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Expedited relief for environmental pollution damage opens (National Assembly Bulletin, July 2017)

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In the wake of the hydrofluoric acid gas leak accident in Gumi that occurred in September 2012, critics have called for urgent relief measures for environmental pollution damage. Accordingly, the National Assembly passed the Act on Liability and Relief for Environmental Pollution Damage (abbreviated as the Environmental Pollution Damage Relief Act) at the plenary session on December 9, 2014.


This law went into effect on January 1, 2016, and the environmental liability insurance system went into effect in July 2016. The main thrust of the law is to ensure that victims can quickly receive compensation when environmental pollution damage occurs, and that in cases where the cause is unknown, the government can directly provide relief.


Companies with a high risk of causing environmental pollution are required to take out environmental liability insurance so that they can quickly compensate victims if environmental pollution damage occurs. In cases where compensation cannot be received from a company due to reasons such as unknown causes or incapacity, the government provides direct relief.


The law stipulates environmental responsibility for facilities handling hazardous chemicals that emit air pollutants, wastewater, waste, and etc.

The law requires facilities handling hazardous chemicals with a high risk of accidents by emitting air pollutants, wastewater, and waste to sign up for environmental liability insurance. By signing up for liability insurance, companies involved in accidents can continue to operate without the risk of bankruptcy and minimize costs resulting from environmental pollution accidents.


Those eligible for membership include businesses that emit a large amount of air pollutants, businesses that emit a type of water pollutant, and petroleum manufacturing and storage facilities exceeding 1,000 tons. Currently, about 13,000 companies have liability insurance, and the actual insured rate reaches 99%. The minimum insured amount (liability insurance) is KRW 30 billion for Group A (high-risk group), KRW 10 billion for Group B (medium-risk group), and KRW 5 billion for Group C (low-risk group), taking into account compensation for damage, sustainability of business, overseas cases, etc. 



This is an opportunity to once again check the environmental pollution risk of the workplace.

Hong Hong-ram, a researcher at the Korea Environmental Industry & Technology Institute, said, “After the Environmental Pollution Damage Relief Act was implemented, companies filled out a ‘Business Site Status Survey’ in the process of signing up for environmental liability insurance, so we looked back and inspected the environmental pollution risks at workplaces.” He then showed this reporter actual insurance money paid out in environmental liability insurance in 2016.


“In June of last year, Company A, an SME firm located in Seongnam-si, Gyeonggi-do, signed up for environmental liability insurance. However, in August of that year, an accident occurred when the formalin tank at Company A's workplace was damaged, causing formalin to leak outside. “There was no damage to third parties, but costs for waste toxic waste were incurred, and Company A was able to receive compensation for about 40 million won out of the 55 million won cost from the insurance company.”

However, in cases where damage compensation through insurance is not possible due to unknown causes, the damage relief was resolved by allowing the government to pay relief benefits to victims. It provides support for medical expenses, nursing home allowances, funeral expenses, bereaved family compensation expenses, and property damage compensation expenses.

However, researcher Hong Hong-ram said, “According to the Environmental Pollution Damage Relief Act (Article 23), ‘If the Minister of Environment pays benefits for relief of environmental pollution damage’, ‘the business that caused the environmental pollution damage is unknown or whether the business exists or not is unclear or involuntary,” he explained. “If it is clear that the business that caused the environmental pollution damage has provided the cause, relief must be requested from the business that caused it.” At the same time, some critics argue that the government should first pay relief benefits to victims of environmental pollution and later claim compensation from the companies that provided the cause.


In addition, this law stipulates causal relationship presumption to make it easier to prove damage not only for acute accidents such as fires and explosions, where the causal relationship is relatively clear, but also for chronic damage caused by long-term accumulation of pollutants. Considering prior precedents that have recognized liability for compensation when there is a significant link between the emission of pollution and the resulting damage, the establishment of a causal relationship is presumed when there is a significant probability that the facility causing environmental pollution resulted in damage.


However, if the business proves that it has complied with environmental and safety-related laws and license conditions and fulfilled its responsibilities, including efforts to prevent environmental pollution damage, the causal relationship is excluded. In addition, an information claim system for business operators was introduced to ease the burden of proof on victims.


Critics point out that the environmental pollution damage investigation period stipulated in the law is too short. Researcher Hong Hong-ram said, “According to the law, the preliminary investigation period for environmental pollution damage is within 30 days and a main investigation shall be held within 60 days, but experts all point out that this legal investigation period is too short.”


Written by Park Min-seon