Work piles up for environmental consultants ahead of EU rules
By : Greg Goodale
Environmental laws are playing an increasing role in the assessment of investment risk. With pressure on Poland to quicken the pace of European Union (EU) compliance, environmental consultants have their hands full in assessing the impact of present and future laws.
The signing of the Law on Environmental Protection by President Aleksander Kwasniewski this May brought Poland a step closer to making the country's environmental legislation EU compliant. Since a November 2000 European Commission report described Poland as making little progress toward the environmental chapter, legislative work has gone at a more urgent pace and Poland's official negotiating position was amended this month, cutting down the number of requested transitional periods from 11 to six.
While the rate of adoption of new laws is promising for Poland's accession, investors especially in heavy industry need to have an accurate estimate of the costs involved with the implementation of these laws and the risk that new laws will incur additional costs in the future. Environmental consultants, whose main task is to interpret and assess the potential cost of environmental legislation, are finding this an opportune time in Poland.
Christopher Moore, managing director of the Warsaw office of U.K.-based consultancy group WS Atkins, said the introduction of new laws was a particular source of new challenges. "There are huge problems for the country, environmentally, simply because of the scale of change," Moore said. "It's very easy to sign a bit of paper, but it's actually very difficult to deliver. The scale of change isn't about changing what has happened; it's changing the whole mindset about how you're going to do things in the future."
"We have to keep learning, keep up to date with EU directives, regulations and the Law on Environmental Protection," said Anna Mihulka, director of Warsaw environmental consultancy Atmoterm. "The consultant has to know which regulations apply, which ones will apply in the next few years and the EU directives that are being prepared."
The global commercial environment also necessitates comparisons with foreign legal systems. Moore said these serve as additional complexities when work is being done with investors interested in power stations. "We compare their outputs and their inputs to current legislation, to anticipated future Polish legislation, to future and current EU legislation and other national legislation, depending on the source of the question," Moore said. "Americans like to hear the answers by comparison to American legislation."
The main body of environmental legislation that requires investors to reach for environmental consultants in Poland relates to the 1996 Directive on Integrated Pollution Prevention and Control (IPCC), which attempts to introduce sustainable production in Europe during an 11-year transition period.
Consultants are also at work on the other side of the legislative process. Tomasz Nowakowski is director of the environmental protection team at Denmark-based consultancy firm COWI, which is involved with Polish lawmakers. "At the moment our work is largely theoretical, getting to know those acts that are being introduced, comparing them with EU directives and working with the Environment Ministry on how to introduce these EU rules so that they function," Nowakowski said. "Work is underway on the enabling acts to complete the legal framework. There is also work on pilot projects on a selected group of companies."
According to Mihulka, the complexities of the legal framework for EU accession can cause more implementation problems than the process of introducing compliance in individual firms. "Knowing companies and the technologies in the oil, fuel and motor industries, we do not see problems with meeting norms but with clearly establishing conditions in laws," Mihulka said. "Not all of these laws are compatible with each other, and this is the biggest problem formulating uniform enabling acts since the new Law on Environmental Protection is very difficult."
The main area of future complications that environmental advisers are trying to tackle is the concept of Best Available Techniques (BAT), used in the IPCC directive. BAT means that both regulator and operator must look at the overall environmental impact of an investment before deciding how it should be carried art. Operators will have to go as far as possible to optimize environmental performance by applying the best available techniques, established for specific industries by the EU bureau in Seville, and in the future by a bureau concentrating on Polish industry. "It is a combination of the most modern and most environmentally friendly technology, which is also friendly toward the company adopting it," Nowakowski said.
Moore anticipates that the continuing introduction of EU legislation in Poland will mean that environmental consultancy will be increasingly important to investors in the future. "The position for new investors has become a minefield over the past few years. There's good business to be done here, but it's going to get riskier if you don't get the right advice."
