Administrative and Criminal Liability of Legal Persons for Offences against Environment in the Czech Republic

Transcription

1 Administrative and Criminal Liability of Legal Persons for Offences against Environment in the Czech Republic JIRI ZICHA Department of Regional Development, Public Sector Administration and Law Tomas Bata University in Zlin Faculty of Management and Economics Nam. T. G. Masaryka 5555, Zlin CZECH REPUBLIC Abstract: - The main aim of this paper is to introduce and analyze concept of administrative and criminal liability of legal persons for offenses against environment, especially in the Czech Republic. The main reason for this is that until 2011 the administrative sanctions were the only possibility how to charge legal persons for any kind of offence while the Czech Republic was the only EU country where criminal liability of these legal entities was not established. But this uniqueness has finished in The paper analyses legal acts, decisions of competent authorities and relevant statistics from the qualitative, quantitative, and also from economic point of view. Results show that Czech administrative law offers suitable set of tools to protect environment and adequate set of sanctions that can be imposed to their enforcement but the competent authorities tend use not all tools enabled by relevant legal acts. Situation in the area of criminal environmental law is different but also unsatisfactory. But the new legislation adopted in 2012 brings an opportunity for a change. Key-Words: administrative law, criminal law, environmental law, legal persons, offences, sanctions, Czech Republic 1 Introduction Administrative and criminal liability of legal persons for offenses against environment can be seen as a part of wider concept of environmental justice. Environmental laws and policies are predominantly goal-oriented. Standards, principles and procedures are often instrumental to achieve the conservation of ecosystems, the preservation of fresh water and other natural resources, the restoration of contamined soils and the protection of human health. Yet, environmental law also involves priorities, conflicts, clashes of interests - and concerns for justice and fairness (Ebbesson, 2009, p. 1). This topic is also part of wider concept of environmental liability, which includes liability for offences and liability for environmental damage. Liability for offences covers regulation of criminal and administrative offences, liability for environmental damage includes also the civil liability (Damohorský et al., 2003, p ). In accordance with principle of sovereignty, states still have relatively broad discretion to decide which of these liability tools and in which form they will use. The idea that for a conduct defined as criminal offence should be responsible not only physical but under certain conditions also legal persons was promoted very slowly from 19th century, at first in Great Britain. In case Birmingham & Gloucester Railway Co. (1842) was this company sentenced for violation of public order when its delay caused loss of right to occupy a land necessary to build roads and bridges, which were required to be established due to the removal of barriers that were caused by construction of the railway (Forejt, Habarta and Trešlová, 2012, pp. 8-9). Nowadays, most of the major statutes enacted in United States during the modern environmental movement provide for criminal punishment. This is largely because the threat of criminal liability can gain environmental compliance more effectively than civil penalties. Corporations that violate environmental civil regulation often simply internalize their cost of noncompliance without ever adjusting their unlawful impact on environment. The fear of criminal prosecution and incarceration more effectively deters the violation of ISBN:

2 environmental statutes because these punishments are often focused on individuals, and the stigma of a criminal prosecution can have detrimental social and professional impacts (Arensberg, 2011, pp ). This statement was confirmed also by Almer and Goeschl (2010) for Germany, or by Faure and Zhang (2011) for China. On the other side, there are also authors such as Husak (2008) or Blomquist (2011) who argue against and talk even about overcriminalisation of law, including environmental law in the USA or in Brazil. But it always depends not only on simple existence of possibility to inflict a criminal sanction but also on its real aims and its effectiveness. Example can be precisely China. Even though that its Penal Code has an impressive articles that formally deal with environmental pollution, many of those are in fact aimed at protection of economic interests and less with the protection of environment as such. In a 1995 article, Cheng Jang argued that in China polluting corporations and their officials are the untouchables. It is not clear to what extend the situation has changed since then (Faure and Zhang, 2011, p. 41). The purpose of this article is to present results of analysis of the current situation in the Czech Republic from the qualitative (form of regulation) and quantitative (number of offences) point of view. 2 Materials and Methods For the purpose of analysis of a legal order it is obviously necessary to work with legal texts, especially with legal acts, supportively with decisions of competent authorities and also with relevant statistics. 2.1 Administrative Liability Typical feature of administrative law in the Czech Republic is fragmentation of regulation of offences, especially those committed by legal persons, and fragmentation of sanctions, which may be imposed upon them. Environmental law is not an exception. Legal acts usually distinguish offences caused by natural persons on one side, and offences caused by legal persons or offences caused by natural persons in connection with their business activities on the other side. It means that information about second group mix those two type of entities and it is impossible to get exact numbers about offences caused just by legal persons. System of environmental law in the Czech Republic is made by so-called horizontal tools (or sometimes called cross-sectional tools), which include environmental impact assessment, integrated pollution prevention and control or access to information, by tools to protect components of environment, i. e. nature, forest, air, water or soil, and by tools of protection against sources of threat such as waste, radiation, noise, chemicals or genetically modified organisms. (Damohorský et al., 2003, p. 31). Although there were attempts to codify Czech environmental law, similarly as it is codified in Netherland or Sweden, it remains fragmented into wide range of legal acts. And almost every environmental legal act contains its specific qualification of breaches of its rules. As for the sanctions, the situation is rather clear in relation to their types while the typical sanction is a financial fine. But the scope of fines is pretty diverse. To get a general overview it was necessary to see each particular piece of legislation and to use statistics of Czech Environmental Inspectorate, which is the main authority responsible for enforcement of environmental law within administrative procedures against both physical and legal persons. 2.2 Criminal Liability Until 2011 the administrative sanctions were the only possibility how to charge legal persons for any kind of offence while the Czech Republic was the only EU country where criminal liability of these legal entities was not established. This uniqueness has finished with adoption of the Act No. 418/2011 Coll., on Criminal Liability of Legal Persons and Proceedings Against Them, which has entered into power on 1 January For the offences against environment is important that almost at the same time (in mid November 2011) was adopted and (on 1 December 2011) entered into power the Act No. 330/2011 Coll. amending the Act No. 40/2009 Coll., Criminal Code. It has been the most extensive amendment to the new Czech Criminal Code, which substantially affects also its eighth head governing offenses against the environment. Important impulse and reason for this amendment was also the fact that already in December 2010 expired deadline for transposition of the Directive 2008/99/EC of the European Parliament and of the Council of 19 November 2008 on the protection of the environment through criminal law. This recent development means that Czech legal order related to regulation of criminal offences against environment caused by legal persons stands on its beginning. Therefore, there is neither any experience nor statistic yet. So, the analysis will focus on relation between extend of financial fines which can be imposed in administrative and ISBN:

3 criminal procedure, and possible effectivity of other types of sanctions that can be imposed by criminal courts. 3 Results The results are based on statistics of the Czech Environmental Inspectorate (CEI), which is the main enforcement authority in the field of environment in the Czech Republic, and on statistics of the Supreme Public Prosecutor s Office (SPPO), which is competent to promote the interests of the state in criminal procedures. 3.1 Administrative Liability In 2010 the CEI imposed fines in total amount of CZK, average sum of a fine was CZK (Česká inspekce životního prostředí, 2010, s. 9). In case of horizontal tools, it was only integrated pollution prevention and control where CEI had conducted proceedings on a fine in This area is regulated by the Act No. 76/2002 Coll., on Integrated Pollution Prevention and Control, as amended, and according to its 37 it is possible to impose a fine up to 7 million CZK. The CEI imposed 152 fines in total amount of CZK, average sum of a fine was CZK, range of fines was from 1 thousand to 2,5 million CZK (Česká inspekce životního prostředí, 2010, s. 74). In case of tools to protect components of environment the situation is more varied. The area of nature conservation is regulated by two main pieces of legislation, the Act No. 114/1992 Coll., on the Protection of Nature and the Landscape, as amended, which allows maximum fine of 2 million CZK, and the Act. No. 100/2004 Coll., on Trade in Endangered Species, as amended, which allows maximum fine of 1,5 million CZK. The CEI imposed 394 fines in total amount of CZK, 86 of them in total amount of was imposed according to the Act on Trade in Endangered Species (Česká inspekce životního prostředí, 2010, s. 48). As for the forests, which are divided from nature conservation into separate piece of law, the Act. No. 289/1995 Coll., on Forests, as amended, the CEI imposed 147 fines in total amount of CZK (Česká inspekce životního prostředí, 2010, s. 63) while according to the law is allowed to impose a single fine up to 5 million CZK. Quality of air should be ensured by the Act No. 86/2002 Coll., on the Protection of Air, as amended, which allows imposing maximum fine of 10 million CZK. In 2010 the CEI was dealing with 62 offences and imposed 5,5 million CZK of fines in total (Česká inspekce životního prostředí, 2010, s. 16). Protection of water is matter of the Act. No. 254/2001 Coll., on Waters, as amended. Offences caused by legal persons or caused by natural persons in connection with their business activities can be punished also up to 10 million CZK. There were 557 cases solved by the CEI in 2010 and total amount of CZK was imposed on fines. Last, and probably the least, soil. This ground of our existence is in Czech law protected as so called agricultural land resource by the Act. No. 334/1992 Coll., as amended. Maximum fine, which can be imposed for its damage is eight times the minimum wage, i. e CZK in The CEI is not even competent authority in this case but it is up to municipal and regional authorities to deal with these cases. There are no statistics but the matter of protection of soil is generally seen as deeply underestimated across entire European union (see European Commission, 2006, p. 2). Looking at tools of protection against sources of threat, there are available information only for waste management, chemicals and biocides. According to 66 of the Act No. 185/2001 Coll., on Wastes, as amended, it is possible to impose maximum fine even 50 million CZK, the Act No. 356/2003 Coll., on Chemicals, as amended, then allows fine up to 5 million CZK. In 2010 the CEI solved 922 cases of offences at this fields and imposed fines in total amount of CZK. In relation to genetically modified organisms, there were 44 controls of subjects, that are dealing with these substances but only minor administrative insufficiencies were found out. (Česká inspekce životního prostředí, 2010, pp. 38, 49) 3.2 Criminal Liability Criminal offences that can be committed by legal person are listed in 7 of the Act on Criminal Liability of Legal Persons and Proceedings Against Them, and this list includes also offences against environment regulated by 293 to 301 of the Penal Code, i. e. crimes of Damage and Threat of the Environment, Damage of Forest, Unauthorized Release of Pollutants, Unauthorized Treatment with Wastes, Unauthorized Treatment with Protected Wild Fauna and Flora. As an insufficiency of the Act can be seen the fact, that other crimes against environment, such as Cruelty to Animals, Poaching or Spread of Contagious Animal Diseases are not on the list and can be further attributed only to natural persons. Zeman (2012) mentions that during preparation of the Act were discussed two options for the scope of legal person s liability. The first was the possibility of an exhaustive enumeration of ISBN:

4 all crimes or offenses, which comes in relation with criminal liability of legal persons into account. Under the second option the range of criminal liability of legal persons could be defined so that it applies to all offenses listed in Penal Code, unless their commitment by a legal entity is excluded because of their character. Unfortunately, the first option was finally chosen. Beside list of crimes, in 15 and the following of the Act there is exhaustive enumeration of sanctions that can be imposed for offenses committed by a legal person. It is possible to dissolve the entity, which is seated in the Czech Republic. The court can also decide about forfeiture of its property. As for the fine as another possible sanction, the daily rate can range from 1 thousand to 2 million CZK, and according to 68 of the Criminal Code the number of daily rates can range from 20 to 730. The court can also prohibit activity of the legal person, to prohibit its participation in the concession procedure, in a public tender or performance of public contracts, or to prohibit receiving subsidies. It can be also decided about publication of the judgement. It is evident that the range of possible sanctions is much wider than in administrative law, where mainly imposing of fines is applied. As it was already mentioned, the Act on Criminal Liability of Legal Persons and Proceedings Against Them has entered into power just recently, on 1 January Obviously, there are no experience and statistics yet. To get imagine about applicability of criminal liability for offences against environment, we can see statistics of the SPPO related to natural persons. In 2010 there were only 3 cases of Damage and Threat of the Environment, 2 cases of Damage of Forest, 8 cases of Unauthorized Treatment with Wastes, and 6 cases of Unauthorized Treatment with Protected Wild Fauna and Flora. Numbers from previous years are similar (Nejvyšší státní zastupitelství, 2011, Annex II/9). 4 Discussion Facts that were just mentioned can lead to several conclusions. Faure (2010) reminds us that dissuasiveness of sanctions, no matter if administrative or criminal, refers strongly to the deterrence theory, which is based on the ideas of the Nobel Prize winning economist Gary Becker (1968). The idea of Becker is, to put it very simple, that potential offenders base their decision to violate the law or not on a costbenefit analysis. The decision of the violator depends on B p x S, where B = benefits, p = probability of being detected, prosecuted and convicted, and S = sanction actually imposed. Suppose that the benefits from an environmental offence are and that the sanction that would be imposed in case of a conviction would be If the probability of detection would be 10% and the probability of conviction 50% the expected cost for the polluter would be 10% x 50% x = This simple example shows that ex ante a rational subject would decide to commit the offence for the simple reason that his expected benefits ( ) are higher than the expected costs ( 5.000). This knowledge is important for both, administrative and criminal environmental law in the Czech Republic. Czech administrative law seems to be offering suitable set of tools to protect environment and adequate set of sanctions that can be imposed to their enforcement. The statistics show that the CEI, as the main authority in this field, is relatively active and solves hundreds of cases every year. But at the same time it tends to impose lower rates of fines, not using all range enabled by relevant legal acts. Than is relevant the notion of Arensberg (2011) that corporations that violate environmental regulation, no matter if the civil one in the USA or the administrative in the Czech Republic, simply internalize their costs of noncompliance. In other words, the upper limit of financial administrative sanctions seems dissuasive, the way of application by the CEI seems not. Situation in the area of criminal environmental law is different but also unsatisfactory. The problem is not in Becker s S but in p, i. e. in probability that environmental criminal will be detected, prosecuted and convicted. The fact that criminal offences are in the Czech Republic counted only in units has more reasons, and the high public awareness about environment and importance of its protection is unfortunately not the main one. More important role play insufficient formulation of state environmental policy, lack of environmental knowledge among criminal procedure authorities, and until 2011 it was also incomprehensible definition of criminal offences against environment in the Criminal Code. New Act No. 330/2011 Coll., which has amended the Code, together with the Act on Criminal Liability of Legal Persons and Proceedings Against Them, has brought some hope that this may change since 2012 (Zicha, Pokorná, 2012, p. 85). Quality and applicability of legal regulation is definitely a conditio sine qua non. But as soon as it is fulfilled depends on competent ISBN:

5 authorities if the effective protection of environment becomes a reality. It will be really interesting to further see and investigate applicability and effectiveness of environmental law not only in the Czech Republic but also in other countries. Acknowledgement The author is thankful to the Internal Grant Agency of Tomas Bata University in Zlín for the grant No. IGA/FaME/ "Analysis of the strategic planning of the regional development and the interconnection with budgeting on the regional and municipal level of the Czech Republic (aimed at the support of business and innovations)" which provided financial support for this survey. References [1] Ch. Almer and T. Goeshl, Environmental Law and Punishment: Empirical Evidence from the German Penal Code, Land Economics, Vol. 86, No. 4, 2010, pp [2] A. Arenserg, Are Migratory Birds Extending Environmental Criminal Liability? Ecology Law Quarterly, Vol. 38, No. 427, 2011, pp [3] G. S. Becker, Crime and Punishment: An Economic Approach, Journal of Political Economy, 1968, pp [4] R. F. Blomquist, The Logic and Limits of Environmental Criminal Law in the Global Setting: Brazil and the united States - Comparsion, Contrasts and Questions in Search of a Robust Theory, Tulane Environmental Law Journal, Vol. 25, No. 83, 2011, pp [5] Česká inspekce životního prostředí, Výroční zpráva Praha, [6] M. Damohorský et al., Právo životního prostředí, Praha: C. H. Beck, [7] J. Ebbesson, Introduction: Dimensions of Justice in Environmental Law, in. J. Ebbesson, and P. Okowa ed., Environmetal Law and Justice in Context, Cambridge: Cambridge University Press, 2009, pp [8] European Commission, Thematic Strategy for Soil Protection, Brussels, [9] M. Faure, Effective Penalties in the Implementation of the Environmental Crime and Ship-source Pollution Directives: Questions and Challenges, Working Paper Prepared on the Request of the European Commission, Maastricht, [10] M. G. Faure and H. Zhang, Environmental Criminal Law in China: A Critical Analysis, Environmental Law Reporter: News & Analysis, Vol. 1, 2011, pp [11] P. Forejt, P. Habarta and L. Trešlová, Zákon o trestní odpovědnosti právnických osob a řízení proti nim s komentářem, Praha: Linde, [12] D. Husak, Overcriminalization: The Limits of the Criminal Law, Oxford University Press, [13] Nejvyšší státní zastupitelství, Zpráva o činnosti státního zastupitelství za rok 2010, Brno, [14] P. Zeman, Trestní odpovědnost právnických osob v mezinárodním kontextu - diskusní setkání České národní skupiny Mezinárodní společnosti pro trestní právo, Trestněprávní revue, Vol. 2, 2012, pp [15] J. Zicha and L. Pokorná, Nová úprava některých skutkových podstat trestných činů proti životnímu prostředí, Trestněprávní revue, Vol. 4, 2012, pp ISBN: