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ENVIRONMENTAL LIABILITY: DOES LAND OWNERSHIP IMPLY AN OBLIGATION TO RESTORE A CONTAMINATED AREA?

March 2019 - Projects, energy and natural resources. Legal Developments by Villata, Degli Esposti e Associati.

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A recent judgement delivered by the Administrative Court of Brescia (No. 964/2018) clarified uncertainty on the responsibility of decontaminating a polluted area, specifically enquiring the relationship between ownership and decontamination. 

The case involves an Italian company that produces commercial trucks and carries out its activities in a wider area affected by groundwater and subsoil contamination. The environmental legislation prescribes decontamination in case an area has long been affected by pollution (specifically in the event of persistent and ongoing pollution).

Somebody not easily identified contaminated the area where the company is located. The company uses a variety of materials, which are unrelated to the contamination found in the production area, as confirmed by samples collected on site. According to the enquiries carried out by the Public Administration, substances lying on the soil and groundwater did not correspond to components used in the production cycle of the company (it was in fact later proved that contamination of the area was the result of the activities carried out by other companies in the area on previous occasions). 

In this specific case, the levels of pollution detected on site were above the safety threshold, consequently leading the Public Administration to require the owner of the company therein located to restore the area.  

The company involved showed that it was not responsible for contamination as it demonstrated that the origin of the contamination was related to industrial activities carried out in the wider area by other companies in past years. Indeed, as confirmed by the competent authorities, pollution found on site was not at all related to the pollutants present in the groundwater and subsoil.

The case law therefore hinges on the controversial topic of decontamination and legal liability in Environmental law. This legal concept exists in every European state and stems from European Union law. Liability in this field is premised on the “polluter pays principle” referred to by the European Court of Justice (hereinafter: ECJ) as a pivotal principle regulating environmental liability. According to a bunch of ECJ decisions (i.e. Commune de Mesquer v Total France SA and Total International Ltd., C-188/07), obligation to restore shall be imposed based on the damage caused. Directive 2004/35/EU introduced this principle into European Union Law, providing leeway to every Member State to choose the manners to properly identify who is accountable. In Italy, this principle was transposed into environmental legislation, whereby no strict liability upon the owner of the contaminated area is provided. Therefore, according to Article 240 of the Environmental Code, the competent authority cannot impose measures of reparation to the owner of the area not responsible for contamination. Indeed, Article 250 of the Environmental Code expects those non-responsible to merely carry out preventive measures, which need to produce immediate effects in order to curtail the polluting event.

The Court stated that the owner of the area has a duty of care in managing its property, because undue negligence or carelessness may lead to render it liable for its site. Conversely, the binding obligation to decontaminate and restore the area exists when the authority demonstrates that the owner has contributed to the damage. Article 244, para. 2, of the Environmental Code considers that a causal link between the action of the polluter and the environmental damage needs to be identified, in order to impose measures of reparation to those responsible (regardless of the levels of pollution involved). In case the responsible subject polluting the area cannot be identified, necessary interventions are adopted by the competent administration. The owner may be expected to promptly restore the site returning a sum equal to the market value of the area, in order to compensate the expenditure costs. Indeed, according to Article 253 of the Environmental Code, any contaminated area must be restored to the previous status and the owner is considered financially liable in the restoration of the site.

Instead, for those cases dating back to the time of pollution, the Administrative Court of Brescia has specified criteria to assess the liability of the subject involved. The Court has applied the parameter of alleged liability in light of Article 2050 Civil Code (referring to the responsibility for the exercise of dangerous activities) attributing to the subject, which carried out its dangerous activities, the burden to demonstrate the due adoption of every measure required to prevent the damage.

Conclusively, this administrative case law on decontamination points out that land ownership does not imply a commitment on the owner to restore damages provoked on site by previous activities. However, the owner may be required to adopt due diligence measures to preserve the site itself, as well as returning the amount of money invested by the public authorities to decontaminate.