Who’s Who Legal brings together Magnus Fröberg at Fröberg & Lundholm and Michael Gerrard at Arnold & Porter Kaye Scholer to discuss issues facing environment lawyers and their clients in the industry today.
Magnus Fröberg: The lawmakers in countries with underdeveloped environmental laws face challenges in adopting legislation that protects species and nature as fast as possible, and in ascertaining that the legislation is sufficiently enforced. The development of environmental legislation will be vital in order to save species on the verge of extinction, and to curb a large increase of air and water pollution, when the economies of these countries progress. This development will also be necessary to combat the discharge of carbon monoxide in order to prevent climate change. The evolution and modernisation of their environmental legislation will be necessary for these countries in order for them to be accepted as trade partners on an international level. At the same time their economy and standard of living needs to grow and develop, and there must be a balance.
The lawmakers in countries with well-developed environmental legislation (EU members, EFTA members, the USA, Canada, Australia, etc) face different problems. Their environmental legislation is already in place and only needs fine-tuning. Environmentalists and NGOs are generally very dynamic in these countries and there is a strong demand for stringent environmental regulation. Such legislation has, however, generally become very complicated in these countries.
The challenge for the lawmakers will be to evaluate if there really is a need for further environmental legislation, or if the present legislation is sufficient to solve the problems at hand. In some cases, adjusting the enforcement of existing legislation will see an improvement; politically, it is an “easy way out” to adopt new rules instead of improving the current laws. Legislation that is increasingly more complicated and extensive is leading to different setbacks. It is becoming more and more difficult to establish new businesses, industries (eg, wind plants) and infrastructure (eg, construction, railways, housing projects, treatment plants). These changes are necessary to achieve sustainable development. Environmental legislation is starting to perpetuate problems, and is itself hindering vital changes in society – even changes that are necessary from an environmental point of view.
Michael Gerrard: There is tremendous inconsistency in the environmental laws across the world, particularly in the regulatory standards used to implement those laws and the stringency of enforcement. This poses a challenge for corporations that operate in multiple countries. It is often difficult for companies to keep track of which requirements apply where, and it is a particular problem when a company manufactures products for sale in multiple countries. Many of the laws apply where the product is used as opposed to where it is manufactured, and companies must take care to comply with the laws in force where their customers are. Complex and shifting supply chains and distribution networks further complicate the situation. As a related matter, in some countries the most important rules are not readily accessible in books or online, making it difficult to know what is required there.
Magnus Fröberg: The focus in Sweden has been to adopt more stringent regulation, with less focus on the enforcement of the legislation. The enforcement has to a large extent been supplemented with requirements of self-monitoring and obligations to report to the authorities. This is effective when it concerns large companies that are scared of breaking environmental laws and afraid of the negative publicity that it would cause. However, it is less effective when it comes to smaller and less serious companies. In the last couple of years more resources have been given to the supervisory authorities, and more focus has been directed towards the implementation of the legislation.
Michael Gerrard: Enforcement activity has declined in the USA since the election of Donald Trump. The enforcement staff at the Environmental Protection Agency (EPA) has shrunk, and the EPA refers fewer cases to the Department of Justice for prosecution. The Trump administration is seeking to reduce what it regards as unnecessary regulatory burdens on businesses (though the environmental community believes that this attitude is harming environment and public health). Therefore, at the federal level, many existing regulations are being repealed or softened; almost no new regulations are being imposed; and there is less enforcement of those regulations that remain. States may adopt their own laws and regulations that are stricter than those of the federal government (with a few exceptions), and some states are increasing their enforcement to make up for the reductions in federal enforcement.
Magnus Fröberg: We have been involved in about 50 different projects regarding permits for wind power in Sweden over the past 10 years. The permitting procedure has become increasingly time-consuming for the companies, with the permitting authorities constantly imposing stricter requirements and asking for more investigations. The ability to obtain a permit and establish wind turbines is now very limited. Over the past two years, more than two-thirds of wind turbine applications have been rejected by the permitting authorities.
Michael Gerrard: There is tremendous growth in renewable energy production in the USA. New electric generating capacity is mostly from wind and solar, and natural gas; there is virtually no construction of new capacity using coal, oil or (except for one facility) nuclear power. More plans are being developed for utility-scale wind and solar. Offshore wind is one area that has been especially active. We are also beginning to see growth in the construction of the transmission and storage facilities that are necessary to make full use of renewables. Development of all of these facilities require a great deal of legal work – financing, contracting, permitting, real estate, offtake and other transactions, and other areas. In some areas, litigation or administrative proceedings are brought by project opponents, especially neighbours. In some states, we are also seeing a considerable amount of distributed generation, especially rooftop solar.
Magnus Fröberg: The international accords and targets, as well as the targets set by the Swedish Parliament as regards renewable energy, has brought a lot of clients looking for help to obtain environmental permits for wind power projects. This demand has now fallen drastically as a result of the restrictive attitude that the permitting authorities have shown against wind power. Companies do not want to invest money when the conditions for obtaining a permit are so limited and the outcome of an application is so difficult to predict.
Michael Gerrard: President Trump has announced that the USA will withdraw from the Paris Agreement, and the federal government has ceased making efforts to comply with the Agreement or to reduce greenhouse gas emissions. However, many clients believe that the USA may well rejoin the Paris Agreement after the next presidential election, which will be held in November 2020. Many states and cities have pledged to meet the Paris goals on their own; highly organised groups to advance this objective have formed. Many corporations have also made pledges to reduce their emissions. This has led to a considerable amount of inconsistency across the USA in efforts to reduce em