PART II: Case Examples from Central and Eastern Europe

Natural Resources Tax Law

Latvia

Una Blumberga

Background

In 1995, Latvia ratified the "Convention on the Protection of the Ozone Layer," "The Protocol on Substances Destroying Ozone Layer" and the U.N. Convention "On Climatic Change."

In 1995, the Ministry of Environmental Protection and Regional Development (MEPRD) completed a report on the National Communication of the Republic of Latvia in accordance with the U.N. framework of the Convention on Climatic Change. Approximately 500 copies in Latvian and 800 copies in English were distributed in Latvia. The MEPRD organized a seminar on climate change issues and NGOs were also invited. International attention and NGO campaigns related to ozone layer depletion have greatly contributed to the increased attention paid to climate change issues and greatly enhanced public awareness.

The issue of greenhouse gases is also indirectly connected to the "Law on Natural Resource Taxes," which was adopted in 1995. The law is aimed at reducing the use of natural resources and pollution which indirectly influence climatic changes and damage the ozone layer. The MEPRD initiated the law and was also able be responsible for the enforcement of regulations. The Harvard Institute for International Development also assisted in preparing the law. The drafting process was open to the public. NGOs, particularly the main Latvian NGO, the Environmental Protection Club (VAK), were interested in becoming involved in the decisionmaking process and making sure that the government implemented the provisions of the Convention on Climate Changes.

A national law was necessary to provide a framework for more rational use of natural resources as well as provisions to redress their irrational use.

Problems/Effects

Transboundary air pollution influences air quality and impacts human health and ecosystems, not only in one country but also in neighboring countries. At present, ozone layer depletion and climatic change problems caused by the greenhouse effect are two of the most serious global environmental problems. In order to advocate solutions to these problems, the implementation of different, comprehensive beneficial measures are needed in Latvia. Construction of treatment facilities, technological changes, legislation related to new environmental standards, increasing public involvement in decisionmaking and improvement of environment-related economic conditions are all necessary. The introduction of these measures would require discussion with the public and different target groups.

This case illustrates the wide scope and interrelationship of environmental and economic issues. Specifically, the MEPRD initiated the drafting of the Law on Natural Resource Taxes. The tax consequences of the exploitation of natural resources is an important component of business decisions, so here an economic measure can be seen to be very closely related to environmental issues such as climatic change. Efforts to pass this legislation must overcome the opposition of business interests.

Strategies Employed

VAK took a number of informal steps to contribute to the legislative process, contacting several international organizations, such as Coalition Clean Baltic (CCB) of Sweden and GrŸne Liga of Germany to obtain information on the relevant issues. VAK also submitted proposals for the first draft of the legislation prepared by the Ministry. Since the first draft was not adopted by parliament, NGOs (VAK, Arkadia, Green Library and CCB Latvian Office), together with the Latvian Green Party coordinated lobbying efforts to organize discussions with MPs, parliamentary commissions and related factions. Opposition to the suggested law came essentially from MPs connected to business circles.

In addition to the Latvian Green Party, the Waste, Water Supply and Sewage Associations submitted proposals for the draft. VAK also implemented several positive steps to further their position on the second draft. VAK brought to the deputies' attention the argument that the law is indirectly connected to climatic change and such a law promotes implementation of the Climate Change Convention in Latvia. Another argument used by NGOs concentrated on the Natural Resources Tax, which, if passed, would minimize the need to raise funds to remedy environmental damage from other sources. VAK also prepared articles for publication to educate the public about the need for such a law and to support its position when the draft law was published in the national newspaper. At this point, the public had a chance to express opinions and participate informally in the lawdrafting process. The MEPRD accepted some of the proposals. Several articles were also published on the advantages and disadvantages of a natural resources tax before the adoption of the draft.

Because of the increased public attention and improvement in the draft, parliament adopted the draft law in the first reading. The Environmental Protection Club organized a "flowers ceremony" to honor deputies who had supported the law. This made a positive impression and contributed to the draft's acceptance during detailed discussion in the second reading. Due to the lack of financial resources, VAK was not able to gain major electronic media involvement to support the campaign. National TV II prepared a short explanation on the law only after the parliamentary discussion and acceptance of the draft. The six-minute report drew a wide response from viewers. These activities were all carried out with minimal financial expenditures.

STAKEHOLDERS
Government:
National:
  • Ministry of Environmental Protection and Regional Development
  • Deputies and MPs

NGOs:
National and international NGOs:
  • Environmental Protection Club of Latvia (VAK), Arkadia
  • Green Library, Coalition Clean Baltic (Latvian office)
  • Coalition Clean Baltic, Sweden
  • GrŸne Liga, Germany
  • Waste, Water Supply and Sewage Associations

Business:
  • Businesses affected by the Natural Resources Tax Law
  • Harvard Institute for International Development, U.S.A.

Others:
  • Latvian Green Party
  • Newspapers and national television

Outcome

The draft law was passed in its second form with the active contribution of Latvian NGOs. VAK's participation helped garner support among deputies and raise the public awareness necessary to adopt the law and implement the Climatic Change Convention. Participation in the legislative process drew increased public attention not only to the proposed law but also to environmental issues in general in Latvia.

Lessons Learned

This case is an example of how the implementation of an international convention at the national level can be achieved through various nonformal means, such as preparing legislative drafts, lobbying with parliamentarians, raising public awareness about the necessity of such legislation and using wide media coverage.
  1. Education of the greater public and lawmakers about the necessity and advantages of an environmental tax was crucial in the creation and adoption of this legal and economic instrument. The use of the media, targeted articles, lobbying and discussion with MPs were useful tools in this process.
  2. Strong public involvement throughout the legislative decisionmaking can keep the process moving and positively influence the ultimate outcome.
  3. The implementation of an international treaty such as the Convention on Climatic Change can also be achieved by nonformal pressure. NGO lobbying can help the government to argue in favor of drafting different legislative or environmental economic tools and introducing necessary environmental measures. Due to the lobbying of Latvian NGOs, national legislation was adopted which implements international agreements.
  4. Gaining the positive support of parliament can be effective as a lobbying strategy. There are various traditional ways for achieving this, but sometimes innovative ideas can help even more to turn sympathy (i.e., the "flowers ceremony").
  5. The need to bring legislation in line with international environmental standards provides a strong incentive for the government, as well as NGOs, to pass effective environmental legislation in parliament.

REC * PUBLICATIONS * BEYOND BOUNDARIES * CASE EXAMPLES * LATVIA

PREVIOUS NEXT COVER PAGE HOME PAGE