UK: BLG Environment and Health & Safety-EU Developments-Spring 2004

Last Updated: 24 June 2004
Article by Valerie Fogleman and John Goodman

ENVIRONMENTAL LIABILITY. On 27 February, the Council of the European Union and the European Parliament reached agreement on the Directive on environmental liability.

The Directive will enter into force when it is formally adopted by the Council and the Parliament, probably during April. In its second reading of the Directive on 15 December 2003, following the Council’s common position (see the Winter and Autumn 2003 Digests), the European Parliament had made four amendments, the most significant relating to financial security.

The Directive, which must be transposed into domestic law within three years after it enters into effect, that is, probably by April 2007, will impose liability for preventing and remedying environmental damage, that is, damage to land, water and protected species and natural 6 Barlow Lyde & Gilbert BLG habitats. The operators of specified occupational activities that cause damage will be strictly liable. The operators of occupational activities that are not specified will be liable for remedying damage to protected species and natural habitats if they are negligent or otherwise at fault. If more than one operator causes environmental damage, a Member State may allocate costs between them according to domestic law.

The Directive contains exceptions for acts of war and acts of God. In addition, it contains defences for: environmental damage that was caused by a third party despite appropriate safety measures having been in place; and compliance with a compulsory order from a public authority.

Provided that the operator shows that it was not at fault or negligent, the Directive also includes defences where: the operator was in compliance with a specified permit; or emissions or activities that were not considered likely to cause environmental damage according to the state of scientific and technical knowledge when the emission or activity occurred.

Non-governmental organisations will have the right to request a competent authority to take action under the Directive and bring an action for review of the procedural and substantive legality of a competent authority’s decisions, acts and omissions under the Directive.

The Directive does not authorise actions for property damage or bodily injury. It does not require Member States to prevent or remedy environmental damage in the event that an operator cannot pay for it or is not liable. Instead, a Member State has discretion whether to prevent or remedy the damage.

The final major issue to be resolved during Conciliation concerned financial security. The Directive does not impose mandatory financial security. Instead, Member States are to take measures to encourage the development of financial security instruments. The European Commission will review the availability of insurance for environmental damage and other types of financial security instruments six years after the Directive enters into effect, that is, probably in April 2010. The Commission’s report will consider a gradual approach to financial security, a ceiling for financial guarantees and the exclusion of low risk activities. In the light of its report, the Commission may submit proposals for a system of harmonised mandatory financial security.

DEFINITION OF WASTE. On 15 January, in Saetti and Frediani (C-235/02), the European Court of Justice ("ECJ") decided that petroleum coke, produced as a result of the refinery of crude oil, was not waste within the meaning of the Waste Framework Directive (75/442/EEC).

In this case, an Italian oil refinery produced petroleum coke as a result of the refinery process. The coke was then used as fuel for the refinery’s combined steam and electricity power station. The power station produced electricity surplus to the needs of the refinery. The excess electricity was sold on to third parties. When criminal proceedings arose due to the failure of the refinery to acquire an administrative permit for the management of waste as required by the Italian law that implements the Waste Framework Directive, the ECJ was asked to consider whether the petroleum coke was in fact waste.

In light of the fact that the petroleum coke was produced intentionally or in the course of producing other petroleum fuels in the oil refinery for use as a fuel and that it was certain that the coke would be used in its entirety for the production of electricity for use in the refinery and/or by third parties, the ECJ ruled that it could not rightly be considered to be waste.

WEEE. On 8 December, Directive 2003/108/EC came into force amending Article 9 of Directive 2002/96/EC (the waste electrical and electric equipment ("WEEE") Directive).

A review by the Commission of the existing wording of Article 9 of the WEEE Directive found that the take back obligation for WEEE put on the market in the past creates a retroactive liability for which no provision was made and which is likely to expose certain producers to serious economic risks.

In order to prevent such risks, Article 9 has been amended so that the financial responsibility for the collection, treatment, reuse, recovery and recycling of WEEE from users other than private households put on the market before 13 August 2005 is borne by producers when supplying new products replacing products of equivalent type or fulfilling the same functions. Where WEEE is not replaced by new products, the responsibility should be borne by those users. Member States, producers and users have the possibility of making alternative arrangements. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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