LLDA’s Fame and Shame Approach: An Effective Tool in Pollution Control

Edgardo C. Manda1, Adelina C. Santos-Borja2 and Erwin Kim Mercado3

1General Manager, Laguna Lake Development Authority, Philippines 2Chief, Research and Development Division and Chief, Carbon Finance Unit 3Development Manager Officer, Planning and Project Development Division

Abstract

One of the six pillars of Integrated Lake Basin Management (ILBM) is the formulation of environmental protection policies that gets translated into rules and regulations. Implementation is usually anchored on the command and control strategy, which penalizes the offenders through fines and legal actions. The Laguna Lake Development Authority (LLDA), which is the only lake basin management authority in the Philippines, embarked on non-traditional approaches starting off in 1997 with the Environmental Users Fee System, which is a combined regulatory mechanism and market-based instrument. This was followed in 2007 with the Public Disclosure Program, which is a component of the Laguna de Bay Institutional Strengthening and Community Participation (LISCOP) Project funded by the World Bank and the Dutch Government. Through the “fame and shame” scheme, which makes use of the “carrot and stick” approach, local government units (LGUs) and industrial/commercial establishments that discharges wastewater effluent are given either a positive and negative recognition based on a rating system. An LGU is given an award for good environmental governance and successful implementation of environmental projects while an industrial/commercial establishment is given recognition for good environmental performance. On the other hand, environmental violators are given the “shame” award locally titled as “Nakakasulasok Award” and “Pasaway sa Lawa Award,” respectively.

The public scrutiny and the media attention on this annual award have brought behavioral changes both for the LGUs and the regulated establishments. Keywords: Public disclosure, environmental governance, environmental performance, behavioral change.

1. Introduction The Laguna Lake Development Authority (LLDA) is a government-owned and

controlled corporation mandated by virtue of Republic Act No. 4850 to promote and accelerate the balanced growth of the Laguna de Bay Region with due regard for ecological soundness. To support this mandate, the LLDA institutionalized the Public Disclosure Program for the Laguna de Bay Region (LdBR-PDP) as a complementary tool to its regulatory functions. This program was initiated under the Laguna de Bay Institutional Strengthening and Community Participation (LISCOP) Project supported by the World Bank and the Netherlands Government. The following are the key factors that led to the implementation of the LdBR-PDP:

a. The Laguna Lake has become the repository of domestic and

industrial wastes from its surroundings. b. Rise of pollution level caused by industrialization and urbanization c. Legal enforcement and market-based instruments are costly and

yet inadequate to fully address problems in environmental compliance

d. Need for other approach to complement LLDA’s existing regulatory efforts

e. The People’s right to know of the environmental hazards In terms of legal bases for the implementation of the program, the Charter of

the LLDA (R.A.. 4850 as amended) empowers LLDA to adopt innovative strategies that will help compel compliance to environmental policies and regulations. Section 16, Article 02 of the 1987 Philippine Constitution upholds the right of the Filipino People to a balanced and healthful ecology in accord with the rhythm and harmony of nature. Section 07, Article 17 guarantees the right of the Filipino People to information on matters of public concern.

The LdBR-PDP complements LLDA’s regulatory tools and market-based

instruments to compel the LdBR stakeholders to comply with the environmental laws. It was strategically designed to control, prevent, and reduce pollution of the Lake and its environment through media publicity by exposing the environmental performance of the key stakeholders particularly the industrial / commercial establishments and the Local Government Units (LGUs). It employs the “carrot and stick” approach – lauding establishments for good environmental performance and shaming those that do otherwise.

The LdBR-PDP evaluates the key stakeholders environmental performance

based on their unique nature and involvement in environmental management. For the industrial / commercial establishments, the evaluation process resonates on the regulator and regulated premise since this sector is a purely regulated entity. For the LGUs, they are considered as regulators. They have the autonomy to impose laws and ordinances and are LLDA’s partners in enforcing

environmental laws. They are evaluated based on their environmental governance.

To oversee the implementation of the LdBR-PDP, the Program Monitoring

Group (PMG) was created. It is a multi-sectoral body composed of representatives from various government and non-government agencies and organizations in the LdB Region. It ensures that the implementation of the program would follow the highest professional and ethical standards. It sees to it that the environmental performance of the stakeholders to be disclosed, undergoes due process, is rational, and is unbiased. It also has a policy-making and decision-making functions relative to the implementation of the program.

2. Methodology

2.1 LdBR-PDP for Industrial / Commercial Establishments

2.1.1. Data Requirements 2.1.1.1. Results of Laboratory Analysis and Inspection Reports

Industrial / commercial establishments’ environmental performance

ratings were based mainly from their compliance or non-compliance with the effluent standards as prescribed by Law. As for the program, the LdBR establishments’ track records for the considered evaluation period were retrieved from the Results of Laboratory Analysis (ROLA) filed by LLDA’s Environmental Quality and Management Division (EQMD) in a database.

Among the parameters in the ROLA, the Biochemical Oxygen Demand concentration or the BOD5 was taken as the primary indicator for compliance or non-compliance with the effluent standards. By definition, BOD is a measure of the quantity of oxygen used by microorganisms in the oxidation of organic matter. In simple terms, it determines whether the effluents or wastewater discharge can support microbial life or not. The applicable BOD5 level in the LdBR is 50.0 mg/L. This means, any BOD5 greater than 50.0 mg/L, is no longer environmentally safe.

2.1.1.2. Self-Monitoring Reports (SMRs) Submitted to the LLDA

Another criterion considered for the evaluation of the LdBR

establishments’ environmental performance is the submission of SMRs. As part of the establishments’ compliance, they are required to submit SMRs annually, semi-annually, or quarterly depending on their BOD loading. SMR records are filed in the LLDA’s Pollution Control Division

database. Failure to submit SMRs within the prescribed period would cause a disadvantage to the establishment’s rating.

2.1.1.3. Records of Pending Legal Cases

When establishments fail to meet applicable standards in any of

the parameters, they are given Notice/s of Violation (NOV). This instantly reflects the establishments’ non-compliance when queried from the LLDA’s Legal Division Database.

There were instances that establishments passed the standards for BOD5 however, were still given a non-compliant rating due to failure with other parameters as indicated in their legal records.

Aside from non-compliance with effluent standards, other violations such as Refusal of Entry (ROE), Operation without LLDA Discharge Permit (DP), Operation without LLDA Clearance (LC), and Discharging without proper wastewater treatment or “By-Pass” also demerit establishments’ performance ratings.

2.1.2. Data Processing All records from the EQMD, PCD, and Legal Division databases are

consolidated and sanitized according to the designed rating system. The average BOD5 (Ave BOD5) of each of the establishments were calculated. Note that only establishments with two or more wastewater sampling results may initially qualify for the criteria of Ave BOD5. establishments with only one sampling result evidently would not qualify in the averaging procedure.

All establishments were checked whether they have submitted the required SMRs or not. Submitted SMRs were denoted by numbers 1 to 4. Establishments found with only 1 or 2 SMRs submitted were verified whether they were under the annual and semi-annual conditions.

The Legal records were cross-referenced with the initially processed data.

2.1.3. Application of the Environmental Performance Rating System

The Environmental Performance Rating System for the LdBR

Industries / Commercial Establishments evolved from the first cycle to the third. Necessary changes were needed to be adopted as the program progressed for the rating system to be as definitive as possible.

The sanitized data were subjected to the Environmental Performance Rating System. Each establishment yielded a color-coded rating according to its performance. Categorically, a BLACK rating meant non-compliance; RED – partial compliance; BLUE – satisfactory compliance; GREEN – compliance beyond standard.

2.1.3.1. First Cycle

The first cycle of the LdBR-PDP scoped the establishments’ environmental performance for the year 2005.

The LLDA developed an automated environmental performance

rating system derived from the DENR’s Procedural Manual for DAO 2003-26 of the Revised Industrial EcoWatch System.

For the initial run, 50 establishments were selected from over

800 industries evaluated using the rating system. These establishments were comprised of the bottom 20 industries initially rated BLACK; top 20 of the initially rated RED; and the top 10 of the initially rated BLUE.

The following shows the matrix of the Industrial EcoWatch

System from which the LLDA’s environmental rating system for the LdBR industries was derived:

Performance

Indicator Broad

Category Description Color Code

No effort to comply Very Bad Willfully manipulates effluent discharge, including the conduct of illegal activities such as dilution of discharge, installation and use of by-pass, or direct discharge of untreated wastewater. Verified obstruction of authorized inspection activities With legitimate and verified public complaint of pollution and takes no effort to address such

BLACK

Efforts not sufficient to comply

Bad Violated applicable wastewater effluent standards even with efforts to reduce such through the installation of fully operational water treatment facility Discharges toxic and hazardous wastes to the environment beyond the allowable limits set under DAO Nos. 34 and 36 Series of 1990

RED

Efforts sufficient to comply

Good Effluents consistently within standards for one-year rating period In full compliance with all other DENR/LLDA regulatory requirements including submission of SMRs Well maintained wastewater treatment equipment Complete and accurate submission of SMRs

BLUE

Very Good Rated BLUE in the previous rating period. Effluents consistently better than the applicable standards by at least 20% Has well functioning monitoring equipment Has discharge points accessible to inspection.

GREEN

Efforts beyond legal requirements

Outstanding Rated GREEN in the previous rating period. Implements clean technology, energy and/or water efficiency/conservation programs

SILVER

Excellent Rated SILVER in previous rating period Implements EMS and/or waste reduction program Has regular community environmental outreach program

GOLD

The chart below shows the evaluation sequence of the DENR’s Industrial EcoWatch System:

Fig. LLDA’s Simplified Environmental Performance Rating System Chart and a Screenshot of the Automated Rating System

Is the firm in compliance with all applicable effluent standards?

•Did the firm obstruct entry of inspector into the premises?

•Did the firm discharge waste through unauthorized outlet/s (presence of bypass)?

•Was there other illegal acts (e.g. dilution,non-operation of pollution control devices, etc.)?

Is there an existing verified complaint on environmental matter against the firm?

Did the firm submit the required SMRs?

YES NO

BLACK

BLACK

RED

BLUE

INDICATORS

RED

2.1.3.2. Second Cycle

In the second cycle of the LdBR-PDP, the LLDA’s Environmental Performance Rating System was modified according to relevant issues raised and lessons learned from the first cycle.

The LLDA’s Modified Rating System: Broad Category Description Color Code Very Bad 1. Failed Ave BOD5 for the considered evaluation period (40%)

2. Willfull manipulation of effluent discharge, including the conduct of illegal activities such as dilution of discharge, installation and use of by-pass, or direct discharge of untreated wastewater (20%).

3. Obstruction of authorized inspection activities/ Refusal of entry (10%)

4. With verified pending legal case (10%) 5. Has been issued or under Cease and Desist Order (CDO)

(20%) 6. Consecutively rated RED

BLACK

Bad 1. May or may have not failed Ave BOD5 for the considered evaluation period

2. With considerable efforts to reduce pollution (“75% and LAST sampling rule”)

3. With verified pending legal case/s 4. SMRs not regularly submitted

RED

Good 1. Effluents consistently within standards for one-year rating period (40%)

2. In full compliance with all other DENR/LLDA regulatory requirements including submission of SMRs (20%)

3. Well maintained wastewater treatment equipment (20%) 4. Complete and accurate submission of SMRs (20%)

BLUE

Very Good 1. Rated BLUE in the previous rating period. 2. Effluents (BOD5) consistently better than the applicable

standards by at least 20% (40%) 3. Has well functioning monitoring equipment (30%) 4. Has discharge points accessible to inspection. (30%)

GREEN

It can be noted that the performance indicator column was

omitted due to perception differences. Also, certain criterions were assigned percentages to show how much each weigh.

2.1.3.3. Third Cycle

In the third cycle, refinements were incorporated with the rating system…

Broad Category Description Color Code Very Bad 1. Failed the Ave BOD5 for the considered evaluation period and/

or falls under one or more of the following conditions: a. Has committed manipulation of effluent discharge (includes

dilution of discharge, installation and use of by-pass, or direct discharge of untreated wastewater;

b. Has committed obstruction of authorized inspection activities/ Refusal of Entry;

c. With verified pending legal case/s; d. Has been issued or under Cease and Desist Order (CDO)

or Ex-Parte Order (EPO); OR 2. Consecutively rated RED (Would only apply to those with no

significant efforts to improve effluent quality. Ref: M.O. 97-99 s. 1997)

BLACK

Bad 1. Ave BOD5 for the considered evaluation period exceeds the effluent standard but with considerable efforts to reduce pollution:

a. At least 75% of sampling results and/or last sampling result for the considered evaluation period is in compliance with the effluent standard for BOD5;

b. Ave BOD5 and/or last sampling result for the considered evaluation period falls within the Temporary Acceptable Range (Ref: M.O. 97-99 s. 1997) ;

c. Ave BOD5 and/or last sampling result for the considered evaluation period does not exceed 250 mg/L (Ref: M.O. 97-99 s. 1997) ;

d. With well-documented efforts to reduce pollution (such as implementation of remedial measures within the considered evaluation period etc.,) and most recent sampling result is in compliance with the effluent standards or is significantly reduced to acceptable ranges (Ref: M.O. 97-99 s. 1997) ; OR

2. Ave BOD5 for the considered evaluation period is within the standard but:

a. With verified pending legal case/s; b. With pending legal case due to unsettled payment of

penalties; c. SMRs not regularly submitted

RED

Good 1. Effluents consistently within standards for the considered rating period

2. In full compliance with all other DENR/LLDA regulatory requirements including submission of SMRs

3. Well maintained wastewater treatment facility 4. Complete and accurate submission of SMRs

BLUE

Very Good 1. Rated BLUE in the previous rating period 2. Effluents consistently better than the applicable standards by at

least 20% (Ave BOD5 ≤ 40 mg/li) 3. Has well functioning monitoring equipment 4. Has discharge points accessible to inspection

GREEN

2.1.4. Presentation of the Short-Listing 2.1.5. Technical Conferences

As part of the standard procedures of the program, the LLDA informs

rated establishments of their respective environmental performance ratings and allots 30 days for technical conferences should the establishments dispute their ratings. The technical conferences did not only serve as an avenue for the stakeholders’ issues and concerns but also LLDA’s check and balance mechanism of its regulatory functions.

The outcome of the technical conferences determined whether an establishment retains its performance rating, moves up to a higher rating (i.e. from BLACK to RED only), or defers its disclosure.

2.1.6. Finalization of the Rated Industries/ Commercial Establishments

2.2 LdBR-PDP for Local Government Units

2.2.1. Data Requirements

There are 61 Local Government Units in the LdBR composed of Cities and Municipalities. Their environmental management systems were evaluated in terms of environmental governance. The following were the key indicators of their environmental governance, each with a defining set of criteria modified as the program progressed from the first to the third cycles.

2.2.1.1. Support System Provided by the LGU for Environmental Protection

2.2.1.2. Specific Environmental Project/s Being Undertaken for the Laguna de Bay Region

2.2.1.3. Partnerships Established with Stakeholders Concerning Environment and Natural Resources Management

2.2.1.4. Environmental Ordinances and Its Implementation 2.2.1.5. Information, Education, Communication, And Motivation

Efforts Being Undertaken For the Environment

2.2.2. The LGUs’ Environmental Governance Rating System

Based from the above criteria, the PMG crafted the LdBR LGUs Environmental Governance Rating System to gauge the LGUs’ efforts in implementing the environmental laws. The LGU’s rating system like the performance rating system for the LdBR establishments, also evolved adapting appropriate parameters to measure performance.

2.2.2.1. First Cycle

The rating system crafted by the PMG was based on the key indicators specified earlier on part 2.2.1 of this document. Each was assigned a set of criteria to be rated by the LGU with numerical values from 0 to 5. 2.2.2.2. Second Cycle

The rating system was modified based on lessons learned from the

first cycle. A consultation meeting was conducted with LdBR LGUs on 09 and

10 October 2007 at the Legend Villas Hotel, Quezon City and at the Anest Towers, Los Baños, Laguna respectively. This meeting was set to present the LGUs of the program the LLDA has institutionalized and familiarize them of the program’s purpose.

2.2.2.3. Third Cycle

In the third cycle, two evaluation forms were devised. One was for

the LGU and the other, for the community members of the municipality or city. The forms were basically of the same key indicators but with modified criteria.

2.2.3. Data Gathering

In the first and second cycles, all the 61 LGUs were given self-assessment forms with which they filled out each indicator with appropriate numerical answers ranging from 0 to 5 (0 as the lowest and 5 the highest).

The LGUs were required to submit their accomplished Self Assessment Reports (SARs) for the PMG to validate.

In the third cycle, the PMG through its Secretariat, conducted the evaluation instead of the LGUs rating themselves. The PMG interviewed the LGUs’ representatives to account for the information required. Aside from the evaluation form for the LGUs, a field validation form was also devised to rate actual efforts of the LGUs. Constituents such as the community members of the municipalities and cities were interviewed to attest to the LGUs accounts. 2.2.4. Data Processing

Gathered data were entered into automated rating templates which

instantly determines an LGU’s environmental governance rating based on

numerical ranges. The output was summarized on a separate file linked to all LGUs’ rating templates.

3. Results

3.1 LdBR-PDP for Industries / Commercial Establishments

Results show that the compliance behavior of the establishments changed after being subjected to the program. For the purpose of this document, the compliance behaviors are described as follows:

“Downgraded” means that an establishment’s performance rating has gone from Partial Compliance to Non-Compliance (RED to BLACK) or Satisfactory Compliance to Partial Compliance (BLUE to RED)

“Retained” means that an establishment’s performance rating neither moved up or down.

“Upgraded” means that an establishment’s performance rating has improved from Non-Compliance to Partial Compliance (BLACK to RED); Non-Compliance to Satisfactory Compliance (BLACK to BLUE); Partial Compliance to Satisfactory Compliance (RED to BLUE); and Satisfactory Compliance to Compliance Beyond Standard (BLUE to GREEN)

3.1.1. First Cycle

After the technical conferences, it was found that one establishment had already shut down its operation. Fifteen RED and 13 BLACK initially rated establishments were placed Under-Assessed for incoherent data provided and some inapplicable criteria for the evaluation procedure. This served as one of the bases for the rating system’s modifications.

The first public disclosure of the LdBR Industries environmental

performance took place on 26 June 2006 at the Protected Areas and Wildlife Bureau of the Department of Environment and Natural Resources (PAWB-DENR)

Ten establishments were given a BLUE rating, four (4) were given

RED ratings, and seven were rated BLACK, which were among the 13 establishments tagged as “Mga Pasaway sa Lawa”. 3.1.2. Second Cycle

In the second cycle of the LdBR-PDP, the modified rating system was used. The second batch of composed of 58 establishments were

added to the roster of ratees. Twenty of which were rated BLACK; 17 were RED; and 21 were BLUE.

Improvements were also noted in this cycle. Forty five (45) of the

56 pilot establishments were rated. Seventy one percent (71%) of which were upgraded; 27% retained; and only 2% were downgraded.

Second public disclosure of the LdBR Industries environmental

performance was held on 17 August 2007 at the Makati Garden Park, Makati City.

The table below illustrates the compliance behavior of the first

batch of establishments as observed from the first to the second cycle. Movement Number of Establishments Percentage

Downgraded (RED to BLACK) 1 2% Retained Compliance (BLUE) 7 16% Retained Non-Compliance 5 11% Upgraded (BLUE to GREEN) 3 7% Upgraded (UA BLACK & PSL to RED) 10 22% Upgraded (UA BLACK & PSL to BLUE) 4 9% Upgraded (UA RED to BLUE) 15 33%

TOTAL 45 100%

3.1.3. Third Cycle

33 establishments of the pilot batch were rated: 33% were upgraded; 58% retained; and 9% downgraded.

46 of the second batch were rated: 39% upgraded; 54% retained; and 7% downgraded.

Evaluating the 1st and 2nd batches’ performance from the 2nd to the 3rd cycles, 37% upgraded; 56% retained; and 8% downgraded (BLUE to RED only).

Batch 1 establishments from 2nd to 3rd cycles: Movement Number of Establishments Percentage

Downgraded (BLUE to RED) 3 9% Maintained Compliance (BLUE) 8 24% Maintained Compliance 1 3% Maintained Compliance (GREEN) 2 6% Retained Non-Compliance w/ Effluent Std

1 3%

Retained Partial Compliance (RED) 7 21% Upgraded (BLACK to RED) 6 18% Upgraded (BLUE to GREEN) 5 15%

TOTAL 33 100

Batch 2 establishments from 2nd to 3rd cycles: Movement Number of Establishments Percentage

Downgraded (BLUE to RED) 3 7% Maintained Compliance (BLUE) 7 15% Maintained Compliance 1 2% Retained Non-Compliance w/ Effluent Std

6 13%

Retained Non-Compliance w/ Effluent Std and Regulatory Requirements

2 4%

Retained Partial Compliance (RED) 9 20% Upgraded (BLACK to RED) 9 20% Upgraded (RED to BLUE) 1 2% Upgraded (BLUE to GREEN) 8 17%

TOTAL 46 100% Third public disclosure of LdBR Industries environmental

performance was held on 17 September 2008 at the Hotel Rembrandt, Quezon City

3.2 LdBR-PDP for LGUs

3.2.1. First Cycle First public disclosure of the LdBR LGUs environmental

governance was held on 29 November 2006 at the Imperial Palace Suites, Quezon City.

The “Gawad Dangal ng Lawa” was awarded to Marikina City. It was also given recognition for successful implementation of environmental programs and projects along with the LGUs of Sta. Cruz and Los Baños of Laguna, Carmona and Gen Mariano Alvarez of Cavite, Quezon City, and Pasig City.

3.2.2. Second Cycle

Second public disclosure of the LdBR LGUs environmental

governance was held on 10 December 2007 at the Manila Water Company, Balara, Quezon City.

The “Gawad Dangal ng Lawa” was awarded to Sta. Cruz, Laguna while special recognition was given to Quezon City, Calamba City and Los Baños of Laguna, Teresa, Rizal, and Malvar Batangas.

LLDA also gave the “Nakakasulasok Awards” to Paete and Biñan of Laguna, and Angono and Taytay of Rizal for their indiscriminate dumping of garbage on the shores of the Laguna de Bay.

Other LGUs were also cited for illegal shoreland encroachments and operation of open and controlled dump sites.

3.2.3. Third Cycle

Third public disclosure of the LdBR LGUs environmental

governance was held on 28 April 2009 at the Southeast Asian Regional Center for Graduate Study and Research in Agriculture, University of the Philippines Los Baños (SEARCA-UPLB), Laguna.

Marikina City was once again awarded the “Gawad Dangal ng Lawa” for being the most outstanding LGU in Environmental Governance followed by 1st Runner Up, Sta. Cruz Laguna which was also recognized for its successful implementation of environmental programs and projects. 2nd Runner Up, Quezon City; 3rd Runner Up, Los Baños, Laguna; Carmona, Cavite; Sta. Rosa, Laguna; Teresa, Rizal; and Sto. Tomas Batangas were also given special recognition for the successful implementation of their environmental programs and projects.

“Nakakasulasok Awards” were given to Taytay and Binangonan in

Rizal and San Pablo City, Laguna for dumping wastes in and near bodies of water.

4. Conclusion

4.1 LdBR-PDP for Industrial / Commercial Establishments

Based from observations on the compliance behavior of the LdBR establishments, they have deemed that making it to the top ratings is not all that matters when it comes to environmental compliance. It is equally important that they move up along their revenue targets. It is also not enough just to put up clean production technologies and wastewater treatment facilities. It should as well be ensured that those facilities are consistently and efficiently operated. Ultimately, failure to comply with the environmental requirements would attract media scrutiny and public censure aside from facing enforcement actions and sanctions. 4.2 LdBR-PDP for LGUs

In the span of three cycles, indicators to substantiate significant impacts of

the program on the LGUs’ behavior in environmental governance may still be insufficient. What the program has established is that successful implementation of environmental policies lies on a leader’s strong political will.