THE CASE FOR INCREASED EPA ENGAGEMENT IN VIETNAM

UNCLAS SECTION 01 OF 04 HANOI 000639

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 DEPUTY ADMINISTRATOR SCOTT FULTON AND FOR INTERNATIONAL
(MKASMAN)

E.O. 12958: N/A
TAGS: SENV TBIO ECON SOCI VM
SUBJECT: THE CASE FOR INCREASED EPA ENGAGEMENT IN VIETNAM

Ref: A. 07 Hanoi 1476 (JAC) B. 08 Hanoi 1088 (JAC) C. 08 Hanoi 981
(Industrial Zones) D. Hanoi 119 (Craft Villages) E. 08 Hanoi
(Industrial Pollution) F. Hanoi 417 (Bauxite) G. 08 Hanoi 537
(Climate Change) H. 07 Hanoi 1706 (MPS)

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1. (U) Summary: Over the past several years, U.S. Environmental
Protection Agency (EPA) experts have provided critical assistance to
U.S.-Vietnamese cooperation on Agent Orange/dioxin legacy issues and
to the development of Vietnamese capacity to manage growing
industrial pollution. Increased EPA engagement in Vietnam would
better prepare the country to balance rapid economic growth with
environmental protection, while promoting key U.S. environmental
policy goals. These policy goals include improving U.S. human
health and the environment, benefiting the environment in Vietnam
and Southeast Asia, buttressing U.S. foreign policy goals, and
focusing on issues key to ongoing EPA programs. Timely
interventions will have practical and demonstrable impacts, while
this environmental diplomacy will help the United States broaden and
deepen our relationship with the Government of Vietnam (GVN) and
buttress our standing with the Vietnamese people. End Summary.

Background
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2. (U). With a population of 87 million, Vietnam is the 13th most
populace nation on earth. As of 2008, Vietnam's per capita GDP
stood at just over USD 1,000, reflecting the nation's 7.5 percent
average growth from 1997-2007. Though the global economic slowdown
dropped GDP growth to 6.2 percent in 2008, Vietnam is one of the few
countries in the world that expects positive (though modest)
economic expansion in 2009. U.S.-Vietnamese economic engagement
continues to grow. The United States remains one of the largest
investors in Vietnam and U.S. companies remain quite interested in
Vietnam despite the global financial crisis. For the first four
months of 2009, Vietnam's exports to the United States stood at USD
3.74 billion, up 0.3 percent from a year earlier. By contrast
exports to the United States from every other ASEAN nation declined
during the same time period. While U.S. exports to Vietnam declined
in early 2009, total numbers for January to April still totaled over
USD 825 million. However, in contrast to our burgeoning economic
relationship, U.S. assistance to Vietnam, other than substantial
funding pursuant to the Presidents Emergency Plan for AIDS Relief
(PEPFAR) program and financial assistance for Vietnam's efforts to
combat avian influenza, remains quite small. Annual non-health
related U.S. assistance totals less than USD 20 million, with
environmental programs a small fraction of that amount.

Existing EPA Engagement
--------------


3. (U) Since 1995, the EPA has provided crucial scientific and
technical assistance to U.S. Agent Orange/dioxin efforts in Vietnam,
one of the highest profile and most sensitive issues in the
U.S.-Vietnam relationship. Currently, EPA plays a prominent role on
the U.S.-Vietnam Joint Advisory Committee on Agent Orange/dioxin,
which is chaired by the EPA Deputy Assistant Administrator for
Science and which provides technical and scientific advice to policy
makers on possible environmental remediation and health projects
(Refs A and B). With funding from the U.S.-Asia Environmental
Partnership, EPA has supported GVN efforts to develop a PCB
management plan and provided related safety training. More
recently, EPA experts have traveled to Vietnam to provide technical
assistance to Vietnamese efforts to reduce methane emissions from
landfills and agriculture as part of the Methane to Markets
program.

Where Can EPA Help: Effects from
Unchecked Economic Growth and Industrialization
-------------- --


4. (U) Fueled by rapid economic growth, urbanization and
industrialization, and exacerbated by poor planning, weak or
un-enforced laws, and a lack of capacity and attention to
environmental threats by central and local authorities, Vietnam now
faces serious environmental problems in a broad range of areas. In
most cities, every form of infrastructure or service delivery lags
significantly behind growing demand, including water, sanitation,
sewage collection and treatment, solid waste collection and
disposal, road networks and public transportation. Industrial Parks,
Export Processing Zones, and Craft Villages, while fueling much of
the country's rapid growth, are polluting soil, water, and air at
unprecedented rates (Refs C, D and E). Surpassing the GVN's ability

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to implement an effective governance and regulatory framework, these
industrial areas have caused unmitigated damage to aquatic
ecosystems and human health, the economic impacts of which the
country will suffer for the foreseeable future. At the same time,
Vietnam's limited capacity to manage its natural resources has led
to poor environmental conditions in the extractive industries, such
as coal and bauxite mining (Ref F).

Where Can EPA Help:
Climate Change Adaptation and Mitigation
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5. (U) A 2007 World Bank study listed Vietnam as one of the top five
countries most at risk from sea level rise. Already, Vietnam has
witnessed increased temperatures and rising sea levels. Experts
agree that climate change will affect Vietnam in many forms,
including more frequent and intense floods, droughts, and typhoons;
altered river flows; changing habitat and wildlife community
structures and migrations; ocean acidification and temperature
effects on fisheries; and sea-level rise (Ref G). According to the
World Bank report, a one meter rise in sea levels in Vietnam would
result in a 10 percent decline in GDP, dislocate 11 percent of the
population, and submerge 7 percent of agricultural land and 28
percent of the nation's wetlands. Though starting from a low base,
Vietnamese greenhouse gas emissions are increasing rapidly.
According to the UNDP Human Development Report 2007/08, Vietnamese
CO2 emissions increased from 0.3 tons per capita in 1990 to 1.2 tons
per capita in 2004, a 400 percent increase. The 25.8 percent annual
growth rate was three times that of China and 12 times higher than
the average world growth rate. As Vietnam's need for energy grows,
it will utilize more and more fossil fuels. As a result, the
Vietnamese Ministry of Natural Resources and Environment (MONRE)
predicts CO2 emissions of 268 million tons by 2020.

Where Can EPA Help: Water
--------------


6. (U) Vietnamese water sources have become increasingly polluted
with most lakes and canals in urban areas becoming sewage sinks, a
problem compounded by the discharge of untreated wastewater from the
growing number of Industrial Parks, Export Processing Zones, and
Craft Villages. Thousands of these industries discharge hundreds of
thousands of cubic meters of wastewater containing thousands of tons
of industrial waste each day. Nationally, less than 5 percent of
industrial wastewater is treated. Several water segments have been
declared virtually dead, with high BOD5 loads, hazardous and toxic
chemicals, heavy metals, and pathogens. Agriculture and aquaculture
contribute to these loads, as do medical, industrial (including
toxic materials) and solid wastes and generally inadequate systems
for collection, treatment, and disposal. The economic, health, and
environmental costs of water pollution are significant. Outbreaks of
cholera, typhoid, dysentery, and malaria in a recent four-year
period resulted in six million cases and medical costs of at least
USD 22 million. Within Vietnam, diarrheal disease is the second
leading cause of child mortality in the country. High levels of
arsenic, nitrates, heavy metals, and pathogenic bacteria are
routinely found in drinking water throughout the country. In June
2008, WHO reported that 20,000 people die each year in Vietnam from
contaminated water and poor sanitation.

Meeting EPA Goals:
Improving U.S. Health and Environment
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7. (U) Limiting industrial discharges will help lessen pollution in
the agricultural sector, which will in turn improve food safety
domestically and in products exported to the United States, such as
fruits, fish and seafood. Discharges of certain toxic chemicals and
heavy metals (including airborne mercury emissions from Vietnam's
rapidly expanding number of coal fired power plants),cause impacts
beyond Vietnam's borders and similar pollutants released into the
environment from Asia have been detected in the United States.
Efforts to reduce these emissions, therefore, will limit their
presence in the United States. EPA climate change mitigation
support will help limit Vietnam's greenhouse gas emissions, thereby
making a contribution to reducing the rate of global warming, which
benefits all countries. Vietnam's eagerness to address climate
change and its established history as a good partner on other global
issues (such as its model response to avian influenza) make it an
excellent candidate to serve as a laboratory for mitigation and
adaptation efforts that can then be transferred to the United
States. For example, the U.S. Geological Survey-supported Delta

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Research and Global Observation Network (DRAGON) program has opened
an Institute at Can Tho University that will study the impacts of
climate change on the Mekong Delta with the explicit goal to then
use that information to help guide U.S. responses to climate change
in the geologically similar Mississippi Delta.

Meeting EPA Goals: Benefiting the Environment
in Vietnam and Southeast Asia
--------------


8. (SBU) EPA assistance can lead to direct and quantifiable
environmental benefits within Vietnam. Reduced air, water and solid
waste emissions will lessen the nation's pollution burden, improve
people's health, and provide long-term economic benefits. Assisting
Vietnam to develop and implement regulations and policies in a
transparent manner will increase public awareness and acceptance of
new environmental controls. This should buttress civil society's
ability to monitor environmental compliance, while making it easier
for regulated entities to understand the applicable regulatory
regime. Techniques and technologies piloted in Vietnam then can be
expanded for use in other Southeast Asian nations, while better
Vietnamese environmental practices could reduce downstream water
impacts (for example, preventing or limiting industrial discharges
from bauxite mining/alumina production in the Central Highlands from
entering the Sre Pok river basin, which flows into Cambodia).

Meeting EPA Goals: Buttressing U.S. Foreign Policy
-------------- --------------


9. (SBU) Continued assistance on dioxin-related programs will assist
the United States remove one of the final barriers to full and warm
relations with Vietnam. Improved GVN and provincial environmental
management, monitoring and enforcement capacity will force polluting
industries to upgrade their environmental practices, expanding
markets for U.S. exporters of energy efficient production
technologies and environmentally friendly equipment and services.
Environmental partnerships in Vietnam on dioxin and pollution
control allow the United States to partner with ministries normally
less willing to work with Americans - the Ministries of Defense and
Public Security (Ref H). By establishing confidence and trust with
these entities through environmental cooperation, we can overcome
many of their lingering suspicions of U.S. intentions and build
cooperation in those agencies core competencies, military affairs
and law enforcement. Public opinion polls already show that USAID
and EPA-led dioxin efforts have resonated with the Vietnamese
public. Given the state-controlled media's recent focus on
environmental issues, EPA activities in Vietnam will receive broad
local coverage, further boosting the image of the United States with
the Vietnamese people.

Meeting EPA Goals:
Focusing on Issues Key to Ongoing EPA Programs
-------------- -


10. (U) The issues of greatest importance in Vietnam - reducing the
effects of industrial pollution, safeguarding public health,
responding to climate change, preserving natural resources, and
improving environmental management - each match EPA domestic and
international priorities. For example, Vietnam repeatedly has noted
its willingness to join international greenhouse gas mitigation
efforts. EPA could assist Vietnam's efforts to monitor, report, and
verify (MRV) greenhouse gas emissions and reductions. Our
Vietnamese interlocutors note their openness to expanded
participation in the U.S.-led Methane to Markets initiative.
Pollution control activities directly promote public health,
particularly among the millions of Vietnamese children affected by
exposure to growing numbers of industrial emissions and other
pollutants. Given the large number of Vietnamese who still rely
upon coal or biomass for cooking and to heat their homes, boosting
Vietnamese participation in the Partnership for Clean Indoor Air
(PCIA) would limit health risks from carbon monoxide, pollutants and
other particulate matter.

Now Is the Right Time to Engage
--------------


11. (U) Reflecting continued economic growth despite the global
financial crisis, the GVN aims to enter the ranks of middle-income
developing countries by 2010 and achieve industrialized country
status by 2020. Goldman Sachs recently predicted that by 2020
Vietnam would enjoy a higher per capita GDP than Indonesia and the
Philippines. Vietnamese industry and power generation will explode

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to support this sustained economic growth. Therefore, now is the
time to intervene in Vietnam - before the need to spend greater
amounts to remediate, retrofit and adapt. The United States can
help Vietnam get it right the first time by working to increase the
efficiency of energy generation and reduce industrial and extractive
emissions before they reach problematic levels.

EPA Engagement Complements
Other U.S. and Donor Initiatives
--------------


12. (U) Aside from building on its earlier dioxin and PCB control
efforts, EPA assistance on water, pollution management, natural
resource conservation, climate change and environmental management
would dovetail nicely with planned USAID initiatives, including
regional programs in clean energy and environmental governance, as
well as activities under USAID/Vietnam's first five year
environmental strategy which is expected to be completed this year.
EPA engagement also would complement efforts from other donors, many
of which have initiated projects in the areas of reducing industrial
pollution and wastewater treatment, while filling the gaps in area
without strong international donor support. Finally, EPA programs
in Vietnam could build upon its work in other Asian countries, such
as medical waste management (China),toxic waste control (India) and
cleaner fuel and vehicles (Indonesia).

How Can EPA Assist?
--------------


13. (U) EPA expertise can assist Vietnam in a variety of ways, from
formal bilateral agreements to informal cooperation. The GVN
repeatedly has told the Embassy that it views the EPA as the gold
standard for environmental management and would agree to work
together in many different areas. Alone or in partnership with
other USG agencies, donors or NGOs, EPA can provide: training and
workshops on hazards and risks; assistance developing a
fully-functioning regulatory regime and preparing pollution
inventories; technical assistance for amendments to relevant
environmental laws and regulations; training and technology
transfer; transfer of incentive and enforcement tools; and community
outreach. Given the GVN desire to cooperate with EPA across such a
broad spectrum of ideas, we believe Vietnam can serve a laboratory
for EPA to pilot new initiatives or approaches to environmental
concerns.

MICHALAK