Chapter 2. Environmental governance and management

In the last decade, Finland has continued to modernise its environmental governance by making it more efficient and transparent, as recommended by the 2009 OECD Environmental Performance Review (OECD, 2009). The country’s government remained stable and far above the OECD average on the indicators of effectiveness, regulatory quality, rule of law and accountability (World Bank, 2019). This has had positive implications on environmental management.

Finland has traditionally relied on voluntary actions of the regulated community to comply with and go beyond its legal obligations and adopt green practices. The acceptance of environmental policy implementation as a societal goal also facilitates collaboration across sectors and administrative levels of government, and between regulators, businesses and the public.

Finland is a unitary state with strong local governments. It has 19 regions, which have important responsibilities in spatial planning and education. The Åland region (with a majority Swedish-speaking population) is autonomous with its own competence in environmental matters, including legislation and implementation. The other 18 regional councils are statutory joint municipal boards. Reform of the regional structure to establish full regional governments had been conceived but was terminated in 2019 due to lack of political consensus.

The number of municipalities (310 in 2020) has been reduced through voluntary mergers by almost a third over the last 15 years; the multitude of small municipalities was seen as detrimental to the provision of public services. Local governments have become increasingly independent over the last decade but receive guidance from the central government. They also get funding transfers, which are rarely earmarked.

The Ministry of the Environment (MoE) develops government policies and drafts legislation on environmental protection, land use, nature conservation, construction and housing. The MoE is headed by the Minister of the Environment and Climate Change, whose title emphasises the ministry’s top policy priority. The MoE’s Strategy 2030 has three impact objectives – good environment and diverse nature, carbon-neutral circular economy society and sustainable urban management – with priorities and indicators under each.

Several other ministries have environment-related responsibilities. The Ministry for Agriculture and Forestry (MAF) is responsible for the use of natural resources: forest management, fisheries, hunting and water resources, and infrastructure management (including regulation of water supply and sanitation). It also manages land surveillance and spatial information. The Forest Administration (Metsähallitus) is a state enterprise operating under the oversight of the MAF, as well as guidance from the MoE on relevant issues. Its Natural Heritage Services unit manages Finland's national parks, nature reserves and other protected areas. The Ministry of Economic Affairs and Employment (MEAE) is responsible for mining and energy policies.

Government programmes are structured around horizontal policy objectives, which leads to extensive collaboration between ministries. In addition to four statutory ministerial committees for foreign and security policy, European Union (EU) affairs, finance and economic policy, the government may appoint ad hoc ministerial co-ordination bodies. In January 2021, the government appointed a new ministerial working group on sustainable growth, chaired by the Minister of Finance. It oversees the preparation of a Sustainable Growth Programme for Finland and the related national recovery and rehabilitation plan financed through the EU recovery instrument, and guides and monitors their implementation. Another co-ordination body in the current government is the Ministerial Working Group on Climate and Energy Policy. There are also short-term working groups on issues such as energy and transport taxation reform.

In 2010, a regional administration reform streamlined several agencies into two cross-sectoral state authorities operating at the regional level. It established 6 Regional State Administrative Agencies (AVIs) under the Ministry of Finance and 15 Centres for Economic Development, Transport and the Environment (ELY Centres) under the MEAE. The permitting and compliance assurance functions, previously performed jointly by Regional Environment Centres, were separated. There are concerns that this has led to fragmentation of environmental responsibilities and inefficient use of budget resources.

Four AVIs issue environmental permits under the Environmental Protection Act and permits for water abstraction and construction of water-related infrastructure under the Water Act.1 AVIs process environmental permit applications only for projects with a major impact on the environment (less than 40% of the permitted installations in 2020), as others are handled by local authorities.

Out of the 15 ELY Centres that manage the central government’s implementation and development tasks, 13 monitor and enforce compliance with the environmental and water permits granted by AVIs.2 These ELY Centres also act as competent authorities for environmental impact assessment (EIA) and issue opinions as part of strategic environmental assessment (SEA) of plans and programmes. ELY Centres also oversee preparedness for, and response to, environmental accidents.

AVIs and ELY Centres are independent from the MoE and MAF. These two ministries provide guidance to both agencies in their respective areas of competence and can influence their work through strategic and operational plans and performance agreements. Performance agreements, whose implementation results are reported to the public, are concluded every year between these agencies and the competent ministries. On the one hand, the multi-sectoral nature of AVIs and ELY Centres has contributed to whole-of-government decision making at the regional level. On the other, this has often led to prevalence of local economic interests over environmental considerations.

A particular role is played by the Finnish Environment Institute (SYKE) – a multidisciplinary environmental research and development centre under the aegis of the MoE. In addition to research and development operations, SYKE provides expert services and operates as a permitting and supervisory authority. It handles matters related to, for example, international shipments of waste and international trade in endangered plants and animals.

Regional councils promote regional development and land-use planning, primarily through preparing regional spatial plans (Section 2.3.3). A new concept of “institutionalised dialogues on regional development” has been piloted recently to ensure better co-ordination between the central government and regional councils. Regional councils also support selected activities of municipal environmental authorities.

Municipalities serve both as permitting and supervising authorities on local environmental issues. An environmental authority appointed by the municipal council, frequently the municipal environmental board, is responsible for permitting and compliance monitoring and enforcement. A single body can also serve as a joint authority for more than one municipality. The six largest municipalities (Helsinki, Espoo, Tampere, Vantaa, Oulu and Turku) have significant numbers of dedicated environmental staff. However, some smaller ones dedicate limited resources to environmental management.

Municipal environmental authorities issue and control environmental permits for roughly two-thirds of operators that require them. These functions, on average, take about half of their resources. Municipalities also develop and maintain local environmental services – water supply, sanitation and waste management. Some local governments pool their resources to deliver these services together: for example, several municipalities in the Helsinki area have established a joint environmental services company. The Association of Finnish Municipalities supports and promotes the local governments’ environmental work. In addition, ELY Centres provide compliance monitoring guidance to municipalities to harmonise practices across the country and ensure consistency.

Agreements on land use, housing, and transport between relevant state authorities and Finland’s larger metropolitan areas are a good example of vertical co-ordination. Seven such agreements – for Helsinki, Tampere, Turku, Oulu, Jyväskylä, Kuopio and Lahti – were signed in 2020-21. Municipalities put forward specific goals and detailed plans for achieving them, while the central government participates in the required investments. This mechanism demonstrates the country’s progress in addressing the OECD recommendation to strengthen co-ordination of land-use planning between municipalities and state authorities (OECD, 2009).

Finland had 10 open infringements against EU directives in 2020, less than the number in 2010 (13) and significantly below the EU average of 16 (EC, 2021). Most of the current infringements are related to the transposition of amendments to EU waste directives. An infringement procedure opened in November 2019 signalled deficiencies in the application of EIA (Section 2.3.2).

Finland actively uses ex ante policy analysis to support evidence-based decision making. Regulatory impact assessment (RIA) is conducted for all primary laws and most important subordinate regulations, and includes an evaluation of alternative regulatory and non-regulatory options. However, the consideration of environmental aspects as part of RIA seems to be insufficient. For example, only 23% of the RIAs in 2014 assessed environmental impacts (Hjerp, 2019). Although the government does not regularly use ex post evaluation of legislation, it is planning one of the Environment Protection Act in 2021.

In 2016, Finland established the Finnish Council of Regulatory Impact Analysis (FCRIA) with a mandate to improve the quality of bill drafting and RIA. The FCRIA reviews selected RIAs based on significance and representativeness before approval of the final version of the regulation. It also provides advice and a formal opinion on the quality of the RIA. However, it does not have the power to block regulatory proposals for which RIA has been inadequate (OECD, 2018).

Finland has a well-established tradition in SEAs. SEA is required for all new, or modifications of, land-use plans. However, for local plans, SEA is often reduced to general statements about the environmental impact that are part of broader justification documents. SEA is also routinely used to investigate environmental effects of plans and programmes. For example, Finland has conducted SEA for long- and medium-term climate change policy plans, the national waste plan, the National Risk Management Strategy for Contaminated Land and the National Transport System Plan for 2021-32.

In the Finnish EIA system, regional ELY Centres act as a “liaison authority”: they co-ordinate the EIA process, play a central role in ensuring meaningful public participation in EIA and conduct quality control of assessments. However, as AVIs issue development consents and permits, ELY Centres do not make any decisions based on EIA.

The Finnish EIA system contains one notable gap: the assessment is almost never applied to forestry, the sector that has been the main cause of biodiversity loss in the country. The EIA law requires an assessment in case of permanent alteration of a natural forest or wetland of more than 200 hectares or peatland of more than 150 hectares. However, this threshold is too high, allowing many relevant projects to avoid an assessment. The competent authority could initiate a case-by-case EIA, but this does not happen in practice.

EIA and permitting are not directly linked, distinguishing the Finnish system from those of many other countries. EIA is meant to guide the project planning stage towards more environmentally sustainable alternatives, whereas permit decisions focus on the operational stage. Information gathered in the EIA process must be considered to obtain a building, land extraction, water or environmental permit. However, the results of an assessment are not binding for permit decisions (Pölönen et al., 2011). A recent EU infringement procedure pointed out the weaknesses of EIA implementation under sectoral legislation, particularly in how EIA is considered in issuing building permits. In addition, concerns have been raised about the real impact of EIA on permits for mineral mining activities (recently on the rise in the country) that are issued by the Finnish Safety and Chemicals Agency under the MEAE.

In the last decade, Finland has undertaken several initiatives to streamline its environmental permitting system in line with a recommendation of the 2009 OECD Environmental Performance Review. It has reduced the number of environmental permits by introducing registration and expanding the notification system for small polluters. It has also improved the institutional setup of the permitting system by creating a co-ordinated, one-level network of permit offices, and reduced administrative costs by introducing electronic permit applications.

All environmental permits, whether issued by AVIs or municipalities, are integrated across media and based on best available techniques. In 2011, a requirement to consider material efficiency in defining conditions of environmental permits was introduced into the Environmental Protection Act. The MoE has published a guide on material efficiency in the environmental permitting process. Between 10% and 20% of environmental permits issued by AVIs are appealed to the Vaasa administrative court, mostly by operators or members of the public (Section 2.5.3). AVIs publish the environmental and water permits issued and related information in the electronic environmental permit information service (eLUPA). The business community is exerting pressure on the government to put a one-year limit on the length of permit determination by AVIs. However, such a restriction would be unjustified for high-risk installations.

A 2010 amendment to the Environmental Protection Act simplified the procedure for some small installations permitted by municipal environmental authorities. It replaced customised permits with registration in accordance with government-issued, sector-specific general binding rules (GBRs). Examples include small energy production units, dry cleaners, petrol stations, concrete-producing facilities and painting and coating activities using less than 50 tonnes of organic solvents per year. About 3 400 installations (19% of the total) – those with minor environmental impact, large numbers and stable technologies – were covered by GBRs and the registration regime in 2020. Unlike permits, GBR-based registration is not subject to public hearings on applications.

In 2019, Finland also expanded the use of notifications, which are allowed instead of permitting for lowest-impact activities regulated by municipalities. The roughly 4 100 installations covered by the notification regime include, for example, small farming, food processing and chemical storage installations, and saw mills. Under notification, operators do not have to follow a GBR (except for small animal shelters), but the municipality can set additional operational requirements (which is not the case for registration).

A regulation determines the fees for different types of permits. The fees vary by the facility’s potential level of environmental impact. AVIs recovered an average of 38% of the real permitting costs through permitting fees in 2018 (from 26% to 43% across the four AVIs), with a target to increase the recovery level to 50% by adjusting the fees. Municipalities have low permitting fees.

Any institutional stakeholder or individual can complain against a permit decision and/or permit conditions to the Administrative Court of Vaasa, then to the Supreme Administrative Court. If anyone appeals the granting of a permit to an operator, the operator may proceed with the activity after depositing a bank guarantee for decommissioning in case the court cancels the permit. This is a good practice that reconciles the legitimate needs of economic entities with the procedural requirements of the rule of law.

Spatial planning in Finland is regional and local. The MoE establishes national land-use objectives. For example, the MoE in co-operation with other ministries has developed a non-binding vision “A renewable and enabling Finland” for the country’s regional structure and transport system in 2050 (OECD, 2017). The MoE also provides guidance on the land-use planning process and the regulation of building activities. The National Transport System Plan for 2021-32 adopted by the government in April 2021 after extensive public consultation brings together measures at the national and local levels and aims to integrate transport and land-use planning.

The highest-level spatial plans are regional plans prepared by regional councils. In accordance with the Land Use and Building Act, a regional plan sets out principles for land use and community structure and designates areas needed for regional development. It also provides instructions for municipal land-use planning and other activities that affect land use.

Regional councils in coastal areas also prepare maritime spatial plans in co-operation with relevant stakeholders and under the MoE’s co-ordination. The first Maritime Spatial Plan 2030, prepared by eight regional councils responsible for the three planning areas – the Gulf of Finland, the southern and northern Bothnian Sea – was approved in December 2020. The plan is a presentation with a map covering both territorial waters and the exclusive economic zone. It outlines, for example, significant and potential areas for underwater natural and cultural values, energy production, fishing, aquaculture, shipping and tourism. Each area’s opportunities for multipurpose use consider interactions between land and sea areas. Around 60 coastal municipalities also include territorial waters in their spatial plans.

Municipalities prepare local master plans and local detailed plans. Local master plans exist in all municipalities and are approved by the municipal council. Local detailed plans are drawn up to guide development in particularly important or sensitive areas. Regulatory changes introduced in 2017 enable simultaneous implementation of EIA and SEA in case of a project-specific land-use plan. As part of the co-ordinated procedure, the municipality in charge of the land-use plan conducts an SEA, while the project developer prepares an EIA report. The EIA report becomes an input to the draft land-use plan. The public hearing on the draft plan (including its SEA) is held simultaneously with that of the EIA. This co-ordination is more environmentally sound than in some other OECD member countries, which may not do an EIA for every project if the larger programme or plan is subject to SEA.

The 2009 OECD Environmental Performance Review concluded that meeting environmental objectives in land-use planning in coastal areas was hampered by lax enforcement of construction permits (OECD, 2009). Shoreline development is controlled through detailed shore plans approved by municipalities. These plans lay out procedures for granting exceptional building permits in the coastal zone, considering nature conservation, landscape protection and recreational uses. The use of exceptional building permits in coastal areas has decreased in recent years.

ELY Centres monitor regional and local land-use policies to ensure adherence of land use and building activity to national objectives. They also ensure coherence of transport system plans with land-use plans at the regional and local levels, in line with a recommendation from the 2009 OECD review (OECD, 2009). In 2017, the central government’s role in regional planning was substantially reduced, and more land-use planning powers were transferred to municipalities. ELY Centres can only appeal local planning decisions if they carry regional or national importance; this rarely happens with respect to construction decisions in the coastal zone.

The government is designing a comprehensive reform of the Land Use and Building Act with a plan to enact new legislation in 2023. The reform would introduce planning at the scale of metropolitan urban areas and emphasise climate change mitigation and adaptation, as well as biodiversity-related aspects of land use (e.g. continuity of green zones). It would reduce duplication of planning and increase the flexibility of the hierarchy. Specifically, it would limit regional planning to matters of national and provincial importance, which may further reduce national oversight of local planning. The reform would also reinforce SEA of local land-use plans.

In the Finnish compliance culture, once a permit has been agreed upon, operators usually make earnest efforts, using their environmental management system (EMS), to comply with the requirements. This explains a substantial emphasis on compliance promotion, voluntary actions by businesses and reliance on self-monitoring and self-reporting by operators. Coercive actions by enforcement authorities are considered a last resort.

Routine inspections usually account for 70-80% of the environmental inspection programmes of ELY Centres and large municipalities. These inspections are conducted in accordance with 2017 MoE guidance. It specifies minimum inspection frequencies (once a year, every other year, once in three years and once in five-ten years) for four classes of installations based on several risk-based criteria. In addition, special inspections are carried out for new installations as part of the permitting process, to control self-monitoring arrangements and in case of accidents or complaints.3 There are also a significant number of operator-requested inspections, a unique practice used by operators to demonstrate their environmental performance (IMPEL, 2013). Complaints can be brought by either individual citizens or non-governmental organisations (NGOs).

Inspections complement regular electronic submission of self-monitoring reports by operators. These reports cover not only data on air emissions, wastewater discharges and waste generation but also key parameters of technological processes such as raw materials and energy use. Operators must also immediately report electronically to the authorities all exceedances of short-term emission limits, breakdowns, spills or other incidents. ELY Centres charge a fee for checking self-monitoring reports.

Practically all (even special) inspections are announced to the operator in advance to ensure on-site presence of relevant enterprise staff. Since the operator must report all operating incidents anyway, inspectors do not see the sense of unannounced site visits. This practice differs from that of many other OECD member countries that do not want to give operators a chance to hide potential non-compliance. ELY Centres always invite municipalities to join inspections.

The number of inspections by ELY Centres since 2010 has largely depended on the availability of resources (Figure 2.1). In 2015, the government was faced with a financial shortage and declining inspections. In response, it introduced inspection fees for planned site visits, as well as for inspections to verify the rectification of violations. This allowed ELY Centres to hire additional inspectors. The fees, which can also be charged by municipal environmental authorities, are set in a decree for three categories of facilities.

At the municipal level, the same staff work on permitting and compliance monitoring. In 2017, they spent an average of 30% of their working hours on inspections. Data on the number of inspections across municipalities are not available. While the largest municipalities have developed full-fledged inspection programmes, small ones often lack capacity to conduct inspections except in reaction to complaints. Several municipal environmental authorities engage in local inspection campaigns on specific issues.

Fewer meetings between inspectors and operators involve site visits. These meetings may occur several times a year and cover planned changes in operations, potential or recent incidents, implementation of permit conditions, etc. Such regular discussions are based on mutual trust and are considered crucial for maintaining compliance.

Inspection reports are maintained in the Compliance Monitoring Data System (YLVA), which also contains electronic self-reporting submissions by operators, as well as data on materials use, production and pollution releases of individual installations. Through an YLVA-linked case management system, inspection reports are made available following site inspections to inspectors across the country. This system enables ELY Centres to review company performance across Finland. Municipalities have access to this system and must upload information about permitted and registered installations under their jurisdiction, as well as their respective compliance monitoring records. Local authorities can also, to a limited extent, use YLVA in their own compliance monitoring activities.

Finland has made some progress in expanding public access to compliance information, as recommended by the previous OECD Environmental Performance Review (OECD, 2009). YLVA is not open to the public, but some of its outputs are uploaded to environmental authorities’ websites. For example, summaries of inspection reports for high-risk installations are available to the public on line. The public can request access to full inspection reports from the relevant office using their freedom of information rights. There are plans to create a mechanism to publish more environmental compliance data derived from YLVA in connection with the pollution release and transfer register. However, this project has been delayed due to lack of funding.

Non-compliance is low: on average, 15% of inspections detect some sort of regulatory breach. This level has been stable since 2016. If a violation is discovered during an inspection or reported voluntarily, the operator can present a plan of corrective actions to return to compliance. Alternatively, corrective actions may be recommended in an inspection report with a specific deadline. The operator then has to report on the completion of the corrective actions.

If the operator fails to present a compliance plan or its actions are judged inadequate by the competent authority (an ELY Centre or a municipality), then the latter issues a compliance notice and the case may be referred to the police for criminal prosecution. In practice, compliance notices are used rarely: only 36 were issued in the entire country over 2015-19. Even when a compliance notice is used, it is regarded as a sanction in itself (as it is disclosed to the public) and rarely includes penalties.

Even after lodging a statement of criminal offence with the police, the competent authority may continue to investigate the case in an administrative procedure, applying sanctions if necessary. Authorities can impose a conditional fine or an actual administrative fine when the threat of a conditional fine is not enough to restore compliance. In practice, fines are mostly used for waste management violations. Their rate is usually a function of the gravity of the offence and the operator’s ability to pay. The law does not define an upper limit for administrative fines but states the fine should be high enough to ensure operator compliance.

Criminal enforcement in Finland is handled by the police, which have specialised personnel focusing on environmental issues. On average, about 500 cases of potential environmental crime – some reported by citizens and NGOs – are investigated annually. Approximately one in three investigated offences is referred to the prosecution service. About a third of the prosecuted cases concern violations by enterprises. Once brought to court by the prosecution, 75-80% of the charges result in conviction by the court (National Police Board, 2019).

Criminal penalties vary from a fine (based on the severity of non-compliance) to a maximum of six years of imprisonment (based on the severity of the offence). On top of the penalty, the court determines the economic benefits (evaluated by experts) gained from the offence and orders their forfeiture to the state. This good practice of deterring environmental crime is rarely seen in other OECD member countries.

ELY Centres engage in regular enforcement collaboration on environmental matters with municipal environmental authorities, police, the Border Guard and customs through co-operation groups, joint training programmes and on an ad hoc basis. A national working group on monitoring environmental crime (with MoE and SYKE participation) has been in place for over two decades. It has recently been complemented by similar regional working groups. Finland produces an annual report on environmental crime with detailed statistics on offences.

Companies must cover the costs of rehabilitating any areas they have contaminated. This liability must be reported in annual corporate accounts, financial reports and voluntary environmental reports. Such reports are due as soon as contaminated areas have been duly surveyed, and reasonably reliable estimates of rehabilitation costs are available. The liability is strict: proof of a legal offence is not required for the operator to be found liable for damages. ELY Centres can intervene in case of accidents to prevent or limit environmental damage and then recover costs from the responsible party. However, when the liable party is insolvent or unknown, the remediation burden falls on the government.

A complementary insurance and compensation scheme for environment-related damage to health, welfare and property has existed in Finland for over 20 years. All enterprises whose activities require an environmental permit or a permit from the Technological Safety Authority for handling hazardous chemicals must buy complementary environmental damage insurance. This insurance allows insurance companies to pay compensation even when the party that caused the damage is unknown or financially insolvent. It covers compensation for bodily injury and material losses from environmental causes but not restoration of the environment itself. A similar model is used for the Oil Pollution Compensation Fund, which covers both compensation of private damage and environmental remediation after oil spills.

The Ministry of the Environment is working to widen the scope of the mandatory environmental insurance to reimburse the government’s remediation costs in cases where the liable party is insolvent or unknown. The ministry is also considering the creation of a fund for environmental damage to potentially replace both the insurance and compensation scheme and the Oil Pollution Compensation Fund with a new environmental damage fund fed by fees that would be paid by operators of hazardous industrial installations.

SYKE maintains the National Soil Database System (MATTI) with site-specific data on land areas that are potentially contaminated, confirmed as contaminated, cleaned up and confirmed as clean. The database can be accessed by environmental, land-use and building-supervision authorities. In 2015, there were almost 25 000 MATTI sites. These sites are typically former industrial areas, landfill sites and petrol stations (MoE, 2017).

A government Decree on the Assessment of Soil Contamination and Remediation Needs stipulates that the degree of remediation of contaminated sites should be based on the results of a risk assessment. This means the final remediation standard may differ from the pre-contamination conditions (Milieu, 2019). The MoE has published guidance on remediation of key types of significant environmental damage, including assessment of the significance of the damage, selection of remedial actions and related official procedures.

The 2015 National Risk Management Strategy for Contaminated Land in Finland specifies the key objectives concerning contaminated areas and the needs and means of their remediation. The strategy also includes a national research and restoration programme. The national risk-based programme for investigation and remediation, managed by the Pirkanmaa ELY Centre, is one of the main policy measures for achieving the main goal of the strategy. The sites covered by the programme account for approximately 15% of all remediation sites (MoE, 2017).

Funding is allocated from the state budget for analysing the level of contamination and for clean-up of orphan sites – old contaminated sites where the cause of the damage is unknown or the responsible party cannot cover the costs involved. Municipalities also provide resources for soil and groundwater restoration on orphan sites. In addition, financial support for remediation operations is available through the Finnish Oil Pollution Compensation Fund and the state aid scheme that came into force on 1 January 2020.4 The state aid can cover up to 50% of the eligible costs of investigating the site’s level of contamination and up to 40% of the eligible clean-up costs. Every year about 50 studies are conducted on orphan sites, and ten such sites are remediated with government funding, at a cost of EUR 3-4 million. Conversely, responsible parties remediate 300-350 contaminated sites each year without government support.

Finland has implemented a comprehensive set of compliance promotion measures, including technical assistance, regular dialogue with the regulated community, dissemination of guides on best practices and co-financing with business associations of environmental management studies. Inspectors often have discussions with operators on existing and potential compliance problems and possible solutions. Small and medium-sized enterprises benefit from direct technical assistance. For example, inspectors may help operators to develop their environmental management plans to better comply with regulatory requirements.

The dissemination of guides on best practices has been another prominent feature of compliance promotion in Finland. Environmental authorities co-finance with industry associations the development of studies on specific issues of industrial environmental management. The MoE has also produced a series of fact sheets describing Finnish companies’ eco-innovations and put them on its website. The Confederation of Finnish Industries and sectoral industry associations use their own means (websites, newsletters) to disseminate regulatory and technical guidance. Some industry associations organise compliance promotion seminars for their members.

The government has, as of October 2021, concluded nine Green Deal voluntary agreements with business sectors, usually represented by a trade association, municipalities and other organisations. They cover about 100 companies and other actors and include the following initiatives:

  • The Plastic Carrier Bag Agreement (the first one to be concluded, in 2016) to decrease the consumption of light-weight plastic carrier bags to 40 bags per person by the end of 2025.

  • A Green Deal climate agreement with the automotive sector to have at least 25% of newly registered cars run on alternative fuels by 2025, reduce the average carbon dioxide (CO2) emissions for newly registered cars by at least 4% every year until 2025 and reduce the average age of the car fleet by 1.5% per year until 2025.

  • A Green Deal agreement on developing national waste oil management to increase the recycling of oil waste from 74% to 80% by 2020.

  • A Green Deal agreement to implement a range of measures to reduce CO2 emissions from construction equipment machinery by 2025.

  • A Green Deal agreement to increase the reuse and recycling of demolition materials by 2025.

  • A Green Deal with the cities of Espoo, Helsinki, Turku and Vantaa to have only fossil fuel-free construction sites by 2030 by using green public procurement (GPP).

  • An agreement with the cities of Helsinki, Tampere and Vantaa, as well as a number of procurement organisations, to reduce harmful chemicals in the early childhood education environment through public procurement.

  • The Construction Plastics agreement with several industries and municipalities on separation and recycling of plastic packaging at construction sites to achieve 40% recycling of plastic film by the end of 2027.

  • An agreement with the water utility sector to decrease the municipal wastewater discharges of nutrients and hazardous chemicals.

Several other voluntary agreements are under negotiation, including one to reduce CO2 emissions from the waste sector. In addition, a first industry-wide voluntary commitment has been made in the area of materials efficiency (Box 2.1), which is in line with the respective recommendation from the previous OECD review (OECD, 2009). Finland’s Green Deal initiative to promote sustainability and good management are similar to those implemented in the Netherlands and the Belgian region of Flanders. The Flemish seven Green Deals (as of early 2020) have involved over 1 000 parties, including industry, local governments, NGOs and universities (OECD, 2021a).

Many companies have developed their own initiatives within the framework of corporate social responsibility (CSR), demonstrating significant progress with regard to the OECD recommendation to promote corporate environmental reporting (OECD, 2009). Finnish Business and Society – the largest Nordic CSR network with over 300 members – helps businesses develop CSR expertise through trainings, events, consultancy, tools and studies. In 2019, the Finland Chamber of Commerce launched a climate programme to train businesses on how to commit to and achieve carbon neutrality by 2035. A similar programme on CSR was launched in 2020.

Finnish business has been working on its environmental management methods for years. The number of new ISO 14001 EMS certifications per year increased by 35% between 2009 and 2019. This growth is higher than in Sweden and Denmark and lower than in Norway, with all Scandinavian countries having substantial EMS certification rates (ISO, 2020). The EU Eco-Management and Audit Scheme is not widely used: as of April 2020, Finland had only 4 EMAS-certified organisations with 22 certified sites (EC, 2020).

The MoE does not consider it necessary to make special efforts to promote EMS in industry because international pressure to adopt such systems is a much more powerful factor. Still, operators with certified EMSs receive a slight reduction in their permit fees.

The central government fully recognises the importance of GPP. Finland spends approximately EUR 35 billion on public procurement every year, which accounts for about 16% of the country’s gross domestic product. The government programme includes the objective of increasing the share of innovative procurement to 10% of all public procurement by the end of the parliamentary term in 2023. In September 2020, Finland launched a national public procurement strategy to improve the effectiveness and sustainability of the use of public money.

A national strategy on GPP was part of the government’s 2013 Decision on the Promotion of Sustainable Environmental and Energy Solutions in Public Procurement. It set ambitious GPP targets for the central, regional and local governments. Targets were set, for example, for energy consumption in public buildings, environmentally friendly vehicles and organic food served in public institutions. However, progress towards these targets has not been measured.

There are environmental criteria and guidance for 16 procurement areas, including food and catering, vehicles and transport, construction, energy services, energy-related products and textiles (for uniforms). GPP criteria for furniture, cleaning services, professional kitchen appliances and printing services are under development (EC, 2019). The Law on Environmental and Energy Efficiency Requirements for Vehicle and Transport Service Procurements, transposing the EU Clean Vehicles Directive, went into force in August 2021. It will require a major share of low- and zero-emission vehicles in public procurement of vehicles and transport services.

There is no systematic implementation monitoring of GPP, but a measurement tool is under discussion. A 2017 survey of municipal procurement practices showed that 44% of public tenders included at least one environmental criterion (Alhola and Kaljonen, 2017).

In an innovative practice, the carbon footprint of public procurement was for the first time calculated in 2019 based on the 2015 procurement data.5 The total carbon footprint of Finland’s public procurement turned out to be 8.3 million tonnes of carbon dioxide equivalent. The central government’s procurement accounted for 21%, municipal procurement for 57% and joint municipal authority procurement for 22% of the total (Nissinen and Savolainen, 2020).

In 2018, a strategic partnership of eight organisations (including, among others, SYKE and the Association of Finnish Local and Regional Authorities) established KEINO – a competence centre for sustainable and innovative public procurement. The centre is funded by the MEAE. KEINO’s main operations include a development programme for strategic management of procurement, support for Green Deals for the public sector (see above), capacity building and dissemination of good practices. KEINO has also studied the status of GPP and innovative public procurement in Finland, among other issues.

Finnish people trust their institutions: the central government enjoys the trust of 66% of citizens, local governments – 52% (OECD, 2021b). Finland is also one of the EU countries with the highest online interaction between public authorities and citizens (EC, 2019). It has an action plan on open government that encourages public participation across the board. The National Democracy Programme 2025, issued by the government in 2019, aims at promoting participation and new forms of interaction between the public administration and civil society. Still, the share of people who believe they can influence political processes is small compared to other countries with high trust in government (OECD, 2021b). According to the Civic Space Scan of Finland (OECD, 2021c), a more transparent, co-ordinated and consistent approach to the choice of civil society actors consulted by different ministries would help build partnerships and trust.

Environmental democracy builds upon a high level of public awareness: 95% of Finnish citizens consider protecting the environment to be important or very important, with 60% of the public concerned about climate change and marine pollution. Over a third of the public sees providing more information and education (35%) as a key solution to these problems (Eurobarometer, 2019).

Public participation in legislative drafting is a well-established practice in Finland. This can take the form of ad hoc committees, working groups and public hearings with participation of all relevant interest groups. These are widely used during the preparation of environmental laws or decrees and the elaboration of Finland’s positions in the European Union. Environmental NGO representatives may participate in international forums as part of the official Finnish delegation and receive travel grants for this purpose (MoE, 2021). The government historically provides substantial funding to environmental and other NGOs, as is common across Nordic countries. Since 2019, this funding has substantially increased compared with the previous government. At the same time, trade unions would like to see their own involvement in environmental policy making grow.

The Finnish National Commission on Sustainable Development is a forum to promote co-operation to achieve the Sustainable Development Goals and to integrate the strategic objectives of sustainable development into national policy, administration and social practices. It gathers key societal actors: government stakeholders, NGOs, industry and research institutes. The commission meets two-three times a year and may also organise seminars and joint meetings with different actors. In 2020, the commission established a special roundtable of climate policy. In April 2021, the Climate Policy Roundtable convened a “citizens’ jury” to assess the fairness and impact of 14 measures to be included in the government’s new Climate Change Policy Plan 2035. The 37-member jury, facilitated by researchers from the University of Turku, adopted a statement with their assessment and proposals of new and supplementary measures. Furthermore, over 18 000 people participated in the online consultation on the plan.

Public participation is an integral part of the EIA, SEA, permitting and land-use planning processes. For example, the permit decision must describe how it has considered objections and other opinions. However, in some cases (e.g. in the forestry sector) timeframes for public consultation do not allow for meaningful involvement of citizens and NGOs.

According to the Act on the Openness of Government Activities, all official documents are in the public domain unless specifically otherwise provided for. Importantly, this includes information on environmental compliance by private entities (Section 2.4.1). If a request for information is refused, it can be challenged by means of administrative appeal to a regional administrative court.

Finland’s joint environmental administration portal (www.environment.fi) is the source of most comprehensive environmental data. The MoE and SYKE websites also present rich environmental information. The MoE site was redesigned in September 2020 to enhance the accessibility of information. The Biodiversity.fi portal includes more than 110 indicators reflecting the state of biological diversity, as well as factors driving changes in it. The country has also made good progress in the implementation of the INSPIRE Directive (2007/2/EC), particularly in the identification and documentation of data. However, there is still room for improvement in access to geospatial data (EC, 2019). These platforms offer improved public access to geographic and sectoral dimensions of environmental information, as recommended by the 2009 OECD Environmental Performance Review.

The first national state of the environment report was published in 2009. SYKE published four information packages about the state of the environment in 2017-18: on black carbon and climate change, urban nature, circular economy, and state and future of Finnish waters. Research reports on environmental issues are also increasingly put in the public domain. A decade ago, only a quarter of such reports were available to the public. By 2020, this share had grown to 62%, with a target to achieve fully open publication in the coming years.

Environmental disputes typically end up with the administrative courts. Most are handled through administrative appeals, with some notable exceptions that are reviewed based on municipal appeal (e.g. municipal land-use plans, building ordinances or local environmental regulations). The administrative appeal is a reformatory remedy, which means the court is competent to amend the challenged decision. In a municipal appeal, the court can only uphold or overturn the authority decision. Municipal appeal is available to all residents of a municipality, while the right to administrative appeal is typically restricted to parties more directly affected by the decision. In addition, the Rural Business Appeals Board handles some appeal cases concerning agriculture, forestry, hunting and fishery (European e-Justice Portal, 2020).

Within the administrative court system, most environmental cases have been centralised in the regional Administrative Court of Vaasa. This court deals with all cases under the Environmental Protection Act and the Water Act, which account for about a quarter of environmental cases in administrative courts nationwide. The court’s judges are specially trained to determine environmental cases. The remaining environmental cases, such as those dealing with nature protection and land-use planning, are handled by the administrative court of the respective region. Its decision can be further appealed to the Supreme Administrative Court.

Citizens have access to courts only if they are directly affected by the matter; in other cases, they have to complain to environmental authorities. To have standing, an NGO must be registered and fulfil certain requirements with regard to the geographic area of operation and activity purpose. For example, the NGO’s area of operation should suffer from the environmental impact in question. Therefore, NGOs operating at the national level may be barred from challenging decisions with only local impact (Box 2.2). However, once the right of appeal is established, appellants, whether NGOs or individuals, are generally free to challenge the decision on grounds of public interest as well.

Costs for administrative proceedings are relatively low in Finland compared to many countries; no lawyer is required, and a fee (EUR 260 in a regional administrative court) has to be paid only if the plaintiff loses the case. Legal aid at the expense of the state is available for persons who need expert assistance in a legal matter.

Finland has made substantial progress with regard to the recommendation on environmental education from the previous OECD review (OECD, 2009): it has created new coursework and support materials, engaging a broad range of non-governmental actors. The 2006-14 Strategy and Implementation Plan for Education for Sustainable Development was implemented with mixed results due to insufficient resources in key areas. Subsequently, the MoE and the Ministry of Education and Culture (MEC) had a working group identify development needs for fostering environmental education and raising environmental awareness. Since 2015, the MoE has funded environmental education projects for about EUR 2 million per year. The MEC’s 2020 sustainable development policy stresses the importance of addressing sustainable development in teacher education and training. The National Agency for Education under the MEC has made climate change the centrepiece of its education for sustainable development activities (Box 2.3). However, no institution co-ordinates climate and environmental education across the central government. An unofficial inter-ministerial sustainable education co-operation group aims at strengthening information exchange, funding co-ordination and effectiveness. Most regions have their own regional strategy or programme and a website on environmental education (MoE, 2021). Ensuring wide dissemination of education materials developed by multiple projects to secure their long-term impact is a challenge.

Under the recently reformed National Core Curriculum for Basic Education, all Finnish schools are expected to have some sustainable development or environmental system and to teach climate change and circular economy topics. In 2018, sustainable development was made a compulsory component of vocational degrees. In addition, environmental aspects have been integrated into competence requirements for every profession.

Higher education institutions have developed common digital learning modules and have been sharing good teaching practices on sustainable development and climate change (Box 2.3). In 2020, Finnish universities adopted principles for sustainable development, including significant commitments to include sustainable development in degree requirements (MoE, 2021). The Interdisciplinary Network of Environmental and Sustainability Education Research (SIRENE) brings together researchers in environmental and sustainability education to increase the impact and visibility of these fields in the Finnish society. The Rectors’ Conference of Finnish Universities of Applied Sciences (ARENE) has recently approved a joint programme for sustainable development and responsibility based on the 2030 UN Agenda for Sustainable Development.

Finland has various environment certificates for schools and educational institutions, including the Green Flag and certification by the OKKA Foundation for Teaching, Education and Personal Development. About 300 schools and kindergartens participated in the Green Flag programme in 2019; 270 of them have been awarded the accolade. The OKKA Foundation maintains the Finnish national Sustainable Development Certification of Educational Establishments with permanent funding from the MEC. The certification system supported by criteria and evaluation tools covers secondary schools, vocational institutions and liberal adult education. As of 2018, the foundation had awarded the sustainable development certificate to 100 educational institutions. Funded by the MEC, the nine Finnish Youth Centres also carry out important environmental education work. The Finnish Association for Environmental Education co-ordinates the work of the various environmental NGOs in this field.

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Notes

← 1. Other AVIs provide services related to occupational health and safety, emergency preparedness and response, and citizens’ legal rights and permits.

← 2. Nine ELY Centres handle transport and infrastructure issues for the Ministry of Transport and Communications; 15 ELY Centres deal with economic development, employment, competence and culture under the auspices of the ministries of Economic Affairs and Employment, Agriculture and Forestry, the Interior, and Education and Culture.

← 3. If the authority does not adequately address a complaint, it may be sued in an administrative court.

← 4. This direct aid scheme has replaced the State Waste Management System for contaminated soil sites. The previous system worked through agreements between the state and the party responsible for the damage (a private entity or a municipality). These agreements defined the objectives and shares of investigation and remediation costs.

← 5. The main method used was the environmentally extended input-output model ENVIMAT, supplemented with statistics on public procurement.

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