The European environmental liability directive and comparisons with U.S. natural resource damage assessment regulations

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In recent months, there has been increasing awareness and interest on the part of corporate organizations as to how to prepare for the enactment of the European Union (EU) Environmental Liability Directive (ELD)1 into national laws of the EU Member States (Member States are those sovereign countries of Europe that have acceded to the EU since 1951). Transpositions of the ELD into national laws are either enacted or imminent across the Europe.

The ELD is based on the “polluter pays” principle, making operators responsible for immediately responding to environmental damage and for taking preventative actions if an imminent threat of damage exists. The scope covers specific types of damage to protected species or natural habitats (i.e., biodiversity), as defined in the EU Habitats and Wild Bird Directives2; surface water or groundwater bodies, as defined in the EU Water Framework Directive3; and human health risks from land contamination.

In the event of a pollution incident, the ELD makes operators liable for taking restorative and remedial action for environmental damage. Restorative and remedial action is taken to mean returning the environment back to its pre-damage condition (i.e., “baseline” condition) and compensating the public for “interim” damages, which are the lost ecosystem services (e.g., ecological and human use) from the time that the incident occurred to the time that the environment returns to its baseline condition.

There are many parallels between the ELD and the U.S. Natural Resource Damage Assessment (NRDA) regulations.4 The focus of this article is on damage to biodiversity, as this is the area of greatest complexity and is directly comparable to the scope of the NRDA regulations. This article is relevant to corporations with facilities in Europe and more generally to any environmental damage practitioner.

The Environmental Liability Directive
In the European Commission’s White Paper on Environmental Liability,5 on which the ELD is based, EU Member States were given some latitude to adopt a minimum transposition or extend the scope by affording greater regulatory control to include nationally important habitats and species. Ecological receptors are commonly more sensitive to environmental pollution than are humans, though human health risks tend to dominate rulemaking and remedial decisions.

Many of the EU Member States’ plants, animals, and habitats are legally protected under a range of local, national, and international legislation. However, the extent of biodiversity protection varies from country to country. This variation across Europe affects how operators may view their activities and the potential scale of future remedial or compensatory actions; it also makes a challenging situation more complex should a trans-boundary incident occur. Nevertheless, there are sufficient similarities between the definitions of what constitutes damage to biodiversity that the assessment of the nature, extent, and effects of pollution can be investigated using a common approach.

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