By implementing the “polluter pays principle” it is expected that the directive will result in a higher degree of environmental protection throughout
Europe .
In addition, the Directive also places a responsibility on operators whose activities have caused an imminent threat of environmental damage liable to taking preventive actions.
Member States were required to transpose the directive into their national law by 30 April, but only Italy , Latvia and Lithuania were able to do so.
Overview
The Environmental Liability Directive (ELD) was adopted by the European Council and European Parliament in April 2004 following over two years of negotiations on a proposal by the European Commission issued in early 2002.
The reason for developing ELD was the result of large scale incidents of environmental damage in Europe during the 1980s and 1990s. The Commission also wished to address the loss of biodiversity as a result of environmental degradation. ELD is considered one of the
The ELD is intended to give effect to the “polluter pays” principle by imposing liability for the prevention and remediation of environmental damage. This is damage which has a significant adverse effect on the conservation status of EU-protected biodiversity, and on waters subject to EU legislation. It also covers land contamination which poses a significant risk of adverse effect on human health. The Directive’s preamble explains its fundamental objective:
“The prevention and remedying of environmental damage should be implemented through the furtherance of the “polluter pays” principle, as indicated in the Treaty and in line with the principle of sustainable development.
The fundamental principle of this Directive should therefore be that an operator whose activity has caused environmental damage or the imminent threat of such damage is to be held financially liable, in order to induce operators to adopt measures and to develop practices to minimise the risks of environmental damage so that their exposure to financial liabilities is reduced.”
Key Features of ELD
Environmental damage
The ELD is not triggered by any environmental damage; tests for relevant environmental damage are defined as damage to:
I. Damage to protected species and natural habitats listed in the Birds and Habitats Directives where this has significant adverse effects on reaching or maintaining favourable conservation status. The inclusion of nationally designated species and habitats is at the discretion of Member States.
II. Water damage, which is any damage which significantly adversely affects the status or ecological potential of a water body as defined under the Water Framework Directive.
III. Land damage is land contamination that creates a significant risk of human health being adversely affected as a result of introduction in, on or under land of substances preparations organisms or micro-organisms.
Framework of liability
The ELD introduces two types of liability: strict and fault-based:
Strict liability - applies to environmental damage caused by the occupational activities listed in Annex III of the ELD. These occupational activities are activities regulated by community legislation (e.g. IPPC). “Strict liability” means that it is sufficient that there is a casual link between the occupational activity and the environmental damage. It is not necessary for there to have been fault or negligence on behalf of the operator of the occupational activity.
Fault-based liability- applies to damage to protected species and habitats from all other occupational activities. “Fault-based liability” means that the operator of the occupational activity, through a deliberate action or omission, or negligence, has caused the environmental damage.
Remediation standards
Remediation must be carried out in accordance with Annex II and the operator must propose remediation options. The competent authority decides which remedial option the operator is to act upon. Annex II includes some new concepts. For damage to water or to protected species and natural habitats this requires:
- primary remediation (to return the site to baseline condition);
- complementary remediation (equivalent off-site measures where primary remediation does not return the site to baseline condition); and
- compensatory remediation (to compensate for the 'interim loss' of natural resources and services pending recovery).
Exceptions and defences
There are a number of exceptions from the scope of the Directive. These include activities covered by other liability agreements (such as for marine oil or radioactive substances); armed conflict or activities which serve national defence; and exceptional natural phenomenon. Diffuse pollution is generally excluded because of the difficulties in proving an individual’s responsibility for damage. The Directive is not retrospective and so does not apply to damage caused prior to April 2007. Where more than 30 years have passed since the emission or event finished the ELD removes liability.
Operators have a defence to liability where the environmental damage or imminent threat:
- was caused by a third party and occurred despite the fact that appropriate safety measures were in place; or
- where the operator was complying with an instruction from a public authority (unless, for example, it is a notice requiring action following an emission/ incident caused by the operator).
Two other possible defences are referred to in the ELD: a “permit defence” (where an operator was acting in accordance with the conditions of an authorisation); and a “state of the art defence” (where, at the time the activities took place they were not considered likely to cause environmental damage). It is at the discretion of the Member States whether they transpose these defences.
Obligations of the operator
The ELD does not require operators to take actions which incur costs unless environmental damage is caused or is imminently threatened. It does not require upfront assessment, routine regular monitoring or any of the procedures associated with regulatory regimes. However, in direct contrast to most regulatory regimes, it places the onus or responsibility on operators to take preventative measures, to own up to having caused environmental damage, and to make proposals to remediate such damage.
Requests for action
Third parties, such as NGOs or affected parties, may put in a request for action from the competent authority but this must be supported by evidence of the environmental damage. They have access to judicial review of actions taken by the competent authority.
Status
The Directive should have been transposed and implemented by 30 April 2007 but delays in transposition mean that a later implementation date will be necessary for the UK. DEFRA are predicting the directive to be transposed by spring 2008.
Defra has published the first of two expected ELD consultations: ‘Consultation on options for implementing the Environmental Liability Directive’ (November 2006). The document was issued in collaboration with the Welsh Assembly Government and the Department of the Environment for Northern Ireland. Scotland has undertaken a parallel consultation. The consultation outlines the government’s intention to deliver the minimum transposition requirements of the directive. It is therefore the government’s preference to:
- Limit the scope of the directive to EU-protected biodiversity
- Adopt the permit “defence” in respect of those elements of the Directive’s requirements that are additional to those addressed by existing environmental protection legislation
- Limit the application of strict liability in line with the provisions of the directive
The second proposed consultation which, is expected autumn 2007, will outline the draft legislation for ELD and will be prepared in the light of response to the first consultation.
For more information about the Environmental Liability Directive visit DEFRA's site.