Several years of work to reform of Poland’s water law was intended primarily to achieve full implementation of the Water Framework Directive (2000/60/EC).
Successive drafts of the bill released over the years sparked many controversies, causing great concern to individuals, businesses, and administrative authorities. Ultimately, parliament managed to pass the statute with 570 articles, which will enter into force on 1 January 2018. Even though one of the most anticipated acts in the environmental arena has now been adopted, discussion about its content has not ended. 2018 will definitely bring significant implementation and enforcement challenges.
Polish Waters – a new super-agency
From 1 January, the most important authority for management of water and implementation of an integrated policy on water in Poland is Państwowe Gospodarstwo Wodne Wody Polskie – 'Polish Waters' for short. This newly established state enterprise will exercise the water ownership prerogatives vested in the State Treasury, and will resolve all water-related administrative matters. The units of Polish Waters will issue water-law permits and water-law assessments, and will also perform inspections of proper water management. Consequently, the water management competencies of local governmental authorities will be reduced.
Water management based on water services
The new Water Law introduces the concept of 'water services' into the Polish legal system. Under the Water Framework Directive, this term means all services which provide, for households, public institutions or any economic activity abstraction, the storage, treatment and distribution of surface water or groundwater, and also waste-water collection and treatment facilities which subsequently discharge into surface water. A similar approach is present under the new Water Law Act.
The idea behind the concept of water services is to promote the use of economic instruments in water management, by implementing the principle of recovering the costs of water services. This should include recovery of environmental and resource costs associated with damaging the aquatic environment. Entities using and benefiting from water services will be required to pay water service fees, but will also be required (in some situations) to obtain a water-law permit.
A new system of fees for water services
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, taking up water or discharging waste-water to waters or ground has required the payment of fees for use of the environment, regulated in the Environmental Protection Law. These regulations set out sanctions for taking up water or discharging waste-water 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 fees will be split in two: a fixed- 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 taken up or waste-water discharged to waters or ground, determined on the basis of the water law permit and expressed in m3/s. The amount of the variable fee will depend on the quantity of water taken up or waste-water discharged to waters or 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 specific rates for water service fees will be set in the executive regulations issued by the Council of Ministers.
New sanctions for breach of permits
Taking up water or discharging waste-water without a water law permit or in breach of the terms of a permit will result in an obligation to pay increased fees. Businesses whose activities have an effect on the environment are already quite familiar with that concept. However, these fees under the new Water Law are constructed differently than the increased fees governed by the Environmental Protection Law. The obligation to pay them will not arise by the operation of the law, but will be assessed by the administrative authorities. Those differences could cause some confusion and lead to errors. Therefore, businesses should pay particular attention to settlement of environmental fees and fees for water services, as from 1 January 2018, they will be regulated differently.
The amount of the increased fees will also depend on whether the entity operated without a required permit, or whether it held a permit but exceeded its conditions. 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.
Comprehensive legislation resulting in several challenges
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. The latter will result from 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. Therefore, 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.
You will need 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 equipment. A detailed list of such projects and activities will be specified in an executive regulation. This means that major development projects impacting water management will have to be preceded by a thorough analysis of the requirements for planning, protecting and managing water resources.
In the circumstances, there is currently an urgent need for a comprehensive review of water management issues at businesses whose activity involves use of water, to avoid risk resulting from non-compliance.