In an important judgment of 4 March 2015 (OJ C 138, 27.4.2015, p. 12), the Court of Justice of the European Union (“CJEU”) pronounced on the interpretation of Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage (“Directive 2004/35/EC”).

The CJEU judged that this Directive must be interpreted as not precluding national legislation such as that at issue in the main proceedings [Italian domestic legislation], which, in cases where it is impossible to pursue the entity(ies) that originally caused the contamination of a plot of land and to have that person(s) adopt remedial measures (the underlying Italian case relates to historic pollution), does not permit the competent authority to require the current owner of the land (from whom the pollution originated) to adopt preventive and remedial measures, that person being required merely to reimburse the costs relating to the measures undertaken by the competent authority within the limit of the market value of the site, determined after those measures have been carried out.

This judgment recalls that the “polluter pays” principle as laid down in article 191, §2 of the Treaty on the Functioning of the European Union is not directly applicable as it confers on the European Parliament and the Council of the European Union responsibility for deciding what action is to be taken in order to implement this principle. Therefore, it is only on the basis of Directive 2004/35/CE, implementing the polluter pays principle, that this principle is directly applicable.

Besides, through this judgment, the CJEU also recalls the key elements of the environmental liability mechanism:

  • Establishment by the competent authority of a causal link between the two following elements:
  • concrete and quantifiable damage, irrespective of the type of pollution at issue;
  • the activity of one or more identifiable operators.

Therefore, in order to establish a causal link, the operator whose activities caused or imminently threaten environmental damage must be identified. Only those persons carrying out an occupational activity listed in Annex III of Directive 2004/35/CE are considered operators that could be held responsible for environmental pollution under this Directive.

In this particular case, the decision of the CJEU is justified because it was impossible to pursue the original operator responsible for the pollution of the plot of land or to make this person adopt remedial measures. As no causal link could be established between the environmental damage and the activity of the operator, the situation fell to be governed by national law.

This case is complicated by the fact that it appears that the contamination is historic contamination and therefore the Directive might not apply in any event. It remains to be seen how the CJEU would react in different circumstances. However in this instance where the actual owner is not an operator according to Annex III of Directive 2004/35/CE and it is not possible to identify the original operator/entity responsible for the pollution, the Directive allows national law to rule that the actual owner be liable only for the costs relating to the measures undertaken by the competent authority.