Lex battery plant: authorities can no longer fine pollutant factories in Hungary?

A government decree issued on 21 September changes the environmental rules for companies in Hungary. As a result, there may now be plants – battery plants, among others – that cannot be fined and closed down by the environmental authority. Some selected firms may thus find themselves in a position where they are technically impossible to sanction. After the news hit the press, the Energy Ministry issued a clarification.

According to Telex, the new regulation creates a new legal category: the environmental authority contract. This would allow even the most polluting companies to escape penalties by signing a contract.

“Environmental authority contract”

Officially, “during an emergency, the environmental authority may conclude an environmental authority contract with the client instead of taking a decision to remedy the breach. In the environmental authority contract, the customer undertakes to cease the infringing conduct and to bring its conduct into compliance with environmental legislation and the requirements of the permit issued by the environmental authority in the manner specified in the environmental authority contract.”

No clarification in the beginning

In other words, if a company fails to comply with environmental rules, the authority will be able to conclude a contract with the company instead of a penalty. In the contract, the company agrees to remedy the non-compliance. The regulation does not specify the type of establishment with which such a contract may be concluded. However, when it was published, many people concluded that it was designed specially for battery factories that continually break the rules in Hungary.

No real means to regulate battery plants

According to Telex, the authorities have not had much leverage to regulate the consistently non-compliant battery factories in Hungary. It was common practice to fine companies with a turnover of several hundred billion forints to HUF 2-3 million. Only the battery-processing plant in Bátonyterenye was recently temporarily closed down after they continued to break all the rules. Several workers even died at the company’s other plant in Szigetszentmiklós.

According to Dalma Dedák, an environmental policy expert at WWF Hungary, the regulation “means that there will be customers who will not receive any penalties, even if they have seriously polluting activities”.

On Friday, Benedek Jávor, a politician from the opposition Párbeszéd (Dialogue for Hungary) party, drew attention to the amendment. According to him, the battery industry in Hungary has now become a “state within a state”, where permits are scandalously permissive, controls are superficial and fines are symbolic. Jávor is therefore turning to the European Commission.

Battery plant, metallurgical plants? Clarification

After the news of the amendment hit the press, the Ministry of Energy said that the regulation would only apply to metallurgical plants. “The government’s intention is that this rule will only apply to operating smelters. Not battery factories. A clarification on this will be published in the Gazette next week,” Telex quoted the ministry as saying.

However, according to Benedek Jávor, “the Ministry is not telling the truth, the regulation was originally intended to cover a much wider range of industries, including battery factories, but as protests erupted, they decided to back out of the proposal. As a way out, they came up with what they hoped would be a less prestige-losing solution, radically narrowing the scope of those affected – effectively nullifying the legislation without having to repeal it.”

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