Lawyer Monthly Magazine - September 2021 Edition

47 SEP 2021 | WWW.LAWYER-MONTHLY.COM SPECIAL REPORT ON THE POLLUTER PAYS PRINCIPLE In the scope of its audit, the ECA has noted that the polluter pays principle is not applied uniformly. Indeed, it is not applied to the same extent depending on the environmental policy area: - With regards to the industrial sector, the polluter pays principle would be relatively well applied to the most polluting installations. This would not, however, be the case of residual pollution, the cost of which for society is still high according to the ECA. Indeed, in most Member States, polluters would not bear the cost of the emissions they generate when they are below the authorised thresholds. - With respect to waste, the ECA recognises that the legislation takes the polluter pays principle into account, but it does not guarantee that the polluters will pay the entire costs of the pollution. Public investments are often necessary to overcome the financing deficit. - In the area of water pollution, the result is clear: polluters would not bear all the costs of their pollution. For instance, EU households would pay most of the cost of water supply and sanitation even though they consume only 10% of this water. - Lastly, the ECA regrets the absence of EU legislative instruments with regards to soil pollution and the cleaning-up of polluted sites. While some Member States have very comprehensive national legislation in this respect, this is unfortunately not the case for each one of them. However, the Court recognises that the application of the polluter pays principle in the soil pollution area is not easy due to the difficulty in identifying the responsible polluters in the event of diffuse soil contamination. The ECA concludes its report by stating that the coverage and application of the polluter pays principle is still widely incomplete. The Court further notes that the budget of the European Union is often used to finance decontamination actions, the costs of which should, pursuant to the polluter pays principle, be borne by the polluters themselves. As a result, to help better integrate this principle, the ECA has issued three recommendations for the attention of the European Commission: - Firstly, it encourages the Commission to assess the scope for strengthening the integration of the polluter pays principle into environmental legislation by the end of 2024. TheECA suggests that theCommission review the authorised emissions thresholds downwards to reduce residual pollution and focus its actions on the fight against diffuse water pollution, regardless of its source. - Furthermore, the ECA suggests that the Commission consider reinforcing the application of the Environmental Liability Directive by improving the criteria used to define the environmental damage to which the Directive should apply and by increasing the use of financial guarantees. - Lastly, the ECA suggests protecting EU funds from being used to finance projects that should be funded by the polluter. To do so, the Court invites the Commission to check that the funds of the European Union can only be used for decontamination purposes provided that the competent authorities have done all they could for the polluter to pay for its pollution. The Court of Auditors also counts on the use of financial guarantees covering environmental risks that should, in its opinion, be made compulsory. Today, seven Member States, namely the Czech Republic, Ireland, Spain, Italy, Poland, Portugal and Slovakia, require a financial guarantee for all or part of the polluters' environmental liabilities. This report will undoubtedly push the European Commission to legislate and order the Member States to all have a homogeneous approach to the polluter pays principle, irrespective of the type of pollution at stake. Companies should anticipate this when entering into Lease or Purchase agreements of sites or buildings to ensure that any and all pollution that may be identified in the future remains the burden of the previous owner for instance. Indeed, there is a limit to the polluter pays principle which is of significant importance: a contractual clause stating otherwise.