The Polluter Pays Principle

The principle is most commonly interpreted to mean that the polluter, who has directly or indirectly damaged the environment or created conditions that led to environmental damage, should bear the cost of carrying out measures decided by public authorities to ensure the environment is returned to an acceptable state after a pollution incident. Simply stated, the Polluter Pays Principle implies that the costs associated with pollution are to be paid by polluters, not by government or society.

The Origins of the Polluter Pays Principle

The Polluter Pays Principle was first formally articulated in 1972 by the Council of the Organization for Economic Co-operation and Development (OECD). Since that time, it has been adopted as a management mechanism and incorporated within many international environmental instruments, some of which have been ratified by over 175 countries worldwide. These include:

• Agenda 21
• The Rio Declaration on Environment and Development
• The International Convention on Oil Pollution Preparedness, Response and Co-operation
• The Convention on the Transboundary Effects of Industrial Accidents
• The Paris Agreement

Today, the Polluter Pays Principle is one of the core principles of sustainable development. It is also one of the fundamental principles governing modern environmental law and policy, underpinning most of the regulations imposed on potential polluters affecting land, water and air. The Polluter Pays Principle is often applied as a liability and compensation mechanism which can also act as an incentive for potential polluters to implement whatever measures deemed necessary to prevent potential pollution, comply with regulations, and avoid additional costs.

The Polluter Pays Principle and Marine Shipping Regulations

The Polluter Pays Principle as a liability and compensation mechanism is prevalent throughout ship-source pollution law. The International Maritime Organization, a specialized agency of the United Nations responsible for measures to improve the safety and security of international shipping and to prevent pollution from ships, has applied the Polluter Pays Principle in many of the conventions it has developed. These include:

• The International Convention on Oil Pollution Preparedness, Response and Co-operation
• The International Convention on Civil Liability for Oil Pollution Damage
• The International Convention on Civil Liability for Bunker Oil Pollution Damage
• The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage
• The HNS Convention

Within the legislation of the marine shipping industry the implementation of the Polluter Pays Principle has evolved from an economic concept holding polluters accountable for the direct costs of pollution, to an actionable principle requiring polluters to pay for emergency response and clean-up costs, to having polluters pay compensation to the victims of pollution. In many cases the polluter is liable even in the absence of fault. However, legislation may provide special circumstances in which a polluter is exempt of liability. For example, the International Convention on Civil Liability for Oil Pollution Damage exempts the polluter of liability if they can prove:

• the damage resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character, or
• the damage was wholly caused by an act or omission done with intent to cause damage by a third party, or
• the damage was wholly caused by the negligence or other wrongful act of a Government or other authority responsible for the maintenance of lights or other navigational aids, in the exercise of that function.

The Polluter Pays Principle in Canada

As an equitable and near universal principle, the Polluter Pays Principle also underpins Canada’s domestic marine and environmental legislation. Some examples include:

• The Canadian Environmental Protection Act
• The Marine Liability Act

Learn more about how the marine shipping industry is regulated and check out the Wheel of Maritime Law.

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