Draft law No. 6477 on the register of emissions and transfers of pollutants: new corruption risks under the guise of eurointegration

06/ 09/ 2022

Draft Law No. 6477 is aimed at implementing the provisions of EU Regulation No. 166/2006 concerning the establishment of a European Pollutant Release and Transfer Register, as well as the Protocol on Pollutant Release and Transfer Registers. The main goal is to create prerequisites for launching an open unified electronic system of access to information on the state of the environment. Adopted as a basis, on August 11 draft law No. 6477 was finalized and approved in the version for the second reading by the Ecoсommittee of the Verkhovna Rada of Ukraine. Already this week, the document is planned to be put to the vote. Thus, the European Business Association supports the creation of such a Register and repeatedly addressed the Ecoсommittee with the comments to draft Law No. 6477 regarding its functioning. Thus, the business community thanks the lawmakers for considering the proposal to harmonize the terms of submission of reports by operators with the current legislation, for example, on monitoring, reporting, and verification of greenhouse gas emissions. Thus, the deadline for submission of reports is extended by March 31 of the year following the reporting one. Meanwhile, the document still contains provisions that are not only inconsistent with the requirements of international and European eco-approaches but may also significantly affect the investment attractiveness of Ukraine and its further economic development. Thus, we are talking about the following provisions: 1. The duty of state bodies to submit to the Register information on mobile sources of air pollution (vehicles that move and produce emissions). As of today, Ukraine does not have a single methodology for determining emissions for transport. Therefore, such a proposal is premature and does not agree with the current procedure for conducting statistical reporting on emissions in Ukraine, and also does not consider rule 7 of Article 7 of the Protocol and Article 8 of Regulation (EC) No 166/2006 of the European Parliament and of the Council of 18 January 2006 concerning the establishment of a European Pollutant Release and Transfer Registers. Thus, they provide for the requirement to submit to the Register only those data collected by state authorities and can practically be entered into the register. As the state intends to hand over the liability for environmental monitoring to business, there are fears that as a result companies will be obliged to collect information on mobile sources of air pollution for the Register. 2. The introduction of a preliminary assessment of data quality, the procedure for providing additional information, the failure of the operator to respond to the request within the specified time, or the provision of an incomplete response as a basis for refusing to accept the operators report and the implementation by the controlling body of an unscheduled measure of state supervision (control) in the field of registration of emissions and transfer of pollutants are introduced by Article 20 of draft law No. 6477. Meanwhile, this point is absent both in the Protocol and in the EU Regulation. Besides, these provisions are written in the most general terms, which can lead to misunderstandings on the part of regulatory authorities and business representatives. For example: the draft law does not define what exactly is meant by additional information and how the completeness of the operators response to the request of the authorized body will be determined, although a clear list of data that can be requested from the company is defined in the EU Protocol and Regulation; the proposed list of grounds for an unscheduled inspection may overlap with planned control measures, and therefore it should be a part of them; the formal possibility of refusal by the authorized body to carry out the registration (information about emissions submitted by the operator) is contrary to the general course of business deregulation and the peopleless principles. In particular, it offsets the cancellation of the registration of the inventory report for the issuance of a permit for emissions of polluting substances. Olga Boiko. EBA Industrial Ecology and Sustainable Development Committee Coordinator. According to the EBA study in August, Ukraine is seeing the lowest business investment attractiveness index since 2013. Corruption and a weak judiciary, surely after military aggression, are the main reasons for this low assessment. Meanwhile, 91% of the surveyed companies of the EBA plan to continue activities in the Ukrainian market, and 55% are going to invest in Ukraine even in wartime. The joint task of the state and business is to do everything possible to improve the sentiments of investors, namely in terms of ease of doing business. Draft law No. 6477, which is a part of the eurointegration pack, should implement exclusively the requirements of the EU regulation and not contain unnecessary superstructures that increase state interference in business activities. We simply cannot afford it in wartime. Therefore, the EBA appeals to the MPs with a request to finalize draft law No. 6477 and maintain the course for eurointegration, improvement of the business climate, and deregulation for the period of martial law and post-war reconstruction.

Adopted as a basis, on August 11 draft law No. 6477 was finalized and approved in the version for the second reading by the Ecoсommittee of the Verkhovna Rada of Ukraine. Already this week, the document is planned to be put to the vote.

Thus, the European Business Association supports the creation of such a Register and repeatedly addressed the Ecoсommittee with the comments to draft Law No. 6477 regarding its functioning. Thus, the business community thanks the lawmakers for considering the proposal to harmonize the terms of submission of reports by operators with the current legislation, for example, on monitoring, reporting, and verification of greenhouse gas emissions. Thus, the deadline for submission of reports is extended by March 31 of the year following the reporting one.

Meanwhile, the document still contains provisions that are not only inconsistent with the requirements of international and European eco-approaches but may also significantly affect the investment attractiveness of Ukraine and its further economic development.

Thus, we are talking about the following provisions:

1. The duty of state bodies to submit to the Register information on mobile sources of air pollution (vehicles that move and produce emissions). As of today, Ukraine does not have a single methodology for determining emissions for transport. Therefore, such a proposal is premature and does not agree with the current procedure for conducting statistical reporting on emissions in Ukraine, and also does not consider rule 7 of Article 7 of the Protocol and Article 8 of Regulation (EC) No 166/2006 of the European Parliament and of the Council of 18 January 2006 concerning the establishment of a European Pollutant Release and Transfer Registers. Thus, they provide for the requirement to submit to the Register only those data collected by state authorities and can practically be entered into the register. As the state intends to hand over the liability for environmental monitoring to business, there are fears that as a result companies will be obliged to collect information on mobile sources of air pollution for the Register.

2. The introduction of a preliminary assessment of data quality, the procedure for providing additional information, the failure of the operator to respond to the request within the specified time, or the provision of an incomplete response as a basis for refusing to accept the operator’s report and the implementation by the controlling body of an unscheduled measure of state supervision (control) in the field of registration of emissions and transfer of pollutants are introduced by Article 20 of draft law No. 6477. Meanwhile, this point is absent both in the Protocol and in the EU Regulation.

Besides, these provisions are written in the most general terms, which can lead to misunderstandings on the part of regulatory authorities and business representatives. For example:

the draft law does not define what exactly is meant by additional information and how the completeness of the operator’s response to the request of the authorized body will be determined, although a clear list of data that can be requested from the company is defined in the EU Protocol and Regulation;
the proposed list of grounds for an unscheduled inspection may overlap with planned control measures, and therefore it should be a part of them;
the formal possibility of refusal by the authorized body to carry out the registration (information about emissions submitted by the operator) is contrary to the general course of business deregulation and the peopleless principles. In particular, it offsets the cancellation of the registration of the inventory report for the issuance of a permit for emissions of polluting substances.

Olga Boiko EBA Industrial Ecology and Sustainable Development Committee Coordinator

According to the EBA study in August, Ukraine is seeing the lowest business investment attractiveness index since 2013. Corruption and a weak judiciary, surely after military aggression, are the main reasons for this low assessment. Meanwhile, 91% of the surveyed companies of the EBA plan to continue activities in the Ukrainian market, and 55% are going to invest in Ukraine even in wartime. The joint task of the state and business is to do everything possible to improve the sentiments of investors, namely in terms of ease of doing business. Draft law No. 6477, which is a part of the eurointegration pack, should implement exclusively the requirements of the EU regulation and not contain unnecessary superstructures that increase state interference in business activities. We simply cannot afford it in wartime.

Therefore, the EBA appeals to the MPs with a request to finalize draft law No. 6477 and maintain the course for eurointegration, improvement of the business climate, and deregulation for the period of martial law and post-war reconstruction.