October 17, 2008 / 1:18 AM / 9 years ago

Argentina makes environmental insurance a must

2 Min Read

<p>Splinters of ice peel off from the Perito Moreno glacier, near the city of El Calafate in the Patagonian province of Santa Cruz, southern Argentina, July 7, 2008.Andres Forza</p>

BUENOS AIRES (Reuters) - Argentine officials said on Thursday theirs is the first government worldwide to require that companies engaged in potentially hazardous activities buy insurance to cover environmental damage.

Government officials said preliminary figures show that about 35,000 companies would have to comply with the new rules.

"Argentina is taking a leadership role in the region on this issue," Sergio Chodos, an undersecretary at the Environment Secretariat, told Reuters.

"There's a lot of environmental insurance sold in Europe, but it's not obligatory because it doesn't have to be. In Argentina, lawmakers understood that this had to be made obligatory," he said.

Argentina's Congress passed a law to this effect in 2002 and it was finally implemented last month.

The insurance policies will range in price from 120,000 pesos ($36,090) a year to 50 million pesos ($15 million), depending on a given company's activities, output and the potential risk involved.

Only one insurance company is currently authorized to sell this type of coverage in Argentina, but others are applying to do so, officials said.

($1= 3.325 Argentine pesos)

Reporting by Karina Grazina; Writing by Hilary Burke; Editing by Gary Hill

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