EC environmental liability directive: Questions and answers

What is the aim of this directive?

The basic principle is: Anyone that causes damage to the environment has to pay to have it cleaned up. This polluter-pays principle will ensure that society as a whole no longer has to bear the costs of public law claims, as has so often been the case in the past. In addition, measures to prevent environmental damage are to be stepped up. Civil liability claims for damages will remain unaffected by the directive.

When will the directive start taking effect?

The directive came into force on 30 April 2004 with its publication in the Official Journal of the European Union. All EU member states have to translate the directive into national law by 30 April 2007.

To what extent does environmental damage have to be remediated?

Land, for example, must be decontaminated until it no longer poses any significant risk to human health. In the case of protected species, natural habitats or waters, the damaged resource must be restored to its original state. If this is no longer possible, another area can be ecologically upgraded instead. At any event, remedial measures must definitely compensate for the loss. For example, damage to 100 valuable old trees could be compensated for by the planting of 1,000 new ones.

Who is liable?

Companies which conduct potentially hazardous activities in connection with their business are basically liable regardless of fault. This strict liability includes certain industrial activities, the transportation of dangerous products, the handling of hazardous substances, waste management operations, plant protection products and genetically modified organisms (GMOs).

In the case of GMOs, the producer is also liable. Anyone involved professionally with less hazardous activities is only liable on a fault basis, i.e. in the case of intent or negligence. Genetically modified maize: In the case of environmental damage, the producer is also liable.

How much will implementation of the directive cost?

The Commission puts the costs for the EU at less than €1.5bn, including expenditures by responsible authorities and liable parties. That is 1.5% less than the EU's annual expenditure on environmental protection.

What does the directive mean for the insurance industry?

There will not be any mandatory insurance to start with. However, the Commission will be submitting a report to the European Parliament and the European Council in 2010 about the general availability of suitable insurance products. Following this, it will be decided whether the directive needs to be amended to introduce mandatory insurance in all states.

Is there any environmental damage that does not come under this directive?

The directive does not apply in the case of force majeure. Nor does it include nuclear damage, maritime oil disasters and cumulative damage such as forest decline.

Damage to protected species or natural habitats caused by officially authorised infrastructure projects (such as motorway construction) are not regarded as environmental damage for the purposes of the directive, provided that the authority has taken the damage into account in the course of its official authorisation.

It is also at the discretion of each national legislator to exempt companies from the costs of remedying damage which has occurred during approved normal operations. The prerequisite for this, however, is that a company can prove that the damage was not occasioned through fault. The same applies to activities where environmental damage was not foreseeable on the basis of scientific and technical knowledge at the time.