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THE WORLD BANK
Serbia and Montenegro
Environmental
Sector Report
REPUBLIC OF SERBIA
MINISTRY FOR PROTECTION
OF NATURAL RESOURCES
AND ENVIRONMENT
Belgrade, 2003.
THE WORLD BANK
Serbia and Montenegro
Environmental
Sector Report
REPUBLIC OF SERBIA
MINISTRY FOR PROTECTION
OF NATURAL RESOURCES
AND ENVIRONMENT
Belgrade, 2003.
Contents
Abbreviations and Acronyms ........................................................................................... i
Acknowledgements............................................................................................................ii
Executive Summary ......................................................................................................... iii
1. Introduction ............................................................................................................... 1
1.1
Background and Objectives .................................................................................... 1
1.2
Main Trends in the Quality of the Environment and Natural Resources................ 2
1.3
Millennium Development Goals and the Environment .......................................... 5
1.4
Poverty and Environment Linkages........................................................................ 6
1.5
Recommendations................................................................................................. 10
2. Macroeconomics and Environment Linkages ...................................................... 11
2.1
Main Issues ........................................................................................................... 11
2.2
The Impacts of the Pricing of Energy and Water.................................................. 11
2.3
Privatization .......................................................................................................... 13
2.4
3. Environmental Expenditures and Financing ....................................................... 17
3.1
Main Issues ........................................................................................................... 17
3.2
4. Institutional Framework for Environmental Management ................................ 20
4.1
Main Issues ........................................................................................................... 20
4.2
Key Reforms to the System of Regulation............................................................ 20
4.3
5. Energy and Air Pollution ....................................................................................... 25
5.1
Main Issues ........................................................................................................... 25
5.2
Key Policy Reforms and Actions in the Energy Sector ........................................ 25
5.3
6. Water Supply and Sanitation................................................................................. 31
6.1
Main Issues ........................................................................................................... 31
6.2
Key Policy Reforms and Actions in the Water Sector.......................................... 32
6.3
7. Waste Management................................................................................................. 35
7.1
Main Issues ........................................................................................................... 35
7.2
Key Reforms and Actions in Solid Waste Management....................................... 36
7.3
8. Coastal Zone Management in Montenegro .......................................................... 39
8.1
Main Issues ........................................................................................................... 39
8.2
Key Reforms in Coastal Zone Management ......................................................... 39
8.3
9. Forestry .................................................................................................................... 41
9.1
Main Issues ........................................................................................................... 41
9.2
Key Reforms and Actions in the Forestry Sector.................................................. 42
9.3
10. Biodiversity and Protected Areas Management................................................... 45
10.1 Main Issues ........................................................................................................... 45
10.2 Key Reforms and Actions in Biodiversity Conservation...................................... 46
10.3 Recommendations................................................................................................. 47
11. Priority Actions and the Role of Donors and the World Bank ........................... 49
2
11.1
11.2
11.3
Recommendations for Priority Action .................................................................. 49
The Contributions of Other Donors ...................................................................... 50
The Role of the Bank ............................................................................................ 51
List of Tables
Table ES1: Main Recommandations.................................................................................. xi
Table ES2: Proposed Activities for the Bank ................................................................... xii
Table 1: Serbia and Montenegro and Millennium Development Goals ............................. 5
List of Boxes
Box 1: Poverty in Serbia ........................................................................................................7
Box 2: Poverty in Montenegro...............................................................................................7
Box 3: Benefits of Incorporating Environment into the Privatization Process....................13
Box 4: Phasing Out Leaded Gasoline in the Slovak Republic.............................................27
Box 5: A Regional Approach to Solid Waste Management in Bosnia and Herzegovina ....36
List of Annexes Not Included in This Report But Available on Request in English
Annex 1: Trends in the Quality of the Environment and Natural Resources,
Transboundary Environmental Problems
Annex 2: Macroeconomics and Environment in Serbia and Montenegro
Annex 3: Environmental Expenditures and Financing
Annex 4: Institutions Policies and Laws
Annex 5: Energy, Transport, and Environment in Serbia and Montenegro
Annex 6: Water Supply and Sanitation
Annex 7: Waste Management
Annex 8: Coastal Zone Management in Montenegro
Annex 9: Forestry
Annex 10: Biodiversity and Protected Area Management
Annex 11: Donor Cooperation in the Environment Sector
3
Abbreviations and Acronyms
CDD
CEA
CZM
EBRD
EIA
EPA
ESR
EU
FRY
GDP
GEF
GHG
IDP
koe
lpc/d
MDG
MEPP
MENR
MT
NEAP
NGO
OSCE
PRSP
REC
SAC
UNDP
UNECE
UNEP
Community-driven development
Country Environment Analysis
Coastal zone management
European Bank for Reconstruction and Development
Environmental Impact Assessment
Environmental Protection Agency
Environmental Sector Review
European Union
Federal Republic of Yugoslavia
Gross domestic product
Global Environment Facility
Greenhouse gas
Internally displaced person
Kilogram of oil equivalent
Liters per capita/day
Millennium Development Goals
Ministry of Environment and Physical Planning of the Republic of Montenegro
Ministry for the Protection of Natural Resources and Environment of Serbia (new)
Metric tons
National Environmental Action Plan
Nongovernmental organization
Organization for Security and Cooperation in Europe
Poverty Reduction Strategy Paper
Regional Environmental Center
Structural Adjustment Credit
United Nations Development Programme
United Nations Economic Commission for Europe
United Nations Environment Programme
i
ACKNOWLEDGEMENTS
This report was prepared by a World Bank team composed of Arcadie Capcelea, Lead
Environment Specialist and Task Team Leader; Gary Stuggins, Lead Specialist; Rita Klees,
Senior Environment Specialist; Stefan Schwager, Senior Environment Specialist; Tijen Arin,
Environment Economist; Christian Peter, Forestry Specialist; Rohan Selvaratnam, Operations
Analyst; and Peter Whitford, Environment Consultant. Jadranko Simic, Local Environment
Consultant, contributed to the report. The final version was prepared under the guidance of
Anil Markandya, Lead Economist.
The team undertook a mission to Serbia and Montenegro in March 2002 and worked closely
with representatives from the Federal Secretariat for Labor, Social Affairs and Health
Protection, the Serbian Ministry of Health and Environmental Protection, and the
Montenegro Ministry of Environmental Protection and Physical Planning, as well as with
Marina Ilic, Jadranko Simic, and Vladan Raznatovic, local environmental consultants. In
addition to the above mentioned government representatives, the mission held meetings with
representatives from civil society, nongovernmental organizations, the business sector, local
authorities, and academia, as well as with representatives from international institutions and
donors working in the country. The Team thanks all parties who kindly gave their time and
provided valuable information.
An internal review of the document received many helpful comments from Christiaan
Poortman, Jane Holt, Marjory Anne Bromhead, Magda Lovei, Nancy Cooke, Anil
Markandya, Peter Dewees, Dejan Ostojic, Kimberly Heuckroth, and Sunanda Kishore, and
these are gratefully acknowledged. Kathy Sharrow helped with the formatting of the paper.
Thanks are also due to the many government officials and other individuals in Serbia and
Montenegro who provided data and comments on various issues.
ii
EXECUTIVE SUMMARY
1.
Serbia and Montenegro is facing the challenge of restructuring its economy to restore
growth and alleviate poverty after a protracted period of economic and political hardship and
conflict and in the face of a degraded natural environment. The governments1 recognize that
environmental sustainability plays an important role in achieving their economic and social
goals, and they wish to focus their limited financial resources on tackling the highest priority
environmental issues. At the same time, they have extremely limited resources and many
demands for priority action. Hence there is a critical need to identify the key environmental
interventions, the mechanisms for financing them, and the institutional changes that underpin
them.
2.
The primary purpose of this review is to assist the World Bank in contributing to this
urgent task by updating its understanding of the environment in Serbia and Montenegro, with a
view to guiding the Bank’s environment strategy in the context of the current social and
economic situation. To this end, the review has assessed and assigned priorities to the
environmental problems at the level of the Republics and the Federation (excluding Kosovo and
Metohija). In doing so, it has also developed and strengthened the dialogue on environmental
issues between the Bank and Serbia and Montenegro, thereby contributing to the preparation of
the Poverty Reduction Strategy Paper (PRSP) and Country Assistance Strategy. This report has
also been discussed with national stakeholders and donors in consultation workshops in Serbia
and Montenegro, and it incorporates their comments.
3.
The specific objectives of this Country Environmental Analysis (CEA) are to:
• Review the existing situation in the sector, identify priority areas for policy changes
or investments, and consider the role of the government, the private sector, and
donors in implementing this agenda
• Assess macroeconomy-environment linkages and measures that affect long-term
sustainability and financial viability within the priority areas
• Provide a basis for defining the Bank’s future involvement in the sector.
4.
The exercise has also begun a process through which the Bank can discuss with the
governments appropriate actions for undertaking key reforms in environmental protection and
the sustainable use of natural resources.
Summary of Main Environmental Problems and Their Causes
5.
The following environmental issues have been identified as critical, based on the negative
impact of the current environmental conditions on human health, the economy, and natural
ecosystems.
1
“The government” refers to the totality of federal and republic-level governments.
iii
6.
Deteriorating trends in water, sanitation, and waste management. Water and wastewater
infrastructure was well developed in the former Yugoslavia. Service levels today, on average,
reflect this legacy, with 86.6 percent of the population receiving drinking water supplies directly
to their homes or yards, and 88.3 percent having access to a sewage or septic tank system. These
statistics are somewhat misleading, however, as the quality of service leaves a great deal to be
desired, and there are considerable differences in service delivery between regions and between
urban and rural areas, particularly with respect to drinking water. Water and wastewater
infrastructure deteriorated significantly as a result of little maintenance and no new investments
during the 1990s. Lack of access, per se, to water and sanitation is a public health issue for some
populations, particularly those living in urban slums, which are often located adjacent to poorly
managed landfills and largely inhabited by internally displaced persons, Roma, and refugees.
The solid waste management infrastructure is underdeveloped. Only about 50 percent of waste is
collected in Serbia and Montenegro; no landfills meet standards for sanitary landfills; and
municipal, industrial, toxic, and hazardous wastes are disposed of together. Investments and
regulatory revisions toward establishing a proper waste management system are urgently needed
to mitigate public health and environmental hazards. Reforms aimed at restoring the financial
health of municipal utilities so that they can restore and expand services are a high priority.
7.
Threat of coastal zone deterioration in Montenegro. This is a crucial issue due to
uncontrolled construction activities and the lack of wastewater treatment and a coastal zone
management strategy. Evidence of eutrophication and bacterial contamination in tourist areas
already exists. The coastal areas also experience shortages of drinking water during the peak
summer season. Montenegro’s aspirations to develop its tourism sector (it is targeting 22 million
tourist nights—four times the current figure—by 2020) mean that these negative trends must be
reversed. Developments need to be supported by stricter application of water, sewerage, and
wastewater treatment standards, by investment in wastewater treatment, and by land
management planning.
8.
Air pollution hot spots. These exist in several industrial areas, particularly near lignitefired power plants (and associated mines), such as the Kolubara-Obrenovac corridor, and in the
cities of Bor, Vraje, Kikinda, and Sabac in Serbia and the cities of Plevlija, Podgorica
(Aluminum Kombinat), and Niksic (ironworks) in Montenegro. In some cases, nearby
settlements of poor people are particularly exposed or affected. A higher-than-average incidence
of respiratory problems is observed in these areas, and national air quality standards are
exceeded by a large factor for sulfur dioxide and particulate matter. The high sulfur content of
heating oil also poses a major problem. The use of environmentally friendlier district heating is
limited. As a result, air pollution is especially pronounced during winter months. Another major
source of pollution is the use of leaded gasoline and high-sulfur diesel. In the medium term,
Serbia and Montenegro needs to phase out the use of leaded gasoline and develop standards to
ensure high fuel quality. This would require restructuring its oil refinery and other reforms in the
petroleum sector, including liberalizing entry into the selling of gasoline and petrol at the
wholesale and retail levels.
9.
Energy inefficiency. While the main cause of air pollution is the burning of low-quality,
lignite coal in inefficient power plants with poor pollution control technologies, also contributing
to the problem is the high demand for energy from households and industry induced by low
iv
energy prices. Energy subsidies caused a quasi-fiscal deficit of US$1.1 billion in 2000, not only
crowding out investments on more urgent social issues but also undermining incentives for users
to invest in more-efficient technologies. Restructuring the electricity sector, together with
phasing out energy subsidies, should eventually result in more investment for cleaner energy
generation and the badly needed upgrading of energy distribution networks, which at the moment
suffer high losses. These pose significant financial challenges. The governments have already
started this process, and price increases in 2001 reduced energy’s quasi-fiscal deficit by 50
percent. This will spur energy efficiency investments by industries and households, reducing
demand and emissions while also improving the fiscal condition of the economy. They will be
supported by the Serbian Energy Efficiency Agency, which is dedicated to addressing this issue.
At the same time, however, the governments also need to introduce and ensure compliance with
higher standards for fuels.
10.
Excessive industrial pollution. This occurs in Serbia and Montenegro in a number of
identified hot spotsand poses a serious risk to public health and the surrounding ecosystem. In
Serbia, the main hot spots are in the cities of Bor, Kragujevac, Pancevo, and Sabac. A U.N.
Environment Programme (UNEP)/U.N. Centre for Human Settlements report identified
additional environmental hot spots that were created in Serbia as a result of NATO bombing, at
Pancevo and Novi Sad. Pollutants in the ambient environment include several substances that are
extremely toxic, such as dichlorethane, mercury and other heavy metals, PCB oils and petroleum
product wastes, and phenols. Levels of these pollutants are frequently found to exceed national
and European Union (EU) standards. In Montenegro, the Aluminum Kombinat near Podgorica is
the most serious hot spot, contaminating not only the air but also ground and surface water
resources and hence endangering both the health of nearby communities and biodiversity in the
Lake Skadar watershed.
11.
Weak environmental management system, institutionally and legally. It is claimed that
some hot spots have developed as a result of NATO bombing while others are due to improper
operations of industrial plants over a number of years. The situation was allowed to develop
because of an inadequate and at times perverse incentive system, lack of monitoring and
enforcement capacity of government agencies, insufficient access to environmental information
by the public, and lack of access to capital for better technology. Monitoring and enforcement of
standards and regulations are weakened by fragmented institutions and the inconsistent nature of
legal and organizational frameworks, with limited mandates, insufficient staffing, lack of modern
inspection equipment, and low fines. The current system of environmental assessment and
monitoring of mitigation measures suffers from a lack of scoping and screening to ensure that
efforts are focused on genuinely important environmental problems. The economic transition that
the country is undergoing provides an opportunity to redefine public and private cooperation on
environmental protection in a way that fosters the business environment. Serbia and
Montenegro’s environmental management system will also need to be strengthened, in
combination with general civil service reform and efforts to reduce corruption generally.
12.
Economic instruments that appear to be more directed to revenue generation than to
providing incentives for environmentally responsible behavior. The most striking example of this
is the 1-percent tax on the total investment amount that is levied at the environmental impact
assessment (EIA) stage. Not being related to environmental performance in any way, this tax
v
serves as a disincentive for businesses to create much-needed investments. Such a fee is only
justified if it covers no more than the administrative costs of reviewing the EIA of an investment
proposal.
13.
Difficulties with the quality and quantity of water resources. Serbia and Montenegro is
classified among the water-poor countries of Europe, given its low per capita water flow and
domestically generated water resources. Groundwater plays an important role in drinking water
supply, but the quality is such that most of it must be treated before it can be drunk. River water
quality is largely poor, notably in central and northern Serbia, as a result of industrial,
agricultural, and municipal wastewater pollution, pollution associated with river navigation,
pollution from thermal power stations, and pollution originating in upstream countries. In
Montenegro, signs of eutrophication and other contamination have become visible in Lake
Skadar and in marine waters. Improvement in the capacity to monitor water quality is necessary
for enhanced water resources management. Serbia and Montenegro is prone to regular floods.
Large-scale physical measures have been put in place in northern Serbia, but more needs to be
done in the rest of Serbia and Montenegro, including community-based flood prevention
measures.
14.
Transboundary water and global environmental issues. Serbia and Montenegro
contributes about 13 percent of the Danube’s nutrient pollution and hence is, together with other
basin countries, responsible for the deterioration of the downstream Black Sea ecosystem.
Policies and incentives to reduce nutrient runoff in the agricultural sector and improved
municipal and industrial wastewater treatment in the Danube Basin are needed to alleviate this
problem. Serbia and Montenegro also has unique species of flora and fauna that are under
various degrees of threat. A biodiversity strategy is required to determine the best course of
action for their longer-term preservation.
15.
Lack of sustainable forest management. Serbia and Montenegro has significant forest
resources that are threatened by overharvesting, illegal logging, forest fires, and pest infestations.
Promotion of sustainable management of forests by strengthening forest institutions, increasing
wood extraction fees to cover costs, and harmonizing standards and regulations within the
country and internationally is needed. Excessiv cutting of trees in mountainous parts of
Montenegro and Serbia is in part responsible for increased erosion and flood occurrence.
Main Recommendations
16.
The review’s main recommendations for action are given in Table ES1. For each action,
the table provides the main reason why it is seen as critical, notes related issues that also need to
be addressed, and reports on supporting activity by other donors. The selection of actions is
based on the following criteria:
•
•
Impact on human health—priority is given to those problems, primarily related to air
and water pollution, that have a demonstrable negative impact on health, such as
illness and premature death
Impact on the economy—some problems can be ranked according to their economic
impact, including pollution and natural resource management issues
vi
•
Impact on natural ecosystems—since the destruction of habitat and extinction of
species are not reversible, these impacts do not have easily quantifiable economic use
values for humans associated with them but could nevertheless be critical for the
proper functioning of economic systems
17.
In addition to these, the priorities for action in Table ES1 also take account of ongoing
support from other donors, as well as the likely costs of the interventions, the potential benefits,
and the prospects for mobilizing financial resources for them.
18.
The list of recommendations does not include two key policy measures that the
governments are already committed to that, if successfully implemented, will make a major
contribution to the environment. The first is the phaseout of energy subsidies. Under its macro
and sectoral reform programs, Serbia and Montenegro reduced such subsidies in 2001 and 2002.
In addition to the benefits this brought to the budget (the quasi-fiscal deficit due to subsidies has
fallen by 50 percent, or around US$550 million during this period), the phaseout also reduced the
inefficient use of energy and brought down emissions of local and global pollutants. The
extension of the program to raise Serbia and Montenegro’s energy prices to world levels will
bring further benefits in these areas and should be continued, as the governments of both
republics intend. At the same time, attention needs to be paid to the impact of the price rises on
the poorest segments of the population, especially those in rural areas who might make increased
use of wood fuel. Experience elsewhere in the region has shown that these shifts in energy use
can increase deforestation and cause health damages through higher levels of indoor air
pollution. Measures to address these impacts can be taken without compromising the subsidy
phaseout program.
19.
The second key policy measure relates to the pricing of water and waste services by
municipalities. Currently the charges are so low that the service is poor and the infrastructure is
deteriorating fast. As with energy, the governments have started action to raise prices in some
municipalities, but so far only a handful of utilities have taken steps in this direction. The
benefits of increasing charges are clear: they will allow better services to be provided, thereby
improving the environmental health of the population served, and they will reduce the budgetary
deficit, releasing resources for other high-priority investments, including those on the
environment. This program should be expanded as much as possible, with targeted support for
vulnerable users being included as part of the reform program.
20.
The recommendations in Table ES1 emphasize, above all, the need for continued policy
and institutional reforms that will have major implications for the environment and that will
also, in many cases, benefit the economy. These are complemented by investments where these
are critical for addressing environmental issues. In some cases the policy and institutional
reforms need some further preparatory work. This is the case for actions relating to coastal zones
and biodiversity protection, and, for these, the preparation of a strategy document is
recommended as a first step. The study team considers that a full National Environmental Action
Plan, starting from scratch in identifying and developing environmental priorities, is not
necessary at this stage, given the work that has already been done on these issues. The
governments, with donor assistance, may wish to organize stakeholder consultation seminars
vii
focused on prioritization of actions recommended in their environmental sector analyses and on
identification of financial resources to carry them out.
21.
Areas where policy/institutional reforms should be initiated are: strengthening
institutional capacity in environmental management and addressing environmental liability and
privatization. Finally, areas where some investments need to be made in the short term; these
include improvements in solid waste disposal facilities, improvements in rural and urban water
services, and consideration ofin serious pollution problems in selected hot spots. In all cases the
focus should be on localities where the present situation poses a serious health threat. In addition,
the governments should consider investments that augment regional/global public goods—such
as those that reduce greenhouse gases through improvements in energy efficiency, that tackle
Danube eutrophication, that promote integrated ecosystem management for Lake Skadar, or that
otherwise improve biodiversity conservation. The justification for these is that Serbia and
Montenegro has international obligations that have to be fulfilled and that funds for these
programs will come partially from international earmarked sources, such as the Global
Environment Facility (GEF). The selection of the projects, however, should be based on the net
global benefits plus the local benefits generated.
The Contribution of Other Donors
22.
Following the democratic changes in Serbia and Montenegro in late 2000, several
multilateral and bilateral donors have initiated substantial programs that relate to the
environment. Donor support for the environment in Serbia and Montenegro initially focused on
urgent problems, primarily in the municipal sector, but has since moved to support for broader
institutional reform, including legal and technical areas, technical assistance, and infrastructure
investment. The European Agency for Reconstruction of the EU, which is responsible for the
management of the main EU assistance programs in Yugoslavia, is the largest donor, investing
mostly at the municipal level, covering maintenance and repair of local public facilities. For
sewerage and wastewater, the EU intends to fund preparatory studies for larger projects, which
will then be funded mainly from other sources, including the European Investment Bank. The
U.S. Agency for International Development also has a large assistance portfolio in Serbia and
Montenegro, focusing as well at the municipal level—for small-scale urgent infrastructure
development and maintenance—and in support of civil society development. Larger investment
programs are being prepared by the European Bank for Reconstruction and Development,
which is currently negotiating investments in the larger cities for district heating systems and for
water supply and sewage systems. The Governments of Germany and France are also
undertaking smaller-scale efforts that support wastewater and water projects.
23.
Bilateral donors are also supporting a number of infrastructure projects, and some have
contributed to cleaning up activities in several environmental “hot spots,” in particular where
NATO bombing damage occurred. UNEP has identified 27 cleanup projects to address the postconflict environmental and humanitarian problems, with an estimated cost of US$37 million.
Switzerland, Austria, Norway, Russia, Denmark, and others have provided US$11 million,
and about 15 projects have been implemented. Germany intends to provide Euro 2.5 million to
Montenegro for environmental protection and is in the process of determining the specific area of
investment.
viii
24.
A number of donors and international agencies are also providing or planning to provide
technical assistance to Serbia and Montenegro in environment-related programs. Among the
more active in this area are U.N. institutions and the EU. Currently the U.N. Development
Programme is working to develop a strategy for energy conservation and efficiency and for the
promotion of sector reform. It is taking a lead position implementing GEF projects in the area of
preparing national strategies on climate change and on biodiversity conservation. The U.N.
Economic Commission for Europe (UNECE) is preparing an Environmental Performance
Review for the country. UNEP, together with UNECE, has organized several capacity building
workshops. The EU plans to provide substantial assistance in the areas of environmental
legislation, support to civil society networks, and the strengthening of municipal institutions
responsible for solid waste and wastewater management. It will also support improved
monitoring of pollution and work on hot spots where the current situation poses a serious
environmental risk.
25.
The Regional Environmental Center in Central and Eastern Europe (REC) is coimplementing several regional projects in Yugoslavia: providing support for ratification and
implementation of multilateral environmental agreements; strengthening the national
environmental protection agencies; developing national information systems and environmental
legal advocacy and advisory centers. Among bilateral donors, the Government of Finland is
providing special support in the area of harmonization and improvement of environmental
legislation. And other donors (Switzerland and Norway) have supported, through the
Organization for Security and Cooperation in Europe, the draft framework Environmental
Protection Law for Serbia or are supporting the Serbian or Montenegrin Governments in some
particular areas. (For example, the Government of Japan has supported preparation of Serbia’s
waste management strategy.)
The Role of the Bank
26.
The donor review suggests that there is considerable interest in the environment from
external agencies and that the Bank has to think carefully about where it can make the most
useful contribution. The main programs that the Bank could most usefully support are listed in
Table ES2. They target areas not being adequately addressed by other donors where action is
needed according to the priorities listed in Table ES1.
•
Develop a hazardous waste facility for Serbia. The Serbian Ministry for the
Protection of Natural Resources and Environment (MENR) intends to develop a
National Solid Waste Management Strategy based in part on the Strategic Framework
for Waste Management prepared with Japanese aid. The Bank is already involved
through the International Finance Corporation in a possible private-sector solid waste
management project for Belgrade. In Montenegro it provided a special investment
grant for a coastal zone waste disposal facility last year, and it expects to add to that
this year. The Bank will provide an additional International Development Association
credit of US$5 million for the same sector and region and thus solve the waste
problem for a most sensitive tourist area of the country. This places the Bank in the
lead on assistance in solid waste in Serbia and Montenegro. The investment would
ix
make a major contribution to resolving one of the most serious environmental
problems in the country. It is priority action 1 in Table ES1.
•
Prepare and implement an Integrated Ecosystem Management Program for
Lake Skadar, the largest freshwater lake in Serbia and Montenegro, which is
shared with Albania. This activity falls under priority action 10 in Table ES1, and
although it preempts the biodiversity strategy to some extent, the action is justified for
several reasons. First, the lake is clearly an important resource, so any biodiversity
strategy is bound to recommend priority action in this region. Second, time is of the
essence as increasing water pollution threatens fisheries and as deforestation and
illegal hunting endanger globally significant ecosystems. The Bank is well placed to
undertake this project because of its experience in similar integrated ecosystem
management projects, including the ongoing Lake Ohrid Project between Macedonia
and Albania. It could also lead to the development of community-driven development
projects that address agricultural and rural infrastructure issues (for example, rural
water supply).
•
Design and implement a Danube nutrient reduction investment project. This is
priority action 8 in Table ES1. The Bank would play a pivotal role in the Black
Sea/Danube cleanup program, and Serbia and Montenegro urgently needs to make a
contribution to the nutrient reduction targets as part of its obligation under the
Convention on Co-operation for the Protection and Sustainable Use of the Danube
River. Serbia and Montenegro contributes about 13 percent of the Danube River’s
nutrient pollution, which has had negative impacts for fisheries, tourism, and public
health in the Danube and Black Sea regions. GEF funding is available for this.
•
Prepare an energy efficiency and renewable energy project for Serbia. Priority
action 7 in Table ES1 is included because there are a number of areas where energy
efficiency is very low and where investment in more-efficient technology would be
justified, especially with the higher energy prices that are being planned, and because
the project would benefit the local environment and economy, with part of the costs
being covered from its contribution to the global public good (that is, reduction in
greenhouse gas emissions). The Bank, possibly through the GEF or the Prototype
Carbon Fund, would be the most effective agency to implement such a project.
Another possibility for this activity would be a debt-for-nature swap.
•
Assist the Ministry of Environment in legal revisions to the privatization law to
take account of environmental liability. This is priority action 6 on Table ES1.
Although a number of donors are willing to support this activity, the Serbian MENR
and the Privatization Agency would benefit from Bank experience in this area, which
is extensive. It could be incorporated into the broader privatization agenda via a
Second Private and Financial Sector Adjustment Credit and via a technical assistance
(TA) project to support case-by-case privatization where there are serious
environmental liability issues. Perhaps a Bank TA grant with support from one or
more bilateral donors would be the best arrangement.
x
•
Support the PRSP process. By drawing out the key environment poverty linkages
and contributing to the PRSP document in this area, the Bank can help ensure that
environmental issues are properly addressed in the national development strategy.
This is partly in support of priority action 4 in Table ES1, which includes the need for
a better understanding of the impact of environmental changes on poor sections of
society and of how actions need to be designed to minimize such impacts in the future
and possibly reverse those that have already happened. The Bank has considerable
experience with environment and poverty issues and is well placed to offer assistance
in this area.
xi
Table ES1: Main Recommendations
Action
Reason for Inclusion
Related Issues
Support
1. Improve waste
management,
particularly
hazardous waste
Impact on human health—current
practice poses serious public health
risk through accidents during
transportation and to urban poor,
especially Roma, who scavenge
waste dumps
Governments have indicated this is a
high priority
Impact on human health—present
situation poses significant health risk
and a burden to the poor population
who incur high costs of obtaining
clean water
In addition to hazardous
waste, Regional
landfills should be
promoted for waste
from small and medium
settlements.
EBRD and WB
Group have
initiated
investment
programs
Sustainable operation of
the schemes has to be
ensured, from local
charges or from
subsidies.
EU and bilateral
donors,
especially France
Impact on human health—present air
pollution and groundwater pollution
poses significant public health
hazard; a number of hot spots have
been addressed, but many remain
Fulfills all criteria, providing
outcomes lead to reductions in
environmental and natural resource
degradation, economy decline, and
health damage; important issues to be
addressed are monitoring and
decentralization
Impact on economy—development of
tourism will depend critically on
proper control of land use and on
adequate investment in infrastructure
Impact on natural ecosystems—
development has to protect key
resources
Impact on economy—successful
privatization of “dirty” industries
requires this issue to be addressed
Impact on natural
ecosystems/health—if EA uncovers a
serious problem, addressing it during
privatization has positive
environmental impacts
Impact on economy—prospects of
enhanced affordability of energy
sources
reduced greenhouse gas emissions
Could be tied to actions
under 1,2,5, 7 and 8.
Several donors
could support
such actions
Focus needs to be on
monitoring of key
pollutants, clarification
of responsibilities
Possibly EU,
Government of
Finland, REC,
OSCE; included
as components of
WB lending
operations
No donor
funding yet;
private sector
contribution to
implementing
program will be
essential
WB SAC project
is addressing
some of these
issues but more
is needed; EU,
Government of
Finland support
possible
Possible GEF
funding; debtfor-nature swap
could also be
explored
Impact on natural ecosystems—as
part of Serbia and Montenegro’s
commitment under Danube
Protection Program
Includes investment
projects
To be assessed,
but financed
from GEF
Impact on natural ecosystems—as
part of Serbia and Montenegro’s
commitment under the biodiversity
Specific key
investments may be
implemented
From GEF and
possible support
from EU
2. Increase
provision of
basic water and
sanitation
services to urban
and rural poor
3. Address
environmental
hot spots
4. Strengthen
institutional
capacity for
environmental
management
5. Prepare a
coastal zone
strategy
6. Include EA
related to
liability in
context of
privatization
7. Introduce
measures to
enhance energy
efficiency and
use of renewable
energy sources
8. Institute
measures to
reduce nutrient
run-off to the
Danube
9. Prepare a
biodiversity
strategy; identify
xi
Risk of failure is high;
strategy will require
political commitment
from many parties and
increased resources for
local government.
Possible funding for
environmental cleanup
in hot spots can be tied
to this program
threatened
species and
prepare an action
plan
10. Prepare
management
plan for Lake
Skadar and
introduce
environmentally
friendly natural
resource use
practices
and related conventions
immediately
Impact on economy—current
situation is threatening fishery and
tourism potential of lake, which is
among the poorest in Montenegro
degradation of water quality,
deforestation, and illegal hunting is
threatening the lake’s globally
significant biodiversity
GEF support
plus local and
donor cofinancing
Table ES2: Proposed Activities for the Bank
Activity
Serbia Hazardous Waste Management
Project. Supports recommendation 1.
Type
Investment
Time frame
Project start
FY 05
Proposed Funding
TBD
Montenegro/Albania Lake Skadar
Integrated Ecosystem Management.
Supports recommendations 9 and 10 with
possible follow-up of CDD and rural
infrastructure projects.
Serbia Danube Basin Nutrient
Reduction Project. Supports
recommendation 8.
Investment
Project start
FY 04
GEF preparation grant
and GEF grant (app.
US$5m) and donor and
local co-funding
Investment
Project start
FY 05
Serbia legal revisions to integrate
environmental due diligence into
privatization process. Supports
recommendation 6.
Serbia Energy Efficiency and
Renewable Energy Project. Supports
recommendation 7.
Capacity
building
FY 03
and
GEF grant (app. US$
5m) and donor and
local co-funding
IDF grant or TA from
Privatization Loan
Investment
FY 04
and GEF grant (app.
US$5 m) and donor and
local co-funding . Debt
for Nature Swap?
Serbia and Montenegro PRSP Support
Exercise on Environment and Poverty
Linkages
(two stakeholder workshops in each
republic and support to analytical work in
intermittent period). Supports
recommendation 4.
Capacity
building
FY 03
(Oct. 02—
Mar. 03)
ECSSD BB funds
(already secured from
PREM)
xii
1.
INTRODUCTION
1.1
Background and Objectives
27.
Serbia and Montenegro is facing the challenge of restructuring its economy to restore
growth and alleviate poverty after a protracted period of economic and political hardship and
conflict and in the face of a degraded natural environment. The governments2 recognize that
environmental sustainability plays an important role in achieving their economic and social
goals, and they wish to focus their limited financial resources on tackling the highest priority
environmental issues. At the same time, they have extremely limited resources and many
demands for priority action. Hence there is a critical need to identify the key environmental
interventions, the mechanisms for financing them, and the institutional changes that underpin
them.
28.
The primary purpose of this review is to assist the World Bank in contributing to this
urgent task by updating its understanding of the environment in Serbia and Montenegro, with a
view to guiding the Bank’s environment strategy in the context of the current social and
economic situation. To this end, the review has assessed and assigned priorities to the
environmental problems in the two republics and in the Federation (excluding Kosovo and
Metohija). In doing so, it has also developed and strengthened the dialogue on environmental
issues between the Bank and Serbia and Montenegro, thereby contributing to the preparation of
the Poverty Reduction Strategy Paper (PRSP) and Country Assistance Strategy.
29.
The specific objectives of this Country Environmental Analysis (CEA) are to:
•
•
•
Review the existing situation in the sector, identify priority areas for policy changes
or investments, and consider the role of the government, the private sector and donors
in implementing this agenda
Assess macroeconomy-environment linkages and measures that affect long-term
sustainability and financial viability within the priority areas
Provide a basis for defining the Bank’s future involvement in the sector.
The exercise has also begun a process through which the Bank can discuss with the governments
appropriate actions for undertaking key reforms in environmental protection and sustainable use
of natural resources.
30.
The CEA has been designed to provide a framework for improved collaboration with
development partners in carrying out country-level diagnostic analysis. The World Bank Team
and the United Nations Economic Commission for Europe (UNECE) Team that has produced an
Environmental Performance Review of the Federal Republic of Yugoslavia cooperated closely
and exchanged information in the analysis of sub-sectoral trends and policies. The draft version
of the CEA was discussed with stakeholders in both republics in workshops organized in October
and December 2002. Comments received in these workshops have been integrated in the final
report. The findings and recommendations of the CEA also inform the development of the Serbia
2
“The government” refers to the totality of federal and republic-level governments.
1
and Montenegro PRSP and the Country Assistance Strategy, both of which are scheduled for the
third quarter of 2003.
1.2
Main Trends in the Quality of the Environment and Natural Resources
31.
The following environmental issues have been identified as critical, based on the negative
impact of current environmental conditions on human health, the economy, and natural
ecosystems.
32.
Deteriorating trends in water, sanitation, and waste management. Water and wastewater
infrastructure was well developed in the former Yugoslavia. Service levels today, on average,
reflect this legacy, with 86.6 percent of the population receiving drinking water supplies directly
to their homes or yards. These figures can be misleading, however, for a number of reasons:
First, a large percentage of the drinking water provided is of low quality. Second, the water
distribution system is outdated and inadequate, leading to large losses. Third, there are
significant differences in service delivery among different regions and between urban and rural
populations, particularly in terms of drinking water supplies (urban coverage is 97 percent,
compared with 68 percent rural coverage). In rural areas, wells are often used, and contamination
of groundwater poses a public health problem, especially in Vojvodina, where the groundwater
table is high. A similar observation holds for sanitation. Although according to official statistics
88.3 percent of the population has access to the sewage system or a septic tank, service to the
majority of rural populations is limited to absorption tanks, which are not insulated from
leakages. Only 8 percent of all household wastewater is treated. Ten years of little maintenance
and no new investments in the wastewater sector has resulted not only in the deterioration of the
infrastructure and basic service delivery, but also in the decline of ambient and drinking water
quality. Lack of access, per se, to water and sanitation is a public health issue for some
populations, particularly those living in urban slums, which are often located adjacent to poorly
managed landfills and are largely inhabited by internally displaced persons (IDPs), Roma, and
refugees.
33.
Only about 50 percent waste collection. No landfills meet standards for sanitary landfills.
In the absence of a secure landfill site for hazardous waste and proper management practices,
medical, chemical, and animal wastes are disposed of together with regular household waste,
exposing the population to significant public health risks. There is no systematic solution for
recycling of waste, which is presently informally undertaken by Roma. Reforms aimed at
restoring the financial health of municipal utilities so that they can restore and expand services
are a high priority.
34.
Threat of coastal zone deterioration in Montenegro. This is a crucial issue due to
uncontrolled construction activities and the lack of wastewater treatment and a coastal zone
management strategy. Evidence of eutrophication and bacterial contamination in tourist areas
already exists. The coastal areas also experience shortages of drinking water during the peak
summer season. Montenegro’s aspirations to develop its tourism sector (it is targeting 22 million
tourist nights—four times the current figure—by 2020) mean that these negative trends must be
reversed. Developments need to be supported by stricter application of water, sewerage, and
wastewater treatment standards, by investment in wastewater treatment, and by land
management planning.
2
35.
Air pollution hot spots. These exist in several industrial areas, particularly near lignitefired power plants (and associated mines), such as the Kolubara-Obrenovac corridor, and in the
cities of Bor, Pancevo and Sabac in Serbia and the cities of Plevlija, Podgorica (Aluminum
Kombinat), and Niksic (ironworks) in Montenegro. In some cases, nearby settlements of poor
people are particularly exposed or affected. A higher-than-average incidence of respiratory
problems is observed in these areas, and national air quality standards are exceeded by a large
factor for sulfur dioxide (SO2) and particulate matter. The high sulfur content of heating oil also
poses a major problem. Environmentally friendlier district heating is limited to large cities. As a
result, air pollution is especially pronounced during winter months. Another significant source of
pollution is the use of leaded gasoline and high-sulfur diesel and mazut (8–9 percent sulfur
content). In the medium term, Serbia and Montenegro needs to phase out the use of leaded
gasoline and develop standards to ensure high fuel quality. This would require restructuring its
oil refinery and other reforms in the petroleum sector, including liberalizing the entry into the
selling of gasoline and petrol at the wholesale and retail levels.
36.
Energy inefficiency. High demand for energy from households and industry induced by
low energy prices contributes to air pollution. Energy subsidies caused a quasi-fiscal deficit of
US$1.1billion in 2000, not only crowding out investments on more urgent social issues but also
undermining incentives for users to invest in more-efficient technologies. Restructuring the
electricity sector, together with phasing out energy subsidies, should eventually result in more
investment for cleaner energy generation and the badly needed upgrading of energy distribution
networks which at the moment suffer high losses. The governments have already started this
process, and price increases in 2001 reduced energy’s quasi-fiscal deficit by 50 percent. This will
spur energy efficiency investments by industries and households, reducing demand and
emissions while also improving the fiscal condition of the economy. At the same time, however,
the governments also need to introduce and ensure compliance with higher standards for fuels.
37.
Excessive industrial pollution. This occurs in Serbia and Montenegro in a number of
identified hot spots, which poses a serious risk to public health and the surrounding ecosystem.
In Serbia, the main hot spots are in the cities of Bor, Kragujevac, Pancevo, and Sabac. A U.N.
Environment Programme (UNEP)/U.N. Centre for Human Settlements report identified
additional environmental hot spots that were created in Serbia as a result of NATO bombing, at
Pancevo and Novi Sad. Twenty-seven sites were identified, with a remediation cost of around
US$30 million. So far, however, UNEP has only received US$11 million in grants for this work.
Pollutants in the ambient environment include several extremely toxic substances, such as
dichlorethane, mercury and other heavy metals, PCB oils and petroleum product wastes, and
phenols. Levels of these pollutants are frequently found to exceed national and European Union
(EU) standards. In Montenegro, the Aluminum Combinat near Podgorica is the most serious hot
spot, contaminating not only the air but also ground and surface water resources and hence
endangering both the health of nearby communities and biodiversity in the Lake Skadar
watershed.
38.
Weak environmental management system, institutionally and legally. Some hot spots
have developed as a result of NATO bombing while others are due to improper operations of
industrial plants over a number of years. The situation was allowed to develop because of an
inadequate and at times perverse incentive system, lack of monitoring and enforcement capacity
of government agencies, insufficient access to environmental information by the public, and lack
of access to capital for better technology. Monitoring and enforcement of standards and
3
regulations are weakened by fragmented institutions and the inconsistent nature of legal and
organizational frameworks, with limited mandates, insufficient staffing, lack of modern
inspection equipment, and low fines. The current system of environmental assessment and
monitoring of mitigation measures suffers from a lack of scoping and screening to ensure that
efforts are focused on genuinely important environmental problems. The economic transition that
the country is undergoing provides an opportunity to redefine public and private cooperation on
environmental protection in a way that fosters the business environment. Serbia and
Montenegro’s environmental management system will also need to be strengthened, in
combination with general civil service reform and efforts to reduce corruption generally.
39.
Economic instruments that appear to be more directed to revenue generation than
providing incentives for environmentally responsible behavior. The most striking example of this
is the 1-percent tax on the total investment amount that is levied at the environmental impact
assessment (EIA) stage. Not being related to environmental performance in any way, this tax
serves as a disincentive for businesses to create much needed investments. Such a fee is only
justified if it covers no more than the administrative costs of reviewing the EIA of an investment
proposal.
40.
Difficulties with the quality and quantity of water resources. Serbia and Montenegro is
categorized among the water-poor countries in Europe, given its low per capita water flow and
domestically generated water resources. Groundwater plays an important role in drinking water
supply, but most groundwater must be treated before it can be drunk. River water quality is
largely poor, notably in central and northern Serbia, as a result of industrial, agricultural, and
municipal wastewater pollution, pollution associated with river navigation, pollution from
thermal power stations, and pollution originating in upstream countries. In Montenegro, signs of
eutrophication and other contamination have become visible in Lake Skadar and in marine
waters. Improvement in the capacity to monitor water quality is necessary for enhanced water
resources management. Serbia and Montenegro is prone to regular floods. Large-scale physical
measures have been put in place in northern Serbia, but more needs to be done in the rest of
Serbia and Montenegro, including community-based flood prevention measures.
41.
Transboundary water and global environmental issues. Serbia and Montenegro
contributes about 13 percent of the Danube’s nutrient pollution and hence is, together with other
basin countries, responsible for the deterioration of the downstream Black Sea ecosystem.
Policies and incentives to reduce nutrient run-off in the agricultural sector and improved
municipal and industrial wastewater treatment in the Danube Basin are needed to alleviate this
problem. Serbia and Montenegro also has unique species of flora and fauna that are under
various degrees of threat. The Government of the Federal Republic of Yugoslavia prepared a
priority action plan to address pollution hot spots in the Danube and to monitor endangered
areas. Feasibility studies have been prepared for wastewater treatment plants in 21 towns, but
funding for the program remains a problem. Furthermore, these are mostly short-term measures.
A biodiversity strategy is required to determine the best course of action for the longer-term
preservation.
42.
Lack of sustainable forest management. Serbia and Montenegro has significant forest
resources that are threatened by overharvesting, illegal logging, forest fires, and pest infestations.
Promotion of sustainable management of forests by strengthening forest institutions, increasing
wood extraction fees to cover costs, and harmonizing standards and regulations within the
4
country and internationally is needed and is being addressed in the new law. Excessiv cutting of
trees in mountainous parts of Montenegro and Serbia is in part responsible for increased erosion
and flood occurrence.
1.3
Millennium Development Goals and the Environment
43.
Ensuring environmental sustainability is one of the eight U.N. Millennium Development
Goals (MDGs) that were adopted at the Millennium Summit in September 2000. Analysis of
MDG indicators in Serbia and Montenegro suggests that there is room for improvement in all
MDG areas. (See Table 1.)
44.
Proportion of population with sustainable access to an improved water source. While
statistics indicate a large part of the Serbia and Montenegro population had access to safe
drinking water in 2000, there are unsatisfactory trends both in quality and in coverage and
service, especially to rural areas and urban slums (see Section 7 for details). Similarly, although
99.6 percent of the Serbia and Montenegro population is reported to live in a household with
sanitation services of some kind, most rural households have septic tanks, many of which have
been found to be improperly designed and situated.
45.
Proportion of population with access to improved sanitation and proportion of
population with access to secure tenure. People in urban slums, mainly refugees, Roma, and
IDPs, do not have access to safe sanitation facilities. Problems of access to safe drinking water
and sanitation threaten to reverse the positive trend in decreasing child mortality rates since the
1990s.
Table 1: Serbia and Montenegro and Millennium Development Goals
Indicator
1990
1995
1999
2000
Reduce child mortality
Under-five mortality rate (deaths/1000 live births)
Infant mortality rate (deaths/1000 live births)
26.0
23.0
19.0
13.1
16.0
13.6
NA
12.8
Ensure environmental sustainability
Forest area (million ha)
National protected area (percent of total land area)
GDP per unit of energy use (US$ / koe)
CO2 emissions (MT per capita)
2.995*
NA
1.85
3.6^^ 1
2.934*
3.24
1.28
2.9
NA
NA
1.28
2.887**
3.23***
4.6***
Notes: 1 1991.
Sources:
^^ Chapter 12, “Breaking with the Past: The Path to Stability and Growth,” 2001
* Statistical Yearbooks of Yugoslavia; Federal Statistical Office, "Bulletins Forestry”
** FAO Global Resources Assessment, 2001
*** The Little Green Data Book, 2001
46.
Environmental sustainability. The gross domestic product (GDP) per unit of energy used
declined from US$1.85/koe in 1990 to US$1.28/koe in 1999, showing an increase in energy
intensity of 13 percent. This compares poorly with the Europe and Central Asia (ECA) average
of US$2.4/koe and underlines the need for improved energy efficiency and reduced demand
through the elimination of energy price subsidies. Serbia and Montenegro’s carbon dioxide
5
emissions of 4.6 metric tons per capita were less than the ECA average in 2000. However, these
emissions appear to have increased since the early 1990s, and low-cost options for their
reduction are plentiful. Hence there is room for improvement.
47.
Forests. Forests cover 28 percent of Serbia and Montenegro’s land area. This percentage
is lower than the ECA region average of 40 percent, and there has been a decline in forest
coverage of 0.4 percent annually during the past 10 years, mainly due to fires, pest infestation,
illegal logging, reduced afforestation, and overharvesting. While the annual reduction is not very
dramatic, it ignores the decline in forest quality that has accompanied the illegal logging and the
lack of proper forest management. Overall, there is a need to move to better and more sustainable
use of forest resources.
48.
Biodiversity. About 3.3 percent of Serbia and Montenegro’s total land area is protected
for conservation purposes, which is the same as the ECA average.3 In Montenegro, this
proportion is 7.1 percent, while in Serbia it is 2.7 percent. Serbia has plans to increase the share
of its land under protection, as discussed later. There is still, however, a need for better
management of Serbia and Montenegro’s globally significant biodiversity. (See Section 10.)
1.4
Poverty and Environment Linkages
49.
The environmental MDGs are important in their own right but also because meeting
some of them contributes to a reduction in poverty, which is probably the most important MDG
of all. The environment-poverty linkage is especially strong when the poverty is defined in the
broader sense to include not only income and consumption but also health and vulnerability. As
for most transition countries, a number of important poverty-environment linkages exist in
Serbia and Montenegro. These are summarized in this section under the headings environmental
health and poverty, vulnerable social groups and environmental degradation, poverty and natural
resource degradation, and poverty and vulnerability to natural disasters. Boxes 1 and 2 provide
summary information on the state of poverty in Serbia and Montenegro, as reported in the
Interim PRSPdraft documents. It is interesting to note that these documents focus on the income
measure of poverty and pay less attention to the dimensions that are most susceptible to a
deteriorating environment.
3
Protected area is defined as IUCN Categories I–IV.
6
Box 1: Poverty in Serbia
Poverty in Serbia has increased dramatically in the last 10 years. The middle class has disappeared, the
number of poor has increased two-and-a-half times, and an increasing number of people live just above
the poverty line. Available statistics for 2000 indicate that 2.8 million people, about one-third of the
population, live in poverty, defined according to national criteria as having an income of less than
US$30 per month. About 1.8 million people, 18 percent, live in absolute poverty, with a monthly
income of less than US$20.4 Additionally, a considerable group lives close to the poverty line and can
easily fall below it in the absence of well-targeted measures.
The urban population has suffered more from the fall in living standards and the spread of poverty than
the rural population. There is a considerable difference in poverty incidence between these two
categories of population (39.7 percent in urban areas versus 29.4 percent).
Serbia’s three regions—Vojvodina, Central Serbia, and Southern Serbia—differ in terms of level of
development. Vojvodina is the wealthiest region; fewer than 10 percent of its municipalities are
classified as underdeveloped according to the U.N. Human Development Index (HDI). In the central
region, GDP/capita is slightly lower than in the Vojvodina, and there is a higher proportion (21 percent)
of municipalities classified as underdeveloped by the HDI. But severe rural poverty is not widely
observed. Southern Serbia is the largest region and also the poorest, least developed one. According to
the HDI, 58 percent of municipalities there are underdeveloped. A substantial proportion (19 percent)
of all municipalities are classified as severely underdeveloped. Widespread rural poverty has been a
major determinant of the net outmigration recorded for Central Serbia and Southern Serbia during the
period 1995–99.
The results of empirical research show that the main survival strategies of households in Serbia in the
year 2000 were the reduction of needs, subsistence living, a decrease in savings or sale of property, and
an increase in gray economy activities.5
Source: I-PRSP.
Box 2: Poverty in Montenegro
Poverty has increased in Montenegro during the past decade. A survey carried out in 2000 indicated that,
depending on where the poverty line is set, 20–30 percent of the Montenegrin population can be
considered poor. The unemployment rate stands at 86 percent, taking into account all types of
employment (formal, informal, and multiple). It should be noted, however, that those engaged in
informal activities may not hold full-time positions. Regional differences are also very strong. Northern
inhabitants have a higher probability of living below the poverty line.
The negative socioeconomic trends experienced during the past decade in Montenegro have been, to a
greater or lesser extent, offset by a number of coping mechanisms. Family support and income from
informal activities (the gray economy) played an important role in preventing an even larger share of the
population from falling below the poverty line.
Source: UNDP, “Employment, Labor Market and Standard of Living in Montenegro.”
Environmental health and poverty
4
B. Bogicevic, G. Krstic, and B. Mijatovic, “Poverty in Serbia and Reform of Governmental Support for the Poor,”
Center for Liberal-Democratic Studies, 2002. The study is based on pre-reform data from the first half of 2000 and
does not take into consideration the approximately 600,000 refugees and internally displaced persons currently
accommodated in Serbia.
5
According to a survey in 2000, at least 30 percent of the economically active population was involved in activities
of the gray economy, with monthly incomes that were higher than the ones in the regular economy.
7
50.
Water and sanitation. Health status data indicate that water-related diseases have not
been a significant contributor to the burden of chronic or acute disease in Serbia and Montenegro
(WHO, 2000; UNICEF, 2001); indeed, there has actually been an improvement in some key
indicators. Mortality among infants and children under five, a common indicator of water supply
and sanitation conditions, has declined by nearly half during the 1990s and is associated with
improved household sanitation and improved treatment for diarrhea and acute respiratory
disease. The under-five mortality rate for diarrhea disease declined by 38.2 percent during the
1990–97 period (UNICEF, 2001). There are signs, however, that the picture is changing. The
deteriorating quality of drinking water may well reverse the positive trend in the under-five
mortality rate. Some recent epidemiological studies on health and environment have found a
negative effect on health of living conditions and drinking water quality (Mihajlovic-Vukmirovic
et al., 2001). The situation is particularly acute for urban slums populated by refugees, Roma,
and IDPs (see “vulnerable populations” discussion that follows).6 The impact of inadequate
water supply on the poor is particularly high as they lack the resources to purchase bottled water.
51.
The Serbia and Montenegro public health sector uses a risk-factor-and-exposure approach
to environmental health. Based on this, and given the information on water quality in terms of
specific contaminants whose health impact is well known (such as arsenic, nitrates, carcinogens,
and pathogens), experts draw conclusions regarding impacts of water on health. These
conclusions are plausible and indicative of some serious health issues, but more underlying work
is needed in this area to confirm these preliminary findings.
52.
Air pollution. High ambient concentrations of certain pollutants, particularly small
particles, have been associated in many international epidemiological studies with various
negative health impacts. Concentrations of such particles, of soot, and of SO2 in industrial
settlements in several Serbian cities are within the critical range that has been associated with
negative health impacts. (See Annex 1.) Air pollution is not only a problem for the poor but, as
in other parts of the world, it is most likely that the vulnerable and the poor are least able to
protect themselves from exposure by living in cleaner and safer areas and therefore suffer the
most from such exposure.
53.
Waste management. Lack of proper waste management creates public health hazards for
the poor in a number of ways. First, as described earlier, hazardous waste is not sorted but is
instead dumped without any prior processing on regular, mostly illegal, waste dumps. Urban
poor people, notably Roma, who make a living by scavenging on waste dumps without any kind
of protection or training in the handling of waste are exposed to risks of injury and infection
from sharp materials. Second, as no leachate collection and treatment systems exist at any
landfills, leakage from waste dumps can contaminate groundwater, which is the drinking water
source for poor communities living nearby and relying on wells. Third, inadequate incineration
or incineration of unsuitable materials can result in the release of pollutants in the air and
constitute a health hazard to nearby Roma, refugee, or IDP communities.
Vulnerable social groups and environment degradation
6
The poor, particularly women and children, are generally most affected by environmental health problems, and
traditional environmental hazards—lack of safe water and sanitation, indoor air pollution, and exposure to disease
vectors—play by far the largest role. Indeed, poor people are acutely aware of how poor environmental health
affects their ability to move out of poverty (World Bank, 2002).
8
54.
Roma, refugees, and IDPs residing in special camps or near waste dumps in urban areas
are among the most vulnerable social groups in Serbia and Montenegro. The rural poor in
resource-poor Southern Serbia also deserve attention.
55.
In Serbia, there are an estimated 600,000 refugees and displaced persons who are among
the most vulnerable, with inadequate housing and a much higher unemployment rate than the
local population. Around 20,000 refugees and 11,500 IDPs accommodated in collective centers
clearly represent the most vulnerable part of this group.7 An estimated 25 percent of them are
below the World Food Programme poverty line. Among this extremely poor section of the
population, living in unhygienic and unsanitary conditions, are the worst economic and social
cases—the unemployed, the elderly, single parents, orphans, and those who are unable to care for
themselves.
56.
The Roma minority is a key poor-risk group in Serbia and Montenegro. There are thought
to be 400,000–500,000 Roma in Serbia and Montenegro, concentrated mainly in southern Serbia,
around Belgrade, Vojvodina, and Montenegro. Within Roma settlements, access to utility and
public services is often very limited or nonexistent; the most serious problems are lack of access
to electricity, water, sewage, and garbage collection. The prevalence of communicable disease
associated with poor living conditions, such as hepatitis and trachoma, was confirmed in
discussions with public health officials in both Serbia and Montenegro. Oxfam conducted a study
on the health status and living conditions of Roma settlements in Belgrade and Kragujevac in
2001 (Oxfam 2001). The results clearly point to inadequate basic services and the consequent
health impacts:
•
•
•
•
•
•
•
•
19,000 Roma people live in 64 “unhygienic” settlements (meaning no piped water in
the house or yard), usually in shacks, in Belgrade
Health was identified by the Romas as one of their major problems
Life expectancies are short (only 1.4 percent were older than 60), and living
conditions are one of the contributors to early mortality
63.6 percent of households get their water from public fountains
More than half have outdoor latrines and a third have no latrines at all; in the majority
of settlements there are no sewage system connections or septic tanks
30 percent of Roma children below 6 had diarrhea during the two weeks immediately
prior to the survey, a figure three times higher than in the general population
45 percent of Roma children are malnourished
More than 50 percent of children between the ages of 7 and 19 do not attend school
Poverty and natural resource degradation
57.
While poverty is less widespread in rural areas than in urban areas, thanks mainly to the
resilience of agricultural production, there are significant regional differences in Serbia and
Montenegro (see Boxes 1 and 2). The rural poor in Southern Serbia and those living in
mountainous parts of Montenegro are highly dependent on the quality of natural resources. Land
degradation as a result of overgrazing and deforestation is likely to be a significant cause of
increased poverty in such regions, and although this is generally recognized as a link between
poverty and the environment, the detailed impacts in Serbia and Montenegro need to be
7
UNHCR and ICRC data, 2001.
9
established and estimated. Based on these, the governments may consider promoting incomegenerating activities that are environmentally friendly and use natural resources in a sustainable
manner. Examples of such activities include ecotourism; growing high-value crops, fruits, and
vegetables; and manure management. Successful regional experiences in achieving sustainable
resource management while reducing rural poverty, such as in Turkey, may be considered for
replication. (See Annex Box A5.)
58.
In addition to being affected by environmental degradation, the poor also cause it, in
certain circumstances. One mechanism by which this can happen is increased reliance of the
rural poor on fuelwood for heating when electricity prices rise. As they are not serviced by
district heating or natural gas networks and cannot afford to use electricity, they resort to
increased uncontrolled wood cutting, exacerbating land degradation. Fisheries is another area
where poverty can exacerbate resource degradation through overfishing, leading to a spiral of
lower yields and increasing poverty. As discussed in Section 10, there is evidence of overfishing
and resulting decreases in fish stock in the Lake Skadar area, one of the poorest regions of
Montenegro. (See Annex Box A11.)
Poverty and vulnerability to natural disasters
59.
Serbia and Montenegro are highly exposed to earthquakes and flood risks. The most
severe earthquake in the country was in Montenegro in 1979, when 131 persons were killed,
1,000 persons were injured, and 100,000 homes were destroyed. Its damage was estimated at
US$2.7 billion. During the 1990s, more than 200,000 hectares were affected by floods, which
resulted in significant economic, social, and environmental losses. The poor are particularly
exposed to flood and earthquake risks, notably due to settlements on riverbanks and poor quality
housing constructions. The Government of Montenegro indicated that this is particularly
pronounced in the Tara and Lim basins in the northern part of Montenegro, which is also among
the poorest parts of the country. The country lacks a comprehensive preparedness, mitigation,
recovery, and reconstruction strategy to deal with this problem.
1.5
Recommendations
60.
It is recommended that the Governments of Serbia and of Montenegro:
• Conduct studies on linkages between rural poverty and environmental degradation,
with particular attention to vulnerability to degradation of natural resources, such as
water and land; vulnerability to natural disasters; and the threat of increased fuelwood
cuts as a result of electricity price increases.8
• Prepare a comprehensive national disaster management strategy, including
preparedness, mitigation, recovery, and reconstruction.
8
As an aid to this, it would be important to include natural resource use in regularly implemented household surveys
on poverty.
10
2.
MACROECONOMICS AND ENVIRONMENT LINKAGES
2.1
Main Issues
61.
As with most countries in the region, under central planning the economic structure in
Serbia and Montenegro was characterized by heavy industrialization, price controls, and major
inefficiencies in the way resources were used. Energy, in particular, was underpriced relative to
its world value, but so were mineral resources, timber, and water. As Serbia and Montenegro
moves to a market-based system and as prices start to reflect the scarcity value of the inputs and
outputs, there will be major changes in the structure of the economy. Taking the experience of
other transition economies in the region as a guide, the recovery of heavy industry is expected to
be modest. Agriculture faces significant structural problems, including low productivity, low
quality, and continued heavy state intervention in prices and quantities traded, making exportoriented growth an unlikely prospect for the short to medium term. The services sector will likely
continue to grow significantly in the near to medium term. The Government of Montenegro also
intends to significantly increase the share of tourism services in its economy, for which it has an
excellent basis in natural resources and cultural heritage.
62.
The environmental impacts of past use of natural resources were significant but
somewhat different from those in market-based economies. Cheap energy resulted in high levels
of waste, with consequent high levels of pollution intensity (that is, emissions per unit of output)
in industry. Similarly, in an attempt to increase agricultural output, fertilizers and pesticides were
heavily subsidized, leading to excessive use. Agricultural non-point source pollution of
groundwater and surface waters was substantial. Large, intensive livestock farms, lacking proper
wastewater treatment facilities, constituted significant point sources of pollution. At the same
time, the environmental burdens of a typical market economy were not so great: there were lower
levels of municipal household waste and vehicle pollution, congestion was less of an issue, and
unplanned land use in urban and coastal areas was less evident.
63.
As the economy shifts to a market-based system, it faces new environmental problems.
The immediate difficulties lie in the lack of funds to monitor and ensure compliance with
environmental regulations and the willingness of regulators to overlook noncompliance when
there is a strong imperative of continued production and employment. Low pay and morale in the
regulatory agency also mean developers can get away with ignoring land use regulations. These
issues are discussed further in Section 3, where the financing of environmental expenditures and
the use of market-based instruments are discussed, and in Section 4, where changes to the
institutional framework, including greater transparency and decentralization, are discussed. Other
major challenges include the need to ensure that the transformation to a market economy is as
efficient and effective as possible and that the appropriate regulatory structure for the
environment is in place. The key issues in this regard are reforms in the pricing of natural
resources and the treatment of environmental liability in the privatization process. These are
discussed in the next sections.
2.2
The Impacts of the Pricing of Energy and Water
11
64.
The economy of Serbia and Montenegro relied heavily on subsidized energy and raw
materials to achieve its goals of import substitution and domestic food security. The system was
supported by a myriad of price distortions that underpriced natural resources, promoted polluting
industries, and led to highly inefficient energy and raw material use. A lack of investment capital
and an international embargo prevented upgrading to cleaner technologies. Subsidized tariffs
also resulted in large budget drains at the central and municipal levels, which crowded out other
needed public investments. In addition, more recently, unclear responsibilities for past
environmental damages have made it difficult to ensure that remediation and protection measures
are adopted in industries slated for privatization.
65.
The governments’ macroeconomic reforms aim to restore economic stability and resume
growth. An important policy in this regard, which also has positive environmental implications,
is the phasing out of subsidies and liberalization of prices on energy and natural resources
(notably, water and wood). This will not only reduce budgetary and hence inflationary pressures
associated with the provision and management of these services, it will also provide incentives to
consumers for more-efficient use and free up funds for more direct targeting to the poor. Moreefficient energy and water use will reduce air, water, and soil pollution. Furthermore, reduced
energy demand will lower the country’s growing dependence on foreign fuel imports, which add
to the current account deficit, overall debt levels, and fiscal imbalance.
66.
In view of this, it is encouraging to note that under its macro and sector reform programs,
Serbia and Montenegro reduced energy subsidies in 2001 and 2002. As a result, the quasi-fiscal
deficit due to these subsidies has fallen by 50 percent (around US$550 million). The extension of
the program to raise Serbia and Montenegro’s energy prices to world levels will bring further
benefits in these areas and should be continued, as the governments intend. In designing the new
tariffs, however, it is important to take account of the effects of electricity price increases in
terms of increased use of coal and wood by the poor and those who are not serviced by district
heating and gas networks. As noted earlier, such shifts in energy use can increase deforestation
and cause health damages through higher levels of indoor air pollution. Experience in other
countries has shown that measures to address these impacts can be taken without compromising
the subsidy phaseout program.
67.
Although good progress has been made on the energy side, the same cannot be said for
the pricing of water and waste services by municipalities. The charges are currently so low that
the service is poor and the infrastructure is deteriorating fast. The governments have started
action to raise prices in some municipalities, but so far only a handful of utilities have acted in
this direction. This program should be expanded as much as possible. Fiscal reforms at the
municipal level should increase service charges and collection fees for wastewater and waste
management to levels that cover at least operation and maintenance costs, with targeted support
for vulnerable users being included as part of the reform program.9
9
See World Bank, “Maintaining Utility Services for the Poor: Policies and Practices in Central and Eastern Europe
and the Former Soviet Union,” 2000.
12
2.3
Privatization
68.
Both republics have embarked on large-scale privatization programs. In Serbia, the
Privatization Agency plans to privatize 1,120 enterprises.10 Most of these companies have had
few if any investments in recent years. As Box 3 shows, the privatization process can fail if
environmental liability issues are not addressed in a timely manner. The most important issue
relates to the damages caused by the enterprises’ operations up to the time of privatization
(known as past liabilities). Given social rather than state ownership of these assets, it is unclear
whether the state is liable for such damages. Clearly, the possibility of being held liable for past
environmental damages constitutes a significant risk for reputable investors, leading them either
to be uninterested in bidding for the enterprise or to offer a much lower price than they would
otherwise. Hence, there is an urgent need to clarify this issue. Experience in other countries, such
as Bulgaria, indicates that it may be advisable for the state to accept such liabilities and take
remediation measures, including investments, at the time of privatization. This necessitates
credible commitment and ability by the state to fund such measures.11
Box 3: Benefits of Incorporating Environment into the Privatization Process
Contrary to a common misperception, addressing environmental considerations during privatization does
not impede the process. On the contrary, it reduces investment risks and uncertainties about potential
future costs. Foreign investors in particular are concerned about possible unfair treatment regarding
liability for past damages and about unexpected environmental requirements. In addition, as a condition
for providing loans, international financial institutions increasingly require environmental disclosure and
a financial accounting for environmental liabilities in corporate financial records.
While environmental issues typically represent only a small part of all investment risks and costs, they
become deal breakers if there are uncertainties about potential environmental liabilities, especially if the
risks are large compared with the value of the enterprise. Of particular interest from the environmental
point of view are privatization transactions in such sectors as mining, ferrous and nonferrous metallurgy,
petroleum refining, chemicals, and power. From the privatizing government’s perspective, including
clear environmental requirements in the privatization transaction can facilitate privatization, generate
higher revenues, and avoid delays and future disputes.
In 1992, for example, the government of Peru embarked on the privatization of its biggest mining
company, Centromin Peru. First Boston Bank and a local company, Macroconsult, prepared the
company for privatization, setting a base price of US$340 million and seeking commitments for an
additional US$240 million in investments over three to five years following privatization. The enormous
productive potential of the company generated high interest: 28 companies from several countries,
including Canada, China, Japan, and the United Kingdom, signed up for the auction. A couple of days
before the auction, however, reports appeared in the domestic and international media about possible
large environmental damages. None of the investors submitted proposals during the first call for bids in
April 1994. The company was restructured and sold later, after environmental problems had been
thoroughly addressed.
Source: Adapted from “Environmental Implications of Privatization,” Pollution Management In Focus, World Bank,
No. 5, 1999.
10
Enterprises slated for privatization include large livestock farms, chemical industries, wood and agro-processing
(tobacco, fruits, vegetables, sugarbeets, meat, and grain), textiles, and minerals (aluminum, iron) processing.
11
In Bulgaria, this was done through a Structural Adjustment Facility, which undertook to meet the government's
commitment for cleanup of past operations. It has provided experience on how the government can address similar
hot spots at other facilities that the government intends to privatize and hold to a high standard of environmental
management. The project is expected to take 4.5 years and to cost US$25 million, of which the Bank financed
US$16 million.
13
69.
Another issue pertains to liability for current environmental impacts—that is,
environmental impacts arising from the enterprise’s operations after the transfer of ownership. In
Serbia, the current Law on Privatization may be interpreted as assigning this liability to the new
owner. To ensure that mitigation takes place, privatization documents should include clear
environmental performance objectives. An adequate regulatory capacity is also needed to
encourage enterprises to adopt more environmentally sustainable practices.
70.
A precondition to settling liabilities for remediation and mitigation activities is a credible
assessment of past and current environmental impacts of the enterprise in question. This is
achieved through the implementation of an environmental audit by an independent expert during
the privatization process and the incorporation of the expert’s findings in the prospectus of the
enterprise to be privatized. This procedure is now internationally recognized as due diligence.
The Government of Serbia is now preparing to revise the Law on Privatization to incorporate the
requirement of environmental audits for to-be-privatized enterprises that are environmental
offenders as part of regulatory reform component of the upcoming Sectoral Adjustment Credit.
At the same time, the role of the Serbian Ministry for the Protection of Natural Resources and
Environment (MENR) in the implementation and approval process of environmental audits
should be clarified based on consultations with the ministry. The legal revision should also
clarify the question of who holds liability for past damages and how these will be remediated.
71.
Montenegro is also looking to privatize some of its large enterprises that are
environmental hot spots, including the Aluminum Kombinat. It appears, however, that
environmental concerns are not being taken into account during this process. A collaborative
effort between the Privatization Agency and the Ministry of Environment and Physical Planning
(MEPP) to identify current and past damages and draw up remediation and mitigation plans
would benefit not only the environment but also poor people living in the vicinity of those hot
spots.
2.4
Recommendations
72.
The following actions are recommended to address macroeconomic and environment
linkages:
•
Continue phasing out subsidies on energy and utility prices to induce more-efficient
consumption behavior, prevent inflationary quasi-fiscal deficits, and save scarce public
funds for other priority expenditures, such as education, health, and environmental public
goods. Where necessary, target income transfers to those who cannot afford the increased
energy and utility prices.
•
Promote the development of an environmental regulatory system that better meets the
needs of a market economy, with greater use of market-based instruments of control and
greater transparency and devolvement in the regulatory process. Related to this, develop a
capability to analyze the environmental programs and policies that are not themselves
necessarily focused on the environment. Referred to as strategic environmental analysis,
14
this can contribute to better integration of environmental concerns in economic
policymaking.
•
Require environmental audits of industries to be privatized to clarify past and current
liabilities as part of the privatization process. Support intersectoral cooperation among the
environmental agencies, the Privatization Agency, and city administrations to harmonize
such legal requirements.
15
3.
ENVIRONMENTAL EXPENDITURES AND FINANCING
3.1
Main Issues
73.
There are four main problems with environmental financing in both republics. First,
while the state provides some support to industry for investment in environmental protection (as
it does in almost all transition countries), the basis for this support and the way projects are
selected could be improved in terms of priority setting and accountability.12
74.
Limited public funds should be used to finance investments in public goods areas, such as
municipally owned water, sewage, and district heating utilities, the protection of biodiversity and
natural resources, or the monitoring and prevention of irreversible environmental impacts.
Furthermore, allocation of funds should follow a prioritization process based on benefit-cost
analysis and be carried out in a transparent manner. Some positive signs have been observed in
this area. In Serbia, the recently introduced competitive method to allocate public funds for
environmental projects sets priorities to some extent in that it considers cost-effectiveness and
some measurement of benefits to be achieved. The method also appears transparent. Both
Ministries of Environment need to build capacity to quantitatively assess the benefits of project
proposals for society against the costs.
75.
Second, economic instruments appear to be directed more to generating revenue than to
providing incentives for environmentally responsible behavior. The most striking example is the
1-percent tax on the total investment amount that is levied at the EIA stage. Not being related to
environmental performance in any way, this tax serves as a disincentive for businesses to create
much-needed investments. Such a fee is only justified if it covers no more than the
administrative costs of reviewing the EIA of an investment proposal. If the aim is to induce
industry to pay for the remediation and mitigation of environmental damage, then instead of
having a flat tax, an appropriate environmental management system should be put in place,
accompanied by strong monitoring by the environmental agencies.
76.
As in all western industrial countries and in the more advanced transition countries, there
is an important role for market-based instruments for environmental regulation. An example of
positive use of such instruments in other countries is given in Section 5, dealing with energy air
pollution. Such instruments should provide an incentive to reduce the environmental burden that
is being targeted, they should not result in unreasonable economic costs to the polluter (and
thereby indirectly to society), and they should be easy to enforce. Examples of the use of such
instruments in western industrial and transition countries are given in Annex 3, and a number are
being considered in Serbia and Montenegro.
77.
Another shortfall of the system that should be noted is the extremely low level of fines
for environmentally unfriendly activities and abuse of utility services. In particular, the fines for
dumping waste illegally are in no way a deterrent. The level of electricity stolen through
12
Although both republics stipulate the “polluter pays” principle, in reality this is rarely implemented. Because of a
lack of access to operating or investment capital by industry and the insolvent financial status of many polluters, the
state violates this principle by supporting environmental investment in industry. This is a common feature in all
transition countries, but it needs to be implemented in a more efficient manner and with the recognition that the
support cannot continue indefinitely.
17
unauthorized connections is higher than average in the region, leading to heightened losses of
power utilities. Drastic increases are needed in fines against such abuses.
78.
The third problem is that, as a legacy of an economic system that was based on providing
industry with cheap energy and raw materials, the charges for natural resources do not reflect the
economic costs of extracting and managing them sustainably. This leads to overexploitation of
resources as well as to insufficient capacity to manage them in a sustainable manner. Ideally,
charges should be based on the full costs of extraction and management. In the case of forestry,
management includes, for example, the costs of forest fire and pest management, monitoring,
and enforcement of sustainable logging regulations. In this regard, it is a positive development in
both republics that wood pricing is moving toward competitive pricing, which, if carried out
without collusion and with a floor price that covers the costs just described, should result in
higher stumpage prices. The revenues from this, however, may not be sufficient to provide for
the full management of all public forests, in which case some continued support will be needed
from public funds.
79.
Finally, public-sector expenditures by environmental institutions in both republics appear
to be less than 1 percent of GDP (Annex 3). This is not sufficient to cover basic monitoring and
enforcement functions of government. Furthermore, the total amount of expenditures is believed
to be only slightly above this figure, given overall government budget cuts and financial
difficulties faced by private enterprises.13 This places Serbia and Montenegro significantly below
most transition countries, where annual environmental expenditures have averaged about 2
percent of GDP. Harmonization with EU environmental legislation will necessitate even higher
expenditures. Based on the experience of recent EU members, this may cost about US$1,500 per
person per year over 15 years. Again, based on the experience of other countries, only about 10–
15 percent of the financing to cover this cost is likely to come from the EU in the form of grants.
The rest has to be found through internal resources, which clearly points to a need for substantial
contributions from the private sector.14
80.
The financing of public environmental expenditures previously came from earmarked
taxes and charges. But now all such charges go to the general budget, from which allocations are
made to the environment spending agencies. Those responsible for environmental expenditures
complain that this has reduced the funds available and want the old system reintroduced.
Although their argument has some reason, this is not a move that the Bank would support. The
case against earmarking is that expenditures should be related to the outcomes that have to be
achieved and not to the sources of funds, and that having earmarked funds results in reduced
overall efficiency in the national system of public expenditure. The one exception to this rule is
when the environmental charge is specifically for a service (such as delivery of water or
collection of waste). In that case, the amount collected should be kept for the purpose of
providing the service and not go to the general budget. This cannot be argued, however, for
emissions charges or taxes levied on products (such as gasoline), even if the charge for
environmental reasons.
13
It should be noted that this estimate does not include local environmental funds on which the authors of this report
did not have sufficient information. The amounts involved, though known to be small, are considered critical for
some public environmental expenditure.
14
Another source of financing for local communities will be the 5 percent of privatization proceeds, which by law
have to be transferred to the local administration that has jurisdiction over the enterprise. These funds are to
contribute to infrastructure and environmental investments.
18
3.2
Recommendations
81.
The recommendations on environmental expenditures and financing are as follows:
•
Focus public environmental expenditures on public goods that the private sector is
unlikely to fund sufficiently, such as environmental monitoring, biodiversity
conservation, and prevention of irreversible environmental impacts. In a transparent
manner, allocate public funds to priority actions and projects that are cost-effective or
have the highest benefit-cost ratios.
•
Replace the “1-percent environment tax” levied on new investments that pass the EIA
with a fee that covers the administrative costs of processing the EIA of an investment.
19
4. INSTITUTIONAL FRAMEWORK FOR ENVIRONMENTAL
MANAGEMENT
4.1
Main Issues
82.
Serbia and Montenegro inherited a fragmented and in many ways inconsistent legal and
institutional framework, in which the demarcation of functions between the federal and republiclevel government environmental institutions as well as among various line agencies and
municipalities was often unclear. Weak monitoring and enforcement of environmental standards
and regulations in Serbia and Montenegro can be traced to limited mandates, insufficient staffing
(number and capacity), lack of modern equipment in inspection departments, rather low levels of
fees and fines combined with low collection rates, lengthy court procedures, nonexistent or
incomplete emissions data from enterprises, and the difficult economic situation of many
enterprises. In both republics, many industries operate without an environmental permit and do
not comply with environmental standards. Although environmental agencies carry out regular
inspections, which may lead to administrative or legal charges, the relatively low risk of being
caught, combined with the modest amount of standard fines and their low collection rate,
diminish the incentive for enterprises to comply with the law, given their often very difficult
financial situation.
4.2
Key Reforms to the System of Regulation
83.
Institutional and legal framework. Serbia and Montenegro’s institutional and legal
framework is currently in a flux as a result of the ongoing, gradual shift of legislative and
executive powers from the federal level to the republics and the revision of various laws in
parallel with the ongoing economic transition. In June 2002, the Serbian government upgraded
the environmental authority from the level of a directorate to a ministry. Currently, the Serbian
Parliament is reviewing a new Law on Environmental Protection System. The law is
comprehensive and ambitious: its objectives are to develop a consistent and modern legal and
institutional system for environmental protection that is harmonized with the EU’s framework
and that will improve horizontal and vertical cooperation and raise responsibility and efficiency.
The Montenegrin Law was issued in 1996, and according to the Ministry of Environment and
Physical Planning, all recently issued laws and bylaws are compatible with relevant EU
legislation. In Serbia, it is proposed that an Environmental Protection Agency (EPA) be
established in 2004 to implement the new law. There is also some interest in Montenegro in
establishing an EPA.
84.
System of environmental impact assessments. The number of EIAs increased from an
average of 50–60 per year to about 600 in 2000 and more than 1,300 in 2001. However, the EIA
system is plagued by shortcomings in both republics—notably, an overly general list of activities
subject to mandatory EIA procedures, with no cost or size thresholds and no distinction based on
type of enterprise, nor with any consideration of magnitude or scale of impact. In addition, the
capacity of environmental authorities to screen projects, review EIAs, and stipulate and enforce
conditions and mitigation plans is very weak due to staff shortages and lack of funds. Further,
local authorities often issue permits despite missing or incomplete EIAs, so that a large number
of activities or projects start up before adequate mitigation measures are put in place. In the
current setup, however, there are considerable fiscal interests in the EIA procedure, since the
EIA regulation requires a fee of 1 percent of the total investment costs of a project. In 2001, this
20
generated revenues of around US$183,000 for the Republic of Serbia and is thus an important
source of revenue, which poses the risk that environmental authorities might be held captive to a
suboptimal or dysfunctional system. To the extent that the fee is a charge for the administrative
services related to the processing of an EIA it is justified; otherwise it should be scaled down
(see Section 3).
85.
In addition to the system of EIA, there is a need for environmental considerations to be
included in the assessment of major policy reforms outside “the environmental sector.” These
include changes to land use, such as allowing the development of a tourism facility on previously
virgin land, opening up areas for urban use or reuse, changing trade policy, and so on. In such
cases the appropriate tool is a strategic environmental assessment, which should be prepared by
an intersectoral group that includes representatives from the Ministries of Environment as well as
Finance and the relevant line ministries. The need for this was underscored in Section 2. The
capacity to carry out such assessments, however, needs to be developed.
86.
Public disclosure and participation. Civil society, the private business sector, and
nongovernmental organizations (NGOs) are weak. Within the business sector, environmental
issues are not high on the agenda, as environmental business associations and committees are
just being established. At the moment there is a lack of private-sector participation in different
economic sectors related to the environment, particularly waste management, water supply and
sanitation in large cities, and forestry and national parks activities. Local NGO involvement is
limited mainly to awareness raising, environmental education, and information dissemination,
although a large number of NGOs want to be more involved in environmental protection
activities. NGOs identify isolation in the 1990s, lack of funds, lack of adequate technical
equipment and staff, and an inadequate legal framework as the reasons for the underdevelopment
of the NGO community.
87.
Harmonization with EU directives. Central and local environmental institutions in both
republics are keen to harmonize environmental legislation with the EU acquis.15 In Serbia, with
Finnish and other assistance, the environmental law has been revised, which is much in line with
the Integrated Pollution Prevention and Control directive, and work has begun to align relevant
laws with the EU Directive on Environmental Impact Assessment and Public Access to
Information. The MENR would also like to harmonize with EU directives that deal with water
quality and waste management. Experience in EU and EU candidate countries shows that it is
quite costly to implement these directives (Section 3), which implies that transition to full
implementation will have to be undertaken over an extended period of time and that only those
acquis-related actions that are of the highest priority will be feasible in the immediate future.
4.3
Recommendations
88.
The following actions are recommended to address institutional and legal problems.
•
Environmental impact assessment. Amend EIA regulations and procedures by
introducing thresholds, shortening the list of projects or activities for which an EIA is
required, improving cooperation with municipalities, and introducing strategic
15
Acquis (communitaire) may be informally defined as the body of European Community legislation that would-be
EU member countries have to incorporate into their national legislation and implement.
21
environmental assessment for new policies and programs with considerable potential
environmental impact. Eliminate or at least reduce the “environment tax,” which does not
provide an incentive for better environmental behavior but instead constitutes a
disincentive for new investment.
•
Environmental institutions. Clarify demarcation of competencies between ministries and
between the federal, republican, and municipal levels; develop or strengthen
interministerial coordination mechanisms and institutions; establish an Environmental
Protection Agency in Serbia (proposed for 2004); and strengthen staff capacity through
training. As regional capacity varies considerably, some regions need considerable
institutional strengthening if they are to fulfill their new roles.
•
Environmental monitoring. Adapt the monitoring system to create a comprehensive
environmental information system, and identify investment needs for new equipment and
training needs.
•
Compliance plans and remediation programs for enterprises. In line with existing
legislation, develop realistic compliance plans and remediation programs for the most
polluting enterprises, including credible sanction mechanisms, such as sufficiently high
fines for noncompliance.
•
Environmental action plans. Seek donor funding for the organization of a stakeholder
consultation seminar focused on prioritization of actions and identification of financial
resources to carry them out. In addition, prepare sector strategies for high-priority policy
areas, such as biodiversity conservation, climate change mitigation, forestry, and waste
management (in Montenegro). These activities would constitute, in the spirit of a
National Environmental Action Plan (NEAP), an important follow-up to this report and
other strategic environmental documents prepared for Serbia and Montenegro. A full
NEAP, however, starting from scratch in identifying and developing environmental
priorities, is not necessary at this stage, given the work that has already been done on
these issues.
•
Environmental information, awareness, and public participation. Take a more proactive
position in providing properly formatted, digestible environmental information to the
general public, improve access to environmental information, create a legal framework,
and encourage active public participation in the environmental decisionmaking process.
•
Environmental legislation. Complete and adapt the existing legal framework, with a
focus on compliance and enforcement, harmonizing its key elements with relevant EU
Directives where practical, and paying special attention to enforcement capacity,
compliance costs, and monitoring requirements.
•
Environmental inspection and enforcement. Extend mandates, train and increase staff,
and upgrade equipment.
•
International environmental policy. Clarify institutional responsibilities between federal
and republican levels regarding the global environment; initiate the process for
ratification of priority multilateral environmental agreements (mainly the Danube River
22
Protection Convention, the Convention on the Protection and Use of Transboundary
Watercourses and International Lakes, and the Aarhus Convention on Access to
Information, Public Participation and Access to Justice in Environmental Matters); and
intensify work on international regulatory instruments for subregional, transboundary issues,
which due to the breakup of the former Yugoslavia are no longer of domestic nature and
thus lack an adequate regulatory framework.
•
Cooperation with business sector and NGOs. Strengthen cooperation with NGOs and
with the business sector through ongoing planned harmonization of environmental
legislation with EU directives, ISO 14000 certification, and development of compliance
plans and remediation programs for enterprises. More generally, create a better business
environment and incentives for private-sector participation in environmental protection
and natural resources management.
23
5.
ENERGY AND AIR POLLUTION
5.1
Main Issues
89.
Energy intensity per unit of GDP increased by 60 percent during the 1990s due to the
decline in GDP and low energy prices. This is remarkably high; a few transition economies have
experienced decreases in intensity, and some have had increases, but rarely of this magnitude.
One reason is that current levels of energy prices do not provide any incentive to conserve. The
burning of increasingly poorer quality coal and the lack of financing to maintain and upgrade
decaying and inefficient energy infrastructure have also contributed to higher energy intensity
levels. The deterioration of energy generation technology and of the distribution system, which
caused large losses, is another main problem. These factors have a positive side as well,
however, which is that they offer enormous scope for improvements in energy efficiency.
90.
Electricity generation. A significant part of SO2 and NOx air pollution comes from
energy generation plants, which run on poor-quality lignite coal. The situation is particularly
problematic in the Kolubara-Obrenovac Corridor in Serbia, where 3,100 megawatts of lignite
power plants as well as the mines from which the fuel is obtained are located. Poor air quality in
the 26-mile corridor has resulted in high levels of respiratory problems in the region. The power
plants there also have harmful impact on the groundwater quality through leachate from their two
ash landfills. In Montenegro, MEPP’s Environmental Status Report (2000) states that in the area
of Pljevlja, the site of a thermal plant in an enclosed valley with humid weather and an absence
of wind two-thirds of the year, the frequency of respiratory diseases is markedly above the
average for the Republic. The Montenegro Air Quality Report (2001, p. 24) also states that “bad
air quality causes some health problems, such as increased bronchial and laryngeal diseases,
especially in the industrial regions of Bor and Pancevo of Serbia.”16
91.
Transport. Air pollution problems are of particular concern in Serbia and Montenegro’s
urban areas. In addition to power plants, vehicle emissions contribute an increasing proportion of
total emissions, and the continued use of leaded fuel and high sulfur diesel for transportation
needs is having an impact on health. The vehicle pool in Serbia and Montenegro consists to a
large extent of old cars that run on diesel gasoline. This is only likely to change in the medium
term, however, when the average income level increases.
5.2
Key Policy Reforms and Actions in the Energy Sector
92.
Lead emissions are particularly dangerous, for even in low concentrations they can lead
to mental development problems in children and affect the blood pressure of adults. The benefits
of making the shift to unleaded gasoline have been found to be far in excess of the costs in so
many countries that it is not necessary for Serbia and Montenegro to undertake such an
analysis.17 Almost all transition economies in the region have now moved to phasing out leaded
fuel, with the main difference being the time they take to do it.
16
In addition to air pollution, ash handling at coal power plants in the Federal Republic of Yugoslavia poses a threat
to groundwater and rivers because of poorly constructed storage facilities. The health impacts of air pollution are
also discussed in section 2.
17
See M. Lovei, 1998. “Phasing Out Lead: Worldwide Experience and Policy Implications,” World Bank; M. Lovei
(ed.). 1997. “Phasing Out the Lead from Gasoline in Central and Eastern Europe,” World Bank.
25
93.
Financing problems have limited the governments’ ability to ban leaded gasoline, as it
requires that domestic refineries be upgraded. By using economic instruments and carefully
targeted support programs for industry, however, the phaseout of lead can be achieved in Serbia
and Montenegro. Currently the price difference between leaded and unleaded gasoline is so small
as to have an insignificant effect on behavior. Experience elsewhere has shown the success of a
combination of lower taxes for unleaded than leaded fuel, targets for refineries to switch
production to unleaded gasoline (with any refinery that exceeds its target being able to sell the
excess reduction to another that cannot meet its target), and support to the refinery sector and to
consumers in adapting to the changed fuel demands. Typically this is combined with some
technical and financial assistance to the refineries (possibly out of the revenues from pollution or
other environmental charges) to achieve phase out leaded fuel over 10 years. Box 4 describes
how Slovakia achieved the same reduction.
94.
In both republics, the poor financial situation in the energy sector in general is a result of
low tariffs for energy that until recently did not cover operation costs, let alone maintenance or
capital recovery costs. In Serbia, the deteriorating energy sector has resulted in increased
dependence on imported energy. Both Serbian and Montenegrin governments, however, have
increased energy prices considerably and are expected to reach economic levels by 2005. As
noted in Section 2, phasing out subsidies will provide an incentive for reduced energy
consumption and prudent substitutions between fuels. Serbia is also in the process of establishing
an Energy Agency.
95.
The challenge related to price increases will be to ensure that the poor, who have limited
access to capital but some of the highest energy expenditures relative to income, are not overly
burdened by price changes. A related problem is a possible switch by the poor to more polluting
coal or to illegally logged fuelwood, contributing to forest degradation.
96.
The Government of Serbia also plans to address the problem of refinery upgrading to
improve the fuel quality mix. The first phase will focus on repairs to plants to improve operating
capacity, while the second phase will concentrate on higher quality gasoline and diesel output.
26
Box 4: Phasing Out Leaded Gasoline in the Slovak Republic
Lead was used heavily in Slovakia (part of former Czechoslovakia) until the 1980s. The lead content of
gasoline was gradually reduced from over 0.7g/I to 0.4g/I in 1983, to 0.25g/I in 1985, and then to 0.15g/I
in 1989, followed by the total phaseout by the end of 1994. The market share of unleaded gasoline
increased from 6 percent in 1992 to 100 percent in 1995.
Besides health considerations about the impacts of lead, another—mainly supply-driven—factor
contributed to the drastic change in the lead use in gasoline. As a result of a technical upgrade
undertaken in response to increasing quality requirements of its export markets, Slovnaft, the only
refinery of the Slovak Republic, developed an overcapacity in the production of high-octane gasoline
components by the early 1990s. About 70 percent of the vehicles in the country, however, were designed
to use leaded gasoline, manufactured with soft engine valve seats, and vehicle turnover was very slow.
In order to resolve the disparity between supply and demand, Slovnaft developed a fuel additive that
enabled all motorists to use unleaded gasoline by providing the necessary lubrication to the soft engine
valves in old cars. The additive has been marketed under the trade name ANABEX-99 as a universal
fuel additive, which can be used in cars with or without catalytic converters.
The total cost of phasing out lead from gasoline production, including the annualized investment cost of
the new isomerization and lubricant production units, the development of new additive, and the
increased operation cost of unleaded gasoline, was estimated at US$0.02 per liter of gasoline.
Slovnaft used its control over the gasoline distribution network to market the new brands. A
differentiated pricing policy in favor of unleaded gasoline and a strong public information campaign
contributed to the success of the total lead phaseout program and the acceptance of new gasoline by
consumers.
Key factors of success in eliminating lead from gasoline in the Slovak Republic were:
•
•
•
•
•
•
•
The commitment to environmental improvement in Slovakia by all interested parties
Tax incentives for the production and consumption of unleaded gas
General advances in environmental understanding and changes in consumers’ values and mind
set
A long-term strategy for the modernization of gasoline production technologies
Participation of a highly qualified, expert team in the Research Center of Slovnaft Refinery
Highly motivated management teams in the Slovnaft and Benzinol companies
Relatively centralized and easily controlled gasoline distribution network
Source: M. Lovei, 1998. “Phasing Out Lead: Worldwide Experience and Policy Implications,” World Bank; M.
Lovei (ed.). 1997. “Phasing Out the Lead from Gasoline in Central and Eastern Europe,” World Bank.
5.3
Recommendations
97.
Recommendations to address the problems facing Serbia and Montenegro’s energy sector
and their impact on health and the environment are as follows:
•
Continue fuel-pricing reforms. An important action that can be taken to reduce energy
intensity and thus air pollution (including greenhouse gas (GHG) emissions) is to
continue to phase out subsidies on prices of all fuels so that they are increased to levels
that better reflect the economic cost of production and environmental externalities of
supplying these fuels to Serbia and Montenegro’s energy system. This policy measure
27
would also reduce reliance on energy imports (as demand would likely fall) and fiscal
deficits (to the extent that subsidies and energy-related imports are reduced). Greater
revenues in the energy sector would help to fund infrastructure upgrading and provide
incentives for substitution between fuels and for switching away from relatively
expensive electricity-based heat to more environmentally friendly district heat and natural
gas. In terms of the environment, air pollution’s negative impact on health would be
reduced.
•
Develop energy efficiency strategies. Both Serbia and Montenegro are working to
complete energy strategies, and an energy efficiency agency has been established in
Serbia. In addition to price reforms, energy efficiency programs can help reduce
consumption levels by promoting new energy-efficient and heat-saving technologies as
well as more traditional measures, such as installing insulation and window caulking to
prevent heat loss. Eco-funds aimed at energy efficiency improvements by the private
sector and individual homeowners, possibly supported by a debt equity swap from donor
countries, should be explored when developing strategies. Global Environment Facility
(GEF) resources may also be used to remove barriers to the introduction of innovative
technologies that have global benefits in the form of climate change mitigation.
•
Explore the potential for and feasibility of energy generation from renewable sources,
such as small hydropower stations or geothermal resources. Both Serbia and Montenegro
have conditions that may lend themselves to enhanced use of renewable energy sources
and may complement efforts to increase energy efficiency. Before investment can be
done, feasibility studies need to be carried out.
•
Address heavy air pollution from power generation in selected areas. Steps need to be
taken to address air pollution and ash problems in the Kolubara-Obrenovac Corridor, at
the Pljevlja coal plant, as well as particulate problems and SO2 emissions from the
Kostalac power plant—all of which are having a high impact on health and the
environment. Some of these assets are being upgraded with donor funding assistance, but
some of the key environmental issues have yet to be addressed, including improvements
to electrostatic precipitators and sulfur removal. An action plan needs to be developed to
address the strategic and operational issues and to set priorities on investment needs. The
analysis should consider emissions, ash handling, coal mine operation, and the potential
for reducing air pollution by establishing district heating networks that use heat from
power plants.
•
Create an independent regulator. An independent energy regulator is needed to ensure
that prices under the energy reforms are set fairly. Such regulation will help energy
companies ensure that they are able to collect sufficient revenues to cover operation and
maintenance costs and provide adequate internal cash generation to support new
investments.
•
Examine options for cleaner coal technologies. Lignite is expected to remain the primary
source of energy supply in Serbia and Montenegro for some time to come. Reducing the
impact on the environment by introducing new technologies (fluidized coal bed
combustion) or through substitution of fuels should be developed. Pricing reforms in the
28
energy sector will help, but plans still need to be developed to explore which
technologies are most practical and affordable for Serbia and Montenegro.
•
Introduce cleaner transport fuels. Significant environmental, health, and tourism benefits
are possible if Serbia and Montenegro can convert to unleaded fuel. The governments
should seriously consider the option of eliminating fuel subsidies and opening up gas
distribution networks to foreign investors to help bring unleaded fuel to Serbia and
Montenegro, which may be the most cost-effective approach. In the longer term, the
governments should take steps to harmonize with EU environmental standards and
should introduce stricter emissions standards to ensure an environmentally friendly fleet
of new vehicles.
•
Undertake an inventory of GHGs. There is a need to create a more streamlined and
complementary strategy to address the problem of increased GHG emissions. Along with
this, a stronger commitment to contribute to solving the problem of climate change is
required on behalf of both Serbia and Montenegro. To start with, an inventory of the
current level of GHGs should be prepared, high-polluting sectors should be identified,
and potential future scenarios should be drawn up, given future demand and different
abatement options.
29
6.
WATER SUPPLY AND SANITATION
6.1
Main Issues
98.
Household surveys show that, overall, around 84 percent of the people in Serbia and
Montenegro are served by piped drinking water supplies delivered to their homes. Urban and
rural differences in coverage are notable, however (97 versus 68 percent). And these high figures
belie the fact that residents, particularly in rural areas, increasingly receive inadequately treated
drinking water supplies due to the absence of a functioning municipal system. As a result of 10
years of little maintenance and no investments in the sector, most water supply networks have
difficulty assuring a regular supply, and there are widespread water quality problems, especially
in Serbia. The percentage of drinking water samples that do not meet the required standards is at
50 percent in Serbia and around 15–20 percent in most Montenegrin cities (although in
Podgorica, it is 2.8 percent).
99.
According to official statistics, access to sanitation services (a sewage system or septic
tank) in Serbia and Montenegro over the past decade has increased from 66 to 88 percent. (The
rest use pit latrines.) But more disaggregated figures show that there are serious problems in
Serbia. Construction of sewage systems has lagged behind water supply development, and there
are distinct regional differences in sanitation coverage. It is estimated that only 15 percent of
treatment plants operate satisfactorily, resulting in significant groundwater and surface water
pollution. Bacteriological pollution has been found in small rivers and channels from municipal
and industrial wastewater discharge. In Montenegro, only 60 percent of residents are connected
to the public sewerage system, with large regional differences. Wastewater treatment plants are
heavily overburdened and must often discharge untreated sewage. Water quality problems at
coastal beaches are of particular concern, given the impact on health, the environment, and
tourism. In small towns and rural settlements, sewage systems are nonexistent, with around 28
percent of the population using septic tanks and absorbing wells, the contents of which are not
always disposed of properly.
100. Water supply and sewage system infrastructure, including disinfection systems
(chlorination), is deteriorating, which has contributed to a decline in the quality of piped drinking
water supplies as well as ambient water quality. Since the source of water in Montenegro is
relatively pristine, problems with contaminated water supplies are more prominent in Serbia,
where 29 percent of samples from piped systems in 2001 did not meet the physical/chemical or
bacteriological standards.
101. Municipal water and sanitation utilities are in serious financial trouble, preventing the
initiation of rehabilitation works that are urgently need to prevent the collapse of services. The
tariff system for water and wastewater in Serbia and Montenegro is based on a cost-plus scheme,
with cross-subsidies for the population coming from industries. The decline of Serbia and
Montenegro’s industries has made cross-subsidies impossible, and current water utility revenues
do not cover operational costs. Tariffs were raised in December 2001 in Podgorica, Montenegro,
by an average 24 percent, but they are still below operating costs.
102. In addition to capital deterioration leading to significant physical losses of the order of 50
percent or more and limitations in water treatment and sewerage, the system is plagued by high
per capita water consumption (reaching 300 lpc/d, whereas the average in Europe is 180–200
31
lpc/d), collection rates that fall below 50 percent, lack of demand management, and misuse of
water supply for nonhousehold activities, such as irrigation in peripheral areas. In Montenegro,
water supply and wastewater treatment are not sufficient to meet summertime needs, when
tourists more than double the area’s population to over 500,000.
6.2
Key Policy Reforms and Actions in the Water Sector
103. As noted, charges for water supply and for waste and wastewater collection were raised
significantly in the past year in Podgorica, Montenegro. This should be replicated in other
Montenegrin cities and in Serbia. Increased tariffs have several benefits for the environment:
First, this will reduce per capita water consumption to levels that are more in line with West
European standards. (For this to be successful, individual users will need to be metered or at least
have some relationship between what they pay and what they consume.) Second, increased
revenues will allow utilities to carry out maintenance activities, remedying physical losses as
well as sewerage leakages. Increased revenues will also decrease the need for subsidies and
make funds available for expanding services to underserved sections of the society, such as the
urban and rural poor. Increased drinking water quality and improved sanitation will reduce costs
incurred by the society as a result of diseases associated with water. Funds saved from subsidies
may also be channeled to extending services to areas with high tourism potential, notably the
Adriatic coast of Montenegro, which is expected to contribute substantially to the Montenegrin
economy.
6.3
Recommendations
104. The following recommendations try to address some of the most critical problems facing
the water supply and wastewater sectors:
•
Identify ways to increase access to clean water and sanitation in urban slums that house
the poor, including Roma, IDPs, and refugees. Some further discussion of these measures
is provided in Annex 7.
•
Introduce metering, undertake pricing reforms, and improve collection rates to address
financial problems. Increase tariffs in the water supply and wastewater sector to cover
operation and maintenance costs, including depreciation. Also, it is important to protect
the poor and provide adequate subsidies to those who cannot afford the increase.
•
Reduce losses through improved efficiency. Investments in the water sector should focus
on maximizing the efficiency of existing systems, with a first step directed toward
reducing the large systemic losses (often over 30–50 percent).
•
Introduce more fundamental reforms in larger cities. Incorporate utilities and introduce a
regulatory framework that limits political interference. Water supply and wastewater
utilities in large cities with greater opportunity for financial variability need to separate
themselves from city budgets and control and to institute performance-based contracts for
service, eventually contracting out large rehabilitation and maintenance jobs and
facilitating the development of a stronger private support industry to provide better
services.
32
•
Focus government expenditure on medium-sized cities and rural areas, which face the
greatest problems. These areas have limited access to financial resources, are not
expected to attract private-sector interest immediately, and will likely continue to operate
under municipal control. While a list of priority projects in small town and rural water
supply systems exists, a detailed assessment of the state of existing facilities, informal
supply systems, and private wells (including water quality) should be undertaken in both
republics.
33
7.
WASTE MANAGEMENT
7.1
Main Issues
105. Serbia and Montenegro’s waste management system is deteriorating. In Serbia, only
about 50 percent of solid waste is collected, 63 percent of which is from households and 20
percent from industry. Waste is not collected in rural regions and is either burned or disposed of
in legal or illegal waste disposal sites by residents. Approximately 170 official landfills, none
meeting sanitary landfill standards, serve municipalities in Serbia—too many for proper
monitoring and control.
106. In Montenegro, 42 percent of solid waste is collected. There are about 20 registered
landfills for municipal solid waste, but none is properly constructed or operated. A number of
industries produce hazardous waste, which, as in Serbia, is not disposed of correctly. Current
facilities for waste disposal in both republics are inadequate and under pressure. None of the
landfills incorporates gas emission and leachate collection systems, contributing to GHG
emissions and posing a potential threat to groundwater supplies and thus health. The proportion
of waste that is stored in poorly controlled sites is increasing, as is the amount of waste generated
each year, including hazardous waste. Several donor-funded feasibility studies have been carried
out in this area, including one on hazardous waste management. There is now a need to develop
a strategy for waste management for Serbia and Montenegro.
107. In both republics, solid waste collection and disposal are the responsibility of local public
utility companies, which face a number of interrelated problems. The institutional organization
of Serbia and Montenegro’s waste management sector is characterized by an unclear division of
responsibilities among the federal, republic, and local levels of government, making long-range
planning and rationalization of operations difficult. Solid waste management legislation exists,
notably the special Law on Waste Handling, which identifies wastes that can be recycled. But
implementation and enforcement are challenging. In Serbia, a Recycling Agency is in place, but
many of the regulatory bylaws for enforcement are yet to be developed. Low tariff collection
rates (ranging from 15 to 70 percent in different municipalities) are a major barrier to
modernizing waste management practices. Fines for violating waste laws exist, but they are not
high enough to ensure compliance with the law. A lack of revenues makes it difficult for waste
management utilities to cover operation and equipment maintenance costs, let alone invest in
modernizing collection equipment and disposal facilities or develop waste separation and
recycling programs.
108. An especially significant problem for the Republic is hazardous waste management.
About 260,000 tons of hazardous waste is generated per year. Of this, 9,600 tons are biohazardous wastes, half of which originates in hospitals. No permanent storage or disposal
facilities exist for hazardous waste, leading to on-site storage of the waste or disposal in
municipal landfills. Some hazardous waste has been exported to other countries for incineration.
Lack of proper regulation for hazardous waste transportation frequently leads to accidents,
threatening public health.
35
7.2
Key Reforms and Actions in Solid Waste Management
109. A Strategic Framework for Waste Management prepared for Serbia with Japanese aid
proposes to increase fines, develop a packaging refund system, establish a system for
manufacturing liability, and restructure public utility companies. In the longer term (2007–15),
the strategic framework proposes to introduce a transferable license system for hazardous waste
and to privatize solid waste management systems. Information on Montenegro’s solid waste
management sector is limited, and the republic has yet to develop a strategy. An important
component of any strategy would exploit economies of scale. This is best done by taking a
regional approach, which promotes fewer landfills that serve a wider region and that can be
better monitored and controlled. (See Box 5.)
Box 5: A Regional Approach to Solid Waste Management in Bosnia and Herzegovina
The World Bank has recently approved a credit of US$14.3 million for improving solid waste
management for several localities (Tuzla, Banja Luka, and Mostar) in Bosnia and Herzegovina. The main
idea of the project is to consolidate waste disposal in a few regional landfills instead of a large number of
smaller-scale waste disposal sites.
Past practice of waste management in the country was to create a landfill for each locality. However,
municipalities with limited financial capacities were not in a position to build and maintain waste disposal
sites at levels dictated by technical, environmental, and sanitary requirements. As an alternative, the
project will create regional landfills that can serve several municipalities. It was clear that formation of
such landfills through cooperation between different numerous municipalities in Bosnia and Herzegovina
was necessary in order to afford improved sanitary landfill standards. The approach takes advantage of
economies of scale: the cost of maintaining a regional landfill is lower than the sum of the costs of
maintaining individual smaller landfills at the same standards. It was estimated that landfills are
affordable and allow cost recovery only when daily waste input is in excess of 200–300 tons. Lower costs
are likely to induce more budget-constrained municipalities to invest in upgrading solid waste
management, which is a acute problem in Bosnia and Herzegovina and in the Balkans in general.
110. With regard to hazardous waste, the Serbian Ministry of Natural Resources and
Environmental Protection considers it a high priority to establish a properly managed central
landfill for hazardous waste and put in place modern regulations concerning the transportation of
such waste.
7.3
Recommendations
111.
The following actions are recommended on waste management:
•
Address the hazardous waste management problem. Assess options for hazardous waste
disposal, including potential sites. Existing regulations on hazardous waste transportation
need to be revised, and there is a need for capacity building for enforcement. Where
feasible, address hazardous waste management at the source.
•
Reform waste tariff structures and privatize some waste management functions.
Differentiated tariff structures for waste disposal and collection, fines for nonpayment,
and stronger enforcement through the law are needed to increase collection rates to make
the waste sector financially viable and capable of investing in new equipment and
36
modern facilities. Greater involvement of the private sector in waste management (for
example, in collecting waste or investing in the development of recycling capacity) could
help make the sector more efficient.
•
Develop and implement waste strategies. Serbia should begin to implement the
recommendations of its recently approved waste management strategy. Montenegro
should develop a waste management strategy similar to Serbia’s. The strategy should
examine the potential for establishing a regional landfill to reduce the number of disposal
sites, while considering existing economic and institutional constraints. Studies to assess
the potential for recycling should also be undertaken.
37
8.
COASTAL ZONE MANAGEMENT IN MONTENEGRO
8.1
Main Issues
112. The Montenegrin coastal zone has outstanding environmental and cultural value. Due to
its isolation and strict land use planning during the socialist period, its environment is still largely
intact. It is, however, increasingly threatened by market pressures for further tourism
development, by illegal construction, and by already overburdened municipal services, like water
supply and wastewater and solid waste collection and disposal. Citizens with resources now feel
free to build where they want, especially along the coast. Although no accurate figures are
available, estimates are that 30,000 housing units have been built illegally in the coastal zone
over the last 10 years. What is not known is how many of these areas had the appropriate zoning
but the builders did not pay the necessary fees and taxes, or how many houses were improperly
sited and may harm the environment. (A prime example is the development of part of a highly
scenic island opposite Budva.) Addressing this problem will require first a reliable census of
such structures.
113. It is certain that if it is not checked, unplanned and illegal development will continue, in
which case the government goal of developing tourism as one of the engines of growth will be
seriously compromised. Tourism is certainly the dominant industry in the coastal zone. The
sector receives strong government support through the Ministry of Tourism, which undertakes
considerable planning, both physical and economic. The goal for 2020 is 22 million visitornights—four times the current level. While the Ministry of Tourism gives considerable stress to
environmental protection and appears ready to balance commercial gain with the need to
preserve the very scenic coastal environment, its ability to do so can be questioned in the light of
the building that is currently taking place.
8.2
Key Reforms in Coastal Zone Management
114. Reforms are needed so that a better balance is reached between the development of
tourism and the preservation of the environment on which it depends. Most of all this requires
political commitment, so that the authorities will take the necessary action against those erecting
illegal dwellings and not observing the proper planning regulations. This has to be supported by
a coastal zone management (CZM) policy that states clearly what the government aims are,
where the government intends to promote development and any limitations to that development,
and what infrastructure it will provide. The Government of Montenegro is heading in this
direction, although it has not yet prepared a full policy. This has to be supported by improved
coordination both horizontally (between national ministries and agencies) and vertically
(between the national, municipality, and town levels). Procedures for planning and permitting of
development that would allow wider consultation and expand the role of public participation in
decisionmaking have to be introduced.
115.
The role of the existing Coastal Zone Management Agency (a public enterprise under
the Ministry of Marine Affairs) could be expanded beyond its current functions, which relate
mainly to leasing of beach space, so that this to becomes the main body responsible for concrete
actions under a broader CZM program, taking advantage of its skilled staff and knowledge base.
39
Specific institutional arrangements for counteracting illegal construction may be called for, as
well as legal instruments. On the international cooperation side, the Socialist Federal Republic
of Yugoslavia signed the Barcelona Convention for the Protection of the Marine Environment
and the Coastal Region of the Mediterranean (1976). Serbia and Montenegro needs to ratify the
convention to be able to participate in and benefit from activities under it.
8.3
Recommendations
116.
The following actions are recommended as a matter of urgency:
•
Prepare a coastal zone management policy. An overarching policy is needed, in order to
integrate all sectoral plans, including documents for infrastructure, environmental and
landscape protection, and municipal services development.
•
Strengthen institutional coordination. Institutions must improve the sharing of
information, better coordinate their actions, increase cross-sectoral review of procedures
for planning and permitting of development, and increase the role of public participation
in decisionmaking. Expanding the responsibilities of the existing Coastal Zone
Management Agency would help in this regard.
•
Raise public awareness. Urgent attention should be given to a publicity program to
inform the public about the state of the coastal environment, current threats, and the steps
needed to ensure environmentally sustainable development of the coastal zone.
40
9.
FORESTRY
9.1
Main Issues
117. Forests cover 28 percent of Serbia and Montenegro’s territory and represent one of most
important natural resources, particularly for Montenegro, where they cover 543,000 hectares (39
percent of the territory). More than half of the forests (57 percent) are owned by the public.
Forests owned by the private sector are often fragmented and rarely managed sustainably.18
118. Forest quality and growth are threatened by many factors, including overharvesting,
illegal logging, forest fires, and pest infestations. Although statistics suggest that the estimated
annual increment of the growing stock exceeds the annual cut by more than 100 percent, this
does not imply sustainable management at all forest sites. Due to a relatively low road density in
forest areas, accessible areas are frequently overharvested, while other areas are harvested with
very low intensity. Inaccessible areas are often more prone to forest fires and insect infestations.
During the 1990s, the efficiency and level of forest monitoring and control decreased
considerably, and illegal logging increased. Excessiv cutting of trees in mountainous parts of
Montenegro and Serbia is in part responsible for increased erosion and flood occurrence. In
Montenegro, the Tara and Lim basins were identified in the stakeholer workshop as particularly
vulnerable areas.
119. Existing institutional capacities are weak, especially with regard to enforcement of
forestry standards and regulations. Forest authorities need to develop new sustainable forest
strategies to improve existing legislation, to harmonize it with EU requirements, and to create a
Geographic Information System (GIS) as the basis for better forest management.
120. Non-wood products of the forests are important both in terms of traditional cultural
values and as income sources. These products include snails, frogs, herbs and spices,
mushrooms, wild fruits, game meat, and Christmas trees planted in forest openings and
firebreaks. Harvesting for commercial use of these non-timber forest products is organized
through a permit system and monitored in Serbia by the independent Institute for the Protection
of Nature, while in Montenegro the Institute for Nature Protection is the responsible entity. The
main problem here is poaching, and protective regulations have been instituted to counter this.
Nevertheless, declines in official numbers of animals being shot point to continued poaching,
which in turn results from socioeconomic conditions.
121. The wood processing industry is highly fractured. It produces a large number of different
products. The sector is highly export-oriented. The production volumes decreased radically
during the period of U.N. sanctions. Due to the currently favorable market in Europe for beech
sawnwood, production recently returned to pre-war figures. Hence this is a sector where there is
potential for economic development and for employment creation in a small to medium-sized
private enterprise structure that is export-oriented. (The sector accounts for at least 6 percent of
all exports.) The introduction of certification should allow Serbia and Montenegro’s processing
industry to capture premium prices for sustainably managed forests while protecting the
environment. In this respect Serbia and Montenegro has still some way to go, but it is
encouraging that the possible establishment of a National Working Group to develop standards
18
The area that is classified as forest was strongly disputed at the workshop in Serbia.
41
for sustainable forest management and certification is currently under discussion within different
stakeholder groups.
9.2
Key Reforms and Actions in the Forestry Sector
122. There is no forest policy approved at the federal or the republic level. Currently a group
of national forestry experts has recommended the following items be included in a national forest
policy:19
•
•
•
•
•
•
•
•
Precise definition and structuring of the objectives of forest policy at the federal level
(Federal Forest Law), in keeping with the principles of viable development,
ecological and economic needs, and bio-technical and economic peculiarities of the
forest sector
Financial support for the development of the forest sector (mainly from sources
outside the sector)
Increase of the forest road network density
Creation of conditions for dealing with the issue of forest ownership
Creation of conditions for starting up a selective process of privatization in the forest
production segment
Settlement of the issue of control over and management of private-sector forests (such
as establishment of a network of test estates and monitoring of their performance and
establishment of associations of owners of private forests)
Insistence on the development of the concept of viable eco-agroforestry
Strengthening of the material basis for science research in the forest sector, including
acquisition of equipment necessary for monitoring changes in the forest ecosystems
and the development of information systems
123. Progress in these areas is slow and needs to be speeded up. Consider first the issue of
financing of forest management and protection. The current Serbian forest law has no provisions
on how the state should be reimbursed by the public forest enterprises (Srbija Sume) for the use
of state-owned forests. The only obligation of these enterprises is to pay a flat 3 percent tax on its
sales to the Ministry of Finance. This requirement applies to all forest users. Three percent of the
total collected from all public funds (water, forests, roads, raw minerals, agricultural lands, and
other natural resources) is then earmarked for forest operations (afforestation, silviculture, and so
on). In 2001, revenues from timber sales totaled US$1.01 million, while the amount earmarked
for forest-related operations from the consolidated revenues of public funds was US$1.28
million. The current across-the-board practice means that much of the forest-exploitation-related
rent is not captured by the government. In addition to the 3 percent, there should be a
differentiated tax schedule introduced to eliminate these distortions. These changes are necessary
in order to help the government capture the real rents from forest exploitation and eliminate the
de facto subsidy that is encouraging inefficient management of state forests.
124. On the question of private ownership, ideas to “de-nationalize” forests are being
discussed in Serbia and Montenegro. The main concern here is that this usually reduces the
average size of forest compartments (management units) significantly and subsequently increases
19
Yugoslav Survey—A Record of Facts and Information, Vol. XLI No. 3, 2000.
42
economic and ecological risks. Care will have to be taken to avoid this happening by including
ecological criteria in the way forest parcels are divided up for private use.
125. Other issues of importance include the methods of forest extraction (present processes are
not very environmentally friendly) and improved efficiency of operations (productivity of
harvesting operations is low—average extraction and terrain transport distances are long as a
result of an inadequate road network). Due to the lack of investments in the sector , the existing
equipment is old and worn-out. The governments recognize that finance for the recovery of this
sector will have to come in large measure from the private sector.
9.3
Recommendations
126. It is recommended that the governments undertake the following actions to promote
environmentally sustainable forest management:
•
Develop a national forest strategy. This would need to include all forest owners in Serbia
and Montenegro. Key areas would include the development of an efficient forest revenue
system and an integrated approach to strengthening the management capacity in privately
owned forests, including a strategy for the restitution of forests and their management in
the longer term. It should also address the harmonization and reform of the forest
legislative framework to ensure compatibility with the international forest community as
well as the development of national standards for sustainable forest management to
enable forest certification and therefore better access to the European market.
•
Develop an integrated and multipurpose information system. There are two principal
considerations in developing a multipurpose information system. First, an approach to
establishing an integrated Geographical and Forestry Information System (GIS/FIS)
should be developed that includes multipurpose and thematic functions in the forest
sector and that can be expanded to perform instant yield calculations at the district level,
including simulation and visualization of mixed and multi-aged forest, which at the
moment cannot be done in Serbia and Montenegro. Second, a GIS/FIS system could be
used to implement computer-aided comparison between data provided by forest users,
forest product transporters, and processors and data from the official FIS regarding log
sourcing, transportation control, monitoring of sustainable forest management, chain of
custody of forest certification, and so on. This comparison would aid in preventing,
detecting, prosecuting, and suppressing irregularities, fraud, and corruption from the
forest site to the processing stage and the marketplace.
•
Improve forest management capacity. This would require support for already ongoing
institutional reforms and restructuring of the current forest and protected area
administration based on the separation of commercial from regulatory functions, and
would include the establishment of mechanisms for self-financing of commercial
activities and a strengthening of the regulatory functions (such as Forest Inspection
Services).
43
•
Strengthen the wood processing industry. This would include advisory services for
consolidation, modernization, and internationalization, with a special focus on current
market developments, such as certification.
44
10.
BIODIVERSITY AND PROTECTED AREAS MANAGEMENT
10.1
Main Issues
127. Thanks to the large variety of the ecosystems it hosts, the former Yugoslavia was one of
six European centers of biological diversity and is home to 39 percent of Europe's vascular plant
species, 51 percent of its fish fauna, 74 percent of its bird fauna, and 68 percent of its
mammalian fauna. The country's biodiversity is further enhanced by endemic and relic species
and ecosystems, which are only found in this region, giving them global significance. Close to 15
percent of total flora represent endemic and sub-endemic plants; 2–3 percent of these are found
exclusively in Serbia and Montenegro or their range spills over slightly into the territories of
neighboring states. The country also offers a resting place for many migratory species, including
endangered ones.
128. A number of Serbia and Montenegro’s nature areas have been recognized as
internationally significant. Among these are the Obed Swamps and the Ludas Lake, Lake Skadar,
and Carska bara–Stari Begej (Ramsar Wetland of International Significance); the DurmitorNational Park, with part of the Tara River Canyon and the Kotor-Risan-Bay (on the World
Natural Heritage List); and the Tara River Canyon, which has been included in the biosphere
reserves grid of the UNESCO Man and Biosphere Programme.
129. About 60 percent of endemic Balkan flora found in Serbia (out of the total of 417
species) is endangered to a varying degree and for different reasons. Negative impacts on
ecosystems and biodiversity include:
•
•
•
•
•
•
•
Unsustainable exploitation of forests, game, and fish and use of improper and
methods for fighting “pests,” such as pesticides, herbicides, and the poisoning of
game
Mining practices that are not friendly to nature, notably open-cast lignite and copper
ore mines
Expansion of agricultural lands to marginal lands and the drainage of swamps and
marshes
Water, soil, and air pollution
Urbanization and the expansion of urban areas and tourism development in zones of
particularly vulnerable ecosystems
Infrastructure development (fragmentation of habitats), hydro melioration, and the
construction of water accumulations in gorges (refuge habitats of relict and endemic
species and communities)
Fires, floods, accidental spills, and discharges of harmful substances by industry or
during transportation
130. Nature conservation areas represent 5 percent of Serbia's territory. There are five national
parks (Fruska Gora, Kopaonik, Tara, Sar planina, and Djerdap–Iron gate), 120 nature reserves,
20 nature parks, and about 470 natural monuments. In Montenegro, about 8 percent of the
territory is protected by the state and is made up of four national parks (Lake Skadar, Biogradska
Gora, Durmitor, and Lovcen), 4 nature reserves, 51 natural monuments, and 4 forest parks or
special nature areas. An estimated 314 animal and 52 plant species designated as natural rarities
45
inhabit protected areas and are included in the republic’s Red Book. Lake Skadar, located
between Montenegro and Albania, is a Ramsar wetlands site and an International European Bird
Area, with about 40 different species of waterfowl.
131. Serbia and Montenegro is a signatory to the Convention on Biological Diversity (1992)
and the Convention on Trade in Endangered Species of Wild Fauna and Flora (1973) and ratified
both treaties in 2001. A number of laws and regulations govern biodiversity protection at the
federal and republic levels (see Annex 10). The institutional set-up is also elaborate, involving
the Environment Department within the Secretariat for Health Protection and Social Policy at the
federal level (for international cooperation) and the republican Ministries of Agriculture,
Forestry, and Waters, which have the main responsibility for forestry and forest biodiversity. The
republican Ministries of Environmental Protection are responsible for supervising activities of
public enterprises, which are in charge of administering the national parks.
132. Despite the relatively good condition of the national parks, most of them suffer from
inadequate funding and have very weak institutional and human capacity. Park development
depends in part on the receipt of public funding. This has been decreasing, however, in the face
of the governments’ tight budgetary policies. In Montenegro, for example, the national park
public enterprise has experienced a budget cut of 33 percent in the last year. These difficulties
have led a number of park administrations to resort to revenue-generating activities that are not
in line with existing legislation. In particular, in national parks that include forests,
administrations engage both in wood cutting and sales in the name of “sanitary cutting” and in
regular small-scale logging in zones with less restrictive protection regimes. Construction
activities from tourism development are also reported to have reached unsustainable levels from
a biodiversity protection point of view.
10.2
Key Reforms and Actions in Biodiversity Conservation
133. The governments of the republics take biodiversity conservation seriously, as can been
seen from their international commitments and from the fact that the Landscape Management
Plan of the Republic of Serbia approved in 1996 aims to double protected areas, including
natural monuments, to 10 percent of the territory by 2010. The difficulty is that increasing such
areas is not of itself enough to ensure effective conservation. Areas so declared can be subject to
illegal use. Preventing this requires resources in policing as well as complementary programs of
sustainable livelihoods for potential encroachers. Programs for conservation also need additional
funds to actively husband the resources within the protected areas.
134. In the face of decreasing public resources for biodiversity protection, there is a need for a
comprehensive strategy and action plan that identifies priority problems, including species and
ecosystems that require attention more immediately than others, and measures to be undertaken
to protect these. There is also a need to generate revenues from exploiting the private demand for
biodiversity where it can be done without harming the resources (such as through ecotourism,
gene prospecting, and so on).
135. Serbia and Montenegro also faces certain international biodiversity-related obligations
that have not yet been met. Prominent is the need to ratify the Berne Habitat Directive and the
Bonn Convention on Migratory Species.
46
10.3
Recommendations
136. The following policies and actions are recommendations for biodiversity and protected
areas management:
•
Develop a biodiversity strategy for Serbia and Montenegro. The strategy would
include strengthening the regulatory framework for biodiversity conservation;
building institutional and human capacity of the relevant governmental agencies and
NGOs, especially at the local level; mainstreaming of biodiversity conservation in
sectoral policies, notably forestry, agriculture, and tourism; sustainable use of flora
and fauna; strengthening the network of protected areas and integrating it in regional
networks; specific conservation and restoration programs for threatened habitats and
species; further development of biodiversity monitoring; and enhancing public
awareness and participation in biodiversity conservation. The strategy should also
recommend priority areas for investment. Funding for the strategy may be requested
from the GEF.
•
Prepare management plan for Lake Skadar and introduce integrated ecosystem
management.
•
Prepare management plans for selected protected areas and for all national parks
with the goal of ensuring long-term financial sustainability of biodiversity protection.
47
11.
PRIORITY ACTIONS AND THE ROLE OF DONORS AND THE
WORLD BANK
11.1
Recommendations for Priority Action
137. The review’s main recommendations for action are given in Table ES1 in the Executive
Summary. For each action, the table provides the main reason why it is seen as critical, notes
related issues that also need to be addressed, and reports on supporting activity by other donors.
The selection of actions is based on the following criteria: 20
•
•
•
Impact on human health—priority is given to problems, primarily related to air and
water pollution, that have a demonstrable negative impact on health, such as illness
and premature death
Impact on the economy—problems that can be ranked according to their economic
impact are included, including pollution and natural resource management issues
Impact on natural ecosystems—since the destruction of habitat and extinction of
species are not reversible, these impacts do not have easily quantifiable economic use
values for humans associated with them but could nevertheless be critical for the
proper functioning of economic systems
138. In addition to these, the priorities for action in Table ES1 also take account of ongoing
support from other donors, as well as the likely costs of the interventions, the potential benefits,
and the prospects for mobilizing financial resources for them.
139. The list of recommendations does not include two key policy measures that the
governments are already committed to and that, if successfully implemented, will make a major
contribution to the environment. The first is the phaseout of energy subsidies, combined with a
program that addresses the impact of the price rises on poverty and especially on the increased
use of wood fuel in rural areas. The second relates to the pricing of water and waste services
by municipalities. As noted earlier, at the moment the charges are so low that the service is poor
and the infrastructure is deteriorating fast. As for energy, the governments have started action to
raise prices in some municipalities, but so far only a handful of utilities have acted in this
direction. This program should be expanded as much as possible, with targeted support for
vulnerable users being included as part of the reform program.
140. The recommendations in Table ES1 emphasize, above all, the need for continued policy
and institutional reforms that will have major implications for the environment and that will
also, in many cases, benefit the economy. These are complemented by investments where these
are critical for addressing environmental issues. In some cases the policy and institutional
reforms need some further preparatory work. This is the case for actions relating to coastal zones
and biodiversity protection; in these cases the preparation of a strategy document is
recommended as a first step. Areas where policy/institutional reforms should be initiated include
strengthening institutional capacity in environmental management and addressing environmental
liability and privatization. Finally, areas where some investments need to be made in the short
term are improvements in solid waste disposal facilities, in rural and urban water services, and in
20
These criteria are based closely on the formula adopted by the European Environment Ministers in their meeting
in May 1993 in Lucerne, Switzerland, following the Environment for Europe process supported by the Bank.
49
addressing serious pollution problems in selected hot spots. In all cases the focus should be on
localities where the present situation poses a serious health threat.
141. In addition, the governments should consider investments in regional and global public
goods—reductions in greenhouse gases through energy efficiency, tackling Danube
eutrophication, integrated eco-systemecosystem management for Lake Skadar, and improved
biodiversity conservation. The justification for these is that Serbia and Montenegro has some
international obligations that have to be fulfilled and that funds for these programs will come
partially from international earmarked sources such as the Global Environment Facility (GEF).
The selection of the projects, however, should be based on the net global benefits plus the local
benefits generated.
11.2
The Contributions of Other Donors
142. The level of donor support for the environment in Serbia and Montenegro initially
focused on urgent problems, primarily in the municipal sector, but has since moved to wider
support for institutional reform, technical assistance, and infrastructure investment. The
European Agency for Reconstruction of the EU, which is responsible for the management of
the main EU assistance programs in Yugoslavia, is the largest donor, investing mostly at the
municipal level, covering maintenance and repair of local public facilities. In 2001, its assistance
amounted to Euro 320 million, and this is expected to continue in the same order of magnitude
during 2002–06. For sewerage and wastewater, the EU intends to fund preparatory studies for
larger projects that will then be funded mainly from other sources. The U. S. Agency for
International Development has a large assistance portfolio as well in Serbia and Montenegro
(US$240 million for 2002–04), which also focuses at the municipal level—for small-scale urgent
infrastructure development and maintenance—and in support of civil society development.
Larger investment programs are being prepared by the European Bank for Reconstruction and
Development, which is currently negotiating investments in the larger cities on district heating
systems, water supply, and sewage systems. The Governments of Germany and France are
also undertaking smaller-scale efforts that support wastewater and water projects.
143. Bilateral donors are also supporting a number of infrastructure projects, and some have
contributed to cleaning up activities in several environmental “hot spots,” in particular where
NATO bombing damage occurred. The UNEP-UN Centre for Human Settlements Balkan Task
Force has identified 27 clean-up projects to address the post-conflict environmental and
humanitarian problems, with an estimated cost of US$37 million. Switzerland, Austria,
Norway, Russia, Denmark and others have provided US$11 million, and about 15 projects
have been implemented. Germany intends to provide Euro 2.5 million to Montenegro for
environmental protection and is in the process of determining the specific area of investment.
144. A number of donors and international agencies are also providing or planning to provide
technical assistance to Serbia and Montenegro in environment-related programs. Among them
more active in this area are the U.N. institutions and the EU. Currently the U.N. Development
Programme is working on energy conservation and efficiency and on promotion of sector
reform. It is taking a lead position on implementing GEF projects in the area of preparing
national strategies on climate change and biodiversity conservation. The U.N. Economic
Commission for Europe (UNECE) is preparing an Environmental Performance Review for the
country. UNEP, together with UNECE, has organized several capacity-building workshops. The
50
EU plans to provide substantial assistance in drafting, adopting, and implementing a wellfunctioning legal, policy, and institutional framework; in supporting, maintaining, and further
developing a civil society network; and in strengthening municipal institutions responsible for
solid waste and wastewater management. It will also support improved monitoring of pollution
and work on hot spots where the current situation poses a serious environmental risk, such as
Trepca, Pancevo, and Novi Sad.
145. The Regional Environmental Center in Central and Eastern Europe (REC) is coimplementing several regional projects in Yugoslavia: providing support for ratification and
implementation of multilateral environmental agreements; strengthening national environmental
protection agencies; and developing national information systems and environmental legal
advocacy and advisory centers. REC is also responsible for implementing “promotion of
networking and exchange of experience in countries of South-Eastern Europe.” The main goal of
the project is to contribute to enhancing cooperation among these countries through the
management of shared natural resources. The project has a special component on the
transboundary Lake Skadar. It also aims to promote cross-border exchange between local people,
organizations, and NGOs, and to establish technical networks in support of the selected
transboundary sites, in implementing small-scale demonstrational projects.
146. Among bilateral donors, the Government of Finland is providing special support in the
area of harmonization and improvement of environmental legislation. And other donors
(Switzerland and Norway) have supported, through the Organization for Security and
Cooperation in Europe, the draft framework Environmental Protection Law for Serbia or are
supporting the Serbian or Montenegrin Governments in some particular areas. (For example, the
Government of Japan has supported preparation of background studies for a National Waste
Management Strategy for Serbia.) Donor activities are presented in table form in Annex 11.
11.3
The Role of the Bank
147. The donor review suggests that there is considerable interest in the environment from
external agencies and that the Bank has to think carefully about where it can make the most
useful contribution. The main programs that the Bank could most usefully support are listed in
Table ES2. Apart from the stakeholder and donor consultation workshop, which should be
undertaken to discuss this report with stakeholders and to finalize the Country Environmental
Analysis, the other proposals support areas where other donors are not covering the priority fully
and where action is needed according to the priorities listed in Table ES1. These are:
•
Develop a hazardous waste facility for Serbia. The Serbian MENR intends to
develop a National Solid Waste Management Strategy based in part on the Strategic
Framework for Waste Management prepared with Japanese aid. The Bank is already
involved through the International Finance Corporation in a possible private-sector
solid waste management project for Belgrade. In Montenegro it provided a special
investment grant for a coastal zone waste disposal facility last year, and it expects to
add to that in 2003. The Bank will provide an additional International Development
Association credit of US$5 million for the same sector and region and thus solve the
waste problem for a most sensitive tourist area of the country. This places the Bank in
the lead on assistance in solid waste in Serbia and Montenegro. The investment would
51
make a major contribution to resolving one of the most serious environmental
problems in the country. It is priority action 1 in Table ES1.
•
Prepare and implement an Integrated Ecosystem Management Program for
Lake Skadar. This activity falls under priority action 10 in Table ES1, and although
it preempts the biodiversity strategy to some extent, the action is justified for several
reasons. First, the lake is clearly an important resource, so any biodiversity strategy is
bound to recommend priority action in this region. Second, time is of the essence as
increasing water pollution threatens fisheries and as deforestation and illegal hunting
endanger globally significant ecosystems. The Bank is well placed to undertake this
project because of its experience in similar integrated ecosystem management
projects, including the ongoing Lake Ohrid Project between Macedonia and Albania.
•
Design and implement a Danube nutrient reduction investment project. This is
priority action 8 in Table ES1. The reason for Bank involvement would be its pivotal
role in the Black Sea/Danube cleanup program overall, and Serbia and Montenegro
urgently needs to make a contribution to the nutrient reduction targets as part of its
obligation under the Convention on Co-operation for the Protection and Sustainable
Use of the Danube River. Serbia and Montenegro contributes about 13 percent of the
Danube River’s nutrient pollution, which has had negative impacts for fisheries,
tourism, and public health in the Danube and Black Sea regions.
•
Prepare an energy efficiency and renewable energy project for Serbia. Priority
action 7 in Table ES1 is included because there are a number of areas where energy
efficiency is very low and where investment in more-efficient technology would be
justified even with the higher energy prices that are being planned, and because the
project would benefit the local environment and local economy, with part of the costs
being covered from its contribution to the global public good (that is, reduction in
greenhouse gas emissions). The Bank, possibly through the GEF or its Carbon Fund,
would be the most effective agency to carry out such a project.
•
Assist the Ministry of Environment in legal revisions to the privatization law to
take account of environmental liability. This is priority action 6 on Table ES1.
Although a number of donors are willing to support this activity, the Ministry for the
Protection of Natural Resources and Environment and the Privatization Agency
would benefit from Bank experience in this area, which is extensive. Perhaps a Bank
technical assistance grant with support from one or more bilateral donors would be
the best arrangement.
•
Support the PRSP process. By drawing out the key environment poverty linkages
and contributing to the PRSP document in this area, the Bank can ensure that
environmental issues are properly addressed in the national development strategy.
This is partly in support of priority action 4 in Table ES1, which includes the need for
a better understanding of the impact of environmental changes on poor sections of
society and of how actions need to be designed to minimize such impacts in the future
and possibly reverse those that have already happened. The Bank has considerable
experience with environment and poverty issues and is well placed to offer assistance
in this area.
52
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analysis for adult population in Serbia: Differences between domicile population, refugees, and
IDBs,” Belgrade, 2001
WHO, “The Health & Nutrition of the Refugee Population in FRY,” November 1998
Yugoslav Survey, Forests and Forestry, No. 3 2001
Zeljko Pantelic,Z. Mihajlov,A. eds Dangerous Substances in the Republic of Serbia – Initial
Register for the Year 2000 Editors. February 2002, Directorate for Environmental Protection
55
DRAFT
Federal Republic of Yugoslavia
Environmental Sector Review
ANNEXES
September 2002
World Bank
1
DRAFT
List of Annexes
Annex 1. Trends in the Quality of the Environment and Natural Resources,
Transboundary Environmental Problems ........................................................................... 1
Annex 2. Macroeconomics and Environment in Serbia and Montenegro ........................ 19
Annex 3. Environmental Expenditures and Financing ..................................................... 31
Annex 4. Institutions, Policies and Laws.......................................................................... 41
Annex 5. Energy, Transport and Environment in FRY .................................................... 67
Annex 6. Water Supply and Sanitation............................................................................. 75
Annex 7. Waste Management ........................................................................................... 87
Annex 8. Coastal Zone Management in Montenegro ....................................................... 93
Annex 9. Forestry.............................................................................................................. 95
Annex 10. Biodiversity and Protected Area Management.............................................. 101
Annex 11. Donor Cooperation in the Environment Sector............................................. 107
List of Tables
Table A1: Ambient air pollution concentrations in Serbian cities...................................... 3
Table A 2: FRY and Millennium Development Goals .................................................... 10
Table A3: Genuine Savings in FRY in 2000 (% of GDP)................................................ 22
Table A 4: Genuine Domestic Savings in other transition economies, 2000 (% of GDP)22
Table A5: Serbia DEP expenditures (US$ million).......................................................... 34
Table A6: Montenegro environment related expenditures by MEPP (US$ million)........ 34
Table A7: Overall and environment-related federal expenditures (US$ million) ............ 34
Table A8: Breakdown of DEP expenditures in 2001 (US$)*........................................... 35
Table A9: Planned and realized revenues and expenditures (US$ million) ..................... 36
Table A10: Belgrade city environmental expenditures in 2001 (US$)*........................... 39
Table A10: Percentage of the population with water supply of different service levels .. 75
Table A11: Percentage of the population with interruptions of water supply .................. 76
Table A13: Selected municipal water supply and wastewater utilities in Serbia* ........... 77
Table A14: Percentage of drinking water quality systems in Serbia not meeting water
quality standards in 2001 .................................................................................................. 78
Table A15: Serbia - Estimate of needed capital funds for water supply development from
2001-05 (five years).......................................................................................................... 78
Table A16: Montenegro - Percentage of samples not meeting bacteriological & chemical
standards, 1997 and 2000, in selected cities ..................................................................... 79
Table A17: Percent Coverage to Sanitation Options ....................................................... 80
Table A18: Investment needs in Serbia for improved wastewater treatment (US$ mn) .. 82
Table A19: Serbia: Percentage of households using different solid waste disposal
methods ............................................................................................................................. 87
Table A20: Forest cover in Serbia & Montenegro............................................................ 95
Table A21: National Parks in Montenegro and Serbia ................................................... 102
Table A22. Ongoing and planned donor activities in the environment sector................ 107
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DRAFT
List of Boxes
Box A1: MDG 7: Ensure environmental sustainability...................................................... 9
Box A2: Poverty in Serbia ................................................................................................ 11
Box A3: Poverty in Montenegro....................................................................................... 12
Box A4: Health impacts of air pollution........................................................................... 13
Box A5: Turkey - Eastern Anatolia Watershed Rehabilitation Project ............................ 16
Box A6: Benefits of Incorporating Environment into the Privatization Process.............. 28
Box A7: Activities to tbe funded with public resources as stipulated by current Laws ... 32
Box A8. Phaseout of leaded gasoline in the Slovak Republic.......................................... 74
Box A9. IFI and donor activities in FRY’s water sector .................................................. 85
Box A10: A regional approach to solid waste management in Bosnia and Herzegovina 90
Box A11: National Park Lake Skadar............................................................................. 104
List of Figures
Figure A1: SO2 Emissions by Category of Source ............................................................. 4
Figure A2: NOx Emissions by Category of Source ............................................................ 5
Figure A3: FRY, Serbia and Montenegro GDP movements in the 1990s (Mln YUD).... 20
3
DRAFT
ANNEX 1: TRENDS IN THE QUALITY OF THE ENVIRONMENT
AND NATURAL RESOURCES, TRANSBOUNDARY
ENVIRONMENTAL PROBLEMS1
1.
This annex provides a brief overview of the main environmental issues and trends
in Serbia and Montenegro, including air quality, water quality, forest management,
biodiversity protection, and international waterways.
Geography and Population
2.
FRY covers a total area of 102,173 km2, out of which the Republic of Serbia
covers 88,361km2 (87 % of total) and the Republic of Montenegro 13,812 km2 [7]. It is a
Balkan, Mediterranean, as well as Danubian country. According to its geomorphological characteristics, the country can be divided into three macro-regions: the
Pannonian Plain in the north, a hilly-mountainous region in the central part of the country
and the Adriatic coast in Montenegro.
3.
In 2000, the country’s total population was 10.6 million, which is only a slight
increase when compared with the 1987 population of 10.3 million [7]. Serbia’s
population is estimated at slightly below 10 million and Montenegro’s at about 650
thousand. The population is predominantly and increasingly urban (up from 67 percent
in 1991 to 69 percent in 1999), with Belgrade, the capital, having a population of around
1.2 million and 5 other cities, Kraguyevac, Podgorica, Nis, Novi Sad and Subotica,
having populations of more than 100,000.2 The wars in the region brought 700,000
refugees into the FRY. From mid-1999 onwards more than 300,000 internally displaced
people from Kosovo have found temporary homes in FRY. This has caused an increased
demand for energy and water and resulted in a negative impact on the environment.
1
This annex does not discuss the state of forest resources and biodiversity as there are separate annexes on
these topics.
2
These population figures date from the 1991 population census. It is estimated that since the early 1990s,
approximately 300,000 refugees and IDPs have migrated to Belgrade alone. Podgorica is also believed to
have received a significant number of new inhabitants, relative to its size.
1
DRAFT
Air Quality
4.
Air pollution is a localized problem, and can be severe with respect to some
pollutants in selected industrialized cities, in Serbia and Montenegro. In the cities of Bor
and Ivanjica in Serbia, annual average ambient SO2 concentrations in 2000 were found to
be at least three times in excess of national standard (50µg/m3). The maximum allowable
concentration (MAC) is exceeded at single measuring points 188 days in Bor, 63 days in
Vranje and 22 days in Kikinda, and to a lesser extent in Leskovac, Sabac, Novi Sad,
Kragujevac, Smederevo and Uzice. Average ambient particulate matter (PM)
concentrations were 16 times the national standard (50µg/m3) in Cacak, and between 6
and 8 times in Krusevac, Vranje, Leskovac, Uzice, and parts of Belgrade and Lucani.
The MAC for soot is exceeded at single measuring points on 281 days in Uzice, 170 days
in Smederevo, 141 days in Belgrade and Sabac, 118 days Leskovac and to a lesser extent
in Nis, Cacak, Zrenjamin and Vranje. On the other hand, NO2 levels recorded in the
settlements were at or below the Serbian limit value of 40µg/m3 in all Serbian cities with
air quality monitoring networks (Table A1) [8].
5.
In Montenegro, according to recent air quality reports (1998, 2000), the levels of
pollution from SO2 and PM are periodically above limit values in the vicinity of Niksic
(ironworks plant), Plevlja (coal mine and power plant) and Podgorica (aluminum
smelter).
2
DRAFT
Table A1: Ambient air pollution concentrations in Serbian cities
Average annual concentration (µg/m3)
City
SO2
Soot**
NO2
PM
1
10
57
36
199
Beograd
2
7
29
32
312
3
146
1
21
9
8
180
Novi Sad
2
30
9
3
173
3
26
9
5
156
1
6
8
11
169
Nish
2
10
41
28
244
1
2
7
5
88
Subotica
2
3
5
9
111
1
19
45
22
212
Sabac
2
20
77
20
211
1
17
27
17
221
Zrenjanin
2
21
16
8
237
1
40
16
Kragujevac*
272
2
62
12
3
45
14
1
11
15
34
141
Krusevac
2
10
21
13
466
1
8
47
137
Uzice
2
7
85
151
1
34
58
183
Smederevo
2
17
23
1
9
17
11
2
6
18
12
Pancevo
3
199
4
244
1
243
20
0
Bor
2
41
21
183
3
103
15
154
1
1
20
225
Cacak
2
0,19
32
806
1
2
5
349
Lucani
2
100
1
7
1
152
Ivanjica
2
151
8
81
3
129
1
3
2
192
Kraljevo
2
4
5
157
3
6
5
111
Vranje
1
82
11
354
1
19
9
9
81
Kikinda
2
63
5
89
1
42
4
354
Leskovac
2
131
3
349
*:
Kragujevac: - average value of PM for 10 measured places
** Soot is mainly elementary carbon, transformed during incomplete combustion processes and
additional chemicals to particulate matter
- ::
- not measured;
- no measurement above limits
PM: - Particulate matter
∅:
Source: Directorate for Environmental Protection, “Report on the State of the Environment for 2000”,
Ministry of Health and Environmental Protection of the Republic of Serbia
STATION
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DRAFT
6.
Figures A1 and A2 indicate the trend in FRY emissions from 1990 to 1999. Air
pollution emissions, in particular SO2 and NO2, declined slightly in the first two years of the
1990s. In subsequent years they rose again to surpass 1990 levels in 1998, but dropped
substantially in 1999. Most of the drop was in energy related emissions and was caused by
NATO bombings, which interrupted electricity production. Data on subsequent years are not
available. As the tables indicate, the main sources of SO2 and NO2 emissions are energy
generation plants (80-88%), and to a much lesser extent, industry (3-14%) and general
consumption (9%). Coal burning and inefficient technology are the most important
factors leading to high emissions from energy plants. The role of industry appears to have
increased relative to general use in the 1990s for both pollutants. Public health impacts of air
pollution are discussed under section “Poverty and Environment Linkages”.
7.
Regarding global and transboundary aspects of air pollution, FRY ranks among those
countries whose estimated yearly consumption of controlled ozone depleting substances is
less than 0.3 kg per capita. With regard to “acid rain”, it has been estimated that in 1998,
FRY imported 195,000 tons of sulfur and exported 109,000 tons. The majority of FRY’s
SO2 exports are to Romania, Bulgaria and Ukraine, while Bosnia and Herzegovina, Romania
and Bulgaria are the main sources of “imported” SO2. FRY’s nitrogen exports and imports in
1998 were estimated at 15,800 and 40,100 thousand tons, respectively. Transboundary
nitrogen pollution is mainly imported from Italy and exported to Romania. In its research,
the team did not come across evidence that acid rain may be resulting in significant damage
to crops, forests, human or animal health. Further study into transboundary air pollution, and
its causes and effects, is needed in FRY.
Figure A1: SO2 Emissions by Category of Source
600
1000 t/year
500
400
300
200
Industry
General
Consumption
Energy
100
0
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Source: FRY Hydro-Meteorological Institute
4
DRAFT
Figure A2: NOx Emissions by Category of Source
70
1000 t/year
60
50
40
Industry
30
General
consumption
Energy
20
10
0
1985
1987
1989
1991
1993
1995
1997
1999
Source: FRY Hydro-Meteorological Institute
Quantity and Quality of Water Resources
8.
The FRY has an annual per capita water flow of about 1,600 m3 per capita, which
classifies it among the water-poor areas of Europe. The country is poor in terms of internally
renewable water resources, since about 84% of available water originates outside the territory
of FRY [9]. Yearly groundwater reserves total about 244 m3 per capita. Groundwater
sources are extremely important especially for Serbia where they are estimated to supply 90
% of domestic and industrial needs, and 70% of drinking water needs. In many areas of
FRY, groundwater cannot be used for drinking purposes without prior treatment. This is
particularly true in certain areas close to the Morava and Danube Rivers in the Vojvodina
Region.
9.
Water resources – Serbia. The quality of water resources, both surface and
groundwater has experienced a continuous decline and is considered unsatisfactory. From
1994 onwards, water quality in most Serbian rivers deteriorated from second class (suitable
for bathing and drinking purpose only after treatment) to third class quality (suitable for
irrigation and industry) [9]. Some of the decline is attributed to higher levels of pollution in
those water sources entering FRY. These tend to be contaminated with nutrients, oil, heavy
metals, and organic components. Examples of very clean water - Class I and I/II - are very
rare, and are situated in mountainous regions, for example along the Djetinja River in the
Western part of Central Serbia. Organic pollution and nutrient enrichment have been
recorded in the Danube River Basin, especially in the Vojvodina Region. Toxic pollution has
been recorded in sediments downstream from the large industrial centers, such as Pancevo
and Bor.
10.
Water resources – Montenegro. The water quality of Montenegro’s most important
rivers, namely the Moraca/Zeta, Lim, and the Tara/Piva, is generally within the required level
during most of the year (Ministry of Environmental Protection and Physical Planning, 2002).
The water quality of Lake Skadar also meets all standards for its category, with the exception
of ammonia, particularly in the north and northwest of the lake. Eutrophication has also been
documented in the North West part of the lake [1]. The most polluted water bodies in
5
DRAFT
Montenegro are two rivers, the Vezisnica and the Cehotina, in the vicinity of the industrial
town of Pljevla in northern Montenegro. Water quality in a stretch of the Ibar River near Bac
also exceeds standards for BOD, ammonia, phosphates, nitrates, phenols, detergents, mineral
oils, manganese, mercury and pathogens.
11.
Marine waters. The quality of coastal marine waters off Montenegro is generally
satisfactory, especially in open stretches. Nevertheless, more confined bays with human
settlements are affected by wastewater discharges. Signs of eutrophication have been
observed in Herceg-Novi, Kotor and Tivat, likely resulting from discharges of untreated
wastewater. It is expected that the probable increase in tourists along the coast,
particularly in the hot period of year, could result in higher wastewater discharges in the
Adriatic Sea, impacting water quality. Increased phosphate discharges also originate
from detergents. Significant algae blooms were observed over the few years in the
interior part of Kotor Bay during the summer time [1]. Furthermore, fecal pollution is
periodically a concern at almost all the beaches, especially near Sutomore, Bar and
Ulcinj, where the number of coliform bacteria exceeds even the limits for Class II bathing
waters. The quality of bathing water at the exclusive of location of Sveti Stefan is of
greatest concern, where fecal pollution is the largest problem. Moreover, in Budva,
Bijelea and Bar, increased pollution by ammonia and mineral oils has been observed.
Transboundary Waters
12.
Danube River Basin. The Danube River Basin occupies 87% of FRY’s territory,
representing 11% of the Basin’s area. The Danube crosses and borders FRY’s territory for
588 km, and its Drava, Sava and Tisa Rivers, the Danube’s largest tributaries, drain large
parts of the Basin area located in FRY. A significant contributor to nutrient pollution in the
Danube River and hence the Black Sea, are FRY’s discharges into the Danube of nitrogen
(N) and phosphorous (P). The Danube Water Quality Model developed in support of the
Transboundary Diagnostic Analysis (TDA) for the Danube River, estimated FRY’s annual
discharges as 72,000 N t/y and 7,000 P t/y, representing 13% and 14% of total loads,
respectively [3]. These values place FRY third in N discharges and second in P discharges
among 13 countries in the Danube Basin. The TDA identified untreated municipal and
industrial wastewaters and leakages of highly concentrated manure from large-scale pig
farms as primary sources of nutrient pollution in the FRY portion of the Danube [3].
Nutrient pollution has adverse impacts not only on globally treasured biodiversity in the
Danube and the Black Sea, but also on the local economy, affecting public health, fisheries
and tourism.
Land and Mineral Resources
13.
Around 36% of Yugoslavia’s territory is arable land and 13%, pastures [4]. Due to
very intensive agriculture, about 20,000 km2 or 20% of FRY’s territory can be classified as
degraded, mostly due to water erosion, except in Vojvodina where the main cause of land
degradation is wind erosion. The rate of soil erosion is 3 to 4 times the “natural” level.
Erosion, not all related to agriculture, is reported to be moderate to extreme for 26% of
Serbia. Among other causes of land degradation are open pit mining activities and
unregulated waste disposal. Of the total degraded area, some 96% is in Serbia, and only 4%
6
DRAFT
in Montenegro, which is mountainous and less industrially developed. Large areas of land
around many industrial complexes have been severely polluted by different heavy metals and
POPs, and are now classified as environmental “hotspots”. Irrigation is used on only 40,000
ha in the Sava and Danube Basins. Problems of waterlogging and salinity have not been
reported.
14.
The economic dislocation of the 1990s led to a marked fall in the use of chemical
fertilizers and pesticides to about one-third of their 1985 levels and consequently in the threat
that they pose to the environment, in the form of toxicity to workers and ecosystems,
deterioration of water quality, and eutrophication of lakes, bays and the Black Sea. However,
it may be expected that this trend will be reversed as the economy recovers3, especially with
the introduction of world market prices, which will tend to limit inefficient use. The biggest
environmental challenge in this sector is from intensive livestock production, especially at
large, former state farms. In the FRY portion of the Danube Basin, there are about 100 farms
with an average of 1,000 cattle and 130 pig farms with a total of 1.2 m animals. Very few of
these farms have any advanced form of waste collection and treatment – simple lagoons are
common. The resulting runoff of nutrients (Nitrogen and Phosphorus) into the Danube and,
eventually, into the Black Sea, contributes to the eutrophication of this international water
body and to declines in fish production and biodiversity.
15.
FRY is rich in various mineral resources: copper, lead, zinc, nickel, bauxite, gold,
silver, various decorative stones, lignite, coal, oil, natural gas, as well as about 500 registered
mineral and thermal-mineral water springs. Energy reserves consist mainly of solid fuels
(72%), where the share of low-grade coal (lignite) is more than 65%. In the past few decades,
the diverse mineral reserves of Eastern Serbia, Central Serbia, and Northern Montenegro,
have been increasingly extracted, causing environmental damage, especially where open cast
lignite mining (in the Kolubara, Kostolac and Kosovo basins), and open cast copper mining
(Majdanpek) are practiced [5]. Open cast mines and mining waste dumps have also resulted
in landscape degradation, groundwater contamination, and soil degradation.
Industrial and War Related Environmental Hotspots
16.
In both Serbia and Montenegro, there are several environmental hotspots that pose a
serious risk to public health and the surrounding ecosystem. In Serbia, the main hotspots are
in the cities of Bor, Kragujevac, Pancevo, Sabac, and several other industrial centers [6]. A
UNEP/UNHCS report identified a number of additional environmental hotspots that were
created in Serbia as a result of NATO bombing, most notably in the cities of Bor,
Kragujevac, Novi Sad, and Pancevo. 4 The following are some of the most severe industrial
and war related environmental hotspots in Serbia:
•
Pancevo’s industrial complex, including nitrogen processing, petrochemical
plants, and a refinery, were damaged during NATO bombing. Approximately
1.2 tonnes of dichlorethane (EDC), which is an extremely toxic material to both
terrestrial and aquatic fauna and flora, were released into soil and water from
the bombing. High concentrations of EDC, as well as of mercury from
3
4
Recent donor funding of fertilizers may prove to be a mixed blessing.
For more information see the UNEP/BTF Feasibility Studies, which can be found at the following
website: http://www.grid.unep.ch/btf/reports/feasibility/index.html
7
DRAFT
previous, industrial pollution, have been detected in soil, groundwater and the
city’s wastewater canal.
•
An ore smelting complex in Bor is polluting the air. Sulfur dioxide and PCB
oils from damaged equipment pose the greatest problems.
•
Novi Sad has an oil refinery, which was bombed during NATO’s air raids.
Large amounts of crude oil and petroleum products leaked into the soil,
groundwater and Danube River. The polluted water poses a threat to the
infiltration ponds of the Novi Sad water and wastewater plant.
•
The city of Krajugevac faces environmental pollution from both a car factory as
well as from NATO bombing. The level of PCB, nickel, chromium, and dioxin
contamination in soil and groundwater is very high. The car factory is located
on the banks of Lepenica River, a small tributary of the Morava River. PCB
contamination of the river sediments and water represents a major threat to
aquatic life, and possibly to groundwater resources in the area.
•
The Kolubara –Obrenovac corridor consists of lignite-fired power plants and
related ash pits and the lignite mines. Pollution in the 26-mile corridor is having
a major impact on air quality, and has resulted in a high level of respiratory
problems in the region.
17.
Montenegro does not face Serbia’s problem of war related environmental hotspots,
but it does have a number of areas that are severely polluted as a result of industrial activities
[1]:
•
The Plevlja Region is an area where coal mining and a power plant cause
serious pollution. Energy production is based on mined lignite coal without any
filtering or purification of gas emissions. Due to the location of the power plant
in a closed valley with virtually no wind for two-thirds of the year, severe air
pollution events occur frequently, especially during the heating season. The
frequency of respiratory diseases in the area is much higher than the average.
•
Aluminium Kombinat in Podgorica. The air in the area of this kombinat is
periodically polluted from an anode backing plant and the electrolytic process
(fluoride, phenols, SO2, perfluorcarbons). Groundwater is polluted by different
pollutants, notably PCBs and flourides, coming from the plant’s “red mud”,
which represents a waste from the production of aluminum.
•
Niksic zone. The ironworks plant “Boris Kidric” in the city produces a variety
of steel products from scrap iron. The electrical furnaces and the internal power
plant operate without any filters or scrubbers and emit a range of heavy metals,
noxious gases, and particulates. The pollution level in the air in the vicinity of
the plant exceeds permissible levels.
8
DRAFT
Millennium Development Goals and the Environment
18.
Ensuring environmental sustainability is one of the eight UN Millennium
Development Goals (MDG) that were adopted at the Millennium Summit in September 2000.
The seventh MDG aims to “integrate the principles of sustainable development into country
policies and programs and reverse the loss of environmental resources; halve, by 2015, the
proportion of people without sustainable access to safe drinking water; and significantly
improve the lives of at least 100 million slum dwellers by 2020.” Indicators related to this
target include forest coverage, biodiversity protection, per capita energy use, CO2 emissions,
access to water, access to sanitation and security of tenure (Box A1). The fourth MDG,
which aims to reduce the under-5 mortality rate and the infant mortality rate, is also related to
the environment given the strong relationship between child health and availability of clean
drinking water and sanitation.
Box A1: MDG 7: Ensure environmental sustainability
Targets
Integrate the principles of sustainable
development into country policies and
program and reverse the loss of
environmental resources
Halve, by 2015, the proportion of people
without sustainable access to safe
drinking water
Have achieved, by 2020, a significant
improvement in the lives of at least 100
million slum dwellers
Indicators
•
Change in land area covered by forest
•
Land area protected to maintain biological
diversity
•
GDP per unit of energy use
•
Carbon dioxide emissions (per capita)
•
Proportion of population with sustainable
access to an improved water source
•
Proportion of population with access to
improved sanitation
•
Proportion of population with access to secure
tenure [Urban/rural disaggregation of several of
the above indicators may be relevant for
monitoring improvement in the lives of slum
dwellers]
Source: http://www.worldbank.org/data/mdg/About_the_goals.htm
19.
While statistics indicate a very large part of the FRY population had access to safe
drinking water in 2000, there are unsatisfactory trends in both quality and coverage and
service, especially to rural areas and urban slums. Similarly, 99.6% of the FRY population is
reported to live in a household with sanitation services of some kind, however the majority of
rural households have septic tanks, many of which have been found to be improperly
designed and situated. Urban slums, mainly populated by refugees, Roma and IDPs, do not
have access to safe sanitation facilities. Problems in access to safe drinking water and
sanitation endanger threaten to reverse the positive trend in decreasing child mortality rates
9
DRAFT
since 1990s. The deficiencies in service are mainly caused by poor financing and
management of public utilities, which need to be reformed.
20.
GDP per unit of energy used, a reverse of the usual energy intensity ratio, declined
from US$ 1.85/koe in 1990 to US $1.28/koe in 1999 showing a higher energy intensity. This
compares poorly with the ECA average of US$ 2.4/koe and underlines the need for improved
energy efficiency and reduced demand through the elimination of energy price subsidies.
FRY’s CO2 emissions of 4.6 mt of per capita were less than the ECA average in 2000.
However, these emissions appear to have increased since the early 1990s. Hence there is
room for improvement.
21.
Forests cover 28% of FRY’s land area. This percentage is lower than the ECA region
average of 40% and there has been a slight decline in forest coverage of 0.4% annually
during the past ten years, mainly due to fires, pest infestation, illegal logging, reduced
afforestation and overharvesting. While the annual reduction is not very dramatic, it does
underline a need for more sustainable forest management to reach a positive trend. Of FRY’s
total land area, 3.3% is protection for biodiversity conservation. This is the same as the ECA
average and there is no indication of a negative trend. There is still, however, a need for
better management of FRY’s globally significant biodiversity (Table A2).
Table A 2: FRY and Millennium Development Goals
Indicator
Reduce child mortality
Under 5 mortality rate
Infant mortality rate
Ensure environmental sustainability
Forest area (million ha)
National protected area (% of total land area)
GDP per unit of energy use (US$ / koe)
CO2 emissions (mt per capita)
1990
1995
1999
2000
26.0
23.0
19.0
13.1
16.0
13.6
NA
12.8
2.995*
NA
1.85
3.6^^ 1
2.934*
3.34
1.28
2.9
NA
NA
1.28
NA
2.887**
3.33***
NA
4.6***
Notes: 1 1991 statistic
Sources:
^^ Chapter 12, “Breaking with the Past: The Path to Stability and Growth”, 2001
*Statistical Yearbooks of Yugoslavia; Federal Statistical Office, "Bulletins Forestry”
** FAO Global Resources Assessment, 2001
*** The Little Green Data Book, 2001
Poverty and Environment Linkages
22.
In this section we discuss linkages between the environment and poverty using a
broader definition of which extends beyond income or consumption to include health and
vulnerability. A number of important poverty – environment linkages exist in this context: a)
health and environment; b) vulnerable social groups and environmental degradation; c)
poverty and natural resource degradation; and d) poverty and vulnerability to natural
disasters. Boxes A2 and A3 provide summary information on the state of poverty in Serbia
and Montenegro, respectively.
10
DRAFT
Box A2: Poverty in Serbia
Poverty in Serbia has increased dramatically in the last ten years. The middle class has disappeared,
the number of poor has increased two and a half times and there are an increasing number of people
living just above the poverty line.
Available statistics for 2000 indicate that approximately one third of the Serbian population, 2.8
million, lives in poverty, defined according to national criteria, with an income of less than US $30
per month, and about 18%, 1.8 million, live in absolute poverty with monthly income less than US
$205. Additionally, a considerable group lives close to the poverty line and can easily fall below it in
the absence of well targeted measures.
The urban population has suffered more from the fall in living standards and the spread of poverty
than the rural population. There is a considerable difference in poverty incidence between these two
categories of population (39.7 percent versus 29.4 percent).
Serbia’s three regions, Vojvodina, Central Serbia and Southern Serbia differ in terms of level of
development: Vojvodina is the wealthiest region and fewer than 10 percent of its municipalities are
classified as underdeveloped according to the UN Human Development Index (HDI). In the central
region, GDP/capita is slightly lower than in the Vojvodina, and there is a higher proportion (21
percent) of municipalities classified as underdeveloped according to the HDI. But severe rural
poverty is not widely observed. Southern Serbia is the largest of the three regions, and also the
poorest, least developed region. 58 percent of municipalities are underdeveloped according to HDI.
A substantial proportion (19 percent) of all municipalities are classified as severely underdeveloped.
Widespread rural poverty has been a major determinant of the net out-migration recorded for Central
Serbia and Southern Serbia during the period 1995-1999.
The results of empirical research show that the main survival strategies of households in Serbia in the
year 2000 were the reduction of needs, subsistence economy, a decrease in savings or sale of
property, as well as an increase in grey economy activities.6
Source: I-PRSP
5
“Poverty in Serbia and reform of Governmental Support for the poor”, B. Bogicevic, G. Krstic and B.
Mijatovic, Center for Liberal-Democratic Studies, 2002. The study is based on pre-reform data from the first
half of 2000 and does not take into consideration the approximately 600.000 refugees and internally displaced
persons currently accommodated in Serbia.
6
According to the grey economy survey of 2000, at least 30% of the economically active population was
involved in activities of the grey economy, with monthly incomes that were higher than the ones in the regular
economy.
11
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Box A3: Poverty in Montenegro
Poverty has increased in Montenegro during the past decade. A survey carried out in 2000 indicates
that, depending on the assumption of on poverty line, between 20 – 30 percent of the Montenegrin
population can be considered poor. Unemployment rate stands at 86 percent, taking into account all types of
employment (formal, informal and multiple). It should be noted however, that those engaged in
informal activities may not hold full-time positions. Regional differences are also very strong. Northern
inhabitants have a higher probability of living below the poverty line.
The negative socioeconomic trends experienced during the past decade in Montenegro have been, to
a greater or lesser extent, offset by a number of coping mechanisms. As mentioned before, family
support and income from informal activities (i.e. grey economy) played an important role in
preventing an even larger share of population falling below the poverty line.
Source: UNDP, “Employment, Labor Market and Standard of Living in Montenegro”
Health and environment
23.
The main issues under this heading are water and sanitation, air pollution and waste
management. These are discussed below.
24.
Water and sanitation. Health status data indicate that in FRY water related diseases
are not a significant contributor to the burden of chronic or acute disease (WHO, 2000;
UNICEF, 2001). Mortality among infants and children under five, a common indicator of
water supply and sanitation conditions, has declined by one half during the 1990s and is
associated with improved household sanitation and improved treatment for diarrhea and
acute respiratory disease. The under-five mortality rate for diarrhea disease declined by
38.2% during the 1990-97 period (UNICEF, 2001). On the other hand, some
epidemiological studies on health and environment have found linkages between living
conditions, drinking water quality and health (Mihajlovic-Vukmirovic, et al, 2001). The
deteriorating water quality of drinking water may well reverse the positive trend in under five
mortality rate. The situation is particularly acute for urban slums, populated by refugees,
Roma and IDPs, as discussed under “vulnerable populations” below.
25.
The FRY public health sector utilizes a risk factor and exposure approach to
environmental health, and it is from this perspective that, given the information on FRY
water quality in terms of specific contaminants whose health impact is well known (e.g.
arsenic, nitrates, carcinogens, pathogens) experts in FRY draw conclusions regarding impacts
of water on health. These conclusions are credible but we recommend that the public health
sector be strengthened in terms of environmental health capacity building and training in
epidemiological methods for environmental health studies. Public health institutes are keen
to receive training, equipment, and technical assistance.
26.
Air pollution. High ambient concentrations of pollutants have been associated by
international epidemiological studies with various negative health impacts. These are
summarized in Box A4. SO2 concentrations in some Serbian industrial settlements are within
the critical range that has been associated with negative health impacts. The same is true for
12
DRAFT
exposure to high PM and soot concentrations likely leading to higher mortality and morbidity
in several Serbian cities.
Box A4: Health impacts of air pollution
SO2. Exposure to sulfur dioxide in the ambient air has been associated with reduced lung function,
increased incidence of respiratory symptoms and diseases, irritation of the eyes, nose, and throat, and
premature mortality. Children, the elderly, and those already suffering from respiratory ailments, such
as asthmatics, are especially at risk. Health impacts appear to be linked especially to brief exposures
to ambient concentrations above 1,000 µg/m3 (acute exposures measured over 10 minutes). Some
epidemiological studies, however, have shown an association between relatively low annual mean
levels and excess mortality.
PM. Several clinical, epidemiological, and toxicological studies s have found statistically significant
relationships between high short-term ambient particulate concentrations and excess mortality in
different parts of the world. For example, using 14-to-16-year studies in six U.S. cities, and
controlling for individual risk factors, including age, sex, smoking, body-mass index, and occupational
exposure, Dockery et al. (1993) found a significant connection between particulate air pollution and
excess mortality at average annual PM10 concentrations as low as 18 µg/m3, well below the current
U.S. ambient standard of 50 µg/m3. Studies on the effect of particulates on human health summarized
by Ostro (1994) suggest an increase in human mortality rates ranging from 0.3% to 1.6% for each 10
µg/m3 increase in average annual PM10 concentrations. A study conducted on over a half million
people in 151 U.S. metropolitan areas during 1982–89 by Pope et al. (1995) found that death rates in
the areas most polluted with fine particulates were 17% higher than in the least polluted areas, as a
result of a 31% higher rate of death from heart and lung disease, even when most cities complied with
the U.S. federal standards for particulate pollution. Cities with average pollution that complied with
federal standards still had about a 5% higher death rate than the cleanest cities. In addition,
relationships between morbidity and short- and long-term exposure to particulate matter have been
found in a number of studies. Schwartz et al. (1993) found a significant increase in emergency room
visits among people under the age of 65 in areas with daily average PM10 concentrations that were less
than 70% of the U.S. air quality standard of 150 µg/m3.
NO2. Epidemiologic studies have rarely detected effects on children or adults from exposure to
outdoor nitrogen dioxide. Available data from animal toxicological experiments indicate effects on
pulmonary function of acute exposure to nitrogen dioxide concentrations above 3,760 µg/ m3 (WHO
1987). Studies with animals have found that several weeks to months of exposure to nitrogen dioxide
concentrations less than 1,880 µg/m3 causes both reversible and irreversible lung effects and
biochemical changes. Animals exposed to nitrogen dioxide levels as low as 940 µg/m3 for six months
may experience destruction of cilia, alveolar tissue their affinity for certain dyes.
Source: Adapted from “Pollution Prevention and Abatement Handbook 1998”, World Bank
27.
Anecdotal evidence is available on the impact of air pollution on human health in
Serbia and Montenegro. It has been reported that, “bad air quality causes some health
problems, such as increased bronchial and laryngeal diseases, especially in the industrial
regions of Bor and Pancevo” of Serbia [9, page 24]. Similarly, when the study team visited
the Kolubara-Obrenovac corridor, which consists of about 3,100 MW of lignite-fired power
plants as well as related ash pits and the Kolubara lignite mines and is located in a small, 26mile corridor, local officials reported that high levels of respiratory problems were the
primary problem in this region. In Montenegro, Ministry of Environmental and Physical
Planning’s (MEPP) Environmental Status Report (2000) states that in the area of Pljevlia, the
site of a thermal plant and located in an enclosed valley with humid weather and, an absence
13
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of wind two-thirds of the year, the frequency of respiratory diseases is markedly above the
average for the Republic.
28.
Lack of proper waste management creates public health hazards for the poor in a
number of ways. First, as described in the section on waste management, hazardous waste is
not sorted out, but dumped without any prior processing on regular, mostly illegal, waste
dumps. Urban poor, notably Roma, who make a living by scavenging on waste dumps
without any kind of protection or training on the handling of waste, are exposed to risks of
injury and infection from sharp material. Second, leakage from waste dumps can
contaminate groundwater which constitutes the drinking water source for poor communities
living nearby. Third, inadequate incineration or incineration of unsuitable materials can
result in the release of pollutants in the air and constitute a health hazard to nearby Roma,
refugee or IDP communities.
Vulnerable social groups and environment degradation
29.
Roma, refugees and IDPs residing in special camps and / or waste dumps in urban
areas are among the most vulnerable social groups in FRY. Rural poor in the resource poor
Southern Serbia also deserve attention.
30.
In Serbia, there are an estimated 600,000 refugees and displaced persons who are
among the most vulnerable with inadequate housing and much higher unemployment rate
than the local population. Around 20,114 refugees and 11,486 IDPs are accommodated in
collective centres clearly represent the most vulnerable part of this group.7 An estimated 25
% of the IDPs and refugees are below the WFP poverty line. Among this extremely poor
section of the population, living, hygienic and sanitary conditions are the worst and economic
and social cases (the unemployed, the elderly, single parents, orphans and those who are
unable to care for themselves) are concentrated.
31.
The Roma minority is a key priority poverty risk group in FRY. There are thought to
be 400,000 – 500,000 Roma in FRY concentrated mainly in southern Serbia, around
Belgrade, Vojvodina and Montenegro. Within Roma settlements, access to utility and public
services are nonexistent or limited and the most serious problems are lack of access to
electricity, water, sewage, and garbage collection. The prevalence of communicable disease
associated with poor living conditions such as hepatitis and trachoma was confirmed in
discussions with public health officials in both Serbia and Montenegro. An international
NGO, Oxfam, conducted a study on the health status and living conditions of Roma
settlements in Belgrade and Kragujevac in 2001 (Oxfam 2001). The results clearly point to
inadequate basic services and the consequent health impacts:
•
•
•
7
19,000 Roma people live in 64 “unhygienic” (meaning no piped water in the house or
yard) settlements, usually in shacks, in Belgrade;
Health was identified by the Romas as one of their major problems;
Life expectancies are short (only 1.4% were older than 60) and living conditions are one
of the contributors to early mortality;
UNHCR and ICRC data, 2001
14
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•
•
•
•
•
63.6% of households access water from public fountains;
More than half have outdoor latrines and a third have no latrines at all. In the majority of
settlements there are no sewage system connections or septic tanks;
30% of Roma children below 6 had diarrhea during the two weeks immediately prior to
the survey, a figure three times great than the general population;
45% of Roma children are malnourished; and
More than 50% of children between 7-19 do not attend school.
32.
While poverty is less widespread in rural areas than in urban areas mainly thanks to
the resilience of agricultural production, there are significant regional differences in Serbia
(Box A2). Although figures on poverty incidence and depth are not available for Southern
Serbia, it is the poorest region in Serbia. Much of the area is mountainous, with 37 percent
of the total area classified as forest and only 54.9 percent classified as agricultural land.
Moreover, only 55% of the agricultural land is arable, further reducing the per capita
availability of cultivable land to 0.28ha/capita. This scarcity of arable land and the harsh
climatic conditions in many areas limit the potential for agriculture. Agriculture is
dominated by livestock production, particularly cattle and sheep. Production is largely
subsistence. Rural communicates tend to be located around small pockets of arable land, and
are small and highly dispersed, largely isolated from markets and each other. Household
incomes are very low, particularly in isolated areas, a consequence of the low potential for
agriculture, poor access, and lack of opportunities for non-farm employment. The resulting
poverty levels have been exacerbated by the out-migration of the last 50 years, which has left
a predominance of older people in rural areas. Many villages have been abandoned entirely,
and others face the same prospect.
33.
Analyses on the vulnerability of rural poor in Southern Serbia (and other regions of
Serbia and Montenegro) to environmental degradation, such as land degradation, worsening
of water quality, and to natural disasters, such as floods, are not available. This is an area
that should be studied in more detail in order to inform policy decisions on regional
environmental and natural resources policy. Once areas are identified where the rural poor
are highly vulnerable to natural resource degradation and where poverty and lack of
knowledge on sustainable resource management are identified, the government may consider
promoting income generating activities that are environmentally friendly and use natural
resources sustainably. Examples of such activities include eco-tourism, growing high value
crops, fruits and vegetables, manure management. Regional successful experiences in
achieving sustainable resource management while reducing rural poverty, such as in Turkey,
may be considered for replication (Box A5).
Poverty and natural resource degradation
34.
The rural poor whose livelihoods depend on limited natural resources, such as land
and drinking water, can be very vulnerable to their degradation. As discussed above, rural
poor in Southern Serbia, and those living in mountainous parts of Montenegro are highly
dependent on the quality of natural resources. Land degradation as a result of overgrazing
and deforestation are likely to be significant issues in mountainous regions and need to be
studied. In particular, the reliance of rural poor on fuelwood for heating may increase in the
face of increasing electricity prices as they are not serviced by district heating or natural gas
15
DRAFT
networks. This may lead to increased uncontrolled wood cutting, exacerbating land
degradation. Fisheries is another area where poverty can exacerbate resource degradation
through overfishing leading to a spiral of lower yields and increasing poverty. As discussed
in the section on Biodiversity and Protected Areas Management, there is evidence of
overfishing and resulting decreases in fish stock in the Lake Skadar area which is among the
poorest regions of Montenegro. Finally, as discussed in the section on Water Supply,
pollution of groundwater which is a significant source of drinking water in rural Serbia and
Montenegro, is common. The impact of this on the poor is high as they lack the resources to
purchase other sources of drinking water, such as bottled water.
Box A5: Turkey - Eastern Anatolia Watershed Rehabilitation Project
The project, approved in 1993 with a loan of US$77 million, aimed to restore sustainable land-use management
to degraded watersheds in Elazig, Malatya, and Adiyaman provinces, and to increase the incomes of
populations living in these areas, among the poorest in Turkey.
The project included improved management and cultivation of fodder, improved range management,
reforestation and oak coppice rehabilitation for fodder and fuelwood, soil conservation, improved crop farming
and fruit farming, bee-keeping construction of ponds for supplementary irrigation, and gully protection. It also
offered alternative income-generating opportunities such as the production of horticultural crops, forages to
support stall feeding, aromatic and medicinal plants with export opportunities, bee-keeping, and vegetable
production.
The success of the Eastern Anatolia Watershed Management Project hinged on a participatory approach that
fostered unprecedented cooperation, organizationally and technically. Government agencies and local
communities jointly planned, implemented, and continually fine-tuned agricultural productivity activities within
a program of local forestry and soil conservation.
Communities then chose from a "menu" of options developed by project staff, but based on community
knowledge, comprised of various treatments. These treatments coupled long-term benefits—such as forestry,
range, and conservation activities—with short- and medium-term benefits related to irrigated crops, fallow
reduction, horticultural crops, medicinal and aromatic crops, and forages. Communities continued to be
involved by helping with the implementation and contributing to the costs of their plan.
Project monitoring and evaluation data indicate that range management has been successful, as measured by the
reduction in the number of grazing animals, a substantial increase in fodder trees, increased adaptation of
dryland and irrigated forages, and a shift to stall feeding. Indicative of the project's success in improving family
incomes is that out-migration has declined in several villages, and some family members are returning from the
cities to project areas.
Poverty and vulnerability to natural disasters
35.
Serbia and Montenegro are severely exposed to earthquakes and floods risks. The
most severe earthquake was in Montenegro in 1979 when 131 persons were killed, 1,000
persons were injured, and 100,000 homes were destroyed. Its damage was estimated at US$
2.7 billion. During the 1990s, more than 200,000 ha were affected by floods, which resulted
in significant economic, social and environmental losses. The poor are particularly exposed
to flood and earthquake risks notably due to the location of settlements on riverbanks and
poor quality housing constructions. The country lacks a comprehensive strategy, which
includes preparedness, mitigation, recovery and reconstruction.
16
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References
1.
2.
3.
4.
5.
6.
7.
8.
9.
Republic of Montenegro Ministry of Environmental Protection, Environmental Status
Report (National Report prepared for the Meeting of the Task Force for the
Implementation of the Regional Environmental Reconstruction Programme for South
Eastern Europe (REReP), 9 November, Brussels, Podgorica 2000.
“Assessment of Nutrient Emissions and Loads Discharged into the Black Sea”,
Annex 6, Danube Regional Project / Project Brief submitted to the GEF in May 2001
FRY Statistical Yearbook, 2001
The Regional Environmental Center. 2001. “Environmental Analysis of FR
Yugoslavia”, Belgrade
Republic of Serbia Ministry of Health and Environmental Protection, Directorate for
Environmental Protection, Report on the State of the Environment for 2000 with
Priority Tasks for 2001+, Belgrade November 2001.
Lausevic, R. and M. Katic (ed.).2001. “Environmental Analysis of FR Yugoslavia”,
The Regional Environmental Center, Belgrade
Statistical Yearbook of Yugoslavia, 2001
Ministry of Health and Environmental Protection, Directorate for Environmental
Protection, “Performance Report for 2001”, Belgrade
17
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ANNEX 2: MACROECONOMICS AND ENVIRONMENT IN SERBIA
AND MONTENEGRO
This chapter discusses the links between the environment and macroeconomic trends and
projected reforms.
Structure And Trends of the Economy And Trade
36.
Pre-1990s. The Former Socialist Federal Republic of Yugoslavia (SFRY), which
comprised Serbia, Croatia, Slovenia, Bosnia and Herzegovina, Macedonia and
Montenegro, followed an industrialization and economic development strategy that was
based on import substitution and protectionism for domestic agriculture and industry,
which necessarily relied heavily on natural resource exploitation. The state created a
complex web of price and trade restrictions with the aim of providing food security to
domestic consumers, and cheap raw materials and energy for the industry. Agriculture,
mining, food processing and energy production contributed significantly to GDP.
Internal trade among the Yugoslav Republics comprising the Federation played an
important role in this economic system. Other partners were mainly Germany, Greece
and other COMECON countries. Foodstuffs, non-ferrous metals, machinery and
equipment, and chemicals constituted the main export products. The main imports were
foodstuffs, machinery and transport equipment, chemicals, and petroleum products.
37.
SFRY’s economy was characterized by large inefficiencies in raw material and
energy use, which contributed to high dependence on foreign energy resources and foreign
debt accumulation. Nevertheless, the Yugoslav economy was more decentralized; there was
much larger room for private enterprises. Citizens of SFRY enjoyed higher living standards
than those in most centrally-planned socialist countries. Per capita GDP in 1989 is estimated
at US$ 2,941.
38.
The 1990s. Major economic decline occurred in the 1990s starting with the break-up
of SFRY in 1991-1992. The SFRY common market and input supply ties among the
republics disintegrated. This, coupled with the effects of armed conflicts in the break away
countries and the ensuing UN sanctions, resulted in severe economic stagnation and
impoverishment of the population in the early 1990s (Figure A3). This was followed by a
period of severe hyperinflation which peaked in 1994. A period of seeming economic
recovery and reform attempts in the middle of the decade was cut short by the Kosovo crisis
in 1999. The severe economic decline of the 1990s may be summarized by key
macroeconomic indicators. In 2000, in both Serbia and Montenegro, recorded per capita
GDP was only about 50% of its 1989 level. Exports in 2000 were just one third of their 1991
level. Imports were affected somewhat less dramatically; in 1999 imports were around 60
percent of their 1991 level8.
8
Official indicators of economic activity are believed to underestimate economic activities given the large size
of the gray economy and the scale of barter trade, which intensified during the 1990s.
19
DRAFT
Figure A3: FRY, Serbia and Montenegro GDP movements in the 1990s* (Mln YUD**)
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
FRY
MONTENEGRO
Serbia
*
1999 and 2000 GDP figures for FRY do not include Kosovo. ** Constant 1994 prices.
Source: Federal Statistical Office
39.
The 1990s also altered the structure of the economy and trade from Serbia and
Montenegro. Production of basic foodstuffs gained in significance while industrial
production incurred heavy declines. Over the 1990s, exports of machinery, transport
equipment and finished goods fell significantly, and consequently the relative importance of
primary commodities rose. Imports of fuels, machinery and transport equipment also
declined during this period because of low investment demand and general declines in
economic activity. Agricultural output also fell, however to a lesser degree than industrial
output, providing foodstuffs to the FRY population including large numbers of refugees from
neighboring, former republics. Cereals were bartered for energy imports. The services
sector increased in importance, and FRY enjoy a positive trade balance in services [3].
40.
A look ahead. Taking the experience of other transition economies in the region as a
guide, it may be expected that the recovery of heavy industry will be modest. Selected
products, such as Serbia’s high quality steel products, may form an exception due to world
demand. Similarly, Montenegrin aluminum exports will continue to grow based on
increasing world demand for this product. Agriculture faces significant structural problems,
including low productivity, low quality as well as a continued heavy state intervention in
prices and quantities traded, making no-growth the most likely prospect for the short to
medium run. On the other hand, the services sector will likely continue to grow significantly
in the near to medium term. The Government of Montenegro also intends to significantly
increase the share of tourism services in its economy for which it has an adequate basis in
natural resources and cultural heritage.
Impact of Economic Activities on Environment And Natural Resources
20
DRAFT
41.
Provision of cheap raw materials and energy sources to industry was, until recently,
one of the pillars of the economic policy in FRY. This meant that prices for natural
resources, including mineral resources as well as timber and water, were kept at very low
levels that did not cover direct costs of their extraction and did not take into account
environmental externalities, such as air, soil and water pollution, deforestation and soil
erosion, and the opportunity cost of resource depletion to future generations. Industrial
production was characterized by very high raw material and energy intensities. Similarly, in
an attempt to increase agricultural output, chemical inputs, fertilizers and pesticides, were
heavily subsidized, leading to their excessive use. Agricultural non-point source pollution of
ground and surface waters was substantial. Very large, intensive livestock farms, lacking
proper wastewater treatment facilities, constituted significant point sources of pollution.
Underpricing of energy resulted in its excessive use, increasing the environmental costs
associated with its generation and consumption. Overall, little attention was paid to the
environmental impacts of policies designed to steer economic activities.
42.
The 1990s witnessed a severe deterioration in physical capital basis and infrastructure
as a result of lack of resources for maintenance and new investments. This is particularly
true for water and sanitation and solid waste utilities in urban areas. Investments in cleaner
technologies in industry were delayed or not carried out at all. Increased poverty made
people, especially in rural areas, more dependent on natural resources for their livelihoods.
In particular, it is claimed that use of wood for energy purposes and illegal woodcutting
increased significantly [9].
43.
Energy use intensity remained high in the 1990s - the average, 0.76 koe per unit of
GDP, is nearly triple the OECD average. It increased from 0.56 koe per unit of GDP
generated in 1991 to 0.78 koe in 1999. This suggests that while the economy shrank, the
energy use by the remaining activities actually increased. This increase may in large part be
explained by low energy prices that were not allowed to keep pace with inflation or
international fuel prices after 1997. Hence, while in 1997 the electricity price was USc 3.7 /
kWh, by October 31, 2000 the price merely USc 0.9/kWh which represented about one fifth
of the economic price level. Similarly, the October 31, 2000 price for district heating in
Belgrade for households, schools and hospitals (USc 5 / m2 / month) was equivalent to only
one-eighth of the cost-recovery level. Subsidized energy prices led to higher energy demand,
by households in particular. In Serbia, total annual demand for electricity increased by 21%
during the 1990s, driven by a 52% increase of electricity consumption in households. In
Montenegro, although industrial consumption declined by 17% during the 1990s, household
energy more than doubled, as the under-pricing of electricity led to the widespread use of
electric space heating.
44.
Economic slowdown of the 1990s also benefited the environment in some ways.
Most notably, financial difficulties experienced by farmers and the unavailability of
agricultural chemicals severely limited their use. Average fertilizer consumption dropped
from about 300 kg/ha to 100 kg/ha of arable land during the 1990s as a result of which nonpoint pollution became negligible [9]. This trend may reverse to some extent as the economy
recovers.
21
DRAFT
45.
Genuine savings, an integrated measure of economic and environmental performance,
indicates that in 2000 the FRY economy was not on a sustainable path of growth. The
indicator was –13.50 in 2000.9 In other words, the net addition to FRY’s assets that was
passed on to future generations was negative. The large negative rate was caused mainly by
already negative gross national savings, large consumption of fixed capital, and to a lesser
extent by moderate levels of carbon dioxide damage, and energy and mineral depletion.10
Compared to other transition economies FRY’s negative genuine savings were similar to that
of the Russian Federation, Kazakhstan and Georgia. In the former two, the low rate is a
result of high energy depletion ratios, while in Georgia, as in FRY, low genuine savings are
mainly a result of negative savings and high consumption of fixed capital (Table A 3).
Table A3: Genuine Savings in FRY in 2000 (% of GDP)
Gross Consumption
Net
Education Energy Mineral
Net
Carbon Genuine
National
of fixed
national expenditure depletion depletion forest dioxide savings
Savings
capital
savings
depletion damage
-3.6
8.9
-12.5
4.6
2.3
0.3
0
3
-13.5
Source: TSS Update 2002 and Little Green Data Book 2002, The World Bank
Table A 4: Genuine Domestic Savings in other transition economies, 2000 (% of GDP)
Belarus
Bulgaria
Czech Rep.
16.4 Georgia
0.5 Hungary
17.0 Kazakhstan
-6.1 Moldova
16.3 Poland
-29.6 Romania
9.0 Russian Fed.
12.7 Slovak Rep.
2.8 Slovenia
-13.4
18.8
17.2
Source: Little Green Data Book 2002, The World Bank
Macroeconomic Reform Policies and the Environment
46.
Macroeconomic reforms aim to restore economic stability and resume growth so that
the country can return to higher welfare levels that the Yugoslav society was used to prior to
1990. As international experience suggests, higher income levels bring with them popular
demands for better environmental quality. On the other hand, it would be naive to assume
that economic growth would automatically generate better environmental conditions. This
section attempts to identify the positive and negative effects of economic stabilization and
restructuring measures on the environment and the natural resource base, and to propose
possible interventions to counteract negative impacts.
9
“Genuine savings” is equal to net domestic savings, plus expenditure on education, and minus the value of
energy depletion, mineral depletion, net forest depletion, and carbon dioxide damage over a one year period.
Net domestic savings are equal to gross domestic savings less the value of consumption of fixed capital.
Education expenditure refers to the current operating expenditures in education, including wages and salaries
and excluding capital investments in buildings and equipment. Energy depletion is equal to the product of unit
resource rents and the physical quantities of energy extracted. It covers crude oil, natural gas, and coal. Mineral
depletion is equal to the product of unit resource rents and the physical quantities of minerals extracted. It refers
to bauxite, copper, iron, lead, nickel, phosphate, tin, gold, and silver. Net forest depletion is calculated as the
product of unit resource rents and the excess of roundwood harvest over natural growth. Carbon dioxide
damage is estimated to be $20 per ton of carbon (the unit damage in 1995 U.S. dollars) times the number of tons
of carbon emitted.
10
The contribution of carbon dioxide damage to the genuine savings rate would be reduced by half if carbon
was valued at its current market value of roughly US$10 / ton of carbon emitted.
22
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Stabilization Measures
47.
In Montenegro, the stabilization measures started already in 1998 and aimed to
reduce fiscal deficits and their monetary financing through the gradual introduction of first
the Deutsche Mark and then the EURO as the sole legal tender as well as donor financing of
the budget deficit. However, in 2000 the budget deficit actually increased as a result of raises
in wages and social transfers. Consequently, Montenegro signed a stand-by agreement with
the IMF in 2001. Serbia signed a stand-by agreement with the IMF also in the same year.
Both agreements were based on a pledge to increase fiscal discipline, engage in more
realistic budgeting, prioritize limited resources for pro-poor programs, and increase energy
prices, which had been the main driving force behind quasi-fiscal deficits. The Serbian
macroeconomic program also adopted non-inflationary financing of budget deficits, using
privatization proceeds, exchange rate unification and current account convertibility.
Structural Reforms
Price and Trade Liberalization
48.
By the end of 2000, the Governments of both Serbia and Montenegro had ceased
fixing prices below market clearing levels for most commodities.11 Furthermore, the drastic
trade reform that has been implemented at the federal level since late 2000 has included the
reduction of tariff rates from 37% to 6%, removal of almost all foreign trade licenses and
limitation of the use of quotas. FRY has also begun the longer-term process of accession to
the WTO and the negotiation of an EU Stabilization Association Agreement. The Federal
Government has also undertaken measures to reform customs and limit corruption and
smuggling. The Government of Montenegro has gone farther in liberalizing its trade than
FRY as a whole and has established a de facto customs territory. Environment related trade
regulations are those of CITES, and licensing requirements related to medical and
pharmaceutical products, and poisonous chemicals.
49.
Energy Price Reform. Energy price increases are among the most important reform
measures both from a macroeconomic and an environmental protection viewpoint. In 2001
and 2002, the governments of both Serbia and Montenegro increased electricity prices, in
Serbia district-heating prices were also increased substantially. Further increases are needed
and expected, for prices to enable financing of maintenance and new investments. Price
increases will also provide the incentive to substantially reduce the inefficiencies in energy
consumption by households and industry, which in turn will lead to reduced air pollution
from energy production. As illustrated in Figures A1 and A2, energy production contributed
significantly of SO2 and NO2 emissions in FRY. The other benefit for the environment of
increased energy prices is higher rate of cost recovery in energy production is that it will
allow power plants to have the funds to operate in an environmentally less damaging way,
such as through emissions controls.
11
In Serbia, Government continues to fix grain prices below market levels in an attempt to ensure the provision
of consumers with basic foodstuffs at affordable levels.
23
DRAFT
50.
In terms of macroeconomic benefits, energy price increases has also already reduced
about half of the quasi-fiscal deficit (QFD) due to energy subsidies, which was estimated at
US$1.1 billion, or roughly 10% of GDP in January 2001. Reduction of the QFD will help
keep the inflation at low levels, which in turn helps the poor and fosters an investment
friendly environment. Finally, lower demand for energy will reduce the country’s need to
import energy sources, reducing foreign exchange outlays.
51.
Further increases in energy prices may be difficult to implement due to problems of
affordability by the poor. In Belgrade, the WB funded Energy Efficiency and District
Heating Project has been designed to reduce this negative welfare effect by reducing the cost
of energy to households. In other less densely populated cities, and particularly, in rural
areas, energy price increases may make poor sections of society more dependent on coal and
fuelwood and hence increase illegal wood cuts which are currently estimated at 10% of all
wood harvests. Such shifts in energy use may also cause health damages through higher
levels of indoor air pollution. A coordinated effort of cost reduction measures, an
expanded energy efficiency program, and a targeted safety net for the poor should be
developed to fully realize the win-win results of energy price increases for the
environment and the macroeconomy.
52.
Price Increases in Water Utilities., Water supply and sanitation has deteriorated
significantly in recent years. This is mainly a result of low revenues. The revenue system
was based on cross-subsidization of households and social institutions, such as hospitals and
schools, by industry. In addition to capital deterioration leading to significant physical
losses in the order of 50% or more and limitations in water treatment and sewerage, the
system is plagued by high per capita water consumption (reaching 300 lpc/ d whereas
the average in Europe is 180 – 200 lpc/d), collection rates falling below 50%, lack of
demand management and misuse of water supply for non-household activities, such as
irrigation in peripheral areas. As discussed in chapter 6, the quality of water supplied as
well as coverage of water supply and sewerage is unsatisfactory in both republics. In
Montenegro, water supply and wastewater treatment are not sufficient to meet summer
time needs when tourists more than double the area’s population to over 500,000.12 As
a result of the low level of revenues, which do not cover operating costs, utilities have
become a drain on municipalities’ budgets. For example, Novi Sad Water Company had a
budgeted contribution from the municipality of US$3 million for 2001, against a projected
revenue from billing of US$5.4 million.13 [Chapter 9 of 3].
53.
In Podgorica, Montenegro, charges for water supply, waste and wastewater collection
were raised significantly. This should be replicated in other Montenegrin cities and in
Serbia. Increased tariffs has several benefits for the environment: First, it will reduce per
capita water consumption to levels that are more in line with Western European standards.
Second, increased revenues will allow utilities to carry out maintenance activities, remedying
physical losses as well as sewerage leakages. Increased revenues will also decrease the need
for subsidies and make funds available for expanding services to underserviced sections of
the society, such as the urban and rural poor. Increased drinking water quality and improved
12
The problems of the water sector are discussed in detail in chapter 6.
YUD 206 million and YUD 360 million, respectively. Converted at the average exchange rate for 2001, YUD
66.7/US$.
13
24
DRAFT
sanitation will reduce costs incurred by the society as a result of diseases associated with
water. Funds saved form subsidies may also be channeled to extending services to areas with
high tourism potential, notably the Adriatic coast of Montenegro, which is expected to
contribute substantially to the Montenegrin economy.
54.
Reforms in Wood Pricing: There is also a move towards making timber charges
(stumpage fees) reflect market conditions – new draft forest codes in Serbia and the new
forest code in Montenegro stipulate that these charges be established based on auctions.
Provided proper administration, multiple bidders and absence of collusion, this method of
price setting should provide higher revenues for the organization in charge of sustainable
forest management.14
55.
Agricultural Input and Output Prices: Price and trade liberalization have been limited
in the agriculture sector and there is much scope for reducing subsidies and making the sector
more efficient, which in many cases is beneficial for the environment as well.15. Profitability
of agriculture remains low mainly as a result of poor quality products, lack of modern capital
and difficulties in marketing. FRY does not enjoy a comparative advantage vis a vis
European markets in the products that are being protected by the Government. Thus
intensification of production or expansion onto marginal lands or wild lands and related
environmental problems are not expected in the short or medium terms. Input subsidies have
been removed which will likely dampened any increase in agrochemical applications that
may result from the modest recovery of the sector. In any case, soils have been so depleted
as a result of underfertilization in the 1990s, that any increase in nutrient application would
likely not lead to runoff but be retained in depleted soils. On the other hand, low profitability
of farming continues to fuel migration, especially by young people, to the cities. Increased
urbanization without accompanying improvement in municipal services exacerbates waste
and wastewater problems. In the long run, as liberalization proceeds, it is expected that FRY
will have to open up its markets to foreign agricultural products and will start producing
crops in which it has comparative advantage. At that time, the Government and civil society
will have to be concerned with the environmental consequences of possible, renewed
intensification and expansion of agricultural production.
56.
Increased integration with world markets provides an opportunity for Serbia and
Montenegro to promote its organic farming and other certified natural resource production to
capture niche markets. Their closeness to European markets where demand for organic
foodstuffs is ever increasing and the fact that in many areas cultivation has been de facto
without any chemical inputs for nearly a decade provides a very advantageous starting point
14
For more information on forest management and its financing the reader is referred to Section 2.6. Forest
Resources.
15
In Serbia, import quotas as well as licenses for imports or exports have been abolished and maximum tariff
and levy rates have also been significantly reduced. However, export quotas continue to apply to 31 tariff lines
of basic agricultural goods, including wheat, corn, flour, live animals, edible oil, soybeans, sugar, sunflower
products and leather products. Furthermore, effective rates of import protection remain high, and variable
levies are used as a means to protect nonviable enterprises and production activities. Current budget support, in
the form of producer subsidies for milk, tobacco and sugarbeets, results in producer prices well above import
parity for milk and sugarbeets and above export parity for tobacco. Further incentives are paid to farmers to
retain heifers and sheep of improved genetic quality.
25
DRAFT
for these republics. Certification of timber and timber products is another area that holds
promise for increased trade revenues from environmentally sustainable practices.
57.
Foreign Direct Investment. Liberalization measures will likely encourage foreign
investment in FRY. Many investors, particularly multinationals based in countries with high
environmental sensitivity, are attracted to investments associated with good environmental
performance so that they can maintain their reputation and market share. As such there is
pressure for them to introduce modern technology that enhances raw material and energy
efficiency and reduces harmful emissions into the environment. In the event that investors
are not environmentally cautious however, that FRY’s environmental policy, including
regulations and economic instruments, be designed and strictly enforced to discourage
business ventures whose pollution levels are above acceptable levels set by the law.
Privatization
58.
The Governments of the Republics of Serbia and Montenegro have embarked on an
ambitious program of privatization. In Serbia, the Privatization Agency plans to privatize
1120 enterprises (120 through tender, 1000 by auctioning)16. Enterprises slated for
privatization include agro-combinats, including large feedlots, and industries dealing with
chemicals production, wood and agro-processing (tobacco, fruits, vegetables, sugarbeet,
meat, grain), textile, mineral (aluminum, iron) processing. Most these companies have had
little if any investments in upgrade in recent years. There are also initiatives to privatize the
operation of utility services, such as waste management in Belgrade, that have past and
ongoing environmental liability issues. In addition to its economic advantages, privatization
offers an opportunity for improved environmental performance. International experience
suggests that this is because of (i) more efficient use of resources as a result of greater
attention paid by private companies to waste reduction and increased productivity of assets;
(ii) improved access to capital, especially in the case of foreign direct investment, which
promotes increased investment in new, more efficient and cleaner technologies; (iii) exposure
to international management practices (e.g. environmental management systems such as ISO
14000) and market requirements as a result of increased export competitiveness; (iv)
separation of government and management of enterprises, or environmental regulators and
the regulated enterprises, has been shown to promote better enforcement of regulations as
pressures to protect inefficient industries are no longer in place [10].
59.
However, there is no guarantee that the privatization will help the environment.
Experience also suggests that often in the early years the operators may try and make what
they can from the existing technology and not worry too much about the environment. To
ensure that remediation takes place, there should be an adequate regulatory capacity in place
to encourage enterprises to adopt more environmentally sustainable practices. Second
environmental considerations need to be incorporated into privatization transactions. This
entails setting clear environmental performance objectives and dealing with past
environmental liabilities. A strong environmental policy and regulatory system needs to be
16
Vecernje novosti. “Interview with Aleksandar Vlahovic”, Serbian Minister of Economy and Privatisation,
June 29, 20002
26
DRAFT
in place to ensure compliance with agreed targets and requirements, and to establish
incentives for continued environmental improvement.
60.
At present, there is no clear regulatory framework in Serbia or Montenegro for
incorporating environmental concerns into the privatization process. Early experience in the
privatization process in Serbia has shown that potential, foreign investors have demanded,
prior to sale, an assessment of the environmental liabilities associated with enterprises and
the World Bank loan for technical assistance on privatization also require environmental due
diligence in transactions. However, the legal framework regarding past liabilities is not in
place, which may reduce the number of bidders in sensitive cases. It may be advisable for
Government to explicitly assume acceptance of responsibility for past environmental damage
so as to reduce risks for potential buyers. Recent experience in Bulgaria indicates that this
can produce win – win situations by accelerating privatization and attracting environmentally
conscious, strategic international investors to the country. (See Box A6 below).
Financial Sector/Banking Reform
61.
In the Republic of Serbia, reforms are under way to establish a strong banking
system. A viable financial system will help environmental protection as it will help
industrial enterprises access capital needed to invest in more energy and raw material
efficient technology as well as in emissions control technology. A working banking system
will also provide consumer credits, which may be used to acquire energy efficient heating
systems and better cars. Agricultural productivity also depends upon a sound banking system
that provides working capital for farmers. Property rights and land reform are key to the
provision of collateral.
Fiscal and Public Sector Management Reform
Despite the overall fiscal benefits, reducing government expenditures has led to reduced
resources for environmental agencies that monitor environmental quality and enforce
environmental regulations. For example, in the Republic of Serbia, the expenditures of the
Department Environmental Protection (DEP) declined from about US$1.5 million in 1998 to
US$0.7 million in 2001, with the lowest level, US$0.45 million being reached in 2000. In
2000, DEP was allocated US$645 thousand as opposed to US$ 810 thousand, planned earlier.
To some extent, the reductions reflect the changing role of Government in a market economy
and the movement of responsibility for some environmental expenditures to the private sector
municipal utilities or individuals. At the same time, the reductions significantly lowered
DEP’s capacity to implement planned activities and to carry out emergency measure to
mitigate environmental damages resulting from industrial accidents. With respect to the
latter, these are measures that should shift to the private owners of these industries. Thus, to
ensure the DEP is adequately funded, there is a need to better define the roles of the DEP and
the cost of meeting them.
27
DRAFT
Box A6: Benefits of Incorporating Environment into the Privatization Process
Contrary to a common misperception, addressing environmental considerations during
privatization does not impede the process. On the contrary, it reduces investment risks and
uncertainties about potential future costs. Foreign investors, in particular, are concerned about
possible unfair treatment regarding liability for past damages and about unexpected
environmental requirements. In addition, international financial institutions increasingly require,
as a condition for providing loans, environmental disclosure and a financial accounting for
environmental liabilities in corporate financial records.
While environmental issues typically represent only a small part of all investment risks and costs,
they become deal breakers if there are uncertainties about potential environmental liabilities,
especially if the risks are large compared with the value of the enterprise (below). Of particular
interest from the environmental point of view are privatization transactions in such sectors as
mining, ferrous and nonferrous metallurgy, petroleum refining, chemicals, and power. From the
privatizing government’s perspective, including clear environmental requirements in the
privatization transaction can facilitate privatization, generate higher revenues, and avoid delays
and future disputes.
Environmental Concerns as a Deal Breaker: Peru’s 1992 Mining Privatization
In 1992, the government of Peru embarked on the privatization of its biggest mining company,
Centromin Peru. First Boston Bank and a local company, Macroconsult, prepared the company
for privatization, setting a base price of $340 million and seeking commitments for an additional
$240 million in investments over a three-to-five-year period following privatization. The
enormous productive potential of the company generated high interest: 28 companies from
several countries, including Canada, China, Japan, and the United Kingdom, signed up for the
auction. A couple of days before the auction, however, reports appeared in the domestic and
international media about possible large environmental damages. None of the investors
submitted proposals during the first call for bids in April 1994. The company was restructured
and was later sold, after environmental problems had been thoroughly addressed.
Source: Adapted from “Environmental Implications of Privatization”, Pollution Management In Focus, No.5,
1999
62.
On the other hand, the Government of Serbia intends to reduce corruption with a
combination of measures, including legal reforms, simpler and more transparent trade and tax
regimes, and customs reform. This is clearly a positive development for environmental
protection, as the reduction of corruption and the gray economy are one of the preconditions
for enforcement of environmental regulations and the successful implementation of economic
instruments for environmental protection.
References
1.
2.
Mileusnic-Vucic V., Chapter 14: Yugoslavia in “Sourcebook on Economic
Instruments for Environmental Policy”,
Nordstrom, H and S. Vaughan. 1999, “Trade and Environment” Special Studies 4,
World Trade Organization, Geneva, 1999
28
DRAFT
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
WB and EC. 2001, “Federal Republic of Yugoslavia. Breaking with the Past: The
Path to Stability and Growth”, Volume 2: Assistance Priorities and Sectoral Analyses,
Washington, D.C. and Brussels
Agricultural Sector Review, Draft Concept Note
Author??, year??, “Economic Instruments for Solid Waste Management in Serbia” in
Designing Waste Management Strategic Policy Framework, ??
Rankovic, N. 2000. “Forests and Forestry”, Yugoslav Survey, Volume 3
Klarer, J., P. Francis, and J. McNicholas. 1999, “Improving Environment and
Economy”, Sofia Initiatives on Economic Instruments, The Regional Environmental
Center for Central and Eastern Europe, Szentendre, Hungary
Development”, UNEP, Earthscan Publications.
Protection, “Performance Report for 2001”, Belgrade
Lovei, M. 1999. ”Environmental Implications of Privatization”, Pollution
Management in Focus, Discussion Note Number 5, The World Bank, Washington,
D.C.
Mileusnic-Vucic, V. 2002. “State of Economic Instruments in Yugoslavia from 1997
to 2002”, Law and Reality, Vol. 1, Belgrade.
Vincent J.R. et al. 2001. “Public Environmental Expenditure In Indonesia”, EASES
Discussion Paper Series, East Asia Environment and Social Development Unit,
World Bank, Washington, D.C.
Statistical Yearbook of Yugoslavia, 2001
WHO, 2000
UNIICEF, 2001
29
DRAFT
ANNEX 3: ENVIRONMENTAL EXPENDITURES AND FINANCING
Public Environmental Expenditures and Financing
63.
The principles of environmental financing in Serbia and Montenegro were laid out by
the 1991 and 1996 Laws on Environmental Protection, respectively. Both laws advocate the
“polluter pays” principle. Enterprises or individuals that are the source of air, soil, and water
pollution, or cause damage to natural resources, are under obligation to adjust their activities
by adopting appropriate technology or by taking remediation measures so that their
environmental impact is limited to permissible levels set forth by regulations. All these
activities are to be financed from the enterprises’ own resources. Both laws also define in
broad terms the types of activities that may be funded using public resources (Box A7).
64.
As Box A7 indicates, both laws stipulate public funding of activities that are not in
line with the “Polluter Pays” principle. In particular, “creating co-financing of investments
capable of substantially reducing environmental pollution” should be mentioned. Rather,
what is needed is an effective environmental management system in which polluting
industries are induced to take remediation and mitigation measures. The role of a strong
public environmental agency should be to monitor and enforce environmental regulations.
65.
Both Laws also specify the sources of revenues for these activities. In Serbia these
include: i) pollution taxes; ii) budgetary funds originating from turnover taxes on pesticides,
detergents, plastic packaging and cigarettes at a tax rate of five percent, as well as from
turnover taxes on coal, oil and oil derivatives, and on motor vehicles at the tax rate of one
percent; iii) one percent of total estimated investment for legally required impact assessments
on new plants in the industry, mining, energy and transport sectors; iv) interest on loans
extended by the government environment institution for environmental protection projects; v)
environmental fines; and v) other sources17.
66.
In Montenegro, the 1996 Environment Law lists the following sources of financing
for environmental protection activities: i) budgetary funds; ii) eco-charges; iii) funds from the
collection of environment related fines prescribed by the Law; iv) funds from particular
sources as prescribed by local authorities, subject to the approval of Government; and v)
funds from other sources.18 Eco-charges are defined as a) charges on investments (2% of the
investment value in the area of a national park, unless the project is in direct functional
relation to the protection of natural resources; and 1% of the investment value for the
investment projects for which an EIA is required by Law); and b) charges on pollution of the
environment (emission of air polluting substances, consumption of fossil fuels; use of ozone
depleting substances; use of lubricant oils; production and disposal of hazardous waste; and
use of motor vehicles, aircrafts and vessels).
17
18
Article 88.
Article 35
31
DRAFT
Box A7: Activities to tbe funded with public resources as stipulated by current Laws
Republic of Serbia19:
•
•
•
•
•
•
•
•
Monitoring the state of the environment;
Co-financing equipment for technical and scientific institutions that are in charge of
specialized work for the needs of the Republic in the area of environmental protection;
Co-financing of specialized training of personnel in technical, scientific, business and
administrative organizations dealing with environmental protection of an interest to the
republic;
Creating of investments capable of substantially reducing environmental pollution;
Incentives for developing preliminary designs, applied scientific research projects,
studies, surveys, contracting projects;
Financing of programmes for the protection and development of natural resources
under protection;
Financing of organized efforts aimed at the prevention and rehabilitation in the area of
environmental protection (Nature Conservation Club, Young Researchers of Serbia,
Fishermen’s Federation, Hunters’ Federation, Inventors’ Federation, the Red Cross,
and the like); and
Co-financing of publications, magazines and propaganda drives in the area of
environmental protection.
Republic of Montenegro20:
•
•
•
•
•
•
•
•
•
Realization of the Ecological Program;
Co-financing of programs for natural resources protection and development;
Financing the development and implementation of the rehabilitation program in case of
an unknown polluter;
Co-financing measures of intervention in cases of emergency related to pollution of the
environment;
Co-financing of other investment programs which contribute to significant reduction of
environmental pollution;
Providing funds for case studies, relevant scientific projects, studies, plans21 and
construction projects;
Co-financing of professional training of staff in professional, scientific, industrial and
public institutions related to the field of environment of Republican interest;
Co-financing of organized pollution prevention and environmental rehabilitation
activities that are carried out by ecological NGOs; and
Co-financing of publications, magazines, professional and scientific gatherings and
information/promotional activities in the field of environmental protection and
amelioration.
67.
The Serbian Law stipulates that the Ministry would allocate these financial means on
the basis of a medium term program adopted by the Government and its annual plan. The
Law does not specify specific criteria, such as public good nature of investments, or benefit19
Article 89 of Environmental Law (1991).
Article 41 of the Environment Law (1996).
21
Law says “elaborates” (Article 41)
20
32
DRAFT
cost or cost effectiveness to guide investments. Rather, it states that the “Ministry shall set
out the criteria and more specific conditions for the channeling and allocation of funds.”22
The Montenegrin Law does not provide any guidelines on the allocation of these resources
by the Ministry.
68.
In reality, in both republics the “polluter pays” principle is rarely implemented and
although data could not be collected by the study team, the expenditures incurred by industry,
whether private, socially owned or state-owned, is believed to be very limited. The reasons
for this are various and include the existence of a large gray or untaxed economy, estimated
by some at 40% of the entire economy, inability of a number of fined companies to pay these
fines due to their financial insolvency, and lack of a well functioning financial intermediation
system, which among other things, would also facilitate access to investment capital for
environmental pollution control. Furthermore, legislative loopholes regarding the
enforcement of delayed payments, organizational weaknesses in the collection of charges,
limited power for inspectorates to issue sanctions in case of non-payment, and lack of
political will to enforce prevent effective enforcement of economic instruments designed to
protect the environment. Finally, environmental inspectorates lack modern measuring
equipment and have to rely on the enterprises’ self-assessment in assessing their compliance
level with set standards [1].
69.
It should also be noted that environmental taxes and levies are rarely used as
policy tools but are often seen as sources of revenues. A striking example is the
“environment tax” on investments that are subject to and pass the EIA procedure. As
this tax is not tied to environmental performance, and it does not serve as an incentive
to improve and protect environment, but may actually constitute instead a disincentive
for investments. Such a fee is only justified if it covers no more than the administrative
costs of reviewing the EIA of an investment proposal.
70.
The majority of expenditures to control, monitor and prevent environmental damage
is incurred by the public sector, in particular, the republic level environmental agencies DEP
(Serbia) and MEPP (Montenegro), the city government of Belgrade, and the Federal level
Environment Directorate (FED). In 2001, DEP’s and MEPP’s expenditures were US$ 660
thousand and US$ 740 thousand respectively. DEP’s expenditures have more than halved
since 1998, while those of MEPP have actually increased (Tables A5 and A6). Like DEP,
federal level expenditures also declined over the same period (Table A7). Data available for
the City of Belgrade indicate that in 2001, it spent approximately US$950 thousand on
environmental pollution and public health control measures. A breakdown of these
expenditures is provided in Annex 1.
22
Article 90
33
DRAFT
Table A5: Serbia DEP expenditures (US$ million)
MOE / DEP
Expenditures
1.51
1.00
0.45
0.66
Year
1998
1999
2000
2001
National
Income23
9,723
6,639
NA
NA
Share in GDP
0.016%
0.015%
NA
NA
Note: IMF statistics on exchange rates were used to convert YUD to US$. These are
YUD 10.5/US$ for 1998, YUD 19/US$ for 1999; YUD 44.4/US$ for 2000 and
YUD 66.7/US$ for 2001.
Table A6: Montenegro environment related expenditures by MEPP (US$ million)
MEPP
environment
Year
GDP
Share in GDP
expenditures
1998
0.52
724.22
0.072%
1999
0.47
679.01
0.070%
2000
0.63
591.55
0.106%
2001
0.74
NA
NA
Source: MEPP
Table A7: Overall and environment-related federal expenditures (US$ million)
Year
Total
expenditures
Environmental
expenditures
1998
1999
2000
2001
923.14
834.11
507.25
687.76
0.11
0.16
0.19
0.24
Percentage
0.012%
0.020%
0.038%
0.035%
Source: Federal Government of FRY
71.
Time series data on annual capital and operations and maintenance expenditures by
public utility companies for water, wastewater and waste management related services could
not be collected by the study team. Nevertheless, accounts by relevant agencies contacted
and background studies suggest that investment and maintenance expenditures were minimal
in the 1990s leading to a dilapidation of the existing infrastructure [Chapter 9 of 3]. As
discussed above, due to low tariff revenues, bare operating expenses could not be covered by
the utility companies without subsidization from municipalities. During the past few years,
following FRY’s reintegration with the global community, donor funding has become
available for selected investments. These are discussed in Annex 6.
72.
Table A8 indicates the breakdown of expenditures by DEP. The largest expenditure
items relate to remediation of hazardous waste and to industrial accident response, both of
which have been identified by DEP as two of the most pressing problems [9]. Support to
industrial enterprises to study and document their environmental impact was accounted for
23
Insert definition from Statistical Yearbook. Data not available for 2000 and 2001.
34
DRAFT
15% of DEP expenditures in 2001. While this may seem to contradict the polluter pays
principle, it is not uncommon in the region to provide such seed funding to polluting
industries as an incentive for follow-up investments in cleaner technology.24 Expenditures
towards increasing DEP’s inspection capacity and for monitoring and pollution assessment
also made up significant parts of the total expenditure. These areas of expenditure appear to
be in line with the public institutions’s mandate as defined in the 1991 Law, as well as with
the pressing problems the sector and the institution face [9].
Table A8: Breakdown of DEP expenditures in 2001 (US$)*
Expenditure item
Air quality monitoring
Environmental protection report
Danube River water quality protection
Acquisition of equipment for industrial accident response
Acquisition of equipment for database
Training of staff
Investment in assessment of environmental pollution
Projects about hazardous waste
PCB in "Prva Iskra-Baric"
Experts in Directorate Commission
Assistance to NGOs
Establishment of special nature reserves
Acquisition of inspection equipment
Training of inspectors
Publications
Subsidies to industrial enterprises for the study and
documentation of environmental impact
Documents for international cooperation
Experts commission for legislation
US$
30,003
4,500
19,502
90,008
19,502
15,001
60,006
105,010
10,501
10,501
30,003
22,502
45,004
22,502
15,001
Percentage
5%
1%
3%
14%
3%
2%
9%
16%
2%
2%
5%
3%
7%
3%
2%
97,509
15%
30,003
5%
18,002
3%
Total
645,059
100%
Source: DEP, *: Amounts were converted from YUD using average exchange rate YUD 66.7/US$.
73.
Funding for public expenditures is allocated directly from the budget. Earmarking
was abolished in both Serbia and Montenegro as part of the fiscal reforms that these
economies have undergone in recent years. This will allow greater budgetary flexibility for
macroeconomic policy makers. Before this policy change, public environmental
expenditures were funded in part through budgetary transfers and in part through earmarked
revenue sources. Although Serbia’s 1991 Law specified several revenue sources for
earmarking (see above), in reality only two were earmarked. These were “environment
taxes” on investments and taxes on commercially collected rare flora and fauna species.
Revenues collected from these sources and their rate of coverage of DEP expenditures varied
across years (Table A9). Revenues from other environment related taxes and fines have not
been estimated, but are likely to be large.
24
No financial support was provided for actual investments.
35
DRAFT
Table A9: Planned and realized revenues and expenditures (US$ million)
Year
Projected
Budget
revenues from allocation
Total planned
earmarked
requested
expenditures
charges
from MOF
Realized
expenditures
Revenues from Realized
ear-marked
central
charges actually budget
collected
allocation
Realized
expenditures /
planned
expenditures
1998
2.51
0.33
2.17
1.51
0.06
1.45
60%
1999
1.25
0.68
0.57
1.00
0.67
0.33
80%
2000
0.65
0.33
0.33
0.45
0.19
0.26
68%
2001*
0.81
0.37
0.81
0.66
NA
0.66
81%
Source: DEP
* In 2001, earmarked revenues were transferred to the central budget, with central budget allocation becoming
the only source of revenue for the MPE.
74.
In recent years, the Serbian government environment institution, like other
government agencies, has been affected by tight budgetary measures. Budget allocations to
the DEP, excluding earmarked revenues, decreased from US$ 1.45 million in 1998 to US$
0.26 million in 2000 (Table A13). In 2001, including revenues derived from formerly
earmarked sources, the transfers amounted to US$ 0.66 million. This amount was less than
the original budget allocation for 2001, US$ 0.81 million. DEP claims that this significantly
lowered its capacity to deal with pressing environmental issues, notably industrial accidents,
and hurt its credibility with contractors as it could not honor its commitments [9]. Tight
budgetary discipline will continue in the years to come. While the Ministry of Finance will
continue to project budget allocations at the beginning of the fiscal year, funds will be
transferred periodically contingent upon the availability of funds in the central budget and the
institutions’s successful justification of the funding requested.
75.
In the past, there appeared to be concerns about transparency and justifiability of
resource allocations from the special environment account supplied by earmarked revenues.
Recently efforts have been made by DEP to introduce transparency and more efficiency to
public fund allocations. In 2001, nearly 80% of the DEP budget was allocated to activities
that were determined through a public competition. Projects were solicited according to the
activity categories listed as eligible for public funding under Article 88 in the 1991 Law.
Proposals had to include a description of the current environmental situation, specific results
to be achieved, and estimated costs. The announcement further stated that “projects and
contractors will be selected on the basis of the criterion of contribution to the establishment
of the system of environmental protection in Serbia. At this point, the possibility of fast
implementation with visible results achieved within budget resources available will be
considered an advantage. Scientific and research projects will not be included in the
competition.“ While the “criterion of contribution to the establishment of the system of
environmental protection” is not very clear, the competitive allocation of resources according
to pre-set criteria is a step in the right direction. There is a sense of prioritization,
consideration of cost effectiveness, and some measurement of benefits to be achieved. Both
ministries of environment need to build capacity to quantitatively assess the benefits of
project proposals for the society move against their costs.
36
DRAFT
76.
As the rest of the public sector, environmental agencies have to adhere to budgetary
discipline and principles of sound public finance. Efficiency, prioritization of objectives and
selection of activities based on economic benefit cost analysis, and where this is not possible,
on cost effectiveness re called for. Furthermore, tight fiscal conditions more than ever
necessitate a clearer division of labor in terms of environmental investments between the
public sector and the private sector. Limited public funds should be spent on activities that
have a clear public good nature, such as environmental monitoring, protection of biodiversity
and natural resources, and prevention of irreversible environmental impacts. Given their
benefit to the public as whole, these areas are likely to be properly funded only through
public bodies. The private sector should undertake investments that will yield mostly private
benefits. The government’s role has to create a regulatory environment that is conducive to
such investments. Economic incentives are important policy tools in this regard.
Economic Instruments
77.
A number of economic instruments are employed as environmental policy tools in
Serbia and Montenegro. In fact the number of economic instruments that are in force in FRY
does not compare unfavorably with those in other Central and Eastern European countries.
In 1998 Montenegro was one of two countries to implement air emission charges and a CO2
tax, surpassing all more advanced transition economies, such as the Czech Republic,
Hungary and Poland.
78.
Both republics have in place non-compliance fees for air emissions, wastewater
discharges, and waste. These are issued to industries when their emission and effluent levels
exceed the levels specified in their permits. Furthermore, in both republics there are user
charges for communal water supply, sewage and waste collection services. User fees also
exist for natural resources, including natural park visitor fees and resource extraction fees for
water, sand and gravel, and timber. In both Serbia and Montenegro, annual licenses are
issued for recreational fishing and hunting in return for a fee. In Serbia, a non-tradable
permit system is also in place for grazing on public pastures and for the collection of valuable
and rare animal and plant species, such as snails and mushrooms. It is reported that an
informal market has emerged for trading these permits [1]. In Montenegro charges for
grazing or for the collection of valuable species do not exist. Furthermore, both republics
have deposit refund systems for beverage containers. Moreover, in both republics there are
tax allowances in the form of exemption from wholesale sales, import taxes and accelerated
depreciation for investments in technology for environmental protection.
79.
There are several problems with the current state of economic instruments in FRY.
First, as discussed above, charges are too low to cover production, operating and
maintenance costs in case of energy and utilities and sustainable management costs in case of
natural resources, let alone taking into account negative externalities their production and
consumption generate. The implications of this are discussed above. Second, the current
levels of non-compliance fees are too low to provide a clear incentive to undertake
environmental protection activities. Fees have eroded as a result of inflation and, as such, do
not provide any real incentive for compliance. In fact, one of the reasons for the lack of
compliance is that they do not even cover the enforcement costs. It is reported that some
companies prefer to regularly pay the fines, than to invest in technology that would reduce
37
DRAFT
their effluent levels. Third, environmental taxes and levies are rarely used as policy tools but
are often seen as sources of revenues. A striking example is the “environment tax” on
investments that are subject to and pass the EIA procedure. As this tax is not tied to
environmental performance, and it does not serve as an incentive to improve and protect
environment, but may actually constitute instead a disincentive for investments.
80.
There is room for making greater and better use of economic instruments in
environmental policy making, since in some areas their implementation may be more cost
effective than solely relying on regulations. The primary area of focus should be reduction of
subsidies to energy and utility tariffs. Environmental fees should be abolished where their
sole purpose is revenue generation and they constitute a disincentive for business investments
without providing an incentive for better environmental protection. Compliance fees should
be adjusted to for inflation. Finally, the governments are advised to be most judicious when
considering the introduction of new taxes. Administration of a complex tax system is very
costly which recent fiscal reforms aimed to avoid.
38
DRAFT
Appendix 1 to Annex 3
Table A10: Belgrade city environmental expenditures in 2001 (US$)*
Activities
Analysis and quality control of city environment
CITY PUBLIC HEALTH INSTITUTE (Control of surface waters; measurement
of public noise level; testing of agricultural soil, testing of water from public
wells, analyses on request of Directorate)
Public zoohygiene
VETERINARY STATION “BEOGRAD” (Regular activity of catching and
exterminating stray dogs and cats; expenses of food, drugs, disinfections
devices; Drago product; Republic geodesist institute; Hidroproject – High
building; Beopetrol; Faculty of civil Engineering; Quality control)
Protection from ionized radiation
INSTITUTE “ Dr. D. KARAJOVIC” (Examination of radioactivity)
Funds for protected natural areas
Protection and advancement of environment
CITY PUBLIC -HEALTH INSTITUTE (Systematic control of basic and
specific polluting substances in air from stationary sources; control of Savsko
lake and bathing beach Lido)
REPUBLIC OF SERBIA PUBLIC –HEALTH INSTITUTE (Systematic control
of specific polluting substances in air from motor vehicle exhaust gases)
SKILLED TEAM FOR ERADICATION OF MOSQUITOES
SKILLED TEAM FOR ERADICATION OF TICKS
SKILLED TEAM FOR EXTERMINATION OF RODENTS
VISAN (Purchase of preparations for mosquitoes, purchase of preparations for
ticks)
NORDCHEMI (Purchase of larva killing preparations)
INSTITUTE ‘SRBIJA”
FACULTY OF AGRICULTURAL SCIENCE
EKOSAN (Larva killings and home versions)
YUGOSLAV AIRLINES (Airplane treatment)
MOSQUITOES TREATMENT FROM GROUND (Biosan, Ekosan, Institute
for disinfections, extermination of insects and rodents)
AVIATION UNION (Usage of Airports, Protection of storage)
TREATMENT OF TICKS (The command of 50. institute)
SYSTEMATICAL EXTERMINATION (Visan, Ekosan, DDD Promet, Institute
for disinfections, extermination of insects and rodents)
PAYMENTS BASED ON NEEDS (Young explorers, Beopetrol, Cicero print,
Ekosan)
TOTAL
Source: Belgrade City Administration, Secretariat for Environmental Protection
* Amounts converted from YUD using average exchange rate YUD 66.7/US$.
39
Expenditures
46,512
45,990
3,251
??
842,219
937,972
DRAFT
References
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3.
4.
5.
6.
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Nordstrom, H and S. Vaughan. 1999, “Trade and Environment” Special Studies 4,
World Trade Organization, Geneva, 1999
WB and EC. 2001, “Federal Republic of Yugoslavia. Breaking with the Past: The
Path to Stability and Growth”, Volume 2: Assistance Priorities and Sectoral Analyses,
Washington, D.C. and Brussels
Agricultural Sector Review, Draft Concept Note
Author??, year??, “Economic Instruments for Solid Waste Management in Serbia” in
Designing Waste Management Strategic Policy Framework, ??
Rankovic, N. 2000. “Forests and Forestry”, Yugoslav Survey, Volume 3
Klarer, J., P. Francis, and J. McNicholas. 1999, “Improving Environment and
Economy”, Sofia Initiatives on Economic Instruments, The Regional Environmental
Center for Central and Eastern Europe, Szentendre, Hungary
Development”, UNEP, Earthscan Publications.
Protection, Performance Report for 2001, Belgrade
Lovei, M. 1999. ”Environmental Implications of Privatization”, Pollution
Management in Focus, Discussion Note Number 5, The World Bank, Washington,
D.C.
Mileusnic-Vucic, V. 2002. “State of Economic Instruments in Yugoslavia from 1997
to 2002”, Law and Reality, Vol. 1, Belgrade.
Vincent J.R. et al. 2001. “Public Environmental Expenditure In Indonesia”, EASES
Discussion Paper Series, East Asia Environment and Social Development Unit,
World Bank, Washington, D.C.
Statistical Yearbook, 2001
WHO, 2000
UNIICEF, 2001
40
DRAFT
ANNEX 4: INSTITUTIONS, POLICIES AND LAWS
Introduction
81.
Environmental protection is regulated by a large number of federal, republic and
municipal laws and by-laws. Responsibilities for environmental protection are split between
the federal (Department of Environment within the Federal Secretariat for Health and Social
Policy) and the Serbian (Ministry of Environment and Natural Resoources) and Montenegrin
(Ministry of Environmental Protection and Physical Planning) levels. Institutions in charge
of the environment also exist in larger municipalities in both Republics. The federal level as
well as Serbia and Montenegro have designated specific institutions for dealing with
environment matters. In addition, several other line ministries and institutions at the federal
and republic levels, such as those responsible for Agriculture, Forestry and Water,
Construction and Urban Planning, and Energy and Mining, have competencies in the
environment sector and are designated to play a role in the environmental permitting process.
Environmental Policies
82.
The fundamentals of environmental policy in FRY are laid down in the Constitutions
of FRY and its Republics. The Constitutions of the FRY and of the Republic of Serbia (not
Montenegro) stipulate the right of citizens to a healthy environment as well as the duty of
citizens to protect and improve the environment according to the law. They establish the
government’s responsibility to ensure the functioning of the system for environmental
protection. The Constitution of the Republic of Montenegro (1994), declares in Article 1that
Montenegro is a democratic, social and ecological state. Serbia’s reform agenda contains
key directions for the republic, including needed reforms in the environment sector. The
Government of Serbia is committed to promoting environmental policy reforms and to
strengthening environmental institutions.
83.
Overall, the FRY has a number of well developed environmental strategies and action
plans at the federal and republic levels. However, implementation is hampered due to their
largely declarative nature, lack of harmonization with sectoral policies, and unclear role of
stakeholders in environmental protection. In addition, the Governments have not yet
developed sectoral strategies such as for forestry, biodiversity conservation or climate change
mitigation.
Priority Policies Identified by the Serbian Government
84.
In June 2001 the Government of the Republic of Serbia and later in September 2001,
the National Assembly adopted a Report on the Status of the Environment Including
Priorities for 2001. The Report contains not only the main features of the state of
environment but also provides a synopsis of current environmental policy and its main
priorities. Activities of the national environmental authorities should be oriented towards the
41
DRAFT
implementation of the development action programs, approved by the Government of the
Republic of Serbia and particularly focus on the following25:
•
•
•
•
•
•
•
85.
Return of Yugoslavia and Serbia to the international scene;
Complement and adapt legislation in view of required harmonization with
EU environmental legislation;
Contribute to the program of economic growth with step-by-step integration
of ecological principles;
Participate in the program of remediation of ecological hotspots;
Introduce new and cleaner technologies into the Serbian economy;
Foster environmental management capacity in industry with the aim of
improving compliance; and
Create a Ministry for Natural Resources and Environmental Protection in line
with recent Civil Service reforms.
The Report also highlights several priority environmental areas:
•
•
•
•
•
•
Institutional and legislative capacity building, including the organization of
training courses and improvement of efficiency of inspection and monitoring
services;
Establishment of a chemical accident response system;
Remediation and technical development of ecological hotspots, as a
precondition for agricultural development and sustainable economic growth;
Waste management, wastewater management and hazardous waste
management;
Management of protected areas, protection of biodiversity and nature; and
Environmental education; environmental awareness campaigns and
accessibility of information.
Priority Policies Identified by Montenegrin Government
86.
In 1991, the Parliament of the Republic of Montenegro adopted the "Declaration on
the Ecological State of Montenegro”. Last year, in March 2001, the Government of
Montenegro expanded on the Declaration by adopting a document entitled “Directions for
Development of the Ecological State of Montenegro”. This document:
•
•
•
emphasizes the need to build on positive linkages between market reform,
economic development and the environment;
recommends policies that tackle the underlying causes rather than the
symptoms of environmental problems;
urges the use of cost-effectiveness as a criterion in allocating domestic and
external financial resources; and
25
It should be noted that these priorities have not been broadly discussed and agreed upon with other sectoral
ministries, civil society, and the private sector.
42
DRAFT
•
concentrates on short-term actions (like improvements in water supply,
sanitation and waste management), which are consistent with the country’s
long-term economic, social and environmental objectives.
87.
In Montenegro’s Economic Reforms and Recovery Strategy, environmental issues are
reflected in a special program for infrastructure development, highlighting the need to
develop/improve water supply and waste water treatment, solid waste management as well as
the urgency of an Integrated Coastal Zone Management Strategy, in order to steer the
development of tourism in the Republic.
Institutional Framework
Federal Level Institutional Framework
88.
At the federal level, the Department of Environment within the Federal Secretariat for
Health and Social Policy cooperates with other federal ministries (Ministry of Economy,
Ministry of Agriculture) and institutes (Federal Hydro-Meteorological Institute, Federal
Institute for the Improvement and Protection of Health etc). Accentuated by the de jure and
de facto shift of competencies from the federal level to the Republics, the responsibilities of
the Department have diminished. As such, it continues to play an important role in
international matters, such as the negotiation and ratification of environmental conventions
and agreements, as well as obligations emanating from them, such as monitoring of
transboundary air and water pollution, and permitting of transboundary movement of
hazardous waste.
89.
Environment is not mentioned as a common function for Serbia and Montenegro in
the “Belgrade Agreement”, signed in March 2002. . Thus it will be mainly a responsibility of
the two Republics. However, the existing legal framework concerning environmental
protection, which consists of more than 150 laws, over 100 by-laws enacted at all levels
(federal, republic and local) and more than 50 international agreements, remains relevant
until promulgation of a new Constitutional Charter.
Serbia - Institutional Framework
90.
The newly created Ministry of Environment and Natural Resources (MENR)
is the main institution in Serbia responsible for environmental issues. It was created in June
2002 through the upgrading of the Directorate of Environmental Protection which was as an
administrative body within the Ministry of Health and Environmental Protection. MENR is
inter alia responsible for the protection against noise and vibration, hazardous and toxic
material, air pollution, ionic and non-ionic radiation, nature protection, and international
cooperation26. The Ministry is organized in five departments and has a total staff of 65, of
which 33 are engaged outside headquarters in inspection departments in Novi Sad, Sabac,
Uzice, Kragujevac, Nis and Pristina.
26
See Ministry for Health and Environmental Protection, Performance Report 2001.
43
DRAFT
91.
The Ministry of Agriculture, Forestry and Water (MAFW) is responsible for soil
protection, and the management of water resources and forests. The management
competencies have been delegated to a large extent to the three Public Enterprises for Water
Resources27 and to Srbija Sume, the public enterprise for the management of forests and
forestland belonging to the Republic. In addition, a number of institutes play a special role in
the environment sector: the Institute for Nature Protection is responsible for nature parks and
for the protection of wild fauna and flora; the Institute for Public Health monitors air, noise
and water quality; and the Hydro-Meteorological Institute monitors water quantity. The draft
new Law provides the legal basis for overcoming some of the institutional shortcomings,
which so far have hampered the effective implementation of environmental policy. It is
expected that the new regulations regarding the competencies of MENR will lead to clearer
demarcation and better cooperation and that the establishment of an Environmental
Protection Agency will inter alia lead to more systematic monitoring, enhanced
environmental information, and stricter inspections and enforcement.
92.
Municipalities are in part responsible for assuring compliance with environmental
law. To that end, there are some 200 environmental inspectors at the municipal level in
Serbia. Their responsibilities and in particular the modalities of cooperation with the
republican institutions are not regulated with adequate clarity. For example, according to the
Report on the State of the Environment for 2000, it is common that municipal environmental
inspectors issue permits or licenses for certain activities without ensuring that an EIA is
undertaken or that mitigation measures included in the EIA/Environmental Management Plan
are properly implemented. Consequently, a large number of works or installations are being
built or start operating without proper permit.
Montenegro - Institutional Framework
93.
MEPP, which has been operating since 1992, has been entrusted with supervising the
implementation of the Environment Law and associated by-laws. The environment
department has a staff of 20 and is divided in two units: one for environmental quality, which
includes the ecological inspectors, and one for environmental policy, economics and
information systems. Another Department in MEPP is responsible for physical planning,
public utilities, and waste management. Other ministries with responsibilities in the
environment sector are: the Ministry of Agriculture, Forestry and Water Resources (water
and soil protection, water resources management) and the Ministry of Industry, Energy and
Mining (mineral resources exploitation and power supply). Hence, issues that are central to
environmental protection, such as air pollution, water management and solid waste, are
within the competence of three different ministries. This rather complicated institutional
setup is not alleviated by formalized inter-ministerial bodies charged with coordination of
policies and actions. However, the modest size of the central administration of Montenegro
compensates to some extent for this, since it seems to enable informal cooperation. Only the
larger municipalities have staff in charge of environment28. However, there are no municipal
27
28
JVP Dunav in Novi Sad, JVP Sava in Belgrade, and JVP Morava in Nis.
The city of Podgorica for example has an Ecology Department of 4 persons.
44
DRAFT
environmental inspectors, except for the municipal enterprises in the larger municipalities.
Cooperation between MEPP and municipalities is not very developed and mainly informal in
nature.
Environmental Laws and Regulations
94.
In 1998, the Federal Assembly adopted the Law on Principles of Environmental
Protection. The law contains the basic principles of environmental protection, as well as
measures to be undertaken by different state institutions responsible for natural resource use
and environmental protection, as well as by economic entities and citizens. The law also
encompasses related issues including environmental monitoring, environmental management,
and penalties in the cases of violation of existing legislation. Special laws regulate certain
areas of environmental protection, including: national and international waterways, national
hydro-meteorological issues; transport of hazardous materials; trade in explosives and
poisons, pesticides; protection against ionizing radiation. Most of these laws were adopted in
the late 1980s and early 1990s and many are outdated and need to be reviewed in the context
of the transition to a market economy. The influence of federal institutions dealing with
environmental matters is likely to diminish. This includes the development of policies and
strategies to ensure the implementation of environmental legislation (domestic and
international). As such, the Governments of Serbia and Montenegro, must adapt their
regulatory framework to keep up with these trends.
Serbia - Environmental Regulations
95.
On May 16, 2002, the Government of Serbia accepted a proposed new Law on
Environmental Protection System and forwarded it to the Parliament for debate. The Law is
comprehensive and ambitious. Its objectives are to develop a consistent and modern legal
and institutional system for environmental protection, which is harmonized with the EU’s
framework, and will improve horizontal and vertical cooperation and raise responsibility and
efficiency. The new Law will replace the Environmental Law of 1991, which regulates the
protection of air, water, soil, forests and natural goods, and control of noise, ionizing
radiation, hazardous waste control, financing of protection and inspection, and environmental
protection in planning and construction. Bilateral and multilateral donors are supporting
efforts to develop a comprehensive, coherent and EU compatible legal framework for
environmental protection in Serbia, which will be followed by similar efforts in Montenegro
and at the federal level.
96.
New, consistent environmental legislation may lead to an improvement in the level of
compliance and enforcement, which are currently weak. According to information received
from the Directorate for Environmental Protection, 70-80% of all big factories are operating
without any environmental permit, and an even higher percentage are operating in breach of
environmental standards. Although the Directorate carries out regular inspections (around
4000 in 2001) which may lead to administrative or legal charges, the relatively low risk of
being caught, combined with the modest amount of standard fines and their low collection
45
DRAFT
rate, are not a sufficient incentive for enterprises to comply with the law given the difficult
financial situation of many enterprises29.
Montenegro - Environmental Regulations
97.
The concise and modern Environment Law of 1996 covers a wide range of
environmental protection issues in Montenegro: conservation of natural resources;
preservation of biological diversity, reduction of environmental risks; environmental impact
assessment; substitution of harmful substances, reuse and recycling; polluter/user pays
principle; mandatory pollution insurance; and access to environmental information and
public participation. The Law also contains general provisions regarding environmental
monitoring, liability for environmental pollution, environmental financing, and compliance
and enforcement, including penalties. Only a few by-laws pertaining to the Environment
Law have been issued, such as the Regulation on Environmental Impact Assessments (1997).
The other major laws under the Ministry of Environment, that is the Air Protection Law, and
the Nature Protection Law, date back to 1980 and 1989. In addition, a number of laws under
the authority of other ministries are also relevant, particularly regulations on quality of soil
and agricultural land, water quality and wastewater. According to the Ministry of
Environment and Physical Planning (MEPP), all recently issued laws and by-laws are
compatible with respective EU legislation.
Problem of the Legal and Institutional Framework
98.
Compliance and enforcement of environmental law and regulations are weak. The
reasons for that are manifold, and include:
•
A fragmented and in many parts inconsistent and outdated legal framework;
•
Insufficient staffing and lack of modern equipment in inspection departments30;
•
Complicated institutional structure inherited from the SFRY where the demarcation
of competencies vertically between the federal level and the two Republics (and to a
lesser extent between the republic level and the municipalities) and horizontally
between different government institutions is often unclear31 ;
Rather low levels of fees and fines combined with a low collection rate and lengthy
court procedures;
•
29
For details and examples of administrative and criminal charges by the Directorate, see Performance Report
for 2001, p. 8-12.
30
For Example: The Ministry of Environment of Montenegro has only 4 inspectors; 30 and some of the
Regional Environmental Inspection Departments in Serbia have offices with no telephone lines.
31
The shift regarding the locus of political decision making - de jure as well as de facto – since the elections in
September and December 2000, has yet to lead to a clearer demarcation. The “Belgrade Agreement” between
Serbia and Montenegro from 14 March 2002 to replace the defunct Federal Republic of Yugoslavia provides
few details on how the new union of “Serbia and Montenegro” should function.
46
DRAFT
•
Difficult economic situation and non-existent or incomplete emissions data from
enterprises .
99.
Unclear institutional demarcation is not only costly to the government, but it can lead
in many cases to the undermining of some designated institutional functions. Institutional
structures could be strengthened through clearer demarcations between the spheres of
environmental regulation and policy making, environmental management and utilization of
resources, and enforcement of regulations. Clearer demarcations also help to build public
trust in the action of various agencies as they carry out their functions. The importance of
clearly defined individual institutional roles and responsibilities cannot be overemphasized.
But it is also important to note the importance of developing a system with good crosssectoral communication channels for information sharing and joint decision shaping.
However, neither Serbia’s recent legislation nor Montenegro’s contains such regulations.
100. An example may illustrate the weak compliance and enforcement practice: Although
the Environment Law of Montenegro (articles 22 and 31) stipulates the obligation of
industrial enterprises to monitor their emissions and to draw up and carry out reclamation
programs, very few actually do monitor their emissions, and only one has developed a
reclamation program. Small infractions of for example air emissions standards are tolerated
by the Ministry, while fines are imposed for major cases, which are often brought to the
attention of the Inspectorate by complaints of affected citizens. However, the maximum
fines (about US$12,000) are very seldom issued, thus there seems to be insufficient
incentives in place encouraging compliance with the law. Court cases concerning
environmental protection are rare. The very few cases brought by MEPP were rejected on
the grounds of lack of evidence32.
101. The objective of FRY is to harmonize environmental legislation with EU
environmental law33. This will provide FRY an opportunity to overcome the fragmented and
unsystematic legal framework and develop a modern and coherent environmental law
corpus34, including economic instruments, which so far only play a very modest role.
However, there seems to be little, real appreciation of what the process requires in terms
knowledge of the Community acquis and ability to formulate policy and draft legislation
which are EU-compatible, and which consider monitoring, costs and enforcement capacity.
102. The municipal level largely lacks adequate institutional capacity, sufficient
knowledge base or equipment to undertake compliance of environmental legislation. Local
governments cannot independently adopt their own laws or regulations, as environmental
32
REC, Doors to Democracy – Yugoslavia - Montenegro
This is the declared main objective of the Serbian Directorate for Environmental Protection (see Performance
Report for 2001), but was also stressed by all interlocutors (government agencies at the federal and republic
level, NGOs, business associations).
34
The task of incorporating the approximately 150 EU environment directives is a huge one and will require a
very selective approach as well as a strong sense of what can be realistically implemented. For example, the
“Development of Environmental Legislation Project”, which is supported by the Government of Finland with
1.5 million Euro and started in 2002, will deal with the EU directives on Environmental Impact Assessment,
IPPC, and Access to Environmental Information.
33
47
DRAFT
protection is under jurisdiction of the Republics35. However, communities can regulate some
local issues, such as local programs for environmental protection, but always in accordance
with Republic legislation.
103. Decentralization in government is a common theme across many sectors and the
environment is no exception. The constraint is the existence of weak capacity in modern
environmental regulation methods at the local level. In this context, the government should
also seek to move towards increasing its use of market-based instruments, especially for the
regulation of the use and exploitation of natural resources. This will require extensive
capacity building activities.
Environmental Impact Assessments
104. One of the most important tools for mainstreaming environmental issues are
environmental impact assessments (EIA). Federal legislation includes provisions for EIA,
and the Environmental Laws of Serbia and of Montenegro set out the procedures in detail.
There are however evident shortcomings, mainly due to an overly general list, which
stipulates activities subject to mandatory EIA procedures, with no cost or size thresholds, or
distinction based on type of enterprise, or considerations of magnitude or scale of impact. In
addition, the capacity of environmental authorities to screen projects or review EIAs is very
weak due to staff shortages and lack of funds.
Serbia – EIA
105. EIAs, including mitigation/remediation measures, are mandatory for facilities and
works that can have a large impact on the environment (Articles 4 and 16 of the Law on
Environmental Protection). Regulations on EIAs for Facilities and Works36 determine the
types of facilities and works, which require EIA and regulate the details such as content,
methods, and procedure. Because the list is very general, the number of EIAs is very high
and EIA requirements also apply to small-scale works. While in the mid-1990s there were
on average 50 to 60 EIAs per year, their number rose to about 600 in 2000 and more than
1,300 in 200137. Given the low number of staff dealing with EIA in the Environment
Directorate (increased from 3 in 1995 to 6 in 2000) authorities in charge of EIA do not have
the necessary capacity to screen projects, review and approve EIA, and to stipulate and
enforce conditionalities and mitigation plans. In addition, local authorities often issue
permits despite missing or incomplete EIAs, with the effect that a large number of objects
start operating before putting in place adequate mitigation measures38. The procedures (on
paper) are therefore too demanding, unrealistic, and impractical to implement when applied
to small-scale investments. In addition, they do not contain provisions regarding disclosure
of environmental information, public participation or access to justice, all instruments that
contribute to a higher rate of compliance.
35
Article 12/1992 of the Constitution of Montenegro, and Article 72 Paragraph 5/1992 of the Constitution of
Serbia.
36
Official Bulletin No. 61/92. In addition, a Manual on Condition and Criteria for EIA was published in the
Official Bulletin, No. 49/2001.
37
Interview with Mr. Aleksandar Vesic, Environment Directorate, EIA Department.
38
Directorate for Environmental Protection, Report on the state of Environment for 2000.
48
DRAFT
106. In the current set up, there are considerable fiscal interests in the EIA procedure, since
the EIA regulation requires the payment of a fee of 1% of the total investment costs of a
project. In 2001 this generated revenues of around US$183,000 for the Budget of the
Republic of Serbia and is thus an important source of revenue39, which poses the risk that
environmental authorities might be held captive to a sub-optimal or dysfunctional system. If
the fee is a charge for the administrative services related to the processing of the EIA of an
investment then it is justified, otherwise it should be scaled down. Shortening the list of
facilities and works for which an EIA is required to those with considerable potential
environmental impact, would help make the EIA system implementable. Proposals for new
policies and programs are not the subject of strategic EAs. Given their often considerable
potential environmental impact and the underdeveloped inter-ministerial coordination
procedures, provisions to make strategic EA mandatory for new policies and programs with
considerable potential environmental impact should be developed.
Montenegro – EIA
107. Despite the Declaration on the Ecological State of Montenegro, environment is
insufficiently taken into consideration in economic or political decision-making. Although
an EIA system is in place40, the situation regarding EIA in Montenegro is comparable to the
one in Serbia; inter alia because of lacking thresholds, there is such a high number of EIA
that the very few staff working on the matter are overstrained. Consequently, construction
work is often started without proper EIAs and permits, and the number of finished
activities/projects without permits is high and increasing.
Environmental Monitoring, Access to Information and Public Participation
108. The right to environmental information is stipulated in the Yugoslav Federal
Constitution (article 52) as well as the Constitution of the Republic of Montenegro (article
19). There is no explicit provision in Serbia’s Constitution or Environmental Law41. In
Serbia, the Government submits annual reports on the status of the environment to
parliament, and releases annual emissions data.
109. The federal level, as well as Serbia and Montenegro, have systems to monitor air,
water, soil, hazardous substances, biodiversity and radioactivity. In Montenegro, air, soil,
surface and groundwater, radioactivity and biodiversity are covered by an environmental
monitoring system, which is managed, by the Eco-toxicological Institute, the Republic
Hydro-meteorological Institute, and the Institute for Nature Protection.
110. However, due to blurred competencies, insufficient and sometimes worn down
instruments and other equipment, and general economic difficulties, monitoring is not
39
Directorate for Environmental Protection, Performance Report for 2001, p.12.
The EIA is regulated by the Law on Environment (Article 7, 9 and 17) and the Regulation on Environmental
Impact Assessments (1997).
41
The draft New Law though stipulates the right of the public to access environmental information and
prescribes that the Government, autonomous provinces and local self-government authorities shall regularly
inform the public on the state of the environment.
40
49
DRAFT
systematic and has taken place at a reduced level since the early 1990s. In addition,
environmental data from enterprises regarding air emissions or hazardous substances are
often either incomplete or not provided at all42. Hence, there is a need to put in place more
systematic environmental monitoring capacity. In recent years, monitoring of the
environment has improved, but is still not systematic; with emissions data are missing or
incomplete. There is also too widespread a monitoring of pollutants with the result that
efforts are spread too thinly. It is advisable that the current list of pollutants that are
monitored be shortened and/or monitoring be limited to areas where those pollutants are
critical.
111. The practice of environmental reporting – a potentially important tool for creating
greater environmental awareness – is not in line with the law (article 25 ss), since the
Ministry of Environment and the Ministry of Health do not regularly publish the
environmental data available. The collected data are submitted to the Ministry of
Environment and serve as a base for preparing the annual reports on the state of environment
which have been criticized though for being selective (that is ignoring the most negative
results), and for interpreting certain figures in a too positive a way.
112. In both Republics, the Governments are planning to broaden and deepen
environmental monitoring43 and to improve access to environmental information through the
use of electronic means (internet). Despite these efforts, much more work needs to be done
on increasing the public’s awareness of its rights and expanding available information
channels. Increased transparency of institutions by building more effective partnerships with
civil society and businesses is needed. The government, through its institutions at the
republican and local levels should take a more proactive position in providing properly
formatted, digestible environmental information to the population. For this task, the potential
of the mass media should be better employed, and NGOs asked to provide assistance in
information dissemination. Measures to foster public participation in environmental
decision-making should be further improved and developed.
Role of Civil Society
113. The rights of citizens’ organizations and individuals to voice their views on
development proposals, plans and policies are essential elements of a democratic society.
There are about 140 environmental NGOs in Serbia and Montenegro. Most of them were
established during the 1990s, have a local focus and unite local nature amateurs. All but a
few define their financial status as very poor compared to the CEE average. Domestic
sources of financing are scarce44 and foreign aid has just recently started.
42
See Serbian Directorate for Environmental Protection, Report on the State of the Environment for 2000, and
Republic of Montenegro, Ministry of Environmental Protection, Environmental Status Report; for example, the
PRTR stipulated in the1996 Environment Law of Montenegro is still not existing.
43
In Serbia work has begun on the introduction of a comprehensive GIS/Environmental Information System.
44
The Directorate for Environmental Protection of Serbia provides limited assistance to environmental NGOs
for specific awareness raising and educational activities (Report on the State of the Environment for 2000).
50
DRAFT
NGO Involvement
114. With the exception of a few NGOs involved in legal aid45, almost all NGOs focus on
non-partisan, non-confrontational activities such as awareness raising, environmental
education and information dissemination. In some cases though, nature protection NGOs
play a role in bringing illegal activities to the attention of environmental inspectors, by
reporting on poaching incidents, illegal logging or water pollution. Large international
environmental NGOs, such as WWF or Greenpeace, have so far not been active in
Yugoslavia. One of the strongest NGOs in Yugoslavia is the country office of the Regional
Environmental Center (REC) for Central and Eastern Europe. The REC started working in
Yugoslavia in May 1998 in Belgrade and has recently opened a project office in Podgorica.
For several years it was the main supporter of NGO activities in Yugoslavia and it is
continuing this support through its small grants program. The REC is implementing a project
funded by the Government of the Netherlands assisting in the development of Local
Environmental Action Plans (LEAPs) in 5 – 10 municipalities.
Private Sector Involvement
115. Within the business sector, environmental issues are not high on the agenda, and
environmental business associations or committees are just beginning to be
established.46Private sector involvement, particularly in sectors such as waste management,
water supply and sanitation in large cities, and forestry and national parks activities, is far
from being utilized to its potential. The Government should further encourage private sector
participation. A strengthened dialogue between government entities responsible for
environmental protection and the business sector, for example in the context of privatization
and environmental liabilities, as well as plans of some enterprises to obtain ISO 14000
certification, provide opportunities to further encourage private sector participation, raise
environmental awareness and foster the development of environmental business associations.
International Environmental Law and Policy
116. Throughout the second part of the 1990s Yugoslavia’s international environmental
cooperation virtually came to a halt. Since the elections in October 2000, Yugoslavia and
Serbia and Montenegro, have engaged in efforts to reenter the international environmental
arena, through the preparation of the ratification of multilateral environmental agreements
(MEAs)47, and participation in policy fora, such as the UNECE Committee for
Environmental Policy, the Task Force for the Implementation of the Environmental Action
Program for Central and Eastern Europe, and aid assistance coordination bodies, such as the
Task Force for the Regional Environmental Reconstruction Program (REReP). As
representatives of the sovereign State, the competent federal authorities play a decisive role,
although the Republics have the main responsibility for implementing obligations emanating
45
For examples and cases see REC, Doors to Democracy, Yugoslavia – Serbia.
For example the Council on Ecology within the Yugoslav Chamber of Commerce’s Agriculture Association
which was established at the end of 2001.
47
In 2001 the FRY has ratified three important MEAs, namely the FCCC, CITES, and the CBD and has
launched the process of acceding to the Bern and the Bonn Conventions.
46
51
DRAFT
from MEAs, and are also the drivers for developing project proposals for which international
assistance is being sought48.
117. Yugoslavia is party to a number of MEAs, and both the federal administration and the
constituent Republics are fully committed to meeting the requirements stipulated in these
agreements. The current federal administration tasked with overseeing the international
environmental agreements are in the process of being restructured, but it is expected that a
joint Ministry of Foreign Affairs with the same responsibilities will remain. However,
implementation of the MEAs will continue to be a joint responsibility with a major role for
the Republics. Regarding the UNFCCC, the FRY as non-annex I developing country, needs
to do substantial work. So far, the activities related to climate change in the two constituents
have been rather fragmented and unsystematic, and the preparation of the National
Communication is taking precedence over all other activities. The existing legislative
framework sets the basic principles for environmental protection and climate change related
issues, but further work is necessary in the areas of environmental law and enforcement, and
institutional capacity building in order to tackle the climate change and meet the international
commitments. Also, it must be noted that climate change is not specifically addressed in any
of the existing environmental policy documents.
118. The first step in the process of preparing the National Communication would be the
inventory of greenhouse gas (GHG) emissions and removals, using the agreed IPCC
methodologies. The national inventory would serve as a basis for formulating programs.
Measures that would contribute to addressing the adverse impacts of climate change,
including the abatement of increase in greenhouse gas emissions and enhancement of
removals by sinks must be assessed. In addition, FRY needs to identify major vulnerabilities
and adaptation strategies to global climate change. This project will assist the Governments of
the Republic of Serbia, Republic of Montenegro, and FRY in meeting the reporting
requirements envisaged under the UNFCCC.
Problems With Implementing MEAs
119. Effective shared Implementation of MEAs is often hampered by limited information
sharing and inadequate cooperation in general between the different institutions involved at
federal and republican level, including non-payment of dues. The main reasons are the
unclear regulatory framework49 and the political and institutional changes, which occurred
over the last few years. Yugoslavia has ratified 56 multilateral agreements that are directly or
indirectly related to environmental protection, and is in the process of preparing ratification of
a number of agreements. There is also a need to replace part of the old, domestic regulatory
framework with bilateral and sub-regional, multilateral legal instruments in the environment
sector, because the break-up of the former Yugoslavia has transformed formerly domestic
matters into international ones. Work on some of the most urgent issues, like the
48
In 2001, the Serbian Directorate for Environmental Protection prepared over 140 project proposals in the
area of international cooperation; see Directorate for Environmental Protection, Performance Report for 2001,
p.41-43.
49
Obligations emanating from MEAs are often regulated in federal as well as republican laws. In addition,
almost all ratification acts before 1978 for international agreements do not specify the institution responsible for
their implementation.
52
DRAFT
development of an international legal regime for the Sava River Basin, is under way with
international assistance50. Experience gained in this work as well as in other sub-regional
cooperation mechanisms, such as the REReP, may help build trust and knowledge on the best
ways to promoting coordinated efforts.
References
1. FRY Constitution, 1992.
2 Government of FRY, Resolution on the Policy of Protecting the Environment in the
FRY(1993) ( #290, June, 1993).
3. FRY Law on the Principles of Protecting the Environment, 1998,
4. Serbia Reform Agenda, 2001, Brussels
5. Ministry of Health and Environmental Protection, Directorate for Environmental
Protection, Performance Report for 2001, Belgrade.
6. Parliament of the Republic of Montenegro, Declaration on the Ecological State of
Montenegro, 1991, September, 20.
7. Constitution of the Republic of Montenegro, 1992.
8. Directions of the Ecological State of Montenegro.
9. Environmental Protection Law of the Republic of Montenegro, 1996.
10. Bogdanovic Slavko, Legal Frameworks for the Revitalization of Environment and
Economy of the Danube Basin, International Conference Danubius Universitas,
November 2000
11 Directorate for Environmental Protection, Ministry of Health and Environment of the
Republic of Serbia, Report on the State of the Environment for 2000 with Priority Tasks
for 2001+, Belgrade, November 2001.
12. European Commission, External Relations Directorate General, Federal Republic of
Yugoslavia – Country Strategy Paper 2002-2006, Brussels, 2002.
13. European Commission, External Relations Directorate General, Federal Republic of
Yugoslavia – Multi-annual Indicative Programme 2002-2004, Brussels, 2001.
14. Mileusnic Vucic, Valentina, State of Economic Instruments in Yugoslavia from 1997 to
2002, Belgrade 2002.
15. OSCE Mission to the FRY, Unofficial English Translation of the Draft Law on the
System of Environmental Protection in Serbia, Belgrade, June 2002
16. Republic of Serbia Ministry of Health and Environmental Protection, Directorate for
Environmental Protection, Performance Report for 2001, Belgrade 2002.
17. Republic of Serbia Ministry of Health and Environmental Protection, Directorate for
Environmental Protection, Report on the State of the Environment for 2000 with Priority
Tasks for 2001+, Belgrade November 2001.
18. Regional Environmental Center (REC), Environmental Analysis of FR Yugoslavia,
Belgrade 2001.
50
Under the Stability Pact for South Eastern Europe, two working groups - International Sava Basin
Commission Treaty Working Group and International Sava Basin Commission Rehabilitation and Development
Working Group - were formally established in March 2002 with the aim of regulating the international regime
of navigation, promoting sustainable development by regulating utilization, and protecting and managing water
resources in the Sava Basin.
53
DRAFT
19. Regional Environmental Center (REC), Doors to Democracy – Current Trends and
Practices in Public Participation in Environmental Decision Making in Central and
Eastern Europe, Budapest 1998.
20. Republic of Montenegro Ministry of Environmental Protection, Environmental Status
Report (National Report prepared for the Meeting of the Task Force for the
Implementation of the Regional Environmental Reconstruction Programme for South
Eastern Europe (REReP)), 9 November, Brussels, Podgorica 2000.
.
54
1. The Constitution of the Republic of Montenegro (Off. Jour. of RM, No. 48/92)
2. Declaration on the Ecological State Montenegro (Off. Jour. of RM, No. 39/91)
3. Law on the environment (Off. Jour. of RM, No. 12/96, 55/00)
4. Regulations on environmental impact assessment of operations (Off. Jour. of RM, No.
14/97)
Montenegro
5.
4.
3.
55
1. Law on prohibiting smoking in closed rooms (Off. Jour. of RS, No. 16/95)
2. Regulations on determining the Program of air quality control in years 2000 and 2001 (Off.
Jour. of RS, No. 19/00)
3. Regulations on limit values, emission measuring methods, selection of sample spots criteria
and data collecting (Off. Jour. of RS, No. 54/92, 30/99)
4. Regulations on the shape and contents of the "non-smoking" sign (Off. Jour. of RS, No.
30/95)
5. Regulations on emission limit values, methods and timeframe for measuring and data noting
(Off. Jour. of RS, No. 30/97, 35/97)
6. Decree on determining organizations for measuring air quality and measuring air emission
of harmful substances (Off. Jour. of SRS, No. 27/73, 14/74, 47/74, 24/78, 52/80)
Serbia
1. Law on Hydro-meteorological affairs of interest for the whole country (Off. Jour. of SFRY,
No. 18/88, 63/90)
2. Regulations on establishing networks and work programs of meteorological stations of
interest for the whole country (Off. Jour. of SFRY, No. 50/90)
1.
2.
The Constitution of the Republic of Serbia (Off. Jour. of RS, No. 1/90)
Law on environmental protection (Off. Jour. of RS, No. 66/91, 83/92, 67/93, 48/94,
53/95)
Regulations on premises and works environmental impact assessment (Off. Jour. of RS,
No 61/92)
Decision on special compensation for protection and advancement of the environment
(Off. Jour. of the town of Belgrade, No 22/99)
Decree on establishing the Organizational Board of the "Belgrade-a healthy city" project
(Off. Jour. of the town of Belgrade, No 22/99)
FRY
AIR PROTECTION
5. Regulations on the level of compensations, calculation modalities and paying
compensations for polluting the environment (Off. Jour. of RM, No. 26/97, 9/00, 52/00)
6. Regulations on contents of environmental inspectors record on inspection monitoring (Off.
Jour. of RM, No. 19/96)
7. Regulations on awarding prizes for contribution in protection and development of national
parks - The Eco Award (Off. Jour. of RM, No. 26/96)
8. Decision on establishing the Public Institute "The Center for eco-toxicological
investigations of Montenegro (Off. Jour. of RM, No. 40/96)
9. Guidelines for keeping records of inspecting procedures of environmental inspectors (Off.
10. Guidelines on contents of environmental impact assessment study for operations in the
environment (Off. Jour. of RM, No. 21/97)
11. Decree on establishing the Council for environmental protection (Off. Jour. of RM,
No.56/00)
Serbia
1. The Constitution of the Federal Republic of Yugoslavia (Off. Jour. of FRY, No. 1/92,
34/92, 29/00)
2. Resolution on the environmental policy in FR Yugoslavia (Off. Jour. of FRY, No. 31/93)
3. Resolution on the biodiversity protection policy in FR Yugoslavia (Off. Jour. of FRY, No.
22/94)
4. Law on the grounds for environmental protection (Off. Jour. of FRY, No. 24/98, 24/99)
5. Regulations on the form for federal environmental inspector official ID (Off. Jour. of FRY,
No. 69/99)
6. Decision on establishing the Committee for protection and advancement of the human
environment (Off. Jour. of FRY, No. 48/86, 41/87)
7. Decree on establishing Yugoslav environmental protection standards (Off. Jour. of FRY,
No. 11/98)
FRY
GENERAL REGULATIONS
Environmental Legislation in force on 1 January 2001 (Federal Level, Serbia, and Montenegro)
Appendix 1 to Annex 4
DRAFT
56
1. Law on waters (Off. Jour. of RS, No. 46/91, 53/93, 67/93, 48/94, 54/96)
2. Regulations on water classification (Off. Jour. of SRS, No. 5/68)
3. Regulations on categorization of watercourses (Off. Jour. of SRS, No. 5/68)
4. Regulations on systematic water quality monitoring in year 2000 (with the Program) (Off.
5. Regulations on contents of technical documentation submitted in the process of applying for
water resources compliance and water resources permit (Off. Jour. of SRS, No. 3/78)
Serbia
1. Law on coastal sea and epi-continental belt (Off. Jour. of SFRY, No. 49/87, 57/89, (Off.
Jour. of FRY, No. 24/94, 28/96)
2. Law on hydro-meteorological affairs of interest for the whole country (Off. Jour. of SFRY,
No. 18/88, 63/90)
3. Law on sea and internal shipping (Off. Jour. of FRY, No. 12/98, 44/99, 74/99, 73/00)
4. Law on water regime (Off. Jour. of FRY, No. 59/98)
5. Regulations on classification of inter-republic water-flows, interstate waters and coastal sea
waters of Yugoslavia (Off. Jour. of SFRY, No. 6/78)
6. Regulations on establishing networks of hydrological stations of interest for the whole
country (Off. Jour. of SFRY, No. 50/90, 54/90)
7. Regulations of the sanitary quality of the drinking water (Off. Jour. of FRY, No. 42/98,
44/99)
8. Decision on maximal permitted concentrations of radionuclides and hazardous substances in
inter-republic water-flows, interstate waters and coastal seawaters (Off. Jour. of SFRY, No.
8/87)
FRY
WATER PROTECTION
1. Law on pollution protection of air (Off. Jour. of SRM, No. 14/80, 16/50)
2. Regulations on permitted concentrations of harmful substances in the air (Off. Jour. of
SRM, No. 4/82, 8/82)
3. Regulations on analyses methodology, timeframe and forms for informing on results of
monitoring and detecting harmful substances in the air on the sources of pollution (Off. Jour.
of SRM, No. 4/82, 8/82)
4. Decree on determining sampling spots for measuring, expert analyses and determining air
pollution in Montenegro (Off. Jour. of SRM, No. 6/86)
Montenegro
7. The Program of air quality control in years 2000 and 2001 in the town of Belgrade (Off.
Jour. of the town of Belgrade, No. 3/00)
1. Law on sea and internal shipping (Off. Jour. of SRM, No. 13/78, 8/79, 19/87, 36/89, 13/91)
2. Law on water supplying, removing of wastewater and depositing of solid waste in the
territory of municipalities: Herceg Novi, Kotor, Tivat, Budva, Ulcinj and Cetinje (Off. Jour. of
RM, No. 46/91)
3. Law on the sea good (Off. Jour. of RM, No. 14/92)
4. Law on waters (Off. Jour. of RM, No. 16/95, 22/95)
5. Regulations on classification and categorization of waters (Off. Jour. of RM, No. 14/95,
19/96, 15/97)
6. Regulations on measuring methods and monitoring of quality of sea water for bathing and
recreation (Off. Jour. of RM, No. 9/91)
7. Regulations on contents of technical documentation necessary for issuing water resources
compliance and water resources permit (Off. Jour. of RM, No. 4/96)
8. Regulations on keeping the water registry and superficial and groundwater cadastre, users
and polluters of water, torrent flows and erosive areas and water production premises and
facilities (Off. Jour. of RM, No. 5/96, 19/96)
9. Regulations on methods for determining and maintaining zones and belts of sanitary
protection of potable water sources and restrictions in the related zones (Off. Jour. of RM, No.
8/97)
10. Regulations on wastewater quality and methods of their emission into the public sewerage
system and natural recipient (Off. Jour. of RM, No. 10/97, 21/97)
11. Decisions on establishing the Public Enterprise for water supplying, treatment and
removing of wastewater and depositing solid waste for areas of the Montenegro coast and
Cetinje (Off. Jour. of RM, No. 50/91)
12. Decision on establishing public enterprise for managing the sea good (Off. Jour. of RM,
No. 25/92)
Montenegro
6. Regulations on the method of determining and maintaining the zones and belts for sanitary
protection of potable water supply facilities (Off. Jour. of SRS, No. 33/78)
7. Regulations on harmful substances in waters (Off. Jour. of SRS, No. 31/82)
8. Regulations on methods and minimum number of wastewater quality testing (Off. Jour. of
SRS, No. 47/83, 13/84)
9. Regulations on conditions for enterprises and other legal persons for performing specific
types of superficial and groundwater quality investigations, including wastewater quality
investigations (Off. Jour. of SRS, No. 49/90)
10. Regulations on conditions and methods for potable water fluorizing (Off. Jour. of RS, No.
6/97)
11. Decree on determining enterprises and other legal persons that fulfill conditions for
performing specific types of superficial, groundwater and wastewater quality investigations
(Off. Jour. of RS, No. 16/91)
12. Plan on water pollution protection (Off. Jour. of RS, No. 6/91)
13. Plan for protection of waters from pollution (Off. Jour. of APV, No. 3/91)
14. Guidelines on methods and procedures for determining acquired level of treatment of
emitted polluted water (Off. Jour. of SRS, No. 9/67)
DRAFT
1. Law on forests (Off. Jour. of RS, No. 46/91, 83/92, 54/93, 67/93, 48/94, 54/96)
Serbia
FOREST PROTECTION
57
1. Law on agricultural land (Off. Jour. of RM, No. 15/92, 59/92)
2. Law on geological investigations (Off. Jour. of RM, No. 28/93, 42/94)
3. Law on construction grounds (Off. Jour. of RM, No. 55/00)
4. Law on mining (Off. Jour. of RM, No. 28/93)
5. Regulations on permitted amounts of hazardous and harmful substances in soil and methods
of their testing (Off. Jour. of RM, No. 18/97)
6. Decision on establishing the Republic institute for geological research (Off. Jour. of RM,
No. 41/94)
Montenegro
1. Law on geological investigations (Off. Jour. of RS, No. 44/95)
2. Law on mining (Off. Jour. of RS, No. 44/95)
3. Law on construction grounds (Off. Jour. of RS, No. 44/95, 16/97)
4. Law on agricultural land (Off. Jour. of RS, No. 49/92, 53/93, 67/93, 48/94, 46/95, 54/96,
14/00)
5. Regulations on permitted amounts of hazardous and harmful substances in soil and water
for irrigation and methods of their testing (Off. Jour. of RS, No. 23/94)
Serbia
1. Law on determining and classification of mineral raw materials and presenting results of
geological investigations (Off. Jour. of FRY, No. 12/98, 13/98)
FRY
SOIL PROTECTION
13. Decision on establishing public enterprise for water resources (Off. Jour. of RM, No.
39/92)
14. Decision on criteria, level and payment methods for compensation for water pollution
protection, compensation for material extracted form pipeline system and compensation for
utilization of water resources facilities (Off. Jour. of RM, No. 15/96, 19/96, 35/98)
15. Decision on starting the elaboration of the spatial plan for the sea good (Off. Jour. of RM,
No. 16/97)
16. Program of systematic water quality investigations on water operations (the zone of
sanitary protection) and public bathing beaches (Off. Jour. of RM, No. 13/00)
1. Law on protection of plants from diseases and pests (Off. Jour. of SRS, No. 14/84, 6/89,
Off. Jour. of RS, No. 53/93, 67/93, 48/94)
2. Law on animal health protection (Off. Jour. of RS, No. 37/91, 50/92, 33/93, 52/93, 53/93,
67/93, 48/94, 53/95, 52/96, 25/00)
3. Law on seed material and planting material (Off. Jour. of RS, No. 54/93, 35/94, 43/94)
4. Regulations on reimbursement for eradication of plant diseases, pests and weed (Off. Jour.
of RS, No. 52/97)
5. Regulations on keeping record of issued and prolonged certifications on animal health
conditions, their transportation, including forms for keeping record (Off. Jour. of RS, No.
44/94)
6. Regulations on conditions and measures for humane collecting and removing stray dogs and
cats (Off. Jour. of RS, No. 29/94)
Serbia
1. Law on protection of animals from contagious diseases endangering the whole country (Off.
Jour. of SFRY, No. 43/86, 53/91, Off. Jour. of FRY, No. 24/94, 28/96)
2. Law on plant protection (Off. Jour. of FRY, No. 24/98, 26/98)
3. Regulations on performing forecast and reporting affaires in the scope of plant protection
(Off. Jour. of FRY, No. 65/99)
4. Regulations on maximum amounts of harmful substances in the fodder (Off. Jour. of SFRY,
No. 2/90, 27/90)
5. Regulations on conditions for performing disinfection, control of insects and rats in the
scope of plant protection and protection of plant products (Off. Jour. of FRY, No. 12/99)
6. Regulations on providing services in the scope of plant protection (Off. Jour. of FRY, No.
42/99)
FRY
PROTECTION OF THE PLANT AND ANIMAL LIFE
1. Law on forests (Off. Jour. of RM, No. 55/00)
2. Regulations on reimbursement and cutting trunks, measuring and stamping trunks and
issuing certifications of origin of forest products (Off. Jour. of RM, No. 7/00)
3. Decision on establishing public enterprise for managing forests within the forest-economic
areas (Off. Jour. of RM, No. 56/92)
Montenegro
2. Regulations on the shape and contents of forest stamp shipping document, bill of lading,
conditions, methods and deadline for stamping trunks (Off Jour. of RS, No. 95/92)
3. Regulations on methods for marking trunks for cutting, forms of keeping reference of these
trunks in books of records, form and contents of record stamps and forms for the record book
DRAFT
58
1. Law on hunting (Off. Jour. of RS, No. 39/93, 44/93, 60/93)
2. Law on fishery (Off. Jour. of RS, No. 35/94, 38/94)
3. Regulations on methods of marking borders of fishing areas, i.e. parts of the fishing area
with prohibited or limited fishing (Off. Jour. of RS, No. 49/95)
4. Regulations on level of compensation for illegally caught or in any other way destroyed
game (Off. Jour. of RS, No. 19/00, 29/00)
5. Order on game closed season (Off. Jour. of RS, No. 84/93, 5/98, 22/99, 32/99)
6. Order on establishing closed season for fishing of some fish species within a fishing area or
parts of a fishing area and on prohibiting fishing species with not legislatively determined size
Serbia
REGULATIONS ON HUNTING AND FISHERIES
1. Law on protection of plants from diseases and pests (Off. Jour. of RM, No. 4/92, 59/92)
2. Law on seed material and planting material (Off. Jour. of RM, No. 39/92, 59/92)
3. Law on animal health protection (Off. Jour. of RM, No. 39/92, 59/92)
4. Regulations on veterinary and sanitary conditions for constructing and equipment of
facilities for production and keeping animals (Off. Jour. of RM, No. 39/95, 56/00)
5. Decree on protection of rare, reduced in number, endemic and endangered plant and animal
species (Off. Jour. of RM, No. 36/82)
6. Guidelines for the procedure of issuing certifications and methods for keeping records on
animal health condition (Off. Jour. of RM, No. 9/93)
Montenegro
7. Regulations on protecting animals from torturing when performing health protection
measures, performing experiments on animals and performing other procedures with animals,
on measures for preventing mistreating animals, including determining substances that can be
used for humane extermination of animals (Off. Jour. of RS, No. 44/94)
8. Decision on protecting animal species as natural rarities (Off. Jour. of RS, No. 11/90, 49/91)
9. Decision on protecting plant species as natural rarities (Off. Jour. of RS, No. 11/90, 49/91)
10. Decision on determining level of compensation for destroyed specimen of protected
animal and plant species and game species during hunting closed seasons, including their
nests, brood, eggs and young in the area of national parks of Montenegro (Off. Jour. of RM,
No. 38/97)
11. Decision on measures on animal health protection for years 1999, 2000 and 2001 (Off.
12. Order on putting under monitoring utilization and circulation of wild plant and animal
species (Off. Jour. of RS, No. 17/99)
1. Law on national parks (Off. Jour. of RS, No. 39/93, 44/93, 53/93, 67/93, 48/94)
2. Law on protection the Deliblatska Pescara sand pit (Off. Jour. of SRS, No. 6/65)
3. Law on declaring the Oplenac Park as a spatial-memorial natural monument (Off Jour. of
SRS, No. 25/67)
4. Regulations on protection of natural rarities (Off. Jour. of RS, No. 50/63, 93/93)
5. Regulations on protection of a special nature reserve "Stari Begej-Carska Bara Swamp"
6. Regulations on protection of special reserve "Ludasko jezero" (Off. Jour. of RS, No. 56/94)
7. Regulations on protection of special nature reserve "Obedska Bara swamp" (Off. Jour. of
RS, No. 56/94)
8. Regulations on protection of general nature reserve "Vitanovaca" (Off. Jour. of RS, No.
9/95)
9. Regulations on protection of special nature reserve "Jelasnicka klisure gorge" (Off. Jour. of
RS, No. 9/95)
10. Regulations on protection of natural monument "Homoljska Potajnica" (Off. Jour. of RS,
No. 9/95)
11. Regulations on protection of natural monument "Risovaca" (Off. Jour. of RS, No. 9/95)
12. Regulations on protection of natural monument "Vrelo Mlave" (Off. Jour. of RS, No. 9/95)
13. Regulations on protection of natural monument "Resavska pecina cave" (Off. Jour. of RS,
No. 9/95)
14. Regulations on protection of natural monument "Krupajsko vrelo" (Off. Jour. of RS, No.
9/95)
15. Regulations on protection of natural monument "Lisine" (Off. Jour. of RS, No. 9/95)
16. Regulations on protection of natural monument "Djavolja Varos" (Off. Jour. of RS, No.
9/95)
Serbia
PROTECTION OF NATURAL GOODS
1. Law on freshwater fishing (Off. Jour. of SRM, No. 39/76, 51/76, 34/88, Off. Jour. of RM,
No. 4/92)
2. Law on sea fishing (Off. Jour. of RM, No. 26/92, 59/92)
3. Law on hunting (Off. Jour. of RM, No. 47/99)
4. Order on determining fish spawn territories (Off. Jour. of RM, No. 18/99)
5. Order on fishing restrictions, limitations and measurements for protection of the fish fund
(Off. Jour. of RM, No. 53/00)
6. Order on hunting and shortening the hunting season, i.e. hunting days (Off. Jour. of RM,
No. 56/00)
7. Decision on prohibiting fishing in the waters of the Crno Jezero (Black Lake) and water
courses in the National Park "Biogradska Gora" (Off. Jour. of RM, No. 28/00)
Montenegro
DRAFT
59
17. Regulations on protection of natural monument "Botanical Garden "Jevremovac" (Off.
18. Regulations on protection of special nature reserve "River Tresnjica gorge" (Off. Jour. of
RS, No. 50/95)
19. Regulations on protection of special nature reserve "River Uvac gorge" (Off. Jour. of RS,
No. 50/95)
20. Regulations on protection of landscapes of exceptional characteristics of Pcinja River
valley (Off. Jour. of RS, No. 50/96)
21. Regulations on protection of nature park "Stara planina" (Off. Jour. of RS, No. 19/97)
22. Regulations on protection of special nature reserve "Zasavica" (Off. Jour. of RS, No.
19/97)
23. Regulations on protection of special nature reserve "Karadjordjevo" (Off. Jour. of RS, No.
37/97)
24. Regulations on protection of special nature reserve "Pastures of the great bustard" (Off.
25. Regulations on protection of special nature reserve "Selevenjske pustare" (Off. Jour. of
RS, No. 37/97)
26. Regulations on protection of natural monument "Cerjanska cave" (Off. Jour. of RS, No.
5/98)
27. Regulations on protection of landscapes of exceptional characteristics of Mirusa (Off.
28. Regulations on protection of natural monument "Mermerna cave" (Off. Jour. of RS, No.
25/98)
29. Regulations on protection of natural monument "Danube park" (Off. Jour. of RS, No.
5/98)
30. Regulations on protection of special nature reserve "Koviljsko-petrovaradinski swamp"
31. Regulations on protection of natural monument "Klokocovac" (Off. Jour. of RS, No. 1/00)
32. Regulations on protection of nature park "Sicevacka gorge" (Off. Jour. of RS, No. 16/00)
33. Regulations on protection of landscapes of exceptional characteristics of "Ovcarskokablarska gorge" (Off. Jour. of RS, No. 16/00)
34. Regulations on protection of natural monument "Lazarev canyon" (Off. Jour. of RS, No.
16/00)
35. Regulations on contends of protection and development plan for Deliblato sand pit (Off.
Jour. of SRS, No. 40/65)
36. Regulations on contents and methods of keeping registries of protected parts of nature
(Off. Jour. of SAPV, No. 25/75)
37. Regulations on contents and methods of keeping registries of protected objects of nature
(Off. Jour. of SAPK, No. 18/82)
38. Regulations of categorization of natural goods (Off. Jour. of RS, No. 30/92)
39. Regulations on methods of marking protected natural goods (Off. Jour. of RS, No. 30/92,
24/94, 17/96)
40. Regulations on the registry of protected areas (Off. Jour. of RS, No. 30/92)
41. Regulations on the form for national park supervisor official ID (Off. Jour. of RS, No.
70/94)
42. Decision on determining borders of the Deliblato sandpit (Off. Jour. of SAPV, No. 10/78)
43. Decision on establishing the organization for protection of natural goods (Off. Jour. of RS,
No. 88/92)
44. Decision on compensations for utilization of National Park "Fruska Gora mountain" (Off.
Jour. of RS, No. 47/95, 42/98)
45. Decision on compensations for utilization of National Park "Djerdap" (Off. Jour. of RS,
No. 51/95)
46. Decision on compensations for utilization of National Park "Kopaonik Mountain" (Off
47. Decision on compensations for utilization of National Park "Sara Mountain" (Off Jour. of
RS, No. 8/96, 5/99)
48. Decree on previous protection of the natural good "Zasavica" (Off. Jour. of RS, No. 51/95)
49. Decree on protecting the natural good "English Oak-Melnice" (Off. Jour. of the town of
Belgrade, No. 1/96)
50. Decree on protecting the natural good "Group of English oak trees near Jozica hut" (Off.
Jour. of the town of Belgrade, No. 1/96)
51. Decree on previous protection of the natural good "Taorska vrela" (Off. Jour. of RS, No.
41/96)
52. Decree on previous protection of the natural good "Begecka pit" (Off. Jour. of RS, No.
53/96)
53. Decree on previous protection of the natural good "Veliko ratno island" (Off. Jour. of RS,
No.14/97)
54. Decree on previous protection of the natural good "Radujevac" (Off. Jour. of RS, No.
44/97)
55. Decree on previous protection of the complex "Buljanka Lake" (Off. Jour. of RS, No.
55/97)
56. Decree on protecting the natural good "Magnolia tree" (Off. Jour. of the town of Belgrade,
No. 16/98)
57. Decree on previous protection of the natural good "Tulips tree" (Off. Jour. of the town of
Belgrade, No. 16/98)
58. Decree on previous protection of the natural good "Natural spawning area of huchen" (Off.
59. Decree on previous protection of the natural good "Vlasinsko Lake" (Off. Jour. of RS, No.
42/99)
60. Decree on previous protection of the natural good "Rusanda Lake" (Off. Jour. of RS, No.
13/00)
61. Spatial plan of National Park "Tara mountain" (Off. Jour. of SRS, No. 3/89)
62. Spatial plan of National Park "Kopaonik mountain" (Off. Jour. of SRS, No. 4/89)
63. Spatial plan of National Park "Djerdap" (Off. Jour. of SRS, No. 34/89)
64. Statute of the Institute for the protection of nature of Republic of Serbia (Off. Jour. of RS,
No. 59/93, 22/95)
DRAFT
Serbia
1. Regulations on permitted noise level in the environment (Off. Jour. of RS, No. 54/92)
2. Decree on determining organizations that fulfill conditions for measuring noise in the
human environment (Off. Jour. of SRS, No. 1/84, 44/84, 44/87, 51/91)
NOISE PROTECTION
60
1. Law on protection from ionizing radiation (Off. Jour. of SFRY, No. 46/96)
2. Law on prohibiting construction nuclear power plants in FRY (Off. Jour. of FRY, No.
12/95)
3. Regulations on limit values of irradiation for population and persons working with sources
of ionizing radiation, on measuring levels of exposure to ionizing radiation of persons working
with sources of these radiation and on testing contamination of working environment. (Off.
Jour. of SFRY, No. 31/89, 63/89)
4. Regulations on methods of application of sources of ionizing radiation in medicine (Off.
Jour. of FRY, No. 32/98, 33/98)
5. Regulations on conditions to be fulfilled by legal persons for performing systematic
investigations of radio-nuclide contents in the environment (Off. Jour. of FRY, No. 32/98)
6. Regulations on conditions for circulation and utilization of radioactive materials, X-ray
devices and other devices producing ionizing radiation (Off. Jour. of FRY, No. 32/98)
7. Regulations on limit values for exposure to ionizing radiation (Off. Jour. of FRY, No.
32/98)
8. Regulations on conditions for putting in circulation food supplies and objects of general use
that are preserved by ionizing radiation (Off. Jour. of FRY, No. 42/98)
9. Regulation on limit values of radioactive contamination of the environment and on method
of performing decontamination (Off. Jour. of FRY, No. 9/99)
10. Regulations on methods and conditions of collecting, preserving, recording, storing,
treating and depositing of radioactive waste materials (Off. Jour. of FRY, No. 9/99)
11. Regulations on conditions to be fulfilled by legal persons for performing decontamination
(Off. Jour. of FRY, No. 9/99)
12. Decision on establishing the Committee for nuclear energy (Off. Jour. of FRY, No. 16/96)
13. Decision on conditions for location, constructing, and test work, starting the work,
utilization and permanent closure of nuclear facilities (Off Jour. of FRY, No. 42/97)
14. Decision on producing and contents of the report on nuclear safety and other
documentation necessary for determining meeting the measure of nuclear safety (Off. Jour. of
FRY, No. 42/97)
15. Decision on method and conditions for systematic investigations of radionuclide presence
in the environment in the vicinity of a nuclear facility (Off. Jour. of FRY, No. 42/97)
16. Decision on conditions for circulation and utilization of nuclear materials and methods for
keeping record of nuclear materials according to the zones of material balances (Off. Jour. of
FRY, No. 42/97)
17. Decision on qualifications and health conditions of persons working with sources of
ionizing radiation (Off. Jour. of FRY, No. 45/97)
FRY
1. Regulations on noise protection (Off. Jour. of RM, No. 24/95, 42/00, 49/00)
1. Law on environmental protection (Off. Jour. of RS, No. 66/91, 83/92, 67/93, 48/94, 53/95)
2. Law on national parks (Off. Jour. of SRM, No. 47/91)
3. Decision on establishing public enterprise for national parks (Off. Jour. of RM, No. 39/92)
4. Decision on starting the elaboration of the spatial plan for the area of special purpose of
National Park "Lovcen" (Off. Jour. of RM, No. 47/92)
National Park "Skadarsko Lake" (Off. Jour. of RM, No. 47/92)
National Park "Biogradska Gora" (Off. Jour. of RM, No. 47/92)
National Park "Durmitor Mountain" (Off Jour. of RM, No. 47/92)
8. Decision on establishing the Public Institute "Natural History Museum of Montenegro"
National Park "Durmitor Mountain" (Off Jour. of RM, No. 20/97)
11. Decision on determining level of compensation for destroyed specimen of protected
animal and plant species and game species during hunting closed seasons, including their
nests, brood, eggs and young in the area of national parks of Montenegro (Off. Jour. of RM,
No. 38/97)
National Park "Biogradska Gora Mountain" (Off Jour. of RM, No. 44/98)
13. Decision on the level and methods of payment of compensations for utilization of national
park goods, performing activities and providing services in them (Off. Jour. of RM, No.
23/99)
14. Decision on prohibiting fishing in waters of the Crno Lake and watercourses in the
National Park "Biogradska Gora" (Off. Jour. of RM, No. 28/00)
15. Decree on protection of rare, reduced in number, endemic and endangered plant and
animal species (Off. Jour. of SRM, No. 36/82)
16. Decree on appointing the Managing Board of the "Natural History Museum of
Montenegro"
17. Decree on registration with Central registry of protected objects of nature for Republic
Montenegro (Off. Jour. of RM, No. 20/95)
18. Spatial plan for the area of special purpose of National Park "Biogradska Gora Mountain"
PROTECTION FROM IONIZING RADIATION AND RADIOACTIVE SUBSTANCES
Montenegro
Montenegro
DRAFT
61
1. Law on circulation of explosive substances (Off. Jour. of SFRY, No. 30/85, 6/89, 53/91,
Off. Jour. of FRY, No. 24/94)
2. Law on transportation of harmful substances (Off. Jour. of SFRY, No. 27/90, 45/90, Off.
Jour. of FRY, No. 24/94, 28/96, 21/99)
3. Law on production and circulation of poisonous substances (Off. Jour. of FRY, No. 15/95,
28/96)
4. Regulations on destroying unused poisons and package used for packaging poisons and on
withdrawal of poisons from circulation (Off. Jour. of SFRY, No. 7/83)
5. Regulations on criteria for classification of poisons into groups and on methods for
determining levels of toxicity for certain poison (Off. Jour. of SFRY, No. 79/91)
6. Regulations on documentation submitted in the procedure for granting waste import export
and transit permits (Off. Jour. of FRY, No. 69/99)
7. Decision on marking poisons in circulation (Off. Jour. of FRY, No. 38/97)
8. List of poisons with prohibited production, circulation and utilization (Off. Jour. of FRY,
No. 12/00)
9. List of poisons classified into groups (Off. Jour. of FRY, No. 12/00)
FRY
PROTECTION FORM WASTE AND HARMFUL SUBSTANCES
1. Law on determining organs for performing tasks in the scope of protection from ionizing
radiation (Off. Jour. of RM, No. 13/89)
Montenegro
1. Decree on determining expert institutions for performing sampling, measuring and
investigation of radionuclide contents in construction materials (Off. Jour. of RS, No. 33/95)
Serbia
18. Decision on keeping the record of sources of ionizing radiation and irradiation of
population, patients and persons exposed to effects of ionizing radiation at work (Off. Jour. of
FRY, No. 45/97)
19. Decision on systematic investigations of radionuclide contents in the environment (Off.
Jour. of FRY, No. 45/97)
20. Decision on conditions to be fulfilled by legal persons for performing measuring for
assessing the level of exposure to ionizing radiation of persons working with radiation sources,
patients and population (Off. Jour. of FRY, No. 45/97)
21. Decision on criteria for assessing safety of nuclear facilities (Off. Jour. of FRY, No. 2/98)
22. Decision on conditions to be fulfilled by persons working on tasks and activities of
managing production process in a nuclear facility and tasks and activities of monitoring such
process (Off. Jour. of FRY, No. 2/98)
1. Law on Planning and Disposition of Space and Settlements (Off. Jour. of RS, No. 44/95,
23/96, 16/97, 46/98)
2. Law on construction of facilities (Off. Jour. of RS, No. 44/95, 24/96, 16/97)
3. Law on spatial plan of Republic of Serbia (Off. Jour. of RS, No. 13/96)
4. Law on special conditions for granting building permits and utilization permits for certain
facilities (Off. Jour. of RS, No. 16/97)
Serbia
REGULATIONS ON SPATIAL ORGANIZATION AND CONSTRUCTION
1. Law on cleaning, collecting and utilization of waste products (Off. Jour. of SRM, No.
20/81, 36/81, 2/89, 19/89)
2. Law on water supplying, removing of wastewater and depositing of solid waste in the
territory of municipalities: Herceg Novi, Kotor, Tivat, Budva, Ulcinj and Cetinje (Off. Jour. of
RM, No. 46/91)
3. Regulations on sanitary-technical conditions to be fulfilled by waste deposits and locations
for discharging communal waste, forms of spatial organization and waste deposit sites
maintenance and locations for discharging communal waste and on methods for destroying
waste and communal waste (Off. Jour. of SRM, No. 20/83)
4. Regulations on criteria for selection of localities, methods and procedures for depositing
waste materials (Off. Jour. of RM, No. 56/00)
5. Decision on establishing the Public Enterprise for water supplying, treatment and removing
of wastewaters and depositing solid waste for areas of the Montenegro coast and Cetinje (Off.
Montenegro
1. Law on explosive substances, inflammable liquids and gases (Off. Jour. of SRS, No. 44/77,
45/85, 18/89, Off. Jour. of RS, No. 53/93, 67/93, 48/94)
2. Law on waste substances handling (Off. Jour. of RS, No. 25/96, 26/96)
3. Regulations on criteria for determining location and disposition of waste materials deposit
sites (Off. Jour. of RS, No. 54/92)
4. Regulations on permitted amounts of hazardous and harmful substances in soil and water
for irrigation and methods of their testing (Off. Jour. of RS, No. 23/94)
5. Regulations on methodology for chemical accident risk and environmental pollution
assessment preparatory measures and measures for remediation consequences (Off. Jour. of
RS, No. 60/94)
6. Regulations on handling waste products of hazardous nature (Off. Jour. of RS, No. 12/95)
7. Decision on establishing the coordination team for chemical accidents of a larger scale (Off.
Serbia
DRAFT
62
1. Law on planning and spatial organization (Off. Jour. of RM, No. 16/95, 22/95, 10/00)
2. Law on constructing facilities (Off. Jour. of RM, No. 55/00)
3. Law on urban and construction inspection (Off. Jour. of RM, No. 56/92, 16/95, 23/95)
4. Regulations on environmental impact assessment study for operations in the environment
National Park "Skadarsko Lake" (Off. Jour. of RM, No. 47/92)
National Park "Durmitor Mountain" (Off. Jour. of RM, No. 47/92)
9. Decision on starting the elaboration of changes and additions to the spatial plan of the
Republic of Montenegro (Off. Jour. of RM, No. 43/94)
10. Decision on starting the elaboration of the spatial plan for the sea good (Off. Jour. of RM,
No. 16/97)
National Park "Durmitor Mountain" (Off. Jour. of RM, No. 20/97)
14. Guidelines on contents of environmental impact assessment study for operations in the
environment (Off. Jour. of RM, No. 21/97)
15. Spatial plan of the SR Montenegro to 2000 (Off. Jour. of RM, No. 17/97)
Montenegro
5. Regulations on spatial plan for basin of water accumulation "Begovina" (Off. Jour. of RS,
No. 43/99)
6. Regulations on premises and works environmental impact assessment (Off. Jour. of RS, No
61/92)
7. Regulations on contents and elaboration of urban plan (Off. Jour. of RS, No. 33/99)
8. Decision on elaboration of spatial plan for source area for regional water supply subsystem
"Rzav" (Off. Jour. of RS, No. 42/99)
9. Decision on elaboration of spatial plan for basin of water accumulation "Selova" (Off. Jour.
of RS, No. 42/99)
10. Decision on elaboration of spatial plan of Kolubara lignite basin (Off. Jour. of RS, No.
11/00)
1. Criminal law of the Republic of Serbia (Off. Jour. of SRS, No. 26/77, 28/77, 43/77, 20/79,
24/84, 39/86, 51/87, 6/89, 42/89, 21/90, Off. Jour. of RS, No. 16/90, 26/91, 75/91, 9/92, 49/92,
23/93, 67/93, 47/94, 51/94, 17/95, 44/98)
2. Law on communal activities (Off. Jour. of SRS, No. 16/97, 42/98)
3. Law on the protection at work (Off. Jour. of RS, No. 42/91, 53/93, 67/93, 48/94, 42/98)
4. Law on public health protection (Off. Jour. of RS, No. 17/92, 26/92, 50/92, 52/93, 53/93,
67/93, 48/94, 25/96)
5. Law on sanitary monitoring (Off. Jour. of RS, No. 34/94)
6. Law on protection from elementary and other large-scale natural disasters (Off. Jour. of
SRS, No. 20/77, 24/85, 27/85, 6/89, 52/89, Off. Jour. of RS, No. 53/93, 67/93, 48/94)
7. Law on spas (Off. Jour. of RS, No. 80/92)
8. Law on tourism (Off. Jour. of RS, No. 35/94, 38/94, 48/99)
9. Law on special taxes and trade tax (Off. Jour. of RS, No. 43/94, 53/95, 24/96, 52/96, 55/96,
1/97, 60/97, 42/98, 18/99, 33/99, 48/99, 54/99, 25/00)
10. Law on corporate profit tax (Off. Jour. of RS, No. 43/94, 53/95, 52/96, 54/96, 42/98,
33/99, 48/99, 54/99)
11. Law on the citizens profit tax (Off. Jour. of RS, No. 43/94, 74/94, 53/95, 12/96, 24/96,
39/96, 52/96, 16/97, 20/98, 42/98, 18/99, 33/99, 48/99, 54/99, 10/00)
Serbia
1. Law on the customs service (Off. Jour. of FRY, No. 45/92, 16/93, 50/93, 24/94, 28/96,
29/97, 59/98, 17/99)
2. Law on the international trade (Off. Jour. of FRY, No. 46/92, 49/92, 16/93, 24/94, 28/96,
29/97, 59/98, 16/99, 44/99, 53/99, 55/99)
3. Law on foreign investments (Off. Jour. of FRY, No. 79/94, 15/96, 29/96)
4. Law on free zones (Off. Jour. of FRY, No. 81/94, 28/96)
5. Law on enterprises (Off. Jour. of FRY, No. 29/96, 33/96, 29/97, 59/98, 74/99)
6. Law on the fundamental of the tax system (Off. Jour. of FRY, No. 30/96, 29/97, 12/98,
59/98, 41/99, 53/99)
7. Law on standardization (Off. Jour. of FRY, No. 30/96, 59/98)
8. Law on health validity of food supplies and objects of general use (Off. Jour. of SFRY, No.
53/91, Off. Jour. of FRY, No. 24/94, 28/96)
9. Law on quality control of agricultural and food products in international trade (Off. Jour. of
FRY, No. 12/95, 28/96, 59/98)
10. Law on protection of population from contagious diseases endangering the whole country
(Off. Jour. of FRY, No. 46/96, 12/98)
11. Law on records in the scope of public health (Off. Jour. of FRY, No. 12/98)
12. Criminal law of the Federal Republic of Yugoslavia (Off. Jour. of SFRY, No. 44/76,36/77,
34/84, 37/84, 74/87, 57/89, 3/90, 38/90, 45/90, 54/90, Off. Jour. of FRY, No. 35/92, 16/93,
31/93, 24/94)
FRY
OTHER REGULATIONS IN RELEVANCE TO THE ENVIRONMENTAL PROTECTION
DRAFT
63
1. Criminal law of the Republic of Montenegro (Off. Jour. of RM, No. 42/93, 27/94, 14/94)
2. Law on communal activities (Off. Jour. of RM, No. 12/95)
3. Law on the protection at work (Off. Jour. of RM, No. 35/98)
4. Law on health protection and health insurance (Off. Jour. of SRM, No. 39/90, 21/91, (Off.
Jour. of RM, No. 30/92, 58/92, 27/94, 30/94, 16/95, 20/95, 22/95, 23/96)
5. Law on protection from elementary natural disasters (Off. Jour. of RM, No. 57/92)
6. Law on tourism and hotel management (Off. Jour. of RM, No. 16/95, 22/95)
7. Law on trade tax (Off. Jour. of RM, No. 4/94, 13/94, 42/94, 1/95, 1/96, 13/96, 45/98)
8. Law on corporate profit tax (Off. Jour. of RM, No. 3/92, 17/92, 30/93, 3/94, 42/94, 1/95,
20/95, 40/95, 13/96, 45/98)
9. Law on the citizens profit tax (Off. Jour. of RM, No. 30/93, 3/94, 13/94, 42/94, 1/95, 1/96,
13/96, 45/98, 53/00)
10. Law on property taxes (Off. Jour. of RM, No. 3/92, 17/92, 30/93, 3/94, 11/95, 20/95,
22/95)
Montenegro
12. Law on property taxes (Off. Jour. of RS, No. 43/94, 53/95, 54/96, 42/98, 18/99, 33/99,
48/99, 54/99)
DRAFT
16.
15.
14.
13.
12.
11.
10.
9.
8.
7.
6.
5.
4.
3.
2.
1.
65
MULTILATERAL ENVIRONMENTAL AGREEMENTS RATIFIED BY
YUGOSLAVIA
Convention Concerning the Use of the White Lead in Painting, Geneva, 1921
Entry into force 1923
Entry into force by Kingdom of Yugoslavia 1929
Agreement for the Establishment of a General Fisheries Council for the Mediterranean (as
amended), Rome, 1949
Acceptance by FPR Yugoslavia 1951
International Convention for the Protection of Birds, Paris, 1950
Entry into force by SFR Yugoslavia 1973
Convention for the Establishment of the European and Mediterranean Plant Protection
Organisation (as amended), Paris, 1951
Entry into force by FPR Yugoslavia 1953
International Plant Protection Convention, Rome, 1951
Ratified by FPR Yugoslavia 1955
Convention on Protection of Cultural Goods in Case of Armed Disputes 1954
Enter into the force 1962
Ratified by FPR of Yugoslavia 1956
International Convention for the Prevention of Pollution of the Sea by Oil (as amended),
London, 1954
Amendments to the International Convention for the Prevention of Pollution of the Sea by
Oil, 1954, Concerning Tank Arrangements and Limitation of Tank Size, London, 1971
Not yet in force
Acceptance by SFR Yugoslavia 1976
Convention Concerning Fishing in the Waters of the Danube, Bucharest, 1958
Entry into force SFR Yugoslavia 1958
Convention on the High Seas, Geneva, 1958
Ratified by SFR Yugoslavia 1966
Convention on Fishing and Conservation of the Living Resources of the High Seas, Geneva,
1958
Convention on the Territorial Sea and Contiguous Zone, 1958
Convention on the Continental Shelf, Geneva, 1958
International Convention for the Safety of life at Sea, 1960
Vienna Convention on Civil Liability for Nuclear Damage, Vienna, 1963
Entry into the force 1977
European Agreement Concerning the International Carriage of Dangerous Goods by Road
(ADR); Annex A - Provisions Concerning Dangerous Substances and Articles; Annex B Provisions Concerning Transport Equipment and Transport Operations, 1967
Entry into force Ratified by SFR Yugoslavia 1970
17. European Convention for the Protection of Animals during International Transport
1968
18. European Convention on the Protection of Archaeological Heritage, London, 1969
19. International Convention on Civil Liability for Oil Pollution Damage (as amended),
Brussels, 1969
20. International Convention Relating to Intervention on the High Seas in Case of Oil
Pollution Casualties, Brussels, 1969
21. Convention on Wetlands of International Importance Especially as Waterfowl Habitat,
Ramsar, 1971
22. Treaty on the Prohibition of the Emplacement of Nuclear Weapons and Other Weapons
of Mass Destruction on the Sea Bead and Ocean Floor and in the Subsoil Therefor,
London, Moscow, Washington, D.C. 1971
23. Convention Concerning Protection Against Hazards of Poisoning Arising from Benzene,
Geneva, 1971
24. International Convention on the Establishment of an International Fund for
Compensation for Oil Pollution Damage (as amended), Brussels, 1971
25. International Convention on the International Regulations for Preventing Collision at
Sea, 1972
26. Convention Concerning the Protection of the World Cultural and Natural Heritage,
Paris, 1972
27. Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other
Matter (as amended), London, Mexico City, Moscow, Washington, D.C., 1972
Accession by SFR Yugoslavia 1976
28. Protocol Relating to Intervention on the High Seas in Cases of Marine Pollution by
Substances Other Than Oil (as amended), London, 1973
29. International Convention for the Prevention of Pollution from Ships, London, 1973
Not in force
Appendix 2 to Annex 4: Multilateral Environmental Agreements
DRAFT
66
30. Convention on International Trade in Endangered Species of Wild Fauna and Flora, 1973,
Washington, D.C.
Ratified by FR Yugoslavia 2001
31. Convention Concerning Prevention and Control of Occupational Hazards Caused by
Carcinogenic Substances and Agents, Geneva, 1974
32. European Convention for the Protection of Animals Kept for Farming Purposes, 1976
33. Convention for the Protection of the Mediterranean Sea Against Pollution, Barcelona, 1976
34. Protocol for the Prevention of Pollution of the Mediterranean Sea by Dumping from Ships
and Air-crafts, Barcelona, 1976
35. Protocol Concerning Co-operation in Combating Pollution of Mediterranean Sea by Oil and
Other Harmful Substances in Cases of Emergency, Barcelona, 1976
36. Convention Concerning the Protection of Workers Against Occupational Hazards in the
Working Environment due to Air Pollution, Noise and Vibration, Geneva, 1977
37. Protocol of 1978 Relating to the International Convention for the Prevention of Pollution
from Ships, 1973, London, 1978
38. Convention on Long-range Trans-boundary Air Pollution, Geneva, 1979
Ratified by SFR of Yugoslavia 1987
39. Convention on the Physical Protection of Nuclear Material, Vienna, 1980
Entry into force by SFR of Yugoslavia 1987
40. Protocol for the Protection of the Mediterranean Sea against Pollution from Land-based
Sources, Athens, 1980
41. Convention Concerning Occupational Safety and Health and the Working Environment,
Geneva, 1981
42. Protocol Concerning Mediterranean Specially Protected Areas, Geneva, 1982
43. United Nations Convention on the Law of the Sea, Montego Bay, 1982
44. Protocol to the 1979 Convention on Long Range Trans-boundary Air Pollution on Financing
of the Co-operative Programme for Monitoring and Evaluation of the Long-range
Transmission of Air Pollutants in Europe (EMER), Geneva, 1984
Entry into the force 1988
Accession by SFR of Yugoslavia 1987
45. Vienna Convention for the Protection of the Ozone Layer, Vienna, 1985
46. European Convention on the Protection of the Architectural Heritage 1985
Convention on the Conservation of Migratory Wild Animals, Bonn 1979
Adopted 1979
2. Convention on the Conservation of European Wildlife and Their Natural Habitats, Bern
1979
Adopted 1979
3. Convention on Environmental Impact Assessment in a Trans-boundary Context
Adopted 1992
1. Convention on the Trans-boundary Effects of Industrial Accidents
Adopted 1992
Convention on the Protection and Use of Trans-boundary Watercourses and International
Lakes
Adopted 1992
6. Convention on Co-operation for the Protection and Sustainable Use of the Danube River
(Danube River Protection Convention)
Adopted 1994
Convention on Access to Information, Public Participation in Decision-making and
Access to Justice in Environmental Matters, Aarhus 1998
Adopted 1998
1.
MULTILATERAL ENVIRONMENTAL AGREEMENTS, IN THE PROCESS OF
RATIFICATION BY YUGOSLAVIA
47. Treaty on Pollution Protection of the Tisza River Waters and Tributaries 1986
Enter into the force Ratified by SFR of Yugoslavia 1990
48. Convention Concerning Safety in the Use of Asbestos, Geneva, 1986
49. Convention on Early Notification of a Nuclear Accident, Vienna, 1986
50. Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency,
Vienna, 1986
51. Montreal Protocol on Substances that deplete the Ozone Layer, Montreal, 1987
52. Basel Convention on the Control of Trans-boundary Movements of Hazardous Wastes
and their Disposal, Basel, 1989
53. Convention on Biological Diversity, Rio de Janeiro, 1992
Ratified by SR Yugoslavia 2001
54. United Nations Framework Convention on Climate Change, New York, 1992
Ratified by SFR of Yugoslavia 1997; by FRY 2001
55. Convention on the Prohibition of the Development, Production, Stockpiling and Use of
Chemical Weapons and on Their Destruction, Paris, 1993
Ratified by SR Yugoslavia 2001
56. Agreement Relating to the Implementation of Part XI of the United Nations Convention
on the Law of the Sea of 10 December 1982, New York, 1994
Bound under simplified procedure 1995
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DRAFT
ANNEX 5: ENERGY, TRANSPORT AND ENVIRONMENT IN FRY
Serbia – Background on Energy Sector
120. In Serbia, the energy sector accounts for more than 5% of GDP and is one of the largest
sectors of the economy. It comprises electric power, coal production, district heating, oil and
gas production and imports.
121. In FRY, domestic primary energy production in 2000 consisted of 265 PJ of coal (98%
of which is lignite); 40 PJ of oil; 24 PJ of natural gas; 43 PJ of hydropower and 36 PJ of
biomass, mainly wood, which is usually not reported in the energy balance. These are not
sufficient to satisfy energy demand of the economy as such, the Republic imports 12 PJ of hard
coal and coke; 90 PJ of oil; and 60 PJ of natural gas.
122. The centralized electricity production system is comprised of hydro and thermal power
plants (about 7,100 MW capacity, of which 2,800 MW or roughly 40% are hydropower plants)
and is managed by the Electric Power Industry of Serbia (EPS). It must be noted that EPS is
also responsible for the transmission and distribution of electricity to consumers. In Serbia, the
energy consumption is increasing. Of the average annual electricity consumption, up to 30
TWh is covered by domestic production, and an additional 2.5 TWh of electricity is imported
per year.
123. Coal, extracted locally, is the principle fuel for electricity generation in the country.
International assistance has been provided to support open pit coal mines with spare parts,
vehicles, cables and various materials. However, major required activities have not been
accomplished such as: land acquisition, necessary overburden removal, internal roads and
drainage improvements. The delays in sufficient land acquisition are having a significant
impact on coal output.
124. There are two refineries in Serbia, the Novi Sad of 1 M.t capacity and the Pancevo of
3.5 M.t capacity, and also pipeline system for transporting oil, which is about 420 km long.
The 1,500 km of gas pipeline is used for the transportation and distribution of domestic gas
production (in Vojvodina) and imported natural gas within Serbia. In Serbia, for the year
2000/2001, approximately 2/3 of the population depended on electricity for heat.
125. As mentioned above, the energy consumption in Serbia continues to increase.
Electricity consumption during last ten years has been gradually shifting to the household
sector, with its share increasing from 42% in 1990 to almost to 58% in the year 2000, while the
share of industrial sector dropped from 51% in 1990 to 31% in 2000, reflecting the increased
use of electricity for heating and the decline in economic activity. Three industrial branches,
namely iron and steel metallurgy, basic chemical products and industry of construction
materials, consume approximately 50% of total energy used in industrial sector, even though
the share of GDP from these branches is below 15%.
126. With regard to heating, municipal district heating systems are used for heat production
primarily with heat only boilers - that have a capacity of about 6,300 MJ/s. In Serbia, the
decentralized energy production sources in the industrial enterprises, mainly comprise of
boilers with a capacity of 5,000 MJ/s for heat production and about 50 PJ per year.
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Trends and Main Environmental Concerns
127. Serbia’s energy sector traditionally produced enough electricity to meet domestic
demand also exported surplus. However the sector now faces severe problems related to the
consequences of the past few years of conflict: sanctions that limited imports of equipment and
fuel, NATO destruction of energy infrastructure, fiscal deficit, outdated and insufficient
maintained energy facilities and the impossibility of implementation of modern regulation and
legislation. Electricity reform is therefore of paramount importance.
128. The primary environmental concerns in the energy sector focus on two areas: the
unsustainably high level of energy consumption, which contributes to fiscal deficit and results
in unnecessarily high GHG emissions and the critical impact of lignite-fired power plants (and
associated mines) on air pollution.
Inefficient Energy Consumption And Macroeconomic Implications
129. Long periods of low energy prices, have left the energy sector unbalanced and skewed;
subsidized prices have led to a major increase in the use of electricity particularly for
households. The low revenues also have led to severe neglect of maintenance and investment
in the energy sector. In spite of a significant slow–down in economic activities and thus
industrial energy demand, power consumption actually increased since 1990 by about 6,000
GWh to 33,600 GWh. As might otherwise be expected, the decline in GDP was not
accompanied by a decline in energy consumption. Energy use intensity per unit of GDP
increased by 60% during the 1990s from 0.54 kg of oil equivalent per unit of GDP (koe/GDP)
in 1990 to 0.78 koe/GDP in 1999. It is estimated that energy subsidies resulted in a quasi-fiscal
deficit of US$1.1 billion in 2000 and has made maintenance and new investments financially
impossible to pursue. Raising energy prices to economic levels, as the government has begun
to do so, will spur energy efficient investments by industries and households, reducing
demands, emissions and also improving the fiscal condition of the economy.
130. Another problem is that energy consumption is so inefficient particularly in regard to
District heating (DH) systems, which operate in 43 towns in Serbia and are mainly based on
heat-only, boiler energy sources. The principal problem in this area relates to the poor financial
situation of DH companies due to inadequate tariff levels and considerable heat and hot water
losses. At 2000 prices, DH companies managed to recover funds sufficient only to pay less
than 20 % of the cost of gas. These DH systems are oversized, particularly as they operate
only part of year and there is great potential for increasing energy efficiency and reducing
operational losses.
Lignite Fired Power Plants and Mines
131. Air pollution from energy-sector activities is particularly severe in the KolubaraObrenovac corridor, where are located about 3,000 MW of lignite-fired power plants as well as
related ash pits, and Kolubara lignite mines. Hence, there is severe air pollution related to the
burning of low quality lignite coal in power plants. These power plants all lie in a 26-mile
corridor and hence the impact on air quality has severe human health and ecosystem
implications. Higher than average incidence of respiratory problems have been reported in this
region.
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132. Along with this, ash handling is a particularly acute problem as 4-5 million tons of ash
per year is sent to ash ponds. Although, the ash content of 15-20% is reasonable, the ash
burden increases because the low heat content of lignite requires significantly higher volumes
be used per-unit of electricity output. Since, the volume of lignite required per unit of
electricity produced is nearly double that of high heat content coal and the power plants are
essentially lacking in desulphurization equipment, the result is higher SO2 emissions than
would normally be expected (particularly true of the Kostalac power plant east in Belgrade).
133. Apart from the inefficient use of natural resources, there are other environmental
problems related to ash handling including arsenic contamination that is reported to pose a
threat to groundwater. There have been various measures to reduce contamination of ground
water. Wells surrounding the ash pits are designed to control pollution. Along with this, EPS is
experimenting with new technologies and alternative uses of ash to mitigate this problem.
Technical Barriers to Environmental Protection in Lignite Power Plants
134. Serbian lignite-fired power plants do not have equipment to measure emissions on a
continuous basis. Samples are taken periodically, however, this is sub-optimal both in terms of
quality of information and manpower costs. Other problems include the poor quality of
electrostatic precipitators in some of the older units, which need to be upgraded, as well as
drifting particulates from the coal mine and the ash ponds. The precipitators at the newer units
at Nikola Tesla Plant B have been rebuilt to meet EU standards. However, the 32-year old 200
MW unit at Nikola Tesla A remains a serious problem.
135. This issue needs to be addressed either by retiring the unit once the emergency energy
supply shortfall has been met, or by upgrading the equipment. Given the continued problems
with supply shortfalls, upgrading the electrostatic precipitator appears to be the preferred
alternative. Fines provide some incentive to deal with these problems, but the fines are so
small that these investments are not a priority for EPS.
136. Both the Nikola Tesla and Kostalac power plants use cooling systems (Kolubara uses
cooling towers), which increase the cooling water temperature by 8-9 degrees Celcius and river
temperatures by roughly 3 degrees Celcius. The Government has imposed an upper limit on
Sava River water temperatures of 28 degrees Celcius, which is periodically exceeded in the
summer.
Financial Barriers to Environmental Protection in Lignite Power Plants
137. The lignite mines have not had adequate funding to enable satisfactory land reclamation
since 1992. Prior to 1991, about 1,800 hectares were reclaimed indicating the will to address
the problem should funds be available. Limited reclamation has taken place at Kolubara Field
D and current plans are for 200 hectares of reclamation in 2002. This financing problem of
lignite mines primarily stems again from low electricity prices which do not even cover the
operational costs. KfW is expected to assist with funding to address the problem of lignite
field management and lignite quality.
138. In summary, EPS estimates that 500 million Euros are needed to address
environmental problems associated with the lignite-fired plants. With the low electricity
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DRAFT
prices, no immediate solution to this problem is expected other than the donor support
for equipment upgrading and energy efficiency measures to decrease consumption.
Availability and Feasibility of Clean Energy Alternatives
139. Hydroelectric plants: Although hydroelectricity may be another option to meet supply
and demand side economics of energy use, Serbian hydroelectric power plants suffer from two
significant environmental problems: siltation of reservoirs and increased variation in river
flows. Siltation of the Iron Gates Reservoir is of particular concern with an estimated addition
of 20 million cubic meters of sediment each year. Channels have been dredged in the reservoir
but these have not been well maintained due to funding constraints. The river flows have
slowed roughly 400 km upstream because of the choking effect of the sedimentation. In some
areas, islands of high quality soil have appeared.
140. Alternative technologies. Several alternative technologies are being considered to
increase the supply electricity and reduce the impact of electricity production on the
environment, including: coal bed methane; coal gasification; biogas boilers; and wind turbines.
Renewable resources also play an important part in the Government’s energy strategy with
particular focus on hydroelectric plants, biogas, solar and wind energy. A recent study
identified that small hydro-plants could have a considerable impact in meeting longer-term
energy needs. However, all of these options and priorities have to be examined in greater detail
before development can be considered.
Institutions and Policies
141. The energy sector’s problems and the environmental degradation over the past decade
have been compounded by factors mentioned above. Against this backdrop the new
government that came into power in late 2000 had an imposing task.
142. In the past, environmental aspects of the energy sector were assigned a relatively low
priority, except where the investments assisted the economic agenda. However, the Ministry
of Mining and Energy is in the process of addressing medium to long-term problems through
the development of an energy strategy, which also includes assessing and tackling the impacts
of the energy sector on the environment.
143. Persistently low electricity prices during the 1990s allowed customers to increase
consumption to levels which exceed norms relative to income levels. To tackle the problem of
a quasi budget deficit from the energy subsidies, the Government’s energy strategy commits to
increasing prices to reflect the cost of supply by 2005. The severity of energy supply shortage
has necessitated that the government adopt a two-pronged effort of increasing supply capacity
as well as reducing demand. Demand reduction has additional benefits, helping the fiscal and
current account deficit, as well as reducing the impact on the environment.
144. Price adjustments will provide an incentive for reduction in energy consumption levels
and prudent inter-fuel substitution. The price increases will need to be complemented by an
information dissemination campaign that the Government initiated in 2001. In addition, a
mechanism will need to be established to enable households to invest in technologies to
decrease energy consumption. The Government has established the Serbian Energy Efficiency
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DRAFT
Agency (SEEA) to implement this program. Both the European Agency for Reconstruction
(EAR) and the World Bank are working with the Government to build SEEA’s institutional
capacity and to establish systems and procedures with assistance from USAID-funded
consultants.
145. An important component of the energy efficiency program is improved use of district
heating where it is economically viable. The donor community is providing assistance to
upgrade district heating systems in the major cities, with particular focus on Belgrade. There is
considerable scope for reducing the cost of supply and increasing the efficiency of primary fuel
use by utilizing waste heat from power plants. Effective extensions of the network in urban
areas will also enable a decrease in air pollution.
146. In the early 1990s, many lignite fired boilers in the city center were replaced by district
heating but the program was curtailed due to a lack of funding. The energy pricing reforms ,
including price increases as well as changes to the structure of district heating prices needs to
be addressed to provide incentives for consumers to be more environmentally and prudent and
energy efficient. Price increases will address the financial viability issues of district heating, ,
enabling this program will be restarted. Air quality, as a result of more efficient systems,
should particularly improve during winter months.
147. Serbia’s refineries also are in need of considerable investment to improve their
operations due to the impact of NATO bombing, limited maintenance and the need to upgrade
technologies to improve the product mix. The Government plans to address this issue in two
phases. During the first phase, repairs to the plants aim to improve operating capacity and to
bring output back to what it was when the plants were originally designed. This phase will
focus on improved gasoline and diesel output as well as sulphur removal from petroleum
products. Phase two is expected to be funded by the private sector, following divestiture of
Government ownership in the refineries. This phase is expected to not only improve the
product mix, but also to enable products to meet EU standards by 2005. This would probably
mean that Serbia would be in a position to ban leaded gasoline at this time. Although, the plan
is well focused, it must be noted that the timetable is extremely ambitious.
Montenegro – Background on Energy Sector
148. Montenegro’s energy sector comprises mainly of electricity production, coal export and
the distribution of oil products from the petroleum sector. The consumption of electricity per
year in Montenegro is currently 4.3 TWh. Of this production, the coal fired thermal plant in
Pljevlja produces 1.0 TWh, the hydropower stations produce another 2.0 TWh and the
remainder of 1.3 TWh per year is imported. Electricity generation and transmission is
managed by the state-owned company Elektroprivreda Crne Gore (EPCG).
149. In Montenegro, the geological coal reserves are estimated at above 400 million tones,
and the Republic is a (modest) net exporter of coal. Approximately, 80% of the coal
production comes from the open pit Pljevlja Mines (reserves estimated at 70 million tones).
150. The petroleum sector in Montenegro is mainly limited to the oil products distribution
through the state-owned oil product retailer Yugopetrol Kotor. It consists of some offshore oil
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DRAFT
and gas exploration. Gas reserves of around 600 billion m3 have reportedly been located in the
southern part of the Adriatic Sea, but the economic viability is not proven.
151. In Montenegro, the main electricity consumer is the Aluminum Plant, accounting for
nearly half of demand. Household consumption is the second largest in the economy, mostly
due to the electric heating. There are no district heating systems in Montenegro.
152. Montenegro shares a similar history of macroeconomic trends and environmental
concerns as Serbia. Drastically low electricity prices during the 1990s led to increased energy
consumption and limited the proper maintenance of the facilities and creating environmental
problems at the lignite mine and the power plant.
Energy Inefficiency
153. The level of energy consumption in Montenegro is excessive given the size of the
economy and income levels. Although, the statistics are skewed given the impact of KAP and
Niksic Steel Mill (which are both energy intensive industries and exist as an overwhelming
component in the economy), energy consumption levels are above sustainable levels.
Sustained, low electricity prices have been part of the problem, but the Government has made
considerable efforts to correct this, as electricity prices in Montenegro are roughly 67% higher
than in Serbia as of May 2002.
154. There is however a social consideration to these hikes in energy price as much as they
may be necessary. The need to increase electricity prices is constrained by affordability
concerns where electricity is used for household heating. However, for much of the population
(in Podgorica and along the coast), the heating season is short and temperatures moderate. The
more sparsely populated, mountainous region needs to address their specific problems, with
due regard to affordability and environmental degradation from the use of firewood. The
Pljevlja Power Plant offers a unique opportunity to connect the heating problem in the nearby
town by using the waste heat from the power plant to heat homes. A feasibility study is being
upgraded to address this proposed district heating investment. Preliminary estimates by the
Government put the cost at $20 million to serve the town population of 20,000.
Lignite Power Plants.
155. Emissions at the lignite power plants are reported to be 2-3 times the standard while
ambient air quality exceeds limits by roughly 20%. Air pollution problems are accompanied
with groundwater contamination. In Montenegro, the electrostatic precipitators are expected to
be upgraded in 2002/3 which should have a considerable impact on particulates emission
levels.
156. Among the three primary environmentally problematic locations (KAP, Niksic Steel
Mill and the Pljevlja Lignite Plant), the Pljevlja town is often referred to as the black hole of
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DRAFT
Montenegro. Each day, 5,500 tons of lignite51 is used at Pljevlja, generating roughly 300,000 to
350,000 tons of ash that leads to be stored each year. Ash handling is increasingly becoming a
problem as existing dykes are inadequate. During rainy periods, ash spills over the dykes and
contaminates the river. During the dry periods, ash is carried away to the surrounding districts.
A plan is under preparation to improve the ash handling problem.
Policy and Government Action
157. Given the problems in Montenegro, there is a need for the government to establish a
similar energy efficiency program as the one which is underway in Serbia. This would include
the removing energy subsidies, increasing energy efficiency and getting a district heating
system in order. It is important that information dissemination is coupled with a mechanism to
enable households to invest in energy saving measures. The problem in Montenegro is
expected to worsen considerably in the medium- to long-term once investments in air
conditioning accelerate. As such, these must be kept in mind while formulating policies. It
will be important to maintain the Government’s program of price reform to ensure that
incentives to conserve energy are maintained.
Serbia and Montenegro – Transport-related Pollution
158. In Serbia and Montenegro, detailed data on transportation is not yet readily available,
however, road vehicles are considered a major contributor to air pollution, especially in larger
cities. The Montenegrin coast in particular suffers from a high level of traffic in the summer
and high demands from tourists for a clean environment. Experience in neighboring countries
suggests that this source of energy-related pollution is likely to become more prominent in the
future, as power and industrial sector pollution problems are cleaned up and traffic volumes
increase. Vehicle exhaust emissions contribute to SO2, NOx, O3, particulates, and lead to the
atmosphere. The sulphur and lead pollution is particularly problematic in FRY because of poor
quality fuels, that is high sulphur diesel and leaded petrol. Lead emissions are particularly
dangerous, as even low concentrations can retard mental development in children.
Policies and Strategy for the Transportation Sector
Given the high, potential environmental, health and tourism benefits associated with
conversion to unleaded fuel, a more detailed examination of transport fuel alternatives is
critical. The most effective measure that the government could take in the short-term is to
eliminate fuel subsidies to reflect real gas prices, and open the gas distribution network to
foreign competition. These policy actions would help to bring unleaded fuel to FRY very
quickly. In the longer term, once conversion is complete, the focus can then move to reducing
emissions of other transport-related pollutants through the introduction of government policies
to upgrade the vehicle stock by setting minimum standards for new cars (including catalytic
converters), and inspection and upgrades for the existing stock. A gradual adoption of EU
standards for fuel, and monitoring programs for fuel quality, will also help reduce vehicle
emissions levels and protect human health and the environment. Other transition countries in
51
The lignite has an ash content of 15-30%, sulphur content of 1% and moisture content of 34%. The heat content
of the lignite is 9.2 KJ/kg.
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DRAFT
the region experienced similar problems in the 1990s. Relevant experience from Slovakia in
phasing out leaded gasoline is presented in Box A8.
Box A8. Phaseout of leaded gasoline in the Slovak Republic
Lead was heavily used in Slovakia (part of former Czechoslovakia) until the 1980s. The lead
content of gasoline was gradually reduced from over 0.7g/I to 0.4g/I in 1983; to 0.25g/I in 1985;
and 0.15g/I in 1989, followed by the total phaseout by the end of 1994. The market share of
unleaded gasoline increased from 6 percent in 1992 to 100 percent in 1995.
Besides health considerations about the impacts of lead, another ––mainly supply-driven – factor
contributed to the drastic change in the lead use in gasoline. As a result of a technical upgrade
undertaken in response to increasing quality requirements of its export markets, Slovnaft, the only
refinery of the Slovak Republic, developed an overcapacity in the production of high-octane
gasoline components by the early 1990s. About 70 percent of the vehicle fleet in the country,
however, consisted of cars designed to use leaded gasoline, manufactured with soft engine valve
seats, and vehicle turnover was very slow. In order to resolve the disparity between supply and
demand, Slovnaft developed a fuel additive that enabled all motorists to use unleaded gasoline by
providing the necessary lubrication to the soft engine valves in old cars. The additive has been
marketed, under the trade name ANABEX-99, as a universal fuel additive, which can be used in
cars with or without catalytic converters.
The total cost of phasing out lead from gasoline production, including the annualized investment
cost of the new isomerization and lubricant production units, the development of new additive,
and the increased operation cost of unleaded gasoline was estimated at US$0.02 per liter of
gasoline.
Slovnaft used its control over the gasoline distribution network to market the new gasoline
brands. A differentiated pricing policy in favor of unleaded gasoline and a strong public
information campaign contributed to the success of the total lead phaseout program and the
acceptance of new gasoline by consumers.
Key factors of success in eliminating lead from gasoline in the Slovak Republic were
• The commitment to environmental improvement in Slovakia by all interested parties;
• Tax incentives for he production and consumption of unleaded gas;
• General advancement in environmental understanding and changes in consumers’ values and
mind set;
• A long-term strategy for the modernization of gasoline production technologies;
• Participation of a highly qualified, expert team in the Research Center of Slovnaft Refinery;
• Highly motivated management teams in the Slovnaft and Benzinol companies;
• Relatively centralized and easily controlled gasoline distribution network.
Source: Lovei, M. 1998. “Phasing Out Lead: Worldwide Experience and Policy Implications”, World Bank and
Lovei M. (ed.). 1997. “Phasing Out the Lead from Gasoline in Central and Eastern Europe”, World Bank
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ANNEX 6. WATER SUPPLY AND SANITATION
FRY Water
164. The water supply and sanitation sector was well developed in former Yugoslavia and
even today coverage, in urban areas reflects this legacy. In 2000, 98% of the FRY population
had access to safe drinking water using the commonly accepted definition of “access to
improved water sources” as meaning sourced from a pipe, a public tap, borehole/tube well,
protected well, protected spring or rainwater (UNICEF, 2000). Around 84% of the population
receives a piped water supply to the home or yard. Coverage data disaggregated by country
region (Table A10), however, paints a clearer picture. For instance, in Serbia, 93% of the
population in the Belgrade area has water piped into their dwelling or yard, while the
proportion for the rest of Central Serbia is only 77%.
Table A10: Percentage of the population with water supply of different service levels
MAIN SOURCE OF WATER
Territory
Piped into
dwelling
Piped into
yard or
plot
Public
tap
Tubewell
/Borehole
with pump
Protected
dug well
Unprotected
dug well
Other
Missing
/ DK
Total
FRY excl.
Kosovo
83.8
2.8
0.6
4.4
6.8
0.7
0.5
0.3
100
Montenegro
85.1
6.0
1.0
1.1
3.0
0.4
2.2
1.2
100
83.7
2.6
0.6
4.6
7.0
0.8
0.4
0.3
100
81.3
2.6
0.6
4.4
9.6
1.0
0.3
0.2
100
C. Serbia
excl.. Bld
77.0
3.2
o.8
4.8
12.4
1.3
0.4
0.2
100
Belgrade
92.9
1.2
0.0
3.5
1.9
0.3
0.1
0.0
100
Vojvodina
90.4
2.5
0.7
5.2
0.1
0.0
0.7
0.5
100
Urban
97.0
1.0
0.1
0.4
0.4
0.0
0.3
0.3
100
Rural
68.0
4.8
1.3
9.1
14.1
1.6
0.8
0.3
100
Serbia excl.
Kosovo
Central
Serbia
165. These coverage figures (as all coverage figures in this report, are from the UNICEF
Indicator Cluster Survey 2000) are misleading in other regards as well. Households appear to
have reported what they have, not what is properly functioning. Many of the piped water
supply systems are operating poorly, if at all, particularly in rural areas. The Republic
Institutes of Public Health (IPH) have the responsibility of monitoring drinking water supplies
and the authority to close systems, which do not produce water according to standards. In
Serbia IPH has closed many systems, usually in small towns (5,000 – 10,000 population). The
most common operational problem that leads to closure is lack of a functioning disinfection
system – chlorination in the case of FRY. Either the equipment is broken or the chlorine is not
available. NATO bombings in 1999 destroyed the two chlorine manufacturing plants in FRY
75
DRAFT
and since then supplies have been erratic. The coverage figures also do not reflect service
interruptions, which are very common (Table A11). Again there are significant regional
differences with Vojvodina experiencing the most and longest interruptions in service.
Table A11: Percentage of the population with interruptions of water supply
Territory
FRY excl. Kosovo
Rep. of Montenegro
Rep. of Serbia excl. Kosovo
Central Serbia
Vojvodina Area
Urban
Rural
None
51.7
41.5
52.3
57.4
39.6
55.9
46.0
Yes,
sporadic
28.4
29.9
28.3
23.5
40.3
26.8
30.4
Yes, on
daily
basis
5.0
7.1
4.9
5.8
2.6
3.7
6.7
Yes, during
the summer
season
15.0
21.4
14.6
13.4
17.6
13.6
16.8
Number
5,730
350
5,380
3,849
1,53
3,270
2,460
166. The FRY municipalities reporting the best water quality are the large cities (Belgrade,
Novi Sad, Nis and Podgorica) where there are more financial resources to adequately operate
and maintain water supply systems. The municipalities recording the poorest water quality
often correspond to those housing refugees and Internationally Displaced Persons, though it is
not known whether this is due to prior problems with water infrastructure or to increased
demands on the system (UNICEF, 2001). Medium size towns and rural areas have the most
difficulty providing safe and adequate supplies of drinking water. There are significant
regional differences in water quality with supplies in northern Vojvodina the worst and
considered unsuitable for drinking water purposes without treatment.
167. Rural water supply systems are a combination of formal and regulated piped water
supply systems owned and operated by the municipality; unregulated private piped systems the
communities built (and operate) themselves; and private wells, which are also unregulated.
Data is very scarce on rural water supply systems but some estimates indicate that about 50
percent of the rural population uses an unregulated supply (OCHA 2001). Unregulated
drinking water supplies are not monitored by the IPH, as are regulated supplies, which may
render rural communities and households particularly vulnerable to water quality problems.
There is scattered evidence that the water quality of rural water systems can be expected to be
even worse than the urban systems. The Serbian IPH, based on sporadic measurements,
estimates that about 90 percent of the informal, unregulated rural water supply systems do not
comply with bacteriological standards. A survey conducted by the Montenegro IPH in 2001
showed that out of 194 private wells that were analyzed in rural areas, 120 (62%) did not
comply with bacteriological standards.
168. With the exception of the public/private Montenegro coastal water utility (discussed
later), all water utilities are municipal, publicly-owned companies that are managed by the
local authorities. Each of them has a managing board, comprising representatives of the most
important municipal stakeholders. A typical utility provides water supply and wastewater
services and sometimes solid waste management. They also may provide street lighting, parks,
cemeteries, and green areas in the city. Although many are legally independent entities on
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paper, generally, these enterprises have little autonomy and no control over crucial aspects of
their business. Investment decisions have been taken until now usually at the municipal or
national government level, with a strong bias towards new infrastructure, disregarding
improved maintenance and rehabilitation of existing assets.
169. Operationally, the sector can be characterized as having huge physical losses in the
order of 50% and more; no demand management; inadequate pricing policies; and fragmented
institutional arrangements. Most areas have high per capita water consumption (figures in the
order of 300 lpc/d are not uncommon – average in Western Europe is 180-200 lpcd), well
above the rates in comparable and more developed European neighboring countries. By
international standards the utilities are overstaffed, fairly inefficient, and lacking in modern
management and control systems and governance.
Serbia Water
170. In Serbia the coverage of drinking water supplies in homes or yards is 82% with an
urban/rural breakdown of 98% and 63%, respectively. Regional differences are significant
particularly in rural areas. Central Serbia has 71% of rural settlements receiving piped water,
versus 87% in Vojvodina.
171. There are approximately 7,000 settlements and communities in Serbia the majority of
which, 90%, have a population of fewer than 2,000 people. The principal municipal point
source polluters are the settlements with over 10,000 inhabitants, making up only 2.2% of the
total number of settlements but causing more than 90% of total pollution load. There are very
few large cities but they account for most of the population. Half of the Serbian population
receives service from public water supply systems of which there are 153 serving 168
municipalities and their environs. About half of the population receives water from the three
largest water supply systems (Belgrade, Novi Sad, and Nis), with the remainder served by
medium-sized public water supply systems of which there are 72 serving municipalities of
10,000 to 100,000 population. Data on access to piped water supply and sewerage for selected
municipalities can be found in Table A13.
Table A13: Selected municipal water supply and wastewater utilities in Serbia*
Municipal Water &
Wastewater Utility
Belgrade
Nis
Krragujevac
Kraljeva
Smederevo
Sremska Mitrovica
Sombro
Sabac
Bujanovac
Pirot
Population
Served**
1,650,000
317,000
175,000
115,000
110,000
100,000
80,000
75,000
71,000
55,000
* From “Breaking with the Past: Chapter 9.”;
Water Supply
coverage, %
80
90
85
90
98
100 (city); 80 (muni)
100
65
65
95
**Includes refugees
77
Sewerage coverage,
%
65
70
65
80
65
80
45
50
70
80
DRAFT
172. Approximately 50% of the population is considered "rural" in Serbia. While data
varies, around 60 to 95% of the rural population uses private systems, often wells. It is
estimated there are about 300,000 private wells but no confirmation of this figure is available.
The rest of the rural population receives water through small, uncontrolled water supply
systems. About 350,000 residents of Belgrade (mostly on the outskirts) are not connected to
municipal water systems and rely on private wells. Drinking water quality is uniformly poor in
terms of both bacteriological and physical/chemical standards, with 29% of water supply
systems not meeting either (Table A14) (IPH 2001).
Table A14: Percentage of drinking water quality systems in Serbia not meeting water
quality standards in 2001
REGION
Serbia – total
Central Serbia
Vojvodina
>5% of samples do not
meet bacteriological
standards
49%
41%
75%
>20% of samples do
not meet physical /
chemical standards
41%
31%
75%
Do not meet either
bacteriological or
physical/chemical standards
29%
17%
67%
*Institute of Public Health. Based on drinking water quality reports for 152 water supply systems in the Republic
of Serbia, of which 116 are located in Central Serbia and 36 are from Vojvodina.
173. There are significant regional differences in water quality between Central Serbia and
Vojvodina. The primary problems with physical chemical water quality parameters are
turbidity, iron, manganese, nitrates and, in the case of Vojvodina, arsenic. Central Serbia’s
main problem is bacteriological contamination with greater than 41% of samples not meeting
standards. Vojvodina has severe problems with both physical/chemical and bacteriological
standards; 67% of water samples do not meet standards. Children in the school setting appear
to be particularly at risk since 90 schools in Vojvodina have no water supply facilities, and in
508 schools, the drinking water was found to be bacteriologically unsatisfactory (MihajlovicVukmirovic, et al 2001). Only in Belgrade is the water quality generally adequate with greater
than 90% of water samples falling within standards. The investment needs for 2002-07 for
improved drinking water supply systems throughout the country have been estimated at US$
900 million (Table A15).
Table A15: Serbia - Estimate of needed capital funds for water supply development from
2001-05 (five years)
Development Activity
Development of regional water supply systems
Multiple purpose reservoirs
TOTAL
Capital Funds Needed
(US$ million)
675
225
900
174. The Ministry of Agriculture, Forestry and Water Management (MAFW), which is the
agency responsible for construction of water supply systems, considers priority areas for
investments to be Southern Serbia: ranje, Bujanova, and Presevo; Bor in eastern Serbia (for
quantity issues); and Dojevac and Bojnik for quality problems.
Montenegro Water
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DRAFT
175. There are 25 municipal water supply systems in Montenegro supplying 213 settlements
(40 urban and 173 rural) and approximately 500,000 people. Over 90% of the population
receives piped water to their house or yard. There are frequent interruptions in service noted,
particularly in the summer. Only two water systems (Pljevlja and Nerceg Novi) utilize water
from surface supplies. Almost all drinking water supplies come from groundwater resources,
primarily springs (70%) which are of very high quality and deliver 109,403,000 m3/annually
(or 3.5 m3/sec). Of this quantity produced, only 48% (1.7 m3/sec) is delivered; 52% is
unaccounted for. By system, losses range from 36-80%. Clearly elimination of these
enormous water losses should be one of the top priorities in the sector.
176. The main water supply problems in Montenegro are: (i) insufficient water quantity for
the coastal cities during the summer tourist season when the population rises from 180,000 to
500,000; and (ii) pollution of water resources by municipal and industrial wastewater
discharges. Deterioration of water supply networks and chlorination systems over the past ten
years has impacted drinking water quality with 25% of samples in 2000 not meeting
bacteriological standards. As in Serbia, the range of unacceptable water varies significantly
regionally, with coastal cities generally faring the worst (Table A16).
Table A16: Montenegro - Percentage of samples not meeting bacteriological & chemical
standards, 1997 and 2000, in selected cities
CITIES
Ulcinj
Tivat
Andrijevica
Bar
Pluzine
Kotor
Mojkovac
Kolasin
Budva
Berane
Danilovgrad
Podgorica
Percentage of samples not meeting
bacteriological standards
1997
2000
25.0
47.6
5.9
31.8
25.0
22.9
11.7
21.2
25.0
20.4
32.7
16.7
14.3
16.6
7.3
15.6
1.2
9.5
12.6
2.6
8.3
2.5
11.2
2.8
Percentage of samples not meeting
chemical standards
1997
2000
6.0
28.6
23.6
54.9
25.0
50
7.7
3.6
14.9
20.4
19.2
16.7
60.7
32.6
16.7
29.6
0.0
1.9
13.7
3.6
13.6
6.6
33.0
3.7
Source: Statistical Yearbook 2000, On Population and Public Health in Montenegro
177. Larger cities, for example Podgorica and Danilovgrad, are more likely to be able to
afford disinfection of drinking water supplies, which is reflected in the higher water quality
figures, with greater than 97% of samples meeting bacteriological standards. While many
cities have seen improvements in their drinking water quality in terms of bacteriological
standards since 1997 (Podgorica, Kotor, Berane), others have seen a sharp decline in water
quality (Ulcinj, Tivat, Bar). Similarly with chemical standards, several municipalities stand
out as having experienced sharp declines in quality since 1997 (Ulcinj, Tivat, Andrijevica).
Podgorica has seen an overall improvement in drinking water quality in the past four years.
178. In Montenegro, all water sector infrastructure belongs to the Republic. The Republic
delegates its use and responsibility for service provision to the municipalities, each of which
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DRAFT
has its own water company. Water management problems are essentially the same as those
noted for Serbia. While privatization of the water sector is under consideration in Serbia,
Montenegro is piloting a new approach to utility management involving the private sector. A
public/private partnership for utility management called Monte-Aqua has been formed by
merging the assets of (i) Aquaregia Public Company, created by merging water companies of
Ulcinj, Bar, Budva, Tivat, Kotot, Herceg Novi, and Ceinje and the Montenegrin Seaboard
Regional Network Public Company; (ii) A german company Aquamundo, which sponsors the
project; (iii) DEG Investment Fund from Germany; and (iv) a private company, Mercur, from
Budva. Monte-aqua will rehabilitate, upgrade, extend and manage the water supply and
sanitation services of the area under its responsibility. Phase I of this program started on
January 16, 2001, with financing from KfW and GTZ (approximately US$7.25 million) for
technical assistance and urgent investments in rehabilitation and improved operation. Six of
the seven coastal municipalities have signed letters of intent to participate in the program
according to the concept of public/private ownership.
179. The investment for all town water supply networks and the Montenegrin Seaboard
Regional Water Network up until 2020, as well as investment into facilities and works of
priority importance for improvement of the current state of the sector and further development,
is approximately US$ 175 million. Of this, 52% will be used for ongoing construction of the
Montenegrin Seaboard Regional Water Network (app. US$ 89 million). Around 45% would
be allocated for all other town water networks, and 4% for rural water networks (app. US$ 6.6
million). Investment into priority facilities and works that are needed to improve current water
supply systems is approximately US$ 19 million.
FRY Wastewater
180. Most of the FRY population (99.6%) lives in a household with sanitation services of
some kind (Table A17). In 1991, 66% of the population lived in a dwelling with either a
sewage system ore septic tank. By 1996, the figure was 77% and in 2000, 88% (57% linked to
a sewage system, 31% to a septic tank) indicating improvements in sanitation coverage in the
past 10 years.
Table A17: Percent Coverage to Sanitation Options
Territory
Flush to
Flush to Improved Traditional No
Missing/ Total
sewage
septic
pit latrine pit latrine facilities DK
system
tank
FRY excl. Kosovo
57.2
31.1
0.7
10.5
0.1
0.3
100
Montenegro
60.6
28.2
0.6
8.4
0.7
1.5
100
Serbia excl. Kosovo
57.0
31.3
0.7
10.7
0.1
0.3
100
Central Serbia
61.7
25.6
0.8
11.6
0.1
0.2
100
Vojvodina
44.1
47.2
0.3
7.9
0.0
0.5
100
Belgrade
84.5
12.4
0.2
2.8
0.0
0.0
100
Urban
87.5
10.l
0.1
1.9
0.0
0.4
100
Rural
22.2
55.5
1.3
20.4
0.2
0.3
100
181. The rate of urban/rural sewage system coverage is 88 to 22%. Rural areas rely
primarily on septic tanks for sanitation. Many septic tanks have been found to be improperly
80
DRAFT
designed and situated. Interventions in the rural sanitation sector should focus on assessment
and improvements to septic systems, including both infrastructure upgrading and education.
Serbia Wastewater
182. Construction of municipal and industrial sewerage systems in Serbia during the past
decades has lagged behind that of water supply development. There are distinct regional
differences in sanitation coverage with 45% of Vojvodina connected to the public sewerage
network versus 67% for Central Serbia (including Belgrade).
183. Quantities of municipal and industrial wastewater discharges have changed
significantly in the past decade. Roughly 10% of total wastewater discharged in Serbia is from
households and this figure has remained steady throughout the 1990s. What has changed
dramatically is the total amount of wastewater from both households and industry. Both have
dropped by about 60% since the early 1990s. Meanwhile, wastewater treatment capacity has
remained roughly the same for both domestic and industrial wastewater treatment and the
treated amount remains similar in 2000 to that of 1990.
184. There are 37 central facilities for wastewater treatment in Serbia, of which 7 have
mechanical (primary) treatment, and 30 have secondary, or biological treatment. Some of
these facilities are over 30 years old (7) and others are not working at all (3). The
municipalities of Arandjelovac, Bor, Becej, Vlasotince, Velika Plana, Vrsac, Gornji Milanovia,
Dimitrovgrad, Aladovo, Kragujeva, Kikinda, Medvedja, Negotin, Paracin, Pozareva, Sombor,
Surdulica, Soko Banja and Ruan have treatment plants. The efficiency of the existing plants for
municipal and industrial wastewater treatment is low. It is estimated that only 13% of the
total number of treatment plants operate with satisfactory results. Belgrade has no
wastewater treatment plant. It discharges about 5 m3/sec into the Danube, which has a velocity
in the range of 3000 to 5000 m3/sec. Thus the wastewater is diluted relatively quickly.
Overall, about 12% of municipal wastewater is treated in the republic.
185. The result of inadequately treated wastewater discharges has been pollution of ambient
and drinking water supplies. The Republican Institutes of Hydrometeorology conduct routine
monitoring of surface inland water and groundwater quality. The Republic Institutes of Public
Health monitor drinking water supplies. The most comprehensive ambient water quality data
available is that for the Danube River Basin. There are about 160 gauging stations on rivers
within the Danube river basin where both flow and water quality are measured on a regular
basis. Water quality of the largest international rivers in the Danube watershed as well as
water quality of the largest part of FRY national rivers is far from being satisfactory. This is
particularly true for river stretches downstream of settlements as the result of untreated
municipal and industrial discharges. Since the mid-1990s, water quality in many of the rivers
has deteriorated from second class (suitable for bathing and drinking purpose only after
treatment) to third class quality (suitable for irrigation and industry only). At the same time,
drinking water quality has also deteriorated. The percentage of drinking water samples that do
not meet the required standards is at the level of 50% in Serbia and around 15-20% in most
Montenegrin cities. Unchecked industrial pollution, untreated wastewater discharges, and
transboundary inputs are amongst the causes of deteriorating quality. Surface water quality
monitoring has found bacteriological pollution in small rivers and channels where there is
municipal and industrial wastewater discharge. The most threatened waterways, where water
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DRAFT
quality is outside the bounds of the classification system are the Stari Begij, Lugmoir, Crnica,
Lukavic, Veliki Lug, Pristevka Rivers. In the large rivers (the Danube, Save, Tisa and
Moravo) increased bacteriological pollution is found downstream from the big cities (Novi
Sad, Belgrade) along the river, but due to the great velocity rate, the pollution is relatively
rapidly brought down within the allowed limits (State of the Environment 2001).
186. Non point source pollution contributes to more than 50% of total water pollution.
These sources deliver 70% of total nitrogen, 50% of total phosphorus, and 90% of fecal and
coliform bacteria. Proposed measures to mitigate non-point source pollution have focused on
storm water retention, treatment and separation from common sewer systems. Additional
measures, which could be taken to reduce non-point source pollution, include regulatory and
incentive-based reforms to popularize non-phosphate based detergents and nutrient reduction
programs for agricultural areas.
187. The investment costs for 2002-2007 for wastewater are estimated at approximately US$
470 million (Jaroslva Cerni Design Institute, 2002). The sector has prioritized investments
focusing on the sewer system and industrial pre-treatment plants (Table A18).
Table A18: Investment needs in Serbia for improved wastewater treatment (US$ mn)
Investment
Capital
required
Construction of sewer systems (common, sanitary & storm)
140
Construction of industrial pre-treatment plants
200
Fix existing plants
10
Construction of new wastewater treatment plants in first priority settlements
29
Construction of 10 new treatment plants for settlements whose discharge is
82
currently endangering water resources planned for water supply
Investments for protection of water supply reservoirs, the Morava and
9
Danube Basin
Preparation of new laws and regulations, and establishment of an emergency
2.5
clean-up team
TOTAL
472.5
188. In 2000, the MAFW financed construction of 33 wastewater related structures, 20
collector systems, 6 central wastewater treatment facilities, and 7 industrial pre-treatment
systems for a total cost of approximately US$ 2.5 million.52
Montenegro Wastewater
189. Wastewater management is also considered a key environmental priority in
Montenegro. Only 60% of residents are connected to a public sewerage system with large
regional differences. Sewerage systems have been established in the central parts of Podgorica
and many of the larger towns in Montenegro but are usually not extended to the town margins.
The Podgorica wastewater treatment plant was designed for 55,000 people and is now
servicing 150,000. This means a large percentage of the wastewater collected is discharged
untreated. Outside Podgorica about 55% of the population is connected to sewerage systems.
52
YUD 112,750,000, converted to US$ using average exchange rate for 2000, YUD 44.36 /US$.
82
DRAFT
In five municipalities the coverage is above 90% while in nine the figure is below 50%.
Kolasin, Tivat and Bijelo Polje have no systems at all. No urban community is fully covered
by a sewerage system. The systems are uniformly dilapidated and out of date. In smaller
towns and rural settlements, sewerage systems are non-existent. Around 28% of the population
uses septic tanks and absorbing wells (wells previously used for drinking water converted to
disposal sites) for wastewater disposal. Tanks, which collect wastewater and sludge from
septic tanks, dump their contents into rivers or onto the ground.
190. An annual volume of at least 18 million m3 of municipal wastewater is discharged into
rivers and gorges often in the vicinity of urban areas, sometimes close to drinking water
sources. An unknown volume drains directly into the ground. Commercial enterprises use
water from the existing networks and discharge it polluted into the city sewerage system. No
information on industrial discharges was available. A comprehensive report on the 2000 water
quality monitoring program and its results can be found in the project files (MEPP 2001).
191. The Government has been making efforts to deal with wastewater problems. A number
of projects, for which the Montenegrin Government provided funds, were developed through
the Public Works Agency of the Republic of Montenegro, such as: the Tor – Tratište sewage
system, the Zelenika – Kamenari sewage collector line, the Kolašin primary collector, the
Žabljak primary collector and the Rožaje primary collector. For future investment needs, the
sewerage system of each town was assessed with recommendations made for improvement or
construction (Montengro 2002). Some municipalities (Herceg Novi, Tivat, Kotor, Bar, Budva,
Ulcinj, Podgorica, Cetinje, Niksis, Bijelo Polje, Berance, Andrijevic and Rozaje) have
developed sewage system rehabilitation, reconstruction, expansion and construction programs.
The funds required to implement these programs are estimated at 103 million DM.
Institutions, Legal Basis and Financial Situation
192. The Serbian Law on Waters covers protection of waters, utilization and management of
waters, goods of general interest, conditions and methods for performing water-related
activities, organization and financing of such activities, and supervision and monitoring for
enforcement. The enforcement of the Law refers to surface and groundwater, including
drinking water, thermal and mineral waters, border and trans-boundary water flows, and interRepublic water bodies within the boundaries of the Republic of Serbia.
193. Surface and groundwater monitoring are covered under the Law on Waters,
Regulations on Hazardous Substances in Waters, the Official Bulletin of SRS (No. 31/82),
Regulations on Methods and Sampling for the Assessment of Wastewater Quality, and the
Official Bulletin of SRS (No. 47/83) governing surface and groundwater quality monitoring.
Water quality monitoring is conducted by Serbia’s Hydrometeorological Institute, which is
responsible for measuring and recording quantities of wastewater discharged, and submitting
the data to the relevant public agency. Monitoring also includes tracking the performance of
wastewater treatment facilities.
194. The drinking water quality standards used are based on WHO drinking water quality
guidelines and the EU directives for drinking water; whichever is more stringent, per standard.
Drinking water quality monitoring control is the responsibility of the Institute of Public Health,
and is based on several regulations.
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DRAFT
195. Wastewater is regulated by the following two documents: (i) Regulations on Hazardous
Substances in Waters, (Official Register of the Republic of Serbia, No. 31/82); and (ii)
Regulations on Methods and Minimal Number of Wastewater Quality Assessments (Official
Register of the Republic of Serbia, No. 47/83, Correction 13/84).
196. The tariff system in FRY is based on the cost-plus scheme with cross subsidies for the
population coming from industries. This scheme keeps profit to a minimum for utilities. The
economic crisis resulted in substantial reduction in industrial water consumption. The 20/80
revenue ratio (population vs. industry) in 1990 turned into 50/50 in the mid-1990s and fell even
further below this level later on. In addition, population poverty and industrial decline reduced
collection rates below 50% despite existing low tariffs. Economic decline made crosssubsidies impossible. Currently, the revenues of water utilities do not cover operational costs.
Infrastructure is slowly deteriorating from age and lack of maintenance, resulting in
increasingly lower quality water and wastewater services. Even though the tariffs were raised
in October 2000, they still remain below production costs. In addition electricity costs are only
25 percent of the economic costs and are expected to rise soon. This will make it even more
difficult for the water utilities to cover their operation and maintenance costs. In sum,
municipal water and sanitation services are in deep financial and technical trouble, preventing
utilities from initiating the rehabilitation of works that are urgently needed to diminish the
possibility of a collapse of water supply, wastewater, and solid waste services.
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DRAFT
Box A9. IFI and donor activities in FRY’s water sector
•
EBRD and Serbia concluded negotiations in November 2001 for 240 million Euros in
loans for infrastructure repairs and to support domestic export programs. Financial support will go
to Belgrade, Novi Sad and Nis to upgrade water supply systems. In January 2002, EBRD
announced a 6 million Euro loan to Nis to develop the city’s sewage system over the 2002to 2004
period.
•
USAID is financing a $200 million, five year, community development project in Serbia,
which includes financing of small town and rural area water supply and sanitation services.
•
The German government is financing to rehabilitate the Belgrade and Nis wastewater
supply systems (5.1 million Euros) and to revitalize water supply, municipal heating and
wastewater systems, and develop small and medium enterprises in other cities (37.3 million Euros).
In 2000-2001, Germany invested 65 million Euros to develop the economic, social and
management sectors of water supply, wastewater and district heating systems.
•
The French government provided approximately US$ 250,000 in grants in 2001 for the
construction of drinking water treatment plants and the local water supply grid in the village of
Ivanovo. In 2002, an approximately US$ 165,000 grant will finance small, rural water supply
systems in Ruma, Vrnjakc, Banja, and Lipovica.
The International Committee of the Red Cross, Oxfam, and Medecins San Frontieres have
completed about 60 small water supply and sanitation projects since 2000. UNICEF and WHO
have provided local water supplies and support for water quality monitoring, respectively. WHO
has assisted public health institutes in monitoring and investigating water-related diseases and
water borne disease outbreaks. Oxfam has worked with vulnerable groups including rural people
in the most remote locations where people rely on contaminated wells for drinking water supplies.
Oxfam completed about 40 individual projects to improve water supply systems, including the
installation of pumps and pipelines, rehabilitation of 150 wells, and provision of chlorine. Water
supply systems to schools and kindergartens were also repaired.
197. In the past two years, IFIs and donors have initiated projects in the water supply and
wastewater sector, in large and medium-sized cities and rural areas (Box A9).
198. The FRY has a long history of experience with World Bank operations in the water
sector. Before 1992, the Bank had several water projects in Serbia/Montenegro, the most
notable of which was the Yugoslavia - Morava Region Development Project: Water Supply,
Sewerage and Water Resource (1976). The Montenegro Water/Coastal Management Project
was also under preparation in the early 1990s, but was halted due to the barring of FRY from
Bank operations in 1993. In 2001 the Bank approved the “Coastal Emergency Municipal
Environmental Infrastructure Project (P074618), a $2 million grant for improvements in water
supply, wastewater and solid waste management in Montenegro’s coastal region and the Zeta
valley. The Project will also provide a small amount of financing for technical assistance for
the assessment of medium size water utilities and water rural systems in FRY.
85
DRAFT
ANNEX 7. WASTE MANAGEMENT
Serbia
199. Table A19 provides an overview of solid waste management practices in FRY. In the
past year significant sector work has been done in Serbia on solid waste management. Most
notably, a comprehensive report on the sector, financed by the Japan Special Fund, has just
been completed (April 2002). The “Waste Management Strategic Policy Framework”, which
can be found at www.recyu.org/eng/projects/Aamaspo, is the source of the following
information and provides detailed information on the sector. In addition the Ministry of
Environmental Protection (MEP) commissioned studies on medical waste in Belgrade (Ilic,
2001), an inventory and assessment of landfills in Serbia (Ilic, 2000), and a register of
hazardous materials (MEP 2002). These studies are the basis for the following information and
should be referred to for details on the sector, including legal, institutional, and policy issues,
economic instruments, and recommendations for future action.
Table A19: Serbia: Percentage of households using different solid waste disposal methods
Territory
FRY excl. Kosovo
Montenegro
Serbia excl.
Kosovo
Central Serbia
Vojvodina
Urban
Rural
Taken
away by
public
utility
Disposed
of at a
public
dump
Left at an
illegal
dump
Burned
Buried
Dumped
near the
house
Thrown
at the
river
Other
54.7
41.7
55.6
25.3
38.1
24.4
6.4
6.2
6.4
6.3
4.9
6.4
0.3
0.1
0.3
5.4
0.9
5.7
1.1
5.9
0.8
0.5
2.2
0.4
49.7
70.4
79.6
21.9
25.4
22.1
18.3
34.4
8.2
1.9
0.5
14.2
8.2
1.9
0.3
14.3
0.3
0.2
0.0
0.6
6.8
3.0
0.9
11.3
1.1
0.1
0.1
0.7
0.3
0.4
0.3
0.7
200. It is estimated that about 50% of solid waste is collected in Serbia. Of the waste
collected, about 63% is from households and 20% from industry. Of industrial waste, most is
from the processing industries, primarily the food (33%) and chemical (20%) industries.
Waste is not collected in rural regions. Rural communities either burn their waste or dispose of
it in official or unofficial landfills themselves. About 3.5 million m3 of municipal waste is
collected annually in Serbia. The amount of generated waste per person per day is about 0.650.85 kg, which is slightly less than other Central and Eastern Europe countries (1
kg/person/day). In Serbia’s 168 municipalities, there are 170 official landfills. There are
hundreds of illegal landfills of varying sizes. The city of Belgrade includes 16 municipalities
and 6 disposal sites. Eleven municipalities dispose of waste at the biggest landfill in Serbia,
Vinca (1000 – 1200 tons/day), while 5 others have their own sites. Except for Belgrade, it is
rare that two municipalities share the same landfill.
201. Solid waste collection and disposal is the responsibility of local public utility
companies which face many problems, the main ones being: collection problems; excessive
number of landfills; inadequate vehicle supply; unresolved issues connected with hazardous
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waste; lack of appropriate equipment at landfills; improper disposal of materials, (medical and
slaughterhouse waste); and lack of recycling programs.
202. Hazardous waste management is a significant problem in Serbia. About 260,000 tons
of hazardous waste is generated per year. Of the hazardous waste produced, 9,600 tons of biohazardous waste are produced annually with about 50% coming from hospitals. Heath care
facilities typically do not segregate these types of wastes streams although there are exceptions
where hospitals on their own initiative have developed low cost, appropriate waste
management systems for themselves. Used needles, syringes, dressing, etc. are mixed with
originally communal waste. These materials are placed in plastic bags and disposed of as
regular waste.
203. There is no permanent storage facility for hazardous wastes and no hazardous
waste landfill so enterprises resort to either storing the material on site, or illegally
dumping it in municipal landfills. Lack of proper regulation for hazardous waste
transportation frequently leads to accidents threatening public health. Recently (2002),
Serbia and UNEP agreed on exporting hazardous waste from the Prva Iskra-Namenska factory
in Barac to a country with technology for hazardous waste disposal. Negotiations on a country
targeted for waste export are still under way. This is a part of the UNEP program for cleaning
up “hotspots” of Kragujeva, Pancevo, Novi Sad and Bor. Currently, he Serbian Ministry of
Natural Resources and Environmental Protection considers as high priority establishing a
properly managed central landfill for hazardous waste site and putting in place modern
regulations concerning hazardous waste transportation.
Montenegro
204. In Montenegro, 42% of solid waste is collected. There are about 20 registered landfills
for municipal solid waste but none are properly constructed or operated. The amount of waste
disposed of at the registered dumps is approximately 35,000 m3/month. The largest landfills
are those in Podgorica and Niksic. The Podgorica landfill receives 8-9,000 m3/month of waste
from Podgorica and Danilovgrad, and the Niksic landfill about 7,000 m3/month. Other large
landfills are those serving Herceg Novi, Tivat and Budva. None of the landfills meet sanitary
standards: most do not have tarmac access roads; there is no running water; no electricity; no
fences; and no guard service. Waste is mainly treated by burning and covering with a layer of
soil. None of the landfills are designed with controls for gas emission or leachate collection.
The per capita waste generation rate in Montenegro is estimated at 1kg/person/day.
205. Solid waste management has not been analyzed in Montenegro so there is limited
information about the sector, particularly in comparison with Serbia. Montenegro is also
lacking a national solid waste management strategy. It is known that there are a number of
industries which use or produce hazardous substances and which have inadequate
treatment/disposal practices. These include: the Aluminum Kombinat (red silt, cathode carbon
waste, mineral oils, polychlorinated biphenyls, dissolvers); the Niksic Ironworks (dross,
mineral oils, fats); a detergent factory, Rivijera, in Kotor (fats and fatty acids), the Pljevlja
thermal power station (ash dump, the Potrlica coal mine); the Kristal factory in Rozaje (glass
processing waste); the Polimak tannery in Berane (cyanides, chromium, cadmium, arsenic);
and the Obod factory in Cetinje (heavy metals, polychlorinated biphenyl, polymeric
substances, oil and grease).
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206. Organizationally, each municipality, through its public cleansing enterprise, is
responsible for the collection and disposal of its solid waste. Each of these enterprises is
organized to provide collection and disposal services according to guidelines set by the
republic government. Beyond this, there is no regulation on solid waste management,
including waste disposal, from the federal or republican levels of government
207. Montenegro is taking steps to address solid waste management issues. In December
2001, the Public Utility Company in Podgorica proposed an average 53% increase in the tariff
for garbage collection for ten types of users, which will serve to ensure that the sector is
financially self-sustaining. This signals a real interest in improving sector performance.
Podgorica is further supporting innovative ideas in solid waste management while endeavoring
to improve the livelihoods of the local Roma population. Podgorica is working with local
NGOs to employ Romas, already informally scavenging at the Podgorica landfill, for recycling
activities. The city pays salaries and the NGOs provide equipment and a facility. Despite
these encouraging signals, development of the solid waste sector in Montenegro will continue
to be fragmented as long as there is no strategic solid waste management plan.
Institutional and Regulatory Framework
208. Generally, the institutional system in the solid waste sector is characterized by an
unclear division of responsibilities between the federal, republics and local levels of
government, and low enforcement of national and international agreements in that area. The
services in the sector suffer from similar problems as those of the water companies. Each
municipality is allowed to size and operate its disposal systems as it wishes. There is no
organizational emphasis on long range planning or rationalization of operations. Revenues
available for each public waste management enterprise are obtained from three sources: (i)
municipal waste management service fees; (ii) general revenues in communal funds; and (iii)
direct user charges based on household surface area.
209. In Serbia there are numerous laws and regulations regarding solid waste management.
The starting point is the Law on Environmental Protection (“Official Register of the Republic
of Serbia” no. 66/91, 83/92, 53/93, 67/93, 48/94, 53/95), which establishes the framework for
solid and hazardous waste management. The new Law on Environmental Protection is under
preparation. A special Law on Waste Handling (“Official Register of the Republic of Serbia”
no. 25/96) discusses wastes that can be used as secondary raw materials. An institutional
framework has also been established by setting up the Recycling Agency, but most of the bylaws (see Annex x) for enforcing the law have not been enacted.
210. Economic instruments for waste management are lacking in FRY. There is no special
tax on land used for waste disposal. Collection and disposal of communal waste is paid for by
user fees. New fees were established in February 2002, with household fees varying from
0.0067 EUR/m2 to 0.020 EUR/m2 (less that 1% of household expenditures per month). Fees
are collected once, monthly. Collection rates vary from one municipality to another, ranging
from 15-70%. The collection rate for businesses is similar. Fines for violating waste laws
exist but are not high enough to ensure compliance with the law. The fines do not even cover
the cost of enforcement. Packaging deposit refunds for glass containers exist. Serbia’s new
solid waste strategy proposes several new economic instruments. Priority actions include:
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increasing fines; improving the system of fines; further developing the packaging refund
system; establishing a system of extended manufacturer liability; and restructuring public
utility companies. In the longer term (2007-2015), the strategy proposes the introduction of a
transferable license system for hazardous waste management and the privatization of solid
waste management systems. An important component of any strategy would exploit
economies of scale and this is best done taking a regional approach, which promotes fewer
landfills, that serve a wider region and that can be better monitored and controlled. (See Box
A10).
Box A10: A regional approach to solid waste management in Bosnia and Herzegovina
The World Bank has recently approved a credit in the amount of $14.3 million for improving solid waste
management for several localities (Tuzla, Banja Luka and Mostar) in Bosnia and Herzegovina (BiH).
The main idea of the project is to consolidate waste disposal on a few regional landfills instead of a large
number of smaller-scale waste disposal sites.
Past practice of waste management in the country was to create a waste landfill for each locality.
However, municipalities with limited financial capacities were not in a position to build and maintain
waste disposal sites at levels dictated by technical, environmental and sanitary requirements. As an
alternative, the project will create regional landfills that can serve several municipalities. It was clear
that formation of such landfills through cooperation between different numerous municipalities for BiH
is necessary in order to afford improved sanitary landfill standards. The approach takes advantage of
economies of scale: The cost of maintaining a regional landfill is lower than the sum of the costs of
maintaining individual smaller landfills at the same standards. It was estimated that landfills are
affordable and allow cost-recovery only when daily waste input rate is in excess of 200-300 tons per
day. Lower costs are likely to induce more budget-constrained municipalities to invest in upgrading
solid waste management which is a acute problem in BiH and in the Balkans, in general.
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4.
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6.
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Bunjevacki, G. Cvorkov Drazic, M., Pajkovic, M. Insitut za zastitu majke I deteta,
“Acquired Methemoglobinemis as a possible consequence of the presence of nitrate and
nitrites in the human Body” in Voa za zdravlje, UNICEF conference 21 March 2002
Belgrade
City Institute for Public Health “initial basis for carrying out a study about managing
medical waste in the Belgrade area”, August 1995
Ilic, M. et al.: "Designing Waste Management Strategic Policy Framework", Japan
Special Fund Project, Regional Environmental Center, 2002,Belgrade
Ilic, M.: "Medical Waste Management in Belgrade", Ministry of Health and
Environmental Protection of Serbia, Directorate of Environmental Protection, 2001,
Belgrade
Ilic, M.: "Assessment and categorization of dump sites in Serbia according to EU
standards", Ministry of Environmental Protection of Serbia, 2000, Belgrade
Institute of Public Health, Republic of Montenegro, Statistical yearbook 2000 on
Population and Public Health in Montenegro Podgorica, 2001
Marjanovic, N “Oxfam GB Activities Related to Water Supply Problems in Serbia”
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D. “Water Supply and Drinking Water Quality in the Republic of Serbia with Emphasis
on School and Preschool Institutions,” Proceedings of the Vod za zdravlje Belgrade
2001
Ministry of Environmental Protection and Area Planning, Republic of Montenegro,
“2002 Program of Environmental Monitoring in Montenegro”, Podgorica, 2002
Ministry of Environmental Protection and Area Planning, Republic of Montenegro,
“Information on the State of the Environmental in the Republic of Montenegro in the
year 2000”, Podgorica, April 2001
Ministry of Spatial Development Republic of Montenegro, “Information on the sate and
possibility of investment into rehabilitation and construction of sewage systems in the
Republic”, Podgorica, 2000
Public Water Management Company “Srbijavode “Water Supply in the Republic of
Serbia – Elements of the Development Program 2001-2005 Belgrade, 2002
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of Serbia” – Elements of the Development Program 2001-2005. Belgrade, 2002
Republic of Montenegro Ministry of Environment – Environmental Project, Podgorica 2000
UNEP “Clean-up of Environmental Hotspots Progress Report” January 2002
UNICEF. “Economic Sanctions, Health, and Welfare in the FRY” 1990-2000, Belgrade 2001
UNICEF. “Multiple Indicator Cluster Survey II: FRY”, 2000
WHO Regional office for Europe Area Office for Emergency and Humanitarian
Assistance, “FRY Health Institutions Profile”, Belgrade, March 2001
WHO, “Health Action in the Federal Republic of Yugoslavia – Newsletter on
Emergency Preparedness and Response”, Nov-Dec 2001, Belgrade pg. 6-8.
WHO, “The Health & Nutrition of the Refugee Population in FRY”, November 1998
WHO. “Health status, health needs and utilization of Health services in 2000 – Report
on the analysis for adult population in Serbia: Differences between domicile
population, refugees, and IDBs”, Belgrade, 2001
?? National Report on Follow-up to the World Summit for Children: The FRY.
February 2001
Zeljko Pantelic,Z. Mihajlov,A. eds Dangerous Substances in the Republic of Serbia –
Initial Register for the Year 2000 Editors. February 2002, Directorate for
Environmental Protection
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ANNEX 8. COASTAL ZONE MANAGEMENT IN MONTENEGRO
211. Montenegro is blessed with one of the most scenic coastlines in the world and certainly
in the Mediterranean – with rugged mountains plunging down to a transparent sea, adorned
with occasional medieval towns and sandy beaches. The spectacular, almost enclosed Kotor
Bay epitomizes these features. Due to the relative isolation of the Montenegrin coast and strict
land use planning during the socialist period, its environmental values are still largely intact,
though increasingly threatened by market pressures for illegal construction and further tourism
development and suffering from already overburdened municipal services, like water supply,
wastewater and solid waste collection and disposal.
212. Though it has not yet formally articulated a Coastal Zone Management (CZM) policy,
Montenegro is heading in this direction through its policies on environment, land use planning
and tourism. Though many definitions of CZM are possible, this report will use the following:
Coastal Zone Management is a set of policies, procedures and institutional structures which
facilitates the sustainable economic development of the coastal zone, while at the same time
preserving essential environmental values. For this purpose, the coastal zone may be defined
as that area which depends for its economic well being on coastal resources, such as beach
tourism and ports. For Montenegro, it is typically a strip 20 to 50 km wide.
213. Montenegro is heir to the Yugoslav tradition of a strong emphasis on physical planning
to guide the spatial aspects of development in all sectors. The existing Physical Plan for
Montenegro (PPM) dates from the socialist period and is now considerably outdated. Work
has started on a new PPM, which will stress the importance of agriculture and tourism. When
drafted, it will be subject to public comment and final approval by Parliament. There will be a
hierarchy of plans beneath the PPM: regional plans (for example, for the coastal zone, for
national parks, and for other areas of public interest); obstina plans; and town plans (zoning
maps). The planners recognize that enforcing adherence to a PPM is complicated in a
democratic, market-oriented society, and even more so during the period of transition.
“Planning” has developed a bad name. Business interests want to make investment location
decisions based on access to raw materials and markets, rather than the areas reserved for them
in the PPM. The tourism industry would like to build facilities in the most scenic and pristine
areas of the coast. Even public sector project planners are more likely to disregard physical
planning decisions of the previous regime.
214. Finally, citizens with resources now feel free to build where they want, especially along
the coast. Although no accurate figures are available, estimates are that 30,000 housing units
(the number of buildings would be less) have been built illegally in the coastal zone over the
last 10 years. Not known is the proportion of these houses built in areas with the appropriate
zoning but without payment of the necessary fees and taxes, and the number improperly sited
and which may be causing harm to the environment53. Addressing this problem will require
first a reliable census of such structures.
53
A prime example is the development of part of a highly scenic island opposite Budva.
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215. Apart from the port of Bar and its associated infrastructure, tourism is the dominant
industry in the coastal zone and its importance is likely to grow steadily in the future.
Although some traditional agriculture and grazing persists, the steep, rocky, semi-arid slopes
offer little comparative advantage and it may be expected that such farming will continue to
decline into insignificance with the growth of market forces. The tourism industry receives
strong government support, through the Ministry of Tourism, which undertakes considerable
planning, both physical and economic. The goal for 2020 is 22 million visitor-nights, or four
times the current level. However, only 20% of visitors are foreign (mostly from other Eastern
European countries) and only 20% of beds are in hotels – a legacy both of the previous
political and present economic difficulties in the region and the former Yugoslav strategy of
targeting low-income tourists. This will gradually change, as fully built areas such as Kotor
Bay are re-developed for high income tourism and new resorts are built in the south, such as
the proposed 35,000 bed development at Velika Ulcinj. The Ministry of Tourism gives
considerable stress to environmental protection and appears ready to balance commercial gain
with the need to preserve the very scenic coastal environment.
216. Policies, Strategies and Plans. Montenegro has an enviable heritage of such planning
documents, and updates are underway in the environmental, physical planning, and tourism
areas. It will be important that these plans are consistent and mutually reinforcing and that the
government has the tools to ensure that developers follow them. To achieve this, preparation
of a Coastal Zone Management Policy, to integrate these sectoral plans, is needed.
Coordinated planning for infrastructure (roads, airports and so on) and municipal services
(including creative thinking on how to pay for such services) will also be needed to realize the
desired pattern of development.
217. Institutional Coordination. Improved sharing of information and coordination of
actions is needed, both horizontally (between national Ministries and agencies) and vertically
(between the national, obstina and town levels). This can be achieved by reviewing and
revising procedures for planning and permitting of development, to allow wider consultation,
and expanding the role of public participation in decision-making. Training of staff in all
concerned agencies will be another basic step. The potential for Coastal Zone Management
Committees at the national and obstina levels could be explored, as well as the appointment of
CZM Focal Points in each local government body. The role of the existing Coastal Zone
Management Agency (a public enterprise under the Ministry of Marine Affairs) could be
expanded beyond its present functions, which relate mainly to leasing of beach space, to
become the main body responsible for concrete actions under a broader CZM program, taking
advantage of its skilled staff and knowledge base. Specific institutional arrangements for
counteracting illegal construction may be called for, as well as legal instruments.
218. Public Awareness. As in other areas of environmental protection, sustained action to
establish a CZM system will not happen unless it is demanded by a concerned and well
informed public. Thus, urgent attention should be given to a publicity program to inform the
public about the state of the coastal environment, threats facing it, and the steps needed to
ensure environmentally sustainable development of the coastal zone. In addition to programs
targeted towards the general public, through the mass media, special programs for legislators
and for schools may be needed.
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ANNEX 9. FORESTRY
Forest Resources
219. Forest ecosystems cover about 2.86 million hectares (Table A20). The forest cover of
Montenegro with 39% is considerably higher than in Serbia, where only 27 % of the land is
covered with forests. The per capita area under forests in FRY is 0.31 ha. In Montenegro
(0.93 ha) it is nearly four times greater than in Serbia (0.25 ha).
Table A20: Forest cover in Serbia & Montenegro
Montenegro
Serbia
Central
Vojvodina
Kosovo
TOTAL
Total
(000 ha)
(1000 ha)
1,381
8,836
5,597
2,151
1,089
10,217
543
2,313
1,781
103
429
2,856
Forests area
(%)
per inhabitant
(ha)
23.5
0.93
76.5
0.25
58.9
0.31
3.4
0.05
14.2
0.27
100.0
0.31
Forest density
(%)
39.3
26.2
31.8
4.8
39.4
28.0
Source: Yugoslav survey, No. 3, 2000. Spatial Plan, Montenegro 1996.
220. Of all forest types the broadleaved types are dominant with about 87 %, while the share
of the predominantly coniferous types is 7%. These latter forests are mainly concentrated in
the Mediterranean region. The remaining 6 % are mixed forest types. In the Serbian forests,
beech is most common species (37% of forest area), followed by oak (35%), other deciduous
species (20%) and coniferous ones (8%, among which the pines prevails). In Montenegro, the
share of coniferous species in the total forest area is 25% (spruce is most comment) and that of
deciduous species, 75% (beech 32%, oak 15% and others 28%). In the forests of Serbia, beech
is best represented (37% of forest area), followed by oak (35%), other deciduous species (20%)
and coniferous ones (8%, among which the pines prevails).
221. The standing volume is about 307 million m3 (Serbia about 235 million m3;
Montenegro about 72 million. m3). The average standing volume is 107.4 m3 / ha (Serbia
101.6 m3 /ha; Montenegro 132 m3 /ha). The average annual increment is 2.70 m3 /ha (Serbia
2.70 m3 /ha; Montenegro 2.60 m3 /ha) and total annual increment 7.62 million m3 (Serbia 6.18
million m3; Montenegro 1.44 million m3).
222. The quality and extension of forests has declined widely during the past decade due to a
combination of different factors. Especially during the UN sanctions (1992-2000) intensified
timber cutting for domestic consumption (heating, construction etc.) led to poor stand
conditions in accessible areas. Although statistics suggest that the estimated annual increment
of the growing stock (2.7m3/ha) exceeds the annual cut (1.2m3/ha) by more than 100%, this
does not necessarily imply a sustainable management on all forest sites. The fact is that due to
a relatively low forest road density (about 5 meters/ha) over-harvesting took place in accessible
areas takes, while in other areas harvesting is being done with very low intensity. These
inaccessible areas have been more prone to forest fires and insect infestations as a result of
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relatively frequent draught occurrance during the past decade. In addition the reduced funding
for the “public” functions of forests due to growing economic difficulties during the 1990s has
led to deficiencies in the forest monitoring and control. The latter is also one of the reasons for
the increase of illegal logging activities over the last years. Furthermore air pollution –
although declining – is still a cause of deterioration of forests. Finally, despite the absence of
hard statistical data, illegal wood cutting is regarded as a significant problem, especially in
protected areas.
223. A similar situation exists for Montenegro. Sustainable management on these small and
highly fragmented forests is even more obstinate, as the forest owners are rarely organized. It
is very difficult to provide effective extension services and training for the owners to enable
them to manage their forests in a way that is sustainable and helps improve their livelihoods
and economic base, while also protecting the environment.
Forest Management
224. More than half of the forests (58.5%) in FRY are owned publicly. Public ownership
accounts for 56% in Serbia, while in Montenegro this figure exceeds 75%. there are about
500,000 private forest owners in Serbia holding some 5 million parcels in 7,500 registered
municipalities. The average size of a private forest is about 0.5 ha and can often be as small as
0.2-0.3 ha. Due to their small size and low productivity, owners cannot afford to pay for
professional management of their forests. The timber produced is used mainly for fuel-wood.
225. There is no forest policy approved at the Federal or the republic level. One group of
national forestry experts recommend the following items to be included in a National Forest
Policy:54
•
•
•
•
•
•
•
•
54
Precise definition and structuring of the objectives of forest policy at the federal level
(Federal Forest Law), in keeping with the principles of viable development, ecological and
economic needs and bio-technical and economic peculiarities of the forest sector;
Financial support to the development of the forest sector (mainly from sources outside the
sector);
Increase of the forest road network density;
Creation of conditions for dealing with the issue of forest ownership;
Creation of conditions for starting up a selective process of privatization in the forest
production segment;
Settlement of the issue of control over and management of the private sector forests
(establishment of a network of test estates and monitoring of their performance,
establishment of the associations of owners of private forests, etc.);
Insistence on the development of the concept of viable eco-agri-forestry; and
Strengthening of the material basis for science research in the forest sector, including the
acquisition of equipment necessary for monitoring changes in the forest ecosystems, and
the development of information system.
Yugoslav Survey – A Record of Facts and Information, Vol. XLI No. 3, 2000
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226. The management of the state owned forests outside protected areas in FRY is
responsibility of the Republics of Serbia and Montenegro within their respective territories.
Until recently the management structure was similar in both republics. In order to separate
administrative and control from economic functions, public enterprises for forest management
were established (Srbija Šume and Crna Gora Šume) in 1991. Tasks of the Šumes include
commercial, protection and recreational services, these include forest management (preparation
of management plans, harvesting, regeneration, etc.), marketing of forest products,
maintenance of infrastructure for commercial and recreational use as well as game
management. Public enterprises are also entrusted under the forest law with the performance
of professional and technical operations and advisory services in private forests.
227. The organization is set up at three levels – head office, forest districts and forest
management units. The Ministry for Agriculture, Forestry and Water Resources with its
Department for Forestry and Hunting is responsible for Monitoring and Supervision and
therefore for the Forest Inspection Service. As is common in most states of ex-Yugoslavia,
forest operations were initially mainly managed under the responsibility of the public forest
enterprises. However, outsourcing/privatization of these activities (harvesting, wood transport
etc.) has been taking place over the last few years. In Serbia 20 % of the logging is carried out
by Srbija Sume, 60 % is contracted out for delivery at the road side and 20% of harvesting
operations are sold through open auctions of standing timber. In Montenegro the privatization
is at a even more advanced stage with the implementation of a new Forest Law (see below).
228. The above-described organization – still valid for Serbia - was changed in Montenegro
with the adoption of a new forest law passed 2000. As of January 1, 2002, Crna Gora Šume
was divided into a Directorate as state institution responsible for planning, protection,
silviculture and inspection, and 14 private (shareholder) companies for forest exploitation.
Also starting in 2002, forest harvesting is done on a concession-based contract for the period of
one year. Basis for the concessions are annual operational plans derived from 10-year
management plans. The first concessions were awarded at the end of February 2002.
Although the system seems to be very progressive in terms of privatizing the economic
functions, it has to prove whether it can ensure sustainable forest management in the long run.
The concessionaire will not have an incentive to invest in the forest (e.g. infrastructure) or care
for the remaining stand, since his interest in the forest is only limited for one year. The success
of such a system will depend mainly on the strengthening of the forest inspection service. The
service needs to have a clear mandate to supervise and control the compliance with the law and
to impose performance bonds and sanctions in case a concessionaire fails the obligations
defined in the contract.
229. The current Serbian forest law has no provisions on how the state should be
recompensated by Srbija Sume for the use of the Serbian state owned forests. The only
obligation Srbija Sume has is a flat 3% tax on its sales to the Ministry of Finance. This
requirement applies to all forest users. Three percent of the total collected from all public funds
(water, forests, roads, raw minerals, agricultural lands, and other natural resources) is then
earmarked for forest operations (afforestation, silviculture, etc). In 2001 revenues from timber
sales totaled US$1.01 million while the amount earmarked for forest related operations from
the consolidated revenues of public funds was US$1.28. The current across-the-board practice
means that much of the forest exploitation related rent is not captured by the government. In
addition to the 3% there should be a differentiated tax schedule introduced to eliminate these
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distortions. Those changes are necessary in order to assist the government to capture the real
rents from forest exploitation and eliminate the de facto subsidy that is encouraging inefficient
management of state forests.
230. While forest and land restitution is not identified as an urgent issue officially, as in
other parts of Eastern Europe55 ideas to “de-nationalize” forests are being discussed in Serbia
and Montenegro. Taking into account that the restitution process usually leads a significantly
reduced average size of forest compartments (management units) as the most immediate
consequence of the restitution process and subsequently to an increase in the economic and
ecological risks. This effect is felt even more strongly, as forest management units over the
past 50 years reflected both in size and shape the requirements of large-scale forest
management, carried out by state agencies. Fifty years – roughly half an average rotation
cycle, depending on the tree species – have in most cases been enough to determine lastingly
the spatial distribution of stand types, age-classes, and similar silvicultural parameters.
Breaking this structure up into very small, individually managed allotments, might very well
increase economic risks like windfall, wildfires, and the like. However, the intensity of
fragmentation in Eastern and South-Eastern European Countries – probably the most familiar,
and visible structural disadvantage of private forest ownership – varies greatly.56.
Forest Utilization, Wood Processing Industry, Marketing, Taxes and Pricing
Timber harvesting
231. The annual volume of timber felled for commercial purposes is 4 million cubic meters,
of which 2.5 million m3 is extracted from the State forests and the remainder from private
forests. There are no accurate records of timber coming out of private forests. Of the annual
harvested timber, about 13% of volume is coniferous (spruce (6%), pines (4%) and fir (2.5%)),
and 87% broadleaf timber, of which beech (44%) has highest share, followed by oak with 21%.
Of the annual timber harvest 39% of the volume is industrial and technical roundwood (saw
logs, veneer logs, pulpwood), fuelwood account for 49% of the total annual timber harvest.
The remaining volume is identified as waste.
232. Tractors and skidders carry out extraction to roadside of industrial timber, and draught
animals (horses and oxen). The use of the cable system that reduces the impact of logging in
mountainous areas is not very common.
233. In general, productivity of harvesting operations is low: average extraction and terrain
transport distances are long as a result of an inadequate road network (road density averages
about 5 meters/ha). Many areas with inadequate access have been severely affected by drought
and in many cases are dying out (this is especially the case for young plantations). Machinery
used and working practices are inefficient in many cases. Due to the lack of investments in the
55
See “Restitution and Certification in ECA - Implications for land restitution for achieving World Bank/WWF
Alliance targets in the ECA Region”, INDUFOR/ECO-Consult, 2001
56
In this context an interesting proposal is being discussed in Montenegro. Aware of the possible risks it is
proposed to only restitute the revenues of the forest through a joint stock company in which the forest owner and
the state are shareholders. The state remains in charge of the management, while the forest owner has a right to
receive a dividend.
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DRAFT
sector , the existing equipment is old and worn out. Harvesting volumes per hectare are low.
The state intends to privatize in the long term.
Non-timber Forest Products and Hunting
234. Non-wood products of the forests are important both in terms of traditional cultural
values and as income sources. These products include snails, frogs, herbs and spices,
mushrooms, wild fruits, game meat, and Christmas trees planted in forest openings and
firebreaks. Harvesting for commercial use of these NTFPs is organized through a permit
system and monitored in Serbia by the independent Institute for the Protection of Nature, while
in Montenegro Institute for Nature Protection is the responsible entity.
235. In FRY, hunting is understood as the production, rearing, protection and rational use of
game. Game animals and birds make up the basis of the hunting industry, as a natural
resource. Europe. Hunting areas are divided in hunting districts. In Serbia, there are eight
hunting districts in Vojvodina, three in Central Serbia and three in Kosovo., and there are four
in Montenegro. These districts include 347 hunting grounds, of which 321 are in Serbia and 26
in Montenegro. In Serbia, 227 hunting grounds are managed by hunters’ societies totalling
about 7,909,000 ha in area and the remaining 94, totalling 925,000 ha in area, are managed by
public enterprises, stock companies, agribusinesses, the Yugoslav army,and the Faculty of
Forestry. In Serbia, there 18 fenced-in hunting grounds in which red deer, fallow deer, wild
boar and mouflon are reared. A project of introducing deer in the hilly and mountainous
hunting grounds of central and southern Serbia is under way.
236. The rearing and survival of game species is threathened by poaching, as a reaction to
which protective regulations have been instituted. Official statistics indicate that the most
valuable game species are being shot in highly decreasing numbers (red deer from 1 265
shootings in 1988 to 644 in 1997, roe deer from 9 253 to 3 667, wild boar from 4 109 to 2 642,
pheasant from approximately 325 000 to 125 000). This decrease results from poaching, which
in turn results from the socio-economic conditions and shortage of funds towards replenishing
the population of the reared game species. Under the game laws, all species of wild mammals
and birds are divided into three groups: those permanently protected (permanent prohibition of
hunting), those protected on the basis of closed season (hunting prohibited in certain periods)
and those enjoying no protection (game exempt from protection). Hunting tourists (foreign
and domestic) may shoot game by arrangement with enterprises or agencies duly authorised
and court-registered for the provision of tourist services and having contracts with the huntingground management. The shot game and parts thereof (trophy, meat) are payable for according
to the market price lists set by the hunting-ground management for each hunting season.
Wood Processing Industries and Marketing of Products
237. Compared with other sectors, the woodworking industry in FRY has a number of
comparative advantages, among which the one relating to raw material sources, on which its
output is based stands out.. However, the industry can be characterized as highly fractured.
There are 3,970 wood processors, 43 % of these companies are working in primary wood
processing (sawmills) mainly operating in Serbia (79 %), the rest are panel, veneer, particle
and cellulose mills (of which over 90% are located in Serbia).
238. Of the total number of wood industry enterprises, 95% are private, 4% are cooperatives or 3.2 % (122 in Serbia and 5 in Montenegro), the rest are in communal, state or
99
DRAFT
mixed ownership. 12,800 people (% of the entire workforce). The wood processing industry as
a whole employs currently about 37,100 people (4.9% of the entire industrial workforce).
Most of the private enterprises are in the category of small enterprises with less than 50
employees.
239. The industry is characterized by the production of large number of different products:
sawnwood , veneer , wood based boards, (plywood , particle board, fiber board) , parquet ,
furniture, carpentry and wooden houses. The production capacity of the sector is said to be 3 –
5 times the log production capacity of the State and private forests. Sawmills utilize about 2
million m3 of logs. Pulp mills are reported to be operating at 50 % capacity. Panel and pulp
mills utilize 1.5 million m3 of round wood annually. Private sawmills use circular saws.
240. The woodworking industry in Serbia & Montenegro is an export-oriented branch. In
2000, its exports totaled about US$102 million or 6.1% of the total national exports. About
US$60 million was accounted for by sawn timber and about US$42 million by finished
products57. Prices of exported roundwood achieved US$92/m3, while the price for a cubic
meter of sawn hardwood (Beech & Oak) reached prices between US$200 and US$240 in 2000.
In terms of output and exports in sawn hardwood, the country is ninth and sixth in Europe
respectively. However, softwood sawn timber (mainly from conifers) is a rare product, since
the output cannot meet the demand. Because of the high demand in the production finished
wooden products and building construction and its low output, a large quantity of this timber
has to be imported.
241. FRY is dependent on export markets to further develop its forest and wood industries.
In this context the impact of FRY’s absence from the European and international markets over
the last decade should not been underestimated. With the appearance of forest certification in
the mid 1990s and the subsequent growth in demand from buyers and users for certified forest
products, the ability to supply independently certified timber increases the chances to become
an important trade partner to environmentally sensible markets in Western Europe. In this
respect FRY has still some way to go, but it is encouraging that the need for an establishment
of a National Working Group (NWG) for the development of standards for sustainable forest
management and certification is currently under discussion within different stakeholder groups
in Serbia and Montenegro.
References
1.
1.
2.
3.
4.
5.
6.
7.
57
The Regional Environmental Center (Country Office Yugoslavia), Strategic
Environmental Analysis of FR Yugoslavia, pg. 15-16, Belgrade, 2001
Yugoslav Survey, Forests and Forestry, No. 3 2001
Hilmi, H. and Ilavsky, J. Report on an exploratory Forestry Mission to Serbia, FAO, 2001
Jovic, D. and Stanisic, M., Report on the Forest Condition in Yugoslavia, 2002
Jovic, D. and Stanisic, M., Data collection on forest management in Serbia, 2002
Prokic, S. and Todorovic, P. On the Laws concerning sustainable management of forest
ecosystems of protected areas in Serbia, 2001
Prokic, S., Management of Protected Areas in the Republic of Serbia, 2002
Prokic, S., Conservation and Promotion of Biological Diversity of Forest Ecosystems, 2002
http://www.yusurvey.co.yu/3_2001/ - _ftn2
100
DRAFT
ANNEX 10: BIODIVERSITY AND PROTECTED AREA MANAGEMENT
Characteristics of Biodiversity in FRY
242. Yugoslavia hosts a large variety of ecosystems ranging from Mediterranean-SubMediterranean evergreen forests, various deciduous forests, and coniferous woods typical of
the Euro-Siberian and North American regions, to freshwater bodies and marine ecosystems on
the Adriatic. This makes FRY one of the six European centers of biological diversity, and is
home to 39% of Europe's vascular plant species, 51% of its fish fauna, 74% of its bird fauna,
and 68% of its mammalian fauna [5]. The flora and fauna of Yugoslavia is characterized by a
great diversity of species including more than 8,000 plant species, 15,500 animal species, 550
species of fungi, and about 400-500 species of lichen. The exceptional richness of plant and
animal species and their communities is further illustrated by the existence of around 1,400
species of freshwater algae, 1,500 species of marine algae, 565 species of moss and 650
species of macro-mycete. Around 1,600 wild plant and animal species considered
internationally significant inhabit the FRY.
243. The fauna of the Adriatic Sea has not been fully investigated but according to available
data now available, among the better known groups of animals represented are some 300
species of Hydrozoas, some 700 species of Crustacea, 530 species of snails, about 300 shellfish
species, 23 Cephalopoda species, 408 fish species, 3 species of marine turtles, 4 species of
dolphins [2]. Several species of whales are also occasional visitors of the Adriatic.
244. A number of FRY’s nature areas have been recognized as internationally significant.
Among these are the Obed Swamps and the Ludas Lake, Skadar Lake and Carska bara - Stari
Begej (Ramsar Wetland of International Significance). The Durmitor-National Park with part
of the Tara River Canyon and the Kotor-Risan-Bay (on the World Natural Heritage List) and
the Tara River Canyon which has been included in the biosphere reserves grid of the UNESCO
Man and Biosphere Programme. A certain number of plant species from the flora of the FRY
are included in the Red Lists of European and World Flora, such as Ramonda serbica and R.
nathaliae, rare living representatives of the Tertiary tropic-subtropic flora that inhabited the
Mediterranean and Europe over 500,000 year ago. Among rich dendro-flora, there are three
sorts of crab apples (Malus), four sorts of common pear tree (Pyrus), and seven sorts of cherry
tree (Prunus), which represent important genetic resources in pomiculture. The richness and
peculiarity of the fauna in many caves in the Karst region (Eastern Serbia, Montenegro) are to
be seen not only in numerous endemic species, but also in endemic genera and families.
245. The country's biodiversity is further enhanced by endemic and relict varieties and
ecosystems which are found in FRY lending them global significance. Close to 15% of the
total flora is accounted for by endemic and subendemic plants, of which 2-3% are endemites to
be found exclusively in the territory of FRY or whose ranges spill over slightly into the
territories of the neighbouring states. About 60% (out of a total of 417 species) of endemic
Balkan flora to be found in the territory of Serbia are endangered to a varying degree and by
different causes [3]. Available data indicate that out of the total of some 5000 species of
vascular flora, 800-1000 (or about 20%) are endangered and some varieties have become
totally extinct.
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DRAFT
246. The bio-geographic position of FRY on the main lines of migration of a large number
of migratory animal species crossing from continental Europe to the Mediterranean and further
towards Africa and Asia, means that for much of the year, these species, many of which are
endangered or are species of international significance, are present in FRY.
Threats to Biodiversity
247. Negative impacts on ecosystems and biodiversity include: (i) unsustainable exploitation
forests, game and fish and use of improper and methods for fighting “pests”, such as
application of pesticides and herbicides, poisoning of game); (ii) mining practices that are not
friendly to nature, notably open-cast lignite and copper ore mines; (iii) expansion of
agricultural lands to marginal lands, drainage of swamps and marshes; (iv) water, soil and air
pollution; (v) urbanization, expansion of urban areas and tourism development in zones of
particularly vulnerable ecosystems; (vi) infrastructure development (fragmentation of habitats),
hydro melioration, construction of water accumulations in gorges (refuge habitats of relict and
endemic species and communities); (vi) fires, floods, accidental spills and discharges of
harmful substances by industry or during transportation.
Table A21: National Parks in Montenegro and Serbia
Park
Montenegro
Biogradska Gora
Durmitor
Lovcen
Lake Skadar
Serbia
Djerdap
Tara
Kopaonik
Fruska gora
Sara Mountain
Area
(ha)
Altitude range (m)
Berane, Kolasin i Mojkovac
Mojkovac, Pluzine, Pljevlja, Savnik i Zabljak
Cetinje, Budva
Podgorica, Bar i Cetinje
5,400
32,000
6,220
40,000
832-2,116
538-2,523
985-1,749
cryptode-depression
Golubac, Kladovo i Majdanpek
Bajina Basta
Raska i Brus
Backa Palanka, Beocin, Indjija, Irig, Novi Sad,
Sremska Mitrovica and Sid
Kacanik, Urosevac, Suva Reka, Prizren i Strpce
64,000
19,200
12,000
25,500
70-806
1,000-1,591
640-2,017
100-539
39,000
1,220-2,670
Municipalities
Protected Areas and National Parks
248. Nature conservation areas, including natural monuments, represent five percent of
Serbia's territory [5]. The Landscape Management Plan of the Republic of Serbia approved in
1996 aims to increase protected areas to 10% of the territory by the year 2010. Currently in
Serbia there are five national parks (Fruska Gora, Kopaonik, Tara, Sarplanina, and Djerdap Iron gate) (Table A21), 120 nature reserves, 20 nature parks and about 470 natural monuments.
249. In Montenegro, about 8% of the territory is protected by the state and is made up of
four national parks (Lake Skadar, Biogradska Gora, Durmitor and Lovcen) (Table A21), four
nature reserves, 51 natural monuments and four forest parks or special nature areas. An
102
DRAFT
estimated 314 animal and 52 plant species designated, as natural rarities inhabit protected areas
and are included in the republic’s Red Book.
Institutional and Legal Framework for Biodiversity Protection
250. Preservation of biological and landscape diversity of forest ecosystems in the country is
supported by the general FRY “Resolution on the Policy of Preservation of Biodiversity”. In
addition, a series of laws and legal acts exist in the Republics of Serbia and Montenegro, which
foresee an important role for the National Parks (NPs) and other protected areas where the
protection regime focuses on limiting use and through-traffic.
251. FRY is a signatory to the Convention on Biodiversity Conservation (1992) and of the
Convention on Trade of endangered species of Wild Flora and Fauna (1973), ratified both in
2001. FRY has also signed and ratified the Convention on the World’s Cultural and Natural
Heritage and the Ramsar Convention on Wetlands of International Importance Especially as
Waterfowl Habitat. Yugoslavia is also expected to ratify several other international treaties
relevant to international waters and to biodiversity conservation, such as the Convention to
Combat Desertification, the Convention on the Conservation of European Wildlife and Their
Natural Habitats, the Convention on Co-operation for the Protection and Sustainable of the
Danube River (Danube River Protection Convention), and the Convention on the Conservation
of Migratory of Wild Animals.
252. At the Federal level there are several regulations and policy documents related to
nature protection and international waters. They include the Resolution on Environmental
Protection Policy (1993), the Resolution on Biodiversity Conservation Policy (1994), the Law
on Trade of Substances for Plant Protection (1993), the Law on Principals for Environmental
Protection (1998) and the Law on the Protection of Forests (1999). The Resolution on
Biodiversity Conservation Policy of the FRY (1994) defines the base, goals and priorities in
this area and was prepared in order to assure the “fulfillment of obligations under international
agreements relevant to this field and conservation, protection, and sustainable use of
biodiversity and biological resources”. It also contains a list of priority programs to be
implemented.
253. Serbia’s legal framework is also contains laws regarding various aspects of
biodiversity: The Forest Law (1991); the Law on Environmental Protection (1991); the Law on
Hunting (1993); the National Parks Law (1993); the Law on the Control and Circulation of
Wild Plant and Animal Species (1996). In Montenegro the national legislation for biodiversity
conservation is also largely in place: the Environment Protection Law (1996), the Law on the
Protection and Use of Fauna (1996), the Protected Areas Act (1996), and the Forest Code
(1999).
254. At the Federal level, the Environment Department within the Secretariat for Health
Protection and Social Policy, is responsible for cooperation with specialized international
organizations in the field. At the republican level, the Ministries of Agriculture, Waters and
Forests are responsible for forestry and forests biodiversity. They are also responsible for
fauna protection and utilization, and for the enforcement of exiting legislation in these areas.
Forest management it is carried out by forest enterprises (sume) whose responsibilities include
the protection, and conservation of forests and their biodiversity. The strategic goal of the
103
DRAFT
enterprises is to promote an integrated and sustainable management of forests. The republican
Ministries of Environmental Protection are responsible for supervising activities of public
enterprises for National Parks.
Box A11: National Park Lake Skadar
Lake Skadar is the largest lake on the Balkan Peninsula, with a surface area of about 20,000 ha. Two thirds of
the lake is located in Montenegro and the rest in Albania. The lake surface varies between 260ha and 440 ha.
The lake is geographically and ecologically connected with other aquatic habitats (Buna River and Delta,
Velipoja Reserve and Domni marshes, Veluni Lagoon), thus creating an ecological complex of wetlands. It was
identified as one of the 24 transboundary wetland sites of international importance, known as “Ecological Bricks
sites”[5]. The lake is also one of the 5 most important wintering sites of waterfowl in Europe, and a critical
staging and wintering site for migratory birds, some of which are globally threatened.
The Skadar Lake has a unique and rich flora and diverse fauna that includes numerous endemic species. It is the
richest part of the Balkans in flora and fauna, and is home to 176 bird species, 42 fish species and a huge
diversity of plants, including a great number of endemic and protected species. Lake Skadar is also home for
about 250,000 birds, and a sanctuary for 1.5 to 2.5 million birds from all over the world during the summer.
Lake Skadar plays an important role for local livelihoods. Notably fisheries are a significant source of income.
The Lake, coupled with its beaches, varied landscapes that surround it and the presence of 20 monastery
complexes, churches, villages, fortresses and sacral monuments in the Skadar area, has attracted local tourists.
During the past decades, Lake Skadar has experienced significant water pollution causing losses in aquatic
biodiversity and posing a threat to fisheries, public health and tourism. This is due, in part, to eutrophication
caused by excessive flows of nutrients from point sources (industrial and municipal wastewater) and non-point
sources (agricultural), pollutants originating from waste disposal sites and transported by groundwater, and to
sediment run-off as a result of deforestation and overgrazing in the catchment area. Overfishing has also been an
important threat to the sustainability of fisheries, and excessive hunting has threatened birds.
The protection of the Lake will require coordinated action by the two littoral countries, Albania and Montenegro.
A transboundary environmental analysis should be carried out on the basis of which a joint Lake Management
Plan should be prepared. Actions should also include measures to reduce pollution from various point and nonpoint sources, afforestation works in deforested areas mainly in Albanian part, law enforcement against illegal
bird hunting and fishing, and promotion of public awareness. Furthermore, environmentally friendly economic
activities should be introduced to the poor local communities that would reduce the pressure on the natural
resources of the lake and its surroundings. These may include ecological tourism, wood handicrafts, best
agricultural practices, such as manure management and planting of high value fruit trees.
255. Public Enterprises on National Parks and Institutes for Nature Protection. Pursuant
their respective Laws on National Parks of both republics, the administration and management
of NPs is the responsibility of public enterprises which report to the respective Republican
Ministries of Environmental Protection . The national parks are managed in accordance with
special programs of protection based on the Republics’ Spatial Development Plans. In
addition, in Serbia and Montenegro the independent Institutes for the Nature Protection fulfill a
very crucial role, since they is in charge of the monitoring and capacity building of commercial
users of natural resources (mainly “non –timber forest products”) from protected areas.
256. It may be concluded that both at the federal and republican levels, necessary
institutional set up and legislation are in place. What is needed is strengthening of institutional
capacity, integrate them in regional and global conservation networks and harmonize the laws
104
DRAFT
and regulations with international best practices and, where feasible from a cost effectiveness
point of view, with EU legislation.
Problems in Protected Areas Management
257. Despite the fact that FRY’s NPs are generally in relatively good condition, most of
them suffer from inadequate funding and have very weak institutional and human capacity.
Park development depends in part on the receipt of public funding. However, this has been
decreasing in the face of the Governments’ tight budgetary policies. For example in
Montenegro, the NP public enterprise has experienced a budget cut of 33 % in the last year.
These difficulties have led a number of NP administrations to resort to revenue-generating
activities that are not in line with existing legislation. In particular, in National parks that
include forests, administrations engage in wood cutting and sales in the name of “sanitary
cutting” and to regular small scale logging in zones with less restrictive protection regimes.
Construction activities fro tourism development are also reported to have reached
unsustainable levels from a biodiversity protection point of view.
258. In the face of decreasing public resources that maybe used for biodiversity protection,
there is a need for a comprehensive strategy and action plan which identifies priority problems,
including species and eco-systems that require attention more immediately than others, and
measures to be undertaken.
References
1.
2.
3.
4.
5.
The Regional Environmental Center. Environmental analysis of FRY, Belgrade, 2001
FRY Resolution on Biodiversity Conservation, 1994
FRY Resolution on Environmental Protection, 1993.
Statistical yearbook, 2001
Europe’s Environment, Dobris Assessment, 1995,
105
Implemented 15 of 27 projects in NATO bombing hotspots
identified by Balkan Task Force (UNFCS & UNEP) for a total of
USD 37m
Main Activities
UNECE
UNEP / UNDP
UNEP
EU
Finland
Switzerland and
Norway through
Both
Both
Both
Both
Both
Serbia
107
Preparation of an Environmental Performance Review for the
country at the request of the Yugoslav Government. This will be a
comprehensive analysis of the current state of Environment and
country’s environmental management system, containing also a list
of policy recommendations for improving the situation in the sector.
UNECE also cooperates with Yugoslavia through its regional
environmental conventions.
International seminar on implementation of multilateral
environmental agreements in Yugoslavia (Fall 2001).
Capacity building workshop in parallel to hotspot clean-up
activities.
TA planned in three areas in 2002-2006:
Drafting, adopting and implementing a well functioning legal,
policy and institutional framework
Supporting in maintaining and further development of a civil
society network,
Strengthening the municipal institutions responsible for solid waste
and waste water management.
Improvement and harmonization of environmental legislation with
EU directives particularly in (i) public participation; (ii)
environment impact assessment and (iii) integrated pollution
prevention and control (2002 – 2004)
Drafting of the Framework Law for Environmental Protection
EU also would on exceptional basis procure equipment for
pollution monitoring and support some works in sites where current
ecological situation raises concern with respect to possible
environmental damage. This may also involve dealing with ‘hot
spots’ in areas such as Trepca, Pancevo and Novi Sad.
Institutional Capacity Building and Regulatory Reform
Republic
Donor
Environmental Hotspots
Both
Switzerland,
Austria, Norway,
Russia, Denmark
and several others
Both
EU
Table A22. Ongoing and planned donor activities in the environment sector.
???
Euro 1.2m
NA
NA
NA
US$ 11.2m
Funding
Comments
ANNEX 11. DONOR COOPERATION IN THE ENVIRONMENT SECTOR
DRAFT
REC
REReP through
REC
OSCE
REC
Considering a District Heating Project in Belgrade
Co-implementation of several regional projects in Yugoslavia: (a)
support for ratification and implementation of multilateral
environmental agreements; (b) strengthening the capacities of the
national environmental protection agencies and their inspectorates;
(c) developing national information systems, networking
environmental and finance specialists; (d) developing strategies for
implementation of the Aarhus Convention, environmental legal
advocacy and advisory centers.
“Promotion of networking and exchange of experience in countries
of South-Eastern Europe”. Project has a special component on
Lake Skadar to promote cross border exchange between local
people, organizations and NGOs, technical networks in support of
the selected transboundary sites, in implementing small scale
demonstrational projects.
Promotion of and support for the development of Local
Environmental Action Plans in Bor, Kotor and other localities.
108
Enabling activity for the preparation of “Yugoslavia First National
Communication in Response to its Commitments to the UNFCCC”
Both
UNDP / GEF
Biodiversity Strategy
Both
UNDP
Advisory services and capacity building activities on energy
conservation and efficiency, and promotion of sector reform
Water Supply, Sewerage and Wastewater Treatment
Montenegro
EU through ERA
Has funded several feasibility studies on municipal infrastructure
development and maintenance.
Capital investment in sewerage and wastewater treatment in the
coastal region and in Virpazar (small locality on the lake Skadar).
Time frame??
Serbia
EBRD
Loan to Nis to develop the city’s sewage system over the 2002to
2004 period
Loans to the cities of Belgrade, Novi Sad and Nis to upgrade water
supply systems.
Serbia
Germany
Rehabilitation of the Belgrade and Nis wastewater supply systems
Revitalization of water supply, municipal heating and wastewater
systems, and development of small and medium enterprises in other
cities
Energy and Air Pollution
Serbia
EBRD
Serbia
WB
Both
UNDP / GEF
Both
Euro 5.1m
Euro 37.3m
NA
Euro 6m
Euro 1.7m.
NA
TBD
NA
US$ 0.35m
EU intends to act as catalyst for
investment in WWT and aim for cost
effective solutions. May Provide cofinancing to IFI and municipality
funds.
REC acts as the Secretariat for the
Regional Environmental
Reconstruction Program (REReP) in
the framework of the Stability Pact for
South Eastern Europe
DRAFT
France
WB
USAID
Municipal level infrastructure development and maintenance, and
support to civil society development, NGO involvement in project
implementation. Five year program.
Maintenance, repair and small-scale construction of infrastructure
facilities. (2001)
IFC is offering advisory services on the privatization of the city’s
main landfill and waste management operations
Health Sector Loan at early stage of preparation will likely include
a sub-component to improve disposal of medical waste
Loan for Podgorica Waste management under preparation
Grant for solid waste management on Adriatic coast
IDA credit for waste management project
Plans to carry out GEF funded inventory development for POPs
Preparation of Waste Management Strategy
Grant for the construction of drinking water treatment plants and
the local water supply grid in the village of Ivanovo (2001)
Grant to finance small, rural water supply systems in Ruma,
Vrnjakc, Banja, and Lipovica (2002).
109
Germany through
Plans to invest in environment sector, specific areas to be
KfW
determined.
NA : Information not available, TBD: To be determined
Other
Montenegro
???
EBRD
WB
WB
Serbia
UNEP
Serbia
Japan
Other Municipal Services
Both
EU through ERA
Montenegro
Montenegro
Serbia
Waste Management
Serbia
IFC (WB)
Serbia
Euro 2.5m
US$ 200m
Euro 320
NA
US$ 2m
US$ 5m
TBD
NA
TBD
US$ 0.17m
US$ 0.25m
Assistance expected to continue in
same scale and areas, as stipulated in
EU Country Strategy Paper for
Yugoslavia for the period 2002-2006
DRAFT

Korice Svetska banka.cdr

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