It will be more difficult to implement projects requiring an environmental decision
The amendment to the act on environmental impact assessments signed into law by the President of Poland increases the powers of environmental organisations and makes obtaining permits for development projects more time-consuming. It will be possible to stay the execution of a decision on environmental conditions, suspending proceedings on project permits. But the law also provides for certain measures that may limit the negative impact of such rulings on investors.
Introduction of the new provisions was necessary to fully implement the EIA Directive (Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment). The amendment follows the issuance by the European Commission of its reasoned opinion of 7 March 2019 (infringement procedure 2016/2046) on inadequate implementation of provisions of the directive on access to justice. The amendment is aimed at eliminating the identified irregularities and increasing the rights of parties and environmental organisations in proceedings regarding project permits. The Polish legal solutions were also criticised for the inability to apply to the court for interim relief, which would allow execution of the planned project to be suspended until it is decided whether the decisions permitting the project were issued in accordance with the law. This problem is also solved by the new provisions, and is worth a closer look. The amendment introduces two new instruments making it possible to stay execution of a decision on environmental conditions: stay of execution of a decision that has been made immediately enforceable and stay of execution of an environmental decision by the administrative court.
Current enforceability of environmental decisions
An administrative body issuing a decision on environmental conditions may grant it immediate enforceability. This allows the investor to obtain further project decisions, such as an individual zoning decision or a building permit, without waiting until appeals against the decision on environmental conditions are resolved. Thus, an order on immediate enforceability allows the investor to use the environmental decision before it becomes final. If the subsequent stages of obtaining decisions in the project process are carried out efficiently, it could even happen that the investor could start construction while prolonged appeals against the environmental decision are still pending.
Ordering that a decision is immediately enforceable should be the exception, but in practice officials have sometimes been too hasty in using this instrument. Pursuant to the Administrative Procedure Code, a decision may be issued ordering immediate enforceability if it is necessary to protect human life or health or to protect the national economy against heavy losses, or due to other social interest or extremely important interest of a party. Often the last of these grounds is used to issue such an order, although proving it in practice should be very difficult, as the regulations have been constructed so that granting the order is an exception to the rule. To emphasise the uniqueness of this institution, its application was made conditional on demonstrating an important interest of the party. Moreover, that interest should be “exceptionally important.” In turn, this means that an order of immediate enforceability should apply to truly extraordinary situations.
For parties to the proceedings other than the investor, and for environmental organisations, granting an order of immediate enforceability was not beneficial. The effects of the decision issued by the body of first instance could not be “suspended” as long as the subsequent decisions were positive for the investor. This is because the investor could rely on the immediately enforceable environmental decision throughout the entire appeal procedure. If administrative appeals by other parties or environmental organisations did not achieve their intended effect, and the appellate body upheld the challenged decision, the investor could still continue to rely on the decision even though it was challenged in the administrative court, until it was potentially set aside by the court. Indeed, the administrative courts could not stay execution of environmental decisions. Although this issue initially raised doubts, a fairly consistent line of decisions from the courts developed over time confirming this position.
Stay of immediate execution of decision on environmental conditions
The amendment introduces a number of changes. If the first-instance environmental decision has been made immediately enforceable, in justified cases the body examining an administrative appeal against the decision will be able to stay its immediate enforcement. This will occur after consideration of the party’s request, by way of a decision. That decision will also be appealable. However, unlike in a challenge against a decision in the administrative court, lodging an appeal will not suspend execution of the decision, although the body issuing it may stay its execution if it considers it justified. In an extreme case, this may mean issuance of a decision staying execution of a decision which itself stayed immediate execution of the environmental decision. It will probably have to be worked out in practice and through court decisions to what extent such actions will be allowed. Until then, the enforceability of environmental decisions is likely to become a new and complex zone of contention in real estate development cases.
From the perspective of an investor interested in the fastest possible implementation of the project, the following recommendations may be proposed. First, it should be remembered that the immediate execution of an environmental decision can be stayed at the request of a party. As a rule, this will be a party (other than the investor) which has lodged an appeal against the decision and requested a stay in its appeal. The investor may find out that such an application was submitted only after receiving a decision staying immediate execution of the environmental decision, i.e. when it is too late for the investor to present its arguments.
Therefore, after obtaining an environmental decision, the investor should carefully monitor whether any of the parties requested in the appeal to stay immediate execution of the decision. If such a request was received, it should be examined immediately at the office of the administrative body (the law does not provide for service of the application on the investor) and counterarguments formulated to demonstrate that the circumstances indicated in the request do not justify stay of immediate execution of the decision.
The provisions do not define the phrase “in justified cases,” which is a condition for staying immediate execution of the decision. It seems that it should be understood as exceptional or overriding circumstances which, according to the appellate body, make it necessary to withhold execution of the decision despite fulfilment of the specific conditions for granting an order of immediate enforceability. A superficial analysis of the new provisions may suggest an undesirable direction of interpretation.
As mentioned, granting an order of immediate enforceability is an exceptional institution, as confirmed by the wording of the grounds referring to particularly important and exceptional circumstances. A mere “justified case” should not suffice to overcome the effects of such an order.
It is difficult to assess how this issue will be approached in practice by courts and administrative bodies. However, it is possible to adopt an interpretation favourable to investors, that a justified case which is grounds for withholding immediate execution is also an exceptional circumstance. Indeed, granting an environmental decision an order of immediate enforceability indicates that an extraordinary situation arose justifying immediate execution of the project.
When considering an application to stay immediate enforcement of a decision on environmental conditions, the appellate body should consider whether, despite the extraordinary circumstances justifying granting immediate enforceability, there is an interest in accepting the risk of causing adverse effects that the order is intended to prevent. It seems that this will be very difficult, and the institution of stay of immediate execution should be used rarely.
Stay of execution of a decision on environmental conditions by the administrative court
The stay of immediate execution of an environmental decision discussed above refers to the stage of administrative appeal against a decision on environmental conditions. The second possibility of staying execution of a decision provided for by the amendment relates to the stage initiated by filing a complaint with the administrative court against the final decision on environmental conditions.
Here, the Administrative Court Procedure Law contains a relevant provision concerning stay of execution of challenged decisions. An administrative court hearing a complaint against a decision may issue an order staying execution of the appealed decision if there is a risk of substantial damage or effects that would be difficult to reverse. However, in the case of environmental decisions, this institution was not applied, as it was recognised in the jurisprudence that an environmental decision in itself does not authorise execution of a project, so stay of execution of an environmental decision was not permissible.
Here, too, the amendment provides for a significant change, as it expressly states that the provisions on stay of execution by the court should be applied to decisions on environmental conditions. At the same time, the amendment adds that effects that are difficult to reverse are understood to mean consequences of undertaking a project that may have a significant impact on the environment, for which the contested decision was issued.
From the investor’s perspective, it should be pointed out that the onus of proving these circumstances lies with the applicant seeking the stay, so its claims should be supported by source documents. But in practice it seems that this will be easy, as the amendment itself indicates that such difficult-to-reverse effects should be understood to mean any consequences of implementation of the project, which is a very far-reaching approach.
The stay of execution is permanent, as it expires only when the court issues a decision upholding the complaint, or a decision dismissing the complaint becomes final, and thus, only after the case has been examined by the Supreme Administrative Court. In turn, this may take up to several years, meaning that a stay of execution of an environmental decision may remain in force for that long.
From the investor’s perspective, it should be remembered that the court may modify or rescind such decisions at any time, if the circumstances change. Investors should take advantage of this option, while bearing in mind that it will probably be difficult to determine the circumstances warranting modification of such a decision.
One positive feature for investors is the introduction of measures aimed at preventing overly long proceedings. An application to stay execution must be considered within 30 days of receipt by the court. If the court decides to grant the stay, the court should then rule on the underlying complaint within three months after issuing the stay. On the other hand, if the decision to stay the execution is appealed, the Supreme Administrative Court has two months to consider the appeal.
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The amendment to the provisions on environmental decisions will undoubtedly make implementation of development projects more difficult. While there are reasons to believe that it will be difficult to obtain a stay of execution of an environmental decision with immediate enforceability, it will be much easier for opponents of the project to obtain a stay of execution of such a decision from the administrative court.
The new provisions enter into force 14 days after the amendment is published in the Journal of Laws. The transitional provisions provide for the possibility of applying the new solutions in ongoing proceedings.
We write about the amendment from the point of view of ecological organisations in the article “New powers of environmental organisations: Will they benefit the environment?”
Dr Dominik Wałkowski, adwokat, Environment practice, Wardyński & Partners
