New provisions regarding environmental insurance

Section 22 of General Environmental Law No. 25,675, provides that any person who carries out dangerous activities to the environment must take out an insurance policy to guarantee the remediation of the damages that may result; furthermore, they must set up an environmental restoration fund to facilitate the environmental remediation actions.

In exercising its powers, the enforcement agency issued Resolutions No. 177/2007, 303/2007, 1639/2007 and 1398/2008, by means of which the insurance coverage, the activities involved and the level of ‘environmental complexity’ of the activities involved were ruled on.

These Resolutions also set forth an Insurable Minimum Amount of Sufficient Entitythat reaches all industrial and service activities with Environmental Complexity Levelequal or higher than 12 points, according to the parameters provided by Resolution No. 1639/1607 of the Secretariat of Environment and Sustainable Development (see prior comment to this Resolution “The Environmental insurance policy is being regulated” in edition # 68 of Marval News dated December 21, 2007).

Recent Resolution No. 481/2011 reviewed and updated the list of activities included in Exhibit I of Resolution No. 1639/2007, which amended its equivalent No. 177/2007, including new provisions regarding the Complexity Categories and the activities achieved by the obligation provided by Section 22 of General Environmental Law No. 25,675, transferring the successive amendments to Resolution No. 1398/2008 in order to harmonize their implementation.

Resolution No. 481/2011 indicates that in the range of 12 and 14.5 point of Environmental Complexity Level some activities with low contaminant impact were found. Hence, prior provisions were modified in order for the obligation to make environmental insurance for industries or activities with a level of Environmental Complexity higher than14 basic points instead of 12 basic points mandatory.

Consequently, Resolution No. 481/2011 substitutes the Identification of Environmental Risk Categories (Item A.2. of Exhibit II of Resolution No. 177/2007 and amendments) to the following:

1. First Category: up to 14.0 points;
2. Second Category: from 14.5 to 25 points;
3. Third Category: above 25 points.

Notwithstanding this new provision, it does not prevent the Secretariat of Environment and Sustainable Development from requesting fulfillment of the obligation provided in Section 22 of the General Environmental Law No. 25,675, to those activities which have obtained a score below 14.5 points, and are included on the basis of "site specific" considerations.

The Resolution also replaces Section 3 of Exhibit I of Resolution No. 1398/2008 according to the new parameters and defines the initial Environmental Complexity Level in the Basic Amount formula, calculated with the polynomial equation of Paragraph A.1.1 of Exhibit II of Resolution No. 177/2007 and its amendments.

Finally, the Supplementary Exhibit of the mentioned Resolution indicates that activities included in Item 28 called "Other Activities (not coded according to International Standard Industrial Unified Code)” of Exhibit I of Resolution No. 177/2007 and amendments, whose specific items described in detail and groups, include the following new activities:

• Deposits of gas, hydrocarbons and their derivatives, and chemicals;
• Construction of large infrastructure projects.

Note: Resolution No. 481/2011 applies the same definition of hazardous material or substance as Resolution No. 1398/2008, meaning, those classified as such by the Global Harmonized System.