European Focus #16, 2012

Europeanizing Environmental Impact Assessment in Ukraine Katerina Malygina After joining the Energy Community in 2011, Ukraine committed itself to harmonizing its environmental assessment procedure with the European standard by the end of 2012. To do this, Ukraine has to implement the EU directive on environmental impact assessment into its legislation. However, following the liberalization of investment policy in 2011 the environmental assessment was virtually abolished in Ukraine. Therefore, not only its international obligations, but also the ecological security of Ukraine is under threat now. This policy brief presents the European model of environmental impact assessment, which Ukraine needs to implement, and analyzes Ukraine’s compliance status to the mentioned EU Directive.

How to provide both energy and environmental security Ukraine is on the verge of significant changes in its energy policy. For the first time the government is paying due attention to environmental issues in its revised Energy Strategy of Ukraine to 2030. Along with investments in traditional energy sources, significant investments in energy efficiency and “green energy” are planned. On the one hand, this policy corresponds to the priorities in the energy policies of developed countries. On the other hand, the coordination of energy policy with the principles of environmental safety remains neglected.

A new energy policy must meet the European model

In order to guarantee both energy and environmental security and ensure sustainable development, Ukraine needs to introduce the European model of environmental assessment, a good balance between a liberal investment policy that does not consider environmental effects and an overcomplicated permitting system. Moreover, after joining the Energy Community in 2011, Ukraine committed itself to harmonizing its environmental assessment procedure with the European standard by the end of 2012.

In 2011, due to the liberalization of investment policy in Ukraine, the national system of environmental impact assessment (EIA), known as the state environmental expertise (SEE), was virtually abolished. The liberalization of investment policy was justified by the fact that the bureaucratic licensing system contributed to corruption and inhibited the potential for innovation in the private sector. However, the licensing system which emerged after its simplification along with some recently approved measures in the energy sector are not conducive to ensuring environmental security.

Ignoring environmental security in energy is unacceptable

For instance, with the goal of strengthening the country’s energy security, the Ukrainian government introduced measures to increase coal and shale gas production yet did not include environmental principles: • The revised Energy Strategy envisages significant growth in the production of coal, which is known to have, when combusted, a negative impact on the environment. Due to a closed and non-transparent Strategy review process, ways to minimize the environmental risks of such an

European Focus, #16, 2012

increase in coal production are not publicly discussed. There is the danger that the environmental effects of growing coal extraction and production will not be taken into account during the actual implementation of the Energy Strategy, which will consequently lead to widespread environmental degradation. • The government takes the same approach to developing shale gas as it does to producing coal. In 2011, the Lviv regional council refused to give approval for the development of the Olesko shale field due to lack of information on environmental threats. In November 2011, the Ukrainian Parliament amended the legislation on production sharing agreements and removed the local community from decision-making on granting mining permissions. Fearing protests like those in France or Bulgaria, where the government eventually barred exploration of shale gas by fracking, the Ukrainian government decided not to bring this issue up for public discussion. Such actions are, however, a direct violation of the Aarhus Convention on the protection of environmental rights, ratified by Ukraine in 1998. Ukraine will face increasing costs for each year that it delays introducing the European model of environmental assessment. The country will require significant investments in the modernization of energy infrastructure in the coming decades. If the principles of ecological safety are neglected, the results of such investments will cause great environmental damage. In the past, the failure to fully implement the commitments of the Aarhus Convention and Espoo Convention tarnished the international image of the country. Today, the same inaction may cause Ukraine to lose voting rights and be excluded from meetings in the Energy Community. Moreover, the Agreement on a Free Trade Area (FTA) with the EU includes the requirement to introduce the EU environmental norms and standards into Ukrainian legislation. Therefore, the adoption of the European model of environmental impact assessment is not only a part of Ukraine’s obligations in the Energy Community, but also a precondition of a future FTA with the EU.

Shaping a European Vision for Ukraine

Environmental impact assessment: the European model The EIA framework was first developed in Europe in the late 1980s with the adoption of Directive 85/337/EEC which has since undergone significant changes. In December 2011, all changes were codified into a single Directive 2011/92/EU. This Directive defines the minimum requirements to be implemented by Member States. It includes a list of projects subject to EIA, the main responsibilities of developers, the minimum content of an EIA report, competent authorities’ powers, and the necessary conditions for public participation. The EIA Directive does not, however, set standards for monitoring the implementation of a developer’s obligations at the post-project stage or fixed timeframes for granting development consent.

Scope The EIA procedure in the EU applies to public and private projects in various sectors. In particular, it includes 43 specific types of projects with clear boundary values for which an EIA is required (see Annex I), and 87 projects for which the feasibility of an EIA depends on the decision of the authorized body or bodies (see Annex II). In the energy sector, the EIA is mandatory to such projects as overhead electrical power lines, thermal and nuclear power stations, crude oil refineries, gas and oil pipelines, installations for storage of petroleum and petroleum products, and extraction of petroleum and natural gas.





In Europe, EIA first appeared at the national level in the early1970s. It acquired the status of European law in 1985 with the adoption of Directive 85/337/EEC. Since then, this Directive has been modified three times, in 1997, 2003 and 2009. According to the Energy Community Treaty, Ukraine is obliged to implement the primary Directive 85/337 / EEC and its two amendments – Directive 2003/35/EC and Directive 97/11/EC.



European Focus, #16, 2012

The EIA procedure

The EIA procedure in the EU is part of the development consent procedure

On the whole, the EIA procedure in the EU is part of the development consent procedure which includes the following steps and ends with issuing a building permit:

1. “Screening” – determining whether an EIA is required (only for projects in Annex II); 2. “Scoping” – defining the specific content and scope of the EIA report; done at the request of the developer; and, in some countries, it is required for each case; 3. Providing the competent authority with the EIA report, which covers direct and indirect impact of the project on human health, all elements of the environment, material assets and cultural heritage and the interaction of these factors. One of the main points of the report is to provide alternatives to the project. In addition, the report should also include a nontechnical summary of each point; 4. Informing and consulting with the public and environmental authorities; 5. Decision-taking by the competent authority, after having considered the results of consultations; 6. Informing the public about the decision and possible judicial review of the decision by citizens.

The EIA Directive emphasizes public participation at the early stages of the EIA procedure and requires sufficient timeframes for such consultations. The following information should be made available to the public as early as possible:

The EIA Directive emphasizes public participation at the early stages of the EIA procedure

• the request for development consent, • the fact that the project is subject to the EIA procedure, • details on the authorities responsible for decision making and information as to how to submit comments, • details on time, place and means of publication of relevant information, • details on the arrangements for public participation. Other authorities competent in the field of environmental protection should also be involved in the EIA procedure. Each country defines on its own which environmental agencies participate in the consultations. All consultations conducted during the EIA procedure should be considered when making the final decision on granting the development consent. Finally, the EIA Directive calls for complete transparency and publicity of the EIA procedure. In particular, the following information is to be made public:

Consultations with stakeholders An important step in the European EIA procedure is engaging various stakeholders in decision-making and holding consultations with them. In addition, the EIA Directive provides for consultations with the public and other Member States in case of potential transboundary impact. Moreover, the provisions of the EIA Directive are fully consistent with international conventions such as the Espoo Convention (on Environmental Impact Assessment in a Transboundary Context) and the Aarhus Convention (on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters).

Shaping a European Vision for Ukraine

• Decision for requiring an EIA as a result of screening, • the EIA report, • Information on the development consent, which includes 

text of the decision,



the reasons and considerations underlying the decision,



the results of public consultations,



a description, where necessary, of planned measures to mitigate possible negative effects of the project.



European Focus, #16, 2012

Ukraine’s compliance status to the EIA Directive Scope Until 2011, Ukraine had a system of environmental assessment that it inherited from the Soviet Union, but modified through new national legislation. The system subjected to environmental assessment not only the project documentation, but also programs and plans, and a number of other decisions which could cause a negative impact on the environment. As a result, Ukraine conducted about 6,000 environmental assessments annually, which is dozens of times higher than in Western Europe. Legislative innovations in 2011, including the Law of Ukraine “On Regulation of Urban Development”, fundamentally changed the development consent procedure while also having a significant impact on the institution of environmental assessment in Ukraine. For instance, the main requirement of the EIA Directive, project documentation, was withdrawn from the Law “On environmental expertise”.

Changes to the development consent procedure in 2011 had a significant impact on the institution of environmental assessment in Ukraine

Currently, the requirement for EIAs in Ukraine only applies to a list of activities and objects with high environmental hazard (Resolution of the Cabinet of Ministers of Ukraine №554 from 27.07.1995). As of beginning of 2012, the list includes 22 very general cases as opposed to the specific projects listed in the EIA Directive. Thus, there is a need to bring Ukraine’s list into accordance with the lists in Annexes I and II of the EIA Directive.

The EIA procedure Ukraine’s Law “On Regulation of Urban Development” adopted in 2011 introduced a new, much simplified development consent procedure. New requirements, however, were not brought into line





See UNECE (2007): Environmental Performance Reviews. Ukraine. Second Review, p. 35 (http://www. unece.org/fileadmin/DAM/env/epr/epr_studies/ Ukraine%20II.pdf).

Shaping a European Vision for Ukraine

with the EIA Directive, which is part of the development consent procedure in the EU. Furthermore, these changes created a legal conflict that gives the Ukrainian government the opportunity to manipulate any proceedings. The question remains unclear as to whether environmentally hazardous projects should undergo a SEE/OVNS procedure, Ukraine’s version of an environmental assessment. On the one hand, this requirement is still embedded in the law “On Ecological Expertise”. On the other hand, the need for a SEE is not specified in the law “On regulation of urban development”, under which all construction projects are subject to the new development consent procedure. Thus, formally the old procedure of EIA, that more or less meets the requirements of the Aarhus Convention and the EIA Directive of the EU, is still there. The Ukrainian authorities could therefore report partial fulfillment of its international obligations, but in practice they would use a new development consent procedure which virtually ignores these international legal documents.

The old development consent procedure Before 2011, the SEE was part of a comprehensive state (then investment) expertise that all construction projects had to pass before their approval. The scope of the SEE was then narrowed to activities and projects with high environmental hazard as listed in the relevant Resolution of the Cabinet of Ministers mentioned above. Environmental assessments in Ukraine are carried out in two phases. First, the developer prepares OVNS materials as part of the project documentation. Then, the developer gets a positive decision from the SEE, which is based on a consideration of the OVNS. Implementation of projects without the SEE endorsement is strictly prohibited. In the case that an endorsement is denied, the developer has the right to send the EIA materials for a revision

Environmental assessments in Ukraine are carried out in two phases, whereas there is only one stage of the EIA in the EU





In Ukrainian “derzhavna ekologichna ekspertyza” is also translated as “state environmental expert review”.



European Focus, #16, 2012

once the concerns from the previous decision have been addressed. The SEE endorsement is valid for three years from the date of issue. This means that if construction does not start during this period, the whole procedure would need start all over from the beginning. The difference between this and the European model of environmental assessment is as follows: 1. There is only one stage of the EIA in the EU which, in content, mostly corresponds to the Ukrainian OVNS. At the same time, there is no such stage as the SEE endorsement in the EU; 2. The EIA procedure in the EU is not as permissive as in Ukraine. Regulatory authorities in the EU are not obliged to draw any conclusions from the findings of the EIA. They only take into account the results of the EIA procedure, including results of consultations; 3. There is a different understanding of the role of the competent authority in the field of environmental assessment in Ukraine than in the EU. The competent authority in Ukraine is the one that decides the SEE endorsement, i.e., an eco-expert unit of the Ministry of Environment and Natural Resources of Ukraine. The competent authority in the EU is, however, the body that entitles the developer to proceed with the project (for example, by issuing a building permit) and is not necessarily the environmental authority; 4. Instead of a flexible mechanism of consultations with other authorities as in the EU, the Ukrainian SEE/OVNS procedure stipulates a stricter approval of the OVNS materials with a number of bodies, namely the Ministry of Health, State Service of Mining Supervision and Industrial Safety and the State Office of Fire Prevention at the Ministry of Internal Affairs. This means that the EIA materials have to pass three timeconsuming extra reviews that check compliance with sanitary and hygienic standards as well as occupational and fire safety

The model of Ukrainian EIA that was in place before 2011 fulfills partly the requirements of the EU Directive

Shaping a European Vision for Ukraine

requirements, which complicates the whole process of environmental assessment. Despite these differences, the described model of Ukrainian EIA fulfills partly the requirements of the EU Directive and provides even more strict environmental control. In practice, however, the complexity of the procedure encourages corruption and discourages investment.

New development consent procedure Beginning in 2011, construction projects are now divided into categories of varying complexity to which the various development consent procedures apply. The project documentation for more complex objects (IV-V level of complexity), as opposed to simple ones (I-III level), are subject to mandatory environmental assessment, which is now conducted by expert organizations of different ownership forms that meet the criteria set by the Ministry of Regional Development, Construction and Housing. The project documentation of the projects that could have high environmental hazard and/or the possible transboundary impact should include the OVNS materials. The developer determines the expert organization that will conduct the review. The review results in a report that contains information about compliance with occupational, environmental, fire safety, emergency planning, nuclear and radiation safety requirements. At the end of the process, the developer of complex construction projects should get a construction permit. Such a permit is considered to be issued if no endorsement is explicitly granted or if no refusal is issued during a defined period following the formal request for a construction permit. The new development consent procedure does not meet the requirements of the EIA Directive. It does require inclusion of the EIA materials in the project documentation for a number of projects as well as abolishes the SEE stage; these steps, however, do not imply instantaneous adaptation of the EU’s EIA model. Unlike the old 



The new development consent procedure does not meet the requirements of the EIA Directive

In the case of simple construction projects such authorization is not necessary.



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method, the new procedure does not involve any stakeholders, such as the public or environmental authorities, in the EIA process. It also does not contain a requirement on the mandatory publication of the decision to grant or refuse a construction permit as required by the EIA Directive. Moreover, the role of a competent authority which issues construction permits was marginalized. In case there was no action taken by the authorities after a certain period of time, a building permit is considered to be issued automatically. This creates not only new opportunities for abuse, but also increases the likelihood of complete disregard of any building standards, including standards of environmental safety.

Consultations with stakeholders There are significant problems in Ukraine with ensuring consultations with stakeholders in accordance with the requirements of the EIA Directive. This is equally true both before and after the 2011 legislative changes. Formally, the legislation ensures public participation in the SEE/OVNS procedure. However, due to the current poorly defined status of the SEE, there is a threat that the public would be completely excluded from the decision-making process regarding the construction of environmentally hazardous projects. The new development consent procedure, as already noted, provides no requirements for public consultations. In addition, the legislation contains loopholes that lead to practical problems with ensuring the rights of citizens to participate in making environmentally significant decisions and sometimes it completely disregards these rights. The Meeting of Parties of the Aarhus Convention has been calling for the elimination of these gaps for more than a decade now. In 2011 the government introduced new Rules on Public Involvement in discussions about environ



Public participation in making environmentally significant decisions is provided by the Laws of Ukraine “On Environmental Protection”, “On Ecological Expertise”, in the State Building Code (DBN A.2.2-1-2003) and the Rules of Public Involvement in discussions about environmentally significant decisions from 29.06.2011.

Shaping a European Vision for Ukraine

mentally significant decisions. However, according to stakeholders, they do not provide for adequate public participation. The main problems concern how information is disseminated regarding when public consultations will begin as well as with providing clear and reasonable timeframes that allow stakeholders time to become familiar with OVNS materials. There were repeated instances when information about the beginning of public consultations was “backdated” and published only after a SEE endorsement was received. Although the new Rules of Public Involvement set specific timeframes, the “timing” does not refer to clearly specified stages, making the whole process of public consultations confusing. The EIA Directive, as already noted, pays special attention to the matter. Furthermore, Ukraine does not duly provide publicity for the environmental expertise, though it is enshrined in its legislation. The SEE decisions are being classified, and access to OVNS materials is limited, which makes the whole process of environmental assessment opaque.

Ukraine does not duly provide publicity for the environmental expertise, though it is enshrined in its legislation

Finally, the issue of EIA in a transboundary context remains almost unregulated in Ukraine. Ukrainian legislation neither determines the type of activities that may have transboundary effects nor the procedure for consultations with affected countries and their respective publics in cases when an environmentally hazardous project with transboundary effects will be constructed.







The following information should be made public: Statement of Intent (“Zayava pro namiry”) at the preinvestment study stage (Section 1.6 of the State Building Code DBN A.2.2-1-2003), Statement of environmental effects of activity (“Zayava pro ekologichni naslidky diyalnosti”) (Art. 15, 35 of the Law of Ukraine “On Ecological Expertise”) containing the summary of the OVNS materials and published before the SEE, and the SEE decision (“vysnovok derzhavnoi ekologichnoi eksepryzy“) (Part 2 of Art. 10 of the Law of Ukraine “On ecological Expertise”). Positive step in this regard was a judgment in favor of Lviv ICO “Environment-People-Law” at the end of 2011. The court ordered the Ministry of Ecology to publish over a thousand decisions of the state ecological expertise on the Internet. Such cases, however, are rare in Ukraine.



European Focus, #16, 2012

3. Provide for the scoping stage and the nontechnical summary of EIA reports in the state building standards relating to the EIA procedure. 4. Provide for mandatory consultation with environmental authorities before granting development consent.

European and Post-soviet Approaches to the EIA The permissive character of the EIA, to which Ukraine is accustomed, reflects the Soviet logic of environmental review as it concerned an almost completed project. SEE’s refusal of endorsement automatically prohibits a project’s construction, thus stressing the incompatibility of economic growth and environmental protection. Sending the same project for revision is also an ineffective solution as it increases the cost of the project.

Make appropriate changes to the Laws of Ukraine “On Regulation of Urban Development”, “On Environmental Protection”, “On Ecological Expertise” 5. Provide for public participation at the initial stage of the EIA procedure (i.e., at the scoping stage and at the stage preceding the publication of the EIA report) in the Rules of Public Involvement in discussions about environmentally significant decisions adopted on 29 June 2011.

The European approach to the environmental review is different from the post-soviet one. It is based on the concept of sustainable development, which posits a trinity of economic, social and environmental spheres. In the process of decision making, all three elements are considered in a balanced manner and not as opposed to each other. The EIA process starts at the earliest stages of project preparation and continues throughout the whole design process. The basic idea of environmental impact assessment in Europe is not to justify a previously taken decision, but to find the most environmentally and socially acceptable decision. This is shown in the consultations with the public and other stakeholders held before a final decision on project’s construction is made.

Set the beginning of the meetings to determine scope of work after the publication of the Statement of Intent, and the beginning of public hearings after the publication of the EIA draft report. Make appropriate changes to the Laws of Ukraine “On Regulation of Urban Development”, “On Environmental Protection”, “On Ecological Expertise”. 6. Develop and approve an EIA procedure for a transboundary context.

Recommendations In general, to comply with the requirements of the EIA Directive, Ukraine needs to: 1. Eliminate the legal conflict that concerns projects with high environmental risk by determining the procedure for their EIA. This means either to refer explicitly to the SEE procedure in the Law “On Regulation of Urban Development” or to remove the projects with high environmental risk from the list of SEE objects in the Law “On Ecological Expertise”. 2. Approve the list of objects that require the EIA in accordance with Annex I of the EIA Directive. Establish the procedure for screening objects listed in Annex II of the EIA Directive. Make appropriate changes to the list of types of activities and objects with high environmental hazards (Resolution of the Cabinet of Ministers of Ukraine №554 from 27.07.1995).

Shaping a European Vision for Ukraine

Make appropriate changes to to the Laws of Ukraine “On Regulation of Urban Development”, “On Environmental Protection”, “On Ecological Expertise”. For effective implementation of European standards in Ukraine, it is not enough to bring only the legal aspects into compliance. Institutional and human resource performance should also be improved. In particular, there is a need to update the EIA methodology which was developed mainly in the Soviet period and usually does not contain information on current risks and technologies. This in turn means the need for instituting the appropriate training of



DBN A.2.2-1-2003 “Structure and Contents of Environmental Impact Assessment (OVNS) in the design and construction of plants, buildings and structures.”



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experts. A publication of good practices examples in the EIA would provide experts with material for effective benchmarking. Adequate public participation in the EIA procedure is key for implementing the EIA Directive in Ukraine. Environmental NGOs, for example, can conduct an awareness campaign among the population in order to educate citizens about their environmental rights and ways to protect them.

Examples of the EIA in Ukraine According to the European Model Example I In October 2010, Ukraine signed an agreement with the EBRD for a loan amounting to 450 million euros for the construction of a 750 kW Zaporizhzhya nuclear power plant airline substation at Kakhovs’ka. One of the loan requirements mandated that an EIA be conducted in accordance with the EBRD Environmental and Social Policy. The preparation of the EIA report lasted almost a year - from March 2009 to January 2010 Schedule of public consultation and disclosure: PHASE I: SCOPING – April 2009

The practice of environmental assessment according to the European model already exists in Ukraine. The EIA is part of some foreign donors’ requirements to obtain funding for certain projects. For instance, the World Bank and EBRD adhere to such policy. Hence, there are already preconditions for successfully implementing the European EIA model in Ukraine and thus meeting its international commitments.

Example II In late 2012, Ukraine plans to obtain a loan from EURATOM and the EBRD in the amount of 800 million euros for a nuclear power plant safety upgrade project (SUP). The SUP was designed by the Ukrainian state nuclear operator NEC “Energoatom” and takes into account all recommendations issued in the final report of the joint project by EC and IAEA. Schedule of public consultation and disclosure: PHASE I: SCOPING • Publication of Statement of Intent – 2010 • Publication of Stakeholder Engagement Plan 26/04/2011

• Completion of “Scoping” and “Public Consultation and Disclosure Plan”

• Sending out invitations to public scoping meetings - from 26/04/2011

• Notice of disclosure and public scoping meetings

• Public scoping meetings – 10/05–18/05/2011

PHASE II: PUBLIC SCOPING MEETINGS – April – July 2009 • Preparation of a draft of the ESIA Report

• Publication of scoping meetings summaries – before 30/05/11 PHASE II: PUBLIC CONSULTATIONS ON THE EA REPORT

• Publication of the draft of the ESIA Report

• On-line resume of the EA report- 01/06/2011

• Notice of public hearings

• Establishing information centers - 01/06/2011

PHASE III: PUBLIC HEARINGS – July – November 2009 • Publication of the ESIA Report, taking comments into account (120 days) • The final version of the ESIA Report Source: www.ukrenergo.energy.gov.ua/ukrenergo/ document/66094

Shaping a European Vision for Ukraine

• Publication of the draft of the EA report – before 15/06/2011 • Public consultations – 19/07-27/07/2011 • Publication of the final version of the EA report – 07/10/2011 Source: http://www.npp.zp.ua/files/Plan.privl.storon.final. ua.pdf



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List of abbreviations SEE – State environmental expertise EIA Directive – Directive 2011/92/EU that codifies Directive 85/337 / EEC, 97/11/EC, 2003/35/ EC and 2009/31/EC EIA – environmental impact assessment

EIA – environmental impact assessment (to indicate the EU procedure) OVNS – environmental impact assessment (to indicate the Ukrainian procedure) ESIA – environmental and social impact assessment

EA – Environmental Assessment FTA – Free Trade Area Espoo Convention – Convention on Environmental Impact Assessment in a Transboundary Context, signed at Espoo (Finland) on 25 February 1991

Aarhus Convention – Convention on Access to Information, Public Participation in Decisionmaking and Access to Justice in Environmental Matters, signed at Aarhus (Denmark) on 25 June 1998

Katerina Malygina – OSI Fellow at the International Centre for Policy Studies and PhD student at the Research Centre for East European Studies, University of Bremen (Germany). European Focus is an ICPS a periodical that raises debate on key issues of European integration for Ukraine, EU policy towards Ukraine, and other important issues connected to Ukraine’s European ambitions.

e-mail: [email protected] www.icps.com.ua

Shaping a European Vision for Ukraine