B U S I N E S S

  More needs to be done to promote good environmental practices in the business sector in the Central and Eastern European (CEE) countries and New Independent States (NIS).

  This was the message coming from the Business and Environment session attended by environment ministers from 55 countries and representatives of businesses, trade unions, NGOs and international financial institutions. Most also agreed that good environmental management means good economic practice — clear from the experience of many large multi-nationals. For example, environmental protection measures improve corporate image as well as share prices, said Hungarian Oil Company vice-president Maria Erdos.

  Several countries in the CEE region have already improved their environmental management systems and encourage the development of economic incentives that look beyond basic compliance. Still, there is a strong need for wider implementation of eco-efficiency programs, as the concept is still often perceived by enterprises as second to end-of-pipe based compliance.

  During the meeting, the need for closer cooperation with banks to implement eco-efficiency programs was recognised. Major financiers voiced strong support, including EBRD vice-president Joachim Jahnke, who noted the past work of the EBRD's teams for municipal environmental infrastructure and eco-efficiency, valued at over ECU 2 billion. "We won't let dirty industries go to CEE," he said.

  Business leaders agreed that foreign direct investments (FDI) can help facilitate transfers of helpful environmental know-how. Egil Myklebust, the CEO of Norsk Hydro, highlighted the Slovalco aluminum smelter in Slovakia, which received Western assistance in greening its old plant in 1995, as a prime example. Western direct foreign investment into the CEE/NIS region remains limited, however, because of concern over past environmental liabilities, such as chemical contamination, and the high pollution and resource intensity of industry compared to that in OECD countries. "Past environmental damage should be handled by authorities, not investors," said Myklebust.

  NGO Coalition representative Iza Kruszewska stressed that foreign investment cannot by itself lead to environmental improvements. Stressing the over-reliance on voluntary business initiatives, which cannot be a substitute for economic and legal tools, she suggested that NGOs screen FDI entering CEE countries.

  Environment ministers agreed that compliance with regulations alone would not lead to sustainable business activity. "Governments should make it easier for the private sector to implement their requirements by using instruments which in particular respond to the need for economic efficiency," said German Minister of Environment Angela Merkel.

  A major achievement of the meeting was the endorsement of the Environmental Management in Enterprises Policy Statement by ministers. The Statement lays the foundations for developing stable and predictable policy frameworks for easing future investments and promoting environmental improvement within CEE/NIS enterprises.

  At the close of the session, a suggestion was made that the European Roundtable of Industrialists (ERI), with companies employing over four million workers, and the World Business Council for Sustainable Development (WBCSD), join forces with the EAP Task Force, the coordinating body of the Environmental Action Program for CEE, to form a business advisory group. The group would organise a campaign to promote eco-efficiency and preventive environmental management in the region. "Wouldn't this be a practical outcome of this conference?" said Tom Garvey, co-chairman of the EAP Task Force.

  Garvey added that the ERI and WBSCD already practice eco-efficiency, abide by EU Directives and use environmental management systems. WBCSD Executive Director Bjorn Stigson along with WBSCD and ERI Chairman Egil Myklebust declared that they would apply EU-level environmental standards and eco-efficiency practices in their future investments. They would also share experiences with peers from the region. "CEE businessmen are not likely to pay much attention to politicians but they will listen to other successful businessmen," said Stigson.