Environmental liability

The last few months have seen significant activity in the European Union on the question of environmental liability. The European Parliament (EP) completed its first reading of the Commission's proposal for a Directive on this topic on 14 May.

Obviously the proposal has potential implications for all in the chemical and allied sectors and the ABPI is following the progress of the proposed legislation.

There were a number of important issues that came out of the EP's deliberations.

First, there is the question of applicability of the permitting and 'state of the art' defences. Under the proposals of the Parliament, these are no longer listed as exceptions to liability, although there are circumstances under which they may be used in mitigation of compensation due where liability is shown.

Second, there has to be a causal link proven between the environmental damage and the acts or failures to act of the operator. The operator would have the right to appeal judgment against him but such an appeal should not delay the taking of remedial action.

Finally, member states would have to take steps to ensure that there is appropriate insurance for operators to cover remedial action required under any legislation. It is suggested that installations covered under IPPC would have three years to arrange such cover. Other activities covered by the Directive would have six years from the date of entry into force of the Directive. Member states may also make derogations from this requirement for low risk activities or, indeed, set a threshold for the necessity for cover.

There is obviously some way to run on this proposal and we will be tracking it closely.