Additional Environmental Regulations for the Use of Coal
The use of coal as a source of energy has sparked considerable debate in Egypt for over a year. The decision to use coal was made by the Cabinet of Ministers in April 2014. Since then, growing concerns about potential environmental and health hazards have forced the Government to give a number of reassurances and undertake a series of environmental protection measures. This culminated in the April 2015 significant amendments to the Executive Regulations of the Environment Law, which imposed a number of environmental restrictions and procedures related to the use of coal, and increased the legal weight given to environmental impact studies and other permits issued by the Ministry of Environment. The amendments to the Executive Regulations were reviewed in detail in our May issue of the Egypt Legal Update.
The New Decision
A few months after these amendments, on 24 August 2015, the Minister of Environment issued a further decision (the "
Decision"),
[1] which requires ports to adhere to specific regulations when dealing with coal or coke. The new Decision classifies ports into two categories: a) high environmental sensitivity; and b) low environmental sensitivity. The high sensitivity ports, which are currently only the Dekhila, Sokhna and Safaga ports, are obliged, in accordance with the Decision, to follow a set of standards, which stipulate the specific process that must be used in unloading and storing. For instance, while the amended Executive Regulations allowed two different processes of unloading, the new Decision allows only for one process (closed helices) for ports with a high degree of environmental sensitivity.
The Decision explicitly extends the application of the Executive Regulations to ports. This may effectively be a mere reiteration since the scope of the amended Regulations extends to a list of activities, which include unloading and storing at ports. The Regulations had also explicitly specified that legal responsibility in adhering to the relevant standards falls on the shoulders of companies operating in storing and loading coal. However, the new Decision’s language may be read to impose a specific legal obligation on the port authorities themselves, in addition to any entity using these ports. The Decision also reaffirms the obligation on all relevant governmental authorities not to provide any licenses for loading/unloading, storing, circulating or transporting coal or coke until the applicant has obtained all necessary environmental permits. In enforcing this, the Decision establishes joint committees between environmental protection department at the port authorities and the Egyptian Environmental Affairs Agency.
| “The new Decision allows a grace period for entities dealing with coal in ports to present a study detailing how they plan to comply with the new standards” |
It is to be noted that the Decision allows a grace/transitional period for entities performing any coal-related activities in ports to present a study detailing how they plan to comply with the new standards. This period extends to six months “from the date of the issuance of the Executive Regulations” – a phrasing which raises a few questions, since the Regulations were issued in 1995. It is most likely that the six months period is meant to start from the enactment of the 20 April 2015 amendments, which included detailed standards related to the use of coal, ending on 20 October 2015. This means, however, that the new Decision in fact only allows for a two months grace period. This needs further clarification from the Ministry of Environment, since the amended Executive Regulations had already given “entities using coal” (which according to the Regulations does not explicitly include companies active in the storage and loading fields) a period of six months to present such study. The same Regulations, however, extended such period to one year (renewable for a further year provided approval by the EEAA) to entities working on transportation and unloading. For such entities, however, the drafting of the Regulations seems to suggest that actual compliance (and not just a study) needs to be achieved within a year.
Conclusion
The recent Decision by the Ministry of Environment regulating the use of coal in high and low sensitivity ports is a positive step, indicating an interest in providing environmental safeguards. This follows a more detailed effort done in April 2015 through the amendment of the Executive Regulations to the Environment Law, which included a detailed set of standards which will apply to different stages of the coal usage cycle. While this is welcome, it must be noted that the drafting of the Regulations and the recent Decision both raise several questions, specifically with regards to the grace/transition period during which existing entities will have to comply with the new standards.
Furthermore, the April 2015 amendments created some anomalies which still cast some doubt on the integrity of the environmental regulatory framework. This includes the fact that the Environmental Protection Fund (EPF) receives an allegedly significant fee when it issues permits to use coal, reaching up to 1% of the value of a ton of the coal in question. This may potentially raise conflict of interest issues.
[1] Minister of Environment's Decision No. 211/2015 adhering to Standards and Regulations Related to the Circulation of Coal and Coke in Egyptian Ports; Official Gazette, Issue No. 193, 24 August 2015.
The use of coal as a source of energy has sparked considerable debate in Egypt for over a year. The decision to use coal was made by the Cabinet of Ministers in April 2014. Since then, growing concerns about potential environmental and health hazards have forced the Government to give a number of reassurances and undertake a series of environmental protection measures. This culminated in the April 2015 significant amendments to the Executive Regulations of the Environment Law, which imposed a number of environmental restrictions and procedures related to the use of coal, and increased the legal weight given to environmental impact studies and other permits issued by the Ministry of Environment. The amendments to the Executive Regulations were reviewed in detail in our May issue of the Egypt Legal Update.
The New Decision
A few months after these amendments, on 24 August 2015, the Minister of Environment issued a further decision (the "
Decision"),
[1] which requires ports to adhere to specific regulations when dealing with coal or coke. The new Decision classifies ports into two categories: a) high environmental sensitivity; and b) low environmental sensitivity. The high sensitivity ports, which are currently only the Dekhila, Sokhna and Safaga ports, are obliged, in accordance with the Decision, to follow a set of standards, which stipulate the specific process that must be used in unloading and storing. For instance, while the amended Executive Regulations allowed two different processes of unloading, the new Decision allows only for one process (closed helices) for ports with a high degree of environmental sensitivity.
The Decision explicitly extends the application of the Executive Regulations to ports. This may effectively be a mere reiteration since the scope of the amended Regulations extends to a list of activities, which include unloading and storing at ports. The Regulations had also explicitly specified that legal responsibility in adhering to the relevant standards falls on the shoulders of companies operating in storing and loading coal. However, the new Decision’s language may be read to impose a specific legal obligation on the port authorities themselves, in addition to any entity using these ports. The Decision also reaffirms the obligation on all relevant governmental authorities not to provide any licenses for loading/unloading, storing, circulating or transporting coal or coke until the applicant has obtained all necessary environmental permits. In enforcing this, the Decision establishes joint committees between environmental protection department at the port authorities and the Egyptian Environmental Affairs Agency.
| “The new Decision allows a grace period for entities dealing with coal in ports to present a study detailing how they plan to comply with the new standards” |
It is to be noted that the Decision allows a grace/transitional period for entities performing any coal-related activities in ports to present a study detailing how they plan to comply with the new standards. This period extends to six months “from the date of the issuance of the Executive Regulations” – a phrasing which raises a few questions, since the Regulations were issued in 1995. It is most likely that the six months period is meant to start from the enactment of the 20 April 2015 amendments, which included detailed standards related to the use of coal, ending on 20 October 2015. This means, however, that the new Decision in fact only allows for a two months grace period. This needs further clarification from the Ministry of Environment, since the amended Executive Regulations had already given “entities using coal” (which according to the Regulations does not explicitly include companies active in the storage and loading fields) a period of six months to present such study. The same Regulations, however, extended such period to one year (renewable for a further year provided approval by the EEAA) to entities working on transportation and unloading. For such entities, however, the drafting of the Regulations seems to suggest that actual compliance (and not just a study) needs to be achieved within a year.
Conclusion
The recent Decision by the Ministry of Environment regulating the use of coal in high and low sensitivity ports is a positive step, indicating an interest in providing environmental safeguards. This follows a more detailed effort done in April 2015 through the amendment of the Executive Regulations to the Environment Law, which included a detailed set of standards which will apply to different stages of the coal usage cycle. While this is welcome, it must be noted that the drafting of the Regulations and the recent Decision both raise several questions, specifically with regards to the grace/transition period during which existing entities will have to comply with the new standards.
Furthermore, the April 2015 amendments created some anomalies which still cast some doubt on the integrity of the environmental regulatory framework. This includes the fact that the Environmental Protection Fund (EPF) receives an allegedly significant fee when it issues permits to use coal, reaching up to 1% of the value of a ton of the coal in question. This may potentially raise conflict of interest issues.
[1] Minister of Environment's Decision No. 211/2015 adhering to Standards and Regulations Related to the Circulation of Coal and Coke in Egyptian Ports; Official Gazette, Issue No. 193, 24 August 2015.