South Korea prompts damage compensation in environmental accidents by stricter rules on purchase and change of environmental liability insurance

The Ministry of Environment (MOE) of South Korea announced that on April 11, 2024, a partial amendment to the Presidential Decree on the Act on Liability for Environmental Damage and Relief Thereof (hereinafter “Environmental Remedy Act”) was passed by the Cabinet, for the purpose of reducing blind spots present in existing environmental liability insurance and prompting compensation to victims via such insurance. According to MOE, the amendment goes into effect on April 19, 2024.

The amendment has clarified details on purchase of and change to environmental liability insurance, including the types of documents to be submitted by operators when purchasing an insurance, and requirements and process flow for damage investigation requests and environmental safety management to be performed by MOE. In addition, detailed rules for the inspection of environmental safety management performed at facilities that intend to purchase environmental liability insurance. For existing insured business operators, criteria for administrative penalties to be imposed have been established for failure to reflect changes in their business permits and licenses in their insurance policies.