Licenses and permits for industrial building in Finland

The timely availability of authority permits is a determining factor for a project’s schedule. Permits have to be applied for in the project owner’s name. But technical preparation of applications often falls to the general contractor - occasionally along with the risk of the permit’s timely issue.

Planning and communication

Every industrial project in Finland requires a number of permits for which different authorities are each responsible. The different procedures are independent of one another, with no centralised procedure in the sense of “one-stop shopping.”

Many procedures also entail public hearings and/or obtaining statements, which require budgeting for time. Therefore, it is important to plan out procedures from the beginning and dovetail them appropriately in order to adhere to the project schedule.

In addition to the processing time, it may be hard to predict whether authorities will be satisfied with the submitted documentation. However, this uncertainty can be mitigated to a considerable extent through proactive and close communication with the officials in charge. Finnish authorities are open to directly exchanging information, and clerks are usually responsive to informal phone calls or meetings.

Permits unrelated to the industry

At the beginning, there is municipal land-use planning, which in many cases has to be adapted for the planned project. This is a decision process at the level of local politics, but preparation is often done in cooperation with the project owner (and frequently at their own expense).

Likewise, the environmental impact assessment has to be done in an early stage if the size of the project makes this a requirement.

Actual licensing procedures include in particular:

The building permit (under building law) from the municipality is based on urban land-use planning.

An environmental permit, which is generally issued by regional environmental authorities, certifies the planned operations’ compatibility with environmental values and investigates disruptions for neighbours.

A separate water permit is required for any use of natural water bodies.

Other permits for traffic regulation, over- and underpasses on streets and rails, interference with air traffic due to high buildings, impact on nature reserves or similar may be required.

Tukes

The Finnish Safety and Chemicals Agency (Tukes) is the most important licensing authority for industrial plant construction. Their scope of responsibility includes supervising a multitude of industrial applications.

The Tukes work areas most relevant to plant construction cover all plants in the gas sector (particularly liquefied gases, natural gas, and LNG), containers for chemicals, pressure tanks, and electrical and measurement engineering.

Particularly plants in which chemicals are going to be processed, transported, or stored on a large scale, require a prior construction licence from Tukes. Natural gas also counts as one of the chemicals.

The licence must generally be present before construction starts. This is issued upstream through public hearing. If the project comes under the scope of the mandatory environmental impact assessment, this has to be present before applying. All of this must be taken into consideration during project scheduling.

If the project requires a construction licence, it generally also needs an operating licence which is issued after completion and a commissioning test.

Other licensing authorities specific to the industry

Not all projects fall under Tukes’ scope of responsibility. Depending on the object of the project, one or more other licensing authorities may be relevant. These include:

Finland’s Radiation and Nuclear Safety Authority (STUK) is the authority for monitoring and licensing nuclear plants, but also for industrial applications in which radiation is used or formed.

The Finnish Medicines Agency, Fimea, issues permits for manufacturing and selling pharmaceutical products.

Allocating permitting responsibilities in the delivery chain

A supplier who has accepted responsibility for licensing will have to compensate for the consequences of late delivery if the delay is due to licensing issues. For contractors, it is an important decision whether to apply for the necessary licenses themselves or to hand these responsibilities down to subcontractors. The apparently easiest solution is not always the best.

It is not always feasible to shift responsibility for licence procedures to sub-suppliers. After all, if any delays occur in the licensing process, this commonly leads to a standstill in the whole project. Even more fatal are the consequences if a necessary license is simply forgotten. A subcontractor will not be likely to be able to carry these consequences under its contractual liability.

The general contractor, as well as any contractor down the delivery chain should consider independently which licences will be needed, what is the quickest and most effective way to obtain them, and how much time should be allowed for the process. One should not make assumptions on these issues based on experiences in one’s home country.

Various issues have a bearing in this regard:

Often the party who has the best technical know-how will also be in a position to prepare application procedures effectively.

On the other hand, a local company acting as applicant might be the most effective door-opener.

The applicable public law may restrict the group of possible applicants.

Some licences can be applied for by way of a simplified procedure if the applicant already holds certain general licences. General operation licences often include licences for transport and storage of dangerous goods, whereas an applicant not holding an operation licence would have to run through the full procedure.

In order to protect business secrets, one will often have an interest in the centralised handling of applications.

These aspects may sometimes point in different directions. The most effective solution may demand a tailored division of responsibilities in which the internal responsibility is borne by one party, but the external representative function is fulfilled by the other.