SWEDEN: An Introduction to Environment

Overall Market Trends  

In Sweden there are currently numerous large projects in the industrial sector, as well as in the field of energy production, focusing on readjusting towards sustainable development. The projects include, inter alia, the establishment of battery factories, production of sustainable hydrogen gas as well as offshore wind power. One of the main challenges for a quick transition to more sustainable development is the long processing times for obtaining environmental permits. The Swedish government has appointed several investigations to streamline the process of obtaining these permits. Yet no apparent solution to the challenges has been presented.

The Permit Process  

The process for obtaining an environmental permit varies depending on the type and general environmental impact of the activity. Not all environmental hazardous operations or activities require a permit. Some are not subject to any procedure of approval nor subject to any notification process.

Before submitting an application for an environmental permit, the applicant must consult with the County Administrative Board, the supervisory authority and individuals that can be assumed to be affected by the activity or operations. If the activity or operations can be assumed to have a significant environmental impact the consultation process also must include concerned municipalities and government agencies as well as organisations and the public that can be assumed to be affected. Joint consultations have recently been in focus due to several cases where permit applications have been dismissed due to shortcomings in the consultation procedure.

If the activity or operations can be assumed to have a significant environmental impact an environmental impact assessment is required. The environmental impact assessment should establish and describe the direct and indirect impacts of the activity or operations to ensure that an adequate assessment of the environmental impacts can be made.

Once the application has been submitted to the Land and Environmental Court or in some cases the Environmental Assessment Delegation at the County Administrative Board, the processing time can vary greatly depending on whether there are conflicting interests and on how complete and adequate the application was when submitted. Before the application is announced by the permitting authority, referral bodies are generally given the opportunity to request supplementation of the application.

A recent trend for larger projects has been to apply for a construction permit, meaning the permitting authority in a separate and prior judgement decides on the permissibility of the project and at the same time permits the start of construction. A construction judgment allows the applicant to start construction while the permit process continues to set out the final conditions for the operations.

Contaminated Areas  

Liability for contaminated areas in Sweden is regulated through a general framework in the Swedish Environmental Code and is therefore an area mainly developed through case law. The liability is extensive in comparison to the minimum requirements of Directive 2004/35/EC on environmental liability with regard to the prevention and remedying of environmental damage, which means that parties interested in exploitation or the purchase of brownfields or potential “legacy sites” should be thorough while investigating and managing possible contaminations.

Liability for contaminated areas is a part of public law and mainly stipulates the obligations an individual has in relation to the Swedish State. Therefore, civil law agreements on the allocation of liability regarding contaminations do not have a direct effect on the legal responsibilities for contaminated areas. Injunctions and claims from authorities and third parties can still be made regardless of what has been agreed between two parties. However, civil law agreements can still be applied in recourse claims or other civil disputes between the parties.

As a general rule, anyone who has contributed to a contamination (an operator) can be held liable for the remediation of such contamination. The liability for operators is generally joint and several. The operator that financed the remedial measures can in turn, through recourse, claim financial compensation from other liable operators. Developers who excavate or otherwise conduct physical work in contaminated areas, which risks leading to a contamination being released and spread to the environment, are regarded as liable operators.

Property owners could have a secondary liability for remediation of contamination on their property. If there are no operators that can perform or finance the remediation of a contaminated property, anyone who acquired the property after 31 December 1998 and was aware, or should have been aware, of the contamination at the time of acquisition can be held liable for remediation. If several property owners are liable, the liability is joint and several between the property owners. Under certain circumstances, a property owner may also be obliged to investigate or take precautionary measures in relation to contaminations on the property. Special rules apply to private residential properties.

Liability for contaminations is not limited in time but liability for contaminations that are older than 30 June 1969 shall be mitigated as a general rule. Liability for contaminations older than 1 January 1960 are generally mitigated to zero liability.

Compensation for Environmental Damage  

Compensation for environmental damage is another field that has been widely discussed recently. The Swedish Environmental Code regulates compensation for environmental damages originating from contamination of water or land, air pollution, noise, vibrations or other similar disturbances. Compensation can be issued for damage to persons and property, as well as pure economic loss that an activity on a real property has caused to its surroundings. As a general rule liability is strict and can be imposed on a party without a finding of fault (such as negligence or tortious intent). Worth noting is that there are no punitive damages under Swedish environmental law.

The party claiming that they are eligible for compensation must show a causal link between the disturbance that the activity has caused and the damage that occurred. Causality can be difficult to prove in cases of damage caused by environmentally hazardous activities, because there are often several plausible contributing factors to the damage. For this reason, it is sufficient that the plaintiff shows that there is a preponderance of probability of causality.

The statute of limitation for environmental damage claims is ten years in Swedish law, counted from when the tortious act occurred. This has been criticised since some damage (especially to a person caused by exposure to hazardous substances, etc) often takes many years to develop. By the time the damage is detected the right to compensation may already be lost. In a recent case regarding drinking water contaminated with PFAS, the district court ruled that the existence of a high PFAS count in the plaintiffs’ blood was damage that made them eligible for compensation, even if the PFAS count had not led to any disease. The judgment was, however, changed by the Court of Appeal stating that the plaintiffs had not suffered any damage that made them eligible for compensation. The Swedish Supreme Court has recently granted the matter a trial permit and therefore it remains to be seen if the Court of Appeals judgement will be changed.