Threat of compulsory "pollution insurance" recedes

UK - Europe's controversial environmental liability proposals look likely to become law around early summer.
calendar icon 18 December 2003
clock icon 3 minute read
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NPA is active on members' behalf in Brussels & White-hall, and with pro-cessors, supermarkets & caterers – fighting for the growth and pros-perity of the UK pig industry.

The new rules, which will require polluters to pay for any damage they cause to biodiversity, originally posed a considerable threat to farmers, particularly intensive livestock producers, but thanks to the European Parliament some of its teeth have been pulled.

Brussels wanted to compel farmers to take out insurance against causing damage to biodiversity. But would such cover be available? And if it were, would it be remotely affordable? NPA has been in no doubt on either point.

In the European Parliament yesterday, a majority of MEPs believed the concept of compulsory insurance was premature for today’s insurance market. In other words, nobody would be willing to underwrite such policies.

Members agreed instead that the way forward was to "encourage" insurers to create "affordable" schemes. But it is important to note the threat of compulsory insurance has not gone away for good. MEPs have agreed the door be left open to introduce, say in five years, a European system of compulsory insurance for damage to soil and water.

There had been an attempt by the centre right EPP group to remove the agricultural industry from the scope of the legislation altogether, but this failed.

Nevertheless pig producers -- particularly those who will be IPPC permit holders -- can take some comfort from the fact that if they employ best practice in their farming, it will be a defence against future charges of causing damage to biodiversity.

This is an important point because it is possible to farm with the utmost responsibility today and only discover in the future, in the light of new information, that a particular practice was damaging and therefore actionable under the polluter pays rules.

Environmentalists are unhappy with the "best practice" defence agreed by the European Parliament. They have protested that this modification proposed by MEPs will exempt polluters from all environmental clean-up costs if they are operating with a permit.

They say this will create loopholes for companies to avoid paying for pollution and will place the financial burden for environmental disasters on the public purse.

Today’s vote marked the second time MEPs have debated the proposed environmental liability rules. If their proposal is now adopted by national governments the law could be finally agreed by next May.

Source: National Pig Association - 17th November 2003

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