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The buck stops. . .where?

Environmental liability is top of the EC agenda but are the proposals in the new environmental liability regulations workable? Diana Maxwell reports.

Polluter pays, prevention and precaution, the three core environmental principles of the EC Treaty, are set to be implemented by new environmental liability regulations.

Preparing a pan-European civil liability regime to cover damage to the environment has been a long and difficult process, which has only gradually won support from national governments.

The Commission first attempted to regulate on defects liability in construction in the early 1990s. However, disparity in member state legislation on the subject led to effective defeat. As a result, a civil liability regime for the environment has developed gradually. A 1993 Green Paper evoking much comment and criticism evolved towards the present White Paper issued in February of this year.

Politicians believe there will be less to fear from a broadbrush directive than from liability regimes inserted here and there in other directives.

The proposal set out in the EU White Paper is based on operator liability and covers damage caused by dangerous and potentially dangerous activities to persons and goods - otherwise known as traditional damage - and site contamination.

The issue is extremely complex and lack of clarity in the White Paper is causing concern.

The European Council of Civil Engineers and other bodies together play a part in seeking to advise and influence the European Commission's and Parliament's thinking on the subject.

Some sectors of the construction industry take the view that an adequate and approved environmental impact assessment should be a safeguard against prosecution.

Issues in question include complex contractual arrangements such as facilities management which fall into a grey area of definition. The ambiguity of what defences are allowed may also create disquiet. An interesting development is the proposal to draw non-governmental organisations into the decisionmaking process by allowing them access to justice. Yet there is no assurance to industry that damages may be recovered from such a plaintiff.

Insurability is another major discussion point. If insurers prove reluctant to provide cover for clean-up and redevelopment of contaminated sites then this may lead to greater pressure to develop greenfield sites. Developing contaminated land may also be hindered by problems with the professional indemnity insurance required to enable their evaluation. An indication of the Commission's reaction to industry's concerns can be noted in the studies being carried out by the Commission's Environment Directorate General:

Damage to bio-diversity, insurability and competitiveness and economical impact.

The European construction sector is overwhelmingly dominated by small and mediumsized firms. Aware that small firms 'often cause more environmental damage than their size would predict', the Commission solution of improving best practice by demonstration projects seems limited in scope and likely success.

A draft directive is due to be published in 2001. In the meantime the European Parliament is adding its own suggestions.

There should be a broader definition of 'significant damage'; traditional damage to persons and goods should be compensated.

Strict liability would apply to all activities, not only dangerous ones, and it would not approve damage assessment by cost benefit.

In their enthusiasm to make their mark, Parliament's legislators may yet prove to be the undoing of a proposal whose ambitious goals had already been diluted in its long gestation.

Diana Maxwell is European Affairs manager at the ICE and ECCE deputy secretary.

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