2010 Environmental Compliance

This doesn’t make comfortable reading (excerpt):

Economic Census 2011 – Environmental Compliance

Environmental compliance expenditure is one of the inputs for sustainable development in the economic, social and environmental protection pillar. Accordingly, the Department publishes this report as an initiative to support the National Environmental Policy to provide guidance to the industry to ensure clean and safe environment. Sectors involved are agriculture, mining & quarrying, manufacturing, construction and services...

…In 2010, a total of 9,552 establishments reported having environmental compliance expenditure from 364,900 active establishments (2.6%). The services sector recorded the highest number of establishments which was 59.5 per cent from 9,552 establishments, followed by manufacturing (25.4%), construction (8.6%), agriculture (5.0%) and mining & quarrying (1.5%)

In the interest of full disclosure, my dad teaches ISO14000 certification. If you think that has any bearing on the following, go ahead and disregard it.

Based on the survey, just 2.6% of the surveyed companies spent any monies on environmental compliance in 2010; of that number only 1,220, or 0.33% of the total, had environmental certification. Only RM2.1 billion was spent on environmental compliance, 80% of which was by the manufacturing sector.

A little over half of that expenditure was on waste management, and another 40% or so on environmental protection. Of the latter, just RM38.5 million was spent on conservation.

In total, environmental compliance expenditure amounted to about 0.28% of 2010 nominal GDP, or about the same as in Switzerland (in 2003) and the UK (2008).

Digression: the following comparisons assumes the same basis of calculation is used between our numbers and European numbers, which might not be true. The source I’m using segregates the data between public and private sectors, and also expenditure by specialised environmental industries (e.g. sewerage) – the data below refers to private sector industry only. On average, total expenditure in these countries are at least double the industry alone figure.

Other comparable figures are 0.87% for Poland (2009) and 0.09% for Turkey (2008) – Turkey and Poland are the two countries closest to our level of development for which I have data.

There’s obviously a wide range of expenditure levels, not always in keeping with income levels – France for instance is at 0.14% of GDP and Greece is at 0.03%(!), while Slovenia and Croatia are closer to Poland’s high expenditure ratio. If you include public sector spending however, all these ratios increase substantially – expenditure in France increases from 0.14% to 2.2% of GDP, for example.

So where do we stand? Based on the data that I have, which is admittedly skewed by being based on European numbers, we’re a little on the low side but not by much. I am however troubled by the low rate of certification, as well as the low spend on conservation, although by rights the latter is more a public sector responsibility not individual companies, which could explain the low figure.

Also, mining is well covered with about a third in this sector having environmental expenditure, but the coverage is much lower in manufacturing (6.1%) and construction (3.7%).

There’s still a long road ahead.

Technical Notes:

1. 2011 Environmental Compliance report from the Department of Statistics (warning: pdf link)
2. "Environmental protection expenditure in Europe: Data 1995-2009", European Union, 2011 (warning: pdf link)