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6-Regulation: EU firms fight "blank cheque" eco-liability law

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TITLE:  FEATURE - EU firms fight "blank cheque" eco-liability law
SOURCE: Reuters, by Robin Pomeroy
DATE:   Nov 14, 2002

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FEATURE - EU firms fight "blank cheque" eco-liability law 

BRUSSELS - European companies are fighting new EU rules to make them pay for
damaging the environment, under a draft liability law they say would force
them to write a blank cheque to nature.

The liability directive is one of three of major new European Union
environmental policy proposals that industry is desperate to soften, along with a
plan to cap "greenhouse gas" emissions and new rules on testing chemicals. Under
the proposal, big smokestack industries and firms dealing in waste
management, chemicals and genetically modified organisms (GMOs) would be liable for
incidents that pollute water, air or soil or harm protected natural sites or
species. The European Commission reckons the new regulations would cost around
1.5 billion euros ($1.48 billion) a year, but industry says the real cost is
incalculable and uninsurable. The law would therefore impose an unbearable
new risk on companies. "We are very worried about open-ended liability for
bio-diversity damage," Erik Berggren of EU employers confederation Unice told
Reuters. "We have simply no idea what risks companies would run when nature is
damaged." Unlike property whose value can be assessed, there is no price tag
on endangered species or landscapes. This could leave firms open to arbitrary
and excessive claims, industry says. Unice wants the law to set a cap on
possible claims.


Environmentalists, who see themselves as proxies for animals and plants that
cannot fight their own battles, have campaigned for the eco-liability rules
for years and will fight any attempts from industry to water them down. They
say that although companies pay damages when their activities harm people and
property, they often escape when the environment is the victim. They point
to cases like Spain's worst ecological disaster, the Donana incident, when a
waste pond from a zinc mine burst, flooding the surrounding area with toxic
chemicals with serious damage to wildlife in a nearby national park. "Is it
fair on the public that it is the state and citizens that have to pay for damage
caused by activities on which companies are making profits?" said Sandra
Jen, liability campaigner at green group WWF. The WWF says the EU bill is
already too weak and allows firms get-out clauses to escape prosecution. It is
urging the European Parliament, which starts debating the bill in November, to
plug what it sees as loopholes. Under the draft published by the Commission
last January, companies could avoid being sued for damage caused by, for
example, accidental chemical spills, if they had complied with environmental
regulations and had a permit to operate. Unfortunately for industry, the European
Parliament member leading the EU assembly's work on the legislation agrees with
the WWF that this so-called "permit defence" should be deleted. "If you
drive a car and kill somebody, you don't have any excuse, you cannot say that the
car was not you pay or your insurance company pays," Greek deputy
Mihail Papayannakis told Reuters.


Such an amendment would ensure the bill covered GMOs, the scientifically
altered crops which some environmentalists say could harbour unknown risks for
nature once released into nature to mix with other plants. Under
Papayannakis's version of the bill, if a GM crop were to do damage to wildlife, the
company responsible would have to pay to rectify the harm, even if scientific
evidence had revealed no such dangers when the organism was tested. If parliament
follows Papayannakis's advice, it will add to a growing body of controls the
EU is imposing on GMOs, to the increasing anger of the United States, which
accuses the bloc of obstructing the market for its agricultural goods. But for
Papayannakis, a member of the leftist party Synaspismos, the issue is clear
- someone should pay to mend damage to nature and that has to be the
polluter. "This is not a moral problem...the question is about a remedy, someone has
to pay." As well as reducing industry's defences, Papayannakis would force
firms to take out insurance or contribute to a clean-up fund similar to one
that already exists at international level to deal with oil spills. With his
proposed amendments, which will be voted on by parliament's environment
committee next month and by the full assembly in February, the bill would have major
implications for all sectors of industry, Papayannakis said. "It is very big.
It changes the habits of proper planning and investment. You have to examine
very well the places you are going to invest, the chance of accidents, the
cost of insurance and the cost of the fund."


Hartmut Meyer       from Nov 11 - Nov 17
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