In the Federal Republic of Germany, the protection of the environment is subject to federal and state legislation. The general scope of environmental legislation is the protection of soil, air, water, flora and fauna from the detrimental effects of human interference, often described as the prevention principle. If prevention fails and damage is caused to the environment, normally the polluter (disturber) will be held liable for the condition of the environment and will be required to remedy such damage either in part or in full, or to provide financial compensation - the causation principle.
At present, there exists no general environmental code which defines environmental standards and the liability of persons not complying with these standards. Federal, state and in certain cases also local legislation define the standards for the different environmental media.
Needless to say, European Community (EC) legislation is also of great importance for Germany's environmental legislation, since a considerable portion of Germany's legislation is based upon the implementation of EC law and EC standards.
The most important principle in German environmental law is the causation principle. As indicated earlier, this says that the party responsible for endangering, polluting or causing damage to the environment will be charged with the cost of remedying the environmental damage. Furthermore, the causation may also trigger liability claims and the persons causing the environmental damage may be held liable under criminal law.
The Police Acts
If pollution is caused to the environment and if no provisions of a specific act are applicable, the person causing the pollution and also the owner or the tenant of real estate can be held liable under the Police Acts of the various federal states. These persons are the so-called disturbers.
The Police Acts of the federal states follow the same principle. If no special laws (eg. the Federal Soil Protection Act or the Water Management Act) are applicable, and if environmental pollution endangers public safety and order (this is any event, action or omission which endangers human life or health, property, nature, water, soil or other public goods), the authorities are empowered at their discretion to take all appropriate measures, including investigative ones, to avert such danger. When making the decision as to which measure is appropriate in the given case, the authorities are bound by the principle of proportionality.
This states that:
Within this general framework, the authorities may order investigative measures (eg. soil, soil-air or water tests) and/or clean-up measures (eg. groundwater stripping, soil-gas clean-up, or soil removal). The appropriate measure will depend on the various facts and circumstances of the specific case, such as the type and the scope of contamination, previous and present use of the site, and the geological and hydrological conditions of the site and its surroundings.
In principle, the authorities may order at their discretion that either the person causing the damage or the person having factual control of the source causing danger to the environment (eg. the owner or tenant of real estate) takes the appropriate measures, or bears the costs of such measures for averting a danger to public safety and order. In practice, the authorities normally hold liable the person or entity actively causing the danger. However, the liability of the owner of real estate can become relevant if the entity or person actively causing the danger no longer exists, if he does not have the financial standing to pay for the clean-up measures, or if the contamination has a long and unclear history.
The authorities may also hold a number of disturbers liable (eg. one or more polluters or the polluter in combination with the landowner). If several persons are to be regarded as disturbers and can be held liable by the authorities, the question arises as to whether the persons actually held liable by the authorities may claim total or pro rata indemnification from the other liable persons. This question is not governed by the Police Acts. If no agreement exists between these persons (eg. within the scope of a purchase or acquisition agreement) and if this question is not governed by a specific law, such as the Federal Soil Protection Act which contains provisions on the internal indemnification of several disturbers, the person held liable by the authorities may not claim a total or pro rata refund from the other co-disturbers.
The question as to whether or not the applicability under the Police Acts is excluded if the activity causing the damage had been permitted by the authorities is controversial under German law.
Having outlined general environmental liability under the Police Acts, it is worth considering in more detail liability for water and soil protection as these are of utmost importance in environmental practice in Germany.
The Federal Soil Protection Act (Bundesbodenschutzgesetz)
The procedures of commercial and public enterprises, as well as the operation of waste dumps, may cause the release of hazardous substances into the environment and may, in particular, result in the contamination of soil and water. In 1998, Germany enacted the Federal Soil Protection Act. The purpose of this act is to prevent detrimental modifications of soil and define the persons who can be held responsible by the authorities to remedy environmental contamination.
Section 4 II of the Federal Soil Protection Act (FSoilPA) provides that the owner of real estate and the person who has factual control over a piece of land, such as a tenant, are obliged to take measures to prevent dangers which pose a threat to the soil on their property. Section 4 III FSoilPA stipulates that a person who causes the soil contamination as well as his successor, the owner of real estate, as well the person who has factual control over the real estate, are obligated to clean-up the soil and also (ground) water which has been contaminated to the extent that further danger is precluded. However, Section 4 IV FSoilPA provides that, with respect to clean-up standards, the admissible use of the land and the zoning provisions have to be taken into consideration. This means that the clean-up standard for residential areas is substantially stricter than that for commercial or industrial sites.
Also, a former owner of real estate can be held liable for soil contamination if he sold his real estate after 1 March, 1999 and if he had knowledge or must have had knowledge of the contamination. However, the liability of the former owner of real estate does not apply to persons who believed in good faith that their land was free of contamination when they acquired it and if they had no reason to believe that the land was contaminated when they acquired it.
Further, in March 2000, the German Constitutional Court (Bundesverfassungsgericht) held that the liability of a person who did not cause the contamination of soil must be limited either to the value of the real estate after completion of required clean-up measures if such person had no knowledge of the contamination when the land was acquired, or to the value of the assets used in connection with such land (eg. the value of an enterprise operating on such contaminated site) when the owner knew or must have known that he had acquired contaminated land. Section 24 FSoilPA provides that the costs for appropriate investigative or clean-up measures must be borne by the liable person (the polluter, the owner, the user or the former owner, etc) as joint debtors. Internally, between several liable persons, each person must bear such portion of the damage which reflects his contribution to the damage as long as the liable persons do not agree internally on a different allocation of the damage. If no agreement exists internally, the person causing the damage must bear the burden of cost for clean-up measures rather than the owner of real estate as a rule of thumb.
Besides the liability concept of the FSoilPA, depending on the circumstances of the given case, other provisions can also have an impact on liability for soil contamination (eg. provisions of waste law, water law or state laws on the prevention and remedy of danger to public safety and order).
Civil law responsibility
Under civil law, various provisions exist which stipulate civil law responsibility for environmental pollution.
Under tort law, a party who unlawfully or culpably contaminates the property of another person is liable for compensation for damages under Section 823 of the German Civil Code. According to Section 22 of the Water Management Act, a person who is responsible for groundwater contamination is liable to compensate damages which were caused to third parties as a result of the groundwater contamination. A precondition of liability under the Water Management Act is the introduction of polluting substances to water, whereby the harmful substances must have emanated from a dangerous installation sunk into the earth, and have seeped into the groundwater from there.
If property is damaged by an environmental effect which emanates from particular installations, under the provisions of the Environmental Liability Act, the owner of the installation is obliged to pay compensation for the damage caused. If a person is killed or suffers bodily injury, or if property is damaged, as a result of an effect on the environment caused by an installation listed in an appendix to the Environmental Liability Act, the operator of the installation is under an obligation to compensate the third party for the resultant damage. If, in view of the circumstances of the given case, an installation is likely to have caused the respective damage, it will be presumed that the damage was caused by this installation. However, the presumption of causation shall not apply if several installations are likely to have caused the damage.
Section 15 of the Environmental Liability Act defines the maximum amount of liability under this act. The party responsible for rendering compensation will be liable for death, physical injury or damage to the health of any person only up to a total of DM160 million and similarly, in respect of damage to property, only up to a maximum amount of DM160 million, provided that the damage has been caused by one single effect on the environment. If the various damage compensation payments to be made for that one single effect on the environment exceed the respective maximum amount specified above, the individual compensation payments will be decreased according to the proportion of their overall amounts to the specified maximum amount.
Liability under the Environmental Liability Act does not affect liability existing on the basis of other provisions. Furthermore, the operators of certain installations specified in an appendix to the Environmental Liability Act are under the obligation to ensure that they will be able to comply with their legal obligations to compensate for damages under the Environmental Liability Act. Such security may be provided in particular through third party insurance.
This overview is intended to outline some important principles of environmental liability in Germany. In the event that environmental damage occurs, it will remain to be seen whether, in consideration of all facts of the given case, environmental damages will be settled on the basis of the principles outlined above, or whether further provisions will have an impact on liability.
Dr Ralf Hesdahl is a partner in the commercial law firm GAEDERTZ Rechtsanwälte. He is also a member of the German Society for Environmental Law. E-mail: firstname.lastname@example.org