The Polluter Pays!


04 April, 2006

There is no doubt that environmental protection is currently attracting a massive amount of media coverage and that this is slowly feeding through into government policy. It is noticeable that the main parties are now trying to 'out green' each other. In practical terms measures such as the increase in car tax for 'gas guzzlers' in the latest budget is trumpeted as being a 'green' measure.

That measure is only the tip of an ever increasing iceberg of regulation entailing potential civil and criminal liabilities for business, as well as direct and indirect costs. There are also practical environmental issues for business, such as the ever increasing price of energy and therefore the need to conserve power.

In a global economy, the extent of environmental regulation often translates into costs to industry. Those countries where regulation is high can be seen as 'uncompetitive' and do not attract investment. There is no level playing field as some countries either do not have such regulations, or do not enforce them. That in turn means more regulations have to be made to test products imported from those countries to ensure there have been no 'short cuts'. A prime example is the recent recall of a bracelet made in China given away with Reebok shoes which was found to contain high levels of lead and therefore unsuitable for a product aimed at children. Still, however, the temptation is there in developing economies to take short cuts to maximise profit.

In this country the legacy of our industrial past is returning to haunt us and to impose costs on business. The provisions of the EU Environmental Liability Directive must be transposed into National Law by 30 April 2007. The Directive is based on the 'polluter pays' principle and covers the following three categories of environmental damage:

  • damage to species and natural habitats protected under the 1992 Habitats Directive and the 1979 Wild Birds Directive ;
  • damage to waters covered by the 2000 Water Framework Directive and
  • land contamination which creates a significant risk of harming human health.

The provisions of the Environmental Protection Act 1990 (EPA) came into force on 1 April 2000. This followed from a consultation document called 'Paying for our past', a very appropriate title. One of the most frightening sounds a small business man is ever likely to hear is the 'plop' of the envelope onto his mat telling him he has been designated under the EPA as the appropriate person to pay for the clean up of contaminated land.

Environmental regulation is here to stay, and the real impact on business in terms of cost of compliance, and more importantly the cost of non compliance, is only going to increase.

Robin Stephens, Commercial Litigation Department

For further information on Environmental Legislation contact Robin Stephens on Tel: 01254 222399 or email Robin Stephens


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