New ‘polluter pays’ plan unlikely to satisfy critics

Date: 10/09/1998

By Chris Johnstone

CONTROVERSIAL plans to force companies to pay for the pollution they cause face a rough ride, despite efforts by European Commission environment officials to overcome opposition to the move by amending their proposals.

Some member states, such as Germany and the UK, are likely to take a tough line on the environmental liability proposals when they reach the Council of Ministers, and industry is expected to maintain its opposition to the planned approach in spite of the changes made over the summer.

The proposals, a key element in Environment Commissioner Ritt Bjerregaard's plan to make polluters pay for environmental damage, are due to be circulated among top officials within the institution this month, with the hope of winning approval from the full Commission by the end of the year.

Officials say the proposed new rules are necessary in the single market to prevent a series of different environment liability rules springing up in member states and to stop taxpayers having to meet the cost of industrial pollution.

The White Paper has been fine-tuned by officials in the Directorate-General for the environment (DGXI) after a leaked draft in April provoked a sharp and, according to the Commission, unwarranted attack from European employers' organisation UNICE.

Under the proposed new rules, companies would only be liable for damage after the new rules came into effect. Claims arising from existing pollution would have to be pursued under national rules.

Some of the amendments are aimed at reassuring companies that the proposals will not lay them open to huge clean-up bills. Officials have, for example, sought to spell out that there is little likelihood of one firm being forced to foot the bill for diffuse pollution from many different sources if the other culprits cannot be found.

An earlier draft stated that no company would be pursued as long as it was not responsible for more than 1% of pollution, raising fears that polluters responsible for 1.1% of damage could face demands to pay 100% of the clean-up costs. The Commission now describes that percentage as a guideline which should not be taken literally.

Officials are also seeking to prevent the liability rules from becoming a fast track to riches for claimants by underlining the fact that any compensation should be used first and foremost to repair ecological or environmental damage.

In addition, they have moved to prevent companies dodging claims by spinning off their polluting activities into units which are kept at arm's length from their main business. This would be done by tracing back damage to sister or parent companies. Company directors could also be held responsible.

Under the Commission's proposals, damages could be sought without proof that the company concerned had been negligent. The only evidence necessary under the strict liability approach would be that the firm's actions caused the pollution.

Industry claims that this provision would expose it to incalculable financial risk.

Preview of draft White Paper on environmental liability put together by DG XI of the European Commission.