Shared Space

This volume was published with the assistance of the Tinker Foundation and the William and Flora Hewlett Foundation.

Leslie Sklair Mark J. Spalding

Lina Ojeda Revah Kefth Pezzoli 0. Alberto Pombo

Stephen P. Mumme

SarahHil Francisco Lara Suzanne M. Michel Carlos Montalvo Corral

Tito Alegrfa Donovan Corliss Lawrence A. Herzog

CONTPIBUTORS

U.S.—Mexico Contemporary Perspectives Series, 16 Center for U.S.-Mexican Studies University of Califomia, San Diego

UNWERSITY

o CALIFORNIA, SAN DIEGO

LA JoLL?

CENTER FOR U.S.-MEXICAN STUDIES

LAJOLLA

Lawrence A. Herzog

edited b

Rethinking the U.S.—Mexico Border Environment

Shared Space

333.7’0972’1—dc2l

HC11O.E5 S474 1999

—

99-050022

environment / Shared space : rethinking the U.S.-Mexico border edited by Lawrence A. Herzog. perspectives series; 16) p. cm. (U.S.-Mexico contemporary Inciudes bibliographical references. ISBN 1-878367-43-9 (paper) Sustainable 1. Sustainable development--Uflited States. 2. Region. 1. Border development--MeXicO. 3. Mexican-American Herzog, Lawrence A. (Lawrence Arthur) II. Series.

Library of Congress Cataloging-in-PUblication Data

Printed in the United States of America

Cover art: Linoleiim block print by Annika Nelson Cover design by Sirious Design

Published by © 2000 by the Regents of the University of California. of Califomia, the Center for U.S.—Mexican Studies at the University Pan-American San Diego. All rights reserved under International and reproduced or Conventions. No part of this publication may be mechanical, transmitted in any form or by any means, electronic or storage or inciuding photocopy, recording, or any information from the retrieval system, without prior permission in writing publisher.

1 7

6

5

4

3

2

1

vii

75

41

17

Transboundary Networks for Environmental Management in the San Diego-Tijuana Border Region Francisco Lara

Sarah Hi11

The Political Ecology of Environmental Leaming in Ciudad Juârez and El Paso County

Stephen P. Mumme

Sustainable Development and Environmental Decentralizafion on the Border: Jnsights from Sonora

155

129

101

PART II: DECENTRALIZATION AND LOCAL GOVERNANCE

Mark 1. Spalding

The NAFTA Envfronmental Institutions and Sustainable Development on the U.S.—Mexico Border

Keith Pezzoli

From Pollution Prevention to Industrial Ecology: An Agenda for Research and Prachce

Leslie SkÏair

Global Capitalism and Sustainable Development: Exploring the Contradictions

Laurence A. Herzog

3

PART 1: RETHINKING THE ENVIRONMENTAL FUTURE The Shared Borderlands

Preface

Contents

265

233

211

185

Tito AÏegrfa

Transmigrants, the NAFTA, and a Proposal to Protect Air Quality on the Border

Carlos Montatvo Corrat

Structural Determinants of Sustainabifity in the Maquitadora Industry on Mexico’s Northern Border

Donovan Corïiss

Regulating the Border Environment: Toxics, Maquiladoras, and the Public Right to Know

365

361

337

313

295

PART IV: ALTERNATWE APPROACHES TO SUSTAINABLE DEVELOPMENT POLICY MAKING

0. Alberto Pombo

Water Use and Sanitation Practices in Peri-Urban Areas of Tijuana: A Demand-Side Perspechve

Suzanne M. Michet

Place and Water Quality Politics in the Tijuana—San Diego Region

Lina Ojeda Revah

Land Use and the Conservation of Natural Resources in the Tijuana River Basin

Lazvrence A. Herzog

Tourism Development and the Politics of the Northem Baja Califomia Landscape

List of Acronyms About the Contributors

14

13

12

10

9

8

PART III: THE POLITICS Of LAND AND WATER DEVELOPMENT

view of a changing of the guard in U.S.—Mexican relations. The theme of binational ecology and environmental management, especially in the borderlands—at best a marginal focus for most of this century—is destined to be one of the salient agenda items for Mexico and the United States in the twenty-ffrst century. Indeed, while the close of this century will be celebrated with the technological possibilities of global computer networks, cyber-communities, and the transnational economy, in the end all nations will need to 5e more vigilant than ever in finding ways to sustain and manage their cifies, their land, and their natura! environment. For the United States and Mexico, the twenty-first century will be a time to contemplate the myriad problems and opportunities posed by economic integration and free trade. Lying squarely in the path of these debates is the physical environment shared by the two nations as they interconnect across their land border. For nearly a century and a half, both nations anchored their political and economic machÏnery in regions far from their national boundaries. But the new millenmum will witness the continued emergence of the borderlands as a primary region for MexicU.S. economic expansion. The challenge wil! be to hamess the economic potential of the border region without corn promising either the quality of life for its growing population or the environmental resources for future generations. This volume, it is hoped, will provide a catalyst for the growing body of discussion and research surrounding questions of sustainable development, economic growth, and the U.S.—Mexico border envi ronment. The book is a product of the University of Ca!ifomia, San Diego’s Center for U.S.—Mexican Studies’ ongoing research and public education project on “Economic Integration and the Environment: Promoting Sustainable Development along the U.S.—Mexican Border.” The project includes new areas of academic research, community outreach, and public education components, as well as field research by interdisciplinary teams based at the Center; public po!icy forums on sustainable development issues; a series of workshops designed to foster information exchange and interdisciplinary collaboration be

11is book’s appearance at the dawn of a new century is a telling pre

Preface

L

‘The region is def ined as extending 100 kilom eters north and souffi of the border.

o border region is no excepti on.1 following the signing of the North American free Trade Agreement (NAFTA ), two commissions were created to deal with the challenge of sus tainabulity. Yet the possibility of going beyond rhetoric to operationalize this con cept appears increasingly rem ote. According to some auth ors, the difficulty sterns from the nee d for a radical shift in the soc ietal ath tudes and values of corporate decision makers (see Andrew s 1998; ?etts, Herd, and O’Heocha 1998; Beck 1995; Boehmer-C hristiansen 1995; Gabaldôn 1994; Lan der 1994). By contrast, this chapter argues that firms’ strategic environ mental behavior—in particu lar, innovative behavior to prevent polluti on—is mainly dependent on the structural features of the prevailing techno-economic regime. In other words, firms’ strategies and beh avioral change are strongly dependent 0fl both the internal (micro ) and extemal (macro) d)m amics of technical change, rather than on good environmental attitudes and values. The chapter is organiz ed in six sections. The followi ng, second, section presents a brie f overview of Mexico’s maq uitadora (in-bond assembly) industry. It is followed by a brief outline of the dynamics of

The notion of sustainable dev elopment—seemingly simple, intuitively rational, and morally correct —has spread woridwide in recent years, and the U.S.—Mexic

Introduction

CarÏos MontaÏvo Corral

Structural Determinants of Su stainabffity in the Maquiladora Industry on Mexico’s Northern Border

13

The maquiladora sector along the U.S.—Mexico border has been the subject of a multitude of studies (Gonzâlez-Aréchiga and Ramfrez 1990, among many others). The border region is an extremely dy namic export platform, registering an average annual industrial growth rate above 15 percent over the last decade (Godfnez Plascencia and Mercado Garcfa 1994). The bulk of this growth derived from the relocation of factories from the United States and Japan to several points along the border. Maquiladoras first appeared in northem Mex ico in 1965 as part of the Border Industrialization Program (BP). Firms continued relocating operations there based on a number of considera lions: (1) the region’s cheap, highly quahfied, and virtually non unionized labor force; (2) tax exemptions on inputs and revenues; (3) land subsidies; (4) low services and infrastructure costs; and (5) prox imity to the U.S. parent firm and the U.S. market (Gonzâlez-Aréchiga and Barajas 1989). Lax enforcement of environmental regulations may also have played a part in this process. In the first years of the BIP, the maqui ladora sector inciuded only 65 factories employing 3,000 workers. By 1984 there were 672 factories (Carrillo 1986); and by 199$ the total had risen to 3,833 factories and 1,003,918 jobs (INEGI 1998). The industry has divided irito the following sectors: autoparts, textiles, chemical products, electric and electronic consumer and intermediate goods, food processing, wood products and furmture, leather products, plastics, services, tools, and metal mechanics (Gonzâlez-Aréchiga and Barajas 1989). The sector’s size and diversity clearly convey the dy namism and heterogeneity of Mexico’s maquiladora industry. Het erogeneity also appears in terms of productivity levels and the so phistication of firms’ production processes. On these factors, firms range from simple, old-fashioned assembly lines to long and complex manufacturing processes; from rigid, standardized, and intensive from forms of production to flexible labor and flexible automation;

The Maquiladora Sector

technological change. The fourth section establishes what one should understand by environmental protection as regards industrial activi ties, and it discusses what may need to change in industrial activities in order to achieve enviromnental sustainability. The fifth section gives an overview of the environmental management acüvities and regulatory framework within which border maquiladoras operate, documenting that littie or nothing is being done to provide incentives for technological change in the sector. The final section offers some conciusions and reflects on the challenges that a technological regime implies.

314

Montalvo Corrat

1

Unfortate1y ven, few ffr have terna1 envfroenta1

OUpS

small local factorfes to cia and Mercado Garcfa regional PfoducUon centers 1994); and from (Gocjez nal Structure to address operations that have no inter environment Concerns house envfronmental to COmpapdes managem groupsy witj i This industry operates mainiy withir a relocation under direct shelter scheme investment has also years. The shelter scheme become CO1TLIOfl in rec is used as an intermediate strategy period when a firm knows during littie as the yet about a host couy5 reguJatjo labor, and politjcs. cnie Under this tor Provides senrices scheme a Mexjcan to the finn, inciuding Contrac the handling of permits, labor recruient licenses and facffitjes construction, installation producion process, plant of the management and import After a (sometje and export perrnj. lengthy) trial period and once foreign firma leaed the loca] Qilture have and adapted theft managemn the reona1 context, techniques to many decide to change the status of their tions to direct invesent In opera facfijtjes expand productj0, this case, the firms construct thefr o and manage most lions, and a handfJ aspects of their opera of people from the parent country overall operat-io though supe most Althougfi the maquilad plant managers are Mexican. industry offers a partial need for job creation Ïton to the in the border region, its operations, like operatjons in Southeast similar Asia (Gassert 1985: 46), entajl low value added, minimum integrahon of nationaj inputs (less than 2 virtually no techno1o percent) transfer (Carrillo 1986), regional wages. Moreover, and contraction of industriai relocatjo drives tion growth and urban rapid popula expansi0 growth with state and local goverr5 which underfunded are unable to keep abiity to provide pace in tenus of theïr public services (Ganster and Sânchez 1999). shortfall in servjc leads, The in ronrnental health probler turn, to a multjtude of human and envi These result from of hazardous and solid was Les; discharges the improper disposal of wastewater carrying chemicais, heavy metals, and nicipal sewage systems; compounds in mu pollut of underground and so on (Ganster drinking water; and Sânchez 1999; Alvarez and Castjjlo 1986; 1989, 1990; Caflo Baker 1986; Barren0 1991; Montalvo Corral 1992; 1995; Perry et al. 1990; Sânchez l990a, Méndez 1990b, 1991). Even though there is a ladora industry because rei1atory framework for Mexico’s maquj of the structure under operates, local and state which this industry authoritjes must often choose eation and environmental bereen job quality. in witli other countries Furthermore local authorities are and with other States attract investment in Mexico to a sihiation that gives any flegotiations the firms the upper hand in

Susunabj1ityjflthM

Montalvo Corral

Once a technological paradigm is fixed, it determines and condi tions the evolution of technologies in specific and selected directioflS, called technoÏogicaÏ trajectories. The dominance of a particular techno logical trajectory is determined by all kinds of evolutioflarY provements that have a self-reinforcing effect. Kemp and Soete (1992)

a pattern for the solution of selected techno-economic problems based on highly selected principles derived from the natural sciences. Therefore, it defines contextually the needs that are meant to be fulfilled, the scientific principles used for the task, the material technology to be used. A technological paradigm is both a set of exemplars—basic artifacts which are to be developed and improved and a set of heuristics—”Where do we go from here?” “On what sort of knowledge should we draw?” (Dosi 1988: 225).

At the macro level, the school of evolutionary economics has shown that technological change has its own inner logic (Nelson and Winter 1977: 56). following Dosi, at the core of any technological develop ment there is a technological paradigm,

Paradigms and Trajectories of Technical Change

It is precisely during such negotiations that stakeholders need a full understanding of what is bemg negotiated and what is and is not possible, particularly 1f they hope to anticipate what kmds of policies will be needed to ensure environmental protection and sustainability. Determining whether a maquiladora has the capability to contribute to regional sustainability can best be approached from the perspective of the dynamics of technical change and the evolution of industry. Although it is not dear that science and technology by themselves will solve pollution problems in the maquiladora sector or elsewhere (Kemp 1994), government and the private sector have begun to look to science and technology as the more politically viable sources of possible solutions. The premise is that population and consumption cannot be reduced and that the easiest and most viable solution to environmental problems lies in the development of clean technologies flarrera and Vickery 1997). Because this perspective views technology as the central tool with which to respond to this environmental chal lenge, it is important to examine how technology evolves and inter twines with the logic of industrial organization. Technology’s evolu tion can be seen from at least two perspectives: the macro perspective, which looks at the paradigms that determine the direction of techno logical progress; and the micro perspective, which explores the stages of industry development at a more concrete level.

316

is flOOfl refers to the latent scale improve Nejson and Winter (1977).

product and process, coined by

accumulated knowledge socj». ductjon capabilities, and sIdl pro infrastrucre regulatj0 lifestyles. Some exampies ancj SOj florm. and of technologicaj specific trajectorjes of paradign that optimjzation to thefr Pflrsue limits are maxinhizing automatjon of manual operations, increasing the the speed of Processing capacîty, using computers microeyectrocs in consumer products, and industrial capit so on. and Different techno1ogjc paradigrns and form a technological regime. A technologicaj trajectorjes donverge to regin-ie represents a design parameters wfuch “set of embody the economic the physical configuratjon principles that genera of products and from wfuch they are processes and matei’ja constructed» (Georghiou et al. 1986: 32). The tion of a regime has to no 5e understood here in terms of its hvo ings: as the ruling mean system and as a prevailfug system. It d0nstitutes, the one hand, the frontjer of achjevable on capabiliti es, deffued in relevant economic the dimensions, limited by other constrafuts giving physical, biologjcai and a broadly defined way of doing things (Hayamj and Ruttan, in Nelson and Winter 1982: 258). cal regime represeflts A techno]ogj a framework shared and economic actors by engineers technoiogjsts as the basis for thejr search for production processes and products (Kemp 1994) improvements in and for economic opportunities On the other hand, as the regime natural trajectorjes,3 it evolves along its becomes in itself the modus Operandi of the broader techno-.economjc system. In this sense, a mies and deffries the technological regime boundarjes for technoÏogical indicates the directions progress, and it in which progress is possible and worth doing (Nelson and Winter 1977, 1982). It is withi this notion of what is worth doing, in terms of techno.. logical feasibility and economic opportunit ies, that the concepts of paradigms, trajectories and regimes mix with the (Pot-ter 1985: 36) and the value chain system broader tecfutoeconomic structure and Pérez 1988). (Freeman According to Porter, the value chain system the creation and refers to addition of value at each stage of the transformation of raw materials into goods and services, flowing from the primary the tertiary sector. As technologie5 and to forms of compefifion market become more in the complex and expensive to develop and perform, intra- and futerflrm trade become more complex too. Such trade provides a solution for the reduction of costs and innovafion and risks in production and it increases firms’ Changes in the demand ftexibility to face drastic for their products (Tiroje 1988; Schoemberger

include among these factors the costs and Performance and production process designs and of thefr nomic context in terms integTatjo to a produ of

SustainabilityjflthM

Montatvo Corrat

‘These phases are elaborated in Utterback 1994.

At the micro level, an industry’s evolution and maturity are intrinsi cally linked to the evolution of the technologies that support its manufacture of products through its particular production processes. According to Abemathy and Utterback (1975), industrial innovation in manufactures can 5e described as cycles that begin with a frenetic generation of product and process concepts, go on to maturity, and then decline and are replaced by new concepts.4 The first (“Huid”) phase is characterized by the generation of both product and process concepts. In this phase, the rate of product rnno vaüon is intense, there are frequent and major changes in product features, and diverse and often customized designs of the same prod uct coexist. The major source of innovation is the pioneering ffrm it self, where the research and development effort and focus are con strained because of a high degree of technical uncertainty. Plant facilities are generally small, with flexible but inefficient production processes due to the use of general-purpose equipment and highly skiled labor. Hence major changes in production ilnes can be easily accommodated at low cost. This phase ends with the emergence of a product design that gains popularity in the marketpiace. The pioneer Ing firm normally reaps the benefits arising from the novelty of ils product and the timing of its entry into a new market with a small but growing number of competitors. As a consequence, competitors and new entrants in the same industrial sector must adhere to the domi nant design if they expect to gain significant market share. The second phase (“transifion”) is distinguished by diminishing product Innovation at the same time that major and frequent changes are occurring in the production process. At least one product design is sufficiently stable that it can be produced in high volume to meet rising demand. The major sources of innovation are the manufactur ers and suggesüons from product users. R&D efforts at this stage fo cus on specific product features. Plant facffities are generally of medium size; some automated subprocesses create islands of automation, allow Ing major changes in production to be accommodated at moderate cost. There are many firms struggling for market share, buL this number decreases rapidly toward the end of the transition phase.

The Evolution of Industry

1990). Hence industrial organization matures into an interdependent chain-of-value creation, making sustainability a phenomenon that would implicate not only the firm or the sector that intends to change technologically but the whole industrial supply-demand chain.

318

New Technological

Regime The perceptjon that any economic activity generae pofluhon has gaine wide accep Lance since the Industrial Revolutjon. Environ

Poflutjon Prevenfion. A

The third (“specific”) phase ïs defined by the leveing off and technical change of the OCCUrS rather product and productÎon process. slowJ, in bj1 Products are standardized provements focus only on and im Productivity and quality hinovatjon are primarily The Sources of the Suppliers of and equipmen. R&D compoflents Inacitinery efforts focus on incrementaj product and process technology changes in botJbut with an emphis technologyr Plant facilities on Process are large, efficient capital intensive, rigid, with specialpurpose and machinery and equipme automated. labor primarily that is mostiy tends and monitors the equipme fore, the cost of major There.. changes in product or process concepts desigus are very high. and Normally the number of this is a classic oligopoly competitors is low; with a stable market share. The evolutjon of an industry and its associated within a technologjcal technologjes beging paradigm of struggling to survive in an envi romuent governed by the natural Selection of the tion proceeds through the Huid and transitional marketpiace Evolu phases to emerge in the form of a dominant and rigid design in the specific phase of ma turity of produc and processes. Once a product “specific” phase, the technological paradigms underlyingreaches the nant desigus provide the direction in whic± technological the domi for products, processes trajectories and industrie5 evolve. Such paradigns and trajectories have a powerful and possibjljtjes engineers exclusionary effect. Blind to other needs and entire organjzatj creativity and efforts along concentrate their rather well defined paths (Dosi 1982). As a consequence, technological progress follows certain all kind5 of marginal trajectorjes due to evolutioflary improvements such as design cost, performance and integratjon into an existing ïc context socioeconom (Nelson and Winter 1977: 56—59; Kemp 1994). An extreme example of how reinforcing factors ing paradigms and transform prevail trajectofies into regimes is provided by the para digm of pollutjo control embodied in end-of-pipe technologjes and transformed into a regime of enviromuental regulatjo for than thirty years, the more mandatory use of end-ofpipe created and maintained technologies has an industry that provides management technologies environefltal that Supposedly are a soluti0. As illus trated in the following sechon, this “soÏutj»” actually pollutj problem, and exacerbates the worse, such ill-defined for years (Tietenberg policies may endure 1992). rate of innovation,

atnabj1ijfltheM.1

Montalvo Corrat

mental economists have put primary emphasis on detemtining the optimal level of pollution (see, for example, Coase 1960; Hahn 1989; Pearce and Tumer 1990; Opschoor and Vos 1991), and environmental debate, policy, and practice focused on limiting the release of noxious substances into water, air, and soil (Skea 1995). This perspective basi cally equates environmental protection with pollution control. Only recently has it been recognized that controlling pollution does not avoid environmental degradation. Once pollution is generated, any efforts to control it over the long term will fail. This is the case be cause pollutants mix and recombine, traveling from one physical medium to another. for example, if pollutants are released into water and are subse quently con trolted through settlement, filtration, and/or flotation, these treatments produce clean water but they also generate sludge as a by-product. The sludge is then either treated through incineration and transformed into gases that pollute the air, or it is confmed in special facilities (landfills) where it percolates through the soil and eventually enters the groundwater. 1f pollutants are released into the air and subsequently con trolled through filtration, adsorption, absorp tion, or gas washing, there is stil a by-product: the captured pollut ants that in tum need to be treated via incineration or confinement, repeating the cycle described in the case of wastewater treatrnent. This means that pollutants are always mixing with, or have the po tential to return to, the environment (ferrer 1986; Skea 1995). Furthermore, the industrial sector that produces and promotes end-of-pipe technologies is just another interdependent branch of the supply chain system. As a consequence of this interdependence, the industry is immersed in the current technological trajectories. There fore, it bas the same problems of pollution creation in its production of systems to abate pollution. Industrial wastewater treatment sys tems (WTS) provide a good example of iridustrial interdependence because they are at the center of any integral pollution control system for air or soil. A WTS is composed typically of a tank (metal or plas tic), an electro-mechanic system to pump water in and out and to administer and mix chemical reagents, and a control system for water flows, doses of chemicals, pH, and the quality of treated water at the exit from the system. The tank manufacturing is linked to the steel, plastics, and coating industries; the electro-mechanic system is linked to the metal-mechanic and electric industries; and the control of water purification is linked to the electronics industry. As the dependence of im-tovation and technical change in wastewater treatment systems 0fl their supplier industries ilustrates, end-of-pipe technologies are not able to provide a radical solution to the problem they intend to solve. Instead, they only extend the chain of problems.

320

1

3at

,

broad soetaI interes as opposed to e short-term interes of e firm.

The previous discussion served to organize and anticipate the techno-. logical and social challenges of enviromuental ence to be drawn is that protection. The infer protectjon of the environjuent depends on advocag for necessarily a new technologjcal regime. To make the shift to a new regimea necessary but not sufficient change the basic principles condjtionis to that fon the core of the current technotogical regime. It will require reducing today’s institutional the promotion of a set rigidities through of core competencies comprising collective long-term values embraced by skilis, and new technological corporate boards,5 new knowledge and and managerial systems at the firm level (LeonardBarton 1995). This new set of competencies new knowledge base. represents a The current technological regime can be defined as set of featzres and bounded by a economic principles that are embodjed in the design and development of any product or process (Georghiou et al. 1986). This regime places the emphasjs on product life and its main features cycle management and economic principles are as folÏows:

A Regime for Sustainable Industrial Developmen t

This fact has found recent acceptance at the federaj with the enactment in Policy several Colmtries of initiatives Calling level applicatjon of a precautiona for the principle regarding example, van den Berg, Dutjffi, and Huppes 1995; Pollution (see, for the envfronmental debate, some policjes and a SETAC 1993) Now vent reduced of practices are putting fractio emphasjs on the need to change from nologies that control tech P11ution at the end of the Pfoduction proces to technologie5 that prevent the generatjon of potential very moment of product and production process poltutants from the sign (Krut and Gleckjnan conception and de 1998; Gouldson and Murphy 1998). Thus enviroentaj protection is now equated tion of polÏu generatjo with the preven The prevention practices is “clean concept that enfolds such polluti flologies.” Clean technologies [though stijl to be developedj tech can be seen as a set of cal paradigms involving new technologi a new set of needs to fulfili, new Scientifjc principles to use, and new of COnsumable goods and materjal technologie5 to produce all kinds services (Dosi 1982). Some the current regime and of the features of those that are likely to form the new techno logical regime that may facilïtate the transitjon to pear in the following sustainability ap section.

ai1zabïliintheMaqui1dj

By the very nature of their design, product concepts and produc tion processes entail natural resources in a dynamic of short-term exploitation. Products are conceptualized and marketed as disposable con sumable goods. The supply chain of any producüon system progresses across and along different industrial sectors. It encompasses the extraction of raw materials, material transformation into inputs for the manu facturing of intermediate and final goods, consumption and use, and final disposifion. The supply chain is an open ioop regarding natural resources 5ecause all the work accumulated during material exfraction and the transformation into manufactured consumable goods is dis posed of in the environment at the end of the product’s life. Each link in the supply chain is govemed by a value-added strat egy. That is, along the supply chain, raw materials pass through a sequence of transformations, each of which adds value by crys tallizing labor and technology into goods or services. Industrial firms’ performance is measured in terms of their short term profitability. Residuals are managed at the end of the pipe to control pollutants discharged into water or emitted into the atmosphere. Therefore, industrial activities and consumption are associated with a re gime of high entropy. As a consequence, economic and environmental rationalities are incompatible.

Montatvo Corral

•

•

•

By the very nature of their design, product concepts and produc tion processes entail natural resources in a dynamic of long-term management. Products are conceptualized in terms of the services they provide and therefore are marketed as services. The device providing the service is designed to be reabsorbed into the production system. This chain encompasses all the stages of the current regime but closes the loop of resource management. The product is reintro

This product life cycle management paradigm has been dominant since the Industrial Revolution. To achieve a clean technology system, several authors argue, there must be a shift toward a new technologi cal regime that puts the emphasis on services (see, for example, Rodgers 1997; Linnanen, Boström, and Miettinen 1995; Van Weenen 1995). Some of the features of this new regime, which emphasizes the management of products as services, are likely to be the following:

•

•

•

•

•

•

•

•

322

of envfropenl heajth.

The first law refe to the possib of creating or desog only be fransformed The Uer, wlch can second refers to the fact that every anthropogjc produces either energy or work matter residuals. These laws have many implicat ons_jn partjcr for product and process development and, in general, for the whole eco nomic system. For an ample discussjon see GeorgescRoeg 1971. 7The costs my inciude increasing deteriorao

The service life cycle management paradigm does not yet have the scientific and technological base needed for its implementatjon cording to Kemp (1994), some Ac of the following conditions must 5e present in order for a technological regime change to occur: (1) scientific insights that open new new l and economic technologica tunities; (2) pressing technological oppor needs that are impossible to within available technological satisfy paradigms (these needs may arise from the demand side or from undesired externalitjes of technological de velopment, such as increasing (3) exhausted technologicaj degradation of environenta1 health); trajectories whose pursujt leads creasing marginal costs;7 (4) to in newly established firms or wîth a different knowledge industrie5 base diversifying into a new market; and

duced into the supply chain at the stages of traILsfoI.rlatjo of re sources and manufacturing Designs enable both easy bling for recyclabiity and easy reinsertjon into the firm’sdisassem. innovation cycles. The reuse of Product materjais and inputs enables value recovery cycles that can be integrated into the value..added strat_ egy, hence increasing the fïrm’s overall profitabjjjty This itflplies that the firm needs to have innovative capability to develop evo lutionary architectures for its product concepts. • The supply chain is a closed loop regarding natural resources be cause all the work accumulated during materjal extraction the transformatjon into and manufactured conswnable goods is rein troduced into the production and innovation cycles at the end the product’s life. of • The industrjal activit-ies at each link of the supply chain are gov emed by strategies for innovafion and value recovery cycles. represents a leap in corporate This strategies from value added value cycles. to • The performance of industrial firms is profitability and their environnentay measured in terms of thefr performance • The management of residuais ideally is eliminated because uct and process concept prod development incorporates the natural laws of matter and energy into the designs themselves’ Thus pollutio is pfevented rather than Controfied • As a consequence, economic and enviropjnefltal rationaijties are compatjble

Montatvo Corral

Preceding sections offered some insights into the relationship between the maquiladora industry and the degradation of the border environ ment and into the dynamics of technological change within which this industry operates. This section explains why enforcement remains inef fectual despite the presence of environmental laws and regulations at the local, state, and federal levels. It also contends that policies devel oped to promote regional sustainability fail to address the shift that must occur in firms’ technological strategy in order to transit toward sustainability. Mexico’s first modem General Law of Environmental Equilibrium and Protection (LGEEPA) was passed in 1971 (Diario Oficiat 1971) and revised in 1982, 1983, and 1988. The 1988 version is the most stringent and comprehensive, yet significant loopholes remain because the law contains a very limited number of standards to cover a wide range of economic activities. To overcome this deficiency, four additional regu lahons have been implemented since 198$ that address air quality in general, air quality in Mexico City, environmental impact assessment, and hazardous wastes. To implement these four regulations, the federal government, under pressure from political and environmental groups, pledged to promote clean economic growth by training the necessary personnel and promoting industrial technologies that do not harm the environment (SECOFI 1990). Before 1991, protecting the environment was the responsibility of the federal government. Under the Mexican Environmental Project (SEDESOL 1990), the federal government, assisted by the World Bank, initiated pilot programs in various states to decentralize envi ronmental management. Under the Mexican Environmental Project and the General Law, local and state authorities are now responsible for regulating emissions and wastewater discharges into sewage sys tems of local authorities (with the exception of hazardous wastes and discharges into federal waters). In conjunction with the Ministry of Commerce and Industrial Development (SECOfI), federal environ

Regulatory Framework and Enviwnmental Management

(5) entrepreneurial propensity to accept the risks of undertaking in novative activities whose outcomes are highly uncertain. It is not dear to what extent this shift in the understanding of envi ronmental protection and its interaction with technological regimes is gaining recognition at the regional policy-making level. The envïron mental policies and regulatory framework discussed in the following section strongly suggest that these notions are not being incorporated into the operationalization of environmental sustainabiity in the U.S.—Mexico border region.

324

b

325

Concerns about the border envfroent reached the political agenda in 1983 when Mexico and the United States signed the “La Paz Agreernent” and established a framework for binational cooperafion to address issues of common concern in the border region. The main objective of the La Paz Agreement was to “implement the necessary steps to prevent and control the pollution in the border region.” The agreement set up binational working groups on air, contingency planning, cooperative enforcement pollutjon prevention, and water. These working groups produced the first regulafion goveming the transfron(jer transportatjon of hazardous wastes in 1986 (Barreno 1991). Mexico’s Ministry of Social Development (SEDESOL) and the U.S. Environ Protechon Agency (EPA) developed the Jute grated Border Environment Plan, 1992—94 (TBEP), which defined four more specific goals: (1) to enforce current law and regulatjons; (2) to reduce pollution through new resources and initiativeS; (3) to increase cooperation in the areas of Planning, training, and envjronmental education; and (4) to widen the knowledge about environenta1 is sues in the border region. The authorities regarded this new program as the beginning of an initiative to accomplish their environental goals during the next decade (SEDUE—U.S. FPA 1992: 8, 101). In 1993, responding to strong criticism of the NAFTA’5 potentially deleterfous impacts 0fl the enviromnent, the governnents of Canada, Mexico, and the United States signed the North American Agreement on Envjronn-jen1 Cooperat-jon This side accord to the main NAFTA text created the Commission for and assigned it five key tasks: to Environental Cooperation (CEC) promote sustainable development in North America; to preserve, protect, and improve the envjropent. to support the enviromrentaJ objechves of the NAFTA; to avoid distor tions in trade; and to promote the effective enforcement of envjron mental law (Diarjo Oficial, December 8, 1993). The environmental side agreementto the NAFTA also gave rise to the bilateral (Mexico-_U.S.) Border Environjuent Cooperation Corn mission (BECC) and the North American Development Bank (NADBanJ) These two institutjons aim to address the border region’s most urgent environmental problems by providing technical assis tance and funding to border communities, giving priority to infra structure for drind