Environmental liability update - UK - European Commission's controversial polluter-pays proposals, which threatened to make farmers pay huge sums of money if they fell foul of a proposed new law - causing "damage to biodiversity" - will come under scrutiny from MEPs today.

Member states are divided over the proposed new rules. France, UK and Italy hope for a relatively weak polluter-pays regime. Spain, Greece, Belgium, Denmark and the Netherlands want to toughen up existing laws.

As with so much of the nightmare torrent of legislation that comes out of Brussels the European Commission's original proposals were unworkable. They would have driven farmers out of business by forcing them to insure against the uninsurable.

The proposed new rules have since been watered down. The prospect of compulsory insurance against pollution was dropped in June, in the face of protests from Germany. It was replaced with a commitment to "encourage" insurers to create "affordable" policies.

And last week the European parliament's legal affairs committee voted to include an exemption for companies following defined "good practice" in forestry and agriculture. This will provide an important element of protection for, for instance, IPPC permit holders, as IPPC requires best practice.

The overall concept of the environmental liability proposals was broadly agreed this summer by environment ministers, despite strong divisions between the member states. Green groups continue to claim the proposals do not go far enough.

And a coalition of environmental non govermnment organisations is still calling for mandatory insurance for businesses involved in risky operations, to ensure that even bankrupt companies have to pay for any pollution they have caused.

The European Commission has agreed to re-examine the option to make insurance obligatory EU-wide in five years.

The environmental liabaility proposal's get their second reading in the European parliament today. They have to be approved by both parliament and the council of ministers.

Source: National Pig Association - By Digby Scott - 16th December 2003