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Danish strategy for environmental assistance to Eastern Europe 2001-2006

Executive summary

Background

This strategy for the Environmental Assistance Programme replaces the strategy from October 1993: "International Environmental Assistance under the Environmental and Catastrophe Framework - Subsidiary Strategy regarding Environmental Measures in Eastern and Central Europe" (International Miljøbistand under Miljø- og Katastroferammen - delstrategi vedrørende Miljøindsatser i Øst- og Centraleuropa). The programme is administered by the Ministry of the Environment and Energy, through the Danish Environmental Protection Agency.

The measures are part of Denmark's international efforts under the Environmental, Peace and Stability Framework (MIFRESTA), formerly the Environmental and Catastrophe Framework (MIKA)⁽³²⁾. 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 with the Ministry of Foreign Affairs and the Ministry of Finance. This is undertaken with the help of interministerial committees such as the Inter-Ministerial Eastern European Committee, (TMØ)⁽³³⁾ and the International Expenditure Committee,⁽³⁴⁾ which refers to the government's Financial Affairs Committee.

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

	Sector-Integrated Environmental programmes(35) within the energy, agriculture, transport and industry sectors, including the working environment. The 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 is co-ordinated by the Danish Environmental Protection Agency.
	The Environmental Investment Facility for Eastern European Countries (MIØ) under the Investment Fund for Eastern Europe, which is designed to help to 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 IØ Fund.
	The Environmental Credit Programme for Eastern Europe (MKØ), 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.

At attempt is being made to revise the strategy on the basis of the experience gained through the administration of the Environmental Assistance Programme, 1993-2000:

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 (MIØ), and the Environmental Credit Programme for Eastern Europe (MKØ). 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 gives priority to the Baltic Region, i.e., 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 the environmental strategy in the light of this revision.

Environmental problems and investment requirements in the recipient countries

The concrete choice of country and measures required is based to a large extent on the changed political context in the countries of Eastern Europe, including the fact that the recipient countries are at widely differing stages in relation to approximation with the EU environmental acquis, the readjustment to a democratic society and a market economy, and the administrative reform process. In addition the ratification and implementation of international environ mental conventions of a regional and global character in the region as a whole leave a great deal to be desired.

Underlying the way in which all environmental problems present themselves is the fact that economic resources are limited.

Where the EU pre-accession countries are concerned estimates of the expense involved in complying with the EU environmental acquis run into approximately DKK 1,000 billion, or around EURO 120 million (1997 figures) and, most recently, are in the region of DKK 700 billion, around EURO 85 million (2000 figures)⁽³⁶⁾. The EU Commission has estimated that pre-accession countries will have to spend between two and three percent of their GDP over a period of 15 - 20 years in order to fully implement EU environmental requirements. There are no corresponding calculations for the CIS countries.

The major expenditure for these countries will be public sector investments in infrastructure and private sector investments to implement legislation, such as in the industrial sector. It must be expected that the countries will have to finance the greatest part of the expenditure (approx. 90-95 %) themselves.

General objectives

The general objectives for the Environmental Assistance Programme for Eastern Europe are to:

	make the greatest possible contribution to the protection of the environment in Eastern Europe by supporting the Eastern European countries that have applied for EU membership in their efforts to implement EU environmental requirements and those of international environmental conventions,
	help the CIS countries and other non EU pre-accession countries in their approach to an enlarged EU and to reduce the pollution which has a harmful impact on the health of the public; reduce the crossborder pollution that has an impact on the EU countries; protect nature and biodiversity and implement international environmental conventions,
	help to ensure that political and economic developments move in the direction of environmental sustainability, especially by supporting market-based development and the promotion of democracy, also including the encouragement of responsibility in the private sector, involving the public and NGOs in decisionmaking processes relating to the environment,
	promote the use of Danish environmental expertise and technology for the benefit of the areas covered by this programme.

Geographically the strategy covers measures in:

EU pre-accession countries in the Baltic Region and Russia

The general geographical prioritisation will still be the Baltic Region and will, over and above assistance for these countries' EU accession preparations, continue on a regional basis regarding common environmental problems. Measures will be undertaken in the countries around the Baltic, i.e. Estonia, Latvia, Lithuania, Poland and the neighbouring Russian areas. Assistance will be made available within the established areas of priority in the EU Action Plan on the Northern Dimension,⁽³⁷⁾ which addresses the Baltic Region in particular, the area around the Barents Sea and the new neighbouring Russian areas in connection with an enlarged EU.

Selected EU pre-accession countries in Central and South-Eastern Europe

The other Eastern European countries applying for EU membership must first and foremost receive assistance in transposing and implementing EU environmental requirements. It is characteristic for these countries that they have not to date made the same progress as the Baltic Region or received similar attention on the part of donors that the Baltic Region has received. Measures will include Slovakia, Romania and Bulgaria as cooperating countries, and the other EU pre-accession countries which are closer to being admitted to the EU (Hungary, the Czech Republic and Slovenia) will receive assistance solely where this is a necessary facet of regional projects.

Selected CIS countries

As the EU accession process progresses, relations with the countries that become new border countries to an enlarged EU will intensify. This should lead to increased collaboration in the environmental area as well.

A common feature of these countries is that they do not at present devote sufficient resources to their environmental administration and that the environment has a very low priority as a consequence of their economic situation. In general these countries are losing a great deal of ground relative to solving environmental and health related problems, as public investments are incapable of covering even basic operation and maintenance costs. In addition there is a very low degree of openness and little opportunity to influence the decisions of the authorities relating to the environment.

Activities will focus primarily on Ukraine, Russia (with sharper focus on the neighbouring Russian areas than other areas of Russia, as the pre-accession countries around the Baltic gradually become EU members), Belarus⁽³⁸⁾ and, as a new co-operating country, Moldova. Measures in the Caucasus and Central Asia will be limited, solely of a regional character, and with close links to the Environment for Europe process and international conventions.

The Balkans

The Environmental Assistance Programme collaborates with the Ministry of Foreign Affairs on some aspects of the environment related measures in the Balkans. Measures under the programme include Croatia, Bosnia-Herzegovina, Macedonia (FYROM), Albania and the Federal Republic of Yugoslavia. As a starting point measures under the Environmental Assistance Programme will primarily be of a regional character, but support can also be given to concrete environmental infrastructure projects.

Two general themes will comprise the framework for environmental assistance: the EU accession process and the Environment for Europe process. In practice there will be a very great difference during the strategy period between the countries included as far as environmental policy development is concerned and the speed at which this will move.

EU approximation

EU approximation has been established as the general focus for the strategy, both for EU pre-accession countries and for the CIS countries which, due to partnership and Co-operation agreements with the EU⁽³⁹⁾ have in principle committed themselves to approximation with EU requirements, including those in the environmental field.

The attitude of the Danish government to the enlargement process is that the EU pre-accession countries should, as far as is possible, maintain the speed of the reform process in order to help to ensure, inter alia, that possible transitional periods will be as brief as possible. Considerable weight is given to according first priority to EU framework legislation and the provisions of international conventions to which the Community has subscribed. The Danish measures can contribute in a goal-oriented fashion to reduce the length of these transitional schemes for candidate countries, and Denmark should take steps to ensure that the EU accession funds are channelled to areas where longterm transitional periods are anticipated.

Danish environmental assistance will comprise direct support for the transposition and implementation of EU environmental requirements in the recipient countries, preparatory work for investments or direct investments and, as a framework for this, the strengthening of the relevant institutions centrally, regionally and locally in administering implementation, inspection and control.

In the CIS and the other countries that are not applying for EU membership the measures should partly be seen in relation to their Partnership and Cooperation Agreements (PCAs) with the EU, and partly in relation to the concrete environmental situation.

With reference to the European Energy Charter and the "Environment for Europe" process, the PCAs emphasise the need to improve environmental legislation in the direction of EU standards and Co-operation at a regional and international level as a framework to combat the deterioration of the environment in the CIS countries. Danish efforts will in future attempt to promote greater synergy between Danish and EU measures, especially for those countries that will border a new, enlarged EU.

Assistance for the broader EU integration process

Over and above assistance in implementing Directives, the Environmental Assistance Programme will also emphasise the promotion of EU environmental policies and action plans in general, and support for promoting the ratification of and compliance with international conventions.

An effort will be made to better integrate environmental considerations in other sector policies, especially in areas such as climate, energy, health, agriculture, forestry and transport, and the promotion of sustainable development in the light of the EU's Fifth and Sixth Environmental Action Programmes. An attempt will also be made to strengthen the Community's sustainability strategy at the coming Rio+10 meeting in 2002.

Areas where action will be undertaken

Areas where action will be undertaken include air quality, water quality, waste treatment, chemicals and biodiversity. Higher priority will also be given to an interdisciplinary effort designed to strengthen institutions and enhance professional expertise in the countries, to promote the participation of the public in the environmental area, to increase the sense of responsibility in the countries' private sectors with regard to taking their share of the burden in the environmental area and, finally, to strengthen the countries' fulfilment of obligations under international environmental conventions.

The number of areas where action will be undertaken has increased relative to the 1993 strategy due to the inclusion of chemicals and the higher priority given to the interdisciplinary areas. This reflects the greater differentiation in the need for assistance and a greater diffusion with regard to developments in the group of cooperating countries.

Through the forthcoming revision of existing Country Programmes the Environmental Assistance Programme will determine the country specific needs and, in a dialogue with the co-operating countries, select the relevant areas in which action is required for the country or region in question.

Carrying out the strategy

Today collaborative agreements under the Environmental Assistance Programme are in place with the following EU preaccession countries: Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Romania and Bulgaria. Collaborative agreements have also been entered into with Russia, Ukraine and Belarus, and a collaborative agreement with Moldova is being drawn up. In the spring of 2000 the strategy for collaboration with Belarus was changed so that it not only involved national NGO projects, but also regional NGO projects as well as crossborder projects with the inclusion of one or more neighbouring countries, especially EU pre-accession
countries.⁽⁴⁰⁾

The strategy must necessarily take a "dynamic" stance to the possible phasing out and incorporation of cooperating countries, where for example one or more EU pre-accession countries become EU members more quickly than anticipated, where the need for assistance is estimated as being limited, or where the need for assistance is estimated to be largely covered by other donors.

Sectorintegrated environmental measures

The integration of environmental considerations into other policy areas, especially economically important sectors such as energy, industry and agriculture, has been given high priority, both in Denmark and the EU. The situation in the pre-accession countries and in the other countries covered by the strategy in this area is largely the same as in the EU countries. There is much to indicate that the difficulties of ensuring the integration of environmental considerations are also comparable: traditional sectorspecific thinking and a lack of incentives. Environmental measures in this area will first and foremost be handled through the sector-integrated environmental programmes, i.e. the programmes that are managed by the respective sector ministries. The ministries taking part are the Ministry of Food, Agriculture and Fisheries, the Ministry of Trade and Industry, the Ministry of Labour, the Ministry of Internal Affairs (the Emergency Management Agency), the Ministry of Transport, the Ministry of Housing and Urban Affairs, the Ministry of Education, and the Danish Energy Agency. Activities are co-ordinated by the Ministry of the Environment and Energy.

Regional activities

The realisation of the strategy will involve continuing or initiating a series of regional (in the sense of "intergovernmental") activities which will be based primarily on the regional framework for Co-operation provided for in the "Environment for Europe" process.

The initiative to implement a regional activity will lie with the Environmental Assistance Programme which may decide to carry out a regional programme proper, or to contribute to the performance of regional programmes which have been established under the auspices of, for example, the "Environment for Europe" process and the countries in the region - most often in collaboration with multilateral and/or bilateral donors.

International cooperation and coordination

Since the beginning Danish activities have been co-ordinated with the other stakeholders working in Eastern Europe, including the local financing funds, and Denmark has taken part in the joint financing of a great number of projects. The main stakeholders in this connection are the International Bank for Reconstruction and Development (IBRD), the European Bank for Reconstruction and Development (EBRD), the European Invest- ment Bank (EIB), the Nordic Investment Bank (NIB), the Asiatic Development Bank, NEFCO, and national schemes such as the Environmental Credit Programme for Eastern Europe (MKØ).

Due to the differences in assistance schemes and banks, a division of labour has developed in which the bilateral donors primarily organise and carry out the preparatory work for the projects, while the banks and in future the EU's ISPA facility in particular, contribute most of the funds for the investments.

The Environmental Assistance Programme contributes actively to the coordination and also partly to the financing of these mechanisms in order to increase the efficiency of environmental measures in Central and Eastern Europe and the CIS, both in the co-operating countries, for international elucidation projects, and for donor-financed secretariats.

Criteria for providing assistance

It will be possible to provide assistance for projects that comply with the objectives and priority areas under the Environmental Assistance Programme as described in the strategy, in the individual Country Programmes for co-operating countries and in the regional programmes that will be developed when the strategy is realised. The project management manual⁽⁴¹⁾ from the Danish Environmental Protection Agency contains further details of the specific criteria regarding the selection and approval of projects.

The Environmental Assistance Programme will support both investment and technical assistance projects, or a combination of both. Assistance can be provided for all phases of projects, including project identification, planning and quality assurance, feasibility studies, project performance, monitoring, evaluation and the administration of results, as well as grants for pilot and demonstration projects.

Monitoring programmes and projects

The individual Country Programmes will be continuously followed up and monitored on the basis of the established indicators, in order to check whether the proposed objectives have been fulfilled and whether adjustments are required. Monitoring of the individual projects will be carried out in accordance with the guidelines in the Project Cycle Management Manual, 1999. The use of indicators to strengthen the monitoring of Country Programmes and individual projects will be extended on an ongoing basis.

Information activities

A knowledge of Danish environmental assistance for Eastern Europe is an important element in anchoring and ensuring effective and acceptable measures. This applies both to the recipient countries and Denmark. The Danish Environmental Protection Agency will continue to intensify measures designed to provide information and communication in the coming years. This will be achieved by, for example, the publication of Country Programmes, national publications on project Co-operation and relevant theme reports.

Information for specific target groups in the recipient countries must ensure that a broad knowledge of various local environmental problems, and especially how these can be solved, is achieved. This information must be administered via a wide range of media and carried out in close collaboration with the recipient countries.

It must also be ensured that there is a good knowledge within the Danish resource base (companies, institutions and NGOs, etc.) of existing and potential activities under the Environmental Assistance Programme, so that Danish knowledge can be utilised as fully as possible.

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