In order to compensate for the potential burden related to business activities, businesses enter into agreements with representatives of local governments or local communities. For example, companies make one-off or recurring expenses in the form of cash payments or other benefits to the local government or community to offset the burdensome consequences and impacts of business development (such as fixed payments to install wind turbines). The purpose of implementing community benefit mechanisms is to redirect economic benefits associated with negative effects back to the region.

In Estonia, the most common situations in concluding agreements are the construction of a wind farm, the conversion of land or forest land into residential or commercial production land, the construction of a building with significant spatial impact (such as a larger plant). However, there is no overview in Estonia of local benefit agreements. The Estonian practice of concluding such agreements and their realisation is uneven. Entrepreneurs have highlighted uncertainties that hamper economic activity. However, many countries have long-standing experience in dealing with situations that we can learn from.

The purpose of the impact assessment is to analyse instruments of local authority’s and local community’s financial benefit (local benefit) in a company’s place of business, to analyse the impact of legalising of agreements on the attitudes of the parties and to find possible alternative legal solutions to the problem.