As economic activity in the Baltic Sea increases, there will be more situations where multiple undertakings are planned in the same area. Deciding on these cases can be challenging for the authorities and the administrative courts.
Judgment of the Province Administrative Court in Warsaw of 5 February 2021, case no. IV SA/Wa1909/20
Construction and operation of offshore wind farms offers an opportunity to develop Poland’s energy resources. It is an important step toward reducing the use of hydrocarbons and stopping the degradation of the environment. The potential of offshore wind energy is also recognised by investors, who actively apply for implementation of such projects. First they have to obtain a permit for erection and operation of artificial islands, structures and equipment in Polish maritime areas. The permit specifies the location and conditions of operation.
What do we know from the act?
The location permit for an undertaking consisting in construction of an offshore wind farm must be consistent with the development plan for internal sea waters, the territorial sea and the exclusive economic zone, if adopted. A permit will not be granted if issuance would pose a threat to, among other things, the environment or interests of the national economy, defence and state security. However, the Act on Maritime Areas of the Republic of Poland and Maritime Administration of 21 March 1991 does not specify what happens when the areas covered by the permit application overlap with areas for which other location decisions have already been issued for other entities.
On 5 February 2021, the Province Administrative Court in Warsaw rendered a judgment (case no. IV SA/Wa 1909/20) discussing this issue. The facts of the case were clear. The investor had applied for a permit to erect and operate artificial islands, structures and equipment in Polish maritime areas for an offshore wind farm. The Minister of Maritime Economy and Inland Navigation declined to initiate the proceeding. Pursuant to Art. 61a §1 of the Administrative Procedure Code, such refusal is possible in two cases:
- When the request is submitted by a person who is not a party
- When for other justified reasons the proceeding cannot be initiated.
In the case under discussion, the authority relied on the second basis, pointing to the overlap of the area indicated in the application with the area already covered by a location decision for construction of a gas pipeline.
The investor did not agree with this position. Requesting reconsideration, it argued that the decision already issued for the gas pipeline included three variants for project implementation. But publicly available sources, including the decision on environmental conditions and the website of the gas pipeline investor, showed that as of the date of filing the application for the permit for the offshore wind farm, the final variant of the gas pipeline had already been selected and did not coincide with the planned location of the wind farm. According to the investor, this demonstrated that the location decision for construction of the gas pipeline was moot and had expired by operation of law, and thus nothing prevented conducting the proceeding relating to the offshore wind farm. The authority did not accept this argument, claiming that the earlier decision had not been revoked as provided for in the Administrative Procedure Code. Thus, it remained in legal circulation, and the gas pipeline investor held vested rights under it. Hence there were overlapping projects for the same area.
The investor filed a complaint with the Province Administrative Court in Warsaw against the minister’s decision, alleging violation of procedural regulations and substantive law. In its view, the authority failed to take steps to establish the actual location of the gas pipeline and, as a result, erroneously assumed that the area of the two planned investments was overlapping. Additionally, the investor argued, the authority erroneously found that an affirmative, “constitutive” decision was required to revoke the earlier decision, whereas under Art. 162 §1 of the Administrative Procedure Code such a decision merely confirms the existing state of affairs. The mere non-issuance of a revocation decision does not determine whether the earlier decision continues to function in the legal system.
The court upheld the complaint, but on grounds different from those raised by the investor. In its opinion, contrary to the authority’s assertion, the two cases were not identical, and there were no grounds for refusing to initiate the proceedings. According to well-established case law, these grounds include the identity of the parties, the subject matter, the legal status, and the factual state. For the cases to be identical, all these conditions must be met together. Meanwhile, the cases in question concerned different investors planning different projects, which required permits under different provisions of law.
The judgment of the administrative court in Warsaw should be evaluated positively. Under the Administrative Procedure Code, refusal to initiate proceedings in a case completely different from the one in which the location decision for construction of the gas pipeline had already been issued was unjustified. At the same time, the court did not address the possible mootness of this decision in connection with selection of the final project variant for the pipeline. Also, it did not determine whether the choice of a particular project variant allowed for carrying out another project in the area, admittedly covered by a decision issued earlier but in practice not exploited. While the court rightly agreed that the proceedings should be initiated in any event, it did not rule on whether this could even potentially result in issuance of a location decision for construction of the offshore wind farm. These issues were to be analysed by the authority in the course of the proceedings, so it would be premature for the court to decide them.
The rules for issuing permits for the construction of offshore wind farms and other projects in maritime areas already covered by other decisions are not clear. In this respect, the potential collision between the projects if of key importance. If they conflict, it would be impossible to implement them both. But there is a lack of appropriate legal solutions for projects which, even in certain variants, are not mutually exclusive. Certainly the administrative authorities should not hastily refuse to initiate the proceedings, merely citing the overlap of the area of the planned projects. They should confirm the potential inability to implement the planned project by conducting the proceedings.
Agata Matysiak, Environment practice, Wardyński & Partners