The government is planning a comprehensive reform of the regulations concerning the issuance of environmental decisions, which may significantly affect the process of preparing investments in Poland. The draft amendment provides, inter alia, for a change in the competence of authorities and the introduction of strict financial penalties. However, the proposal to radically increase the fee for issuing a decision – from the current PLN 205 to as much as PLN 30,000 – raises the greatest concerns.
The amendment to the Act on Providing Information on the Environment and its Protection, Public Participation in Environmental Protection and Environmental Impact Assessments (the “Act”), as well as certain other acts (the “Amendment”), is currently at the stage of legislative work of the Council of Ministers. In April this year, a new version of the draft Amendment was published. The Amendment mainly concerns the procedure for issuing decisions on environmental conditions (the “Environmental Decision”). The changes concern, inter alia, the amount of the fee for issuing the Environmental Decision, the transfer of proceedings from commune offices to poviat authorities, and the introduction of financial penalties for carrying out investments without first obtaining the Environmental Decision.
The Amendment covers a wide range of changes; therefore, in this article we will focus on those that are of key importance from the perspective of investors. This publication begins a series of articles in which we will present further solutions proposed in the Amendment.
Change in the authority’s competences: the starost will take over the mayor’s duties
The government proposes that the authority competent to issue the Environmental Decision, instead of the head of commune (wójt), mayor (burmistrz) or city president (prezydent), should in most cases be the starost (starosta). According to the author of the bill, this is dictated by the need for proceedings to be taken over by local government authorities with a wider territorial scope and a higher degree of specialization, which is intended to improve supervision over the implementation of investments important for a given region, as well as to eliminate situations in which the Environmental Decision is issued for the benefit of a commune (as an investor) by its own commune head/mayor/city president.
Fee for issuing the Environmental Decision: up to PLN 30,000
Currently, the fee for issuing the Environmental Decision amounts to PLN 205. According to the author of the bill, proceedings for issuing the Environmental Decision are complex, lengthy and require specialist knowledge; therefore, a fee of PLN 205 is disproportionate both to the level of involvement of the authorities and to the amount of funds that investors may spend in connection with the implementation of planned investments.
Therefore, the government proposes to increase the fee for issuing the Environmental Decision. The exact amount of the fee for a given type of project will be specified in a regulation of the minister competent for climate matters, but it could not exceed the limit of PLN 30,000.
However, in a situation in which an application for the Environmental Decision covers several types of projects, the investor will pay the fee only for the project with the highest rate.
On the other hand, the fee for amending the Environmental Decision will amount to 50% of the fee that would be required in the case of submitting an application for issuing the Environmental Decision for that project.
Carrying out an investment without the Environmental Decision? A penalty of up to PLN 10 million!
Currently, the provisions of the Act do not provide for financial penalties for, inter alia:
- carrying out an investment without obtaining the Environmental Decision or undertaking actions based on a non-final the Environmental Decision, or
- conducting works despite the issuance by an administrative court of a ruling to suspend the execution of the Environmental Decision.
According to the Amendment, such violations will be subject to a financial penalty ranging from PLN 100,000 to PLN 10,000,000.
Final and transitional provisions
It is assumed that proceedings conducted under the Act that were initiated and not completed before the entry into force of the Amendment will be conducted on the basis of the existing provisions, although several exceptions have been provided for in this respect. For this reason, investors who would like to obtain the Environmental Decision under the existing provisions (and thus pay a lower fee for issuance of the Environmental Decision) have time to submit an application until the Amendment enters into force.
Summary
The planned Amendment significantly changes the rules for issuance of the Environmental Decision, affecting the process of preparing investments. It provides, inter alia, for the transfer of competences from commune authorities to starosts, which is intended to increase the professionalization of proceedings and reduce the risk of conflicts of interest. Of key importance is the proposal to significantly increase the fee for issuing the Environmental Decision – from PLN 205 to a maximum of PLN 30,000 – as well as the introduction of high financial penalties, reaching up to PLN 10 million, for, inter alia, carrying out investments without obtaining the Environmental Decision. The changes are intended to improve supervision over investments, but at the same time they mean greater burdens and regulatory risks for investors. Due to the early stage of legislative work on the Amendment, it is crucial to monitor changes on an ongoing basis, as the final shape of the provisions may still change.