10.8.   Recovery of remediation costs from the polluter



When the Danish authorities have remediated a site they can attempt to recover the costs incurred from the polluter. Such cases are not decided on the basis of the Polluter Pays Principle, but on the basis of the normal liability rules found in Danish legislation. These place three main hindrances in the way of cost recovery by the authorities.

The first hindrance is the statute of limitations. For centuries Denmark has had a statute of limitations of 20 years from the tortious act. In a 1992 judgement the Supreme Court ruled that the 20 year statute of limitations also applies to damage caused by pollution. The case concerned the pesticide manufacturing plant Cheminova (Måløv). Cheminova had been located in Måløv 15 km northwest of Copenhagen during the period 1944-54. In 1977 it was discovered that the site was severely contaminated by waste from the factory and that the groundwater was about to be affected. It was decided to abstract the groundwater and treat it in a purpose-built treatment facility, a process that would take about 50 years. The total costs were approx. DKK 18 million. The case against Cheminova was dismissed, however, on the grounds that 23 years had passed since cessation of the activity causing the pollution.

The consequence of the Cheminova ruling is that in practice it will not be possible to recover costs in the case of sites contaminated more than 20 years earlier.

The second hindrance is that an enterprise can only be held liable if the authorities can prove negligence, i.e. that at the time of the event it knew or should have known that its conduct could cause damage. This is illustrated by several judgements:

In the case mentioned in Section 10.1.3 above concerning Cheminova (Harboøre), the Western High Court fastened upon the fact that the authorities had given Cheminova permission to deposit the waste in question, i.e. that the action was not negligent.


Why dosen`t the Polluter Pays Principle work on sins of the past?

The principal judgement is the 1994 Gram judgement. The refrigeration appliance manufacturer Gram had deposited its factory waste, which included drums of used organic solvents, in a disused gravel pit located in a farmer’s field. In 1987 the depository had to be excavated because the drums had rusted through and organic solvents threatened the water supply to a nearby town, a remediation project that cost the Danish EPA DKK 12 million. The Danish EPA brought a court case claiming that the enterprise had n ot had the necessary approval of the local health commission (as demanded by the regulations then in force), and that the factory engineers should have realized that the deposition of such waste would be a threat to the groundwater. The enterprise claimed that they had just acted as was customary at the time: The managing director of the enterprise had obtained verbal permission from the chairman of the parish council to use the gravel pit, and the Municipality was fully aware that the waste was being deposited there. The factory engineers could not be expected to have known better. The gravel pit did not lie within a specific groundwater protection area. After witnesses had been heard, the Court upheld the enterprise’s contention that it had acted in accordance with the knowledge of the time, and the case was therefore dismissed.

The third hindrance is that the majority of the persons or enterprises that caused the pollution no longer exist.

As I discuss further in Section 13.4, a Liability for Environmental Damages Act entered into force in Denmark in 1994 that makes liability strict for listed enterprises, etc., and which extends the statute of limitations to 30 years. However, the new regulations only apply to pollution occurring after 1 July 1994.

Progress as regards recovering remediation costs has been extremely modest: Up to 1995 the Danish EPA has undertaken remediation to the value of DKK 400 million under the provisions of the Contaminated Sites Act. The return from court cases and settlements has so far only been approx. DKK 2 million.

With "newer" contaminated sites the cases are decided decentrally, and no overview of the figures is available. However, the number of cases is small, and the total remediation costs are far less than for remediation under the provisions of the Contaminated Sites Act. The return from court cases and settlements is probably percentually greater, though.