June 22, 2024


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The Mounting Perils of Plastic

There is now an estimated 30 million tonnes of plastic waste in seas and oceans and 109 million tonnes in rivers. What are the risks associated with plastic production and usage, and how can firms reduce their exposures?

Haul in a fish from the remotest seas, and odds are high you will find plastic in its stomach. The tiny fibers could have come from washing- machine wastewater, personal care items flushed down toilets, or the disintegration of plastic bags and wrapping.

The presence of plastic in fish living in even the deepest, darkest oceans is an indication of how pervasive this human-made material has become. Rising from two million tonnes a year1 in 1950, annual plastic production rocketed to almost 391mn tonnes in 20212 – and only a sliver is recycled.

The first fully synthetic plastic was patented in 1907. Over 100 years later, the substance dominates our world. Our homes and offices are filled with it. We clean our teeth with plastic toothbrushes, drink and eat food from plastic containers, and wear clothes derived from it.

Plastic is now so prevalent it has entered the fossil record as a marker of our age. But plastic harms our health and the environment. It pollutes our landscapes, oceans, air, and bodies. We ingest or inhale these substances daily. And, increasingly, plastics are a source of litigation.

Plastic-related pollution: a lingering liability

A report by the Minderoo Foundation indicates 2022-2030 is likely to see a wave of plastic- related corporate litigation. This could reach $20bn-plus in the US alone, it estimates3. Produced in partnership with Praedicat and law firm Clyde & Co, The Price of Plastic Pollution notes litigation is mainly expected to affect the petrochemical industry. Still, claims could be brought against major consumer companies.

Arthur Lu, Head of Environmental Impairment LiabilityatAllianzGlobalCorporate&Specialty (AGCS), says companies must prepare: “Depending on where your company sits on the spectrum of the plastics industry, it could be at risk of claims from human health exposures to chemical additives, environmental damage or human health exposures to ‘MNP’.” These are microplastics, less than 5mm or one fifth of an inch in length, and nanoplastics, which measure around 1nm to 1mm (4e-8 to 0.04 inches). They can enter the environment through industrial processes, plastic waste, cosmetic products, or degradation.

 “Another potential area of legal action lies with directors and officers who ‘greenwash’ their sustainability claims,” adds Lu.

The first warning shots have been fired. Last year, an American coffee company settled in the US and Canada with a consumer and regulator respectively, after being challenged on claims about the recyclability of its disposable coffee pods. Earth Island Institute, a California-based environmental group, has also filed three separate lawsuits against producers of plastic goods. It made a name for itself by suing renowned brands for creating a plastic pollution ‘nuisance.’4

In January this year, three NGOs filed a lawsuit against a food company in France, claiming the firm’s failure to set a plastic phaseout strategy goes against France’s 2017 corporate duty of vigilance law. The NGOs are not seeking damages but to force the company to assess its plastics use and update its vigilance report with a plastics strategy.

“This is one example of litigation moving from the petrochemical industry to other downstream sectors, such as food and beverage,” says Lu.

“There have not yet been any large losses in judgments or payouts. But the risks companies are exposed to will vary depending on if they manufacture resins, use plastics as a large part of their products or packaging of products, how prevalent they are in the consumer supply chain, and how rigorous their risk management is when it comes to reporting, communication, compliance and transparency.”

The chemical romance that soured

Before the Second World War, the petroleum and chemical industries began forming alliances driven by the desire to use waste material from processing crude oil and natural gas. During this period, polyethylene (polythene), Teflon and nylon were developed. Nylon stockings sold four million pairs in four days on their release in the US in 1940. But plastic production really ramped up after the war. Malleable plastic began to replace more expensive paper, glass and metal used in throwaway items, such as consumer packaging. Plastic appeared in polythene bags, polystyrene food containers, PET (polyethylene terephthalate) bottles, and toys.

Andreas Merkl, Senior Advisor to the Minderoo Foundation and a report author, notes the health implications of microplastics in our bodies are not yet fully known.

“Many people noticed the post-war plastic production boom accompanied a parallel rise in human health disorders ranging from autism and ADHD to certain autoimmune diseases, obesity, declining reproductivity success, and development disorders. They wondered, was this correlation or causation?” Merkl said at the report’s launch.

Plastic that is not adequately disposed of can find its way into the wider environment. An estimated 30mn tonnes of plastic waste is now in the seas and oceans and 109mn tonnes in rivers5. The properties that make plastic so useful and durable also make it difficult to dispose of. A plastic bottle can take 450 years to decompose in a marine environment, a plastic drinks holder with six rings can take 400 years, and a plastic bag 20 years6. Some plastics take thousands – even tens of thousands – of years to decompose in landfills. Degradation is also a problem. UV radiation, oxidation and friction break plastic down into microscopic particles that pollute our ocean, air and ecosystems.

“The synthesis and analysis we conducted, which involved the review and meta-analysis of thousands of scientific papers, shows the causation link is no longer in doubt. Plastic is contributing significantly to the rise in these human health disorders.”

Claudia Donzelmann, Global Head of Regulatory and Public Affairs at Allianz, served on the advisory board for the report. “As an insurer, we take on risks, so we need to understand what risks are emerging and what it means for us, our clients and other stakeholders. What can we do as an insurance company to help solve an important social challenge? There has been a massive voluntary engagement by the insurance industry on net zero, and our interest is how we can achieve the same with plastics.”

The lasting threat of ‘forever chemicals’

The chief danger is the chemicals routinely added to ensure plastics remain pliable and strong. Many of the most hazardous chemicals – phthalates, bisphenols, and fluorinated compounds – are found in bottles, food packaging, consumer packaging, wires, cables, tubes, hoses, fabrics, and construction materials.

Exposure to bisphenol A (BPA) and phthalates is linked to potential health impacts, including disruption of human hormones. Then there are PFAS (per- and polyfluoroalkyl substances), or ‘forever chemicals’. Not found in nature, PFAS barely degrade in the natural environment.

They have been found in drinking water and the blood and breastmilk of humans and wildlife worldwide. A 2021 study8 found PFAS are used in disposable food packaging from takeaway restaurants and supermarkets. They are also found in non-stick cookware, cosmetics, textiles and electronics.

Lu says the sectors most exposed to litigation will vary according to the plastics used. “It could include companies in the consumer goods sector that use chemicals in food-contact materials, clothing, cosmetics or toys,” Lu explains.

“For MNPs, it could include companies that add microplastics to products, such as personal care products. Other sources of MNPs can arise from the breakdown of macroplastics [larger than 5mm] during use or disposal, such as the wearing down of rubber tires.”

Plastic pathways must be identified

Liability risks are likely to be first evident in bodily injury claims sought by workers. Precedents exist in employers’ liability litigation, particularly in the US, where public nuisance law could provide a basis for claims, as was seen in recent opioids litigation.

Liability risks are likely to be first evident in bodily injury claims sought by workers

“Plastics are ubiquitous,” says Lu. “With many companies involved in the production chain, potential implications are high. But identifying source points or responsible parties for alleged damages or injuries will be challenging.”

Lu advises companies to protect themselves by identifying how the plastics pathways connected to their processes could cause pollution and how they can be eliminated, including in product design, R&D, waste and chemical management.

“Mitigation should also include looking to transition to sustainable alternatives, particularly for MNPs. For companies involved in the chemical side, it’s stopping the use of substances tied to adverse health effects.” However, Lu adds that substitution with alternative materials could incur higher costs and the possibility of knock-on effects such as higher greenhouse gas emissions, so finding a one-size-fits-all solution is not straightforward.

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