Businesses' liability for risks and damages
Companies and registered organisations have special responsibility to be aware of the environmental impacts of their activities. Polluters are financially responsible regarding compensation for any environmental damage they cause, and may be criminally responsible for infractions of their legal environmental protection obligations.
The responsibility for assessing and cleaning up any contamination of the soil or groundwater lies primarily with the polluter, although in some cases the property owners or the municipalities may also be legally obliged to rehabilitate contaminated sites.
Compensation payable for environmental damage
Compensation must be paid for environmental damage by the party whose activities are likely to have caused the damage concerned. Compensation must be paid for any damages that can be estimated in financial terms affecting people or property, as well as significant financial damages and costs incurred in preventing or repairing damage
Compensation claims for environmental damage should first be addressed directly by the claimant to the company or organisation responsible. If agreement is not reached on compensation sums in this way, the claimant may resort to the courts at any time up to ten years after the damage is incurred.
Such claims are covered by the Act on Compensation for Environmental Damage (737/1994). Claims for such damages incurred before 1.6.1995 may be resolved under other legislation. Damages incurred due to hydrological engineering works are covered by the Water Act, and are assessed in connection with the permit system set out in the Environmental Conservation Act. Statutes relating to compensation for environmental damage occurring in connection with transportation are included in the Traffic Insurance Act (279/1959), the Act on Liability in Rail Transport (113/1999) and the Finnish Maritime Code (674/1994).
In some cases compensation may be claimed from secondary parties. Compensation for damage caused by oil spills is controlled separately in legislation on the Oil Pollution Compensation Fund, while certain other types of environmental damage are covered by the Environmental Damage Insurance Act (81/1998).
Compulsory environmental damage insurance
Environmental damage insurance is taken out to ensure that any financial losses incurred can be recompensed even where the causer of the damage is unknown, uninsured or unable to pay compensation.
The compensation system is funded through the compulsory insurance premiums paid by private companies and organisations whose activities are associated with significant environmental risks, or whose activities are generally detrimental to the environment. Such insurance is also obligatory for all companies whose activities are at least partly covered by environmental permits.
Compensation paid out under the Environmental Damage Insurance Act is claimable through the Environmental Insurance Centre.
Environmental responsibility in property dealings
Whenever contaminated sites are sold or rented out, the seller or landowner must duly inform the purchaser or tenant of the extent and nature of contamination. If this is not done, the purchaser or tenant is entitled to have the contract annulled, or to claim compensation or a reduction in the rent or sale price.
In some cases the responsibility for cleaning up a contaminated site may be transferred to a new owner or tenant, even if they have not caused this contamination themselves, as long as they are aware of the contamination or have had reasonable opportunity to suspect or prove that contamination has occurred. Wherever corporate activities are transferred, the related liabilities for environmental compensation may also be passed on to the new owners.
Environmental liabilities in bookkeeping
Companies should be financially prepared to cover the costs of rehabilitating any areas they have contaminated. This liability must be reported in annual corporate accounts, financial reports and voluntary environmental reports, as soon as contaminated areas have been duly surveyed, and reasonably reliable estimates of the future rehabilitation costs are available.