The impact of direct environmental incidents as well as business insolvency resulting in risk to the environment must be protected against. Ensuring suitable financial provision particularly to cover cases of insolvency, site abandonment and serious environmental incidents is essential to ensuring protection of the environment and public purse. This new IMPEL project for 2016 is to promote better understanding of the availability and suitability of financial tools followed by production of a decision making tool (in 2017), thus ensuring:
- Protection of the environment
- Protection of the public purse
- Implementation of polluter pays principle
- Investment in pollution prevention
In cases where there is either an environmental incident which results in actual/potential harm to the environment or where a company becomes insolvent and can no longer meet its obligations, suitable financial provision can mitigate or prevent an impact on both the environment and/or the public purse. However, where no financial provision has been made there is a risk.
Ensuring suitable financial provisions are most critical where environmental licencing has permitted degradation of the environment on the condition that the degradation will be mitigated at the end of the life of the activity (for example, in landfill restoration) and this is applied successfully in many member states.
However, in the case of insolvency, even where financial provision is made, this may not be available to be called upon when required. Ultimately, lengthy legal battles may still result in the tax payer covering the expense, contrary to the polluter pays principle.
Content in Brief
This project aims to produce a decision making tool supported by good practice case studies and approaches so that regulators and operators will have a better understanding of the availability and suitability of financial tools.
The interaction between company/insolvency law and environmental law is complex and will differ between countries, as will the mechanisms/ products available to secure financial provision. Further, the experience of EPA’s and regulated sectors in applying financial provision mechanisms across members states is likely to be variable.
This is why it is needed to reach far and wide to collate good practice and success stories to inform the initial report.
For further details, please click here. Contact the project leader Kim Bradley if you would like further information about how to get involved in the project.