Liability and Punishment for Environmental Violations
By Jad Moukheiber, Legal Advisor for the United Nations Environment Programme, Regional Office for West Asia, jad.moukheiber@unep.org.bh.

An environmental regime that uses laws, regulations and standards to set forth basics and requirements for environmental protection needs appropriate means of deterrence to ensure its effectiveness.

These means of deterrence include various kinds of penalties and sanctions that can be imposed on violators and criminals who cause minor and irreparable damage to the environment whether they are natural or legal persons.

This same regime should also be “comprehensive” in terms where it has to cover, in details, all potential activities and entities that have to be regulated. It will also have to determine the liable parties and the appropriate sanctions for every environmental crime depending on its gravity and the size of damage it has caused.

There are many different types of environmental sanctions and penalties (civil, criminal and administrative). They are designed to deter, punish and restore the environment to the state it was before the spoilage (rare cases where damage is reparable). They vary according to the nature of the liability and the seriousness of the violation. (In some States, the death penalty has been used to address trafficking in endangered species).

Liability

In the field of environmental law enforcement, most States consider both Natural (individuals) and Legal Persons (corporations, factories, government entities, institutions, etc.) liable in case of environmental violation and/or non-compliance with any environmental laws and regulations. Their liability may be administrative, civil and/or criminal depending on the size of the violation and damage caused by the violator. Sanctions imposed on both persons are the same, the only difference being where a Natural person can be sentenced to jail term while the Legal person will only be shut down or fined.

When an enterprise or corporation violates an environmental law or other related law, that institution may be held liable and sanctioned according to the laws of the State of its residency.

In most States, the liability of the enterprise automatically engages the responsibility of its officials and employees according to the doctrine of the “Responsible Corporate Officer.” This doctrine considers high-levels officials and other subordinates liable for corporate actions even if they did not have direct knowledge of the violation. It presumes knowledge if the officer or employee had part in the action that violated the particular law.

In the United States , courts have applied the doctrine to hold officials civilly and criminally liable. Venezuela also allows for criminal sanctions of managers and administrators representing or acting in the name of their enterprise, as well as liability for the enterprise itself.

Public officials and government employees responsible for ensuring compliance with environmental laws may be held liable for failing to fulfill their duty. Their liability could be administrative, civil or criminal depending on the seriousness of the violation. Many examples can be found in this case. Brazil ’s public employees are subject to fines and imprisonment for up to three years for omitting the truth or withholding information about an environmental license or authorization.

In addition, independent third parties (individuals or institutions) who assure compliance of the regulated community with environmental laws and regulations can also be held liable for environmental violations. They assure compliance through monitoring auditing and inspections pursuant to legal and public requirements, and can be held responsible in cases of fraud. Consultants who prepare environmental impact assessments and environmental auditors can be held liable for falsifying documents or tampering with pollution control devices and tools.

Sanctions imposed for violation of environmental laws

As previously mentioned, violations of environmental laws incur administrative, civil and criminal liability which result in sanctions and penalties of the same nature.

Administrative penalties can include fines, closures and license revocation. Civil penalties include fines, negative publicity and installation of pollution-control technology. Criminal penalties include also fine, imprisonment and even death penalty as previously mentioned above. They are usually designed for punishment rather than correction, namely where violations are complex, intentional and their impact is severe.

Recidivism here can also incur criminal punishment in terms where the violator has a history of prior violations based on economic benefit and greed.

The difference between administrative, civil and criminal penalties lies in their enforcement. While administrative penalties are immediately enforceable by national agencies, civil and criminal penalties require judicial involvement that makes enforcement slower. Judicial review by aggrieved parties is possible for all types of penalties.

Conclusion

As this brief overview of environmental liability and sanctions illustrates, enforcement of environmental law remains a challenge due to the complexity and comprehensiveness of the environment.

For more information, please see UNEP’s Training Manual on International Environmental Law and the Manual on Compliance with and Enforcement of Multilateral Environmental Agreements.

Priority Setting in Environmental Inspections: How to Do the Right Things?
By Mr. Charles Nijssen, ARCADIS (c.e.g.e.nijssen@arcadis.nl), Mr. Tony Liebregts (tony.liebregts@minvrom.nl, please see full contact information below) and Mr. Wike Niessen (wike.niessen@minvrom.nl), The Netherlands Ministry of Housing, Spatial Planning and the Environment.

Setting priorities is highly relevant to inspecting authorities, because resources are limited in staff and funding. Authorities constantly have to make choices in planning and execution of their legal tasks. Moreover, inspecting authorities are under strong pressure from various stakeholders – political leaders, NGOs, the general public, industry – to work as effectively and efficiently as possible, without causing unnecessary burdens for all groups involved. This was a main reason for the IMPEL network (European Union Network for the Implementation and Enforcement of Environmental Law) to execute a project on gaining insight into key elements of priority setting, in order to enlarge effectiveness and efficiency.

The European Commission adopted a “Recommendation on minimum criteria for environmental inspections,” aimed at encouraging Member States to improve the quality of their inspection activities. Inspections cover a wide range of activities, including different ways of compliance checking, compliance promotion and monitoring of environmental impact and performance of controlled installations, and of its effectiveness.

Generally speaking, two different levels of prioritising environmental inspections can be made:

• On a strategic level, by means of an inspectionplan: how are inspections prioritised (principles, criteria) and the priorities themselves, a definition of the geographical area which it covers, the applicable time period, and a description of specific sites or types of controlled installations;
• On an operational level, by means of an inspection programme: when and how environmental inspections will be carried out, including issues like planning, human and financial resources, and frequency of site visits for different types of controlled installations.

An analysis of a questionnaire, developed within the project and completed by enforcement organisations within 24 European Member States, revealed that:

• Various organisations at different administrative levels deal with priority setting, with different scopes in environmental tasks, varying from environmental to housing and spatial planning issues. Most tasks concern integrated pollution control, waste, noise, air quality and (external) safety;
• Almost all involved organisations work with a kind of strategic and operational planning instrument; its content can not be understood without understanding the national, administrative and cultural context in which it has been developed and applied;
• Inspection plans cover mostly long term planning issues (varying from 1 till 5 year), define criteria, risks, the size of installations, the number of complaints, the state of the local environment, and the (non-)compliance level of (industrial) sectors;
• Inspection programmes are mostly based upon the strategic oriented inspection plans, and cover mostly short term planning issues (varying from one week until one year).

Within the project and based upon an analysis of the questionnaires, a three day workshop was organised with almost 40 delegates from 24 European countries, the IMPEL secretariat and the European Commission. The delegates discussed the various national settings in how they deal with strategic and operational aspects of priority setting, and which lessons can be learned. Practical experiences and information were exchanged by means of presentations and discussions in subgroups, which formed a basis for the definition of “essential key elements” that play a role in priority setting.

The main conclusions of the project are that priority setting has to take place within a specific national context and depends on factors such as administrative structures, legal and cultural aspects, organisation of tasks and competences of organisations involved, and human capacity, budget and qualified personnel. Moreover, the difference between inspection plans and inspection programmes, as defined in the above mentioned Recommendation, is not that easy to make in practice.

Consequently, four elements are considered as being essential for setting priorities in planning and programming of environmental inspections (in random order, further elaborated in the project report, see below):

• Assessing the context in which the inspecting authority has to perform its tasks;
• Defining the scope of all the relevant inspection tasks and activities;
• Gathering the information, needed to set the priorities; and
• Applying the tools for setting priorities.

The outcomes of the project also gained information for the review of the Recommendation, currently carried out by the Commission. Another main conclusion was that there is a need for further development of tools for priority setting, e.g., by making a practical “step-by-step” document for use in daily practise. This guidance document will be developed in a second part of the project, which is foreseen in 2007.

For more information, please contact Tony Liebregts, Project Manager, Netherlands Inspectorate for Housing, Spatial Planning and the Environment (VROM), P.O.Box 29036 , 3001 GA Rotterdam, tel: +31102244411, tony.liebregts@minvrom.nl. The main report of the first phase of the project can be downloaded via http://ec.europa.eu/environment/impel/pdf/doing_the_right_things_all_countries.pdf, its compendium with country specific information is available at http://ec.europa.eu/environment/impel/pdf/doing_the_right_things_compendium.pdf.

Compliance under the Kyoto Protocol
By Michael Gillenwater, GHG Inventory Experts Network, Princeton University, gillenwater@alum.mit.edu.

The constraints that national sovereignty places on multilateral environmental agreements (MEAs), such as the Kyoto Protocol, create problems for compliance systems. Compliance can be disaggregated into four components: monitoring, compliance determination, enforcement, and dispute resolution.

Monitoring relates to how an agreement provides for the collection and dissemination of information on relevant activities of parties. The relevant activities are those related to a party’s commitments. Most states will insist that they self-report information. Ensuring the credibility of self-reported information is a central concern for any MEA. Because information is always associated with some uncertainty, a process for compliance determination is required. Once a party is found noncompliant, an enforcement mechanism is needed to coerce compliant behavior. A dispute resolution process allows a party to appeal a determination of non-compliance before enforcement action is taken. The Protocol addresses all of these components, but like most MEAs, fails to overcome the fundamental problem of enforcement.

Monitoring of Annex I parties’ mitigation commitments under the Kyoto Protocol is centered on annual submissions of national reports. These reports “inventory” the party’s anthropogenic emissions from sources and removals from sinks of greenhouse gases. The parties to the UNFCCC and the Kyoto Protocol have agreed to guidelines laying out the requirements for these inventory submissions. The IPCC has also elaborated detailed technical guidelines on best practices and minimum standards for inventories. Inventory reports are prepared by some combination of experts from government, industry, consulting firms, research institutes, and academia, although final submission is the responsibility of the government.

Although developing countries (non-Annex I) have no mitigation commitments under the Kyoto Protocol, they must still meet strict monitoring requirements for Clean Development Mechanism (CDM) emission reduction projects. The guidelines for monitoring under CDM rely on a “case law” approach in which project developers, with approval of their host party, submit proposed methods for crediting mitigation projects.

Under the Kyoto Protocol, the determination of compliance for Annex I parties occurs in several stages. Each party’s submission is checked by the Protocol’s Secretariat as to whether it meets minimum standards of completeness. Teams drawn from a pool of trained and accredited experts that have been nominated by parties to the Protocol then review the submission. The Protocol includes an incentive for submitting high quality inventory reports. The expert review teams can recommend that “conservative adjustments” be applied to specific estimates in a submission that are judged to be of insufficient quality.

A party can then either accept the review team’s adjustment or it can appeal it to a Compliance Committee. This committee is made up of two branches: the Facilitative Branch and the Enforcement Branch. The Facilitative Branch monitors parties’ progress towards meeting their commitments and warns other parties of cases of potential non-compliance. The Enforcement Branch makes final determinations on the application of adjustments to a party’s national inventory.

Expert review teams also pass judgment on the capacity of the party—through its “national system”—to produce credible annual inventory submissions prior to the start of the commitment period in 2008 (although no procedure exists for how to handle parties that fail this test, Article 5.1).

The final determination of a party’s compliance is simply a matter of comparing its adjusted inventory totals for the commitment period (2008 through 2012) to its holdings of allowances (i.e., AAUs, CERs, ERU, and RMUs).

One of the failures of the Kyoto Protocol is its lack of any real enforcement mechanism. Although the Compliance Committee includes an Enforcement Branch, this branch actually has no power of sanction or coercion over noncompliant parties. If a party is found to be noncompliant, its eligibility to continue to participate in the Protocols flexibility mechanisms (i.e., national emissions trading, CDM, and JI) can be suspended by denying the party access to the international emission allowance transaction registry.

The parties to the Protocol have also agreed that any party that has insufficient allowances must surrender in a second commitment period 1.3 tonnes for each ton it exceeds its allowance holdings. The effectiveness of this provision, though, is limited by the fact that reduction targets for a second commitment period have not been negotiated.

Parties may appeal decisions of the Enforcement Branch to the full meeting of the parties of the Protocol, which can override a decision with a three-fourths vote.

A similar process exists for determining compliance, enforcement, and dispute resolution under the CDM through the CDM Executive Board and its Accreditation and Methodology Panels. However, the CDM also enlists the private sector to a significant degree for the work of ex ante approval of emission reduction project proposals (i.e., validation) and the ex post evaluation of actual emission reductions achieved before credits are awarded (i.e., verification).

The compliance system under the Kyoto Protocol has yet to be tested. However, even if all components work as expected, the options for enforcement are minimal. Unfortunately, there are no obvious solutions to the enforcement problem with an MEA addressing greenhouse gas emissions.