News 06 Dec, 2007

EU Environmental Liability Directive

POLLUTION - EU ENVIRONMENTAL LIABILITY DIRECTIVE

Members should note that the European Union’s Environmental Liability Directive is beginning to enter into force across European states. The full text of the Directive can be found by clicking here.

The Directive is expressly grounded in the ‘polluter pays’ principle and sets out a broad framework for the restoration by a polluter of environmental damage caused to natural species and habitats, to water resources and to land. Who constitutes the responsible party - deemed an “operator” – is determined against a broad definition contained in Article 2(6).

In the event of damage, the polluter will be required to identify and fund measures necessary to return the affected area to its pre-incident condition. These measures must be approved by the ‘competent authority’, i.e. in all likelihood the State in which the spill occurred, though non-governmental organisations have the right to report alleged environmental damage and demand action by the competent authority.

The polluter must in addition compensate for the loss of the natural resource in the period it takes to recover to its baseline condition.  It is clear that the EU Commission have leant heavily on OPA `90 in the United States in framing the legislation.

However, Article 4(2) stipulates that it shall not apply to environmental damage arising from an incident governed by an IMO Convention that is in force in that Member State.  In practice, the Directive will consequently have no affect on oil spills covered by the CLC and Fund Conventions but will apply to incidents involving the spillage or threatened spillage of bunkers and hazardous substances unless and until the Bunker Convention and the HNS Convention respectively enter into force. The European Community Shipowners’ Associations (ECSA) is therefore writing to all EU Member States encouraging ratification of those conventions.

Environmental damage caused by war and by natural phenomena “of exceptional, inevitable and irresistible character” is also exempt.

The Directive allows shipowners to continue to limit their liability in accordance with the 1976 LLMC Convention, where in force.  Since neither Italy nor Portugal are signatories to either the 1976 LLMC Convention or the 1996 Protocol, ECSA is also writing to those two States encouraging ratification of the 1976 LLMC Convention as soon as possible. 

There are no compulsory insurance provisions in the Directive, but under Article 14(2) the EU Commission must undertake a review before April 2010 as to the effectiveness of the Directive, including whether a system of mandatory financial security is required.

There is a time bar of five years for recovery by the competent authority of costs and expenses it has incurred.

All EU Member States were required to have enacted the terms of the Directive into their national law by 30th April, 2007.  As of November 2007, however, the following States have adopted the Directive:

Germany
Italy
Latvia
Lithuania
Sweden
Romania
Hungary
Spain

Poland, Belgium, Czech Republic have implemented in part but not in full.