Review of Hungarian environment law

Hungary takes justifiable pride in being in the vanguard of former Communist-bloc states in driving towards western standards in many areas including banking and finance with the ultimate goal of accession to the EU in the early part of the new millennium.

As far as Hungary has advanced in the pursuit of economic harmonisation with the West, it could be argued that the development of its environmental regulation has outpaced even that and certainly is more advanced than its central and eastern European neighbours.

It is the stated objective of the Hungarian government to have in place the necessary environmental standards and achieve a harmonised regulatory system by 2002 in order that Hungary be eligible for accession. It accepts however that it will take many more years for these improved standards to bring about a significant improvement in the current pollution and contamination levels in Hungary.

The Hungarian legal system and the environment

As Hungary is a civil law country, the various sources of Hungarian legislative acts form a hierarchy. The laws relating to the environment can be found in the Constitution, the acts of parliament and decrees issued either by the government or the municipalities. Most of the general rules are to be found in the acts of parliament, their further elaboration is presented in the form of government decrees.
EU law is not a source of law in Hungary, nonetheless as the country is nearing its accession to EU, one can often find pieces of recent legislation which, at least in part, follow provisions of EU directives.

The Constitution

The Constitution of the Republic of Hungary does not mention environment protection explicitly, yet according to a decision of the Constitutional Court, the so-called “right to a healthy environment” in ∫. 18. of the Constitution, though not a directly enforceable right, creates an obligation for the state to maintain the protection of nature and the environment.

Acts of parliament

The principles and the most important provisions of environment law are in acts of parliament, the most important being: The Environment Act, The Environment Protection Product Charge Act, The Nature Protection Act and The Water Management Act. Besides these, there are several acts containing provisions relevant in the field of environment protection, e.g. The Building Act and The Genetic Technology Act. A Waste Management Act is expected to be approved by the Parliament in 1999.

The Environment Act is the most significant and extensive piece of legislation, serving as a general framework and defining the following principles:

• The principle of precaution and prevention states that besides repairing environment damage, one should also try to prevent or minimise it, through prudent decisions and through the use of modern technology;
• The “polluter pays” principle states that the user of the environment shall be liable for all environmental impacts of its activity;
• The principle of co-operation states that the users of the environment and the various authorities shall co-operate with each other in the protection of the environment;
• The principle of public participation states that the general public shall be involved in the environmental-decision making procedure and shall have access to all relevant information regarding the environment;
• The principle of long-range planning states that the government and the municipalities shall have an overriding plan about the future state of their environment and this should influence all their decisions and actions;
• The principle of integrated pollution abatement states that all environmental media shall be regulated and defended against pollution together as one system.

Government decrees

For environment law, government decrees usually serve to implement and elaborate on provisions, to spell out procedural rules, or to define standards, limits, or other indicators. The most important decrees are: the Hazardous Waste Decree, the Sewage Decree, the Noise Decree, the Decree on the Import of Hazardous Waste and the Clean Air Decree. Ministers also have the right to issue decrees within their competence, but only based on authorisation from other statutes.

Jurisprudence

The case law of courts is not officially considered a source of law in Hungary, however it plays an important role in interpreting statutes even though environmental case law is limited to date.

International treaties

Hungary is a party to almost all of the relevant international environmental treaties. Under Hungarian law, international treaties have to be implemented by national legislation before taking effect. The most important international environmental treaties effective in Hungary are: the Climate Change Convention, the Biodiversity Convention, the Ramsar Treaty, the Basel Convention and the Vienna Convention on the Ozone Layer.

Liability under environment regulation

The complexity of Hungarian environment liability is well demonstrated in the Environment Act: “those carrying out unlawful activities shall be liable under criminal law, civil law and administrative law in accordance with the contents of this Act and the provisions of separate legal rules”.

The following activities are to be considered unlawful:

• the posing of a hazard to the environment;
• the polluting or damaging of the environment;
• the violation of the environmental regulations

Consequences of responsibility

If the responsibility for the unlawful activities can be proved, the pursuer shall:

• stop the activity;

• accept responsibility for the damage caused;

• restore the state of environment existing before

If the above mentioned measures are not taken, the authorities or the court are given the right to intervene directly to take steps towards the restriction, suspension or banning of the activities. The intervening authority can either be an environmental authority issuing an official decision, or a court issuing a verdict, depending on where the procedure was initiated.

Responsibility of the owner

According to the Hungarian Environment Act the owner and the possessor (user) shall bear joint liability for the unlawful activity. The basic supposition is that the owner is aware of the type of activity that is being pursued on his property and therefore should be held responsible. The only exemption is where the owner identifies the person actually using the property and proves, beyond any doubt, that responsibility does not lie with him.

Legal succession

If the person or the entity performing the unlawful activities has changed, the rules of the liability of the legal successor of the Civil Code shall be applied. The legal successor inherits the “active” and “passive” assets of the predecessor, that is the rights and obligations, in this case the obligation to accept the responsibility and remedy the damages of an environmental wrongdoing.

Procedure on the close-down of activities

In the absence of a legal successor, the costs of clean-up and compensation of environmental damage shall be dealt with in the course of liquidation.

The responsibility of the users for the environment does not end with the discontinuing of their activities. Specific plans for clean-up and pollution-control after closure must be produced. Besides the general obligations laid out in the Environmental Act, specific legislation exists in the form of the Government’s Environmental Aspects of Liquidation Decree.

This Decree, in accordance with the Bankruptcy Act, requires companies to file a declaration to the relevant regional environmental protection agency regarding any environment damages or hazards remaining for which payment may be required. If the activity in question would normally require an environmental impact assessment, or if in any other way a serious damage to the environment is possible, a so-called environmental status survey has to be carried out by an expert. If such a survey is ordered, the balance sheet may not be closed until the approval of the survey by the environmental protection agency.

Based on the survey, the agency makes its decision and obliges the entity under liquidation to pay the necessary amount of compensation for environmental damages. These damages shall be paid by the entity under liquidation, with the supervision of the liquidator.

Liability under administrative law

The prerequisite for administrative liability is to breach regulations aimed at the protection of the environment. The activity does not need to be culpable, except for the so-called misdemeanour, which can be either intentional or negligent.

The possible sanctions are the following:

• Obligatory, or banning measures
• Environmental fine

Following the “polluter pays” principle, the imposition of these fines does not result in exemption from liability under criminal law, misdemeanour liability or from liability for damages under the Civil Law. Fines can be imposed not only on any legal person who violated an environmental regulation.

Misdemeanour liability:

Misdemeanour liability is based on culpability and can be committed intentionally or negligently. Actions subject to this liability are less dangerous to society, or are against the interest of state administration and do not reach the significance of actions penalised by criminal law. The separate municipalities in this respect have a significant role, as they are not solely the proceeding authority exercising a right of enforcement, but they are entitled to issue their own regulations defining the scope of illegal activities.

Civil liability

Risk based (strict) liability

The Environment Act provides that the provisions of the Civil Code on “activities entailing increased hazard” (strict liability) shall be applied to damages caused by an activity posing hazard to the environment. The former Environmental Act (in force since 1976 until 1995) introduced the concept of strict liability, which lifted the burden of proof from the claimant, as he only has to prove the following:

• the extent of the damage; and
• the causality between the damage and the activity.

The polluter may only exempt himself from the responsibility if he can prove:

• that the activity was not the cause of the damage; or
• the damage was entailed by a Force Majeure; or
• the damage was a result of the unavoidable behaviour of the claimant.

Here it is necessary to refer back to the rule of joint liability of the owner and the user. As the strict liability means the damage shall be remedied independent of culpability, if the polluting person is not the owner, then the owner needs to identify the legal successor and prove beyond any doubt that he is not responsible.

The extent of damage

Under Hungarian law the damage awarded shall include the following:

• the actual damage entailed (including, if any , non-pecuniary damage),
• the profit lost as a result of the damage,
• the entailing costs

Limitation period

The significance of the limitation period needs to be taken into account, as after a certain time the claims cannot be enforced. In cases of activities entailing increased hazards the limitation period is three years, as opposed to the five years of the other fault based liabilities of the Civil Code. This might be regarded as a compensation for the stricter rules applying to the liability.

Claims of neighbours

A basic principle of the Civil Code is that an owner is obliged to refrain from any conduct that would needlessly disturb others, especially his neighbours, or that would jeopardise the exercising of their rights. The terminology of neighbour includes anybody who would be affected, the range depending on the kind of pollution.

Whether the disturbance is “needless” is to be decided case-by-case by the court or the environmental authority.

An interesting phenomenon is that judicial decisions do not remove responsibility on the basis that the necessary permission for the activity has been obtained from the authorities. If the emissions resulting from his activity, let it be noise, vibration and similar effects exceed a certain level (to be decided in the case), than he shall bear the responsibility.

The neighbour may come up with the following claims:

• demand a court declaration of the occurrence of the infringement;
• demand to have the infringement discontinued and the perpetrator restrained from further infringement;
• demand the termination of the injurious situation and the restoration of the previous state by and at the expense of the perpetrator and, furthermore, to have the effects of the infringement nullified or deprived of their injurious nature;
• file charges for damages in accordance with the liability regulations.

The only thing a neighbour has to prove is the occurrence of the infringement.

Authorities in environment law, enforcement

In environment administration, the authorities are either the city clerks of the municipalities or the 12 agencies for Environment and Nature Protection, depending on the scope of the issue. The agencies are overseen by a Chief Inspectorate, which has the right to review their decisions. The agencies’ duty is to issue permits and authorisations, to monitor the status of the environment and provide information about it, to co-operate with the municipalities and with the public in protecting the environment. Other authorities play an important role in environmental administration, such as the water authorities, the building and public health authorities.

The Ministry of Environment supervises the work of the environment protection agencies. Under the Environment Act, the Ministry prepares environment legislation and in a limited scope, has the right to issue directives on its own. Through the water authorities, the Ministry for Transport, Communication and Water Management are also strongly involved in environment issues.

Anna Zemplén
CMS Cameron McKenna, Budapest Office