Chapter 4: Romania

(continued)

4.7 Assistance and Barriers to Business Development

In general, external support for the environmental business sector in Romania is very low. The government shows little interest in supporting this sector, and, as Table 4.22 shows, there is no other major institution providing significant assistance to Romania's environmental business sector. Therefore, it is not surprising that most important source of support indicated by survey respondents - business or industrial associations - received mention by only 31 percent of the companies. Professional training institutions received the next highest mention, but still the low response indicates a lack of training institutions with programs tailored specifically for the environmental business sector. Only a fourth of survey respondents mentioned governmental institutions, in particular the Ministry of Water Resources, Forests and Environmental Protection, as an important source of assistance to business development.

TABLE 4.22: IMPORTANCE OF SELECTED SOURCES OF ASSISTANCE
Institution/ Organization	Responses for "Very Important" or "Important"

Business or industrial associations	31%
Professional training institutions	30%
Government	26%
Scientific or academic institutions	23%
Financial institutions	19%
International organizations	13%

Table 4.23 shows the perceived barriers to development of the environmental business sector in Romania. The major obstacle has been the legal regulation and registration requirements, mentioned as a barrier by 70 percent of the companies (see Table 4.24 for information about Romania's certification requirements). Access to credit and finance and general access to information were also seen as barriers to business development, mentioned by 62 and 56 percent, respectively.

TABLE 4.23: PERCEIVED BARRIERS TO BUSINESS DEVELOPMENT
Barriers to Development	Responses for "Major Barrier" or "Barrier"

Legal regulations and registration requirements	70%
Access to credit and finance	62%
General access to information	55%
Market demand for products and services	48%
Environmental regulations	39%
Tax regulation	33%
Foreign competition	16%

TABLE 4.24: CERTIFICATION OF ENVIRONMENTAL PROFESSIONALS IN ROMANIA
Certification of environmental professionals is regulated by a 1996 order of the Minister of Waters, Forests and Environmental Protection (no. 278/1996). According to this order, "specialized units, juridical persons and individuals" can be certified to conduct environmental impact assessments and/or environmental audits. While there is only one level of certification for environmental audit for juridical persons, individuals can request to be certified as assistant experts, associate experts, or principal (senior) experts according to their degree of expertise. For environmental impact assessments, there is only one level of certification both for juridical persons and individuals. The certification process, drafted with the help of foreign experts, is compatible with similar processes in Western countries. The complete files of the applicant institution or person requesting the certification for one or both of the activities is assessed by a commission. In certain cases, "when clarifications are needed," the applicant may be interviewed by the assessing commission. Successful applicants receive the certification for a period of two years. At the expiration of the two-year period, a renewal of the certification must be requested. After two successful renewals, i.e. after six years, certified institutions or individuals must pass a new examination. For individuals certified for environmental audits, promotion to a higher level than the one already obtained is possible at any time. The procedure is also based on files, and applicants must prove they have raised their degree of expertise to the requested higher level of certification. The 1996 assessment commission comprised the minister, a councilor and three university professors. An additional 40 university professors were associate assessors. The process was administered by a technical secretariat based at the Ministry of Water Resources, Forests and Environmental Protection, at the Strategy and Regulation Direction. Since May 1996, when the certification process was regulated by the order of the Minister, only professionals certified according to this procedure are authorized to conduct environmental impact assessments and environmental audits. Environmental impact assessments and environmental audits are necessary for obtaining the environmental agreement and authorization requested by the Environmental Protection Law. The procedures, minimum requisites etc. for an environmental impact assessment and for an environmental audit are established by Order No. 125/1996 of the Minister of Waters, Forests and Environmental Protection "for the approval of the regulating procedure of economic and social activities with impact on the environment."

TABLE 4.24: CERTIFICATION OF ENVIRONMENTAL PROFESSIONALS IN ROMANIA

Certification of environmental professionals is regulated by a 1996 order of the Minister of Waters, Forests and Environmental Protection (no. 278/1996). According to this order, "specialized units, juridical persons and individuals" can be certified to conduct environmental impact assessments and/or environmental audits. While there is only one level of certification for environmental audit for juridical persons, individuals can request to be certified as assistant experts, associate experts, or principal (senior) experts according to their degree of expertise. For environmental impact assessments, there is only one level of certification both for juridical persons and individuals. The certification process, drafted with the help of foreign experts, is compatible with similar processes in Western countries.

The complete files of the applicant institution or person requesting the certification for one or both of the activities is assessed by a commission. In certain cases, "when clarifications are needed," the applicant may be interviewed by the assessing commission. Successful applicants receive the certification for a period of two years. At the expiration of the two-year period, a renewal of the certification must be requested. After two successful renewals, i.e. after six years, certified institutions or individuals must pass a new examination. For individuals certified for environmental audits, promotion to a higher level than the one already obtained is possible at any time. The procedure is also based on files, and applicants must prove they have raised their degree of expertise to the requested higher level of certification.

The 1996 assessment commission comprised the minister, a councilor and three university professors. An additional 40 university professors were associate assessors. The process was administered by a technical secretariat based at the Ministry of Water Resources, Forests and Environmental Protection, at the Strategy and Regulation Direction.

Since May 1996, when the certification process was regulated by the order of the Minister, only professionals certified according to this procedure are authorized to conduct environmental impact assessments and environmental audits.

Environmental impact assessments and environmental audits are necessary for obtaining the environmental agreement and authorization requested by the Environmental Protection Law. The procedures, minimum requisites etc. for an environmental impact assessment and for an environmental audit are established by Order No. 125/1996 of the Minister of Waters, Forests and Environmental Protection "for the approval of the regulating procedure of economic and social activities with impact on the environment."

Funding is particularly problematic in Romania because the legislation does not give incentives to environmental business and funding must therefore be acquired through normal bank loans. These are difficult to obtain because environmental activities are expensive and do not result in immediate profits. However, it is hoped the creation of the National Environmental Protection Fund will contribute to the financing of environmental projects. Furthermore, foreign institutions such as the PHARE Programme, the Romanian-American Enterprise Fund, USAID and the World Bank have specific environmental programs (e.g. in the field of energy-efficiency and eco-efficiency of highly polluting industries) from which funding may be available.

During the survey, several senior managers of environmental businesses made the following suggestions for donors and investors who wish to help the development of Romania's environmental business sector:

Support the creation of private small and medium-sized companies.
Give grants and loans for producing environmental goods and services.
Offer general management training.
Offer subject-oriented training.
Support capacity building and strengthening of professional associations.
Support the creation of environmental business information centers.

Finally, about half the respondents considered low environmental expenditures, and hence low market demand for their products and services, as an obstacle. Only 39 percent indicated environmental regulations were a barrier, and only 16 percent mentioned foreign competition as a barrier to business development.

REC * PUBLICATIONS * EMERGING ENVIRONMENTAL MARKET 2 * ROMANIA