New Criminal Directive: an opportunity for environmental leadership? | Portugal

Directive (EU) 2024/1203 of the European Parliament and of the Council of April 11, 2024, on the protection of the environment through criminal law (“Directive (EU) 2024/1203”), was published on April 30. It replaces Directives 2008/99/EC and 2009/123/EC.

Member States have two years to transpose Directive (EU) 2024/1203. However, companies can take the initiative to use it as a guide to design and implement their environmental compliance and due diligence policies. This policy should not only ensure regulatory compliance but also anticipate and prevent criminal risks and place the company at the forefront of environmental performance.

When assessing the advantages of developing and implementing compliance policies, identifying and evaluating environmental risks is essential for sustainability governance. This includes complying with the new regulations on sustainability reporting (see Legal Update | Corporate Sustainability Reporting: CSRD Directive) and fulfilling the obligations arising from the Corporate Sustainability Due Diligence Proposal (see Post | Progress on the Due Diligence Directive).

Directive (EU) 2024/1203 objectives 

The directive aims to: 

• strengthen the use of criminal law as a deterrent against environmentally harmful behavior;
• standardize common definitions of environmental offenses;
• expand the number of behaviors classified as environmental offenses; and
• establish effective, dissuasive and proportionate criminal sanctions for both individuals and companies.

Offenses

Directive (EU) 2024/1203 identifies up to 20 behaviors that qualify as criminal offenses under European Union (“EU”) environmental legislation. These offenses are considered serious infringements and are committed intentionally or, in some cases, with gross negligence.

The new categories of offenses include:

• illegal ship recycling;
• illegal capture of groundwater or surface water;
• serious infringements of EU legislation on chemical products;
• serious infringements related to the treatment of fluorinated greenhouse gases;
• serious infringements of legislation on invasive exotic species of interest to the EU;
• unauthorized execution of projects that are likely to cause substantial harm to the environment;
• introduction or marketing of goods or products that contravene the provisions of the regulation on the marketing of certain raw materials and products associated with deforestation and forest degradation; and
• discharge of polluting substances by ships.

Crimes such as pollution or harm to nature are already provided for in the Portuguese Criminal Code and are attributable to companies. It is likely that these will be added to—or combined with—those listed above.

Sanctions regime

For individuals, the offenses carry aggravated prison sentences in many cases, and the most serious cases can result in a maximum prison sentence of not less than 10 years. For companies, the maximum fine that Member States can impose cannot be less than (i) 3% or 5% of the company’s total worldwide turnover, or (ii) €24 million and €40 million, depending on the offense committed.

In addition to the above prison sentences and fines, Directive (EU) 2024/1203 also provides for the imposition of other sanctions or ancillary measures on both individuals and companies. These include the obligation to restore the environment within a certain period or to compensate for damages when the harm is irreversible; exclusion from access to public funding, including public tenders, grants, concessions, and licenses; or the withdrawal of the authorizations required to carry out the activities that led to the offenses in question. Among the ancillary measures, Directive (EU) 2024/1203 provides for the obligation for companies to implement due diligence programs to improve compliance with environmental rules.

The transposition of Directive (EU) 2024/1203 will present an additional challenge and opportunity for Portuguese companies. They will need to equip themselves with the necessary means and compliance programs to avoid committing these offenses and, in turn, become more attractive to the various stakeholders.