Reckoning the circumference of ASEAN’s Circular Economy Framework

The ‘take, make, dispose’ approach that formed the bedrock of the linear economy has come under scrutiny with a growing focus on circular economy. With countries moving to build their own capabilities, regional groupings too have sought to address the issue collectively. As such, the Association of Southeast Asian Nations (ASEAN) has launched the Framework for Circular Economy for the ASEAN Economic Community that chalks out a path for environmentally sustainable economic development.

The Framework, viewed as a culmination of ASEAN’s policy interest in the area, has three goals – resilient economy, resource efficiency, and sustainable growth. It forethoughtfully expands the scope of ‘circular economy’ to include areas such as trade facilitation, digitalization and emerging technologies. Its Guiding Principles recognize ASEAN member states’ individual circumstances and encourage region-wide coordination on knowledge sharing. A working paper by ACI analyses the Framework and addresses its shortcomings. It finds that the Framework’s conceptualization and operationalization remain unclear. The Framework does not delineate “how its strategic priorities and principles will lead to a new economic model for the region” and how this will be operationally synergized with other ongoing ASEAN initiatives. It also lacks specific business-support schemes which further poses a challenge for the Association to convince its citizens and businesses of the seriousness of its efforts.

The authors make a number of recommendations to address the issues. First, the action plan and the deliverables should be based on ongoing policy developments in the member countries. Second, this requires a comprehensive understanding of each member state’s policy landscapes as well as their technical, institutional and, financial capabilities. Coordinating a regional response, given the disparate circumstances and capabilities of each of the member states, will be challenging but not impossible to implement. Third, to this effect, the authors suggest drawing lessons from the experiences of the European Union’s (EU) circular economy journey. Finally, they make proposals for ASEAN for short-term and medium-term.

The research examines Singapore, Vietnam and Indonesia as case studies to understand circular economy approaches in ASEAN. Their conceptualizations of the issue are similar owing to the common environmental and sustainability challenges faced by the three countries. Their policy discourses and implementation efforts however, differ depending on each country’s technical and institutional capabilities.

Indonesia’s policies on circular economy are guided by Waste Management, which ironically is underfunded. Despite the grave importance, there is no single central agency present that oversees monitoring and implementation of circular economy policies in the country. This in turn deters private sector interest in the area. Vietnam, on the other hand, has enacted laws and passed resolutions to give a solid shape to their circular economy approach. Their Ministry of National Resources and Environment coordinates and administers circular economy policies such as outline corporate responsibilities for waste management, reduce marine plastic waste and implement Extended Producer Responsibility (EPR). Vietnam’s inability to leverage financial capital, however, remains a key challenge for the country. Singapore, by far, has the most extensive ecosystem of policies to foster circular economy, among the three member states. The Singaporean approach to circular economy is firmly conceptualized and highly centralized with the Ministry of Sustainability and National Environment Agency overseeing circularity issues. The country has no dearth of technical and financial capacities to support its policies. The main challenge, however, is the poor public participation rates in its efforts to transition towards a circular economy. This, the authors contend, is partially due to lax awareness of ‘how to recycle’ among its citizenry.

While each of the member states faces a different implementation challenge, they share a similar understanding of the circular economy. EPR framework stands out as a common theme in the three countries’ circular economy journey. This is important when it comes to coordinating efforts at the regional level. Recognizing the structural differences between the two groupings, the authors believe that the EU experience holds important lessons for ASEAN in this regard. First, the EU has rightly focused on developing a regional EPR policy – one which provides ample financial incentives for producers. Second, it has adopted a holistic monitoring framework to measure the performance of its member states and the EU as a collective. Third, turning focus to the SMEs, EU has sought to strengthen their capabilities to better embrace circular economy practices. Financial institutions, too have extended support to the SMEs seeking circularity. Borrowing from the EU’s example, the authors set out proposals for ASEAN. They recommend establishing a similar monitoring framework, starting with a modest scope – assessing the performance of specific waste streams in specific cities – before working towards more extensive efforts. They emphasize the importance of incentivizing producers and, informing consumers through coordinated public campaigns. They also propound provision of support – technical advice and supportive services – for SMEs adopting circular economy practices. This is imperative given their dominance in the ASEAN’s business landscape.

Companies, countries and regional collectives alike should adjust their myopic visions of economic growth and work towards reducing their environmental impacts. To that effect, ASEAN must synergize the efforts of its member states to formulate an action plan for the region. It is prudent to start small and focused and, progressively expand these initial efforts in the long term as region’s capabilities improve.

By Shubhangi GUPTA

Researchers: CHEN Xian An, Kevin, Say Jye QUAH, Hanh PHAN, Yijia HUANG, Janitra HARYANTO

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