Further amendments to the Water Law | In Principle

The new Water Law entered into force on 1 January 2018. Since then, the law has been amended several times, and one such amendment has just come into force. Some provisions of the act concerning water permits have been changed as of 20 September 2018. The system of fees for water services has also been slightly modified. Moreover, several dozen changes have clarified these regulations.

The Parliament decided to dispel doubts that arose in the first months of implementation of the new regulations. One of them is the competence of the Polish Waters state enterprise in terms of agreeing on the content of decisions regarding the determination of public projects and the Environmental Protection Inspectorate authorities in terms of imposing increased fees. It was also pointed out that not only sewage, but also rainwater and melt water cannot be discharged into groundwater. If these waters contain substances harmful to the aquatic environment as defined in the relevant regulation, they may not be introduced into water facilities, and the same applies to sewage. The Parliament has also introduced the authorisation to issue a regulation on the form and layout of the measurements of the quantity of abstracted water results as well as the quantity and quality of the sewage introduced into waters or into the ground.

The amending act has also changed the regulations concerning the management of State Treasury real estate. One of the most important changes is the extension of the catalogue of situations in which such property may be disposed of without a call for tenders procedure. The new regulations regarding fees for water services and issuance of water permits will be the most important for businesses.

Fees for water services

The new Water Law has introduced a completely new system of fees for water services. Up to the end of 2017, businesses calculated their own fees for water intake and wastewater discharge into water or land. These fees were a part of the system of fees for exploiting the environment, like the fees for gas and dust emissions, waste storage, etc. Now these fees have been excluded from that system and form an element of the new solution introduced by the new Water Law, known as water service fees. The fee amount is now determined by Polish Waters. However, the new Water Law did not specify a minimum fee threshold, which meant that public officers were obliged to calculate and measure even very small fees. With this in mind, the Parliament has decided to introduce a rule that these fees do not have to be paid if the amount does not exceed PLN 20. In such situations, the public officers will also not have to prepare and provide the business with information on these fees. As per the draft act, this threshold has been set taking into account the cost of sending correspondence and generating information. This regulation will apply to fees for water services as of 2019.

The changes also apply to businesses collecting water to be used at hydroelectric power plants. These businesses will be exempt from the obligation to pay a fixed fee, but will only pay a variable fee, the amount of which will depend on the amount of electricity produced by the hydroelectric power plant and the amount of process water collected back not intended directly for the production of electricity.

However, the rules for paying for water services in the so-called transitional period are the most important for businesses. The obligation introduced in the new Water Law to use measuring devices, funded by Polish Waters, enters into force on 31 December 2020. Until then, the amount of the variable fee is determined under special rules based on:

• The purpose and scope of water use specified in the water permit or integrated permit
• Measurements made by the administrative bodies as part of water management control or findings from reviews of water permits
• Measurements made by the administrative bodies as part of integrated permit controls.

Due to doubts in interpretation of this regulation, its generality and lack of required precision, as well as practical difficulties raised numerous times, the Parliament has decided to amend the act by indicating that the determination of a fee for water services in the transitional period will also take place on the basis of:

• Readings from measuring devices made during water management inspections
• Statements of entities obliged to pay fees for water services, for specific quarters.

These declarations are to be submitted to Polish Waters, or in the case of a fee for reduction of natural land retention, to the appropriate commune head or mayor, within 30 days after the end of the quarter. The first declarations will have to be submitted by businesses for the last quarter of 2018, and the deadline for submission is the end of January 2019.

Businesses may have considerable difficulties completing this declaration correctly. During the transitional period, they will bear the burden of presenting the necessary data for correct calculation of the fee.

Water permits

The Parliament has also introduced some important changes in the regulations related to the issuance of water permits. First, the basic period of validity of water permits is extended from 20 to 30 years. It should be stressed, however, that the periods for which individual permits may be issued have not changed. A water permit for discharge of sewage into water or land will still be valid for a maximum of 10 years, while a permit for discharge of water containing substances particularly harmful to the aquatic environment into water or sewerage systems owned by other industrial sewage entities will still be valid for only 4 years.

Second, it was pointed out that if a given project includes activities requiring both obtaining a water permit and filing a water law notification, applications for water permits will be examined within one procedure ending with the issuance of a water permit. This change will streamline and accelerate the process of issuing development permits.

Another change that has been introduced is the exemption from the obligation to obtain a water permit or to submit a water law notification for a period up to 180 days while locating temporary buildings in flood risk zones. According to the draft, the purpose of this regulation is to enable the location of seasonal facilities used for tourist purposes in these areas. It has been pointed out that these facilities, due to their temporary nature, do not have a significant impact on the performance of tasks related to flood protection.

The amendment has also changed the competence of Polish Waters in relation to the issue of water law assessments. Until now, these assessments could be issued both by directors of regional water management boards of Polish Waters and directors of the management board of Polish Waters catchment areas. The competence of the body depended on the type of project—to be more precise, where the bodies were competent to issue a water permit for the implementation of a project. The amending act transferred all competence regarding water law assessments to the directors of regional water management boards of Polish Waters. This solution is used to streamline the procedure for obtaining such assessments.

Assumption or transfer of a water permit?

Undoubtedly, the addition of Art. 411a to the Water Law, concerning the transfer of water permits, is controversial. According to this regulation, a request may be submitted to the competent body of Polish Waters to issue a decision on the transfer of rights and obligations under a water permit. To obtain such decision, the interested party must submit a declaration of acceptance of all permit conditions and attach the consent of the addressee of the permit. The decision in this respect is constitutive in nature, meaning that the rights and obligations under the water permit will be transferred to the concerned entity only when the transfer decision becomes final.

However, the indicated doubts do not concern the wording of the provision itself, but how it relates to the existing Art. 411 of the act, which has not been modified in any way by the amendment. According to this regulation, the legal successor of a plant which has obtained a water permit assumes the rights and obligations under the permit. In such a case, the passage of rights and obligations takes place automatically, without the need to obtain an administrative decision. Although the legal successor of the plant is obliged to request the authorities to confirm the passage of rights and obligations, the decision in this respect is issued subsequently and only confirms the occurrence of the passage of rights and obligations. Therefore, the question arises whether it is appropriate to introduce a procedure for the transfer of water permits, since in the case of legal succession the rights resulting from them are transferred by operation of law.

The answer to the question of the purpose of introducing Art. 411a to the Water Law cannot be found in the justification of the draft act. This provision was included in the amending act only after the second reading of the act in the Parliament. According to the minutes from the session of the Maritime Economy and Inland Navigation Committee, the rationale for introducing it raised doubts among the experts at the Sejm’s Bureau of Research. Representatives of the ministry indicated that “the draft Art. 411a refers to situations in which entities want to transfer a water permit on the basis of an agreement.”

Taking into account this explanation, it seems that in accordance with the intention of the drafters:

• Art. 411 of the Water Law will apply to situations where the legal successor of the plant has the same legal title to the plant as the addressee of the permit.

Example: Company A, the owner of a property, obtained a water permit for water services defined as the discharge of wastewater into the land. Subsequently, Company A sold its real estate to Company B, which also intends to discharge sewage into the land. Since Company B is the legal successor of Company A, the rights and obligations attached to the water permit were automatically transferred to Company B when the ownership of the property was transferred.

• Art. 411a of the Water Law will apply in cases where an entity which is not the addressee of the permit will use the plant on the basis of a different legal title than the addressee of the permit. In such situations, it may turn out that the addressee will not be the legal successor of the addressee of the permit, and therefore the automatic transfer of rights and obligations will not apply.

Example: The owner of a property, Anna Nowak, obtained a water permit for water services defined as groundwater intake. Then she concluded a lease agreement with Jan Kowalski. To exercise the rights and obligations under the water permit, Kowalski should apply for a decision transferring the rights and obligations from the permit, pursuant to Art. 411a(1) of the Water Law. Only after the transfer decision becomes final can Kowalski legally collect the groundwater.

In practice, the distinction between these situations may give rise to considerable doubts, particularly in light of Art. 189 of the Environmental Protection Law, which also regulates the issue of transfer of rights and obligations from permits in the event of a change of the operator of the installation. This will particularly concern issues related to the change of the entity operating the installation requiring an integrated permit covering water intake or discharge of sewage into water or land.

Thus, entities interested in using the rights and obligations under water permits issued to other entities should strive with great caution to determine whether and to what extent the rights and obligations will be automatically transferred to them, or require transfer under the new Art. 411a of the act. These entities should also bear in mind that there is a possibility of imposing severe sanctions for the use of water services without a required permit. A mistaken belief in automatic transfer of rights will in fact result in operation without a proper permit.

The amendment will not solve all the problems

The changes introduced by the amendment certainly do not resolve all doubts that have arisen from the implementation of the new Water Law. The scope of the statutory pre-emption of the State Treasury with respect to land under inland standing waterways will still remain a problematic issue. Both the Minister of the Environment and the Minister of Maritime Economy and Inland Navigation have issued interpretations of these regulations, indicating that the right of pre-emption:

• Concerns land under inland standing waterways marked with the symbol Ws in the land and building register
• Also refers to land on which waters are located in depressions formed as a result of human activity, other than ponds, which include, among other things, lakes without an outlet, natural ponds, natural ponds not used for breeding or recreation purposes, and areas where water has naturally accumulated as a result of human activity, such as areas of gravel pits and excavations
• Does not apply to land on which there are hollows constituting ditches within the meaning of the Water Law, swimming pools or garden ponds
• Concerns only the sale of land acquired from the State Treasury on or after 1 January 2018 pursuant to Art. 217 of the act
• Does not apply to the right of perpetual usufruct of such land.

Despite the explanations provided, the correct interpretation of these regulations still remains unclear. In view of the severe legal consequences of violating the provisions on the statutory pre-emptive right of the State Treasury (invalidity of the legal act), doubts related to the proper understanding of these provisions should be dispelled by the regulator.

Martyna Robakowska, Dominik Wałkowski, legal advisers, Environment practice, Wardyński & Partners