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RECOVERY OF DAMAGES ACCORDING TO THE RESULTS OF THE INSPECTIONIn previous issues of the Journal of the Chief Engineer, we talked about the grounds and consequences of not allowing regulatory authorities to conduct inspections at enterprises. We have also considered several lawsuits concerning the suspension of equipment or premises as a result of inspections by regulatory authorities. In this issue, we will analyze court decisions in cases where regulatory authorities, after conducting an inspection, try to recover damages from enterprises caused by violations of environmental legislation.

This category of cases concerns compensation for various types of damage caused to the environment as a result of the company's activities. Such damage can be caused by littering of land, emissions into the atmosphere, discharge of wastewater, use of water without proper permission. It all depends on the type of activity of the enterprise.

Plaintiffs in such cases are usually either the State Environmental Inspectorate or a prosecutor in the interests of the state represented by the State Coinspection. The amount of damages that control bodies collect from enterprises ranges from several thousand hryvnias to hundreds of thousands and millions.

A feature of this category of cases is also the distribution of burden of proof between the plaintiff and the defendant - the company. The State Coinspection or the prosecutor must prove:

  • the presence of damage;

  • illegality (illegality) of the enterprise's behavior;

  • the causal link between such behavior and the harm caused.

In turn, the company must prove that its actions (the actions of its employees) are not to blame for causing harm. However, in the case of compensation for damage caused by a source of increased danger, the presence or absence of fault of the enterprise is not decisive.


Cases of this category are considered by commercial courts. They usually do not assess the legality of the inspection. This is the competence of administrative courts. Therefore, if the company does not agree with the process or the results of the inspection, it is not necessary to waste time and appeal to the administrative court the actions of the inspector to conduct the inspection or the order issued as a result.


Are scrap metal waste?

Case 1.

In the process of many enterprises there is scrap metal. Some parts of the equipment fail, some wear out and need to be replaced, etc. However, it is very bad if the company does not have time to remove and dispose of such scrap metal before the visit of the inspector of the State Coinspection.


The State Coinspection carried out a scheduled inspection of one of the enterprises of the city of Mariupol for compliance with environmental legislation in the field of air, water and land resources for waste management and hazardous chemicals.

Test results

  1. The inspector drew up an inspection report, which the Company signed with comments. In the Act, he noted that the results of the inspection of the territory of the Enterprise revealed, including littering of land: scrap metal - an area of 45 square meters, the volume of waste 157.5 cubic meters.

  2. The inspector of the State Coinspection issued an order to the enterprise to eliminate violations.

  3. The State Coinspection drew up a report on an administrative offense, according to which the responsible person of the enterprise was accused of land contamination (Article 52 of the Code of Ukraine on Administrative Offenses). On the day the report was drawn up, the State Coinspection immediately considered it and issued a resolution finding the responsible person of the Enterprise guilty and imposing a fine of UAH 850 on her.

  4. A month later, the State Coinspection sent the Company a claim, which offered to voluntarily reimburse the damage caused to the state as a result of land pollution, in the amount of 252 thousand UAH. The company did not admit the claim and referred to the lack of legal grounds for such compensation.

  5. 1.5 years later, the State Coinspection filed a lawsuit against the Company to recover the damage.


The courts of three instances denied the inspection the claim. In their decisions, the courts noted several grounds for refusal:

  1. The Inspectorate calculated the amount of damage caused by the Enterprise as a result of land littering. Instead, land is considered littered if there are foreign objects and materials in the open ground, garbage without proper permits, which has led or may lead to environmental pollution. The Inspectorate did not prove that the actions of the Enterprise recorded in the acts led or could have led to environmental pollution. During the inspection it was not established that the scrap metal has signs of contaminants (the presence of signs of corrosion on the metal, contamination of scrap metal with lubricants, etc.), which have become or could cause pollution of the environment.

  2. Scrap metal does not belong to household, industrial and other wastes by virtue of the provisions of the Law of Ukraine "On scrap metal".

  3. The inspectorate did not reflect in the inspection materials or in the calculation of the damage the order in which it classified the detected scrap metal as waste of hazard class 4 (low-hazard).

  4. The inspection materials do not contain information and documentary evidence of how the inspectors determined the amount of landfill littering, namely how they determined the land area, the thickness of the scrap metal layer, the amount of waste (scrap metal) that caused the litter. The Inspectorate's allegations that the area of the contaminated land was measured with a ten-meter measuring tape have not been documented.

 Resolution of the HCSU dated 20.06.2017 in case №905 / 1353/16.

Conclusion in the case

In this case, the company from the beginning of the inspection took an unequivocal position on the detected scrap metal and drew the court's attention to the violations committed by the State Coinspection. It is all these arguments together and ensured the victory in court. However, it is better not to experiment and if the company knows about the scheduled inspection of the State Coinspection, it is necessary to thoroughly prepare and remove scrap metal and any other waste, especially from open areas of land.

Water intake without a permit for special water use

Case 2.

At the end of 2015, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Concerning Deregulation in the Agro-Industrial Complex”. In addition to the agro-industrial complex, the law also changed the rules of water use for other enterprises. Until 01.01.2016, an enterprise that used groundwater for economic activities had to obtain a permit for special water use. Very often companies either did not receive such permits or did not have time to renew them in time. In connection with the adoption of this law, companies were allowed to use groundwater (except mineral) for all needs, except for the production of packaged drinking water, in the amount of not more than 300 m3 per day from one water intake. But what awaits those who used water without a permit until 2016? Consider the example of the following case.


At the end of 2015, the State Coinspection conducted a scheduled inspection of compliance with environmental legislation by the Utility Company (KP).

Test results

  1. The State Coinspection made an act in which it recorded that KP for three years carried out water abstraction from the underground aquifer without a special subsoil use permit, which is a violation of Articles 16, 19, 21 of the Subsoil Code of Ukraine (as amended at the time of abstraction).

  2. The inspector issued an order obliging the KP to obtain a special permit for subsoil use (groundwater) within three months.

  3. The State Coinspection issued a resolution imposing an administrative penalty, which brought the head of the KP to justice for unauthorized subsoil use and imposed a fine of UAH 510 on him. (Article 47 of the Code of Administrative Offenses).

  4. The inspection sent a claim to the CP for compensation for damages caused to the state as a result of unauthorized use of subsoil (groundwater), in the amount of 417 thousand UAH. KP refused to voluntarily compensate the losses.

  5. Six months later, the State Coinspection filed a lawsuit against KP.

Court decisions

The courts of three instances upheld the claim of the State Coinspection and recovered from the CP 417 thousand UAH of damages.

Arguments of the CP

Motivation of the court

The main activity of the CP is the collection and supply of water to the population. KP referred to the fact that it extracted water from four wells in volumes not exceeding 300 m3 per day from each. Article 23 of the Subsoil Code (as amended until 2016) gave landowners and land users the right to extract groundwater for their own household needs, decentralized and centralized (except for the production of packaged drinking water) drinking water supply within the land plots provided to them. , provided that the productivity of groundwater intakes does not exceed 300 m3 per day. Therefore, water intake was legal.

KP extracted water for its own economic and production activities, and not to meet its own economic and household needs (for details, see the difference in the decision of the Supreme Court of Ukraine from 01.04.2015 in case №922 / 2610/14 (№3-32gs15)). The volume of the fence for all wells together exceeded 300 m3 per day. Therefore, the KP took water without a special permit for water use.

The Law "On Amendments to Certain Legislative Acts of Ukraine Concerning Deregulation in the Agro-Industrial Complex" amended Art. 21 and Art. 23 of the Subsoil Code of Ukraine and gave the right to landowners and land users to extract groundwater (except mineral) within the land provided to them for all needs except for the production of packaged drinking water, without special permits and mining, provided that the volume of groundwater extraction from each of the intakes does not exceed 300 m3 per day. The law came into force on 01.01.2016, but in accordance with the provisions of para. 1 item 2 of the Final and Transitional Provisions of this Law, landowners and land users who at the time of entry into force of this Law began the process of obtaining special permits and mining, no longer require such permits, and are not responsible for extraction of groundwater before the entry into force of this Law. (except for minerals) without such special permits and mining allotment, if such extraction was carried out in the amounts provided for in Part 1 of Art. 23 of the Subsoil Code of Ukraine. Since KP concluded a contract for the preparation of hydrogeological materials for a special permit for experimental and industrial production of groundwater and the project of sanitary protection zones of the well in 2009, according to the Transitional Provisions of the Law it is released from liability for water intake without special permission.

The basis for release from liability on the basis of the above rules is the presence of evidence that the company as of 01.01.2016 began the process of obtaining a permit for special water use. Such proof may be an application for a permit submitted to an authorized body. The evidence provided by KP does not confirm that as of 01.01.2016 it started the procedure for obtaining a permit. Therefore, the provisions of the Law "On Amendments to Certain Legislative Acts of Ukraine on Deregulation in the Agro-Industrial Complex" do not release KP from liability for water intake until 01.01.2016.

The courts came to the conclusion that the State Ecoinspection had proved the fact that all elements of the offense were present in the actions of the CP, in particular:

  • illegal behavior of KP consists in unauthorized water and subsoil use (without registration of the special permission) that is confirmed by the act of check, the instruction, the report on an administrative offense, the resolution on imposing of an administrative penalty;

  • the damage itself is available, which is legally calculated in accordance with the Methodology;

  • as well as the causal link, which is expressed in the damage caused by the illegal activities of the CP.

Resolution of the HCSU of November 8, 2017 in the case № 908/2130/16.

Conclusion in the case

Despite the fact that permits for special water use in volumes up to 300 m3 per day canceled on 01.01.2016, the State Coinspection during the inspection in 2018 can check how the company carried out water intake until 2016. Therefore, it is better for engineers to pay attention to this themselves and analyze whether all permits for special water use were valid on 01.01.2016 and whether they will not have to reimburse the damage for unauthorized water.

Because of the expert

Analyzing the case law related to cases of environmental damage, we can formulate some tips:

  1. If the company received a notification about the inspection by the State Coinspection, it is necessary to carry out basic preparatory measures. Remove and dispose of all waste, especially those in the open. If there are sources of emissions for which the company does not have permits, it is necessary to stop their operation and, if possible, take them out of the company. Check the relevance of documents for special water use.

  2. If there are grounds not to allow the inspector to inspect, be sure to use this opportunity.

  3. Record all the inspector's actions during the video check. Very often inspectors "by eye" determine the size of the contaminated land or measure it with an untested tape measure. All this may be grounds for declaring inadmissible damage calculations based on such measurements.

  4. Record all of the inspector's requirements for providing documents and the list of documents that you provide to the inspector. Do not provide unnecessary documents, which in the future may be the basis for calculating the damage.

  5. In the inspection report, be sure to indicate your objections to the identified violations and indicate the violations committed by the inspector.

  6. Immediately after receiving the inspection report and order, start working on appealing the inspection results to the court. Cancellation of the results of the inspection is grounds for refusal to recover damages.

    The article was published in the periodical "Journal of the Chief Engineer" №1 for January 2018. Information about the magazine can be found on the website:

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If you have received a notification about the inspection and want to prepare for it, or if you have already conducted an inspection and calculated the damage, then contact us for help.


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