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Workshop minutes
16 January 2013
Study on implementation challenges and obstacles of the Environmental Liability Directive (ELD) | 1
Workshop Minutes
Project Study on implementation challenges and obstacles of the Environmental
Liability Directive (ELD)
Event Stakeholders Workshop
Date 16 January 2013
Location EC, DG ENV, BU-9, meeting room C
Contact European Commission
Hans Lopatta, [email protected]
BIO Intelligence Service (BIO) – [email protected]
Shailendra Mudgal, [email protected]
Blandine Chenot, [email protected]
Katherine Salès, [email protected]
Stevens & Bolton LLP
Valerie Fogleman, [email protected]
Documents Agenda, presentations and list of attendees are available on:
http://eldimplement.biois.com/
Objectives of the workshop
The objective of this workshop was to present and discuss the interim findings of the project team
and to seek further input from stakeholders, including Member States’ Competent Authorities, legal
experts, industrial stakeholders and NGOs.
The outcome of the workshop should provide feedback on the implementation of the ELD in the
Member States. It will be taken into account and therefore contribute to the final report by
providing further views as to the strengths and weaknesses resulting from implementation of the
ELD.
Key points of the discussion
Introduction
Hans Lopatta (DG ENV) introduced the context and objectives of the study. He reminded the
participants about the objectives of the workshop and the implementation study, namely
investigating the strengths and weaknesses of the ELD in implementation and to look into the
challenges and obstacles in order to identify, analyse, weigh them and to look for possible pathways
for solutions. The study therefore, consisting of a legal and an empirical part, somehow acts as
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2 | Study on implementation challenges and obstacles of the Environmental Liability Directive (ELD)
missing link between two Commission reports, the past one of 2010, where lacking awareness and
information mainly of operators, challenging requirements and new concepts requiring
interpretation, lacking case experience and registers as well as insufficient communication between
stakeholders were found responsible reasons for limited implementation and hence the
impossibility to judge about the ELD's effectiveness, and the future Commission report of 2014
which will not only report about the experience gathered by the Member States in application of the
Directive, but also has to look into relevant review points. He referred to the efforts undertaken by
the Commission so far to tackle the deficiencies in practice and boost the ELD's implementation
through enhanced stakeholder engagement (workshops in 2011 and 2013), information (factsheets
and brochures soon to be available) and training material for operators and competent authorities
(soon to be available).
Blandine Chenot (BIO) briefly presented the main tasks and current state of the project. She further
indicated that all workshop presentations would be available on the project’s webpage
(eldimplement.biois.com).
Session 1: Overview of the practical implementation of the ELD
in selected Member States with a focus on Poland
1.A – State of the art of the practical implementation in the Member States covered by the study (i.e.
Denmark, France, Germany, Hungary, Poland, Spain, United Kingdom), Blandine Chenot (BIO)
Blandine Chenot provided a global overview of the empirical part of the study, which covers seven
Member States, and its legal part covering 15 Member States. She noted that the consultation
process was still ongoing.
She provided a general overview of the application of the ELD in the seven Member States covered
by the empirical part of the study and highlighted certain difficulties encountered in carrying out of
the study, in particular:
BIO was not able to get in contact with all national competent authorities (in
particular when the Member State is a federal State and there is therefore a necessity
to contact competent authorities at a regional level);
Some stakeholders who were consulted had difficulties in determining whether cases
of environmental damage were effectively treated under the national transposiing
legislation of the ELD or not.
The presentation then focused on five Member States out of the seven covered: Denmark, France,
Hungary, Poland, Spain and the UK, and addressed the following point regarding each of these
Member States:
Number of environmental damage cases dealt with under the ELD regime (if any), and
reasons for not treating certain cases under the ELD regime;
Complexity of ELD transposing legislation (e.g. Denmark);
Co-existence of the ELD with pre-existing national legislation.
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The presentation is accessible at the following link:
State of the art of the practical implementation in the Member States covered by the study
1.B – Presentation of the practical implementation of the ELD in Poland, Anna Kozińska (Ministry of
Environment) and Edyta Pomichowska (General Directorate for Environmental Protection)
Anna Kozińska and Edyta Pomichowska presented an overview of the implementation of the ELD
in Poland.
They highlighted the three types of environmental liability (civil, criminal and administrative) in
Poland, indicating that the ELD transposing legislation (Prevention and Remedying of
Environmental Damage Act – EDA) is administrative liability.
They further provided an overview of the competent authorities for ELD implementation, and the
relationship between these authorities. They also described entries in the register of notifications of
actual and imminent threats of, environmental damage.
There are no restrictions on the categories of persons who may provide a notification of an
imminent threat of, or actual, environmental damage in Poland; everyone is entitled to provide a
notification. There is a high number of notifications: in 2009, 275 cases were notified to the
(regional) competent authority (RDOŚ), 96 of which were considered as being well founded; the
figures for 2010 were 364 notifications, of which 91 were viewed as justified by RDOŚ. Between 2007
and 2012, a total of 520 notifications were registered by RDOŚ as ELD cases, of which 302 are closed
and 218 ongoing. In 2012, most of the 70 cases considered as well founded by RDOŚ concerned land
damage (57 cases, against 9 related to biodiversity damage and 3 to water damage). . However, not
all notifications in the register are necessarily ELD cases as the decisions taken by RDOŚ may be
challenged before the General Director for Environmental Protection (GDOŚ) and consequently
could be invalidated if GDOŚ considers that the environmental damage does not fall under the ELD
regime.
Two case studies were then presented as an illustration of the implementation of the ELD in Poland:
The ‘black grouse case’: an imminent threat of, and actual, environmental damage
within a Natura 2000 site (damage to protected habitat and decrease in the number of
individuals in the species), resulting from the construction of a ski lift;
A case of environmental damage to the species and natural habitats of swallows
protected under the Birds Directive.
The presentation concluded by noting that the ELD transposing legislation (EDA) repealed pre-
existing national legislation concerning land contamination, and that every notified incident is
examined as a potential ELD case, the EDA being considered lex specialis in relation to other more
general national legislation.
The presentation is accessible at the following link: Practical implementation of the ELD in Poland
Pierre Sonigo (FERMA) asked whether Poland keeps track of the severity of cases (e.g. through
financial information about the cost of remediation) in the register. The answer was that the register
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does not include such information at present but that Poland is considering the possibility to do so in
the future.
Valerie Fogleman (Stevens & Bolton) asked why there were so many notifications and whether
there was a duty on an operator to notify the incidents. Anna Kozińska and Edyta Pomichowska
indicated that the great number of notifications is mainly due to the actions of NGOs (which are very
active in the field). In addition, every incident that may be covered by the ELD is notified by NGOs or
operators, even if it is small; it is then up to the competent authority to decide whether it is an ELD
case or not. About 60% of all notifications are deemed unjustified by the competent authority. It
was also remarked that although operators have a duty to notify an incident (pursuant to the ELD),
they do not always do so. Hans Lopatta (DG ENV) further remarked, summarising the main issues
raised, that under application of the ELD in Poland, everything is notified first and everyone can
notify. In addition, given that the pre-existing national legislation concerning land contamination in
this field was repealed, there is no competition between the ELD transposing legislation and this
pre-existing national legislation (as is the case in many other Member States).
Finally, Magdalena Bar (Jendroska Jerzmanski Bar & Partners) agreed that the high number of
cases in Poland is due notably to the activity of environmental NGOs. She also clarified to the
project team that the extent of the repeal of legislation by the ELD transposing legislation; that is,
the repeal concerns the regime for remediating contaminated land. General legislation that imposes
liability on a “user of the environment” for a “negative impact on the environment” has not been
repealed (although in cases where both these provisions and provisions transposing ELD would
apply in parallel, the transposing provisions have precedence); neither has legislation on preventing
and remediating damage in Natura 2000 sites. She also pointed out that the ELD is the most
effective tool for remediating biodiversity damage.
1.C – Presentation of the practical implementation of the ELD in Germany, Andrea Eberlein (IESAR)
Andrea Eberlein presented her research project on “Environmental liability and biodiversity” in
Germany, by focusing on the practical implementation of the ELD regarding biodiversity damage
cases and its impacts on sectors such as agriculture and forestry. She is working on user-friendly
guidelines for the general public and specific sectors. The presentation made reference to empirical
studies carried out in 2009 and 2011 in half of the 16 German Länder. The research indicates that
most biodiversity damage cases mentioned in response to the questionnaires were handled under
pre-existing national legislation (often the Nature Conservation Act, in particular section 14 on
compensation for the impairment of ecosystems). Typical cases of biodiversity damage concern
construction works, maintenance works or cultivation.
She emphasised the following points regarding application of the ELD to biodiversity damage cases:
Environmental authorities are unfamiliar in dealing with the ELD, they prefer to
handle biodiversity cases under pre-existing law;
There is a different perception of the severity threshold: the ELD is considered to have
a more severe standard than that under the Nature Conservation Act; and
There is a lack of available data on the application of the ELD.
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The presentation is accessible at the following link: Practical implementation of the ELD in Germany
Magdalena Bar (Jendroska Jerzmanski Bar & Partners) asked whether the cases that could have
been treated under the ELD (as identified in the project) and which were treated under the Nature
Conservation Act should have been treated under the ELD. Andrea Eberlein stated that they should
have been because liability for compensatory remediation exists under the ELD but not under the
Nature Conservation Act. An additional question addressed the issue of fulfilling the criteria for
biodiversity damage and notably the links and coherence between the provisions of the ELD and
relevant provisions of the Habitats Directive. Hans Lopatta (DG ENV) indicated that if natural
habitats listed in the Habitats Directive, but which are not part of a Natura 2000 site, are affected by
environmental damage, they satisfy the criteria for biodiversity damage under the ELD. He further
stated that this issue has been considered by the Commission (notably in the ELD experts meeting).
Cornelia Voets (German nature conservation authority) pointed out that, in addition to the type of
activities mentioned in the presentation which resulted in biodiversity damage, much damage also
resulted from biogas plants. She mentioned one case of environmental damage from a biogas plant
that occurred in 2012.
Elisabeth Abrassart (Assurpol) referred to the indication in the presentation of three cases that
were reported to have been handled under the ELD. Andrea Eberlein responded that more cases
are not treated under the ELD because e.g. competent authorities do not always know about the
ELD or they do not want to handle a case under the ELD because they consider that the pre-existing
legislation has a higher standard than the ELD legislation.
Matthias Weigand (Bavarian State Ministry of Environment) requested an explanation regarding
the conclusion that there should be more cases of implementation of the ELD, with which he
disagrees. He pointed at article 1 of the Environmental Damage Act that transposed the ELD into
German law providing that this Act is subsidiary to all pre-existing law in Germany, which
guarantees the same or a better standard than that under the ELD. Andrea Eberlein indicated that
the ELD filled gaps in pre-existing legislation. Hans Lopatta (DG ENV) further commented that
insofar as the existing German legislation would have fully covered the ELD, Germany would have
officially notified the existing legislation because it would have amounted to a transposition of the
ELD (i.e. transposition of the ELD would not have been required because it was already included in
the existing legislation, and duplication is not necessary). So apparently even the German
Government was of this opinion and has fully transposed the ELD.
Rodrigo Diaz (Willis) referred to the issue of destruction of habitats in the ELD cases mentioned in
the presentation and asked whether, if compensatory remediation measures applied, such
measures had been implemented. Andrea Eberlein agreed to provide him with further information
on this topic after the workshop.
Nils Hellberg (German Insurance Association) indicated that there are several ELD cases in
Germany for which insurance companies have paid remediation costs. He remarked that the main
problem in finding out the actual number of ELD cases is the potential to count, not only pure cases
that fall under the ELD, but also cases in which, for example, also personal injury or property
damage (which is not covered by the ELD) has occurred. He mentioned that the German Insurance
Association has a list of about 100 cases that have been reported by member companies, pointing
out that the Association has to rely on the reports of member companies, which are sometimes
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reluctant to give too many details, such as the name of the operator. José Luis Heras Herraiz (Pool
Español de Riesgos) stated that he did agree that information such as the names of operators
should be withheld by the companies, but he indicated that the law must be applied and relevant
environmental data divulged by the environmental authorities. Chris Clarke (University College
London) however pointed out that if cases are not brought to court, there is no obligation to make
the information publicly available. He further stated that voluntary settlements/responses should be
one of the main objectives of any environmental liability regime for it to be effective. Hans Lopatta
(DG ENV) indicated that under the ELD, notification is mandatory; although a voluntary settlement
complying with all ELD requirements might be the best scenario, the competent authority would
still need to be notified and to take a decision.
Barbara Goldsmith (Ad-Hoc Industry – Natural Resource Management Group) made the point
that to facilitate early and voluntary action on the part of operators, it would be important for
incentives to be in place, such that, if a company took voluntary actions, those actions would be
credited against future liability relative to the incident.
Session 2: Integrating the ELD transposition legislation into the
existing national legal frameworks, and consequences for its
implementation
2.A – Integrating the ELD into existing national legal frameworks; can the ELD and the transposing
legislation achieve the prevention and remediation objectives?, by Valerie Fogleman (Stevens & Bolton
LLP)
Valerie Fogleman’s presentation focused on the legal part of the study, namely the analysis of the
transposition of the ELD by Member States (15 covered). Her analysis included a legal analysis from
a law and economics perspective as well as a broader analysis focusing on whether the
implementation of the ELD has been effective across the EU. She reviewed existing Member States’
administrative environmental liability legislation, notably pre-existing liability systems for water,
waste, land and environmental regulatory regimes; she concluded that there is not as much pre-
existing legislation for the remediation of biodiversity damage (having earlier recalled that part of
the reason for the ELD is to assist in halting biodiversity loss). She finally highlighted variations, both
procedural and substantive, in transposing legislation between Member States.
Procedural variations include: (i) transposition of the ELD as stand-alone legislation or incorporation
into pre-existing legislation, (ii) designation of one or more competent authorities, (iii) number of
liability systems resulting from transposition (federal, devolved governments -UK- or unitary
systems), and (iv) publication of guidance and other documentation. As for substantive variations,
Valerie Fogleman enumerated the following, among others:
Optional ELD provisions that specifically envisage differences in national ELD
regimes, including: adoption of permit and state-of-the-art defences, extension of
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biodiversity protection to nationally protected biodiversity, and mandatory financial
security requirements;
ELD provisions providing for application of national law, which include: definition of
‘operator’, scope of liability (joint and several vs. proportionate liability), and scope of
‘sufficient interest’ for interested parties;
Adoption of more stringent provisions (e.g. addition of secondarily liable parties or
right to bring an action against the operator);
Application of national law concepts, regarding for instance the level of causation, or
variations between Member States relating to security over property or other
guarantees;
Imprecise language in the ELD that raises questions, such as whether defences are
defences to costs or to liability, or regarding the threshold for water damage (i.e.
damage to waters or water bodies, under the Water Framework Directive) or the
threshold for favourable conservation status of protected species (what ‘natural
range’ to take into account? EU? National? Regional?), or whether the competent
authorities have a power or a duty to require an operator to carry out preventive
measures;
Additional provisions in national legislation to fill gaps in the ELD, including:
establishment of registers or databases of ELD incidents, adoption of sanctions for
breaches of transposing legislation, mandatory grant of access to third-party property
to investigate the damage or carry out measures, and publication of enforcement and
implementation information.
In her preliminary findings and conclusions, Valerie Fogleman notably found that the transposition
of the ELD did not create a level playing field, as the transposition has resulted in a widely varying
patchwork of liability systems across the EU. She also indicated that implementation and
enforcement of the ELD appear ineffective in many, if not most, Member States, and also pointed
out key issues that remained to be resolved and which have been identified as substantive
variations, in particular regarding severity thresholds and clarification of imprecise language in the
ELD.
The presentation is available at the following link: Integrating the ELD into existing national legal
frameworks
Nils Hellberg (German Insurance Association) disagreed with the conclusion that there is not a
level playing field. He indicated that one must keep in mind that the ELD is a framework directive
and, as such, it achieved a level playing field related to the minimal standards of the ELD. He also
disagreed that implementation of ELD transposing legislation is ineffective. In this respect, he
considered that the question should be whether cases exist that could not be resolved under
national law. If the reason for that is to be found at EU level, then it could indeed be decided to
change the ELD, but if the reason is to be found at the national level, then it should be dealt with
only at that level. On the issue of the level playing field, Valerie Fogleman commented that she had
stated the conclusion given by applying the law and economics approach to the issue, as had been
reported by commentators in this field. She further stated, however, that as a result of her research
she does not personally consider that the ELD has created a level playing field across the EU. As to
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8 | Study on implementation challenges and obstacles of the Environmental Liability Directive (ELD)
the second issue, i.e. whether national legislation can meet the same requirements as those under
the ELD, she stated that the vast majority of Member States did not have national legislation that
imposed liability for compensatory remediation for water and biodiversity damage. Therefore,
national legislation could not be more stringent than the ELD in this respect. In Nils Hellberg’s view,
and from an insurance perspective, the results of remediation measures are what counts, not the
law that is applied.
Barbara Goldsmith (Ad-Hoc Industry – Natural Resource Management Group) cautioned that
emerging data of ELD effectiveness must be gathered over a sufficient timeframe, be adequately
representative, evidence-based and calibrated before proposing changes or amendments to the
ELD based on such information. As an analogy, she mentioned that the US Superfund program,
which has been in place for over 30 years, has only been modified once and this was done only
following many years of review and analysis regarding its implementation. She also pointed out that
many companies currently operate at a very high standard, often in excess of actual regulatory
requirements. Valerie Fogleman responded that although the US Superfund was enacted in 1980, it
did not work well for six years; it was only after it had been amended in 1986 that it began to be
effective. She also stated that she does not think that Member States will change their transposing
legislation to make the ELD’s requirements more stringent: she gave the example of the
Netherlands, where it would be considered to be gold-plating and therefore not allowed. If the ELD
is to be made more effective, therefore, it is necessary to look to the Commission. In respect of more
companies having more stringent standards, she pointed out that the ELD is a liability regime and
not a regulatory regime and that it does not appear likely that companies will offer to remediate
environmental damage to more stringent standards than the standards in the ELD.
Edward Lockhart-Mummery (Defra) considered that it was important, when talking about numbers
of cases to make a distinction between land damage on one hand and biodiversity and water
damage on the other. For land damage, the threshold is low and remediation standard low. For
water and biodiversity damage the high threshold is high and remediation standard high. The
expectation was always that there would be very few cases of biodiversity and water damage with
significant additional remediation. These should always show up as ELD cases because the ELD
remediation standard goes beyond anything Member States had in pre-existing legislation. For land
damage, in contrast, there could potentially be many cases but these may not show up as ELD cases
where Member States already had legislation with equivalent remediation standards. Valerie
Fogleman agreed, in particular as concerns water damage, noting that many Member States use
national water legislation which does not always include compensatory remediation and also that
some Member States regard the threshold for water damage under the ELD to be damage to waters
under the Water Framework Directive whereas others regard it as being damage to water bodies
under the Water Framework Directive. As to biodiversity damage, she commented that neither the
ELD nor the Habitats Directive specifies the applicable severity threshold for the favourable
conservation status of a protected species because neither of them specifies the scale to be applied,
that is, whether the range for the favourable conservation status of a protected species is regional,
national or EU.
Hans Lopatta (DG ENV) noted that the finding regarding the threshold for water damage (i.e.
damage to water or water bodies) needs further investigation. As to the issue of supposedly unclear
wording of the ELD regarding whether defences are defences to costs or liability (as indicated in
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Valerie Fogleman’s presentation), he commented that the ELD was sufficiently clear and referred
only to defences to costs.
José Luis Heras Herraiz (Pool Español de Riesgos) made a few additional comments. He first
affirmed that the duty to remedy is based on the baseline condition rather than on the severity
threshold, to which Valerie Fogleman agreed but noted that there was no need to remediate to
baseline condition if the threshold was not met, to which he agreed. He then stated that he
considered that joint and several liability goes in some ways against the polluter-pays principle.
Valerie Fogleman stated that, in her opinion such liability is, however, all that really works as a
practical matter, as shown by the large number of Member States that have adopted it albeit in
some cases with reticence to do so. She also highlighted, together with Hans Lopatta, that joint and
several liability is also a tool which gets all relevant parties to the negotiating table. They both also
commented on the equitable criteria that are generally taken into account in proportioning liability
for environmental damage when joint and several liability applies. Finally, José Luis Heras Herraiz
indicated that although it is true that financial and security instruments lead to some additional
costs, if the tools are well applied and proportionate to the risk created, additional cost should be
minor compared with the risk transfer achieved..
2.B – Co-existence of the ELD regime and other environmental liability regime, by Birgit Schmidhuber
(Justice & Environment)
Birgit Schmidhuber presented a comparative study, carried out by Justice & Environment, on
environmental liability regimes and how they interact with ELD legislation in six EU Member States.
The presentation focused on three Member States (Austria, Estonia and the Czech Republic),
although the actual study is broader as regards the Member States covered.
Regarding Austria, she highlighted the issue of water damage, indicating that the scope of the pre-
existing national legislation (Water Management Act – WMA) is much broader than the ELD and has
a stricter regime, although it is not innovative as the ELD regime is, because it does not provide for
public participation and access to justice, and methodology for detailed remediation and
reimbursement rules. No ELD cases have been reported thus far.
In Estonia, the ELD was transposed by the Environmental Liability Act (ELA), but there are also
many national sectoral liability provisions (water, etc.). The general liability regime is fault-based (as
liability provisions derive mainly from civil law). Administrative (strict) liability is exceptional in this
respect. Nine environmental liability cases (including sole ELD assessments) have been reported.
As to the Czech Republic, it was highlighted that the pre-existing national Law on Environment has a
broad definition of biodiversity damage, and does not include a specific severity threshold. The
system lacks of practical application.
The presentation is available at the following link: Co-existence of the ELD regime and other
environmental liability regime
Hans Lopatta (DG ENV) commented on one of the presentation’s finding, namely that maybe it
would be better for the ELD regime to be more closely integrated into the national liability systems,
in order to ensure that its innovative elements come into effect. He considered this a very important
finding. Birgit Schmidhuber concurred, stating that unfortunately the ELD does not fit very well
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into existing systems which may be based on different principles and differ from one Member State
to the other.
Chris Clarke (University College London) commented that he was surprised by the Estonian entry,
indicating that, according to his knowledge, it seemed unlikely that the authorities would have to
prove fault to enforce an administrative decision. He nevertheless conceded that things might be
different depending on whether it is a civil or administrative matter.
Session 3: Main obstacles, challenges and benefits linked to the
ELD implementation
3.A – Strengths and weaknesses identified at the time of the adoption of the ELD and experience gained
until now, by Ludwig Krämer (ClientEarth)
Ludwig Krämer referred to the ELD from a historical perspective. He reminded the audience that
the ELD is not a framework Directive and was not conceived as such. He stated that one of the
objectives of the ELD was to create a level playing field and thus ensure a high level of
environmental protection as required by TFEU article 191. However, certain Member States (e.g. the
UK, the Netherlands and Austria) had made clear that they would not engage in any gold-plating,
and therefore would not go beyond the minimal requirements that would be included in the
Directive.
For Ludwig Krämer, two-thirds of the problems related to the ELD are due to the drafting of the
legislation, and not to its implementation.
He identified the strengths of the ELD at the time of its adoption as being as follows:
Member States were happy when the Directive was adopted because they did not
need to deal with it any more;
Environmental organisations obtained the possibility to influence administrative
behaviour (although the provisions are weak). He referred to the situation in Poland
(see presentation above); and
No supplementary defence regarding good agricultural practice was included despite
extensive discussions as to whether it should be included.
He further identified weaknesses of the ELD:
The Commission tried to model the ELD a little on the US Superfund model, by
notably including a reference to orphan damage which competent authorities would
be required to remediate if the operator did not do so. Member States could not agree
to including such a provision, and this obligation was ultimately not included in the
Directive;
In all 27 Member States, protection of the environment rests mainly with the
administration: he therefore raised the question of who controls the administration
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(giving as an example golf courses authorised by competent authorities in Spain in
protected natural habitats);
There is certain imprecise wording in the Directive regarding remediation and the
cleanup of contaminated soil;
Ensuring a high level of environmental protection is the task of European institutions,
not Member States;
The permit defence was considerably enlarged for reasons of protecting vested
interests;
The issue of ‘diffuse pollution’ was part of the discussion, but Member States
considered that pollution from urban agglomerations should not be covered because
the cost would be too high. Consequently, liability for remediation does not apply to
diffuse pollution.
Regarding the activities listed in Annex III to the ELD, Ludwig Krämer noted the following:
Most of these activities are activities subject to the Industrial Emissions Directive; but
90% of economic activities are carried out by small to medium size companies and do
not fall under Annex III. The Commission identified this problem when the proposal for
the ELD was made. Ludwig Krämer is in favour of deleting the list of activities in
Annex III; and
The structure of the ELD shows that it applies to environmental accidents and not
environmental deterioration. This must therefore be considered as a limitation which
does not do justice to the environment, especially because the environment is mainly
suffering from slow, progressive degradation experienced on a daily basis.
The experience from 2004 to 2012 has shown that the apprehension that existed in 2004 has come
true and that business is going on as usual despite the ELD. Most of the problems that we now face
with the ELD were foreseeable.
Carmen Bell (Insurance Europe) asked two questions regarding (i) the EU environmental liability
regime being established by a directive vs. a regulation, with the result that Member States have
some sort of competence over how the legislation is administered in their countries, and (ii) when
speaking of liability and remediation, having the ELD focus on liability can be valuable; so the ELD
can also have the effect of preventing environmental disasters (if the operators know that they may
face liability). Regarding the issue of directive vs. regulation, Ludwig Krämer stated that the
subsidiarity clause of the EU Treaty (whenever possible, directives should be preferred over
regulations), although in the environmental sector regulations are only really used, either when
industries want a regulation (e.g. REACH, or biocides legislation with the need for uniform
legislation) or when international agreements are integrated into EU law. He considered that
Member States would probably not accept regulations in other areas, such as water, where they
would invoke the subsidiarity principle. As to the second question, he agreed that the ELD must
focus on prevention, noting that the preventive part is included in the ELD where it provides that the
operator should take measures to prevent an imminent threat of environmental damage; it is
therefore limited to the issue of imminent threat. He stated that he would be in favour of the
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Directive being enlarged, nonetheless noting that the preventive aspect was not a question of
liability.
José Luis Hera Herraiz (Pool Español de Riesgos) concurred with Ludwig Krämer’s statement
regarding prevention and liability, adding that the ELD should not include requirements for
operators to take preventive measures unless there is an imminent threat of environmental damage,
as there are preventive laws (e.g. IPPC) which should provide for measures to be taken to avoid
accidents and damage. Once damage is caused, the ELD should be efficient in addressing the issue
of remediation. If prevention must be improved, then other laws (rather than the ELD) should be
modified.
3.B – General presentation of the strengths and weaknesses and obstacles to the ELD implementation
taken from practical cases, by Blandine Chenot (BIO)
Blandine Chenot followed up on Valerie Fogleman’s legal analysis and Ludwig Krämer’s
presentation, as she made a general presentation of the various strengths, weaknesses and
obstacles to the implementation of the ELD which have been highlighted by practical cases studied
by the project team and the on-going stakeholder consultation.
The interviewed stakeholders acknowledged some strengths of the ELD. Firstly, the ELD allows a
straightforward and relatively quick process to deal with environmental damage and provides clarity
as to the requirements on relevant parties. As concerns responsibilities, in general, the ELD regime
has a stronger power of fulfilment of responsibilities compared to pre-existing national
environmental legislation. In particular, the ELD regime is considered by some competent
authorities to be powerful in determining shared responsibilities when several liable parties are
involved. Moreover, the ELD regime allows fostering the adoption of preventive measures and
presents a value added in determining remedial actions. In some cases, stakeholders reported that
the ELD regime fills a gap in the case of a lack of robustness of the pre-existing environmental
legislative framework or represents a robust alternative to a patchwork of many pre-existing
legislations addressing many issues. Finally, the transposition of the ELD into national legislation
has contributed to an increase in the awareness of operators of the environmental risks of their
activities and of insurers to tackle this issue and develop policies to provide cover for ELD liabilities.
The weaknesses and obstacles which were commented by the interviewed stakeholders deal mainly
with:
Severity threshold: In general, the severity threshold set by the ELD is often seen as a
major obstacle to its application. On the one hand, the thresholds regarding land and
water damage are considered to be too high by several experts. On the other hand,
establishing that the threshold has been met, might be difficult. The difficulty is
particularly challenging for damage to water and biodiversity where the damage
significance can be difficult to establish.
Scope of the ELD: Another difficulty results from the broad but non-exhaustive scope
of the ELD. For instance, all activities that could generate environmental damage are
not included in Annex III of the ELD.
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Expertise and knowledge: Several public practitioners of the ELD stated that they are
not familiar with the ELD and when it is feasible, they prefer to apply the pre-existing
regime. The lack of data at local and regional levels to determine the status of the
baseline before water or biodiversity damage occurred and the lack of material to
collect and analyse evidence of environmental damage are additional difficulties.
Finally, the authorities in charge of determining whether environmental damage has
occurred do not always have the necessary expertise within their staff. They generally
need to be supported by external experts to assess the damage.
Organisation/governance: In the case of damage to water, application of the national
ELD transposing legislation generally results in a lengthy process to determine
whether environmental damage has been caused. Moreover, at the stage of notifying
environmental damage, in some Member States, there is a lack of engagement of
stakeholders (i.e. NGOs, operators or competent authorities).
Resources: In some Member States, administrative authorities do not have enough
resources to investigate all the cases that are reported to them.
Tools: Tools to support the implementation of the ELD regime, such as guidance
documents for operators, competent authorities, NGOs, civil society and insurers, are
not developed in all Member States.
Level of co-operation between stakeholders: With co-operative party(ies), the
process from the notification of the case to its resolution will be shorter and easier.
However, cases in which operators do not demonstrate a high level of co-operation
have occurred.
Legislative environment: Discrepancies between the ELD regime and pre-existing
legal framework and possible overlap of the ELD with existing legislation result in obstacles
to apply the ELD. A lack of coherence between the ELD regime and other Directives (e.g.
Water Framework and Habitats Directives) is also reported by stakeholders.
Political environment: Discrepancies have been identified in the level of involvement
of the public authorities in environmental issues.
Economic and financial environment: The economic environment can play a key role
in dealing with environmental issues as a priority. Presently, the impacts of the
economic crisis are leading public and private actors to consider the environment as a
secondary issue in some Member States.
The presentation is available at the following link: General presentation of the strengths and
weaknesses and obstacles to the ELD implementation taken from practical cases
The following comments were made following Blandine Chenot’s presentation.
Pierre Sonigo (FERMA) indicated that he did not agree with one of the weaknesses listed in the
presentation, namely the “lack of development of financial security instruments”. He stated that this
may be true but only for a minority of Member States. In many Member States, adequate financial
security instruments exist. Rodrigo Dias (Willis) raised doubts about the relationship between the
development of financial instruments and the implementation ELD: does it mean that the more
developed the financial instruments the more the ELD will be implemented? Hans Lopatta (DG
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ENV) commented that the way financial instruments are developed is good, but they need to be
taken up by operators who are liable under the ELD. It is important that operators who are liable
under the ELD have sufficient financial cover in case of environmental damage. He noted, however,
that there was still, regarding this issue, a big gap in many Member States. According to José Luis
Hera Herraiz (Pool Español de Riesgos), insurance companies have difficulties selling ELD
coverage to their clients who do not assess the risk, as they do not see the ELD being applied
(commenting on the lack of ELD cases in some Member States). It is therefore not a problem of the
lack of development of financial instruments, but a problem of the ELD being applied. Hans Lopatta
(DG ENV) added however that it is a two-way process: insurance coverage would be taken up more
if the awareness of operators was higher, but it is also crucial for operators to take out insurance for
ELD liabilities that there be strict enforcement of the ELD.
For Alfonso Urquijo (Willis), it is very important that the governments of all Member States know
the available capacity of insurance companies, whether EU companies or non-EU companies (such
as US companies): large insurance companies have very good products to cover environmental
liability, which may include things that are not even included in environmental liability under the
ELD.
Ece Ozdemiroglu (EFTEC) pointed out that there is a difference of level of awareness among
stakeholders. She noted that competent authorities have a different level of understanding of the
ELD (e.g. central government level vs. a regional level), and indicated that it is therefore important,
in the study, to list the stakeholders from which information was obtained (e.g. the job titles and
organisation). She also highlighted the fact that certain issues, such as assessing the damage or
determining the remediation options, may be complex for e.g. administrators, but simpler for
scientists. Finally, she recommended that the target audience should be borne in mind for
everything that is produced in relation to the ELD, saying that sometimes ‘the wrong people are
having the wrong discussion’ (she cited the REMEDE project for people who know what damage
assessment is about). Barbara Goldsmith (Ad-Hoc Industry – Natural Resource Management
Group) reinforced that BIOIS should qualify responses from its surveys according to job function and
level, as well as other factors. The best practices information that has been developed by the Ad-
Hoc Industry Natural Resource Management Group and others needs to be given time to be
implemented and, in some cases re-tooled, but it holds much promise in helping to emphasize the
similarities versus differences in implementation throughout the EU. An important component will
be to educate and train operators, competent authorities and others and document and analyse
actual case experience so that changes, if any, reflect actual needs and can be shown to result in
improvements. It is not likely that a full data set to define those needs will be available for quite
some time.
Cornelia Voets (German nature conservation authority) referred to the point in the presentation
regarding the difficulty in demonstrating that the severity threshold of the ELD is met. With regards
to biodiversity damage, she noted that, in her opinion, Annex I is too complex and too difficult for
authorities to understand. She commented that in Germany, there were many discussions on how
to use Annex I to the ELD and they now have three different approaches on how to assess the
severity of the damage. Following a detailed look at Annex I, it appeared that it was quite difficult
for biologists and other participants to decide on the criteria and parameters which must be used, as
it is a mix of criteria and parameters. They tried to develop a method to assess the severity and
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some difficulties arose with some words (e.g. regional or higher level) and other aspects. She
therefore indicated that it may be relevant to review Annex I and to try to clarify what is meant so
that the severity of the damage might be more easily assessed. In answer to a query from Hans
Lopatta (DG ENV), Cornelia Voets added that she had looked only at the severity threshold for
biodiversity damage and not water damage, and had not considered the issue of eliminating the
severity threshold. However, in her opinion, the severity threshold is not such a problem as
biologists know when damage is severe: it depends on the kind of case. It would therefore be useful
to know what criteria are really mandatory and what criteria may be used depending on the case.
3.C – Conditions for ELD application (illustrated by the French Coussouls de Crau case, by Katherine
Salès (BIO)
Katherine Salès illustrated the difficulties that may arise regarding conditions for the application of
the ELD through a presentation of a case regarding an incident that occurred in the Coussouls de
Crau nature reserve in Southern France, which resulted in environmental damage as a consequence
of an oil spill following the rupture of an underground pipeline.
The Coussouls de Crau case highlighted the following points:
There is a gap in the scope of the ELD as its Annex III (activities subject to strict
liability) does not cover transport of dangerous substances by pipeline (an activity that
is not covered by the Seveso Directive either);
Cooperation of the operator is key to ensuring remediation of the environmental
damage; and
Remedial measures imposed under a pre-existing national regime may result in the
same outcome as if the ELD regime had been applied.
The presentation is available at the following link: Conditions for ELD application: illustration with
the Coussouls de Crau case (France)
Hans Lopatta (DG ENV) concurred that this case is an example of best practice in a Member State,
in view notably of the strong cooperation between all stakeholders to ensure remediation of the
site, which achieved one of the objectives of the ELD regarding the ‘cooperation spirit’. It also
provides evidence for gaps and problems in the Directive.
For Chris Clarke (University College London), the issue with the Coussouls de Crau was not so
much that there is a gap in the scope of the ELD, but rather that there is no EU legislation on
pipelines on which to base the addition of that activity to Annex III.
Pierre Sonigo (FERMA) asked whether the operator in the Coussouls de Crau case had insurance
cover, to which Katherine Salès and Valerie Fogleman replied that it did.
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3.D – Difficulties in meeting the severity threshold (illustrated by a case of water damage), by Caroline
Fielder (Environment Agency for England and Wales)
Caroline Fielder illustrated the difficulties encountered in deciding when the severity threshold for
water damage in England and Wales was met (in particular, ‘environmental damage to surface
water’ and ‘environmental damage to groundwater’), through the study of one ELD case: Three
Pools waterway in which there was a discharge of raw sewage effluent from a pumping station into
the waterway, leading to over 6,000 fish being killed.
In this case it was clear that the threshold for water damage had been reached – (i) the spill
affected a 5-km stretch of a 17-km water body, (ii) there was good quality of data before and after
the incident, so the baseline condition was known and (iii) there was a clear drop in status in light of
the applicable Water Framework Directive provisions.
Caroline Fielder also gave examples of cases that did not meet the environmental damage
threshold under the ELD. She said that most cases that did not meet the threshold were clear-cut.
For some of them, this was linked to the fact that pollutants rapidly dispersed naturally in water
(rapid dilution, i.e. natural remediation without the need for additional remedial measures) or that
the geographical extent of the impact was limited. A few other cases were more ‘borderline’.
In these ‘non-ELD’ cases, the polluter was still liable to remedy the damage under other
national legislation, but there was no requirement for compensatory remediation.
The issue of ongoing damage, i.e. resulting from an incident or accident that took place before the
ELD became applicable, was also raised.
The presentation is available at the following link: Environmental Liability Directive: Meeting the
threshold of 'water damage'
Amélie Mauroux (MEDDE-CGDD) referred to the Three Pools waterway case and wondered if the
equivalency methods were used to assess the losses and to scale the remediation plans, and how the
final solution was selected. According to Caroline Fielder, external consultants were engaged to
help the competent authority with the economic analysis: they came up with five or six options, and
the final criterion used to decide on the option to apply was the effectiveness of the proposed
measures.
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Session 4: Potential solutions for an effective implementation
of the ELD
Potential solutions for an effective implementation of the ELD, Ludwig Krämer (ClientEarth)
Ludwig Krämer listed a number of potential solutions, which were later discussed with the
participants to the workshop. These potential solutions were as follows:
Application of the ELD (in particular its Annex III) should not be limited to specific
activities or to large companies;
It is necessary to eliminate a lot of the options in the ELD;
Mandatory financial guarantees should not be introduced because prudent companies
will have it in any case;
It is necessary to work on the issue of biodiversity damage. This does not have to be
done in the Directive itself: the court(s) could be the arbiter of what damage to
biodiversity is;
There should be an obligation for the administration in Member States to prevent and
remedy environmental damage (there is so far practically no such obligation in the
ELD). This obligation should be linked to the right of civil society to ask for
remediation, and the administration should justify its decision if it denies it; and
There should be a more precise priority in the ELD: the first issue should be that of
environmental restoration; operators, whether small, medium or large, should not be
able to buy themselves free (i.e. ‘pay’ for compensation).
Chris Clarke (University College London) commented that he agreed with one of Ludwig Krämer’s
earlier points, that the greater weakness is not the implementation of the ELD, but the ELD itself.
He said that some of the provisions that were left out of the ELD in order to reach a compromise and
get it adopted, were precisely what would give rise to more cases. That, he argued, raised the issue
of who would support measures to generate more ELD cases given the nature of the discussions
that led up to the adoption of the Directive. He pointed out that the compromises made at that time
had led to gaps and ambiguous terms in the ELD, noting in particular that the Annex III list comes
from civil, not administrative, law as does the statute of limitations. In the opinion of Ludwig
Krämer, more cases are needed for the sake of the environment: he illustrated this point by
reminding the audience that 65% of Natura 2000 habitats are in unfavourable conservation status. It
would be necessary to identify cases where land, water or biodiversity are affected, but which are
not dealt with under the ELD regime, as he considers that pre-existing legislation, even in Germany,
is not more stringent than the ELD.
Hans Lopatta (DG ENV) reaffirmed that just improving the implementation of the ELD as it exists
so far, and without speaking of possible future amendments, would also improve the effectiveness
of the Directive. The potential to improve implementation in many Member States is there.
However, Chris Clarke (University College London) argued that in many cases it was better to
apply national laws, because they often included more stringent enforcement powers, such as : no
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18 | Study on implementation challenges and obstacles of the Environmental Liability Directive (ELD)
specified defences; retroactive application to historic damage; a wider list of responsible parties;
courts more familiar with their provisions; a lower threshold of actionable harm; etc.
Implementation of the ELD is important in many countries where it filled a gap (e.g. Poland), but
there are many Member States where the ELD is considerably weaker than pre-existing national
legislation in certain respects, although not on compensatory remediation (which was largely,
although not completely, absent). In his view, the national and EU regimes should be enforced in a
complementary way, reinforcing each other.
Final discussion
Guiding questions were sent to the participants prior to the workshop, and are included in the
background documents. The final discussion aimed therefore at expressing new views, summarising
or detailing certain views previously expressed, and addressing these guiding questions.
Tuire Taina (Ministry of the Environment – Finland) commented that Finland is using the criteria
established to assess the severity threshold. She notably referred to the criteria found in the Water
Framework and Habitats Directives. She pointed out that whether the criteria set out in the Water
Framework and Habitats Directives are used in connection with the ELD does not change the fact
that the same criteria will be used in the implementation of the Water Framework and Habitats
Directives by the experts on those fields to assess the state of waters and biodiversity. She indicated
that it would be a deplorable result if the outcome of the discussion on the ELD severity threshold
would result in the criteria set out in these Directives being considered too difficult, when the Finnish
competent authorities are using them. Ways of making better use of the existing criteria should be
found rather than finding new criteria that are not connected to the other existing directives. Hans
Lopatta (DG ENV) appreciated this information from Finland but nevertheless considered that
more consideration is necessary as regards the severity threshold in the ELD, from reviewing the
criteria up to the most radical solution to just eliminate the requirement for the severity threshold.
Matthias Sauer (Federal Ministry for the Environment, Nature Conservation and Nuclear Safety
– Germany) commented that the notion of ‘significant’ damage is not new to the ELD, but may be
found under other Directives, such as the Water Framework, Birds and Habitats Directives. In his
opinion, the same answers should be given under the ELD and the other relevant Directives, with
regards to ‘significant’. He added that if there is a need to be clearer on what ‘significant’ means in
relation for instance to habitats, it should be discussed between the habitats experts because they
would know best what nature needs. Hans Lopatta (DG ENV) stated that the various Directives
cited are different Directives with different objectives, even though there is a link between them,
adding that the ‘significant’ criterion always poses a problem, whether in the ELD or in other
Directives.
On another matter, Matthias Sauer also pointed out that all references to other legislation in the
ELD need to be updated, which he considers would be a step forward in making the ELD more
effective.
Ece Ozdemiroglu (EFTEC) commented that it is imperative to keep the severity threshold in the
Directive, because for example you cannot really decide what is proportionate remediation (or
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proportionate or disproportionate cost) if you do not know what the benefit of remediation would
be, and you cannot know what this benefit would be if you do not know whether the damage was
worth remediating. The proportionate cost argument is therefore not enough on its own to decide
how the case should be decided; it is a question of cost-benefit analysis. Without a severity
threshold, the ELD will apply to everything, which cannot be proportionate.
Anja Sinke (BP) remarked on certain choices of words, which show a very pessimistic and/or
negative view and do not necessarily ‘win the industry over’, in particular if the objective is to
incentivise companies to act preventively (she pointed out that many are doing voluntary
remediation). Blandine Chenot (BIO) indicated that this perception may be due to a language issue,
but she also pointed out that words used had been those used by certain competent authorities
although she agreed that some of the words may be considered to be harsh towards certain
industries or Member States.
Chris Clarke (University College London) concurred that voluntary initiatives exist and that an
enormous amount of work is going on behind the scenes, and that it should be included in
representations on this issue. He reaffirmed that the real question is how well the environment is
protected, taking the view that it is not the methods that matter but the outcome. He also
reiterated an opinion previously expressed during the workshop that the lack of ELD cases (e.g. in
France) reduced or removed the incentive to buy insurance against such a risk.
Alfonso Urquijo (Willis) noted that the premium for insurance policies to cover liabilities under the
ELD is low, only €3,000 per year in some cases. He recalled the philosophy behind the ELD, the issue
being how the ELD has to co-exist with the pre-existing laws of the Member States. He noted that it
is difficult to establish conditions that are equal in all countries and referred to civil, criminal and
administrative liability systems. Valerie Fogleman (Stevens & Bolton LLP) remarked that civil and
criminal liability systems do not allow for remediation of the environment, but that only
administrative liability fulfills this role. Hans Lopatta (DG ENV) concurred that remediation of
environmental damage is only ensured under administrative liability.
Emmanuel Katrakis (EUROMINES) expressed his surprise to hear that one of the identified
obstacles concerning the implementation of the ELD was a lack of awareness about the ELD regime,
as in the mining sector, operators are usually much aware of the EDL.
Concluding remarks
Hans Lopatta (DG ENV) thanked the participants for the constructive discussions. He summarised
briefly the core points of the presentations of the day and informed the participants that the draft
final report of the implementation study, once submitted by BIO, will be circulated among
environmental experts to give them the opportunity to comment on it.