By Sonja Gitarić, Attorney-at-Law and Đorđe Popović, Senior Attorney, Petrikić & Partneri AOD in cooperation with CMS Reich-Rohrwig Hainz
For the purpose of opening the EU accession “Chapter 27: Environment and Climate Change“ and in accordance with the European Union’s Third Energy Package, Serbia is required to approximate its regulatory framework to the applicable EU requirements and standards, deploy a significant portion of its own and, to the extent available, EU funds in energy efficiency and environmental protection projects, as well as to ensure reliable mechanisms of enforcement through increase in administrative capacity and cooperation with the private sector.
On that note, on 19th February 2016 the Serbian Parliament adopted a set of amendments to the Waste Management Act (“WMA”) and the Environmental Protection Act (“EPA”). In addition to the Act on Integrated Prevention and Protection of Environmental Pollution, the WMA and the EPA are the two most relevant pieces of legislation that regulate waste management activity in Serbia.
In large part, the adopted amendments do not appear to be of a major scale. However, they are aimed at achieving two significant goals: a) providing incentives to the industry through more efficient administrative procedures and through specifically designated green funds; and 2) harmonizing Serbian regulations with EU standards in the area of environmental protection, and waste management in particular.
While noting that the said amendments are moving Serbian legal system a step closer to the relevant EU acquis in this sector, it is of equal importance that the amendments of the corresponding by-laws are also adopted in the near future, which are expected to regulate in further detail the newly introduced statutory changes.
Below we present the most relevant legislative changes adopted.
Amendments to the WMA
Some of the most relevant amendments to the WMA include the following:
- Issuance of a preliminary waste management permit
Practically the most relevant regulatory amendment is the newly introduced preliminary waste management permit which is now issued to cover the time gap between the probationary operation of the facility (i.e. facility testing) and the final obtainment of the integrated waste management permit (i.e. the “final” waste management permit).
Until now, in practice, waste management companies were normally forced to cease operation of the waste management facility between the time of testing and the issuance of the integrated permit. Consequently, waste management companies would incur losses due to inability to operate an otherwise fully operational facility.
According to the newly amended Article 59 of the WMA, the waste management facility can now obtain a preliminary waste management permit allowing it to operate the facility for a maximum of 240 days following the facility testing.
- Introduction of by-product as a new category of goods to be directly placed on the market
By-product i.e. surplus material is not considered to be waste in terms of mandatory disposal and application of relevant environmental protection and waste management. This means that certain types of waste can now have the status of “goods” rather than “waste” and, thus, benefit from enhanced market value. This is expected to incentivize new commercial activity in the market.
Surplus material is considered to be a by-product if:
- primary purpose of the production process is not the production of this particular material/product;
- further use of product is certain;
- product can be reused without the need for prior waste management processes such as decontamination; and
- the use of product is not prohibited or hazardous to environment or public health.
- More clearly defined sources of waste management funding
The WMA now prescribes that the funding for waste management in Serbia will be provided from:
- the State budget;
- the budget of municipalities and autonomous provinces;
- EU and other international funds;
- donations, gifts, contributions, aids and similar waste management funding;
- debt finance from international financial institutions;
- other sources, in accordance with the relevant regulations.
Amendments to the EPA
The most relevant amendments to the EPA concern the financing of activities aimed at improving environmental protection, including viable waste management solutions and production of energy from renewable sources. The establishment of the Green Fund is expected to provide continuing and reliable financing of green sector projects.
- Financing of environmental protection is to be obtained from the following sources: State budget, the budget of municipalities and autonomous provinces, foreign countries’ State budgets, international organizations, financial institutions, as well as domestic and foreign legal and physical persons, EU funds and other international funds, donations, gifts, contributions and aids.
- Infrastructure projects are to be financed based on the State list of priority projects, as established by the competent authorities.
- “Polluter pays” and “user pays” are the two basic principles established by the said amendments. Funds accrued from the polluters / users, together with the funding obtained from other sources (e.g. EU accession funds), are then to be streamed to the Green Fund.
- The Green Fund is the newly established State fund envisaged to channel funding from various sources towards preparation and carrying out of programs, projects and other activities aimed at environmental protection.
Green Fund investments are expected to improve the quality of environmental protection, including the remedying of polluted locations, disposal of historical waste from companies in restructuring or bankruptcy, waste management system improvement, recycling industry development, as well as establishment of green economy and opening of new work positions – green employment.