Finland – Response to Case 2008
0. General – Legislation
In Finland land use planning is regulated by the Land Use Planning and Building Act (132/1999, LUPBA) and the Land Use Planning and Building Decree (895/1999). Rules concerning soil pollution and clean up issues are included in the Environmental Protection Act (86/2000, EPA) and in the Environment¬al Protection Decree (169/2000) and in special the Government Decree on the Assessment of Soil Con¬tamination and Remediation Needs (214/2007). This legislation can be found also in English from Finlex (http://www.finlex.fi/en/), but the texts are not completely up to date.
1. What kind of regulation or case law exists in your country when a polluted site must be decontaminated, and the owner (who to simplify matters is also the author of the pollution) is bankrupt and unable to pay for the clean up?
There is no special legislation concerning bankrupt situations on polluted sites in Finnish legislation. According to the Bankrupt Act (120/2004) and the Debt Payment Order Act (1578/1992) in bankrupt situation clean up costs do not have any kind of special preference. In fact they have a very weak position on the preference list where they are considered as “mass debt”.
The main rule according to section 75 of the EPA is that any party whose activities have caused the contamination of soil or groundwater is required to restore said soil or groundwater to a condition that will not cause harm to health or the environment or represent a hazard to the environment. If the party that has caused the contamination of soil cannot be established or reached, or cannot be prevailed upon to fulfil its remediation duty, and if the contamination has occurred with the consent of the holder of the area or said holder has known, or should have known, the state of the area when it was acquired, said holder of the area shall restore the soil in so far as this is not clearly unreason¬able. In so far as the holder of the polluted area cannot be required to treat contaminated soil, the municipality shall establish the need for and carry out soil remediation. In this case it would be local municipalities responsibility to cover the clean up costs, because the polluter who is also land owner is unable to pay.
If the bankruptcy estate has carried on activity on the polluted site, the bankruptcy estate itself might be responsible for the clean up, despite the fact that the pollution has taken place before coming into force of the current legislation. This is somewhat based on the Supreme Administrative Court decision of KHO 2003:51, which was not directly a soil clean up case; and decision KHO 28.4.2005 taltio 1006.
The resources of local municipalities are always very limited and in practice this kind of situations soil clean up costs will be covered by state funds and works are carried out as “state waste treatment works”. Also state´s means are scarce, annually there has been 2,5 million euros for these purposes (year 2008 and budget for 2009). The rules are different, if pollution has taken place before the existing legislation. This means that responsibility for soil pollution that has taken place after 1.1.1994 is relatively clear. The existing Waste Act (1072/1993), which included same rules as EPA at the moment, came into force 1.1.1994 and these provisions were transferred into EPA in 2000. Concerning “old soil pollution” the legal basis is not clear according to legislation, but a few decisions of Supreme Administrative Court exists, which can give some kind of guidance. If the circumstances are different the result could be something else.
From material point of view a great importance is the Government Decree on the Assessment of Soil Contamination and Remediation Needs, which contains special threshold and guideline values (tables in annex of the Decree).
2. Is the new plan/development and environmental impact assessment an easy or difficult procedure? Does it require a lot of time? Is it expensive?
The new land use plan – in this case local detailed plan – is normally relatively routine procedure. The circumstances in this case are not normal, but from the planning point of view the task is not extremely difficult.
I think that for both of the areas it is relatively clear that at least payer of the planning costs and infrastructure costs should be worked out, before the local municipality decides to begin the planning procedure. Very often also value increase sharing between owner and municipality will be dealt before the actual plan¬ning procedure will start. These matters can be dealt with couple of alternative ways, but very often economical issues are settled in land use agreements, which are special kinds of agree¬ments that can include “almost anything”. Normally the main things are the future use purpose of the area and permitted building volume and the sum of money (or e.g. land) that land owner pays to local municipality. The result of the agreement is normally that the land owner pays planning costs and community costs (streets, roads, parks, etc. infrastructure) and gives some of the increase in value to municipality (quite normally the deal is 50/50). In economic terms the result naturally varies depending on the individual circumstances.
From the legal point of view, there is only one section of the LUPBA which includes very general rules concerning land use agreements. According to section 91 b(1) of the LUPBA, a local authority may enter into agreements on planning and implementing plans (land use agreement). However, land use agreements cannot be binding on the content of plans. The only rule concerning the content of the land use agreement is section 91 b(2) and according to it notwithstanding the provisions of this chapter on development compensation, land use agreements may be used to agree more comprehensively on the mutual rights and obligations of the parties to the agreement. This section refers specially to section 91 c of the LUPBA, which includes general provisions concerning development compensations. The sections 91 d to 91 p include special provisions concerning development compensations. It is very interest-ing that these relatively new rules, that came in to force 1.7.2003, have not been used in practice. So, there is no administrative practice (or court practice) on application of these de-velopment compensations, and economical issues are in most of the cases arranged by land use agreements. This was also the purpose of legislator which can be seen from sections 91 c(1) and 91 a(1) of the LUPBA. According section 91 c(1), when agreement is not reached with landowners concerning their sharing in the costs of community building, the local authority may collect from the landowners a share of the estimated costs of community building that contribute to the development of the plan area relative to the increase in plot value brought about by the building rights, increase in building rights or change of permiss¬ible use based on the local detailed plan (development compensation). And according to section 91 a(1) landowners’ duty to share in the costs of community building. A landowner, in an area for which a local detailed plan is to be drawn up, who stands to gain substantial benefit from the plan is obliged to share in the costs incurred by the local authority from community building as laid down according to chapter 12 a of the LUPBA. An agreement should be reached with the landowner on sharing in the costs. It should be emphasized that section 91 a and the whole chapter 12 a, which includes provisions on compensation of costs incurred by local authorities from community building, is based on cost correlation principle, although the practise is very variegated.
The whole procedure takes some time. It can be divided into pre planning period: negotiations of the land use agreement; planning period: preparation of the plan including EIA (done according to the LUPBA, by the municipality or consultant firm), negotiations with the regional environmental centre, decision time at local municipality; and possible court appeal period: appeal regional administrative court and supreme administrative court.
The impact assessment concerning land use planning is in Finland done according to the LUPBA, which was relatively slightly modified in 2005 when Finland was implementing SEA-Directive 2001/42/EC. The main and very general provision on impact assessment is section 9 of the LUPBA. According to it, plans must be founded on sufficient studies and reports and when a plan is drawn up, environmental impact of implementing the plan, including socio-economic, social, cultural and other impacts, must be assessed to the necessary extent. Such an assessment must cover the entire area where the plan is expected to have material impact. Section 1 of the Land Use Planning and Building Decree includes more specific rules on impact assessment, but from practical point of view guidelines given by the Ministry of Environment are more important.
In terms of total time spending planning of a local detailed plan normally takes 1 to 2 years, depending the size of area and other circumstances (e.g. how demanding the environmental and other impacts assessment is). It is relatively difficult to evaluate the planning costs, because they vary a lot and there are many ways to calculate them. For instance administrative work is not normally counted and court costs are never taken into account. In this kind of case with polluted soil, the costs are much higher, because there will be a need for special kinds of examinations which are costly. Normally direct planning costs are from thousands to hundred of thousands euros. Compared to costs of community building, which are infrastructure building costs, the direct planning costs are not very high. In Finland local municipalities also very often include also indirect community building costs, which are e.g. need for new kindergartens, schools and medical centres, to total amount of planning costs and they also try to get some kind of compensation from the land owner from the increase in value. It should also be mentioned that according to legislation (namely the Act on Water Services,119/2001, which is based on EU water directives, and includes cost correlation principle) costs of water and sewer can not be included in land use agreements, but in practice this is done relatively often.
In this case, agricultural land and industrial land would be dealt slightly different in all phases of land use planning, specially related to land use agreement. Concerning agricultural land, the main points would be sharing of the increase in value between owner and local municipality and sharing of the infrastructure costs. Related to industrial land there would probably be also a question of clean-up on the negotiation table. The result of these negotiations would normally be that clean-up costs would be decrease land owners share of the increase in value.
In planning terms it is to be noted that there might be a local master plan in which the agricultural land is indicated for agricultural purposes. This is not necessar¬ily the case in all situations, but it is presumed here. Specially if the area would be extensive, there will be need for renewal of the local master plan, and this can take much more time (at least 1-2 years) even done by partial change.
3. Who has a legal standing to bring challenges to zoning decisions? At which stage of the zoning procedures can those challenges be brought? What is in general the scope of judicial review, and what remedies can be ordered? If the court finds a the zoning process or decision illegal, can it nevertheless let it stand and allow only for damages to be paid?
Traditionally “almost everyone” has a legal standing to challenge planning decisions according to the LUPBA and the Local Government Act (365/1995), which includes main rules on so called “communal appeal”. In Finland, there is now tendency to diminish these rights at appeal phase, but so far the results are moderate. Interested parties have possibilities to challenge land use plans during the planning procedure (objections) and after the final decision of the local municipality (appeal to administrative courts).
The interaction between the citizen and the planner (municipal planning officer or consult firm) in drawing up a plan includes also right to state opinion. According to section 62 of the LUPBA, planning procedures must be organized and the principles, objectives and goals and possible alternatives of planning publicized so that the landowners in the area and those on whose living, working or other conditions the plan may have a substantial impact, and the authorities and corporations whose sphere of activity the planning involves (interested party), have the opportunity to participate in preparing the plan, estimate its impact and state their opinion on it, in writing or orally. Before the planning procedure gets on, there should be special participation and assessment scheme according to section 63 of the LUPBA.
The final stage in opinion expression is when the plan has reached proposal phase. According to section 65 of the LUPBA the plan proposal shall be presented in public. The presentation of the proposal must be publicized in an appropriate manner in view of the purpose and significance of the plan. Members of the municipality and interested parties shall be provided with an opportunity to express their opinion on the matter (normally objection). The local authority’s reasoned opinion on the objection shall be made known to objectors who have so requested in writing and, at the same time, provided their address.
It should also be noted that in Finland the opinion of the regional environmental centre is very important in land use planning procedures. There are obligation to organise negotiation between local municipality and regional environmental centre. According to section 66(2) of the LUBPA, in drafting plans which concern national or important regional land use object-ives, or which are otherwise important in terms of land use, natural values, cultural environ-ment or government authorities’ implementing obligations shall be prepared in contact with the regional environment centre.
According to section 181, decisions to approve a local master plan, a local detailed plan or a building ordinance are appealed to an administrative court as laid down in the Local Government Act. The Local Government Act is based on “actio polularis” idea and appeals are limited to legal matters. In juridical discretion also material and not only procedural aspects can taken into consideration.
In 2006 the LUPBA was changed (section 181(5), 1441/2006) such, that decisions of admin-istrative court concerning local detailed plans can not be appealed to supreme administrative court if the main land use has been settled in local master plan. At the moment there is proposal from the government at the Parliament of Finland related to this section 181 of the LUPBA. The proposal (HE 102/2008) contains an inclusion of the leave to appeal -system into these matters and at the moment there is relatively lively discussion ongoing concerning these matters. It should be mentioned that the Supreme Administrative Court is against to this kind of system.
According to section 191 of the LUPBA, in addition to what is laid down on the right of appeal in section 92 of the Local Government Act, regional environment centres and other authorities, in questions within their sphere of administration, have the right to appeal decisions by which a plan or a building ordinance is approved. According to section 92 of the Local Government Act right of appeal against communal decisions, which land use plans are based on local municipalities, belong to interested parties and members of local municipality. Members of the local municipality are according to section 4 of the Local Government Act inhabitants of the local municipality, all communities (associations, companies, etc.) that have domicile in local municipality and persons (natural or juridical) that own land in local municipality. These provisions mean that right to appeal is very wide in Finland.
In addition to general rules of the Local Government Act according to section 191(2) of the LUPBA, registered local and regional organizations are entitled, when the matter concerns their sphere of activity, to appeal decisions concerning the approval of a plan or building or-dinance within the area in which they operate. Nationally active organizations are also entitled to appeal decisions to approve regional plans if they contravene national land use objectives.
In 2006 the LUPBA was changed (section 191(3), 1441/2006) so, that against decisions on “minor” local detailed plans the right to appeal is now limited. In these cases – minor local detailed plans – right to appeal belongs only to interested parties and not to members of the local municipality and other above mentioned organisations.
It should also be mentioned that only local authorities are entitled to appeal a decision of the administrative court revoking the local authority’s decision to approve a land use plan or a building ordinance (section 191(4) of the LUPBA). If a detailed shore plan has been drawn up by a landowner, however, the landowner is entitled to appeal the decision of the administrative court.
As mentioned above, in principle juridical review in administrative court is limited to legal matters according to the Local Government Act and only juridical discretion is possible. This excludes pure expedience consideration at the administrative courts, but the matter is considered from procedural and material point of view. Material issues related to land use planning are very relative by nature, because the rules are very open to interpretation. For instance section 54 of the LUPBA gives material legal requirements of a local detailed plan. According to first sentence of it “the local detailed plan shall be drawn up so as to create the preconditions for a healthy, safe and pleasant living environment, locally available services and the organization of traffic”. Therefore it is a legal matter whether the plan creates pleasant living environment or not. In practice the Supreme Administrative Court practice has given also room for local autonomy and local considerations.
If the court finds planning decision illegal, it will repeal the whole decision and return the matter back to local municipality. According to section 203 of the LUPBA the appeal authority may make only corrective adjustments to a land use plan, but if the local municipality gives its approval it can also make minor adjustments to the local master plan or local detailed plan. These adjustments are not possible if them affect to legal standing of interested parties.
If the court finds a the planning process or decision illegal in Finland, it can not let the decision standing and order damages to be paid.
Ari Ekroos, Finland