I have created a company and the administration asks me for an ARA and Financial Guarantee, but what is that?

For many years, environmental risks have been discussed more or less frequently, but after the publication of Law 26/2007 on Environmental Responsibility, this topic gained notoriety in Spain.

The reality is that Environmental Risks began to be considered mainly after an industrial accident that occurred at a small chemical plant in the Italian city of Seveso in the year 1976, where significant amounts of TCDD dioxin were released into the environment, causing various effects and serious consequences for the population, which led to the publication of the well-known SEVESO Directives.

But this is not the only environmental disaster that has occurred. In 2010, Times magazine published, regarding the spill in the Gulf of Mexico, a list, including the disaster of Chernobyl in 1986, the leak of pesticides in a factory of Bhopal (India), causing the death of 15,000 people or the fires of Kuwaiti oil wells during the Persian Gulf War in 1991, among others.

And unfortunately, Spain is not exempt from these environmental disasters, such as that of El Prestige, which occurred in 2002, where an oil tanker sank off the Galician coast causing a serious oil spill, or the toxic spill in the Aznalcóllar pyrite mine in 1998 caused by the rupture of the hazardous waste storage tank causing a flood of six million cubic meters of acid water and toxic sludge. According to an article in the newspaper El País, written in June 2021, the five worst environmental disasters in Spain would have brought 2,138 million euros to the State.

For all these reasons, it became necessary to develop important legislation that would deal in depth with environmental risks, such as Environmental Responsibility Act.

And what are environmental risks?

The concept of risk has a multitude of definitions, but the most accepted globally, and the one taken into account in this type of study is the following:

Risk is the probability of occurrence of a hazard

The concept includes the probability of occurrence of a natural or anthropogenic event and its assessment in terms of its harmful effects (vulnerability), that is, the severity of the damage caused.

In this sense, Law 26/2007 on Environmental Responsibility defines environmental risk as the function of the probability of occurrence of an event and the amount of environmental damage it can cause. And environmental damage is considered to be the adverse and measurable change of a natural resource or the damage to a natural resource service, whether it occurs directly or indirectly. The damages specified in the law are as follows:

• Damage to wild species and habitats.
• Damage to water
• Damage to the seashore and the estuaries
• Damage to floors

Environmental Risk Analysis (ARA):

Article 45 of the Spanish Constitution recognizes the right of citizens to enjoy an adequate environment as an indispensable condition for the development of individuals, while establishing that those who fail to comply with the obligation to rationally use natural resources and to conserve nature will be obliged to repair the damage caused regardless of the administrative and criminal sanctions that also apply.

To fulfill this mandate, different legal regulations have been developed that, despite their revision and updating, have not been able to prevent the repeated occurrence of accidents, such as those explained at the beginning of this article.

On October 24, 2007, it was published in the Official State Gazette Law 26/2007 on Environmental Responsibility, which transposed the European Directive 2001/35/EC, incorporating into the Spanish legal system an administrative regime of objective and unlimited environmental liability based on the principles of prevention and that “the polluter pays”, with the operator assuming the obligation to repair (or prevention, if any) and to return damaged natural resources to their original state, defraying the total costs to which the corresponding preventive or restorative actions amount.

In article 24 of this law, it is established that the operators of the activities included in its Annex III must have a financial guarantee that allows them to face the environmental responsibility inherent to the activity they intend to carry out. The amount of this financial guarantee will be based on the Environmental Risk Analysis of the activity. With the publication of the Regulation for the partial development of Law 26/2007, approved by Royal Decree 2090/2008, the methodology for the evaluation of risk scenarios and the associated repair costs is established, which indicates in its article 34 that the scheme established by the standard must be followed UNE 150.008 or equivalent.

Methodology to be followed for the Analysis of Environmental Risks and the Calculation of the Financial Guarantee.

In order to facilitate the evaluation of risk scenarios, as well as to reduce the costs of carrying them out, the Regulation for the partial development of Law 26/2007 introduces voluntary instruments such as:

• Sectoral risk analysis: depending on the degree of homogeneity of the sector from the point of view of environmental risk, there are:
  • model environmental risk reporting models (MIRAT) or
  • methodological guidelines for risk analysis.
• Scale tables, designed for sectors or small and medium-sized companies that, due to their high degree of homogeneity, allow the standardization of their environmental risks.

As can be seen in the diagram, the methodology chosen for Risk Analysis will be conditioned by the Dangerousness and Heterogeneity of the activity. The instruments favorably reported by the Technical Commission for the Prevention and Reparation of Environmental Damages, to be used by operators, as well as the sectoral risk analysis tools developed by the General Directorate of Quality and Environmental Assessment, are published on the website of the Ministry for the Ecological Transition and the Demographic Challenge. These instruments provide a fundamental basis for the preparation of such an analysis.

To carry out the calculation of environmental risk, following the scheme of the UNE 150008:2008, it is necessary to:

1. Delimit the scope of the ARA (geographical scope, processes, facilities, environment, etc.), collecting information from the industry and the environment.
2. Identify causes and hazards, that is, the reason why a source of danger such as substances, equipment and processes that can cause harm to the environment, triggers an initiating event.
3. Identify the initiating events, that is, those physical events that can generate an accident or incident with repercussions on the environment (for example, a tank rupture, fire due to the discharge of flammable substances, etc.), including their probability and consequence.
4. Postulate accidental scenarios: based on the initiating events and identify the sequence of events or possible alternatives that, with a known probability, can give rise to the different accident scenarios. To this end, event trees are developed that start from an initiating event and model its evolution over space and time, introducing conditioning factors into the analysis.
5. Assign a probability of occurrence, based on the probability assigned to the initiating event and the probability of occurrence of each of the conditioning factors.
6. Estimate the consequences of accidental scenarios: calculation of the environmental damage index (IDM) for each accidental scenario.
7. Estimate the environmental risk, which will be the result of the product of the probability of occurrence of each accidental scenario and the IDM of the same.

At this point, the operator can have an overview of the behavior of his installation with respect to the environment, so he can establish measures for risk management and the prevention and prevention of new damage.

Do I need to do a Risk Analysis in my company?

According to Law 26/2007 on Environmental Responsibility, all operators that may cause harm to the environment may be affected by this law, but the sectors that are required to carry out environmental risk analysis are the following:

• The operation of facilities subject to authorization in accordance with the Integrated Pollution Prevention and Control Act (AAI).
• Combustion plants with a thermal power greater than 50 MW.
• Certain hazardous waste management activities: recovery or disposal of more than 10 Tn/day. Underground storage of more than 50 tons.
• Waste incineration plants, both hazardous and non-hazardous.
• Non-hazardous waste managers with a capacity of > 50 tons/day when they include biological, physico-chemical treatments, slag and ash treatment. Shredding of metallic waste (including electronic waste and vehicles at the end of its useful life). Also temporary storage of more than >50 tons.
• Landfills with a capacity of more than 10 Tn/day or 25,000 Tn of capacity (except inert).
• Oil and gas refineries.
• Production and transformation of metals (>20Tn/day).
• Chemical facilities for the manufacture of inorganic chemicals (explosives, medicines, soda, nitrate, potash, and others).
• All discharges into inland, surface, underground and sea waters subject to prior authorization.
• Production of cement (>500 Tn/day), lime (50 Tn/day), magnesium oxide (50 Tn/day), glass (>20 Tn/day), ceramics (>75 Tn/day).
• Manufacture on an industrial scale of: hydrocarbons, organic metallic compounds, plastic materials, rubbers, dyes, pigments, surfactants.
• Chemical industries: ammonia, chlorine, fluorine, carbon oxide, sulfur, nitrogen oxides, hydrogen, sulfur dioxide, carbonyl dichloride, chromic acid, hydrofluoric acid, sulfuric acid, ammonia hydroxide, potassium hydroxide, sodium hydroxide, metal oxides, silicon.
• Manufacture of fertilizers (based on phosphorus, nitrogen or potassium) and of plant protection products or biocides.
• Timber industry: paper manufacturing (>20 Tn/day), cellulose production (> 20 Tn/day). Manufacture of wood chip boards, chipboards or compressed cardboard (>20 Tn/day).
• Textile industry with pre-treatment (washing, bleaching, mercerization) or dyeing (>10 Tn/day). Leather tanning industry (>12 tons/day).
• Agri-food industry: slaughterhouses (>50/tn/day), animal raw material treatment (>75 tons/day), vegetable (>300 tons/day), milk (> 200 tons/day).
• Poultry or pig breeding (>40,000 beds for hens, 2,000 for pigs or 750 breeding sows).
• Consumption of more than 200 Tn/year of solvents.
• Fabrication of sintered carbon or electrographite.
• Industries that preserve wood or derivatives using chemical products (> 75m3/day).
• Wastewater treatment, not covered by legislation on urban wastewater.

Those operators who meet any of the following cases would be exempt from constituting the financial guarantee:

• The risk assessment results in an amount of less than 300,000€
• The risk assessment amounts to an amount between €300,000 and €2,000,000, but they are certified in an environmental management system such as ISO 14001 or EMAS.
• Operators who use the plant protection products and biocidal products referred to in section 8.c) and d) of Annex II of Law 26/2007, for agricultural and forestry purposes.
• Operators of activities that are established by regulation in view of their low potential to generate environmental damage and a low level of accidents.

If you are a promoter of some of the activities mentioned above and you have still carried out Environmental Risk Analysis and the registration of the Financial Guarantee, remember that at Ideas MedioAmbiental we have the technical capacity and resources to help you.

And if you're still not sure if your activity should do it, don't hesitate to ask us. We will be happy to advise you.