20.02.06 10:25 Age: 18 yrs

Licensing procedure for the Hyundai investment tarnished by breaches of EU law

Press releases, Cases, Hyundai


Although Hyundai Motor Company has not yet completed its negotiations with representatives of the Czech Republic regarding the conditions under which it would be willing to build a production plant in Moravia three procedures assessing the project’s environmental impact are already under way (under Act no. 100/2001 Coll., on environmental impact assessment). However, not one of EIA notices for the proposed plant has been filed by Hyundai M.C. but the Region of Moravia-Silesia (Nošovice industrial zone), the Statutory City of Ostrava (Mošnov industrial zone) and the ZLín Region (Holešov industrial zone).


All three notices have been developed by the state’s Czechinvest agency and although they often require very expensive and time-consuming work the related cost has been covered from public budgets. The reason why the statutory city, the regions and Czechinvest seem to go out of their way is to accommodate the investor’s requirements for speedy licensing procedures.
However, lawyers of the ELS’s GARDE – Global Responsibility program (the ELS is an organization dedicated to the protection of the environment and human rights through legal means – “GARDE – ELS”) believe that several legal regulations have been violated in the EIA procedure for Nošovice, the most likely candidate for Hyundai’s investment:

a) Council Directive 85/337/EC on the assessment of the effects of certain public and private projects on the environment, as amended by Directives 97/11/EC and 2003/35/EC – the “Directive”)
b) Council Directive 92/43/EC on the conservation of natural habitats and of wild fauna and flora
c) in addition, the notices fail to provide sufficient documents for decision-making as required both by the Directive and the Act that approximated it into the Czech Law.

According to GARDE – ELS lawyers, the most alarming aspect of the Regions’ and the City’s notices is that they do not offer any alternative solutions to the plant location that would allow the relevant authority (in this case the Ministry of the Environment) to compare the relative environmental advantages and risks of each area. Yet the choice of a suitable location with the least environmental impact is the very objective of the EIA procedure. Although no less than three EIA procedures have been opened in the Hyundai M.C. case – each for a different location of the company’s new plant – none of the underlying notices include mutual comparison of the three locations. Lawyers of the ELS’s GARDE – Global Responsibility program (the ELS is an organization dedicated to the protection of the environment and human rights through legal means – “GARDE – ELS”) have warned the Ministry of the Environment about these problems and stressed that this situation violates requirements of the EU law. Incorrect implementation followed by incorrect application of EU law might result in sanction procedures at the European Commission.

Regardless of all these issues, the Ministry of the Environment still considers the materials presented to it to be acceptable and has not asked for much additional information. The Ministry did not respond to GARDE – ELS lawyers’ warnings that the case might involve a breach of obligations embedded in EU law. “We are not surprised by the Ministry’s illegal actions. Previous experience tells us that the state closely collaborates with multinational companies on major investment projects. Illegal practices and disregard for citizens are common practice. We could just mention NEMAK’s investment where state agencies to this day continue in their illegal actions on many levels despite the fact that courts have confirmed that the relevant licensing procedure was illegal,” says lawyer Pavel Franc of the GARDE – EPS program.

The GARDE – ELS concludes that all major foreign investments that have been analyzed by program involved the following controversies:
a) large-scale illegal practices in licensing procedures;
b) violation of citizens’ rights;
c) general disregard for the independence and impartiality of public agencies in order to accommodate the demands of private investors who enjoy the support of politicians.