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.

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Economic Development and the Environment
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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

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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.

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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.

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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

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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.

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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