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ERT AND REC: STRANGE BEDFELLOWS
"The worst case for industry is to act in a world where it has no influence." [1]
REC-ERT Report on EU Enlargement
he European Roundtable of Industrialists (ERT) has stepped up its activities on EU enlargement towards Central and Eastern Europe (CEE), manoeuvring itself into a comfortable agenda-shaping position where it can play an influential role in
promoting industry- friendly policy and development. To aid it in this endeavour, the ERT has joined forces with the Regional Environment Centre (REC) for Central and Eastern Europe - one of the largest CEE-based environmental organisations. Together, these strange bedfellows organised a seminar last Spring on "Industry-Government Dialogue on EU Accession" [2] where they came with recommended "key- actions" to be undertaken by governments, industry and NGOs "to build up an atmosphere of trust between stakeholders, which is still missing in the CEE region." [3]
RECING THE ENVIRONMENT
The Regional Environment Centre (REC) for Central and Eastern Europe is largely indistinguishable from some governmental institutions. Setup in 1990 by the European Commission, the United States and Hungary, it has an annual budget of approximately 5-6 million euro [4] largely from various European governments, the European Commission, the US, Japan and organisations such as the United Nations Development Program (UNDP). With a board of directors made up of representatives from the major donors [5] and a general assembly composed of governmental bodies (mostly ministries of environment) and some large conservation NGOs, it is easy to see why the REC maintains a weak stance on the environment.
With its headquarters in Szentendre, Hungary, and local offices in 15 CEE countries, [6] the hundred-staffed REC has the mission of "assisting in solving environmental problems in CEE" and aims to achieve it by "encouraging cooperation among NGOs, governments and business, supporting the free exchange of information and promoting public participation in decision-making." [7]
Despite the lofty aims, REC is under much criticism from environmental groups in CEE. Many criticise the control and influence it leverages over almost every official environmental initiative affecting CEE countries, from climate change activities to post-war reconstruction of the region. As one Eastern environmentalist puts it, "REC is becoming now like an octopus, monopolising all the funding and initiatives for CEE." [8] Local groups also complain about REC becoming "unaccountably huge" [9] while at the same time decreasing its funding role for local groups and working more as a consultancy for government and industry.
Now that funding is drying up, the REC is turning to industry seeking to attract "important industrial leaders to become involved in the structure of the Center." [10] Businesses and their lobby groups are attracted to the REC for its ability to facilitate gaining access to governments and related agencies about environmental issues such as standards, implementation schedules and incentives. Through its 'Business and Environment Program', the REC has been developing partnerships with the likes of the ERT and the World Business Council for Sustainable Development (WBCSD), as well as with the OECD, UN agencies and CEE organisations such as Cleaner Production Centres and Pollution Prevention Centres. It was through this program, that the ERT-REC seminar came to be.
The seminar brought together more than 80 participants "from business, government and non-profit organisations, representing the three main stakeholders in environmental decision-making." [11] Participants were mainly from government and industry, including representatives of ERT companies BP, Lafarge, Pilkington, Pirelli, Shell and Veba, and corporate lobby groups such as the ERT and the WBCSD. Only a few participants were from NGOs, and these included such dubious groups as the European Partners for the Environment (EPE).
The substance of the meeting - as gauged from the various workshops, discussions and case studies discussed - reflected some of the ERT's major goals and strategies. Some of the main recommendations for environmental policy in CEE included age-old ERT favourites such as industry self-regulation and "industry- government dialogue"- ERT-speak for unhampered business access to decision-makers and involvement and shaping of major policies.
Workshops were organised in six issues of relevance to industry: eco-efficiency; EU environmental legislation; pollution prevention; compliance costs of accession; promoting industry-government dialogue; and voluntary agreements. The report featured case studies on how environmental practices are good for business- in other words, how to make more money out of the environmental crisis. For instance, Philips' Herman Meinders presented how the company 'successfully' changed from a reactive to a proactive environmental strategy. "Consumers are only too pleased with the firm's new environmental image," [12] said Meinders, going on to boast about the number of environmental awards the company has been given from various governments and referring to increased cooperation with the UN. Peter Gill listed BP Oil's current environmental activities which focus on climate change, reduction of hydrocarbons, improving clean fuels and "leadership in industry bodies to help ensure legislation is technically sound and cost- based," [13] - a clear reference to its lobby efforts to promote self- regulation and market-based `solutions' to climate change. The same goes for Lafarge's Frederic Fleuret who boasted of having the company's investment in the Czech Cizkovica Cementarna plant registered as an Action Implemented Jointly with the UN Climate Convention, as a result of its voluntary agreement with the Czech and French governments to cut greenhouse gas emissions. [14] Raymond van Ermen, EPE's Executive Director and partner of the WBCSD in the European Eco-Efficiency Initiative (EEEI) - aimed at introducing this business concept into the EU industrial and economic policies - also contributed to spread the self-regulation gospel by asking for "a new generation of voluntary initiatives." [15]
The report also presents some "key-actions" to be adopted by governments, industry and "supporting organisations" such as NGOs, ERT and REC, with the core message of promoting industry-business dialogue. All in all, the seminar can be seen as another feather in the hat of the ERT in preparing the ground for its envisioned enlargement of the EU. The REC should be aware of the consequences of promoting a highly unsustainable development model for Central and Eastern Europe.
ERT SETS UP BUSINESS ENLARGEMENT COUNCILS IN BULGARIA, HUNGARY, AND ROMANIA
The joint report by the European Roundtable of Industrialists (ERT) and the Regional Environmental Centre (REC) hails the Business Enlargement Councils (BECs) [16] as a positive example of dialogue between governments and industry in Central and Eastern Europe. [17] As described in Issue 3 of the Corporate Europe Observer, Business Enlargement Councils (BECs) involving government and ERT representatives are being set up by ERT companies, with the aim of steering the EU enlargement and the related economic adjustment process in line with corporate interests.
The ERT launched the first BEC in Bulgaria, in November 1998, with an event attended by the Bulgarian President. Chaired by Baron Daniel Janssen of Solvay, the Bulgarian Business Enlargement Council brings together senior government officials and representatives of corporations like BAT, Danône, Ericsson, Nestlé, Norsk Hydro, Philips, Shell, Siemens, Solvay, Suez Lyonnaise des Eaux, Unilever and Union Miniere. The Bulgarian BEC focuses on various hot issues for Western TNCs investing in the country, such as key legislation, privatisation, ' level playing field' for investors, infrastructure priorities and closer government- business consultation. The Hungarian Business Enlargement Council was launched in May 1999 together with the ERT report on enlargement, receiving a "very extensive and enthusiastic media coverage and an excellent feedback from the Hungarian government". [18] Chaired by ABB's Peter A. Hegedus, and with most corporate members coming from the ERT, [19] the group zooms in on issues which might have an impact on business competiteveness.
The BEC sees itself as a link between the Hungarian government, business and EU policy makers. It has also prepared a special Hungarian version of the ERT Enlargement report with 10 case studies, which was "very well received by the Hungarian government."[20] The most recent BEC was established in Romania. The Romanian BEC is chaired by ERT veteran Jerome Monod, CEO of Suez Lyonnaise des Eaux and co-chair of the Trans-Atlantic Business Dialogue (TABD). ABB, BAT, Delta Dairy, Krupp, Lafarge, Nestlé, Philips, Rhône Poulenc, Shell and Unilever are the corporate members of this BEC which benefit from "an excellent network with the Romanian government officials."[21] Not surprisingly, the ERT seems satisfied with the results of the initiative, of which "the EU Commission is very supportive," and the Roundtable plans to set up BECs in other Central and Eastern European countries in the near future.[22]
NOTES
1. REC-ERT, "Industry-Government Dialogue on EU Accession. Business opportunities for best environmental practices", Report on the Seminar, Szentendre, Hungary, 17-19 March 1999, p.8.
2. This joint seminar was the first initiative of the "business- government dialogue" springing from the Ministerial Conference "Environment for Europe", held in Århus, Denmark, in June 1998. At the first of the "Environment for Europe" conferences, which took place in Czechoslovakia in April 1991, ministers of environment from Europe, US and Canada, decided to prepare an Environmental Action Program (EAP) for Central and Eastern Europe. Following conferences took place in Lucerne, Switzerland, in 1993 and in Sofia, Bulgaria, in 1995. To facilitate the implementation of the EAP, it was decided in Lucerne to establish an EAP Task Force, co-chaired by the European Commission and a CEE country on a rotating basis. Since Århus the OECD shares the Secretariat with the REC. The ERT laid the ground with a paper presented to the Århus Ministerial Conference stressing the benefits of the good environmental practices, where they committed among other things to "participate openly in discussions with local environmental regulators on environmental improvements and cost-benefit analysis". Source: ERT, "The East-West Win-Win Business Experience", Brussels, February 1999, p.13.
3. REC-ERT "Industry-Government Dialogue on EU Accession. Business opportunities for best environmental practices", Report on the Seminar, Szentendre, Hungary, 17-19 March 1999, p.1.
4. REC's web page publishes detailed contributions only for 1996 (5.525.258 euros). It also states total contributions for the period 1990-96, amounting to 21.426.915 euros). REC's web site: http://www.rec.org/
5. REC's Chairman is since 1993 Dr. Bedrich Moldan, first Czech Minister of Environment, later Chairman of the Union of Nature Conservation and vice-president of the UN Commission on Sustainable Development. Jernej Stritih is REC's Executive Director, he is also member of the EBRD Environmental Advisory Committee, former State of Secretary of Ministry of Environment in Slovenia and he has been working for various Slovenian conservationist organisations.
6. Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, FYR Macedonia, Poland, Romania, Slovakia, Slovenia and Yugoslavia.
7. REC, "What is REC", REC web site.
8. Confidential source.
9. Ibid.
10. REC, "Strategy 1997-2000", REC web site.
11. REC-ERT "Industry-Government Dialogue on EU Accession. Business opportunities for best environmental practices", Report on the Seminar, Szentendre, Hungary, 17-19 March 1999, p.14.
12. Ibid, p.5.
13. Ibid, p. 7
14. Ibid, p. 11.
15. Ibid, p.12
16. See Corporate Europe Observer Issue # 3.
17. REC-ERT "Industry-Government Dialogue on EU Accession. Business opportunities for best environmental practices", Report on the Seminar, Szentendre, Hungary, 17-19 March 1999.
18. Communication by Joanna Rau, ERT, September 1999.
19. Members are ABB, BAT, Ericsson, Fiat, Nestlé, Suez Lyonnaise des Eaux, Philips, Unilever, Pirelli, Power & Gas Hungary and Siemens.
20. Ibid.
21. ibid.
22. ibid.
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