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Billions for Sustainability?Billions for Sustainability?Billions for Sustainability?Billions for Sustainability?Billions for Sustainability?

Lessons learned from the useof pre-accessions funds

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November 2002

Billions for Sustainability?Billions for Sustainability?Billions for Sustainability?Billions for Sustainability?Billions for Sustainability?

Lessons learned from the useof pre-accessions funds

This publication is based on contributions frThis publication is based on contributions frThis publication is based on contributions frThis publication is based on contributions frThis publication is based on contributions from:om:om:om:om:

TTTTTeodora Dönszeodora Dönszeodora Dönszeodora Dönszeodora Dönsz

Jozsef FJozsef FJozsef FJozsef FJozsef Feilereilereilereilereiler

Andrzej GułaAndrzej GułaAndrzej GułaAndrzej GułaAndrzej Guła

PPPPPeep Mareep Mareep Mareep Mareep Mardistedistedistedistediste

PPPPPavel Přibylavel Přibylavel Přibylavel Přibylavel Přibyl

Anelia StefanovaAnelia StefanovaAnelia StefanovaAnelia StefanovaAnelia Stefanova

Magda StoczkiewiczMagda StoczkiewiczMagda StoczkiewiczMagda StoczkiewiczMagda Stoczkiewicz

Linas VLinas VLinas VLinas VLinas Vainiusainiusainiusainiusainius

Helena ZamkovskaHelena ZamkovskaHelena ZamkovskaHelena ZamkovskaHelena Zamkovska

Juraj ZamkovskyJuraj ZamkovskyJuraj ZamkovskyJuraj ZamkovskyJuraj Zamkovsky

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ISBN 83-89230-00-3

Copyright CEE Bankwatch Network and Friends of the Earth Europe

Reproduction and distribution of this booklet and the information contained therein isfree for non-commercial purposes after clearly acknowledging the source.

CEE Bankwatch NetworkKrátká 26, 100 00 Praha 10Czech RepublicEmail: main@bankwatch.org

www.bankwatch.org

Friends of the Earth Europe29, Rue Blanche, B-1060 BrusselsBelgiumEmail: info@foeeurope.org

www.foeeurope.org

Editors: Magda Stoczkiewicz, Ivona Malbasic, Stephan von Pohl

Design: Marcin Zynczewski

Printed by: Ludwik Sokołowski, Paczków, Poland

To order copies of this booklet, please contactMagda Sanocka: sanocka@bankwatch.org

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TTTTTable of Contentsable of Contentsable of Contentsable of Contentsable of Contents

Preface 7

List of abbreviations 9

Executive Summary 11

Main findings

Environmental Concerns– Horizontal Integration or Disappearance? 15

Public Participation in Pre-accession Funds 21

Institutions, Capacities, Lessons Learned 29

Recommendations 43

The D8 Motorway in the Czech Republic 51

The Struma Motorway in Bulgaria 57

Hazardous Waste Treatment in Bulgaria 63

Regional Waste Management in Lithuania 71

ISPA in Poland 77

The National Development Plan in Hungary 81

The National Development Plan in Estonia 87

Cross Border Co-operation 93

Addresses of Project Partners 101

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PrPrPrPrPrefaceefaceefaceefaceeface

For almost three years, Friends of the Earth Europe andthe CEE Bankwatch Network have monitored the use ofEU pre-accession funds in the candidate countries throughthe project “Billions for Sustainability? - Financial Aspectsof Accession”. We started the project with the convictionthat the new funds coming to the region under the auspicesof EU enlargement were important and needed publicscrutiny, especially from environmental groups.

The pre-accession aid for candidate countries - ISPA,SAPARD and Phare 2000 – will cause profound changes inthe economies of the Central and East European countries,and will have a significant impact on the environment throughnew projects in infrastructure, energy, nature conservation,agriculture and environment. These funds may not constitutea huge amount of money, but they will attract other fundingfrom national budgets and from other sources such asInternational Financial Institutions (especially the EuropeanInvestment Bank). We therefore believe that, for the benefitof the citizens of the CEE countries, these financialinstruments should be implemented in accordance with theprinciples of sustainable development, and managed in atransparent manner with public involvement and scrutiny.

The proper and sustainable use of pre-accession fundsis crucial for the future state of the environment in the CEEcountries as well as the enlarged Union. Access toinformation and public participation are prerequisites forthe efficient use of EU aid as well as for building civil societyin the accession countries.

We have followed pre-accession funds in eight countries:Bulgaria, the Czech Republic, Estonia, Hungary, Latvia,Lithuania, Poland and Slovakia. We have followed theprocess and, where possible, taken part. We have pointedout deficiencies and proposed sustainable solutions. Webrought alarming cases of fund misuse or environmentaldestruction to the attention of Brussels officials and

Preface

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Dr Martin RochollDirectorFriends of the Earth Europe

Magda StoczkiewiczAccession Coordinator

CEE Bankwatch Network

encouraged other NGOs to become interested in issuessurrounding pre-accession funds and the future use ofstructural funds.

We have looked to answer questions such as how tomake the process transparent and avoid the misuse of funds,how to involve the public, how to ensure environmentalbenefits instead of environmental destruction and how touse the funds most effectively. These and other questionsare addressed in this publication.

We hope our recommendations will be used not only toimprove the use of pre-accession funds, but also to preparethe accession countries for receiving structural and cohesionfunds, with the aim to make their implementation moreenvironmentally friendly, transparent and efficient and topromote sustainability and democracy in the future memberstates of the European Union.

Brussels, November 2002

Preface

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List of abbreviations

List of abbrList of abbrList of abbrList of abbrList of abbreviationseviationseviationseviationseviations

CBC Cross-Border Co-operation

CEE Central and Eastern Europe

CEPA Center for Environmental Public AdvocacyCFCU Central Finance and Contracting Unit

DG Directorate General

EC European Commission

EIA Environmental Impact Assessment

EIB European Investment Bank

EP European Parliament

EU European Union

FoE Friends of the Earth

FoE-S Friends of the Earth Slovakia

GDP Gross Domestic Product

ISPA Instrument for Structural Policies forPre-Accession Aid

LGM Lithuanian Green Movement

NDP National Development Plan

NEAP National Environmental Action Plan

NGO Non-Governmental Organisation

OLAF European Anti-Fraud Office

Phare Poland Hungary Assistance in theRestructuring of their Economies

Phare CBC Phare Cross Border Co-operation

REC The Regional Environmental Center forCentral and Eastern Europe

SAO Supreme Audit Office

SAPARD Special Action for Pre-Accession measuresfor Agriculture and Rural Development

SEA Strategic Environmental Assessment

SME Small and Medium-sized Enterprise

SPD Single Programming Document

TEN Trans-European Network

WWF World Wildlife Fund

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Executive Summary

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Executive Summary

Executive SummarExecutive SummarExecutive SummarExecutive SummarExecutive Summaryyyyy

When the Copenhagen European Council agreed in June1993 that “the associated countries of Central and EasternEurope that so desire, shall become members of theEuropean Union”, it laid the foundations for the eastwardexpansion of the European Union. In order for the region’syoung democracies to join the EU, serious investments ininfrastructure and democratic development would have totake place. One of the steps towards European integrationwas the creation of financial mechanisms for pre-accessionaid, whose main goal was to help candidate countries catchup with EU standards and legislation.

In the period 2000-2006 the European Union isexpected to provide financial support for accessioncountries in annual amounts of approximately 3 billioneuros. This money comes from three different sources.ISPA (Instrument for Structural Policies for Pre-AccessionAid) funds projects in transportation and the environment.SAPARD (Special Action for Pre-Accession measures forAgriculture and Rural Development) focuses on ruralprojects. Phare 2000 derives its name from an earlierproject, Poland Hungary Assistance in the Restructuringof their Economies (PHARE). Phare 2000 is designed torestructure national bureaucracies in preparation for EUmembership.

At the same time co-financing from InternationalFinancial Institutions (IFIs), mainly the EuropeanInvestment Bank (EIB) is expected to supplement this aid.

Recognising the environmental impacts of this rush ofaid, the CEE Bankwatch Network and Friends of the Earthbegan the project “Billions for Sustainability?” in 2000.The project has gone through three briefings (October2000, June 2001, April 2001), which have provided updateson its findings and case studies of actual EU-fundedprojects in Bulgaria, the Czech Republic, Estonia,Hungary, Latvia, Lithuania, Poland and Slovakia.

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This publication provides another update, with casestudies from the candidate countries being observed. Inaddition, we summarise our findings in three areas: theenvironment, public participation and the capacity ofnational institutions to adequately handle the aid in atransparent and democratic manner. Finally, we offerrecommendations for addressing the problems weuncovered.

Environmental issues are, of course, the main reasonfor the “Billions for Sustainability?” project. Although theEuropean Union calls for the integration of environmentalprinciples into all areas of work, we find such principleslacking from many projects. The funds’ structure oftenencourages unnecessarily large projects and favours ‘end-of-the-pipe’ solutions such as landfills over more proactiveapproaches such as recycling and waste reduction. Externalpressures also cause environmental needs to be ignored –we see this in the drive to complete the Trans-EuropeanNetwork of motorways, at the expense of moreenvironmentally sound modes of transportation.

Public participation in decision making is key to afunctioning democracy as it gives citizens a sense ofownership of both the democratic process and the particularproject in question. Although the situation varies fromcountry to country, the fact the EU funds contain little orno stipulations for public participation means that inpractice the level of public involvement depends on the goodwill of local officials. We had positive experiences inHungary, where NGOs were allowed to participate in thecreation of a National Development Plan, and in Lithuania,where we were given observer status on a ProjectMonitoring Committee, but often such ‘victories’ were theresult of constant pressure and lobbying. For the most part,officials tend to find public input a burden since it preventsthem from approving projects as quickly as possible. Fromtheir point of view, public involvement decreases theefficiency of the process (by requiring more hearings) butfrom our point of view, the quality of final projects is usuallyimproved.

Public involvement is impossible without adequate accessto information and here, too, the results, although varied,were mostly negative. Sometimes, only leaked documentswere available, other times they existed only in English or

Executive Summary

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the English and native-language versions showeddiscrepancies. Local governments failed to make use of animportant tool for public outreach – the internet – and oftenit took NGO pressure to get vital documents up on the web.

We also look at Slovakia as an example of howbureaucratic mismanagement can create a situation rife forcorruption. In one of the worst examples of corruption fromthe candidate countries, we look at how the lack of EUoversight allowed a few individuals to steer pre-accessionaid to companies of their choice and for their own financialgain as well.

Our findings show the importance of strong and capablebureaucracies, ones accountable to the public andstructured in such a way as to assure independent oversightand public review. Ironically, part of these funds (Phare inparticular) is dedicated precisely to building these kinds ofstable institutions capable of guaranteeing democracy andthe rule of law.

Our recommendations are intended to provide decisionmakers in the EU and in candidate countries with possibleavenues for improving the use of pre-accession funds andto help them prepare for the effective, wise and transparentuse of structural and cohesion funds following accession tothe European Union. The inclusion of environmentalprinciples in decision making is one of our top concerns, ofcourse. But we also argue for restructuring anddecentralising of bureaucracies as well as the need toprovide NGOs and the public with the technical know-howand financial support to participate constructively in thewhole process. On the whole, these recommendations aremeant to improve both the environment and the democraticprocess in the candidate countries – something which theEuropean Union’s funds aim to do as well.

Executive Summary

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Recommendations

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Main findings

Environmental ConcerEnvironmental ConcerEnvironmental ConcerEnvironmental ConcerEnvironmental Concernsnsnsnsns– Horizontal Integration– Horizontal Integration– Horizontal Integration– Horizontal Integration– Horizontal Integration

or Disappearance?or Disappearance?or Disappearance?or Disappearance?or Disappearance?

Since the environment is the central focus of the“Billions for Sustainability?” project, experiences from thisangle are of course among the most important findings ofproject participants.

Issues related to the environment touch all areas ofhuman activities, as is rightly recognised in EU statementsadvocating the horizontal integration of environmentalprinciples in its projects. At the same time, environmentalvalues have to struggle to be incorporated, and areconstantly struggling against old values and stereotypeswhich are not easily changed, if they are changeable at all.In an ideal world, environmental arguments would haveenough weight to win the battles against ‘business-as-usual’attitudes that consider only short-term economic gains.Sadly, reality is far different. Without stronger agitation,environmental values will never become integrated intoeveryday thinking.

As a result, horizontal integration of environmentalvalues, though nice in theory, is in practice defeated quickly.The emperor wears no clothes; there is no force behind theEU’s words. Integration is doomed to fail if it is imposedfrom above and entrusted to people whose primary interestsare in conflict with the weak environmental mandate. Thus,in practice the implementation of horizontal integration willfail on a mass of individual actions arising out of a counter-motivation for considering the environment.

A holistic approach has its difficulties – environmentalissues are complex and require a lot of care for details.Blueprints invented on the macro level often cannot bereadily applied on the micro level. Local conditions shouldbe taken into account and blueprints adapted – or even

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completely abandoned – according to their needs. It isunlikely that large-scale, macro-level organisations such asthe EU or even state bureaucracies can truly assess the realenvironmental needs on the local level. The holistic approachsimply requires much wider understanding of the functioningof nature as a system, and purely technical measures cannotreflect this fact.

Here, natural subsidiarity should play a crucial role. Inthe original sense of the term, it would require priorities tobe decided on the lowest possible level, which would bringin the wisdom of E.F. Schumacher’s Small is Beautiful.1

The Institutional Factor

Keeping in mind all the theoretical difficulties mentionedabove, the European Union faces enormous challenges inpromoting sustainability as its environmental pillar. Given theEU’s supra-national nature, its extensive bureaucracy and itsexistence separate from the national bureaucracies whichcontrol its executive power, the organisation faces enormouschallenges towards attaining subsidiarity in its original sense,which is a conditio sine qua non for any environmental effort.

Another significant challenge for the EU is theatomised competition of various sectoral bodies.Directorate Generals compete for resources and influencewith ministries in national bureaucracies. In a bureaucracy,even the best of intentions is of no use without the powerto actually put one’s plans into action. Certainly, as far asaction is concerned, the environment is not a main priorityfor the EU as a whole (if we can talk about the willand wishes of the EU as one). Stronger interests prevail,such as macroeconomic success and political cohesionamong member states. Also, external influences can bestronger than the priorities of some bureaucratic units. Agood example is the Trans-European Network (TEN),promoted by the European Roundtable of Industrialists,which definitely takes priority over environmentalconcerns.

Certainly, the problems prevalent in the EU exist inaccession countries on a much larger scale, as they have lesscapacity, cohesion and discipline, and suffer from higher

Main findings

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corruption in state bureaucracies. Such systemiccharacteristics almost certainly work against the commongood, whose only voices remain NGOs and the occasionalspontaneous action by affected citizens.

Pre-Accession Funds and the Environment

In the case of pre-accession funds, NGOs argue thattheir implementation should follow both national and EUenvironmental principles and regulations. This has a clearlogic – rules are to be obeyed, and if the EU supportssomething with its financial resources, these resourcesshould be used in line with EU regulations.

Another logical precondition is that funds earmarkedfor improving the environment in the pre-accessioncountries should bring no harm to the environment. Alongwith this presumption, one should expect that pre-accessionfunds focused on other sectors should also not harm theenvironment. In other words, they should beenvironmentally friendly or at least neutral.

The dimension of subsidiarity is an operational part ofthe second presumption. Without the necessary knowledgeto make decisions on the lowest level, we are unlikely tosee environmentally sound policies. Also necessary are local‘ownership’ and support of a project. Public participation,discussed in another chapter of this publication, is of crucialimportance not only for a feeling of ownership, but for theenvironment as well.

In our experience over the past three years, the use of pre-accession funds fulfilled none of the above mentionedpreconditions. Of course, the funds operate in very diverseareas with varying local conditions and it is easy to makegeneralisations and overshadow the individual positive cases.

Pre-Accession Funds on the Ground

There are few positive trends regarding theenvironmental impacts of pre-accession funds during thethree years of our project. In the first period of the project,

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we could only observe the construction of the fundingframework. Environmental impacts started to appear overtime.

In the case of SAPARD, the impacts on the environmentare yet to be seen as the use of this fund is lagging behindthe other sources discussed. Due to the nature of theagricultural sector, however, we expect seriousenvironmental issues associated with the use of SAPARD.The conditions attached to SAPARD grants are often verycomplex and thus discourage small farmers from applying.We therefore fear that the future development of theagricultural sector in the CEE region will be towardsindustrialised, intensive agriculture. This development,along with the obvious environmental problems associatedwith such farming, will exacerbate the already existing socialproblems of rural areas in pre-accession countries.

ISPA funds used for transport frequently lead down anenvironmentally harmful development path, with theconstruction of highways undercutting the environmentalconsiderations and principles the EU increasingly claims topraise. Therefore, while one half of ISPA money is dedicatedto improving the environment, the other half funds transportprojects harmful to the environment. The StrategicEnvironmental Assessment (SEA) could be a tool forcombining the needs of transport corridor development withenvironmental and social concerns. However, even in thosecountries like the Czech Republic where SEA is applied, theassessment’s findings are ignored in the face of realpolitik.Behind-the-scenes lobbying and the misuse of public fundsfor suspicious deals still trump rational arguments for thepublic good.

Both SAPARD projects encouraging intensive agricultureand ISPA-transport projects such as highways can havenegative impacts on biodiversity. This contradiction of theEU funds’ goals with stated EU concerns for the environmentis not acceptable and shows a lack of co-ordination and lackof integration of environmental principles into actual policies.

The use of pre-accession funds is plagued by the sameproblems as other activities in Central and Eastern Europe:the rule of law applies only on paper and even less so when itcomes to the environment. If we do not shed more light onthis problem now (with the use of pre-accession funds), thisgeneral pattern will only continue after accession.

Main findings

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Environmental impact assessments (EIAs) are lackingin several areas. The most problematic issues are theconsideration and assessment of alternatives and the lackof proper and meaningful public participation. In Bulgaria,two out of three investigated cases lacked an investigationof alternatives, rendering the whole exercise emptypaperwork. Public participation is plagued with problemseverywhere, and a section of this publication is devoted tothat issue. In general, the professional quality and neutralstanding of EIA consultants must be closely monitored inthe future. A certain reason for low quality EIA reportsand project documentation in general is time pressureduring their preparation coupled with a philosophy thataccepts poor quality done quickly rather then good quality,which requires time. Government procurements are alsofar from straight-cut and do not provide equal access –information about using pre-accession funds has its ownspecific market and is not spread democratically.

As with EIAs, project documentation also often containsstatements which are there only to fulfil certainrequirements but have little to do with actual intentions.Financial memoranda from a Hungarian ISPA projectcontain interesting statements about a suburban sewersystem supposedly promoting increased tourism, while awaste project’s documentation boldly declares that“practically no external costs can be attributed to theproject”. Vague statements are common as well; one wasteproject claims that it “is not likely to affect anenvironmentally sensitive area”.

As far as environmental ISPA projects are concerned, wasteand sewage operations are criticised in most of the countriesfor the application of regional models instead solving theproblems on the smallest possible scale. This approach inflatesthe projects with transport and infrastructure expenses,increasing local people’s burdens. Also, while the projectsmight solve waste or wastewater problems, they often createunnecessary pollution of another type. All this happens despitethe fact that smaller-scale operations are possible.

Possible advantageous methods of waste minimisationsuch as selective collection and composting are rarely applied,and alternative solutions such artificial wetlands – cheaperin the long run – are not considered at all. This problem ispartly the fault of the EU funds’ lack of flexibility regarding

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project size, and partly the fault of the biased approach ofWestern consultants who prefer expensive solutions tocheaper ones and would rather apply technology from theEU even if it is an inferior solution and more costly than onepromoted by domestic experts. Importing technology fromabroad often causes problems later on – high cost of spareparts, high operating costs and lack of local knowledge forrepairs and maintenance.

In the future, there should be more symmetry betweenthe European Union’s goals and actions, and we hope tosee its activities brought in harmony with its objectives.Conflicting objectives and the inefficient spending of pre-accession funds paint a picture of an EU which is much‘richer’ than it is in reality. If pre-accession funds are to bespent effectively, serious rethinking and reassessment ofthe needs and possibilities would be needed. Otherwisebillions will be spent unwisely, and not for sustainability.

Footnotes

1 It should be noted that global-scale problems require a differentlogic; however, their solutions and mitigation efforts at the locallevel should be done in the spirit of subsidiarity and the popularslogan ‘think globally, act locally’.

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Public ParticipationPublic ParticipationPublic ParticipationPublic ParticipationPublic Participationin Prin Prin Prin Prin Pre-accession Fundse-accession Fundse-accession Fundse-accession Fundse-accession Funds

The EU’s Sustainable Development Strategy explicitlystates that “the voices of stakeholders, including those fromoutside the Union, must be heard”. This provision constitutesa fundamental democratic right, but it is not always reflectedin reality. The guidelines for the pre-accession financialmechanisms do not require that the public be involved intheir setting up or implementation. For the last three years,the “Billions for Sustainability?” project has continuouslypointed out that this lack of public participation is a seriousdeficiency which not only discourages public support for EU-funded projects, but also leads to the possible misuse of fundsdue to the lack of independent oversight. Thanks in part toconstant pressure from NGOs, however, the situation hasslightly improved during this period.

Neither ISPA nor Phare guidelines mention publicparticipation. When the law makes room for suchopportunities, the wording “where appropriate” is oftenused, making enforcement difficult. We have beenmonitoring pre-accession funds from the very beginning,and the process of consulting with the public and NGOsduring the setting up of the financing frameworks has beenquite poor.

Although the level of public participation varies fromcountry to country and sometimes also depends on theresponsible ministry or agency, it is on the whole lacking.The responsible agencies apparently treat publicinvolvement as an obstacle to the smooth and rapidpreparation of plans and projects. If NGOs are given threeweeks (including Christmas and New Year holidays, as wasthe case in Estonia) or three days (from Friday to Monday,as happened in Latvia) to study a pile of documents, thenthe genuine desire for involving NGOs is questionable.

Public participation at the project level also showsmajor deficits. The Bulgarian National Centre forHazardous Waste project is a good example of public

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participation remaining a formal exercise withoutsubstance (the ‘tick-the-box’ approach). Here, theconcerns of citizens most likely to be affected by theproject were not taken seriously into consideration. Thebest cases of public participation could be found in theCzech Republic and Hungary, although these, too, werefar from perfect. Very often the process was done in aconstant rush, the result being lower quality. NGOs cannotprovide valuable input if they are not given adequate timefor compiling suggestions.

In key stages such as identifying and selecting projectsto be financed by the pre-accession mechanisms, noconsultation with NGOs was carried out. In this way,decision makers missed a crucial chance to give citizens afeeling of ownership, which in the end created a lot ofmistrust and prejudice. The democratic deficit evident inthe process surely played a role in the increasedunpopularity of enlargement among the populations ofCEE countries observed two years ago.

In many cases, public participation was denied on thegrounds that “these are too large, all-encompassingprojects/programs”, and it was therefore inappropriate orimpossible to ask the opinion of civil society. Quite theopposite – the wider aims and plans of nationaldevelopment should be shared with the public andconsensus be found prior to applying for EU grants. Inthose instances when public participation did occur, it wasusually just a formality, with varying effectiveness. Theadvice of NGOs was not actively sought and in most casesNGOs were not involved in project preparation, selectionor evaluation. Only some countries reported having NGOrepresentatives on different bodies monitoring the pre-accession funds. Getting these independentrepresentatives there was often possible only after stronglobbying by the NGOs.

Because the ISPA and Phare guidelines contain noprovision for public participation, the openness of theprocess depended a lot on the good will of individualofficials both in the accession countries and in theEuropean Commission in Brussels. For example, afterNGOs met with Marc Franco, ISPA Director from DGRegional Policy at the end of 2000, he promised that hewould personally encourage national ISPA co-ordinators

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to improve information distribution and to pay moreattention to contacts with the public and NGOs. In a letterdated January 17, 2001 he states: “The Commissionconsiders that NGOs have an important role to play inthe development and the functioning of civil society […]Therefore I would like to suggest that we – both the ISPADirectorate and you as National ISPA Co-ordinator –enhance the exchange of information with NGOs and thepopulation at large”.

The statement was welcomed by NGOs and we believethat, to some extent, it improved the situation of publicparticipation. However, the lack of binding requirementsstill means that participation in practice depends on theindividual efforts of particular officials or strong pressurefrom NGOs.

Public Participation as a Tool for Public Scrutiny

How some of the accession countries’ governmentsview the concept of broader public participation andfreedom of speech can be illustrated by a statement madeby the Bulgarian Ambassador to the EU, AntoanetaPrimatarova. During celebrations at Veliko TarnovoUniversity in Bulgaria, on May 26, 2001, she stated, “Self-styled NGOs allow themselves to interfere in thenegotiations for membership in the EU! Instead ofentering into a dialogue with the local administrationthey communicate directly with Brussels, and thusdemonstrate a distrust towards the government and theruling party!” (Quote from the Bulgarian daily “Trud”)

Lack of transparency and public scrutiny causessituations such as the corruption scandal concerning theuse of EU funds in Slovakia. Massive abuse of funds –mainly Phare money – by senior Slovak officials came tolight in March 2001, and investigations were conductedboth by the Slovak police authorities and the EU anti-corruption unit OLAF. NGOs are now calling for a majorinstitutional overhaul with a new structure that willstimulate active public involvement in order to avoidfuture misuse of EU grants. The lessons from Slovakiamust be taken seriously and applied to the otheraccession countries.

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Public Involvement on the Monitoring Committees

NGOs were allowed to be present at the funds’monitoring committees only after more than a year ofimplementation. Again, the fact that there is no provisionfor such participation (ISPA guidelines only mentionpartners with a direct interest, such as private companiesinvolved in the project) means that participation dependscompletely on the good will of authorities in thecandidate countries. Even Mr. Franco’s above-mentionedletter only suggests organising “informal meetings withNGOs with the view to discuss investment priorities thatwill be incorporated in the strategy papers”. At the sametime, a remarkable situation occurred in Estonia, wherethe Ministries of Environment and Finance actuallyallowed NGO participation on the ISPA monitoringcommittee for environmental projects but the ECdelegation to Estonia disagreed, arguing that the forum’sdiscussions would be too technical.

Thanks to NGO interest and pressure one can nowfind different non-governmental organisationsrepresented on ISPA and SAPARD monitoringcommittees across the region. The situation withSAPARD is different because the idea of partnership isincluded in SAPARD guidelines, and NGOs aretherefore involved in most of the countries. However,these NGOs often do not adequately represent wider civilsociety, being industry lobby groups such as producers’associations. There is a clear need to also involveenvironmental NGOs on the SAPARD monitoringcommittees. One positive development is the recent offerto have two environmental NGOs on the monitoringcommittee in Estonia. There are also some examples ofenvironmental NGOs represented on national ISPAenvironmental monitoring committees (Bulgaria, CzechRepublic, Lithuania, and Poland). Transport monitoringcommittees, however, have not seen such developmentsbecause Ministries of Transport are rather reluctant tothe idea. The contrast between ISPA and SAPARDclearly shows that legal provisions for enhancing publicparticipation are necessary to improve the situation inthe CEE countries.

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Access to Information

As we have seen over the last three years, access toinformation on accession-related issues varies among thedifferent countries. Quite often, however – and especiallyat the beginning of the process – we witnessed inadequateaccess to information. Either information was not madeavailable or contradictory information was given. Forexample, in Estonia there were slight differences betweenthe English and Estonian versions of particular documents.In Bulgaria and Estonia most of the documents, includingnational strategies required by the Commission, were atfirst prepared only in English, which shut out many citizensfrom the process. Even when consulted on draft documents,NGOs had limited access to final versions of the strategies/plans. Many times we encountered unwillingness or at bestastonishment when we asked for specific documents on pre-accession funds. As was clear in some countries, informationon transport projects is often more centralised and moredifficult to obtain. In many cases the funds’ complicatedprocedures were not properly explained.

Civil society faced constant problems in obtainingimportant and timely information. For example, most ofthe national ISPA transport strategies are not publiclyavailable. In Hungary, NGOs could obtain leakeddocuments but were refused official access. In Poland, themain document for pre-accession aid, “Strategy for usingthe ISPA fund as a subsidiary instrument forimplementation of the National Environmental Policy”, wasfor a long time not available on the Ministry of theEnvironment’s ISPA website and was uploaded only afterstrong pressure from NGOs. This also had the result offrustrating Polish municipalities who were potentiallyeligible for funding. A survey in Poland showed that only30% of municipalities that submitted applications to ISPAhad access to the Strategy. In order to inform and involvethe wider public, governments need to make developingand updating the responsible ministries’ or agencies’websites a high priority.

We have also encountered significant confusion andobstacles in trying to gain access to information, which canbe attributed to the lack of clear rules and guidelines. We

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saw some positive trends. For example, some agencies postedstrategy papers or even their drafts on the web. Still, suchactions are not required and depend on the good will ofindividuals within the ministry. At the project level, obtaininginformation is even more difficult.

Examples from Hungary illustrate this problem well.The promoter of the “Utilisation of National WoodProperty” project refused to provide any project documentson the grounds that these only covered technical assistanceand would therefore be of no interest for the NGOsrequesting them. Such arbitrary decisions by a promoter ofwhat is and what is not in the interest of civil society wouldnot be possible if there were clear rules on informationaccess. In another case, the promoter of a hazardous wasteproject to be financed by Phare referred CEE BankwatchNetwork to the Delegation of the European Commission,claiming they were not allowed to release any project-related documents without their consent. The Delegationsaid that no such precondition exist.

The Need for Capacity

We have already mentioned the issue of publicparticipation above. Not only do we need a good mechanism,but also enough resources need to be dedicated to increasingstakeholders’ capacity for active participation. NGOs in theaccession countries are trying their best to make their voicesheard, but often lack the resources or knowledge to becomemore effective participants. The same situation is reportedfor the local authorities. Smaller municipalities often are notable to prepare competitive project proposals, and so facedifficulties obtaining funds. Centralised decision-making onthe national level seems to still be the case in most of thecountries.

Why is it Important?

Pre-accession funds may not constitute the largest sourceof money for the EU accession countries but they willdefinitely shape the development of some key sectors in theCEE region. This is because ISPA, SAPARD and Phare

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grants will be co-financed by national or local budgets aswell as from other sources such as the European InvestmentBank.

The aim of pre-accession funds is two-fold: first,accession countries receive financial aid for catching up withEU standards and legislation; and second, they go througha learning process to prepare them for future use of EUstructural and cohesion funds. We believe that an importantaspect of this process is learning how to involve the publicand listen to the voice of stakeholders. Unfortunately, thislesson was only partially learned and many deficiencies stillexist. Accession countries need to better share best-practiceexperiences.

Key elements of the pre-accession funds should include:binding rules and better compliance in the areas ofinformation access, transparency and public participation.Not only will the public better understand the projects andtherefore be more likely to support them, but such a strategywould improve strategies and projects through more inputwhile avoiding irregularities, the misuse of money and evencorruption like we saw in Slovakia (see the Slovakia casestudy). It is therefore important that the guidelines for bothEU structural and cohesion funds have clear provisions onpublic participation that provide basic rules for what thisprocess should look like.

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Institutions, Capacities,Institutions, Capacities,Institutions, Capacities,Institutions, Capacities,Institutions, Capacities,LLLLLessons Lessons Lessons Lessons Lessons Learearearearearnednednednedned

Introduction

According to the ‘accession partnership’ documents, oneof the main conditions for a country’s accession to the EUis that it possess stable institutions guaranteeing democracyand the rule of law. To this end, the EU has providedcandidate countries hundreds of millions of euros in grants.These aims, however, conflict with actual politicalexperience with the grants in question – which in thisinstance come from pre-accession funds. In fact, the grantsmay even work against the precise goal they are intendedto promote, with money earmarked for the developmentof democracy being used to set up essentially undemocraticand non-transparent institutions and further finances thendirected not on the basis of overall social priorities but onthe basis of the political inclinations of the limited groupof people in power.

Pre-accession assistance was intended to be a learningexercise for the candidate countries on the effective andtransparent use of public finances before significantly largerstructural and cohesion funds become available after EUaccession. Candidate countries were expected to build legaland institutional frameworks which would best reflect localcontexts and needs and also meet EU standards foradministering public funds. The experience so far suggests,however, that instead of being a learning process theinvestments themselves became the most important aspectof pre-accession assistance. In both candidate countries andthe EU, many officials placed little importance ontransparency and public participation in decision-making,instead regarding transparency a threat to efficient andspeedy distribution of EU funds, and thus also a threat totheir career and salaries.

Since the whole system of aid management often lackseffective monitoring and supervision, decision making by

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the EU is an extremely slow and complicated process. TheEU has not been able to adopt any timely or satisfactorycorrective measures. In some cases, these problems havebecome entrenched in the system, endangering the verypurpose of pre-accession assistance. Slovakia may serve asan example.

Pre-Accession Assistance in Slovakia

In Slovakia, growing suspicion of the systematicmisuse of EU funds erupted in an international scandalat the end of March 2001. Until then, non-governmentalorganisations (NGOs) had unsuccessfully attempted topoint out to government officials both in Slovakia andBrussels that the non-transparent system for managingEU assistance was fertile ground for abuse. Theauthorities took almost no notice of their incentive. Ittook the publication of important documents providedby the wife of Roland Toth to finally draw publicattention. Toth was the Director of the Department ofForeign Assistance of the Slovak Republic’s GovernmentOffice and a key figure responsible for the managementof EU funds, and the documents supported manyprevious claims of abuse and manipulation. A delegationof the Committee on Budgetary Control of the EuropeanParliament, led by Herbert Bosch, came to Slovakia inJune 2001 to monitor the implementation of EUprograms and control systems. The Committee foundthat: “Early warnings had not been taken seriously,investigations started too late and initially the impressionwas given that there was a lack of will to investigate thecase in depth”.1

Since March 2001, official audits, the media and NGOshave revealed a number of shocking findings whichgenerated pressure for changing both EU and Slovakmanagement of aid, mostly Phare. Unfortunately,although Brussels and Bratislava announced that the casewould be closed by mid-2002, the adopted measures arefar from satisfactory and should be considered only thefirst steps towards healing the entire system.

Friends of the Earth Slovakia (FoE-S), one of theNGOs fighting for transparency in public finances, found

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several deficiencies that enable manipulation in thedecision making process of Phare programmes. Theseinclude:

• Lack of professional capabilities;• Weak institutional framework;• Weak monitoring;• Poor supervision;• Non-transparent planning;• Organised chaos; and• Starting over

Lack of Professional Capabilities

One factor that both blocks reforms and eliminatesofficials’ direct accountability is the practice of recyclingbureaucrats within public administration. This is not an EUmonopoly, but is also practised to a great extent in candidatecountries. Bureaucrats who failed to fulfil their duties orwere dismissed from their posts due to irregularities or evenabuse of office were often immediately employed at anotheragency, and participated in making decisions on even largeramounts of EU funds than they had before. In Slovakia, nomechanism or standard exists for assessing the quality ofwork of staff involved in pre-accession assistance, and along-term and consistent strategy for increasing professionalabilities (e.g. through training) is missing as well.

In addition, available information indicates a ‘brain-drain’ at the Slovak agencies administering EU aid asscandals force officials to leave and decreasing salaries driveoff many other qualified individuals. It is also possible thatthese people, trained with EU funds, used their publicservice to build private companies which will consult publicagencies in the future – once again earning EU funds.

Weak Institutional Framework

The mismanagement of pre-accession aid was, however,more the result of an institutionalised system than merely ofinadequate personnel. Investigations by the Slovak SupremeAudit Office, unpublished EU reports and NGO analysesrepeatedly indicate a poor and chaotic administrative

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structure that led to employing unqualified people or allowedoverlapping duties.

For example, the Central Finance and Contracting Unit(CFCU), a key institution in the financial management ofPhare projects, was established in 1998 to strengthen theinstitutional capacity of the Slovak Government foreffectively implementing Phare targets. The EU providedEUR 1,1 million for this purpose, and almost 100% of theCFCU budget was covered by Phare funds. Salaries ofCFCU experts reached up to EUR 1900 monthly – wellabove the Slovak average and more than the gross monthlyincome of a member of the government. It was expectedthat the CFCU would prepare the conditions for relevantgovernmental institutions to take over its tasks once EUresources ran out and CFCU duties were transferred toother state institutions. Instead, the CFCU turned into anisolated and non-transparent institution that did not allocateadequate funds to train other agencies’ employees. Thiscreated serious problems, because Phare contributions tothe CFCU over three years (starting in 2001) are scheduledto fall to 60%, 30% and 0%.

Thus, when Slovakia joins the EU and the CFCU dutiesbecome integrated into the existing government structure,Slovakia will have no personnel or institutions ready toadminister the EU’s structural funds. It is, therefore, hardto expect an increase in the system’s efficiency. Moreover,the CFCU (responsible for implementation2 ) wassubordinated directly to the Department of ForeignAssistance (responsible for programming3 ). This, combinedwith an excess of duties and a lack of information forregional and government departments, created idealconditions for significant manipulation of Phare resources.4

At the same time, the vague delimitation of key Slovakofficials’ powers and duties resulted in a high concentrationof control under the Director of the Department of ForeignAssistance – who at the same time functioned as theExecutive National Aid Co-ordinator.

Poor administrative structure and staffing significantlycontributed to the country’s reduced capacity for absorbingEU funds. For example, Slovakia was the only candidatecountry which failed to utilise all available ISPA funds in2000, despite exceptions enabling a disproportionatedistribution of resources (27% for environmental projects

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and 73% for projects in the transport sector).5 The unspentEUR 4 million were given to Slovenia. According to CarstenRasmussen, ISPA desk officer at DG Regio, the low qualityof submitted projects may cause Slovakia to lose anadditional EUR 20 million in 2002. Similarly, Slovakia’sSAPARD agency did not receive accreditation until April2002, although the agency had been operating since January1, 2000, and employed around 90 people. The main reasonsfor this were the quality of personnel, the lack of structuresfor implementing selected measures and deficienciesreported by the auditor.6 As a result, the EU agreed thatfunds allocated for 2000 and 2001 could be utilised up tothe end of 2002. For the period from 2000 to 2006, the EUhas allocated approximately EUR 18,3 million per year forSAPARD in Slovakia. Should Slovakia not use the allocatedsum it will definitely lose it.

Weak Monitoring

Slovakia’s system for managing EU assistance lackedany quality assurance mechanism, limiting itself instead tothe quantitative evaluation of projects. Cohesion andstructural funds, however, require an incomparably moresophisticated system which includes quality control. Insteadof building a durable monitoring system compatible withSlovakia’s future needs from the very beginning, the EUinvested a lot of money into a system which will soon beunusable.

A new monitoring system for the future structural fundsis currently being planned. However, due to the failure ofthe expected twinning project, the whole process lags behindschedule (for example, by September 2002, not even theanalysis of current institutional, legal and technicalbackground for such monitoring had been conducted) andsome officials suspect that the system will not be fullyoperational by the expected date of accession.

Poor Supervision

The decision-making culture which gave critical controlover Phare funds to a limited group of people was to a

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significant extent determined by a lack of supervision byboth the Slovak authorities and the EU Delegation inBratislava. As a result, instead of being a steady bulwarkagainst the abuse of foreign aid, the Phare managementsystem actively encouraged the manipulation of resources.

According to Jozef Stahl, chairman of the SlovakSupreme Audit Office (SAO), the SAO did not receivethe authority to monitor the use of foreign funds untilFebruary 2001. Once given this authority, its attempts atenforcement were met with resistance from theGovernment Office. According to Stahl, at the beginningof 2000 the Government Office knowingly misinformedthe EU by stating that no independent audit office existedin Slovakia, although the SAO had been established in1993. Stahl was also surprised that the EU showed nointerest in knowing who supervised the utilisation of itsfunds in Slovakia, or how this was carried out.7 “Therewas room for corruption,” he admitted.8

Not only Phare projects are affected, but ISPA-fundedprojects as well.9 According to Carsten Rasmussen, ISPAdesk officer at DG Regio, even after the Slovakgovernment announced strict measures for combatingabuses in early 2002 in reaction to the corruption scandal,the situation does not seem solved. “We see a certainpolitical background in decision-making”, he added.10

CEPA, a Slovak member organisation of the CEEBankwatch Network and Friends of the Earth, has alsopointed out another issue: the danger of channellingISPA funds towards private companies. ISPA is currentlyfunding new sewage treatment systems for themodernisation of water and sewage facilities. If privatemultinational companies succeed in privatising waterservices, ISPA-funded investments will primarily servetheir interests. In addition, the portfolio of ISPA- andPhare-funded projects in Slovakia suggests that therehave been attempts to design projects according to theneeds of major regional polluters who have strong linksto the political elite in the region. The success of suchefforts represents not only a direct violation of the‘polluter pays’ principle, one of the key elements of theEU’s environmental policy, but also provides anotherunfair public subsidy by-passing EU regulations on stateaid and competitiveness.

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For a long time, the EU turned a deaf ear to NGO callsfor reducing the EUR 5 million minimum for individualISPA projects, arguing that such a limit directly encouragedthe development of overestimated projects whose capacitiesfar exceeded real needs.11 Their position was supported bythe Minister of Environment and representatives of Slovakmunicipalities. In late 2001, the EU finally announced thatalthough it was not in favour of decreasing the EUR fivemillion limit, it could potentially support clusters of smallerprojects submitted at once. 12

Non-Transparent Planning

Under normal circumstances, the basic requirement fordistributing public funds – a kind of filter for the selection ofthe projects submitted – should be a plan with clear prioritiesand goals. This plan should reflect real needs and should bedeveloped by those the plan is to serve. The planning processshould have clear and stable guidelines in order to make allparticipants aware of their roles. The process should not takeplace under time pressure.

The situation in Slovakia has been different. The countrywas invited into the first round of candidates for EU accessionlater than its neighbours, and therefore has had less time toprepare all basic documents. This misfortune was multipliedeven further by Slovak institutions’ lack of co-ordination onboth the national and international level.

Preparation of the basic documents for pre-accessionassistance (e.g. the Sectoral and Regional Operational Plansand the National Regional Development Plan) wascharacterised by chaos and the absence of clear guidelines.The officials in charge of this process often ignored the requiredpartnership principle, through which the EU wished to ensurethat these documents would be developed with the activeparticipation of social partners (e.g. NGOs and municipalities).In those instances where attempts at partnership were made,document preparation was paralysed by ever-changing rules,a vague division of duties and the incompetence of an officialapparatus which received late and often contradictoryinstructions from the EU. These deficiencies were reflectedin the poor quality of the resulting documents, which weremainly copies of old government strategies and a simple

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summary of the individual ministries’ already-plannedinvestment activities, inherited from previous governments.None of the documents were subject to a StrategicEnvironmental Assessment (SEA).13

The current preparations of the National DevelopmentPlan, a major programming document for Sectoral andRegional Operational Plans as well as for cohesion andstructural funds for 2004 to 2006, are even worse and havenot involved any public participation. Any ‘ownership’feelings of the document will therefore be significantlyreduced, and NGOs will have to find a strategy to prevent asimilar situation during the next programming period (2007-2013). Clearly, the Slovak Government has not learned fromits previous process-related failures and the EU is still unableto enforce the partnership principle.14

The significance of high-quality planning is generallyunderrated in Slovakia. Pre-accession assistance is regardedas a cheap source of income, and is approached with thisattitude. In practice, the preparation of programmedocuments is often considered more important than theactual distribution of pre-accession funds. Some CentralEuropean development analysts even predict that the poorchannelling of financial assistance to less-developed regionscould have devastating effects.15

Organised Chaos

The absence of unambiguous, binding and enforceablerules regulating both the programming and implementationof Phare in Slovakia is closely linked to the issue of officials’duties and responsibilities. Until recently, there was almostno legal framework in place and the whole project cycleprovided fertile ground for those controlling the system todirect the funds where they wanted. The absence of clearrules at the Department of Foreign Assistance was alsoaffirmed by an internal audit at the Government Office asearly as summer 2000.16 However, the audit’s seriousfindings were kept confidential and the Slovak Governmentdid not even inform the EU Delegation in Bratislava aboutthe results until June 2001.

Under such conditions, one of the major methods formanipulating the funds was the selective transfer of

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information between Bratislava and Brussels and theprovision of incomplete or late information about decision-making procedures, deadlines and grant conditions topotential beneficiaries and the public. This made it possiblefor a few key Slovak and EU officials to arbitrarily decidewhich projects would be submitted for approval and whichwould not. The projects were allegedly often prepared by asmall circle of applicants who were well informed in advanceand therefore were the only people able to meet projectdeadlines and quality requirements.

This organised chaos in Phare programming was pointedout as early as August 1999 in a letter from 16 NGOs toPrime Minister Mikulas Dzurinda. The letter stated: “theturbid waters of the rapid process increase the risk ofnepotism and the corrupt misuse of EU assistance.”17 Themedia also published information about the frequentmanipulation of the tender process, corruption in theselection of Phare-funded experts and consulting companies,and conflicts of interest of officials involved in bothprogramming and implementation. Maria Kadlecikova,Deputy Prime Minister for European Integration, whoreplaced Pavol Hamzik after his dismissal in May 2001, statedthat the scandal surrounding the use of EU funds involved“nepotism, conflicts of interest, influencing and especiallynon-transparency”.18 However, she added, it was impossibleto prove 90 % of these allegations due to missing or evendestroyed documentation.

Slovak legislation did not provide effective enforcementtools for preventing the abuse of authority, conflict ofinterest (with the exception of high-level state officials) andthe manipulation of public funds. Part of the problem wasundoubtedly the absence of a civil service act in Slovakia(Parliament eventually passed one in July 2001 and it cameinto force in April 2002) and effective regulation of thefinancial control of public institutions, including pre-accession funds. For example, some state employeespromised to refrain from business activities, for which theyreceive a 25 % supplement to their wages, but supervisionof this program is almost non-existent. It was predicted thatfor most cases of Phare mismanagement before March 2001it would be impossible to charge specific people withcriminal acts. Indeed, none of the deficiencies surroundingthe corruption scandal in Slovakia were ever classified ascriminal and nobody was found guilty.

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Starting Over

The ‘Toth case’ was sparked on March 12, 2001, by aletter from Toth’s wife to Prime Minister Dzurindacontaining over 70 supplemental pages in which she calledattention to the widespread, co-ordinated misappropriationof Phare funds and abuse of authority by her husband andhis team. A few days later, Toth was dismissed from hisfunction as Director of the Department of ForeignAssistance of the Slovak Republic Government Office andas Executive National Aid Co-ordinator. This provoked amass reaction in the media and a temporary freeze by theEU of all tenders and contracts for Slovakia.

Subsequently, Friends of the Earth-Slovakia, the SlovakProsecutor-General, the police, the European Anti-FraudOffice (OLAF) and later also the Slovak Supreme AuditOffice (SAO) initiated separate investigations. Due topowerful political and public pressure, Pavol Hamzik wasdismissed from the post of Deputy Prime Minister forEuropean Integration. In June, a mission of the BudgetaryControl Committee of the European Parliament (EP)visited Slovakia. Its final resolution presented at the EPstated: “the Toth case spotlighted a whole series of structuralshortcomings in the system, which currently make it difficult,if not impossible, to exercise effective control over the useof EU funds in Slovakia and public expenditure ingeneral.”19 In October, the same committee conditionedthe release of EUR 15 million of 2001 pre-accession aid tothe submission of final reports by OLAF and SAO.

Four weeks later, Slovakia’s new Deputy PrimeMinister for Integration, Maria Kadlecikova, announced“revolutionary changes at the Office of Government”, anda set of measures to improve the financial managementof pre-accession funds was submitted to the EU. In themeantime, several institutional reforms wereimplemented. For example, programming for Phare CBCwas transferred from the Office of Government to theMinistry of Construction and Regional Development(August 2001) and, most importantly, the position of theExecutive National Aid Co-ordinator was cancelled(December 2001). The web sites related to pre-accessionaid were significantly improved and a co-ordination

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directive on EU aid was adopted. Some already approvedprojects, such as the EUR 500 000 Stupava motorwayinterchange, were cancelled. Walter Rochel, head of theEU Delegation in Bratislava, ended his mission in Slovakiaearlier than expected, in December 2001.

The above mentioned steps should have been taken atleast four years ago, say Friends of the Earth - Slovakia,and must not be considered a resolution of the problembut rather the beginning of a complete reform of the wholesystem.

Conclusion

To date, the experiences with pre-accession assistancein Slovakia show that the transformation of society towardsdemocracy, transparency and sustainability is still not agovernment priority. Consequently, no adequate support– whether in technical or political terms – has been madeavailable for this purpose. Furthermore, the EU has beenincapable of creating effective mechanisms for ensuringthat Slovakia fulfils the basic goals of such atransformation.

This raises a few pertinent questions. First, how muchgreater would the effect of the EU funds have been ifdecisions regarding them had been made transparentlyand democratically, with respect for social priorities?Second, what measures will Brussels and Bratislava taketo thoroughly replace the present system with a new,transparent, and democratic system for objectivelyadministering pre-accession funds and subsequentstructural funds? Third, how much will it cost and willthese measures be implemented in time?

Now, just as memories of the recent embezzlementscandal begin to fade, it seems that the process ofreforming the system of pre-accession fund managementhas stopped halfway. Most officials no longer consider pre-accession assistance a relevant issue and have re-focusedon building the institutional framework for structuralfunds. This suggests that few positive conclusions havebeen drawn from the scandal and translated into politicalpractice, a situation that may have a cardinal impact onthe quality of future EU aid administration.

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Footnotes

1 Report #1/2001 by the committee delegation on its visit to Slovakia:June 19-22: 2001.

2 The implementation process of the Phare Programme consists offive phases: procurement, contracting, financing, monitoring, andevaluation.

3 Programming consists of a preparatory stage, identification ofprojects, project preparation, submission of projects for approval bythe EU, and preparation and signing of Financing Memorandum.

4 Slovakia’s experiences with the CFCU are important, since similarunits are being established in other countries.

5 DG Regio: ISPA Report: February: 2001.

6 The agency will hold the sole responsibility for selecting andmanaging SAPARD-funded projects, arranging finance and carryingout controls.

7 Pravda: A Clear Road to Union Funds: April 28, 2001.

8 SME: Roland Toth is innocent for police: May 15, 2002.

9 For example, in 2001 six projects received technical assistance(approximately EUR 180.000 for each) to be technically finalisedand eligible for submission to the ISPA Management Committee.One of them was a project called ‘Protection of drinking water fromStarina Dam’. NGOs active in forest and water protection in theregion strongly opposed the project from the very beginning andargued that the project would only increase the danger to the Starinadrinking water reservoir while contributing to other environmentaldamages in the region. The complaints were ignored by both theEU and Slovak Ministry of the Environment. Only after wastingISPA funds for technical assistance, growing NGO protests and apersonal site visit by C. Rasmussen in late 2001 did the EU expressobjections to the project and the Ministry of the Environment stoppedany further work in December 2001.

In the transport sector, the absence of effective public control createsfertile ground for irregularities in the implementation phase. InDecember 2001, for instance, an article appeared suggestingmanipulation of the tendering process concerning a EUR 41 millionrailway project.

SME: Prime Minister to Railways, Railways to Prime Minister:December 11, 2001. SME: Changes in Selection Committee Did Not

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Endanger Tender: December 7, 2001.

10 Katarina Zackova: Slovakia not even able to use ISPA funds whichare offered: TREND: January 16, 2002.

11 According to the NGOs, the ISPA-funded wastewater treatmentplant in Banska Bystrica could be replaced by a significantly lessexpensive sewage system. The current limit for ISPA projectsincreases chances that smaller cities and villages will submit projectsfor unnecessarily large facilities just to meet eligibility criteria.

Consortium ETP Slovakia, REC Slovakia and DAPHNE: PositionPaper of Slovak NGOs: November, 2000.

12 SME “The EU will also support smaller regional projects”: December11, 2001.

13 It is therefore natural that, for example, ISPA-fundedenvironmental projects are exclusively simple end-of-the-pipesolutions for environmental problems (sewage treatment plants)rather than projects focusing on prevention.

14 It is worth noting, however, that in some countries (e.g. Estonia),the current process of development of the National DevelopmentPlan significantly improved when compared to the process ofpreparing programming documents for pre-accession assistance.

15 Germany is often cited as an example; after unification, its easternpart was given the right to utilise EU structural funds. No appropriatedomestic priorities had been specified at the time, so structural fundswere steered towards projects which were at the centre of EUattention, but which did not entirely correspond to the needs ofeastern Germany. Since any project supported from these fundsrequired co-financing of 25% from domestic sources, these projectsabsorbed the majority of the country’s disposable resources, whichwere then lacking in other areas. Slovakia faces a similar risk in thatISPA infrastructure projects emphasise project scale rather thansocial and regional significance.

16 Gabriela Kaliska: Former Government Official Denies Accusation:Pravda, April 7, 2001.

17 For example, a representative of the EU Delegation confirmedthat Executive National Aid Co-ordinator Roland Toth spreaddisinformation during programming of Phare ECOSOC in October2000.

18 Daily SME: September 4, 2001.

19 Report #1/2001 by the committee delegation on its visit to Slovakia:June 19-22, 2001.

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Recommendations

RecommendationsRecommendationsRecommendationsRecommendationsRecommendations

The goal of the NGO recommendations is to integrateenvironmental principles in all areas of pre-accessionactivities, to increase public participation, to significantlyincrease the consistency and quality of administering pre-accession assistance and to build the proper legal andinstitutional basis for the future management of structuralfunds. Our general recommendations, which we feel wouldhelp achieve sustainable development, are summarisedbelow.

National sectoral policies, as well as national andregional strategies and plans should be subject to a StrategicEnvironmental Assessment. The newly prepared NationalDevelopment Plans, Single Programming Documents orOperational Programs should be subject to SEAs as well,as stated in the EU Directive on SEAs.

At the midterm review, guidelines for pre-accessionfunds (especially ISPA and SAPARD) should be revised inthe spirit of the EU Strategy on Sustainable Development.Guidelines for future structural and cohesion funds shouldintegrate criteria for sustainability.

Transparency and public participation in decision-making should be among the key requirements for funding.The public participation process cannot be treated as anobstacle for the smooth realisation of projects; neithershould it be treated merely as a formality, as a mere box totick in the funding process. Other co-financing institutionssuch as the European Investment Bank also must berequired to show increased openness and transparency.

We need a transfer of know-how as well as resourcesdedicated for better preparation of projects and moreefficient use of EU funding. Technical assistance andcapacity building for the staff at all administrative levels isneeded just as much as – if not more than – investments innew highways, especially if the accession countries are touse structural funds wisely in the future.

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Western consultancy companies helping to prepareprograms, strategies and projects within the scope of pre-accession funds must be closely scrutinised for theircapacity, quality of work and credibility in order to avoidthe inefficient use of resources. Bearing in mind theimportance of sufficient capacity in the accession countriesfor the future use of structural funds, priority should begiven to involving local consultants and developing high-quality local consultancies.

Also needed are resources to increase NGOs’ abilities forbecoming a strong part of the process, as both contributorsand watchdogs. Both the European Commission and thegovernments of the accession countries must involve the publicand NGOs in the preparations for using future structural andcohesion funds in a timely and proactive manner.

Human Resources

The professional abilities of people within the agenciesmanaging pre-accession assistance must be significantlyincreased and sufficient resources allocated for staffrecruitment and development. Where necessary, the EUshould temporarily reduce restrictions on the salaries ofcandidate countries’ state employees. If the EU does notpromote the employment of capable and independentprofessionals for managing the aid programmes, the chaos inaid administration will never come to an end, even with theproper legal framework. The accession countries do not havesufficient resources for hiring professional staff, partiallybecause of growing pressure from international financialinstitutions to reduce public expenditures. The salaries ofadministration staff managing pre-accession funds should notbe cut until personal skills are well developed and stabilised.

Independent public agencies (such as the Office for StateService) should be in charge of all staffing issues (recruitment,training and remuneration). An independent assessment ofthe quality of the staff performance is needed and should bedone both on a regular and an ad-hoc basis. All staff shouldbe subject to their respective country’s law on state/civilservice, which must provide sufficient prevention againstabuse, corruption and irregularities (e.g. through differentlevels of sanctions).

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Those who actively contribute to the mismanagementof EU funds at any level, whether in the candidate countriesor the EU, should be dismissed from their posts in publicinstitutions.

Institutions

National governments and the EU must build effective,transparent and democratic institutions for managing theinvestment projects and incorporate the concept ofinstitutional development into the projects wheneverpossible.1

Each country should prepare an independentcomprehensive assessment of its institutional framework,focusing on the quality of respective agencies. Such anassessment should undergo serious public discussion andresult in a proposal for improvements. A good institutionalframework should avoid overlapping duties that aremutually incompatible, concentrate authority or have anunclear definition of responsibilities.

Financing and contracting, which in some countries iscurrently under the CFCU (Central Finance andContracting Unit) should be decentralised to the respectiveministries/agencies or to the respective branches of theMinistry of Finance. However, one central unit must existthat is responsible for the first and final approval of funds.This decentralisation must be accompanied by strengthenedmonitoring, evaluation and supervision by both localgovernments and the EU Delegations.

Ministries of Finance (or National Funds or otherrespective central authorities) should be given astrengthened general co-ordination role for co-financingand disbursing funds.

Programming must be strictly separated fromimplementation. There should be a clear political responsibilityfor decisions related to EU assistance. Even if bothresponsibilities are included within the same ministry, theprogramming and implementation agencies should be directlysubordinated to their respective ministers. The agencies’budgets and personnel must be separate and should beregularly audited externally (e.g. by the Supreme Audit Office)

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and internally (by control sections in the respective Ministries).The state procurement authorities should be integrated intothe implementation process while the agencies regulating stateaid should participate in programming.

Monitoring, Evaluation and Supervision

Clear, transparent, and participatory mechanisms forproject monitoring and post-project evaluation must be putin place. Individual programs and projects need to beregularly evaluated, not only for financial accountability,but especially in qualitative terms (how they contribute tothe overall goals of the pre-accession funds, how theydevelop capacities and structures in preparation forstructural funds, how they reflect social priorities, how theyincorporate sustainability principles, etc.). All reports mustbe publicly available.

All monitoring committees and working groups createdfor decision-making on pre-accession assistance shouldstrictly follow the partnership principle. Their dutiesshould be clear and their members should receive trainingif requested. Minutes from the sessions must be availableto the public. All members of monitoring committees needto have access to respective project or programdocumentation. The results of monitoring and evaluationmust be taken into account in future funding programs.

Both local governments and the EU Delegationsshould regularly check whether there are any vestedinterests within their staff and the staff of any agenciesinvolved in both programming and implementation. Thoseentities (companies) and individuals that violate theconflict-of-interest regulations must be disqualified fromfuture eligibility for receiving pre-accession funds.

Both the candidate countries and the EU Delegationsshould set up effective complaint/appeal mechanisms (e.g.compliance hotline, “whistle-blower” hotline,ombudsman, or the like). These mechanism should haveclear structures and citizens should be aware of where andhow to complain or send comments or appeals. Regularreports should describe complaints and the reports mustbe made public and listed on a web page.

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Information Disclosure

Candidate countries’ past information/communicationstrategies should be assessed by independent external expertsand the results incorporated in updated strategies. Informationcampaigns must include regular reporting (provided on aspecial web page) and provide the public with full and timelyinformation about procedures, timelines and structuresassociated with both managing pre-accession aid and theprocess of preparing institutions for the management ofstructural funds. In addition, all public reports, evaluations,assessments, and other aid-related documents should be easilyavailable to the public.

Numerous existing documents with regular updates arebeing prepared within the EU and candidate countriesgovernmental services.2 These documents include many usefulrecommendations and conclusions that could increase thequality of EU assistance and provide the basis for futureprogramme design and implementation. Instead of keepingthese documents internal and confidential, they should bedisclosed to all interested individuals and organisations andused as policy formulation and assessment tools. Both nationalgovernments and the EU Delegations should provideinformation on where one can obtain certain documents/decisions/minutes.

Governments should make public complete manuals on howto apply for support, what procedures are involved, decision-making, eligibility criteria, etc. Such manuals should include alist of common terms, with clear definitions, used in alldocuments in all agencies and ministries. Also, completeinstitutional frameworks and all relevant procedures, guidelinesand codes must be publicly available in the national languages.

A complete list of projects funded from pre-accession aid– including basic information (such as a review of co-financing)– must be easily available to the public. The list should beupdated on a regular basis.

The tendering process needs to be more transparent. Sincethe EU funds and most projects involved are public, evaluatingcommittees must not keep results confidential, and corporatebids including lists of all involved consulting companies withnames of the experts – must be disclosed.

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Project Cycle

Programming should strictly respect the partnershipprinciple and should include fair participation from theregions. If needed, regional and sectoral operational plansshould be re-evaluated in a democratic and transparentmanner without time pressure.

Project identification: the involvement ofrepresentatives from citizens’ groups and regionalorganisations should be strengthened. Criteria for projectselection must be clearly based on program documents thathave undergone a public evaluation process. For largeinfrastructure projects, the EU should require projectpromoters to develop a cost-benefit analysis, opportunitycost analysis, and a least-cost study for every project. Inthis way, alternative options can be considered before aproject is approved.3

Formulation/Implementation: the EU takes a long timeto approve technical assistance for projects. During suchlong periods, accession countries cannot proceed withprojects, and when the technical assistance is finallyapproved they find themselves under time pressure. TheEU should therefore delegate more competencies to theirrespective delegations dealing with these issues.

Members of the tendering commission should receivecomplete information about the tenders and tenderingprocedures in a timely manner and in their native languagesbefore the commission meets. The members of thetendering commission should receive training on theprocedures and background of the project, if requested.

ISPA

ISPA should encourage the development of sustainabletransportation systems in the accession countries, rather thanfocusing on the development of TENs. Since roadtransportation, which is favoured by many governments inthe accession countries, has negative impacts on humanhealth and the environment, the promotion of publictransportation should be considered a main ISPA

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transportation priority. ISPA funding should not financeprojects which may destroy protected nature areas orendanger biodiversity.

As the maintenance of the existing road infrastructurein the accession countries requires tremendous financialresources, the modernisation of old infrastructure shouldtake precedence over the construction of new roads.

Urban public transport projects should be eligible forISPA funding, especially in big cities where investments inpublic transportation would have positive effects on thequality of transport, more efficient land use and increasedair quality.

ISPA investment in the waste sector should promote acomprehensive approach to waste management, aiming atreducing waste and at the same time promoting selectivewaste collection, reuse, recycling and composting of biowaste. These activities should be obligatorily accompaniedby public awareness campaigns. Incineration should be theleast favourable solution, used only if necessary.

The efficiency of ISPA projects should be assessed inorder to achieve the highest benefit to the environment withthe most effective use of money. Not only should theimmediate investments be assessed, but also the project’swhole life span, long term effects on the environment andthe number of beneficiaries.

Although the EC allows clusters of small projects addingup to its EUR 5 million threshold to apply, ISPA guidelinesshould be revised to make projects under EUR 5 millioneligible for funding. All projects, especially those in thewastewater treatment sector, should carefully assess futuremaintenance costs and make sure to avoid overpriced andoversized solutions.

SAPARD

Money from SAPARD should go to organic farming,rural development and agro-environmentally friendlyprojects instead of supporting intensified production andfood processing. Therefore, each country should preparean agro-environmental action plan within the scheme of

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Recommendations

SAPARD. In addition, potential negative impacts onbiodiversity should be assessed in every country.

Requirements for local co-financing for ruraldevelopment and agro-environmental projects should bedecreased to make SAPARD easily accessible to smallerfarmers and businesses.

SAPARD funds should not be used to harm the forestrysector in the accession countries by financing forest roadsthat would lead to increased logging and timber processing.Support for local, small-scale producers should be the maintarget, instead of subsidising large multinationalagribusiness.

Footnotes

1 For example, the EU should reconsider its policy of providingtechnical assistance for some projects. Currently, technicalassistance is provided by EU-based framework contractors. Thesecontractors consume around 10% of the project costs while usuallynot transferring any know-how or experience to experts incandidate countries. Projects designed by foreign companies donot always reflect local conditions while responsibility for theirquality is fully placed on the accession country. The EU shouldcreate incentives for local experts to be more active in projectdevelopment and encourage EU-based framework contractorsto train local experts in the project-planning phase.

2 E.g. the finding of various EU or European Parliamentmissions, various types of evaluation reports, audit reports, OMASevaluation reports, etc.

3 For instance, plans for building a waste incinerator shouldexplore options other than end-of-the-pipe solutions (e.g.recycling) and only then, after assessment of the best option, buildan incinerator – but only with real and needed capacity.

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The D8 MotorThe D8 MotorThe D8 MotorThe D8 MotorThe D8 Motorwaywaywaywaywayin the Czech Republicin the Czech Republicin the Czech Republicin the Czech Republicin the Czech Republic

Introduction

The D8 motorway is part of the Berlin-Prague-Budapest-Sofia-Istanbul European multi-modal transport corridor IV.From Prague, the D8 heads north and connects with theGerman A17 motorway in the Eastern Krusné Hory/Osterzgebirge. The 23,3-kilometer long section betweenTrmice/Ustí nad Labem and the German border may be co-financed by ISPA funds. This section of the road would harmsites of outstanding biological value on the top plateau ofthe eastern Krusné Hory, where district authorities declareda Nature Park in 1995. Furthermore, mapping for the Natura2000 has proven the biological value of the site and a proposalis being prepared to declare the site a Special Protected Areain accordance with the Birds Directive.

A Threat to Environmental Values

As is usual in cases of controversial motorway schemes,a number of legal requirements were ignored or distortedduring the project’s preparatory phase in order to enableconstruction authorities to issue the construction permit.

The problems began in 1993, when the Czech cabinet‘re-approved’ the 1963 Motorways Development Schemewithout submitting it to an Environmental ImpactAssessment (EIA), as required since 1992. As a result,designs for the D8 motorway from Prague to Dresden remainsuch that the road will first destroy the landscape characterand natural value of the České Středohoří ProtectedLandscape Area and then the mountainous plateau of theeastern Krusné Hory (see Box 1). This is being done thoughthe so-called ‘fragmentation tactic’, with the leastcontroversial segments built first, thus increasing the politicalpressure for issuing permits for the ‘missing links’.

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Czech Republic

Box 1Box 1Box 1Box 1Box 1Natural values of Eastern Krusné Hory NaturNatural values of Eastern Krusné Hory NaturNatural values of Eastern Krusné Hory NaturNatural values of Eastern Krusné Hory NaturNatural values of Eastern Krusné Hory Nature Pe Pe Pe Pe Parkarkarkarkark

The Eastern Krusné Hory Nature Park was declared by the Ustí nadLabem District Office in 1995; its size is 2235 hectares. It was foundedaccording to the Czech Nature and Landscape Protection Act, whichsays that a Nature Park can be established by the Nature ProtectionAuthority by the legally binding norm and “limit such exploitation ofthe site, which would lead to destruction, damage or disturbances ofthe state of the site.”Very important ecosystems in the area include marshes, peat bogsand above all relics of original mountain floriferous meadows with anumber of protected and endangered flora species. After 1989, thepresence of 23 specially protected flora species was proved, threespecies fit into the category of critically endangered plants, 13 aresignificantly endangered and 14 are endangered.The area is an important site for bird nesting of species linked tomarsh ecosystems. Those critically endangered and endangerednamed in the Bird directive include: red kite (Milvus milvus), blackstork (Ciconia nigra), red-backed shrike (Lanius colluri), hen harrier(Circus cyaneus), corncrake (Crex crex).

Box 2Box 2Box 2Box 2Box 2Ignoring the prIgnoring the prIgnoring the prIgnoring the prIgnoring the project’s SEAoject’s SEAoject’s SEAoject’s SEAoject’s SEA

The SEA assessment for the Motorways Development Scheme wascarried out only in 1998, when work on some stretches of the D8 wasalready underway. A comparison of the impacts of the ‘approved’surface options with the tunnel options and the potential alternativeroute Prague-Slany-Most-CZ/D border (R7/R28) clearly favoured thelast option, with the tunnel option through České Středohoří andEastern Krusné Hory placing second.The SEA has this to say about the incriminated ‘ISPA’ section: “theplans for connecting the D8 and A17 in the manner proposed by theconstruction authorities harms a very valuable and complex part ofthe mountain ridge of Eastern Krusné Hory Nature Park and the LSG(protected landscape area) in Saxony. In this area, the motorwaywould duplicate the already existing road, while the more westernMost-Freiberg corridor would also provide a cross-border link, whichis missing in that region.”1 The recommendations of the SEA Expertteam, which favoured several options less harmful then thoseintensively promoted by the Ministry of Transport, were completelyignored by the cabinet when deciding on the project.

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Characteristic for EIA procedures for controversial projectswas the exclusion of alternatives from the very beginning.Options with tunnels of reasonable length or optionsbypassing the most valuable sites were not considered. Whenthe SEA for the entire Motorway Development Scheme,done in 1998-99, came out in favour of alternatives (see Box2), the cabinet simply ignored its conclusions.

Currently, two sections remain to be built, both of themvery controversial. The problems with the section acrossthe České Středohoří Protected Landscape Area, for whichthe EIB is providing a loan, are well known. Less known isthe second section from the city of Ustí nad Labem to theCzech-German border, which would cross theeastern part of the Krusné Hory Mountains,including several kilometres of a proposed birdarea of Community importance (SPA). This areawill in effect be split in two, with just oneexception above a short tunnel. This section ofroadway requires co-financing by ISPA andCzech authorities. The total cost of the projectis roughly EUR 200 million, with ISPA coveringEUR 130,9 million.

At the beginning of the 1990s, Germanyconducted an assessment to find optimalcorridors and came back with a recommendationfor a different route, the so-called Freibergcorridor, which would cross the mountains morewestward. Under Czech pressure, however, theDresden-Ustí nad Labem route was chosendespite the larger environmental impacts, andCzech authorities rushed to close a treaty withGermany on the location of the motorway’sborder crossing. The treaty serves as anadditional argument for the Czech transportministry to increase pressure on natureprotection authorities by threatening to hold themresponsible for breaching an international treaty if the moreenvironmentally sound option is accepted.

Neither the border section of the D8 nor the bordersection of the A17 on German side were submitted to across-border EIA, despite the fact that both the CzechRepublic and Germany have signed the Espoo conventionon assessment of the environmental impacts of projects with

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Photo from already constructed segment of D8motorway near Usti nad Labem.Designers were apparently very sensitive tohistorical genius loci...

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Czech Republic

trans-boundary impacts. Furthermore, any motorwaylinking the north and southeast of the continent can hardlybe expected to have only local impacts. Another project onthe Czech-German border, the construction of weirs on theElbe River which carries comparable environmentalimpacts, included a cross-border EIA.

Project preparation was also accompanied by a numberof procedural deficiencies, such as an unequal attitude bythe Ustí nad Labem District Office towards the parties ofthe Land Use Proceeding.

The Role of the EU

The case is significant for the EU for two reasons:1. The motorway route from Ustí nad Labem to theCzech-German border crosses the Eastern KrusnéHory Nature Park in an area where mapping forNatura 2000 has documented habitats and specieswhich, according to EU legislation, require increasedprotection.2. The Czech government needs the ISPA funds if itis to build the section.

Since the beginning of the 1990s, Czech civicorganisations have tried to promote alternative routes forthe D8. Their arguments, however, together with the SEAexperts’ suggestions, have been ignored.

When EU funding became necessary, these groupscontacted DG Environment and DG Enlargement andpointed out the conflict between the EU transportinvestments (ISPA, EIB) and requirements for natureprotection. Ongoing communication regarding the two D8sections in question resulted in a mission by DGEnvironment consultants (March 2002), who visited thesites and met both parties of the controversy(representatives of the Ministry of Transport and Roadsand Motorways Directorate on the one hand, andrepresentatives of environmental NGOs Friends of theEarth and CEE Bankwatch Network on the other).

The consultant’s findings should be provided to the DGEnvironment and DG Enlargement, which will then decidehow to proceed with the request for ISPA funding (as of

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October 2002, no news was available). The projectrepresents an example of pre-1989 influences on thegovernment’s methods – a reluctance to consideralternatives and ignoring public input and the project’senvironmental impacts. Should the EU reject the requestfor funding, it would not only reconfirm its environmentalprinciples, but also contribute towards changing the politicalculture in the Czech Republic. The authorities wouldreceive a clear message that such procedurally deficientprojects cannot count on EU support. On the other hand,if the EU approves the project despite all its deficiencies, itwill strengthen the impression that its promises to adhereto the partnership principle and to environmental prioritiesare just empty talk serving to placate the public.

Footnotes

1 SEA documentation to the proposal of the development oftransport network in the Czech Republic until 2010; expert teamlead by Dr. Miroslav Martis: Prague, June 24, 1999.

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The Struma MotorThe Struma MotorThe Struma MotorThe Struma MotorThe Struma Motorwaywaywaywaywayin Bulgariain Bulgariain Bulgariain Bulgariain Bulgaria

Background

The Bulgarian Government considers the developmentof the Trans European Network (TEN) one of its mainpriorities for infrastructure investment. This view is held notonly because of the need for improving EU integration, butalso because a large amount of money is available from EUpre-accession funds and the European Investment Bank fordeveloping infrastructure projects that are part of the TEN.

Because of its central position on the Balkan Peninsula,four TEN Corridors are to pass through Bulgaria. WithEU support, Bulgaria is planning to build the ‘Struma’Motorway in the southwest of the country, as part ofcorridor no. 4 connecting Dresden, Budapest, Sofia andIstanbul, with a branch from Sofia to Thessaloniki. In 1997,the Road Executive Agency engaged two Bulgarian designcompanies for a preliminary study of the highway. Withoutconsidering environmental protection or human healthduring the design of the motorway’s possible alignment,the Agency required the new highway to follow the existingE-79 road. The experts were not provided any informationabout the protected nature areas situated along the route.In 1998, the design companies came with an initialinvestigation of two alternative routes – the first being awidening of the existing road and the second a new highwaynot far from the existing road. Both alternatives would passthrough valuable nature areas and several towns.

In 1999, the Phare Cross-Border Co-operation Programprovided funds for technical assistance for preparing afeasibility study, an Environmental Impact Assessment anda detailed design of the proposed motorway. The designcompany, SPEA Igegneria Europea, received the same pre-conditions given the preliminary study – the highway was tofollow the existing route. Again, there was no requirementto consider environmental protection during the design. In

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November 2000, the design company presented a feasibilitystudy of two alternative alignments which were almost similarto those of the preliminary investigation.

The project’s cost has been recently estimated at aroundEUR 700 million, which will require external investments.As the highway is part of the Trans European Network, it isvery likely that its construction would be financed by theEuropean Union’s ISPA program and the EuropeanInvestment Bank.

Problems

As planned, the ‘Struma’ motorway would passthrough the whole length of the Kresna gorge. Seventeenkilometres long and very narrow, the gorge is particularlyvulnerable to any infrastructure development. The wholeKresna gorge is a CORINE Biotopes site (Site CodeF00002500) of outstanding biodiversity and landscapevalue, and is slated for inclusion in the EMERALDnetwork and the NATURA 2000 network. According tothe criteria of BirdLife, the gorge is also a globalimportant bird area (code number BGN03). The highwaywould pass through the Tissata Reserve and its bufferzone. The reserve (CORINE sub-site F00002501) isimportant to global conservation as a representative ofMediterranean-zone landscape.

Residential areas spread to the east and the west,reaching the mountain slopes and bordering theCORINE site. The town of Kresna is situated at thesouthern end of the gorge and would be seriously affectedby motorway construction. The Kresna town councilvoted for the creation of a Kresna Nature Park with theaim of preserving the area’s unique flora and fauna andpromoting sustainable development of the regionthrough nature-oriented tourism. The motorway wouldpass 30-50 meters from town, take valuable agricultureland, and cause the deterioration of air quality and thequality of life and safety conditions for the localinhabitants. The negative environmental impact of themotorway on the town and its surroundings wouldthreaten current local incomes and long-term sustainabledevelopment.

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Kresna gorge - site of global conservation importance representative ofMediterranean zone

If the highway is built in the gorge, the local peoplewill also lose the existing road for low- and medium-speedvehicles, as required by the Bulgarian law for highways.

Public Participation

Bulgarian environmental NGOs have unsuccessfullyappealed to the government to consider the Kresna gorge’sbiodiversity value during the motorway design. The groupshave made an effort to follow and become involved in theplanning process from its very inception. Three meetingswere held in 1998 withrepresentatives from theinvestor and the RoadExecutive Agency and itsSenior Expert Council, toinform these officials aboutproblems associated withthe planned route and toinsist on a comprehensiveanalysis of alternatives. TheNGOs’ position, however,was not taken into account.In 1999, because of thegorge’s importance forEuropean biodiversityprotection, the BulgarianNGOs referred their appealto the European Commission (EC) and particularly itsDirectorate-Generals for Enlargement and Environment.The EC replied that it would follow the case closely and nomoney for the EU acquis would be allocated.

In a letter written at the beginning of 1999, the Ministryof Environment and Water stated its support for preservingthe Kresna Gorge as a potential NATURA 2000 site, andcalled for alternatives “outside Kresna gorge” to bedeveloped and “assessed on equal worth” in the EIA study.Later, the ministry four times rejected the EIA study reportpresented by the Road Executive Agency, citing the lack ofalternatives and calling for the expert team to be changed.

NGOs’ concerns about biodiversity protection were raisedonce again when the Phare CBC project started with better

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prospects. NGOs sent several letters and organised a seriesof meetings with all responsible institutions. The main aimwas to provide the implementing agencies with data showingthe importance of the Kresna CORINE site, and to call foran alternative route design to be included in the designcompany’s terms of reference. In August 2000, four NGOsorganised a public hearing on the motorway in the town ofKresna in order to inform local people and hear theiropinions. The citizens of Kresna clearly expressed theirdemand that the highway pass outside the gorge and the town.The direction of the feasibility study was not changed.

Responding to the NGOs’ appeal, the EC Delegationexpressed its desire to look for a solution to the problems. InNovember 2000, the EC Delegation in Bulgaria held ameeting of all stakeholders, where it was decided that theterms of reference given the SPEA design company shouldinclude the development of alternative route-beds.

Several days later SPEA came up with two ‘alternatives’,which consisted of a two-page description and several maps.For this, they received EUR 394 000. The alternatives, whichwere outside the gorge and spared the area’s valuableenvironment, have not been developed further. SPEA wasinstructed to design the doubling of the existing road throughthe Kresna gorge.

In May 2001, a group of environmental NGOs submitteda proposal for designating the Kresna gorge a Protected Area.On December 11, 2001, the Ministry of Environment andWater opened the EIA procedure for the ‘Struma’ Motorwaywithout taking into account the already-begun procedure fordesigning Kresna a Protected Area. Furthermore, the EIAreport, which was financed with Phare CBC funds, fails toassess the area’s endangered biodiversity according to theBern Convention’s Habitats and Bird Directive. The project’slack of comprehensively developed alternatives was notpointed out as one of its weaknesses.

Alternatives

We can choose to build the road elsewhere, or even toexpand railway service. But we cannot choose where to placevaluable nature areas - they are natural phenomena. Their

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destruction often causes irreversible harm to the naturallegacy of the planet. Kresna gorge is the most importantnatural territory along the Struma River - and in Bulgariaas whole - thanks to the very rare climate in the gorge.

The gorge’s significance requires that the motorway beconstructed outside its territory. This could be done sevento ten kilometres to the east at the foot of Pirin Mountain,an alternative that would add a mere 25 kilometres to thelength of the whole transport corridor, and pass through aregion at 750 meters elevation (450 meters higher than thegorge) and with a comparatively poorer landscape alreadyimpacted by human activity. On a map of Bulgaria andEurope the difference between these two alignments - outsideand inside the gorge - is barely noticeable. From anenvironmental point of view the difference is enormous.

Conclusion

Environmental protection has never been a factor in thedecision making process in Bulgaria. Infrastructuredevelopment is considered a main priority and so a lot ofpressure is placed on the Ministry of the Environment toapprove infrastructure projects. In this environment, the EIAprocedure is the only provision for environmental protection,and even the EIA reports, financed by project investors,usually fail to thoroughly examine the extent to which naturewould be affected. Furthermore, the public is generally notaware of its right to provide input during the EIA process,and NGO comments are rarely taken into account.

Commissioner Margot Wallström stated in a letter1

related to the Kresna gorge protection: “the EU pre-accession instruments will only accept financing projects thatare in compliance with EU environmental acquis.” Intransition countries such as Bulgaria, the EU environmentalacquis do not have legally binding power and even if theywere transposed, environmental rules are rarely enforced.Since, however, EU pre-accession funds are supposed to bepromoting EU objectives, they should contain clearguidelines for environmental protection. Leaving theenforcement of environmental principles as expressed byCommissioner Wallstrom to local officials’ goodwill is a weakpolicy towards the environment.

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Bulgaria

Footnotes

1 Letter from September 13, 2001, AB/go A(01)11217 D(01)1773D(01)130678

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HazarHazarHazarHazarHazardous Waste Tdous Waste Tdous Waste Tdous Waste Tdous Waste Trrrrreatmenteatmenteatmenteatmenteatmentin Bulgariain Bulgariain Bulgariain Bulgariain Bulgaria

The safe management of hazardous waste has recentlybecome an important issue in Bulgaria. The country notonly lacks facilities to properly dispose of hazardous waste,but also is in need of effective legislation, financial aid andpolicies to minimise the negative effects of hazardous wastegeneration. Currently, more than 24 million tonnes ofobsolete hazardous waste are stored somewhere in Bulgariaand this amount is expected to increase by 1,3 million tonneseach year. The available information data merely lists thequantitative characteristics of waste. The absence of anestablished national laboratory system for hazardous wastedoes not allow for more precise identification and controlof hazardous substances.1

Background

In order to solve “one of the most serious problems ofthe country in the area of waste”2 , the Ministry ofEnvironment and Water began plans for a National Centrefor Hazardous Waste in 1998. The Ministry will not onlyown the facility, but will also be the institution responsiblefor assessing and supervising the project’s compliance withBulgarian environmental legislation. The project consistsof landfills, incinerators, physical-chemical treatment plants,solidification and recycling. In its ISPA Strategy Paper forthe Environment, the Bulgarian government included theNational Centre for Hazardous Waste among measures tobe funded by ISPA.

Both EU and Bulgarian waste management policiesdeclare the following priorities: prevention of wasteproduction, reuse, recycling, storage, and incineration. Inpractice, however, most resources often go towards the leastsustainable solutions which cause large economic, socialand environmental damage. The National Centre for

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Hazardous Waste may serve as an example. In Bulgaria,there are still many opportunities for changing productionand energy generation processes, in order to make themcleaner and to produce less waste. To this end, sufficientinstitutional development and changes in legislation arenecessary, according to the study Management of HazardousWaste in Bulgaria, financed by the United States Trade andDevelopment Agency in 1996.

The construction of waste incineration plants without awell-developed infrastructure of municipal services andadequate systems of hazardous waste monitoring can onlycontribute to the abandonment of projects aimed at wastereduction at the source, while hampering properdevelopment of services connected with the recovery ofsecondary raw materials. Moreover, waste incinerationtechnologies will not contribute to environmentalimprovement, as they are a significant emission source ofpersistent organic pollutants and other toxic substances.

Instead of developing more sustainable opportunities, theBulgarian government plans to invest EUR 80 million in‘end-of-pipe’ technology, offering a temporary solution forabout six percent of the annually produced hazardous waste.The Minister of Environment claims that “the operation ofthe Centre would ensure the enforcement of the 91/689/EECDirective requirements”3 , but in fact the Treatment Centre’scapacity is only around 80 thousand tonnes annually.

In 1998, the PHARE program provided technicalassistance for the preparation of project documentation. Aconsortium of the Danish company Chemcontrol and theGerman company Fichtner GmbH & Co. KG won thetender. The contract called for the preparation of afeasibility study, a selection of location, an EIA report,preliminary technical documentation, a project fiche eligiblefor the ISPA program and an information campaign.

After the preliminary investigation of 30 sites, fourlocations were identified for further assessment. Due toobjections from the local population, two of these locationswere excluded. Thus, two final alternatives were proposed fordetailed Environmental Impact Assessments, including theone near the village of Beglej, which is founded on limestonebedrock. In reality, that site could not be considered because,according to the “Ministry of the Environment Regulation onthe Requirements Which Must be Met by the Waste Treatment

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Surroundings of the future Hazardous Waste Incinerator

Facility Sites Construction”4 , construction of landfills onlimestone bedrock is prohibited. Therefore, the site nearGledachevo village was identified as the best option.

No alternatives to the incinerator were proposed in theproject. The Bulgarian Law for the Protection of theEnvironment requires an investigation of alternativetechnologies and alternative locations, but the EIA reportsdid not assess the lack of previously devised alternatives.Such an assessment is imperative for the EIA proceduresto be in compliance with thepurpose of the law, which isto ensure the constitutionalrights of citizens to live in ahealthy environment.

Additionally, the EIAreport has substantialomissions regarding thestudies of health risks and thedioxin contamination of theenvironment and people. Interms of dioxin release, solidwaste incinerators are theworst culprits due toincomplete combustion5 .Therefore accurateinformation about the levels of dioxin in food, the amountof contaminated food consumed, and the duration of humanexposure to dioxin is needed to assess the actual health risk.Furthermore, the proposed site near the village ofGledachevo is situated in one of the most air-pollutedregions, officially designated an environmental hot spot inBulgaria. Bulgaria’s largest thermal power plant, MaricaIztok, and the Mini Marica Iztok Ltd. mining companyoperate in the region. This presumes higher levels of standingdioxin contamination.

Public Involvement

The feasibility study and the Environmental ImpactAssessment of the project, financed by the Phare program,were done in a non-transparent manner with only a formalshow of public involvement at the EIA hearings.

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Project development began with the promising idea ofan information campaign prior to conducting the EIA. Inreality, however, the information campaign was notdesigned to take into account public opinion. In April 2001,the project was presented to the affected villages in theGledachevo region (including the villages of Kovachevo,Pet Mogili, Radecki, Novoselec, and Mlekarevo, locatedfrom 2,5 to 5 km from the site). Local people objected tothe construction of yet another factory in the region anddid not attend the presentation. Instead of attempting tounderstand the reasons for the population’s negativeattitude, local authorities and project leaders accused thelocal people of being ill mannered. Thus the projectdevelopment continued without any public involvement.

A number of substantial procedural violations andviolations of the law occurred during the EIA process.Discussion on the preliminary EIA report was openedat the beginning of May 2001. Public hearings on thereport were held on May 20 in Radnevo and on May 21in Beglej. No people from the affected villages werepresent at the Radnevo presentation, with the exceptionof representatives from the local authorities. InKovachevo, residents say that they were not informed ofthe meeting or were not aware of its purpose andimportance. The approval of the EIA report by theExpert Council of the Ministry of the Environment cameon May 22, in gross violation of EIA regulations, beingonly one day after the public hearing and providing noopportunities for comment and discussion.

In August, the residents of Kovachevo formed anInitiative Committee and collected 408 signatures (fromaround 580 voting residents in the village) against theconstruction of the Centre for Hazardous Waste. With thehelp of the regional governor of Stara Zagora, MariaNeikova, the petition was submitted to the Bulgarianparliament. Two meetings with the local authorities andparliamentarians were held afterwards. The Kovachevoresidents were informed that the project was at a veryadvanced stage and it was therefore impossible to halt orhold discussions. They were also advised that it was betterto agree on the project in order to benefit from it.

No public hearing was held during preparations of thefinal EIA report, a substantial violation of essential

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procedural regulations – article 23 of the Law for theProtection of the Environment states that all EIA reportsare subject to public hearings. The Expert Council of theMinistry of the Environment was informed of the localcitizens’ petition by the NGO Za Zemiata/CEEBankwatch Bulgaria and were asked explicitly to take theirarguments into account. Instead the Council made adecision to allow project implementation without anypublic consultation.

Since that time the Ministry of Environment andWaters has officially claimed that the EIA procedure wasfinalised and that the local people’s protests came too late.Several more meetings were organised by the Ministry ofthe Environment and project consultants, with the aim ofpersuading the local people to accept the project. At oneof the meetings, the deputy minister of the environmentstated several times that NGOs manipulated the localcitizens. At the moment, two more villages have collectedsignatures against the project – Pet Mogili (with 726signatures) and Novoselec (with 493 signatures).

Besides disrespecting local citizens’ concerns,Bulgarian authorities rejected the position of the NGOsas well. Two statements on the EIA reports weresubmitted citing as the project’s main problems the lackof proposed alternative solutions for waste treatment andthe inadequate study of health risks. No response wasreceived during the EIA procedure nor was anyexplanation given as to why the NGOs’ arguments werenot taken into account. Currently, Za Zemiata/CEEBankwatch Bulgaria is leading a court case challengingthe EIA and the Ministry of the Environment’s decisionto follow through with the realisation of the project6 .Both Bulgarian legislation and the Aarhus Conventionfor access to justice state that the project should be halteduntil the court case is settled.

Conclusions

The Ministry of the Environment has, according to aresponse by Mr. Jean-Marie Seyler7 to an open letter fromNGOs, given “certain assurance about full publicconsultation in line with the requirements of the ECDirective on EIAs”. Unfortunately, Mr. Seyler’s statement

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does not reflect the reality that the EIA procedures in manyEU-funded projects are in violation of the AarhusConvention, EU legislation and Bulgarian legislation. Oneof the reasons for this is the lack of a clear mechanism toensure enforcement of these measures in EU-fundedprojects and compliance with EU requirements.

Project preparation within the EU pre-accessionprogram is in essence a two-sided dialogue between theEC and local governments, with the public consulted onlyduring the EIA procedure. Law enforcement in Bulgaria isstill very poor and cannot ensure effective publicinvolvement in decision-making. The current set-uprepresents a serious threat to the democratic process,especially in the transition countries. Moreover, when thegovernment is an interested party in a project’simplementation, this only raises the threat that publicopinion will be ignored. The case discussed above showsvery clearly the gap between the so-called ‘harmonised’legislation in the field of information access and publicparticipation and its actual enforcement in Bulgaria. Thuswe call for the creation of a clear mechanism for publicinvolvement and access to information to guarantee theenforcement of EU principles and practices in thedistribution of pre-accession funds.

Footnotes

1 National Development Plan until the year 2006; Sector Program“Environment”; Bulgaria: April 1999.

2 ISPA Strategy Paper for the Environment; Bulgaria.

3 Letter NJ-194/July 8, 2002, from Dolores Arsenova, Ministerof Environment, in response to the Declaration of the peoplefrom Kovachevo, Pet Mogili, Novoselec, Mlekarevo, Radecki andthe trade unions of “Mini Marica Iztok” Ltd.

4 Art 6, par 2, p.5, Regulation N12 dated November 6, 1998 onthe requirements which must be met by waste treatment facilitysites, issued by the Ministry of Environment and Water, theMinistry of Territorial Development and Public Works and theMinistry of Health.

5 World Health Organisation: Dioxins and their effect on humanhealth: Fact Sheet No 225, June 1999.

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6 Court appeal AD 639/02 against the EIA decision of the Ministerof Environment and Waters No 67 – 14/2001 regarding thepermission of the project “National Centre for Dangerous WasteManagement”: Bulgaria, Gledachevo site.

7 Letter 2/GG/cvr D(2001) 721055 from December 18, 2001, fromMr. Jean-Marie Seyler, Acting Director for ISPA Application –Project 2001 BG 16 P PE 007 National Hazardous Waste Centre.

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Bulgaria

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Regional Waste ManagementRegional Waste ManagementRegional Waste ManagementRegional Waste ManagementRegional Waste Managementin Lithuaniain Lithuaniain Lithuaniain Lithuaniain Lithuania

Background

The city of Vilnius generates about 600 000 tonnes of wasteannually, including sewage sludge and industry andconstruction works. Of this, about 250 000 tonnes aremunicipal waste, which comes to 275 kilograms per personeach year. The municipal waste and some of the industrialwaste are dumped in existing landfills. In 2000, about 390 000tonnes of waste were dumped in landfills in the Vilnius region.Up to 85% of this amount came from the city of Vilnius.

All waste from the Vilnius region is stored in 125 landfillsand dumping sites, none of which meet existingenvironmental criteria and requirements for safe and modernlandfills. Most are small, with an area covering less than twohectares. Only one large dumping site serves the waste needsof Vilnius, in Kariotiskes about 20 kilometres from the city.This site is almost nearing its capacity for storing any newamounts of waste.

The Kariotiskes dumping site is located near TrakaiHistorical National Park in Trakai municipality. The Trakaimunicipality and the local community have enactedpermanent and strict requirements halting the site’sexpansion and regulating its closure. Non-compliance withenvironmental requirements, the absence of an extensionand modernisation opportunities, together with negativeenvironmental and social impacts have been the basis forongoing conflicts between the Trakai municipality, localpeople and Vilnius municipality.

There was a clear need to find another site for a new,modern and environmentally safe landfill for Vilnius and theneighbouring municipalities. The solution to the Vilniusregion’s waste management problems was determined by thegeneral waste management principles and guided by the EUaccession requirements. Of the estimated 600 legal and illegal

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waste dumping sites in Lithuania, none meets bothLithuanian and EU requirements for landfills.

The Lithuanian Environmental Action Plan calls forimprovements in landfills and waste management in order tocomply with EU directives. An ambitious plan to establishbetween ten and 12 new modern regional landfills and to close

old ones was set up. One ofthe main financial sources forthe implementation of thisplan is EU pre-accession aidfrom the ISPA fund. TheMinistry of the Environment,together with municipalitiesand regional administrationoffices, drafted a schedule forimplementing the nationalsystem for municipal wastemanagement for the entireISPA support period from2000 to 2006. The plan forregional landfills waspioneered by the Siauliai andAlytus projects.

All municipalities in theVilnius region decided to co-

operate in establishing a unified strategy concerning theVilnius region’s waste management, and in 2001 the VilniusWaste Management Centre was established. The projectpreparation stage was financed by the Danish EnvironmentalAgency under the DANCEE support programme.

The Vilnius regional waste management project wasprepared by the Danish company Ramboll in co-operationwith Lithuanian company Baltic Consulting Group and theEnvironmental Policy Centre. All municipalities in theVilnius region, together with the Vilnius regionaladministration office and the Ministry of Environment, tookactive part in the project preparation.

Project Preparation

First, the main project tasks until 2006 were formulated.The main objective is to come up with a new landfill site

Lithuania

A municipal waste collection site in central Vilnius. Environmentalists expectthe ISPA-supported Vilnius Regional Waste Management project to bringsignificant progress towards implementing new recycling schemes.

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complying with Lithuanian and EU standards before 2005.This would be followed with the closure and clean-up ofthe existing dumping sites to reduce negative environmentalimpacts such as leakage of filtrate to the soil andgroundwater, spreading of trash around the sites,uncontrolled dumping, etc. A new municipal wastecollection system would be established in all municipalitiesof the Vilnius region.

• Total cost of the investments is about EUR 20,8million;

• Closure and clean-up of the small dumping sites:EUR 4 million;

• Closure of Kariotiskes dumping site andinstallation of methane collection system: EUR 5,3million;

• New waste collection system: EUR 1,15 million;and

• New landfill infrastructure and first section ofwaste storage: EUR 7,8 million.

The project will be financed by ISPA (EUR 10,13million), loans from financial institutions (EUR 7,2 million)and state subsidies (EUR 3,47 million).

The project was prepared, approved and submitted toISPA in June 2002.

A new inter-municipal waste management company willbe established for the implementation stage and utilisationof ISPA financial support. This company will be responsiblefor the tenders of the waste collection.

Public Participation

Lithuanian Green Movement (LGM), together withother NGOs, was invited to join this project from the earlystage of preparation and discussions. LGM applied forobserver status on the Project Monitoring Committee andwas accepted. However, LGM was the only NGO interestedand involved in the project preparation stage. The group’smain focus was public participation during theEnvironmental Impact Assessment of the landfill siteselection and means of waste management. The LithuanianGreen Movement objected to incineration as the mostexpensive and non-sustainable means of waste

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management. The project preparation team did a carefulanalysis of least-cost options of various waste managementoptions and proved that waste incineration would be themost expensive option.

The EIA procedure for the final selection of a landfill sitewas another hot issue. Two final places were selected: anabandoned gravel pit in Kazokiskes, part of which is currentlythe Elektrenai municipality’s waste dumping site; and a‘greenfield’ site in Sirvintai municipality. Investment and

financial analysis showedthat both places are moreor less equal in terms oflong-term exploitation(approximately 20 years).However, the Sirvintai siterequires higherinvestment costs as a‘greenfield’ site, both forlandfill and infrastructure(roads, engineering,communications). Froman environmental point ofview, Kazokiskes wasadvantageous because ofits already devastatedindustrial nature. A newlandfill would not causeany further negative

impacts to the area’s biodiversity. Negative social impacts inKazokiskes could be minimised by technical and othercompensation means. There were no social protests from localpeople around the Kazokiskes site.

The Sirvintai site would devastate a natural place,including clear-cutting of forest and significant negativeimpacts to the natural ‘greenfield’ site. Although there arefew farms and villages nearby which would be negativelyaffected by the proximity of a landfill, there were bigprotests by locals and NGOs against Sirvintai due to thenegative environmental and social impacts.

The project preparation team conducted proper EIAprocedures and public involvement into decision makingfor both sites. The Lithuanian Green Movement took partin all public hearings for the EIA report and consulted local

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Old tires and industrial and hazardous waste have been „waiting” for decadesfor their proper utilisation. The most environmentally friendly solution shouldbe applied, in accordance with EU legislation.

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people and NGOs on their rights and on EIA procedures.LGM carefully analysed the advantages and disadvantagesof both sites and presented its official position to the ProjectMonitoring Committee.

The final decision on site selection was made by theinvolved municipalities, the Vilnius regional administrationand the Ministry of Environment. All aspects were takeninto consideration. The position of the LGM and negativepublic opinion concerning the Sirvintai site were importantfactors influencing the final decision in favour of theKazokiskes site.

Conclusion

This is the first ISPA project in Lithuania in which anNGO sat on a project monitoring committee.Environmental NGOs are often considered ‘troublemakers’ and in many pre-accession countries they are oftendenied representation or simply ‘forgotten’ to be includedon the project monitoringcommittees. The reasons arenot clear; officially, publicparticipation is encouraged,but informally, officials tryto avoid additional troublessuch as public participation.This case clearlydemonstrates that NGOscan provide valuable inputto the project preparationstage and increase projecttransparency.

The Lithuanian GreenMovement participated inthe EIA procedureconcerning site selection forthe landfill and contributed concerns about methods ofwaste management. Both the LGM and other LithuanianNGOs can draw one important lesson from this case –meaningful involvement in such projects requires manyprofessional skills and specific knowledge of variousaspects of project preparation (detailed understanding of

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Waste separation and recycling schemes can be simple and cost-effective.Much larger effort is needed to educate the public.

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environmental technologies, calculation of investmentsand analysis of least cost solutions, etc.). Broader NGOinvolvement can contribute to public participation anddecision making, sharing of information about the projectamong their colleagues and the public, and adding to thegeneral transparency of the project cycle.

Both NGOs and officials, as well as the professionalproject preparation team, learned from this involvement.If national and EU officials truly consider NGOs serioussocial partners (as they claim they do), they shouldencourage civil society groups to be involved in everypossible project. NGOs as well as officials need to developtheir skills and understanding about the project cycle andpublic spending for the solution of environmental problemsin the pre-accession stage and later utilise the skills theylearn when working with EU structural funds.

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ISPA in PolandISPA in PolandISPA in PolandISPA in PolandISPA in Poland

At the beginning of 2001, the Institute forEnvironmental Tax Reform conducted a survey examiningthe Polish national authorities’ public information policyregarding pre-accession funds. The outcomes of the surveyshow that significant improvements in this policy areneeded: the information provided by the nationalauthorities to the municipalities (potential grantees) wasinsufficient and access to basic documents was often limited.

The survey related inter alia to Polish municipalities’experiences with receiving information on pre-accessionfunds (in particular ISPA). It consisted of 20 closed andthree open-ended questions. The questionnaire was sentby mail to a group of 196 randomly chosen municipalities,to the department responsible for environmental protectionand environmental infrastructure investment. A total 109municipalities sent back the completed questionnaire. Sincemainly large municipalities are eligible for ISPA funding,the number of inhabitants was an important criterion forconstructing the sample group for the survey. Therefore,random selection was applied to municipalities of more than15 000 inhabitants. From about 600 municipalities that metthis criterion, over 100 were included in the sample group.In addition, 30 other cities with populations exceeding 100000 were included, since such municipalities play a strategicrole among potential ISPA beneficiaries. Moreover, about50 municipalities between 10 and 15 thousand inhabitantswere added to the sample group. Such municipalities couldestablish an association of municipalities for carrying outinvestments that reflect ISPA priorities.

In one of the questions, the Institute asked themunicipalities if they had any chance to get acquainted withthe document “Strategy for using the ISPA fund as asubsidiary instrument for implementation of the NationalEnvironmental Policy”. The Strategy was prepared by theMinistry of the Environment, and was the basic documentsetting the priorities for choosing investments to be co-financed by ISPA. Proposals submitted to the NationalEnvironmental Protection Fund and the Ministry of the

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TTTTTable 1.able 1.able 1.able 1.able 1. Correlation between access to the "Strategy..." and submissionof ISPA application.

Environment had to meet the criteria laid down in thisdocument. Compliance with this document was one of thebasic factors to be taken into account when evaluatingproposals.

Access to the Strategy was limited. The document wasneither available on the web pages of the Ministry of theEnvironment nor the web pages of the NationalEnvironmental Protection Fund, despite the fact that thesebodies were obliged to provide information on theconditions for receiving ISPA support.

The outcome of the research showed that only 30percent of the municipalities that had submittedapplications to ISPA had access to the Strategy. Moreover,of the 24 cities larger than 50 000 inhabitants, only seven

cities were familiar with the document.

Although most of the municipalities interviewed hadgeneral information on ISPA, only 41% stated that theinformation on the rules and procedures for selectingprojects for ISPA financing was sufficient and detailed.Almost half (44%) of the municipalities declared that theinformation they had was rather insufficient, and 15% ofmunicipalities did not have any information on the rulesand procedures for selecting investments.

All in all, only ten percent of municipalities interested inISPA funding had no problems obtaining all the necessaryinformation on the procedures and requirements related tothe ISPA fund. Some 20% of municipalities indicated problemswith receiving precise information, and eight percent claimedthat some important information was not available at all.Moreover, many municipalities emphasised the delays in theISPA implementation process and changes in the applicationforms during the period provided for project preparation.

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TTTTTable 2.able 2.able 2.able 2.able 2. Degree of urgency for undertaking activities in the following fields

Source: Institute for EnvirSource: Institute for EnvirSource: Institute for EnvirSource: Institute for EnvirSource: Institute for Environmental Tonmental Tonmental Tonmental Tonmental Tax Reformax Reformax Reformax Reformax Reform

In summary, one may say that the information policyled to misinformation and could result in wasting ofmunicipal money for pre-feasibility activities.

Does ISPA Reflect the Needs of Municipalities?

Another task of the survey was to learn what the priorityinvestments for the municipalities are and to check if thesepriorities were reflected in the guiding documents for pre-accession funds such as the Strategy. The survey showedthat the priorities in the Strategy were similar to those ofPolish municipalities. The survey further indicated thatinvestments in water management and sewage treatmentfacilities were considered the most urgent (for 63% ofmunicipalities).

The table below presents a five-degree scale of theurgency for solving problems in three specific fields – airquality, water/sewage, and solid waste. It shows thepercentage of municipalities that indicated a specific levelof urgency for undertaking investments in those fields. Thesituation regarding air quality appears to be less urgent.However, it should be noted that air pollution problems donot occur (or occur only to a limited extent) in ruralmunicipalities with low population density. Therefore, thedata may be somewhat misleading. In big cities this problemis particularly serious, and these cities usually indicated anurgency degree ‘5’ and ‘4’.

In this context it is important to remember that theresearch mentioned above covered all sizes ofmunicipalities, while mainly large municipalities will benefitfrom ISPA resources.

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It is too early to evaluate the impact of ISPA funds onthe environment, as most of the projects have yet to beimplemented. However, one may argue that the preparatoryprocess for distribution of these resources was not carriedout properly. Some of the mistakes in this process resultedfrom a lack of experience in managing funds such as ISPA.Various parties involved in the process argue that delaysoccurred both within the EU and the Polish government.

Many mistakes also resulted from the Polishgovernment’s poor information policy, such as the limitedavailability of basic documents. Therefore, it is of crucialimportance that the administration authorities improvetheir performance regarding information policy. ManyPolish municipalities do not pay special attention toenvironmental protection issues. Municipalities see tasksother than environmental protection as more urgent –education, health care or road construction, for instance.This results from budgetary constraints, lack of qualifiedstaff responsible for environmental protection, and lowinterest in environmental protection. Therefore, thegovernment should play an active role in encouragingmunicipalities to improve their environmental policy. Anactive information policy is indispensable for suchimprovements.

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The National Development PlanThe National Development PlanThe National Development PlanThe National Development PlanThe National Development Planin Hungarin Hungarin Hungarin Hungarin Hungaryyyyy

This paper presents some positive trends regarding thepreparation of the regional development component of theNational Development Plan in Hungary. Specifically, thefollowing chapter describes how, after pressure from civilsociety, certain government entities came to involve NGOsin the process and began more and more to take theircomments into account.

The Beginnings

The National Development Plan (NDP) determinesthe direction of future development of the candidatecountries, with special attention on the use of futurestructural funds. Each country benefiting from thesefunds is obliged to prepare the NDP, which shouldprepare the countries for accession. Preparation of theNational Development Plan proceeds at a different pacein the different candidate countries. The EU alsorequires each country to draw up a Preliminary NationalDevelopment Plan with regard to the use of pre-accessionfunds.

In Hungary, the process began in 2000. A PreliminaryNDP was prepared in 2001, but without any involvementfrom civil society. This plan was more of a compilation ofexcerpts from different smaller-scale development plansand was available only in English. After civic organisationsraised concerns, the government explained that this wasdue to the haste in which the Preliminary NDP had to beprepared. They added that it was not an official documentof the public administration and did not need to beprepared according to current Hungarian law, but was onlya requirement of the EU.

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Civil Society Involvement

Civil society pressure yielded its fruits, however, as thegovernment gave NGOs much more room for participatingin the preparation of the National Development Plan.

The government offered civil society severalopportunities for actively taking part in the process. TheNational Environmental Council, an advisory body toapprove or reject the NDP, was established. The councilalso can take part in the elaboration of the Plan, as theMinistry for the Environment invited a councilrepresentative onto the NDP working group. The Ministryand the National Society of Conservationists/Friends ofthe Earth Hungary co-organised several meetings on theNDP, and many public comments were incorporated in thechapter surveying the environmental situation.

Environmental NGOs also formed a network under theleadership of the National Society of Conservationists inorder to ensure effective involvement in the process,particularly regarding regional development.

The NDP Process

The schedule for the preparation of the NDP, as alreadydescribed in the third update on the ”Billions forSustainability?” project, is the following:

• update on the situation survey: January-April 2002;• identification of strategic objectives and priorities:

by April 2002;• short summary of operative programmes: by April-

May 2002;• full draft of NDP: by October 2002;• consultation period with professional, social partners

and civil society: April-October 2002; and• government approval of the final NDP: December

2002.

The NDP will consist of five Operational Programmes inthe following five areas: agriculture and rural development,infrastructure development, economics, human resources and

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regional development. The section on regional developmentis being prepared by Vati Kht., an organisation set up by theMinistry of Agriculture and Rural Development to administerregional development programmes. A very welcome step ofthe government – after public pressure – was the release ofthe draft Operational Programme for Regional Development.The above-mentioned network of national and regional NGOsand some other groups (Clean Air Action Group, WWF)commented on this document. Since March 2001, there havebeen three commenting periods: on the regional aspect of theNDP, on the situation survey and on the measures. Thus, someresults can already be seen and there is still a chance for moreimprovement.

Criticism

The points below are the criticisms from NGOs of theNDP’s regional aspect.

An initial and basic criticism was the threat that sectorinterests would dominate over regional interests, sinceregional development is only one of the five areas for whichan operational programme is being developed. Therefore,NGOs suggested that programming and management ofdevelopment be decentralised and regional aspectsintegrated into each and every operational programme. Atthis stage, the Operational Programme for RegionalDevelopment includes sub-programmes for each region.

Major criticisms from civil society are summarised asfollows. The documents do not examine general national,European and worldwide economic, ecological and socialtrends, although this would be crucial in determining thecauses of current problems.

The basic concept of both the situation survey and theregional strategies is wrong. Development should not onlybe considered economic development; sustainability andwelfare indicators should be applied in addition to GDP.

The use of the term ‘sustainable development’ wouldbe appropriate and welcome only if used in the right context.However, it is often used as an empty phrase and theproposed measures are actually in contradiction tosustainability. In addition, strategic documents should

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assess and take into account the specific regional situationinstead of applying worn-out models.

To make development sustainable, strategies shouldabandon the supposed need to attract foreign directinvestment and instead promote the evolution of a self-sustaining regional economy based on local resources.Reliance on multinationals as suppliers makes small andmedium-sized enterprises (SMEs) vulnerable to theinternational market. Community development andopening up the decision-making process to the publicare key factors of long-term economic and socialdevelopment.

The assessment and solution of environmentalproblems should go far beyond infrastructuredevelopment. Any measure threatening our remainingnatural resources should not be considered an optionfor economic development (tourism). Waste and sewageproblems cannot be sorted out with end-of-pipesolutions, but should consider alternative measures.

Traffic development should not expose the regionsto international trends, with growing disparities withinthe region as a result. Rather, priority should be givento internal accessibility and the renovation of existinginternal networks, with special attention to trains. Thedevelopment of regional airports serving the needs ofmultinational companies is costly and should beabandoned. Traffic development plans must be subjectto a Strategic Environmental Assessment.

A knowledge-based society should not be the sole goaland plans should also include measures to ensure anacceptable living to less educated members of thepopulation. Along these lines, the dominance ofagriculture in certain regions should not in itself beconsidered a sign of underdevelopment as this may be aspecific feature and strength of the region, sustainingthe ‘developed, educated’ half of the population.

The environmental burden of economic activitiesshould be assessed. Environmental impacts of energyproduction must be assessed and more emphasis shouldbe put on renewable energy.

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The Results

As a result of persistent pressure from civil society, andthanks to the openness and goodwill of the authorities, co-operation seems to have been fruitful. NGOs are especiallygrateful that, in contrast to the Preliminary NDP process,the regional part of the NDP process was open to themand that Vati Kht. incorporated several NGO comments(on community development and renewables, for example)into newer versions of the programme.

The latest development regarding the NDP process isthat, in the summer of 2002, the Ministry of Agricultureand Rural Development announced it would carry out anSEA on the Regional Operational Programme, and that itplans to involve NGO experts.

Conclusion

In May 2002, a new set of recommendations andcomments was filed by the coalition of NGOs. Only afterthe closure of this round of consultations with stakeholderswill we see how many of these suggestions will beincorporated in the final document scheduled to be readyby December 2002. Although it is obvious that there is nopolitical will to change the development plan’s basicassumptions (use of GDP as a sole indicator, foreign directinvestments and development of road traffic), we still mustacknowledge the government’s efforts to constantly improvethe NDP by taking into account NGO comments. We hopethat the new government (in office since May 2002) willcarry on and even extend this positive trend.

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The National Development PlanThe National Development PlanThe National Development PlanThe National Development PlanThe National Development Planin Estoniain Estoniain Estoniain Estoniain Estonia

As is the case with other EU accession countries,Estonia needs a National Development Plan (NDP) inorder to be eligible for future financial assistance fromthe European Union. The current process of updating theplan is proving to be quite a promising exercise, as it iswell planned and social partners are better involved thanthe last time. The better process will hopefully result inthe plan being accepted and recognised by many differentgroups in society. However, some deficiencies remain, andthis brief overview will point out the main weaknesses thatcan be avoided in the future.

The National Development Plan of 1999

The first National Development Plan was completedin September 1999 with almost no direct publicparticipation or NGO involvement and no specialprocedures for participation. The Plan consisted of sixchapters, and the chapter on the environmental sectorwas taken from the government’s NationalEnvironmental Action Plan (NEAP) of 1998. Thedrafting of that document had been open to publicparticipation and input, but there was no publicparticipation in drafting the remaining five chapters ofthe 1999 NDP. For this reason, environmental issues havenot been adequately considered in the Plan’s non-environmental sectors. The fact that an EnvironmentalImpact Statement (EIS) was carried out on the 1999 NDPwas positive, although the EIS prepared by the foreignconsultants (EIA Consultancy ARCADIS / Euroconsult)was of a very poor quality. It consists largely of variousbackground statistics and lacks a good analysis of thepotential environmental impacts that might occur as aresult of the activities foreseen by the NDP.

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The National Development Plan of 2002

In the fall of 2001, the Ministry of Finance beganpreparations for a new National Development Plan. Thefinal document is set to be adopted by the Governmentmeeting on December 17, 2002. Although prepared underthe title of the ‘National Development Plan 2003-2006’,the document will be recognised as a Single ProgrammingDocument (SPD) once negotiations about the investmentframework are completed with the European Commissionin late 2003. The next programming period for which theSPD will be updated is 2007-2013. As opposed to the 1999NDP, the current process is much more open andparticipatory.

Preparation of the Estonian National Development Plan2003-2006 is being carried out in three stages:

• Development of the strategic basis;• Development of the priorities and measures; and• Composition of the programme complement.

According to the draft Plan, the objective is to ensuresystematic and regionally balanced sustainable socio-economic development. The following four priority sectorshave been outlined for the NDP:

• Development of human resources (to be financedfrom European Social Fund);

• Competitive economy (to be financed fromEuropean Regional Development Fund);

• Agriculture and rural development (to be financedfrom European Agriculture Guidance andGuarantee Fund and Financial Instrument forFisheries Guidance); and

• Quality of the natural environment (to be financedfrom European Regional Development Fund).

The Plan’s first draft (March 2002) listed six priorities,but the Government modified the list so that a ‘stable andsustainable energy sector and transition to renewableenergy’, ‘local development’ and a priority action onenvironmental infrastructure were cut. Strangely enough,the Ministry of Finance re-visited the priorities in the middleof the NDP process.

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Unlike the first National Development Plan of 1999,the involvement of various interested parties is muchbroader this time. Besides governmental agencies, thereare about 80 different social partners such as NGOs,professional unions and local municipalities, which wereidentified at the beginning of the NDP process. For theenvironmental sector, 11 NGOs or professional unions wereidentified, including NGOs such as the Estonian GreenMovement-Friends of the Earth, the Estonian Fund forNature and the Estonian Ornithological Society. However,the advice and input from these social partners will besolicited at only a few points in the NDP process.

The strategic basis, a rather comprehensive draft of theNDP, was released on the Ministry of Finance’s website forpublic review in late February 2002.Environmental groups gave joint commentsdrafted together by ten NGOs, and these werepresented on behalf of the umbrellaorganisation, Council of Environmental NGOs(Eesti Keskkonnaühenduste Koda, EKO). Thedraft turned out to be such a complex document,that the EKO was only able to analyse the draftin February 2002. In its comments, EKO raisednumerous issues such as the fact that the NDPstrategic basis document looked like a shoppinglist made by mainstream thinkers from thevarious ministries and that many proposals werequite controversial.

The EKO’s comments touched a wide varietyof the chapters, including environment,transport, energy, agriculture, tourism, forestry,food processing, the service sector and humanresources. Around 25 organisations commentedon the draft NDP strategic basis. Of these, theCouncil of Environmental NGOs was one of thevery few that commented on almost all thechapters of the document. One third of EKO’scomments were taken into account andincorporated into the text of the National Development Plan.Another positive step was the fact that the summary of allcomments, including the reasons why certain comments wererefused or not incorporated, was published on the websiteof the Ministry of Finance.

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The Estonian Ministry of Finance is responsiblefor developing the National Development Plan

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Each NDP priority listed specific measures, withquantitative targets. These measures describe the types ofactivities for which future financial assistance from the EUcan be used. A total of around 30 measures are proposed byEstonia. Thus, the list of measures will form one of the mostimportant parts of the entire National Development Plan.Once a certain activity (e.g. developing non-renewable energysystems or railway services) is not listed, it will be very difficult,if not impossible, to apply for future EU grants for suchinvestments.

The first list of measures with descriptions and sub-activities was compiled in mid-June, 2002. It is very positivethat even before the measure sheets were passed to a groupof experts from Finland for evaluation, they were madeavailable to the environmental and social partners of theNDP process. Comments from 11 environmental NGOson measures from various sectors were jointly submittedto the Ministry of Finance in early July.

Strategic Environmental Assessment

For the Estonian environmental community, the bestnews about the National Development Plan 2003-2006process is probably the decision to carry out a StrategicEnvironmental Assessment (SEA) to assess theenvironmental consequences of the planned activities.Although the responsible authority (Ministry of Finance)tried to convince people for a long time that there was noneed to carry out a full SEA, the decision to start the processwas made in January 2002. It was a big success for bothenvironmental NGOs and the Ministry of the Environment,which had been consistently pushing for an SEA. Perhapsthe fact that the Regional Environmental Centre for Centraland Eastern Europe (REC) offered financing for the SEAprocess as an important pilot project finally made theMinistry of Finance comfortable with the decision.

Drafting of the Strategic Environmental Assessment istaking place parallel to the drafting of the NationalDevelopment Plan. According to the new Estonian law onEnvironmental Impact Assessment (in force as of January1, 2001) the SEA of a national-level development plan must

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be carried out during the planning process. So far, only oneSEA has been done in Estonia, for the Forest SectorDevelopment Plan, with a surprisingly poor final report.The SEA on the NDP is, therefore, a very important andvaluable learning process for all parties involved and allefforts have to be made to ensure its good quality.

An open tender for companies willing to do the StrategicEnvironmental Assessment was launched in February 2002,and a contract signed at the end of March with an Estonianconsortium consisting of experts from different institutions.Due to the huge rush of starting the SEA process, the publicdiscussion on the programme of the SEA was of quite poorquality. Following requests by NGOs, the period for givingcomments on the SEA programme was prolonged and asecond public discussion was organised a week later.

There are five stages to the preparation of the StrategicEnvironmental Assessment:

• Evaluation of the NDP’s strategic basis;• Evaluation of the NDP’s proposed measures;• Compilation of the draft SEA report;• Public discussion of the draft SEA report; and• Finishing of the final SEA report.

The team carrying out the SEA will not evaluate thesocial and economic impacts of the activities planned bythe National Development Plan. Such evaluation is to bedone in co-ordination with the ex-ante working groupevaluating social consequences. For environmental NGOs,such separation seems very unfortunate but the level andquality of co-operation between the different teams is yetto be seen.

Public discussion of the SEA report is planned for twoweeks in November 2002, after which the final SEA will besubmitted to the Ministry of Finance. Hopefully there willbe an ‘ownership feeling’ towards the development planamong the various civic groups, and the lessons learnedduring the process will assist the Government in carryingout an even better process for the next programming period.

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Cross BorCross BorCross BorCross BorCross Border Coder Coder Coder Coder Co----- operationoperationoperationoperationoperation

Background

The objective of the Phare Cross Border Co-operation(CBC) program is to assist candidate countries inconstructing mechanisms for effective regional co-operationby supporting projects which mutually benefit both sidesof a national border. These projects, therefore, should notonly address the cross-border effects of existing problems,but should also be institutionally connected on both sidesof the border.1

In Slovakia, this is often not the case. The inadequateformulation of this programme’s criteria allows for differentinterpretations of the expression ‘cross-border’. In Slovakia,this was often reduced to meaning ‘in the border regions’.In such circumstances, Phare CBC became a fund fromwhich finances could be used for anything, with no regardfor either the major objectives of the programme or thequality of the specific projects.2

The Period Until 1999

Until 1999, the selection of projects took place throughinformal bilateral meetings of state officials. The EUrequested no programme documents which would specifypriorities for the selection of projects. On the Slovak side,an improper institutional structure resulted in a highconcentration of power in a few key officials. Due to a lackof supervision by the European Commission, critical controlover both programming and implementation of the PhareCBC was entrusted to a limited group of people.Transparency of decision-making and public involvementwere completely absent, opening up almost unlimitedopportunities for manipulating the decision-making processby a narrow group of programme managers, ignoring theprogramme’s goals and the public interest.

In the case of large infrastructure projects, themanipulation of funds could begin with the preparation

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Sewage treatment plant in Zohor, Slovakia, funded byPhare CBC. The plant began operation July 8, 1999.

of the tender dossier and technical documentation by adesign engineer, hired by the beneficiary, for a certaincompany. If designers had good contacts with theprospective members of future selection committees,they could, with the support of these members, ensure

success in tenders for companies selectedin advance. The selection committeesalso included representatives ofbeneficiaries. Designers could win theirfavour by, for example, offering toprepare a project free of charge, or atvery low rates. The favour would bereturned through the provision of acontract to supervise the project in thelater phases of CBC financing.

In this way, a wide symbiosis couldarise among the managers of tenders,designers, the beneficiaries, and thecompany, from which all parties benefited.The company, besides winning a contract,could also profit from the fact that thedesigner (later project supervisor)tolerated substandard work, or the use ofunnecessarily expensive materials inimplementing the project. This couldenable the company to offer a commissionnot only to the designer, but alsopotentially to key members of theselection committee. The beneficiaries –

in the case of infrastructure projects these are mainlymunicipalities – obtain new facilities with very little effort,which significantly increases their local political ratings.

Exposing such practices during the tenderingprocesses, however, is difficult even for experiencedobservers. They can only be inferred from the quality ofresults and the methods by which projects wereimplemented. However, the leniency of the rulesconcerning the decision-making process almost totallyexcludes the possibility of obtaining direct evidence of themisuse of pre-accession funds by specific individuals. Inaddition, a significant portion of documentation wasmissing or was even destroyed, as confirmed by MariaKadlecikova, Deputy Prime Minister for EuropeanIntegration.3

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Zohor Sewage Treatment Facility

The sewage treatment facility at Zohor (EUR 500 000)was already questionable at the project design level. Itsactual capacity after completion in September 1999 onlyreached one-quarter of its projected capacity, despite thefact that it was intended to serve a village with less than4000 inhabitants. Two years after the facility beganoperation, only about 60% of its capacity is utilised andlocal residents say that it is unlikely that all households willbe connected to it due to a lack of funds for constructing amunicipal sewage system. Furthermore, a new housingestate is planned for the village in the long term. If built,the facility’s capacity will not suffice.

The facility itself is astonishing in its constructiondeficiencies. Firstly, unnecessarily expensive building materialswere used for the facility’s construction although significantlycheaper alternatives were available. Secondly, some of theseexpensive materials are completely useless, and are even fittedin a detrimental manner. For example, hardly any of the specialdouble-glazed windows in the operational section can beopened, thus retaining a permanently high level of humidityin the building, which leads to the rapid destruction of woodenpanelling. A delegation of the EC registered this project asbeing unsatisfactory.

Stupava Motorway Junction

The town of Stupava in southwestern Slovakia is locatedhalfway between two junctions on the D2 motorway, whichare only 13 km apart. The town has applied for EUR 500000 for the construction of another junction, which wouldreduce the distance between junctions by about half. Thiswould not only slow the flow and speed of traffic, but alsoraise motorway investment costs to an unacceptable level.If interrupted too often, the very existence of the motorwaybecomes meaningless.4

There was no justification for including this project intoPhare CBC because there is no motorway anywhere in thevicinity, either in Slovakia or in Austria, to which the D2could be connected. In fact, the reason was to combat the

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negative effects of Stupava’s poor land-use planning. Itsresidents were badly affected by the extensivetransportation of products by two major private companiesoperating around the town.5 These companies’ lorries use,in place of the existing motorway, a shorter, parallel roadrunning through the centre of town. After constructing anew industrial zone for Volkswagen, this traffic wouldincrease even more. The project would be a clear exampleof a considerable public subsidy to private companies fromboth Phare and Slovak co-financing. No attempt was madeby the Slovak government or the EU to enforce the ‘polluterpays’ principle, convince the companies to use the existingmotorway junctions or make the town of Stupava pay forthe junctions at their own expense.

The project was approved by the EU in 1998. Due to alack of funds for co-financing and a number of technicalproblems, it was never implemented, however. In late 2001the EC finally cancelled the project.6

Period from 1999 to 2001

On the basis of EC regulation no. 2760/1998 approvedin December 1998, new rules were established for the PhareCBC programme. They required the approval ofprogramme documents, which would set priorities for cross-border projects by individual countries, as well as theestablishment of Joint Co-ordination Committees. The roleof these committees was to prepare a Joint ProgrammingDocument7 , and to select the projects to be submitted toBrussels for appraisal. In this way, Slovak-Polish, Slovak-Hungarian, Slovak-Czech, and Slovak-Austrian Joint Co-ordination Committees were formed which includedrepresentatives of non-governmental organisations.

The committee’s purpose was to increase transparencyin project selection. In Slovakia, however, this aim hasremained unfulfilled. Members do not possess basicinformation concerning their duties, even in regard to thesystem of submitting, evaluating, and selecting projects. It isnot even customary to verify records from meetings.Procedures were used which could lead to the manipulationof committee decisions by the programme administrators inboth Bratislava and Brussels. For example, there were

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attempts to allocate funds for technical assistance forcompleting privileged projects prior to their assessment bythe Joint Co-ordination Committees. Also noted wasprogram administrators overriding committee decisions.These problems were confirmed by Deputy Prime Ministerfor Regional Development Pal Csaky, but his protests toDeputy Prime Minister for European Integration PavolHamzik were in vain.8

Lucenec Sewage Treatment Facility

In May 1999, a preparatory meeting of the Slovak-Hungarian Joint Committee took place in Komarno toestablish conditions for the selection of projects for PhareCBC 2000. The committee’s preliminarily choice was aproject called “TheDevelopment andEstablishment of anE n v i r o n m e n t a l ,Education, and Eco-Tourism InformationNetwork in the Gemer-Novohrad-Hont BorderRegions of Slovakia andHungary”. In July 1999,the committee inBudapest approved thea b o v e - m e n t i o n e dproject. Aftercomments from thePhare Desk Officer forSlovakia at DGEnlargement, theproject proponent submitted a revised version of theproject to the Department of Foreign Assistance, whichwas supposed to finalise it and send it to Brussels. Upuntil then, the process had been straightforward;however, the finalised project was never officiallysubmitted to Brussels.

Roland Toth, the director of the Department of ForeignAssistance at the Office of Government – without notifyingthe Joint Co-ordination Committee, and in contraventionof Phare Cross Border Co-operation rules – unexpectedly

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Sewage treatment plant in Zohor, Slovakia, funded by Phare CBC.

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submitted a completely different project entitled “TheModernisation of the Sewage Treatment Facility atLucenec”, completely ignoring the committee’s previousdecision. The project was subsequently approved.

As in other cases, the project itself raised many questions.One of the largest polluters in the town of Lucenec is themeat industry, which is known for its strong links to theregion’s political elite. As the Slovak side did not evenconsider applying the basic ‘polluter pays’ principle, thesubsidy of EUR 1,75 million for the construction of thesewage treatment facility can be realistically described as asubsidy for the most influential private local water polluter.

Similar tactics were used with other projects approvedby the Slovak-Czech and Slovak-Austrian Joint Co-operation Committees - in these cases, substitute projectsfor sewage treatment facilities were submitted to Brussels‘under time pressure’, and the projects ended up beingsupported by Phare Cross Border Co-operation funds.Slovak officials explained the switch by stating that theoriginal projects were not of ‘sufficient quality’ or ‘lackedthe technical details’ to be submitted to Brussels, and thatdue to insufficient time they needed to be quickly replacedwith different projects so as ‘to comply with the stateddeadlines’. Otherwise, the claims continued, the Pharefunds would be lost, which was allegedly ‘politicallyunacceptable’. In such, and similar, ways, the evidentcircumvention of basic rules concerning the selection ofprojects was justified. Similar problems in regard totransparency were documented in the preparation of theSmall Projects Fund.

Period after March 2001

The administration of Phare CBC funds was openlycriticised only after allegations of the manipulation ofpre-accession assistance in Slovakia erupted into acorruption scandal in March 2001. As a result, theenormous power wielded by the Office of Governmentstarted to be decentralised. In August 2001, programmingfor Phare CBC was transferred from the Office ofGovernment to the Ministry of Construction andRegional Development, accompanied by personnel

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changes. However, problems of transparency and theoverall culture of the programme’s administrationremained almost untouched, as reported by severalmembers of Joint Committees.

Conclusion

Despite their dubious quality and questionable need, itmust be noted that, in the current political system, PhareCBC infrastructure projects such as sewage treatmentfacilities were always perceived as being successful. Theprojects satisfied the demands of all interested parties. Thepostponement or the non-utilisation of assistance would havehad a direct effect on the careers and salaries of many officialsin the entire management hierarchy of the Phare programme.Officials from Brussels therefore required easilyimplemented technical projects free from unnecessaryadministrative complications.

The above cases also confirm the fact that pre-accessionassistance is approached in Slovakia purely as anopportunity to obtain substantial funding to settle currentproblems in regions where the political elite co-operateswith the managers of aid programmes, while completelyignoring the main political purpose of such programmes -to enhance the ability of the country to effectivelyadminister public funds in a democratic way.

Footnotes

1 In 2000, a total EUR 200 million was allocated for the PhareCBC programme for all candidate countries, of which EUR 6million were for Slovak-Austrian co-operation, EUR 4 millionfor Slovak-Polish co-operation, and EUR 2 million for Slovak-Hungarian projects. In Slovakia, 20% of funds were allocatedfor small projects, EUR 300 000 for small infrastructure projects,and the rest for large infrastructure projects with a minimumvalue of EUR 1 million.

2 An internal 1999 EC audit evaluated the entire Phare CBCprogramme in Slovakia as being unsatisfactory, which is thesecond worst level on a scale of five.

3 Daily SME, September 4, 2001.

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4 At the same time, the largest foreign company operating inSlovakia - Volkswagen - was lobbying for the construction ofanother motorway junction for its planned industrial zone nearStupava, close to the junction planned by the town, financed bypublic funds.

5 One of the companies runs an enormous waste storage depotfor Bratislava, and another one extracts gravel for the Bratislavaregion.

6 Slovak Information and Press Agency (SITA): SR si nemôžedovoliť pochybnosti zo strany EÚ [Slovak Republic cannot affordEU doubts]: November 6, 2001.

7 A Joint Programming Document is a bilateral documentdeveloped by partner countries as part of PHARE Cross BorderCooperation. It serves as the basis for allocating resources, adecision made by the Joint Cooperation Committee. Until 2000,Joint Programming Documents were developed by local officials.In reality, these documents do not have much influence on theselection of projects.

8 Marian Bubenik: Hamzik’s Department has Created anInformation Monopoly: Daily Praca: May 4, 2001.

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AddrAddrAddrAddrAddresses of Project Partnersesses of Project Partnersesses of Project Partnersesses of Project Partnersesses of Project Partners

Bulgaria:Anelia StefanovaFor the Earth (Za Zemiata)P.O. Box 975Sofia 1000, BulgariaTel/Fax: +359 2 980 41 09E-mail: anelias@bankwatch.org

Czech Republic:Pavel PřibylHnuti Duha (FoE Czech Rep.)Lublanska 18, 120 00 Praha 2, Czech Rep.Tel: +420 2 2251 3859, Fax: +420 2 2251 8319E-mail: pavel.pribyl@ecn.cz

Estonia:Peep MardisteFriends of the Earth – EstoniaP.O. Box 318, 50002 Tartu, EstoniaTel: +372 7 422 532, Fax: +372 7 422 084E-mail: pepe@ut.ee

Hungary:Teodora DönszETK – Nature Protection Club of Eötvös Loránd UniversityVorosmarty ter 1, 1051 Budapest, HungaryTel: +36 1 32 74 372E-mail: ddori@zpok.hu

Latvia:Alda OzolaVAK – Environmental Protection Club (FoE Latvia)Audeju 7/9 Riga, LV-1966, LatviaTel: +371 7 22 60 42, Fax: +371 7 21 36 97E-mail: alda@lanet.lv

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Lithuania:Linas VainiusLithuanian Green MovementP.O. Box 156, LT-3000 Kaunas, LithuaniaTel: +370 7 42 55 66, Fax: +370 7 42 52 07E-mail: linas@atgaja.lt

Poland:Andrzej GułaInstitute for Green Tax ReformPlac Axentowicza 6/730-034 Kraków, PolandTel: +48 12 631 90 83, Fax: +48 12 631 90 81E-mail: andrzejg@bankwatch.org

Slovak Republic:Helena ZamkovskaCEPA – Center for Environmental Public AdvocacyPonicka Huta 65, 976 33 Poniky, SlovakiaTel/Fax: +421 48 419 33 24E-mail: zamkovska@changenet.sk

Brussels office:Magda StoczkiewiczFriends of the Earth Europe / CEE Bankwatch Network29, rue Blanche, 1060 Brussels, BelgiumTel: +32 2 542 01 80, Fax: +32 2 537 55 96

Amsterdam office:Tel: +31 20 622 13 69, Fax: +31 20 639 21 81E-mail: magdas@foeeurope.org

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