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Environmental protection and the “criminal liability” of legal persons
Entrepreneurs seem to be increasingly aware of the importance and scope
of regulations related to the environmental protection. This awareness
is often limited to the Environmental Protection Act, the Act on Waste
and several other acts, while other related regulations remain unknown
to the general public. An example of such a regulation can be the Act
on the Liability of Collective Entities for Prohibited Acts of 28
October 2002 (Journal of Laws No. 197 of 2002, item 1661 as amended,
hereinafter the “Act”), often referred to as the “act on the penal
liability of legal persons“.
The purpose of the Act is to make it possible to take legal measures
against companies and other legal persons making specific gains on
offences committed by persons acting on their behalf or in their
interest. This relates to benefits from offences against the
environment.
Whose actions is a company liable for?
A company is liable for the actions and omissions of:
- persons acting on its behalf or in its interest, authorised or
obliged to represent the company, to make decisions on its behalf, to
carry out internal inspections, or in the case of exceeding their
authority and/or failing to perform their obligations,
- persons allowed to act as a result of the exceeded authority and/or failure to comply with obligations as mentioned above,
- persons acting on behalf or in the interest of a company with the consent or knowledge of the above-mentioned persons.
In other words, liability under the Act can result both from actions of
persons holding certain posts on a company's bodies (both acting under
the authority granted to them and in the case of its abuse), and from
actions of a company’s proxies, subcontractors, etc.
What actions is a company liable for?
A company is liable under the Act for the above persons’ actions if:
- the actions constitute an offence stipulated by the Act (including
offences against the environment defined in the Penal Code, regulations
concerning hazardous substances and on international waste management),
- the actions have been confirmed by a final verdict of a criminal
court, a judgment conditionally suspending criminal proceedings or a
decision allowing voluntary submission to punishment by a person guilty
of an offence.
The following are examples of offences against the environment defined in the Penal Code:
- substantial damage to flora or fauna,
- damage or injury to legally protected plants and animals,
- substantial pollution of water, soil or air, posing a threat to people, plants or animals.
It should be noted that petty offences defined under the Environmental
Protection Act, under the Act on Waste and other acts fall outside the
scope of the Act, as they do not constitute an offence within the
meaning of criminal law.
Are there any situations when a company’s liability is excluded?
Yes, there are. The liability of a company under the Act is excluded,
if persons for whom the company is liable were chosen with due
diligence and were duly supervised. In other words, a company is exempt
from liability if it proves for instance that:
- there are procedures to verify persons entrusted with posts on the
company’s bodies, or with the performance of certain actions, - there
are procedures to execute due control over such people.
What sanctions can be applied under the Act?
The fundamental sanction imposed on a company in circumstances giving
rise to liability under the Act is a fine of up to PLN 20 million
(however, not more than 10% of annual revenue).
Furthermore, the following additional sanctions can be imposed on a company:
- ban on promotion and advertisement,
- ban on the use of public assistance, subsidies and grants,
- ban on applying for public orders,
- announcing the judgment to the general public.
In extreme situations certain types of business activities a company
can be barred from carrying on certain business activities.
When passing a judgment on liability under the Act, a court orders the
forfeit of benefits obtained by the company as a result of an offence
committed by a natural person (even in the case of indirect benefits).
Sanctions imposed under the Act do not preclude the possibility of
prosecuting a claim against a company on general terms and conditions
to redress damage to the environment.
What are the practical implications of the Act?
Despite the fact that the Act has been in force since 2003, its
practical implications have been limited so far. This could change, as
on 30 April 2007 the Act on Prevention and Rectification of
Environmental Damage came into force. This act will facilitate
investigations related to liability for damage to the environment, and
at the same time investigations regarding the penal responsibility of
natural persons whose actions or omissions resulted in damage to the
environment. In consequence it will pave the way for the investigation
of legal persons’ liability in accordance with the Act.
Finally, it should be kept in mind that the risk of liability under the
Act, even if no judgment declaring has been passed, could have
significant economic consequences for specific businesses. The very
fact of criminal proceedings being conducted against e.g. the members
of a company's body or its representatives in relation to damage to the
environment can necessitate the creation of provisions for potential
fines in accordance with the Act. This, in turn, automatically brings
less favourable financial results for the given entity.
PUBLISHED LEGAL ACTS:
Amendment to the Act on Environmental Protection Law
An amendment of the Act on Environmental Protection Law of 27 April
2001 was published in the Journal of Laws No. 88 of 2007 under item 587
(uniform text in the Journal of Laws of 2006 No. 129, item 902, as
amended). Attention should be paid in particular to issues relating to
a change of regulations covering procedures for the environmental
impact assessment (hereinafter: ”EIA”).
Changes in EIA procedures
The most significant new developments in the EIA procedure include:
- extension of the validity of decisions on “environmental conditions”
to four years (these decisions used to remain in force for two years),
- setting deadlines for specific stages of the EIA procedure, so that
the decision on environmental conditions is issued within 100 days (the
deadlines, however, serve as an instruction only and can be extended),
- expanding the list of decisions that must be preceded by a decision
on environmental conditions, among others, by decisions related to the
definition of conditions for land remediation as part of an undertaking
affecting areas included in the Nature 2000 programme,
- obliging investors applying for decision on environmental conditions
to provide cadastral maps with marked boundaries of the investment and
neighbouring plots of land (previously the investor defined the
geographic reach of its operations’ prospective influence on the
environment),
- limiting the obligation to perform an analysis of a given project’s
influence on national heritage monuments only to group I undertakings,
consisting in road construction (for which a report on environmental
impact is mandatory).
New register
In relation to the establishment of a European system for gathering
information on the release of pollutants, the amendment introduced a
new register – the National Pollutant Release and Transfer Register
(hereinafter the “National Register”), constituting a part of the
European register, developed under EC regulation No. 166/2006 of the
European Parliament and Council of 18 January 2006 on the creation of a
European Pollutant Release and Transfer Register (Journal of Laws EU L
33 of 4 February 2006; hereinafter “Regulation 166/2006”).
The National Register will cover entities administering the largest
installations, mainly the ones requiring Integrated Pollution
Prevention and Control (installation types are defined in Annex I to
Regulation 166/2006). The above-mentioned entities shall provide
information on the release of a specific substance into the air in
amounts exceeding limits defined in Annex II to Regulation 166/2006 to
the Voivodeship Inspector for Environmental Protection (Wojewódzki
Inspektor Ochrony Środowiska) by 31 March each year.
Should the above-defined obligation to provide information not be met,
the Voivodeship Inspector for Environmental Protection will be entitled
to punish the entity with a fine of PLN 10,000 by way of an
administrative decision. The first deadline for submitting the above
report is 31 March 2008.
Act on liability for environmental damage
We would like to remind you that on 30 April 2007 the Act on Prevention
and Rectification of Environmental Damage came into force (Journal of
Laws No. 75 of 2007, item 493). Information on the new regulation was
provided in the previous issue of our Bulletin. The final form of the
act differs slightly from the propositions of the discussed bill. One
change is of particular importance, as it means that regulations
existing prior to the introduction of the act apply to any
environmental damage caused before 30 April 2007 and damage that arose
from activities completed prior to 30 April 2007 (in accordance with
the bill the existing regulations were to apply only to damage to the
soil that occurred before 30 April 2007).
Public assistance in the scope of environmental protection
On 1 May 2007, the regulation of the Council of Ministers of 26 April
2007 amending the regulation on the assistance programme in the scope
of regional public aid for selected environmental protection
investments (Journal of Laws 76 of 2007, item 503) came into force. The
amendment to the regulation expands the list of environmental
protection undertakings that may receive state aid. New investments
covered by the regulation include:
- investments related to biofuels and biomass,
- construction of wind power plants and power engineering
infrastructure related to the connection of wind power plants to the
power grid,
- degassing of landfill sites and construction of waste energy recovery installations,
- investments aimed at reducing the amount of biodegradable waste stocked in landfill sites,
- investments related to hazardous waste dumps,
- investments aimed at recycling vehicles withdrawn from service,
- energy-saving investments,
- investments in water mains networks,
- investments in measurement equipment used in environmental protection,
- investments to reduce the emission of volatile organic compounds (VOCs),
- some investments in the fuel distribution and storage sector.
Restricted hazardous substances in electric and electronic equipment
A new regulation of the Minister of the Economy of 27 March 2007 on the
specific requirements limiting the use of certain substances with
potentially negative influence on the environment in electric and
electronic equipment (Journal of Laws No. 69 of 2007, item 457) came
into force on 3 May 2007.
According to the above regulation it is forbidden to use following
substances in electric and electronic equipment: lead, mercury,
cadmium, hexavalent chromium, PBB and PBDE. Under the regulation the
limitation does not apply to spare parts for electric and electronic
equipment introduced to trade prior to 1 July 2006. The regulation also
defines the allowed uses of the above substances in exceptional
circumstances.
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Drinking water – new requirements
On 6 April 2007 a new regulation of the Minister of Health on the
quality of drinking water for human consumption came into force
(Journal of Laws No. 61 of 2007, item 417).
New reports forms
On 29 March 2007 a new regulation of the Minister of the Environment of
2 March 2007 came into force, defining the form of province reports
containing information on the scope of using the environment and on the
method of its presentation (Journal of Laws No. 45, item 294).
OVERVIEW OF LEGISLATIVE PROJECTS:
Bill on the National Environmental Protection Agency
On 29 March 2007 the Minister of the Environment published a bill on
the National Environmental Protection Agency. The new regulation will
introduce significant institutional changes in relation to
environmental protection. In accordance with the bill's justification,
they are aimed at increasing the efficiency of control and information
tasks, as well as at the optimization of operating costs of the entire
financing system (by allowing additional sources of financing apart
from the state budget).
New Agency
The base of the Bill is the establishment of a new unit called the
National Environmental Protection Agency (hereinafter the “Agency”),
acting as a state-controlled legal person, functioning on the basis of
the existing human resources and property of the current environmental
protection services:
- Chief Inspectorate for Environmental Protection and the Voivodeship Inspector for Environmental Protection,
- the office of the Chemical Substances Inspector,
- the office of the National Emission Allowances Trade Scheme Administrator,
- Environmental Information Centre.
As of the date of the new act becoming effective (proposed date: 1
January 2008), the Agency shall take over any tasks, documentation as
well as employees of the above-mentioned entities.
The Agency is to be managed by its president, appointed by the Prime
Minister as requested by the minister responsible for environmental
issues. The term of office of the president will be five years.
The Agency’s territorial structure will differ from the current model
of territorial division of state administration bodies by provinces.
The Agency is to act on the basis of seven environmental and industrial
regions, managed by their respective regional offices.
The Agency’s main tasks
First of all, the Agency will take over tasks currently carried out by
the liquidated entities. As a result, the Agency’s responsibilities
will cover a wide range of activities in the area of inspection and
control, prevention, environment monitoring and predictive analysis.
Furthermore, according to the bill the Agency is to take over from the
Ministry of the Environment a number of tasks related to gathering and
processing data, in particular those required to comply with the
European legal requirements. The Agency is also to be authorized to
prepare reports on environmental issues for the European Commission and
for international organizations.
National Repository
Among the new developments introduced by the discussed bill is the
establishment of the National Repository of Data on the State and
Protection of the Environment. This will be an IT system gathering e.g.
information on the state of the environment and on the utilization of
the environment, as well as the results of inspections of entities
using the environment. In accordance with the bill, data kept by the
Agency in the National Repository shall constitute the only official
source of information on environmental protection. This should lead to
the greater uniformity and better organization of this information.
Categories of environment users
According to the bill, control over the most burdensome users of the
environment is to be increased. This is reflected in the bill by the
introduction of a special classification to the Environmental
Protection Law:
- Category A environment users, covering entities administering
installations with a significant impact on the environment (including
installations that require Integrated Pollution Prevention and
Control),
- Category B environment users, covering entities administering
installations with a limited impact on the environment that require
suitable permits to use the environment,
- Category C environment users, covering entities administering installations that require reporting only.
The above division will be reflected in the registers of environment
users, prepared at the poviat (powiat) level by specific starost
(starosta) and on the national level by the Agency. It is worth noting
that the above inspection and control actions performed by the Agency
will cover entities falling into category A and B.
Please note that the Ministry of the Environment is still working on
the bill and in consequence it is difficult to predict the final
wording of the act, as well as the date of its adoption.
Bill on amending the Act on Waste Electric and Electronic Equipment
The Ministry of the Environment prepared a bill to amend the Act on
Waste Electric and Electronic equipment of 29 July 2005 (Journal of
Laws No. 180 of 2005, item 1495 as amended).
The most important change consists of the imposition of required levels
for the collection of used equipment from households (currently the
required levels are defined for the recovery and recycling of used
equipment). The required collection levels vary depending on the
category of a specific piece of equipment. The legislator assumes that
the required collection levels will come into force on 1 January 2008,
to be raised in 2010 and then again in 2014.
The authors of the bill suggest a change in the act’s scope of
application. This results in particular from a change in the definition
of the entity “introducing the equipment” and the definition of
“introducing to trade”.
The planned amendment is based on the assumption that etrepreneurs will
be additionally obliged to mark equipment they introduce to trade. The
marking should explicitly identify the entity introducing the equipment
and the date of its introduction to trade.
The amendment also introduces a number of significant changes aiming to
simplify some of the obligations imposed on entities covered by the
act. This relates in particular to limiting the number of reports
presented by business entities (now the reports are presented
quarterly; in the future they are to be prepared annually) and of the
number of certificates related to the management of used equipment. A
change that might prove important for business entities is that an
explicit statement is to be added causing agreements concluded by
entities introducing the equipment with recovery organizations to
result in the transfer of the obligations imposed by the act onto the
recovery organization.
The amendment bill is also aimed at providing more detailed provisions
regarding items still open to doubt. This regards in particular issues
such as the classification of specific equipment, the introduction of
equipment for own use, the date of the introduction of equipment to
trade, and a definition of the weight of the introduced equipment.
Bill on amending the Act on Recycling of Vehicles Withdrawn from Service
On 28 March 2007 a Private Members’ bill to amend the Act on the
Recycling of Vehicles Withdrawn from Service 20 January 2005 was
submitted (Journal of Laws No. 25 of 2005, item 202 as amended).
The amendment bill is aimed at relaxing the existing stringent
provisions under which entities introducing vehicles to trade are
obliged to organize collection networks for vehicles withdrawn from
service covering the entire country. Under existing legal conditions,
if this obligation is not fulfilled in every respect, the entity
introducing the vehicles is to pay a high fee, the level of which
depends on the number of introduced vehicles.
Should the amendment bill come into force, the organization of a
network covering 95% of the area of the country shall be considered to
constitute the fulfilment of the statutory obligation to organize a
network. Should the created vehicle collection network cover a smaller
part of the country, the related fee will be reduced proportionally to
the actual coverage of the network.
The bill reflects the demands of car manufacturers and importers, who
consider the act on vehicle recycling in its current wording to be
unfeasible both in practical and economical terms.
It is worth noting that the new method of calculating the fee related
to the lack of a network is to binding retroactively, from 1 January
2006.
Bill on the establishment of the National Water Management Board
On 15 May 2007 the Minster of the Environment published a bill on the
establishment of a National Water Management Board (Państwowy Zarząd
Gospodarki Wodnej). Under the bill the “Polish Water” (“Wody Polskie”)
National Water Management Board (hereinafter the “NWMB”) is to
constitute a new state-controlled legal person. The NWMB shall be based
on the property and human resources of the current water management
authorities:
- the Water Management Board and Regional Water Management Offices,
- Voivodeship Boards for Irrigation and Water Systems Boards.
The bill's main aim is to ensure greater organizational and financial
efficiency in the scope of public tasks related to water management.
In accordance with the bill and regulations pertaining to the NWMB, a
number of changes are to be introduced to existing acts. When the bill
comes into force, a new fee shall be introduced (to be called a
“retention fee”). The authors of the bill plan to impose it on entities
owning land with decreased retention capabilities or causing such a
decrease. The level of the fee is to be proportional to the ratio of
precipitation water flow volume.
Income from the retention fee is to be included in the NWMB’s revenue.
OTHER INFORMATION:
Decision of the European Commission on the National Allowances Allocation Plan for 2008 - 2012
On 26 March 2007 the Commission issued a decision regarding the Polish
allocation plan of allowances for emission of greenhouse gases for the
years 2008 – 2012.
The Commission questioned the conformity of the Polish authorities’
method of allocating greenhouse gas allowances proposed by the Polish
authorities with the criteria constituting Annex III to directive
2003/87/EC of the European Parliament and Council establishing a scheme
for greenhouse gas emission allowance trading within the Community. The
most significant fact is that the Commission requested a decrease in
the total planned number of allowances for greenhouse gas emissions by
more than 76 million tons.
According to information provided by the Court of Justice of the
European Communities, the Republic of Poland filed a complaint against
the Commission’s decision with the Court of First Instance.
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