In the current context, marked by an ever-increasing impact of climate changes and under the umbrella of EU strategies involving soil protection-related issues (most notably the Soil Protection Strategy[1]   and the EU Biodiversity Strategy for 2030[2] - a core part of the European Green Deal), the Romanian authorities have started to take steps in the direction of acknowledging, by means of a dedicated legal framework and mechanisms, the paramount importance of soil, for the purpose of ultimately supporting a sustainable development of this non-renewable natural resource.

Thus, two laws dedicated to soil protection and remedy of contamination have come into force over the past two years in Romania. Chronologically, they are:

  • Law no. 74/2019 regarding the management of potentially contaminated and contaminated sites (hereinafter referred to as “Law 74/2019”), effective as of May 6th, 2019; and
  • Law no. 246/2020 regarding the use, conservation and protection of soil (hereinafter referred to as ‘Law 246/2020’), effective as of January 1st, 2021.

While the former focuses on potentially contaminated and contaminated sites, setting forth the principles and framework for the mechanisms and procedures to be used in view of identifying such sites and, ultimately, taking measures to remedy contamination, the latter seems to have a much broader scope, creating a framework for the analysis and monitoring of soil quality, providing for general obligations and responsibilities, as well as remedy measures where soil damage has been caused by either natural or anthropic factors.

Both laws are expected to impact the performance of economic activities, as well as a significant number of market transactions, including asset and business transfers, as they provide for several obligations incumbent on landowners/holders and operators, some of which are applicable throughout the performance of activities, while others are applicable only at certain times, such as asset transfer or activities shut-down. This impact may be further amplified by the rather broad and uncertain (at least at this point in time) scope of regulations when it comes to determining the types of sites subject thereto.

Basically, both pieces of legislation provide for soil assessment (from different perspectives – contamination under Law 74/2019 and soil quality under Law 246/2020), in a centralized and organized manner, the preparation of relevant national databases and corresponding compliance, remedy and monitoring obligations. More specifically, each of the two laws may be seen as setting forth a system with 2 main components:

  1. assessment and inventory of sites by authorities; and
  2. obligations of landowners/holders/economic operators of such sites.

Absent specific provisions governing the timeframe prior to completion of the assessment process to be carried out by the authorities as per (i) above, this system may raise questions as to the extent to which individual obligations under (ii) will apply during such period; in practice, this has the potential to result in different approaches and manners of applying the legal provisions. As regards Law 246/2020 in particular, this regulation can likely be expected to raise many questions in practice, given the rather deficient manner of regulating the mechanisms it provides for, without any detailed provisions, including on aspects such as the financial guarantee to be created and maintained by holders of land where economic activities are being carried out, the right of landowners to certify and approve the manner in which soil is to be used.

Without aiming to provide a detailed account of the legal provisions under review, the comments below call attention to some of the main provisions in the two pieces of legislation, mainly insofar as scope and mechanisms are concerned, with a focus on where we stand in terms of actual implementation and potential overlaps.

  • Status of preparatory measures for implementation of the laws

Currently, while procedures at local level may have started, there is no centralized information available as to the progress made at national level and the list of potentially contaminated sites still remains to be established and made public as per Law 74/2019. The same goes for the methodology for contamination remedy.

In its turn, Law 246/2020 requires that Norms and Technical Orders be issued for actual implementation and a Scientific Committee be set up, all within a 12-month term as of the enforcement of the law. Some non-correlations within the law may trigger even more delays in the issuance of the expected norms, as such norms are to be issued upon proposal of the Scientific Committee.

  • Types of sites subject to the legal provisions

As briefly anticipated above, the distinction appears to be rather straightforward as regards the categories of land subject to the 2 different sets of legal provisions:

  1. Law 246/2020 has a general applicability, covering all types of land held, regardless of title and category of use (except for potentially contaminated or contaminated sites and for soil degraded due to activities of entities acting in the defense sector);
  2. Law 74/2019 deals only with potentially contaminated and contaminated sites. Such categories include: (i) land contaminated by anthropic activities listed in an annex to the law (among which industrial activities, waste storage, certain activities involving hazardous substances, gas stations, wastewater collection and treatment, oil extraction), (ii) land affected by accidents that lead to contamination, except for accidents involving radioactive substances, (iii) land under the management of institutions of the defense system, public order and national security, provided that they do not jeopardize the national security and/or national secrets, and (iv) land occupied by landfills after the closure and post-closure monitoring period.

However, from a practical perspective, there may still be questions as to the scope of the two laws and potential overlaps.

For instance, potentially contaminated sites are defined by Law 74/2019 as sites where one of the anthropic activities listed in the annex to the law are being or have been carried out, but, at the same time, Law 74/2019 further sets forth that such sites are to be identified by local authorities and EPAs according to a procedure provided therein. Pending finalization of such inventory, will a site where an activity listed among those subject to Law 74/2019 has been/is being carried out, automatically become subject to the requirements of this Law? Or does the law become applicable in respect thereof only after the site has been identified as such by the relevant authorities as per the procedure above?

Furthermore, where does the line between damage due to anthropic factors (triggering the applicability of Law 246/2020) and potential contamination (triggering the applicability of Law 74/2019) lie? How is it to be determined in practice? Conversely, may a site where the activities listed under Law 74/2019 have been carried out, still be subject to remedy measures under Law 246/2020 (for example due to the incidence of natural factors), as long as contamination has not been confirmed? Is it possible that both Law 74/2019 and Law 246/2020 should need to be followed for the transfer of an asset on a land plot where an industrial activity from those listed in annex to Law 74/2019 has been carried out?

While for now, pending completion of the inventory of potentially contaminated/contaminated sites under Law 74/2019 and the issuance of secondary legislation under Law 246/2020, the above may seem rather theoretical questions with no actual impact on transactions, once the legal framework under Law 246/2020 has been finalized with the enactment of the expected secondary legislation, this will no longer be the case.

  • Obligations for landowners/holders

In addition to what may be called as general obligations (applicable throughout the performance of business activities), the two laws provide for specific obligations with respect to the performance of investigations and soil quality assessment at certain times, such as the transfer of assets or business or shut-down of activities, as well as upon completion of construction works that have affected the soil.

Thus, Law 74/2019 sets forth that the owner or business operator of a potentially contaminated site must notify the relevant EPA and have a preliminary site investigation performed in particular cases (e.g. upon the shut-down of environmental impact activities, activity change or other changes in the legal regime of the site, upon request of the relevant EPA, following accidents that lead to environment contamination etc.). While in a reasonable interpretation of Law 74/2019, such obligations should be applicable only once a given site has been qualified as potentially contaminated further to the assessment and inventory procedure carried out by the authorities, risks that the competent authorities might view this matter differently and consider that such obligations should have been complied with under the relevant scenarios even before the inventory finalization cannot be fully disregarded. In any case, an additional element of comfort should be that, under Article 10 of Government Emergency Ordinance no. 195/2005 on environmental protection, the EPA must be notified prior to the transfer of such sites where environmental impact activities have been carried out or before the shut-down of the activities carried out thereon and in such a context the EPA would have the opportunity to provide relevant guidance if it deems that such preliminary investigation is required.

On the other hand, according to Law 246/2020, a soil quality certificate must be requested and obtained upon change of the landowner/ transfer of land under any valid title, if the land was used for the following activities: (i) ongoing or new agricultural, silvicultural, zootechnical activities, (ii) ongoing or new industrial and economic activities with a significant soil impact, and (iii) military activities with a significant soil impact. Moreover, the soil quality certificate must be requested and obtained upon the finalization of any works that affected the soil layer. The procedure for obtaining the soil quality certificate is yet to be established by the Scientific Committee. Considering that, as previously mentioned, the relevant provisions for the organization and functioning of the Scientific Committee, as well as the procedures for the issuance of the certificate itself should be issued within 12 months as of January 1st, 2021, in a reasonable interpretation, the obligation to obtain such certificate should not be applicable in the meantime.

To conclude, while the two laws discussed above may be seen as a first step in the direction of creating a legal framework specifically dedicated to soil protection aimed at ultimately remedying soil damage already done and at avoiding further damage, their actual implementation unfortunately remains, at least for a while, subject to the issuance of the secondary legislation mentioned above. Meanwhile, absent clear transitory provisions, we can expect different practices, as well as a certain lack of predictability for the business environment on rather a large scale, considering the wide scope of regulations. Further instructions and guidelines from the authorities pending the issuance of the full set of norms and the performance of the required identification procedures and studies could bring the required clarity and comfo