Vol 1, No 12
13 September 1999
C S A R D A S:|
Where There's Muck There's Brass
Hungary and the Environment
Under Socialist rule, the concern about the degradation of the environment did not feature at the top of the agenda in Hungary. One of the reasons for this may be found in the attitude of Socialism to the natural and the political world.
Under the old system, political domination and control was paramount, reflected in the concerns of ordinary citizens, who had to fight continuous rearguard actions against malicious gossip questioning their affinities and loyalties which could lead to severe material disadvantages should they come under suspicion. Communist doctrine claimed to have a monopoly on rationalism and on good governance; the state was the ultimate benefactor, sole owner and administrator of the nation's economic goods and, as such, sole distributor of the goods produced and welfare generated. Good planning could surmount all shortages or temporary difficulties, provided workers showed solidarity and supported the cause.
Just as political activity was to be subordinated to the greater good, nature was to be subjugated and exploited as a resource in a heroic struggle against opposition, resistance and envy from the outside. According to this world view, the only failure could be failure to anticipate correctly what needs had to be satisfied. Ill will on the part of conspiring, subversive elements was offered as an explanation for visible shortcomings, hence the frenetic search for scapegoats whose reputations were systematically ruined and (particularly during Rakosi's reign of terror) whose lives were extinguished as an example to deter other potential traitors from following suit. There was very little room for compromise: the regime could only admit to having been misinformed or sabotaged, but could not afford to recognise its own culpability. Renewal might be called for, but to question the basic principles underlying Communist rule was heretical, disparaged as reactionary and punishable.
The command economy set new targets to be achieved regardless of the human or environmental costs. At the same time, civil society had been all but eradicated. Any initiatives had to be taken within the Party framework (however nominal that framework might be in actual practice) with the government frowning on all grass roots movements perceiving them, quite rightly, as a threat. Such movements and initiatives represented an implicit challenge to the prevailing, Party-imposed ideology which underpinned and justified the Party's authority at theoretical level.
The beginning of a Circle
In the latter days of Communist rule in Hungary, the Duna Kor (Danube Circle) an environmental protest movement founded in reaction to the government's policy on the Bos-Nagymaros dam and power station project, had to launch its campaign under (nominal) Socialist protection in the shape of the Patriotic People's Front in order to avoid incurring the wrath of the regime. It was able to mobilise thousands of demonstrators at a time when demonstrations were generally dispersed by brutal force and their organisers arrested by paying lip service to the Party (claiming not to be opposing the Party and its policy, but to be motivated by a wish to improve the Party and its workings even further), an astute tactic which paid dividends.
The Danube Circle has continued to work as a pressure group to prevent the destruction of the natural water environment of the Upper Danube, monitoring government policy on Bos-Nagymaros even today.
Although Hungary can now boast of a flourishing green movement, its concerns have made a relatively small impact on the governments that have come into power since the collapse of Communism. The increased awareness of the need to improve on the country's environmental record has more to do with a pragmatic approach to EU accession than with genuine conviction on the part of mainstream politicians. The legacy of a past where artificially-created heavy industry was allowed to spew out waste without the slightest attention being paid to the detrimental effects of this on human, animal and plant health is a particularly costly one. Cleaning up afterwards requires a great deal of investment over a long period of time. Foreign capital must be attracted to facilitate the process.
Hungary is anxious to remain at the top of the list of candidate countries with regard to accession, anxious to be seen as the most deserving, to outperform her "rivals." This means that the government cannot ignore the standards already attained in the EU over a broad spectrum of policies (the body of EU law referred to as the acquis communautaire), including environmental standards.
Although transitional waivers may be requested, Hungary is aware that these might always be cited by their EU negotiating partners as a pretext to postpone accession, something which would severely dent the prestige of whichever government happened to be in charge of the country. Tackling environmental problems has become an endeavour of vital importance: Hungary's application must not be allowed to founder because of lack of action in this field. That the EU is deeply concerned about the negative impact of the Communist era in the candidate countries is demonstrated by the resources it has set aside in its various programmes, funds which are distributed via calls to tender and the like. The benefits of such aid have not escaped the government's notice.
That a great deal remains to be done is illustrated by the wrangles over the landfill site at Gare, a scandal that has dragged on over the last 15 years. Between 1979 and 1986, armed with planning permission and geological research results that designated it as a suitable site, the Budapesti Vegyimuvek Rt. (Budapest Chemical Works Company, or BV) transported a total of 64,000 iron barrels of hazardous waste from the plant (by-products from its production of weed killer) and its previous dumping ground to the site at Gare in an effort to avoid the air pollution that would be caused by incineration by depositing the barrels in the ground.
In 1983, however, it emerged that the concept was flawed: the barrels had started to rust and leak the toxic tetrachlorobenzene into the soil and ground water. The environmental protection authority that had come into being in the meantime carried out further studies, preventing the company from burying any more barrels of waste in the interim.
The extent to which the original study had been botched was revealed when it became clear that the layer of clay on which the 2.5 hectare site was placed did not prove to be impermeable and continuous as the original findings had suggested, but was letting the TCB seep through.
The Southern Transdanubian Environmental Protection Inspectorate first compelled the chemical company to place the waste into new containers, then set out a timetable according to which the problem had to be solved: the landfill had to be shut down, the waste disposed of by the end of 2000 and the soil cleaned by 2003.
In 1993, the chemical company set up a joint venture with a French partner, Tredi, a firm which specialises in such facilities, to operate an incineration plant at Gare with an incineration capacity of 18,000 tonnes a year. Unfortunately these efforts were frustrated by the intransigence of the neighbouring local authority at Szalanta, which resolutely opposed the realisation of the plans (classic NIMBY reaction). Tredi has earmarked an alternative at Rudabanya in response.
Trouble and trash
Instead of actually destroying the 16,000 tonnes of TCB, the whole Gare issue degenerated into a squabble over who would be entitled to carry out the work. In November 1997, the Ministry of the Environment and BV issued a call to tender, according to which HUF 900 million of non-refundable support would be paid by the Central Environmental Protection Fund and HUF 1.8 billion would be paid by BV by way of amortisation with the Fund paying the interest. The total value of the tender would be HUF 2.35 billion.
What appears at face value to be a very generous approach on the government's part is not in fact inspired by philanthropy as much as by cold calculation: BV is legally liable to pay for the damage caused, and if forced to pay without aid would most probably go bust. If that were to happen, the government, as former owners of the company, would be presented with the entire bill and no alternative but stumping up.
Many experts condemned the call to tender, claiming that it did not represent a real solution to the problems, as it only stipulated that 2-3,000 tonnes of waste be incinerated whilst the remainder could be placed in properly-insulated storage tanks occupying the space formerly occupied by the incinerated waste. This might mean that the waste would remain in situ for anything up to a further ten years, hardly desirable. 4,000 tonnes of soil would be cleaned biologically, but 7,000 tonnes of the worst polluted soil would not be dealt with. Not only would this be more expensive than simple final storage, but it was also at odds with the government decree of 1996 prohibiting the temporary storage of waste over several years.
In August of 1998 (following the elections and the change of government from the Socialists to the Young Democrat-led coalition), the Ministry of the Environment and BV suspended the work that had begun with the company that had put ion the winning bid, Betonut, and its subcontractors. Rather than admitting the real reason behind the decision (the faults in the previous Ministry's call to tender), the Ministry invoked failure to fulfil contractual obligations in a suitable fashion as justification for revoking the contract. AGM Beton, one of the subcontractors supplying insulated concrete barrels, launched a civil suit for breach of contract and calling for compensation. Prior to the change of course on the part of the government, AGM Beton had produced 570 concrete barrels, paying interest on a loan that covered the cost of the whole order, namely of 1,170 barrels (amounting to HUF 1.17 billion).
The new call to tender tried to present a more rational solution to the problem of disposing the waste, though it remained silent on the issue of cleaning the soil due to lack of funds. The successful bidders were Geohidroterv and the Palota consortium, whose proposal to send all the waste to six German and one Austrian incineration plant met with the government's approval.
The losers were four joint bidders who selected a Hungarian incineration plant as their subcontractor, the Dorogi Incineration Plant, the only such plant in Hungary capable of dealing with large quantities of waste containing a high concentration (on average 50%) of chlorine. The Dorogi plant is owned by the French Sarp Industries and Vivendi group. In the course of one year, they invested HUF 450 million to ensure that dioxin emissions from the plant would not exceed the prescribed limit values. This investment, however, was only completed in July, in other words, after the date by which the bid had to be submitted. This fact was quoted by Mr Zsolt Sajgo, general manager of Geohidroterv, as a justification for designating only foreign companies as subcontractors.
Katalin Lagler, managing director of the Dorogi plant, expressed her consternation at the result of the call to tender: not only had over HUF 450 billion been invested, but the plant's capacity had been increased by 30,000 tonnes, only 90% of which had been utilised last year. The decision to award the contract to a consortium that proposed only to cooperate with foreign firms appeared all the more peculiar in the light of one of the conditions of the call to tender itself, which stated that if the successful bidder were to undertake to have the disposal carried out abroad, then that company must be in possession of the relevant permits required under the Basle convention. Such permits, however, may only be applied for by the owner of the waste, meaning that the call to tender itself imposed a condition on the bidders that they could not comply with! Furthermore, the Basle Convention, to which Hungary is a signatory, stipulates that consignments of hazardous waste may only be exported abroad if the exporting state does not have the facilities necessary to dispose of the waste at home.
The Dorogi plant had agreed to dispose of 5,000 tonnes of waste by the end of December 2000 on behalf of each of the four bidding partners. According to the call to tender, a maximum of 15% of the total 14,000 tonnes may be disposed of (without a separate bid being necessitated) by a company not selected by the winning consortium, a figure which falls far short of the 5,000 tonnes suggested by Dorogi. If one of the four bidders were to contest the award of the contract, they would merely have to invoke the Convention and the whole process would once again grind to a halt.
Politicians get their fill
Mr Zoltan Illes, Vice Chairman of the Young Democrats and Chairman of the Environmental Protection Committee of the Hungarian Parliament, was able to make political capital out of the Gare landfill whilst he was still in opposition. He criticised Ferenc Baja, the then (Socialist) Minister of the Environment, for failing to realise just how serious a threat Gare posed to public health and the environment in Transdanubia, referring to soil and ground water tests that were carried out and which revealed traces of dioxin and TCB far from the landfill site. This was enough to alarm the Minister, who commissioned studies and issued the call to tender in 1997.
It has subsequently been demonstrated that Illes's prophecies of impending doom were premature, as nowhere outside the Gare site did pollution exceed limit values, suggesting that purification methods used by the chemical company (involving pumping water up to the surface for purification) had been successful in terms of protecting the ground water.
As regards the Dorogi plant: Mr Illes stated at a meeting of the Environment Committee earlier this year that once Hungary joins the EU, the Member States' markets would open up to Hungarian waste and this would render investment at home superfluous. It is interesting to note such a suggestion by a man in his position, particularly as the Basle Convention obliges signatories to process their own waste at home.
Clearly, co-ordination must be improved to put a stop to sloppiness of the type to be found in both calls to tender. The apathy that not only fails to reward investment but also acts as a disincentive against it must be overcome if true progress is to be made. Adapting to the demands of the acquis communautaire by altering the contents of the statute books is not enough to ensure change. Administrative practice would remain locked into the pattern of 40 years of Communist rule, with everything looking fine on paper, but remaining a dead letter. The EU will not allow itself to be duped by this.
Gusztav Kosztolanyi, 12 September 1999
Source for some of the parts on Gare: HVG, 4 September 1999
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