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Amendments to the Environment Law:

Amendments to the Environment Law: New Penalties for Coal-related Violations
On 19 October 2015, a Decree-Law amending some provisions of the Environment Law was issued by the President.[1] The recent amendments (“Amendments”) are in line with changes made in April 2015 to the Executive Regulations of the Environment Law,[2] which permitted the use of coal provided that certain environmental safeguards are met. The Amendments reflect these changes and introduce strict penalties for failure to comply with the required environmental measures and safeguards.
The Use of Coal
In April 2015, amendments to the Executive Regulations introduced an explicit permission to import and use coal after obtaining required approvals from the Egyptian Environmental Affairs Agency (“EEAA”) and after ensuring compliance with relevant sections of the Executive Regulations (in particular, Annexes 6 and 12). Recent Amendments to the Environment Law reflect these changes. While the original pre-Amendment version of the Law had not included a prohibition on the use of coal (unlike the Regulations, which had included an explicit prohibition until it was amended in April), it had also not included an explicit permission to do so. The recent Amendments introduce a new Article (Article 14(bis)) to the Law, which allows the use of coal after obtaining the permission of the EEAA and adhering to the Executive Regulations. In effect, this introduces a qualified permission in the Law for the use of coal. As noted in the May 2015 Issue of the Egypt Legal Update, the permission to import and use coal is not a general one, but – according to the Executive Regulations - is specific to certain sectors. These are: the cement clinker industry, electricity producers, producers of coke, steel and basic aluminum. In addition to this set list, the Prime Minister may issue decisions to allow other entities to import and use coal.
A Drastic Increase in Penalties
The recent Amendments to the Environment Law introduced strict penalties for failure to obtain required permissions and approvals to import or use coal, and for failure to abide by environmental standards set out in the Executive Regulations while importing or using it. According to the newly introduced Article 86 (bis), importing or using coal without a license carries a maximum penalty of five years’ imprisonment or a fine ranging from 1 – 5 million EGP. For those who hold the required licenses but fail to take all required measures and safeguards included in the Executive Regulations to ensure that no environmental damage is caused, the Article imposes a penalty of up to six months’ imprisonment and a fine ranging from 500’000 – 3 million EGP. Prior to the new Amendments, the only action that carried similarly long prison sentences were those related to the illegal disposal of hazardous waste or radioactive material.
Increased Revenue Sources for the EPF
The Amendments introduce some changes to the mandate and the revenue sources of the Environmental Protection Fund (“EPF”), a fund led by the Minister of Environment, which finances environmental activities, studies and projects to support the state’s environmental protection efforts. In April 2015, amendments to the Executive Regulations of the Environment Law had expanded the revenue sources of the EPF. The recent Amendments to the Law with regards to the EPF are a reiteration of the amendments made to the Executive Regulations. Prior to the amendments of the Regulations, the EPF received money from the state, from donations, from environmental fines and from fees stipulated in the Natural Reserves Law. The Amendments add several new revenue sources, such as fees for licenses and approvals to use coal (with a maximum of 1% of the price of a ton of coal). As noted in the May 2015 Issue of the Egypt Legal Update, this means that the EPF will become a main recipient of fees related to the regulatory role of the ministry of environment. In addition to revenues coming from its role as a collector, the Amendments to the Environment Law have added additional revenue sources for the EPF that emanate from its role as a service provider and an expert house. Under the amended Law, the EPF will now receive revenues from its role in leading and experimental environmental projects that are funded by it and are executed through the ministry of environment or through foreign entities or civil society. In addition, the EPF will receive up to 100’000 EGP in return for reviewing the environmental impact assessment studies that have become an integral part of the environmental regulatory system after the April amendments of the Executive Regulations. In line with the amendments to the Regulations, the new Amendments to the Law have also explicitly permitted the EPF to invest its own proceeds in accordance with the decisions of its board of directors. It is to be noted that the only difference between the revenue sources stipulated in the Executive Regulations and those stipulated in the Law after the Amendments is that the Regulations allow the EPF to perform services (likely, studies and other similar efforts) for other entities and to receive up to 250’000 EGP for such services. This is the only provision that is missing from the recent Amendments to the Law. As previously noted, the significant increase in the revenue sources of the EPF comes without a significant expansion of its mandate, which was stipulated in the Executive Regulations. However, while the previous version of the Environment Law was silent on its mandate, the recent Amendments introduce a new Article stipulating the different roles of the EPF, which include conducting environmental studies, financing relevant projects and reviewing environmental impact assessment studies. Expanding revenue sources without significantly changing the EPF’s mandate may indicate that the government is of the view that the proper fulfilment of such mandate requires a significant increase in funds.
Conclusion
Changes to the Environment Law were primarily made in the context of the decision to allow the import and use of coal, a decision that triggered significant changes to the Executive Regulations in April 2015 in order to impose necessary environmental safeguards. Most notably, the Law imposed severe penalties for the violation of such safeguards, giving more weight to the rules stipulated in the Executive Regulations.   [1] Presidential Decree-Law No. 105/2015 amending Environment Law No. 4/1994; Official Gazette, Issue No. 42(bis)(a), 19 October 2015. [2] Prime Minister's Decree No.964/2015 amending Decree 338/1995, Official Gazette, Issue No. 16 (bis) A, 19 April 2015.
On 19 October 2015, a Decree-Law amending some provisions of the Environment Law was issued by the President.[1] The recent amendments (“Amendments”) are in line with changes made in April 2015 to the Executive Regulations of the Environment Law,[2] which permitted the use of coal provided that certain environmental safeguards are met. The Amendments reflect these changes and introduce strict penalties for failure to comply with the required environmental measures and safeguards.
The Use of Coal
In April 2015, amendments to the Executive Regulations introduced an explicit permission to import and use coal after obtaining required approvals from the Egyptian Environmental Affairs Agency (“EEAA”) and after ensuring compliance with relevant sections of the Executive Regulations (in particular, Annexes 6 and 12). Recent Amendments to the Environment Law reflect these changes. While the original pre-Amendment version of the Law had not included a prohibition on the use of coal (unlike the Regulations, which had included an explicit prohibition until it was amended in April), it had also not included an explicit permission to do so. The recent Amendments introduce a new Article (Article 14(bis)) to the Law, which allows the use of coal after obtaining the permission of the EEAA and adhering to the Executive Regulations. In effect, this introduces a qualified permission in the Law for the use of coal. As noted in the May 2015 Issue of the Egypt Legal Update, the permission to import and use coal is not a general one, but – according to the Executive Regulations - is specific to certain sectors. These are: the cement clinker industry, electricity producers, producers of coke, steel and basic aluminum. In addition to this set list, the Prime Minister may issue decisions to allow other entities to import and use coal.
A Drastic Increase in Penalties
The recent Amendments to the Environment Law introduced strict penalties for failure to obtain required permissions and approvals to import or use coal, and for failure to abide by environmental standards set out in the Executive Regulations while importing or using it. According to the newly introduced Article 86 (bis), importing or using coal without a license carries a maximum penalty of five years’ imprisonment or a fine ranging from 1 – 5 million EGP. For those who hold the required licenses but fail to take all required measures and safeguards included in the Executive Regulations to ensure that no environmental damage is caused, the Article imposes a penalty of up to six months’ imprisonment and a fine ranging from 500’000 – 3 million EGP. Prior to the new Amendments, the only action that carried similarly long prison sentences were those related to the illegal disposal of hazardous waste or radioactive material.
Increased Revenue Sources for the EPF
The Amendments introduce some changes to the mandate and the revenue sources of the Environmental Protection Fund (“EPF”), a fund led by the Minister of Environment, which finances environmental activities, studies and projects to support the state’s environmental protection efforts. In April 2015, amendments to the Executive Regulations of the Environment Law had expanded the revenue sources of the EPF. The recent Amendments to the Law with regards to the EPF are a reiteration of the amendments made to the Executive Regulations. Prior to the amendments of the Regulations, the EPF received money from the state, from donations, from environmental fines and from fees stipulated in the Natural Reserves Law. The Amendments add several new revenue sources, such as fees for licenses and approvals to use coal (with a maximum of 1% of the price of a ton of coal). As noted in the May 2015 Issue of the Egypt Legal Update, this means that the EPF will become a main recipient of fees related to the regulatory role of the ministry of environment. In addition to revenues coming from its role as a collector, the Amendments to the Environment Law have added additional revenue sources for the EPF that emanate from its role as a service provider and an expert house. Under the amended Law, the EPF will now receive revenues from its role in leading and experimental environmental projects that are funded by it and are executed through the ministry of environment or through foreign entities or civil society. In addition, the EPF will receive up to 100’000 EGP in return for reviewing the environmental impact assessment studies that have become an integral part of the environmental regulatory system after the April amendments of the Executive Regulations. In line with the amendments to the Regulations, the new Amendments to the Law have also explicitly permitted the EPF to invest its own proceeds in accordance with the decisions of its board of directors. It is to be noted that the only difference between the revenue sources stipulated in the Executive Regulations and those stipulated in the Law after the Amendments is that the Regulations allow the EPF to perform services (likely, studies and other similar efforts) for other entities and to receive up to 250’000 EGP for such services. This is the only provision that is missing from the recent Amendments to the Law. As previously noted, the significant increase in the revenue sources of the EPF comes without a significant expansion of its mandate, which was stipulated in the Executive Regulations. However, while the previous version of the Environment Law was silent on its mandate, the recent Amendments introduce a new Article stipulating the different roles of the EPF, which include conducting environmental studies, financing relevant projects and reviewing environmental impact assessment studies. Expanding revenue sources without significantly changing the EPF’s mandate may indicate that the government is of the view that the proper fulfilment of such mandate requires a significant increase in funds.
Conclusion
Changes to the Environment Law were primarily made in the context of the decision to allow the import and use of coal, a decision that triggered significant changes to the Executive Regulations in April 2015 in order to impose necessary environmental safeguards. Most notably, the Law imposed severe penalties for the violation of such safeguards, giving more weight to the rules stipulated in the Executive Regulations.   [1] Presidential Decree-Law No. 105/2015 amending Environment Law No. 4/1994; Official Gazette, Issue No. 42(bis)(a), 19 October 2015. [2] Prime Minister's Decree No.964/2015 amending Decree 338/1995, Official Gazette, Issue No. 16 (bis) A, 19 April 2015.