Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 162
162
5. REAL ESTATE
5.1 Rights over land to be secured
Under the Renewable Energy Sea Areas Use
Law, if the selected business operator has
its plan certified by METI under the FIT Act,
MLIT will grant occupancy rights for the designated Promotion Zone for up to 30 years.
For other rights over land (onshore, nearshore, offshore), this will vary depending on the
projects’ sites and areas. Please refer to our
response in section 2.2 above.
5.2 Cost and risk of legal challenges
Under the Renewable Energy Sea Areas Use
Law, if a Council (which includes fishery
organizations among its members) confirms that a project will create an obstacle to
fisheries, METI/MLIT will not designate that
area as a Promotion Zone. During Council meetings, the stakeholders (including
fisheries and the business operator) will be
granted opportunities to engage in discussions. What is unclear is the nature or level of
an obstacle tabled by fisheries that will be
determinative in METI/ MLIT’s not designating the area as a Promotion Zone. One mitigant to gain transparency into this process
is that METI/ MLIT will disclose the minutes
of Council meetings frequently and as soon
as practicable. This disclosure requirement
should assist participants in obtaining a better understanding of the Council members’
positions.
Even if METI/MLIT designates an area as
a Promotion Zone and grants occupancy
rights, METI/MLIT cannot guarantee that
fisheries will not litigate against the busi-
Japan
ness operator in the future. Ultimately, the
business operator will have to assume this
as a risk. Thus, before the auction process
commences, the business operators should
communicate with all stakeholders affected
by the project as much as possible. This
is critical, particularly since the Guidelines
prohibit business operators from communicating with stakeholders once the auction
process commences.
The auction will be initiated, and the
business operators will submit occupancy plans. Lastly, METI/MLIT will select the
most appropriate business operator and an
occupancy permit for up to 30 years will be
granted by MLIT.
Even after the occupancy permit is issued,
there are no assurances that fisheries will
not bring claims against the business operator, and there are no assurances of achieving
a guaranteed level of revenues (which depends on actual wind conditions). Therefore,
losses due to uncertain future events should
be borne by the Selected Business Operator.
After the selection process but before the
grant of the occupancy permit, the Selected
Business Operator should conduct a detailed investigation of the Promotion Zone
to minimize the loss from such uncertain
events.
