By Ismo Pölönen, Professor of Environmental Law (Bioeconomy and Natural Resources Law) Photo by Saara Österberg.
In March 2023 the EU Commission proposed a Critical Raw Material Act (CRMA). Since then, the proposal has moved from the EU parliamentary reading to trilogue negotiations between the EU Council, Parliament and Commission. The aim is to conclude these negotiations by the end of this year.
The CRMA seeks to ensure a secure and sustainable material supply for the EU. It also aims to diversify imports, reduce strategic dependencies, and promote circularity and sustainability. The background of the regulation lies in the twin green and digital transition policy, which is expected to exponentially increase the demand for base metals, battery materials and rare earth elements. Furthermore, strategic sectors, such as the defense and aerospace industry, are dependent on various and growing number of raw materials. Finally, there are essential supply risks associated with these materials, not least due to the shifts in geopolitics.
Although the CRMA paints a scenario where a substantial portion of critical raw materials would be recycled, the primary source of critical raw materials will predominantly be from mining in the upcoming years, given the notably low recycling rates. Growth in mining within the EU won’t be distributed evenly among its Member States. Instead, it’s likely placing the greatest pressure on the sparsely populated North, home to some of the EU’s rare ecosystems that have, until now, been largely spared from human impacts (industry and intensive land uses). The Fennoscandian Shield is regarded as the richest area of mineral resources in Europe, with Finland and Sweden located at its center. These areas of high pressure include the traditional territory of theSámi, the only indigenous people in the EU. This presents a major challenge for the environmental and social governance of mining in Finland and Sweden, countries with significant potential for critical minerals within the EU (Jonsson et al. 2023).
This blog argues that some of the current formulations of CRMA proposal would likely result in lower quality environmental impact assessments (EIAs) and permit applications, an increased number of mining conflicts and, contrary to its intent, delays to strategic projects. CMRA proposal should be modified to ensure that the deadlines for the EIAs and the permit procedures do not jeopardize the quality of the EIA reports, the review of the adequacy of the permit application and public participation in EIA and permit procedures (including State’s duty to negotiate with the indigenous people).
Fast track for the project type causing the most environmental impacts and conflicts
The CRMA sets targets for domestic extraction, processing, and recycling to bolster capacities within the raw material supply chain and diversify the EU supply by 2030, while also introducing new elements to the governance of critical raw materials. Very centrally, however, the proposed CRMA would represent major regulatory streamlining for extractive industry, often associated with the substantial environmental and social impacts and risk of accidents.
In Finland, for instance, mineral mining has been a project-type that has caused the most significant environmental impacts, risks, and conflicts in over the last decades. These incidents include one of the worst and environmentally most damaging industrial accidents (Talvivaara 2012). Despite substantial efforts, even the most recent, largest-scale mining projects have been associated with significant harmful impacts or a substantial risk of such impacts. In 2022, the Finnish Supreme Administrative Court (FSAC 2022:38) overturned the environmental permit of Sokli mining project due to risks to water quality. In 2023, the EIA of Sakatti multi-metal mine concluded that the impacts of the project would include significant adverse effects to environment (ELY 2023, reasoned conclusion of the EIA authority). The mining sector has also been struggling with the social governance and legitimacy of both mineral exploration and extraction (Pölönen, Allard & Raitio 2020). Over the last decade, new projects have encountered increasingly widespread and fierce opposition in Finland (Pölönen & Leino 2023). The main reasons for the opposition are the traditional territories of indigenous Sámi, sensitive water bodies, nature conservation, reindeer herding and tourism, an association with uranium, lack of communication and stakeholder engagement, and reputation of the companies. (Eerola 2022) Also, the mineral sector in Sweden is suffering from increased conflicts (Raitio et. al. 2020).
Streamlining EIA scoping increases the risks of flaws in EIA reports and related disputes
The proposed CRMA suggests time frames for the different stages of EIA and permit procedures. EIA processes start in many EU countries with a so-called scoping stage. The key function of the scoping is to identify the relevant issues for the impact assessment studies. High quality scoping system also includes a review and comment phase, and forms of stakeholder engagement. These flows of information and interactions are crucial for the overall quality of the EIA. The competent authority cannot typically identify all relevant issues without feedback from other authorities and various stakeholders, including municipalities, local residents, NGOs, and indigenous communities in their traditional territories.
CRMA (art. 11) would require that the project promoter (developer) should request an opinion from the national competent authority on the scope and level of detail of the information to be included in
the EIA report under the EIA Directive. Based on the Commission´s proposal the national competent authority should ensure this opinion is issued as soon as possible and within a time frame of 30 days from the date on which the project promoter submitted its request. The Parliament has proposed only 20 days for this phase while the time limit in Council´s proposal is 45 days.
In practice, all these proposals would mean, that national competent authorities would have very limited time for organizing public participation and preparing scoping advice for the strategic mining project. In this respect Finnish law currently provides more time for this stage: 30 days for the hearings (after the public notice of the scoping document) as a minimum and after that, the EIA authority has 30 days to give its scoping advice. Crucially, given the size, nature and multiple potential impacts of a typical mining project, these time limits are already challenging for both parties, the competent authority and the stakeholders.
The requirement of the proposed CRMA for the mandatory scoping procedure in the strategic projects is well-reasoned, but the timeframe of less than 60 days for scoping is likely to cause poorer quality EIAs. It also increases the risks of conflicts, which is a major challenge for the mining sector already. Reducing the timeframe for early participation and stakeholder engagement decreases the possibility for the strategic projects to gain the social license to operate (SLO). In turn, the lack of SLO substantially weakens the possibility of the mining company to receive a positive land use planning decision from the municipality, which is one of the preconditions for a mining permit in Finland.
A rush in permit application review compromises environmental harm prevention and increases the likelihood of decisions being overturned in court
Under the proposed CRMA (art. 10), the national competent authority should either validate the permit application or request the project promoter to submit a complete application within a very strict time frame. The Commission and the Parliament have proposed only 30 days and the Council 45 days for this critical stage of the permitting path.
The experiences with the environmental permitting and management of mines and other activities have clearly shown that this is not the right stage for substantial timesaving. The proposed timeframe for permit application review likely wouldn’t provide adequate time to identify and determine the need for additional information. During the last decades, mines have been significantly growing in complexity, size, and impacted areas. The size of the mine typically correlates with the volume of mining waste and the magnitude of the environmental impacts. In the changing climate, with increased periods of excessive rainfall and dry seasons, successful permitting of a large size mine is a highly complicated exercise. A permit application may have several gaps, pinpointing these often requires consultations with numerous experts and stakeholders. Proper hearings cannot be effectively conducted within the timeframe in the proposed CRMA.
The timeframe for this phase should offer a significantly larger degree of flexibility for the competent authority (e.g. 90-120 days). Hastily progressing at this stage can clearly undermine the permit procedure’s ability to prevent significant environmental and social harm. This can also easily lead to further delays at a later phase of permitting. In the case of Finland, it is evident that courts will persistently scrutinize every aspect of the permit procedure (including the adequacy of the permit application) thoroughly, as demonstrated by cases like FSAC 2022:38, irrespective of the CMRA. If the permit authority fails to require pertinent studies due to time constraints in the permit procedure, it could lead to the most extended form of delay: restarting the permit procedure after potentially years of court proceedings.
There is also a need for a brake pedal
Green transition with substantially intensified mineral exploitation helps in achieving EU´s climate goals but also entails direct environmental and social harms and risks in many regions. In the fragile northern environment the harm can be significant and irreversible. Overall sustainability calls for the use of brake pedal in sensitive regions. Beyond streamlining, which is also clearly needed, we need stronger legal measures that protect delicate environments from the significant harmful impacts of mining. This protection should be evident not just in legislation (law in books) but also in its execution (law in action). Environmental governance of mining is often not struggling because of the gaps in the law itself, but because of poor management practices and oversight failures by the authorities (shortcomings in implementation).
EU law provides a solid foundation for environmental protection in its Member States. However, these states may fail to meet the primary objectives of environmental laws if they frequently employ the exception rules provided by the EU Directives, particularly the derogation provisions under the Habitat Directive and Water Framework Directive. Significantly increased mining, paired with the potential for exception permits, poses clear risks to environmental quality across various regions. This includes threats to water quality, in particular, to the rare water bodies in Finland that are classified as excellent in water quality. Same concern applies to the endangered habitats within the Natura 2000 sites. Relying on the exception permits can often result in the loss of irreplaceable natural values that can’t be compensated on a one-to-one basis.
For this reason, we need to keep scrutinizing and updating the environmental norms on mining. The consideration should include unconditional bans on causing environmental degradation in the most sensitive regions. Ideally, we should have a smartly streamlined permitting process for well-planned mines, coupled with a fast-track system to decline activities that pose unacceptable environmental and social risks in vulnerable areas.
Ismo Pölönen
Professor of Environmental Law
Law School
University of Eastern Finland
This blog has been written as part of the project “Resilience of complex legal systems in sustainability transformation” funded by Strategic Research Council at the Academy of Finland (358392).
References
COM(2023)160 final. Proposal for a Regulation of the European Parliament and of the Council establishing a framework for ensuring a secure and sustainable supply of critical raw materials and amending Regulations (EU) 168/2013, (EU) 2018/858, 2018/1724 and (EU) 2019/1020.
Eerola, Toni. Corporate conduct, commodity and place: Ongoing mining and mineral exploration disputes in Finland and their implications for the social license to operate. Resources Policy. Vol. 76 (2022), 102568.
ELY 2023. The Lapland Centre for Economic Development, Transport and the Environment (ELY Centre). Reasoned Conclusion on the Sakatti environmental impact assessment (EIA).
Jonsson, Erik – Törmänen, Tuomo – Keiding, Jakob Kløve – Bjerkgård, Terje – Eilu, Pasi – Pokki, Jussi – Gautneb, Håvard – Reginiussen, Helge – Rosa, Diogo, Sadeghi, Martiua – Sandstad, Jan Sverre – Stendal, Henrik. Critical metals and minerals in the Nordic countries of Europe: diversity of mineralization and green energy potential. Geological Society. Vol. 526 (2023), p. 95–152.
Pölönen, Ismo & Leino, Johanna. Kaivossektorin hyväksyttävyysvaje ja paikallisten vaikuttamismahdollisuudet – Miten kaivoslakiuudistus vastaa haasteisiin? (Legitimacy of the mining sector and locals’ opportunities to influence – How the Mining Act reform addresses the challenges?). Ympäristöjuridiikka 2/2023, p. 25–51.
Pölönen, Ismo – Allard, Christina – Raitio, Kaisa. Finnish and Swedish law on mining in light of collaborative governance. Nordic Journal of Environmental Law. 2020:2, p. 99–134.
Raitio, Kaisa – Allard, Christina – Lawrence, Rebecca. Mineral extraction in Swedish Sápmi: The regulatory gap between Sami rights and Sweden’s mining permitting practices. Land Use Policy. Vol. 99 (2020), p. 309–316.