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Environmental Liability Insurance

Volume 404: debated on Tuesday 15 April 2003

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To ask the Secretary of State for Environment, Food and Rural Affairs what research she has commissioned into the environmental benefits of compulsory environmental liability insurance [108925]

The Department, in consultation with business generally, the insurance industry, and other relevant Government Departments, undertook a detailed assessment of the implications of compulsory financial security, which has emerged in the course of the Council negotiation on the European Commission's draft Directive on Environmental Liability. The Commission's proposal was merely For Member States to encourage operators to use appropriate insurance or other forms of financial security. The need to have financial cover could impose disciplines on operators to improve their operations in order to minimise the risks of environment damage. The assessment suggests that the environmental benefits, which were evaluated in the Department's Extended Partial Regulatory Impact Assessment (COM(02)17), could be substantially lower than the costs.

To ask the Secretary of State for Environment, Food and Rural Affairs what research she has commissioned into the impact compulsory environmental liability insurance may have on British businesses; and if she will make a statement [108926]

The Department, in consultation with business generally, the insurance industry, and other relevant Government Departments, undertook a detailed assessment of the implications of compulsory financial security, which has emerged in the course of the Council negotiation on the European Commission's draft Directive on Environmental Liability. The Commission's proposal was merely for Member States to encourage operators to use appropriate insurance or other forms of financial security. The assessment revealed costs to business ranging from £79million (managed funds) to £1.8billion (insurance).