Overview
Many state-owned enterprises in Central and Eastern Europe (CEE) are saddled with severe environmental problems due to the failure of the centrally planned economies to control industrial pollution. Today, privatization programs – a key component in building modern market economies in CEE countries – are transferring enterprises into private hands, on an unprecedented scale. Uncertainty about responsibility for the environmental problems has emerged as a significant constraint to privatization or independent management, particularly with regard to contamination left over from past industrial activities, and unacceptable levels of pollution from ongoing operations. This book describes the laws of CEE countries applicable to the transfer of contaminated property; how individual enterprises are privatized in CEE; the methods used by investors to contain the legal risks of acquiring property with environmental problems, including contractual safeguards; and the policy options for addressing the environment-related concerns of investors interested in CEE properties undergoing privatization. The book analyses the laws of Poland, Hungary, and the Czech Republic concerning privatization, property transfer, and environmental liability; legal issues arising in the transfer of contaminated properties from an investor's point of view; and Central European policy and legislative initiatives to address environmental problems during privatization. It is argued that directing economies and administrative resources towards the control of ongoing pollution can accomplish more at this time than a focus on cleanup of past pollution. While excessive hazards to health clearly need to be addressed, the best strategy for past pollution may be not to clean up now but to take only those urgent steps necessary to prevent (further) harm to human health. This would keep the focus on prevention of further damage. Inappropriate integration of environmental concerns in privatization and economic transformation could cause unacceptable delays. The issue is how to avoid being distracted by ad hoc demands in individual privatization deals, so that privatization can be kept on track and environmental priorities set on the basis of each country's most urgent needs.