THE ITALIAN LEGAL MARKET FOR THE YEAR 2022
STATE OF PLAY AND STEPS AHEAD
1. Introduction
The current scenario is characterised by a profound rethinking of the role of law as a driver of change toward sustainable development goals and as a response to the challenges imposed by the increasingly complex geo-political environment and the climate crisis.
The recovery from the pandemic, the environmental emergency linked with the energy supply crisis, the modified players in the global arena, and the ever-more pressing progress towards a digital and ecological transition are changing how administrative discretion is exercised and represent crucial challenges in public law.
In this context, legal experts are called upon to counsel on more and more technical and value-driven issues, often in multi-jurisdictional ambits. It is therefore essential for public law professionals to be able to dialogue with consultants in other disciplines, to acknowledge the context of every single issue, and to provide solutions based on a strong knowledge of the legal framework.
Moreover, the National Plan for Recovery and Resilience (PNRR) represents the largest programme - at the European level - in response to the pandemic crisis. The Plan identifies six macro-areas of intervention, defined as “missions”, which include, among others, the “Green Revolution and Ecological Transition”, “Inclusion and Cohesion” and “Health”.
In November 2022, Italy obtained approval from the European Commission for the payment of the second instalment of 21 billion euros, after the achievement of all 45 planned targets, including ultra-wideband and 5G, research and innovation, tourism and culture, urban regeneration, and digitisation of schools. As of summer 2021, Italy has already received 66.9 billion euros between the first and second instalments and pre-financing. The funds obtained so far certify Italy's commitment to achieving the objectives set by the PNRR.
The PNRR and its related governmental programs impose to manage strategic projects of transition in infrastructure realisation, clean energy, digitalisation, and urban renovation, which will provide the bedrock for future Italian expansion.
Under this light, a high-level overview of the Italian public law market is proposed below, based on the experience gathered in the areas to which we devote our daily activity. Specific reference is made to the topics that we consider of major interest and with significant development opportunities.
2. The legal market overview
2.1. The real estate sector
After the COVID-19 crisis, the real estate sector registered a marked overall recovery, with volumes invested significantly higher than the pre-pandemic level. This result is attributable to the significant contribution of the fiscal reform introducing the so-called “Super bonus” and “Eco bonus” which incentivise energy efficiency.
The European Union has adopted policies to promote the energy performance of buildings through Directive 2010/31/EU, which focuses on the energy performance of buildings, and Directive 2012/27/EU on energy efficiency. In December 2021, the European Commission proposed a revision of the Energy Performance of Buildings Directive, which is currently under consideration by the Council and the European Parliament. It provides a framework to reduce emissions by 60% by 2030 compared to 2015 and achieve a zero-emission and fully decarbonised building stock by 2050 through i) the modernisation of buildings, ii) the improvement of air quality, iii) the digitisation of energy services, and iv) the development of sustainable mobility infrastructure.
Legal service in this field is essential in assessing the urban-law feasibility of the operations, providing counselling in the relationships with the Revenue Agency, and assisting through the authorising administrative procedures.
2.2. The public procurement sector
The public procurement sector, as well as other areas, is undergoing a substantial revision process to adapt the Italian legislation on public contracts to European standards and market demands. The legislative reform aims to simplify and digitise administrative procedures and ensure their transparency. The objectives to be achieved are several and include greater labour protection, i.e. a full guarantee of safety at work, combating irregular work and the obligation for awarding administrations to include specific social clauses; strengthening of the competences of the National Anticorruption Agency (ANAC); further application of the principle of favor partecipationis to promote the participation of micro and small enterprises; the reduction of time for tender procedures and the progressively reduce restrictions on subcontracting.
An initial draft of the new Code drafted by the Administrative Supreme Court was published in mid-December and subsequently sent to ANAC for evaluation. It was then accepted by the VIII Commission of the Parliament’s Chambers of Deputies with numerous suggestions (mostly accepting ANAC's reviews). At this stage, it is unclear whether the date for the publication of the new code, initially set for March 2023, will be respected. For a deeper analysis of the main lines of reform, see VILDE’s contribution to the 2023 Chambers Public Procurement and Governments Contracts Guide for Italy.
In anticipation of the new legislation, the sector is already experiencing a strong process of digitisation. In fact, as of 9 November 2022, the first version of the Economic Operator's Virtual Dossier (“Fascicolo Virtuale dell’Operatore Economico”) was introduced to expedite the administrative controls on the existence upon the operators intending to participate in a tender procedure of the general, technical-organisational and economic-financial requirements, during both the selection and execution phases. A recent communication of ANAC’s President dated 16 November 2022 lays down interim exemptions for the contracting authorities and certifying companies (so-called “SOA”) already working with virtual lists of operators up until the entry in force of such Virtual Dossier.
Further significant reforms regarded measures on price containment due to inflation, both for ongoing and future contracts, and a strengthening of the norms to obstacle tax irregularities.
2.3. The energy sector
The energy crisis due to the conflict in Ukraine has induced the Legislator to approve even more acts aimed both i)to achieve the European goals of decarbonisation and increased energy production from renewable sources set out in the 2030 Integrated Energy and Climate Plan (“Piano Nazionale Integrato per l’Energia e il Clima 2030”- PNIEC) and ii) to reduce the cost of energy thanks to the renewable sources.
As a result of the evolution of the Italian regulatory framework on the construction and operation of solar power plants, which was significantly modified during 2020, 2021, and 2022 by numerous interventions[1], in just one year 1.6 GW of new solar capacity has been installed in Italy, for a total of over 12 thousand medium and large power plants. On balance, this represents a growth of 7.1% for the whole of 2021 (+12% compared to the number of annual installations). The expansion of the 2022 PV park, together with good irradiation conditions, led to a production of just under 24 TWh, or +12%, compared to the first months of 2021.
Following the path already started to simplify the procedures for the construction of new renewable energy plants, the “Energy Decree” (Decree-Law No. 17/2022) made several adjustments to the procedures for the construction of new power plants, such as raising the minimum power capacity parameters for the environmental impact assessment (“EIA”) and EIA screening for certain types of power plants and extending the applicability of simplified procedures to diversified types of power plants, such as those connected to the high-voltage grid; ii) agri-photovoltaic plants; iii) floating solar plants.
Furthermore, for the period between 1 February 2022 and 30 June 2023, Article 15 bis of Decree-Law No. 4/2022 (the so-called "Regulation on Extra Profits") introduced a two-way compensation mechanism on the price of energy fed into the grid through PPA contracts.
In this ambit, the Law Firm assists Italian and foreign companies in the context of M&A transactions regarding the acquisition of renewable energy plants (e.g., solar, wind, and hydro plants), either under development or already operational. More specifically, the Firm conducts legal due diligence activities aimed at verifying, inter alia, the necessary authorisations for the construction and operation of renewable energy plants, incentives provided or to be provided by the GSE, real estate matters, EPC, O&M and PPA agreements.
2.4. Telecommunications
Italy is preparing to be entirely covered by superfast digital connections, which would bridge the digital divide that still penalises the Italian territory, especially the most inland and peripheral areas. The funds allocated by the PNRR for the sector amount to 6.71 billion euros and will finance five macro-interventions that will enable widespread, high-capacity internet connections.
The first intervention, also called “Italy 1 Giga”, aims to increase transmission capacity in download to 1 Gigabit per second and at least 200 Megabit in upload. The second one concerns the smaller islands; in particular, it aims to reach the island areas through the design, supply, and laying of the submarine cables needed to carry optical fiber. The third and fourth measures relate to the connectivity of schools and public hospitals. More than 10,000 school buildings and about 12,300 public health facilities have been identified and divided into eight geographical areas.
Finally, on 21 March 2022, the last tender notice was published about the fifth of the planned interventions: “Italia 5G”, the programme that intends to promote the dissemination of 5G connections starting from extra-urban roads, European mobility corridors (TEN-T) and market failure areas. For the latter, the interventions concern areas where no mobile networks have been built, or where only 3G networks are available and no 4G and/or 5G mobile networks are planned shortly.
The impulse offered by the PNRR thus accelerates investment in infrastructure and digital skills, driving demand for ultra-wideband connectivity services and stimulating households' spending power.
2.5. Health law
The critical issues highlighted by the COVID - 19 pandemic have underlined the limitations of the healthcare system in many European Countries, including Italy, and led to the need to promote reforms aimed at implementing an efficient system and favouring digitisation processes.
To meet these urgent and imperative challenges, the National Recovery and Resilience Plan (PNRR) has devoted its sixth mission to health[2], for which investments of 15.6 billion euros have been allocated from the European fund for recovery (Next Generation EU).
The main health law-related measures adopted are as follows:
• the Ministry of Health Decree No. 77/2022, which provides for the remodelling of the services offered, in a way that they are as close as possible to the citizens, even reaching them at home, and declines the services in territorial structures such as community homes, community hospitals, thus intending to set up a care network accessible for everyone and alternative to the hospital.
• The Ministerial Decree of 21 September 2022, by which the Ministry of Health approved the Technical Guidelines to identify the essential requirements and guarantee uniformity across the Country for all telemedicine solutions whose adoption is financed with the resources of mission no. 6 of the PNRR.
As described, following the targets set by the PNRR, Italy has thus implemented a path of reforms aimed at achieving an efficient and uniform health system, favouring the digitisation and transparency of administrative action as well.
2.6. Environmental law
Never before has the environment played such a key role in development. The levels of protection achieved in the last decade, even if insufficient, are the most considerable of all time. The recent amendment of Articles 9 and 41 of the Italian Constitution emphasises the growing importance of this matter, also in respect to the integration of sustainable development within administrative actions and policies.
With regard to the environmental sector, Italy boasts extremely advanced policies compared to other European countries. For example, one of the most remarkable interventions on the topic concerns the introduction of Ministerial Decree No. 259/2022, which approved the National Strategy for the Circular Economy, in implementation of Reform 1.1, of Mission 2, Component 1 of the PNRR. This Strategy aims to define new administrative and fiscal tools to strengthen the market for secondary raw materials, so that they are competitive in terms of availability, performance and cost compared to virgin raw materials. To this end, the Strategy acts on the material purchasing chain (“Minimum Environmental Criteria for Green Procurement in Public Administration”), on the criteria for the end of waste status (“End of Waste”), on extended producer responsibility and on the role of the consumer.
In addition, it constitutes a fundamental tool for achieving climate neutrality goals and defines a roadmap of actions and targets up to 2035.
Moreover, proof of Italy's growing commitment in the sector is the adoption of the Minimum Environmental Criteria (“CAM”) Decree by the Ministry of the Environment and Energy Security, whereby the Reform for the adoption of CAMs for cultural events is implemented, achieving another Milestone of the PNRR in advance. From now on, the public administration must introduce CAMs, i.e. sustainability requirements, in tender procedures for the awarding of services in the field of cultural initiatives.
It also should be noted that for the first time the European Union will adopt an environmental duty on imports, i.e. a tax on industrial goods imported into its territory that produce significant volumes of harmful emissions.
Lastly, to ensure a homogeneous application of environmental regulations, the so-called “environmental request of clarification” (“interpello ambientale”) was introduced in 2021. Regions, Provinces, Metropolitan Cities, Municipalities, trade associations, and environmental protection associations with national coverage may submit general requests to the Ministry of the Environment and Energy Security on the application of governmental regulations. For its topicality, a special mention deserves the clarifications proposed by the Ministry upon request of the Lombardy Region on 25 November 2022 on the modalities to manage the request to use alternative fuels to natural gas in combustion plants operated at industrial or commercial sites.
2.7. Waste management and mining law
The waste management sector is undergoing a deep restructuring, also in light of the implementation of the European Directive 2018/851/UE through Legislative Decree No. 116/2020. The normative framework contained in the Italian Environmental Code (Legislative Decree No. 152/2006) was modified to i) promote the installation of an autonomous infrastructural system for waste treatment, according to the hierarchy laid down in article 4, par. 1 of the Directive 2008/98/CE; ii) implement the polluter-pays principle, iii) facilitate the progress towards a circular economy, and iv) expand the application of mechanisms of extended producer’s responsibility.
Fundamental is, in this sector, the provision of 2.1 billion euros of investment within the PNRR for the amelioration of the infrastructural capacity in waste management and the provision of Governmental bodies assisting local autonomies in the authorizing and tender procedures.
One of the main targets of the described investment plan is the promotion of circular economy. The ambit has seen a significant normative intervention, also regarding the adoption of governmental governments regarding the “end of waste” for certain types of materials. The most recent one is Ministerial Decree No. 152/2022 on construction and demolition waste. In this regard, it is also worth mentioning that upon a request for clarification filed by the Metropolitan City of Milan on 25 November 2022, the Ministry clarified that the mentioned decree does not apply to wastes consisting of excavated soil and rocks where derived from reclaimed sites.
More generally, it is also worth noting the regulatory activity carried out by the Agency for the Environmental, Network, and Energy Regulation (“ARERA”) in the sector, which is guiding the market towards higher quality levels and a more consistent tariff framework.
Shortly, there will be no shortage of interventions in the quarries and mining sector either, as the Superior Institute for Environmental Research and Protection (“ISPRA”) recently announced its intention to adjust the legislation, framing the activity in a perspective of sustainability and preservation of the landscape, in line with EU guidelines. According to ISPRA, therefore, in addition to managing an adequate level of production - given the importance of the sector in the Italian economy - it is also necessary to incentivise the recovery of areas that used to host mining sites.
2.8. Sports law
The Italian sports sector is going through a flourishing period, given normative reforms and investments planned in the sector, both within the PNRR and the funds allocated for the Winter Olympics to be held between Milan and Cortina in 2026.
A reform in sports law was recently introduced with the publication of Legislative Decree No. 163/2022 in the Official Journal of 2 November 2022. The reform is complex and consists of five executive decrees, two of which have already entered into force (Legislative Decrees Nos. 40 - 39/2021), while Legislative Decrees Nos. 36, 37, and 38 will have to wait until 1 January 2023 to become fully effective.
In particular, with Legislative Decree No. 38 of 2021, Italy aims to speed up and simplify administrative procedures for public-private partnership operations for the modernisation and construction of sports installations.
As for the programmed investments, the “Sport and Social Inclusion” programme provided for in the PNRR's fifth mission, for which 700 million euros have been allocated, is based on three clusters of intervention. The first and most important includes the construction of new sports facilities, to which at least 50% of the total allocated resources are dedicated. While the second cluster includes the regeneration of existing facilities and finally, the third concerns the creation or regeneration of existing facilities of sports federations.
This is an important opportunity, especially for the South of the country, since the Department of Sport has specified that at least 40% of the resources are earmarked for requests from local authorities belonging to southern regions.
VILDE has decades of experience in offering legal assistance, both in and out of court, to athletes (e.g., the judicial defence of a world and Olympic champion swimmer in a dispute before the Italian Administrative Court) and to companies operating in the sports sector (e.g., advising a football team in one of Italy's top leagues and a company active in the supply of anti-doping material).
About the Winter Olympics, the Law Firm is providing legal assistance in a dispute concerning the annulment of the results of the Italian Winter Sports Federation elections. The person elected will play the role of president of the Italian Winter Sports Federation and will be the one who will lead that Federation toward the Milan-Cortina 2026 Winter Olympics.
3. Conclusion
In recent years, most professions have seen their roles change due to technological developments, with all the benefits and risks that come with them. In the legal industry, too, there is a growing need to expand knowledge and reshape traditional functions.
The opportunities and market possibilities for the legal sector, particularly for the administrative field, are striking. European funds provided by the PNRR and allocated to different areas require increasing knowledge of today's issues, given the high breadth and complexity of the reforms to be implemented.
There is a growing need to equip the legal industry with the ability to intercept contemporary trends to optimize its value through new services, improve more traditional ones, and innovate the way professionals relate to clients. All challenges that VILDE is ready to take on.
[1] The most recent of which is Legislative Decree No. 176/2022 (“Decreto Aiuti Quarter”).
[2] The PNRR's “Health” mission is thus divided into two parts: proximity networks, intermediate structures, and telemedicine for territorial health care (7 billion euros); innovation, research and digitisation of the National Health Service (8.63 billion euros).