Romania

A. Background

The use of economic incentives for environmental protection

In Romania, the pollution patterns have evolved similar to those of other European countries. However, there are differences in terms of the intensity of pollution, the amplitude of concerns aimed at controlling it, and in the level of public awareness regarding the pollution causes and effects.

The following factors have contributed to environmental pollution :

the allocation of very limited funds (less than 0.5% of GNP) for environmental protection programs;
poor implementation of otherwise adequate environmental protection laws, and;
initial investments made for starting industrial ventures have not been followed by investments necessary to install or maintain pollution control equipment.

Over the last seventeen years law nr. 9/1973 covered environmental protection issues. This law provides for fines (for non-compliance with legal limits) on pollution which serve as major economic incentives for complying with the law. In 1986-1989, the average income per fine increased by 14.6%, while the number of fines actually imposed decreased by 34%. These figures show a tendency for increased concern on environmental protection.

However, the fines have not been an effective incentive for changing polluting behavior, because the quantity of pollutants emitted to the air, soil and water has been growing continuously. The causes could be the too low levels of fines and the way in which they are applied. Other reasons for the low efficiency of the economic instruments used in the past system were the following:

deficiencies in the monitoring system, partly due to the lack of technical and material support, making it impossible to establish a link between the pollution and the polluter.
socialist property generalization; the inappropriate use of economic instruments in environmental protection reduced the importance and character of those instruments;
lack of priorities concerning environmental protection necessary for an economy with limited economic resources, and a very general determination of the objectives and responsibilities in the environmental protection field.

In Romania, until 1990 other economic instruments were not implemented or simply did not exist. Most of the economic instruments in force today were introduced under the past centrally planned system. After 1989, several amendments to the regulations on the old type of environmental protection fines were adopted. But even with the modified mechanisms, the fine system is still inefficient.

Presently in Romania various environmental protection fines may be imposed in the fields of:

industrial point source air pollution;
waste water;
illegal waste import;
nature conservation, and;
land protection.

There are also a user charge on water withdrawal and a product charge on natural gas, thermoelectric and electric power introduced in 1990.

Since 1990, the elaboration of a new general environmental act has been in progress. The Law did not manage to make its way to Parliament thus far. Since the first draft law proposal in 1990, numerous amendments and revisions were made, leading gradually to improvement of the draft. However, in the law drafts, the importance of economic instruments is not very much stressed so far. It has also been criticized that the final draft version did not provide mechanisms to ensure that those instruments which are included will actually be enforced in practice. This range of implementation measures (instruments ) is the weak chain in the general system of laws in Romania. The reason is that it is not detailed, lacking a clear lead institution to propose, analyze and control the necessary legal mechanisms.

Analysis of the actual situation leads to the conclusion that Romania has not yet reached important results in its environmental policy. The quality of surface and underground water are seriously threatened. Air pollution caused by industry, especially the energy industry, is wide-spread. The system for collecting and transporting waste is far from acceptable environmental standards. There are numerous problems concerning landfills, having far-reaching consequences. It is important to rebuild the economic instruments into the environmental protection system in order to solve these problems.

The entire environmental policy is structured in such a way to promote Romania's economic and ecological character through a long-term development model.

The main tendencies in building economic instruments into the environmental protection system are :

the promotion of economic instruments that apply the 'polluter pays principle'.
achieving an equilibrium between economic instruments whose goal are generating revenues for funds in the environmental field, and those instruments providing incentives to change the firms' behavior. In a first period, fundraising instruments will have major importance, while after reaching an economic equilibrium and then increased, the balance could switch so that instruments would give incentives to change the behavior of the economic agents.
an increase in variety of the economic instruments and an extension of their sphere/areas of use; (this would allow a large base for application while yet having relatively low levels).
increase of the efficiency of economic instruments in the environmental protection system by setting up the sectoral priorities (which pollute) and regional priorities (which are polluted) on the base of recognized and widely accepted criteria.
promoting in the mass-media the problems concerning environmental protection and ensuring transparency in the use of the economic instruments in environmental protection and of the environmental funds.
distinct limits for responsibilities in the use of the economic instruments in the environmental protection system and an efficient way of administering the environmental funds.

The main problem confronting those objectives is the property structure. The system of economic instruments in environmental protection will be effective only after a large reduction in state-owned property. A second problem could be the centralized organization which will be responsible for implementing the new system of economic instruments in environmental protection. Having a status similar to the other Ministries is not enough to ensure an operative and efficient character for the economic instruments in the environmental protection system; it is necessary to subordinate such an organization to the Romanian Parliament. Western assistance could also be positive, especially in the area of implementation.

Taxation system and environmental implications

The Romanian system of taxes and other economic instruments contain a few elements for environmental protection:

The special consumption tax for Romanian and foreign products has been first applied in 1991 for different kinds of fuel. In April 1994, this tax was as follows:

premium (98 octane), regular (90 octane), and normal petrol 15%
unleaded petrol 13.5%
diesel oil for vehicles 6%

The consumption tax is compulsory for commercial enterprises that buy fuels from domestic or foreign producers in order to sell them. 5% of the net cash of the PECO units will be directed into the account of the Ministry of Transport, in order to repair the public roads network. This tax will probably not achieve results in terms of reduced fuel consumption because the profit rate is high enough (the producers and the importers will not reduce the delivered quantities) and a potential increase of this product's price will not influence the consumption.

The Value Added Tax (VAT), which is rated at 18% (since 1993). The operations which are exempt from VAT are

the selling of industrial waste and recycling materials;
the activity of enterprises who have achieved a yearly revenue of under 10 million lei (if the income is more than 10 million lei per month, the enterprises will pay, starting with the very first of the next month even if in the future the enterprise will not achieve incomes over 10 million lei; the measure is taken for stimulating the small self-employed);
the selling of agriculture land, and;
the selling of fuel for heating (coal, natural gas), electrical and thermal power for home use.

Disadvantageous effects of the VAT act appear in the fact that environmentally friendly products are not given preference under the VAT or differentiated tax levels.

The tax for vehicles having mechanical traction and for water transport vehicles is paid by physical and legal persons; the public budgetary offices and state enterprises, having as their object public transport are excepted from paying the tax. The tax is established depending on the cylindrical capacity of the engine (e.g., car 300 lei/year; motorcycles 230 lei/year; trucks 750 lei/year; buses 900 lei/year; boats for personal use 30 lei/year; motor boats 750 lei/year; shallops 1100 lei/year). The tax was introduced to increase local government incomes and to enlarge resources necessary for the development and maintenance of the public roads network.

Local taxes are paid by physical and legal persons and are directed to the local budgets. Out of these taxes are the following:

the tax on building licenses (it has as the only purpose to protect the lands used in other ways than agriculture use). The tax differs depending on the required area: between 1000 and 3500 lei/m², in towns and in the country 50% of the town tax.
the taxes established by the local authorities for the collection of municipal waste; the use of pasture lands and common fields.

The tax for use of state lands for other purposes than vegetable, agricultural or forest production. This tax value depends on the quality class and area (in m²) of the agricultural or forest land which is to be removed from agricultural use forever. It has been in use since 1991 and it has an important role in land protection.

An agricultural tax of 10% has been approved by Parliament, but non yet promulgated by the president. Considering the low profit level in agricultural production and the inefficient system of subsidies for agriculture, such a tax will continue to reduce the possibilities of using intensive technology, and thus the productive capacity of soil will be preserved.

Pricing of energy products, raw materials and natural resources

The decline of industrial output during 1987-1992 reached more than 55% and was accompanied by a significant decrease in energy resource consumption. During the last three years, a major gap developed between the potential amount of energy resources needed by the economic structures from the past and the supply which could be realistically provided through domestically produced resources (see Table 1)

Table 1. The evolution of primary energy production and consumption in Romania, 1989-1993 - thou tons conventional fuel (*)
	1990	1991	1992	1993
Total energy resources	131.329	104,955	82,808	72,361
- domestic production	78,174	60,441	53,175	50,317
- imports	48,962	41,645	26,932	20,241
- stock (at the beginning of the year)	4,493	2,869	2,701	1,803
Total domestic consumption	104,775	90,637	73,889	-

(*) coal equivalent 7000kcal/kg.
Source: Romanian Statistical Yearbook 1990,1991,1992,1993

The evolution of energy prices on the domestic market in Romania in the period 1990-1993 is shown in Table 2.

Table 2. The Evolution of Average Domestic Prices for Main Energy Resources, 1990-1993
Average internal price
	01-11-1990	01-07-1991	15-11-1991	01-08-1992	01-05-1993
Oil (lei/ton)	2,000	7,680	23,049	44,250	65,000
Natural gas(lei/thou Ncm)	1,000	3,560	11,748	19,430	24,000
Electric energy(lei/Mwh)	490	3,000	9,500	16,800	28,000
Thermal energy(lei/Gcal)	160	750	2,375	4,200	9,000
Lignite(lei/ton)	426	914	2,742	5,130	8,550
Crude Oil(lei/ton)	1,875	5,660	16,400	31,160	156,000
Gasoil (lei/ton)	13,950	27,910	104,662	198,860	228,200
Gasoline(lei/ton)	19,610	39,220	169,822	232,660	250,000
Fire wood(lei/ton)	1,184	2,013	3,321	5,650	9,500
Exchange rate (lei/$)	35 lei/$	60 lei/$	180 lei/$	360 lei/$	600 lei/$

Source: Romanian Ministry of Economy and Finance

A periodical adjustment for the electric and thermoelectric energy price is made according to different factors (in a sensible connection with the change of the currency lei/$).

Table 3. The electric energy price for household and industrial use.
	15.11.91	15.10.92	10.05.93	2.08.93	1.11.93	15.12.93	23.12.93
Household use	4.2	2.3	9.5	7.3	6.1	5.3	5.3
Industrial use	13.2	12.5	12.5	11.3	11.4	11.5	11.5
	$/Gcal	$/Gcal	$/Gcal	$/Gcal	$/Gcal	$/Gcal	$/Gcal

Source: Romanian Energy Authority (RENEL)

Table 4. The thermoelectric energy price for household and industrial use.
	15.11.91	15.10.92	10.05.93	2.08.93	1.11.93	15.12.93	23.12.93
Household use	3.6	15.6	45.5	26.7	25.6	25.6	21.5
Industrial use	52.8	46.6	42.7	42.7	42.7	42.9	42.9
	$/Mw	$/Mw	$/Mw	$/Mw	$/Mw	$/Mw	$/Mw

Source: Romanian Electricity Authority (RENEL)

Table 5. The tax differentiation on fuel is as follows:
	90 Octane Lei/kg	98 Octane Lei/kg	Diesel oil Lei/kg
Production price (at refinery)	343,610	372,260	275,580
Consumption tax	51,542	55,839	16,535
Public roads funds (5%)	17,881	18,613	13,779
Protection charge *	56,000	48,555	39,000
TOTAL	468,333	495,267	344,894
VAT (18%)	84,300	89,145	62,080
Price of the consumer	553,000	600,000	405,000

* Protection charge is not a environmental tax ( it is in connection with the change at currency lei/$).
Source : PECO

Table 6. The tax differentiation on electric and thermoelectric power is as follows:
	Electric power	Thermoelectric power
Fuel	58.8 %	74.84 %
Other materials expense	13.96 %	13.93 %
Rest of expenses	7.14 %	3.93 %
Salary expenses	7.92 %	4.845 %
Development tax *	7.66 %	2.345 %
Fuel stock	3.62 %	-
Profit	0.87 %	-
Price of the consumer	100 %	100 %

* The development tax is designed for both investments and environmental protection (like neutralization of nuclear waste).
Source : Romanian Electricity Authority (RENEL)

General conditions for the functioning of economic incentives for environmental protection

Macroeconomic circumstances

Since 1990 the Romanian economy has developed under the difficult conditions generated by the transition to a market economy, with a lack of balance within various sectors, an acute decrease of financial and material resources, as well as an unfavorable international conjuncture.

Economic activity in 1990-1993, was marked by a decrease in the production of goods and services, which had a major influence on all aspects of social life. The significant decline of industrial production (which has continued in the structure of the gross domestic product) has had a major influence on the evolution of the whole economy.

A ninety percent negative growth rate of the gross domestic product (-7.4 in 1990 and -13 in 1991) was caused by the reduction of value in industry. Far from reflecting a normal restructuring process of the economy, this reduction was mainly caused by the collapse of demand, especially from COMECON; also limited possibilities of the supply of electricity and raw materials, and the decline of domestic capital and foreign currency resources play a role.

Whereas the GDP declined by almost 20% over the years 1990 and 1991, exports fell by 44.9% and imports by 23.4% (the export / import ratio was about 63 in 1990 and 73 in 1991, i.e., the export value was smaller than the import value).

The transition process was followed by a series of negative social and economic phenomena: unemployment was increasing (the unemployment rate rose to 9.3% in 1993), and the yearly inflation rate has been growing as follows: 229.6% in 1993 and 172.5% in June 1994 (if 1992 is considered as the reference year). The monthly inflation rate was 12% in 1993 and 5% on June 1994.

Domestic consumption decreased greatly because of the reduction in real income of various segments of the population. Certain structural changes took place in the economy. The private sector contributed more than 25% to the formation of GDP in 1992. There was an acceleration of privatization in the trade and service fields.

The legal authority for the public campaigns for privatization is given by the law 58 from 1991. At the first level, until December 31, 1992, 15 companies were privatized, adding a capital of 7 mln. lei, which were de-nationalized applying the privatization pilot schedule (sustained by the National Agency for Privatization, NAP). During 1993 and 1994 the NAP procedure was used for seven companies and also procedures run by SOF (State Ownership Fund) and POF (Private Ownership Fund) for another 590 (data from "Capital" nr. 34 pg. 27 "Under profit selection") .

Privatization progresses slowly in the metallurgical industry, machines construction industry, energy industry, chemistry industry, etc. Let's not forget that the heavy industry, which consists of giant factories, are unprofitable in the current economic environment because of energy intensive characteristics, and are the main source of pollution in the country.

The latest government pattern seeks to privatize around 3000 companies until the end of the year and to go further by the summer of 1995 when all the public companies will have been privatized.

Financing of environmental protection

Every year, the State Budget Law has included revenues for "agriculture, silviculture, water and environment" (the revenue is not divided among each of these categories of economic actions within the law). Over the last three years the revenue allocated (from all of them) was:

  1991:    2.25 thousand million lei
  1992:    6.76 thousand million lei
  1993:    2.77 thousand million lei

For the moment the financing of environmental protection is not clearly specified in the Budget State Law from the financial point of view. The proposal of the new Environmental Protection Law provides for financial support strictly assured for environmental protection.

References

Environmental Protection - between theory and practice, published by OIDICM (1992, 1993 collection).

National monitoring system for environment (project of report) made by the firm EcoCare Consultants from Belgium on the Assistance program on environmental field for Romania.

Waste - restriction or stimulant of the development (symposium report, organized by the Ministry of Industry - National Commission for reused materials, published by OIDICM / May 1993.

Statistical Year Book of Romania 1993.

B. Overview of economic instruments in Romania

User charge on surface and underground water

STATUS
In force since 1991

AIM
To motivate reduction of water use and to create income for investments in water management.

SUBJECT
State owned and private companies and organizations.

OBJECT
Surface and underground water sources.

LEVEL
Varies depending on the origin of water used and on what the water is used for. For example :

Water source	Charge level/1000 m³	Consumer
Surface water, water from domestic rivers	max. 12712 Lei min. 168 Lei	for industrial, construction and transportation firms for piscicultural firms (trout growing firms)
Water from the Danube	max. 1526 Lei min. 35 Lei	for industrial, construction and transportation firms for piscicultural and irrigation firms
Groundwater	max. 15645 Lei min. 616 Lei	for industrial, construction and transportation firms for irrigation firms

For example, a piscicultural company with 30 ha of water having a depth of 1.5 meters, will have to pay the following charge:

450,000 m³ of water x 168 Lei/m³ = 75.6 mln Lei/year  (= 35846 ECU/year at actual exchange rate)

INCOME
1991: 9.9 mln ECU
1992: 9.2 mln ECU

USE OF INCOME
5% of the revenue goes into the Water Funds, while 95% remains at the disposal of the Water Independence Administration (WIA) for covering usual expenditures and making some investments.

IMPLEMENTATION AND EFFECTIVENESS
This charge can be easily enforced because of the existing administrative structures (e.g., WIA., 15 branches organized on hydrographical basins, State Water Inspectorate). The effectiveness of this instrument is reduced by:

insolvency of charged subjects (an essential part of the revenue are debts to the WIA.)
low level of revenue if compared to the list of necessary expenditures and especially investments.
high level of inflation.

LEGAL BACKGROUND
  Law no. 8/1974 on water.
  Government Decree no. 1001/1990.
  Government Decree no. 861/1993.

EXECUTING AUTHORITIES
  Design of the instrument: Ministry of Water, Forests and Environmental Protection (MoE), MoF.
  Revenue collection: Ministry of Finance (MoF).
  Enforcement: Regional Environmental Inspectorates.

INFORMATION SOURCES
Personal enquiry at Water Department of MoE, National Commission of Statistics.

Effluent charge on waste water

SPECIFICATION
The charges are a part of a permit system (issued by WIA).

STATUS
In force since 1991.

AIM
Revenue raising for financing water protection and monitoring of waste water discharges.

SUBJECT
State owned and private companies and organizations.

OBJECT AND LEVEL
Fixed rates are applied for two pollutant categories:

4200 Lei/ton for suspended substances in solution (mentioned in environmental permit);
16989 Lei/ton for oxygen consuming substances.

INCOME
Not available.

USE OF INCOME
5% of the revenue goes into the national "Water Fund", while 95% remains at the disposal of WIA and is used mainly for the support of its laboratories (necessary apparatus and materials).

IMPLEMENTATION AND EFFECTIVENESS
These charges can be easily enforced because of the existing administrative structures. The effectiveness of this instrument is reduced by:

insolvency of the charged subjects (an essential part of the revenue are debts to the WIA.)
low level of revenue if compared to the list of necessary expenditures and especially investments.
high level of inflation.

LEGAL BACKGROUND
  Law no. 8/1974 on water.
  Government Decree no. 1001/1990.
  Government Decree no. 861/1993.

EXECUTING AUTHORITIES
  Design of the instrument: MoE
  Review collection: MoF
  Enforcement: Regional Environmental Inspectorates.

INFORMATION SOURCES
Personal enquiry at Water Department of MoE, National Commission of Statistics.

Non-compliance fine on waste water and additional water consumption

OFFICIAL DESIGNATION
Penalties.

STATUS
In force since 1991.

AIM
Until 1993, the main aim was revenue raising because of the low penalty levels. With the gradual increase of the fine levels until 1996, an incentive effect for changing polluting behavior is intended.

SUBJECT
State owned and private companies and organizations.

OBJECT
Additional (with respect to the permitted amount) consumption of water, volume of discharged polluted water, exceeding of water quality standards according to the individually permitted standards.

LEVEL
The penalty levels are being gradually increased: the following percentages of the calculated penalty must be paid: 25% of the calculated penalty in 1991, 50% in 1992, 75% in 1993, and, 100% from 1994 on. From 1996 on the value of the penalties will be doubled until the individual standards are met.

The following multiplication factors are applied for additional water use above the permitted amount:

Period	Additional consumption	Multiplication factor
Normal consumption	10 - 20%	2
	20 - 50%	3
	> 50%	4
Restricted consumption	10 - 20%	2
	20 - 50%	3
	50 - 75%	4
	> 75%	6

Example: A company with a water user charge of 12712 Lei/m³, that consumes 10,000 m³, or 25% more than the permitted amount, pays in the restricted consumption period the following:

    10,000 m³ x 12712 Lei/m³ x 3 = 381 mln Lei  (= 180 000 ECU)

For pollutants mentioned in the permit, the penalty levels are between 6.58 Lei/kg (total suspension) and 6595.33 Lei/kg (cadmium, phenols). For substances with toxic effects (e.g., cancerigene substances, radioactive residues; these pollutants are listed in the law), the penalty levels are between 79144 Lei/kg (mercury) and 329770 Lei/kg (cancerous substances). The penalties are calculated using the following formula:

    P_i = (K_i₁ - K_i₀) x V x p_i

  P = ·P_i    the total penalty P to be paid
  K_i₁    the measured concentration of a specific pollutant
  K_i₀    the allowed concentration of the pollutant i mentioned in the permit
  V    the volume of consumed water
  p_i   the penalty level in ECU/ton

Example: Assuming that the above mentioned company has 75 mg/m³ cadmium in the effluent, while 25 mg/m³ is allowed according to its permit, the following penalty is levied:

    P = (75 - 25)  x  10000  x  6595.33 x 10-6 = 3300 Lei

INCOME
Not available.

USE OF INCOME
The income of the penalty on additional water consumption remains at the disposal of WIA, while the penalties on waste water go partly to the respective municipal budget (up to 25%) and partly to the central budget (at least 75%).
The use of the revenue to the central budget from waste water penalties is not specially earmarked for environmental purposes. There is no precise regulation on how to use the income of WIA.

IMPLEMENTATION AND EFFECTIVENESS
The technical and material possibilities allow the enforcement of this instrument only for large pollution sources.

LEGAL BACKGROUND
  Law no. 8/1974 of water.
  Government Decree no. 1001/1990
  Government Decree no. 861/1993

EXECUTING AUTHORITIES
  Design of the instruments : MoE
  Revenue collection : MoF
  Enforcement : Regional Environmental Inspectorates and State Water Inspectorate.

INFORMATION SOURCES
Personal inquiry

Non-compliance fine on illegal waste import

OFFICIAL DESIGNATION
Environmental protection fine

STATUS
Introduced in 1992

AIM
To penalize the import of illegal waste. "Waste" is defined as any material that cannot be reused. Waste used for recycling is exempt, if the Ministry of the Environment and the Ministry of Public Health give permission.

SUBJECT
Levied on the importer of illegal waste.

OBJECT AND LEVEL
The fine is between 250,000 and 1,000,000 lei

INCOME
Not available.

USE OF INCOME
The revenue goes to the State Budget.

LEGAL BACKGROUND
Government Decree no. 340/1992 concerning the illegal import of waste .
Government Decree no. 437/1992

EXECUTING AUTHORITIES
  Design of the fine: Ministry of Environment, Ministry of Public Health, Ministry of Tourism and Trade.
  Revenue collection and use: Ministry of Finance
  Enforcement: Regional Environmental Inspectorate

INFORMATION SOURCES
Personal inquiry

Non-compliance fine on air pollution

OFFICIAL DESIGNATION
Environmental protection fine.

STATUS
Introduced in 1973, fine levels increased in 1994.

AIM
To assist the enforcement of emission standards and revenue raising. Incentive effect: At present, because of the high level of inflation, the fines are largely symbolic.

SUBJECT
State owned and private companies and organizations.

OBJECT AND LEVEL
The fines are levied if air pollution emission are above the standards stipulated in Order no 623/1973 of the Ministry of Public Health. The amount of the fine is:

between 250,000 lei and 500,000 lei for physical persons
between 500,000 lei and 1,000,000 lei for legal persons

INCOME
Not available

IMPLEMENTATION AND EFFECTIVENESS
Partly because of inflation the fines are too low to provide an incentive effect. There are not yet sufficient capacities for adequately monitoring emissions.

LEGAL BACKGROUND
Law no. 9/1973 concerning environmental protection.
Government Decree no. 127/1994.

EXECUTING AUTHORITIES
  Design of the instrument: MoE
  Revenue collection: MoF
  Enforcement: Regional Environmental Inspectorate

INFORMATION SOURCES
Personal inquiry

Non-compliance fine on the use of natural gas, thermoelectric and electric power

OFFICIAL DESIGNATION
Penalties

STATUS
In force since 1991

AIM
The declared aim is to stimulate the user to reduce the consumption of natural gas, thermoelectric and electric power (especially in case of the largest consumers). Incentive effect: At present, because of the high level of inflation the fines are largely symbolic.

SUBJECT
State owned or private companies or organizations.

OBJECT
Natural gas, thermoelectric power and electric power

LEVEL
The consumption of energy above permitted levels is penalized by the following factors:

Additional consumption*	Multiplication factor to the regular consumer price
100 - 105%	1.5
105 - 110%	2
115 - 120%	3
> 120%	4

* Above daily, monthly or quarterly approved consumption

INCOME
Not available.

IMPLEMENTATION AND EFFECTIVENESS
Because of inflation the fines are too low to provide an incentive effect. It is easy to enforce this fine because of the existing administrative structures.

LEGAL BACKGROUND
Government Decree no 90/1991

EXECUTING AUTHORITIES
Design of the instruments : Ministry of Electric Power
Review collection: MoF

INFORMATION SOURCES
Personal inquiry

Non-compliance Fine on violations of nature conservation regulations (in Danube Delta)

OFFICIAL DESIGNATION
Environmental protection fine.

STATUS
Introduced in 1993.

AIM
To assist the enforcement of nature conservation regulations in Danube Delta.

SUBJECT
The fine can be levied on physical and legal persons which harm the ecological balance in the Danube Delta reservation due to their activities.

OBJECT AND LEVEL
  Fines are levied as follows:
  Pursuing activities in the area of the reservation without the permission of the environmental authority can be penalized with a fine between 250,000 and 500,000 lei for physical persons, and 1,000,000 lei for legal persons.
  If protected land is used without permission, a fine between 100,000 lei and 200,000 lei can be levied. Fishing in protected areas of the Danube Delta or during the prohibited period, can be penalized with a fine between 180,000 lei and 240,000 lei. Hunting in protected areas or during prohibited periods can be fined between 180,000 lei and 240,000 lei.

INCOME
0

USE OF INCOME
The revenue goes to the State Budget.

IMPLEMENTATION AND EFFECTIVENESS
The procedure of the fine application is too difficult and awkward and local authorities are rather inactive. Moreover, in some cases administrative authorities give permission for investments which can harm the environment.

LEGAL BACKGROUND
  Law 9/1973
  Law 12/1979 concerning fishing and pisciculture.
  Law 2/1978 concerning hunting.
  Law 82/1993 concerning the establishment of the Danube Delta Reservation.

EXECUTING AUTHORITIES
  Design of the fine: MoE
  Revenue collection and use: MoF
  Enforcement: Local authorities for environmental protection

INFORMATION SOURCES
Personal inquiry; respective legislation.

Product charge on wood for processing (Planned)

STATUS
This instrument would be implemented as soon as the Environmental Protection Law is approved.

AIM
Revenue raising for a National Environmental Protection Fund (this Fund is not yet established ).

SUBJECT
All units for processing wood (e.g. timber works, furniture works)

OBJECT
Wood for processing.

LEVEL
Minimum 100 lei/m³ wood for processing.

USE OF INCOME
Financial support for: measures for nature protection and biodiversity preservation; rescuing rare species and management of protected areas and nature; environmental education.

IMPLEMENTATION AND EFFECTIVENESS
It would be easy to enforce the charge on wood for processing because of the existing administrative structures.

LEGAL BACKGROUND
Draft Environment Protection Law

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