Environmental law and companies : an analysis with particular reference to corporate liability

Abstract

The underlying argument of this thesis is that corporate environmental liability (CEL) – which is inherently reactive – can indeed be complemented by a proactive approach towards environmental protection. This means that an environmentally-oriented corporate behaviour can be better achieved by not solely relying on reactive liability frameworks, but by inducing companies to embrace environmental values in a proactive and engaged manner. Although environmental law alludes to preventive measures, it relies upon a liability framework in regulating corporate activities. Additionally, its external characteristic in relation to companies has limited its scope for application and therefore environmental protection has transcended its place in the external framework of environmental law. The limitation in environmental law may be addressed by incorporating environmental concerns within company law, whereby environmental interests may be established as one of the directors’ duties. Presently, Maltese company law supports a shareholdercentric approach and no mention to interests such as the environment is made. A way forward can therefore include the incorporation of a legitimate environmental interest within company law. Furthermore, an intra-corporate environmental voice could be enhanced by providing environment management systems as another way in which companies may consider the environment in a proactive manner. In the absence of these proactive approaches, the focus shifts on the effectiveness of CEL. The complexities in establishing corporate liability for environmental damage and environmental crimes require added clarity, coherence and authoritative guidelines to avoid confusion. Moreover, the penalties, fines and costs inflicted should reflect the gravity of the environmental damage and crimes, in that they should serve as apposite deterrents for environmental breaches.