E.J. Hollo

WATER AND OCEAN LAWUTRECHT 1 NOVEMBER 2013Compensation in Finnish Law

Professor Erkki HolloUniversity of Helsinkierkki.hollo@helsinki.fi

E.J. Hollo

What is ”compensation”?

Who are the liable actors?

Who are the beneficiaries?

How is compensation performed?

What are the limits of liability?

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WHAT IS COMPENSATION? A substitute for losses

”Loss” is defined as a monetary, ecological or social disadvantage or harm

A loss may be absolute (economic, social) or relative (protected sites)

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MAIN GOALS OF COMPENSATION Maintenance of a status (without negligence)

EU Directives (Habitat, WPFD, MSD) Reparation of a damage

Monetary to victims (ev. restoration costs) Reparation costs (causation) to authrorities Compensatory fees

Social or economic/ecological → aid (fishery and farming losses)

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MAIN LEGAL SOURCES Nature Conservation Act 1996 Act on Reinstatement of Damage to Nature

2009 (Dir 35/2004) Water Resources Management Act 2004 Environmental Protection Act 2000 Marine Env. Protection Act 2009 Water Act 2011 Act on Flood Risk Management 2010 Act on Dam Safety 2010 Act on Environmental Protection in Maritime

Transport 2009

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GENERAL FEATURES Waters are private property (open sea state

property) Specialized env. authorities for permit and

conservation issues Conservation decisions (NCA) are binding for

planning and env. and resources law Compensation issues are dealt with in regular

administrative contexts – the Act on (Civil) Env. Liability 1994 section 6!

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NATURE CONSERVATION ACT SEC. 3

This Act transposes into Finnish law Council Directive (92/43/EEC) on the conservation of natural habitats and of wild fauna and flora, hereinafter the Habitats Directive, and Council Directive (79/409/EEC) on the conservation of wild birds, hereinafter the Birds Directive, as applicable to species of flora and fauna other than those specified in section 5 of the Hunting Act (615/93), and the Directive of the European Parliament and of the Council (2004/35/EC) on environmental liability with regard to the prevention and remedying of environmental damage, hereinafter the Environmental Liability Directive, unless its transposition is otherwise provided for in other legislation.

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NCA Section 5 Favourable conservation status In order to achieve the aims described in

section 1, nature conservation shall focus on attaining and maintaining the favourable conservation status of natural habitats and of wild fauna and flora. …

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ENV LIABILITY ACT (DIR 35/2004/EC)

applies to remediation of the following types of damage caused to the environment:

1) damage to protected species and natural habitats referred to in section 5 a of the Nature Conservation Act;

2) considerable pollution of a water body referred to in section 84 a of the Environmental Protection Act (soil and groundwater restoration); and

3) substantially harmful change in the water bodies or groundwater referred to in chapter 14, section 6, of the Water Act

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CONT… Remediation is /procedurally and substantially/ regulated under the Nature Conservation Act,

Environmental Protection Act, Water Act and Gene Technology Act

The terminology follows the Directive

E.J. HolloREMEDIAL MEASURES (S. 5)

(1) Natural resources and natural resource services must be restored to the baseline condition by eliminating the harmful change caused by the damage (primary remediation).

(2) If the baseline condition cannot be fully restored, the impairment the damage has caused to the natural resource and natural resource service should be remedied by measures undertaken at the damaged site or elsewhere (complementary remediation).

(3) The interim loss of a natural resource or natural resource service shall be compensated for by taking measures at the damaged site or elsewhere until primary and complementary remediation have taken full effect (compensatory remediation).

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CONT… Selection of remedial measures (1) The authority shall take the following into

account when considering the measures to be undertaken:

1) the nature, scope and severity of the damage;

2) the possibility for natural restoration; 3) risks posed to human health; 4) expenses incurred in remedying the

damage; 5) other damages that may have occurred in

the area.

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ENDING REMEDIATION (S. 8) (1) The authority can decide, by means of the

procedure concerning the determination of remedial measures as provided in an act mentioned in section 2(1), to end remediation, if:

1) the remedial measures implemented guarantee that the risk to human health and natural resources has been eliminated; and

2) the costs of continuing remediation would be disproportionate compared to the environmental benefits gained.

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LIABILITY (1) The operator who caused the damage shall

be liable for any costs: 1) arising from the remedial measures …; and 2) that the authority incurs in assessing the

damage and the immediate threat posed by it, and in deciding upon remedial measures and supervising them.

(2) If the damage was caused by more than one activity, the responsibility for the costs referred to in

subsection 1 shall be allocated among the operators according to their share of the total damage. If this share cannot be assessed, the responsibility shall be divided per capita.

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FURTHER MEASURES Making costs equitable (s. 12) Right of the authority to undertake

measures (s. 9) Appeal follows the sectoral act Detailed provisions by Decree 713/2009

E.J. HolloNCA SECTION 5 A (29.5.2009/384) DAMAGE TO PROTECTED SPECIES AND NATURAL HABITATS Damage to protected species and natural habitats

refers to a significant, measurable, direct or indirect adverse effect on reaching or maintaining a favourable conservation status:

1) with respect to the ecological values of the areas selected for inclusion in the Natura 2000 network referred to in Chapter 10;

2) with respect to the species referred to in Article 4(2) of the Birds Directive and the species listed in Annex I of the Directive, as well as the species listed in Annex II of the Habitats Directive;

3) with respect to the sites providing habitats for species referred to in subparagraph 2 that are protected against deterioration and destruction in accordance with section 47 of this Act; and

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… 4) with respect to the species listed in Annex IV of the

Habitats Directive or the breeding sites and resting places of individual animal species referred to in Annex IV(a) of the Directive.

However, an adverse effect for which a derogation has been granted in accordance with section 48, paragraph 2, section 49, paragraph 3, or section 66, will not be regarded as damage to protected species and natural habitats.

The significance of the adverse effect shall be assessed in relation to the conservation status of the natural habitat or species in question at the time of the damage and to the services they provide and their natural ability to recover. Further provisions on factors determining the significance of the adverse effect shall be given by government decree.

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SIDE-EFFECT Section 53 Duty of the State to pay compensation If the property owner or holder of special rights

incurs significant inconvenience due to a /conservation measure/ …. he is entitled to full compensation from the State.

The State is not required to pay compensation until the owner has applied for a derogation under the provisions of …section 31 or section 48, paragraph 2, or section 49, paragraph 3, and said application has been denied. If it is manifestly impracticable to grant any derogation, no further special application is needed in order to institute compensation proceedings. (553/2004)

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…. …The right to compensation does not apply,

however, if the inconvenience is caused: 1) by refusal of an application …referred to

in the Water Act; 2) by refusal to grant a permit referred to in

the Environmental Protection Act;

THIS INDICATES that compensation is not given in cases where damage to nature (or waterm soil) is ground for refusal of a permit or a plan.

E.J. HolloCOMPENSATORY MEASURES IN PERMIT CASES The prevention principle entitles auhtorities

to prescribe measures aimed at the prevention or restoration of damage (of any kind)

E.g. Water Act 3:10: A permit shall include prescriptions needed

to minimise damage and support restoration. These prescriptions shall be enacted as along as the costs are reasonable and technically feasible.

There is no general ruling on the obligation to pay compensation for losses to public interests, only private economic losses. Exception; fishery fee. NCA applies.

E.J. HolloSOIL AND GROUNDWATER PROTECTION EPA provides for prohibitions to pollute

A) soil B) groundwater C) marine waters

These prohibitions are absolute: no permit is granted

In case of illegal or de facto pollution A) coercive measures may be taken (including

reparation costs) B) explicit provisions on liability for purification or

restoration apply: the polluter/the landowner is liable for compensatory measures and eventually for costs to authorities.

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COERCIVE MEASURES /REPARATION (NCA S. 57)

Should anyone fail to observe the provisions and regulations laid down in or by virtue of this Act, or embark upon action contrary to them, the centre for economic development, transport and the environment can forbid that person from continuing or repeating the offence or instance of negligence and require that he correct the unlawful situation or redress his negligence under threat of penalty payment or suspension, or issue threat of having the necessary measures taken at his expense.

E.J. HolloPREVENTION AND REMEDIATION OF DAMAGE TO PROTECTED SPECIES AND NATURAL HABITATS (NCA 57A (RELATES TO DIR 35/2004/EC)

If a natural or legal person who operates an occupational activity or who de facto controls said activity (operator) deliberately or through negligence causes damage, or imminence of damage, to protected species and natural habitats through action contrary to the provisions and regulations laid down in or by virtue of this Act or by failure to observe said provisions and regulations, the operator shall notify the centre for economic development, transport and the environment of the damage or the imminent threat thereof without delay and take the necessary measures to prevent or minimise any adverse effects.

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NATURA 2000 SITES (NCA SS. 64-69) No specific or additional provisions on

compensation or reparation are enacted. Act 383/2009 on env. liability applies, also the NCA.

Assessment /need of prevention is estimated as usual in permit cases (EPA, WA, also GenetechnAct)

E.J. HolloCONT…/ALSO: PENALTY AND FORFEITURE Once notified of damage to protected species and natural habitats or the imminent

threat thereof, the centre for economic development, transport and the environment shall, …require that the operator who has caused the damage take measures to prevent any adverse effects or limit them to the minimum and, if necessary, require that the operator take remedial measures referred to in the Act on the Remediation of Certain Environmental Damages (383/2009). The centre for economic development, transport and the environment may intensify the effect of an order that it has issued by conditional imposition of a penalty payment, by having the omission corrected at the expense of the defaulting party, or by suspending operations.

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SIMILAR PROVISIONS… Also the Environmental Protection Act, the

Water Act, the Nature Conservation Act and the Gene Technology Act:

provisions on how, in accordance with the Environmental Liability Act, orders may be issued to remedy significant environmental damage caused by activities falling within the scope of application of these acts.

Regular provisions on administrative enforcement (coercive measures) apply

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CONCLUSIONS Compensation issues are dealt with in

administrative procedures There are no precise guidelines for

measurement of damage or compensation There are rules for the assessment of

impacts and for the choice of alternative measures

Legal practice on guidelines does not exist so far

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THANK YOU FOR YOUR ATTENTION!