TED Case Studies

Tijuana River Pollution





          CASE NUMBER:         147  
          CASE MNEMONIC:      TIJUANA
          CASE NAME:          Tijuana River Pollution

A.        IDENTIFICATION

1.        The Issue

     Sewage from Tijuana has been flowing into the Pacific Ocean
for over six decades. This became a serious problem in the 1960s
with the rise of the maquiladora program in 1965, which
encouraged migration to the Tijuana area.  The Pacific coast and
the Tijuana River Estuary have suffered as a consequence.  Trade
is related to this case in several ways.  The maquiladoras
directly and indirectly generate waste and sewage that pollutes
the environment.  The pollution also affects the tourist industry
in San Diego; the beaches and the estuary are unseemly places to
visit at times.  The important question in this and other cases
related to the U.S.-Mexico border is whether free trade will
encourage Mexico to clean up its environment or whether it will
degrade the environment further.

2.        Description

     The problem in this case is directly related to the economy
of Tijuana.  The concept of the maquiladora industry began in
1965 with the creation of the Border Industrialization Plan
(BIP).  The idea came from the success of "export processing
zones" in South Korea and Taiwan.  The attractiveness of the
maquiladora industry is that companies have access to relatively
low-cost labor and remain close to the U.S. market.

     During the 1960s, the sewage problem became unmanageable as
a result of the influx of people seeking work.  Both industrial
and human waste comprise the excess sewage.  This problem has
grown over the years along with the growth of the population of
Tijuana and the growth of the maquiladora industry.  The severity
of the problem dramatically increased when the number of
maquiladoras increased dramatically.  In 1983, the number of
maquiladoras numbered 140; in 1989, there were approximately 450
maquiladoras in the Tijuana area.  The number of workers was
19,239 and 60,000, respectively.  By January 1995, there were 529
maquiladoras employing 81,599 employees. (The City of Tecate,
also in the Tijuana watershed, has 92 maquiladoras employing
19,772 employees.)  The Tijuana treatment system is not able to
process all of the waste that is being produced.  Consequently,
approximately 13 million gallons of raw sewage spills into the
Pacific Ocean and flows up to San Diego County beaches.

     During the 1960s, the City of San Diego responded to this
problem by treating as much of the waste as it could.  In 1965 it
signed an agreement to treat the sewage.  The agreement expired
in 1985.  Annex I of The Border Environmental Agreements, signed
in 1985, was designed to replace the old arrangement. The new
agreement called for the construction of two new facilities.
Mexico decided to build a treatment facility in La Joya and the
U.S. decided to build a pipeline system and a treatment facility
on the U.S. side to support the La Joya facility in the event of
a breakdown.  The facilities were supposed to have been built
within 5 years but the second plant is not finished.

     The 1987 amendments to the Clean Water Act allowed
government officials to take vigorous steps to address the
problem (see CLEAN case).  Consequently, a multi-phased plan was
drawn up, outlining construction of the requisite facilities. 
The EPA and the City of San Diego are also planning to construct
facilities in San Diego County to improve treatment.

     The Mexican plant was completed in October 1991.  The plant
consisted of a treatment plant, conveyance channel, pressure
line, and pumping plant. The second plant in San Diego, the South
Bay International Wastewater Treatment Plant (ITP), which will
cost approximately $400 million to build, was supposed to be
finished by 1995 but now the completion date is set for February
1997.  (The completion date was changed in June 1995; the
previous completion date was December, 1996.)  When it is
finished, it will serve the Tijuana-San Diego area; it will be
able to handle up to 25 million gallons per day.  In addition, a
3.5 mile  tunnel will be constructed to dispose of the treated
waste in the ocean, which is scheduled for completion in May
1998.  (The completion date was changed in June 1995; the
previous completion date was February 1998.)  When completed, the
treatment processing facilities will be able to process the 13
million gallons of untreated sewage that enters the Pacific ocean
everyday.  However, the treatment plants will not be able to stop
sewage from overflowing into the Tijuana River Estuary when there
is an excessive discharge of sewage or when the river rises (see
Tijuana case).

     The project to clean up the Tijuana River is part of a
larger border clean up plan that addresses water, land, and air
pollution.  The plan to clean up the entire U.S.-Mexico border is
estimated to be completed by 2003 and could cost between $6.5
billion to $20 billion (see Table 147-1).

                          Table 147-1
                 Financing the San Diego Plant
     U.S. federal government       $239 million
     Mexico                        $16 million
     City of San Diego             $88-$140 million
     State of California           $5.3 million

     As a result of NAFTA, the maquiladora program will cease on
January 1, 2001 (see NAFTA case).  Existing duties on imported
parts and other trade restrictions will be eliminated.  In
addition, the number of companies choosing to locate in the
border area will increase because of the relative advantages
associated with being situated near the border.  The San Diego-
Tijuana area in particular expects to see an increase in the
number of manufacturing companies.  JVC is building a plant in
San Diego County on the border so that it can take advantage of
low wages yet be subject to U.S. jurisdiction.

     There are several trade-related issues in this case.  The
primary issue is the extent to which tourism in the City of San
Diego is impacted by the pollution in the Tijuana River Estuary
and the Pacific Ocean. The second is the extent to which
companies choose to locate in Tijuana to exploit the lax
enforcement of environmental laws.  The third is the effect of
the temporary halt in the project on trade.

     The severity of the problem is deceptively large.  The
beaches in San Diego County were closed almost the entire summer
of 1993 and Imperial Beach was closed for 200 days in 1993.  The
health risks are severe.  Anyone venturing into the Tijuana River
Estuary must be extremely careful as one risks getting
salmonella, shigella, fibrial, cholera, hepatitis A, and
malaria.  The City of Tijuana also suffers from a lack of proper
sanitation services. For example, Loma Taurina, a poor
neighborhood, has health hazards created by the untreated sewage. 
During severe storms untreated sewage spills into the streets.
Unfortunately, properly treating this problem will require an
amount of money far beyond the capacity of the City of Tijuana.

     The peso crisis in late December 1994 has put the project on
hold indefinitely because Mexico can not afford to pay the $16
million it pledged for the plant.  Nonetheless, the EPA
announced in March, 1995 that it would like to accelerate the
funding balance of the Mexico loan prior to completion of the
plant scheduled for early fiscal year (FY) 1997.  When the EPA
reaches its spending limit of $239 million for this project in
1997, the Mexico loan funds will finance the completion of the
project.

     The Tijuana River Watershed Management Project, which began
in late 1994, will attempt to determine the sources of pollution
and the effect the size of the local population has on the well
being of the watershed.  Both San Diego State University and
Colegio de la Frontera Norte are managing the project.

     The Border Environmental Cooperation Commission (BECC) was
created as a result of the NAFTA. It is designed to deal with
some of the environmental problems along the border. The BECC
will study current environmental problems and determine which
projects deserve more financing. The money will be administered
through NADBank (North American Development Bank). The first
meeting was held in late 1994 in Juarez, Mexico (next to El Paso)
but it was not a fortuitous meeting for those concerned with this
case.  Only one official from the City of San Diego attended and
no California governmental official attended; the BECC rebuffed
the California officials, so they did not attend.  The future
success of this project and others could depend on funding from
the BECC, so attendance at these meetings is essential.

     Another factor relevant to this case is that no one knows
the composition of the pollution that flows from the Tijuana
River to the Pacific Ocean. On May 30, 1995, the City of San
Diego began testing the sewers in Tijuana to figure out the
composition of the pollution.  The city wants to find out which
maquiladoras are dumping their waste into the Tijuana sewers. 
The results of this test will allow the BECC to pursue
enforcement measures on specific maquiladoras.

3.        Related Cases

     NEW case
     NAFTA case
     BORDER case
     BASMEX case
     KHAIN case
     MIGRATE case

     Keyword Clusters

          SIC                      = TOURism
          Impact                   = MEXICO
          Environmental Problem    = Pollution Sea [POLS]

4.        Draft Author:  Ted Pauw

II.       LEGAL Cluster

5.        Discourse and Status: AGReement and INPROGress

     The United States  and Mexico have worked together for many
years to solve this problem.  The two countries signed the Border
Environmental Agreements in 1983.  This agreement addressed a
host of border environmental problems.  The 1983 agreement allows
both countries to "prevent, reduce, and eliminate sources of air,
water, and land pollution in a 100-kilometer wide zone along each
side of the boundary."  For the first time in their working
relationship on environmental issues, the two countries defined
the principal goals for environmental problems on the border.

     Annex I, which was signed on July 18, 1985, is directly
related to this case. It called for the development of treatment
facilities.  Annex III, which was signed on November 12, 1986
also has importance in this case.  It concerns hazardous waste
created by maquiladoras.  According to Mexican law, hazardous
waste created at the maquiladoras by raw materials from the U.S.
must be returned to the U.S. This annex assists this process. 
Only in the last few years have the two countries been able to
improve their tracking of the waste that needs to be returned to
the U.S. Some of the waste which is unaccounted for ends up in
the deserts in the surrounding area and some of it ends up in the
Tijuana River (see TIJUANA case).

     Currently, Annex I of the 1983 agreement has legal 
jurisdiction of this case, regarding  the construction of the
treatment facilities.  NAFTA governs the cross-border pollution
relating to the maquiladoras in the Tijuana area.  However, it is
a weak environmental document because it does not provide for
rigorous enforcement. It calls for countries to "consider
implementing in its law any recommendation developed by the
Council under Article 10(5)(b)" and to "consider prohibiting the
export to the territories of the other Parties of a pesticide or
toxic substance whose use is prohibited within the Party's
territory."  This wording allows for countries to virtually
ignore environmental concerns.  Further, the NAFTA's provisions
can be used only if Mexico's laws which deal with pollution are
not being enforced.  In addition, the U.S. must provide evidence
that "there has been a persistent pattern of failure to enforce
those laws."

6.        Forum and Scope: NAFTA and BILATeral

7.        Decision Breadth: 2 (Mexico and USA)

8.        Legal Standing: TREATY

     The Border Environmental Agreements 1983, Annex I is the
principal document but there are an assortment of laws in both
countries that affect this case.  First, both countries "enact,
develop, implement, and enforce their laws, regulations, and
standards within different legal systems and frameworks."  The
U.S. system is built on a tradition of common law.  Mexico's
system is built on civil law, which relies less on the judiciary
for developing and interpreting the law.  The primary difference
between the two systems is that enforcement, principally, lies
within the executive branch in the Mexican system, whereas, in
the U.S. system, the judiciary is much more involved in
enforcement.

     Mexico passed the 1988 General Ecology Law which covers 
maquiladora-related pollution.  In the United States, the
following laws are relevant: the Resource Conservation and
Recovery Act, concerning hazardous waste, the Toxic Substances
Control Act, Section 11 can be used to issue subpoenas to obtain
information from companies regarding chemical ■use and release■,
the Migratory Bird Treaty Act, and the Endangered Species Act
(see MIGRATE case).

III.      GEOGRAPHIC Clusters

9.        Geographic Locations

     a.  Geographic Domain:   North America [NAMER]
     b.  Geographic Site:     Western North America [WNAMER]
     c.  Geographic Impact:   MEXICO

     The pollution is a local problem confined to the San Diego-
Tijuana area.  The pollution primarily affects the coastal
beaches but it affects the Tijuana River also (see SANDIEGO
case).  The sewage and pollution flows from the City of Tijuana
down the river and into the ocean at Imperial Beach. The river is
part of a 1,735 square mile watershed.  The watershed rises from
the Pacific Ocean to a level of 5,500 feet above sea level; it
includes farms, pine forests, and coastal shrubs.  About 73
percent of the watershed is in Mexico and 27 percent is in
California.  Tijuana and San Diego are located in the same
atmospheric basin; runoff from the Tijuana River flows northward
into the Pacific Ocean; the production of pollutants in each city
affects the other.

10.       Sub-National Factors: YES

     California state law is also relevant.  It has numerous laws
which cover a wide variety of environmental issues pertinent to
this case. The San Diego Area Management District Act 1994
established a management district to clean up the water in
southern San Diego County.  The Fish & Game Code section 5650
relates to pollution of water "where it can pass into waters of
this State"; this has direct implications for this case.  The
Fish & Game Code section 7710 provides for the protection of
endangered species.  Health & Safety Code section 5410 covers
sewage and other waste.  The Bay Protection and Toxic Cleanup Act
of 1989 protects wildlife and calls for the clean up of toxic
waste in estuaries.

11.       Type of Habitat: DRY

IV.       TRADE Clusters

12.       Type of Measure:  Regulatory Standard [REGSTD]

     This case is unusual in that there are no ■traditional■
trade barriers used to try to curtail this activity.  The
pollution of the Tijuana River Watershed and the Pacific Ocean is
caused by a lack of proper sanitation facilities in Tijuana and,
partly, by the activities of the maquiladoras in the Tijuana
area.  The regulatory standard in this case is an informal one.
The idea is that the tourist industry in San Diego County suffers
because of the polluted beaches, so the tourists regulate the
activity by not spending their tourist dollars in San Diego
County. This regulation is not having a direct impact on the
volume of tourism generated in the county as a whole. The revenue
generated from tourism in San Diego County was $3.1 billion in
1990 and $3.6 billion in 1994.  However, the fact that Imperial
Beach has experienced a reduction in tourist dollars has served
as an impetus to find a solution for the problem.

     Another aspect of tourism is the potential for recreational
activity in the Tijuana River Watershed.  A thriving wildlife
area in the San Diego-Tijuana area would add to the appeal of the
area.  Further, cleaning up Tijuana and increasing the economic
integration of San Diego and Tijuana would add to the tourist
potential of the area also.

13.       Direct vs. Indirect Impact: DIRect

14.       Relation of Measure to Impact

     a.  Directly Related:    YES  WATER
     b.  Indirectly Related:  NO
     c.  Not Related:         NO
     d.  Process Related:          YES  Pollution Sea [POLS]

15.       Trade Product Identification: TOURism

     The principal product concerning this case is tourism.  
Tourism in California is about an annual $7 billion industry. 
Consequently, people can easily choose to visit the beaches in
Monterey, Newport, or Malibu, California, for example.

     The second product in this case concerns the products
produced by the maquiladoras.  The maquiladoras produce
electronic materials and supplies, manufactured products,
transportation equipment, petroleum products, plastics, metal-
related products, and medical supplies. The third product
concerns all relevant materials used in the construction of the
sewage system.

16.       Economic Data

     The issue that makes this case interesting is the fact that
the economic issues related to it are varied.  U.S. engineering
and construction companies are affected by the pollution.  The
creation of the Tijuana plant will cost approximately $400
million.  The engineering and construction companies will export
their products and services, thereby generating a great deal of
trade.  However, the recent peso crisis has put the construction
of the Tijuana plant on hold indefinitely.

     The maquiladora industry generates over $10 million monthly.
This level of economic activity also generates a migration of
Mexican workers to the area, further taxing the sewage treatment
system.

17.       Impact of Trade Restriction: LOW

     The impact of the trade restriction provides an impetus to
clean up the pollution. In the long run, the players involved
will clean up the pollution and this can only help make San Diego
County a more attractive tourist destination.

     Regarding the maquiladora industry in Tijuana, the impact of
the regulation has been negligible. The maquiladora industry is
regulated by a set of laws and agreements which are associated
with the NAFTA.  Since the implementation of the NAFTA in January
1994, the impact of these regulations has been low.  In addition,
the growth of maquiladoras is expected to continue.  Tijuana
produces the largest number of televisions in the world.  This is
due to low wages and proximity to the U.S. market.  The companies
located in Tijuana have a great economic incentive to remain in
Tijuana.  For example, Sony is planning an expansion of their
factory in Tijuana.

18.       Industry Sector: TOURism

19.       Exporters and Importers: MEXICO and MANY

V.         ENVIRONMENT Clusters

20.       Environmental Problem Type: Pollution Sea [POLS]

     There are several aspects to the problem. The primary
problem is the pollution of the sea.  The EPA finds itself in a
paradox.  A treatment facility is needed in San Diego to help
process the sewage in Tijuana but the proposed site could
endanger several animals.  Construction of the facility could
threaten the Pacific Pocket Mouse (though the EPA is not positive
that it lives at the proposed site), the California Least Tern,
the Clapper Rail, and the Least Bell's Vireo.  Delaying the
construction of the facility allows the Tijuana River to remain
polluted and the Pacific Ocean too, endangering other species. 
In the future, the pollution problem could possibly affect
plankton-eating fish in the ocean but to date there is no
conclusive evidence of this.  Scientists will need to conduct
additional studies to discover whether other species are being
harmed by the pollution.

21.       Name, Type, and Diversity of Species 

          Name:          Many
          Type:          Many
          Diversity:     4,569 higher plants per 10,000 km/sq
                              (Mexico)

     There are not any species in the ocean that are endangered
as a result of the pollution but there are some threatened that
live in the Tijuana River Estuary.  The Tijuana River Estuary
comprises 20 percent of all the wetlands in Southern California.
There are at least 29 species of fish and 298 species of birds
live in the estuary, a few of which are endangered.  The Pacific
Pocket Mouse is an endangered species but it is not clear whether
the mouse lives in the area relevant to this case.

22.       Impact and Effect:  LOW and REGULatory

23.       Urgency and Lifetime: LOW and 100s of years

24.       Substitutes: Biodegradable [BIODG] products

     On the one hand, the sewage pollution has no substitutes; it
must be treated. On the other hand, the pollution from the
maquiladoras could possibly be reduced by substituting
environmentally safe products.  However, it is unclear what
materials would provide adequate substitutes for each specific
maquiladora because a comprehensive report has not been done on
this subject.  Suffice to say that traditional substitutes for
the electronic industry, petroleum industry, et. al. would be the
first substitutes that could be tried.

VI. OTHER Factors

25.       Culture: NO

26.       Trans-border: YES

27.       Human Rights: YES

     Some people living in the colonias in and around Tijuana are
exposed to dangerous levels of toxins.  Their drinking water is
polluted. In the hospitals in San Diego County, cases of
tuberculosis have increased.  Women on both sides of the border
are giving birth to children which are deformed; some are born
without brains; some have deformities; and some are retarded. 

28.       Relevant Literature 

Aspin, Chris.  "U.S.-Mexico Face Tough Border Pollution Cleanup,"
     Canadian Financial Report, (August 23, 1993).
Bernal, John.  "Prepared Statement of John M. Bernal,"
     Department of State, (March 27, 1995).
Bureau of National Affairs, Inc., "Companies Contemplate Options
     in Wake of Subpoena for New River Chemical Data", BNA
     California Environment Daily, (October 24, 1994).
Burns, Melinda.  "U.S., Mexico Reported Set To Sign New Pact To
     Cut Border Pollution", Los Angeles Times, (July 17,
     1985).
Dibble, Sandra.  "A Wathershed Border Event, Literally and
     Figuratively" San Diego Tribune-Union, (November 30,
     1994).
Greenwire.  "Selenium: Farm Runoff Causing Wildlife Deaths in
     CA", Greenwire, (May 2, 1995).
Klimko, Frank.  "Sewage to Keep South Beaches Closed For Now",
     San Diego Tribune-Union, (April 29, 1995).
Kraul, Chris.  "Peso Turmoil Stalls Construction Gold Rush Along
     Border", Los Angeles Times, (March 13, 1995).
Lavelle, Marianna.  "Poisoned Waters Provide Early Test for
     NAFTA", The National Law Journal, (March 21, 1994).
Loftis, Randy Lee.  "Mexico Pushing Environmentally Conscious
     Image; It's NAFTA -- Inspired Hype, Pollution
     Investigator Says, But There's Some Real Progress", The
     Gazette, (December 31, 1993).
Marx, Wesley.  "The Southern California Bight: Where Traditional
     Approaches Don't Work", EPA Journal, November, 1990.
Office of the President, The NAFTA Supplemental Agreements, 1993.
Reuters.  "U.S. Announces Plan For Mexican Border Clean-up",
     Reuters, (February 25, 1992).
Robberson, Tod.  "Mexicans Say Cleanup of Border Imperiled:
     Session Today to Take Up NAFTA Obligations", The
     Washington Post, (May 16, 1995).
Salopek, Paul.  "Fragile California Refuge Threatened by Mexican
     Sewage", El Paso Times, (June 7, 1991).
San Diego Tribune-Union.  "Notably Absent California Misses
     Meetings On Border Problems", San Diego Tribune-Union,
     (December 8, 1994).
San Diego Tribune-Union.  "Of Mice and Mosquitoes The Endangered
     Species Act Goes Too Far", San Diego Tribune-Union,
     (May 14, 1995).
Secretaria de Desarrollo Urbano y Ecologia (SEDUE), "Integrated
     Environmental Plan for the Mexico-U.S. Border Area",
     1991.
Tackett, Jeff.  "US-Mexico: San Diego to Start Testing Tijuana
     Sewage", Greenwire, June 6, 1995.
Twin Plant News, "Maquiladoras", 1995.
United States Council of the Mexico-US Business Committee,
     Analysis of Environmental Infrastructure Requirements
     and Financing Gaps on the US-Mexico Border, 1993.
U.S. Department of Commerce, Maquiladoras & the North American
     Free Trade Agreement, Washington, DC, 1995.
United States Environmental Protection Agency, EPA Summary
     Environmental Plan for the Mexican-U.S. Border Area
     First Stage (1992-1994), Washington, DC, 1992.
United States Environmental Protection Agency, Evaluation of
     Mexico's Environmental Laws, Regulations, and
     Standards, Washington, DC, 1993.
United States General Accounting Office, Pesticides: Comparison
     of U.S. and Mexican Pesticide Standards and
     Enforcement, 1992.
United States International Trade Commission, Production Sharing:
     U.S. Imports Under Harmonized Tariff Schedule
     Provisions 9802.00.60 and 9802.00.80, 1989-1992,
     Washington, DC, 1994.
West Publishing Co., West's Annotated California Codes 1995
     General Index T to Z, (St. Paul, Minn.: West Publishing
     Co., 1995), 551-563. 
World Resource Institute, World Resource 1994-1995: A Guide to
     the Global Environment, (New York, Oxford University
     Press), 1994.
World Wildlife Fund, The Official World Wildlife Fund Guide to
     Endangered Species, Vol. 1 & 2, Beacham Publishing Co.,
     Washington, DC, 1990.

                          References




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