Manufacturers’ legal liabilities for environmental pollution

Source: http://www.lexology.com, January 21, 2014
By: Karl Chang and Ray Hsu, Tsar & Tsai

Recently the public has learned that some manufacturers in Taiwan were suspected of having discharged waste water containing hazardous substances into rivers and the ocean, polluting the water in the nearby vicinity and harming the irrigation systems of farmlands downstream.  It has caused grave concerns to the government and the general public.  Pursuant to the Water Pollution Control Act, the Air Pollution Control Act, the Marine Pollution Control Act, the Soil and Groundwater Pollution Remediation Act, the Toxic Chemical Substances Control Act, the Waste Disposal Act, as well as other relevant laws (hereinafter, “Environmental Protection Laws”), a manufacturer which pollutes the environment not only may be civilly liable for damages caused, it may also be subject to administrative sanctions and even criminal liability.  Below is a brief introduction of the administrative and criminal liabilities applicable to polluting manufacturers and other responsible persons:

  1. The administrative and criminal liabilities of a polluting person

Regarding administrative sanctions, a manufacturer (the “Polluting Entity”)that pollutes rivers, the air, the ocean, the soil or groundwater, or fails to process wastes or toxic chemical substances causing pollution of the environment (hereinafter, the “Polluting Acts”) shall, depending on the type of environment polluted, be punished pursuant to the applicable Environmental Protection Laws and be subject to administrative fines in an amount assessed based on the seriousness of the Polluting Acts.  The maximum amount of fine is NT$ 1.5 million per day, which shall be imposed continuously until the Polluting Entity corrects the Polluting Acts within a prescribed period as ordered by the competent authority.  Moreover, according to the Administrative Penalty Act, if the gain acquired by the Polluting Entity exceeds the amount of the maximum statutory fine, the fine may be increased up to the amount of the gain, regardless of the statutory amount.  In addition, the Polluting Entity shall be responsible for cleaning up the polluted site.  In severe cases, the Polluting Entity may even be ordered to suspend or close itsbusiness, and the competent authority may also revoke the Polluting Entity’s pollution discharge permit.
Regarding criminal liability, if a Polluting Entity’s responsible person, representative, employee or other relevant person violates the Environmental Protection Laws when operating the business, the actual offending person will be punished criminally, and a criminal fine of up to NT$ 15 million may also be imposed on the Polluting Entity.

  1. Criminal liability of the Polluting Entity’s responsible person

To impose an obligation to prevent pollution on the responsible person of a company, the responsible person may be sentenced for up to 3 years of imprisonment, in conjunction with a criminal fine of NT$ 300,000 to 1.5 million according to the Environmental Protection Laws, even when the pollution is caused by the company.  In addition to the Environmental Protection Laws, discharging harmful substances is also a crime punishable under the Criminal Code.  The offender committing said crime shall be sentenced for up to 7 years of imprisonment.  If the offense results in the death of another, the offender shall be sentenced to no less than 7 years, up to life imprisonment.
With respect to the scope of “responsible person” under the Environmental Protection Laws, courts have held that “responsible person” is the responsible person as defined under Article 8 of the Company Law.  If the Polluting Entity is a company limited by shares, the chairman of the board shall be punished, even if the chairman is not the actual offender.

  1. Criminal liability of the actual offender

Where the pollution is caused by a company, the actual offender will also be punished according to the Environmental Protection Laws.  The actual offender shall be sentenced for up to 10 years of imprisonment depending on the seriousness of the pollution, in conjunction with a criminal fine of up to NT$ 100 million.  If the pollution results in the death of another, the offender shall be sentenced tono less than 7 years of imprisonment, up to life imprisonment.
Take the recent case that was widely discussed in the media as an example, the accused manufacturer had been discharging waste water containing hazardous substances into a river.  According to the Water Pollution Control Act, the competent authority may impose an administrative fine of up to NT$ 600,000 on said manufacturer, and order the manufacturer to correct the polluting act within a prescribed period of time and to suspend or close the business.  The competent authority may also revoke the manufacturer’s discharge permit and also impose a criminal fine of up to NT$ 1 million.  In addition, the responsible person of said company may be subject toimprisonment of up to 3 years.  Should the company’s pollution cause a public hazard, the responsible person can also face imprisonment of not less than 7 years or even life imprisonment if the pollution results in the death of another.

Find a Broker or Underwriter

Search by product, location or name
https://premium.insurancebusinessmag.com/us-iba-5-star-wholesale-brokers-and-mgas-2023-rt-specialty/p/1https://www.newsweek.com/rankings/most-loved-workplaces-america-2023https://www.insurancebusinessmag.com/us/best-insurance/best-insurance-companies-to-work-for-in-the-us--top-insurance-employers-2023-453773.aspx

Please Update Your Browser

Unfortunately Microsoft is no longer providing support or security fixes for your web browser. RT Specialty values the safety and security of its clients’ data, and as such this site requires the use of a modern web browser. To update your web browser, please see the links below. If you have any questions or would like additional information, please email info@rtspecialty.com or call (312) 784-6001.

Firefox Firefox Chrome Chrome IE Internet Explorer Edge Microsoft Edge