WARSAW
BUSINESS JOURNAL S i n c e 1 9 9 4 Po l a n d ’ s l e a d i n g
business magazine in English
MAY 2020 ~ No. 5 (57)
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Greener & Happier Earth?
SPECIAL REPORT INSIDE: The ABC’s of Poland’s Office Market
MAY
32
7 In Review
News Abortion Protests in Poland
10 Features
Circular economy Ambassadors' page Climate change Climate crisis Sustainable tourism Coronavirus cripples Poland Waste management Sugar Tax in Poland
37 Tech 10
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News Interview: Robert Szczepankowski, CEO of T4B Op-ed Teleworking
46 Talking points
Interview: Danuta HĂźbner, Polish politician
51 Lokale Immobilia
News The ABC's of Poland's office market
68 Opinions
Taxation in Poland by Professor Witold Modzelewski Marketing in times of crisis by Morten Lindholm
71 Life + Style
Must-haves For Her and For Him
76 Events Past and Future
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PUBLISHER'S NOTE Morten Lindholm Editor-in-Chief/Publisher mlindholm@valkea.com
Sankhyayan Datta Managing Editor
sdatta@wbj.pl
Krzysztof Maciejewski Business & Web Editor
kmaciejewski@wbj.com
Kevin Demaria Art Director
kdemaria@valkea.com Contributors
WHEN THE WBJ EDITORIAL TEAM and I planned key themes for 2020 at the beginning of the year, nothing seemed more important to us than the climate issue. However, while writing this note on Earth Day (April 22), slightly over a quarter of a year later since we began planning, it seems like the climate emergency has been forgotten, at least temporarily. And perhaps also temporarily, some of the issues relating to the threat to Mother Earth has also found a cure, sadly only because of the world coming to a standstill. Our editorial team has, however, pushed forward to get insights on the status of climate-connected issues in Poland and perspectives from representatives of other countries present in Poland. In the current magazine, therefore, we look into the influence of and response from businesses and leaders. I am sure that climate will be a recurring issue for years to come. I hope the breakup of business as usual also will have a positive effect on ideas, innovation and solutions to world climate. In this issue, we also bring you the essence of what has happened in Poland and how the pandemic will influence the country. Last but not least, we have created an overview of what Poland has to offer today and what is to come – the ABC’s of Poland’s office market. It is a sector that has experienced incredible success and growth both due to domestic demand but also due to Poland’s successful growth of talent in the office sector. On a different note, my favorite question these days is: “How do you know?” Seldom have I met and heard so many ‘experts’, opinions and estimations, in times, when, to be honest, “the only thing we know is that we don’t know”, and the possibility to predict the future or even have a correct insight into future events is more than difficult. Let me, therefore, end by quoting Sir Winston Churchill: A pessimist sees the difficulty in every opportunity, an optimist sees the opportunity in every difficulty. So let’s look forward with a desire to influence and make the best out of these unusual times. I wish you all the best, stay safe and healthy, and may the good fortunes be with you and your business.
MORTEN LINDHOLM
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March 29, 2020 Eerily empty streetscapes in the center of Poland’s capital Warsaw under quarantine are stripped of commerce. Poland went into lockdown owing to the outbreak of the infectious coronavirus disease (Covid2019) by March 12. The World Health Organization recognized the outbreak as a pandemic on March 11. Over time, Polish authorities suspended school and university classes, canceled mass events, limited public gatherings and restricted non-essential travel. Officials also imposed rules on social distancing and wearing face masks in public. PHOTOGRAPH BY KEVIN DEMARIA
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NEWS HIGHLIGHTS OF THE PAST MONTH FROM WBJ.PL
We will not be told, in foreign languages, what kind of system we should have in Poland and how Poland’s affairs should be taken care of President Andrzej Duda, an ally of Poland’s governing right-wing populist Law and Justice (PiS) party, in support of PiS’ new disciplinary regime for Polish judges, on January 17, 2020 (more below)
HISTORY
PHOTOGRAPH KPRP/KRYZYSZTOF SITKOWSKI
Poland hails ‘cursed soldiers’ Polish Prime Minister Mateusz Morawiecki said recently at an event commemorating the National Day of Remembrance for “Cursed Soldiers” that “‘Cursed Soldiers’ are the fathers of Solidarity and thus are the fathers of our independence.” “Cursed soldiers” is a term used to describe various clandestine Polish anti-communist resistance movements formed in WWII and its aftermath. The popularity of the event has increased in recent years and been heavily promoted by nationalist circles and Poland’s governing right-wing Law and Justice (PiS) party. The subject of the partisan units is controversial because along with glory, they are associated with violence and cruelty. They were responsible for massacring several ethnically Belarusian villages on Polish territory in 1946 and slaughtering ethnic minorities. AUTOMOTIVE INDUSTRY
VW Poznań plant resumes car production After a five-week hiatus owing to the outbreak of the coronavirus disease, the Volkswagen plant in Poznań, western Poland, is
gradually resuming the production of cars, the German carmaking giant said on April 27. The revival took place on a part-time basis, at around 20 percent of total production capacity. The spokesperson of the company informed that about 25 percent of employees returned to work in factories in and around Poznań. Bearing in mind the safety of employees and the need to maintain the recommended distance between workers, the pace of production lines has slowed down, and the number of cars produced is adapted to new conditions. Jens Ocksen, VW Poland CEO, has been quoted as saying that “experience from the Chinese market allows us to believe that in Europe the situation will stabilize soon enough to be able to gradually increase production capacity.” Volkswagen Poznań is the largest car manufacturer in Poland and the largest employer in the region employing over 11,000 people. Simultaneously, the Volkswagen group, which also owns the Skoda, Audi, Bentley, Porsche, Lamborghini, Bugatti, Ducati and Seat brands, is resuming production at its plant in Wolfsburg, Germany, as well as at factories in Portugal, Spain, Russia, South Africa, the Czech Republic and the US soon.
POLITICS
Ruling party leader criticized for visiting ‘closed’ cemeteries Jarosław Kaczyński, the de facto leader of Poland’s governing Law and Justice (PiS) party has been vehemently criticized by the opposition and members of the public for displaying a callous and reckless disregard for public health during the coronavirus lockdown by visiting a string of cemeteries. His visits have been touted as “state ceremonies” by his subordinate politicians in the party. Kaczyński, who is a Polish MP and does not hold any official portfolio, is known to rule the country autocratically. The PiS strongman paid tribute to the victims of the Smoleńsk disaster at Plac Piłsudski in central Warsaw. He also visited the grave of his mother, Jadwiga Kaczyńska, who rests at a cemetery, in the north of the Polish capital. Due to the outbreak of the coronavirus, the Archdiocese of Warsaw banned visiting cemeteries from April 2-11. However, the PiS chairman was admitted on April 10. In addition, people accompanying the politician did not keep a safe distance, as it emerged from the images. The Smoleńsk air disaster occurred on 10 April 2010, when a Tupolev Tu-154 aircraft
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>>> 7
In Review | DOMESTIC NEWS of the Polish Air Force crashed near the Russian city of Smoleńsk, killing all 96 people on board, including Jarosław Kaczyński’s twin brother and the then president, Lech. Their mother did not die in the crash. SOCIETY
Irish town to sever ties with Polish town Fermoy in Cork is to suspend or terminate its twinning arrangement with a town in Poland that has declared itself an “LGBTFree Zone”, reported the Irish Examiner daily on March 5. Nowa Dęba is one of around 100 Polish municipalities that have adopted resolutions against “LGBT ideology” and “propaganda”. Activists in Poland have now created an “Atlas of Hate” showing that around one-third of the country is now essentially an “LGBT-Free Zone” – an area the size of Hungary. The decision comes just weeks after the French town of Saint-Jeande-Braye broke its partnership with Tuchów in Poland after it was declared an LGBT-free zone. Poland is one of just six European countries that has not yet legalized gay marriage. The EU has already condemned the creation of “LGBT-Free Zones”. In 2019, a study by the University of Warsaw found that two-thirds of LGBT people in the country have experienced psychological or physical violence. A total of 70 percent of LGBT teenagers in Poland confessed to having had suicidal thoughts. Last year, people taking part in an equality parade in the city of Białystok were attacked by far-right protestors. The attack occurred after the equality parade was publicly denounced by the local Catholic archbishop.
POLITICS
Poland’s government gets pushback on postal vote The Polish government’s determination to move forward with a scheduled presidential election in May by making it an all-postal vote has sparked anxiety and anger amid the coronavirus pandemic, with critics slamming the plan as a threat to the health of both the public and Poland’s democracy.
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Health experts have said that voting by mail is much safer than doing it in person at polling stations during the pandemic. But with medical research ongoing, there is the worry that mailed ballots may carry lingering traces of the virus that could potentially infect voters, postal workers and election officials tallying the returns. Political concerns are probably even bigger than fears about safety in the run-up to Poland’s May 10 election. Critics have voiced suspicions that the ruling conservative nationalist and populist Law and Justice (PiS) party insisted on holding the presidential vote because its candidate is strongly favored to win now but could lose support during a post-pandemic economic downturn. Meanwhile, the head of the Postal Workers’ Union has said that universal postal voting for May’s election “is a very bad idea, absurd”. Postal staff fear the health risks of handling millions of votes during the epidemic and point out they don’t have enough manpower anyway. The UK, US and Germany, which have large Polish populations, have barred embassies from organizing in-person voting. The European Parliament has adopted a resolution criticizing Poland’s May elections, saying they may threaten public health, not be free and fair, and violate the Polish constitution.
(180), Turkmenistan (179), Eritrea (178) and China (177) were the lowest-ranked. INTERNATIONAL
Poland slammed for refusing refugees The European Court of Justice (ECJ) has ruled that Poland, Hungary and the Czech Republic breached their obligations under EU law by refusing to take in refugees. The ECJ said in its ruling on April 2 that these countries had failed to accept their share of 120,000 asylum seekers who had arrived in Italy and Greece, under a relocation program agreed by the European Council in 2015. It also found Poland and the Czech Republic guilty of failing to fulfill their obligations under an earlier Council decision with regard to 40,000 migrants. The ruling confirms an opinion by an advisory body to the court last year. The European Council – composed largely of national government leaders and heads of state – adopted their decisions in September 2015 at a time when more than a million migrants had arrived in Europe, most fleeing war in Syria and Iraq.
INTERNATIONAL
World Press Freedom Index: Poland lowest ever Poland has dropped to rank 62, three notches below its 2019 rank, in the 2020 World Press Freedom Index unveiled on April 21. The report states “the government’s drive to subjugate the judicial system and a growing tendency to criminalize defamation are beginning to have an effect on the freedom of expression of independent media outlets … Partisan discourse and hate speech are still the rule within stateowned media, which have been transformed into government propaganda mouthpieces.” This is the fifth year in a row that Poland has recorded a decline in the ranking, all of which have taken place under the current right-wing Law and Justice (PiS) government that came to power in fall 2015. The annual press freedom list is produced by the campaign group Reporters Without Borders (RSF) which surveys the state of the media in 180 countries and territories. Among the nations with the top ranks are Scandinavian countries Norway, Finland, Denmark and Sweden while countries like North Korea
AGRICULTURE AND CLIMATE
Severe drought looms large over Poland Despite that the worst drought in recent times looms large over Poland, Marek Gróbarczyk, the Polish maritime minister has said that there will be plenty of drinking water in Poland, but you need to save it. “We will not run out of [drinking] water because the groundwater level is at a decent level. Our research shows clearly that it remains at an average level. I am talking about deep water,” Gróbarczyk claimed in an interview for RMF FM, a private Polish broadcaster, on April 27. “Water cannot be wasted, but it cannot be a luxury and constitute a significant part of the household budget,” he added. However, Poland’s met office (IMGW) has stated in a press release that “the water level remains in the low water zone and the water deficit occurs in the root zone of plants,” adding that “river flows are extremely low and soil moisture is below 25 percent.” Meanwhile, Michał Woś, environment min-
Curated from: ap.org, bbc.com, euronews.com, gazetaprawna.pl, irishexaminer.com, isbnews.pl, pap.pl, pinknews.co.uk, reuters.com, rsf.org, oko.press, tvn24.pl, wp.pl, wysokieobcasy.pl
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ister, believes that as much as “70 percent of water in Poland is used for the needs of the energy sector.” And Jan Krzysztof Ardanowski, agriculture minister, has said that if it turns out that this year there would be less food due to drought, then there will be a decrease in export. According to an announcement of Polish State Water Management (PGW WP), in March, the rainfall was the lowest in 30 years, which means that the risk of drought increases. Atmospheric drought has most intensely been experienced in southern, central and western Poland, PGW WP stated on April 20. In most of those regions, the level of precipitation in March was below 40 percent of the average for the month. INFRASTRUCTURE
‘Railway Plus’ act implemented The “Railway Plus” act has come into force. The new regulations, which were developed before the outbreak of the coronavirus, are ultimately intended to improve rail communication in regions across Poland, as well as restore inoperative lines and prevent the liquidation of the railway infrastructure, the country’s Railway Transport Office said on April 27. Thanks to the new provisions, railway connections to 20 locations will be restored in the initial stage, the Polish government has claimed. The infrastructure ministry data shows that in 1990 there were nearly 26,000km of railway lines in Poland and about 7,000km have disappeared from operation since then. By rail, it is no longer possible to reach nearly 100 cities and over 10,000 residents. ENERGY
Poland to miss renewable energy consumption target: experts Poland will not reach a 30 percent share of renewable energy in energy consumption before 2026, PIE, a Warsaw-based economic think tank, has said. Poland is most likely to achieve a 30 percent share of energy from renewable sources in energy consumption finally in 2026-2035, according to the report “Foresight Polska 2035. Experts on the future” published on April 27. According to the majority of experts surveyed, a nuclear power plant may start operating in Poland after 2035. The report is a summary of the results of the research carried out by the Delphi method. This method is used to predict long-term processes or phenomena of which knowledge is insufficient or uncertain.
SOCIETY
Poland abortion: protests against tightening law Protesters in Poland have defied the coronavirus lockdown to oppose a proposal that would almost completely ban abortion. Public gatherings are banned in the country, but videos show people in the streets of Warsaw and the city of Poznań, on April 14 standing around 2m apart and holding placards. Others hung posters on bikes or posted videos online in a “virtual protest” as the Polish parliament debated the ban on abortions of fetuses with serious abnormalities on April 15. Poland’s abortion laws are among the strictest in Europe – it is only allowed in cases of rape or incest, if the mother’s life is at risk or if the fetus is seriously compromised. The draft legislation would ban terminations of a fetus even if tests show it to be irreversibly damaged. Currently, that accounts for around 98 percent of legal abortions in the country. Another bill up for debate would criminalize “the promotion of underage sex”, which women’s rights groups say in effect bans sex education in schools. It states that people who encourage anyone under the age of 18 to have sex could face a maximum of three years in prison. Activists fear that conservative politicians including the ruling Law and Justice (PiS) party, are taking advantage of the coronavirus lockdown preventing opponents from organizing large street protests. Amnesty International and Human Rights Watch have called on politicians to reject the bills, which were first put forward in 2016 by the nationalist PiS party. But huge street protests in which people wore black caused the government to withdraw the proposals. “The Polish government’s focus during the pandemic should be to protect people’s health and rights, not diminish them,” Hillary Margolis, Human Rights Watch’s senior women’s rights researcher, has been quoted as saying by the BBC. The bills began as a citizens’ initiative that enables groups to propose legislation if they collect 100,000 signatures. It is unclear if PiS will support the bill. An online petition opposing the bills has gained more than 700,000 signatures and people shared videos using the hashtag #ProtestAtHome. Several opposition MPs joined, posting pictures on Twitter, a social networking platform. Meanwhile, in an interview with the Catholic weekly “Niedziela”, President Andrzej Duda reassured concerned priests. He assured that he would sign the law tightening anti-abortion regulations and emphasized that abortion is murder. Duda, a PiS ally, is seeking re-election in 2020. PiS has been accused of working hand in glove with the Catholic church and “porkbarrel politics” as the party seeks to curry favour with the electorate most of whom are practising Christians. According to the government of Poland’s 2014 statistical yearbook, 85.8 percent of Poland’s population is Catholic. Protesters, including Anja Rubik, a New-York-based Polish supermodel, activist, philanthropist and businesswoman, took to Instagram, a photo-sharing app, to voice their concern. Instagrammers flooded the Polish president’s account on the app with graphics supporting abortion.
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The Polish rubbish market is booming, in a bid to meet the strict EU recycling requirements. However, residents in the country are becoming increasingly annoyed with often illegally imported waste. Up until July 2019, the UK sent an estimated 12,000 tonnes of recyclable plastic to Poland each year. In recent years, Poland has seen a rise in an organized crime syndicate dubbed “the garbage mafia� that illegally disposes of imported plastic waste by burning it.
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FEATURE
GOING FULL CIRCLE BY KAMILA WAJSZCZUK
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The idea of an economy that uses all available resources in a rational way seems simple. Yet, decades of reckless consumption have left the world with piles of waste, water shortages and high greenhouse gas (GHG) emissions, summing up to what we now call the climate crisis. Apart from pledges to cut emissions, countries and institutions have been increasingly interested in a circular economy. How is Poland doing in that aspect?
PROFESSOR BOLESŁAW ROK from the Kozminski University, who specializes in sustainability management, believes that the advantages of a circular economy for companies are obvious. “Once you see how much you are paying for excessive purchases, and later, for waste disposal, then again for new raw materials, it is easy to see that by increasing resource efficiency – or how much we use in relation to production volumes – you are able to save a lot,” he said. In his opinion, many Polish companies take measures to increase their resource efficiency. “Very often these are obvious changes: returning things previously regarded as waste into the production cycle. For example, when Orange [a French multinational telecom operator] collects used phones from the market to fix those that are repairable and once again puts them up for sale, this generates additional revenue,” he explained. Examples of actual circular economy initiatives are easy to find, though not as common as they should be. The Kozminski University itself is the only Polish business school that has made it to the Positive Impact Rating, thanks to activities that also encompass circular economy. The university encourages its students to scrap single-use plastic. It has also enabled electric vehicle charging. >>>
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FEATURE
POLAND’S WASTE MANAGEMENT IS NOT EFFICIENT ENOUGH
French multinational telecom operator Orange collects used phones from the market to fix those that are repairable and once again puts them up for sale.
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recently equipped with a water recycling unit. The country’s largest energy firm PGE has taken steps to collect solid remains of coal-burning and sell them to construction material producers. And last but not least, Syntoil – a Polish company – was specifically established to transform contaminated soot from industrial processes into carbon black, a material used in manufacturing rubber products. STILL A LOT TO DO In a report issued in December 2018 to accompany the COP24 climate summit held in Katowice in southern Poland, Deloitte, a multinational professional services behemoth, stressed that Poland’s economy has the third highest use of materials in the EU and a material efficiency rate 3.5 times higher than the EU average. The country’s energy mix is also highly dependent on fossil fuels, it’s economy maintains an energy usage level higher than the EU average and a low share of renewable energy consumption. To add to this, Poland’s waste management is not efficient enough. “In the longer term, reducing the use of materials and energy by 1 percent in all sectors could generate a total added value of PLN 19.5 billion,” the document adds. The experts also suggest that Poland could reduce energy and material use by more than 1 percent, especially in the bioeconomy, construction and transportation sectors. An analysis showed that by cutting 20 percent of the costs in these sectors and investing that sum, the GDP could gain as much as PLN 167 billion. The report’s authors believe that a state intervention, preferably based on behavioral economics, is necessary to fully carry out circular economy measures. GUIDELINES Just like Deloitte, Professor Rok remarked that the resource efficiency of Poland’s economy remains much lower than the EU average. “This means our economy still squanders a lot, though less and less over time,” he said. He stressed that instead of laying people off as a means of costcutting, companies should consider
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COMMON THREAD Beverage giant Coca-Cola HBC’s Polish unit focuses on waste management and recycling in its approach to the subject. It is co-financing a campaign to collect plastic waste in areas covering 40 percent of the country’s territory, as well as funding selected-waste-collection bins and educating consumers. Last year it helped install 10 “recyclomats” in Warsaw, which in turn helped collect some 70,000 plastic bottles, 16,000 glass bottles and almost 27,000 cans, Katarzyna Borucka from Coca-Cola HBC Polska stated. Poland-based shoe retailer CCC has carried out a complex analysis of the resources it uses and is constantly monitoring its own progress. It has taken steps to reduce packaging, as well as packaging waste, by reducing repacking processes, reusing warehouse packaging and recycling more than 90 percent of its waste. In a more visible move, the company has stopped using plastic bags in retail and introduced UNICEF-branded paper bags that are made from recycled material, its press office explained. Carrefour Polska has partnered with Catholic charity Caritas Polska to ensure less food is wasted. Cosmetic giant L’Oréal’s Warsaw plant has been
CCC, a Polandbased footwear and accessories giant, has stopped using plastic bags in retail and introduced UNICEF-branded paper bags that are made from recycled material.
how much money is lost in purchasing various materials or in infrastructure depletion, on electricity, natural gas and other utilities. “We can observe a reduction in the use of some utilities but this stems from a sharp rise in their prices. This has not really been the case with resources so far but it is inevitable in the future and it will result in higher efficiency, sooner or later,” he added. “Every sector has difficulties in implementing higher efficiency. To give a simple example – waste management in construction may generate a material that could be used to build new roads. It turns out, however, that regulations on construction materials do not allow for the use of such a resource. A large number of legal restrictions influence contractors’ decisions to buy new materials, even if they are more expensive. The construction sector generates about onethird of all waste in Poland. I do not say that the role of the law is not to constrain companies but attention should be paid to making it easier for companies to use recycled materials,” he emphasized. In September 2019, Poland’s government adopted a document named the “Circular Economy Road Map”, which outlines Poland’s priorities as implementing innovative solutions in the economy, creating a European market for secondary raw materials, ensuring high quality secondary raw materials that result from sustainable production and consumption, and development of the service sector. According to the road map, government institutions are to engage in a mixture of activities ranging from analyses to legislative proposals and information campaigns. Timelines extend to 2023. However in Professor Rok’s opinion, the “Road Map” is primarily a document that the government needed to file with the European Commission. “The problem is that its recommendations have not become elements of various economic policies and legislative measures have not become official drafts,” he said.
POINTS TO PONDER According to the European Commission’s latest “Circular Economy Action Plan”, published on March 11, applying ambitious circular economy measures in the EU could increase the bloc’s GDP by 0.5 percent by 2030, while creating around 700,000 new jobs. The plan presents measures to: - make sustainable products the norm in the EU - empower consumers - focus on the sectors that use the most resources and where the potential for circularity is high, especially electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, as well as food - ensure less waste
CRUNCHING NUMBERS: 48 percent – Polish consumers that wish shops offered product repair, not just purchases. [Source: Responsible Business Forum (FOB), 2019] Nearly PLN 19.5bn – the estimated added value to Poland’s economy that would result from reducing energy and raw material cost by just 1 percent. [Source: Deloitte, 2018]
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Ambassadors’ Corner Top diplomats in Warsaw told the WBJ…
How are countries combating climate change and its impacts? How does your country tackle climate change?
Our Paris target to reduce emissions by 26-28 percent on 2005 levels by 2030 is a significant contribution to global climate action. In February 2019, we announced an AUD 3.5bn investment in a Climate Solutions Package. We have established a 2bn Climate Solutions Fund to build on the success of the 2.55bn Emissions Reduction Fund. In August, we committed to spending 500 million over five years from 2020 to help Pacific nations invest in climate change and disaster resilience. We have developed a National Hydrogen Strategy and increased funding to 500 million for new projects. Our Clean Energy Finance Corporation has mobilized over 20bn in new investments in our economy. We are developing a strategy to ensure a planned and managed transition to new vehicle technology.
What more could be done?
Lloyd Brodrick
Australian ambassador
Climate change is a global challenge and all countries, including Australia, need to take action to mitigate and adapt to its impacts. We will continue to evolve our climate policies to reduce emissions, increase resilience and adapt to climate impacts. We will continue to ensure our climate policies allow us to meet and beat the commitments we have made, and work with the international community to look at the best ways to tackle this global problem.
What's your message for climate activists?
Canberra takes advice from our experts and invests in scientific understanding of climate change. Our met office and Commonwealth Scientific and Industrial Research Organisation (CSIRO) have found we are experiencing more extreme conditions during summer, as well as a longer fire season. We are funding scientific research to help us understand and prepare for these changes, for example, AUD 30 million over seven years to carry out research on climate extremes and build capacity to predict them.
How does your country tackle climate change?
Presently about 75 percent of Austria’s electricity is produced from renewables. The Austrian Government Agreement 2020-2024 of the incumbent Austrian coalition government contains the aims to achieve 100 percent carbon-free electricity production by 2030 as well as climate neutrality (zero net emissions) by 2040 within Austria. [European Union leaders met in Brussels in December and agreed to make the currently 28-member bloc carbon neutral by 2050. However, Poland, which is heavily reliant on coal, remains opposed and has been exempted for the time being.] Several measures have been taken in favor of energy savings in buildings concerning heating and cooling, such as strict building regulations and thermal renovations. Oil heatings will be phased out in new buildings as of 2020.
What more could be done?
Werner Almhofer Austrian ambassador
Scientific and applied research. A more circular economy will be needed to reduce the use of primary resources and recover valuable material from waste. Ecodesign plays a major role. Austria supports using diplomacy to persuade non-EU countries to reduce greenhouse emissions. This could be achieved by the inclusion of all environmental issues (not just climate), strengthening multilateralism and – in the run-up to COP26 in Glasgow [UK] in November – encouraging partners to update and enhance their Nationally Determined Contributions according to the Paris Agreement.
What's your message for climate activists?
As our president put it when welcoming and thanking Greta Thunberg [a Swedish teenage climate activist born in Stockholm in 2003] at the [annual] Austrian World Summit 2019, we have to appreciate and thank people who through their activities try to make change happen and inspire also other people to engage in concrete action. Without civil society, we would not be where we are now.
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How does your country tackle climate change?
The Hague has signed and contributed to a number of international climate agreements, including the Paris Agreement. These deals, together with the political commitment, climate policies and legislation at the EU level create a solid and essential framework for our national contributions to climate mitigation. We take these commitments seriously and are prepared to take extra steps unilaterally. For instance, while the EU has committed to a reduction of greenhouse gases (GHG) by at least 40 percent by 2030, we have set ourselves a higher goal (49 percent) compared to 1990. In June, the Dutch government, together with over 100 key stakeholders, concluded a comprehensive and far-reaching set of commitments: “National Climate Agreement”, to achieve 49 percent carbon-emission reduction by 2030.
What more could be done?
Daphne Bergsma Dutch ambassador
Tackling climate change can only be effective when done in cooperation with other countries. That’s why the commitment to EU climate neutrality is important. To achieve the goal, the EU’s reduction target for 2030 must be raised to 55 percent. Studies show the cost of climate change will be higher than the cost of fighting it. The Netherlands is hosting the Climate Adaptation Summit in October to find ways to accelerate adaptation around the world. We address and advocate the need to invest in climate adaptation.
What's your message for climate activists?
Climate activists are important stakeholders in the societal climate debate. Their actions can elevate local and global climate challenges to the level of decisionmakers. Climate activists are the whistleblowers trying to inspire and accelerate political action to address the climate crisis. It goes without saying that their actions should conform to the law. They should be aware of the risk that their stance could polarize the growing support for action against climate change.
How does your country tackle climate change?
Estonia is committed and determined to work towards climate neutrality in the EU by 2050. We are implementing policies that will lead us to the goals we agreed upon. In April 2017, Tallinn adopted a strategy for a long-term emission reduction target: “General Principles of Climate Policy until 2050”, which is set to reduce greenhouse gas (GHG) emissions by 80 percent by 2050. The strategy is currently under review. By 2030, we plan to reduce our GHG emissions by 70 percent compared to 1990. This means producing 42 percent of our energy from renewable sources by that time. The main growth should come from the development of offshore wind farms that are non-existent today.
What more could be done?
Martin Roger
Estonian ambassador
A multilateral response is required. The EU is fighting climate change through ambitious policies at home and in close cooperation with international partners. But we need bigger engagement from non-EU countries. Implementing and strengthening the targets each entity signed up to will be essential to reach the goal we all agreed upon. Estonia’s technology companies have already taken the responsibility to move fast toward climate-neutral action. They have signed a Tech Green Pledge to be carbon neutral by 2030. This initiative has spread around Estonia and across Europe among companies that are willing to find innovative solutions tackling climate changes. Our IT companies have great capabilities in developing green technologies. This market has considerable potential in finding solutions for a green transition. Estonia’s local communities have started developing Green Municipality Model for Estonian municipalities, local communities and local businesses to transform their activities on a sustainable basis.
What's your message for climate activists?
The transition to a climate-neutral society is both an urgent challenge and an opportunity to build a better future for all.
W B J APRIL 2020
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Ambassadors’ Corner
How does your country tackle climate change?
Berlin is committed to an ambitious climate protection policy, both at the national and international levels. By 2038, we will phase out coal power and continue to invest in renewable resources. Renewables already account for over 40 percent of our electricity. For the first time in 2019, they generated more electricity than coal-fired power stations. Last year, we reduced CO2 emissions by 8 percent (54 metric tonnes) in comparison to 2018. We strongly support the EU climate neutrality by 2050. We are doubling our international climate financing by 2020 (compared to 2014) to €4bn by increasing our contribution to the Green Climate Fund, among others. We have decided to make the climate-security nexus a priority during our presidency of the UN Security Council in July.
What more could be done?
Rolf Nikel
German ambassador
Shifting away from fossil fuels toward renewable energy sources is the right path to tackle climate change. More research is needed on energy storage techniques and alternative fuels. We need to further increase our energy efficiency. Last year, Germany passed the federal climate protection law prescribing 55-percent-CO2 reduction by 2030 (compared to 1990) and introduced CO2 pricing also in heating and transport sectors. So far EU-CO2 pricing applies mainly to energy production and large industries. The biggest challenge stems from persistently high global CO2 emissions. More ambitious CO2-reduction goals within the UNFCCC treaty are necessary, especially from the largest global emitters.
What's your message for climate activists?
Climate change is one of the greatest, if not the greatest, challenges of our times. Therefore, you are doing the right thing by raising awareness of the issue and demanding solutions from decision-makers! It is to a large extent young people’s voice that gives action against climate change the political and economic urgency it deserves.
How does your country tackle climate change?
In terms of climate ambition, Italy is one of the most virtuous countries of the EU, having already reached all the 2020 targets regarding emission reduction, energy efficiency and the share of energy generated from renewable resources. Italy’s integrated national energy and climate plan (NECP) and the long-term national strategy to be presented in 2020 will be able to ensure climate neutrality by 2050, in line with the Paris Agreement and the EU framework.
What more could be done?
Aldo Amati
Italian ambassador
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Italy is determined to achieve climate neutrality by 2050 at the latest, in line with the Paris Agreement, and work toward a successful UNFCCC COP26 climate change conference. Italy fully supports the leadership of the EU in this matter and the European Commission’s Green Deal. Transformations in the environment, industry and society should run parallelly fulfilling our environmental objectives while ensuring a smooth industrial transition and avoiding social disruption. While Italy is ready to set increasingly ambitious domestic targets for 2030, it is crucial that all EU nations show a stronger determination in meeting existing commitments. Additional efforts should also be made by member states that, according to the European Commission, have not displayed a sufficient level of ambition.
What's your message for climate activists?
The involvement of civil society in the debate on climate change is of paramount importance. It is my personal opinion that only through a synergic engagement of institutions, the private sector and civil society will we achieve the result of tackling the challenges and dangers that stem from climate change. The priorities attached, not only by activists but, in general, younger generations, to environmental and ecological issues will be a powerful incentive for governments and the private sector to increase their efforts to preserve the health of our planet.
How does your country tackle climate change?
2019 was an important year for Riga’s climate change policy. Latvia has become more conscious of the need to limit climate change and the negative impacts it may cause. Cross-border cooperation is an excellent platform to act upon. Since the Sibiu summit [May 2019], we have made more ambitious national climate goals for the future. We have adopted the long-term vision for Latvia’s economic development by setting the aim to achieve climate neutrality by 2050. We have in force a newly-signed climate adaptation and resilience plan. Currently, Latvia is looking into new climate-related initiatives and developing new technological solutions that will foster our green transition further.
What more could be done?
Edgars Bondars Latvian ambassador
It is important for all EU nations to integrate the green aspects into their current policies. Regional and intergovernmental cooperation between the member states is essential. There is a need for enhancing national adaptation strategies so that we are better prepared for the problems that may arise. Economic adaptation to climate change creates new opportunities for businesses and people. The circular economy and low-carbon production could become a benchmark for global competitiveness. Climate technology breakthroughs, knowledge and ability to create low carbon technologies are opportunities for scientific institutions.
What's your message for climate activists?
Concrete actions have been demanded from the civic society that is led by Swedish activist Greta Thunberg. In Latvia, we have similar youth movements that strive for a better and more climate-friendly future. Gradual changes in our behaviors are one of the key long-term elements for achieving an impactful shift toward a more sustainable and climate-friendly society. You can make a difference by making smarter choices. By implementing local solutions and changing our everyday habits, we can solve upcoming global challenges slowly.
How does your country tackle climate change? The legal basis of the Spanish environmental policy was enshrined in article 45 of the 1978 Constitution as the right to enjoy a suitable environment for personal development with the correlative duty of preserving it. Nowadays, the text of reference is the Integrated National Plan for Energy and Climate 2021-2030. Its general goals are to reduce greenhouse gas (GHG) emissions and to promote the use of clean energies. The Plan has two parts: a scenario with tendencies based on today’s requirements which lists the measures that are in force, and a plan that puts together additional measures in order to attain the pursued goals. The Spanish policy to fight climate change has five main aims: de-carbonization, energy efficiency, energy security, energy internal market and research, and innovation and competitiveness.
Francisco Javier Sanabria Valderrama Spanish ambassador
What more could be done? We need to ensure better coordination within Spain and with other countries, as well as increase the synergies between specialized bodies in the areas covered by the relevant strategic plans. It is necessary to associate the fight against climate change with those sectors that are related to environmental preservation like, notably, farming. It is also necessary to encourage citizens’ involvement through tax incentives and in other ways in order to allow efficient participation of civil society in the whole process. What's your message for climate activists? Spain is aware of the high price that will be paid if we remain passive against climate change. Yet, public authorities cannot address this problem alone. Their sole efforts would be insufficient. That is why civil support is indispensable. Activism is part of the awareness that encourages public authorities and economic and social agents to act more, better and faster to counter this challenge. We cannot afford to waste time.
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FEATURE
ROAD TO REDEMPTION 18
MAY 2020 W B J
IN THE LAST FEW MONTHS, tensions have been heating up for Poland, as the country faces an increasing international furor at its seemingly lackluster response to climate issues. Amid a flurry of headlines reproaching Poland for a heavy reliance on coal – the fossil fuel provides around 80 percent of the country’s power – and extreme levels of pollution, in December, Poland became the only country to be excluded from the EU’s 2050 climate targets. Prime Minister Mateusz Morawiecki argued at the time that this was because the country wanted to reach climate neutrality “at its own pace”. It’s a move which might also spell bad news for Poland in the next MFF budget, as its share of the Just Transition Fund could be set to be slashed as a penalty for refusing to sign up to the EU’s targets. [The multiannual financial framework (MFF) is the EU’s long-term budget. It sets the limits for EU spending – as a whole and also for different areas of activity – over a period of at least five years. Recent MFFs usually covered seven years.] There is no question that large-scale measures to tackle climate change in Poland are failing to work quickly enough, despite the creation of a new climate ministry in a cabinet shakeup after the October parliamentary elections. According to a recent report by Swiss air monitoring platform IQAir, 29 of Europe’s 100 worst cities for air quality are in Poland. But amidst the controversy and condemnation, some smallerscale initiatives are trying to clean up the country’s act on climate issues. A week after Poland was exempted from EU pledges, the mayors of Visegrád Four capitals signed a “Pact of Free Cities” to promote common values and take the fight against climate change to the local level. [The Visegrád Four is a cultural and political alliance of four Central European countries – Poland, the Czech Republic, Hungary and Slovakia, that are members of the EU and NATO – for the purposes of advancing military, economic and energy cooperation with one another along with furthering their integration in the EU.]
DESPITE CRITICISM, POLAND BEGINS TO GET THE SHOW ON THE ROAD IN TACKLING CLIMATE ISSUES. BY JULIETTE
BRETAN
SHUTTERSTOCK
ELECTRIC VEHICLE BOOM
Meanwhile, an Electromobility Development Plan adopted in Poland in March 2017 pledged that one million electric vehicles could be on Polish roads by 2025. Crucially, the plan also encourages municipal governments to improve their fleets. Poland is already experiencing an electric vehicle boom, particularly in public transport. In October, Eurostat revealed that >>>
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FEATURE
“ Poland’s own electromobility target is a high one Poland has the highest percentage of alternative fuel cars in the EU – at 15 percent – with more than every third electric bus in the EU built in Poland. And one of the most famous faces of greener initiatives in Poland is the electric bus company Solaris, which has been leading the electromobility sector for 20 years. The increasing successes of the firm – including winning one of the largest tenders for electric buses in Europe last year – are also having an impact on Polish habits, thinks Mateusz Figaszewski, director for E-mobility Development and PR at the company based near Poznań in western Poland and fully-owned since July 2018 by CAF, a Spanish railway-vehicle manufacturing giant. “The activities of Polish local governments which we can observe in recent years, undoubtedly show positive changes taking place in the area of care for the environment,” he says. “We are proud to say that Solaris is an important pillar of ecological changes that we observe lately in Poland.” Solaris is currently implementing deliveries of 130 modern, emission-free Solaris Urbino 18 electric buses to Warsaw, a city that is planning for one-third of its bus fleet to be zero-emission by 2022, as well as supplying electric buses to other Polish cities in recent years. Figaszewski says local governments in Poland order battery buses most often – though the fleet is growing across Europe too. “So far, Solaris has already delivered or contracted almost 900 electrically powered vehicles,” he explains. “Solaris has been repeatedly awarded in Poland and abroad for its activities and innovative products, including the prestigious ‘Bus of The Year 2017’ award for its ecological Urbino 12 electric bus.” Despite the rising prominence of Solaris, Poland’s own electromobility target is still a high one, with statistics reporting only 9,000 electric vehicles in the country so far. Last year, the government’s ambitious plans for one million electric vehicles by 2025 began to disintegrate, shriveling to a more modest 600,000 electric vehicles by 2030. A key stumbling block has come in the form of promised subsidies to go toward the purchase of electric vehicles. Recently, these were also reported to be smaller than expected. In 2019, Bloomberg reported forecasts from the Polish Alternative Fuels Association, which estimated that without government subsidies, the country would have about 60,000 electric cars by 2025, though five times as many could be achieved with incentives. The association also emphasized that the
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target of a million would not be possible before 2030, and only then with tax cuts, or other measures.
‘LESS ENVIRONMENTALLY INVASIVE’
Nevertheless, other firms are investing in electromobility, to help Poland face a greener future. One is Rafako, a Polish power plant supplier that was inspired to move into the production of electric vehicles after becoming more aware of the need for environmental protection. Project coordinator Marek Marczak said that they felt eco-transport was an important step in achieving climate goals. “Its consistent implementation is an obligation arising from concern for our environment, for how the world will look in the future,” he says. “The movement started in large cities [in Poland] with strong environmental awareness but the escalation to the rest of Poland has been noticeable for a long time.” According to him, one of Rafako’s unique initiatives intends to help smaller localities, where they aim to modernize the transportation of children to schools. Old combustion buses are currently being used but he says that replacing these with electric buses could also help increase environmental awareness in a new generation. Rafako is the only company which offers electric buses which are adapted for the transportation of children – and it is projects like this which could help the company improve its standing in an already crowded electromobility market. “Poland is an ambitious country with great technical potential,” Marczak adds. “There are several reasons why the development of electric public transport must be continued. It brings environmental benefits, the total costs of fleet operation (TCO) are low. The effective stimulation of the development of the electromobility program in Poland has made us one of the markets with the greatest experience in Europe and this experience will certainly be used in the coming years.” This is a message shared by Solaris: Figaszewski feels that tenders announced by Polish cities will “accelerate the transformation of public transport into something less environmentally invasive,” and therefore reduce emissions. This may be only one sector, but its impact could help the country work toward climate targets. Large-scale developments might be too challenging to achieve at this stage, but if Poland focuses on local-level improvements, it could still be on the road towards a greener future.
HARNESSING TOURISM
Sustainable tourism at its core seems unattainable. Strategically, it protects natural resources, reconciles the interests of the society, local economy, and of course, those of the tourists’. Sounds fancy yet it is not a fad. It has become a necessity – the only viable solution to uphold the growing magnitude of tourism in Poland and beyond.
SHUTTERSTOCK
BY KONRAD KRZYSZTOFIK
SUSTAINABLE TOURISM IS ABOUT minimizing the negative impact on the environment, community and local economy in order to preserve the site for future generations. It is a holistic approach that engages the government, locals, service providers and tourists alike. Achieving sustainability is not an ultimate state of affairs but a continuous process that requires constant adjustments, monitoring impact and introducing solutions. An early mention of sustainability in tourism appeared in the UN Brundtland Report published in 1987. The report draws international attention to issues that accelerate through economic globalization and are associated with mass tourism. Alternative tourism is sometimes proposed as an antidote to the impact of mass travel as it encompasses the concept of conscious experiencing (e.g., wine tourism, voluntary service tourism) and outdoor physical activities (e.g., hiking, ski mountaineering). Regardless, the ideology of alternative tourism has always been challenged for its ambiguity and that it does not necessarily rule out mass travel. At the same time, restricting the number of tourists in developing regions would significantly slow down their economic growth, especially where tourism is the main source of income. >>>
W B J MAY 2020
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FEATURE
ALL-INCLUSIVE SUSTAINABILITY It has become apparent that balance is needed between profitability and protection. An independent commission was to investigate the scale of the problems related to touristry and to suggest specific solutions that could be applied internationally. The following criteria are often used to form a framework for sustainable tourism: - a quota of visitors and their frequency that allow preserving a site, its biodiversity, the landscape and natural resources (environmental capacity) - a quota of visitors and their frequency that leave no negative impact on local culture and community (societal capacity) - the capability of infrastructure, transportation and communication (accessibility and affordability) - state of information and communication technology (ICT status) - level of profitability from tourism that contributes to the local growth while preventing the commercialization of culture (economic viability) - level of empowerment within local communities in decision making around tourism management (local control) - ability to fulfill visitors’ needs and expectations (safety and attractiveness)
GLOBETROTTING FIGURES
There are two categories of forces behind traveling: push and pull. People are pushed by their need to bond with nature, interact with other people, visit friends and relatives, conduct business, do sport, see famous landmarks, follow their dreams or just rest. What pulls them, on the other hand, are rich cultural heritage, picturesque (“instagrammable”) landscapes, wildlife or nightlife. Wanderlust is a powerful thing. There is neither a way of barring it completely nor is it reasonable. People have always traveled but the sheer scale of tourism these days is what has become an issue. There were under half a million international tourist arrivals thirty years ago, according to the UNWTO report. The trend increased steadily until 2009 when the number of tourists declined by around 4 percent, largely due to the economic crisis. Last year’s records show 1.5 billion international tourist arrivals worldwide – a 4 percent increase from the year before. The trend is said to stay stable this year despite uncertainty around Brexit, political tensions, the collapse of a few low-cost airlines and Thomas Cook bankruptcy. The situation is changing dramatically due to the outbreak of COVID-19 and the widespread suspension of flights all around the world.
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“ Travelers are less
keen to save water or electricity as they will never see the bill
TOURISM IN POLAND
The reduced number of visitors from China may be noticeable in Central and Eastern Europe as the region becomes increasingly popular among Chinese. According to Robert Andrzejczyk, the president of the Polish Tourism Organization (POT), the number of Chinese tourists grew by more than 20 percent in the first half of 2018. Poland was also distinguished as an attractive destination in a ceremony led by China Travel Agent magazine the same year. Overall, tourism in Poland contributes to approximately 5 percent of the GDP and the number of foreign tourist arrivals reached nearly 16.3 million in the first three quarters of 2019. Various sources claim that Poland reached a record high number of visitors (20 million) last year. However, there is no official report to prove it yet. Even though it would be an impressive number for Poland, it is not so impressive on a global scale. A tourism index ranking countries on the basis of popularity (T&T Competitiveness Index 2019, World Economic Forum) places Poland on the 42nd place out of 140 listed destinations. Polish Supreme Audit Office (NIK) reports that tourists spent PLN 34.5 billion in Poland in 2018. That is more than the estimated cost of building the Solidarity Transport Hub (CPK), approximately 40km southwest of Warsaw.
TOURISM AND POLITICS
Despite tourism being such a significant sector in the Polish economy, the government needs to step up their game. NIK remarks on slow-moving legislative changes to better control the promotion and management of tourism in the country. The audit summary purports that few regional tourist organizations own their integrated tourism development strategy. Those who possess it, usually lack clear goals and are unable to measure the effectiveness of executed actions.
Accountability for the state of tourism is currently shared among the development ministry, POT, local governments and tourism-related service providers. Tourism-related matters were placed under the sport and tourism ministry until November 2019. When asked about tourism policy, the development ministry cites a “Tourism Development Program” as the key strategic documentation. The document contains some obsolete data (as reported by NIK) and will expire by the end of 2020. The ministry still commits to funding the following assignments this year: restoring and delineating tourist routes, improving accessibility for senior and disabled travelers, improvement of tourists’ safety, financial support and creation of tourism brands. The ministry spent nearly PLN 61 million on the sector last year and assesses their execution of the program as effective. The ministry spokesperson did not provide specific numbers to quantify this claim.
VISITOR RULES
People tend to be more wasteful once they become guests. Travelers are less keen to save water or electricity as they will never see the bill. They are also prone to purchasing disposable utensils and containers, use plastic mini bottles and are usually not familiar with the local waste management rules. Specialist media, books, podcasts and vlogs contribute to raised awareness of sustainable tourism. Still, the public would need to reach out and search for reliable information. Social media users have become increasingly aware that posts with them engaged in environmentally harmful or socially questionable activities would expose them to public disdain, hate attacks, account suspension or fines. It often takes a gross act of irresponsible behavior to draw the government’s attention to the problem. Occasionally local residents, left to their own devices, seek solutions themselves. Exasperated residents of Kraków and its district of Kazimierz launched a campaign in 2018 as their appeal to disturbing flocks of tourists. One thousand posters, saying “Noise Annoys!” and “Keep Calm And Let The Residents Sleep”, were printed in English and distributed across the busiest parts of the city.
SHUTTERSTOCK
LAST CALL
The state of tourism is a shared responsibility of all stakeholders. However, the strategy of making it sustainable needs to have a clear focus, smart goals, be set by the state and controlled by the law. The government has the tools to cascade accountability through regional, local authorities, tourist businesses and individuals. No site can ever be sustainable enough but it is about the genuine efforts and monitoring of the effects that may allow future generations to discover what we leave behind.
According to research conducted by the Małopolska Tourist Organization for the Kraków City Office, 14,050,000 people visited the city in Poland’s south in 2019. This is 550,000 people more than the previous year.
W B J MAY 2020
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FEATURE
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PANDEMIC Pummeled Polish economy Everything seems to indicate that the coronavirus outbreak will become a black swan event – an unpredictable phenomenon that radically changes global trends. The more the epidemic curve indicating the daily number of victims steepen, the worse it is for the world and Polish economies. BY SERGIUSZ PROKURAT
W B J MAY 2020
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FEATURE
ith over 11 million residents, Wuhan, a metropolis in the central Chinese province of Hubei, which in turn has more than 60 million inhabitants, has involuntarily become famous. It was in that city, where at the turn of November and December 2019 an epidemic broke out. Local authorities ordered doctors and experts to keep silent. China has been building a centralized system of citizens’ control over the years. Unfortunately, viruses are not afraid of repression. They cannot be deceived by propaganda. They are not at all concerned with the decisions of a politburo. Authoritarian measures were not able to keep the epidemic within China. Even though the quarantine in Wuhan was introduced on January 24, large numbers of people had already gotten out of the city. The quarantine range expanded with each passing day – 56 million people were quarantined just after four days since its introduction. In Wuhan – a business and industry center developing faster than the rest of China – factories, universities were closed and trade ceased. Because of the coronavirus, the world economy is in a state of suspension in the first half of 2020. Over a hundred thousand have died and millions have been infected globally. Hospitals are not able to keep up with patients. International and domestic flights have been grounded or restricted. Sales of goods and services have slumped. Factories all over the world have been temporarily shut down. Many firms risk bankruptcy if their sup-
The disinformationinduced panic that escalates the fear is more dangerous than the virus”
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ply chains aren’t reinstated soon. Countries and territories have closed land, air and sea borders. According to a report published at the beginning of March by economists from Allianz, a Munichheadquartered multinational financial services giant, and Euler Hermes, a Paris-based credit insurance behemoth, coronavirus is estimated to cost at least $320 billion of trade losses every quarter.
FROM PANDEMIC EPICENTER TO POLAND
Where did the novel coronavirus come from? It is widely thought to have originated from bats, transmitted from animals to humans. The prime suspect has been identified as the local seafood market in Wuhan. The trick is that there are no bats there. Another disproved theory assumes a “human error” in safety management in a germ research center. The coronavirus has already reached all continents except Antarctica and is spreading exponentially. The US, Italy, Spain, France, the UK, Belgium, Iran, Germany, China and the Netherlands have been particularly affected. The coronavirus reached Poland as well toward the beginning of March. Initially, Warsaw was calming the moods for weeks, saying that Poland was ready to stem the spread. It turned out that it was only on paper. There were no prescribed procedures or guidelines for doctors, the hospitals were not provided with appropriate equipment to receive and treat the infected. There was even a shortage of face masks – all stocks had already been sold and there weren’t more of them, because they came from … China. The World Health Organization website states the situations when a mask should be used including while caring for a suspected patient or while coughing and sneezing. Most beds in hospitals for communicable diseases remained occupied – there was no room for patients. There were also no procedures that in a justified case allowed transporting a patient to a communicable diseases’ hospital. No one knew how to do it. This mayhem led to a spiral of panic. At the same time, people stormed pharmacies and stores – leaving behind tens of thousands of empty shelves. Stores lacked disinfectants, soap and toilet paper. There was a shortage of beans, rice, oats and pasta in supermarkets. OECD assumes a decline in growth in the eurozone after the development of the coronavirus epidemic. Countries that locked themselves down are expected to be the most affected, with zero or even negative growth. But there is also a worse scenario, that the virus turns the global economy into a big bust. Stock exchanges around the world have been reacting negatively. The WIG20 index of the Warsaw Stock Exchange has gone down to levels not seen since 2009. Insurers do not know how to treat potential claims in the time of the epidemic. Companies and uni-
PREVIOUS SPREAD ILLUSTRATION SHUTTERSTOCK
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Virulent caseload
versities have ordered employees who have been aborad to selfisolate. The Polish economy lost an estimated PLN 79.3 billion due to restrictions on economic and social activity from March 16 to April 20, according to Poland-based trade bodies Federation of Polish Entrepreneurs (FPP) and Lewiatan Confederation.
As of April 29, the Covid-19 disease has killed over 218,000 people and infected over 3.15 million. At least, 965,000 have recovered
POLAND LOCKED DOWN
***
Polish authorities in the first days of March adopted a bill on preventing and combating the disease. What followed disconnected Poland from the rest of the world. Within the country, only takeaways and food deliveries were allowed for restaurants, all events were canceled or postponed. Events across the whole world were also canceled or postponed, such as Champions League final scheduled for May 30 in Istanbul, Euro 2020 and the Olympic Games in Japan. In Poland, schools, kindergartens, as well as universities were closed until further notice. The Polish prime minister’s orders, issued orally, by phone or e-mail, were made binding on all entities – including private firms with immediate execution. The orders would need no justification enabling restrictions on movement and access to areas, and the prohibition of the organization of events, among others. It seemed that the coronavirus spread was a great excuse to limit civil liberties and introduce power without control. Shutting down a country also has a long-term impact. After some time, governments will see decreasing VAT inflow. There will be giant budget holes that somehow have to be filled. The psychological effect associated with the epidemic will be of significant importance for the global economy. Worldwide economic growth could plummet and shrink by more than $3 trillion if the coronavirus becomes a global economic pandemic despite concerted efforts – up to March 26, commitments from governments and central banks were close to $7 trillion and rising, considering the US, Europe, India, China and Japan unleashed government spending and newly created money in a desperate attempt to keep the global economy from sinking into depression – according to an analysis by CNN Business. The question is how much we know and how much we do not know. How much knowledge is hidden from the citizens and the media? This is not an epidemic that will wipe out half the global population, just like the plague that took an estimated 75-200 million human lives in Eurasia in the mid-14th century, killing almost half of Europe’s population. The coronavirus resembles the seasonal flu but is far more dangerous with a significant number of fatalities, especially among older people. Even more dangerous, however, is the disinformation-induced panic that escalates the fear. We panic while dealing with a strong fear. By design, the more we know, the more afraid we are.
The infectious viral disease has affected at least 210 countries and territories and two international conveyances since it was first detected in November-December 2019
***
The disease is caused by a member of the coronavirus family that has never been encountered before. Like other coronaviruses, it has transferred to humans from animals. The World Health Organisation (WHO) has declared it a pandemic and said that it’s a “false hope” coronavirus will subside in the summer like the flu
***
The virus can be transmitted from one person to the other through sneezes, coughs, and contact with infected individuals, contaminated surfaces or objects
***
Most people who are infected might become only mildly ill and the global mortality rate of the disease was around 4 percent on March 26, according to the WHO data. Older people and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease and cancer are more likely to develop serious illness.
***
Polish National Institute of Public Health (NIPH–NIH) estimates that in February there were 821,653 cases of seasonal influenza and 5,600 people were hospitalized. There were also 23 flu-related deaths
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GOODS GONE
BAD THE AMOUNT OF HAZARDOUS CHEMICALS RELEASED FROM LANDFILL SITES HAS GROWN UNCONTROLLABLY. GOVERNMENTS, BUSINESSES, COUNCILS AND NGOS HAVE JOINED FORCES TO IMPROVE WASTE MANAGEMENT PROCESSES. YET CLOSING THE LOOP ALSO TAKES AN EFFICIENT PRODUCTION CYCLE, RESPONSIBLE BUYING AND DISCARDING. BY KONRAD KRZYSZTOFIK
FEATURE
SHOP UNTIL YOU DROP
Poles continue to improve in terms of household waste management with nearly 30 percent of all municipal waste segregated in 2018 (as compared to a mere 3 percent in 2005). These are the official figures, though. Unofficially, at least an estimated 1,600 uncontrolled dumps and landfills exist in Poland. Over 10,500 of such sites were liquidated in 2018 alone – totalling to over 25,000 tonnes. A twoyear load of all that trash is the equivalent weight of the Titanic. The number of outlawed landfills seems to have grown, though. This is a result of legal constraints and high fees that the legal sites are obliged to pay. “New regulations require investments to ensure continued compliance. They also make us scale down while the cost of waste management goes up,” said Justyna Dębska, of Selective Municipal Waste Collection Point (PSZOK) for Warsaw by LEKARO – a Polish family company that has been providing city cleaning services for 25 years as stated on the company’s website. The uncontrolled sites, on the other hand, are neither monitored nor bound by any law or taxes. Moreover, it is the local municipality’s duty to remove all illegally dumped waste at their cost – which is approximately PLN 5 million a year on a national scale. Hazardous items can be found in all such dumps, including expired medications, batteries, solvents, glue and paint containers and aerosol cans. Worse yet, arson and self-ignition are fairly common in uncontrolled sites causing unimaginable damage. It does not take long for toxic chemicals to permeate the soil and for fumes to pollute the air, especially when damaged by pressure and fire. A few grams
Shopping has become a popular leisure activity, particularly for those who seek instant gratification or have an urge to inflate their socioeconomic status. Nearly every item we own will eventually be discarded – still, it is usually the price that can put us off from buying more and more. As competition grows, businesses invest heavily in advertising and celebrities endorse products for aspiring middle-classes. The use of innovative technology helps entice consumers into getting the newest version of a desired product. Marketing woos the buyers to either believe that mass-produced goods emphasize their uniqueness or make them banish the fact that an indispensable product will not need replacing soon. It has been collectively accepted that it is often cheaper and easier to purchase a new item than repair a broken one. Consumerism leads to a significant increase in urban waste, including broken laptops, expired medicines or used batteries. Poland was one of the countries to join the consumption flock after the fall of communism and it too entered the realm of disposable goods. A Pole scraps around 6kg of Electrical and Electronic Equipment (EEE) a year. That’s 228,000 tonnes of e-waste in Poland alone – equivalent to an estimated weight of the Palace of Culture and Science.
FILTHY FACTS
A statistical Pole generates between 200-400kg of all types of municipal waste annually. That is below the EU average of nearly 500kg and half of the waste generated by Danes (approx. 750kg per capita).
Waste electrical and electronic equipment, total collected, 2008 and 2016
Note: Ranked by 2016 data. 2008: Eurostat estimate. 2016: 2015 data instead. (3) 2016: 2014 sata instead. (1) (2)
(kg per inhabitant) 20 15 10
2008
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2016
Iceland
Norway
Liechtenstein
Latvia
Romania (3)
Cyprus (2)
Malta (2)
Lithuania
Greece
Slovakia
Spain (1)
Slovenia
Hungary
Italy (2)
Poland
Portugal
Bulgaria (1)
Czechia
Croatia
Netherlands
Germany
Austria
Estonia
Ireland
Luxembourg
France
Finland
Belgium
Denmark
United Kingdom (1)
0
Sweden
5
Source: WEEE, total collected, 2008 and 2016, Eurostat
Generation of municipal waste per capita in 2018
of mercury (found in old thermometers, batteries or fluorescence lamps) that leaks into the water or soil can be a life-threatening dose for flora and fauna nearby.
TOP-RATED
When it comes to EEE, a life-cycle assessment (LCA) procedure, or similar, is often followed to comprehensively assess product’s direct and indirect impact on the environment. That applies across all stages: production, composition, energy consumption, transportation, exploitation and disposition (reuse or disposal). Such analysis allows for adjustments to mass-produced items before they become an issue once scrapped away. Customers become better informed about the environmental impact and the choices they have at the point of purchase. Businesses, on the other hand, recognize this and enthusiastically vaunt their sustainable policy, efficient processes and use of recycled materials. The EU introduced energy labels indicating the energy efficiency of a product in 1992 and it has put in place universal regulations for manufacturers ever since. The standards have gone up and so it would be a challenge to purchase a D-rated washing machine in the EU these days. The labels are now being redesigned and five product groups will be rescaled next year. The new scale will be simplified (A-G). What is A+++ today, is likely to become B-rated. Top rating A will be left as bait for manufacturers to set a new benchmark of energy efficiency. While the regulations and standards point us toward more sustainable solutions, importing cheaper alternatives from outside of the bloc throws us back. The EU has tried to cut the sale of mercuryin-glass thermometers due to proven toxicity – inhaling the mercury vapor from a broken thermometer poses a serious health risk. Although Poland endorsed the law in 2009 and despite the fact that non-mercury alternatives exist, some people remain unconvinced and purchase hazardous devices from online retailers, mostly from China.
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HAZARDOUS WASTE MANAGEMENT
Communal waste is segregated into five main categories in Poland: glass, paper, biodegradable, mixed, and metal and plastic. Though it seems fairly straightforward, some unknowingly toss meat leftovers into compost bins, receipts into paper containers or aerosol cans into those for metal. Warsaw Municipal Office website – www.segregujna5. um.warszawa.pl – features a simple search bar where users type in their item of waste and find out which bin they should use to discard it. Medicines or mercury-in-glass thermometers should be disposed of in selected pharmacies – here too an interactive online map created by the city’s municipal office can help locate the nearest collection point for hazardous substances. Medicines flushed
0 100 200 300 400 500 600 700 800 Romania Poland Czechia Slovakia Sweden United Kingdom Lithuania EU (27 countries... Finland Germany Iceland Denmark
Source: Eurostat
down the toilet or dropped into the sink drain can contaminate the water. Once dissolved, the chemicals are hard to separate at the wastewater treatment plant. Broken thermometers and all hazardous waste must be isolated, securely packed to avoid leakage of harmful substances and then taken to a PSZOK or brought to one of about 20 mobile collection points (MPSZOK) across the city on Wednesdays and Saturdays. Such collection points will accept the following waste: aerosol cans, tires, printer toners, used fire extinguishers, pesticide and herbicide containers, lamps, bulbs, halogens, fluorescent bulbs, solvents, caustic chemicals containers, glues, paint and dye bins, debris, radio and TV sets, CD and DVD players and the white goods. Exclusions may apply. Warsaw City Contact Center has more details on www.warszawa19115.pl. Properly discarded hazardous waste is separated, labeled and transported to an appropriate waste processing plant. Used batteries, for example, are separated by type and chemical composition. Certain parts of used batteries can be recycled and the harmful substances neutralized with minimal impact on the environment. Similarly, expired medicines can be neutralized by thermal processing at a specialized waste treatment plant, as long as they are properly discarded into appropriate containers. Waste inherently represents a loss of resources to produce it in terms of materials and energy consumption as well as an impact on the environment when discarded. Conscious and responsible actions can take us a long way and save us from being consumed tomorrow by what we consumed yesterday.
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POUR SOME SUGAR TAX ON ME We usually don’t like the bitter taste and enjoy the sweet. This is due to the history of human evolution which has helped our species survive. For thousands of years, bitter food suggested poison, while sweet food provided hunger relief. Today, paradoxically, these simple principles are no longer as obvious as they used to be. BY SERGIUSZ PROKURAT
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FEATURE
STEVEN WRIGHT, a US comedian, actor and writer once said: “I went to a bank and asked to borrow a cup of money. They said: ‘What for?’ I said: I’m going to buy some sugar.” There is a lot of truth in this. Sugar has experienced rapid growth of consumption in developed countries, including Poland. In 2015, consumption per average Pole was 40.5kg, while in 2018, it reached a record value of 51kg. Meanwhile, many studies have indicated that excessive sugar consumption is responsible for many diseases, including the increasing number of adults suffering from diabetes. The effect of the increasing consumption of sugar, ‘hidden’ in products such as some beverages and juices, is an obesity epidemic – half of Poles are overweight. It is a disease that develops most often due to a poor diet and insufficient physical activity. At the beginning of 2020, the Polish government looked at the issue of unhealthy, excessive sugar-containing diet, convinced that unhealthy food should be taxed. The bill adopted by the Polish parliament in February introduced a fee of PLN 1 on each bottle of alcohol sold up to 300ml, as well as a fee of PLN 0.80 for a sweetened drink, in addition to a fee for advertising dietary supplements. The changes are expected to come into force in April and add about PLN 3 billion to the Treasury. Officials have argued that healthy food is definitely more expensive than junk food and most societies are guided by the price when doing shopping. The introduction of the new tax may, even partially, offset these differences.
SUGAR TAX JUSTIFIED?
According to experts, the sugar tax is reminiscent of the cigarette tax levied around the world and intended to reduce consumption and increase the income for medical care needed to treat people suffering from smoking-related diseases. So far, a lot of countries around the world have already introduced sugar taxes on beverages in different ways – directly, by increasing the cost of all beverages, or indirectly, by prompting manufacturers to reformulate ingredients of products or change product lines by introducing healthier alternatives. The question is, does this kind of interference in personal choices concerning food have a justification other than the constant need of states to pump up their budgets? Years ago, we were convinced that fat is the source of our health problems. So, for many years, margarine and skimmed milk were more popular than butter. Over the years, however, we found out fat was not bad at all and that many of the low-fat foods we consumed had no nutritional value and were worse for our health. Some eating habits that
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we adopted to replace fat have harmed us. For example, consuming too many grams of carbohydrates essentially means far too much … sugar. Sugar taxes imposed in other countries showed a slight short-term decline in the consumption of sugar-containing products. In four countries that have introduced sugar taxes in recent years – Denmark, France, Hungary and Mexico – the average mean body mass index (BMI) and obesity level have increased or remained the same. There is no evidence that sugar taxes have helped lower BMI or obesity. Since the new tax is being introduced under the guise of caring for citizens who eat junk food and sip orangeade, cola or lemon-lime-flavored non-caffeinated soft drink, it is not about reducing consumption of harmful excessive sugar. The state does not count on this. It counts on extra cash. In addition, the sugar tax is regressive and hurts the poor. People and families from lower-income groups spend a large portion of their wages on food, often of inferior quality than people on higher incomes. It is those poorer people who will be affected by the tax. Emphasis on the taxation of sweetened beverages is just the first step. The next one may be a tax on a sweet latte, hot chocolate, ice cream containing sugar, beverages based on milk or chocolate. It is only a matter of time before lobbyists dealing with public health might begin to demand taxation on other products containing salt – which is equally harmful and lavished generously by the food industry, white flour and meat. White flour, white sugar, white salt form the unholy trinity of products infamously called “white death”.
DEEP DILEMMA
American macroeconomist Greg Mankiw claims that sugar tax is a model “sin tax” because it does not directly affect others, but discourages from consuming the tempting and sweet beverages. “Sin taxes” are a type of excise duty levied on certain goods considered harmful to society. They are used to increase the price in order to limit the use of not very healthy products. Essentially, the purpose of sin taxes is to protect an individual from themselves. Paradoxically, Mankiw also notes that the situation is quite the opposite of what is expected – the average consumer lives a healthy lifestyle, so there may be healthcare costs associated with these “added” years of life. Healthy consumers live longer, so they cost the system more than those who die sooner. However, the problem is deeper. Can we call obesity a public health problem? We can ask an even more intriguing question – is obesity, and also exercising or playing sports, a personal or public matter? In this view, eating junk food, which causes obe-
SUGAR TAX IS A MODEL “SIN TAX” BECAUSE IT DOES NOT DIRECTLY AFFECT OTHERS, BUT DISCOURAGES FROM CONSUMING THE TEMPTING AND SWEET BEVERAGES
PHOTOGRAPHS SHUTTERSTOCK
sity, a public health problem analogous to the spread of typhus or tuberculosis? Especially, in the world of commercials, and social and consumer pressure? Sugar-sweetened beverages, including carbonated and juices, are legal products that are not dangerous and, therefore, will not necessarily lead to negative health effects. Dietary decisions are very complex. People who like carbonated beverages might follow a healthier lifestyle than people who don’t drink sugary beverages. People encouraged to drink fewer sugarsweetened beverages can compensate for the consumption of sugar from other sources, which may be even higher in sugar, calories or other ingredients that are harmful to health. The belief that we can impose the ‘right’ food choices on society and individuals is arrogant and completely ignores the complexity of diet.
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POLAND IS FACING A RECESSION FOR THE FIRST TIME IN 30 YEARS!
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TECH i n s i g h t s TECH NEWS Poland more cyber safe
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Poland has better cybersecurity now than a year before, according to a study commissioned by Comparitech, a UK-based firm analyzing technology-based products and services ranging from password managers, ID theft protection, anti-virus to internet providers. Comparitech compared 76 countries in all, scoring them on a scale of 1-76, where 1 was the least cyber secure country and 76 the most. The inverted scoring system means the lower the score, the higher a country’s ranking and the better its cybersecurity. The study shows Denmark (76) is the most cyber-secure country with Algeria (1) at the other end of the spectrum. Poland was ranked 51st in the report released on March 3 as compared to 40 out of 60 countries in 2019.
>>> W B J MAY 2020
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TECH
WSE: Video game developer highest valued firm CD Projekt, a Polish video game developer, publisher and distributor, best known for the “Witcher” game series became the highest valued company on the Warsaw Stock Exchange on April 2. The market capitalization of the Warsaw-based company exceeded the level of PLN 35 billion for the first time in history. The producer of “Cyberpunk 2077”, an upcoming roleplaying video game, was worth more than the state-run PKO BP, the biggest Polish bank, and mBank, the fourth largest bank in Poland, combined. The firm was founded in May 1994 by Marcin Iwiński and Michał Kiciński. Iwiński and Kiciński were video game retailers before they founded the company, which initially acted as a distributor of foreign video games for the domestic market.
Amazon, an American global ecommerce giant, has refused to reveal how many of its workers have been infected with the coronavirus, stated Onet, one of the largest Polish web portals, on April 17, adding that a spokesperson only admitted that the number of cases has increased. Two warehouse workers in Poland have said their working conditions have been unsafe during the global pandemic. Amazon has been operating in Poland since 2014 and has seven distribution centers in the country. Meanwhile, the Amazon CEO and entrepreneur, Jeff Bezos, has grown his vast fortune by a further over $24bn during the coronavirus pandemic, a roughly 20 percent increase over the last four months to $138bn, according to a Guardian UK report published on April 15. Bezos owns an 11 percent stake in the company and has been the world’s richest person since 2017.
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E-vehicle in Poland not better for climate: researchers According to experts, in terms of environmental protection, driving an electric car already makes more sense in most countries than driving a conventional car powered by petrol or diesel. However, this does not apply to Poland, where drivers have to charge batteries at stations to which electricity flows from coal-fired power plants, a team led by researchers at the Netherlands’ Radboud University has found. Over 80 percent of the country’s electricity is generated from coal. The results of the study were detailed in a paper published in the journal Nature Sustainability on March 23.
5G is safe for people: report The 5G network generates lower levels of exposure to electromagnetic fields than existing 4G networks and is safe for us, according to the latest report of Poland’s Office of Electronic Communications (UKE). Every technology that appears on the market is assessed in terms of its impact on our health. It is no different with the 5G network, which
many people are afraid of. UKE has also busted a myth concerning 5G and the ongoing coronavirus pandemic. “According to the WHO statement, viruses cannot be transmitted by radio waves. What’s more, the virus is also spreading in countries that do not have 5G networks operating. It is impossible cellular networks, including 5G, have any effect on the spread of the virus.”
Curated from: bankier.pl, nature.com, nbcnews.com, onet.pl, polskieradio.pl, theguardian.com
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More Amazon employees infected with coronavirus
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Durable medium in insurance companies
C
ONSIDERING MEDIA REPORTS from 2018, the durable medium is mainly associated with banks. The penalties imposed by UOKiK – Poland’s Office of Competition and Consumer Protection – have significantly contributed to the awareness of the existence of a durable medium in the law. What is a durable medium and what is its purpose? According to the definition, it is a medium that is used by firms to transmit documents to customers. Companies must ensure that the content of the document remains unchanged and is available even after the end of the contract with the customer. The purpose of a durable medium is to secure both parties partaking in a transaction against unauthorized changes in contractual provisions. In particular, it protects the consumer against unfair practices on the part of the publisher of the document. Who is obliged to use a durable medium? The concept of a durable medium has been known in the European Union since 2004. It was used for the first time in the MiFID and
PSD directives. The problem of a durable medium also affects the insurance industry. The Acts on Insurance Intermediation and Distribution define the obligations to use a durable medium. Particular attention should be paid to the Consumer Rights Act 2014. It follows that all contracts concluded in the seat of a company must use a durable medium. This also applies to insurance companies and their intermediaries. What instead of paper? One interesting proposal is the S3DOC system. It is a complete ecosystem of IT services focused on a durable medium. The ecosystem consists of a portal for publishers and recipients of documents, a mobile application and the S3DOC eSign electronic signature module, which allows for the immediate signing of agreements and acceptance of the documents. The S3DOC system is the only one with built-in two-way communication, which means that a client of a financial institution also has the possibility to transfer documents on a durable medium. The system uses the blockchain platform, which acts as a distributed register. It records in a per-
manent way all events related to document activities. Paper documents are passe It is estimated that sending one paper letter is about PLN 5. For example, for a company that traditionally distributes 100,000 documents per year, the cost of sending documents is PLN 500,000. In contrast, the cost of handling a similar volume of electronic documents in the S3DOC system is about PLN 100,000. The savings are enormous. It is also worthwhile to look at the use of a durable medium through the prism of social responsibility. By using such solutions we ensure the safety of our customers and guarantee that we do not use unfair practices. In this way, we create the image of an institution of public trust. In the financial sector, this is a very important attribute. The ongoing coronavirus pandemic can be an impulse for a digital transformation and a change from paper to electronic documents. The aforementioned S3DOC system in the time of the pandemic is available for free to companies in a difficult financial situation. Details of the action can be found at www. s3doc.com
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TECH
BINNING WINNING IT!: BREAKTHROUGH IN WASTE DISPOSAL
RECYCLING IS ONE OF THE AREAS POLAND LAGS BEHIND WESTERN EUROPEAN COUNTRIES. EDUCATING SOCIETY TAKES TIME BUT USING TECHNOLOGY TO IMPROVE THE SYSTEM COULD PRODUCE STAGGERING RESULTS MUCH MORE QUICKLY, ROBERT SZCZEPANKOWSKI SAYS. INTERVIEW BY BEATA SOCHA
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in Ciechanów [90km north of Warsaw] last year. What does the data collected so far tell you? Robert Szczepankowski: There are several key insights we’ve discovered. Based on hard data we collected over a 10-month program encompassing 330 apartments and over 1,000 residents, the most shocking fact was that residents produce far less waste than the statistical data would suggest. According to GUS [Poland’s Central Statistical Office], Poles produce each year 330-350kg of waste per person. Our measurements clearly indicated that the figure is at least 30 percent lower, about 220kg. That is significantly less. Isn’t that suspicious? One could think that people take their waste elsewhere. But that is impossible in the system we implemented. We know exactly how much waste each household produced and how often they took out the trash. The system is 100 percent transparent and impervious to tampering. Residents say that the solution we implemented forces them to recycle and they are complying because there is no other way. Before we introduced T-Master [an individual waste segregation system implemented in May 2019], only 10-12 percent of residents recycled. Where is the number now? As many as 95 percent started recycling immediately after the system was introduced. Another 2 percent were later convinced to do so by the building’s administration, while 2 percent are empty apartments.
WBJ:
According to Eurostat data, Poles don’t produce more waste than the EU average, however, we still recycle far less than Western Europeans. On the other hand, data suggests that at least Poles’ awareness of the need to recycle is growing. You implemented a pilot program of smart waste collection in a multi-apartment estate
That’s practically everyone. How effective is their recycling? The quality of recycling in the pilot program is very good, around 90 percent. Meaning that if we open 100 bags, 10 contain waste they’re not supposed to. Teaching people how to recycle is a longterm process. There is return information. It’s a technological solution that allows the system to easily identify which bag comes from which household. When the waste is
incorrectly placed, a photo is sent directly to the apartment it came from. Just like a speeding ticket… Exactly. What allows us to do that is bar codes. Each household receives a set of single-use bar codes they put on a trash bag. They are different for each type of waste. And in order to dispose of waste, residents need to place a code on the bag and scan it – only then will the right container open. What if you run out of codes, like when you run out of the right-color bags? There are no limits, when you run out of codes – you get a new set. And we don’t offer bags, people buy bags themselves – any kind really. The only thing that matters is the code. How much of the waste recycled by households in Poland is actually reusable? Not that much. When people segregate their waste, 45 percent of it is recycled, 55 percent goes to a mixed-waste bin. We are working to bring this number down. Generally, public access is the biggest problem: if a container is accessible to anyone, all it takes is for someone to throw in a newspaper into a glass container to turn it all into mixed waste. That is why making the system air-tight is so crucial. Still, it means that nearly half of the waste is now becoming a resource? Not exactly. Right now, about 25 percent of the waste is bio-waste, 10 percent is paper, 7-8 percent is plastics, 7-8 percent is metal waste. But that doesn’t mean all of the paper, plastic and metal are resources. Even if we look at paper alone: we need to separate paper food packaging, e.g., old newspapers. One is still waste, the other is a resource. Similarly, a clean bottle is different from a bottle containing oil residue. We also have no aluminum recycling or electric waste collection system. It is even more complicated with biowaste. Right now you can only put it in your own compost container, you cannot hand it over. The Polish environment ministry is looking very closely at
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TECH biowaste to change the law and allow for better biowaste disposal. For instance, biowaste from a multi-apartment building could be accumulated to reach about 200-300kg and then sold to a plant that can actually use it. We need to reform the system further to extract actual resources, not just different types of waste. Is that why our recycling levels are so low compared to e.g., Sweden? We should not compare ourselves with Germany, France or Scandinavia. Poles are still learning how to recycle. During our pilot program, people would ask questions such as: where do I put unfinished medications, batteries, even plastic bags. People receive this information and our system is very clear about it. But recycling isn’t easy and educating people takes time. Has your pilot program in Ciechanów yielded any other surprising insights? People have also been complaining about another thing: that they don’t have enough room in their kitchen to sort all the waste in different containers. They previously had only one bin, now there are five containers. Let’s remember that the estate we were implementing the program in is not a luxury apartment block in Warsaw. It is an ordinary housing estate like the majority we see in Poland. How do they manage then? They simply throw away garbage more often. We will present an innovative solution in May that could very well help remedy the space problem. These issues notwithstanding, are people generally in favor of the TMaster solution? As many as 85 percent said they do not want to go back to the previous system. When we were interviewing them, they raised another interesting and surprising argument. They are happy that the system is equipped with cameras, something we were afraid would cause opposition. They say the cameras also keep watch over their cars parked behind the garbage shed.
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Once the pilot program is complete, is there a next step to take this solution nationwide? Who would be responsible for introducing it on a larger scale? For cities with up to 100,000 inhabitants, city authorities have the deciding role. The software that comes with the system will be theirs to use. For larger cities, the decision is made at the borough level. After all, they are responsible for waste disposal and they incur the costs of improper waste segregation.
WE NEED TO REFORM THE SYSTEM FURTHER TO EXTRACT ACTUAL RESOURCES, NOT JUST DIFFERENT TYPES OF WASTE
Doing away with anonymity is what makes people feel responsible. It is also the aspect the environment ministry is very interested in. Your system also weighs the waste it collects. That should be quite useful for the authorities responsible for waste disposal, right? One of the key elements of the system is weighing the waste as it comes in. Authorities often ask us why we do it. Mass is the indicator that is used when the city pays for waste disposal, not volume. We need to know how much waste is being collected. We could very well turn waste into resources, thanks to such systems. When a homeowners’ association or cooperative signs an agreement for waste paper, the company responsible for it can come in when the mass reaches 300kg, for instance. Then they wouldn’t have to waste their time and fuel coming for a half-empty container. There are many inefficiencies in the waste disposal system that can be remedied with the right use of technology. If we apply it wisely, it could be a real breakthrough.
We are being contacted by the first homeowners’ associations too. They started calculating the fines they will have to pay if they don’t make their residents adhere to the recycling rules and it turns out that investing in a solution that will help them avoid these fines is simply cheaper. There seem to be no other way to make people recycle than to make them individually responsible for their own waste. After all, recycling in standalone housing estates is much better than in multi-family estates? That’s true. People want to pay for the amount of waste they produce. An elderly woman who lives alone and recycles does not want her charges to increase because her neighbors, six students in a rented apartment, do not recycle.
ROBERT SZCZEPANKOWSKI
CEO and head of the management board of T4B – a Warsaw-headquartered tech firm, that states on their website that they “not only create innovative products but also show an innovative approach.”
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TELEWORKING – A TEMPORARY BAND-AID OR A LONG-TERM CURE? COMPANIES IN ALL INDUSTRIES HAVE BEEN FORCED TO EMBRACE TELEWORKING. HOW MANY WILL CONTINUE TO TELECOMMUTE WHEN THE PANDEMIC IS OVER? BY BEATA SOCHA
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TECH
W
hen the news of the coronavirus first shook our reality, companies scrambled to protect their employees, as well as their business. Almost overnight, in sync with the government closing down schools, restaurants and banning all public gatherings to curtail the spread of the pandemic, many firms closed down their offices and switched to working from home. Tech companies responded first by introducing new unlimited home office rules, which allowed entire families to self-quarantine. Others followed suit quickly realizing the gravity of the situation. Since then, Zoom, Skype and Microsoft Teams have become the new watercooler, where people meet, socialize, exchange gossip and the latest Covid-relates facts and figures. Even though it has been technically possible to work remotely for decades now, telecommuting did not revolutionize work culture as quickly as many have expected. Granted, it’s been growing in popularity, but at an uneven pace. In the EU, the percentage of people who telecommute occasionally increased over the past decade – from 7.7 percent in 2008 to 9.6 percent in 2017 – according to Eurostat, the EU’s statistical office. The increase was slightly less pronounced for employees doing the majority of their work from home – from 4.7 percent in 2008 to 5.1 percent in 2018. Naturally, remote work is much more common for self-employed people (18.1 percent) than employees (2.8 percent).
Law, discipline and productivity
The reasons why telecommuting has enjoyed limited success among corporations are manifold. First, there’s the law. For instance, the Polish law allows for contract employees to telecommute, but the time of teleworking has to be specified in the contract. If an employee wants to work Fridays and Mondays from home, that’s perfectly fine, but they cannot simply switch to Tuesdays and Wednesdays without signing an annex to the agreement. Still, most of the reasons why telecommuting didn’t take the world by storm after the internet became commonplace, or even when cloud computing allowed for practically all applications to be accessed remotely, had more to do with the corporate culture, though. There has always been a strong belief that face-to-face contact was conducive to exchanging ideas and increasing productivity that no amount of teleconferencing could provide. Being able to hold ad-hoc meetings, better knowledge dissemination, easier onboarding process – all of these are indubitable advantages of working within the confines of an office. Also, many employees fear their staff will be less than diligent without supervision. You could argue that this problem was “solved” when companies started installing software that tracked and monitored employees’ activi-
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TELEWORKING PERCENTAGE IS BELOW THE EU AVERAGE IN POLAND
ties. Yet, the practice of spying on your employees, even with their consent, is widely frowned upon. So is limiting their access to certain websites (e.g., Facebook) to prevent them from slacking. That leaves employers with one of two options: trust your employees or keep them within an earshot. Poles are not known to be the most trusting of nations, which may be one of the reasons why teleworking percentage is below the EU average in Poland (at 4.6 percent in 2018), and far below record-holders: the Netherlands (14 percent) and Finland (13.3 percent). But the situation has now changed. More and more companies are embracing teleworking to protect their employees (and the continuity of their business) from the virus pandemic. After all, it would be considered irresponsible and insensitive to expect people to risk their and their families’ health.
Don’t overdo it
Most daily business can be done by email and phone, and an occasional teleconference. The goal of properly motivating employees to do their jobs can be achieved by setting targets and objectives and regular performance reviews. The old rule of “trust but verify” is the most common-sense approach when you cannot see your employees on a day-to-day basis. Knowledge dissemination is a little more tricky. We often don’t realize how much we learn by simply watching other people do things. Creating manuals, regular teleconferencing and mentoring sessions can remedy that but they require more proactive involvement from managers. They can no longer rely on simply correcting mistakes and answering questions as they arise. They need to anticipate more and ask questions themselves. When your employees cannot observe their more experienced colleagues on a daily basis, you need to check if they are on the right track or if they need more input. There’s always a risk of overdoing it, technologically at least: asking your employees to use several communicators, such as Slack or Skype, teleconferencing via Webex or Zoom, staying in touch on your mobile devices through WhatsApp or Telegram. All of these tools (and many others) can be useful. But when you introduce too many, the effect can be that your employees become annoyed. Moderation is also important when scheduling meetings. Daily updates make sense when you work closely in a team, but
for people with individual projects, weekly meetups make more sense.
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Greener and happier future?
Like with every new concept, people learn best how to telecommute over time, slowly increasing the doses. But in the face of the epidemiological threat, companies have been forced into a “sink or swim” test. Most are doing just fine. The only question is: what will happen next? Once there is no more cause for concern (be it a month, a year or more from now), will companies go back to business as usual? Or perhaps, having tested the new work routine, they might be more open to it in the future. The benefits of teleworking, like less rush-hour traffic, better worklife balance and greater job satisfaction, are on the table. The overall impact on employee productivity has yet to be measured, but it’s been long established that happier employees work better. And even amidst the economic recession the pandemic has flung the world into, there are reasons to be happy. We have found ourselves with a lot more spare time on our hands than we were accustomed to. Online entertainment
has flourished over the past weeks. Social media is churning out content on new, creative ways of spending our free time. Ads abound on courses that can teach you useful, new skills, while you’re waiting for the social distancing to be over. And on top of that, we have witnessed something that until recently seemed an impossibility. The total greenhouse gas emissions are expected to fall by 6 percent this year due to Covid-19, according to the World Meteorological Organization (WMO), the biggest drop since WWII. Unfortunately, historical data shows that emissions always picked up after each crisis even stronger than beforehand and there is no reason to expect the pandemic to be any different in that regard. But maybe, just a few percentage points more people and companies would commit to teleworking. It may not make much difference to global warming, but it would be a start. It’s too early to say whether the newfound enthusiasm for telecommuting is going to continue after the current threat subsides, but if it does, we may be looking at the beginnings of a shift toward a more family-friendly and environmentally-conscious work culture.
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Talking Points
Despite that coal-reliant Poland recalcitrantly refused in December to agree to EU’s plans to slash the bloc’s carbon emissions to net-zero by 2050, Danuta Hübner emphasizes that the country must meet the challenge head-on. INTERVIEW BY EWA BONIECKA
WBJ: Will the EU manage to safeguard its liberal and democratic principles over the next 10 years? Danuta Hübner: Liberal democracy and the rule of law are the cornerstones of the EU’s structure. The bloc won’t function properly if we removed those pillars and replaced them with some imitations like “sovereignist democracy” [Poland’s governing right-wing populist Law and Justice (PiS) party have recently made changes to the country’s judiciary claiming the reforms will make the court system more efficient and root out the leftovers of communism and adding that the changes
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are necessary to protect Poland’s sovereignty.] As we see from the results of recent elections, the wave of populism that was supposed to sink the EU, finally did not materialize. Despite the differences, the European Parliament and the European Commission are overwhelmingly pro-democracy and pro-liberty. We must always remember that it is the citizens and their rights that take precedence over the member states as main stakeholders in the EU. I think that now we’re in the process of raising consciousness about it across all the parts of the EU. If citizens do not engage, then it would be much easier for
Poland is supposed to receive money from the Just Transition Fund designed to help countries achieve climate neutrality. Will Poland phase coal out by 2050? The Polish government is ambiguous on this hot topic.
SHUTTERSTOCK
NO!’
non-democratic leaders and parties to direct the Union toward changes that would not be hospitable for our democratic ideals. And here, I would like to take this opportunity and “make a pitch” for the Conference on the Future of Europe which is designed exactly to be a citizens’ forum, an agora, if you please. [The Conference on the Future of Europe is a political body of the European Commission and the European Parliament, announced at the end of 2019, and since then being prepared to determine new agreements, or amendments to the existing ones, on the future of European democracy during 2020–2022.] This is a very serious concept of engagement of citizens. We know what we have to do to make the EU not only survive but thrive in a tough global environment. Green Deal, digital market, multilateral world governance, participative democracy, defense of human rights’ standards worldwide, to name a few. These are huge commitments but we cannot implement them if the rule of law is brittle inside the EU itself. This is why keeping the rule of law and liberal order intact is so important for all of us considering we are all EU citizens.
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Talking Points
MONEY MATTERS Poland would see its €2bn share of the EU’s Just Transition Fund – to sweeten its Green Deal ambitions for EU countries reliant on fossil fuels – cut in half under the EU budget proposal published on February 14, which penalizes countries that have not signed up to the bloc’s 2050 “climate-neutrality” goal According to the European Commission’s proposal, Poland would get 23 percent less for cohesion policy in 2021-2027 than in 2014-2020 The EU earmarked €82.5bn from 2014-2021 for implementing the cohesion policy in Poland making the nation the biggest beneficiary of the EU cohesion policy funds among all member states, according to gov.pl [European Union’s 1986 Single European Act defined the economic cohesion as being about “reducing disparities” of the least-favored regions] Poland has received (or would get soon) a total of €164bn in EU funds since joining the bloc in 2004, said PIE, a Polish economic think tank in May 2019w
In December, it asked for an exemption from 2050 climate neutrality. But no matter how we rely on delaying tactics, we need to face up to the challenge at some point. Because later, the transition will only be more painful. The EU wants to ease moving away from coal. Now we will have the substantial infusion of the Just Transition Fund to the tune of €2bn depending on the budget negotiations. This is a very opportune moment to redirect our vision to the future, away from the past. We have to say quite bluntly to the governing party that you cannot indefinitely buy social peace at the cost of
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keeping the future prospects of Poland’s growth stunted. This is bad economics, poor politics and harmful social strategy. We have to get out of this shortsightedness that sees the coal-based economy as something unchangeable. This is an anachronistic approach that we have to do away with if we want to move the Polish economy out of the danger of possible stagnation. Poland is still an economy that seeks new development drivers and new competitive advantages. The 30 years of new Poland has missed many opportunities. The climate crisis is another opportunity that may be missed. We can’t afford it.
Do you think Europe is entering a new era with many challenges but also new opportunities? Oh yes, absolutely. There is a new, fresh can-do attitude in the leadership of the [European] Commission, the [European] Council and the [European] Parliament. Also, there is a spirit of interinstitutional cooperation. Ursula von der Leyen [European Commission president], Charles Michel [European Council president] and the Parliament’s leadership agree on fundamental challenges before us – the fight against climate change, inclusive and growing economy that
works for people, expanding social fairness and equality, Europe’s digital transformation, promoting our values, strengthening the EU’s voice in the world, as well as shoring up the [European] Union’s democratic foundations. There is, I think, an understanding that those challenges are interconnected and need a comprehensive response, not just separate, silos-like, partial reactions. Those responses should be also quite specific. Just two examples. When it comes to climate, how to reduce our carbon footprint? What effect would it have on transport connections, jobs? How will treating climate seriously redefine our lifestyle? Are we prepared for necessary changes or even sacrifices in what we take for granted? Also, the digital transformation will be a wholesale, fundamental transformation of the job market. How can we teach and reteach new skills to our citizens? Where do we find the funds? How will the public-private partnership have to evolve? The task in front of us is to transform those challenges into new opportunities for progress. We live in interesting times, as the Chinese adage goes. A consciousness breakthrough has started on a global scale. There is a multilateral understanding that the challenges we face can only be overcome by a joint effort. Not so long ago we regretted the lack of European demos. And, I have the impression, from my conversations everywhere in Europe, especially with young people, that these
demos have been born already, from the bottom up, spontaneously. Climate defense movements being just one example. Maybe we have finally reached such a point when numerous crisis phenomena plaguing the world and Europe made us all, or almost all, realize that unity on the European continent and European integration is our only path toward a safer and better future. European solutions are increasingly sought after as a seal of certitude in uncertain times. The self-isolating policy of [US] President Donald Trump also makes us more aware of the need for global cooperation and the importance of common rules and institutions in the area of international trade and investment and general behavior. Multilateralism, confronted with the unpredictability and political narcissism of unilateralism, is back in favor again, as a vaccine against the usurpation of populist and irresponsible politicians. And that is good. We just have to make it work, in cooperation with our partners, the world over. How will the EU’s relations with the United Kingdom look like after Brexit? Before we discuss the future relationship, it is important to highlight that we are currently in the transition period governed by the terms of the Brexit withdrawal agreement [an international agreement between the EU and the UK that sets out how the UK’s EU membership will end.]. This means that the status quo is largely
unchanged – we continue to conduct trade on the same terms as if the UK were a member state. The cooperation functions on almost the same terms until the end of the year. EU laws continue to apply in our relations with the UK. The only tangible difference is that the UK no longer sits at the EU decision-making table. The agreement provides legal certainty for EU citizens residing in the UK and UK citizens residing in the EU at the end of the transition period. The implementation and application of citizens’ rights in the EU will be mon-
settlement. Secondly, negotiating the agreement that governs the future relationship between the EU and the UK. We are not in the clear yet – a no-deal Brexit is still possible. The political declaration, although not legally binding, was agreed between the EU and the UK. Its purpose is to frame the debate during the negotiations on the withdrawal of the UK from the EU as to what kind of future relationship both sides would strive for during the negotiations. The latter is an overarching concern, especially given
ship differ significantly in terms of trade but we share similar views on other issues, such as cooperation on internal and external security matters. There are differences in how we seek to achieve those aims, for example how such cooperation should work. Key concerns remain, especially with regard to EU access to UK fishing waters, rights of citizens, mobility of people, transport, cooperation in research and development, financial services and many other issues. In light of these points, I think we will have a landing zone for the agree-
We live in interesting times: a consciousness breakthrough has started on a global scale itored by the EU Commission and in the UK by an independent national authority. The agreement also includes a protocol on the Republic of Ireland and Northern Ireland that is designed to prevent a hard border on the island between the nations. This protocol comes into force at the end of the transition period. During the transition period, two issues will be important. Firstly, creating the architecture necessary to ensure that the agreement is properly implemented and enforced. This includes governance and the framework for dispute
the UK government’s stated position that it will seek to diverge from EU standards and rules. This will be one of the main bones of contention. We have only eight months to negotiate and ratify an agreement that is supposed to cover a range of complex issues. The EU is clear in the fact that it wants an ambitious agreement, whose trade element should be based on zero tariffs and zero quotas, whilst providing a level playing field for companies in the EU and in the UK. The UK’s and the EU’s positions on how they see the future relation-
ment that will reflect a more pragmatic approach, but as time is limited, it is difficult to tell which result the next eight months of negotiations will bring. How will Brexit affect Poland’s position in the Union and the country’s relationship with the UK which is such an important economic partner? In theory, Poland will gain strength from an institutional perspective within the EU. Poland is one of the bigger EU member states, and with the departure of the UK, its relative number
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Talking Points of MEPs in the European Parliament will increase, thereby giving Polish MEPs a bigger weight. The same can be said of the Council, where its relative share of votes in the Council will also increase. In sum, our
national security. So only the EU issues guidance on the matter. The interests of member states are, in my view, the more important factor at play. Different member states have different approaches to
Under the Croatian Presidency of the Council of the European Union, we have developed a renewed focus on the Balkans – a region of vital importance for us. [The presidency of the Council of the European Union rotates
There is a multilateral understanding that the challenges we face can only be overcome by a joint effort influence will increase. Politically, Poland has lost a member state, with which it is more closely aligned. The UK will, however, remain a partner of Poland, not least because of the economic ties, but also because of our Polish citizens, who have built a life in the UK. In the sphere of digital technology development, the EU has not blocked, despite Washington’s pressure, Huawei’s access to the development of the 5G network in the EU. Does this show a reasonable response to the US pressure in the sphere of trade relations? I think that we find the answers in the decisionmaking process in the EU and the interests of individual member states. As regards the former, the decision is in the competence of the EU’s members, since they retain sole competency for matters of
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this issue. For example, in Germany, Huawei already provides core parts for its 5G network, whereas Italy amended its legislation to allow the government to block contracts with non-EU telecoms providers. So each member, unfortunately, is looking at its own interests with regard to the establishment of 5G in their territory. The US only has influence where the EU countries decide that it is in their interest to follow its position. With the behavior of the Trump administration, it will be more difficult for the US to influence the EU in these respects. The EU’s foreign policy is weak in the face of a changing world and the ongoing rivalry between China, Russia and the US. Are there any opportunities in the current parliamentary term to develop a unified EU foreign policy?
among the EU member states every six months. During this 6-month period, the presidency chairs meetings at all levels in the Council, ensuring the continuity of the EU’s work in the Council.] We want to bring candidate countries in the region into our fold and EU accession is a powerful motivator for neighboring countries to subscribe to our values. Until now Brexit has taken a lot of time and energy, and
its conclusion will now allow us to focus our foreign policy and trade efforts on the EU’s external policy. The EU is also collectively stepping up its efforts to meet NATO funding targets, which has cemented member states’ commitment to NATO and our common defense efforts. The US’ latest Middle East peace plan, put forward by the Trump administration, also highlights that the EU’s soft power is still an important tool for peace and stability in the region. The US has not done anything to promote either in the region, and the only other player besides Russia is the EU. Our efforts for democracy support are not toothless and can make a small but decisive difference, for example in Latin America. As we have shown in our relations with Vietnam, our focus on expanding our trade agreements across various parts of the world yield results in promoting human rights, stability, and the adherence to multilateral rules. Especially via our trade policy over the coming years, we can achieve a great deal in this respect.
Danuta Hübner is a Polish politician, diplomat, economist and MEP. She has served as an EU commissioner from 20042009 when she resigned to become an MEP for Poland’s Civic Platform (PO) party.
NEWS SHUTTERSTOCK
CORONAVIRUS: skyscraper donates medical device to hospital The management of Złota 44 – a mixed-use skyscraper in the center of Warsaw – has provided a hospital in Grodzisk Mazowiecki, a town 30km southwest of the Polish capital, with a specialist device for remote diagnosis of body temperature: a thermal imaging device. Increased body temperature is one of the basic symptoms of Covid-19, the coronavirus disease. The donation will allow medical personnel to keep a safe distance and detect the first symptoms of infection in a fast and contactless way. The owners of the building will soon purchase the second, equally technologically advanced device and donate it to another medical facility. Moreover, as a gesture of support and solidarity with those who work on the front line every day, the facade of the apartment building will be symbolically illuminated every few days in the Polish national colors of white and red. Złota 44 is the tallest residential building in the EU. It was designed by Polish-American architect Daniel Libeskind. >>>
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LOKALE IMMOBILIA | NEWS Wooden buildings to ease housing shortage?
“I am delighted to be given the opportunity to drive forward our business in Poland, leveraging our global network and the skill base of our local team to deliver the best insight and sophisticated commercial real estate solutions to add maximum value for our clients” – said Krzysztof Misiak on April 22 after being appointed by Cushman & Wakefield – a Chicago-headquartered global commercial real estate services firm – as the head of its Poland office
In Poland, there is a shortage of approx. 2 million apartments to reach the level of the average in the European Union, where there are 440 residences per 1,000 inhabitants, the development ministry has estimated. Meanwhile, the country’s Central Statistical Office’s (GUS) analysis shows that in 2019 the number of dwellings completed exceeded 207,000. Such a pace would fill the housing gap in ten years, but due to the coronavirus epidemic, this year will be difficult to achieve similar numbers. However, experts from Polish Wooden Houses (PDD) have indicated recently that in the following years, the acceleration of the construction pace may be influenced by the popularization of wooden construction, which is much faster and independent of the season.
RECORD-HIGH DEMAND FOR WARSAW OFFICES IN 2019
Walter Herz, a Warsawbased commercial real estate agency, summed up 2019 on the office real estate market. The report includes information that Warsaw with at least 5.6 million sqm of available office space remains an unsurpassed office leader in Poland. The capital agglomeration has facilities comparable in size to the total offer in the six largest regional cities in the country. Warsaw offices are primarily located in three districts: Mokotów, Śródmieście and Wola. They include about 75 percent of the space available in the city. Over a quarter of the total office space is situated in the largest office buildings, exceeding 30,000 sqm. However, 2019 was not successful for several Warsaw investments.
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So their inaugurations have been postponed to this year. Hence, the available offices in Warsaw increased last year by about 165,000 sqm, which is the lowest result in years.
NEW LARGEST WOODEN GRADUATION TOWER IN EUROPE TO BE REVITALIZED
The youngest (built 1859) of the three Ciechocinek saline graduation towers will be renovated. The contractor has secured the area and begun the demolition of damaged parts of the structure and dismantling of bundles of brushwood (typically blackthorn). The investor is the Ciechocinek Health Resort, established in 2012 by the local provincial government, which manages the graduation tower complex on behalf of the province. Completion of all works
is planned for the end of 2021. The value of the entire investment is PLN 21.6 million. The implementation of the task is possible thanks to PLN 15 million co-financing from the funds of the Regional Operational Program of the Kuyavian-Pomeranian region. Ciechocinek is a spa town located on the Vistula River near the city of Toruń, northern Poland.
CORONAVIRUS TO HIT HOLIDAY RENT MARKET
According to Emmerson Evaluation estimates contained in the latest report “The hotel and condohotel market in Poland”, before the outbreak of the coronavirus epidemic more than 20,000 rooms in condo hotels and holiday apartments were to be rented by 2022. Thus, their domestic offer was
to increase by over 70 percent compared to the end of 2019. However, due to the epidemic, the entire market for condo-hotels and holiday apartments will have to swallow a bitter pill. Condo hotels and holiday apartments have enjoyed huge interest from investors for several years. According to the report, summarizing 2019, in Poland such facilities offered a total of almost 29,000 rooms. The most popular in terms of supply is the coastal belt, which in the study of Emmerson Evaluation is represented by holiday resorts, such as Władysławowo, Kołobrzeg, Świnoujście and towns located on the Hel Peninsula. At the end of 2019, there were 17 condo hotels and over 100 facilities with holiday apartments in this area, offering a total of over 14,500 rooms.
PHOTOGRAPH THIS PAGE CUSHMAN & WAKEFIELD, OPPOSITE TOP SHUTTERSTOCK, BOTTOM PIXABAY
BRIEFS
BRIEFS MORE OFFICES FREE SPACE IN WARSAW
Polish regional office market resistant to coronavirus: CBRE According to the CBRE report “Regional office market in Q1 2020”, the office space market in regional cities is largely driven by the BPO/SSC sector. This means that in the long run international outsourcing companies will continue to consider and choose Poland as a location for their centers but in the coming quarters, growth might slow down a little. This situation will return to normal as soon as the coronavirus pandemic circumstances stabilize at a global level. “In the first quarter, regional markets in Poland were resistant to the impact of the pandemic. In the coming quarters, here too, a slowdown in tenant activity will be noticeable. We forecast, however, that it will mostly result from a revision of development plans, not a total suspension of operations. On the other hand, however, the performance of the current office space due to limits and distance maintenance will decrease over time owing to the ongoing crisis – this will also have to be addressed,” the press release published on April 27 states.
PLN 460,000,000
NET
The value of the contract Poland’s national roads authority (GDDKiA) has signed with Budimex – a Poland-based construction company owned by Spanish multinational transport giant Ferrovial. The contract concerns the continuation of the design and construction of the Expressway S5 with a length of approx. 23.3km near Bydgoszcz, northern Poland. The completion date has been set at 22 months from the date of the contract, April 27.
There are a total of 120,000 sqm of empty offices since the beginning of April, according to Warsaw-based market researcher REDD’s real estate digital data updated 24/7. This is the highest result in recent months. REDD data also shows another disturbing trend in the Warsaw market and that SMEs are ejecting the offices. The number of available office space throughout Poland has been growing systematically since mid-March. However, the largest increase has been witnessed since the beginning of April. There has been a record increase in recent months.
SILESIA REGION TO BECOME WAREHOUSE LEADER IN POLAND? Silesia has almost 3.2 million sqm of warehouse space. Only 478,000 sqm is under construction this year which is the second spot in the country after the Mazowieckie region of which Warsaw is a part, according to CBRE data. The company’s experts have indicated that Silesia may soon become the most promising warehouse market in Poland. Demand in this region remains at a much higher level than supply and development is fostered by, among others, development of the Pyrzowice airport, revitalization of post-mining areas and investment spaces along highways and expressways. There is currently 18.4 million sqm of warehouse space in Poland. Almost one-fifth of warehouse facilities (17 percent), i.e., 3.2 million sqm are located in Silesia. Only the Mazowieckie region, together with Warsaw has more – over 4 million sqm.
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BOOK OF LISTS 2019/2020
A GUIDE TO POLISH BUSINESSES AND INDUSTRIES
25
years on the market
70
rankings and alphabetized list
WWW.BOOKOFLISTS.PL
1,000+
firms included
REPORT The ABC's of Poland's Office Market
issue 05.2020
Cavatina Holding's Global Office Park project in Katowice
Building and leasing big in Warsaw • Regional boom • Emerging office markets • Market in numbers • Office trends to watch
REPORT Introduction
Poland’s office stock has more than doubled over the last decade
Warsaw: big projects under construction, large deals signed as the city remains Central and Eastern Europe’s most vibrant office market
Sustainable success
Poland’s office market boom goes on The Polish office property market has seen tremendous growth in recent years, driven by the country’s good macroeconomic situation and the ongoing expansion of both domestic and foreign companies responsible for massive job creation. At the end of 2019, Poland’s total existing stock of modern office space reached almost 11.2 million sqm, according to Cushman & Wakefield data. This means that it had more than doubled over the preceding decade, going up from the over 4.7 million sqm recorded at the end of 2009. Just five years ago, the stock stood at slightly more than 7.4 million sqm. Since then, annual office space demand and supply levels have consistently remained very high with the former even setting new records of late. As the world fights the new coronavirus disease and fears of a global slowdown persist, concrete forecasts are difficult to make, but assuming that the pandemic proves only a temporary disruption, the sector – for now still based on strong fundamentals – will certainly continue its solid performance. In this report, we are taking a look at the
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Medium-sized cities: more development and leasing activity expected in the coming years as the markets emerge as interesting alternative office locations
most important figures and trends defining Poland’s office real estate market as it keeps changing and adapting to both domestic developments such as the rapid improvement of Polish cities’ transport infrastructure and global phenomena including the green building and workplace revolutions. We are focusing on Warsaw (A), the biggest regional cities (B) and some of the smaller but quickly growing urban centers (C), as well as on issues that will in the near future matter a lot in all locations across the country. Warsaw remains by far the largest and the most important office market in Poland, one that has been witnessing the most development and investment activity, as
well as the most spectacular projects and transactions. The city has already become the undisputed leader in the CEE region and is now also arguably one of the most attractive office destinations in Europe. For some global investors, the Polish capital has been the first-choice destination on the continent. However, the boom in the Polish office property market is not limited to Warsaw. The largest regional cities in the country – Kraków, Wrocław, the Tri-city agglomeration, Poznań, Katowice and Łódź – have been strengthening their positions, largely due to the growth of the BPO/SSC sector. The strength of those markets has been a big asset of the Polish office sector which,
Large regional cities: plenty of development, leasing and investment activity as the markets become truly established office destinations
Mennica Legacy Tower
New office towers springing up in Warsaw The significant number of very big projects that are currently being built in Warsaw is perhaps the best proof of the very good condition of the city’s office market. Indeed, never before has so much new office space been under construction in high-rise schemes in the Polish capital. This year alone, three such developments – Mennica Legacy Tower (Golub GetHouse/Mennica Polska), Skyliner (Karimpol) and The Warsaw HUB (Ghelamco Poland) will be completed. Ghelamco is now also working on a skyscraper investment called Warsaw UNIT and Skanska is building the skyscraper phase of its Generation Park complex. Both companies have further high-rise projects in their pipelines. Meanwhile, PHN last year started constructing its Skysawa scheme. For its part, HB Reavis will next year finish construction work on its Varso Tower development which will not only tower over the Warsaw skyline, but will also be the tallest office building in the entire EU.
Skyliner
Varso Tower under completion
unlike the markets in many other countries of the region, offers plenty of development and investment opportunities outside the capital city. Meanwhile, a number of medium-sized Polish cities – including Lublin and Szczecin – have emerged on Poland’s office map as interesting alternatives to their bigger regional peers. As some of the biggest Polish cities face qualified labor force shortages, those smaller markets – offering access to well-educated employees and benefiting from infrastructural investments – could soon attract more tenants and developers alike. We are taking a glance at some of the emerging office markets that will be worth watching in the coming years. >>>
AIMING HIGH
The Warsaw HUB
310 meters
the height of HB Reavis’s Varso Tower, soon to become the tallest office building in Poland and in the entire EU
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A REPORT Warsaw
Capital dominance Warsaw is still home to the biggest projects, lease deals
1. Record transaction Spectacular figures have defined the office property market in Warsaw in recent years, with the Polish capital now seeing a record-high take-up level and a record-low vacancy rate. Developers have hardly been able to deliver a sufficient amount of space to meet the huge demand. A total of 878,000 sqm of office area was leased in the city in 2019 (a 2 percent increase on the record year 2018), which brought the rate of unoccupied space to 7.8 percent, the lowest level in seven years. The demand has largely been driven by consolidation and relocation processes in the banking and insurance sectors where companies leased big last year. As many as 12 lease deals signed in Warsaw in 2019 exceeded 10,000 sqm, and four of them exceeded 20,000 sqm. It is now very difficult to find an office area in the city that would be sized several thousand square meters and could be available this year. In 2019, just 162,000 sqm of new space was completed in the capital (down 30 percent y/y). However, the supply gap witnessed of late is currently coming to an end. A combined 423,000 sqm in 19 projects will be delivered in Warsaw this year. The five biggest of those schemes will account for almost half of that volume (202,000 sqm).
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The biggest office lease deal to have ever been signed in Poland took place in Warsaw last year. Financial institution mBank, which had decided to consolidate its Warsaw operations, pre-let 45,600 sqm in the Mennica Legacy Tower building that Golub GetHouse and Mennica Polska are developing in the city’s Wola district. Other huge transactions included bank PKO BP's lease of over 24,200 sqm in the Chmielna 89 building in central Warsaw, which is being developed by Cavatina.
Warsaw’s office vacancy rate is now lowest since 2012
4. New office locations emerging
2 . Focus on the center The bulk of the development activity (over 80 percent) in Warsaw is now taking place in central locations, including in the CBD and the City Centre West zone. The latter zone alone – encompassing the Rondo Daszyńskiego area and parts of the Wola district lying closest to the CBD – accounted for more than 50 percent of all space under construction at the end of 2019. The completion of a new subway station and the availability of large post-industrial sites have opened new investment opportunities there in recent years.
3. Służewiec makes a comeback The Służewiec neighborhood in the Mokotów district in Warsaw’s south, which features over 1.1 million sqm of office space and was until 2015 the biggest office zone in Warsaw, keeps turning into a more attractive multi-function area. Criticized for its office monoculture, Służewiec saw less office development activity over the past few years and now has the highest vacancy rate (16.6 percent) in the city. However, the situation is improving as more residential and hotel projects, as well as infrastructural investments, get completed there. Office demand in the neighborhood increased to almost 200,000 sqm in 2019 and there are signs that the zone will soon attract more investors as investment products in other parts of Warsaw become scarcer.
While Wola and the CBD will likely remain the largest concentrations of new office space in Warsaw in the coming years, a number of major projects could soon also be launched in several (less popular until recently) locations in the city. Those will include the northern part of central Warsaw where HB Reavis is now developing a large scheme called Forest and a few other developments are in the pipeline. The eastern Praga district, too – made more attractive through the construction of the second subway line – could see more investment. For example, there is room for new high-rise office buildings in the Port Praski area, located just next to the National Stadium.
5.59
m sqm
the total stock of existing office space in Warsaw, Q4 2019
SOURCE: CUSHMAN & WAKEFIELD
5. Aging buildings’ owners’ strategies With developers working on huge amounts of new office space in Warsaw, the owners of many of the older properties are increasingly under pressure to rethink their strategies. Many tenants have already decided to move to new, more modern projects, vacating space in aging buildings delivered 15-30 years ago. Others will likely follow suit. In the near future, one can expect more investments in the city entailing thorough modernization and repositioning of existing office properties. In some cases, owners may even opt for the demolition of existing buildings and their replacement with bigger and/or more modern projects if they find such an option profitable.
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B
REPORT Major Cities in Poland
Regional growth
Major cities outside Warsaw keep attracting huge developer and investor interest Poland’s largest regional office markets have been witnessing their own booms in recent years, which manifests itself in the intense development, leasing and investment activity there. Renowned international developers, tenants and investors are present in those locations. A record 547,000 sqm of office space was completed in the eight biggest regional markets in the country in 2019, which means that the combined existing stock there (5.61 million sqm) is now – for the first time in history – bigger than the stock in Warsaw (5.59 million sqm). Kraków (25 percent) and Wrocław (21 percent) together accounted for almost half of the new supply delivered in regional markets last year. At the end of 2019, a total of approximately 800,000 sqm was under construction in the eight markets, with the most of that volume concentrated in Kraków, Katowice and the Tri-city. Regional office space demand also remains very strong with the 2019 leasing volume amounting to almost 693,000 sqm. The average vacancy rate in the regions stands at 9.6 percent. In terms of investor interest, too, regional office markets have been putting up a strong performance – a record (more than) €1.4 billion was invested in office properties there last year.
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Katowice
Kraków
Demand doubles
BPO/SSC leader
In 2019, demand for office space in Katowice reached more than 82,000 sqm, which means it was twice as large as in the previous year. The vacancy rate decreased by 3.2 percentage points to 5.6 percent. Only 10,000 sqm of new space in three projects was completed in the city last year, but increased tenant interest has already translated into more development activity with a total of over 210,000 sqm in 13 schemes now under construction. Over the next three years, Katowice’s office stock is expected to grow by an average of 10 percent annually.
Kraków has seen its office stock almost double over the past four years to reach nearly 1.42 million sqm, which accounts for more than a quarter of the entire regional office space volume. Close to 500,000 sqm of additional space is expected to be built in the city by the end of 2022. Annual gross takeup levels have been setting new highs since 2014 with the 2019 figure standing at over 266,000 sqm. The IT sector accounted for 38 perc ent of the 2019 leasing activity in Kraków, which remains Poland’s leading business services sector location.
Łódź
Tri-city
Flex growth
High absorption
Flexible office space operators showed an increased interest in the Łódź market in 2019 with New Work accounting for the largest lease transaction (almost 5,000 sqm) signed in the city last year. Nevertheless, it is still the BPO/SSC sector that drives the demand for new office space in the Łódź market. The office stock in Łódź in 2019 exceeded the 0.5 million sqm mark growing by more than 60,000 sqm and reaching over 528,000 sqm. More than 90,000 sqm is now under construction, of which 81,000 sqm will be delivered this year.
The Tri-city agglomeration should at the beginning of 2022 become the fourth office market in Poland (after Warsaw, Kraków and Wrocław) with over 1 million sqm of existing space. Currently, the market’s stock amounts to more than 838,000 sqm with over 160,000 sqm under construction. Demand in the Tricity last year grew by over 19 percent y/y and reached 100,700 sqm. Net absorption (67,300 sqm) exceeded the new supply level (61,100 sqm), which led the vacancy rate to decrease to 4.9 percent (the lowest level among regional markets).
Poznań Record supply The level of new office space supply in Poznań last year reached an all-time high – a total of 85,700 sqm in ten projects was completed there. This brought the existing stock in the market to more than 564,000 sqm (an almost 18 percent increase y/y). Some developers in the Poznań market are now waiting with launching new schemes to see if the 2019 supply gets absorbed. At the end of last year, the vacancy rate in Poznań stood at 10.8 percent and was 3.6 percentage points higher than a year earlier.
Wrocław Convenient location Wrocław has been benefiting from its proximity to the German and Czech borders, as well as its pool of qualified employees. The city’s office stock last year grew by more than 147,000 sqm reaching almost 1.2 million sqm. Major developers including Cavatina, Echo Investment and Skanska are now active there. Demand in the Wrocław market last year reached a high level of over 123,000 sqm. The city continues to be appreciated by big-name tenants – in 2019 companies such as Toyota Europe signed lease agreements in Wrocław.
Daniel Draga, a management board member at Cavatina Holding
Market resilience The last few years have shown that Poland’s commercial property market is immensely attractive for foreign investors. International companies from the BPO, SSC and IT sectors have been opening their offices in the largest cities across the country. Such factors as access to an excellently educated labor force, competitive (in comparison to Western Europe) labor costs and access to international airports have been playing a major role in generating the big demand for office space in Warsaw and regional cities alike. Our market still has all these assets, but because of the global coronavirus pandemic, one cannot rule out the possibility of an economic slowdown in the near future. However, when it comes to long-term prospects, the real estate market will certainly hold its own. We are focusing on maintaining the current pace of the group’s operations. We are working towards achieving the construction, leasing and sales targets that we have set for this year. At the same time, we are acting in line with the government’s health and safety-related recommendations. In accordance with the law, work at our construction sites is proceeding apace with precautionary measures being taken. At the same time, commercialization and sales processes regarding our properties are underway.
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REPORT Medium-sized Polish cities
Rising stars
A number of smaller, but promising cities are seeing their office stocks grow Poland’s largest regional cities have now long been office hot spots, but several medium-sized urban centers across the country also have the potential to become important office destinations in the near future. The biggest real estate service firms already include Lublin and Szczecin in their regional office market reports, and experts argue that such locations as Białystok, Bydgoszcz, Kielce, Olsztyn, Opole, Radom, Toruń, Zielona Góra, Rzeszów and the main cities of the Silesia agglomeration will be worth watching in the coming years. Such cities have sizable student populations and thus could in the future be attractive markets for tenants including BPO/SSC sector companies. To date, it is mostly local developers (often also present in the residential sector) that have been active in those markets, said Krzysztof Misiak from Cushman & Wakefield. However, there are exceptions with Vastint, an international real estate organization, having completed a project in Szczecin and White Star having built a scheme in Radom. Medium-sized cities attract office developments whose size corresponds with the limited demand there – most of such investments offer between 5,000 sqm and 15,000 sqm of leasable space.
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a certain scale and a certain level of investment liquidity. Misiak said that the threshold of 300,000 sqm of existing space is the entry-level for major developers. To be able to draw major investors, a market needs to have a track record of at least five office building sales transactions.
Lublin: eastern leader Lublin is the biggest office market in eastern Poland and the seventh-largest regional office market in the country. At the end of last year, the city had a total of over 191,000 sqm of modern office space in 48 buildings. A further 22,000 sqm was under construction. Nearly 9,000 sqm of office area was leased in Lublin in 2019. The city attracts tenants from the BPO/SSC, IT and BFSI (banking, financial services and insurance) sectors. The largest 2019 deals included the lease by Santander Bank Polska of 4,700 sqm in CZ Office Park.
Scale needed Some of the smaller regional office markets could in the future attract large international developers and investors that are already present in Poland’s biggest urban centers, but they first need to see their markets achieve
Szczecin: more activity With its growing BPO/SSC sector (over 40 operating business service centers), the northwestern city of Szczecin has already become a sizable regional office market. At the end of 2019, the city’s stock totaled over 180,000 sqm, while 6,000 sqm was under construction. The Szczecin market last year saw an increase in development and leasing activity. A total of around 25,000 sqm of new space in four buildings was completed (which marks the highest annual supply level in the market’s history) and demand reached over 13,500 sqm.
MARKET IN NUMBERS €3.8
billion
the total value of investment transactions in Poland’s office sector in 2019 Source: Colliers International
The figure accounts for 50% of the combined 2019 commercial real estate transaction volume and marks a 39% increase y/y. Apart from established funds from Western Europe, major transactions were also signed by new investors from Asia and CEE
€386
million
the value of last year’s acquisition of the Warsaw Spire tower by Immofinanz This was the biggest single-asset investment transaction signed in the Polish market in 2019. Other major deals in the office sector included the purchase by CPI Property Group of the Warsaw Financial Center for €275 million
52,000
sqm
the amount of flexible office space completed in Poland in 2019 Source: CBRE
At the end of last year, the share of flexible areas in the total modern office space volume in Poland stood at approximately 2.6%. According to CBRE experts, this figure could go up to around 5% in the coming years if the sector’s current growth continues
€24
sqm/month headline office rents in prime Warsaw locations Source: Cushman & Wakefield
€375-€1,400
sqm of GLA the price of land for office projects in central Warsaw Source: Colliers International
8.7%
the average vacancy rate in Poland’s office market, Q4 2019 Source: Cushman & Wakefield
4.25%-5.50%
yields for the best office assets in Warsaw Source: Knight Frank
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REPORT Future Trends
Keeping pace
Poland’s office market is now shaped by the latest global trends 1 . Making places The beginnings of the office property market in Poland only date back to the 1990s. That’s when the country started building its free-market economy after four decades under communist rule. The initial phase of its development was mostly defined by copying ideas that had long been known in other, more established, marketplaces. There was a lot to catch up with, and in some cases, this also meant the implementation of solutions which soon began to be seen as inefficient and outdated. Those times are now definitely gone. The Polish market has matured and the quality-related expectations of urban planners, as well as of buildings’ owners and dwellers, have grown tremendously in recent years. To remain competitive in today’s market, developers currently need to keep pace with the latest global trends as far as urban planning, office building design and workplace solution trends are concerned. Indeed, in some areas, Poland has even been among those who are leading change these days. This is arguably true for such modern concepts as sustainability and flexibility. Here we list some of the most important trends that are already shaping Poland’s office property market and will certainly grow in significance in the coming years.
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Mixed-use buildings sometimes end up creating – in locations where the availability of a sufficiently large plot allows for such an investment – huge multi-function projects. They often entail the renovation of neglected postindustrial properties that have the
potential to become new neighborhoods in themselves. Prime examples of ongoing place-making schemes of this kind include Echo Investment’s Browary Warszawskie and Capital Park’s Fabryka Norblina, both of which are located in Warsaw.
2 . Building green Major green certificates such as BREEAM and LEED have already become the standard in the Polish market. Any new office project needs to feature green certification to be able to attract tenants and investors. However, more needs to be done as sustainability issues come to the fore amid what many now call a global climate emergency. There are concerns as to how climate change will affect property values. In the near future, one can expect a drive towards developing net-zero buildings.
3. Location rules “Location, location, location” – we all know the old quip about the three most important factors determining a property’s attractiveness, but it has probably never been more true in Poland’s office market. As employers compete to win and retain the best talent, a well-located office is an asset that cannot be overestimated and is worth investing in. This is exemplified by the success of the new office hub in Warsaw’s Wola which, thanks to its good transport infrastructure, has been able to attract tenants from cheaper, but harder to get to locations.
4. Mixing uses Office monocultures no longer work – tenants want to be in properties offering access to amenities, developers and investors understand that synergy effects can be achieved by combining various building functions, and city officials and inhabitants alike appreciate those creating places that are not dead zones after office hours. An attractive office building should also accommodate retail and service space, and be located close to residential buildings.
6. Going high-tech Poland’s office buildings are more and more advanced with energy-efficient technologies and sophisticated parking and lift solutions having already become commonplace. However, there is still a gap between the needs of the younger, technology-savvy generations of employees and the offerings of landlords, many of whom have not yet embraced the proptech revolution. In the coming years, owners will be stepping up their investment in property technology as tenants increasingly expect to have access to the latest applications in their workplace.
5 . Flex revolution Dramatic changes in the way that people work and tenants’ expectations of more flexible space arrangements and leasing terms have been driving the demand for co-working and serviced office areas. Warsaw has in recent years been one of the fastest-growing flex markets in Europe. At the end of 2019, Poland’s total existing stock of flexible space exceeded 220,000 sqm, of which over 147,000 sqm was located in the country’s capital. The trend is also visible in regional cities with Kraków’s stock having almost doubled last year.
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REPORT Expert Opinions Daniel Bienias, Managing Director, CBRE in Poland
Strengthened trend For many companies the coronavirus pandemic is an exam in remote working. As the latest Gartner’s forecasts show, even every third remote employee will no longer work in the office full time. It should be emphasized that coronavirus only accelerated what was eventually going to happen on the labor market. Our latest research, conducted jointly with Grafton Recruitments before the coronavirus pandemic, shows that the vast majority of Polish employees count on the possibility of working remotely for at least one day a week. What is more, up to 51% of employees admit that the possibility of remote working affects their efficiency. So, coronavirus just reinforced a trend that would have become the norm anyway. However, this does not mean that offices will no longer be needed. Employees will be given the freedom to choose the workplace, but they will continue to meet with other employees and clients in the office, and this social aspect is the most significant. I think that the outbreak of the virus, which has locked us in our homes, has clearly showed everyone how much we need contact with other people. Interpersonal relations in the workplace are very important, and the office is the key to making them possible.
Nicolas Klukowski, consultant, financial advisory department, at Mazars in Poland
Leasing issues
The year 2019 involved a lot of activity and Poland saw attractive results in the office sector. The current year 2020 would also have been likely to maintain this trend, offering bigger office supply to meet the rising demand. However, the situation has changed and it is now difficult to measure precisely the impact of the coronavirus crisis. At the moment, compared to previous forecasts, higher rental levels and a slowdown in investment activity can be expected. At the same time, owners (i.e. landlords) are facing big issues with the payment of rents during the coronavirus pandemic. Most of lease processes are under negotiations and the outcome is uncertain due to the absence of special regulations. Regarding development, investors declare that the current situation has not stopped office construction. During the first week of April, more than 100 projects were under construction in Poland with a total area of over 1.7 million sqm. The coronavirus crisis has changed the way people live as they are bound to stay at home. All types of assets such as shopping centers, hotels and offices have remained empty since the outbreak. The office property sector is being directly affected and its future is about to change as the remote work model has become a widespread practice. This new way of working is now undergoing a test phase and companies are now choosing if they want to adopt this practice from now onwards.
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Kamil Krępa, head of leasing at TDJ Estate
New opportunities Definitely, the coronavirus pandemic came as a shock and no one expected this black swan to disrupt business and the economy on the scale we are observing at the moment. From TDJ’s point of view, the office sector has been impacted to a limited extent due to the Business Continuity Plans deployed by office tenants, aware of the global reach of their services and their obligations regarding back-up scenarios. Tough times have come for retailers with food and beverages sector companies not able to conduct their business in a regular way. In the .KTW office building we have – taking a partnership approach – concluded an extraordinary agreement with the canteen operator, which provides for the suspension of the tenant’s lease obligations. The construction process of .KTW II is ongoing and we do not expect any delays with regard to supplies and workforce. As a responsible investor we have implemented all the recommended procedures and health and safety measures to prevent potential contagion. On the other hand, the leasing process is underway and companies, which generally plan long-term, are continuing their analyses as far as the establishment of new business units and the relocation and expansion of existing ones is concerned. The economic downturn of 2007-2008 brought companies opportunities to find new models of operation and at TDJ we believe that the current crisis will also allow firms to redefine their business and create new roles responding to the needs of the post-corona world. Therefore, flexibility will gain further allies due to the core philosophy of giving people choice as to how and where they work from. As for the bigpicture perspective, we should expect a decrease in transaction volumes due to the withdrawal of capital to more mature markets, which will impact the yields of office assets.
Virginie de Baere, managing director at MVGM in Poland
Accelerating transformation The current situation in the property market is very dynamic and it is difficult to forest any long-term effects of the pandemic. However, every crisis also has its positive consequences. In this case, it will be the digital transformation embraced by tenants and office building owners alike, which has accelerated rapidly in recent weeks. It is related to the biggest home office test in the history of the labor market, which entails the need for the implementation of technologies allowing for maintaining communication among employees and ensuring business continuity. Business processes and communication with clients need to be managed effectively. Such changes are also taking place in the property management business where access to platforms based on big data and giving companies an insight into a whole range of real-time data is the key. This is why organizations which have to date been shying away from modern technologies will need to increase their investment in innovation. This is no longer a question of so-called added value, but of surviving in the very competitive market in which one can expect turbulences and unexpected events in the future.
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Opinion TAXATION
modernity which, paying no taxes, is expected to help boost the budgetary income. This is pretty absurd as modernity has to be heavily supported financially in the first place. Who actually governs the financial legislation has become apparent quite recently as the new finance minister, who is not wont to speak in public, announced that he would deprive Polish citizens of cash, making everybody join cashless transactions and turnovers. In whose interest, namely? Clearly, the banks’. Right-wing commentators spared no mockery at this very important minister of ours, whom I sincerely thank for his sincerity. At least, we have no more illusion about what is called “the priorities of financial policy”.
In the service of great politics: making tax regulations ever more complex
The omnipresent and obsessive lobbying that has been functioning for years in our, if really ‘ours’, financial legislation is not exclusively subordinated to the business interests of potential or actual beneficiaries – though it works mainly to their benefit. BY WITOLD MODZELEWSKI
A
s is rather evident, the regulations adopted in this country as well as on the EU level have long now been serving, in the first place, the interest of what is called financial institutions. This beautiful, almost dignified name hides quite mundane activities, oftentimes on the verge of usury. After nothing for a long while, the IT business comes in second. Hence, the EU’s new
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secular religion called “digitization”. The third – still winning – position is firmly held by the tax business which seeks to make its clients flee from taxation. In resource-rich countries, particularly those equipped with crude oil or natural gas, it is the producers of such goods that actually govern the financial legislation (and not only). In Poland, we depreciate our natural resources, believing in mirages such as e-economy or obligatory
OBJECTIVE BEHIND LOBBYING Another, no less topical, example is the “sugar tax” (currently under implementation) which is due to extend, inter alia, to soft drinks manufactured by, I dread to think, US producers. As we can read in the press, a very-high-ranking public functionary – of ministerial rank, to be sure – took the trouble to travel to Warsaw in person to ‘negotiate’ the abolishment of the tax in the interest of the producers of some of the commonly-known beverages: very sweet and very American ones. We’ll soon see whether it turns into yet another humiliating story, like the Institute of National Remembrance (IPN) Act which we were supposed to amend in foreign interest. To my mind, there is a hidden but quite clear political objective behind business lobbying. The major players in the legislation market cannot be suspected of sympathizing with rightwing politicians who enjoy support from most of the Polish voters. How about the evidence? With no direct proof in place, there are strong premises. A random example is a Polish president having successfully been persuaded to deny his election promise regarding the devaluing of the mortgages denominated in Swiss francs. I wonder who was it that gave the head of the Polish state a diagnosis regarding ‘destabilization’, whatever that
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means, of the banking system should the law be adopted? Let me remind you that any restructuring law would mean compromised interests in the context of the European court of justice’s (ECJ) verdict in favor of complete devaluation against the same interest rate (LIBOR). And? … Was there any destabilization? The image losses are considerable for the Swissfranc-denominated-mortgage holders, forming a group of over a million, mostly young, people, most of whom voted for President Andrzej Duda in 2015. They do not seem to have forgotten the promises once made to them. VAT CHAOS There are other examples of lobbying in the tax legislation with a strong political tint, less known to public opinion. In 2019 summer, in the heat of mass-scale changes, two ticking time-bombs were planted in the value-added tax regulations. The new matrix of VAT rates has caused thorough chaos in the reduced VAT rates – 0%, 5%, and 8%. The other foundling consists of imposing upon all the VAT payers a new obligation to report to the tax office, on a monthly basis, a million pieces of information of no use to anyone within a records system expanded up to the limits of absurd. A pretext for these new duties is, declaratively, the ‘need’ to collect data in view of compiling VAT declaration forms. It is emphasized, in parallel, that this data is annihilated at the same time (yet another absurd!). Almost two million taxpayers for gathering and reporting such information: is there any sense to it at all? Well, the IT business has to make some money. The thing is unfeasible without new software put in place. For instance, every single pack of cigarettes sold has to be marked in the records with a dedicated numerical code. With 1,000 packs sold, the vendor has to repeat the action a thousand times. Are these duties only subordinated to the interests of ASPs? This is what most bookkeepers think, who spare no terse criticism for the ‘inventors’. [An application service provider (ASP) is a business providing
computer-based services to customers over a network, such as access to a particular software application, including customer relationship management, using a standard protocol, such as HTTP.] Is this all really a matter of typical “legislative investment”? Another answer readily comes to one’s mind. The ‘inventions’ in question are due to be put into effect as of April 1, 2020, on the run-up to the expected re-election of the current president. The authorship of these regulations is plausibly attributable to a few former officials in the finance ministry who had once made names for themselves as they informed on the top executives of the National Revenue Administration (KAS), accusing them, as the press releases had it, of participation in VAT swindling. The officials were fired blusteringly but their ideas are still with us and we have to face the challenge. There is a common conviction that these ideas are meant not only to fill up the pockets of the businesses which are to implement these ‘inventions’ (a queue has already been formed). Certainly yes, but no less significant is the annoyance of several million good business people, accountants, bookkeepers and accounting offices. For it is them who will have to swallow this bitter pill and they completely don’t understand why and what for. WHY IS MEDIA SILENT? Politics – great politics, to be sure – is most probably at stake here. The candidates opposing the ruling Law and Justice (PiS) party and their ally President Duda, do not have much chance to win without such support. It is worth noticing that the mass media that have normally condemned the nonsensicalities related to the imposition on the taxpayers of new checking obligations, now remain silent. Why is the Gazeta Wyborcza daily silent? Was it not one of its journalists that, imbued with concern about Polish small business, conceived once upon a time that the regulations of flat-rate (that is, simplified) income tax have ‘destroyed’ thousands of small businesses within a matter of hours? The other mainstream
media (which means, in my opinion, those supporting the liberals), otherwise writing volubly, on a daily basis, about taxes and burdening their readers with thousands of insignificant details, appear to be no less silent. They somehow miss details as obvious as the “new matrix of VAT rates” or VAT payers’ records expanded to the point of absurdity. The anti-PiS ideology puts at its service a Bolshevik-like logic according to which every single word, or even silence, has to contribute to dethroning the ruling party. So there is no room for something like symmetricity. One could wonder how those who have planted the ‘bombs’ will end up. If they find some cushy jobs for themselves in a liberal business, the hypotheses presented herein will be (re) confirmed.
Professor Witold Modzelewski, PhD Witold Modzelewski holds a professorship with the Faculty of Law and Administration, University of Warsaw, and is president of the Warsaw-based Instytut Studiów Podatkowych (Tax Studies Institute). From 1992-1996, he was the deputy finance minister in charge of the re-development of Poland’s fiscal law system. He has to his credit more than a thousand publications, mainly dealing with taxes and tax/fiscal law. Moreover, he is a tax consultant, legal counsel and a member of the National Development Council advising the Polish president.
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Opinion 1. Save money 2. Make money 3. Save time 4. Improve position in the industry 5. Connect with others (gain new experience) We believe that the first two will be dominating on the short term agenda. And therefore, we go through analyses with our customers about how their clients will demand products from them in the new situation and what will be key for driving sales or effective marketing to save money. Simultaneously, we discuss the long term plans and how we can use this moment as an opportunity to gain market share and build a loyal audience.
Effective marketing in times of crisis
During times of crisis, conflict and natural disaster, the media are critical in contributing objectively to the discussion over how to respond, and ensuring local communities have access to life-saving information, states UNESCO
W
e have been speaking to all our customers regularly during the crisis. Most go through the usual phases of crisis – shock, denial and anger, acceptance, actions for survival, planning for the new normal. In terms of marketing, of course, it depends on which industry, and also the size of the customers’ business or operations. But in general, the steps we have been recommending are: 1. Slow down exciting activities 2. Evaluate communication and adjust to the current situation 3. Be helpful, useful and inspiring (Think: build trust, credibility and make people’s lives easier) 4. Start analyzing what will drive demand when we exit the crisis 5. Plan communication and activities according to the best available knowledge (the outcome of analysis) In other words, don’t stop communicating, but adapt it during the length of the lockdown, and plan ahead for how to be relevant when we come out on the other side.
It has been proven by several companies after the last financial crisis and previous crises as well, that most of the winners are the ones that don’t stop marketing. Of course, for many companies right now survival might be the main aim. But for those who can market, this is an opportunity because a lot of habits and usual behaviors have changed and the companies that now understand how to build strong brand awareness and what to give to their clientele will be the ones gaining market share and the winners in the perspective of next 2-3 years. As a result, we operate with a set of five principles driving customer demands:
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The best way to invest is to build a relationship with your customers. One of the best ways to do this is to build your own media where you deliver to your clients’ needs and wants. Deliver this through information, not just product and services, enrich them, inspire them, lead and guide them. If you can do this right now, you will come out strong, because you will build a loyal group of followers, that values you. Your focused communication will not be for everyone, but you can create a base (a tribe) of ambassadors who will be happy to tell others about the values you deliver. Experience and data also show that providing a content marketing approach provides you with a Pareto situation, turning the followers counting for 20 percent into strong and dependable clients providing you with 80 percent of your business. The Pareto principle states that, for many events, roughly 80 percent of the effects come from 20 percent of the causes. A good example of a content marketing approach (of late) is from the American presidential campaign, where presidential hopeful and Democrat Joe Biden has launched his own newsletter and podcast, as he can’t meet his followers in person right now owing to social distancing rules. He can still be in constant contact and stay connected with the electorate. If the media can’t cover your campaign activities, well then be the media and bring your followers your information directly.
Morten Lindholm is the editor-in-chief and publisher of the WBJ. He advises companies on communication and marketing solutions. He has 25+ years of experience in marketing, sales and business management.
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Life + Style
Online fashion hunter
Online shopping is the norm, not only during the quarantine. It is worth supporting Polish brands during this time. Meet the jewels of the spring 2020 fashion “must-haves� that can be found in their online stores.
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Life+Style Deni Cler: Elegance with a hint of extravagance is a must look for a real girl boss.
HER FOR
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Magdalena Iwańska Fashion Creative Director
Creating fashion and lifestyle magazines in Valkea Media. Engaged in the biggest Polish fashion events, cooperating with and styling show-business celebrities.
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1. Lilou, necklace, 249 PLN
2. Ochnik, handbag, 450 PLN
3. Dr Irena Eris, cream, 185 PLN
4. Dr Irena Eris, mascara, 119 PLN
5. Dr Irena Eris, face blush, 139 PLN
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6. Bizuu, belt, 359 PLN 7. Deni Cler, glasses, 499 PLN 8. Deni Cler, shoes, 1499 PLN
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(All products and prices we found online at: lilou.pl, ochnik.com, sklep.drirenaeris.com, bizuu.com, denicler.eu)
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Life+Style
HIM FOR
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Giacomo Conti: Classic elegance enhanced by unobvious accessories is the quintessence of a modern gentleman.
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1. Tatuum Eau de Parfum, 99 PLN
2. Wรณlczanka cufflinks, 99 PLN 3. Bytom, jacket, 999 PLN/shirt, 249 PLN 4. Vistula belt, 79.90 PLN 5. Kazar shoes, 469 PLN
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(All products and prices we found online at: wolczanka.pl, tatuum.com, bytom.com.pl, vistula.pl, kazar.com) 74
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EVENTS
Warsaw Business Journal relives the most important recent business and industry events
upcoming events The Top Woman in Real Estate competition: May 21, 2020, Hilton Warsaw Hotel and Convention Centre The Top Woman in Real Estate project was created out of the need to promote women in the real estate and construction industry in Poland. This is a unique competition that promotes successful women in almost all areas of activity. The third edition of the competition started on January 22, 2020, and submission will last until April 15, 2020. The results of the competition will be announced during the gala that will be held on May 21, 2020, at the Hilton Warsaw Hotel and Convention Center.
THE MIT SLOAN MANAGEMENT REVIEW POLAND CONGRESS
www.topwoman.pl/
The MIT Sloan Management Review Poland Congress was held online on April 21-22 as a response to the current socio-economic situation in Poland. During virtual meetings with outstanding experts from the country and around the world, participants learned how to carry out digital transformation in crisis conditions and how new technologies can help companies survive this difficult time. The event was opened by Paweł Górecki, editor-in-chief of “MIT Sloan Management Review Polska” and Andrzej Jacaszek, VP of ICAN Institute. Dr Witold Jankowski, as the first prominent speaker, president of the ICAN Institute, explained that bold opening to new technologies and a new work culture could be the only recipe for overcoming the crisis. During the two-day event, experts from Poland and around the world participated and shared their knowledge, experience and valuable tips, as well as answered participants’ questions during the Q&A session. Among the invited guests were, among others, Professor George Westerman, an expert in new technologies at MIT Sloan Initiative on the Digital Economy, Hans van Grieken, EMEA Technology Research & Insights Leader at Deloitte, Professor Aleksandra Przegalińska, futurist and expert in the field of artificial intelligence (AI), and Professor Sergei Ikovenko, professor at MIT and Tufts University and practitioner in the field of TRIZ methodology. Other prominent people who also shared their insights include, among others, Peter Joosten, biohacker and founder of the SuperhumanTalks.com platform, Paweł Motyl, a leading European expert in leadership and personal efficiency, and Ingemar Jansson, responsible for the strategy of sustainable business development at Cybercom. During the convention, experts spoke about the most important technologies and methods of their implementation, which are crucial in times of crisis. They also focused on activities that a leader can take in response to the crisis, solutions that use AI to analyze data and make accurate decisions, and AI’s ability to fight coronavirus. Experts also took up the topic of Industry 4.0, cybersecurity and data protection, and also answered the question of why innovation should be in the center during the crisis. The invited speakers spoke directly about the crisis, the effort associated with the digital transformation, but everyone left an important message to the participants: where others see the threat, strong leaders see the opportunity. The MIT Sloan Management Review Polska ONLINE Congress proved to be a great success. Over 3,000 participants and 25 experts actively took part in it. The event was under the patronage of recognized companies that are leaders in their industries: Grant Thornton (strategic partner), ASTOR, Balluff, Cloudware, Fujitsu, Genesys, Platform of the Industry of the Future, Salesforce, Samsung, Sodexo, Webcom and T-Systems (technology partner).
Family businesses are the last mainstay of private capital in Poland! That is why the stakes are huge in the face of massive generational change of business. 30 years have passed since the political changes, in many companies, the family business is being handed over to the young generation. In many companies, the question is: “What next?” How to meet the responsibility of facing each business family? How to prepare a family business for new challenges in 2020? The owners of well-known family companies from Poland and abroad will answer these questions on June 22 and 23 during the VII International Family Business Congress in Poznań, western Poland. Speakers include renowned foreign entrepreneurs and experts such as Carl Elsener Jr (CEO of Victorinox AG) and Professor Alfredo de Massis from the Free University of Bolzano, as well as representatives of well-known Polish family companies. Registration for the Congress is ongoing.
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7th International Family Business Congress: June 22-23, 2020, IBB Andersia Hotel Poznań Centrum
www. kongresfirmrodzinnych.pl/en
Ogólnopolski Szczyt Energetyczny OSE GDAŃSK: July 2-3, 2020, Museum of the Second World War in Gdańsk The intention of OSE Gdańsk 2020 organizers is to gather the representatives of key institutions responsible for energy and economic security, politicians, economists and representatives of business and science in order to discuss the prospects for Polish economy with special focus on strategic sectors and risks resulting from the international situation and EU policy. The development and innovation – the key elements of competitive advantage – will again be addressed during specific panels on energy, gas, fuel and co-generation to compete for the award of “Innovation Waves” granted to the best project during the evening “Amber Award” Gala. Additionally, since last year we have dedicated one panel to the issue of cooperation among Baltic states in the field of energy, gas, oil, renewables and specific solutions implemented successfully in particular countries. www.osegdansk.pl
glov.co glov.official GlovPolska
What do your favorite restaurant, cosmetics store, florist or boutique all have in common? That’s right, they’re local! Promoting conscious shopping, at Koneser we’re proud to introduce some of the local producers, chefs, designers and entrepreneurs that make our center so special…
Say hi to Monika
Krassowska-Kaszuba, owner of the Zielona Łodyga florist.
Beginning her floral adventure seventeen years back, Monika’s search for her true path in life has transpired to be a huge success, a point reflected by the glories of her store. With its huge selection of potted flowers, turn the four corners of your home into a colorful, leafy jungle, or catch up with Monika to hear her tips of plant care. Find Zielona Łodyga in Koneser’s Butelkownia space, and don’t forget to support Monika’s business by placing an order direct on Facebook!
Meet Przemek
Płachetka, founder and head of Ferment Praski. Having dreamed for
years of owning his own restaurant, Przemek left the corporate rat race to launch Ferment Praski, a restaurant where local products and Polish cuisine find themselves prepared using international techniques. Casual and convivial, the restaurant quickly became a favorite meeting spot for families and friends, reflecting the passion invested in the place by Przemek and his team. Delivering to your home or workplace, discover the modern taste of Praga and order on 22 210 42 01 or 785 873 84, or visit in person to pick-up your take-out!
Kasia Kucha, the force behind Triki Tashka, has a background rooted in culture and art, and her experience and creativity have served to make a Triki Tashka a glorious concept brimming with literature, theater, art and the energizing aroma of bio coffee and chocolate. Simultaneously functioning as a cultural zone and meeting point, here you can learn the basics of beatboxing, make your own macramé, taste delicious food without unnecessary sugars and chemicals and enjoy interiors filled with artwork and furniture with soul. Find it inside the Koneser’s Butelkownia space, or lend your support by shopping at: tashka.pl.
Find more local producers at koneser.eu
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ONLINE PLATFORM
30 BRANDS
600 CAR MODELS
Stay at home and … rent a car! ONLINE PLATFORMS offering car rental are the future. This is how Carsmile startup – the first such platform in Poland – works. But this is not only a simplification of many formalities but also a complete service and great promotions for many different cars. The principle of the Carsmile platform is very simple. On the company’s website, we specify the segment and budget of cars that are interesting. After choosing a specific model, clients can specify additional parameters. Carsmile gives many opportunities to their clients, such as allowing them to include several options in the monthly installments for free. At the moment, for renting a new Nissan Juke from us for 36 months, without a down payment, you have to pay PLN 1,220 net per month (includes services and two sets of tires). When you add insurance, the installment will increase by 199, and after adding assistance, by another 17! In Carsmile, almost everything is done without leaving home. More and more goods and services are being ordered online, so why not rent cars this way? In addition, the offer is much larger than at a car dealer’s because even those multi-brand shops offer only models from two or three manufacturers. In Carsmile, you will find cars from A (Alfa Romeo) to V (Volvo). We accept applications submitted online and we give our decisions the same way. The company verifies all documents without the need for a personal visit. Importantly, the decision is almost immediate. After signing the contract, the car is delivered to the stipulated address or nearest salon.
Prices starts from: Audi A3 - 966 pln BMW X1 - 1,437 pln Ford Focus - 886 pln Jaguar E-Pace - 1,448 pln Opel Corsa - 597 pln Volkswagen Golf - 926 pln Mercedes-Benz A-Class - 1,240 pln Lexus NX - 1,277 pln Land Rover Discovery Sport - 1,689 pln Other models available on Carsmile.pl "Calculation based on Carsmile.pl, rent for business per month, default pricing net calculated 30.03.2020"
W W W. C A R S M I L E . P L
LAST WORD
HAVING PUT THE FIRST ISSUE OF 2020 TO BED, within a span of less than a dozen hours, I solemnly decided (with alacrity, though) that in the second issue I would ramble on about commuting. Considering my nearly 50-minute one-way travel – my longest ever – on a good workday including 2-3 changes and a few-hundred-yard walk, sharing my conundrum through this column seemed like the most natural thing to do at the beginning of March. On a side note, in an effort to minimize travel time, my ‘walk’ often resembles a mad dash to passersby. Moving ahead with my decision, I requested the art director to take photos of me flitting between buses or suburban trains. To flesh my piece out, I found that an average American commute grew to just over 27 minutes one way in 2018, a record high, according to data released in September by the US Census Bureau. And across the pond in the UK, getting to and from work every day took a minute shy of an hour, or slightly below 30 minutes one way, according to an analysis published in November by TUC, a UK-based trade union body. All was going according to plan. Meanwhile, like always during my commutes, I tried to keep abreast of the news and entertain myself by using my mobile phone as an extension, save for the times when I would break into a sprint. Right up until around March 11, when Poland went into lockdown owing to the outbreak of the coronavirus disease. At the time of writing, my team and I have already worked from home for over six weeks. As a result, the line between my work and life has been unceremoniously obliterated even as my work-life balance has been catapulted out of the window of my balcony-less sun-dappled flat in western Warsaw. Poland-wide (and global) restrictions, some of them draconian, have meant that I’m self-isolating in the purest form. Notwithstanding that I believe my friendly neighbors wouldn’t snitch on me, I have been eschewing stepping out for fear of being fined by bobbies on the beat. It isn’t unheard of, I have been cautioned. If that weren’t bad enough, as recently as mid-April, I was queuing up to buy groceries from supermarkets. Over an hour almost every time. Yes. I had never queued up to get groceries before. To beat the lines, I chose to do my shopping around midnight. Also a first. Recently, a 30-minute wait on a nippy spring night proved to be a mere bagatelle while I kicked my heels and twiddled my thumbs – I had to keep myself busy somehow. I had only one complaint. The mandatory (in public) face mask irritated the skin behind my ears and made me feel the lack of oxygen. As governments are loosening their lockdowns and economies are opening up, I’m quite upbeat and certain that I won’t see pink elephants before this torpor fades away, albeit not imperceptibly. However, considering these dreaded times that have proved fatal for nearly 200,000 people worldwide already and counting, I wonder whether I’ll commute to work with a spring in my step while spring is still in full bloom - SD
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MAY 2020 W B J
PHOTOGRAPHS BY SANKHYAYAN DATTA
Spring in my step: commuting in calamitous quarantine