Slovak Republic: Workshop Summary

Introduction

The Regional Environmental Center (REC) hosted the fourth and final workshop in the series entitled "Competing in the New Environmental Market Place" in Bratislava on November 27-28, 1995. Over 80 invited guests, speakers as well as business representatives took part in the seminar. The main topic on the first day of the seminar was Slovak environmental law (including water, air and wastes) and its approximation to European Union (EU) regulations. The main topic of the second day was business initiatives in environmental management, methods of its implementation as well as an evaluation of the Slovak environmental professionals certification system. The following sections provide a summary of the workshop presentations and discussions.

Government Initiatives

Environmental Laws and Regulations

During the past five years, important qualitative changes have taken place in Slovak environmental legislation providing environmental 'entities' (such as environmental impact assessment (EIA), accredited laboratories, auditing, environmental management systems (EMS), etc.) with increased business opportunities. The most important legislative changes are:

Most notable are the changes in legislation for waste management. In November 1989, the law primarily focused on recyclable materials management. To remedy the situation, new statutes were enacted which focused on general waste management issues. The three basic acts implemented were the Waste Management Act No. 238/1991, the Act on the State Administration of Waste Management No. 494/1991, and Act No. 309/1992 on the Charges for the Disposal of Waste.

Other changes deal more recently with the Slovak Republic's attempts to bring its domestic environmental regulations in line with those of the EU. These regulations deal with determining the responsibility of waste producers, importers, waste treatment and disposal facilities, settlements and towns, state administration and other related subjects.

In addition to these regulations, the Slovak Ministry of Environment (MoE) has implemented several other programs. Most important among these is the Waste Management Program which was endorsed by Government Regulation No. 500 on July 13, 1993. This seeks to encourage waste treatment which is above all environmentally sustainable. Specifically, this entails decreasing the quantity of waste, introducing source separation, constructing regional landfills, establishing hazardous waste treatment sites, and building incineration plants for medical waste. Most importantly, these are all areas that will foster the growth of businesses in the environmental market.

The current status of air protection legislation is embodied in three fundamental acts: Act No. 309/1991 on Protection of the Air against Pollutants, Act No. 134/1992 on the State Administration of Air Protection, and Act No. 311/1992 on Charges for Air Pollution. The executive regulations related to these acts include: the Act of the Slovak Commission for the Environment No. 407/1992 stipulating the classes of pollution sources and a list of polluting agents and their limits; the Decree of the MoE No. 111/1993 concerning evaluation by experts, and the Act of the Ministry of the Environment No. 112/1993 regarding the operation of smog warning and regulatory systems. Slovak regulations concerning air protection are in accordance with EU Directives.

Water protection is covered by more than 20 regulations which have varying degrees of strength. The main regulations are the Water Act No. 138/1973 and the Act on the State Administration of Water Management No. 135/1974. Both were amended in 1993. A loophole that permitted government exceptions to the law was closed in 1993 when the Act was amended.

The new Water Act (currently before the Council of Ministers) will include several provisions: First, it will state the responsibility of water management institutions with regard to so-called special waters. Second, it will focus on the prevention of water pollution and clarify that any entity causing pollution will be held responsible for the resulting damage. Third, it will issue procedural guidelines for solving emergency decreases in water supply. Fourth, it will establish stricter penalties for waste discharge.

The Government Regulation No. 242/1993 (in accordance with EC Council Directive 76/464) sets stricter limits for water pollution. Emission limits have been implemented for sewage and municipal waste water treatment plants and for different types of industry waste water and special water. The Slovak Republic is also looking to integrate international norms such as those of ISO (International Standards Organisation) and EN (European Norms) into its water protection legislation.

The Slovak State Fund for the Environment (SSFE) is an important source of funding from an environmental business's point of view. The Fund provides financing for projects which are considered priorities under the state environmental policy. It seeks to use its resources in a reasonable, responsible way and to this end, evaluates projects using objective criteria such as economic benefit, ecological impact and technical reliability. Although the verification process is slow and complex, it is altogether necessary. The SSFE aims to finance only those projects that adhere to current environmental regulations and norms. Institutions dealing with ecological stress and reducing its related effects are also eligible to apply.

Funds are generated from fees and fines levied against polluters and from interest derived from Fund finances. Some money is also drawn from the state budget. The SSFE is also responsible for financing projects related to past environmental damages where the state is the responsible party. The possibility of creating a revolving fund is also being explored.

The EU Approximation Process

On February 1, 1995 the Europe Agreement took effect and provided the statutory impetus for the harmonization of Slovak environmental legislation. As a first step towards this goal, on March 21, 1995 the Slovak government endorsed a list of 22 priorities from different, mainly economic areas. Two of these, waste and air legislation, concern the environment directly. Approximations in the field of waste management have already resulted following Slovak participation in the Basle Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal.

However, there are several differences between the Convention and the EU Council Regulation No. 259/93 (on the transport of hazardous waste within, from and into the EU). The fundamental contradiction between Slovak waste management legislation regulations and those of the EU is related to the import and export of waste. In the Slovak Republic, free cross-border movement of waste is forbidden. However, this is one of the fundamental points made by the OECD (Organisation for Economic and Cooperative Development) Decision of 1992 C(92)39 amended by C(93)74 (Final) on trans-border transport of waste and the EU Council Regulation No. 259/93. Representatives of the OECD and the EU have stipulated that Slovak admission into these organizations is contingent upon their loosening of their restrictions on imports of recyclable waste.

Another topic of importance with regard to EU harmonization is defining and maintaining water quality. The Slovak Meteorological Institute created an accreditation commission for the purpose of establishing standards in line with those of the EU. The commission will hold the right to accredit laboratories who will be responsible for monitoring water quality according to the needs of the State Administration and Inspection Commission. However, as of the workshop date no laboratories had yet been accredited.

Also relevant to the harmonization of legislation are databases which can provide details on EU environmental legislation and information about institutes dealing with the environment. The CELEX database (available online and on CD-ROM) contains the full text of all EU legislation and references to individual national implementation measures. Print versions of this are available through the PHARE Programme Office at the MoE. The Faculty of Law at the Comenius University offers access to the CD-ROM version. The Slovak Technical and Normalization Institute also can provide information about current EU regulations as well as those that are in the preparation phase. Verbatim texts can be provided if necessary. The Technical University of Slovakia (in Bratislava) also has these materials.

The roundtable discussion on the first day began with the issues of risk management and risk assessment and its adoption within EU legislation. Risk assessment relates to the estimation of personal risk when involved in hazardous activities; and the probability of accidents occurring; and their consequences (to human health and the environment). Risk management is the careful management of hazardous operations in order to reduce the risks to individuals and reduce accidents occurring, and the preparation of emergency response plans. An EU Directive related to accident planning for certain hazardous materials is being formulated and will demand a detailed response plan which will have to be promulgated to the general public.

The discussion also touched upon variations in environmental legislation among EU members and included:

The various ministries in the Slovak Republic are free to make their own interpretations of EU laws which pertain to them. The MoE publishes its own translations in a regular newsletter which when circulated to interior offices, becomes official. Any translations not published in the newsletter are considered to be unofficial by Slovak courts, and judges may make their own interpretations which would then be deemed official.

In matters involving EU and non-EU countries, the European Court of Justice in Luxembourg has final jurisdiction. Lawsuits can reach Luxembourg through a number of different routes. For example, a lawsuit involving an industrial and public institution may eventually be referred to the European Court which would then be required to arrange translation of the regulation to the non-EU country's language. Disagreements arising between EU Member States may also be settled by the European Court of Justice.

Business Initiatives

The Environmental Market

The Slovak environmental market is the smallest among the Visegrad countries (the Czech and Slovak Republics, Hungary and Poland). Total environmental spending was 1.7 percent of the Gross National Product (GNP) or USD 173 million in 1993. The Slovak environmental business sector plays host to approximately 650 environmental product and service providers1 . Their growth since 1989 is presented in Table 1 below. In addition to businesses, this survey includes qualified individuals with 'second jobs', subsidiaries of holding companies, departments of universities, institutes of the Slovak Academy of Science, and research institutes served by the state budget.

Table 1: Growth of environmental product and service providers

Year 1989 1990 1991 1992 1993 1994 1995
(Sep)
Environmental Product and
Service Providers
40 100 160 240 350 450 650

According to a survey of 150 environmental firms in the Slovak Republic conducted by the REC in 1995, most companies were found to be young and typically small. More than 65 percent were formed within the last five years and 67 percent had less than 25 employees. Privatization appears also to be proceeding rapidly in this sector as 87 percent of the responding firms had some private ownership.

Categorizing firms by sector is difficult because many firms included in the Slovak central register are not obliged to state their activity. Conversely, a large number give those areas in which they would also like to be involved. According to the Catalog of Ecological Firms in the Slovak Republic (1994, TEUTOP Trencin)[1], the most popular areas of activity among Slovak environmental businesses are waste and water management. The least popular is noise and vibrations, and radioactivity. The average firm deals in 2.75 areas and Table 2 shows the percentage of firms in their various fields of expertise.

Table 2: Areas of activity among Slovak environmental businesses

Sector % Firms Active Sector % Firms Active
Waste 63.1 Nature Protection 21.8
Water Management 61.2 Landscape Ecology 18.1
Air Protection 40 Noise and Vibration 13.4
Soil 27.1 Radioactivity 7.8
Mineral Environment 22.8 . .

Although it is difficult to determine the actual market spending, the combined annual revenues of the 150 environmental businesses surveyed by the REC was USD 22-31 million. The biggest revenue generators among environmental services included technical services, environmental technologies, and monitoring and testing. The highest percentage of incomes came from activities related to water (34 percent), solid waste disposal (29 percent), air (13 percent), and nature protection (7 percent).

Business and Government Dialogue

Central planning ceased to exist in the Slovak Republic following the political changes of 1989. In reality, this meant that the close contact which previously existed between government institutions and the business sector declined. The resulting absence of an information flow between the two sectors created a conspicuous, and sometimes uncomfortable void out of which grew new non governmental, independent, non-profit networks. These were to act as the bridge between ecology and economics, and between the world of commerce and the world of government.

In the autumn of 1993, The Association of Slovak Industrial Ecology (ASPEK) was founded with the above goal in mind. Practically speaking, ASPEK performs two main functions. First, on a state administrative level, it provides comments on environmental legislation and state environmental policy. Second, at the level of its members it helps deal with the actual problems of industrial ecology.

Quality Standards for Corporations

Questions are currently being raised regarding the implementation of a system which can characterize the ecological behavior of Slovak firms. The current system in use is similar in form to the requirements of ISO 9000 which is a quality standard for company products and services. The ISO 14000 quality standard series presents an Environmental Management System (EMS) whose goal is to improve environmental management practices. In accordance with the standards set by EMS, companies must adopt various environmental policies.

To achieve these goals, firms must adjust their system of organization, structure and human resources. Information about EMS policies and the ISO 14000 quality standard are available at Bureau Veritas Slovakia.

Professional Certification

Certification is an important issue to many environmental professionals. Currently, it is regulated in conjunction with legislation on air protection, water protection, waste and EIA.

Professional training is currently performed by institutions specifically approved by the MoE. Graduates of these institutions are awarded certificates which qualify them to give professional assessments. The MoE uses the accreditation process of the Slovak National Accreditation System (SNAS) in order to confirm the ability of institutions and individuals to measure emissions and to conduct analyses. SNAS provides accreditation for laboratories, inspection organizations as well as organizations that certify products, quality systems and staff (according to European Norms in the 45000 series). The SNAS is responsible for fulfilling the EU association agreement and is already in congruence with European Commission Certificate 4/49 'Accreditation Principles in Europe'.

Ministry departments have supported the adoption of these certification methods and also the fulfillment of the international norms ISO/TC 207 series and ISO 14000. However, progress in implementing these systems of certification will depend on:

Much of the discussion on the second day focused on eco-auditing. It was made clear that foreign firms will only be willing to invest in the Slovak Republic after checking a company's environmental status. Abroad, the system of eco-auditing is standardized and must be performed by a certified auditor. The question arose as to why there is a need for certified auditors in the Slovak Republic. In response, most audits are currently performed by foreign companies. While this results in an 'eco-label' allowing Slovak products to compete more effectively in the EU, it results in overpriced products at home.

It would be in Slovak companies' interest therefore to support the implementation of a national eco-audit scheme which would lead to certification being performed by local companies and certified Slovak auditors. The scheme would offer internationally recognized quality standards and should also result in the acceptance of Slovak audits abroad.

Endnote

1. Economic indicators for the current environmental business situation were gleaned from quantitative indicators which were set by data interpolation from information sources (1/ Katalog ekologickych firiem v Slovenskej republike, 1994, TEUTOP Trencin, 2/ The Environmental Industry and Markets in the Slovak Republic, 1994, Macek K.J., Urbanek V., for OECD, Paris, 3/ Ekologicky radca, 1995, ALLDATA the Slovak Republic plus, (v spolupraci s OS SOPK ZP a PB CONSULTING Presov, 5/ Databaza firiem, produktov, technologii a obbornikov v ZP, 1994-95, ALLDATA, PB CONSULTING) and put to the table form by Burda, P., P.B.Consulting Presov.


REC * PUBLICATIONS * COMPETING IN THE NEW ENVIRONMENTAL MARKETPLACE * SLOVAK REPUBLIC *
WORKSHOP SUMMARY

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