lease and buyback mechanisms, establishing marketplaces for waste exchange, qualifying buyers of waste for further use and processing, and so on within and outside the IE. As circularity and industrial symbioses are not regulated by the EPD, Pak-EPA, and IEs except for hazardous waste, there is a need to develop an effective framework for circularity and industrial symbioses to mitigate environmental and social impacts and systematically instill and encourage the industries to tap into industrial symbiosis practices while increasing competitiveness. 30 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Enabling Actions Potential interventions to support the development of a circular economy for IEs are summarized as follows: • Develop a profile of existing circularity and industrial symbioses activities and assess the potential of scaling them up within and outside of each IE of the country. • Each IE needs to prepare a five-year Circularity and Industrial Symbiosis Plan inclusive of environmental and social frameworks. • A technology and business model exchange platform at the IE level can streamline cross-company exchanges, capacity building, innovation, and identification of potential synergies in a more systematic manner. This platform can be piloted at one IE and replicated in others by reflecting lessons learned. 1.5 Environment: Resource Efficiency and Cleaner Production Resource Efficiency and Cleaner Production (RECP) is a continuous application of preventive environmental and resource efficiency strategies to processes, products, and services to increase efficiency and reduce risks to humans and environment. RECP is incorporated in a number of policies in the country. National Water Policy 2018 addresses water system efficiencies, specifically industrial water efficiency and rainwater harvesting, while Textile Policy 2014–2019 seeks to increase the competitiveness of textile mills through the adoption of energy efficient techniques and technologies. Climate Change Policy 2014–2030 specifies many RECP priority actions, and the National Climate Change Policy 2012 promotes RECP and energy efficiency auditing in the industrial sector. Punjab Growth Strategy 2014–2018 recognizes the need to promote energy efficiency and conservation, including energy audits, development of standards and labelling, and private sector incentives for energy efficiency. However, an analysis of these policies reveals a piecemeal approach to RECP. RECP as a policy and practice is never specially identified, though the need for cleaner production and efficiency is stated.12 There is no specific federal or provincial legislation that demands the adoption of RECP by industries and IEs. Pakistan Climate Change Act 2017 and NEECA 2016 contain several provisions which would allow the government to hold the power to implement RECP. NEECA 2016 focuses on three areas of production facilities: industrial processes, appliances and equipment, and buildings for energy efficiency and conservation purposes. Many clauses in NEECA are relevant to RECP, addressing the energy auditing of the industries and buildings and manufacturing of energy efficient appliances and equipment. However, PEPA 1997 and PEPA 2012—the two major environmental legislations in the country and the province—do not cover RECP. The IEE/EIA does not cover RECP either. Consequently, there is low capacity in the federal and provincial EPAs/EPDs for the promotion and implementation of RECP.13 12 Alam 2018. 13 Frost and Sullivan 2017. REGULATORY ANALYSIS 31 The export industry has ample experience in the implementation of RECP practices. For example, leather and textile sectors have implemented many RECP projects in the last 25 years, financed predominantly by the Governments of the Netherlands, Norway, and Germany; European Union; UNIDO; US Agency for International Development (USAID); World Bank; International Finance Corporation (IFC); and Japan International Corporation Agency (JICA). In addition, the sugar and paper sectors also have good experience with implementing RECP. A major driver behind RECP uptake is the linked attractiveness of financial returns. Energy efficiency measures are more attractive to industries because of short payback periods. The following are the most common energy efficiency technologies and measures adopted by industries in Pakistan: Electrical Efficiency • Installation of energy efficient motors • Installation of variable speed drives at electricity motors • Installation of energy efficient lighting • Installation of servo motors at sewing machines • Installation of captive power plants. Thermal Energy Efficiency • Installation of waste heat recovery boilers (to recover energy from the flue gases of generators and produce steam) • Waste heat recovery from hot wastewater by installing heat exchangers • Waste heat recovery from stenters • Installation of automatic oxygen trim controller at boiler stacks to improve boiler efficiency • Installation of economizers at boilers’ stacks to recover waste energy. Due to the lax enforcement of environmental laws in the country and lack of adequate incentives, the uptake of cleaner production technologies remains limited despite the progress in some more advanced firms. Industries in Punjab kept on overutilizing water in the past owing to easy access to water at low costs. Punjab industries have recently started facing water shortages. Shortage of water and increasing energy costs of pumping have pushed industries in Punjab to adopt water efficiency. Contrarily, industries are proportionately more water efficient in Sindh, where water is relatively expensive, and shortage of water is a permanent feature of water supply systems. The following are the most common water efficiency technologies and measures adopted by industries in Pakistan: • Reuse of cooling water from different equipment • Countercurrent washes at continuous washing machines • Reuse of concentrate (reject) stream from reverse osmosis (RO) plants at wet scrubbers • Water consumption metering and wastage control • Reuse of vapor condensate and condenser water of caustic recovery plants • Reuse of washes of one process into other process washes • Reuse of water lock water from pad steam dyeing machine • Installation of automatic water shut off valves at process machines • Use of treated process water to reduce chemical consumption. 32 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB International buyers and industrial certifications also triggered the export industries to comply with codes of conduct and international sustainability standards. RECP is one of the requirements to move toward these codes and standards. Most of the multinational corporations have also adopted RECP in line with the requirements of their corporate principals, while industries involved in the production for the domestic market are not yet keen to adopt RECP. There are three cleaner production centers (CPCs) in Pakistan, all in the private sector. CPCs are supporting industries to implement RECP. These include ‘CPI-Lahore’, ‘National Cleaner Production Center (NCPC)-Attock’, and ‘CPC-Sialkot’. CPI-Lahore and NCPC-Attock cover a broad range of different industries whereas CPC-Sialkot is only focused on the tanneries of the Sialkot region. CPI- Lahore has executed about 10 RECP projects in Pakistan for different industrial sectors including textile, tannery, paper, and sugar, funded by the Embassy of the Kingdom of Netherlands (EKN). Another one of CPI-Lahore’s projects, the compilation of 10 years of RECP work of the CPI in Pakistan in a study called ‘Sustaining Growth: Cleaner Production in Pakistan,’ was supported by IFC. The study found that manufacturers operating in the four industries of textile, sugar, paper, and tanneries implemented energy saving recommendations and have reduced energy consumption by more than 287,000 megawatt hours (MWh) annually. By adopting other energy efficient practices recommended by the CPI, energy consumption in these industries could be reduced by more than 3.7 million MWh annually, equivalent to saving more than US$76 million in energy costs, 650 MW installed power, or about 25 percent of the annual electricity consumption of the city of Karachi. Major RECP measures implemented by the industries are related to energy efficiency, water efficiency, chemical recovery, and pollution control. As mentioned earlier, energy efficiency measures are the most preferred applications. While water efficiency measures do not have short payback periods, they are being increasingly prioritized due to water stress and linked pumping costs. Pollution control measures are mainly implemented for compliance with international standards and codes. It is well established in Pakistan and Punjab that RECP practices and technologies offer good potential for abating and controlling pollution at source, improving resource efficiency and protecting human and natural resources from environmental risks. Outreach of RECP is predominantly to the medium and large enterprises, with a major share represented by exporting industries. Small and medium enterprises (SMEs) are yet to be mobilized and engaged by the CPCs and EPDs in Pakistan and Punjab. A major barrier faced by SMEs in adopting RECP is the cost implication of the adopted RECP technology. For example, the price of Efficiency-III motors and pumps is about three times the cost of conventional energy-fueled inefficient motors and pumps. Therefore, SMEs have mainly chosen to adopt energy efficiency in their lighting by switching to energy efficient lights. To promote RECP, the CPI PISD from 2007 to 2013 engaged SIE and Quid-e-Azam Industrial Estate, most of whose resident firms are SMEs. The CPI concluded that the most common barriers in the adoption of RECP in SMEs are as follows: no legal coverage of RECP, lack of awareness about RECP, lack of required capital for investing in RECP-related equipment and services, unavailability of skills to implement and operate RECP, and limited availability of RECP technologies. This indicates that since most of the industries are newly built in new IEs, there is an opportunity for the industries to opt for production processes that have built-in RECP. RCEP performance benchmarks achieved by the abovementioned projects in Pakistan are summarized in Table 10. REGULATORY ANALYSIS 33 TABLE 10. Performance benchmark of RECP in Pakistan Performance RECP Benchmark (%) Energy efficiency - electricity 5–15 Energy efficiency - thermal 10–30 Chemical recovery 90–95 Water efficiency - Punjab 10–15 Water efficiency - Karachi 15–30 Raw material and other inputs efficiency 10–15 Air pollution control - clean fuel and efficient combustion (combustion efficiency) 5–10 Air pollution control - scrubbers (particulate matter removal efficiency) 80–90 Source: CPI database. Takeaways: Resource Efficiency and Cleaner Production ASSESSMENT UNDER THE EIP FRAMEWORK In Punjab, RECP is considered a predominantly volunteer action of the industry in the absence of a legal framework. While RECP of heavy metals is covered by PEPA 2012 and RECP of energy efficiency by NEECA, both legislations are facing limited enforcement. RECP experience in Pakistan is mostly with medium and large industries. SMEs serving the domestic market are the least interested sector in RECP. Major barriers in the adoption of RECP are as follows: • Low level of awareness among industries in general, particularly SMEs • Low legal coverage and poor enforcement • Shortage of capital for buying resource-efficient appliances and technologies • Limited availability of right RECPs, particularly for SMEs • Lack of capacity particularly in SMEs to implement and operate RECP. New IEs and industries are better placed to adopt built-in RECP technologies in production processes and efficient appliances. Based on the experience of RECP in Pakistan and the achieved performance benchmarks, RECP offers good and financially attractive opportunities for firms to promote and implement RECP within IEs. Adoption of RECP at the IE level will enable industries to become competitive, partially NEQS compliant, and environmentally friendly. Enabling Actions The following are the enabling actions to be followed: • Prepare and promote RECP guidelines for different industrial sectors of the IEs, based upon international best practices and the local case studies. • Include implementation of RECP in the IEs bylaws and agreements with resident firms. • IE Environmental and Social Cells offer the technical services for environmental and energy auditing, RECP designing, and implementation in collaboration with CPCs. • IE Environmental and Social Cells organize RECP awareness campaigns and regular training workshops to educate industries in collaboration with CPCs. 34 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 1.6 Environment: Energy Management Pakistan remained an energy scarce country for quite a long time. The cost of energy is comparatively high in Pakistan. This resulted in the adoption of energy efficiency technologies and measures by almost all categories of industries. It is only in recent times that Pakistan‘s energy supplies have stabilized. Pakistan Energy Yearbook 2018 states that the total energy consumption in Pakistan was about 55 million TOE against its total energy supplies of about 86 million TOE. The sourcewise contribution of oil, gas, coal, electricity, and liquefied petroleum gas (LPG) in the energy consumption is 35.7, 30.4, 16.3, 15.8, and 2.5 percent, respectively. About 66 percent of the energy consumption sources are oil and gas (excluding consumption for power generation).14 The industrial sector is the biggest consumer of energy in Pakistan, with a share of 37.46 percent, followed by the transport sector with 33.90 percent and the domestic sector with 21.20 percent. The commercial, agriculture, and government institutes sectors only consume a sum of 7.44 percent of the energy. Coal is the major source of energy in the industry with a share of 43.39 percent in the total industrial energy consumption. Gas is the second biggest source of energy after coal with a 37.08 percent share, whereas electricity and oil consumption contribute 19.53 percent. During 2017/18, 131,275 GWh electricity was generated (6.6 percent increase from the last year). Overall electricity consumption in all the sectors was 106,927 MWh (10.66 percent increase from the last year). As per these figures, there was no power shortfall in the country during 2017/18. Coal and natural gas are mostly used for powering steam boilers and other heat sourced thermal production processes. Industry faces shortage of natural gas every winter. During winters and other natural gas shortage times, industry shifts to alternate energy sources, that is, furnace oil, biomass (rice husk, wheat straw, corn cob, wood), coal (mostly imported), and LPG. Boilers are one of the major energy-consuming equipment. Industries have installed local/imported biomass/coal-fired boilers. Imported boilers mostly come from China and have greater energy efficiency than the local manufactured boilers. Independently from the manufacturer, the trend to retrofit biomass/coal-fired boilers into gas-fired boilers did not result in any significant improvements of the efficiency. As an alternative to grid electricity, large firms have installed coal-based power plants. SMEs were using diesel-based generators to produce electricity, which is three times costlier than the national grid electricity. Electricity from the national grid and energy from natural gas are low cost and the cleanest sources of energy. Alternative energy technologies and fuels such as coal, biomass, furnace oil, and diesel are not only expensive (high capital and operational costs) but also pollution intensive. Diversified sourcing of energy made it awfully expensive for the industry. This situation pushed the industry to opt for energy efficiency technologies and measures. Few export industries acquired15 ISO 50001 Energy Management System Standard certification to appease customer requirements for energy management. NEECA states that the federal government may issue an energy-saving certificate to a designated consumer whose energy 14 International Energy Agency, Country Profile, Pakistan, https://www.iea.org/countries/Pakistan. 15 In 2018, only 13 companies were certified ISO 50001. Source: ISO Survey of Certifications to Management System Standards - Full Results. REGULATORY ANALYSIS 35 consumption is less than the prescribed norms and standards in accordance with the procedure as may be prescribed. The consumer whose energy consumption is higher than the prescribed norms and standards shall be entitled to purchase the energy saving certificate to comply with prescribed norms standards. IEs also adopted energy efficiency measures by shifting to energy efficient streetlights and office buildings. No IEs in the country have adopted energy management system (EnMS) for targeting energy efficiency at the IE level. 1.6.1 RENEWABLES Renewable sources of Pakistan are wind energy, solar energy, hydro power, and biomass. There are two types of solar technologies: solar thermal and solar photovoltaic (PV). Solar thermal technology utilizes solar energy to heat fluids (water and air) and solar PV uses solar energy to generate electricity. Pakistan has a huge potential of energy generation from solar PV due to rich insolation. There are a number of schemes regarding renewable energy (RE) generation. The Policy for Development of Renewable Energy for Power Generation states that RE-based power plants (small hydro of an installed capacity at 50 MW or less, solar PV and thermal energy for power generation, wind power generation, bagasse/biomass/waste to energy, bioenergy) will be facilitated for registration in the Clean Development Mechanism (CDM) and enjoy the benefit of having all of their generated power bought by distribution companies. For direct sales, they shall be required to pay ‘wheeling’ charges for the use of the transmission and/or distribution network used to transfer the power from the plant to the purchaser. Renewable energy power projects will also enjoy fiscal and financial incentives such as no customs duty or sales tax for machinery equipment and spare parts for the initial installation and subsequent balancing, modernization, maintenance, replacement, or expansion; exemption from income tax including turnover rate tax and withholding tax on imports; permission to issue corporate registered bonds; and permission to issue shares at discounted prices. Regarding wind energy, there are the following economic incentives for wind-based independent power producers (IPPs): (a) guaranteed electricity purchase, (a) attractive tariff (cost plus 17 percent return on equity [ROE]), indexed to inflation and exchange rate variation (PKR/US$), (c) euro/dollar parity allowed, (d) carbon credits available, (e) no import duties on equipment, (f) exemption on income tax/withholding tax and sales tax, (g) repatriation of equity along with dividends freely allowed, and (h) permission to issue corporate registered bonds. State Bank of Pakistan (SBP) also has a Scheme for Financing Renewable Energy Power Plants that allows financing up to PKR 6 billion for each renewable energy power plant project with a capacity ranging from 1 MW up to 50 MW for own use or for selling electricity to the national grid, distribution companies, or a combination of both. SBP Refinance Scheme will be up to 100 percent of the total financing (debt) of an eligible renewable energy power project of up to 20 MW and up to 50 percent financing (debt) of those more than 20 MW. The Net Metering (NM) Policy of the Alternative Energy Development Board enables renewable energy facility owners to offset the electricity they consume during off-peak hours or when the production of their renewable energy facility is insufficient for their consumption. Renewable energy facility owners will either pay a reduced utility bill or get paid for the excess energy exported to the grid, as stated in the contract with the relevant distribution company. 36 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Solar PV and biomass fuels are the only renewable energy sources used by industries in Pakistan. Solar PV is used by a small number of firms to supplement the other power sources in. Only large- scale firms are installing solar PV power plants at an installed capacity of 1 to 3 MW, which contributes to only 2 to 5 percent in the total power generation. Some medium enterprises are also using small- scale solar PVs below 1 MW installed capacity. The factors responsible for poor uptake of solar PV technologies among industries are the need for high capital to invest, large land area requirement, substandard technology, operation and maintenance issues, and a lack of expertise on solar technologies and operations in the country. Solar thermal use is also limited in the industrial sector due to the abovementioned factors. The available conventional solar thermal technologies are not as per industrial demand due to poor performance and low output. However, sophisticated solar thermal technologies with high fluid temperature output and less space occupancy are not available in Pakistan. Biomass is used as fuel in some industries, mainly in their steam boilers. Biomass consists of rice husk, wheat straw, corn cob, wood, and bagasse. Generally, these biomass inputs are leftovers from agricultural processes. Bagasse is a byproduct of sugar mills, leftover from sugarcanes after juice extraction. It is mainly utilized as fuel for boilers in sugar mills and only the surplus quantity is sold to other industries. As biomass availability depends upon the season of the specific crop, the industries do not rely on one type of biomass and shift to different biomasses in different seasons. IEs are not exploiting the renewable energy resources. Solar PV can be a good source for the street lighting in IEs to pilot the technology to scale up for different purposes in future. 1.6.2 FOSSIL FUEL Industries commonly use the following fossil fuels in their production processes, power houses, and utilities: • Coal • Furnace oil • Natural gas • Diesel • LPG. Coal is mainly utilized as fuel for steam boilers, heaters, and furnaces. Coal is mostly imported from different countries like South Africa, Indonesia, and Afghanistan. Local coal consumption is limited due to its poor quality (presence of high sulfur contents and ash) and low heat content. Disposal of coal ash, that is, bottom and fly ash, is a challenge for the industries, and the commercial reuse of ash is not established successfully. Furnace oil is used as fuel for steam boilers and power plants. Furnace oil is locally available, but its industrial use is limited due to its high cost and operational issues. Natural gas is used as fuel in boilers, process equipment, furnaces, heaters, and power houses. It used to be highly preferred in the industry due to its low cost, high heat content, clean characteristics, operational ease, and availability. Because of the present gas shortage in the country, industries are looking to diversify their energy sources away from natural gas due to its inconsistent availability, interrupted supply, low supply pressure, and high price. Industries currently have multiple fuel systems which are switched regularly depending upon the availability and costs of the fuel. REGULATORY ANALYSIS 37 Diesel is mainly used in diesel generators to produce electricity as an alternative source for grid supply or captive power plants based upon gas, furnace oil, coal, and biomass fuels. Diesel generators are the last resort for the industry and are only used for emergencies due to their extremely high cost of electricity generation compared to other fuels. However, the small industries rely mainly on the grid for their electricity supply and do not have another option for electricity generation other than diesel generators. LPG is an alternate fuel for natural gas. LPG is mostly used in case of natural gas shortage or low pressure by industries with only natural gas systems. Natural gas-based systems have been modified to accommodate LPG as per the requirements. Boilers and pressure vessels, backup power systems, and combined heat and power (CHP) plants are the major fossil fuel consumers in the industry. Boilers and pressure vessels must be registered for operation for 12 months under the Boilers and Pressure Vessels Ordinance 2002. Every 12 months, the boiler is inspected by an inspector as part of safety checks and is allowed to operate for the next 12 months. Backup power systems and CHP plants, however, are not required to get any license or permission from any authority. For gas engines, firms need to apply for a separate electric meter designated only for gas-based power generation. 1.6.3 ENERGY EFFICIENCY As mentioned earlier, industries in Pakistan are aware of energy efficiency measures and have taken various energy efficiency initiatives to reduce their energy consumption. Major drivers are energy shortages for prolonged periods, high energy prices, and attractive paybacks. Thermal energy efficiency measures such as waste heat recovery from high temperature flue gases and hot wastewater are more popular. Electrical energy efficiency measures generally consist of the installation of energy efficient lighting, energy efficient motors, and variable speed drives. Energy efficiency is generally the priority of large-scale firms, multinational corporations, and the export industries. Local SMEs are lagging in energy efficiency initiatives due to the lack of capital and technical know-how. Energy efficiency is regulated under NEECA16 in Pakistan, while implementation is delegated to the provincial level as relevant. This act has recently been promulgated and will take time to become functional and effective for energy efficiency enforcement in the country. The industrial sector is taking energy efficiency initiatives on its own without any legal compulsion from the government. Takeaways: Energy Management ASSESSMENT UNDER THE EIP FRAMEWORK Industry is one of the major consumers of energy in Pakistan. Fossil fuels (oil, coal, and natural gas) are the main contributors to energy production in the industrial sector. The coal used by the industry is mostly imported, which is relatively clean compared to local coal. Carbon emissions and environmental risks of coal-sourced energy are high. One of the biggest consumers of coal- and 16 The World Bank has supported the establishment of https://peeca.punjab.gov.pk/. 38 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB natural gas-based energy within the industrial sector is steam boilers. Improvement of energy efficiency of boilers will substantially contribute in saving energy and reducing carbon emissions. In Pakistan, the industry sector has a share of 43 percent in energy consumption.17 Renewable energy is adopted by the industrial sector to meet the electricity gap. Solar PV and biomass are relatively more popular sources compared to solar thermal. Even though the levelized cost of energy for renewables is competitive in many countries, the lack of incentives in Pakistan for capital investments is curbing the adoption of these green solutions at the industry level. Other sources of energy for the industrial sector in Pakistan are furnace oil, diesel, and LPG. Furnace oil and diesel are expensive sources and are only used in specific conditions. LPG serves as an alternative to natural gas. As bulk buyers of electricity from energy service companies (ESCOs), IEs developed and successfully implemented electricity load management systems based on the availability of electricity during day and night times. Dividing firms into either day or night operations, this system enables firms to keep their operations running. Regarding energy efficiency, IEs use only solar PV for street lighting and, in few cases, buildings. However, IEs do not have long-term energy generation and consumption plans at the IE level. No initiatives were taken to create opportunities for common energy and heat exchange networks, and no performance standards were established with respect to energy footprints per unit of production of IEs. Enabling Actions IEs are in the best position to become hubs of development and implementation of efficient and clean EnMSs. The following enabling actions are proposed for IEs: • Develop a comprehensive clean and efficient EnMS that comprises reduced shares of coal, furnace oil, and diesel and increased shares of national grid electricity, natural gas, LPG, and renewables. • Develop an energy monitoring and management system for resident firms. The system can include energy auditing, establishing performance standards of common energy appliances and equipment (boilers, motors, pumps, and so on) and standards for energy supply networks (electricity and thermal) as per international best practices and national and provincial legislation. • Conduct a research project for establishing the natural and strategic penetration of renewable energy sources at the IE and firm levels. 1.7 Social: Occupational Health and Safety Factories Act 1934 and Provincial Occupational Safety and Health Acts (the Punjab Occupational Safety and Health Act 2019 and the Sindh Occupational Safety and Health Act 2017) are the governing laws for occupational health and safety (OHS) in the country. Factories Act 1934 mainly covers OHS (Chapter III) and labor standards (other chapters) requirements for industrial operations. The Department of Labor, Punjab, is the enforcement agency for the implementation of OHS laws. Relevant functions of the Labor Department include health management of labor, protection of rights of labor, protection of health and safety of labor, and prevention of child labor. Labor inspectors sent by the department periodically visit firms to monitor their OHS preparedness. In IEs, OHS monitoring 17 Pakistan Year Book 2016. REGULATORY ANALYSIS 39 is done by the Department of Labor, Punjab, in coordination with IEs. Importantly, the department lacks human and logistical resources for the monitoring of industries in Punjab Province. OHS is relevant both at the industrial unit and IE levels. PIEDMC and FIEDMC, for example, have established firefighting services and medical emergency services, prepared disaster management plans to manage natural and human-made disasters, conducted trainings and drills, and designated safe locations in case of emergency and disaster. OHS conditions have also been included in the contractors’ agreements. At the IE level, Environmental and Social Cells, grievance cells, and security departments have been established. However, operationally, the conditions in PSIC IEs are not satisfactory. OHS status varies in resident firms. Industries with progressive managements have established mechanisms such as internal firefighting systems, provide first aid services, provide personal protective equipment (PPE) to staff, designate safe locations within the industry, and conduct OHS training and drills. Export industries mostly have good OHS practices due to international buyers’ pressure and compliance with their ethical business code of conducts. Export industries, besides multinational corporations and large-scale manufacturers, mostly have OHS certification OHSAS 18001, though there may be some compliance issues. It is common for workers to be forced to adhere to using safety equipment during compliance audits in contrast to these practices being compromised or overlooked ordinarily. Conditions in many other resident firms are not satisfactory. In the past, some disastrous accidents exposed the unsatisfactory conditions and unpreparedness of resident firms. For example, a multistory plastics firm located in SIE collapsed in November 2015. About 50 persons died and many were injured. The main reported reason behind the collapse of the building was that the contractor did not follow best OHS and construction practices. The army rescue services were called for support as SIE’s own rescue services were not enough for the timely evacuation of the victims. Generally, records about the number of injuries, occupational diseases, absenteeism, and work-related fatalities are not kept by IEs, the Department of Labor, or resident firms. The following are the major issues of OHS in IEs and resident firms: • Record-keeping of accidents by the Department of Labor, IEs, and resident firms is limited. • Maintenance of OHS equipment and enforcement of OHS practices are often ignored by resident firms. • Frequent OHS trainings are not organized. • Contractors and owners ignore OHS and bylaws standards during construction. • There is lack of systematic monitoring by IEs and the Department of Labor. Takeaways: Occupational Health and Safety ASSESSMENT UNDER THE EIP FRAMEWORK • OHS legislation is comprehensive, but its enforcement is weak due to the low capacity of the Department of Labor and IEs. • Status of OHS is much better in new IEs where most of the OHS infrastructures (for example, medical centers and fire fighters) have been provided and services are available. 40 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB • The performance of large and multinational companies is relatively better for OHS legal and voluntary compliances. • A large number of medium firms, particularly SMEs, are lacking in the provision of OHS equipment, PPE, and support services. • IEs and the Labor Department lack a systematic monitoring approach. • There is a general lack of OHS understanding and capacity in resident firms. Enabling Actions Following are the enabling actions to be followed: • IEs should develop their own system for OHS compliance and monitoring and accordingly develop capacity and coordinate effectively with the Department of Labor. • Conduct periodic trainings and drills to ensure that the OHS equipment and systems have been provided and are in working order at the operational level. • Organize OHS awareness campaigns to mobilize and engage SMEs and offer handholding by providing on-the-job OHS trainings to SMEs. • Develop and update Disaster Management Plans based on the experiences in the country. REGULATORY ANALYSIS 41 2 Institutional Analysis 2.1 Industrial Estate Governance Mechanism IE development in Pakistan has a long history of successes and failures. Frost and Sullivan (2017) recommends that “the governance of industrial zones is equally important as the quality of infrastructure in ensuring success. Key governance capabilities need to be built from foundations of institutional autonomy and authoritative power of a zone authority.”18 In Pakistan, the following three types of institutions are involved in taking decisions about IEs: (a) Policy and administrative approvals The PCP and Economic Affairs Division at the national level, and P&D/P&D Board and DOI at the provincial level are the leading policy-making and administrative approvals institutions for IE establishment. As discussed earlier in this report, these institutions follow a comprehensive administrative and legal system predominantly covering the economic, environmental, and social aspects (except RECP) while taking IE investment decisions. In practice, however, these legal and administrative systems were not followed strictly. This resulted in the establishment of many failed or partially successful, with low occupancy rates in the provinces (see Figure 5). The establishment of the many unsuccessful IEs is due to decision-makers putting multiple social (poverty alleviation, employment, and so on) and political (spatially distributive, politically acceptable, and so on) objectives first, without taking the industrialization demands into account. As evidenced by experience, IEs become successful if they are geographically close to central markets, are fully supported by stakeholders, offer good infrastructure services, and have backward and forward links within the economic system. Successful delivery of these factors depends on the capability of the decision-makers. Figure 5 shows that IEs established under the above-stated conditions are successful in achieving their objectives. Diagnosis of policy and administrative approval institutions under the EIP Framework reveals that the following features are missing: • Social: Engagement of private sector stakeholders and civil society • Environment: Incorporation of climate change adaptations and commitments, green supply chain, and resource management and conservation • Economic: Links with outside communities, sources of knowledge and technology transfer for best practices, and resource efficiency and productivity. 18 Frost and Sullivan 2017. INSTITUTIONAL ANALYSIS 43 FIGURE 5. Average colonization rates of industrial zones 2.0 High supply of land but low High supply of land and high Average Colonisation = 58.5% colonization rate colonization rates 1.8 IZ acres per total number of factories by district Multan Faisalabad 1.6 1.4 1.2 Rahim Yar Khan Average acreage per 1.0 Lahore factory = 0.89 Sargodha 0.8 Low supply of land but low Low supply of land and high colonization rates colonization rates 0.6 Kasur Trend line Khanewal Jehlum 0.4 Sialkot Rawalpindi Gujranwala 0.2 Sahiwal Gujrat Chakwal Bahawalpur 0 10 20 30 40 50 60 70 80 90 100 Average colonization rates of IZs by district in Punjab* Source: Frost and Sullivan 2017. Missing features can be easily incorporated in the existing legal and administrative approval systems. It is important that features are focused and practiced after incorporation into the system. (b) Development and management companies IEs come into action after the administrative approval of the IE feasibility. The performances of PIEDMC and FIEDMC establish that these are capable companies and offer good opportunities to take up the EIP objectives. Their organizational structures, rules of business (functions), and bylaws are comprehensive and well developed. Environment and social functions are essential parts of their organizational structures and rules of business. IEs have established BOMs (comprising representatives of resident firms) to ensure the stakeholders empowerment and engagement. The practice is to establish BOMs in those IEs which are colonized in the range of 30–50 percent, that is, BOMs of SIE and Quaid-e-Azam Industrial Estate. BOMs are responsible for the operations of IEs and the management of social (women and grievances) and labor issues. BOMs coordinate with the Provincial Labor, Women, and Environmental Protection Departments for the execution of these functions. Specific clauses and subclauses relevant to social and environmental operational issues are included in the BOM Rules of Business 2011 (amended 2015). A major limitation of IEs is that they could not succeed in establishing common environmental infrastructures such as CETP and hazardous waste facilities, effective monitoring of the environmental and social compliances of resident firms, and strong incentivization of RECP and circularity for tenant companies. 44 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB (c) Regulator (permits) institutions The major regulator institutions for issuing permits and IE monitoring are environmental protection agencies, Departments of Labor, local governments/development authorities, Irrigation Departments, Wildlife Departments, and Archeology Departments. As stated earlier, the legislative powers and functions of these institutions are comprehensive and cover most of the EIP Framework requirements. The performance of these institutions for the scrutiny of applications at the time of issuance of permits is satisfactory. After the issuance of permits, however, the monitoring performance of these institutions is limited. Full compliance with the conditions of permits at developmental and operational stages is rarely monitored. These institutions are facing capacity limitations for effective monitoring of IEs and predominantly conduct monitoring activities in response to complaints and accidents. Takeaways: Industrial Estate Governance Mechanisms ASSESSMENT UNDER THE EIP FRAMEWORK • A major intervention to adopt the EIP Framework at the national and provincial levels is required at the policy and administrative approval stages. At these levels, institutions need to ensure that IE locations are selected with the industrialization needs in mind, environmental (climate change adaptations and commitments) and social (stakeholder engagement) systems and common infrastructure are part of the IEs’ feasibility, and required budgetary allocations are made. • IEs need to change the mindset of dependency. They are autonomous bodies by their organizational formation and rules of business and must learn to operate as such. A major shift needs to be made in the provision of environmental and social infrastructure. Currently, IEs are looking for financial support from provincial governments for the establishment of these infrastructures. However, IEs need to take resident firms onboard to take the proportionate responsibilities for the establishment of common infrastructure. This needs to be done through intensive stakeholder consultations with the resident firms and regulatory institutions. • Regulatory institutions need to realize that scrutiny of the project at the permit stage for the issuance of the permit is only the first step and that a major function of the regulatory institutions should do monitoring. The EIP Framework can only be effectively adopted by IEs if regulatory institutions conduct monitoring functions. Enabling Actions The following are the enabling actions to be taken to adopt the EIP Framework: • Policy and administrative approval institutions should incorporate strict economic (industrialization needs), environmental (climate change adaptation and RECP), and social (engagement of private and civil society stakeholders) criteria at the feasibility stage of the IEs (PC-I and PC-II forms). Inclusion of these aspects in decision-making will enable the IEs to qualify for the EIP Framework at the development and operational stages. • IEs should take the lead in collaborating with resident firms and regulatory institutions for the establishment of common environmental (CETPs and hazardous waste management facilities) and social infrastructure (continuous engagement with stakeholders and regulators). Dependency mindset on the provincial government will not help qualify them for the EIP Framework. INSTITUTIONAL ANALYSIS 45 • Regulatory institutions should develop capacity to monitor IEs and their resident firms. • Capacity building of all the above-stated institutions should be developed through seminars, training workshops, dissemination campaigns, and demonstration under the guidelines of EIP, including on topics such as RECP and circular economy. 2.2 Coordination between Agencies to Monitor Environment, Health, and Safety Environment, health, and safety (EHS) monitoring can be successfully executed under a coordination framework between IEs, regulators and resident firms. PIEDMC and FIEDMC have recently established Social and Environment Units (SEUs) under the World Bank-funded Jobs and Competitiveness Program. Major functions of SEUs are as follows: • Promotion and preparation of status reports of compliance with the Government of Pakistan and Government of Punjab policies and laws for land acquisition and livelihood restoration • Development of standard operating procedures (SOPs) for land acquisition and systematic screening for physical cultural resources, stakeholder consultation, and grievance redress mechanism (GRM) • Coordination and working with Women, Labor, and Environmental Departments • PEQS compliance (wastewater and ambient air pollution testing and data) • Departmental NOCs for existing and new estates (Labor, Women, Environment, and so on) • A grievance mechanism for communities • Implementation of a public communication strategy • Any other function relevant to social and environmental aspects of IE development and operations recommended by the Board of Directors. As BOMs are responsible for IE operations, SEUs are also established at the BOM level with the following major functions: • Promotion and preparation of status reports of compliance with the Government of Pakistan and the Provincial Government of Punjab policies and laws for labor, gender, livelihood of labor and communities, women harassment Act, women support services, and infrastructure (such as establishment of day care centers and transportation) • Development of SOPs for systematic management of physical cultural resources, EHS, stakeholder consultation, and GRM • Coordination and working with Provincial Women, Labor, and Environmental Departments in case of noncompliance • System for labor inspection (internal and external) • PEQS compliance (wastewater and ambient air pollution testing and data) • Promotion of cleaner production and energy efficiency • Social and environmental training and capacity building of resident firms • Sustainable management of IEs (including solid waste management and resource efficiency) • A grievance mechanism system • Implementation of a public communication strategy • Any other function relevant to social and environmental aspects of IE development and operations recommended by the BOM. 46 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB SEUs offer the potential to serve as bridges between resident firms and regulators. Currently, regulators have the right to directly monitor resident firms under the legislative arrangement, but this would be more effective if regulators approach resident firms through SEUs. SEUs can facilitate both resident firms and regulators under a coordination framework. A review of SEUs functions at the IE and BOM levels establishes that successful execution of these functions will enable the IEs and resident firms to comply with provincial standards. Effective execution of these functions will generate a large set of environmental and social performance data for IEs and resident firms. Takeaways: Coordination between Agencies for EHS Monitoring ASSESSMENT UNDER THE EIP FRAMEWORK SEU functions are in line with the EIP requirements. Coordination is the key common function for IEs, regulators, and resident firms. First, these three parties need to agree on the mandate and functions of SEUs. Second, SEUs should give confidence to resident firms that they will effectively present their data, performance, and case in front of regulators. It is expected that resident firms, through BOMs, will seek guarantees that EHS data will not be used for any other purpose. As newly established entities, SEUs need to be strengthened for EHS monitoring, database management, institutional coordination, and stakeholder engagement. ENABLING ACTIONS • IEs should call a meeting of SEUs, resident firms, and regulators to agree on the functions of SEUs. • SEUs should be strengthened to facilitate resident firms to comply with provincial standards for EHS and to implement EIP requirements for EHS. • Resident firms should conduct monthly monitoring of wastewater, air pollution, solid waste, and safety and report the monitoring data to SEUs in the agreed format. • SEUs should establish an EHS monitoring database management system. • SEUs should publish biannual status and performance reports based on EHS monitoring data. 2.3 Capacity for Monitoring, Reporting, and Verification Presently, IEs and regulators have nominal capacity for monitoring, reporting, and verification (MRV). There is a need to develop a comprehensive MRV system at the IEs. The scope of MRV can be as follows: ECONOMIC: • Direct and indirect employment creation • Trainings and opportunities provided to workers for skill upgrading • Conflict management with the surrounding communities INSTITUTIONAL ANALYSIS 47 • Initiatives for technology and knowledge transfer for international best practices • Steps taken to minimize operating costs and improve resource efficiency and productivity. ENVIRONMENT: • Implemented climate change adaptations and mitigations and generation of relevant data • Steps taken to meet global demands for green supply chain and reduce resource constraints through improved resource management and conservation • Facilitation and technical assistance to resident firms to improve resource and energy efficiency • Steps taken to ensure infrastructure resilience to higher resource costs and adaptability to climate change risks • Steps taken to ensure sustainable land use. SOCIAL: • Steps taken to improve working and labor conditions • Number of local jobs created • Steps taken to ensure improvement of gender equality • Steps taken to improve OHS. The IEs will need to compile IE-specific and IEs-level data on the above indicators to ensure that they comply with the EIP Framework. The data should be generated and collected through standard formats for each indicator to enable uniform formatting of provincial and national data. IEs can then share MRV reporting for policy and administrative approval and to regulator institutions so that practical knowledge base policies and procedures for future IE development and monitoring can be created. As stated above, resident firms will generate monthly EHS monitoring data and SEUs will compile the EHS data every six months. IEs should collect the yearly data based on the data generated by different departments including SEUs for the above indicators. Successful execution of MRV reporting will build a good reputation for the IEs not only at the national level but also at the international level. This will help direct international investment to Pakistan’s IEs. The initial capacity for MRV can be generated by combining the existing resources of different departments, including BOM SEUs, with the lead given to IEs. Later, this capacity should be strengthened based on MRV reporting plans and the appropriate physical and budgetary allocations should be made. Regulators can do periodic (preferably yearly) monitoring to verify the MRV reporting, and IEs can hire third parties for the verification of the MRV reporting every three years. 48 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 3 Sundar Industrial Estate Comparison Against The International EIP Framework 3.1 General Profile of SIE SIE is located 45 km from Lahore City and 10 km from Raiwind City and consists of 498 resident firms (with 60,000 employees) in total. The IE is managed by a BOM whose members are in part public officers (from PIEDMIC) and in part from resident firms. It is a mixed type IE with a 66 percent occupancy rate. The total SIE area is 1,763 acres. The most dominant sectors (70 percent in terms of number of firms) within SIE are pharma, textile, packing, plastics, printing, logistics, and food. The total number of firms belonging to the remaining 18 sectors is 174 (30 percent). The top five sectors with the highest number of firms are presented in Table 11. 3.2 Preliminary Analysis: Evaluation of the Performance Indicators for SIE To move toward an International EIP Framework, first of all, the IE must ensure compliance with all national- and provincial-level regulations. The International EIP Framework encompasses 18 prerequisites and 33 performance indicators grouped into four focus areas: park management, environmental, social, and economic. The EIP assessment is a two-step process where first the IEs are evaluated against prerequisite groups and then performance requirements. To operationalize an adopted International EIP Framework, the gaps identified in the prerequisites list must be filled so that SIE can test and improve its performance in the four focus areas. The World Bank Group suggests countries and industrial park operators to phase out EIP adoption by setting clear targets and pertaining activities and assigning particular bodies to be responsible for their completion. For SIE, the prioritization of the park management and environmental performance indicators are identified SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 49 TABLE 11. Sectors with the highest number of firms Ranking Industrial Activity % Occupied Area (acres/total acres) 1 Pharmaceuticals 16 2 Textile 13 3 Food processing 12 4 Plastics 10 5 Services 7 to be areas for improvement. A clear work plan would allow SIE to move toward the EIP concept in three steps: • Step 1: Fill in gaps in prerequisites (including compliance with all national and provincial regulations). • Step 2: Fill in gaps in social, economic, environmental, and park management performances. • Step 3: Set clear targets and assign responsibilities on a sound timeline to improve environmental, economic, and social performances of the IE. The preliminary gap assessment has been performed by analyzing the data provided by SIE’s BOM and by the company walkthroughs and interviews of selected resident firms during the two missions. Regulatory compliance was assumed to be ensured. The analysis was conducted by focusing on prerequisites and performance indicators. While most of the performance indicators require more granular and detailed sets of data, this preliminary analysis was sufficient to determine some potential actions for SIE to implement an EIP program, particularly to develop a baseline to address the actions for Steps 1 and 2. 3.2.1 PARK MANAGEMENT Prerequisites (MPR) The park management prerequisites cover the management entity, planning and rendered services, and basic requirements to implement the interventions to be monitored with the performance indicators. An analysis of the prerequisites shows that SIE needs to improve in three areas: • Wastewater treatment is a critical aspect of the management of an IE since the lack of a CETP obliges resident firms to identify solutions (investing in ETP or contracting specialized wastewater management company to collect effluents) to comply with local regulations. The IE management entity should ensure that resident firms are complying with local regulations by adopting specific procedures to monitor them and take actions in case of noncompliance (MPR2). • SIE needs to include resilience to natural disasters among its priorities by adopting specific procedures and plans (MPR3 and MPR4) for disaster recovery and business continuity. • A clear and structured strategy of development and continuous improvement of the IE can be communicated through a master plan. It should be a dynamic document to be discussed and updated every year by the IE management entity. It provides a clear and transparent guideline to the stakeholders of the action taken or to be taken to reach the goals (MPR6). 50 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 12. List of park management prerequisites Code Prerequisites/Evidence Checklist Result Details Action MPR1 A distinct EIP management entity Yes/No Yes The IE is managed Additional tasks should be assigned to exits to handle EIP planning, by a BOM in charge the BOM to oversee the monitoring of operations and management, of SIE’s operations, environmental and social parameters of and monitoring. management, and the resident firms. monitoring. MPR2 The EIP management entity Yes/No Partially The BOM renders CETP is a key infrastructure gap manages and maintains the Yes the critical and identified to prevent SIE from scaling up industrial EIP property, common essential services to EIP adoption. Resident firms are dealing infrastructure, and services as the resident firms but with local regulations on the treatment of prescribed in the tenant contract not for wastewater wastewater, and even though SIE’s BOM and the park’s master plan. treatment. has started the process to establish a CETP, it is at a preliminary stage. MPR3 The EIP management entity Yes/No Partially No critical response Additional tasks should be assigned to maintains an EIP Framework Yes to natural disaster risk the BOM to oversee the monitoring of monitoring system, tracking environmental and social parameters of the residing firms. The monitoring plan (a) progress on environmental, should cover the EIP indicators analyzed social, and economic in this report. An emergency response performance at the EIP level plan should be put in place that includes and (b) critical risk factors and natural disaster risks and strategies to related responses, at least for address them. (i) risk points where the Periodic trainings and drills for accidental release of emergency response could be provided poisonous solid, liquid, and by SIE. The training planning can gaseous effluents, including be announced and made available during transportation and beginning of each fiscal year. The SIE disposal when fire hazards Authority can make participation in these are possible, and safety and emergency response trainings (ii) applicable natural disaster mandatory and monitor attendance. The risks (for example, training package could include coverage earthquakes). of the essential topics/issues and provide certificate of participation to the participant personnel. This will help raise awareness on emergency response and mitigate relevant risks while ensuring the system’s dynamism. MPR4 Where required, EIP Yes/No No No adaptation An adaptation assessment of critical management has a plan in assessment of critical infrastructures should be performed to place to react to possible infrastructures has invest in required interventions. negative impacts due to climate been conducted. change risks (heat waves and droughts, storms, and floodwater events). All adaption needs for infrastructure and services are identified and in place for the IE to protect against climate change risks and potential damages. MPR5 The EIP management entity has Yes/No Yes A one-window a functioning system in place operation (OWO) has to comply with local/national been established to regulations and international deal with compliance standards applicable to the with national and industrial estate/park. EIP local regulations. management informs compliance by resident firms and compliance information that firms share with the EIP management entity. continued ⊲ SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 51 TABLE 12. List of park management prerequisites (Continued) Code Prerequisites/Evidence Checklist Result Details Action MPR6 A master plan (or equivalent Yes/No Partially A general Update the general guidelines in the planning document) for any new Yes development strategy form of a master plan encompassing EIP and existing industrial EIP has is in place but it is requirements. The master plan should been developed and is reviewed not structured in be updated periodically to integrate the periodically (and updated if a comprehensive provided primary social infrastructure required), including the following master plan. adequately. The master plan may also core elements: include general norms on an IE-wide greenhouse gas (GHG) calculations (a) Site selection study based guideline to evaluate emission on various risk analyses; factors in technical specifications for essential and efficient the procurement of infrastructures, infrastructure, utilities, and equipment, and machineries. transportation network; environmental and social issues; internal EIP land zoning; buffer zone around the park; procedure to safely locate high-risk industries; and cluster synergistic industries (b) Integration into the master plan of relevant requirements specified in this EIP Framework that have spatial implications. TABLE 13. List of park management performance indicators Unit (Target Code Description/Requirement Value) Result Details Action MPI1 Proportion of firms in the EIP to have 100% 100% Contracts are A new clause can be added on standard signed a residency contract/charter/code in place for legally binding contracts as “Obeying of conduct (depending on what is legally the rendering the principles to use as little hazardous binding on resident firms according to of services materials as possible in the production the existing legislation in the country and between SIE process.” As the EIP Framework adoption additional legally binding arrangements) and resident moves forward, the clause will help secure that empowers the park management firms. the alignment of the residing firms with SIE’s entity to perform its responsibilities EIP commitments. and tasks and charge fees (sometimes absorbed in rental fees) for common services. This may include transparent fees for services pertaining to the achievement of EIP performance targets. MPI2 The resident firms indicate satisfaction 75% n.a. The OWO Unit OWO is a successful unit by handling regarding the provision of services has a grievance requests from the resident firms. Only in and common infrastructure by the system in 2019, OWO reported that 13,443 activities EIP management entity (or alternative place, and no were performed including customer agency, where applicable). statistics have applications and revenue collection (see been officially Annex 4 for 2019 report of OWO). A survey shared with the on the satisfaction of the resident firms technical team. with the services provided by SIE can be prepared and launched given the advantage of the OWO Unit’s ability to interact with the resident firms. The results from the survey will identify the areas to be improved. SIE can prioritize a set of actions to respond to the needs of resident firms to increase the satisfaction ratio. This activity will help retain firms in SIE. continued ⊲ 52 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 13. List of park management performance indicators (Continued) Unit (Target Code Description/Requirement Value) Result Details Action MPI3 The EIP management entity regularly Every 6 Partially A report on It is essential for SIE to invest in developing monitors and prepares consolidated months achieved environmental and upgrading its existing management reports regarding the achievement of performance is systems by deploying more financial, target values as documented in this presented every human, and technological resources. As framework to encompass the following: 6 months. the sole provider of infrastructure such as electricity, water, telephone lines, and waste • Environmental performance collection as well as due to its involvement • Social performance in land acquisitions and firm productivity, • Economic performance SIE can enhance the systems measuring • Critical risk management at the IE the resources consumed by resident firms. level. However, SIE does not have capacity to map the trends and inefficiencies in this system. It is essential for SIE to establish standard reporting formats and mechanisms to measure and report the EIP indicators for ease of monitoring. Establish a dedicated unit responsible for measuring, monitoring, and reporting by the residing firms to implement the greening of SIE recognizes the need for and should consider developing internal capacities to measure and track natural resources consumption (for example, electricity and withdrawals from wells) more frequently to eradicate billing discrepancies. The OWO Unit is well placed to have frequent interactions with representatives from the resident firms. It would be beneficial to employ consultants/ technical experts to extend technical assistance to the firm engineers about the recording and reporting of the requested EIP performances. Performance Indicators (MPI) The three performance indicators are designed to measure the interactions between the IE management entity and the resident firms. SIE needs to measure its performance along the EIP Framework by getting feedback on this matter from its resident firms (MPI2) and provide them with the compiled feedback results. The biannual environmental report could be integrated with the other sets of information required by the EIP Framework (MPI3). 3.2.2 ENVIRONMENT Prerequisites (EPR) The six environmental prerequisites focus on verifying conditions for the implementation of operational interventions (to be measured by the performance indicators) about energy and environmental management, energy and water efficiency, industrial symbiosis, emissions control, and wastewater treatment. SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 53 TABLE 14. List of environment prerequisites Code Prerequisites/Evidence Checklist Result Details Action EPR1 The park has appropriate, Yes/No No SIE does not have any EMS/EnMS SIE needs to implement an EMS functioning environmental certifications in place or EnMS certification. SIE can management system (EMS) and work with Pakistan Standards and EnMS (for example, ISO 14001 Quality Control Authority (PSQCA) Environmental Management on this matter. The first step Standard and ISO 50001 can be requesting a workshop Energy Management Standard) from PSQCA to understand the in place to set and achieve overall quality management targets, covering key issues and improvement systems/ (for example, energy waste and standards and the procedures material use, water, point source to be followed in the adoption of emissions, and the natural the EIP Framework. This activity environment). may also help SIE evaluate the need for an increase in its current manpower capacity to certify under environmental, energy, or OHS standards. EPR2 Energy efficiency strategies Yes/No Partially LED street lighting is used in the A more structured energy are in place for the park Yes IE. Major firms try to minimize efficiency strategy should be management infrastructure energy costs due to the high cost developed in a plan to be and major energy-consuming of electricity. monitored and updated every resident firms. year. EPR3 A program/mechanism is in Yes/No Partially Resident firms already maximize A more structured energy place to identify opportunities Yes waste recovery and exchange. efficiency strategy should be for common energy and heat developed in a plan to be exchange networks to be monitored and updated every established, including support year. programs to assist resident firms with implementation. EPR4 Water saving and reuse plans Yes/No Yes SIE has a distributed rainwater Presently, water is supplied are important to reduce total harvesting system in place with through wells and water trucks water consumption. The park 164 collecting wells (see Figure 7) to firms. Given the nature of and firms should have systems located in green areas. the resident firms (for example, in place to increase water pharmaceuticals, textile, savings and reuse. painting, and plastics), the sectoral composition of SIE is water intensive. There could be potential firm-level water efficiency opportunities to be investigated. EPR5 The park seeks to limit and Yes/No Partially SIE monitors the emissions and Monitoring of environmental mitigate all point source Yes the wastewater. On the other emissions should be streamlined pollution and GHG emissions, hand, the EPD conducts random/ with the help of the EPD. Besides including air, waterway, and unannounced visits to firms monitoring air emissions and ground pollution. A set of operating at SIE to check the wastewater effluents, further measures at the park level is compliance with solid waste, air actions and planning in GHG introduced (for instance, low- emission, and ground pollution. reductions should be taken by carbon technologies, energy This is a backstopping activity to SIE. efficiency measures, and waste SIE to have a robust EMS in place. heat) to reduce GHG emissions. However, there is no mechanism in place to reduce or measure GHG emissions. EPR6 Protection of the sensitive Yes/No Partially There is an open channel as a The CETP is one of the key natural environment is key to Yes collection pool along with grit infrastructure gaps that should environmental and community where all wastewater from various be filled by SIE to avoid odor well-being. The industrial enterprises is collected and and sanitation problems faced estate/park demonstrates an coarse materials such as pieces currently. understanding of the potential of wood, plastic bags, and fabric impact of park activities on are filtered out using a bar screen. priority ecosystem services in The water stream is then sent to and around the vicinity of the the sewerage network (see Figure park. 6). Other than this, there is no engineered WWTP in place. 54 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB FIGURE 6. Wastewater collection area of SIE FIGURE 7. Rain harvesting well SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 55 Apart from EPR4 (water saving and reuse), none of the other prerequisites are fully met by SIE. SIE needs to adopt energy and environmental management certifications to systematize the control over energy efficiency improvement and control of environmental externalities. It will provide the backbone to implement more structured planning, monitoring, and reporting on energy, water, and environmental issues. Punjab Energy Efficiency and Conservation Agency (PEECA) and PSQCA can be key partners for SIE to collaborate with to improve these areas. Regarding wastewater effluents, SIE has to implement a procedure to assess how resident firms are complying with the national norms and regulations and needs to take actions against those that are not be able to identify proper solutions. A close collaboration with the EPD is required in capacity building to frame the monitoring mechanism. Performance Indicators (EPI) The 12 performance indicators are designed to cover five areas: • Certification and monitoring (EPI1, EPI2) • Energy efficiency and renewable energy (EPI3, EPI4) • Water efficiency and treated wastewater recovery (EPI5, EPI6, EPI7) • Waste management (recycling, solid waste, hazardous waste) (EPI8, EPI9, EPI10) • Climate change and resilience (EPI11, EPI12). One of the main concerns about SIE’s management and planning activities is the lack of information on resident firms’ operations, especially in relation to water consumption and reuse, solid waste generation and recycling, wastewater treatment, emission monitoring, and energy efficiency. The SIE management entity has established an environmental unit to oversee TABLE 15. List of environment performance indicators Unit Code Description/Requirement (Target Value) Result Details Action EPI1 Resident firms have functioning Percentage of firms Not available Details on the SIE should implement and fit-for-purpose EMS/EnMS. (40%) number of a procedure to collect, Summary information from these companies with among other data, the management systems is provided EMS/EnMS in place certifications of the EMS/ to estate/park management, who have not been EnMS from the resident will aggregate and report on data provided by SIE. firms at the park level. EPI2 The industrial estate/park Percentage of 100% SIE invoices has adequate metering and combined park resident firms for monitoring systems in place to and firm level of energy and water measure energy consumption at monitor energy consumptions. both the park and firm levels. consumption (90%) EPI3 The industrial estate/park Percentage of Not available SIE management SIE should consider leverages available renewable renewable energy entity does not investing in sources of generation sources, with plans to use in park relative own any renewable renewable energy (solar). increase contribution for shared to national average energy plants. services (for example, solar street (%) Some companies lighting, biomass, hydro, and have installed Carbon intensity in natural gas). solar panels, but line with local norms the details are and industry sector not available. SIE benchmarks (kg purchases energy CO2e/kWh) from the grid. continued ⊲ 56 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 15. List of environment performance indicators (Continued) Unit Code Description/Requirement (Target Value) Result Details Action EPI4 Energy efficiency opportunities Energy intensity Not available Energy The SIE management entity should be actively identified at per unit of dollar consumption in SIE shall collect and process the park and firm levels to reduce generated in the and economic data more specific data on energy use and associated GHG industrial estate/ are not available. energy consumption and emissions. EIPs should identify park in line with economic information from and promote technological and local norms and resident firms. process-related interventions in industry sector To systematize energy their own operations and in the benchmarks efficiency improvement operations of their resident firms. (kWh/US$ turnover) and monitoring of energy consumption (electrical and thermal load), SIE can collaborate with PEECA to • Set up a standard format for in-house energy efficiency audits, • Provide technical support to residing firms for energy efficiency audits, and • Build in-house capacity for energy efficiency audits. EPI5 A mechanism is in place to Percentage of water Partially Even though SIE SIE needs to improve appropriately monitor water demand (100%) accomplished has a centralized the water supply system consumption across the park and water extraction to match the demand ensure that demand management system, water from resident firms. A practices are in place in case treatment plant, centralized system allows of water stress. Extraction from and distribution SIE to monitor the real water sources (such as rivers and network, the water consumption and groundwater sources) occurs at water consumed implement more effective sustainable levels. by resident firms water efficiency strategies. is higher than To maintain a balanced the consumption water management in SIE, recorded by SIE. It the BOM should undertake is likely that resident the following measures: firms use additional sources of water • Deploy digital solutions such as boreholes for meter/monitor the or alternative water water consumption of supplies. individual firms in SIE. • Set SIE-wide water saving targets annually and become stricter each following year. • Set norms to water consumption per each type of industry (for example, steel, textile, and pharmaceuticals). • Monitor the adherence to the set norms biannually in the short term and move to annual monitoring in the long term. • Stricter penalties shall be levied on resident firms not adhering to the water consumption norms. continued ⊲ SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 57 TABLE 15. List of environment performance indicators (Continued) Unit Code Description/Requirement (Target Value) Result Details Action EPI6 The industrial estate/park Percentage of Not available Data on effluent SIE needs to collect data has provisions in place to treated wastewater generation at from resident firms on appropriately treat, recycle, / total wastewater the resident wastewater reuse and and reuse treated wastewater. firm level and wastewater treatment (95%) No effluents significantly affect wastewater reuse solutions to comply with potable water resources and the are not available. national regulations. health of local communities or Based on the nearby ecosystems. individual company walkthrough only one firm (CHT) was identified having a reverse osmosis system in place to ensure zero discharge. EPI7 The park and businesses have Percentage of water Not available Due to the SIE needs to improve the systems in place to increase water reused /total water deficiencies of the water supply system and savings and reuse. consumed water supply, SIE is monitoring to identify not able to provide potential gaps in water (50%) the effective consumption and reuse. data on water consumption. EPI8 A program/mechanism is in place Percentage of solid Not available Resident firms SIE should put in place a to promote and encourage reuse waste reused/total already adopt system to request resident and recycling of materials by waste (20%) recovery of material, firms to disclose how much firms in the park (for example, raw but data are not waste they recover or sell materials for process and non- collected by SIE. to third parties compared process applications). to the total amount they generate (including what they sell). To encourage reuse and recycle of materials across residing firms, an industrial symbiosis model should be facilitated. This model should characterize the waste availability and identify potential match among the resident firms able to utilize it as raw material without compromising on quality standards. This can lead to opening up of new businesses at SIE. EPI9 A program/mechanism is in place Percentage of firms Not available SIE does not have SIE in coordination with with clear targets to reduce and (100%) a system in place Punjab EPD can take avoid the use of dangerous and to monitor all the actions (interruption of hazardous materials by firms in hazardous wastes services) if resident firms the park. produced in the do not comply with the zone and how they environmental laws. are treated. continued ⊲ 58 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 15. List of environment performance indicators (Continued) Unit Code Description/Requirement (Target Value) Result Details Action EPI10 A functioning waste collection, Percentage of Not available Even though SIE SIE needs to put in place treatment, and disposal system waste to landfill has outsourced a procedure to collect, is in place to ensure that unused (<50%) waste management among other data, waste materials are treated and services to a information on the solid disposed of in proper landfills. qualified contractor, waste generated and since there are recycled. no data on the recycled solid waste, it is not possible to assess the fraction that goes to the landfill. EPI11 Native flora and fauna are Percentage of open Above 5% important to maintain the space (5%) proportion of natural areas where possible. They are integrated within the industrial estate/park and natural ecosystem where possible. EPI12 A mechanism is in place to Percentage of Not available SIE monitors SIE needs to implement a avoid, minimize, and/or mitigate firms (50%) and emissions every more effective monitoring significant point source pollution percentage of large 6 months, but a strategy for GHG emissions and GHG emissions. This should emitters (30%) specific plan to at the resident firm level. cover gases, local particulate and mitigate significant air pollution emissions, as well as point of emissions is chemicals use and management. not in place. environmental issues in the IE. This unit can improve the collection of data from resident firms required by the EIP Framework to measure the environmental performance of the IE . However, there are still criticalities in SIE that require structural changes and significant investments: 1. No actions have been taken to lower the carbon footprint and monitor GHG emissions. 2. Lack of green infrastructures (renewables, WWTPs with treated wastewater recovery). Policy interventions might be required to support the development of green infrastructures and industrial symbiosis strategies to increase energy efficiency and facilitate the adoption of EMS/ EnMS certification at the firm level. SIE has high potential for integrating sustainability and resilience approaches/measures into its ongoing/future development and operations. The environmental performance requirements of the International EIP Framework can be achieved through combining various technical solutions. The main criterion adopted by the World Bank team to conduct the preliminary technical preassessment is the maximization of the impacts of green infrastructures at the zone level and energy efficiency strategies at the firm level. Based on the analysis of the sectors in SIE, it has been possible to identify the potential target (12 percent) for energy efficiency at the firm level. The potential energy efficiency factors per sector utilized for the assessment have to be considered as reference for the estimate of the potential improvements in energy efficiency achievable by each specific sector. Those factors are based on technical literature on energy efficiency of industrial sectors. Site visits and technical assessment (energy audit) at the firm level are recommended to confirm the effective range of improvements achievable by the resident firms in SIE. SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 59 The potential average energy saving per firm is 93.5 MWh per year, with CO2e emission reduction approximately 52 tons per year (grid emission factor: 0.566 CO2e ton per MWh). The cumulative potential GHG reduction is 23,346 tons per CO2e. Cost savings have been calculated assuming the electricity tariff for industry at US$80 per MWh. Investment costs have to be used just as a preliminary evaluation since they depend on multiple factors and require a more detailed assessment based on local availability of technologies and expertise. Regarding water optimization, the inconsistency of data on water consumptions provided by SIE shows that resident firms procure water from different sources since the water supplied by SIE covers less than 30 percent of the wastewater generated in the IE.19 Therefore, without consistent data on water consumptions, reuse, and wastewater generation, it is not possible to estimate the potential efficiency gaps and interventions to minimize them. The most capital-intensive interventions suggested to improve the environmental performance of SIE are the PV plant and the WWTP with treated wastewater recovery. Advanced designing models for green infrastructure have been adopted for PV and WWTPs based on best available technologies (BATs). CETP Regarding the WWTP, the Ultra Filtration Unit to reuse 60 percent of total treated wastewater has been included (tariff for treatment and reuse wastewater US$0.3 per m3). For the WWTP, potential energy efficiency solution can be obtained by combining the sewage treatment plant (STP) with the CETP and assessing biogas production to decrease energy consumptions. The preliminary estimated investment cost is US$25 million, considering the following data: • Wastewater flow rate (average – maximum): 1,300 m3 per hour – 1,700 m3 per hour • Effluent composition (critical values in red in Table 16). The CETP should include three different treatments: • Primary and Secondary to ensure compliance with the local EPD’s regulations on wastewater effluents • Tertiary to increase the resilience, circularity, and the economics of the WWTP. A feasibility study has been finalized by SIE, but SIE/PIEDMC has not shared any copy with the World Bank Group team to provide more detailed technical comments. However, for potential PPP innovative arrangements for the CETP in SIE, see Box 2. Wastewater Treatment Technologies: In-depth Analysis To select adequate wastewater treatment technologies and leverage circularity at SIE, a scoring matrix will help short-list technologies. It should be noted that the provided matrix will help only short-list the technologies with an aim to increase the potential for recirculating treated wastewater 19 Baseline Environmental Monitor for SIE Report, October 2019. 60 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 16. Effluent data collected at the collective discharge point in SIE Wastewater Analysis Results Parameter Analysis Method PEQS Result Remarks Lab Analysis pH APHA 4500H+B 6-9 6.83 Optimal Biochemical Oxygen Demand (BOD5) APHA 5210-B 80 mg/l 580 High Chemical Oxygen Demand (COD) APHA 5220 B 150 mg/l 872 High Total Suspended Solids (TSS) APHA 2540 D 200 mg/l 182 Optimal Total Dissolved Solids (TDS) APHA 2540 C 3500 mg/l 1710 Optimal Phenolic Compounds (as Phenols) APHA 5530 D 0.1 mg/l 0.55 High Grease and Oil USEPA 1664 B 10 mg/l 10.5 Marginal Chloride (Cl-) APHA 4500 Cl- B 1000 mg/l 224 Optimal Fluoride (F-) APHA 4500 F- C 10 mg/l 6.5 Optimal Cyanide (CN-) APHA 4500 CN- F 1.0 mg/l 3.98 High An-ionic Detergents (as MBAs) APHA 5540-C 20.0 mg/l 2.89 Optimal Sulfate (SO42-) APHA 4500 SO4-2C 600 mg/l 377 Optimal Sulfide (S2-) APHA 4500 S-2 F 1.0 mg/l BDL Optimal Ammonia (NH3) APHA 4500-NH3 D 40 mg/l 11.24 Optimal Cadmium (Cd) APHA 3113 B 0.1 mg/l 0.0067 Optimal Chromium (Cr) APHA 3113 B 1.0 mg/l 0.0633 Optimal Copper (Cu) APHA 3113 B 1.0 mg/l 0.0859 Optimal Lead (Pb) APHA 3113 B 0.5 mg/l 0.2397 Optimal Mercury (Hg) APHA 3112 B 0.01 mg/l 0.0004 Optimal Source: SIE. FIGURE 8. CETP conceptual design Potential impacts: Green infrastructure-CETP Block Diagram: CETP De-coloring Acid/Alkali Polyelectrolytes Dosing H2SO4 E uent Equalization Clariflocculator/Tube Screening with Mixing Neutralization Flash Mixer Settler Potential biogas production assiociated UF reject to STP stream at this stage Ultra Filtration and Sand and Activated Chlorination/ Clarification for Aerobic Biological Discharge Carbon Filtration Ozonation Removal of TTS Treatment Sludge treatment Recirculation Treatment Multi-e ect Salt with 90 to 92% Crystallizer E uent for Evaporation w/w solids recycle in Process/Boilers Pre- Primary Secondary Tertiary Sludge Treatment Treatment Treatment Treatment Treatment Source: FCI team, World Bank. Note: TTS = Total Suspended Solids. SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 61 BOX 2. PPP POTENTIAL OPTIONS FOR SIE Under the Punjab Public-Private Partnership Act dated 2014, the Government of Punjab is allowed to develop PPP projects with the participation of the private sector, particu- larly in the stages of construction, development, operation, maintenance, and financing of infrastructure projects and services of the government through concession contracts in PPP. A high-level PPP financing arrangement exercise has been carried out to evaluate an engineering, procurement, and construction (EPC) option in relation to a design-build- operate (DBO) option for the SIE CETP project to develop a 40 MLD (estimated capacity based on the available set of information provided by SIE) CETP. Three project structuring options have been considered for detailed analysis: (a) Hybrid annuity-based PPP model (HAM) (b) Build-operate-transfer (BOT) (c) DBO These models commonly involve the creation of a specific company (special purpose vehicle [SPV]) by the successful bidder to deliver the project (construction, financing, operation, and maintenance of the asset). The SPV signs the contract, so all rights and obligations are assumed to rest within the SPV. The revenues generated from the opera- tions are intended to cover operating costs, maintenance, repayment of debt principal, financing costs (including interest and fees), and a return for the shareholders of the special purpose company. The invoices are to be issued by the SIE Authority to the facto- ries, but the payment account will belong to a private party which will allow it to collect payments on invoices directly. Consequently, all cash flows inherent to the project are channeled through the SPV, and assets and liabilities related to the project are recorded in its balance sheet. For the financial aspects of the PPP model, the private sector needs a guarantee mecha- nism to provide necessary financing. In the general assumption, the PPP models intro- duced below assumes that the SIE Authority will guarantee 100 percent of the demand of treated water. The SIE Authority should establish an internal unit that will monitor the process and ensure that all invoices will be issued and collected from the users. Given that this is an infrastructure project, a debt-equity ratio of 80:20 can be assumed, which is commonly used for infrastructure projects internationally. For the loan repayment, a repayment schedule of 12 including a two-year grace period at the beginning of the operational phase can be adopted without any moratorium period. The cost of the project from equity and debt will include • EPC works, • Non-EPC works (operation management), and • Maintenance and operating cost. The authority should define the place of the plant and all types of land acquisition should be finalized before the tender process. The authority should complete all neces- sary certification and licensing regarding the construction. continued ⊲ 62 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Option 1: Development of CETP + reuse water pipeline on a HAM basis This option considers development of the CETP along with the reuse water pipeline by the private operator on a HAM. In this model, 40 percent of the project cost is provided by SIE in the construction period while 60 percent of the project cost is arranged by the concessionaire for the financial closure. However, it is paid back to the private operator in the form of annuity payments (biannually) over 15 years. The tariff is collected by SIE. This model ensures single-point responsibility of the entire project and allows private financing of 60 percent of the project cost. This structure has potential for replicability. Single-point responsibility of the entire project allows smoother contract management. Option 2: Development of CETP + reuse water pipeline on a BOT basis This option considers the development of the CETP along with the reuse water pipeline under the BOT mode of PPP project structuring. In this PPP arrangement, the private operator will pay a concession fee to SIE which will usually be ring-fenced and put toward asset replacement and expansion. This option ensures single-point responsibility with maximum private finance (100 percent of the project cost). The model has high replicabil- ity in other IEs and smooth contract management. However, the important risks in context of the CETP project are the finance risk and demand risk/commercial risk. Recent experi- ences have shown that private operators are unwilling to take the finance and commercial risks completely. Option 3: Development of CETP + reuse water pipeline on a DBO basis This option considers development of the CETP along with the reuse water pipeline on a DBO-based PPP model. In the DBO project, SIE owns and finances the construction of new assets. The private operator designs, builds, and operates the assets to meet certain agreed outputs. Under this modality, the successful bidder will bring its own technical design and solution to match the required quality and the standards, which will be defined in the tender documents. The contractual arrangement is simpler than BOT or HAM since there are no financing documents and will typically consist of a turnkey construction con- tract and an operating contract. The SIE Authority would agree in principle to transfer the control of development, design, construction, operation, maintenance, and management of the CETP to a private agency which is financially and technically capable. The private operator does not take any financing risk on the capital and will typically be paid for the design-build of the WWTP and reuse water pipeline, payable in instalments on completion of construction milestones, and then an operating fee for the operating period. The private operator will be responsible for the design and the construction as well as operations and so if parts need to be replaced during the operations period before its assumed life span, the operator is likely to be responsible for replacement. This project structure is straightforward, has potential for replicability, is acceptable to the market play- ers, involves easier contract management, and lastly, ensures single-point responsibility. However, there is no scope for private finance and the entire cost needs to be borne by SIE. Tariff Structure The capital and operation and maintenance costs of the CETP should be calculated and affordability analysis should be performed among tenant companies which will continued ⊲ SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 63 send the wastewater to the centralized treatment system or benefit from recircu- lated water. The affordability analysis will evaluate the contribution of factories to the proposed CETP and their willingness to pay for the wastewater/water tariff to be set. It will identify the expected initial capital outflow to design and build the CETP, the fore- casted operating and maintenance costs, its expected revenue streams for providing the service, and other cash flow items. As a result of this analysis, a wastewater tariff can be set to achieve financial sustainability at SIE for this service infrastructure. The tariff rates across the three PPP structure options should be estimated such that there is 20 percent equity returns to the private operator and the net project life-cycle cash flows for SIE should be zero in net present value (NPV) terms. It is observed that there has to be a trade- off between higher private (deferred) financing and higher tariff rates versus lower private (deferred) financing and lower tariff rates. A decision on the tariff rate to be charged to the industries in SIE may be taken by SIE’s BOM based on the selected project struc- ture, acceptance in the market, and confirmation of offtake of reuse water by consumer industries. in the IE to go beyond conventional solutions. The scoring matrix should respond to each of the following criteria to move SIE toward an EIP pathway: • Desired discharge water quality (this will be identified based on discharge standards) • Ease of operation and maintenance (the skilled personnel will have a role to play) • Land requirements (the unoccupied land in SIE allocated in the master plan for service infrastructure will identify this criteria) • Energy and maintenance costs (the electricity tariffs will help select the energy-intensive technologies which will help in revenue generation through selling of circulated water) • The flexibility against flow rate and hydraulic fluctuation (the consistency—in volume—of the inflows will identify this criteria) • Waste sludge production potential (the potential usage of generated sludge by other sectors and the technology for sludge drying will help identify this criteria). Based on the scoring from the selection matrix, wastewater technologies detailed below can be better evaluated and selection is completed for the specific land where the industrial park is located. The innovative wastewater treatment technologies widely preferred at industrial parks are detailed below. From the consolidated data gathered from SIE, the biological and chemical pollution content of the generated wastewater is high, and there is a need for removal of nutrients from the effluents, particularly carbon (C), nitrogen (N), and phosphorus, and reduce COD content. Advanced biological wastewater treatment technologies maximize the recycling and recovery processes of wastewater components while providing high nutrient removal efficiencies. The most widely employed method by industrial parks is activated sludge treatment with anaerobic digestion. With the developed technology, membrane bioreactors (MBR) are also successful to ensure high water treatment performances and quality at discharge points. 64 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB The wastewater of SIE is dominated by pharmaceutical, food, textile, and similar sectors that bring high load of nitrogen and phosphorus to discharge points. The removal of such nutrients is essential to meet discharge limits and ensure environmental conservation at discharge points. There are three well-known wastewater treatment technologies to remove biological nutrients from wastewater: (a) MBR, (b) sequence batch reactor (SBR), and (c) conventional activated sludge systems. From the ease of operation point of view, conventional activated sludge systems are used worldwide and among all the alternatives, they are the easiest to operate. Due to the membrane clogging problems, the MBR process can create difficulties during operation. SBR is a more suitable system in terms of ease of operation compared to MBR systems. From the effluent quality point of view, the highest quality is achieved by the MBR systems as a result of microfiltration technology employed. In the SBR systems, pumps are used for treated wastewater discharge. The settling depth of the pumps is designed so that the bottom sludge will not pull out. However, while operating the system, when mixed liquor suspended solids concentration is high, depth of the clear phase decreases and height of the bottom sludge increases after sedimentation of activated sludge. During these periods, the bottom activated sludge can also be discharged within the treated effluent during the discharge through pumps. This may cause decrease in the quality of the treated wastewater due to unseparated COD, suspended solids, and nutrient concentrations. From the ‘need for area to install’ point of view, the MBR system stands out among others as there is no need for final clarifier tank and solid-liquid separation process. In addition, aeration tanks are smaller in MBR processes. Conventional activated sludge processes need more land compared to MBR and SBR. The SBR process does not have final clarifier tanks and returned sludge pumping station, and the volumes of the aeration tanks are same as conventional activated sludge systems. So, SBR systems need less area compared to conventional activated sludge systems. Also, instead of final clarifiers, a filtration unit can be placed in this process. From the operational expenses point of view, MBR systems have disadvantages in terms of operational expenses due to their high power consumption and frequent fouling of membranes. On the other hand, in conventional activated sludge system and SBR system, energy and maintenance costs are lower. From the ‘resilience to hydraulic fluctuations’ point of view, the conventional activated sludge system is more advantageous compared to other alternative systems regarding the resistance to hydraulic loading fluctuations and peak pollution loads. In MBR systems, the performance of the biological nutrient removal process is affected significantly by peak pollution loads. This poses a major disadvantage in operation. In SBR systems, filling volume and process will be unfavorably affected by the hydraulic fluctuations, but equalization tanks can help reduce fluctuations. Among three processes, the conventional systems cause the highest sludge generation. Where available, industrial parks with high sludge generation put in place energy generation technologies if calorific value of the sludge allows. The least sludge generation occurs at the MBR process. Due to the high cost of membrane microfiltration and the need for more efficient control- automation system, the capital cost for MBR process is higher compared to the conventional and SBR process. However, due to the ability to treat large volumes with different and unpredictable pollutant characteristics, where the streams from domestic and industrial use are mixed, MBR systems offer high quality of treatment at industrial parks and help with generating revenue in case the recycled water is sold. SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 65 Solar PV The potential captive generation of solar power in SIE can be a significant renewable source of energy with impacts on the competitiveness and resilience of the IE. The high cost of electricity in Pakistan makes the investment in solar power more attractive compared to other technical solutions due to • Lower maintenance and operation costs, • Optimization of underutilized space, and • Reliable supply of energy (high solar insolation factor). The investment costs could be higher than other countries, since most of the solar panels should be imported (additional cost – customs duty) and local developers have taken the first steps in this sector only in recent years. Some feedback from resident firms in SIE shows that there is still a lot of misinformation about potential benefits of solar power. SIE should take the lead on this issue and on the one hand evaluate direct investment in solar power to reduce the dependency on the grid and increase sustainability and resilience of the IE. On the other hand, SIE should arrange workshops with clean PEECA and resident firms to provide basic tools on existing regulation, incentives on renewable energy (solar), and operators in the solar power sector. Based on the preliminary assessment, SIE has a potential capacity of 17 MW or 50 MW depending on the coverage factor, respectively, 10 percent or 30 percent of the total area. Considering the current occupancy rate (60 percent), the potential capacity to be installed by the actual resident firm can vary between 10 MW and 30 MW, with an average investment per firm between US$20,000 and US$60,000 with 10 years payback time and 20 years of operation. The potential GHG emission reductions could be around 8,000 CO2e tons per year or 24,000 tons per year, considering 10 MW or 30 MW, respectively. FIGURE 9. Solar power potential in SIE - Preliminary assessment Source: Energy Sector Management Assistance Program (ESMAP), World Bank Group. 66 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 3.2.3 SOCIAL Prerequisites (SPR) The two social prerequisites assess the industrial estate/park in relation to organization and social infrastructures to ensure that the minimum requirements are in place for the implementation of the interventions necessary to gauge the performance indicators. There are no issues with the social prerequisites. SIE has taken proper actions to establish social quality standards and invested in social infrastructures. Performance Indicators (SPI) The 11 performance indicators cover three areas: • Social management system (SPI1, SPI2, SPI3, SPI4, SPI5) • Social infrastructure (SPI6, SPI7, SPI8, SPI9) • Local community outreach (SPI10, SPI11). SIE has in place mechanism and procedures to manage occupational health and grievances, but most of the social performance indicators require interacting and measuring the quality of services with stakeholders (resident firms, employees, and local communities). Even though it has not been possible to analyze data on most of the social performance indicators, the actions required are implementable without significant changes in SIE’s modus operandi. 3.2.4 ECONOMIC Prerequisites (ECPR) The four economic prerequisites are designed to reveal the capacity of the IE to plan the economic development in a sustainable way, supporting employment generation and local businesses. A sensitive aspect that emerges from the analysis of the economic prerequisites is the planning of investments in green infrastructures with the involvement of resident firms to identify technical and financial opportunities. Some of the interventions (solar power for captive generation) can be implemented by SIE as green infrastructure or by resident firms to optimize their energy cost. Planning with relevant stakeholders can facilitate SIE in the process of increasing both sustainability and competitiveness. TABLE 17. List of social prerequisites Code Prerequisites/Evidence Checklist Result Details Action SPR1 Dedicated personnel exist (as part of the park Yes/No Yes SIE has in place a system to management entity) to plan and manage social apply and manage social quality quality standards. standard. SPR2 Essential primary social infrastructure has been Yes/No Yes SIE has invested in adequate adequately provided in the site master plan and is social infrastructures. fully operational in the park. SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 67 TABLE 18. List of social performance indicators Unit (Target CODE Description/Requirement Value) Result Details Action SPI1 Resident firms should have an OHS management Percentage of Not SIE has in place a system SIE can collect system in place (based on ISO 18001 standard) firms (75%) available to monitor O&H available data and keep records about rates of injury, from resident occupational diseases, and absenteeism, as well firms as total numbers of work-related fatalities. SPI2 Percentage of grievances received by the park Percentage 100% SIE has in place a management entity which are addressed within of grievances grievance system 90 days (100%) managed by the OWO SPI3 Percentage of grievances received by the park Percentage of Higher SIE has in place a management entity which were brought to grievances (60%) than 60% grievance system conclusion managed by the OWO SPI4 Percentage of all firms in the industrial estate/ Percentage of all Not SIE can collect park with more than 250 employees that have firms (75%) available available data a code of conduct system in place to deal with from resident grievances firms. SPI5 Percentage of all firms in the industrial estate/ Percentage of all Not SIE can collect park with more than 250 employees that have a firms (75%) available available data harassment prevention and response system in from resident place firms. SPI6 Percentage of the surveyed employees’ reporting Percentage Not SIE can collect satisfaction with social infrastructure of surveyed available available data employees (80%) from resident firms. SPI7 Percentage of reported security and safety issues Percentage of 100% SIE has in place a security that are adequately addressed within 30 days reported security system to monitor the and safety issues entire IE. (100%) SPI8 Percentage of all firms in the industrial estate/ Percentage of Not SIE already promotes SIE can collect park with more than 250 employees with firms (75%) available capacity building in a available data a program for skills/vocational training and training center located in from resident development the IE. firms. SPI9 Percentage of female workforce who benefit Percentage Not Resident firms in the SIE can collect from available supporting infrastructure/programs of female available pharmaceutical sector available data for skills development workforce (percentage of pharma from resident (≥20%) companies in SIE: 28%) firms. have the highest rate of qualified female workforce (around 50%). SPI10 Over 80 percent of the surveyed community Percentage Not SIE shall collect members are satisfied with the community of surveyed available available data dialogue. community from community members (80%) members. SPI11 Number of outreach activities implemented by Number of Not SIE shall arrange the park management entity annually that are outreach available and launch regarded as positive by over 80 percent of the activities per community surveyed community members year (2) outreach activities. Performance Indicators (ECPI) The five economic performance indicators measure three main impacts of the IE on local economy in terms of • Employment generation (ECPI1, ECPI2); • Local business and SME promotion (ECPI3, ECPI4); and • Economic value creation (ECPI5). 68 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 19. List of economic prerequisites CODE Prerequisites/Evidence Checklist Result Details Action ECPR1 The park management entity has plans to Yes/No Yes PIEDMIC is an active generate specific numbers and types of jobs member of SIE BOM, (including diversity and inclusiveness) in line providing guideline from with government targets. regional government. ECPR2 The estate/park management entity allows Yes/No Yes and promotes the establishment of SMEs that provide services and add value to park residents. ECPR3 A market demand and feasibility study, Yes/No Partially SIE is evaluating to SIE needs to perform supported by a business plan, for specific Yes establish a CETP. market demand analysis ‘green’ infrastructure and service offerings for renewable energy to has been undertaken to justify planning and assess the feasibility of implementation in the industrial estate/park. captive generation. ECPR4 Tracked by the park management entity, Yes/No Yes PIEDMIC is an active the industrial estate/park fulfills relevant member of SIE BOM, government targets, including domestic, providing guideline from FDI, and tax revenues. regional government. TABLE 20. List of economic performance indicators CODE Description/requirement Unit (Target value) Result Details Action ECPI1 Percentage of total workers employed in the Percentage of More than Most of the industrial estate/park who live within daily employees (60%]) 60% workers live commuting distance within 50 km from SIE. ECPI2 Percentage of total firm workers in the industrial Percentage of Not SIE can collect estate/park employed through direct employment employees (25%) available data from resident (that is, not employed on a fee-for-output basis firms. or provided through a labor supply firm) and permanent contracts ECPI3 Percentage of resident firms using local suppliers Percentage of firms Not SIE can collect or service providers for at least 80 percent of their (25%) available data from resident total procurement value firms. ECPI4 Percentage of total procurement value of the park Percentage of total More than Most of the management entity supplied by local firms or procurement value of 90% services are service providers the park management supplied locally. entity (90%) ECPI5 The ratio of rented or used space by resident firms Average occupancy More than 498 resident compared to the total amount of available space rate over 5 years 60% firms/750 firms earmarked for resident firms within industrial parks (50%) (maximum capacity) Based on the analysis of the results, SIE needs to engage with local communities and resident firms to collect data, monitor contribution to local economies, and support promotion of local firms. The required interventions can be addressed by SIE without changing the current operation management. SUNDAR INDUSTRIAL ESTATE COMPARISON AGAINST THE INTERNATIONAL EIP FRAMEWORK 69 4 Recommendations for SIE 4.1 Establishment of a ‘Green Cell’ and Leveraged Manpower to Monitor EIP Related Performances As a first step, SIE, together with PIEDMC, should assess the capabilities and capacity of any existing unit and personnel dealing with daily energy, water supply, waste and other environmental management issues. Majority of the observed gaps indicate the strong need for a dedicated green management unit, committed to the purpose of initiating, monitoring, and managing sustainable operations and transformation toward an EIP. Where the number of personnel is insufficient for monitoring such measures, external consultants may be hired to meet SIE’s needs to improve its green branding and conduct a detailed gap analyses to prioritize the actions to meet EIP performance criteria and prerequisites. The stakeholder interviews highlight that the reporting and monitoring of only the mandatory parameters are undertaken by the resident firms to particular agencies (for example, the EPD). A new reporting line on particular parameters relevant to EIP Framework can be built to monitor the performances of the firms and suggest improvement where required. A dedicated unit—‘Green Cell’—for greening SIE could be entrusted with the transformation of SIE, from design and development of green measures; monitoring and reporting with the firms across the pillars of the EIP Framework; to liaising with PIEDMIC, EPD, and PEECA on policy and regulations and with the firms on implementation, among others. Figure 10 illustrates the prospective green cell responsible for measuring, monitoring, and reporting by the resident firms to implement the greening of SIE. SIE should consider developing internal capacities to measure and track resource consumption (for example, water and electricity) more frequently to eradicate billing discrepancies. Communications will be the key for a successful implementation of greening strategies and ensure a continuous stakeholder engagement. The unit should have frequent interactions with representatives from the resident firms. It would be beneficial to employ consultants/technical experts to extend technical assistance to assess the feasibility of potential EIP interventions (for example, resource efficiency, cleaner production, and industrial symbioses) The EIP experts can support the prospective green unit at SIE to operationalize a greening strategy aligned with the key recommendations: from the EIP comparison study relevant to closing the gap on prerequisites to the improvements of EIP performance indicators. RECOMMENDATIONS FOR SIE 71 FIGURE 10. Three-layer governance structure of green cell TIER 3 EIP EXPERTS LEVERGE CAPACITY AND SUPPORT @TIER 1 SIE MANAGEMENT TIER 1 & 3 SIE MANAGEMENT HELP FACILITATE EIP IMPLEMENTATION @TIER 2 RESIDENT FIRMS AND EIP EXPERTS TIER 3 TIER 2 TIER 1 SIE Management Resident Firms EIP Experts TIER 3 TIER 1 SIE MANAGEMENT REPORTS TO PIEDMC EIP Implementation Collaboration Reporting lines on EIP Performances TABLE 21. Minimum number of specialized personnel for the management unit Tier Stakeholders Department No. of Personnel from Management Units 1 SIE Authority Occupational Health and Safety 1 Zoning and Licensing 1 Environment 1 Infrastructure Technical Services 1 Natural gas and fuel 1 Water 1 Electricity Financial Services 1 Accounting and finance PIEDMIC 1 representative to be updated remotely on a regular basis 2 Resident firms Across sectors operating in SIE Selection of companies to represent respective sectors; could be rotated on an annual basis 3 Experts Environment, engineers, RECP Roster of individuals and firms created, specializing and industrial symbiosis experts, in resource efficiency and EIP design and economists, urban planners, and development (domestic and international expert/ energy specialists consultant pool) Potential partners: PEECA, the Urban Unit A deep dive review of the current practices at the SIE Authority and the resident firms will shed light on a high number of good practices and identify areas of improvement across the four pillars of EIP indicators pertaining to policy instruments, institutional capacities, environment management systems, and financial allocation for greener development. For technical assistance, the resident firms generally mobilize their in-house expertise which in the end result in materializing 72 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB ‘low-hanging fruits’. However, there could be untapped opportunities with higher potential for savings and returns. There could be audit services mobilized by the in-house green cell by close collaboration with PEECA to develop feasibility studies and explore potential resource efficiency and industrial symbiosis initiatives. These activities will help facilitate unlocking the opportunities for green branding of SIE and enhancing competitiveness of the firms. 4.2 IE-wide Systematized Environmental and Energy Management Systems Given the voluntary nature of ISO-related management standards in Pakistan, the regulations do not mandate adherence to them. Hence, it is mostly the large enterprises that have a code of conduct/ISO-oriented management systems in place to go beyond regulatory compliance in ensuring higher-quality standards and avoidance of adverse impacts on the natural environment. Being a key prerequisite for EIPs, SIE needs to pursue ISO 50001 (Energy Management System) and ISO 14001 (Environmental Management System) certifications to meet the EIP indicator requirements as it moves toward an EIP Framework. SIE can collaborate with PSQCA to adopt internally recognized EMS and with PEECA on EnMS certifications. PSQCA was established and operationalized under Act No. VI in 1996. It is tasked with enforcement and implementation of quality and environmental management systems, that is, ISO:9001-2000 and ISO:14000, and assistance to local industries to obtain certifications for these systems. One of the objective of PSQCA is to assist manufacturing and services sector to obtain quality management systems and environment certification under ISO:9000 and ISO:14000. SIE is recommended to consult with PSQCA and arrange a workshop to get a better understanding of the requirements to fulfil, procedures to follow, auditing frequency, and the manpower to mobilize to operationalize an environmental management certificate. Based on the key takeaways from the interactions, SIE should prepare a realistic plan along with responsibilities, required budget and training, and timeline to adopt this system. For a legitimate EnMS certification, commitment of top management is a vital issue. Successful implementation depends on commitment from all levels and functions of the organization. Although the facility is new or the operators are well-informed, it is not possible to have a successful EnMS implementation unless the system is established systematically. A systematic EnMS will help overall energy performance of SIE to be improved so the production and consumption data will be measured continuously and in detail. A successful EnMS depends on the team that has internalized the issue and has a high motivation. In Pakistan, PEECA is the key institution that can help SIE move on this agenda forward and help once it is operationalized. SIE should initiate the communications with PEECA in adoption of an ISO 50001 and potential technical and monetary support. SIE is an ideal IE given the high energy-intensive sectoral breakdown it hosts where ISO 50001 can be piloted and demonstrated to be replicated in other IEs. This activity can be anchored in the Government of Pakistan’s vision as energy efficiency improvement has been identified as one of the key elements for achieving energy security plan by 2030. RECOMMENDATIONS FOR SIE 73 4.3 Facilitate Industrial Symbioses Opportunities Industrial symbioses can occur both within the borders of SIE where the companies may exchange their wastes to be utilized as raw material or off the borders of SIE where the resident companies can have a long-term waste exchange agreement with particular companies operating in adequate sectors to sell or give away their waste. In mixed IEs, industrial symbioses opportunities are higher for resident firms compared to those implementable in specialized (single- sector) IEs . In identifying and materializing an industrial symbiosis opportunity, one of the main impediments is to access or exchange information about operations among resident companies. This market failure (exchange of information about operations) can be addressed through mechanisms that improve information flow among resident firms. A matchmaking platform or broader technology platforms are in use in Spain, Germany, France, Turkey, and the United States to tackle this problem. Some low-cost potential industrial symbioses opportunities based on SIE’s company profile are summarized in Table 22. TABLE 22. List of industrial symbiosis relationship among resident firms in mixed IEs Symbiotic Relationship Waste Giver Waste Taker Use of textile scraps and trimming material Textile company Building materials in production of composite and laminate manufacturer construction materials Use of the organic waste from food industry in Food industry Animal feed manufacturer animal feed production Use of calcium carbonate wastes from chemical Chemical company Paper producer industry in paper production Capture and recovery of carbon dioxide from Chemical company Food, cosmetics, agriculture chemical processes to produce dry ice Ceramic waste alternative raw material for Ceramic manufacturing Cement manufacturer cement manufacturing company Metal grinding wastes can be made into Metal production company Iron and steel producer briquettes after they leave oil and used as raw material in iron steel production. Waste dyes can be used as additives in concrete Chemical company Construction sector production. Oxidized particles mechanically separated from Aluminum production Steel manufacturing company oxidized aluminum wastes to be used as inputs to company the steel industry Use of fibrous and granular waste from plastic, Plastic, rubber, and textile Building materials, rubber, and textile sectors in production of company automotive manufacturer composite material for sound insulation Use of PVC waste in production of hydraulic acid Plastics manufacturer Chemical company and chlorinated products Use of the sand of iron casting in ceramic Metal producer Ceramics producer production Use of linen fiber waste in production of yarn and Textile Textile, building, automotive, polymer composite rubbery manufacturer 74 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB To systematize the waste exchange and mainstream industrial symbioses opportunities, SIE can establish a technology platform along with a dynamic waste exchange portal. This platform will help with (a) opportunity identification, (b) consultancy on the implementation, and (c) monitoring of the results to demonstrate. Within the waste portal, volunteer resident firms can disclose the amount and type of their waste and a matchmaking process can be undertaken for their utilization by other companies. It should be noted that there could be regulatory limitations on exchange of some waste materials. The waste should be approved first as nonhazardous to be registered under the portal. For that reason, a characteristics and regulatory analysis will be needed before delving deeper into detailed due diligence on the identified industrial symbiosis opportunity. The matchmaking activity will require a proactive communication with the resident firms, raising awareness and sharing the results from implemented projects. Going forward, based on the experience gained, a technology platform may provide insights on other EIP implementation opportunities (RECP, energy efficiency, and water efficiency). To help the firms with upgrading, where needed, this platform may provide a list of technology providers per each listed EIP intervention. For the projects that may require mezzanine and high-cost investments, the available financing opportunities by means of credit lines, concessional loans, green funds, and their terms and conditions can be made available through a ‘financing tools’ layer embedded into this platform. A conceptual outline for a matchmaking platform which can be embedded into a technology platform is illustrated in Figure 12. FIGURE 11. Illustrative technology platform structure List of Technology Ongoing Providers update Communications Waste Portal Information Technology on firms platform Results NACE codes, Best available case studies, volume of technologies on EE, illustrative production Match- RE, CP, IS* Financing impact making tools Note: CP = Cleaner production; EE = Energy efficiency; IS = Industrial symbioses; RE = Resource efficiency. RECOMMENDATIONS FOR SIE 75 FIGURE 12. Conceptual architecture of an industrial symbiosis matchmaking platform Localized solutions Expedited adoption of global innovative technologies Business Deploy Regulatory model and technology analysis track record solutions Commerciali- Contract Deal zation of the IS drafting and structuring and opportunity due diligence negotiation Circularity Facilitation Pooling waste Preliminary concepts Embedding waste portal in of IS data screening match- an EIP technology platform opportunity making Volunteer firm disclosure of Match waste making of firm/waste User entry of data data Delivery for preliminary Legal Business Technical screening advice advice advice 4.4 Raising Awareness among Tenants on EIP Benefits Table 23 presents a list of sectoral opportunities for greener manufacturing based on the World Bank Group’s experience globally. 4.4.1 FACILITATE ENERGY EFFICIENCY AND RENEWABLE ENERGY The identified energy efficiency and renewable energy intervention opportunities are mainly related to improving boilers, water chillers, compressed air systems, lighting, process equipment, heating, ventilation, and air-conditioning (HVAC) systems, and implementing solar PV and heat recovery. These opportunities corresponded to a total average savings of 10 percent for energy (correspondingly 10 percent GHGs). 76 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 23. List of sectoral opportunities for greener manufacturing in IEs Energy Efficiency Sector Key Energy Efficiency Opportunities/Technologies Potential (%) Manufacture of Boilers 1–5 food products • Boiler flue gas economizer for heat recovery • Improve insulation on boiler end plates and pipework • High-efficiency motors for primary heating pumps Renewable potential 0–5 • Solar PV potential Chilled water ~1 • Chiller head pressure controls to modulate condensing temperatures • High-efficiency pumps with inverter drives for chilled water circulation Compressed air systems ~1 • Install master controller • Inverter drive for secondary compressor • Heat recovery to water to boilers for the summer season Lighting systems <1 • Replace all existing fluorescent lighting with high-efficacy LED alternatives under automated control Manufacture of Steam systems 5–10 textiles • Change steam traps throughout the site to venturi orifice-type traps to limit energy loss through mechanical trap failure. • Improve insulation on steam boiler end plates and distribution pipework Process equipment – stenter machine heat recovery 5–10 • Install air-to-air or air-to-water heat recovery systems on stenter exhausts to utilize heat for hot water processes or stenter preheating Compressed air system 2–4 • Improve leak identification and repair procedures • Install master controller for all compressed air systems • Install heat exchanger to recover heat to hot water to support processes • Upgrade compressor set with high-efficiency inverter drives Process equipment – jet dryer motor upgrades 0–5 • For jet dryers which are driven by standard efficiency motors in a belt and pulley arrangement, replace with high-efficiency motors in a direct drive arrangement Renewable potential 0–5 • Solar PV potential Humidifier ventilation <1 • Replace existing axial fan motor with high-efficiency EC alternative with in-built inverter drive Lighting systems <1 • Replace all existing fluorescent lighting with high-efficacy LED alternatives under automated control Manufacture Lighting systems ~1 of rubber • Replace all existing fluorescent lighting with high-efficiency LED alternatives under automated control and plastic products Process equipment – motors ~1–15 • Upgrade motor efficiencies across all sites to high-efficiency IE3 alternatives to optimize performance for all weaving processes Chilled water <1 • Upgrade AC fan motors to high-efficiency EC alternatives Process equipment – insulation <1 • Use thermal imaging to identify gaps in insulation on exposed elements of extruder equipment continued ⊲ RECOMMENDATIONS FOR SIE 77 TABLE 23. List of sectoral opportunities for greener manufacturing in IEs (Continued) Energy Efficiency Sector Key Energy Efficiency Opportunities/Technologies Potential (%) Manufacture Renewable potential 5–10 of steel and • Solar PV potential fabricated metals HVAC systems ~2 • Review control set points on gas-fired heating systems around site • Install plug fans with high-efficiency EC motors for fan-based heating systems Lighting systems 1–2 • Replace all existing fluorescent and metal halide lighting with high-efficacy LED alternatives under automated control Compressed air systems ~1 • Improve leak identification procedures • Review options for dividing a compressed air pipework network into smaller localized systems • Improve maintenance procedures for cleaning of fins and filter on air intakes and outlets Cooling tower <1 • Replace AC fans with EC alternatives under inverter control Automated metering 3–5 • Install submetering for key energy accountable centers Process equipment – ventilation <1 • Replace existing kiln/exhaust fan motors with high-efficiency alternative with new modulation control and inverter drive Process equipment - powder coating ovens, smelters, kilns, and furnaces 3–5 • High-efficiency automated modulating burners • Recover waste heat for preheating metals and warming burner intake air [a] • Improve insulation levels to prevent heat loss Process equipment – motors 1–2 • Include energy efficiency checks and cleaning in regular motor maintenance schedules Process equipment - main heating oven <1 • Improve insulation levels for main process oven • Replace main heating oven recirculation fans with direct drive EC alternatives Other Process support systems and building services 0–8 manufacturing • This included automated metering and monitoring, compressed air, lighting, HVAC (for building environment conditioning), chilled water (for process support), heating (for process support), ventilation (for process support), steam systems (for process support), and others Direct process systems 0–8 • This mainly included process machine motors and drives and direct thermal processes such as kilns ovens and furnaces. • Direct process systems are sector specific, and many of the support services opportunities could be applied to systems across nearly all sectors as they are systems (such as compressed air and lighting) that are used widely in the manufacturing sector Energy generation and renewables 0–8 • This included solar PV, CHP, and heat recovery steam engines 78 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB 4.4.2 FACILITATE WATER EFFICIENCY Overextraction of groundwater through wells can cause significant salinity problems. This problem is escalated during dry seasons due to the accumulation rate and intensity of salts. Extraction groundwater shallows the groundwater tables and cause poor quality in the extracted water. The largest quality problem relates to a major saline intrusion into the basin aquifer, apparently caused by overpumping at water supply well fields. The manufacturing sectors, most notably textile, pharmaceutical, and food processing, are water intensive and in addition to that require high-quality water similar to that of distilled water. pH levels will increase with salinity until the water reaches calcium carbonate (CaCO3) saturation. The impact of pH change is logarithmic. For instance, a difference between pH 6 and pH 5 represents a tenfold increase in acid concentration; a change of just 0.3 represents a doubling of acid concentration. Variations of pH can affect flavor, consistency, and shelf life of food products. Adjusting pH at a desirable level will require adding buffering agents to overcome those fluctuations. It is recommended that SIE lowers groundwater extraction, pursues alternative water supply methods, and instills the water efficiency practices at the firm level. Table 24 lists some water efficiency practices that can be adopted at firm levels. TABLE 24. List of water efficiency practices at firm level in IEs Water Efficiency Sector Key Water Efficiency Opportunities/Technologies Potential (%) Manufacture of Better process control 20 food products • Employ master control units for cooling towers and supply cooling water regulated by online monitoring of operational parameters (for example, temperature, conductivity, and hardness) • Integrate automation in cleaning-in-place (CIP) systems for increased water and chemical efficiency • Maintain better process control in steam boilers to prevent unnecessary production of steam which needs to be bypassed • Complete missing sections of condensate recovery system in steam collection line Recycling and reuse of wastewater 8 • Treatment of vegetable/fruit rinsing wastewater and reusing in the same processes Process improvement 2 • Replace inverted bucket steam traps with ball float steam traps • Implement inverter controls in cooling tower fans for adjusting air ventilation need in the cooling towers Technology change 3 • Replace radial fan-driven water cooling towers with axial fan-driven water cooling fans to increase cooling efficiency and decrease water losses Good housekeeping 1 • Regular maintenance of steam traps and prevent steam leaks Alternative/sustainable water resources 8 • Rainwater harvesting for processing/treating to be used in various processes continued ⊲ RECOMMENDATIONS FOR SIE 79 TABLE 24. List of water efficiency practices at firm level in IEs (Continued) Water Efficiency Sector Key Water Efficiency Opportunities/Technologies Potential (%) Manufacture of Better process control 2-3 textiles • System automation for backwashing of ion exchangers by means of continuous monitoring of operational parameters (for example, conductivity and hardness) Process improvement 10 • Replace current overflow rinsing practices with fill-and-draw rinsing • Cascaded rinsing (counterflow) can be applied between consecutive rinsing baths of dying/washing machines Technology change 18-20 • Employ continuous washing with countercurrent water/textile flow after dying and printing operations • Replacing conventional flat textile printing machines with digital printing machines • Use of pressurized water guns instead of current washing by compressing the end of the open-ended hose for equipment cleaning and floor washing Recycling and reuse of wastewater 5 • Reuse of slightly contaminated rinsing water generated in dying processes for cooling purposes • Use of ion exchange resin backwash water instead of fresh water for dissolution of salt used in reactive dying • Reuse of fabric opening machine wastewater in pre-rinsing before dying processes Alternative/sustainable water resources 7 • Rainwater harvesting for processing/treating to be used in various processes Manufacture Better process control 5 of steel and • Employ master control units for cooling towers and supply cooling water regulated by online fabricated monitoring of operational parameters (for example, temperature, conductivity, and hardness) metal products, except Technology change 20 machinery and • Replace water-based surface preparation process (dipping tanks and so on) with mechanical equipment (waterless) surface preparation Process improvement 10 • Replace overflow rinsing processes with fill-and-draw rinsing • Install an integrated automation system for the whole surface preparation a process • Install covers on top of tanks to prevent evaporation losses of chemicals, water, and energy • Apply cascade rinsing with counterflow approach where appropriate (needs enough space) Good housekeeping 3 • Place drain boards between process tanks to prevent drips from work pieces to the floor and recover drag-outs • Increase the drip (drainage) time above process baths to decrease drag-outs Alternative/sustainable water resources 30 • Rainwater harvesting for processing/treating to be used in various processes continued ⊲ 80 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB TABLE 24. List of water efficiency practices at firm level in IEs (Continued) Water Efficiency Sector Key Water Efficiency Opportunities/Technologies Potential (%) Other Better process control 19 manufacturing • Employ master control units for cooling towers and supply cooling water regulated by online monitoring of operational parameters (for example, temperature, conductivity, and hardness) • Maintain better process control in steam boilers to prevent unnecessary production of steam which needs to be bypassed • Complete missing sections of condensate recovery system in steam collection line • System automation for backwashing of ion exchangers by means of continuous monitoring of operational parameters (for example, conductivity and hardness) • Prevent overflows encountered in cooling towers from time to time by means of better process control in the whole cooling system • Implement inverter controls in cooling tower fans for adjusting air ventilation need in the cooling towers Technology change 7 • Replace radial fan-driven water cooling towers with axial fan-driven water cooling fans to increase cooling efficiency and decrease water losses • Use of pressurized water guns instead of current washing by compressing the end of the open-ended hose for equipment cleaning and floor washing Process improvement 1 • Replace old technology steam traps (for example, inverted bucket steam traps) with better technologies (for example, ball float steam traps) Good housekeeping 1 • Regular maintenance of steam traps and prevent steam leaks Alternative/sustainable water resources 13 • Rainwater harvesting for processing/treating to be used in various processes RECOMMENDATIONS FOR SIE 81 5 Conclusions and Key Enablers for Punjab EIPs In Pakistan, many industrial processes are resource intensive. Employing resource efficiency methods as part of the implementation of the EIP Framework in IEs will save considerable resources and resource-related costs. Even though it seems costly to implement, investment payback on most resource efficiency techniques/technologies can be relatively short (for example, less than four to five years). When several inter-firm collaborations are created, significant resource savings are often achieved through spontaneously developed circular economy strategies. In addition to resource efficiency and circular economy measures taken within and between the tenant firms, realization of green infrastructure opportunities creates considerable impact on the resource utilization and environmental performance of EIs. Some examples of green infrastructure opportunities that can enable EIs to save tremendous amount of energy, water, and raw materials are rainwater harvesting, efficient street lighting, water distribution system renovations, electricity generation from biogas, and reuse of treated wastewater. The EIP Framework in Punjab will constitute an important policy tool which assists to create and facilitate increased productivity and competitiveness of the Punjab IE ecosystem as a whole. In addition to fostering industrial development, the EIP Framework implementation will help balance regional development gaps and form collaborative relationships between stakeholders. The EIP Framework strategies reduce the IEs’ dependency on nonrenewable resources and thus increase their resilience to shortage in supply. International or multinational companies seeking new plant locations will consider the possible advantages of EIPs. Benefiting from the state-of-the-art green infrastructures (for example, steam supply), ability to develop/maintain byproduct exchange, access to resource efficiency consultancy, and proactive marketing opportunities for their supply chains will attract them, which will lead to increased FDI to Pakistan. Planning and establishing an EIP Framework in Pakistan as well as rehabilitating/rebranding the existing IEs will need more time and resources when compared to ‘business as usual’ practices in conventional IEs. For instance, setting up an industrial symbiosis network between tenant firms requires matching tenant firms based on their outputs and material/feedstock needs. The green infrastructure to connect facilities (through pipeline, conveyor, or road) may also demand additional resources. Moreover, management of a EIP will need funds to market, recruit potential tenants, and facilitate feasible material exchanges. Main Recommendations to GoPunjab to Enable the Implementation of the EIP Framework • While adopting the International EIP Framework, compliance with the national, provincial, and local regulations is an absolute requirement for all IEs, regardless of their specific geographic location and characteristics. It is not sufficient to just put in place the right legal framework, but the key is CONCLUSIONS AND KEY ENABLERS FOR PUNJAB EIPS 83 to enforce its compliance. In addition to IE managements, resident firms are required to comply to all applicable national and local laws, regulations, and standards. However, IEs are struggling to ensure the enforcement of environmental requirements at the firm level. SIE is collaborating with the EPD to suspend rendering basic services to resident firms not adhering to the environmental law. It is a preliminary step to address the problem but does not solve the necessity of developing IEs structurally so that the legal requirements are in place and operational since the establishment of each tenant firm. Financial feasibility of main infrastructures (including, but not limited to, WWTP, air monitoring, water distribution, and renewable energy) should be secured as a precondition to release license to operate to IE developers. • Tenant firms require qualified support to increase their energy and water efficiency. Potential improvements can be obtained by investing in renewable energy, RECP, and water/treated wastewater reuse. Promoting and supporting the use of nonoperational areas to maximize the generation of renewable energy in IEs could be the first step toward the increase of sustainability of industrial areas. Assisting IEs to maximize the recovery of water (rainwater) and reuse of treated wastewater could partially mitigate the exploitation of ground water for industrial use. Those interventions can generate two important benefits: (a) increase the resilience of the industrial area, ensuring business continuity (energy and water are essential for many industrial processes), and (b) increase of competitiveness—the levelized cost of energy of solar energy is below commercial tariffs in many countries.20 • The economics of WWTPs in IEs could be improved assessing potential additional streams of revenues associated with (a) reuse of wastewater, increasing quality with tertiary treatments; (b) recovery of biogas from secondary treatment of the STP; and (c) recovery of metals from sludge. It is important to improve the specifications for the feasibility studies of WWTPs, with the aim of maximizing the revenues and optimizing the investment and minimizing the service fee for the tenant firms. The potential increase of investment due to the suggested additional systems/ treatment units should be assisted by market demand analysis among resident firms. The benefits for the resident firms consist of (a) potential investment savings (no water treatment plant at the firm level) due to the supply of process water directly from the WWTP to resident firms; (b) lower service fee, if biogas is recoverable and used to reduce operating expenditure of the wastewater plant; and (c) lower service fee, if metals are recoverable from sludge and sold to the market. However, the aforementioned benefits for IEs in adopting the EIP Framework—including better compliance with the environmental, health and safety legislation; improved efficiency; increased revenue; improved reputation; operational resiliency; ability to attract and retain new tenants; and better access to finance—surpass the invested time and human/capital resources. Thus, the EIP Framework should be seen as a competitive advantage rather than a pure environmentalist movement for existing IEs as well as for institutions planning to establish new IEs in Pakistan. Annex 1: LAA 1894 Under Section 9, the Collector serves a public notice for possession of land and for claims to be made by the interested persons. The notice is displayed at convenient places on or near the land to be acquired. The notice will also be served to the land occupier and nonresidents on their last known address. In response, the interested persons can raise objections or claims in writing with signature of the party. 20 EU Market Outlook for Solar Power 2019–2023, Solar Power Europea 84 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB Under Section 10, the Collector may reach out to the people interested in the land or any part in the form of co-proprietor, sub-proprietor, mortgagee, tenant, or otherwise, and of the nature of such interest, and of the rents and profits (if any) received or recoverable on account thereof for next three years preceding the date of the statement. Every person required to make or deliver a statement under this section or Section 9 shall be deemed to be legally bound to do so within the meaning of Sections 175 and 176 of Penalty Code. After completing inquiry of measurements, value, and claim, the Collector issues the final award under Section 11. The final award is announced after the appropriate compensation is determined by invoking Section 23 and Section 24, which outline the compensation and criteria to be followed (Section 23) or not to be followed (Section 24.) Section 23 establishes the market value of the land at the time of Section 6 notification and various damages occurred at the time of land possession. Section 24, meanwhile, establishes matters not to be considered in award compensation, such as degree of urgency, disinclination of the interested person, and expected increase in land value linked to its future use. Afterward, under Section 12, the final award is filed in the Collector’s Office as the final evidence between the Collector and person(s) interested, who are notified of this filing by the Collector. Section 12A establishes the provisions for the correction of the accidental slip or omissions, to be corrected by the Collector upon his/her detection or application by the interested person(s). The Collector has the powers of adjournment of enquiry under Section 13 from time to time for any reason he/she considers fit. Under Section 14, the Collector has the powers to summon and enforce attendance of witnesses including the interested parties or any of them and to compel production documents for entertaining enquiries in the same manner as is provided in the case of a civil court under the Code of Civil Procedure. Under Section 15, the Collector can consider any matter he/she deems neglected in the determination of compensation under the guidance of provisions contained in Sections 23 and 24. After the announcement of the final award by the Collector, land possession is completed under Section 16. This establishes that the land absolutely belongs to the government and it is free from all encumbrances. Section 17 deals with the special powers in case of urgency. It states that in case of urgency, the provincial government directs the Collector to issue notice under Section 9 with 15 days’ response time to interested parties. After 15 days, the Collector can take possession of any waste or arable land needed for public purposes or for a company. Such land shall be considered vested with the government and free from all encumbrances. The Collector is bound, at the time of taking possession of such land, to offer compensation for standing crops and trees to affected person(s). If any interested persons have not accepted the award, under Section 18, they may request, in writing, the Collector to refer the case to the court within six weeks from the date of the final award. This does not affect the possession of the land. Under Section 19, the Collector submits a comprehensive written statement to the court. The statement provides information for complete land details, name of interested person(s), amount of damages, calculation basis of compensation, objections to the compensation amounts, notices served to public and interested parties, and statements in writing made or delivered. Under Section 20, the court serves a notice related to land or the amount of compensation to interested person(s), applicants, and the Collector, directing them to appear in person on a CONCLUSIONS AND KEY ENABLERS FOR PUNJAB EIPS 85 specific date on which the court will proceed to hear the objections. According to Section 21, the scope of the inquiry in every such proceeding shall be restricted to a consideration of the interests of the persons affected by the objection. Under Section 22, the court has the powers to conduct the proceedings in the open Court, and all persons entitled to practice in any civil court in the province shall be entitled to appear, plead, and act (as the case may be) in such proceedings. Section 23 testifies that in determining the amount of compensation to be paid for land acquired under this act, the Collector shall consider the following: • Market value of land at the date of publication of notification under Section 4 • Damage sustained, by reason of the taking of any standing crops or trees at the time of the Collector’s taking possession thereof • Damage (if any) sustained, at the time of taking possession of the land, by reason of severing such land from his/her other land • Damage (if any) sustained, at the time of taking possession of the land, by reason of the acquisition injuriously affecting his/her other property or his/her earnings • If, in consequence of the acquisition of the land, the person interested is compelled to change his/ her residence or place of business, the reasonable expenses, if any, incidental to such change • The damage sustained by diminution of the profits of the land between the time of the publication of the declaration under Section 6 and the time of taking possession of the land • 15 percent over and above the cost of the land determined by the Collector as charges for acquisition. For land acquisition for companies, 25 percent is paid over and above the cost of the land determined. In accordance with Section 24, the following matters shall not be considered in the determination: • The degree of urgency which has led to the acquisition • Any disinclination of the person interested to part with land acquired • Any damage sustained by him/her which, if caused by a private person, would not render such a person liable to a suit • Any damage which is likely to be caused to the land acquired after the date of publication under Section 6, by or in consequence of the use to which it will be put • Any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired • Any increase to the value of the other land of the person interested likely to accrue from the use to which the land will be put • Any outlay or improvements made without the sanction of the Collector after the date of the publication of the notification under Section 4. Section 25 relates to the rules for establishing the amount of compensation in the situations when the applicant has made a claim to compensation, when the applicant has refused to make such a claim or has omitted without sufficient reason, and when the applicant has omitted for a sufficient reason (to be allowed by the judge) to make such a claim. Section 26 states that every award shall be in writing signed by the judge and shall specify the amount awarded. The award shall be deemed to be a decree and the statement of the grounds of every such award to be a judgment within the meaning of concerned sections. Section 27 declares that every award shall state the amount of costs incurred in the proceedings under this part, and by what persons, and in what proportions they are to be paid. The costs shall 86 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB ordinarily be paid by the Collector unless the court directs him/her for deduction from the applicants’ cost. Section 28 relates to the opinion of the court that the sum which the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation. The court may direct that the Collector shall pay interest on such excess at the rate of 8 percent per year from the date on which the Collector took possession of the land to the date of payment of such excess into the Court. Sections 29 and 30 are related to particulars of apportionment to be specified and dispute as to apportionment. Sections 31 to 34 relate to payment or deposit of compensation in the court, investment of money deposited in respect of lands belonging to persons incompetent to alienate, investment of money deposited in other cases, and payment of interest. Sections 35 to 37 relate to the powers conferred to the Collector under the act for temporary occupation of waste or arable land and payment of compensation. Sections 38 to 44 pertain to authorization of the company to enter and survey, industrial concerns to be deemed a company for certain purposes, previous consent of the provincial government and execution of agreement necessary, previous enquiry, agreement with the provincial government, and publication of the agreement. Sections 39 to 42 not to apply where the government bound by the agreement to provide land for companies and how the agreement with the Railway Company be proved. Sections 45 to 55 relate to various other situations. CONCLUSIONS AND KEY ENABLERS FOR PUNJAB EIPS 87 Annex 2: PLGA 2013 The District Council is mandated to control land use, spatial planning, land subdivision, land development, and zoning by public and private sectors for any purpose, including for agriculture, industry, commerce, and other employment centers, residential, recreational, parks, entertainment, passenger and transport freight, and transit stations. Union Councils, with the approval of the District Council may perform the following functions: • Prevent encroachment on state or local government property and violation of land use and building laws, rules, and bylaws • Report environmental and health hazards to the concerned authorities • Exercise control over land use, land subdivision, land development, and zoning by public and private sectors for any purpose, including for industry, commerce markets, shopping and other employment centers, residential, recreational, parks, entertainment, passenger and transport freight, and transit stations • Enforce all municipal laws, rules, and bylaws regulating their functioning • Provide, manage, operate, maintain, and improve the municipal infrastructure and services, including water supply, sewage and sewage treatment and disposal, storm water drainage, sanitation and solid waste collection, sanitary disposal of solid, liquid, industrial, and hospital wastes, and so on. Municipal Committees, in addition to the functions of the Union Council, have the following independent functions: • Prepare spatial plans for the local government including plans for land use and zoning • Approve spatial plans after due process of dissemination and public enquiry, incorporating modifications based on such inquiry • Execute and manage development plans. Metropolitan and municipal corporations, in addition to the functions of the Union Council and the Municipal Committee, have the following independent functions: • Approve spatial plans, master plans, zoning, and land use plans, including classification and reclassification of land, environment control, urban design, urban renewal, and ecological balances • Implement rules and bylaws governing land use, housing, markets, zoning, environment, roads, traffic, tax, infrastructure, and public utilities, • Approve proposals for public transport and mass transit systems and construction of express ways, flyovers, bridges, roads, under passes, and inter-town streets • Approve development schemes for beautification of urban areas • Develop integrated system of water reservoirs, water sources, treatment plants, drainage, liquid and solid waste disposal, sanitation, and other municipal services • Exercise environmental control, including control of air, water, and soil pollution in accordance with federal and provincial laws and standards. Under Schedule IV of LGA 2013, local governments have the following powers to try the offenders in court concerning IE operations: 88 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB • Discharging any dangerous chemical, inflammable, hazardous, or offensive article in any drain, sewer, public water course, or public land vested in or managed, maintained, or controlled by the local government in such manner as causes or is likely to cause danger to persons passing by or living or working in neighborhood, or risk or injury to property. • Failure of industrial or commercial concerns to provide adequate and safe disposal of affluent or prevention of their mixing up with the water supply or sewerage system. • Violation of the prohibitions provided in the master plan, the sanctioned Site Development Schemes under this act, or any other law for the time being in force including the plans and schemes sanctioned under the repealed enactments. In case of large cities, development authorities (for example, Lahore Development Authority, Multan Development Authority, and Faisalabad Development Authority) have been established with the delegated development functions of the metropolitan corporations and municipal corporations. Development authorities have prepared city-specific master plans with clear demarcation of zones, including industrial zones. If the proposed IE is not located in the demarcated industrial zone, the proponent will apply for the change of land use. Further, local governments have the following special powers regarding IE establishment: • Acquisition of land/property whenever the local government considers it necessary for a public purpose under LAA 1894 • Approval of change of land use and charging of appropriate fees to the proponent • Fixing of rate and collection of property tax under Punjab Urban Immovable Property Tax Act 1958. PLGA 2013 addresses the environmental pollution control for waste under (a) Fourth Schedule, Part I (Sr. No: 1): discharging any dangerous chemical, inflammable, hazardous, or offensive article in any drain or sewer, public water course, or public land; (b) Part II (Sr. No: 23A): dumping of solid waste and refuse by any person or entity on a place other than landfill or dumping site, notified or designated by the concerned local government; and (c) Fifth Schedule (Sr, No: 26): damaging or polluting physical environment, inside or outside private or public premises, in a manner to endanger public health. CONCLUSIONS AND KEY ENABLERS FOR PUNJAB EIPS 89 Annex 3: Industrial Air Quality Limit Values 12th August 2016 The following Notification No. SO(G)/EPD/7-26/2013, dated 05.08.2016 regarding the Punjab Environmental Quality Standards for Industrial Gaseous Emissions is published for general information: DR SYED ABUL HASSAN NAJMEE Secretary Government of the Punjab Law and parliamentary affairs Department Government of the Punjab Environment Protection Department NOTIFICATION No. SO(G)/EPD/7-26-2013-In exercise of the powers conferred under clause (c) of sub-section (1) of section 4 of the Punjab Environmental Protection Act, 1997 (XXXIV of 1997), the Environmental Protection Council has approved the following as the Punjab Environmental Quality Standards for Industrial Gaseous Emissions: PUNJAB ENVIRONMENTAL QUALITY STANDARDS FOR INDUSTRIAL GASEOUS EMISSIONS (mg/Nm3, UNLESS OTHERWISE DEFINED) No. Parameter Source of Emission Standard 1 2 3 4 1 Smoke Smoke opacity not to exceed 40% or 2 Ringlemann Scale or equivalent smoke number 2 Particulate matter(1) (a) Boilers and furnaces: (i) Oil fired 300 (ii) Coal fired 500 (iii) Cement Kilns 300 90 TOWARD AN ECO-INDUSTRIAL PARK FRAMEWORK IN PUNJAB (b) Grinding, crushing, clinker 500 coolers and related processes, metallurgical processes, converters, blast furnaces and cupolas. 3 Hydrogen Chloride (HCI) Any 400 4 Chlorine (CI2) Any 150 5 Hydrogen Fluoride (HF) Any 150 6 Hydrogen Sulphide (H2S) Any 10 7 Sulphur Oxides (2)(3) Sulfuric acid Sulfonic acid plants 5000 Other plants except power plants 1700 operating on oil and coal 8 Carbon Monoxide (CO) Any 800 9 Lead (Pb) Any 50 10 Mercury (Hg) Any 10 11 Cadmium (Cd) Any 20 12 Arsenic (Ar) Any 20 13 Copper (Cu) Any 50 14 Antimony (Sb) Any 20 15 Zinc (Zn) Any 200 16 Oxides of Nitrogen Nitric acid manufacturing unit 3000 Other plants except power plants operating on oil or coal: Gas fired 400 Oil fired 600 Coal fired 1200 Explanation: 1. Based on the assumption that the size of the particulate is 10 micron or more. 2. Based on 1 percent sulfur content in fuel oil. Higher content of sulfur will cause standards to be pro-rated. 3. In respect of emissions of sulfur dioxide and nitrogen oxides, the power plants operating on oil and coal as fuel shall in addition to the Punjab Environmental Quality Standards (PEQS) specified above, comply with the following standards: A. Sulfur Dioxide Sulfur Dioxide Background levels Microgram per cubic meter (ug/m3) Standards Background Air Annual Max. 24 Criterion I Criterion II Quality (SO2 Basis) hours Max. SO2 Emission Max. Allowable ground level Average Interval (Tons per Day per plant) increment to ambient (ug/m3) (One Year Average) Unpolluted < 50 < 200 500 50 Moderately Polluted* Low 50 200 500 50 High 100 400 100 10 Very Polluted** > 100 > 400 100 10 * For intermediate values between 50 and 100