Chapter 1 - The background for the strategy, Danish Environmental Protection Agency

Danish strategy for environmental assistance to Eastern Europe 2001-2006

Chapter 1 - The background for the strategy

The revision of the 1993 strategy

Experience from previous environmental assistance programmes

I This strategy for the Environmental Assistance Programme replaces the strategy of October 1993: "International Environmental Assistance under the Environmental and Catastrophe Framework - Subsidiary Strategy regarding Environmental Programmes in Eastern and Central Europe" (International Miljųbistand under Miljų- og Katastroferammen - delstrategi vedrųrende Miljųindsatser i Ųst- og Centraleuropa). The programme is administered by the Ministry of the Environment and Energy, the Danish Environmental Protection Agency.

The programme forms part of Denmark's international measures under the Environmental, Peace and Stability Framework (MIFRESTA), formerly the Environmental and Catastrophe Framework (MIKA)⁽¹⁾. Environmental assistance is part of the overall assistance to Eastern Europe. The general co-ordination of Danish assistance to Eastern Europe is carried out in close collaboration between the Ministry of Foreign Affairs and the Ministry of Finance. The work is carried out with the help of interministerial committees such as the InterMinisterial Eastern European Committee, (TMŲ)⁽²⁾ and the International Expenditure Committee⁽³⁾, which refers to the government's Financial Affairs Committee.

Over and above the Environmental Assistance Programme, Danish environmental assistance to Eastern Europe under the Environmental, Peace and Stability Framework includes the following measures, which primarily pertain to the Baltic Region:

Sector-Integrated Environmental Programmes⁽⁴⁾ within the energy, agriculture, transport and industry sectors, including the working environment. These measures are administered by the Ministry of Labour, the Ministry of Housing and Urban Affairs, the Ministry of Trade and Industry, the Danish Energy Agency, the Ministry of Food, Agriculture and Fisheries, the Ministry of the Interior (the Emergency Management Agency), the Ministry of Transport and the Ministry of Education, and are coordinated by the Danish Environmental Protection Agency.

The Environmental Investment Facility for Eastern European Countries (MIŲ) under the Investment Fund for Eastern Europe, which is designed to help improve the environment in Central and Eastern Europe by co-financing joint venture projects in the private sector of particular relevance to the environment. The programme is administered by the IŲ Fund.

The Environmental Credit Programme for Eastern Europe (MKŲ), based on favourable export credit principles. Its purpose is to promote investments in the Eastern European countries through long-term, subsidised environmental credit schemes. The scheme is administered jointly by the Export Credit Fund (EKF) and the Danish Environmental Protection Agency.

The Advisory Committee for the Danish Enviromental Assistance Programmes for Eastern Europe assists the Danish Environmental Protection Agency in describing the purposes of the assistance programmes, drawing up administrative guidelines, the technical prioritisation of the recipient countries and areas where measures will be undertaken, and takes part in an ongoing evaluation of the measures performed. The committee's secretariat function is handled by the Danish Environmental Protection Agency.

The revision of the 1993 strategy

The revision was necessary not least because of the political developments of the last eight years in Eastern Europe, including the EU enlargement process, the reconstruction of the Balkans and developments in the CIS countries.⁽⁵⁾

Based on the experience derived from administering the Environmental Assistance Programme, 1993-2000, in revising the strategy an effort has been made:

to strengthen and define the general framework for measures under the Environmental Assistance Programme,
to create a basis for updating and revising the Country Programmes for the individual co-operating countries, and to clarify the objectives within the prioritised areas where measures will be undertaken.

The strategy must also help to create the general strategic guidelines for the sector-integrated environmental programmes, the Environmental Investment Facility for Eastern European Countries (MIŲ) and the Environmental Credit Programme for Eastern Europe (MKŲ).

The point of departure for the strategy for 2001-2006 is the Danish government's Eastern European assistance strategy: "The government's general strategy for Eastern European Assistance - with particular emphasis on the Baltic, from 1997 (the so-called East Initiative for the period 1998-2001). This gave priority to the Baltic Region, that is to Poland, Estonia, Latvia, Lithuania and the neighbouring Russian areas.

As the government's strategy is now being revised, and as the strategy for the Environmental Assistance Programme is part of the general strategy, it may be necessary to subsequently adjust environmental strategy in the light of this revision. The Environmental Assistance Programme will continue to be an integral part of Danish Eastern European assistance and is described in, among other places, the collected Country operational programmes published by the Ministry of Foreign Affairs.⁽⁶⁾

The strategy incorporates the Folketing's resolution V 79, passed on 4 May 1999. Here, the Folketing once again confirmed the decision to focus on the Baltic Region, on assistance to EU preaccession countries' preparations for EU membership and on a greater effort in the CIS countries, and in this connection encouraged the government, inter alia, to strengthen efforts to ensure that international agreements on the environment are complied with and, on behalf of the environment in the recipient countries, to support including the general public in decisions concerning the environment.

The Folketing's resolution V 101, passed on 22 May 2000, subsequently emphasised the need to reinforce efforts designed to ensure that international agreements on the environment are complied with, including securing the necessary financing of work carried out under conventions, and the effort to realise the other recommendations in V 79 regarding environmental assistance. The Folketing's resolution V 30, passed on 30 November 2000, established the importance of maintaining the momentum of the enlargement process, especially for the EU candidate countries, and of environmentally sustainable development through, inter alia, Danish environmental assistance"… by helping to ensure that possible transitional schemes are as brief as possible. For this purpose bilateral environmental assistance to Central and Eastern Europe relating to EU approximation should be strengthened, as should the effort to incorporate environmental considerations in the most important growth sectors (agriculture, energy and transport)".

Finally the Danish Strategy for Environmental Assistance to Eastern Europe incorporates relevant results and recommendations from the Public Accounts Committee's report on Eastern [European] Assistance from 1999 and the external evaluation of the Environmental Assistance Programme, which was completed in October 1998.⁽⁷⁾

Experience from previous environmental assistance programmes

The new strategy for the Environmental Assistance Programme builds upon the considerable amount of experience gained from the previous environmental assistance programmes, and identifies some necessary adjustments which can be summarised as follows:

More long-term planning, over a three-year programme period, for example, of Danish environmental assistance to the co-operating countries would improve the opportunity for the effective and advance co-ordination of Danish efforts in connection with the co-operating countries' national plans, including other Danish programmes and the efforts of other multilateral and bilateral donors.

Flexibility in Danish environmental assistance, especially the fact that it has been possible to rapidly establish Danish assistance when new needs arose in countries, has been significant for the results achieved through Danish assistance. This flexibility must be maintained in the transition to a more longterm approach to planning Danish environmental assistance.

Focusing Danish environmental assistance on a maximum of three to five sectors in each co-operating country would enhance the effect and sustainability of Danish assistance. This, combined with the parallel country programming, would provide a better basis for making decisions in connection with the current and future need for assistance in the selected sectors, including legislation, institutional capacity, economic and financial conditions, relevant stakeholders and other donors.

Projects designed with a "vertical approach" including the political framework, legislation, institutional capacity, and economic and financial conditions has had the greatest penetration and sustainability in the recipient countries. Projects which focus on the implementation of EU Directives and international conventions have been more operational and have provided more well defined projects.

A more systematic development of the countries' capacity to develop and implement realistic financing strategies and investment plans would strengthen the efforts of environment ministries to attract financial support for the environmental area. In addition these tools can increase the efficiency and sustainability of the investment projects that international financing institutions and donors help to develop and cofinance.

The experience gained from the concrete efforts supported by Denmark to phase out substances that deplete the ozone layer and the phasing out of lead in petrol should constitute the basis for similar concrete initiatives in connection with other groups of chemicals such as persistent organic pollutants (POPs), so that the relevant experience can be passed on to similar model projects in other countries.

Assistance has to a great extent been given to the authorities' implementation of the EU environmental acquis in the industrial sector (in particular relating to the IPPC Directive) in order better to control the environmental impact of industry. Concrete demonstration projects in the field of cleaner technology have directly involved the private sector. Experience has shown that to a considerable extent donors can create incentives and build capacity in the private sector for more environment friendly operations. However, it is a clear precondition that the environmental authorities have a parallel capacity to issue and enforce framework conditions for industry.

Experience has shown that Danish supported projects with considerable national co-financing, or "in-kind" contributions have greater national ownership and a better chance of being continued by the countries themselves when project support is discontinued. Continued focus on significant national cofinancing is therefore necessary when considering each country's situation with regard to economy and resources.

Finally, experience has also shown that the use of Danish assistance as a lever to acquire international loan or grant financing has generally had a very positive effect in connection with carrying out more comprehensive investments.

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A new waste water treatment plant in Krakow, Poland. In the background the Huta Sendzimira - the second largest steelwork in Poland.

Target groups

The target group for the present strategy is the overall group of Danish stakeholders who are involved in the direct or general co-ordination of environmental assistance programmes: The Folketing, the Ministry of Finance, the Ministry of Foreign Affairs and its embassies, the Ministry of Environment and Energy, and all other ministries that are directly responsible for or involved in the performance of sector programmes in Eastern Europe, as well as the Advisory Committee for the Danish Environmental Assistance Programme.

Another target group is all the stakeholders in the environmental area in the co-operating countries, including recipient countries' environment ministries as the immediate collaborators, potential Danish project holders, including consultants, companies, institutions, NGOs, counties and municipalities and their local partners in the cooperating countries.

Other bilateral and multilateral donor organisations and international financing institutions have also been considered as target groups.

The strategy must create a framework for future efforts under the Environmental Assistance Programme and, together with the individual Country Programmes, increase the visibility of Danish environmental assistance in the co-operating countries. Furthermore, in the light of the many stakeholders in Eastern Europe, the strategy should promote a more synergistic effect and improved co-ordination between them.

Structure

The strategy is composed of sections which describe the background, introduction, general objectives, and priority areas where measures will be undertaken (including the sector- integrated environmental measures), and the implementation of the strategy.

The strategy is formulated into Country Programmes, where the level of detail for measures to be undertaken in each country is established. The plan is to prepare Country Programmes on an ongoing basis over the coming year for all co-operating countries and for selected regional measures.

Together with the Country Programmes, this strategy and the Project Cycle Management Manual⁽⁸⁾ will constitute the foundation for the Environmental Assistance Programme for Eastern Europe.

^1.	The Environmental and Catastrophe Framework (the MIKA Framework) was established as part of the budget agreement of 1993 on the basis of Report on the Proposal for a Resolution by the Folketing on global environmental and catastrophe aid (B 2) submitted by the Folketing's Foreign Affairs Committee on 18 December 1992. More detailed guidelines were subsequently established in White Paper no. 1252 on Denmark's International Measures (1993). Among the objectives proposed in the White Paper was that the MIKA Framework should comprise 0.5 % of GNP in the year 2002. In 1998 the phasing in of the MIKA Framework at 0.5 percent of GNP was changed to the year 2005 in pursuance of the altered GNP basis from 2000. The government's statement of 14 January 1999 on the previous use of the Environmental and Catastrophe Framework and the future use of the Environmental, Peace and Stability Framework constitute the present basis.

^2.	The Inter-Ministerial Eastern European Committee comprises all the ministries and governmental administration departments, etc., that administer Danish aid to Eastern Europe. The Ministry of Foreign Affairs performs the chairmanship and secretariat functions and the committee is responsible for technical and professional co-ordination between the various measures.

^3.	The International Expenditure Committee is an inter-ministerial committee that, under the chairmanship of the Ministry of Finance, prepares the annual implementation of appropriations for the Eastern European assistance programme and the distribution of funds between the areas and sectors where measures are undertaken.

^4.	Sector Integrated Environmental Measures are covered by the Ministry of Finance's "General Guidelines for Sector Programmes in Central and Eastern Europe", September 1999.

^5.	CIS: union of new, independent states (Sojśs Nesavismajich Gosudérst). The CIS countries comprise Russia, Belarus, Ukraine, Moldova, and the former Soviet Republics of Central Asia and the Caucasus. It involves five states in Central Asia: Kazakhstan, Uzbekistan, Tadzhikistan, Kirghizia and Turkmenistan, and three states in the Caucasus: Georgia, Armenia and Azerbaijan.

^6.	The Ministry of Foreign Affairs Country Operational Programmes are at present available for Estonia, Latvia and Lithuania.

^7.	Denmark's environmental assistance to Eastern Europe 1991- 1996 - an assessment of project achievements, environmental policy performance and the role of foreign assistance", October 1998, by Michael Skou Andersen, Aarhus University, in cooperation with PLS Consult and KPMG. The recommendations in the 1998 evaluation are referred to in: Årsberetning 1998 - Miljųbistand til Ųsteuropa, p. 25, among other places.

^8.	Project Cycle Management Manual, September 1999.