CHRIS CLARKE 58 Park Avenue North London N8 7RT Tel: 020-8348 5589 email: acf.clarke@virgin.net

1. LIABILITY FOR ENVIRONMENTAL DAMAGE(Directive 2004/35/EC on environmental liability with regard to the prevention and remedying of environmental damage)UCL LLM - EU Environmental Law I (10 November 2010) CHRIS CLARKE 58 Park Avenue North London N8 7RT Tel: 020-8348 5589 email: acf.clarke@virgin.net

2. What is “liability”? • who pays when damage occurs? • what kind of repair is required? • how clean is “clean”? • what advance precautions are required? • how is this enforced? • mechanisms & incentives for settling disputes? • who bears the risk when regulation fails? • even modern regulation not meant to eliminate all risk • potentially the most powerful weapon in environmental policymaker’s armoury? • costs huge - transformed corp attitudes to environment in US

3. The problem • major pollution damage • contaminated land (+ groundwater) • water pollution (surface waters) • harm to protected habitats & species (biodiversity) • air pollution (?) • property damage & personal injury • degrees of complexity • accident/incident - immediate/quick discovery • single party incident or multiple parties • gradual pollution - delayed discovery • single owner/source, multiple owners/operators, multiple owners/operators & sources, off-site waste disposal, mass site/damage over wide area, unknown/indeterminate source

4. Key issues • standard of liability - strict or fault-based? • scope - types of harm & activities covered • civil or public law approach? • liable party • apportionment in multiple party cases • defences & other protections • exemptions, mitigating factors, appeals, etc • pre-enactment events - historic damage • causation • burden of proof • clean-up standards (triggers & objectives) • financial security & insurance coverage

5. Other issues • sanctions • settlement incentives & procedures • reporting requirements • releases (from liability) & “re-openers” • secondary litigation (contribution, insurance, etc) • government liability (municipal, regulator, defence,etc) • urban redevelopment/brownfields • budget constraints & federal/central v. local divisions • implementation (action lead in the clean up) • long-term oversight & maintenance • data collection

6. Definition of “civil”

7. The national/international context • whole debate in shadow of US controversy • US laws (CERCLA, RCRA, CWA, OPA, etc) • strict liability, few defences - little understood in Europe • industry groups determined to avoid repeat in Europe • national law developing fast (EU MSs/OECD) • substantial bodies of law, intense debates, strict liability • public & private, statute & case law • the liability rules differ • MS-MS, regime-regime & from proposed directive • choice of enforcement options • different liable parties, defences, standards, etc • overlap & boundary problems • international conventions (IMO, nuclear, etc)

8. Strategic muddle • terminology • “civil liability”, “polluter”, “damages”, “biodiversity”, “operator” • common law v. civil code traditions • 15-25 jurisdictions, differing legal principles • civil versus public law • civil: private claims for compensation/damages • public: public authority/administrative orders • largely civil approach 1992-2001 • shift to public law in 2001 - compromise • + decision to base directive on existing EC law • poor standard of debate • little attention to lessons from or fit with national law

9. Developments at EU level • EU aspirations & commitments (1970s-80s) • transfrontier shipment directive (1984), Sandoz response (86) • national law developing fast • substantial bodies of MS law, intense debates, strict liability • US laws - controversial, little understood, draconian rules • 2 attempts at civil liability for waste directive • October 1989, amended version June 1991 - abandoned • Council of Europe Convention (Lugano, 1993) • civil law approach; MSs in the negotiations, divided on result • Commission Green Paper (1993) • 1991-92 drafts US-influenced; final Paper nearer Lugano • hearings, seminars, EP & ESC resolutions (1994)

10. Developments at EU level II • studies (legal, economic) + consultations (1994-96) • considered accession to Lugano Convention (autumn 1996) • Commission “orientation” debate (Jan 1997) • more studies (contaminated sites, ecological damage) • White Paper (Feb 2000)(due Mar 1999) • more studies (legal update, financial assurance, nat res, etc) • DG Env working paper & draft (2001) • shift to public law, abandonment of civil (private) claims • Commission proposal (COM(2002) 17) • DG Environment draft weakened by other DGs • co-decision process (2002-04) • driven by Council of Ministers, Parliament divided/unprepared

11. Key features of the Directive • public law system - enforcement by authorities • no civil liability for personal injury/property damage • prevention/remediation of damage to protec-ted species/habitats, water, land (+ costs) • potentially high thresholds for damage • species/habitats protected under Birds & Habitats Directives + MS discretion on national equivalents • future events only • strict liability on operator of Annex III activities • fault liability (species/habs only) for other activities • duty on authorities to enforce • but not to remedy or prevent at own expense

12. Key features II • MS discretion on multi-party apportionment • MS option of broad defences/exemptions • compliance & state-of-the-art knowledge • plus act of God, act of war, compulsory order, third party intervention despite appropriate measures • international marine/nuclear regimes excluded • also national defence, international security, etc • return to baseline, interim losses, health • primary/complementary/compensatory remediation • limitation: 5 yrs (costs) & 30 yrs (enforcement) • right to request action  reasoned response

13. Key features III • MSs to encourage insurance/financial security • no compulsion, but accelerated review (2010): • availability at reasonable cost + conditions, gradual approach, ceiling for guarantee, low-risk exclusion & extended impact assessment • 3 years for MSs to transpose + reviews • financial security (2010), MS experience (2013), general review & amendments (2014) • a directive - substantial overlap with MS law • MS right to “more stringent provisions” (Art.16 & Treaty) • numerous areas of MS discretion • the regime will not be limited to the Directive

14. EC Directive: Annex III • Directive 96/61/EC - IPPC • Directive 84/360/EEC on air pollution from industrial plants • Directive 76/464/EEC on pollution caused by dangerous substances discharged into the aquatic environment • Directive 80/68/EEC on protection of groundwater against pollution caused by certain dangerous substances • Directive 2000/60/EC - the Water Framework Directive • Directives 75/442/EEC, 91/689/EEC, 1999/31/EC & 2000/76/EC on waste, hazardous waste, landfill & incineration (sewage sludge?) • Directives 67/548/EEC & 1999/45/EC on classification, packaging & labelling of dangerous substances & preparations • Directives 91/414/EEC & 98/8/EC on the placing on the market of plant protection products & biocidal products • Directives 94/55/EC, 96/49/EC & 93/75/EEC on transport of dangerous goods by road/rail, & on min requirements for vessels using EC ports • Directives 90/219/EEC & 2001/18/EC on (cont use & release of) GMOs

15. How will it fit into MS law? • 27 Member States • (15 when approved; 25-27 or 28 expected) • common law & civil code jurisdictions • Directive will not necessarily replace existing MS law • will supplement/sit on top of existing law • replace parts & leave other parts intact • overlap & interact  boundary problems • other strict liability rules/obligations will remain • even where an event is not subject to the Directive, it may still be subject to strict liability under national or regional law, with different rules

16. Comparison with MS (public) law • more stringent • MS/authority duty to enforce + reasoned decision • species/habs accelerated/extended (beyond sites?) • compensatory restoration/interim losses • scope of water damage? • (future) financial security requirements? • less stringent • strict liability: limited list • land damage/thresholds for water & species/hab damage • definition of liable party (operator in control) • future damage only • defences & exemptions? • limitation period

17. Ambiguities & areas of discretion • ambiguities in the proposal • scope of environmental damage (esp. specs/habs) • significance thresholds (esp. specs/habs) • return to baseline condition, interim losses, etc • definition of liable party/operator • encouragement of financial security • Art.16 more stringent provisions • areas of MS discretion • nationally designated habitats/species • apportionment in multi-party cases • relief for compliance/state of the art • duty to investigate & respond • requests for action in cases of imminent threat • more stringent provisions

18. Boundary problems • definition of liable party (operator) • scope of & thresholds for damage • scope of strict liability (Annex III) • defences & exemptions • past v. future damage • remediation rules & objectives • “more stringent provisions” (Art.16) • limitation periods (5 + 30 years)