Th e Treatment of Environmental Damage in Regulation Rome II

Michael Bogdan

A. Introduction

Th e main confl ict-or-laws rule in the EC Regulation No. 864/2007 of 11 July 2007 on the Law Applicable to Non-Contractual Obligations (Rome II)1 is found in its Article 4(1), providing that the law applicable to a non-contractual obliga- tion arising out of a tort is the law of the country in which the damage occurs (the lex loci damni), irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur. Th is main rule is subject to various exceptions, for example regarding situations where both the person claimed to be liable and the person sustaining damage have their habitual residence in the same country when the damage occurs (Article 4(2)), or where the tort is manifestly more closely connected with another country (Article 4(3)). Pursuant to Article 14, the parties may, within certain limits, also agree to submit non-contractual obligations to the law of their choice. Some Articles introduce special confl ict rules for certain particular types of torts, where the general rule was not deemed to allow a reasonable balance to be struck between the interests at stake.2 One such specifi c confl ict rule is found in Article 7, under the heading “Environmental Damage”:3

1 OJ 2007 L 199/40. 2 See recital 19. 3 For the preparatory versions of Article 7, see Article 7 of the original proposal of the Commission in COM(2003)427 fi nal, and Article 8 in the subsequent, amended proposal COM(2006)83 fi nal. So far there is very little legal writing about Article 7, but see M. Bogdan, ‘Behandling av miljöskador i EG:s Rom II-förordning’ Juridisk Tidskrift vid Stockholms Universitet (2007–08) 575. T. Kadner Graziano, ‘Th e Law Applicable to Cross-Border Damage to the Environment. A Commentary on Article 7 of the Rome II Regulation’ is advertised to appear in (2007) 9 YbPIL 71. 220 Michael Bogdan

Th e law applicable to a non-contractual obligation arising out of environmental damage or damage sustained by persons or property as a result of such damage shall be the law determined pursuant to Article 4(1), unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred. Pursuant to Article 3 of the Regulation, its confl ict rules, including Article 7, have universal application in the sense that they apply whether or not they designate the law of a Member State. Even though there are some international instruments harmonizing substan- tive national rules on environmental liability,4 the existing important diff erences between national provisions, together with the fact that environmental damage does not respect national borders, make the issue of applicable law particularly important. Recital 25 of the Regulation refers to Article 174 of the EC Treaty, which provides that there should be a high level of protection of the environ- ment based on the precautionary principle, the principle that preventive action should be taken, the principle of priority for corrective action at source and the principle that the polluter pays. Pursuant to Recital 25, this fully justifi es the use of the principle of discriminating in favour of the person sustaining the damage by giving that person the right to choose between the law determined by Article 4(1) and the law of the country in which the event giving rise to the damage occurred (normally the country where the person claimed to be liable committed the harmful act or omission causing the damage). Th is solution, based on the unilateral choice of law by the claimant, appears to be intended to make it diffi cult for the juridical or natural person claimed to be liable to avoid or limit his liability by either directing the harmful eff ects of his activities to, or carrying out such activities in, a country with non-existing or polluter-friendly civil liability rules on environmental damage. Th is alternative (or rather elective)

4 See the overview and references in C. von Bar, ‘Environmental Damage in Private International Law’ (1997) 268 RCADI 291, 318–324; F. Munari & L. Schiano di Pepe, ‘Liability for Envi- ronmental Torts in Europe: Choice of Forum, Choice of Law and the Case for Pursuing Eff ec- tive Legal Uniformity’ in A. Malatesta (ed) Th e Unifi cation of Choice of Law Rules on Torts and Other Non-Contractual Obligations in Europe 2006, 173, in particular 175–179. It must also be recalled that in accordance with Article 28, the Regulation does not prejudice the application of international conventions to which one or more Member States were parties at the time when the Regulation was adopted (unless the convention applied exclusively between two or more of the Member States). For example, Article 3 para 2 of the Convention on the Protection of the Environment between Denmark, Finland, Norway and Sweden of 19 February 1974 provides that the question of compensation for damage caused by environmentally harmful activities in another Contracting State must not be judged by rules which are less favourable to the injured party than the rules of compensation of the state in which those activities were carried out: see (1974) 13 ILM 592.