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EU Commissioner for Environment

Industrial disasters can be prevented by better implementation of EU law

Budapest, 6 May 2011

Civic Seminar in the Shadow of Industrial Catastrophe

The title of this conference is quite telling: "In the shadow of industrial catastrophes". Perhaps this refers to the perception that industrial accidents are forgotten once they disappear from the front pages of the papers. The perception that they are in the limelight and mobilising political attention when they happen, but pushed to the shadow of our minds until the next accident happens.

I would challenge that perception. An accident like the one that happened at Ajka has tremendous environmental, social and economic impacts: lives lost, damaged property, tonnes of waste, polluted water and soil, jobs lost and local economies shattered. It casts a very long shadow of its own.

This requires a sustained determination to mitigate the effects.

It calls for a long-term rehabilitation of the affected site.

And this cannot be done overnight.

When industrial accidents disappear from the front pages, they definitely don't disappear from our tables; the tables of policy makers. Lessons should be learned and proper policy responses shaped.

Events like this one illustrate that the costs of preventing accidents pale into insignificance compared to the human, environmental and economic costs when they happen, and the financial costs of remedying them. So we need to make sure in the first place that we do everything possible so that accidents don't happen.

I would like to make three main points today. This first is that full and effective implementation of environmental legislation should go a long way to preventing this kind of disaster. The second is that the costs of such disasters can be covered by insurance, and the third is that we must take long-term action, based on the lessons that we learn from this kind of disaster.

It is no secret that in the past the development of legislation for prevention of industrial accidents has been accidents-driven. In the past, our environmental legislation was enacted when the accident already happened. As the saying goes "when it is urgent, it is too late".

But since the 1996 we have in our toolbox the current Directive on the control of major-accident hazards involving dangerous substances – better known as the Seveso II directive, named after the Seveso disaster. And the good news is that the directive has been instrumental in actually reducing major accidents and their consequences. Despite the number of establishments covered by Seveso increasing over time, the number of accidents has decreased by 10% over the last decade. The Seveso Directive was the first and key instrument to deal with industrial accidents. And we are now reviewing it.

So today we are in a slightly different situation. We have a solid body of European environment legislation to help prevent accidents such as the one in Hungary, including legislation on integrated pollution prevention and control – now integrated and upgraded in the industrial emissions directive - prevention of major accidents and management of mining waste.

But it becomes more and more evident that the strength of EU legislation depends on full implementation and enforcement in – and by - the Member States. Only a well implemented legislation has teeth. Indeed legislation without implementation is useless.

Even if the rate of accidents is declining, every accident is one accident too many. We receive reports of some 20 to 35 major accidents every year; and this is 20 to 35 too many. I am of course aware that unfortunately accidents do happen, and we cannot entirely eliminate them. But we must continue to strive to further reduce the risks of major accidents and to limit their consequences by strict implementation of existing legislation but also - if necessary - by adapting and improving the regulatory regime. Given the potentially very high costs of major accidents in human, environmental and economic terms, this will not only help to save money for society as a whole, but more importantly give EU citizens reassurance that the environment in which they live is better and safer.

That is why we have proposed to update or clarify other existing provisions of the Seveso directive to improve implementation and to improve the protection level. There are three key elements of the Directive that are crucial to its effectiveness:

- first, public participation,

- second, public access to information and

- third, inspection.

It is in these three areas that we see the greatest improvement potential and on all three we propose improvements.

We have proposed that essential information about hazards and safety and appropriate behaviour in the event of an accident should be kept permanently and readily available to the public through the Internet.

Furthermore, more detailed public consultation rules and specific provisions on access to justice have been proposed to protect the legitimate rights of citizens on matters affecting their safety, thus bringing the Directive more into line with the aims of the Aarhus Convention.

Finally, we have also proposed strengthened standards for inspections - including their frequency - as regular and stringent inspections are fundamental for effective enforcement of the rules.

I have been asked many times whether the red mud reservoir at Ajka was subject to the Directive. Let me clarify that the Directive normally applies to facilities of this sort provided that substances as defined under the Directive are present above set thresholds. Due to the specific substances and quantities involved, the Ajka site did not fall within its scope.

But, as I already mentioned, the Seveso Directive is not the only one in our prevention armoury of EU legislation.

Prevention is central also to the new European Industrial Emissions Directive (IED), which came into force in January this year, the successor of IPPC directive as already mentioned.

We made sure that the IED is based on the principle that installations should be permitted to operate only in a way that everything is done to prevent accidents and limits their consequences if unfortunate accident happen. This is the logic followed already under the IPPC permit issuing procedure.

On environmental inspections, the IED now contains detailed requirements for Member States to set up a system addressing the full range of environmental effects from the installations concerned via inspection plans at national, regional and local level. It is up to Member States to ensure that all installations are covered by such a plan. Here a risk-based approach is taken when determining the frequency of inspections, and at least one inspection per year must be carried for installations with higher environmental risks. If such inspections identify important cases of non-compliance, an additional site visit must take place within 6 months.

Member States should transpose the IED into national law by January 2013.

But let me explain more concretely our concerns related to the accident in Kolontar in the context of the implementation of EU legislation.

After the immediate crisis response phase, the Commission initiated a dialogue with the Hungarian authorities and requested information about implementation of the relevant pieces of EU environmental law. Questions were raised in particular with regard to the correct application of the Integrated Prevention and Pollution Control (IPPC) and Mining Waste Directives as well as the European Waste List.

I have already mentioned our conclusion in the context of Seveso Directive.

The full application of the Directive on the management of extractive waste (2006/21/EC) to improve the safety of extractive waste facilities, including tailing ponds, would have been crucial in this case. Hungary did transpose the Directive on time, but it did not consider that this particular installation falls under its scope. We are now waiting for formal confirmation from the Hungarian authorities that the necessary changes in legislation have been carried out.

We also found out that the waste in the red mud reservoir was classified as 'non-hazardous', although according to the Commission, it should have been classified as 'hazardous' due to the high alkalinity of the material. So we are now also waiting for formal confirmation that the new IPPC permit of the installation classifies the waste correctly, or that the technology used for the disposal of red mud is changed in a way that the hazardous properties of the waste are reduced.

From what I have heard from the Minister of State for Environment, Zoltan Illes, I am encouraged.

Next, liability issues: The 'polluter pays' principle is guiding our decision-making with regard to the liability issues. This means that the owner or operator of an industrial installation should be held liable for any damage caused by that installation independent of any possible personal responsibilities or insurance coverage.

The Commission is therefore concerned to make sure that the affected population and the industry at risk is covered by appropriate insurance schemes.

Can you insure against accidents of this scale?

Yes, industrial accidents are insurable, even severe accidents on the scale of the Hungarian case, or the BP incident in the Gulf of Mexico. This is what the insurance companies tell us. The products they offer in the markets are not capped, so they could cover extreme or severe losses. Having said that, this does not prevent the insurance company checking afterwards into whether the company applied good management, and whether it followed all the risk protocols.

Our environmental liability directive in its current form does not impose financial schemes to cover for damage due to such accidents. But to be clear the environmental liabilities are generally insurable. Any company has to face its potential liabilities and must therefore purchase the right product, to be covered. In the case of the Hungarian accident, we see that the company had a very limited insurance cover, not at all a proper product in the sense of the environmental liability directive. The company had a Third Party Liability insurance, covering only damages to machinery and some limited compensation for losses to property. So even if Hungary follows a very rigorous environmental liability directive scheme, in reality the specific company has not taken the appropriate measures to be covered by proper insurance for environmental liability.

So you can see that we are in a complex multi-level implementation arena where it is up to the national level to ensure the respect of its legislation against the company. We will re-consider the option of introducing a requirement for harmonised mandatory financial security. When confronted with cases such as the one at hand, it makes sense to equip the environmental liability with stricter requirements.

Today, I visited Kolontar and Devecser. A lot has been done and a lot still needs to be done to give people in the affected area a new perspective.

To conclude: As we have heard there is quite a strong body of environmental legislation for the purpose of prevention of industrial accidents and handling the consequences if they happen.

We also constantly work on improving our response – and currently reviewing the Seveso directive.

Implementation of EU legislation, its proper enforcement and constant monitoring through inspections will require both human and financial resources. So will adequate response mechanisms in case of accidents.

It is essential that this is not overlooked also in the forthcoming discussions on the European budget. We should consider full implementation of EU law and further development of our capacity to monitor and to react to emergencies as an investment for the future rather than a cost – an investment that benefits all Member States and the EU overall; and an investment that saves us money in the medium term.

That means bringing the issue out of the shadows and shining some fresh light on them.

If you recall just for a moment some tragic pictures from Kolontar and Devecser, shadows will certainly disappear. We owe that to all people and also nature, tragically affected on that very day.

So, I look forward to hearing your ideas and working together to make a real improvement in our collective response to disasters.

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