THE CHAMBER NEWS - PRESS RELEASES

State Governor Seeks U.S. Firms' Help On Water Pollution, Other Problems

LEON, Mexico--The central Mexican state of Guanajuato has environmental problems that it is prepared to tackle, but it needs financial and other help to mount the most effective effort, the governor of the state said July 23.

Governor Vicente Fox, of the state of Guanajuato, told a trade delegation of government and business representatives from the U.S. state of Virginia that Guanajuato has problems with water pollution, air quality, and forestry management and needs help to address them.

The July 21-24 trade mission was organized by the Washington, D.C.-based U.S.-Mexico Chamber of Commerce (USMCOC), a business group; the Annandale, Virginia-based Global Environment and Technology Foundation (GETF), a nonprofit group that seeks to promote the use of environmentally sustainable technology and practices; and the Leon-based Trade Commission of Guanajuato (COFOCE).

The delegation included representatives from the Virginia government, the banking community, and environmental services operations located in Virginia.

Federal, State Problems
Fox, a former businessman who has been Guanajuato's governor since 1995 and is a candidate under the right-center National Action Party's (PAN) banner for Mexico's president, told the delegation that many environmental plans for Mexico, in general, have had to be delayed because of the country's weak economy, past problems with its national currency, and its inconsistent growth. "We do have plans; we know what has to be done," he said.

For Guanajuato in particular, he said, "We have our own problems in relationship to the environment," especially in the areas of water pollution and management.

More than 14,000 companies, employing more than 155,000 people, operate in Guanajuato state. Companies are divided into nine sectors, with the most important being textiles, especially leather goods, agro-industry, and food production. The tannery industry comprises 600-800 companies of all sizes, 98 percent of which are located in Leon. The industry produces 4.55 million skins annually, of which 90 percent are for the shoe and leather goods industries.

The large-scale production of leather goods and textile manufacturing has led to urban and industrial pollution in the region's rivers and dams and the spread of aquatic weeds.

Fox said that in the past, 85 percent of the water available in Guanajuato had been consumed by the agriculture industry, and 15 percent had gone to potable drinking water or to industry needs, especially for tanning. "We have had to work very hard in [controlling] consumption of the volume of water we have in our aquifers," he said. "We have had to pull together a very aggressive program in relation to water and agriculture."

Urgent Need to Cut Agriculture's Water Use
Today, Fox said, about 125,000 hectares of agricultural land have some sort of irrigation system. "We have been able to save 45 percent of the water we were consuming there. But we still have a long way to go. We have 350,000 hectares that are being irrigated with water extracted from our aquifers. We have over 20,000 wells extracting water throughout the year, and our aquifers are going down by [between] 3 to 5 meters every year. It's extremely urgent that we stop that from happening."

Fox said that Guanajuato officials have visited many operations and areas of the United States to learn ways to control water use and depletion of its aquifers. "We have plans to meet the challenge of the 350,000 hectares by the end of year 2000," he said. "But this is more than a technical problem; it is also a financial problem."

With enough money, Guanajuato could address its problems here, but interest rates in Mexico are currently 25 percent to 35 percent. "The cost of money is key in solving this problem," Fox told the trade mission.

Pollution from Leather Industry
Another major concern is the pollution from the leather and shoe industry, especially the problem of chemicals used by the industry that are ending up in the country's waters, he said. "We have an aggressive program there to solve the contamination, which includes relocating much of the industry to an industrial park equipped with state-of-the-art pollution controls or requiring facilities to install their own equipment." The alternative is closure of tanning operation.

Once completed, the Industrial and Ecological Park of Leon, known by the acronym PIEL, will be "the most modern, most technological, most ecological park in Latin America," the governor said. But most of the tanning industry is reluctant to move there because of the high costs associated with such a step.

The park will be able to hold a combination of more than 200 small, mid-sized, and large industrial operations, and so far four tanning operations have agreed to move there, according to Ivan Silva Arroyo, director general of the park, who briefed the trade mission July 23 on the facility. The government hopes that 20 more will have agreed to move there by the end of the year. Tannery and other industrial operations throughout Mexico face a March 2000 deadline for complying with the country's Law on the Ecologic Equilibrium and Protection of the Environment and its regulations and standards (INER Reference File 5, 274:0301).

"We are ready to receive the industry that should be moved from the city out to that industrial park," said Fox, adding that the park will have waste water treatment and sewage treatment. "While we will be able to solve and eliminate the [pollution] problem, again what we have there is an economic, a financial problem. Industry is more than willing to move, but they still are trying to figure out how they can finance their move plans."

While part of their costs will be paid for from the sale of the plots of land they currently occupy--the price of land is rising dramatically in the city--"it's still a financial question" of how to cover the rest of their costs, Fox said. "Everything is ready, so maybe out of this visit, maybe out of some conversations, we will be able to come up with some good solutions to this problem."

Water Treatment for Households
The government also wants to increase dramatically the water treatment capacity for households. "We are wasting water in our cities," he said. "Today we are at the level of 10 percent [of the population being served by state-of-the-art water treatment], and I'm not ashamed to say that this is the case in all of Mexico. We must start building water treatment plants all over the country. We must start doing it here. We have already under construction plants that would take us to treating 50 percent of the water by the end of this year or maybe the first quarter of next year."

But, he added, "we have to move to try to reach 100 percent of all of the water that is being used in the state. Again financing and good technical know-how--those are the areas where we need help." Fox also acknowledged that the cost of water paid by consumers is so low until it encourages waste. What this means, he said, is that the government also faces the task of preparing consumers for the 100 percent increase in user fees for water they will likely see as technology is enhanced, "a cost for which consumers will be unprepared" to handle.

Fox also told the delegation that the government is concerned about air pollution problems associated with oil refining in the industrialized city of Salamanca. "We are already controlling or at least monitoring the situation" at the refinery, he said. "We have invested in that respect, and now we have to start taking the measures that are needed for controlling the problem."

He added, "Other cities [of the state of Guanajuato] are also growing fast, and we need to take preventive measures so that we don't go any further without [first] controlling the air here in Guanajuato."

Forestry Problems
Finally, Fox cited problems associated with the country's and state's forests. "Mexico is losing 600,000 hectares every year. Our loss of forestry is an emergency. We will be calling for a national emergency program on this issue because it is getting ... worse every day that goes by. There are many programs for planting trees throughout the country, but the technique being used is very old and lacking. For every 10 trees we're planting, only two are surviving."

Officials from Guanajuato have visited countries such as Portugal, Spain, Uruguay, Canada, and others to study their forestation practices, "but we don't yet have the answer to that problem," Fox said. "We have to work on that one, too." -- Marlon B. Allen, Bureau of National Affairs.