Food manufacturers that damage local wildlife or pollute water near their factories could face tougher legal penalties as new environmental legislation comes into force this month.
The Environmental Liability Directive (ELD), which comes into effect in England on March 1, aims to hold those responsible for causing environmental damage liable for remedying it. It also places a responsibility on those whose activities have caused an imminent threat of damage liable to take preventative action.
The ELD introduces three new concepts: primary remediation, complementary remediation and compensatory remediation. The latter two were "unlikely" to be covered by standard public liability insurance, warned Kevin Considine, environmental policy advisor at engineering and manufacturing trade body EEF.
Primary remediation means 'putting right' environmental damage, and may be covered in part by public liability insurance.
Complementary remediation requires firms to pay to improve or maintain similar natural habitats elsewhere if the habitat they have damaged cannot be fully restored/repaired. This is unlikely to be covered by standard insurance, Considine said.
Finally, compensatory remediation requires firms to compensate society for the time that the damaged habitat is not available for use. This could prove "incredibly hard to quantify", and is "very unlikely" to be covered by public liability policies, said Tony Lennon, European manager, environmental solutions, at insurance firm Chubb. Professor Phil Morgan, a director at Sirius Strategic Environmental Management, said: "Many businesses have little idea of their potential future liabilities under the ELD, nor a good understanding of the environmental damage that could be caused."