A Q&A guide to environment law in Italy. This Q&A provides a high-level overview of environmental law in Italy and looks at key practical issues including emissions to air and water, environmental impact assessments, waste, contaminated land, and environmental issues in transactions. In addition, answers to questions can be compared across a number of jurisdictions to assist in the management of cross-border transactions (see Country Q&A tool).
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Environmental Code. The key environmental legislation is the Legislative Decree No. 152 of 3 April 2006, as subsequently amended, containing provisions in the environmental field (Environmental Code). One of the last significant amendments to the Environment Code was introduced under Legislative Decree No. 128 of 19 June 2010, which has been in force from 26 August 2010. This amendment, among other things:
Amended the common provisions and general principles of the Environmental Code.
Amended the environmental impact assessment procedures for projects, plans and programmes.
Amended the rules governing atmospheric pollution (also relating to the control system of air emissions and the sanctions system).
In addition, the decree has now incorporated the integration pollution prevention control (IPCC) regime into section III-bis of the Environmental Code. Previously, the IPPC was governed by Legislative Decree No. 59 of 18 February 2005, which is now repealed.
The aim of the Environmental Code is to promote the quality of human life through the:
Protection and improvement of environmental conditions.
Careful and rational use of natural sources.
The Environmental Code sets out rules on the following matters:
Procedures for the:
strategic environmental assessment for certain plans and programmes;
environmental impact assessment for certain projects; and
IPPC (see Question 4).
Soil and water protection from pollution and the management of water resources.
Waste management and clean-up of contaminated sites.
Air protection and reduction of air emissions.
Restoration against environmental damages.
The Environmental Code's rules benefit from more intense protection than ordinary legislation as they can only be derogated from, modified or abrogated by:
An express declaration in a subsequent law.
Ensuring that the following are observed:
European legislation;
international law and principles;
the scope of authority of the regions (the 20 administrative areas within Italy) and of other local entities.
The Environmental Code's provisions must be construed on the basis of its four main principles:
The principle of environmental action. This requires all public and private entities to take actions aimed at the protection of the environment and the natural ecosystem on the basis of the following principles:
prioritising prevention, precautions against and rectification of environmental damage at source;
the "polluter pays" principle (paragraph 2, Article 191, Treaty on the Functioning of the European Union (TFEU)).
The principle of sustainable development, to ensure that the satisfaction of the needs of the current generation does not jeopardise the quality of life and needs of future generations.
The principle of subsidiary and of fair collaboration, which means that the provisions in the Environmental Code constitute the minimal and essential conditions to ensure the protection of the environment. If necessary, the regions can implement more restrictive provisions to protect the environment, provided that those additional rules:
are not arbitrary; and/or
do not unjustifiably increase bureaucracy.
Everyone must have the right to:
access all information on the environment status of the territory; and
participate in any environmental procedure without the need to prove a legally protected interest.
These four main principles must also be complied with when adopting additional legislation in the field of environmental protection.
Other legislation. Other applicable legislation includes the:
Legislative Decree No. 28 of 3 March 2011, implementing Directive 2009/28/EC on the promotion of the use of energy from renewable sources.
Legislative Decree No. 151 of 25 July 2005, implementing Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment, Directive 2002/96/EC on waste electrical and electronic equipment (WEEE Directive), and Directive 2003/108/EC amending the WEEE Directive.
Legislative Decree No. 34 of 19 August 2005, implementing Directive 2003/4/EC on public access to environmental information (and repealing Directive 90/313/EEC).
Legislative Decree No. 202 of 6 November 2007, implementing Directive 2005/35/EC on ship-source pollution and on the introduction of penalties for infringements.
Legislative Decree No. 231 of 8 June 2001, as recently amended by Legislative Decree No. 121 of 7 July 2011, providing, among others, pecuniary sanctions for legal entities in cases of criminal offences concerning the environment, committed for their interest or benefit by any person who represents or administers the legal entity, or is subject to the legal entity's direction or control.
Law No. 157 of 11 February 1992, as amended, concerning the protection of wild fauna and the regulation of the exercise of hunting activity.
In addition, asbestos and health and safety at work are subject to other specific rules.
The regions have a regulatory power in relation to environmental matters, although this regulatory power must be exercised in compliance with national legislation.
Other regulatory authorities are the:
Ministry of Environment and Protection of Land and Sea.
Ministry of Cultural Goods.
Ministry of Public Health.
Conferenza unificata Stato-Regioni (that is, the steering committee between the state and regions), with the power to rule on specific matters as provided by national legislation.
Regulators enforce environmental requirements through:
Monetary sanctions.
Criminal penalties.
Suspension of the activity for the period required to implement the environmental requirement which has been violated.
In certain circumstances, the regulators can also revoke an authorisation to conduct the activity that is obtained in violation of the environmental laws.
The authorities that can enforce the environmental requirements are the:
Municipalities, provinces and regions.
Officers of the Ministry of Environment and Protection of Land and Sea.
Police.
Special environmental agencies.
Administrative and criminal courts.
Public prosecutors.
Private entities (including environmental associations) can demand that these authorities investigate matters. The wide range of responsible authorities ensures that environmental laws are usually enforced. However, enforcement is balanced against the need to protect local economies and the level of employment in the businesses concerned.
The competent regulatory authorities must start an investigation and/or legal proceedings to ascertain the infringement of the law each time an interested party reports a breach of environmental law to them.
NGOs in Italy are recognised by the Constitution, through the protection of freedom of association of citizens for purposes not forbidden by criminal law. The law confers on NGOs significant powers, including to:
Take part in any decision-making procedures, including the issuance of environmental permits and file objections.
Under certain conditions, challenge permits granted or decisions made in the administrative courts alleging a breach of environmental law.
File a petition with the public prosecutor to start criminal investigation. The public prosecutor must proceed if there is sufficient evidence.
In addition, NGOs recognised by the Ministry of Environment can both (Law No. 349 of 8 July 1986):
File a claim to challenge the legitimacy of acts or omissions of the public administration either at national or at local level.
Intervene in proceedings already started for the restoration of environmental damage.
There is an integrated permitting regime. Section III-bis implements the provisions of Directive 96/61/EC concerning integrated pollution prevention and control (IPPC Directive), as amended by Directive 2008/1/EC.
The integrated permitting regime covers both:
Installation of new plants.
Substantial modification and adaptation of the functioning of existing plants.
The companies must apply for an IPPC permit to exercise certain activities listed in Annex VIII of the Environmental Code.
In addition, other laws (such as Legislative Decree No. 387 of 29 December 2003, which provides for a single authorisation procedure for the construction and operation of plants producing energy from renewable sources) have introduced a single permitting regime for certain specific plants or productive activities. This single permitting regime incorporates the IPPC, where requested.
Part II, section III-bis, of the Environmental Code regulates the integrated permitting regime for certain industrial activities and major infrastructures.
The Environmental Code also covers the co-ordination of the IPPC with the environmental impact assessment (EIA) procedure. For activities that are subject to both procedures (such as combustion plants generating electricity with a power equal or higher than 50MW, industrial chemical plants and waste disposal plants with a capacity of 3 tonnes/hour), the IPPC is granted within the EIA procedure.
The Ministry of Environment and Protection of Land and Sea grants the IPCC permit for plants of national interest (including refineries, power plants with thermal power exceeding 300 million watts, gas plants, and major steel and chemical factories). Each regional government must appoint the competent authority to grant the IPPC permit in relation to the other plants included in Annex VIII of the Environmental Code.
The IPPC permit includes, among other provisions, the authorisations for:
Air emissions.
Waste water discharges.
The disposal (in any form) and recovery of waste.
The IPPC permit is usually valid for five years. The operator can file an application to the competent authority, six months prior to the expiry of the IPPC permit, for the permit to be renewed for another five years.
Different time limits can apply in certain circumstances:
Six years if the plant is certified under environmental management system standard ISO 14001.
Eight years if the plant is recorded under Regulation (EC) 761/2001 allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS).
Ten years for plants that intensively rear poultry or pigs (that is, plants with more than 40,000 poultry, 2,000 pigs that weigh over 30 kg, or 750 sows).
The competent authority must re-examine the permit before its expiry where:
The relevant environmental authorities have requested this.
Pollution caused by the plant makes it necessary to revise the air emission limit values or to apply further ones.
The best available techniques (BAT) used by the relevant plant have changed substantially, allowing a significant reduction of air emissions without excessive costs.
It is considered necessary for safety reasons.
New national or EU legislation requires it.
An IPPC permit can be transferred from one operator to another. The transfer must be notified to the competent authority by both the transferor and the transferee within 30 days. Self declaration is sufficient.
The competent authority has the following remedies at its disposal on the failure of the operator to comply with the terms of the IPPC permit or where the plant is operated without an IPPC permit:
An order to eliminate the irregularity within a certain period.
An order to eliminate the irregularity within a certain period and, simultaneously, to suspend the authorised activity for a certain period of time, if there is a danger for the environment.
Revocation of the IPPC permit and shutting down of the plant if either:
the irregularity has not been eliminated within the given period of time; or
there are repeated violations causing risk and danger for the environment. If those irregularities put the environment at risk, or endanger public health, the competent authority can ask the competent major (that is, the head of the municipalities) to adopt urgent measures to guarantee the local community's safety.
The competent authority must decide on the most appropriate remedy on the basis of the seriousness of the violation.
The exercise of the activities set out in Annex VIII without an IPPC permit, or after its suspension or revocation, is punishable with the criminal sanction of imprisonment for up to one year or a fine from EUR2,500 (as at 1 August 2011, US$1 was about EUR0.7) to EUR26,000.
An infringement of the conditions of the IPPC permit is subject to a fine from EUR5,000 to EUR26,000.
The exercise of the activity after the shut-down ordered by the public authority is punishable with imprisonment from six months to two years or with a fine from EUR5,000 to EUR52,000.
Other pecuniary sanctions apply for a failure to comply with the operators' duty to communicate data relating to control of emissions to the competent authorities.
The pecuniary sanctions for plants of national interest are inflicted by prefects (that is, certain state representative in particular provinces). In other cases, the competent authority inflicts the pecuniary sanctions.
Part III of the Environmental Code regulates the protection of water from pollution. Generally, each waste water discharge must be previously authorised. Each region determines the competent authorities to issue the authorisation for waste water discharges. The authorisation for waste water discharges is valid for four years, except where the authorisation is included in the IPPC permit. The operator can file an application to renew the authorisation for waste water one year before its expiry.
Waste water discharges into the soil and underground water are prohibited, except in certain specified circumstances and, in all cases, subject to prior authorisation. Direct waste water discharges into surface water are permitted, subject to certain conditions and limit values. Waste water discharges into the public sewerage are always permitted, subject to certain conditions, but must, in any event, be authorised by the competent authorities. Discharge of meteoric waste water requires authorisation only if the region expressly requires this.
The region can also adopt additional rules, subject to the provisions in the Environmental Code.
Compensation for water pollution is possible. Therefore, any interested third party can file a claim in the competent civil court against the polluter, to obtain damages to restore the situation. In addition, the Ministry of Environment and Protection of Land and Sea can order the polluter to adopt preventive measures to avoid danger to the environment, and file a claim for:
The restoration of the damaged resource to its original state.
Compensation, if water pollution caused damage to water, soil or natural habitats.
Criminal sanctions are applicable to waste water discharges without the relevant authorisations, when the authorisations are suspended or revoked, or in violation of the limit values set out in the Environmental Code, as modified by Law No. 36 of 25 February 2010.
Violation of the waste water discharge regulation is an administrative offence and is punishable with a fine of up to EUR120,000.
Part V of the Environmental Code requires the authorisation of air emissions before the installation, substantial modification, or transfer from one place to another of plants discharging air emissions. The competent authority to issue the authorisation is the relevant region or other public authority indicated by the regional law. The Ministry of Environment and Protection of Land and Sea issues authorisations for offshore platforms. If the plant is also subject to the issuance of an IPPC permit, the authorisation for air emissions is included in the permit. The permit is valid for 15 years, and may be renewed on application.
Failure to comply with the air emissions regime is prohibited. In addition, the following are criminal offences:
The installation or the execution of a substantial modification in absence of an air emissions authorisation or the operation of the activity after the suspension or revocation of the authorisation.
Exceeding air emission limit values.
Compensation for air pollution is possible. Therefore, any interested third party can file a claim in the competent civil court against the polluter, to obtain damages to restore the situation. In addition, the Ministry of Environment and Protection of Land and Sea can order the polluter to adopt preventive measures to avoid danger to the environment, and file a claim for:
The restoration of the damaged resource to its original state.
Compensation, if air emissions caused damage to water, soil or natural habitats.
The competent authority has the following remedies at its disposal on the failure of the operator to comply with the air emissions regime:
An order to eliminate the irregularity within a certain period.
An order to eliminate the irregularity within a certain period and, simultaneously, suspending the authorised activity for a certain period of time where there is a danger for the environment.
Revocation of the air emissions authorisation, and shutting down the plant, if either:
the irregularity has not been eliminated within the given period of time; or
there are repeated violations causing risk and danger for the environment. If such irregularities put at risk or endanger the public health, the competent authority can ask the competent major (that is, the head of the municipalities) to adopt urgent measures to guarantee the local community's safety.
The installation or the execution of a substantial modification in absence of the air emissions authorisation or the operation of the activity after the suspension or revocation of the authorisation is punishable with the criminal sanctions of imprisonment of up to two years or a fine of up to EUR1,032.
Exceeding air emission limit values is punishable with the criminal sanction of imprisonment of up to one year or a fine of up to EUR1,032.
Under Legislative Decree No. 28 of 3 March 2011, Italy implemented Directive 2009/28/EC as part of the EU climate change and energy package, to meet the EU "20-20-20" targets (that is, a series of demanding climate and energy targets to be met by 2020) (see Question 1, Key legislation).
Article 3 sets out the national target of the total share of energy from renewable sources on gross final consumption to be met by 2020: 17%. Within that target, the share of energy from renewable sources in the transport sector must amount to at least 10% of final energy consumption in the sector by 2020.
The Legislative Decree also contains provisions concerning increasing energy efficiency through, among others, a system of public incentives for energy efficiency measures. In particular, Article 11 provides that projects for new buildings and the significant renovation of buildings must provide the use of renewable sources for the consumption of energy, heating, and air conditioning, under certain percentages set out in Annex 3. The fulfilment of those obligations is a condition for obtaining the building permit.
Italy is a party to both the UNFCCC and the Kyoto Protocol.
To meet the emission limitation requirements under UNFCC and the Kyoto Protocol, Italy has been implementing policies and measures expected to have positive effects on the reduction of greenhouse gas emissions. The Inter-Ministerial Committee for Economic Planning (CIPE) has implemented climate change policies through the approval of a national programme for greenhouse gases emissions reduction.
Further, Italy has implemented a number of measures in the energy efficiency sector and in the promotion of the production of energy from renewable sources, with the aim of reducing greenhouse gases emissions. For example, Legislative Decree No. 28 of 3 March 2011 governs, among others, the grant of incentives for the production of thermal energy, for small works to increase energy efficiency, and white certificates (that is, documents certifying that a certain reduction of energy consumption has been attained) for other works that meet energy efficiency qualifications.
Decree 5 May 2011 of the Ministry of Economic Development promotes the production of electricity through photovoltaic sources (that is, through solar radiation) on the basis of feed-in tariffs (payments to renewable energy generators for renewable energy that they produce) granted, under specific conditions, for 20 years in relation to the nominal power and the type of the installation.
Italy has implemented Directive 2003/87/EC establishing the emission trading scheme within the EU (Emissions Trading Directive) through Legislative Decree No. 216 of 4 April 2006. A National Committee within the Ministry of Environment implements the Emissions Trading Directive and Kyoto Protocol project activities.
The framework can be summarised as follows (Legislative Decree No. 216 of 4 April 2006, as subsequently modified):
From 1 January 2005, the plants that fall within the scope of the Legislative Decree (that is, plants producing greenhouse gas emissions and whose activities are in specific sectors such as energy, iron or steel production and processing, wood and paper industry and the mineral industry) cannot produce CO2 emission and cannot continue to operate without a specific authorisation.
The operators must surrender a number of emission quotas each year equal to the greenhouse gases emitted during the year.
The Ministry of Environment and the Ministry of Productive Activities take the decision on the number of emission quotas to assign to any operator in compliance with the relevant national plan approved on the basis of the National Committee's proposals. The National Committee grants emission quotas to the operator, on the basis of the decision taken by the Ministry of Environment and the Ministry of Productive Activities.
The decision to grant emission quotas is issued once in five years (that is, for the periods 2008 to 2012, 2013 to 2018 and so on).
The emissions actually issued comply with the provisions set out by the National Committee and communicated on the basis of the provisions set out in DEC/RAS/115/2006 and certified by a qualified entity.
The operators can trade the emission quotas (EUAs) and credits (CERs and ERUs) through either:
Bilateral transactions between companies.
Trading transactions by brokers or banks. Each trading transaction must be duly registered in Italy with the Greenhouse Gas Registry for Emissions Trading Arrangements (GRETA).
The projects that are subject to the EIA procedure are those that are deemed to produce significant and negative effects on the environment, listed in Annexes II and III to Part II of the Environmental Code.
Certain projects with significant effects on the environment require an EIA (Part II, Environmental Code). The EIA is carried out by either:
The Ministry of Environment and Protection of Land and Sea for projects of national interest listed in Annex II of the Environmental Code.
Each interested region (or body designated by it) for other projects.
Other minor projects are subject to the environmental pre-screening procedure carried out by the relevant region.
Specific provisions on competence and participation in the procedure apply to projects with significant effects in more than one region or in another member state.
The application for the EIA must be filed before, or simultaneously with, the start of the applications for other authorisations. The EIA can include all necessary environmental authorisations, including the IPPC permit if the procedure is successfully carried out (see Question 5).
Authorisations or approvals issued without an EIA, where required, can be annulled and the competent authority can order the suspension of the activity and the restoration of the site to its previous condition.
Part IV of the Environmental Code sets out the regulatory regime for the production, storage, transfer and disposal of waste. These activities require a specific authorisation, except if the activity is not significant considering the quantity or the nature of the relevant waste.
Different regimes apply to:
Town waste (that is, household waste and non-hazardous waste assimilated to town waste).
Special waste (including waste from agriculture, industrial trading, healthcare, building, productive activities, cars, equipment and fuel).
Each region divides its territory in areas to optimise the management of town waste. Special waste can be disposed of as follows:
Self-disposal.
Delivery to duly authorised third parties.
Delivery to the town waste manager under specific agreements.
Export out of Italy under specific conditions.
The region or province (depending on regional regulations and the nature of the infrastructure) has the authority to grant the authorisations to build and operate plants for the storage, recovery and disposal of waste. Each authorisation contains specific conditions and requires bank guarantees. Under certain conditions, operators can benefit from simplified procedures for the self-disposal of non-hazardous waste and waste recovery.
The abandonment and uncontrolled disposal of waste on the ground are forbidden. It is also forbidden to introduce any waste, solid or liquid, into surface or underground waters.
Operators in the waste sector must be recorded in the Albo Nazionale dei Gestori Ambientali. The record is subject to evidence of technical, financial and ethical standards, as well as to the issue of a bank guarantee.
There are specific requirements for the construction and operation of landfills, including the following (Legislative Decree 36/2003):
Qualified personnel for the management of landfills.
Surveillance and control programmes.
Bank guarantees for the performance of relevant conditions.
Underground water monitoring.
Land management plan even if the landfill is no longer operational.
Retailers, installers, and operators of after-sale service of electrical and electronic equipment must (Legislative Decree No. 151 of 25 July 2005 and Ministerial Decree No. 65 of 8 March 2010):
Carry out the collection of waste produced from domestic and professional use of that equipment.
Transport it to special collection centres to undertake special treatment and recovery.
Producers and retailers must inform customers about the:
Prohibition on disposing of waste from electrical and electronic equipment in the same way as town waste.
Possibility of handing over that waste to retailers when a new product is purchased.
Special collection centres where that waste is treated.
Sanctions for unlawful disposal of this kind of waste.
There are criminal penalties for the criminal offence of unlawful trade of waste. In particular, the organised activity of unlawful trade of waste aimed at gaining profit is punishable by imprisonment from one to six years. In the case of highly radioactive waste, the imprisonment is from three to eight years.
Asbestos and asbestos-containing goods cannot be mined, used, traded or produced (Law No. 257 of 27 March 1992, as amended).
Interventions on damaged asbestos are regulated by both:
Law No. 257/1992.
Ministerial Decree of 6 September 1994, as amended. The Decree:
provides that asbestos is dangerous if there is the possibility that asbestos fibres are dispersed into the air and are inhaled by persons; and
specifies that the assessment of the dangerousness of the asbestos is carried out by an environmental monitoring survey on the fibres dispersed into the air and on the asbestos conditions (that is, the type of the asbestos, circumstances that can determine a future damage and circumstances that could determine the future dispersion of asbestos fibres into the air) (Article 2).
The level of asbestos in the workplace cannot exceed the threshold of 0.1 fibres for any cubic centimetre of air on average in eight hours (Legislative Decree 81/2008). The employer must ensure the threshold is complied with. The local health authorities monitor compliance with the threshold and record all buildings containing asbestos in a specific register.
The removal of asbestos is required only if the results of the diagnostic process establish that the removal is needed (paragraph 3, Article 12, Law No. 257/1992). The costs of the removal are borne by the owner of the building.
The replacement of asbestos is the last measure to be adopted and is required only if other technical measures (for example, fixing measures) are not suitable to avoid the dispersion of asbestos fibres into the air.
Asbestos and asbestos-containing goods cannot be mined, used, traded or produced (see above, Prohibited activities). The local health authorities monitor compliance with the threshold for acceptable level of asbestos in the workplace (see above, Main obligations).
A breach of the law concerning asbestos is punishable by a fine and/or imprisonment, in addition to the civil liability for damage caused to employees or third parties.
Part IV of the Environmental Code contains a specific regime for contaminated land. The regime requires the polluter to:
Clean up the contaminated sites according to a specific procedure and on the basis of a clean-up project approved by the competent authorities.
Adopt safety measures to avoid the migration of the environmental contamination.
The main enforcing authority under the contaminated land regime is the relevant local authority (that is, the province). The Ministry of Environment and Protection of Land and Sea is the enforcing authority for certain contaminated lands identified as sites of national interest.
The obligation to clean up the site and to adopt safety measures arises if the site is either:
In danger of contamination.
Contaminated (that is, the site contains substances exceeding certain thresholds provided in the Ministerial Decree No. 471/1999).
The competent local authority can order an investigation of a specific site. In addition, anyone who becomes aware of the site contamination must communicate it to the public authority within a certain time. Failure to comply with this provision is a criminal offence.
Contamination of land and non-compliance with a clean-up order issued by the competent authority are punishable by a fine up to EUR52,000 and/or imprisonment up to two years (particularly if the contamination derives from hazardous substances).
The polluter is liable for carrying out, or paying for, the environmental investigation and clean-up. The polluting party is fully liable for the remediation even if the pollution was involuntary.
The owner, who is not the polluter of the contaminated site, is not obliged to clean up. However, the site is subject to a clean-up burden. Therefore, if the polluter is different from the owner and cannot be identified, the clean-up of the site can be carried out either by the local authorities or by the owner. However, even if the local authority cleans up the site, the owner must indemnify the authority for the related costs within the limit of the market value of the site. The additional costs of clean-up can also be recovered by the relevant authority through judicial sale of the land, which can be executed irrespective of any detriment to third parties not liable for the pollution.
The polluter is liable for carrying out, or paying for, the environmental investigation and clean-up (see above, Liable party).
There is no way for the polluter to limit his liability for carrying out, or paying for, the environmental investigation and clean-up of the contaminated site.
The local authority carries out the clean-up of the site if the polluter cannot be identified or the owner of the site does not clean-up on his own initiative. In that case, if the local authority cannot obtain reimbursement of all costs from the polluter, the owner must indemnify the local authority within the limit of the market value of the site (see above, Owner/occupier liability).
A lender can become liable for contaminated land only if he is the landowner.
In relation to leasing transactions, where the lender is the owner of the land and the operator is only the user of the relevant plant, the lender is considered as the owner but not the polluter of a contaminated site. Therefore, he will not be liable for contaminated land, unless the polluter does not clean-up or cannot be identified and the local authority cleans up the site (see Question 15, Owner/occupier liability).
Standard contractual terms of leasing provide for insurance policies and/or bank guarantees to indemnify the lenders for all material damages that have occurred on the land and for any liabilities arising out of a breach of contract. This usually includes the obligation to comply with all the applicable environmental provisions.
Any individual who suffers damage due to pollution (including the movement of contamination) can bring legal action against the polluter, owner or occupier to obtain the payment of either the:
Costs to carry out the clean-up of its site.
Compensation for damages suffered.
For movement of contamination, the owner (who is not the polluter) of the contaminated site can, in certain circumstances, be liable too.
In an asset sale, the buyer becomes the owner of the site. If the site is contaminated, the buyer will have subsidiary liability for the remediation of the property (see Question 15, Owner/occupier liability).
In a share sale, the buyer does not become the direct owner of the land and, therefore, does not have direct subsidiary liability. However, the target company is liable for all the pollution it caused in the past, including pollution that might have occurred on land that no longer belongs to the target company.
The liabilities of the target company are not transferred to the buyer as the new parent company, except if either:
A parent company that is a sole shareholder breaches certain requirements of disclosure.
Undue influence is exercised by the parent company over the subsidiary for the benefit of the corporate group, as set out by the Civil Code.
The seller is liable for clean-up of any pollution if he is the polluter. In addition, the seller may be considered liable if he is unable to prove that he was not the polluter.
The seller is not liable for events in relation to the target company before the sale, except for:
Any contractual representation and warranties in the sale and purchase agreement.
Any liability for having exercised undue influence over the target company. In practice, this is difficult to prove.
The seller is not expressly required to disclose environmental information to the buyer, except if the seller has expressly undertaken to disclose it. However, anyone who becomes aware of the contamination must report it to the public authority (Environmental Code).
There is no express requirement for the seller to disclose environmental information to the buyer.
Environmental due diligence is very common in all commercial transactions concerning the transfer of industrial activities or significant pieces of land.
Environmental due diligence usually covers any:
Authorisations.
Challenges.
Claims of the regulatory authorities.
Court proceedings for breaches of criminal law.
Notices of pollution in the land or water and requirements of clean-up.
Surveys on the presence of asbestos.
Environmental assessments usually involve:
The identification of the applicable environmental provisions.
The review of the relevant necessary environmental authorisations and of the duties deriving from the applicable environmental laws.
Compliance of the obtained authorisations with the applicable laws.
In addition, the environmental assessment (based primarily on the analysis of corporate documents, projects and documents of the authorisation procedure) verifies:
The company's compliance with the prescriptions contained in the authorisations.
Whether there are any existing or potential environmental liabilities.
The buyer usually engages an environmental consultant to carry out the due diligence. The engagement letter for the environmental consultant usually sets out the expected reliability of the information contained in the due diligence report.
The environmental warranties typically granted by a seller in an asset sale are that:
The target business has all of the environmental permits necessary to operate and those permits are not subject to review or renewal for a certain period of time.
The environmental permits and the current environmental regulation will not require the company to make adjustments or modifications to the plants for a certain period of time.
The target business has complied in all material respects with all applicable environmental laws and permits.
The business is not the subject of any environmental proceedings, claims, investigations or complaints by the regulatory authorities or by private entities.
So far as the seller is aware, there is no contamination or pollution present on any of the target company's properties to be transferred.
The seller has disclosed all environmental information relating to the business of the properties to be transferred.
In a share sale, the environmental warranties are substantially the same as in an asset sale, except that the warranties also cover the pre-acquisition period and the activities performed by the company during that period.
Time limits and financial caps on environmental warranties and indemnities are commonly used. They are normally determined at the same time as the sale price.
The warranties usually last from one to five years.
The competent regulatory authorities hold public registers of information relating to emissions of plants subject to IPPC permits. The National Agency for the Protection of the Environment and the Technical Services (APAT) keeps the Register of Waste, which is also available to the public. A list of areas subject to clean-up work is maintained by each region and this must be reflected in the town plan issued by each municipality. These registers are available for inspection by any interested party.
The relevant registers are available for inspection by any interested party (see above, Public registers). In addition, environmental information held by each regulatory authority must be available to the public, to the extent it does not concern trade secrets or confidential industrial information such as data concerning tax forms, IP rights or personal data (Legislative Decree 195/2005 about the public access to environmental information). This exception cannot exclude the availability of information concerning emissions to the environment.
The registers can be consulted in the offices of the relevant authorities.
Environmental auditing is not compulsory. However, environmental auditing carried out under the environmental management system standard ISO 14001 and recorded in the European Eco-Management and Audit Scheme (EMAS) system may provide certain benefits, for example:
It may simplify the renewal of authorisations, such as the IPPC permit.
Some of the guarantees required for the disposal of waste may be reduced.
Renewal of the authorisation for operation of a waste plant may be replaced by a self-certification for a company recorded under the EMAS system.
All documents are submitted to the authority that issued the IPPC permit and are available for inspection at the offices of that authority.
Reporting requirements are not compulsory, but voluntary environmental auditing may provide certain benefits (see above, Environmental auditing).
Usually each authorisation contains the obligation to file all information with the public authorities concerning the emissions of the plant.
All incidents, together with the name of the relevant operator, must be immediately reported by the responsible entity to the municipality, province, region and Ministry of Environment.
The powers of the various inspecting authorities are different, but they all have the power to have access to the site, carry out technical verifications and collect samples. They can also interview employees informally, to acquire information (which cannot be used in a potential subsequent trial).
Pollution insurance policies are available in Italy. These policies do not usually cover environmental damage to natural resources, but only cover:
Personal injury.
Material damage to property.
Damage from the closure or suspension of agricultural, commercial or industrial activities.
Damage arising generally from not being able to use assets sited in the polluted area.
Environmental insurance can also be obtained for recovery of costs of remediation, but this coverage is usually limited to remediation in a specific area caused by a sudden, unforeseen and involuntary event of pollution.
The insurance market covering pollution risks is expanding. In practice, however, the riskier the industrial activity, the more difficult it is to obtain environmental insurance.
The main environmental taxes currently in force are the:
Tax on emissions of sulphuric anhydride and nitrogen oxide. It is paid by the management of big plants of combustion as listed in the Decree of President of the Republic No. 416/2001. Since 1 January 2008 the tax has been, for sulphuric anhydride and nitrogen oxide, respectively, EUR106 and EUR209 per tonne of emission, and is paid in four instalments per year.
Tax on waste disposal in landfills. It is a regional tax aimed at reducing the production of waste and improving recycling.
In relation to the tariff for waste management, the tariff must not be considered as a tax but as a consideration for the service (Article 238, Environmental Code).
A proposal for reform was filed in Parliament in March 2011 concerning the amendment of Annexes II and III to Part II of the Environmental Code. In particular, the reform aims at assigning the responsibility for conducting the EIA procedure to offshore wind farms to the coastal region facing the site of the project (currently, the Ministry of Environment and Protection of Land and Sea has authority for those projects). Parliament is yet to approve this bill.
Main activities. The parliament is composed of two chambers (Camera dei Deputati e Senato della Repubblica) and acts as a regulator.
Main activities. This Ministry is responsible for the protection of the environment, in relation to land, sea, natural habitats, waste, climate change, sustainable development and energy. It can issue opinions concerning EIAs, together with the Ministry of Cultural Goods. It can also appoint the members of the National Committee for the issuance of binding opinions on EIAs and recognising NGOs.
Main activities. This Ministry is responsible for the protection of the cultural patrimony of Italy. In particular, it can issue its opinion on EIAs and agree to the issuance of an EIA decree, together with the Ministry of Environment and Protection of Land and Sea.
T +39 02 763 281
F +39 02 763 12616
E g.cassar@macchi-gangemi.com
W www.macchi-gangemi.com
Qualified. Milan, 1992
Areas of practice. Public and administrative law matters regarding any environmental issues; real estate and project financing transactions; and judicial assistance on environmental issues relating to the construction of energy project and contaminated sites.
Recent transactions
T +39 02 763 281
F +39 02 763 12616
E a.leonforte@macchi-gangemi.com
W www.macchi-gangemi.com
Qualified. Palermo, 2006
Areas of practice. Public and administrative matters regarding any environmental issues.
Recent transactions.
Legal assistance to Georgia Pacific EMEA concerning disposal of a biodegradable paper product and about its qualification as waste packaging (March 2011).
Legal assistance to Georgia Pacific EMEA concerning drafting of the rainwater management plan to be filed with the competent authority for one of its industrial plants (March 2011).
Legal assistance to Georgia Pacific EMEA concerning the clean-up procedure of contaminated soil concerning one of its industrial plants (July 2010/January 2011).
