Global Chemicals Outlook - UNEP

) Disastrous incidents make the headlines, but the true
costs of chemical mismanagement are dispersed and
hidden throughout the population and over time. Such
costs are typically carried by a nation’s social welfare
system and individuals.
c) The chemical intensifi cation of
developing country economies has
the potential to make this situation
worse. The supply chain is now
longer and therefore harder to
manage; products are more likely
to fail to meet standards, and
recourse from those parties originally
responsible for failure is more
diffi cult to obtain, thus necessitating
remediation from those who are
‘downstream’, or from public bodies
in the end-markets. Producers or
importers/exporters may be held
legally liable for harm caused
by poor quality products and
services, but in many cases it is their
reputation value amongst consumers
and investors that is at stake.
COSTS OF ACCIDENTS
US$ 19 million reported
profi t made by Trafi gura
for the 2006 ship leased
“Probo Koala” with
a shipment of coker
gasoline. Total costs
paid out by Trafi gura
to date for waste
dumping incident equal
approximately
US$ 250 million.
US$ 600 million to date:
treatment of contaminated
sludge from the Minamata
mercury pollution incident;
Over 47,600 people
likely to be compensated
in the legal process.
d) The insurance sector has been working with the
public sector to develop ‘safety nets’ in the sphere
of fi nancial support for large segments of society,
through innovative products and services for health
care, income replacement, and death-related
compensations, but so far these are not seen
as part of the solution for handling externalities
due to chemical mismanagement. In terms of
direct risk transfer, insurers are cautious about
involvement with ill-defi ned risks with potential
for major costs. However, shares in chemical
companies are a signifi cant element of global
stock markets, and therefore movements in
their value are of major concern to institutional
investors. Further, it is becoming clear that
chemical risks affect a much broader range of
companies than simply the chemical sector. In
recent years, there have been approaches by
socially responsible investments (SRI) actors in
alliance with NGOs, to policymakers seeking
to create a more comprehensive regulatory
framework for chemicals of high concern.
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