“The Environmental Compliance Assurance System in Armenia: Current Situation and Recommendations” report has been published, which was developed within the framework of the “European Union for Environment Action” (EU4Environment) project funded by the European Union and implemented by the OECD, United Nations Economic Commission for Europe, United Nations Environment Programme, United Nations Industrial Development Organization and the World Bank. The report was drafted by Ms. Olga Olson (OECD).
The draft review was presented and discussed with stakeholders from Armenia during a virtual discussion on 28 June 2021, and revised following their written comments. The revised draft review was then presented and discussed at the second virtual regional seminar with Eastern Partner countries on 17-18 November 2021, and further refined following the discussion and the written comments received. This report takes stock of Armenia’s environmental compliance assurance system, identifying gaps and recommending improvements where possible.
Key findings
Legal and permitting framework
• Armenia has most of the laws needed to address its environmental problems. Regulations set out emission thresholds for which media-specific permits are required, as well as maximum allowable concentrations for certain pollutants.
• Permitting is being digitised.
• Armenia signed a Comprehensive and Enhanced Partnership Agreement (CEPA) with the European Union that covers environmental issues and is stimulating legislative reform. In addition, it has adhered to 20 international agreements, which are reflected in national environmental legislation.
• Although Armenia’s environmental regulatory framework is comprehensive, it would benefit from review.
• Armenia holds public consultations on draft environmental laws and has improved transparency, especially with regards to the mining legislation.
Institutional framework for environmental compliance assurance
• The key institutions for environmental compliance assurance in Armenia are the Ministry of Environment, which develops policy; issues and revokes permits; and carries out overall supervision; the Environmental Protection and Mining Inspection Body (EPMIB), which ensures performance control for environmental and subsoil safety legislation; and the Inspection Bodies’ Co-ordination Bureau within the Office of the Prime Minister (PMO), which co-ordinates the EPMIB’s activities.
• Having the EPMIB report to the PMO rather than the Ministry of Environment is unique and could increase the EPMIB’s visibility. Nevertheless, the EPMIB and the ministry stand to gain from more regular communication and co-ordination.
The environmental compliance monitoring regime
• Various channels for monitoring environmental compliance include planned risk-based inspections; ad hoc inspections; ambient monitoring; self-monitoring; independent monitoring by the public and non-governmental organisations (NGOs); and consideration of alerts received through written applications, hotlines or social media.
• The risks of permitted entities are based on a methodology adopted in 2019, which allows the EPMIB to maintain a database on the risk assessment of all economic entities.
• The EPMIB carries out inspections exclusively by checklist in accordance with Armenia’s legislation. This is useful for inspecting uniform sites, but the number of yearly planned site inspections appears to be low.
• Although companies must submit quarterly and annual reports to the EPMIB, there is no publicly available information on self-monitoring.
The environmental compliance enforcement regime
• The EPMIB uses a wide variety of instruments in response to non-compliance with environmental regulations. These include warnings, fines, proposals to the authorised body to revoke permits, and referral of cases with high environmental damage and of criminal cases to police.
• A four-tier appeals process is in place against imposed penalties, although there are concerns over delays due to the cumbersome court procedures.
• The environmental payments regime consists of taxes on permitted volumes of emissions, which are increased for exceeding permitted pollution thresholds, and of payments for environmental damage using formulas specified in decrees to calculate fines for such damage. Nevertheless, the environmental payments regime faces challenges such as a high number of taxed pollutants and fine rates too low to dissuade polluters.
• Armenia lacks a legal framework for environmental insurance
The use of compliance promotion instruments
• The EPMIB provides most awareness-raising and training activities on environmental compliance assurance as part of its mandate. It uses social media for awareness raising, develops annual plans for awareness-raising measures, and organises meetings with economic operators, NGOs and economic unions to share information. At these meetings, the EPMIB regularly presents information on compliance with environmental requirements, as well as on liability arising from their violation. However, no details are available about such meetings on the EPMIB’s website.
• The Ministry of Environment and the EPMIB carry out some promotional activities jointly. For example, they publish information on line and co-operated on a campaign to protect Lake Sevan in 2021.
• Armenia has made progress on compliance promotion. However, knowledge of regulations, compliance assurance instruments and institutional responsibilities for environmental compliance assurance need reinforcement.
Recommendations
Legal and permitting framework
• Review the environmental regulatory framework to identify ways to make it less ambiguous and provide more incentives for companies to fully ensure compliance.
• Consider moving towards an integrated approach to permitting.
• Take into account the weight of pollutant toxicity in permit requirements.
• Enhance communication with interested stakeholders, including the private sector and NGOs, on environmental policies and permits.
Institutional framework for environmental compliance assurance
• Provide opportunities for the EPMIB to review important environmental legislative proposals, comment on new permit applications and have easy access to permits.
• Consider clarifying the duties of the Ministry of Environment and the EPMIB to the general public in regard to, for example, complaints related to environmental issues.
• Consider developing a training plan to build capacity of inspectors within the EPMIB using objective Key Performance Indicators that ideally combine both quantitative and qualitative aspects.
• Improve the EPMIB’s information management through automation where possible.
The environmental compliance monitoring regime
• The risk criteria would benefit from further simplification of risk calculation and flexibility in the risk categories.
• Prioritise the updating of capabilities and equipment of the EPMIB laboratory that participates in control and of the Hydrometeorology and Monitoring Center State Non-Commercial Organization that conducts ambient monitoring.
• Consider outsourcing some monitoring activity to the private sector and encourage the two laboratories above to co-operate more closely.
• Examine the effectiveness of companies’ self-monitoring reports that are submitted quarterly and annually to the EPMIB.
• Build a mechanism that allows the EPMIB to respond immediately to received alerts and keep track of received complaints.
• Consider drawing on the independent monitoring of NGOs to fill gaps in capacity.
The environmental compliance enforcement regime
• Adopt a comprehensive and coherent enforcement policy within the EPMIB with guidance on offences and the application of sanctions to ensure transparency and consistency of applied penalties.
• Consider making warnings, which are discretionary, the EPMIB’s lowest most appropriate response tool for non-significant harm to the environment.
• Respond to NGO concerns about lack of environmental liability for mining waste and biodiversity.
• Launch a comprehensive review of its environmental payments system to better reflect environmental harm and provide stronger disincentives to pollute.
The use of compliance promotion instruments
• Step up promotional and training activity through, for example, providing more information on line that addresses the needs of regulated entities; make use of metrics to check the use of online information.
• Review how Armenia encourages companies to adopt green practices, including the potential use of financial incentives to promote environmental compliance.
Inga Zarafyan, President of EcoLur Informational NGO, has also taken part in drafting this report.
March 18, 2022 at 17:00