Legal Risks and Mitigation in Handling Soil under the By-Product Regime

Four Regimes for Managing Excavated Soil – Which One to Choose?

The first regime – exclusion from the Waste Act – means that the Waste Act does not apply to the soil at all. This occurs if the soil is uncontaminated, will be used in its natural state on the construction site where it was generated, and its use is certain. However, this exclusion is very strict and, in practice, is only applied in very specific situations – for example, when levelling uneven terrain on the same site immediately during construction.

The second regime – own use without a waste regime – allows an entity to use the soil it excavates at a different location without it being classified as waste. The condition is simple but decisive: the soil must be qualitatively suitable for its purpose, and its use must comply with the Building Act and other legal regulations. This is a situation where the soil leaves its place of origin but still remains outside the waste management framework.

The third regime – by-product – is the one this article focuses on. This is a regime where soil is generated during construction activities and has a specific further use secured outside its place of origin, provided it meets all four strict legal conditions. This regime is attractive to builders because it offers flexibility but requires precise legal arrangements.

The fourth regime – the waste regime – is the situation where the soil does not meet the conditions of the previous three regimes and is therefore truly waste. In such a case, all obligations under the Waste Act apply, including record-keeping, facility registration, and all associated regulations.

What is a Soil By-product? The Legal Definition and Its Practical Limits

The term "by-product" might suggest something leftover or unnecessary. However, in legal practice, this is not enough. The law refers to a very specific definition regulated by Section 8 of Act No. 541/2020 Coll., on Waste, in conjunction with European Directive 2008/98/EC.

A by-product is a movable item that was created during a production process (construction activity), the primary purpose of which is not the production or acquisition of this item, and which meets four cumulative conditions:

1. The item is generated as an integral part of the production process (construction)

2. Its further use is certain

3. It can be used further without any processing other than normal industrial practice

4. Its further use is lawful and will not lead to overall adverse environmental or human health impacts

In practice, the first condition means that the soil must be generated directly during construction as a residual material that the builder is disposing of, not as a primary product of the construction. This is generally clear, but problems arise in borderline cases—for example, when soil is stockpiled at an interim storage site "for later" even though a specific use has not yet been secured. It is in such situations that the Czech Environmental Inspectorate (ČIŽP) handles thousands of cases.

The second condition – ensuring further use – is the most critical. The ČIŽP insists that this certainty be documented by a written contract with a specific off-taker, specifying when, where, and how the material will be used. Without such a contract, the ČIŽP will assume the soil is not a by-product, but waste.

The third condition ensures that the soil does not require special treatment. It can be used "as is"—in its volume and form without further processing. However, this does not mean it can be deposited anywhere. Its use must be legal under the Building Act and other regulations.

The fourth condition, concerning compliance with special legal regulations, includes meeting quality limits for pollutant content. This is the area where legal obligations are most frequently violated. Decree No. 294/2005 Coll. sets precise limits for the content of pollutants in soil – for example, maximum permitted levels of heavy metals, organic substances, and other substances. If the soil exceeds these limits, it cannot be considered a by-product but must be classified as hazardous waste.

What You Risk Without Proper Legal Safeguards

Legal Tips for Securing By-product Status: Four Steps to Safety

If you decide to use the by-product regime, you should be aware of procedural details that are not obvious at first glance. The following four steps will help you minimise legal risks.

Step 1: The Contract with the Off-taker – A Non-negotiable Legal Document

This is the most important step. Without a written contract with an off-taker – a specific entity that will use the soil – there is no proof for the ČIŽP that further use is certain. The contract must include at least these elements:

• Precise identification of the soil (volume, place of origin, basic quality description)

• The specific location where the soil will be used (ideally with coordinates or the property's address)

• The specific purpose of use (landscaping, reclamation, etc.)

• The specific date when the soil will be taken over by the off-taker

• A declaration from the off-taker that they have the right to use the said property for the mentioned purpose (e.g., ownership, lease, etc.)

The most common mistake? Entities draft contracts that are too vague—"we will sort the soil" or "the soil will be used for landscaping on property X." This is not enough. The ČIŽP demands absolute specificity. The lawyers at ARROWS can help you negotiate and prepare a contract that will safely withstand an inspection. Need a contract prepared? Our lawyers are ready to help—write to us at consultation@arws.cz.

Step 2: Laboratory Analysis of the Soil – Proving Quality

This is where the process gets complicated. You must have a document (a certificate or analysis report) proving that the soil meets the quality limits of Decree No. 294/2005 Coll. Specifically, this means:

• Analysis of heavy metal content (cadmium, lead, chromium, copper, nickel, zinc, etc.)

• Analysis of the so-called leachate—that is, determining what substances could be released into the environment if the soil is placed on a property long-term

• Determination of the soil category by type (clay, sand, gravel-sand, etc.)

Laboratory analysis is not cheap—costs are in the range of tens of thousands of crowns. Many builders try to bypass this step, which is a mistake. During a ČIŽP inspection, the absence of an analysis immediately raises suspicion of a legal violation and the initiation of administrative proceedings.

Laboratory analyses must be conducted according to the ČSN EN 12457 standard or by a similar accredited laboratory. The ČIŽP will not accept analyses from dubious "testing" sites. Our Prague-based legal team will ensure that the analysis is carried out in compliance with all legal requirements and that the results are formally flawless. Need to arrange a soil analysis? Contact us at consultation@arws.cz.

Step 3: Verification of Building Permits at the Receiving Site

The law is very often violated here. The soil may be a quality by-product, but if you place it on a property that does not have a permit for landscaping, you will be in violation of the Building Act No. 183/2006 Coll.

The Building Act distinguishes landscaping based on its scope:

• Up to 300 m² or up to 1.5 m in fill height – usually does not require a decision from the building authority

• Over 300 m² or over 1.5 m in height – requires a decision on land use change or a zoning consent

The complexity lies in the fact that the building authority must first assess whether the landscaping "substantially changes the appearance of the environment or drainage conditions." This is not a mechanical matter – builders may think a "small adjustment" is not a problem, but building authorities also pay attention to whether the changes will, for example, alter the water absorption regime or flood risk burdens.

Without written confirmation from the building authority that the landscaping is permissible (or a document pending such confirmation), you cannot be sure that you are operating legally. The lawyers at ARROWS can help you understand which permits need to be secured. Looking for clarity on building permits? Write to us at consultation@arws.cz.

Step 4: Keeping Documentation and Records – A Practice the ČIŽP Inspects Daily

Looking at the basics, it might seem simple—just keeping track of what is deposited where. In practice, however, it is a complex agenda that the ČIŽP diligently inspects.

You must keep:

• Records of all soil deposits (site diaries, photographic documentation)

• Copies of contracts with off-takers

• Copies of laboratory analyses

• Transport documents (shipping lists)

• Photographic documentation of the sites where the soil is used

• Written confirmation from the off-taker that the soil has been received and used

Without these documents, the ČIŽP will assume you have been conducting illegal activities. Given that inspection proceedings can last for months, it is to your advantage to have all documentation prepared in advance.

The lawyers at ARROWS will help you set up internal processes so that your company is not caught by surprise during an inspection. Need to set up documentation processes? Our lawyers have many years of experience with this—contact us at consultation@arws.cz.

Complexity and Risks in Practice – Why It's Not All Simple

The matter seems simple: I excavate soil, I have a contract with an off-taker, I get an analysis done – and that's it. In the real world, however, we encounter dozens of complications that laypeople often don't see.

For example: A builder signed a contract with a developer who supposedly planned to build nearby. But the investor failed to secure funding, and the construction was postponed indefinitely. In the meantime, 5,000 tonnes of soil were deposited. The ČIŽP argues that this is not a by-product because its use is not "certain"—it is merely planned. The builder risks a fine of millions of crowns, even with a contract.

The problem is that lawyers must prove that the by-product *will* be used—and when construction is delayed, its "use is not certain" according to the legal interpretation. This is precisely why it is essential to have experts assist you with each step—experts who know the ČIŽP's practices, the case law background, and the procedural details that surprise even experienced site managers.

The ARROWS law firm has been serving waste management professionals and builders for decades. We handle these matters on a daily basis, which allows us to significantly reduce the time you would otherwise spend studying legal regulations and to minimise the risk of errors. ARROWS is insured for damages up to CZK 500 million, which gives you the security of knowing that our services are provided with the utmost care and responsibility.

Procedural Errors and Their Consequences

International Context and Regulation – What You Should Know About EU Legislation

The by-product regime is not a Czech invention. It originates from European Directive 2008/98/EC – the so-called Waste Framework Directive, which was adopted by the European Union in 2008. The goal was to create uniform regulation across the EU to promote a circular economy and minimise waste production.

Over the years, the directive has evolved—most recently in 2018 and with changes expected in 2025—to better reflect the principles of sustainable management. In any case, the basic principle remains the same: a by-product must meet four cumulative conditions to not be considered waste.

For international entities, this means that if they work with waste materials in the Czech Republic and later in other EU member states, they can be confident that the legal framework will be similar. The differences mainly concern the details of implementation.

ARROWS has practical experience with the regulation of by-products in an international context. Do you have a branch in Hungary, Austria, or other EU countries and are facing a similar issue? Our EU-based legal team is ready to help—thanks to the ARROWS International network built over ten years, we can also handle cases with an international element. Need legal assistance abroad? Write to us at consultation@arws.cz.

How to Avoid Problems – The Preventive Legal Step

The simplest and most cost-effective way to avoid legal risks is through preventive legal advice. Before you begin any handling of soil, you should have the following steps addressed:

1. Legal analysis of your situation – ARROWS will assess whether your activities truly correspond to the by-product regime

2. Preparation of documentation – contracts, analyses, and internal processes

3. Employee training – so they know what is permitted and what is not

4. Periodic audits – to ensure your activities remain in compliance with the law

The lawyers at ARROWS work with numerous construction companies, developers, and entities in the waste management sector and have extensive experience with these steps. The ARROWS portfolio includes more than 150 joint-stock companies, 250 limited liability companies (s.r.o.), and 50 municipalities and regions to whom we provide long-term legal services. We pride ourselves on being able to significantly save our clients' time and minimise their risks, allowing them to focus on their core business activities.

The fundamental belief at ARROWS is that quality legal work is not an expense, but an investment in the security and stability of your business. Contact us at consultation@arws.cz and get a tailor-made legal solution.

Conclusion: Why Not Contact ARROWS Right Now

Managing soil under the by-product regime is a legal matter full of procedural details that are not visible at first glance. The mistakes you overlook can cost you millions of crowns in fines, material removal, and legal proceedings. On the other hand, simple preventive measures and quality legal work can help you avoid these problems entirely.

The ARROWS law firm deals with these issues daily, has extensive experience with them, and knows all the hidden procedural details and interpretative nuances of the ČIŽP. The lawyers at ARROWS can help you with:

• Legal analysis of your specific case – so you know which obligations apply to you

• Preparation and review of contracts – that will safely withstand scrutiny from the ČIŽP

• Arranging for laboratory analyses – that meet all legal requirements

• Legal consultations – that protect you from fines and inspections

• Preparation of documentation – that proves you have acted legally

• Representation in litigation and penalty proceedings – if a conflict with the ČIŽP does arise

• Expert legal advice – tailored precisely to your situation

The cheapest insurance against legal risks is legal prevention. Contact ARROWS now – just send an email to consultation@arws.cz and get started safely.

ARROWS' liability insurance covers up to CZK 500 million. For you, this means entrusting your legal affairs to a firm that takes its responsibility seriously and works with the utmost care and professionalism. If you have a large amount of capital and want to minimise legal risks, collaborating with ARROWS is the right choice.