Firms forced to pay for costly 'disaster' insurance
4 December 2006, MADRID — Companies whose work could potentially contaminate the environment will have to take out costly insurance policies under a new law.
4 December 2006
MADRID — Companies whose work could potentially contaminate the environment will have to take out costly insurance policies under a new law.
The Spanish daily El Pais reported on Monday how the proposed Environmental Responsibility Law will force companies to be accountable for disasters.
The law will penalise companies involved in disasters like the Prestige tanker spillage in 2004 which polluted much of northern Spain and western France and the Aznalcollar dam rupture in 1998, which contaminated waters in the Donana National Park.
They will be forced to take policies costing EUR 100 million a year, according to a study commissioned by the environmental ministry.
Companies will have to take out this 'environmental insurance' from 2010 onwards, said the newspaper.
It will cover up the costs of any clean-up operation.
The law is expected to affect about 5,000 industrial, livestock and transportation firms.
But the study did not say how much the insurance would cost the companies.
The study was carried out by the Alcala de Henares University.
It said this type of insurance would cost between EUR 83-128m a year overall.
Firms will pay rates depending on how risky their business is with rates varying from EUR1m-20m.
But the report warned this may harm productivity in a country which already suffers from low productivity.
[Copyright EFE with Expatica]
Subject: Spanish news