Does the Polluter Pay? The Polluter-Pays Principle in the Case Law of the European Court of Justice

Abstract

The principle that the “polluter should pay” has been one of the guidelines of EC environmental policy for decades. Nonetheless, a number of problems continue to stand in the way of its effective application. Most importantly, the principle itself does not define who the polluter is, what pollution is or to what extent the polluter needs to pay. This article is an assessment of the role the European Court of Justice (ECJ) has played in answering these questions. It is argued that the Court has adopted an extensive interpretation of the principle, especially in the recent Erika judgment. In that sense, the ECJ has certainly contributed to a more effective and enforceable polluter-pays principle in the EC legal order. However, the impact of the ECJ’s interpretation is of course limited by the boundaries set by EC legislation. Policies are needed to move towards a European Union in which the polluter actually does pay. Judgments can only serve to buttress and clarify such legislation. This article provides a comprehensive analysis of the three main cases in which the ECJ has been called upon to interpret the polluter-pays principle (Standley, Van de Walle and Erika). The focal point is the Erika judgment, as this is both the most recent and most far-reaching. In all three judgments, the Court emphasizes that any application of the principle has to be proportional. Polluters cannot be asked to pay for pollution damage beyond their contribution to the creation of that pollution. The Court has not shied away from defining “pollution” in a broad sense in both Van de Walle and Erika. Establishing who the “polluter” is, however, has proven far more difficult. Of particular interest is whether the producer of the product might be held liable in the case of the accidental creation of pollution, such as an environmental disaster. In the Erika case, the Court very significantly introduces a risk liability standard; product producers might be deemed “polluters” solely on the basis of their contribution to the risk of pollution. This is a significant development from Van de Walle, in which the Court considered a direct causal link or negligent behaviour necessary for product producer liability. In addition, Erika underlines that Member States cannot limit the scope of the polluter-pays principle in EC secondary legislation, even if this leads to a contradiction with a Member State’s international obligations such as the International Oil Pollution Compensation regime. In short, the Erika judgment builds on Standley and Van de Walle but adds significant impetus to the polluter-pays principle at the EC level. However, the risk liability standard it establishes will be difficult to apply and it remains to be seen how the legislator will react to the Court’s extensive interpretation.