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SUMMARY REPORT

6TH ELD STAKEHOLDER WORKSHOP

“REVIEW AND PERSPECTIVE OF THE MULTI-ANNUAL

ELD WORK PROGRAMME”

Manos Conference & Business Center (Grand Place room),

Chaussée de Charleroi 135, Brussels

5th of March 2019

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Objective and Nature of the Workshop The main objective of the Workshop was to review with key stakeholders the progress on the implementation of the ELD Multi-Annual Work Program 2017-2020 (“mid-term review”) and to look into the future of the ELD work programme and developments. About 60 stakeholders were present at the workshop. They came together from insurance and financial security (23), governments, authorities and agencies (18), industrial operators and industry associations (10) and from other provenances, such as consultants, risk assessment experts, loss adjusters, NGOs and academia (9). This document follows the agenda of the meeting. It summarises the main points of presentations and discussions. All meeting documents including presentations are available at the CIRCAB website: https://circabc.europa.eu/ui/group/cafdbfbb-a3b9-42d8-b3c9-05e8f2c6a6fe/library/0630b0c6-f8e4-41d7-accd-bc823a533989?p=1&n=10&sort=modified_DESC Further information on the Environmental Liability Directive can be found at: http://ec.europa.eu/environment/legal/liability/index.htm.

MORNING SESSION Review of the ELD Multi-Annual Work Program (MAWP) 2017 – 2020 The representative of the European Commission welcomed the participants and introduced the agenda, the speakers of the morning session, and provided some organisational information. The agenda for the stakeholder workshop included in the beginning a series of short presentations connected to the ongoing MAWP 2017 – 2020. Interactive and participatory exchange of opinions and conversation through “World Café” discussion rounds and a live polling tool called “Sli.do” should enable full engagement and involvement of all participants and an as representative as useful collective gathering of knowledge and views. The Commission representative then provided a short overview of the ELD Multi-Annual Work Program (MAWP) 2017 – 2020 and of the possible next steps. The outcome of the 2016 evaluation of the ELD highlighted the need to improve the evidence base of the ELD get a better overview and improve fragmented information and data for the Commission, governments and all stakeholders and practitioners. Further, it showed a need for building up more and better capacities, resources and expertise to handle the ELD better and more often as needed. Another focus in the MAWP is on improving financial security for ELD liabilities to create a better and more even level playing field across the EU. The results of the evaluation have thus laid the basis for the Multi-Annual Work Program, including the development of the ELD information system and the country fiches that are part of the work on improving the evidence base. The country fiches provide an overview of the ELD implementation in all EU Member States. They will be uploaded in the Commission website by end of April or in early May. In terms of its implementation, the ELD information system is launched in 2019 and will be gradually enhanced until 2021. Moreover, guidelines on “environmental damage” (legal amendment to the ELD as

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part of the “Reporting Alignment Regulation”, to enter into force in April or May 2019) shall be elaborated and adopted by the Commission before the end of 2020. Apart from the completion of the current MAWP, a new MAWP 2021 – 2024 will be prepared in 2020. According to the new Article 18 ELD pursuant to the Reporting Alignment Regulation, the evaluation of the ELD needs to be carried out in future every 5 years, based on information and data in the Member States, collected always one year ahead. The first Commission evaluation under this new provision will be published in 2023. Moreover, the Commission aims to gather to day also stakeholders’ expectations for the ELD up to 2030. The Commission will consider several objectives such as how to increase the effectiveness of the ELD, if any legal modifications are needed to the ELD and how to improve the interplay between EU and national legislation. Some other considerations (such as for example the promotion of Sustainable Development Goals and the “polluter pays principle”) shall also be considered. Sli.do, round 1: The Commission ran a first “warm-up” Sli.do round to familiarise the audience with the use of this digital tool. Its results can be found to the Sli.do results document in Annex II.

Presentations within the MAWP working areas 1, 2 and 3 (evidence base, training and capacity building, financial security) ELD information system and country fiches A representative from Milieu presented briefly the work results under the current MAWP, aiming to develop an ELD Information system, including country fiches, as well as regarding training and capacity building. She provided an overview of the process for compiling data for country fiches, the methodology of the desk research carried out and announced that the final version of the country fiches will be ready in April, once final inputs from authorities and stakeholders are received. The key findings of that research were also presented. The data suggest that no information is systematically collected for all types of environmental damage. Only a few countries have introduced a registry of ELD cases, which is not mandatory under the ELD. Civil, criminal and administrative liability systems complement the ELD. Different Member States use the ELD as a primary system to restore environmental damage and others as a secondary system. Regarding capacity building, Milieu has updated the EU training material and has developed case studies to assist with the understanding of the ELD implementation.

Financial Provisions Projects A representative from the Scottish EPA provided a short presentation on the IMPEL project on Financial Provision, carried out in three stages over the last years. In 2017 an IMPEL practical guide has been developed in an effort to provide support to the use of financial security instruments for various purposes and needs in implementing environmental requirements under EU law, including for the ELD. Last year, the IMPEL project looked into three different tools, helping to calculate better the necessary financial security amount in dealing with liabilities. The three tools, developed in different jurisdictions, have been examined under their suitability and practicality for different purposes and needs, including their possible use at EU-MS level within the IMPEL project: an Irish spreadsheet, a Dutch tool and a Spanish methodology and tool. The presentation was concluded with the speaker urging the participants to test the three tools and to provide feedback to its creators and/or the Commission.

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World Café, first session In the first world café session, two rounds of questions were asked to the participants of the workshop. The first round was revolving around the improvement of the evidence base and included the following questions: 1.What information and data do I need for implementing the ELD? and 2.Do we still need to improve the evidence base further? The responses gathered by the participants produced a variety of conclusions: Many of the respondents considered that better definitions and a harmonised understanding of the term “significant environmental damage” could help to improve implementation. As far as reporting is concerned multiple suggestions were made, relating to the creation of a common IT database that would include consistent and comparable data and examples of ELD and non-ELD cases. The participants proposed that those common formats should include the incident type, date of the incident, responsible parties and the type of damage caused to the environment. The participants also underlined the importance of cooperation and communication between the national competent authorities sharing information on ELD cases, including on public expenses, remediation costs and techniques as well as a synopsis of the financial security requirements. They also considered that a legislation synopsis of how ELD is affecting stakeholders and operators would be of use. Finally, they re-affirmed that prevention is more important than remediation. The outcomes of those discussions were presented at a later stage and a summary can be found in the World Café summary in Annex I. The second round of questions revolved around the issue of financial security and consisted of two questions: 1. What in the IMPEL project can I take with me as useful? Is there something missing? 2.What could we do to improve financial security for ELD liabilities of operators? The participants underlined the importance of raising awareness of the ELD and financial security amongst operators. This includes providing information and clarity over a variety of subjects, such as the options on financial security, the difference of mandatory and risk-based financial security, tools for risk assessment and good practices for prevention. The cooperation between national legislators is also much needed, especially for the exchange of information on risk calculation methodologies used and on examples of best practice in implementation. The issue of availability of financial security instruments has also been discussed and the conclusions drawn was that there is a need for more information on the availability and uptake of financial security. Furthermore, such financial securities instruments should be available at a reasonable cost to all operators (including SMEs as well) and not merely to those operators included in Annex III ELD, while the benefits of co-existence of insurance and bonds should be considered. Finally, there was a consensus on the fact that better financial understanding on security instruments is needed. That might include better informing the operators on financial solutions, but also promoting a fuller technical understanding of the interaction of financial security with the company’s balance sheets, annual report and the enforced accounting standards. Of course, a vital prerequisite for all the above is that the ELD is rigorously and effectively enforced. The outcomes of those discussions were presented at a later stage and a summary can be found in the World Café summary in Annex I.

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Sli.do, round 2: The Commission ran another Sli.do round with questions relating to building of evidence base, financial security and the effective implementation of the ELD. The results can be found in Annex II.

Continuation of presentations within the MAWP working areas 1, 2 and 3 (evidence base, training and capacity building, financial security) Financial Security Study 2019 A member of Stevens & Bolton provided a short presentation on the new study that has been recently launched on existing financial security systems for environmental liabilities and how to improve financial security in the context of the Environmental Liability Directive. She explained that the purpose of this study was to examine a wide array of possible financial security mechanisms. The study is aiming to identify developments and trends in voluntary and mandatory financial security for environmental liabilities in the EU with the USA, Canada and Australia as benchmarks. The assessment will cover all 28 EU Member States, reporting trends and developments over the last ten years. On a second stage, problems and concepts how they can be overcome to improve the existing financial liabilities schemes, shall be presented based on the detailed assessments at national and EU level. The speaker concluded by underlining that such a study is not realistic without the collaboration of the ELD stakeholders, the ELD government experts and the European Parliament, and urged for an active involvement of the participants in the accumulation of input.

Responding on questions from the audience, Stevens & Bolton clarified that the scope of the research

would include not just financial security connected to environmental damage in general and the ELD

system specifically but also other types of mandatory liability connected with environmental accidents or

based on other legislation (including waste legislation). This extension of the scope of the research might

have a bearing on the development of the ELD implementation

ELD implementation A member of Justice & Environment presented the work of that organisation in recent years on ELD cases. He explained that the work of the organisation started in 2011 with the comparison of several liability regimes and continued with a systematic analysis of six national ELD regimes and continuous research on the implementation of the ELD. Today the organisation is focusing on information dissemination, raising of awareness and providing legislative advices to governmental bodies. In 2018, four events have been organized in Kijev, Ljubliana, Szeged and Budapest relating to the implementation of the ELD. The main messages included the need for a more complete evidence base, differentiation of ELD cases from other cases of environmental damage and a gradual concentration on fewer cases to ensure an effective implementation of the ELD. The presentation continued with the description of four different incidents that were of interest for the implementation of the ELD that took place in the Hungarian, Slovenian, Czech and Croatian jurisdictions. The questions raised in this section mainly focused on the scope of the ELD and the interconnection between ELD and other liability systems dealing with environmental damages.

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AFTERNOON SESSION

World Café, second session The afternoon session continued with two more rounds of Word Café. The first round was revolving around capacity building and included the following questions: 1. Which are the biggest obstacles for good implementation of the ELD? How should they be best overcome? And 2. Have the two measures with the highest score (1) face to face training and webinar and (2) damage/risk assessment IT tool-been rightly identified as the most important or do you think other measures are more important? The participants of the stakeholder event attributed the difficulties in implementing the ELD to an array of factors such as lack of political will, lack of expertise from the national and local authorities, lack of awareness from the involvement of the operators/industry and of public awareness. They also considered that the existence of multiple public authorities that are sharing competence in enforcing the ELD and the lack of appropriate mechanisms are major setbacks on the enforcement of the ELD. Relating to the solutions that could be provided, the participants considered that the most important step would be the clarification of the content of the ELD and especially of the term ‘significant environmental damage’. Some of them considered that the key is raising of public awareness, including the private sector and intensifying the training of the competent authorities. Some other propositions included stricter reporting obligations for all environmental incidents and stricter enforcement of the ELD by the Commission. In relation to the effectiveness of the tools used for capacity building, face-to face training/webinars were considered extremely important by all the stakeholders and suggestions for the content included: the citing of real ELD cases, the offering of webinar in national language on specific national issues and context and the inclusion of local federations/associations to the training. The risk assessment tools on the other hand were not considered equally useful by all stakeholders, while it was also mentioned that broadening of the risks considered and harmonization of the risk assessment criteria is needed. Finally, it was suggested that the industry should also have access to developed risk assessment tools. Other methods that were considered important included: the regular updating of the ELD website and the creation of a helpdesk for ELD cases. The exchange of risk management and primary/secondary measures of remediations was also considered an important aspect of increasing collaboration among stakeholders. The second round of world café was revolving around the question “Where do I want to see the ELD in 2030?” covered the following questions: 1. Does the ELD live up to its original expectations? If not, why? 2. How can we improve the ELD to make it deliver better to its original objectives? The outcomes of those discussions were summarised by the rapporteurs of each discussion table and were presented to the participants. In general, regarding whether the original expectations on the ELD were fulfilled, the discussion revealed that not all stakeholders shared the same views on what the original expectations of the ELD were. There was a consensus that some degree of harmonization was achieved and that it the introduction of a regulatory framework was a step forward even though there are significant shortcomings in its implementation. On the other hand, some of the stakeholders considered that the implementation process is very slow and that some of the older Member States are still resilient and relying on their pre-existing legislation. Furthermore, it was mentioned that the term “significant environmental damage” has allowed small and medium-size cases to escape the scope of application and has led to an arbitrary

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enforcement of the ELD. Finally, it was mentioned that there was a significant lack of know how even among the regulators on the content of the ELD. On the subject of improving the ELD, the main criticism lied in the lack of effective implementation: Loopholes and lack of concrete obligation of the competent authority to act has led to a lack of initiatives from their part in enforcing the ELD, which consequently did not allow the capacity building needed to address the underlying issues. Lack of an effective evidence base and ambiguity of the Directive’s language were also considered major step backs. The outcomes of those discussions were presented at a later stage and a summary can be found in the World Café summary in Annex I. Sli.do, round 3: The Commission ran the final Sli.do round with questions relating to what were the expectations around the ELD and what might be the future of the ELD. The results can be found to the Sli.do results document attached as Annex II.

Closing note and any other business The European Commission concluded the conference on a brief summary of the results. He noted that all presentations and other documents will be available on the ELD website in the next couple of weeks, with the final country fiches available from April/May 2019.

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Annex I: World Café results - Synthesis

Theme 1: 1. What information and data do I need for implementing the ELD? 2. Do we still need to improve the evidence base further?

1. Better definitions / harmonised understanding

Objective and published definition of significant environmental damage

Better understanding of terminology

Criteria and limits regarding thresholds (significant damage)

Determination of environmental damage in ELD cases or non ELD cases

Determination of preventive measures under ELD

2. Reporting of data/information systems

Consistent and comparable data and examples of ELD and non ELD cases

Common IT database

Pre-existing environmental legislation meeting ELD criteria

Case data sheet to fill in including: incident type, responsible parties, date and what is the

damage

Updated and risk-based information on baseline condition

Who collects information and how is this funded

Info on damage caused by non-occupational activities

Confidentiality of some data

3. Sharing information on costs and techniques

Sharing information on ELD Cases and financial securities

Insolvency and bankruptcy

Public expenses

Remediation costs and techniques

Synopsis of financial security requirements

4. Overview legislation synopsis

Raise awareness through clearer legislation summaries

How the legislation affects stakeholders and operators

How many industries are covered by the ELD

5. Cooperation and communication (mainly between national competent authorities)

Exchange of experience and examples of successes and reasons for failures of implementing

ELD

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Examples of prevention measures

1. Raise awareness of the ELD and financial security amongst operators

possible consequences for environment/financially

real examples of environmental damage

clarity re financial requirements

understanding of mandatory v risk based financial security

tools for risk assessment

best practice including the importance of prevention

Companies need to provide information too

2. Information sharing on financial security instruments between different Member States

information on risk calculation methodologies used

examples of best practice in implementation

a difficult area to implement at EU level

3. Availability of financial security instruments

information on the availability and uptake of financial security is needed

dedicated insurance products that cover the ELD are available in every Member State and

should be equally available to all operators, but are not always available for SMEs everywhere

o SMEs need low cost solutions such as insurance organised by the government or

professional federations

sometimes ELD financial security instruments are only available to Annex 3 operators – broader

cover is needed for incidents

financial provision for historical contamination (?)

potential for special fund financed by operators and available for remediation

o a leftover pool of money should not sit idle, but should be used for public projects

consider the benefits of the co-existence of insurance and bonds

4. Better financial understanding is needed

better information on financial solutions

risk based capacity of the balance sheet

international accounting standards to prevent companies taking advantage of the system to

avoid paying for environmental liabilities

include risk page in the annual report

5. ELD must be rigorously enforced

Theme 2: 1. What in the IMPEL project can I take with me as useful? Is there something missing? 2. What could we do to improve financial security for ELD liabilities of operators?

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1. Obstacles for Good Implementations

Lack of political will to implement the ELD

Lack of expertise from the national (and local) authorities

Lack of awareness/involvement from the operators/industry

Lack of clarity of the Directive

Lack of public awareness

Multiple Authorities sharing competence in enforcement

Lack of appropriate financial mechanisms/ capacity of the insurance sector

2. Proposed solutions

Clarification of terminology

Clarification of the term: significant environmental damage

Widening the scope of the Directive

Raising public awareness/ awareness of private sector

Promoting tools for a safety culture

Investing in training of the competent authorities

Investing in information of the private sector

Imposing stricter reporting obligations on all environmental incidents

Providing for obligatory financial security

Stricter enforcement of the ELD

3. On training (face-to-face or webinar):

Face to face training considered extremely important by multiple groups

More effective if targeted to local federations or associations

Inclusion of real ELD cases

Webinar if offered in national language targeting national issues

4. On risk assessment tools

Considered somewhat important by some groups

Not user friendly

Need for harmonization of the risk assessment criteria

Broadening of the risks considered

Online risk assessment tools for the industry

5. Other measures considered important

Regularly updating the ELD website

Creation of a helpdesk for ELD cases

Increased collaboration between stakeholder groups

Collection of risk management measures implemented

Collection of information on primary and complementary remediation

Theme 3: 1. Which are the biggest obstacles for good implementation of the ELD? How should they

be best overcome? 2. Have the two measures with the highest score (1) face to face training and webinar and

(2) damage/risk assessment IT tool-been rightly identified as the most important or do you think other measures are more important?

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Theme 4: Where do I want to see the ELD in 2030? 1. Does the ELD live up to its original expectations? If not, why? 2. How can we improve the ELD to make it deliver better to its original objectives?

Rapporteur 1

In the group, there was a significant discussion over what was the objective and what was the

expectations of the ELD (opinions varied according to each stakeholder’s point of view)

1. Objectives have been achieved because the ELD is in force and there is a relevant framework.

The expectations though have not been fully fulfilled. The progress on the evidence base

gathering tools and clarification of definitions (significance and negative impact) – has been very

slow, although improvement has been achieved over the last years.

2. It is not clear what legislation prevails if the ELD or other legislation that is applicable

simultaneously.

Rapporteur 2

In this group as well, there was a significant discussion over what were the expectations of the ELD.

1. In general, it seems that the ELD brought some sense of harmonization in the environmental

legislation of old Member States and new Member States. Especially in newer Member States it

has triggered significant improvement, which is not the case with older Member States– where

there is a tendency to rely on pre-existing legislation.

2. There was some agreement that the Competent Authorities are not sufficiently empowered to

do what is expected of them. There was a clear consensus that the process of improvement has

been stalling in information gathering and not moving to enforcement through potential

sanctions and/or fines.

Rapporteur 3

This group opted to highlight issues that have not been raised by the previous groups.

1. The group was aware of many cases where the ELD was not applied even though it should have

been due to the threshold. The term ‘significant environmental damage’ has allowed small and

medium-size cases to escape the scope of application and has led to an arbitrary enforcement of

the ELD.

2. Loopholes and lack of concrete obligation of the competent authority to act has led to a lack of

initiative from their part in enforcing the ELD, which consequently did not allow the capacity

building needed to address the underlying issues.

Rapporteur 4

This group opted to highlight issues that have not been raised by the previous groups.

1. ELD created a framework which should be considered a positive development.

2. Issues connected to implementation have to be addressed. A major priority is the improvement

of the evidence base, that would allow more effective enforcement. The EU should be able to

sanction the Member States for non-implementation.

3. It was also discussed that the scope could be clarified since the definitions as applied today are

too broad.

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Rapporteur 5

This group opted to highlight issues that have not been raised by the previous groups.

1. The original expectations were not met because the ELD was not completely implemented.

2. It would be interesting to link the ELD to climate change. If it is possible to raise the awareness

of companies to climate change and demonstrate the causal link between the climate change

and ELD incidents.

Rapporteur 6

This group opted to highlight issues that have not been raised by the previous groups.

1. Relating to the original expectations, this group looked back to the White Paper on civil liability

for environmental damage and tried to evaluate it. The group concluded that the ELD was

transposed and implemented in different ways by Member States and did not achieve

harmonization. It was mentioned that some regulators don’t even know about the existence of

the ELD or sufficiently understand its context.

Rapporteur 7

This group opted to highlight issues that have not been raised by the previous groups.

1. It seems that there is a difference of expectations between EU, Member States and local

administration relating to the goals of the ELD and that is affecting implementation. It needs

clarification.

2. The challenge to be achieved is improving the enforcement of the ELD in a more harmonised

way.

3. A further comment from this group included the noticeable absence of the operators in the

stakeholder event. The question is why the operators are not engaged and whether that means

that to them the work of the regulators is inconsequential.

Rapporteur 8

This group opted to highlight issues that have not been raised by the previous groups.

1. Regarding the expectations of the ELD, there was a raise of public awareness relating to

environmental liability, and further information dissemination among operators.

2. Unfortunately, the ELD is still dependent on old enforcement systems. Administrative

enforcement is much more efficient but lacks the prestige of civil enforcement. In addition, the

polluter pays principle fails because externalities are not easy to internalise.

Furthermore, the scope of application of the Directive is somewhat limited, since not all areas

are under environmental protection fall under the ELD remit.

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Annex II: Sli.do results

Question 2

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Question 3

Question 4

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Question 5

Question 6

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Question 7

Question 8

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Question 9