Belrim President calls for clarification on ELD from EU

Mr Lefevre co-hosted Commercial Risk Europe’s latest Risk Frontiers seminar last week in Brussels sponsored by Chartis and Marsh that tackled the ELD implications for risk managers and the insurance market and was attended by over 70 market professionals. The European Commission is to review the effectiveness of the ELD and publish a report with suggested changes in 2014. One key point will be whether financial guarantees to pay for environmental damage should be made compulsory. Hans Lopatta, Policy Officer for Legal Affairs, Environmental Liability, Better Regulation, IMPEL at the European Commission is a key player in the process and was the first speaker at the event.hideMr Lefevre, who is Group Risk and Insurance Manager at CMI in Belgium, used the opportunity to state the case for the risk management profession. “Too many questions remain,” said Mr Lefevre. “We need clarification to reduce uncertainties and that must come from the EU, member states and insurers,” he added. Mr Lefevre opened his speech with some clear challenges for the market on ELD. “In summary we have a lot of questions...less answers...traditional insurance is clearly not the right answer...we need more clarification from the EU and member states,” he said. During its ongoing annual Risk Frontiers survey of European risk managers that will be published at the FERMA Forum in Stockholm, CRE has so far found remarkably little interest taken in the ELD apart from risk managers who work for companies that have the obvious propensity to pollute such as chemicals manufacturers. Despite the uncertainties, however, risk managers ignore the ELD at their peril, suggested Mr Lefevre. He said that risk managers need to play a central role in the response to the directive as a coordinator. Awareness of the ELD and its many cross-departmental implications need to be raised which could even lead to corporate reorganisations particularly for companies that are deemed to be higher risk operators, he said. Mr Lefevre and other experts gathered for the Brussels seminar warned against complacency and said that all risk managers need to review their operations and potential exposures with a fresh eye. “Take time to increase awareness of general management,” advised Mr Lefevre. “As risk managers our role is to coordinate and ensure that all risks are taken into account. The ELD is not well known by members of the executive committee. Challenge and increase awareness of general management. In most companies management is focused upon production, finance and traditional risks. We need to open the minds of general management to risk and the financial cost which could be huge,” continued the Belrim president. Mr Lefevre stressed that the exposures created by the ELD are particularly important when companies are engaged in acquisitions, mergers and disposals. He proposed a systematic ‘filter’ system that could be adopted by all companies to help identify and monitor the risks. The risk manager also urged others to closely look at the role and activity of suppliers and sub-contractors because damage and liability could result from their defective work or products. Transportation must also be considered, he said. And risk managers must identify the competent authority empowered by the EC to police the ELD and pursue pollutants. Mr Lefevre pointed out that these authorities vary from country to country and region to region and it is vital for a risk manager to be aware of which is relevant for each plant. “Once the competent authority has been identified, it is then critical for the risk manager to make contact as soon as possible and before any incident occurs to share information. Maintain contact so that if an incident does occur it can help solve the problem,” advised Mr Lefevre. The risk manager concluded that it is difficult to offer a comprehensive action list because of the broad scope of the ELD, differences in national interpretations, the wide variety of corporate activities and approaches to risk management. But he said that above all, risk managers must act on ELD, document that action, communicate with the competent authorities and ‘show best practices have been adopted’. “Ultimately non activity is non-insurance,” added Mr Lefevre.

Belrim President calls for clarification on ELD from EU

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