Hungary's Green Minister

02/24/2015 06:38 pm ET | Updated Apr 26, 2015

When I first met Zoltan Illes in 1990, he was 29 years old and in his first month as the youngest state secretary in modern Hungarian history, working in the ministry of environment. He granted me quite a long interview and was unusually frank not only about the environmental situation in the country but also about the challenges he faced in his own position. At the end of the interview, he gave himself a 70-80 percent chance of making it through his first year without being fired.

As I learned when I met up with Illes again in May 2013, he only survived in that initial position for six months. "I had a very challenging half a year in 1990," he told me in an interview in his office at the Central European University in Budapest. "I did my best for the environment. And finally they fired me. Officially, in written form, the minister wrote that 'you are dedicated to the environment.' Well, come on, I was sworn in to do that! Then he wrote, 'But we have to consider other interests, and you are not capable of doing that. You are for the environment and that is why we are firing you.'"

After that short tenure in government, Illes occupied a number of different positions, including as an advisor to the EU's ambassador in Hungary. He joined Fidesz in the 1990s and served in parliament. In 2010, he returned to government once again as state secretary of rural development, which includes the portfolios for environmental protection, nature conservation, and water management. This time, he has held the position for several years.

He was eager to return to government. "I understood that if I didn't accept the position, then I would destroy my past and what I introduced into the field of environmental protection over the last 20-30 years," he explained. "I didn't want to miss the opportunity to prove myself not only as an outsider but as an insider in power to make change. For several decades, everyday I went to sleep understanding what I didn't do that day and what was still remaining to do."

He has certainly learned a thing or two since he first worked in government. "You have to accept the hierarchy of administration," he told me. "If someone doesn't accept hierarchy, they should be, like I was previously, a street fighter -- which is an excellent opportunity for high-level performance in the field of environmental protection. And maybe I will return to that after my time as a 'general' in this position."

In his first two years in the position, he focused a lot on job creation. "The government was also very actively trying to organize work opportunities for laid-off people, particularly those without education who could offer only their physical strength," Illes told me. "It doesn't matter whether they are poor Gypsies or poor Hungarians, there are few workplaces for them. Actually water management is one of the best places for such work. You can clean the channels with heavy machinery. But in some places you can't manage it except by physical work by hand." Before this aspect of water management was passed over to the interior ministry, Illes hired 11,000 employees for this kind of work.

In 1990, he told me that we "have to find somehow a third way. Western countries are showing that environmental protection was also pushed aside. On the other hand, the Communist regime showed that it could not solve these problems."

Today, he is more a believer in one way: a set of global standards for addressing environmental issues. "We became part of the globalized world," he concluded. "According to my experiences and my beliefs, the same standards and policies should be introduced around the world. Even if we push out ecocolonialism from our country, it will go to Ukraine or Romania. If you push out from there, it will go to the Caucasus. I hope we don't have to wait 100 years for it to go all the way around the world and back again before we remove those comparative advantages of the different laws and regulations in different countries."

We talked about what drew him into doing work on environmental issues, the difficulty of enforcing standards however good they might be, and the rise and fall of the Hungary's notorious water lobby.

The Interview

One of the concerns you had 23 years ago was foreign companies exploiting the difference between the environmental regulations in Hungary and the EC -- for instance, the recycling of metals that release arsenic and the sale of a French nuclear power plant that didn't meet French levels. Was that extensive? Did it continue to happen?


Again this question reminds me that I didn't answer the previous question. You were asking me about Hungarian lobbies, like the water lobby. The political changes, but mainly the economic changes, that took place in Hungary after 1990 helped to destroy these big lobbies. You will not believe the reason. Money! The water lobby, for instance, fell into millions of parts. Before 1990, 95 percent of the Hungarian public had access to fresh potable water from the tap. Nowadays, it's 97 percent -- those last couple percentages are very difficult to reach. During the Communist time, 95 percent of public got that water and 33 companies managed and provided that water. How many of those company nowadays exist? You would be shocked: 400!

We don't need 400 companies, but each director and division chief from those 33 companies became a director of a smaller private company, which provides water maybe only to 22 settlements. As a result of those political and economic changes, there was a new interest to destroy the water lobby system. Every individual was pulling apart as much as he or she could manage, so the structure fell completely into parts. The efficiency dropped enormously. At the same time, there has been often useless investment into the technical system that produces and distributes the fresh potable water.

It wasn't only individuals. It was also the municipalities that were charging people more for their water. You could see the corruption in the money that went into the renovation of a municipality-owned theater or the financing of the municipality basketball team. Basketball is a very important sport, but what's its relationship with potable water? It was financed from the potable water fee because the municipality didn't have enough money to support that sport. That was one outcome of that privatization process.

Second, the privatization of monopolies was a great mistake. It was an urban legend that private was always efficient and environment-friendly and only the government could destroy the environment. According to a Harvard University report on privatization processes in Central and Eastern Europe, the outcome was detrimental to the entire region because the living standard fell when we relied on only the market.

Then, answering your question about eco-colonization, yes, I'm still fighting the phenomenon that I faced at that time. There's a German company, for instance, that didn't fulfill the requirements and started to argue that if it had to pay a fine according to Hungarian laws, which are in accordance to EU regulations, then it would move to another country. I told them, "Come on, give me a break. Please, go!" That was my same suggestion for several years to several companies, and they never moved away. The comparative advantages keep them here: good workforce, highly educated, wages comparatively smaller than in the United States or Western Europe. And also natural resources like limestone -- you cannot go to Romania or Ukraine because there's no limestone.

In several cases, we are very strict in enforcing the laws and regulations and that is why these companies are not very happy. They are losing profit and that is why they are heavily attacking us in the political arena. They won't say to their respective governments that they were robbing Hungarians or realizing huge extra profits. They'll say that Hungary changed the law, and we are pushing them out because they are foreigners.

Actually, in the field of waste management, the Hungarian government made a decision that waste management - the collection and transportation of municipal solid waste - must be a public service, as in Germany and Austria. Public service in EU regulations means that there is no room for competition: only state- and municipality-owned companies can do it. But German and Austrian firms have gained a strategic position in this country. Out of 3,200 municipalities, one-third of them have been "occupied" by these German and Austrian companies collecting and transporting municipal solid waste. They can only do this now if they have 49 percent of the ownership, maximum. The company doing this service must be, at minimum, 51 percent owned by the municipality or the national government. It turned out that in several cases, what these German and Austrian companies gained in revenue, only 1/3 covered the cost of their activity. They were skimming off 2/3 through overcharging collection fees and transportation costs.

This current government would like to remain popular with the public and, if possible, win elections. And the government will remain popular if Hungarian citizens perceive its actions as benefiting them. If you compare the monthly costs versus revenue of Hungarian and Western European families, you see huge differences. From the salary of a Hungarian couple with two kids, a big chunk will go to these services, mainly utilities. That is why the current Hungarian government decided to decrease the cost of utilities by 10 percent. Of course the companies are screaming that it's no longer profitable and they'll stop providing these public services. And the prime minister says, "Yes, we don't want public services that are profitable. We want zero sum -- no profit." Of course it's acceptable to have a certain margin for new investments in that field. But these companies have been providing these services for extra profit, not just a little profit. Of course now they're running back to Paris or Berlin to tell the prime minister and chancellor that those bad Hungarians are pushing us out of the Hungarian market and they don't let anyone talk about the problems. They are making it a political issue. But this is not a political issue. It's a question of money and profits, like always.

When we talked 23 years ago, you said that the Communist system produced an enormous environmental legacy. But you had been in the West and you knew that capitalist systems also produced an enormous amount of pollution.

To read the rest of the interview, click here.