LIABILITY AND
COMPENSATION REGIMES
RELATED TO
ENVIRONMENTAL DAMAGE
Ricardo Crespo
Contents
1. General Backround
2. State Responsability
3. Sate Responsability and State Liability
4. Liability in international conventions
5. Civil Liability Regimes
6. Conclusions
General Backround

Numerous cases of
severe damage to the
environment that have
affected the territory of
countries all over the
world.

Global commons are at
risk.

1984
Bhopal
disaster,
gas
leak

1986 Chernobyl nuclear power
plant accident.
1986 Basel chemical spill into the Rhine
 Cyanide spill in the year 2000 from the Baia Mare
mine in northwestern Romania.
 Marine oils pill incidents that have caused
massive damage to the coasts of a number of
countries.

Common examples include:
 Land contamination as a consequence of industrial
accidents.
 Improper handling and disposal of waste;
 Water contamination as a result of various causes
including discharge of untreated industrial effluents;
 Loss of biodiversity due to a wide variety of impacts
including habitat loss and introduction of alien
species.

Tort Law

In general, concepts of liability and compensation
stem from the principles of tort law in which a
wrongful act causing injury permits the injured
party to obtain compensation, usually in the
form of money damages, through a private civil
action against the person who caused the injury.
Questions

Who should be held responsible for environmental
harm?

Who should pay for the costs involved in pollution
clean-up and restoration of the damaged
environment?

What should be the standards for acceptable
cleanups?
Legal liability is one way of forcing major polluters
to repair the damage that they have caused, to pay for
those repairs or to compensate someone for the
damages if the damage cannot be repaired.
 Liability is a necessary to ensure that persons
responsible for non-compliance resulting in
environmental damage face the prospect of having
to pay for restoration of the affected environment or
compensating for the damage caused.

Types of Liability
Civil liability operates on the level of national law, and creates a
relationship between the person liable and the person injured by
conduct for which he/she is held responsible.
 State responsibility, operates on the plane of public international
law. It creates a relationship not between two or more individuals
but between two or more states. The state, rather than a private
individual, must provide a remedy for damage that occurs as a
consequence of a breach of an international legal obligation
established by treaty or rule of customary international law.
 State liability : has been developed chiefly by the United Nations
International Law Commission (“ILC”), usually refers to the
responsibility that a state faces for harm occurring as a
consequence of a lawful activity, independently of whether there
was any violation of an international norm.

Polluter Pays Principle (PPP)

Liability can be seen as a mechanism for
implementing the “Polluter Pays Principle” (“PPP”).

The PPP was originally adopted by the Organization
for Economic Cooperation and Development
(“OECD”) in 1972, contemplates the internalization
of pollution-control costs.
1992 Rio Declaration
(Principle 16)

“National authorities should endeavour to promote
the internalization of environmental costs and the
use of economic instruments, taking into account
the approach that the polluter should, in principle,
bear the cost of pollution, with due regard to the
public interest and without distorting international
trade and investment.”
STATE RESPONSIBILITY AND THE
ENVIRONMENT

The law of state responsibility is customary international
law, developed by state practice and international
judgments.

Enforcement of public international law is rather limited
because states participate on voluntary basis and
reciprocal obligations, customary international law is
binding on the states, as it is evidence of generally
accepted state practice and opinion iuris accepted as law.
The concept of state responsibility only covers the case of
breach of the states’ own obligations owed to another
state or states.
 These obligations extend to the duty to ensure that
activities undertaken by private parties do not cause
harm to the territory of other states, as indicated by the
Trail Smelter Arbitration, but do not include the responsibility
of the private parties themselves.
 The latter is the object of civil liability regimes, which are
designed to allow private individuals or organizations causing
transboundary environmental harm to be held responsible for
such damage.



The concept of state responsibility makes an obligation
for states to act in conformity with the international
agreements or customary law.
Since the concept of state responsibility is applicable to
the field of environment, the breaches of treaty or
customary international law allow the injured state to
lodge claim against injuring (violating) state whether by
way of diplomatic action or by way of recourse to
international mechanism where such are in place with
regard to the subject matter at issue.
Most important principles of environmental
protection are imposed by customary international
law.
 One of those principles is the principle of state
sovereignty over its territory and natural
resources, which is a fundamental and the most
important principle of international law in general.


Throughout the history states could use their own natural
resources in the way they want regardless of the impact to
the territory of another state.
It is clear that this principle is no longer absolute .
 The limitation of territorial sovereignty is the obligation of
states, not to act as to injure the rights of other states.
 State
sovereignity also the principle of good
neighbourliness as well as the principle of state
responsibility for causing the environmental damage in
case that damage occurs.

Principles of Good Environmental
Governance derived from the Rio
Conference
Intergenerational Equity
 Sustainable Use
 Precaution
 Polluter pays
 Good neighbourliness
 Equity and fairness

Principles of Customary International
Environmental Law ( Ius Cogens)
Decision of the ICJ December 2015, Case between
Costa Rica and Nicaragua: 4 main principles of
International Environmental Law:
1. Due Diligence ( Part XII Law of the Sea. Environmental
protection of the marine environment)
2. Prevention: ( Part XII Law of the Sea)
3. Cooperation : Notification and Consultation.
4. Prior Environmental Impact Assessment: Pulp Mills
Case- Argentina vs. Uruguay 2010.
Prevention and Due Diligence should be reflected
with Cooperation and EIA.

Potential Principles of Customary
International Environmental Law
1 . Precautionary Principle or Approach ( Principle 15
Rio Declaration). Additional manifestation of due diligence
in environmental matters.
2. Public participation: ( Principle 10 Rio Declaration)
3. Principle of contemporeignity in the application of
environmental norms. Treaties whether they refer to
environmental issues or not , have to be interpreted in the
light of existing environmental norms at the time of the
application of the treaty. (Opinion of Judge Weeramantry
in the Gabčikovo –Nagymaros Project case 1997)
Classical principles of international law
Two potentially contradictory notions
Principle of territorial
integrity recognizes the
right of states to be free
of interference from
others
Principle of territorial
sovereignty recognizes
the freedom of states to
do as they like within
their own territory.
Principle 21 of the Declaration adopted by the
1972 Stockholm Conference on the Human
Environment

“States have, in accordance with the Charter of the
United Nations and the principles of international law, the
sovereign right to exploit their own resources pursuant to
their own environmental policies, and the responsibility to
ensure that activities within their jurisdiction or control do
not cause damage to the environment of other States or
of areas beyond the limits of national jurisdiction.”
1992 Rio Declaration (Principle 2)
 “States have, in accordance with the Charter of the
United Nations and the principles of international
law, the sovereign right to exploit their own
resources pursuant to their own environmental
and developmental policies, and the responsibility
to ensure that activities within their jurisdiction or
control do not cause damage to the environment of
other states or of areas beyond the limits of national
jurisdiction.”

Principle was repeated by Principle 2 in Declaration
on Environment and Development, adopted by the
1992 Conference held in Rio de Janeiro.
 Two most important soft-law instruments that have
dealt with state responsibility for transboundary
harm.

Principle 22 of the Stockholm Declaration provides that
states are to
 “...cooperate to develop further the international law
regarding liability and compensation for the victims of
pollution and other environmental damage caused by
activities within the jurisdiction or control of such States
to areas beyond their jurisdiction.

Principle 13 of the Rio Declaration called on States to
develop national law regarding liability and compensation
for victims of pollution and other environmental damage
 (Principle 13)
”States shall also cooperate in an expeditious and more
determined manner to develop further international law
regarding liability and compensation for adverse effects of
environmental damage caused by activities within their
jurisdiction or control to areas beyond their jurisdiction.”

Those principles are now included in various other
binding and non-binding international instruments.
 They can be found in the relevant provisions of Article
194 (2) of the Convention on Law of the Sea (1982) and
the Convention on Biological Diversity in Article 3.

The decision in the Trail Smelter arbitration is one of
the most cited decisions by courts and tribunals in the
field of state responsibility and the environment.
 The dispute was between United States and Canada
because of the air pollution coming from the Canadian
factory and causing the damage to crops in the United
States.


Trail Smelter arbitration: The tribunal decided: “that
under the principles of international law, as well as the law of
the United States, no state has the right to use or permit
the use of its territory in such manner as to cause injury by
fumes in or to the territory of another or the properties of
persons therein, when the case is of serious consequence and
the injury is established by clear and convincing evidence”


This ban of causing harm to other state has been repeated in
some other cases.
In the Corfu Channel case in 1949. In this case United
Kingdom suffered loss of human lives and damage to their
vessels because the explosions of mines in Albania‟s
territorial sea. The International Court of Justice stressed
that it was Albania‟s obligation to notify and warn about
those mines. Court held Albania responsible, set the
compensation and declared that obligation of each state is
„not to allow knowingly its territory to be used for acts
contrary to the rights of other states.”

In the Lac Lanoux case, the dispute was between Spain
and France about using the lake by France for generating
electricity. It was needed to redirect part of the water to
another river. Spain claimed that it would affect the
interest of Spanish users of river. The tribunal decided
„there was a principle which prohibits the upstream
state from alerting the waters of a river in such a fashion
as seriously to prejudice the downstream state.
In the advisory opinion to UN General Assembly
on the Legality of the Threat or Use of Nuclear
Weapons the International Court of Justice stated
that:
 “The existence of the general obligation of states to ensure
that activities within their jurisdiction and control respect the
environment of other states or of areas beyond national
control is now part of corpus of international law relating to
the environment.”

The ICJ also recognized in its Advisory Opinion on the
Legality of the Threat or Use of Nuclear Weapons and in
the Gabcikovo Case that:
“the existence of the general obligation of states to ensure
that activities within their jurisdiction and control respect
the environment of other states or of areas beyond
national control is now part of the corpus of international
law relating to the environment.”


Separate opinion of Vice-President WeeramantryIn the
Gabčikovo –Nagymaros Project case (1997) concerning the
controversy between Hungary and Slovaquia on the construction of a
dam on the Danube River:
“We have entered an era of international law in which international law
subserves not only the interests of individual States, but looks
beyond them and their parochial concerns to the greater interests
of humanity and planetary welfare. In addressing such problems,
which transcend the individual rights and obligations of the litigating
states, International environmental law will need to proceed beyond
weighing …rights and obligations… within a closed compartment of
individual State self – interest, unrelated to the global concerns of
humanity as a whole”
Gabčikovo –Nagymaros Project case
Separate opinion of Vice-President Weeramantry:
 “States that both the right to development and the right to
environmental protection are principles currently forming part
of the corpus of international law. They could operate in
collision with each other unless there was a principle of
international law which indicated how they should
be reconciled. That principle is the principle of
sustainable development which, according to this opinion,
is more than a more concept, but is itself a recognized
principle of contemporary international law.”
Gabčikovo –Nagymaros Project case

Separate
opinion
of
Vice-President
Weeramantry:“The Court, as representing the main forms of
civilization, needs to draw upon the wisdom of all cultures,
especially in regard to areas of international law which are
presently in a developmental phase. Among the principles
that can be so derived from these cultures are the
principles of trusteeship of earth resources,
intergenerational rights, protection of flora and fauna,
respect for land, maximization of the use of natural resources
while preserving their regenerative capacity, and the principle that
development and environmental protection should go hand in
hand.”
Conditions for state responsibility.
Existence of the international obligation or duty between
two states.
 An act that violates that obligation
 Loss or damage that resulted from an unlawful act.
 It is always crucial to identify the international obligation
which has been breached.
 The real problem of this concept is that state
responsibility does not provide any duty for
compensation for damage resulted from activities
that are not prohibited by international law.

Three main steps to raise a claim for damages under
international law:
1.Identifying the damaging activity attributable to a state
2. Proving the causal link between act and the damage.
3. Determining either a violation of international law or a
violation of a duty of care (due diligence).

Difference between State responsibility
and State liability
Two different legal concepts.
 State responsibility asserts that a state that violates an
international obligation has to repair harm caused to
another state.
 According to Kiss and Shelton the Trail Smelter case is
the basis for the discussion on responsibility and liability
environmental law but it left open the question of
whether a state executing due diligence would be
liable if transfrontier harm results despite the
State's best efforts.

In the Trail Smelter case the tribunal did not clarify
whether the state is liable only for intentional, reckless
or negligent behaviour (fault –based conduct) or it
should strict liability be applied.
 Therefore, in the international environmental law it is
necessary to distinguish responsibility, which
arises upon breach of an international obligation
and liability for injurious consequences of lawful
activities.


“State responsibility represents the consequence of, and
sanction against, non-performance by states of their
international obligations.” (Brian D. Smith, State Responsibility and the Marine
Environment, (Oxford University Press, 1988) p. 6 ).

Objective theory of state responsibility: Just a violation
of international law is relevant for the existence of state
responsibility, regardless of the fault of the state. The
ground for state responsibility depends on the content of
an international obligation.

Fault responsibility theory: The supporters of the
fault (culpa) theory took the Corfu Channel case as an
example to justify their point of view. In this case the
Court declared that a state which knows that a minefield
has been located in its territorial waters would be
obliged to notify states of its existence.‟ However, the
court did not mention fault (culpa) explicitly as a relevant
condition for state responsibility, but supporters of the
fault theory claimed that this was a clear proof that fault
( culpa) is a relevant element for the state responsibility.
Obligations which require no element of fault are those
obligations entailing strict responsibility‟, responsibility
for failure to achieve a required or to prevent a
prohibited result without consideration of intent or
diligence.
 Kiss and Shelton note that the legal consequences of
environmental harm cover both state responsibility for
violation of international law and liability for harm caused
by activities allowed by a state. The latter is strict or
absolute liability.

States have historically showed great reluctance to initiate
proceedings even where environmental damage is very
severe.
 The decision not to invoke the responsibility of the Soviet
Union regarding the Chernobyl disaster is an example of that
reluctance.
 After the explosion in the nuclear reactor, the radioactive
cloud crossed the air above Sweden, Germany, Austria,
Switzerland, Italy and the ex Yugoslavia.
 States accepted only to cooperate, but no other obligation
was imposed.


The Chernobyl disaster has shown that states are afraid
of possible liability of their own acts in the future.

As the states refused to accept liability for
transboundary harm, it shifted to civil liability and
transposed the liability to the 'operator' or person in
control of a hazardous activity.
The difference between state responsibility and state
liability is that liability is based on the creation of risk .
 The reasoning behind this claiming is that the state
creating risk and benefiting from the risk shall also incur
the consequences in case harmful injury occurs even for
lawful acts.


Why should states be strictly liable for activities carried
out, not by themselves but by private person on their
territory.

The private persons who economically benefit from
those activities should carry liability in a form of civil
liability. Only in case of 'partial or total default the state
should have subsidiary liability.


In case of damage resulting from hazardous activities,
state responsibility will be entailed only when rules on
international law establish obligatory standards of safety to a
state on whose territory the activities are carried out and
the state has failed to impose or to control.
Due diligence means that the states are required to adopt
legislative and administrative controls applicable to public
and private conduct, with the objective to effectively protect
other states and the global environment.
Due diligence
When the activity involves a risk of significant
transboundary damage, the state is required to take all
necessary measures to prevent it.
 By definition, due diligence is an obligation of conduct,
not an obligation of result.
 Due diligence is related to the principle of exclusive
competence of a state on its own territory.
 If the activity which may have transboundary harm is
performed by an individual on its territory, the state on
whose territory the activity is performed must make sure
to take measures for protection and control in order to
prevent the harmful effects.


State liability is defined as liability of state under public
international law and civil liability means the liability of a
natural or legal person under the domestic legislation
including the legislation established to implement the
provisions of international treaty obligations.
State responsibility and liability in
international conventions

1982 Montego Bay Convention on the Law of the
Sea, whose article 235 provides that:

“...1. States are responsible for the fulfillment of their
international obligations concerning the protection and
preservation of the marine environment.They shall be liable in
accordance with international law...”
1972 Convention on International Liability for
Damage caused by Space Objects
 Establishes rules and procedures for damage caused by
space objects and ensures the prompt payment of full
and equitable compensation to victims of such damage.
 Establishes a regime of absolute liability for the launching
state for damage caused by its space object on the
surface of the earth or to aircraft flight.


State responsibility for environmental harm is a highly
complex and rather controversial issue that has been the
subject of ongoing discussions reflected in the 2001 set
of draft articles on “Responsibility of States for
Internationally Wrongful Acts”, developed by the
UN International Law Commission, after decades of
study. Although articles refer to state responsibility in
general terms, the articles are applicable to cases of
environmental harm.
State Liability for Lawful Acts

The International Law Commission has been working on
the issue of “International Liability for Injurious
Consequences arising out of Acts Not Prohibited by
International Law (Prevention of Transboundary Damage
from Hazardous Activities)” as a question of customary
international law since 1977.

According to the draft articles, states should take all
appropriate measures “to prevent significant
transboundary harm or at any event to minimize the risk
thereof”, and states concerned “shall cooperate in good
faith and, as necessary, seek the assistance of one or
more competent international organizations in
preventing significant transboundary harm or at any
event in minimizing the risk thereof

The International Law Commission adopted, at its 56th
session in 2004, the Draft Principles on the Allocation of
Loss in the Case of Transboundary Harm arising out of
Hazardous Activities.

This is a set of eight principles, meant to apply to
transboundary damage caused by activities not
prohibited by international law which involve a risk of
causing significant transboundary harm through their
physical consequences.
State Liability for Lawful Acts
Occur only if an international instrument specifically
provides for liability.
- Only very few international agreements do so:
 The Convention on International Liability for
Damage caused by Space Objects provides for
absolute liability without a wrongful act for damage
caused on the surface of the Earth or to aircraft in flight
(article II) and for fault responsibility for other kinds of
damage (article III).
-
State Liability for Lawful Acts
Some bilateral agreements:
- 1964 Agreement between Finland and the Union
of Soviet Socialist Republics (“USSR”) on Common
Waterways, which provides that a contracting party that
causes damage in the territory of the other contracting
party through activities carried out in its own territory
shall be liable and pay compensation

While state responsibilities for environmental harm, as well
as international liability for non wrongful acts are often
discussed, states have seldom made recourse to either of
them.
- Among other reasons:
 The difficulty of ascertaining the full extent of damages.
 The fact that often the damage to the environment cannot
be fully remedied.
 The difficulty of establishing a causal link between the activity
that allegedly caused the damage and the damage suffered.




The rigidity of traditional forms of international
responsibility and of dispute settlement mechanisms and
therefore the preference for informal mechanisms for
settling environmental disputes.
The concern about establishing precedents in a very delicate
field of international relations.
For these reasons, transboundary environmental cases are
often resolved on an inter-personal level rather than among
states, that is through recourse to private rather than public
international law.
This implies that the polluter and the victim appear
directly before the competent domestic authorities.
 The transnational element present in these cases can,
however, give rise to problems of jurisdiction, choice of
the applicable law, and enforcement of judgments, leading
states to enter into treaties regulating the liability of
private individuals for environmental harm.

Civil Liability Regimes for Environmental
Damage
Prerequisites:
1) There are one or more identifiable actors (polluters).
2) The damage is concrete and quantifiable, and
3) It is possible to establish a causal link between the
damage and the actions of the identified polluter.

It is much easier to establish personal liability for activities
such as industrial accidents, hazardous waste disposal, or water
pollution from distinct “point-sources” such as end of pipe
discharge of pollutants than it is for diffuse sources of pollution.
 Diffuse sources of pollution: Agricultural or urban runoff (“nonpoint sources”), acid rain or automobile pollution where it is
difficult or impossible to link the negative environmental effects
with the activities of specific individual actors.
 Civil liability regimes can apply at the national and the international
levels.

Types of Civil Liability for Environmental
Damage
Fault liability. If liability is based on “fault” (wrong
doing) the plaintiff must prove that the perpetrator acted
with intent or that he/she acted negligently or without
due care.
 Strict liability. If liability is “strict”, fault need not be
established. No intention to violate a duty of care or a
norm and no negligence need be shown in a case to
prevail.
The plaintiff need only prove the causal link between
the action of the alleged perpetrator and the damage.

Strict liability regimes typically do provide for some
defenses:
 A person may be exonerated from liability if:
The damage was caused by:
- An act of God (or natural disaster),
- -An act of war,
- Or by the interference of a third party.

Strict liability has become an increasingly common form
of liability for environmental harm.
 For example Art.- 396 of the Ecuadorian Constitution
(2008) states that strict liability applies for environmental
damages.
 The rationale for strict liability is that an actor that
profits from potentially harmful or inherently dangerous
activities should be liable for damage that occurred as a
result of the harmful activity, an application of the
“Polluter Pays Principle”.

The distinction between strict liability and fault liability is
not always clearcut.
- Some strict liability systems allow defendants to avoid
liability if they can demonstrate that they have used the
best available technology to control pollution or that they
have complied with their environmental permits .

Absolute liability. Absolute liability differs from strict
liability because it allows no defenses to the perpetrator
apart from an act of God.
 This type of liability is rarely imposed, and only for what
are deemed ultra-hazardous activities, such as nuclear
installations.

Scope and Threshold of Environmental
Damage
In addition to traditional types of damage such as
personal injury or property damage, environmental
cases may result in damage to the environment
itself (so-called pure environmental damage).
 Damage is measured by the costs of remediating or
restoring the impaired environment. Examples of pure
environmental damage are damage to biodiversity or
natural resources.

An example of regime that recognizes damage to natural
resources as such is the USA Comprehensive
Environmental Response, Compensation and
Liability Act of 1980, which covers damage for injury or
loss of natural resources.
 Article 72 of the Ecuadorian Constitution (2008) states that
“Nature has the right to be restored”.
 Other examples:
 Italian Law N. 349/1986, art. 18 that establishes liability for
“natural resource damages”.
 EUDirective 2004/35/EC on Environmental Liability: Damage
to biodiversity.


Contamination of sites can for instance take the form of
contamination of soil, surface water or ground water,
independent from whether or not human health or
private property is affected.
Liability regimes for environmental damage normally contain cleanup standards and clean-up objectives.
 Clean-up standards: used to evaluate whether clean-up of a
contaminated site is necessary. The main criterion for this decision
is usually whether the contamination leads to a serious threat to
human health or the environment.
 Clean-up objectives: identify the quality of soil and water that is
acceptable for the type of economic activity that will be carried out
at the particular location after clean up. Clean-up objectives may be
established based on future land uses, the type of technology
available to remedy the contamination and cost considerations.

Thresholds
A number of civil liability instruments establish a
threshold, beyond which environmental damage is
deemed significant and therefore justifies the imposition
of liability, although this level may vary significantly from
one country to another.
 Article 289: Ecuadorian environmental Code: The National
Environmental authority will determine the scope and criteria
to characterize and evaluate the environmental damage as
well as the different preventive and restoration measures.

Who is Liable?
Cornerstone of an effective liability regime.
 In most conventions, the “operator” or “owner”, typically
the person who exercises control over an activity, is
liable.
 This is consistent with the Prevention and Polluter-Pays
Principles, because it provides an incentive to the person
who carries out the activity to take preventive steps to
eliminate or reduce the risk of damage, and a
compensation mechanism to pay for the costs of
environmental harm caused by the activities.





Difficulties to determine which specific individual or
organization caused environmental harm:
If several waste generators dispose of the same chemical in
a landfill, it may be impossible to identify the particular
portion of the contamination that can be attributed to a
specific contributor to the overall problem.
Some liability regimes hold all of the parties that disposed of
a particular contaminant liable for cleaning up the entire site.
This form of liability is referred to as “joint and several”
liability because each of the polluters can be held responsible
for the cost of the entire cleanup.
Forms of Compensation
In most cases of environmental damage, the victim is
likely to seek financial reparation to cover the costs
associated with material damage to environmental
resources.
 Problems arise because environmental damage cannot be
addressed with the traditional approach of civil liability,
that is, to compensate for the economic costs of the lost
or damaged property


Pure environmental damage may be incapable of
calculation in economic terms, such as in the case of
loss of fauna and flora which is not commercially
exploited and therefore has no market value and in the
case of damage to ecosystems or landscapes, economic
value cannot be assessed with and in traditional
approaches.
A fairly widely accepted solution to this problem is to
calculate the damage in the basis of the link between
reasonable costs of restoration measures, reinstatement
measures or preventative measures.
 Environmental liability regimes may also foresee
compensation for further damages exceeding those
related to the adoption of such restoration measures, when
both restoration and comparable measures, are not
technically feasible or not reasonable.
 The fact that environmental damage is irreparable or
unquantifiable should not result in an exemption from
liability.

Criteria for the calculation of damage used in different
legal systems




Linking the damage to the market price of the environmental
resource (such as in the Trail Smelter Case)
Linking the damage to the economic value attached to its
use, for example, (travel costs made by individuals to visit
and enjoy an environmental resource amenity).
Extra market value of private property where certain
environmental amenities are located.
Willingness of individuals to pay for the enjoyment of
environmental goods, such as clean air or water or the
preservation of endangered species.
Insurance



Most civil liability regimes require the operator to establish
financial security, usually in the form of insurance, to ensure
that the risk of liability is covered.
Compulsory insurance is used as a means to secure that
adequate payment of compensation is made and to avoid the
bankruptcy of companies that have to compensate for severe
damages.
However, compulsory insurance systems could reduce the
incentive for potential polluters to exercise caution and
prevent damage.
Funds
Another mechanism utilized to ensure the coverage of
damage is the creation of victim compensation funds, which
are replenished by the operators of the specific sector for
which the fund is established.
 These funds are intended to provide compensation for
victims and paying for the remedying of damages in cases
where, for different reasons, compensation cannot be
provided by the operator.
 Such funds are very common in international regimes
regulating oil pollution from ships.

International Civil Liability
When plaintiffs resort to private law to address
transboundary environmental issues a number of unique
issues are raised :
- Which court in which country has jurisdiction over the
matter.
- Which country’s laws apply, and where and how can the
judgment of the court be enforced.
- States have sought to overcome these and other
problems
through treaties regulating the liability of
private individuals
for environmental harm.


-
Most of the treaty regimes:
Define the activities or substances and the harm covered.
The criteria to establish who is liable.
The standard of care that must be exercised to avoid liability
and provide exceptions from liability.
Most agreements set limitations on the amount of liability
and provisions for enforcement of judgments.
Include provisions on mandatory insurance or other financial
guarantees and establish funds.
Several treaties establish rules on civil liability for
environmental or related damage, generally with respect
to specific activities, such as nuclear installations, oil
pollution and hazardous wastes.
 One example in Europe is the Lugano Convention on
Civil Liability for Damage resulting from
Activities Dangerous to the Environment, adopted
in 1993, but not yet in force).

The 1993 Lugano Convention
Aims at ensuring adequate compensation for damage
resulting from activities dangerous to the environment
and also provides for means of prevention and
reinstatement.
 It only applies to dangerous activities, defined as an openended category that includes but is not limited to:
hazardous substances specified in Annex I, genetically
modified organisms, micro-organisms and waste.

The 1993 Lugano Convention

-
-
It covers all types of damage:
Loss of life, personal injury, damage to property.
Loss or damage by impairment to the environment.
Costs of preventive measures (both traditional damage
and environmental damage) when caused by a dangerous
activity.
The 1993 Lugano Convention
The operator is strictly liable for damage caused during the period when he/she
exercises control over that activity, and is required to maintain insurance.
 The operator may be exonerated from liability for damage if he/she proves that the
damage was caused:
- By an act of war, a natural phenomenon of exceptional character.
- An act done with the intent to cause damage by a third party.
- When the damage resulted from compliance with a specific order from a public authority.
- Contributory fault on the part of the victim may also reduce the amount
received
in
compensation.
- Actions for compensation must be brought within three years from the date on
which
the
claimant knew or ought reasonably to have known of the damage
and of the
identity of the operator.
- In no case shall actions be brought after thirty years from the date of the incident
which caused the damage.

The International Convention on Civil
Liability for Oil Pollution Damage (“CLC”)
- Adopted in 1969 and amended by the Protocols of 1976
and 1992.
- Was adopted under the auspices of the International
Maritime Organization (“IMO”) in response to the
“Torrey Canyon” oil spill disaster of 1967.
- Establishes a regime to guarantee the payment of
compensation by shipowners for oil pollution damage.
The International Convention on Civil
Liability for Oil Pollution Damage
Places the liability for such damage on the owner of the ship from which
the polluting oil escaped or was discharged.
 The shipowner is strictly liable unless the incident is caused by war,
a natural phenomenon of exceptional character, a malicious act of a third
party, or through the negligence of the government.
 The 1992 Protocol widens the scope of the convention:
- Covers pollution damage in the Exclusive Economic Zone (“EEZ”).
-Extends the scope of the Convention to cover spills from seagoing vessels
constructed or adapted to carry oil in bulk as
cargo It applies to both laden and unladen tankers.
-Includes
spills of bunker oil from such ships.
- Limits liability to cost incurred for reasonable measures to
reinstate the environment.
-
The International Convention on the Establishment
of an International Fund for Compensation for Oil
Pollution Damage (“FUND”)
- Adopted in 1971 and amended by the Protocols of 1976
hand 1992.
- Adopted under the auspices of IMO to ensure that
adequate compensation is available to persons suffering
damage caused by oil pollution discharged from ships in
cases where compensation under the 1969 CLC was
inadequate or could not be obtained.
Other Conventions related to oil pollution
The 1996 International Convention on Liability and
Compensation for Damage in connection with the
Carriage of Hazardous and Noxious Substances by Sea
(“HNS”) .
 The International Convention on Civil Liability for
Bunker Oil Pollution Damage (“Bunker Oil Pollution”).
 The Convention on Civil Liability for Oil Pollution
Damage resulting from Exploration for and Exploitation
of Seabed Mineral Resources (“Seabed Mineral
Resources”) was adopted in 1977. ( Not yet in force)

Nuclear Installations
OECD Convention on Third Party Liability in the Field of
Nuclear Energy (“Paris Convention”), concluded in 1960
entered into force on April 1, 1968.
 International Atomic Energy Agency’s Convention on
Civil Liability for Nuclear Damage (“Vienna Convention”)
concluded in 1963 and their Joint Protocol relating to
the Application of the Vienna Convention and the Paris
Convention (“Joint Protocol”) was adopted in 1988

The 1960 Paris Convention:
The objective is ensure adequate and equitable compensation
for persons who suffer damage caused by “nuclear incidents.
-Covers cases of gradual radioactive contamination, but
not normal or controlled releases of radiation.
- Establishes a regime of absolute liability for the operator of a
nuclear installation for damage including loss of life, and damage or
loss to property other than the nuclear installation itself.
- The limitation period to bring forth a claim is ten years,
although nations
may shorten this time to a period of
not less than two years from the date
the claimant knew or
ought to have known of the damage and the identity of the operator
liable

-
Other conventions on nuclear damage
The Convention relating to Civil Liability in the Field of
Maritime Carriage of Nuclear Material (“NUCLEAR
Convention”), was adopted in 1971.
 The Convention on Supplementary Compensation for
Nuclear Damage (“CSC”) adopted in 1997.

Hazardous Wastes Regime

Basel Protocol on Liability and Compensation for
Damage resulting from Transboundary Movements of
Hazardous Wastes and their Disposal (“Basel Protocol”)
adopted in 1999 as a Protocol to the 1989 Basel
Convention on the Control of Transboundary
Movements of Hazardous Wastes and their Disposal
(“Basel Convention”).
Basel protocol
-
-
-
Damage includes traditional damage (loss of life, personal injury or
damage to property), economic loss, and the costs of reinstatement and
preventive measures (environmental damage).
Liability is strict and the notifier or exporter is liable for damage until the
disposer has taken possession of the wastes.
Fault-based liability can be imposed for intentional, reckless or negligent
acts or omissions.
The notifier is exonerated from liability if he/she proves that damage was
the result of an armed conflict or war, a natural phenomenon of
exceptional character, compliance with state law, or the intentional
conduct of a third party.
In any case, all transboundary hazardous waste movements must be
covered by insurance.
Basel protocol
It applies only to damage suffered in an area under the national
jurisdiction of a state party arising from an incident as defined, as
well as to areas beyond national jurisdiction and noncontracting
states of transit, provided those states afford reciprocal benefits on
the basis of international agreements.
- -Places a cap on financial liability and the limits correspond to the
units of shipment in tonnes (listed in the Annex B).
- Claims must be brought within ten years from the date of the
incident and within five years from the date the claimant knew or
ought reasonably to have known of the damage.
- Claims may be brought in the courts where the damage was
suffered, the incident occurred, or the residence or place of business
of the defendant.
-
Transboundary Waters

Protocol on Civil Liability and Compensation for Damage
caused by the Transboundary Effects of Industrial
Accidents on Transboundary Waters to the 1992
Convention on the Protection and Use of Transboundary
Watercourses and International Lakes and to the 1992
Convention on the Transboundary Effects of Industrial
Accidents (“Civil Liability Protocol”) adopted in 2003 but
not yet in force (as of September 2005).
Convention on the Transboundary Effects of
Industrial Accidents (“Civil Liability Protocol”)
- According to the Civil Liability Protocol:
- Companies will be liable for accidents at industrial installations, including
tailing dams, as well as during transport via pipelines.
- Damage covered by the Protocol includes physical damage, damage to
property, loss of income, the cost of reinstatement and response measures
will be covered by the Protocol.
- It sets financial limits of liability depending on the risk of the activity, based
on the quantities of the hazardous substances that are or may be present
and their toxicity or the risk they pose to the environment.
- Requires companies to establish financial securities, such as insurance or
other
- Contains a non-discrimination provision, according to which victims of
the transboundary effects cannot be treated less favourably than victims
from the country where the accident has occurred.
The Nagoya – Kuala Lumpur Supplementary
Protocol on Liability and Redress to the Cartagena
Protocol on Biosafety

Adopted by the Conference of the Parties serving as the
meeting of the Parties to the Cartagena Protocol on Biosafety
on 15 October 2010.

Liability and redress in the context of the Protocol concerns
the question of what would happen if the transboundary
movement of living modified organisms (LMOs) has caused
damage.

Article 4. Causation: A causal link shall be established
between the damage and the living modified organism in
question in accordance with domestic law.
Article 12. Implementation and relation to civil liability
1. Parties shall provide, in their domestic law, for rules
and procedures that address damage. To implement this
obligation, Parties shall provide for response measures in
accordance with this Supplementary Protocol and may, as
appropriate:

◦ Apply their existing domestic law, including, where applicable,
general rules and procedures on civil liability;
◦ Apply or develop civil liability rules and procedures specifically
for this purpose; or
◦ Apply or develop a combination of both.
2. Parties shall, with the aim of providing adequate rules and
procedures in their domestic law on civil liability for material or
personal damage associated with the damage as defined in
Article 2, paragraph 2 (b):
◦ Continue to apply their existing general law on civil liability;
◦ Develop and apply or continue to apply civil liability law specifically
for that purpose; or
◦ Develop and apply or continue to apply a combination of both.
3. When developing civil liability law as referred to in
subparagraphs (b) or (c) of paragraphs 1 or 2 above, Parties
shall, as appropriate, address, inter alia, the following elements:
◦ Damage;
◦ Standard of liability, including strict or fault-based liability;
◦ Channelling of liability, where appropriate;
◦ Right to bring claims.

Article 6. Exemptions Parties may provide, in their
domestic law, for the following exemptions:
◦ Act of God or force majeure; and
◦ Act of war or civil unrest.

Parties may provide, in their domestic law, for any
other exemptions or mitigations as they may deem
fit.
Article 7. Time limits:
 Parties may provide, in their domestic law, for:
Relative and/or absolute time limits including for
actions related to response measures; and
 The commencement of the period to which a time
limit applies.

Liability in the CBD
Article 14.2 of the CBD merely states that “[t]he
Conference of the Parties shall examine, on the
basis of studies to be carried out, the issue of
liability and redress, including restoration and
compensation, for damage to biological diversity,
except where such liability is a purely internal
matter.”
 The discussion of the Convention’s work on liability
and redress continues.

Conclusions




With the exception of oil pollution regimes the rules of international
law governing liability for environmental damage remain in their early
phases of development particularly in relation to rules of state liability
this is reflected after Chernobyl and in the remote prospect for the
entry into force of the 1993 Lugano Convention.
Significant developments include the adoption of liability protocols to
the 1989 Basel Convention .
Efforts are underway to establish new regimes in relation with the
Antarctic Environment Protocol and the 2000 Biosafety Protocol
which poses particular challenges in respect of defining what
constitutes damage.
In regard to state liability more cooperation called for by Principle 13
of the Rio Declaration remains to be addressed.
Sources
 Chapter 5: UNEP Training Manual on International
Environmental Law
http://digitalcommons.pace.edu/cgi/viewcontent.cgi?arti
cle=1789&context=lawfaculty
 Jorge E Viñuales on environmental protection in
customary international law.
http://legal.un.org/avl/ls/Vinuales_EL_video_2.html
 Principles of International Environmental Law- Philippe
Sands. Second Edition. Conclusions on Liability.