Crimes Against the Environment: Who Pays?

On November 2011, about 155,000 gallons of crude oil leaked from the seabed near a Chevron well off the coast of Rio de Janeiro, with damages for the spill reaching over $20 billion. Criminal charges as well as a civil action were filed last year against Chevron Corp., driller Transocean Ltd. and several of their executives. A Brazilian federal court dismissed all criminal charges last week.

The two companies and 17 of their executives had been charged with “crimes against the environment” and faced up to 31 years in prison if convicted. After the dismissal of the criminal charges they still face civil penalties. According to a spokesman for the federal prosecutor’s office, “both sides are seeking an agreement regarding the amount to be paid.” At this time, they are offering to pay about $160 million.

Environmental crime covers acts that breach environmental legislation and cause significant harm or risk to the environment and human health. These crimes result from the “knowing” breach of environmental law. Knowing violations are those that are deliberate and not the product of accident or mistake. The most known areas of environmental crime are the illegal emission or discharge of substances into air, water or soil, the illegal trade in wildlife, illegal trade in ozone-depleting substances and the illegal shipment or dumping of waste.

Examples of contemporary environmental crimes include the 2010 toxic leak in Hungary, where a state of emergency was declared in three western countries after the chemical waste burst from a reservoir at an alumina plant. At least seven villages and towns were affected including Devecser, where the torrent was over 6.5 feet deep. The flood swept cars from roads and damaged bridges and houses, forcing the evacuation of hundreds of residents.

In 2006, the Ivory Coast toxic waste dump was a health crisis when a ship registered in Panama, the ‘Probo Koala’, chartered by the Swiss-based oil and commodity shipping company Trafigura Beheer BV, offloaded toxic waste at the Ivorian port of Abidjan. The waste was then dumped by a local contractor at as many as 12 sites in and around the city of Abidjan. The gas caused by the release of these chemicals caused the death of 22 and the injury of over 30,000 Ivorians with injuries that ranged from mild headaches to severe burns of skin and lungs.

Environmental crimes cause significant damage to the environment and, given their cross border aspect, their effect concern us all. At the same time, they provide for very high profits for perpetrators and a relatively low risk of detection. In the early days of environmental legislation, violations carried largely insignificant civil fines and penalties. Newer laws address the willfulness of individuals who might be financially motivated to breach environmental laws and carry criminal penalties.

However, it is rare to hear of company executives going to prison for breach of environmental laws. Frequently, as in the case of the Rio de Janeiro spill, corporations are able to protect those responsible for the harm by paying what usually constitutes a small part of the damage caused by their actions. Since environmental laws are still based on national legislation, state sovereignty allows for financial settlements that avoid criminal penalties. Thus, companies often perform a cost benefit analysis of the savings resulting from the breach of environmental laws, versus what they will have to pay should they be prosecuted for the breach. Forum shopping as to what countries are more lenient regarding environmental crimes is also a reality.

The primary goals of criminal enforcement of environmental laws must be to maximize compliance and reduce threats to public health and the environment. Given that environmental breaches affect us all, perhaps it is necessary to have common standards for environmental violations at the international level as well as more effective enforcement. Perhaps prison for those who by their recklessness cause severe environmental damages should be a real option.