‘Check your cover’ warning over environment directive

A water supplier that polluted a river, killing 6,000 fish, has become the first UK company to fall foul of new European environmental laws.

United Utilities will have to submit costly plans to the Environment Agency showing how it will remedy the damage it caused at Three Pools Waterway, Southport, Merseyside, in July last year.

The Environmental Liability Directive was passed by the European Commission 13 months ago. It gives powers to the Environment Agency to order polluting firms to provide a remedy for contamination.

The directive has become a focus for insurers. They stress that policyholders will need revised insurance to ensure they are covered.

The government estimated there would be 300 cases a year that would fall under the directive. However, XL Insurance environmental manager Simon White believes the United Utilities case would be the first of many. He warned the industry not to let its guard down.

White said: “When you are talking about something as complex as the environmental legal framework that exists in the UK, it is not a simple task of the regulator saying, ‘now we are going to prosecute everything that comes under the directive’. It is going to take time.”

White also warned of a ballooning overall cost for companies that breach environmental regulations. “Companies are facing more and more costs, and so environmental insurance is needed now more than ever to help cover that exposure,” he said.

United Utilities was fined £14,000 earlier this month for polluting Three Pools Waterway. The court heard that machinery failed at a pumping station, and sewage seeped into the river over three days. Dead fish included roach, bream, tench, pike and perch of all sizes and ages. It is estimated that the river will take seven to ten years to recover.

The company said it was not alerted until the third day of the incident, and its reaction was immediate. It has since replaced the pumping station’s computer and alarms, and staff have been retrained.

The Environment Agency said: “This was a major incident that had a devastating impact on the fish. United Utilities owns and operates the sewer network and is responsible for resolving any problems with this system.

“This incident caused significant damage to the environment. This could have been avoided or considerably reduced if the company had correctly reset a pump when it responded to an alarm.”