Hungary: Workshop Summary

Introduction

The Regional Environmental Center (REC) hosted the second workshop in their series entitled "Competing in the New Environmental Market Place" on November 13-14, in Budapest. Over 60 guests, speakers as well as business representatives took part in the seminar. The main topic of the first day of the seminar was Hungarian environmental law (including water, air and wastes) and its approximation to European Union (EU) regulations. The main topic of the second day of the seminar was business initiatives in environmental management, methods of its implementation as well as an evaluation of the Hungarian environmental professionals certification system. The following sections summarize the papers and discussions presented for this workshop.

Government Initiatives

Environmental Regulations and European Union Approximation

The Hungarian Parliament enacted its new Act on the General Rules of Environmental Protection (Act No. LIII) in June 1995. It has been in force since January 1, 1996. The new bill is a framework act which provides general guidelines for controlling emissions, contamination and risks for all areas of the environment. It also establishes a framework for new charges, taxes and user fees for various products and emissions. Enforcement has begun with the enactment of the Act (No. LVI) on Environmental Product Charges and the Environmental Product Charges of Certain Products (passed June, 1995). Sometime in 1996, Parliament expects to issue complementary legislation which will be, at least in principle, in accordance with the legislation of developed countries, the regulations of the EU, and the guidelines of the World Health Organisation. Hungary is also committed to strictly observing those obligations undertaken in international agreements.

Air pollution has shown a decreasing trend in Hungary in recent years. This decline can be mainly attributed to:

The specific legislation on air pollution abatement is based upon the codified principles contained in the new Act on Environmental Protection and the national ambient air quality standard No. MSz 21854 established in 1990. A series of legislative modifications are expected in 1996. These will include definitions, emission limits, analytical requirements and methods for the evaluation of ambient air quality. The government is planning to modify the zoning system, which in turn will modify the ambient air limit values. In addition, they plan to change the methods for evaluating ambient air quality to assure comparability with international data. New standards will be required for pollution control equipment based on the best available technologies (BAT). In addition, the new legislation will assign specific emission limits to certain stationary sources (for example, power generation and waste incineration) and mobile sources (for example, private and commercial vehicles).

The system of collecting fees will also undergo major changes. In future, all enterprises will be liable to pay fees for emissions from stationary sources. In addition, the government will issue fines when emissions exceed the regulatory limits. The level of this fine will depend on the toxicity and quantity of the substance discharged and on the degree of excess.

The government is also planning to upgrade its air data management information system. The current system has been criticized for not providing quality data or enabling public access. The new legislation is expected to remedy this situation.

The Hungarian Parliament enacted a new Act on Water Management (No. LVII) in 1995. This act reflects the fundamental changes in the country's property structure and defines the rights and responsibilities of the national government, local governments, enterprises and individuals.

The current regulation on waste waters (3/1984 OVH decree, modified by 33/1993 KTM decree) sets limits and parameters for waste water discharges and defines the conditions under which fines must be levied. A new water regulation (designed to implement the Water Act) is under preparation. This will include criminal liability for property owners and new fees for waste water discharges. Revised discharge limits (in accordance with EU standards) will be established for different categories of pollutants according to the BAT standards for each. Regional environmental inspectorates, will have the right to issue waivers or set stricter water quality criteria.

One of the most critical environmental issues in Hungary is the contamination caused by improper solid waste disposal practices. Hungary leads Europe in per capita waste production. The new Environmental Protection Act embodies the basic rules and principles concerning waste, and calls for the drafting of a new act on waste management to comprehensively regulate all related questions, including a new waste classification system and the landfilling of waste. The expected date of approval for the new law is 1996[1].

In order to reduce the risk to human health and the environment, the government issued a decree on the control of hazardous waste production and waste disposal activities (27/1992 (I.30)). Hazardous waste transport is regulated by the Basle Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal. The import of specific materials posing risk to the environment is regulated by a separate decree. According to Decree No. 55/1987 (IX.30) MT, it is prohibited to import such materials except for their utilization as raw materials. For this activity, local environmental inspectorates must issue a special license. The new Environmental Protection Act also tackles the issue of hazardous materials and technologies. Regulations implementing this will soon come into force and will be a considerable step towards harmonization with the EU's legal system.

An important feature of the new Act on Environmental Product Charges and Environmental Product Charges of Certain Products (passed June 1995, No. LVI) is the introduction of environmental fees on certain products (fuel, tires, refrigerants, and car batteries, effective 1996; and packaging materials, effective January 1997). These product fees are expected to reduce consumption and encourage recycling. The funds generated will be reserved for environmental purposes.

The majority of Hungary's legislation is considered to be, at least in principle, in compliance with EU regulations. The major obstacle is the funding required to implement new regulations. The least harmonized area is water management, while the most advanced field in the approximation process is that of nature protection.

Legislative changes are published in the government's official journal Magyar Kozlony. Several traditional associations, such as the Hungarian Chemical Society or the Chamber of Engineers provides a forum for the business community to learn about new developments in the regulatory field, even in the preparatory stage.

Business Initiatives

The Environmental Market

Total environmental spending for Hungary was approximately USD 250 million in 1993, or about 0.7 percent of GDP. The REC estimates that the total expenditures on environmental projects will exceed USD 300 million in 1996.

Many of the funds available for public procurement have been used to acquire pollution abatement control equipment. For public purposes a special earmarked environmental fund has been established, the Central Environmental Protection Fund (CEPF), with an estimated budget of USD 60 million in 1996. Support from the CEPF is available for infrastructure projects, for loan guarantees, and for covering the costs of remedial actions.

It is estimated that about 22 percent of the Hungarian environmental market is focused on equipment production. The remaining 78 percent consists of general services related to technical engineering, testing and monitoring, environmental consulting and management services. The recent legislative developments are expected to increase business opportunities in this sector. However, Hungarian companies perceive inadequate enforcement as a major barrier to growth.

Table 1 shows the distribution of revenues generated by the surveyed companies:

Table 1: Distribution of revenues among REC surveyed companies
Media Revenue distribution expressed as a percentage
water 28
solid waste 12
air 18
nature conservation 3
noise and vibration control 2
non-media related (energy, audits, etc.) 37

Quality Standards for Corporations

The Eco-Management and Audit Scheme (EMAS) is an EU initiative intended to help industrial companies improve their environmental management and performance. The potential offered by the scheme lies in its formalized procedures for assessing the environmental impact of an organization's policies and practices, and developing and publicizing a program of actions for achieving corporate progress on these issues.

EMAS is closely allied to the British Standard, BS 7750, on Environmental Management Systems. Both have been developed in tandem and it is thought that those accredited under one will be well placed to fulfill the requirements of the other. The ISO 14000 standard series also shows a great resemblance to BS 7750. It will be issued sometime in 1996.

An Environmental Management System (EMS), which meets the BS 7750 standard is designed to enable any business to maximize all beneficial effects and minimize any adverse effects. The principal benefits to be gained from using EMS include:

The larger companies in Hungary, such as Tungsram-GE Lighting, have the resources to develop their own integrated environmental management systems independent of international guidance. The environmental manager of GE-Tungsram presented a statement issued by GE Chairman, Jack Welch, that best summarized this change in corporate philosophy. "Every single person in GE has to be an environmentalist. Our products have to be thought of in those terms. Our processes, too. Everybody has a role to play. And the companies that don't understand this and don't do it, won't recruit the best, won't sell their products, won't be a viable, positive enterprise in the 1990s."

It is also the larger companies who are usually the first to pursue quality certifications for their environmental programs (BS 7750, or when it becomes available ISO 14000). As was advertised in Hungarian daily newspapers, the government actively supports these intentions. The EU's PHARE Programme has also dedicated funds for this purpose. Although a few smaller companies are beginning to adopt environmental management systems, most are primarily responding to regulatory requirements.

There are a handful of foreign companies in Hungary (SGS, TUV, etc.) accredited to certify environmental management systems and later this year the National Accreditation Body will also be accredited to provide certification.

Professional Certification

The Hungarian higher education and certification system is complex and far from transparent. This is partly due to a number of changes made to it in recent decades and the result of substantial differences in the levels of education offered at different universities and colleges.

Professional certification is currently regulated by Decree No. 24/1971 (VI.8.) and licenses are issued by the responsible ministries. The environmental field is covered by four Ministries (Environment, Agriculture, Industry and Transportation). The general requirements are:

The weak points of the system are that evaluation is performed on the basis of a curriculum vitae only. The responsible ministries cannot make professional judgments of an applicant's ability and there is no system of verification once a candidate has been certified.

The roundtable discussion at the end of the second day underlined the importance of a new professional certification system. In 1996 a new law prepared by the Chamber of Engineers and Architects (with recommendations made by the Environmental Section) expects to change this situation. The new law hopes to introduce an examination combined with an assessment of qualification and a given period of experience. The responsibility for accreditation will be transferred to the Chamber of Engineers and Architects who will issue a nationally recognized certification. The new law is expected to be passed sometime in 1996. It is hoped this will help raise quality standards in the industry and help professionals compete in the new international environmental marketplace.

Endnote

1. REC survey on Approximation of EU Environmental Legislation - Case Studies in Selected CEE Countries
REC * PUBLICATIONS * COMPETING IN THE NEW ENVIRONMENTAL MARKETPLACE * HUNGARY *
WORKSHOP SUMMARY

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