Companies operating in Europe that harm the health of
communities or the environment could become liable for huge damages
under new ‘polluter pays’ legislation being planned by the European
Commission.
The proposed legislation, outlined in a new White
Paper on Environmental Liability sent out for consultation until 1
July, would force companies to pay for putting environmental damage
right – whether a pollution incident was directly their fault or not.
The White Paper says that ‘no fault by the polluter is required’ when
damage is caused by a hazardous activity – a caveat that appears to be
aimed particularly at chemical and oil companies. However, it does
allow companies the scope to argue that they should not be liable for
‘acts of God’ or ‘intervention by a third party’.
Liability
will rest with the companies, not their managers, directors or
employees, and lenders not exercising operational control will not be
liable either.
If passed, the legislation will standardise
environmental liability throughout the EU. Environment commissioner
Margot Wallstrom said she expected the introduction of liability for
damage ‘to bring about a change in attitude that should result in an
increased level of prevention and precaution’ by companies.
The law would not allow retrospective claims against companies but
would cover damage to biological diversity as well as harm to health
and property. Compensation paid by the polluter would be spent on
restoration.
The White Paper claims there is little
evidence that the competitiveness of European companies would be
affected by any such law – and that the need for insurance to cover the
new liability might even provide a boost for the insurance industry in
the EU.
The EC’s move on liability has come as the UK Government considers the creation of a new offence of ‘corporate killing’.
Home Office ministers are expected to issue proposals for consultation
shortly on a change to the law that would make it easier to prosecute
company directors for management failures that lead to fatal accidents.
The idea, which has been backed in principle by the House of Commons
environment subcommittee and the Law Commission, would toughen up the
law. Company directors may be tried for manslaughter under existing
legislation, but few convictions have resulted.
Corporate
manslaughter cases in UK disasters have either failed or not reached
court. Between 1996 and 1998 no director or manager of a company was
prosecuted for a health and safety offence, despite a total of 500
deaths and 47,000 serious injuries in the UK.
David Bergman,
director of the Centre for Corporate Accountability, said the creation
of the new offence would ‘make it easier for companies to be convicted
for a manslaughter-like offence’ but would be unlikely to land
directors in prison.
