Montenegro has adopted amendments to its environmental liability legislation that strengthen the responsibilities of companies for preventing and remedying environmental damage while granting regulators wider enforcement powers. The revised framework aligns national legislation more closely with the European Union Environmental Liability Directive and forms part of the country’s efforts to meet the closing benchmarks under EU negotiating Chapter 27, covering environment and climate change.
The legislation, approved by the Parliament of Montenegro, reinforces the polluter-pays principle, requiring operators to act both after environmental damage occurs and whenever there is an imminent threat of damage. The amendments expand the authority of the Environmental Protection Agency and environmental inspectors, establish clearer remediation procedures and strengthen the state’s ability to recover public expenditure when authorities intervene instead of operators.
Minister of Ecology, Sustainable Development and Northern Development Damjan Ćulafić described the legislation as an important step toward a more effective environmental responsibility system. The European Commission issued a positive opinion on the draft law on May 11, 2026, confirming its alignment with relevant EU environmental liability rules. The legislation will enter into force on the eighth day following its publication in Montenegro’s Official Gazette.
Broader Scope for Industrial and Infrastructure Operators
The revised framework extends beyond conventional pollution control and applies to a wide range of sectors, including industrial facilities, energy producers, mining and quarrying companies, waste-management operators, water utilities, infrastructure contractors, chemical businesses, transport companies, and operators of dams, reservoirs and other water-control structures. Activities involving the abstraction and impoundment of water through dams, barriers and reservoirs requiring water permits are now explicitly covered.
The changes have direct relevance for operators associated with EPCG’s Pljevlja thermal power plant, hydropower reservoirs, mining operations, the Port of Bar, municipal landfills, wastewater treatment facilities, large tourism developments and the continuing Bar–Boljare motorway programme. Companies operating such assets will need to assess whether their environmental monitoring systems, emergency-response procedures, financial guarantees and insurance arrangements comply with the strengthened legal framework.
Definition of Operator Expanded
One of the most significant amendments broadens the legal definition of an operator. Environmental liability may now apply not only to the legal or natural person directly conducting an activity but also to entities exercising operational control or making economic decisions regarding technical operations. Permit holders and entities subject to registration or notification requirements are expressly included.
The broader definition is particularly relevant for projects involving concessionaires, special-purpose vehicles, EPC contractors, operation and maintenance providers, and controlling shareholders, requiring environmental responsibilities to be allocated more clearly through concession agreements, EPC contracts, operating agreements, shareholder arrangements and insurance policies.
Environmental Damage Definitions Clarified
The legislation defines environmental damage as any measurable adverse change to natural resources or measurable impairment of ecosystem services, whether occurring directly or indirectly. Protected resources include protected species, natural habitats, water and land. The definition of water has been expanded to include surface water, groundwater, inland waters, marine and coastal waters, estuaries, mineral and thermal waters, artificial water bodies, and water used for drinking, bathing and other human purposes.
Marine waters are also more precisely defined, covering Montenegro’s internal waters, territorial sea, seabed and subsoil within areas where the country exercises sovereign rights or jurisdiction. The clarification is particularly relevant for ports, coastal construction, maritime transport, fuel handling, subsea infrastructure and potential future offshore energy developments. Where environmental damage affects human health, the legislation automatically classifies the impact as significant.
For protected species and habitats, regulators will assess significance based on the condition of affected resources before the incident, their ecological functions, natural recovery potential, population size, habitat area, rarity, reproductive capacity and contribution to conservation objectives.
Greater Importance of Environmental Baseline Studies
The amendments place increased emphasis on baseline environmental information. Conditions existing before an incident may be established using national monitoring data, information from comparable unaffected locations, scientific literature, and data relating to Natura 2000 species, habitats and conservation measures.
The revised framework makes comprehensive baseline surveys increasingly important for projects involving mining, energy, waste management and transport infrastructure, particularly regarding groundwater, surface water, soil quality, biodiversity, air quality, dust, noise and ecosystem functions. Environmental due diligence will also become more significant in acquisitions involving industrial facilities, brownfield sites, mines, waste facilities and unfinished infrastructure, requiring buyers to assess historical contamination, operational control, permit history, monitoring records, insurance coverage and potential remediation liabilities.
Immediate Preventive Obligations
Operators identifying an imminent threat of environmental damage must take preventive action without delay to eliminate or minimise the risk. They are also required to notify the Environmental Protection Agency and the competent inspectorate of the threat, the measures implemented and the results achieved, particularly where risks remain.
The Agency may require additional preventive measures, establish implementation deadlines, request technical information or undertake preventive actions directly. Authorities may also require operators to finance all measurements, testing and technical analyses necessary to determine whether an imminent threat or environmental damage exists. Where operators fail to act, disregard official instructions or cannot be identified, the state may appoint authorised specialists to carry out preventive measures. Authorities retain the right to recover associated costs from responsible operators within five years after implementation of the measures or from the date on which the responsible operator is identified.
Comprehensive Remediation Requirements
Following environmental damage, operators must immediately notify the authorities, contain or remove pollutants, prevent further spread, reduce risks to human health and minimise additional loss of environmental functions. Operators must also prepare a remediation proposal accompanied by a post-remediation environmental monitoring programme. The legislation distinguishes between primary, complementary and compensatory remediation.
Primary remediation seeks to restore damaged resources to their original condition. Where complete restoration is not technically possible, complementary remediation may establish equivalent ecological resources or functions at the original or an alternative location.
Compensatory remediation addresses temporary losses of environmental services during the period before primary remediation becomes fully effective through additional protection or enhancement of habitats, protected species or water resources. The framework enables authorities to prioritise remediation measures where simultaneous implementation is not feasible, considering the scale and significance of environmental damage, natural recovery prospects and risks to human health.
Public Participation and Regulatory Procedures
Individuals affected, or likely to be affected, by environmental damage, together with environmental organisations, may request regulatory action and challenge official decisions. The Environmental Protection Agency must notify applicants, operators, municipalities, the responsible ministry and inspectorates within five days after initiating proceedings or rejecting requests.
After receiving a remediation programme, the Agency must notify affected property owners and interested members of the public within three days, allowing comments and objections before a specialist commission evaluates the proposal with the operator. The Agency is required to issue a decision within five days of receiving the commission’s opinion.
Expanded Enforcement Powers
Environmental inspectors receive broader powers to order immediate preventive measures, require incident notifications, approve and supervise remediation programmes and oversee post-remediation monitoring. Inspectors may also suspend activities where environmental damage has occurred or where an imminent threat exists if necessary to protect human health or the environment.
The legislation introduces fines ranging from €4,000 to €80,000 for legal entities failing to implement preventive measures, report incidents, control pollution, carry out remediation or maintain required environmental insurance or financial security. Responsible individuals within companies may face penalties between €2,000 and €8,000, entrepreneurs between €4,000 and €24,000, and individuals between €1,000 and €6,000. For certain violations, authorities may also impose temporary bans on carrying out specific professional activities or duties for periods ranging from 30 days to six months. These sanctions apply in addition to the obligation to finance preventive and remediation measures.
Insurance and Financial Security Requirements
The amended legislation reinforces the obligation for covered operators to maintain environmental liability insurance or other forms of financial security. Environmental inspectors are authorised to verify compliance and require operators to obtain appropriate financial coverage. The changes are expected to affect Montenegro’s insurance and banking sectors, as operators review insurance limits, exclusions, deductibles, notification requirements and coverage for environmental incidents, while lenders financing higher-risk projects may seek evidence that insurance reflects actual environmental risks.
Insurers may also require evidence of containment systems, hazardous-material inventories, water monitoring programmes, emergency-response plans, contractor competence and previous contamination assessments before providing coverage.
Environmental Damage Register Introduced
The Environmental Protection Agency will establish an electronic register recording all environmental damage cases, including the type of damage, the date of occurrence and the activity responsible. Following Montenegro’s accession to the European Union, the register will be submitted to the European Commission every five years. The amended legislation provides regulators with expanded authority to identify environmental damage, require operator-funded investigations, intervene before environmental incidents escalate and recover the full costs of restoring natural resources from responsible operators.
