Environmental Technologies Industries

Environmental Technologies Industries

Market Plans

Mexico Environmental Export Market Plan

2. Environmental Policies and Trends

Past Policies and Progress (1995–2000)

Environmental protection was a primary goal of the preceding administration of President Ernesto Zedillo, and progress was made on several fronts. Giving added impetus to that effort was Mexico’s ascension to the NAFTA and other international trade treaties. The Zedillo administration is credited with strengthening the General Law of Ecological Balance and Environmental Protection in December 1996. Those changes increased the responsibilities of municipalities and states and increased sanctions, including criminal penalties for polluters. The administration also sought to increase the participation of the private sector in bringing new investment into all segments of the market, but particularly into the water and wastewater areas.

National Development Plan 1995–2000 set forth the aggressive environmental program of the Zedillo administration. The specifics were outlined in the chapter “Environmental Policies for Sustainable Growth.” That chapter made an overall assessment of the state of the environment in 1995, laid out general policy goals, and then set specific targets for 2000. The government further refined its environmental goals in two additional policy documents: “Environmental Program 1995–2000” and “Hydraulic Program 1995–2000.” Table 2.1 shows the progress made toward the goals set forth in those plans.

As Table 2.1 shows, Mexico achieved success in meeting many of its goals, particularly in delivering potable water and sewage services to an increasing percentage of the population. Important increases were also made in air quality monitoring. Much-needed capacity was built for the treatment of bio-hazardous waste. Environmental investment increased significantly, although it fell beneath the $4 billion target. The goal of treating 82 m

/s of wastewater was not met largely because of the lack of progress in building major new wastewater facilities in Mexico City and Guadalajara. Those projects are expected to materialize during the current administration.

As for hazardous waste, the past administration developed a very comprehensive program, which depended on major private-sector investments for the construction of integrated centers for treatment and disposal of hazardous waste (CIMARI). Social opposition to the siting of those facilities led local officials to refuse the necessary permits to construct them. As a result, the safe confinement and disposal of hazardous wastes remain a critical environmental problem in Mexico. The government has decided to give full responsibility for these projects to SEMARNAT, which will work with local governments to address the siting and licensing issues.

Pending Environmental Challenges

Water

Mexico has increased dramatically its potable water coverage and now has the second highest coverage ratio in Latin America, trailing only Chile. One of the key challenges facing Mexico is that, although it has abundant water resources, most of those resources are located away from the major population centers. In the northern and central regions of Mexico, where 70 percent of the population is located, water resources are scarce. That uneven distribution of resources has resulted in the overexploitation of aquifers, the contamination of surface water bodies, and the destruction of aquatic ecosystems. To reverse those negative impacts, Mexico must vastly improve management of its water resources by restoring aquifers, improving the efficiency of water distribution, enhancing water conservation, and treating its wastewater before returning the wastewater to the country’s surface waters. All those challenges must be accomplished in the context of limited investment dollars amid a growing population and increasing industrial activity.

Wastewater Treatment

At present, 78 percent of municipal wastewater and 85 percent of industrial wastewater are returned to water bodies without adequate treatment. Most progress in building new municipal wastewater treatment capacity has been achieved in tourist zones and in the northern border region. Elsewhere progress has been limited. Both Mexico City and Guadalajara, which are Mexico’s two most populous cities, still discharge most of their wastewater without any kind of treatment. The Mexico City project, the most important municipal wastewater project in the country, has been stalled despite having received a financial credit from the Overseas Economic Cooperation Fund (OECF) in 1997. Many other large cities continue to discharge their untreated waters and are now in violation of regulation NOM-001-ECOL-1996. This regulation required all cities with more than 50,000 persons to have treatment capacity in place by Jan. 1, 2000.

Table 2.1 Results of the Environmental Programs, 1995-2000

Area	Situation in 1995	Proposed Goal for 2000	Situation in 2000
Water	76.6 million inhabitants served potable water	Serve 86.9 million inhabitants potable water	87.5 million inhabitants served potable water
	70 m³/s of installed capacity	Reach 75 m³/s of installed capacity for potabilization	78 m³/s of installed capacity for water potabilization (1999)
	Over 55 percent of water distributed not metered	Strengthen municipal water utilities to improve metering and collection	39.9 percent of water distributed not metered (1999)
	Sewage 56 million inhabitants served	Serve 60.6 million inhabitants	73 million inhabitants served
Wastewater	17 m³/s treated	Treat 82 m³/s	43 m³/s treated
	60 percent of wastewater treated on the northern border	Support the state and municipal authorities of 22 northern border cities to increase their levels of wastewater treatment	75 percent of wastewater now treated; also, all border cities have planned wastewater treatment projects and 31 water or wastewater treatment projects were built or are under construction
	Address situation in most polluted systems	Build new treatment capacity in the Valley of Mexico (Mexico City) and the Lerma-Santiago system	Almost all wastewater in Mexico City still untreated
Solid waste	30 percent of all municipal waste not collected	Reach 90 percent in collection and dispose of 75 percent in adequate landfills	80 percent of the municipal waste collected and 48 percent disposed in adequate landfills
Hazardous waste	8 million metric tons generated per year	Promote minimization in generation and recycling	Many companies structured minimization programs, but robust industrial growth leaves the volume generated unchanged
	Inadequate regulatory framework	Improve legislation to allow for the efficient management of hazardous waste	Legislation still inadequate
	Insufficient infrastructure for confinement	Promote construction of integrated centers for treatment and confinement of hazardous waste	No new confinement infrastructure built and operating; several notable failures of private attempts to build new capacity
	Insufficient infrastructure for treatment of bio-hazardous waste	Promote creation of infrastructure and services for the control of bio- hazardous waste	Current capacity of 24,870 kg/hr; although overall capacity is sufficient, some regions still lack facilities
Air pollution	One PROAIRE operating in Mexico City	No specific goal set	Seven PROAIRE operate in cities with highest air pollution levels in Mexico
	Five cities with air-quality monitoring systems	No specific goal set	15 cities with air-quality monitoring systems
Investment	Environmental investment estimated at $1.8 billion in 1995	Environmental investment of over $4 billion	$3.761 billion estimated investment
Institutional framework	Limited availability of environmental information	Development of the National System for Environmental Information	Comprehensive registry established for hazardous waste generators; increased monitoring of air and water quality; increased number of environmental impact assessments and risk studies completed

m3/s = cubic millimeters per second
Source: Based on information from the National Development Plan 1995–2000, Environmental Program 1995–2000, Hydraulic Program 1995–2000, CNA, SEDESOL, INE, and CONIECO.

The industrial sector, particularly large corporations, has seen notable progress in controlling its water discharges. The larger corporations have been the focus of enforcement efforts, and other corporations are part of the country’s voluntary environmental audit program. Larger corporations also have the financial resources to invest in advanced treatment technologies. This effort has created a growing market for industrial wastewater treatment technologies and services. Increasingly, mid-sized and smaller companies will be compelled to take action to curb their water discharges as well. As municipalities build new wastewater facilities, industry will be pressured to end illegal discharges into sewers, as those discharges can damage municipal facilities.

Solid and Hazardous Waste Management

Mexico still greatly lacks infrastructure and services in both hazardous waste and municipal solid waste. Less than half of such waste receives proper handling, confinement, or treatment, in part because of a lack of enforcement and in part because of a lack of facilities to handle this waste stream. The government has tried to promote waste minimization and recycling, but those efforts are only partial solutions. As a result, there are a large number of illegal dumps, and industrial residues are mixed with municipal wastes or discharged into the sewers or water bodies or are improperly stored on site. All those conditions create huge public health and environmental risks.

Air Pollution Control

Air pollution is a severe problem in many large and medium-sized cities in Mexico. INE estimates that vehicles generate over 75 percent of all air pollution in the country, while industries and other fixed sources generate the remainder. The severity of air pollution problems in Mexico’s metropolitan areas has spurred a comprehensive effort to reduce both mobile and fixed-source pollution by implementing PROAIRE. PROAIRE plans have now been extended to cover seven cities, and results have been encouraging. The new administration, in combination with state and municipal authorities, is implementing PROAIRE plans in 10 other cities with more than 500,000 inhabitants. In addition, the government of Mexico City is expanding its current program to cover a time horizon of 10 years. Among the priorities of this expanded plan are the eventual conversion of the public transportation system to natural gas, stricter limits for nitrogen oxide, the regulation of suspended particles under 2.5 microns (PM2.5), and the introduction of TIER II vehicles (vehicles that under U.S. law meet the 2004 to 2006 emission requirements of the 1990 Clean Air Act amendments) in 2007. In addition, the plan will propose reestablishing an environmental trust fund for Mexico City, which will help finance many air pollution control initiatives.

Soil Remediation Technologies

The Procuradur�a Federal de Protecci�n al Ambiente (PROFEPA, Office of the Attorney General for Environmental Protection) is undertaking a program to inventory contaminated sites across the country. The program has moved forward slowly because of lack of funding. To date, 105 contaminated sites have been identified, and remediation efforts have occurred or are occurring at 17 of those sites (see Table 7.3). The U.S. Environmental Protection Agency (U.S. EPA) is working with Mexican authorities to determine the feasibility of doing brownfield redevelopments on some of those sites.

In addition, Mexico has started a national register of hazardous waste generators. That initiative is spurring companies to end illegal discharges and to fix past damage from illegal discharges.

Other Equipment and Services

The federal government is increasingly pushing responsibility down to municipal governments, particularly in the areas of water and municipal solid waste. Further, 1999 reforms to article 115 of the Mexican Constitution granted wider environmental authority to the municipalities, making them more clearly responsible for enforcing environmental regulations.

At the local level, both environmental infrastructure, such as wastewater treatment or secure landfills, and institutional capacity and financial resources are often lacking. Mexico’s federal government, in combination with the World Bank and the Inter-American Development Bank, have developed programs to strengthen the ability of local municipal entities to regulate, operate, and finance necessary infrastructure. This trend will drive a market not only for municipal infrastructure, particularly in the areas of wastewater and solid waste, but also for technologies that allow municipalities to be more efficient in their operations and more effective in their oversight of environmental regulations.

New Policies of the Fox Administration

As this document is being completed, the Fox administration has begun a restructuring of the federal government’s role in the sector, including a reorganization of the primary federal environmental agency, SEMARNAT. The Fox administration will formally present its environmental goals in the soon-to-be published National Development Plan 2001–2006.

Among the changes resulting from this restructuring are the following:

Fisheries responsibilities have been transferred from SEMARNAP to SAGARPA, prompting the change of the agency’s name to SEMARNAT.
The new head of SEMARNAT is V�ctor L�chtinger, former head of the Commission for Environmental Cooperation (CEC), a NAFTA-related agency that promotes environmental cooperation among the three NAFTA partners.
SEMARNAT has begun a review to clarify responsibilities in the environmental sector, including clearly delineating the responsibilities of state and municipal authorities. SEMARNAT is reviewing environmental regulations known as Normas Oficiales Mexicanas (NOMs) and will propose changes to encourage compliance by small and medium-sized companies.
V�ctor L�chtinger named Jos� Campillo Garc�a, former technical secretary of the Exterior Commerce Cabinet of the Presidency, as the new attorney general for environmental protection. L�chtinger announced that the attorney general’s office will be more autonomous and will work more closely with the public.
SEMARNAT formed a working team with members of CNA, SAGARPA, the Secretariat of Economy, and the Secretariat of Finance (SHCP) to define a scheme for planning, building, and operating water infrastructure.
L�chtinger announced that SEMARNAT will encourage private participation in water infrastructure and in municipal waste collection and recycling projects. The federal government will try to overcome the barriers that have limited private participation in those sectors in the past.
SEMARNAT will prioritize developing new hazardous waste confinement or treatment capacity. It will work with local authorities, citizen groups, and the public to develop a consensus on the need for and siting of new facilities.
SEMARNAT is working on a program to encourage water recycling on the part of large private users of potable water.
The new administration will likely increase environmental expenditures on the Mexico-U.S. border.

SEMARNAT has a budget of $1.44 billion for 2001. This figure represents a 5-percent increase over the previous year and includes the total expenditures for SEMARNAT and its decentralized agencies such as CNA and INE.

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