Introduction

As the context of the transition in Central and Eastern Europe changes from the initial focus on the shift to democracy and market economies to accession to the European Union and to longer term challenges of sustainable development, the need for cooperation between countries and among the various stakeholders within the countries is ever more important. The Regional Environmental Center has supported capacity building within governments, businesses and particularly the NGO communities of the region since its inception and now serves as a forum for regional dialogue about environmental issues. All of the activities of the Center have undergone serious review in 1996 and it now stands poised for a leading role in promoting sustainable development in CEE into the next century.

IN SEPTEMBER, THE REC STAFF took up operations at the new head office in Szentendre. Pictured here is the REC conference center, one of several buildings on the site which was donated by the Hungarian government in 1995.

NEW HOME At the June General Assembly meeting, nearly 200 representatives from the region and the West gathered for what Bedrich Moldan, chairman of the REC's Board of Directors, called "the most extraordinary moment in the Center's history" - the opening of the new head office in Szentendre. As part of the agreement recognizing the REC as an international organization, the Hungarian government donated the campus-like property just north of Budapest to serve as the REC's new base of operation. The donation was largely recognized as tremendous vote of confidence in the Center's activities in the region as well as the first big step in the REC's quest for long-term financial sustainability.

Three months later, the REC staff made the move to their new home. The extensive facilities have had direct influence on the growing operations of the Center. In addition to more space and better working conditions for the staff, the site boasts a conference facility which provides a venue for in-house meetings, making it easier for the REC to encourage dialogue among the various stakeholders throughout the region and internationally.

Several important international events have already been hosted at the REC, including a meeting of the Public Participation Working Group in preparation for the Aarhus ministerial conference, an OECD workshop on capacity building in the CEE goods and services industries and a meeting for the Campaign on Sustainable Europe.

NEW LEADERSHIP AND STRUCTURE After successfully leading the Center for three and a half years, Stanislaw Sitnicki departed the post of Executive Director in July and the REC welcomed Jernej Stritih on board. As defined by the Board of Directors, the first order of business was to examine the REC'S effectiveness and organizational structure.

Operations are now based on a project management approach whereby multi-disciplinary teams implement projects with guidance from project committees which also review projects to ensure the highest level of quality. A "think tank" in the Programs Department, staffed by experts in various fields, forms a flexible base for project teams which are supported by a set of specialized departments in Information Exchange, Grants, Capacity Building, Operations, and Conferences.

The REC has also adopted a more streamlined management structure. The senior management ranks were reduced from eight to four persons and channels for the flow of information between different organizational layers have become more institutionalized.

In conjunction with the new structure, the REC strategy was revised in 1996. While the region's market economies stabilized and newly privatized businesses were getting a foothold in the marketplace, the REC spent much of its efforts in the early years of the transition supporting capacity building for civil society and nongovernmental organizations. Now in addition to its work with NGOs the REC can intensify its efforts to promote cooperation between these viable partners.

This multi-stakeholder approach to solving environmental problems will build on the strength of the REC's in-country network as well as its expertise in public participation and relations with NGO communities. New priorities will step up efforts to bring governments and businesses into partnerships with each other and with environmental NGOs.

Such regional partnerships will become increasingly important as some East-West cooperation declines, particularly in the area of Western funding of CEE programs. The REC's 1996 Beyond Borders study on East-East cooperation, examines the critical change in funder priorities for the region and calls for a strong strategy for developing regional cooperation.

As the REC also faces a decrease in untied support, the organization has committed to diversifying its funding sources and to continue its bid for long-term financial stability. The new strategy will focus more on project based-initiatives, which continue to receive strong support from funders, with provisions to cover the costs of operations. In addition efforts will be increased to secure contributions for the REC's long-term financial security as well as to increase the organization's own revenue generation from products, services and conference activities.

INTERNATIONAL DEVELOPMENTS In 1996, the REC fully took up its new international status as granted by the Hungarian government the previous year. A new Charter was presented at the June General Assembly and signed by 22 nations including one new member representing FR Yugoslavia.

The REC also has actively participated in international environmental cooperative efforts, particularly with regard to preparations for the fourth ministerial conference "Environment for Europe" to be held in June 1998. In 1996, the REC served on the Executive Committee for the Ad Hoc Preparatory Working Group of Senior Officials and participated in the public participation component for that event through work on the Public Participation Convention drafting and by surveying current Public Participation practices.

Looking to complete its network of constituent countries in CEE, the REC conducted fact-finding missions to Bosnia and Herzegovina and the FR Yugoslavia in 1996. The trips revealed a great need for support to environmental institutions, and the REC plans to hire representatives in both countries in 1997. Last year also marked the official opening of the local office in Tallinn, Estonia in October, which brings the total to eleven offices.

REC * PUBLICATIONS * ANNUAL REPORT 1996