The 244th issue of the Reform Index, covering the period from July 29 to August 11, includes six regulations, with the Index value reaching +1 point. In the previous issue, the Index stood at 0.5 points. The key highlights of this release are the Eurointegration law on industrial pollution control, the law on the work of starostas (community elders), and the launch of a unified Urban Development Cadastre at the national level.
Graph 1. Dynamics of the Reform Index
Graph 2. Values of the Reform Index and its Components in the Current Assessment Round
Law on integrated prevention and control of industrial pollution, +1 point
Law 3855-IX outlines activities that may pose environmental risks, primarily targeting enterprises that are the largest air polluters, such as those in the energy, metallurgy, cement, oil and gas, pulp and paper, and chemical industries. These enterprises will transition to a single integrated permit, replacing separate permits for air pollutant emissions, special water use, and waste management operations.
To obtain this permit, companies must assess whether their equipment falls under the category of environmentally hazardous activities and submit the required documentation to the Ministry of Environmental Protection and Natural Resources. The permit will be granted to enterprises that have implemented environmental upgrades to their facilities and adopted European technologies and management practices aimed at reducing industrial pollution.
All documents submitted by an enterprise will be entered into the Integrated Environmental Permit Register. The permit issuance process will consider the results of document reviews submitted by the operator, findings from state environmental inspections of equipment and industrial sites, as well as outcomes of public consultations and cross-border discussions (if conducted).
Regulatory bodies will have the authority to periodically inspect enterprises to ensure compliance with the terms of the integrated permit. They may revoke the license if sanctions are imposed on the installation owner, the operator obstructs inspections, violates permit conditions, fails to update the permit, or uses the equipment for unintended purposes.
Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.
Expert commentary
Oksana Kuziakiv, Executive Director at the Institute for Economic Research:
“The new law “On Prevention and Control of Industrial Pollution” aims to reduce the harmful impact of industrial enterprises on the environment. Industrial companies are required to adopt modern and clean technologies to minimize pollution levels.
In particular, it introduces an integrated environmental permit to promote industrial modernization and the transition to environmentally friendly technologies.
This is also an important step toward aligning Ukraine with European Union standards, as the law is based on European regulations. It implements the requirements of Directive 2010/75/EU of the European Parliament and the Council on industrial emissions.
All of this will improve the environmental situation in the country, enhance Ukraine’s chances for European integration, and make our products more competitive in the European market”.
Ukrmetallurgprom association of enterprises:
“The Ukrainian Parliament has recently adopted the Law of Ukraine “On Integrated Prevention and Control of Industrial Pollution”, which stipulates the need for a rapid transition to European emission standards set by the best available technologies and methods (BAT).
According to the Law, Ukrainian businesses will be limited in the timeframe for modernising their production facilities. Unlike the EU Directive, Ukrainian industry is limited to a maximum 7-year period of deviation from BAT (temporary deviation), as well as the inability to obtain a special permit that provides for the closure of a facility in case of economic inexpediency of its modernisation for a period exceeding 10 years (Article 29(5)), i.e. until 2035.
In the context of ongoing active hostilities, interruptions in electricity supply, inability to attract financing and impossibility of implementing large investment projects, this threatens to close down most large Ukrainian industrial production facilities’’
Law on the Institute of Starostas, +1 point
Law 3870-IX enhances the functioning of the institute of starostas. Previously, a starosta district could only be established if it included at least 500 residents. This meant smaller settlements with fewer than 500 residents had to merge with others to reach the required population threshold to elect a starosta. Now, the Ministry of Community Development has introduced a list of settlements with low population density (less than half the national average of 65 people per square kilometer). As an exception, these settlements can form a starosta district within one or several settlements with a minimum of 200 residents. For all other communities, the lower population threshold for establishing a starosta district remains at 500 residents.
The new provisions of the law allow a starosta to resign voluntarily in the event of occupation or encirclement of their district. In cases of mobilization, the head of the community may independently appoint someone to perform the starosta’s duties. Additionally, the community head can unilaterally appoint a starosta if the local council rejects three proposed candidates or council sessions fail to occur without valid reasons for more than three months.
During martial law, local councils are permitted to approve starostas in plenary sessions without public discussions, provided the session’s video recording is subsequently published. Starostas can also report to district residents via video conference during martial law.
Expert commentary
Andrii Darkovich, Expert at the Center for Sociological Research Decentralization and Regional Development, KSE Institute
“The institution of starostas and starosta districts in Ukraine’s territorial communities continues to actively develop. As of October 1, 2024, 7,439 starostas have been appointed, and 7,718 starosta districts have been established. The changes introduced by Bill No. 9518, which came into force on August 10, 2024, will play an important role in further developments.
The changes are intended to ensure flexibility and efficiency in local governance, which is especially relevant during wartime.
These changes are necessary due to the situation in frontline, border, and de-occupied communities, where issues arise in securing a quorum for decision-making in city, township, or village councils. Both the heads of such communities and the chiefs of newly established military administrations will be able to develop starosta offices in communities without waiting for the end of martial law.
The law allows community heads to appoint acting starostas in the event of a starosta’s mobilization and to make unilateral decisions on starosta appointments if the local council is non-functional (no sessions held for more than three months) or unable to reach consensus on a candidate (failing to approve a candidate supported by the community after three attempts).
Simplifying public discussion procedures during martial law (requiring at least 15% of adult residents of the district to participate) and lowering the minimum population requirement for establishing starosta districts (from 200 residents instead of 500 as previously) will help involve more residents in the process of creating starosta offices. The only unresolved issue remains the list of communities where the 200-resident rule will apply, as this list is determined by the Ministry of Community and Territorial Development of Ukraine. Without a clear methodology, it could potentially be used as a tool for political influence.
Most of the new provisions in the law promote stability and effective governance in communities during martial law, but there are also rules applicable to the post-war period. For instance, the changes ensure the continuity of a starosta’s duties until a new starosta is appointed by the newly elected local council. Currently, a starosta must be dismissed simultaneously with the resignation of the council that appointed them.
The effectiveness of these innovations can be assessed by tracking the dynamics of starosta appointments and the creation of starosta districts in the coming quarters. For instance, in the third quarter of 2024, 11 new starostas were appointed. It is possible that the new law will contribute to an increase in their number”.
Launch of the National Urban Development Cadastre, +1 point
The government has adopted a resolution to launch the State Urban Development Cadastre. This system will enable municipalities, architectural authorities, and builders to work within a unified digital framework. It will integrate the Register of Damaged and Destroyed Property, the DREAM system, the Unified Geographic Information System for Regional Development, the Environmental Impact Assessment Registry, the State Land Cadastre, the electronic procurement system, and the State Register of Immovable Monuments.
From now on, all urban development information at the national, regional, and local levels will be presented electronically. The system will include comprehensive plans for community spatial development, master plans, detailed area plans, and planning schemes for regions and districts. This is expected to accelerate construction and infrastructure development processes while enhancing transparency and protecting the sector from fraud.
Expert commentary
Vitalii Nabok, Policy and Data Analyst at the Institute for Analytics and Advocacy
“The digitization of urban development services, particularly the project to implement a digital Urban Development Cadastre at the national level, is significant as it consolidates previously scattered urban planning documentation, which was kept on paper across various local government bodies. The digital service is coordinated by the Ministry of Communities and Territories Development of Ukraine.
Bringing urban development data under a single “umbrella” will enable different stakeholders (local governments, architectural companies, etc.) to interact more efficiently and effectively. This is expected to reduce the time required to access essential information. Additionally, implementing the Urban Development Cadastre at the national level will minimize corruption risks in the urban planning sector by eliminating the possibility of document falsification and simultaneously increasing process transparency.
The tool will play a significant role in the integrated unified system of digital services for reconstruction and recovery based on the DREAM platform.
One of the main challenges associated with implementing the Urban Development Cadastre will be the digitization of paper documents, the designation of responsible individuals to manage the Cadastre, and their training to work within the system. The success of the project and the duration of stakeholder adaptation to changes in the urban planning sector will depend on these factors.
Finally, it is worth noting that the implementation of updated approaches and processes in handling urban planning documentation (including the Urban Development Cadastre at the national level) has been agreed upon by Ukraine and the EU as one of the indicators under the Ukraine Facility Plan by Q4 2024. Successful completion of this task will enable the state to secure the next tranche of external funding, which is crucial amid the ongoing war and significant uncertainty”.
Chart 3. Value of Reform Index components and number of events
Reform Index from VoxUkraine aims to provide a comprehensive assessment of reform efforts by Ukraine’s authorities. The Index is based on expert assessments of changes in the regulatory environment in six areas: Governance, Public Finance, Monetary system, Business Environment, Energy, Human Capital. Information about the Reforms Index project, the list of Index experts and the database of the regulations assessed are available here.
Photo: depositphotos.com/ua
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