Hungary

I. Introduction

The Rank of Environmental Problems Among Issues of National Importance

In July 1994 the Parliament approved the government of the Republic of Hungary's "Program" for 1994-1998. The Program defines the main goals, tasks and institutional and regulation system for the four-year cycle. In the introductory part of this Program the government pledged to continue the transformation to a market economy, support parliamentary democracy, social justice, and the integration of Hungary into the European Union. In the Program's treatment of the critical imbalances in the economy (external and internal indebtedness, inflation, etc.), a precondition of economic growth is a halt to the further deterioration of the natural and built environment.

The strategic goal of the government is the modernization of Hungarian society and the economy. The objective of development is a socio-economic model merging with an efficient market economy, based on the predominance of private ownership and economic competition, with social welfare reducing inequalities of opportunity. In defining these objectives and implementing them, the government will rely on the initiative of both society and the economy.

For reaching these strategic goals defined by the Program, it is necessary to do the following:

In industrial policy, some emphasis is given to technological development and to the creation of economic incentives for research and development policy.

In the energy sector, the level of state subsidies cannot be increased both because of the overall economic situation and the need for energy conservation. The gradual increase in energy prices will likely create a "win-win" situation both for the economy and the environment, but the social consequences should be taken into account (compensation of certain groups of the society).

In tourism policy, development is necessary to harmonize regional development and environmental programs.

In infrastructure development, the government wishes to subject the individual subsectors (transportation by rail, road, air and water, telecommunications, and public utility services) to detailed debate, at no time losing sight of the importance of environmental protection. By the end of 1998 the process of supplying healthy drinking water to all settlements should be completed. Sewage treatment in big cities is a high priority. Other high priorities are the protection of drinking water reservoirs and big lakes (especially Lake Balaton), as well as protection against agricultural pollution. As far as the Gabcikovó-Nagymaros Dam system is concerned, the main aim of the government is to minimize damage to the environment and ecosystems, to continue the rehabilitation of the Danube Bend and to solve the problems of waste water treatment in the region.

In agricultural policy, the government supports export-oriented agriculture, production for the domestic market, and the stimulation of modern farming methods facilitating environmentally friendly and healthy products. The Program encourages management which will integrate ecological values in the framework of private ownership. Agricultural subsidies are connected with maintaining the landscape and the lifestyle of the countryside. The government decided to suspend the privatization of protected areas and state forests until legal guarantees are in place and so-called technical laws have been completed (laws on forests, hunting, nature conservation, animal hygiene, etc.). The government will determine the competence of forestry authorities to avoid conflict between the protection of nature and forest management.

In the field of education policy, the government will make environmental protection part of the national curriculum and support the training of professionals.

In the field of social policy, the long-term goal is the creation of a well developed welfare system and the improvement of the quality of life, which includes environmental quality. To stop the dramatic decline in public health conditions, it is necessary to coordinate the health care program with other ministries.

In order to reduce short and long term-risks in the workplace, the government will develop a national labor safety program.

In the field of law, particular priority is given to the general harmonization of Hungarian legislation (including environmental law) with the European Union.

Local government: the responsibilities of state, territorial and local governments are being revised. In the field of environmental protection, county governments will likely take on more responsibility.

The environmental chapter is based on the "sustainable development concept" and the main principles of the National Environmental and Nature Conservation Policy Concept (NENCPC). This aims at meeting international requirements and gradual harmonization with EU environmental legislation.

Key Actors in Environmental Protection at the National Level

After the collapse of the paternalistic state socialist system, the number and the spectrum of environmental policy actors have multiplied. The modification of the Hungarian constitution and the adoption of many new laws aimed at the creation of a pluralistic democracy resulted in a substantial increase in the number of civil organizations (e.g. Law on Associations, Chambers, Foundations, etc.).

It should be mentioned that environmental protection is getting more and more attention in the mass media. In the electronic media (radio, TV) there are more than a dozen different "green" programs. The biggest national newspapers have regular "green pages" or an environmental supplement.

Recent Changes in Environmental Priorities

When determining priorities, the starting point must be that the fundamental goal of environmental protection is to provide suitable conditions for healthy human life, biological diversity, and economic development. Fundamental requirements are:

Short-term priorities include tasks which cannot be postponed further because significant environmental and health damage must be reduced or eliminated. The results of programs yet to be started will become apparent after 1 to 6 years. This is one of the reasons why a non-financial/budgetary year must be considered regarding short-term programs. However, financing environmental programs that extend over several years must be in accordance with the principles of annual financial plans. Environmental projects with short-term priority are as follows:

Besides these priorities, special attention must be paid to harmonizing the air, water, and soil quality protection with the government's economic and social development programs.

II. Environmental Policy Making, Legislation and the EAP

Environmental Policy Development

The Hungarian Ministry for the Environment and Regional Policy (MoE) published the "National Environmental and Nature Conservation Policy Concept" in early summer 1994. The NENCPC is a first major step towards the establishment of implementable environmental policy planning system. According to the Government Program for 1994-1998, the basic elements of the government environmental policy are as follows:

In the field of waste management the main priorities are to increase the selective collection of communal waste; the gradual elimination of unauthorized disposal sites; and the development of proper disposal of hospital waste.

In the field of air-quality protection the main tasks are the reduction of sulfur dioxide and heavy metal pollution (caused by traffic and industrial activities) and the development of up an up-to-date monitoring network.

In the field of noise abatement the most important task is the development of a noise classification system together with the introduction of stringent noise insulation requirements.

Radioactivity in the natural and man-made environment, especially in drinking water, agricultural products, building materials and industrial wastes, must be controlled.

A comprehensive information system for use in environmental policy should be established.

The necessity of public participation in environment-related decisions is strongly emphasized. The government will ensure regulated public access to information on the environment and pollution.

The MoE intends to prepare a medium-term National Environmental Action Plan (for 4-6 years), to be finalized by the end of December 1996.

The new "Governmental Program 1994-1998" strongly expresses the political will to combine economic restructuring and economic modernization with social partnership and the improvement of the quality of the environment.

Conditions improved after the May 1994 elections for the MoE to be able to formulate a more comprehensive and implementable environmental policy, and for further development of the planning system and tools. Moreover, there are indications that the bad reputation the word "planning" had under communism is fading in Hungary. These facts establish a solid foundation for continuous, professional policy making.

Non-Governmental Engagement in Policy Making and Implementation

The government and the MoE will cooperate with non-governmental organizations. In 1994, two open Parliamentary discussions were held about the NENCPC and the new environmental law. The NENCPC was discussed with the Hungarian Academy of Sciences, the Hungarian Chamber of Commerce, the Hungarian Association of Nature Sciences, and with experts from the environmental and nature conservation movements. Also, experts from the ministry took part in meetings held by Hungarian environmental NGOs on the Alternative National Environmental Policy Plan. More and more business organizations also want information on environmental policy and seek contacts with other sectors. For that reason the MoE has sent a monthly newsletter to relevant civil organizations to inform them of important events. Recently, the MoE established ongoing contacts with the major environmental umbrella organizations (e.g. Air Working Group, Energy Club, Association of Nature Conservationists, REC, Peace Corps, etc.) in developing communication with business interest groups.

There is an increasing need for NGOs and the government to have an ongoing dialogue to reach a consensus on the National Environmental Policy Plan. It can also be stimulated by the provisions of public participation in the new environmental law.

Recent Results of Implementation / Enforcement

Legal and administrative tools for environmental protection must be constantly modernized. Act II/1976 on the protection of the human environment was relevant and satisfied the requirements of the 70's. At the same time, this law did not give real standards to allow for implementation of its aims, and was not integrated with the social-economic plan. Due to the limits of the former political system, this law did not guarantee public participation. After several years of preparation, a new environmental protection law has been submitted to the Parliament. This bill reflects the profound socio-economic changes since 1989.

Environmental effects must be taken into consideration in the earliest stage of technical and economic development, and in the decision-making process. One of the most effective tools for this are Environmental Impact Assessments (EIA), which have been required since 1993. These will be improved in the future. Other risk assessment and risk prevention means should be introduced (e.g. developing the environmental auditing and environmental performance evaluation systems.)

Due to Hungary's geographical, political and economic situation, foreign countries must have a significant role in the treatment and solution of environmental problems. Transboundary environmental pollution can only be eliminated by harmonized international efforts. Regular cooperation should be maintained with neighboring countries in environmental issues, and multilateral agreements which control regional and global environmental effects should be supported. Hungary could take the initiative in devising projects aimed at improving the environment in the Central and East-European region. It is also in the national interest to have an institutional information service on environmental affairs, research and development results, and new technologies.

III. Development of Institutional Capacity

National Basis of Environmental Administration

OECD countries have shown in the last two decades that efficient environmental management requires deep policy integration between the different environmental policy actors. Countries in transition face some difficulties in increasing policy integration. Policy integration is hampered by understaffing in the MoE, poor communication and coordination between different ministries and budgetary constraints.

Jurisdictions and responsibilities of different ministries and authorities are poorly defined. In capacity building and institutional development there is a visible gap between the increasing demands on the environmental administrators and their limited capabilities. This phenomenon can be seen very clearly in the recent accession of Hungary to the OECD, and to the EU in the long term.

It is well recognized by environmentalists that there is a conflict in the privatization process between the privatization interests (ownership) and environmental liability, which is also the case in environmental impact assessment and auditing procedures. To help prevent such conflicts the Ministry of Environment is organizing regular EIA and information system management training courses for experts from regional environmental inspectorates. Courses will be created for environmental audits in the near future.

Environmental Capacity of Users / Polluters

The restructuring process of the Hungarian economy in recent years has been accompanied by an intensive fragmentation process. There are around one thousand state-owned enterprises, and hundreds of thousands of registered private companies, many of which are small- and medium-sized enterprises. This fragmentation raises numerous dilemmas for environmental regulation, enforcement and control. At the same time the economic restructuring of some major polluting sectors has resulted in environmental gratis effects (e.g. in mining, in the aluminum industry, steel industry, energy sector and also in agriculture etc.) Within the application of different privatization techniques, the clarification of environmental responsibility is very difficult. For example, the Csepel Iron and Steel Works was once one of the biggest state-owned enterprises in Hungary; it is now fragmented into hundreds of limited-liability companies with unclear environmental permits. Recently, privatization regulations would have been connected with the revision of former environmental permits. The joint handling of privatization and the environment is difficult because privatization was strongly centralized, and the regional environmental inspectorates don't have enough information about privatization. At the same time, enterprises which are members of the multi-national network of internationally accepted environmental management systems are growing, in some cases introducing Total Quality Management. There was a modest increase in the number of environmental service companies which provide services to their clients such as EIAs, eco-auditing, and environmental consulting.

"Green Lobby" Development

Academic institutions receive financial resources to contribute to the formulation of the national environmental policy. The MoE and the Hungarian Academy of Sciences together published an important document entitled "The Green Future of Hungary". The MOE is currently planning the logistics and management of the national environmental action plan. In the preparation of this plan many research institutes, university departments, national and international independent experts and representatives of green movements will be involved. According to a recent Gallup poll entitled "The Greening of Hungary" half of those surveyed think the environment is much more important than economic growth, and say they are willing to pay for environmental protection. The economic and business sphere is also playing an increasingly active role in influencing environmental policy making. The Hungarian Chamber of Commerce joint to the "Business Charter of Sustainable Development" issued by the International Chamber of Commerce. Besides this, the MoE is building up regular contacts with nationally important economic interest groups: the Hungarian Association of International Companies, the Hungarian Association of Large Industrialists, the National Association of Entrepreneurs, and the National Association of Small Industrialists.

These organizations represent very strong lobbying interests, which try to influence the environmental regulations of the government, as in the long debate on the planed product charges on packaging materials. During the Open Days of the Parliament organized by the Environmental Committee for the public to exchange ideas with MPs and ministerial officials in March and November 1994, the environmental act was discussed and accepted with the strong support of the business sector and the green movement.

When the new parliament convened in June 1994, the MoE mailed a copy of the NENCPC approved by the previous government to each newly elected MP, and expressed the need for consensus-building and professional continuity in national environmental policy making.

IV. Environmental Investments

Strategy to Direct Environmental Investments

In 1993, about 0.6% ofGDP was spent on environmental protection (about 0.7% including household expenditures). This is one of the lowest rates in comparison with OECD countries. According to official statistics, environmental investments account for about 4% of total investments.

There are some 100 enterprises working in the field of environmental related services, and the number keeps growing. Unfortunately, exact figures are unavailable. Therefore, the MoE began to prepare a project to assess the business sector players in the environmental field. Other projects to reform the environmental statistical system also started in 1994. The MoE, together with the State Health and Medical Officers Service, the Central Statistics Office, and the Environmental Management Institute, is trying to create a data and information system which conforms with EU and OECD norms.

Privatization or bankruptcy of some state-owned companies has created new business opportunities in the environmental services field. Western investors worry about becoming responsible for the clean-up of past contamination at the enterprises they are considering buying. For this reason, they demand environmental audits. A new law before the Parliament will make such audits an obligatory part of bankruptcy and privatization procedures.

Hungarian companies which export a significant portion of their production cannot succeed if they neglect the environmental provisions and norms of the importing country. It is not only in the company's interest but in the national interest as well that OECD and EU standards and environmental norms become obligatory in Hungary. Western companies specializing in environmental technologies and consulting could expand their activities to Hungary, parallel with the growing need for OECD and EU conformity with respect to environmentally friendly development in the country.

Criteria for Priority Setting

As stressed in the Lucerne Environmental Action Program, "win-win" solutions and low-cost, no-cost projects are very important. In 1995, the significant increase in energy prices will probably stimulate energy conservation, and could encourage increased energy efficiency at companies. The same could be expected in the case of water-intensive industrial enterprises, because of the rising water and sewage fees.

The government could influence priority setting in those fields where they have separate state financial tools e.g. the Central Environmental Protection Fund (CEPF). The income sources of these funds, and the use of the money collected are regulated by law. Appropriations for environmental protection are open procedures which are published every year by the CEPF Secretariat. The act on product charges on fuel, in force since 1992, also determines the criteria for the use of revenues (75% of the sum is used for reducing air pollution caused by traffic, the remaining 25% of the sum for other programs, e.g. education, training, research and NGO subsidies).

Achievements and Problems

In Hungary one of the major problems is the gap between public water supply and waste-water treatment, which is more than 40%. In recent decades there has been an intensive increase in housing, which was tied to the public water supply (95% of the population is connected to a municipal water supply.) But canalization and waste-water treatment couldn't grow at the same rate. The pace at which the gap widens will be determined by how quickly current and present investments are completed. The government has accepted the new Water Act which is under discussion in the Parliament.

During the transition period new environmental problems arose. In the last ten to twelve years the number of cars doubled in Hungary; in 1994 the yearly increase will exceed 100,000, but the quantity and quality of the roads has not changed very much. In 1993 the average age of the car fleet was more than 10 years. 25% of private cars are still equipped with two-stroke engines.

There has been an increase in road and city traffic, and in air pollution caused by traffic. There has been an annual decrease in the number of railway passengers (more than 40% in the last ten-twelve years).

A positive example is the development of public transport in Budapest. Although the development of the metro lines has stopped, the municipalities have enlarged the tram-system and new environmentally friendly buses have started to run in the main streets of the capital. Construction of the North-Pest-South-Buda metro line may begin in the next few years.

The development of combined transportation modes is slowly beginning (e.g. Budafok-Háros terminal).

Numerous steps were taken to induce progress in the environment and preparatory work continued in recent years in several fields:

V. Conclusions

Relative Importance of Policy, Institutional Strengthening and Pilot Environmental Investments in the Country's Environment Protection Programs

Environmental policy still isn't the government's most important policy, but its role is slowly growing. It is clear that membership in international organizations (OECD, the EU) is establishing more environmental protection requirements. These requirements are sometimes connected with the economy. If the government recognizes this relationship then it is certain that more attention will be given to the integration of environmental, economic and sectoral policies.

Attempts to Ensure Public Participation in the Fields of Policy Development, Institution Building and Planning of Investments

Ten years ago, public participation was a major problem in Hungary and the other East European countries. Environmental activism was one of the pressures which started the transition process. In the last years the MoE has learned a lot, public participation is no longer a foreign idea, and the EIA regulation and the new Act contain public participation elements. NGOs have the opportunity to influence the planning process and formulation of new legislation. More and more negotiation and conflict resolution training is available to civil interest groups, and for government personnel to learn the methodology. Naturally, it will take time for public participation to be fulfilled, but the Hungarian environmental policy is on the road.

Strategy to Integrate Economic and Environmental Activities

It is apparent that environmental policy needs to be integrated with that of the the main sectors, especially with the government's economic policy. In Hungary, some steps have been taken to develop better integration with the policies of different sectors. Contacts between the MoE and several NGOs have improved, but interministerial integration is a very slow process. Therefore, it is important that the NENCPC has declared the inside and outside integration of environment policy a priority.

The next step in this process is the preparation of the National Environmental Protection Action Plan. If the MoE could establish powerful intra and interministerial bodies acceptable to economic interests then there is a chance that a really good program will be produced.

As another positive signal, we have seen the introduction of several economic instruments in the government's environmental policy. These tools are under development, but their use is a very important step in gradually replacing the former end-of-pipe and sanctioning systems with a new generation of market-based economic tools.

REC * PUBLICATIONS * STATUS OF NATIONAL ENVIRONMENTAL ACTION PROGRAMS * COUNTRY REPORTS * HUNGARY

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