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The reform of state environmental control should not increase regulatory pressure on business

16/ 03/ 2021
  On Wednesday, March 17, the VRU Environmental Committee will consider the revised version of the draft law №3091 on state environmental control. The document provides preconditions for the liquidation of the State Environmental Inspectorate and the creation of a new body that will carry out state environmental control with a risk-oriented approach. Thus, the new version of the draft law took into account the following critical remarks for business: 1. Scheduled and unscheduled inspections are carried out during working hours following the rules of internal labor regulations of the enterprise. 2. It is determined that unscheduled inspection shall be carried out only towards those issues that initially formed the basis for such an inspection. 3. It is clarified that inspection-raids shall be applicable against individuals, not the companies. 4. The authority of state environmental control bodies to suspend the activities of companies without a court decision is excluded. 5. The draft law excludes control over compliance with the requirements of licensing conditions. This will ensure that there will not be duplication of functions with other bodies. 6. The draft law provides for the financial and economic substantiation of the reform of the state environmental control and the measures to increase the motivation of representatives of the controlling body. Besides, the draft law seeks to include the principles of environmental control in the hierarchy of current legislation on environmental protection and state supervision (control) of economic activities. At the same time, the text of the document contains ambiguous provisions that would lead to the overregulation of the sector and thus not supported by business: 1. The possibility of applying the rules of international treaties ratified by the Verkhovna Rada may create room for double interpretations and pressure on the business as the provisions are not always adapted to Ukrainian law. 2. The inspection may take place based on 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 may also cause potential reputational losses for companies. 3. It is proposed to introduce a 4-tier gradation of companies depending on the degree of risk to the environment - from highest risk to insignificant. Although, at present, the current legislation provides for a three-tier classification system. According to the business, this can contribute to a subjective approach to determining the frequency of inspections and prejudicedly reduce the period of re-inspection by the supervisory authority. In the EU, re-inspections can be carried out no more than once every 6 months. 4. The 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 Sphere of Economic Activity. 5. There is a need to coordinate the technology of transshipment of goods by maritime companies with environmental inspectors. Even though the need for such coordination was recently abolished by the Resolution of the Cabinet of Ministers to liberalize and simplify business activities in Ukraine. 6. The draft law does not comply with the Law of Ukraine “On Inland Water Transport” of December 3, 2020, № 1054-IX, which entered into force on January 1, 2021, in terms of terminology. The draft law duplicates the provisions on sampling and analysis under the Law On Environmental Protection. 7. The draft law duplicates the provisions on sampling and analysis under the Law On Environmental Protection. 8. The draft law deprives the shipowner of the right to provide security for the maritime claim to avoid the detention and subsequent arrest of the vessel, which is a violation of international agreements of Ukraine. 9. The supervisory authorities shall have the right to stop, inspect and temporarily seize any means of transport (including vessels, ships) which, in their opinion, may be involved in a violation of environmental legislation. 10. The order to inspect the company may contain the name of the company at which the violation was detected both with and without the address. In fact, this gives grounds to check several companies at once, if they have a common address. 11. The use of the complaints of individuals on the possible violation as a basis for inspection may lead to a blockage of the business as the reported damage has not been proven, thus there is a high risk of pre-false complaints. Therefore, the draft law should provide the validity and availability of factual evidence of the damage caused by the violation. 12. Sanctioning for obstruction of officials (non-admission). According to the business, this narrows the possibilities for exercising the right of companies not to allow inspectors 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 unfounded refusal of admission. 13. Exemption of state control bodies from paying court fees if the lawsuit is filed by a business, for example, when appealing the inspection results. This approach upsets the balance of opportunities between the state and companies. 14. 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. 15. Clearly defined powers and responsibilities of both regulatory authorities and business entities. In this case, liability for non-compliance is provided only for companies. Therefore, it is also necessary to establish a rule on the responsibility of inspectors for interfering in the business. The business points out that many provisions are not supported by the community. Therefore, the European Business Association asks the Parliament and the Government to take into account business comments and promote the development of a high-quality and comprehensive environmental system, so that after the reform we get an effective body and not a bureaucratic giant whose main goal is to exert pressure on the business.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

On Wednesday, March 17, the VRU Environmental Committee will consider the revised version of the draft law №3091 on state environmental control.

The document provides preconditions for the liquidation of the State Environmental Inspectorate and the creation of a new body that will carry out state environmental control with a risk-oriented approach.

Thus, the new version of the draft law took into account the following critical remarks for business:

1. Scheduled and unscheduled inspections are carried out during working hours following the rules of internal labor regulations of the enterprise.

2. It is determined that unscheduled inspection shall be carried out only towards those issues that initially formed the basis for such an inspection.

3. It is clarified that inspection-raids shall be applicable against individuals, not the companies.

4. The authority of state environmental control bodies to suspend the activities of companies without a court decision is excluded.

5. The draft law excludes control over compliance with the requirements of licensing conditions. This will ensure that there will not be duplication of functions with other bodies.

6. The draft law provides for the financial and economic substantiation of the reform of the state environmental control and the measures to increase the motivation of representatives of the controlling body.

Besides, the draft law seeks to include the principles of environmental control in the hierarchy of current legislation on environmental protection and state supervision (control) of economic activities. At the same time, the text of the document contains ambiguous provisions that would lead to the overregulation of the sector and thus not supported by business:

1. The possibility of applying the rules of international treaties ratified by the Verkhovna Rada may create room for double interpretations and pressure on the business as the provisions are not always adapted to Ukrainian law.

2. The inspection may take place based on 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 may also cause potential reputational losses for companies.

3. It is proposed to introduce a 4-tier gradation of companies depending on the degree of risk to the environment – from “highest risk” to “insignificant”. Although, at present, the current legislation provides for a three-tier classification system. According to the business, this can contribute to a subjective approach to determining the frequency of inspections and prejudicedly reduce the period of re-inspection by the supervisory authority. In the EU, re-inspections can be carried out no more than once every 6 months.

4. The 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 Sphere of Economic Activity”.

5. There is a need to coordinate the technology of transshipment of goods by maritime companies with environmental inspectors. Even though the need for such coordination was recently abolished by the Resolution of the Cabinet of Ministers to liberalize and simplify business activities in Ukraine.

6. The draft law does not comply with the Law of Ukraine “On Inland Water Transport” of December 3, 2020, № 1054-IX, which entered into force on January 1, 2021, in terms of terminology. The draft law duplicates the provisions on sampling and analysis under the Law “On Environmental Protection”.

7. The draft law duplicates the provisions on sampling and analysis under the Law “On Environmental Protection”.

8. The draft law deprives the shipowner of the right to provide security for the maritime claim to avoid the detention and subsequent arrest of the vessel, which is a violation of international agreements of Ukraine.

9. The supervisory authorities shall have the right to stop, inspect and temporarily seize any means of transport (including vessels, ships) which, in their opinion, may be involved in a violation of environmental legislation.

10. The order to inspect the company may contain the name of the company at which the violation was detected both with and without the address. In fact, this gives grounds to check several companies at once, if they have a common address.

11. The use of the complaints of individuals on the possible violation as a basis for inspection may lead to a blockage of the business as the reported damage has not been proven, thus there is a high risk of pre-false complaints. Therefore, the draft law should provide the validity and availability of factual evidence of the damage caused by the violation.

12. Sanctioning for obstruction of officials (non-admission). According to the business, this narrows the possibilities for exercising the right of companies not to allow inspectors 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 unfounded refusal of admission.

13. Exemption of state control bodies from paying court fees if the lawsuit is filed by a business, for example, when appealing the inspection results. This approach upsets the balance of opportunities between the state and companies.

14. 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.

15. Clearly defined powers and responsibilities of both regulatory authorities and business entities. In this case, liability for non-compliance is provided only for companies. Therefore, it is also necessary to establish a rule on the responsibility of inspectors for interfering in the business.

The business points out that many provisions are not supported by the community. Therefore, the European Business Association asks the Parliament and the Government to take into account business comments and promote the development of a high-quality and comprehensive environmental system, so that after the reform we get an effective body and not a bureaucratic giant whose main goal is to exert pressure on the business.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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