The polluter-pays principle and environmental liability

KEY POINTS

The directive defines environmental damage as:

• damage that significantly affects the environmental (ecological, chemical or quantitative) status of water resources, as defined in Directive 2000/60/EC, the EU Water Framework Directive, and Directive 2008/56/EC, the Marine Environment Strategy Directive;
• damage to land creating a significant risk to human health;
• damage to protected species and natural habitats that adversely affects conservation as defined in the Directive 2009/147/EC, on the conservation of wild birds, and Directive 92/43/EEC, the Natural Habitats Directive.

The definition includes the discharge of pollutants into the air (as this affects ground or water conditions), inland surface water and groundwater, and any deliberate release into the environment of genetically modified organisms, as defined by Directive 2001/18/EC.

Scope

There are 2 scenarios where liability occurs:

1. Environmental damage caused by any of the activities listed in Annex III of the directive, such as:
   • energy industries
   • production and processing of metals
   • mineral industries
   • chemical industries
   • waste management
   • large-scale pulp, paper and board production, textile dyeing and tanneries
   • large-scale meat, dairy and food production.
2. Environmental damage to protected species and natural habitats (or its imminent threat) caused by occupational activities other than those listed in Annex III, and if the company is at fault or negligent.

Exceptions

Exceptions include armed conflict, natural disaster, liability for types of environmental damage covered by certain international conventions (e.g. maritime pollution), and nuclear risks, which are covered by the Euratom Treaty.

Preventive and remedial actions

• If there is an imminent threat of damage occurring, the company must, without delay, take the necessary preventive measures.
• If damage has already occurred the company must immediately inform the authorities and take steps to manage the situation to prevent further environmental damage and threats to human health, and take appropriate remedial action.

The company must pay for preventive actions and remedial actions, except in certain situations, e.g. if the damage was caused by a third party despite the appropriate safety measures, or resulted from compliance with an official instruction.

Implementation

• A 2016 implementation report looked at the experience of implementing the directive between 2007 and 2013, including an evaluation carried out under REFIT, the European Commission Regulatory Fitness and Performance programme.
• The report confirms that while the directive has not yet achieved its full potential, it has been effective in remedying environmental damage and incentivising prevention.

Amending Regulation (EU) 2019/1010

The directive was amended in 2019 by Regulation (EU) 2019/1010 which aligns and streamlines reporting obligations in the field of environmental legislation. The new rules introduced, which have applied since 26 June 2019, are as follows.

• EU countries report to the Commission on the experience gained in implementing this directive. The information that they need to supply is in Annex VI to the directive and must be collected by 30 April 2022 and every 5 years thereafter.
• By 30 April 2023, and every 5 years thereafter, the Commission will publish an evaluation it has carried out of this directive based on the information supplied by the EU countries.
• By 31 December 2020, the Commission must develop guidelines providing a common understanding of the term ‘environmental damage’ as defined in this directive.