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The construction industry causes about a quarter of all significant pollution incidents in England and Wales. Consequently, recently introduced laws that require the reporting of actual or imminent environmental damage, and that potentially increase the risk of prosecution for causing environment damage, will be a concern to those involved in the industry. This article describes the action companies should be taking to ensure compliance and to minimise their risk under the new regime.

The laws implementing the EU’s Environmental Liability Directive (ELD) have now, finally, come into force across the UK. Of course environmental legislation in the UK is already reasonably comprehensive and many of the obligations under the ELD will be covered by existing legislation. However, the ELD does introduce a number of novel issues:

• Operators will be under an obligation to report any actual or imminent environmental damage to the appropriate authorities. Damage to the environment covers damage to protected species and habitats, and also, for certain activities, pollution of surface and ground waters and contamination of land.
• If environmental damage does occur, it must be remedied so that, in the case of damage to habitats, species or water, the environment is in the same state as it would have been had the incident leading to the damage not occurred. If that is not possible or will take considerable time to achieve, complementary action may be required, such as restoration or creation of an alternative habitat.
• Third parties that are affected by the damage or that otherwise have sufficient interest will be able to report incidents to the authorities who will be bound to consider whether to take action. As a result, NGOs and other special interest groups are likely to assume a greater role in policing the environment.
• If the environmental damage is caused by more than one operator, the authorities may impose liability on just one of the operators rather than on all of them. It will then be up to the operator that incurs liability to seek compensation from the others.

Many businesses, of course, already have in place systems to deal with environmental incidents including the notification of the authorities. Even so, all businesses should review their internal procedures, in particular taking into account the following:

• Reporting systems should be reviewed and all persons that are on site and responsible for environmental incidents and compliance should be aware of the new requirements.
• Because of the speed with which environmental incidents can occur and the adverse publicity that may result from them, correct reporting channels and procedures should be identified now, rather than after a damaging incident occurs or becomes likely. Different regulatory authorities are responsible for different types of environmental damage and it is important that the correct authority is notified.
• As part of this, it will be important to ensure that for projects in sensitive areas (that is, those either in or in the vicinity of sites of special scientific interest, or habitats protected under European laws, or those that may affect protected species) the appropriate people understand the particular sensitivity of the environment in that area. An incident that may cause no risk of harm in one area, may be potentially devastating in another because of its particular characteristics.
• Provisions in contracts should be reviewed to ensure that damages paid under the ELD can be recovered from other operators that may have caused or contributed to the incident causing the damage. Main contractors and subcontractors may need to rely on these provisions.
• For certain projects, the risk that alternative complementary habitats may need to be created should be factored into project design from the outset.

Although these suggested action points will already be within the ordinary practice of some businesses within the construction industry, for many they will not. As a result, provided that it is properly enforced, the ELD should lead to a harmonised and more rigorous approach to environmental protection across the industry.