The Court of Justce handed down an important judgment today in Case C-188/07 Commune de Mesquer v. Total France SA and Total International Ltd. on whether oil accidentally spilled at sea following a shipwreck is "waste" for the purposes of Directive 75/442/EEC on waste.
The Court held that it was indeed "waste". Consequently, the holder of the waste is liable for the cost of disposing of it.
What happened was this. ENEL, an Italian company, contracted with Total International Ltd for the supply of heavy fuel oil from Dunkirk (France) to Milazzo (Italy). To carry out the contract, Total raffinage distribution, now Total France SA, sold the heavy fuel oil to Total International Ltd, which chartered the oil tanker Erika, flying the Maltese flag. On December 12th 1999 the Erika sank off the coast of Brittany in France, spilling part of her cargo and oil into the sea and causing pollution of the Atlantic coastline of France.
The town of Mesquer sued the companies in the Total group for reimbursement of the cost of cleaning and anti-pollution operations on its coastal territory, relying on Directive 75/442/EEC. The town claimed that the oil accidentally spilled at sea was "waste" as defined by Directive 75/442/EEC, such that Total International Ltd and Total France should be liable for the cost of disposal, in their capacity as ‘previous holders’ or ‘producer of the product from which the waste came’ respectively. The case went up to the French supreme court, the Cour de Cassation which referred the matter to the Court of Justice.
Three main questions arose.
The first main issue was whether oil accidentally spilled at sea following a shipwreck is "waste". (In fact that was the second question addressed in the judgment).
The Court of Justice answered in the affirmative. It held that oil spilled in connection with a shipwreck, mixed with water and sediment and drifting along the coastline of a member State until being washed up on shore, must be be classified as "waste" within the meaning of Directive 75/442/EEC because it was a substance which its holder did not intend to produce and which he discards, albeit involuntarily, during transport.
The Court recalled that Annex I to Directive 75/442 provides lists of substances and objects that may be classified as waste. However, the lists are only intended as guidance, and the classification of waste is to be inferred primarily from the holder’s actions and the meaning of the term ‘discard’ (see Case C‑1/03 Van de Walle and Others, paragraph 42). The fact that Annex I to Directive 75/442, entitled ‘Categories of waste’, refers in point Q4 to ‘Materials spilled, lost or having undergone other mishap, including any materials, equipment, etc., contaminated as a result of the mishap’ thus merely indicates that such materials may fall within the scope of waste. That in itself is insufficient to classify as waste hydrocarbons accidentally spilled at sea and cause pollution of the territorial waters and then the coastline of a Member State (see, Van de Walle, paragraph 43). It is necessary to determine whether such an accidental spillage of hydrocarbons is an act by which the holder discards them within the meaning of Article 1(a) of Directive 75/442. And the Court held that it was in this case. It had already held that oil that is accidentally spilled and causes soil and groundwater contamination is not a product which can be reused without prior processing (see Van der Walle, paragraph 47). It held that the same conclusion must be reached in the case of hydrocarbons which are accidentally spilled at sea and cause pollution of the territorial waters and then the coastline of a Member State.
The second issue was whether the hydrocarbons being transported, prior to the spillage, were "waste". The Court held that they were not "waste" (that point was raised in the first question dealt with by the Court).
The Court held that during transport, before spillage, the oil in question was not waste.
It recalled that the meaning of the term ‘waste’ depends on the meaning of the term ‘discard’ (Case C‑129/96 Inter-Environnement Wallonie, paragraph 26). Consequently, it stated that those terms must be interpreted in the light of the aim of the directive (Joined Cases C‑418/97 and C‑419/97 ARCO Chemie Nederland and Others, paragraph 37), which, according to the third recital in the preamble to the directive, consists in the protection of human health and the environment against harmful effects caused by the collection, transport, treatment, storage and tipping of waste, having regard to Article 174(2) EC, which provides that Community policy on the environment is to aim at a high level of protection and is to be based, in particular, on the precautionary principle and the principle that preventive action should be taken (see Case C‑457/02 Niselli, paragraph 33).
The Court has also held that, in view of the aim pursued by Directive 75/442, the concept of waste cannot be interpreted restrictively (see ARCO Chemie Nederland, paragraph 40).That concept can cover all objects and substances discarded by their owner, even if they have a commercial value and are collected on a commercial basis for recycling, reclamation or reuse (see, Case C‑9/00 Palin Granit and Vehmassalon kansanterveystyön kuntayhtymän hallitus, paragraph 29). But, the Court went on, goods, materials or raw materials resulting from a manufacturing or extraction process which is not primarily intended to produce that item may constitute not a residue but a by-product which the undertaking does not wish to discard but intends to exploit or market on economically advantageous terms in a subsequent process without prior processing (see Palin Granit, paragraph 34, and order in Case C‑235/02 Saetti and Frediani, paragraph 35), in which case it is not waste. In tis case, the Court found that the oil transported was not intended to be discarded and was being exploited commercially.
The third issue that arose was whether in the event of the sinking of an oil tanker, the producer of the heavy fuel oil spilled at sea and/or the seller of the fuel and charterer of the ship carrying the fuel may be required to bear the cost of disposing of the waste thus generated, even though the substance spilled at sea was transported by a third party, in this case a carrier by sea.
The Court held that, in the event of a shipwreck, the owner of the ship carrying hydrocarbons has them in his possession immediately before they become waste. Thus, the shipowner may be regarded as having produced the waste and can be classified as a ‘holder’ within the meaning of the directive. However, the national court may consider that the seller of hydrocarbons and charterer of the ship carrying them has ‘produced’ waste if it finds that the seller-charterer contributed to the risk that the pollution caused by the shipwreck would occur, in particular if he failed to take measures to prevent such an occurrence, such as measures concerning the choice of ship. The Court considers in this respect that the Waste Directive does not preclude the Member States from providing, pursuant to the International Convention on Civil Liability for Oil Pollution Damage adopted at Brussels on November 29th 1969, as amended by the Protocol signed in London on November 27th 1992 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage adopted at Brussels on 18 December 1971, as amended by the Protocol signed in London on November 27th 1992 for limitations or exemptions of liability for the benefit of the shipowner and the charterer, or from establishing a fund such as the International Oil Pollution Compensation Fund.
The Court went on that if the cost of disposing of the waste is not or cannot be borne by that fund and, in accordance with the limitations and/or exemptions of liability laid down, the national law of a member State, including the law derived from international agreements, prevents that cost from being borne by the shipowner and the charterer, even though they are to be regarded as ‘holders’, that a national law will then have to make provision for the cost to be borne by the ‘producer of the product from which the waste came’. In accordance with the ‘polluter pays’ principle, however, such a producer cannot be liable to bear that cost unless he has contributed by his conduct to the risk that the pollution caused by the shipwreck will occur.
That was long, wasn't it ?