Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger and William Upton consider the jail sentence recently received by a waste operator, the reduction in Environment Agency enforcement officers, and the failure of the latest challenge to Cuadrilla’s Lancashire fracking plan.

 

Waste site operator jailed for 8 months

John Millen, trading as K.M. Millen Grab Hire, was sentenced to 8 months imprisonment on 12 April at Maidstone Crown Court after the EA found that over 40,000 tonnes of construction and demolition waste had been deposited illegally at his site in Sittingbourne, Kent. No environmental permit existed for Mr Millen’s waste activities at the site.

The EA issued an enforcement notice requiring Mr Millen to clear the site within 3 months. However, not only had none of the waste been removed, there was evidence that Mr Millen had continued to crush, treat and deposit construction and demolition waste.

Mr Millen received the custodial sentence even with credit for a guilty plea. The fact that he had ignored the advice and warnings provided by the Environment Agency was considered by the Court to be a significantly aggravating feature.

 

EA cuts frontline enforcement staff

ENDS has reported that the number of environment officers employed by the EA has fallen by over a third in the last five years and that more are expected to leave. The fact that there has been such a significant reduction creates concern that less time can be spent on inspection and enforcement, investigating illegal waste operations and responding to pollution incidents.

Legitimate businesses have previously raised the importance of tackling waste crime with the Government. This led to an additional £5 million funding being secured in order to tackle waste crime in 2014 and the Government Spending Review 2015 secured an additional £23 million for the EA to tackle waste crime up until the end of March 2020.

However, while the EA’s waste crime budget increased in 2015-2016 at just over £14.8 million compared with £14.4 million in 2014-2015, it should be noted that the budget has decreased from £17.4 million in 2011-2012 – a reduction of £2.6 million.

By the end of 2015-2016, HMRC recorded that there were 622 known illegal waste sites operating in England. It has previously been calculated that for every pound spent on enforcement there would be a likely return of as much as £5.60 (see ‘Waste Crime: Tackling Britain’s Dirty Secret’, published March 2014).

The Government is currently consulting on whether to bring illegal waste sites within the scope of landfill tax – the consultation is due to close on 5 May and can be found here

 

Planning challenges dismissed against Cuadrilla

The latest challenge to fracking in Lancashire by Cuadrilla has failed. The High Court rejected arguments that the grant of planning permission by communities secretary Sajid Javid in October was defective due to inconsistencies with the Council’s planning policies as well as arguments over alleged deficiencies in the environmental impact assessment.

No fracking has taken place in the UK since 2011 when earth tremors were caused during fracking operations at another Lancashire site. Folliwing this ruling, the drilling rig for the wells is expected to arrive within weeks. The process of hydraulic fracturing is not expected to begin until later in the summer.

 

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Six Pump Court will be presenting a series of Environmental and Public Law Seminars from May onwards – click here for more details

What will be the impact of ‘No Deal’?

 

The Government has said that it would rather accept no deal than a bad deal for the UK, yet it accepts that no economic assessment has been performed that might evaluate the cost to the UK economy if no deal is reached with the EU by the end of the Article 50 process. We consider a few of the potential effects of failing to reach any form of agreement.


The limitations of the Great Repeal Act

The enactment of the Great Repeal Act will ensure that most EU legislation in force in the UK at the time of Brexit will remain in force, unless and until it is amended and/or repealed. It simply isn’t possible for the UK government to review all elements of the UK legal system that derives from EU law within the timeframe of the Article 50 process.

However, maintaining the legislative status quo will not be sufficient where, for example, EU agencies exercise regulatory functions that apply to organisations within the UK. The effect of a Brexit without any form of agreement would be to leave potentially significant regulatory gaps. The UK would either have to develop alternative agencies or to attempt to negotiate continued participation in the activities of the agency in question.

Examples include:

• The European Food Safety Authority (which evaluates products involved in the food chain and provides scientific advice and technical support);

• The European Chemicals Agency (which reviews chemicals registered under REACH by manufacturers and importers)

• Financial Services Supervisory Agencies (a number of agencies and institutions have a regulatory or policy function in relation to financial services).

• The European Medicines Agency (which provides for a single assessment and marketing authorisation valid throughout the EU for pharmaceutical products);

• The European Aviation Safety Agency (which regulates aviation safety through a certification system for equipment, aircrew and undertakings involved in civil aviation);

Tariffs
Immediately following a Brexit without any form of agreement, the UK would be required to trade on WTO terms. As identified in a previous post, in such a situation the UK plans to adopt the same tariff schedules as it currently applies as part of the EU (albeit that some of the tariffs may prove harder to substitute than others).

It isn’t certain that the UK would have secured agreement on its proposed schedules by the end of the Article 50 process. This may lead to the newly independent UK trading with the EU on WTO terms, where the EU applies its current common customs tariff (that currently applies to all imports from non-EU countries unless another form of agreement has already been negotiated) and the UK applies its own schedules based on the common customs tariff (which it intends to be the basis for its WTO schedules).

The UK may try to take advantage of the free trade agreements that have already been negotiated on its behalf by the EU with other countries (through a simple but binding international agreement), but where no free trade agreement exists, the UK would also trade on WTO terms with the rest of the world.

While tariffs on UK exports to the EU would on average be low, in some sectors they would be high enough to inflict serious damage on UK trade. By way of two examples, WTO terms based on the common customs tariff require a 10% tariff on the import of cars and 30-40% on the import of some agricultural products, including meat and dairy produce.

Passporting
Passporting means the ability of a UK financial operator, capitalised and regulated in the UK, to carry on business throughout the EU without the need for subsidiaries in other EU countries to be capitalised and regulated in those countries.

If Brexit leads to trading on WTO terms without any form of transitional arrangement, this would lead to the immediate loss of passporting rights for UK financial services providers. This is because such rights are available under EU single market legislation, but would not be guaranteed under WTO rules. A UK financial institution that therefore relies on passporting to carry on cross-border business in the EU would have to terminate its business unless it had set up a subsidiary which was capitalised and regulated within the EU.

It should be pointed out that there is no guarantee that passporting rights would remain in a future trade agreement between the EU and the UK, although it is to be anticipated that this will be one of the focal points of the negotiations.

UK banks and other financial institutions are likely to make contingency provisions, at a time much earlier than the deadline for the Article 50 process and potentially significantly in advance of any potential agreement (even in an outline form). This may lead to passporting being less of an issue than first thought, as the benefit of retaining passporting will have already been lost. Alternatively, the UK is currently the EU’s leading financial centre and it may still be considered that obtaining equivalence rights for UK financial service providers is worth fighting for. Savvy EU negotiators may consider this a bone to throw to the UK when and if the practical effect of the Brexit process is that the major financial institutions have already relocated their business.

 

Please note – the next Brexit Law Update will be published on Wednesday 19th April

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Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger and William Upton consider the issues of marinas on the River Thames, pressure for an International Court for the Environment, and the possible impact of Brexit on “environmental dumping” in the UK.

 

High Court considers marinas to be part of the Thames

In Environment Agency v Paul Barrass and others [2017] EWHC 548 (Admin) heard on 21 March, the High Court decided the controversial question of whether or not marinas – essentially man-made areas for mooring small boats and siting houseboats – form part of the River Thames.

The question is controversial because a positive answer would result in the owners of vessels kept in the marina, including houseboats, qualifying for a registration fee, payable to the Environment Agency, under the Environment Agency (Inland Waterways) Order 2010. Some owners of houseboats in the relevant marinas object to paying this fee, in addition to paying Council Tax, due in part to the fact that the houseboats are permanently moored and consequently derive no benefit from having to pay the EA for its role in protecting the public right of navigation down the River.

As a matter of construction the High Court held that the marinas in question are in fact part of the Thames. The judgment is unlikely to form part of any Easter holiday reading list but it does finally put to bed an issue that has been the subject of much debate in the last 7 years.

 

Call for an International Court for the Environment

Stephen Hockman QC gave a lecture on 29 March at Middle Temple Library promoting the concept of an international court for the environment, either in the form of an independent tribunal set up by treaty or as an extension of the current International Court of Justice. The fundamental premise was that, as an international issue, protection of the environment requires a supra-national body capable of establishing the legal principles by which governments and organisations can be held to account by way of civil remedy, and by which the justification for their actions can be defined.

The lecture raised a number of interesting issues for debate including:

  1. Does the general trend of anti-globalism currently sweeping the UK and the US demonstrate the key difficulty of establishing a new supra-national authority;
  2. Does the current focus on permitting emissions through the use of a trading scheme have the effect of legitimising pollution of the environment, rather than appropriately sanctioning pollution in a manner that might be enforced through the development of the “ICE”; and
  3. Does the fact that no mention is made of “development” hinder the prospect an “ICE” gaining any traction in developing countries.

A copy of the lecture can be found here. Any thoughts gratefully received.

 

Brexit and “environmental dumping”

The UK Government has published a White Paper the day after the Article 50 letter was delivered (“Legislating for the United Kingdom’s withdrawal from the European Union” (Cm 9446, March 2017)). Having lauded the tangible environmental benefits that national, European and international law has delivered, it states:

“The Great Repeal Bill will ensure that the whole body of existing EU environmental law continues to have effect in UK law. This will provide businesses and stakeholders with maximum certainty as we leave the EU. We will then have the opportunity, over time, to ensure our legislative framework is outcome driven and delivers on our overall commitment to improve the environment within a generation. The Government recognises the need to consult on future changes to the regulatory frameworks, including through parliamentary scrutiny.”

The emphasis in the future on an “outcome driven” framework for the UK will be a departure from the process-driven approach of much European law. It also begs the question about how far the European Union will allow that to distort what they see as fair competition.

At this stage, the message from the President of the European Council in his “Draft guidelines following the United Kingdom’s notification under Article 50 TEU” (31 March 2017; ref XT 21001/17), is still broad-brush and about the principles. The draft of the Guidelines only mention the environment in passing. But it looks like the debates that we have had in the past about the relationship between national regulation and European competition rules may be about to recur. The draft will be considered at the European Council’s meeting on 29 April. The President has suggested that the Council’s response to the British government’s indication that it would like to pursue an ambitious free trade agreement with the European Union is to state that “it stands ready to initiate work towards such an agreement, to be finalised and concluded once the United Kingdom is no longer a Member State”. He has also suggested that they should state that:

“19. Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning. It must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping.”

 

Six Pump Court will be presenting a series of Environmental and Public Law Seminars from May onwards – click here for more details

 

Please note – the next Environmental Law News Update will be published on Tuesday 18th April

 

To keep up-to-date follow us on Twitter @6pumpcourt or contact bridgettough@6pumpcourt.co.uk to be added to the mailing list. If you have any comments or suggestions please feel free to contact us.