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INTERNATIONAL LEGAL REGULATION. COMPARATIVE LAW
POLLUTION AND LIABILITY ISSUES IN INTERNATIONAL ENVIRONMENTAL AGREEMENTS
DOI: http://dx.doi.org/10.14420/en.2018.1.1
Alexandre Chitov School of Law, Chiang Mai University, Thailand1, e-mail: [email protected].
Abstract. The paper critically examines the current state of international environ-
mental law in relation to liability for environmental accidents. The existing international agreements attempt to provide somewhat a technical answer to complex questions which cannot be answered without a drawing on a particular type of morality. The liability issues in environmental law are also moral issues. The moral perspective, even though always being present in international agreements, is not always clearly identified. In this article, no particular moral theory is advanced. Instead, it is argued that a meaningful discourse of environmental liability is impossible without looking at it from a moral perspective. Ignoring this perspective makes the legal mechanism flawed and defective.
Keywords: international environmental law; pollution; international agreements; li-
ability; environmental accidents.
Introduction: Torrey Canyon Case
The complexity of the polluter's liability in international law is well exemplified in the Torrey Canyon Case2. On March 18, 1967, the crude-oil super-tanker Torrey Canyon ran aground at the western entrance to the English Channel.
1 The author would like to thank Susan Jean Billstrom for reading and correcting the text, and an anonymous reviewer for the useful comments and criticism. The remaining shortcomings of the article are of the author alone.
2 The report below is largely based on the information presented in the U.S. Senate, 1969; U.S. Court of Appeals (2d Cir. 1969); Burrows, Rowley, & Owen 1974; Barkham, 2010; Vallero & Letcher, 2012.
Manned by an Italian crew, the ship was owned by the Barracuda Tanker Corporation, a Liberian-based subsidiary of the Union Oil Company of California, in the U.S., who was also the charterer, and was en route from Mena al-Ahmadi, Kuwait, to Milford Haven, England. (Vallero & Letcher, 2012, p. 140). The cargo belonged to British Petroleum Company. The tanker struck a reef because the captain had kept the ship on automatic steering and steaming at its top speed (U.S. Senate, 1969). The captain was also accused of failing to change course when advised to do so both by his third officer and by signals from a lightship.
An estimated 37 million gallons of the tanker's 118,000-ton cargo of oil had spilled (Barkham, 2010). Efforts to refloat the ship resulted in the death of one of the Dutch salvage crew and were ultimately a failure. As tugs attempted to pull the ship off the rocks, she broke in two; the following day the ship was declared a total loss. British Navy planes hit the ship repeatedly with bombs on the wreck in an effort to start fires that would consume the remaining oil before it could spread. Despite this drastic action, oil spread across 120 miles of southern England and 55 miles of the coast of Brittany in northwest France. It is estimated that 15,000 birds died, as well as untold amount of marine life (Barkham, 2010). The tourist industry in southern England and northwestern France also suffered losses. The UK and France filed the case in an American court suing both the owner and the parental company to recover the costs of environmental damage.
The American court (U.S. Court of Appeals, 2d Cir. 1969) faced difficult questions. One was regarding the identity of the person who should be liable for the environmental damage. Should it be the captain of the ship, the owner of the cargo, the charterer or the ship owner? The UK government insisted that it must be the owner and the charterer. The main argument against the ship owner and its parental company was that the damage done to the shores was caused by activities of the owner unrelated to the navigation of the vessel, and the owner had a duty to make the ship safe when designing and manufacturing the vessel. The owner of the ship denied full liability and relied upon the current international law protection. They argued that under the current law the liability of the shipowner was limited to the sum which could not be compared with the amount of damage.
Another problem was that the ship was grounded outside the UK territorial waters. The defendants argued that all reasonable precautions had been taken after the grounding to prevent or minimize the discharge of oil and that the flow of oil to the beaches had been the result of wind and tide and therefore was an act of God for which they were not responsible in law. Further, if the ship had not been bombed it was probable that the main bulk of cargo would have remained in the tanks. Another argument was that the UK government was not empowered by international law to destroy a ship which was still in the open sea and subject to the freedom of the high seas. Finally, the bombing was an act of state, so any dispute must be settled between the states, which meant the UK and Liberia. The UK argued that it was lawful to do what would otherwise be unlawful if there is a compelling necessity to act to save life or to protect the environment. The total cost of damage was estimated at over 14 million English pounds (Bur-
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rows, Rowley, & Owen 1974, p. 258) which was a significant amount at that time. On November 11th 1969, following protracted negotiations, the dispute was settled out of court for a total compensation of £3 million to be divided equally between the United Kingdom and France (ibid, p. 260).
It is difficult to foresee the result of litigation if it were to continue before the American court. The case provides a good illustration of the complex questions which international environmental law has to deal with. These questions can be summarized as follows. How is environmental liability different from other concepts of liability? What should be counted as environmental damage in international law? What types of damage must have priority to be addressed in international environmental law, to reach fairness and efficiency in regulation of environmental liability? What degrees of damage should be subject to international regulation? What should be the threshold for the imposition of liability? Who should be held liable for the environmental damage? Who shall have the right to initiate legal proceedings? What should constitute compensation for the environmental damage and what should be a reasonable compensation? What are the scope and duration of liability? By what means can the liability be dispensed? Should it be dispensed through fines, or through imprisonment, or through bearing the cost for restoration? Providing satisfactory answers to those questions is far beyond the limited scope and the purpose of this paper. A number of significant works dealing with the environmental liability in international law have already been written (Larsson, 1999; Lefeber, 1996; Magnus, 2007; Pereira, 2015). What appears, however, to be lacking is a clearer understanding that those questions cannot be answered without a drawing on a particular type of morality. The liability issues in environmental law are also moral issues. The moral perspective, even though always being present, is not always clearly identified.
When taking about a moral approach to environmental liability one has to acknowledge that there is an indefinite number of moral theories which can and do provide different answers to the same moral questions. In this paper, no particular moral theory is advanced. Instead, it is argued that a meaningful discourse of environmental liability is impossible without looking at it from a moral perspective. Ignoring this perspective makes the legal mechanism flawed and defective.
The principles of environmental liability
In deciding the case of Torrey Canyon, the main issue was who should bear the cost of the damage: English and French taxpayers or the owner of the ship. The prevailing view was and still is that an unlimited liability for the shipowner would be justified only if there was evil intent or negligence of the owner in failing to make sure that the ship was seaworthy and it was properly manned and equipped (Chalos, & Parker 2010, p. 209, 222). Further, as long as the crew was employed by the shipowner, the latter bears vicarious liability for the acts of the employee (Duff, 2009, p. 961). Considering the impact of the disaster on the environment and providing that none of the involved was guilty of evil intent or negligence, would it be morally right to require all the interested parties: the states, the owner of the cargo, the shipowner, and the charterer to contribute to cover-
ing the cost of clearing up operations according to the ability of each party? The academic discussion of the environmental liability issues rarely follow this type of moral questioning. However, the fundamental principles of environmental liability have a moral nature. Two principles are of a particular interest.
The first is the precautionary principle. It requires from those responsible for the environmental safety to introduce precautionary measures to prevent a possible harm even though there is only a likelihood of such harm and not its inevitability. This principle deals with the situations when there is scientific uncertainty concerning the environmental effects of the activity. There is a close connection between this principle on the one hand and the regime of liability for environmental pollution on the other (Ornitz, & Champ, 2002, p. 231; Sage-Fuller, 2013, p. 81). Article 13 of the Resolution on Responsibility and Liability under International Law for Environmental Damage (Institute de Droit International 1997) requires that the precautionary principle must be considered in an appropriate connection with the regimes of environmental responsibility and liability. The implication is that the amount of liability of the polluter must be assessed in the context of his measures to prevent possible harm. The polluter should also bear the cost of preventing damage to the environment.
The second principle is the polluter pays principle, which imposes liability on the person who directly caused pollution. The problem with this principle is that it can mean very different things depending on the type of liability. International environmental law recognizes three types of liability: fault liability based on intention and fault; strict liability which involves prima facie responsibility with certain defenses; and absolute liability which allows no excuse. The 1963 Vienna Convention on Civil Liability for Nuclear Damage imposes absolute liability on the operator of a nuclear installation (Art. 4). The same is in the case of state liability according to the 1972 Convention on International Liability for Damage Caused by Space Objects (Art. 2). However, the general trend in environmental law is to provide for strict liability. The 1969 International Convention on Civil Liability for Oil Pollution Damage places strict liability on the owner of the ship from which the polluting oil escaped or was discharged (Art. 3).
Since the Torrey Canyon accident, there were a number of other accidents involving the spill of oil. After the 1989 Exxon Valdez spill (Ketkar, 1995), the polluter pays principle had been reaffirmed in the U.S. Oil Pollution Act of 1990. It attempted to establish clear rules regarding who pays for the direct response activities, the cost of assessing environmental damages, and implementing the necessary restoration. The general principle of the U.S. law, as well as, international law is that those responsible for the pollution pay for all costs associated with the cleanup operations. Any urgent expenses incurred by the government to respond to pollution accidents have to be reimbursed by the polluter. The U.S. Oil Pollution Act states that parties that release hazardous materials and oil into the environment are responsible not only for the cost of cleaning up the release, but also for restoration measures (Sec. 1006d (1)). The 2010 BP spill in Mexico Gulf, however, is a good example when the polluter pays principle was
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not applied fully because of tax credits given to the polluter to meet environmental liability claims (Wray, 2010).
Under strict liability, the polluter pays principle does not apply in four different situations (Larsson, 1999, p. 210, 414). First, if the polluter can prove that the damage resulted due to natural disasters. In Common law, they are called «acts of God». They must be of exceptional, inevitable or irresistible character. Second, if it was resulted from war or hostility. Third, if there were intentional or grossly negligent acts or omissions of a third party. Fourth, if the operator complied with a specific order or compulsory measure of a public authority.
From a moral perspective, a strict liability regime may be unfair. It does not provide a defense for a conscientious operator in a dangerous activity. Some environmental harm might be morally permissible under some circumstances. However, in its drive for legal certainty, the law does not allow exceptions on moral grounds, and it may create the situation when imposing strict liability on the conscientious operator is unfair. At the same time, the polluter pays principle has a strong moral foundation. The polluter has to pay for the harm he has caused. The principle is based on the idea of «internalizing costs» which means that the price of goods produced must reflect also the price the environment has to bear as the result of this production. It would be morally wrong to allow a polluter to benefit from the cost of the environmental destruction. In other words, a strict liability mechanism can be morally justified if it provides an appropriate way to exempt a conscientious operator from liability in the light of particular situations. Indeed, some international agreements allow a defense if damages are caused «at tolerable levels» under «local relevant circumstances» or if they are caused by a «dangerous activity taken lawfully in the interests of the person who suffered the damage» (Lugano Convention on Civil Liability for Damage Resulting From Activities Dangerous to the Environment, 1993, Art. 8).
Conventions on Civil Liability for Oil Pollution Damage
It appears that international law is framed not as much by the moral considerations which would flow from the principles considered above, as from the desire to obtain legal certainty as to the possible amounts of liability for environmental harm. That can be seen in a number of international agreements dealing with the liability of polluters. One example is the International Convention on Civil Liability for Oil Pollution Damage (Brussels) adopted in 1969 which entered into force in 1975. The Convention placed the liability for oil spills on the shipowner (Art. III) unless the incident is caused by war, the act of God, a malicious act of the third party or through the negligence of the government. The Convention guarantees that some compensation is available to persons who suffer damage caused by oil pollution (Art. V (4)). However, the liability of the shipowner is limited.
The International Convention on Civil Liability for Oil Pollution Damage set the limit of liability at 2,000 francs per tone, and not more than 210 million francs in total. Franc was defined as a unit containing 65,5 milligrams of gold (Art. V (9)). Article V (2) of the Convention, however, precluded the limitation if «the incident
occurred as a result of the actual fault or privity of the owner». The shipowner was required to provide financial guarantees in order to ensure his ability to pay.
The U.S. signed the Convention but did not ratified it1. However, the principle of the limitation of liability has been accepted by the U.S. law (Oil Pollution Act, Sec. 1004). The U.S. law and the 1969 Convention set different limits of liability. Further, the 1969 Convention preclude the limitation of liability if the incident occurred as a result of the actual fault or privity of the owner» Article V (2). The U.S. OPA (Sec. 1004c) adds another factor: «the violation of an applicable Federal safety, construction, or operating regulation.» This clause basically precludes the majority of polluters from limiting their liability since oil spill accidents almost always involve some kind of violation of a particular regulation, unless they are caused by the forces mentioned in Sec. 1003 (a) which exclude liability of the polluter completely.
The significant differences between the 1969 Convention and the U.S. OPA led to the 1992 Civil Liability Convention. The 1992 Convention entered into force on 30 May 1996. The U.S., however, has not joined the 1992 Convention as well (IMO, 2016, p. 255). Even though the two conventions differ in some details (Zhu, 2007, p. 192), they are based on the same principle: the shipowner is strictly liable and he has the right to limit his liability.
Similar to the 1969 Convention, the 1992 Convention covers only ships which carry oil in bulk as cargo (Art. I(1)) but not other ships. Oil pollution is often caused from fuel carried in ship's bunkers for its own use. The situation was rectified by adopting International Convention on Civil Liability for Bunkers Oil Pollution Damage adopted in 2001. Similarly to the International Convention on Civil Liability for Oil Pollution Damage, this convention also guarantees the right of the shipowners to limit their liability (Art. 6). The limits of liability are now governed by the 1996 Protocol to the Convention on Limitation of Liability for Maritime Claims (LLMC) that took effect in June 2015.
One may conclude that the desire to achieve legal certainty as to the amount of compensation has led to the situation of the impossibility to introduce one comprehensive regime on environmental liability which is based on clear moral principles and which covers all environmentally dangerous activities. The need for such a regime stems from the fact that the existing international and domestic rules often contradict each other. That can be seen, for example, in the legal definitions of the persons liable for damage.
Persons Liable for Damage
International conventions referred above tend to limit the scope of persons who can be held strictly liable for an act of pollution to the owners only. In this respect, the U.S. legislation and some other international agreements such as Lugano Convention (1993), which has not entered into force yet2, adhere to the mo-
1 For the list of the parties and the status of the Conventuion see: IMO. 2006, p. 237.
2 The Lugano Convention: Convention on civil liability for damage resulting from activities dangerous to the environment (June 21, 1993). Only eight smaller European countries have signed it so far.
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rality of the polluter pays principle more closely. According to the U.S. Oil Pollution Act, the operator of the ship or facility can also be liable for environmental harm along with the owner (Sec. 1001 (32)). The same principle is also found in Article 6. The reason for holding the operator liable is that he is exercising control over a dangerous activity, or in charge of the activity (Sands, & Peel, 2012, p. 737) Similarly, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) defines «potentially responsible parties» as including «current owners and operators of a facility, owners and operators of a facility at the time the hazardous substances were disposed of, persons arranging for transport and disposal of hazardous substances, and transporters of hazardous substances» (Sec. 9607). Furthermore, operators and owners are jointly and severally liable, which allows the plaintiff to choose to sue one of them able to pay the compensation. The law covers retroactive pollution. Therefore, the former and the present owners and operators of a contaminated site may be liable for the cleanup costs. It imposes personal liability, as well as corporate, so that a corporate officer's or shareholder's assets may be subject to environmental liability.
In contrast to the oil pollution agreements, there are some international conventions which extend liability to the operators of the activity which is environmentally hazardous, for example, a carrier of hazardous substances. For example, the UN/ECE Convention on Civil Liability for Damage Caused During Carriage of Dangerous Goods by Road, Rail and Inland Navigation Vessels, which was adopted in 1989, defines carrier as the person who controls the use of the vehicle where the dangerous goods are carried. It imposes liability at the time of carriage itself and at the time of loading and unloading (Art. 1 (8)). The owner of the vehicle is presumed to control the use of the vehicle unless the owner can prove otherwise.
From the moral perspective, liability for environmental damage must depend on the ability to take preventive steps to eliminate or reduce the risk of damage, and internalize the costs derived from those activities. This, however, is not always the case. The international agreements provide for a third party liability, particularly insurance companies. The example can be the International Convention on Civil Liability for Bunker Oil Pollution Damage, which allows direct action against the insurer (Art. 7 (10)). Since the limitation of liability likely prevents full compensation, a special arrangement is sought to ensure that it is not the national governments which have to pay the rest. For example, the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 provides compensation for victims who do not obtain full compensation under the 1992 Civil Liability Convention. This Fund is financed by contributions levied on each person who has received in a calendar year more than 150 000 tonnes of oil (Art. 10(1)). The amount of compensation which the fund can pay is also limited (Art. 4(4)). Similar arrangements exist in the U.S.
See: http://www.ecolex.org/details/convention-on-civil-liability-for-damage-resulting-from-activities-dangerous-to-the-environment-tre-001166/participants/?
which is not a party to this convention. In the situations when a polluter is not liable or there is a limit of liability under the U.S. law, the costs are covered by the Oil Spill Liability Trust Fund, which accrues from taxes on domestically produced and imported oil and paid by the oil companies (Woods, 2008).
Not many conventions address the issue of State liability for environmental damage directly. Even though most of the conventions which protect the environment may contain a reference to the state liability, this liability is not spelled out, and there is not an efficient mechanism to make the states liable. For example, in Article 139 of the UN Convention on the Law of the Sea (1982) it is written that in respect of an area such as sea-bed, ocean floor beyond the limits of national jurisdiction, damage caused by the failure of a state the party of the Convention to carry out its responsibilities shall entail liability. Article 235 further states that: «States are responsible for the fulfilment of their international obligations concerning the protection and preservation of the marine environment. They shall be liable in accordance with international law». The UN Convention on the Law of the Sea, as well as other relevant conventions, do not elaborate on the state liability and do not put in place a definite mechanism of enforcing it. Moreover, one could argue that provision of this convention (Art. 236) on excluding any military ship and other governmental non-commercial vessels out of the reach of Article 235, contravenes general principles of international law. The principle that State is responsible for its wrongdoing is not derived from a convention (Alam et al., 2015, p. 590). It was and is a valid principle of international law, which conventions and agreements must specify and implement.
The main issue which has not been sufficiently addressed by international legal instruments is to what degree the states must be liable for the activities of private persons within their jurisdiction which damage the international environment. According to traditional international law they can be held responsible as long as they are obliged to control activities within the scope of their sovereign power, and if they have failed to do that (Birnie et al., 2009, p. 143). The margin-alization of the moral perspective in the environmental liability agreements has led to the situation where the moral and legal duty of the states to acknowledge their responsibility for the environmental harm originated within their jurisdictions has not been sufficiently expressed.
There are few exceptions from the general trend of the states to avoid their liability for the environmental damage. One exception is 1963 Vienna Convention on Civil Liability for Nuclear Damage. It covers both individuals and states as subject to the regime of liability (Art. 1.1). Another exception is 1972 Convention on International Liability for Damage Caused by Space Objects. In other areas not covered by those conventions, the general principle is that the state is responsible for damage, providing that the damage would not have occurred if the state had carried out its obligations under international law1. The problem with
1 See for example, Art 8.3 of the Convention on the Regulation of Antarctic Mineral Resource Activities (1988).
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the establishment of state liability is that a certain pollution of the environment can be legally excused as the exercise of the sovereign powers (Larsson, 1999, p. 155-156). In relation to the use of international natural resources, one may assume that a state will be held liable only for serious injury. The polluting state may always claim its right «to a reasonable and equitable share in the uses of international natural resources.» This claim, however, can be directed against a polluting state (Utton, 1996, p. 638). It is a matter of a legal and academic uncertainty as to what extent the sovereignty of the states should be limited in the use of the natural resources under its control (Birnie et al. 2009, p. 710-711). Without taking the moral perspective seriously, this uncertainty will persist.
Access to Justice
Under international law, a direct legal interest is required for the affected party to be entitled to make an environmental claim and demand the termination of an activity causing damage (Magnus, 2007, p. 126). So called locus standi provisions are devised to make all process more efficient by cutting off those possible litigants whose interest in the litigation does not appear strong enough. The circle of persons who should have the right to initiate legal proceedings is uncertain in international environmental law. What is sufficient legal interest and what is not is a matter of a moral judgement. There is a movement in environmental politics in some countries to broaden the standing rights to encompass non-governmental organizations or «interested persons» who could bring forth a claim for compensation on behalf of the environment (Mushkat, 2005, p. 51-52). If this movement succeeds it will change dramatically the nature and the process of international environmental law.
Apart from locus standi, time limitation presents another serious barrier for the access to justice. All conventions concerned with the liability of operators establish time limitation in relation to when the claims for compensation can be brought. For example, the 1996 Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea requires that claims must be brought within 3 years from the date when the person suffering damage knew or ought reasonably to have known of the damage and of the identity of the owner. Such legal constructions ignore the enormous difficulty to prove a causal link between a particular environmental damage or harm (for example, cancer) on the one hand and a specific act of pollution on the other.
Access to justice is also made difficult by the fact that there is not a unified law on regulating jurisdictional issues when the operator and the claimant for environmental damage belong to the different jurisdictions. Different rules are applied to different areas of environmental liability. For example 1963 Vienna Convention on Civil Liability for Nuclear Damage states that the jurisdiction lies exclusively with the courts of the contracting party in whose territory the incident occurred (Art. 11). 1969 International Convention on Civil Liability for Oil Pollution simply allows the authority to hear the case to the States where the pollution occurred (Art. 9). In other areas of environmental liability the issue of jurisdiction is
less clear. The problems to access justice in transnational pollution cases highlight the impossibility to achieve environmental justice by trying to put everything in clear-cut legal rules without paying much attention to what is fair and just in each particular case. What the lawyers need is a common sense with a strong moral integrity and intellectual capacity to take into account the interests of all stakeholders which the international environment affects.
Compensation and Penalty
The reason for introducing limits on financial liability for environmental damage is to provide legal certainty for businesses since the strict liability, which does not require the proof of fault, may lead to very high potential financial losses for them. There is not a single cap for all environmentally dangerous activities. It varies from a sector to sector. For example, 1963 Vienna Convention on Civil Liability for Nuclear Damage had the major goal «to relieve the nuclear supply industry of the incalculable risks posed by high compensation claims» (UNEP, 2002, Para. 3.2). The Convention limited liability to US$5 million per nuclear incident. This was increased to 300 million SDR in the 1997 Protocol to the Vienna Convention (Art. 7). Considering the danger resulting from the use of nuclear energy, it is clear that this limit is insufficient to meet the demands of possible victims. The 1996 Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (Art. 14(5)) sets the limit of compensation at 250 million SDR1.
One could argue that if liability were left unlimited, this would open the possibility for excessive monetary claims resulting in serious financial burdens for businesses and the discouragement of investments. In addition, limiting liability has never been the main element of the international agreements. They aim at forcing operators to adopt more stringent environmental safety measures. For example, Convention on Civil Liability for Oil Pollution Damage, which was adopted in 1969 in response to the «Torrey Canyon» oil spill disaster of 1967, was designed to force the ship owners to introduce measures preventing oil spills. Further, as it has been discussed above, the operator normally cannot avail himself of a limitation of liability if the harm is caused by his intentional act or omission, or due to reckless conduct of which he could have known that damage would probably occur.
Similarly to the oil pollution agreements, many conventions require the operator to establish financial security in order to be able to cover the risk of liability. The regime of compulsory insurance may create more certainty by ensuring that the claims within the established limits will be met. However, there are negative consequences of it. First of all, it may indirectly reduce the incentive for potential perpetrators to avoid causing damage at any cost. Secondly, it raises the price of the goods, and in the end, it is the consumer who has to bear the costs. The polluter pays principle turns effectively in the consumer pay principle. These conventions undoubtedly benefit businesses which get important security
1 See the rates of SDR at https://www.imf.org/external/np/fin/data/rms_five.aspx.
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against paying big amounts of damages and possible bankruptcy. It also benefits big insurance companies. Among international players, those provisions benefit the rich countries where the companies are forced to buy insurance by the nature of their finance and the culture in which high risks are not tolerated, against those countries where the nature of finance or the culture do not require buying an insurance. A company which buys an insurance policy stands in a disadvantageous position against another company which does not. Thus, the conventions requiring compulsory insurance are influenced by trade and competitive interests rather than by the desire to protect the environment. One can hardly agree with the claim that compulsory insurance is the only effective means to secure an adequate compensation.
The existence of insurance as the way to avoid responsibility for negligence is a moral question. Why should all the insured who are not negligent contribute their funds to cover the behavior of an insured who is negligent? There are lawyers (UNEP, 2002, para. 7.8) who look at the availability of insurance as the constitutive element of any kind of liability. For example, it was argued (ibid) that the defenses allowed under the strict liability regimes, like the acts of God or war, were initially permitted because it used to be difficult, if not impossible to obtain insurance from harm caused by the acts of God or war. Such a distorted understanding of the nature of strict liability misses the perspectives of fairness or justice when imposing the burden to cover the damage. The ethics of responsibility requires to leave the matter of insurance to the free choice of the insured, and not to impose it on everyone. It is important not only because the freedom of contract principle requires so, but also because the conscientious operator does not need to ensure himself against the acts of God or war. He has done his best to avoid the damage, and must not be held liable for it.
There are many conventions which require creation of funds to top up insurance and provide a second tier of protection. According to these schemes, companies and the state parties contribute to common funds that finance damage reparation. Normally, each country has its own fund. The 1971 Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage created an international fund. Contributions to the fund, however, are made not by the governments but by the oil cargo businesses (Art. 10-12). The 1997 CSC (Convention on Supplementary Compensation for Nuclear Damage) is a rare exception of a common fund contributed by the states directly. It is morally questionable how fair these contributions of the states are, since in the end it is the taxpayer and the consumer who has to pay money into these funds.
Unlike property or personal damage, environmental damage is not easily calculated and expressed in financial terms. Traditional approach in imposing civil liability is designed to compensate an injured person by requiring the responsible person to pay the economic costs of resulting damage. There are many problems with the environmental damage. In order to determine the amount of compensation, one has to assess first the value of the damaged environmental resource. There are several ways suggested to calculate its price. One way is to use mar-
ket price of the natural resources being damaged. This approach was used in the famous Trail Smelter case (1941). The market price, however, may not include all value of the damage resource. Some offer to calculate all the economic value attached to the use of environmental resources which would include, for example, travel costs spent by the individual to visit and enjoy a resource (Jantzen, 2006, p. 10). It is doubtful whether this method can include all value of the damaged resources, since not all values can be easily expressed in economic terms. Some offer a so-called «hedonic pricing method» (Jantzen, 2006, p. 9) which tries to take into account the enjoyment one receives from the source. However, there are many complications with expressing hedonic value in prices. What one values much can be of no value for others. One could take the average value, but it is not stable and changes with the fashion. Finally, there is so-called «contingent valuation method» (Jantzen, 2006, p. 14). It is based on measuring the willingness of individuals to pay for environmental goods such as clean air or water or the preservation of endangered species. This willingness is measured by the means of public surveys. This method has the same problem as the hedonic pricing method.
All these methods fail to provide decision makers with a definite standard of evaluating value of the damaged environmental resource. It seems that the best solution would be not to rely on unreliable market, economic and hedonic evaluations. It is unlikely that there is one universal way to count the cost of the damage. A decision maker must look at the circumstances of the case. He must rely on his or her sense of care for the environment and care for the people dependent on this environment including future generations. The decision maker must also look at the best way for the entity causing environmental harm to recover the loss of the environmental quality.
Another problem is the scope of compensation for environmental harm. International environmental law tends to limit civil liability for the environmental damage to the payment of reasonable costs of restoration measures, reinstatement measures or preventative measures. For example, the 1988 Convention on the Regulation of Antarctic Mineral Resource Activities (Art. 8) states that an operator undertaking any Antarctic mineral resource activity is strictly liable for damage to the Antarctic environment, loss and impairment to the ecosystem or to the third party, and for prevention and clean-up costs to restore the status quo ante. The operator has to pay for 'reasonable' restoration measures, and would be exempted from liability if such measures were not technically feasible or not reasonable (Lefeber, 1996, p. 293). The international law agreements, however, do not contain a clear guidance and a specific standard in defining what is reasonable and what is not. Much is left to the discretion of the authorities and political negotiations. Therefore, the efficiency of international environmental law depends not as much on the rules and standards of evaluating environmental damage, as on the moral integrity and intellectual ability of the decision makers to allocate fairly the cost of environmental damages.
In many cases, the harm is so significant that the appropriate compensation based on the aim of restoration is impossible. For example, a polluter causes a
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complete destruction of rare species. It is morally right to expect that the polluter must bear negative consequences if he is responsible for the damage. This involves the issue of retributive justice. Therefore, the elements of restitution have to be combined with the elements of retribution to achieve fairness in environmental justice. The contemporary regime of environmental liability favours restitution over retribution. Retribution involves punishment. Criminal law element does not take a significant place in the international agreements on dealing with pollution. It is a matter of both a political and academic discussion on whether it would be more efficient to combine both civil and criminal liability within a single regime of addressing environmental harm (Pereira, 2015, p. 292ff). Retributive elements can be incorporated into strict environmental liability regimes under certain limitations which would require a presumption of fault with a greater scope of defenses available to the defendant. The principle of retribution can be found in tort law and not only in criminal law (Goudkamp, 2014, p. 225). It is obvious that purely criminal liability does not suit well the interests of environmental justice. Criminal cases require a more stringent standard of proof in imposing liability and presumption of innocence, and that is not compatible with the regime of strict liability which is characteristic for the environmental law.
The introduction of a rigid framework of criminal law may impair the flexibility in imposing liability on the polluters. One may argue that a certain degree of flexibility is essential in environmental cases which would preclude the application of the criminal law principle of uniformity (Sutherland et al., 1992, p. 5). Such a uniformity appears impossible in environmental cases. There is environmental harm which is foreseen and deliberately chosen to meet basic needs of humankind. It appears not only morally wrong to punish for such a harm but also practically impossible to prevent it. It is true that one can penalize the harm which is caused by greed and the desire to be rich rather than by the necessity of the basic needs. The technicality of criminal law is ill suited to sieving through the conscience of the offender on the one hand, and casuistic inquiries on what has motivated each instance of environmental harm on the other.
The element of fault is vital for defining environmental crimes. The deliberate harm caused by wickedness and hatred must be penalized differently from the environmental harm caused by recklessness or negligence. Unlike the instances of environmental harm which could not be foreseen, the foreseen but not expected harm might be in theory penalized. However, the problem with the environmental cases is that it is very difficult to delineate the harm which could be foreseen from the harm which could not, in the complex circumstances in which an economic activity has uncertain long term effects on the environment.
Undoubtedly, it is morally right to require a greater compensation or even penalty for an expected and intentional environmental harm than from the unintentional and unforeseen one. The contemporary international environmental law, by imposing a standard of strict liability on the operator of the harmful activity, makes the different treatment of a conscientious and non-conscientious operator difficult to achieve. The element of retribution should not
be ignored in setting up an international mechanism of environmental justice, even though the contemporary criminal law does not suit well for a successful prosecution of environmental criminals. It is not enough to be concerned only with the restoration, reinstatement and preventative measures. The international law has to be based on the moral principles which inform conscience about the environmental harm that can and cannot be tolerated.
Not every damage to the environment is morally wrong. Disregarding the difference between morally acting and immorally acting operators by making them both liable for environmental damage in the same way impairs the fairness of the whole legal mechanism of environmental protection. It is possible to set up some sort of a mixed form of liability combining both fault and strict liability mechanisms. The bonds of liability should be slackened to protect a polluter who acts to meet basic human needs or acts without a real possibility to foresee the consequences of his harmful activity, and be tightened in relation to irresponsible polluters.
Conclusion
Law is an instrument which aims at bringing harmony and concordance into society. The rules on the environmental liability can be seen from two points of view. The first point is looking at the prevention of environmental damage. The rules on environmental liability are necessary in order to avoid accidents, damage to the environment, personal injuries and death. The clarity in this aspect is important, because there must be a person who should take the responsibility for the possible harm to the environment, and it is the part of his responsibility to ensure that the damage will not take place. The clarity of law is necessary to prevent such persons from neglecting their responsibility to the environment. The second point is looking at the harm or damage already taken place. The rules of environmental liability are seen as a remedy to make good the loss or harm which occurred in real life. Both preventive and reactive aspects of law have to be maintained in a balance. From the brief analysis of the international law given in this paper, one can conclude that many agreements overemphasize the preventive function of law without providing a satisfactory mechanism dealing with the accidents which have already occurred.
If one has to look at the overall modern state of international environmental law in relation to liability issues, one may notice that the scope of environmental liability needs to go beyond the uncountable amount of different conventions dealing with particular problems, such as, transboundary effects of pollution or industrial accidents or hazardous and dangerous activities. There is a need for a single legal framework which covers all acts of pollution affecting international environment. The attempt to introduce a unified regime of liability was made only in Europe by signing the Lugano Convention mentioned above. Until now, international environmental liability rules were driven by the incidents like Torrey Canyon, or by the interests of the big businesses who are trading with dangerous and hazardous activities and trying to protect themselves from the danger of excessive claims for damages. The international liability regime is more
«Pollution and Liability Issues...»
complicated by the fact that the states are reluctant to yield their sovereignty to allow the existence of an overall international control of any activities causing damage to the international environment.
The law on environmental liability needs a strong moral foundation to see which act of the operators must entail liability, and which are not. Setting compulsory mechanisms to provide insurance for all operators will not be a solution. In the end, the cost will be borne by the consumers and the conscientious operators. Moral rules will help to distinguish between morally permissible and morally impermissible environmental damage. By excluding, or at least limiting, morally impermissible environmental damage would help much better both the humankind and the nature than providing an overall compulsory insurance for each single instance of environmental damage. The strong moral foundation would also strengthen the reasons why the states must yield their sovereignty in this important aspect.
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