New 'polluter pays' regulations extend the scope of environmental liabilities for construction companies
01/09/2009
By Chris Kirby-Turner, Solicitor in Construction & Engineering.
Construction companies need to be aware of the Environmental Damage (Prevention and Remediation) Regulations 2009 ('the regulations'), which came into force on 1 March 2009.
The regulations are based on the 'polluter pays' principle. They extend the scope of environmental liability by requiring businesses to meet the cost of preventing and repairing environmental damage. The regulations apply to environmental damage to land, water, species or habitats, and to sites of special scientific importance.
For businesses carrying out 'designated activities' liability for environmental damage to land and water is strict. This means that liability will arise automatically 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
- 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.
Businesses caught by the regulations 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 the case of environmental damage to water or to species and habitats, businesses can now be required to make complimentary and compensatory remediation in addition to the primary remediation of cleaning up a contaminated site. This could leave a business 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
- failing to carry out remediation.
Directors and senior managers can be prosecuted personally where an offence is committed with their consent, connivance or neglect.
Practical steps
Construction companies in particular 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. 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.
- Consider keeping a record of the condition of the environment surrounding your operations.
- Check the extent of insurance to see whether the remediation of environmental damage under the regulations is covered.