A bill filed at the House of Representatives seeks to mandate that owners and operators of “environmentally critical” projects secure appropriate insurance coverage that would guarantee sufficient compensation for the possible adverse impact of their operations on affected communities.
House Bill 1937, authored by Bicol Saro party-list Rep. Brian Raymund Yamsuan, provides for this mandatory environmental insurance coverage (MEIC) that institutions and corporations should obtain before they are allowed to start construction or commercial operations of their projects.
Under the proposed measure, environmentally critical projects are among other activities like quarrying, logging, reclamation, mining, major infrastructure projects, and those constructed in areas frequently visited or hard-hit by natural calamities such as floods, typhoons, and volcanic activity.
“Our ultimate goal is accountability for institutions and corporations that embark on environmentally critical projects. We want to make sure that they operate as responsible owners to help prevent man-made disasters,” Yamsuan said.
“If environmental damages do occur, then the MEIC will ensure that communities are properly compensated and rehabilitation programs are immediately implemented,” he added.
Yamsuan said House Bill 1937 sets up the MEIC in the form of an environmental guarantee cash fund or an environmental insurance policy (EIP) obtained from bonding or insurance companies, in cases when the former is insufficient to cover the costs of the adverse consequences.
Among the beneficiaries of the MEIC cited under the bill are the affected communities, stakeholders, and the local government units within the primary impact areas of the environmentally critical projects. Government agencies tasked under the law to undertake the rehabilitation, cleanup, and monitoring of the affected sites for which no responsible public or private entity is specified are also included as MEIC beneficiaries.
An Inter-Agency Technical Committee chaired by the DENR Secretary would be established to implement the bill’s provisions. The Commissioner of the Insurance Commission, representatives from the insurance industry, mining sector, and other stakeholders that the DENR may deem fit will sit as members of the committee.
Failure by owners and operators to secure a MEIC for environmentally critical projects is punishable under the bill with fines ranging from P500,000 to P2 million or imprisonment of six to 12 years, or both, depending on the court’s discretion.
Meanwhile, government officials and employees who approve the construction of such projects without the necessary MEIC face the penalty of being suspended from 30 days to six months.
