Since 1989 there has been a general decline in economic activity, although production figures have shown modest growth this year. Privatization of industrial enterprises did not start until this year, thus there is unlikely to be significant growth over the next few years. Agricultural privatization is virtually completed, but development is hampered by a lack of funding to support material investments and operations. There has been considerable growth in services, while activity in the transport sector has reached the level of the 1980's.
There has been a decline in environmental investments in recent years. In 1994 state investments amounted to only 2.6 % of the state budget, of which a mere 5% were allocated to the environment. The economic downturn has created a very hard situation for several groups of society such as pensioners, families with more than three children, and industrial workers (who have been laid-off because of shut-downs or decline in production in several enterprises). A large part of the population is now living below the official poverty level. The government is under public pressure to address social issues, such as social security, health care, public safety, etc., and the general level of environmental awareness is rather low among the population.
For these reasons, the state pays most attention to social security issues. Thus social security, employment, and increased living standards have a much higher priority than education, health and the environment, which have a low profile on the political agenda. This does not mean that the environment is neglected by the government, but that priority is given to the short-term actions with clearly visible results. Environmental issues receive lip-service from the government, which has not implemented appropriate, concrete measures to address the problems.
With economic conditions in Latvia in a general state of flux, long-term planning of strategy and programs is extremely difficult. Unfortunately, it is difficult to draft a strategy for environment-related activities in the absence of a clear plan for the overall development of the country over the next 10 to 20 years.
Green parties, which achieved political power in 1990, have lost most of their supporters and are no longer represented in the Parliament.
NGOs are still at an early stage of development, with only a handful in existence. Nevertheless they are regularly consulted by the government and are active at the national level.
Information on the environment is collected by the MoE and subordinate organizations. Data is gathered by regional committees and the Environmental Data Centre (EDC), then processed in the EDC and Environmental Problems' Analysis Centre. The final information is presented to the MoE which disseminates information through the mass media. In addition to the subordinate organizations, scientific institutions also have information on the environment, e.g. the Institute of Biology. To a certain extent NGOs (for example, the Latvian Fund for Nature) have also collected information.
Access to environmental information is free, as mandated by the June 1991 Law on Environmental Protection; in practice, this regulation is not always followed by some state institutions that collect and process monitoring data.
Not many changes in information flow have been achieved so far, although priorities have been modified significantly. In cases where authorities practiced 'traditional,' media-specific pollution abatement before 1990, new, integrated approaches have been adopted, with a strong emphasis on pollution prevention. This is particularly true in coastal management activities, where a "Maritime Board" will be established. Regarding pollution prevention, such integration is only anticipated but not yet formulated. There is a need to deal with presently polluted sites, especially ground water resources. However, most of the polluting industries are shut down at present, so the number of acute environmental problems that could cause immediate direct damage to human health has decreased. Currently, there are no regulations dealing with past liability, or the cleaning-up of on-site contamination; there are only pilot projects financed by the state budget or foreign investors.
Finally, much more attention is being paid to economic considerations. The first Law 'On the Natural Resources Tax' has been in force since 1991, and an amended version of it will be introduced in 1995. There are attempts to include the 'polluter pays' principle in the new version of the law, and to introduce a new set of economic policy instruments, including tradeable permits or value-added taxes for hazardous products.
The main national documents in environmental protection are the National Environmental Policy Plan for Latvia (NEPPL), which is a long-term strategy, and the National Environmental Action Program (NEAP), which is meant to guide short-term actions. NEPPL was completed by the end of 1994, while NEAP is supposed to be completed in August 1995.
Since the end of 1993, the MoE has been working on the elaboration of the National Environmental Policy Plan for Latvia. It determines the main direction, principles, and instruments of environmental policy, and contains a comprehensive analysis of priority environmental problems. The NEPPL was adopted by the Cabinet of Ministers in May 1995.
There were several reasons to prepare the National Environmental Policy Plan for Latvia. This plan intends to enumerate the country's priority environmental problems, explain how these can be solved, and will set forth the notion of shared responsibility for the solution of these problems, involving the appropriate economic sectors, consumers and the government. It outlines goals, sketches strategy, and sets priorities, providing a framework within which everybody's responsibilities in managing the environment are made clear. It shows that all environmental policies are the elements of a consistent package. It also demonstrates that Latvia takes environmental policy seriously, that it respects its obligations under the environmental treaties it has signed, and is consequently attractive to investors.
The government is trying to apply the following concepts in its approach to formulate an environmental policy:
This plan is not the end of the process. Its value lies in its implementation. The plan is envisioned as the start of a process of continuous improvement. However, it is impossible to foresee society's response to these policies, or to predict the overall rate of national development. Thus environmental policy has to be formulated through 'learning by doing', and most probably the NEPPL will be updated in the very near future.
As previously mentioned, the NEPPL is a general policy document. But to solve the problems, short-term actions are necessary. Therefore, a National Environmental Action Program will be elaborated. It will have two parts: (i) a short-term action program (1-2 years); (ii) a long-term action program. Work started on the NEAP in Autumn 1994.
NEPPL will set the environmental policy goals for 15-20 years and will be revised after each general election (these occur every 3 years starting in autumn 1995). The NEAP, on the other hand, will consist primarily of projects of varied duration, but the document will probably be revised every year or two to replace problems which have been solved (or at least to which special attention should not be paid anymore) with new priorities.
Obviously, both the NEPPL and the NEAP should be based on a number of other documents including the report on the State of the Environment, the Public Investment Program and others. Unfortunately, waiting for these documents to be completed would delay the whole policy-making process for a considerable time; thus, all of these documents will have to be developed simultaneously.
There is a good foundation for the development and implementation of environmental policy in Latvia. However, there are a number of serious problems as well, most of which arise from the transition process.
Institutional structures in the country are still changing rather frequently, thus troubling coordination and information-sharing between and within the institutions involved. Most of the sectoral ministries have yet to clearly formulate their policies; reliable forecasts and, in some cases, proper statistical data have not been presented. The privatization process is underway, and future patterns of industrial and agricultural production can hardly be identified until the process is concluded. As a result, most target groups are disorganized, and cannot properly participate in negotiations on environmental issues. The general economic decline in 1990 - 1993 resulted in a shortage of funding - both public and private - for most social needs, including environmental protection. Environmental expenditures from the state and municipal budgets, as well as public investments in this field are insufficient to solve our present environmental problems and prevent new ones from arising.
Now Latvia is slowly restoring its economy - a slight increase of industrial production can be observed, and inflation has been brought down to targeted levels (24% in 1994). In this period of economic restoration, policy planning is of the utmost importance to guide development.
Social changes are also substantial. As the economic decline is influencing nearly all members of society, short-term interests are winning-out over long-term objectives to a greater extent than in stable societies. This has resulted in a decline of environmental awareness in the last five years, and unsustainable use of natural resources. There is also a certain public skepticism about the planning procedure and plans in general.
At present the most important policy making activity is the development of the NEPPL, as described above. Representatives from different institutions and organizations are taking part in the elaboration of this plan, including scientists, NGO representatives, and experts from private companies. There is no association representing the industrial sector, and just a few representing the agricultural sector. The second draft of a policy plan will be sent to all relevant organizations for comment upon its completion.
Actual implementation will take place on the regional and local levels. Regional Environmental Protection Committees have good contacts with local NGOs, which are regularly invited to comment on major projects.
Monitoring is, to a large extent, carried out by scientific and academic institutions, like the University of Latvia or the Institute of Biology. Scientists are also involved in the preparation of different legal documents, environmental consulting (in Environmental Impact Assessments), and the practical execution of different environmental studies.
It is expected that the new Law on Natural Resources Tax will substantially increase environmental revenues and contribute a greater share to the financial instruments available for the implementation of environmental policy. On the other hand, it is expected that the NEAP will be of the utmost importance in improving the enforcement of environmental policies in the field of direct regulations as well.
The first laws and regulations on environmental protection were passed between 1990 and 1993, as were the regional structures, the Environmental Data Center, the State Environmental Inspectorate, and State Environmental Expertise Board.
The following laws have been enacted:
In 1993 the MoE was founded by merging the Environmental Protection Committee with the Ministry of Architecture and Building. This MoE seeks to employ physical planning and regional development concepts to ensure the balanced development of various sectors, to use them as environmental policy instruments, and, consequently, to encourage sustainable development. The MoE has full responsibility for environmental policy development in Latvia.
The environmental protection system consists of the MoE and several subordinate organizations: the Environmental Data Center, the Environmental Problems Analysis Center, the State Environmental Expertise Board, the State Environmental Inspectorate, and nine Regional Environmental Protection Committees.
The EDC is responsible for the collection and processing of environmental information. Its central laboratory certifies all other environmental laboratories in the country, and prepares the official testing methods for environmental analysis (which are subject to ministry approval). The EDC also has a Data Processing Unit, which works with centralized data bases and is responsible for the design and operation of an environmental information system.
The Environmental Problems Analysis Center is responsible for the analysis of environmental data and for drawing conclusions from the results of environmental monitoring. It will be restructured as the State Environmental Information Board, which should provide an interface between raw data sets and political decision making.
The State Environmental Expertise Board (SEEB) is very similar to Environmental Impact Assessment bodies in other countries. It carries out EIAs or requests that the investor does so; in either case, the project is subject to final approval by SEEB. SEEB deals only with projects of a national scale; smaller projects fall within the responsibility of the Regional Environmental Protection Committees.
The State Environmental Inspectorate is the main authority for control and enforcement. It has several divisions: the Nuclear Safety Inspectorate, the Marine Inspectorate, the Flora and Fauna Inspectorate, the Inspectorate for Land Inspection, etc. State environmental inspectors have extensive rights set forth in a special legal act, however, in practice these rights are not always realized.
The Regional Environmental Protection Committees perform the tasks of environmental authorities on the regional and local level. They are responsible for Environmental Impact Assessments of small-scale projects and the collection of environmental data. They have their own laboratories for these purposes.
All these institutions are financed by the state budget through the MoE.
Local and regional authorities usually have a division or at least some people dealing with environmental problems. They are supposed to co-operate with the Regional Environmental Protection Committees. Their functions and responsibilities differ from one case to another, as they are determined by the local/regional authority itself. These functions usually center on project management and the development of local environmental regulations. These structures are financed from the respective municipal budgets.
The general situation of the industrial and agricultural sectors will remain unclear for the next few years, and their role in environmental protection is difficult to forecast.
Use of Environmental Impact Assessments is increasingly common in large development projects. Western investors often consider EIAs a precondition of investment.
In 1990, during the first parliamentary elections, the Green Party succeeded in earning seven seats in the national parliament. Thus, in 1990-1993 there was a strong green lobby in the Parliament and governmental structures; however, public awareness was rapidly declining due to the changes in the political and economic situation, and the major decline in the standard of living.
Since 1993 the situation has not improved: the Green Party is no longer represented in the Parliament, environmental NGOs have lost their supporters and popularity, and authorities, the media, and the general public pay little attention to environmental issues in day-to-day life.
There is an obvious lack of communication between environmental authorities and the mass media. In order to achieve substantial improvements in this field, the Public Relations division of the MoE is working on a communications strategy, which will be a supplement to the National Environmental Policy Plan.
There are several environmental NGOs, which are active in Latvia at present. These are:
The overall strategy for investments is that they should contribute to a sound and healthy economy. But a side-effect of this strategy should be a contribution to a sustainable environment. The ministry strives for "win-win" investment situations.
This means that Latvia should try to attract investors who are willing to install environmentally friendly technologies. And in this case, the country has many opportunities, because most old-fashioned industry has fallen apart and there is an opportunity to build up new industries that can meet international standards of environmental protection.
Principles of environmental investments have been formulated, such as mobilization of resources, integrated approaches, softening of loans and prioritizing human health.
The most important principles in financing environmental projects are resource mobilization and the implementation of foreign technical assistance, as well as softening loans from Western donors. At the same time, incorporation of environmental interests and investments into the environmental sector should be considered of utmost importance in appraising any kind of development project. Cost-benefit and cost-efficiency analyses need to be applied universally throughout the economy.
The Liepâja project is an example of the mobilization of resources. Feasibility studies are funded by the municipality, the state budget, and PHARE, while foreign investment is based on World Bank credits, and possible Swedish and Finnish grants and NEFCO credit.
Another important principle is an integrated approach to problems in order to achieve overall development of a particular area. Again the Liepâja project is a good example - it deals with water management, coastal zone management, tourism development, nature conservation issues, harbors, etc.
The reduction of the pollution load to the Baltic Sea according to international commitments, and the reduction of negative impacts on human health are also amongst the general principles of the investment strategy.
The activity of governmental, private and international investors is being coordinated: first, through the Public Investment Program, and, second, by the ministry's Projects Department, which has sole responsibility for the development and management of investment projects.
At the moment NGOs are not really involved in planning public expenditure because of their generally low level of activity and the scarcity of resources available to them. However, experts from the Latvian Fund for Nature and scientific/academic institutions are frequently involved in feasibility studies for major projects.
Transboundary pollution issues are focused on water management, with bilateral agreements in effect with Lithuania, Russia and Belorussia. The latter treaty will allow for the construction of a warning system located on the Daugava river, at the Latvian/Belorussian border.
It seems that the success of Liepâja and a number of smaller investment projects (mainly waste water treatment or municipal heating systems in small municipalities) was achieved through improvements in project management within the ministry. The fact that national environmental priorities were finally defined clearly during the preparation of the National Environmental Policy Plan also played a positive role. Clear targets and a realistic implementation schedule were set up, and technical and financial feasibility was demonstrated by rigorous studies. The positive attitude of city authorities also played an important role.
On the other hand, a lot of projects fail immediately after the feasibility or even pre-feasibility studies are carried-out. There are several reasons behind this. First, very often, local and regional authorities or sectoral institutions are not willing to co-operate effectively. Second, if the study is carried out by an all-Western team, it is often too theoretical and abstract, and cannot be implemented in the country.
Since the end of 1993 the focus of the MoE has shifted towards long-term policy planning and to providing for better preparation and management for large international environmental investment projects.
An example of long-term planning is the National Environmental Policy Plan. The National Environmental Action Program will be developed by mid-1995, which will focus on short-term priorities and will take a more practical approach, listing most immediate actions to be taken in developing a legal framework, institutional development, investment projects and communication. The first two issues will play a minor role in the NEAP, because they have been dealt with for a number of years already, and considerable progress has been made. However, some minor changes and amendments are still required.
In the next few years, the NEAP will form the basis for the MoE's proposals to the National Investment Program and state budget. Draft chapters of NEPPL and outlines for the NEAP are frequently employed as background for preparing important governmental decisions, and for negotiations with donor countries and international financial institutions.
An important feature of both documents is that the process is believed to have more value than the documents themselves. The final versions, when approved by the government, will be starting points for future policy development. Participation of different governmental institutions, scientists and NGOs in the preparation process is in itself an important development.
Policy development is becoming an increasingly important element of the total scope of activities undertaken by Lavia's environmental authorities; at the same time, authorities will pay considerable attention to the practical implementation of investment projects.
Different interest groups are involved in drafting the NEPPL, but most participants represent sectoral ministries and the scientific community. There is no mechanism for involving a broader audience in policy development at this time. However, the NEPPL will be made publicly available after it is accepted by the government, and a shorter version will probably be published for use by interested members of the public.
To date, there are no ideas on how to encourage public participation in NEAP development. The leading opinion in the MoE is that the NEAP should be a government document, although this opinion may change during the drafting process.
The public did have a degree of influence in the process of institution building that took place in 1990, when the Environmental Protection Committee was founded. It was mainly insured with the help of the Green Party, which then had a strong position in the political arena. Now environmental institutions are generally well developed, and only minor adjustments are needed; currently there are no effective mechanisms for ensuring public participation in this field. Scientists and NGOs are frequently consulted and have a significant impact on most decisions.
Public participation in the planning of environmental investments has not been ensured. Decisions are taken by the municipalities and central government, who can be influenced by public opinion, but environmental projects seldom attract wide public attention in Latvia.
To summarize, legal provisions for public participation should be supplemented by intense efforts to improve communication with the general public and with key actors in the field. Efforts should be made to raise environmental awareness throughout Latvian society, and to raise the importance of environmental issues in the government's political agenda.
Policy goals can only be achieved if all groups of society address the matter, supported by the authorities. The most important target groups of polluters are not properly represented, so that the government lacks suitable partners to negotiate with in creating implementable measures and instruments.
It is expected that both the NEPP and NEAP will be the first step in establishing co-operation with these target groups, and, moreover, in making the whole Cabinet of Ministers agree on a common environmental policy of the government, as well as on common action and a clear division of responsibilities. Furthermore, the government should develop effective mechanisms of co-operation with key actors in industries, which up till now has been rather problematic, due to the process of economic restructuring.
The Environmental Action Program for Central and Eastern Europe's recommendations on good housekeeping and other "win-win" investment strategies have been most valuable. These approaches could attract the attention of various economic sectors and lead to substantial progress in the integration of environmental and economic activities. Hence, a lot of attention is paid to the dissemination of the EAP approach to as wide an audience as possible.
Finally, it has to be stressed that the current approach to the development of national policy documents in Latvia provides an opportunity to create a comprehensive and consistent environmental policy, with strong links to other sectors of the economy and to society as a whole.