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Will trade secrets be less protected next year?

The amendment to environmental impact assessment regulations entering into force at the beginning of 2017 will also change regulations governing access to environmental information constituting trade secrets.

It might seem that confidential information or trade secrets of an enterprise should not be disclosed as environmental information, as the duty to release environmental information rests on public authorities, not enterprises. But in practice, when conducting administrative proceedings, the authorities sometimes obtain documents from businesses containing confidential information, such as reports enclosed with applications for permits. Obtaining a decision on environmental conditions for a project also often requires submission of a report on the environmental impact of the project, with a detailed description of the equipment and technologies that are planned to be used, technical specifications and the like. Such documents may contain confidential information constituting trade secrets. This applies in particular to specialist reports, descriptions of technological processes and financial conditions enclosed with documents submitted by entities whose operations have some environmental impact, in administrative proceedings seeking environmental permits or decisions on environmental conditions.

The regulations in Poland require the public authorities to provide anyone access to information about the environment and environmental protection if the information is in the possession of the public authorities or is intended for them. It thus might seem that confidential elements of documents enclosed with applications for permits fall into these categories of information. Must the public authorities therefore allow access to them?

Not all environmental information is made available

The right of access to environmental information is not unlimited, however. Administrative bodies now have a duty (and not only a right) to deny access to data about the environment, among other instances, if the data concern “information of commercial value, including technological data, provided by third parties and covered by business secrecy, if providing access to such information could worsen the competitive position of such persons and they submitted a justified application to exclude access to the information.” To avoid imposing an obligation on officials to determine whether particular information is accessible, or potentially constitutes a trade secret, the enterprise should file a relevant application. It must be borne in mind that exclusion from access can apply only to information covered by business secrecy, and there must also be a threat of worsening the competitive position of the enterprise. So it is not possible to seek an exclusion from release of any and all information.

Moreover, the law does not permit exclusion from access to information about the emissions of particles and gases, wastewater, processed waste, noise levels and release of electromagnetic fields.

From 1 January 2017 the public official will decide

The Polish regulations on access to environmental information will change at the beginning of 2017. The catalogue of grounds that can be a basis for refusing access to information about the environment and environmental protection will be modified. A seemingly minor change, but important in practice, is that denial of access to such information will be described as optional. Consequently, officials will no longer have an obligation to deny access to information, but will only be authorised to deny access. Therefore, after 1 January 2017 it could happen that officials lawfully provide access to information that constitutes a trade secret, even if the enterprise has demonstrated that the information is confidential and even if disclosure of the information could worsen the competitive position of the enterprise.

Another new aspect is introduction of a requirement not only to file an application for exclusion of release of information with commercial value, but also to include in the application a detailed explanation of the risk of injury to the applicant’s competitive position.

The application for exclusion of access to information must be filed no later than 14 days after information of commercial value, including technological data, covered by business secrecy, is provided to the public authorities. This solution is reasonable, as it reduces the period of uncertainty between filing of information and filing of the potential request to deny access to the information. Otherwise, the administrative authorities would have to withhold access to the information for a longer time, while awaiting the possible filing of a justified application for exclusion of access to the information. It should thus be recognised that in the event of filing of a request for access to environmental information before the end of this 14-day period, the administrative agency should refrain from acting on the request until the deadline for filing an application for exclusion has passed.

Unfavourable changes

Pursuant to the amendment entering into force at the start of next year, the public authorities in certain instances will only be able to refuse access to environmental information but not required to refuse access. Consequently, even if an enterprise complies with all of the statutory requirements, that is, by filing the appropriate application, duly justified, by the legal deadline, and properly demonstrates the possibility of injury to its competitive position if the information were disclosed, nonetheless the public authority will not be violating the law if it decides to allow others to access the data.

The new regulations require the public authorities to consider the public interest favouring providing access to the information in the specific instance, but do not specify what should follow from such consideration. The new rules therefore reduce the legal certainty in this area and expose businesses to the risk of injury to their competitive position because of overbroad exercise of the possibility of providing access to trade secrets.

It appears that in light of these changes, the most advantageous route businesses can take is to refuse as far as possible to submit information constituting trade secrets, unless it is absolutely necessary.

Dominik Wałkowski, Environmental Law Practice, Wardyński & Partners