The document discusses environmental liability and European Directive 2004/35/EK. It provides an overview of the parameters affecting business liability, including technical, social, international, commercial, economic, and legal factors. It explains that environmental liability under the directive is considered "strict" and that having an operating permit does not exempt one from liability. The directive establishes the "polluter pays principle" and requires adequate financial security like insurance to cover environmental damage from business activities.

1. HELLENIC COMMITTEE OF LLOYD’S BROKERS’ ASSOCIATES “70 years of Presence in the Greek Insurance Market” 30 TH September 2009, Yacht Club of Greece Environmental Liability & European Directive 2004/35/EK George Koutinas Engineer NTUA & Ε NSPM Specialist Insurance Broker [email_address]

2. ENVIRONMENTAL LIABILITY & EUROPEAN DIRECTIVE 2004/35/EK Parameters affecting Business & Liability European Environmental Liability Directive (ELD) ELD: Current status & the Greek reality Environment & Insurance: A positive link?

3. PARAMETERS AFFECTING BUSINESS BUSINESS TECHNICAL - Production - Logistics SOCIAL - Protection of Employees - Protection of Consumers - Protection of Environment INTERNATIONAL CONVENTIONS - Legal frame Globalization Natural Environment COMMERCIAL - Brand name - Competition ECONOMIC Risks LEGAL - Laws - Liabilities

4. CIVIL LIABILITY SUBJECTIVE The person who suffered a damage, has to prove : The damaging cause / error The damage The respective link between the cause/error & the damage OBJECTIVE (STRICT) To avoid consequences, the person considered liable “by default”, must prove existence of “another” cause Force Majeure (Act of God) Liability / Error committed by someone else, … Regarding Business & Environmental Liability, in the current legal & socio-economic conditions within the European Union ENVIRONMENTAL LIABILITY IS CONSIDERED “STRICT” THE EXISTENCE OF A PERMIT TO OPERATE DOES NOT EXCEMPT LIABILITY THE INTENTIONAL POLLUTION TO THE ENVIRONMENT IS CONSIDERED A “CRIMINAL ACT” (Directive 2008/99/EK, valid from 26/12/2010)

5. BUSINESS LIABILITY Liability against Consequences Insurance Cover (*) Liability is “Strict” (**) Liability is “Subjective” - Third Parties (**) - Clients (**) - Stakeholders , Authorities , (**) … Εnvironment (*) Employees (*) Financial Losses - Bodily Injury / Death - Moral damage, … - Earth Pollution - Water Pollution - Damage to Biodiversity Bodily Injury / Death - Material Damage - Consequential loss PRODUCT LIABILITY POLICY EMPLOYER’S LIABILITY POLICY ENVIRONMENTAL LIABILITY POLICY - THIRD PARTY LIABILITY INSURANCE POLICY - PROFESSIONAL INDEMNITY INSURANCE - PRODUCT GUARRANTY & RECALL INSURANCE - “DIRECTORS & OFFICERS” INSURANCE Consumers (*)

6. ENVIRONMENTAL LIABILITY Directive 2004 /35/EK ( “Polluter Pays Principle”- The 3P’s ) Each and every Business activity that may causes damage to the environment will bear the cost for the proper preventive measures as well as the cost to limit the damage occurred and to establish the damaged environment at the prior situation Basic characteristics of the Directive Covers a wide spectrum of business activities ( Addendum ΙΙΙ of the Directive ) Defines environmental parameters concerned - Soil - Surface and sub-surface waters - Biodiversity in the vicinity of the business activity ( wild flora & fauna ) Liability is severe (strict) Several entities have the right to denounce or to present a claim to the Authorities State Authorities will be obliged to react. Necessity / Obligation for adequate financial security (Insurance / Bank’s “Good Performance Guarantee” Letter ? )

7. ENVIRONMENTAL LIABILITY DIRECTIVE (ELD) Prevention & Remedying of Environmental Damage BUSINESS ACTIVITIES CONCERNED ANNEX III of the ELD 2004/35/EC - Activities concerned / governed by the IPPC Directive - All kind of Waste Management (collection, storage, transportation, treatment of dangerous and non-dangerous wastes) - Rejections to surface waters - Underground rejection of substances ………………………………………………………… .. Transportation and disposal of genetically modified organisms Transportation of dangerous material by road, by rail, through channels, by air or by sea - Trans-border activities

8. ENVIRONMENTAL LIABILITY DIRECTIVE (ELD) Prevention & Remedying of Environmental Damage Current status Most of the EU countries have inserted ELD in their legislation BUT in certain of them regulatory texts are needed ( European Commission appears comprehensive due to the current economic crisis ) Insurance Industry in mature markets provides already adequate / mature solutions. Most of the environmental liability risks are covered with few exemptions mainly referring to “Biodiversity Damages” Certain countries (Bulgaria, Czech Republic, Greece, Hungary, Portugal, Romania, Slovenia and Spain) have declared to the EU Commission their intention to make compulsory the Financial Security (Insurance) for the Environmental Liability The Greek reality Relevant Presidential Decree has been issued. However, certain Ministerial provisions are still needed in order to make the ELD fully applicable Experience in Business Comprehensive Liability Insurance (including Environmental Liability) is very limited / negligible. “ Environmental Impact Studies” carried out so far are not subject to severe / detailed control and regular monitoring. Moreover, are not covered by any Professional Liability Insurance.

9. ENVIRONMENT & INSURANCE Can Insurance contribute to the protection of the Environment & to the Sustainable Development? YES The ELD refers to a legal administrative procedure aiming mainly to prevent and to limit eventual impact to the Environment. To this extent, Insurance can play a most positive role: If Insurance conditions are clearly established and the relevant rules are respected If Safety Rules and Preventive Measures are adequately monitored If appropriate mechanism (state authorities supported by multidisciplinary expertise) is established in order to advise about validity of claims Insurance in order to avoid payment for major environmental damages with complex administrative procedures, will have any interest: To control Safety Rules for a smooth run of the insured business activity To propose Preventive Measures in order to avoid eventual environmental damages To finance appropriate measures deemed necessary for limiting an imminent peril or a declared damage