Of Bulgaria and Environmentalproblems of the Black Sea A6

Home , Elhovo, Kocherinovo, Kremikovtsi, Lake Varna, Lukovit, Mizia (town)

ReportNq. 10142 Bulg:aria EnvironmentStrategy Study Public Disclosure Authorized

March1 7199'2 .Country.lYJepartmentI turope andCentral Asia Region MICROFICHE COPY Report No. 10142-BUL Type: (SEC) FOROFFICIAL USE ONLY LOVEI, L. / X32772 / H3 129/ EM5IV Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

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iW041 1, 4n Its i. ::t m1: ... * , 0' : CURRENCY EOUIVALEN1S

Currency unit - lcv (plural leva), abbrev. Lv US$1 a 18 lmva (as of November 1991)

WEIGHTS AND LMEQ

BOD biological oxygen demand mcm million cubic meters rem roentgen equivalentman - the bem billion cubic meters mg miligram a.mount of loninizing radiation dl deciliter MW Mepwatt(s) equivalent to biological effect of ha hebtare(s) pmlO particulate matter of 10 microns or one roentgen of x or gamma rays kg kilogram less ug microgram km2 square kilometer ppm parts per million m3 cubic meter r correlation coefficient

CHEMICAL COMPOUNDS

AlP3 Aluminum fluoride CS2 Copper sulfide Mn Manganese 03 Ozone As Arsenic Fe Iron N Nitrogen P Phosphorus Br Bromine GcO2 Germanium dioxide Na3 SiF6 Sodium sUicon P2 05 Phosphorus pentoxide Ca Calcium fluoride HCN Hydrocyanic acid fluoride Pb Lead Cd Cadmium Hg Mercury NaF Sodium fluoride Se Selenium C2 Chlorine HF Hydrogen fluoride NH3 Ammonium S02 Sulphur dioxide CO Carbon monoxide H2 As Arsenic hydrogen NH4 NO3 Ammonium nitrate TeO2 Tellurium dioxide CO2 Carbon dioxide H2 S Hydrogen sulfide Ni Nickel Wa4 Tungsten oxide Cr Chromium H2 S04 Sulphuric acid NO Nitrogen monoxide Y 0 5 Vanadium pentoxide CrO3 Chromium trioxide K Potassium No° Nitrogen oxide Zn Zinc Cu Copper KCI Potassium chloride NO2 Nitrogen dioxide CuuO Copper oxide K20 Potassium oxide NO3 Nitrogen trioxide

ABBREVIATIONS

AAQS Ambient Air Quality Standards CAC Command and Control COD Chemical Oxygen Demand COP Committee of Forests COG Committee of Geology CRD Center for Regional Development and Architecture CZM Coastal Zone Management ECU European Currency Unit EPA Environmental Protection Agency ESP Electrostatic Precipitators FAO Food and Agriculture Organization PEV Spirometry test measuring respiratory function IMH Institute of Meteorology and Hydrology IRG International Resources Group LAEA Intemational Atomic Energy Agency IUCN International Union for Conservation of Nature & Natural Resources MAC Maximum Allowable Corcentration MB Market Based MOA Ministry of Agriculture MORHC Ministry of Regional Development, Housing and Construction MOE Ministry of Environment MOSE Ministry of Science and Education MOP Ministry of Finance MOH Mitistry of Health MOI Ministry of Industry MOINT Ministry of Interior MOT Ministry of Transportation NGO Non-Govemmental Organization NPA Nature Protection Agency O&M Operations & Maintenance OECD Organization for Economic Cooperation & Development PAH Polycyclic Aromatic Hydrocarbon WHO World Health Organization USAID United States Agency for International Development USIA United States Information Agency FISCAL YEAR

January 1 - December 31 FOR OFFICIALUSE ONLY

BULGARIA

ENVIRONMENTSTRATEGY STUDY

Tablg of Contents

i. Executive Summary ...... Page i

I. Introduction...... Page 1

II. Guiding Principles..... Page 3

III. EnvironmentalProblems ...... ,,.,.,, Page 7 A. Human Health Effects...... ,.Page 7 B. EcologicalEffects .Page 15

IV. Responses .. Page 30 A. Economic Policy and StructuralAdjustment ...... Page 30 B. EnvironmentalLegislation ...... Page 34 C. Standards...... Page 38 D. Enforcement...... Page 44 E. Monitoring...... Page 54 F. Institutions...... Page 61 G. Public Education/Participationand NGOs...... Page 71 H. Investmentsand TechnicalAssistance ...... Page 73

V. Action Plan...... Page 82

Annexes

Al. Tables and Figures A2. Summaries of Human Health Data in Hot Spot Areas A3. The Condition of Major Rivers in Bulgaria A4. Kozloduy - Radiation Effects and Nuclear Safety A5. The Coastal Zone of Bulgaria and EnvironmentalProblems of the Black Sea A6. The Impact of Coal Mining Operationson Land Resources A7. The Impact of Economic Reform on Emissions A8. EnvironmentalAudits and Services in Bulgaria A9. Nature ConservationStrategy of the Ministry of Environment AlO. Risk Assessment All. Air PollutionAlert and Warning A12. Water Use for Irrigation A13. Air Quality MonitoringMethods A14. EnvironmentalNon-Governmental Organizations in Bulgaria

This document has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout WorldBank authorization. Charts

A. Ministry of Environment- ManagementStructure B. Structureof the Committeeof Forests C. Structure of the District Forestry Departments D. Structure of the Management of State Forestry Enterprises

Maps

A. Bulgaria - EnvironmentalProblems B. Nature ProtectionAreas in Southern Bulgaria and NeighboringCountries FOREWORD

The study is the result of a cooperativeeffort by the Governmentof Bulgaria, the United States Governmentand the World Bank. The World Bank and two agencies of the United States Government,the EnvironmentalProtection Agency (EPA) and the Agency for InternationalDevelopment (A.I.D.) developed extensivecontacts with Bulgariangovernment agencies responsiblefor environmentalprotection during 1990-91. The idea of preparing a joint environmentstrategy study, replicatingthe approachwhich was successfully applied in Czechoslovakia,was discussedand agreed with the Governmentof Bulgaria in April, 1991. The study was expected to help the government in developing its environmentalpolicies and the donors in targetingassistance u-.ida-voiding duplication of efrort.

The main mission was launched in June 1991 and was the basis for preparing the first draft of the study during the summer of 1991. A follow-up mission was carried out in September1991, which discussedthe draft with the Bulgarian study team and prepared a short and medium term environmentalaction plan. A public seminar to discuss the proposed environmentstrategy was held in Sofia in January 1992 with representationfrom domestic and foreign governmentaland non-governmentalorganizations. Based on recommendationsat the seminar and comments from the newly elected Governmentof Bulgaria, the study was finalizedin March 1992.

Bulgarianparticipation in the study was coordinatedby the Ministry of Environment. Dr. Valentin Bossevski,Deputy Minister of Environment,was the head of the Bulgarianstudy team. The environmentstrategy seminar was chaired by Valentin Vassilev, the Minister of Environment. Fifteen government agencies and severalnon-governmental organizations (NGOs) contributedto the work of the two missions. The missions were coordinatedby Laszlo Lovei from the World Bank. Other members of the World Bank team were James Harrington, Clyde Hertzman,Gordon Hughes, SiiezanaMitrovic, James Moose, Donald Theiler and Peter Whitford. The A.I.D. team was led by Ronald Greenbergand included Lori Freer, Samuel Hale, Richard Liroff, Rom Michalek, Gary R. Redman and James Wolf. The EPA team was headed by Dan Beardsleyand includedJay Benforado,Debra Dobkowski,Maryann Froehlich,Jonathan Lash, James Marshall, William Muszynski and Anna Phillips. The study drew extensivelyon earlier World Bank environmentalreports on Czechoslovakia,Poland, and Yugoslavia (these countriesface environmentalproblems similar to some of Bulgaria's) and on the findings of a World Bank infrastructuremission which visited Bulgaria in June 1990; we wish to thank the authors of these reports for allowing us to use some of their findings. Two unpublishedWorld Bank reports prepared by Charles Weiss and David Wheeler were also used. BLGARIA

ENVIRONMENTSTRATEGY STUDY

ExecutiveSummary

(i) The environmentalmovement in Bulgariawas in the vanguard of the politicalmovement that resulted in the change of governmentin November 1989. The monopolisticposition of the CommunistParty was abolished and the country held its first free, multi-partyelections in June 1990. Political changes have led to a fundamentalreorientation of economic policy. The coalition government formed in December 1990 has embarked on a comprehensiveeconomic reform program aimed at establishinga market economy.

(ii) Until this year, practicallyall segments of economic activity were controlledby the state. A strongly centralizedeconomic system was used to promote the expansionof industry at the cost of agriculturalactivities. Massive price distortionsand state control over resource allocations characterizedthe economic system. The economywas insulatedfrom direct internationalcompetition via a complex mix of subsidies,taxes and foreign exchange rationing.

(iii) Systematicunder-pricing of energy and raw materials led to usage per unit of output substantiallyhigher than in market economiesand consequentlyhigh levels of pollution exacerbatedby the emphasis on heavy industry and relianceon indigeniousfuels, largely low quality lignite. Prevailing technologies,often out-of-dateand inappropriate,promoted excessiveuse of natural resourcesand produced high volumes of waste. Price distortionsand subsidiescreated a bias against investmentsin pollution abatement,adequate maintenanceof existingplants and recycling. Despite the fact that environmentallegislation in Bulgaria had a relativelylong history, the numerous environmentallaws were left unenforced and programs to combat pollutionwere given low priority in the allocationof funds.

PrinciDlesfor EnvironmentalPolicy

(iv) Because past policies were a major cause of current environmental degradation,changes in economic and managementpolicies currentlyunderway will, if continued,have a major beneficial impact on the environment. Free market or fully cost-basedpricing will eliminate incentivesto overuse energy and other resources,reducing degradationassociated with such overuse. The most significantnear-term environmental benefits are likely to be gained through market-inducedrestructuring away from older, inefficientor unneeded industrialplants to be replaced with less pollutingprocesses under conditionsof competitiveprivate enterprise. Thereforethe first principle for sound environmentalmanagement should be a sensible industrialand energy policy during this transitionalphase fully consistentwith environmental policy goals.

(v) A system of environmentalpolicy and managementshould be able to formulatepolicy, translatethat policy into laws and regulations,and implementand enforce those regulations. Such a system should conform to the political and legal system of the country and should be consistentwith its cultural norms. It must be consideredlegitimate, competent and equitableby the public and by the organizationswhose activitiesare to be regulated. . ii -

(vi) Environmentalpolicy should be establishedand carried out on the basis of cross-media(air, water and soil), scientific,and economic analysis. Environmentalmanagement should be decentralizedand include and encouragea variety of proceduresfor public participationin decision-making. Enforcementshould rely on a balance between "command-and-control"methods and use of market mechanisms.

Current Status of Environment

(vii) The most serious environmentalproblems in Bulgaria are localized in specific areas (hot spots),where point sourcesor groups of sources of pollution cause hazards to the health of the local population. Pollutionin hot spot areas is mostly due to heavy industry (ferrousand non-ferrous metallurgy,chemical and cement factories)and is as severe as in the most polluted areas of Central Europe. About twelve percent of Bulgaria's population (i.e., about 1.1 million people out of 9 million) live in hot spot areas. There are documentedcases of lead overexposureand respiratory disease, as well as hints of effects on immune function,childhood development,and possibly infant mortality and congenitalanomalies. Specifically,blood lead levels of children in some Bulgarianhot spots exceeded levels measured in all other European cities according to a survey carried out in 1986-90.

(viii) Measured annual average concentrationsof dust in the air of many large Bulgariancities are above acceptablelevels. These high concentrations of particulatesin the air are due to: (i) point source emissionsfrom high stacks of power plants and large industrialfactories; (ii) emissions from householdsand small industrialboilers using coal as the primary ftuel;and (iii) natural dust due to climate, transportationand inadequatestreet sweeping.

(ix) Although less widespread than the problem of suspended particulates,high concentrationsof SO2 in the air is a serious problem in many Bulgarian cities. The problem is caused by emissionsfrom (i) heavy industrialfactories; (il) thermalpower plants; and (iii) home heating with coal and briquette. In terms of SO2 emissionsper unit of GDP, Bulgariahas one of the highest emission intensitiesin the world. While 75 percent of total SO2 emissionsare discharged from power plants, the plants have very high stacks, are located in less populatedareas and thereforecause less health problems than other industriesand home heating. NO, concentrations, probably due to the relatively low number of motor vehicles in Bulgaria,are not a serious problem in most urban areas.

(x) Only one river (Mesta)out of the 13 major rivers can be consideredrelatively clean in Bulgaria. The Beli Lom and the Danube do not meet recreationstandards at any monitoringpoints. From the remaining ten major rivers, more than 50 percent of the length of six rivers (Arda, lantra, Iskar, Maritza, Osam and Tundza) are seriouslypolluted. Industrialplants, city sewage, and feedlots spew a steady stream of contaminants- chemicals, heavy metals and sewage effluent - into rivers. Industrialaccidents/spills occur with regularity. While settlementswith a population above 50,000 people usually have sewage systems, only about one quarter of the sewage systems have effective treatmentfacilities. Although drinking water quality is generallygood, there are a few water sources in the country with problems - iii -

of heavy metal contamination. A more widespreadproblem is the elevated level of nitrates in drinking water supplies in three regions. Generally, the quality of groundwateris suitable for irrigationpurposes, although over- exploitationof groundwateris a seriousenvironmental concern in certain areas.

(xi) With the exceptionof the area around the Burgas port and the cities of Burgas and Varna, the Black Sea along the Bulgariancoast meets the standardsset for recreationuse. However, organic content has been increasingover a long period of time, and the incidenceof eutrophicationhas been more frequent and more prolonged in recent years. There has been a drastic decline in the catch of fish from the Black Sea. Although previous research and more recent historicaldata points to over-fishingas the leading cause, continuingand increasedpollution from rivers and land based sources no doubt contributessignificantly to the decline in fish stocks.

(xii) Approximately20 percent of Bulgaria'sagricultural and forest lands are degraded or polluted. Natural causes such as erosion and acidificationaccount for nearly 80 percent of the areas affected. Economic activitieshave compoundedthe erosionand acidificationprocesses, may have worsened waterloggingand salinity problems,caused contaminationthrough heavy metal depositionand spoilageby mining. Emissions from industrial plants have contaminated46,000 ha with concentrationsof heavy metals (arsenic,cadmiumt, copper, mercury, iron/manganese,lead, nickel and zinc) in excess of maximum permissiblelevels in Bulgaria. Additionally,100,000- 130,000ha of agriculturallands have received contaminationby heavy metals, though concentrationsare judged to be less of a hazard. Mining, quarrying and constructionoperations have adverselyaffected 89,000 ha, or nearly one percent of Bulgaria's land area.

(Xiii) Land disposal is the primary method in Bulgaria for managing industrialand domestic solid waste. The actual number of landfillsfor domestic waste is unknown. Many of these are uncontrolledopen dumps. Industrialenterprises generally store or dispose of their waste on their own property. Huge waste dumps exist beside virtually every large industrial enterprisein Bulgaria, often on valuable agriculturalland. Although the exact volume is unknown, some portion of the industrialwastes generatedby large enterprisesare disposed of in municipal land fills resulting in the inappropriatemixing, or co-disposal,of hazardousand domestic waste.

(xiv) Bulgaria is managing its forest resourcesvery effectivelyfor preservationof standing timber reserves. Data for 30 years show steady and substantialgrowth in the volume of its timber resources. Bulgarian forests appear less affectedby environmentalpollution than forests in Central Europe. Since 1965, plantingshave exceeded deforestationby an average of 9000 ha per year. Bulgaria'sforest reserves are relativelyyoung, therefore forest management for optimum growth is a major concern. The preference for planting of conifers is resultingin changeswhich deviate from the natural forest composition. Conifers may be more risk prone than hardwoods to changes brought on by drought.,air pollution,acid-rain, or global warming.

(xv) Bulgariahas 10 "people'sparks" and 98 nature reserves,17 of which are biosphere reserves. There are five categoriesof protected areas in Bulgaria - reserves,people's parks, natural landmarks,protected sites and - iv -

historicalplaces - with a total area of 280,000 ha (about 2.4 percent of the country). Historically,overcutting of timber had been a major threp.tto the mountains,but that practice was stopped long ago. More recently,wr .iing activitieshave disturbedthe landscape,polluted surface waters and depleted groundwaters. Due to inadequatecontrol, overuseby visitors and construction ac'.ivitiesare also a thteat to many protectedareas.

9conomic Policy

(xvi) The economy of Bulgaria is undergoinga major transitionfrom a command and control economy to a market economy. Through multiple price adjustments,government policy to raise energy prices to the level of costs was implementedfor all industrialconsumers by mid-1991 (householdenergy is still subsidized). The governmentannounced that it would no longer subsidize inefficientproducers, i.e., it would apply a policy of "hardbudget constraint"with a genuine threat of bankruptcyto all state-owned enterprises. If that policy is implemented,it will provide, together with economic cost based energy qnd natural resource prices, the necessary conditionsfor more efficientuse of resources and structuralchanges in the economy. The need for major investmentsin emission control and waste treatment technologymay affect the economicviability of enterprisesand should be taken into account in industrialrestructuring. In order to assess pollutioncontrol options and costs, environmentalefficiency reviews (audits) of individualenterprises should be conductedas part of the restructuringand privatizationprocess. In turn, that requires developmentof environmental products and services includingemissions monitoring, laboratories and consultingengineering.

Environmental Legislation

(xvii) Effective legislationand regulatoryprogram for environmental protectionin Bulgaria did not exist in the past and has not yet been put into place. While strict ambient air quality standardsand water quality standards exist, there are at present no practicalmeans to control facility operation to assure that standardsare respected. The absence of a perrit system means that there are, as yet, no plant specific requirementsto enforce. While factorieshave a general obligationto meet emission limits,no deadlinewas set for complianceby existing facilities. The enforcementsystem relies upon fines and civil penaltieswhich, for various reasons, proved to be ineffective.

(xviii) Basic legislationon environmentalprotection in Bulgaria originatedin the Sixties and has been subsequentlyadjusted by a number of amendmentsand supplements. In addition to the specific environmentallaws, there are more than 120 other laws that relate to environmentalprotection issues. The need for a new, streamlinedenvironmental law has been recognized and several versions have been prepared since 1989. As one of its last acts before the upcoming elections,the NationalAssembly passed the Basic EnvironmentalLaw in October 1991. The passed law was based on the draft of the EnvironmentalCommittee of the NationalAssembly, however, it drew on elements of the Ministry of Environmentdraft and also reflectedsome of the results of the ongoing environmentstrategy work. The law still did not establishall the necessaryelements of a regulatorysystem. (xix) The passage of effectiveilegislation, however, requires the de4elopmentof an environmentalstrategy which is closely linked to the strategy guiding the ongoing economic reform process. Environmental legislationshould define goals and prioritiesand establishstructure for decisions about how to proceed. It should explicitlyacknowledge that some sources of pollution will be controlledbefore others, and should specify who will make those decisionsand on what basis they will be made. Otherwise there is a danger that the environmentallaws will lose credibilityas the realitiesof environmentalpollution continue at odds with the requirementsof the law. On the other hand, focussed,predictable and successfulefforts at control at an early stage, even if modest, will strengthenthe entire system of environmentalprotection. Enforcementof a law should come through supporting regulations. Thereforethe most critical regulationsshould be prepared or revised at the same time as the law is being revised.

Standrds

(xx) Air quality does not meet the current standardsin most major Bulgarian cities. The number of air quality standards is higher than what could be monitored. The government'slong term objectiveis to achieve ambient air qualitywhich meets the EC standards. While the adoption of EC ambient air quality standardsimplies the rolling back of current Bulgarian standards,even the EC standardswould be difficultto achieve in the short-to medium-term. Therefore (i) interimstandards should be set with a focus on those pollutantswhich cause the existing major air quality problems;and (ii) a schedule for achieving increasinglystricter ambient air quality standards over the next five to ten years should be established.

(xxi) Emission standardsshould be replacedwith plant specific emission limits designed with a view to ensuring that the revised ambient standardsare met First, emission limits should apply to those pollutants only which are listed in the revised ambient air quality standards. Second, the limits should depend on locations,because the requirementsto meet ambient air quality standards in areas with several existing sources (e.g., in hot spots) have to be stricter than in other parts of the country. Third, the limits should be revised from time to time to meet increasinglystringent new national ambient standards.

(xxii) This approach assumes that air management strategieswill be developedon a regionalbasis. Local and regional governments,under the general guidance of the Ministry of Environment,will play importantroles in developingthe air managementstrategies and determiningplant specific emission limits and complianceschedules. In order to find the least cost solutions to meet ambient standards,a process of legally enforceable negotiationswith the affected enterprisesshould be established. The enterprisesshould be aware of the schedule set for the step-by-step implementationof increasinglystringent air quality standards,so they can adapt to the changing regulatoryconditions.

(xxiii) Ambient water quality standardsare more realisticthan air standards,although some of the ambient quality requirementscould be relaxed. However, the use of ambient standardsas directly enforceablelimitations on discharges resulted in unrealisticrequirements. Thereforethe general requirementthat all dischargesto surface water bodies meet Class II vi

standardsshould be replaced by interim effluent ceilings and compliance schedulesestablished on a regionalbasis through a process of negotiations with thL polluters. Sewer use ordinancesshould be introducedto prevent the discharge of contaminantsto sewer systems that are untreatablein municipal sewage troatment plants.

(xxiv) There are currentlyno standardsor regulationsspecific to methods of pre-treatment,storage and disposal of hazardouswaste. Generally, enterprisesare responsiblefor assuring that industrialwastes do not violate air, water and soil quality standards. A regulationon the collection, transportationand disposal of hazardouswaste is urgently needed. That regulationshould also determinereporting requirements in order to establish a cradle to grave tracking system.

JJegglto-ryProgram

(xxv) It is necessary to move rapidly to introduceregulations and economic incentivesfor pollutioncontrol, reinforcingthe impact of higher energy prices on emissionsbefore too rany resourcesare transferredto industrieswhich are apparentlyinternationally competitive but whose social profitabilitymay be low because of the environmentaldamage that they cause. Command and control (CAC) type measures, such as design reviews and emission permits with legal sanctionsfor violations,and market based (MB) instruments,such as po'llutionfees and economic cost-baseduser charges for natural resources (water,forests, land, minerals),are both needed.

(xxvi) Applicationof CAC instrumentsshould concentrateon hot spots and toxic pollutantsand should aim at the achievementof a revised set of ambient quality standards. The improvementof air quality in hot spots is urgently required and MB instrumentsare not sufficientlyprecise to address emissions of toxic pollutants. For already existing facilities,plant specific environmentalrequiremients should be establishedfollowing the completionof environmentalaudits and a series of negotiations. A system of permits, which specify these requiremnentsfor the operationof industrialfacilities, should be introduced. For new facilities,pre-construction design reviews are needed, tollowingthe environmentalimpact assessmentscarried out at an earlier stage of the project cycle. Design reviewswould be needed to obtain environmentalpermits. Compliancewith permits should be monitoredand fines for pollution above permittedlevels should be raised to a level that provides strong incentivesfor enterprisesto adhere strictly to interimand final emission limits specifiedin the permits. The current practice of exemptions should be dlscontinued.

(xxvii) In addition to these CAC measures,MB instruments,such as a system of pollution charges,provides the opportunityto generate fiscal revenues in a non-distortionaryway by taxing external diseconomiesthat representsocial costs. The alternativemethod of financingenvironmental protectionactivities, i.e., relying on central governmentbudget, has substantialcosts (so-calleddeadweight losses) caused by distortionsin the economy due to general taxes which are needed to raise revenues. However, considerablefurther analyticalwork will be needed in designingthe system of charges. Among other things, the impact of pollution charges on production costs should be analyzed,the distributionof revenuesbetween central government,regions and municipalitiesshould be worked out, administrative vii -

procedures for both the assessmentand collectionof the charges and the operationof the environmentalprotection funds should be specifiedand InstitutionalcapabV "14 to administer these proceduresshould be developed.

(xxviii) It ts equally importantthat charges for the use of natural resources - water, land, mineral resources,forests and protectedareas - are set at the appropriatelevel. Changes in the pricing of natural resourceswill operate in the same directionas higher energy prices in stimulating enterprisesand other consumersto increase the efficiencyof natural resource use and thlerebyreducing negative impactson the environment. Piped water, sewerage and solid waste tariffs should be raised to cover capital costs, raw water charges should be introduced,groundwater extraction tax should be establishedwhere the aquifers are overextractedand the price of irrigation water should be raised to cover at least the cost of electricityapplied to lift and pressurize the water. The moratoriumon land conversionand .he extremelyhigh one time conversionfee should be eliminatedas soon as conditions for a properly functioningland market are established. The users of mineral resources,all state companiesuntil now, do not pay royalties (resourcedepletion charges). While some of these resources (e.g., coal and certain metal ores) are marginal or even sub-marginal,a system of royalties for economic mineral resourcesshould be developed.

(xxix) Funds nllccatedto protected area managementare inadequate. Nature preserves,national parks, and other such protectedareas have significantincome generatingpotential which is underutilized. While applicationof visitor fees cannot be implementedin the short to medium run because access to the parks is currentlyunrestricted, a special "nature tax" should be levied on the revenues of Balkantouristand other operatorsof facilities in (or adjacent to) existing and potentialpark areas. A Nature ProtectionFund should also be established. Initialendowment of the new fund may come from the budget, however, the "naturetax" should serve as a -ular source of revenue in the future (togetherwith direct user charges to 1- introduced ;er the long run). The Fund would finance all activitiesrelated to the planning and managementof protectedareas. Its resourcesshould be used also to inform and educate the public about the natural values of existing reserves and the benefits to be derived by strengtheningand expandingthe existing reserve system.

(xxx) Central governmentcontrol over land use has resulted in a well- defined land-use pattern along the coast. The coastlineof Bulgaria does not show the intensivestrip developmentprevalent in other European coastal areas. However, the impendingland reforms and emergenceof a market economy will stimulatestrong pressuresfor developmenton and near the coast. To accommodatethese pressuresfor economic growth,within the limits of the natural capacity of the land and water to sustain growth without adverse social and environmentalconsequences, the governmentshould take steps to establisha formal system of coastal zone managementwhich might include the applicationof CAC as well as MB instruments.

Institutions

(xxxi) There is substantialoverlap between the environmentalmonitoring activitiesof several governmentagencies, especially the Ministry of Environmentand the Ministry of Health. The one benefit from such an overlap, - viii -

quality cont;ol, cannot materializebecause monitoringarrangements (sampling times and laboratorymethods) are different. Outdatedmonitoring equipment, lack of quality control and uncoordinatedreporting systems lead to situations when highly inconsistentdata co-existwithout any attempt to resolve the apparent contradictions. There is an urgent need to rationalizemonitoring activities in order to avoid duplication,improve coordination and strenghten quality control. There is also a need to create easily accessiblesummaries of environmentalexposure and health data for the country, probably using maps, so that complete and timely informationcan be made available on equal terms to policy-makers,scientists, and concernedcitizens.

(xxxii) Health effects are Important,but not the only factors which ought to be consideredwhen setting ambient standards. The benefits of reduced pollution should be balanced with abatementcosts and the costs and feasibilityof enforcement. Since the Ministry of Environmentis in a better position to assess these trade-offsthan the Ministry of Health, national ambient standards (air, water and soil) in the future should be set by the Ministry of Environmentafter consultationwith the Ministry of Health.

(xxxiii) Because the district administrationlevel (28 districts)- between the regional (8 oblasts plus Sofia) and the local government (274 obshtinas) level - has recentlybeen abolished,there is no level in the current structureof governanceto which the health and environmentalinspectorates could relate. Only a fractionof the inspectoratesare relativelywell equipped (this applies to both the health and the environmentnetworks). Therefore the Ministriesof Environmentand Health should develop and, after a transitionperiod, implementa separatebut coordinatedstructure for the regional environmentand sanitary inspectoratesconsistent with the structure of governance.

(xxxiv) Centralisationof control at the national level over the day-today implementationof environmentalpolicy would be undesirable. The regions should become the focal point of pollutioncontrol activities in Bulgaria. Thereforethe role of the regional environmentinspectorates should be enhanced to include the preparationof regional environmentalaction plans, negotiationand issue of pollutionpermits, review of environmentalimpact assessments,environmental monitoring, detection and fining of violations,and coordinationwith other regional and local level governmentagencies. A certain share of the revenues from pollutioncharges and fines should be given to the regions in line with their increasedresponsibilities. Therefore, Regional EnvironmentProtection Funds should be establishedto provide the budget for monitoringand inspectionactivities and ta finance environmental improvementprojects.

(xxxv) In the past, local governmentshave had l1itle or no leverage over industrialor other significantsources of pollutionwithin their boundaries. As administrativedecentralization continues and local electionsproduce elected rather than appointedmayors, the ability of local governmentsto exercise politicalpressure on visible large pollutersundoubtedly will increase. According to the new Law on Local Administration,environmental services of a localizedcharacter - such as water, sewerage and solid waste services,street cleaningarnd "hygiene" - are the responsibilityof the obshtinas, or, in the case of systemswhich extend beyond one obshtina (which is frequentlythe case in Bulgaria),the okolija or a special-purpose ix -

associationof obshtinas. The governmentshould also consider giving local governmentsthe power to regulate small-scalepollution sources (i.e., issue permits, monitor complianceand issue-citations;review and approve environmentalassessments for new projects).

(xxxvi) Responsibilityfor identifying,designating, and managing protectednatural areas is highly fragmentedin Bulgaria. There is a need to create a Nature ProtectionAgency in order to effectivelycombine administrationand managementof all protectedareas. This agency would serve as a neutral force designed solely for the purpose of nature protection. Its functionswould be entirely separate from activitiesrelated to the extraction/harvestingof economicallyvaluable natural resources. Characteristicsof such an agency would include financingfrom the national budget and also from revenues of the proposed Nature ProtectionFund; management of its own budget; responsibilityfor protected area planning, management, implementation,and monitoring includingsole responsibilityfor the approval of any actionawithin park boundaries;and equal status with other agencies concerningbuffer zone management.

(xxxvii) While finding and implementingsolutions to the country's environmentalproblems is a formidablechallange, the current level of public support for a cleaner environmentis probably the most significantasset that could make the government'senvironmental strategy successful. Efforts to increasepublic awarenessof environmentalissues are limited and fragmented. The Ministry of Environmentappears to be restrictedin its outreach by the current organizationalstructure, limited funding and, perhaps most important, by the lack of real traditionof public involvementin environmental decisionmakingthrough regular disseminationof information. The close connectionbetween disseminationof informationto the public and both formal and informal environmentaleducation efforts is only beginning to be recognized. Targeted efforts, perhaps after the passage of environmental legislation,would be useful and cooperationin this area with bilateral and multilateralagencies needs to be further explored.

(xxxviii) Bulgariahas a very active and well organized,highly professional communityof environmentalNGOs. In recognitionof the crucial role that NGOs can and should play in carrying out public educationprograms and in influencingenvironmental policy, better communicationand coordination between the Ministry of Environmentand the NGO communityas well as among the NGOs is essential,particularly in view of the limited resourcesavailable for such efforts.

InvestmentProgram

(xxxix) The decreasing trend in environmentalprotection investments needs to be arrested. The investmentprogram for environmentalprotection should be based on the prioritizationof environmentalproblems and on the application of cost-effectivenessanalysis in order to ensure that high priority environmentalimprovements are achieved at the lowest possible cost.

(xxxx) Significantimprovement in pollution control,however, will depend on the availabilityof funding. Primary funding should come from domestic bank loans and donor institutions,but that will not materializeunless borrowers are creditworthyand generate enough revenue to service debt. That -x-

requires, in turn, that (i) the restructuringprocess leads to solvent, profitable companies;(ii) there is adequate local tax base provided to the municipalities;and (iii) the municipalwater and sewerage enterprisesset user charges at a level which includesthe cost of capital.

(xxxxi) Supplementaryfunding to finance cost-effectivepollution control investmentsmay come from the regionalenvironmental protection funds. However, before providingsupport to an enterprise,two basic conditions should be met : (i) the enterpriseshould have a restructuring/privatization plan approved by the Ministriesof Industry and Finance; and (ii) the enterpriseshould have an envirotmentalprotection action plan based on a completedenvironmental audit approvedby the Ministry of Environment. Municipalitiesshould not be eligible for supportunless they move towards charging fees which are based on the economic cost of water supply, sewerage and solid waste managementservices.

(xxxxii) Governmentsupport should be provided in the form of financinga certain portion of necessary investmentson a grant basis. Grants are transparent,one time obligationswhich are easier to administerthan subsidizedinvestment credits. A conditionof a minimum (non-zero)level of non-grant financing (internallygenerated funds or bank loans) should be met by each enterprisewhich receives support. The newly establishedregional environmentalprotection funds, after pollutioncharges are introduced,will be able to provide part (or all) of the resourcesrequired.

(xxxxiii) Allocationof environmentalinvestment funds should be based on a set of clearly establishedpriorities. Reductionof seriouspublic health hazards should receive the highest priority. The most serious health hazards are associatedwith hot spot areas, especiallydue to exposures to toxic substances. Second priority should be accorded to those environmental investmentsthat, while decreasing less serioushealth risks, also result in a measurabledecrease in costs to the economy caused by pollution. Third priority should be assigned to the conservationof living natural resources, especiallyto the preventionof irreversiblechanges.

(xxxxiv) The Ministry of Industry should give priority to enterprisesin hot spot areas when setting the schedule for environmentalaudits, or more generally,for the overall restucturing/privatizationprocess. In addition to plant specific pollutioncontrol measures to be identifiedduring environmentalaudits, the installationand/or proper maintenanceof electrostaticprecipitators (ESPs) to remove particulatesis a general requirementfor all large industrialemitters while medium size or smaller industrialplants should at least apply fabric filtrationmethods to capture particulates. Enterprisesthat do not implementthese measures should be fined heavily. In order to further reduce particulateemissions from small sources, expansionof the gas distributionnetwork is needed to serve households,small industrialestablishments and districtheating plants.

(xxxxv) SO2 emissionsfrom non-industrialsources will be significantly reducedwhen the gas program is carried out. Meanwhile, in the worst effected areas of the country (e.g., Dimitrovgrad,Srednogorie, Devnya), the distributionof coal and briquettewith high sulphur content should be stopped and imported coals with low sulphur content should be provided for sale to households. In areas where SO2 emissionsfrom large point sources pose a - xi v

health hazard, cost-effectiveinvestments in SO2 control should be determined within the context of air managementplans to be developedby the affected regional governments. In other words, only those investmentsshould be selectedwhich promise the highest "ambientSO2 concentrationreduction per unit of investmentcost" ratio.

(xxxxvi) In water pollutioncontrol, first priority should be given to decreasingindustrial pollution, especially the level of toxic pollutants in rivers and groundwaters. The problem of high toxicity effluents (heavymetals and certain chemicals)has to be solved within the context of the industrial restructuringand environmentalaudit process. Second priority should be given to the completion of collectors in those cities which alreadyhave sewage treatmentplants operatingbelow design capacity (e.g., Sofia, Plovdiv), the completionof treatmentplants which are in an advanced stage of constructionand the rehabilitationand upgradingof existing municipal treatmentplants and the treatmentplants in feedlots. Third priority should be assigned to the constructionof treatmentplants in those cities, which have a functioningwastewater collection system. The long term goal should be for all cities to constructtheir own sewage treatmentplants, but for smaller towns considerationshould be given to alternativelow cost technologiessuch as tricklingfilters and lagoons.

(xxxxvii) A study to identifyhazardous waste sites throughoutBulgaria should be carried out urgently. This should be the first step in determining the full nature and extent of contaminationfrom past disposal practices. After a full inventoryexists, risk-basedscreening and site ranking techniques should be used to set prioritiesand evaluate the need for remedial action. Measures are needed to prevent exposureand contain further spread of contaminationfor those sites where there are demonstratedhealth and environmentalproblems. The costs of these measures should be borne by the governmentand financed from the Central EnvironmentProtection Fund, i.e. restructured/privatizedenterprises should not inherit liabilityfor past environmentaldamages. While large enterprisesare expected to dispose of their hazardouswaste themselves,small waste generators should be required to dispose of wastes at central facilities. However, more specific information on the nature of wastes that might be brought to such facilities'isneeded. Therefore,a feasibilitystudy should be done in conjunctionwith the recently initiatedSofia waste survey.

(xxxxviii) A problem facing several local jurisdictionsis the inabilityto site new landfills,due to lack of availableland. Municipalitiesrequested the central government to provide funds for the constructionof incinerators. However, landfill disposal of solid waste is a less costly method and should not be discardedeasily. Before solid waste incineratorsare constructed,the possibilityof mitigating the space problem by investing in additional compacting equipmentshould be explored.

(xxxxix) In view of the current extreme scarcity of financialresources in Bulgaria,major investmentsin nature conservationare not justified in the near future. However, the cost of measures which could prevent the deteriorationof protected areas and preserve biodiversityis quite modest and the possibilityto find external support for these measures under debt for nature swap operationsor under the Global EnvironmentFacility should be explored. - xii -

Donog assistance

(L) Severalhigh priority investmentslisted above could be eligible for support from bilateral donors and World Bank, European Bank for Reconstructionand Developmentand European InvestmentBank lending operations. The internal and external resource constraintsfacing Bulgaria are very severe. Internally,achievement of the objectivesof the macroeconomicstabilization program requires the applicationof a tight incomes policy, restrictivemonetary policy and budget austerity. Externally, Bulgaria have no access to foreign (private)commercial lending due to the moratoriumon foreign debt payments. Foreign exchange reserves are virtually depleted. Financialassistance from external donors is crucial to ease these constrain,'.

(Li) In addition to the support of investmentprojects, technical assistanceis needed and could be providedby several bilateralagencies, the European Communityand multilateralbanks in the followingareas:

Mi) environmentalaudits; (ii) drafting of the new environmentallaw; (iii) developmentof a nature conservationstrategy and drafting of the new nature conservationlaw; (iv) preparationand implementationof the Conventionon the Protection of the Black Sea; (v) risk assessmentand economic analysis techniques; (vi) ambient air and water qualitymodeling; (vii) developmentof an air pollutionalert and warning system; (viii) setting of pollution charges, establishment and operationof environmentalprotection funds, particularlyproject selectionand fund disbursement procedures; (ix) developmentof a coastal zone management program; (x) air and water qualitymonitoring techniques; (xi) hazardouswaste analysis,reporting and data management systems; (xii) establishmentof a single, integratedsystem of food control; (xiii) developmentof a comprehensiveenvironmental data management system; (xiv) establishmentof a Nature ProtectionAgency; (xv) developmentof a curriculumfor the training of park managers; (xvi) developmentof protectedarea managementplans; (xvii) environmentalmanagement at the local government (obshtina)level; (xviii) design and implementationof public education programs; (xix) communitybased environmentalmanagement programs; (xx) design and operationof wastewater treatment facilities; (xxi) hazardous waste treatmenttechnologies and remediation techniques; (xxii) domestic and industrialwaste treatmenttechnologies. I. INTRODUCTION

1. Located on the Balkan Peninsula,Bulgaria has an area of 110,911 km2. It extends from the western shore of the Black Sea to Yugoslavia in the west. In the north, the Danube River forms the greater part of Bulgaria'scommon boundary with Romania. Greece and Turkey lie to the south and southeastof Bulgaria. The Bulgarian terrain is about three-fourthmountainous and one- fourth plains; The country could be divided into three parallel east-west zones: (i) the Danubian tablelandin the north; (ii) the Balkan Mountains in the center; and (iii) the Thracian Plain and the Rhodope and Pirin Mountains in the south.

2. Bulgaria is a lower-middleincome country with a populationof about nine million and an estimatedper capita income of US$1637 for 19911. Average population density is 81 persons per km2 . About 65 percent of the population live in towns. Urban populationexpanded rapidly through the 1970s. Sofia, the capital city, had a populationof 1,115,000in 1985. Other large cities are Plovdiv (342,000),Varna (302,000),Ruse (184,000),Burgas (183,000)and Stara Zagora (151,000).

3. The environmentalmovement in Bulgaria was in the vanguard of the politicalmovement that brought down the communistgovernment in November 1989. The monopolisticposition of the CommunistParty was abolishedand the country held its first free, multi-partyelections in June 1990. Political changes have led to a fundamentalreorientation of economic policy. The coalitiongovernment formed in December 1990 has embarked on a comprehensive economic reform program aimed at establishinga market economy.

4. Until this year, practicallyall segmentsof economic activity were controlledby the state. A stronglycentralized economic system was used to promote the expansionof industry at the cost of agriculturalactivities. Massive price distortionsand state control over resource allocations characterizedthe economic system. The economywas insulatedfrom direct internationalcompetition via a.complex mix of subsidies,taxes and foreign exchange rationing.

5. Systematicunder-pricing of energy and raw materials led to usage per unit of output substantiallyhigher than in market economiesand consequently high levels of pollutionexacerbated by the emphasis on heavy industry and reliance on indigeniousfuels, largely low quality lignite. Prevailing technologies,often out-of-dateand inappropriate,promoted excessiveuse of natural resources and producedhigh volumes of waste. Price distortionsand subsidiescreated a bias against investmentsin pollutionabatement, adequate maintenanceof existingplants and recycling. Despite the fact that environmental legislation in Bulgaria had a relatively long history,2 the numerous environmentallaws were left largely unenforcedand programs to combat pollutionwere given low priority in the allocationof funds.

1 Source: World Bank Report No. P-5588-BUL,July 9, 1991.

2 For an internationalcomparison, see Table 1 in Annex 1. 2-

6. During the Eighties, the central environmentalprotection agency was elevated to the level of a governmentministry. However, fulfillmentof the annual and five year plans was still accepted as an excuse for damaging environmentalpractices. As a reaction to mounting public concern about the status of the environment,the governmentdrafted a "NationalProgram of EnvironmentalProtection up to the Year 2000" in 1988. Based on this document, a "Program for Urgent Measures to Improve EnvironmentalConditions" was prepared by the Ministry of Environmentin April 1990. This program was adopted by the governmentbut has not been implemented. The program contained 134 measures to be taken within the period 1990-95but with most to be undertakenin the first two years. The program was very ambitiousand most of the measures included items such as closure of production.linesand large investmentsin costly end-of-pipeabatement technologies. However, there were no financingarrangements prepared, and the impact of the program on the budget (direct impact through the financingof investmentsand indirect through the loss of industrialoutput) was not analysed.

7. This study recognizesthat investmentsare only one option in the wide range of possible actions to improve the status of the environmentin Bulgaria. An environmentalaction plan should include changes in legislation, enforcement,institutional arrangements, and most importantly,should be acceptableto the public. Investmentproposals should be economicallyand financiallysound and take into account all appropriateenvironmental considerations. Although there may be pressure to implementdrastic and costly measures,a viable strategy should be based on the prioritizationof options, should be enforceableand should be within the limits of financial and institutionalcapabilities.

8. The next chapter of the study provides an overview of the guiding principles of a sound environmentalpolicy and managementsystem. This is followed in Chapter III by a diagnosisof Bulgaria'skey environmental problems. Chapter IV suggests a range of responses to remedy these problems, includingmacroeconomic and sectoralpolicies, legislation,enforcement, institutionbuilding and strenghtening,priorities and financingmechanisms for capital investments. The last chapter lays out an action plan for the adoption of essentialmeasures. 3-

II. GUIDING PRINCIPLES

9. A system of environmentalpolicy and management should be able to formulatepolicy, translatethat policy into laws and regulations,and implementand enforce those regulations. Such a system should conform to the political and legal system of the country and should be consistentwith its cultural norms. It must be consideredlegitimate, competent and equitableby the public and by the organizationswhose activitiesare to be regulated.

10. The focus of this chapter is on the fundamentalbuilding blocks for such an environmentalpolicy and management system in Bulgaria. The approach followed assumes that protectionand preservationgoals can only be achieved over the long-termand, for that reason, a stable and enduring system must be established. This approach also assumes that environmentalprotection must be balanced with economic developmentobjectives as carefullyas possible,and that environmentalgoals must be achieved at the lowest practicablecost.

11. Because past policies were a major cause of current environmental degradation,changes in economic and managementpolicies currentlyunderway will, if continued,have a major beneficial impact on the environment. Free market or fully cost-basedpricing will eliminateincentives to overuse energy and other resources,reducing degradationassociated with such overuse. Forcing producers to compete in open markets should lead to a restructuring away from heavy industry,for example, and toward generally less polluting lighter industry and services. It will also force all producers to become more efficient,which will reduce resourcewaste and associatedenvironmental effects.

12. Many of the most serious pollutionsources in Bulgaria are in the heavy industry sector,which is using antiquatedtechnology that will not be competitivein a free-marketeconomy. Previous productiontargets were not based on market demand, and most heavy industryproducts contained embedded energy and raw material,as well as general budget, subsidies. The most significantnear-term environmentalbenefits are likely to be gained through market-inducedrestructuring away from older, inefficientor unneeded industrialsources to be replacedwith less pollutingprocesses under conditionsof competitiveprivate enterprise. The first principle for sound environmentalmanagement should be a sensible industrialpolicy during this transitionalphase fully consistentwith environmentalpolicy goals. A second significantsource of environmentalbenefits in the industry sector can be improved "housekeeping"which typicallyboth reduces environmentaldegradation and improvescompetitiveness of the enterprise. Similar policies established in the energy sector will have more near-term influenceon environmental quality than activitiesdirectly related to environmentalstandard-setting and enforcement. Energy technologiesmust uoe made more efficientand less pollutingand energy users must be encouragedto switch to cleaner fuels (naturalgas and clean coal). In general, pricing policies and promotion of economic competition,within a frameworkof strictly enforced realistic standards,constitute major means of accomplishingsectoral objectives.

13. Turning directly to the needs for environmentalprotection institutions and policy, Bulgarianauthorities intend to progressivelyestablish an integrated,decentralized environmental management system: -4-

Policy should be establishedand carried out on the basis of coss-media (air. water and soil). scientific.and economic anglygis. Media-specificapproaches to management are sub-optimal from two perspectives: 1) the environmentalperspective, because pollutionmay be transferredrather than mitigated and residuals are unaddressed;and 2) from the standpointof economic efficiency,because resourcescan be misallocatedto low-priority problems. The integrated,or cross-media,approach uses risk informationabout pollutionthreats to human health and the ecology as the basis for establishingpriorities across all problems. This implies establishmentof a strong monitoring and risk informationsystem. Risk prioritiesare then combinedwith knowledge about the technicaland economic feasibilityof pollution threat controls to determinean effective,practical plan of regulatory (and non-regulatory)action.

- Decentrglizedenvironmental management is most efficientboth for protection of the environmentand for cost-effectivenesspurposes. When environmentalpolicy, standards,and enforcementare establishedat the national level, decisionsare necessarily general. By decentralizingdecision-making authority, Bulgaria will encouragethe tailoringof environmentalaction to the specific needs of the geographicalarea. This will help ensure that the specific,unique environmentalthreats of the area will be addressedbut, at the same time, will discourageimposition of general and costly controls on low priority sources. The central governmentwill promulgatebasic environmentallaws and ambient standardsand will address pollutionproblems that have potential interjurisdictionalor transboundaryeffects or that are necessary to encouragereasonable predictability and developmentof commerce. Emission limits will be developed (and enforced)by local communitiesand regional agencies on the basis of local exposure conditions.

- Any form of environmentalmanagement should include and encourage a variety of proceduresfor p_blic garticiRationin decision- making, if for no other reason than this participationwill encouragepublic ownershipof the enforcementand economic implicationsof responsibleenvironmental decision-making.

14. From an economicpoint of view, environmentalprotection is most efficientwhen its costs are internalizedthrough competitivemarket pricing of goods. It is thus attractivepolicy to cost out pollution control and clean-up associatedwith production,then estab.lishmechanisms for ensuring that those costs are included in the market price of industrialand commercial outputs. An importantfirst step in this approach is to identify and correct subsidies,non-competitive markets, or other policies that distort the relationshipbetween market prices and environmentalcosts. While this should be done whenever possible,it often involves complicatedanalysis and market prediction.

15. A more practical short-termapproach for Bulgaria would be to rely on a balance between "command-and-control"methods and use of market mechanisms. "Command-and-control"involves creation of the traditionalsystem of - 5 -

standards,permits, and legal enforcement,with effectivecivil fines and criminal penalties for non-compliance. Credible enforcementof environmental law is the bedrock of every environmentalmanagement system. Developinga strong enforcementsystem may be particularlycritical for Bulgaria (and other Central/EasternEuropean nations) given the history of the past 45 years, during which there was such a large discrepancybetween ambitious laws and highly ineffectiveimplementation.

16. A credible enforcementsystem begins with the approach to law-makingand regulation itself: compliancemust be practicallyachievable by the regulated parties. It will not be merely impracticalfor Bulgaria to adopt Western European or American standardsimmediately; to the extent these standards cannot possibly be achieved,public respect for the whole environmental approachwill be undermined. The alternativeis strong law and regulation, with a phasing-inperiod. A second componentof effectiveenforcement is constructionof a system and allocationof resourcesfor compliance monitoring. Enforcementinspectors should have the capabilityfor determining emission practicesof regulatedsources. Finally, it will be impracticalfrom the viewpoint of administrativeresources to structurea compliancemonitoring and enforcementsystem which addressesall pollution sources immediately. Griteria should be developed for establishingenforcement priorities. For example, an importantcriterion might be the potentialharm to human health.

17. Bulgaria is evolving towards an approach to environmentalmanagement which involves a progressionfrom law to standard-.settingto negotiated permits to enforcement. It is crucial to the credibilityof the government's leadership in the area of environmentprotection that this appiroachbe phased in at a pace which is economicallyfeasible and legally enforceable.

18. A distinctionmay be drawn between "new" and "existing"pollution sources. "New" sources should be expected to comply immediatelywith all law and should be required to receive a permit before beginning operation. Phasing should only apply to existing sources. Several criteria seem particularlyimportant to the specific determinationregarding length of phasing-in time: nature and extent of the pollution threat to human health and the environment;,technical and economicviability of implementing controls; administrativeenforceability; and public demand. Effectively applying these criteria requires a mix of analysis includingrisk assessment, identificationand analysis of pollutionsources, and economic analysis.

19. A useful beginning step would be an environmentalaudit program for industrialenterprises. Such a programhas the benefit of promoting adoption of improvedhousekeeping and other ways for waste generatorsto reduce their environmentalemissions quickly at little or no cost. It should emphasize training of enterprise and local consultantstaff.

20. Regulatory measures must be reinforcedby market mechanismssuch as a system of pollution fees for obvious, demonstratedpollution threats. Initially, it may be difficultto gauge, even in this limited application,a level of pollution fee or charge which will correctlyprovide incentivesfor developingsubstitute practices or productswhile not leading to unacceptable market consequences. While the necessaryanalyses are being carried out, a practical, quick first step will be to augment the current system of fines -6-

with pollution chargeswhich are set with the objectiveof raising revenues for the financingof investmentsin pollutionabatement.

21. Because of the delicacy of the trade-offsbetween environmentalvalues and other social benefits,Bulgaria intendsto ensure strong public participationin environmentaldecision-making. Formalizingprocedures for public access to informationand a public role in decision processeswould be made particularlyuseful by:

- developingan environmentalimpact assessmentprocess, the results of which would be made public prior to major public and private developmentdecisions;

- developingpublic review and commentprocedures prior to the promulgationof significantregulation and policy; and - developinga system in which significantpollution sourceswould regularlypublish informationon their pollution emissions.

22. In its most general sense, "environmentalprotection" might be said to include the linked considerationof:

- 'shumanhealth protectionfrom air, water, land, and groundwater pollution; - ecologicalprotection and natural resourcepreservation; - agriculturalpractices and the use of agriculturalchemicals; - worker safety; - food safety; - consumerproduct safety; and - safety associatedwith the introductionof new chemicals into commerce.

Close linkage among the authoritiesresponsible for the above aspects of "anvironmentalprotection" offers crucialbenefits. It permits establishment of a comprehensive,integrated science and informationbase. It encourages developmentof consistent,non-duplicative regulation which, in turn, promotes public respect for and credibilityof governmentdecision-making. And it is efficient:public and private resourcesare conserved throughbroad priority- setting among problems. v7-

III.. ENVIRONMENTALPROBLEMS

A. Human Health Effects

23. Currentlhealth_. itWa. Although life expectancyis a very imperfect measure of health status in populations,it is still the best summarymeasure we have for comparing the health of countrieswith one another. Bulgaria, like other Eastern European states,has a life expectancy for both men and women that lags behind most OECD countries. In 1990, the male average life expectancyin Bulgaria was 68.1 years, 7.7 years behind Japan in the late 1980s. Similarly,the Bulgarianlife expectancyof 74.8 years for women was 7.1 years less than for Japan. For all Eastern European countries there was a marked increase in life expectancyduring the 15 to 20 year period after World War II followed by a flatteningor actual decline in life expectancy thereafter3. This pattern was particularlymarked for Bulgarianmen, whose life expectancy increasedthe most dramaticallyof all countries (including Japan) immediatelyafter the war, only to decline slightly thereafter, especially from the period 1971-90.

24. Broadly speaking,these trends appear to mirror the trends in economic growth which took place after the war. This suppositionis supported, indirectly,by the evolutionof consumptionof various food items per capita in the twentiethcentury. There was a dramatic change in the quantitiesof non-bread items consumedby Bulgariansbetween 1938-39 and 1970. In almost all categories there have been dramatic increases,reflecting a "post-scarcity"pattern of consumption. This correspondsmost closely, over time, with the rapid decline of infant mortality in Bulgaria'. In 1948, the infant mortality rate in Bulgaria was 118.2 per 1000 live births, a level experiencedby only the most deprived developingcountries today. By 1960, this level had been cut in half, and it continued to decline until the mid- 1980s in both rural and urban areas. Since 1988, there have been slight increasesin the infant mortalityrate. Nonetheless,the overall infant mortality rate in Bulgaria of 14.8 per 1000 livebirthsin 1990 representsan 87 percent decline since 1948. At the same time, supplementarylife expectancy,after age 30, for both males and females in Bulgaria increasedby approximatelyfour years between the mid-1940sand the mid-1950s. Thereafter, there have been virtuallyno gains in life expectancybeyond the age of 30. When these patterns are combinedwith the time trends in infant mortality, it emerges that most of the gains in life expectancyafter World War II can be attributed to the decline in infant mortality.

25. Despite the large declines in infant mortality since World War II, Bulgaria is still a relativelyhigh infant mortality country by the standards of OECD countries. Bulgaria's 1990 rate of 14.8 deaths per 1000 livebirthsis triple that of Japan and double that of Canada in the late 1980s. More than half of infant mortality in Bulgaria are attributedto respiratorydiseases and congenitalanomalies. These are the two categorieswithin which we would expect to find environmentalimpacts.

26. While the infant mortalityrate in Bulgaria continuesto exceed the rate in OECD countries, the rate of low birthweightbabies (those born less than 2500 grams) overlaps with Western countries. It should be noted, however,

3 See Figures la and lb in Annex 1.

4 See Figures 2a and 2b in Annex 1. that the low birthweightrate has increasedslightly during the 1980s. In other words, durin; the mid-to-late1980s both infant mortalityand low birthweightincreanled in Bulgaria,while the overall life expectancyfailed to decline. qn2ogfttle basic IntgrnationalHealth Status Indicatorsshow favorable trends irl ia.

27. Ho& spot,. Environmentalproblems influencinghealth in Bulgaria are fundamentallythe issue of specific,circumscribed areas where point sources or groups of sources of pollutionare influencinglocal health status. This is differentfrom Northern Bohemia in the Czech Republic,or Silesia in Poland, where long-term,widespread industrializationand mining, combined with unfavorablegeographic and climatic factors,have lead to large scale devastation. Howevttr,the level of environmentalpollution in these localized areas in Bulgaria is as high as in the most polluted areas of Central Europe.

28. One example is measured sulphur dioxide concertrationsin the air. Bulgarian average annual sulphurdioxide levels cover a wide range, even in comparison to the most polluted areas of Northern Bohemia in the Czech Republic and Silesia in Poland.5 The high end of the range far exceeds the highest annual levels found in Hungary during the heating season (when sulphur dioxide levels are highest). Thus, while it is true that Bulgaria is not in the Central European zone of high sulphur dioxide that blows West to East from East Germany to the Ukraine, there are local areas (hot spots) where sulphur dioxide levels reach a level of public health significance.

29. Another example is lead. Using a standardizedlaboratory methodology, an internationalcomparison of blood lead levels in children from polluted areas in Bulgaria and other countriesfound that Bulgarianchildren had significantlyelevated blood lead levels. The blood lead levels from two Bulgariancities were the highest in the internationalcomparison study.6

30. Table 1 below provides informationon average ambient air pollution levels in various hot spots in Bulgaria for 1989 and 1990 (the table also presents standards7 for each of these air pollutants). The reported average annual air pollution concentrationstend to validate these locationsas legitimatehot spots. In many locations,the concentrationsof pollutants could represent a threat to public health.

Table 1: AveraseAnnual Ambient Air Pollutjion Levels In Selec.ted Scots. 1989-1990 Pollutant Standrd Asenov- Vratsa Devnya Dimitrov- Kurdzhali Plovdiv Ruse Panagiu-Sredno- (ulm ) grad _ arad_ rishte sorie 1. oust. 150.0 270.0 160.0 350.0 530.0 310.0 280.0 300.0 320.0 400.0 2. SO2 80.0 485.0 58.8 28.0 119.2 102.5 305.8 32.1 349.7 440.0 3 go 50.0 15.3 22.9 8.6 10.4 31.0 29.2 -- 4. N I 8.0 -- 9.8 22.9 20.8 X 5.95- 5. pi 2.0 2.6 0.3 0.3 0.7 1.5 1.0 0.4 0.5 0.4 6.NH 3 40.0 -. 194.5 49.4 -- *- - - 7 Cl2 30.0 *- 7.5 -. -- -. - 8. HF 5.0 - 13.5 16.0 - -- - - 9. H S04 100.0 -- (1.5xstd) 100.6 - 187.u - - 294.9 300.0 1o.Is 3.0 -- -- .- .. .. ,, ,, 1.4 1.1

s See Table 2 in Annex 1. s See Figure 3 in Annex 1. 7 There are no standardsfor annual average concentrationsin Bulgaria. Some of the standardsin Table 1 are applied in the EC (dust, SO2, N02 and lead); others are equal to the 24 hour Bulgarianstandards. See Chapter IV for further informationon Bulgarianstandards. -9- 31. Lung canceris perhaps the most importantcancer of environmental concernand, fortunately,is the cancerfor which the most data are available. Thereit a tightgeographic clustering of the regionsthat had high lung cancerincidence rates in the early 1980s. The group of six contiguous districtsin SouthernBulgaria include many of the hot spot areas. In addition,the oil refiningdistrict of Burgasis representedas an area of high lung cancerincidence. 32. It is not surprising,therefore, that hot spots in Bulgariawere the targetof a numberof healthinvestigations. On the basis of these investigations,the paragraphsbelow describethe conditionsin the hot spot areas8 and summarizedocumented hialth effects.9 33. Pernik/Radomir(population 130,000): In Pernik,the major concernsare pollutionfrom a ferrousmetallurgy and a cementplant. Ambientairborne levelsof dust,sulphur dioxide, and lead (thereis lead in the iron ore) in the period1986-89 exceeded the standards.Average blood lead levelsfor adultsin Pernikin the early 1980swere 20-40micrograms per deciliter,which is quitehigh. Reportedincidence rates of chronicrespiratory diseases, allergicdiseases, and coronaryheart diseasewere 2-3 timesabove the nationalaverage. There is a strongcorrelation between local area variations in dust levelsin Pernikand their reportedincidence rates of asthma. Taken together,these data suggestthat both lead exposuresand respiratorysystem toxicityof environmentalorigins are legitimateconcerns in Pernik. 34. Kremikovtsi(population 14,000): The principleconcern in Kremikovtsi is pollutionfrom the steelmill. Averageblood lead levelsfor adultswere approximately25 microgramsper deciliterin the early1980s. Metabolitesof polycyclicaromatic hydrocarbons were found in 100 percentof the samplesfrom 200 adultsover the age of 15 (thisis not surprisingsince thereis a coke oven at the mill which wouldproduce PAHs). Under theseconditions one would be concernedabout lung cancerrisk. Like Pernik,the morbiditysurveillance systemshows evidence of an associationbetween airborne pollutants and respiratorydisease. Some studiessuggest chronically overstimulated immune systemfunctions in peoplein Kremikovtsi. 35. Plovdiv/Asenovgr(population 500,000): There is a lead and zinc smelternearby. Agricultureis stillcarried out on land adjacentto the smelterwith only a narrowzone of protection.The nearbyhills and the geographyof the settlementswithin them (in particular,the locationof Kouklen),exacerbate direct airborne spread of lead contaminateddust. Airbornedust, sulphurdioxide, and lead are commonproblems in Plovdivand Asenovgrad.Elevated blood lead levelsin children(above 10 microgramsper deciliter)are widespreadthroughout the Plovdiv/Asenovgradarea. In several settlementsin the area, the majorityof childrenare above 15 microgramsper deciliterand in the town of Kouklen,the majorityof childrenare above 25 microgramsper deciliter.Indeed, the averageblood lead levelin childrenin

8 For the locationof hot spots,see the map of EnvironmentalProblems in Bulgariaat the end of this report.

9 Annex 2 presentsthe findingson hot spots in more detail. It should be noted that occupationalhealth problems are not coveredby this study. The World Bank plans to carryout a comprehensivereview of the Bulgarianhealth sectorin the near futureand the issuesrelated to occupationalhealth will be addressedby that review. - 10 -

Kouklen is 33.5 microgramsper deciliter. Blood lead levels among adults in the Kouklen area are among the highest in Bulgaria. Tooth lead values in Plovdiv, Asenovgrad,and Kouklen demonstratethat long-termstorage of lead in children is highest among childrennearest the smelter. High lead levels are entering food which is being grown in the area and, likely,being consumed in the local area as well. However, no analyticalstudies are available that help define the relativecontributions of food, soil, housedust,and other sources in the total exposure to children. One study conductedaccording to the WHO protocol suggests that sustainedhigh lead exposuresto children in the area are influencingtheir ability to learn.

36. Srednogorie(population 25,000): Environmentalproblems in the area are caused by a copper smelter. Despite the fact that Srednogorieis a focal point of environmentaland public health concern in Bulgaria,data on health problems are very limited. Airborne levels of sulphur dioxide, arsenic, and sulfuric acid are elevated in the area. Average S02 concentrationsin December 1989 - January 1990 were reported at 1,500-1,800mikrograms per m, with one monitoring stationmeasuring 3,500 mikrogramsper i3, which is probably the highest average monthly concentrationmeasured in Bulgaria during the last two years.10 There are strong correlationsbetween the sulphur dioxide and sulfuric acid levels with incidencerates of chronic bronchitis, asthma, coronary heart disease and flu accordingto the morbiditysurveillance system, In 1989, Srednogorieseemed to have a high infant mortality rate.

37. Razlog (population23,000): The main concerns in Razlog are a pulp and paper mill and an animal feed plant. There are high airborne levels of hydrogen sulfide (which is toxic) and mercaptans (whose odor is particularly obnoxious). A health study showed increasesin the incidenceof asthma, skin diseases, and conjunctivitisafter the mill was.opened. Increasedlevels of skin sensitivitywere found as well as increasedwhite blood cell and eosinophilcounts, which may correspondto some form of heightenedimmune activity.

38. Devnwya(population 30,000): Devnya is the site of multiple industrial facilities includinga fertilizerplant, a PVC plant, a cement plant, a power plant, and a facility describedas a "carbideplant". The range of exposures in Devnya is very broad; dust, hydrogen sulfide, lead, ammonia, hydrogen fluoride,and sulfuricacid are all found in elevated levels in ambient air. The incidenceof a variety of respiratory,allergic, and irritant conditions was elevated in Devnya when compared to a control town using morbidity surveillanceregistry data. These findings led to a speciallydesigned questionnairesurvey of Devnya and the control town in which careful matching was done for age and smoking status. Some of the data from this study are presented in Annex 2 and show evidence of increasedrates of chronic bronchitis (and symptomsconsistent with bronc:.itis)in Devnya.

39. Dimitrovgrad(population 115,000): The main sources of concern in Dimitrovgradare fertilizer,cement, and power plants. High-rise apartments and other settlementshave been built right up to the plant gates, thus maximizing t;ueopportunities for exposure to these emissions. Dimitrovgrad experienceshigh levels of airborne dust, sulfur dioxide, hydrogen sulfide, lead, and hydrogen fluoride. Pulmonaryfunction studies performedon children ages 11 to 14 show reduced levels of "FEV10" and increasingdifferences

10 Source: Bulletin on the Status of Ambient Air and Water in Bulgaria, Ministry of Environment,Research and InformationCenter, September1990. - 11 -

compared to control groups as they get older1l. These data seem to show that, by age 14, boys and girls in Dimitrovgradhave lost approximately800 millilitersof FEVy0, which could be a very significantdevelopmental obstacle. Clinical evaluationsalso demonstratedincreased rates of obstructivebronchitis, chronic tonsillitisand laryngitis,and several forms of dental pathology among children from Dimitrovgrad. An analysis of their blood revealed increasedwhite blood cell counts, eosinophils,and immunoglobins,suggesting a chronicallystimulated immune system. Overall, this constellationof findings among a young populationis quite disturbing and vaises questionsabout the long-termconsequences of such a large proportionof childrenbeing affected one way or anotherby chronic conditions.

40. 3jts_a (population103,000): Vratsa is the site of chemical industries and a cement plant. There are high ambient levels of dust, sulfur dioxide, hydrogen sulfide, lead, ammonia, and sulfuric acid in the area. A study looking at the day-to-dayvariation in new reported cases of seven respiratory,allergic, or irritantdiseases in Vratsa revealed reasonably strong correlationsbetween the airborne pollutantsand medical encountersfor the diseases of interestwhen temperature,humidity, and wind speed have been taken in account. In certain parts of Vratsa there are high blood lead levels among children.

41. Fuse (population184,000): Ruse is an area of concernboth for local pollE Aon and transboundarypollution. Local industry includes as many as 80 industrialunits with the main sources of pollutionbeing a power station, an oil refinery,a plastics plant, and a plant producingpaints and lacquers. On the Romanian side there are three industrialzones. In the first zone there are emissionsof chlorine,alkalis, hydrochloricacid and chlorinatedorganic solvents. From the second industrialzone emissions includeepichlorohydrin and emi.qv4ons from a vulcanizingplant. In the third zone there are emissions of benzidine, and since 1989, problemswith waste waters going into the Danube River. Elevated levels of dust, oxides of nitrogen,hydrogen sulfide, lead, and hydrochloricacid were measured over the period 1979 to 1989. Studies demonstratedthat medical encountersfor asthma, acute bronchitis,flu, and conjunctivitisall increase dramaticallyon days with toxic fog compared to those days without. Studiesof chronic health problems were done by comparing the period before industrialfacilities were completedon the Romanian side of the border and afterwardsand suggestedan increase in asthma rates and in the incidenceof gross congenitalmalformations. A study of height, weight, and chest expansionamong the children in the area suggestedthat approximately50 percent were below their expected developmentallevel.

42. This account of hot spots is by no means comprehensive. Other towns such as Pleven (oil refining and cement plants) and Kurdzhali (non-ferrous metallurgy)clearly deserve considerationas well. Much of the health data from the hot spot areas could be criticizedon methodologicgrounds. Yet, it would seem to indicate that in those areas investigatedas hot spots, there are consistentproblems with lead overexposureand respiratorydisease, as well as hints of effects on immune function,childhood development, and possibly infant mortality and congenitalanomalies. There is reason to believe that the public health problems associatedwith environmental

1 This spirometrytest demonstrateshow much air a child can exhale over one second and is one of the most useful objectivemeasures of respiratoryfunction. - 12

pollution in strictlycircumscribed local areas within Bulgaria are every bit as intense as in the Silesia region of Poland or in Northern Bohemia.

43. Othber Miqalityissl . Despite the fact that only about 60 percent of electricityis produced by thermal power plants in Bulgaria,12 the country is a nignifLcantS0 2 polluter in Eastern Europe. In 1989, estimated total emissionswere 1.7 million tons of S02, 0.3 million tons of NO., 0.15 million tons of hydrocarbonsand over 2 million tons of other pollutants.13 In terms of SO2 and N0 emission intensity,Bulgaria ranks amongst the worst polluters in the world.1 4 Emissionsin the power sector,which is the biggest polluter,were estimatedat 1.3 million tons of S02, 150 thousand tons of N0O, 20 thousand tons of CO and 160 thousand tons of fly ash. 5 The bulk of the S2 is emittedby the three lignite fired power plants at the Maritza East complex with a total installedcapacity of 2,200 MW. The lignite reportedly has a 23 percent ash and 2 to 5 percent sulphur content. There is Tno desulphurizationequipment in the power plants, which means that the emission of S02 was at least 700,000 tons in 1990. Concentrationof S02 in flue gases could reach 9,000 milligramsper m3 (the EC standard is 400 milligramsper m3). Average daily S02 emissions from one of the point sources, the 325 meter high stack of the Maritza East III power plant, are estimated at more than 700 tons. All three power plants are equipped with electrostaticprecipitators for particulateswith a reported efficiencyof 98.5-99.2percent.

44. While the area nearby the power plants is not one of the "hottest spots" in the country,measured dust and S02 concentrationsare above the EC 16 standards. Reported annual average concentrationof dust and S02 ware, respectively,275 and 120 microgramsper m3 in Stara Zagora and 178 and 95 3 microgramsper m in Golubovo in 1989 (the concentrationof N02 - 230 3 1 microgramsper m - was also high in Golubovo).7 In addition to the power plants, the lignite drying operationof an old briquette factory next to the Maritza East I plant is also responsiblefor the high amount of particulates in the air. A cause for concern is the high sulphur content of the end- product; most of the briquette is burned by households living in densely populated areas (totalbriquette productionwas 1.5 million tons in 1990).

1 Total electricitygeneration was 42.1 billion kwh in 1990. Thermal power plants generated25.6 billion kwh electricity,the Kozloduy nuclear plant 14.7 billion kwh and hydropowerplants 1.8 billion kwh. Source: Energy in Bulgaria in Year 1990, Committeeof Energy, 1991.

13 Souzce:Annual Report on the Conditionof Environmentin Bulgaria for 1989 ("GreenBook") Ministry of Environment,1991, page 121.

lb See Table 3 in Annex 1.

15 Source: Report by the Committeeon Energy to the Ministry of. Environmenton EnvironmentalProblems, 1991.

16 EC annual average standardsare 150 and 80 micrograms per m3 for particulatesand S02,respectively(if the concentrationof suspended particulates is less than 40 microgramsper m3, the standard is 120 microgram 3 per m for SO2). The EC sets the 50th percentileof mean values of NO2 concentrationsrecorded throughoutthe year at 50 microgramsper m3.

17 Source:Annual Report on the Conditionof Environmentin Bulgaria for 1989 ("GreenBook"), Ministry of Environment,1991, page 92 and 96. - 13 -

4.... In addition to S02 emissions,home heating with briquette and coal is also a significantsource of particulates. While most of the S02 emissions in Bulgaria are dischargedfrom high stacks,particulates are concentratedin population centers where coal and briquetteare used for domestic heating and small and medium sized enterprisesrely on small coal fired boilers for space heating and process heat (0.9 million tons of coal and 1.4 million tons of briquettewas used by households in 1990). Measured annual average concentrationsof dust in the air in Sofia, Plovdiv, Varna, Ruse, Burgas, Stara Zagora, Devnya, Dimitrovgrad,Pernik and Pleven, i.e., in all large Bulgariancities, are above 150 microgramsper m3 (the EC standard).18

46. There are significantair pollutionproblems associatedwith auto, bus and truck traffic in the major urban centers. Total emissionsby vehicles (excludingC0 2) were estimatedat 1.2 million tons in 1988, including935,000 tons of CO, 152,000 tons of hydrocarbons,94,000 tons of NO., 24,000 tons of 9 S02, 20,000 tons of particulatematter and 350 tons of lead.1 The levels of lead and dust are quite high along major urban corridors. These levels appear to he quite closely associatedwith traffic,which is somewhat suprising in light of the relativelylow level of urban traffic compared to other European countries.20 This may in part be explainedby the highly polluting nature of the vehicles which are in the country. Most of the vehicles are old and poorly maintainedand have no pollutioncontrol equipment.

47. The latest informationon total heavy metal emissions into the air is from 1985. In that year the Bulgarianindustry produced the following emissions: 2812 tons of lead, 660 tons of zinc, 560 tons of copper, 77 tons of arsenic and 30 tons of cadmium and other heavy metals.2 1 The impact of these emissionson human health is describedabove. Effects on water and land resourcesare presented in the paragraphsbelow.

48. Drinkin& Water Quality. Ninety-eightpercent of the populationuses centralwater supplies;of these, 68 percent of water sources are groundwater and 32 percent are surfacewater. There aro a few water sources in the country with problems of haavy metal contamination. Between 1970 and 1980, approximately50 percent of sampleshad some lead and manganese present, 12 percent had cadmium and 76 percent had arsenic. While these were almost always below the standards,during that ten year time interval,however, 22 water supplies (11 percent of the suppliesbeing surveyed)were found to have one or more metal above the standard. Most of these (20 of 22 water supplies) representedexceedances of iron, manganese,and tin. Only one percent was for

18 Part of the problem may be caused by natural dust due to climate and inadequatestreet sweeping. In addition,the reliabilityof some of these measurementsis questionable. Also, the amount of suspendedparticulates in the air which are respirable is not known (healtheffects are associatedwith respirableparticulates). For further information,see Section E of Chapter IV on monitoring activities.

19 Source: Annual Report on the Conditionof Environmentin Bulgaria for 1989 ("GreenBook") Ministry of Environment,1991, page 112.

20 For example, there are only about 300,000vehicles in Sophia, since nearly 85Z of the populationrelies on public transportationto go to and from work.

21 Source: "Green Book", Ministry of Environment,1991. - 14 -

lead and arsenic. It has been estimatedthat 0.6 percent of the population of * Bulgaria gets its water from these supplies.

49. Informationon the water supply high in lead is a bit vague. Apparently it is in northwest Bulgaria in the Vratsa/Mikhailovgradarea where mining seems to be contaminatingthe water supply. The area reported to have high arsenic in the drinking water is in Pazardjik,which is downstreamfrom Srednogorie. Arsenic enters the TopolnitzaRiver from its tributaries,which are picking up arsenic from leachate from the smelter and the tailing piles in Srednogorie. Arsenic levels of 1440, 389, 1,072 and 470 microgramsper liter have been measured in the Topolnitza'stributaries up river. (The standard is 50 micrograms per liter). In some wells near the Topolnitzareservoir, arsenic was measured at levels between 19 and 286 microgramsper liter. These water supplies had been closed for human consumption,but this water is still being used to irrigate crops.

50. A more widespreadproblem in relation to drinkingwater quality is the level of nitrates in many water supplies. In three geographicalareas of the country, Turgoviste,Stara Zagora, and Burgas, the 10 year averagenitrate concentrationwas 70 to 100 milligramsper liter, with excursionsas high as 200 milligrams per liter.22 In six further areas, Pazardjik,Kurdzhali, Yambol, Sliven, Varna and Tolbouchin,the 10 year average levels were 50 to 70 milligramsper liter. In all nine areas the general trend for nitrate concentrationsis upward. In the former 3 areas, 70 to 80 percent of the population are exposed to nitrate drinkingwater above the standards. In the next six areas mentioned (as well as two others) 35 to 45 percent of the people have drinkingwater above the nitrate standard. Finally, in eight other areas of the country,between two and 30 percent of the populationhave increasednitrates in their water.

51. Regardinghuman health outcomes from high nitrate levels in water, most interestingis the problem of methemoglobinemiain newborns ("blue baby" sindrome)23. Pregnantwomen in areas of high nitrate water are given prenatal counsellingto boil the water which will be used for baby food and formula. There is a lack of evidence of methemoglobinemiawhich is quite startling. In comparisonto Hungary,nitrate pollution is much more widespreadand the public health measures used to protect against it are much more limited. Yet, in Hungary dozens of cases of methemoglobinemiaare reported to occur each year, includingseveral deaths. The question of organochlorine,organophosphorus, and other pesticides in drinking water does not seem to be a problem. Since August 1989, a policy has been put in place to define two zones of protectionaround drinkingwater sources. The inner zone, Zone A, is not allowed to have fertilizerson it. The next zone, Zone B, is allowed to have some vegetablesgrown with only a very small amount of fertilizerallowed.

52. Food contamination. In Bulgaria,the study of soil and food pollution appear to be largely divorced from one another and divorced from the question of the total exposure of toxic substancesto the human population. In some locations,such as Asenovgradand Kuklen, significantexposures may occur both

22 The EC standard is 50 milligramsper liter.

23 Methemoglobinemiais a form of.chemicalasphyxiation caused by excess nitrate circulatingin the bloodstreamof newborns. It is a life-threatening conditioning. - 15 .

through the food supply and through direct and indirect contact with contaminatedsoil. Case-controlstudies with the power to systematically identify the relative contributionof differentsources of lead exposure to children have not been carried out.

53. Between 1986 and 1989, the average total daily intake of lead was estimatedby sampling meals in residentialinstitutions for nursery school age children (less than three years old), kindergarten,and school age children in Sofia City and District,Plovdiv, Varna, Veliko-Turnovo,Stara Zagora, and Pleven. The results of these studies show that both nursery school and kindergartenchildren were receivingdaily lead intakeswell in excess of the FAO permissibletotal daily intakes24. This was occurring in all seasons of the year and, it was reported, the lead concentrationsincreased in each of the succeedingyears of the study.

54. These data beg the question of whether or not the problem with the food supply is a general one, or one related to specificproblem sources that become contaminatedat farms in hot spot areas or during the processingphase. There is no comprehensiveinformation available to answer that question. This tends to support the contentionof those who say that the food monitoring data is in a chaotic and non-functionalstate. In fact, it is claimed that the results of routine monitoringof food are not retained,even in a non-computer-readableform. There has, however, been one study on the lead content of instant baby food cereals from the only factory in the country. This factory, in Svishtov,gets its food inputs from all over the country. Of 66 food samples taken between 1986 and 1989, only four were below the lead standard of 0.1 mg per kilogram. The values ranged from 0.08 to 0.93 mg per kilogram,most of them in excess of 0.33 mg per kilogram.

55. Because of the issue of soil contaminationand contaminationof the food supply, stomach and colon cancer theoreticallydeserve special consideration as signs of potentiallyenvironmentally related morbidity and mortality. However, environmentalinfluences on stomach and colon cancer have not been well documentedin epidemiologicstudies in other parts of the world. Based on stomach cancer incidencerates by 28 districts from 1981 to 1985, Plovdiv, a district with several industrialsources of soil and food pollution,appears to have high incidencerates for stomach cancer as well as for colon cancer for males and females. Gabrovo,V. Turnovo, Ruse, Pazardjik,Rurdzhali are representedas areas of high stomach cancer.

56. In summary, the problems of soil and food contaminationwith heavy metals, lead in particular,are a significantpublic health problem in Bulgaria. However, the extent of the problem has been inadequately documented,largely due to lack of coordinatedefforts between the agencies involved and lack of appropriatestudy methodologies. B. EcologicalEffects

57. Surface waters. The average annual runoff from surface streams in Bulgaria totals about 20 billion cubic meters. Runoff flows into three drainage basins, the Black Sea, the Danube (and then into the Black Sea), and the Aegean Sea (see Table 2 below). The Danube is the largest recipientof runoff.

24 See Figure 4 in Annex 1. - 16

Table 2. SurfaceWater Hydrology and Runoff

Average Annual Drainage Area Runoff X of Bulgaria M Black Sea 20 2.0 Danube 40 10.5 Aegean Sea AQ 7.S TOTAL 100 20

58. Only one (Mesta)out of the 13 major rivers can be consideredrelatively clean in Bulgaria, i.e., the river meets the standardsset for recreational use at all monitoringpoints (class II river).25 The Beli Lom and the Danube do not meet these standardsat any monitoringpoints. From the remaining ten rivers, more than 50 percent of the length of six rivers (Arda, Iantra, Iskar, Maritza, Osam and Tundza) are seriouslypolluted (class III or below).26 Industrialplants, city sewage, and feedlots27 spew a steady stream of contaminants- chemicals,heavy metals, sewage effluent - into rivers. Industrialaccidents/spills occur with regularity. Many towns have no sewage treatment facility.28

59. The Maritza river furnishesirrigation water for a rich agricultural zone. Its situationvis-a-vis contaminationis typical of other rivers in the country. With the exceptionof Plovdiv, Bulgaria'ssecond largest city, the towns and villages along the Maritza have no sewage treatmentplants. Biologicallycontaminated effluent enters the Maritza "drain" at each town and from numerous animal feedlots,such as the one at Manole which is a "home" to 130,000 swine. Maritza tributariesTopolnitza and Luda Jana contributeheavy metal pollutants,lead, arsenic, and copper from the smelter at Srednogorie. The Bedetchka is loaded with sewage from feedlots and nitrates and phenols from the industrialplants at Stara Zagora. The Sazlika contributessuspended

25 The Bulgarianambient water quality standardsare analyzed in Section C of Chapter 4.

2S See tables 4-15 in Annex 1 for an overview of the principal contaminationproblems (BOD5, NH3 , NO3, suspendedsolids, oils, heavy metals) encounteredat various controlpoints along the 13 major rivers. Annex 3 describes in more detail the conditionsof these rivers.

27 There are 5400 active feedlots in Bulgaria. Waste waters from feedlots are estimatedat 33 million cubic meters per year. Waters from feedlots are treated and then discharged into inland waterways. For the most part, treatment is unsatisfactory. Two-thirdsof the feedlots do not meet environmentalstandards. Approximately15 percent.ofthe feedlots (830) have installed technically-advancedwaste water treatmentfacilities, but only a fraction of these (46) work properly. Source:Naidenov, N. and Marguerata Voicheva, Economic ProblemsResponding to EnvironmentalRequirements in IndustrialFeedlot Operations,International Agrarian and IndustrialMagazine, Volume II, 1990, pp 75-78.

28 Settlementswith a popiulationabove 50,000 people usually have sewage systems (municipalsewage systems has a total length of 7700 km covering about half of the streets in Bulgariancities). However, only about one third of the sewage systems (i.e., 60 out of 187) have effectivetreatment facilities. -17-

solids from power stations and coal fields. In the lower reaches of the Maritza, lack of oxygen is observed during drought periods. What is observed is a river thAt receives diverse contaminationfrom a variety of sources.

60. Comprehensivehydrobiological evaluationof the major rivers was carried out in 1987. A trend of transformationand reductionof species diversitywas observed. The diversityof river bottom communitieswas poorest in the Maritza, Iskar, RussenskyLom, Kamchia, Yantra and Arda rivers. The number of species decreasedby 30 percentbetween river classes II and III and by another 45 percent when the river fall below class III.

61. A problem which is not well reported is radiation. Due to the operation of the Boukhovo/Eleshnitsauranium enrichmentplant, waterborneuranium levels ranged from 1.5 x 10-5 to 1.5 x 10- grams per liter in the Lesnowska river in 1972. The radium levels ranged from 1.3 x 10-11to 1.2 x 10-12curies per liter, although the problem does not appear serious since measured radium levels in the river are within internationallyaccepted drinking water standards.2 9 The Lesnowska river is no longer availablefor irrigation, however, it is not clear whether or not the the "no irrigation"order is effectivelyenforced.

62. There is anecdotalevidence of radioactive,waste leakage from the Kozloduy nuclear power plant 125 miles north of Sofia on the Danube.30 Leakagewas allegedlydischarged into the drainage canal of the irrigation system and into the Danube. The dischargehas resulted in cordoningoff of the lower portion of the irrigationsystem which is consideredto be a health hazard to irrigationworkers.

63. Groundwaterresources are estimatedat 3 billion cubic meter (bcm). Annual extractionis on the order of 1.7 bcm and is estimatedby sector as follows:

Table 3. GroundwaterExtraction 3 l Annual extraction (mcm) (1) PotableWater 666 39 IndustrialUses 534 31 Irrigation 333 20 Other 165 10 TOTAL 1698 100

64. Due to severalyears of drought, the North East portion of Bulgaria (DobrudjaRegion) is one where groundwaterirrigation is practiced and where

29 For example, the Canadian drinkingwater standard for radium is maximum 2.7 x 10-11curies per liter.

30 More informationon radiationmeasurements in Kozloduy are presented in Annex 4. Annex 4 also outlines the problem of nuclear safety,however, the complex issues related to that problem are addressedmore extensivelyin the Bulgaria Energy Strategy Study prepared by the World Bank in cooperationwith severalmulti- and bilateraldevelopment agencies.

31 Source: Annual Report on the Conditionof Environmentin Bulgaria for 1989, ("Green Book"),Hinistry of Environment,1991, Table 4.6. - 18 -

water levels have fallen. Near the town of Shumen, monitoringof one well showed a 4-meter, steady drop, in the water level between 1983 and 1989. The areal extent of this potentialproblem has not been determined. Although use of groundwaterfor irrigationpurposes accounts for 20 percent of the groundwaterextraction, only 40,000 ha (less than 4 percent) of Bulgaria's irrigationsector depends on irrigation. There is relatively little informationabout over-exploitationof groundwater. Groundwaterdepletion could be a serious environmentalconcern.

65. Zones for the protectionof groundwaterare establishedonly around drinking water wells (see paragraph 51 above). Measures are also needed for the protection of aquifersby controllingthe developmentand use of recharge (infiltration)areas. After hydrogeologicalstudies locate the aquifers and their infiltrationareas, protectionzones should be establishedand regulation introducedto control land use practices.

66. For irrigationuse, mineralization(salinity or electrical conductivity) of waters is the chief concern. Waters in the range of 750-2250 milligrams/l are acceptablefor irrigationpurposes 32 if drainage is provided and if the crops irrigatedare relativelysalt tolerant. There are relatively few occurrencesof water samples in Bulgaria which present a high salinityhazard. In general, Bulgarian groundwateris suitable for irrigationpurposes.

67. Contaminationof groundwaterby sulfates is most prevalentin East Thracia (Dimitrovgradand Stara Zagora) and in Bourgas. Contaminationwith sulfates was most common in the period 1982-85with 10-13 occurrencesin excess of norms. The number of occurrencesbetween 1987 and 1989 was between five and six. Excessivelevels of nitrates are most prevalent in West Thracia (Plovdiv),North Bulgaria,Varna, and East Thracia.33 Similar to sulfates, the peak period for nitrate contaminationwas 1983-86 and thereafterthere have been fewer analyses exceedingnorms.

68. Sulfatesand nitrates in excess of norms may be associatedwith applicationsof ammoniumnitrate and ammonium sulfate which were applied in heavier doses in the early-to-mid1980s than later in the decade (see paragraph 85 below). Excessivenitrate concentrationscommonly can be associatedwith animal feedlot operations. Excess nitrate concentrationsare more of a human health hazard than a problem for agriculturaluse of the water (on human health effects, see paragraph 51 above).

69. Chloride levels in excess of norms are reported from East Thracia and from North Bulgaria. These same two areas account for the highest levels of salts (mineralization)in groundwaters. Unlike reported sulfates and nitrates which peaked in the early to mid 1980s, chloridesand salinity appear rather constant with time. At levels in excess of 100 milligrams/l,chloride can burn the leaves of sensitivecrops (eg., stone fruits) if applied through sprinkler irrigation. The concentrationof chloride found in Bulgarian groundwateris substantiallybelow that threshold. However, selenium and

32 By way of comparison,the ColoradoRiver at Yuma Arizona typically has a concentrationof salts on the order of 1000 milligrams/l. It is used for irrigationpurposes. Groundwaterused for irrigationon the Westside of the San Joaquin Valley in Californiahas concentrationsbetween 1500 and 2000 milligrams/l.

33 See Figure 5 in Annex 1. 19 -

arsenic were found to be above recommendedmaximum concentrationsfor irrigationwaters. 34 The origin of the arsenic problem is described in paragraph 49 above.

70. Residues from DDT and DDE are in the nanogram range, 10-9milligrams/l, in all Bulgarian groundwater,surface water and Black Sea water. This is an acceptablebackground level. Use of chlorinatedhydrocarbons was banned in Bulgaria in the late 1960's. Organo phosphatesare sometimes (rarely) found in groundwater. Concentrationsare very low (less than one microgram/l). Herbicideshave not been found in Bulgaria'sgroundwaters.

71. Coastal waters. 650 thousandm 3 of wastewater are discharged daily in the Bulgariancoast of the Black Sea. 73 percent of that are of industrial origin, the rest is communalwaste. 34 percent flow directly to the sea, 36 percent to Lake Beloslav and 30 percent to Lake Varna. 31 percent are treated according to the standards,49 percent are only partly treated and 20 percent are not treated at all. From the amount of wastewater released directly to the sea, 46 percent are of industrialorigin. Most of that comes from the Neftochimoil refinery and petrochemicalcomplex near Burgas, which discharges into a small lake (Vaya) immediatelydraining into Burgas Bay. The pollutant load from Bulgariancoastal sources is dwarfed by the 800+ million m3 daily inflow from the rivers in the northwestquadrant of the Black Sea (Danube, Dniestr, Dnepr). Inflow from these rivers contribute75-80% of the total pollution affectingthe sea.35

72. With the exceptionof the area around the Burgas port and the cities of Burgas and Varna, the sea along the coast reportedlymeets the standardsset for recreationuse. However, organic contenthas been increasing over a long period of time, and the incidenceof eutrophicationhas been more frequentand more prolonged in recent years. The problem in the Burgas Bay is caused by nutrientsrich sewage from Burgas and inadequatelytreated wastewater from the Neftochimrefinery complex, exacerbatedby local currents and wind conditions which limit circulationand mixing with the sea.36 The high eutrophication of the Varna Bay is caused by untreatedsewage and industrialwastewaters, mostly coming from the chemical plants in Devnya.

34 Maximum recommendedconcentrations in irrigationwaters are: Pb - 5 mg/l, Ni - 0.2 mg/l, Se - 0.02 mg/l, As - 0.1 mg/l, Cd - 0.01 mg/l. Source: Irrigationwith ReclaimedMunicipal Wastewater, California State Water ResourcesControl Board Report Number 84-1 wr, July 1984, p 3-14 to 3-15.

35 Source: L. Ivanov and R.J.H. Beverton: The FisheriesResources of the Mediterranean,Part two: Black Sea. FAO/UN, Rome, 1985. Ivanov and Beverton estimated the total inflow from the northwesternregion of the Black Sea at 805 million m3./day. There are a number of estimatesof inflow from the Danube: Belbarov (Instituteof Oceanology)estimates 300 million m3 /day; the Instituteof Ecology estimates 173-430; the estimate in the Danube Conference (1991)working paper is 475.

36 In addition, the operationof the port in the Burgas Bay presents potentiallyserious problems. Port Burgas handles 12-17 million tons of crude oil annually,and 1500-1600vessels of all sizes. The equipmentfor handling bilge-waterand ballast water for oil removal is small and antiquated,and entirely inadequateto cope with a major oil spill. Additionally,there is no collectionand treatmentsystem at the oil port itself to handle ballast water and on-site oil recovery. * 20 -

73. There has been a drastic decline in the catch of fish from the Black Sea. The Bulgarian catch has decreasedfrom over 19,000 tons in 1981 to barely 2000 tons in 1990 (See Table 4 below). The decrease is nine-fold in just nine years. Previous research37 and more recent historical data38 points to over-fishingas the leading cause. Continuingand increased pollution from rivers and land based sourcesno doubt contributes significantlyto the decline in fish stocks. Data on fish catch in neighboringcountries verifies the general decline of fish stocks in the Black Sea. A solutionmust involveagreement between the countriesbordering on the Black Sea (Bulgaria,Romania, Turkey, Russia, Georgia and Ukraine). A Conventionon Fishing in the Black Sea h,asexisted since 1959, but Turkey has not been a participant. Continueddeclines in catches indicate that the limitationsare not adequate,or not adequatelyenforced. The prospective Conventionon the Protectionof the Black Sea addresses the pollution issue, but does not address fishing limitationsand other natural resourcemanagement issues. Existing researchprovides ample rational for developmentof an immediateaction plan. Additionalmonitoring and research is warranted, but urgent action is essentialto ward off an impendingecological disaster. 39

Table 4. Bulgaria:Catch of Fish in the Black Sea40 Coastal By Fishing Ships Total sear --- fish (metric tons) --- 1981 752 18,906 19,658 1982 440 17,010 17,450 1983 654 13,058 13,712 1984 985 13,931 14,916 1985 1,264 14,661 15,925 1986 907 11,570 12,477 1988 657 7,-327 7,984 1989 535 7,065 7,600 1990 393 1,743 2,036

?4. Land resources. There are 11.0 million hectar (ha) of land in Bulgaria, classifiedas follows: agriculturalarea, 6.8 million ha; forests, 3.9 million ha; urban/industrialareas 0.4 million ha. Managed agriculturallands total 6.2 million ha of which 4.6 million ha are in crops and 1.5 million ha are in pasture. Field crops (wheat,maize, alfalfa, barley, and sunflower)total approximately3.9 million ha, while orchards,vineyards and other permanent crops total 0.3 million ha.

75. Approximately20 percent of Bulgaria'sagricultural, forest and urban lands are degraded or polluted (see Table 5 below). Natural causes such as erosion and acidificationaccount for nearly 80 percent of the areas affected. Economic activitieshave compoundedthe erosion and acidificationprocesses,

37 L. Ivanov and R.J.H. Beverton (1985)

38 P. Kolarov, Bulgaria Research Instituteof Fisheries,Varna, 1991.

39 See Annex 5 for further details on the Bulgarian coastal zone and on environmentalproblems of the Black Sea.

40 Source: Central StatisticsOffice, Books 6303, 6307, 8565, 8561. - 21 - may have worsened waterloggingand salinityproblems, caused contamination throughheavy metal depositionand spoilageby mining.

Table 5. Bulgaria:pegraded/Polluted Lands 4l

1985 1989 (h.e.ectares) Eroded Lands 1,022,000 1,164,000 Acid Soils 478,000 567,000 WaterloggedLands 300,000 315,000 Mining-affectedLands 89,000 Contaminatedby Heavy Metals 41,000 46,000 SalinizedLands 28.000 30.000 TOTAL 1,869,000 2,211,000

76. Estimatesare that 7-15 percent of the lands in Bulgaria are somewhat affected by erosion. The potentialfor erosion is estimated to vary between an additional seven percent of the area up to two-thirdsof Bulgaria'sarea. Steeply-slopingand thereforepotentially erodible agriculturallands total 3.2 million ha, or somewhat less than half of the agriculturalland. An estimated 1.7 million ha can be subject to wind erosion.42 However, based on visual impression,the vast majority of the land is protectedby vegetative cover. Comparedwith other degradationand pollutionprocesses affecting lands and waters, erosion is not among the most importantproblems.

77. Low pH soils are prevalentover an estimated 567,000 to 810,000ha, or 5-7 percent of Bulgaria'sarea. Very strongly acidic soils43 cover 350,000 ha; 460,000 ha have a pH of 4.5-5.5. Many of these soils were naturally acidic, However, heavy applicationsof fertilizers,in particularammonium nitrate and urea, which have residual acid forming properties,can contribute to the problem. Although difficultto quantify,acid-rain may also contribute to the problem. Low pH soils can negativelyaffect crop production through impeded root growth and immobilizationof micro nutrients. These soils can be improved through liming (althoughBulgaria has limestone,no industryhas developed to promote use of limestonefor agriculturalpurposes).

78. Emissions from industrialplants have contaminated46,000 ha44 with concentrationsof heavy metals (arsenic,cadmium, copper,mercury, iron/manganese,lead, nickel and zinc) in excess of standards45. Additionally,100,000-130,000 ha of agriculturallands have received

41 Source: "Green Book", Ministry of Environment,1991, Tables 5.2 and 5.4.

42 In comparison,it is estimatedthat erosion is the dominant conservationproblem on 286 million ha, about one-half of agriculturalland in the United States. It is a problem that requires constant attentionon 89 million ha of cropland or about 15 percent of farm land.

43 pH of the surfacehorizon less than 4.5

44 See Table 17 in Annex 1.

4 The Bulgarian standards,which are similar to internationally accepted standards, are listed in Table 18 in Annex 1. 22 -

contaminationby heavy metals, though concentrationsare judged to be less of a hazard.

79. Table 6 below presents quantitativedata on soil metal levels for three hot spots. In the Plovdiv/Asenovgradarea, the main concern is lead in the soil, as a result of emissionsfrom the lead-zincsmelter which sits right in the middle of prime agriculturalland. It can be seen from the table that more than 36 percent of the lead samples taken in the mid 1980s were above the lead standard (after adjustmentfor pH). Lead levels of several hundred to 1,000 ppm in crop growingareas are very high, and tend to validate concerns about foodborne lead exposures.

Table 6. Level of Metals in Soil in Hot Spot Areas. 198

Region Lead Arsenic Cadmium Mercury Range X of Range X of Range Range location location (ppm) > stand, (ppm) > stand, (13Dm) (ppm)

Plovdiv/ 12-1035 36.7 3-59 7.3 0.01-14.35 0.01-0.67 Asenovgrad

Pazardjik 9- 364 10.6 3-115 20.5 0.01- 3.15 0.01-0.41

Kremikovtsi 180 -" 35- 40 -- (average)

80. The second row of data on Table 6 supports the concern about arsenic in soils in the Pazardjikarea. Here, 20 percent of the soils exceeded the arsenic standard of 25 ppm. The reason for this is that water from the TopolnitzaRiver which picks up arsenic from the Srednogoriecopper smelter is used for irrigationon farms in the area of Pazardjik. This is a rice growing area and flooding techniquesare essentialto the agriculturalprocess. Water from the TopolnitzaRiver is being used less now in rice production than it has been before and rice productionhas declined 40 percent in the last few years.

81. The third row of data in Table 6 reflects current investigationsof soil metals in the Kremikovtsiarea. Here, there is concernwith heavy metal depositionwithin three kilometersdownwind of the steel mill and leaching from the waste pile at the mill. Lead, cadmium, and arsenic are the principal concerns. It is not clear whether the soil samples specificallycome from allotmentgardens in the area or not. Nonetheless,average soil lead levels of 180 ppm reflect a range which is unacceptablefor growing crops. Similarly,a range of arsenic levels between 35 and 40 ppm is unacceptably high.

82. In summary, contaminationfrom heavy metals representsa serioushazard to crops and livestockin affected areas.46 Steps must be taken to; (i) curtail Doint source emissions:(ii) revise practicesof land use (for

46 Uptake of heavy metals by plants is estimatedto be 80 percent from dusting of leaves and 20 percent from uptake from soils. Heavy metals accumulate in plant materialsbut not normally in seed/grain. In animals, heavy metals are found in livers, kidneys and muscles. - 23 -

e~cample.switching from rice tq unirrigatedcrops in areas receivingarsenic- contaminatedwaters in Topolnitz Rgeservoir):and (iii_ where economically Justi£ied.-_ laim lands in affected areas so that cropnlivestockproduction . 5 1 ~~~~~47

83. Mining, quarryingand constructionoperations have adverselyaffected 89,000 ha (174000ha forest lands and 72,000 ha agricultureland), or less than one percent of Bulgaria'sland area.48 Open pit mines have disturbed more land than considerednecessary and reclamationactivities have received little attention.49

84, Bulgarianfarms have been applying 85-105 kg nitrogen per ha, 50-75 kg P205 per ha, and 20-25 kg K20 per ha in inorganicfertilizers (see Table 7 below). Total elementalN + P + K applicationshave been in the range 170-200 kg per ha. Compared with other countries,Bulgaria is near the low end of the scale in inorganicfertilizer applications. 50

Table 7. Bulgaria:Fertilizer Applications. 1980.9051

Average Application(kg/ha) Nitrogen 2-5 2Q N + P +K 1980 100 65 21 186 1981 115 93 27 235 1982 120 84 35 239 1983 124 78 24 226 1984 109 76 23 208 1985 107 60 22 189 1986 104 53 26 183 1987 96 51 20 167 1988 123 65 22 210 1989 102 49 21 172 1990 87 15 24 126

47 One of the privatizationissues faced by the governmentis whether or not to turn over contaminatedlands to private individuals. The governmentis opposing turnover of such lands pending their reclamation. However, neither a plan for reclamationnor funding for it are in sight.

48 Source:Annual Report on the Conditionof the Environmentin Bulgaria for 1989, ("GreenBook"), Ministry of the Environment,1991, Table 5.4.

49 See Annex 6 on the impact of coal mining operationson land resources.

50 See Table 19 in Annex 1.

51 Source: calculationsbased on Bulgaria'sproduction and imports of fertilizers,and a cropped area of 4.6 million ha. Data from Ministry of Agriculture,Sofia and from IBRD report "Bulgaria:Introduction to the AgriculturalSector", July 1990. - 24 -

85. There was a 5- to 15-fold increase in fertilizerprices in 1990.52 Farms have already reduced and will continue to reduce purchased fertilizer inputs. Particularlyaffected will be applicationsof phosphatic fertilizers. Triple Super Phosphate (TSP) is the main phosphaticfertilizer used in Bulgaria. Although the country produces as well as importsTSP, all the raw material (rock phosphate)must be imported. Imports of rock phosphatewere sharply reduced in 1990 due to Bulgaria'sdifficult monetary position. Bulgaria produces Ammonium Nitrate and Urea, exporting65,000 to 80,000 mt of Urea annually. All potassiumfertilizers are imported.

86. Because many forms of nitrogen are mobile, use of nitrogenous fertilizers.areof particularconcern to the environment. If excess quantitiesof nitrogenousfertilizers are applied,nitrogen could be a contaminantof groundwater. This is a.special risk on sandy soils and in Karst regions. Excess nitrogen in surfacewaters could contributeto algae growth and eutrophicationof lakes. Rates of applicationof nitrogen of 85- 105 kg/ha are within the range required to support crop growth. However, nitrogenousfertilizer requirements calculated for typical crops in Bulgaria indicate that nitrogen applicationsmay still be excessive.53 A calculated requirementfor 292,000mt should be compared against the 1990 estimateduse of 400,000 mt. Thus, applicationof nitrogenousfertilizers were estimated to be 37 percent in excess of crop requirements. Although use of nitrogenous fertilizerswill likely be reducedbecause of recent price increases,nitrate occurrence In groundwater(see paragraph64 above) warrants continued monitoring. An additional5-10 percent of nitrogen is estimatedto be supplied as manure. However, applicationis restrictedto farms with access to manure. Because of the marked increase in prices for inorganic fertilizers,farms will be expected to use more manure.

87. Until 1989, phosphorususage was on the order of 50-70 kg P205 per ha, which is within the normal range to meet crop requirements. O,iceapplied to the land, phosphorus is not very mobile. Ercosionalprocesses can result in phosphorus removal to waters which can stimulatealgae growth. There are no reports of such occurrencesfor the country. In 1990, applicationof P205 plummeted to 15 kg per ha in response to (1) Bulgaria'sreduced ability to expend hard currency for imports, (2) the high cost of the raw material particularlyin view of the devaluationof the Leva, and (3) reduced demand by farmers who lack funds for purchase of inputs. Applicationof potassium, mostly as KC1, is on the order of 20 kg K20 per ha. Potassiumis used particularlyfor greenhouseproduction and for tobacco.

88. Bulgarian agriculturehas been a large consumer of Resticides. Imports of herbicides, insecticidesand fungicidesaveraged 20,000-25,000mt annually from 1982-1988. The.cost to the country was about US$40 million'annually. In the past two years, importshave baen reduced to 13,000-14,000mt each year because of Bulgaria's lack of foreign exchange. In the last year, pesticide prices have increasedby a factor of ten which 'furtherdampens demand. Until the past 12 months, pesticideswere provided to agriculturalcomplexes at subsidizedprices. Most farms appliedherbicides to grain crops; most crops received one or more applications'ofinsecticides. Farms are currentlyusing stocks on hand and are expected to reduce applicationof farm chemicals. While positive for the environment,reduced applicationsof pesticides are apt

52 See Table 20'in Annex 1.

53 See Table 21 in Annex 1. v 25 -

to have a negative impact upon agriculturalproduction. 54 To resolve this problem, increasedemphasis must be placed on IntegratedPest Management (IPM), crop rotations,and mechanical tillage for weed control. Farm units and pesticide applicationenterprises do not properly dispose of bags and metal containerswhich containedpesticides.

89. Land disposal is the primary method in Bulgaria for managing industrial j.jagMamLeS solid waste. The actual number of landfillsfor domesticwaste is largelyunknown. The Ministry of Environmentestimates that there are approximately1600 landfillsfor disposingof municipalsolid waste, occupying a total area of more than 500 hectares. However, it is known that almost every pepulatedarea, no matter how small, has a landfill for domesticwaste. Many of these are uncontrolledopen dumps. Domestic waste management firms which col'ect and dispose of municipal refuse generallyserve only the larger communities,i.e., there are only about 290 towns and not more than 1000 villages served by these firms.55 While there are no incineratorsor compostingplants for municipalwaste, a few small incineratorsare available for the disposal of medical waste and some industrieshave incineratorsfor burning their own industrialwaste. Programs for recyclingof paper, plastics, glass, textiles,ferrous and non-ferrousmetals exist and the use of slag, ash and calcium sulphate sludge in cement and related industriesis common.56

90. The main source of hazardous waste is the industrialsector. It is estimated that about 2.5 million tons of hazardouswaste is generated each year, including1.3 million tons of solid wastes, 0.1 million tons of liquid waste and 1.0 million tons of pastes and sludge.57 Approximately20 percent of hazardouswaste is recycled for secondaryutilization. Industrial enterprisesgenerally store or dispose of their waste on their own property. Huge waste dumps exist beside virtuallyevery large industrialenterprise in Bulgaria,often on valuable agriculturalland. 58 Although the exact volume is unknown, some portion of the industrialwastes generatedby large enterprisesare disposed of in municipalland fills. Smaller industrial enterprisestypically send their wastes to municipaldumps resulting in the inappropriatemixing, or co-disposal,of hazardousand domesticwaste.

54 A comparisonof Bulgaria'suse of pesticideswith other countries is presented in Table 22 in Annex 1.

ss In comparison,there are about 5300 towns and villages in Bulgaria and of these towns, about 3000 have fewer than 1000 residents. So See Table 23 in Annex 1.

57 See Table 24 in Annex 1. Estimatesmay be highly inaccuratebecause there is no specific reportingsystem to account for the hazardousmaterials generated in Bulgaria.

58 The waste dump adjacent to the Kremikovtsisteel mill, for example, rises the size of a hill on an otherwise flat terrain. There is no soil or other cover to protect against rainfall infiltrationor wind erosion. Groundwatermonitoring to detect transportof contamination,leachate collectionsystems and landfill liners are non-existent. The City of Sofia is presently examiningthe feasibilityof recoveringsome of the valuable materials that have been dumped at the site. -26-

Thermal ash producers dispose of their waste in monofills. None of the enterprises'disposal areas or municipaldumps are lined to impede off-site leachatemigration. Soil is being contaminatedby leachate and wind drift from waste piles and slag heaps.

91. It is becoming more and more difficultto find appropriatelocations for opening new landfills. About eight towns/municipalitiesin Bulgaria were describedas being in an "emergency"situation with regard to remaining landfill space, includingSofia. In addition,there is a problem with the illegal dumping of wastes along roadsidesand near rivers and streams. In an effort to save the high fuel costs of transportingwaste to a municipal landfill,some enterpriseswith responsibilityfor managing domesticwaste will either not pick up the waste at all or will illegallydump the waste along highways or river banks (constructiondebris seems to be a particular problem).

92. Forests. Thirty-fivepercent of Bulgaria'sland area is forest land (3,236,800ha). Approximately84 percent of the forest land is state owned. The remainderis controlledby municipalities,cooperatives, and churches. Prior to 1947 when the state took controlof most forests, ownershipwas as follows: municipal,57 percent; state, 28 percent; private, 13.5 percent; churches,1.5 percent.59 Accordingto the new land law, forestrywill remain a state responsibility.

93. Bulgaria is managing its forest resourcesvery effectivelyfor preservationof standing timber reserves. Data for 30 years show steady and substantialgrowth in the volume of its timber.resoua.ies.6 0 Since 1960, the volume of standing timber has increasedby an average of two percent yearly or 62 percent overall. Relative to 1960, Bulgaria'sarea in forests has increasedonly slightly. Table 8 below contains data for 30 years regarding forest resourcesas measured by areas forested and volume of standing timber.

Table 8. Forests in Bulgaria. 1960-199061

PlantedArea Volume Timber Aver. Age Year (hectares) -X- (meters3) -X- Forest (yrs)

1960 3,189,741 100 243,477,900 100 37 1965 3,049,397 95.6 247,472,180 .101.6 37 1970 3,066,594 96.1 256,851,880 105.5 37 1975 3,134,258 98.3 267,781,105 110.0 38 1980 3,199,936 100.3 296,379,226 121.7 38 1985 3,229,369 101.2 336,200,397 138.1 40 1990 3,236,758 101.5 395,627,769 -162.4 42

59 Source: AGROLESPROJECT

60 See Figure 6 in Annex 1.

61 Source: AGROLESPROJECT,1990. Summary data presented in the table were compiled by AGROLESPROJECTfrom on-going (annual)surveys conductedby each of the 164 state forestry-enterprises.Data are for state owned forest area only. - 27 -

94. Gains in forest reserves are due to increasesin conifers. The area planted to coniferousforests and the standingvolume of coniferous timber has more than doubled in the 30-yearperiod. However, this gain is partially offset by a 28 percent decline in the area of deciduousforests and by a 8 percent decline in the deciduoustimber volume. Approximately30 percent of Bulgaria's forests are not natural and 70 percent have been afforested.62 Since 1965, plantingshave exceeded deforestationby an average of 9000 ha per year. From 1980-85, more than 40,000 ha per year were replanted;from 1986- 90, replantingswere on the order of 30,000 ha per year; in 1988, plantings includingafforestation under existing stands and new plantings totaled 28,000 ha.

95. In order of importanceby area, principalspecies found in Bulgaria are: Oak, Scotch Pine, Beech, Black Pine, Turkey (Cerris)Oak, Caspinus, Spruce, and White Beech. Since 1960, conifers show sharp increasesin area and timber volume; the area and volume of hardwood specieshas decreased, although since 1975, hardwoods too have increasedin volume.63 The natural compositionof Bulgarianforests is two-thirdsdeciduous and one-thirdconiferous. Conifers account for 70 percent of the plantings in afforestationareas. Bulgarian forestershave expressedconcern about the decline in deciduousforest reserves,their quality, and the deviationfrom the natural compositionwhich is occurringdue to the preferencefor planting of conifers. Conifers may be more risk prone than hardwoods to changesbrought on by drought, air pollution, acid-rain,or global warming.

96. Bulgaria'sforest reserves are relativelyyoung: some 60 percent of the forests are new (1-20 years) plantings;30 percent are of an intermediateage; 10 percent are over 80 years. Due to the relativelyyoung stands, forest management for optimum growth is a major concern. In principal, 40-45 percent of annual growth is harvested. This currentlycorresponds to 3.3 million m3 (1990) of timber. An estimated60 percent of harvested material is used as firewood and 40 percent for lumber. Although the general quality of the coniferousforest is good, an increasingpercentage of the coniferousstands are reported to be in an unsatisfactorycondition. However, the general quality of the deciduous forest is only fair and much of it is used for firewood (lack of quality hardwoodsaffects the ability of the country to fully realize cutting plans and to sell the timber). Deteriorating env~ -.-ental conditionsare blamed for the physiologicalweakening of stands, which in turn creates conditionsfor the spread of pathogenic fungi and insect pests. These pose a real threat to newly afforestedareas and in some years were responsiblefor 350,000ha of forest damage.

97. Parks and ProtectedAreas. Bulgariahas ten "people'sparks", 98 nature reserves,17 of which are biospherereserves. According to the Nature ProtectionLaw (1967), there are five categoriesof protected areas in Bulgaria - reserves,people's parks, natural landmarks,protected sites and historicalplaces - with a total area of 280,000 ha or about 2.4 percent of the country (1991 data). The Pirin People's Park and Sreburna,Bulgaria's

62 Afforestationis one measure applied in the erosion control program in Bulgaria. Over 113,000ha afforestationworks were carried out in water catchmentareas of major reservoirswith the main objectiveof erosion control. In addition,erosion control structureswith a total volume of 860,000m 3 were constructedin the mountains.

63 Figure 7 in Annex 1 depicts the trends. - 28 -

largest river lake and a very valuablewetland area, were declaredWorld Cultural and Natural Heritage Sites in 1984. According to the World BiodiversityConvention, in terms of botanicalbiodiversity, the Balkan Peninsula is the richest area in Europe.

98. The history of the Vitosha and Pirin People's Parks illustratessome of the problems associatedwith nature protection in Bulgaria. The Vitosha People's Park is the oldest nationalpark both in Bulgaria and on the Balkan Peninsula. The 1934 decree establishingthe park decreed no constructionof houses over 800 meters above sea level in the park, but this restrictionwas loosened in 1952. There are a substantialnumber of illegally-constructed buildingswithin the park. The park has one biosphere reserve. In the 1980s, approximately100 hectareswere deleted from the edge tf the BistritzaReserve (a UNESCO-designatedreserve under the Man and Biosphereprogram) for constructionof ski facilities. (A plan to take even more of the reserve for ski facilitieswas shelved after an internationaloutcry from conservation organizations.) Aside from the protectedareas, the park serves as a major recreationarea for nearby Sofia. It contains several ski runs, the largest of which is 3.5 kilometers in length. The amount of park use is uncertain; one estimate from a park officialwas 1,000,000visitors last year.

99. Since 1952, Vitosha has been administeredby the Sofia municipal authorities. Previouslyit was administeredby national forestryauthorities. The park has suffered from major budget cutbacks in recent years. The number of forest guards was reported as being cut from 44 to six. Two years ago the park had a staff of 200, which since then has been cut to 100, of whom 70 are low level maintenancestaff. Of the remaining30, six are forest guards, two are forest engineers,and there are eight supervisors(two for each district within the park).

100. Pirin People's Park covers one of Bulgaria'smost lovely and well-known mountain ranges. Pirin stretchesto the farthest southwestpart of Bulgaria between the valleys of the rivers Strouma and Mesta. Its northern branch stretches from the Predel ridge (1140 m) stretchingdown to the Parilska ridge (1170 m) that separatesit from the Slaviankamountain. The park includes forests above an altitude of 1000 meters and 8,276 hectares of meadows and pastures at the highest parts. Pirin has approximately100 peaks over 2,500 meters high including2,915 meter high Vihren, the third largest on the Balkan Peninsula. There are numerous lakes; primarily coniferousforests, including some of the oldest trees in Bulgaria (one tree, the Baikoushev is said to be over 1300 years old); over 20 differentgrasses unique to Pirin; and wildlife, includingbears, wild boars, wolves, foxes, and wild cats.

101. In 1963, 6,000 hectares locatedaround the highest peak were designated as a protected area, which was governed as part of the local forestry administration. In 1975-76, the first project was launched for Pirin People's Park. A complex managementplan was developedand in January 1, 1980 the proposed plan was adopted allocating27,000 hectares as protected area (the directorate,in charge of administeringthe park, was also establishedat this time). However,.despite the designationof the park as a World Natural Heritage Site, the constructionof a retwork of ski lifts, ski slopes and lodges was authorizedand implementedin 1983-86. Because the tree cover was removed, the ski slopes cause erosion.

102. Pirin People's Park is currentlythe only national park in Bulgaria with its own managementdirectorate. The directorateis composed of 36 persons, includinga director,a vice-director,three regional heads, 17 safeguards,a 29

botanist, a zoologist,a forester,and 11 support persons, who are all Committee of Forests employees. The main task of the directorateis to efficientlymaintain and protect the park. More specifically,the Working Charter cites activitiessuch as afforestation,anti-fire precautions, constructionworks such as marking of traditionalhiking routes and uature and historical sites, and care for the flora and fauna. According to the director of the park, the managementexperiences difficulties due to the large numbers of tourists visiting the park..

103. The "EcologicalBricks" proposal of a consortiumof European NGOs calls for creation of a trans-boundarynational park along the the Bulgarian-Greek border that might includeparts of the Pirin, Rila, and Rhodope Mountains, the northern C-eek lake district,the Nestos and other deltas on the Aegean Sea.64 5/6 of the Rhodope mountains lie in Bulgaria and the remaining portion lies in Greece. It contains 211 of the 732 endangeredand rare species of plants listed in Bulgaria'sRed Data Book and the densest Bulgarian populationof raptors. Historically,a major threat to the mountainshas been overcuttingof timber. Another threat is extractionof low grade heavy metals and uranium, and quarryingof marble, stone and granite. These in turn have led to pollution of surfacewaters and depletion of groundwater. The groundwaterdepletion has contributedto drying up of water supplies for settlementsand changes in vegetation. The Rhodopes are also the site of approximately20 hydropowerdams whose waters are subject to sedimentation. The Eastern Rhodopes have been heavily deforested,largely as a result of overgrazingmany decades ago. The Committeeof Forests has launcheda major program to reforest the area and control erosion.

64 See the map of nature protectionareas in Southern Bulgaria,Turkey and Greece at the end of this report. 30 -

IV. RESPONSES

A. EgonomicPolicy and StructuralAdjustment

104. The economy of Bulgaria is undergoinga major transitionfrom a command and control economy to a market economy. The scope and timing of environmentalimprovements is closely linked to the success of that transition. In the past, the Bulgarianeconomy was insulatedfrom changes which had a major impact on OECD countriesin the 1970s and 1980s: oil price shocks and steep rises in energy prices, restructuringof inefficientheavy industry and shift towards the service sector. The Bulgarian industry made little effort to save on energy or raw materials since these were usually inexpensiveand in any case the managementof the companywas judged on the company's output not on its profitability. As a result, relative to Western practices,heavy industry in Bulgaria uses excess energy and raw materials, with this excess usage contributingto the pollutionproblem. As prices of energy and raw materialsrise these heavy industrieswill be forced to reduce their usage. This will occur in a number of ways but especiallythrough a greater effort to reduce costs, improved instrumentationand eventually improved technology.

1CQ. Bulgaria still relies on technologiesoriginating from the 1950s and 1960s which are wasteful in their use of energy and natural resources. New technologieswere developedin the West in the 1970s and 1980s that met the requirementsset both by markets (higherenergy prices) and governments (stricterenvironmental standards and enforcement). The two oil price shocks made a significantfraction of capital stock in OECD countriesobsolescent, because it was ill-adaptedto the new set of relative factor and resource prices. In Bulgaria,the relative lack of continuousinvestment in upgrading and adapting operationsand equipmentmeant that the performanceof plants lagged increasinglybehind the performanceof comparableplants in market economies.

106. The former CMEA system with its complex trade arrangementswhich obscured the true cost of importedenergy has ended. From the beginning of 1991, Bulgaria importsenergy at world market prices.65 The policy of the government is to align all domestic energy prices with economic costs over the medium term. By mid-1991, throughmultiple price adjustments,the government made significantprogress towards the implementationof that policy. With the exception of electricity,heat and coal (particularlyfor householduse), prices of all other energy reached internationallevels after the June 1991 price adjustment. Coal and petroleumproducts are tradeablecommodities. When adequate competitioncan be createdbetween suppliers,price liberalizationprovides the optimal solution. Supplies of electricity,heat and gas are natural monopolies,therefore a mechanism for the regular adjustment of prices needs to be established.

65 The former Soviet Republics rely on dollars rather than "convertible" roubles for all external trade now. The former USSR and the Government of Bulgaria negotiated a bilateral trade agreementfor 1991, under which Bulgaria was obligated to deliver a range of agriculturalcommodities and products of selected heavy industriesin return for importsof oil, gas and a few additional commodities. However, the level of trade under this agreementwas greatly reduced from levels in former years; and actual trade fell short even of this reduced level. 31 -

107. Not only are electricityand heat prices too low, but the current tariff structurecreates a distortion. Prices for electricityand heat supplied to industry should be generally less than prices for households,because it is generally less expensive to supply industries. In Bulgaria,however, households pay significantlyless than industrialconsumers for electricity and heat. Similar problems apply to the pricing of coal and coal products. Household electricityand heat prices are currentlyestimated, respectively, at 65 and 32 percent of costs. The price of briquette consumedby households covers about 22 percent of the productioncost.

108. Energy pricing policy affects the level of emissionsby encouraging energy conservationas total emissionsof particulates,S02, NO, and CO are closely linked to the use of various fuels. It is-expectedthat the response of energy demand to higher energy prices will reduce the emissionsof particulatesand S02 by 16 percent between 1989 and 1995.66 In order to achieve the maximum impact and to secure the.gainsachieved in 1991, the gnergy price reform should be completedby decontrollingcoal and petroleum product prices while establishinga system for regular adJustmentof electricity,heat and natural gas *rices. The resultingchanges in relative prices will reduce the excessiveuse of coal and the correspondingproblems of emissions.

109. A macroeconomicadjustment process has been underway since 1990. GDP declined an estimated 11.8% in 1990, led by industrywhich declined about 16.3%. On coming to power in January 1991, the coalitiongovernment began quickly to implementa comprehensive,far-reaching economic reform program designed to limit the current economic decline and to initiate the transition to a market economy. In the initialphase, the governmentfocussed its efforts on a stabilizationprogram designed to quickly reduce economic imbalancesto a sustainablelevel and create a set of market-basedrelative prices.67 The economy in 1991, however, has contractedat a faster pace than initiallyenvisaged under the stabilizationprogram, due to the collapse in exports to the former CMEA countries,a sharp contractionin domestic demand and the lower-than-anticipatedaccess to foreign finar.iing.Output is now projected to declineby about 25% in real terms in 1991. While it is expected that the economywill begin to recover from 1992 onwards, it is unlikely that the rate of economic growth up to 1995 will be sufficient to offset the decline that has already occurred in 1990 and 1991. In addition, the compositionof final demand in 1995 will differ significantlyfrom that in

66 See Figure A4 in Annex 7.

67 The governmenthas unified the exchange rate and moved to a marketbased exchange system, removed all controls on domesticprices (except energy prices) and reduced barriers to internationaltrade. The governmentalso turned its attention to the more complex and time consuming issues related to creating the basic regulatoryand incentiveframework for the developmentof a market economy. Significantprogress has been made in passing the necessary legislationand building the institutionsrequired to initiate this process. The authoritieshave passed a far reaching land reform bill and initiateda program for the sale of small enterprisesand the assets of large firms via auctions (though this was suspendedawaiting the passage of a comprehensive privatizationlaw). In the area of demonopolization,the authoritieshave made significantprogress in breaking-upmonopolies, particularly in the transportand domestic and foreign trade areas. Finally, a CompetitionLaw, a CommercialCode, and a Foreign InvestmentLaw have been passed. - 32 -

1989 with a relative shift from investmentand governmentconsumption towards exports and private consumption. These adjustmentswill contributeto the reduction of emissionsand, togetherwith the impact of higher energy prices, will reduce the emission of air pollutantsby 30 to 46 percent, water pollutantsby 4 to 24 percent and solid waste generationby 26 percent between 1989 and 1995.

110. Restructuringwithin the industrialsector in response to the opening of the economy to internationalcompetition and the changing trade relationswith the USSR and Western Europe will have a significantimpact on the nature and level of emissions. However, in this case the changes may be unfavourable since they may lead to an expansionin the output of relativelypolluting sectors (e.g.,metallurgy). If that scenariomaterializes, the three factors together - energy price reform, macroeconomicadjustment and industrial restructuring- will result in a 28 percent reductionin the emission of particulates,43 percent reductionin the emission of S02, 3 to 17 percent reduction in the dischargeof water pollutantsand 13 percent reduction in the generationof solid waste between 1989 and 1995. For metal dust a reduction of nearly 30X in emissionsdue to the macro-economicchanges is entirely offset by the impact of industrialrestructuring. 68

111. For all of the main pollutantsthe effect of the assumed pattern of industrialrestructuring is to increase levels of emissions and to worsen environmentalproblems. This implies that it is necessary to move rapidly to introduceregulations and economic incentivesfor pollution control reinforcingthe impact of higher energy prices on emissionsbefore too many resourcesare transferredto industrieswhich are apparently internationally competitivebut whose social profitabilitymay be low because of the environmentaldamage that they cause. Commandand control type measures, such as design reviews and emission permits with legal sanctions for violations, and market based instruments,such as pollutionfees and economic cost-based user charges for natural resources (water,forests, land), are both needed (see section D for further discussionon these instruments).

112. Potentialinvestors and the governmentshould assess the competitiveness of differentindustries in a manner that takes full account of the social costs of environmentalexternalities. In other words, the need for major investmentsin waste treatmentand pollutionabatement technology may affect the economic viabilityof enterprisesand should be taken into account in industrialrestructuring. In order to assess these investmentneeds and also to identifypossible low cost pollutioncontrol measures,mandatory Snvironmentalefficiency reviews (audits)of individualenterprises should be conductedas part of the restructuringand privatizationprocess. In turn, that will require the developmentof environmentalservices including emissionsmonitoring, laboratories, consulting engineering and on-site or off- site treatmentof specializedwastes.6 9 In many countries,a robust

68 FiguresAl, A2 and A3 in Annex 7 provide emission estimatesup to the year 2000.

69 Environmentalaudits identifyways of decreasingpollution through operationand maintenancemeasures and investmentsin improved technology which increase efficiencyof resource use and lower waste generationand emission levels. See Annex 8 for further informationon environmentalaudits and environmentalservices in Bulgaria. - 33 -

environmentalindustry has emerged to provide these services. With technology transfer assistance,the opportunityexists to do so in Bulgaria.

113. The government announcedthat it would no longer subsidize inefficient producers, i.e., a policy of "hard budget constraint"with a genuine threat of bankruptcy would apply to all state-ownedenterprises. If that policy is implemented,it will provide, togetherwith economic cost based energy and natural resource prices, the necessaryconditions for price-drivenstructural changes and energy and environmentalefficiency improvements. However, while direct budget subsidiesto industrywere eliminated,well-connected enterprisesare still able to secure additionalshort-term credits from the state banks with which they have dealt for years, without having to demonstratethat they are creditworthyin the new market environment. Companies are also getting cash by stretchingout or stopping payments to suppliersand the danger of escalatinginterenterprise arrears is apparent.70 Especiallythe large enterprisesare most likely to have the banking leverage and relationshipsto gain access to short-termcredits or not to pay their bills but keep supplIersdelivering. In market economies, it is precisely through the financial institutionsthat the market forces companies that are not viable to increase their efficiencyor to go out of business. Thus, due to incompletetransition to a market economy (ownershipby the state is dominant in the industrialand finance sectors),an essential free market instrumentdoes not yet operate effectively.

114. When the overridingobjective of plant managers is survival,both survival of the enterprisewhich they head and their personal survival as managers, this generally leads them to focus, in addition to markets and marketing,on cost reductionand quality improvement. In virtually all export and domestic markets, there is pressure to improve cost-competitivenessand, particularlyin the case of exports or where there is a threat from imports, improveproduct quality. Particularlyin heavy industry,raw materialsand energy constitutea sufficientlylarge percentageof costs to representan importanttarget for cost reduction. Even in mid-sized industries,the substantiallyhigher prices are inducingmanagers to seek low-cost ways to reduce energy costs, materialsuse and wasteage. However, many enterprise managers believe that cost reduction,quality improvementand environmental improvementwill require major capital investment(this so far seems to be at least as importanta motivator in seekingjoint ventures as market access has been).

115. A few industriesare targets of powerful local environmentalmovements in towns and villages affectedby the plants' environmentalcontamination. Thus, in ferrous and non-ferrousmetals and chemicalsas well as in oil refining,enterprise managers are being forced to devote much of their energies to findingways to come to terms with growing local opposition. Most environmentalpressures are for reduction in air emissionsassociated with industrialprocesses (e.g., smelting)or boilers. Managers of some enterprisesfear environmentallawsuits. 71 Also, there is concern both within the plants and in the governmentthat fear of environmentalliability could pose a major obstacle to foreign investmentin enterpriseswith major

70 Bulgargaz, for example, reportedlyhas roughly 1 billion Leva in overage receivables,mostly from chemical companiesthat use natural gas as feedstock.

71 The copper smelter at Srednogorieis being sued already. - 34 -

environmentalimpacts - which includesvirtually all heavy industry. Environmentaland/or privatizationlegislation may solve that problem by clearly stating that privatizedcompanies will not inherit liabilityfor Rast environmentaldamages, i.e. liabilityfor damages caused by previouslystate- owned companieswill rest with the state. In other words, central government budget will pay compensationsawarded by the courts and finance the eventual cleanup costs. This solutionwill not only help the privatizationprocess, but will also encourageenterprises to disclose informationregarding toxic waste sites and therebywill facilitatethe developmentof phased, long-term cleanup programs. However, it must be made clear that this approachwill not apply to future damages.

116. In addition to making it politicallyeasier to implementthe "hard budget constraint"policy and therebycontributing to industrialrestructuring and energy conservation,privatization is expected to have positive environmentalconsequences in agriculture,as well. Privatizationshould help reduce the hazard from erosion since lands will be worked in smallerparcels. Also, private ownership is likely to stimulateimproved stewardshipof lands. Feedlots,for example, will no longerbe able to dump wasues on public land and waters but will instead face private owners who will deny them this "free" disposal mechanism. Because budget constraintsof agriculturecooperatives were less "soft" than of industrialenterprises, last year increasesin the prices of fertilizersalready had drastic effects on fertilizerapplications (see Chapter III, SectionB above). For example, increaseduse of manure to substitutefor inorganicnitrogenotis fertilizers will lower the pollutionof surface and groundwatersby excess nitrogen in the soil.

B. EnvironmentalLesislation

117. Basic legislationon environmentalprotection in Bulgaria originatesin the Sixties and includes the "Law on the Preventionof Air, Water and Soil Pollution" (Oct. 9, 1963), its implem...ntingregulation (Nov. 24, 1964), the "Law on the Protectionof Nature" (June 16, 1967) and its implementing regulation (Apr. 10, 1969). This basic legislationhas been subsequently adjustedby a number of amendmentsand supplements. In addition to the basic environmentallaws, there are more than 120 other laws that relate to environmentalprotection issues. The most importantones are the following:

- "Law on Mines and Quarries" (1957) - "Law on Forests" (1958), - "Law on Plant Protection"(1960), - "Law on Water" (1969), - "Law on Public Health" (1973), - "Law on the Protectionof Cultivated and Pasture Land" (1973), - "Law on Regional and SettlementDevelopment" (1973), - 'Law on the Game Reserve" (1982), - "Law on the Use of Atomic Energy for Peaceful Purposes" (1985), - "Law on the BulgarianMaritime Territory" (1987).

118. The need for a new, streamlinedenvironmental law has been recognized and the Ministry of Environment(MOE) has prepared severalversions since 1989. Needless to say, politicaland economic developmentsquickly made the versions obsolete (the latest version was drafted in early 1991). Meanwhile, the EnvironmentalCommittee of the NationalAssembly drafted a competing version of the proposed new environmentallaw, which also undergone several revisions. Both draft laws were improvementscompared to the old legislation. For example, while the old legislationallowed for free discharge of - 35 -

pollutantswithin the permissiblelimits, the draft new laws stipulated pollution charges even within those limits. Another importantfeature of the draft new laws was the requirementthat environmentalassessment procedures should include private participation. There were importantdifferences between the two drafts, though. The draft of the Committeeestablished the basic principles - the right to a clean environment,right to information, government structure,enforcement authority, environmental impact assessment- but did not create a regulatorysystem, i.e. a clear structurefor government to review, authorizeand monitor activitieswhich create a risk of harm to the environment. The MOE draft attemptedto include the basic principles in the parliamentarybill (althoughwith less emphasis)and also to create air, water, land, forest, etc. protectionprograms.

119. As one of its last acts before the upcoming elections,the National Assembly passed the Basic EnvironmentalLaw in October 1991. Although the passed law was based on the draft of the EnvironmentalCommittee, it drew on elements of the MOE draft and also reflectedsome of the results of the ongoing envirormentstrategy work. For example, the duties of the Minister of Environmentare enumerated in the law; among other things the MOE is required to develop "a governmentstrategy for environmentalprotection" (Art.24,sec. 1) and is given authorityto "suspendregulations issued by other ministries and municipal authoritieswhen they contravenethe prescriptionsof this Act" (Art.28, sec. 2). However, the law still did not establishall the necessary elements of a regulatorysystem.

120. The passage of effectivelegislation requires the developmentof an environmentstrategy which is closely linked to the strategy guiding the ongoing economic reform process.72 It is not possible to address all environmentalproblems at once, nor would it make sense to invest scarce funds and limited regulatoryresources in controllingsources of pollution that will be eliminatedby the process of economic restructuring. Protectionof the environmentis not an absolute value but one considerationwhich should be weighed against other needs of society.

121. Based on such a strategy,legislation should explicitlyacknowledge that some sources of pollutionwill be controlledbefore others, and should specify who will make those decisionsand on what basis they will be made. Otherwise there is a danger that the environmentallaws will lose credibilityas the realities of environmentalpollution continue at odds with the requirementsof the law (many of Bulgaria'scurrent environmentallaws appear strong on paper but they have very little connectionwith real conditions). On the other hand, focussed,predictable and successfulefforts at control at an early stage, even if modest, will strengthenthe entire system of environmental protection.

122. In order to establisha regulatorysystem legislationshould:

(i) define goals; (ii) set forth the standardsand policies that will be used to define specific regulatoryrequirements; (iii) define responsibility,authority and the process for the promulgationof specificregulatory requirements, includingopportunities for the public to participate;

72 Like previous versions of the new law, the environmentalstrategy prepared by the Ministry of Environmentin 1990 is now outdated. * 36 -

(iv) establishthe permit, assessmentor other system of review to be used to apply specific standardsto individualsources, both existing and proposed; (v) set forth a timetablefor compliancefor different categories or sourcesof pollutantsand a process (and authority)for establishingand modifyingsuch a timetable; (vi) provide for monitoringof complianceand enforcement against violations,including penalties sufficient to deter violations,and establishthe right of citizens to sue to vindicate individualrights and to compel enforcementof the law; (vii) establishboth the official obligationto provide complete informationand the right of the individual to obtain information; (viii)establisha system for the identification,evaluation and appropriatecorrection of environmentaldamage caused by actions prior to passage of the law, includingallocation of responsibilityfor the cot of remedial action; (ix) delineatethe responsibilitiesand authorityof national, regional and local envirorLmentalofficials, specifyingthose policies and standardsthat must be establishedon a nationalbasis, and those source specific decisionsthae should be made locally.

123. A transitionis needed from largely uncontrolledenvironmental risks to risks controlledto a degree acceptableto Bulgariansociety. In turn, that requires a transitionfrom a system in whict environmentallaws representa statementof goals to a system in which those laws provide operative requirementsfor the control of potentialsources of environmentalrisk. These transitionspose a considerablechallange. Both the National Assembly and the government are caught between the realitiesof the economic and social costs, the difficultyof these transitions,and the increasinglyurgent demands of people exposed to pollutionfor swift and visible action. Although the intensityof public concernmakes the articulationof an economically feasiblephased strategy for environmentalimprovement politically difficult, the primary aim of this study is to develop such a strategy. Following the gdoDtion of the environmentstrategy by the government,.a revision of the basic environmentallaw should be prepared and submittedto the Parliament.

124. Enforcementof a law should come through supportingregulations. Therefore the most critical regulationsshould be prepared or revised at the same time as the law is being revised. Revisionsof the Laws on Forests, on Land, on the Game Reserve, on Mines and on Public Health are also planned. The relation of these laws to the basic environmentallaw must be clarified.

125. In an effort to improve the managementof Bulgaria'snatural resources as pressures on protectedareas continue to mount, the WildernessFund (housed in the Instituteof Ecology)prepared a revision of the Law on Nature Protection,which was subsequentlysubmitted to the National Assembly by the Green Party. Since then the proposed draft Law has been revised two times based on comments recieved from the Ministry of Environment,the Committeeof For6sts, the Institutesof Botany and Zoology, but it has not been passed yet. The latest draft attempts to begin the first phase of a long-termstrategy to create a fully integratedmanagement program for protectedareas. - 37 126. This strategy,outlined by MOE expertstaff, would createa Nature ProtectionAgency to be responsiblefor the identification,designation, and managementof all protectedareas (includingnational parks, natural parks, naturereserves, and wetlands).73However, the strategydoes not have the supportof all othergovernment departments and has not been endorsedby the Councilof Ministers. Therefore,using the MOE strategyas the basis,a niationalconservation strategy should be dgyeeloedwith the active particiiationof the MOE. the Gommitteeof Forests.the Academyof Sciences. nSAt4reprotection sRecialistjL. and non- oVgernent organizations . Following the adoptionof the strategyby the government,a new reviseddraft-Law on NjatureProtection should be prearedlgnd submittedto the Parliamen_t.

127. Environmental imRactasgessMentl. The "Regulationon the Environmental RequirementsConcerning Regional and Urban Planningand Investment"issued by the Ministriesof Environmentand RegionalDevelopment and Constructionin 1991 pursuantto Article201 of the "Lawon'Regional and Settlement Development"stipulates detailed environmental assessment and protection requirementsfor regionaland urban developmentplans and investmentprojects. 128. ChapterTwo of the regulationestablishes requirements for an "EnvironmentalConservation and Reproduction"component of everyplan. The requirementsinclude a detailedassessment of baselineenvironmental conditions,a comprehensive"forecast assessment" of futureenvironmental changesand impactsof the plan, and an "EnvironmentProtection Action Program". The iterationof subjectsto be assessedis detailed,specific and complete. For example,Section V requiresthat the "ActionProgram" provide for mitigationof both futureand existingenvironmental degradation, based on an "ecologicaland economicassessment of the options"and a phased implementationscheme. The mitigationplan may includeprovisions to move or close sourcesof pollution,limit emissions, discharges and wateruse, restrictpesticide use, regulatewaste disposal,protect endangered species, establishnature preserves, improve transportation, reduce noise, etc. The regulationdoes not specifythe mannerin which the actionprogram will be implemented,nor by whose authority. 129. ChapterThree establishesdetailed assessment and mitigation requirementsfor investmentprojects at the "preprojectstage", "Engineering Designphase" and the "Blueprint.stage". The requirementsare similarin breadthand detailto thosein the precedingChapters. ChapterFour requires reviewand approvalof assessmentsof investmentprojects by the MOE, the Ministryof RegionalDevelopment, Housing and Constructionand the "Municipal Counciljointly with the RegionalEnvironmental Protection Inspectorates and the Hygieneand EpidemiologicalInspectorates". The regulationalso requires "the.investor" to bear the costs of the requiredanalyses and reviewby governmentagencies. The Ministriesof Environmentand RegionalDevelopment are "assigned"to "controlof observing"the regulation. 130. The requirementsdescribed in the regulationare quitecomplex and compliancewill requireextensive data collectionand analysis. Overall.the rggulationappears too ambitiousand shouldbe revisedbased on a practical. structuredaRproach to environmentalimpact assessment (E1A). Requirements shoulddepend on both the size and the type of proposedprojects and should recognizethat the EIA and the pre-constructiondesign review are different

13 See Annex 9 for furtherdetails on the proposednature conservation strategy. 38

steps in the project approvalprocess. The former has to be carried out at an early stage when the question asked is whether the project has to be undertakenat all or another alternativewould make more sense. The latter is a purely technicalreview of compliancewith pollutioncontrol requirements after the project is fully designed for a particularsite, and thereforecan be carried out by experts in the Ministry of Environmentor in the regional inspectorates,i.e., the involvementof other parties is not necessary.

131. The current regulationdoes not stipulatepublic participationin the EIA process. However, the new environmentallaw stipulatesthat each citizen has the right to review EIAs. In line with the law. the revised EIA nrocess should assure participationof irdependentscientific experts and the public at a point-whenthey can still shaRe the result.

132. InternationalAgreements. Bulgaria signed and ratified several internationalagreements:

- wetland (Ramsar)convention; - transboundaryair pollutionconvention, including the Helsinki Protocol on the reductionof S02 emissionsand the Sofia Protocol on NO. emissions; - Vienna conventionand the Montreal Protocol on the protectionof the ozone layer; - Washingtonconvention on internationaltraffic in endangered species; - Bern conventionon protectionof wild European flora and fauna.

In addition,Bulgaria plans to sign the Basel conventionon monitoringof transboundarymovements of hazardouswaste.

133. Bulgaria activelyparticipates in the preparationof the Conventionon the Protectionof the Black Sea. Signing and effectiveimplementation of the conventionby Bulgaria.Georgia. Romania. Russia. Turkey and Ukraine will create an institutional-structurefor a multi-nationalaRvroach to defining and resgondingto the serious problems of the Black Sea. 74 Assistancefrom internationalagencies will also be necessary to prevent a-significant transboundaryecological disaster in the region.

C. Standards

134. Ambient air qualit. Ambient air quality standards (AAQS)were establishedby the Ministry of Health in 1969 and revised in 1984. AAQS apply to 171 pollutants. The standardsspecify 30 minute and 24 hour averages for maximum allowable concentrations(MACs).7 5 The BulgarianMACs are more stringent than either the WHO or US standardsand are based on very conservativeinterpretation of medical evidence. Table 9 below compares some of the Bulgarian standardsto World Health Organization(WHO) recommendations and to United States standards.

74 See Annex 5 for further informationon the convention.

75 See Table 25 in Annex 1. - 39 -

Table 9: Comparisonof ambient air guality standards

Pollutant BULGARIA WHO USA milligr/m3 30 min 24 hr 30 min 24 hr year 24 h year

S02 0.50 0.05 0.125 0.05 0.365 0.080 N02 0.085 0.04 0.40 0.150 0.10 Dust 0.50 0.15 0.25 0.150 0.050 (pmlO) 03 0.16 0.03 .15-.20 0.10-.12 0.235(lh) CO 5.0 3.0 60.0 10.0 35.0(lh) 10.0 (8hr) H2S 0.008 0.008 0.007 0.150 Lead 0.0003 .005-.01 0.015(3month)

135. Ambient air quality does not meet the current standardsin most major Bulgariancities. The current AAQS are more of a declarationof good intentionsthan realisticrequirements which could form the basis for control programs. The practice of settingunrealistic standards which cannot be enforced contributedto the general disregardfor environmentallaws and regulations,therefore it should be avoided in the future. Achieving a particular set of ambient standardsimplies a cost which becomes greater as the standardsare made stricter.76 The benefits of reduced pollution should be higher or equal to abatementcosts, however, environmentalbenefits are difficultto measure in monetary terms. Risk assessment is the most widely used approach used to examine trade-offsin the standard setting process.77

136. The lack of annual average MACs is a serious deficiencybecause the 24 hour MACs are not related to long-timeexposures. Annual ambient air quality standardsshould be promulgatedfor compoundswhich (i) tend to bioaccumulate in the environment:or (ii) are determinedto produce adverse public health impactsafter chronic low level exposures. The government'slong term objective is to achieve ambient air qualitywhich meets EC standards. However, in view of the current pollutionlevels in several Bulgariancities, the EC standardswould be difficult to achieve in the short-to medium-term. Initially,the annual A6QS should be based on what is practicallyachievable in Bulgaria in the short run. however, a schedule (with interim standards)for achieving EC AAQS over the next five to ten years should be established.

137. The adoption (in the long run) of EC annual AAQS already implies the rollingback of current 24 hour Bu'.garianair quality standards. However, the requirementof setting realisticstandards implies even further relaxationin the short run. Thereforethe level of 24 hour standardsshould be revised upwards and a schedule for achieving increasinglystricter 24 hour standards over the nest five to ten years should be established. In turn, 30 minute MACs may not be needed in most cases, because public health can be adequately protected through the use of longer term standards. The longer term standards (24 hour and annual) are more readily translatedinto realisticemission limits which can be attainedby regulatedemission sources.

76 Diminishingreturns apply; more resourcesare needed to clean up each additionalunit of pollutant. The optimum is at a point where the gain to society from cleaningup one unit of pollutantexactly matches the social cost, i.e., the marginal social damage is equal to the marginal cleanup cost.

77 For informationon risk assessment,see Annex 10. - 40 -

138. The adoption of MAQS for 171 pollutantsmakes it difficult to focus on the most significantair quality problems. It is practicallyimpossible to establishmonitoring and enforcementprograms for all these pollutants.78 le stan!dardsshould be limited to the pollutantswhich are identifiedas occuring in the country. New compoundscan be added at the time when new air pollution sources are proposed for establishment. This would allow the considerationof the latest scientificinformation in the standard setting process.

139. The dust standard should be adjusted to include only the respireable portion of the spectrumof particulatematter captured on the dust filters. The United States uses the standardwhich includesparticulate matter of 10 microns and less in size (pmlO). Monitors are readily availablewhich would measure particulatematter in this size range. Measurementof total particulatematter may be useful in areas where pmlO monitors are not available,because it can be used as.a surrogatefor pmlO measurements;if the dust monitor (total particulates)shows levels above the pmlO standard, considerationwould be given to placing a pmlO monitor in that location.

140. Adoftion of deDositio,Istandards for persistentDollutants which are of an international(transboundary) character should be considered in the medium eM. These standardsfor compoundssuch as pH (acid rain), mercury, cadmium, etc., would not be enforceablestandards such as those discussed above. The depositionstandards (for example,an annual average pH standard of 5.0 to 5.3 in the rainfall)would be used as a yardstickfor internationalnegotiations.

141. Emissions. Emission standardswere establishedby the Ministry of Environment'9 in 1978 (and subsequentlyrevised in 1986) and apply to the same 171 pollutantsas the AAQS. Emission standardsare calculatedusing actual facility or source data and are based on the AAQS, stack height, gas flow and temperature. The formulas that set the standardsare based on simplifieddispersion algorithms.

142. The standardsare not based on the effect a source has on areawide or regional air quality, but rather are establishedfor an individualsource based on theoreticaleffects near the source (which could be one stack or a set of stacks within a plant) As a result, when many sources are located in one region, the effect of all sources on regional air quality is not taken into account. Also, the dispersionalgorithms applied are inadequateto predict maximum air quality impactsbased on actual meteorologicaland geographicconditions. This is amply demonstratedin the major industrial centers where a number of the sources appear to be meeting the existing' emission limits, but ambient air quality standardsare exceeded by a considerablemargin. Therefore emission standardsshould be replaced with plant specific emission limits which are designedwith the purRose of ensuring that the revised ambient standardsare met everywhere.

78 Ambient air quality monitoringfor many of these pollutantshas not been sufficientlyestablished even in Western countriesand adequate health criteria for setting AAQS for the general public does not exist (available health effects data is based on studies performedin working environmentsand, due to differencesbetween workers and the generalpublic, cannot be used for the purpose of setting ambient standards).

79 More exactly, the standardswere issued by the predecessorof the Ministry of Environment,the Committeeof EnvironmentalProtection. 41 -

143. This has several implications. First, emission limits will apply to those pollutants only which are listed in the revised AAQS. Second, emission limits will depend on locations,because the requirementsto meet ambient air standards in areas with several existing sources (e.g., in hot spots) have to be stricter than in other parts of the country. Third, the limits will need to be revised from time to time to meet increasinglystringent new national ambient standards.

144. When ambient air quality standardsare being violated an analysis of the causes for the violations should be undertakenusing ambient air quality dispersionmodeling. With the results of this modeling, revised emission limits for the sources which are shown to contributein a significantway to the violation of the standardsshould be established. Ambient air quality modeling should also be used to establishemission limits for major new sources of air pollution.80 Any major new source should not be allowed to consume more than X % (X < 100) of the availableassimilative capacity in the area affectedby the source.81 Minor new sources should be subject to the emission limits in the current regulations.

145. The approach outlined above assumes that air managementstrategies will be develoRedon a regional basis. Local and regional governmentsand regional units of the Ministry of Environmentwill play importantroles in developing the air management strategiesand determiningplant specific emission limits and complianceschedules. In order to find the least cost solutionsto meet national ambient standards,a process of legallyenforceable negotiations with the affected enterprisesshould be established. The governmentshould announce in advance the schedule set for the step-by-stepimplementation of increasinglystringent ambient air quality standards,so that the enterprises can adapt to the changing regulatoryconditions.

146. A vehicle testing program is currentlyin place which tests for carbon monoxide and smoke (dust). The testing is conductedby the Ministry of the Interior through the traffic police. The test applies to all types of vehicles; automobiles,buses, trucks, and motorcycles. The cutpoints (emissionlimits) depend on the age and mileage of the vehicle and are quite liberal (e.g., 4.5% carbon monoxide is allowed for older vehicles in the idle test). The test is conductedannually. It appears that the vast majority (approximately90 to 95%) of vehicles with four stroke or diesel engines are tested. The two stroke engines,which make up about 15% of the auto fleet, are automaticallywaived because they cannot even meet the extremely liberal 4.5% CO limit.

147. Without-changingthe principleof different cutpointsfor cars of differentages. the testing program should adopt tighter emission limits. It should also establish some type of reasonablelimits on the two stroke

80 The definitionof major source will depend upon the type of pollutant of concern. For example, a major new source of SO2 might be 100 tons per year, while the definitionof a major new source of lead, arsenic, cadmium, or chromium would be expressed in pounds or fractionsof pounds per year.

81 Available assimilativecapacity is defined as the differencebetween the existing air quality condition in the area and the ambient air quality standara. Existing air quality conditionfor the compound of concern is estimatedby adding the influenceof all existing sources of air pollution to the natural background air quality. - 42 -

engines. Additionalmeasures to reduce emissionsmay include: (ij a phase out and ban on the import of two stroke engines; (ii) continuationof the policy of high import duty on older used automobiles(the average age of automobiles in Bulgaria is 13 to 15 years); (iii) retrofittingpublic transitbuses to run on natural gas; (iv) introductionof catalyticconverters for new automobiles and gasoline powered trucks; (v) provisionof lead free gasoline for wider availability;and (vi) improved trafficmanagement and city planning.

148. Short term adverse conditionsmay lead to very high ambient air pollution concentrationsposing an immediatethreat to public health. Protectionof the public requires the establishmentof a pollutior.alert and warning system.82 The system should be based on a set of air guality standardsassociated with an emergencyplan of action to be implementedby the maior sources of air pollution in each region. The plan would contain emission reducing actions at higher stages of alert. For example, industries would be required to shut down non-essentialactivities and traffic flow would be restricted.

149. Ambient water quality. Three classes of surface waters are defined in Bulgaria based on a set of indicatorsestablished by the Council of Ministers in 1976 and revised in 1986.83 Selected indicatorsare listed in Table 9 below. The first class representsdrinking water quality, the second is acceptablefor recreationuse and fish farming, the third for irrigationand industrialuse. Waters unsuitablefor any use are called "beyond Class III". The indicatorsconsider 87 parameters:elements, pesticides, bacteriological conditions,etc. 84 A few parametervalues seem to be too strict (especially for drinking water), although this problem is less serious than the problem of unrealisticambient air quality standards.

Table 9: Selected Indicatorsfor the Classificationof Surface Waters in Bulgaria

Standard Parameter Class I Class II Class III

Dissolved-Oxygen(mg/l) >6.0 >4.0 >2.0 Dissolved Solids (mg/l) <700.0 <1,000.0 <1,500.0 UndissolvedSolids (mg/l) <30.0 <50.0 <100.0 Iron - total (mg/l) <0.5 <1.5 <5.0 Manganese - total (mg/l) <0.1 <0.3 <0.8 Ammonia (mg/l) <0.1 <2.0 <5.0 Nitrate oxides (mg/l) <5.0 <10.0 <20.0 Phosphate (mg/l) <0.2 <1.0 <2.0 Conductivity(uS) <700 <1,300 <1,600 pH 6.5 - 8.5 6.0 - 8.5 6.0 - 9.0

150. Effluent limits. Effluent limits,which were establishedas "water quality measurements"in 1976, generallyrequire that all dischargesto

82 Annex 11 provides an example for a five stage warning system.

83 Ambient quality standardsfor coastal sea waters were establishedin a separate regulationin 1986 (see Table 26 in Annex 1).

84 All indicatorsfor Class II waters are listed in Table 27 in Annex 1. - 43 -

surface water bodies meet Class II ambient standards.85 This policy is based on the government'sobjective to achieve Class II water quality in all surface and coastal waters (with the exceptionof the Danube, since the quality of that river - Class III - is already determinedby the pollutionload carried from countriesupstream). The use of ambient standardsas directly enforceablelimitations on dischargesresulted in unrealisticrequirements which did not take into account water treatmentcosts and technologies. As a result, enforcementwas largely ineffective(on enforcement,see Section D below).

151. The adoption of nationwideeffluent standardsbased on best available technologiesmay imply considerablecost and limit the choices of polluters to find the most suitable measures to reduce effluent levels. An approach similar to the one describedabove for air emission limits needs to be followed:regulation of a dischargeshould be based on its impact on water quality in a particularriver, i.e., individualdischarge limitations should be developedwith a view towardsmeeting medium and long term ambientwater quality targets. The pollutersthemselves are in the best position to develop least cost strategiesfor the eliminationof sub-standarddischarges, assuming that adequate technicalassistance will be provided. Therefore,through a process of negotiationswith the polluters, interimeffluent ceilings_and C-omlianceschedules should be establishedfor each major river basin.

152. Many industriesdo not have proper industrialpre-treatment facilities and directly discharge their wastewater to municipal sewer systems. None of the municipalitieshas specificordinances controlling these discharges.86 Sewer use ordinances are necessaryto prevent the discharge of contaminantsto sewer systems that are untreatablein municipal sewage treatmentpiants. The Ministry of Environmentshould assist the municigalitiesby drafting a sample ordinance that could be adopted by the municiRalities.87

153. Soil standards. Soil quality standardswere establishedby the Council of Ministers in 1979 and define maximum allowableconcentration of heavy metals in soils.88 The Ministry of Environment,in cooperationwith the Ministry of Agriculture,planr to develop a complete set of soil standards which would specify MACs for several other substances.

154. Standards for hazardouswaste disposal. The Ministry of Environment have recently drafted a waste ordinancefor the tracking,management and safe

85 A separate set of effluent standardsissued in 1978 apply to hazardous discharges to municipalsewage systems without treatmentplants, see Table 28 in Annex 1. The Ministry of Environmenthas recently drafted a regulationwhich would apply to dischargesto sewage systemswith wastewater treatmentplants. Although the regulationhas not been issued yet, the Ministry advised its inspectoratesto use it for enforcementpurposes.

86 The water and sewage companyof Sofia does not allow the dischargeof oil products and imposed fines of 1,000 Leva each on industriesfor violations of that rule in 45 cases in 1990. The level of the fine (US$56 equivalent) has become too low by now.

87 The draft regulationmentioned in footnote 87 above could serve as the starting point.

88 The MACs depend on soil pH levels (See Table 18 in Annex 1). - 44 -

disposal of hazardouswastes. However, the hazardouswaste definition still appears to need refinement. An additionalproblem is that the proposed waste tracking and disposal ordinancedoes not cover transportof wastes.,since this responsibilityresides in the Ministry of Transport. Therefore the two MinistrLes should jointly oregare and issue a regulationon the collection. transgortation-anddisposal of hazardouswaste. That regulationshould also determinereportin_greguirements in order to establisha cradle to grave trAcking system.

155. Standards for domesticwaste disoosal. Although local governmentsare responsiblefor the collection,transport and disposal of domesticwaste, the Ministry of Regional Development,Housing and Constructionhas responsibility for the developmentof planning and design criteria for landfills. However, the ordinance for the location,construction and operation of municipal landfillspublished by that Ministry does not reflect current international standards. Therefore the ordinanceshould be revised in consultationwith the ministry of Environment.

D. Enforcement

156. An effectivecommand and control regulatoryprogram for environmental protection in Bulgaria did not exist in the past and has not yet been put into place. While strict ambient air quality standardsand water quality standards exist, there are at present no practicalmeans to control facility operation to assure that standardsare achieved. Absence of a permit system89 means that there are, as yet, no plant specific requirementsto enforce. While factorieshave a general obligationto meet emission limits, no deadline was set for complianceby existing facilities. The enforcementsystem relies upon fines and civil penaltieswhich, for various reasons, proved to be ineffective (see below). As a last resort, closing of a plant because of gross environmentalviolations is legallypossible, but it must be approved by the CounvAilof Ministers. However, the Council of Ministers in the past frequentlyused its authorityto wave environmentalrequirements in the 'nationalinterest".90

157. The present legislationstipulates civil penalties (to be paid by individuals)for violationsof environmentallaws and regulations. During the late Eighties, about 1,500 violationswere recordedby the regional environmentalinspectorates annually. However, 90 percent of the violations went without punishmentand the maximum civil penaltiesapplied did not exceed 500 Leva.

89 A permit states the specificconditions under which the government concludes that a proposed or already operating facilitymeets or complies with the requirementsof law. Permitsmay deal with air pollution,water pollution,waste'disposal, land.use, worker protection. Permits apply only to wastewater discharges in Bulgaria,issued once with no expirationdate and simply equal to ambientwater quality standards.

*0 However, some strong steps have recently been taken, including slowing productionat a lead smelter, stopping the use of copper ore with high arsenic content at a copper smelter and closing uranium mines which were using sulphuricacid injectionto extract uranium ore. - 45 -

158. Since 1979, a system of fines to be paid by enterprisesfor pollution of air, water and land above the permissiblelevels has also been in effect.91 Permissiblelevels are definedby the emission standards for air pollution (fines apply to 16 different substances),by the effluent standards for water pollution (25 indicators)and by the ambient standardsfor land pollution (12 kinds of waste are fined).92 The regulationdetermines the fine in a one to ten range for each pollutant.93

159. If pollution above the permissiblelevels is suspected,the regional environmentalinspectorate takes a sample and sends it for laboratory analysis. After the analysis,the inspectoratesenos a protocol with the amount of the proposed fine to the Ministry of Environmentfor approval (the inspectoratemay set the fine anywhere within the one to ten range). After approval, the enterpriseis notified. The fines are to be paid from enterpriseprofits and are collectedmonthly. If the fine is not paid, the inspectoratehas the right to withd-tawthe amount from any bank account of the enterprise. If the enterprisedoes not take steps to reduce pollution, the charge increasesby 10 percent after one month and by another 10 percent after two months. If pollution is reduced, the enterprisenotifies the inspectorate which carries out a new measurement.

160. Fines accrue to an extrabudgetaryfund of the Ministry of Environment. The fund was set up to finance environmentalprotection activities. The fund supplementsthe resourcesof enterprisesor municipalitiesin financing environmentalinvestments and provides initialsupport for new, innovative environmentalprojects. Part of the proceeds of the fund finance research activities and provide individualbonuses. The Ministry of Environment prepares annual plans for the operationof the fund, which are subject to approval by the Ministry of Finance. Between 1986 and 1990, total fines averaged about 20 million Leva annually.94 At the end of 1990, the fund had 36 million Leva balance left which was carried over to 1991. In 1991, only 16 million Leva is expected to be collected (equivalentto US$0.9 million or about 0.01 percent of the estimatedGDP), since decreasedeconomic activity leads to reduced pollution.95

161. Why are the fines ineffectivein deterringpolluters? First, fines are applied in not more than 150-200 cases annually,i.e., many polluters go

91 Municipalenterprises are exempt from fines; this provisionshould be urgently deleted.

92 In addition to hazardous substances,fines apply also to deposits of constructionwaste, domesticwaste, metals, plastics, etc.

93 See Table 29 in Annex 1.

94 About 60 percent of the fines were paid by heavy industry. Most of the fines were related to water pollution (74 percent in 1989). About 40 percent of the fines were collectedin the Burgas, Sofia and Plovdiv regions. The sectoral allocationof investmentsfinanced from the fines can be found in Table 30 in Annex 1.

95 For a comparisonof fines collectedduring the first eight month of 1990 and 1991, see Table 31 in Annex 1. - 46 -

either undetectedor exempted.96 Second, the level of the fines is so low that the fines are unable to induce pollutioncontrol actions.97 Third, fines are unlikely to be effectiveagainst state-ownedenterprises, at least until these enterprisesare made autonomous,operate in a market environment and cannot rely on the government to bail them out.

162. Faced with the ineffectivenessof the current enforcementsystem, the Ministry of Environmentplans to raise the level of fines substantiallyto deter pollutionabove the standardsand to introducea system of pollution chargeswhich would apply to activitieseven when pollutionstandards are met. Are these measures going to be :effective?What is the right balance between "command and control" and "marketbased" instrumentsof environmentalcontrol in Bulgaria?

163. Command and control (CAC) versus market based (MB) instruments. If the objective is to achieve a certain ambient quality, the core activitiesof a regulatorysystem are essentiallythe same whatever control instrument is chosen. Pollutershave to be locatedand informed about the regulations, their performanceand the local ambient conditionshave to be monitored, the nature of violationsand appropriatesanctions have to be determinedand enforced. The regulatorhas to know the actual level of emissionseither to verify that emission standardsare met (the facility is operated according to the permit) or to establish the appropriatepollution charge. Difficultyof enforcementtherefore cannot provide a basis for selectingeither group of instruments.

164. Command and control regulationhas significantcosts. It requires a large bureaucracy,slows private decision making and creates obstacles to innovation. Market based incentives,systems of private liabilityand requirementsfor disclosureof informationcan in certain circumstances produce economicallyefficient pollution reductions with less direct governmentintervention in private decisions. The advantageof market approachescomes from the discretionthey allow pollutersto decide when and how to reduce emissions,balancing the cost of reductionsagainst the costs of continuing those emissions. However, in some cases the harm or risk of harm is so great that society rather than the polluter should make the decision when and how to reduce pollution.

96 For example, fines do not apply to SO2 and NOx emissionsfrom power plants. If a sewage treatmentfacility is not operated properly, the municipalityhas to pay a fine. Municipalsewage systems,however, may dischargewastewater without any control if they have no treatmentplants. Obviously,that creates a disincentiveto invest in treatmentplants.

97 For example, the maximum fine for chemical oxygen demand (COD) in water is 1.5 percent of the charge applicable in Germany (at current exchange rates). The largest fines in 1989 were one time sanctionsfor soil pollution in the 50 to 200 thousand Leva range (at the 1989 official exchange rate, 25 to 100 thousandUS dollars). - 47 -

165. In other words, MB instruments(e.g., pollution fees) allow flexibility in pollutionabatement but lead to more uncertaintyin pollutionreduction. 98 Therefore,everything else being equal, MB instrumentsare superior if small changes in pollutiondo not make much differencefor social damage but cleanup is expensiveand the cost of the industrymay increase radically.99 The converse is true when the pattern is reversed,i.e., CAC instrumentsare superior if deviation from ambient quality leads to change in social damage which is much larger than change in the cost of industry.

166. The presence and importanceof hot spots in Bulgaria imply that control regions are very heterogeneous,therefore ambient quality objectivescannot be achievedwith the applicationof uniform pollution fees or uniform emission standards. While common pollutantslike particulates,S0 2 or BOD have several sources even in hot spot areas, heavy metals (with the exceptionof lead) usually originatefrom a single source. That calls for plant specific requirementsand makes the applicationof MB instrumentsless appropriate.

167. Market based instrumentsof environmentalmanagement work best in a market economy. In a market economy, if enterprisesare required to pay environmentalcharges which take account of the social costs of extractionand pollutionof natural resources,the operationsof the enterpriseswill be modified to make more efficientuse of resourcesand to reduce the volume and potential toxicityof any wastes that are produced. In Bulgaria, the institutionalframework of a market economy will develop over an extended period and it will take time before market rules become effective. Dominance of state industrywith limited accountabilityand soft budget constraints makes the economic incentivesprovided by MB instrumentsinevitably less effective.

168. There is a history in Bulgaria of inconsistentlyapplied penalties that were too small to create significantincentives and served primarilyah sources of revenue. It is importantto distinguishbetween market based incentives,which must be calculatedto be large enough to change behavior; penalties,which must at least remove benefits arising from violation of the law; and revenue measures which may appropriatelybe levied as user charges or pollution charges, but are calculatedto raise the desired amount of revenue, rather than to change behavior.

169. However, the advantagesof raising revenues for the financingof environmentalinvestments through pollutioncharges should not be underestimated. The alternativemethod of financing,i.e., relying on central governmentbudget, has substantialcosts (so-calleddeadweight losses) caused by distortionsin the economy due to general taxes which are needed to raise revenues. In the current economic situation,the opportunityto generate fiscal revenues in a non-distortionaryfashion should be explored.

98 Although tradeablepermit systems lead to more certainty in overall pollution reduction,their effect in a particulararea within the control region is still somewhatuncertain due to the possibilityof pollutionpermit concentrations.

99 For informationon the dependenceof marginal abatement costs on the level of pollution reduction in another Eastern European country, see Table 32 in Annex 1. - 48 -

170. In summary, Bulgarianeeds to rely on a blend of CAC and MB instruments. with greater emphasis given initiallyto the former. At the beginning, economic instrumentswill primarilyperform a revenue generationfunction and their role in inducing least-costsolutions for pollutionabatement will develop only over the long run.

171. The first task is, therefore,to put in place an effective CAC regulatoryprogram.. As argued above, applicationof CAC instrumentsshould concentrateon hot spots and should aim at the achievementof a revised set of ambient quality standards (establishedat the national level). For already existing facilities,plant specificenvironmental requirements should be establishedfollowing the completionof environmentalaudits and a series of negotiationscarried out at the regional level. A system of permits. which specify these reguirementsfor the operationof industrialfacilities. should be introducedas Rart of a comprehensiveenvironmental legislative package. A permit would have a set duration (5 years) and, as a minimum, specify all emissionpoints within the facility,set interimand final emission limits with compliance schedules,and establishself-monitoring and reporting requirements. It would also contain emergencyaction plans for dealing with accidental releases and alert-warninglevel episodes.

172. The permit program should be phased in over a number of years with the largest sources receivingpermits first. For new facilities,a program of pre-constructiondesign reviews should be implementedimmediately. Environmentalimpact assessments,carried out at an earlier stage of the project cycle, should estimate the effect the new source is expected to have on ambient air, water and soil quality. Followingthese assessments,design reviews would assess whether the facility as designed complieswith pollution control requirements. Satisfactoryresult of a design review would be the condition to obtain environmentalpermits. Permits should be renewed no less frequetitlythan every five years. The current practice of exemptionsshould be discontinued. Compliancewith permits should be monitoredfind fines for Rollution above Rermitted levels should be raised to a level that provides strong incentivesfor enterprisesto adhere strictly to permitted levels (i.e., fines should be truly Dunitiveand reflect the seriousnessof the violation),

173. Introductionof pollutioncharges has been made possible by the adoption of a the new Basic EnvironmentalLaw in October 1991. In principle,pollution charges should be linked to the severityof problems associatedwith various pollutants. The current coverage and structureof fines, despite their level being extremelylow, can serve as a basis for the establishmentof a system of pollutioncharges. 100 Primary targets should be those common pollutants, which have multiple sourceswithin air control regions and river basins. Charges should be included among the productioncosts of the enterprisesand may come from a variety of sources including:

permit issuanceand renewal fees tied to the size of the source; emission fees for major sources based on reported actual emissions or alternativelyon the amount of emissionsallowed in the permit

100 It is easy to see that fines currentlyact more like charges. Fines, which sho:.ldbe treated exceptional,are part of "businessas usual" for many enterprisesand are a regular,planned source of financingfor the central government. - 49 -

on an annual basis (expressedin Leva per ton of emissionsper year);

- a fee for each inspectionto cover the costs of the inspection.

174. Before a system of pollutin2charges is iXitroduced.considerable amount of further analyticalwork wil be needed:

(i) estimatesfor total revenues from pollutioncharges should be developedbased on differentscenarios for the level of charges; (ii) the impact of pollutioncharges on productioncosts should be analyzed; (iii) the distributionof revenuesbetween central government,regions and (possibly)municipalities should be worked out; (iv) a medium term plan for the applicationof revenues accruing to environmentalprotection funds at both the central and regional levels should be prepared; (v) administrativeprocedures for both the assessmentand collectionof the charges and the operationof the environmentalprotection funds should be specifiedand institutionalcapability to administerthese proceduresshould be developed (SectionH below proposes that funds should be disbursedon a grant basis and it also describesproposed fund eligibility criteria).

175. The work should be carried out by a group of experts from the Ministries of Environment,Finance, and Industry,under the general guidance of the Ministry of Finance. The proposed level of charges should take into account institutionalconstraints, especially in the areas of administrative capabilitiesfor project review/screeningand disbursement(the fund administeredby the Ministry of Environmentalready has unused balance, see para. 160 above). Because the environmentalprotection funds are extrabudgetaryaccounts, it is very importantthat the funds are operated in a transparentway, fully disclosedto the public.

176. Incentives.Because the previous practice of financingcapital investments from the budget has been stopped,both environmentalfines and interestpayments come out of taxableprofits, so there is no asymmetry between the treatmentof fines and pollutionreduction investments. The idea of investmenttax credits for investmentin both environmentaland energy efficiencyimprovement has been raised several times recently. The problem with an investmenttax credit is that it would strengthenwhat seems to be the Bulgarianenterprises' natural inclinationto seek capital-intensivesolutions to all their problems. Most enterprisesare not yet implementingno-cost and low-cost actions. The focus should be on these first, before providingnew incentivesfor more capital-intensivesolutions. Also, given their continued political power, heavy industriescould use an environmentalor energy efficiencyinvestment tax credit to subsidizewholesale process changes (for example, continuouscasting), even though such investmentmay not representa productiveuse of the country'sscarce capital resources.

177. Two other measures that could provide an incentiveto environmental improvemenuinclude reductionor removal of import duties or turnover/value added tax on environmentalimprovement equipment or services. There is a precedent already: productionfrom waste materials is supposed to be tax-free. - 50

The Ministry of Finance is skepticalabout new tax preferenceson the grounds that such preferencesare complex,help only profitablecompanies at a time when there are not many such companies, inevitablycreate unforeseen opportunitiesfor tax evasion, and result in a revenue loss which the governmentcan ill afford. This skbpticismis understandableand seems to be justified. More than any special incentive,the most beneficialwould be an overall economic and monetary situationwhich permittedreduction of interest rates to reasonable levels and, on a controlledbasis, creation of sufficient liquidity in the financialsystem allowing long-termlending to borrowers based not on political considerationsbut on enterprises' creditworthiness.101

178. jlsecares It is equally importantthat charges for the use of natural resources - water, forests,mineral resources,land - are set at the appropriatelevel. Changes in the pricing of natural resourceswill operate in the same directionas higher energy prices in stimulatingenterprises and other consumersto increase the efficiencyof natural resource use and thereby reducing negative impacts on the environment. The paragraphs below present the case for each group of resources.

179. There is a general lack of incentivesfor water conservationin houses and in the industry and agriculturesectors. Piped water and sewerage tariffs generallydo not cover more than the costs of operationand maintenanceof drinking water treatmentand distributionand wastewatercollection and treatmentsystems. In the past, capital costs were covered from the budget and prices were centrallyregulated and uniform all across Bulgaria. In 1991, central governmentcontrol was abolished. Prices are set by the enterprises themselvesbut has to be approved by the municipalcouncils. Guidelines issued by the National Commissionon Prices recommendthat water and sewerage enterprisesset their prices at a level which covers costs (including depreciation)plus a 15 to 20 percent profit. Although the practice of covering investment costs from the central governmentbudget is to be changed, municipalcouncils appear reluctantto implementthe pricing guidelines. As a result, the water and sewerageenterprises are still not chargingprices which would cover the costs of necessary capital investments.

180. There are no payments for the water received from dams for either municipal or industrialuse. Similarly,the use of groundwaterresources is free of charge even in areas where the aquifer is overextracted. As described in Annex 11, users pay about one percent of irrigationcosts. Irrigationis very energy intensivein Bulgaria,because water from low lying valley sources must be lifted and on-farmmethods rely heavily on pressurizedapplications. Higher irrigationwater prices would lead to more efficientwater use and reduction in electricitydemand for irrigation,which in turn would reduce pollution. In summary, pioed water tariffs should be raised to cover cap4ital costs. raw water charges should be introduged.groundwater extraction fees should be establishedwhere the aauifers are over2Stractedand the grice of

101 Banks created at the end of 1989 are very thinly capitalized. Interest rates currentlyare 52-54 percent, but with bank fees the effective interest rate reportedly is 56 percent. In theory,banks lend for a maximum of 10 years. In practice,with interestrates at 56 percent at a time of economic downturn many enterpriseswould borrow only in desperationand only on a short term basis. Until interest rates decline substantially,it is difficult to envision a good prospect for environmentalinvestments which require significantdomestic debt financing. - 51-

irrigationwater should be raised to cover at least the cost of electricity applied to lift and pressurizewater.

181. The forestry stumpage fee is set as a percentageof the price and depends on the quality of trees cut (for example, it is set at five percent for firewood and 55 percent for the highest quality wood). A new price scheme for forest products was introducedon July 1, 1991. The price of raw timber was increasedseveral times and in somewhatbetter aligned now with world market prices. The governmentis planning to phase-in additionalprice Increasesgradually, with price liberalizationbeing its long term objective. While the-levelof the stumpage fee as a percentageof the price does not seem to be too low, revenue from the fee has been insufficient(until recently the domestic price was less than 10 percent of the world market price). Following the recent.priceincrease, the higher revenues from the stumpage fee would be an importantcontribution to the budget of the Committeeof Forests. However, the preservationof the forestryresource is a constraintwhich should be taken into accountwhen decision is made to cut trees with the purpose to obtain domestic or hard currency.

182. Funds allocated to protectedarea managementare inadequate. Substantialcuts in funding for protectedareas have been recently reported. Yet, nature preserves,national parks, and other such protectedareas have significanteconomic value. Such areas can reduce flooding,provide pollution control benefits,protect valuable genetic resourcesand serve as income generatingtourist destinations. These values ought to be recognized explicitly in the process of decisionsto protect natural areas. The income generatingpotential of parks and protectedareas is not utilized at all.102 While applicationof visitor fees cannot be implementedin the short to medium term because access to the parks is currentlyunrestricted, a special "nature tax" should be levied on the revenues of Balkantouristand other operators of facilitiesin (or adiacent to) existing and potentialpark areas, Proceeds from the tax should be earmarked for financingof nature protectionand public education activities. The level of the tax should be moderate (in the range of 5 to 15 percent) and based on a comparisonof estimatedtax base and hence resultingrevenues and the financingneeds. Similarlyto the environment protection funds, nature tax revenues should be applied in a transparentway with full disclosureof annual revenues and the use of funds.

183. The users of mineral resources,all state companiesuntil now, do not pay royalties (resourcedepletion charges). While some of these resources (e.g., coal and certainmetal ores) are marginal or even sub-marginal,a system of royaltiesfor economicmineral resourcesshould be developed.

184. Past prhctices in land-useplanning have includeda hierarchicalsystem of plan preparationbased on centrally-directed-standards,enforced by local governments. There was active applicationof building standards, architecturalcontrol, and attentionto the preservationof cultural style and historic buildings. Approval of major projects and sites was done by the

102 For example, it is estimated that the Vitosha People's Park has one million visitors annually. The fee charged for one ride on the ski lift in the Park was 80 stotinkiuntil very recentlyand a one day pass for the ski lift cost 4 Leva. These fees have recentlybeen raised, but the recreational facilitiesmay still not be self-supportingfinancially. -52-

central authorities,103 and included multi-sectoralreview at the national level (a recent change in the planning process hiasincorporated an opportunity for local public review and comment on municipalprojects). While the planning process may have had little influenceon the siting of major industries,it appears to have been relativelysuccessful for smaller-scale residentialand tourism development. The best elements of this process should be preservedand adapted to the evolving new governmentalsystem.

185. While there is no land market in Bulgaria that would establish the value of land, a one-time fee must be paid when agriculturalland is convertedto other land uses.l10 These fees were establishedunder the Protectionof Cultivatedand Pastures Land Law of 1973 in order to create a barrier that prevents the loss of arable land. Payments accrue to a land ameliorationfund under the Ministry of Agriculture. The fees are extremelyhigh and could negativelyeffect development. However, the fees didn't work as intended under the previous system of central planning,because either exceptionswere granted or the cost was simply covered from the central governmentbudget. Under the new Ownership and Use of AgricultureLand Law of 1991 a moratorium was imposed on the conversionof agricultureland. While this moratoriummay be useful in the short-termto prevent land speculation,it should be eliminated as soon as conditions for a nroperly functioningland market (e.g., com2leted land title registration)are established.

186. The municipalities'ability to manage domesticwaste is hampered by the lack of funding for capital costs for constructionof new landfillsand for purchase of transportvehicles. As in the case of water supply, capital costs used to be covered by the central governmentwhile user charges covered operationand maintenacecosts only. Ultimately.local governmentswill have tg raise the charges high enough to cover the cost of investmentin and operationof new landfills. Since charges could be up to 20 times higher than the present rate, financialassistance may be required in the adjustment period. The newly establishedenvironmental protection funds under the central and regional governmentsmay provide some of the resourcesneeded.

187. Coastal zone management. Central governmentcontrol over land use has resulted in a well-definedland-use pattern along the coast. Because of this centralizedcontrol the coast line of Bulgaria does not show the intensive strip developmentprevalent in other European coastal areas. The imnediate coast line developmentis in fairly well-definedtourism complexes and communities,separated by large stretchesof open agriculturaland forestry lands, and preservationreserves. 105

103 Now the National Center for Regional Developmentand Architecture.

104 The fees are 400,000 leva/ha (US$22,222/haequivalent) when agriculturalland is convertedto industrialuse, 200,000 leva/ha conversion to roads and housing developmentand 100,000 leva,/hawhen used for the constructionof irrigationsystems.

105 Coordinatedcentral governmentoversight of tourismadevelopment has been compromisedin the past because of separate, independentdesign and constructionof tourist-typefacilities by various institutions;trade unions, political organizations,youth groups and governmentministries. These facilitieshave not yet been fully integratedinto the tourism sector operations. - 53 -

188. However, the impendingland reforms and emergenceof a market economy will stimulate strong pressures for developmenton and near the coast.106 To accommodatethese pressures for economic growth, within the limits of the natural capacity of the land and water to sustain growth without adverse social and environmentalconsequences, the governmentshould take steps to establish a formal system of coastal zone management.

189. Coastal zone management (CZM) is a multi-sectoralsystem of managing the use of land and water resourcesto protect the long-terminterests of the public. A successfulCZM program must have the support and respect of the citizens living in the coastal zone, and thus must reflect the cultural and politicalnorms of the region. An effectiveCZM. program should be based on the followingprinciples:

- central determinationof legally enforceablegoals and standards; - decentralizedplanning, based upon comprehensiveland use plans107 conformingto uniform planning guidelines; - decentralized,delegated and diligent enforcement; - sassistance,supervision and review of local programs by central authorities; - skilled staff and financialsupport for program administration; i selectiveland acquisition/ownershippolicy for preservationand public access purposes; - public participationin the developmentand execution of the program.

190. On that basis, the CZM program should:

- establishstandards for local land use planning,building codes, sanitationcodes, and environmentalstandards, and require that these standardsbe reflectedin all master plans. To the extent that master planning is undertakenat the obshtina level, these plans should be reviewed and approved at the regional (oblast) level to ensure compatibilitywith national standardsand to coordinatewith plans for adjacent areas; - establisha land use permit system, with clearly defined hierarchicalauthority for permittingat the local, regional and central levels;

108 Tourism has been identifiedas a priority for economic expansion in the coastal zone. A number of tourism complexeshave been designed and built in the 1960's and 1970's, and the importanceof tourism to the regional and national economy is indicatedby the some 3,000,000annual visitors. Internationaltourism in the coastal zone provides two-thirdsof tourisms' hard currency revenues in the national accounts. Trends in tourist visitation,however, show a decline, stemming from current economic and political instabilityand from a longer-termdeterioration in the quality of accommodationsand service. Less than adequate transportation,communication and sanitation infrastructurealso affect visitationadversely.

107 The term "comprehensive"in the context of land use planning includesthe preparationof a detailed environmentalinventory and an assessmentof the natural carrying capacity of land and water resources, as well inventoryingthe significantdemographic factors. - 54 -

- strenghtenthe enforcementof environmentalstandards and land use permits, with adequatelytrained personneland with sharply increasedlevels of penalties for violations; - introducecovenants which limit the use of land transferredfrom the state to private owners and/or municipalitiesduring the privatizationprocess to purposes consistentwith the land use plans; - immediatelyidentify importantand unique natural areas for retention in the public domain.

E. Monitoring and InformationSystems

191. Environmentalmonitoring provides the necessary informationfor enforcementactivities. Monitoring systems serve enforcementneeds best when monitoring and laboratoryequipment requirements are defined by enforcement authorities. Allocation of limited monitoringresources should be based on mitigation priorities. Quality controlprocedures should ensure the reliabilityand replicabilityof data. Data collectionand reportingshould facilitatethe use of data in enforcementprocesses. These considerations suggest that responsibilityfor monitoringshould be assigned to the agencies responsiblefor enforcement.

192. Enforcementis not the only activitywhich uses environmental information. Standard setting (includingrisk assessment),scientific research,the public and the internationalcommunity all expect that their informationneeds will be met by the monitoringand informationsystem. However, monitoring is quite expensive,therefore it should be carried out in a cost effectivemanner: (i) emphasisshould be placed on meeting high priority informationneeds first; (ii) duplicationand overlap should be avoided without compromisingthe requirementsfor quality control.

193. Air auality monitoring. The ambient air qualitymonitoring network in Bulgaria is relativelyextensive. There are approximately100 monitoring locationsacross the country. They ate located almost exclusivelyin the major urban areas and around the major industrialcomplexes. The monitors are operated by three differentagencies (60 by the Ministry of Health, 30 by the Ministry of Environmentand 14 by the Instituteof Meteorologyand Hydrology). In addition the Ministry of Environmentmaintains a mobile monitoringvan which can take samples at any locationacross the country. The Instituteof Meteorologyand Hydrology also maintainsa network of 21 acid rain precipitationmonitoring sites across the cou._ry (in addition to their meteorologicalmonitoring stations).

194. Localizedambient monitoring is conductedfor the most part using wet chemistrymethiods (bubblers) over short time periods (30-90 minutes) and only during work days. These short samplingperiods are repeated three or four times per day. An exceptionto this are the dust monitors which normally run for an eight hour period. The mobile lab operatedby the Ministry of the Environmentuses automaticmonitors and there are additionalthree automatic monitors at the Regional Inspectoratein Varna. An evaluationof the wet chemistrymonitoring system revealeda number of serious deficienciesin the monitoringtechniques which call into question the accuracy of the results which are being measured.108

108 See Annex 13 for more details. - 55 -

195. There appears to be a great deal of overlap and duplicationin the monitoringbeing conductedby the three agencies. Within and between the agencies there are also many inconsistenciesin procedures and timing of the samplingwhich make comparisonof the monitoringresults almost impossible. Followinga period of transition,a realignmentin monitoring responsibilities should be instituted:

- the Ministry of Environment,since it is the agency responsible for the enforcementof air quality standards.should have resnonsibilityfor all "localized"ambient air qualitv monitoring, i.e., the routinemonitoring of pollutants specifiedamong the air quality standards. The design and methods of the monitoring program should be closely coordinatedwith the Ministry of Health;

- the Instituteof Meteorologyand Hydrology should cease localized air qualitymonitoring and concentrateits monitoring on regional (i.e.. the Balkan Peninsula)and global problems of air quality. This will allow it to meet its commitmentin the Global Atmosphere Watch Program being conductedby the World Meteorological Association. The Institutemust have the capability to provide the meteorolog'caldata necessaryto conduct the complex air dispersionmodeling which will be required to establishemission limits for areas not attainingthe standards;

- ethMinistry of Health should cease its ambient air quality monitoring and concentrateits efforts on the public health studies which it has been undertaking. The Ministry should have the opportunityto review and comment on the design of the Ministry of Environmentambient air quality monitoringprogram and should be provided with the results.

196. The array of sampling and laboratoryproblems and inconsistenciesmakes it impossibleto make a true determinationof the actual attainment of the air quality standards. It is essential that a gualitv control and quality assuranceelan be put into place. In addition.to utilize existing equipment better there is an equally urgent need for a review of the manual methods of air quality monitoringbased on current state of knowledge.

197. The PHARE program of the EC provided 3.5 million ECU to the Ministry of Environmentfor the purchase of new automaticsampling equipment to upgrade four monitoring stations (Sofia,Ruse, Varna, Burgas) and to set up five mobile stations and a calibratinglaboratory. The second stage of the program will provide additional 15 million ECU to finance a number of air and water monitoring stations (staticand mobile), equipmentand spare parts, training activitiesand technicalassistance. The automaticmonitoring stations will create an opportunityto establish"real" time alert and warning systems for protecting the public in the major Bulgariancities from high levels of air gollutionand radiation. Implementationof the PHARE program should receive high priority.

198. The capabilityto monitor emissionsin the regional inspectoratesor in the enterprisesis very limited. There is a lack of adequately trained staff in compliancedetermination and a lack of emission testing equipment. Emission testing equipment availablein the Regional Inspectorateshas the same type of samplingproblems as the ambientmonitoring equipment (the same techniquesare employed). Determinationof compliancewith emission standards Is not undertaken in a systematicfashion and appears to rely completelyon - 56 -

stack tests when the equipmentis available. Annual or more frequent testing of the primary stacks at major industriesappears to be the primary compliance tool. However, stack testing for many complex organic and toxic pollutants is not a suitable method and cannot characterizethese compounds.

199. There does not appear to be any effort to check productionrecords and estimate emissionsbased on mass balance calculations. The range of applied compliancedetermination techniques should includemass balance determinations,fuel and raw material testing. In addition, inspectorsfrom the Regional Inspectorateshould be trained in reading smoke (opacity)using the Ringlemann opacity charts. This is a very cost effectivecompliance determinationtechnique which is in universaluse in the United States. It is well suited to a developingnation such as Bulgaria which is short of expensiveand sophisticatedcompliance determination equipment.

200. Self monitoring and reportingby the major industrialsources appears to be unknown. Regulated industriesappear to lack any self monitoring equipment. Many countriesapply a system whereby major enterprisesmonitor their own emissions on a continuousbasis, subject to review by the government. This system saves scarce administrativeresources; however, it assumes tbat the governmenthas the capabilityto control the monitoring activitiesof the enterprisesand enforcementis carried out uncompromisingly. Regulationshould be introducedwhich reguires self monitoring and reporting by the enterprisesand makes the reportingof false informationa criminal violatio . The purchase of necessaryequipment may not be such a burden; it appears that applicationof stack gas analysis instrumentsprovides the most productive energy efficiency improvementopportunities for many enterprises (see Annex 8).

201. In Bulgaria, there is a widespreadbelief in the NGO community and among the public that industrialemission monitoring grossly understatesemission levels. Provision of better equipmentfor the environmentalinspectorates and systematicenforcement are necessary steps but will not be sufficientto deal with the problem. Thereforemajor pollutersshould be required to regularly publish emission data for the public.

202. Water quality monitoring. The 28 Hygiene and EpidemiologyInstitutes under the Ministry of Health have responsibilityfor monitoringdrinking water supplies. According to the guidelines,the Institutessample water from each supply (surfaceor groundwater)in order to carry out a basic sanitary analysis looking at pH, N03, ammonia, chlorine,phosphates, nitrates, iron, manganese, permanganateoxidizability, microbiological parameters, and biological oxygen demand. The main sanitaryanalysis by chemical indicators is done every three month and the microbiologicalanalysis every 15 days.

203. The territoryof Bulgaria is divided into hydrogeologicalregions depending on geologic and tectonicconditions. There are 276 groundwater monitoringpoints under the Ministry of Environment. Water samples, collected six to twelve times per year, are measured for total mineral content, chlorides, sulphates,nitrates, hydrocarbonates, calcium, magnesium, iron, manganese,organic pollution,toxic substances. Besides these indicators, watere quantity, temperatureand water levels are also measured. The informationis published annually in yearbookson hydrogeologicconditions.

204. Surface waters are monitoredby the Ministry of Environment,the Ministry of Health and the Instituteof Meteorologyand Hydrologyat 199 - 57 -

observationpoints (including12 on the Danube and 24 on the Black Sea coast).109 These regular observationpoints cover all major river basins (small rivers receivingminor dischargesare observed only when a specific need arises). Twelwe samples are taken in a year, one in each month. The collected samples are subject to analyses of a maximum of 33 parameters (five physical, 22 chemical and 6 hydrobiological).The'Ministry of Environmentand Ministry of Health regularlymeasure only eight parameters,while the Instituteof Meteorologyand Hydrologymeasures 25. The three agencies monitor the ambient water quality at the same points and for the same parameters,but in alternatemonths. A common manual describingmonitoring and laboratorymethods are used by the three agencies,although it appears that the laboratoriesunder the Ministry of Health are better equipped than the facilitiesof the other two agencies (therehas not been an overall quality comparisonbetween the agencies for years).

205. Although the monitoringarrangements appear well-coordinatedand not duplicative,it would be more efficientfor one agency to carry out all ambient monitoringof surfacewaters. Therefore,while the Ministry of Health should continue the monitoring of drinkingwater quality and provide input to the design of the surface water monitoringprogram, the Ministry of Environment,which is the agency responsiblefor the enforcementof ambient standards. should graduallytake over all regular ambient water quality monitoring activities. Ambient monitoringshould be better targetedat the types of dischargesexpected for each particularwaterway.

206. Effluentmonitoring is carried out by the Ministry of Environment. Effluentsare monitored50 meters downstreamfrom dischargepoints and a comparisonwith the resultsof upstreammonitoring is carried out to isolate the discharges in question. When a violationof standards is detected,a complex, but theoreticallycorrect formula is applied to calculate fines. As in the case of air emission monitoring,regulations should reauire self- monitoring and reportingof effluentsby enterprisesand make the reportingof fAlse informationa criminalviolation.

207. Soil pollutionmonitoring. Informationon soil contaminationhas its origin in a study which was aimed at mapping the areas of heavy metal contamination. The study was carried out by the Ministry of Environment,the Instituteof Soil Science and Agroecologyunder the Ministry of Agriculture and the Instituteof Hygiene and OccupationalDiseases under the Ministry of Health. The agencies togetherhave a total of 208 control points for soil pollutionarbund the country. Investigationsof many soil hot spots was inhibitedby lack of investigativemethodologies. The agencies involved are currently in the process of developinga standardizedlaboratory methodology for studying contaminatedsoils. Only heavy metals have been studiedup to now and an investigationof oil product waste in soil near Burgas or a study of soil pollutionaround the chemicalplants in Devnya pose analytical challenges for soil laboratories(for instance,no dioxin methodologyis available).

208. Despite these apparent deficiencies,it does not appear cost effective at this time to collect routine data on levels of soil contamination,i.e., the design and implementationof a comprehensivemonitoring system which would

10B In addition, the Instituteof Meteorologyand Hydrologyoperates 18 baseline monitoring stations on the Danube with 42 measurementpoints includingsome on the Romanian side c,fthe river. - 58 -

include regular soil pollutionmonitoring is not justified. However, it is importantthat informationcollected during the executionof specific studies targeted at serious contaminationproblems are shared between different agencies and summarizedin Ministry of Environmentpublications.

209. Hazardouswaste monitoring. Since 1981, generatorshave been required to report annually to regional statisticalcenters on the volume of waste produced and the amount of waste "utilized"(recycled). The regional centers provide the informationto the Ministry of Environmentand the National StatisticalOffice. The classificationsystem now in place in Bulgaria categorizesindustrial waste into 54 differentclasses. Examples of waste categories include: rock and soil from quarrying;coarse aggregatesfrom coal dressing; rock from undergroundmines; ferrous metals and non-ferrousore mining wastes; slurries and slags; oil sedimentsand oil refinery wastes; phosphogypsum;sulphur wastes; cement productionwastes; wood processing and cellulose productionwastes; leather processingwastes; animal wastes; food processingwastes; fly ash; sewage treatmentsludge.

210. Several problems were identifiedwith the currentwaste classification system which has been in place since 1981. First, the current classification does not distinguishbetween industrialhazardous wastes and industrialnon- hazardous waste. Therefore, there is not a real measure of the volume of waste generatedthat may pose a threat to human health and the environment. Second, other than reportingon the amou.t of waste "utilized",generators of waste do not report on waste management activities,i.e. how they treat, store, or dispose of their wastes. As a result, there is no inventoryof waste dumps arGund the countrywhich are receivingtoxic wastes. Also, there may be free-standingpiles of toxic waste outside of municipal dumps in various parts of the country.110

211. The Ministry of Environmentis working on a new system for defining hazardouswastes that will attempt to rectify the problems noted above.111 The Ministry is also developinga regulatorysystem for tracking of waste from point of origin to point of disposal and is consideringa manifest system for transportof waste. Although the proposed regulationapplies a hazard/risk based approach to defininghazardous wastes, the technicalexpertise to implement that approach is lacking (there is very limited ability to analyze wastes). In summary, there is a need to develop (i) a new waste classificationsystem: (ii) laboratorycapabilities for analvzingwaste: (iii) a new reporting system for hazardouswaste: and (iv) a data management system for tracking informationon waste generationtransport and disposal.

110 For example, piles of coal mining waste could be observed in Bulgaria steaming in the hot summer sunshine. In Northern Bohemia, similar coal waste piles have been demonstratedto be emitting significantquantities of polycyclic aromatichydrocarbons, but in Bulgaria they did not seem to be recognizedas an issue.

III The new system would classify wastes around four major categories: (i) wastes of animal or plant origin (includingslaughterhouse wastes, tanning wastes, wood processingand cellulosewastes); (ii) wastes of mineral origin (includingslags, ashes and dust from smelters and incinerators,mineral sludges); (iii) chemicalwastes; and (iv) domestic wastes, includingdomestic sewage sludge, industrialwaste water treatmentsludges, waste from thermal treatmentprocesses and medical waste. 559 -

212. PEsticidesmonitoring. Prepared in conjunctionwith the Ministry of the Environmentand the Ministry of Health, the Ministry of Agriculturepublishes a list of approved agriculturalchemicals. Forty-seven(47) chemicals are currentlyregistered for applicationby private individuals(qualified plant protectionspecialists have access to a wider arsenal of pesticideproducts). There is no effectivesystem in Bulgaria to detect and monitor levels of pesticides (and their derivatives)in soils, waters, or the food chain. Because of the complexityof products,pesticide monitoring is a difficult, costly and time-consumingtask even in very advancedcountries. A monitoring program slhouldkey on a few pesticidesor derivativesand should be focussed on those areas where, because of sandy soils or karst topography,authorities suspect that contaminationmay be occurring.

213. Food surveillanceappears to be in a chaotic state. There are no less than 12 agencies engaged in some monitoringand regulatoryactivity in relation to the domestic food supply. The three most importantorganisations are the Ministry of Health (hygiene inspectionservice), the Ministry of Agriculture(veterinary inspection service) and the Committeefor Standardisation(control of commercial,nutritional and safety aspects). Nonetheless,very little useful informationhas been retained on the nature and extent of food contamination. The agencies do not collaboratewith one another and do not use Ministry of Environmentinformation on soil pollution as a guide to how and where to strategicallysample the food supply. Most of the analyticalprocedures used to evaluate food have long turn-aroundtimes, so that most food is sold before the results of analysis are available. This is a particularlyimportant problem for samplingunder the auspices of the Ministry of Health, since it is mostly confined to foods found at the market place ready for sale rather than at the farm gate. There are different laboratorymethods and there is no national quality control or laboratory accreditationprocess. 112 There is also no equipmentavailable which could be considered to be of referencelaboratory quality.

214. The government,with assistancefrom the Food and Agriculture Organisationof the United Nations (FAO),has recentlycarried out a comprehensivereview of the food surveillancesystem. 113 On the basis of that review, it is recommendedthat all food control activitiesbe brought under a single food control agency which should report to the Chief Sanitary Inspector.Deputy Minister of Health. Other agencies (Ministryof Agriculture,Ministry of Environment,Committee of Standardisation,Academies of Science and Medicine)would be representedin the managementboard of the food control agency. Under this agency, a single food control laboratory network should be establishedwith five rezional laboratoriesin Sofia. Pleven, Varna, Burgas and Plovdiv supportedby local testing stations. The regional laboratorylocated in Sofia should be designatedas the central referencelaboratory with overall responsibilityfor quality control.

112 For reasons of ease of analysis,virtually all agenciesmeasure nitrates in food. One investigatorcirculated a cucumber sample to several laboratoriesand found variations in its measured nitrate concentrationfrom 40 to 1150 milligramsper kilogram.

113 B.A. Schick: Food Control in Bulgaria,Report Prepared for FAO, May/July 1991. -60-

215. Madation monitoring,ll Among environmentalinformation, radiation data has been the most shrouded in secrecy in Bulgaria over the past several decades. The Laboratoryof EnvironmentalRadioactivity of the Ministry of Environmentmeasures background radiationa few times per year at 574 points evenly distributedon Bulgaria's territory. The most frequent (two times per day) measurementsare made at permanentobservation stations of the Institute of Meteorologyand Hydrology in Sofia, Plovdiv, Stara Zagora, Varna, Burgas, Pleven and Mihajlovgrad. Radioactivityof the Danube is measured at eleven observationpoints, includingthe country entry and exit points, four times per year.113 The Instituteof Nuclear Medicine,Radiobiology and Radiation Protectionunder the Ministry of Health carries out measurementsrelated to occupationaland public health investigations. The Instituteregularly monitors uranium mining and enrichmentoperations, carries out air monitoring around the Kozloduy nuclear power plant and measures radiationin the Danube, 12 kilometers downstreamfrom the plant.11 6

216. Informationsystems and disclosure. The enforcementand monitoring programs outlined above require substantialincreases in the data gathering, storing, and analysis capabilitiesof the Ministry of Environment. Current capabilitiesof the Ministry are inadequateeven for its current system,much less for an expandedprogram. Automaticmonitoring, for example, requires greatly enhanced computer storage capability,because of the large quantities of data which are generateddaily. Improved air and water quality modeling requires computerswith expanded analyticalcapabilities. Thereforeit is recommendedthat a plan for the developmentof a comprehensiveenvironmental data managementsystem (includingthe capabilityto present informationon a geograpnhicbasis) should be prepared as soon as possible. Some of the needs identifiedin this plan could be funded in phase 2 of the EC PHARE program.

217. At present, there appear to be few incentivesfor governmentofficials to disclose environmentaldata; to the contrary,withholding of data has been a widely accepted principleand behavior. For this to change requires not only a strong legal requirementfor public disclosure,but also strong signals sent from the highest levels of governmentthat data must be routinely disclosed. There are some signs of increasedopenness, but much remains to be done. The governmentshould consider an aggressiveprogram of public information. Key elementsmight include:

- maps of "hot spots"; - simple to understandpollution alert systems; - requirementsfor public disclosureof pollutionemissions data by manufacturers;

llX Sources of radioactivityin Bulgaria include the Kozloduy nuclear power plant, uranium mines and the lignite fired thermalpower stations (due to the natural radioactivityof locallymined lignite).

115 None of the measurementsin 1989 indicatedthat wastewatersfrom the Kozloduy nuclear power station added to the background radiationof the Danube. Source: "Green Book", Ministry of Environment,1991. page 256.

116 According to the Institute,no elevationsabove background air and water radiationlevels have ever been found around Kozloduy. - 61 -

- maximum use of the press to disclose information(pollution information,e.g. beach water quality reports, can become as routinizedas weather reports);117 - opportunitiesfor the review of data gathering and reporting techniquesby outside experts and NGOs.

218. S=Mary. There is substantialoverlap between the environmental monitoringactivities of several governmentagencies, especially the Ministry of Environmentand the Ministry of Health. Outdatedmonitoring equipment, lack of qQality control and uncoordinatedreporting systems lead to situations when highly inconsistentdata co-existwithout any attempt to resolve the apparent contradictions. There is an urgent need to rationalizemonitoring activities in order to avoid duplication,improve coordination and strenghten quality control. Also, there is a generalneed for better equipment, training and improved quality control procedures (substantialassistance is expected from the EC PHARE program). In addition,easily accessiblesummaries of environmentalexposure and health data should'becreated, so that complete and timely informationcan be made availableon equal terms to policy-makers, scientists,and concerned citizens. The recent publicationof the first book in a series of yearbooks on the status of the environment(the "Green Book") by the Ministry of Environment-was a very importantstep in that direction.

F. Institutions

219. Central governmentagencies. There are several central government ministriesand committeeswith responsibilitiesrelated to environmental protection. Overell coordinationof environmentalprotection activitiesand pollution control is the responsibilityof the Ministry of Environment (thereforeit sets emission and effluent standards).,protection of human health from environmentalthreats is the responsibilityof the Ministry of Health (thereforeit sets and monitors ambient standards),forests and most of the protected areas are managed by the Committeeof Forests, extractionof mineral resources is controlledby the Committeeof Geology and Mineral Resources,water resourceuse is controlledby the National Water Council and nuclear safety is controlledby the Committeeon the Use of Atomic Energy for Peaceful Purposes. The Academy of Sciences through its Institutesof Water, Ecology and Meteorologyis active in the area of environmentalresearch and monitoring. Heads of all these agencies (with the exception of the Academy) are appointedby and report to the Prime Minister.

220. The Ministry of Environmenthas about 100 employeesin the central office in Sofia, 165 in its Monitoring,Research and InformationCenter, also in Sofia, and 350 in 16 regional environmentalinspectorates. Until 1991, the central office had elightdepartments aligned accordingto the regulated sectors (i.e., chemical industry,agriculture, etc). The departmentshave recentlybeen re-structuredaccording to the regulatedmedia (i.e. air, water, soil...). There are six newly created or re-organizeddepartments, adopted on July 17, 1991, as follows: (i) EcologicalPolicy and Strategy, (ii) Water Protection, (iii) Air Protection,(iv) EnvironmentalHealth Problems of Settlements,(v) Forests Protection/Protected Areas, Plants and Animals, Genetic Fund, (vi) Land and Soil Protection,and a special unit called the

117 For example in Katowice (Poland),ambient air quality readings in relation to standards are routinelyreported. - 62 -

State Inspectoratefor UndergroundResources. 11 8 Since four departmentsin the new structureare media based, in order to avoid compartmentalism,the managementof the Ministry and the two crossrmediadepartments should play a very strong integratingrole.

221. The Monitoring,Research and InformationCenter of the Ministry has three functionalgroups (appliedscience and research,monitoring and informationsystems, central laboratory)and an information/documentation unit. The Center collects and analyzes data from regional inspectorates,the Ministry of Health and the Instituteof Hydrology and Meteorologyand publishesa quarterlybulletin on air and water quality (the "Green Book" was also compiled by the Center). The regionalenvironmental inspectorates report to the Ministry and implementpollution control and monitoringpolicies in the country divided into 16 regions. Each inspectoratehas its own small laboratory (usuallypoorly equipped)and a staff of 12 to 35 technical specialists,working on a territorialbasis.

222. The Ministry has two advisory councils. The Collegium, an internal advisory council, assists the MOE in managementdecisions. It consists of divisionheads, as well as regional inspectorateheads. In the past, the decisionsof the Collegiumwere binding upon the Ministry. In recent years, however, the authority of the Collegiumhas wcned. The OperativeGroup for EcologicalAccidents and Disasters is the other advisory council which gathers informationon environmentalaccidents or mishaps. The group is intended to serve as the core of an emergencyresponse and reportingmechanism.

223. Establishmentof a Supreme EcologicalCouncil of Experts and an InterministerialCoordinating Council has been proposed recently. The Supreme EcologicalCouncil would be comprisedof 21 individuals. Serving in an advisory capacity to the MOE, the Council'smain function would be to review applicationsfor financialsupport of projects and research and development activitiesin the area of pollutionabatement. After the introductionof pollution charges, the Council could become the governingbody for the environmentalprotection fund at the national level. However, the Ministry should also establisha permanentunit to administer the environmental protection fund. The InterministerialCoordinating Council would also be an advisory body, consistingof deputy ministers from various ministriesand NGO representatives. Through this council, the MOE would consult with government agencies and NGOs which have an interestin particularMOE activities.

224. While there is a need for a strong enforcementprocess with a clear mandate to vigorouslypursue all violations,the regional inspectoratesdo not have adequate legal personnel. Partial alleviationof that problem in the short run requires the strenghteningof legal capabilitiesat the national level so that MOE would be able to assist regional inspectoratesin the evaluationof violations of environmentallaws and regulationsand ensure that imposed penaltiesand correctiveactions are consistentwith national enforcementpolicy. Criminal prosecutions,where appropriate,would be referred to the state prosecutor.

225. The Ministry's technicalresources to address waste problems lag behind those for other media. No separate departmentexists for waste management;it is covered by only two people within the Air Department. The waste management

118 Chart A at the end of this report presents the new organization structureof the Ministry. - 63

capabilityof MOE needs considerablestrengthening by assigning.within the context of a visible. high priority orogram. comprehensiveresponsibility for waste management to a properly staffed unit.

226. It is expected that the Ministry will be the recipientof increasing amount of foreign aid. Thereforethe Ministry's capacity to absorb and coordinate external assistanceshould be strengthened. Specifically,a Prolegt Management Unit should be set up which would be responsiblefor the coordinationof all-externalassistance activities. Personnelin this unit would be responsiblefor the managementof consultantsand contractors, establishmentof a consultantrooster, supervisionof procurementacttons, preparationof terms of referenceand technicalspecifications, evaluation of proposals,preparation of contracts,financial management of activitiesand coordinationof audits of accounts.

227. Implementationof the environmentstrategy outlined in this study will require the strengtheningof human resourcesalso in the followingareas: (i) policy developmentcapacity, especially in relation to economic and financial issues; (ii) ability to review environmentalassessments, to perform risk assessmentsand cost-benefitanalysis; (iii) ability to guide and coordinate the environmentalprotection activities of local and regional level governments;and (iv) managementof public informationand educationorograms and coordinationwith NGOs.

228. The Ministry should play a leading role in coordinatingcentral and local governmentbodies and the private sector in the area of coastal zone management, in addition to its technicalcontribution in providing information,standards, enforcement of environmentallaws (including environmentalassessment procedures for new projects) and organizational support. To this end, the InterministerialCoordinating Council should prepare and adopt a national policy on protectionof the coastal zone which clearly sets out objectives,mechanisms and institutionalresponsibilities. The Ministry should strengthenfurther its links to the National Center for Regional Developmentand Architecture,particularly for coordinatingaction in the coastal zone.(and the buffer zones of protected areas).

229. National Center for Regional Developmentand Architecture. This agency has a large multi-disciplinarystaff of skilled analysts and planners, and is a vast depositoryfor geographic,demographic, ecological and economic informationfor all of Bulgaria. Apparentlythe agency has played a predominantro'le in central and regional planning over many years. It may be that this prominent role in the centralizedgovernment system has now resulted in doubts with respect to its' appropriaterole in a decentralizedsystem. However, this Center appears to be in the best position to support the Ministry of Environmentin coordinatinga multi-sectoralcoastal zone management system.

230. The Directorateof Health Prophylaxisand State Sanitary Control under the Ministry of Health has 100 staff in Sofia organized into five departments (environment,occupational health, epidemiology,nutrition, health of school children). There are 28 DistrictHygiene and EpidemiologyInstitutes under the general guidance of the Ministry with a total staff of about 1,200 (althoughonly 10 Institutesout of the 28 are equippedwith laboratories). Until 1991, the instituteswere subordinatedto 28 district level governments, -64-

but that governmentlevel is now abolished.119 The institutescollect air, water and soil ambient quality data and have a role in food hygiene and in inspectingindustrial work places.

231. The I!istituteof Hygiene and OccunationalDiseases under the Academy of Medicine supports the work of the Ministryby developinglaboratory methods, conducting special studies and proposingexposure norms and ambient standards. The Institutealso has a role in collectingand organizingdata from the 28 district level institutes. Most of the public health functionsin relation to radiationmonitoring and protectionhad been delegatedto the Instituteof uceleagedicine, Radiobiology.,and RadiationProtection, which operates separately from the rest of the public health sector of the country. The Institute is responsiblefor initiatingregulations, exposure limits, and other forms of legislationas well as carrying out human health studies in conjunctionwith the Ministry of Health.

232. Should ambient standards'be set by the Ministry of Health? As argued above, health effects are important,but not the only factors which ought to be consideredwhen setting ambient standards. The benefits of reduced pollution should be balanced with abatementcosts and the costs and feasibilityof enforcement. The Ministry of Environmentappeats to be in a better position to assess these trade-offsthan the Ministry of Health. Particularly,separation of standard-settingfrom enforcementis a serious deficiency in the current arrangementand probably contributedto the wide gap between regulationand reality. Thereforethis study recommendsthat national ambient standards (air. water and soil) are set by the Ministry of Envi:onment in coordinationwith the Ministrv of Health.

233. The Committeeof Forests. Because most of the designatednatural areas lie within mountain areas fallingwithin the jurisdictionof the Committeeof Forests, responsibilityfor management of approximately90 percent of Bulgaria'sprotected natural areas rests with the Committee.120 The Committee of Forests has two main functions:a) implementationof government policy with respect to forest managementand resources,and b) preservation and protection of forest common property resources. The Committee distinguishesbetween economic forests,where emphasis is placed on timber production,and "specialpurpose" forests,which include such places as protected catchmentareas, reserves,and national parks. The latter representsabout 30 percent of the forests managed by the Committee.

234. The Committeeof Forests (COF) has undergonesignificant changes in the past year. In January of 1991, the COF was created by the Council of Ministers pursuant to the dissolutionof the former Committeefor Forestry and Forestry Industry. The structureof the new COF was establishedin April 1991, and consists of the centralbody of the COF, 16 District Forestry Departments,and 164 State Forestry Enterprises. The centralbody consists of

119 Since the 28 health districtsare differentfrom the 16 Ministry of Environmentdistricts, which are different from the 9 regions (oblasts)used by the Central StatisticalOffice, integrationof environmental,health and economic data reported on a geographicalbasis is very difficult.

120 Three of the largest protectedareas are under differentmanagement: (i) Vitosha People's Park is managed by the Sofia Municipality;(ii) Sreburna BiosphereReserve is under the SilistraMunicipality; and (ili) Atanasovsko Lake is under the BulgarianAcademy of Sciences. - 65 v

91 experts, organized into nine departments,responsible for defining state policy in the field of forestry.121 One of these nine departments,titled ProtectedNatural Areas and Work Sites, is dedicatedto nature protectionand is comprisedof three experts. The department,which appears understaffed, conducts preliminarywork to develop proposalsfor new protected areas; makes proposals to scientificinstitutes to study and solve problems;assists AGROLESPROJECTin the developmentof managementplans (see below); controls protected areas to ensure the compliancewith the area's managementplan; investigatesallegations of misuse; and issues sanctions,among many other tasks.

235. Each District Forestry Departmentconsists of 20 - 25 persons who serve as regional representativesto carry out state forestry policy.122 The District departmentsare responsiblefor managing the State Forestry Enterprises,which are the basic units within the Forestry Authority. State Forestry Enterprisesconsist of two divisions.123 One is responsiblefor managing the resource stock and representsabout one-third of the enterprise. The staff receive their salaries from the stumpage fees depositedin the "SilviculturalFund". The second division is responsiblefor the economic functionsof the forests. This'division'representsabout two-thirdsof the enterpriseand the staff receive their salariesdirectly from the resourcesof the forest, i.e., timber industry,game hunting, forest products, etc. The three tiers of the forestry sector have about 84,000 employees,mostly in the State Forestry Enterprises.

236. The Instituteof Ecology of the BulgarianAcademy of Sciences was organizedabout two years ago. Its four departmentsinclude functioningof ecosystems; ecologicalmodeling and monitoring; environmentalgenetics and ecosystemprotection; and regionaldevelopment and environment. The Institute is the base for the organizersof severalBulgarian NGOs including The WildernessFund, the BulgarianSociety for the Protectionof Birds, and the Bulgarian Society for Conservationof the Rhodope Mountains.

237. The Instituteof Ecology recommendsprospective protected areas to the Ministry of Environment(in theory, other governmentagencies and private citizens may also submit proposals). According to the Nature ProtectionLaw, the Ministry must compose a commissionto examine the proposal in detail. This commission includesofficials of other central governmentagencies (such as the Committeeof Forestsor the Ministry of Agricultureif the area is located in their jurisdiction),staff from the regional inspectorates, regional and local governmentrepresentatives and representativesfrom the local community. After the commissionhas completed its examinationand agreed upon a certain regime (i.e.,what is the purpose of protectionand how the area will be managed, see below), the proposal goes to the MOE for preparationof the draft order for designation. The MOE circulatesthis draft order for comment by all interestedparties. When accordanceis reached, the final order is prepared and goes to the Minister of Environmentfor signature. The order is then passed to the State Gazette to be published. The order is

121 Chart B presents the organizationstructure of the Committee.

122 Charts C presents the organizationstructure of the District Forestry Departments.

123 Chart D presents the organizationstructure of State Forestry Enterprises. 66

distributedto all land owners within the protectedarea. From this moment, each owner must ensure compliancewith this order.

238. The developmentand update of managementplans for most of the protected areas is carried out by AGROLESPROJECT. It has three basic design departments,for forestsand game, parks, and roads. It also has a finance, planning and economicsdepartment and it has a laboratoryfacility for soil and vegetation analyses.124 On an annual basis ACROLESPROJECTdevelops plans for approximately350,000 hectares of forest, and for 150-200kilometers of forest roads. Its recent annual budget was 6.5 million leva. It works on a contract basis for the Committeeof Forests and other clients. AGROLESPROJECT employs a staff of 280, of whom 20 are "park engineers"working i. the parks section.125 The parks planning departmentworks closely with the forestry faculty at the lJniversityof Sofia and consults with biologists,botanists, and zoologistsfrom various institutes.126 There is very limited feedback from implementationresults to managementplans .127

239. Once the protectedarea has been designated,responsibility for managementmay rest either with the Committeeof Forests, the Bulgarian Academy of Sciences,or local governmcnts. In summary, responsibilityfor identifying,designating, and managing protectednatural areas is highly fragmented in Bulgaria. Therefore,an agency needs to be set uR in order to effectivelycombine administrationand managementof all protectedareas. The agency would serve as a neutral force designed solely for the purpose of nature protection. Its functionswould be entirely separate from activities related to the extraction/harvestingof economicallyvaluable resources. Characteristicsof such an independentagency would include financingfrom the national budget and also from revenues of the proposed Nature ProtectionFund; managementof its own budget; responsibilityfor protected area planning, management,implementation, and monitoring includingsole responsibilityfor the approval of any actionswithin park boundaries;and equal status with other agencies concerningbuffer zone management.

^24 AGROLESPROJECT,together with the Instituteof Forestry of the BulgarianAcademy of Sciences,established a network of 15 monitoring stations in the main types of forests for researchpurposes. Ongoing research projects include nationwideassessment of forest conditionsand investigationof the factors and impact mechanismsresponsible for damages to forest ecosystems.

125 Park engineersget slightly differenttraining from forest engineers, in that the former take park-orientedcourses in recreation, landscape,vegetation, and architecture.

126 Thc planning process for protectedareas includes such steps as flora/faunainventories, threat identification,preparation of zoning and identificationof pollutioncontrol needs associatedwith infrastructure development.

127 For example, the staff of the Pirin National Park is not given an active role in preparing the plan. Planning is not undertakenbased on extensive field visits or in-depthknowledge of the park. As a result, the current managementplan for Pirin National Park appears overly focused on management for forest timber production rather than optimizingfor biological diversity. - 67

240. Options. There are two possible options for establishingthat agency. The first option is to establish this agency under the MOE. The MOE is strongly embraces this option and suggeststhat the existing department for Forests, ProtectedAreas, and Genetic Pools be expanded and enhanced to build upon the work already being undertaken. There are several advantages to this option including (i) the authorityfor designationof protected areas is by law the sole responsibilityof the MOE; (ii) this option alleviates the conflict between nature protectionfunctions and economic functions (MOE has no economic productionresponsibilities); (iii) MOE has already begun to develop a national conservationstrategy; (iv) MOE deals with all protected areas, not just protectedareas within the Forest Fund, (v) MOE has the legislativecapacity for control, prescriptions,and sanctionsin all areas of the environmentas well as all types of property (state,private, etc.). Creating an agency responsiblefor nature protectionand reporting to the MOE presents itself as a viable option conduciveto a consolidatednature protectionmanagement system.

241. The second oRtion would be to establishthis agency under the COF. However, the COF objects to the creation of such an agency. The COF has asserted that establishmentof an agency responsiblefor all protected areas is not necessary. The COF stronglybelieves that the current status of the protected areas system and the structurefor its management is sound. The COF emphasizes that the present management system does not need to be altered; however, if it is to occur, management for protected areas should remain within the structureof the COF. The COF feels that the existing department for ProtectedNatural Areas and Worksites is sufficientfor the managementof nature protection. The COF suggestedthat, if necessary,this department could be expanded. The COF expressed four reasons to leave the existing management system under the COF intact: (i) 90 percent of protected areas are located within the Forest Fund; (ii) the COF employs the most forestry engineers; (iii) the COF is the only body with the financialmeans to undertakenecessary activities in the protected areas; and (iv) the COF works in coordinationwith the MOE and the MOE serves in an importantchecks and balances function.

242. Summarv. It is recommendedthat the Governmentof Bulgaria considers consol'dationof all functionsof nature protectionin one national agency. Before the agency is established,the Council of Ministersor the Parliament will need to resolve issues concerningthe administrationof this service. Both the MOE and the COF have presentedreasons for having the administration under their organizations(see above). It is importantthat this issue receives considerationby the Governmentbefore the economic pressures to convert potentiallyvaluable nature protectionareas lead to further degradation.

243. Although it has a large network of protectedareas, Bulgaria has not developeda team of trainednature protectionand nature interpretation specialists. While Bulgaria is proud of the substantialprofessional training these personnel receive in forest curriculumprograms, there does not appear to be any specializedtraining for protectionof natural areas that are not managed as economic forests. TheXe is an urgent jneedto develop, possibly with foreign technicalassistance. a curriculumfor the training of nark managers. Also. technicalassistance and trainingcould be provided in the - 68

developmentof protectedarea managementRlans.1 28 These activitiesappear well-suitedfor support from foreignand domestic donor and non-government organizations,particularly in the areas of the country that are proposed to be designated as new national parks.

244. A Nature Protection Fund should also be established. Initial endowment of the new fund may come from tbe budget, however, the "nature tax", proposed in paragraph 182 above, should serve as a regular source of revenue in the future (togetherwith direct user charges to be introducedover the long run). The Ftnd would finance all activitiesrelated to the planning and management of protected areas. Its resources should be used also to inform and educate the public about the natural values of existing reserves and the benefits to be derived by strengtheningand expandingthe existing reserve system.129

245. The National Council on Water has 12 members, representingthe main water user sectors in the economy. The Council does not have regionalbranch offices. In principle,all water users (with the exceptionof private households)should obtain a permit from the Council. Some permits are valid only for a certain period of time, while others have no expirationdate. The Council is most active in the allocationof water from 22 multipurposedams. Based on requests from various governmentagencies, the Council prepares monthly water allocationplans. The order of prioritiesfollowed by the Council is drinkingwater needs, animal feedlots,industries, irrigation, and lastly, electricitygeneration. Monthly water allocationplans are implementedby the Committeeon Energy, which operates the dams. In recent years, a number of cities and populationcenters have experienceddrinking water supply shortages (intermittentsupply limited to only a few hours per day for severalmonths at a time). The shortagesare the result of severely limitedwater resources in those areas due to either natural availabilityor man-made pollution. There is a need for improvedcooperation between the National Water Council, the Committeeof Energy and the Ministries of Environmentand Agriculture.

246. Sub-nationallevel agencies. In September 1991, the Parliamentpassed the "Law on the Role of Local Self-Governmentand Local Administration". The law establishesthe obshtina as the basic unit of local government. It has an elected council, an elected executivemayor and administrativestaff. Its functionsare similar to municipal functionsin Western countries; it has the power to collect local taxes (but it is not clear how importantthese are), receive subsidiesand interest-freeloans from the governmentand to issue

128 Ideally,management plans should address issues such as broad based biological species conservation,wildlife habitat management,provision of naturalistsservices in order to increasepublic awareness,and identification and developmentof buffer zones.

129 For example, even though the Rila nature preserve is well-markedby roadside signs, the Committeeof Forests has no funds availablefor brochures describingthe reserve. If such brochureswere available,perhaps the preserve would be more greatly appreciatedby visitors to the adjoiningRila Monastery (the largestmonastery on the Balkan Peninsula,which received an estimated 240,000visitors in a recent year). - 69 -

bonds. The next level, the okoliJa,130 coordinatesplanning and implementationof municipalprojects which extend beyond one obshtina (e.g., public transport,water supply, electricity,gas) and liaiseswith central governmentagencies via the oblast governor. The okolija council consists of obshtina representatives. The oblast (region)is purely an administrative unit, without any elected bodies. The oblast governor is appointed for a four year term by the Council of Ministersand is assisted by a regional administration. The oblast governor'sprincipal role is to coordinate governmientservices within the region and has the right to control the activitiesof all state bodies at the regional level. Sofia has the status of a special region,with an elected mayor insteadof a governor.

247. Because the district administrationlevel (28 districts)- between the regional (8 oblasts plus Sofia) and the local government (274 obshtinas) level - has recentlybeen abolished,there is no level in the current structureof governance to which the health and environmentalinspectorates could relate. Only a fraction of the inspectoratesare relativelywell equipped (this applies to both the health and the environmentnetworks). Therefore the Ministries of Environmentand Health should develop and. after a transition 2eriOd, implementa separate but coordinated-structure-for-theregional environMen_tand sanitary-inspectoratesconsistent with-the-structure of governanc_e As a first step, lead Hygiene and EpidemiologyCenters and EnvironmentInspectorates should be appointedin each region.

248. Regional level agencies. The achievementof fully satisfactory environmentalconditions will require a considerableperiod of time, during which large variations in local conditionswill exist. It is important, therefore,that regional authoritt3sbe given discretion to establish their own approach in the implementationof (increasinglystringent) national ambient standardsand in the allocationof funds to finance the expenditures needed to meet tho3e standards. This has several implications.

249. First, a formal coordinationmechanism should be establishedat the regional level for the developmentof regional environmentalstrategies. Therefore,Regional EnvironmentalCouncils should be formed from representativesof central. regionaland local level governmentagencies. major Industrialenterprises and non-governmentalorganizations (NGOs). The Councils would provide advice on environmentalissues of regional significance.

250. Second, centralisationof controlat the national level over the day-today implementationof environmentalpolicy would be undesirable. The regions should become the focal point of pollutioncontrol activities in Bulgaria. Regional inspectoratesshould play a more active role in regulatingmost large-scaleenterprises (some very large ones might be left to the center). This would include negotiatingappropriate permit levels and compliance scheduleswith individualenterprises while following guidelinesand ambient standardsset at the national level. In the case of a proposed new facility with potential for environmentaldamage, the regional inspectoratewould manage the environmentalimpact. assessment process (inc.udingpublic participation),approve the mitigationplan and carry out the pre-construction

130 The Bulgarianword is a pre-war term and is differentfrom the term for the recently abolisheddistricts (okrane),reflectlng the different concept now envisaged. - 70 -

design review, which would provide the basis for the plant's emission permits. Emission monitoringwould be steppedup and would be based mostly on direct measurementsof stack or wastewateremissions made by the enterprises themselves,subject to periodic checks by the inspectorates. The inspectorateswould be responsiblefor the collectionof pollution charges. Thereforethe role of the regional environmentinspectorates should be enhanced to include the preparationof regional environmentalaction plans. nzo&tiationand issue of pollutionpermits. review of environmentalimpact assessments.environmental monitoring. detection and fininzgof violations,and coordinationwith other regional and local level governmentagencies.

251. Third, a certain share of the revenues from pollution charges and fines should be given to the regions in line with their increasedresponsibilities. Therefore,Regional EnvironmentalProtection Funds should be establishedto provide the budget for monitoringand inspectionactivities and to finance environmentalimprovement projects. The Regional EnvironmentalCouncils could become the governingbodies of these funds.

252. Local governmentagencies. Each obshtinahas at least one staff specializedin environmentalprotection and about 50 obshtinashave a small department. They carry out "inspections"and issue citations for small offences. Serious offences are referred to the regional environmental inspectorates. The local governments are very active in the area of municipal services. There are about 30 water supply and sewerage enterprisein Bulgaria owned by the local governments. Similar enterprisesexist for the management of solid waste services. 13 1

253. In the past, local governments have had little or no leverage over industrial or other large-scale sources of pollutionwithin their boundaries. As administrative decentralization continues and local elections produce elected rather than appointedmayors, the ability of local governmentsto exercise politicalpressure on visible large polluters undoubtedlywill increase. Nevertheless,there is a need for formal processesby which local governmentsor the public which they representcan address issues of local environmentaland health impacts.

254, The new Law on Local Administrationis fairly clear that environmental services of a localizedcharacter - such as water, sewerage and solid waste services,street cleaning and "hygiene"- are the responsibilityof the obshtinas,or, in the case of systemswhich extend beyond one obshtina (which is frequentlythe case in Bulgaria),the okolija or a special-purpose associationof obshtinas. The governmentshould consider giving local g2ver,nmentvthe power t-ozregulate small-scale pollution sources (i.e.. iss_ue pjermits.monitor complianceand issue citations:review and approve environmentalassessments for new pro_ects). This could include apartment buildings using solid fuels, offices, shops, workshops,transport terminals, motor vehicles, constructionsites, quarries,clinics, small-scale agriculturalprocessing, and other small-scaleindustries. Regulatorypowers

131 In many countries,some or all of these local services are provided by private enterprises. Options can range from contractingfor solid waste collectionto private-publicjoint ventures to invest in and operate new water supply or wastewatertreatment plants. Where they desire to consider possible private sector approaches,local governmentswill require technicalassistance in, for example, possible forms of joint ventures,competitive bidding proceduresfor service contracts,etc. - 71 -

with respect to all other pollutionsources would remain with the regional environmentalinspectorates.132

255. On that basis, environmentaldepartments of local governmentswould perform the following functions:

- coordinationof the activitiesof other local government agencies to ensure tne protectionof the environment; - regulationof small-scalepollution sources; - administrationand enforcementof land-use controls,approval of building applications; - design and implementationof local environmentalimprovement projects; - participationin environmentalprojects affectingmore than one local goverment; - representationof the local governmentin regional multi- disciplinarybodies dealing with the coastal zone or with the buffer zones of protectedareas.

G. Public Education/Participationand NGOs

256. Public education/participation.Efforts are underway to create a solid foundationfor formal environmentaleducation, and environmentalcurricula are being developed and implementedat all levels. A new education law is being prepared by the National Assembly that cites the need for all students to develop appropriateenvironmental attitudes and basic skills. The Ministry of Education,which has responsibilityfor primary and secondaryschools, has developed a series of textbooksthat not only address ecology as a distinct discipline,but also highlight the environmentalaspects of chemistry, physics, art and literature. A-number of "natureschools" have been establishedto extend environmentaleducation beyond the classroomby providinghands-on experiences,but they are limitedboth in terms of number and range of programs offered.

257. Sofia Universitytrains experts in more traditionalenvironmental disciplinesas well as new teacherswho are encouragedto incorporate environmentalsubjects into their work. In recent years, academic departments (faculties)have gone beyond basic ecologicalstudies and have begun to focus more specificallyon environmentalissues in a wide range of disciplines (includingregional planning and law). Post-graduateprofessional training is offered through the Center for Science and Education in Nature Protection,a quasi-independentcooperative endeavor between the Ministry of Environmentand Sofia Universitywhich receives financialsupport from the Ministry of Environment. In addition to tr. ning, the Center serves a coordinating function through its governingboard structure,which is composed of representativesfrom the Ministry of Environment,Sofia Universityand other universitiesand "socialorganizations".

258. The program offered in the Free Faculty of the TechnicalUniversity are innovativein that they attempt to integrateenvironmental awareness and knowledge into engineeringand other technicalstudies. However, participationin these programs is purely voluntary,and only about five to

132 Since the okolija as a territorialunit appears to have a fairly specific purpose, there does not seem to be a case for a separate allocation of regulatorypowers to the okolijas. - 72 -

ten percent of the studentbody take advantageof the "free faculty". In fact, the only mandatory course on integratedenvironmental management is offered in the fifth and final year of study, probably too late to have substantialeffect.

259. In contrast to formalizedenvironmental education, efforts to increase public awarenessof environmentalissues are limited and fragmented. A system of environmentalmanagement demands not only technicaland administrative competence,but an acceptanceby the people of the legitimacyof the process by which decisionsare reached. *TheMinistry of Environmentappears to be restricted in its outreachby the current organizationalstructure (there are only two people working in the public reiationsdepartment), limited funding and, perhaps most important,by the lack of real traditionof public involvementin environmentaldecisionmaking through regular disseminationof information. In spite of its explicit inclusionin the draft environmental legislation,the issue of increasedpublic participationin environmental policymakingis still a new and, understandably,somewhat foreign concept. The close connectionbetween disseminationof informationto the public and both formal and informal environmentaleducation efforts is only beginning to be reco2nized. Targeted efforts. perhaps after the gassage of environmental legislation.would be useful and cooperationin this area with bilateraland multilateralagencies needs to be further explored.

260. In spite of the general lack of accessibleenvironmental information, environmentalismis a popular cause in Bulgaria and much of the public appears willing to make sacrificesfor a cleaner environment. In a recently conducted poll,133 66 percent of interviewedadults stated that they would agree to have money withheld from their salary if the money was used to prevent environmentalpollution. Sixty three percent agreed with the statementthat "the environmenthas to be cleaned up even if it means some loss in manufacturingjobs". Public sunnort is probably the most significantfactor t-hatcould make the government'senvironmental strategy successful.

261. Non-governmentorganizations (NGOs). NGOs have a major role to play in influencingBulgaria's evolving environmentalpolicies. The best known and most influentialof the environmentalNGOs is Ecoglasnost. Ecoglasnosthas 70 chapters. Its leaders estimate they have 15 to 17 thousand active members and -approximately500 thousand supporters. Other NGOs in Bulgaria are important as well, since they reach out to different constituencies,advancing the cause of nature conservationin Bulgaria. These include The Wilderness Fund, The BulgarianSociety for Conservationof the Rhodope Mountains, and The Bulgarian Society for the Protectionof Birds.134

262. Educationalefforts on the part of NGOs did not appear to be well coordinated. Informationexchange and even basic communicationbetween NGOs and the Ministry of Environment(as well as among the NGOs themselves),is sporadic and disjointed. In recognitionof the crucial role that NGOs can and

133 In May 1991, face-to-faceinterviews were carried out with a representative,nationwidesample of 1626 residentsof Bulgaria aged 18 and older. The survey was conductedby the Center for the Study of Democracy (an institutein Sofia) and financedby the United States InformationAgency. Source: "Paying the Price of CleaningUp Bulgaria:The Public Viewpoint", Research Memorandum,Office of Research,USIA, July 5, 1991.

134 Details on NGOs can be found in Annex 14. - 73 -

should play in carrying out educationprograms and in influencing environmentalpolicy, better communicationand coordinationbetween the Minjstry of Environmentand the NGO communityas well as among NGOs is essential.particularly in view of the limited resourcesavailable for such egffrts. In addition,environmental education program design and implementationshould be coordinatedwith relevant "outside"efforts, such as the programs focusing on environmentalactivism and public outreach sponsored by the U.S. InformationAgency and the U.S. Peace Corps.

263. Ecoglasnostis interestedin identifyingone town, whose environmental problems are somewhatmanageable, where a cooperative,community-wide problem solving program could be developed. This programwould be a model to improve governmentand public sector dialogue with a focus on conflict resolutionand public awarenesscampaigns. The program would be based on an integrated approach,developing an interdisciplinaryteam of experts to form a combined air/water/soilapproach to environmentalmanagement. This program would include training in public educationand communityinvolvement to promote an interactiverelationship between the communityand regional and national levels of government. The proposal deserves serious considerationand full support by the governmentand foreign donor agencies.

H. Investmentsand TechnicalAssistance

264. Investmentsin environmentalprotection in Bulgaria are financed from central and local governmentbudgets, from fines paid by enterprisesto the Ministry of Environmentand from enterpriserevenues. About 75 percent of financingover the 1986-90period came from enterprises,20 percent from governmentbudgets, five percent from fines (See Table 10 below). Investments in environmentalprotection represented3.3 to 5.8 percent of total investmentsin the material sectors of the economy,while total environmental protectionexpenditures were 1.2 to 1.8 percent of national income.135 Although at the beginningof the period these percentageswere not substantiallylower than in OECD countries,their trend have been decreasing ever since. The focus of expenditureshas been primarilyon mitigatingwater and soil pollution,resulting in about 60 percent of total capital investments,while expendituresfor air pollutionabatement were relatively small (ranging from seven to 18 percent in the 1986-90 period).136

Table 10: Investmentsfor EnvironmentalProtection in Bulgaria'37

1986 1987 1988 1989 1990

Total Capital Investment 382 405 265 320 274 (in million of leva)

Percentage (%) Provided by: State and Local Budgets 12 12 20 24 27 Funds of Firms and Enterprises 83 77 73 70 69 Funds Raised from Fines 5 11 7 6 4

13s See Table 33 in Annex 1.

136 See Table 34 Annex 1

37 Source:Ministry of Environment. - 74 -

265. For 1991, the Ministry of Environmentplanned 313 million Leva in capital expendituresand 50 million Leva in recurrentexpenditures. While in nominal terms the actuals will probably exceed the plan, it is almost certain that environmentalprotection expenditureswill be substantiallylower in real terms in 1991 than in 1990.138 About one third of planned capital expendituresare related to air quality, 43 percent to water and 13 percent to soil. About 300 million Leva out of the total 363 million Leva expenditures is planned to be implementedby enterprisesand municipalitiesusing internallygenerated cash or bank credit.

266. The decreasingtrend in environmentalprotection investmencsneeds to be arrested. The "Program for Urgent Measures to Improve Environmental Conditions"prepared in 1990 (see paragraph6 in Chapter I) was an attempt to accomplish that. Most of the measures in the program were scheduledfor 1991 and 1992. Planned investmentswere estimatedto cost 2.65 billion Leva plus 470 million US dollars.139 The antlcipatedaverage level of investmentsin the 1991-95 period would have been 728 million Leva per year (at the official 1990 exchange rate), which representsan increase in the share of environmentalinvestments from 0.9 percent of GDP in 1990 to 2.1 percent in 1991-95 (based on recent GDP projections).

267. The program stipulatedthat the Ministry of Finance and the National Bank would provide subsidizedcredit to areas with severe ecologicalproblems. Effectivenessof projects and their "environmentalfriendliness" were the criteria to be applied when granting credits. The debt service capabilityof state and municipal enterpriseswas not analysedand the source of subsidized credits was not determined,either. In summary, the program did not have a financingplan.

268. In principle, investmentprograms should be based on rigorous cost- benefit analysis. While techniquesfor the estimationof benefits (in monetary terms) of environmentalprotection activities exist, their applicationis time consumingand requires special expertisewhich is scarce in Bulgaria. The investmentprogram for environmentalprotection should be based. therefore,on_the prioritizationof environmentalproblems and on the apRlicationof cost-effectivenessanalysis in order to ensure that high priority environmentalimprovements are achieved at the lowest possible cost. It appears that the "Program for Urgent Measures..."was based neither on an explicit list of prioritiesnor on the results of cost-effectivenessanalysis.

269. Reductionof seriouspublic health hazards should receive the highest griority.Health status informationreviewed in Chapter 3 of this report suggests that the most serioushealth hazards are associatedwith hot spot areas, especiallydue to exposures to toxic substances. The next highest priority should be accorded to those environmentalimprovements that, while decreasing less serious health risks, also result in a measurabledecrease in costs to the economy caused by pollution. There is a loss of productivityand working time associatedwith the damage to human health caused by high ambient concentrationsof suspendedparticulates and SO2 in severalBulgarian cities.

138 The expected level of inflation is about 400 percent in 1991.

"39 Of the total investments,about 50 percent is planned in the energy sector for rehabilitationof thermal power plants to improve fuel use efficiencyand install technologiesfor reducingand controll pollutant emissions. - 75 -

High levels of water pollution result in higher capital and recurrentcosts for water supply infrastructure. Water pollutionon the Black Sea coast endangers revenues from the tourist and fishing industries. The third priority should be assigned to the conservationof living natural resources, especially to the prevention of irreversiblechanges. However, it is imiportantto recognize that most of the measures that address environmental problems with impact on human health and the economy will also protect the country's flora and fauna.

270. Hot spots. Technical solutionsare availablefor the environmental problems caused by metallurgicaland chemical factoriesin hot spot areas. However, substantialinvestments are required in pollution abatement technologyand most of the enterprisesdo not have the funds to finance these investments. The enterprisesare in the process of adjustingtheir activities to the requirementsof an open market economy and many of them are not making any prafit. The danger of using support from the governmentto invest in pollution abatement in a technologicalline which will have to be closed down (because it is not economic) in the near future is apparent. Also, as argued above, inrestmentshave to be cost-effective,i.e., there should not be any other option which can achieve the pollutionreduction goals at a lower cost. Therefore, two basic conditionsshould be met before providinz government support to an enterDrisein a hot sRot area: (i) the enterpriseshould have a restructuring/privatization plan approvedby the Ministries of Industry and Finance. and (ii. the enterpriseshould have an environmentalprotection action Rlan based on a completedenvironmental audit approved by the Ministry of Environment. However, the situationin the hot spots is very serious; the Ministry of Industry should thereforegive priority to the enterprisesin these areas when deciding on the schedule for the restructuringprocess.

271. Governmentsupport should be provided in the form of financinga certain portion of necessary investmentson a grant basis. Grants are transparent, one time obligationswhich are easier to administer than subsidized investment credits. A conditionof a minimum (non-zero)level of non-grant financing (internallygenerated funds or bank loans) should be met by each enterprise which receives support. The newly establishedregional environmental protection funds, after pollutioncharges are introduced,will be able to provide part (or all) of the resourcesrequired.

272. Air Rollution. The high concentrationof particulatesin the air of practicallyall large Bulgariancities is due to three types of sources: (i) point source emissions from high stacks of power plants and large industrial factories; (ii) emissionsfrom householdsand small industrialboilers using coal as the primary fuel; (iii) dust accumulatingon the ground due to inadequatestreet sweeping.

273. The solution for the first types of sources is the installationand/or yroger maintenanceof electrostaticpreciRitators (ESPs) to remove Rarticulates. Most large boilers in Bulgaria have ESPs, although maintenance is frequentlyinadequate and some ESPs are obsolete and not able to achieve an acceptable level of efficiency (99 percent). Spare parts need to be ordered and obsolete equipmentneeds urgent replacement. Fabric filtrationequipment (dustbags)may be a feasible low-cost method of particulateemission control for small and medium size industrialoperations. Enterprisesthat do not implementthese measures should be fined heavily. Cost implicationsof these measures appear modest and could be financedby the enterprisesthemselves (with a few exceptions). - 76 -

274. High levels of dust in many of the city centers are reintrainedby the vehicle traffic. Efforts should be made to sweep the streets more frequently along some of the major urban corridors. Provisionof better street sweeping does not require substantialinvestments. The solution has to be found at the level of municipal governmentsby ensuring that there are funds available to finance the recurrentcogt of these services. Street sweeping is an activity which is particularlywell suited to be contractedout to the emerging private sector.

275. The problem posed by the second type of sourceswill take longer to solve. Small boilers do not have particulatecontrol equipment. The widespread use of coal in Bulgarianhouseholds is partly due to the government'senergy policy which restrictedthe use of natural gas to industry (primarilyas feedstockfor chemical factories). This policy did not take into account the significantpollution problem caused by the use of coal in urban areas and needs to be reversed. While the trunk line for the distributionof natural gas covers the country quite well and passes in the vicinity of several large cities, secondaryand tertiary gas distribution lines still need to be constructed. The expansionof the gas distribution network to serve households,small industrialestablishments and district heating plants deserves a high priority. In additibn,the option of convertingsome of the brown coal fired power plants to natural gas should be carefully examined. It appears that, due to recent major increases in the price of natural gas, Bulgargaz (the national gas distributioncompany) has enough resourcesto finance the expansionof the distributionnetwork and there is surplus gas available to meet the demand of new consumers.140

276. Although less widespreadthan the problem of suspendedparticulates, high concentrationsof -02 in the air is a serious problem in many Bulgarian cities. The problem is caused by emissionsfrom (i) heavy industrial factories;(ii) thermalpower plants; and (iii)home heating with coal and briquette. Emissions from the third type of sources, over the medium to long term, will be significantlyreduced if the gas program is carried out. Meanwhile,in the worst effected areas of the country (e.g.,Dimitrovgrad, Srednogorie.Devnya). the distributionof coal and briguette with high sulphur content should be stopped and importedcoals with low sulphur content should be provided for sales to households.14 1

277. The effects of industrialrestructuring (i.e., decreased share of heavy industry)and less home heating based on domesticbriquette will probably not be sufficientto eliminate the high levels of SO2 concentrationsin the air of some Bulgariancities. This impliesthat either the fuels used to generate electricityand heat need to be changed or S02 emissionsneed to be

140 The use of natural gas outside the power sector decreasedby 15 percent between 1988 and 1990, largelydue to the contractionof the economy. According to informationobtained from Bulgargaz,the decline in gas demand has further acceleratedsince the beginningof 1991. The supply of gas from the USSR, based on long term contracts,has been reliable.

"41 Although the impact of this measure may be negative from a balance of payments point of view, it is worth noting that imported coal costs less than domesticallyproduced briquette (on a calorificequivalent basis). The very high cost of the briquette - about 900 leva/ton ex factory (US$50/ton equivalent)- implies that mixing limestonewith the briquette to reduce S02 emissions,while may be technicallyfeasible, is not economic. - 77 -

controlled. Fuel substitutionpossibilities are limited. Natural gas could replace some (high sulphur) fuel oil in the short-runand coal in the medium term, but, as argued above, households and small industrialboilers should be given first priority in the allocationof surplus natural gas. In view of the major safety problems of the Kozloduy nuclear plant, there is no substitute for the base-load ligniteplants, at least not in the medium term. Furthermore,based on a rough estimate of costs, continuedoperation of the Maritza East lignite mining and power generationcomplex appears economic.142

278. SO2 control measures, therefore,seem to be inevitable. However, the question where and how SO2 emissionsshould be controlleddeserves serious consideration,since SO2 control is very expensive. The area most affectedby the Haritza East complex is not the worst area of the country in terms of measured SO2 concentrations. Several cities, e.g., Pernik, Srednogorie, Asenovgrad, Plovdiv, are reported to be in a more serious situation,therefore first priority should be given to these areas. Within the context of air Management plans to be develonedby the affected regional governments.cost- effective investmentsin SO, control should be determined. In other words, only those investmentsshould be selected,which promise the highest "ambient S02 concentrationreduction per unit of investmentcost" ratio. Many of these investmentscan be expected to be in heavy industry,in those enterprises which need restructuring,or in smaller power/heatplants. Over the long-run, investmentsin SO2 control equipmentto be installedin the major coal and lignite fired power plants could also be considered (with the purpose of, for example, decreasingacid rain and transboundarypollution). 143 However, in view of the current economic situationin Bulgaria,provided that ambient air quality in the regions affectedby the plants is acceptable,these high cost investmentsare not of immediatepriority.

279. Water gollution. First priority should be given to decreasing industrialpollution, especially the level of toxic pollutants in rivers and groundwaters. The problem of high toxicity effluents (heavy metals and certain chemicals)has to be solved within the context of the industrial restructuringand environmentalaudit process (see para. 269 above). Second priority should be given to (i) the completionof collectors in those cities which already have sewage treatmentplants operatingbelow design capacity (e.g., Sofia, Plovdiv); (ii) the completionof treatmentplants which are in an advanced stage of construction(three of these - Kavarna, Obsor/Bialoand Pomorie - are on the Black Sea coast); and (iii) the rehabilitationand

142 The lignire produced at Maritza East is by far the lowest cost coal in Bulgaria and is the only economiccoal reserve in the long run. Currently the cost of lignite is about 120 leva/ton (US$6.7/tonequivalent), or, at a heating value of 2,500 kcal/kg,US$4.6/Gcal. The cost of ihternationally traded coal deliveredat Maritza East would be about US$10.5/Gcal.

1A3 Under the Helsinki Protocol,SO 2 emissionsin Bulgaria in 1993 should not exceed 70 percent of the emissionsin 1980 (SOZ emissionswere 1.2 million tons in 1980, 1.7 million tons in 1989 and about 1.6 million tons in 1990). Assuming that some substitutionof coal with natural gas will take place and the level of economic activity in 1993 will be similar to 1990, achievementof the target requires measures which reduce SO2 emissionsby 0.6-0.7 million tons. In turn, that implies investmentswith a cost of US$500 million. - 78 -

upgrading of existing municipal treatmentplants 144 and the treatmentplants in feedlots. Third priority should be assigned to the constructionof treatmentplants in those cities, which havo a functioningwastewater collection system (in five cities - Dimitrovgrad,Kostenetz, Pazardjik, Samokov and Shumen - constructionhave already began, but it had to beistopped in the initial stage due to lack of funds). The long term goal should be for all cities to construct their own sewage treatmentplants, but for smaller towns considerationshould be given to simpler and lower cost alternativesto activated sludge technology,such as tricklingfilters and lagoons.

280. Non-point source pollutionshould be addressedwith ecologicallysound policies and practiceswhich limit pollutionmigration in the ground and enhance natural self-purificationprocesses. These include the construction of low cost weirs and artificialwetlands and plant covers along watercourses and reservoirs. For example, meadows and shelterbeltsof trees can minimize chemical run-off from agricultureby formingbiological barriers. Generally, reliance on engineeringsolutions needs to be augmentedwith approachesthat rely on ecologicalunderstanding of water ecosystems.

281. Dealing with the residuesof past effluents is a long term problem which has faced many industrialcountries. While it is possible to dredge rivers which have experiencedheavy metal discharges,the disturbanceoften worsens rather than improves the situation. There is no quick or simple solution,so the mairnpriorities are to ensure that no further damage is done and to learn from the experienceof other countriesin this field.

282. Significantimprovement in water pollutioncontrol, however, will depend on the availabilityof large amounts of funding. Primary funding should come from bank loans, but that will not materializeunless borrowersare creditworthyand generate enough revenue to servicedebt. That requires, in turn, that (i) the restructuringprocess leads to solvent,profitable companies; (ii) there is adequate local tax base provided to the municipalities;and (iii) the municipalwater and sewerageenterprises set user charges at a level which includes the cost of capital. Supplementary funding to finance cost-effectivepollution control investmentsmay come from the regional environmentalprotection funds, however, municiRalitiesshould not be eli_ible for grants unles1sthey move towards charging fees which are based on the-economiccost of municiRalservices (eligibilityof industrial enterprisesis discussedabove).

283. Hazardous and solid waste. A study to identifyhazardous waste sites throughoutBulgaria should be carried out urgently. This should be the first step in determiningthe full nature and extent of contaminationfrom past disposal practices. The Ministry of Environmentplans to accomplishthe inventoryby means of reviewingpermits and records,supplemented by any other informationthat may bear on past waste disposalproblems. Because of the extensive co-disposalof municipaland hazardouswastes, old municipal landfillsshould be included as part of this inventory. After a full inventory exists. risk-basedscreening and site ranking techniguesshould be used to set priorities and evaluate the need for remedialaction. Site remediationcan be extremelyexpensive. Measures are needed to prevenit exposure and contain further spread of contaminationfor those sites where there are demonstratedhealth and environmentalproblems. The costs of these

144 The unit investmentcost per BOD removed is probably lower that way than with the constructionof new treatmentplants. ;80-

under debt_for nature swap oDerationsor under the Global EnvironmentFacility should be ex]lored."47

288. Donor assistance. Severalhigh priority investmentslisted above could be eligible for support from bilateraldonors and World Bank, European Bank for Reconstructionand Developmentand European InvestmentBank lending operations. The internal and external resource constraintsfacing Bulgaria are very severe. Internally,achievement of the objectivesof the macroeconomicstabilization program requires the applicationof a tight incomes policy, restrictivemonetary policy and budget austerity. Externally, Bulgaria has no access to foreign (private)commercial lending due to the moratorium on foreign debt payments. Foreign exchange reserves are virtually depleted.148 Financialassistance from external donors is crucial to ease these constraints.

289. In addition to the support of investmentprojects, technicalassistance is needed and could be provided by severalbilateral agencies,the European Community and multilateralbanks in the followingareas:

(i) environmentalaudits (paragraph112 and Annex 8); (ii) drafting of the revised environmentallaw (paragraph 123); (iii) developmentof a nature conservationstrategy and draf,tingof a revised nature conservationlaw (paragraph126 and Annex 9); (iv) preparationand implementationof the Conventionon the Protection of the Black Sea (paragraph133 and Annex 5); (v) risk assessmentand economicanalysis techniques (paragraph135 and Annex 10); (vi) ambient air and water quality modeling (paragraph144 and 151); (vii) developmentof an air pollution alert and warning system (paragraphs148, 197 and Annex 11); (viii) setting of pollution charges, establishmentand operationof environmentalprotection funds, particularlyproject selectionand fund disbursement proce.ires (paragraph174); (ix) deve'apmentof a coastal zone managementprogram (paragraphs188- 190); (x) air and water qualitymonitoring techniques (paragraphs198-205 and Annex 13); (xi) hazardouswaste analysis,reporting and data management systems (paragraph211); (xii) establishmentof a single, integratedsystem of food control (paragraph214); (xiii) developmentof a comprehensiveenvironmental data management system (paragraph216);

147 Setting up a Nature ProtectionAgency and establishmentof a Nature ProtectionFund will meet some of the requirementsfor the implementationof such operations.

148 At the end of 1990, Bulgaria'sconvertible currency debt was about US$10.3 billion, mostly short term and equivalentto about 52% ,fGDP or 321% of convertiblecurrency exports, while foreign currency reserves were under US$200 million. - 79 -

measures should be borne by the governmentand financed from the Central EnvironmentalProtection Fund (as argued in SectionA above, restructured/ privatizedenterprises should not inherit liabilityfor past environmental damages). Then, the remainingsites could be prioritizedbased on a hazard ranking system, analogousto the U.S. system used for Superfu"d.This ranking need not be based on detailed risk assessments.

284. Informationon the potentialrisks from currentlygenerated wastes is also lacking. The Ministry of Environmentis attemptingto address this problom through comprehensi^ieregional waste surveys. The initial survey - for the Sofia region - is nearing completion,and will be used as a model for future regional surveys and the basis for a waste strategy.

285. While large enterprisesare expected to dispose of their hazardouswaste themselves,small waste generatorsshould be required by law to dispose of wastes at central facilities. One or more regional hazardouswaste disposal facilitiesare likely to be required. However, more specific informationon the nature of wastes that might be brought to such facilitiesis needed lherefore.a feasibilitystudy should be done in coniunctionwith the Sofia waste survey described above.145 Also, it would be desirable to conduct some limited waste sampling to understandbetter the nature and concentrations of constituentsin the waste streams. Since current regulationsgoverning hazardouswaste disposal and their entorcementare quite weak, profit oriented constructionand operationof waste disposal facilitiescannot be expected. However, the facilitiesshould set a disposal charge which at least covers operationand maintenancecosts (high charges create incentivesfor illegal dumping). With improved enforcementpractices, the charge could be increased to cover capital costs, as well.

286. During the 1980s, the amount of municipalwaste generatedannually increasedby almost 100 percent (from 1.57 million tons in 1980 to 2.85 million tons in 1989).146A problem facing several local jurisdictionsis the inabilityto site new landfills,due to lack of availableland. Municipalitiesrequested the central governmentto provide funds for the constructionof incinerators. However, landfill disposal of solid waste is a less costly method and should not be discardedeasily. Before solid waste inclineratorsare constructed,the possibilityof mitigating the space problem by invrestingin additionalcompacting eguipment should be explored.

287. Nature protection. In view of the current extreme scarcity of financial resources in Bulgaria,major conservationoriented investmentsare not justified in the near future. However, the cost of measures which could prevent the deteriorationof protectedareas and preserve biodiversityis quite modest and the Rossibilityto find external sunnort for these measures

145 One technicaloption which may worth exploring is the incineration of organic hazardouswastes in cement kilns. The purchase of especially designed incinerationfurnaces for hazardouswaste is may be beyond the economicmeans of Bulgaria. Organic waste containingPCB's, dioxins, furans and other hazardous/toxicmaterials have been effectivelyand environmentally safely destroyed in cement kilns in the U.S. and other countries,without negative effects on cement product quality.

146 Source: "Green Book", Ministry of Environment,1991. - 81 -

(xiv) establishmentof a Nature ProtectionAgency (paragraph 239); (xv) developmentof a curriculumfor the training of park managers (paragraph243); (xvi) developmentof protectedarea managementplans (paragraph243); (xvii) environmentalmanagement at the local government (obshtina)level (paragraph255); (xviii) design and implementationof public educationprograms (paragraph259); (xix) communitybased environmentalmanagement programs (paragraph263); (xx) design and operationof wastewater treatment facilities (paragraph279); (xxi) hazardouswaste treatmenttechnologies and remediation techniques (paragraphs283 and 285); (xxii) domestic and industrialwaste treatmenttechnologies (paragraph286).

290. While further donor coordinationefforts are necessary to find funds for the financing of all the items above, several donors have already indicated their willingnessto provide support for certain areas:

° the EC PHARE program, as mentioned in Section E above, is currentlyin the process of providing training in environmental monitoringand data managementtechniques (items no. (x) and (xiii) above). FAO plans a technicalcooperation program in the area of food control (item no. (xii) above);

- the Jnited States Governmeiathas approved funds for a series of workshops (to be organizedby US EPA) which will provide Bulgarian environmer.talofficials and others with training in a range of tools and policy developmentprocesses. The purpose is to enhance their abilitiesto efficientlyallocate scarce resourcesand address environmentalproblems. The tools will include risk assessment techniquesto establishpriorities, and economic analysis to determinethe impact of environmentalregulations and to examine the environmentaland economic trade-offsamong alternativeenvironmental strategies (item no. (v) above). The workshops will strenghteninstitutional capability in environmentalpolicy analysis and policy formulation;

- similarlyto the already completedprogram of energy audits, US A.I.D. will assist the Ministry of Industry in the area of environmentalaudits in industrialenterprises (item (i) above). The environmentalaudits will be carried out by specialistsfrom the World EnvironmentalCenter and are scheduled to begin in September 1991. US A.I.D. will also support the developmentof a nature conservationstrategy, the strengtheningof environmental managementcapacity at the local governmentlevel and Ecoglasnost'scommunity based environmentalmanagement initiative (items no. (iii), (xvii)and (xix) above).

- the Global EnvironmentFacility and several other donors will provide supportfor a long-termprogram to improvewater quality in the Danube river. This internationalprogram will include the collectionof pollutiondata, creation of a regional data network, preparationof water quality criteria, identificationof policy v 82 -

and legal requirements,site selectionfor purificationstations, feasibilitystudies and institutionalstrengthening.

V. Action_Plan

291. The action plan below summarizesthe most importantmeasures needed for the implementationof the proposed environmentstrategy. For each action, the plan indicatesthe responsibleagency, whether there is a need for technical assistance and the year of completion,and is pres3nted in a tabular format. Page 1 BULGARIA

ENVIR01MENTSTRATEGY

PLAN OF ACTION

No. Para. AREA/ISSUE A C T IO SIDN T _ -- ef. 92 93 94 95 96-2001 1. UC POcKCIRESTRUCTURIM

1.1 108 Subsidized electricity and heat prices and controlled Complete the energy price reform C.of M x * * * * - coal and petroleum prices _ _ _ _ _ - 1.2 112 Low environmental efficiency of industry Conduct environmental audits as part of MDI x * the industrial restructuring process MOE 1.3 115 Liability for past environmental damages is obstacle to Environmental law to spell out principle that MOE * private and foreign investment state will take over liability for past MDF environmental damages from newly privatizcd companies 2. EV ISLEGISL*flO

2.1 120-124 Outdated, fragmented environmental laws and missing Amend the Basic Env. Law and prepare/revise MDE z * * regulations. Laws need to be based on a strateSX. the media-specific environmental legislation 2.2 126 Lack of Nature Conservation Strategy Develop a Nature Conservation Strategy MDE x * OD I ______COF 2.3 127-131 Current implementing regulation for Environmental Impact Prepare new regulations for ElAs MDE x * Assessments (EIAs) is too complex ___ 2.4 133 Lack of international cooperation and coordination Sign and implement the proposed Convention C.of M * * * * C mechanism for the orotection of the Black Sea on the Protection of the Black Sea MOE 3. STAUDADSAND REGMhla(S

3.1 136-138 Air ambient quality standards are too strict and too Reduce number of standards, set realistic MOE x * * * * * large in number annual standards and establish a schedule to M0H I _hieveac___ EC ambient standards 3.2 140 Lack of acid deposition and other precipitation standards Establish deposition standards for informati- MOE * * * onal purposes and international negotiations IMH 3.3 142-145 Air emission standards do not reflect regional Develop regional air management strategies, MOE x * * variations and do not ensure acceptable air quality set location specific emission limits on the basis of the requirement that ambient air qTualitv meets national standards 3.4 147 Vehicular traffic is a significant source of air Adopt a revised system of vehicle emission ME * * * * _ pollution that is not adequately controlled limits MOINT 3.5 148 La of pollution level standards and corresponding Develop set of standards with corresponding MOE * * me- res for protecting the public from high leveLs of measures MOE _air pollution 3.6 149 A few ambient wate_ quality standards are too strict Review ambient water quality standards and t OE x * adiust as necessary M _ Page 2 BULGARIA

ENVIROR4? STRATGY

PLAN OF ACTION

Tett -m -MLNATTI( No. EPara. A REA^/ IS SUfE A CT I O hSlIE TL _-_-_- Nore. 92 93 94 95 96-2001 3.7 150-151Effluent standards are difficultto enforce Establish througha processof negotiations MOE x * * * * individualpermits with interimemissions M)RBC limits and complianceschedules for each discharger.including municipal enterprises _ _ _ _ _ 3.8 152 UncontrolLedwastewater discharges to sewage systems Draft sample sewer use ordinance ME * Adopt seweruse ordinances MERc _. _.._ _ __ v _ ..._ .._ _o.V______Inc.s__ 3.9 153 Incompletesoil qualitystandards Developcomplete set of 5oil quality MOE * * standards O 3.10 154 Uncontrolledhazardous waste disposal Issue regulationOn collection,transpor- MDE s * _ tation and disposalof hazardouswaste MOT ___ 3.11 155 Inadequate construction and operation of municipal Revise the regulation on the location, const- MOREC x* landfills ruction, and operation of the municipal land- MOE fills to meet current internatianal standard- 4. r o:zm 4.1 271-172Ineffective/non-existent regulatory programs Establisha system Gf pre-const.uctiondesign HOE * ..___.___.______..___.______.__reviewsand permits 4.2 172 Fines for pollutionand nature protectionviolations are Increasefines so that the fines are truly NOE x * * extremely low and have no deterrenteffect punitiveand reflect the seriousnesof the I violation 4.3 173-174 Inadequate revenues for environmental protection Set up interministerial expert group to ana- MOF x * * lyse pollution charges and propose procedures MOE for the operation of env. protection funds, MOI ______then adopt the system of pollution charges 4.4 179-180 No incentives for water conservation Increasepiped water tariffs,introduce raw loc.gv * water charges and groundwaterfees, increase C.of M irriSation water charges HOA . < m~~~~~~~~~~~~~_____. 4.5 182 Inadequate ~ ~~~~~~~~~~un. funds for protected area management Introduce "nature tax' on revenues from MCE * * facilities in or adLiacent to Protected areas MF 4.6 183 No charges for depletion of mineralresources Developand introducea system of royalties COG x o__r sconomic mineral resources HOF 4.7 185 Economicvalue of agricultureland is not taken into Developproperly functioning land markets C.of M _ , * * * accountwhen land is converted to other use and there is iDA a lack of incentivesfor land reclamation ______4.8 186 Revenuesdo not cover capital costs of municipalsolid Increasecharges for solidwaste collection loc.gv * waste management svstems services 4.9 188-190 Growing pollution of Black Sea coast. Increased local Develop a coastal zone management program for MOE x . * government autonomy but no cocmon standards or guidelines the Black sea coast =HC for land use administration to ensure the preservation of reg.gV _nmiaue coastal areas , lOc. _ Page 3 BULGARIA

EImg ROMiNTSTRA?WGY

PLAN OF ACTIOW

Text - -- RES NO. para. AREA/ISSUE ACTION Sims TA _ ReIibf. ______l 92 93 94 95 95-2001 5. _OWITRIAIM IhFA_ _OU_ 5.1 195 MOE, MH and lnst. of Meteorology (IMB) air quality After a period of transition, only ME will MDE * * * * monitoring activities overlap and are not coordinated carry out regvlar monitoring of air quallty Mi in relation to ambient air quality standards. DMH IMH will carry out monitoring related to transboundary and global problems. FDH will carry out measurements only in relation to .______specific health impact studies. 5.2 196 Outdated air quality monitoring methods, lack of modern Update air quality monitoring methods, M9E x * * * * air and water quality monitoring equipment purchase air ana water quality monitoring equ FXNa __I_ ipment.provide assurance program and training ______. 5.3 197 Lack of "real'time systems for protecting the public from Establish air pollution and radiation alert MDE * * * high levels of air pollution and radiation and warning systems 1 _ _ 5.4 205 MDE and ME water quality monitoring activities overlap With the exceptionof drinkingwater quality. OE _ * * MOE to overtake gradually all regular ambient MCH water aualitvmonitoring activities 5.5 211 No reporting and monitoring hazardous of waste Develop:(i)hazardous waste classification and M0E x * * * identificationsystem;(ii) capabilities for analyzingwaste;(iii) reporting system for hazardouswaste;(iv) data managementsystem for tracking information on generation, ______transport and disposal of hazardous waste 5.6 214 Food surveillance is fragmented, uncoordinated and Set up a single food control network with 1ME z * * * lacks eualitv control adequate cuality control arrangements 5.7 216 Reliable information in suitable form for decision making Establish comprehensive environmental data MDE x * * * * * at the regional and national level is lacking information system including capability to MOH collect and present information on a 1MB aeographic basis. 5.8 217 Environmental data generally not to available the public Design and implement program for information MOE x * * * * dissemination and Public education MOSE 6. INSTIT5_I_

6.1 224 Law enforcementactivities were inadequatein the past Strengthenlegal capabilities in MDE in czderMDE * due to influenceby politicaland economic interests to assist the law enforcementactivities of regionalenvirnment inspectorates - _ 6.2 225 - Capabilityto preparewaste managementprograms is Strengthenwaste managementcapability of MOE _ inadequate MOE. Establishcomprehensive responsibility for waste managementwithin the contextof a visible,high priority ______.______program. accordinglv.staffed _ _ _ _ _ - Page 4 BULGARIA

ENVIRONMENTSTRATEGY

PLAN OF ACTION

Tort R, _ go. Para. AREA/ISSUE A C T I OsIL TX _ Ref. 92 93 4 95196-2001 6.3 226 MOE capability to implement external assistanceprograms Set up ProjectM$nagement Unit with responsi-ME * is inadequate bility to coordinate all external assistance ______activities 6.4 227 MOE capability to manage public relations is inadequate Strengthen capability to implement public MDE * I - information and education programs 6.5 232 Ambient standards are set by MOH while enforcement is Ambient standards to be set by MOE in MDE * the responsibility of MOE cooperation with MOH. Drinking water MOB standards continue to be set by MOH. 6.6 239 Responsibility for protected areas is fragmented Set up an agency responsible for design. C.of N X * * management and monitoring of all protected I areas. including wetlands 6.7 243 Lack of training for protected area administrators and Develop a curriculum for the training of park MDE x * * _ _ park rangers rangers and protected area administrators COF ______?~~~~~~~~~~~~~~~~~~~~iDE 6.8 243 Lack of training to develop management plans for Introduce training program for development of MOE _ * _ _protected areas management plans for protected areas COP co 6.9 244 Source of funds for protected area management Set up a Nature Protection Fund and earmark NOF * ______revenues from the "nature tax" to the Fund COF _ _ _ _ 6.10 247 The number of regional eavironment and sanitary Develop and, after a transition period, MOE * * * inspectorate- is different and does not comply with the implement a separate but coordinated MOB structure of governance structure for the regional environment and sanitary inspectorates consistent with the ______structure of governance 6.11 249 Lack of coord'.nation mechanism for the development of Set up Regional Env. Councils advising MOE * environmental strategies and policies at the regional regional level government bodies. The level councils will be formed from representatives of local, regional and central government agencies. major industries and NGOs 6.12 250 Centralized implementation of environmental policy is not Enhance the role of the regional environment MOE _ * able to reflect variations in local conditions inspectorates to inolude the preparation of regional environmental action plans, negotia- tion and issue of pollution permits, review of environmental assessments, environmental monitoring, detection and fining of violations, and coordination with other regional and local level government agencies 6.13 251 Source of funds for regional environmental Establish Regional Environment Protection MOF _ * Protection Funds MDE _ 6.14 254 Local government responsibilities for environmental Assign responsibility for reguLating small- MDE * * * protecti1pn are not well defined scale Pollution sources to local gov'ts MORHC 6.15 262 Communication between MOEand NGOs is inadequate Establish formal coordination mechanism MOE * Page 5 BULGARIA

EMVIRONMENTSTRATEGY

PLAN OF ACTION

Text lF-PcEITPLflAtE No. par. 2ZEA SSUZ A C T I O SIDLE T=__ Ier. 92 93 94 95 96-2001 7. InEWsE iTSm 1EWBIC&L hSSISTA8 ANDRELh ACTIONS

7.1 268 Previousinvestment program was not based on a set of Base investmentssupported by the government MDE x * * * prioritiesand on effectivenesscriteria on risk assessmentand cost-effectiveness analysis 7.2 275 High concentrationof particulatematter in the air of Prepare feasibilitystudy for the expansion MO}I x _ severalcities due to widespreaduse of coal for heating of natural gas distributionnetwork Bul_as I _ 7.3 276 High sulphur content coal and briquetteare used for home Stop distributionof high sulphurcontent COE x heating in areas with high S02 concentrations in the air coal in affected areas, replacewith low MF sulphurcontent (imported)coal Torliv 7.4 283 Contaminationfrom past hazardouswaste disposal Prepare full inventory of sites and carry out MOE x * t * [Practices risk based rankinx to assessneed for cleanup - 7.5 285 No disposal facility for small generators of hazardous Prepare feasibility study for regional MOE x * waste hazardous waste disposal facilities. Explore MOI the option of hazardous waste incineration in ______.______I_ cement kilns. .6 287 Lack of funds for investments in nature conservation Explore the possibility of debt for nature MDE *O swau operations MP 7.7 289 Need for technical assistance to implement strategy Znsure that technical assistance provided by MDE _ * _ * __ donors covers high priority areas _ - 88

Annex 1 Page 1 of 51

Table 1: CriticalBenchmarks in the Evolution of EnvironmentalPolicy

First Ambient Est. of EIA Legisla- Standards National Instituti- tion Adopted EPA onalized

Bulgaria 1963 1969 1974 1988

Japan 1967 1970 1971 1972

U.S. 1970 1970 1970 1970

W. Germany 1969 1974 1974 1974

Korea 1977 1977 1980 1982

Brazil 1973 1976 1981 1986

Thailand 1975 1978 -- --

Indonesia 1982 1990 1978 1986

Nigeria 1976 1989 1989 1991

Source: David Wheeler, UnpublishedWorld Bank Report, 1991 (page 61) _ 89 _

Page 2 of 51 Figure l(a): Temporal Trends in Life Expectancy Males

80 .~~~~~~~~~~~~

L 75

70 x

t a 60 n 65

so -,-1-1-,. Year 1 (1946-52) Year 2 (1959-65) Year 3 (1975-77) Year 4 (1987-901

* Czechoslovakia1 O Poland Hungary

0 Canada

+ United States 6 Sweden -X Japan * Bulgaria - 90 -

Page 3 of S1 Figurel(b): Temporal Trends in LifoExpectancy - Females

85N

a 75 p 70 a t L.~ ~ ~ a 8 y so

Year 1 (1946-52) Year 2 (1959-85) Year 3 (1975-77) Year 4 (1987-90)

* Czechoslovakia O Poland

-6 Hungary 0 Camda

* United States fr Sweden X Japan

a Bulgaria

,~~ ~~~~ ~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ..------91 -

Psag 4 of 51 Figure 2: Infant; Mortality in Bulgaria

(a) Urban - Rural Trends over Time

Mortality 4 0 per 1000 Live birth 0o

1980 1S6 1970 16;'6 1160 1166

Total- Urban - Rural

(b) Time Trends in Infant MortalitYbY Sex 24 22

1980 ,98l 1982 1983 1984 1985 1986 1987 198X 1989 1990

-e-- Maile 92 -

Page 5 of 51

Table 2: BulgarianSulfur Dioxide Exposuresin InternationalPerspective

Country Year(s) Range of Annual S02 (pg/me)

Czech Republic 1981-88 0.4 184.1

Hur-ary 1987-88 36.0 - 112.0 (heatingseason) Poland 1988 3.0 - 636.0

Canada 1985 0.2 - 45.0

Bulgarian 1989-90 28.0 - 485.0 Hot Spots

Source:Various Country EnvironmentalReports, World Bank - 93 -

Page 6 of 51 Figure3: Blood Lead Levelsin Children from Polluted Areas in Bulgaria and Othor Countries (Mean :t SEH) pg/dl

2?5-

I0~~~~~~~~~~~~~~~~~~~

Sul13uta a Children,-Children, 1986-90 1 OtherOter Cauntries,Countres__98_-90 Children,Childrn, 19861_84 - 94 -

Annex 1 Page 7 of 51

Figure 4: Dietary Intake of Lead for the Period 1986-1989 (mg/day)

0.5

FAO- PTOI - Adults (0.429 mgiday)

FAO Permissible Total OailyIntake - Chkiden ______. _ _(0.046 mg/day)

1 2 3 Nursery Kindergarten SchoolAge

WA - winter-spring SA - summer-autumn - 95 -

Annex1 Page 8 of 51

Table 3: ComparativeInternational Emissions Intensity Data w

Country(b) SO2 NO,

Bulgaria 78.3 13.8 Hungary 76.3 15.7 Poland 68.3 21.6 China 47.5 15.2 Portugal 16.4 10.2 Canada 14.3 7.1 Greece 11.0 4.6 Thailand 9.3 3.9 Belgium 8.9 4.3 UK 8.7 4.1 Denmark 8.4 5.1 Finland 8.1 5.6 US 7.4 6.9 Italy 6.2 4.2 France 4.7 3.5 FRG 4.6 5.1 Sweden 3.2 3.3 Norway 2.3 3.7 Netherlands 2.1 3.7 Japan 1.6 1.4 Switzerland 1.1 2.4

MMeasured as thousandsof metric tons per billion dollars of GDP ) Data for Bulgaria from 1989, for other countriesaverage 1982-84

Sources: World Bank, World Tables (GDP) WRI (1990), (Emmissionsof Sulphur Dioxide,Nitrogen Oxides) World Bank Report P-5588-BUL (BulgariaGDP) - 96 -

Annex 1 Page 9 of 51

Table 4: Condition of the Arda River in Bulgaria

POQ QLLTI.Q :E R X I C F F H I N I E 0 E V A D T E 0 A E F U Y D D V R F S Y E MONITORINGPOINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D c S A T B T. L H . ~~~~~~~~~~~~~S (km) (X Arda Spring - … … … …_ … ……__ 39 16 Before Rudozem s 1 s s s BOD 2 14 After Rudozem s 1 1 s s NH3 30 12 After Vehtino s 1 s s s BOD 71 30 After Kurdzhali s 1 s s a BOD 99 41 Border Greece s s s s s - . ______.- _241 100

S - smallpollution (Class I Water - Drinking) m - medium pollution (Class II Water - Recreation,Fishing) 1 large pollution (Class III Water - irrigation,Industry) - 97 -

Annex 1 Page 10 of 51

Table 5: Conditionof the Beli Lom River in Bulgaria

POLLUT1 OUR E R X I C F F H I N I E 0 E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D G S A T E T. L H S _ (km) (%) Beli Lom Spring I_I__ _- _ _33 19 Before Razgrad s s 1 s s NH3 5 3 After Razgrad 1 1 1 s s BOD, NH3, Pharinac. 60 34 After Pisanetz 1 1 1 s s BOD, NH3, Pharmac. _", _ ~~~~~~~~~~~~2414 Aftbr Nisovo 1 1 1 s s BOD, NH3, Pharmac. _ - ,.- _ _ ~~~~~~~~~5430 After Ruse (Danube) 1 1 1 s s BOD, NH3, Pharmac. _ _ _ _ ~~~~~~~~~~~~176100

S - small pollution (Class I Water - Drinking) in - medium pollution (Class II Water - Recreation,Fishing) 1- larse pollution (ClassIII Water - Irrigation,Industry) - 98 -

Annex 1 Page 11 of 51

Table 6: Conditionof the Danube in Bulgaria

POLLUTIONSOURe:E R X I C F F H I N I E 0 E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D G S A T E T. L H S _ (km) (%) BorderI II

Novo Selo 8 1 s s s NH3, Susp. Sed After Vidim s 1 s s s NH3, Susp. Sed 50 10 After Vidim s 1 s s s NH3, Susp. Sed 45 9

After Lomn s 1 s s s NH3, Susp. Sed_ 40 8 After Kozloduy 1 1 s s s BOD, NH3, RadioactiveWaste ______- 30 6 After Criahove 1 1 s s s BOD, NH3

River Gigen 1 m s s s BOD, NH3 )120 25

After Svishtov m 1 s s s Oil, BOD, NH3 50 11 Before Ruse s 1 s s s BOD, NH3 20 4 After Ruse m 1 s s s Oil, BOD, NH3 . _ _ . _ ~~~~~~~~~~~~5011 After Tutrakan s 1 s s s BOD, NH3 55 12 Border/Silistra s 1 s s s BOD, NH3 . ______- _-- - 470 100

S - small pollution (Class I Water - Drinking) m - medium pollution (ClassII Water - Recreation,Fishing) L - large pollution (Class III Water - Irrigation,Industry) - 99 -

Annex 1 Page 12 of 51

Table 7: Condition of the Iantra River in Bulgaria

POLLUT:ION OSIRCE R X I C F F H I N I E 0 E V A D T E Q A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D G S A T E T. L H l ~~~~~~~~~~~~~S i,=______.- - -- (km) (%) Iantra Spring

Before Gabrovo s s s s s _ 8 3 After Gabrovo 1 1 s s s Oil, BOD, N03 43 15 After Pushevo 1 1 s s s Oil, BOD, N03, NH3 --_ . _ _ . ; . 29 10 After Veliko Tirnovo 1 1 s s s Oil, BOD, N03, NH3 22 8 Before Gorna 1 1 s s s Oil, BOD, N03, NH3 Criachovitza 5 2 After Gorna 1 1 s 1 s Oil, BOD, N03, NH3 Criachovitza . _ . ~~~~~~~~~~~~269 After Varbitza 1 1 s 1 s Oil, BOD, N03, NH3 - .. 17 6 After Oraganovo 1 1 s m s Oil, BOD, N03, NH3 _ . _ _ ~~~~~~~~~~~3613 After Radanovo 1 1 s s 6 BOD, N03, NH3 _ _ _ _ _ . ~~~~~~~~~~248 After Biala 1 1 s s s BOD, NH3, N03 . 57 20 After Novgrad m 1 s s s BOD, NH3

. -. _286 100

S - small pollution (Class I Water - Drinking) m - medium pollution (Class II Water - Recreation,Fishing) 1 - lar6s pollution (Class III Water - Irrigation,Industry) - 100 -

Page 13 of 51

Table 8: Conditionof the Iskar River in Bulgaria

POLLUTIONOUCR'E R X I C F F H I N I E 0 E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D G S A T E T. L H S . ___.__-_.,.__.-- (km) (X) Iskar Spring _ 80 30 Before Sofia s s s s s 13 5 After Sofia m 1 s s m N03, NH3, BOD, Oil, Fe 21 8 After Kurilo mI 1 s s s N03, NH3, BOD, Oil ._ _ _ _ ~~~~~~~~5621 Before Elisseina m 1 s s s N03, NH3, BOD, Oil 22 8 After Reburkovo m 1 s s m BOD, NH3, N03, Cu 60 22 After Resseletz s 1 s s s BOD, NH3 15 6 After Tchomakovtzi s 1 s s s BOD, NH3 ______._ 267 100

S - small pollution (Class I Water - Drinking) m - medium pollution (Class II Water - Recreation,Fishing) 1 - large pollution (Class III Water - Irrigation,Industry) 101 -

Annex 1 Page 14 of 51

Table 9: Conditionof the Kamtchia River in Bulgaria

P OLUTION OURCE R Z I C F F H I N I E Q E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E Q N H E T Y W T D E N E A S U T G D G S A T E T. L H S

_ . ______(km) (X) Kamtchia Spring I 58 24 After Fisek 8 S s s s Susp. Sed (SS) 63 26 After Sabmanovo s 1 1 s m BOD, NH3, Phos., Pb, SS 48 20 After Arkovna 8 m 1 m s BOD, NH3, Phos., Pb, SS 40 16

After Grozdiovo s m m 8 s BOD, NH3, N03, SS - - 35 14 Before Black Sea s m m s s BOD, NH3, N03, SS . l__ _ _ _ 244 100

S - small pollution (Class I Water - Drinking) m - medium pollution (Class II Water - Recreation.Fishins) 1 - large pollution (Class II; Water - Irrigation,Industry) - 102 - &nLex1 Page 15 of 51

Table 10: Condition of the Maritza River in Bulgaria

POLLUTION SOURCE R I C F F H I N I E 0 E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D C S A T E T. L H S (km) (X) Maritza Spring 40 13 After Kostenetz s s s s s BOD, NH3 15 5 After Belovo s m m s s BOD, NH3 _ _ _ 16 6 After Septemvri s m m s s BOD, NH3, N103 _ _ _ ~~~~~~~~155 After Pazardjik s 1 m s s BOD, NH3, N03, As 13 4 River Luda Jana m 1 s s m BOD, NH3, N03 8 2 After Govedara s 1 m s s BOD, NH3, N03 16 6 Before Plovdiv s 1 m s s BOD, NH3, N03

River Vatcha s 1 m s s BOD, NH3, N103 9 3 After Plovdiv m 1 m s s BOD, NH3, N03

After Mirovo s 1 m s s BOD, NH3, N03 42 14 Before Parvomai s 1 m s s BOD, NH3, N03 14 13 4 After Scobelovo s 1 m s s BOD, NH3, N103 45 15 After Simeonovgrad s 1 s s s BOD, N03 16 6 After Harmanli s 1 s s m BOD, N03, As

After Svilengrad s 1 s s s BOD, N103 . ____ 16 6 Border with Greece s 1 s s s BOD, N03 297 I100

S - small pollution (Class I Water - Drinking) M - medium pollution(Class II Water - Recreation,Fishing) 1 - large pollution (Class III Water - Irrigation,Industry) - 103 - Annex 1 Page 16 of 51

Table 11: Conditionof the Mesta River in Bulgaria

PO ,LUT-ONjSO'RCE R X I C F F H I N I E Q E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S UT G D G S A T E T. L H S ._._.______- (km) (X) Mesta Spring I_I_I . ____.____.__- 30 24 After Belitza s s s s s ._ _ 6 5 Before Razlog 8 s s S S

.. . _ _ ...._ _ _ _._ 5 4 After Razlog s m s s s BOD . … ______23 18 After Filipovo s s s s s . , . _39 31 Before Hadjidimovo s s a S S .

. . _ . _~~~~~~ 23 18 Border Greece s s s s ______- 126 100

S - small pollution (Class I Water - Drinking) m- medium pollution (Class II Water - Recreation,Fishing) 1 - large pollution (ClassIII Water - Irrigation,Industry) - 104 - Annex 1 Page 17 of 51 Table 12: Conditionof the Ogosta River in Bulgaria

POLLUTTONSO RCj R % I C F F H I N I E Q E V A D T E Q A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E Q N M E T Y W T D E N E A S U T G D G S A T E T. L H S (km) (X) Ogosta Spring 13 9

Before Tchiprovotzi s s s s s - - 28 21 Before Nihailovgrad s s s s m Cu, As 6 4 After Mihailovgrad s m s s s BOD . . _ ~~~~~~~~~~30 22 After Kobiliak s m 1 s s BOD, NH3, N03 . , _ - , . 59 43 Before Danube s m m s s BOD, NH3, N03 - - . _ I .. 136 100

S - smallpollution (Class I Water- Drinking) m mediumpollution (Class XX Water- Reoreatioil,Fishing) 1 larg. pollution(Class III Wator- Irrisation,Industry) 105 - Annex 1 Page 18 of 51

Table 13: Conditionof the Osam River in Bulgaria

POL LUT ON OR CE R X I C F F HT 0 I E O E V A D T E O A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E Q N M E T Y W T B E N E A S U T G D G S A T E T. L H S . _ -_ - _S._-. _ _A._. _ _ _ _ (kin) (%)

Osam Spring - - - - _- - 37 12 After Troyan s s s s s 5 2 Before Troyan m m s s s Phenols, BOD - 23 7 Before Lovech s s s s s . ______- - _- - 9 3 After Lovech m 1 s s s Oil, BOD 102 32 After Levski s 1 1 s S BOD, NH3, N03 138 44

After Tcherkvitza s m m 8 S BOD, N03, NH3, SS _ - _.1 I -- 314 100

S - small pollution (Class I Wator I Drinking) m - medium pollution(Class II Water - Recreation,Pishing) 1 - larse pollution (Class III Water - Irrigation,Industry) - 106 - Annex 1 Page 19 of 51

Table 14: Conditionof the Struma River in Bulgaria

-PO UT ONTSOUR CE R % I C F F H I N I E Q E V A D T E Q A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E Q N M E T Y W T D E N E A S U T C D G S A T E T. L H S (km) (X) Struma Spring 38 13 Before Pernik s s 8 8 s

_ _ - _ . . . 4 1 After Pernik 1 mi s s m Oil, BOD, Fe, Cd . _ 80 28 After Zemen 1 m s 8 S Oil, BOD 51 18 After Bobochevo m 9 a s s Oil

______- ~21 7 After Blagoevgrad s m s s s BOD, SS _ _ _ ~~~~~~~~9633 After Marina Pole, s s s s _ [BorderGreece _ . - . . 290 100

S - smellpollution (Class I Water- Drinking) m - mediumpollution (Class II Wator- Recreation,Fishing) 1 - largepollution (Class III Water- Irrigation,Industry) - 107 -

Page 21 of 51

Table 16: Conditionof the Vit River in Bulgaria

POLLUTION OURCE R % I C F F H I N I E 0 E V A D T E 0 A E F U Y D D V R F S Y E MONITORING POINTS T S L I MAIN POLLUTANTS L C R E O N M E T Y W T D E N E A S U T G D c S A T E T. L H S .______. _ - - - (km) (X) Vit Spring 4 . . _ , . ~~~~~~~~~~~~~~~4524 After Glozene 9 S s S s 80 42 After lassen s m s s s BOD -_ i_ ___ - . _ - - 9 5 After Dolna m 1 m 1 8 Oil, BOD, N03, NH3 Mitropolia 44 23 After Gouliantzi s m m m s Oil, BOD, N03, NH3 . . - _. . ~~~~~~~~~~~~116 Before Danube s s s BOD, N03, NH3

-. 189 100

S - small pollution (Class I Water - Drinking) iM - medium pollution (Class II Water - Reoreation,Fishing) 1 - lar8e pollution (Class III Water - Irrigation,Industry) 108 -

Page 22 of 51

Figure 5: Nitrate Concentrations in Drinking Water

V.. :X~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~p

- ..e - . - -*N /

-. ~~ ~~~~~~ - -rrr X*

*%*~~t

*. * *~~~~~~~** .onenraio

A~~~~~~~~~~~~ 109 -

Anner,1 Page 23 of 51 Table 17: Heavy Metal Contaminationof Lands in Bulgaria

- - - - -_ - _ .. - Zone Area As Cd Cu Fe/Mn HS Ni Pb Zn (ha)* ....-. - - - -, - - - - _ Burgas/Sliven 3,800 x x x x x x x x Kardzaii 4,500 x I x x x x Michailovgrad 7,500 x x x x x Pleven 1,500 x x x x x Plovdiv 5,500 x x x x Roussoe 2,100 x x x Sofia/Pernik 18,800 x x x x x x x

Varna 1,900 x - x x

* Area refers to th hectarage contaminatedby heavy metal concentrationsin the soil in excesa of norms. The total is 45,600 ha. Although not in excess of norms, an additional100,000 to 130,000ha have received contaminattonby industrieswhich produce heavy metal contaminants.

Source:

Data are from soil surveys and laboratoryanalysis commissionedby the Ministry of the Environmentand conductedby the PousnkarovInstitute of Soil Science and Yield Programming in 1988. Results are reported in the Annual Publicationfor the Condition of the Environmentin Bulgaria for 1989, ("GreenBook"), Ministry of the Environment,1991, Table 5.7. - 110 -

Annex 1 Page 24 of 51

Table 18; Permiss-ibleConcentration of Pb, Cu, Zn, As in Soil DependingUpon pH of the Soil in Water Suspense pHMiof Soil in PermissibleConcentration(mg/kg) Water Suspence Pb. Cu Zn As

3.5 20 15 20 25 4.0 25 20 30 25 4.5 30 25 40 25 5.0 40 40 60 25 5.5 50 60 90 25 5.7 60 80 110 25 6.0 70 120 200 25 6.2 75 230 300 25 6.5 80 250 340 25 7.0 80 260 340 25 7.5 80 270 360 25 8.0 80 280 370 25

{4The active reaction (pH) of the soil is being determinedin a suspension prepared by 1 part soil and 2.5 parts distilledwater. - 111 -

Annex 1 Page 25 of 51

Table 19: FertilizerApplication in Selected Countries

Country Average applications N + P + K k&Lha Netherlands 770 Belgium 530 East Germany 428 Czechoslovakia 330 France 310 Hungary 262 Poland 250 Denmark 245 Bulgaria 170-200 Romania 130

Source: IBRD, Bulgaria: Introductionto the AgriculturalSector 1990. Data are for 1986. Bulgaria for 1984-89. - 112 -

Annej 1 Page 26 of 51

Table 20: Fertilizer Prices in Bulgaria, 1981/88 and 1990

Price (lava/million tonnes) Active 1981-88 1990

N)tTo eous Fertilizers Ammonium Nitrate 34.5 130 1,860 Urea 46 150 2,595.* Amonium Sulfate 21 85

PhoeghaticFertilizers Ammonium Phosphate 82 (P203) 65 1,100 Ammonium Phosphate 18 (N) Single Super Phosphate 20 65 Triple Super Phosphate 46 200 3,100 Triple Super Phosphate 42 177 Triple Supev Phosphate 38 158

PotassiumFertilizers PotassiumChloride 50 71 PotassiumChloride 60 85 PotassiumSulfate 50 156

* The 1990 Urea price in Bulgaria is about 80 percent of the price in Western Europe.

Source: Miunstry of Agriculture,Sofia - 113 -

Annex I Page 27 of 51 Table 21: Bulgarian Requirements for Nitrogenous Fertilizers

Crop Fixation& Net Area Requirement* Mineralization Requirement Requirement Crop 1,000 ha hg N/ha kg N/ha kg N/ha 1,000 mt Whoat& 1,500 70 20 50 75 Barley Maize 600 235 20 215 129 Alfalfa 400 180 80 100 40 OtherCrops 600 100 20 80 48 Total 292

(1) ILACO,Agricultural Compendium, Elsevier Scientific Publishing Companv, N.Y., p. 531. (2) Metcalfe,D.S., andDonal Elkins, Crop Production: Principles and Practices, MacMillan PublishingCo., N.Y., 1980. - 114 -

Annex 1 Page 28 of 51

Table 22: Use of Pesticides in Selected Countries

Country Average applications of pesticides isLha Hungary 9.2 a EC Countries 6.5 b Bulgaria 3.4 c Poland 1.6 b a/ Baed on pesticide sales of 62,427 mt (1986) and an agriculturalarea of 6.5 million ha. Source: State of the Hungarian Environment,Hungarian Academy of Sciences, the Ministry for Environmentand Water Managementand the HungarianCentral Statistical Office, 1990.

D/ IBRD, An AgriculturalStrategy for Poland, Report of the Polish/EC/IBRDTask Force, 1990, p. 288. cl Based on average pesticide imports of 23,400 (1982-88)and an agriculturalarea of 6.8 million ha. - 115 -

Page 29 of 51

Table 23: Percentageof Utilizationof Selected Types of Waste in 1988

Quantity Quantity Waste of produced of utilized waste in waste in % of 103 tons 103 tons utilization

Rock and soil mass 268726 98025 36.0 from open minings

Wastes from non-ferrousmetals 17570 182 1.0 ores mining and dressing

Slurries, slags and other waste 2144 1390 64.8

Oil sediments 223 12 5.4

Sulphur waste 167 98 58.7

Other slurries from chemical ind. 140 122 87.1

Waste dust from cement production 68 65 95.5

Waste from building materials 253 63 24.9 production

Waste fractionsof limestone 253 15 5.9

Waste moulding masses 234 162 69.3

Timber rinds from wood industry 95 28 29.5 and woodworking

Other wood waste 327 146 44.6

Slaughterhousewaste and 61 35 57.3 untainted confiscatedmatter

Other waste from food, wine 330 152 46.0 and tobacco industry

Fly ash and other kinds of ashes 5776 34 0.6

Sediments from sewage 489 41 8.3 treatmentplants

Source: " Green Book", Ministry of the Environment,1990 - 116 -

Page 30 of 51

Table 24: Total HazardousWaste Generated in Bulgaria in 1988

Amount HazardousWaste Total Waste Recycled

(in 103 TPY) Solid Waste ^ Total 1,290.0 299.0 Pyritic ash from sulfuric acid production 250.0 84.0 Phosphorous-gypsumfrom phosphoricacid production 600.0 10.0 Used catalysts 0.9 .. Slag and ash from the extractionof nonferrousmetals 200.0 117.0 Bleachingsoil saturatedwith oils 2.5 Casting Solid containingfurnace clay 148.0 60.0 Asbestos waste 2.3 Metallurgicalslag from machine-buildingindustry 4.4 -- Other slag containing cyanide 10.0 -- Bones from meat processing 37.0 17.0 to 20.0

Liquid Waste - Total 108.0 19.0 Oil and oil products from repair shops, machine-building 21.5 industry,garages, car services,depots, oil processing Organic halogenousand non-halogenoussolvents 18.0 7.8 Acidic tar from oil-refining 8.0 - Alkaline sulfates fzom productionof machine lubricants 3.0 -- Acids and bases of cifferentcomposition 27.0 -- Waste blood from slaughterhouses 30.0 11.0 Waste from fatty acid 0.08 0.04

Pastes and Sludge - Total 1,048.0 182.0 Galvanic slag containing copper, chromium,nickel, zinc, 245.0 -- cadmium, etc. Slag containing arsenic 80.0 -- Hicella from antibioticsproduction 12.0 4.7 Cubic refuse from chemical and pharmaceuticalindustries 4.0 -- Oily and biologicalsediments from oil refining 40.0 -- Resins and resinous waste from chemical industry 12.0 3.6 Oil sedimentsand slag trapped in the equipment of the 113.0 -- repair shops, machine-buildingindustry, depots, car services,etc. Carcasses of the animals 150.0 70.0 to 200.0 to 80.0 Waste from poultry slaughterhouses 60.0 50.0 Fish waste 34.0 20.0 Animal offal 60.0 -- Distillatedliquid from making calcinatedsoda 160.0 15.0

Source: Ministry of Environment,1990 Bulgaria Timber Resources Volumeof StandingTimber

million cubic meters 500

400 -

100 -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-

0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0

1960 1965 1970 1975 1980 1985 1990 Bulgaria Conifersand DeciduousForests

million cubic meters 180 160- . - 0

140 - 120 - | . :0

100 l -- [ | t '

60 CL~~~~~~~~~~~~~~~~~~~~~~~~~~~~

40~~~~~~~~~~~~~~~~~~~~~~~~~~

20 CD~~~~~~~~~~~~~~~~~~~~~~~~~~

0 tA~~~~~~~~~~~~~~~~~~~~~~~~ 196 1965 1970 1975 1980 1985 1990

_Conifers liDeciduous Trees o VolumeofCniSeandingduoTimbee 0 -119-

Page 33 of 51

Table 25: BulgarianAir Quality Standards - Maximum Acceptable Concentration(MAC)

Compound Maximum Acceptable Concentration 30-minute 24-hour

NO2 0.085 0.04 NO 0.600 0.06 Nitric acid 0.400 0.15 Acrylonitrile - 0.03 Acrolein 0.03 0.03 Amyl alcohol 0.01 0.01 C-methylstyrene 0.04 0.04 NH4N03 ^ 0.30 -naphthochinone 0.005 0.005 As-excludingH 2As (determined - 0.003 in inorganic substances) HLAs - 0.002 Amyl acetate 0.10 0.10 Amylene 1.50 1.50 NH3 0.20 0.04 Aniline 0.05 0.03 Acetaldehyde 0.01 0.01 Acetone 0.35 0.35 Acetophenone 0.003 0.003 Benzene 1.50 0.10 3,4-benzopyrene - 0.10 Boric acid - 0.02 Gasoline (low S content, 5.00 1.50 calculatedas carbon content) Gasoline (purified,calculated as carbon) 0.05 0.05 Br - 0.04 Benzyl alcohol 0.16 - Butane 200 - a-diethylaminoethyl 0.60 0.60 Butyl acetate 0.10 0.10 Benzoil chloride 0.06 0.03 Butylene 3.00 3.00 Butane diol-1,4 0.10 0.05 ButyL alcohol 0.10 0.10 Butyphos 0.10 0.10 Valerianic acid 0.03 0.01 Sodium W04(calculatedas tungsten) - 0.10 V2°0 - 0.002 Vinyl acetate 0.15 0.15 Co 5.00 3.00 GaO2 (calculatedas Ge) - 0.04 Dirynie 3.00 1.00 Diketene 0.007 - Dinitrotoluene(DNT) 0.004 0.004 Dimethylaniline 0.0055 0.0055 - 120 -

n=x 1 Page 34 of 51 Table 25: BulgarianAir QualityStandards - MaximumAcceptable Concentration (continued)

Compound MaximumAcceptable Concentration 30-minute 24-hour Dimethylsulfide 0.08 DMF 0.03 0.03 Dinyle 0.01 0.01 Dichloroethane 3.00 1.00 2,3-dichloro-1,4-naphthoquinone 0.05 0.05 Dinitroorthocresole 0.002 0.001

Dimethyldisulfide 0.70 - Diethylamine 0.05 0.05 Dimethylamine 0.005 0.005 Epichlorohydrin 0.20 0.20 Ethylalcochol 5.00 5.00 Diethylether 1.00 0.60 Ethylacetate 0.10 0.10 Ethylene 3.00 3.00 Ethyleneoxide 0.30 0.03 Ethylbenzene 0.02 0.02 Ethyleneamine 0.001 0.001

Hg-metal - 0.0003 Hg-compounds 0.0003 Isopropylbenzene 0.014 0.014 Isopropylbenzenehydroperoxide 0.007 0.007 Isoctylalcohol 0.15 0.15 Iodine 0.03 Isopropylalcohol 0.60 0.60 Isobutylalcohol 0.10 0.10 Intrathione-(M81) 0.001 0.001 CdO (calculatedas Cd) 0.001 Caprolactam 0.06 0.06 Caproicacid 0.01 0.005 Carbophos 0.015 Co-metal 0.001 Co-sulphate 0.001 Xylene 0.20 0.20 Maleicanhydride 0.20 0.05 Mn and its compounds(calQolated as MnO) 0.01 Oleicacid 0.015 0.01 MgO 0.40 0.05 Cu 0.01 CuO 0.002 2-mercaptoethanol(monothioethylene) 0.07 0.07 Methanol 1.0 0.5 Methaphos 0.008 Methachlorophonylisocyanate 0.005 0.005 Methylacrylate 0.01 Methylacetate 0.07 0.07 - 121

Page 35 of 51

Table 25: BulgarianAir Quality Standards - Maximum AcceptableConcentration (continued)

Compound Maximum Acceptable Concentt_tion 30-minute 24-hour

Methylmercaptane 9xlO1 Methylmethacrylate(MHA) 0.10 0.10 Monomethylanilmine 0.04 0.04 Methylene dichloride 3.00 1.50 Monomethylamine 0.01 0.01 Nitrobenzene 0.008 0.008 A-naphthol 0.006 0.003 Ni-metal 0.001 Ni-oxide 0.001 Ni-soluble salts 0.0002 Naphthalene 0.003 0.003 Nitrobromobenzene 0.12 0.01 Nitrochlorobenzene(m, o, pi 0.004 0.004 Lead compounds 0.0003 Lead sulfide 0.0017 03 0.16 0.03 Oxytetracycline 0.01 Acetic acid 0.20 0.05 Acetic anhydride 0.10 0.03 Parachloroaniline 0.01 Parachlorophenylisocyanate 0.0015 0.0015 Penicillin 0.05 0.0025 Pentene 100 25 Perchloroethylene 0.08 NH4-paramolybdate(calculated as Mo) - 0.10 Pyridine 0.08 0.08 Propylene 3.00 3.00 Propyl alcohol 0.30 0.30 Dust - nontoxic 0.50 0.15 Carbon black 0.003 0.003 Porop (0,0-dimethyl-S-N-ureamethyl) 0.15 0.05 ditiophosphate 116S04 (calculatedby molecule) 0.30 0.30 H.S04 (calculatedby HI) 0.002 S02 0.50 0.005 Selenium oxide 0.0001 0.00005 H2S 0.008 0.008 CS2 0.03 0.005 HCI 0.20 Styrene 0.003 0.003 Thyophene 0.60 Toluene diisocyanate 0.05 0.02 Toluenediamine 0.04 0.025 Toluene 0.60 0.60 Turpentine 2.00 1.00 - 122 -

Annexfl Page 36 of 51

Table 25: BulgarianAir Quality Standards - Maximum AcceptableConcentration (continued)

Compound Maximum AcceptableConcentration 30-minute 24-hour

Trichloroethylene 4.00 1.00 Tetracycline 0.01 0.006 Tetrachlorohydrophurane 0.20 0.20 TeO2 0.0005 Triethylamine 0.14 0.14 Tricresol (mixtureof o, m, p isomers) 0.005 0.005 Tetrachloromethane 1.00 Trimethylolpropane 0.20 0.15 Phenol 0.01 0.01 Fozalone (0,0-diethyl-S- 0.01 0.01 6-chlorobenzoxaniline-3-methyl)dithiophosphate Formaldehyde 0.035 0.003 Phosphorousanhydride 0.015 0.05 FM, 0.01 0.001 Phthalic anhydride 0.10 0.10 Phosgene 0.02 0.01 F-compounds,gaseous (such as FH, SiF4) 0.02 0.005 Soluble inorganicF-compounds NaF, Na3SiF.0.03 0.01 Poorly soluble inorganicF-compounds AlPF, Na.AlFF,CaF 2 0.20 0.03 Furfurol 0.05 0.05 Hexane 0.40 0.085 Chlorine 0.10 0.03 Hexene 60 Chlorobenzene 0.10 0.10 Hexafluorobenzene 0.80 0.10 Hexamethylenediamine 0.001 0.001 Chloroprono 0.10 0.10 Heptene 0.35 0.065 Cr (VI) (calculatedas CrO3) 0.0015 0.0015 Hexachlorocyclohexane 0.03 0.03 Chloroaniline(m) 0.01 0.01 Chloroaniline(p) 0.04 0.04 Chlorophos 0.04 0.02 Cyclohexanol 0.06 0.06 Cyclohexanone 0.04 0.06 HCN-acid 0.01 HCN-gas 0.01 0.01 Cyclohexane 1.40 1.40 Zinc 0.05 Cyclohexaneoxime 0.10 - - 123 -

Annex1 Page 37 of 51

Table 26: Indicators and Standards for Determiningthe Quality of CoastalSeawater

No. Indicators Unit of Wator Use Area SanitaryProtection , ______|Mc ment . Zone 1 2 3 4 S

GrowupA. GenuralPhysical and InorganicChrmical dicatrws

1 Ma#tr - Absenceof mater floatingon the Absence of substances surfacounuual for seawaterin and other impurities the upper (30 cm) layer of water floatingon surface of (coloredspos of oil and other water that are unusual -______,______impurities) _ in swater 2 Color . No visible discolorationof No requirements seawaterin a 10 cm column 3 Tansparency cm No lower than 30 cm on the Snell No requirements scale. When decease in tra_sparncy is caused by local hydrologicand other naual cimatic fActo, the transparency valueis not subjectto regulation 4 Odor point The intensity of odors unusual in Absence of strage seawa should not exceed the tamt and odor of food thresholdof perception(2 points). products deriving from IS food pnoductsderiving from the sea the sa, the must be no stange odor or taso S Nitogen (ammonia) mg/dm < O.OS < 0.01 6 Nitrite nitrogea <0.02 < 0.02 7 Nitrite nitrogen < 1.0 < 1.0 8 Phosphorus(total <0.1< < 0.1 content) - 124 -

Annexc 1 Page 38 of 51

No. Indicators Unit of Water Use Area Sanitary Protection Measurement Zone 1 2 3 4 5

Group B. GOueralIndicators for OrganicPollutants

9 Oxidizability mgldm3 < 10 No requirements (pormanganate) 10 XPC (bichromate) < 2.5 No requirements 11 BPC_ < S No requirements 12 Extractable < 0.1 No requirements substances(with tetrachloromethane)

Group C. Indicators for Organic Matterof IndustrialOrigin

13 Anionic-active mg/dr3 < 0.5 < 0.5 detergents 14 Petroleumand petroleumproducts . <0.05 < 0.1 (dissolvedand emulsified) . .

Group D. Microbiologicalindicators

15 Number of lactose No. per diem Must not exceed 1000 per cubic Must not exceed 1000 positive intestinal (cubed) decimeter of water per cubic decimeterof bacteria _ __ ._._._.___ water 16 Activatorsof No permitted Not permitted contagiousintestinal disea_ 17 Staphylococci In mass bathing areas their No requirements number must not exceed 100 per cubic decimeter of water 18 Interococci Must not exceed 50 per cubic No requirements dcimter of water - 125 -

Annfus I Page 39 of 51

LIST of AdditionalIndicatnrs and Standardsfor Determination of the Quality of Coastal Seawater

-~~~~~~~~~~~~~~~~~ _ No. Iadicators Unit of Water Use Sanitary Measure-ment Area Protection Zone 1 2 34_ I

I. Mementsthat might simultaneouslybe componentsand seawaterpollutants

1. Arsenic mg/dm3 < 0.05 < 0.05 2. Iron <0.1 <0.5 3. Mercury < 00001 <0.001 6. Codiupper0 <0.0 | 65. . Coppercobalt c< 0.01 <<0.01 0.01 7. Nickel 0.01 <0.01 8. Lead < 0.01 < 0.0S 9. Zinc * < < 0.01

HI. Substancesof AnthropogenicOrigin

10. Agnia 1050 (phenitrotione)

31. Nitrobeezene 5< 0.01 < 0.01 32. Oxidizedaliphatic acids *< 0.01 < 0.01 - 126 -

Annex I Page 40 of 51

No. Indicators Unit of Water Use Sanitay Mesure-ment Area ProtectionZone 1 2 3 4 5 33. Acetic acid <0.01 <0.01 34. Pyridine < 0.01 < 0.01 35. Polyethylenimine < 0.001 < 0.001 36. Resorcine < 0.04 < 0.04 37. Saturn [JU< 0.0002 < 0.0002 38. Sevine < 0.002 < 0.002 39. Simazine < 0.0024 < 0.0024 40. Styrene < 0.1 < 0.1 41. Taunins g< 10.0 < 10.0 42. Toulene < 0.5 < 0.5 43. Phenols < 0.001 < 0.001 44. Fluorine < 0.75 < 0.75 45. Formaldehyde < 0.1 < 0.1 46. Chlorobenzine 0.001 < 0.001 47. Cyanides(total amount) 0.05 < 0.05 48. Cycloboxan < 0.01 < 0.01 49. Cyclohexanol <0.01 < 0.01 - 127 -

Annex 1 Page 41 of 51

Table 27: Parameters and Levels for Determinationof the Permissible Degree of Pollution of the DifferentClasses of Surface Waters

Group A: Physicaland Chemical Parameters

Parameter Class II

Temperature(C°) not in excess of 30 of the average temperatureof the season Color (grad.) no visible additional coloration Smell <3 Chemical activityreaction (pH) 6.0 - 8.5 Oxygen saturation(%) <40 Electricalconductivity (pS) 1300 Cumulativehardness (mgeq/dm3) <10

InorganicChemical Parameters (mg/dn3) Dissolvedoxygen <40 Dissolved solids <1000 Suspendedsolids <50 Chlorine ions <300 Sulphate ions <300 Hydrogen sulfide (free) not allowed Iron (total) <1.5 Manganese <0.3 Nitrogen (Ammonia) <2.0 Nitrite <0.004 Nitrate <10.0 Phosphates <2.0 Selenium <0.01 Beryllium <0.0002 Vanadium <0.01 Molybdenum <0.5 Barium <1.0 Boron not allowed Silver <0.01 Uranium <0.6 Radium 226 (mBq/dm3) <150

Group B: Parametersof Organic Pollution (mg/dm3)

Parameter Class II

Suspendedsubstances <15 Permanganateoxidizability <30 BichromateCOD <70 BODa <15 Dissolvedorganic carbon <12 Extractablesubstances <3 (with carbon tetrachloride) Organic nitrogen <5 - 128 -

Annex Page 42 of 51

Group C: Parameters of Inorganic Substances of Industrial Origln (mg/di3)

Parameter Class II

Mercury <0.001 Cadmium <0.01 Lead <0.05 Arsenic <0.05 Copper <0.1 Chrome (3 - valent) <0.5 Chrome (6 - valent) <0.05 Cobalt <0.1 Nickel <0.2 Zinc <5 Cyanide (easily decomposable) <0.05 Cyanide (total quantity) <0.5 Fluorides <1.5 Free active hlorine <0.05 Cumulative B-activity <750

Group D: Parameters of Organic Substances of Industrial Origin (mg/den)

Parameter Class II

Anion-active detergents <1.0 Phenols (volatile) <0.05 Petroleum products <0.3 Aldrin <0.002 Pyridine <0.2 Xantogenates <0.01 SaponLte <0.2 Styrene <0.2 Benzene <0.5 Formaldehyde <0.5 Caprolactam <1.0 Phthalic acid <1.0 Phenitrotion <0.0001 Zolon (xylene?) <0.0001 Saturn <0.1 Atrazlne (Ceazine) <0.25 Laso <0.3 2.4 D <1.0 Sevin (Dicarbon) <0.002 Vinyl chloride <0.01 Ethane dichloride <1.5 Aphalon <1.0 Patoran <2.0 DiLid <1.0 Ramrod <0.5 Trephlan <1.0 Propanide <1.0 Diphensoquat <1.0 - 129 -

Page 43 of 51

Group D: Biological Parameters

Parameter Class II

Degree of Pollution beta-mezo -Pantle-BookIndex <2.5 -Zelinka-Marvan-RotsteinIndex >40 Diversityof macrozoobenthos (after Shenon) >2 Equalizationdegree off the macrozoobentos >0.6 Dominationdegree of the macrozoobenthos <0.3 Total number of microorganisms (direct count) <5x106 Total coli-titer (cm3 ) <0.1 Escherichiacoli titer (cm3) (thermoresistant) <1.0 Pathogenicmicroorganisms not allowed - 130 -

Annex l Page 44 of 51

Table 28: Levels for the PermissibleContent of Harmful Substancesin Waste Waters, Dischargedinto the Sewerage Systemsof Settlements

Parameter Permissible (mg/i) Concentration

Suspendedsubstances <500 Petroleum,oil products, mineral oil and fats (extractablewith organic solvents) <50 Organic solvents (chlorinatedhydrocarbons) not allowed Mercaptanes not allowed pH 6.5-9.0 Non-decomposabledetergents not allowed (surface-activeagents) Biologicallydecomposable detergents <50 (surface-activeagents) Chrome (6-valence) <0.5 Chrome (3-valence) <2.7 Cyanide <0.5 Copper <0.8 Zinc <10 Lead <1 Nickel <1 Arsenic <0.5 Iron (total) <10 Free Chlorine <2 Cadmium <1 Hydrogen sulfide <0.1 Phenols:The concentrationis to be determined for each particularcase based on the relation between the quantitiesof the dischargedphenolic waters and the water quantitiesin the respective trunk sewer at the point prior to its discharge into receivingwater body. The mixed waters must have phenol concentrationequal to the permissiblephenol concentrations for respective class of the receivingwater body: Class I 0.001 (mg/l) Class II 0.02 (mg/l) Class III 0.01 (mg/l) - 131 -

Page 45 of 51

Table 29: Fines for the Pollutionof Air, Water and Soil

Fines for Water Pollutants

Fines in lv/kg

Oxidation (permanganic) 0.012 - 0.12 Suspended substances 0.005 - 0.05 Chrome (6-valent) 0.410 - 4.10 Chrome (3-valent) 0.050 - 0.50 Cyanide 2.500 -25.00 Phenols 0.130 - 1.30 Mangan 0.075 - 0.75 Iron 0.020 - 0.20 Copper 0.250 - 2.50 Zinc 0.420 - 4.20 Cadmium 0.420 - 4.20 Lead 0.420 - 4.20 Washing powders 0.210 - 2.10 Ammonium ions 0.060 - 0.60 BPK5 0.012 - 0.12 pH (for a unit of pH) 0.050 - 0.50 Arsenic 0.500 - 5.00 Mercury 2.500 -25.00 Nickel 0.250 - 2.50 Fluorine 0.025 - 0.25 Oil, oil products and fat 0.160 - 1.60 Formaldehyde 0.025 - 0.25 Caprolactam 0.025 - 0.25 Phatalic acid 0.05 - 0.50

Fines for Air Pollutants

Fines in lv/kg

Sulphur dioxide 0.003 0.03 Dust 0.001 - 0.01 Lead 0.210 - 2.10 Arsenic 0.050 - 0.50 Sulphur hydrogen 0.190 - 0.19 Nitrogen oxides (calculated as nitrogen) 0.020 - 0.20 Ammonium 0.010 - 0.10 Manganese and its compounds 0.030 - 0.30 (calculatedas manganese dioxide) Soot 0.100 - 1.00 Sulphur carbonate 0.015 - 0.15 Sulfuric acid 0.020 - 0.20 Hydrochloric acid 0.010 - 0.10 Phenol 0.150 - 1.50 - 132 -

AnngxiI Page 46 of 51

Fines for Air Pollutants (continued)

Fines in lv/kg

Fluor compounds 0.050 0.50 (calculatedas fluorine) Chlorine 0.050 - 0.50 Smell felt at a distance of working organization: at 100 meters 500 - 1,500 lv/month over 500 meters 1,500 - 5,000 lv/month up to 1,000 meters 5,000 -10,000lv/month over 1,000 meters 10,000 -15,000 lv/month

Fines for Soil Pollutants

Fines in lv/kg

Building refusals and other inert waste 4 - 40 lv/m2 Domestic waste 2 - 20 lv/m2 oil products 10 -100 lv/m2 Metal and plastic mass waste 5 - 50 lv/mF Vegetation waste 1 - 10 lv/m2 Chemical and liquid wastes 10 -100 lv/m2 Lead in soil up to 2 times higher than maximum allowablelvel 15 -100 lv/dka Lead in soil over 2 times higher than - maximum allowable level 15 -150 lv/dka Copper in soil up to 2 times higher than maximum allowable level 8 - 80 lv/dka Copper in soil over 2 times higher than maximum allowable level 12 -120 lv/dka Zinc in soil up to 2 times higher than maximum allowablelevel 5 - 50 lv/dka Zinc in soil over 2 times higher than maximum allowable level 7 - 70 iv/dka Arsenic in soil up to 2 times higher than maximum allowablelevel 10 -100 lv/dka Arsenic in soil over 2 times higher than maximum allowablelevel 15 -150 lv/dka Simasine in soil up to 2 times higher than maximum allowable level 5 - 50 lv/dka Simasine in soil over 2 times higher than maximum allowablelevel 7 - 70 lv/dka Atrazine in soil up to 2 times higher than maximum allowable level 10 -100 lv/dka Atrazine in soil over 2 times higher than maximum allowable level 15 -150 lv/dka - 133 -

Annex X Page 47 of 51

Table 30: Investmentin EnvironmentProtection from Funds Raised from Fines in Bulgaria in 1986-1990 (in thousand Leva)

1986 1987 1988 1989 1990 TOTAL

Agricult.ure 3887 1591 2895 2939 2130 13442 Science, Culture, Education 1923 2069 980 2887 2111 9970 Hunting-flshingenterprises 32 240 230 180 682 Chemical Industry 260 250 208 718 Food ProcessingIndustry 200 54 357 921 504 2036 Light Industry 90 90 Associations 105 375 221 701 Veterinarywork 310 250 80 640 Communes 2011 1350 6356 7143 5911 22771 Building Materials Ind. 300 957 306 200 121 1884 Ceramic Industry 226 65 24 315 Metallurgy 712 60 910 200 110 1992 Machine Building Industry 30 153 183 Health 520 325 231 1076 Others 500 220 201 921

Total 9185 6412 13787 16005 12032 57421

Source: Ministry of Environment - 134 -

Ann&X_ Page 48 of 51

Table 31: Fines Collectedfrom Polluters in Various Districts,Comparison Between 1990 and 1991

Whole year Until Until 1990 8/31/91 8/31/91

Blagoevgrad 377826 331783 249096 Burgas 2945637 2350609 1764793 Varna 1209403 1070151 803449 Vratsa 799255 411053 308611 Beliko Trnovo 540323 351846 264159 Mikhaylovgrad 521353 431620 324052 Plovdiv 3557423 2539130 1906331 Pernik 592038 522318 392146 Pleven 646292 381645 286532 Pazardjik 1738911 1169515 878050 Ruse 846386 722814 542675 Stara Zagora 1201781 834117 626239 Smolen 260796 140196 105257 Sofiya 2941237 2256672 1694267 Haskovo 1228304 568764 427019 Shumen 784770 495793 372232

TOTAL 20209735 14578026 10944908 - 135-

Annex 1 Page 49 of 51

Table 32: EstimatedCost of Marginal Reduction in SO2, PM, and NO, Emissions,from High Stacks in Poland'

X Reduction Marginal Abatement Cost (1990US$/tonemitted)

ParticulateMatter 40 150 50 250 60 500 70 1,500

Sulfur Dioxide 15 600 30 1,100 50 1,900

Nitrous Oxides 0 (maintain'80 level) 4,000 10 9,000

Source: Report No. 9808 - POL, World Bank, August 1991

' Assumptions:a) no increase in the level of gas usage; b) cost of meeting a change in the target reductionlevels of one pollutant examined without altering the other targets. - 136 -

AnneX 1 Page 50 of 51

Table 33: Expenditureon EnvironmentalProtection (in million Leva)

1985 1986 1987 1988 1989 1990

Capital Investment 334 382 405 265 320 274 Other 78 86 91 97 94 89

TOTAL 422 468 496 362 414 363

Capital Investmentfor Material Production 6279.9 6634 7383 7950.1 7940.4 7608.4

National Income 23450.5 26851.4 28338 30077.7 30839.7 31371.6

Total Expenditureon 6.7 7.1 6.7 4.5 5.2 4.8 EnvironmentalProtection as X of Capital Investmentfor Material Production

Capital Investmentfor 5.5 5 8 5.5 3.3 4.0 3.6 EnvironmentalProtection as X of Capital Investmentfor Material Production

Total Expenditureor 1.5 1.7 1.8 1.2 1.3 1.2 EnvironmentalProtection as % of National Income

Source: Ministry of Environment - 137 -

Annex 1 Page 51 of 51

Table 34: EnvironmentalProtection Investments (in thous;.adLeva)

1986 1987 1988 1989 1990

Total capital investment 381825 404947 265441 320197 274223

Waste-Free Technology 28001 55498 37419 51876 24023 Water Supply 12947 10839 5006 2857 1098 Water Protection 124861 132614 97758 77239 101208 Air Protection 26641 51655 21267 58562 29512 Soil Protection 102274 81539 39341 81853 57013 Anti-NoiseAction 87101 70759 61369 Others 2043 1748 Source: Ministry of Environment - 138 -

Annex 2 Page 1 of 4

Summarlesof Human Health Data in Spot Areas

1. BiologicalMonitoring (within 2 km of ferrous metallurgyplant) * average blood Pb in 150 adults - 40 ug/dl * average carboxyhemoglobinlevel - 2.5% (std <1.0%)

2. Morbidity Surveillance * incidencerate of chronic respiratorydiseases (chronic bronchitis,emphysema), allergic diseases (includingasthma) and coronary hearth diseases "2-3 times above national average" * strong correlation(r-0.78) between dust levels in 14 areas of Pernik and their asthma incidencerates

Kremikovtsi

1. BiologicalMonitoring (200 adults, >15 years old) * average carboxyhemoglobinlevel - 2.6% (std <1.0%) * polycyclic aromatichydrocarbon metabolites - 100% of subjects

2. Morbidity Surveillance(11 year time series, 1980-1990) * Settlement 1: a) strong correlationof incidencerate of acute respiratorydisease in adults with average annual SO0 levels (r-0.67) b) strong correlationof incidencerate of asthma in adults with average annual H2S levels (r-0.84) * Settlement2: strong correlationof incidencerate of chronic bronchitis/emphysemawith average annual phenol

level (r-0.86)and SO2 levels (r-0.79)

Plovdiy Area

1. Morbidity Surveillance * correlationof airborne lead (Pb) levels with rates of anemia by local area is strong (r-0.75) * correlationbetween average annual SO2 levels and incidencerates of asthma and chronic bronchitis * statisticallysignificant correlation (r-0.26, p-0.008) between toenail lead levels and "WISC Verbal" test in sample of 108 children

2. Contaminationof food with lead (Pb) in 1990/91

Food with MAC of 0.5 mg/kg: tomatoes 0.76 (average) potatoes 0.92 (average) - 139 -

Annex 2 Page 2 of 4

Food with MAC of 0.4 mg/kg: apples 0.78 - 0.80 grapes 0.75 - 1.47 cherries 0.66 - 1.10 strawberries 0.94 - 1.00

Srednoeorie

1. BiologicalMonitoring (sampleof 120) * 23X of adults had blood cadmium levels above standard (1 ug/g creatinine) * 68% of adults had carboxyhemoglobinlevels above standard (1X)

2. MorbiditySurveillance

* correlationof average annual SO2 and H 2S0 4 levels with incidence rates of chronic bronchitis,asthmatic bronchitis, coronary heart diseases and flu

gazlog

1. Before-AfterStudy * morbiditysurveillance system evaluatedfor period before pulp and paper mill opened (pre-1970)and for 1981-85, when it was operating *^< incidenceof asthma in adults increases13-fold incidenceof skin diseases in adults increases 11-fold incidenceof conjunctivitisin adults increases 11-fold

2. Sample survey among adults (were compared to control town Bansko) * elevated white blood cell counts 2 times higher in Razlog * elevated eosinophilcell counts 1.5 time higher in Razlog * elevated 17-ketosteroids1.5 time higher in Razlog * 64% of those skin tested were positive for bacteria, fungi, or domestic allergens in Razlog vs 33.3X in control town (p<0.05)

DeMnA

1. MorbiditySurveillance * incidencerates of flu, chronicbronchitis, allergic "rash", conjunctivitisand asthmaticbronchitis among children and adults were elevated compared to control town "Georgi Traikov"

2. Large Sample Survey * random sample of 2350 people matched by age and smoking status with 1000 people from Georgi Traikov * performedvalidated questionnairesfor chronic bronchitis and coronary heart disease symptoms;did chest x-rays and spirometry - 140 -

Page 3 of 4

* Outcome Devnva Control Town morning cough 30% 12% cough more than 3 months/year 15% 61 cough 3 years in a row 8X 4X sputum 20% 6X sputum 3 years in a row 141 61 wheeze 141 6X chronic bronchitis 8% 4X x-rays changes "characteristic of chronicbronchitis" 4% 0.5%

Vratsa

1. Day-to-day time series multiple correlationbetween air pollutants, meteorologicvariables, and symptoms/diseasesfrom morbidity surveillancesystem Correlations' S=rytom/Disease Variables in Model Day Day-l DaY-2

conjunctivitis/rhinitistemp., humid., NH3 0.69 0.66 0.68

flu temp., NH3, N02 0.52 0.35 --

rash humid., NH3, NO2 0.37 0.30 --

asthma temp., humid., 0.44 0.72 0.57 windspeed,NH3, N02

tracheobronchitis temp., humid., NH3, N02 0.45 0.62 0.57 S02, H2S

chronicbronchitis temp., humid., windspeed, 0.37 0.50 0.66 NH3, NO2, H2S pneumonia humid., windspeed, 0.44 0.49 0.52 NH3, NO2, SO2

1. Acute Health Problems * increasesin average number of reported cases on days with "toxic fog" vs those without, 1986-1987

Day : Correlationof symptoms with air pollution that day Day-1: Correlationof symptomswith air pollutionprevious day Day-2: Correlationof symptomswith air pollutiontwo days previous - 141 -

Annex 2 Page 4 of 4

asthma 107% acute bronchitis 67% flu 26% conjunctivitis 85%

2. Chronic Health Problems * during constructionof industry of Rumanian side (1976-80),asthma incidencewas 407% of national average; after industrywent into operation (1981-1986)it rose to 724% of national average. * gross congenitalmalformations (from hospital neonatal registry) in 1982 - 27.5/1000live births and in 1986 - 39.7/1000 live births

Dimitrovgrad

1. Sample Survey * 100 school children,age 7-14 years, compared with 100 age- matched controls * 50% of children from Dimitrovgradhad decreasedheight, weight, and chest expansionfor their age

* SDirometry - Average FEV 1.0

Age Boys (ml) Girls (ml)

14 Dimitrovgrad 2557 2308 Controls 3342 3169

13 Dimitrovgrad 2344 2050 Controls 2967 2525

12 Dimitrovgrad 2233 1933 Controls 2800 2433

11 Dimitrovgrad 2020 1709 Controls 2360 2082

* Classificationof children'sdevelopment status:

Group Dimitrovgrad Controls

I normal development 18 72

II slight changes 37 20

III chronic, compensated disease 45 8

IV/V chronic disease with loss of function 0 0 -142 - ANNEX 3 Page 1 of 5

The Conditionof the Major Rivers in Bulgarial

The Arda River

1. No populationcenter in the river basin has a treatmentplant. As a result, large sections of the river are polluted by city sewage placing the river in Class III. In addition, mining operations,a flotation factory in Rudozem, and the Lead and Zinc Works in Kurdzhalicontribute to the pollutionof the river by lead, copper, zinc and other heavy metals. However, the measured concentrationof heavy metals was within acceptablelimits.

The Beli Lom/RusenskyLom River

2. All monitored sections are in Class III. The Bely Lom is heavily polluted by effluents (householdand industrial)from the town of Razgrad (the treatmentplant purifies about 50% of wastewater),from the Razgrad Antibiotics Company (a treatmentplant is under construction),and from pig-breedingplants in its water collectors. The Cherny Lom is polluted by effluentsfrom the town of Popovo (no treatment plant despite the presence of heavily polluting industry).

The Danube

3. The Bulgariansection of the river begins from the borderlineriver of Timok, and ends at the town of Silistra;the total length is 470.0 km. The contributionof the tributarieswithin the boundaries of Bulgaria is 154 cubic meters per second, i.e. 2.4% of the average water quality. The average yearly water quantity in.the Bulgariansection grows from 5727 cubic meters per second at Novo Selo to 6,300 m3/see at Silistra. The amount of water from the Danube used by Bulgaria is about 1.0 billionm 3 per year, distributedfor irrigation, power production, industrialwater supply, and drinking and household water supply. The total amount of water drawn from the river for irrigationis some 100 m3/sec, accountingfor 2% of the averageannual run-offof the Danube River. The Kozloduynuclear power stationuses about 150 m3/sec water for cooling,going back to the river at a temperature7-15 C higher. A total of 260 million m3 per year are used for industrialwater supply through direct water intake and from the river terrace, and about 6 m3/sec infiltratedwater are drawn for drinking and householdwater supply.

4. The conditionof surfacewaters is monitoredat 12 points by MOE, MOH and IMH. The hydrochemicalanalyses and the collectionof water samplesfollows establishedmethods and frequency. The monitoringof the qualitativecomposition of the river shows that a large part of the observed indicators along the Bulgarianbank are within the limits of Class III. The only exception is the "undissolvedsolids" indicatorwhich is often outside Class III. The "oils and petroleumproducts" indicatoralso frequentlygoes beyond the standardsdue to accidental contaminationsand floods. Along the length of the river more frequent deviationsare observedby the following indicators:

1/ See also Tables 4-16 in Annex 1, which present informationon the condition of the major rivers in a tabular format. - 143 - ANNEX 3 Page 2 of 5

- dissolvedsubstances: under Nikopol, Svishtov,and Ruse, - cyanide: after the Iskar river flows into the Danube, - iron: under Lom, Kozloduy,Oryachovo, and Ruse, - oxidizability: under Ruse, - hydrogen sulfide:under Lom and Silistra, - ammonia: under Ruse, nitrates:predominantly under Ruse, Tutrakan,and Silistra, - organicpollution: primarilyin the sectionfrom the mouth of Iskar to Svishtov, - oils and petroleumproducts: after Ruse.

5. The quality of the Danube river between the border-linepoints at Novo Selo and Silistra remains largely constant. A slight tendency of an increaseof the organicpollution (phenols), and reducedcontent of heavy metals, with the exceptionof manganese,can be observed at Silistra. Due to the large amount of water in the Bulgariansection of the Danube, the inflowingrivers and the directly dischargedeffluent waters have only a local impact.2 During the last 10-15 years, in almost all Bulgarian tributaries,what is observed is a deteriorationof water quality indicators. The lower flows of those rivers, mainly of the rivers Iskar, Vit, Rusensky Lom, are often outside Class III.

6. In addition to contaminationfrom the tributaries,a smaller share of the pollution of the Danube is due to effluents from population centers, industrialenterprises (predominantly from Ruse and Vidin), and from livestock- breeding farms. Some pollutionis causedby rainwaterrun-off from agricultural fields in the vicinity of the river.3 Transportation(boats) also contributes to the pollution load both with petroleumproducts and by the dumping of solid waste.

The lantra River

7. The main pollutionsources directly dischargingto the lantra are:

- household and industrialeffluents from the town of Gabrovo and Veliko Turnovo (the two municipal treatmentplants purify only about 50% of wastewater); - effluentsfrom the agglomerationof the towns of Byala, Corna Oryachovitsa,Dolna Oryachovitsaand Lyaskovets,and the Gorna OryachovitsaSugar Refinery, where there is no purification plant.

8. The main pollutersof the tributariesof the Iantra river are:

2/ There are substantialdifferences in the qualitativecomposition of the river along the Bulgarian bank, in the midstream and along the Romanian bank. The effect of the tributariesand industrialand householdeffluents can be observed only in a 150-200 meters zone from the Bulgarianbank. iJ/ The seasonalvariation of certainpollutants such as nitrates,ammonia and phosphorusshows that maximumconcentrations coincide with the spring high water (April and May). - 144 - ANNEX 3 Page 3 of 5

- for the Rositsa river: effluentsfrom the towns of Sevlievo and Pavlikeny,where there are no purificationplants; - for the Dryanovska river: effluents from the towns of Dryanovo,Tryavna, Eler.a, Omurtag, Souhindol, Polsky Trambezh, Stazhitsaand Voneshta Voda.

The lantra is also seriouslypolluted by largerpig-breeding farms in Stambolovo, Voynovo, Sevlievo,Bulgarsko Slivovo and Raiko Daskalovo.

9. The Iskar is the largest tributary of the Danube on Bulgarian territory. In its upper flow, above Sofia, the biggest Bulgariandam was built to supply water to the capital city, to industry,and to irrigate the Eastern Sofia fields. River water quality is influencedby intensive industrial and municipal activities in the river basin. A critical part of the basin is the Sofia valley. Effluents from the Sofia sewerage system carry household and industrialwaste. A sewage treatmentplant has been built in Sofia, but not all effluents flow into it due to the incompletenessof the collectors. Some wastewaterflows directlyinto the rivers runningthrough the capitalwhich later join the Iskar River.

10. The major industrialpolluter is the Kremikovtsimetallurgical plant. In spite of tthe installedpurification plants and equipment,the effluentwaters of Kremikovtsi pollute the Lesnovska River, a tributary of the Iskar, with petroleumproducts, cyanide, and iron. Other large industrialpolluters are the Slivnitsaenterprise, the Kostinbrodchemical plants, the Elatsite company,the Eliseinamining enterprise,and enterprisesin the towns of Mezdra, ChervenBryag and Lukovit.

The Kamtchia River

11. There is severepollution in its upper flow from economicactivities in the Targovishte and Shoumen regions. The towns of Shoumen, Preslav, and Targovishtehave no municipal treatmentplant, and most of the existing local treatment facilities of the enterprisesare ineffective. The major chemical pollutants are the chemical works in the town of Smyadovo. The discharge of wastewatersfrom households,industries and pig-breedingfarms into the Kamtchia river resultsin substandardoxygen indicators,suspended particulates of organic and inorganiccharacter, nitrogen compounds,phosphorus compounds. There is a presence,though within the permissibleconcentrations, of heavy metals (copper, lead, zinc, cadmium, iron, manganese, etc).

The Maritza River

12. The river is used for satisfying various needs of households, industries,and irrigationin a rich agriculturalarea. Its river basin hosts 26X of all hydrotechnicalfacilities in the country,severely disrupting the flow of the river. The Maritza is one of the most heavily polluted rivers in Bulgaria. With the exceptionof the city of Plovdiv, the second biggest city in the country, and of the town of Nova Zagora on the Sazlyika river, other populationcenters in the river basin have no treatmentfacilities. Pollution comes from households,livestock breeding and industry. - 145 - ANNEX 3 Page 4 of 5

13. The tributariesof the Maritza--the Topolnitzaand the Luda Yana--are polluted by heavy metals (lead, arsenium,and copper) from the factory in the town of Pirdop, and the mining operations in the area. The Bedechka River is overloaded by biologically polluted waters from households and livestock breeding,by faeces and nitratesfrom industrialenterprises in the town of Stara Zagora and the region. The Sazlika River contributes to the pollution by insolublesubstances from electricpower stations and coal-mining. Due to the severelydisrupted flow of the Maritza river,particularly in the lower sections, strong deviationsof the oxygen regime can be observed in the summer.

The Mesta River

14. The only major river which still meets Class II standards. However, the river is threatenedby wastes from municipalities,industry and livestock breeding. Two of its tributaries,the Razlozhkariver, carrying wastewaters from the town of Razlog, and the Dobrinishkariver, carryinghousehold and industrial wastes from the towns of Bansko and Dobrinishte, are becoming increasingly polluted.

The Qgosta River

15. The Ogosta and its tributariesnear the Mihailovgraddam are polluted with mining wastes. The most importantpollutants are heavy metals and arsenium. Downstream from the Mihailovgraddam river is polluted by household effluents, partiallytreated industrialwastewater, and wastewaterfrom livestock-breeding farms. Only in two places in the river valley--Vratsaand Varshets--have treatmentplants been built for the biologicalpurification of effluentwaters. The major pollutantsof industrialorigin are the chemicalworks at Vratsa and the pulp and paper mill in the town of Mizia.

The Osam RiverX

16. The Osam river is polluted mainly from industrial and household effluentscoming from the towns of Troyan, Lovech and Levski as well as from the Troyan chemicalsand pharmaceuticalsfactory, the Rodopa-Lovechmeat processing plant, the Levski poultryslaughterhouse, and the a wood products factory in the area of the town of Nikopol, all of which still dischargedirectly without any treatment. Despite the recent constructionof a number of local industrial treatmentfacilities in the above-mentionedtowns, there has been no improvement in the quality of the river. Significantcontribution to pollutionin the river basin comes from local pig-breedingfarms, the largestin farm being in Levski.

The Struma River

17. The Struma is among the few rivers in Bulgaria which have large population centers with highly developed industry (Pernik, Radomir) in their upper sections. The major pollutionof the river comes from households,industry and livestock breeding. The Struma is also heavily polluted from its tributaries. The Kiustendilskariver is polluted by effluents from livestock breeding and households, due to the inadequate operation of the Kiustendil treatmentplant. The Jerman river is pollutedby industrialwastewaters from a chemical-pharmaceuticalfactory. Blagoevgrad,a large town with no treatment plant, lies in the GlagoevgradskaBistritsa river valley. Five biological - 146 - ANNEX 3 Page 5 of 5

purificationplants have been built in the Struma river basin to treat effluents of the following towns: Pernik, Radomir, Kiustendil, Stanke Dimitrov, Kocherinovo. The plants do not work at their design capacity.

Th Tundza River

18. The river is used for irrigationof the adjacentagricultural areas, and for industrial and household water supply. A number of hydrotechnical facilitieshave been built in the river basin, leadingto a severe disruptionof the natural flow of the river. The Tundza is heavily polluted by wastes from households,livestock breeding farms and industries. The most polluted sections are after the towns of Kalofer,Kazanluk, lambol, Elhovo. With the exceptionof the town of Sliven,where the treatmentplant does not work at its full capacity, the rest of the towns and villages in the river basin do not have any treatment facilities(the treatmentplant at the town of Kazanlik is nearing completion).

The Vit River

19. Up to the village of Iasen the quality of water in the Vit river is good despite the dischargeof householdand industrialeffluents at the city of Teteven. The main source of pollutiondownstream is the town of Pleven, which dischargessome of its wastewaterdirectly into the Tuchenitsariver (a tributary of the Vit). The oil refinery near Pleven and 13 other industrialenterprises also discharge their effluents, following limited on-site treatment, directly into the river. Pollutionof the Vit at the town of Dolna Mitropolia is due to the effluentsfrom a sugar refinery. A significantdegree of pollutionis also due to livestock-breedingfarms locatedin the Vit river basin. At the point of dischargeof the Vit into the Danube, the followingindiicators do not meet Class II standards: oxidizability,BOD, suspendedmatter, ammonia, hydrogen sulfide. 147 -

fLnne24 Page 1 of 3

Kozloduv - RadiationEffects and Nuclear Safety

Intro-ductLo

1. Bulgaria has only one nuclear power plant, located north of Sophia on the Danube River close to the Romanian border. It consists of six units and with all six units operating,the plant would have 3760 MW of nuclear capacity making it one of the largest nuclear power plants in Eastern Europe. All units are of Soviet design. Units 1-4 are of an older Soviet design, VVER440 version 230, which do not incorporatea number of safety features mandatory in most of the world. Units 5 and 6 do incorporatemodern safety features. The plant has had various operatingproblems, but no major releases of radiation have been officially reported.

RadiationEffects

2. The Instituteof Nuclear Medicine,Radiobiology and Radiation Protection collects informationon the nuclear power plant at Kozloduy. However, it does not have a mandate to take industrialhygiene sampleswithin the plant; only to deal with biologicaleffects on the workers. Apparently,workers are evaluatedboth for exposure to externallyemitting ionizationradiation and also for internal emitters throughwhole body counting. External measurement is done with standard film badges, while whole body counts are done before and after especially risky activitiesto estimate internallyemitted doses. There are approximately2,000 workers at the plant, of whom approximately500 are said to be evaluatedon a routine basis.

3. The average annual exposure to these workers is approximately3 rems of total external and internalradiation. Approximately10 workers with the most exposed jobs may exceed 5 rems per year. Over the past 15 years approximately 10 individualshave had accumulativeradiation doses of greater than 50 rems (average 70 rems). These individualshave apparentlybeen retired. In total, there are 40 to 50 individualswho have been engaged in especiallyhazardous maintenanceand cleanup activitiesin recent years and have been subjected ro genetic studies of lymphocytesin their blood. These individualstended to show chromosome aberrationsbut this was documentedin a purely qualitative way. It should be noted that no study of the leukemiaexperience of present and past workers at the nuclear power plant Liasbeen undertaken.

4. The Institutehas 4 stations along the Danube looking at water and sediments. Three of the stations are upstream from the power plant, one of which is just immediatelyupstream of the outflow. However, the one downstream site is 12 kilometersawayl The reason given is that measurements within 3 kilometers of the outflow are the responsibilityof the plant. Thus, water data from the Instituteof Nuclear Medicine,Radiobiology, and Radiation Protectioncould not possibly be worth very much in evaluating the environmentalimpact of waterborneemissions from the nuclear power station. Despite this shortcoming,it was suggestedthat spillage of radioactive substances into the Danube might be a problem. The storage facilitiesat the power plant are very small so it is possible that there could be occasional - 148-

Annex 4 Page 2 of 3

overflowsinto the river.

5. Air monitoring is done for gamma radiationand neutrons in 3 regions outside the plant. The closest region is a perimeter 3 kilometers from the plant in which nobody lives. The next region extends up to 12 kilometersfrom the plant. Here there are people and monitoringis most intensive. Finally, monitoringoccurs up to 80 kilometersdownwind of the plant. Gamma radiation has been evaluatedtwice yearly since before 1968. Backgroundlevels range from 8 to 16 microroentgensper hour. Apparentlythey have detected no excursionsin 15 years, not even during the accidentsat the plant in 1984 and 1988.

6. In addition, the Institutehas monitored soil, grass, and milk in the inhabited regionsbetween 3 and 12 kilometersfrom the plant. They have monitored for strontium90 and cesium 137, as well as the gamma spectrum. In summary, they have found no elevationsabove background in any of these measurementsfrom 2 years before the openingof the plant until the present.

7. Finally, it should be noted that the Instituteof Nuclear Medicine, Radiobiology,and RadiationProtection did some surveillanceafter the accident at Chernobyl and has some informationon exposures to the country as a whole. Their measurementsshowed that cesium fallout increased approximately100-fold for a few months after the acute episode; subsided,and then increasedagain in the winter.- Since then, there has been evidence of small increasesof cesium in the food supply of approximately2 times the pre-Chernobyllevel. Using various sources, the Institutehas estimated that the average per capita dose in Bulgariawas 0.7 milli-Sievertsin 12 months after the accident. This amounts to about twice the natural annual background dose. In other words, it seemed to be the Institute'sperception that cumulativelifetime exposure to most Bulgariansfrom the accident at Chernobyl would not be epidemiologicallysignificant.

Sa£ety Aspects

8, The Kozloduy nuclear plant has recentlybeen evaluatedby the InternationalAtomic Energy Agency as part of IAEA's program of safety reviews for Soviet designed nuclear reactors. The evaluationindicated that there are significantsafety concerns about the plant, especiallyabout units 1-4. Perhaps the single largest concern about units 1-4 is that the this model of reactor, VVER440 version 230, lacks a number of safety features such as redundant systems for high-pressurecoolant injection,back-up feedwater circuits and.a full scale containmentstructure. These design weaknesses, which units 5 and 6 generallydo not share, significantlyreduce the safety of units 1-4.

9. In ad'ition the IAEA was concernedabout-a number of operational problems at Kozloduy includingthe material conditionof units 1-4, the limited training provided to operators,the quality of normal operatingand emergencyprocedures, management organization, and maintenance. Given the design weaknesses of these units, the safe operationof the plant required that all of these other aspects of the operationof units 1-4 be of very high - 149 -

Annex 4 Page 3 of 3

quality which has not been the case at Kozloduy.

10. These operationalproblems result from a number of factors includinga shortage of foreign exchange. However, the most importantfactor is that the focus at Kozloduy has been on power productionwith safety being a secondary consideration. This focus must be changed and a safety culture must be developed, if the safety of the plant is to be substantiallyimproved.

11. Currently,a number of groups are working with the Bulgarianauthorities to improve the operationsof the Kozloduy plant. These groups include the IAEA, World Associationof Nuclear Operators (W4ANO),EC, Electricitede France and others. It is-expectedthat their interventionwill substantiallyimprove the safety of the plant. However, the basic design weaknesses of the VVER 440 models cannot be overcomewithout a major capital investmentprogram, which would be difficult to justify economically. The Bulgarian governmentshould begin to consider a decommissioningprogram for units 1-4, as soon as alternativesources of electricityare available.

12. The regulatorybody for nuclear power in Bulgaria, the Committeeon the Use of Atomic Energy for Peaceful Purposes,must'be strengthened. The plant inspectionsby this body do not appear to have identifiedmany of the major deficienciesat Kozloduy nor to have caused them to be corrected. While this may be due to the importanceof the Kozloduy plant for Bulgaria'selectric supplies (about 35% of Bulgaria'selectricity output), it is still unacceptable. The inspectorsat the Committeehave to be given increased authority to make recommendationsand see that they are implementedwith no undue delays. This will still be the case even if units 1-4 are decommissioned,since decommissioningwill take time and in any case units 5 and 6 will probably still be operating. - 150 - Annex 5 Page 1 of 5

The Coastal Zone of Bulgaria and EnvironmentalProblems of the Black Sea

A. Descriptionof the Coastal Zone

1. Geograph. The Black Sea coast of Bulgariaextends for 378 kilometersfrom the Romanian border in the north to the border with Turkey, at Rezovo in the south. The coastline is characterizedby relativelylow (5-50 meters) and some high (100-120 meters) rocky cliffs, interspersedfrequently by sandy beaches. The rocky coast covers about 50 percentof the coastline,beaches and sandy dune fields about 40 percent, while the remainingconsist of landslideand erosion areas. The beaches, ranging in size from a few hundred meters to 12-15 kilometers,form the focal point and principal attraction for tourism in the area. A sizeableportion of coastal areas (596 of 1315 ha.) have been declared protected. The mean annual values of wash-awayvary between 0.1 to 3.0 meters in differentparts of the coast and it is estimatedthat the sea takes away about 6 ha per year.

2. Two major bays, at Varna and Burgas,are the sites of Bulgaria'sprincipal ports. There are no large estuarinesystems. Several rivers of moderate size, including the Provadijska,Kamcija and Veleka, drain the coastal plateau and coastal plain. Upland drainage into the bays at Varna and Burgas is through large lakes just inland of the shore. River flows are irregularand relatively slow at the coast.

3. Coniferousforests dominate the higher coastalcliffs. Mixed hardwoodsand sub-tropicalundergrowth are predominantnear the river mouths and close to the sea.

4. The coast line is in the jurisdiction of two administrativeregions (oblast), Varna in the north and Burgas in the south. For planning and administrativepurposes, however, the 'coastalzone" has been definedby central authorities1 as the territoryof 17 municipalities(obshtini). This definition was derivedfrom a study of the so-called"active zone" of tourismpriority, 1-5 km inland from the beach, togetherwith areas within a 20-30 km "hinterland", reflecting the zone of influence of the sea and appurtenant infrastructure relationships. The boundarieshave been drawn to coincide with the municipal boundaries in which the factors that characterize the coastal zone are represented.

5. The pogulation of the defined coastal zone is approximately 758,000, representing8.4% of the populationof Bulgaria. The area is considerablymore densely settled than is the nation, on average. Most of this populationdensity is representedin the two principalmunicipalities of Varna and Burgas.with the intervening territory being generally low-density agricultural and forestry areas. Populationsare not dispersed- the villages as well as the major towns are contained and well-defined. Isolated rural housing is infrequent and scattered. Although largertowns are growingat the expenseof smallervillages, the region shows a populationgrowth rate of nearly 2% per year, significantly

1 The National Center for Regional Developmentand Architecture. - 151 - Annex 5 Page 2 of 5

higher than that of Bulgaria's slightly negative growth rate. It is inferred that this growth is largely from internalmigration.

6. IndustrialemDloyment indicates that industryis the major economicfactor in the coastal zone. More than one-thirdof the labor force is classified as industrial. Principal industries include oil refining and petrochemicals, agriculturalchemicals, ferrous and non-ferrousmetals, machinery manufacturing, and cement production. The impact of this sector is fairly evenly distributed throughout the coast in terms of percentages, but in numbers, industrial employment is largely concentratedin major complexes near the larger towns. Retail trade, includingtourism, is the second most importanteconomic factor. Tourism, too, is concentratedin plannedcomplexes on and near the coast. 12 of the 17 municipalitieshave significantnumbers of tourist accommodations.

7. Tourism has been identifiedas a priority for economic expansion in the coastal zone. A number of tourismcomplexes have been designedand built in the 1960's and 1970's, and the importanceof tourism to the regional and national economy is indicated by the some 3,000,000 annual visitors. International tourism in the coastal zone provides two-thirds of tourisms' hard currency revenues in the nationalaccounts. Trends in touristvisitation, however, show a decline, stemming from current economic and political instabilityand from a longer-termdeterioration in the quality of accommodationsand service. Less than adequate transportation,communication and sanitation infrastructurealso affect visitationadversely.

8. The two major ports at Varna and Burgas are important factors in the economy of the coastal zone and of Bulgaria. Forestry, agriculture and construction (including ship building) are prominent economic sectors. The transportationand communicationsector benefits from tourism activity and from the ports employment. Rail lines connect the ports with each other and with the interior. Major airports serve domestic and internationalpassengers at Varna and Burgas.

B. The Black Sea2

9. The Black Sea is the largest continental (inland) sea in the world, covering an area of some 424,000 km2 (approximately164,000 square miles). Depths range up to 100 meters over the continentalshelf, and in the Sea to a maximum depth of 2200 meters (7200 feet). It is bordered on the south by Turkey, on the west by Bulgariaand Romania, on the north by Ukraine and on the east by Russia and Georgia. Although annual evaporation loss is greater than precipitation,the Black Sea exhibits much lower salinity than do the oceans. This is attributed to the large annual riverine inflow (see below). Another anomalouscharacteristic of the Black Sea is the presence of a lower stratum of hydrogen sulfide (H2S) saturatedwater, which dominatesthe ecology of the Sea at depths below 200 meters. Because of this phenomenon,90% of the water mass

2 An InternationalWorkshop on the Black Sea, sponsoredby the Bulgarian Institute of Oceanology,was held at Varna 30 September-4October 1991. The proceedingsof this symposium should provide more substantialtechnical data, albeit limited to the western continentalshelf area. -152- Annex 5 Page 3 of 5

of the Sea is inimical to most life forms, supportingonly anaerobicbacteria. 3

10. Tourism. Black Sea coastal areas offer importanttourist attractionsin each of the littoral states. The long, mild summer climates,relatively gentle seas and extensive, attractive beaches have drawn visitors from afar for centuries. Much evidenceof past civilizationsremains, and is preservedin the structureand cultureof the smaller coastalcommunities. Well known areas such as southernCrimea and in the southeasterncorner of the Sea have long been used as holiday and health resorts. In Bulgaria, tourism has been recognized as a factor in the nationaleconomy since the mid-1950's. From the beginning,tourism developmenthas been principallyoriented to the Black Sea coast.

11. Fishing. Three species of fish; anchovy, sprat and horse mackeral, comprise the major commercial catch in the Black Sea. These three species represented91% of the total fish catch in the Sea in 1980. Studies show that fishing yields showed a moderate steady increase in tonrage from 1971 to 1978, and a sharp increase in catch in the period 1979-86. These same studies indicatedthat the importantspecies were alreadyat high levels of exploitation in 1980.4 The early 1980's witnessed increases in the "efficiency"of fishing gear in all of the littoralstates, major increasesin tonnageof catch recorded by the USSR and Turkey, and a rapid escalationof total tonnage caught by all of the Black Sea nations.

12. A sharp decline in fish catch started in 1986-87, and has subsequently accelerated, This declineappears to have affectedall of the Black Sea nations' fisheries,but in somewhat differentdegree and at differenttimes, because of the varying emphasis on different species. For example, the catch of sprat, which is the most importantspecies for Bulgaria,dropped from a high of 19,000 tons in 1981 to 2,600 tons in 1990.5 Similardeclines were reportedby Romania. Significantincreases in anchovycatch by the USSR and Turkey in the early 1980's have been reversed,with reportedlyprecipitous declines in 1990 and 1991.

13. Despite an effort at internationalregulation, it is apparent that the fisherieswere substantiallyover-exploited in the 1980's. These reducedstocks were concurrentlyimpacted by an exponentialincrease in water pollution levels (see below), which particularlyaffected the spawninggro"nds of the important commercialspecies. The result is decimationof the importantfisheries of the Black Sea, almost to the point of total collapse.

14. Pollution. Eutrophicationis a state of excessivelyhigh concentrations

3 G. Detchev: The EcologicalState of the Black Sea. Topical Problems of Scionce, Bulletin No. 8, BulgarianAcademy of Sciences,Sofia, 1990.

4 L. Ivanov and R.J.H. Beverton, The Fisheries Resources of the Mediterranean,Part Two: Black Sea. United Nations/FAO,Rome, 1985.

s Sprat (sprattus sprattus) normally makes up 95% of the Bulgarian commercialcatch. Annual domesticconsumption of fish, formerly12-33 kg/capita, has dropped to 4-6 kg/capita. (Source: interview with Dr. Peter Kolarov, Instituteof Fisheries,Varna.) - 153 - Annex 5 Page 4 of 5

of nutrients in water bodies. Detectablein Black Sea waters in the 1960's, it has become more visible in the form of algal blooms over the past two decades. The incidenceand duration of these blooms has increasedsteadily and rapidly from the early 1970's to date. *The cause is the increasingconcentration of nutrientpollutants (nitrogenand phosphoruscompounds) flowing from the rivers in the northwestquadrant of the Sea. Similar less extensiveincidents of algal blooms have been evident in localized polluted areas on the Bulgarian coast, particularlyBurgas Bay. The-adverse impacts of eutrophicationinclude major changes in the composition of biota in the northwestern Black Sea and off Bulgarianshores. Since all of the commerciallyimportant fish species spawn in these same waters,the correlationbetween increasedpollution and sharp declines in fisheriesis apparent.

15. The major source of water inflow (and pollutants)is from the large rivers in the northwesternand northern quadrantsof the Black Sea. As an example of the pollutantload in these inflows,total nitrogenand phosphorusloads measured near the Danube delta are in the neighborhoodof 280 tons each day.6 The recently completedcanal between Cerna Voda and Constantain Romania diverts a significantamount of river flow away from the naturalfiltration afforded by the Danube delta, and discharges directly to the Sea. To this must be added the estimated 290 km3/year inflow from the lower "heavy water" back current in the Bosphorus,whieh is believed to carry a large pollutantload from dischargesinto the Sea of Marmara from Istanbul and vicinity.

16. Bulgarian coastal sources discharge an estimated 650,000 m3/day of wastewater into the Black Sea. Of this, only 31% is fully treated, and that to secondarystandards only. The pollutantload from Bulgariancoastal sources is dwarfed by the 800+ million m3 daily inflow from the rivers in the northwest quedrantof the Black Sea (Danube,Dniestr, Dnepr). It has been estimatedthat these rivers contribute 75-80% of the total pollution affectingthe Sea. This report does not includedata on land-basedsource dischargesfrom other nations borderingthe Black Sea, but it can be assumed that these will contributeto the pollution load in proportionto the coastal zone populationsof those nations.

17. Oil dischargesfrom shipping are common. Reportedly,Romanian vessels on the Istanbul-Constantaoil transportroute lack controls. Systems for cleaning ballast water and bilge water are minimal. There is a major potential for damaging oil spills in and near the port at Burgas.

18. Multilateralagreements. The Conventionon Fishing in the Black Sea was implementedin 1959, by and between the Governmentsof Bulgaria,Romania and the USSR. A Joint Commission, which meets every two years, is responsible for recommendingrules for considerationby each of the signatory states. Rules which have been adopted subsequentlycover minimum size of fish landed, total

6 P.H.L. Buijs: EnvironmentalManagement Program for the Danube River Basin. Working Group III Background Paper, InternationalCenter of Water Studies, Sofia, 1991.

3 7 Ivanov estimated 805 million m /day, Detchev estimates 830 million m3/day. - 154 - Annex 5 Page 5 of 5

prohibition of a few selected species (dolphin, turbot), and some modest limitationson fishing gear. The literatureavailable shows no evidence of any quotas for total catch, and there is reason to questibn the effectivenessof enforcementof even the minimal regulationsin effect. Turkey, which annually shows the largestvolumn of commercialfish catch of any of the Black Sea states, is not a signatoryto the Convention. Recent precipitousdeclines in the anchovy stocks, which are of first importanceto Turkey, may provide an incentive for their participationin a regulatoryprogram for the Black Sea.

19. The nationsof Bulgaria,Romania, Turkey, Ukraine and Russia have indicated their intent to enter into an internationalagreement On the Protectionof the Black Sea. Discussionshave been delayed by political changes in the former USSR. The intent of the Conventionis to establisha cooperativeinstitution, through which to address the pollution problems affecting the Black Sea. If effectively implementedthe Convention could establish uniform standards for abatement of pollution from specifiedhazardous and noxious substances,land- based sources, vessels, oil spills, ocean dumping, minerals extraction, and atmospheric contaminants. Articles are included dealing with marine life (includingfish) and trans-boundarytransport of hazardouswastes. Cooperative research,monitoring and informationtransfer is contemplated.

20. Summar. The magnitudeof environmentalproblems affectingthe Black Sea are beyond the capacity of Bulgaria or any other of the littoral nations to correct. Only a multi-lateral,international response will adequately address what is apparentlyan imminent ecologicaldisaster. The prospectiveConvention on the Protectionof the Black Sea can provide an institutionalframework for developmentof a concertedaction plan to address these problems.

21. Immediate responsive action should be initiated, with financial and technical assistance from internationaldonor institutionsand donor states. This should be in the form of direct action programs. Additional research and m*nitoringwill be desirable,but there is already enough informationavailable from which to derive effectiveplans for correctiveaction. - 155 - Annex 6 Page 1 of 1

The Iofact g Coal Mining Qgerationa on Land Resources

1. The three Maritza EaLstlignite mines produce about 25 million tons of lignite annually and have used 13,000 ha land so far (productionin the first mine begun in 1961). 3,000 ha of that land has been recultivated. It is estimated that altogether33,000 ha land will need to be disturbedto extract all miueable resources. The agriculturalland covering the lignite deposit is of outstandingquality. At the current rate of production,about 300 ha additionalland is needed annually. Up to now, about 5,000 people in five villageshad to be resettled. All resettlementand land acquisitioncosts were covered by the centraLlgovernment. The agriculturalcooperatives operatingin the area were not compensatedfor the agriculturalland, however, during the last year the mines paid about 1,000 lv/ha under an informal arrangementfor the additionalland acquired. Under current regulationsthe mines will have to pay 400,000 leva/ha (more than 20,000 $/ha) for first class agriculturalland.

2. Based on a short visit to a recultivatedarea (which may or may not be representative),the quality of recultivatedland appears only slightly lower than that of non-disturbedland in the area. In the opinion of the mines, the only problem experiencedby the cooperativesis related to irrigation:the higher elevation of reclaimed land makes irrigationfrom surface waters more difficult. The mines currentlyplan to recultivate150-200 ha land annually, however, the possibilityof selling recultivatedland at market prices may lead to a revision and a bhigherannual target. Similarly, the extremelyhigh cost of additionalland acquisitionunder the new regulationsmay lead to a more economic use of land. For example,until now about 60 percent of the removed overburdenhas been dumped outside the mines covering 6,000 ha valuable arable land. This could partly be the result of the previous arrangementwhereby the cost of land acquisitionwas effectivelyzero for the mines.

3. The Maritza open-pits employ relativelyold and conservativetechnology, characterizedby the widespread use of railway transportin the pits and relativelysmall equipment. Equipmentutilization and personnel productivity are below internationalstandards. Land use for dumping of overburden is extensive. To secure the production level, or to increase it to the extent needed while keeping production costs low, it appears that in the long-run an extensivemodernization of the operationsis required. This would include the conversion from railway to conveyor transportand the introductionof larger and more performing equipment. With the introductionof more conveyor transport,an effort should be made to shorten transportdistances by making more use of overburdendumping inside the pits. This would also have the benefit of utilizing less land for overburdendumping.

4. A very different case is the Bobov Dol open pit coal mine. The mine had a large impact on the landlscapebut most of the land used is in a mountainous area and only a portion had been previouslycultivated. Reclamationactivites have had a negligible impact up to now and, aftex depletionof the resource, full restorationwill be quite costly if not impossibledue to the depth of the open pit (150 meter in some places). The pit might be converted into a lake, but this would need to be further investigatedbefore the mine closes. - 156 -

Annex Z Page 1 of 11

The Impact of EconomicReform on Emissions

1. This annex examines the implicationsof the economic reforms which are being implementedin Bulgaria on the nature and amount of emissions from industrialand other economic activities. Since a large fraction of emissions come from a small number of industrialsectors - notably, electricity generation,metallurgy and building materialsfor air pollutants;paper & pulp, textiles and food processingfor organic effluent dischargedinto waterways - the overall level and compositionof industrialproduction has an important impact on pollution levels.

2. It has often been suggestedthat the relativelyhigh levels of emissions in socialistcountries are linked to their emphasis on industrialproduction and the importanceof heavy industrialsectors such as metallurgyand engineering. This would imply that structuralchanges brought about by reform programmesmight reduce levels of emissionssubstantially without any specific policies targeted at improvingenvironmental conditions. To investigatethis possibilitya model which projects industrialemissions has been constructed for Bulgaria up until the end of the decade. The model is based upon input- output data combined with informationon the emission of various pollutants per unit of fuel consumptionor per unit of output by sector.

3. Many factors are likely to influenceindustrial emissions over the next ten years. This analysiswill focus on four of the most importantsources of change :

A. Until recently Bulgariahas maintainedenergy prices which are well below those charged in Western Europe.11 A move from low energy prices to a level and structureof energy prices similar to those prevailingin Western Europe would reduce energy consumptionand thus the emission of all energy-relatedpollutants. Further, though smaller, adjustments would follow as the compositionof productionand consumptionadjust to a new set of relative prices reflectingthe higher domestic cost of energy.

B. The stabilizationprogramme which has been implementedin Bulgaria has led to a large short term decline in total industrialproduction combined with a shift in the compositionof final expenditureaway from governmentconsumption and investmenttowards private consumptionand exports. The scale of the macroeconomicadjustments which will persist over the next few year has a significanteffect on total emissions.

C. A long term process of industrialrestructuring is occurring in Bulgaria in response to changing trade relationswith the Soviet Union and Western Europe. The ultimate shape of the industrialsector cannot be forecast with any confidencesince a whole variety of factors may play

I/ See Figures 10-12 in Hughes, G.A., 1991, 'The energy sector and problems of energy policy in Eastern Europe', Oxford Review of Economic Policy, Vol 7, No 2, pp. 77-98. 157 -

Annex 7 Page 2 of 11

an importantrole in determiningthe changeswhich occur. To put the analysis.ona systematicbasis it is based on some work on industrial competitivenessin several East European industrywhich provides a comparativeassessment of the industriesthat are likely to expand or contract in the light of availabledata on their recent economic 1 performance.2 Industries- aggregatedinto sectors according to the 3 digit ISIC classification- are ranked in terms of their competitiveness as measured by their domestic resourcescosts of production,which is calculatedas the ratio of their value-addedat domestic prices to their value-addedat world prices. It is assumed that resourceswill be transferredfrom the least competitivesectors to the most competitive sectors such that the sectors accountingfor the least competitive20% of output contractby 50% while the sectors accounting for the next 20% of output contractby 25%. At the other end of the scale the sectors accounting for the most competitive20% of output are assumed to grow by 50% and those in the next quintile grow by 25%. Of course, the outcome will not be as neat as these assumptionsimply, but they provide a reasonablebasis for comparingthe impact of industrialrestructuring on total emissions across several countries.

D. One of the reasons for the poor environmentalperformance of the industrialsector throughoutEastern Europe is that it is stuck in a time warp of 1950s or 1960s technology. There are few signs of the impact on the nature of industrialinvestment that the energy price rises and environmentallegislation of the 1970s had in all West European economies. Simply by installingmodern capital equipmentand followingWestern operatingprocedures it should be possible to achieve substantialreductions in average emissionsper unit of output or per unit of energy consumption. This will take time and will depend on a recovery in the overall level of investment,so it has been assumed that technologicalreductions in emissionscoefficients will occur steadily over a period of 10 years from 1995. The projected declines in emissions coefficientsare based on a wide range of specific information about the current environmentalperformance of East European industries as compared with their Western counterparts.

4. The assumed changes in energy prices are those that would have been required to move from their actual level in 1988 - the year for which the input-outputtable was constructed- to the average values for the OECD European countries in the same year. The comparisonswere based on official exchange rates because any attempt to estimate shadow or equilibriumexchange rates would have run into the problem of the interdependencebetween the level of energy prices and the exchange rate due to the importanceof distorted energy prices in the Bulgarianeconomy. The increases in the energy prices to be paid by the industrialsector ranged from 18% for petroleumproducts to

1/ See Hughes, G.A. & P.G. Hare, 1992, 'Industrialrestructuring in Eastern Europe : policies and prospects',European Economic Review, forthcoming. -158-

Annex 7 Page 3 of 11

174% for coal. For householdsthe rises are even steeper with increases from 75% for petroleumproducts to 410X';forelectricity and heat.

5. The macroeconomicassumptions show.a prolonged recessionrelative to the (possiblyinflated) figures' for the base year of 1989. Bulgaria has experiencedan extremelysharp fall in GDP as a result of the economic crisis in 1990 followed by its recent stabilisationprogramme. National income is likely to recover only slowly'overthe next 2-3 years, so that it has been assumed that GDP in 1995 will be no more than 80% of its base level. By 2000 it should have recoveredto about 105% of base'levelwith a substantial increase in the share of private consumptionand exports relative to the other componentsof final demand.

6. The calibrationof any detailed economic/environmentalmodel presents substantialproblems of model specificationand data. It is particularly difficult to obtain reliableemissions coefficients for any single country in Eastern Europe (or indeed Western Europe). The estimatedaggregate emissions of particulates,SO 2 and NOx for the base year are within a reasonablerange of the estimates-publishedby-national authorities, but even such a simple cross check is impossiblefor water pollutantsor solid waste. Industrial emissions of BOD and suspended.solidsprobably account for no more than 25% of total emissions,so that changes outside the industrialsector will be the primary determinantsof the evolutionof water quality. Such changes are even more difficult to project than those arising from shifts in the composition and level of industrialproduction. All these caveats imply that the margins of error in the projectionsof total emissionsare-quite large. However, the errors in the projectionsof changes in aggregateemissions are.much smaller, so that the annex focuseson these in reportingthe results of the two country models.

7. The critical parametersin the model are the price elasticitiesof energy use in the various sectors of the economy. Energy economistshave little experiencein attemptingto forecast the impact of real energy price increasesas large as those impliedby the shift to West Europeanprices in Bulgaria. In any case the governmenthas been'reluctantto increase energy prices too rapidly, so that it is likely that the transitionwill last until 1993 or 1994. As a result the price elasticitiesof energy demand have been chosen to be relativelyconservative.' The model works in terms of a response to the aggregatereal price of energy for each sector, that is a weighted index of the separate fuel prices, plus an inter-fuelsubstitution model which determinesthe share of each fuel in the sector's total energy consumption. For the main projectionsit is assumed that.theprice elasticityof total energy consumptionwith respect to changes in the real price of energy'is - 0.15 for the industrialsector over the period 1989-95and -0.25 over 1989- 2000. The price elasticitiesfor the householdare -0.05 and -0.15 respectivelybecause their real price increases.aremuch larger. The assumed elasticitiesare based on the results of analyzingdata for a sample of countriesover the period 1978-88.11 They are also consistentwith the

}V See Hughes (1991). -159-

Annex 7 Page 4 of 11

typical results of estimatingmodels of industrialenergy demand for the OECD countries subject to the modification'thatthe period of short run adjustment has been extended from 1 year to 3-4 years. The low response projectionsare based on the assumptionthat the real price elasticityto 1995 is only -0.05 and that it is -0.15 to 2000.

8. Figure Al shows the projected levels of emissionsof four major air pollutants - particulates,sulphur'dioxide, NOx and metal dust - plus total emissions of carbon dioxide due to the burning of fossil fuels for 1995 and 2000. Emissionsof sulphur dioxide fall very substantiallyup to 1995 because the lignite fired power stations account for a large share of marginal electricityproduction and there is a substantialdecline in aggregate electricitydemand. The downward trend in S02 is sustained in the later period by a combinationof fuel switchingfrom coal towards gas plus a reduction in the average emission of 302 per unit of coal consumptiondue to changes in the quality of coal used comDinedwith better emission controls. Total emissionsof particulatesare also *reducedto less than 30% of their 1989 by 2000 but the decline is greater in the 1995-2000period because it results from a combinationof fuel substitution- again from coal to gas - in the industrialand household sectors as well as better emissions controls. These factors take time to operate, but eventuallythey have a very substantialimpact on particulateemissions. NOx and carbon dioxide emissions stabilizeor increase slightly after 1995 because the effects of fuel substitutionand emissionscontrols are relativelyweaker. In consequencethe growth in vehicle use associated with renewed economic growth offsets reduced emissions from the electricityand industrialsectors. The decline in metal dust emissionsafter 1995 is primarily due to better emissionscontrols, though there should be little difficulty in meeting the assumed target of a 50% reduction in emissionsper unit of output in the metallurgicaland related sectors.

9. Figure A2 illustratesthe implicationsof assuming a very limited response to the increasesin energy prices. The initial falls in emissionsof particulates,SO 2, NOx and carbon dioxide are still significantbut levels of particulateand SO2 emissionsin 2000 are well above those which can be achieved with higher energy price elasticitieswhile emissionsof carbon dioxide rise quite strongly after 1995. The implicationof these two sets of projectionsis both simple.andvery important. For the main diffuse air pollutants thzicrucial instrumentsof environmentalpolicy are a combination of energy prices and whatever inicentivesare required to ensure a rapid response to higher energy prices.

10. The results of the projectionsfor water pollutionshown in Figure A3 are much less encouraging. There is little prospect of a significant improvementin emissionsof waste water or BOD prior to 1995 and it is improvementsin emission controls which lead to the reductions in emissions during the later period. The situation is rather better for dissolved salts because these are primarilydischarged from coal/lignitemines and a small number of heavy industrialplants. In terms'of the model the problem for the other water pollutantsts that there is no instrumentwhich can influence dischargesin the way that energy prices affect air pollution. Levying water -160-

Annex 7 Page 5 of 11 charges to reflect the full marginal cost of water supplieswould reduce water consumptionbut it might even worsen water pollutionby encouraging enterprisesto dischargeeffluent with higher concentrationsof pollutants. The obvious solution is to increase the level of pollution charges on all discharges of water pollutantsbut this raises a variety of institutionaland other issues which are covered elsewherein this report.

11. There is an overall decline of 13% in solid waste emissionsup to 1995 and a further fall to 69% of the 1989 level by 2000. In the longer term solid waste is an example of the difficultyof eliminatingrather than changing the character of residuals. If it is decided to installflue gas desulphurisation equipment on new coal-firedpower stations,this will reduce emissionsof sulphur dioxide at the cost of generatingquite large quantitiesof calcium sulphate from the limestone.usedby the desulphurisationplant. Even a simple measure such as coal washing results in the substitutionof air pollution in the form of particulatesand SO2 by increasedvolumes of waste water and solid waste. The conversion is generallystraightforward to justify in economic and environmentalterms, but the example illustratesthe difficultyof forecasting future emissionswhen they are so closely linked.

12. Some of the reasons for the very differentreductions in the aggregate emissionsof various pollutantsup to 1995 have already been discussed. Figure A4 illustratesthe contributionof the first three factors outlined above to the changes plotted in Figure Al. For each pollutant the bars show the cumulative contributionof : (a) higher energy prices; (b) higher energy prices plus macro-economicchanges; and (c) higher energy prices, macro- economic changes and industrialrestructuring. As noted, it is energy prices which account for most of the reduction in emissionsof particulatesand SO2. For metal dust a reductionof nearly 30% in emissionsdue to the macro- economic changes is entirely offset by the impact of industrialrestructuring. More generally,for all of the main pollutantsthe effect of the assumed pattern of industrialrestructuring is to increase levels of emissionsand to worsen environmentalproblems. This implies that it is necessary to move raRidly to introduceeconomic incentiveswhich will reinforcethe impact of higher energy prices on emissionsbefore too many resourcesare transferredto industrieswhich are apparently internationallycompetitive but whose social profitabilitymay be low because of the environmentaldamage that they cause. One approach would be to require-thatthe industriesimplement more effective emission controls as a conditionfor being allowed to expand their production from the depressed levels relative to 1989 to which they have fallen as a result of the current recession. However, the most efficient approach would be to ensure that all industriespay pollutioncharges which fully reflect the damage caused by emissionsof the various residualswhich they produce. This would allow potential investorsand the governmentto assess the competitivenessof differentsectors in a manner that takes full account of the social costs of environmentalexternalities across industries.

13. Overall, this analysis of the impact of economic reform on aggregate emissionssuggests that the main problems of air pollutionwill be substantiallysolved by the energy pticing policies that are already being adopted togetherwith relatively low cost investmentsin better emission - 161 -

Annex 7 Page 6 of 11

controls. The emphasis in environmentalpolicy must then shift towards problems of water pollution which cannot be dealt with as easily as air pollution. Since the costs of environmentaldamage caused by current pollution are dominated by the health and material costs of air pollution while higher energy prices are in any case desirableon simple grounds of economic efficiency,the sequence of tackling air pollutionbefore water pollution is easily justified in terms of their relative costs and benefits.

14. It is likely that tlheprojections underestimate the full effect of higher energy prices on emissionsof air pollutants, In the OECD economies the two oil price ahocks made a significantfraction of the total c-apital stock obsolescentbecause it was ill-adaptedto the new set of relative factor and resource prices. This capital was graduallyreplaced by new equipment which was both more energy efficientand was designed to.meetmuch higher environmentalstandards. The general process of capital replacementand upgrading in response to higher energy.prices should lead to a significant reduction in all emissionson top of the gains due to improvementsin energy efficiency. However, lower emissionsdo not depend upon substantialcapital investment. Energy conservationand reductionsin emissionscan often be the result of simple 'good housekeeping'- better maintenanceand operating practices designed to minimize the use of energy and amount of pollution created rather than to achieve target levels of production irrespectiveof the costs and waste involved. The gains from such improvementscan be realized quite quickly if the incentivesare large enough, so that a speedy adjustment of energy prices should stimulateimmediate progress towards the goal of reducing emissions.

15. In the longer term the combined effects of higher energy prices and an effectivesystem of environmentalcharges will push up the relative prices of the goods produced by energy intensiveand polluting industries. This should mitigate any adverse effects that industrialrestructuring may have on the level of emissions. The combined impact of changes in relative prices, industrialefficiency and industrialstructural changes after 1995 cannot be forecastbecause of the complexity of the economic factors which will determinethe relative growth rates of specific industries. If the OECD experience is a reliable guide, it may be expected that there will be a 2radualdecline in the relative size of heavy industriessuch as steel. engineeringand heLaY chemicalswhich will be offeet by faster growth in electronies.light chemicalsand all services. Such changes will strengthen the general tendency towards a reductionin both energy use and in the emission of most pollutants. Similarly,the stimulus to higher levels of energy efficiency in 'thetransport sector should reduce the rate of growth of emissionsfrom mobile sources.

16. Changes In the pricing of natural resourceswill operate in the same directionas higher energy,prices in stimulatingenterprises to reduce natural resource inputs per unit of output and thus to reduce the level of emissions into the air or into waterways. Both the producers and the consumersof metals and other'naturalresources will have an incentiveto reduce their losses in the form of mine tailings,dust and other wastes if natural resourcesare consistentlypriced'on a basis that reflects their value in - 162 -

Annex 7 Page 7 of 11 world markets. Further, if mines and other extractiveenterprises are required to pay environmentalcharges which take account of the social costs of their dischargesof solid and other wastes, then mining and smelting operationswill be modified to make more efficientuse of the reserves and to reduce the volume and potential toxicityof any wastes that are produced. For example, the establishmentof appropriateprice differentialsbetween coals with differentash contentswill provide a substantialincentive for the mines to alter their mining techniquesin order to concentrateon the higher quality seams and to reduce the ash content of the coal that they sell. Similarly,an increase in domestic prices for metals ane.other natural resource products will encourage industrieswhich use them to modify their productionprocesses in order to reduce emissionsof dust and dischargesinto waterways. Anr.ex 7 -163 - Pager8of 11 Figure Al - Emissionsof Air Pollutants (Indices of Aggregate Emissionswith 1989 = 100)

Index of Emissions 120

10 D

60 ......

4 0 ......

20 ......

0 1989 1995 2000 Year

- Particulates + S02 * NOx - Carbon - Metal Dust Annex7 - 164 - Page 9 of 11 Figure A2 Emissions of Air Pollutants Low Price Response (Indices of Aggregate Emissions with 1989=100)

Index of Emissions 120

100 ,...e*...... -v._......

40 ......

20 ......

0 1989 1995 2000 Year

Particulates +i S02 * NOx - Carbon f Metal Dust Annex 7 - 165 - Page 10 of 11 Figure A3 - Emissions of Water and Other Pollutants (Indices of Aggregate Emissions twith 1 989 = 1 00)

Index of Emissions 120

80!o . .., ......

40.

20 ......

01 1989 1995 2000 Year

-1BO1D + Dissolved Salts *Waste Water 4-Solid Waste FigureA4 - Sourcesof ReducedEmissions up to 1995 (Declinein emissionsas % of 1989 level)

% Decline 50

-10 Particulates S02 Metal Dust BOD Diss Salts Waste Water Solid Waste Pollutant MAEM [Mc A. Impact of higher energy prices alone B. A + macro-economicstabilisation C. B + industrialrestructuring - 167 -

Arnex 8 Page 1 of 4

Environmentalaudits and services in Bulgaria

No-Cast and Low-Cost PollutionPrevention

1. On a demonstrationbasis with funding from USAID, consultants from the InternationalResources Group (IRG) and Bulgarian counterpartsfrom both the public and the private sectors performed energy audits and helped initiateno- cost/low-costenergy efficiencyimprovement programs in eight plants throughout Bulgaria. These plants includedboth heavy industry (KremikovtsiSteel Mill, Polychim soda ash plant, Himco ammonia and urea plant, and "Pharmacia" pharmaceuticalsplant) and medium-scaleindustry (Serdika milk plant outside Sofia, a cotton textilemill, a ceramics plant, and a poultry slaughterhouse). Team members in most cases also addressedin-plant environmental "housekeeping" and worker practices.

2. The teams generallyfound strong interest at the plant manager lLvel in using both energy and materialsmore efficientlybut little awarenessof specific opportunitiesand an almost total lack of the measuringequipment which would be necessary to identifyopportunities to increase energy and materials use or to improve environmentalmanagement. Where plant managementhad taken action, in most cases it had adopted capital-intensivesolutions (for example,waste heat recovery at Kremikovtsi)and ignored or not recognized no-cost and low-cost opportunities.

3. While opportunitiesvaried by enterprise,by far the most widespread and productiveenergy efficiency improvementopportunity was found to be use of oxygen analysis or stack gas analysis instruments to improve combustion efficiency. Energy savingspaybacks for such instrumentsin most plants was less than six months. It happens that such instruments,combined with train,ng in their proper use, also have a substantialenvironmental berefit both within the plant (reducedemissions due to lower fuel use and improvedcombustion control) and, in the case of domestic coal, in terms of reduced mining impacts.

4. The teams concludedthat there was both a need and demand for assistance in identifyingsuch opportunities. As evidence,since the demonstrationaudits were completed,the Energy Inspectorateof the Committeeon Energy has initiated energy audits, using the equipment and methodology used for the eight demonstrationplants, in roughly a dozen additional enterprises,all at the request of the enterpriseitself. It says it has received additionalrequests but cannot do more because of lack of equipment and lack of qualified staff. IRO's local private sector subcontractor has signed contracts with six enterprisesin just one mid-sizedcity outsideSofia whereby the exiterpriseswill pay for audits and for implementationof energy efficiency improvementmeasures including especially improved boiler operations and maintenance. The subcontractorbelieves it could sign a number of additional contracts but currentlyhas stoppedfurther marketing until it can complete these assignments successfully, secure additional equipment, and recruit and train additional staff. - 168 -

Annex 8 Page 2 of 4

5. The eight plants included in the initial AID program did not have the capabilltyto recognizeand implementenergy efficiencymeasures by themselves. They lackedan effectiveenergy accountingsystem (or an effectivecostaccounting system, period), basic instrumentation for measuring energy flows, and instrumentsfor controllingenergy use (e.g.,boiler controls). Also, with some exceptions,most responsiblepersonnel lacked awareness of the specifics and extent of energy wasted and of the specific measures needed to use energy more efficiently. This reflects the lack of importanceplaced on energy in the past, which in turn was reflectednot only in in-plantoperations and incentivesbut, for example, in apparent decline in the quality of energy engineering and economicstaught in schools at all levels.

6. Enterprisemanagers and engineers seem to recognize that they must take urgent action to reduce energy costs, but they lack the skills (as well as the basic equipment)to identify and take such actions. The experience of IRG's subcontractorin one town, as well as our discussionswith enterprisesacross the country, strongly suggests that enterprises are willing to pay for initial audits,boiler controlsand operationsassistance, and other rapid-paybackenergy efficiencyimprovement services. Those interviewedclaim that, with internal convertibility,such willingnessto pay could supportnecessary imports as long as the higher price of imports did nbt make the payback and internal rate of return unattractive. However, there is not yet a network of reliableproviders of such equipment or services, and IRG doubts whether the present of former public sector units could come to be seen - or in fact to be - reliable providers.

7. These same conclusionsappear to apply to no-cost and low-cost pollution prevention. IRG concludes from its limited sample of enterprises interviewed that managers are interestedin reducing/preventingpollution where they can do so at no or low cost. They recognize intellectuallythat some measures, for instance reducing materials wasteage, also can result in economic efficiency improvements.At the same time, they and their staffs do not have the capability to identify and assess specific opportunities. Below the management and staff engineeringlevels, both energy efficiencyimprovement and pollutionprevention are likely to require introductionof long-termworker motivationand training programs. There does not yet seem to be an understandingof how an individual worker's behavior affects the economicsof the enterpriseas a whole.

EnvironmentalInveJtments

8. Beyond no-cost and low-costmeasures which have a rapid payback and which a company should be able to finance out of cash flow, there are two types of capital-intensiveinvestment. The first is investmentin "end-of-pipe"controls such as flue gas desulfurizationor upgraded wastewater pretreatment. The second,which is more of the type of substantialenvironmen'al investment which industrialmanagers are actually contemplating,is process change. Most large environmentalprojects in this categoryare very expensiveand are being proposed by large heavy industrieswhere the investmentwould provideeconomic efficiency, energy efficiency, and environmental,benefits. .Examples include proposed Investmentin continuouscasting at the KremikovtsiSteel Mill and in autogenic - 169 -

Annex 8 Page 3 of 4

roasting at the Plovdiv lead smelter. Either type of investmenttypically would be financed largelywith debt, which means that prospects for investmentdepend in part on the Bulgarian financialsystem.

EnvironmentalImprovement Equipment and Services

9. An importantconstraiiit is the underdevelopednature and uneven qualityand reputationof the environmentalindustry in Bulgaria,starting with the lack of enterprises and trained staff to design and implement pollution prevention programs. There are no evidence of any environmentalservices industry in the country. There are a very few energy audit And efficiencyimprovement services entitles,primarily the Committeeon Energy'sInspectorate for the RationalUse of Energy (whichhas seven branches around the country),the eight former units of the Kombinat for IndustrialEnergetics (now separate enterprises),and a few private firms that either have conducted energy audits and implementedno- cost/low-costefficiency improvementprograms or would like to do so. (The Committee on Energy says that roughly twelve enterprises,including the former IndustrialEnergetics units, have registeredwith it to provide.such services.) Such firms are likely to expand into pollutionprevention as the market develops.

10. Except for those units equippedby AID as part of its Short-TermEmergency Program, virtuallyno units describedabove have adequate equipmentto conduct even rough energy or environmehtalaudits or to identifyand instituteenergy or environmentalimprovement programs. Also, all units are small, and capabilities of individualunits vary widely. There also appearsto be little environmental engineering training at either the Technical University (for formal degree training) or thp national engineers' association (which has local units throughoutthe countryand sponsorscourses in many other subjects). Thus, while overall engineeringtraining may be good, there is not a pool of well-trained specialiststhat could be tappedby a developing'environmental services industry.

11. A few state-owned enterprises produce instruments, but equipment is outdated and often unreliable. For example, very few Bulgarian-produced industrialboilers have oxygen analysis or stack gas analysis instruments - equipmenitwhich the IRG team found would pay back for most plants, out of energy savings alone, in a matter of weeks or at most a few months. There also is a lack of systems and equipment for even bap'c industrialwaste reduction. For example, there is no commercialproduction of waste heat boilers or of multi-fuel industrialboilers capable of burning wastes (or even coal).

12. There are some signs of change. A relativelynew enterprisein Veliko- Turnovo will produce flow meters and other instrumentsfor both liquids and gases/air. In Jambol, a new enterprisehas been formed to produce steam traps and valves, reportedlyusing Western-licenseddesigns. At Ruse, Bulgariansare testing a locally designed boiler to burn agricultureresidues. Some of the factories now producing small household boilers/stovesfiring wood and coal reportedlyare consideringscaleup to small industrialboilers. These and other initiatives are interesting but not.yet sufficientlywidespread to have a substantialimpact. Also, designsand production/qualitycontrol methods may or may not meet Western standards. - 170 -

Annex 8 Page 4 of 4

13. Progressin attractingjoint venturesfor energy or environmentalequipment or services is hindered by the fact that, although Bulgaria has passed a relativelyliberal Foreign InvestmentLaw, some major pieces of economic policy legislation(for examplethe new tax law) have not yet been drafted, implementing regulations for most new economic legislationhave not yet been drafted, and there Is some uncertainty regardingthe pace and direction of future economic policy initiatives. Until the economic policy framework is put in place followingthe elections,new foreign.investmentis likely to remain limited. - 171 -

Annex 9 Page 1 of 3

Nature ConservationStrategay of the Ministry of Environment

1. The strategy is based on a three-armed approach to nature protection/conservation:(i) the system of protectedareas; (ii) institutional strengthening,and (iii) scientificresearch.

2. The system of Drotectedareas. This section of the strategy focuses the creation/developmentand managementof the protected areas system. This will include updating the protectedareas system establishedin 1988 to expand the national parks system to includeRila and the Central Balkans,designating more areas as natural parks, identifyinggeological heritage sites. It begins with a new system of protectedareas categorizationbased on internationallyaccepted criteria. This new systemwould differ from the existinggeneral categorization of Bulgaria's "people'sparks" and would designateprotected areas as national parks, natural parks, and nature reservesbased on IUCN criteria.1

3. The followingcriteria must be met in order to qualify as a category II national park:

(i) one or several ecosystems are not materially altered by human exploitation and occupation, where plant and animal species, geomorphologicalsites and habitats are of special scientific, educative and recreative interest or which contains a natural landscapeof great beauty;

(ii) the highest competent authorityof the country has taken steps to prevent or eliminateas soon as possibleexploitation or occupation in the whole area and to enforce effectively the respect of ecological,geomorphological or aestheticfeatures which have led to its establishment;and

(iii) visitors are allowed to enter, under special conditions, for inspirational,educative, cultura] and recreativepurposes.

4. Bulgaria'snatural parks would fall into IUCN CategoriesIV and V, which specifyprotection of specificsites or habitatsessential to the continuedwell- being of resident or migratory fauna of national or global significance. The primary purpose of this category of park is the protection of nature; the secondarypurpose is the productionof harvestable,renewable resources (i.e., agricultureand forestry). Propertywithin these areas may be privately,state, or municipallyowned.

5. Nature reserveswould be the strictestcategory of protectedareas. Human activity and even presence is forbidden,except for those activitiesconnected with safeguardingand study of nature reserves. This categoryof protectedarea is based on the existence of some "outstandingecosystems, features and/or

1 See "Categoriesfor ConservationManagement," Protected Areas in Eastern and Central Europe and the USSR: An IntBrim Review, IUCN, 1990. -172-

Annex 9 Page 2 of 3

species of flora and fauna of national scientific importance or are representativeof particularnatural areas; they often containfragile ecosystems of life forms, areas of importantbiological or geologicaldiversity or areas of particularimportance to the conservationof geneticresources." These areas are of the most strict regimes. Naturalprocesses are allowed to take place in the absence of any direct human interference.

6. Institutionalstrengthening. This arm of the strategyis based on creating a new Nature ProtectionAgency (NPA) that will protect national parks, natural parks, nature reserves,and wetlands. The responsibilitiesof this new agency will include the following:

- establishmentand control of a Nature ProtectionFund; - establishmentof administrationfor each type of protected area;

- *developmentof policies to effectively manage protected areas; - efinancing,training for, and developmentof managementplans; - funding for projects identifiedin managementplans; - financingof researchand scientificinvestment in protectedareas; - financingand developingpublic awarenessand educationalprograms; - training for staff; - developingand participatingin internationalprojects;

- ensuring compliancewith regime of managementplan; - investigatingnew protected areas and correctingboundaries, etc.; and - coordinatingwith centralgovernment agencies and local authorities who have property in the area.

7. By 1995, the Ministry of Environmentwould like to have seven percent of the country'ssurface designated as protectedareas. At least 95 percent of all protected areas in Bulgaria would be under the matagement of the NPA.2 NPA would have the followingdirectorates:

- the national parks directorate,with separate sections for each nationalpark. Nationalparks are distinctfrom other parks as they as considered to be primary areas of great national and internationalvalue. Pirin National Park is currentlythe only park officially designated as an IUCN category II national park. Designationsfor Rila NationalPark and the Central BalkansNational Park are-expectedto be signed by the Ministerof Environmentby the end of this year. These three parks are expected to be the only parks in Bulgaria to be designatedas IUCN categorynational parks;

- the naturalRarlk directorate,with-nine separate directorates, one for each naturalpark. Due to the variety of land uses and property ownershipwithin naturalparks, the coordinationof activitycontrol will be more complex than in the other categories of protected areas. A creativemanagement plan must be developedto effectively

2 This will encompassa total of approximately3,000 protected areas in Bulgaria. - 173 -

Annex 2 Page 3 of 3

manage the protected area, while at the same time allowing flexibility;

a nature reserves directorateencompassing all nature reserves in Bulgaria. Nature reserves are categorized as IUCN Category I protected areas. The directorate for nature reserves will be administrativelyresponsible for all nature reserves3 and would employ and be responsiblefor about 20 rangers. These areas usually range in size from 1,000 to 5,000 ha. Rangers would be employed to control and inspect these areas. These rangers would need to be well educated and need special training in this area;

- the ^etfn_ directorate would be similar to that of nature reserves. There will be one directorate administratively responsiblefor all wetlands protection;4

an additionaldirectorate will be the directoratefor other parks d national and international imogrtance. This directorate will include all other protectedareas not included in one of the above mentioned categories.

8. fic reseah, Primary goals includedeveloping 1) an inventoryof flora and fauna, vegetation,etc. in protected areas and nature reserves, 2) completing a complex survey in national parks5 and natural parks, and 3) conductingcontrol investigations(the results would influence the management plans).

3 There are currently99 nature reserves in Bulgaria.

4 Wetlands are currently managed under the Ministry of Agriculture. Accordingto MOE staff, the MOA will be relievedto transfercontrol of wetlands to the MOE.

5 A complex survey has alreadybeen conductedin three BiosphereReserves in the Central Balkans. - 174 -

Annex 1Q Page 1 of 2

Risk Assessment

1. Despite the fact that risk assessmenthas become a subject that has been extensivelydiscussed in recent years, many of the terms do not have 'standard'definitions. Currently,ecological risk assessmentmethods are being developed,but, in the past, risk assessmentshave been performed largely to estimate effects on humans. The followingdiscussion and descriptionof terms, therefore,focuses on human health risk assessments, although a parallel discussionwould apply to assessmentsof ecological impactsTh

Risk Assessmentand Risk Management

2. Risk assessmentis defined as the characterizationof the potentialadverse health effects of human exposuresto environmentalhazards. Risk assessmentsinclude several elements:description of the potential adversehealth effects based on an evaluationof the epidemiologic,clinical, toxicologic,and environmentalresearch; extrapolation from those results to predict the type and estimate the extent of health effects in humans under given conditionsof exposure;judgments as to the number and characteristics of persons exposed at various intensitiesand durations;and summary judgments on the existence and overall magnitudeof the public health problem. Risk assessmentalso includea characterizationof the uncertaintiesinherent in the process of inferringrisk.

3. The term "risk assessment"is often given narrower and broader meanings. For some, the term is synonymouswith quantitativerisk assessment and emphasizesreliance on numerical results. The definitionused here includesquantification, but also includes qualitativeexpressions of risk. Quantitativeestimates of risk are not always feasible,and in certain circumstancesmay not be desireable.

4. Risk managementis the process of evaluatingalternative regulatoryand non-regulatoryactions and selectingamong them. Risk management,which is usually carried out by governmentalagencies under various legislativemandates, is a decision-makingprocess that entails considerationof pol-itical,social, economic,and engineeringinformation with risk-relatedinformation to develop, analyze, and compare options and to select the appropriateresponse to a potentialhealth hazard.Theselection process necessarilyrequires the use of value judgmentson such issues as the acceptabilityof risk and the reasonablenessof the costs of control.

Steps in Risk Assessment

5. Risk assessmentcan be divided into four major steps: hazard identification,dose-response assessment, exposure assessmentand risk

1 Excerpted from "Risk Aisessmentin the Federal Government: Managing the Process";National Academy Press, Washington,D.C., 1983 - 175

Annex 10 Page 2 of 2 characterization.A risk assessmentmight stop with the first step, hazard identification,if no adverse effect is found or if an agency elects to take action without further analysis,for reasons of policy or statutorymandate.

6. Of the four steps, hazard identificationis the most easily recognized. It is defined as the process of determiningwhether exposure to an agent can cause an increase in the incidenceof a health condition (cancer, birth defect, etc.). It involvescharacterizing the nature and strength of the evidence of causation, i.e., it answers the question: "Does the agent cause the adverse effect?".

7. Dose-responseassessment is the process of characterizingthe relation between the dose of an.agent administeredor received and the incidenceof an adverse health effect in exposed populationsand estimating the incidenceof the effect as a function of human exposure to the agent. It take account of intensityof exposure,age pattern of exposure, and possibly other variables that might affect response such as sex, lifestyle,and other modifying factors. A dose response assessmentoften requires extrapolation from high to low dose and extrapolationfrom animals to humans. A dose- response assessment describesand justifies the methods of extrapolationused to predict incidenceand characterizesthe statisticaland biologic uncertaintiesin these methods. It answers the question: "What is the relationshipbetween dose and incidencein humans?".

8. Exposure assessment is the process of measuring or estimatingthe intensity,frequency, and duration of human exposuresto an agent currentlyor previouslypresent in the environmentor of estimatinghypothetical exposures that might arise from the release of new chemicals into the environment. In its most complete form, it describesthe magnitude,duration, schedule,and route of exposure; the size, nature, and classes of the human populations exposed; and the uncertaintiesin all estimates. Exposure assessmentis often used to identify feasibleprospective control options and to predict the effecis of availablecontrol technologieson exposure. It answers the question: "What exposuresare currentlyexperienced or anticipatedunder differentconditions?".

9. Risk characterizationis the process of estimating the incidence of a health effect under the various conditionsof human exposure described in exposure assessment. It is performedby combiningthe exposure and dose- response assessments. The summaryeffects of the uncertaintiesin the preceding steps are described in this step. It answers the question: "What is the estimated incidenceof the adverse effect in a given population?". - 176 -

Annex 11 Page 1 of 1

Air PollutionAlert and Warning

1. For selectedpollutants, an example of the levels which could be used in an alert - warning system might be as follows:

Stage One Hour Average PollutantConcentration (ug/m3) co SO2 _ 1 <10,000 <1300 <235

2 >10,000 >1300 >235

3 >17,000 >1870 >400

4 >34,000 >3730 >800

5 >46,000 >4990 >1000

2. The interpretation of the stages is provided below. The system would have to includean action plan to be implementedby the local governments aided by the media and the Regional Inspectorates..

Stage 1 - No adverse short term impacts are expected.

Stage 2 - Effects includemild aggravationof symptoms in susceppiblepersons and irritationsymptoms in the healthy population. Persons with existing heart or respiratoryailments should reduce physical exertion and outdoor activities,

Stage 3 - Effects include significantaggravation of symptoms and decreased exercise tolerance in personswith heart or lung disease. Widespread irritationsymptoms in the healthy population. Elderly people and those with existinghoart or lung disease should stay indoors and reduce physical activity.

Stage 4 - Effects include prematureonset of certain diseases in addition to significantaggravation of symptoms and decreasedexercise tolerance in healthy persons. The generalpopulation should avoid outdoor activity.

Stage 5 - Effects would includepremature death of ill and elderly persons. Healthy people will experienceadverse symptoms that affect their normal activity. All persons sould remain indoors,keeping windows and doors closed. All persons should minimize physical exertion. - 177-

Annex 12 Page 1 of 3

WaterUse for Irrization

l.Bulgariairrigates 1.2 million ha or about one-quarterof its cropped area (see Table 1 below). The Ministry of Agricultureis responsiblefor operations and maintenance (0&M) of dams, headworks, and main canals. Users are responsiblefor tertiary level 0&M in state systems. The Ministry has 20 state irrigationenterprises that deliverwater, perform maintenanceand do construction. There are about 8000 employeesworking in the public irrigation sector.

Table 1. IrrigationData 1

Total IrrigableArea (ha) 1,200,000 State Systems 900,000 Agro Complexes/Cooperatives300,000 IrrigatedArea (75-80%) 900,000-960,000

By Source (ha) Dams 900,000 Run-of-the-River 300,000 Groundwater 40,000

2. The Ministry operates 174 dams for irrigationpurposes. In addition there are 30-40 hydro.electricdams operatedby the Committeeon Energy and 1900 small dams for irrigationthat are operatedby cooperativesor agriculturalcomplexes. Reservoirstorage capacity is on the order of 30 percent of average annual runoff, a figure which is much higher than for a country such as Pakistan (which can store only about 10 percent of its runoff), but much lower than for California.

Table 2. ReservoirStorap: Canacity2 Number Water of Storage Dams (bcm) Ministry of Agriculture 174 3.1 Energy Committee 30-40 1.5 AgriculturalComplexes 1900 0.6 Domestic Supply 0.6 TOTAL 5.85

1 Source: Ministry of Agriculture,Sofia.

2 Source: Ministry of Agriculture,Sofia.

3 The Instituteof Meteorologyand Hydrologyestimates water storage capacity at 7.2 bcm. - 178 -

Annex 12 Page 2 of 3

3. In 1989, the Government'sbudget for irrigationwas 120 million Leva. The 1991 budget, formulatedin February 1991 was 440 million Leva. This was revised in June 1991 to 620 million Leva. The biggest index change is for power (9 timcz). The Ministry of Agriculturespends 35 per^ent of its budget for power. 4. Approximatelythree-quarters of the budget comes from a State subsidy, and one quarter of the buuget comes from agriculturalcomplexes that pay fees directly to State irrigationenterprises through contractsfor water. Contractsare signed in advance;payments are made in installment. Irrigationfees paid by agriculturalcomplexes represent not more than 8-10 percent of agriculturalproduction costs incurredby the complexes. Water charges are shown below.

Table 3. Water Charges-andAnnual Deliveries Annual Water Charges Deliveries Agriculturalusers L25/ha/year+ L2/lOOOm3 2.5 bcm. Industry L30/1000m3 230 mcm. Domestic users L30/lOOOm3 120 mcm. Fisheries: 75 mcm.

5. If energy production in Bulgaria leads to pollutionproblems, and it clearly does, then irrigation'sdemand for power contributesto the pollution problem. Bulgaria's irrigationsector is highly energy-intensive. Irrigation consumes 14 percent of all the energy used by the agriculturalsector. 4 Relative to the majority of countrieswhich use irrigation,Bulgaria is at a disadvantagebecause: (1) water from valley sources must be lifted and applied to the land, or stored in higher elevationreservoirs prior to use; and (2) on-farmmethods rely heavily on pressurizedapplication.

6. Much of the water for irrigationmust be lifted through a series of pump stations (there are over 800 in Bulgaria)into off-stream storage reservoirs. For example,water from the Danube5 must be lifted to irrigate lands on terraces above the river. Water from rivers such as the Iskar are lifted several times before it is stored and later applied to the land. Thus, Bulgarian irrigation,and associatedcosts, are fundamentallydifferent than a system which irrigatesvalley lands throughwater stored naturally in mountain

4 World Energy Statisticsand Balances, 1985-88 edition, International Energy Agency, Paris, 1990.

5 Bulgaria diverts/pumps140 m3/s from the Danube to irrigate 200,000 ha. To expand the area irrigated,the problem is not one of water supply, nor quality of the resource.but rather the high lifts associatedwith using the water on bench lands. The cost of lifts was calculatedby Ministry officials 3 3 at l.eva2 per m (or in excess of $100 per 1000 m ) to lift water to the high terrace.

2 - 179 -

Annex 12 Page 3 of 3

reservoirs. Sprinklerirrigation methods are used on 500,000ha (45 percent) of the 1.2 million hectares under irrigation. Sprinkler irrigationrequires pressurizationand an input of energy. 7. The combinationof lifting and pressurizationresults in an average energy expenditurefor the country which is estimatedby Ministry officialsat 130 meters. Based on prevailingworld market energy prices, it costs about $0.30 per 1000 m3 per meter of lift5 or about $39 to lift and pressurize 1000 m3. Energy costs to irrigate one hectare are estimatedat $120. While such costs are not unusual by US standards,agricultural users in Bulgaria currentlypay about $1.40/ha/yearplus $0.11/1000m 3. If Bulgaria used world energy prices as the basis to charge its irrigationwater, users would be asked to pay about 100 times what they pay now for water. Calculationsare for energy costs alone and do not includeany charges for maintenanceor for recovery of capital costs, a portion of which users are normally expected to meet.

8. Bulgarianirrigation is inherentlyenergy intensiveand someone or some entity has to pay the bills. In view of the current fiscal situation, there is a clear need to raise water charges at least to the level which covers energy costs. Other options should also be considered. These include: (1) Place more reliance on sources of water which require less lift. Groundwater and small-scalepump units from small streamsare two options. Private indLvidualsshould be encouragedto invest in such systems. (2) Increase the effLciencyof pumps and motors so that pumping requirementsare reduced to the minimum. (3) Shift croppingpatterns to high value crops or to crops which require less water. (4) De-commissionportions of the irrigationsystem which are the highest energy consumers.

6 Convertedfrom figuresprovided in Keller, Jack and Ron Bliesner, Sprinkle and Trickle Irrigation,Van Nostrand Reinhold, 1990, p 18.

3 - 180 - Annex 13 Page 1 of 3

Air Ouality MonitoringMethods

1. Localized ambient monitoring is conducted for the most part using wet chemistrymethods (bubblers)over short time periods (30 minutes - 90 minutes) and only during workdays not on weekends. An exceptionto the short time period are the dust monitors which are normally run for an eight hour period. Lead levels are also determinedfrom these dust monitors and are the reason for the extended monitoring period. The mobile lab operated by the Ministry of Environmentuses automaticmonitors and there are three automaticmoiitors at the Ministry'sRegional Inspectoratein Varna.

2. The use of bubblers limits the range of air pollutants which can be measured effectively. The most common pollutantsmeasured by the bubblers are:

a. S02 b. N02 c. H2S d. Phenols e. H11 f. NH3 g. Chlorine h. H2S04

3. An examinationof this list revealsthat a number of importantpollutants inoluding03, C0, benzene, and a number of additional organic gases which are consideredto be toxic are missing because of the lack of reliable methods for measurement.

4. The dust monitoringis limitedfor the most part to total particulatesand lead. Lab capabilitieslimits the ability to analyse for other heavy metals. There appears to be no fine particulate (pmlU) monitoring across the entire country.

5. An evaluationof the wet chemistry(bubbler) monitoring systems revealsa itur.1berof deficiencies which call into questionthe accuracyof the resultswhich are being measured. In addition there appears to be a great deal of overlapand duplication in the monitoring systems being conducted by three agencies, the Ministry of Environment,Ministry of Health and Institute of Meteorology and Hydrology. Within and between the agencies there are also many inconsistencies which make comparison of the monitoring results almost impossible.

6. The methods being employed by most of the stations are deficient in a number of regards which will .and to render the results innacurateand open to substantialquestion. These deficienciesmust be correctedbefore confidencecan be vested in the ambientmonitoring in Bulgaria. Among the problemswhich could be observei:

a. The S02 samples are not refrigerated. These samples must be refrigeratedimmediatly upon completionof the monitoringperiod. In fact it is preferableto refrigeratethe bubblingmedium even during - 181- Page 2 of 3

the periodof monitoring.This is not done at any stationwith the exceptionof some of the stationsoperated by the Ministryof Environmentin Ruse. Failureto refrigeratethe samplewill result in the decreasein the amountof S02 measuredwhen comparedto the amountactually present in the sampleat the time of measurement. It is alsoadviseable to refrigerateother samples as well, In many instancesthe samplesare storedovernight in a none refrigerated atmosphere. b. Sometimesthe samplesare transportedwithout being stopperedwhich exposes them the ambientair. This practicecan result in a degradationof the sample. Thereare also questionsconcerning the transferof samplesfrom the bubblingequipment to the test tubes transferedto the lab. c. The samplingprobes are made of materialwhich will reactwith any of the compoundsbeing measured. These probesshould be replaced with probesmade eitherof glass,but more preferrablyof teflon. Use of the nonteflonor nongas material will result in an underestimatationof the actualconcentrations being measured. d. The pumpsbeing used to providethe air flow throughthe monitors are calibratedonly in a very infrequentmanner and in some cases not for a numberof years. This is a seriousdeficiency in the conductof the programand shouldbe remediedas soon as possible. e. The laboratorieswhich undertake the analysisdo not undertakesplit samplinganalysis frequently enough to checkon theprocedures being used to measurethe concentrations.This is a commonprocedure to checkaccuracy. Another acceptable method is to have the lab check referenceconcentrations in which the concentrationbeing measured is predetermined.

f. The locationof the samplingprobes is usually inadequateto prevent unwantedlocal influences. In a numberof cases the probesare not placed more than one meter from obstructionsor the sides of buildings.In additionin a number of cases the probes are not placed away from overhangingtrees and roofs which will tend to alter the normalregional readings.. 7. The threeagencies invoived in the monitoringfollow different procedures in the monitoringwhich they pursue and evenwithin an agencythe proceduresvary from locationto location.This resultsin severedifficulties when tryingto comparethe resultsbetween stations. For example,the samplingperiod for the gas samplesvaries from 30 minutes,40 minutes,60 minutes,80 minutesand 90 minutes. Dust samplesare taken from 60 minutesind 90 minuteswhen no lead analysis is being done and up to 6 hour and 8 L ours when lead analysisis anticipated. 8. The Ministryof Healthconducts monitoring on only tenworking days during the month,either the firstten workingdays or the lastten workingdays. They nevermonitored on weekendsor on holidays.The Ministry of Environmentand the 182 - Annex 13 Page 3 of 3

Instituteof Meteorologyand Hydrologymonitor for the entire month but generally do not monitor on weekends or holidays. The exception to this is in Ruse where the monitors are operated every day by the Ministry of EnvironmentsRegional Inspectorate.

9. The monitors are not usually operated at night but only during normal working hours. Again, the single exceptionto this is the Regional Inspectorate in Ruse. In most cases the number of samples taken (gas) is four, but in one case the number of samples taken was three. For dust, normally only one sample is taken.

10. This array of samplinginconsistencies makes it impossibleto make a true determinationas to the actual attainmentof the air qualitystandards. This is particularlytrue for the 24 hour standardswhere no samples are taken for most of the 24 hour period. The result of these intermittantsampling periods will be to overestimatethe concentrationsfor longer monitoring periods (anything longer than eight hours).

11. In Varna, three automatic monitors have been sited by the Regional Inspectoratein order to measure the impacts of the Chemical Manufacturing complex in Devnia. These monitors have not been calibratedwith calibration gases for over two years. This means that the data being generatedby these monitors is highly unreliable. Its only use would be to detect trends and to keep continual track on the emmisions,but that is all. In Burgas, the four automaticmonitors are no longer operable..

12. Automatic monitors are very useful for making long term continuous measurements,but they are much more expensiveand require a much higher level of maintenanceand qualitycontrol. Automaticmonitors should be purchasedand installed only where it can be shown that such information is absolutely essentialto the conductof the ambientprogram in the nation. The currentplan developedby the Ministry of Environmentin cooperationwith the EC PHARE program (phase 1) appears to be entirely adequate for the near future.

13. Overall, it is essentialthat a quality controland quality assuranceplan be put in place which will ensure an adequate data capture. In addition a set of guidelines should be drawn up which would be followed by all agencies who would site and operateambient air qualitymonitors. This would ensure quality data which can be used to determineadherence with ambientair qualitystandards and which can be comparedwith ambientair quality from other countries. - 183 -

Annex 14 Page 1 of 5

EnvironmentalNGOs in Bulgaria

Ecoglasnost

1. Ecoglasnostis the largestand most well-knownof Bulgaria'senvironmental NGOs. It was founded in April 1989, with the major objective of collecting, analyzing, and disseminating information about the ecological situation in Bulgaria.

2. In June 1989, Ecoglasnost's application for legal establishmentwas rejectedby the District Court of the Municipalityof Sofia on the grounds that it had not been endorsed by a competent government body. This rejectionwas overtakenby events; in the wake of demonstrationsby Ecoglasnost,in conjunction with the environment-orientedmeeting in Sofia of the Committee on Security Cooperationin Europe in November 1989, the old regime fell.

3. Ecoglasnosthas 70 chapters. Its leadersestimate that they have 15 to 17 thousandactive members and approximately500 thousandsupporters. Recentpublic opinion polls indicate that it is highly regarded throughout the country. Ecoglasnosthas two half-timepaid employees; the expertiseand activity of its volunteer activists is extraordinary.

4. The free flow of informationhas been a centralconcern of Ecoglasnostfrom its initial foundation. A policy statementissued by Ecoglasnostcalls for full disclosureof pollution,abolition of classifiedstatus for all data related to human health and environmentalconditions, publication of detailed statistical data on the medical status of the Bulgarianpopulation, and other information disclosuremeasures. Ecoglasnosthas also issued "Charter '89--ForPreservation of the BulgarianNature Heritage",which contains a long list of proposals for new nature conservationinitiatives and cessationof activitiesharmful to the natural environment.

5. According to Ecoglasnostleaders, access to informationremains a serious problem. Much informationremains classified, such as the sites of uranium slag heaps that were supposedto be shippedto the USSR but that remain in Bulgaria. Informationis restrictedalso on so-called"economically-strategic" industries. Furthermore,when informationis reportedas averagevalues, this may mask peak values that representhealth risks. Data that are released frequentlyare not trusted;reliability of governmentdata-gathering and analysistechniques is very uncertain.

6. In April 1990, Ecoglasnostregistered a "PoliticalClub 'Ecoglasnost"'for the purpose of participating in the scheduled parliamentaryelections. The objective was to participate in parliamentarydeliberations, but not in the executive body of the government. The political club participated in the parliamentaryelections as part of the electorallist of the Union of Democratic Forces, and indicatedthat it would not participatein the executivebody even if the UDF prevailedin the elections. This politicalclub is separate from the Green Party that had been foundedby others in Ecoglasnost. Although there had been a plan to dissolvethe politicalclub after the nationalelections, the club 184 -

Page 2 of 5

was kept alive at the behest of some of the 17 deputiesEcoglasnost had alected to the National Assembly. 7. The question of political involvementclearly is a difficult one for Ecoglasnost. Five of its deputiesjoined with other deputies in a walk-out from the National Assembly. Some of the non-political leaders of Ecoglasnost characterize some of the deputies as "just politicians", and dislike the deputies' taking positions in the name of Ecoglasnoston issues that have not been fully debated within Ecoglasnost. They believe that Ecoglasnost is an ecologicalmovement that is more than just another politicalparty. At a June 1991 meeting in Sofia attended by nearly 150 representativesof Ecoglasnost groups, a proposal was made that the seven deputies who were viewed as most problematicshould adopt a new name for themselvesand not speak on behalf of Ecoglasnost.A decisionwas made that."political confidence" should be withdrawn from these deputies.

8. Ecoglasnostis generallyhighly regarded throughoutBulgaria. Individual chapters of Ecoglasnostgenerally focus on local environmentalproblems. These includedischarges from individualfacilities and soil and food chain pollution. There is also concern about groundwatercontamination associated with uranium extraction,and sound managementof radioactivewaste disposalsites throughout the country.

9. A strong localEcoglasnost chapter i-s the Bourgasgroup, organizedin early 1990. Its council of 13 meets weekly.The chairman,a biologist,is the Dean of the new Free Universityof Bourgas. The chapter takes great pride in its expert councils and has sectionson air, water, food, and other subjects. Accordingto a chapterrepresentative, there is a desire to tie into westerncomputerized data bases and expanded internationalcontacts. The chapter'spriorities include publicizingenvironmental data, some of which are treatedas confidentialby the government. The local group also campaignedfor the trucking of clean water supplies to local schools, kindergartens and nurseries to substitute for contaminatedlocal supplies. The local group also would like to open schools in small villages that have been declining in the nearby Strandja mountains. The schoolshave decliningenrollments, but would providean opportunityfor children in areas of heavy air pollutionto receive educationsin relativelyclean areas for a month. Two such schools are scheduled to open later in 1991, funded by polluting industries.

10. Another Ecoglasnostchapter is in the small village of Vavara (population 300) on the Black Sea coast. The major concern in this village is the nuisance and health threat associatedwith a local swine feed lot. The problem has persisted for years but governmentofficials have been unresponsiveto demands that the offending facility (which is not a major employer)be forced to clean up its activities. According the chapter representative,the village itself is characterizedas being an Ecoglasnostvillage.

11. Ecoglasnosthas a strong group in the Black Sea resort of Varna. Its prioritiesare the air emissionsfrom the Devniachemical facility, contamination of a local river by heavy-metalproducing industries, and dischargesfrom public sewage treatment plants. The local chapter also played a role in securing -185-

Page 3 of 5 documentationof the failureof the localhead of the waterand sewageauthority to properlymaintain the local sewagetreatment plant. This evidencehas been providedto the localprosecutor. The localchapter has poor relationswith the Ministryof Environment'sregional inspectors, who it regardsas being as too closelylinked with major pollutersin the region. 12. The Varna group labelsitself the "IndependentSociety of Ecoglasnost-^ Varna." It keeps some distancefrom the main Ecoglasnostorganization out of co'ncernthat the main organizationis too political.That is, thatEcoglasnost activistselsewhere are using Ecoglasnostas a screen for non-ecologically motivatedpolitical activity. The Varna chapterhas 549 members. Memberspay a fee of 20 leva per year,with a specialreduced fee of 6 leva for pensioners and students. The Varna chapterhas a "managingboard" of 9 peopleand an auditingcouncil of 3. The councilmeets officiallyonce each week but meets informallynearly every evening. The entiremembership meets twice per year. The managingboard is consideringproposing that political party members cannot be electedas membersof the managingboard. 13. The Varnagroup has goodrelations with the localmedia. It is represented on a local environmentalradio show broadcastonce each week. In every few issuesof the localnewspaper there is an "EcoglasnostInforms" or "Ecoglasnost Accuses"column. 14. Ecoglasnostrepresentatives suggested seiveral areas for possible technical assistanceand training: -Because government environmental.data are so unreliable and so mistrusted,repeated requests were made for monitoringequipment and trainingin its use. Ecoglasnostmembers would like to have the ability to conducttheir own monitoringanalyses. -Ecoglasnosthas been unable in recent months to publish its weekly tabloidnewspaper. Beforeit ceasedpublication, its circulationwas 20,000. Ecoglasnostsays it requires50,000 kilograms of paperto be able to publishfor one year. The Varnagroup requested a copyingmachine, to help it publishits 100 page programfor Varna'senvironment. -Ecoglasnost'scomputer specialist indicated an interestin buildinga computer-basedinformation network within Bulgaria. Ecoglasnostwould like to buy into Econet,have a largercomputer in Sofiato developan E- mail network,and would like to developsome expertsystems. -Ecoglasnostwould like to identifyone townwhose environmental problems are somewhatmanageable, and developa cooperative,community-wide program to solvethe problemsbased on an integrated(air/water/soil) approach to environmentalmanagement. -Ecoglasnost'sleaders expressed the strongneed for managementtraining for Ecoglasnostmembers, to strengthenEcoglasnost chapters. - 186 -

Annex 14 Page 4 of 5

The ELulgarianSociety for Conservationof the Rhodope Mountains

15. This organizationwas founded in 1990. It consists of 10 local societies in the towns of the Rhodope Mountain region, comprising approximately 1,500 nembers. Ten more societiesare in the process of formation. The mission was providedwith an English languageversion of the Society'sstatutes, which state as the society'sobjective "the preservationof the natural and culturalwealth of the Rhodope Mountains region." The society'spresident indicatedthat its biggest need is training in how to manage its organizationalaffairs.

The Wilderness Fund

16. The WildernessFund was establishedin October1989. It is a small society of 12-15 experts working on biodiversityissues and attempting to expand the nation'ssystem of protectednatural areas. Among its other activities,the fund has developed a draft nature protection act for Bulgaria, jointly with the Bulgarian Green Party. It also conducts field surveys, action plans for endangeredspecies, and strategiesfor expandingprotected areas in Bulgaria.It also works on developingtrans-boundary protected areas along Bulgaria'sborders with Greece, Turkey, and Yugoslavia. The group also would like to organize a Balkan region biodiversity conference (Albania, Yugoslavia, Greece, and Bulgaria.)

17. Representatives suggested that in order to promote international cooperationand environmentalcducation, Peace Corps volunteerscould be used to teach environmentallyoriented English courses to staff of the Ministry of Environment,the Forest Committee, and other groups. Representativesalso indicatedthat there is a strong need for special ecological training of those having responsibilityfor guarding protected natural areas. NGOs might be a useful base for organizingvolunteers to work in parks, but NGOs would need training in how to organize such efforts.

The Bulgarian Society for the Protectionof Birds

18. This environmentalNGO was establishedin June 1988. It constitutesthe Bulgarian National.Section of the InternationalCouncil for Bird Preservation (ICBP). As of March 1990 it had 232 members and chapters in several Bulgarian cities; it now reportsmore than 300 members. It publishedits first newsletter (includingan Englishversion) in September1990. The societyhas working groups on storks, pelicans, birds of prey and passerines. Other activities include feeding of birds of prey, constructionof artificial nests, and attempts to assist in the protectionof birdingareas. For example, in the SrebarnaReserve along the Danube, a World Biosphere Reserve that is home to the endangered Dalmatianpelican, the Society noted poaching of fish at night by fishermen,a threat to the birds' food supply. The Societyapproached the local municipality, which has jurisdiction,urging it to post more guards at night when poaching occurs. The Srebarna situation is indicative of a larger problem noted by several members of The Instituteof Ecology, namely, insufficientattention in Bulgaria to protectionof wetland resources. - 187 -

Annex 14 Page 5 of 5

The National Commission for EnvironmentalProtection

19. This is *the new name of an organization that had a close 25 year affiliationwith state-supportedentities. It has sponsorededucational programs,eco-clubs for youth throughoutthe country,youth work projectsin naturalareas, and summercamps for both Bulgarianyouth and youth from other countries.It has five full-timeworkers, a managingcouncil of sevenmembers, and a councilof representativesfrom 283 clubs throughoutBulgaria. - 188 - CRT A REPUBLIC OF BULGARIA MINISTRY OF ENMRONMENT MANAGEMENTSRUCTURE

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