New Water Law—a revolution in water management
One of the most anticipated acts in the environmental arena has now been adopted: the new Water Law. This statute with 570 articles enters into force on 1 January 2018 and will fundamentally change the rules for water management in Poland.
The several years of work on reform of Poland’s Water Law was intended primarily to achieve full implementation of the Water Framework Directive (2000/60/EC). The successive drafts of the bill released over the last year or so sparked many controversies and caused great concern to individuals, businesses, and administrative authorities. The changes under the new act are sweeping and complex. In this article we only signal a few of the most important solutions introduced by the new Water Law.
New super-agency: Polish Waters
From 1 January 2018, the most important authority for management of water in Poland will be Polish Waters State Water Enterprise (Państwowe Gospodarstwo Wodne Wody Polskie—“Polish Waters” for short). This newly established state legal person will not only exercise the lion’s share of the ownership prerogatives vested in the State Treasury, but will also authoritatively resolve water-related administrative matters. The work of this office will be directed by the CEO of Polish Waters, appointed by the minister competent for water management matters (currently the Minister of the Environment).
The relevant bodies of Polish Waters will be responsible for such matters as issuing water law permits and water law assessments, and will also perform inspections of proper water management, and operate the Hydroportal, which will replace the current water registry.
The water management competencies of local governmental authorities, particularly the county executive (starosta), will be greatly reduced. Meanwhile, the Minister of Maritime Economy and Inland Navigation will assume great competencies in matters involving inland waterways of particular importance for transport.
Right of pre-emption in transactions involving land covered by inland standing waters
One of the most significant solutions for transactional practice introduced by the Water Law is the establishment of a statutory right of pre-emption for the State Treasury with respect to any land under inland standing waters, regardless of the surface area of the water or the land. Thus any transaction involving the sale of real estate where inland standing waters are located can only be effective if the starosta, acting for the State Treasury, does not exercise the right of pre-emption. The starosta will have a month to submit a statement exercising the right of pre-emption, with this period calculated from receipt of notice of conclusion of the contract undertaking to sell the land.
“Standing waters” are defined under the Water Law as “inland waters in lakes and other natural bodies of water not directly and naturally connected with flowing inland surface waters.”
The new act does not specify the consequences of sale of such real estate without notification of the State Treasury. Thus this issue will be governed by the general rules of the Civil Code. This means that the sale of land covered by inland standing waters without notification of the local starosta will be null and void.
Certain doubts are bound to arise in practice whether under the given facts the transaction involves land under inland standing waters. To eliminate ambiguities in interpretation, the new regulations provide for a procedure for establishing the nature of the water. The owner of land adjoining the water in question may apply for such a determination. The application will have to contain quite complicated information, such as a description of the hydromorphological elements of the waters and an historical analysis of the connection of the waters to public inland surface waters. A mandatory enclosure to the application is a topological map depicting the course of the waters from source to outlet. A decision determining the nature of the water will be issued by the Minister of the Environment.
Water law assessment as a new requirement preceding certain development projects
It will be necessary to obtain a water law assessment before carrying out projects that may affect achievement of environmental objectives, with respect to such areas as the use of water services or construction of water facilities. A detailed list of such projects and activities will be specified in an executive regulation.
If it appears from an analysis of the documentation submitted by the investor that the planned venture will have a negative impact on achievement of environmental objectives, it will be permissible to carry out the project only if the applicant demonstrates that the conditions justifying failure to achieve a good ecological status or ecological potential of the waters, or failure to prevent worsening of the status of body of groundwater, have been met.
Water services—a central element of the new system
The new Water Law introduces into the Polish legal system the concept of “water services.” These consist of providing households, public institutions or economic entities with the possibility of using water beyond the common and ordinary use, or special use of water. In practice, such services will include abstraction of surface water and groundwater, discharge of sewage into water or ground (including discharge of sewage into water facilities), release of rainwater or melt from a storm sewer system into water or water facilities.
Entities performing water services will be required to pay water service fees but will also be required to obtain a water law permit.
One of the most important and controversial changes in the new Water Law is the introduction of a complex system of fees for water services. Until now, abstraction of water or discharge of wastewater to waters or the ground has required the payment of fees for exploitation of the environment, regulated in the Environmental Protection Law. These regulations have also laid down the sanctions for abstraction of water or discharge of wastewater in violation of the conditions of a permit or without obtaining the relevant permit. From 1 January 2018 these issues will be governed by the Water Law.
The construction of the fees for water services does not differ substantially from the original proposal in the government draft of the bill (as we discussed in more detail in the article “New Water Law. New fees. New payment rules”).The fees will comprise two components: a fixed fee and a variable fee.
The amount of the fixed fee will depend on such factors as the unit rate, duration, and maximum quantity of water abstracted (or removed to wastewater and melt, or wastewater released to waters or the ground), determined on the basis of the water law permit or integrated permit and expressed in m3/s. In the case of abstraction of groundwater, the ratio of the quantity of water that may abstracted on the basis the permit to the available resources of groundwater will also be relevant, and in the case of surface water, the ratio of such water to the low average long-term annual rate of flow.
The amount of the variable fee will depend on the quantity of water abstracted (or removed to wastewater and melt, or wastewater released to waters or the ground) and the rate for the fee. The first of these factors will be determined on the basis of readings from the meter which entities performing water services will be required to maintain.
The act sets only maximum rates for specific fees. It should be stressed in this regard that these rates were generally set on the basis of a uniform level for all of the listed purposes. The specific rates for water service fees will be set in an executive regulations issued by the Council of Ministers.
New sanctions for violation of the terms of water law permits
Abstraction of water (or removal of wastewater and melt to waters, or release of wastewater to waters or the ground) without a water law permit or in violation of the terms of a permit will result in an obligation to pay “increased fees.” However, these fees are constructed differently than the increased fees governed by the Environmental Protection Law. First and foremost, the obligation to pay them will not arise by operation of law, but will be assessed by the administrative authorities.
The amount of the increased fees will also depend on whether the entity operated without a required permit, or held a permit but exceeded the conditions in the permit. In the first instance, the increased fee will be 500% of the variable fee otherwise due, and in the second instance will be 10 times the unit rate of the variable fee.
There will also be a new sanction for failure to hold a water law permit. In that case Polish Waters will be authorised to issue a decision prohibiting the establishment from using water. The authorities will be required to issue such a decision subject to immediate enforcement.
As should be apparent from the foregoing summary, the new water regulations will have an impact on many aspects of business operations. There will be a change in the administrative authorities responsible for performing specific tasks, and the rules for obtaining water law permits will change. The new Water Law will also have a major impact on financial issues connected with the use of water, modify the rules for liability for violation of legal requirements, and even affect the rules for carrying out certain transactions on the real estate market. This means that major development projects impacting water management will have to be preceded by a thorough analysis in light of the detailed requirements for planning, protection and management of water resources.
Martyna Robakowska, Dominik Wałkowski, Environment practice, Wardyński & Partners