Opinion on the communication from the Commission to the Council and Parliament and the Economic and Social Committee: Green Paper on Remedying Environmental Damage (94/C 133/02)

On 3 June 1993 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Economic Community, on the Green Paper on Remedying Environmental Damage.

The Section for Protection of the Environment, Public Health and Consumer Affairs, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 1 February 1994. The Rapporteur was Mr Pellarini.

At its 313th Plenary Session (meeting of 23 February 1994), the Economic and Social Committee adopted the following Opinion by 75 votes to 38, with 11 abstentions.

The Committee has debated at some length the issues raised by the Commission Communication, sounded out all the relevant parties and obtained oral evidence. The Committee's findings are put forward as a constructive contribution towards the drafting of Community legislation on the prevention and remedying of environmental damage.

1. Foreword

1.1. The purpose of the Green Paper is to provoke a wide debate which will help the Commission decide how best to tackle the problem.

1.2. The Green Paper begins by assessing the usefulness of civil liability as a means of allocating the costs of environmental restoration and of discouraging pollution. It goes on to consider the case for establishing joint compensation schemes for remedying environmental damage in instances where use of the civil liability instrument is not possible.

1.3. The present Opinion highlights the Committee's grave concern - repeatedly voiced over the last few years (1) - about environmental protection problems and the damage still being registered. The Opinion offers a number of comments and recommendations.

1.4. The Committee approves the Commission's move to devise regulatory instruments for remedying environmental damage, based on the legal concept of civil liability. The move is an appropriate way of respecting the two basic principles of prevention and 'the polluter pays', already recognized in the Single Act and consolidated in the Maastricht Treaty. It is also in line with the thinking and objectives of the programme of policy and action in relation to the environment and sustainable development.

1.5. Commission action has been requested for some time. In the Opinion which it adopted on 28 February 1990 on the proposal for a Council Directive on civil liability for damage caused by waste (1), the Committee expressed its surprise that the Commission had not yet completed its work on that subject and had not held back the specific Draft Directive until all the issues involved had been clarified. The complex nature of this matter in general is part of the reason why consideration of the Draft Directive is still at the Council stage.

1.6. The Committee hopes to see the Council of Environment Ministers make an explicit commitment by instructing the Commission to draft a proposal forthwith.

2. The reasons for Community action

2.1. Recent decades have seen a series of major accidents with serious environmental implications, especially for the ecological system. The resultant public outcry has spawned an environmental philosophy with its own ethical codes, ideologies and related political demands.

2.1.1. At the same time there is a growing public realization that accidents are only the most dramatic example of environmental damage, and that measures are also urgently needed to remedy damage inherited from the past and caused by the cumulative effects of industry, farming and also human activity in general (for example, the harmful effects of large urban centres, of energy installations, of motor-vehicle exhausts, etc.), since such damage is undoubtedly more widespread and insidious.

2.1.2. Reliable environmental protection levels have therefore become an economic and social necessity, not only because today's consumers demand products that are both less polluting and less polluted, but also because such concerns are shared by many manufacturers.

2.1.3. The challenge facing science and technology, industry, agriculture and politicians - in short, society in general - is how to combine strict environmental standards with economic growth and more employment.

2.1.4. The Community has long been mindful of these concerns and has placed the protection of the environment at the heart of its strategic objectives, giving it specific mention in the EC's founding Treaties.

2.1.5. The Committee has repeatedly voiced its conviction that in order to achieve a high level of active protection and to stem the decline, action is needed not only to prevent further attacks on the environment but also to devise policies and programmes to try to remedy any damage that does occur.

2.1.6. This calls for a battery of new legal, economic and social instruments to ensure that liability and costs are attributed equitably.

2.2. An environmental policy which seeks to prevent the causes of damage at source must necessarily take account of the considerable ongoing costs to the Member States, the Community, the economy and consumers, of repairing the environmental damage caused by human activity, quite apart from that caused by natural occurrences. A mechanism which provides compensation arrangements can help to alleviate these costs.

2.2.1. Assigning possible liability with greater certainty would have a preventive effect because it would spur those who take the risk of conducting a potentially hazardous activity to take steps to minimize the possibility of damage and hence of liability. This would in turn go some way towards internalizing costs wherever possible. The civil liability system can thus become an important economic instrument for environmental protection.

2.3. A further reason for Community action laying down reliable and uniform standards and procedures, in addition to settling problems arising from cross-border damage, is the need to remedy the lack of legislative harmonization which can foster distortions of competition and impede the operation of the internal market.

2.3.1. Specific legislation differs considerably from one Member State to the next, with the result that both protection levels and sanctions vary.

2.3.2. Thus if liability for environmental damage is not uniform throughout the Community, some operators will be obliged to make a greater or lesser degree of financial reparation for the damage they cause while others are not. This would have the undesirable result of not applying the fundamental 'polluter pays' principle uniformly, creating significant de facto differences in treatment and thus a dangerous trend towards distorting competition and 'ecological dumping'.

2.4. Lastly, in support of the case for Community action, we may note the numerous legislative initiatives concerning liability for environmental damage in individual Member States and at international level, in part flowing from the commitments entered into at the Rio conference.

2.4.1. The Commission Green Paper lists these initiatives. The most recent, in which the Commission was actively involved at the preparatory stage, is the Council of Europe's Convention on civil liability for damage resulting from activities dangerous to the environment.

3. General comments

3.1. Surveys carried out by the Statistical Office of the EC confirm that the European public's interest and concern for environmental protection has grown considerably in recent years.

3.2. Since the public is strongly in favour of concrete, immediate action, the Community must give careful consideration to the forms of action best calculated to ensure a high level of environmental protection for all European citizens while also respecting the subsidiarity principle.

3.2.1. The Committee therefore applauds the Commission's decision to launch a wide-ranging debate on the application of civil liability for remedying damage. The hearings held by the Economic and Social Committee and the European Parliament have been useful in this respect.

3.2.2. The openness of the debate is to be welcomed, and the involvement of all the interested parties should make for a more effective assessment of the potential benefits and costs of Community action or lack of action, as stipulated in Article 130r(3).

3.2.3. There is broad agreement on the need for a regulatory framework based on uniform principles applying throughout the EC, including use of civil liability, subject to a few special considerations and distinctions which will be discussed in the specific comments below.

3.2.4. However, concern has also been voiced about the danger of excessively rigid and detailed harmonization which would burden the competitiveness of EC industry. Some parties take the diametrically opposed view that the existing legislative situation in the various countries is perfectly adequate for present requirements.

3.3. In response to concern about competitiveness, it should be noted that the most economically strong and socially stable countries have generally been able to anticipate incipient changes in good time, and have taken appropriate steps to control and regulate them.

3.3.1. In a society that is becoming more and more complex and interlinked at global level, there is a vital need for someone to carry out a locomotive role and to provide encouragement. If nothing else, this would provide a point of reference for those industrialized nations lacking adequate environmental protection (e.g. Eastern Europe). It would also help prevent environmental dumping.

3.3.2. The EC, which is seen by many as a force for closer association, therefore has a priority interest in maintaining and bolstering its position as a role model in the political, economic and social spheres.

3.3.3. Moreover, the fact that certain countries have stricter and more binding environmental protection legislation than that being mooted for the EC does not seem to have penalized their economies; indeed, in many cases it has boosted the quality of production organization and products, which in turn has brought economic benefits.

3.4. Environmental protection can be looked on as an opportunity to boost the competitiveness of the economy and to create jobs. This is the view of the Commission's White Paper on Growth, Competitiveness and Employment which forms the basis for the action plan adopted by the EU Council of Ministers in December 1993.

3.4.1. Such is the background to the discussion of the use of civil liability as an instrument for preventing and redressing environmental damage. This discussion must take account of the economic effects which excessively strict environmental liability has had in the United States.

3.4.2. The Committee considers that civil liability could usefully combine legal measures and the associated controls with economic instruments and voluntary agreements. The balance between environmental liability and these other instruments must be carefully assessed, to avoid undesirable over-regulation.

3.5. The Committee realizes that tackling environmental damage solely from the legal angle is no longer enough, especially in the absence of a uniform, long-standing body of Community legislation. Action is also needed in such spheres as: official checks on compliance with the regulations in force, the provision of detailed objective information, affirmation of new ethical principles, upgrading of production, prior scientific identification of possible risks and related remedies, and the consolidation of environmental awareness.

3.6. In short the Committee feels that despite the complexity of the issue and the doubts and opposition it arouses, a few fundamental needs should be addressed.

3.6.1. For the moment a few basic principles should be laid down, taking account of the need for gradual, congruent action, with the short-term aim of devising a coherent system of civil and, more especially, strict liability for remedying environmental damage. These principles should cover the following concepts:

- environment and environmental damage;

- restoration and compensation;

- activities subject to a strict liability regime;

- the right to bring a legal action;

- burden of proof, causal link, and possibility for the person accused of causing the damage to defend himself;

- possible role of insurance and banks;

- joint compensation systems;

- sanctions.

3.6.2. The initiative could take the form of a framework Directive, on the basis of Treaty Articles 130r and 130s, bearing in mind the problem of ratification of the Council of Europe Convention, which is not supported by all Member States.

3.6.2.1. The limitations of the Convention - which for example does not address the problems of long-distance damage or damage for which there is a multiplicity of liable parties - suggest that Community provisions are advisable, particularly as Article 25(2) of the Convention states that the EU Member States are not to apply the rules arising from the Convention when there is a Community rule governing the particular subject concerned.

4. Specific comments

4.1. Environment and environmental damage

4.1.1. It needs to be stated, as a matter of principle, that the environment is a fundamental social asset: damage to it should therefore be remedied as of right.

4.1.2. The concept of the 'environment' should be defined in broad terms, as in the Council of Europe Convention, covering natural biotic and abiotic resources (flora, fauna, air, water, soil), together with property forming part of an area's heritage.

4.1.3. The legal definition of 'environmental damage' should derive from a general premise covering all physical, chemical or biological deterioration of the environment and which can be graded:

a) according to type:

- biological and health damage caused by environmental pollution

- material damage (more or less serious)

and effects:

- acute (direct, immediate damage)

- chronic (long-term consequences)

- latent (damage revealed over a period of time);

b) according to site value:

- biological quality of ecosystems

- vulnerable areas (nature parks, ground water of drinking quality, etc.)

- priority uses (tourism, landscape, cultural and artistic traditions, etc.)

- high economic and productive quality.

4.1.4. Furthermore, a non-exhaustive list of the activities covered must be drawn up. It should not be restricted to high-risk industrial activities, but should also cover processes, activities and options which could cause environmental damage. The aim would be to avoid arbitrary exclusions, so that the cost of insurance arrangements, funds or taxation would not be confined to a small number of traditionally prominent sectors.

4.1.4.1. For example, the list should include activities with direct or indirect effects on the environment, differentiating responsibilities according to the scale of the likely damage:

- general activities that are under a general obligation to adopt precautionary environmental protection measures, regardless of the productive sector (noise, waste water, emissions, etc.);

- specific activities, whose property rights or freedom of location are already restricted on the grounds of public safety or social function, and which are subject to precautionary supervision by the public authorities (e.g. minimum safety distances, or complete bans, for specified production processes in inhabited areas);

- particular activities, already covered by national legislation or directives on specified hazards (nuclear industry, transport and processing of dangerous substances, etc.) or general hazards (agricultural fertilizers, energy production, etc.);

- activities for which public authorities have a liability because they have made faulty decisions with regard to authorization, checks, environmental impact assessment, etc.

4.1.5. A number of basic principles need to be established at the outset: the following comments concerning future and past damage, evaluation and compensation, should therefore be taken into account.

4.1.5.1. The two categories must be distinct: where future damage is concerned, the accent should be on prevention and on identification of liability; for past damage or where liability is unsure the real problem might be the containment and gradual reduction of damage until original optimum conditions are restored, although an attempt to identify possible guilty parties should not be ruled out.

4.1.5.2. This type of damage is generally on a considerable scale and results from insensitive or hasty development policies, legal vacuums, lack of scientific knowledge and the cumulative effect of various actions which may individually be quite harmless. As a result, it is not enough to provide legal remedies; much depends on the policies pursued by the authorities and a sense of collective social responsibility.

4.1.5.3. Sufficient precedents usually exist to allow for the scale of damage to be assessed by means of comparison. Unlike cases of physical damage to property or infringement of property rights, environmental damage cannot be looked at exclusively in terms of financial compensation. The most pressing need is restoration to the previous state: calculation of damage must therefore be based on the cost of restoration.

4.1.6. Lastly, it must be borne in mind that in no Member State does general civil liability law oblige the polluter to compensate all environmental damage. Most countries use other legal instruments for the remedying of such damage. Moreover, the Commission Green Paper rightly stresses the link between the application of liability for environmental damage and the insurability of that damage.

4.2. The right to bring a legal action

4.2.1. In addition to preventive intervention by the appropriate public authorities, and the right of the direct victims to seek compensation, the following parties should - provided that national legislation and case law do not dictate otherwise - be entitled to seek legal redress in cases where there are no identifiable injured parties:

- national and Community public authorities;

- national non-profit making environmental protection and consumer groups, recognized by the EC or a Member State;

- trade unions and professional associations, for problems related to health or biological damage;

- local ecological and consumer groups, for local issues.

4.3. Burden of proof and causal link

4.3.1. It is often difficult to establish a strict causal link in the case of environmental damage because of the multiplicity of sources of pollution and because damage may be spread over both space and time. Pollution of ground water and acid rain are two cases in point.

4.3.2. Placing the burden of proof on the victim thus makes his task very difficult, particularly in the case of chronic pollution. Moreover, scientific knowledge about the causal link between pollution and damage is relatively shaky.

4.3.3. There might therefore be a case for easing the burden of proof by some form of presumption of causation along the lines of that used in Article 10 of the Council of Europe Convention, which instructs the court to take due account of the fact that certain dangerous activities carry an inherently greater risk of causing damage. Of course, the defendant must be given the chance to provide vindication or evidence of contributory negligence by the injured or other parties.

4.3.4. Company participation in the Ecoaudit System (1) could provide useful elements for liability assessments. Ecoaudit promotes good environmental management of production and is an important damage prevention instrument.

4.4. Insurance and banks

4.4.1. This sector provides the financing and associated guarantees which enable activities to take place under the best possible conditions.

4.4.2. The enforcement of civil liability is directly dependent on such instruments being available, even if they are commensurate with the risk.

4.4.3. Insurance companies and banks should therefore be safeguarded and not given inappropriate responsibilities such as prior assessment of risks which do not fall within their traditional sphere of responsibilities.

4.5. Joint compensation systems

4.5.1. The Committee believes that no collective fund can be expected to replace civil liability which must in any case be retained, whatever the form.

4.5.2. With due respect for the 'polluter pays' principle, the Committee would support the establishment, as a back-up measure, of funds based on shared liability for the risk, as these allow any costs to be shouldered jointly, provide contingency reserves which can quickly be used in emergencies, can make advance part-payments pending assignment of liability, and can compensate injured parties in cases where full costs cannot be recovered.

4.5.3. However, the Committee does not consider a single European fund to be appropriate, since it would be unable to react flexibly to specific circumstances; indirectly it could weaken the concept of individual liability, or be looked on as simply a further form of general taxation.

4.5.4. European and national collective funds should in principle be divided into two categories: general funds, aimed at restoring past damage, and sector-based funds for high-risk sectors.

4.5.5. The sectoral funds should operate in the same way as standard forms of insurance, partly in order to limit costs, and could cover specific types or sectors of production such as SMEs and the craft sector.

4.5.6. The Committee considers that any such funds should be allowed to take legal action to recover advance payments, unless these funds are explicitly constituted as instruments of compensation.

4.5.7. The Committee is aware that these general funds will be financed not only by the most directly involved sectors but also by ordinary citizens through consumer prices or taxation.

4.5.8. The possibility must therefore be provided of involving organizations representing broad interests such as consumers, workers and environmentalists, as well as employers' organizations, in the management of such funds.

Done at Brussels, 23 February 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) See in particular the Opinion on a Community programme of policy and action in relation to the environment and sustainable development (OJ No C 287, 4. 11. 1992).

(2) OJ No C 112, 7. 5. 1990.

(3) OJ No L 168, 10. 7. 1993.

APPENDIX to the Opinion of the Economic and Social Committee

Defeated amendments

The following amendments, which received at least 25 % of the votes cast, were defeated during the debate.

Add the following new Point 4.3.4.1

'In all cases the defendant must be given a proper opportunity to vindicate himself. Consideration should therefore be given to:

- exemption from liability in cases where the damage can be traced back to an officially authorized activity and this authorization has not been infringed;

- exemption from liability in cases where the damage was caused by an activity whose danger to the environment was not scientifically proven at the time the damage occurred;

- liability of the polluter only for his share of the total damage, where the damage is caused by several parties (known or unknown);

- reduction in liability in cases where the injured party is partly responsible for the damage.'

Voting

For: 53, against: 57, abstentions: 5.

Points 4.5.2 to 4.5.8

Delete, and replace by the following:

'It is considered an advantage of compensation funds that they allow money to be made available at short notice for remedying the damage. However, the Green Paper does not indicate the scale of the financial means needed to establish one or more such funds. In the United States, the State and industry put billions of dollars into the Superfund, despite its limited role. A fund-based general clean-up of environmental damage in Europe would also require huge sums if the Funds had to pay for each and every case of damage to woodlands or buildings, or site contamination, for which no guilty party could be identified. Until the financial aspects are clearer, the Committee feels unable to come out for or against compensation funds.'

Voting

For: 47, against: 55, abstentions: 6.