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Supreme Court ruling on Kárahnjúkar environmental impact assessment in favour of Landsvirkjun and the Icelandic State

January 22, 2004

The Supreme Court of Iceland concurred with the earlier findings of the District Court of Reykjavík that a Decision made by the Minister of Environment to reverse the decision of the Planning Agency and adopt the findings of the Environmental Impact Statement (EIS) of Landsvirkjun was according to legal procedure and based on valid legal arguments to be followed by the Administration.

Background information:
In the summer of the year 2000 Landsvirkjun submitted to the National Planning Agency schedule for the Kárahnjúkar Power Plant EIA. The EIS prepared by Landsvirkjun was introduced in the spring of 2001, i.a. the company opened a special homepage to facilitate public access to the EIS and relevant information regarding the project. During the statutory introduction period the Planning Agency received a number of opinions and reports from experts and also letters from the public.

On 1st August 2001 the Planning Agency decided to reject the EIS of Landsvirkjun on the ground of substantial environmental impact caused by the project and insufficient information produced by Landsvirkjun.

As permitted in the legal EIA procedure, Landsvirkjun appealed against the decision of the Planning Agency to the Minister of Environment on 4th September 2001, along with 114 other appellants. The Complaint made by Landsvirkjun was substantial and the biggest of its kind whereas many parts of the appealed decision needed to be reviewed. Landsvirkjun demanded that the Minister of Environment would conduct a thorough review and based on that reverse the decision taken at lower administrative level in the matter.
The Minister of Environment decided at her own discretion to make all documents submitted by Landsvirkjun following the complaint available to the public and called for opinions, thus making the procedure even more open and transparent then legally required. On 20th December 2001 the Minister of Environment made a decision to reverse the decision of the Planning Agency but with 20 conditions, some which reduced the Project slightly and other were mitigation measures and enhancements measures were to be added.

INCA and three individuals filed a complaint against the Icelandic State (on behalf of the Minister of Environment) and Landsvirkjun in the District Court of Reykjavík to annul the decision taken by the Minister of Environment on 20th December 2001. As this was regarded a major case, three judges sat on the bench instead of one usually. Mr. Thordur Bogason, Attorney at Law, Attorneys at Hofdabakki, represented Landsvirkjun in the case. On 23rd May 2003 the Court acquitted the defendants of all claims made by the Plaintiffs.

The Court inter alia rejected the argument that the Minister for the Environment had been disqualified from issuing a decision concerning the environmental impact assessment of the Kárahnjúkar Power Plant. Furthermore it was not accepted that the Minister for the Environment should have referred the case back to the Planning Agency. The Minister was in fact authorized to accept the issue for material process and issue a decision in the case on the basis of the documents which accompanied the complaint submitted by Landsvirkjun, and which were later received from the developer, and on the basis of the expert data, comments and reports obtained by the Ministry of the Environment at the appeal stage, as in fact the nature of the project was not regarded as having changed from the original environmental impact statement prepared by Landsvirkjun. Furthermore, the arguments that changes to the project plans and mitigating measures were not adequately described and required an independent environmental impact assessment were rejected. The verdict of the District Court of Reykjavík touched upon many other issues and was well prepared and based on profound arguments.

The Plaintiffs appealed the verdict of the Reykjavík District Court to the Icelandic Supreme Court. Mr. Hreinn Loftsson, Attorney at Law, Attorneys at Hofdabakki, represented Landsvirkjun at this stage. In its verdict the Supreme Court concurred with the earlier verdict of the District Court of Reykjavík and acquitted the Icelandic State and Landsvirkjun of all claims of INCA and the three other plaintiffs.

With the judgment passed today by the Supreme Court of Iceland, all the major arguments of Landsvirkjun regarding the EIA procedure have been confirmed. It has also been confirmed for once and for all that the Environment Impact Assessment and Statement of the Kárahnjúkar Power Plant Project was conducted in a professional and lawful manner in every respect by Landsvirkjun.

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