Key policies governing environmental protection in Serbia are contained in strategic documents such as the National Strategy of Sustainable Development, the Low-Carbon Development Strategy of the Republic of Serbia for the period 2023–2030 (with projections up to 2050), the National Programme of Environmental Protection (expired, with a new one expected), the Waste Management Programme for 2022–31, the Water Management Strategy of the Territory of the Republic of Serbia until 2034, as well as provincial and municipal plans and programmes.

Key principles in the environmental area include the following.

• Integration – the authorities are to secure integration of environmental protection and development into all sectoral policies.
• Prevention and precaution – each activity needs to be planned and implemented so that it:
1. causes the least damage to the environment and people’s health;
2. reduces the burden on the space and consumption of raw materials and energy;
3. includes the recycling option;
4. prevents or limits any impact on the environment at the source (this principle is implemented through environmental impact assessments); and
5. uses the best available techniques, technology and equipment.
• Preserving natural resources – using natural resources (air, water, soil, geological resources, flora and fauna) to secure the preservation of geodiversity, biodiversity, and protected natural assets and areas.
• Sustainable development – a coherent system of technical-technological, economic and social activities in overall development, aimed at preserving and enhancing the quality of the environment for current and future generations.
• Liability of the polluter and its successor – an entity that causes pollution of the environment through illegal or wrongful actions is liable for it, and is obliged to eliminate the cause of pollution and the consequences of direct or indirect pollution.
• “Polluter pays” – the polluter must pay a fee for polluting the environment if its activities cause or may cause damage to the environment (ie, if it produces, uses, or places on the market raw materials, semi-finished products or products that contain environmentally harmful substances).
• “User pays” – each person using natural resources has to pay a realistic price for such use and for re-cultivation of the area.
• Subsidiary liability – state bodies are obliged to (within their financial capabilities) eliminate the consequences of environmental pollution and reduce damages if the perpetrator is unknown or if the source of pollution is outside the Republic of Serbia.
• Applying incentives – the authorities are to take measures to ensure the preservation and sustainable management of environmental capacities by:
1. reducing use of raw materials and energy;
2. preventing or reducing environmental pollution via economic and other instruments; and
3. choosing the best available techniques, as well as plants and equipment that do not require excessive costs, etc.
• Public information and public participation – as part of enjoying the right to a healthy environment, everyone is entitled to be kept informed about the state of the environment and to participate in the decision-making process where the decisions could have an impact on the environment.
• Protection of the right to a healthy environment and access to justice – citizens or groups of citizens, their associations, and professional or other organisations may enforce their rights to a healthy environment before competent authorities (ie, the courts), in accordance with the law.

A key piece of legislation governing this area is the Environmental Protection Act or EPA (Zakon o zaštiti životne sredine, “Sl. glasnik RS”, No 135/2004, as amended and supplemented). In addition to this, there are numerous laws governing particular areas, such as:

• the Air Protection Act;
• the Nature Protection Act;
• the Act on Protection from Noise in the Environment;
• the Soil Protection Act;
• the Climate Change Act;
• the Waste Management Act;
• the Package and Package Waste Act;
• the Water Act;
• the Act on Integrated Pollution Prevention and Control (the “IPPC Act”);
• the Environmental Impact Assessment Act;
• the Strategic Impact Assessment Act;
• the Act on Protection from Non-ionising Radiation;
• the Act on Radiation and Nuclear Security and Safety;
• the Chemicals Act; and
• the Act on National Parks.

Serbia is also party to a number of international treaties governing the environmental area, including all three Rio conventions (on Biodiversity, Climate Change, and Desertification), the Paris Agreement, the Kyoto Protocol, the Vienna Convention for the Protection of the Ozone Layer, the Stockholm Convention, the Aarhus Convention, the Espoo Convention and the Basel Convention. International treaties are hierarchically above national laws.

The Serbian authorities are currently working on the draft of a new law on liability for damages to the environment, with the aim of harmonising Serbian law with EU Directive 2004/35/EC (the “Environmental Liability Directive”) and introducing an efficient system of compensation for environmental damages that is based on the “polluter pays” principle.

The key regulatory authorities responsible for environmental policy and enforcement in Serbia are the Ministry of Environmental Protection (MEP) (including its environmental inspection department) and the Agency for Environmental Protection. Provincial and municipal secretariats and inspections also play an important role in law enforcement within an autonomous province (ie, municipality).

As a general principle, all actors in the environmental protection system are obliged to co-operate together, to secure co-ordination and harmonisation in the process of making and implementing decisions. The EPA does not specifically develop this principle in detail, but mechanisms such as public insights in relation to the environmental impact of plans and projects, the IPPC permitting procedure, and waste management permitting aim to ensure the exchange of views between different actors.

The right to a healthy environment, timely and complete information on the environment, and the obligation to protect and improve the environment are constitutionally proclaimed principles. International treaties dealing with specific assets play a significant role in their protection – such treaties have precedence over national laws.

On the level of laws, the EPA serves as a general piece of legislation aimed at protecting environmental assets, but also, in relation to specific assets, there are separate laws designed to regulate the use and protection of such assets – eg, the Water Act, Air Protection Act, Soil Protection Act, etc. All these pieces of legislation include various provisions and mechanisms for the protection of the relevant environmental assets, such as setting thresholds for pollution, permit requirements, authorising inspections or authorising other authorities to act upon violations of environmental regulations.

Breach of protections may lead to different consequences, including criminal prosecution, civil liability, liability for economic offences and misdemeanours, temporary prohibition of works/activities, and inspection measures.

Environmental inspection is the most common form of procedure faced by market players when it comes to environmental compliance checks. The investigative and access powers of regulatory authorities and bodies may differ, depending on the specificities of the incident and breaches. By way of example, an environmental inspector may have authority to:

• order that any irregularities in implementing measures on protection, recultivation and remediation are eliminated;
• prohibit the use of natural resources without – or contrary to – the approval of the environmental protection and remediation scheme, and ordering remediation or other measures prescribed by law;
• prohibit the development and use of facilities or complexes and performing activities if –
1. the requirements and norms regarding emissions and thresholds of pollutants are not complied with;
2. adequate and functional equipment and appliances to eliminate or reduce emissions of pollutants or energy are missing; or
3. other measures and conditions for environmental protection are not taken;
• prohibit the emission of pollutants and hazardous substances, waste water or energy into the air, water and soil in quantities or concentrations or levels exceeding those prescribed;
• prohibit the operation or use of technology or technological processes – and the use of products, semi-products or raw materials ‒ that are prohibited by law;
• prohibit the work of a Seveso facility (ie, a facility that may contain hazardous substances above prescribed thresholds) – this concept was introduced into the Serbian legal system as part of ongoing attempts to align with the EU acquis when it comes to the control of major accident hazards involving dangerous substances;
• order the implementation of environmental protection measures set by law;
• order proper monitoring if the relevant measures are not being (adequately) implemented;
• block bank accounts (based on an enforcement order); and
• take samples of soil, water, waste, air (via licensed organisation).

While performing the inspection, the inspector can temporarily take away items, goods or appliances if their use is not permitted or if they originate from ‒ or were utilised to perform – illegal activities.

Each of the separate environmental laws sets out numerous further powers for environmental inspectors, including the power to prohibit:

• performance of works and activities without approved environmental impact assessments (where applicable);
• use of a building – ie, operating a facility and performing activities – before an IPPC permit is issued (where applicable);
• operation of a stationary source of pollution or other activity performed contrary to law; and
• waste treatment contrary to a waste management permit.

Environmental inspectors also have all the powers that are available to them under general inspection legislation ‒ for instance, under the conditions and limitations set by law, a fact-finding mission entitles an inspector to:

• inspect and copy public documents and registries;
• check the personal or other ID documents of relevant persons;
• take statements from inspected persons;
• order that books, corporate documents, databases, contracts and other relevant documents be provided for inspection;
• perform physical inspection of location, land, buildings, business and other non-residential areas, facilities, equipment, tools, vehicles, other means of work, products, items placed on the market, goods in circulation and other relevant items (note that inspection of residential space has special rules and, in principle, requires a court order, if the resident does not voluntarily allow inspection);
• take relevant samples;
• take photos and videos of the area where the inspection is being performed and of the items that are being inspected; and
• secure evidence.

In case of the most serious violations, criminal prosecution is possible; in such cases, standard criminal investigation powers are at the disposal of public prosecutors and other investigative authorities.

Environmental Impact Assessment

For certain projects in the area of industry, mining, energy, transportation, tourism, agriculture, forestry, water management waste management, or for communal activities and projects planned in protected natural assets or the surroundings of immovable cultural assets, the project developer must obtain approval for the environmental impact assessment (EIA) study it has prepared or – where applicable – a decision that such a study is not required.

Depending on the specificities of the project, approval can be obtained from the national, provincial or municipal authority in charge of environmental affairs. The process may have two or three stages, depending on the features of the project:

• deciding whether the EIA study is required (this only applies to projects listed as those for which the authorities may require an EIA study);
• deciding on the content and scope of the EIA study; and
• deciding whether to approve the EIA study.

The first two stages entitle the applicant and interested public to appeal to the second instance authorities, and eventually to file administrative suit. The decision on whether to approve the EIA study is not appealable via administrative procedure, but may be challenged before an administrative court.

IPPC Permit

For certain facilities and activities that may have a negative impact on people’s health, environment or material goods, an IPPC permit needs to be obtained. Depending on the specificities of the project, approval can be obtained from the national, provincial or municipal authority in charge of environmental affairs. The decision on whether to grant an IPPC permit also cannot be appealed through an administrative procedure, but may be challenged before an administrative court.

Other Permits

Apart from the aforementioned activities, certain other activities may also require permits ‒ for example, waste management activities (collecting, transporting and treating waste). A waste management permit is not required for activities covered by an IPPC permit; however, before the IPPC permit is issued, the operators are likely to need a temporary waste management permit in order to start their operations while waiting for the IPPC permit to be issued. There are certain other exceptions where a waste management permit is not required. The waste management permit is issued either by the MEP or the competent provincial authority or municipality, depending on the type of waste and other features of waste management operations. An unsatisfied party is entitled to lodge an appeal to the second instance authority.

Furthermore, according to the Climate Change Act (2021), operators of facilities emitting greenhouse gases (GHGs) will need to have a permit issued by the MEP before they start operations. It is anticipated that at least 137 current operators will fall under this permitting requirement. This permit must be issued by the MEP and it cannot be appealed via administrative procedure. It can, however, be challenged before an administrative court.

Officially, environmental protection is regarded as one of the administration’s key goals, but enforcement of this has never been a strong point in Serbia. In addition, since the COVID-19 crisis and the Ukrainian war, environmental protection seems to have lost even its proclaimed importance.

EIA approval need not be transferred. An IPPC permit can be transferred relatively easily if the operator has changed – the authority that issued the IPPC permit can simply change the name of the operator, without conducting a separate review procedure. In the case of waste management permits, if there is a change of operator, the permit will be transferred to the new operator if it satisfies the conditions for the permit. Permits for operators of facilities emitting GHGs can be amended so as to be issued to a new operator, but arguably, the permitting procedure would need to be repeated.

The consequences of breaching environmental permits are varied, and depend on the type of permit and breach. They may include prohibition of activities until the conditions and measures prescribed by EIA approval are implemented, or prohibition of activities if the activity is performed contrary to the IPPC permit or to certain inspection’s orders, etc. Also, breach of a permit may result in liability for economic offences or misdemeanours (or, in the most serious cases, in criminal prosecution).

Environmental damage and breaches of environmental laws may, depending on the specificities of the case, result in penal and/or civil liability. In a case of penal liability, the most serious violations trigger criminal liability, whereas less serious violations trigger liability for economic offences (privredni prestupi) or liability for misdemeanours (prekršaji).

See 17. Environmental Disclosure and Information.

One of the key principles of Serbian environmental law is the liability of the polluter and its successor. According to this principle, the polluter or its legal successor is obliged to eliminate the cause of pollution and the consequences of direct or indirect environmental pollution. Although the law is not crystal clear on this matter, it implies that the liability extends to the successor in title as well. This means that the current owner will be liable for historical damages to third parties.

Various environmental laws impose reporting obligations. These include annual reports on activities for which IPPC permits have been issued; annual reports of producers, owners/possessors on waste; reports from waste circulation participants; annual reports from producers and importers of special streams of waste; annual reports of landfill operators; annual operator’s reports on GHG emissions; soil-monitoring reports of soil polluters; etc. In many cases, the authorities also have reporting duties, such as the duty of the Institute for Nature Protection to prepare a report on the state of nature, or the duty of the Agency for Environmental Protection to prepare an annual report on air quality.

Criminal Liability

The most serious violations – for example, polluting the environment contrary to law to a “greater extent” (or across “a wider area”), failure to take environmental protection measures, or failure to act upon the instructions of the authorities to take such measures – trigger criminal liability, which may even result in imprisonment.

Companies may also be subject to criminal prosecution if:

• the responsible person (director) commits a crime within their duties/responsibilities with the intent of gaining benefit for the company; or
• lack of supervision or control by the responsible person (director) leads to a physical person committing a crime for the benefit of the company while under the supervision/control of the responsible person.

Sanctions and some other criminal law aspects relating to a company’s criminal liability are somewhat specific, in comparison with those that relate to natural persons.

Given that the criminal code contains vague provisions in some cases (eg, it does not define what constitutes a “greater extent” or “wider area” of pollution), the defendants tend to prove that the thresholds for applying the criminal code are not met. Furthermore, intentional pollution is not the dominant form of pollution – nor is such intent easy to prove ‒ and, as a result, many defendants aim to prove that there was no intent. However, in some cases, the law also stipulates criminal prosecution for negligence, although the sanctions are less severe. Finally, given that Serbian courts are notoriously slow, the statute of limitations may even be used as a defence in some cases.

Liability for Misdemeanours and Economic Offences

Apart from criminal liability, various environmental regulations impose liability for economic offences and misdemeanours ‒ with the former being aimed at more serious violations. Both are usually sanctioned with monetary fines, but may also result in other sanctions, such as the liable company being prohibited from performing certain activities (ie, its director is prohibited from performing certain duties). A defence for an economic offence could be based on the lack of social wrongfulness of the act in question. However, the applicability of this defence depends on the particularities of the case.

When it comes to misdemeanour proceedings, owing to the aforementioned notorious slowness of Serbian courts, the statute of limitations could often be invoked as a defence, as the statute of limitations terms are shorter in misdemeanour proceedings than in criminal and economic offence proceedings. Also, depending on the circumstances, a defence could be based on a request for release from punishment. This can be applied if ‒ after the misdemeanour has been committed but before the accused has learnt that they have been prosecuted – the accused person has removed the consequences of the act or compensated the damage caused by the misdemeanour.

Civil Liability

In case of any damages, the perpetrator is also exposed to civil liability. There is a general rule that if a company or individual causes damages, it is obliged to compensate for this, unless it can prove that the damages were not its fault. This means that the defendant has the burden of proof. Furthermore, if the damages originate from dangerous items or dangerous activities, the liability exists regardless of fault or intent. Polluters are by law liable for the pollution they cause, based on strict (objective) liability – that is, liability regardless of fault – meaning that they have fewer defences available.

However, the law does foresee several defences against strict liability, including:

• if the damages were caused by the defendant or a third person and the defendant was not able to foresee the damages or to overcome their consequences;
• if the damages were caused by something other than the dangerous item, the effects of which were not foreseeable, nor could they have been avoided or overcome; or
• if the dangerous item was taken away from the owner illegally.

Damages include both actual damages and lost profit. Damage compensation requires reinstatement (ie, returning things to the state they were in before the damage occurred) and ‒ if this is not possible or does not completely eliminate damages (or in certain other cases) ‒ monetary compensation.

Key defences against civil liability naturally depend on the facts of the case and may include contesting the causality link between the activities of the defendant and the damages, as well as considering the contribution of the plaintiff to the damages. The statute of limitations is also a possible defence, but for environmental damage claims, such defence is less plausible. The statute of limitations term is longer in the case of environmental damages than the statute of limitations term for standard damages. The subjective term is the same – that is, three years from the discovery of the damages and the tortfeasor; however, the objective term is much longer, at 20 years (rather than five).

Furthermore, as a general rule, each person is entitled to ask another person to:

• eliminate the source of damages if this threatens to cause greater damage to themselves or to an unspecified number of people; and
• refrain from activities that cause a nuisance or risk from damages, if the occurrence of nuisance or damages cannot be prevented with adequate measures.

There is no separate set of rules for the liability of a corporate entity for environmental damage or breaches of environmental laws, but there may be some differences in terms of liabilities (eg, natural persons cannot be liable for economic offences whereas companies can, and companies are only criminally liable if certain conditions are met) and sanctions (eg, fines for natural persons and entrepreneurs are usually smaller than for companies, and the list of law breaches may differ). However, such differences are not specific to the environmental sector.

See 19.1 Green Taxes.

There are no incentives/exemptions/penalties for “good” or “bad” environmental citizenship.

As a general rule, shareholders or a parent company are legally not considered liable for environmental damage or breaches of environmental law, except in cases where the corporate veil has been pierced.

Serbia does not have a special law on ESG, so the traditional legislation on the environment, employment and social welfare, coupled with criminal law, remain the only available ESG tools for the time being.

In general, companies in Serbia are not subject to environmental audit requirements. However, certain activities do require audits – for example, in the case of IPPC permits, operators are environmentally audited at least twice during the validity of the IPPC permit. Operators with facilities that emit GHGs (for which permits are required) are to be audited every five years.

Directors are liable for the legality of the entire business in a company, including for breaches of environmental laws. In addition to liability for criminal acts, economic offences and misdemeanours, under certain conditions they are also exposed to civil liability. A director may delegate their responsibilities to another person and this could, under certain circumstances, shift the liability onto such person. Nevertheless, the director is always bound to exercise due care, proper supervision and other duties imposed on them by company law.

Penalties for breaching environmental laws are outlined in numerous laws and can take the form of sanctions for misdemeanour, economic offence or ‒ in the most severe cases – criminal liability. Also, as previously stated in 6.3 Types of Liability and Key Defences, additional measures can be imposed on directors, such as prohibition from performing certain duties.

It is not legally prohibited to insure against potential environmental damage caused by directors, although this is seldom seen in practice. The insurance per se does not exclude the director’s liability for fines or other penalties.

Although available on the market, environmental insurance is not often used in Serbia. However, it is a statutory requirement for polluters whose production plant or business activity poses a high risk to people’s health and the environment to hold third-party liability insurance. This statutory requirement is under-regulated and ‒ to some extent – vague, so its reach is not as wide as one might expect.

In addition, a company can obtain environmental insurance as an additional risk covered by general liability insurance. Such insurance usually covers third-party claims for damages due to a sudden, unexpected adverse event that causes air, land or water pollution (ie, an environmental accident), provided that personal injury or property damage occur as a result of such event. Environmental insurance policies typically cover damages caused by sudden and unexpected events such as environmental accidents, but not the long-term negative impact that a polluter may have on the environment.

In principle, financial institutions/lenders are not liable for environmental damage or breaches of environmental law, assuming that the financial institutions/lenders are not involved in decision-making, directing the perpetrator’s actions, inducing damages or breaches, or taking similar actions.

Financial documents for projects where environmental risks are involved usually contain obligations on the debtor to comply with certain environmental standards (eg, International Finance Corporation standards), as well as to take out adequate insurance and assign the policies in favour of the financing parties.

In general, whenever there are damages or there is a risk of danger, civil claims can be brought. See also 6.3 Types of Liability and Key Defences.

Serbian civil law generally takes the view that damages aim to compensate a claimant for sustained damages, rather than penalise the tortfeasor. Monetary fines and other sanctions are the subject matter of penal codes, and these codes contain a refined set of provisions on measuring sanctions. There are certain minor deviations from this principle – for example, if an item was intentionally damaged or destroyed by a criminal act, the court may set the value of compensation based on the value the item had for the person who sustained damages.

Class actions are not available under Serbian procedural law. Group actions could theoretically be filed if the claimants in the group meet the conditions for active co-litigants, as prescribed by the Civil Procedure Act.

Serbia and its state power company are notorious for air pollution from thermal power plants. A year ago, an NGO won in the first instance a case against the Serbian state-owned power company and the court ordered that the power company reduce sulphur dioxide (SO₂) emissions from its thermal power plants. This is a first-instance case, but given the importance of the topic, the final outcome of this case is sure to play a valuable role in setting trends for the enforcement of pollution protection laws.

Liability before authorities or towards third parties cannot be transferred or apportioned via contract. However, although the liability vis-à-vis third parties (or Serbian authorities) cannot be modified or excluded via contract, it is possible to contractually regulate the indemnification/reimbursement in favour of the party that had to indemnify the third party (or was fined by the authorities) for damages caused by the other party. It is even possible to contractually expand the liability of the other contracting party in cases for which it would not generally be liable, but such expansion would not be enforceable if it is contrary to good faith.

See 9.1 Environmental Insurance.

Key laws governing contaminated land are the EPA and the Soil Protection Act (Zakon o zaštiti zemljišta, “Sl. glasnik RS”, No 112/2015). The general principle is that a person who contaminated the land needs to perform remediation at its own cost. To that end, it has to prepare a remediation scheme, to be approved by the MEP. If such a person is unknown, unavailable or does not comply with an inspection order, the remediation must be undertaken by the municipality, the province or the state, in accordance with its budget and via a licensed company. Upon completion of remediation, the investor needs to submit a report to the MEP. Environmental inspection is authorised to order remediation (and preparation of the relevant scheme). Failure to perform remediation represents an economic offence on the part of the liable company and is punishable with a fine of up to approximately EUR25,000 (plus a EUR1,700 fine for the director).

The person who contaminated the land needs to perform remediation at its own cost. Engaging contractors to do the remediation does not shift the responsibility away from the polluter.

If more than one party has contributed to the pollution, and the share of individual polluters cannot be determined, they will all be deemed jointly and severally liable.

Anyone who sustains damages from pollution is entitled to compensation for damages.

A waste treatment facility operator is obliged, among other things, to:

• prepare and implement a facility operation plan;
• prepare an accident prevention plan;
• procure and comply with a waste treatment permit;
• publish a list of the waste it treats;
• manage its equipment and facilities in accordance with applicable technical instructions;
• secure the waste and prevent spreading and leakage;
• notify the authorities without delay in the case of accidents;
• maintain records required by law; and
• appoint a qualified person to perform expert work in the waste treatment facility.

A landfill operator is obliged, among other things, to:

• prepare and implement a facility operation plan;
• prepare an accident prevention plan;
• procure and comply with a waste disposal permit;
• implement measures to protect the environment;
• monitor the landfill;
• ensure re-cultivation of the landfill after it is shutdown and expert supervision of the location for at least 30 years;
• notify the authorities without delay in the case of accidents;
• maintain records required by law;
• appoint a qualified person to perform expert work in the waste treatment facility; and
• refuse to accept waste which does not fulfil the conditions for landfill.

Waste treatment facility operators and landfill operators who do not comply with their statutory duties may, depending on the specificities of the breach, be exposed to different sanctions, including economic offences, temporary prohibition to continue activities, misdemeanours and inspections orders.

Other actors in waste management activities, such as product producers, waste producers, owners/possessors of waste, waste transporters, and waste traders/intermediaries also have various statutory duties related to waste management.

The process of investigating environmental accidents depends on the possible sanction which is threatened for the relevant accident. Most often, the environmental inspection is the one investigating the accident, in accordance with the applicable environmental law and the general inspection legislation. However, in more severe cases, a criminal investigation may also be applicable.

The Climate Change Act (Zakon o klimatskim promenama, “Sl. glasnik RS”, No 26/2021) was enacted in Serbia in March 2021. This law outlines the main policies and principles related to climate change, with the aim of establishing a system that reduces GHG emissions so as to avoid the dangers and negative effects of global climate change. The law foresees the adoption of the following policies:

• a low-carbon development strategy;
• an action plan for the implementation of the strategy; and
• a climate change adaptation programme.

The low-carbon development strategy was adopted in June 2023, and it covers the period until 2030 (with projections up to 2050). The general goal of the strategy is to reduce national GHG emissions (except in land use, land-use change, and the forestry sector) by 13% by 2030, compared to 2010. It also sets five specific goals, including promoting transition to a climate-neutral economy and climate change-resistant society.

The action plan for the implementation of the strategy is to be adopted until June 2024, and will cover the period up to 2030. The climate change adaptation programme is in the pipeline, with the aim of identifying the impact of climate change and determining climate change adaptation measures for the sectors in which adverse impact needs to be reduced.

As part of its efforts under the Paris Agreement, Serbia pledged to reduce GHG emissions by 9.8% from 1990 (the base year) to 2030.

Based on the aforementioned low-carbon development strategy, the government aims to reduce the national GHG emissions (excluding land use, land-use change, and the forestry sector) by 13% by 2030 (and by at least 55–69% by 2050), compared to 2010.

For the time being, until the action plan is adopted and the strategy is implemented, the Air Protection Act contains a mechanism for preventing and reducing the air pollution that affects climate change by stipulating measures to reduce GHG emissions and the monitoring of GHG emissions. Furthermore, certain fluorinated GHG and equipment and appliances containing GHG will have a special legal regime (in terms of production, maintenance, disposal, etc).

Serbia is a non-Annex I party to the Kyoto Protocol, which means that it has not made quantitative emission reduction commitments. As such, it is no wonder that the Air Protection Act does not prescribe specific thresholds applicable to GHGs. However, certain thresholds for nitrous oxide (N₂O) are specified for certain activities in the by-laws that set the thresholds for air pollutants. Nitrous oxide is generally considered a GHG, although the aforementioned by-law is not particularly aimed at GHGs but rather, more generally at air pollution.

Furthermore, the fact that Serbia is party to the Energy Community Treaty, and an EU candidate, will surely induce Serbia to take further efforts in limiting GHG emissions.

Asbestos is primarily regulated from a chemicals management, health, health and safety at work, transportation and waste-management perspective.

Through the Chemicals Act and its by-laws, Serbia has prohibited:

• production, placement on the market and use of asbestos fibres;
• placement on the market and general use of asbestos as a substance; and
• use of asbestos as an ingredient or part of a mixture (above certain thresholds).

As regards work safety, Serbia has ratified the International Labour Organization Asbestos Convention, which aims to increase safety in the use of asbestos. Serbian by-laws regulate in detail the asbestos-related concerns with regard to health and safety at work. These by-laws heavily restrict activities related to asbestos. They prohibit performance of activities in which employees are exposed to:

• asbestos fibres during asbestos exploitation;
• the production and processing of products made of asbestos; or
• products to which asbestos has intentionally been added.

Exceptions apply to the processing and disposal of products resulting from the demolition and removal of asbestos.

In terms of waste management, asbestos is considered a special waste stream. According to the Waste Management Act, waste containing asbestos is to be collected, packaged, stored, and then landfilled at a clearly marked place intended for the disposal of waste containing asbestos. The producer or owner/holder of waste containing asbestos must apply measures to prevent the dispersal of asbestos fibres and dust into the environment. The owner/holder of such waste has to maintain records on the quantities of waste it stores or landfills, and deliver the relevant data to the Agency for Environmental Protection.

Waste management is primarily regulated by the Waste Management Act (Zakon o upravljanju otpadom, “Sl. glasnik RS”, Nos 36/2009, 88/2010, 14/2016, 95/2018 and 35/2023) and the Act on Packaging and Packaging Waste (Zakon o ambalaži i ambalažnom otpadu, “Sl. glasnik RS”, Nos 36/2009 and 95/2018).

The circumstances in which a producer or consignor of waste retains liability after it has been disposed of by a third party have not been clearly defined under the waste management regulations. On one hand, according to the principle of liability, there is a rather generalised requirement that the producers, importers, distributors and sellers of products that lead to the increase of waste quantities are liable for the waste caused by their activities. The producer bears the greatest liability owing to its influence on the content and features of the products and their packaging. Thus, producers are obliged to aim to reduce additional waste, develop recyclable products, and develop a market for re-use and recycling of their products.

On the other hand, the owner/possessor (including the indirect possessor) of waste is explicitly held liable for all waste management costs (ownership/possession is transferred when the next owner/possessor takes over the waste and receives the waste movement document). Waste disposal (landfilling) costs must be borne by:

• the owner/possessor who directly supplies the waste to the waste management facility or to the entity collecting the waste; and/or
• the former owner/possessor or producer of the products.

This implies that producers can remain liable, although consignors are not regulated in this respect. However, it is not clear how the liability for the costs is allocated between the producer and other entities liable for costs, and whether this liability remains with the producer only if it has retained the liability contractually.

The duties of a producer of goods in terms of taking back and similar obligations are prescribed for several cases, including the following.

• The producer (or importer) of products that become hazardous waste after use is obliged to take back such waste after use, free of charge, and manage such waste in accordance with the law. The producer/importer may authorise a third party to take back waste after use in its name and on its behalf.
• Producers (as well as importers/packers/fillers and suppliers) are obliged to take back, at the end-user’s request and free of charge:
1. waste from secondary (group) packaging or tertiary (transport) packaging; and
2. packaging waste that is not communal waste and originates from primary packaging (unless such packaging falls under a different regulatory regime).

In certain cases, there is an obligation to self-report environmental incidents or damage to the authorities. Seveso facility operators (see 4.1 Investigative and Access Powers) are obliged to notify the MEP, the municipality and other competent authorities of chemical accidents, for example. IPPC facility operators, landfill operators and waste treatment facility operators are also obliged to notify the authorities of accidents. Informing the public, on the other hand, is primarily the obligation of the authorities.

Public authorities (including state, provincial and municipal bodies, licensed or other organisations) are obliged to inform the public regularly, in an objective and timely manner about:

• the status of environmental events that are being tracked (as part of monitoring polluting substances and emissions);
• warning measures; and
• the development of pollution that could cause danger to the life and health of people.

Access to information on the environment is enforced via regulations on free access to information of public importance.

Public authorities have a duty to regularly update and publish/disseminate environmental information, including:

• international treaties and domestic regulations on the environment;
• strategies, plans, programmes and other environmental documents, as well as reports on implementing the foregoing;
• data from monitoring activities that may affect the environment;
• environmental reports;
• permits and licences for performing activities with significant environmental impact;
• contracts aimed at environmental protection; and
• EIA studies and decisions related thereto.

In the event of danger to life and people’s health, the environment or material goods – regardless of whether it was caused by human activities or by nature – public authorities are obliged to inform the public without delay via public media; failure to do so may expose the authorities to damage claims.

Accounting legislation contains a general obligation for companies with a duty to publish annual business reports to include environmental information (eg, investments into environmental protection). Micro and small companies are generally exempt from such duty. Certain large companies are also obliged to publish reports on non-financial issues, which should also contain information regarding the effects of their business on the environment.

Furthermore, under certain environmental laws, companies engaged in certain lines of business have reporting duties – for instance, annual reporting in relation to waste management.

In some cases, international financial institutions (IFIs) such as the European Bank for Reconstruction and Development, provide funds to local banks which in turn offer them to their clients if they satisfy certain environmental criteria. Also, in cases where IFIs directly finance certain projects, they impose strict environmental standards on borrowers.

One of the activities that might boost green finance is the “EU for Green Agenda in Serbia”, a project with the technical and financial support of the EU and in partnership with the MEP, which is being implemented by the United Nations Development Programme in co-operation with the Embassy of Sweden and the European Investment Bank (EIB), with additional funding from the governments of Sweden, Switzerland and Serbia. The goal of the project is to contribute to the efficient, inclusive and sustainable implementation of the green agenda in Serbia by improving the strategic and legislative framework, co-financing the implementation of innovative pilot projects, and mobilising additional financing for scale-up investments.

Whether environmental due diligence will be conducted on M&A, finance and property transactions in Serbia depends on the business of the target. If such business causes environmental concerns, then a prudent buyer would perform an environmental due diligence procedure. The scope of the environmental due diligence procedure also depends on the business of the target and on the target’s history. Typical environmental due diligence exercises include:

• soil testing;
• waste management;
• waste water treatment;
• handling chemicals; and
• compliance checks with laws, permits and EIA studies (where applicable).

Under general rules of law, each party needs to act bona fide in a legal transaction. Withholding important environmental information constitutes a breach of such rule. A purchaser in an asset deal would be able to invoke provisions on material defects. Even if the liability for material defects was excluded by contract, such exclusion would be null and void if the defect was known to the seller and the seller failed to disclose it to the purchaser.

In share deals, however, the purchasers of shares do not have the benefit of such liability because they are not purchasing (defective) assets but, rather, shares in the company that owns the assets. Therefore, they need to protect themselves via contractual representations and warranties.

The Republic of Serbia decided to focus primarily on public fees (parafiscal tax) as the primary form of environmental taxation. There are eight such public fees, all laid down in the Act on Fees for Using Public Goods (Zakon o naknadama za korišćenje javnih dobara, “Sl. glasnik RS” Nos 95/2018, 49/2019, 86/2019, 156/2020, 15/2021 and 15/23):

• for using a fishery area;
• for using a protected area;
• for collecting, using and trading species of wild flora, fauna and mushrooms;
• for pollution;
• for protection and improvement of the environment;
• for products that become special waste streams after use;
• for packaging or packed products that becomes packaging waste after use; and
• for water pollution.

The law and its by-laws detail what triggers payment of the fee, who is considered a taxpayer, the tax basis, the tax rate and various exemptions.

Civil litigations before state courts are the dominant method for resolving environmental damage claims.

Serbia is an EU candidate, and as such, it is in the process of aligning its legislation with the aquis communitaire. This alignment has, according to the 2022 EU Commission Report on Serbia, reached good or in some aspects moderate level, except in relation to industrial pollution and risk management, where the alignment is at an early stage. However, in all areas, there is a problem of implementation. With this in mind, it seems that the focus in the forthcoming period should be not just on completing the alignment with EU law, but more importantly, on the implementation of the law. That said, organisational changes, clearer and swifter procedures, financial support, and capacity building within inspection authorities and regulators are the way to ensure better environmental law enforcement.