The Council presidency and European Parliament negotiators just recently reached a provisional agreement on a proposed EU law that would improve the investigation and prosecution of environmental crime offences.
The new directive aims to establish minimum rules on the definition of criminal offences and sanctions in order to better protect the environment, replacing the previous 2008 directive, which has become obsolete in the face of developments in EU environmental law.
The directive defines environmental crime more precisely and adds new types of environmental criminal offences. It also harmonizes the level of penalties for natural persons and, for the first time, for legal persons across all EU member states.
The problem lies in the detail: What is an environmental crime, where do we have to draw the line? As professionals, we see expansion of criminal liability. Entrepreneurs use the environment to make money. Economies need entrepreneurs. Sometimes, the EU seems to forget this fact.
More offences…
The Council and European Parliament agreed to increase the number of offences that currently exist under EU criminal law from nine to 18. This broadens and clarifies the type of conduct that is prohibited because it harms the environment. The new offences include timber trafficking, which is a major cause of deforestation in some parts of the world, the illegal recycling of polluting components of ships and serious breaches of legislation on chemicals.
Taiwanese and Asian entrepreneurs active in the EU must know: The standard of environmental protection is much higher in Europe than in most Asian countries. What is totally permitted in Taiwan, for instance, could be strictly forbidden in Europe – if committed, you could go to jail for this.
The Council and European Parliament also agreed on a ‘qualified offence’ clause. Offences referred to in the directive, and which are committed intentionally, are considered a qualified offence if they cause destruction; irreversible, widespread and substantial damage; or long-lasting, widespread and substantial damage to an ecosystem of considerable size or environmental value, or to a natural habitat within a protected site, or to the quality of air, soil or water.
These requirements are fulfilled easily, as you may imagine. This is why there is only one secure defense: If your company is using the environment in Western Europe no matter how insignificant it may seem, seek for legal counsel and let your lawyer examine whether your activities are deemed to be legal in Europe, too.
… and stricter penalties
In the case of natural persons who commit one of the offences covered by the directive, the text sets out the following penalties:
- for intentional offences causing death to any person, a maximum prison term of at least ten years
- for the qualified offence causing catastrophic results, a maximum prison term of at least eight years
- for offences committed with at least serious negligence causing death to any person, a maximum prison term of at least five years
- for other intentional offences included in the legislation, a maximum prison term of either at least five years or at least three years
You need to understand the severity of this punishment: In Germany, if you kill somebody (manslaughter), you often only got to jail for around 8 years. The new penalties for environmental crimes come quite close to that. Seen from the perspective of a practitioner/European lawyer, this seems to be completely exaggerated. This is certainly due to the current political situation in Europe.
Everything seems to be subordinated to environmental protection, all measure and attention has been lost.
The EU accepts that domestic companies suffer major competitive disadvantages just to assume a supposed pioneering role in environmental protection.
In the case of legal persons, the law sets out the following penalties:
- for the most serious offences, a maximum fine of at least 5% of the legal person’s total worldwide turnover, or alternatively €40 million
- for all other offences, a maximum fine of at least 3% of the legal person’s total worldwide turnover, or alternatively €24 million
Additional measures may also be taken, including obliging the offender to reinstate the environment or compensate for the damage, excluding them from access to public funding or withdrawing their permits or authorizations.
This is also very unique: In Germany, for instance, legal persons cannot be criminal liable – only natural persons can. Nevertheless, in the context of environmental protection, legal entities can held accountable directly. It seems that legal concepts do not apply anymore if the means is thought to protect the environment.
Taiwanese entrepreneurs active in Europe must be aware of this strange situation.
All of their entrepreneurial activities should be justifiable under environmental protection principles. Especially corporate groups from Asia need to realize that European authorities have to penalize somebody – otherwise, it would be proof of the EU´s incompetence to some degree, if nobody gets into trouble.
Of course, European authorities prefer to put penalties on Asian companies than on their EU corporate groups or those in North America.
Training and resources – Background
In addition, member states will have to ensure that training is provided for those working to detect, investigate and prosecute environmental crime, such as judges, prosecutors and police authorities. EU countries will also need to make sure that these authorities have adequate resources – for instance in terms of the number of qualified staff and the financial resources to carry out their functions under the directive. The directive also contains provisions on support and assistance to persons reporting environmental crime, environmental defenders and persons affected by these crimes.
Environmental crime is one of the world’s most profitable organized criminal activities and has a major impact not only on the environment but also on human health. It is highly lucrative, but it is hard to detect, prosecute and punish. This is the same situation all over the world, in the East as well as the West.
Sanctioning environmental harm
Breaches of environmental obligations such as illegal trade and handling of chemicals or mercury or illegal ship recycling will have to be treated as criminal offences in all EU Member States.
Similar types and levels of sanctions for natural and legal persons will apply across the EU, which will help ensure a more consistent application and enhance their deterrent effect. For example, the illegal collection, transport and treatment of waste or the placing on the market of illegally harvested timber or of timber products made of illegally harvested wood will be punishable by a maximum term of imprisonment of at least five years in Member States. For the liberal penal systems in Europe, this is a heavy penalty. The maximum fines for companies committing such criminal offences should not be less than 5% of the total worldwide turnover of the legal person or an amount corresponding to € 40 million.
Causing particularly serious damage to the environment will have to be treated as an aggravated offence, with higher sanctions. In addition, specific aggravating circumstances and accessory sanctions and measures (in additional to financial penalties) to allow for a tailored response to specific crimes must be considered by national legislators. Persons who report environmental offences and cooperate with the enforcement authorities will benefit from supporting measures in the context of the criminal proceedings.
Detecting and sanctioning actual crimes requires an effective chain of actions involving law enforcement agencies, prosecutors and courts. To help enforcement work in practice, national authorities will be charged with developing a strategic approach to ensure strong response to criminal behavior. Practitioners working on the ground, including inspectors, police officers, prosecutors and judges, will benefit from sufficient resources and appropriate training as well as effective tools for enforcement, coordination, cooperation and data collection.
Given that environmental crime is a complex global phenomenon which requires efforts of different authorities and often has cross-border effects, the new directive will facilitate cooperation and coordination of authorities in the EU and internationally.
This is why we will see more cooperation between Asian and European authorities in future. Taiwanese companies have to be aware of current developments in this field in order to not get “thrown under the bus”.
Global consequences
There has been a growing gap between the criminal justice response to environmental crime and the criminological situation on the ground. Despite the existing Directive, the number of cross-border investigations and convictions in the EU for environmental crime has not grown substantially. In contrast, environmental crime is growing at annual rates of 5% to 7% globally, creating lasting damage for habitats, species, people’s health, and the revenues of governments and businesses. According to UNEP and Interpol estimates, published in June 2016, the annual loss caused by environmental crime is between $ 91 billion and $ 258 billion.
Sanctioning environmental harm
Breaches of environmental obligations such as illegal trade and handling of chemicals or mercury, illegal ship recycling will have to be treated as criminal offences in all EU Member States, now.
Similar types and levels of sanctions for natural and legal persons will apply across the EU, which will help ensure a more consistent application and enhance their deterrent effect. For example, the illegal collection, transport and treatment of waste or the placing on the market of illegally harvested timber or of timber products made of illegally harvested wood will be punishable by a maximum term of imprisonment of at least five years in Member States. The maximum fines for companies committing such criminal offences should not be less than 5% of the total worldwide turnover of the legal person or an amount corresponding to € 40 million.
Causing particularly serious damage to the environment will have to be treated as an aggravated offence, with higher sanctions. In addition, specific aggravating circumstances and accessory sanctions and measures (in additional to financial penalties) to allow for a tailored response to specific crimes must be considered by national legislators. Persons who report environmental offences and cooperate with the enforcement authorities will benefit from supporting measures in the context of the criminal proceedings.
Detecting and sanctioning actual crimes requires an effective chain of actions involving law enforcement agencies, prosecutors and courts. To help enforcement work in practice, national authorities will be charged with developing a strategic approach to ensure strong response to criminal behavior. Practitioners working on the ground, including inspectors, police officers, prosecutors and judges, will benefit from sufficient resources and appropriate trainingas well as effective tools for enforcement, coordination, cooperation and data collection.
Given that environmental crime is a complex global phenomenon which requires efforts of different authorities and often has cross-border effects, the new directive will facilitate cooperation and coordination of authorities in the EU and internationally.
Final result
Is this concrete provisional agreement of any importance? No, not really. More important is that Asian and Taiwanese companies understand that the EU is on a crusade for the protection of the environment. Even harsh disadvantages are taken into account by the EU as long es this serves the environment.
This development seems to be ridiculous to some extent. A global protection of the environment is only possible if the major governments all over the world cooperate. But this is not our reality.
Taiwanese corporate groups need to know that they will have to install systems in their compliance management system that exclusively deal with regulations protecting the environment if they do not want to face the fact that they could be prosecuted for negligence in regard to protection of the environment.
