The topic on today's agenda is of truly national importance. We will talk about the country's environmental security, practical tasks ahead of us, and the solutions we must find during our joint work to the problems that face us. We will talk about protecting the environment and improving the quality of life of Russian citizens. The quality of the environment directly influences the nation's health and demographic potential, and reflects our respect for the future of our country, for current and future generations.

Environmental problems face all economically developed countries. These problems were classified as the global challenges of our time at the G8 summit in 2006. We have paid detailed attention to these issues more than once in the State Council of the Russian Federation, the Government of the Russian Federation and in the Security Council. We have adopted an Environmental Policy and the federal law "On Environmental Protection".

The main goal of this phase is to, first and foremost, ensure that decisions that have already been taken are consistently implemented. Secondly, to create an effective system of environmental security in Russia, one that can effectively cope with existing technological and man-made pollution and effectively respond to new problems and challenges in this field.

The economic recovery of our industry, transport and infrastructure sectors constantly increases the pressure on natural ecological systems. According to experts, the rate of growth of toxic waste is at 15-16 per cent per annum, significantly more than GDP growth.

Furthermore, a number of major investment projects have started to be implemented in the regions. They cover large extent of Russian territory, lands that were formerly wild. They include the construction of the North Stream pipeline, the Eastern Siberia – Pacific Ocean pipeline, extraction in the shelf zone of the Barents Sea, the Kara Sea and the Okhotsk Sea, and the development of the Polar Urals. Of course the negative effects of intensive economic activities in these areas should be minimized. We also need to revive the environment that has been contaminated as a result of past economic activity and accidents, in particular in the Krasnoyarsk Region, as well as in Bryansk, Chelyabinsk, Sverdlovsk and several other regions.

We need to pay particular attention to the purity of our sources of drinking water. Environmentalists believe that in some regions between 35 and 60 per cent of drinking water does not meet health standards. That is a very dangerous figure.

We have been unable to stop the contamination of a number of river basins in the European part of Russia, in Siberia, and the highest rate of contamination occurs near the largest Russian cities and major towns.

We need to address problems concerning waste and emissions into the atmosphere, including in connection with the growth of industry and transport, more effectively. It is estimated that between 1999 to 2006 emissions from factories and other stationary facilities grew by more than 10 per cent, and those from vehicles by more than 30 per cent.

Finally, we must learn to effectively protect Russian interests in the international arena, especially with regards to environmental security threats caused by cross-border pollution of the territory of the Russian Federation. In recent times the environmental situation in parts of the Baltic Sea, the Okhotsk Sea, the Black Sea and the Caspian Sea, and in the Amur and Irtysh rivers has worsened.

I would stress that today's discussions of environmental problems should adopt an assertive and pragmatic approach and integrate work designed to protect the environment into the systemic level, and into the daily responsibilities of all levels of state power.

The Government should speed up the adoption of the federal target programme for chemical and biological security for 2009-2013 and, in general, create the necessary prerequisites for the future growth of the Russian economy based on high environmental standards. Incidentally, these technologies tend to be economically more efficient. We will talk about this later. This will be linked directly to the growth of productivity in our country.

The necesary conditions for raising and tackling such large-scale environmental challenges have been put in place. Russia now has the financial and economic possibilities for developing the use of clean technology in industry and introducing resource and energy conservation programmes. We have the necessary legal framework for a public-private partnership in this area. Societal activities in the area of environmental policy have increased. I want to emphasize that these are all important prerequisites so that joint efforts in this area can achieve real practical results. We are able to do this, and we are obliged to do so.

I would like to give the floor to Dmitrii Anatolevich Medvedev for his report

FIRST DEPUTY PRIME MINISTER DMITRII MEDVEDEV: Dear Vladimir Vladimirovich!

Dear colleagues!

In the coming years the quality of the environment will be a key factor in the competitiveness of each Russian region and that of the entire country, not to mention the significant impact these factors have on the demographic situation and the health of the nation. As the President of Russia just pointed out in his opening remarks, in the context of the growth of our economy, it is essential to lay out the environmental aspects of this growth.

I would like to talk first and foremost about the shortcomings of the legal framework of environmental protection. Despite the existence of specific legislation, today this framework does not encourage the conversion to environmentally efficient technologies and nor does it promote conservation measures. The status and regulation of border and cross-border water facilities and specially protected areas remain undetermined. Reforms concerning technical regulation that currently impedes the development of mandatory environmental requirements are proceeding slowly. There are no legal mechanisms for remedying environmental harm. Generally speaking, high environmental standards must now be enshrined in law as a necessary element of Russian social life. I believe that amendments to legislation designed to protect the environment and improve the energy efficiency of the economy may already be made before the end of this year.

Secondly, serious steps should be taken to eliminate the waste that has accumulated as a result of decades of economic and military activity and the man-made accidents that have occurred in the country. Suffice it to say that in Russia more than 80 billion tonnes of solid waste has accumulated in landfills and repositories. At the same time, we should encourage establishing a sector of clean technologies in the Russian economy. One way of doing this is tougher sanctions for businesses that have a negative impact on the environment.

Thus far the only positive trend is a decline in the amount of contaminated waste water, a trend that began five or six years ago. It has declined by about 40 per cent since the beginning of the 1990s. But 40 per cent of surface water and 17 per cent of underground sources of drinking water do not meet health standards as defined by the regulations. There is an increase in emissions of pollutants into the atmosphere, an increase in the amount of waste, and more land affected by these problems. The main culprits are the so-called dirty businesses and vehicles. The highest air pollution from industrial enterprises registered is in Norilsk, Nizhni Tagil, Magnitogorsk, Novokuznetsk and Cherepovets. From vehicles it is in the large cities: Moscow, St Petersburg, and Krasnodar.

Recently, we discussed this at a meeting with the representatives of environmental organizations in Chelyabinsk. People in the contaminated regions expect their working conditions to conform to environmental standards, if only gradually, and that life in cities and towns will develop in a clean environment. But industry leaders are unobtrusively acting in ways that constitute a breach of environmental legislation. The number of such violations increased by a factor of 3.5 from 2000 to 2006. Yet violators have basically nothing to fear, especially because the fines for environmental infractions are often tens or even hundreds of times less than the outlay required for meeting the environmental requirements. I think that we need to seriously reconsider the attitude of the state to dirty businesses: they are not only wasteful of resources but also extremely dangerous to humans. And, in the long run, their economic consequences make them completely uncompetitive.

The practice of issuing businesses temporary so-called individual permits for discharges and emissions is now history. Environmental requirements should be based on technological regulations, not on individual arrangements.

With regard to small businesses, for example in agriculture, the issuance of permits in such cases can sometimes be simplified by forcing them to comply with environmental requirements that can be monitored through a system of environmental audits. Of course we need to develop a system of environmental charges, which provide incentives for businesses to modernise fixed assets and use resource- and energy-saving technologies. There must be financial incentives for business to introduce such technologies. In addition, sectors such as energy, housing, construction and transport need additional measures to improve environmental efficiency and encourage a more sensible consumption of energy and resources.

Thirdly, we need to actively promote environmental innovation now. This is one of the most lucrative and fastest growing sectors in the world economy, and offers an opportunity for considerable budgetary saving. According to the experts, in 2006 more than 50 billion dollars was invested in renewable energy technology. That is about a 33 per cent increase, and it is expected that by the end of 2007 that this investment will total around 70 billion dollars. That is a huge amount of money. In fact, such innovative technologies have become a large self-sustaining market with tremendous potential. Russia must move quickly to gain a foothold in this market.

And, finally, we cannot have a clean technology sector without addressing waste disposal and recycling. I believe that the best way to deal with this situation is the establishment of our own waste processing industry. This is particularly true in agriculture. As is well known, the waste products of agricultural production account for a significant amount of the fuel, including electricity, in the rural areas of developed countries.

One final point: we should take into account the growing concern in the world occasioned by changes in environmental conditions and climatic factors, and keep in mind that, in the foreseeable future, Russian businesses could face restrictions that would limit their access to international markets. The pretext here will be the negative environmental impact of our products. All concerned federal and regional agencies should now be thinking about such a threat.

In the near future we must seriously improve the effectiveness of public administration, the monitoring and overseeing of environmental protection and the elimination of the existing reduplication in such services. Different branches of the federal government are now involved in this area. Different departments have supervisory powers in various environmental areas. I think that we can streamline their functions and clearly delineate the powers of environmental impact assessment and environmental monitoring. We should also complete the process already set in motion concerning the division of powers between the federal and regional authorities in environmental questions.

It is necessary to put together a modern environmental infrastructure, with a view to licensing and certification of environmental management and environmental risk insurance (which is almost non-existent in Russia, and is uncompetitive where it does exist). We should develop an environmental audit and create a more effective programme of statistical surveys concerning the level of environmental pollution. Resolving these issues involves a joint effort by all levels of government and environmental organisations. They are certainly prepared for it. We should involve environmental movements more in monitoring the environmental situation to help predict and prevent biological threats. In this sense, today's meeting of the Security Council should give a real boost to the resolution of the above-mentioned problems.