Newsletter | December 2014, Issue 4
	ENVIRONMENT
	Proposed Legislation for Environmental Pollution Damage Compensation Has Passed National Assembly
	On December 10, 2014, the proposed legislation for the Environmental Pollution Damage Compensation and Recovery Act (the “Environmental Damage Compensation Act”) was passed by the National Assembly by unanimous votes of the present members. This Act will enter into force one year after the date of its promulgation, provided that, however, the obligation to subscribe environmental liability insurance under Article 17 will be enforced 18 months after tis promulgation.
	The key framework is as follows:
	Expansion of Facilities Subject to Environmental Liability
	Three types of facilities have been added as Facilities Subject to Environmental Liability ("Facility" or "Facilities"): construction waste processing facilities, facilities that emit persistent organic pollutants, and marine facilities specified by the Marine Environment Management Act.  These, along with other types of facilities that the President may designate, join the previously designated Facilities: facilities that emit air pollutants, facilities that discharge waste water, facilities that discharges waste water with zero-discharge system, waste treatment facilities, facilities that discharge agricultural waste, soil-contaminating facilities, facilities dealing with toxic substances, facilities that are subject to the filing of risk management plan, facilities that produce noise and vibrations, and facilities that produce odors.
	Presumption of Causation
	The Environmental Damage Compensation Act presumes that a Facility has caused damage if it is "substantially likely" that the Facility caused the pollution-related damage, unless there is reason to believe that the damage occurred entirely due to different causes.  "Substantial likelihood" depends on factors such as the Facility’s operating process and equipment, types and concentration of substances that are injected or discharged, weather conditions, time and place of the polluting activity, the extent of damage, and other circumstances that affected the damage.
	There had been some discussions to provide exceptions to such presumption of causation for Facilities that are legally operated (that is, Facilities that abide by operation management regulations and do not have any operational issues).  However, these discussions were not reflected in the final proposal that was passed by the Environment and Labor Committee.  Thus for a Facility operator to overcome the presumption of causation, he will need to prove that there is reason to believe that the damage occurred entirely due to different causes.
	Strict Liability for Facility Operators
	If the environmental pollution resulting from the installation or operation of a Facility causes damage to a third party, the Facility operator is subject to strict liability: the Facility operator must provide compensation regardless of his fault or negligence.  A Facility operator is exempt from such liability only if the damage is caused by natural disaster or other acts of God.
	Compensation Limits
	A Facility operator found liable for environmental damage may be ordered to pay compensation of up to KRW 200 billion, taking into consideration the size of the Facility and the extent of damage.  The maximum compensation for each case will be set by the presidential decree.  Meanwhile, the limits will not apply if the Facility operator intentionally caused the damage or was grossly negligent in causing the damage, or if the Facility operator did not install/operate the Facility in a lawful manner (e.g., by exceeding discharge limits).
	Victims' Right to Request Information
	If a victim of environmental damage needs information to prove the "substantial likelihood" that a Facility operator caused the damage, the victim has the right to submit a request to the Facility operator to view or obtain information relevant to proving such "substantial likelihood."  Relevant information would relate to the Facility’s operating process and equipment, and the type and concentration of substances discharged by the Facility.  Furthermore, the Minister of Environment may order a Facility operator to provide information to a victim, after the victim's request has been reviewed by the Committee for Environmental Pollution Recovery Policy Review.  If a Facility operator fails to abide by such order, the Korean courts may interpret this as evidence that the victim's claims are true.
	Certain Facility Operators' Obligation to Subscribe to Environmental Liability Insurance
	Compulsory environmental liability insurance applies to certain Facilities deemed to have a higher risk of causing environmental pollution.  This obligation does not apply to all Facilities, but only to those that emit designated air pollutants or designated water pollutants.  If operators of such Facilities do not subscribe to environmental liability insurance, they will not be allowed to install or operate their Facilities.
	The Environmental Damage Compensation Act presumes causation based on a relatively low threshold of "substantial likelihood," taking into account the Facility's operations and the type and concentration of discharged substances, and virtually provides no exception to the presumption of causation.  It also imposes potentially severe penalties on Facility operators, by eliminating any limits to compensation if the Facility operator is found to have violated relevant standards and regulations.  Facility operators should therefore objectively evaluate their operations to make sure they comply with discharge limits and safety standards.  Such preventative measures to preempt environmental damage should be the first priority for Facility operators.
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	If you have any questions regarding this article, please contact below:
	Yoon Jeong Lee yjlee@kimchang.com Joo Hyoung Lee joohyoung.lee@kimchang.com
	For more information, please visit our website:
	www.kimchang.com Environment Practice Group