The Verkhovna Rada of Ukraine of the current convocation has a unique opportunity to complete a number of reforms that have been under way in Ukraine for 30 years. This is primarily the reform of environmental control over all stakeholders – individuals, economic entities and public authorities.
Despite the fact that the draft law 3091 was developed in accordance with the requirements of the best legislative practices, following the development of the Green and White Papers on Eco-Control, the adoption of the Concept of reforming the system of state supervision (control) in the area of environmental protection and its main goal is to transform the bureaucratic giant that puts pressure on business and on the body that prevents environmental damage and promotes sustainable development, some business associations that call themselves “European” initiate the discussion in the effort to talk the reform down.
Let’s review the “risks” of the draft law found by the European Business Association and covered in the publication.
- The possibility of applying the rules of international treaties ratified by the Verkhovna Rada of Ukraine. Such provisions may be not adapted to the Ukrainian legislation and thus create room for double interpretations and pressure.
There is no risk because Art. 9 of the Constitution of Ukraine clearly states that existing international agreements, the binding nature of which has been approved by the Verkhovna Rada of Ukraine, are part of the national legislation of Ukraine. The conclusion of international agreements that contradict the Constitution of Ukraine is possible only after the relevant amendments to the Constitution of Ukraine.
- An inspection may take place on the basis of a request from the pre-trial investigation bodies in the framework of criminal proceedings. This provision significantly expands the grounds for unscheduled inspections that go beyond the environmental sphere, and can also cause potential reputational losses for businesses.
The draft law 3091 provides mechanisms for cooperation with law enforcement agencies in terms of harmonizing the provisions of the Criminal Code of Ukraine (the chapter on crimes against the environment) and the Criminal Procedure Code of Ukraine (powers of investigators to carry out investigative actions). The investigative bodies do not receive any additional powers. This norm is a practical implementation of the results of the coordination meeting with the General Prosecutor’s Office, which was commissioned by the President of Ukraine.
It is proposed to introduce a 4-stage gradation of enterprises depending on the degree of risk to the environment – from “highest degree of risk” to “insignificant”. Although, at present, the current legislation provides for a three-stage classification system. According to business sector, this can contribute to a subjective approach to determining the frequency of inspections and prejudicedly reduce the period of repeated inspection by the supervisory authority. In the EU, repeated inspections can be carried out no more than once every 6 months.
According to the EU Directive , companies that have a special impact on the environment must be inspected at least once a year. Under the current legislation, high-level businesses are subject to biennial inspections. In order not to increase the burden on the SEI and not to check more than 12,000 high-level businesses, it is proposed to introduce the category of “ultra-high risk”, which will allow to identify 300 businesses that will undergo such control. It is the companies that are interested in such a distribution. The criteria will be developed at the level of the CMU resolution.
- Powers of the Maritime Administration and the State Environmental Inspectorate are duplicated, which contradicts one of the principles of state supervision (control) defined by Article 3 of the Law of Ukraine “On Basic Principles of State Supervision (Control) in the area of economic activity”.
At the meeting in the General Prosecutor’s Office, the issue of the importance of exercising control over the sea was raised. This is not about duplication of powers. Each of these bodies performs its control function.
- The need to coordinate the technology of transloading of goods by maritime enterprises with environmental inspectors is returned. And this is despite the fact that the need for such coordination was recently cancelled by the Resolution of the Cabinet of Ministers in order to liberalize and simplify business activities in Ukraine.
Again, it is necessary, for example, to prevent the import of goods such as sand, which turned out to be waste and has been polluting the coast of the Sea of Azov in Kherson region for a year.
- The draft law does not comply with the Law of Ukraine “On Inland Water Transport” of 03.12.2020 № 1054-IX, which will enter into force on 01.01.2021 in terms of terminology.
There are no contradictions.
- The draft law duplicates the provisions on sampling and analysis in accordance with the Law “On Environmental Protection”.
There are no duplications. 3091 says nothing about the procedure of sampling. It indicates to the possibility of such sampling, the need for timely sampling, which indicates to the quality and efficiency of the work of SEI employees, who often fail to form the evidence base for investigative bodies in a timely manner. Once again, this was discussed today at the level of General Prosecutor’s Office. Due to improper work of SEI, only 1% of damages are recovered, and the same number of cases end in real liability.
- The draft law deprives the shipowner of the right to provide security for the maritime claim and to avoid the detention and subsequent arrest of the vessel, which is a violation of international agreements of Ukraine.
There is no such interpretation in the draft law.
- The controlling bodies will have the right to stop, inspect, as well as temporarily seize any vehicles (including vessels, ships) that, in their opinion, may be involved in the violation of environmental legislation.
This is the task of operational control. Because the damage to the environment is often greater than the risks of illegal actions of the inspector, the inspector can and should be punished for illegal actions. However, the air that has already passed through the lungs and contaminated them cannot be removed from these lungs.
- The order on inspection of the enterprise can contain the name of the company or only the address at which the infringement was revealed. In fact, this gives grounds to check several companies at once, if they have a common address.
Activities and territory are checked. The planned inspection is conducted for a certain business entity, unscheduled inspection checks the fact of violation and may extend to several entities. This is the proper implementation of the principles and objectives of control.
- Appeals of individuals about violations, the damage of which has not been proven, can be used to initiate inspections. This can lead to a blockage of the business due to false complaints. Therefore, the validity and availability of factual evidence of such damage must be envisaged in the draft law.
There are preventive mechanisms envisaging liability for false appeals. The right to appeal is the right guaranteed by the Constitution.
- Sanctioning for creating obstacles to officials (non-admission). According to the business, this narrows the possibilities for exercising the right of enterprises not to let inspectors in to inspect if there are legitimate reasons for this, such as incorrectly filled out documents, failure to submit documents, etc. Therefore, we propose to clarify that this is an illegal or ungrounded refusal of admission.
The interpretation is clear and understandable.
- Exemption of state control bodies from paying court fees if the lawsuit is filed by a business, for example, by appealing the results of an inspection. This approach upsets the balance of power between the state and enterprises.
This is a measure to make it impossible for the SEI to refuse to protect the interests of the state referring to the lack of funds to pay court fees.
- Ensuring the installation of automatic monitoring systems within 6 months after the entry into force of the draft law. This provision is already provided for in the draft law №4167.
These are just draft laws. These provisions can be eliminated before the second hearing.
- Powers and responsibilities of both regulatory authorities and economic entities are clearly defined. However, the liability for non-compliance is provided only for enterprises. Therefore, it is also necessary to establish a provision on the responsibility of inspectors for interfering in the business.
The liability is provided, but the new requirements for amendments to the Criminal Code and the Code of Administrative Offenses provide for the adoption of a special procedure for such amendments. Such amendments are being developed. In addition, SEI employees will be under constant supervision through the open control system, and will also be liable for violations of the law.
