Environmental Damage (Prevention and Remediation) Regulations 2009

01/04/2009

By Douglas Skilton, Associate in Dispute Resolution.

Scope and Impact of the Regulations

Directors and senior managers need to be aware of the impact the Environmental Damage (Prevention and Remediation) Regulations 2009 ("the Regulations") will have on their businesses. The Regulations came into force on 1 March 2009 and apply in priority to existing environmental legislation.

The Regulations are based on ‘the polluter pays' principle. They extend the scope of environmental liability for businesses by requiring ‘operators' to meet the cost of preventing and repairing environmental damage.

An 'operator' is defined by the Regulations as a company or individual which operates or controls an economic activity (whether or not the activity is carried out for profit). The Regulations apply to environmental damage to land, water, species or habitats, and to sites of special scientific importance.

For operators carrying out 'designated activities' liability for environmental damage to land and water is strict. This means that an operator will be automatically liable for any environmental damage stemming from such activities, irrespective of fault or an intention to have breached the Regulations.

The list of 'designated activities' includes waste management operations (including the collection, management and treatment of waste), activities which require an environmental permit, discharges into waters, water abstraction or impoundment, manufacturing or using dangerous substances, transporting dangerous or polluting goods, and using and releasing genetically modified organisms.

Operators of any other activities can also be liable for environmental damage to species and habitats, but only if they intend to cause damage or are negligent.

Under the Regulations operators are required to notify the authorities of any environmental damage that has occurred, and where there is an imminent threat of environmental damage. They must take all practicable steps to control damage which is occurring, or in the case of an imminent threat, to prevent any damage from happening in the first place.

Once notified, the enforcing authority must determine whether there has actually been any environmental damage and decide on the necessary remedial measures in consultation with the operator. A Remediation Notice will then be served by the authority requiring the operator to take the action specified in the Notice. The grounds for appealing a Remediation Notice are limited in scope.

In the case of environmental damage to water or to species and habitats the Regulations introduce a broad approach to remediation. In addition to the primary remediation of cleaning up a contaminated site, operators can be required to make complimentary and compensatory remediation. This could leave an operator liable to pay for the clean up of an alternative site if the damaged site cannot be fully restored, or providing alternative natural resources to compensate for the time it takes to remediate the damaged site.

The Regulations also create a number of offences which are punishable by a fine of up to £5,000 and/or up to three months in prison. These include a failure to notify the authorities about environmental damage or the imminence of it, failing to take immediate action to control or prevent environmental damage from occurring, and failing to comply with a Remediation Notice. Directors and senior managers can be prosecuted personally where an offence is committed with their consent, connivance or neglect.

Practical Steps

Businesses caught by the Regulations need to consider what practical steps they can take to minimise their potential liabilities. The most significant change in the law centres around the reporting and prevention obligations. This inevitably brings into focus management systems and the policies and procedures in place for dealing with environmental incidents.

The starting point for most businesses will be to undertake risk assessments to establish the extent of the risk to the environment posed by their operations. This will inform the control measures that should be put in place, and the circumstances in which the authorities must be notified.

Businesses should follow up on the results of the risk assessments with emergency plans to deal with any environmental incidents. Internal monitoring and reporting systems will be crucial to help identify the imminent threat of environmental damage or when actual damage has occurred, so that the emergency plans can be implemented and the authorities notified.

A further factor to bear in mind is that the Regulations require operators to remediate environmental damage to water or to species and habitats to the condition before the damage occurred. For this reason some businesses may decide to keep a record of the condition of the environment surrounding their operations.

The duty to notify under the Regulations is also likely to act as a catalyst for investigations and possible prosecutions under other environmental legislation, even if environmental damage has not actually occurred under the Regulations. It is therefore important for businesses to be aware of their responsibilities under the existing environmental regime.

Finally, businesses would be well advised to check the extent of their insurance to see whether the remediation of environmental damage under the Regulations is covered.