Last but not least: the Sustainable Development - the challenge to the Eastern Partnership

Last but not least: the Sustainable Development - the challenge to the Eastern Partnership

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Last but not least: the Sustainable Development - the challenge to the Eastern Partnership

Background Information

Since the early 1990s Georgia has been actively cooperating with the European Union. The EU-Georgia Partnership and Cooperation Agreement, which defined the key trends of the EU-Georgia relations, came into effect in 1999. Shortly after, the country declared integration with and ultimately accession to the European Union as a key priority for Georgia's foreign and domestic policy in a Parliamentary Resolution on March 28, 2003. In 2006 the EU-Georgia European Neighborhood Policy Action Plan was adopted, which sets out the strategy and priority trends of cooperation up to 2013. Talks on an Association Agreement (AA) and Deep and Comprehensive Trade Area (DCFTA) with Georgia were launched in July 2010 and successfully finalized in July 2013. It is expected that the agreement will be initialed during the Eastern Partnership Summit in Vilnius in late November 2013 and signed in 2014.

On 7 March 2013, another resolution passed unanimously by parliament reiterated Georgia's commitment to its pro-Western foreign policy course. The document says that "Integration into the European and Euro-Atlantic structures represent the main priority of the country's foreign policy course. For the purpose of achieving the strategic priority of achieving membership of the European Union and the North Atlantic Treaty Organization, Georgia will take further steps to build and strengthen democratic institutions; establish a governance system based on the principle of the rule of law and the supremacy of human rights; and ensure the irreversibility of sustainable economic development. Georgia will not join such international organizations whose policies contradict these priorities". The resolution also states that "Georgia's European and Euro-Atlantic foreign policy course, first and foremost, serves the sustainable democratic development and the country's security".

However, the process of finalizing the AA and DCFTA has gone ahead under constant political and economic pressure exercised by the Russian Federation on Eastern Partnership countries, including Georgia. The increased pressure of the Russian Federation military in South Ossetia, through constructing barriers dividing families and private and communal properties and impeding freedom of movement has been intensified since May 2013, is one of the clearest examples of Russia’s pressure on Georgia.

Involvement of Civil Society in EaP

In general, the Eastern Partnership has a great potential to ensure civil society involvement in decision-making, implementation and monitoring of ongoing reforms in EaP countries. It includes creation and support of the EaP Civil Society Forum, as well as National Platforms in EaP countries. The later ones, after the signing of the AAs between the EU and the respective countries, will be officially involved in setting and monitoring the Association Agenda. The communication "A New Response to a changing Neighborhood" (2011) reinforces that deep and comprehensive democracy can be achieved only through partnership with the societies in the respective countries, promotion of media freedom and strengthening human rights dialogues.

Therefore, the Civil Society Forum and National Platform representatives also receive observer status in EaP thematic platforms meetings, while communication between respective EU institutions and National Platforms significantly improved.

In addition, the communication on a "future approach to EU budget Support to third countries" (2011) underlines the role of Civil Society organizations in partner countries, stressing that "support involves policy dialogue, financial transfers to the national treasury account of the partner country, performance assessment and capacity-building, based on partnership and mutual accountability." That gives quite a good impetus to ensure increased public participation in EaP countries in the preparation of new Single Support Framework (SSF) 2014-2020, that sets the priorities for the EU and member states for respective countries. It should be emphasized that the process led by the EU delegation in Georgia was extremely participatory and involves consultations with different civil society organizations from the early stage of SSF preparation.

Essentially, the EC National Indicative Program for Georgia (2010-2013) underlines the need for policy dialogue between the government of Georgia and civil society organizations. However, this cannot be achieved only through Commission efforts and requires open political will from the side of the government. The Georgian government after the parliamentary elections of October 2012 has shown a more open approach in this regard than its predecessor.

A number of the platforms were set with support of the European Union even before 2012. These include the Interagency Council on Criminal Justice Reform, a human rights dialogue, a civil advisory unit created by the State Ministry for European and Euro-Atlantic Integration. However, the platforms stepped up their activities and started ensure a broader and more participatory approach only after parliamentary elections 2012.

Despite the fact that the forms and methods of communications vary from ministry to ministry, a number of the trends are quite visible. Civil society engagement is very high in the areas of defense and security, EU integration, justice, healthcare, agriculture, and the environment, while in some cases the government tries to go beyond civil society organizations and experts, and to consult the broader public, for instance local government reforms include active local consultations run by the Ministry of Regional Development.

However, there are still a number of areas where civil society engagement is still very low and limited mainly to economic development and the energy and transport sector. While the public is free to express their opinions, public input has not been considered as important either in the plans to build dozens of large hydropower plans or in the case of preparation of socio-economic development strategy for 2014-2020.

Sustainable Development

The intended signature and development of the Association Agenda will setup for Georgia a legally binding framework for harmonization of the EU Acquis in various areas, including environmental protection and sustainable development.

During the last few years European Union has increased transparency and public participation in the planning, implementing and monitoring of actions and policies directed towards EaP countries, as well as increased attention to integrating environmental issues both in national and regional cooperation programs. There are a number of sectors where numerous achievements were made through EU involvement, including the judiciary, the Public Registry, human rights, food safety and some other areas. However, Georgia has a long way to go before it achieves the EU Acquis requirements, especially in the field of sustainable development.

The EaP flagship initiative on Environmental Governance is aimed at promoting the availability of reliable environmental information, stakeholder awareness and involvement, as well as promoting environmental assessments and avoiding unintentional negative impacts in other policy sectors. This can be achieved based on the following:
• Development of the Shared Environmental Information System (SEIS), coordinated by the European Environment Agency (EEA).
• Strengthening of capacities to ensure stakeholder involvement, environmental assessment and reporting, on the basis of the EU experience and legislation, Aarhus  and Espoo Conventions

The assessment of the flagship initiative on Environmental governance in Georgia  revealed a lack of progress towards achieving good environmental governance mainly due to the permanent reformation of the environmental governance system in recent years. This entails a neglect of environmental concerns when making important decisions.

During recent years, despite undertaking commitments  Georgia has failed to develop a Sustainable Development Strategy that would ensure the integration of sustainable development issues in different sectors of the economy. This has taken a place against a backdrop of weakened environmental legislation and administrative control and resources as a result of the 2011 restructuring of the ministry of Environment and Natural Resources (which include the closure of the environmental inspectorate). Frequent structural changes, fear of reforms and uncertainty about the future effectively paralyze the institutions and cause inaction, slow decision-making and reluctance to carry out routine responsibilities.

The Environmental Impact Assessment law (EIA) that has been in force since 2007 fails to comply with relevant EU directives and the Aarhus Convention, which also limits its effectiveness. The system does not ensure public participation in the environmental decision-making process; nor does it help decision-makers in taking informed decisions. In addition, in annual progress reports the European Commission has on several occasions criticized the fact that public (state-owned) projects are exempt from EIA, while the majority of the activities listed in the law can in principle be implemented only by public institutions. Furthermore, the Law on State Support for Investment makes it possible for any person to start an activity without abiding by the EIA and obtaining a permit on the condition that these obligations will be performed in the future.

The absence of a sustainable development framework and weak environmental legislation also undermines the EaP goals in the Transport and Energy sector - which involves the development of corridors to ensure energy security both for the European Union and partner countries - are primarily aimed at diversifying the energy supplies and reducing dependence on Russia, while broadening energy and economic ties with the countries of the region.

The plans involved development and support of the energy and transport corridors, diversification of oil and gas exports though a southern energy corridor, as well as electricity export from neighboring countries through already existing or newly constructed transmission lines.

Energy sector reforms

In order to ensure energy security both for EU and EaP countries, the EaP roadmap stresses the importance of ensuring the creation of "a transparent and stable regulatory and market framework, which would attract investment, increase competitiveness", "regulatory convergence with EU law," facilitate a reform of the energy sector of each EaP country to "make them more transparent, efficient and sustainable."

On January 2013, Georgia submitted a full membership application to the European Energy Community. The country was granted observer status in the European Energy Community (EEC) in 2007 and it undertook obligations under the ENP Action Plan. It has not yet fulfilled its commitments, however, and there was little progress towards reform during 2013. While in the EU funded programs and initiatives as INOGATE, the Covenant of Mayors, as well as USAID energy programs, some progress can be perceived, all are implemented through internationally-funded initiatives rather than country-driven initiatives.

Preliminary assessments show that in order to obtain full membership status in the EU, the country needs to develop its almost non-existent energy legislation and ensure compliance of environmental legislation with EU directives. First of all this includes approximation with EU directives on energy efficiency and renewable energy, large combustion power plants and environmental directives, including the Kyoto Protocol, IPPC Directive 96/61, EIA Directive (85/337).

It should be noted that the EU-Georgia Action Plan within the framework of the European Neighborhood Policy prioritizes not only adopting legislation on energy efficiency and renewable energy sources, but also taking steps towards elaborating an action plan for its implementation (including a financial plan) and strengthening the institutions working on these issues . However, the annual strategies for implementation of the EU-Georgia Action Plan neglect the need to elaborate legislative acts, as well as an action plan (including a financial one) for the development of energy efficiency and renewable energy sources. The situation did not change in 2013 despite numerous public claims.

In 2007-2009 Georgia introduced several measures to improve its legal and regulatory environment regarding renewable energy, mainly hydropower infrastructure development. The measures include guaranteed purchase agreements for newly built hydropower plants, simplified licensing and permit procedures for new and small hydropower generation, deregulation and the concept of fixed long-term tax breaks for renewable energy. The Ministry of Energy reasoned adopting deregulation measures was fully sufficient to ensure a free and competitive market and tariff system. Meanwhile, current energy generation and distribution in Georgia are carried out the same companies, and such a situation is not in line with EU internal market principles.

Therefore the major efforts of the Georgian government are focused on the development of energy infrastructure (transmission lines, construction of new HPPs). The development of energy infrastructure is important for the further development of the country, and the construction of the Black Sea Transmission Line  is a good example of long-term profitable energy projects. However, it is essential to support large-scale energy efficiency projects (at both the legislative and practical levels) whose implementation requires comparatively short time and which are economically effective, since they are oriented towards conserving resources.
 
Despite the fact that the country lacks an energy development strategy and action plans, and no public debates have taken place regarding Georgia's energy sector development directions, the government of Georgia tries to position the country as a future regional renewable energy hub, that would ensure the export of electricity first to Turkey and later, in 2018, to Southeast Europe.

In order to achieve this goal, the government announced the construction of more than 150 large, medium and smaller size hydropower plants (HPPs) with installed capacity of more than 5000 MW. The plans include highly controversial large hydropower cascades mainly in mountainous areas of Georgia, including the Khudoni HPP (702MW, annual output 1.5 TWh) on the Enguri River, the Nenskra cascade (600 MW), the Namakvani cascade (450 MW, annual output 1.6 TWh), etc. The planned projects do not comply with the principles of sustainable development and they may have serious negative impacts on the environment, drastically change the social and demographic situation in Georgia's mountainous regions and also destroy cultural heritage. In addition, apart from the social and environmental problems related to the large dams elsewhere, it comes out that the principle of "Build, Own, Operate (BOO)", promoted by the Georgian government for HPP construction would not benefit the national budget to such an extent that it would justify the total change of landscape and devastation of the environment, to say nothing about the thousands of people that would be forced to resettle .

However, rather than ensure wider public debates around the appropriateness of construction of large hydropower plants, the government stubbornly repeated that decisions regarding the construction were already made and would not change (in situations when the EIA document is not prepared and permits are not available). Of course, that raises a significant protest movement from the side of the affected people as well as civil society organizations.

Meanwhile, issues related to the development of a long-term sustainable energy development action plan that would involve also measures to ensure the establishment of an unbundled, transparent and competitive energy market in the country. In the given circumstances, programs such as the INOGATE and the Trans-European Networks may allow and even the encourage unsustainable electricity exporters to benefit from loopholes and differences in environmental standards and to increase electricity export from the neighboring countries to the EU.

Transport

The transport sector receives less support in EaP initiatives, which according to some studies can be explained by the financial and economic problems in the Eurozone.

The ENP action plan requires that Georgia "continue implementation and refinement of the national sustainable transport policy for the development of all modes of transport and related infrastructure, as well as where an appropriate approximation of legislative and regulatory frameworks with European international standards, in particular for safety and security issues".

The EaP Roadmap 2012-2013 aims to "facilitate the transfer of EU standards in EaP countries and integrate them more deeply into the EU's transport system", to improve "transport connections between partner countries and the EU, as well as among the partner countries themselves for the benefit of passengers and operators."
Georgia still has no sustainable transport policy and there have been few EU initiatives in this area, yet significant changes have occurred in the transport sector, mainly in terms of new infrastructure projects and introduction of regulation, harmonizing Georgia's standards with international ones. This includes signature of the Joint Sky Agreement between Georgia and the EU and its member states (2010), as well as joining of the EUROCONTROL organization in 2012.

In regard to maritime transport, the major challenge is ensuring the recognition of Georgian Seafarers' Certificates of Competency (COC) by the European Union. As a result of improved seafarers' certification and training system through adopting new laws and regulations, upgrading study programs and systematic monitoring of training institutions, it is expected that by the end of 2013, the EC will come out with a positive proposal on recognizing Georgia's Seafarers certificates by Member States  .

In maritime transport, re-recognition of Georgian Seafarers' Certificates of Competency (COC) by European Union remained a top priority. On october16-25, 2012 the European Maritime Safety Agency (EMSA) conducted a re-audit of the Maritime Transport Agency and Georgian Maritime Training and Education Institutions. Based on the results of the audit, the European Commission will decide on recognition of Georgian COCs in 2013.

In regard to the land transport system, there were a number of significant improvements. These include the approval of the Highway Safety National Strategy and Action Plan, technical regulations to bring passengers and cargo motor vehicle traffic in line with international standards (with the support of the World Bank). Significant amounts of donor investment (World Bank, Asian Development Bank, Japan Bank for International Cooperation and state budget funds have been used also to improve the rehabilitation of the roads of international significance, as well as to improve the secondary road system. The latter represents the one of the top priorities of the Regional Development State Strategy for 2010-2017 prepared as the prerequisite for EU Sectoral Budget support (2012-2014), that stresses the importance of having the transport infrastructure necessary for sustainable regional development.

In regard to the highways/motorway rehabilitation/construction, almost all of them were financed by international financial institutions therefore subject to EIA requirements, which are more stringent than those of Georgian legislation, including safeguard measures related to economic and physical resettlement. Therefore the environmental impact is less. In some cases, where different sections of the road were financed by the state and others by foreign investors, there were clear double standards regarding the compensation of losses for non-registered properties.

Certain steps were taken as well to ensure the improvement and extension of railroads. Positive steps include the rehabilitation of the Akhalkalaki-Kartsakhi and Marabda-Akhalkalaki segments, as well as the construction of the new Baku-Tbilisi-Kars railroad. However, there have been a number of controversial projects, including the Tbilisi bypass railway project and the central railway rehabilitation project, that have had major negative environmental and social impacts.

The Tbilisi bypass railway project should be considered the most problematic, especially taking into account that the project has been boosted in 2010, through support of European Bank for Reconstruction and Development (EBRD), European Investment Bank and EU Neighborhood Investment Facility. It aims to construct a new railway section to bypass the transit of hazardous goods (crude oil and oil products) from the central area of the capital city. However, in reality it simply relocated the railway line to another densely populated part of the city, while posing a threat to the "Tbilisi Sea" reservoir which provides the city with drinking water. Environmental groups actively expressed protest regarding the environmental impact of the project, asking EU, EBRD and EIB not finance it. Due to the high controversy of the project, the number of complaints has been raised under EBRD project compliance mechanism and anti-corruption unit. As a result, project sponsor Georgian Railway company refused to implement environmental and social safeguards required by the Bank and refused international Banks loans. All international funders left the project in spring of 2012 .

In January 2013, the project implementation was stopped and an investigation was started by the prosecutor's office. According to the statements of Georgian Railways' new management, it would not complete the project as it not only require additional funding, but it would also increase significantly operational and maintenance costs for company (more than 30%), while wild lead towards decreased carriage trains movement due to the non-properly planned route (by 50%).

Life after the Vilnius Summit and way to Riga

In Georgia, like in Ukraine, Moldova and Armenia, civil society representatives have not been included in the EU-Georgia AA and DCFTA negotiation process, there were no formal consultations on various negotiated topics between relevant ministries and CSOs, and there was a lack of the communication with the business sector, and in general with public, about the possible impacts of the signature of AA and DCFTA for Georgia's ordinary citizens.

The EU integration Communication strategy for Georgia was prepared with significant support from the EaP Civil Society Forum Georgian National Platform and was approved by the government in September 2013. There are ongoing working meetings for drafting and implementation of the Action Plan for 2014.  According to the some statements by high level officials of the EC and the Georgian government, some parts of the AA and DCFTA will be publicized shortly after the initialing of the document. This is the foremost precondition that should be followed by wider discussions regarding the obligations undertaken by the country to assess potential socioeconomic gains and cost-benefits.

Most, if not all, of the near-term deliverables come from Eastern Partnership countries and many of the rewards, such as DCFTA, involve losses to the partners in the initial years.

Therefore, it's important to ensure the sufficient alignment between the EaP agenda and Europe 2020 objectives. It should include the EU 2020 Initiative "Resource-efficient Europe" and highlight the need to cooperate closely with key partners, including those in the neighborhood, in order to achieve a ,higher level of environmental protection and sustainable development The EC communication "New response to a changing neighborhood" itself stressed the importance of "support[ing] partner countries' adoption of policies conducive to stronger, sustainable and more inclusive growth, to the development of micro, small and medium-sized companies and to sustainable and economic growth and job creation".

The Vilnius Eastern Partnership Summit in reality will mark the start of the new charter between relations of the EU and its neighboring countries. A successful Vilnius Eastern Partnership Summit itself will be a test of the result-oriented use of EU assistance. Up to now, there has been a clear lack of coherent and consistent external policy actions when it comes to EU instruments, the European Investment Bank's involvement and bilateral assistance to the neighborhood. The "More for more" principle introduced into the European Neighborhood Instrument to increase financial support to most advanced partner countries, according to EU officials does not clearly mean "less for less". Therefore, the "More for more "principle should increase the political advantages for Georgia, Moldova and Ukraine, and ensure a transparent, participatory and democratic process for decision-making.

In order to respond to the high costs of integration and acknowledged scarcity of financial resources, it is vital to avoid the long term economic, social and environmental costs of unsustainable decisions. Therefore both the EU and partner countries ensure real implementation of the partnership principle through involvement of Civil Society at all stages of the decision-making in elaborating the country programs, and ensuring nationwide policy dialogues for successful reforms.

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