Welcome to the first issue of 2025 of our Built Environment Sector Update series. In this issue, we examine a selection of topics and trends impacting our clients during the course of the coming year.
First up, Real Estate partner Janet Cafferky reviews the major reforms introduced by the Planning and Development Act 2024, aimed at streamlining planning and reducing delays. With housing, infrastructure, and land taxation as key Government priorities, she explores how the new rules will impact development costs and foreign investment, and what this means for the sector in 2025.
• Some of our featured articles include:
• Timeline for the Planning and Development Act 2024
• Update on Residential Zoned Land Tax
• Ireland’s Commercial Real Estate Market in 2025
• Social Housing – A New Dawn?
Should you wish to discuss these topics or any other issues impacting your organisation, please contact a member of our Built Environment Sector team.
Key Contacts
Jamie Fitzmaurice Partner, Real Estate jfitzmaurice@mhc.ie
Deirdre Nagle Partner, Head of Planning & Environment dnagle@mhc.ie
Contact our Built Environment Sector team
Timeline for the Planning and Development Act 2024
Jay Sattin Partner, Planning & Environment
+353 86 078 8295
jsattin@mhc.ie
The Planning and Development Act 2024 (2024 Act) was signed into law on 17 October 2024. Since our last insight where we highlighted points of interest for developers, we have published a quick-reference guide that simplifies the key aspects and implications of the new legislation.
In this update, we review the transitional provisions of the 2024 Act and the timeline for commencement of the new provisions.
Repeal of 2000 Act and transition to new provisions
While the 2024 Act has been signed into law, the Planning and Development Act 2000 (the 2000 Act) will continue to apply until repealed and the new provisions commenced by way of Ministerial Order. The phased commencement is expected to take place up to early 2026.
The first commencement order 1 came into effect on 2 December 2024 and commenced Part 26 as well as some preliminary procedural matters. Part 26 relates to the acquisition of certain NAMA assets and the establishment of owners’ management companies by the Land Development Agency.
1. S.I. No. 662/2024 - Planning and Development Act 2024 (Commencement) Order 2024
Deirdre Nagle Partner, Head of Planning & Environment
+353 87 296 2198
dnagle@mhc.ie
Timeline for commencement
We understand that the next phase of commencement will take place in the course of Q1 2025. This phase is expected to include the transition from An Bord Pleanála to An Coimisiún Pleanála.
We understand that by Q2 2025 the commencement of provisions addressing development plans and guidelines is expected to occur. Provisions relating to the Office of the Planning Regulator are also expected to come into effect within this timeframe.
We understand that by Q4 2025 the provisions of the 2024 Act relating to consents are to be introduced. Finally, by Q1 2026, the new rules governing judicial review are expected to be commenced.
Transitional provisions
Broadly speaking, any planning process commenced under the 2000 Act will continue under that Act even after the relevant provision has been repealed under the 2024 Act. For example, where an application or appeal has been made before the repeal of the 2000 Act, the 2000 Act will continue to apply.
Developers should be aware that there are certain exceptions. For example, a planning application for a “Chapter 4” development may be lodged under the 2024 Act, even if the Strategic Infrastructure Development pre-application process was completed under the 2000 Act before the repeal of that Act.
Conclusion
There will be some complexity involved in navigating the applicability and interaction of provisions under the 2000 Act and the 2024 Act during this transitional period.
Developers should be alert to the commencement of the new rules to ensure they follow the correct procedure and time their planning processes to take advantage of any beneficial changes introduced in the 2024 Act.
Please get in touch with a member of our Planning and Environment team if you would like to discuss.
Update on Residential Zoned Land Tax
Jamie
Fitzmaurice
Partner, Real Estate
+353 86 108 5012
jfitzmaurice@mhc.ie
The Residential Zoned Land Tax is a tax brought in as part of the Government’s “Housing for All” plan. The objective is to incentivise development on land that is serviced and zoned wholly or partly for residential use. Recent amendments to the legislation governing RZLT will potentially affect application of the liability. In addition, they will potentially introduce further avenues for deferring liability for certain landowners.
RZLT, from its introduction to now
The Finance Act 2021 introduced the RZLT and tasked local authorities with mapping relevant lands within its scope. Liability for RZLT was originally to take effect from 1 February 2024. The Act gave statutory rights to owners and third parties to make submissions on local authorities’ draft maps and to appeal certain outcomes to An Bord Pleanála in advance of that date.
The initial liability date was later pushed to 1 February 2025 under the Finance (No. 2) Act 2023 along with a postponement of mapping, submissions and appeals deadlines. Landowners will be liable to pay an annual tax equal to 3% of a relevant site’s land value from 1 February 2025. RZLT generally applies unless an owner of a relevant lands can avail of a specific exclusion to RZLT, a statutory basis for deferral, or a change of zoning.
Jane
Lynch Senior Associate, Real Estate
+353 86 103 7492
jlynch@mhc.ie
The following exclusions, among others, apply:
• Existing residential properties subject to Local Property Tax
• Land used integrally in an on-site or adjacent business operation
• Sites subject to the Derelict Sites Levy, and
• Land used for specified uses for utilities, transport and social, community or recreational purposes
More recently, the Finance Act 2024 has introduced new measures in relation to landowners’ change of zoning requests and to criteria for deferral of RZLT.
Some key measures introduced under the Finance Act 2024
1. New opportunity to request rezoning
Landowners can request that a local authority amend the zoning of lands included within the scope of RZLT on the revised map published on 31 January 2025 from 1 February to 1 April 2025. Lands the subject of an existing planning permission or planning application for residential development will not qualify for rezoning.
This opportunity to request rezoning follows previous application windows for landowners to request land rezoning in response to local authorities’ draft and supplemental maps produced since the introduction of RZLT. The opportunity to apply for rezoning has been introduced along with an exemption for RZLT liability arising for 2025 for any land that is the subject of a rezoning request, in response to the revised map of 31 January 2025. Subject to certain conditions, RZLT will not be charged and levied on these sites for this year.
2. Deferral of RZLT on the basis of planning permission
Subject to certain conditions, a landowner may now defer RZLT for up to 12 months from the date of a successful grant of planning permission for a relevant site.
Where development cannot commence because a grant of planning permission is under appeal or subject to judicial review proceedings by an unrelated party, a 12-month deferral period applies. This period starts from the date the grant of permission is ultimately upheld. If the permission is upheld, the landowner may be exempt from RZLT for the duration of the appeal or challenge.
After the deferral period commences:
• RZLT becomes due and payable at the end of the 12-month period, or earlier, if the land is sold to another person or company outside of the original owner’s corporate group
• If a landowner begins non-residential development on the land within the 12-month deferral period, RZLT will no longer be due or payable for the land or the relevant portion of it, or
• If a landowner commences residential development within the 12-month period, the landowner may continue to defer payment of RZLT from the date of the relevant commencement notice. RZLT can become due and payable again after a deferral on the occurrence of certain events, including certain changes of ownership and the permanent cessation of works without a certificate of completion
Conclusion
The Finance Act 2024’s amendments are welcome developments for landowners who are potentially liable for RZLT. The new measures offer scope, particularly to owners of land with the benefit of planning permission for non-residential land use to avoid RZLT. Certain landowners who intend to commence and complete residential development may also be in a position to avail of further deferral opportunities.
Where landowners intend to avail of the opportunity to apply for rezoning, prompt action will be required to meet the 1 April 2025 deadline.
If you would like to discuss concerns regarding the imposition of RZLT on your land, please contact a member of our Real Estate team.
Ireland’s Commercial Real Estate Market in 2025 What can we expect?
Neil Campbell Partner, Head of Financial Services
+353 86 411 6458
ncampbell@mhc.ie
The last 12 months has seen a number of emerging trends in the Irish commercial real estate (CRE) market. We take a look at some of these changes and consider the landscape for 2025.
Market recovery
Following a sluggish 2023, 2024 saw increased take-up in office space. Some notable deals of 2024 included occupiers Stripe, EY and BNY Mellon acquiring large office spaces. There was also some activity where suburban office assets were refurbished to LEED Gold, Grade A standard, such as The Hive in Sandyford.
While it is anticipated that prime A-rated office spaces will remain in high demand, with take-up reaching 2 million square feet, the secondary office market continues to face difficulties as vacancies continue to rise. A decline in valuations combined with borrowers’ inability to refinance or sell, may lead lenders to look at enforcement options.
Structural factors and geopolitical tensions
Despite a rise in office take up, the Irish CRE market remains exposed to heightened geopolitical and economic risks. Macro issues such as these are further compounded by the ongoing adjustments brought on by structural factors, notably the rise in remote working and the ICT global headcount reduction. These factors have ultimately impacted demand and contributed to a decline in valuations,
Lorena de Carvalho Associate, Banking & Financial Services
+353 86 440 1038
lcarvalho@mhc.ie
posing challenges for lenders and investors in the Irish CRE market.
However, on a more positive note, the Central Bank of Ireland (CBI) has reported that the domestic banking system “has capacity to absorb, rather than amplify” the current CRE downturn. The regulator has also noted that the “bank’s buffers of loss absorbing capital are also much larger”. The resilience of the domestic bank system serves as a reassuring factor for borrowers.
Falling interest rates
The Irish CRE market in 2024 showed emerging signs of stabilisation. The European Central Bank’s easing of interest rates boosted the Eurozone economy by incentivising borrowing, spending and investment. Despite increasing inflation in the Eurozone at the end of 2024, further interest-rate cuts are envisaged by the end of 2025. The ECB reported that:
“Conditions in euro area CRE market show signs of stabilisation, with investor demand recovering somewhat, in line with less restrictive monetary policy. However, structural factors… as well as environmental considerations continue to make the outlook for real estate firms challenging”.
For borrowers, interest rate cuts may alleviate some of the difficulties they are faced with when it comes to refinancing existing loans and it may also decrease price pressures. However, the impact of interest rate cuts will depend on how businesses and investors respond in the months ahead.
Dodging the “refinancing cliff”
The CBI reported in June 2024 that “given sharp falls in some CRE valuations experienced in the last two years, loan refinancing in the market is particularly vulnerable to the impact of higher LTVs on banks’ appetite and ability to continue lending”. However, as we highlighted in our previous article, this opens up opportunities for lenders in the private credit space. As the CBI reported in December 2024, private credit growth has strengthened since June 2024 and specialist property lenders account for a large share of the sector’s funding.
In addition, the risks associated with falls in CRE valuations may be contained by a more gradual future maturity profile. In its June 2024 report, the CBI set out that whilst 25% of CRE loans in Ireland had a maturity date of 2024, the medium-term picture is that for the years 2025 – 2028 the maturity cycle is more gradual.
Comment
Despite conditions in the Irish CRE market showing signs of stabilisation, structural factors and geopolitical uncertainties continue to be a challenge for the CRE market in 2025, leaving the Irish economy vulnerable to external shocks. In the absence of a sustained appetite for CRE debt in Irish banks, there is an opportunity for international investors and alternative credit funds to play a role in the next phase of Irish CRE cycle.
For more information and expert advice on navigating the issues impacting the Irish CRE market in 2025, contact a member of our Financial Services team.
Social Housing – A New Dawn?
Paul Bassett
Consulting
Partner,
Construction, Infrastructure & Utilities
+353 86 026 0207
pbassett@mhc.ie
What you need to know
• The draft Programme for Government has set an ambitious target of delivering 300,000 new homes by 2030, with 12,000 new social housing units to be constructed each year
• The Government had aimed to deliver 40,000 new homes by the end of 2024
• The Programme for Government would require a significant increase in delivered units to meet this target
Housing was a key issue in last year’s general election. The draft Programme for Government recognises the importance of this issue and has targeted the delivery of 300,000 new homes, including 12,000 social houses annually, by the end of 2030. To achieve this target, the State will have to deliver houses at a scale and speed far greater than it has managed to date. We examine some of the headline measures proposed to achieve this goal with a focus on how they may impact social housing, in particular.
Stephen McGonagle
Associate,
Construction, Infrastructure & Utilities
+353 86 013 9080
smcgonagle@mhc.ie
Accelerating delivery
The Programme acknowledges that delays and red tape are a major issue in delivery of housing. As a result, the Programme has committed to:
• Implementing the Planning and Development Act 2024
• Enacting a new Compulsory Purchase Order Bill with the aim of streamlining and strengthening the ability of the state to acquire under-utilised land for home building
• Requiring all local authorities to facilitate a pre-planning meeting for every new significant development above a set threshold
• Introducing statutory timelines for wastewater and energy connection agreements to ensure large developments are not delayed
• Establishing a new procedure for developments in excess of 100 units where a developer can meet with the local authority and Uisce Éireann on site to address and troubleshoot any issues at the pre-planning stage
• Integrating the existing Housing Delivery Groups into a new Strategic Housing & Infrastructure Delivery Office under the Minister for Housing. The measure aims to accelerate home building by unblocking infrastructure delays, and
• Introducing a single-stage approval process for all standardised social housing and affordable projects
Increasing capacity
The Programme notes that approximately €24 billion is required per annum to build 60,000 homes annually until 2030. The programme commits to:
• Developing new financing sources for brownfield sites and small builders with support from domestic banks, Home Building Finance Ireland, the Housing Finance Agency and state support, through equity investments
• Introducing cost rental backstops to allow local authorities and the LDA to reduce financial risk, and
• Expanding the role of credit unions in the delivery of housing
To address the resource shortage, the programme is targeting 12,500 new apprentices annually by 2030 with two thirds of these apprentices in craft and construction. The Programme also commits to increasing permits for residential construction workers and an overseas recruitment drive.
Innovation in housing
The Programme plans to promote Modern Methods of Construction, also referred to as MMC. It also aims to set binding targets for MMC use in at least 25% of all State-backed housing. The Government further proposes to promote the use of timber in new buildings and ensure multi-storey timber frame residential developments can be delivered.
The Programme looks to introduce a new voids programme to improve the turnaround of vacant social housing units. It will also require local authorities to provide tenant names to Approved Housing Bodies (AHBs) before project completion in order to facilitate quicker occupation of units.
The Programme proposes reformed delivery models to achieve targets, including a restriction on local authorities and AHBs acquiring bulkpurchase developments post-completion. Although it provides no additional detail on these reformed models, there is an indication that this will lead to a greater emphasis on forward-funding or self-build developments for local authorities and AHBs.
Comment
Given that it was expected that 40,000 new homes would be built in 2024, the draft Programme for Government sets an ambitious target for new homes. The Government has set out overarching points as to how these targets can be achieved, but as always the devil will be in the detail of the specific policy measures implemented to drive these targets.
For more information and guidance on the impact of the draft Programme on any anticipated projects, contact a member of our Construction, Infrastructure & Utilities team.
Director and Manager Found Guilty of Health & Safety Breaches
Jay Sattin Partner, Planning & Environment
+353 86 078 8295
jsattin@mhc.ie
All employers owe duties to their employees to ensure their health and safety in the workplace, insofar as is reasonably practicable. Many employers are companies having their own legal personality. However, under Irish health and safety legislation, directors and senior management of companies may be held personally liable for breaches of certain provisions of Irish health and safety legislation. An example of this was recently seen in the Circuit Court. Criminal proceedings were brought against Shay Murtagh (Pre-Cast) Limited and its director, Mr Murtagh, and health and safety manager, Mr Whyte.
Factual background
In the Shay Murtagh case, the company was upgrading the electrical installation at its manufacturing facility in May 2022. Two of its employees were installing new electrical cables across the top of a roof of a maintenance shed. One of the employees stepped on, and fell through, a fragile roof light. The roof light was partially camouflaged by dust and debris. The employee fell over seven metres to the concrete floor below. He survived the fall but suffered serious injuries. The company, company director, and the company’s health and safety manager were all charged. The charges related to breaches of the Safety, Health and Welfare at Work Act 2005, as amended (the 2005 Act). Essentially, it was alleged that they each failed to take adequate precautions.
David Foy Associate, Planning & Environment
+353 86 167 3086
dfoy@mhc.ie
They were also accused of not ensuring a safe system of work was in place. This included failing to prevent persons working on the roof from being exposed to inadequate edge protection and fragile roof lights.
Prosecution of the director
Both the company and the company director were charged with breaches of section 8(2)(e) of the 2005 Act. In the case of the company, the breach was alleged to violate section 77(9) of the 2005 Act. In the case of the company director, the breach was alleged to be in breach of section 77(9) and section 80 of the 2005 Act.
Section 8(1) requires “every employer” to ensure, so far as is reasonably practicable, the safety, health and welfare at work of their employees. Section 8(2) (e) builds on this general requirement. It specifies that employers must provide systems of work that are:
“Planned, organised, performed, maintained and revised as appropriate so as to be, so far as is reasonably practicable, safe and without risk to health”.
An employer is deemed to have committed an offence under section 77(9)(a) if a person suffers any personal injury as a consequence of the employer breaching section 8.
This simply means than an employer commits an offence if:
• The employer breaches the duty it owes to its employees under section 8, and
• This breach results in injury to the employee
However, section 80 provides that, where a company commits this type of offence, its director, manager, or other similar officer may also be guilty of the same offence.
The test to establish whether a director, etc is guilty of such an offence is this – was the act or thing that constituted the offence authorised by, or consented to by, or attributable to connivance or neglect on the part of the director, manager, etc? In the Shay Murtagh case, the company director pleaded guilty to the charges brought against him. Therefore, there was no need for the prosecutor in that case to establish that this test had been met.
Prosecution of the health and safety manager
In this case, the company’s health and safety manager was prosecuted violating section 14(b) of the 2005 Act, as outlined in section 77(2) of the 2005 Act. Section 14(b) provides that:
“A person shall not intentionally, recklessly or without reasonable cause, place at risk the safety, health or welfare of persons in connection with work activities”.
It should be noted that section 14(b) refers to “a person” whereas the obligation under section 8 is on “every employer”.
A person is considered to have committed an offence under section 77(2)(b) if they violate section 14 of the 2005 Act. For this reason, the charges were able to be brought against the health and safety manager under sections 14 and 77(2), without the prosecutor having to invoke section 80.
The company’s health and safety manager pleaded guilty to an offence under section 77(2) for having breached his duty under section 14.
Penalties
Having each pleaded guilty to the charge brought against them, the company was fined €125,000 and ordered to pay costs of €6,000. The company director and health and safety manager each had the Probation Act applied to them
Conclusion
There is an increasing trend in company directors and senior management being held personally liable for breaches of health and safety legislation. It is critical that persons at all levels within an organisation are aware of their health and safety duties and obligations. This applies to organisations of any size. It is equally important that they follow clear and well-established procedures.
The Health and Safety Authority highlighted an important point following the Shay Murtagh case. Employers must manage and conduct work activities at the workplace carefully. This is essential to ensure the safety, health and welfare of all employees. Risk assessments should be carried out before commencing any work, especially work with inherent risks like working at height.
For more information, please contact a member of our Planning & Environment team.
A Receiver’s Right to Collect Rent
Frank Flanagan Partner,
Restructuring & Insolvency
+353 87 296 3555
fflanagan@mhc.ie
A receiver validly appointed under a standard mortgage enjoys a right to collect the rent of the property over which he or she is appointed as a matter of law. Absent interference or lack of cooperation from the borrower, a receiver does not need an injunction to do this.
Section 108(3) of the Land and Conveyancing Law Reform Act 2009 provides, insofar as relevant:
“The receiver may—
(a) demand and recover all the income to which the appointment relates, by action or otherwise, in the name either of the mortgagor or mortgagee, to the full extent of the estate or interest which the mortgagor could dispose of,
(b) give effectual receipts accordingly for such income,…”
Section 108(5) protects a tenant paying rent to the receiver:
“A person paying money to the receiver is not required to inquire whether the receiver is authorised to act.”
Equivalent provisions apply to mortgages granted prior to 1 December 2009 under the Conveyancing Act 1881.
Injunctive relief
When receivers seek injunctive relief in relation to the collection of rent it is normally sought as an order to restrain the mortgagor (or another party) from interfering with the collection of rent from the properties over which the receiver is appointed.
Judith Riordan Partner,
Restructuring & Insolvency
+353 86 839 9468
jriordan@mhc.ie
An injunction of this form does not grant a right to the receiver, it merely restrains the interference with the underlying legal right to collect the rent.
O’Dwyer v Grogan
In O’Dwyer v Grogan1, the High Court decided that, because of delay in progressing plenary proceedings, the plaintiff receiver was no longer entitled to the benefit of an interlocutory injunction granted in 2022. That is not, of itself, particularly controversial.
The judge stated, at paragraph 81:
“This is a case in which the Plaintiff was given an interlocutory right to collect rents pending trial, intended to temporarily displace the rights of the Defendants to do so. However, owing to the Plaintiff’s own default and delay, she has had that ‘temporary’ right for far longer than the Court intended when granting the Injunction.”
And at paragraph 89:
“…there is a clear benefit to the Defendants by being restored to their position as the collectors of rents unless and until AIB gets an order for possession.”
Comment
While there may have been further orders not apparent from the judgment, the judgment may cause parties to misunderstand their rights. In particular, it could cause a mortgagor to believe that a court order is required by a receiver to collect rent. Simply discharging an injunction restraining a mortgagor from collecting rent does not entitle the mortgagor to collect the rent. A validly appointed receiver remains entitled to collect rent and to sue tenants for non-payment, if the rent is paid to the mortgagor.
Duties to Investigate Abnormally Low Tenders in Ireland
The New Normal
Dorit McCann Partner, Head of Public Procurement
+353 87 785 0016
dmccann@mhc.ie
Background
In this case, White Mountain Quarries challenged the award, by Mayo County Council, of a public lighting energy efficiency contract in the North West region to a consortium. The value of the contract was €23.5 million.
White Mountain argued that the Council had failed to consider that the successful tender appeared abnormally low. They also contended that the Council had failed to follow the procedures required by procurement law, specifically Regulation 69, before making a decision to award the contract. In other words, White Mountain was of the view that the Council had failed in its duty to “require economic operators to explain the price or costs proposed in a tender which appears to be abnormally low”.
When does a duty to investigate arise?
The High Court summarised previous EU case law and confirmed that, while there is no general duty to reject a tender that appears to be abnormally low, there is a duty to investigate. The Court noted that this necessarily entails at least a “prima facie assessment of whether the tender is or arouses suspicion of being abnormally low”. The Court confirmed that this would be the case “in particular, where the price proposed in a tender is considerably lower than that of the other tenders or the normal market price.”
The Court highlighted the following procedural steps:
• The authority must make a prima facie assessment of whether a tender is abnormally low, even in a case where it is only suspected to be so
• If a tender appears to be abnormally low, the authority must request the information required by Regulation 69. While this is not required in every case, if there is so much as a suspicion, an investigation is required
• The authority must then assess the information by consulting the tenderer
• Finally, the authority must determine whether the evidence supplied satisfactorily accounts for the low level of price or costs proposed
In this case, the Court noted that the difference between the tenders was, in the words of the Council itself, “massive”. The successful consortium had tendered rates below those in sectoral employment orders. While these rates were blended and could arguably be offset by other rates, the Court held that a tender which does not comply with applicable obligations, such as those relating to labour law, must be treated as an abnormally low tender. It is not sufficient for a clause in the contract which requires the contractor to comply with the applicable legislation, as was the case here.
The Court therefore found that the authority had failed to meet its obligations under Regulation 69. This was due to the fact that, it had failed to undertake a review in circumstances where it should have considered that the tender appeared to be abnormally low.
Importance of record keeping
The Court placed considerable emphasis on the fact that there were no minutes of evaluation meetings, no evidence from any evaluation panel member and that the evaluation report did not address several issues relied on in court. This again highlights the need for contracting authorities to keep clear, consistent and detailed evaluation records which justify the decisions made during the process.
Observations on timing
Proceedings in this case were issued 48 days after the standstill letter and were therefore arguably out of time. The Court rejected arguments that the applicant was time barred. While the applicant had sufficient information to assert that the tender was abnormally low, it had only later become aware that no Regulation 69 investigation had been undertaken. The Court also considered that allowing the application to proceed would not prejudice the Council. This was because the procedure had already been suspended due to another separate challenge, which was subsequently dropped.
Conclusion
This case provides further clarity around the duty to investigate abnormally low tenders in Ireland. It clarifies that, if there is so much as a suspicion that a tender is abnormally low, an obligation arises to investigate in accordance with Regulation 69. That duty will always arise where a tenderer quotes rates below those in sectoral employment orders. Other evidence could include, for example, significant differences between the prices of tenders.
The Court’s criticism of the lack of any minutes of evaluation meetings once again highlights the need for comprehensive records relating to the evaluation process.
For more information on any public procurement issue, please contact a member of our Public Procurement team.
Reform of Water Abstraction Legislation
Jay Sattin Partner, Planning & Environment
+353 86 078 8295
jsattin@mhc.ie
Ireland is obliged under the EU’s Water Framework Directive1 to introduce a control and registration system for the abstraction of water. Ireland’s previous legislation was lacking a comprehensive control regime in this area. The recently commenced Water Environment (Abstraction and Associated Impoundment) Act 2022 (the Act) and associated Regulations aim to introduce a regime for the control of the abstraction of water on a risk-based approach.
Meaning of water abstraction
The Act aims to regulate the ‘abstraction’ of water from the environment. The term ‘abstraction’ means “the removal or diversion of water from the water environment”. The regulation of water abstraction also applies to any associated ‘impoundment’ of water. This means the doing of anything whereby the water level, or flow in surface waters, or the continuity of the morphological condition of a body of surface water, is permanently or temporarily changed by means of a structure such as a dam or weir.
Registration requirements
The Act repeals several different pieces of legislation. This includes the European Union (Water Policy) (Abstractions Registration) Regulations 20182 (the 2018 Regulations). The 2018 Regulations governed the registration of all water abstractions of 25 cubic metres and above per day.
1. Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (as amended)
2. SI No 261 of 2018
David Foy Associate, Planning & Environment
+353 86 167 3086
dfoy@mhc.ie
This is defined as the “registration threshold” under the Act. The Act replicates the requirements under the 2018 Regulations, ie in that registration is required for abstraction above the registration threshold. That is unless a rate has been prescribed by the Minister for the Environment.
These abstractions must now be registered with the Environmental Protection Agency (EPA). A person who carries out an abstraction that exceeds the “registration threshold” must give notice of that abstraction in a prescribed form to the EPA, within one month of the commencement of the abstraction.
New licensing requirements
Under the Act, an EPA licence must now be held for the following types of water abstractions:
• An abstraction that meets or exceeds the “licensing threshold” - An abstraction that is below the licensing threshold but which the EPA has notified the person carrying out the abstraction that the EPA considers a licence is required in order to facilitate the proper regulation of the abstraction
• A ‘significant abstraction’. This means an abstraction that meets or exceeds the “registration threshold”, is below the licensing threshold, and the EPA determines is a significant abstraction, and
• A registered abstraction that the EPA determines should be subject to a retrospective environmental impact assessment (EIA). The abstraction must be on the current register, be a sub-threshold development, not otherwise require a licence, and the EPA has determined that an EIA is required
Anyone who continues to operate an abstraction after 28 August 2024 must apply to the EPA for a licence within six months, ie by 28 February 2025. An extension for submitting the application may be granted by the EPA. These abstractions may continue to operate until such a time as the licence application has been determined. New abstractions requiring a licence cannot be commenced until a licence has been obtained.
Licensing processes
The Act outlines specific requirements for various aspects of water extraction. These aspects include:
• The licence application, including the need for any EIA
• Proposed revisions to existing abstractions, and
• Surrendering and transferring licences
Regulations for unlicenced abstractions
Water abstractions that do not require a licence, are not required to be registered or are awaiting a determination of a licence application are still required to comply with Part 2 of the Water Environment (Abstractions and Associated Impoundments) Regulations 2024. Some of the obligations include that operators of unlicensed abstractions are required by the Regulations to measure or, where appropriate, estimate the daily rate of the abstraction. Records of the results of all measurements or estimations must be maintained for inspection for at least three calendar years.
An abstraction is prohibited if:
1. It reduces flow levels:
In a way that creates a barrier to the passage of fish, or
2. It interferes with sediment transport:
Within a body of surface water, causing:
• Deterioration in the status of the water body, or
• Non-compliance with standards or objectives for a protected area
Exemptions
The Minister may prescribe certain abstractions or related activities to be exempt from regulations for unlicensed abstraction or registration requirements. The exemption can only be granted if the Minister is satisfied that it will not have a significant impact on the status of surface water or groundwater.
Enforcement
The Act provides enforcement powers to the EPA, including investigative powers and the issuing of compliance notices. Breaches can be subject to fines. Depending on the type of breach, it can be up to a maximum fine of €15,000,000 or imprisonment for a term not exceeding 10 years, or both. In addition, a director, manager, secretary or other officer of the company can be liable in certain circumstances.
Conclusion
Developers and operators of water abstractions should familiarise themselves with the requirements of the Act and associated Regulations. The new licensing requirements apply to all abstractions over the “licensing threshold”. The new licensing requirements may also apply to other abstractions that fall below the “licensing threshold” but are still deemed by the EPA to require a licence.
The new licensing requirements may also apply to abstractions which are considered “significant” or where a retrospective EIA is required. The legislation also introduces requirements for carrying out an EIA or retrospective EIA that must be adhered to.
An abstraction that does not require a licence must still be registered if it exceeds the “registration threshold”. Even if registered, it may still be prohibited if it causes deterioration of the water body or jeopardises compliance with certain environmental objectives.
For more information, please contact a member of our Planning & Environment team.
Screening of Third Country Transactions Act 2023
Key features of Ireland’s first investment screening regime
Tara Kelly Partner, Head of Competition, Antitrust & Foreign Investment
+353 86 145 5201
tarakelly@mhc.ie
The Screening of Third Country Transactions Act 2023 (the Screening Act) introduces the State’s first investment screening regime and implements Regulation (EU) 2019/452 (the EU Screening Regulation).
The Screening Act commenced on 6 January 2025 and enables the Minister for Enterprise, Trade and Employment to review certain transactions involving foreign investors for potential risks to the security or public order of the State. The Minister has published detailed ‘Inward Investment Screening Guidance’ (the Guidance), which helpfully clarifies several elements of the Screening Act.
Key features
Key aspects of the new regime are:
Mandatory and suspensory: The Screening Act introduces a mandatory and suspensory notification regime, similar to merger control. If a transaction meets the four criteria listed below, the parties must notify it to the Minister and obtain approval before completion. The only exception is for transactions that complete by 15 January 2025, which may be notified post-closing within 30 days of completion.
1. Investor from outside the Single Market: a “third-country undertaking”, ie from outside the EEA and Switzerland, or a person connected with such an undertaking, directly or indirectly:
• Acquires control of an asset or an undertaking in the State, or
• Changes the percentage of shares or voting rights in an undertaking in the State above 25% or 50%
The Guidance confirms that the Screening Act applies to direct and indirect investment from a third country. Therefore, a ‘third country’ investor using an EEA- or Swiss-incorporated acquisition vehicle is in scope.
The Screening Act also applies to EEA and Swiss investors if they are closely connected with a ‘third country’. This can include family relationships, acting as a trustee for beneficiaries from a third country, or being in partnership with a third-country undertaking or national.
2. Value of transaction is at least €2 million: the cumulative ‘value of the transaction’ and other transactions between the parties is at least €2 million in a period of 12 months before the date of the transaction. The Guidance confirms that this threshold relates to the entire value of the transaction, ie the consideration being paid by the acquirer, including any international dimension.
3. Not an internal reorganisation: a transaction is not required to be notified if the same undertaking, directly or indirectly, controls all the parties to the transaction.
4. Transaction relates to, or impacts on, one or more critical sectors: The Guidance helpfully confirms that an Irish nexus requirement applies to the following critical sectors. This means that the target must operate the “critical” element of its business, or the critical infrastructure must be located, in Ireland.
• Critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of that critical infrastructure. The Guidance clarifies that a notification will only be required where the infrastructure in question comes within one of the categories listed in Annex 1 of EU Directive 2022/2557 (the CER Directive) and an incident would have “significant disruptive effects”, which must be determined on a case-by-case basis by reference to a prescribed list of factors.
• Critical technologies and dual use items, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies. The Guidance clarifies that a technology is critical, and within scope, if it is listed as either a dual-use item in Annex 1 of the EU’s Dual Use Regulation (Council Regulation 2021/821), or as military technology or equipment in the EU’s Common Military List (Council Common Position 2008/944/CFSP).
• Supply of critical inputs, including energy or raw materials, critical medicines, as well as food security.
• Access to sensitive information, including personal data, or the ability to control such information. The Guidance states that sensitive information is data that must be protected from unauthorised access and may be business, government or personal data interpreted in accordance with the definition of Special Category Data under the GDPR.
• The freedom and pluralism of the media. This category includes media businesses operating, selling or otherwise active in the State. The Guidance clarifies that the level of activity of the media business in the State, based on sales, subscribers, viewers or other relevant metrics, must be substantive to trigger mandatory notification.
Asset acquisitions: the object of the transaction may be an asset, provided there is a change in control of the asset. The Guidance provides that an asset does not need to be an asset constituting a business to which a turnover is attributable. For example, the sale, acquisition or licencing of IP rights could give rise to a notification requirement.
Target or part of the target must be ‘in the State’: an asset is deemed to be ‘in the State’ when it is physically located in the State or, in the case of an intangible asset, owned, controlled or otherwise in the possession of an undertaking in the State. An undertaking is ‘in the State’ when it is constituted or otherwise governed by the laws of the State or has its principal place of business in the State.
Multi-party obligation to notify: the notification obligation rests on all parties to a transaction meeting the relevant criteria, unless they are not aware of the transaction. Joint notifications are possible and are expected to be the norm.
“Call in” powers: the Minister may “call in” for review notifiable transactions that are not notified, referred to as ‘non notified transactions’. Similarly, transactions that are not notifiable may be called in for review, where the Minister has reasonable grounds for believing the transaction affects, or would be likely to affect, the security or public order of the State. The Guidance clarifies that this power is aimed at new or emerging technologies or sectors that are not captured by the mandatory notification criteria set out in the Screening Act.
The Minister must exercise the ‘call in’ power within 15 months of the transaction being completed in the case of transactions that are not notifiable. In the case of non-notified transactions, the applicable time limit is the later of 5 years from completion or 6 months from the Minister becoming aware of the transaction.
Retrospective application: the Minister can ‘call in’ for review any transaction that completed not more than 15 months before the commencement of the Screening Act, ie after 1 October 2023.
No voluntary regime: the Screening Act does not provide for voluntary notifications.
Offence of gun-jumping: it is a criminal offence to complete, or take steps to complete, a nonnotified transaction or a notified transaction under review by the Minister prior to the Minister issuing a screening decision clearing the proposed transaction or making it subject to conditions. Where the transaction is subject to a conditional screening decision, it is an offence to complete the transaction other than in accordance with those conditions.
Information requests: the Minister may request further information. Failure to comply with a ‘notice of information’ or the provision of false information in response is a criminal offence.
Lengthy review timeline: the Minister is required to make a screening decision within 90 days from the date on which the Minister issues a screening notice regarding the transaction. The 90-day review period may be extended to 135 days at the discretion of the Minister. The review period is suspended by the issuance of a notice of information and resumes on the date that the notice is deemed to be complied with. The Guidance confirms that the Department considers 90 days to be the outer bound of the statutory review period, not the target, and in practice many transactions will be cleared quicker.
Wide-ranging powers to impose remedies: the Minister may prohibit the transaction, or parts of it, or impose conditions. Conditions can include divestment requirements, behavioural requirements, ring-fencing requirements, and compliance reporting obligations.
Criminal sanctions: persons found guilty of an offence under the Screening Act may be liable, on summary conviction, to a fine not exceeding €5,000 and/or up to 6 months imprisonment or, on conviction on indictment, to a fine not exceeding €4 million and/or up to 5 years imprisonment.
Depending on the facts, both the undertaking and any director, manager, secretary or other officer of the undertaking, or a person purporting to act in that capacity, may be guilty of an offence and held liable.
Appeals: parties to a transaction may appeal a screening decision to an independent adjudicator and must notify the Minister that they are appealing no later than 30 days after being notified of the screening decision. The appellant must submit the appeal to the adjudicator within 14 days after providing notice to the Minister. A decision of an adjudicator may be appealed on a point of law to the High Court.
Conclusion
The Screening Act is one of the most significant developments in Irish M&A in recent years. It has the potential to cast a wide net. Investors should be thinking now about key questions such as:
• Does the transaction meet the criteria for a mandatory notification?
• Are investment screening warranties required?
• Should provision be made in the deal documentation for a potential notification?
• What is the potential impact of a notification on the deal timeline?
• What remedies could be required by the Minister to address any public order and/or security concerns?
• If the transaction is not mandatorily notifiable or has closed since 1 October 2023, is it at risk of being called-in for review by the Minister?
Early engagement on these and other questions is advisable. Please get in touch with a member of our Competition, Antitrust & Foreign Investment team for more information.
Built Environment
The growth of our cities has resulted in the Government and other stakeholders adopting more innovative approaches to building, urban development and infrastructure projects.
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