Pesticide use is growing steadily in many developing
countries, particularly in South East Asia and Latin America, while it is
relatively stable in industrialised countries. The market size in some countries
in the South is comparable to those in Western Europe: Brazil is the fourth
largest market globally, and India is among the top ten. Looking at potential
markets, a chemical company executive recently remarked that ‘In Japan, the
average use of pesticides per hectare is 10 kg. In India, it is 450 gm.
Considering that India is mainly an agricultural economy, the industry has ample
scope to grow.(1)’ This scope is attracting investment in pesticide production
from both local companies, and from the big agrochemical corporations.
The health and environmental problems created by pesticide
use in developing countries have caused concern. The international response to
these problems has largely focused on trade-related measures, such as the
voluntary Prior Informed Consent procedure (under the International Code of
Conduct on the Distribution and Use of Pesticides adopted by the FAO in 1985)
—which allows governments to prohibit import of a number of named chemicals:
the Basel Convention on transboundary movement of hazardous waste; the newly
formed lnter-governmental Forum on Chemical Safety; and the newly agreed Code of
Ethics.
With the liberalisation of agricultural
trade under the GATT agreement of December 1993, agricultural production in the
South may expand. Without an enormous increase in investment in alternatives
(such as IPM), chemical pesticide inputs may increase, It is important to
consider whether:
increased agricultural production in the South will attract
more agrochemical production close to these markets;
the products will remain older, cheaper, and more broad
spectrum.
whether the trade controls on certain hazardous pesticides will lead to more production in the South of pesticides which are a potential target for trade controls.
From an economic point of view, production near source may be desirable to reduce the cost of imports and develop national expertise in technological advances, but this begs two questions
ln
transferring technology, should the focus be on transferring pesticide
production, or on developing alternatives to hazardous products and their
production?
Can
production be to the highest safety standards and ensure not only that a
leak on the scale of Bhopal never occurs again, but also that smaller leaks
which affect the workforce and surrounding community and environment are
prevented?
Transnational companies
The major agrochemical companies appear to be
increasing pesticide production in the South particularly in Asia. In general,
corporations construct only a small number of plants to synthesise each active
ingredient: for example Dow’s chlorpyrifos is sourced globally from two plants
(US and UK): Zeneca’s paraquat is sourced from five (UK, US, Japan, Brazil,
India). Many more plants carry out formulation, as well as some intermediate
production steps. It is difficult to confirm whether a plant is used for
synthesis or formulation. In Asia, where most activity seems to he centred,
there appears to be inward investment particularly in India, China, Taiwan,
Malaysia and Thailand.
In Latin America companies are looking
at Argentina, Brazil, Colombia, and Mexico. Eastern Europe is a growing area for
investors, although it has not met early expectations of an expansion in
agrochemical inputs(2). Tile market in Sub-Saharan Africa is too small and too
poor to attract investment in production. The exception is Tanzania, which,
using Italian aid, contracted the Italian company Technimont, a subsidiary of
Montedison, to build a plant in Moshi. Objections by local residents and an
environmental group have managed to stop production at present: the plant is
likely to formulate rather than produce pesticides. Nevertheless, it is
difficult to see how the Moshi plant is justified: it is located in a built up
area, and is hundreds of miles inland from Tanzania’s ports, over rough
roads(3,4).
Table I indicates known
production facilities in the South of the major agrochemical corporations which
have recently been commissioned or expanded. With some exception, eg the
sulfonylurea group, these are predominantly older products. Many are
organophosphates, which are particularly hazardous to health. Some of the plants
are making active ingredients of which products are banned or severely
restricted (parathion methyl, cyhexatin), or which have been shown to cause
problems under conditions of use in the South (monocrotophos, phosphamidon,
paraquat). Market size is a key factor in placement of production facilities.
The Brazilian market is around US$900m, India US$740m, China US$495m, Argentina
US$336m, Mexico US$270m. Other factors are profit, potential to expand sales and
potential for other export markets.
Looking at areas of potential expansion, China is attracting
increasing investment. National use was estimated at 230,000 tonnes in 1993 and
rising(5). Transnational investment tends to be through joint ventures, or
licensing agreements. Nevertheless there is still more formulation than
production, for example, a Ciba Geigy plant near Shanghai, due to begin
operations in 1996, is a formulation plant for insecticides, fungicides and
herbicides currently exported to China by Ciba. There is strong interest from
the German companies BASF, Bayer and AgrEvo (merger of Hoechst, Schering and
Roussel Uclaf) producing mainly for the Chinese market, but it is likely they
will later look to export to other Asian markets. These include metolachlor,
methidathion, propiconazole and metalaxyl(6). Du Pont and Zeneca are both
establishing facilities.
India is another target for expansion
because foreign investment is now encouraged. The biggest foreign pesticide
producer is Bayer. Other significant producers have been ICI India (not yet
Zeneca) producing paraquat and cypermethrin, Shell (bought by American Cyanamid)
and Ciba Geigy. Japanese companies are actively looking to invest in lndia.
Dutch companies Atochem and Pennwalt Holland are seeking partners, as are
Makhteshim-Agan of Israel, and US companies Velsicob, Dow and Du Pont(7). As table
I shows, recent expansion of production of some more hazardous pesticides in
India includes:
AgrEvo (Hoechst) is expanding its manufacturing capacity of
the OP anilophos to 300 tonnes a year and will source its world wide
requirements from this plant, exporting mainly to rice—growing countries
of the Asia Pacific region(8).
Bayer opened a new plant in 1991 to formulate and package
up to 24.000 tonnes of Folidol Dust (methyl parathion) a year. The active
ingredient is produced at Bayers main plant in Thane(9).
Cyanamid India plans to expand phorate technical
production, it already produces pendimethalin and mephosfolan for
export(10).
DowElanco exports technical active ingredients to several lndian formulation companies but had no visible presence before setting up a 50:50 joint venture with NOCIL in 1993(11). NOCIL, located in Lote, south of Bombay was previously 20% owned by Shell, and produces four major agrochemicals: monocrotophos 1127 tonnes; cypermethrin 103 tonnes; phosphamidon 415 tonnes; dichlorvos 169 tonnes(12).
Taiwain is already established as a large producer.
Although there has been concern about the quality of production and marketing
from Taiwanese companies, it is worth noting that Western corporations (members
of GIFAP) are major exporters of technical grade products to Taiwan, for local
formulation. Recently, Ciba Geigy signed a framework agreement with Taiwan’s
Ministry of Economic Affairs and is evaluating business opportunities, having
pledged investment and technology transfer(13). Herbicide production in Malaysia
has increased recently.
Increasing production of generics
As the cost of research and development has soared,
and the patents have expired on many active ingredients, there has been a rapid
growth in companies producing actives no longer protected by a trade mark
(generics). To users, the advantage of generics is their low price and sales
have grown to account for 12-15% of the world pesticide market(14). Detailed
information on companies and their activities is hampered by lack of
publicly—available data. Jed Greer of Greenpeace has found an apparent growth
in small generic manufacturers making older pesticides, including many
organophosphates. According to an Agrow report on 64 generic manufacturers, a
major proportion probably began production in the last 5-10 years(16).
Whilst the Agrow report presents an incomplete picture, it
indicates a proliferation of production in Asia — mainly China and India —
where 42% of the companies profiled were based, compared to 35% in Western
Europe, 12.5% in Eastern Europe and 8% in the US. Three of the top ten generic
companies are in India. Most of the generic manufacturers are small companies.
The exceptions are Makhteshim-Agan of Israel and Sostra of Italy, which are
among the top 25 agrochemical manufacturers — though small compared to the top
12. Many generic companies are dependent on other chemical companies, including
the primary producer, to supply key intermediates.
India — a major producer, user and exporter
India is an increasingly significant manufacturer of
pesticides, with both Indian and foreign companies producing about 70,000 tonnes
of technical grade pesticides (1992- 93). There are 125 plants manufacturing
technical grade pesticides and some 500 plants are involved in formulation. Table
2 sets out known producers.
Past laws have favoured local
production by insisting that pesticides sold in India must be made there, and
government policy now encourages pesticide export. Producers have been quick to
respond: between March and December 1992, exports totalled US$52.7 million, a
rise of 45% on the same period of the previous year, which was in itself an
increase. Exports include products restricted elsewhere, for example DDT, BHC,
lindane (exports up three-fold in the two years ending 1991-92), aluminium
phosphide and endosulfan. However others are active ingredients in widespread
use in Europe and North America, and indeed some Indian companies are seeking to
export to these markets. Nearly 75% of exports went to countries outside the
rupee area, to Europe, USA, Japan, South America, South East Asia and
Africa(17). The big Indian producers and exporters include:
Hindustan Insecticides: State-owned, manufactures and
exports DDT, opened a dicofol plant in 1993 and plans to produce carboxin
and phosphamidon. Exports recently increased 500% to US$1.4 million in
1992-93. The main markets are the US, Mexico, Argentina, Australia and
Europe(18).
Gharda Chemicals, Lote, Maharashtra: manufactures anilophos, isoproturon, cypermethrin, chlorothalonil, carbendazim, chlorpyrifos, pendimethalin and metolachlor. Gharda is thought to have 25% of the European market for isoproturon, and other products are exported to Europe, the Far East, Central and South America. Although Gharda fosters a reputation for innovative technology and clean production a recent accident in its new chlorpyrifos production plant left three dead and 25 injured (see page 11)(19).
United Phosphorus, Bombay: establishing a joint venture in
Bangladesh to produce synthetic pyrethroids and organophosphates and has plans
to manufacture in Mexico, Indonesia and Vietnam(20). The company recently bought
the UK company, MTM Agriculture, which is particularly strong in the herbicides
and insecticides phorate, terbufos and demeton-S-methyl. Himco Pesticides of
Bombay sells chlorpyrifos in Europe, exported through United Phosphorus.
Other big Indian companies include: Excel Industries, the
leading manufacturer of technical grade active ingredients, with expanding
production; Gujarat Insecticides;
Cause
for concern?
With increasing pesticide production, and the tenth
anniversary of the Bhopal disaster serving as a warning against complacency, it
is timely to assess progress on safe production in both transnational and
national producers.
The main factor encouraging production
in the South is the growing market, but tighter regulation on trade in hazardous
pesticides may also be a factor. An additional calculation is the extent of
environmental safeguards companies are required to build into their plants.
Germany has some of the toughest environmental regulations in the world, which
reportedly cost the industry DM 6 billion (USS3.79 billion) a year, and the
German chemical companies recently campaigned to persuade Bonn to reduce
these(21). Nevertheless, plants registered by European Chemical News as under
construction over the last two years indicate most are still sited in Western
Europe (7) and North America (6), compared to Eastern Europe (3), Latin America
(3), three in Turkey and the middle and near east (3), Asia (3), and Africa
(1)[22].
The Bhopal gas leak led to a
re—examination by industry of hazardous production facilities. Many
transnational companies in the chemical industry have adopted voluntary
standards covering health and environmental inflict of both production and
products. The major pesticide companies have adopted product stewardship
policies, chemical companies have adopted responsible care programmes and many
companies
Serious accidents have continued. A
study by the OECD noted that in the post World War II period until 1980, a major
industrial accident occurred only once every five years or so. Since 1980, the
incidence has risen to two major accidents per year(23). While no incidents
fortunately match the scale of Bhopal, their impact is serious.
In
I986 a fire at the Sandoz plant at Basel, Switzerland, caused pesticides and
mercury to spill into the Rhine, killing river life and contaminated water
supplies.
Serious
incidents in Mexico include a fire at a pesticide formulation and storage
plant.
In
1994, the public prosecutor in Brazil is seeking compensation from the local
subsidiary of Rhône—Poulenc for dumping toxic waste between 1966 and 1988
(see page 11).
In
the UK, there have been deaths and/or serious fires at AH Marks in 1991 and
Allied Colloids, both in Bradford.
In
1993 the German company Hoechst had a poor record at its main Griesheim
(Frankfurt Germany) plant, which makes a number of chemical commodities,
including pesticides. In February 10 tonnes of toxic chemicals were released
as a result of a blending error — 32 people sought medical attention. In
March, an explosion killed one worker and seriously injured another. A leak
in April. led to the release of 50 kg of paint and plastics pigments.
A production leak in Monsanto’s US plant making a key raw material for glyphosate proved very costly to the company and affected earnings in 1993.
Greater
strides have been made in the US than elsewhere in impelling corporations to
release information to the community(24), and continued pressure is essential to
take this process further, and to establish more openness elsewhere. Without
pressure, companies are unlikely to respond. Companies also seek to limit their
liability, and while they planned improvements following the Bhopal disaster,
they also learnt to make legal provision to protect their interests. For
example. a DuPont nylon plant in Goa, India, drew up an agreement with its
subsidiary, Thapar DuPont Ltd (TDL), which distances the parent company from
obligations, stating that TDL will not hold DuPont responsible for claims in
India ‘‘alleging bodily harm or death’’ and that DuPont “shall not he
liable under any circumstances whatever to any third parties including members
of the public on any account whatsoever due to any accident at the plant
site...”(25).
There is no indication that the major
companies are transferring production of organochlorines, widely banned for
their environmental persistence, to the South. Many seem to have pulled out of
production of these products. There are exceptions: Hoechst has taken strong
defensive action on endosulfan, and the US company Velsicol still makes
chlordane and heptachlor for export. National companies appear to be the main
producers of those widely—banned organochlorines which are still in use, such
as DDT (India, China), toxaphene (Nicaragua). There is, however, production and
widespread use in the South of organophosphates which are known to cause health
or environmental problems (e.g. methyl parathion, monocrotophos, phosphamidon).
With the statistics in the North, the
major companies have also mounted strong defence of older products with costs
for this rising from US$263m to US$482m between 1987 and 1992(26). This
contrasts with the image corporations wish to promote of developing the products
of the future: “Feeding the world’s population will mean enhancing
agricultural productivity with even more efficient, environmentally friendly
crop—protection products(27)”.
Without more public scrutiny and
accountability of production sites, it is impossible to know whether companies
are as good as their word. With the proliferation of pesticide production by
national companies in countries where even minimal right—to—know standards
have not been achieved, the standards must give rise to concern. Communities and
workers are not only concerned with major accident hazards, as smaller, more
routine accidents expose them and others, as well as wildlife, air, soil and
water to toxic chemicals(28).
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Bhopal chemical plant - India |
Conclusion
As the market for agrochemicals has levelled off in
industrialised countries, companies are seeking to increase sales elsewhere,
particularly Latin America and Asia. Production is expanding to profit from
these growing markets particularly in Asia. New production includes older
products, some of which have been banned or severely restricted. Some developing
countries have established pesticide industries, and while these have a small
market share, they include pesticides which are banned or severely restricted
elsewhere. Production in the South is still small, but is still expanding in
both national and transnational enterprises and raises a number of concerns:
Can production be to the highest safety standards?
Standards must be uniform, and should be monitored and enforced. They must
aim to prevent not only major accidents. but also smaller leaks which affect
the workforce, the community and the environment.
In transferring technology, the focus must he on developing
alternatives to hazardous products and their production, and not on
pesticide production alone.
Regulations governing trade in hazardous pesticides are the
primary technique for preventing pesticides hazards. They are clearly
inadequate in the face of both the burgeoning production in the South, and
the expanding of trade following the completion of the GATT Uruguay round.
This article is based on a new report by The Pesticides
Trust [now PAN UK]—The Pesticides Trail: a focus of the impact of trade controls on
reducing pesticide hazards in developing countries. The report includes studies
by the Pesticide Action Network in Indonesia, Philippines, Mexico, Paraguay and
Senegal. £25 or £10 to non-profit groups. Available January 1995.