Environmental Liability

Environmental Liability

Environmental Liability Directive (ELD) : Council Directive 2004/35/EC on environmental liability with regard to the prevention and remedying of environmental damage

The Environmental Liability Directive external site puts into practice the ‘polluter pays’ principle. Operators whose actions cause environmental damage are to be held financially liable for remedying this damage. This should mean operators take more care to prevent damage happening and are more likely to follow the precautionary principle. Environmental liability applies alongside any prosecution for criminal offences.

The ELD was adopted in 2004.

European Member States transposed the EU Environmental Liability Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage.

The main aim of the Directive is to establish a new kind of civil law mechanism based upon the ‘polluter pays’. Under the Regulations certain operators who cause a risk of ‘significant’ damage or cause ‘significant’ damage to land, water or biodiversity will have a duty to avert such damage occurring or, where damage does occur, a duty to reinstate the environment.

The EU Environmental Liability Directive is described in relation to ‘significant’ damage to biodiversity of European importance in terms of the Birds Directive and the Habitats Directive, to water bodies in terms of the Water Framework Directive and to land where public health is at ‘significant risk of being adversely affected’. There can also be significant damage caused by an operator where there will be an overlap, e.g. damage from land to water. Coastal damage can also affect land, water and biodiversity.

The Environmental Liability Directive aims to make those causing damage to the environment (water, land and nature) legally and financially responsible for that damage. The Directive was adopted in April 2004. It addresses only damage and damaging events which occur after the deadline for transposition at Member States level, i.e. 30 April 2007.

The Directive covers environmental damage caused by or resulting from occupational activities to:

  • Species and natural habitats protected under the 1992 Habitats Directive and the 1979 Wild Birds Directive. Damage to protected species and natural habitats is “any damage that has significant adverse effects on reaching or maintaining the favourable conservation status of such habitats or species”.
  • Waters covered by the 2000 Water Framework Directive. Water damage is “any damage that significantly adversely affects the ecological, chemical and/or quantitative status and/or ecological potential, as defined in the Water Framework Directive 2000/60/EC, of the waters concerned”. Adverse effects where Article 4(7) of the Water Framework Directive applies are excluded.

Land contamination that creates a significant risk of harming human health. Land damage is “any land contamination that creates a significant risk of human health being adversely affected as a result of the direct or indirect introduction, in, on or under land, or substances, preparations, organisms or micro-organisms”.

For certain high-risk activities listed in Annex III, which consists of a list of EU Directives and Regulations on dangerous activities, e.g. in relation to IPPC, waste, water pollution, water abstraction, dangerous substances, air pollution and GMOs, liability for all three categories of environmental damage is covered and strict liability applies, i.e. operators are liable irrespective of whether or not they are at fault. The strict liability is subject to the “mitigating considerations” of Article 8 (4).

Operators of activities other than listed in Annex III may also be liable for damage to protected species and natural habitats (although not for damages to land and water) if they are at fault or have been negligent. Consequently, if an operator of an un-listed activity causes biodiversity damage without being at fault, or if damage to soil or water occur as a result of operator activities, the operator will not be caught by the Directive.

An operator is any person who operates or controls an occupational activity. An occupational activity is one carried out in the course of an economic activity, a business or an undertaking, regardless of its private or public, profit or non-profit character (Article 2 (7)).

Member States may extend the definition to include persons to whom decisive economic power over the functioning of such an activity has been delegated. In Scotland it takes effect through the Environmental Liability (Scotland) Regulations 2009.

Environmental damage

For the purpose of the Directive, environmental damage is damage to European habitats and species, to water (‘status’ under the Water Framework Directive) and damage to land that threatens public health. Only damage to habitats and species is considered here.

European habitats and species are those listed under two EU Directives and including:

  • Birds directive – birds mentioned in Article 4(2) (i.e. regularly occurring migratory species); listed on Annex I; and the habitats of these bird species; and
  • Habitats directive – animal and plant species listed in Annexes II and IV; the habitats of species listed in Annex II; the breeding sites or resting places or species listed in Annex IV, habitats listed in Annex I.

Environmental liability applies wherever these habitats or species are affected. A habitat or species is considered damaged when an operation affects its favourable conservation status or its ability to maintain or recover to favourable conservation status.

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