Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.
Soil pollution
Liability
What regime governs liability for soil pollution (including the allocation, transfer and limitation of liability)?
Soil pollution is mainly governed by the Federal Act on the Protection of the Environment and the Federal Ordinance on Contaminated Sites.
As a core principle, the ‘polluter pays’ principle governs liability for soil pollution. In line with the polluter pays principle, the Federal Act on the Protection of the Environment provides for the following rules on the final allocation of investigation, monitoring and remediation costs (regarding possible cost advances see below). Generally, the persons responsible bear the costs of the measures required to investigate, monitor and remediate polluted sites. If two or more persons are responsible, they bear the costs according to their share of the responsibility. The first to bear the costs is the person that caused the measures to be needed through its conduct. Anyone responsible simply as the proprietor of the site does not bear any costs if, by exercising the required care, it could not have had any knowledge of the pollution. The public authority concerned bears the share of the costs of responsible parties that cannot be identified or are unable to pay.
The authority issues a ruling on the allocation of costs if any person responsible so requests or if the authority is carrying out the measures itself. Such a ruling is subject to appeal.
If an investigation of a site entered in the register of contaminated sites or for which an entry is planned reveals that the site is not polluted, the public authority concerned bears the costs of the investigative measures required.
Investigation, monitoring and remediation measures will be carried out by the holder of the polluted site, which is not necessarily the polluter of the concerned site. If the authorities have reason to believe that the pollution of the site was caused by the action of third parties, the authorities may require these to carry out a preliminary investigation, monitoring measures or detailed investigation. If the pollution of the site was caused by the action of third parties, the authorities may require these, with the approval of the holder, to prepare the remediation project and perform the remediation measures.
To the extent that the holder of a polluted site or third parties pay for the investigation, monitoring and remediation measures, such payments are considered to be cost advances and may be refunded by the polluter in the final cost allocation pursuant to the ‘polluter pays’ principle.
If the shares in a company owning a contaminated site and being the polluter are sold, the environmental liability remains with the company pursuant to the polluter pays principle. If a contaminated site is sold by its polluter, pursuant to the polluter pays principle, the seller remains liable for the previous pollution, and the buyer will be liable for future pollution, if any. Nevertheless, the buyer as the new owner of the site can be asked to cover remediation costs for any pollution, including the one caused by the seller, so that it will have to take recourse against the seller based on the polluter pays principle.
Generally, liabilities pursuant to environmental laws cannot be modified or excluded in agreements with the competent authorities. Among private parties, agreements on the allocation of environmental liabilities and related hold harmless obligations are possible and used in share purchase agreements and asset purchase agreements.
Failure to comply with soil pollution regulations may lead to administrative penalties such as monetary fines and custodial sentences.
Due diligence
What environmental due diligence measures are recommended before concluding land transactions?
Generally, the scope of recommended due diligence measures strongly depends on the previous use and the planned future use of the concerned land, as well as the age, previous use and planned future use of buildings that are part of the transaction.
Before concluding land transactions, a general inquiry as to the location should take place and the planned use or project should be assessed with regard to potential restrictions from environmental laws, such as traffic restrictions, groundwater protection zones or wildlife protection zones.
Further, the cantonal register of contaminated sites should be consulted. This register is limited to sites whose pollution originates from waste and that are restricted in area – namely, waste disposal sites, industrial sites and accident sites. It is therefore important to also consult any other available public register containing information about the soil and potential contaminations, such as the register of movements of polluted soil and registers showing pollution from traffic, farming and special cultures.
In the case of existing buildings on the concerned land, an examination of the building materials is recommended, especially if the building was constructed at a time when the use of hazardous materials (eg, asbestos) was allowed and common. In this regard, no public registers are available.
To cover risks arising from environmental issues, it is standard practice to include representation and warranty clauses in share or asset purchase agreements.
Remediation
What remediation and clean-up measures are typically applied and how can remediation costs be recovered?
The objective of remediation pursuant to the Ordinance on Contaminated Sites is the elimination of impacts that lead to the need for remediation. Remediation measures are the elimination (decontamination) of hazardous substances, the long-term prevention of hazardous substances to further spread and the long-term monitoring of concerned sites.
Remediation costs are allocated based on the polluter pays principle (see above).
Click here to view the full article.
