Innocent ownership rules held to be compatible with the polluter pays principle

In a judgment of 4 March 2015 (case C-534/13, Ministero dell'Ambiente e della Tutela del Territorio e del Mare v Fipa Group Srl), the Court of Justice of the European Union (CJEU) ruled that national legislation exempting innocent landowners from the obligation to take emergency, safety and remedial measures is compatible with the polluter pays principle introduced by the Environmental Liability Directive (Directive 2004/35/EC of the European Parliament and the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, hereinafter the "ELD").


The Italian authorities ordered Tws Automation Srl, Ivan Srl and Fipa Group Srl, the owners of heavily polluted land in Tuscany, to erect a hydraulic capture barrier in order to protect the groundwater table. This was deemed an "emergency safety measure". However, since the pollution was caused by activities carried out by previous owners, the companies contested the administrative decisions before the Regional Administrative Court of Tuscany, claiming the benefit of the innocent owner exemption. The Administrative Court overturned the decisions, and the Italian authorities subsequently appealed to Italy's Council of State, which requested a preliminary ruling from the CJEU.

Towards a less restrictive interpretation of the polluter pays principle
The CJEU ruled that "Directive 2004/35 must be interpreted as not precluding national legislation such as that at issue in the main proceedings, which, in cases where it is impossible to identify the polluter of a plot of land or to have that person adopt remedial measures, does not permit the competent authority to require the owner of the land (who is not responsible for the pollution) to adopt preventive and remedial measures, that person being required merely to reimburse the costs relating to the measures undertaken by the competent authority within the limit of the market value of the site, determined after those measures have been carried out."

In other words, the Court apparently states that the polluter pays principle should be interpreted less restrictively, meaning that persons other than the operator, such as the user or landowner, can also be held liable even if they did not cause the pollution. While the ELD expressly states that it targets only operators, Article 16 of the directive specifies that the Member States are allowed  to introduce more stringent rules. As AG Kokott rightly notes, this does not mean the Member States can take decisions with full discretion: the objectives of the ELD and Article 191(2) TFEU, which enshrine the polluter pays principle, cannot be undermined.

This decision departs somewhat from previous decisions, such as Raffinerie Mediterranee (ERG) SpA v Ministero dello Sviluppo Economico. In that case, the CJEU seemed to prefer a more restrictive interpretation of the polluter pays principle: the polluter must pay, and no one else. Such an approach was at odds, however, with the legislation of certain Member States. Italian law provides, for example, that, in certain cases, the administrative authority must pay for measures on contaminated sites. In this case, they can recover the costs, up to the increased market value of the land, from the "innocent" owner.

In its judgment of 4 March 2015, the CJEU clearly lends its support to the Italian approach.

Belgian law
The implications of the CJEU's judgment for the Belgian innocent ownership rules are clear.

Articles 12 and 23 of the Soil Decree (Decree of 27 October 2006 on soil remediation and protection, published in the Belgian State Gazette on 22 January 2007) provide that the operator, user or landowner does not have a remediation obligation when the following cumulative conditions are met: (1) it did not cause the pollution; (2) the soil pollution was caused before it became the operator, user or owner of the site; and, for landowners, (3) it was not aware or should not have been aware of the pollution when it purchased the land.

The Belgian rules go further than the ELD since Belgian law, on the one hand, provides for the possibility to compel the owner (not only the operator) to contribute to remediation costs but, on the other hand, exempts innocent owners from this obligation (Articles 157 and 160 of the Soil Decree).

Ultimately, the administrative authority - as is the case in Italy - is obliged to cover the remediation costs. Since innocent ownership rules have now been ruled compatible with the polluter pays principle, the Belgian legislation would appear to comply with EU law.