Mandatory environmental insurance coverage proposed

MANILA, March 5 (PNA) — A lady lawmaker is seeking the enactment of a law requiring mandatory environmental insurance coverage for environmentally-critical businesses.

“A mandatory environmental insurance coverage should pay for the damages and environmental rehabilitation as a result of environmental impairments from business operations,” explained Rep. Rosenda Ann Ocampo (6th District, Manila), author of House Bill 5485 which has been referred to the Committee on Ecology of the House of Representatives.

Under HB 5485, environmentally-critical businesses refer to commercial and industrial establishments and enterprises, among others, that could pose serious risks to people and the environment.

The bill provides that “all owners and operators of environmentally-critical businesses shall be required to secure a Mandatory Environmental Insurance Coverage (MEIC) to compensate for damages to health and property, environmental rehabilitation, remediation and clean-up costs and expenses as a result of environmental impairment arising from their operations.”

She noted that the economy is steadily developing due to the growth of commercial and industrial business that provide investments, incentives and employment, their large-scale operations may cause environmental disasters and undue sufferings to the people.

“To ameliorate the people and rehabilitate the environment from the damages caused by businesses, it is essential to institute a Mandatory Environmental Insurance Coverage,” Ocampo stressed.

The proposed MEIC, she added, is designed to relieve business firms of the financial burden to spend for environmental loss or damage as a consequence of its project’s construction or operation.

Ocampo cited instances of man-made environmental damages like the 1996 Marcopper Mining tragedy in Marinduque which led to the biological death of the Boac and Makalupnit rivers, destroyed hectares of farmlands and displaced families.

There was also the 2005 and 2007 massive fish kills in Rapu-Rapu, Albay caused by cyanide spills from the mining operations of Lafayette, Philippines Inc. which also caused severe damage to the community.

“Despite these environmental disasters, there is still no policy to ensure adequate compensation for communities affected by man-made disasters,” the authors stressed.

“Although government recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments, it also protects and advances the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature,” Ocampo pointed out.

HB 5485 provides that the MEIC shall be obtained only from bonding or insurance companies duly accredited by the Department of Environment and Natural Resources.

The MEIC shall be in the following forms: (a) Environmental Performance Bond (EPB) – which shall be required for all ongoing activities or projects and applications for Environmental Compliance Certificate or Certificate of Non-coverage to guarantee adequate and timely compliance with the environmental standards and the terms and conditions set forth by the DENR during the pre-development, development and construction phases of the project.

The EPB shall answer for all environmental damages, penalties and legal obligations which may arise from the failure of the project proponent to comply with its undertakings during the aforementioned phases.

Another is the (b) Environmental Pollution, Impairment and Clean-up Liability Insurance (EICLI) – which shall be required for all existing and future activities or projects to cover operational phases, including those that have been issued an Environmental Compliance Certificate or Certificate of Non-coverage.

The EICLI shall answer for all claims arising from damages to the environment, bodily injury, and property damage arising from a pollution event, including environmental rehabilitation, clean-up or remediation costs and expenses for contamination or impairment of the environment.

Among other vital provisions of the proposed Act, HB 5485 provides that the DENR shall determine which businesses or industries shall be classified as environmentally-critical and shall be required to obtain an Environmental Performance Bond or an Environmental Pollution, Impairment and Clean-up Liability Insurance.

The measure provides for penalties on violators ranging from half a million pesos to not more than two million pesos and/or imprisonment of not less than six years but not more than 12 years. The DENR Secretary, in coordination with the Commissioner of the Insurance Commission, shall promulgate the necessary rules and regulations for the effective implementation of the proposed law. (PNA)