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Drivers of water system eco-innovation in Ethiopia: the case of Hawassa
Industrial Park
Technical Report · April 2021
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Silvia Cardascia Christian Fischer
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Authors: .
Silvia Cardascia
v Christian Fischer
Godfred Amankwaa This exemplifies
Theme:
Ethiopia’s top-down
Water+Society
political mindset, where
government rather than
Location: governance sets the rules
Hawassa, Ethiopia of the game.
Publication Date
15.04.2021
Suggested Citation: Cardascia S., Fischer C., Amankwaa G. (2021). Drivers
of water system eco-innovation in Ethiopia: the case of Hawassa Industrial
Park Water Science Policy
G
Drivers of water system eco-innovation in
Ethiopia: the case of GHawassa Industrial Park
EXECUTIVE SUMMARY
POLICY
Global manufacturing is shifting from Asia to Africa, and Ethiopia is
RECOMMENDATIONS at the forefront of regional industrial development. Notable is the
installation of the ‘Zero Liquid Discharge’ (ZLD) industrial effluent
Reinforcing institutions and treatment plant at the Hawassa Industrial Park (HIP), where Ethiopia
coordination among the aimed to combine economic growth-oriented light manufacturing
and sustainable development. This policy brief examines the rationale
Ministry of Water Resources behind the choice to install ZLD at HIP and its implications for policy
and the Ministry of transitions in Ethiopia. Findings show that national pride and socio-
Environment is key to generate economic structures, combined with policy entrepreneurship were
grounded policy change and the strongest enablers for the system installation. Environmental
considerations played little to no role. Recommendations are
increased environmental
proposed on ways to help govern some of the ‘wicked’ problems
awareness. hindering effective green manufacturing transitions in Ethiopia.
Leveraging policy entre- BACKGROUND
preneurship roles, such as the
The Government of Ethiopia pursues the East Asian developmental
one played by the global and structuralist model of economic development. Launched under
apparel brand PVH, can drive the leadership of the Prime Minister Office (FRDE, CRGE 2011),
innovation and design a win- Ethiopia has a green industrialisation plan as one of the four clusters
win scenario in collaboration of the Climate Resilient Green Economy (CRGE) Strategy to
with the Ethiopian stimulate environmentally-friendly industries, green technologies and
mega-projects. A flagship example of eco-industrial development is
government. the Hawassa Industrial Park (HIP), that started construction in 2015.
It was inaugurated in July 2016 by the former Prime Minister,
Fostering policy coherence and Hailemariam Dessalegn. Since then, it has become the symbol of
improving environmental Ethiopian industrial ‘renaissance’. Located within the fragile
governance, while promoting ecosystem of the Rift Valley Lakes basin and next to the water-quality
stressed, shallow Hawassa lake, the HIP is presented as an emblematic
inclusive decision-making, case for its ZLD wastewater treatment technology. Perceived by the
could help resolve some of the locals as a city in the city, it is located on the eastern side of the lake
‘wicked’ problems that hinder (Figure 1). It is the first industrial park inaugurated as the flagship of
effective water management Ethiopian eco-industrial development, conceived to reflect the
Reduce-Reuse-Recycle (RRR) principles of industrial symbiosis and
and policy transitions towards designed with the idea of producing zero impact. A common Effluent
water sustainability. Treatment Plant (CETP), equipped with ZLD, was chosen for
industrial wastewater treatment.
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Figure 1 A map of the Hawassa Industrial Park
Recognising policy entrepreneurship as a concept
OVERVIEW AND APPROACH specific to a context, Bakir & Jarvis suggest to
combine the analysis of entrepreneurship and
Ensuring sound water resource management is often institutional change. Bakir developed a conceptual
considered a ‘wicked’ problem. Muller (2013) model – the “Structure, Institutions and Agent-
defines the wicked water management challenge based (SIA) integrative framework” – to understand
across three aspects: complexity, interests and how policy outcomes are affected by the dynamic
localness. Similarly, understanding water system interactions among these three dimensions.
innovation requires more than simply analysing its Defining structures, institutions (including rules,
technological aspects but should include norms and strategies) and agents helps analyse why
institutional, political and socio-economic particular decisions are made.
complexities, localness, and interests on how The updated SIA-PE framework (Fig. 2) was
decisions are made to ensure a sustainable water therefore designed on the backdrop of this existing
future. literature to better integrate the SIA conceptual
Against this backdrop, we applied ideas from analysis with the features of policy entrepreneurship
policy entrepreneurship with institutional analysis (PE). The resulting approach is process-oriented,
theories (structures, institutions and agents), context-contingent, dynamic and integrative, with
developing a framework to understand why and how some elements of novelty, such as: (i) structures,
the ZLD became government agenda in Hawassa institutions and agents are interdependent in
and the resulting processes associated with it. generating policy transitions; (ii) the policy
Several studies have used the concept of policy entrepreneur is embedded at micro (agents), meso
entrepreneurship to explain how and why “particular (institutions) and macro (structures) level, becoming
policy ideas catch on”. Scholars identified central endogenous to policy-making processes and
elements of successful policy entrepreneurship, such bringing institutional changes; (iii) policy
as, social acuity, building teams, leading by example, entrepreneurship is contextualised, with
connecting informal to formal networks, creation of entrepreneurs shaped by the context they are willing
venues and crafting institutions. Policy to shape.
entrepreneurs are pioneered advocates who are
willing to invest their resources to exploit windows As a note on methodology, this policy brief forms
of opportunity arising in the political streams to part of an earlier one-month long field research in
transform their ideas into government agendas. Ethiopia (June 2018 – July 2018) using a mix of
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qualitative methods: semi-structured interviews, understanding of the technology. The visit was
document analysis and onsite observations. Semi- facilitated by the regional office of the Industrial
structured interviews were conducted with key Parks Development Corporation (IPDC). The
informants including: government technical experts, operator Arvind Ltd. showed the plant’s different
donor organisations, academia, civil society components, explained its technology and answered
organisations and private sector companies. to technical questions. During the visit to Hawassa,
Participation in two national workshops relevant to interviews were also conducted with selected key
the research topic were complemented by onsite local community members, facilitated through local
visits carried out in Hawassa by the first author. The NGO contacts.
onsite visit to the Hawassa industrial park, including
the visit to the ZLD facility enhanced the technical
Figure 2 The “SIA-PE Framework” (adapted after Bakir)
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DISCUSSION internally, among different units of the same
environmental agency nor with local public
institutions, as lamented by the environmental office
Drivers and implications of ZLD at HIP
at Hawassa. Moreover, the EIA was not circulated
Results are presented under two broader thematic externally among relevant industrial stakeholders,
categorizations from which sub-themes that such as the IPDC regional office in Hawassa or the
emerged are discussed below. Overall, the strongest private sector tenants working inside the park. The
enablers for the system installation were national latter were only given an approval letter from the
pride and socio-economic structures, combined with MFECC federal office. Hawassa University scholars
policy entrepreneurship (‘agents’). On the contrary, also pointed out a lack of professionalism and
environmental and water management rationales governance mechanisms. This knowledge sharing
embedded in ‘institutions’ were the weakest factors. gap contributed to mistrust and frustration towards
the federal government, as perceived during
1.1 The Rationale Behind and the Enabling discussions with several key respondents. The fact
Environment that during onsite visits, Hawassa park managers
were reluctant to share any ‘sensitive’ data (including
Finding One: For the macro-analysis on the EIA document) indicates scarce transparency. A
structures, both political and socio-economic structures general observation can be made about the analysis
played a central role in setting the scene for enabling on Institutions. These were weak macro-dimensions
the ZLD intervention. On the one hand, HIP has a in enabling the ZLD choice. Regulations, standards
strong political drive for Ethiopia’s national pride. It is and policies are well grounded in the constitution.
portrayed as a means to alleviate poverty through an However, lack of vertical (federal- regional- local-
export-oriented, sustainable development strategy, basin) and horizontal (water-environment-industry)
and as a tool to leapfrog green technologies and coordination mechanisms as well as unclear
exchange know-how. Political factors influencing the administrative and sectoral mandates make the
HIP-ZLD decision-making process are overall institutional setting ineffective.
interdependent. The hierarchical nature of Ethiopia’s
political system contributed to a quick HIP-ZLD Finding Three: Two Influential agents were
decision-making process. identified based on their (i) level of influence in
decision-making mechanisms, (ii) leverage in overall
Finding Two: Industrial, Environmental and Water HIP management, or both. The two agents include
institutions played a role in setting up the ZLD federal institutions and the international private sector. With
intervention. However, they were weak macro- regards to federal institutions, the strongest agents are
dimensions in enabling the ZLD choice. As far as the Prime Minister Office (PMO) acting through its
industrial institutions are concerned, the only two affiliated branches, namely, the IPDC and the
enabling factor is the ‘Textile Industry Strategy Ethiopian Investment Commission (EIC). The
Document’ developed by the Ethiopian Textile rationale behind their involvement in the ZLD
Industrial Development Institute (ETIDI) under the operation is well summarised by a key informant. He
Ministry of Industry. Sustainable textile and skill argued that this was a federal government decision at
development were strategic factors in attracting a higher level testified by the fact that the former
FDIs in Hawassa. Yet, a lack of coordination among Prime Minister Halemariam inaugurated the park
the Ministry of Industry and the IPDC, together with three times. The government’s idea seems to be to
the absence of guidelines on how to manage eco- bring investors, give them the land, and build the
industrial parks weakened industrial institution facilities and roads for transport. This experience
factors in the Hawassa ZLD operation. comes from China and Korea.
The analysis of environmental and water The high-level political involvement in the ZLD
institutions confirms the endemic nature of ‘wicked’ decision confirms the strong role of structures and
water quality governance problems. As far as the HIP the nature of the investment, which is economical
is concerned, the EIA related to the ZLD design was rather than environmental. The Ministry of the
submitted to and approved by the Ministry of Environment as well as the Ministry of Water played
Environment’s (MFECC) EIA unit, which worked in very minor roles. An important finding is that
collaboration with IPDC for environmental regional and local actors were not part of the decision
management coordination activities in the HIP. at any stage of the process. The Hawassa
However, according to key respondents, the EIA is municipality was involved by the federal IPDC only
only a formal procedure and the EIA document at a second stage and for the purpose of landfill
issued by the MFECC was not shared neither construction. Moreover, the regional IPDC office in
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Hawassa sees the federal IPDC as a competitor. This government first, and the HIP business later. PVH’s
exemplifies Ethiopia's top-down political mindset, policy entrepreneurship (PE) was contextualised and
where the government rather than governance sets the embedded in the structure-institutions-agents (SIA)
rules of the game. matrix. It became endogenous to policy-making and
Despite the government’s leading role in setting the was able to advance institutional changes.
agenda for introducing the ZLD innovation, the
global American apparel brand, PVH, has played a 1.2 Barriers of the system innovation uptake
central role as a policy entrepreneur in Hawassa.
Willing to pioneer a new global model of vertical Finding Four: For technical barriers, two main
supply chain in Sub-Saharan Africa – from growing issues were identified: (i) lack of sludge management and
cotton and building partnerships with local suppliers (ii) storm water drainage runoff. The first is directly related
to export-oriented manufacturing – PVH decided to to the ZLD operations, the second to the HIP. At
“move the needle in Ethiopia”. The company’s the time of site visits (August 2018), the HIP sludge
decision to invest in Ethiopia came after a thorough was not safely disposed of and was stored in a
assessment of possible entry points in Africa. PVH is warehouse located within the plant site since
striving to build a solid sustainable branding through December 2017. The IPDC federal office was
multi-stakeholder partnerships with local recently granted permission by the Hawassa
government and international NGOs. The company municipality to develop a solid waste landfill.
is mastering this technique from the experience of Moreover, the German Bilateral Cooperation (GIZ)
Tommy Hilfiger (one of its largest shareholders). was preparing a baseline study to develop a waste-to-
Building on the literature previously discussed, PVH energy project proposal for sludge reuse, in
policy entrepreneurship is analysed across three collaboration with IPDC. The second technical
categories: (i) access; (ii) resources and (iii) strategies. In barrier is the storm water drainage system
terms of access, PVH was able to build political functioning. Untreated runoff is discharged through
connections with the highest ranks of Ethiopian a canal of 1.5 km directly to lake Hawassa. The
politics through consistent perseverance. In 2014, discharge point is the Hailu resort, a five-star hotel
the company approached the Prime Minister’s Office and tourist attraction located in the Hawassa city
and received a highly supportive response from centre. The runoff discharge was the most contested
Arkebe Oqubay (the ‘architect’ of Ethiopia’s issue among residents interviewed, who lamented the
industrial policy) and Fitsum Arega (head of the high risks of chemical contamination. Different
Ethiopian Investment Board). In terms of resources, narratives emerged during the interviews and onsite
the company is one of the largest apparel brands visits. HIP tenants seemed to be cautious about any
globally, hence is capable of investing “time, energy, type of negative comments regarding environmental
reputation and money”. The most important management in the park. They highlighted, instead,
category to shape PVH policy entrepreneurship is ‘positive’ practices (i.e. no car washing, no chemical
strategies, including different levels of penetration in use) applied by tenants to prevent drainage runoff
Ethiopia’s economic and political venues. First, the contamination. Only a respondent working for one
company was able to exploit “windows of of the dry-processing companies at HIP lamented
opportunities” at the right time. Taking advantage of rumours about wet-processing companies who, by-
Ethiopia’s ambitions, national pride and willingness passing the ZLD system, were supposedly
to become Africa’s new light manufacturing hub. discharging their effluents directly into the canal. On
PVH was able to present a win-win solution strategy: the contrary, Hawassa residents and local authorities
“building a best-in-class apparel manufacturing were more vocal when lamenting their complaints.
industry”. The intersection between the capacity to One respondent highlighted the fact that the canal is
invest (PVH) and the willingness to risk (Ethiopia) discharging even during the dry season, hence the
was found in the eco-industrial park experiment at runoff seems not to be storm water.
Hawassa, where Africa’s largest ZLD effluent The consequences of poor environmental
treatment plant was installed. The rationale behind management are not only health-related but also
the ZLD choice was more economic than economical. As a respondent commented, after the
environmental. Moreover, the company was able to canal was built, “nobody eats fish anymore”, implying
lead by example and invited other investors to immediate repercussions on those communities
embark on the HIP venture. To implement its strongly dependent on fishery-related economic
vertical strategy, JP Wuxi (the only textile mill at activities. Poor planning in the design phase and lack
HIP), TAL Garment (shirt supplier) and Arvind of adequate environmental management in the park
(both wet-processing factory and ZLD operator) seemed to be the major causes of the technical issues
were invited to join negotiations with the federal identified.
5
THREE MAIN BOTTLENECKS FOR POLICY REFORM
Aside of technical issues, three main non-technical barriers were identified, which form part of the
‘wicked’ problems related to water resource management. These are the three main bottlenecks for
policy reform.
BOTTLENECK 1: FINANCIAL SUSTAINABILITY
As far as operational and maintenance (O&C) costs are concerned and according to the park
tenants, the ZLD plant operator and the IPDC federal office, companies pay a flat rate for
wastewater treatment to Arvind Ltd and IPDC is the ‘middlemen’, who collects the tariff. What is
not clear is the exact cost per m3 treated and if the charge includes any other water- or non-water
related operations (such as water use or electricity). These aspects are important to assess water
tariffs applied vis à vis operating costs. According to one of the respondents, commodity costs
(including water) are kept low as a strategy to attract more FDIs in the HIP.
BOTTLE NECK 2: ENVIRONMENTAL SUSTAINABILITY
To ensure reliable water use in the park, six deep boreholes were dug to abstract groundwater.
According to park managers and government experts, groundwater represents only 5-10% of the
water used in the park. The large bulk of water used in the HIP should be supplied by the ZLD-
reclaimed water. Some HIP tenants lamented that recycled water is only used for flushing toilets,
implying still larger reliability on groundwater sources. Moreover, groundwater is either free of
charge or included in the flat rate paid for other (also low) operation costs. In either case, the real
‘value’ of water is not calculated either to recover operational costs or taking into account
conservation issues.
BOTTLE NECK 3: TECHNICAL SUSTAINABILITY
The lack of technical capacity of local staff to manage the ZLD, and the poorly equipped laboratories
to conduct water quality analyses emerged as a technical capacity issue. Although several offices
(both in Hawassa and in Addis Ababa) have a laboratory, they lack the skills and tools to conduct
analysis tests.
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