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AEBC/03/01
AGRICULTURE AND ENVIRONMENT BIOTECHNOLOGY COMMISSION LIABILITY FOR GMOs: DRAFT WORKING PAPER FOR DISCUSSION Background
and timeline
1.
The attached draft working paper from the AEBC liability sub-group
provides the basis for the Commission’s discussion about liability and redress
for GMOs on 27 February.
2.
The Commission has had discussions on liability at several previous
meetings, including at Edinburgh in September last year and at Eden in December,
which have been helpful to the liability group in taking forward its work.
For this Commission meeting, the sub group has prepared a draft working
paper for the Commission to consider and debate. 3.
The liability sub group is arranging a stakeholder seminar early in
April, for around 30 people, including those who have given evidence to the sub
group already. The group will
outline current thinking and emerging conclusions, to have informal discussions
at this stage, and to involve stakeholders in development of the liability
study, when recommendations on liability for GMOs are emerging, but not yet
finalised. 4.
The sub group will undertake further analysis of the options and of
evidence between the February and May Commission meetings discussions.
Both this and the outcome of discussions with stakeholders will feed into
the draft report which the Commission will discuss in May, with the aim of
agreeing the draft at that meeting, subject to fairly minor changes, and then
publishing a report with advice on options to Government shortly afterwards.
This timetable means that the liability report can be available within
the period of the GM public debate, and will make a contribution to the GM
public debate. The timetable also
suggests that the liability report recommendations could helpfully be in the
form of provisional outcomes for debate, rather than necessarily as a specific
and concrete set of proposals to Government.
5.
Members will be aware that liability is a subject which has recently
received some public attention. The
Environment Minister, Michael Meacher MP, drew attention to liability issues at
a ‘Gene futures’ conference in London on 11 February, and this has
subsequently been discussed in the national press.
Aspects
for particular discussion on 27 February
6.
The Commission will want to consider in detail the draft working paper at
this meeting, so as to manage the tight timetable.
Liability sub group members will outline and introduce the main
developments and main areas for discussion.
The aim is to take work forward as far as possible, with as much detailed
discussion and agreement as is feasible. 7.
As the timing means that the liability report will be able to play a part
in the GM public debate, the report’s conclusions and recommendations might do
two things:
8.
The liability sub-group suggests that the Commission might like to focus
particularly on the emerging recommendations and conclusions, as well as the
analysis that leads up to them. Some
of the key questions for the Commission to discuss are: · Are the generic principles adopted by the sub group right? · In particular the group considers that the prime objective is a system which minimises the reliance on and recourse to law. The Government should do all it can to ensure that the issue of co-existence of GM crops and non-GM crops is dealt with before any commercial growing starts. It should consider making full use of the powers and safeguards available to regulators under existing legislation, as well as using consent conditions and monitoring, and making full use of best practice and protocols. Liability provisions should be seen as a last resort; their function is as back-up to other eg regulatory provisions. General regulation should be used to cover legal liability for GM and other novel biotechnology applications wherever possible.
9.
The full draft working paper is attached.
Also, for ease of reference, the paragraphs of emerging conclusions are
attached below. (They form part of Chapter 11 of the working paper.) 10.
Drafting comments: Members may well have drafting comments, which the
secretariat would welcome either before or after the Commission meeting.
Draft
emerging conclusions: extract from draft liability working paper
11.
GMOs currently subject to detailed regulation by both the European Union
and in the UK. In evidence we were told that it is hard to imagine any other
activity subject to as detailed regulation.
Regulation focuses on preventing harm to human health or the
environment by means of a case by case risk assessment prior to consent being
granted for their release into the environment, and incorporates provisions for
monitoring any GMOs been released into the environment or are available on the
market. 12.
There are no GMO specific regulatory provisions providing for
compensation for any personal loss or for clean-up in the event of environmental
damage. Anyone wishing to claim compensation for harm to health or damage to
property must use the common (judge-made) law to seek redress.
Damage to biodiversity and water pollution are regulated, to a degree,
under the Wildlife and Countryside Act 1981 and the Water Resources Act 1990. 13.
Current insurance products do not cover environmental
pollution or contamination unless it occurs as a result of a sudden and
accidental event (unlikely in the case of GM crops). There is currently no
general cover for economic impacts arising from crop growing in the UK. 14.
As part of our work we attempted, with the help of
consultees, to consider potential impacts of growing GM crops on a commercial
basis. The impacts we identified divide into impacts on the environment and
impacts on the livelihoods of neighbouring farmers and others (which we describe
as "economic impacts"). In the context of a liability regime these
raise separate issues and need to be considered separately. 15.
In our judgement most of the environmental impacts from
growing GM crops raise issues that are not unique to GM crops, but arise in
other farming practices. 16.
The potential economic impacts of growing GM crops do most
to set GM crops apart from other current farming practices.
In addition we heard in evidence that these potential economic impacts
are causing significant concern amongst non-GM farming sectors and in particular
the organic sector. 17.
Social research suggests that the public are concerned about
the potential for GM crops to cause harm which is currently unforeseeable.
In addition GMOs are currently, at least, the subject of considerable
attention. Whilst this does not of itself mean the issues raised by GM crops are
different from those raised by other agricultural products, it does form part of
the backdrop in which the Government will need to take its decisions on whether
to introduce specific legal provisions for any impacts of GMOs. 18.
In our judgement, current laws are not adequate to address
the potential environmental and economic impacts of growing GM crops or the
concerns highlighted by the public · There are considerable uncertainties as to whether non-GM farmers who suffer economic loss (eg loss of organic status) would be able to recover for their loss at common law. This is on the basis the loss is economic and not, as a general rule, recoverable · In addition these issues will be left to the courts to decide. The effect is that the courts will find themselves trying to rule on issues of considerable current controversy including whether growing GM crops is a reasonable use of the land. We do not think it appropriate for the courts to become embroiled in this public policy role and the House of Lords has already signalled its reluctance to become involved. · We heard in evidence that some sectors of organic farming may be treated at law as an “over sensitive” sector of the farming industry and not therefore entitled to legal protection · Damage to the biodiversity of farmland is not currently the subject of legal protection (unless it is owned property and therefore treated as such or falls within a site designated as important to nature conservation (eg SSSI's, SAC's, SPA's). The proposed European Directive governing clean up of environmental damage will have a limited effect in the UK. The majority of agricultural land will not fall within the scope of the regime. In any event the proposal is likely to evolve, and is unlikely to be finalised or implemented for a number of years, and cannot therefore assist in the early years of any commercial growing in the UK. · Current laws do not make any provision for compensation for those who suffer loss from any unforeseeable damage. The effect is that the loss will lie where it falls. 19.
However, introduction of a new liability regime also has its own
problems. Any liability regime for
the economic impacts of GM crops will depend for its workability on agreement on
threshold levels to act as the measure of when damage has occurred. This is one
very good reason for ensuring that acceptable co-existence measures are in place
prior to any commercial growing. Another reason is that a liability regime
should be seen as an option of last resort. Preventing economic impacts is clearly preferable to waiting
until the damage has been done. 20.
If there is, however, such damage, those who suffer damage
should receive compensation, and environmental damage should be cleaned up.
For compensation, a civil liability regime has a role to play, and for
clean-up, the focus would be a regime enforced by local authorities/ the
Environment Agency. 21.
We have found the decision whether to recommend the introduction of a
regime for the clean up of any environmental damage caused by GM crops a
difficult one. (We concluded there is a potential need for a clean up regime,
rather than a financial compensation regime.)
In debating this, we considered the following factors · Damage to farmland biodiversity is not currently subject to legal protection · The potential impacts on the environment of growing GM crops are similar to the potential impacts of other farming practices · Any liability regime should not draw unnecessary distinctions between GM crops and other agricultural products. ·
Experience from other industry sectors indicates that liability
regimes are not necessarily the main drivers for increasing standards. · Constructing a liability or clean-up regime for environmental damage is not likely to be an easy task. Attempts are currently being made at an EU level and have been ongoing for over ten years. Difficult issues include [deciding how to measure/gauge damage to biodiversity, balancing the ability of industry to operate without uncertain liabilities and protection of the environment, stimulating an insurance regime] The UK is likely to face the same issues. · We heard evidence that the advantages of liability regimes are that rules laid down in advance can pre-empt the need for litigation by taking away any uncertainty and that it can also promote the conditions in which an industry can develop on the basis it understands the extent of its exposure to liability [Need to test this out with industry at stakeholders meeting]. ·
The current regulatory regime provides a number of safeguards (including
risk assessment and monitoring) to prevent environmental damage and gives those
regulating the regime a number of useful powers exercisable in the event of risk
of environmental damage. These
include the power to prohibit continued growing, to seize and destroy the crops
(in the event of imminent harm to the environment), and the right to enter and
inspect land. In addition those who grow the crops will be under a duty
to keep themselves informed of changes to the environment and to dispose of the
crops as safely and quickly as practicable if required to do so. In addition the
courts and the Secretary of State have the power to require clean-up in the
event of any environmental damage caused by a breach of the licence. 22.
The focus of our report has been on GM crops as their timescale is
imminent. However we think it
important that any changes to law and current laws are used in light of the
relevance and assistance to GMOs including GM fish, plants and animals. 23.
Liability regimes cannot be seen as the complete answer to the issues.
The first objective for any laws governing GM crops must be to prevent
environmental and economic damage from occurring. AEBC
Secretariat February
2003 AGRICULTURE
AND ENVIRONMENT BIOTECHNOLOGY COMMISSION (AEBC) LIABILITY FOR
GMOs: DRAFT WORKING PAPER FOR DISCUSSION FEBRUARY 2003 CONTENTS
Executive summaryChapter 1 Introduction: Purpose, scope and method of studyChapter 2 Summary of conclusions and recommendations Chapter 3
Functions of a liability regime Chapter
4
Economic issues and liability Chapter
5
Environmental liability Chapter
6
The current UK and proposed European legal position on liability Chapter
7
Gaps in current liability provisions Chapter
8
Is there a need for a new economic or environmental liability regime? Chapter
9
Possible elements in a new economic or environmental liability regime Chapter
10
Limits to liability, and the role of other means of redress and
provisions including insurance Chapter
11
Emerging conclusions and emerging recommendations for debate ANNEXES EXECUTIVE SUMMARY:
to be prepared once report is drafted CHAPTER 1: INTRODUCTION Why study liability? 24. The issue of liability for any potential harm arising from the release of GMOs to the environment, and who might pay if any damage, (economic or environmental) occurs, has become a key point of tension[1] in the debate about the possible commercialisation of genetically modified (GM) crops in the UK and elsewhere in Europe in recent years. 25. Those critical of GM crops are concerned about unforeseeable impacts from growing GM crops and argue that it is only fair that the biotechnology companies and others profiting from GM crops should pay for any damage that might arise. On the other hand, supporters of GM crops argue that singling out GM technology for special attention is unwarranted and unfair. There is no special liability regime for other developments in crop improvement or agronomic practice, and the release of GMOs is already more tightly regulated than any other agriculturally-related activity. Since the benefits of GM crops would be for society as well as the companies, they argue it would be appropriate for society to cover some of the risks, particularly for harm of a type that was unforeseen and unforeseeable at the time of the release of the GMOs concerned. 26. At present no genetically modified crops are grown commercially in the United Kingdom. The AEBC horizon scanning report, April 2002, considered the main trends in development of biotechnology for use in agriculture and factors likely to condition their uptake. It described which GM plants and animals are in or close to commercial agricultural production, how much commercial cultivation of GM crops is underway, how quickly commercial cultivation of GM crops is expanding, how industry and research is evolving, and what kinds of modifications are being made to crops, trees, animals and insects[2]. 27. The Government will need to take decisions in the near future on whether a number of crops could be grown commercially, in the light of a wide range of inputs, including information from the Farm Scale Evaluations – on which we reported in September 2001 in Crops on Trial[3] – of the current GM public debate[4], and within the framework of European law. 28. There are at present no specific legal liability provisions for genetically modified crops which would cover all aspects of liability for such crops. As part of the decision making process, the Government will be considering whether specific new provisions are needed for liability. Hence the importance and priority for the AEBC to study the area in depth. The present position is that in the absence of a regime set out in statute law, legal liability cases are argued and decided individually in the courts, from general principles, and using precedents set by earlier cases. 29. The AEBC take it as given that for any commercialisation of GM crops there would inevitably be a requirement for a general regime for co-existence between different types of farming, and regulation relating to environmental and human safety. This would include current regulation and monitoring of the technology and its application in agriculture. The regulatory framework is outlined at Chapter 3, paragraph [25 onwards] It would also include a specific regime to be developed which would establish acceptable tolerance levels of GM in non-GM and organic products.. 30. This report has liability as a main focus, but because liability does not exist in a vacuum, and because there are inevitably limits to what may be achieved within the fairly narrow confines of a legal liability regime, the report also covers other possible means of redress for potential harm. The report does not deal in any detail with the wider aspects of a co-existence regime, since this is a key part of the Commission’s current study on consumer choice and co-existence, which will also be published this summer. 31. The AEBC consider that main objective for any provisions on liability for GM crops is to prevent environmental and economic damage occurring. If there were however such damage, those who suffer damage should receive compensation, and environmental damage should be cleaned up. Our aim of prevention rather than cure is the reason for the emphasis in this report on the regime for co-existence. For compensation, a civil liability regime has a function, and for clean-up, the focus would be a regime enforced by local authorities and/ or the Environment Agency. 32. The drivers for considering environmental liability for GMOs are broad and stem from more general concern about environmental protection. In some situations in the past, completely unrelated to GMOs, things have gone badly wrong. These include environmental problems caused by oil pollution and spillage incidents over a number of years - which have led to calls for the ‘polluter pays’ principle to be implemented. This includes both preventive and clean up measures through liability provision. BSE in particular has highlighted the potential for future, unforeseen, consequences. The background to this study includes the continuing development of scientific understanding of evidence and proof, concerns about environmental damage expressed during the Crops on Trial study, and the development of precautionary approaches to new technologies. There is fuller discussion of such issues in Crops on Trial[5]. 33. There are also a number of strands of ongoing policy work across Europe to develop biotechnology law, which include work on food and feed, traceability and labelling, and discussion of the Cartagena protocol. These all have direct or indirect implications for liability and GM crops. There are specific proposals for a European Directive on environmental liability. How this will affect and fit alongside UK provisions is highly relevant to our study. Scope and method 34. One of the objectives of this study is to consider and to analyse the options for a system which is able to deal robustly with conditions arising from any future commercialisation of genetically modified crops and other organisms. The Commission places considerable emphasis on the need for co-existence in the countryside, with practicable solutions, and with the ability for consumers to have choice. It is highly undesirable for there to be potential for widespread litigation, with the time, cost and uncertainty involved for all those taking or defending legal cases. 35. The remit of the Commission’s sub-group on liability has been: To explore issues of liability in agriculture and the environment relating to GMOs. To consider whether the existing liability regime is sufficient, to consider whether it needs revision, and to consider whether there are other better ways of addressing potential issues raised. 36. As a Royal Commission Report from New Zealand reported: “ Solutions to the problem may appear simple enough at one level: there appears to be general agreement that the polluter should pay, for example, but how this response is to be translated into an effective practical liability regime raises problems[6].” 37. This report does not focus primarily on damage to human health… NB Outline extent to which health (including allergies and toxicity) is covered in the report… NB Need also to discuss scope of study eg animals/ fish/ insects 38. Options for Government include continuing within the current general framework for establishing liability, or developing a specific system to deal with conditions arising from any future commercialisation of genetically modified crops. This report draws out conclusions and recommendations to Government which are provisional ones, so that the Commission’s study of liability can make a contribution to the GM public debate. 39. The Commission’s liability working group has had a series of discussions with a wide range of people.[7] These have included farmers, lawyers, insurers, plant breeders, the biotechnology industry, a social researcher, environmental NGOs and the European Commission. The group developed a range of scenarios, in order to work through and test out some consequences of what might happen under current liability provisions, and consulted widely about them. The Commission is most grateful to those who took the time and trouble to respond, and Commission Members discussed a paper summarising the responses in December 2002. The consultation paper and covering letter of 30 September 2002 are at Annex [a], together with the summary (AEBC/02/17 Annex A). The most consistent theme from responses was that the scenarios described were not unique to GM crops – they could equally apply to conventional breeding and other non-GM crop technologies. A number of the issues raised in the scenarios would be covered in the regulatory process, in risk assessment. Responses differed substantially, however, in assessment of what this would mean for liability and other provisions, and for the possible commercialisation of GM crops. 40. [NB Describe the purposes and outcomes of prospective April 2003 stakeholder meeting. The emerging conclusions and recommendations will be discussed with a wide range of stakeholders, in order to gain further insights into the subject of liability and options for the future, before the Commission comes to its view.] Structure of the
report. 41.
This report considers what liability is for, how it can apply in practice
and what are its limits. Since
liability alone cannot deal with all issues, the report considers the limits to
liability regimes: what they can and cannot do.
A useful starting point is to identify what should be protected, then to
consider how to do so, and then to consider other potential means of redress.
A staged focus for AEBC has been: · identifying legal gaps; · considering whether these gaps suggest that the law of tort needs changing in the light of the possible commercialisation of GM crops; · identifying the added value which legal liability changes would bring; · considering other means of redress. 42. This report considers environmental and economic aspects of possible loss and liability separately from each other for the most part. This is because: · the issues raised are distinct between economic aspects and environmental ones, · the legislative framework is different, and · possible ways forward for liability are also distinctive. CHAPTER 2: SUMMARY OF
CONCLUSIONS AND RECOMMENDATIONS To be drafted when report is finalised CHAPTER 3: FUNCTIONS OF
A LIABILITY REGIME: What legal liability is, and its purpose alongside
regulation Liability 43. What does liability mean? What function in society does legal liability fulfil? How does it currently regulate activity in the countryside? Are GMO liability issues similar to the current range of agricultural liability issues between neighbours and sources of potential damage such as spray drift, poisoning of bees, existence of sensitive farming forms - like mink - alongside others? These are some of the questions to consider. 44. A liability regime defines who is responsible, for what activities, to what extent, in what circumstances, for what length of time, and how that is enforced. 45. The main purpose of a liability regime is to apportion the risks of an activity and determine where the responsibility should lie in a range of circumstances – between, for example consumers, taxpayers, entrepreneurs and industry. Further purposes of a liability regime are to enhance producers’ and operators’ levels of precaution, to reinforce regulatory controls, and provide a legal mechanism for preventing the occurrence of damage, or if that failed, for remediating it if possible and compensating those whose interests had been damaged. A liability regime exists alongside wider provisions for regulation and management. 46. Liability rules are limited in their function and in their effects. They can, however, help in establishing operating principles. One of these is where property rights belong – outcomes of liability questions between neighbours will depend on which neighbour has the property rights. 47.
The
practical effects of liability provisions depend on the burden and standard of
proof. The highest threshold would
be absolute liability, with no defences. [NB
Add ref to later para to explain this]
However, it is common in existing liability rules to require the claimant
to prove also that the type of damage had been foreseeable when the action
complained of occurred. 48. Limitations on conventional liability regimes stem from practical aspects of implementation, particularly of · cost, · complexity in proving cases, · requirements set for burdens of proof · ability to pay: their operating effectiveness may depend for example on whether there is a fund or indemnity which underpins them. 49.
Assessing
the need for a liability regime involves considering the social cost of a
liability regime or of its lack. For
example, the state may end up as remediator of last resort unless specific
provisions are made. When there is
no way to attribute costs or causation, general taxation provides a fall back[8].
The UK treats the state as the custodian of the un-owned environment.
50.
In
practical terms, if the person identified as liable did not have funds to pay,
and since more than one person might have contributed to causing damage, the
chain of liability would be relevant. There
are some parallels with other regulated industries, such as water and silage
effluent. Existence of liability
provisions does not in itself provide a solution, they also have to work well in
practice, as problems in the oil industry suggest.
{NB add ref to later discussion of Tilbury case]
Relationship between
regulation and liability 51. It is important to put liability provisions in the context of existing regulations: how the product is regulated in the laboratory (in contained use), during field trials (for Part B regulatory consent) and on the market (for Part C commercial growing consent). 52. Regulations are secondary legislation, made by Government, which implement the aims of Government policy as set out in primary legislation - Acts of Parliament - and in European Union Directives. The commercial release of GM crops is governed primarily by European Community Directive 2001/18, which is implemented by regulations in the UK[9]. 53. Regulations are a form of administrative law, and they interact in important ways with the common law. The extent to which requirements set out as part of a consent to grow GM crops commercially – a Part C consent under Directive 2001/18 – might be able to define on whom responsibilities and liability would be placed is important. If consents identified responsibilities, and things subsequently went wrong, there could be a clear pointer as to who was at fault, which would simplify civil legal actions. This could be a generic approach, in the sense that it related to regulated activities, rather than being specific to GMOs. 54. The regulatory approval system – which importantly now has mandatory monitoring of any commercially grown GM crops placed on the market built in to its provisions - has an essential role in reducing the need to invoke liability provisions. Other additional provisions introduced by EC/2001/18 are that Part C commercial growing consents expire 10 years after issue, and there are traceability and labelling requirements for all GMOs placed on the market. 55.
Monitoring
and reflection (adjustment in the light of emerging knowledge), are important
new principles in the regulations, especially where there are concerns about
irreversibility. Monitoring was introduced in 2002 by the provisions of
Directive 2001/18/EC, when it replaced the previous provisions [10]
which were introduced in 1990.
56. The GM Directive and regulations for deliberate release work on the general principle that GMOs can be freely marketed in the European Union once approved. This report considers whether a domestic liability regime raises questions of compatibility with the Directive if it is a direct or indirect restraint on the marketing or use of an approved GMO. 57.
Regulation
and liability perform different functions, with distinct roles. Liability rules do not exist in a vacuum, and it is important
to consider how liability rules relate to other tools. It may be best to achieve a desired outcome in other ways
than - or alongside – a liability regime, for example through regulation to
fit in with other legal rules. In
regulations, GMOs are treated differently from other forms of agriculture, and
the report considers whether a liability regime might be built on the regulatory
base. The AEBC sees an important
distinction – that some things are better dealt with by liability and others
by regulation. [NB Need substantial
examples to follow this through] 58. We have heard that concerns about future, unforeseen, outcomes is a driver for concern among some people.[11] Since regulation is inevitably based on foreseeable aspects, consideration is also needed of whether and if so how to make provisions to deal with unforeseeable outcomes. The AEBC is not aware of specific provisions for unforeseen outcomes in other areas of innovation, such as the pharmaceutical industry. [NB Explain this re compensation claims for new drugs that go wrong.] BSE was an example of an urgent and unforeseen case where Government took on the costs because it was seen as essential to do so. It might be, for example, that some relatively small changes to the liability regime could be sufficient to provide a satisfactory framework for co-existence, in the awareness that if things did go badly wrong in an unforeseen way, the Government would need to step in, and would then need at a later stage to seek any appropriate recovery. Protocols and
guidelines for crop management 59. If threshold levels for tolerance of GM ingredients in non-GM and organic food were to agreed, they may be converted into working protocols on the ground, through industry guidelines – rather than regulations - in order to deliver the required thresholds. Protocols tend to be drawn up in terms of procedures, and they currently exist for example for certified seed and for growing HEAR (high erucic acid oilseed rape) which has to be kept separate throughout the chain, and we have heard that these work effectively[12]. Monitoring and
enforcement 60. Alongside requirements governing the release and use of GMOs, there need to be effective mechanisms for enforcement, to achieve compliance. The AEBC has noted that the New Zealand Government plans legislation to impose a strict civil liability and civil penalties regime in cases where an activity breaches the law.[13] We understand that this approach is used for income tax and VAT in the UK, but has not been adopted generically. In England and Wales there is a Government GM inspectorate which enforces regulations on the release and marketing of genetically modified organisms[14], and provides a mechanism for compliance and enforcement. [NB Describe (1) its powers etc, (2) its role under Directive 2001/18], and (3) position in Scotland and NI]. Harm and damage 61. In liability discussions, the concept of harm is central. What is a measure of harm? What is physical harm? Harm to the environment? And harm to health? How should thresholds be set in relation to GM? If there is harm, what are the remedies? Should threat or perception of damage/harm be included, or should any measures be limited to actual harm? How does economic loss fit in? The ability to provide restitution or remediation of harm are key to the success of any liability regime. 62. What is damage? What losses does liability address? Damage needs to be definable, as it is the key to establishing liability in any regime. If there were commercialisation of GM crops, any figures set for thresholds and separation distances to achieve co-existence could become relevant triggers in any liability regime. This means thresholds could become part of defining when ‘damage’ to a crop were caused. 63.
In
addition to damage directly caused, there is a question of whether diffuse
damage should - or could
- be included. A useful
focus is the nature of damage and whether it is different for GMOs than for
other activities. What is the
relative risk from GMOs compared to risks from other activities?
Should there be different considerations for different GMOs? 64. Damages are not available in negligence actions for ‘pure’ economic loss, but only for losses (pecuniary and non-pecuniary) resulting from harm to persons or property. What amounts to ‘harm’ may sometimes be itself contentious – for example whether the loss of ‘organic’ status for crops that are perfectly sound and capable of being sold on the open market is actionable harm – but once harm has been established, the defendant is liable for all financial losses naturally flowing from it that are not too remote. For example, where an organic farmer’s crop is physically contaminated by GMOs resulting from a neighbour growing GM crops, then he may be able to recover in damages such losses as he suffers from the inability to obtain the organic premium that would otherwise have been available, and maybe even the loss in value of his farm, if it ceases to be suitable for growing organic produce. (It could be however that the courts will not regard either of these as actionable harm, especially if the extent of GM contamination is low.) Conversely, if there has so far been no identifiable contamination, but because of his neighbour’s activities the organic farmer must nevertheless incur additional costs in analysing his crops to establish that they are still GM-free, such costs are pure economic loss that is regarded as a cost of operating a competitive business, and not recoverable[15]. Loss 65. What is loss? There are several types of loss which might give rise to harm, damage and liability, and be relevant to GMOs. For example: ·
Economic loss.
This is a recurrent concern emerging in AEBC and other forums.
An example of economic loss caused by GM crops would be if farmers or
beekeepers became unable to sell their produce for some reason related to the GM
crops. Economic loss could also
apply conversely for GM growers. ·
Impact on the environment - judged
by society to be an adverse impact. An
example would be impacts on habitats or biodiversity eg changes in numbers of
key species. ·
Loss of or damage to property.
An example would be physical damage to farms.
·
Damage caused by defective
products. This is covered by an EC
Directive on product liability[16],
which includes damage to private property but not to the environment.
It imposes strict liability on a producer of defective products for
damage caused by the product. It includes products of the soil such as cereals and sugar
beet (and would include GM crops), and producers include farmers and seed
companies. (The Sale of Goods
Act 1979 and the Consumer Protection Act 1987 includes provision for seeds, as
outlined in Annex A.) These
types of loss or damage could arise from unintended or unauthorised release,
based on a recognition that accidents and misuse do sometimes happen, though
regulation aims to minimise the likelihood.
Sanctions and remedies 66. There are various sources of remedy for such loss or damage. A person will be subject to criminal liability if the sanction for an unlawful act or omission is penal ie a fine or imprisonment. Such a sanction is designed to punish the guilty defendant (and maybe to deter others), but not to provide compensation to anyone who may have been injured as a result of the prohibited act or omission, or otherwise to restore the status quo[17]. Civil liability is essentially the liability of a defendant to compensate a claimant (plaintiff) for the damage he has caused to him personally or to his property, in so far as this can be quantified in money terms, provided the damage was reasonably foreseeable and is not too ‘remote’. Because civil cases are concerned with personal rights, they are not apt to protect broader public interests, such as the unowned environment – criminal and administrative liability regimes must generally be used for this[18]. In the UK what is termed ‘administrative law’ is a system of regulatory powers that have been given by statute to a variety of public and other authorities, whose exercise of them is subject to supervision by the civil courts.[19] Economic and
environmental liability, alongside civil, criminal and administrative liability 67. In this report we frequently refer to economic or environmental liability in general terms, when describing adverse impacts, rather than specifically referring to the frameworks of civil, criminal and administrative liability, which are described in Chapter 6. This is because the Commission’s focus is primarily on the origin of the potential harm and the differing angles from which people see this. For a farmer or someone in business, there is the question of what costs they may potentially be exposed to as a cost of doing business, and for a member of the public there is the question of what could be done to redress a potential future problem. The framework in law for addressing the potential problems then becomes relevant. The Commission’s prime concern is not with criminal liability, which underpins the regulatory system, since criminal liability is mainly about punishing people who break the law, rather than putting the damage right. Given the existing criminal provisions, the focus for AEBC work has been on the potential role of a civil liability regime in reinforcing the underlying provisions, in providing compensation and remediation, and in preventing harm from continuing. For environmental loss and damage, the framework is largely that of civil liability for [….NB describe here]… and of administrative liability, where public authorities administer statute law for the un-owned environment. For economic loss or damage, which affects individuals or groups of people, the framework is civil liability. Similarly, ‘traditional’ damage (such as damage to property or crops, or personal injury,) is primarily governed by civil liability. Product liability comes under the umbrella of the civil law of contract. Issues to be considered 68. The scenarios consultation responses showed that many of the liability issues are not unique to GMOs. NB Give examples. However, they are relevant to GMOs in similar ways as to other sectors of agriculture, and GMO liability issues include:
69. NB Possible commentary here on – inter alia – role of tort law, administrative clean-up provisions, trend away from specific liability regimes for individual products to a general environmental liability regime covering activities with potential to damage the environment. Because of the problems of using conventional liability [NB need examples], there has been a tendency for Governments to develop complementary statutory regimes eg [ National example(s) here?] and a draft European environmental liability Directive is being developed. CHAPTER 4: ECONOMIC
ISSUES AND LIABILITY Economic impacts 70. The Commission has received a considerable range of evidence of concerns about potential economic impacts to other farmers if GM crops are grown commercially. [NB Add references to scenario 4 and responses] This is a key area for the AEBC. In tort law, as discussed above, it is not usually possible to claim for economic loss, so any introduction of economic loss liability provisions for GM crops would be an innovation.
71. We have heard concerns[20] that organic farmers could face the loss of their certification and accreditation. The question whether a use of land to grow GM crops is sensitive or unreasonable is likely to arise in any court case involving and organic and GM farmers. It is not one which the AEBC consider courts would want or should be asked to decide, since it is an area for public policy, and onewhich is at the heart of controversy, based on peoples’ very different perceptions and attitudes to GM technology. [See also para (XX 102)] We have also heard of a specific instance where a farmer decided not to grow a particular crop, to avoid the possibility of the crop being unacceptable by proximity to GM crops[21], and thereby had an economic loss. 72. Farmers are concerned that there could be adverse economic impacts without the ability to recover these, even if there were legal provisions, because for example of the daunting problem of evidence in particular being able to prove to a court that there was a clear cause and a direct link to a specific offending GMO[22]. 73. In briefing discussions, the liability group heard that in looking at economic issues concerning GM and organic farming, much hinges on the accreditation rules[23]. Also that these are related in indirect ways to consumer preference and trade association decisions, but it is difficult to assess the strength of the linkage. The conflict between a GM farmer and an organic farmer can be conceived of as a problem concerning the use of someone else’s property. It is useful also to consider the situation in reverse – that organic farmers could be thought of as using their neighbour’s land in a specific sense, of requiring a cordon sanitaire around the organic farm. Using the concept of reciprocity, namely confronting each side with the consequence of the rule it wants to impose on the other side, could be an interesting way of encouraging dialogue, though not necessarily of predicting outcomes.[24] 74. A High Court judgement in 2002 underlines the difficulties of including economic losses in civil liability schemes. It held that indirect economic losses from oil pollution are not recoverable under the statutory oil industry compensation scheme. The judgement follows the reasoning of the Scottish Court of session in the 1999 Landcatch case, which arose out of the Braer oil spill[25]. The ruling meant that a shellfish processing company could not recover their economic losses because they had no direct economic interest in the contaminated waters, while the fishermen had suffered direct loss and probably could recover. The claimants had argued that economic loss in principle was recoverable, and that since the escape of the oil was the effective cause of the loss in profit and was clearly foreseeable, they were entitled to recover. There is a statutory regime for liability for marine oil pollution[26], which defines damage as including loss, and does not distinguish between physical and economic loss. The decision by the court is in essence a policy decision, to impose limits on the extent of liabilities, particularly for economic losses. There might be analogies between the fishermen and beekeepers or organic growers, if they suffered economic loss related to GM crops. Co-existence 75. The Commission takes as a vital and underlying theme of co-existence and tolerance. In our view there is no alternative in this country’s agriculture to finding rules and principles for co-existence. This would in fact apply even if there were no GM crop commercialisation in the UK, because of agricultural imports. There is a necessity of give and take to maintain good relationships in the countryside. 76. In the Commission’s view, it is essential to resolve the question of co-existence between all farming types: organic, GM and conventional, and the issue becomes how to secure the co-existence in a pragmatic way. This almost certainly involves national discussions for agreeing and setting thresholds. To achieve co-existence, the Commission does not underestimate the hard negotiation needed between the parties to secure agreement over threshold levels. These would be very important, and there needs to be a structure to set appropriate thresholds. 77. The Commission’s report on consumer choice will take into account a wide range of different issues, and will deal in more detail with aspects of co-existence, while this report on liability covers the general principles, factors influencing levels to be set, and consequences of setting them at different levels, rather than attempting to recommend specific threshold figures. 78. The Commission considers that a workable threshold is a basic need for having a desirable outcome, and notes that a completely zero threshold is both incapable of being measured and is unrealistic. (There might need to be different levels and rules for imported and in-country adventitious presence, and they might need different relationships with the regulatory system.) Different thresholds are likely to be needed and appropriate for different crops. Achieving co-existence is not a new concept, and an example from current non-GM cultivation, where crops have to be kept separate at all stages is high erucic acid oilseed rape (NB describe: used for… but poisonous in…) (HEAR), which has to be kept separate from other types of oilseed rape and from other crops. 79. The first priority is to set rules for co-existence. The function of economic liability provisions, and their enforcement, would be to provide a secondary back-up. 80. The Commission has cautious optimism that some of the problems of co-existence between different types of farming may be more apparent than real, and feels there might be a tendency for over-concern, particularly in relation to organic farming in the immediate short term. The AEBC recognise, however, that indeed it may be not possible to grow certain varieties of organic/ conventional / GM crops in certain circumstances alongside each other - we do not pre-judge this. 81. The liability group considered the GM crops that are likely and unlikely to be in contention for commercial growing in the UK. A substantial proportion of organic farming is based on grassland management, and in that context we are re-assured that there is unlikely to be a problem of GM grasses being grown. This is because we understand there the UK’s Advisory Committee on Releases to the Environment (ACRE) has made it clear that it would advise against general release of any genetically modified native species[27]. This would rule out GM grass and clover in the UK, at least in the foreseeable future, because of concerns about geneflow from outbreeding. 82. Issues over growing of oil seed rape, sugar beet and maize look potentially feasible to sort out in practice at a local level. Currently there is little or no organic oilseed rape being grown in the UK and, therefore, it should be possible to avoid contamination when it does exist. However, if organic growing increases, the problems would do likewise. Similarly, organic sugar is only grown on a small scale and it will be possible to ensure removal of bolters to prevent cross-contamination. Since British Sugar will not accept GM sugar beet at the present time, only GM fodder beet is likely to be grown. The potential for gene flow from maize is lower than for sugar beet and oilseed rape and should be manageable for organic growers in the short term. However, conventional non-GM growers will face much more immediate problems particularly from GM oilseed rape if it is grown on any scale. As above, conventional sugar beet growers will be protected by British Sugar’s market based decision. 83. Of future potential GM crops, wheat pollen travels only a few metres, barley a little further. Potatoes may be another candidate for introduction and seem manageable in terms of cross-pollination because cross pollination is limited. Potential problems arise mostly from seed mixing, and tubers remaining in the soil, rather than pollen transfer. These are issues which also need to be addressed in any co-existence regime.] 84. The Commission’s view is that ‘zoning’ - to grow specific crops in specific areas – is unlikely to be viable as a way forward. Reasons for this are that it seems impracticable and undesirable, primarily for social policy reasons eg conflicting with broad principles of freedom to farm, and also not being in line with provisions in Part C consents for GM crop release. This is an aspect that the Commission’s consumer choice report will consider further. | |||||||||||||||||||||||||||||||||||||||||||||||
