No hiding place

A landmark ruling by the European Court of Justice on environmental lapses could profoundly affect business throughout the EU. Chris Webb reports

Last August the Probo Koala, a Panama-registered tanker, slipped into the Ivory Coast port of Abidjan, offloading up to 500 tonnes of toxic waste. Owned by a Greek shipping company and chartered to a Dutch operator, the vessel's actions were to set off a string of events resulting in several deaths while hundreds were affected by respiratory problems, nausea, dizziness, vomiting and burns following the incident.

It is just one example cited by European Union policy makers as justification for a new directive aimed at strengthening European laws to call more environmental offenders to book. It follows a September 2005 decision by the European Court of Justice in Luxembourg that the Commission in Brussels has the competence to lay down common criminal rules across Europe. But the proposed Environmental Crime Directive has alarmed many member states, among them Britain, who fear Brussels' impending new powers to use criminal sanctions to enforce EU law will strip them of their sovereignty.

The comment writers have had a ball, labelling the proposed new directive 'ominous' and 'deluded'. Some UK lawyers believe the EU will get its way by stealth. A little noticed announcement on February 9 this year ushered in a consultation period for member states, the likely outcome of which, just 18 months after adoption, could see the unelected EU Commission assuming an unprecedented role in the administration of criminal justice across the Union.

"The problem with the impending legislation is that unless you are a lobbyist it is not too sexy," says Simon Tolson, senior partner at the law firm Fenwick Elliott in London.

"[But] the sovereignty debate will loom large for most constitutionalists and a good many lawyers," he told Environment Business. "The idea of ecological crime laws has been booted around Europe for some time and touches on the prickly issue of sovereignty and the right of the EC to mandate criminal policy here on our shores."

One very strong bone of contention, Tolson says, is that the UK has itself led the way with environmental protection legislation for the best part of two decades in the form of the Environmental Protection Act 1990. It sets strict liability guidelines enshrining the mantra of 'polluter pays' and other deterrents to those who would flout the law.

But the proposed new directive concentrates on 'natural persons' who participate in or instigated an offence, and this represents a significant departure from existing practice, Tolson says. "This may spur UK regulators to pursue individuals instead of companies, traditionally the main targets of enforcement through fines." In addition, Tolson says, the sentencing regime would remove some of the discretion currently available to judges.

The Probo Koala incident would undoubtedly have been covered by the proposed directive, the EU said in February, as it was "presumably a case of illegal shipment of waste". So would the chemical explosion in Seveso, Italy, in 1976, when people living nearby suffered from skin problems after exposure to huge amounts of dioxin following "serious negligence or intentional breach of legislation".

But what other kinds of environmental offences will be targeted? "The draft directive will cover a list of serious environmental crimes, the majority of which were also covered by the annulled Framework Decision which had been adopted unanimously in 2003," explains David Young, a regulatory partner at another London law firm, Eversheds. "The list includes the unlawful treatment, transport, export or import of waste, including hazardous waste; the unlawful trade in endangered species; the unlawful trade in or use of ozone-depleting substances and the unlawful operation of a plant in which a dangerous activity is carried out or in which dangerous substances or preparations are stored or used."

Oil spills are not explicitly excluded from the proposal, the EU said, but they will be covered by a separated proposal for amending Directive 2005/35 on ship source pollution to come out later in 2007.

In general, the proposed directive aims to ensure a minimum level of protection of the environment under criminal law throughout the EU. Currently the definition of environmental crimes varies greatly from one member state to another and in many the levels of sanctions are deemed by the Commission to be inadequate.

Specifically, member states have to ensure that particularly serious environmental crimes are punishable by a maximum of at least five years imprisonment and fines for companies of at least £510,000. Environmental crimes likely to be considered to be particularly serious include those that have resulted in death or serious injury of a person or a substantial damage to air, soil, water, animals or plants or when the offence has been committed by a criminal organisation. The directive foresees supplementary or alternative sanctions, such as the obligation to clean up or reinstate the environment or the possibility of stopping businesses from operating.

The aim
In its most innocuous form, Young explains, it has been suggested that the aim of the directive is not to fully harmonise national criminal laws, but to take only those measures at community level that are necessary to ensure the effective implementation of environmental policy. The draft directive applies only to activities that are in breach of community law protecting the environment and does not create a list of new illegal acts. Member states, by transposing the directive, will only have to attach to the existing prohibitions some criminal sanctions. They remain largely free to choose the kind of criminal sanction provided that it is effective, proportionate, and dissuasive.

Additionally, it sets only a minimum standard of environmental protection, the member states are free to maintain or introduce more stringent protective measures.

Young continues: "For example, they may establish additional offences, extend the level of criminal culpability to simple negligence and/or add additional types and higher levels of penalties."

Member states will have to implement the directive at the latest 18 months after its adoption and send their implementing legislation to the Commission. This implementation period should not pose any difficulties for member states because many of the provisions were already contained in the annulled Framework Decision 2003/80/JHA. The implementation period for this Framework Decision ended on January 27 2005 so that Member States will already have done a significant part of the required implementation work for this directive. What remains uncertain, however, is exactly when the directive will be adopted.

Sinister and insidious?
Yet sceptics believe the September 2005 ruling in the Commission-v-Council case introduced a more sinister, insidious intention to emasculate key national laws.

Writing in his blogspot after the February EU announcement of the new directive, under the pseudonym Head of Legal, a London barrister said the case was all about who has the power, under what can reasonably be called the European Constitution - the EC and EU Treaties - to lay down common criminal rules and penalties for combating pollution and other environmental crimes.

A London Times editorial accused the EC of "empire building" and taking a "dangerous step in the wrong direction". Echoing deep-seated beliefs by many anti-federalists, the newspaper accused the Commission of "trespassing on the sole right of governments to imprison their citizens," which was a "serious expansion of and misunderstanding of the Commission's role". The Commission's actions confirmed lingering suspicions that, when faced with a choice between subsidiarity or strengthening the EU's federal powers it will, invariably, choose the latter.

Although it is early days in the consultation process as the proposed directive passes through due process, there is already an air of resignation among legal observers in the UK. "We lost sovereignty with the European Communities Act in 1972, the slippery slope, Section 2(1) of the European Communities Act 1972," says Simon Tolson.

Despite all the brouhaha, Brussels' policy makers believe it is crucial to ensure that environmental law breakers are effectively sanctioned throughout the European Union. Environment Commissioner Stavros Dimas said in February: "The recent hazardous waste disaster in the Ivory Coast shows how environmental crimes can have devastating effects on people and the environment. It also underlines once again how urgent it is to improve the way environmental legislation is enforced in order to avoid such incidents."

Franco Frattini, the Commission's vice president responsible for justice, freedom and security, said: "The proposed directive is crucial to avoid criminals profiting from the existing discrepancies in member states' criminal law systems which damage the European environment. We cannot allow safe-havens of environmental crime inside the EU."

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