Environmental liability is an application of the "polluter pays" principle outlined in the Treaty establishing the European Community. Arrangements for applying it are set out in Directive 2004/35/EC.
It applies to environmental damage and the risk of damage resulting from commercial activities, once it is possible to establish a causal link between the damage and the activity in question. Environmental damage is defined as direct or indirect damage caused to the aquatic environment, flora and fauna and natural habitats protected by the Natura 2000 network, as well as direct or indirect contamination of the soil which could lead to a serious risk to human health.
Two systems of liability have been created: a system with no fault to be proved and a system where evidence of a fault or negligence must be presented. The former applies to dangerous or potentially dangerous commercial activities listed in the Community legislation. In this case, the operator may be held liable even if he has committed no fault. The second system applies to all other commercial activities where species and natural habitats protected under Community law have been damaged or are at imminent risk of damage. In this case, the operator will not be liable unless he has committed a fault or has been negligent.