Examination of witness (Questions 294
WEDNESDAY 1 JULY 1998
294. Thank you for coming to see us. Perhaps
you would begin by telling us something about the Environmental
Action Programme Task Force and how it operates. How do you co-ordinate
what you do with the other partners who are involved with you?
(Mr Michalak) Perhaps I can begin with some history
and the big changes that have occurred in Europe in the late `eighties
and beginning of the `nineties as a result of the fall of the
Berlin Wall and the unification of Europe. Since then environmental
issues have become very important. As a result, in 1991 following
the initiative of the Minister of the environment of Czechoslovakia,
as it was then, environment Ministers from all over Europe were
invited to Dobris Castle in the Czech Republic to talk about the
environmental restoration of central Europe and what was then
the Soviet Union. The idea was to develop an action programme
to help countries catch up with environmental policy frameworks
and the state of the environment in western Europe. Subsequently,
such an environmental action programme was developed with the
assistance of the World Bank, OECD and experts from the regions
in central Europe. In 1993 in Lucerne, Switzerland, the environmental
Ministers met again and endorsed the action programme and established
machinery to implement it. The Environmental Action Programme
Task Force was established to facilitate work on the institutional
aspects of environmental policy. At the same time the Project
Preparation Committee was then established to facilitate environmental
investments. The EAP Task Force consists of member governments
from central and Eastern Europe NIS and western Europe, including
the US and Canada. It also includes the European Commission, international
financing institutions and international organisations. In addition,
our partners were invited to work within the Task Force framework.
They are representatives of NGOs, trade unions and industry. The
main methods of work are the following. The first is policy dialogue
at the Task Force level. Task Force meetings are held twice a
year when all the partners come together and discuss the work
and priorities that stem from the Environmental Action Programme
and the next steps to take to implement them. The second level
is action and dialogue. We establish networks of experts within
central Europe which are primarily responsible for three main
areas. The first involves policymakers from environmental agencies
in central Europe NIS. The work is carried out within the network
of co-ordinators who are responsible for developing national environmental
action programmes The second network that we have been working
with and supporting comprises environmental fund managers. The
Funds are semi-autonomous or even autonomous institutions dealing
with finance to support environmental investment in the region.
The third network is concerned with cleaner production centres.
Those are institutions that have been helping both the government
and industry to promote and implement good environmental management
in enterprises. In addition, we have been working on preparing
analytical surveys and reports to look at the current situations
in countries, for example: on specific aspects of national environmental
action programmes like criteria for priority setting, how can
priorities be arrived at, what methods are used, what are the
revenue-raising mechanisms for environmental funds? On the basis
of such analysis we have been developing best practice guides
and documents both for our clients in central Europe but also
for donors who can provide technical assistance. In this work
we have facilitated the dialogue among central Europeans and the
NIS and tried to bring them together. In the past those countries
have been artificially kept together and forced to co-operate.
That was not very much appreciated. After the break of those links
the region disintegrated. People began to look very narrowly at
their national interests. However, with the move towards harmonisation
within western Europe some competition began. There was a race
to see who got there first. We tried to get them together on a
very informal basis, to provide a framework for exchanging experiences,
seeing how something that worked in one country could be applied
in another; or if something was not working well we would avoid
it elsewhere. The other element on which we have been working
is the dialogue between central Europe in the NIS and donors by
trying to find priority areas which have the full backing of central
Europeans. We work with donors to fill the gaps. Apart from the
more formal activities, we have been working with donors on a
very informal basis. We have been working with TACIS and consultants
on assistance projects' design and implementation.
Lord Ponsonby of Shulbrede
295. How has the EAP Task Force been able
to resolve differences between the European Union and the recipient
countries on priorities and mechanisms for delivering technical
(Mr Michalak) First and foremost, we have tried
to shift the priority-setting exercise to the countries. One way
of doing this in terms of environmental policy development was
to encourage and work with countries in the regions on developing
national environmental action programmesprogrammes focused
on short-term needs and necessary steps to be taken to strengthen
the effectiveness of environmental policy instruments and institutions
in the country concerned. This was the primary way of trying to
determine the country's needs and priorities.
296. Have conclusions been reached by the
Task Force particularly in relation to Russia and Ukraine?
(Mr Michalak) We have just finalised a report
which assesses the development and implementation of national
environmental action programmes in central and eastern Europe
and the NIS. From that evaluation, it appears that several countries
have developed such documents and processes. We have been trying
to look at both sides: the formal commitment and also the sustainability
of that commitment. Several countries have developed those programmes
and they have been used as a mechanism for prioritisation.
297. Will that report be in the public domain?
(Mr Michalak) It is available in the folder with
other documents prepared by the EAP Task Force for the Ministerial
Conference in AÐrhus. As to these two particular countries,
we have found that progress has not been what we expected four
years ago. As you see from the report, our evaluation shows that
countries of the former Soviet Union can be divided into two groups:
one comprises Russia and Ukraine and Belarus; the other comprises
Moldova, the countries of the Caucasusus region, and the countries
of central Asia. The difference is that Russia, Ukraine and Belarus
have inherited quite significant infrastructure from the Soviet
Union. The planning exercise was widely used there. To some extent,
the same methods were used even after the transition, whereas
countries in the Caucuses and central Asia have not developed
the capacity in the past and so have had to build the whole environmental
policy institutions from scratch. They were therefore very keen
to adopt modern approaches to environmental policy and implementation.
Therefore, in Russia, Ukraine and Belarus there has been an incremental
approach, injecting certain elements of priority-setting. Other
countries adopted a comprehensive approach given that they have
had to build the system from scratch. They have been able to use
the experience of central Europe and western countries fairly
298. It is paradoxical that those countries
that had some degree of planning and concern for the environment
have made less progress than others?
(Mr Michalak) Yes.
299. Your paper tells us that the TACIS
environmental awareness-raising project is judged to have been
successful. Have there been other TACIS environmental programmes
in which OECD has been involved and which have been successful
and effective? If so, which ones?
(Mr Michalak) It may be a little premature to
judge the effectiveness of certain programmes. Those in which
we have been involved are at the beginning or in the middle of
the process. We have not been involved in many projects that have
reached the final stage. One project that has been looked at in
the beginning of this year is BECARC. That project focuses on
developing capacity for project identification and preparation
for external assistance. It was fairly modest in size; it was
not a big project. It provided direct and longer-term assistance
to people in the Ministry of Environment in Ukraine. It looked
at how projects could be taken from the level of a rough idea
to a level where it could be accepted by financing institutions.
It has been fairly successful although it is a small scale project.
300. I did not catch the name of the project.
Is it an acronym?
(Mr Michalak) It is, BECARC.
301. Based on that, do you think that small
projects rather than very large ambitious projects on the whole
tend to work better, or is that unfair?
(Mr Michalak) It is much easier to manage small
projects between the supply and the demand side. From my experience,
it is also important to say that what counts are the big projects.
The effectiveness and the progress achieved by TACIS is judged
very much on the basis of big projects. It is important to some
extent to have flagship projects which can be very beneficial
to TACIS and the countries concerned, if they are properly managed.
I am referring in particular to projects that have been supported
by interstate programmes. To an extent, the effectiveness of big
projects can be very greatly affected by the fact that, say, the
Russian language can be used across the region. That can save
a lot of money in terms of translation services and the use of
consultants who can provide direct support. Those projects help
also to bring people together across borders.
Countess of Mar
302. Your memorandum refers to the frustration
of participation in the process of setting up the new regional
environmental centres. I understand that progress is very slow.
What changes do you think are needed to the programme to make
it more acceptable and relevant to the needs and circumstances
in the newly-independent states?
(Mr Michalak) That is a very difficult question
to answer. We have not been as much involved in the new REC establishment.
At an earlier stage when the attempt was to take the good examples
in central Europe and follow them in the NIS. Over time the activities
of the REC in CEE have changed from working purely with NGOs to
becoming more intergovernmental bodies for central Europe, taking
account of the challenges that countries face in the process of
harmonisation of legislation and enlargement of the European Union.
The people from the former Soviet Union saw that change and that
stimulated a very different approach to the initial idea of the
new REC becoming centres for the support of NGOs. In different
countries the process is going in different directions. From what
I have seen, the one in Moscow is supposed to be very much a think
tank to support the dialogue between the environment ministry
and the ministry of finance and economy. In the Ukraine or Moldova
it is to provide support to NGOs. Certainly, there are different
methods. At this stage it is very difficult for donors country
to prejudge the final shape of those centres. I think that the
dialogue and discussions about the future shape of the centres
must take place at an international level with the involvement
of several donors but also at national level with stakeholders.
303. One of the impressions we have received
is that it is a mistake to try to impose preconceived western
ideas on newly-independent states and that there must be a flexible
approach. Compared with western Europe, what are the main cultural
differences that need to be taken into account when working in
Russia and the Ukraine? What is the best way of overcoming these
(Mr Michalak) I want to pick up a few factors
which from my perspective are very important. They also influence
our work as an organisation that deals with people from the newly-independent
states. The first problem is secrecy. There is still the past
burden of very strict control over the flow of information. People
are still afraid to share or to be exposed to information. They
feel that it may impose a commitment or obligation on them. In
some of the NIS that is a great obstacle. There is also a lack
of horizontal communication. Secrecy allows for vertical communication
but prevents horizontal communication. For example, in our work
on the development of national environmental action programmes
in central Europe structures at several levels have been set up
to discuss matters and prepare analytical material for political
blessing and implementation. This has happened in Hungary, Poland
and the Baltic countries. Several working groups have been established
at expert level dealing with biodiversity, water management, industry
and energy with the participation of experts from various stakeholders,
including ministries, NGOs and independent experts. Another important
element is the establishment of groups to supervise and provide
strategic direction for that work. Often invitations are extended
to people like deputy ministers of agriculture and members of
parliament. Another element is the secretariat. There are people
in ministries of the environment who have drawn up documentation
and made sure that the next steps are followed. It is interesting
that countries in central Asia and the Caucuses have adopted that
approach whereas in Russia and Ukraine it has not happened. The
environmental policies have been developed by individuals in ministries
of the environment with very limited consultation and expertise.
304. And with limited power?
(Mr Michalak) Yes. The other issue is technical
versus management skills in the NIS. This was also the case in
central Europe eight years ago. Those countries possess pretty
extensive technical and engineering skills, but the managerial
skills are lacking.
Lord Hughes of Woodside
305. It has been put to us by several witnesses
including the NIS representatives that the central and eastern
European experts can provide better value for money and more relevant
experience than consultants from EU countries. Do you share that
(Mr Michalak) I share it to some extent. I used
to work for the Polish ministry of the environment for a couple
of years. I then moved to Paris to work for OECD on programmes
involving central Europe and the NIS. To be aware of the social
situation and the environment and have very close historic links
and relations between countries in the region was also very helpful
in establishing direct personal links. Many people in central
Europe know Russian and Russian is the language that is used for
communication within the NIS. Knowing the institutional framework
and the reactions that might arise within the government for myself
and my colleagues is sometimes easy to predict. For example, in
the area of planning one can make several assumptions about what
will materialise. The people of the NIS have remained very much
remote from contact with the west and western Europe, whereas
it has been much easier for Poles, Hungarians or even people from
Baltic countries to have access to contact and links with western
Europe and its institutions. I think that we can provide a bridge
by explaining several rules.
306. How do we redress the balance or imbalance
between the use of western consultants and central and eastern
(Mr Michalak) I do not think that there should
be a big shift from the use of western consultants to central
European consultants. The issue is one of promoting twinningto
use western knowledge and twin it with central European knowledge.
We have been doing this in our projects. Several of the central
Europeans with whom we have been working are now working for the
TACIS projects to develop common environmental policies for the
widening of the EAPs.
307. Perhaps you would be a little more
explicit. The argument you make is that far too much of TACIS
money is spent on private European consultants. They bid for the
contracts and get the money. Most of the money is spent not in
the recipient country but on the private consultants. It has been
said that expertise is available in the NIS which is not being
used. Is the technical expertise available in the NIS to match
what can be provided by western consultants? The argument we have
heard is that the money could be better spent by employing local
people rather than big conglomerates in Brussels, Amsterdam, London
(Mr Michalak) From my perspective, this is an
issue for regulation within TACIS. I do not know how it can be
changed. I can provide an example of a project on which we have
been working with PHARE on supporting a network of environmental
fund managers. The PHARE contract was awarded to a western consultancy
firm but the EAP Task Force is involved very much in terms of
how the work programme was to be designed, who would be invited
to particpate from the recipient side and what was involved. We
have been working very closely with that firm and to some extent
also negotiating with them about the share of resources being
put into their machinery and the resources being put into projects
at local level. I do not think that I have a ready answer to it.
It is very difficult.
308. In your paper you comment that further
improvements are possible in the co-ordination of TACIS activities
with those of other donors, especially if technical assistance
can be followed by specific and well-focused investments supported
by TACIS and other donors. How can you make the improvements that
you believe are necessary?
(Mr Michalak) To some extent, the EAP Task Force
and Project Preparation Committee is such that the donors can
make better use of the money that is available and link the analytical
process and feasibility studies followed closely by hardware or
actual investment. A couple of years ago the main criticism was
that several studies had been made by western consultants which
had not been followed up by investment. Over time, the Project
Preparation Committee and Task Force have facilitated the linkage
between policy, technical assistance and investment. The other
institutions are then very much ready to respond at any moment
to emerging needs and to follow up with loans or even private
resources. That is the machinery that can be used. I am not sure
that TACIS has been using this sufficiently. I looked at the inception
report on a programme called Widening of the EAP. That project
is very much focused on project preparation and links it to investments.
We have been involved in the design of that project. That project
is well designed to match the technical assistance with follow-up.
We have great hopes for that project, but it is too early to say
how effective it will be.
309. I start with a comment and then put
a question. My comment is that in paragraph 6 of your very interesting
paper you speak about the main obstacles for effective co-operation
between TACIS and the NIS. You list what has been identified by
the Task Force as those obstacles. In paragraph 7 you set out
where your organisation considers the shortcomings have been in
the TACIS organisation. Everything that you say in those two paragraphs
come very close indeed to what we have found in the progress of
this inquiry. That being so, what particular recommendations do
you think we should make to the European Commission whom we intend
to see tomorrow?
(Mr Michalak) The EAP Task Force and Project Preparation
Committee is an international process which TACIS is welcome to
use for the benefit of that programme and the recipient countries.
This process gathered momentum at the ministerial conference last
week in Arhus where the declaration adopted by Ministers mandated
the EAP Task Force and the PPC to put greater emphasis on the
work with the newly-independent states. We have had a commitment
from a pretty high level, so this is a good place in which to
follow up the commitment and use the capacities and potential
available in TACIS.
310. We were told by the witness from the
Commission that it had an informal meeting every quarter with
other donors which was believed to be sufficient co-ordination.
It seems to me that something more formal is required.
(Mr Michalak) We have been exchanging information,
but from outside we feel that it is not really sufficient. The
exchange of information is important. It is not enough to look
at the design of a project. Very often we have tried to get feedback
from recipient countries on a very "soft" basis. We
have not seen much influence on that from outside. But what TACIS
lacks to some extent is a strong feedback from recipient countries.
That should allow for the building of trust on both sides so that
the design of strategic directions of the TACIS programme can
be taken to the level where there are several interest groups
involved. If one creates trust one can have the synergies between
the various actors present in that region.
Chairman: We are very
grateful to you for that very interesting information. We also
thank you for your extremely useful paper.