Environmental law and practice in Switzerland: overview

A Q&A guide to environment law in Switzerland.

This Q&A provides a high level overview of environment law in Switzerland 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 global guide to environment. For a full list of jurisdictional Q&As visit www.practicallaw.com/environment-guide.

Contents

Environmental regulatory framework

1. What are the key pieces of environmental legislation and the regulatory authorities?

Legislation

The key pieces of environmental legislation are based on Articles 74 seq. of the Federal Constitution of the Swiss Confederation. The Swiss Parliament has enacted a wide range of federal statutes to protect natural resources. The main statutes are the:

  • Federal Environmental Protection Act of 1983 (EPA).

  • Federal Water Protection Act of 1991 (WPA).

  • Federal Act on the Protection of Nature and Cultural Heritage of 1966 (NCHA).

  • Federal Forest Act of 1991 (ForA).

  • Federal Agriculture Act of 1998 (AgricA).

  • Federal Act on Non-Human Gene Technology (GTA).

The Federal Council enacts the complementing ordinances.

European Union (EU) environmental regulations do not directly apply to Switzerland, as the country is not a member of the EU. However, Switzerland maintains extensive co-operative relations with the EU, including with regard to the harmonisation of environmental legislation. Further, Switzerland is a party to numerous international environmental agreements (see Question 9).

The Swiss Civil Code of 1907 (CC) contains rules that apply to the abatement of nuisances such as water or air pollution, as well as noise (for example, Articles 679 and 684 CC regarding liability of landowners).

Several federal statutes (for example, the EPA and the WPA) provide for criminal sanctions (fines or imprisonment) for deliberate or negligent infringement of specific duties under the relevant statutes. Both natural persons and legal entities can be sanctioned.

Regulatory bodies

The cantons are responsible for implementing the federal statutes and ordinances, except where the law reserves this duty for the Confederation. The cantons enact the appropriate legislation.

 

Regulatory enforcement

2. To what extent are environmental requirements enforced by regulators?

The intensity of enforcement can differ from canton to canton, but environmental legislation is generally implemented strictly, both at the federal and cantonal level.

For the purpose of enforcement, administrative authorities can request all necessary information from the operators and can also rely on the usual data and information compiled in the due course of monitoring compliance. They can issue injunctions and orders that may be challenged in legal proceedings.

 

Environmental NGOs

3. To what extent are environmental non-governmental organisations (NGOs) and other pressure groups active?

NGOs and other pressure groups are active in Switzerland. They participate in the legislative process, exert influence on the formation of public opinion and initiate legal proceedings. The main environmental NGOs and other pressure groups that are active in Switzerland are:

  • The World Wide Fund For Nature (WWF).

  • The Swiss Heritage Society.

  • The Swiss Foundation for Landscape Conservation.

  • Greenpeace.

  • The Swiss Planning Association.

  • The Swiss Alpine Club.

  • The Traffic Club of Switzerland (VCS).

These environmental protection organisations have a statutory standing to appeal rulings and decisions of the federal or cantonal authorities within the scope of the Federal Environmental Protection Act (EPA), the Federal Act on the Protection of Nature and Cultural Heritage (NCHA) and the Federal Act on Non-Human Gene Technology (GTA).

 

Environmental permits

4. Is there an integrated permitting regime or are there separate environmental regimes for different types of emission? Can companies apply for a single environmental permit for all activities on a site or do they have to apply for separate permits?

Integrated/separate permitting regime

There is no integrated permitting regime. The cantons take the necessary measures to achieve the objectives set in the federal statutes.

Numerous industrial activities having a potential impact on the environment require specific authorisations under the Federal Environmental Protection Act (EPA) or other federal statutes and their ordinances. Further, all construction and infrastructure projects must comply with the requirements set by the spatial planning law and with all relevant environmental regulations. The planning authorities must also integrate the requirements of environmental regulations into the zoning and planning instruments.

Single/separate permits

Companies cannot apply for one single environmental permit for all activities on a site. Pollution prevention and pollution control require a co-ordination between various regulatory and compliance authorities, as well as between the Swiss Confederation and the cantons.

The authorities apply the principle of co-ordination, which requires that the issuance of the various permits and the compliance with all environmental rules applicable to a project must be co-ordinated both procedurally and in substance.

 
5. What is the framework for the integrated permitting regime?

There is no integrated permitting regime (see Question 4).

Water pollution

6. What is the regulatory regime for water pollution (whether part of an integrated regime or separate)?

The Water Protection Act (WPA), supplemented by ordinances, applies to all public and private surface and underground waters. The Federal Fishing Act of 1991 (FFA) includes further water protection provisions.

Permits and regulator

The following activities require a permit issued by the competent cantonal authorities:

  • Discharging or infiltrating polluted waste water into a body of water.

  • Constructing and converting buildings and installations (including operations such as excavations, earthworks and similar works) in areas that are particularly vulnerable, if they may pose a risk to the waters.

  • Withdrawing water from a watercourse with permanent flow.

  • Flushing out and emptying impoundments.

  • Extracting gravel, sand and other materials.

A cantonal permit is necessary for the use of hydropower, the creation of artificial streams, the withdrawal of water and the exploitation of gravel and sand in waters (FFA).

Prohibited activities

The WPA prohibits the direct or indirect discharge or drain of any substance that may pollute the waters. The cantonal authorities can grant exceptions and discharge permits based on strict statutory requirements.

Clean-up/compensation

The authorities can impose to the operator or owner of an installation all necessary measures to prevent a pollution to occur or remediate the effects thereof. In case of emergency, they can carry on the necessary measures themselves. The costs of the remediation measures will be imposed on the polluter.

Penalties

The WPA provides for criminal sanctions in the form of fines or imprisonment of up to three years for deliberate or negligent infringement of specific duties enumerated in the act. In addition, the Swiss Penal Code contains a provision that penalises to a custodial sentence not exceeding five years or to a monetary penalty any person who wilfully contaminates drinking water intended for people or domestic animals with substances that are damaging to health. If the person acts negligently, the penalty is a custodial sentence not exceeding three years or a monetary penalty.

 

Air pollution

7. What is the regulatory regime for air pollution (whether part of an integrated regime or separate)?

Air pollution is regulated by the Federal Environmental Protection Act (EPA) and the Ordinance on Air Pollution Control of 1985 (OAPC). As a general rule, air emissions must be limited at their respective source using state-of-the-art technology, provided the costs of doing this are not excessive.

Permits and regulator

Anyone who operates or wishes to construct an installation that causes air pollution must provide the cantonal authorities with information on the:

  • Type and level of emissions.

  • Release location, release height and time course of emissions.

Existing and new facilities must comply with the emissions limitation standards provided by the OAPC and/or the construction and operating permits. If the emissions due to combined sources of air pollution exceed exposition thresholds, the competent authorities will order stricter abatement measures.

Prohibited activities

It is prohibited to operate new or existing stationary installations in such a way that they cause emissions exceeding the threshold limits defined in the OAPC. Further, it is prohibited to incinerate waste except in the facilities specified in the OAPC's annex.

Clean-up/compensation

Stationary installations that do not meet the OAPC requirements must be retrofitted or can be shut down.

Penalties

Any person who wilfully puts substances into circulation which he/she knows or must assume may present a danger to the environment (or indirectly endanger people when used in a certain manner) is liable to a custodial sentence not exceeding three years or a monetary penalty. In addition, any person who wilfully fails to comply with emissions limitations or with remediation orders is liable to a fine not exceeding CHF20,000. If the person acts negligently, the sentence is a monetary penalty or a fine.

 

Climate change, renewable energy and energy efficiency

8. Are there any national targets or legal requirements for reducing greenhouse gas emissions, increasing the use of renewable energy (such as wind power) and/or increasing energy efficiency (for example in buildings and appliances)? Is there a national strategy on climate change, renewable energy and/or energy efficiency?

The national target for reducing greenhouse gases is set at a reduction rate of 50% by 2030 as compared with 1990 levels. At least two-thirds of the reduction will take place in Switzerland and a third with projects abroad.

In the aftermath of the Fukushima nuclear incident in Japan, the Federal Council has proposed the Energy Strategy 2050, with the aim of restructuring the Swiss energy system and withdrawing from nuclear energy. On 30 September 2016, the Swiss Parliament accepted (subject to a possible referendum) a first set of measures aimed at increasing energy efficiency and renewable energy sources, and at withdrawing from nuclear energy. Furthermore, a popular initiative is pending, which is aimed at "an orderly withdrawal from the atomic energy programme" (that is, with a fixed deadline for each nuclear power plant to be shut down). It will be submitted to the voters by November 2016.

Under the existing law, there are no national targets or legal requirements for increasing the use of renewable energy, but some cantons have set regional targets. However, the producers of electricity from hydropower, solar energy, wind energy, geothermal energy, biomass and biological waste qualify for feed-in tariffs (subsidies).

Provisions on efficient use of energy can be found in the Federal Energy Act of 1998 and its complementing ordinances. While the Federal Council is responsible for installations, vehicles and equipment manufactured in series, the cantons are competent to issue requirements for the building sector.

 
9. Is your jurisdiction party to the United Nations Framework Convention on Climate Change (UNFCCC) and/or the Kyoto Protocol? How have the requirements under those international agreements been implemented?

Switzerland is party to the UNFCCC and the Kyoto Protocol. The Kyoto Protocol's first commitment period started in 2008 and ended in 2012. Switzerland accepted a second commitment period that started in 2013 and will end in 2020. Also, on 1 September 2016, the Federal Council opened the consultation process for the ratification of the Paris Agreement.

Switzerland committed itself to reduce its greenhouse gas emissions by 50% by 2030 as compared with 1990 levels.

The legal framework for the implementation of the Kyoto Protocol is set in the Federal Act on the Reduction of CO2 Emissions of 2011 (CO2 Act) and the Ordinance for the Reduction of CO2 Emissions (CO2 Ordinance).The CO2 Act provides for the following measures to achieve the reduction targets:

  • Technical measures to reduce CO2 emissions of buildings and passenger cars.

  • Emissions trading scheme.

  • Compensation obligations.

  • CO2 levy on thermal fuels.

The consultation process for the revised CO2 Act draft (which aims to implement the Paris Agreement) was opened by the Federal Council on 1 September 2016.

 
10. What, if any, emissions/carbon trading schemes operate in your jurisdiction?

Switzerland has an emissions trading scheme (ETS). While larger companies (with a total thermal input of their combustion installation of 20 MW or more) must participate in the ETS, medium-sized companies (with a total installed rated thermal input of 10 MW or more) can "opt-in".

Swiss companies can either use certificates issued in Switzerland or certificates issued by foreign countries, provided that the ETS of the relevant foreign country has been recognised by the Federal Council (CO2 Act). However, as no foreign ETS has been recognised by the Federal Council so far, Swiss companies can only use and benefit from Swiss certificates. A treaty between Switzerland and the EU regarding the connection of their ETSs was signed at the end of 2015, with its implementation planned for 2020 (at the latest).

In contrast, certain emissions reduction certificates (which are tradable documents attesting emissions reductions achieved in a foreign country) are to a certain extent recognised in Switzerland.

Companies that participate in the ETS are refunded the CO2 levy on thermal fuels.

 

Environmental impact assessments

11. Are there any requirements to carry out environmental impact assessments (EIAs) for certain types of projects?

Scope

Construction or planning projects for facility or transport infrastructures that may substantially impact the environment are subject to an EIA. EIAs are regulated by the Federal Environmental Protection Act (EPA) and the Federal Ordinance on Environmental Impact Assessment of 1988, which contains a list of projects that are subject to an EIA. The aim of an EIA is to assess the project's compliance with all relevant statutory provisions as well as cantonal and municipal regulations.

Permits and regulator

The applicant must conduct a preliminary investigation to determine whether the project may have substantial adverse effects on the environment. If yes, he/she must prepare an environmental report that contains a description of the initial state of the environment as well as details of the project, adverse effects which are likely to remain and measures that could reduce those adverse effects. The report must then be evaluated by the competent cantonal or federal authorities, depending on the project. The report and the authorities' evaluation of the report must be filed with the request for approval of the project, to allow a consultation by the public during a period that varies depending on the canton (usually 30 days). Every person or entity that has an interest at stake, and designated environmental organisations, can file an observation or opposition, or become a party to the authorisation procedure.

The competent authority must assess the project's environmental impact based on the environmental report, the recommendations and observations of the other authorities, and the observations and oppositions filed by any interested party. It can require all necessary additional measures or conditions to ensure compliance with the environmental regulation. The EIA is not a licence but is part of the (lead) procedure to obtain the permit to build. The final decision (that includes the EIA) is published.

Penalties

Specific NGOs have a statutory right to appeal building permits or zoning plans that have been granted to projects subject to an EIA. They can also file an appeal against the approval of a project if an EIA was necessary but has not been performed. The failure to conduct an EIA will lead to the refusal to grant the authorisation to build or to the revocation of an authorisation by the court.

 

Waste

12. What is the regulatory regime for waste?

Permits and regulator

Waste is any movable material disposed of by its holder or the disposal of which is required in the public interest (Federal Environmental Protection Act (EPA)). The EPA is complemented by several Ordinances, including the:

  • Ordinance on Avoidance and Disposal of Waste of 2015 (replacing the Technical Ordinance on Waste of 1990).

  • Ordinance on Movement of Waste of 2005.

  • Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal.

In construction projects, a waste disposal concept has to be submitted to the competent authorities if either:

  • More than 200 cubic metres of construction waste is expected.

  • Construction waste containing substances that are hazardous to the environment or health, such as polychlorinated biphenyls, polycyclic aromatic hydrocarbon, lead or asbestos are expected.

Radioactive waste is governed by the Federal Statute on Radioprotection of 1991 and by the Federal Statute on Nuclear Energy of 2003.

Waste can only be stored in specific categories of landfills. The construction and operation of a landfill are subject to specific planning requirements and to authorisations by the competent cantonal authority. The export of waste requires a permit issued by the Federal Office for the Environment (FOEN).

Prohibited activities

It is prohibited to permanently store waste somewhere other than in one of the five types of landfills that are subject to various constructive and operative conditions and licences. Further, it is forbidden to mix waste to reduce their toxicity by means of dilution.

Operator criteria

The operator of a landfill must:

  • Employ qualified personnel.

  • Ensure that only allowed waste is being disposed of.

  • Keep a register, which records the weight of the waste.

  • Keep the operating area as small as possible.

  • Document the filling and upgrading of the landfill.

  • Regularly control the installations and their impact on the groundwater; and inform the authorities twice a year about the results of groundwater samplings.

  • Guarantee the coverage of the costs necessary to close the landfill and to conduct potential remediation measures after its operation has ended.

Special rules for certain waste

Specific rules are applicable to hazardous waste, which:

  • Must be marked as such for transfer within Switzerland as well as for import, export and transit.

  • Can only be exported with authorisation from the FOEN.

  • Can only be accepted or imported by companies with authorisation from the canton.

Penalties

A person is liable to a custodial sentence not exceeding three years or a monetary penalty if he:

  • Wilfully constructs or operates a landfill without authorisation.

  • Fails to mark special waste as such for transfer, or hands it over to an undertaking that does not hold the relevant authorisation.

  • Accepts, imports or exports special waste without authorisation.

  • Infringes regulations on the movement of special waste.

A person is liable to a fine not exceeding CHF20,000 if he:

  • Wilfully burns waste illegally outside installations.

  • Deposits waste outside authorised landfills.

  • Infringes the reporting duties in connection with waste.

  • Infringes the regulation on waste.

  • Infringes the regulations on the movement of other forms of waste.

  • Fails to guarantee coverage of the costs of closing and remediation of a landfill.

 

Asbestos

13. What is the regulatory regime for asbestos?

Prohibited activities

The Federal Ordinance on the Reduction of Risks relating to the Use of Certain Particularly Dangerous Substances, Preparations and Articles of 2005 (ORRChem) prohibits the use of asbestos and the marketing and exportation of asbestos-containing preparations or articles.

Main obligations

There is no obligation to run asbestos diagnoses and to remediate asbestos-containing buildings at the federal level. A few cantons have introduced specific provisions to that effect in their statutes on construction and planning. However, the Confederation and the cantons have carried out programmes to detect and remove asbestos in public buildings, such as schools and hospitals. Protection against asbestos exposure is primarily achieved through the legislation protecting the employees and construction workers, such as the Federal Accident Insurance Act of 1981. Further, the obligation to remove asbestos in a building may be based on contract law.

Asbestos-contaminated material is a hazardous waste that must be disposed of according to the specific provisions applicable to hazardous waste.

Permits and regulator

On receipt of a justified request and with the agreement of the Federal Office of Public Health (FOPH), the Federal Office for the Environment (FOEN) can grant exemptions to the prohibition to use asbestos, under strict conditions (for example, in the current state of the art no substitute for asbestos is available and the quantity of asbestos used is no greater than required for the intended purpose). In such a case, the packaging is marked with the name of the manufacturer, a warning about the dangers of asbestos to human health and the environment, and a reference to protective measures.

A few cantons (for example, Geneva and Vaud) have enacted specific provisions in their cantonal construction laws that impose on the owner of a building the obligation to run an asbestos diagnosis if he/she wishes to transform the building. If asbestos is detected, the owner must submit a remediation and asbestos removal plan, otherwise he/she will not be able to transform the building. There is no such obligation at the federal level.

Penalties

A person is liable to a custodial sentence not exceeding three years or a monetary penalty if he/she either:

  • Wilfully puts substances into circulation which he/she knows or must assume may present a danger to the environment or indirectly endanger people when used in a certain manner.

  • Handles substances contrary to instructions in such a manner that they, their derivatives or waste may present a danger to the environment or indirectly endanger people.

Any person who wilfully fails to comply with remediation orders is liable to a fine not exceeding CHF20,000.

 

Contaminated land

14. What is the regulatory regime for contaminated land?

Regulator and legislation

The Federal Environmental Protection Act (EPA) and the Ordinance on the Remediation of Polluted Sites of 1998 (CSO) provide for comprehensive qualitative and quantitative protection, as well as remediation of soil contamination. Swiss law makes a distinction between polluted sites and contaminated sites. A site is deemed polluted if (based on the past activities on the site) the soil is likely polluted by waste. If the polluted site presents a threat to the groundwater, surface water, soil fertility or to the air or actually impairs them, then it is deemed contaminated and must be cleaned up.

The levels of contamination that trigger remediation or surveillance are provided in the CSO or determined by the authorities.

Investigation and clean-up

As a rule, investigation and remediation measures follow a procedure in several steps under the CSO. In urgent cases, some of these steps can be omitted:

  • Recording of the site in a register.

  • Assessment of the need for monitoring and remediation by means of investigation within a reasonable period of time.

  • Assessment of the objectives and urgency of remediation.

  • Decision on monitoring or on objectives of remediation.

The objective of remediation can be achieved by measures that enable environmentally hazardous substances to be eliminated (decontamination) or prevent the diffusion of hazardous substances into the environment (securing).

Penalties

Any person who wilfully fails to comply with remediation orders is liable to a fine not exceeding CHF20,000.

 
15. Who is liable for the clean-up of contaminated land? Can this be excluded?

Liable party

As a rule, the owner or operator of the site must perform the necessary investigation, monitoring and remediation measures.

The obligation to carry out the remediation (clean-up) must be distinguished from the obligation to bear the costs of remediation. The costs must be borne by the persons liable for the pollution and be divided among them according to their causal part in the pollution (Article 32d, Federal Environmental Protection Act (EPA)).

The canton or Confederation must bear the share of the costs of any person responsible who cannot be identified or is unable to pay. The authority can request the person liable for all or part of the costs to provide appropriate financial security to cover his probable share of the costs (Article 32dbis, EPA).

Owner/occupier liability

The current "polluter by situation" (the person who legally or actually controls the site and the installations (that is, the owner, operator or tenant)) must bear part of the costs (usually between 5% and 20% depending on the canton), even if he/she did not cause the pollution, unless he/she did not or could not have any knowledge of the pollution at the time he/she acquired the property.

Previous owner/occupier liability

Previous operators or occupiers are liable for the costs to the extent that they were liable for the pollution by their actions or omissions ("polluters by behaviour"). This liability is not time-barred.

Limitation of liability

Environmental liabilities under Article 32d of the EPA are based on public law and cannot validly be excluded towards the authorities. Provisions to the contrary inserted in purchase agreements or other contracts do not bind the authorities.

Voluntary clean-up programme

There are no general programmes or legislation for the clean-up of contaminated land for redevelopment.

 
16. Can a lender incur liability for contaminated land and is it common for a lender to incur liability? What steps do lenders commonly take to minimise liability?

Lender liability

The lender can be liable if he/she controls the site and can be deemed "polluter by situation" or if he/she causes the pollution to occur.

Minimising liability

The liability is based on public law and cannot validly be excluded (see Question 15). However, the financial risks for the lender can be mitigated by a valid indemnity clause in the agreement with the site owner.

 
17. Can an individual bring legal action against a polluter, owner or occupier?

Pollution can cause damage to health, property and natural resources. A person injured by pollution can seek pecuniary compensation for the injury sustained, under tort law. The relevant provisions are contained in the:

  • Federal Environmental Protection Act (EPA) (strict liability imposed on installations that present a special hazard to the environment and liability for pathogenic organisms).

  • Swiss Code of Obligations of 1911 (CO) (general rule regarding civil liability originating from tort and liability of the owner for construction or maintenance defects).

  • Civil Code (CC) (liability of landowners).

Strict liability provisions are also enacted in special statutes, such as the Nuclear Civil Liability Act of 1983.

Whatever the legal cause of action may be, the plaintiff must prove that he/she suffers a damage, that the tortfeasor committed an unlawful act or omission, and the causation between the damage and the unlawful act.

Pure environmental damage (that is, damage to natural resources that are not subject to property rights or to the sovereign powers of the cantons) is not compensated under civil law except where a specific legal provision provides otherwise (for example, Article 15 of the Federal Fishing Act (FFA)). Switzerland has signed, but not yet ratified, the International Convention on Civil Liability for Damages Resulting from Activities Dangerous for the Environment of 21 June 1993, which provides for compensation of pure environmental damages.

 

Hydraulic fracturing

18. Is fracking being pursued or considered in your jurisdiction? If so, please describe the regulatory framework that applies to manage environmental risks.

There is no consolidated regulation applicable to the licensing and exploitation or imports of gas resources. This is regulated by a combination of federal and cantonal statutes, such as the Swiss Federal Act on Energy of 1998 and its Ordinances, the Federal Environmental Protection Act (EPA) and the Federal Water Protection Act (WPA).

Some cantons have enacted specific statutes, which provide that liquid and gas hydrocarbon beds belong to the public domain and both the exploration and exploitation of these resources are subject to a permit/concession. Some exploration permits have been granted.

 

Environmental liability and asset/share transfers

19. In what circumstances can a buyer inherit pre-acquisition environmental liability in an asset sale/the sale of a company (share sale)?

Asset sale

As some environmental liabilities are tied to the facility or to the industrial site itself, environmental risks or liabilities can pass to the buyer through asset deals. Further, liabilities attached to past operation or activities can be transferred to the takeover company in the case of a transfer of business, even though no liability claim is pending or known at the time of the transfer.

Special attention must be paid to possible contamination of soil and groundwater, and disposal of waste. The buyer must ensure that the seller complied with environmental legal requirements relating to the assets in question. The buyer generally requests warranties and indemnifications to cover these risks.

Share sale

In a share deal, environmental liabilities remain with the target company and, therefore, the buyer indirectly acquires these risks. The buyer (shareholder) can only become directly liable to the extent that the corporate veil is lifted, which can only occur in exceptional circumstances as an application of the abuse of right theory. Share purchase agreements often provide for representations and warranties, as well as for indemnification obligations with respect to environmental aspects.

 
20. In what circumstances can a seller retain environmental liability after an asset sale/a share sale?

Asset sale

Some environmental liabilities are not tied to the assets themselves (the "property of production") but to a specific conduct (operational activities). In these cases, the seller remains liable (except in the case of a merger or transfer of assets and liabilities, or in cases where the competent authorities agree with the transfer of liabilities to the buyer).

Share sale

In a share deal the seller may retain his environmental liability if he/she is deemed a polluter by behaviour and has contributed to the contamination together with the target company.

 
21. Does a seller have to disclose environmental information to the buyer in an asset sale/a share sale?

In an asset deal, such as a real estate transaction, it is usually recognised that the seller must disclose environmental information to the buyer, unless they are both professional. As a rule, from a buyer's perspective, it is important to require representations and warranties together with an indemnification from the seller.

 
22. Is environmental due diligence common in an asset sale/a share sale?

The environmental aspects to be considered in M&A transactions depend on the specific activities the target company is carrying out or has carried out. It is common to conduct environmental due diligence. Special attention must be paid to existing and past enforcement or compliance procedures, in particular in the field of air pollution, noise abatement, soil pollution and the remediation of contaminated sites, waste disposal and the prevention of hazardous accidents. The buyer should carefully analyse the liabilities attached to past and present activities based both on public and private law.

 
23. Are environmental warranties and indemnities usually given and what issues do they usually cover in an asset sale/a share sale?

Representations and warranties usually relate to:

  • Past and present compliance with environmental legal provisions.

  • The possession of all necessary operating permits.

  • The absence of claims, proceedings or investigations regarding environmental issues and compliance.

  • The fact that the seller duly disclosed all relevant environment-related facts.

Standard representations and warranties may not be adequate in the particular transaction at hand and must be carefully worded to reflect the existing or potential environmental liabilities. It is also recommended for the parties to use the terminology of the relevant environmental statutes.

 
24. Are there usually limits on environmental warranties and indemnities?

Warranties and indemnities depend on the particular case. They are typically limited both in time and amount.

 

Reporting and auditing

25. Do regulators keep public registers of environmental information? What is the procedure for a third party to search those registers?

Public registers

Various environmental statutes provide for the duty to disclose to governmental authorities information on air and water emissions and rejects into the environment. Further, the Federal Ordinance on the Register relating to Pollutant Release and the Transfer of Waste and of Pollutants in Waste Water (PRTR-V) ensures public access to information on pollutants released into the water, the air or the soil by listed installations and plants. Reporting happens on a yearly basis. In addition, governmental agencies keep publicly available registers of polluted sites.

Third party procedures

The Federal Act on Freedom of Information in the Administration of 2004 (FolA) seeks to promote transparency with regards to the Federal administration's activities. Any person can inspect official documents and obtain information from the federal authorities. Similar rules apply at the cantonal level. Further, in 2014, Switzerland ratified the Aarhus Convention which seeks to improve access to environmental information. Citizens can review official documents with environmental content.

 
26. Do companies have to carry out environmental auditing? Do companies have to report information to the regulators about environmental performance?

Environmental auditing

Everyone is obliged to provide the authorities (on request) with the information required to enforce the Federal Environmental Protection Act (EPA) and, if necessary, to conduct or acquiesce in the conduct of enquiries (Article 46 § 1, EPA).

Reporting requirements

See Question 25.

 
27. Do companies have to report information to the regulators and the public about environmental incidents (such as water pollution and soil contamination)?

There is no general duty to report environmental incidents under the Federal Environmental Protection Act (EPA). However, several statutory provisions provide for such an obligation regarding specific incidents (for example, a leak of liquids which may pollute the waters or the occurrence of a hazardous accident).

 
28. What powers do environmental regulators have to access a company?

Administrative authorities can both:

  • Request all necessary information from the operators to carry out their duties.

  • Rely on the usual data and information compiled in the due course of monitoring compliance.

They can issue injunctions and orders that may be challenged in legal proceedings within the administration and in court.

 
29. What obligations are there on companies to report on environmental issues in their annual corporate reports?

There are no specific requirements for environmental issues. However, companies that must publish annual corporate reports must include information on environmental issues if they have, or are expected to have, a material impact on the financial situation of the company and to make appropriate provisions.

 

Environmental insurance

30. What types of insurance cover are available for environmental damage or liability and what risks are usually covered? How easy is it to obtain environmental insurance and is it common in practice?

Types of insurance and risk

Common business liability insurance is available for environmental damage but is typically limited to sudden and accidental damage.

Obtaining insurance

Other types of environmental insurance (such as insurance to cover remediation costs of a polluted site or coverage for gradual pollution) may be available but are not common.

 

Environmental tax

31. What are the main environmental taxes in your jurisdiction?

Taxes are levied on volatile organic compounds (VOC), extra light heating oil and thermal fuels.

Tax liability

The persons liable to pay the environmental taxes are defined in the Customs Act and Petroleum Tax Act. They are, usually, importers, producers and manufacturers in Switzerland.

Tax rates

The following tax rates apply:

  • Volatile organic compounds: CHF3 per kilogram of VOCs.

  • Extra light heating oil, petrol and diesel: CHF12 per tonne of extra light heating oil.

  • Coal and other fossil fuels: CHF84 per tonne of CO2.

 

Reform

32. What proposals are there for significant reform (changes) of environmental law in your jurisdiction?

There is no significant reform of the Federal Environment Protection Act (EPA) pending.

There are current revisions of health protection regulations. For example, the Ordinance on Radiological Protection will enact new international radiological standards with regard to radon protection, as well as new provisions on the remediation of radium contaminated housing.

 

The regulatory authorities

Federal Office for the Environment (FOEN)

Main activities. The aim of the FOEN is to ensure the sustainable use of natural resources, including soil, water, air and forests. It is responsible for minimising natural hazards, reducing risks to the environment and human health from excessive pollution, conserving biodiversity and representing Switzerland in international environmental policy arenas.

W www.bafu.admin.ch

Federal Office of Public Health (FOPH)

Main activities. The FOPH provides competence in healthcare, promotes a healthy lifestyle and works for the general well-being of the public. The FOPH is responsible for ensuring that Switzerland's healthcare system remains efficient and affordable.

W www.bag.admin.ch

Swiss Federal Office of Energy (SFOE)

Main activities. The SFOE creates the prerequisites for a sufficient, crisis-proof, broad-based, economic and sustainable energy supply. It ensures the maintenance of high safety standards in the production, transport and utilisation of energy. The SFOE also creates the necessary conditions for efficient electricity and gas markets and an adapted infrastructure. Finally, it actively promotes efficient energy use, an increase in the share of renewable energy and a reduction in CO2 emissions.

W www.bfe.admin.ch



Online resources

Federal Government

W www.admin.ch/bundesrecht/00586/index.html?lang=en

Description. Official website of the Federal Government that provides all currently applicable statutes and ordinances. All regulations are available in German, French and Italian (binding versions). In addition, the most important regulations are available in English (non-binding).

Federal Department of the Environment, Transport, Energy and Communication (DETEC)

W www.uvek.admin.ch/index.html?lang=en

Description. Official website of the Federal Department of the Environment, Transport, Energy and Communication (DETEC). Contains press releases and links to all Federal Offices that are assigned to the DETEC.



Contributor profiles

Isabelle Romy, Partner

FRORIEP AG

T +41 44 386 60 00
F +41 44 383 60 50
E iromy@froriep.ch
W www.froriep.com

Professional qualifications. Switzerland, Lawyer

Areas of practice. Environmental and construction law; regularly advises private companies, public bodies and governmental agencies; international litigation; arbitration; private international law.

Languages. German, English, French

Professional associations/memberships. Swiss Arbitration Association (ASA); Zurich Bar Association and Swiss Bar Association; Swiss Association for Environmental Law; teaching environmental and construction law at the Federal Institute of Technology in Lausanne (EPFL) for 20 years; lecturer on environmental law and contaminated sites in the education programme led by the Swiss Bar Association for attorneys who specialise in real estate and construction law.

Publications. See http://froriep.com.

Benjamin Dürig, Senior Associate

FRORIEP AG

T +41 44 386 60 00
F +41 44 383 60 50
E bduerig@froriep.ch
W www.froriep.com

Professional qualifications. Switzerland, Attorney-at-law

Areas of practice. Real estate (including environmental law); mergers and acquisitions; banking and finance; corporate and commercial.

Languages. German, French, English

Professional associations/memberships.

  • Zurich Bar Association.

  • Swiss Bar Association.

  • Franco-Swiss Chamber for Trade and Industry.

  • International Association of Young Lawyers (AIJA).

Publications. See http://froriep.com.


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