Slovakia: The Dirty Environment Ministry

PM Fico: Pressure to clean up environment ministry

The appointment of the fourth minister of environment in three years highlights the problems with the environmental agenda in the Slovak Republic. The coalition agreement after the 2006 elections left the Ministry of Environment in the hands of the Slovak National Party (SNS) but since then, a number of scandals and the mismanagement of public finances have led to the dismissal of three SNS ministers. With less than a year until election, the SNS party has agreed that the environmental affairs will now be in the hands of the largest governing party SMER, represented by the deputy governor Mr Caplovic.

While a change in key personnel in the ministry will go down well with the voters, it will do little to deal with the shortcoming in the way public money is used by the ministry of environment. Without institutional reform of the rules in order to increase transparency and limit scope for corruption and clientelism, problems are likely to persist.

The environmental fund which falls under the competence of the Slovak environment ministry is a good example. Financial support from the fund is allocated to support green technologies and energy efficiency. However, the rules governing the process of allocating government aid are vague. This leaves too much scope for discretion in the allocation of funds to officials and has created a political pork barrel. When Mr Izak, the second SNS environmental minister, was in office, government subsidies worth half a million euros for the purchase of solar panels from the environmental fund were received by persons close to the SNS party and employees of the ministry. Mr Izak was dismissed in August 2008, as a consequence of the affair.

In the largest environmental scandal made public, the environmental ministry under Mr Chrbet signed a contract in 2008 with a little known company for the sale of Slovak CO2 emission quotas. These were priced at 5 euro a ton of CO2 emissions, half of what neighboring countries were charging. The ministry effectively lost 30 million euro on the deal, as the Slovak emission quotas were later bought by the Tokyo Electric Power Company for a higher price, according to the Slovak newspaper TREND. This is quite a large sum for a ministry with a budget of 323 million euros for 2009. In this case, it is the discretionary power of ministry officials and lack of transparency rather than the public procurement rules which help explain how the controversial deal could have been concluded. While Mr Chrbet was dismissed in May 2009, the ministry refused to publish the full terms of contract until June 2009.

The third SNS environment minister, Mr Tursky, was dismissed for an overpriced public procurement tender. During the tender, the ministry excluded two cheaper offers for formal complains thus having to accept the most expensive one. An additional 27 million euro could have been saved.

The new minister, Mr Caplovic, has vowed to clean up the environment ministry and cancel some of the controversial deals. With the elections scheduled for June 2010 there will be quite a lot of pressure to live up to these promises. The overpriced public procurement tender has been cancelled and a number of senior officials in the ministry dismissed. However, institutional reforms to prevent similar problems in the future will be left for the next government.