Case C‑378/08, Raffinerie Mediterranee

Another important case on the polluter pays principle (see my previous post on this principle). The dispute concerned the Priolo Gargallo Region in Sicily (pictured left), which had been declared a “Site of National Interest for decontamination purposes’, and in particular the Augusta roadstead. The roadstead had been affected by recurring incidents of environmental pollution, dating back as far as the 1960s, when the Augusta-Priolo-Melilli site was established as a hub for the petroleum industry. Since that time, numerous undertakings operating in the hydrocarbon and the petrochemical sectors had been set up and/or succeeded one another in the region.

The area was the subject of a “characterisation” designed to assess the condition of the land, the water-table, the coastal sea and the seabed. In accordance with Art. 9 of Ministerial Decree No 471 of 25 October 1999, the undertakings established on the petrochemical site, as owners of land-based industrial areas located on the site of national interest, submitted proposals for emergency safety measures and measures for decontaminating the water-table, which were approved by interministerial decree.

By various successive measures and in view of the delay in Implementing the proposed measures, for which it criticised the undertakings concerned, the competent public authority required the undertakings to decontaminate and reinstate the seabed of the Augusta roadstead, and in particular to remove contaminated sediment existing there up to a depth of two metres. It indicated that, if those undertakings failed to comply, the works would be carried out by the authorities of their own initiative at the expense of those undertakings.

Claiming that such a task was impracticable and would expose them to disproportionate costs, the undertakings concerned brought actions against those administrative decisions. The lower national court upheld the actions. That judgment was challenged by the administrative authorities Council of Administrative Justice for the Region of Sicily, which ordered the judgment be stayed.

Faced with the refusal to comply on the part of the applicant companies, the administrative authorities decided that the companies should be required to take further measures, including the building of a dam. The applicants in the main proceedings brought a new action against that decree and other related administrative measures before the Tribunale amministrativo regionale della Sicilia, which referred several questions to the Court of Justice.

The referring court stated that the practice of the competent public authority as it currently stood consisted in making the undertakings operating in the Augusta roadstead shoulder responsibility for existing environmental pollution, without any distinction being made between past and present pollution or any assessment carried out as to the direct responsibility of each of the undertakings concerned for the damage. It pointed out in particular that there had been a whole succession of petrochemical undertakings in the area, so that it would be not only impossible but also pointless to determine each individual’s share of responsibility, especially since the very fact of pursuing activities which were in themselves hazardous on a contaminated site should be regarded as sufficient to hold those undertakings liable.

The Tribunale amministrativo regionale della Sicilia asked, in essence, whether the “polluter pays” principle, as laid down in  Art. 174(2) EC, and the provisions of Directive 2004/35, which sought to give that principle concrete expression in the field of environmental liability, precluded national legislation which allowed the competent authority to impose measures for remedying environmental damage on commercial operators on account of the fact that their installations were located close to a contaminated area, without carrying out any preliminary investigation into the occurrence of the contamination or establishing a causal link between the environmental damage and those operators or indeed intent or negligence on the part of those operators.
The environmental liability mechanism laid down in Directive 2004/35

Art. 4(5) of Directive 2004/35 provided that the directive was to apply to that kind of pollution only where it was possible to establish a causal link between the damage and the activities of individual operators. The Court reiterated that Directive 2004/35 did not specify how such a causal link was to be established. Under the shared competence enjoyed by the European Union and the Member States in environmental matters, where a criterion necessary for the implementation of a directive adopted on the basis of Art. 175 EC had not been defined in the directive, such a definition fell within the competence of the Member States and they had a broad discretion, in compliance with the Treaty rules, when laying down national rules developing or giving concrete expression to the “polluter pays” principle (see Case C254/08 Futura Immobiliare and Others [2009], on which I wrote this post).

Since, in accordance with the “polluter pays” principle, the obligation to take remedial measures was imposed on operators only because dof their contribution to the creation of pollution or the risk of pollution (see Case C188/07 Commune de Mesquer [2008] on which I wrote this post), in order for such a causal link to thus be presumed, the competent authority must have plausible evidence capable of justifying its presumption, such as the fact that the operator’s installation was located close to the pollution found and that there was a correlation between the pollutants identified and the substances used by the operator in connection with his activities.

If the Tribunale amministrativo regionale della Sicilia considered that the pollution in question in the main proceedings was diffused and no causal link could be established, such a situation did not fall within the scope ratione materiæ of Directive 2004/35 but within that of national law.

The Court stressed, however, that, if the referring court reaches the conclusion that Directive 2004/35 was applicable to the case before it, the following considerations were to be borne in mind.

 Arts 3(1), 4(5) and 11(2) of Directive 2004/35 must therefore be interpreted as meaning that, when deciding to impose remedial measures on operators whose activities fell within Annex III to the directive, the competent authority was not required to establish fault, negligence or intent on the part of operators whose activities were held to be responsible for the environmental damage. On the other hand, that authority must, first, carry out a prior investigation into the origin of the pollution found, and had a discretion as to the procedures, means to be employed and length of such an investigation. Second, the competent authority was required to establish, in accordance with national rules on evidence, a causal link between the activities of the operators at whom the remedial measures were directed and the pollution.

Furthermore, in accordance with Art. 11(4) of Directive 2004/35, operators had available to them legal remedies to challenge remedial measures adopted on the basis of the directive and the existence of any causal link between their activities and the pollution found. Second, in accordance with Art. 8(3) of the directive, such operators were not required to bear the costs of remedial actions where they could prove that the environmental damage was caused by a third party and occurred despite the fact that appropriate safety measures were in place, since it was not a consequence of the “polluter pays” principle that operators must take on the burden of remedying pollution to which they had not contributed (see, by analogy, Case C293/97 Standley and Others [1999]).

It followed that a Member State might decide, inter alia, that operators engaged in activities other than those set out in Annex III to Directive 2004/35 could be held strictly liable for environmental damage, that was to say, as defined in Art. 2(1)(a) to (c) of the directive, not only damage to protect species and habitats but also water damage and land damage.

Directive 2004/18

By its fourth question, the Tribunale amministrativo regionale della Sicilia asked the Court, in essence, whether the directives governing public contracts, in particular Directive 2004/18, precluded national legislation which allowed the competent authority to award directly to a private-sector company the planning and implementation of public works and decontamination works to reinstate a polluted site.

The Court, however, reiterated that it was for the national court before which the dispute had been brought, which alone had direct knowledge of the facts giving rise to the dispute and must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submitted to the Court. Consequently, where questions submitted concerned the interpretation of EU law, the Court of Justice was bound, in principle, to give a ruling (see also C-467/05, Dell'Orto [2007], on which I wrote this post).

Where the Court did not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it, it must refused to rule on a question referred by a national court. (see Case C188/07 Commune de Mesquer [2008], on which I wrote this post). The Court considered that it did not have sufficient information on the factual context of the fourth question referred by the Tribunale amministrativo regionale della Sicilia and must therefore declare that question inadmissible.