No Plastic Waste14 Oct 2022

Plastic pollution could trigger colossal legal claims against petrochemical industry, amid compelling evidence of serious harm to human health

A detailed study shows that plastic’s range of harmful impacts could trigger potentially colossal liability claims against the petrochemical industry.

A bulldozer pushes a pile of trash in a pit in San Francisco, California. Photo Credit: Justin Sullivan via Getty Images.

The costs to society from plastic pollution — including environmental clean-up, ecosystem degradation, shorter life expectancy and medical treatment — exceed US$100bn per year, according to new research which sheds light on the growing global plastics crisis. The harm to human health is just as damaging as plastic pollution’s more widely recognised impact on the environment, the research shows.

A detailed study by Minderoo Foundation and undertaken with legal firm Clyde & Co and Praedicat, a liability risk consultancy, shows that plastic’s range of harmful impacts could trigger potentially colossal liability claims against the petrochemical industry, which manufactures the polymers and chemical additives used in plastic.

Just as oil and gas companies are now starting to be held legally and financially accountable for the climate change impact of their products, and chemicals companies for damaging the environment and human health (e.g. PFAS, glyphosate), a new wave of litigation is expected to emerge around plastics.

The report finds that just like fossil fuel companies and the climate impact of their products, plastic producers and distributers create the most extreme negative nature and human harming externalities ever witnessed in the history of mankind: a price borne by every child, woman and man on this planet.

Legal action is expected to centre on the US, where the study forecasts corporate liabilities from plastics litigation triggered in 2022-30 could exceed US$20 billion. Future claims, beyond 2030, could be an order of magnitude larger.

The research is supported by the United Nations Environment Programme’s Finance Initiative.

  • The study finds that manufacturers of chemical additives used in plastics, many of which have well-established, harmful links to human health, are the most exposed to litigation risk.
  • Also exposed are manufacturers of plastic polymers, whose products ultimately degrade into micro- and nanoplastic particles which persist in the environment for decades, entering the human food chain; and which are rapidly emerging as major public health and environmental threats.
  • These companies have been protected against financial consequences by the complexity of attributing pollution back to its source, but scientific methods and legal doctrines are evolving; plastic pollution liabilities are expected to follow.
  • The plastics industry, shareholders, insurers and regulators need to work urgently together to disclose the scale of exposures and liabilities to date, to prevent further damage and set aside the resources necessary to deal with the consequences.
  • Dr Andrew Forrest AO, Chairman of Minderoo Foundation, said: “Corporations have polluted this world with billions of tonnes of plastic products, and continue to do so despite knowing that many contain toxic chemicals that arrest cognitive development, reduce reproductive viability and increase cardiovascular disease and obesity.

“Our research accelerates the growing list of health risks. It is only a matter of time before the courts, regulators, and lawmakers determine who will pay the cost of poisoning our planet and people.

“For plastics producers, and above all their shareholders and insurers, now is the time to be asking yourself hard questions. What liabilities have your historical emissions left you exposed to? Are you doing enough to eliminate them in the future? What will your personal liability be for only looking at your profit and loss statement?

“The question is no longer are you a good plastics industry director? It is, what are you doing to help society reduce then eliminate the burden of ubiquitous and toxic plastic pollution, while you profit from its harm?”

Geoff Summerhayes, Former Executive Board Member, Australian Prudential Regulation Authority and former Chair, UNEP’s Sustainable Insurance Forum, warns leadership to act with urgency to disclose the magnitude of the plastic pollution problem. Summerhayes said: “We need to understand what we’re dealing with so that industry and insurers alike can set aside the resources required to deal with the consequences.”

“This report is a fact-based resource to guide the efforts in preventing further accumulation of plastic-related toxins — the natural, health-related, and economic scale of damage is now starkly clear, and collectively we must act for change.”

Claudia Donzelmann, Global Head of Regulatory and Public Affairs at leading global insurer Allianz, who was part of the project advisory board, said: “It is important that we better understand the risks associated with plastics and move beyond buzzwords. The depth of analysis in this research is an important contribution. We need more transparency, more sharing of knowledge, as that is what leads to action.”

Bob Reville, CEO of Praedicat, said: “The plastics issue is something that we’ve been referring to as the next climate since it is an enormously widespread and systemic environmental and health risk. It may, in fact, have more potential for insurance losses because of the way in which it’s driving direct bodily injury. At the same time as the insurance industry incorporates the science around plastic risks into its underwriting, it can help corporations mitigate the potential for loss, both for the companies and the environment. The information in the report can provide a roadmap for better underwriting.”

The study’s conclusions offer a previously unheard-of chance for policymakers to address the risk and societal costs associated with plastic pollution, and they should be taken as a warning to the plastics sector that ignoring the problem at hand is no longer an option.

Minderoo Foundation
by Minderoo Foundation

Established by Andrew and Nicola Forrest in 2001, we are a modern philanthropic organisation seeking to break down barriers, innovate and drive positive, lasting change. Minderoo Foundation is proudly Australian, with key initiatives spanning from ocean research and ending slavery, to collaboration in cancer and community projects.

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