Fires can prove enlightening when it comes to the development of case law with regard to environmental liabilities – not only for companies, but also for regulators and supervisory agencies.
"Government takes Chemie-Pack to court over remediation following fire" reported on the Chemie-Pack fire at an industrial park in Moerdijk, which completely destroyed a packer, filler and labeller of hazardous chemicals. Administrative and criminal investigations have since begun. The company has boldly claimed that the firefighters ignored the provisions of the environmental permit that they themselves had imposed on it – namely, that chemical fires must be fought with powder rather than water. Chemie-Pack's officials had presented the relevant information about the fire and the substances on site to the firefighters, but they were brusquely dismissed and even threatened with imprisonment. Subsequently, the fire was fought with water only, which exacerbated the blaze and ultimately led to the destruction of the company.
This will be one of the points judged by the courts as the case develops.
A similar case that has already been decided by the courts involved a fire that struck storage company CMI in Rotterdam in 1996. CMI also packed and stored hazardous chemicals, but additionally stored goods (including chemicals) for several third parties. Those parties sought to recover their losses from the municipality of Rotterdam. Through its agency DCMR, Rotterdam had been responsible for the supervision and enforcement of the environmental permit. This permit also contained provisions regarding fire safety issues. In addition, Rotterdam was responsible for enforcement of the Fire Services Act.
It was established that Rotterdam had initiated supervisory and enforcement activities shortly before the fire, and that CMI had been reluctant to implement the required measures. As was – and sometimes still is – a common practice in enforcement matters, Rotterdam had not enforced the issue too vigorously. However, under the case law of the highest environmental court, regulators have a strict duty to enforce. There is (almost) no discretionary power with regard to the question of whether to enforce.
The questions for the courts to answer in the CMI fire were as follows:
- Had Rotterdam been allowed some discretionary power in its role as a supervisor and enforcement authority?
- Did the provisions of the environmental permit (aimed at the protection of the environment) and those of the Fire Services Act also protect third-party goods?
- Was Rotterdam obliged to take third-party interests into account in its role as an enforcement agency?
These questions were particularly relevant given the state of the relevant case law on the alleged failure of supervision by regulators/agencies. The textbook judgment in such matters is the Supreme Court's Duwbak Linda decision of May 2004. The court held that provisions such as those in an environmental permit are not intended to protect third-party interests; rather, they are intended to protect only the direct interests at which the provisions are aimed. The Duwbak Linda case concerned the inspection certificate issued for the push barge Linda by the central government in 1992. A year later, the barge sank and caused considerable damage to a third party. The Supreme Court eventually ruled that the inspection certificate had not been issued for the protection of third parties.
In the CMI case, however, the Hague Appellate Court ruled to the contrary in its March 21 2011 decision:
- Rotterdam had not been allowed discretionary power in its role as a supervisor and enforcement authority;
- The provisions of the environmental permit and those of the Fire Services Act were, indirectly, also meant as a protection of third-party goods; and
- Rotterdam had been obliged to take third-party interests into account in its role as an enforcement agency.
The latter ruling represents a stark departure from the Supreme Court's earlier Duwbak Linda decision, as well as all subsequent court decisions thereafter. There have been several disasters (also fire related) for which third parties have tried to hold agencies and regulators liable for the failure of supervision, but such cases have all been in vain.
Now, it is again in the hands of the Supreme Court to uphold or annul the decision of the Hague Appellate Court.
For further information on this topic please contact Norbert de Munnik at NautaDutilh by telephone (+31 10 224 0000), fax (+31 10 414 8444) or email ([email protected]).