Huge Fines on Greece and Italy demonstrate the Risk of Non-compliance with EU Environmental Law

On 2nd of December 2014, the Court of Justice of the European Union issued landmark judgments relating to two Member States’ non-compliance with EU waste law. Multi-million euro fines were levied on Greece (Case C-378/13) and Italy (Case C-196/13) for continued non-compliance with the Directives on Waste, Hazardous Waste and Landfill.

In its judgment against Greece, a one-off fine of €10 million was imposed, with the Court also ordering that a further €14.52 million should be paid for every six months non-compliance continues. The separate judgment against Italy mandated a lump sum fine of €40 million, in addition to recurring six-monthly penalty payments of €42.8 million that continue until compliance has been achieved. The six-monthly penalties affecting both countries reduce progressively as each non-compliant waste site is closed or otherwise rectified.

These judgements are the culmination of a long-term investigation by the European Commission, with the fines reflecting the Court of Justice’s view that little progress had been made by either country in complying with earlier judgments relating to their unauthorised waste sites.

In the case of Greece, the Court found in 2005 (Case C-502/03) that 1,125 uncontrolled waste disposal sites were in operation. Over the period from 2009 to 2010, the European Commission raised concerns with the Greek government about continued non-compliance, eventually initiating legal action in 2013. By May 2014, 293 non-compliant landfills continued to exist, 70 of which remained operational and 223, although closed, had not been cleaned-up.

A similar finding was made against Italy in 2007 (Case C-135/05) and, by 2013, the Commission had evidence that 218 sites across 18 of the 20 Italian regions remained on-compliant with the Directive on Waste. 16 of these contained hazardous waste, while five had not been closed in accordance with the Landfill Directive. By 2014, the overall total had dropped to 198 sites, with 14 non-compliant with the Hazardous Waste Directive and two breaching the Landfill Directive.

In both cases, the Court of Justice found that financial penalties were the most appropriate financial means of stimulating full compliance.  In determining the amount, the Court had regard to seriousness of the infringements, including the likelihood of human health impacts, the duration of non-compliance and each country’s capacity to pay. In order to further incentivise clean-up, six-monthly compliance assessments are to be done, with any additional fine being reduced progressively as each site is closed and restored.

Besides the €10 million one-off fine, Greece’s six-month penalty payment is capped at €14.52 million. A sum of €40,000 is then to be deducted from it for each landfill site that is either closed down or cleaned up, with this figure increasing to €80,000 for any site that is both closed and fully restored.

For Italy, the penalties are significantly greater, with the lump sum payment of €40 million being substantiated by an on-going six monthly fine not exceeding €42.8 million. From that amount, €400,000 is to be deducted as each hazardous waste site becomes compliant, with a €200,000 reduction for any other type of waste site brought into conformity with EU law.

Just in case these judgments are considered by readers to constitute a “Mediterranean State” issue and of little relevance to Ireland, it should be recalled that Ireland has also been brought before the Court of Justice in relation to significant non-compliance with the Directive on Waste. The Court found in 2005 (Case C-494/01) that there had been a “general and persistent” failure by Irish regulatory bodies in ensuring compliance with a number of the key provisions of that Directive.

ECJ Programme of Measures DOE 30 May 2014 VersionFollowing the 2005 judgment against Ireland, and unlike Italy and Greece, the Department of the Environment woke up to the issue and set out to rectify the various problems in how waste regulation was being conducted. How far this process has got can be determined from an interesting report that is held, and appears to be being periodically updated, on the Department of the Environment’s website.

Finally, and notwithstanding the content of the progress report published by the Department of the Environment, it should be pointed out that the fines set down by the Court of Justice on Italy and Greece show what might happen if there is any evidence of any further systemic failure of waste regulation in Ireland. They dwarf the penalty Ireland was subject to for its persistent flouting of EU law relating to discharges from septic tanks (Cases C-188/08 and C-347/11), where Ireland was fined €2 million, with a €12,000 per day penalty for continued non-compliance.  In this respect, the Greece and Italy judgments should serve as a salutary reminder to national government of the need to resource adequately both local authority and EPA waste enforcement.

Postscript: on 4th December 2014, Sweden was fined €2 million for persistent non-compliance with the IPPC Directive. Penalty payments of €4,000 per day were also imposed for every day non-compliant installations continued in operation after the date of the judgment: see ECJ Case C-243/13.

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