1. ENVIRONMENTAL LIABILITY IN GREECE THE LEGAL FRAMEWORK & THE ROLE OF FINANCIAL GUARANTEES/ INSURANCE PRODUCTS TO COVER OPERATORS’ RESPONSIBILITIES UNDER DIRECTIVE 2004/35/EC George D. Konstantinopoulos Attorney at the Supreme Court – Senior EU Legal Expert

2. Directive 2004/35/EC on the environmental liability with regard to the prevention and remedying of environmental damage (ELD)  Objective To prevent (Art. 5 and 8) and remedy (art. 6, 7, 8 and Annex II) environmental damage by establishing a framework on environmental liability based on the Polluter Pays Principle. Operators causing environmental damage or imminent threat of damage have to prevent and remedy the damage and to bear the necessary costs.

3. Liability Regime – When are operators liable?

4. Request for Action

5. Article 14 – Financial Security 1. Member States shall take measures to encourage the development of financial security instruments and markets by the appropriate economic and financial operators, including financial mechanisms in case of insolvency, with the aim of enabling operators to use financial guarantees to cover their responsibilities under this Directive.

6. 2. The Commission, before 30 April 2010 shall present a report on the effectiveness of the Directive in terms of actual remediation of environmental damages, on the availability at reasonable costs and on conditions of insurance and other types of financial security for the activities covered by Annex III. The report shall also consider in relation to financial security the following aspects: a gradual approach, a ceiling for the financial guarantee and the exclusion of low-risk activities. Article 14 – Financial Security In the light of that report, and of an extended impact assessment, including a cost-benefit analysis, the Commission shall, if appropriate, submit proposals for a system of harmonised mandatory financial security.

7. Transposition in Greece – PD 148/2009  By 30 April 2007, only 4 Member States had transposed the Directive in their national legal order  Commission started infringement procedures against 23 MS  The European Court of Justice gave judgment against seven Member States in 2008 and 2009  Greece transposed the Directive in 2009, through Presidential Decree 148/2009

8. PD 148/2009 – Article 14 The operators, in order to cover their responsibilities, may make use of financial securities (insurance or other type of financial guarantees), including financial mechanisms in case of insolvency. In these cases, the operator shall take care that the insurance conditions ensure at a reasonable cost the most integrated coverage of the remediation costs of potential environmental damages. As of 1 st May 2010, the activities listed under Annex III shall be subject to mandatory financial security, through a Decision issued by the Minister of Environment. Law 4014/2011 postponed the adoption of this Decision to a later deadline (31/12/2012– not adopted until today).

9. Mandatory Insurance Regime for Hazardous Waste A mandatory insurance regime has been introduced already since 2006 (Article 7 of JMD 13588) regarding hazardous waste management Every company that manages or transports hazardous waste, is obliged to submit an insurance policy regarding restoration of environmental damage to the competent authority The policy constitutes a prerequisite for the issuance of the relative administrative license of the activity

10. Experience gained from the application of the mandatory insurance regime regarding HW There is a growing market in the insurance sector in Greece, providing competitive and reliable environmental liability insurance policies at relatively reasonable costs

11. Problems related to the insurance policies Large discrepancies exist between the insurance policies available, mainly regarding: The amount of the deductible The exclusions (for example asbestos, lead) Liability limitations (exclusion of biodiversity damage) The coverage or not of gradual pollution The duration of the extended reporting period The provision of additional coverage (third party claims for bodily injury and property damage) Obligatory conduction of an environmental audit

12. Problems related to the Insured  The majority of operators maintain low awareness and knowledge regarding environmental liability insurance policies.  The amount of the premium to be paid constitutes the main – if not the only – selection criterion.  The compliance level of a significant percentage of operators remains low. Thus, many operators consider the policy as a substitute for compliance.

13. Problems related to the Administration  Enforcement of environmental law is low, due also to the ongoing financial crisis  There is lack of information regarding the actual condition of the environment. (baseline information)  Environmental inspections are not performed on a regular basis  There is lack of dynamic monitoring systems of environmental parameters (for example, continuous measurements in all river basins as provided for by the WFD)

14. Open issues and Challenges  Developing understanding in EL insurance policies  Insurability of Operators  Pre-audits / Risk assessment / measurement of loss  Taylor-made policies for each MS  Claims management  Ceilings of financial guarantees  Co-operation with national authorities  Financial security: optional or mandatory?  Clarity and precision in the rules on restoration of environmental damage and of the relevant insurance regime  Intensification of environmental inspections  Systematic monitoring of environmental parameters  Co-operation with industry & insurance sector  Fishing the small fish or the big fish? Which is which? INSURERS & INSUREDGOVERNMENT

15. THANK YOU Hellenic Environmental Law Society Dr. Ioanna Koufaki Attorney at the Supreme Court, President George Konstantinopoulos Attorney at the Supreme Court, Member