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24th Sep 2020

Member states vary in EU 'polluter pays' rules

  • Water pollution is included in the environmental liability directive, but some experts say there are too many loopholes (Photo: European Court of Auditors)

The polluter should pay, that is the simple principle underpinning the environmental liability directive.

But the legal text is riddled with loopholes and is not being implemented uniformly across the EU. This emerged at a hearing in the European Parliament on Tuesday (11 April).

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  • Hungarian MEP Javor: It is, "in some member states, cheaper to pollute the environment" than in others (Photo: European Commission)

The directive went into force thirteen years ago this month, and member states were required to transpose it into national law a decade ago. However, it was not until mid-2010 that all EU members had done so.

Moreover, the environmental liability directive (ELD) has left a lot of room for interpretation, said Sandra Cassotta, associate professor of international environmental law at Denmark's Aalborg University.

"The text of the ELD is a result of different compromises at political level, and the text of the ELD is very diplomatic," said Cassotta, who noted that the definition of what constitutes environmental damage is too narrow.

At the same time, the directive contains exceptions that "are weakening the environmental liability regime", she said.

Kristel de Smedt is also an expert on liability in environmental damage at Maastricht University.

At the hearing, she showed that there is also no uniformity in the requirements for companies to insure themselves against the possibility of paying for damaging the environment.

The directive says that EU governments "shall take measures to encourage the development of financial security instruments and markets by the appropriate economic and financial operators", but according to De Smedt, this is too vague.

“The ELD does not specify the kind and or intensity of the required encouragement,” said De Smedt.

"Eight member states did set up mandatory financial security schemes at national level, other member states preferred voluntary market approach."

A consequence of companies not being insured against having to pay for environmental clean-ups, means that taxpayers may end up footing the bill.

The lack of uniformity is hindering a level-playing field, said Green Hungarian MEP Benedek Javor. He noted that there is a "complete patchwork" in terms of insurance requirements.

“This makes [it], in some member states, cheaper to pollute the environment, because you don't have to pay the obligatory or mandatory environmental insurances, than in other member states and it raises some competition law problems for me," said Javor.

There was some discussion at the hearing as to whether a directly applicable regulation would have been better, instead of a directive, which needs to be transposed by member states.

Marco Piredda spoke on behalf of an industry group. He said that the directive should be "given more time", but also noted that "companies are in favour of greater harmonisation".

"A regulation is something that would make us happy because it would give us very clear rules," said Piredda.

Air quality

The bill only covers environmental damage to protected species, natural habitats, water, and land.

It does not include air pollution, as was found out the hard way by the members of the parliament's inquiry committee into the Dieselgate emissions scandal.

The committee had asked the EU commission whether the ELD could be used to make car manufacturers pay for the reduction in air quality that results from diesel cars emitting far beyond the EU limits.

The commission assessed the option, but found that it was not possible.

"Regrettably the analysis showed that the directive only covers damage to biodiversity, water and land, and not to air or human health," wrote the environment director-general, Daniel Calleja Crespo, to the parliament last year.

But despite Calleja's use of the word "regrettably", the commission has still made no attempt to change this.

After an evaluation as part of the commissions' Regulatory Fitness and Performance Programme (Refit), the EU's executive decided last year that the directive does not need to be changed.

"The Refit evaluation indicated that the environmental liability directive may be reaching only a small part of its potential to prevent environmental damage and remedy it when it occurs," said Liam Cashman, a senior legal expert at the commission's directorate-general for the environment.

Yet the commission decided that it would take a soft approach and adopt non-legislative measures to nudge member states towards making better use of the directive.

"The evaluation suggested that without changing the directive, several positive actions could be undertaken to improve how it is used," said the commission's Cashman.

After EUobserver asked if the commission would like to include air quality in the directive, Cashman chose to ignore the question.

He did later say that the commission does not "exclude the possibility that at some point we might consider it would be useful to propose changes to the directive".

MEP Javor said he wants air quality to be covered by the ELD, and called its omission "one of the major shortcomings".

"We are arguing for including air quality and air pollution into the scope of ELD, but that is not an easy issue. We experience quite strong resistance," said Javor, a member of the Greens, the sixth-largest group in the EU parliament.

Javor has written a draft opinion on behalf of the parliament's environment committee about the implementation of the directive.

Once adopted by his committee, the Javor text, like Tuesday's debate, would feed into the development of a resolution by the parliament's legal affairs committee.

That text would then go on to the plenary, although it's legal power would be non-binding.

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