Background

1. Developing a Waste Water Discharge Fee Programme in Sri LankaKolitha Himal Muthukuda ArachchiDeputy Director General, Pollution ControlCentral Environmental AuthorityDecember 14, 2007

2. Background • Discharge of industrial wastewater managed through a licensing scheme called Environmental Protection License (EPL); • Licensing administered by Sri Lanka’s Central Environmental Authority (CEA) as per National Environmental Act; • The EPL is valid for a period of 3 years and is issued only if the industrial facilities demonstrate compliance with existing regulations; • A license fee (of approximately 150 USD) is paid upon issuing of the EPL.

3. Background • Industries discharging waste water into the environment must meet the relevant concentration based standards established by the CEA. • No regulations to restrict the quantity of pollutants discharged into the environment. • As a result, pollution load into the environment cannot be controlled adequately.

4. Disadvantages of EPL System • System is not equitable, since high as well as low polluters are subject to the same license fee; • Irrespective of the load of pollution discharged, only a flat fee is charged for the EPL; • Thus, large industries discharging a high volume of waste and a high pollution load pay the same amount as a small industry discharging a low pollution load.

5. Proposed Waste Water Discharge Fee (WDF) Programme • The WDF system is an example of a market-based instrument; • This is a more equitable system in the sense that the larger the amount of pollution discharged, the more the industrial facility will have to pay; • On the other hand, the smaller the amount of pollution discharged, the less the industrial facility will have to pay.

6. Advantages of the Proposed WDF Programme • This system will induce polluting industries to: • establish of more efficient waste water treatment systems by better process control; • reduce costs by better house keeping; • reduce use of water; • reduce/recycling of treated waste water.

7. Advantages of the Proposed WDF Programme • Enforcement of the system will involve greater private sector participation: • participation of private accredited laboratories; • wider participation of environment technological and consultancy firms.

8. Advantages of the Proposed WDF Programme • Collected charges would generate a separate fund which will be used for environmental management activities in Sri Lanka, including: • Provision of soft loans for waste water treatment systems • Adoption of cleaner production technologies; • Environmental cleanup programs

9. Advantages of the Proposed WDF Programme • When polluters have to pay for pollution based on actual quantity of pollutants they will try to reduce costs and improve efficiency. • This programme benefits both industries as well as the authorities, • by encouraging the industries to adopt cleaner production technology. • recycle waste water. • facilitate enforcement by the authorities.

10. Key Challenges • Application of WDF to non-EPL industries • Legal /institutional overlaps (Board of Investment) • Formulation and collection of fees • Technology transfer and use of funds • Self reporting & impact monitoring

11. Implementation Requirements • Amend National Environmental Act and regulations giving legal effect to the WDF program; • Develop institutional capacity of the CEA for program implementation; • Prioritize industrial sector • Develop load calculation procedure and protocol; • Assist industries to establish flow measuring systems; • Establish the WDF- Fund and administrative structure for its operation.

12. Implementation Strategy • Implement the WDF scheme using sectoral focus (Initially applied to textile, tanning sector, chemical, and sectors) • In first phase, COD is the priority pollution parameter, later to be extended to toxics • Piloting testing will commence from January 2009 and will gradually cover all sectors • Industry awareness / capacity development will be given high priority • Share experience with other countries in Asia

13. Policy Decisions Taken • WDF program will be established as a separate part in the NEA • WDF will be applied in respect of activities that either have an EPL, or are in the process of obtaining an EPL • Administrative fee will be kept at 20%.

14. Work Plan for WDF System • Creation of Technical Support Committee (2007 July) • Legal Reforms • Technical Evaluation • Justification of sector selection. • Institutional needs assessment • Preparation of operational guidelines • Linkages with counterparts in Asia – e.g,. Philippines, Vietnam and China

15. Technical Support Committee • A Technical Support Committee was appointed and is being convened by the Chairman CEA to make technical decisions. The institutes represent are: • The Ministry of Water Supply and Sanitation, • The Ministry of Industry, • The Ministry of Environment, • The National Water Supply & Drainage Board

16. Current Status-Legal Reforms • Legal consultation in progress to incorporate necessary provision to existing law • Proposed provisions cover : • Implementing the WDF Program • Determining the wastewater discharge fee • Collection of wastewater discharge fee • Discontinuance of water supply upon default • Regulations • Maintenance of the resulting revenues • Provision enabling the utilization of such funds[

17. Current Status - Technical Track • Key Considerations: • Type of Pollution • Load/Volume discharged • Point of discharge • Sensitivity of the discharge Area • Developing capacity and capabilities

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