Environmental law and practice in Austria: overview
A Q&A guide to environment law in Austria. This Q&A provides a high level overview of environmental law in Austria 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).
This Q&A is part of the PLC multi-jurisdictional guide to environment. For a full list of jurisdictional Q&As visit www.practicallaw.com/environment-mjg.
Environmental regulatory framework
Austria is a federal state. Government responsibilities are shared by the:
Local authorities (municipalities).
Under the Federal Constitution (Bundes-Verfassungsgesetz) (Constitution), the governmental responsibilities for environmental issues are divided between the federal state and the provinces. While the federal state is exclusively responsible for certain environmental issues (for example, construction and maintenance of waterways), other issues (for example, nature conservation) rest entirely with the provinces. In certain areas (for example, waste management and forestry), the federal state acts as legislator while the provinces are responsible for administering environmental law adopted on the federal level (indirect federal administration) (mittelbare Bundesverwaltung). Recently, the EU has become the main source for environmental law. Therefore, EU Regulations and Directives relating to environmental issues must also be considered.
The main Austrian environmental regulations include the:
Environmental Impact Assessment Act 2000 (EIA Act).
Federal Waste Management Act 2002 (Waste Management Act).
Water Act (and more than 35 regulations on water).
Clean-up of Contaminated Sites Law.
Directive on Funding Clean-Up of Contaminated Sites 2008.
Air Pollution Impact Act.
Federal Act on a System for Trading Allowances.
Industrial Accident Ordinance.
Environmental Subsidies Act.
Federal Environmental Liability Act (Environmental Liability Act).
The government and the public take environmental issues very seriously.
The responsibility for enforcement lies mainly with the nine provinces, where most laws are enforced by district authorities. Generally, administrative fines are imposed for non-compliance with environmental law. However, severe breaches of environmental law can result in the withdrawal of a plant permit by the competent authority (see Question 5). Further, the competent authority can:
Order the temporary or final closure of a plant.
Inspect a plant for environmental compliance purposes.
Impose safety precautions and coercive measures (for example, closing down machines and confiscating goods).
Environmental interests are broadly represented by different NGOs (for an overview of active NGOs, see www.umweltdachverband.at/mitglieder). The influence of NGOs has been increasing steadily, particularly since they have obtained the right to participate in environmental decision-making (see Question 30).
Generally, NGOs can:
Comment on certain plans and programmes relating to the environment.
Participate in certain administrative (environmental) proceedings.
As legal parties in certain administrative (environmental) proceedings, be heard by the competent authorities and appeal against the authorities' decisions. (The participation of NGOs can cause substantial delays in approval procedures.)
In addition to NGOs, citizens' groups (Bürgerinitiativen) can participate as legal parties in the environmental impact assessment proceedings. Citizens' groups usually concentrate on single projects relevant to the environment.
Integrated/separate permitting regime
As pollution prevention and control are subject to a considerable number of laws and regulations (see Question 1), there is no integrated approach to regulating emissions to the environment. The only exception is set out in the EIA Act (see Question 11).
Partially consolidated permitting procedures are provided under the Trade Act and the Federal Waste Management Act. Under these laws, most of the environmental issues regulated on a federal level are dealt with in a single consolidated plant permit.
Permits and regulator
There is no integrated permitting regime controlling the environmental impact of industrial installations and plants (see Question 4).
A plant permit is required if the activities of the plant may (Industrial Code):
Endanger the lives, health or property of the plant's neighbours or employees.
Cause inconvenience to neighbours due to noise, dust, smoke or other emissions.
Cause inconvenience to public institutions such as churches, schools and hospitals.
Endanger quality of water.
The competent authority generally imposes numerous conditions (for example, emission limits for air or water pollution), which the operator must meet while operating the plant.
Length of permit
Subject to a few exceptions (for example, permits under the Water Act), plant permits are issued for an unlimited period of time. However, competent authorities can review plant permits ex officio at any time. Particularly in response to the findings of a permit review, the competent authority can amend permit conditions if the compliance assessment reveals a lack of environmental protection.
The competent authorities must (Integrated Pollution Prevention Control (IPPC) Rules):
Inspect installations regularly.
Ensure that the permit conditions comply with the corresponding best available techniques (BAT) standards.
Restrictions on transfer
Environmental permits are not generally transferable. However, as environmental permits are granted for the construction and operation of the plant itself, a new operator or owner of the plant does not have to apply for a new permit.
The penalties for non-compliance include administrative fines or compulsory measures such as plant closure.
Permits and regulator
Water is mainly protected under the Water Act and corresponding regulations on waste water disposal. Each individual must ensure that his activities or omissions do not cause water contamination (Water Act and Waste Management Act). The competent authority can require responsible parties to undertake corrective measures based on a strict liability standard. Depending on the type of project, the competent authority may be the District Administrative Authority, the Governor or the respective Ministry.
The Water Act differentiates between:
Publicly owned water. Publicly owned water can be freely used by everyone, provided the use does not exceed general use (for example, bathing and use of water as an ice rink). If the intended use exceeds general use (for example, the operation of a plant that is linked to a specific body of water), a water use permit from a regulatory authority is required.
Privately owned water. The position is the same as for publicly owned water. However, the use of privately owned water is generally reserved to the landowner and, therefore, the use of private water requires the landowner's consent.
In principle, the issuance of a water use permit requires that no significant impairment of public interests occurs through the water use. Public interests are listed in section 105 of the Water Act. The application of the BAT is a precondition to obtaining a water use permit. In relation to waste water disposal, relevant emission limits, determined by specific regulations, must not be exceeded.
Directive 2000/60/EC establishing a framework for Community action in the field of water policy (Water Framework Directive) has been implemented through the Water Act, which has adopted most of the Water Framework Directive's provisions concerning the protection and improvement of waters.
The Water Act prohibits the following:
Endangering water bodies.
Soil and groundwater contamination.
Responsibility for clean-up is as follows:
Endangering water bodies. The polluter is primarily responsible. The polluter is the person who is in charge of the assets or activities, or both, which caused the threat to the water. The competent authority can take preventive measures on its own if either:
the polluter fails to take proper measures; or
imminent danger exists (Gefahr in Verzug).
The polluter must reimburse the authority for the costs incurred.
If the polluter is unknown or cannot be compelled to take proper measures to prevent water damage, the competent authority can revert to the property owner provided the property owner has either:
tolerated or agreed to the activity which endangers the water body; or
failed to take reasonable preventive measures.
The same applies to the property owner's legal successor, provided that the successor knew or should have known about the endangering activity. The liability of the property owner and its legal successor for endangering activities conducted before 1 July 1990 can be limited under certain conditions.
Soil and groundwater contamination. Liability in connection with soil and groundwater contamination caused by non-compliance with the Water Act means that the polluter must either:
take proper measures to prevent further damage (safeguard measures);
take remediation measures (clean-up);
re-build installations erected without the required water use permit.
The competent authority can issue respective formal orders to the polluter ex officio (Sanierungsaufträge). In addition, everyone affected by the soil and/or groundwater pollution can file an application to issue formal orders to the polluter.
If the polluter does not comply, the authority can take proper remediation measures on its own. The polluter must then reimburse the authority.
In principle, the polluter who caused the soil or groundwater contamination must remedy the contamination. However, if the polluter is unknown or cannot be obliged to take proper remediation measures, the authority can request the property owner to take remediation measures and/or to pay the costs for the measures taken by the authority, provided the owner:
has tolerated or agreed to the contaminating activities; or
failed to take proper measures to prevent the contamination.
The same applies to the legal successor of the property owner, provided both:
the contamination was caused by waste disposal; and
the successor knew or ought to have known of the disposal.
The liability of the property owner and its legal successor can be limited under certain conditions, if the contaminating activities occurred before 1 July 1990.
The Environmental Liability Act prohibits direct or indirect damage to the aquatic environment and imminent threat of damage to the aquatic environment resulting from occupational activities, if a causal link can be established between the damage and the activity.
If there is an imminent threat of damage to the aquatic environment, the competent authority either:
Requires the operator (the potential polluter) to take the necessary preventive measures.
Takes the necessary measures itself and recover the costs incurred.
If damage to the aquatic environment has occurred, the competent authority requires the operator to take the necessary restorative measures, or takes these measures itself and recover the costs incurred. If several instances of environmental damage have occurred, the competent authority can determine the order of priority according to which they must be remedied.
The Environmental Liability Act aims at restoring the environment to its state before the damage.
See above, Clean-up/compensation.
Permits and regulator
Permit requirements are contained in several statutes (for example, the EIA Act, the Trade Act and the Air Pollution Act for Boiler Facilities). Depending on the type of project, the competent authority is the District Administrative Authority, the governor or the respective Ministry.
The Air Pollution Impact Act sets out mandatory limit values and targets in relation to certain air pollutants. Once these limit values are exceeded in an area, the area is officially declared as heavily affected by air pollution (Luftsanierungsgebiete). The competent authority must implement air pollution reduction measures to meet the limits or targets of the Air Pollution Impact Act for these areas in the long term. These measures are compiled in air quality programmes.
The competent authorities must consider the limit values and targets set out in the Air Pollution Impact Act in the plant permit procedures (see Question 5) and EIA permitting proceedings (see Question 11).
There are no particular provisions on requirements for clean-up of air pollution, however, operators have to take measures to prevent and control their industrial emissions.
The enforcement of air emission legislation follows general administrative procedure rules. The competent authorities generally impose administrative fines for non-compliance with the legal provisions. Severe offences may result in the withdrawal of plant permits by the competent authority. Further, the competent authority may order the temporary or final closure of the plant.
Climate change, renewable energy and energy efficiency
Under its obligations under the Kyoto Protocol and the EU agreements based on it, Austria has undertaken to reduce its greenhouse gas emissions by 13% from 1990 levels in the period from 2008 to 2012. In order to reach this goal, in 2002 Austria adopted a common Climate Strategy. After a thorough evaluation, the Climate Strategy was adapted in 2007. The Strategy mainly defines national measures for greenhouse gas reduction. The policies and measures aim to:
Increase efficiency in residential and commercial energy demand by promoting energy efficient construction of buildings.
Subsidise biomass and solar space heating system and thermal renovation of buildings.
In terms of energy supply, Austria has undertaken measures to increase the share of renewable energy sources in electricity production by promoting renewable energy projects such as wind power, biomass and solar projects.
In 2011, the federal government and the nine provinces agreed to adopt a Climate Mitigation Act which for the first time clearly identify rights and obligations to achieve greenhouse gas emission targets.
In addition to national measures, Austria uses the project-related flexible mechanisms of the Kyoto Protocol to reach the national greenhouse gas emission targets. The purchasing target of the Austrian Joint Implementation/Clean Development Mechanism Programme is 45 million tons of emission reductions in the time between 2008 and 2012.
According to the Austrian Energy Strategy adopted by the Ministries of Environment and Economy, by 2020 Austria will reduce its greenhouse gas emissions outside the EU Emissions Trading Scheme (ETS) by more than 16%, compared to 2005 levels. At the same time, the share of renewable energy sources will exceed 34%.
Parties to UNFCCC/Kyoto Protocol
On 29 May 1994 Austria became party to the UNFCCC. Since 16 February 2005, Austria has been an Annex I Party to the Kyoto Protocol.
A series of measures to reduce greenhouse gas emissions and reach the international reduction targets have already been implemented in various legislative acts and policies (see Question 8). However, for the first time, the Climate Mitigation Act sets maximum emission allowances for a number of emitting sectors and defines rights and obligations for the federal state and the nine provinces, respectively. The Act provides for binding negotiations on measures to be taken to achieve the maximum emissions reductions for each respective sector (see Question 30).
Emissions trading is heavily regulated. The applicable instruments include the:
Emission Allowances Act (as amended).
Allocation Ordinance 2008-2012.
Monitoring, Reporting and Verification Ordinance.
Act on Environmental Funding.
Set out both the:
rights and obligations of the owners and traders of emission allowances, operators subject to the Emission Allowances Act and administrators of the National Registry (nationale Registrierstelle).
Regulate the concerned interfaces and the (data) communication with the transaction logs of the EU (Community Independent Transaction Log (CITL)) and the UNFCCC (International Transaction Log (ITL)), which enables communication between the national registries.
The Umweltbundesamt GmbH has been mandated with the technical implementation of the National Registry, while the Emission Certificate Registry Austria GmbH (ECRA) is responsible for the operation of an electronic bookkeeping system for the administration of emission allowances. ECRA is essentially responsible for account holders. The Umweltbundesamt GmbH liaises with the competent authorities, the EU Commission, and the UNFCCC Secretariat. The National Registry is also the key instrument for monitoring compliance with emissions reduction commitments.
During the second emissions trading period (2008 to 2012), the government agreed to allocate an average of 30.33 million emission allowances to installations participating in the EU ETS per year. Under the national allocation plan and the Auctioning Ordinance, two million of these will be auctioned, accounting for 1.3% of the total number.
Austria was the first EU country to both:
Introduce the Guarantees of Origin (GoO), as required by Directive 2001/77/EC on the on the promotion of electricity from renewable energy sources in the internal electricity market (Renewable Electricity Directive).
Allow foreign certificates meeting the GoO requirements to be imported.
Environmental impact assessments
The types of activities subject to EIAs are listed in Annex 1 of the EIA Act. In particular, the following may require an assessment (EIA Act):
Waste management projects (for example, hazardous waste treatment plants).
Infrastructure projects (for example, constructions of roads or railways).
Energy plants (for example, oil and gas facilities).
Water projects (for example, hydropower plants).
Plants for chemical production.
Natural gas fracking.
In certain circumstances, modifications of plants may also require an EIA.
Permits and regulator
The operator of a plant listed in Annex 1 of the EIA Act must apply for an EIA permit (UVP-Genehmigung). The government of the province where the project is located can conduct the EIA. As the EIA Act provides a consolidated permit procedure, the EIA permit comprises all other permits required for the project, such as a plant permit under the Trade Act (see Questions 4 and 5), water use permit under the Water Act (see Question 6) and permit under nature protection law.
The main steps of the EIA proceeding are as follows:
The EIA permit application is filed, including the environmental impact statement.
The application and environmental impact statement are examined by the authority.
A public consultation period (six weeks).
Environmental impact expertise is prepared.
A public consultation on the environmental impact expertise (four weeks).
A hearing of parties.
The authority makes a final decision (UVP-Bescheid).
The environmental impact statement must be drafted by the applicant and contain a detailed description of the project, including the:
Information on the site, design and size of the project.
Physical characteristics of the project.
Outline of the production and processing procedures.
Data on expected residues and emissions.
Estimated increase in the concentration of pollutants.
The environmental impact expertise is drafted by the competent authority, taking into consideration the environmental impact statement and the results of the expert examinations.
The parties involved in the EIA proceedings include:
The project applicant.
Ombudsman for the environment.
The water management planning body.
Any neighbours that may be affected.
The relevant municipality.
On completion of the EIA proceeding, an EIA permit is granted if all permit requirements are met. The Independent Environmental Tribunal is competent to decide on appeals against EIA decisions.
If no EIA proceeding was conducted but an EIA permit is required under the EIA Act, any permits issued in other administrative proceedings can be revoked. Further, the operator may be fined if his plant is operated without the required EIA permit.
Permits and regulator
Waste management is regulated by:
The Waste Management Act.
The Waste Management Acts of the provinces.
A considerable number of ordinances.
Operating a waste treatment plant generally requires a permit issued by the competent authority (that is, the governor of the province or district authority). An EIA permit is required for certain waste treatment plants as specified in the EIA Act (see Question 11).
The definition of waste, and particularly when waste ceases to be waste, is a very complex and controversial legal issue. Waste includes all movable objects in the categories listed in the annex to the Waste Management Act (section 1, paragraph 3, Waste Management Act):
That the holder wishes to dispose of or has disposed of.
Whose collection, storage, transport and treatment as waste are required in the public interest.
Objects that require collection, storage, transport and treatment as waste (in the public interest) constitute waste (for example, several litres of oil stored in a leaking container), even if they have combined with the soil and have a negative impact on the environment. The public interest may also require that movable objects are collected, stored, transported and treated as waste, even if monetary consideration can be obtained. Objects do not cease to be waste just because they can be put on the market (for example, environmentally hazardous waste which can also be used as substitute fuel in industrial facilities).
The Waste Management Act:
Differentiates between non-hazardous and hazardous waste. (Hazardous waste is marked as such in the Waste Register Regulation.)
Sets out rules for the handling of hazardous and non-hazardous waste and provides special requirements for waste treatment plants.
Waste treatment activities cover both recovery and waste disposal operations.
Operators of landfills must provide financial security before commencing landfill operations (Ordinance on landfills). The financial security must cover all costs of the required closure and after-care measures.
Special rules for certain waste
Special obligations for waste treatment apply to (Waste Management Act):
Waste containing either:
polychlorinated biphenyls (PCB);
persistent organic pollutants.
Disposal of hazardous waste.
The Waste Treatment Regulation (Abfallbehandlungspflichtenverordnung) provides minimum requirements for the storage, collection and treatment of special kinds of waste, such as electronic waste, accumulators, PCB and asbestos.
The producers of electrical and electronic equipment must take used electrical and electronic equipment back free of charge (Ordinance on waste electrical and electronic equipment) (Elektroaltgeräteverordnung). Specific collection systems have been established.
Materials containing asbestos (see Question 13) may be qualified as hazardous waste under the Waste Management Act.
The enforcement of waste legislation follows general administrative procedure rules. The competent authorities generally impose administrative fines for non-compliance with the waste management regime. In relation to waste treatment plants, severe offences may result in the withdrawal of plant permits by the competent authority. Further, the competent authority may order the temporary or final closure of waste treatment plants.
The Ordinance on the Ban of Hazardous Chemicals (Chemikalienverbotsverordnung) generally prohibits the manufacture, use and placing on the market of products containing asbestos.
The Ordinance as to thresholds for cancer-causing substances used at work (Grenzwerteverordnung 2011) sets out several obligations for handling asbestos. For example, employers must:
Safeguard and protect the health of their employees.
Announce any intended work with asbestos to the competent Labour Inspection Authority (Arbeitsinspektorat). Exposure to, and working with, asbestos is only permitted as an exception, and under stringent conditions.
Inform employees about the health risks of handling asbestos.
Investigate and regularly monitor the concentration of asbestos in the workplace.
Permits and regulator
The use of asbestos containing products is prohibited; therefore, there are no permits to be obtained. However, the handling of old asbestos may only be performed in compliance with waste management provisions in particular with a view to disposal of asbestos waste in landfills.
Non-compliance with the provisions relating to the safeguarding and protection of employees can subject an employer to a fine. An employee's illness may lead to the employer's liability under tort law. In addition, the competent authority can close down premises which are contaminated with asbestos.
Regulator and legislation
There is no single regulator to deal with contaminated land. The competent authority is determined under the legislation applicable to the required clean-up measures. The district authority is the competent authority under the Clean-up of Contaminated Sites Act.
There is also no integrated regulatory regime for contaminated land. The obligations to clean up soil and groundwater pollution (see Question 6) are spread over a considerable number of laws and ordinances, such as the:
Clean-up of Contaminated Sites Act.
Waste Management Act.
Federal Environmental Liability Act and corresponding acts of the provinces.
Investigation and clean-up
A list of suspected contaminated sites (Verdachtsflächen) has been compiled under the Clean-up of Contaminated Sites Act. If a site appears to cause a significant environmental threat, it is scheduled in a list of sites and requires clean-up measures (Altlastenatlas). Once listed, the competent authority must determine whether a person can be held liable for the clean-up measures under the Water Act, the Waste Management Act or the Trade Act. If no person can be held liable, the federal government must conduct the necessary actions under to the Clean-up of Contaminated Sites Act.
The Clean-up of Contaminated Sites Act and the Austrian Directive on Funding Clean-Up of Contaminated Sites 2008 (Förderungsrichtlinien 2008 für die Altlastensanierung oder-sicherung) regulate the public funding of clean-up.
The penalties for non-compliance differ from case to case.
The main principle is the "polluter pays" principle, that is, whoever caused the pollution is primarily responsible for its clean-up. Once a contaminated site is identified, the competent authority must first try to identify the polluter. Polluter is defined in the broadest sense, and includes every person who causes pollution.
The competent authority can force the polluter to undertake clean-up and remediation measures. If the polluter cannot be held liable (for example, if the polluter is unknown, no longer exists or is insolvent), the property owner can have secondary liability if he:
Tolerated the contaminating behaviour by not taking any reasonable measures to prevent these activities.
Was, or should have been, aware of the contamination.
Previous owner/occupier liability
The previous owner/occupier of a contaminated land can be held liable if he is considered the polluter, thus, if he caused the contamination.
Limitation of liability
Polluter liability is a strict liability. However, financial assistance may be available for remediation and safeguard measures under the Directive on Funding Clean-Up of Contaminated Sites 2008. Under this Directive, only clean-up of contamination which occurred before 1 July 1989 can be funded. For areas of high public interest, public funding may be granted for up to 95% of the eligible clean-up costs.
Funding for clean-up is not available if the applicant seeking funding caused the contamination in a premeditated or grossly negligent way.
A lender cannot generally be held liable for land contamination because in principle, liability for contaminated land is linked to the polluter (see Question 15). However, if a lender becomes the owner of a contaminated property after foreclosure on a mortgage, it may incur secondary liability if it was or should have been aware of the existing contamination.
A lender who is not considered the polluter cannot be held liable for contaminated land (see above, Lender liability). Therefore, no steps need to be taken to minimise liability.
However, if a lender becomes the owner of the (potentially) contaminated land and he is aware of the potential or existing contaminations, he cannot minimise or exclude public law liability. In addition, civil law agreements concerning assumption of liability, for example with the polluter, do not reduce public law liability. However, civil law liability can be minimised by an indemnity clause in the sale agreement.
The Civil Code (Allgemeine Bürgerliche Gesetzbuch) provides for strict private liability between neighbours. A property owner can seek injunctive relief against a neighbour if both the:
Impact from the neighbouring property exceeds that which is customary for the locality.
Customary use of the owner's property is substantially impaired.
However, the property owner cannot seek injunctive relief, but has a right to claim damages, if the impact is caused by either:
A mining operation.
An administratively authorised plant which exceeds its permissible emissions. (Plants which are subject to a summary permitting procedure (vereinfachtes Genehmigungsverfahren) do not benefit from this exemption.)
A neighbouring property owner may obtain a stop of operations by injunctive proceedings in certain circumstances.
Tort law allows civil claims for environmental damage resulting from intentional or negligent infringement of environmental protection provisions under public law. However, these claims are only available if the particular provision aims at protecting individual goods. Contamination-related issues are regulated by public law and not by civil law. Therefore, most cases of contamination are dealt with in administrative procedures.
In any case, private individuals can inform the competent authority about contaminations without any risk of costs. As soon as the contamination is ascertained, the authority must try to identify the polluter and then take appropriate actions.
Other administrative provisions contain strict private liability, for example, liability for damage caused by radioactivity under the Act on Nuclear Liability (Atomhaftungsgesetz).
Environmental liability and asset/share transfers
A distinction is made between public law and civil law liabilities.
Public law liabilities, such as clean-up of contaminated land, generally remain with the polluter and are not inherited by the buyer. However, the buyer and subsequent owners of contaminated land or water may be liable for its clean-up under certain conditions (for example, if it knew, or should have known, of the situation causing the contamination). For example:
The Civil Code provides for mandatory joint and several liability of a company's buyer and seller towards the company's creditors for any pre-existing debts of which the buyer knew or should have known about at the time of acquisition (section 1409, Civil Code). Therefore, the buyer may be liable for civil environmental damage claims, even when the environmental damage has been caused before acquisition.
A person acquiring a company and continuing its business under the existing company name may be held jointly and severally liable with the seller for any pre-existing debts which the buyer knew or should have known about at the time of acquisition (Commercial Code (Unternehmensgesetzbuch)). These debts may include civil environmental liabilities. This liability can be excluded by agreement between the parties provided that either:
the agreement is registered in the Commercial Register;
all creditors are individually informed.
Further, the buyer may be forced to accept clean-up measures taken by the competent authority. This may result in a temporary restriction of land use or temporary closure of a plant or parts of a plant.
As the company's identity remains unchanged in a share sale, public law liabilities of the company are not affected by a change in ownership.
Environmental liabilities remain with the polluter. Therefore, the seller remains liable for environmental damages which he caused before the sale. However, the seller and buyer can insert a liability clause which provides that the buyer is liable for any environmental damage caused after sale, even if the seller would be liable under environmental law.
As the identity of the company remains unchanged in a share sale, environmental liabilities remain with the company. The seller of shares usually cannot be held liable for environmental damage caused by the company.
There is no general obligation to disclose environmental information to the buyer in an asset or share deal. However, the seller of goods guarantees its agreed features and standard characteristics (Civil Code). Therefore, the buyer can assert a warranty claim (Gewährleistungsanspruch) against the seller, if both:
The buyer is not aware of the contamination.
The seller does not inform the buyer of any potential or existing contamination of the property.
The buyer can claim a price reduction and may be able to rescind the contract.
See above, Asset sale.
Environmental due diligence is common. It particularly focuses on soil and groundwater contamination on the target company's property. It must also be assessed whether the target company has caused contaminations on other properties. As almost all activities and operations with potential environmental impact must be authorised, a substantial permit check is conducted to ensure that the activities and operations comply with all material or formal environmental requirements.
Further, it is important to consider whether the target company is located in or close to a protection area. As stricter licensing requirements or building bans may apply, future enlargements may be impeded or even restricted. If the target is subject to the Emission Allowances Act, the buyer must assess whether the target has enough allowances to cover its CO2 emissions. Allocated allowances should be transferred to the buyer.
Types of assessment
There are generally two main types of assessment:
Overall document check. This involves an assessment by the buyer's legal counsel of the company's environmental situation by examining the available:
other documents relevant to the state of environment.
This type of assessment is commonly used during mergers and acquisitions due to time constraints.
Investigative environmental due diligence. This involves a detailed analysis of all environmental aspects of the acquisition, particularly in relation to potential environmental liabilities. On-site inspections by environmental engineers and consultants are recommended to compare the environmental situation with the corresponding permits and decisions. However, these assessments are generally very time consuming and costly.
Buyers sometimes engage environmental consultants to assist in identifying material environmental risks. The engagement letter usually covers the following:
The scope of the review.
The financial and time limits of the consultant's liability.
The extent of their professional indemnity insurance cover.
Warranties and indemnities given usually depend on the circumstances of the case. The following environmental warranties are typically provided by sellers in asset sales:
The company has all environmental permits necessary to operate the business.
The company is in compliance with all applicable environmental laws and permits.
The company is not subject to any environmental proceedings, claims, investigations or complaints.
As far as the seller is aware, there is no contamination present on any of the properties.
The seller has disclosed all environmental reports relating to the company's business and properties.
Indemnity is usually limited to contamination present at the time of sale.
This is similar to an asset sale (see above, Asset sale).
Reporting and auditing
Public registers of environmental information are available on the Federal Environment Agency's website. For example, the Pollutant Release and Transfer Register (PRTR) contains information on emissions, waste and sewage of Austrian industrial plants and sewage plants. Contaminated sites, or sites which are suspected of being contaminated, are also registered and disclosed to the public in various lists, such as the list of suspected contamination sites (Verdachtsflächenkataster) or the list of sites requiring clean-up measures (Altlastenatlas).
The public must be provided information concerning the environment, including the status of air, atmosphere, water, soil, landscape and natural habitats, and any exceeding of emission limits (Environmental Information Act (Umweltinformationsgesetz)). Administrative authorities, boards and representatives of the federal state, provinces and municipalities must disclose environmental information in their possession on request, irrespective of the requesting person's nationality or the reasons given. Plant operators must submit environmental information to the relevant authorities, including certain data on plant emissions.
There is no public register of environmental permits.
Third party procedures
The information is generally published online and can be searched and accessed by everyone.
Plant operators must generally provide an environmental audit report every five or six years, depending on the type of a plant (section 82b, Trade Act).
Operators of plants subject to Directive 96/82/EC on the control of major accident hazards involving dangerous substances (Seveso II Directive) have an ongoing obligation to inform the public of potential dangers and security measures.
There are various other obligations relating to environmental auditing, which are spread over a large number of laws and ordinances (see Question 26).
The plant operator must report accidents to the relevant authority immediately. It must also outline the planned steps to limit the damage and prevent further accidents (section 84c, paragraph 3, Trade Act). The Federal Ministry for Economics and Labour has established the Central Office for Major Accidents. Major accidents must be reported to the Central Office, which then informs the European Commission.
The competent authority can (section 338, Trade Act):
Enter and investigate plants.
Demand environmental information from the operator or his employees.
Further, the competent authority can set up an inspection timetable (Inspektionsprogramm) to enforce compliance with the operator's obligations. Plants handling hazardous substances can be inspected by the authorities on an ongoing basis (section 84d, Trade Act). Several other laws and ordinances provide the competent authorities with similar enforcement powers.
There is no special insurance covering environmental liabilities. However, environmental risks and damage may be covered by the general liability insurance for companies (Unternehmenshaftpflichtversicherung). The insurance generally covers liability for damage to property caused by unforeseeable environmental disturbances (unvorhersehbare Umweltstörungen). Environmental damage to individuals and damage caused by non-compliance with environmental legislation are usually not covered by the insurance.
The environmental taxes can be classified in four categories:
Environmental impact taxes, for example, contaminated site contributions (Altlastenbeitrag), waste collection fees and sewage charges.
Traffic taxes, for example, standard consumption taxes (Normverbrauchsabgabe) and motor vehicle tax.
Energy taxes, for example, mineral oil tax, energy tax on electricity, and natural gas and coal.
Resources taxes, for example, water charges, fishery and hunting charges.
The calculation of the contaminated site contribution generally depends on the amount of waste and the disposal method.
Climate Mitigation Act
The federal state and the nine provinces have agreed to co-ordinate effective measures for the reduction of greenhouse gas emissions by adopting a Climate Mitigation Act (Klimaschutzgesetz). The aim of the Act is to set clear maximum emission targets for a number of emitting sectors and to define the rights and responsibilities shared by the federal state and the nine provinces in reaching these targets. The Act will provide for binding negotiations on measures to be taken to achieve the maximum emissions for each respective sector (energy demand, energy supply, transport, industry, agriculture, waste management, fluorinated gases). Further, the Act will allow for the possibility to impose financial sanctions in case of non-achievement of the maximum emission targets. However, sanctions do not apply for the period 2008 to 2012. A National Climate Mitigation Committee and a National Climate Mitigation Advisory Board has been established in order to discuss fundamental principles of a long-term national climate strategy.
In 2012, the EIA Act (Umweltverträglichkeitsprüfungsgesetz) was amended, including natural gas fracking in the list of activities subject to an EIA. An EIA is required for test and reconnaissance drillings as well as for the subsequent exploitation of the shale gas. The Act also introduces a number of special rules for development measures like industrial and business parks as well as urban development projects (Städtebauvorhaben). Above all, the Act defines that already existing development projects are not to be considered in the assessment of cumulative effects.
In addition to the extension and further definition of the scope, the Act also increases participation rights of NGOs. In determination procedures (Feststellungsverfahren) where the EIA authority comes to the conclusion that a particular project is not subject to an EIA, environmental NGOs now have the right to demand the Environmental Senate or the Higher Administrative court to review the decision and check compliance with the provisions of the EIA Act.
The regulatory authorities
Ministry of Agriculture, Forestry, Environment and Water Management (Bundesminister für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft)
Main activities. General affairs of environmental protection, for example, environmental protection policy, EIA, air pollution control, water management in residential areas and industrial water management, waste management, remediation of contaminated sites and species protection.
Ministry of Economicy, Family and Youth (Bundesminister für Wirtschaft, Familie und Jugend)
Main activities. General implementation of the Trade Act and its regulations, for example, issuance of gas trading permits.
Federal Ministry of Transport, Innovation and Technology (Bundesminister für Verkehr, Innovation und Technologie)
Main activities. Regulatory authority for EIA procedures in relation to federal motorways and railways.
Provincial government (Landesregierung)
Main activities. Responsible for the legislation and administration of environmental issues related to provincial competences.
Governor of a province (Landeshauptmann)
Main activities. Responsible for administering environmental issues related to federal competences (indirect federal administration).
District authorities (Bezirksverwaltungsbehörden)
Main activities. Conducts environmental permitting procedures at first instance, subject to some exemptions (for example, the EIA Act and Federal Waste Management Act).
Independent Administrative Tribunal (Unabhängiger Verwaltungssenat)
Main activities. Hears appeals on certain environmental issues.
Independent Environmental Tribunal (Umweltsenat).
Main activities. Hears appeals for projects involving an EIA.
Description. The Legal Information System of the Republic of Austria (RIS) is co-ordinated and operated by the Austrian Federal Chancellery and contains up-to-date legislation and case law.
Description. The English version of the website contains a selection of Austrian laws in English translation. The translations are potentially out-of-date and are not binding.
Schönherr Rechtsanwälte GmbH
Qualified. Austria, 1987
Areas of practice. Environmental law.
- Advising Vienna International Airport on the EIA for the construction of a third runway.
- Advising clients on environmental law, particularly on EIA and plant licensing procedures in different sectors.
- Extensive expertise in clean-up proceedings, environmental due diligence, nature protection law, planning and construction, and waste management law.
- Member of advisory boards on legislative projects such as amendments to the Waste Management Act, the Act on the Environmental Management Auditing Scheme and the Environmental Impact Assessment Act.
Schönherr Rechtsanwälte GmbH
Qualified. Austria, 2008
Areas of practice. Environmental and energy law.
- Advising lenders consortium to NABUCCO gas pipeline on environmental and energy issues.
- Advising OMV PETROM on ETS issues (including requirements of flexible reserve for new market entrants).
- Advising Russian railway transport company on the acquisition of LPG businesses in Austria.
- Advising one of the world's foremost chemical companies on the acquisition of a pesticide production facility in Austria (including full environmental advice).
- Advising the European Commission on the follow up to the EC project 'Renewable Energy Best Practice'. This new project advises the Directorate on the transposition of the Renewable Energy Directive into national legislation of 15 member states.
- Advising TIWAG-Tiroler Wasserkraft AG (one of Austria's foremost energy utilities) on the construction of large-scale hydropower pump storage plants in Tyrol.
- Advising one of Europe's foremost pulp and paper companies on all kind of regulatory, permitting and environmental issues in tenjurisdictions.
Schönherr Rechtsanwälte GmbH
Areas of practice. Environmental and energy law.
- Advising energy suppliers concerning EIA approvals and realisation of hydropower plants and wind parks.
- Advising clients on environmental impact assessment approval procedures.
- Advising on renewable energy best practices and implementation of the national action plans in the 27 EU member states.
- Advising clients in environmental due diligence.