A Study of Ecolables in India and European Union and Their Impact on Export of Leather Products From India

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A Study of Ecolables in India and European Union
and Their Impact on Export of Leather Products
From India   Ghayur Alam
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• Objectives-To study
• The performance of Ecomark in India.
• The factors which affect the popularity of
• Ecomark.
• What can be done to increase the popularity and
• impact of Ecomark.
• EUs Ecolable.
• The impact of EUs Ecolable on export of leather
• footwear from India.
• Linkages between sustainable development
• and export from developing countries.

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• The focus of the study is on leather products.
• It is based on more than 50 interviews
• with
• Indian exporters
• Importers in EU countries
• Trade Associations in India and EU countries
• Agencies in India and EU Responsible for
• administering Ecolable
• NGOs and Consumer groups.

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• Ecolables-brief introduction
• market-based instruments
• increase consumer awareness
• shift consumer choice in favour of
  environmentally
• friendly products
• induce industry to manufacture environmentally
• friendly products.

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• Ecolabel-criteria
• i) product related. Limited to environmental
  impact
• of products use and its disposal.
• ii) process and production method (PPM).
• PPM based criteria Requires Life Cycle
  Assessment.
• They are more relevant for the promotion
• of sustainable development
• A number of Ecolables are in use. These include
  Indias
• Ecomark, Germanys Blue Angel, Nordic White Swan
  and
• EUs green flower

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• Ecomark-India
• Introduced in 1991
• Available to consumer goods only
• Similar to schemes in other countries
• Life cycle based criteria
• One major difference-linked to quality
• Bureau of Indian Standards is involved
• Available for 17 products, including
• leather

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• Ecomark-India
• Impact
• Only 4 companies with Ecomark
• Three for paper. One for detergents
• None being used
• No impact

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• Leather Focus of the study
• Why leather?
• Important source of employment and export
• employs more than 2.5 million people
• export more than US 1800 million
• Highly Polluting
• pollution load include salt, chrome
• inefficient use of resources, including water
• and energy
• air emission

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• Ecomark for leather
• Introduced in 1991
• Criteria
• i. The manufacturer must have consent from the
  Pollution Control Board
• ii. Must conform with the maximum limits of
  harmful substances.
• ii. The material used for product packaging shall
  be recyclable or reusable or biodegradable.
• Not linked to quality characteristics
• Impact
• no leather product with Ecomark
• no impact no contribution to environmental
• performance

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• Why Ecomark has not been effective?
• general reasons
• Lack of promotional efforts.
• Little consumer demand
• Industry not interested-do not see advantage
• in the market place-concerned about brand
  dilution
• complaints of procedural complexities,
• leading to cost and delays
• leather specific reasons
• a majority of firms use old and inefficient
  technologies
• highly polluting
• a majority do not have consent from SPCBs. Not
• eligible for Ecomark. (This implies that even
  if the leather producers were interested
• in getting Ecomark, most of them would find it
  very difficult to meet its criteria.)

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Ecomark should be seen as part of efforts to
promote sustainable production. It would be
effective only when there is an awareness and
demand for environmentally friendly products and
processes.
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EUs Ecolable-Introduction Established
1992 Criteria based on cradle-to-grave approach-
take into account all aspects of a product's
life, from its production and use to its
eventual disposal. Popularity limited to a small
number of products and countries. Countries
most popular in Italy, Denmark and
France. Products most popular in textile and
paints/varnishes
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Number of ecolable according to
countries Country Year 2001 2002 2003 Sweden
9 8 11 Greece 9 9 11 Spain 12 12 13 France 1
7 26 30 Denmark 18 23 31 Italy 13 23 34 Others
10 20 Total 88 101 150 Source Flower
News, various issues available at
http//europa.eu.int/comm/environment/ecolabel/ne
ws/flowernews_en.htm
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• Reasons for low popularity
• Similar to the reasons for the low
• popularity of Ecomark in India
• Low Environmental consciousness among consumers
• lack of awareness of ecolable
• poor response from industry

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• EUs Ecolabel and Its Impact on exports from
  India
• Two views
• 1. Ecolables can discriminate against imports
• from developing countries.
• Lack of transparency
• pressure from local stakeholders
• criteria based on life cycle analysis
• need for new and costly technology to meet EU
• Ecolable norms
• 2. Developing countries can set up Sustainable
  Production facilities, Take ecolable and increase
  
• export to developed countries

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• EUs Ecolable and export of
• leather footwear from India
• EU Ecolable Criteria (footwear)
• significant reduction in COD (Chemical Oxygen
  Demand)
• and chromium in effluent
• non use of hazardous chemicals (azo dyes,PCP,
  TCP etc.)
• use of recycled material for packaging.

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• Impact on Indias export would depends on
• how important ecolables are in EU markets of
  leather footwear
• i. Will Indian firms be able to get Ecolable?
• Evidence from India and EU
• ecolables are not important in footwear market
  in EU
• ecolables have no impact on export from India
• environmental issues, in general, play small role
• importers are mainly concerned with banned
  chemicals-
• not interested in the sustainability of
  production process
• social issues (working conditions, minimum
  wages,
• child labour etc.) play greater role. Many
  large importers
• have their own social norms. Small importers
  not concerned

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• Future Scenario
• situation may change-Ecolables may become
• important in footwear market as
• EU companies adopting ESTs
• steps being taken to promote Ecolable
• large Indian exporters are beginning to focus
• on higher end of the market
• if Ecolables become important, How would export
• from India be affected?

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• Can Indian firms increase their exports by
  obtaining
• EUs Ecolable?
• All Indian exporters already comply with the ban
  on
• hazardous chemicals
• All exporters can use recycled material for
  packaging
• Main problem high pollutant load in effluent
• (high COD, chromium). Most firms lack
  technological
• and financial resources to upgrade
• Not eligible for EUs Ecolable and Indias
  Ecomark.
• Large firms have the capacity to meet the
  Ecolable criteria if they see
• business advantage
• small firms are unlikely to take this route.
  They will continue to
• cater to the lower end of the market, which is
  largely price driven.
• Sustainable production in not likely to emerge
  as an important
• impetus to export from developing countries.
  Even if environmental
• considerations acquire greater importance in the
  EU market, only a
• handful of large firms will be in a position to
  take advantage.

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• Conclusions
• are Ecolables effective instruments to promote
• sustainable development?
• not very effective-especially in developing
• countries such as India
• Many reasons-
• general lack of concern for environment.
• Low awareness of Ecolable schemes, such as
• Ecomark in India
• consumers not prepared to pay more for products
• with ecolable-companies not prepared to invest
• in new technology
• lax enforcement of regulations

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• Would adoption of sustainable production methods
• promote Indias export of leather goods to EU?
• Present situation environmental issues play
  little role
• in consumer choice of leather footwear-price
  of primary
• importance. Little link between sustainable
  production and
• export potential.
• Future scenario role of environmental issues,
  and
• ecolables, may increase. Will this benefit
  exports from
• India and other developing countries?

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Large exporters- yes (May be). Large Indian
firms have technical and financial resources. If
it makes business sense, they may invest in
sustainable production technologies, take
ecolable and try to increase their exports .
Small exporters-no. Unlikely to meet the
conditions to get Ecomark and Ecolabels. Lack
technical, managerial and financial resources to
set up sustainable production facilities. Their
exports are likely to remain restricted to the
lower end of the market.
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• To conclude
• Ecolables have not been effective instruments to
  promote
• sustainable development.
• Presently, there is little link between
  sustainable production
• and export to EU market.
• If the situation changes and environmental
  issues begin to
• play greater role in the market, Ecolable,
  could also become
• important.
• The potential of sustainable production as a way
  of increasing
• export to developed countries is small.
• A small number of large Indian firms may benefit
  by meeting
• EU criteria and taking Ecolables. Small firms,
  however, do not
• have resources to do this.
• The overall potential of using sustainable
  production to
• increase exports is limited.