1 Using criminal law to enforce European environmental legislation? Friday 26 November 2010, Katholieke Universiteit Leuven By Prof. Dr. Michael G. Faure, LL.M. Presentation at Workshop Research Group on Transboundary Environmental Law Ius Commune Research School

2 1) Introduction 2) Legal history: a brief account 3) Directives 2008/99 and 2009/123 4) Effective penalties 5) Dissuasive penalties 6) Proportionate penalties 7) A duty to enforce 8) Remaining issues 9) Concluding remarks Structure

3 Basis: Court of Justice 13 September 2005: forcing MS to use criminal law is allowed Basis: Court of Justice 13 September 2005: forcing MS to use criminal law is allowed Directive 2008/99 of 19 November 2008: implementation by 26 December 2010 Directive 2008/99 of 19 November 2008: implementation by 26 December 2010 Directive 2009/123 of 21 October 2009: implementation by 16 November 2010 Directive 2009/123 of 21 October 2009: implementation by 16 November 2010 Duty on MS to punish offences with ‘effective, proportionate and dissuasive’ (criminal) penalties Duty on MS to punish offences with ‘effective, proportionate and dissuasive’ (criminal) penalties Use as basis: Use as basis: Economic analysis of criminal law Economic analysis of criminal law Theoretical literature on criminal law Theoretical literature on criminal law Since MS differ, effective solution may differ as well, as long as penalties are ‘effective, proportionate and dissuasive’ Since MS differ, effective solution may differ as well, as long as penalties are ‘effective, proportionate and dissuasive’ 1Introduction

4 Basis: worries about implementation of EU environmental law in Member States Basis: worries about implementation of EU environmental law in Member States Implementation deficit problematic Implementation deficit problematic Case C-265/95 (Spanish strawberries): Case C-265/95 (Spanish strawberries): Lack of effective prosecution against violators of implementing legislation Lack of effective prosecution against violators of implementing legislation Violation of European law Violation of European law Obligation of national judges and authorities to interprete national law in conformity with directives Obligation of national judges and authorities to interprete national law in conformity with directives Case C-68/88 (Greek corn): Member States free in choosing instrument to implement directive, but penalties for violation should be effective, proportional and dissuasive Case C-68/88 (Greek corn): Member States free in choosing instrument to implement directive, but penalties for violation should be effective, proportional and dissuasive 2Legal history: a brief account

5 First pillar poposal Directive of 13 March 2001 on protection of the environment through criminal law First pillar poposal Directive of 13 March 2001 on protection of the environment through criminal law Third pillar: Framework Decision of 27 January 2003 Third pillar: Framework Decision of 27 January 2003 Institutional conflict: appeal against Council Decision Institutional conflict: appeal against Council Decision Judgment of 13 September 2005 (Case C-176/03): Judgment of 13 September 2005 (Case C-176/03): If application of effective, proportionate, dissuasive criminal penalties is essential measure If application of effective, proportionate, dissuasive criminal penalties is essential measure Necessary to ensure that rules are fully effective Necessary to ensure that rules are fully effective Use of criminal law may be ordered Use of criminal law may be ordered 2Legal history: a brief account

6 Council Framework Decision of 12 July 2005 Council Framework Decision of 12 July 2005 Ship-source pollution: Directive 7 September 2005 Ship-source pollution: Directive 7 September 2005 Court of Justice Decision of 23 October 2007 (Case C-440/05): Court of Justice Decision of 23 October 2007 (Case C-440/05): Determination of type and level of criminal penalties Determination of type and level of criminal penalties Not within community’s sphere of competence Not within community’s sphere of competence Case law remains relevant, also after TFEU Case law remains relevant, also after TFEU 2Legal history: a brief account

7 Directive 2008/99: Directive 2008/99: Criminal penalties necessary Criminal penalties necessary No obligations on application of penalties in individual cases No obligations on application of penalties in individual cases Article 3 lists offences Article 3 lists offences Article 5: effective, proportionate and dissuasive penalties Article 5: effective, proportionate and dissuasive penalties For legal entities: the same (but not necessarily criminal) For legal entities: the same (but not necessarily criminal) Directive 2009/123: same model Directive 2009/123: same model 5a specific infringements 5a specific infringements Article 8 effective, proportionate and dissuasive penalties Article 8 effective, proportionate and dissuasive penalties Also for legal entities Also for legal entities 3 Directives 2008/99 and 2009/123

8 4.1Meaning of effectiveness? Able to reach goals set by legislator Able to reach goals set by legislator High level of environmental protection High level of environmental protection Ex ante test (theoretical) Ex ante test (theoretical) Ex post (empirical) verification Ex post (empirical) verification Effectiveness strongly linked with proportionality and dissuasiveness, but Effectiveness strongly linked with proportionality and dissuasiveness, but Autonomous meaning in functions of penalties: Autonomous meaning in functions of penalties: 1. General deterrence (dissuasion) 1. General deterrence (dissuasion) 2. Restoration of harm caused in the past 2. Restoration of harm caused in the past 3. Prevention of future harm 3. Prevention of future harm Specific functions of penalty in environmental cases, may require specific penalties Specific functions of penalty in environmental cases, may require specific penalties 4Effective penalties

9 4.2Effective penalties for environmental pollution? 4.2.1Functions of penalties Deterrence (dissuasion) Deterrence (dissuasion) Prevention of future harm Prevention of future harm Restoration of harm that occurred in the past Restoration of harm that occurred in the past Hence, other penalties necessary than traditional penalties (fine and imprisonment) 4Effective penalties

Restoration of harm Convict polluter to clean up a polluted soil Convict polluter to clean up a polluted soil Remove waste deposited illegally Remove waste deposited illegally Order to compensate victims etc. Order to compensate victims etc. Many examples in MS-law Many examples in MS-law 4.2.3Prevention of harm Prohibit use of installation that caused violation Prohibit use of installation that caused violation Closing enterprise etc. Closing enterprise etc. Many examples in MS-law e.g. Many examples in MS-law e.g. Enter in register for ‘non environmental responsible persons’ (Denmark) Enter in register for ‘non environmental responsible persons’ (Denmark) Financial consequences may be huge Financial consequences may be huge 4Effective penalties

11 5.1General deterrence theory Gary Becker: if Gary Becker: if B = benefits P = probability of being detected, prosecuted and convicted S = sanction actually imposed Decision of polluter depends on: Decision of polluter depends on: B > < p x S If harm to society and benefit to polluter large and if p low, sanction should be high If harm to society and benefit to polluter large and if p low, sanction should be high 5Dissuasive penalties

12 5.2Does environmental law deter? Probability of detection and prosecution low Probability of detection and prosecution low E.g. in Flemish Region p is less than 1% E.g. in Flemish Region p is less than 1% Reason: prosecutors dismiss many cases: 62% Reason: prosecutors dismiss many cases: 62% Similar evidence from UK and Germany Similar evidence from UK and Germany Also sanctions imposed relatively low fines Also sanctions imposed relatively low fines Hence, expected sanctions (p x S) low Hence, expected sanctions (p x S) low E.g. Flemish Region varying from € 87,7 to € 176 to € 181 E.g. Flemish Region varying from € 87,7 to € 176 to € 181 5Dissuasive penalties

13 5.3Does low expected sanctions equalize low dissuasion and low effectiveness? Harrington paradox: expected penalties very low, nevertheless environmental (criminal) law deters Harrington paradox: expected penalties very low, nevertheless environmental (criminal) law deters Recent evidence: Almer and Goeschl Recent evidence: Almer and Goeschl Harrington: why do firms comply at all? Harrington: why do firms comply at all? 5.4Other reasons for compliance 1. No prosecution  nothing happens 1. No prosecution  nothing happens 2. Other costs? Shaming (reputational loss) 2. Other costs? Shaming (reputational loss) 3. Regulatory dealings (soft approach) 3. Regulatory dealings (soft approach) 4. Subjective perceptions 4. Subjective perceptions 5Dissuasive penalties

14 5.5Effectiveness without dissuasion? Other elements than the (financial) penalty may influence decision to comply Other elements than the (financial) penalty may influence decision to comply Some/many violations out of ignorance, not intentionally Some/many violations out of ignorance, not intentionally Information strategies may be effective Information strategies may be effective 5Dissuasive penalties

15 6.1Proportional to violated interest Based on German legal doctrine for different models of environmental crime Based on German legal doctrine for different models of environmental crime Distinction between protected interest (environment, human health or administrative interest) Distinction between protected interest (environment, human health or administrative interest) Type of infringement (endangerment or violation) Type of infringement (endangerment or violation) Allows to differentiate seriousness of offence and hence penalty Allows to differentiate seriousness of offence and hence penalty Add to porportionality = relationship between seriousness of offence and penalty Add to porportionality = relationship between seriousness of offence and penalty 6Proportionate penalties

16 Model I (abstract endangerment): enforces prior administrative decisions, vindicates administrative values Model II (concrete endangerment): requires proof of threat of harm to the environment. Vindication of environmental values. Usually an emission Model III (concrete harm crimes): like II, but proof of actual (environmental) harm Model IV: serious environmental pollution: eliminating the administrative link; permit shield no longer applies 6Proportionate penalties

17 Can lead to a graduated punishment approach: 6Proportionate penalties Model I Administrative Model II Endangerment Model III Harm Model IV Serious Pollution A: human focus B: env’tl focus A: human focus. B: env’tl focus A: actual B: presumed Model I

18 More elements can be introduced e.g. More elements can be introduced e.g. Mental state (knowingly or negligently) Mental state (knowingly or negligently) Primary actor or inciting aiding or abetting Primary actor or inciting aiding or abetting May allow to relate punishment to seriousness of offence May allow to relate punishment to seriousness of offence 6Proportionate penalties

19 6.2Graduated punishment approach in practice Could be applied to penalties provided in MS-law Could be applied to penalties provided in MS-law MS-law differentiates penalties to some extent, but not perfectly MS-law differentiates penalties to some extent, but not perfectly Applicable to offences in the Directives? Applicable to offences in the Directives? Only to fill in proportionality requirement Only to fill in proportionality requirement Model IV may not be applicable, all require unlawfulness Model IV may not be applicable, all require unlawfulness Can be applied by legislator and judge Can be applied by legislator and judge 6Proportionate penalties

20 6.3Usefulness of graduated punishment approach No miracle solution or panacea No miracle solution or panacea Advantage: relating types of values protected and endangerment to penalties Advantage: relating types of values protected and endangerment to penalties Can provide some guidance Can provide some guidance More differentiation is possible according to mens rea: More differentiation is possible according to mens rea: 2008/99: intentionally versus serious negligence 2008/99: intentionally versus serious negligence 2005/35: intent, recklessness or serious negligence 2005/35: intent, recklessness or serious negligence Currently the offences cover (too) many types of behaviour Currently the offences cover (too) many types of behaviour May make implementation difficult: May make implementation difficult: Ideally different penalties for different behaviour Ideally different penalties for different behaviour Hence, differentiated approach desirable Hence, differentiated approach desirable Literal transposition impossible Literal transposition impossible Or to be left to the judge…? Or to be left to the judge…? 6Proportionate penalties

21 Danger: paper implementation and next: nothing happens… Danger: paper implementation and next: nothing happens… Spanish Strawberry’s case: lacking effective prosecution violates European law Spanish Strawberry’s case: lacking effective prosecution violates European law Hence, for ECJ practical enforcement matters! Hence, for ECJ practical enforcement matters! But… perfect compliance neither possible nor desirable (too costly) But… perfect compliance neither possible nor desirable (too costly) Targeted monitoring may be effective to reach compliance Targeted monitoring may be effective to reach compliance Hence, duty to enforce (if at all possible under EU law) not desirable Hence, duty to enforce (if at all possible under EU law) not desirable Requirements of ECJ case-law suffice Requirements of ECJ case-law suffice 7A duty to enforce?

22 8. Remaining issues Unlawfulness? Unlawfulness? Reference to environmental legislation listed in annexes Reference to environmental legislation listed in annexes Unlawfulness limited to that? Unlawfulness limited to that? Necessary to show correct implementation and penalisation of every implementing legislation? Necessary to show correct implementation and penalisation of every implementing legislation? What about temporal changes? What about temporal changes? New directives, new annex? New directives, new annex? COM: no clear answer yet! COM: no clear answer yet!

23 Effectiveness, dissuasion and proportionality addressed at different players: both legislator and judge Effectiveness, dissuasion and proportionality addressed at different players: both legislator and judge Proportionality: relationship between offence and size and type of penalty: legislator and judge Proportionality: relationship between offence and size and type of penalty: legislator and judge Dissuasiveness: legislator: if potential gain to offender high, social harm large and p low, effective penalties should be high Dissuasiveness: legislator: if potential gain to offender high, social harm large and p low, effective penalties should be high Hence also role for the judge Hence also role for the judge If insolvency risk: non-monetary sanctions necessary If insolvency risk: non-monetary sanctions necessary Effectiveness requirement in environmental law: Effectiveness requirement in environmental law: Restoration of harm from the past Restoration of harm from the past Prevention of future harm Prevention of future harm Requires penalties aiming at those goals (also via administrative law?) Requires penalties aiming at those goals (also via administrative law?) 9Concluding remarks

24 Administrative fines may lead to additional deterrence Administrative fines may lead to additional deterrence Given low prosecution rates for environmental crime Given low prosecution rates for environmental crime Still issues to be discussed, e.g. how to interpret proportionality requirement: graduated punishment approach in legislation or via judiciary? Still issues to be discussed, e.g. how to interpret proportionality requirement: graduated punishment approach in legislation or via judiciary? May be very much dependant upon country specific characteristics May be very much dependant upon country specific characteristics Bound to a national legal culture and path-dependency Bound to a national legal culture and path-dependency May necessitate some differentiation to increase effectiveness May necessitate some differentiation to increase effectiveness Enforcement in practice remains important, but data are largely lacking Enforcement in practice remains important, but data are largely lacking Important issue to verify effectiveness and compliance is: Important issue to verify effectiveness and compliance is: Introduce reliable data collection system in MS Introduce reliable data collection system in MS In order to examine and improve: In order to examine and improve: 9Concluding remarks

25 Effectiveness of environmental criminal law in practice! 9Concluding remarks