INTERNATIONAL ENVIRONMENTAL INTELLIGENCE BRIEF

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005284771
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: June 24, 2015
• Document Release Date: May 27, 2011
• Case Number: F-2008-00831
• Publication Date: August 15, 1997

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International Environmental Intelligence Brief
DCI Environmental Center 15 August 1997
Contents
Articles
EU Seizes Illegal CFC Shipment
Page
India Seeking Funding from Montreal Protocol 3
DCI Environmental Center Begins Work
In Brief
Calendar
Climate Change Talks Make Little Headway
Concerns
South American Project Fuels Environmental
and Business
Chile Struggling To Balance Environment
Drought Affecting China's Grain Crops
Slowly
China Improving Environmental Policy
APPROVED FOR RELEASEL
DATE: 17-May-2011
 EU Seizes Illegal CFC Shipment
The EU -recently announced the seizure
of more than 150 tons of illicit CFCs in the
Netherlands and the arrest of a suspectin
Germany
cooperative effort among EU customs
officials to curb the flow of illicit Russian,
Chinese, and Indian CFCs through
EU member states since January 1995
when CFC production was banned in the
EU. Much of these illicit products are
smuggled into the US.
Customs authorities from Germany,
Belgium, the UK, and the Netherlands-in
conjunction with the EU's Anti-Fraud
Unit-cooperated in the operation that
uncovered the smuggled materials. The
CFCs were brought into the EU from China
using false certificates of origin and declared
as used CFCs for recycling.
Smugglers mislabel virgin CFCs
as product for recycling to take _
advantage of -W rules permitting
a limited quantity of CFCs for recycling
to be imported under a quota system.
about
one-half of the 15,000 to 20,000 tons of
illicit CFCs from Russia are smuggled
into the US each year, much of it
passing through European trading
companies.
In response to growing complaints from
producers of ozone-safe CFC alternatives
and from the Montreal Protocol Secretariat
that EU inaction is fueling the CFC black
market, the Commission has been looking
for ways to tighten up the import licensing
regime for CFCs. EU officials will highlight
this seizure to underscore the Union's
commitment to enforce Protocol provisions
when the Montreal Conference of Parties
meets next month.
 re
 India Seeluna Funding from Montreal
Protocol
The Indian Government is demanding s
funding from the Montreal Protocol
Secretariat for chlorofluorcarbon phaseout
and is insisting that India be permitted to _
export CFCs to other developing countries.
_ New Delhi is trying to defuse potential
criticism by passing and heavily publicizing
laws that encourage compliance with the
Protocol. - _ .. _ __ _
-- At the June Protocol working group
meetings, Indian representatives pushed
for a large increase in :funding for
developing countries in general
-India probably sees US backing for a
proposed World Bank??led project to ___
help finance the closing of Russian CFC
plants as a signal that i.t rni ht ual_ify_
for sixnilar aid.
In addition, India wants to repeal the
Protocol clause that allows industrialized .
countries to export 15 percent of their I98~
CFC output to developing countries and is
demanding instead that India be allowed to
produce for export. The Protocol permits
India to produce for domestic consumption
only.
According to press reports,. the Indian_ _ _
Government in 1995 prohibited new
production capacity for the manufacture of
CFCs and indicated_t intended to: draft a__law
banning the use of CFCs completely by
2010; both are consistent with Montreal
Protocol provisions. Nonetheless, CFC
producers are unlikely to engage in early
phaseout activities and seem intent on
expanding their domestic and international
market share of CFCs while waiting for
international assistance before converting
production to ozone-safe alternatives.
=India expanded its production capacity
from 5,500 metric tons per year in
1987 to 25,000 mt in 1992
--_ Because domestic consumption
amounts to about 6,400 mt per year,
large quantities of Indian CFCs enter
the black market;
 China Improving Environmental Policy
Slowly
Over the. past two months, China's three top
senior political leaders have made positive
statements about the need fox greater
protection of the environment. At a recent
Communist Party forum or- the environment,
Jiang called on government officials to take
the environment into corisicteration when
making policy, according to official Chinese
press reports.
- Li Peng said that China should "never
sacrifice the environment for- temporary
[economic] growth."
- In June Qiao Shi, chairman of the
National People's congress (NPC),
voiced similar concerns, calling for
greater investments iri environmental
protection and arguing that China
cannot afford do .pollute now and clean
up later, according to (~hinese press
reports.
The national legislature and local
communities are showing more activism, but
central and local authoritie;> appear willing
to address environtnental problems only
when it can be done cheaply. Last year the
NPC passed environmental legislation
covering air, water, noise, and solid-waste
pollution and recently promised to do more
this year, according to Chinese press reports.
The National Environmental Protection
Agency (NEPA) is showing signs of __
becoming more aggressive in enforce-
ment. In April NEPA closed 62,561
enterprises identified as severe,polluters in
21 provinces; however, most of the
plants were small smelters, coking plants,
and papermills without much political
influence or a large work farce.
- In prosperous cities, the public is
beginning to speak out on environ-
mental issues, and local governments
are sometimes responding. In
Guangzhou, with the country's highest
urban per capita income, public
demands for a cleaner city led the
municipal government to devote more
resources to environmental cleanup.
- A Beijing citizens' protest last manth
against a local garbage dump for
polluting air and groundwater led the
~
environmental protection
municipal
agency to investigate.
Nonetheless,- ensuring economic growth and
high levels of employment continue to take
precedence over environmental concerns.
We have yet to see movement on key
indicators of policy reform such as the
central government endowing NEPA with
greater enforcement authority or an increase
in spending on environmental technology.
The central government pledged to
invest $21 billion in environmental
programs and equipment during the
current Five-Year Plan (1996-2000),
but Western press reports indicate it has
spent only a small fraction of that
amount.
~~ei~
 -Chinese officials have identified 2010
as the year when China will be
sufficiently developed to dedicate more
resources to environniehtal protection.
cret
 Drought Affecting China's Grain Crops
hina's grain
production is 480 million rnetric tons, about
23 million tons less than the record last year.
This is slightly lower than Beijing's official
forecast of 484. million rnt.
--- Major losses in the corn and spring
wheat crops are expected in the
provinces bordering o~i North Korea,
the east coast provinces of Shandong
and Jiangsu, and in the southern
province of Jiangxi.
- A record harvest of early grains this
sumrner-=mainly winter wheat and the
first of three rice crops-represents only
a fourth of total production and will not
compensate for drouglrt-related losses.
The shortfall is unlikely to have a signi-
ficant impact on Chinese grain imports or
inflation, however. With record grain
imports in 1995 and a ban on corn exports
for the past two years, China's stocks have
risen to nearly 150 million tons
-These supplies are likely to be drawni
down to keep meat anel processed food
prices stable.
Without an increase in Chinese cereal
imports; slow US grain sales-historically
a driver of US exports to China _ will
contribute to the expandin?; trade deficit. In
the first five months of this, year, US cereal
exports declined more than 95 percent as
compared with the same period last year.
$16.9 billion in May and should reach
$53 billion this year.
Tighter supplies in China could reduce its
barter exports and aid to North Korea.
Because food accounts for roughly half of
average household expenditures, according
to o, fficial Chinese press reports, grain
shortfalls in the past have had a substantial
effect on general inflation. Falling grain
prices this year have helped push inflation.
close to zero-retail prices rose 0.8 percent
an the year through May.
 Chile Struggling To Balance
Environment and Busirxess
The resignation last month of the director ____ __
of Chile's National Environmental
Commission (CONAMA) reflects the Frei
administration's dilemma of promoting
economic development while protecting the
environment. Press reports suggest the
former director was pushin g for stricter
environmental controls on a controversial
dam project that Frei supports.
-The new director has little relevant
experience acid is Likely to take a less
critical stance on tie government's
gradualist approach to environmental
protection.
Since its establishment in 1994, CONAMA
has only marginally altered Santiago's
reliance on ad hoc regulatc-ry bodies with
blurred lines of authority. The commission
has few enforcer~nent mechanisms or
resources---its annual budZ;et in_ 1995 was
only $11 million-and its. decisions are
sometimes challenged in the courts.
---The Supreme Court in March annulled
CONAMA's approval of a US-based _
firm's forestry investrent and a local
court delayed the startup of the
GasAndes natural gas pipeline linking
Chile acid Argentina, a project that
includestwo US firms.
Despite such difficulties, Frei last week
announced a new $600 million pollution
control plan for the capital, which will
levy fees on large factories failing to
reduce emissions. CONAMA is analyzing
51 pending investment projects worth
$5 billion, and strict guidelines enacted in
April expand the number of companies
required to submit environmental impact
studies.
Santiago's environmental regime is one of
-the region's most advanced, a point officials
will stress when Chile's eligibility for
NAFTA accession is debated. Chilean
businesses generally are opposed to
including environmental standards in a trade
agreement, but they are unlikely to risk
scuttling a deal unless the conditions
become too onerous.
~'S~tTSil-
 cre
South American Project l~ uels
Environmental Concerns
A Belgian company has started the first
phase of~a project to widen`and deepen the ~~
Parana River, which runs. through Brazil,
Argentina, and Paraguay. -The $700 million
undertaking will facilitate intraregional
trade, but environmental groups argue it will
severely damage Brazil's Pantanal region,
one of the largest wetlands in the world.
- The Brazilian Government, which is _ _
.jointly funding the project with its _ _
neighbors, tends to agree with the
environmental groups
as not empere its support.
Paraguayan President Wasmosy, the
waterway's most ardent supporter, has
published his own environmental study tliaf
concludes the impact will lie relatively
benign. During his recent tour of similar
projects in the US, Wasmosy asked
Washington for $2.5 million to fiend
additional impact studies, apparently to
defuse opposition.
-Construction is likely to continue, as
public support for the project's
economic benefits outweighs concerns
about its environment;~l impact.
ecret
 Climate. Change Tallcs Make Little
I3eadway
The talks that ended lasf week in Bonn to
formulate a negotiating text for a protocol to_
the climate chap a convention made slow
progress The
protocol effort aims to cone u e an
agreement to reduce carbo~z emissions from
fossil fuel combustion by a.December ___ _
ministerial meeting in Kyoto. Argentina and
Brazil were willing to cooperate with
developed countries on emissions trading
and joint implementation, but other _
governments tended to resl.ate their own
positions rather than to compromise.
-Australia and Norway-both major
fossil fuel producers--insisted on
differentiated targets teased on GDP _
energy intensity, per capita~carbon
emissions, or trade dependence on fossil
fuels as the only equitable way to
reduce emissions.
-Thailand (for the Group of 77
developing countries) continued to ~~
demand significant carbon reductions
from developed countries before LDCs
would commit to any donstraints on
their own growing emissions.
The UK (for the EU) and Firance defe_ nded_
the EU approach for one emissions
reduction target to fit all.
Tokyo concentrated its effort on increasing
the pressure on China to rriake emissions
commitments and on attackin the EiJ's
approach In
addition, Japan accepted the US emissions
target budget concept for multiyear
emissions accounting.
Slow progress this summer has given
urgency to ministerials and summits in the
autumn to prepare for Kyoto. New Zealand
_ has proposed a meeting for October in
Toronto to thrash out differences, and Japan
is urging a small ministerial of major OECD
countries plus Russia for November.
re
 DCI Environmental Center Begins Work
The new DCI Environmental Center-wh ch
will be fully operational by 1 October-will _
comprise members of the Intelligence
Community and~reIated civil grid defense
agencies. -The Center's objectives are to _
assess the national security implications of
environmental issues, including the role of
environment in exacerbating regional
instability, conflict, and economic decline.
--~ It will provide direct support to -
policymakers on environmental crime,
treaty compliance, and negotiations.
 In Brief
East Asia
because of opposition from business groups.
from $10 to $4,000 er offense and bans toxic-waste
. imports Suharto may not sign bill
- Indonesian legislature passed revised environmental
protection bill ... includes increase in fines on polluters
- Russia last week ratified Antarctic Treaty's Protocol on
_.._ - -- -
-Environmental Protection ... 25 of 26 Consultative Parties
- on board ... Protocol makes area natural reserve and promotes
safe waste management ...
__ .. _
_ - - -
Americas -- Brazilian senate recently passed first ever environment
....crime law imposing fines, imprisonment for illegal logging,
--
_ .- _ _ _ pollution ... needs approval of the Chamber of Deputies to
become law ... if enacted, will help deter worst violation
_ __ _ lack of resources could impede_effective enforcement.
raziI to auction timber extraction rights in
. _._an_ Amazonian national forest through regulated concession
system to deter illegal logging ...limited manpower, equip-
ment, and budget will hamper enforcement ... harvest to begin
_. by late next month.
11
 Calendar
-- Selected International Environment-Related Meetings
Forum
10-18 September -Ninth Conference of Parties to the Montreal
Montreal Protocol
22.24 September WTO Committee on Trade and the Geneva
Environment
28 September--10 October l~rst Conference of Parties to the Rome
Desertification Convention
7-14 October Fifth Conference of Parties to the Basel Kuaia Lumpur
Convention
13-17 October Ad Hoc Expert Group Meets on Biosafety Montreal
13-22 October Eleventh World Forestry Congress Turkey
20-25 October I7NECE Convention on a Protocol on Geneva
Persistent Organic Pollutants -Working
Group
27-28 October NATO Committee on Challenges
to Modern Society (CCMS), FaII Plenary
27.31 October
Nineteenth Meeting of Parties to the 1972 London
London Convention for the Prevention of
Marine Pollution by Waste Dumping
APEC Workshop on Environmental Osaka
Technology Exchange
30 November Defense Ministerial of the Americas Cartagena
Third Conference of Parties
_ to the Cliinate~hange Convention
12
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