Determining environmental liability

Managing environmental liability
The concept of environmental liability refers to the fact that those that damage the environment should be held responsible for their actions. Environmental liability covers both environmental damage (site contamination and damage to biological diversity, also called biodiversity) and traditional damage (harm to health and property). Liability is strict for damage caused by dangerous activities and fault-based for biodiversity damage caused by a non-dangerous activity. The liable party is the operator in control of the activity that caused the damage.

Development of comprehensive liability and compensation regimes are key strategies in the achievement of environmental and sustainable development goals.

Member States of the European Union have established national environmental liability regimes that cover damage to persons and goods, and they have introduced laws to deal with liability for, and clean up of, contaminated sites. However, until now, these national regimes have not really addressed the issue of liability for damage to nature. This is one reason why economic actors have focused on their responsibilities to other people's health or property, but have not tended to consider their responsibilities for damage to the wider environment. This has traditionally been seen as a 'public good' for which society as a whole should be responsible, rather than something the individual actor who actually caused the damage should bear. The introduction of liability for damage to nature is expected to bring about a change of attitude that should result in an increased level of prevention and precaution.

Nearly all national environmental liability regimes are based on strict liability (this means that no fault by the polluter is required), when damage is caused by a hazardous activity.

Better prevention and ensuring restoration of environmental damage will result in an increased internalisation of environmental costs, which means that the costs of preventing and restoring environmental damage will be paid by the parties responsible for the damage rather than being financed by society in general (or the tax payer).

Examples of EC legislation dealing with hazardous or potentially hazardous activities are legislation containing discharge or emission limits for hazardous substances into water or air; legislation with the objective to prevent and control risks of accidents and pollution; legislation dealing with dangerous substances and preparations with a view (among others) of protection of the environment; legislation in the field of waste management; legislation in the field of genetically modified organisms (as far as not covered by the [Product Liability Directive]); and legislation in the field of transport of dangerous goods.

International works on liability include the work of the International Law Commission on the development and application of liability regimes under multilateral instruments including the [Antarctic Treaty], the [Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal], and the [Cartagena Protocol on Biosafety].

1. For cases concerning environmental damage, public interest groups should have a right to step into the shoes of public authorities, where these are responsible for tackling environmental damage, but have not acted. This is in line with the 1998 [Ã…rhus Convention on access to information, public participation in decision-making and access to justice], a UN/ECE Convention that has been signed by the Community and all the EU Member States, as well as by other states.

2. The crucial question is how to equate the environmental risk of an economic activity of a third party with the financial risk of the investor. The importance of legislation to control pollution by requiring industrial remediation or imposing fines is broadly recognized. But beyond the command and control aspects of legislation there is a less acknowledged force: the power of liability. In accordance with the polluter pays principle, present laws hold liable the entity harming the environment but not the financiers to that activity. How, and by what means, might this be changed?

Type Classification:
E: Emanations of other strategies