Corporate Social Responsibility (IVOR nr. 77) 2010/13.3.2.3:13.3.2.3 Regulatory offsets

Corporate Social Responsibility (IVOR nr. 77) 2010/13.3.2.3

13.3.2.3 Regulatory offsets

Documentgegevens:

Mr. T.E. Lambooy, datum 17-11-2010

Datum: 17-11-2010
Auteur: Mr. T.E. Lambooy
JCDI: JCDI:ADS371839:1
Vakgebied(en): Ondernemingsrecht (V)

Regulatory biodiversity offsets can only be realised by legislation. In the US this was done through the Clean Water Act and the Endangered Species Act. In the EU, biodiversity offsets are regulated by the Habitats Directive (92/43/ EEC)1 and the Environmental Liability Directive (2004/35/EC).2 The Habitats Directive applies before damage has occurred. According to article 6.4, a Member State may only proceed with the development of a plan or project that has negative ecological implications for a site if there is an overriding public interest to do so and if it takes compensatory measures. Such measures are independent of the project (including any associated mitigation measures). They are intended to offset the negative effects of the plan or project so that the overall ecological coherence of the Natura 2000 Network is maintained. The Environmental Liability Directive, in contrast to the Habitats Directive, applies after the damage has occurred. This Directive is based on the 'polluter pays' principle. The goal is to hold the polluter, who caused environmental damage, responsible. The Directive regulates prevention and remedies for damage caused to animals, plants, natural habitats, water resources and land.

The measures introduced by these EU Directives serve as an incentive for businesses not to pollute or destroy nature. Moreover, this type of legislation stimulates new developments in the insurance market: through the application of a differentiated premium system, a stimulus to minimise ecological risks is created. Furthermore, the legislation indirectly encourages the development of voluntary markets for biodiversity offsets and wetland or habitat banking, which will be discussed next.3

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Council Directive 92/43/EEC on the Conservation of natural habitats and of wild fauna and flora, Official Journal L 206, 22/07/1992, p. 0007-0050. Article 6.4 reads: 'If, in spite of a negative assessment of the implications for the site and in the absence of alternative solutions, a plan or project must nevertheless be carried out for imperative reasons of overriding public interest, including those of a social or economic nature, the Member State shall take all compensatory measures necessary to ensure that the overall coherence of Natura 2000 is protected. It shall inform the Commission of the compensatory measures adopted. Where the site concerned hosts a priority natural habitat type and/or a priority species, the only considerations which may be raised are those relating to human health or public safety, to beneficial consequences of primary importance for the environment or, further to an opinion from the Commission, to other imperative reasons of overriding public interest' [emphasis added]. See also: the EU Guidance Document on article 6(4), January 2007, at: http://ec.europa.eu/environment/nature/natura2000/management/guidance_en.htm#art6, accessed on 8 November 2009.

Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage.

I. Brauer, R. Mussner, F. Oosterhuis, 'The Use of Market Incentives to Preserve Biodiversity', Final Project under the Framework contract for economic analysis, ENV.G.1/FRA/2004/0081.