The Council of State annuls the environmental permit of Uplace

The Council of State annuls the environmental permit of Uplace

In a decision of 28 May 2014, the Council of State annulled the environmental permit of Uplace.
 
This decision was not unexpected, because in an earlier decision dating from 18 December 2012 the Council of State had already suspended the environmental permit of Uplace. It is striking, however, that in its decision the Council of State explicitly emphasises the requirement of an impartial assessment of an environmental permit application while also sharpening the boundary line on prior contractual “guarantees” concerning the substantive assessment within the permit-granting framework.
 
On 5 June 2009, NV Uplace concluded a Brownfield covenant (i.e. an agreement wherein it is agreed that a polluted site can be redeveloped, with the cooperation of the public authorities) with the Flemish Government (and others). This Brownfield covenant was concluded in order to carry out the Uplace project, a large shopping centre with various secondary activities such as a movie theatre complex, a swimming pool and so on.
 
In its annulment decision, the Council deduced from a joint reading of the obligations in the covenant that the Flemish Government had assumed an obligation as an appeal body to only refuse the environmental permit under certain specific circumstances, namely reasons of "public interest" and "reasons that are not reasonably remediable and solvable". The covenant´s mitigating measures concerning mobility were included as a permit condition.
 
According to the Council of State, the agreements in the Brownfield covenant must be regarded as an at least partial prior renunciation of the discretionary margin of appreciation of the Flemish Government with regard to the environmental permit application. Thus, according to the Council, the Government could not judge impartially, namely in all objectivity and without prejudice and without being bound by agreements entered into in advance. The environmental permit was therefore annulled, because it had been granted in conflict with the principle of impartiality.
 
This decision once again reminds us that in contractual documents by permit-granting authorities no prior “guarantees” may be given to developers with respect to the later substantive assessment of permit applications. According to the Council of State, the permit procedures must be implemented “in an open and above board manner” and “without prejudice”.
 
Naturally, this in no way lessens the strong and legitimate desire of investors to have “legal certainty” with respect to large-scale projects.
  
This means that it will become an even more delicate balancing act to, on the one hand, ensure that contractual agreements with the government don’t contain any “guarantees” about the substantive handling of a permit procedure, while on the other, still enabling public actors to lend their support to the project involved in some contractual form. How far one can go on this without crossing the line will undoubtedly remain a topic of intense debate in both the case-law and legal doctrine.