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Types of liability

What types of liability can arise for environmental damage (eg, administrative, civil, criminal)?

Environmental damage can give rise to the following types of liability:

  • civil;
  • criminal;
  • administrative; and
  • environmental.

Regarding environmental liability, in 2013 the Federal Law of Environmental Responsibility established fault-based liability as a general rule for damages caused to the environment. On the other hand, in terms of the said law, strict liability applies when the responsible party causes damage as a result of a specific activity even when fault or negligence has not taken place (eg, during the handling of hazardous waste or risk substances).

Directors’ and officers’ liability

Can directors and officers be held personally liable for company environmental offences? If so, can liability be limited through insurance coverage and/or contractual indemnities?

Ordinarily, if a company causes damage, the company itself is deemed to be liable. However, directors and officers can be held subsidiarily liable or even criminally liable if they actively violate environmental regulations. Insurance coverage and contractual indemnities may significantly reduce liability.

Liability for authorised activity

Can environmental liability arise even in the course of authorised activities (eg, operations subject to environmental permits)?

Environmental liability does not arise in the course of authorised activities if the conditions of the relevant authorisation or permit are fully complied with and all information regarding the environmental impact and possible effects were disclosed to the relevant authority. Environmental liability cannot be claimed as a result of damage caused by emissions or as a result of activities performed under permitted standards.


What defences are available to environmental offenders?

Plaintiffs in environmental liability trials can claim that environmental damage has not taken place while conducting their activities due to granted approval or while operating under an official standard. Defences in this regard are likely to be sustained in merely legal allegations or to be grounded in technical allegations of whether a given parameter was surpassed. It is therefore common for technical experts to intervene in such procedures.

Plaintiffs can also claim for attenuating circumstances, including:

  • holding the appropriate environmental and safety policies in place;
  • holding valid insurance covering environmental damage for high-risk activities; and
  • holding official environmental certificates issued by the relevant authority.

Liability in share sale/asset purchase

What rules govern the transfer of environmental liability in share sales and asset purchases?

The General Law of Commercial Enterprises establishes the rules applicable to share sales and asset purchases, even in the event of a company being found as environmentally liable.

What environmental due diligence measures are recommended before concluding share sales/asset purchases?

Environmental due diligence measures include:

  • a background check through public records;
  • a thorough desk review of granted approvals, as well as documentation on former inspections; and
  • the conduct of appropriate Phase I and Phase II assessments.

Lender liability

Can lenders be held liable for environmental offences?

As a general rule, lenders cannot be held liable for environmental offences. However, when it comes to soil contamination, proprietors (including lenders) can be held liable for the cleaning up of brownfield land. If deemed to be liable, the lender has the right to subsequently sue the polluter to recover remediation costs.

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