Financial Provision for Environmental Liabilities
The Environmental Protection Agency (EPA) 2019 document on Environmental Liabilities and Financial Provision provides guidance to ensure that adequate funds are available to pay for remediation of environmental damage and pollution and provide for safe closure and incident management at licensed facilities.
Financial Provisions can take the form of :
- Secured bank accounts
- On-demand performance bonds
- Parental guarantees
- Environmental impairment insurance policies.
The EPA published guidance applies a risk-based approach to environmental liability and financial provision requirements.
- Licensed facilities which pose a high risk to the environment are required to agree the assessment and costings for environmental liabilities and financial provisions.
- This ensures that legislative requirements are met and environmental protection is kept to the fore, while maintaining a balanced and fair approach for both industry and the public.
The EPA has developed updated guidance and templates to assist facilities to comply with the requirements.
The securing of financial provision for environmental liabilities is a 2-stage process:
- Environmental Liability costings are first agreed with the EPA pursuant to a technical assessment of risks on a site-specific basis.
- Once costings are agreed, a financial provision (FP) instrument that meets EPA requirements is then put in place.
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