Abstract
The chapter focuses on legal issues linked to subsea gas pipelines, which have received transnational relevance in the Baltic Sea region through the Nord Stream pipeline between Russia and Germany. It includes a brief review of the legal basis of offshore activities, more generally and in the Baltic Sea. The main focus of the text is on civil liability issues linked to damage involving such pipelines, covering anything from different damage scenarios to questions related to liable persons and compensable loss, but also includes some choice of law aspects to the questions. It is concluded that a number of regulatory gaps exist in this area, but that an international regulatory regime on civil liability matters linked to subsea pipelines might still not be necessary.
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Notes
- 1.
“Offshore” is usually taken to mean areas covering the territorial seas , the Exclusive Economic Zone (EEZ) and the continental shelf . Cf. art. 2(2) of Directive 2013/30/EU of the European Parliament and of the Council on safety of offshore oil and gas operations and amending Directive 2004/35/EC. In art. 2(3) “offshore oil and gas operations” are described as “all activities associated with an installation or connected infrastructure, including design, planning, construction, operation and decommissioning thereof, relating to exploration and production of oil or gas, but excluding conveyance of oil and gas from one coast to another”. Offshore oil and gas operations comprise all activities related to exploring for, producing or processing oil and gas offshore. In addition to the extraction of oil and gas from the underground strata of the seabed , these activities include the transport of oil and gas by vessels and through offshore structures (pipelines or other installations above or below the water surface) to other installations, onshore processing or storage facilities.
- 2.
See generally A. Proelss, “Pipelines and protected sea areas”, in R. Caddell and R. Thomas (eds), Shipping, Law and the Marine Environment in the 21 st Century. Emerging challenges for the Law of the Sea – legal implications and liabilities (Lawtext Publishing Limited, 2013), 276–292.
- 3.
See e.g. DNV Recommended Practice DNV-RP-F107. Risk Assessment of Pipeline Protection (October 2010), 19–34.
- 4.
Cf. P. Wetterstein, “Environmental liability in the offshore sector with special focus on conflict of laws (parts 1 and 2)” (2014) 20 Journal of International Maritime Law 33–34.
- 5.
The Baltic Sea is designated by the International Maritime Organization (IMO) as a “Particularly Sensitive Sea Area” (PSSA). On the legal status of PSSAs, see H. Honka, “Regulation of PSSA – Is it Effective?” in J. Schelin (ed) Shipping & Environment – A Legal Perspective (Poseidon Förlag AB, 2014), 23–33.
- 6.
For the development of international law leading to the adoption of UNCLOS , see e.g. P. Birnie, A. Boyle and C. Redgwell, International Law and the Environment (Oxford University Press, 2009), 379–84, and U. Beyerlin and T. Marauhn, International Environmental Law (2011), 115–19. UNCLOS, which, in large part, is a mere codification of the then existing rules of relevant customary and conventional international law, providing for a balance of power between coastal states and flag states. The emphasis of UNCLOS is strongly on the protection and preservation of the marine environment, rather than on compensating for environmental losses. On this see e.g. J.I. Charney “The Marine Environment and the 1982 United Nations Convention on the Law of the Sea ” (1994) 28(4) The International Lawyer 879–901.
- 7.
The area adjacent to the seaward edge of the territorial sea is the EEZ. According to UNCLOS art. 57, the EEZ shall not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. The EEZ is not part of the state’s national territory; it is an area subject to the special legal regime established in Part V of UNCLOS , under which the rights and jurisdiction of the coastal state and the rights and freedoms of other states are governed by the relevant provisions of the Convention (art. 55). Thus, the coastal state can only exercise sovereign rights in compliance with this legal regime. For more, see e.g. S. Much “The emerging international regulation of carbon storage in sub-seabed geological formations ” in R. Caddell and R. Thomas (eds), Shipping, Law and the Marine Environment in the twenty-first Century. Emerging challenges for the Law of the Sea – legal implications and liabilities (Lawtext Publishing Limited, 2013), 263–265, and Proelss, note 2 at 283–287.
- 8.
According to UNCLOS art. 76.1, the continental shelf of a coastal state comprises the sea-bed and subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge of the continental margin does not extend up to that distance. The outer limits of the continental shelf on the seabed either shall not exceed 350 nautical miles from the baselines from which the breadth of the territorial sea is measured or shall not exceed 100 nautical miles from the 2500 metre isobath, which is a line connecting the depth of 2500 metres (art. 76.5, cf. 76.6). For more details on the delimitation of the continental shelf, see e.g. M.A. Allain “Canada’s claim to the Arctic: a study in overlapping claims to the outer continental shelf ” (2011) 42 Journal of Maritime Law and Commerce 13–19.
- 9.
See UNCLOS arts. 56, 60, 77, 80 and 81. While a coastal state’s sovereign rights in the EEZ also embraces living natural resources (e.g. fish) of the waters superjacent to the seabed and economic activities, such as the production of energy from the water, currents and winds, the coastal state’s rights over the continental shelf relates mainly to non-living resources (oil, gas, minerals, etc.) of the seabed and subsoil (art. 77.4). For details, see e.g. K. Hakapää Uusi kansainvälinen oikeus (Talentum, 2010) 399–403, 410–416.
- 10.
Art. 58.3 reads: “In exercising their rights and performing their duties under this Convention in the exclusive economic zone , States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of this Convention and other rules of international law in so far as they are not incompatible with this Part.”
- 11.
See Proelss, note 2 at 283–292 on the scope of jurisdiction of the coastal state in respect of offshore pipelines . Also note UNCLOS art. 112.1: “All States are entitled to lay submarine cables and pipelines on the bed of the high seas beyond the continental shelf ”. (Emphasis added.)
- 12.
In addition to UNCLOS , an extensive legislative framework attempting to prevent or mitigate pollution at sea and to reduce the degradation of the marine environment has been developing since the 1970s. See M.N. Tsimplis “Marine pollution from shipping activities” (2008) 14 Journal of International Maritime Law 101.
- 13.
This duty of due diligence extends to the marine environment as a whole, including the high seas, and it covers all sources of marine pollution, including land-based and shipping/offshore activities. See Birnie, Boyle and Redgwell, note 6 at 387–389. In addition, states shall co-operate on a global basis and, as appropriate, on a regional basis, directly or through competent international organisations, in formulating and elaborating international rules, standards and recommending practices and procedures consistent with UNCLOS, for the protection and preservation of the marine environment, taking into account characteristic regional features (art. 197).
- 14.
On the coastal state’s rights and obligations regarding the protection of the marine environment in its EEZ and continental shelf , see Proelss, note 2 at 278–292.
- 15.
According to art. 208.1, which covers pollution from seabed activities subject to national jurisdiction , “[C]oastal States shall adopt laws and regulations to prevent, reduce and control pollution of the marine environment arising from or in connection with sea-bed activities subject to their jurisdiction and from artificial islands, installations and structures under their jurisdiction, pursuant to arts. 60 and 80”. Such laws and regulations shall be no less effective than international rules, standards and recommended practices and procedures (art. 208.3).
- 16.
International Convention for the Prevention of Pollution from Ships. The entry into force of MARPOL has substantially reduced operational pollution from all types of vessels, see Birnie, Boyle and Redgwell, note 6 at 412 with references.
- 17.
International Convention on Oil Pollution Preparedness, Response and Co-operation.
- 18.
Paris Convention for the Protection of the Marine Environment of the North-East Atlantic.
- 19.
Convention on the Protection of the Marine Environment of the Baltic Sea Area.
- 20.
It should be noted that art. 235 of UNCLOS requires states cooperate on the development of international law relating to responsibility and liability for the compensation for damage caused by the pollution of the marine environment, as well as, where appropriate, the development of criteria and procedures for the payment of adequate compensation, such as compulsory insurance or compensation funds.
- 21.
“Regional” means that an instrument applies in the marine environment of more than two states.
- 22.
The legal situation is similar in the offshore oil exploration and exploitation sector. See Wetterstein, note 4 at 33–36.
- 23.
This legislation replaces Directive 2006/12/EC of the European Parliament and of the Council of 5 April 2006 on waste.
- 24.
See e.g., K. De Smedt, M. Faure, J. Liu, N. Philipsen and H. Wang Civil Liability and Financial Security for Offshore Oil and Gas Activities, Final Report (2013), 82–154, 374–80. See also P. Wetterstein “Remedying of Environmental Damage Caused by Shipping” in (eds) J. Basedow, U. Magnus and R. Wolfrum The Hamburg Lectures on Maritime Affairs 2009 & 2010 (2012) 179–192.
- 25.
Here is meant a “trans-boundary legal relationship” with connections to more than one legal system. See Wetterstein, note 4 at 97.
- 26.
Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, which applies from 10 January 2015, with the exception of arts. 75 and 76, which apply from 10 January 2014 (art. 81).
- 27.
Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations. The Regulation was adopted on 11 July 2007 and entered into force on 20 August 2007. It entered into application on 11 January 2009 (with the exception of art. 29, which applied from 11 July 2008) and applies to events which occurred after the date of its entry into force. However, in Homawoo v GMF Assurances SA (C-412/10) 6 September 2011 the CJEU confirmed that the Rome II Regulation will apply to determine the governing law of non-contractual obligations only where the events giving rise to damage occurred after 11 January 2009.
- 28.
See e.g. Wetterstein, note 4 at 87 with references.
- 29.
See J. Cordes, L. Stenseng and P. Lenda Hovedlinjer i internasjonal privatrett (Cappelen Akademisk Forlag, 2010) 431, P. Wetterstein Redarens miljöskadeansvar (Åbo Akademis förlag, 2004) 463–464 with references, and more generally Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Non-Contractual Obligations (Rome II), COM(2003) 427 final, where it is stated at 5: “Admittedly, the Member States virtually all give pride of place to the lex loci delicti commissi, whereby torts/delicts are governed by the law of the place where the act was committed. The application of this rule is problematic, however, in the case of what are known as ‘complex’ torts/delicts, where the harmful event and the place where the loss is sustained are spread over several countries. There are variations between national laws as regards the practical impact of the lex loci delicti commissi rule in the case of cross-border non-contractual obligations. While certain Member States still take the traditional solution of applying the law of the country where the event giving rise to the damage occurred, recent developments more commonly tend to support the law of the country where the damage is sustained. But to understand the law in force in a Member State, it is not enough to ascertain whether the harmful event or the damage sustained is the dominant factor. The basic rule needs to be combined with other criteria. A growing number of Member States allow a claimant to opt for the law that is most favourable to him…”.
- 30.
EU member states must apply the Rome-II Regulation to proceedings commenced after 11 January 2009, and in those proceedings, its rules apply to events giving rise to damage occurring after 20 August 2007 (arts. 31–32).
- 31.
See note 26. Given the complementarily between this Regulation and the Rome II Regulation, the universal nature of the latter is necessary for the proper functioning of the internal market as avoiding distortions of competition between EU litigants. See COM(2003) 427 final, 9–10.
- 32.
On the general objective of the Regulation, its scope of application and the notion of “non-contractual obligations”, See Wetterstein, note 4 at 89–90 with references.
- 33.
Cf. art. 355 of the Treaty on the Functioning of the European Union (TFEU), which provides in essence that the Treaty and the instruments adopted thereunder apply to the member states and their European (and some overseas) territories.
- 34.
The Regulation lacks specific provisions as to its applicability on the continental shelf and the high seas. However, in Case-37/00 Herbert Weber v. Universal Ogden Services Ltd. the (former) ECJ treated installations on the continental shelf as part of the adjacent state for the purpose of jurisdiction over an employment dispute under the Brussels I Regulation. See also, Case C-347/10 A Salemink v Raad van bestuur van het Uitvoeringsinstituut werknemersverzekeringen (para. 35). See also B.O. Gram Mortensen and C.H. Schjøler “Sikkerhed og havvindmøller” (2013) 423 MarIus 71–80.
- 35.
On a coastal state’s jurisdictional rights with respect to cables or pipelines on the seabed and subsoil, see Proelss, note 2 at 277–292.
- 36.
The scope of the applicable law is written into art. 15. The article covers issues including the basis and extent of liability, exceptions and limitations, damages and remedies, persons entitled to claim, and the extinguishment of obligations. On this see, A. Dickinson The Rome II Regulation: The Law Applicable to Non-Contractual Obligations (Oxford University Press, 2008) 568–591, A. Rushworth and A. Scott, “Rome II: choice of law for non-contractual obligations” (2008) LMCLQ 274, at 294, and R. Plender and M. Wilderspin The European Private International Law of Obligations (Thomson Reuters (Legal) Limited, 2009) 435–459.
- 37.
In COM(2003) 427 final, 11 it is stated: “The place or places where indirect damage, if any, was sustained are not relevant for determining the applicable law . In the event of a traffic accident, for example, the place of the direct damage is the place where the collision occurs, irrespective of financial or non-material damage sustained in another country”. Regarding the indirect consequences of the event giving rise to damage, see A. Dickinson, note 36 at 313–18, and A. Rushworth and A. Scott, note 36 at 278–279.
- 38.
Recital (17). Consequently, where a single incident causes damage to occur in multiple states, art. 4.1 applies the law of each state to the damage that occurs there. On this issue see, e.g. Plender and Wilderspin, note 36 at 507–509. Furthermore, the present author agrees with the opinion of A. Dickinson, “Territory in the Rome I and Rome II Regulations” (2013) LMCLQ 86, according to which the connection between the relevant non-contractual obligation arising out of a tort/delict and the country whose law is to be applied under art. 4.1 is basically a factual one. He states that, “the member state court should seek to identify and locate the facts which represent the outward consequences of the defendant’s conduct and then treat as the relevant ‘damage’ those consequences which are directly linked to that conduct and which are not indirect, in the sense that they simply reflect or follow from other consequences occurring in another country” (at 124). For more details on the difficulty in locating the relevant damage see 124–125.
- 39.
Regarding “habitual residence” see art. 23 of the Rome II Regulation, Dickinson, note 36 at 140–146, and Plender and Wilderspin, note 36 at 78–89.
- 40.
According to COM(2003) 427 final, 12: “[T]his is the solution adopted by virtually all the Member States, either by means of a special rule or by the rule concerning connecting factors applied in the courts. It reflects the legitimate expectations of the two parties.”
- 41.
In the paragraph, it is further stated that, “[A] manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question”.
- 42.
For more details see Plender and Wilderspin, note 36 at 536–541 and P. Stone EU Private International Law (Edward Elgar Publishing Limited, 2010) 386–389.
- 43.
COM(2003) 427 final, 12.
- 44.
According to recital (24) of the Regulation, “environmental damage” should be understood “as meaning adverse change in a natural resource, such as water, land or air, impairment of a function performed by that resource for the benefit of another natural resource or the public, or impairment of the variability among living organisms”.
- 45.
The motive for this rule is to be found in art. 191 of the TFEU which embraces, inter alia, the “polluter pays” principle. In COM(2003) 427 final it is stated, 19–20: “[The] exclusive connection to the place where the damage is sustained would also mean that a victim in a low-protection country would not enjoy the higher level of protection available in neighbouring countries. Considering the Union’s more general objectives in environmental matters, the point is not only to respect the victim’s legitimate interests but also to establish a legislative policy that contributes to raising the general level of environmental protection, especially as the author of the environmental damage, unlike other torts or delicts, generally derives an economic benefit from his harmful activity. Applying exclusively the law of the place where the damage is sustained could give an operator an incentive to establish his facilities at the border so as to discharge toxic substances into a river and enjoy the benefit of the neighbouring country’s laxer rules. This solution would be contrary to the underlying philosophy of the European substantive law of the environment and the ‘polluter pays’ principle.”
- 46.
See note 29.
- 47.
The question of when the person seeking compensation can make the choice of the law applicable should be determined in accordance with the law of the member state in which the court is seized (recital (25)).
- 48.
For the definition of a product and a defective product for the purposes of art. 5, see arts. 2 and 6 of Council Directive 85/374/EEC of 25.7.1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, as amended by Directive 1999/34/EC of 10 May 1999.
- 49.
See C. Saf “Enhetliga regler för gränsöverskridande skadevållande händelser – Rom II-förordningen” (2009) Europarättslig Tidskrift 39.
- 50.
Namely, without prejudice to art. 4.2 (lex domicili communis), the law applicable to product liability shall be: “(a) the law of the country in which the person sustaining the damage had his or her habitual residence when the damage occurred, if the product was marketed in that country; or, failing that, (b) the law of the country in which the product was acquired, if the product was marketed in that country; or, failing that, (c) the law of the country in which the damage occurred, if the product was marketed in that country”. A foreseeability clause (art. 5.1, para. 2) and
an “escape clause” of the type included in art. 4.3 (art. 5.2) make the application of this conflict of law rule more complex. See Wetterstein, note 4 at 91–92 with references.
- 51.
The Rome II Regulation shall not prejudice the application of international conventions to which one or more member states were parties at the time when the Regulation was adopted and which lay down conflict of law rules relating to non-contractual obligations (art. 28.1). Such a convention is the Convention on the Law Applicable to Products Liability , 1973, which takes precedence over the Regulation in the six member states which were parties to it when the Regulation was adopted on July 11, 2007. These states are Finland, France, Luxembourg, the Netherlands, Slovenia and Spain. Insofar as any issue not covered by the Convention is within the scope of application of the Rome II Regulation, the rules of the Regulation should be applied. See Plender and Wilderspin, note 36 at 563.
- 52.
In addition, the pipelines run through the territorial waters of the Russian Federation, Denmark and Germany, and through the EEZs of the Russian Federation, Sweden, Denmark and Germany.
- 53.
It should be noted that new parallel gas pipelines between the Russian Federation and Germany are being planned (Nord Stream 2). These pipelines should be ready and in use 2020. However, the project has met strong opposition. See https://en.wikipedia.org/wiki/Nord Stream. In addition, Baltic Connector Oy, a company owned by the Finnish state, is planning a gas pipeline with a length of 82 kilometres between Inkoo, Finland, and Paldiski, Estonia, to be ready in 2020. See https://en.wikipedia.org/wiki/Balticconnector
- 54.
The present author is unaware of any possible separate agreements/arrangements concerning liability and compensation. Cf. also UNCLOS art. 79.4 concerning the coastal state’s right to establish conditions for cables or pipelines entering its territory or territorial sea , or its jurisdiction over cables and pipelines constructed or used in connection with the exploration of its continental shelf or the exploitation of its resources or the operations of artificial islands, installations and structures under its jurisdiction.
- 55.
Note the significance of the Rome II Regulation, supra.
- 56.
Cf. UNCLOS arts. 60.2 and 80.
- 57.
In the Finnish Tort Act there is no explicit definition of pure economic loss. However, both in legal literature and in court practice pure economic loss has been defined as “economic loss unconnected with personal injury or property damage” (cf. Chap. 5 § 1 of the Tort Act). A clear conceptual distinction is made in relation to consequential loss, that is, economic loss in connection with personal injury or property. This type of loss occurs, for instance, when an injured person loses income or a property owner loses profit because he is not able to use a damaged property. On the notion of pure economic loss in Finnish law, see e.g. Wetterstein, note 29 at 129–135, L. Sisula-Tulokas “Rena ekonomiska skador i skuggan av. sakskador” (2007) Tidskrift utgiven av. Juridiska Föreningen i Finland 415–427, and B. Sandvik “Ren förmögenhetsskada eller allmän förmögenhetsskada?” (2015) 8 Svensk Juristtidning 625–641 with references.
- 58.
The prerequisites for compensating pure economic loss are written into Chap. 5 § 1. Compensation is paid only if the loss is caused by 1) a criminal act, 2) by an administrative body in the exercise of its authority, or 3) if there otherwise exists a particularly weighty reason. On these prerequisites, see P. Wetterstein “Compensation for Pure Economic Loss in Finnish Tort Law” in P. Wahlgren (ed) Tort Liability and Insurance (Stockholm Institute for Scandinavian Law, 2001) 565–580, and P. Ståhlberg and J. Karhu Suomen vahingonkorvausoikeus (Talentum Helsinki, 2013) 321–330.
- 59.
It should be noted, however, that the state, the municipalities, and other public organs are liable, according to the Tort Act, Chap. 3 § 1, subpara. 2, for the negligent acts of their employees, civil servants, etc., when these are not acting in the exercise of public authority (vicarious liability).
- 60.
However, court practice does not seem to verify that there has been special restriction of liability in cases concerning the exercise of public authority. Consequently, one could argue that the provision, being insignificant, should be abolished. See L. Sisula-Tulokas, “Att ge och ta - ansvar för rena ekonomiska skador vid myndighetsutövning” (2010) Tidskrift utgiven av. Juridiska Föreningen i Finland 313–320, Ståhlberg and Karhu, note 58 at 242, and P. Wetterstein “Det offentligas skadeståndsansvar – särskilt med hänsyn till sjöfartsförhållanden” (1999) 253 MarIus, at 5.
- 61.
See the Supreme Court’s decisions KKO 1969 II 42, KKO 1990:55, KKO 1991:156, KKO 1994:122 and KKO 1995:108. Regarding legal literature, reference is made to, e.g. Ståhlberg and Karhu, note 58 at 170–176.
- 62.
See on the vessel operator’s liability Wetterstein, note 29 at 33–55.
- 63.
See on limitation of liability Wetterstein, note 29 at 253–316.
- 64.
Council Directive of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products. This directive has been amended by Directive 1999/34/EC of the European Parliament and of the Council of 10 May 1999.
- 65.
According to the Directive, “[P]roducer” means “the manufacturer of a finished product, the producer of any raw material or the manufacturer of a component part and any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer” (art. 3.1).
- 66.
See art. 3.3 on suppliers’ liability.
- 67.
For the purpose of the Directive, a “product” means “all movables even if incorporated into another movable or into an immovable” (in the present context especially note defective products incorporated into pipelines ). ‘Product’ includes also electricity (art. 2).
- 68.
Exceptions to the liability are listed in art. 7.
- 69.
See also Henning Veedfald v. Århus Amtskommune (C-203/99).
- 70.
Loss of life and personal injury are generally covered by the Directive (art. 9(a)).
- 71.
However, the concept of “environment” is not defined. During the preparation of the EDA it was considered not possible to do so. See, P. Wetterstein “Environmental Damage in the Legal Systems of the Nordic Countries and Germany” in M. Bowman & A. Boyle (eds), Environmental Damage in International and Comparative Law. Problems of Definition and Valuation (Oxford University Press, 2002) 232.
- 72.
Regarding these requisites, see the extensive analysis by B. Sandvik Miljöskadeansvar (Åbo Akademis förlag, 2002) 123–174.
- 73.
But the maintenance of traffic areas, such as fairways and ports, is covered (§1 para. 2).
- 74.
Compensation for personal injury and property damage is payable according to Chap. 5 of the Tort Act. In this respect, the EDA does not introduce any changes.
- 75.
See note 57.
- 76.
Damage caused by a criminal act is always compensated. Furthermore, note EDA § 5 para. 2, which covers compensation for non-economic loss, for instance, inconvenience in exercising a right. However, compensation for non-economic loss, for instance, discomfort because of noise, smell, vibration, etc., is problematic because of the challenges of evaluating the damage. Therefore, it is provided in the EDA that such compensation shall be awarded to a reasonable amount. It is to be noted, however, that this kind of damage often has consequences of an economic nature, for instance, in the form of reduced market value for real estate, and the claimant is then, in certain circumstances, entitled to compensation for such economic loss.
- 77.
The term “authorities” covers both state and municipal authorities performing environmental protection.
- 78.
On the question of reasonableness, see Wetterstein, note 29 at 193–194 with references. Furthermore, the rules on “limits of tolerance” may also restrict the right to restoration costs. According to EDA § 4, damage to the environment is recoverable only if it is not reasonable to tolerate the disturbance taking into account, among other things, the local circumstances, the situation as a whole that led to the disturbance, and how common this kind of disturbance is in comparable circumstances. The obligation to tolerate disturbances is not applicable to personal injury or more significant property damage. Neither does it affect damage caused by criminal or intentional behaviour. On the “limits of tolerance”, see Wetterstein, note 29 at 85–90.
- 79.
On restoration, see Wetterstein, note 29 at 234–241.
- 80.
See note 71.
- 81.
On the private person’s right to claim restoration costs, see, e.g. Wetterstein, note 29 at 186–193.
- 82.
See Wetterstein, note 71 at 235, note 64. See also Ympäristövaliokunnan mietintö 3/2009 vp, Hallituksen esitys ympäristölle aiheutuvien vahinkojen korjaamista koskevaksi lainsäädännöksi, 2–3.
- 83.
See the Finnish Government Bill 165/1992, 26–27. Regarding the liable person, see the Supreme Court’s decisions KKO 1999:124, KKO 2001:61, KKO 2011:62 and KKO 2012:29. Also the transferee of an activity is liable if he knew or should have known about the damage or disturbance (or the risk of it) at the time of the transfer.
- 84.
However, a person whose apparent contribution to the damage is small cannot be held responsible for damage caused by others (§ 8). It will remain for the courts to decide what counts as “small”.
- 85.
The EU member states were given time until that date to bring into force the legislation necessary to comply with the Directive (art. 19.1). Its implementation by all member states was completed by June 2010. On the legislative history of the ELD, see e.g. K. De Smedt “The Environmental Liability Directive: the directive that nobody wanted – Part I” (2015) 23 Environmental Liability 167–170. The ELD is currently being reviewed under the European Commission’s REFIT programme (Regulatory Fitness and Performance programme).
- 86.
Laws 384/2009 and 385/2009.
- 87.
According to art. 2.9, “imminent threat of damage” means “a sufficient likelihood that environmental damage will occur in the near future”.
- 88.
In the Directive “occupational activity” means “any activity carried out in the course of an economic activity, a business or an undertaking, irrespectively of its private or public, profit or non-profit character” (art. 2.7).
- 89.
These activities include, inter alia, waste management operations, manufacture, use, storage, processing, filling, release into the environment and onsite transport of dangerous substances as defined in art. 2(2) of Council Directive 67/548/EEC (repealed by Regulation 2008/1272 EC), and the discharge or injection of pollutants into waters under the Directive 2000/60/EC.
- 90.
Directive 2013/30/EU of the European Parliament and of the Council on safety of offshore oil and gas operations and amending Directive 2004/35/EC.
- 91.
See art. 38 of Directive 2013/30/EU.
- 92.
See the definition of “marine waters” in art. 3.1 of Directive 2008/56/EC.
- 93.
“Protected species and natural habitats” is explained in art. 2.3. Reference is made to the Wild Birds Directive 2009/147/EC (codified version of Directive 79/409/EEC) and the Habitats Directive 92/43/EEC.
- 94.
For the concept of “conservation status”, see art. 2.4.
- 95.
The significance of such adverse effects is to be assessed with reference to the baseline condition, considering the criteria set out in Annex I to the ELD. “‘Baseline condition’ means the condition at the time of the damage of the natural resources and services that would have existed had the environmental damage not occurred, estimated on the basis of the best information available” (art. 2.14).
- 96.
With the exception of adverse effects covered by art. 4.7 of Directive 2000/60/EC.
- 97.
See art. 2.1.
- 98.
“Natural resource” means protected species and natural habitats, water, and land (art. 2.12) and according to art. 2.13, “‘services’ and ‘natural resource services’ mean the functions performed by a natural resource for the benefit of another natural resource or the public”. On the conceptual issue “impairment of a natural resource service”, see P. Wetterstein “A Proprietary or Possessory Interest: A Conditio Sine Qua Non for Claiming Damages for Environmental Impairment?” in P. Wetterstein (ed), Harm to the Environment: The Right to Compensation and the Assessment of Damages (Oxford University Press: 1997) at 48–50.
- 99.
In art. 2.6 “operator” is defined as “any natural or legal, private or public person who operates or controls the occupational activity or, where this is provided for in national legislation (my italics), to whom decisive economic power over the technical functioning of such an activity has been delegated, including the holder of a permit or authorisation for such an activity or the person registering or notifying such an activity”. On the writing “operates or controls”, see e.g. Statens offentliga utredningar (SOU) 2006:39. Ett utvidgat miljöansvar. Delbetänkande av. Miljöansvarsutredningen (2006) 103–108. Regarding specifically offshore liability, it should be noted that according to Directive 2013/30/EU, the licensee is liable for the prevention and remediation of environmental damage as defined in the ELD, caused by offshore oil and gas operations carried out by, or on behalf of, the licensee or the operator (art. 7). “Licensee” is defined as “the holder or joint holders of a licence” (art. 2(11)) and the “operator” as “the entity appointed by the licensee or licensing authority to conduct offshore oil and gas operations, including planning and executing a well operation or managing and controlling the functions of a production installation” (art. 2(5)). Recital 11 further clarifies that holders of authorisations for offshore oil and gas operations pursuant to Directive 94/22/EC are also the liable “operators” within the meaning of the ELD and should not delegate their responsibilities in this regard to the third parties contracted by them.
- 100.
The Directive does not cover environmental damage or an imminent threat of such damage caused by an act of armed conflict, hostilities, civil war or insurrection, or caused by a natural phenomenon of exceptional, inevitable and irresistible character. Furthermore, the operator is free of liability when he can prove that the environmental damage or imminent threat of such damage “(a) was caused by a third party and occurred despite the fact that appropriate safety measures were in place; or (b) resulted from compliance with a compulsory order or instruction emanating from a public authority other than an order or instruction consequent upon an emission or incident caused by the operator’s own activities” (arts. 4.1 and 8.3). There are also defences introduced via transposition, e.g. the permit defence and the “state-of-the-art” defence (art. 8.4). Finland, among other member states, does allow the “permit” defence but not the “state-of-the-art” defence. On the varying decisions of the member states, see De Smedt, note 85 at 175.
- 101.
See Report from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions under art. 14(2) of Directive 2004/35/EC on environmental liability with regard to the prevention and remedying of environmental damage, COM(2010) 581 final, 4.
- 102.
See the Act on Remedying Certain Environmental Damage § 1, the Nature Conservation Act § 5a, the Environmental Protection Act § 137 para. 2, § 176, and the Water Act Chap. 14 § 6.
- 103.
On this, see Wetterstein note 98, 30–32, 46–54.
- 104.
Traditional liability rules are normally concerned with proprietary or other private (individual) rights, as opposed to public (collective) rights, e.g. fishing rights in the sea and the right to use recreational areas. On these rights, see Wetterstein note 98, 30–43.
- 105.
According to recital (24): “Competent authorities should be in charge of specific tasks entailing appropriate administrative discretion, namely the duty to assess the significance of the damage and to determine which remedial measures should be taken”. See also art. 11.2. On the role and obligations of the authorities, see e.g. M. Nesterowicz “The application of the Environmental Liability Directive to damage caused by pollution from ships” (2007) LMCLQ 113, 115–17.
- 106.
For the liability mechanism to be effective, there needs to be one or more identifiable polluters, the damage should be concrete and quantifiable, and a causal link should be established between the damage and the identified polluter(s). See recital (13). However, causation issues (and the allocation of costs between multiple tortfeasors) was intentionally omitted from the scope of the ELD. See De Smedt, note 85 at 173, 175.
- 107.
The subsidiarity responsibility of competent authorities in the member states to take remedial measures when operators fail to do so has been left to the member states.
- 108.
See arts. 5–6.
- 109.
If possible and appropriate, the alternative site should be geographically linked to the damage site, taking into account the interests of the affected population (Annex II, 1.1.2). Complementary remediation can be used when the environment is so badly damaged that it cannot be restored in the particular location, or if complete restoration would take a very long period of time. As an example, if the damaged environment provides an essential ecological service, such as serving as a breeding ground or a habitat for a species requiring protection or a resting place for migratory birds or animals , then the environmentally useful remedy would be to provide an equivalent environment nearby. This could involve the acquisition and modification of a specific area of land or sea. See L. de La Fayette “The Concept of Environmental Damage in International Liability Regimes” in Environmental Damage in International and Comparative Law – Problems of Definition and Valuation, (eds) M. Bowman and A. Boyle (Oxford University Press: 2002) at 187.
- 110.
According to Annex II, 1(d), “interim losses” means “losses which result from the fact that the damaged natural resources and/or services are not able to perform their ecological functions or provide services to other natural resources or to the public until the primary or complementary measures have taken effect”. H. Aiking, E. H P Brans and E. Ozdemiroglu “Industrial risk and natural resources: The EU Environmental Liability Directive as a watershed?” (2010) 18 Environmental Liability, 5–12, at 7, mention, as an example, that if a spill of chemicals results in significant damage to a number of acres of wetland and natural recovery is the most appropriate option, then during the recovery period some wetland services will be lost or impaired.
- 111.
Annex II, 1.1.3.
- 112.
See Wetterstein, note 4 at 44–45.
- 113.
There are also special rules of law providing for strict liability, e.g. regarding oil pollution from vessels, see P. Wetterstein “Environmental Liability of Operators in Ports - with Some Comments on the Concept of Environmental Damage” in H.Rak and P. Wetterstein (eds), Environmental Liabilities in Ports and Coastal Areas - Focus on Public Authorities and Other Actors (Institute of Maritime and Commercial Law, Åbo Akademi University: 2011) at 213–217.
- 114.
Sandvik, note 72 at 394, and Wetterstein, note 29 at 194 are in favor of such an application of the EDA.
- 115.
Offshore Pollution Liability Agreement 1974 (administered by the Offshore Pollution Liability Association Ltd., UK), effective in the North Sea area. This is a voluntary contractual regime entered into by a group of major oil companies involved in the exploitation and production of seabed mineral resources. See Wetterstein, note 4 at 34 with references.
- 116.
See Report of the Legal Committee on the Work of Its One Hundredth Session IMO LEG 100/14, 21–24.
- 117.
Reference is also made to the following statement in recital (63) to Directive 2013/30/EU: “Operators should ensure they have access to sufficient physical, human and financial resources to prevent major accidents and limit the consequences of such accidents. However, as no existing financial security instruments, including risk pooling arrangements, can accommodate all possible consequences of major accidents, the Commission should undertake further analysis and studies of the appropriate measures to ensure an adequately robust liability regime for damages relating to offshore oil and gas operations, requirements on financial capacity including availability of appropriated financial security instruments or other arrangements. This may include an examination of the feasibility of a mutual compensation scheme…” (my italics). De Smedt, Faure, Liu, Philipsen and Wang, note 24 at 173–226, 380–382, examine and discuss the interesting question of the extent to which risk pooling mechanisms could play an important role in compensating for damage that results from offshore incidents.
- 118.
See e.g. Wetterstein, note 4 at 36–41 with references. Also Russia is a party to most of these conventions.
- 119.
These rules address rather well the civil liability issues discussed in the present article. Regarding environmental impairment liability, see Wetterstein, note 71 at 223–242. It should be noted, however, that the ELD has been thereafter transposed into the national laws of these countries.
- 120.
Principles, Definitions and Model Rules of European Private Law. Draft Common Frame of Reference (DCFR).
- 121.
Cf. the OPOL-agreement mentioned in note 115.
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Wetterstein, P. (2018). Subsea Gas Pipelines in the Baltic Sea Area – Civil Liability Issues. In: Ringbom, H. (eds) Regulatory Gaps in Baltic Sea Governance. MARE Publication Series, vol 18. Springer, Cham. https://doi.org/10.1007/978-3-319-75070-5_8
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