New regulations implementing the ‘polluter pays’ principle for environmental damage come into force in England on 1st March 2009, nearly two years after an EU Directive’s original deadline.
An insurance law expert has warned that many businesses remain unaware of their potential liabilities under the new regime. Those that find themselves caught are unlikely to be covered by conventional public liability insurance, he said.
The Environmental Liability Directive was due to be made law in all member states by 30th April 2007. England has now belatedly complied by issuing the Environmental Damage Regulations 2009. Separate measures will be introduced in Scotland, Wales and Northern Ireland.
Under the Regulations, those responsible for carrying out almost any economic activity will be held financially liable for remedying or preventing environmental damage caused by that activity to water, land and biodiversity (protected species and natural habitats or sites of special scientific interest).
The rules impose a pro-active duty on operators to notify the relevant authorities (the Environment Agency or the local authority in most cases) when environmental damage has occurred or is threatened. Interested parties, such as environmental groups, will also be able to notify suspected damage.
The new regime will not only affect businesses but also many charitable and public sector organisations whose operations fall within the very broad definition of “economic activities”. Purely domestic or recreational activities, however, are not included.
Operators will be required to take steps to prevent an imminent threat of environmental damage, to prevent further damage happening and to “remediate” any damage that has already occurred by returning the environment to the condition it was in, or, in the case of land, to remove the risk of human health being adversely affected.
Where it is not possible to restore the site completely, operators may be required to carry out “complementary remediation” comprising additional measures, possibly at an alternative, equivalent location. They could also be liable to pay “compensatory remediation” for the loss of environmental resources and environmental services pending recovery.
In many cases, the operator will need to have been at fault for liability to apply. But for operators carrying out a range of specified activities deemed particularly hazardous, such as agriculture or waste management, liability will be strict.
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