This article is authored by Ganesh Nair J and Jakkula Hilda who are pursuing BA LLB at University College of law [ Osmania University].
BACKGROUND OF ENVIRONMENTAL LIABILITY:
The environment is very crucial for a healthy living. Different countries used a variety of legal instruments to remedy environmental harm, one of those being Environmental Liability. This mechanism was probably first developed in the United States of America. Later, this mechanism became increasingly used by European states. In the year 1976, an industrial accident took place in Seveso in Italy[1]. This industrial disaster led Europe towards implementing environmental liability..
Environmental liability is an instrument by which the cost of damaging the environment is placed on the persons who are responsible for causing the damage. This environmental liability directive is provided for companies, industries and all other economic operators, who are usually the operators on whom ELD obligations are imposed. The competent authorities will look after the implementation and enforcement of ELD. They will also be in charge of assessing the significance of damage and determining the remedial measures that are to be taken in co-operation with the liable operator.
This liability creates economic incentives to prevent environmental harm and paves a way for the polluters to compensate when any harm occurs to the environment. For example, when a person purchases an industrial machine that is likely to cause air or water pollution, the buyer must conduct an environmental assignment to look into the types of environmental liability associated with the asset being purchased. Environmental liability refers to environmental duty and expenses that an economic player will incur when establishing a new development or purchasing an asset.
MEANING OF OPERATOR:
Operator is a natural or legal, private or public person who operates, controls or manages the damaging occupational activity or where this is provided in national legislation, to whom decisive economic power is delegated over the technical functioning of such an activity, including the holder of a permit or authorization for such an activity or the person registering or notifying such an activity.
PURPOSE OF ENVIRONMENTAL LIABILITY:
The purpose of environmental liability directives is to establish a mechanism of environmental liability, based on the “Polluter-Pay” principle, to prevent and remedy environmental damage.
PRINCIPLE OF POLLUTER PAY:
The concept of environmental liability is based on the polluter pay principle which says that the polluter must be made liable for the cost of cleaning up pollution caused by him, for economic costs that pollution caused to others and their property and purchasing of consents to discharge pollution. Hence, environmental liability makes the polluter pay for the damage that has been caused by him to the environment.
CIVIL, ADMINISTRATIVE OR CRIMINAL LIABILITY:
- CIVIL:
Environmental pollution often has no individual victim that could file a civil liability suit. The remedy in private law would limit the harm done. Though a suit regarding environmental harm can be filed under civil law, the tort is only forced to compensate the victim for the amount of damage suffered and no more.
- ADMINISTRATIVE:
Administrative fines can be imposed but the optimal fine is higher than the ability to pay. This leads to non-monetary sanctions such as imprisonment.
- CRIMINAL:
Traditionally criminal law was imposed as an instrument to enforce environmental regulations. But, later it was said that the enforcement system should involve less reliance on criminal law and greater use of administrative penalties. This is because violations of environmental regulation are often committed not by an individual, but by persons acting on behalf of a company, industry, firm, etc.
DUTY AND FINANCIAL RESPONSIBILTY OF OPERATOR:
DUTY:
When environmental damage has not yet occurred but if there is a possibility of an imminent threat of such damage that may occur, the operator must take necessary preventive measures and, in certain cases, inform the competent authority about the situation without delay and as soon as possible.
FINANCIAL RESPONSIBILITY:
- The operator is financially responsible to pay for necessary preventive measures which he thinks fit or entrusts as specialized undertaking to be taken on his behalf .
- When a competent authority acts itself or through a specialized undertaking, in the place of the liable operator, that authority shall initiate cost recovery proceedings against the operator who is liable.
FINANCIAL SECURITY:
Few occupational activities like, mining, hazardous waste generators, waste cyclers, metal finishers, chemical manufactures have no adequate funding to pay for the cost required for cleaning up of contamination caused. If the operators do not cover their liabilities with financial security instruments, there is a risk that the remediation measures may not work. Limited liability is considered as the backbone of corporate law, industrial law and other laws. But, it also causes serious risk of externalization of harm specially to tort victims such as environment.
The solution is not to search for a remedy in corporate or any other law, but to directly solve the problem of insolvency risk by imposing mandatory solvency guarantees on the operator in order to meet their environmental liability. This solution is needed because, when there is no availability of financial securities, it can lead to under-compensation. According to many studies, huge industrial disasters left operators unable to cover the cost of liability. Some states have introduced a system of mandatory financial security which includes ELD related insurance products like environmental liability insurance.. Environmental liability could be jeopardized to the extent that operators are not able to meet their obligations. Hence, the operators can use the financial guarantees to cover their responsibility. One of the instrument to overcome this problem of financial security is environmental liability insurance. By taking this insurance the operator will be able to meet his obligation regarding environmental liability.
GOAL OF ENVIRONMENTAL LIABILITY:
There are two goals that environmental liability has to serve. They are:
- It should provide incentives for the prevention of environmental harm to the operators.
- It should lead to remediation of environmental harm,that is compensation to victims and clean-up of pollution caused.
ACCESS TO JUSTICE AND IT’S HINDRANCES:
- Private suit in environmental liability is often not brought due to damage to each individual is too small sometimes that no one has sufficient incentives to bring a law suit due to high cost aversion. This problem can be solved through third party funding of litigation, NGO’s, conditional fee, legal expenses insurance, etc. This is the remedy to file a private suit in environmental liability.
- There is a barrier to access justice due to wide-spread of environmental harm as a result of which there may not be one individual victim to bring a suit.
- Time lapse between emission and damage is another hindrance to access justice in case of environmental liability.
- The high cost of the legal system is another hindrance which is a barrier to justice in environmental cases.
EXCEPTIONAL CASES IN ENVIRONMENTAL LABILITY:
Environmental liability regime is not applicable where environmental damage is caused by armed conflicts, civil war, natural phenomenon, nuclear damage, national defense activities, pollution by sea-going ships, etc. Environmental liability does not apply even when an event authorized by the operator is fully in accordance with rules, regulations and conditions as prescribed by the country’s environmental laws.
TRANSBOUNDARY DAMAGE :
In cases where environmental harm is likely to affect several member states, those member states shall cooperate by exchange of all the information regarding the incident with a view to ensure preventive action and remedial action when necessary in respect of any damage. One programme that looks after trans-boundary environmental damage is Basel Convention on the control of trans-boundary movements of hazardous waste and their disposal, 1989.
INTERNATIONAL ENVIRONMENTAL LAW DISPUTES AND JUDICIAL REMEDIES:
The disputes between states regarding environmental law or specifically environmental harm can be heard in the International Court of Justice (ICJ). The disputes regarding environmental protection between states and non-state actors such as individuals, corporations and communities can be heard in international human rights courts. There are also many bilateral and multilateral environmental treaties which help different countries regarding international environmental disputes. The UN environmental assembly is the UN body opened on June 23rd, 2014 at United Nations environmental programmes (UNEP) headquarters in Nairobi. UNEP creates different programmes on environmental conservation and sustainability. It has universal membership of 193 UN member states and other stakeholders groups.
CASE LAWS:
A.TRAIL SMELTER ARBITRATION[2]:
This is a landmark trans-boundary pollution case in the history of environmental law. In this case, in the territory of the USA there was some damage due to Sulfur dioxide fumes emitted from a smelter situated in Canada. The court in this case held that no state has a right to use or permit the use of its territory in such a manner which can cause injury by fumes to the territory of another person. Accordingly, the trail smelter was refrained from causing any damage through fumes and the tribunal determined the environmental damages through market value approach and the trail smelter was orders to compensate for the loss caused.
B.DEEPWATER HORIZON OIL SPILL[3]:
The British petroleum (BP) oil spills on April 20, 2010 was a huge industrial disaster. When the deepwater horizon drilling rig on the Gulf of Mexico exploded due to negligence of BP, 11 million people died and nearly 5 million barrels of oil was spilled into Atlantic ocean. Even the locals nearby suffered with mental illness. This incident had a global impact on many. The BP was held liable in November 2012, by U.S department of justice and a settlement was drawn to pay $4.5 billion. The company was held culpable for its actions against the environment and the people.
NEED FOR ENVIRONMENTAL LIABILITY:
Environmental liability is a term used for the process by which the cost for damaging the environment is placed before those persons who are responsible for causing damage to the environment. Though the natural environment is good for the public, the conventional markets remain in ambiguity regarding their responsibility for damage caused to the environment. And, most of the time the charges for rectifying environmental damage may not reflect the true environmental cost adequately. By introducing the concept of environmental liability the polluter is held responsible for damage caused to the environment. This concept of environmental liability has been established by different nations like Europe, America, etc., with a legal framework for prevention and remedying the environment. Once the polluter is held responsible for damaging the environment, it gives rise to legal action against the polluter. Without the environmental liability law, we can neither protect the environment nor people living in the environment.
CONCLUSION:
Many countries face challenges like deforestation, contamination due to mining, illegal hazardous waste trade, etc. These challenges not only effect the eco-system but also impair human well-being and can deprive national economies. The people, especially economic players must be made aware of environmental liability. The operators must be aware of the environmental laws and must always strive for public good. They need to take care that their work should not effect the people and environmental assets which include ecosystem, natural resources, and individual species.
The public authorities must show great sense of responsibility in implementing the necessary financial, preventive and remedial measures on responsible operators. Public databases of environmental liability cases must be made accessible to public. This creates awareness about environmental liability and also builds trust in the system. Environmental liability is a valuable instrument in order to stop environmental degradation and improve the protection of natural resources. Environmental protection is a global task and environmental damages don’t stop at national borders, thus a uniform system for prevention and remediation must be applied. Various studies show that ELD has not been applied widely in practice due to low awareness. There is also a need to establish financial securities for the operators so that they can fulfill there obligations related to environmental liability.
Finally, it is good to be a part of solution than to be a part of pollution. So, the scope of environmental liability needs to be tuned and must gain a huge importance in this world so that the operators fulfill their duty towards the protection of environment in accordance with there work.
Author(s) Name: Ganesh Nair J (University College of Law, Osmania University)
References:
[1] Brenda Eskenazi and others, ‘The Seveso Accident: A Look at 40 Years of Health Research and Beyond’ (2018) 121 Environment International 71
[2] Trail Smelter Arbitration (United States v Canada) (1938 and 1941) 3 RIAA 1905
[3] In re Oil Spill by the Oil Rig ‘Deepwater Horizon’ in the Gulf of Mexico 148 F Supp 3d 563 (ED La, 2015)