CASE NUMBER: 359
CASE MNEMONIC: ALBANIA
CASE NAME: Industrial Waste in Albania
Sarand, Albania
A. Identification
1. The Issue
When Albania emerged from diplomatic isolation in 1988, it
appeared as if a new era was dawning for its citizens. There were
hopes not only for economic aid to boost the crumbling economy,
but also for more opportunities to attract foreign capital through
trade and tourism. The governments and industries in the West,
more specifically, Western Europe, have cultivated a relationship
with Albania over the past eight years. Germany has been
particularly active in this respect and has led its counterparts
in exploring these new opportunities. While this has generated
numerous benefits for the Albanian people, larger problems loom in
the future. There is a trade-off between the economic boosts
garnered through industrial ties and those reaped from tourism.
German industry has taken upon itself to flood Albania, and other
Eastern European countries, with packaging and other byproducts of
production which it is loath to dispose of within its own borders.
The World Bank and European Community (EC) have also contributed
to the problem of pesticides and waste in Albania. The
environment has obviously been adversely affected which, in turn,
has negatively impacted any economic gains from tourism.
2. Description
Under Enver Hoxha, Albania gained a reputation as the most
isolated country in Europe. Hoxha rejected ties with every other
country in the world. As an orthodox Marxist, Hoxha's disdain for
the West was understandable, but he also sought to cut ties with
the Soviet Union and the People's Republic of China. Instead of
economic relations with these other Communist countries, Albanians
were forced to adopt a policy of self- reliance for fear of
contaminating their breed of Marxism by contact with the
unorthodox practices of the rest of the Communist world.
What this essentially meant for Albania was a return to
serfdom as the prospects for trade with other nations simply did
not exist. Strict central planning, in addition to isolation, has
resulted in an extremely poor country, undoubtedly the poorest in
Europe. Albania lacks a commercial banking system, sufficient
housing and food for its populace, and must cope with an outdated
infrastructure as well as an inadequate primary and secondary
educational system. The population is essentially uneducated and
agriculturally-based. Both of these factors have left Albania at
a severe disadvantage when dealing with Western Europe.
Hoxha created the most repressive Communist regime in the
world and was thus able to enforce these isolationist policies.
While they seem harsh, it is clear now, as the West gains access
to Albania, that some good did come out of isolation. Albania's
pristine coastline along the Adriatic and Ionian seas has been
remarked upon for its beauty thereby opening the possibility of a
strong tourism industry. By keeping the West out of Albania, the
problems which now threaten this landscape were avoided.
The main issue centers around a German company called
Schmidt-Cretan, a playing card producer, and its shipment of 480
tons of hazardous chemicals to Albania between 1991 and 1992 (1).
A total of five shipments were made during this time, all of
which included numerous toxic materials. The most notable of
these chemicals were toxaphene and phenyl mercury acetate, both of
which have been banned in the EC since 1983. It was reported that
one liter of toxaphene, for example, was capable of
contaminating two million cubic meters of water and killing all of
the fish there. The 480 tons in Albania was the equivalent of
6,000 liters (2).
These shipments were made under the guise of "humanitarian
aid" for Albania's agricultural sector. The belief was that
Albanian farmers, with the proper supplies, would be able to
resurrect a flailing economy through increased agricultural
output. While this rhetoric sounds beneficial in the abstract,
there was clearly a more pragmatic reason for the transfer. The
chemicals' toxic status within the EC meant that disposal in
Germany would cost between $4,800 and $6,600 per ton (3).
One must be careful to condemn Schmidt-Cretan outright,
though. Under EC regulations in place at the time, this
transfer was completely legal, although perhaps morally suspect.
The EC's 1992 rules state that the exporter is required to obtain
a notification of export. In this notice, reasons for its ban or
restriction are to be explained, and must be provided (4).
However, this notification only has to be served fifteen days in
advance of the transfer at the most. Schmidt-Cretan obtained this
notice of export through the German government and also received
approval from the Albanian Ministry of Agriculture.
It was only after the shipment's arrival in Albania that the
Albanian authorities realized there were serious problems. The
pesticides had expired, making then extremely hazardous, they were
poorly packaged, of poor quality and generally unsuitable for use
(5). The Albanian government reportedly asked the German
government to take the shipment back upon discovering the true
situation. Because of Albania's prior consent, though, any return
of the shipment was legally impossible. While Albania could plead
ignorance to the dangers of hazardous pesticides since they were
basically unheard of during the Communist period, the short time
frame between notification by Schmidt-Cretan and delivery was a
major factor. It would have been practically impossible to
determine the reality of the situation in such a short time, much
less make the decision to refuse importation.
This practice of exporting hazardous materials to Eastern
European countries as "humanitarian aid" or for "recycling"
purposes has been a commonly accepted one since the fall of the
Soviet Union in 1991 when these countries initiated relations with
the West. Therefore, the deal between Schmidt-Cretan and Albania
did not attract attention, despite the potential dangers for
Albania, until well into 1993 when Greenpeace investigated the
results. By 1994, there was a vocal outcry by Greenpeace for
Germany to rectify the situation.
Albania, unable to return the materials to Germany, had
stored it in various locations throughout the country.
Greenpeace representatives came upon a portion located in Bajze in
Northern Albania. The expired chemicals, which had not been
properly packaged to begin with, were continuing to leak two years
later. The toxic liquids had seeped into the soil in the
surrounding area, and the gases were emanating into the air.
Drinking-water wells nearby were endangered, as was Lake
Shkodra, a clear hazard to the environment (6).
Once Greenpeace acted to rebond the chemicals in order to
prevent leakages in Bajze, a new situation appeared in Milot where
the leaking containers had been placed next to a school (7).
These and other similar cases throughout Albania
underscored the necessity of returning the pesticides to Germany
as soon as possible. Albania was clearly not equipped to handle
the disposal of such materials.
While the case of Albania received international attention,
Greenpeace used this instance to propel the larger problem of
waste transport from richer Western European countries to the
poorer Eastern European ones to the global stage. This focus has
helped to address some of the inadequacies in European
regulations, as well as bring added pressure to bear on the German
government to resolve the Albanian dilemma. In March 1994, talks
went underway at the Basel Convention in Geneva on precisely this
topic: the dumping of waste from OECD countries in non-OECD
countries. It is estimated that nearly 98 percent of the 400
million tons of waste produced each year comes from OECD
countries. By transferring this waste to non-OECD countries,
Greenpeace claims the OECD is evading its responsibility to safely
dispose of these products.
Before a final agreement was reached in Geneva, the German
government backed the idea of a total ban on waste transport for
dumping, but endorsed the idea of transport with the intent of
"recycling". This idea was not well received by other
participants who sought a true solution. The reality of the
situation is that most of the waste transport between Western and
Eastern Europe is designated as "recycling" (8). Therefore, the
German solution would not have resulted in a dramatic change.
Fortunately, the Basel convention resulted in stricter measures,
and Germany was forced to join its EC counterparts in approving
the agreement. The only parties which opposed it were Australia,
Canada, and Japan while the United States worked to undermine it.
The final draft included a provision to prohibit the movement of
hazardous waste for final disposal from OECD to non-OECD countries
immediately. Secondly, the loophole which allowed disposal under
the designation "recycling" will be closed by 1997 (9). Under the
international pressure created by this agreement, the German
government was forced to accept the return of the 1991-92
shipments.
Some additional concern has been generated over a similar
problem involving the European Union (EU) and the World Bank in
1992. Under the EU's Poland-Hungary Aid for the Reconstruction of
the Economy (PHARE) Program, 214 tons of pesticides were
transported to Albania. Again, the reason given was a promising
one. The EU claimed to be interested in assisting agricultural
production with "essential supplies" (10). The World Bank funded
a similar project named the "Critical Imports Project" which led
to an additional 160 tons of pesticide imports. The companies
involved in the transaction were ICI, Monsanto, Bayer, and
Hoechst. Unfortunately, the result did not meet the initial hopes
for the project. The pesticides shipped in both cases were highly
toxic, possible carcinogens which posed a potential threat to the
water supply. In addition, there was no mention of training for
the uneducated Albanian farmers who have never been exposed to
these materials before.
Reports published in 1993 indicated that Albania already
possessed 3000 tons of pesticides stored by the Communist
government, thus making additional imports like the EU and World
Bank projects unnecessary (11). In addition, the poor state of
the economy meant that the farmers could not afford to buy
imported pesticides anyway. To underscore this point, it should
be noted that by mid-1994, only one quarter to one third of the
imported goods had been sold. What this meant for the
environment was that these hazardous materials were going unused,
sitting in storage, while they rapidly approached their
expiration dates.
In addition, the average farmer proceeded to handle these
dangerous chemicals without the proper protective clothing or
training necessary to prevent accidents. An issue of the Global
Pesticide Campaigner, for example, details an incident involving
an Albania farmer at his roadside stand. Left to his own
devices, the man was apparently selling his portion of the expired
pesticides. Chemicals which Western scientists would not touch
without protective gloves and goggles, this man handled with his
bare hands, completely oblivious to the dangers (12). Damage
to the environment threatens to harm the Albanian economy far
beyond any gains that increased production in the agricultural
sector could possibly produce. The Albanian government seems
willing to improve the economy by continuing its openness towards
the West (13). This means a growing tourism trade which will
bring badly needed hard currency into the country and produce
equally important jobs for its citizens. However, with the media
focus on the less seemly side of these improved relations, namely
the trade in pesticides, Albania is gaining an undesirable
reputation. Already it has come into question as "Western
Europe's dumping ground" rather than its playground (14). If it
continues to accept these shipments, the tourism industry will
likely be nonexistent and the economy will continue to suffer.
In all of these cases, the only party to truly benefit from
the relationship has been the Western agricultural industry. It
is clear that the markets for pesticides have been rapidly
diminishing domestically as organically grown products are
becoming more popular and people are heightening their awareness
of the health risks posed by these chemicals. As a result, the
agriculturally based economies of Eastern Europe present enormous
marketing potential. Not only do they rely on productive
farmland, which necessitates the use of pesticides, but these
farmers are as yet unaware of the environmental hazards posed by
the use of these chemicals. Ignorance and need thus have
combined to create the new recipients of Western Europe's pesticide
exports.
In undertaking this new trade, Western Europe is able to
address two problems at once. First, how to provide some
assistance to the transitional countries of Eastern Europe. It is
difficult to believe that such an altruistic motive provides the
driving force for these shipments, but as they are labeled
"humanitarian aid", this factor cannot be ignored. Second, and
most importantly, Western Europe has designed a unique method of
disposing of its waste materials. Under the guise of humanitarian
aid, the pesticides shipped by Schmidt-Cretan were essentially
useless but were given a readily accepted title. As such, the
agricultural industry in Albania appears to be furnishing Western
Europe with an excellent excuse for waste disposal. Schmidt-
Cretan would have been unable to market its shipment profitably in
Europe. Therefore, it opted to send the material to Albania where
it still would do little good, but Schmidt-Cretan could at least
claim to have helped Albanian agriculture.
3. Related Cases
BENGALI case
TURKEY case
NIGERIA case
JELLYWAX case
4. Draft Author: Mara Cleary (June 4, 1996)
B. LEGAL Cluster
5. Discourse and Status: AGReement and COMplete
The specific case involving Schmidt-Cretan and the Albanian
government was resolved when the German government succumbed to
international pressure. The Basel Convention, plus the publicity
generate by concerned groups such as Greenpeace, forced the German
government to accept the return of the 1991-92 shipments. Those
coming former the EU and World Bank, though, were never subjected
to these pressures and thus remain in Albania.
6. Forum and Scope: Albania and REGIONal
This dispute involves Albania and the countries of Western
Europe.
7. Decision Breadth: 2 (Germany and Albania)
8. Legal Standing: TREATY
While no agreement, formal or otherwise, was made between
Germany and Albania over the Schmidt-Cretan case, the general
dispute over waste shipments was settled through the Basel
Convention (see BASEL case).
Finalized in 1994, the Basel Convention provides for the
transboundary shipments of hazardous wastes in an environmentally
sound manner. All shipments of this type must be approved by the
exporter, importer and any intermediaries. In this way, non-OECD
countries have some protection against their more powerful OECD
counterparts.
C. GEOGRAPHIC Cluster
9. Geographic Locations
a. Geographic Domain: Europe
b. Geographic Site: Eastern Europe
c. Geographic Impact: Albania
10. Sub-National Factors: NO
11. Type of Habitat: TEMPERATE
D. TRADE Cluster
12. Type of Measure: Export Ban [EXBAN]
A provision in the final draft of the Basel Convention
prohibits the transport of hazardous waste from OECD to non-OECD
countries for final disposal. In addition, these materials will
also be prevented form transport for recycling purposes by 1997.
13. Direct vs. Indirect Impact: DIRect
The trade in waste from Germany and other Western European
countries to Albania is directly affected by the Basel
Convention's tougher regulations and bans.
14. Relations of Measures to Environmental Impact
a. Directly Related: YES PESTICIDES
b. Indirectly Related: NO
c. Not Related: NO
d. Process Related: POLL
15. Trade Product Identification: PESTICIDES
The materials transported in the Schmidt-Cretan case have
been identified as pesticides, but still manage to fall under the
Basel Convention's broad terminology of "waste". As was plainly
obvious in the Schmidt-Cretan shipment, the pesticides were
completely unusable prior to transport. Rather than undertaking
disposal in Germany, the company opted to send the material to
Albania knowing it would provide limited benefit to Albanian
farmers.
16. Economic Date
Total Shipments: 1,164 tons
Processing Costs: $4,800-$6,600
Total Albanian Imports: $255 million (of which
chemicals play a major role
and Germany is a main partner)
Per Capita Income (Albania): $1,200
Work Force in Agriculture
(Albania): 60%
17. Impact of Measure on Trade Competitiveness: HIGH
Assuming that the provisions of the Basel Convention are
implemented effectively, the trade in pesticides and waste should
be severely limited. However, the real impact will not be felt
until after 1997 when the recycling provision goes into effect.
While the ban on waste transport for final disposal takes effect
immediately, most of the trade between Western Europe and albania
takes place under the guise of "recycling" or "humanitarian aid".
Therefore, the high impact will be felt in the near future.
18. Industry Sector: CHEMicals
19. Exporter and Importer: Germany and albania
E. ENVIRONMENT Cluster
20. Environmental Problem Type: Pollution Land [POLL]
21. Name, Type and Diversity of Species
Name: Many
Type: Many
Diversity: 1,752 higher plants per 10,000 km/sq
22. Impact and Effect: MEDIUM and PRODuct
23. Urgency and Lifetime: Low and 100s of years
24. Substitutes: Biodegradable Products
F. OTHER Factors
25. Culture: YES
Albania's status as a closed society under Hoxha's
oppressive regime created a culture which is almost backwards
compared with the industrialized countries of Western Europe. The
Schmidt-Cretan case exemplifies Albania's status as a victim in
dealing with these more advanced states. Its people are rural,
agriculturally-focused, and predominantly illiterate, thus making
them susceptible to the plans of Western Europe. They are unaware
of the dangers posed by these hazardous chemicals and therefore
willingly accept these imports. The hard currency they receive in
exchange also works as a valuable incentive to importation.
26. Human Rights: NO
27. Trans-Boundary Issues: NO
28. Relevant Literature:
Bibliography
"Albania." U.S. Department of State Dispatch. March 18, 1991.
"Albania Pays Environmental Price for Market Transition." CNN
Transcript Number 318-1, April 29, 1994.
Greenpeace. Press Release. March 2, 1994.
---. March 4, 1994.
---. March 16, 1994.
---. March 25, 1994.
Harrison, Joseph W. "Albania Begins the Long Road Back from
Serfdom." Business America, January 27, 1992.
Jewell, Topsy. "EC PIC Regulation - No Net Gain for Environmental
Protection." Global Pesticide Campaigner 3 (August 1993).
---. "EU Pesticide Aid to Albania." Global Pesticide Campaigner 5
(March 1995).
Manning, Steve. "The Changing Face of Eastern Europe." Scholastic
Update, October 20, 1989.
"Nice Place to Visit." Future Watch, CNN Transcript Number 109,
April 30, 1994.
Toxic Trade Update. Greenpeace. Volume 6.3 (1993).
References
(1) Greenpeace Press Release. March 2, 1994.
(2) ---.
(3) Jewell, Topsy. "EC PIC Regulation - No Net Gain for
Environmental Protection." Global Pesticide Campaigner 3 (August
1993).
(4) ---.
(5) ---.
(6) Greenpeace Press Release. March 2, 1994.
(7) ---. March 4, 1994.
(8) ---. March 16, 1994.
(9) Toxic Trade Update. Greenpeace. No. 6.3 (1993), p.15.
(10) Jewell, Topsy. "EU Pesticide Aid to Albania." Global
Pesticide Campaigner 5 (March 1995).
(11) ---.
(12) Jewell. "EU Pesticide Aid ." Global.
(13) "Nice Place to Visit." Future Watch, CNN Transcript
number 109, April 30, 1994.
(14) ---.