1. Introduction
1.2 Research question and design
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the economic and regulatory environment in Taiwan’s heavy industries more generally. The green potential of steel production also makes this industry the perfect target for research into corporate social responsibility (CSR) – unlike other heavy industries with no examples of cutting-edge green innovation.
As early as 2011, a small number of steel manufacturers in Europe have been certified Cradle to Cradle (C2C)1. C2C describes a manufacturing system involving only two types of materials: biodegradable materials (which can be returned to the “biological cycle” without harm) and materials that can be recycled infinitely (within a closed-loop “technical cycle”) without degrading in quality or producing negative externalities (like waste). The creators of C2C see this model as a way of revolutionizing the manufacture of all goods in a sustainable future. So while Taiwan’s small- and medium-sized enterprises (SMEs) might be far from the C2C ideal, that path has already opened to them through the example of others.
Generally speaking, the melting down of scrap material in small-scale electric arc furnaces (EAF) can produce steel for re-use while maintaining quality – an insurmountable hurdle in most plastics and paper recycling. The key environmental setback for most steel firms has to do with waste management. Still, steel (as a “nutrient” in the technical cycle) offers an exciting glimpse into a sustainable future. Iron and steel are the most recycled materials on earth and form the structural basis of new sustainable technologies (e.g., efficient vehicles, green buildings, alternative energy). Moreover, Taiwan has already earned an international reputation for sustainable steel production in the likes of China Steel, one of the oldest industrial giants on the island. The combination of momentum and potential from within society, within public sector environmental protection agencies and within the industry itself makes sustainable steel an exciting topic of research.
1.2 Research question and design
Understanding how companies make decisions about environmental investment helps gauge their level of commitment to environmental causes. Also, different stakeholders in society want to influence this decision-making process, and some of their strategies enjoy more success than others. This study asks the following question: To what extent do sector-based pressures (i.e., influence from the public, private and voluntary sectors) impact upgrades of environmental
1 See http://www.sustainableinsteel.eu/p/544/cradle_to_cradle.html
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technologies and practices in Taiwan’s contemporary steel industry? In other words, this research organizes pressure on the EAF firm into three basic groups: pressure arising from government, from industry, and from civil society (communities, independent academia, the media). Then I tried to ascertain which kind of pressure has the greatest impact on companies.
Admittedly, these sector-based categories are not isolated wells of influence. Agents from multiple sectors often interact and cooperate on environmental initiatives, as the growing
literature on public-private partnership can attest. For example, lawmakers may speak at press conferences organized by environmentalists, or experts from academia may test water sources for pollution and government agencies may rely on their data. To prevent any confusion, this categorization scheme focuses on the pressure point each sector can control. When water pollution data from voluntary sector experts forms the basis for a government fine, then this initiative belongs with the public sector. When the same data becomes the basis of a civil lawsuit, its influence emanates from the voluntary sector. The literature review includes a more in-depth explanation of stakeholder groups and tactics.
The primary unit of analysis for this research is small and medium-sized steel companies in Taiwan that use EAF. According to the Taiwan Steel and Iron Industries Association (TSIIA), EAF technology is the primary source of environmental impact from the steel industry in
Taiwan, particularly with regard to waste management and air pollution issues. Thus, I distributed a detailed survey to the entire population (according to TSIIA records) of 21 EAF steel manufacturers. Since my list of EAF companies comes from an official source, however, this study does not incorporate data from “underground” companies, which operate illegally and beyond the present monitoring capacity of private- and public-sector regulators. Although I did not come across evidence to suggest that this kind of EAF facility exists, interviews with current public officials and environmental studies experts highlighted this general phenomenon. These underground plants, they asserted, cause more environmental damage than their lawful
counterparts.
The survey asks for an inventory of EAF-related environmental technologies and practices based on the 2013 Best Available Techniques (BAT) reference document released by
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the European Commission.2 In addition, the survey measures corporate perception of pressure from pro-environment agents in each sector. I received a total of five complete responses from a pool of six total responses (not including China Steel), which amounts to about a 23.8% success rate. Since few companies responded, the large number of variables in the survey limits its usefulness as an instrument for unearthing trends in corporate decision-making. For such a small number of cases, it would have been better to operationalize fewer variables.
Another possible limitation of the survey is that companies might only participate if they feel secure about their environmental record. Fearing a potential public relations fallout after their responses reach the public, polluting firms might keep quiet about their activities. To try and counteract this bias, as well as to make up for the disappointing participation rate and better understand my topic, I also conducted in-depth interviews. I spoke with members of the public, private and voluntary sectors as well as academics before and after survey distribution. This report especially relies on 16 interviews with members of the voluntary sector (environmentalist groups and academics), steel industry representatives, government officials and industry
consultants.
These interviews helped diversify the operationalization of survey variables by sector (e.g., emissions standards, enterprise environmental protection awards, and voluntary programs in the public sector) as well as explain intervening variable impact on firm upgrades (i.e., the impact of routine manufacturing upgrades). By casting a wide net to accumulate data from all sectors, this study seeks to employ the methodology of political ecology studies described by Little (2007). This method incorporates four main analytical tools/principles: an identification of socio-environmental actors (agents from the social and natural world), an emphasis on
relationships, exploration of context, and focus on internal dynamics (procedures and/or flows of resources or lines of command).
To satisfy the requirements of this analytical paradigm, the environmental governance segment of this report details the socio-environmental actors involved in EAF steel production in Taiwan, from the ecological and technical context of EAF steel production — its impact on the natural world and the components of an optimal environmental investment scheme — to the
2 Taiwanese environmental protection agencies use this same document to advise industry and craft regulatory policy for EAF facilities. The BAT serves as a kind of green manufacturer’s wish list and includes the latest technologies designed to minimize the impact of production.
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private, public and voluntary sectors whose activities impact (and are impacted by) corporate decisions to implement EMS. Next, the literature review section explores legitimacy theory, stakeholder theory, and other viable explanations for why firms engage in (or avoid) developing their EMS. Finally, the results and discussion sections organize the feedback from surveys and interviews in light of the preliminary research.
Importantly, this study does not succumb to the critique levied by Vayda and Walters (1999) against early self-styled political ecologists; these researchers apparently begged the question by assuming that organized politics had a key role to play in environmental change, and then they set out to prove it. In fact, unlike many studies in the field of political ecology, this research tackles a relatively uncontroversial issue in Taiwan’s contemporary political scene – despite the important impact EAF steel production can have on public and ecological health. The following section about the significance of the research discusses this further.