AMBASSADOR'S INTRODUCTORY MEETING WITH MINISTER OF

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000167 SIPDIS E.O. 12958: DECL: 02/25/2019 TAGS: PGOV PREL EAGR EAID ENRG SENV AM SUBJECT: AMBASSADOR'S INTRODUCTORY MEETING WITH MINISTER OF NATURE PROTECTION REF: A) 07 YEREVAN 1311 B) 07 YEREVAN 657 YEREVAN 00000167 001.2 OF 002 Classified By: Ambassador Marie L. Yovanovitch. Reason 1.4 (b/d) SUMMARY -------------- ¶1. (C) In their introductory meeting, Minister of Nature Protection Aram Harutyunian thanked the Ambassador for the assistance provided by USAID on a range of water projects as well as the work of Peace Corps volunteers in environmental education. He requested that USAID assistance be extended beyond several now-completed projects to ensure that Armenia realizes the full benefits of this work. Harutyunian expressed interest in regional cooperation on environmental issues, and stressed the Ministry's commitment to achieving an appropriate balance between environmental protection and economic development. End Summary. APPRECIATION FOR USG COOPERATION -------------- ¶2. (C) Ambassador met February 25 with Minister of Nature Protection Aram Harutyunian, who focused primarily on the cooperation, dating from 2002, between the Ministry and USAID on a range of water resource management projects. He called this one of the most successful areas of USG-GOAM cooperation, which led to development of a new water code, a national policy on water use, and a national water program. As a result of these efforts, the Ministry has established a national water basin management authority, with five water basin areas, and has been able to inventory existing water resources. The Ministry now hopes to decentralize management to the local level, and the Minister expressed hope that this project could continue with USAID assistance. Harutyunian also commended the work of Peace Corps volunteers on environmental education projects; he asserted the Ministry has a good relationship with the Peace Corps. MINISTRY INITIATIVES -------------- ¶3. (C) Harutyunian noted that the Ministry is exercising tight control over use of water from reservoirs and Lake Sevan, claiming that it has been eight years since water from Lake Sevan was used to generate hydroelectric power. The Ministry is also developing plans for Armenia's two national parks--Sevan and Dilijan--with regard to appropriate use of water and forest resources, and protection of biodiversity. The Ministry is also developing legislation to implement self-monitoring by enterprises on their air and water emissions, which would feed into an online database where anybody could access information about companies' emissions and their compliance with environmental regulations. (NOTE: Operating the poorly-conceived Soviet-era Lake Sevan hydro-electric generators--as was done by necessity in the early 1990s before the re-start of Armenia's nuclear reactor--has the effect of draining lake water more quickly than it is replenished, resulting in the steady lowering of the water level. Armenians accordingly consider the Lake Sevan hydro cascade an emergency last resort power source, in the event of a catastrophic loss of other capacity, such as an extended interdiction of natural gas or an emergency shut-down of the nuclear plant. END NOTE) ¶4. (C) Another goal of the Minister is improved cooperation between Armenia, Georgia and Turkey on environmental issues. The Ministry is working with the German agency KfW to develop a transboundary national park around Lake Arpa that would incorporate territory of all three countries. The Ministry is also undertaking with KfW and the Worldwide Fund for Nature a project to develop the Caucasus Protected Areas Foundation, which hopes to raise EUR 50 million for environmental projects. The Minister said he would send a request for U.S. assistancewith the project as well. BALANCING ENVIRONMENT AND ECONOMY -------------- ¶5. (C) Harutyunian insisted that the GOAM is doing its best to mitigate the environmental impacts of mining and other resource exploitation. He noted that until President Sargsian's government took office, the Ministry of Nature Protection had responsibility for two potentially conflicting activities: on one hand inventorying and protecting natural resources, and on the other (together with the former Ministry of Trade and Economic Development) managing their exploitation. He asserted this conflict is one reason that natural resources exploitation has now been placed under the purview of the Ministry of Energy. (COMMENT: The Nature Protection Ministry's notorious record, under prior ministers, of egregious corruption in administering Armenia's natural resources being another unspoken reason. END COMMENT) YEREVAN 00000167 002.2 OF 002 ¶6. (C) Asked about the impending closure of a copper smelter in Alaverdi, operated by the Armenian Copper Program (the largest single source of air pollution in Armenia), Harutyunian indicated that the Ministry had pressed ACP to introduce new controls to regulate sulfur dioxide emissions. He attributed the planned closure to the current economic crisis, but expressed hope that ACP's mining project in the Teghut Forest (Ref A) will provide employment to many of the 500 smelter employees likely to lose their jobs. (Comment: We have been aware of plans by ACP to close the smelter for over a year. ACP's executive director has told us the decision to close it is the result of both increased fines to be levied by the Ministry for sulfur dioxide emissions and because even with upgrades that would reduce emissions, the scale of the facility is no longer competitive. In addition to air pollution, ACP has been a terrible polluter of the Alaverdi watershed. Alaverdi, in fact, is one of the most polluted locales in Armenia, because of ACP and other Soviet-era industrial plants, many of which are now shuttered. End Comment). ¶7. (C) Harutyunian said that the International Atomic Energy Agency (IAEA) will play a major role in evaluating safety and environmental issues regarding the new Armenian Nuclear Power Plant (ANPP). Armenia's Nuclear Regulatory Agency was previously a part of the Ministry of Nature Protection but is now an independent agency. Nonetheless, the Ministry will try to remain engaged in the development of a new nuclear facility, for example in dealing with environmental impact studies and potential disaster response/consequence management planning. COMMENT -------------- ¶8. (C) We are pleased with Harutyunian's positive view of USAID cooperation on water projects and agree that the program has been a comprehensive approach to reform and contributes to certain EU directives with which the GOAM must comply. However, we have seen some foot dragging on decentralization from the GOAM in recent years that has slowed down reforms, and the GOAM has also been slow to resolve internal institutional rivalries. While we agree on the merits of water management and decentralization, AID has made a strategic decision that our emphasis should be on a follow-on to our assessment of municipal water financing options. The next crucial step will be in assisting the government to find ways to mobilize mostly private capital to rebuild the water and wastewater treatment systems. AID will help the municipality of Dilijan build a wastewater treatment facility through a private-public partnership of USAID, UNDP, the GOAM, and Coca Cola. ¶9. (C) While Harutyunian says all the right things about environmental protection and taking a balanced approach to economic development, the Ministry has long been a corrupt and ineffectual agency, and environmental groups have called into question its forest management practices, as well as its approval under Harutyunian of the Teghut Forest mining project. It is still not clear whether transferring the natural resources portfolio-- and relevant career staff--from the Ministry of Nature Protection to the Ministry of Energy has effectively addressed the problems of corruption and malfeasance or whether it was simply a cosmetic change to address negative public and international perception. In any case, the move does usefully free the Nature Protection Ministry to focus its efforts on its environmental protection responsibilities and introduce some inter-agency checks and balances on resource management decisions, which seems constructive. YOVANOVITCH