What You Need to Know
- Key takeaway #1New EU Water Legislation would require pharma and cosmetic companies to pay water pollution costs.
- Key takeaway #2Pharma and cosmetic companies may be on the hook for significant costs in the future.
- Key takeaway #3New EU Water Legislation would also make it easier for EU citizens to sue companies for damage to health.
New EU legislation is about to be adopted which will require pharmaceutical and cosmetics companies to pay water pollution costs. More specifically, it will oblige those companies to pay for the clean-up and removal of micropollutants from effluent water. In addition, it will increase the risk of pharmaceutical and other companies facing legal damage-to-health claims. The new EU legislation – called the (Recast) Urban Wastewater Treatment Directive (“New UWWTD”) – is expected to be formally adopted in Q3/4 of this year.
Footing the bill for water pollution costs
If adopted in its current form as expected, the New UWWTD would establish a scheme whereby producers of medicinal and cosmetic products which place products on the EU/EEA market would have to pay: (1) for at least 80% of the costs of ‘quaternary treatment’ to remove micropollutants from wastewater; and (2) for the costs of gathering and verifying data on their products and other costs – such as, for example, monitoring data on micropollutants and microplastics. The precise amount each pharmaceutical or cosmetic company would need to pay, is currently unclear. The New UWWTD scheme would require individual pharmaceutical and personal care companies to pay a share of the overall water pollution costs. An individual company would be required to pay a portion of the overall cost based on: (1) the quantities of a relevant substance in the products a company places on the market; and (2) and the hazardousness of those substances. Where a company can prove that it does not place a particular substance on the market above 1 metric tonne per year, or that the substance rapidly biodegrades, or do not generate micropollutants in wastewater – the company would not, per se, be required to pay. EU Member States would be required to set-up ‘Producer Responsibility Organisations’ (“PROs”) whereby producer companies would provide the PRO information on their products each year. Details on how payment schemes and mechanisms operate in practice would be decided by EU Member States.
Requiring pharmaceutical and personal care product companies to pay water pollution costs like this is a significant new legal development. The New UWWTD aims to introduce these requirements on the basis of the Extended Producer Responsibility (“EPR”) and polluter-pays EU legal principles, as codified under Article 191 TFEU and Article 8 Waste Framework Directive.
Increased exposure to liability claims
In addition to the EPR provisions, the New UWWTD introduces provisions on claim / compensation mechanisms and access to justice provisions. Under those provisions, Member States are required to ensure that individuals can claim compensation for damage to health “from the relevant natural or legal person”. NGOs are allowed to represent individuals affected in these cases. Member States are required to inform the public of their right to claim compensation for damage.
General context
The current UWWTD entered into force more than 30 years ago (1991). It, along with other water legislation, underwent a Fitness Check in 2019. On 26 October 2022 the Commission tabled its proposal for a recast UWWTD. On 16 October 2023, the Council adopted its general approach. On 29 January 2024, the Parliament and Council reached provisional agreement. On 10 April 2024 the agreed text was formally adopted by Parliament.
The UWWTD is being updated, in part, to align the UWWTD with the European Green Deal; including the realization of the Green Deal objectives concerning net zero pollution, energy/climate neutrality, circularity and resource-efficiency, and biodiversity loss. Since the adoption of the current UWWTD, generally speaking: urban areas have grown in size and number; urban populations are increasingly aged and more reliant on pharmaceutical products; concerns regarding antimicrobial resistance and COVID-19 and its variants etc have grown; and wastewater and sewer overflows are increasingly a problem due to inclement weather conditions, floods, and climate change. The Commission has cited ‘access to sanitation’ as an issue preventing full implementation of UN SDG 6 “Ensure availability and sustainable management of water and sanitation for all”.
For further information, please contact:
Kristof Roox, Partner, Crowell & Moring
kroox@crowell.com
