Artikel European Environmental Liability Directive: No Joke Risks

The new legislation always applies, insofar as other laws pertaining to water resources, nature conservation, and soil protection do not contain farther-reaching demands. It thus introduces a Europe-wide minimum standard. In Germany, the directive has been implemented as the Environmental Damage Act (UschadG) which came into force on 14 November 2007.

Companies affected are slowly coming to recognise that they face entirely new liability hazards, urgently requiring rapid adjustment of their risk management systems. Compliance with the law is monitored not only by the competent authority, but also by affected parties and by so-called non-governmental organisations, especially environmental associations, which in the case of environmental damage can demand action by the authorities against the polluter, even through the law courts. The rigorous monitoring rulings will probably also further increase the danger of claims for environmental damage. The Environmental Liability Directive and the German Environmental Damage Act apply to three kinds of environmental damage:

• Damage to protected species and natural habitats (briefly: biodiversity damage),
• Damage to bodies of water, and
• Damage to soil (however, only if substantial adverse effects on humanhealth also result).

The danger of damage to soil or bodies of water is present in almost all industrial parks, because numerous hazardous substances are typically handled here. The danger of biodiversity damage increases with increasing proximity of the industrial park to bird protection and fauna-flora habitat areas. Independently thereof, protected species are also subject to protection outside of sanctuaries. If such protected species were also to settle in industrial parks, where there are always areas left close to nature and garden-like managed areas, then there would also be a threat of liability for environmental damage if they were to be injured. In contrast, the air does not number among the protected resources because ascertainment of damage is largely impossible.
The following time-based limitations apply: The Environmental Liability Directive and the German Environmental Damage Act do not apply to damage caused by emissions, events, or incidents which took place before 30.4.2007, the expiry date of the transition period of the Environmental Liability Directive, or are attributable to a certain activity, which ceased prior to that date. Moreover, the German Environmental Damage Actdoes not apply in the case of damage caused more than 30 years ago if the authorities undertook no action against the responsible persons during that time. Thus the new law does not cover old contaminated sites; these are regulated solely by the German Soil Protection Act (see Instalments 22 and 23 of this series).
The new liability law according to the Environmental Liability Directive comes into force alongside existing civil law liability rules such as the German Environmental Liability Act, which was passed as long ago as 1990 without any European legal obligation. Particularly in view of the similar names, it should be noted that the two legal areas should not be confused. The Environmental Liability Act requires operators of certain plants – especially those covered by the IPPC directive – to pay civil damages if and when third parties are killed, injured, or suffer damage to their property via the environment through operation of the plant. It is not a question of fault or blame; the German Environmental Liability Act establishes a so-called absolute liability. In contrast, liability according to the Environmental Liability Directive and the German Environmental Damage Act concerns damage to public environmental resources which nobody can claim to own. The interests of these environmental resources are represented by the competent national authorities.

Liability for Occupational Activities

According to the Environmental Liability Directive the operator who engages in certain occupational activities can only be held liable if he has caused damage to the environment through occupational activity.

These “occupational activities” include certain economic activities, regardless of whether they are performed subject to private or public law and irrespectively of their profit or non-profit character. They are compiled in Annex III of the Environmental Liability Directive. Accordingly, occupational activities are operation of an installation subject to an IPPC permit, waste management operations, activities governed by laws concerning the protection of natural bodies of water such as discharge of waste water, transport of hazardous goods, work on genetically modified organisms and well as the release of genetically modified organisms into the environment. Purely private activities without occupational relevance such as gardening or leisure activities do not incur liability according to the Environmental Liability Directive.
Whereas the directive assigns responsibility to the operator who undertakes certain occupational activities, the German Environmental Damage Act is concerned with so-called responsible parties. However, this change of terminologydoes not imply any change of content. The German legislature undertook the change for reasons relating to the legal system because environmental liability according to the Environmental Liability Directive has the nature of accountability under public law; no deviation from EU law is intended.
If an occupational activity gives rise to environmental damage, the responsible party is liable regardless of blameworthiness or fault. The Environmental Liability Directive thus establishes an absolute liability in the area of public law.

Liability Beyond the Limits of Occupational Activity

This concept is supplemented by an area of fault-dependent liability. However, this concerns only damage to species and natural habitats and the imminent danger of such damage through occupational activities not listed in Annex III of the Environmental Liability Directive (= Annex 1 of the German Environmental Damage Act). In these cases the responsible party is liable only when at fault, i.e. only when having acted with intent or negligently.

In addition to the polluter, holders of a permit for one of the listed occupational activities are also subject to liability, so that no plant operator can avoid responsibility by maintaining that he no longer operates the plant, and thus no longer engages in occupational activities. Finally, any party who has registered or given notification of an occupational activity, which is particularly common in the movement of waste, is also liable.
If there is an imminent danger of environmental damage, i.e. if there is sufficient likelihood of environmental damage in the near future, the responsible party has two obligations without receiving instructions from the competent authority: On the one hand he has to inform the competent authority about all relevant aspects of the situation and on the other hand he has to undertake all necessary preventative measures.
If environmental damage has already occurred, then he has to fulfil the same information obligations as well as an obligation to undertake comprehensive remediation measures. Above all, the environment has to be restored to its previous state (restitution). Supplementary remediation measures or compensatory remediation are of lower priority.
The costs are always borne by the responsible party. However, the manner in which environmental damage is to be compensated and, where necessary, valued monetarily, is still open in many cases. In contrast to liability under civil law, public law liability according to the Environmental Liability Directive has no ceil-ing.

Powers of the Authorities

The competent authority observes that the necessary prevention, damage limitation, and remediation measures are undertaken. To this end they can compel the responsible parties to provide information and to undertake the necessary prevention, damage limitation, and remediation measures.

In any case, the responsible party is obligated to identify at his own cost the necessary remedial measures and to submit them to the competent authority for approval. The competent authority then decides, in accordance with the special regulations, on the nature and extent of the remedial measures to be undertaken.
Precisely in an industrial park it is conceivable that situations arise in which multiple companies are responsible for environmental damage. The burden of proof rests with the competent authority if it intends to make a claim for remediation of environmental damage against a company. It is thus necessary to prove that a company has at least made a relevant contribution the environmental damage. If that is indeed the case for multiple companies, because they have all exerted a damaging effect on soil, water, or nearby bird protection and fauna-flora habitat areas, or are responsible for the loss of a protected species in a certain area, then the authority has a wide range of choice regarding whom they wish to claim against for investigation and remediation. It can claim against just one or against all responsible parties. The principal selection criterion has to be who can remedy the environmental damage fastest and most effectively. As a rule, the authority will initially take recourse to the more effective enterprise. The German Environmental Damage Act gives the obligated responsible party the right to compensatory civil law claims against other parties, on a basis similar to that of Section24 Paragraph2 of the Federal German Soil Protection Act. Article9 of the Environmental Liability Directive allows such national regulations.

Consequences for Enterprises

The Environmental Liability Directive and the Environmental Damage Act make it essential to extend consideration of risk to environmental factors distant from the site. Risk management and compliance testing can no longer be re-stricted to the company itself but have to include the surroundings. With respect to environmental damage in the sense of the Environmental Liability Directive it is necessary to determine the probability of occurrence, the possible extent of damage, and the relevant insurance questions about the environmental conditions at the company’s location. Otherwise it will be difficult to launch a successful defence against claims by the competent authorities and the environmental interest groups instigating such claims. Moreover, there is the threat of incalculable damage remediation costs. Every company should therefore have an interest in risk transparency. Without such transparency it will impossible to obtained adequate insurance cover. This concerns not only damage that can arise from normal operation of plant but also the prevention of failures of the intended mode of operation; both come into question as causes of environmental damage.

Industrial park contracts should now also be supplemented by inclusion of contractual clauses dealing with the treatment of possible environmental damage. Because contractual agreements between multiple interferers have to be considered by the competent authority on selection of the interferer. Here it is possible to tie in with agreements reached for cases of soil damage and previous contamination in connection with the Federal German Soil Protection Act. According to the Environmental Liability Directive and the Environmental Damage Act, in cases of soil contamination caused after 30.04.2007 and which also represents a hazard to human health, the first liability claims must always be made to the responsible party. Only when it becomes apparent that the responsible party cannot remediate the environmental damage can the competent authority claim against other responsible parties according to Section4 of the Federal German Soil Protection Act, i.e. the accountability of the so-called interferer according to the Federal German Soil Protec-tion Act takes second place to the liability of the polluter in cases of environmental damage. Contractual agreements in this area should therefore now the re-examined.

There is also the question of defence against unjustified claims in the area of damage to bodies of water and biodiversity and the question of which company in the industrial park has to bear the costs of remediation if a case of environmental damage occurs. With this in mind, joint liability groups could be formed if multiple companies produce the same or similar emissions. In the absence of any contractual agreement the competent authority will have to select an interferer, who can take recourse to the civil court system to claim compensation according to Section9 Paragraph2 of the Environmental Damage Act in order to attain a final distribution of the remediation costs. This does not always lead to just results because such court cases often fail owing to questions of causation and problems associated with evidence. They also tend to provoke strife among the occupants of an industrial park, which is best avoided by unequivocal contractual agreements reached in advance.

Facts for Decision Makers

• The danger of damage to soil or bodies of water is present in almost all industrial parks, because numerous hazardous substances are typically handled here.
• Companies are slowly coming to recognise that they face entirely new liability hazards, urgently requiring rapid adjustment of their risk management systems.
• The new liability law according to the Environmental Liability Directive comes into force alongside existing civil law liability rules such as the German Environmental Liability Act.