ELD to ‘bare its teeth’ in Hungarian toxic spillage

The warning comes in a week when risk management plans at national and international level sprang into action as the Hungarian parliament nationalised the aluminium plant that caused the damage and the European Commission sent in a team of experts to help the Hungarian authorities. It has been reported that Allianz's Hungarian subsidiary insured the plant, MAL Ztr, for property and liability risks, but details of the size of the insurance cover are not known. Reinsurers Munich Re and Hannover Re have reportedly said that they expect any claims on their books relating to the disaster to be negligible. “Under the ELD, which has some extremely strong teeth, it is entirely possible that an accident such as the tragedy in Hungary could ultimately lead to the total collapse of the company at fault if they do not have suitable insurance coverage in place,” warned Simon Johnson, Aon Risk Solutions’ Environmental Director for the UK, Europe, Middle East and Africa.hideUnder the ELD, all companies have a liability and many, because of the nature of their operations, do not even have to be at fault if the environment is damaged because of the actions of a company. Remediation under the ELD will likely enforce primary remediation to turn the damaged natural resource and/or impaired service to its original condition. Ity would also then potentially require complementary remediation to compensate for the fact that primary remediation does not result in full restoration of the damaged natural resources and/or services. Beyond that authorities can enforce remediation to compensate for interim losses of natural resources or services that occur from the date the damage occurred until primary remediation has been fully achieved as well as claim costs for any interim losses. These are losses which result from the fact that the damaged natural resources and/or services are not able to perform their ecological function, or provide service to other natural resources or to the public until the primary or complementary measures have taken effect. “In this instance, there is a serious threat to the environment and for contamination including the Danube, which could lead to serious environmental damage in other countries. If the company responsible for the original damage were to collapse, it is not unimaginable to imagine a scenario in which one country seeks another to pay for the subsequent costs of cleanup. Current estimates are that it will take at least a year and tens of millions of Euros,” Aon's Mr Johnson explained. The Hungarian authorities have been quick to play down the threat to the Danube and officials have stated that there is no risk of a biological or environmental catastrophe in the river. And its parliament has acted quickly to pass a bill to bring the aluminium company responsible for the spillage under state control, shortly after police detained its managing director Zoltan Bakaonyi on suspicion of public environmental damage and endangering the public. Suggestions of mismanagement of the incident are, however, rife with one photograph circulated by environmental group WWF that suggests leaks from the reservoir as far back as June. Eight people died and more than 150 were injured as the local environment was ravaged when the poisonous sludge, which is highly alkaline and mildly radioactive, swept through three villages in western Hungary last week after a dam at one of MAL's holding lakes burst. Greenpeace has stated that while there is a good chance the spill's impact on the Danube will be limited, western Hungarian villages affected by the sludge torrent could suffer in the longer term. And according to Greenpeace, the contamination poses a long-term risk to both the water base and the ecosystem. A European civil protection team of five experts from France, Belgium, Sweden, Austria and Germany arrived in Hungary on Monday morning to support the Hungarian authorities in their efforts to combat the pollution. The experts went directly to the place of the accident together with a European Commission liaison officer, who arrived in Hungary on Saturday. They arrived in response to a request from the Hungarian government for assistance to the European Commission's Monitoring and Information Centre. The Hungarian authorities asked for a small team of 3 to 5 experts with strong field experience in preventing and mitigating damage from alkali sludge on flora and fauna, and decontamination of agricultural land. Kristalina Georgieva, Commissioner responsible for Crisis Response, said, "The quick selection of this team, and the generous offers of member states, clearly shows that European solidarity is working. In their hour of need, we stand shoulder to shoulder with the Hungarian authorities in their efforts to help the victims of this crisis and to reduce the damage to the environment.” The experts will contribute to the assessment of the impact of the alkali sludge on the environment, in particular on agricultural land, water - including underground waters - and flora and fauna; advise on the possibilities of prevention, mitigation and reduction of negative environmental impact caused by alkali sludge; provide expert opinion on the optimal solution of decontamination of sludge in urban and agricultural areas; and assess further needs, anticipate risks and suggest solutions with regard to the rehabilitation of nature and the agricultural and urban land affected.

ELD to ‘bare its teeth’ in Hungarian toxic spillage

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