INTERNATIONAL WATERS
EXPERIENCE NOTES
2
http://www.iwlearn.net/experience








2007-003

Building Successful Technological and
Financial Partnerships with the Private
Sector to Reduce Pollutant Loading


Abstract: The Danube TEST project was designed and targeted to demonstrate how environmentally
sound technologies would not only aid in reducing point-source pollutants but would assist the associated
enterprises that adopted them in being more cost-effective and less wasteful. Although there are
capacities in Danubian countries to provide many of the services needed by industry to pursue the
simultaneous objectives of competitiveness enhancement, social responsibility and environmental
compliance, these capacities remain isolated in separate institutions and companies. The TEST approach
used a sequence of modular, customizable tools (An Initial Review of Company Needs, Environmental
Management Systems, Cleaner Production Assessment, Environmental Management Accounting,
Environmentally Sound Technology Assessment and Sustainable Enterprises Strategy). Although
companies were initially cautious about the entire TEST approach, in most cases they quickly came to
understand the potential advantages to them within the overall business landscape in terms of both
complying with environmental norms and therefore being able to compete within a wider market, as well
as actual savings in terms of reduction in wastes and unnecessary discharges. TEST provides a real
example of how partnerships with the private sector can lead to major improvements within the regional
and global environment through improved processes, stress reduction and eventual environmental status
improvements.

David Vousden
DavidVousden@aol.com
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Building Successful Technological and Financial Partnerships with
the Private Sector to Reduce Pollutant Loading

Experience of the GEF - sponsored

GEF/UNDP: Transfer of Environmentally Sound Technology (TEST) to
Reduce Transboundary Pollution in the Danube River Basin
GEFID: 867, UNDP: RER/00/G35

PROJECT DESCRIPTION
even enhance their competitive position. In the

three-year period of the MSP, the project
The Danube River basin is the heartland of
successfully completed training and knowledge
central Europe. The main river is 2,857 km long
transfer related to capacity building and
and drains 817,000 sq. km including all of
institutional strengthening at both the level of the
Hungary; most parts of Romania, Austria,
selected demonstration enterprises and at the
Slovenia, Croatia, and Slovakia; and significant
level of the national counterpart institutions
parts of Bulgaria, Germany, the Czech Republic,
(Cleaner Production Centres (CPC's), and
Moldova and Ukraine. The territories of Serbia
Pollution Control Centres (PCC's), etc). The
and Montenegro, Bosnia and Herzegovina and
actual demonstrations of the TEST approach in
small parts of Italy, Switzerland, Albania and
selected industrial/commercial enterprises was
Poland are also included in the basin. The
equally as successfully with considerable
Danube River discharges into the Black Sea
investment made by the selected companies
through a delta which is the second largest
into the adoption of cleaner production
natural wetland area in Europe.
processes and environmentally sound

technology. 17 enterprises in 5 countries were
In April 2001, the GEF Transfer of
successfully introduced to TEST and various
Environmentally Sound Technologies (TEST)
options for environmental management and
project started under the implementation of
pollution reduction were adopted to varying
UNDP and executed by UNIDO. The
degrees dependent on availability of funding. 5
Development Objective of the TEST initiative
Cleaner Production Centres or similar bodies
was twofold:
were trained and had their capacity enhanced in
order to service the needs of these enterprises.
S To improve industrial environmental
The training and capacity building of these
management by major industrial enterprises
national institutions is the subject of another
in the Danube River Basin, resulting in major
IWEN related to the TEST process (See 8.
reductions in pollutant loading and
REFERENCES below)
consequently risk to the Danube River and

Black Sea aquatic environments.
The Independent Terminal Evaluation of GEF
S To build capacity in networks of national
TEST found the project to have been most
cleaner production institutions to advise the
notably successful and a very worthwhile
enterprises in the five participating countries
example of a GEF MSP investment from which
on how to implement the TEST approach.
many valuable lessons and practices could be
captured. The Evaluation provided a number of
This was a GEF Medium Sized Project which
recommendations, including the proposal that
was designed and targeted to demonstrate how
serious consideration be given to further
environmentally sound technologies would not
investment to transfer these lessons and best
only aid in reducing point-source pollutants but
practices and to build on the substantial
would assist the associated enterprises that
achievements of the TEST project.
adopted them in being more cost-effective and

less wasteful. This project took on the challenge
THE EXPERIENCE
(over a 3 year period) to effectively demonstrate

to the industries of five Danubian countries
Issues and Challenges
(Bulgaria, Croatia, Hungary, Romania and

Slovakia) that it is possible to comply with
environmental standards and still maintain, or
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The Transboundary Analysis (TDA) for the
2) Undergoing increasing industrial production
Danube River Basin (1999) identified the
and consumption,
following main problems that affect water quality
3)
Experiencing growing environmental
use: high load of nutrients and eutrophication;
pressure, and
contamination with hazardous substances,
4) Experiencing changing social conditions and
including oils; microbiological contamination;
pressures.
contamination with substances causing

heterotrophic growth and oxygen depletion and
Each of these countries had industrial
competition for available water. The human
enterprises which were contributing very high
activities contributing significantly to these
nutrient loadings to the river basin. Selection of
problems are human settlements, agriculture
enterprises was a difficult step due to the fact
and industry.
that the participating countries are characterized

by lack of enforcement of environmental
Within the framework of the UNDP/GEF
legislation and by limited understanding of
Pollution Reduction Programme (PRP) in
environmental concerns. The intention was to
1998/1999, country expert teams under the
develop integrated services within each of the
guidance of the respective country programme
industries in order to achieve the simultaneous
coordinators undertook a new, comprehensive
objectives of A) Competitive enhancement of
review of the sources of pollution and their
their production and marketing, B) Improved
effects in the Danube River Basin and the Black
social responsibility (both in relation to the
Sea. Each national team developed a national
workplace and local landscape), C)
review for their respective countries based on a
Environmental compliance to meet market
common methodology. The results were then
demands and national priorities.
compiled and analysed at the regional level in

the TDA. Based on the TDA and the ICPDR
Not all `hot-spot' enterprises were suitable for
Emission Expert Group.
the TEST project (most of the hot spot

companies were in very difficult financial
Up until the inception of the TEST initiative
circumstances related to economic transition).
within the Danube basin, there was a lack of
Financial viability of companies was not easy to
convincing practical demonstrations with private
assess on a preliminary basis, due to lack of
sector commercial enterprises to show that it is
reliable data. Moreover many companies do not
possible to comply with environmental norms
have formal medium-long term management or
and still remain or perhaps enhance their
environmental strategies, which further
competitive positions. Although there are
complicated the identification of appropriate pilot
capacities in Danubian countries to provide
enterprises for project implementation. This was
many of the services needed by industry to
a common situation within the transition
pursue the simultaneous objectives of
economies at the time where companies were
competitiveness enhancement, social
rushing to meet demand and their focus on
responsibility and environmental compliance,
near-term survival was higher than that of
these capacities remain isolated in separate
building a medium-long-term strategy. Once the
institutions and companies. These services were
enterprises realised that they would also need to
not being provided as an integrated service
contribute time, financial and human resources
package that is needed by the enterprises to
to the project aims there was a further natural
pursue the three objectives simultaneously.
selection process through attrition and lack of

`ownership' for the project concepts and
Addressing the Issue
outcomes. In the end 17 enterprises qualified,

volunteered and were adopted for the TEST
The UNDP/GEF Pollution Reduction Programme
demonstration process. The aim of the TEST
identified 130 major manufacturing enterprises
initiative was to work with the selected pilot
of concern (known as hot spots) within the
enterprises to:
Danube River Basin. Five countries were
selected to participate in the TEST programme
S Demonstrate the feasibility of achieving
(Bulgaria, Croatia, Hungary, Romania and
industrial compliance with environmental
Slovakia). All of these target countries were in:
norms and social considerations while

maintaining a company competitive edge
1) Economic and political transition,
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S Bringing the selected enterprises into

compliance with European Union Accession
RESULTS AND LEARNING
requirements as well as the Danube River

Protection Convention requirements
Although companies were initially cautious about

the entire TEST approach, in most cases they
National counterparts were also identified within
quickly came to understand the potential
each country in order to deliver the necessary
advantages to them within the overall business
TEST products and training. These were either
landscape in terms of both complying with
existing national Cleaner Production Centres (as
environmental norms and therefore being able to
established by UNIDO and UNEP) or other
compete within a wider market, as well as actual
appropriate Pollution Control Centres or
savings in terms of reduction in wastes and
Institutes dealing with national pollution
unnecessary discharges.
management and control. The project aimed to

build the capacity of these national bodies to
One pertinent example out of the 17 assisted
implement TEST tools.
enterprises relates to an alcohol production

plant. The TEST assessment process identified
The TEST approach used a sequence of tools
the problems within this plant as:
that were effectively modular in that specific
tools could be targeted or enhanced to suit
S Its product being too poor quality to be
specific enterprises. The Project provided
acceptable on the EU market
training and delivery in the following TEST tools:
S Unacceptably high discharges of pollutants
(slops and liquid waste) causing conflicts
A. An Initial Review of Company Needs: To
with regulatory bodies
identify which of the following modules need
S Consequent threat from Government of
to be integrated into the specific enterprises'
`shut-down'
TEST programme
S Massive losses of thermal energy through
B. Environmental Management Systems:
cooling water discharges
Practices and procedures to promote an
S Over 60% of company costs going toward
environmental policy within a company's
production of wastes (the `hidden factory')
overall quality management system
S Less than 30% of production costs actually
realised in alcohol
C. Cleaner Production Assessment: An

integrated preventive environmental strategy
The TEST solutions that were delivered were as
applied to industrial processes, products and
follows:
services to increase overall efficiency and
reduce risks/impacts to humans and the
S A change from sugar to cereal-based
environment
alcohol production, able to convert the
D. Environmental Management Accounting:
organic matters of the slop into commodity
Identifying the financial impacts on improved
products
environmental performance (which can
S A higher quality product for the EU market
negative or positive)
S Reduced chemical oxygen demand in the
discharge (related to quality and consistency
E. Environmentally Sound Technology
of slops) by a factor 100% as well as
Assessment: Implementing best available
reduced water consumption of 80% and
techniques and practices to improve
wastewater discharge
environmental performance or meet
S The slops were also captured as a valuable
environmental norms
by product (animal feed)
F. Sustainable Enterprises Strategy:
S The water in the processing was now
Adoption of all of above into performance
recycled (with associated high savings
objectives within an overall business
related to reductions in water pumping and
strategy so they are not `stand-alone' but
thermal losses)
form part of overall company policy
S As a result of this successful demonstration,
Over a 3 year period, the Project worked with
five other companies linked to the TEST
the national counterpart institutes in each
Pilot were then targeted by the owners for
country to train their selected enterprises in the
similar modification (effective replication of
implementation and adoption of the appropriate
the process)
suite of TEST tools.

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The following is a summary of the overall
recycling and new-product identification)
achievements of implementing the TEST
proved to be stronger incentives than purely
process at all of the selected companies:
environmental compliance (e.g. national
regulatory requirements which often
S A general reduction in unnecessary
amounted to the need to pay small fines and
investments and costs to companies of
penalties).
producing waste products
F. The process could have been even more
S Change from loss to profit by using of
effective in the longer term if low-interest
wastes (recycling or alternative products)
`soft' loans had been negotiated so that
S Overall improvements in quality of products
companies could have accessed the larger
S Increased marketing potential as a result of
investment requirements needed to carry
higher quality linked with environmental
out some of the major best available
acceptability
practices and technology improvements
S Avoidance of fines, penalties and ill-will with
recommended as a result of the TEST
regulatory bodies monitoring compliance
process.
S Overall improvements to company profiles

and credibility
REPLICATION


As a result of these demonstrated
The Danube TEST project was always intended
achievements. Considerable investments were
to develop pilots and lessons which would be
made by most of the companies into cleaner
highly replicable and the lessons learned to date
production processes and more
have been shared with the GEF UNDP Danube
environmentally-sound technologies
Regional Project, the International Commission

for the Protection of the Danube River Basin,
The lessons learned from this exercise in
and various other groups and fora, including the
relation to improved industrial environmental
GEF's Third Biennial International Waters
performance versus competitive advantage as
Conference in Brazil in 2005.
demonstrated via delivery of TEST tools can be

detailed as follows:
Further TEST initiatives are currently under

implementation or being developed. This
A. The companies reacted positively and
includes a follow-up to the Danube TEST pilot
became very supportive and enthusiastic
project which aims to extend delivery of the
once the problems were identified within
TEST process within other Danube river basin
each company in relation to pollution
countries as well as to countries in the basins of
discharges and wastes, and linked to
the Black and Caspian seas.
improved market competition and

compliance.
In replicating these early TEST initiatives it
B. As a consequence, and as the TEST
would be advisable to take note of the following
process progressed, companies learned to
challenges and potential improvements:
relate cleaner production to increased
savings and a more competitive status in a
S Enterprises are more likely to pursue and
wider market.
adopt some of the more high investment
C. The development of the concept of the
TEST options if they have access to low
`hidden factory' of non-productive wastage
interest loans. Therefore it would be
and the identification of this as a major
advisable to negotiate such loans at an early
financial drain created significant interest
stage.
and cooperation from the companies.
S Governments should become more involved
D. The fact that this TEST pilot initiative was
with the TEST process by providing
being undertaken in relevant countries
incentives. In some countries, demonstrating
committed to EU pre-accession
ISO14000 accreditation and other
requirements was extremely beneficial in
compliance and environmental norms
creating company `buy-in' initially and in
results in significant reductions in company
delivering project objectives in those
licensing fees. Obviously, cleaner production
countries overall.
and compliance are all in the national
E. Major economic drivers (e.g. EU pre-
interest
accession requirements, savings from
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S It is critically important to capture the
products that will result in beneficial
lessons and experiences from initial
improvements to the sustainable management
enterprises that have successfully
and protection of watersheds (including rivers
implemented TEST and to identify suitable
and lakes) and coastlines as well as the open
opportunities at the national level in which to
oceans and high seas.
share these experiences so as to encourage

other enterprises and to foster government
REFERENCES
support for TEST approaches

S Those enterprises that may not meet the
Website for the Transfer of Environmentally
eligibility criteria or which do not volunteer to
Sound Technology in the Danube River Basin:
be part of such an initiative may be the ones
www.unido.org/doc/26190
that are in most need of TEST tools and

may be causing the greatest level of
Contact Information:
pollution. The National Government shall

target these companies with specific actions
Roberta De Palma, Project Director
S TEST training is a dynamic and on-going
depalma.roberta@gmail.com
process. A process needs to be identified

whereby companies can be reviewed and
Pablo Huidobro
reassessed for TEST-related efficiency and
p.huidobro@unido.org
sustainability.

S TEST initiatives of this nature (especially
Publications (UNIDO):
through funding-assisted projects) need a

realistic preparatory and lead-in time in
Productivity and Environmental
order to identify potential counterpart options
Performance: An Integrated Approach.
(especially in the absence of Cleaner
Know-how and experience from the UNIDO
Production Centres - CPCs) and their
project "Transfer of Environmentally Sound
suitability and to allow for enterprises that
Technology (TEST) in the Danube River
may drop out in the earlier stages. Such a
basin (Authors: Roberta De Palma, Vladimir
preparatory phase (e.g. a PDF B phase,
Dobes)
which was not available in the above case

as it was a Medium Sized Project) also
Introducing Environmental Management
allows time for awareness building within
Accounting at Enterprise Level. Methodology
potential candidate enterprises as well as
and Case Studies from Central and Eastern
time to identify co-funding options and
Europe. (Authors: Roberta de Palma, Maria
partnerships in support of the TEST
Csutora).
process.

S Existing CPCs with TEST experience can be
KEYWORDS
used for regional training to build capacity

within new or less experienced institutes.
Environmentally Sound Technology

Industrial Environmental Management
SIGNIFICANCE
Private Sector Partnerships


This TEST initiative is of enormous significance
The Global Environment Facility
(GEF)
to transboundary waters management as well as
International Waters Experience Notes series
to the overall control of land-based sources of
helps the transboundary water management
pollution, integrated water resources
(TWM) community share its practical
management and coastal area management per
experiences to promote better TWM.
se. TEST provides a real example of how
Experiences include successful practices,
partnerships with the private sector can lead to
approaches, strategies, lessons, methodologies,
major improvements within the regional and
etc., that emerge in the context of TWM.
global environment through improved

processes, stress reduction and eventual
To obtain current IW Experience Notes or to
environmental status improvements. Real,
contribute your own, please visit
measurable and positive changes can be made
http://www.iwlearn.net/experience or email
to water quality, reductions in harmful
info@iwlearn.net.
discharges and recycling or use of waste
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