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Words Varouj Tenbelian

The industrial sector in Lebanon is an important pillar of the economy. While industrial activities are playing an increasingly important role, their impact on the environment is gradually becoming more visible. According to the World Bank, the estimated cost of environmental degradation in Lebanon in 2011 was around $800 million (equivalent to 3.7 percent of GDP).

Although the Lebanese Government, mainly through the Ministry of the Environment, is trying to deal with air and water pollution that are caused by the industrial sector, Lebanon’s track record of enforcement and compliance remains poor. Awareness campaigns and financial incentives remain the most effective tactics used by the Lebanese authorities, awareness being the primary target.

Marwan Rizkallah, the project director of the Lebanon Environmental Pollution Abatement Project (LEPAP) at the Ministry of the Environment said: “There are no industries that cause pollution and thus lead to environmental degradation. There are industrialists who are responsible for the pollution and its disastrous consequences. Industries are potential causes of pollution, yes, but industrialists are responsible for the prevention or the causation of pollution. Actually, any irresponsible person can cause pollution by throwing garbage from his/her car or by driving non-fuel efficient cars. Irresponsible behavior and not industries cause pollution.”

A joint effort to control pollution

The Lebanon Environmental Pollution Abatement Project (LEPAP) was created following the issuance of the Environmental Compliance Decree (ECD) 8471/2012, when the Ministry of the Environment joined forces with the Central Bank of Lebanon (BDL), the World Bank, and the Italian Cooperation to establish an environmental compliance mechanism for industrial enterprises. LEPAP is executed in coordination with the Ministry of Finance, the Ministry of Industry, the Association of Lebanese Industrialists, the Association of Banks in Lebanon, the Federation of Chambers of Commerce Industry and Agriculture in Lebanon, and the Council for Development and Reconstruction.

Rizkallah said: “LEPAP was launched to limit the pollution created by the industrial sector, which is mainly owned by the private sector in Lebanon. It is about securing loans to the industrial sector for generating pollution-free factories. We provide technical consultation and supervision and suggest solutions. If funding is needed for achieving solutions, we help them in applying for concessional loans supported by the BDL through commercial banks to industries. LEPAP loans, which are at near zero interest rate, are provided for a period of seven years, including a grace period of two years.”

The Lebanese government has received $15 million from the World Bank and 2.3 million euros have been granted by the Italian Corporation to execute the LEPAP.

The World Bank contribution is provided for the concessional loans to assist the borrower, while the Italian grant involves the establishment of a Project Management Unit (PMU), which is housed at the Ministry of the Environment. “The PMU consists of a project director, a procurement officer, and an accountant, and other specialists are invited when needed,” explained Rizkallah.  He added: “The PMU provides free technical assistance to industries to respond to the technical requirements for accessing the loans through the commercial banks and in line with the national regulations. This includes the preparation of Environmental Audits and Compliance Action Plans (EA/CAP).”

“The general objective of this project is to provide support to a total of 20-25 enterprises that have been designated to apply for financing under LEPAP,” said Rizkallah. Decree 8471/2002 divided industries into five categories according to their pollution potentiality. The industrial sectors to be covered mainly belong to the first three categories, including cement, the food industry, printing, automation, cosmetics, cable manufacturing, metallic products, the paper industry, and mattresses production. Rizkallah added: “LEPAP is not mandatory. When asked, we send inspection teams, we assess the needs, and in case funding is needed, the LEPAP mechanism is used. We help the industry to obtain the loan with zero interest. To date, six industrial plants have already applied for LEPAP loans. Three have already received loans worth $3 million. The other three have applied for loans that could reach $2 million. These are in process and will soon be verified.”

Industries that comply with the environmental standards are certified by the Ministry of the Environment.  Rizkallah explained: “They receive a mark like a logo that indicates that the products are in compliance with environmental standards. This logo is very helpful in marketing and even in exporting the products. In EU countries, for example, such certificates are mandatory. The certificate is renewed every three years and is withdrawn in case inspection shows any breaches of compliance.”

Besides assisting the borrower to reduce industrial pollution in targeted industrial enterprises, LEPAP aims at strengthening the monitoring and enforcement capabilities of the Ministry of the Environment. Rizkallah said: “The Ministry of the Environment doesn’t initiate environmental inspections. It’s mainly done during the licensing process or if a complaint about a pollution incident is lodged.”  As mentioned before, Lebanon’s track record of enforcement and compliance remains poor.

Before 2014, Lebanon didn’t have general prosecutors who were specialized in environmental issues. Law No. 251\2014 came to fill this gap, and provided for the establishment of a specialized judicial system. Rizkallah explained: “In accordance with Decree 8633 issued in 2012, we have environment prosecutors and judges. The prosecutor has the right to inspect the enterprise but cannot order closure. Law No. 444/2002 stipulates that the polluter is responsible and can be fined or even jailed in case of environmental crimes.”

Rizkallah said: “The World Bank loan and the Italian grant have a duration date that ends in 2018, but this doesn’t end the LEPAP project. It’s an ongoing project and based on its circular 365/2014, additional loans will be provided by the BDL. It’s worth mentioning that the BDL has a strong commitment to the environment through the provision of environmental loans, and concessional loans for controlling pollution in the industrial sector are part of that commitment.”