The Environmental Damage (Prevention and Remediation) Regulations 2009 came into force in England on 1 March 2009. The new regulations supplement existing legislation and are concerned with the prevention, limitation and remediation (clean up) of serious cases of environmental damage to land, water, protected species and to natural habitats. The Regulations implement the Environmental Liability Directive and aim to hold those whose activities have caused environmental damage after 1 March 2009 financially liable for the remediation.

 What do the Regulations say?

Under the new Regulations, if you believe there is an imminent threat of environmental damage then you must take steps to prevent it. Unless the threat is then eliminated you must notify all relevant details to the enforcing authority. Where the environmental damage has occurred then you must without delay take steps to prevent further damage and notify the relevant authority. The obligation to notify is a new duty imposed by the Regulations. The notification should include contact details, the date and time that the threat or damage was discovered, a grid reference of the location, a description of the activity and the scale of the damage, details of any potential impacts and the health and safety precautions required.

If the authority, most likely the Environment Agency, establishes that there is damage that comes under the Regulations, then you will have to submit a proposal of how you intend to remedy it. In respect of damage to species and habitats and to the water environment, there is an obligation to restore the damaged site. For contamination of soil, the risks that the contamination has caused have to be removed. Once aware, it is likely the authority would serve a remediation notice specifying what remediation is required within a particular timescale. The Regulations grant enforcing authorities extensive powers to order the remediation of environmental damage, at the offending party’s cost. If you fail to comply with a notice specifying steps required to prevent damage then an enforcing authority may carry out any reasonable works and claim reimbursement. If a number of organisations are responsible for the damage, the enforcing authority is entitled to pursue just one of them, leaving the organisation to seek recovery from others.

Failing to make a required notification is a criminal offence and can result in a fine of up to £5,000 and/or up to 3 months imprisonment if convicted in the Magistrates Court, or an unlimited fine and up to 2 years imprisonment if convicted in the Crown Court.

The Regulations are accompanied by detailed guidance which, among other things, includes a number of interesting and useful case studies.

Who will be affected by the Regulations?

The Regulations will apply to operators of commercial activity, whether public or private and regardless of if they are for profit. The sectors that are most likely to be affected will obviously include operations that are of an industrial nature or involve waste management or transportation of dangerous substances. It would be advisable for those businesses who may be affected by these Regulations to consider measures they can adopt in order to mitigate against liabilities that may arise and to make sure they have appropriate risk management systems in place to identify and notify threats of environmental damage or damage that has occurred.

It should be noted that the Regulations do not automatically apply to all economic activities. Some of the activities which are exempt from the Regulations include, activities where the sole purpose is to protect from natural disasters or the main purpose is to serve national defence or international security, and commercial sea fishing if all legislation relating to that is complied with. However if you intend to cause environmental damage to a protected species, natural habitat or a Site of Special Scientific Interest or are negligent as to whether environmental damage would be caused, then you will be subject to the Regulations no matter what economic activity you are performing.

Other than tightening up their environmental risk management, can organisations do anything to protect themselves?

The Regulations do not require mandatory insurance in relation to the liability they impose, but the UK is required by the Directive to encourage the development of financial instruments and markets aimed at enabling organisations to cover their liabilities. Even without this encouragement, insurers would doubtless be considering whether to offer new coverage options or expand existing ones in relation to the specific liabilities under the Regulations. While there is already a well developed, specialist environmental insurance market, traditional public liability polices are unlikely to cover many of the new liabilities, particularly for example if pollution has taken place in a gradual way, so organisations with exposure in this area should be reviewing their cover. Obviously, cover cannot be obtained for criminal sanctions such as fines and imprisonment. Depending on how rigorously the authorities implement their new powers under the Regulations, which may in turn depend on how well the authorities are resourced, there could well be an increase in the likelihood and regularity of claims under existing environmental cover as well as under newer products.