Environmental liability: MEPs back tight deadlines on compulsory insurance for companies

The Parliament has voted in second reading on
the draft directive on environmental liability. Amendments on
compulsory insurance and shipowners’ liability make a
conciliation procedure likely.

During their second reading on 16 December 2003, MEPs
adopted only four amendments on the Council’s common
position on environmental liability. The majority of the
amendments adopted within the Legal Affairs Committee at
the beginning of this month did not go through (See
December 2003


MEPs want to oblige the Commission to submit proposals
within 5 years for a harmonised compulsory financial
guarantee for water and soil damage if no appropriate
instruments or markets for insurance have been established.
Species and natural habitats would be covered in a further
two years by this compulsory financial guarantee.

They have also introduced a way to oblige ship operators
to take responsibility for damage caused to coastlines by
oil spills or other accidents.


During the EP debate preceding the
Commissioner Frits Bolkestein

said: "It would be particularly difficult to adopt rules
mandating financial security when the economic operators
most knowledgeable and economically interested in
developing such products have been unable to do so. The
Commission is therefore not in a position to support the
amendment on financial security".

Dutch MEP and Vice-President of the Parliament's
Environment Committee Alex de Roo

, said: "I am glad that the directive will now have a
review five years after it comes into force rather than
the eight years wanted by the Council. Mandatory
financial insurance against environmental damage is also
now back on the EU legislative agenda."

Environmental groups

expressed their disappointment that the European
Parliament failed to improve the new Environmental
Liability Directive. Sandra Jen of WWF said :"It a real
shame that the European Parliament failed (...) to
support the adoption of a regime that would create real
incentives for operators to avoid environmental damage.
We now look to Member States to take the flexibility
offered to them by the Directive and bring foward robust
national laws to make the polluter pay."


oppose a compulsory insurance as it could create
difficulties for many businesses and insurance is not
prepared to cover risks that it cannot yet


The draft directive on environmental
liability will now go through to its second reading in
the Council.

It is expected that the amendments on
mandatory insurance and shipowner's liability will go
through the conciliation procedure.


The draft directive on environmental liability is based on
the 'polluter pays' principle (i.e businesses that cause
environmental damage will be held financially liable for
any measures needed to clean up the problem). The proposal
focuses on damage to biodiversity, water pollution and land
contamination that threatens human health.


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