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policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of
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Asian Development Bank Institute

Regional Workshop on Eco-Industrial Clusters
Tokyo, Japan, 2-4 December 2013

Country Paper: Sri Lanka

Presented by1:
Asitha Kumar Seneviratne, Additional Secretary (Policy Development), Ministry of Industries and
Commerce and,
Gamini Wijesinghe, Director, Ministry of Environment & Renewable Energy

A. Background
Presently populated with around 20 million people within a relatively compact area
of 65,332 square kilometres of vast geographical diversity, Sri Lanka, historically known as
Taprobane, Serendib, Ceylon or the Pearl of the Indian Ocean is not only a strikingly beautiful
country but also an environmental hotspot with rich bio-diversity. Traditionally, Sri Lankans treated
the natural environment as their most important asset to be shared by all inhabitants based on
common rules irrespective of any divide and have a culture and lifestyle in consonant with the
environment which utilized natural resources including land, rainwater and forest products
extremely judiciously.
Things began to change, however, in two phases. First, since mid-1850s, with the
introduction of commercial plantations of coffee, tea and rubber by the British, which consumed
hundreds of thousands of hectares of primary forests in the wet zone prone to soil erosion,
commercial mono-crops replaced large swaths of environmentally sensitive natural vegetation. The
impact of this action on the environment is still being felt by the country although resultant
economic and social advantages are significant. Second, with the liberalization of economy since the
mid-1970s, expansion of manufacturing industries took place which started polluting the
environment slowly while creating a great demand for natural resources in addition on energy and
Emerging city clusters of diverse standards sprang mostly around expanding
economic nerve centres which attracts rural population is another factor that created pressure on
environment management. Industries and cities are interdependent and pressurize urban supply
chains and generate large volumes of solid and liquid waste that is becoming a serious problem to
local governments as well as for urban planners. Cost-effective pragmatic solutions are hard to come
by albeit there is a proliferation of theoretical solutions that doesnt attract investments.
Since the dawn of much awaited peace and stability in 2009, Sri Lanka is facing new
challenges as it makes the transition to a middle-income economy and one major challenge is in the
front of environmental sustainability. On one hand, rapidly expanding economic activities including
industrial operations impact the environment and deplete natural resources in a noticeable manner
with formation of strong public opinions against all types of environmental pollution and emerging
of policy remedies. On the other hand, environmental vulnerability emanates from changing
weather patterns, and natural disaster related shocks such as adverse rainfall events, cyclonic
conditions, unusually strong monsoons, earth slips etc. which are mostly uncontrollable calls for
more effective Climate Information Products based on newest technologies that are costly.

Edited by Ms. T F Angela Fernando, Project Associate/Research Assistant, City Cluster Economic Development Project
Phase III, Sri Lanka
ADBI ECI Regional Workshop Country Paper Sri Lanka

The third but most critical factor is the efficient use of energy and fuel which is
crucial for sustaining the competitiveness of Sri Lankan economy while supporting enhanced
standards of living of the people. Sri Lanka imports every drop of fuel and natural gas for all uses.
Although Sri Lanka is rich in hydropower sources, generated hydropower cannot meet even 40% of
energy needs of the country. The policy of the government to provide grid electricity to 100%
households also has created a large demand for electricity and hence fossil fuel. Renewable energy
such as solar, wind and ocean wave is yet to make an impact on the power scene.
With rapid urbanization and agglomeration of dwellings, increasing urban waste
generated by citizens and service providers to the citizens is becoming an issue which is receiving the
attention of all stakeholders. Disposal of municipal solid waste has become a burning issue and the
current widely practiced method is open dumping which creates not only environmental problems
but also public outcries and protests. Municipal waste may consist of outputs from SMEs and light
industries located in cities.
Demand for construction materials such as sand and wood based products has
increased with economic growth, improved standards of living and urbanization which exert
pressure on rivers and forests. Production of construction materials such as asbestos and cement is
considered polluting.
Agriculture is an important activity in Sri Lanka and farmers use multiple types of
agrochemicals with harmful effects on the environment and water bodies. Prevailing Chronic Kidney
Disease is attributed to certain chemicals and agriculture seems to have gone against the nature.
Since agricultural supply chains are feeding industrial value chains and clusters, one cannot ignore
this aspect.
The Government of Sri Lanka is very much concerned about all the above aspects
highlighted. The diversity and beauty of the natural environment including fauna and flora is one of
the key attractions for tourists and the tourism industry is to play a major role in our economy in
future. That also compels the government to introduce all possible measures to protect and sustain
the pristine environment.
In practical terms, Sri Lanka attempts to tackle the eco-issues related to
industrialization and urbanization with policy-regulatory reforms, technological innovations, and
creating awareness among all. Focus is on minimizing the generation; safe disposal of industrial
wastes including hazardous wastes, bio- medical waste, e-waste and industrial effluents in a
harmless manner. Preventing air and noise pollution is also in the agenda. Managing the efficient
use of energy and fuel and natural resources is another activity that is being promoted. Use of biomass from fuel-wood plantations and recycling of materials are increasingly becoming popular which
makes commercial sense.
What is lacking is integrating new environmental management models and futuristic
technological solutions to projects at the early design stages. This needs sustained awareness
programs and assistance to relevant parties. Resource allocation to this extremely important area
appears to be less than desirable at the moment.

B. Legislative and policy framework

Sri Lanka has signed and ratified many international conventions related to
environment management which include: UNCED agreements, Montreal Protocol, Climate Change
Convention, Basel Convention and the Biodiversity Convention.
Sri Lanka has a robust legislative framework that addresses environmental issues. It
comprises of: (i) National Environmental Act, Forestry Ordinance, (iii) Flora and Fauna Act, (iv)
ADBI ECI Regional Workshop Country Paper Sri Lanka

Fisheries Act, (v) Coast Conservation Act, (vi) Import and Export Control Act, (vii) Local Government
Act. However, the government has established a Central Environment Authority and a dedicated
ministry for Environment and Renewable Energy. Although the mentioned acts are sound, efficient
implementation has been less than desirable due to poor institutional capacities and capabilities.
Lack of technology and finances is another hurdle. Coordination among different agencies is another
Relevant national policies include: (i) National Environment Action Plan, (ii) Forestry
Master Plan, (iii) Coastal Zone Management Plan, (iv) National Biodiversity Action Plan, (v) Land-Use
Planning Unit, (vi) Coastal Development Laws, (vii) Water Resources Council, (viii) Water Quality
Standards, (ix) National Strategy for Solid Waste Management (NSSWM) which are being
implemented by different ministries and agencies responsible.
Significant regulatory measures taken include: Environmental Protection Licensing
Scheme; Environment Impact Assessment Scheme; Siting of industries in an industrial estate or park
to ensure central waste disposal; Projects to relocate certain hazardous industries, such as tanneries
and pesticides; Fiscal incentives given to industries under certain conditions to use advanced
technology in order to minimize and control pollution and other wastage; Training programs
arranged for the officers who are involved in hazardous waste management; very high importance
given to develop a rapport with industry to promote cleaner technologies and pollution minimization
programmes with assistance from donors such as USAID and UNDP; demonstration programs to
introduce pollution minimization methods and the benefits of recycling wastes; A forum for
improving the dialogue between the Government agencies and the private sector for the promotion
of sustainable development, known as the Lanka International Forum on Environmental and
Sustainable Development (LIFE).
National sustainable development coordination mechanism comprises of (i)
Ministerial Sub Committee on Environment, (ii) Inter-agency committees, (iii) and NGOs such as LIFE,
IUCN, Environment Foundation, Mihikatha Foundation and Journalists Forum which work closely
with the government.

C. Solutions Offered
Sri Lanka takes significant Eco Industrial measures at various levels. It expands from
policy level to operation level covering various industrial sectors and initiatives. Many programmes
although general in nature carry certain eco characteristics.
One of earliest instances where the clustering of industries was recognized was in
1996 under the National Industrial Pollution Management Policy Statement 1996. That was
initiated by the Ministries of Industries, Environment and Science & Technology and signed by 3
Ministries and approved by the Cabinet of Ministers. It advocated following key areas.
a. Pollution Prevention at Source; Polluter Pays principle; Clustering Industrial units in
estates or parks; Incentives and enforcement; private sector and government
Clustering of Industrial units was accepted as a principle in way back as 1996 and
Industrial Cluster parks established have eco characteristics.
In 2000, with USAID technical assistance a program was launched named The
Competitiveness Program which successfully established eight industry clusters namely, Rubber,
Tea, Tourism, Coir, Spices, Jewellery, ICT and Ceramics by bringing all relevant stakeholders in the
government and private sector together. A representative steering committee managed the affairs
of each cluster.
ADBI ECI Regional Workshop Country Paper Sri Lanka

Out of the eight industry clusters, the Rubber Industry Cluster proposed to set up a
Rubber City, a dedicated industrial park for rubber products manufacturing having considered
various co-location advantages including central effluent/waste management. This was not
proceeded due to lack of funds although the government allocated a land for the purpose. The
private sector too was not much interested as environmental issues were not so severe.
In 2010, under the City Cluster Economic Development (CCED) Phase II, ADB
allocated funds to do a prefeasibility study on the Rubber City but instead the stakeholders decided
to use funds to conduct a prefeasibility study on an Integrated Water Management Project (IWMP)
to introduce 3R principles. During the CCED Phase III (2012), ADB funded a full feasibility study of a
pilot/demonstration IWMP in Board of Investment of Sri Lanka owned Seethawaka Export
Processing Zone focusing on a latex glove manufacturing factory. At present the ADB is taking steps
to fund a feasibility study that will cover the entire Processing Zone which supports over 25
manufacturing industries. This will be an initiative aimed at introducing certain EIC principles.
Very recently (2013), certain environmental issues related to large industrial units
located in urban and semi-urban areas have surfaced with negative social and economic
consequences and the government has requested most industries to be located in specially designed
industrial zones with adequate environmental safeguards. Such industrial parks, obviously, will be
compelled to incorporate EIC principles and practices.

D. Industrial Clusters in Dedicated Zones

Number of Industrial clusters as Industrial Estates (IEs) or Industrial Parks has been
established by agencies such as the Ministry of Industries & Commerce (MI&C), Board of Investment,
Industrial Development Board, Urban Development Authority and the North Western Provincial
Council. Although termed as Industrial zones, they had undergone Environment Impact Assessment
Process (EIA) or Initial Environmental Examination (IEE) and contained and included eco principles. It
shows the regional characterization and the spread of Clusters, parks and estates throughout the
The MI&C has identified the Regional Industrial Development programme as one of
the most important programmes to overcome the problem of unavailability of adequate
infrastructure facilities for the industries at the regional level. In addition, this programme facilitates
industries to minimize their investment on common infrastructure such as lands, electricity, water
etc. Specific objectives of this programme are establishing common infrastructure facilities at the
regional level, creating employment opportunities at the regional level, encouraging the utilization
of local raw material adhering to environmental and eco concerns increasing value addition and
facilitating technology transfer.
To achieve these objectives, the MI&C has already established 26 IEs throughout the
country in 17 districts and 806 acres have been developed with necessary infrastructure such as
electricity, water and road networks. In these 27 IEs, 308 industries are in commercial production, 40
factories are under construction and 14,431 employment opportunities have been created.

E. Significance of industries
The Sri Lankan economy grew at a healthy rate of 6.4% in 2012 at constant prices
and Sri Lanka G D P at current market prices stands at Rs.7582 billion. Industry sector which include
Mining and Quarrying, Manufacturing, Electricity, gas and water and, Construction contributed to
32% of GDP and grew at 22.0% at current prices with a value of Rs. 2387 billion.
ADBI ECI Regional Workshop Country Paper Sri Lanka

Manufacturing industry which is the largest sub sector in the Industry sector
recorded a growth of 5.2% in 2012 at constant prices compared to 8.3% and 7.5% in 2011 and 2010,
respectively. Value of manufacturing in 2012 was Rs. 1354 billion which shows the significance of
the sector and need to sustain it in all aspects.

F. Policy Initiatives
Within the past few years significant developments in that area has taken place in
Sri Lanka. Prior to that the Environment Impact Assessment Scheme has been in operation in Sri
Lanka since 1981 and the Environment Protection Licence (EPL) scheme for Industry has been very
effective. What are highlighted here would be the initiatives that were developed recently, which
have the eco-concept embodied. Among the significant initiatives are,

National Action Plan for Green Lanka Programme (Chapter 9 Greening the Industries)
National Green Reporting System
Green Accounting System
National Green Procurement Policy

The above initiatives are at various stages of Implementation. Significant among
them is the National Green Reporting System which has shown tremendous progress.

G. National Haritha Lanka Programme: Greening the Industries

National Green Lanka programme has Mission 9 which is dedicated to the Greening
of Industries. It shows the way for Industries in the future. Strategies of the initiative are:
Consolidate Cleaner Production in Industries; Establish Eco-industrial parks; Certification of
Industries; Greening the Supply Chain; Closing the Loop and Industrial Ecology; Incentives for
environmental friendly investments.
The establishment of Eco Industrial Parks is recognized as one of the strategies. The
preamble of the action plan reads:
The establishment of eco-friendly industrial parks in the regions is proposed while also
taking to improve the environmental infrastructure in the existing industrial estates. A
scheme for implementing environmental performance criteria for individual industries in
industrial estates will be introduced. Industries should be encouraged to obtain ISO14001
certification. Among the other proposals are promoting the use of environmentally
friendly raw material, encouraging industries to reuse resources from selected wastes, and
encouraging industries to apply for carbon credits for their renewable energy projects.
The activity plan too illustrates that idea and strategies and actions and key
performance Indicators have been identified. The plan include action to: Improve Environmental
infrastructure in existing industrial Estate, Establish Environmental performance criteria for all
industries in industrial estates and, Develop regional industrial estates in each region with enhanced
environmental considerations.

ADBI ECI Regional Workshop Country Paper Sri Lanka

H. National Green Reporting System

The Guidelines for the National Green Reporting System (NGRS) in Sri Lanka was
developed in 2011 based on the Global Reporting Initiatives (GRI) G3 guidelines and suggests use of
ISO 26000 Standards for Guidance on Social Responsibility for design and implementation of internal
sustainability mechanism. Incorporation with the NGRS will improve the operational performance,
stakeholder relationship, risk management, investor relationship and public value of organization
and help to find opportunities to identify new markets or business opportunities. The Governing
Council of NGRS provides policy directions and guidelines for the manufacturing and service sector.

I. Green Accounting
Green Accounting is also another area that has developed recently. As an initial step
a pilot project is being implemented to integrate the forestry sectors. A Green Accounting
Mechanism is developed to integrate the real contribution of natural resources to the System of
National Accounts (SNA) of the country. The present System of National Accounts neglects the
contribution of the environment as well as the damages, losses and benefit inflicted by economic
activities on the environment. Failure to incorporate the role of natural capital in SNA has led to
neglect contribution of environmental resources by policy makers, thereby resulting in further
degradation of environmental and natural resources. It is therefore proposed to incorporate
environmental benefits under the concept of Total Economic Value (TEV) in to the UN sponsored
system of Environmental Economic Accounting UN-SEEA.
As the first step, the Ministry of Environment and Forest Conservation Department
have started to estimate the forestry sector contribution to the System of National Accounts of the
country. The main objective of this study is to develop a methodology to estimate the TEV of the
forestry sector contribution and a mechanism to incorporate green accounting data to the System of
National Accounts in Sri Lanka.

J. Green Procurement
Green Procurement is another area that is being implemented since the Manila
Declaration 2009. The Ministry of Finance & Planning is developing Green Procurement guidelines.
As an initial step Green Procurement categorizing goods is being developed. It consists of 07
categories namely, Supplies, Maintenance of Furniture and Equipment, Acquisition of Furniture
Equipment, Maintenance and Acquisition of Building, Maintenance and Acquisition of Plant and
Machinery, Maintenance and Acquisition of Vehicles and Services. This initiative commenced only in
late 2012.

K. Energy efficient improvement programme

The Energy Efficiency Improvement Programme for Manufacturing Industries is
another programme introduced to give assistance to industries to minimize the wastage of energy /
maximum utilization of energy. This is carried out as a special project by the MI&C, together with the
National Cleaner Production Centre (NCPC), to assist the local industries to carry out their operations
in an environmentally friendly way.

ADBI ECI Regional Workshop Country Paper Sri Lanka

L. Green Jobs
Sri Lanka is a member country of a regional project for production of Green Job
opportunities and low carbon, climate resilient and environmental friendly development of the
country. This project is implemented by the Ministry of Labour and Labour Relations and Ministry of
Productivity Promotion in Sri Lanka in collaboration with the International Labour Organization (ILO).
The Ministry of Environment established a Green Job Awards programme to recognize and reward
the individuals and organizations who are engaging in green jobs related to environmental friendly
technologies/activities. Green Job Awards are offered annually on the World Environment Day that
is 5th June.

M. Other initiatives
The government institutions are dedicated to the creation of an environment
conducive for sustainable and commercially competitive manufacturing entities, producing high
value-added products contributing to the enhancement of living standards of the people. In this
process, the MI&C attempts to integrate greening the economy principles in all its sub sector policies
and action plans. One of the major tasks of the Industrial Policy Division of the ministry is the
facilitation and guidance emphasizing on environment friendly industries. In order to achieve the
above objectives the Ministry monitors the activities of the National Cleaner Production Centre
(NCPC) and Regional Industry Service Centres.
The NCPC was established in 2002 for Cleaner production (CP) promotion and
capacity building in the country. The Ministry has carried out various programmes to find greener
methods of production for industries. These activities have been expanded and enhanced since the
Manila Declaration.

N. Use of Eco Industry Cluster (EIC) concept

Sri Lanka has begun to practice EIC concept with varying degrees of success. It may
not have been done in a systematic manner but certain EIC principles are being adopted gradually.
Some relevant projects launched are given below.
1. An integrated leather industry complex at Bata-atha (abandoned due to public protests)
2. Leather complex at Musali (in Mannar)
3. Proposal for establishment of a dedicated Pharmaceutical Industrial Estate
4. Eco factories and complexes in the textile and apparel sector (affiliated with Marks and
5. Rubber City project
6. Integrated Water Management Project at Seethawaka Export Processing Zone

Some initiative such as Bata-atha had to be abandoned due to public pressure on
environmental concerns although not fully justified. The Leather complex proposed as Musali is also
following the same principles and is an alternative to Bata-atha. Leather Industry, which commenced
in Sri Lanka in early 1940s presently, consists of 14 tanneries, for large scale leather product
manufacturers and hundreds of SME manufacturing units. Most of the leather tanneries are
situated in densely populated locations in greater Colombo area which is a serious issue.
ADBI ECI Regional Workshop Country Paper Sri Lanka

The full-fledged leather cluster complex which adheres to the environmental
regulations and EIC concepts which provide:
a. A common site to relocate existing tanneries which will accrue all the benefits of
common facilities with room for future expansion and main infrastructure facilities
i.e. power, water, telecommunication, roads etc.,
b. Centrally operated chemical recovery plant to recover mainly chromium from waste
water and a centrally operated waste water treatment plant to protect the
environment and reducing the cost of production.
The benefits of rapidly expanding world trade in leather products could not be
enjoyed by Sri Lanka due to lack of modernization and expansion, lack of centrally operated facilities
such as chemical recovery and waste water treatment essentially needed to reduce the cost of
production and to comply with the environmental standards established by Central Environmental
Authority (CEA) and the foreign buyers.

O. Dedicated Zone for Pharmaceutical Industries (DZPI)

The pharmaceutical industry is one of the booming industries in the world and
currently, Sri Lanka heavily depends on imported pharmaceuticals which are over 90 percent of the
domestic requirement. The proposed project is aimed to setup a DZPI with the objectives of foreign
exchange savings and upgrading of local pharmaceutical industry. The estimated cost of
infrastructure development is Rs.119 million. Currently, the pharmaceutical and related trade
industries provide direct and indirect employment of rover 200,000 people. The main objective of
the MI&C is to provide required infrastructure facilities to encourage investments in pharmaceutical

P. Eco factories and complexes in the textile sector

In the textile and apparel sector significant developments have taken place
especially with the fact due to Sri Lankas position as an exporter towards the high end market. Sri
Lankan apparels are suppliers to reputed firms such as Marks & Spencer, Victoria, Nike, Hugo boss,
Laser, Martin etc. These companies in turn insist their suppliers to follow eco principles and they are
keen to fetch a high price by being a supplier to the niche markets. Textile production can cause
significant environmental harm. Converting raw textile fibre to finished product requires significant
water, chemical and energy use, and the UK Environment Agency scores the textile and garment
manufacturing industry worse than any other on its pollution risk assessment.
In Sri Lanka there are three Eco friendly factory complexes which follow the above
concept and set up by the private sector.
a. MAS Active wear green factory Thuruli Tulhiriya (257 acre)
b. Brandix Eco factory Seeduwa
c. Hydramani Eco factory Yatiyana
Key areas to focus in an Eco-Factory include: Energy Audit, Green Energy Sourcing,
Insulation, Lighting, Temperature Control, Water Reduction, Waste Reduction, Project Management
and, Third Party Certification.

ADBI ECI Regional Workshop Country Paper Sri Lanka

Q. Rubber City Project

Rubber growing, processing and products manufacturing industry cluster has
become a 1.2 billion dollar revenue earner in Sri Lanka and Sri Lanka is the world largest industrial
solid tire exporter. Although rubber farming is an environmentally friendly activity that provides
remunerative employment to thousands of rural smallholder farmers, and renewable wood for value
addition, certain segments of the rubber industry such as making of latex gloves have created certain
environmental problems. As a solution, in 2001, stakeholders mooted the idea of establishing a
dedicated industrial processing park named Rubber City to locate manufacturing industries. While
reaping cluster advantages of co-location, common waste treatment and disposal methods will
provide a cost-effective solution to environmental risks. The MI&C allocated land for the Rubber City
but finances were not available for feasibility studies and project design. The project was shelved.
With new developments in the sector and growing environmental concerns, all
stakeholders are now keen to pursue the project. The government is expecting donor funds and
technical assistance to do a feasibility study. Private sector is willing to provide full cooperation for
this project through the apex body of the rubber industry which is the Sri Lanka Society of Rubber
Industry. The Rubber City project has been embedded in the recently drafted 10 year Sri Lanka
Rubber Cluster Master Plan (2014-2023) prepared with technical assistance received from ADB City
Cluster Economic Development.
The Rubber City could become an ideal candidate to incorporate all the best
practices in EICs. The MI&C is keen to implement this project.

R. Integrated Water Management Project (IWMP) Export Processing Zone at

Sethawaka (SEPZ)
IWMP at SEPZ is an outcome of the ADB implemented City Cluster Economic
Development (CCED) Project. In 2010, under the CCED Phase II, ADB allocated funds to do a
prefeasibility study on the Rubber City but due to other priorities the stakeholders decided to use
funds to conduct a prefeasibility study on an Integrated Water Management Project (IWMP) to
introduce 3R principles in rubber manufacturing industries. During the CCED Phase III (2012), ADB
funded a full feasibility study of a pilot/demonstration IWMP to be located in the Seethawaka
Export Processing Zone owned by the Board of Investment of Sri Lanka focusing on a private sector
owned latex glove manufacturing factory.
At present the ADB is taking steps to fund a feasibility study that will cover the entire
Processing Zone which supports over 25 manufacturing industries without limiting 3R priniciples to
rubber industries. This will be an initiative aimed at introducing EIC principles pertaining to water
management in a large industry cluster.

It is expected that this project will be implemented as a public-private partnership.

S. Capacity Building Activities and Financing Needs

At this turning point in Sri Lankas economic growth, manufacturing industries will
play a major role. EICs are considered an essential prerequisite for sustainable industrial
development. However, due to other imperatives, EICs may not receive the due priority it needs in
the development agendas pursued by the stakeholders and therefore EICs may not become the
default framework. To avoid this error, EIC concept needs to be promoted vigorously and
methodically among those concerned. This will be easy as the CCED concept promoted by ADB since
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2009 is gaining acceptance among national planners and private sector operators in Sri Lanka. ECIs
can be introduced based on the CCED platform.
To introduce best practices in establishing ECIs, Sri Lanka needs technical assistance
to take the following strategic initiatives.

T. Elements of an EIC Program


An ECI action plan with seven interrelated components is suggested.

Awareness creation: as the first step, awareness must be created among relevant
stakeholders from the private sector and the government. Academia, industry experts, NGOs and
the media too need to be sensitized.
Building a coalition of EIC protagonists: the initial awareness program may help to
identify a team of EIC believers who are interested in practicing EIC principles and approaches in the
field. Such identified persons can be brought into a coalition with a clear goal and agenda.
Identification of EIC entry points: it is essential to determine suitable entry points or
potential opportunities to test first generation EICs. This should be based on a study focused on
current and potential industries, locations and environmental concerns including resource needs.
Feasibility studies and project proposals: potential projects with highest success
potential can be short listed for detailed assessments leading to project concepts, prefeasibility
studies and feasibility studies. A few such feasibility studies can be ranked according to a criteria
A pilot and demonstration project: to demonstrate the efficacy of an EIC, a pilot and
demonstration EIC can be either newly established or created using an existing industry cluster with
necessary improvements. It may be feasible to have two pilot projects on two different approaches.
Policies and regulations conducive: it is important to work with the government to
bring forward policies and regulations conducive to effective implementation of EICs. Incentives too
may be required at the inception that may include financial packages on concessionary terms.
Implementation, monitoring and revision: this is a crucial aspect as much
coordination among stakeholders from diverse institutions and sectors will be essential until EICs
become a part of the national development agenda. An EIC Secretariat may be an appropriate
mechanism to ensure progress.

U. Conclusion
It is only logical that Eco-Industrial Clusters need to dominate the industrial
landscape of Sri Lanka in future as the country cannot afford to mismanage its pristine environment
including land, vegetation, all water bodies, beaches, ocean, air and allied natural resources which
provide an unsurpassed comparative advantage in terms of liveability and ability to attract tourists.
Different stakeholders are involved in economic growth, industrial development, national planning,
urban development and environmental management. They operate without effective coordination
and a singular vision in terms of using city industry cluster approach. Considering the immense
benefits such an integrated approach if effectively implemented can bring, it is necessary to design a
program to introduce the practise of EICs in Sri Lanka. The EIC program could comprise of the
components mentioned in the previous section and linked to the ongoing CCED activity.

ADBI ECI Regional Workshop Country Paper Sri Lanka

V. Acknowledgement
The authors of this paper wish to thank the Asian Development Bank Institute for
facilitating this contribution by inviting us to attend the Regional Workshop in Tokyo from 2nd to 4th
December 2013. We wish that this training workshop would be beneficial to Sri Lanka in general and
to us in particular.
We are also pleased to acknowledge the significant service of ADB in introducing the
CCED concept to Sri Lanka which is yet to take root properly in practice although its popularity as a
concept. The rubber industry cluster, however, is reaping CCED benefits and they now have a ten
year master plan in their hands which is gaining wide acceptance.

ADBI ECI Regional Workshop Country Paper Sri Lanka


ADBI ECI Regional Workshop Country Paper Sri Lanka