1 Industrial production and the new security challenge EC Environmental Liability Dr. Gerhard Schmid...

1Dr. Gerhard Schmid

Industrial production and the new security challenge EC Environmental Liability


Dr. Gerhard Schmid

Darmstadt IEF Roundtable

October, the 27th

2


Agenda

Situation in Europe: focus on Germany 3

Examples of industrial catastrophes 12

New Security Challenge:

EC Environmental Liability Directive 21

Recommendations 28

3


Situation in EuropeWhat types of industry are the most hazardous?

4Dr. Gerhard Schmid


Situation in Europe (Major Accident Reporting System/MARS)

5Dr. Gerhard Schmid


Situation in Germany

6Dr. Gerhard Schmid


Where do the accidents occur?

Branches in which MARS accidents occurred between 1995 and 2005

Countries in which MARS accidents occurred between 1995 and 2005

7Dr. Gerhard Schmid


Wrap-up of the details (1)

8Dr. Gerhard Schmid


Wrap-up of the details (2)

9Dr. Gerhard Schmid


IPPC Sites in Europe

10Dr. Gerhard Schmid


EU’s Major Accident Reporting System (MARS)

• 20% of all industrial incidents occur

at petrochemical plants

• 50% occur at chemical plants



Central Reporting and Evaluation Office (ZEMA)

• 50% of all incidents were reported by the

chemical and petrochemical industries

• 17% involved the storage of hazardous

substances



Many faces of environmental damage



Examples of industrial catastrophes



Fertiliser explosion in Toulouse, France, in 2001

• Explosive substance: 400 t of ammonium nitrate

• Fatalities: 30

• Number of persons injured: 2,240

• Radius of severe property damage: 350 m

• Radius of shattered windows: ≤ 3 km

• Economic loss: €2.3bn

• Insured loss: €1.9bn



Gas field blow-out in Chongqing, China, in 2003

• Natural gas containing hydrogen sulphide (H2S)

• Fatalities: 250

• Number of persons injured: 10,000

• Number of persons evacuated: > 40,000



Bhopal



Abandoned production facility in Bhopal, India

© Roos



Case study Bhopal

• Toxic gas: methyl isocyanate

• Area contaminated by escaping gas: approximately 30 km²

• Number of persons exposed to fumes: > 500,000

• Immediate fatalities: > 2,000 people within a radius of 1.5 km

• Fatalities to date: >20,000

• Number of persons still suffering from chronic diseases: 100,000–200,000

• Settlement paid by Union Carbide in 1989: US$ 470m

• Insured liability loss: US$ 200m



Reasons for the disaster

• Poor safety measures

• Storage of large quantities of lethal gas (methyl isocyanate MIC) at

the wrong temperature

• Accidental or deliberate introduction of water into one of the gas

storage tanks

• Confusion in detecting a rise in pressure in the tanks

• Ineffective response to detection

• Wrong communication, organisation

• Poor crisis management



New security challenge: EC environmental liability directiveDirective on environmental liability with regard to the prevention and remedying of environmental damage

• Liability for public-law environmental damage claims in accordance with

the “polluter-pays” principle (applies to all occupational activities)

• The state is advocate of the environment and claimant. The legally

protected interests are: water, land, protected species and natural

habitats. Natural restitution – recovery of nature

• The state does not distinguish between first-party and third-party

environmental damage claims

• Group actions: enforceable claim on the authorities to take action, hence

indirect claimants

• Member states have until 2010 to create incentives for insurance

solutions, failing which compulsory insurance will be introduced



Directive’s main points

There are three different types of remedial measure• Primary remediation: measures at the damaged site• Complementary remediation: compensatory measures at an alternative

site• Compensatory remediation: additional measures adopted until primary

remediation has taken effect

The duty of restoration is to a large extent independent of the cause of loss

Public-authority remediation orders served on the polluter involve the

source of damage and the impact blurred distinction between

environmental first-party and third-party damage

Remediation costs comprise: recovery, experts’ reports, measurements,

expenses incurred by the authorities, monitoring, etc.



Current liability position

• No tightening-up of the liability position relative to land and water damage

Germany: (Federal Soil Protection Act is more stringent, the protective effects

of the Federal Water Act/Police and Public Order law are comparable)

• Water and land are also protected under

civil law

• New: liability for significant damage to protected

species or natural habitats (environmental

impairment)



Natural restitution costs

• Costs of cleaning and soil replacement according to Greenpeace

Boliden mining company: €96m

Andalusia: €145m

Environment ministry: €137m

Total: €378m

• €63,000–145,000 per hectare, including financial compensation for the

farmers and property damage

Coto Doñana 1998: A dam broke at a waste site. Mine waste flowed

downstream to the National Park. Some 2,600–6,000 hectares of land were

affected.




• Compensatory measures (acquisition of land, creation, maintenance):

- Nutrient-poor grassland: €90,000/hectare

- Reforestation: €85,000/hectare

• Flat-rate eco-account payments by the municipal authorities:

- Munich: €340,000/hectare

- Fürstenfeldbruck: €50,000–100,000/hectare

• Renaturation measures (creation):

- Technical University of Munich: Nutrient-poor grassland:

€100,000/hectare




• Thuringian ordinance on nature conservation compensatory tax

(creation, maintenance):

- Trees/shrubs along streams/rivers: €2,045,000/hectare

- Dry, sandy grassland: €92,000/hectare

- Fens: €26,000/hectare

• Mountain reforestation (creation): €250,000–500,000/ha



New Security Challenge

• 80 % of all premises in Germany are facing ELD relevant areas

• High liability exposition of all producing companies

• Threat through governmental and NGO activities

• High business impact in the case of industrial accidents

• Challenge “Implementation in the Enterprise Risk Management System”

• Risk of Chance

• Information Society



Recommendations



Lessons learnt from industrial catastrophes

• Most fatalities are caused by the escape of toxic gases. Thousands may

die at distances of up to 10 km from the site of the accident

• The worst property damage is caused by explosions

• Collapsing buildings as a result of an explosion can cause fatalities

within a 400 m radius

• Even small amounts of toxic gas and explosive substances such as LPG

can cause catastrophic losses

• Residential areas are often permitted to spread too close to industrial

plants



On-site inspections

• Amounts of hazardous substances stored or handled

• Neighbouring properties

• Worst-case scenario

• “Hazard zones” publication helps in estimating hazard zones of facilities



Loss prevention aspects of exposed industrial facilities

• Facilities should be located in remote industrial areas

• Plants with a high risk of explosion should be located at least 500 m from

all residential areas for adequate safety

• Plants should be equipped with an emergency information system for

near-by residents, e.g. loudspeakers, radio

• Risk perception and risk sensitisation is a must

• Crisis management in the framework of a good local risk management

standard is necessary

• New risk analysis to assess risks resulting from the new EU Directive

• New security challenge for business, strategy, products, brands and

images of the producing companies



Security with the help of safety!

Dr. Gerhard Schmid

Darmstadt IEF Roundtable

1 Industrial production and the new security challenge EC Environmental Liability Dr. Gerhard Schmid...

Documents

Transcript of 1 Industrial production and the new security challenge EC Environmental Liability Dr. Gerhard Schmid...