The EU Environmental Liability Directive (ELD) goes beyond existing national and EC environmental protection legislation by establishing a framework of environmental liability requiring the prevention and, where that fails, remediation of various categories of environmental damage.

Under the ELD the onus is placed on operators to:

  • take preventative action to avoid environmental damage occurring;
  • own up to regulators to having caused environmental damage should it occur; and
  • make and agree proposals to remediate any environmental damage caused.

Member states are required to implement the ELD by 30 April 2007. The Department of the Environment, Food and Rural Affairs (Defra) has recently issued a consultation document seeking views on options for implementing the ELD in the UK, apart from Scotland. The consultation is the first of two, it is anticipated that the second will be held in spring 2007.

Key provisions of the ELD

The ELD covers three categories of environmental damage:

  • damage that has significant adverse effects on reaching or maintaining favourable conservation status of species and natural habitats protected under EC legislation (biodiversity damage);
  • damage that significantly adversely affects the ecological, chemical and/or quantitative status and/or ecological potential of waters covered by the Water Framework Directive (Directive 2000/60/EC) (water damage); and
  • land contamination that creates a significant risk of human health being adversely affected

Liability for environmental damage, including the imminent threat of it, falls on operators – essentially persons who operate or control any economic activity, business or undertaking (occupational activity). For occupational activities listed in the ELD, comprising a wide range of activities, regulated by EC legislation, which are potentially damaging to the environment, liability for all three categories of environmental damage is covered and strict liability applies1. Operators of other occupational activities may be liable for biodiversity damage, but only if they are at fault or have been negligent.

Once environmental damage has occurred persons caught by the ELD will be under a legal obligation to inform the regulatory authorities ‘without delay’ of all relevant aspects of the situation and take all practicable steps to prevent further damage or harm, and to take necessary remedial measures.

Biodiversity and water damage are required to be remedied by returning the environment to its baseline condition; in the case of damage to land the risk to human health must be removed. If the harm to biodiversity or protected waters cannot be reversed, then ‘complementary remediation’ by improvement of a similar resource or service may be required to be undertaken to the extent the original resource cannot be fully restored. ‘Compensatory remediation’ may also be required to compensate society for the loss of the use or enjoyment of the resource or service. Regulators are given step-in rights where the operator fails to undertake preventative or remedial measures and can recover the costs of doing so from the operator.

The UK consultation paper

The consultation paper acknowledges that while there is considerable overlap between the ELD and existing UK environmental protection regimes, the ELD goes further in some respects, for example the requirement for complementary and compensatory remediation in the case of water or biodiversity damage. In other respects, existing national regulation is wider than the ELD, for example, because it applies to a greater number of activities potentially giving rise to environmental damage, or strict liability is imposed for all activities, not just a limited set.Managing the overlap will clearly be challenging.

The ELD leaves discretion to individual member states as to whether to implement certain provisions and go beyond minimum requirements. The consultation paper confirms that Defra’s current thinking is generally not to go beyond the minimum transposition requirements. In particular, Defra’s view is that:

  • the scope of the ELD should be limited so as not to bring nationally protected biodiversity (ie sites of special scientific interest) within it; the strict liability regime should not be extended to a wider range of activities than envisaged under the ELD;
  • both the permit and state of knowledge defences provided in the ELD should be adopted, but only where additional liability arises under the ELD beyond that currently provided for in national legislation (the principal additional ELD liability requirements being, according to the government, those relating to complementary and compensatory remediation). Thus neither the permit defence nor the state of knowledge defence would generally apply where environmental damage occurred, except regarding complementary/compensatory remediation requirements; and
  • the majority of exceptions written into the ELD, eg the exceptions for environmental damage arising from armed conflict or natural phenomenon, are proposed to be implemented in full, except the natural phenomenon exception is proposed to be applied subject to the operator demonstrating that all reasonable steps had been taken to minimise any environmental damage.

The consultation paper also considers options for the thresholds that would apply when assessing when environmental damage has occurred. The government’s preferred approach is to adopt the following tests, for:

  • biodiversity damage, the test suggested is one of significant adverse effect on reaching or maintaining favourable conservation status focusing on damage to Natura 2000 sites, taking account of the significance of the particular site or sites to the conservation status of the habitat or species over its natural range;


  • water damage, the test would be based on criteria which give practical effect to the requirements of the ELD drawing upon water quality standards set under the Water Framework Directive; and


  • land damage, the test would be the same as for contaminated land under part 2A of the Environmental Protection Act 1990.

Defra’s current thinking is that the appropriate UK regulator will be the Environment Agency for water and land damage and Natural England for biodiversity damage. The consultation paper raises the question whether criminal offences should be imposed for non-compliance with the duties imposed under the ELD, in line with the approach currently taken in national environmental protection legislation.

The partial regulatory impact assessment indicates that it is envisaged that minimum transposition of the ELD is likely to give rise to around 40 incidents per year, with a total cost of around £14m; Defra currently estimates that fewer than 1 per cent of the 30,000 or so cases of environment-related damage reported in the UK annually would fall within the scope of the ELD.

The consultation ends on 16 February 2007. Given the timing of the second consultation, which will include draft legislation, it seems unlikely the UK will be in a position to implement the ELD into national law before the implementation deadline.

Some practical implicationd of ELD implementation

The requirement to proactively notify relevant regulators of environmental damage means that businesses will need to devise and implement systems of internal reporting in the event of possible noncompliance, including considering the factors that should be taken into account in determining whether a notification to the regulator is necessary.

  • Businesses ought to undertake advance planning so they are aware of the risks of environmental damage posed by their operations and of the immediate actions they should take in the event environmental damage, or an imminent threat of it, occurs.
  • Operators will need to consider whether to undertake assessments of baseline condition (the ELD does not apply to damage caused by an emission, event or incident that took place before 30 April 2007; however, there may be evidential difficulties in proving that particular damage was caused by such an emission, event or incident and not by a later one).
  • Finding out about environmental damage or inadequate response actions in the course of due diligence may trigger reporting obligations as well as requirements to take remedial and/or preventative measures.