KARACHI, July 17: World Trade Organization (WTO) has recently announced that from January 1, 2005, goods traded among member countries must be certified as manufactured in an environmentally responsible manner.

Pakistan export-oriented industries such as textile and leather tanning industries are under great pressure to comply with these requirements.

In the last three years, international buyers have already begun to require that the product they purchase be manufactured in an environmentally responsible manner.

“If no actions are taken, Pakistan will be at disadvantage,” says a report of the Asian Development Bank (ADB) relating to Industrial Efficiency and Environmental Management Sector Project, which the ADB intends to implement in Pakistan with a view to improve environmental conditions and private sector growth through promotion of best practices in the country’s industrial sector.

The report says that although buyers and the WTO are currently only targeting the first-tier suppliers, they will soon require their second and third tier suppliers also to be compliant with these environmental management requirements.

The ADB has already initiated its efforts to improve environmental conditions of the industries to implement “industrial efficiency and environmental management sector project” in the country.

According to Site Association of Industry, the total cost of the project spanning over five years (2004-2009), is estimated at $140 million of which $100 million will be provided in the form of loan by the ADB.

The project include setting up of six combined industrial effluent treatment plants in selected high priority industrial estates and industrial cluster, establishment of two landfill sites to handle hazardous waste and institutional capacity building including provision of “project implementation consultants” and “environmental and social development/resettlement consultants.

Industrial associations will join hands to establish a private entity to secure loan to build, own, operate and maintain the effluent treatment plants. In order to ensure economic viability of the project the government will lend through the finance ministry the loan received from the ADB to a financial intermediary (which may be PICIC) on conditions to be established at appraisal.

The financial intermediary will re-lend the loan to the private entity responsible for treatment plant operation. This entity would collect service fees from individual industries based on agreed to mechanism and finance any additional investment through the service charge mechanism.

The private entity would ensure that waste water from the treatment plant complies with national environmental quality standards (NEQS). Environmental Protection Agency would monitor the effluent of the treatment plant and impose penalties.

An official in Site Association said that the ADB has identified Sindh Industrial Trading Estate (SITE Limited) as the potential generators of effluent housing industrial activities of 2,200 industrial units, employing 400,000 full time workers and daily wagers. The estimate for the effluent treatment is around $25-30 million.

A meeting of Site Association of Industry was held on July 15 at its office and arrived at the result that the proposal to allow formation of company to avail the opportunity be approved by the general body so that the project be steered without further waste of time.