SUSTAINABLE GROWTH: MACAU'S PRESSING NEED FOR

UNCLAS SECTION 01 OF 03 HONG KONG 001510 SIPDIS SIPDIS STATE FOR EAP/CM AND OES/E NSC FOR WILDER STATE PASS CEQ FOR BERGER, VAN DYKE EPA FOR SOWELL E.O. 12958: N/A TAGS: CH HK MK SENV PGOV ENRG SUBJECT: SUSTAINABLE GROWTH: MACAU'S PRESSING NEED FOR ENVIRONMENTAL LEGISLATION ¶1. (SBU) Summary: As Macau's economy booms, local authorities confront the dual challenges of modernizing the territory's infrastructure, while ameliorating the adverse effects of this rapid development. Macau,s air quality is worsening due to manufacturing in Guangdong province, emissions from the transportation sector and localized electricity production. Macau's drinking water supply is almost completely dependent on tributaries of the Pearl River, which face problems with pollution and excessive salinity. The Macau Environmental Council (EC),a government body charged with monitoring the condition of the environment, has neither regulatory nor law enforcement powers. The EC only has the ability to conduct public awareness campaigns, investigate (but not resolve) citizen complaints on pollution, and provide non-binding environmental impact assessment opinions. The Macau Special Administrative Region Government (MSARG) recognizes the need to restructure the EC into a formal Environmental Protection Department, but appears perplexed about how to go about creating a body with true regulatory and enforcement capabilities. MSARG authorities have expressed interest in increasing cooperation with the U.S. and learning more about creating a framework for sustainable economic growth and environmental protection. END SUMMARY. ======================================== Economic Development and the Environment ======================================== ¶2. (SBU) Air Quality: Vong Man Hung, Acting President of the Executive Committee of the Environment Council, told EconOff that, under its current structure, the MSARG cannot effectively manage the explosive growth in and economic transformation of the territory. This is particularly evident in the environmental sector, where deteriorating air quality is the most pressing environmental issue, yet the MSARG has not even measured how much pollution blows into Macau from mainland China and how much is produced locally. Local power plants continue to burn diesel fuel, while a small percentage of power is produced by an incinerator. Both spew high quantities of pollutants into the air. Car and truck emissions also contribute to low air quality due to high use of diesel and other poor-quality fuels. While the EC has instituted new standards for the import of commercial fuels, it lacks any means to curtail the heavy flow of vehicles from mainland China. ¶3. (SBU) Water quality: Vong noted that with only four sewage treatment plants, Macau can provide secondary treatment for only 19% of its waste water. The MSARG has not yet released water quality figures for 2006, but its 2005 Environmental Status Report notes that water quality around Taipa Island, Macau's Inner and Outer Harbors, and Coloane Island reached extreme levels where "water pollution endangers the existence of all organisms and the public health." In the beach resort areas and airport, coastal water ranged from "acceptable quality" to "water pollution at levels that affects the normal growth of plants and the existence of sensitive organisms." The concentration of heavy metal pollutants in coastal waters has already exceeded the "Seawater Quality Standard of China". It remains unclear how much water pollution stems from local sources and how much comes from factories in mainland China. ¶4. (SBU) Drinking Water: 98% of Macau's water supply comes from the Xijiang River, a tributary of the Pearl River in Guangdong province. While this river also suffers from pollution, a recent decrease in volume and water levels in the rivers frequently causes seawater to flow into Macau's main source of drinking water. Along with increased economic development, Macau's water consumption has increased by 3.4% since 2003 and it is certain to keep rising as more luxury hotels come on line. The impact of salinity on Macau's drinking water continues to adversely impact human health and could impede the sustainable development of Macau, implied Vong. For this reason, the EC has begun water conservation campaigns and recommends that the government incorporate water conservation into an overall socio-economic development strategy, including the use of treated wastewater for construction and irrigation. ¶5. (SBU) Environmental Impact Assessments: Despite the number of new construction and land reclamation projects, there is no formal mechanism for the EC to provide environmental HONG KONG 00001510 002 OF 003 impact assessments (EIA). If another government department requests that the EC perform an assessment, the EC will give a non-binding opinion on the impact of that specific project. However, the majority of construction and infrastructure projects in the territory proceed without any independent EIA. ================================ Structure of Environment Council ================================ ¶6. (SBU) The EC's current mission is to promote environmental awareness among the general population and within government departments. It liaises with other MSARG agencies to collect data on environmental issues, but lacks the authority or staffing to conduct independent monitoring of its own. For example, the Macau Meteorological Department examines air quality; the Port Authority and Health Bureau monitor water quality; the Civil Aviation Department researches airport-related pollution problems, while the Macau Customs Service works on animal conservation and trafficking. The EC does not draft new regulations and cannot impose penalties on polluters. Instead, it makes recommendations to other agencies on how to improve environmental practices and urges the above departments and business licensing bureaus to revoke operating permits of polluters. However, the EC cannot force any department or bureau to take action on any environmental problem. ¶7. (SBU) The EC is the single MSARG entity that is dedicated to the environment. However, it is mainly an advisory body. Financially and administratively, the EC falls under the MSARG Secretary for Transportation and Public Works. But, the 'General Council on the Environment,' an eleven-member body appointed by the Macau Chief Executive from government and business sectors (including construction, garment manufacturing, transportation, architecture and education) oversees the programmatic and policy aspects of the EC. Each year, the General Council approves the EC,s annual work plan and its end-of-year environmental status report. Given the General Council's membership, it remains unclear the extent to which the EC can formulate independent policy recommendations. ========================== Current MSARG Capabilities ========================== ¶8. (SBU) The Chief Executive of Macau and the Governor of Guangdong have formed a Liaison Group to cooperate on water and air issues. Vong claimed this arrangement facilitates information sharing at numerous levels of government, but did not elaborate on the extent of that cooperation. Nevertheless, it appears to be less developed than the contact between Hong Kong and Guangdong. She also stated that Macau and Hong Kong lack an official government-to-government mechanism to cooperate on the environment, though considerable informal communication occurs between technical experts in both cities. Macau still depends on contacts in the Portuguese civil service for assistance and expertise on the environment, and Macau does not yet have a large environmental movement, she noted. ¶9. (SBU) To address deteriorating air quality, Macau will begin using natural gas by the end of 2007, with future plans to build a LNG terminal in mainland China. Due to the high price of land in the territory, all new energy infrastructure construction, including LNG terminals and additional power plants, will be located in the mainland, indicating that Macau is tying its energy security closely to mainland China. Vong noted that plans for LNG will allow Macau to gradually shift its electricity production to cleaner sources. To address emissions from the transportation sector, Vong also noted that the MSARG has issued new regulations for the import of commercial fuels, but declined to give details on the sulfur content of those fuels. ¶10. (SBU) A very high population density and the strong growth of tourism mandate that Macau monitor the state of its green spaces as part of an overall nature conservation program, said Vong. The Lands, Public Works and Transport Bureau has plans to preserve existing green areas and increase urban greenery in new areas under development and reclamation. Construction projects, particularly in the HONG KONG 00001510 003 OF 003 Cotai reclamation area, are changing Macau's land and sea ecological systems, however. The EC urges more environmental monitoring, protection and conservation programs to address the changing ecology. ¶11. (SBU) For the past three years, the Macanese public has increased demands that the EC implement environmental regulations. The public is particularly concerned about noise and light pollution from the construction and operations of the new casinos. These quality of life issues have raised the profile of the EC and increased the public's receptivity to its general environmental message. Macau's Legislative Council is considering a plan to upgrade the EC into an Environmental Protection Department (EPD),but there is neither a timetable for this government restructuring nor a clear indication of what powers a new EPD would hold. Vong stated the EC's immediate goal is obtain regulatory powers and then begin drafting new environmental legislation. She had no specifics on how the MSARG would go about strengthening environmental regulations, but welcomed expertise and opinions from U.S. counterparts. ¶12. (SBU) The EC's existing outreach programs highlight green enterprises by working with the hotel sector to promote energy and water efficiency. Since the hospitality industry is the main employer, the EC believes engaging the hotel sector will have ripple effects in Macanese society. The EC will soon start a "green hotel" award program to recognize the most environmentally-friendly and energy efficient hotels in Macau. Vong stated that American hotel and casino chains tend to be some of the "greenest" in Macau and can serve as models for their local competitors. ================================= Trafficking in Endangered Species ================================= ¶13. (SBU) Vong also discussed efforts to combat animal trafficking, which falls under the Macau Customs Services and Economic Development Bureau. Macau is a signatory to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Each year, Macau Customs prosecutes animal traffickers. It has recently seized orchids, cacti, coral, giant salamanders, and various tiger parts. Cunningham