A Health Impact Assessment Framework for Special Economic Zones in the Greater Mekong Subregion

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• Publisher: Asian Development Bank
• Year: 2018
• Print ISBN:
  9789292611446
• eBook ISBN:
  9789292611453
• Topic: Economics
• Subtopic: Labour Economics
• Index: Economics

Across the Greater Mekong Subregion (GMS), there are over 500 special economic zones (SEZs) and industrial zones located near GMS economic corridors and covering over 50 million people. This proposed health impact assessment (HIA) framework recognizes these SEZs and economic corridors as economic engines of the subregion and aims to maximize benefits for all. The framework aims to provide enhanced guidance for identifying, mitigating, and managing health risks and impacts of unprecedented industrial and economic development in these SEZs, and seeks to address transboundary health issues associated with mobile and migrant worker populations. It proposes HIA as an effective SEZ management support tool to achieve optimum benefits for businesses and associated communities alike.

1

Introduction

Across the Greater Mekong Subregion (GMS),¹ there are over 500 special economic zones (SEZs) and industrial zones. Many of these zones have been strategically located along or near the established GMS economic corridors (Figure 1). The estimated population associated with SEZ development and border areas of economic corridors is over 50 million people.

Figure 1. Special Economic Zones, Industrial Zones, and Economic Corridors within the Greater Mekong Subregion

Source: Asian Development Bank. 2018. Review of Configuration of the Greater Mekong Subregion Economic Corridors. Manila. DOI: http://dx.doi.org/10.22617/TCS179180.

The overarching objective of this health impact assessment (HIA) framework for SEZs in the GMS is to provide enhanced guidance for identifying, mitigating, and managing health risks and impacts related to unprecedented industrial and economic development. This framework supports and promotes in-country HIA processes and seeks to address transboundary health issues associated with mobile and migrant worker populations in SEZs and economic corridors. In doing so, it recognizes SEZs and economic corridors as the economic engines of the subregion and aims to maximize the benefits for all.

1.1 Special Economic Zones in the Greater Mekong Subregion

The development of SEZs and economic corridors has been a priority for GMS countries as they look toward a long-term vision of growth, prosperity, and acceleration of regional development. The focus is on enhancing economic opportunities, trade, infrastructure, and business development, while improving regional linkages to major markets within and beyond the GMS.² An overarching goal of SEZ development is to optimize development opportunities and benefits for regions outside of capital centers such as Ha Noi, Viet Nam; and Bangkok, Thailand.³

While the term SEZ is often used interchangeably with free trade zones, export processing zones, industrial zones, economic and technology development zones, high-tech zones, science and innovation parks, free ports, enterprise zones, and others, there are unique features of SEZs compared to other economic zones. In fact, SEZs can vary quite considerably across the GMS, especially in terms of organization and management.

For instance, SEZs can represent geographically defined areas containing a number of businesses within a physically secured and gated area, separate from the general population (such as Phnom Penh SEZ, Cambodia). SEZs can also represent entire districts whereby individual projects will vary in terms of type and the presence of buffer zones (such as Nghi Son SEZ, Viet Nam). SEZs can also represent a combination of the two aforementioned arrangements (such as the Savan-Seno SEZ, in the Lao People’s Democratic Republic).

In terms of management, SEZs can also vary. In some cases, SEZs are owned, operated, and managed entirely by a private investor (or investor group). In other cases, projects within the SEZ can be individually owned and operated by private investors; however, the management of the zone itself is the responsibility of a government agency (normally an SEZ authority). It is also possible for the zone to be owned, operated, and managed by a joint venture between government authorities and the private sector.

Regardless of the organizational and management attributes of SEZs, they all offer benefits for investors. SEZs tend to have separate customs areas (duty-free benefits) and streamlined procedures for business start-ups (to reduce the “red tape”). Businesses within SEZs can have the opportunity to operate under more relaxed laws.⁴

1.2 Health Impact assessment in the Greater Mekong Subregion

An HIA is a systematic approach to assessing the health impacts and risks (both positive and negative) associated with an event, project, or policy that uses qualitative, quantitative, and participatory methods.⁵ An HIA accomplished to international standards assesses environmental, social, and culturally appropriate determinants of health; provides recommendations for subsequent management of health risks and impacts; and outlines appropriate surveillance and response mechanisms.⁶ HIAs are strongly supported by a variety of industry associations and sectors.⁷

The HIA, like SEZ development, has become a priority for GMS countries. The Lao People’s Democratic Republic (Lao PDR), Thailand, and Viet Nam have embedded HIA policies within their legislation.⁸ Cambodia and Myanmar have initiatives focused on strengthening health components within the environmental impact assessment (EIA) process. The Asian Development Bank (ADB) has been supporting these countries to provide HIA tools and guidance; enhance HIA capacity building; support new and existing partnerships and networks for HIA; and undertake HIA demonstration projects.⁹ This current HIA framework for SEZ development is part of ADB’s HIA support for GMS countries. The framework does not seek to inform a decision on whether SEZ development should or should not occur. Rather, it should be viewed as an SEZ management support tool with the aim of achieving optimum benefits for businesses and associated communities alike. Also, while the framework has been developed for SEZs, the HIA approach is relevant for all industrial estates or zone settings.

2

Country Policy, Legal, and administrative Frameworks

This section provides an outline of GMS country-specific policy, legal, and administrative frameworks associated with both SEZ development and HIA.

2.1 Cambodia

2.1.1 Special Economic Zone Development in Cambodia

On 29 December 2005, the Government of Cambodia established a subdecree outlining the legal framework for SEZ development (footnote 3). Article 2 of the subdecree defines SEZs as:¹⁰

Special area[s] for the development of the economic sectors which brings together all industrial and other related activities and may include General Industrial Zones and/or Export Processing Zones. Each Special Economic Zone shall have a production area which may have a free trade area, service area, residential area and tourist area.

SEZs were established to initiate economic linkages to rural areas, diversify and expand industries operating in-country, and promote industrial development outside the nation’s capital, Phnom Penh.¹¹ SEZs in Cambodia are almost all owned and managed by foreign, private investors. To be eligible to own and operate an SEZ, the developer must have a minimum of 50 hectares (124 acres) of land; the construction of a perimeter fence and the provision of the necessary infrastructure (including roads, electricity and water supply to service SEZ businesses) is required.¹²

SEZs in Cambodia are intended to serve as “enclaves that provide a stable business environment, reasonable infrastructure and public utilities, and less red tape” (footnote 3). SEZ owners and businesses located in SEZs are provided a “one-stop” service, with all relevant government ministries accessible and present on an SEZ site. This serves to process relevant documentation that owners and businesses require to be able to export and import goods, employ workers, and accomplish other regulatory matters (footnote 12). SEZ owners and businesses are guaranteed no price or foreign exchange controls, a 20% corporate tax rate, free remittance of foreign currency, exemption from import duty and value-added tax, and tax holidays (footnote 3).

The Cambodian Special Economic Zone Board (CSEZB), a subsidiary of the Council for the Development of Cambodia (CDC), governs SEZ development. The CDC is also responsible for the Special Economic Zones Trouble Shooting Committee (SEZ TSC), which serves to reconcile technical or legal issues associated with SEZ development and to receive grievances from zone developers and zone investors. According to Article 4.1 of the SEZ subdecree, the following officials form the SEZ TSC:¹³

• Chairman of the CDC;

• Minister of the Council of Ministers;

• Minister of Economy of Finance;

• Minister of Commerce;

• Minister of Land Management, Urbanism and Construction;

• Minister of Environment;

• Minister of Industry, Mines and Energy;

• Minister of Public Works and Transportation;

• Minister of Labor and Vocational Training;

• Secretary General of the CDC; and

• Secretary General of the CSEZB.

SEZs in Cambodia are primarily export processing facilities, meaning SEZ businesses will sell the majority of their outputs to foreign markets. SEZs located in close proximity to Sihanoukville Port or the Southern Corridor (between Phnom Penh and Vung Tau deep-sea port) are reportedly preferred by investors when compared to land-based regions (i.e., Poipet and Koh Kong SEZs) due to ease of export. Based on available information, there are 17 SEZs operating in Cambodia and an additional 30 authorized to begin construction.¹⁴ The operational SEZs are

1. Phnom Penh SEZ in Angk Snuol District, Kandal Province

2. Sihanoukville SEZ in Prey Nop District, Sihanoukville Province

3. Poi Pet O’Neang SEZ in O’Chhrav District, Banteay Meanchey Province

4. Sihanoukville SEZ in Stueng Hav District, Sihanoukville Province

5. Manhattan (Svay Rieng) SEZ in Bavet City, Svay Rieng Province

6. Kampot SEZ in the Kampot district, Kampot Province

7. Tai Seng Bavet SEZ in Bavet District, Svay Rieng Province

8. Neang Kok Koh Kong SEZ in Mundul Seyma District, Koh Kong Province

9. Dragon King SEZ in Bavet City, Svay Rieng Province

10. H.K.T. SEZ in Prey Nub District, Sihanoukville Province

11. Shandong Sunshell Svay Rieng SEZ in Bavet City, Svay Rieng Province

12. Sanco Poi Pet SEZ in Poi Pet City, Banteay Meanchey Province

13. Suvannaphum SEZ in Kean Svay District, Kandal Province

14. Sihanoukville Port SEZ in Sihanoukville City, Sihanoukville Province

15. High-Park SEZ in Svay Rieng, Province

16. Qi Lu Jian Pu Zhai in Svay Rieng Province

17. Goldrame Park Shun in Kandal Province

2.1.2 Health Impact assessment in Cambodia

In Cambodia, Articles 6 and 7 of the Law on Environmental Protection and Natural Resources Management¹⁵ require the submission of an initial environmental impact assessment (I...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Tables and Figures
• Acknowledgments
• Abbreviations
• Executive Summary
• 1 Introduction
• 2 Country Policy, Legal, and Administrative Frameworks
• 3 Health Opportunities and Risks Associated with Special Economic Zones
• 4 A Health Impact Assessment Framework for Special Economic Zones
• 5 Health Impact Assessment Guidelines for Special Economic Zones
• Appendixes
• Footnotes
• Back Cover