Identifier
Created
Classification
Origin
09HANOI119
2009-02-13 03:56:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Hanoi
Cable title:  

ENVIRONMENTAL IMPACTS OF VIETNAM'S CRAFT VILLAGES

Tags:  SENV TBIO ECON SOCI VM 
pdf how-to read a cable
VZCZCXRO0911
RR RUEHAST RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM RUEHTRO
DE RUEHHI #0119/01 0440356
ZNR UUUUU ZZH
R 130356Z FEB 09
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 9135
INFO RUEHHM/AMCONSUL HO CHI MINH 5570
RUEHBK/AMEMBASSY BANGKOK 6593
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RHMFIUU/HQ EPA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
UNCLAS SECTION 01 OF 03 HANOI 000119 

SENSITIVE
SIPDIS

DEPT FOR EAP/MLS, OES AND INL
DEPT PASS USAID TO LAC/RSD, LAC/SAM, G/ENV, PPC/ENV
JUSTICE FOR ENVIRONMENT AND NATURAL RESOURCES (JWEBB)
EPA FOR INTERNATIONAL (MKASMAN)
COMMERCE FOR ITA/MAC/HONG-PHONG PHO

E.O. 12958: N/A
TAGS: SENV TBIO ECON SOCI VM
SUBJECT: ENVIRONMENTAL IMPACTS OF VIETNAM'S CRAFT VILLAGES

REF: 08 HANOI 981

HANOI 00000119 001.2 OF 003


UNCLAS SECTION 01 OF 03 HANOI 000119

SENSITIVE
SIPDIS

DEPT FOR EAP/MLS, OES AND INL
DEPT PASS USAID TO LAC/RSD, LAC/SAM, G/ENV, PPC/ENV
JUSTICE FOR ENVIRONMENT AND NATURAL RESOURCES (JWEBB)
EPA FOR INTERNATIONAL (MKASMAN)
COMMERCE FOR ITA/MAC/HONG-PHONG PHO

E.O. 12958: N/A
TAGS: SENV TBIO ECON SOCI VM
SUBJECT: ENVIRONMENTAL IMPACTS OF VIETNAM'S CRAFT VILLAGES

REF: 08 HANOI 981

HANOI 00000119 001.2 OF 003



1. (U) Summary: Vietnamese craft villages play an important
economic role, particularly in the country's north and employ 14
million people. However, older, less-efficient technologies with
limited pollution control equipment in these villages discharge
massive amounts of waste directly into the surrounding areas,
damaging the environment and the health of local residents. Limited
attempts to address environmental issues have not proven successful
as existing technology does not seem to fit the scale of craft
village production and emissions. End Summary.

What Are Craft Villages?
--------------


2. (U) Vietnamese craft villages comprise more than local gatherings
of artisans manufacturing traditional products. Instead, the term
refers to a much broader grouping of small and medium sized
industries, centered in a village specializing in one particular
product or service. Per the Ministry of Labor, at least 30-35
percent of all households in village must do business in the craft
and earnings from those households must be 50 percent of total
earnings of village. The scope of craft villages is quite varied,
and includes villages specializing in handicrafts (goods for daily
use, such as leather),arts (furniture, lacquer, jewelry,
embroidery),service and trade (plastic and paper recycling),
industrial products (steel, paper),food processing (liquor, animal
slaughtering, essential oils),and material supply and processing
(example).


3. (U) Craft villages play a surprisingly important role in
Vietnam's economy, particularly in the north, the location of most
craft villages (Note: southern Vietnam relies more heavily upon
industrial zones and export processing zones, reftel). 14 million
people, or over 30 percent of Vietnam's labor force, find employment
in 1,451 craft villages, covering 46 different crafts. The Center
for Science Technology and the Environment (COSTE),the
quasi-governmental organization created in 2004 to promote

productivity and environmental management at craft villages,
estimates that craft villages make up 25 percent of GDP and produced
exports valued at over USD 500 million annually. A craft village
may include hundreds of small firms and employee thousands of
workers. In many localities, craft villages bring about half of the
localities' total revenues and create jobs for a large number of
young people in rural areas. For example, environmental officials
in northern Bac Ninh province stated that the province's 62 craft
villages comprised 70 to 80 percent of provincial economic
production, with each craft village employing 3,000 to 7,000
laborers. Bac Ninh's craft villages largely focused on wood
furniture, construction materials, steel, paper and foods, primarily
for domestic consumption.

Environmental Impacts
--------------


4. (SBU) Due to limited capital and exposure to international
practices, many craft villages adopt older technologies or modify
equipment to fit the smaller scale of production or
less-sophisticated production techniques. Reliant on these
inefficient technologies and unable to afford pollution control
equipment, many craft villages release substantial pollutants
directly into the environment through air and water emissions and
the production of toxic, solid wastes. According to COSTE, 100
percent of craft villages do not meet environmental standards. Bac
Ninh environmental officials frankly admitted that craft villages
cause most of the province's environmental problems, which continue
to worsen as craft villages grow. Higher levels of output and
income have, in turn, resulted in increased waste generation, both
domestic and industrial.

Just How Bad Is It?
--------------


5. (U) Where homes and workshops are intermingled, open drains that
carried storm water and domestic wastewater into adjacent rice
fields may now carry grease and oil from equipment, acids and heavy
metals from plating liquors, organic wastes from food processing, as
well as pig manure and household wastewater. For example, wastewater
from noodle and vermicelli production contains bio-organisms
significantly above permissible limits; leather processing has led

HANOI 00000119 002.2 OF 003


to contamination in wastewater and in groundwater spreading
pollution to neighboring villages; recycling plastics and metals
causes air, solid waste and wastewater pollution -- all
significantly above government standards; battery recycling leads
to exposure to hazardous chemicals; textiles, dyeing wastewater
contains pollutants (BOD, COD) many times higher than government
standards resulting in fish and shrimp kills in common water
sources, and solid waste and dust from construction materials and
tile, often produced in densely populated areas with no treatment
for air emissions, kill nearby plant life kills nearby plant life.
In Bac Ninh, paper craft villages discharge 4,500 to 6,000 cubic
meters of waste water per day into the public waste water system,
generate 50 tons of solid waste (plastic, coal waste) daily, and
have air emission levels for some pollutants up to ten times GVN
standards. 15,000 cubic meter of wastewater from Bac Ninh's 100
small steel smelters is discharged without any treatment. Organic
solvents and paint residues from wood furniture villages similarly
are discharged directly into the environment.

Visits to Craft Villages
Highlight Pollution Problems
--------------


6. (U) During visits to an animal slaughtering craft village and a
paper recycling village, ESTH Officer witnessed few environmental
protections. At the animal slaughtering village, all local and
village officials and craft village residents readily admitted that
the craft village has no environmental protection or worker safety
measures at all. Workers piled fresh animal skins directly on the
ground in household compounds and dumped bones from freshly
slaughtered animals into a pond which served as the town's emergency
reservoir in case of draught. A mechanical bone grinder processed up
to four tons of bones per day without any protection for workers who
stood for hours in clouds of bone dust. Blood and viscera from
slaughtering areas ran through street side gutters into a collecting
pond adjacent to the local elementary school in which local women
harvested water plants for consumption. Though no studies have been
performed on the health impacts of this pollution, residents report
lowered agricultural yields due to salinization from runoff from
salting and drying of hides and note discolored drinking water taken
from local wells.


7. (U) The Viet Nhat Paper Joint Stock Cooperative, located in Bac
Giang province, together with several smaller paper recycling
factories, produces over 10,000 tons of photocopy and notebook paper
each year, largely made from paper pulp and waste paper imported
from the United States. Though employees receive basic safety and
environmental training, the facility has no central wastewater
treatment system and the cooperative's manager acknowledged that
several rice fields surrounding the village can no longer be used
due to water pollution. Despite attempts to filter and recycle
wastewater prior to discharging, ESTH Officer witnessed discolored
water piped out of the facility into common drainage ditches.
Cooperative employees noted that the facility uses several chemicals
in the production process and discharges 40 cubic meters of
wastewater per day.

Health Impacts
--------------


8. (U) The health impacts of craft villages on local residents are
long-standing. Residences and production sites in craft villages
are intermixed, leading to close and constant exposures to toxic
pollutants resulting in serious health impacts. Due to the
sensitivity of the issue and limited resources, the central
government and provincial authorities release few statistics on the
health impacts of craft village production. However, as early as
1996, a health survey of 233 residents of the Bat Trang ceramics
village (total population of approximately 6,000) found 76 persons
with respiratory ailments and 23 with tuberculosis. In 1995, 23
persons from the village died of lung cancer. Bat Trang residents
comprised 70 percent of the lung cancer patients in Hanoi hospitals
in 1996. In 2005, at the bronze casting and lead smelting craft
village of Dong Mai, an international NGO reported that smelting
left 500 people with chronic illnesses and 25 children with brain
damage. Many households built furnaces adjacent to their houses.
According to local health officers, 80 percent of the village's
population is subject to such diseases as pneumonia, encephalitis,
and cancers.


HANOI 00000119 003.2 OF 003


Attempts to Address Environmental Concerns
--------------


9. (U) With support from the Japan International Cooperation Agency
(JICA),COSTE has initiated several projects designed to improve
environmental practices at craft villages, with a particular focus
on improving production technologies and practices. COSTE has
attempted to create a sustainable development strategy through
raising environmental awareness in craft villages, looking for
suitable technologies to treat wastewater and air emissions from
craft village and developing management software for environmental
protection at craft villages and cooperatives, working with
cooperatives in a few provinces to develop cleaner technologies, and
developing food safety programs. Similarly, the Bac Ninh DONRE is
attempting to address craft village pollution concerns through
increasing public awareness and attempts to remove industries from
the villages and into areas or "focal" industrial parks with better
infrastructure and environmental controls, including
pre-construction environmental impact assessments. The villages
remain, but solely for residence, not for production or industry.
The GVN has also created the
Vietnam Environment Protection Fund with an annual budget of
approximately USD 12 million to provide preferential loans to help
industrial zones and craft villages process wastes. Supported by
funds from the collection of various environmental fees and fines
and from the exchange of quotas for carbon dioxide emissions, VEPF
has already assisted a number of craft villages to build waste
processing facilities.

Environmental Solutions Face Many Hurdles
--------------


10. (U) Attempts to address environmental impacts at craft villages
face several significant obstacles. At this time, appropriately
scaled pollution abatement technology for most small and
medium-sized facilities in Vietnam does not exist. Nearly all
environmental interventions have to be re-engineered for small,
family-run workshops that cannot afford end-of-pipe treatment
methods commonly used in larger production facilities. According to
Michael DiGregorio of the Ford Foundation, who has studied craft
villages for over a decade, many for-profit firms find it difficult
to produce this type of equipment and protect their intellectual
property. Such solutions include better housekeeping, higher
smokestacks, improved pumps, better regulation of heat, improved
sediment and oil traps, and chemical neutralization of acids and
toxic substances. GVN officials stated that many production units
are incapable of any expenditure on waste processing, estimated at
25 percent of the total production cost. Many of Vietnam's
environmental, health, safety and labor laws do not reflect the
particular conditions of family enterprises. Craft villages compete
in the market through greater flexibility associated with lower
fixed capital costs, lower labor costs, and lower administrative
costs. Imposition of regulations appropriate to larger firms with
different cost structures will likely only raise the level of
underground payments owners are forced to make. Finally, most major
polluters are the residents themselves. Stricter enforcement would
endanger their livelihoods. No workshop owner is willing to
introduce environmental and safety features that raise costs and
reduce competition with others who produce similar products.


11. (U) GVN efforts to address environmental issues have not proven
effective. COSTE acknowledges that it does not have adequate
information to form base lines from which to track environmental
progress and continues to seek support for a nationwide survey of
environmental conditions in and impacts from craft villages. On
several occasions, the GVN moved a number of household
micro-enterprises into light industrial areas to remove pollution
from residential neighborhoods. However, subsequently, other
micro-enterprising manufacturers immediately filled these vacant
houses. The process has repeated itself every time the GVN attempts
to consolidate, relocate and manage these polluting small-scale
producers, which creates a bigger problem as more villagers get
involved in producing the craft.

MICHALAK