Durbuy Wednesday, 25 May 2011 By Prof. Dr. Michael G. Faure, LL.M.

1. Implementation of the Environmental Crime Directives in National Legislation: Prospects and Challenges At conference Investigation, Prosecution and Judgment of Environmental Offences Durbuy Wednesday, 25 May 2011 By Prof. Dr. Michael G. Faure, LL.M. The Flemish High Council for Enforcement of Environmental Policy www.vhrm.be

2. Structure • Introduction • Legal history: a brief account • Directives 2008/99 and 2009/123 • Effective penalties • Dissuasive penalties • Proportionate penalties • A duty to enforce • Vague notions in the directives • Other remaining issues • Concluding remarks

3. 1 Introduction • Basis: Court of Justice 13 September 2005: forcing MS to use criminal law is allowed • Directive 2008/99 of 19 November 2008: implementation by 26 December 2010 • Directive 2009/123 of 21 October 2009: implementation by 16 November 2010 • Duty on MS to punish offences with ‘effective, proportionate and dissuasive’ (criminal) penalties • Use as basis: • Economic analysis of criminal law • Theoretical literature on criminal law • Since MS differ, effective solution may differ as well, as long as penalties are ‘effective, proportionate and dissuasive’

4. 1 Introduction • Directives also contain many vague notions, may lead to implementation difficulties • Status of implementation: 15 MS have sent complete notifications; against others: infringement proceedings for non-communication • Way of implementation unknown (at least to me) • Today: look at questions and challenges in implemenation

5. 2 Legal history: a brief account • Basis: worries about implementation of EU environmental law in Member States • Implementation deficit problematic • Case C-265/95 (Spanish strawberries): • Lack of effective prosecution against violators of implementing legislation • Violation of European law • Obligation of national judges and authorities to interprete national law in conformity with directives • Case C-68/88 (Greek corn): Member States free in choosing instrument to implement directive, but penalties for violation should be effective, proportional and dissuasive

6. 2 Legal history: a brief account • First pillar poposal Directive of 13 March 2001 on protection of the environment through criminal law • Third pillar: Framework Decision of 27 January 2003 • Institutional conflict: appeal against Council Decision • Judgment of 13 September 2005 (Case C-176/03): • If application of effective, proportionate, dissuasive criminal penalties is essential measure • Necessary to ensure that rules are fully effective • Use of criminal law may be ordered

7. 2 Legal history: a brief account • Council Framework Decision of 12 July 2005 • Ship-source pollution: Directive 7 September 2005 • Court of Justice Decision of 23 October 2007 (Case C-440/05): • Determination of type and level of criminal penalties • Not within community’s sphere of competence • Case law remains relevant, also after TFEU

8. 3 Directives 2008/99 and 2009/123 • Directive 2008/99: • Criminal penalties necessary • No obligations on application of penalties in individual cases • Article 3 lists offences • Article 5: effective, proportionate and dissuasive penalties • For legal entities: the same (but not necessarily criminal) • Directive 2009/123: same model • 5a specific infringements • Article 8 effective, proportionate and dissuasive penalties • Also for legal entities

9. 4 Effective penalties 4.1 Meaning of effectiveness? • Able to reach goals set by legislator • High level of environmental protection • Ex ante test (theoretical) • Ex post (empirical) verification • Effectiveness strongly linked with proportionality and dissuasiveness, but • Autonomous meaning in functions of penalties: • 1. General deterrence (dissuasion) • 2. Restoration of harm caused in the past • 3. Prevention of future harm • Specific functions of penalty in environmental cases, may require specific penalties

10. 4 Effective penalties 4.2 Effective penalties for environmental pollution? 4.2.1 Functions of penalties • Deterrence (dissuasion) • Prevention of future harm • Restoration of harm that occurred in the past Hence, other penalties necessary than traditional penalties (fine and imprisonment)

11. 4 Effective penalties 4.2.2 Restoration of harm • Convict polluter to clean up a polluted soil • Remove waste deposited illegally • Order to compensate victims etc. • Many examples in MS-law 4.2.3 Prevention of harm • Prohibit use of installation that caused violation • Closing enterprise etc. • Many examples in MS-law e.g. • Enter in register for ‘non environmental responsible persons’ (Denmark) • Financial consequences may be huge

12. 5 Dissuasive penalties 5.1 General deterrence theory • Gary Becker: if B = benefits P = probability of being detected, prosecuted and convicted S = sanction actually imposed • Decision of polluter depends on: B >< p x S • If harm to society and benefit to polluter large and if p low, sanction should be high

13. 5 Dissuasive penalties 5.2 Does environmental law deter? • Probability of detection and prosecution low • E.g. in Flemish Region p is less than 1% • Reason: prosecutors dismiss many cases: 62% • Similar evidence from UK and Germany • Also sanctions imposed relatively low fines • Hence, expected sanctions (p x S) low • E.g. Flemish Region varying from € 87,7 to € 176 to € 181

14. 5 Dissuasive penalties 5.3 Does low expected sanctions equalize low dissuasion and low effectiveness? • Harrington paradox: expected penalties very low, nevertheless environmental (criminal) law deters • Recent evidence: Almer and Goeschl • Harrington: why do firms comply at all? 5.4 Other reasons for compliance • 1. No prosecution  nothing happens • 2. Other costs? Shaming (reputational loss) • 3. Regulatory dealings (soft approach) • 4. Subjective perceptions

15. 5 Dissuasive penalties 5.5 Effectiveness without dissuasion? • Other elements than the (financial) penalty may influence decision to comply • Some/many violations out of ignorance, not intentionally • Information strategies may be effective

16. 6 Proportionate penalties 6.1 Proportional to violated interest • Based on German legal doctrine for different models of environmental crime • Distinction between protected interest (environment, human health or administrative interest) • Type of infringement (endangerment or violation) • Allows to differentiate seriousness of offence and hence penalty • Add to porportionality = relationship between seriousness of offence and penalty

17. 6 Proportionate penalties Model I (abstract endangerment): enforces prior administrative decisions, vindicates administrative values Model II (concrete endangerment): requires proof of threat of harm to the environment. Vindication of environmental values. Usually an emission Model III (concrete harm crimes): like II, but proof of actual (environmental) harm Model IV: serious environmental pollution: eliminating the administrative link; permit shield no longer applies

18. Model I Administrative Model II Endangerment Model III Harm Model IV Serious Pollution A: human focus B: env’tl focus A: human focus. B: env’tl focus A: actual B: presumed Model I 6 Proportionate penalties Can lead to a graduated punishment approach:

19. 6 Proportionate penalties • More elements can be introduced e.g. • Mental state (knowingly or negligently) • Primary actor or inciting aiding or abetting • May allow to relate punishment to seriousness of offence

20. 6 Proportionate penalties 6.2 Graduated punishment approach in practice • Could be applied to penalties provided in MS-law • MS-law differentiates penalties to some extent, but not perfectly • Applicable to offences in the Directives? • Only to fill in proportionality requirement • Model IV may not be applicable, all require unlawfulness • Can be applied by legislator and judge

21. 6 Proportionate penalties 6.3 Usefulness of graduated punishment approach • No miracle solution or panacea • Advantage: relating types of values protected and endangerment to penalties • Can provide some guidance • More differentiation is possible according to mens rea: • 2008/99: intentionally versus serious negligence • 2005/35: intent, recklessness or serious negligence • Currently the offences cover (too) many types of behaviour • May make implementation difficult: • Ideally different penalties for different behaviour • Hence, differentiated approach desirable • Literal transposition impossible • Or to be left to the judge…?

22. 7 A duty to enforce? • Danger: paper implementation and next: nothing happens… • Spanish Strawberry’s case: lacking effective prosecution violates European law • Hence, for ECJ practical enforcement matters! • But… perfect compliance neither possible nor desirable (too costly) • Targeted monitoring may be effective to reach compliance • Hence, duty to enforce (if at all possible under EU law) not desirable • Requirements of ECJ case-law suffice

23. 8 Vague notions in the directives 8.1. Vague notions and their functions • Substantial damageCondition for criminal liability • (Non)negligible quantities or impacts In some case (unlawful shipment of waste): condition for criminal liability In other case: ground of justification • Dangerous activities and substances Too vague Hence needs transposition • Significant deterioration Condition for criminal liability

24. 8 Vague notions in the directives 8.2. Legal origins of the vague notions

25. 8 Vague notions in the directives 8.3. Admissibility of vague notions in criminal law Case law ECJ • Procura della Repubblica Italiana v. X (1996) • Provisions on minimum health and safety requirements for work with display screen equipment:“The principle of legality in relation to crime and punishment and more generally of the principle of legal certainty, precludes bringing criminal proceedings in respect of conduct not clearly defined as culpable by law” • “Habitual [use of] display screen equipment” is vague and cannot be used for criminal prosecution • Consequence: literal transposition of vague notions may be problematic

26. 8 Vague notions in the directives 8.4. Linking vague notions with environmental directives General idea: • Article 2 (a) of Directive 2008/99 refers to European environmental legislation listed in annexes A and B • These may also provide indications for the interpretation of vague notions • 72 directives and regulations are available • May have (additional beneficial) effect of providing harmonization

27. 8 Vague notions in the directives Exempels: • Substantial damage • Environmental Liability Directive? • Damage is clearly defined in Article 2 (2):“A measurable adverse change in a natural resource or measurable impairment of a natural resource service which may occur directly or indirectly” • There is significant environmental damage if thresholds of annex I are met • Of course scope of ELD different from ECD, but can be useful source of interpretation • Also directives with specific parameters e.g. • Dangerous Substances Directive (86/280) on limit values and quality objectives for discharges of certain dangerous substances (water) or • Directive 84/360 (air pollution) • Dangerous activities and substances

28. 8 Vague notions in the directives • Seveso Directive? • IPPC Directive? (Activities) • Substances: • Directive 76/464 and 2006/11 with annexes I and II: Dangerous substances (for water)? • Hazardous substances defined in article 2 (29) of FWD “Substances or groups of substances that are toxic, persistent and liable to bio-accumulate, and other substances or groups of substances which give rise to an equivalent level of concern” • Significant deterioration of a habitat within a protected site • 79/409 (wild birds) • 1992/43 (habitat) • And additional case law • Table

29. Summarising, the following sources could be called upon as sources of inspiration: 8 Vague notions in the directives

30. 8 Vague notions in the directives

31. 9 Other remaining issues • Unlawfulness? • Reference to environmental legislation listed in annexes • Unlawfulness limited to that? • Necessary to show correct implementation and penalisation of every implementing legislation? • What about temporal changes? • New directives, new annex? • COM: no clear answer yet!

32. 10 Concluding remarks • Effectiveness, dissuasion and proportionality addressed at different players: both legislator and judge • Proportionality: relationship between offence and size and type of penalty: legislator and judge • Dissuasiveness: legislator: if potential gain to offender high, social harm large and p low, effective penalties should be high • Hence also role for the judge • If insolvency risk: non-monetary sanctions necessary • Effectiveness requirement in environmental law: • Restoration of harm from the past • Prevention of future harm • Requires penalties aiming at those goals (also via administrative law?)

33. 10 Concluding remarks • Administrative fines may lead to additional deterrence • Given low prosecution rates for environmental crime • Still issues to be discussed, e.g. how to interpret proportionality requirement: graduated punishment approach in legislation or via judiciary? • May be very much dependant upon country specific characteristics • Bound to a national legal culture and path-dependency • May necessitate some differentiation to increase effectiveness • Enforcement in practice remains important, but data are largely lacking • Important issue to verify effectiveness and compliance is: • Introduce reliable data collection system in MS • In order to examine and improve:

34. 10 Concluding remarks Effectiveness of environmental criminal law in practice!