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Hobbs Addresses Waikato Environmental Business

Hon Marion Hobbs Speech Notes

Waikato Environmental Business Network, Hamilton. Envirosystems Ltd, 714 Te Rapa Rd. 5.30.pm, 12 October.

Thanks for coming. Thank you even more for being members of such a network – because there is a major rethink that has to occur.

For the last 150 years it has been a given that we can grow the economy – that we can trade our way out of problems and all will be rosy. We can change the landscape and our flora and fauna; we can process our timber, meat and wool and dump the by-products of that processing. We can create more dairy farms and not think of the effect on rivers. We can grow larger conurbations and the infrastructure of roads, power, water, sewerage to support this.

But about 30 years ago, if not earlier, people began to worry about the effects of this. Could we actually sustain this type of unplanned growth? A growth that did not take into account the effects on the environment, or how we lived?

And as we faced these issues we divided into camps. There were those who saw business as the enemy. And the solution was to gain the reins of power – be it local or central government and force businesses into acting responsibly.

There were those who saw any regulation or standard – be it about employment behaviour or environmental responsibility – as a threat to competition or profit and therefore to the economy; and it must be fought right to the end.

Neither school of thought has the answer.

A government can only bring about change if it is working with the community. Certainly it uses legislation and regulation to bring the laggards into line – but governments don't set the standards, if there is not already a groundswell.

Businesses are not the enemy.

Effective business leaders know that their future lies in a balanced social order, in a world where the resources will be there for use in the future.

I don't know if any of you heard the Reith Lectures this year, broadcast on Radio New Zealand. Their topic was 'sustainable development'. The third lecture was given by John Browne, CEO of BP Amoco. In a brilliant lecture, which I recommend to you, (you can find it on the bbc.co.uk web site) he said: "The simple fact is that business needs sustainable societies in order to protect its own sustainability. But in order to sustain what we value, we have to be prepared to change."

So what are the changes we need to make in New Zealand and who needs to make them?

As I see it, business has two major roles:

 Greening your own operations, so that your impact on the environment is well managed.
 Helping consumers to make environmentally friendly choices, in both the products they buy and in associated elements such as packaging

Rather than trying to cover every aspect of these roles today, I’d like to touch on some issues that are topical and important to the work I think we need to do.

Environmental Choice
Some of you may be familiar with the Environmental Choice eco-labelling scheme, an initiative from the last Labour Government.

Then, as now, there was a perceived need for unbiased information for consumers, from an organisation which is clearly independent but which has the confidence of Government. Then as now, it is not easy for even highly motivated consumers to work through all the various claims that products are “eco friendly”, “biodegradable”, “organic”, “free range” or in some way better for the environment.

That is where the Environmental Choice programme came in. Having an Environmental Choice label on a product provides good information to consumers about the environmental impacts of the product. The Environmental Choice programme was also to be an incentive or recognition for businesses seeking to reduce the environmental impacts of their activities.

I would have to acknowledge that Environmental Choice has taken some time to develop a profile, and that more work needs to be done to increase its profile – and the range of products which carry the label.

Its first product ranges were paints and carpets. Only in the last couple of years have licences been granted for everyday items such as toilet paper, and for recycled plastics and other items sold through the Warehouse chain of stores. I would like to see more products which carry the label on supermarket shelves.

Environmental choice has recently received a grant from the Ministry for the Environment’s Sustainable Management Fund. This is so the programme can expand further the range of products it can licence and promote itself more widely to business and to consumers.

This provides Environmental Choice with a platform from which to build.

I am keen to see much wider business support for the Environmental Choice programme. I imagine that business people, including retailers, sometimes wonder what to believe, let alone how to give their customers an assurance that some products are genuinely better for the environment.

The Environmental Choice programme can help both business and society to move towards a more sustainable future. There are two things that businesses can do to support this programme:
 Seek Environmental Choice licences for products that you believe to be environmentally sound
 Where possible stock, or use in your own operations, products which carry this eco-label.

Packaging
Another way that businesses can help customers is by being very aware of the packaging on products you are manufacturing or selling (but remember that you can get an Environmental label for approved packaging, for example, some egg cartons have it).

Clearly packaging is often essential to protect products or people, and to provide instructions and product information. We also know that a great deal of the paper, glass, metal and plastics used in packaging can be recycled.

But we all need to be conscious of where we can reduce packaging, use recycled materials for packaging, or use for packaging material that can be readily recycled.

I note that The Warehouse, which, of course, has greater buying power than many New Zealand businesses, has prepared a packaging guide for its buyers. This guide aims to help suppliers reduce and/or eliminate packaging and to design packaging that is made from recycled materials and can be recycled.

Other major businesses in New Zealand could usefully consider such an approach.

The packaging industry itself is conscious of the need to reduce packaging waste. Through the Packaging Accord, the industry has a formal relationship with the Government aimed at encouraging efforts to minimise the environmental impact of packaging.

I recently launched the Pac-It educational resource, which will help increase understanding of the use and disposal of packing. The development of this resource has been funded by the Packaging Council and the Sustainable Management Fund.

Green markets
I want now, for a few minutes, to focus on those businesses which earn much of their income from overseas markets or from overseas visitors.

In important overseas markets, New Zealand is perceived as a country which produces food, beverages and fibre from a clean and healthy environment, and as a great place to visit.

While our clean green image is probably more of a perception than a reality, it is an important perception underlying our international marketing. New Zealand business builds on these perceptions, eg, in the 100% Pure New Zealand campaign.

However, a recent report prepared for the Ministry for the Environment and TradeNZ indicates some complacency in New Zealand businesses about the need to substantiate our “environmentally friendly” image. The report suggests that, if our exporters do not keep abreast of international trends and develop and promote environmentally sound products, this reputation which adds value and attracts visitors could be at risk.

There is increasing evidence that markets for New Zealand’s export products are becoming more discriminating over time. Environmental concerns are a significant factor in this. Overseas consumers in valuable markets are willing to pay higher prices for environmentally sound products and services.

(Recent visit to Ministry of Agriculture in The Netherlands—having to comply with EU regulations re nitrate [dairying] and disposal of pig manure – 6000 pig farmers to go out of business.)

But there are increasing demands in some export sectors for businesses to demonstrate that products and services are being produced in a sustainable manner.

Businesses that can do this are able to position themselves at the more lucrative, upper end of those markets.

New Zealand businesses can help meet the demand for environmentally sound products and services through developing and using environmental purchasing policies, selecting products carrying credible eco-labels such as Environmental Choice, and developing and implementing environmental management systems in their own operations.


Air Quality
Now turning our attention to air quality – which many Kiwis north of the Bombay Hills have been doing recently. I’m sure that the campaign to raise awareness of air pollution from motor vehicles in Auckland (called 0800 SMOKEY) has come to your attention.

Air quality however is not a problem unique to Auckland. Indeed state of the environment reporting has indicated there are ‘hot spots’ of poor air quality throughout the country, including in the Waikato.

In a 1998 survey 70 percent of people living in the Waikato had noticed no change in air quality in the last few years. They’re right - generally, the Waikato Region enjoys good air quality, but in some areas air pollution can build up. This happens mostly in your inland city and towns. There are four main polluters that contribute to worsening air quality in the Waikato. These are; home fires, industry, livestock farming and motor vehicles.
As a quick snapshot I’d like to give you some findings outlined in the 1998 Waikato State of the Environment report. It identified that particulate matter from home fires and traffic in Hamilton East during winter months rises towards national ambient guideline levels. Surveys at curbside locations in Hamilton’s main street show that carbon monoxide national eight hour air quality guideline, was exceeded in 40% of occasions in the mid-1980’s. I understand that partly in response to such findings, Environment Waikato and Hamilton City Council established in 1996 the Hamilton Motor Vehicle Exhaust Emissions Project to obtain data about transport emissions and to inform the public about the harmful effects of emissions. Transport is not the sole contributor however. I also understand that particulate matter can be a concern in South Waikato and Franklin areas where the large industrial complexes exist.
Agrichemical sprays are nationally a high profile air quality concern – but particularly for intensively farmed areas such as the Waikato. Clearly, it is becoming increasingly important that such discharges are managed in such a way as to enable farming, without adversely affecting health of people and communities.
I believe there is a need to take proactive action before air quality becomes more than just a localised and intermittent problem. The public response to the 0800 SMOKEY campaign In Auckland has been an overwhelming success. This shows that people do care about their air quality and are keen to ensure high quality air is maintained. It is important that councils work alongside business and their communities to protect air quality.
The Government needs to contribute too. Central government is working to clean up vehicle emissions in New Zealand. Among a number of initiatives, we intend to introduce vehicle emissions standards, ensure good quality petrol and diesel fuels and improve the ability for smoky vehicles to be identified and their owners encouraged to do something about this. --- National Environmental Standard on air quality.
For business the ongoing challenge is to ensure your vehicle fleets are regularly serviced so that emissions are minimised.

Climate change
Other emissions that are of concern to the Government are New Zealand’s emissions of greenhouse gases.

These, too, have a great deal to do with vehicles and transport and the “Greening the Fleet” initiative can be significant here too.

Increasingly, climate change is being described by international political and business leaders and the media as the most critical environmental issue facing the world.

No one can be absolutely certain about the effects of climate change or their severity, though scientists expect that it will result in more weather-related disasters, including floods, droughts and violent storms.

New Zealand’s economy, because it is based on agriculture, horticulture and tourism, is particularly vulnerable to disturbances in our climate and extremes of weather.

Compared with other countries, New Zealand makes an insignificant contribution to the climate change problem – we emit about 0.2% of global greenhouse gases. But the risks to our communities and our economy from climate change are significant.

The only way to reduce these risks in New Zealand and the Pacific is to encourage other countries to participate in an international effort. We all need to work together to reduce the build-up of greenhouse gases caused by the use of fossil fuels and deforestation.

New Zealand has ratified the United Nations Framework Convention on Climate Change and we are aiming to ratify the Kyoto Protocol by mid 2002. For industrialised countries – those countries that have been mostly responsible for increases in greenhouse gases since the mid-1800s – the Protocol establishes legally binding targets to reduce emissions.

So we will need to put in place a programme of reducing emissions in accordance with the targets specified at Kyoto.

Achieving these targets will require effort from every sector, particularly those that show the strongest growth in emissions, such as transport.

While agricultural emissions make up most of our greenhouse gas emissions, changes in agriculture mean that our emissions other than carbon dioxide are reducing. But our carbon dioxide emissions are predicted to be about 40% over 1990 levels by 2010, with most of the growth being in transport and electricity generation.

The challenge for the Government is to introduce policies and measures that encourage cost-effective actions in all sectors but avoid actions that are unnecessarily costly or disruptive to businesses, the economy and communities.

The more effort that is made voluntarily by businesses and individuals to reduce emissions, the more likely it is that we can meet our commitments in a cost-effective way. Greening the Fleet is a good start.

Energy efficiency
Businesses should also be looking at their energy efficiency.

This will need to be an important element of reducing our greenhouse gas emissions, along with greater investment in public transport and increasing the use of renewable energy such as wind is part of the answer.

It is also a very cost-effective move for businesses, since it has the potential to reduce your costs.

Energy efficiency in New Zealand is poor, so improving it must be one of the first steps in containing the growth in greenhouse gas emissions.

In May the Energy Efficiency and Conservation Act 2000 was passed through Parliament. It established the Energy Efficiency and Conservation Authority –EECA – as a stand-alone Crown entity. It now has an enduring role to promote energy efficiency and renewable energy across all sectors of the economy. It can also implement product energy efficiency standards and labelling.

The new EECA has been given a $3 million boost in funding for energy efficiency. One major task is the development a National Energy Efficiency and Conservation Strategy by 1 April 2001. This strategy will focus on meeting government energy efficiency policies through practical objectives and targets.

The Government will be consulting the community on both the action needed to meet our climate change commitments and the Energy Efficiency and Conservation Strategy. I urge you all to seize the opportunity to shape these important decisions by having your say in the consultation process.

Waste prevention

One of the challenges for business is to decide how best to reduce their environmental impacts.

Much of the mainstream thinking about the environment has been “end-of-pipe” – we’ll clean up the waste once it’s produced, filter the water once it's dirty, and find new resources to use once the old ones have run out. Let’s not kid ourselves – there is still a huge need to do this. For example, we have many landfills and sewage treatment plants that must be made, and kept, safe.

However, I hope that we can all learn from our mistakes and find better ways of doing business. This means looking at the problems that cause environmental harm rather than just cleaning it up once it has happened.

One of the keys to this is waste prevention. This means designing waste and harmful chemicals out of all stages of the production process.

There is a much practical action that businesses can take to reduce the environmental impact of their operations. I’ve already referred to energy efficiency and transport initiatives. Other elements include:
 changing product design to make more efficient use of material
 introducing cleaner production methods
 putting in place environmental management systems
 having environmentally sound purchasing policies

You do not have to be a big business to take some action, and small steps in the right direction are better than none at all. I am sure that many of you are already aware of cleaner production methods. I am also sure that Environment Waikato would be happy to help if you want more information.

Lake Taupo

Most New Zealanders recognise Lake Taupo as a national icon. Threats to its water quality therefore need to be taken very seriously. Recently, work undertaken by Environment Waikato has highlighted the very real threats facing water quality in Lake Taupo. The potential expansion of intensive farming in the Taupo catchment is likely to lead to additional nitrogen run-off into the lake, which in turn, will impact on Taupo’s pristine water quality. In response to these concerns Environment Waikato is preparing a variation to its proposed regional plan.

I don’t mean to say too much about this issue today, suffice to say, it is great to see Environment Waikato addressing this issue, and doing so in a way that involves its people and communities. Lake Taupo is a resource that is enjoyed by many people in the Waikato and throughout the country. I am hopeful that Environment Waikato can continue to work towards management of Lake Taupo that upholds its water quality to the benefit of all.

Extended producer responsibility
Finally, today, I would like to touch on the principle of “extended producer responsibility”.

Extended producer responsibility requires manufacturers to take a lifecycle approach to their products. For example, they can ensure that components are recyclable, made from renewable materials, and/or can be taken back for dismantling at the end of their life.

It is difficult to apply this principle across countries, as recycling and take-back systems differ. Any legislation providing for these systems is not enforceable outside the country of origin.

It is, however, an idea that is gaining currency internationally and there may be ways in which the Government can encourage some sectors of New Zealand business to adopt this principle for their products.

Stewardship implies a duty of care on those producing, retailing and using environmentally harmful products. The nature of the duty may vary according to the operator.

Those at the production end who know the environmental risks have a responsibility to ensure that appropriate information is passed down the chain. This includes providing information about responsible disposal of the product.

Material safety data sheets are one way in which businesses are already responsible for providing information to users of their product, but these apply only to some products.

The costs of stewardship will usually be built into the final cost of the product, signalling the environmental cost of the item to the end-user.

The government is promoting product stewardship in the case of used lubricating oil.

Oil companies import lubricating oil for the use of most New Zealanders. Although many of these companies operate collection systems, only about two-thirds of the contaminated used oil is known to be collected.

We are working with the oil companies to find a way to ensure that all the oil is collected, and that people are aware of the importance of disposing of their oil correctly. The oil companies are conscious of their responsibility in this area, and making a concerted effort to solve this problem once and for all.

Because used oil has a range of detrimental effects on the environment it is easy to target as requiring attention. This is not so easy with more inert products, although they still represent resource use and the need for waste disposal.

We currently have a Working Group looking at the options for a waste minimisation strategy for New Zealand. The group will be advising the Ministry for the Environment and Local Government New Zealand, and I expect the potential for stewardship arrangements and extended producer responsibility to be part of that advice.

So my message today is for business to move beyond simply compliance with laws and resource consents. I know that many of you are already trying to do so.

The motivational speaker Zig Ziglar says that “to get through the hardest journey, we need take only one step at a time – but we must keep on stepping!”

I believe that all of us here today are on a journey towards a sustainable future. A future in which we have a quality of life that is good for our environment as well as for all of us.

And I want us all to keep stepping.

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