small-scale industry and cleaner production strategies

Small-Scale Industry and Cleaner Production

Strategies

JOS FRIJNSInstitute for Housing and Urban Development Studies, Rotterdam, The Netherlands

and

BAS VAN VLIET *

Wageningen Agricultural University, Wageningen, The Netherlands

Summary. Ð Economically favorable cleaner production measures could be particularlyattractive for small-scale industry in developing countries. Research in Kenya indicatedthat cleaner production measures could generate promising results in reducing pollutionlevels at low costs. The small-scale industries are, however, constrained in implementingcleaner production by various attitudinal, organizational, technical and economicbarriers. To introduce cleaner production methods successfully, the small-scale sectorneeds support, such as technical and ®nancial incentives, from policy organizations andnongovernmental organizations. This requires better coordination of policy e�orts andorganization of small-scale enterprises, in particular because environmental improve-ments could be induced within enhanced industrial interactions. Ó 1999 ElsevierScience Ltd. All rights reserved.

Key words Ð Africa, Kenya, Small enterprise, Pollution, Environmental policy, Industrial network

1. INTRODUCTION

How can pollution from small-scale indus-tries be controlled without compromising theeconomic ability of those industries to survive?This article discusses possible measures forpollution control of small-scale industry in de-veloping countries, with an emphasis on cleanerproduction strategies. It is based on a researchproject on pollution control of small-scalemetal enterprises in Nairobi, Kenya (Frijns etal., 1997). After an introduction on the eco-nomic relevance of the small-scale industrysector, we present an overview of current urbanenvironmental management principles. Withinthis framework pollution control principles forsmall-scale industries need to be developed. Wediscuss the relevance of cleaner production forthe small-scale sector in Kenya and the need tomobilize support within the institutional settingof small-scale enterprises to improve their en-vironmental performance.

2. SMALL-SCALE INDUSTRYDEVELOPMENT

(a) De®ning the small-scale sector

Every attempt to de®ne small-scale industrymust pay attention to the relative nature of``small-scale'' versus ``large-scale'' and to the

World Development Vol. 27, No. 6, pp. 967±983, 1999Ó 1999 Elsevier Science Ltd

All rights reserved. Printed in Great Britain0305-750X/99/$ ± see front matter

PII: S0305-750X(99)00044-3www.elsevier.com/locate/wordldev

* This paper is based on a comparative analysis of

international experiences and case study research in

Nairobi conducted by the authors as part of the project

``Small-scale Industries and Environmental Pollution in

Kenya'', funded by the Dutch Ministry of Foreign

A�airs. We are very grateful to Joyce Malombe,

Housing and Building Research Institute, and Paul

Kirai, Environment Management Services, Kenya, with

whom we collaborated in this project. We thank Joost

van Buuren, David Edelman, Ed Frank and Arthur Mol

for valuable comments on an earlier version of the

paper. Final revision accepted: 19 November 1998.

967

related question: Small in what way? In currentliterature on small-scale industry, consensusappears to have been reached in answering thisquestion. The size of industrial enterprises, atleast in developing countries, can best be mea-sured by the number of employees. Amongauthors on this issue, there is a broad agree-ment on the number of workers employed in asmall enterprise: more than 10 and less than 50workers (see Uribe-EchevarrõÂa, 1991; Teszler,1993; Fafchamps, 1994; Parker and Torres,1994; Bartone and Benavides, 1997). Enter-prises employing less than 10 workers are calledmicroenterprises. While not having a de®ningrole, other characteristics of small enterprises,such as employment and labor conditions, thetype of entrepreneurship and technology used,may add to the description of the small-scalesector. Small-scale industries include tradition-al (artisan) and informal sector microenter-prises in addition to formal small-scaleenterprises. In this article, small-scale industriesare de®ned as both microenterprises (1±9 em-ployees) and small enterprises (10±50 employ-ees), characterized by relatively simplemanufacturing methods.

(b) Expectations of economic potential

The importance and even the existence of theinformal sector in the economic functioning ofThird World cities was originally completelyignored. During the last three decades, how-ever, the small-scale sector or informal sectorhas attracted the attention of several economicschools of thought, and small enterprises havecome to be seen as an important tool in theprocess of economic development in developingcountries. Over time, an impressive list of ob-jectives has driven policy on small-scale indus-try, including e�cient factor utilization,employment generation, entrepreneurial devel-opment, democratization and environmentalsoundness. Recently, the emergence of ¯exiblespecialization of production networks in in-dustrial countries has provided new ground forinnovative policy orientation.

Whether these rationales for economic po-tential are valid for small enterprise develop-ment in developing countries is questioned byUribe-EchevarrõÂa (1991). There is not a greatdeal of evidence that small-scale industries aremore e�cient producers than large-scale in-dustries; indirect job creation by small-scaleindustries is fairly small compared with theimpact of investing in large-scale industries;

and the majority of small-scale industries areconcerned with residual economic activities or``survivalist'' strategies which limit the trans-ferability of entrepreneurship and managementskills to formal ``modern'' industries. In prac-tice, the large-scale sector often emerges inde-pendently of previous existing small- andmedium-scale sectors. In sub-Saharan Africa,for instance, there is a large gap between themodern large-scale sector and the small-scalesector and this gap is not ®lled by medium-sizedenterprises. This is known as the ``MissingMiddle'' (Fafchamps, 1994). The dual indus-trial structure can be explained by the fact thatlarge ®rms receive greater returns from size andgovernment policies in general, while smallenterprises take advantage of special marketniches, lower labor costs and their ability tobypass certain laws and regulations. Medium-sized ®rms are typically too small to capturereturns on size or to qualify for direct govern-ment support, and they are too large to avoidlaws and regulations. This partly explains whysmall-scale enterprises generally prefer to staysmall and informal.

Evidence for the rationale of ``collective e�-ciency'' bene®ts of spatial proximity of ®rms, isgenerated in highly developed countries and thenewly industrialized countries. The capacity tocreate and develop small and medium-scaledproduction networks independently of large-scale nuclei in less developed countries is stillunclear and little is known about the conditionsthat make them possible (Uribe-EchevarrõÂa,1991). But recent examples of networks of small®rms in African countries such as BurkinaFaso, Ghana, Kenya, and Tanzania show thatcooperation between small enterprises is be-coming an important feature of economic re-lations in developing countries (see McCormickand Pedersen, 1996; van Dijk and Rabellotti,1997).

(c) Support policies

The reasoning which has been behind thepolicy support given to small-scale industryduring the last decades, has thus perhaps notbeen as realistic as originally thought. More-over, small-scale industries cannot be consid-ered as a uni®ed category and our expectationsof and support policies toward the small-scalesector should vary among the di�erent types,locations and industrial sectors. Despite a lackof strong evidence that the economic potentialof small-scale industries can be realized, there

968 WORLD DEVELOPMENT

are several motives for maintaining a support-ive policy. Although a contribution to mod-ernization or an increase in large-scaleindustries cannot always be expected, small-scale industries in rapidly growing urban cen-ters absorb many unskilled labourers whowould otherwise be unable to ®nd employment.In addition, in most developing countriesmarkets remain very small for many do inter-mediate goods and services, and small ®rmshave a role to play in economic development(Fafchamps, 1994). Support for these sectors isstill needed, however, not for goals ``outside''the small-scale sectors (like the idea of being aseed-bed for entrepreneurship) but to improvee�ciency, working and environmental condi-tions, and access to appropriate technologywithin the sector.

A supportive policy for the small-scale sectorcould best focus on direct support by creatingfavorable conditions on the supply-side and onthe demand-side of the market for small-scaleindustry products. Traditional policies havefocused on the supply-side, i.e., the provision oftraining, credit facilities and infrastructure. Inpractice, it often appears that the willingness orthe capacity of government organizations toprovide this support is limited so that only asmall number of small-scale industries arereached e�ectively (Teszler, 1993). Demand-side policies, aimed at increasing e�ective de-mand for small-scale enterprise products andthe broad development of small-scale industry,could prove to be more e�ective but also mightbe di�cult to realize as there may be onlylimited room for manoeuvring to change de-mand conditions.

(d) Small enterprise development in Kenya

Compared to other East African countries,Kenya is recognized currently to be the mostindustrialized country in the region. Nairobi isthe center of business and industry. Large areasin the city have been assigned to industries suchas food processing, leather tanning and metalworking enterprises. Since the early 1970s,Kenya has been known for its informal indus-trial sector, encompassing the artisans whomainly work with hand tools and produce forinternal markets.

A classi®cation of microenterprises (1±9 em-ployees), small enterprises (10±49 employees),medium enterprises (50±99 employees) andlarge enterprises (100 or more employees) hasbeen proposed for Kenya by Livingstone (1991)

and other authors. In Kenya, microenterprisesare also referred to as the Jua Kali sector, lit-erally ``hot sun,'' referring to the fact that manysmall-scale manufacturing and repair activitiesare conducted in the open air. The size break-down of the small-scale sector in Kenya showsthat microenterprises are numerous and com-prise about 99% of all enterprises. There aresome two million people (16% of the total laborforce) employed in more than 900,000 microand small enterprises in Kenya. More than 60%of micro and small enterprises are in commerceand trade, about 13% in services and 27% inmanufacturing (Parker and Torres, 1994). Bycontrast, small enterprises ranging from 11±50employees are rare; indeed a ``Missing Middle''in Kenya's manufacturing and industrial sec-tor. A partial explanation is that industrialgrowth has mainly been in the number of new,small establishments instead of the evolution ofindividual small ®rms into larger ®rms. Move-over, also in Kenya, small, informal enterprisesseem to prefer, or feel forced, to stay in thatcategory.

As outlined in the Sessional Paper No. 2 of1996 on ``Industrial Transformation to theYear 2020,'' the Government of Kenya isstriving to become an industrialized country bythe year 2020 (Kenya Government, 1996). TheSessional Paper stipulates policies that willstimulate economic growth and employmentthrough the expansion of the industrial sector.The government's role will be to provide en-abling conditions, by investing in human de-velopment and basic welfare, providing andmaintaining essential infrastructure, and whennecessary, guarding against human exploitationand environmental degradation. The coordi-nation of government activities and a partner-ship approach between the government andprivate sector is considered essential. In theindustrialization process, the Kenyan Govern-ment emphasizes the role of the small-scale andJua Kali sectors. These must be fostered forcontinued growth, as the government expectsthat more jobs will be created in this sector thanin any other nonagricultural sector. Thus, alsoKenyan Government is banking on the em-ployment potential of the small-scale sector.

Policy that is aimed at supporting Jua Kaliand small enterprises has only been issuedafter a long period of earlier governmentaldisregard of the role of small-scale enterprisesin Kenya's economy. In 1989, a small enter-prise development project was started whichinvolved all relevant ministries, the aid agen-

SMALL-SCALE INDUSTRY AND CLEANER PRODUCTION STRATEGIES 969

cies and representatives of industry, commerceand nongovernmental organizations (NGOs).A whole set of strategies was proposed tobene®t small and microenterprises, and cov-ered three domains (Kenya Government,1989):

ÐCreating preferential conditions for small enterprisedevelopment. The role of the government should bechanged from interventionist to a more facilitativerole encouraging e�orts by the private sector itself,and the many macroeconomic, legal, technologicaland ®scal obstacles for development should be with-drawn;

ÐSetting up non-®nancial promotion programs topromote entrepreneurial skills, such as training cours-es in entrepreneurship; and

ÐEstablishing new or adjusted credit programs toprovide small entrepreneurs with easier access to cred-it facilities.

The Kenyan Ministry of Research, TechnicalTraining and Technology has been the mainagency to put in place support programs for theenhanced development of the sector. TheMinistry provides training facilities, encouragesthe identi®cation and mobilization of Jua Kalientrepreneurs, and facilitates the operation ofsmall-scale enterprises by providing plots andsheds, funds for infrastructure and by reviewinglaws and by-laws which impede the develop-ment of Jua Kali enterprises. Apart from such afacilitating agency, some ®nancial institutionshave been speci®cally designed for lending tothe small and medium-sized enterprises. Thereare now about 40 NGOs active in credit pro-vision to small-scale enterprises and Jua Kali,most notably the Kenya Rural EnterpriseProgramme (K-REP).

Unfortunately, the increase in numbers ofinstitutions supporting the small-scale sectorhas not been matched by signi®cant changes inrespective policy though many policy pro-nouncements have been made (Aleke-Dondo,1997). Government policy thus primarily ad-dresses resource constraints by providingcredit, training and infrastructure. Marketproblems and legal obstacles still remain. Al-though the importance of demand-side im-provements are no longer ignored, supply-sidemeasures still prevail. Regrettably, relativelyfew of the ambitious policy measures have beene�ectively implemented to date and most gov-ernment organizations engaged in small enter-prise support are rather ine�ective. Anotherreason for the, so far, limited in¯uence of JuaKali policy is the absence of complementary

industrial policies and relevant trade policies(King, 1996). It can thus be concluded that,though the government policy toward produc-tion and employment generation by small en-terprises is to be welcomed, in practice itsimplementation is lagging.

3. SMALL-SCALE INDUSTRY ANDURBAN ENVIRONMENTAL

MANAGEMENT

(a) Environmental impacts of small-scaleproduction

Environmental pollution in many cities ofdeveloping countries is increasing rapidly. Ita�ects rivers, land and air, and poses healthrisks to the city inhabitants. To alleviate theserisks, and in the interest of continued economicdevelopment, a solution must be found to theproblem of industrial pollution. The situationcalls for innovative, environmentally soundtechnology, policy and management strategies.

In general, large industries are responsiblefor much of the pollution observed. In terms ofpollution load and risk, the small-scale indus-tries are not major producers of waste, ascompared to the large-scale industries. Somehowever, are certainly contributing to envi-ronmental pollution and serious exposure tooccupational health risks. Small-scale indus-tries are gaining importance and their contri-bution to pollution problems cannot beignored. Small-scale industries contribute towater and land pollution through their liquide�uents and solid wastes, and many small en-terprises, such as mills and smelters, contributeto air pollution (Kent, 1991). Combined, thelarge number of small-scale industries has asubstantial environmental impact. As mostsmall-scale industries are situated within or inclose proximity to residential areas, their im-pact on the environment is all the worse. Theycause local pollution and nuisance from therelease of smoke, foul smells, and toxic con-taminants to the air, soil, surface and ground-water, such as chrome from tanneries and oilfrom car garages. Further, poor working con-ditions in the small-scale sector often are acause of occupational health hazards. Workplace safety is compromised by the use ofhazardous materials.

Little is known about the scale of productionand level of formality of enterprises in relationto their environmental impact and the conse-


quences for pollution abatement. Some generalremarks about small-scale industry as opposedto large-scale industry can be derived from anUrban Management Program survey in theearly 1990s on small-scale and cottage indus-tries in India, Mexico, Peru and Zimbabwe(Bartone and Benavides, 1997):

ÐSmall-scale industries are generally not the majorpolluters in their respective industrial sector, due totheir small percentage of total output;

ÐSmall-scale industries pollute more per unit of out-put due to their ine�cient production, inferior equip-ment, poor housekeeping and inability to adopttreatment technologies;

ÐSmall-scale industries are not responsible for thebulk of organic water pollution and air pollution.The problem is toxic waste from speci®c enterprises;and

ÐSmall-scale industries cause local nuisance (includ-ing occupational health problems) due to their dis-persed and residential location. Their very locationmakes monitoring and ®nding common solutions dif-®cult.

Small-scale industries face several constraintsin controlling pollution. Some of these con-straints derive from the inappropriateness ofthe environmental measures for the small-scalesector, others derive from problems of imple-mentation. Management of environmentalproblems is particularly hindered by a lack ofskill and knowledge about pollution problemswithin the small-scale industry sector. Lack ofknowledge of the entrepreneurs of small lead-smelting units in Calcutta, India, for example,resulted in the installation of inappropriate,costly and ine�ective pollution control equip-ment when the enterprises were required to re-duce emissions (Dasgupta, 1997). Small-scaleentrepreneurs generally lack access to environ-mentally sound technologies that are compati-ble to the scale of the enterprise. Theachievement of pollution control is hamperedby the lack of e�ective monitoring, which failsnot only in the detection of small polluters, butalso in insuring that abatement measures areworking properly. In addition, small-scale in-dustries typically have limited space for theinstallation of treatment systems, and economicproblems can prevent the installation and op-eration of pollution control facilities. Oftensmall-scale industries operate in highly com-petitive markets and are only marginally prof-itable, so environmental regulations that addeven modestly to their costs may threaten theirviability.

(b) Urban environmental management

Pollution by small-scale industry is only oneof the sources of urban environmental deteri-oration, and its abatement must be incorpo-rated in broader urban environmentalmanagement e�orts. Increased urbanizationand industrialization have resulted in seriouscity-wide environmental problems. The mostcritical and immediate problems are the healthimpacts of pollution that derive from unsafeand inadequate water supplies, the inadequateprovision of sanitation, drainage and solidwaste services, poor urban and industrialwaste management, hazardous working con-ditions, and the ine�ective control of air andwater pollution. The current poor state of theurban environment has, according to Hardoy,Mitlin and Satterthwaite (1992), to do withgovernment failures to control industrial pol-lution and to ensure that city-dwellers havethe basic infrastructure and services essentialfor health and a decent living environment.Local governments are typically poorlyequipped to operate infrastructure systems andmanage environmental problems. Local gov-ernment o�cials are ill prepared to confrontthese responsibilities due to a lack of re-sources, institutional constraints and insu�-cient capacity.

In addressing urban environmental degrada-tion it is therefore necessary for local govern-ments to be strengthened and for them to enterinto partnerships with other actors. Partner-ships between municipal authorities, localNGOs and community organizations have of-ten proven more cost-e�ective than conven-tional approaches. Bartone et al. (1994) listedfour principal action areas:

ÐStrengthening governance by mobilizing public sup-port and participation to create a constituency for sus-tained environmental improvement, improvinginstitutional capacity for identifying and addressingenvironmental problems, and establishing clearly de-®ned institutional arrangements for urban environ-mental management;ÐImproving policies through more comprehensive,e�cient and e�ective regulatory, economic and envi-ronmental health interventions;ÐImproving urban operations by upgrading the man-agement and delivery of urban environmental servicesand infrastructure, emphasizing strategic investmentsand ®nancing, and establishing public-private partner-ships; andÐImproving information and understanding throughthe collection of environmental data and use of ana-lytical frameworks to understand problems, prioritize


them, and design environmental programs to resolvethem.

Bartone et al. (1994) suggest a strategic ap-proach to urban environmental managementthat emphasizes the importance of having anagreed upon long-term urban environmentalmanagement strategy that will guide the de-velopment of a short and medium-term urbanenvironmental action plan. This should resultin investment priorities and a sustained in-vestment program. Such a strategic approachcould assist the ultimate goal which is thestrengthening of local capacity for urban en-vironmental management. To produce e�ectivelocal action plans, ®rst, the capacities of all thenecessary actors should be mobilized andstrengthened.

Thus, capacity building at the urban level, forboth the public and private sector and NGOs,is considered to be critical in managing theurban environment. A recent research projectaimed at capacity building for urban environ-mental management in Bolivia, India, Peru andSenegal (Edelman and Mengers, 1997) revealedthat complex environmental problems cannotbe addressed adequately without decentraliza-tion of government to the municipal or cityquarter level and the proper functioning of thedemocratic process for decision-making in-volving the relevant stakeholders. Decentral-ization and democratic decision-making needto be backed by a legal framework withinwhich the mandates and responsibilities ofstakeholders are clari®ed. Equally important isthe availability of ®nancial resources for plan-ning and implementation, and the willingnessand political commitment by all stakeholders towork in partnership. In the control of envi-ronmental pollution, the commitment and ca-pacity of local governments and otherenvironmental agencies seem more importantthan a well-de®ned legal framework. It is withinthe context of the challenges faced by the citiesof developing countries that industrial pollu-tion control must be developed.

(c) Environment versus employment

The increase in industrial pollution urgentlycalls for enforcement of emission standards.But, these standards and their subsequent en-forcement can only be e�ective for those in-dustries which are able to adapt theirproduction processes, and which have access tothe required capital and expertise. Hamza

(1987) argues that rational pollution control ofsmall- and medium-sized industries in WesternAsia can be achieved only through realisticregulations and standards. Environmentalstandards should be less strict for small-scaleindustries and then gradually tightened. Urbanenvironmental management therefore needs toseek a balance between concern for the envi-ronment and for employment. The need forenvironmental improvements versus the im-perative of rapid economic growth in manycases is an important dilemma which decision-makers face. The provision of jobs is critical tothe survival of many governments, and cost-generating environmental protection require-ments are often seen as endangering them. Thismeans that hazardous wastes management, forexample, whatever the perceived bene®ts to thepopulation, is given a low priority indeed.There are examples, however, where measuresdesigned to protect the environment have apositive e�ect on employment, such as in waterand sewage works, recycling and waste man-agement, pollution abatement, administration,training, and research and development (Teer-link and Frank, 1993). In particular, the col-lection and recycling of materials such as paper,glass and metal by the urban informal sectorpositively contributes to environmental safety,employment and the saving of resources (Se-thuraman, 1992). In the case of industrial pol-lution, environmental management can beinterpreted as a modernization of the produc-tion process and thus of industrial develop-ment. It results in securing employment of alonger duration, especially if this employmentmeets higher standards in terms of healthyworking conditions. Improved production is anecessity for many industries but unfortunatelysmall enterprises often lack the technologicaland ®nancial capacity to do so without externalassistance.

(d) Environmental management in Kenya

The earlier mentioned Sessional Paper on``Industrial Transformation to the Year 2020''also stresses that industrial development inKenya must adhere to standards of environ-mental protection and resource conservation.Industry must strive for more e�cient use ofenergy and material resources, minimization ofwaste, and proper waste disposal management.Government organizations involved in imple-menting environmental policy will be strength-ened. Polluters will increasingly be confronted


with the cost of their activities under a ``pol-luter pays'' approach. To do so, the govern-ment is considering the introduction of e�uentand emission charges and tax concessions forenvironmentally sound technologies (KenyaGovernment, 1996).

These policies are very much needed, espe-cially in urban areas such as Nairobi, since upto now industries do little to control the releaseof wastewater, gases and hazardous wastes.Nearly every industrial enterprise built alongthe Nairobi River adds to its pollution. Thisoccurs indirectly via discharges to the sewersystem, and directly by enterprises dischargingall kinds of solid and liquid waste into the river.Industries in Nairobi also contribute to airpollution. As industry is dispersed throughoutresidential areas, particularly in the southeast-ern part of the city, air pollution is a di�cultproblem in terms of control and prevention.Moreover, small-scale industries contribute tothat pollution as the following observationsdescribe. In the Gikomba area of Nairobi,heaps of sawdust from the many small-scalecarpenters along the river can be seen and thiswaste almost blocked the ¯ow of the river.Leather tanneries, food-processing industries,textile dyeing industries and print shops, elec-troplating industries and car-repair workshopsare major sources of local pollution and stenchin residential and commercial areas. Toxicwaste streams containing cyanide (from elec-troplating), chromium (from leather tanneries)and oil (from car repair works) accumulate inthe soils and may cause risks for current andfuture residents. In many cases, oil and indus-trial wastewater are disposed of without anytreatment. Residues are dumped at the munic-ipal dumpsites and randomly throughout thearea. Jua Kali artisans claimed that their oc-cupational health hazards range from noise tothe inhalation of toxic chemicals and physicalaccidents. The majority of the workers can beseen working without using any protectiveequipment. The struggle for survival forcesmany to ignore the dangers in their trades.

The ®rst attempts of environmental policyformulation in Kenya took place during thelate 1970s with the establishment of the Na-tional Environmental Secretariat (NES). As apart of the Ministry of Environment and Nat-ural Resources, the NES is the coordinator ofall environmental issues relating to govern-mental policy. At the local level, this responsi-bility lies with Environmental Committees,recently established by local authorities.

The National Environmental Secretariatviews environmental impact assessment (EIA)as a principal tool for achieving its environmentprotection objectives, among others, in theapproval for new industrial facilities. The ac-tual use of EIA, however, has been somewhathampered because NES appeared to be pow-erless to force compliance. Although some ad-vances have been made, NES has never met therequirements stated prior to its establishment;it has never been fully sta�ed or equipped, andtherefore has not been able to become a pow-erful actor among the dominant Ministries.

In 1993, the National Environmental ActionPlan (NEAP) was initiated as a blueprint forintegrating environmental management intodevelopment planning. Among other objec-tives, NEAP aims to review relevant laws inorder to rationalize the legal framework and toprovide e�ective means of enhancing environ-mental management (Ministry of Environmentand Natural Resources, 1994). The process ofestablishing a comprehensive national envi-ronmental policy is, however, proceeding veryslowly. Tasks and responsibilities of NEAPpartly overlap with those of NES, and untilnow it is still unclear which of the two willmainly be responsible for coordinating envi-ronmental policy in Kenya.

In Kenya, policies relating to the environ-ment are sector-speci®c, each being formulatedby the Ministry concerned. Although not in-correct as such in its approach, it has resulted inthe duplication of e�orts and in con¯ictingobjectives. For instance, the Public Health Actand the Water Act both empower their re-spective Ministries to monitor and controlwater pollution. NES produced a Draft Bill,called the ``Environmental Management andCoordination Bill 1995,'' in an attempt to for-mulate an overall framework for the scatteredenvironmental legislation in Kenya, but up tonow this bill has not passed Parliament.

4. POLLUTION CONTROL PRINCIPLESAND POLICY INSTRUMENTS

E�cient and e�ective environmental man-agement calls for a mix of policy instruments,including regulatory, economic and voluntaryinstruments. Initially in Western countries, en-vironmental protection strategies were of acommand-and-control nature using regulatoryinstruments and economic incentives based onthe ``polluter pays principle.'' Industries tended


to comply with the environmental standards setby government through the use of add-ontechnologies. This is still the dominant ap-proach, but both government and industryhave realized that control and enforcement canbe di�cult, and that compliance can con¯ictwith economic interests. A complementary ap-proach occurred based on government-industryinteraction and aimed at self-regulation of in-dustry. Some experience has been achieved withthe use of covenants, environmental auditing,product certi®cation, environmental co-maker-ship, etc. (see Fischer and Schot, 1993). Gov-ernment policy formulation has been gearedtoward providing conducive conditions whichenable industries to better take into accountenvironmental considerations. Industries are inthe process of modernizing from conventional``end-of-pipe'' technologies to cleaner produc-tion, aimed at pollution prevention (Huisinghand Bailey, 1982). Industry and government aremoving beyond the prevention of pollution atsource to incorporate environmental concernsthroughout the life cycle of a product, from rawmaterial extraction to waste disposal. By con-sidering the entire product life cycle, the pro-ducer's responsibility is extended beyondproduct manufacture to ``product caring.'' It isnot only government regulations but also in-¯uence and pressure from the market, either byindustrial customers or ®nal consumers, thatdrives industrial producers to produce cleanerproducts.

Enterprises in the industrialized countriesincreasingly are adopting strategies aimed at amore e�cient (re)use of materials, energy andnatural resources. Examples of industrial re-structuring strategies include environmentalmanagement systems (Welford, 1994), inte-grated chain management, cleaner productionprograms, eco-management and audit schemes(Hillary, 1997), and industrial complexingaimed at waste exchange (Nemerow, 1995). Ithas even been suggested that industries be re-garded as ecosystems (Allenby and Richards,1994) or a metabolism (Ayres and Simonis,1994).

Such initiatives can be brought under theconcept of ``ecological modernization'' (seeSpaargaren and Mol, 1992; Weale, 1992; andMol, 1995). Ecological modernization can beinterpreted as the ecological restructuring ofprocesses of production and consumption. Itadvocates that decisions on investment, re-search and development (R&D), product in-novation or other business strategies should be

made not only from an economic perspectivebut also from an ecological one. The ecologicalswitch of the industrialization process will beencouraged by the development of new tech-nologies that bene®t the environment, byplacing an economic value on nature and en-vironmental resources, and by a politicalmodernization of regulatory and executivebodies of the government. For the latter thisincludes a switch from command-and-controlregulation toward negotiative, enabling andfacilitating strategies of governance. The pro-cess of ecological modernization is alreadytaking place to some extent in the industrializedcountries. There remains, however, the ques-tion as to whether the concept of ecologicalmodernization is of any use in developingcountries. Mol (1995:55) stated that:

ecological modernization theory is based on certainpresumptions which do not always apply to develop-ing regions, e.g., the existence of a welfare state, ad-vanced technological development in a highlyindustrialized society, a state regulated market econo-my (...) and relatively profound and widespread envi-ronmental consciousness.

Some of the newly industrializing countriesin Southeast Asia are rapidly catching up withpractices of industrial pollution control inWestern countries (see O'Connor, 1994), whilein other developing countries there is hardlyany movement toward more ecologically ra-tional production. Often a command-and-con-trol approach is applied in industrial pollutioncontrol. For example, in Vietnam industrialpollution is currently addressed with repressivemeasures of command-and-control, albeit itsenforcement is not always that successful (Moland Frijns, 1997). In India, courts in Delhi andGujarat were issuing orders for the closure ofhundreds of polluting units (Chakraborty,1995). Also, in Kenya, environmental policybased on regulatory instruments experiencingproblems with monitoring and enforcement.Although environmental regulations to stoppollution are to be welcomed they should notjeopardize industrial development at all costs.It is doubtful whether such an approach will besuccessful in the small-scale sector. Not onlyare the widely dispersed small enterprises di�-cult to control, but their ability to abate pol-lution is rather limited so that strictenforcement of environmental regulationscould result in the very closure of small-scaleindustries. Marginally operating enterprises in


particular would be forced to close down as aresult of new environmental policies. Whatthen are the alternatives?

5. SMALL-SCALE INDUSTRY ANDCLEANER PRODUCTION

Many countries have only policies andstrategies targeting pollution caused by largeindustries, but hardly any has a coherentstrategy or legislation targeting the specialneeds of small-scale industries. The approachesrecommended by Kent (1991) for reducing theenvironmental impact of small-scale industrycan in fact be considered general requirementsfor pollution control by all industry, both smalland large:

ÐA policy approach, emphasizing regulations and ®s-cal measures to mitigate pollution; and

ÐA technical assistance approach, emphasizing train-ing, technical transfer, and technology development.

In the next section, some cleaner productionstrategies are discussed as an approach to in-dustrial pollution control that is particularly ofinterest to the small-scale sector.

(a) Cleaner production

A promising concept for pollution control insmall-scale enterprises is that of cleaner pro-duction. Pollution can be considered an indi-cator of ine�ciency. Ine�cient productionmethods lead to wastage of resources, eco-nomic losses, poor working conditions andenvironmental pollution. On the other hand,production processes that are more energy ef-®cient, use fewer resources, and re-use wastematerials not only reduce environmental im-pacts but may also reduce economic costs.Pollution prevention therefore can be a moreattractive approach for industries than treat-ment of waste by end-of-pipe measures thatadd on costs. Enterprises often already pay agreat deal of money to discharge waste andsewage. Additional waste treatment facilitieswould be a heavy burden. The prevention ofpollution thus is becoming more important fora viable enterprise. Especially for the ®rst majorsteps forward to more environmentally soundproduction processes pollution prevention canbe achieved relatively easily with only minoradjustments, as for instance:

ÐInput material changes, i.e., the use of less pollutingraw materials;

ÐTechnology changes, i.e., adapting production pro-cesses to use equipment more e�ciently and introduc-ing clean technologies;

ÐImproved operating practices through ``goodhousekeeping'', i.e., maintenance of (leaking) taps, re-duced spillage, etc., and better process controlthrough monitoring and record keeping; and

ÐRecycling of waste streams, either on-site or as auseful by-product.

Substantial environmental progress can beachieved by such measures. Cleaner productionalso translates into improved working condi-tions for the labourers. Provision of protectivegear and equipment, education on health andsafety and improved housekeeping all reduceoccupational health hazards. Moveover, heal-thy and satis®ed workers are expected to bebetter motivated to do a good job. It is thusbelieved that through the improvement ofproduction processes industries can improvetheir economic and environmental conditions.

Cleaner production, or waste minimization,has to some extent become a regular practice inbusiness operations in Western countries. Step-by-step cleaner production audit methodologieshave been developed, normally consisting ofsource identi®cation, cause assessment andoption generation (see de Hoo et al., 1991;UNEP/IEO, 1991). The Dutch project PRIS-MA (``project industrial successes with wasteprevention'') conducted a survey in 10 medium-sized companies from ®ve industrial sectors onthe possibilities for prevention of waste andemissions. The project concluded that a sub-stantial part of pollution caused by industry(estimated at 30% up to 80% in special cases)can be reduced by the prevention of waste andemissions while still keeping within businesseconomic conditions and using existing man-agement techniques and current technology(Dieleman et al., 1991). Cleaner production isalso gaining importance in the industrializingcountries of Asia (see Sakurai, 1995), and theAfrican region has some ongoing activities incleaner production, through institutionalizedprograms (such as the National Cleaner Pro-duction Centers in Dar-es-Salaam, Harare,Tunis), donor-funded demonstration projectsand private sector initiated activities (Migiro,1996).

Some other experiences with cleaner pro-duction in small-scale industry have beengained. In India, the DESIRE project (``dem-onstration in small industries for reducing


waste''), sponsored by UNIDO and conductedby the National Productivity Council in 1993±94, demonstrated the potential of waste mini-mization in small-scale industry. Technical as-sistance was provided to several small-scalepulp and paper producers, pesticide manufac-turers, and (small and medium-scale) textileprocessors. Numerous waste minimization op-portunities were identi®ed, many of which wereimplemented with little cost and resulted insigni®cant economic savings as well asin remarkable environmental improvements(Chandak, 1994).

Van Berkel (1996) summarizes the potentialof cleaner production for providing signi®cantimprovement in manufacturing industries withrespect to:

ÐEnvironmental burden: The greatest improvementis in the reduction of waste and emissions (usuallyby between 20% and 40%), and, to a lesser extent, inthe reduction in the volume of natural resources con-sumed (often in the range of a 5±40% reduction); and

ÐEconomic performance: Signi®cant economic sav-ings can be achieved, with the overall payback timebeing on average less than one year for all preventionmeasures adopted by the company.

Generally several barriers are encountered inthe implementation of cleaner production pro-grams, including economic, technical, institu-tional and attitudinal barriers, both within andexternal to enterprises. There is the insu�cientinvolvement of employees, limited access toinformation and technology, hesitancy to takerisks, policy aimed at ®nancial support for end-of-pipe measures, and a lack of environmentalpolicy and/or enforcement (Dieleman et al.,1991; and Chandak, 1994). Although cleanerproduction o�ers opportunities for ``win-winsolutions,'' where environmental improvementsgo hand-in-hand with economic bene®ts, itsimplementation often remains di�cult and willnot happen overnight. Cleaner production isnot simply a matter of applying new technolo-gies but requires readjustment and rethinkingthroughout the ®rm (Christie, Rolfe and Le-gard, 1995), for which cooperation, involve-ment and commitment of management andemployees are essential (Zwetsloot and Geyer,1996).

There is a need for small businesses to begiven incentives to undertake environmentalchanges. Some of these incentives are providedby the given environmental legislative frame-work. Other incentives relate to productioncosts, market forces, and occupational health

and safety issues. According to Hillary(1997:309), ``smaller enterprises need powerfulinternal or external stakeholder pressure totrigger environmental action''. There is an ap-parent need to convince entrepreneurs thatenvironmental improvements can reduce costsin the long run, and this could be achieved bydemonstrating best practices. There is a clearrole here for governments in supporting inno-vative developments and providing a forumwhere information can be exchanged (O'Laoireand Welford, 1996). How cleaner productionmeasures can be introduced in small-scale en-terprises of Kenya is discussed in the followingsections.

(b) Environmental impact of small-scale metalindustries in Nairobi

In Kenya, there are nearly 15,000 small-scaleenterprises in the metal sector and they employnearly 30,000 people. Most of these enterprises(94%) have less than ®ve employees (Parker andTorres, 1994). The prospects and problems,such as lack of credit, of the small-scale metalindustries basically are similar to other small-scale subsectors in Nairobi. The environmentalimpact of an individual small metalworkingenterprise is likely to be relatively limited.There are however, thousands of small metalenterprises, and their joint contribution to en-vironmental pollution in the city is likely to besubstantial.

From 1995±97, a study of small-scale indus-tries in Nairobi was carried out to investigatethe main pollution problems, the options forpollution control and the required strategies tosupport more environmentally sound produc-tion (Frijns et al., 1997). The study includedcase studies of three enterprises in the metalsector having between ®ve and 20 employees.The environmental conditions and options forcleaner production were assessed at an elec-troplating, foundry and sheet metal enterprisein Nairobi. Furthermore, ideas for strategies tosupport environmental management in thesmall-scale industrial sector were discussed withthe enterprise owners and key actors in the®elds of small-scale enterprise development andenvironmental policy in Kenya. From the in-depth case studies, the following general con-clusions were drawn:

ÐThe small-scale metal industries contribute to awide range of environmental pollution problems inNairobi. These problems are related to emissions to


water, air and soil, overuse of natural resources, andhealth risks. On the other hand, small-scale metal in-dustries contribute to the recycling of a valuable wastestream, i.e., scrap metal;ÐThe most serious pollution problem caused bysmall-scale metal industries in Nairobi is the releaseof toxic wastewater. Electroplating activities mainlycauses this, and though only few electroplating enter-prises operate in Nairobi the nature of their wastewa-ter is such that the environment is seriously polluted.The contribution of small-scale metal industries to or-ganic water pollution and air pollution is relativelysmall;ÐThe small-scale metal industries have a negativehealth impact on their labourers more so than onthe local inhabitants. This is due to their location inindustrial areas. But, the foundry and especially thesheet metal enterprises cause a smoke and noise nui-sance for the nearby residential areas; andÐSmall-scale metal industries cause pollutionthrough their ine�cient production processes, inferiorequipment, and poor housekeeping. The small enter-prises in general are not able to adopt treatment tech-nologies due to a lack of ®nance, space, experienceand quali®ed operators.

This last conclusion on the causes of pollu-tion is in line with the ®ndings of Bartone andBenavides (1997) mentioned previously. Theseauthors claim that small-scale industries pollutemore per unit of output than large-scale in-dustries. One may say that the small size andthe informal character of enterprises partlyexplains the poor operating conditions, poortechnological and ®nancial conditions, attitu-dinal problems, and poor infrastructure thatcause pollution. But several of the causes arerelated to the institutional environment inwhich the enterprises operate. The lack of en-vironmental policy and the wider lack of anenabling policy to support small-scale indus-tries in the improvement of production are amajor cause of poor environmental perfor-mance by the small-scale metal enterprises.Although this applies also to the larger indus-tries, they often have a greater capacity to im-prove production in an environmentally soundway without outside support.

(c) Cleaner production at small-scale metalindustries in Nairobi: options and constraints

At the three metal enterprises of the Nairobiresearch, the search for options for pollutioncontrol focused on the concept of cleaner pro-duction, i.e., pollution prevention, as from aneconomic point of view this is the most favor-able option. More than 35 cleaner productionoptions were identi®ed (see Frijns et al., 1997).

A large number of these can be introduced atminimal cost, as they relate to good house-keeping and re-use activities. Options related tomanaging the enterprise, record-keeping,training, in-house monitoring, safety andemergency schedules were relevant to all threeenterprises. The monitoring of material andenergy streams is currently very poor and theproduction processes are executed purely onthe basis of experience. The entrepreneurscould save considerably on energy and rawmaterials if these streams were better moni-tored. Input material change, such as cyanide-free plating, and technology changes, such asdrag-out reduction by cascade rinsing, resultedin considerable reduction of the pollution of theelectroplating enterprise.

It appeared however, not at all easy to im-plement the cleaner production measures in theenterprises. A whole range of barriers to thesuccessful implementation of environmentallysound methods of production was identi®ed inthe study. Four types of barriers, at both theenterprise level and at the institutional level,were distinguished:

ÐAttitudinal: First, cleaner production seems not tobe on the agenda of the small-scale entrepreneursand is not given due attention by the Kenyan govern-ment. Attitudinal constraints relate to the underratingof environmental problems, resistance to change, theview that environmental measures are expensive, andan emphasis on end-of-pipe technological measures.Awareness among both employees and employers ofenvironmental and occupational health problemswas generally low. Lack of knowledge and awarenesshampered the introduction of some of the more ``ob-vious'' improvements. Training on these issues couldassist more environmentally sound management andoperation of the enterprises.ÐOrganizational: The small-scale enterprises are or-ganized in such a way, as exempli®ed by ad hoc pro-duction procedures and the lack of involvement ofemployees in decision-making on process changes,that the implementation of standard cleaner produc-tion programs is constrained. Moreover, in Kenya, in-stitutional arrangements to prevent pollution arelacking both for enforcing environmental regulationsand providing support to prevent pollution throughfor example branch associations.ÐTechnical: The development of cleaner productiontechnology in Kenya is limited, in particular of tech-nology suitable for the small-scale sector. The infor-mation and technology that is available is di�cult toaccess by small-scale industry. For example, the elec-troplating enterprise is fortunately not constrainedby a lack of space for new technical devices, but,though the entrepreneur is capable of improving tech-nology based on experience, he is hampered by lack ofinformation and ®nance.


ÐEconomic: The introduction of new technologies orprocesses encounters economic constraints; invest-ments in environmentally sound technology will onlybe made where there are short-term returns. But evenif such technology investments can be shown to im-prove e�ciency in production it remains doubtfulwhether the necessary capital will be made available.In all three enterprises, economic constraints are a pri-mary reason for neglecting options for environmentalimprovement. Despite the potential saving in costs,cleaner production is restrained by ®nancial obstacles,such as low prices for raw materials, low waste dispos-al charges, and lack of funding.

Several barriers at the enterprise level arelinked with the Kenyan institutional environ-ment in which small-scale industries operate. Inshort, one can conclude a general lack of in-centives from government, NGOs or other or-ganizations to engender a movement towardmore environmentally sound production. Notonly company internal factors, such as costawareness and management commitment, areimportant; they should also be backed by ex-ternal drivers that motivate industry to under-take cleaner production. Thus, to overcome thebarriers to implementing environmentallysound measures at the enterprise level, and tosupport individual entrepreneurs in optimizingproduction processes, the focus should beturned toward the institutional context of thesmall-scale industry sector.

6. TAKING THE INDUSTRIALNETWORK INTO ACCOUNT

A change toward cleaner production is notlikely to be readily applied within individualenterprises. The entrepreneur needs to be mo-tivated and provided with incentives by outsideactors. Obviously, governments play an im-portant role here (see Baas et al., 1992). Inaddition, trade associations can provide codesof conduct and information, banks can pro-vide funds, labor unions can mobilize workers'commitment, research institutes can developtechnology and provide training, and envi-ronmental organizations and consumers canprovide pressure and demands for cleanerproducts (Boons and Huisingh, 1992). It isespecially within industrial interactions thatenvironmental improvements can be induced(see also Christie, Rolfe and Legard, 1995).This could particularly be valid for the small-scale sector.

(a) Role of branch associations

In the industrialized countries, branch asso-ciations incidentally exert pressure on theirmembers to improve their environmental per-formance. Industry has come to realize that it isoften judged by the worst polluting enterprisesin its particular sector. Codes of conduct andstatements of principle, such as on processsafety and pollution prevention, are used toprovide a framework for the transfer of tech-nology and know-how to pull up standards.Governmental agencies increasingly acknowl-edge branch associations as a favorable ``en-tering port'' for environmental policy inter-ventions and try to supply them with tasksrelated to the provision of environmental ser-vices (Mol, 1995). Trade associations can, anddo, provide information for their members onenvironmental issues and encourage coopera-tion among companies (Welford and Gould-son, 1993).

To some extent, branch associations play asimilar role in pollution control in developingcountries as well. In Thailand, for instance, theFederation of Thai Industries has been em-powered by the national government to ensurethat its member industries comply with envi-ronmental standards and regulations (O'Con-nor, 1994). In the case of micro and smallenterprises, however, the entrepreneurs tend toavoid associations, as the perceived bene®ts areoutweighed by the limited time the entrepre-neur has available to participate in activitiesand meetings of associations (McCormick andPedersen, 1996). Thus, not too much is to beexpected from environmental improvements inthe small-scale sector through branch associa-tions, but they could be a good starting point.

(b) Pressure along supply chains

In the industrialized countries, small ®rmsare facing increased pressure as environmentalmanagement strategies are pushed along thesupply chain. Such ®rms have to adapt if theyare not to lose markets. Small and medium-sized enterprises therefore ®nd themselves partof increasingly complex supply chains driven byquality standards and environmental demands.In The Netherlands and Japan, for instance,large enterprises have increasingly appliedstringent standards to their suppliers. This hasa�ected the organization of quality caresystems in the medium- and small-scale enter-prises. Increased demands on stringent envi-


ronmental standards could, and to some extentalready do, result in the incorporation of en-vironmental concern in the quality care systemsof medium- and small-scale enterprises.

An Austrian study indicated that the imple-mentation of preventive environmental mea-sures in small and medium-sized enterprises isdictated to a large extent by market mecha-nisms and market-driven factors (suppliers,customers, competitors, disposal companies)(Hahn, Geisslhofer and Ernst, 1996). Oneshould not, however, be overoptimistic aboutthe achievements of self-regulation throughpressure along supply chains. A survey of 102small- and medium-sized manufacturing busi-nesses in West Yorkshire, UK revealed thatwhile environmental performance is pushedalong the supply chain, most of the pressureseemed to be coming from the regulatoryagencies rather than directly from customers(Welford, 1994). According to Christie, Rolfeand Legard (1995) regulation is a key driver forenvironmental innovation in companies.

In any case, we recommend that the indus-trial networks and institutional framework ofsmall enterprises be taken into account in thesearch for appropriate environmental mea-sures. The following section discusses how thiscan take shape in the case of Kenya.

(c) Mobilizing institutional support for cleanerproduction in Kenya

In the survey on the three small-scale metalenterprises in Nairobi, the interactions and re-lations with other actors were assessed to get abetter understanding of possible outside sup-port to introduce cleaner production. For thisassessment, so-called networks of actors weredistinguished, i.e., the industrial, policy andsocietal networks (see Frijns et al., 1997).

For all three small-scale metal enterprises inNairobi, the main actors within the industrialnetwork proved to be the clients and the sup-pliers. They form the ®rst links at both supplyand demand sides of the production chain andare the ®rst to be dealt with if production has tobe altered. Since the market determines whatquality of product is acceptable and at whatprice, clients are the ®rst to deal with if productquality is at stake. This might also have impli-cations for the environmental quality of prod-ucts and production. In the case of the foundry,for example, better quality products demandthat the enterprise use higher quality scrapmetal, resulting in possible energy savings and

thereby in reduced air pollution and less waste.In turn, higher quality scrap metal has to beobtained from scrap metal suppliers. The ex-ample shows that cleaner production cannot beexecuted by the entrepreneur alone. In one wayor another, the chain from supplier to customeris a�ected too.

Interactions with neighbouring enterprisesprovide opportunities for cooperation in tack-ling environmental issues. This can be done bythe exchange of information, joint consider-ation of options for common treatment anddisposal of waste, and negotiations with envi-ronmental agencies in local government. Forexample, the disposal of company waste fromthe foundry enterprise could be dealt with col-lectively with the other enterprises at the com-mercial plot.

Interaction with government agencies ismainly associated with formal arrangements,such as registration procedures, licenses and taxduties. For all three enterprises, one could saythat participating in policy networks is far outof reach. Contacts with government represen-tatives are avoided rather than aspired to andin¯uencing policy concerning the interests ofsmall-scale industries is, at least for individualentrepreneurs, out of the question. This is notto say that there are no actors within the policynetworks involved in matters concerning small-scale industry or the urban environment. TheKenyan Government perceives support to thissector as very important. The policy addressesresource constraints by providing credit, train-ing and infrastructure. Its implementation,however, as the study has shown, seems to belagging behind requirements. One of the ex-planations for this is that policy aimed at sup-porting small-scale industry is formulated atthe national level, while its implementation ismainly the responsibility of o�cials at the locallevel. There is still a large gap to bridge betweenthe ambitions stated in national policy docu-ments and the practice of o�cials at local level.The study showed that the enterprises are notreceiving incentives to control pollution. Cur-rently, governmental agencies concerned withthe environment and industry in Nairobi do nothave the capacity to steer industries towardenvironmentally sound production.

Support for small-scale industry need notcome from government alone, it could also beprovided by organizations in the societal net-work. The availability to small-scale entrepre-neurs of resources such as training facilities,credit programs, and research and development


facilities could well be developed by NGOs andtrade and industry organizations. In Kenyathere are many NGOs with small-scale andmicro-entrepreneurs as their main target group.The sheet metal workshop particularly hasbene®ted from NGO support, but in general,environmental issues related to small enterprisedevelopment are underrepresented. NGOscould play an important role in raising envi-ronmental awareness. It would be a small stepto incorporate environmental criteria in NGOactivities, such as business training, to promotethe need for more e�cient and thus cleanerproduction.

7. TOWARD A STRATEGY SUPPORTINGCLEANER PRODUCTION

The study of the institutional context of theKenyan enterprises provides the tools to for-mulate strategies for environmentally soundrestructuring of the small-scale metal sector.The following sections present the main ele-ments of such supportive strategies. Althoughonly a small number of enterprises have beenstudied, and one has to be careful in general-izing the ®ndings, some directions for pollutioncontrol of small-scale industry in developingcountries can be derived. It would be worth-while to verify these ®ndings and directions inother small-scale sectors and countries.

(a) Raising awareness and providing training

On the average, the awareness of risks, oc-cupational health and pollution among thesmall-scale industry entrepreneurs and theirworkers is low. The entrepreneurs, as well aspolicy makers and other actors involved insmall-scale industry development are oftenunaware of the environmental and occupa-tional health risks of small-scale manufactur-ing.

There is a need to raise awareness and pro-vide training, both at the enterprise level andpolicy level. Raising awareness at the enterpriselevel should focus on opportunities to save onresources and energy, and on the relationshipbetween environmental conditions and em-ployee health. This will motivate the owners toprovide protective gear and the employees touse and insist on having them. There is, how-ever, still a long way to go since income and jobsecurity are the main concerns of the employ-ees. Attitudinal obstacles can be overcome by

conveying the bene®ts of cleaner productionthrough success stories from similar enterprises.At the policy level, environmental awareness isparticularly important since it should lead tothe formulation of standards that could be en-forced. Governments should provide informa-tion and organize training on cleanerproduction, and they must assist industry in thedevelopment of management tools such as en-vironmental audits.

Training in more environmentally soundmanufacturing could be taught at all levels,including polytechnics and engineering institu-tions. Prospective trainees need direct exposureto real case studies and demonstrations. Someof the trainees end up working in the small-scale sector, so raising environmental aware-ness at this early stage could motivate them toaddress environmental concerns in their ownoperations. Existing training programs in thesmall-scale sector, including those provided byNGOs, could be adjusted to meet the need formore environmentally sound production.

(b) Providing ®nancial and technical incentives

Quite often, small-scale enterprises are inneed of ®nancial support as well as appropriatetechnology to improve their production. Theset of possible ®nancial incentives includeslevies and subsidies to steer production in anenvironmentally sound way, taxes on raw ma-terials and energy, and reduced import dutieson cleaner technologies. To promote cleanerproduction measures which are cost intensive,the government and donor agencies shoulddevelop schemes for ®nancial assistance thatare procedurally simple and easily accessible bysmall-scale industry. The possibility and thedesirability of putting an ``environmental con-dition'' in credit provision programs for thesmall-scale sector could be considered. Alsoworthwhile testing is the provision of individualor group-based credit to address environmentalconcerns.

Technical incentives include the provision ofresearch and development facilities for thesmall-scale sector, and emphasis on environ-mental technology development at researchinstitutes and universities. In short, clean tech-nology development, demonstrations and thedissemination of information is required. Whilethere is some information on cleaner produc-tion, access to it and the user-friendliness of theinformation itself needs to be improved, par-ticularly for small-scale enterprises.


Although technology development and dif-fusion need to be taken up, it's obvious thatthis will only prove successful if the previousrecommendation of awareness raising and thefollowing two recommendations are simulta-neously acted upon.

(c) Organizing small-scale enterprises intopolicy-making bodies

In most countries, there is only limited in-teraction between small-scale entrepreneursand government, and to a greater extent, NGOrepresentatives. This constitutes a problemsince the views and needs of small-scale indus-tries should form the basis of policy-makingand conversely, policy guidelines should beimplemented at the level of small-scale indus-try. More focused interaction between govern-ment and the small-scale sector is required, forwhich representation of organized small-scaleentrepreneurs is advocated, for example, bystrengthening existing informal networks.

Cooperation among entrepreneurs could ®llthe gap between the national policy level andenterprise level and should lead to possibilitiesfor joint strategies on waste minimization,pollution control and occupational health im-provements. Further, organized enterprises areeasier to reach for training and to target ®-nancial and technical support. Cooperationand networking of small enterprises at the locallevel might serve to distribute costs of envi-ronmental management while sharing solutionsand environmental technology.

Environmental change could also occur fromgreater collaboration between enterprises andtheir suppliers or clients, for example, throughchanges in input materials or product speci®-cations. As environmental awareness and poli-cy has not yet taken a strong foothold in thecommunity of many developing countries, ini-tial expectations for client±supplier inducedenvironmental transformations should bemodest.

(d) Coordinating environmental policyincentives and small-scale industry support

programs

Industrial policy should be based on theconcept of sustainable development, and com-prehensive environmental policy should be de-veloped to steer industrial development in asustainable direction. As stated previously, themere enforcement of strict environmental

standards could prove to be counterproductive,as it may force many small-scale industries toclose down. All too often, however, small-scaleindustries face no environmental control fromgovernment at all. Therefore, enforcement ofregulations should be used in conjunction withother environmental policy activities and bepart of an overall urban environmental man-agement approach as discussed in Section 3.The emphasis on end-of-pipe measures shouldbe reduced and environmental policy be modi-®ed to incorporate the bene®ts of cleaner pro-duction. This requires a more participatory andconsensual pollution control approach as ad-vocated by the ecological modernization con-cept.

Capacity building is required for the institu-tions that deal with small enterprises and/or theenvironment, and their e�orts need to bestrengthened and coordinated to avoid con¯ictand duplication of e�ort. There is a need tobring together existing programs and policyguidelines on support of small-scale industry,environmental pollution abatement, andworkers' health. The objective must be to re-solve problems as far as possible by coordi-nating the incentives and the relevantprograms. Establishing support groups, con-sisting of relevant actors in the ®elds of policy-making and implementation may be valuable inenhancing and monitoring this process.

8. CONCLUSION

What can be concluded is that small-scaleindustries in developing countries signi®cantlycontribute to urban environmental pollutionand that these enterprises have little opportu-nity to control the pollution. The mere en-forcement of environmental regulations wouldimpede economic development of small-scaleindustries and slow down employment growth.Cleaner production measures, however, are apromising approach to control pollution in aneconomically feasible way, but small-scale in-dustrial enterprises need speci®c additionalsupport to implement these waste-minimizatione�orts. The development of such a strategyshould be based on a contextual approach ofsmall enterprises and not be undertaken inisolation. Such an approach not only takes intoaccount the operating and environmental vari-ables of the enterprises, but also the location ofthe enterprises, the entrepreneurs' economicprospects, and social relationships with other


entrepreneurs, NGOs and governmental agen-cies.

Research on three small-scale metal enter-prises in Nairobi revealed the relatively pollut-ing character of small-scale production, andshowed di�erent operating conditions amongthe enterprises which were related to the en-trepreneurs' ties with their economic, policyand societal actor-networks. These speci®cconditions proved to be crucial in consideringimplementation of cleaner production measureswithin the enterprises. It can be concluded thatin implementing environmental measures, oneshould actively involve those actors and agentsthat are most relevant for the current operationof the enterprise, such as customers and sup-pliers, ®nanciers, NGOs and governmentalagencies.

Hence, in encouraging cleaner production atsmall-scale industry, four key elements of anoverall supportive strategy are proposed:

ÐRaising the awareness of entrepreneurs about envi-ronmental and safety issues, and educating employeesand o�cials dealing with the small-scale sector on en-vironmental issues;

ÐProviding technical and ®nancial incentives forcleaner production to small-scale industry;

ÐImproving possibilities for representation and orga-nization of small-scale entrepreneurs in decision mak-ing bodies; and

ÐCoordination of currently diverging policy e�ortsand NGO programs on small-scale industries and en-vironmental issues.

Such a strategy does not imply a need toformalize what is informal, but rather to con-verge and refocus existing programs toward thesmall-scale industrial sector. The results of thisstudy justify the need to structurally incorpo-rate environmental considerations into existing,and widespread, small-scale industry supportprograms to diminish and prevent rising pol-lution levels in urban residential areas in de-veloping countries. It would be valuable toassess further the possibilities of integratingsmall-scale industry pollution control practicesinto current urban environmental managementpolicies of decentralization and partnershipapproaches.

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