RECOMMENDATION FOR SECOND READING on the Council common position for adopting a European Parliament and Council directive on environmental liability with regard to the prevention and remedying of environmental damage
(10933/5/2003 – C5‑0445/2003 – 2002/0021(COD))

5 December 2003 - ***II

Committee on Legal Affairs and the Internal Market
Rapporteur: Toine Manders

PROCEDURAL PAGE

At its sitting of 14 May 2003 Parliament adopted its position at first reading on the proposal for a European Parliament and Council directive on environmental liability with regard to the prevention and remedying of environmental damage (COM(2002) 17 – 2002/0021(COD)).

At the sitting of 24 September 2003 the President of Parliament announced that the common position had been received and referred to the Committee on Legal Affairs and the Internal Market (10933/5/2003 – C5‑0445/2003).

The committee had appointed Toine Manders rapporteur at its meeting of 29 February 2000.

It considered the common position and the draft recommendation for second reading at its meetings of 1 October, 6 October, 6 November, 26 November and 2 December 2003.

At the last meeting it adopted the draft legislative resolution by 16 votes to 11 with 1 abstention.

The following were present for the vote: Willi Rothley (acting chairman), Ioannis Koukiadis and Bill Miller (vice-chairmen), Toine Manders (rapporteur), Uma Maija Aaltonen, Paolo Bartolozzi, Maria Berger, Ward Beysen, Raina A. Mercedes Echerer, Christos Folias, Janelly Fourtou, Marie-Françoise Garaud, Evelyne Gebhardt, Fiorella Ghilardotti, José María Gil-Robles Gil-Delgado, Alfred Gomolka, Malcolm Harbour, Lord Inglewood, Hans Karlsson (for Carlos Candal), Sir Neil MacCormick, Xaver Mayer, Manuel Medina Ortega, Angelika Niebler (for Klaus-Heiner Lehne), Marcelino Oreja Arburúa (for Rainer Wieland), José Ribeiro e Castro (for Brian Crowley pursuant to Rule 153(2), Anne-Marie Schaffner, Jürgen Schröder, The Earl of Stockton, Marianne L.P. Thyssen, Ian Twinn (for Joachim Wuermeling) and Stefano Zappalà.

The recommendation for second reading was tabled on 5 December 2003.

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the Council common position for adopting a European Parliament and Council directive on environmental liability with regard to the prevention and remedying of environmental damage

(10933/5/2003 – C5‑0445/2003 – 2002/0021(COD))

(Codecision procedure: second reading)

The European Parliament,

–   having regard to the Council common position (10933/5/2003 – C5‑0445/2003),

–   having regard to its position at first reading[1] on the Commission proposal to Parliament and the Council (COM(2002) 17)[2],

–   having regard to Article 251(2) of the EC Treaty,

–   having regard to Rule 80 of its Rules of Procedure,

–   having regard to the recommendation for second reading of the Committee on Legal Affairs and the Internal Market (A5‑0461/2003),

1.   Amends the common position as follows;

2.   Instructs its President to forward its position to the Council and Commission.

Council common position	Amendments by Parliament
Amendment 1 Recital 6
(6)   Protected species and natural habitats might also be defined by reference to species and habitats protected in pursuance of national legislation on nature conservation. Account should nevertheless be taken of specific situations where Community, or equivalent national, legislation allows for certain derogations from the level of protection afforded to the environment.	(6) Protected species and natural habitats might also be defined by reference to species and habitats protected in pursuance of national legislation on nature conservation. Account should nevertheless be taken of specific situations where Community, or equivalent national, legislation allows for certain derogations from the level of protection afforded to the environment, for instance if good agricultural or forestry practice is observed.
Justification Good professional practice in agriculture and forestry is a generally accepted standard for sound and orderly land management in harmony with nature, so that, if this standard is met, a derogation is appropriate.
Amendment 2 Recital 14 a (new)
	14 a) In order to find compensation for diffuse pollution the Commission should encourage practices and initiatives in the Member States with respect to planting new vegetation.
Justification This proposal will directly benefit the environment. Diffuse pollution is only covered by this Directive if there is a clear causal link between polluter and damage. In practice, this link is very hard to establish. To compensate for diffuse pollution not covered by this Directive, the Commission should encourage practices and initiatives with respect to planting new vegetation inside or outside the EU. This idea should be viewed in the light of the increased policy attention for sustainable development and corporate social responsibility. Finally, this measure will stimulate the achievement of the Kyoto objectives. Possible actions in this field are the initiation of a European "plant-a-tree-day" and the introduction of a "Tree Fee" on all intercontinental flights leaving from the EU. The "Tree Fee" should only apply to intercontinental airline tickets because kerosene is not or is hardly taxed. The fee should be imposed per passenger on all flights departing from the EU to ensure that European airline companies will not be alone in having to pass the fee on to their passengers.
Amendment 3 Recital 14 b (new)
	(14 b) Good agricultural and forestry practice should be listed among the exceptions.
Justification Reintroduces amendment 13 from first reading.
Amendment 4 Recital 18
(18)   According to the "polluter-pays" principle, an operator causing environmental damage or creating an imminent threat of such damage should, in principle, bear the cost of the necessary preventive or remedial measures. In cases where a competent authority acts, itself or through a third party, in the place of an operator, that authority should ensure that the cost incurred by it is recovered from the operator. It is also appropriate that the operators should ultimately bear the cost of assessing environmental damage and, as the case may be, assessing an imminent threat of such damage occurring.	(18)   According to the "polluter-pays" principle, an operator causing environmental damage or creating an imminent threat of such damage should, in principle, bear the cost of the necessary preventive or remedial measures, where the competent authority can prove a clear causal link between the operator's acts or failure to act and the environmental damage or the imminent threat thereof. In cases where a competent authority acts, itself or through a third party, in the place of an operator, that authority should ensure that the cost incurred by it is recovered from the operator. It is also appropriate that the operators should ultimately bear the cost of assessing environmental damage and, as the case may be, assessing an imminent threat of such damage occurring.
Justification This amendment reflects Amendment 35 adopted by Parliament at first reading. In view of the possible consequences of the authority's actions, it is necessary and essential that a clear causal link be proved between the operator's acts or failure to act and the environmental damage or imminent threat thereof.
Amendment 5 Recital 20
(20) An operator should not be required to bear the costs of preventive or remedial actions taken pursuant to this Directive in situations where the damage in question or imminent threat thereof is the result of certain events beyond the operator's control. Member States may allow that operators who are not at fault or negligent shall not bear the cost of remedial measures, in situations where the damage in question is the result of emissions or events explicitly authorised or where the potential for damage could not have been known when the event or emission took place.	An operator should not be required to bear the costs of preventive or remedial actions taken pursuant to this Directive in situations where the damage in question or imminent threat thereof is the result of certain events beyond the operator's control. Member States shall allow that operators who are not at fault or negligent shall not bear the cost of remedial measures, in situations where the damage in question is the result of emissions or events explicitly authorised or where the potential for damage could not have been known when the event or emission took place. If a Member State does not allow operators not to bear the cost of remedial measures in the above circumstances, such situations should be treated as mitigating factors by the competent authority or reviewing court or tribunal when deciding the level of responsibility and the amount of compensation in respect of liability to be recovered from an operator.
Justification In the interests of uniform framework conditions in the European Union, comparable rules should apply to operators in all Member States. This is the only way to achieve a modicum of harmonisation. All Member States should therefore allow that operators shall not bear the cost of remedial measures, in situations where the damage in question is the result of emissions or events explicitly authorised or where the potential for damage could not have been known when the event or emission took place.
Amendment 6 Article 2, paragraph 3, (a) and (b)
3.   'protected species and natural habitats' means:	3.   'protected species and natural habitats' means:
(a)   the species mentioned in Article 4(2) of Directive 79/409/EEC or listed in Annex I thereto or listed in Annexes II and IV to Directive 92/43/EEC;	(a) the species mentioned in Article 4(2) of Directive 79/409/EEC or listed in Annex I thereto or listed in Annexes II and IV to Directive 92/43/EEC; the obligation to take remedial measures for such species shall be restricted to designated Natura 2000 protection areas;
(b)   the habitats of species mentioned in Article 4(2) of Directive 79/409/EEC or listed in Annex I thereto or listed in Annex II to Directive 92/43/EEC, and the natural habitats listed in Annex I to Directive 92/43/EEC and the breeding sites or resting places of the species listed in Annex IV to Directive 92/43/EEC; and,	(b)   the habitats of species mentioned in Article 4(2) of Directive 79/409/EEC or listed in Annex I thereto or listed in Annex II to Directive 92/43/EEC, and the natural habitats listed in Annex I to Directive 92/43/EEC and the breeding sites or resting places of the species listed in Annex IV to Directive 92/43/EEC; the obligation to take remedial measures for such habitats shall be restricted to designated Natura 2000 protection areas; and,
Justification This amendment makes it clear that according to this Directive there can only be liability in respect of species and habitats under EU law in the case of designated Natura 2000 protection areas. Liability is therefore rendered clearer and more predictable. The third subparagraph of this paragraph which provides that under national law certain habitats and species may be included in the scope thereof by the Member States is unaffected by this provision.
Amendment 7 Article 2 Number 11
(11)   "remedial measures" means any action, or combination of actions, including mitigating or interim measures to restore, rehabilitate or replace damaged natural resources and/or impaired services, or to provide an equivalent alternative to those resources or services as foreseen in Annex II;	(11)   "remedial measures" means any action, or combination of actions, including mitigating or interim measures to restore, rehabilitate or replace damaged natural resources and/or impaired services, as foreseen in Annex II;
Justification The aim of this Directive is the remedying of environmental damage, that is first and foremost the restoration of the state of affairs which would have existed if the damaging event had not taken place. In many cases, however, a complete restoration of the identical earlier situation will not be possible. The concept of compensatory remediation, or of compensation for the temporary loss of natural resources, expressed here in connection with Annex II, does not seek to restore the environment but bears the hallmarks of a system of penalties or criminal damages, which no longer has anything to do with the objectives of the Directive. In particular this raises serious problems of monetary valuation which make it much harder to apply the new provisions in practice and notably raise serious problems of insurability.
Amendment 8 Article 2, paragraph 14
(14)   'baseline condition' means the condition at the time of the damage of the natural resources and services that would have existed had the environmental damage not occurred, estimated on the basis of the best information available;	(14)   'baseline condition' means the framework conditions for the restoration of the condition at the time of the damage of the natural resources and services that would have existed had the environmental damage not occurred, estimated on the basis of the best information available;
Justification In creating the framework conditions for restoring the baseline condition, the polluter has done everything possible to remedy the damage. Actually bringing about the baseline condition may, however, take many more years in which the polluter should be freed of environmental liability.
Amendment 9 Article 4, paragraph 1
1.   This Directive shall not cover environmental damage or an imminent threat of such damage caused by:	1.   This Directive shall not cover environmental damage or an imminent threat of such damage caused by:
(a)   an act of armed conflict, hostilities, civil war or insurrection;	(a)   an act of armed conflict, hostilities, civil war or insurrection or terrorist acts;
(b)   a natural phenomenon of exceptional, inevitable and irresistible character.	(b)   a natural phenomenon of exceptional, inevitable and irresistible character.
	(c)   an emission or event allowed in applicable laws and regulations, or in the permit or authorisation issued to the operator;
	(d)   emissions or activities which were not considered harmful according to the state of scientific and technical knowledge at the time when the emission was released or the activity took place;
	(e)   activities in line with good agricultural and forestry practice
	2.   Points (c) and (d) shall not apply if the operator has been negligent.
Justification It is vital to retain the two exceptions initially provided for in Article 9 of the Commission’s proposal, namely systematic exclusion from liability where the operator has complied with the provisions of his authorisation to operate, without reversing the burden of proof, and where justified by the state of the art. An operating authorisation must provide legal security for the operator and the provision included in the common position would allow that legal security to be called into question at any time. The result would be that authorisations issued by the public authorities would be devoid of legal value, something which is unacceptable. Furthermore, amendment 91, which was adopted in plenary at first reading and introduced the principle of attenuating circumstances (in other words, ways for the operator in question not to meet the financial burden of preventive or remedial measures), is unacceptable, since it is tantamount to assuming liability on the part of operators. Reintroduces in part amendments 38, 86 and 103 from first reading.
Amendment 10 Article 5, paragraph 3, point (d)
(d)   itself take the necessary preventive measures.	(d)   itself take the necessary preventive measures where rapid action is needed owing to the imminent danger of environmental damage and the operator has failed to act.
Justification This amendment reflects Amendment 100 adopted by Parliament at first reading. It is intended to ensure that that the preventive measures are taken in close agreement with the operator.
Amendment 11 Article 5, paragraph 4
4.   The competent authority shall require that the preventive measures are taken by the operator. If the operator fails to comply with the obligations laid down in paragraph 1 or 3(b) or (c), cannot be identified or is not required to bear the costs under this Directive, the competent authority may take these measures itself.	4.   The competent authority shall ensure that the preventive measures are taken by the operator. If the operator fails to comply with the obligations laid down in paragraph 1 or 3(b) or (c), cannot be identified, or is not required to bear the costs under this Directive, the competent authority shall take the preventive measures itself when the cost of these measures is not disproportionate in relation to the environmental benefits to be obtained and there is an imminent threat of a serious damage.
Justification This amendment aims to compromise the concerns of the Parliament following the weakening of the subsidiarity state responsibility in the CP with the Council's reluctance towards full state responsibility with regard to the costs related to preventive actions.
Amendment 12 Article 6, paragraph 2, point (e)
(e)   itself take the necessary remedial measures.	(e)   itself take the necessary remedial measures, as a means of last resort.
Justification This amendment reflects Amendment 101 adopted by Parliament at first reading. It is intended to ensure that that preventive measures are taken in close agreement with the operator.
Amendment 13 Article 6, paragraph 3
3.   The competent authority shall require that the remedial measures are taken by the operator. If the operator fails to comply with the obligations laid down in paragraph 1 or 2(b), (c) or (d), cannot be identified or is not required to bear the costs under this Directive, the competent authority may take these measure itself.	3.   The competent authority shall ensure that the remedial measures are taken by the operator. If the operator fails to comply with the obligations laid down in paragraph 1 or 2(b), (c) or (d), cannot be identified, or is not required to bear the costs under this Directive, the competent authority shall take the remedial measures itself when the cost of these measures is not disproportionate in relation to the environmental benefits to be obtained and the damage is serious in accordance with Annex II.
Justification This amendment aims to compromise the concerns of the Parliament following the weakening of the subsidiarity state responsibility in the CP with the Council's reluctance towards full state responsibility with regard to the costs related to remedial actions.
Amendment 14 Article 8, paragraph 2, subparagraph 1
2.   Subject to paragraphs 3 and 4, the competent authority shall recover, inter alia, via security over property or other appropriate guarantees from the operator who has caused the damage or the imminent threat of damage, the costs it has incurred in relation to the preventive or remedial actions taken under this Directive.	2.   Subject to paragraph 3, the competent authority shall recover, from the operator who has caused the damage or the imminent threat of damage, the costs it has incurred in relation to the preventive or remedial actions taken under this Directive, where it can prove a clear causal link between the operator’s acts or failure to act and the environmental damage or the imminent threat thereof.
Justification The aim is to remove the reference to any securities or other appropriate guarantees which might be imposed on operators by the state. Indeed, this provision contradicts the provisions of Article 14, which already provides for possible financial mechanisms, to be used by operators rather than the competent authority. The text added at the end of the paragraph serves to strengthen the need for a causal link and is taken from amendment 35, which was adopted in plenary and supported by the Commission, but not included in the common position.
Amendment 15 Article 8, paragraph 2 a (new)
	2 a. In allocating the prevention and remedial costs, the competent authority shall first consider and explore the possibility of arranging a settlement with the identified polluter(s) on the amount of financial compensation with regard to the liability of the polluter(s).
Justification In order to enhance the preventive effect of this Directive, costly and time-consuming legal procedures shall be avoided. Litigation only benefits lawyers, rather than contributing to an effective regime for the prevention of damage. By settling the amount of financial compensation, funds for remediation are available more quickly than through lengthy judicial procedures. Further damage can thus be prevented.
Amendment 16 Article 8, paragraphs 3 and 4
3.   An operator shall not be required to bear the cost of preventive or remedial actions taken pursuant to this Directive when he can prove that the environmental damage or imminent threat of such damage:	3.   An operator shall not be required to bear the cost of preventive or remedial actions taken pursuant to this Directive when he can prove that the environmental damage or imminent threat of such damage:
(a)   was caused by a third party and occurred despite the fact that appropriate safety measures were in place; or	(a)   was caused by a third party and occurred despite the fact that appropriate safety measures were in place; or
(b)   resulted from compliance with a compulsory order or instruction emanating from a public authority other than an order or instruction consequent upon an emission or incident caused by the operator's own activities.	(b)   resulted from compliance with a compulsory order, injunction or other legally binding measure emanating from a public authority;
In such cases Member States shall take the appropriate measures to enable the operator to recover the costs incurred	(c)   was caused by an emission or event expressly authorised by, and fully in accordance with the conditions of, an authorisation conferred by or given under applicable national laws and regulations which implement those legislative measures adopted by the Community specified in Annex III, as applied at the date of the emission or event;
	(d)   was caused by an emission or activity or any manner of using a product in the course of an activity which the operator demonstrates was not considered likely to cause environmental damage according to the state of scientific and technical knowledge at the time when the emission was released or the activity took place.
	Paragraph 3(c) and (d) shall not apply if the operator has been at fault or negligent.
4.   The Member States may allow the operator not to bear the cost of remedial actions taken pursuant to this Directive where he demonstrates that he was not at fault or negligent and that the environmental damage was caused by: (a)   an emission or event expressly authorised by, and fully in accordance with the conditions of, an authorisation conferred by or given under applicable national laws and regulations which implement those legislative measures adopted by the Community specified in Annex III, as applied at the date of the emission or event; (b)   an emission or activity or any manner of using a product in the course of an activity which the operator demonstrates was not considered likely to cause environmental damage according to the state of scientific and technical knowledge at the time when the emission was released or the activity took place.	deleted
Justification Operators who cannot be held liable should not be asked to take preventive or remedial action nor to advance the costs of such measures. Exceptions based on permit compliance or state of the art knowledge should have the same standing as those based on third party causation and compliance with a compulsory public order or instruction. The wording of the common position risks undermining the current permit system and the development of appropriate financial security instruments. The downgrading of the exceptions originally provided for by the Commission to factors that would diminish the costs would introduce an unacceptable element of uncertainty into production related costs (which will affect the operator’s financial exposure), while the broad margin of discretion given to Member States by the Council will have serious repercussions on the functioning of the internal market. These provisions must therefore be harmonised within the EU’s territory. The reference to an emission needs to be removed, since under new provision Article 4(1)(c) the emissions concerned are supposed to be allowed in the permit issued to the operator. This amendment seeks to reinstate the provision from the Commission’s proposal.
Amendment 17 Article 9
This Directive is without prejudice to any provisions of national regulations concerning cost allocation in cases of multiple party causation especially concerning the apportionment of liability between the producer and the user of a product.	Where the competent authority is able to establish with a sufficient degree of plausibility and probability that one and the same instance of damage has been caused by the actions or omissions of several operators, the competent authority shall be required to apportion, the share of the costs to be borne by each operator on a fair and reasonable basis, corresponding to the actual and direct responsibility of each operator for the damage caused.
Justification In order to prevent distortion of competition between the Member States, the rules on liability should, essentially, be uniform throughout the EU. Leaving Member States the option of providing for proportional or joint and several liability would lead to wide differences between national legislation. This could result in distortion of competition within the internal market. Liability determined on a proportional basis is preferable on grounds of reasonableness and fairness. A polluter should be held liable for that part of the damage which he inflicts, not the whole of the damage. Moreover, it is virtually impossible, with the burden of proof reversed, to prove that another polluter is liable for part of the damage. Finally, there are also technical reasons related to insurance. Experts argue that insurance premiums would be disproportionately higher if liability was not determined on a proportional basis.
Amendment 18 Article 10
The competent authority shall be entitled to initiate cost recovery proceedings against the operator, or if appropriate, a third party who has caused the damage or the imminent threat of damage in relation to any measures taken in pursuance of this Directive within five years from the date on which those measures have been completed or the liable operator, or third party, has been identified, whichever is the later.	The competent authority shall be entitled to initiate cost recovery proceedings against the operator, or if appropriate, a third party who has caused the damage or the imminent threat of damage in relation to any measures taken in pursuance of this Directive within three years from the date on which those measures have been completed or the liable operator, or third party, has been identified, whichever is the later.
Justification For the taxpayer's sake, cost recovery proceedings should be initiated rapidly. This is also in line with the 'polluter pays' principle. There is no reason why the authorities should take five years to do so.
Amendment 19 Article 11, paragraph 1
1.   Member States shall designate the competent authority(ies) responsible for fulfilling the duties provided for in this Directive.	1.   Member States shall designate the legal or administrative authority(ies) responsible for fulfilling the duties provided for in this Directive.
Justification Designation of the competent authority(ies) should be covered by the same framework and similar guidelines in all Member States so as to prevent distortions of competition and give easier access to means of redress.
Amendment 20 Article 12, paragraph 5
5.   Member States may decide not to apply paragraphs 1 and 4 to cases of imminent threat of damage.	deleted
Justification Just because there is an imminent threat of environmental damage, this does not mean that qualified entities should not have the right to request a competent authority to take action or that a competent authority should not be obliged to inform the qualified entity of the actions it has taken pursuant to such a request. It is precisely in cases where there is an imminent threat of damage that affected citizens/qualified entities are most likely to exercise their rights.
Amendment 21 Article 14 Paragraph 1
(1)   Member States shall take measures to encourage the development of financial security instruments and markets by the appropriate economic and financial operators, including financial mechanisms in case of insolvency, with the aim of enabling operators to use financial guarantees to cover their responsibilities under this Directive.	(1)   Member States shall take measures to encourage the development of financial security instruments and markets by the appropriate economic and financial operators with the aim of enabling operators to use financial guarantees to cover their responsibilities under this Directive.
Justification The development of reliable financial security systems should not be rendered more difficult by also insuring the insolvency risk of the operator. This would make the calculation of insurance premiums even more complicated and at all events significantly higher than desired.
Amendment 22 Article 14, paragraph 2
2.   The Commission, before ..................* shall present a report on the effectiveness of the Directive in terms of actual remediation of environmental damages, on the availability at reasonable costs and on conditions of insurance and other types of financial security for the activities covered by Annex III. In the light of that report, the Commission may submit proposals for mandatory financial security.	2.   Five years after the entry into force of this directive, the Commission shall report to the European Parliament and the Council on the above-mentioned measures adopted by the Member States. If no appropriate instruments or markets for insurance or other forms of financial security have been established, the Commission shall in the light of that report, submit proposals on a harmonised compulsory financial guarantee for water and soil damage based on a gradual approach. After a two year assessment period, this provision shall apply to the reparation of damages caused to species and natural habitats.
	2a.   A ceiling may be established for the financial guarantee by case and by location, to be determined in accordance with a sliding scale drawn up by the Member States, taking into account in particular the risks of the activities carried out and the annual turnover.
	2b.   Member States may decide not to apply this provision to low risk activities and may consider establishing thresholds in relation to any insurance requirements under these provisions.
*    Eight years after the entry into force of this Directive
Justification Covers ams. 5 on Draft Report PE 332.617 and 62 on document for amendments PE 336.617/10-92.
Amendment 23 Article 16 Paragraph 2
(2)   This Directive shall not prevent Member States from adopting appropriate measures, such as the prohibition of double recovery of costs, in relation to situations where double recovery could occur as a result of concurrent action by a competent authority under this Directive and by a person whose property is affected by environmental damage.	(2)   Member States shall adopt appropriate measures, such as the prohibition of double recovery, in relation to situations where double recovery could occur as a result of concurrent action by a competent authority under this Directive and by a person whose property is affected by damage.
Justification This amendment reflects Amendment 53 adopted by the European Parliament at first reading which is much more clearly expressed than the Council's proposal. Double recovery in respect of the same damage should be avoided in any case.
Amendment 24 Article 17, indent 3
–   damage, if more than 30 years have passed since the emission, event or incident, resulting in the damage, occurred.	–   damage, if more than 10 years have passed since the emission, event or incident, resulting in the damage, occurred.
Justification
Amendment 25 Article 18, paragraph 1
1.   Member States shall report to the Commission on the experience gained in the application of this Directive by .........* at the latest. The reports shall include the information and data set out in Annex VI.	1.   Member States shall report to the Commission on the experience gained in the application of this Directive by.........* at the latest. The reports shall include the information and data set out in Annex VI.
*Nine    years after the entry into force of this Directive.	*Five years after the entry into force of this Directive.
Justification Due to the complexity and the different cultures in the Member States there will arise a diversity of interpretations. It is therefore useful to evaluate the functioning of the Directive after a period of six years and further harmonise hereafter based on best practices. The period before evaluating this Directive which is mentioned in the CP is too long. By waiting ten years after the implementation of this Directive, liability systems will have been crystallised in the member states to a high extent, which hampers further harmonisation. For reasons mentioned before, the Commission is assigned to come forwards with proposals, within six years after going into force of the Directive, based on best practices in order to establish European standards of definitions, restoration methods, calculation methods and the Environmental Risk Assessment Management system and a review on the experience gained regarding financial security.
Amendment 26 Article 18, paragraph 2
2.   On that basis, the Commission shall submit a report to the European Parliament and to the Council before ........... ** which shall include any appropriate proposals for amendment.	2.   On that basis, the Commission shall submit a report to the European Parliament and to the Council before ........... ** which shall include any appropriate proposals for amendment including: (a)   a clear European standard for definitions;
	(b)   clean-up standards and calculation procedures;
	(c)   a feasibility study on the introduction of an "Environmental Risk Assessment Management system (ERAM) or other similar systems like e.g. IPPC, EMAS or ISO with a view to a more effective prevention of environmental damage.
** Ten years after the entry into force of this Directive.	** Six years after the entry into force of this Directive.
Justification Due to the complexity and the different cultures in the Member States there will arise a diversity of interpretations. It is therefore useful to evaluate the functioning of the Directive after a period of six years and further harmonise hereafter based on best practices. The period before evaluating this Directive which is mentioned in the CP is too long. By waiting ten years after the implementation of this Directive, liability systems will have been crystallised in the member states to a high extent, which hampers further harmonisation. For reasons mentioned before, the Commission is assigned to come forwards with proposals, within six years after going into force of the Directive, based on best practices in order to establish European standards of definitions, restoration methods, calculation methods and the Environmental Risk Assessment Management system and a review on the experience gained regarding financial security.
Amendment 27 Article 18, paragraph 3, point a)
(a)   the application of Article 4(2) and (4) in relation to the exclusion of pollution covered by the international instruments listed in Annexes IV and V from the scope of this Directive, particularly in the light of experience gained within relevant international fora, such as the IMO and Euratom, and Conventions, and the extent to which these instruments have entered into force and/or have been implemented by Member States and/or have been modified, and taking account of all relevant instances of environmental damage resulting from such activities and the remedial action taken;	(a)   the application of Article 4(2) and (4) in relation to the exclusion of pollution covered by the international instruments listed in Annexes IV and V from the scope of this Directive, particularly in the light of experience gained within relevant international fora, such as the IMO and Euratom, and Conventions, and the extent to which these instruments have entered into force and/or have been implemented by Member States and/or have been modified, taking account of all relevant instances of environmental damage resulting from such activities and the remedial action taken, and considering the relationship between shipowners' liability and oil receivers' contributions;
Justification The Supplementary Fund established in 2003 will make additional compensation available to victims of oil pollution from oil tankers up to 750 million SDR. This fund is to be financed by oil receivers in participating countries. The shipowners are therefore de facto less liable than they used to be. The existing relationship between shipowners' liability and oil receivers' contribution will thus be distorted, as shipowners' contribution to the fund is disproportionately low. In order to shift responsibility to the shipowners, the allocation of financial compensation with regard to liability should be more balanced. Therefore a review of the developments in this relationship is desirable to guarantee a fair and proportionate allocation of responsibility between shipowners and oil receivers.
Amendment 28 Article 18, paragraph 3, point (d a) (new)
	(da)   the availability at reasonable costs and conditions of financial security instruments in relation to environmental damage.
Justification Due to the complexity and the different cultures in the Member States there will arise a diversity of interpretations. It is therefore useful to evaluate the functioning of the Directive after a period of six years and further harmonise hereafter based on best practices. The period before evaluating this Directive which is mentioned in the CP is too long. By waiting ten years after the implementation of this Directive, liability systems will have been crystallised in the member states to a high extent, which hampers further harmonisation. For reasons mentioned before, the Commission is assigned to come forwards with proposals, within six years after going into force of the Directive, based on best practices in order to establish European standards of definitions, restoration methods, calculation methods and the Environmental Risk Assessment Management system and a review on the experience gained regarding financial security.
Amendment 29 Annex II Introduction
This Annex sets out a common framework to be followed in order to choose the most appropriate measures to ensure the remedying of environmental damage.	This Annex sets out common guidelines which should be followed in order to choose the most appropriate measures to ensure the remedying of environmental damage.
Justification The competent authorities should be allowed to adopt a flexible approach in remedying environmental damage. The term 'guidelines ' is closer to this idea than 'framework'.
Amendment 30 Annex II, paragraph 1, point (a)
(a)   'Primary' remediation is any remedial measure which returns the damaged natural resources and/or impaired services to, or towards, baseline condition;	(a)   'Primary' remediation is any remedial measure which creates the framework conditions for returning the damaged natural resources and/or impaired services to, or towards, baseline condition;
Justification In creating the framework conditions for restoring the baseline condition, the polluter has done everything possible to remedy the damage. Actually bringing about the baseline condition may, however, take many more years in which the polluter should be freed of environmental liability.
Amendment 31 Annex II Point 1(c)
(c)   'Compensatory' remediation is any action taken to compensate for interim losses of natural resources and/or services that occur from the date of damage occurring until primary remediation has achieved its full effect;	deleted
Justification The aim of this Directive is the remedying of environmental damage, that is first and foremost the restoration of the state of affairs which would have existed if the damaging event had not taken place. In many cases, however, a complete restoration of the identical earlier situation will not be possible. The concept of compensatory remediation, or of compensation for the temporary loss of natural resources, expressed here in connection with Annex II, does not seek to restore the environment but bears the hallmarks of a system of penalties or criminal damages, which no longer has anything to do with the objectives of the Directive. In particular this raises serious problems of monetary valuation which make it much harder to apply the new provisions in practice and notably raise serious problems of insurability.
Amendment 32 Annex II, point 1(d)
(d)   'interim losses' means losses which result from the fact that the damaged natural resources and/or services are not able to perform their ecological functions or provide services to other natural resources or to the public until the primary or complementary measures have taken effect. It does not consist of financial compensation to members of the public.	deleted
Where primary remediation does not result in the restoration of the environment to its baseline condition, then complementary remediation will be undertaken. In addition, compensatory remediation will be undertaken to compensate for the interim losses.	Where primary remediation does not result in the restoration of the environment to its baseline condition, then complementary remediation will be undertaken.
Justification See justification for Amendment 31.
Amendment 33 Annex II, point 1.1.3
"interim losses" means losses which result from the fact that the damaged natural resources and/or services are not able to perform their ecological functions or provide services to other natural resources or to the public until the primary or complementary measures have taken effect. It does not consist of financial compensation to members of the public.	deleted
Justification See justification for Amendment 31.
Amendment 34 Annex II Point 1.2.2
Identification of complementary and compensatory remedial measures	Identification of complementary remedial measures
1.2.2.   When determining the scale of complementary and compensatory remedial measures, the use of resource-to-resource or service-to-service equivalence approaches shall be considered first. Under these approaches, actions that provide natural resources and/or services of the same type, quality and quantity as those damaged shall be considered first. Where this is not possible, then alternative natural resources and/or services shall be provided. For example, a reduction in quality could be offset by an increase in the quantity of remedial measures.	1.2.2.   When determining the scale of complementary remedial measures, the use of resource-to-resource or service-to-service equivalence approaches shall be considered first. Under these approaches, actions that provide natural resources and/or services of the same type, quality and quantity as those damaged shall be considered first. Where this is not possible, then alternative natural resources and/or services shall be provided. For example, a reduction in quality could be offset by an increase in the quantity of remedial measures.
Justification See justification for Amendment 31.
Amendment 35 Annex II, point 1.2.3
1.2.3.   If it is not possible to use the first choice resource-to-resource or service-to-service equivalence approaches, then alternative valuation techniques shall be used. The competent authority may prescribe the method, for example monetary valuation, to determine the extent of the necessary complementary and compensatory remedial measures. If valuation of the lost resources and/or services is practicable, but valuation of the replacement natural resources and/or services cannot be performed within a reasonable time‑frame or at a reasonable cost, then the competent authority may choose remedial measures whose cost is equivalent to the estimated monetary value of the lost natural resources and/or services.	deleted
Justification The system of compensatory remediation and the concept of compensation for the temporary loss of natural resources would create a kind of system of penalties. The polluter is obliged to do more than remedy the damage. In particular this would make the environmental remediation procedures substantially more difficult (problem of monetary valuation of non-availability of a natural resource).
Amendment 36 Annex II, point 1.3.2
When evaluating the different identified remedial options, primary remedial measures that do not fully restore the damaged water, protected species or natural habitat to baseline or that restore it more slowly can be chosen. This decision can be taken only if the natural resources and/or services foregone at the primary site as a result of the decision are compensated for by increasing complementary or compensatory actions to provide a similar level of natural resources and/or services as were foregone. This will be the case, for example, when the equivalent natural resources and/or services could be provided elsewhere at a lower cost. These additional remedial measures shall be determined in accordance with the rules set out in section 1.2.2.	When evaluating the different identified remedial options, primary remedial measures that do not fully restore the damaged water, protected species or natural habitat to baseline or that restore it more slowly can be chosen. This decision can be taken only if the natural resources and/or services foregone at the primary site as a result of the decision are compensated for by increasing complementary actions to provide a similar level of natural resources and/or services as were foregone. This will be the case, for example, when the equivalent natural resources and/or services could be provided elsewhere at a lower cost. These additional remedial measures shall be determined in accordance with the rules set out in section 1.2.2.
Justification See justification for Amendment 31.
Amendment 37 Annex III paragraph 7 introductory part
7.   Manufacture, use, storage, processing, filling, release into the environment and onsite transport of	7.   Manufacture, use, storage, processing, filling, release into the environment and transport of
Justification Because of the change in structure of this Annex, Paragraph 7 of Annex III now lists several Community Directives under one point which were listed separately in the Commission proposal. Therefore the restriction to “onsite” transport only, is a further new restriction of the application of the Directive when compared to the Commission proposal (in particular as regards the measures relating to biocidal and plant protection products).
Amendment 38 Annex III, Number 10
10.   Any contained use, including transport, involving genetically modified micro-organisms as defined by Council Directive 90/219/EEC of 23 April 1990 on the contained use of genetically modified micro-organisms.	10.   Any contained use, including transport, involving genetically modified micro-organisms as defined by Council Directive 90/219/EEC of 23 April 1990 on the contained use of genetically modified micro-organisms, providing it is not classified as an activity without - or with negligible -risk..
Justification This amendment is intended to clarify matters regarding the Directive 90/219/EEC on the contained use of genetically modified micro-organisms. It would be contradictory if the activities mentioned therein were assessed by definition as safe while at the same time being subject to the new EU risk liability legislation.
Amendment 39 Annex III Number 11
11.   Any deliberate release into the environment, transport and placing on the market of genetically modified organisms as defined by Directive 2001/18/EC of the European Parliament and of the Council.	11.   Any deliberate release into the environment, transport and placing on the market of genetically modified organisms as defined by Directive 2001/18/EC of the European Parliament and of the Council, except if the genetically modified organisms were found to be safe for the environment.
Justification This clarification which reflects the wording of Directive 2001/18/EC is essential to make the proposed directive compatible with existing legislation and cover potentially dangerous genetically modified organisms.
Amendment 40 Annex VI, point 5 a) (new)
	5a)   Results on the promotion of and experience made on the implementation of financial security instruments used for the purpose of this Directive.
Justification Relevant information from Member States is necessary for the Commission in order to report adequately on the state of the financial security in the Member States.

• [1] Texts Adopted, 14.5.2003, P5_TA(2003)0211.
• [2] OJ C C 151, 25.6.2002

EXPLANATORY STATEMENT

Although the rapporteur is of opinion that the CP is a step in the right direction, some issues need to be improve in order to meet the concerns expressed previously. For the same reasons, other issues should not touched upon.

1.   Scope

The scope of the Directive in the CP is in line with the scope as proposed by the Commission. The rapporteur is not in favour of an immediate extension of the scope, as a restriction of the scope will be beneficial for the development of financial security instruments at short term. Moreover, the Member States should be given the opportunity to gain experience with this new field of legislation. The CP's review clause provides a sufficient possibility to extend the scope of this Directive to other occupational activities than currently falling under this Directive.

2.   International treaties and conventions

With regard to the relation between international treaties and conventions and this Directive, the Council has taken on board amendments by the EP stating that this Directive should be applied when Member States have not ratified certain international treaties and conventions yet. The wish of the Parliament that the Commission shall provide a gap analysis of the relevant international conventions and Community legislation has been covered in the CP's review clause, which according to Article 18 paragraph 2 shall include any appropriate proposals for amendment. Bearing both considerations in mind, the rapporteur is of opinion that this article from the CP does not need to be amended.

3.   Subsidiary state responsibility

The rapporteur regrets the undermining in the CP of the provisions on subsidiary state responsibility with regard to the costs of preventive and remedial actions (Article 5 and 6). The replacement of "shall" by "may" is considerably weakening the Commission's proposal and the Parliament's text in first reading and endangers an effective regime for the prevention and remediation of environmental damage. Environmental damage needs to be remedied all cases. To ensure this, the safety net function of the government needs to be maintained. In many Member States, the government is currently already obliged to take care for the conversation of areas designated by Community legislation such as the Birds and Habitats directives.

4.   Cost allocation in cases of multiple party causation

In order to prevent a distortion of competition between the Member States, the rules on liability should, essentially, be uniform throughout the EU. Leaving the option of providing for proportional or joint and several liability to Member States would lead to wide differences between national legislation. This may harm fair competition within the internal market. Liability determined on a proportional basis is preferable on grounds of reasonableness and fairness. A polluter should be held liable only for that part of the damage which he inflicts, not the whole of the damage. Moreover, it is virtually impossible, with the burden of proof reversed, to prove that another polluter is liable for part of the damage. Finally, there are also technical reasons related to insurance. Experts argue that insurance premiums would be disproportionately higher if liability was not determined on a proportional basis.

5.   Mitigating factors

The Directive has been eroded by referring to national provisions in Member States when it concerns the application of defences. Where the EP attributed a true mitigating character to the permit and state-defences, the wording in the CP can be considered as a significant weakening, leading to legal insecurity and a kaleidoscope of liability regimes along the EU, as this vital issue is in the CP subject to subsidiarity. Hence, the harmonising character of the Directive will be undermined as some Member States may introduce a defence while others may not. This does not benefit the environment nor the industry. Besides, the wording of the CP may harm the development of appropriate financial security instruments, which is a cornerstone to effectively preventing damage. A stipulation which is binding in all Member States is therefore more appropriate. With a view to the broad political support in EP's first reading for the concept of the mitigating factor, the rapporteur will re-introduce a provision on the mitigating factors which is more compelling with a view to guaranteeing a level playing field. An emission or event and its foreseeable effects, specifically and explicitly allowed in applicable laws and regulations, or in the permit or authorisation issued to the operator, shall be considered as a factor to mitigate the level of financial compensation with regard to liability. The mitigating scale can be a continuum ranging from 0 to 100%, where 100% mitigation is a full exemption. As sound agricultural and forestry practices are generally recognised as environmental friendly activities, they can be considered as 100% mitigation.

6.   Financial security

The key question here is the necessity and desirability of a compulsory mode of financial security to be incorporated in this directive. The rapporteur is convinced that an obligatory character of financial security contributes to the preventive working of this Directive. However, an immediate introduction of a mandatory scheme is not desirable nor feasible. The conditions to insure environmental liability have to be present in the Directive. The Directive in its current fashion does not shape those criteria sufficiently. Besides, the lack of experience with environmental liability in the Member States is another argument not to introduce mandatory financial security right from the outset. The introduction of a regime of mandatory insurance should be based on a phase-in approach. In some Member States, there is already experience with insurance systems related to environmental damage to water and soil. These kind of damages are quantifiable whereas damages to natural species and habitats are not for the time being.

7.   ERAM

From the point of view of the issuing authority, a permit is only a true and full exemption if it is based on the highest risk-level an operator may face following its occupational activity. Therefore, permits issued by local authorities will be extremely detailed and over-regulated in their character and narrow in their scope, as local authorities take over responsibility in case of an imminent threat or incident. The risk-level on which the regulation in the permit is based may not always reflect the actual risk-level of the operators' activities. This, in turn, may lead to a disproportionate administrative burden for operators. Therefore, a differentiated system of responsibility is more fair.

According to that system, operators can opt for a level of responsibility following a continuum of a highly regulated and strict permit, leading to frequent and intensive control by the government on the one side and, on the other side, a more open permit system, tailor-made to the actual risk-level of the operator's activities. With the first option, the full responsibility lies at the issuer of the permit, in most cases the government. With the second option, the responsibility to supervise and control environmental performance shifts to the operators. In this case, the local permit system can be replaced by a European equivalent.

The idea is to introduce a European recognised Environmental Risk Assessment Management (ERAM) system, with professional requirements and auditing standards comparable with financial audits by business accountants. This systems can be based on the best practices of the existing systems. No new system will thus be introduced. The introduction of a European accepted and recognised ERAM system to be controlled by certified verifiers, should reduce the administrative burden for operators. The results of the risk assessment are to be published in a public register. The government can conduct random checks. Due to its public character, interest groups have access to the environmental performance of companies as well. By this increased transparency, a superior and inferior performing companies will be sorted out. The government can subsequently focus their efforts on a minority of those operators with an inferior environmental performance. The ERAM certification can be considered as a proof of high technological standard, which means more that the ordinary compliance with laws and regulations. ERAM shall therefore make the efforts of the industry to carry a responsible care more effective. Moreover, because of the enhanced corporate autonomy and flexibility, the administrative burden for companies can decrease.

ERAM should be a European risk assessment system in accordance with existing system e.g. ISO 14015 or 19001. The ERAM system is voluntary, but once committed, its stipulations are binding. An incentive and reward for using ERAM is that only users of ERAM are permitted to use the state-of-the-art defence. If it is not possible to establish such a system in a reasonable way, especially for farmers and SMEs, the state-of-the-art can be considered as an exemption.

A system of compulsory financial security should be linked to this system. This creates a preventive systems with a triple control layer of control. The first layer the certified verifier, the second control is the random check by the government, a final control mechanism is given by the insurance company.

Finally, a uniform framework for a European system for environmental risk assessment will shape clarity and contribute to the prevention of environmental damage to a larger extent. Currently, different EU directives create a broad range of instruments used by the member states to prevent more and more efficiently environmental damages. Well-known directives are the Seveso II, IPPC and EMAS. Some of these instruments are compelling, others are voluntary. Some of these impose considerable (administrative) burdens to national and local authorities and to companies. The impression remains that this kaleidoscope of systems has not yet effectively contributed to the objective to prevent environmental damage.

The introduction of the above-explained package will significantly contribute to the prevention of environmental damage, while the (financial) damage for the government will be diminished.

The rapporteur proposes an amendment which asks the Commission to conduct a feasibility study on the introduction of ERAM.