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Brazilian Industry Attitudes About Environmental Regulation
By Keith R | September 19, 2007
Topics: Economics & the Environment, Environmental Governance, Environmental Protection | No Comments »
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In a recent post I discussed the results for the southern Brazilian state of Santa Catarina (SC) of a special survey about industry’s environmental concerns conducted by the National Confederation of Industries (CNI). I’ve gotten my hands on the national level results for the survey, and thought I would pass them along.
The survey updated one done in 2005 on the same issues. 1491 companies responded to the 2007 survey — 818 classified as small, 438 as medium-sized, and 235 as large. The survey data was collected between 30 March and 20 April 2007.
Among other things, a majority of companies responding to the survey said that they experience delays in getting environmental licenses and excessive demands from regulators, that they take environmental management measures in order to comply with environmental regulations, environmental licensing demands and/or company policies, and that they plan to make investments in environmental protection this year. The survey also suggests that companies are becoming more sensitive to the environmental concerns of their consumers and the role that environmental management can play in reducing process costs.
Environmental Licensing
In the survey, 84% of the respondents said that they must have environmental licenses (those in the alcohol and petroleum refining said they all (100%) need them, whereas only 34.5% of the clothing sector said that they do), and of these, 79.3% have experienced some sort of problem in obtaining their license — that’s up from 73.6% in 2005. Among large firms, the percentage is even higher: 83.2%.
Who complains most about licensing? Alcohol, at 100%, followed by petroleum refining at 90.9% and non-metalic minerals at 90.1%. It is worth noting (as CNI certainly does!) that several sectors registered a 16 or more point jump in their responses compared to 2005: furniture, basic metallurgy and metal products.
Who complains the least? The plastics sector, at 57.8%, followed by machines and equipment at 69.4% and clothing at 70.0%.
The most frequent complaint? Environment agency delays in analyzing their application, at 66.9% — up from 63.2% in 2005 (when it also was the #1 complaint).
In the South [Paraná, Rio Grande do Sul and Santa Catarina], Southeast [Espírito Santo, Minas Gerais, Rio de Janeiro and São Paulo] and Center-West [Goiás, Mato Grosso and Mato Grosso do Sul] states, this category rose by at least five points over 2005; in the Northeast [Alagoas, Bahia, Ceará, Maranhão, Paraíba, Pernambuco, Piauí, Rio Grande do Norte and Sergipe], it did not rise.
The petroleum refining sector complained about this most, at 90%.
This complaint was followed (respondents were allowed multiple reasons) by:
- the cost of meeting the agency’s demands – 52.0% [the sector most complaining about this was pulp and paper, at 68.4%]
- dealing with the technical criteria demanded by the agency – 42.6%
- the cost of preparing the studies and paperwork – 39.0% (down significantly from 2005, when it was 45.9%. This issue fell over a dozen points in the North [Acre, Amapá, Amazonas, Pará, Rondônia, Roraima and Tocantins] and South states. The sector most complaining about this — electronics and communications equipment, at 63.6%.
- the difficulty in identifying specialists on the issues that their case treats – 15.6% (up from 11.1% in 2005) [this appears to be a particular problem in the furniture industry, 40% of which complained about it].
Dealing with the Environment Agencies in General
85.1% of the responding companies said that they have relations with an environmental agency (click graphic to enlarge), and 68.8% of those said that they have experienced some sort of problem at some point in the relationship (up three percentage points from 2005). The percentage was highest regarding agencies in the Southeast states (hardly surprising, since these have a reputation as some of the nation’s toughest).
Which industry sectors complained the most? [Click on table at right to enlarge.] Rubber, where 90.9% of respondents said that they had problems in their dealings with environment authorities, followed by printing (82.6%) and petroleum refining (81.8%).
The ones complaining the least? Plastics at 48.9%, followed by machines and equipment at 56.6%, and furniture at 56.0%. [Temas Observation: it is interesting to note that the plastics industry seems the least upset about both how they are handled by environmental agencies and their environmental licensing procedures. What might account for that?]
The most frequent complaint? “Exaggerated requirements in regulations,” at 59.9% — but that’s down from 64.1% in 2005.
This was followed (respondents were allowed multiple reasons) by:
- the costs of complying with environmental regulations – 53.1%
- the complexities of the regulations – 50.3%
- the lack of technical preparation by inspectors – 23.3% [The sector complaining most about this: cleaning and perfumes (45.5%)]
- too frequent changes in regulations – 21.2% (up significantly from 2005, when it was 15.9%). The biggest regional rise in this complaint? The North states, which rose from 21.9% in 2005 to 35.7% in 2007.
- the behavior of inspectors – 16.8% (roughly the same as in 2005). [The two sectors complaining the most about this: basic metallurgy (32.3%) and cleaning and perfumes (31.8%). By contrast, the drinks and electronics sectors both indicated no problems of this sort.]
[Temas Observation: Interesting that the two biggest complaints by the cleaning/perfume sector involve inspectors. It appears that this sector and environmental regulators might benefit from greater dialogue.]
Company Environmental Management Procedures
When asked whether or not their company had adopted internal environmental management procedures, 75.5% replied in the positive — up only a bit from 2005 (73.9%). Regionally speaking, the greatest growth in companies adopting new environmental management procedures came among the Center-West states, up 5.6 points to 71.2%. The sector with the biggest jump from the prior survey was cleaning and perfume, up 26.2%.
The respondents were asked their motivations for adopting the measures, and allowed to provide multiple rationales (click on bar graph at right to enlarge). The top three reasons are not really a surprise:
- complying with environmental regulations (58.1%) [the sector with the highest response on this point: drinks, at 78.3%];
- company policy (51.6%); and
- meeting demands of environmental licensing (51.4%) [the sector with the highest response: food, at 50.9%].
The mixture of the other reasons cited is interesting, though. Notable are:
- the rise in respondents saying that they are meeting consumers’ environmental concerns (19.9% to 24.4%) [interesting that the SC results on this point were much higher (33%)] [the three sectors with the highest response rates: drinks (34.8%), extractive (29.7%) and food (27.6%)];
- reducing the costs in their processes (16.7% to 19.3%).
Other interesting responses to note:
- the sector with highest response on “in order to improve their image in society” — extractive, at 35.1% (followed by drinks, at 26.1%);
- the sector claiming to do so in order to follow company social policy — extractive, at 56.8% (followed by drinks, at 52.2%);
- the sector claiming to do so in order to improve product quality — drinks, at 21.7%. It should be noted that among large firms, this reason jumped 6.6% points from 2005 to 2007.
Industry Investment in Environmental Protection
Finally, asked if they planned to make investments in environmental protection during 2007, 79.0% said yes, nearly identical to 2006. [The highest responses: 100% by the alcohol and petroleum refining sectors, and rubber at 95.5%. The lowest: footwear, at 53.1%]
When asked how much, expressed in terms of a percentage of their overall investments planned for 2007 (click on table at right to enlarge), 52.0% said they intended to invest under 3%, 37.5% replied that they expected 3-11%, followed by 10.5% intending above 11%.
The sector with the most respondents planning the larger investments (11% or more)? Petroleum refining at 27.3%, followed by pulp and paper at 26.8% and skins (cuoro) at 23.5%.
Tags: alcoholic beverages, bebidas alcoólicas, Brasil, Brazil, clothing, CNI, communications equipment, cuoro, drinks, electronics, environmental licensing, environmental management, environmental regulations, extractive sectors, footwear, furniture, inspectors, licenciamento ambiental, licensamiento ambiental, metallurgy, non-metalic minerals, perfumes, petroleum refining, plásticos, plastics, product quality, pulp and paper, rubber, Santa Catarina
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