Making the polluter pay: Commission adopts liability scheme to prevent and repair environmental damage

Brussels, 23 January 2002

The European Commission today adopted a proposal for a Directive on environmental liability which aims both to prevent and restore environmental damage. The pollution of water, damage to biodiversity and land contamination which causes serious harm to human health would all be covered by this Directive. Operators of certain risky or potentially risky activities who cause environmental damage would be held responsible for restoring the damage caused, or made to pay for the restoration. All operators causing damage to biodiversity, by fault or negligence, would equally have an obligation to restore the damage. Environment Commissioner Margot Wallström said: "The idea that the polluter must pay is a cornerstone of EU policy. With today's proposal, the Commission is sending a clear message: the time has come for the EU to put the polluter pays principle into practice. "Member States need to be able to tackle environmental damage and play by common rules on who is responsible, which damage is covered, and who should bear the cost. The rules proposed by the Commission today will be a strong incentive to prevent such damage from happening at all. " She added: "We are all stakeholders when it comes to protecting the environment and preventing damage. Citizens, industry and NGOs have therefore been waiting for this important proposal for a long time, with a lot of - different - expectations. Today, the Commission has taken the first concrete step towards establishing a comprehensive European environmental liability regime."

Background

The Commission's decision to adopt this proposal reflects its commitment to fight current unsustainable trends: ongoing loss of biodiversity throughout Europe and continuing pollution of water and soil.

The proposal establishes a framework based on environmental liability to ensure that future environmental damage is restored or prevented. The proposal has no retrospective effect. Environmental damage includes damage to the biodiversity protected at EU and national levels, to the waters regulated by the Water Framework Directive (2000/60/EC⁽¹⁾), as well as land contamination which causes serious harm to human health.

Public authorities will play an important role in the proposed liability scheme. It will be their role to ensure that responsible operators undertake themselves or finance the necessary restorative measures in case of environmental damage.

Public interest groups, such as non-governmental organizations, will be allowed, under the system, to require public authorities to act, when need be, and challenge their decisions before the courts, when those decisions are illegal.

Prevention

On the side of prevention, the proposal foresees that, when operators have caused a situation that could lead to environmental damage, preventive measures should be taken to avoid that this situation results in damage. For example, if there is a disruption in the industrial process that could lead to an explosion because of too high pressure in some pipes, measures should be taken to control the pressure and avoid a possible explosion.

Remedy

When environmental damage nevertheless occurs, Member States are required by the proposal to ensure that environmental damage is restored. This involves assessing the gravity and extent of the damage and determining the most appropriate restorative measures to be taken, in co-operation, as far as possible, with the operator liable for the damage under the proposal the operator of the activity having caused the damage.

The competent authority may require the operator to take the necessary preventive or restoration measures, in which case these will be financed directly by the operator. Alternatively the competent authority may implement those measures itself or have them implemented by a third party. A combination of the two approaches is also possible.

When the restoration has been implemented by the competent authority or by a third party on its behalf, and one or several operators are liable for the damage under the proposal, the competent authority must, in conformity with the polluter pays principle, recover the restoration costs from the liable operators. The same rule applies in relation to preventive measures.

Scope of the directive

The operators potentially liable under the directive for the costs of preventing or restoring the environmental damage are the operators of the risky or potentially risky activities listed in Annex I. These include activities releasing heavy metals into water or into the air, installations producing dangerous chemicals, landfill sites and incineration plants. Operators of activities outside Annex I may also be liable, under the directive, for the costs of preventing or restoring bio-diversity damage, but only in case they are found to be negligent. This extended protection is due to the fact that bio-diversity damage as such is hardly covered by national laws, or when it is covered, there is no guarantee that the damaged bio-diversity will actually be restored.

Finally, the proposal includes provisions concerning transboundary damage, financial security, its relationship with national laws, and a provision for reviewing the regime.

Request for action

Qualified entities (public interest groups, including NGOs), alongside persons who have a sufficient interest, i.e. who have suffered a damage, can request the competent authority to take appropriate action, and challenge the competent authorities' action or inaction. This allows the public to oversee and influence the role played by competent authorities as trustees of environmental assets.

Exemptions

The proposal foresees some exemptions and defences, which are justified by the need to ensure legal certainty and safeguarding innovation. For instance, emissions that have been authorised will not give rise to liability. Activities and emissions which are believed to be safe for the environment according to the state of scientific and technical knowledge when they occur are also not covered by the proposal. In certain cases, however, negligent operators will not be able to rely on the exemptions.

The insolvency of operators is one factor that may hinder cost recovery in line with the polluter pays principle by competent authorities, but the impact of this may be limited by adequate financial insurance of potential damage. Under the proposal, Member States will be free to implement adequate financial security arrangements.

Next steps

This proposal will be presented to the Environment Council at its meeting on 4th March 2002. This will start the legislative procedure at the end of which the European Parliament and the Council of Ministers will jointly adopt the new Directive. This so-called co-decision procedure usually takes two to three years. Once the Directive is finally adopted, Member States will have two years to implement it in national law.

^{(1) Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (OJl L 327, 22/12/2000 p. 1).}