New EU environmental criminal law: Significant liability risks for managing directors – How to protect yourself and your company

The tightening of regulations in detail: What can you expect?

German lawmakers are not only implementing the EU requirements, but also plan to tighten them in key areas. The three biggest risk areas for companies and for managing directors personally are:

1. Drastically increased penalties: a 400% jump

Probably the most radical element of the draft is the planned quadrupling of the maximum amount for corporate fines from €10 million to €40 million. Alternatively, the fine can amount to a certain percentage of the company's global annual turnover. This massive increase sends a clear signal: environmental crimes are to become so expensive for companies that they threaten their very existence.

2. New criminal offense: The unclear protection of the "ecosystem"

In future, the "ecosystem" is to be included as an independent protected asset in various criminal offenses. What sounds abstract creates considerable legal uncertainty in practice. The definition is vague and opens the door to investigations into circumstances that have not previously been the focus of criminal law. Any interference with ecological relationships could potentially give rise to initial suspicion of a criminal offense.

3. Expansion of the list of criminal offenses

The EU directive significantly expands the list of environmental crimes. These now include illegal trade in timber, the marketing of environmentally harmful products, and serious violations in chemical or waste management. The German draft consistently implements this and thus closes further potential loopholes in criminal liability.

What this means for you as a managing director: Focus on personal liability

The days when environmental violations were primarily dismissed as a matter for the company are finally over. The new regulations and the already apparent prosecution practices are aimed directly at the personal responsibility of company management.

• Increased investigative pressure: Specialized public prosecutors and criminal investigation departments are increasingly targeting environmental crime. Medium-sized manufacturing companies in particular are the focus of attention.
• Danger due to negligence: No intentional act is required. Even the accusation of not adequately monitoring operational processes, ignoring risks in the supply chain, or overlooking warning signals from employees can result in personal prosecution for negligent behavior.
• The end of the "organizational excuse": It is becoming increasingly difficult to claim ignorance of specific incidents. Management is expected to establish an effective compliance organization that prevents such violations.

Recommended action: How to become an active and responsible manager now

Passivity is the most dangerous strategy in light of these developments. To best protect your company and yourself, now is the right time to take preventive measures.

1. Environmental Compliance Audit: Conduct a thorough review. Examine your entire production and disposal processes. Are all permits up to date and are their requirements being fully complied with? How do you ensure compliance with regulations along your supply chains?
2. Adapt risk management: Your risk management must reflect the new, more stringent criminal law risks. Train managers and responsible employees to raise awareness of the new risks.
3. Implementation of an emergency plan (dawn raid): What happens when the investigating authorities arrive at your door? A clearly defined emergency plan is essential. Determine who needs to be informed immediately (management, legal department, external defense attorney), how communication with officials will proceed, and how to ensure that no ill-considered statements are made or evidence compromised.

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