Liability of collective entities for environmental offences

Just before the Oder disaster on 22 July 2022, the Environmental Crime Prevention Act was enacted. It introduces amendments to a number of laws, primarily the Criminal Code, the Misdemeanours Code and the Collective Entity Liability Act. It is to be hoped that the amendment will reverse the previous trend, in which the punishment for offences committed against the environment by individuals was negligible and practically non-existent with regard to entrepreneurs. This is because it was difficult to enforce – in order for a company itself to be held liable, a natural person with a relevant connection to it first had to be validly convicted. From now on, the initiation and conduct of proceedings against collective entities will no longer depend on a judgment against an individual. This means that punishing companies has become incomparably easier. For this reason, entrepreneurs should prepare themselves adequately for the announced legislative changes in order to minimise the risk of misconduct for which they could be held criminally liable, which has become very acute.

The law has increased the penalties for the environmentally hazardous storage, disposal, collection, recovery, processing, transport or disposal of waste and substances – the upper limit of imprisonment in this case is up to 10 years. On the other hand, the cross-border transport of hazardous waste without the required permit or abandoning it in a place not intended for storage is now punishable by up to 12 years' imprisonment. As far as fines are concerned, the court will be able to order a fine of up to PLN 10 million, while the minimum fine in the new legal status is PLN 10 000.

However, fines are not everything. Sanctions also include a ban on promotion and advertising, a ban on manufacturing and selling certain products, on providing certain services, as well as a ban on bidding for public contracts, a ban on receiving grants, subsidies and other support from public funds. Holding both the company itself and its related parties liable may result in the verdict being made public, and will also preclude the possibility of obtaining integrated permits, permits for the production, collection or processing of waste. This will therefore be particularly important in the case of entrepreneurs whose object of activity is to trade in waste.

There is no doubt that the case of the Oder disaster will reverberate in the form of even greater stringency in environmental law and policy. For this reason, "environmental corporate risk", understood as the possibility of damage to a company's assets resulting from the impact of the environment on the company and the company on the environment, is a term with which it is worth familiarising oneself in connection with running a business. It may be necessary to assess the environmental risk and select appropriate measures to protect the enterprise from civil liability. Environmental insurance can be one method of risk management.

Ecological insurance is nothing more than the transfer of civil liability for damage caused by the environmental impacts of companies to an insurance institution against payment. They can cover both liability of the perpetrator, damage to property, as well as lost profits resulting from a specific 'ecological' event, also when specific persons responsible for the damage cannot be identified.

In Poland, the market for environmental insurance is still practically non-existent, but precisely for this reason it represents a lucrative niche to be developed. Environmental risks are usually not included in the scope of cover in typical insurance contracts; the insurer's liability is generally excluded. However, it is safe to assume that as a result of the global interconnectedness of industry, transport and the unification of laws, it will also develop dynamically in Poland. The increase in foreign investments, the tightening regime in the state's environmental policy, the rising level of environmental awareness and the spread of the principles of (increasingly fashionable) social responsibility among entrepreneurs, may positively stimulate the development of environmental insurance. In time, they may also become compulsory insurance for an increasing number of entrepreneurs.

The environmental catastrophe on the Oder River should make us realise that every enterprise functions in a close relationship with its environment. The relationship between the environment and the enterprise may be one of the factors that threaten not only the environment itself, but also the achievement of the enterprise's objectives.