Deloitte in the News
Companies in Russia Face New Environmental Impact Reporting Requirements
- Russia updates declaration form to report on environmental impact
- 10 March deadline applies to foreign and domestic companies
By Natalia Suvorova
Companies doing business in Russia face a paperwork deadline this week to declare how they would make “environmental impact payments” for any excessive pollutants they put into the air or water.
Companies had a tight window—only five days—to fill out the electronic forms to declare if they release a certain level of pollutants into the atmosphere from stationary sources (including associated petroleum gas); discharge pollutants into bodies of water; or store or dispose of municipal solid waste.
“For us, this is problematic, because our people are now working hard to study all new parts and make the required changes, but in fact we are able to file everything on time”, Mikhail Maltsev, head of synthetic detergent production at Red Umbrella Group, a detergent manufacturer, told Bloomberg BNA by phone on 7 March.
The government exempts companies that release less than 10 tonnes of emissions a year, do not emit radioactive substances or do not discharge pollutants into waters.
20 February Announcement
The requirement from the Ministry of Natural Resources was announced on 20 February and went into effect on 5 March, when the forms became available online. Companies have until 10 March to fill out the electronic forms.
Environmental impact payments are gaining traction in Russia as the country upgrades and toughens its environmental legislation.
The main costs of payments for environmental impact in Russia in this instance will be borne by industrial enterprises, “Engaged in the production of chemical and metallurgical products, coke and petroleum products, rubber and plastic products, electricity”, Ivan Kukhnin, Head of Sustainable Services at Deloitte CIS, said in email of 7 March to Bloomberg BNA.
Slowly Revamping Environmental Legislation
Companies in Russia—domestic and foreign—have been obliged to pay these environmental impact payments since 2002, but significant amendments came into effect at the start of last year.
Companies paid 26.8 billion roubles ($459 million) for negative environmental impacts in 2015, 3 percent less than in 2014, according to the Ministry of Natural Resources. Companies had until March 1 to pay any penalties for environmental damage committed last year.
As environmental legislation continues to develop in Russia, companies should, “Expect the appearance of new forms of reporting, [and] the introduction of new, revised categories of emissions and wastes, and [payment] coefficients”, Kukhnin said.
Failure to Comply
Companies will have to correctly calculate and prepare the data in order to submit the form on time to Rosprirodnadzor, Russia's environmental watchdog, according to Kukhnin.
Providing incorrect data in the declaration on environmental impact or failure to file it on time is punishable by relatively small fines in the range of 20,000 rubles ($340) to 80,000 rubles ($1,300) for companies, said Diana Obukhova, deputy director at the Legal Center for Industrial Ecology, a Moscow-based firm that consults businesses on environmental issues.
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For More Information
The order on filing a declaration on payment for negative environmental impact is available, in Russian, at http://src.bna.com/mPh.