EU Environmental Liability Directive

HC Deb 15 October 2002 vol 390 cc564-5W

Malcolm Bruce

To ask the Secretary of State for Environment, Food and Rural Affairs what assessment has been made of the need for compulsory insurance as part of the EU Environmental Liability Directive regime to give polluters a greater incentive to avoid environmental damage. [72493]

Alun Michael

[holding answer 23 July 2002]The European Commission's draft Directive on Environmental Liability requires Member States to encourage the use by operators of any appropriate insurance or other forms of financial security.

Compulsory insurance is one possible means of financial security and was covered by the Government's public consultation which ended on 24 May 2002, and in the extended partial regulatory impact assessment (COM (02) 17). A mechanism such as this could support both the prevention and remediation aspects of the proposed Directive, with insurers offering policies on the basis of best environmental practice. It would also ensure that a source of funding was available for the remediation of damage, should it occur.

The insurance industry has made it clear that it does not welcome compulsory insurance, but does desire a directive that is clear and workable so that cover can be offered.

Malcolm Bruce

To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the inclusion of the compliance with permit and state of the art exemptions in the EU Environmental Liability Directive. [72494]

Alun Michael

[holding answer 23 July 2002]No specific assessment has been undertaken of the inclusion of the permit and state of the art exceptions. The extended partial regulatory impact assessment submitted to Parliament (COM (02) 17) did consider the implications of removal of the permit exception, to inform the UK negotiating position in preparation for any moves by other Member States to remove it.

This assessment revealed that removal of the permit exception could have two conflicting effects: a damaging effect upon business certainty and the ability of operators to obtain financing, whilst secondly providing an incentive for operators to treat permit conditions as a minimum requirement, and therefore take further precaution in their activities to minimise their risks. By extension, inclusion of the exception could provide shareholders and operators with some confidence, but on the other hand reduce the precautionary effect.

The same considerations may be applied to the exception for compliance with state of the art.