A new set legal ammendments exempts investors from any legal responsibiilty for negative impacts on the environment, such as pollution and contamination, that their project has caused. On 20 March 2012 the Parliament of Georgia adopted amendments to three legislative acts: the Law of Georgia on Environmental Protection, the Code of Administrative Offences of Georgia, and the Law of Georgia on Enforcement Proceedings.

The amendments introduce a new regime in the area of environmental protection and use of natural resources. In particular, a person having the license for the use of natural resources will be able based on an advance compensation to enter into an agreement with the Ministry of Energy and Natural Resources of Georgia, under which any of its actions committed in the area of use of natural resources will be considered as lawful.

From the moment of concluding the agreement, which according to the amendments is made for indefinite period of time, a license-holder will not bear civil and/or administrative liability towards the state and local self-government authorities for the acts perpetrated in the area of environmental protection and use of natural resources, including any obligations, fees, fines and/or compensation of damages.

Apart from exempting a license-holder from virtually any administrative or legal responsibility for the committed actions, the new law in addition prohibits the examination of a license-holder's actions. Moreover, under the new amendments the state is unable to even challenge a license-holder's actions.

With these amendments, the state in fact gives a green light to an investor to commit any action despite its hazardous effects for the environment. The state waives the right to control such actions and examine an investor in any respect. The liability under the Code of Administrative Offences was an effective prevention tool in terms of deterrence of actions inflicting damage on the environment. Restricting the effect of these articles creates dangerous risks. Further, there are significantly increasing risks of illegal hazardous impact as on the environment, as well as on humans, which may lead to future irreparable consequences.

Amendments to the normative acts of Georgia strip off punishment from various types of adverse impact on the environment, and the scores of articles of the Code of Administrative Offences, which until now imposed certain liability, will not apply to a license-holder. For instance, a license-holder is exempt from liability for administrative offences in the areas of industry, use of electricity and thermo-energy and water supply, environmental protection, use of natural resources, history and protection of cultural monuments and education, agriculture, as well as for the breach of veterinary-sanitary rules.

A license-holder, which will enter into the agreement with the Ministry of Energy, will not be held liable for a long list of offences. Among other areas, the list of offences (covered by individual articles in the Code of Administrative Offences) that will no longer apply to entities that have a negotiated agreement with the Ministry of Energy includes:

• arbitrary occupation of a spring, river or lake;
• arbitrary occupation of a state forest;
• Illegal use of cars, trucks and vehicles that do not meet minimum emission standards;
• compensation of property losses inflicted to an enterprise, institution or organization through criminal activities;
• non-observance of land protection requirements;
• misuse of lands of protected territories and their territorial-functional zones;
• making the soil and water unfit for use during the use of minerals in high mountainous regions;
• making the land unfit for use with industrial and other waste and contaminating the land with sewage water, construction of objects having negative effect on the condition of the land; 
• destruction of demarcation lines of protected territories and their territorial-functional zones; 
• violation of requirements of mineral protection, use of minerals without respective license, use of minerals through the violation of terms of respective license; 
• violation of the water protection regime;
• violation of the water protection rules within the protected territories;
• contamination of the sea; 
• violation of the rules of use of ionizing radiation sources; 
• emission of hazardous substances in atmospheric air in excess of allowed norms or in absence of such norms and hazardous physical impact on atmospheric air; 
• violation of norms of use of chemical substances (including chemical substances for protecting the plants and fertilizing the soil) in the environment and the rules of transportation, storage and use of such chemical substances, which has caused damage to the natural habitat;
• misappropriation of irrigation waters;
• violation of rules for regulating the number of wild animals;
• violation of rules of fishing, hunting, as well as other use of wildlife.

Remarkably, these legislative amendments coincided with the Government of Georgia announcing publicly about several large-scale investment projects, including numerous announcements on plans to build hydro-electric power stations. Several places are chosen to this end all over Georgia, where the construction of power stations is either already launched or planned in the near future.

Transparency International Georgia calls for the Government of Georgia to assess damages inflicted by implementation of these laws in a long-term perspective, to identify potential risks, and not to ignore public interests by reason of setting up favorable environment for the investors.