Transnational Environmental Law
Polluter pays principle and its limitations
Barrister Abu Hena Mostofa Kamal
Polluter Pays Principle" has become a popular catchphrase in recent times. 'If you make a mess, it's your duty to clean it up'- this is the main basis of this slogan. Polluter Pays Principle recognises that the polluter should pay the costs for such measures as are necessary to eliminate the environmental pollution created by him or to reduce its amount so as to comply with the required standards. It should be mentioned that in environmental law, the 'polluter pays principle' does not refer to "fault." Instead, it favours a curative approach which is concerned with repairing ecological damage.
The Organisation for Economic Co-operation and Development (OECD) first endorsed the concept of Polluter Pays Principle in 1972. Before that, the Paris convention 1960 and the IAEA liability convention 1963 tried to promote 'the Polluter Pays concept' in order to secure sufficient compensation from the polluter for the victims. We should keep it in mind that this principle is not a new concept; it can find a source far back in legal history. Among the ancient scholars, Greek philosopher Plato fist recognised the concept of Pollution Prevention Pays. He said "If anyone intentionally spoils the water of another ... let him not only pay damages, but purify the stream or cistern which contains the water... “[The Dialogues of Plato: The Laws, vol. 4, book 8, section 485(e), translated by Jowett B, Oxford: Clarendon Press (4th ed.), 1953.] Plato recognised that water could be both privately and commonly owned; compensation would be payable by the water-polluter in both event, and this person could further be required to rectify the damage done. Basically, Polluter Pays Principle is an up-to-date reformulation of an idea that has been around some time. But the modern Polluter Pays concept was developed by the OECD during the 1990s and was first widely discussed in the United Nations Conference on Environment and Development held in Rio de Janeiro of Brazil in June 1992. The most extreme example of this principle in practice is the American "Superfund' legislation.
The polluter pays principle is basically regarded as a principle of domestic law rather than an international law; but it is often incorporated into international agreements. For example, Article 2 of the OSPAR Convention for the protection of the marine environment of the north-east Atlantic (1992) requires contracting parties to:
'Apply the polluter pays principle, by virtue of which the costs of pollution prevention, control and reduction measures are to be borne by the polluter.'
It should be mentioned that EC adopted the Polluter Pays Principle in 1973.It was stated in the EC recommendation (Council Recommendation 75/436/EURATOM, ECSC, EEC of 3 March 1975, Annex, para 2 OJL 169, 29.6.1987.p.1.):
'Natural or legal persons governed by public or private law who are responsible for pollution must pay the costs of such measures as are necessary to eliminate that pollution or to reduce it so as to comply with the standards or equivalent measures laid down by the public authorities.'
More recently the polluter pays principle has also been adopted in other environmental treaties, including the ASEAN Convention 1985, the Alps Convention 1991, the UN/ECE Transboundary Waters Convention1992, the OSPAR Convention 1992 and the Baltic Sea Convention 1992.
In recent days, the polluter pays principle is seen as 'a way of internalising pollution-related costs within the context of the economic rationality of the enterprise'. Furthermore, under this principle it is not the responsibility of government to meet the costs involved in either prevention of environmental damage, or in carrying out remedial action, because the effect of this would be to shift the financial burden of the pollution incident to the taxpayer. But State practice does not support the view that all depollution costs should be borne by the polluter, particularly where transnational dispute is involved.
It is true that polluter pays principle has a positive effect to reduce pollution. The principle seems quite relevant for pollution that occurs during industrial activity, although it remains inefficient in the case of historical pollution. Legal theorists discovered few loopholes of this rule. The flaws are as follows:
(a) Ambiguity still exists in determining 'who is a polluter'. In legal terminology, a 'polluter' is someone who directly or indirectly damages the environment or who creates conditions relating to such damage. Clearly, this definition is so broad as to be unsupportive in many situations. For example, Mr.Aryaan owns a BMW .If his BMW emits harmful gas in the atmosphere, he will be directly liable for the emission .Furthermore, the manufacturer of the vehicle will be indirectly liable for committing ecological damage too and so the retailer of the vehicle and the fuel supplier, and the government who created 'conditions relating to the damage' by building roads and neglecting public transport regulations.
(b) It is extremely difficult to make a polluter to pay 'the depollution cost' particularly where environmental damage arises from several simultaneous causes or from a number of consecutive causes or when several companies operate on one or several states and has equal contributions to the same pollution. Furthermore, the use of elaborate technology, dangerous processes, and toxic materials makes the 'fact-finding process' difficult. Because, the potential long-term effects of the incident, huge number of victims, medical causation are extremely difficult to ascertain.
(c) The responsibility to repair pollution lasts for the long period, and it does not disappear easily after depolluting events intervene. The prevention costs remain a charge for the polluter for life, although he has few means to control it. Moreover, in order for an industrial disaster to occur, 'a great amount of resources is initially required to create and implement the technology which, in turn, necessarily involves multiple actors. This makes the allocation of fault in a traditional legal process all the more difficult, making it easier to shift blame from shoulder to shoulder indefinitely.'
(d) Time always remains a crucial factor in resolving the ecological dispute. Where multi-territorial environmental dispute involves innocent victims, mostly those living in a developing country with limited resources do not have unlimited time. International tribunals are not always happy with their apt performance in providing judgment for transnational environmental dispute.
(e) It is not always an easy job to make the polluter pay for committing ecological damage where multi-territorial or single jurisdiction is involved. In many cases, in order to avoid liabilities, the company responsible terminates its activities or transforms or may simply disappear. In many cases, identified polluter loses his capacity to pay due to bankruptcy or insolvency. Today, the environmental regulations do not offer a solution in such cases. Therefore, an unequivocal transnational treaty is essential for resolving legal problems which exist in the realm of Polluter Pays Principle.
Despite the fact that Polluter Pay Principle was publicised by early conservationists as a means to reduce ecological pollution, still many consider it as a 'vague idea'. Some put forward their argument that under this principle a polluter fulfils his obligations when he pays at least some of administrative expenses of the agencies who regulate pollution activities ('Exxon Valdez' case is the best example of this criterion of Polluter Pays Principle. In 1989, an oil tanker owned by Exxon spilled out over 300,000 barrels of crude oil into the sea and caused significant environmental hazard. Exxon was forced to pay $125 million in fines to the federal government and the state of Alaska and $900 million into a fund for environmental projects controlled by government, habitat protection, and scientific research, among other things). Others argue that it can only be satisfied by polluters when they will pay the total depollution cost. And the rest support the view that tax (like 'Carbon Taxes') should be legitimised on the users of the natural resources that cause atmospheric hazards.
The author did his graduate and post graduate legal degrees from United Kingdom .Right now he is working with several Ngos who primarily work with environmental issues