The promise of EU development aid has always been one of the most popular benefits of EU membership for the 10 new member states. Known as EU “regional policy” or “cohesion policy,” this aid comes in the form of public investment funds mostly targeted at regions with less than 75 percent of the EU average GDP. Over EUR 20 billion has been allocated for the 2.5 years remaining in the current funding cycle, with the aim of boosting GDP and bringing the new EU states closer to the fold economically and socially.

Two financing instruments, the Structural Funds and the Cohesion Fund, will co-finance investments in public infrastructure, agriculture, human resources, business support services and other measures to increase economic competitiveness.

The complex development plans which will determine the specific uses of the funds have been approved by the European Commission, but the management and disbursement of the money has been relegated to the new member states. These countries have scrambled to put together the administrative agencies and personnel required to prepare investment plans and programmes, project application and appraisal processes, paying authorities, and monitoring and evaluation mechanisms. The enormity of the task has meant that many important issues not directly related to absorption of the funds have been overlooked. Two of the most critical oversights have been the investments’ environmental impacts and their effects on sustainable development.

In all of the new member states environmental authorities are responsible for the environmental aspects of development planning, but the actual planning and disbursement of funds is controlled by ministries of economy, finance, or regional development. The extent to which the investment funds help or hurt the environment depends on the capacity of the environmental authorities to participate in the process. This includes development and evaluation of plans and programmes, the setting of priorities and measures for funding, developing criteria for selecting and monitoring investments, project appraisal, and more. Environmental authorities must not only make sure they get adequate investments for environmental projects, but that EU investments in all spheres avoid negative impacts on the environment and promote sustainable development.

Huge challenge

The magnitude of this challenge led the REC to organise a conference in May with support from the EU PHARE programme and the Italian Ministry for Environment and Territory. The conference brought together environmental and development authorities, along with key environmental NGOs from the new member states, to examine the environmental aspects of the Structural Funds and the Cohesion Fund. Conference speakers included representatives of the European Commission, REC experts, and officials from new as well as old EU member states. Speakers presented challenges and good practices in dealing with all aspects of the funding cycle. The final conference session was devoted to the outlook for the future and the ongoing reform of cohesion policy for the 2007-2013 funding period.

Environmental authorities’ lack of time and staff to properly address environmental issues in the time allowed by the funding cycle was one of the main issues. Exacerbating matters is the popular perception that environmental authorities need only to oversee projects with environmental objectives. Good examples from Italy and Finland showed ways to overcome the challenge through establishing networks of environmental partners and using the Structural Funds themselves to hire and train environmental experts. Another strategy was to use exante assessment to open the process up to outside economic and social partners, and to improve the quality of the plans and programmes from all perspectives. The assessment of plans and programmes for cohesion policy funding in the upcoming period will be subject to the Strategic Environmental Assessment Directive of July 2004, so this will be a useful tool for environmental authorities.

Conference participants recognised the need to form networks at an international level, not only to share experience and best practices, but also to help environmental professionals raise the profile of environment and sustainable development issues within each member state. The first step will be the re-launch of the environmental experts’ coordination group by the EC DG Environment; this is scheduled for September 2004. Depending on demand, other events could be organised, including working meetings on specific issues and capacity-building activities.

Jennifer McGuinn is head of the REC’s Environmental Policy and Local Initiatives Programme. More information about the conference is available at www.rec.org.