Why Did Ukraine Score Lowest in European Environmental Compliance?

However, reading the remarks from the European Commission (EC), one can see that the non-compliance pertains more to cross-sectoral issues such as environmental impact assessment and environmental liability: “…legislation on environmental impact assessments and on strategic environmental assessment… needs addressing… procedural irregularities and uneven enforcement. The Directive on environment liability should be transposed.” 

It is not the first time Ukraine is facing criticism for inadequacy of its environmental management tools. Back at the ministerial environmental conference held in 2003 in Kyiv, Margot Wallström, who was the European Commissioner for the Environment at the time and now co-chairs the International Working Group on the Environmental Consequences of War with the Head of the Office of the President of Ukraine, Andrii Yermak, pointed out that in the Eastern European region, environmental ministries typically focus on control functions rather than managing natural resources for the benefit of society. They often use economic instruments for revenue generation rather than for changing people’s behavior (see Environmental Management in Eastern Europe, Caucasus and Central Asia, 2005).

On the sidelines, Ukrainian officials were told directly that until the Government implemented Western principles of environmental governance and European environmental assessment methods and acknowledged responsibility for past pollution, there would be no investments or compensation for ecological restoration, only discussions about money.

Ukraine has formally aligned its legislation with the EU’s Environmental Impact Assessment (EIA) Directive and the Directive on Strategic Environmental Assessment (SEA). However, as evident from EU criticism, the implementation of European environmental assessment standards leaves room for improvement.

When it comes to environmental liability and obligations, Ukraine rejected Directive 2004/35/CE on Environmental Liability, which defines responsibility for remedying ecological damage, while maintaining a “Soviet-era” position whereby environmental liability is exclusively tied to violations of environmental laws and the state’s obligation is limited to preventing environmental pollution rather than rectifying already inflicted harm. These differences are elaborated in Table 1. 

Ukrainian understanding:	European definition:
Environmental liability is a criminal violation of environmental legislation.	Environmental liability applies to environmental damage and the risk of damage resulting from commercial activities once it is possible to establish a causal link between the damage and the activity in question.
Environmental damage is determined through penalties for threats: uncollected eco-taxes, royalties, and unauthorized use of natural resources.	Environmental damage means a measurable adverse change in a natural resource or measurable impairment of a natural resource service, which may occur directly or indirectly.
Environmental remediation liabilities are absent; the Government is only responsible for preventing pollution.	Environmental remediation liabilities are a specific type of contingent liability that arises from federal, state, and local environmental regulations — or, in some instances, international treaties — related to contamination in soil, sediment, groundwater, and surface water

Ukrainian experts [2] justified not implementing Directive 2004/35/EC by the Ministry of Environmental Protection and Natural Resources of Ukraine as follows: According to the Constitution of Ukraine, only “ensuring environmental safety … is the state’s duty.” “Environmental safety is such a state of the natural environment in which the prevention of environmental deterioration and the emergence of danger to human health are ensured” (Law on Environmental Protection, 1991).

Before the publication of the above comments by the European Commission, Ukrainian officials very clearly demonstrated this limited understanding of the state’s obligations under the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP 27), where the environmental Ministry proposed that the lion’s share of funding for Ukraine’s post-war “green” recovery plan comes from the compensation for UAH 1 trillion of environmental damage calculated as the amount of eco-tax on unauthorized emissions by the aggressor into the air. 

Ukraine had traditionally been interested in the establishment of carbon markets since the time of the Kyoto Protocol, and it was also evidently hoping to obtain funding for “green recovery” through the sale of emission allowances (see the discussion in “From Lugano to London via Dublin“). However, it is clear that relying on funding for Ukraine’s post-war recovery through emissions trading may be unrealistic. The carbon market established under the Paris Agreement is still not fully operational, and the technical rules governing its operation are still under discussion. While Ukraine’s call for assessing environmental damage caused by Russian aggression based on emissions gained global attention, it did not receive significant support. The overall response at COP27 can be summarized by the words of the President of France: “ We will not sacrifice climate targets because of the Ukraine war.” This means that revenues from emission taxes will be directed towards phasing out fossil fuels rather than environmental remediation in Ukraine.

Experts involved in assessing environmental damage have repeatedly suggested to the Ministry of Environmental Protection and Natural Resources of Ukraine that by attempting to evaluate environmental harm based on the monetization of threats rather than a measurable evaluation of changes in the state and impact on the environment, Ukraine risks receiving nothing more than the jingling of money, similar to the parable of Khoja Nasreddin, who paid the street food seller for consumption of the scent of pilaf with the clinking of his coins.

At the same time, as shown in the article “Towards an Acceptable Accounting of Ukraine’s Post-War Environmental Damages,” the $50 billion in damages calculated by the Ministry of Environmental Protection and Natural Resources based on the monetization of threats can be easily calculated using Western methods for assessing the costs of rehabilitating at least 100,000 hectares of disrupted ecosystems and restoring hundreds of areas equivalent to U.S. “Superfund” sites (locations for the disposal of hazardous industrial waste affecting people’s health, regulated by the CERCLA law) in many cities and neighborhoods where industrial sites were located.

Analysis of gaps in the environmental assessment of damage to the environment from Russia’s aggression

The methodology for assessing environmental damage caused by Russia’s aggression was approved by the Ministry of Environmental Protection and Natural Resources in 2022. It includes methods for determining damage to atmospheric air, water resources, soil, the forest fund, the Azov and Black Seas, mineral resources, and territories and objects of the natural reserve fund. 

Awareness of the discrepancies between Ukrainian and international approaches has led the State Environmental Inspectorate of Ukraine (SEI) and the Committee of the Verkhovna Rada of Ukraine on Environmental Policy and Nature Management, in collaboration with the Ministry of Environmental Protection and Natural Resources, to request assistance from the OSCE Support Programme for Ukraine (the SPU) in conducting a proper environmental impact assessment. The SEI and the Committee have established an Expert Working Group (EWG) to develop updated environmental impact assessment methodologies based on the best international practices.

The EWG experts reviewed the work of the only known successful United Nations Compensation Commission (UNCC), established in 1991 to consider claims and make payments for losses and damage resulting from Iraq’s unlawful invasion and occupation of Kuwait. They concluded it would be unfeasible for Ukraine to obtain compensation for environmental harm based on the methodologies we mentioned above of monetizing threats to Ukraine’s environment.  

This is due to the fact that environmental damage assessed with Ukrainian methodologies mentioned above is largely based on national fines for ecological threats, such as unauthorized emissions and discharges, uncollected taxes and royalties, unauthorized use of natural resources, etc. However, the UNCC did not use the proceeding from environmental threats. Rather, it:  

• assessed environmental damage based on measurable changes in the state of the environment and the magnitude of the negative impact on it,
• defined environmental damage as “observed or measured negative changes in a natural resource or the quality of natural resource services,” and
• only accepted claims for financial compensation for actions aimed at restoring disrupted natural resources or services to their baseline state.

Claims for compensation related to national fines for environmental threats were not accepted by the UNCC.

The EWG concluded that the main reason for the inadequacy of the approved methodologies in 2022, as mentioned above, lies in the fundamentally different understanding in Ukraine and the EU of the concepts of “environmental damage,” “environmental liability,” and “environmental remediation liabilities” (see Table 1).

During a recent discussion within the Working Group established by the Ministry of Environmental Protection and Natural Resources and a detailed analysis of the compatibility of Ukrainian legislation with the environmental acquis, legal experts from the Ministry of Environmental Protection and Natural Resources once again stated that the only possible form of “environmental liability” in Ukraine is liability for violations of environmental legislation. Eventually, under pressure from arguments presented in the EU report, experts from the Ministry of Environmental Protection and Natural Resources agreed to transpose “environmental liability.” However, they refused to transpose “environmental remediation liabilities ” and to recognize water as an inheritance, as well as to commit to restoring the ecological status of waters to the “good” state in accordance with the EU Water Framework Directive (see Table 2). 

Ukrainian definition:	European definition:
All waters are a national asset of Ukrainian people, one of the natural foundations of its economic development and social well-being.	Water is not a commercial product like any other but, rather, a heritage which must be protected, defended and treated as such.

What is the reason for such a biased attitude towards “environmental liability”? There has long been a debate on this topic within the Ukrainian expert community [3]. The author believes this attitude is related to the outdated Soviet dichotomous understanding of “environmental security” as the absence of danger. The problem is that the introduced security-insecurity dichotomy in the law leads to the understanding of “environmental liability” solely as a violation of environmental legislation and the definition of “environmental damage” through fines for violating this legislation. In this context, the state is not responsible for restoration of the environment but only penalizes for causing harm to it.

This, in turn, leads to hindering the transition of Ukraine from the Soviet-style environmental “expertise” to European Environmental Impact Assessment (EIA) and Strategic Environmental Assessment (SEA), as highlighted explicitly in the report by the European Commission (see Table 3).

Ukrainian definition:	European definition:
Environmental Impact Assessment (EIA) is a (dichotomous) procedure of considering (or not considering) the EIA conclusion in the decision to proceed with a planned activity	EIA is the process of including a motivated conclusion from a competent authority into any decisions regarding projects that may impact the environment
Safety is the absence of risks (Civil Protection Code)	Safety is reduction of risk to a socially tolerable level. (Sendai framework)
Risk is the likelihood of negative consequences (effects) (State Construction Norms).	Risk is an effect of uncertainty (ISO)

The inconsistency in the Ukrainian definitions of EIA and SEA stems from the fact that environmental assessment in Ukraine has essentially remained a dichotomous Soviet “expertise,” which allowed just two possible answers – secure or insecure – and did not provide for the possibility of any quantified environmental assessment of the consequences of environmental impact. In game theory, this is called a “zero-sum game.”

During the update of the Environmental Strategy in 2019, the dichotomous goal of “Ensuring environmental safety” was replaced with “Reducing environmental risks.” However, the situation with dichotomous environmental assessment has practically not changed even today. All projects aimed at implementing a modern understanding of risks, such as the UNDP Disaster Risk Reduction project, have not yielded visible results.

As a result, Ukrainian government officials are still oriented toward the Soviet-era environmental “expertise” and control of threats (violations of environmental legislation, the number of discharge/emissions in excess of permits, the number of fines for law violations), rather than measuring and monitoring changes in the state of the environment or impact on it. Therefore the Ministry of Environmental Protection and Natural Resources traditionally assesses environmental damage based on the number of discharge/emissions in excess of permits or the number of fines for violations. This is also why the State Environmental Inspectorate, under the environmental Ministry‘s instructions, only collects data for the “Eco-threat” website related to criminal violations for ecocide cases and materials for imposing fines for environmental pressure. However, they do not gather data on changes in the state of environment or impact on environment according to the European Environmental Agency’s scheme (see the Guidelines):

D (Driving Force) → P (Pressure) → S (State) → I (Impact) → R (Society’s Response)

Focusing solely on identifying legal violations rather than requiring violators to compensate for the restoration of the damaged environment has severely limited the SEI’s ability to collect funds for environmental damage. These funds are typically insufficient even to cover the Inspection’s own operating expenses. However, this issue did not worry anyone during peacetime. The SEI, the Ministry of Environmental Protection and Natural Resources, and the country’s environmental budget had other funding sources, and the question of ecological restoration at the expense of national polluters was not a priority. The environmental tax primarily served a fiscal purpose.

With the onset of Russia’s full-scale aggression, there was a legitimate desire to hold the aggressor accountable for the unauthorized use and pollution of Ukraine’s environment. Moreover, the question arose of how to finance environmental restoration after the war. To address this, the Ministry of Environmental Protection and Natural Resources introduced special wartime coefficients into the above-mentioned methods for calculating environmental damage. These coefficients allowed, for example, to calculate UAH 1 trillion damage for air pollution in 2022, which is 250 (!) times higher than total pollution estimates  in the “peaceful” 2021.

However, to receive the calculated compensation, it still needs to be proven in court. Even with the “peaceful” methodology for assessing environmental damage, the SEI had difficulty achieving this, managing to recover no more than 3% of the estimated damages. It will be even more challenging with wartime coefficients, which are several hundred times higher. Even at the national level, when the state assesses compensation for itself.

On the international level, obtaining compensation for environmental damage from aggression using the Environmental Ministry’s methods will present an even greater challenge. Firstly, these wartime coefficients may not be recognized. Secondly, as former UNCC employees say, claims for compensation of environmental  fines were rejected by the UNCC altogether! 

The main conclusions of the Expert Working Group

Material compensation for “ecocide” is not provided for in any criminal courts 

To obtain compensation for environmental damage caused by Russia’s aggression, Ukraine would need to establish a Compensation Commission at the future tribunal similar to the UNCC created in 1991 to adjudicate claims and make compensation payments for losses and damage resulting from the illegal invasion of Iraq and the occupation of Kuwait.

Compensation claims based on national fines for environmental violations have been consistently rejected

For successful compensation for environmental damage, Ukraine’s “environmental assessment” based on threats and fines for law violations needs to be replaced with a “cost-recovery environmental assessment of natural resources.” The methodologies approved by the Ministry of Environmental Protection and Natural Resources in 2022, which calculate environmental damage based on threats and fines for unpaid taxes, royalties, and unauthorized use of natural resources should be replaced with ones that determine environmental damage as “observed or measured adverse changes in a natural resource or deterioration in the quality of services provided by natural resources.” Claims should only be made for material compensation for “actions aimed at restoring disrupted natural resources or ecosystem services to their baseline state before the aggression.”

To address the European Commission’s concerns about the non-compliance of Ukraine’s environmental acquis, it will be necessary to recognize the inadequacy of Ukraine’s dichotomous “environmental assessment,” the absence of environmental remediation liabilities, and  recognition of water solely as a commercial product.

These issues will need to be revisited during specific discussions of EU accession.

To develop methodologies for “environmental assessment” and “environmental damage” that will be recognized by international courts, it is necessary to have direct legislative definitions of the concepts of “environmental damage,” “environmental liability,” and “environmental remediation liabilities.”

To achieve this, there is an urgent need to transpose (i.e., literally transfer) Directive 2004/35/EC on Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage into Ukrainian legislation. Additionally, it is essential to fully adopt the relevant provisions of EU directives that have not yet been recognized, such as the EU’s Water Framework Directive, Floods Directive, EIA Directive, SEA Directive, Sendai Framework for Disaster Risk Reduction, and make the necessary amendments to the relevant laws and regulations, including the Law on Environmental Protection, laws on EIA and SEA, Civil Protection Code, State Building Codes for EIA, and others.

The State Environmental Monitoring and the State Environmental Inspectorate need to be reoriented from merely recording violations of legislation and environmental threats to monitoring and assessing measurable changes in natural resources and establishing the cause-and-effect relationship of these changes with Russia’s aggression.

The environmental Ministry’s “Eco-threat” database should be supplemented with an “Eco-damage” clearinghouse database containing materials that can be provided to the future Compensation Commission as acceptable evidence. 

Since monitoring in the combat zone is often impossible, a significant portion of monitoring should be conducted indirectly by using satellite monitoring systems. 

The most important aspect is that these satellite systems can provide comparisons of the environmental state “before, during, and after” the war”, which is essential for a comprehensive assessment of the damage incurred. These satellite systems, coupled with advanced Ukrainian GIS technologies, will be invaluable assets for the final assessment of environmental damages and reparations, especially given the lack of human resources and equipment for conducting large-scale “traditional” monitoring covering the entire war zone.