COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the Common Position of the Council on the adoption of a Directive of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage

2002/0021 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the Common Position of the Council on the adoption of a Directive of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage

1. PROCEDURE

Date of transmission of the proposal to the EP and the Council [document COM(2002) 17 final - 2002/0021 (COD)]: // 19 February 2002

Date of the opinion of the European Economic and Social Committee: // 18 July 2002

Date of the opinion of the Committee of the Regions: // No opinion delivered

Date of the opinion of the European Parliament, first reading: // 14 May 2003

Date of adoption of the common position: // 18 September 2003

2. OBJECTIVE OF THE COMMISSION PROPOSAL

The proposal aims to establish a framework whereby environmental damage, which is defined in the proposal as "biodiversity damage", "water damage" and "land damage", would be prevented or remedied through a system of environmental liability. Whenever possible, the operator that has caused the environmental damage or an imminent threat of such damage occurring must, in accordance with the « polluter-pays » principle bear the cost associated with the implementation of the necessary preventive or restorative measures. The operators of certain actually or potentially risky activities listed in Annex I to the proposal can be held liable for environmental damage they would cause; fault or negligence on their part is not a prerequisite of liability. Marine pollution incidents and nuclear damage are excluded from the scope of the proposal. Operators of occupational activities other than those included in Annex I can also be held liable for any biodiversity damage they would cause by their fault or negligence. No liability is attached to damaging events when these events are caused by an act of God or have been duly authorised. In cases in which no operator can be held liable or an operator is liable but unable to pay, Member States are required to find an alternative source of financing the measures in question. The proposal also aims to cover transboundary damage. Qualified entities (among which non-governmental organisations) are entitled to request the competent authorities to take action against a liable operator; they may avail themselves of review procedures to challenge the competent authorities' decisions or omission to act. Operators are not required to insure their potential liabilities under the proposal but Member States must encourage the development of appropriate financial security products and markets. The proposal is only prospective in effect (that is, it has no retrospective effect).

3. COMMISSION'S COMMENTS ON THE COMMON POSITION

3. 1. General comments

The Common Position represents a significant step forward in the adoption and development of an innovative scheme providing for a concrete implementation of the polluter-pays principle to protect biodiversity, land and water in Europe. The EU Sixth Environment Action Programme also calls for such a liability regime [1]. The Commission was in a position to support the Common Position, which was adopted by qualified majority.

[1] See Article 3(8) of Decision No 1600/2002/EC of the European Parliament and of the Council of 22 July 2002 laying down the Sixth Environment Action Programme (OJ L 242, 10.09.2002, p. 1).

3.2. Detailed assessment

The Common Position differs to some extent from the Commission proposal. Many of the introduced changes aim to provide clarification of the text although others are changes of substance. The Commission can agree with the modifications listed hereafter. Unless indicated otherwise, references relate to the Common Position.

Recitals of the Common Position

A number of Recitals have been amended as consequential changes to amendments brought to the Articles (see in particular Recitals 6, 10, 16, 20, 22, 27 and 28 of the Common Position). Four recitals have been deleted (Recitals 11, 15, 16 and 23 of the Commission's proposal) as consequential changes to amendments brought to the Articles (Articles 3(1)(b), 5(4), 6(3) and 12) while six new recitals have been added (Recitals 4, 7, 11, 12, 14 and 19 of the Common Position) to assist in the interpretation of the Common Position. Recital 4 clarifies that airborne pollution can cause environmental damage. Recital 7 is to be read in conjunction with the new section 2 on Remediation of land damage of Annex II on the use of risk assessment procedures to assess risks to human health. Recitals 11 and 12 clarify the relationship between the Common Position and international instruments. Recital 14 makes clear that the Common Position does not cover traditional damage, that is to say personal injury and damage to goods, and economic losses. Recital 19 clarifies that flat-rate calculation can be used for certain types of costs.

The recitals of the Common Position correlate with the recitals of the Commission proposal as shown in Annex I.

Articles of the Common Position

Article 1 - Subject matter

A reference to the "polluter-pays" principle has been added.

Article 2 - Definitions

- Definitions have been reordered in a more logical sequence.

- Article 2(1)(a): "biodiversity damage" has been renamed "damage to protected species and natural habitats". References to baseline condition and criteria to assess the significance of adverse effects on the habitats and species concerned have been added (see also new Annex I).

- Article 2(2) of the Commission proposal is now the second subparagraph of Article 2(1)(a). This provision makes clear that, in those cases referred to in this paragraph, only previously identified adverse effects are excluded from the concept of damage to protected species and natural habitats.

- Article 2(1)(b): "water damage" is still defined by reference to the various concepts defining water quality in Directive 2000/60/EC ("the Water Framework Directive") but it is no longer required that water's quality should worsen from one of the categories defined in the Water Framework Directive to another.

- Article 2(1)(c): the definition of "land damage" incorporates the definition of "land contamination" (Article 2(1)(11) of the Commission proposal). The concept of "serious harm" has been replaced by that of "significant risk".

- Article 2(2): the definition of "damage" has been simplified without any change to its content.

- Article 2(3): "biodiversity" has been renamed "protected species and natural habitats" since this corresponds better to the content of the definition. The definition now includes migratory birds referred to in Article 4(2) of Directive 79/409 ("Birds Directive"). The inclusion of habitats and species protected under national law only is now optional.

- Article 2(4): the definition of "conservation status" has been completed by criteria which allow assessing when it is favourable.

- Article 2(5): the definition of "waters" is unchanged.

- Article 2(6): the definition of "operator", which now incorporates the definition of "person", has been amended along the lines of the corresponding definition in Directive 96/61/EC on integrated pollution prevention and control ("IPPC Directive").

- Article 2(7): the definition of "occupational activity" has been clarified and made more operational.

- Article 2(8): the definition of "emission" now makes clear that the source of an emission should be human activities.

- Article 2(9): the definition of "imminent threat of damage" is unchanged.

- Article 2(10): the definition of "preventive measures" is unchanged.

- Article 2(11): the definition of "remediation measures" - which replaces the word "restoration" - has been amended so that it is clarified that it covers mitigating and interim measures. In addition, parts of the definition have been moved to Annex II (see below).

- Article 2(12): the wording of the definition of "natural resource" has been slightly amended so as to reflect the change in terminology in the Common Position.

- Article 2(13): the definition of "natural resource services" is unchanged.

- Article 2(14): the definition of "baseline condition" has been simplified by replacing an indicative list by an overall reference to best available information.

- Article 2(15): the definition of "recovery" has been amended as a consequential change to changes brought to Annex II.

- Article 2(16): the definition of "costs" is unchanged.

- The definitions of "insolvency practitioner" and "qualified entities" have been deleted as consequential changes to modifications brought to the Articles. The definition of "value" has also been deleted.

Article 3 - Scope

- The first two paragraphs of Article 3 of the Commission proposal have been merged in Article 3(1). Article 3(1)(b) now defines the scope by reference to the presence of a fault or negligence on the part of the operator concerned.

- Article 3(2) corresponds to Article 3(5) of the Commission proposal.

- Article 3(3) corresponds to Article 3(8) of the Commission proposal. It has been reformulated to cover any types of monetary compensation to private parties.

Article 4 - Exceptions

- Article 4(1) corresponds to Article 9(1)(a) and (b) of the Commission proposal.

- Article 4(2) corresponds to Article 3(3) of the Commission proposal. The international instruments are now listed in an Annex (Annex IV). Damaging incidents regulated by one of the international conventions referred to in Article 4(2) will only be excluded from the scope of the future Directive if the relevant convention is in force in the Member State concerned.

- Article 4(3) is new and allows operators to limit their liability under national legislation giving effect to two international instruments concerning liability for maritime claims and liability in inland navigation.

- Article 4(4) corresponds to Article 3(4) of the Commission proposal. The international instruments are now listed in an Annex (Annex V).

- Article 4(5) corresponds to Article 3(6) of the Commission proposal. It now refers to the possibility of establishing a causal link rather than to the impossibility of doing so.

- Article 4(6) corresponds to Article 3(7) of the Commission proposal. Reference to international security and protection from natural disasters has been included. An activity is now excluded on the basis of its main purpose.

Article 5 - Preventive action

- Article 5(1) merges the first two paragraphs of Article 4 of the Commission proposal and simplifies the procedure by providing for a direct duty on the operator to take the necessary measures.

- Article 5(2) corresponds to Article 4(3) of the Commission proposal. Further specification has been added regarding which information should be given and the time-frame for doing so.

- Article 5(3) is new and sets out the various powers of the competent authority notably in relation to the operator concerned.

- Article 5(4) corresponds to Article 4(4) of the Commission proposal to the extent that it provides for the competent authority to require the operator to take the necessary measures. It also reflects but with a substantially different content Article 6(1) of the Commission proposal to the extent that it provides that the competent authority may take the measures itself in those cases where Article 6(1) provided that Member States had to ensure that these measures were taken.

Article 6 - Remedial action

- Article 6(1) builds on paragraphs 1 and 3 of Article 5 of the Commission proposal and simplifies the procedure by providing for a direct duty on the operator to take the necessary action. The operator is also required to inform the competent authority. In addition to the remedial measures to be taken in accordance with Article 7 (Article 6(1)(b)), the operator must also take immediate steps to limit or to prevent further environmental damage (Article 6(1)(a)).

- Article 6(2) is new and sets out the various powers of the competent authority notably in relation to the operator concerned.

- Article 6(3) corresponds to Article 5(2) of the Commission proposal to the extent that it provides for the competent authority to require the operator to take the necessary measures. It also reflects but with a substantially different content Article 6(1) of the Commission proposal to the extent that, when there is no operator to remedy the damage, the Common Position simply provides that the competent authority may take the measures itself while the Commission proposal required Member States to ensure that those measures were taken.

Article 7 - Determination of remedial measures

- Article 7(1) is new and clarifies the role of the operator concerned in the first phase of the remedying process in the context of a new duty on him resulting from Article 6(1)(b).

- Article 7(2) builds on Article 5(3) and sections 3.2.4. and 3.2.6. of Annex II to the Commission proposal. It clarifies the respective roles of the competent authorities and the operator concerned.

- Article 7(3) corresponds to Article 5(4) of the Commission proposal.

- Article 7(4) builds on section 3.2.5. of Annex II to the Commission proposal. It now also covers the persons referred to in Article 12(1).

Article 8 - Prevention and remediation costs

- Article 8(1) makes explicit what was implicit in the Commission proposal, i.e. that the operator concerned is to bear the costs.

- Article 8(2) corresponds to Article 7 of the Commission proposal. No separate mention is made any longer of assessment costs (see Article 7(2) of the Commission proposal) since these are part of the general concept of costs as defined in Article 2(1)(16) and are therefore covered by the general provision of Article 8(2). The second subparagraph of Article 8(2) is new and enables the competent authority not to recover the costs fully in certain cases.

- Article 8(3) corresponds to Article 9(3) of the Commission proposal. Article 8(3)(b) now specifies that an operator is not exonerated from paying the costs when the compulsory order from the public authority has been prompted by an emission from or incident caused by the operator's activity. A new provision has been added to enable operators to recover the costs incurred when, for example, it would appear later that a third party caused the damage.

- Article 8(4) replaces Articles 9(1)(c) and (d) and (2) of the Commission proposal and provides that Member States may allow the operator not to bear the costs in two types of situation which can be succinctly described as follows: when the damaging emission or event is expressly authorised under Community law or was not considered likely to cause environmental damage according to the state of scientific and technical knowledge.

- Article 8(5) corresponds to Article 6(2) of the Commission proposal.

Article 9 - Cost allocation in cases of multiple party causation

Article 9, which replaces Article 11 of the Commission proposal, leaves entirely to national law the apportionment of liability in cases of multiple party causation. No provision similar to Article 11(2) has thus been maintained.

Article 10 - Limitation period for recovery of costs

Article 10 corresponds to Article 12 of the Commission proposal. It is now provided that the 5-year time-period starts from the date on which the measures have been completed or the liable operator has been identified, whichever is the later.

Article 11 - Competent authority

- Article 11(1) corresponds to the first subparagraph of Article 13(1) of the Commission proposal. The second subparagraph of Article 13(1) has been deleted since it was deemed unnecessary.

- Article 11(2) corresponds to Article 13(2) and (3) second subparagraph of the Commission proposal. The first subparagraph of Article 13(3) has been deleted.

- Article 11(3) corresponds to Article 13(4) of the Commission proposal.

- Article 11(4) corresponds to Article 13(5) of the Commission proposal.

Article 12 - Request for action

- Article 12(1), which replaces Article 14(1) of the Commission proposal, does not refer any longer to the concept of "qualified entities" as defined in Article 2, but defines itself the persons entitled to lodge a request for action. The new wording is inspired by the UN/ECE Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters ("the Aarhus Convention"). Express reference is made to non-governmental organisations promoting environmental protection. The procedure also allows now for a request for action to be lodged in case of imminent threat of damage.

- Article 12(2) corresponds in substance to Article 14(2) of the Commission proposal except in that it requires in all cases that the request for action be accompanied by supporting information.

- Article 12(3) corresponds to Article 14(3) and (4) of the Commission proposal.

- Article 12(4) replaces Article 14(5) and (6) of the Commission proposal. It simplifies the procedure in that there are no longer two different steps before an applicant under Article 12(1) is entitled to avail himself of the review procedures under Article 13.

- Article 12(5) is new and allows Member States to adapt the procedures set out in paragraphs 1 to 4 to cases of imminent threat of damage.

Article 13 - Review procedures

- Article 13(1) corresponds to Article 15(1) of the Commission proposal.

- Article 13(2) corresponds to Article 15(2) of the Commission proposal. It now also refers to national law regulating access to justice to enable Member States ensuring a wider access to justice than that required under Article 13 to be able to maintain these provisions.

Article 14 - Financial security

- Article 14(1) builds on Article 16 of the Commission proposal.

- Article 14(2) is new and provides that the Commission shall report on the effectiveness of the Directive, the availability and conditions of financial security and submit, if appropriate, proposals for mandatory financial security.

Article 15 - Co-operation between Member States

- Article 15(1) builds on Article 17 of the Commission proposal. It now expressly states that exchanging information makes part of the overall co-operation this provision requires from Member States.

- Article 15(2) is new and makes mandatory the provision of information when damage has occurred. Although the wording is not entirely explicit, the rationale seems to be that the Member State in whose territory the damage originates must take the initiative to inform the potentially affected Member States.

- Article 15(3) is new and covers the situation where one Member State is affected by a damage originating in another Member State.

Article 16 - Relationship with national law

Article 16 corresponds to Article 18 of the Commission proposal. Article 16(1) has been amended as consequential change to Article 9.

Article 17 - Temporal application

- Article 17 first and second indents correspond in substance to Article 19(1) of the Commission proposal. Paragraphs 2 and 3 of Article 19 have been deleted.

- The third indent of Article 17 is new and complements Article 10 on time-limitation for recovering the costs by setting a time limit after which no action at all can be taken against an operator under the future Directive. This enhances legal certainty while the time limit provided (30 years) is long enough to cover environmental damage resulting from long term pollution.

Article 18 - Reports and review

- The first two paragraphs of Article 18 correspond in substance to Article 20 of the Commission proposal except for the further specification introduced therein on the time-frame set for Member States and the Commission to submit their respective reports.

- Article 18(3) is new and specifies four points, concerning international conventions, genetically modified organisms (GMOs), protected species and natural habitats, and new instruments to be covered, which must be reviewed by the Commission and included in its report.

Article 19 - Implementation

The Common Position now sets the time-frame for implementation by Member States to three years.

Annex I - Criteria referred to in Article 2(1)(1)(a)

This Annex is new and sets out the criteria according to which significant adverse changes to the baseline condition should be determined.

Annex II - Remedying of environmental damage

- This Annex corresponds to Annex II to the Commission proposal.

- The remediation objectives for damage to water and protected species and natural habitats are now clearly distinguished from those concerning land damage. Several points have been redrafted to make them clearer.

- Parts of the relevant definitions are now in the Annex.

- The expressions "complementary remediation" and "compensatory remediation" are now used instead of "compensatory restoration" to better distinguish the two concepts.

- Additional criteria to be taken into account when evaluating remedial options have been included in section 1.3.1.

- A new section has been added reflecting the proportionality principle (section 1.3.3).

Annex III - Activities referred to in Article 3(1)

This Annex corresponds to Annex I to the Commission proposal. Various entries have been redrafted to identify better or specify further the operations, emissions and products to be covered by the future Directive.

Annexes IV and V - International agreements referred to in Articles 4(2) and 4(4)

These Annexes are new and incorporate the lists of international agreements listed in Articles 3(3) and 3(4) of the Commission proposal.

Annex VI - Information and data referred to in Article 18(1)

This Annex corresponds to Annex III of the Commission proposal. Its content has been simplified to enable Member States to collect the required data and information more efficiently.

Provisions that have been either deleted or substantially altered in the Common Position

In addition to those provisions of the Commission proposal which have been mentioned earlier as having been either merged with others or totally or partially deleted, the following provisions of the Commission proposal have been deleted by the Council in the Common Position:

Article 6(1): this provision required that, where no operator can be held liable or an operator is liable but unable to pay, Member States must find an alternative source of financing the measures in question. The Council considered such a requirement as being too strict and preferred to leave full discretion to competent authorities in deciding whether environmental damage should be remedied or not in the above-mentioned cases (see Articles 5(4) and 6(3) of the Common Position).

Article 9(4): this provision aimed at providing a specific regime for insolvency practitioners. It was deemed unnecessary as dealing with a subject - the personal liability of insolvency practitioners - which falls rather under the remit of national legislation.

Article 10: this provision aimed at clarifying that certain expenses would always fall on operators independently of their potential liability under the future Directive. It was deemed superfluous since stating the obvious.

3.3. European Parliament's amendments at first reading

At its Plenary Session of 14 May 2003, the European Parliament adopted 58 [2] amendments. Ten amendments have been accepted by the Commission in full (Amendments 2, 6, 21, 47, 53, 60, 65, 66, 94 and 97), three in part (Amendments 3, 91 and 95), two in principle (Amendments 34 and 100), and eleven in part and in principle (Amendments 17, 23, 35, 44, 52, 85, 90, 93, 99, 101 and 107). The remaining amendments could not be accepted (that is, Amendments 5, 7 to 14, 16, 18, 19, 22, 27, 32, 33, 36, 38, 41, 43, 54, 55, 72, 74, 76, 86, 96, 103, 106 and 108). As to Amendment 108, this amendment was only partially adopted by the European Parliament on 14 May 2003. The full Amendment 108 was acceptable in part and in principle by the Commission but the part of Amendment 108, which was finally adopted, is not acceptable.

[2] This number is equal to 48 if one counts the following amendments - as they are grouped by Parliament - as forming in each case one unity: [93, 94, 23, 90, 95, 96 and 97]; [85, 99] and [86, 103 and 38].

In total, 34 of these amendments (Amendments 2, 3, 7, 10, 14, 16, 18, 21, 23, 32, 36, 38, 41, 44, 47, 52, 63, 65, 66, 72, 74, 85, 86, 90, 91, 93, 94, 95, 97, 99, 100, 101, 103 and 107) have been incorporated in the Common Position fully, in part or in principle.

The remaining 23 [3] amendments (Amendments 5, 6, 8, 9, 11, 12, 13, 17, 19, 22, 27, 33, 34, 35, 43, 53, 54, 55, 60, 76, 96 [4], 106 and 108) were not incorporated in the Common Position.

[3] It is to be noted that there will only be 22 amendments instead of 23 if one follows the approach referred to in footnote 2. (See also footnote 4.)

[4] It is to be noted that, if one follows the approach referred to in footnote 2, Amendment 96 is not to be considered in isolation but as part of the group [93, 94, 23, 90, 95, 96 and 97], which, as such, has been incorporated in part and in principle in the Common Position.

3.3.1. Parliamentary amendments accepted by the Commission fully, partly or in principle and incorporated in the Common Position fully, partly or in principle.

Amendment 2: the last sentence of Recital 1 is a reformulation of the last part of the amendment; no figure is given on the estimated number of contaminated sites since this estimation is likely to be further refined in the future when new information is available.

Amendment 3: Recital 2 incorporates a reference to sustainable development while no mention is made of limiting liability since liability is in principle unlimited.

Amendment 21: Recital 31 contains a reference to "future risks to the environment" but the time-frame for reviewing the functioning of the Directive is longer (seven years instead of five years).

Amendments 93, 94, 23, 90, 95 and 97 concern a number of definitions set out in Article 2(1), that is to say, the definitions of "biodiversity", "conservation status", "damage", "operator", "land contamination", "qualified entities", "restoration", "biodiversity damage" and "value". Biodiversity has been renamed "protected species and natural habitats" and is broader, as wished by Parliament in its amendment, than in the Commission proposal because of the inclusion of migratory birds species (and even though the inclusion of national sites is now optional). The definition of "conservation status" now incorporates a reference to the favourable conservation status of the habitats and species concerned, as requested by Parliament. The definition of "damage" has been maintained. The definition of "operator" has been amended in such a way that the first part of the corresponding amendment has been incorporated. There is no longer any separate definition of "land contamination": it has been merged with the definition of "land damage"; no reference is made to "radiation". There is no longer any definition of "qualified entities" further to changes brought to Article 12. Part of the definition of "restoration" is now in Annex II where it has been renamed "compensatory remediation". The definition of "biodiversity damage", which has been renamed "damage to protected species and natural habitats", incorporates to a certain extent Parliament's amendment on this definition since it refers directly to significant adverse effects on maintaining or reaching favourable conservation status and it covers indirectly (through the new definition of "protected species and natural habitats") migratory birds. The definition of "value" has been deleted, as requested by Parliament. For the sake of completeness, it should be mentioned that Amendment 96, which has not been accepted by the Commission, has not been incorporated in the Common Position since the word "radiation" has not been added in the definition of "land damage".

Amendments 85 and 99: the definition, in Article 3, of the scope in terms of activities covered remains unchanged. Damaging incidents regulated by one of the international conventions referred to in Article 4(2) will only be excluded from the scope of the future Directive if the relevant convention is in force in the Member State concerned, as required by Parliament.

Amendment 100 has been in substance fully incorporated into Article 5 except on one point: Article 5(4) provides that the competent authority must require the operator to take the necessary measures but it does not require that the competent authority must take the measures itself where no operator is liable.

Amendment 101 has been in substance incorporated into Articles 6 except on one point: Article 6(3) provides that the competent authority must require the operator to take the necessary measures but it does not require that the competent authority must take the measures itself where no operator is liable. Parts of the amendment on the co-operation of the operator and the need to take risk to human health into account are also reflected in Articles 7(2) and 7(3) second subparagraph.

Amendment 91: the thrust of Parliament's amendment seems to be reflected in Article 8(4), dealing with "Prevention and remediation costs", which provides that Member States may allow the operator not to bear the costs when the damaging emission or event is expressly authorised under Community law (Article 8(4)(a)) or was not considered likely to cause environmental damage according to the state of scientific and technical knowledge (Article 8(4)(b)). Article 8(4) replaces Article 9(1)(c) and (d) of the Commission proposal, which were "exceptions". One should also bear in mind the difference in wording between paragraphs 3 and 4 of Article 8. That said, parts of the amendment on the liability of competent authorities and on the use of an environmental audit and management system by operators have not been incorporated in the Common Position.

Amendment 44: Articles 12(1) and 13(1) are in line with the thrust of this amendment insofar as they allow the operator to avail himself of the review procedures under Article 13. In light of the already wide scope of the review procedures under Article 13, which is inspired by the Aarhus Convention, no reference is made to "appeal".

Amendment 47 is fully reflected in Article 12(2).

Amendment 107: Article 14(1) reflects the last part of the amendment, but no mandatory financial security is provided for.

Amendment 52 is fully reflected in paragraphs 2 and 3 of Article 15.

Amendment 65: the last paragraph of section 1 of Annex II incorporates this amendment.

Amendment 66: the first paragraph of section 2 of Annex II incorporates this amendment.

3.3.2. Parliamentary amendments accepted by the Commission and not incorporated in the Common Position

Amendment 6: no reference is made in the Preamble to the Common Position to the fact that the future Directive is without prejudice to national company law. This omission does not seem to bear any consequence.

Amendment 17: no specific reference is made in the Preamble to the Common Position to the right of the operator to challenge the competent authority's decisions. As explained in relation to Amendment 44, this right is enshrined in Articles 12(1) and 13(1) so that this omission in the Preamble bears no consequence.

Amendment 34: this amendment sought to impose on the Member State in whose territory damage originates to remedy the damage caused to other Member State(s). The Common Position provides no such State liability. This approach is in line with the absence of such liability where damage is entirely confined in the territory of one Member State.

Amendment 35: no specific reference is made to a "clear causal link" in Article 8 since the need to establish a causal link is mentioned in both Articles 4(4) and 11(2).

Amendment 53: Article 16(2) allows - but does not require - Member States to adopt legislation to address double recovery situation. It does not seem that this could have any consequence in practice since, should such a case of double recovery arise while the national legislators have not adopted the necessary measures, national courts will develop the appropriate case-law setting out the principles on double recovery.

Amendment 60: co-incineration is not expressly mentioned among the activities listed in Annex III. This omission bears no consequence since co-incineration will be covered indirectly as one of the waste management operations covered by Directive 2000/76/EC on the incineration of waste.

3.3.3. Parliamentary amendments not accepted by the Commission but incorporated in the Common Position

Amendment 7: the last sentence of Recital 10 now states that only those activities the main purpose of which is to serve national defence are excluded from the scope; this Recital does not convey any longer the impression that, contrary to what Article 4(6) provides, any and all activities linked to national defence are excluded. Reference to the Euratom Treaty and international conventions have not been deleted since this would not be in line with Article 3.

Amendment 10: although in a different context, Recital 13 expressly refers to the need to establish a causal link between the damage and the identified polluter(s).

Amendment 14: this amendment deletes the reference to the possibility for Member States to opt either for joint and several or proportional liability. Recital 22 does not contain this reference any longer.

Amendment 16: this amendment sought deletion of the reference to giving "a special status" to qualified entities. Recital 25 does not make any reference any longer to qualified entities.

Amendment 18: this amendment sought deletion of parts of the recital referring to the necessity for appropriate transitional arrangements where it is not clear whether or not the cause of the damage occurred after that date. Recital 30 does not contain such a reference any longer.

Amendment 32: Article 6(1) incorporates part of this amendment in that it requires the operator to act, without a request to do so by the competent authority, as requested by Parliament. No reference is made to emergency plans, as is the case in the amendment, but it is clear that Article 6(1) also covers this type of situation.

Amendment 36: this amendment sought to require the competent authority to bring cost recovery proceedings against any third person who caused environmental damage. Article 8 does not refer to third parties while Article 10 does.

Amendments 86, 103 and 38: Article 8(4), which belongs to the Article dealing with "Prevention and remediation costs", provides that Member States may allow the operator not to bear the costs when the damaging emission or event is expressly authorised under Community law (Article 8(4)(a)) or was not considered likely to cause environmental damage according to the state of scientific and technical knowledge (Article 8(4)(b)). Article 8(4) replaces Article 9(1)(c) and (d) of the Commission proposal, which were "exceptions". The word "terrorism" has not been added in Article 4(1) on the ground that such an event would either be covered by Article 4(1) as it now stands or by Article 8(3)(a) referring to damage caused by third parties. Nor has the introductory sentence of Article 4(1) been amended since the Common Position does not require Member States to ensure the remedying of damage for which no operator is liable. In this new context, whether Article 4(1) is shaped in terms of exclusion from the scope of the future Directive or in cost relieving terms would make much less difference in practice. No specific exemption for activities in line with good agricultural and forestry practice has been introduced since this type of case falls under Article 8(4)(b).

Amendment 41: Article 9 on cost allocation in cases of multiple party causation is in line with the thrust of this amendment insofar as both the amendment and Article 9 have in common that Member States are responsible for apportioning liability in multiple party causation cases and regulating the right of recourse or contribution.

Amendment 63 is partly reflected in the introductory sentence of Annex II insofar as this sentence clarifies that Annex II is about choosing the most appropriate remedying measures.

Amendment 72: the first paragraph of section 1.2.3 of Annex II entitles the competent authority to choose whichever valuation technique it deems appropriate but only in the specific case when the valuation techniques coming first in line under the Annex cannot be used. To that extent, it reflects in part the thrust of the amendment insofar as the latter meant to minimise resorting to monetary valuation techniques.

Amendment 74: section 1.3.3. of Annex II incorporates the thrust of this amendment insofar as it reflects the proportionality principle.

4. CONCLUSION

The Common Position is inspired to a certain extent by the willingness of the Council to simplify the procedures and clarify the concepts necessary to the good functioning of an environmental liability regime. This approach should ease the implementation of the future Directive by the Member States. The addition of a new Annex I setting out criteria on the basis of which the significance of damage to protected species and habitats should be assessed illustrates this concern. Annex II in the framework of which remedial measures should be determined has also been restructured and reworded to make it more legible and understandable.

If, in certain cases, the Common Position is leaving more discretion to Member States on certain issues, such as in Article 2(1)(3) on the inclusion or not of habitats and species protected under national law or in Article 9 on multiple party causation, the Common Position goes further than the Commission proposal on other points: all migratory birds (see Article 2(1)(3)) are now covered and Article 12 on requests for action now covers, at least in principle, cases of imminent threat of damage. It is now also clarified that international conventions on carrier's liability in the event, inter alia, of marine pollution do not prevail over the future Directive if they are not in force in the Member State concerned.

The Commission is now required to include, in its reports reviewing the functioning of the regime, several questions specifically identified, including the issue of financial security, in order to place all the institutions involved in the decision-making process in a better position as to judge which amendment, if any, is needed to guarantee the effectiveness of the liability regime.

Unlike the Commission proposal, the Common Position does not exclude, from the scope of the future Directive, damage caused by an emission or event expressly allowed and damage caused by emissions or activities which were not considered harmful according to the state of the art of scientific and technical knowledge at the time when the emission was released or the activity took place. However, in such cases, Member States may allow the operator not to bear the costs of remedial actions provided he demonstrates that the damaging event, emission or activity was covered by any of the above-mentioned circumstances and that he was not at fault or negligent (Article 8, paragraph 4).

The point on which the Common Position is most departing from the Commission proposal concerns the issue of "orphan damage", that is those cases in which no operator will remedy environmental damage. The Commission proposal required Member States to find alternative sources of financing; the Common Position now leaves full discretion to Member States to decide to act or not.

Although the Commission would have preferred that stricter conditions had been set regarding the subsidiary remedial action by Member States, it can accept the Common Position in the context of an overall agreement.

The Commission supports therefore the Common Position.

5. COMMISSION STATEMENT

The Commission acknowledges that the definition of land damage offers less harmonised guidance to Member States than the definitions on water damage and damage to protected species and natural habitats. It recognises that the initiatives it intends to take on soil policy, as already stated in its Communications "Developing an action plan for environmental technology" (COM(2003) 131 final of 25.3.2003) and "Towards a Thematic Strategy for Soil Protection" (COM(2002) 179 final of 16.4.2002), would contribute to a more common approach among Member States. The Commission has, therefore, issued the statement attached as Annex III.

ANNEX I Preamble - Correlation table

The recitals of the Common Position correlate with the recitals of the Commission proposal as follows:

>TABLE POSITION>

ANNEX II Articles and Annexes - Correlation table

The Articles of the Common Position correlate with the Articles of the Commission proposal as follows:

>TABLE POSITION>

ANNEX III Commission Statement re soil policy

"The Commission reiterates its willingness to identify in the forthcoming Thematic Strategy for Soil Protection needs and deliverables related to protection and sustainable use of soil. It also recalls that a legislative initiative on soil monitoring has been scheduled for 2004. It should aim to ensure that a number of measurements on the identified threats in the relevant areas are carried out in a harmonised and coherent way."