Hallsdale Insurance Brokers Kettering
Midlands & The North: 01536 303310

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Environmental Impairment Liability


The effect of oil pollution is frequently widespread with severe and long term effects upon the environment. Every year there are some 5,000 pollution incidents involving fuel or oil. The large majority of these incidents affect the water environment with the typical cost to a business of some £30,000 in fines, clean up costs and production losses (Feb 2004 figures from the Environment Agency for England and Wales).

Oil entering surface water drains normally contaminates ditches, dykes, rivers and other watercourses. Oil entering surface water soakaways can contaminate groundwater as well as wells, springs, boreholes, watercourses and wetlands. Such pollution is a significant threat to sources of the public water supply. Oil entering foul sewers can contaminate private or public treatment works and interfere with their biological treatment of effluent.

Five litres of oil can cover an area of water the size of two football pitches. It forms a surface film that reduces the level of oxygen in water, destroys habitats, and presents a very serious threat to aquatic life. Oil can reach the natural environment due to a deliberate act, to accidental spillage, to the failure of containment as well as surface water run off.

The effect is frequently serious, widespread and long term, affecting for example:

• Extraction for trade processes, cooling and effluent treatment;
• Discharge of cooling water, process waste and effluent direct to watercourses;
• Watercourses used for agricultural and commercial purposes including fish farms and leisure activities;
• Extraction and treatment for public water supplies or for agricultural irrigation;
• Oil percolating through the soil to a wide area which can be gradual and unidentified;
• Airborne fumes and nuisance smells from the storage of oil, from the products of combustion where waste oil is burnt illicitly, or from the incomplete combustion of fuel oil.

A strict liability applies to dutyholders to prevent pollutant leaching into a river or watercourse and the point of origin of pollution incidents is usually traced by the enforcement agencies. Magistrates and Sheriffs' Courts can impose fines of up to £20,000 for pollution offences, and if a case goes to Crown Court the fine is unlimited and offenders can be sentenced to prison. The polluter will also have to pay clean-up and court costs whether or not a case is taken to court, these can be very high.

The legislation applicable to pollution and the storage of oil is somewhat complex and outlined separately together with details of how to find out more in Risk Director Technical Guidance Note: Oil Storage Legislation.

The tort of nuisance may arise due to the interference of the rights of others in the use and enjoyment of property or the exercise of a common right, and can give rise to criminal prosecution or civil claims.

What aspects do you need to consider?
Inappropriate action taken in the event of an unplanned incident can result in significant pollution which could easily have been avoided. For example, oil spillages should not be hosed down or detergents used to disperse them. Such action adds to rather than removes the potential for damage to the environment.

Major incidents can arise due to an accident whilst handling industrial bulk containers (IBCs) or drums. Other causes include the lack of routine inspection or maintenance, resulting for example in the failure of a fixed storage tank or of its secondary containment.

Sensible risk management techniques will enable reasonable steps to be taken to both avoid pollution incidents and also comply with the law. The cost involved is unlikely to be out of proportion to the benefits and prepared procedures and emergency planning will minimise the adverse effects on the environment, to the business and others. Initially, the existing arrangements for the following should be identified:

1. The delivery, storage, use and processes involved, and the disposal of oil e.g. petrol, diesel, central heating oil, lubricating oil, mineral oil, vegetable and plant oil, heavy oils such as liquid (i.e. non-flowing) bitumen, oils used as solvents such as paraffin or kerosene, and waste oil;
2. Spillage prevention, containment and control measures already in place;
3. Spillage procedures and pollution incident response planning already prepared.

What key actions do you need to take?

The steps required depend on:
1. A recorded risk assessment;
2. Appropriate risk control measures;
3. Provision of appropriate equipment and materials to deal with spillages;
4. Emergency procedures and the appointment of trained spillage response teams;
5. Review and revision of the assessment to respond to change and at suitable intervals to make sure the arrangements remain adequate.
Further professional advice may be appropriate to help complete site assessments and develop risk minimisation and best practice control measures.

A wide range of equipment and materials is available for spillage protection, containment and control. They include materials which absorb pollutant substances including oil. Assessment services and employee training are also available.

Further Information:

South and Central: Hallsdale Insurance Brokers Ltd. 11 - 13 Station Rd. Kettering. Northants NN15 7HH Tel 01536 303310

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