Report sees ‘colossal' legal risk from plastics pollution

The petrochemical industry could face "potentially colossal" liability claims over plastic in the environment and its impact on human health in coming decades, according to a new study from the Minderoo Foundation.

The Oct. 14 study, "The Price of Plastic Pollution: Social Costs and Corporate Liabilities," said makers of chemical additives are most vulnerable but it also said plastics resin makers could face liability from micro- and nanoplastic pollution.

Minderoo, which said the research was supported by the United Nations Environment Programme Finance Initiative, pegged liabilities at $20 billion in the short term, by 2030, and much higher after that.

The project included an advisory board with insurance industry participation. It said legal action is expected to center in the United States."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," said Geoff Summerhayes, a former executive board member of the Australian Prudential Regulation Authority and former chair of UNEP's Sustainable Insurance Forum.

"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," he said in a news release from Minderoo.

As well, an executive at insurance firm Allianz said the report was an important step for the industry.

"It is important that we better understand the risks associated with plastics and move beyond buzzwords," said Claudia Donzelmann, global head of regulatory and public affairs at Allianz. "The depth of analysis in this research is an important contribution."

Minderoo, a philanthropy founded by Australian mining and minerals billionaire Andrew Forrest, said the plastics industry faces legal risks similar to those for fossil fuel manufacturers over climate change.

"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 foundation said.

The report said evolving research and legal thinking will increase the risks to the plastics industry.

"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," Minderoo said.

"Our research accelerates the growing list of health risks," said Forrest, who is chairman of the foundation. "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."

An executive at the insurance risk consulting firm Praedicat Inc., which helped write the report, said the information in the study can "provide a road map for better underwriting."

"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," said Praedicat CEO Bob Reville. "It may, in fact, have more potential for insurance losses because of the way in which it's driving direct bodily injury."

Joshua Baca, vice president of plastics at the Washington-based American Chemistry Council, said the Minderoo Foundation’s report “was designed to generate headlines; we disagree with its characterizations and claims about our industry.”

He added: “It’s important that we better understand the risks of a world without plastics and move beyond the rhetoric. Plastics are essential to a lower-carbon future, enabling solar and wind energy, insulating homes, preventing food waste and lightweighting vehicles. Plastics are essential to innovation, from space exploration to cutting-edge medical advances. Without plastics, our future would look much like the past.”

Baca said the U.S. plastics industry is “laser-focused on creating a circular economy in which these essential materials are captured and remade, over and over, so that society can retain the myriad benefits that make modern life possible.”