THE LEGAL IMPLICATIONS ARE YOURS
When it comes to the downstream petroleum industry, it is the owner who is liable for even genuinely unknown site contamination. Bryan Cherry, Environmental Risk Survey Manager from Adler and Allan and Simon Tilling, Environmental Partner at Burges Salmon discuss the legal implications of contamination from your operations. Plus the importance of carrying out risk assessment and robust asset management.
Variety of liquids
The variety of liquids a terminal or depot might handle is vast. The majority of the downstream sector focuses on the storage of refined petrochemicals; diesel, gas oil, kerosene, petrol, aviation fuel etc. Some may also store waste oil, lubricating oil, chemical compounds and energy-based fuels. The commodities are also received and stored in widely differing volumes before their onward journey.
One thing nearly all of them have in common though, is that they can cause considerable environmental damage if accidentally released into the environment.
The issues leading to contamination can sometimes go undetected for many years by operators, particularly when an effective asset management strategy has not been put in place.
Level of fine = level of harm
Under the contaminated land regime, if a local authority deems the condition of a site to pose an unacceptable risk of harm to people or the environment, then a remediation notice could be served.
There are risks of being fined under environmental law regimes for day to day operational issues. For example; if environmental damage occurs, or if a watercourse is polluted as a result of a company’s activities on a site. If assets are not properly managed or correct operating systems are not in place, so an overfill occurs or continuous discharge of a polluting substance from badly maintained pipes, a company could face prosecution by an environmental regulator.
The level of fines will depend on the level of harm, the culpability of the offender and, in the case of corporates, the size
of the company’s turnover. While penalties vary, they have been steadily increasing over recent years, with some of the highest reaching seven figure sums. Regulatory prosecutions for breaches of environmental laws can also, in some cases, implicate individual company directors.
Finally, neighbouring landowners can petition for the costs of dealing with migrating contamination under the law of nuisance, while those whose economic activities are disrupted by spills may also have a route to compensation.
Risk reduction
When operating a depot, terminal or forecourt for instance, contamination can occur at any time from the day to day operations. It is therefore important that businesses manage and reduce these risks throughout their operation or ownership of a site.
A responsible, efficient organisation always has a robust, ongoing programme of environmental risk reduction in hand. The first step is understanding what or where impacts could occur. An environmental risk survey looks at site operations and considers the likelihood for contamination to occur and its severity if it did so. It also looks at what nearby environmentally sensitive features could be impacted and the routes by which it could happen.
All these factors are used to determine what the risks are and identifies measures that are needed to reduce it. In addition, they should detect any pollution that does occur as early as possible, so that it can be remedied with as little impact and as cost-effectively as possible and, hopefully, without legal sanction.
This risk assessment allows an operator, especially where they operate from multiple sites, to find out where needs the most urgent attention, prioritising spend to sites, or areas of a site, where the greatest reduction in environmental risks can
be achieved.
Open lines of communication
Lines of communication should be kept open throughout normal business operations, informing the agencies of key operational changes and showing practical permit compliance. By doing so, a verifiable track record of business transparency, willingness to engage, consideration and care for the environment is created.
Underpinning this, it is also good to secure the right advice when making changes in activity, initiating growth or introducing
new processes.
Should an incident take place further down the line, having the paperwork showing this advice (and that it was followed) will do much to avoid or mitigate against sanction.
There is no absolute guarantee of preventing a pollution incident or contamination. However, the more site owners can show that they have acted responsibly and legally and are always on top of all that happens on the site while they are its stewards, the easier it will be to persuade both prosecutors and the courts that they weren’t reckless, negligent or deliberately harmful.
A thorough environmental risk audit will give businesses peace of mind in detecting and identifying the environmental risks posed today and in the future. It will offer strategies to remedy any existing contamination in a manner to suit the current business, and reducing future damage to the environment, reputation and finances.
