Developing a Waste Water Discharge Fee Programme in Sri Lanka Kolitha Himal Muthukuda Arachchi Deputy Director General, Pollution Control Central Environmental Authority December 14, 2007

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.

 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. Background

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.

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.

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.

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

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

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.

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

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%.

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

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

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 [ [

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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