Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger, Charles Morgan and Mark Davies consider the penalties imposed on an owner of a waste and recycling  company, the law on the duty of care held by a parent company, and Client Earth’s plan to renew its air quality challenge.

 

Waste boss to pay £1.99 million or be jailed for 8 years

The owner of a Wiltshire scrapyard and recycling company has been ordered to pay a confiscation order of £1.99 million as a result of his involvement in running an illegal waste site in Melksham. If he doesn’t pay, then he has been warned he will face an 8-year prison sentence.

Lee Hazel was the owner and sole director of Melksham Metals Recycling Ltd. He and his company illegally dumped stone off-cuts and sludge at a farm on the outskirts of Melksham beside an old canal, as well as carrying out unauthorised activities at the company’s premises.

Mr Hazel and the company were convicted in 2014 at Swindon Crown Court and pleaded guilty to a number of other offences in November 2015.

The case demonstrates the following:

  • the Environment Agency is still quite prepared to pursue confiscation orders in appropriate cases. This report follows hot on the heels of another prosecution by the Environment Agency where a confiscation order was used as a means of compensating a landowner who faced the costs of site clearance for an illegal waste site (see more here)
  • Resolving confiscation proceedings can still take an inordinate amount of time, given that the original conviction dates back to 2014;
  • There is still scope for careful consideration of the legal issues in confiscation proceedings. In this case, the confiscation order was reduced from £2.74 million to £1.99 million because the Environment Agency had wrongly included a figure for VAT when calculating the value of the benefit figure.

The Environment Agency’s press release can be found here

 

The law on the duty of care held by a parent company and resulting jurisdiction of the English Courts

In Lungowe and others v Vedanta Resources plc [2017] EWCA Civ 1528 the Court of Appeal upheld the decision of Coulson J. permitting group litigation concerning the activities of the Nchanga copper mine in Zambia to proceed in the English High Court.

The mine is owned and operated by Konkola Copper Mines plc (“KCM”) a company incorporated in Zambia and its largest private employer. Local residents claim that its activities have polluted watercourses in a manner which renders KCM liable to them in Zambian law in negligence, nuisance, Rylands v Fletcher, trespass and under Zambian legislation imposing strict liability. As both Coulson J. and the Court of Appeal observed, the claims against KCM were the obvious ones to be pursued and the courts of Zambia were the obvious ones in which to pursue them:

“The claimants are all Zambian citizens, resident in Zambia. The claims involve personal injury or damage to land; the injuries were suffered in Zambia and the land that was damaged is also in Zambia; the alleged discharges into the waterways occurred in Zambia, so the place of the commission of the alleged tort is Zambia; the Nchanga mine is owned and operated by KCM, a Zambian company, operated pursuant to the terms of a Zambian licence; the proper regulation of the mine would have to be considered by reference to Zambian statutes and regulations; and the applicable law is Zambian law.”

The only connection between these events and circumstances and England was that the ultimate holding company of KCM, Vedanta Resources plc, is incorporated and thus domiciled in England. It employs 19 people and has assets worth c. £37 billion.

The local residents sued both Vedanta and KCM in the English High Court. Against Vedanta, they alleged breach of a duty of care arising essentially from an assumption of responsibility over the operations of KCM and relied upon Vedanta’s domicile as founding mandatory jurisdiction under the Recast Brussels Regulation. Vedanta challenged jurisdiction and further sought a discretionary stay even if jurisdiction existed. KCM also challenged jurisdiction on the basis of forum non conveniens and sought to set aside service upon it out of the jurisdiction. The Court of Appeal upheld the decision of Coulson J. to allow the claims to proceed against both Vedanta and KCM.

The Court of Appeal (Simon LJ, with whom Asplin and Jackson LJJ agreed) first held, crucially, that the High Court had mandatory jurisdiction over Vedanta under the Regulation. The court then concluded (1) that the claimants had a real prospect of success against KCM (2) that there were real issues between the claimants and Vedanta arising out of both the statutory claims and the alleged duty of care (3) that it was reasonable for the High Court to try those issues (4) that KCM was a necessary and proper party to the claims against Vedanta, the two being “broadly equivalent defendants” (5) that (entirely because of the claim against Vedanta) England was the appropriate place to try the claims. Further, there were real concerns over the claimants’ access to justice in Zambia given their means and the potential cost, although Simon LJ also noted that “There must come a time when access to justice in this type of case will not be achieved by exporting cases, but by the availability of local lawyers, experts, and sufficient funding to enable the cases to be tried locally.”

This decision (which repays full reading) turned emphatically on the mandatory jurisdiction over Vedanta under the Recast Brussels Regulation. The court rejected Vedanta’s residual argument that its invocation amounted in the circumstances to an abuse of EU law. Once jurisdiction against Vedanta was established (which the Court of Appeal considered to be the logical starting point), the fate of the claims against KCM was effectively inevitable.

The judgment contains a useful summary at appellate level of the principles governing liability of parent companies for the acts of their subsidiaries:

“(1) The starting point is the three-part test of foreseeability, proximity and reasonableness. (2) A duty may be owed by a parent company to the employee of a subsidiary, or a party directly affected by the operations of that subsidiary, in certain circumstances. (3) Those circumstances may arise where the parent company (a) has taken direct responsibility for devising a material health and safety policy the adequacy of which is the subject of the claim, or (b) controls the operations which give rise to the claim. (4) Chandler v Cape Plc and Thompson v The Renwick Group Plc describe some of the circumstances in which the three-part test may, or may not, be satisfied so as to impose on a parent company responsibility for the health and safety of a subsidiary’s employee. (5) The first of the four indicia in Chandler v. Cape Plc, requires not simply that the businesses of the parent and the subsidiary are in the relevant respect the same, but that the parent is well placed, because of its knowledge and expertise to protect the employees of the subsidiary … (6) Such a duty may be owed in analogous situations, not only to employees of the subsidiary but to those affected by the operations of the subsidiary. (7) The evidence sufficient to establish the duty may not be available at the early stages of the case.”

The full judgment is available here

 

ClientEarth plans to renew its air quality challenge

The latest shots have been fired in the ongoing battle between ClientEarth and the Government over air quality.

On 9 October it was reported that ClientEarth had sent a letter to the Government under the judicial review pre-action protocol, stating its intention to challenge, once more, the failures by the Government to produce an adequate air quality plan (“AQP”) or to ensure compliance with NO2 limits.

ClientEarth requested more information from the Government on 16 August 2017 following the publication of the third AQP on 26 July 2017 (pursuant to the 22 November 2016 ruling of the High Court); it must be presumed that the Government’s response to that request was not satisfactory in light of the 9 October letter.

It is perhaps notable that ClientEarth’s letter comes only weeks after the publication of Defra’s ‘Air Pollution in the UK 2016’ report (discussed by this blog two weeks ago). That report revealed that out of 391 local authorities, 278 now have Air Quality Management Areas (“AQMA”), showing a rise from 2010 when the number was 258. Local authorities are only required to designate AQMAs when air quality objectives are not being, or likely to not be, met.

The Government had until 20 October to respond to ClientEarth’s 9 October letter; given that the AQP was published on 26 July 2017, ClientEarth will have to act fast to avoid being accused of undue delay.

 

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.

 

Six Pump Court will be hosting a Regulatory and Planning Law Conference on 20th November in Leeds – click here

Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger and William Upton consider penalties incurred by United Utilities for drinking water contamination, the publication of the Government’s Clean Growth Strategy, and Defra’s annual report on air quality.

 

United Utilities fined £300,000 for drinking water contamination

On 10 October 2017, at Preston Crown Court, United Utilities were fined £300,000 and ordered to pay £150,000 costs following a prosecution brought by the Drinking Water Inspectorate.

Back in August 2015, Cryptosporidium was detected in water supplies from the Franklaw water treatment works that required 700,000 people to boil their water for a prolonged period. The event came about following problems with work by United Utilities to repair a leak in a major aqueduct that supplies the works. A planned change in operations allowed the entry of contaminated water from a service reservoir to the treatment process.

The Drinking Water Inspectorate prosecuted under section 70 of the Water Industry Act 1991. It is a criminal offence for a water company to supply water that is unfit for human consumption.

It is clear that the increase in penalties resulting from the use of the Environmental Sentencing Guideline has had an impact on these cases. Back in 2001, Yorkshire Water Services Limited successfully appealed the financial penalty imposed for 17 offences contrary to s.70, reducing its fine from £119,000 to £80,000. The incidents arose out of a mixture of bad planning, bad organisation, poor quality engineering and, in the case of one of the incidents, disregard of the alarm system for the second time in twelve months. It is difficult to imagine that Yorkshire Water would achieve the same result in today’s climate.

There are currently a number of drinking water cases that are currently making their way through the Courts. Expect to see further penalties for similar offences. The DWI’s press release can be found here

 

Clean Growth Strategy published

On 12 October 2017 the Government finally published its Clean Growth Strategy (“CGS”), which is intended to set out its strategy to meet its legal obligations under the Climate Change Act 2008 for the fourth and fifth carbon budgets covering the periods, 2023-2027 and 2028-2032. By the end of the fifth carbon budget the UK must reduce its greenhouse gas emissions by 57% against the 1990 baseline.

Key policies and proposals include:

• To develop world leading Green Finance capabilities, including the setting up of a Green Finance Taskforce;
• Develop a package of measures to support businesses to improve their energy productivity, on which it will consult and explore;
• Improve the energy efficiency of homes – recent news reports have suggested that the government may look at using stamp duty as a method of encouraging home owners to become more energy efficient although this is not mentioned in the CGS;
• Ending the sale of new conventional petrol and diesel cars and vans by 2040; and
• Publishing a new Resources and Waste Strategy.

Climate Change Minister Claire Perry asserted that the UK had more than met its targets in the second and third carbon budgets and was on track to meet the fourth and fifth budgets, a suggestion hotly disputed by ClientEarth which believes that the UK is on course to miss emissions reduction targets.

Whether the UK is or is not on course to meet its greenhouse gas emissions targets aside, what is clear is that the CGS marks a shift from the ‘carbon plan’ produced in 2011 for the third carbon budget, to a more economically focussed document with the Prime Minister writing in the foreword to the CGS, “Clean growth… benefits our wider economic prosperity.”

The full CGS can be found here

The interim National Infrastructure Assessment was also published last week, by the National Infrastructure Commission. The interim report examines seven key areas, and sets out what it considers are the priorities for helping meet the country’s infrastructure needs up to 2050. Those seven areas are:

• Building a digital society: fast, reliable data services everywhere.
• Connected, liveable city-regions: linking homes and jobs.
• New homes and communities: supporting delivery of new homes.
• Low-cost, low-carbon: ending emissions from power, heat and waste.
• Revolutionising road transport: seizing the opportunities of electric and autonomous vehicles.
• Reducing the risks of extreme weather: making sure the UK can stand up to drought and flooding.
• Financing infrastructure in efficient ways: getting the right balance between public and private sectors.

The deadline for responses to the consultation is 12 January 2018. The report can be found here

 

Defra reports on air quality

Defra has published ‘Air Pollution in the UK 2016’, its annual report on air quality required by the European Commission as a result of both the Council Directive on ambient air quality and cleaner air for Europe and the Air Quality Framework.

The report records (amongst other things):

• Six zones were compliant with the limit value for annual mean nitrogen dioxide. The remaining 37 zones exceeded this limit value.
• Four zones exceeded the target value for benzo[a]pyrene.
• Three zones exceeded the target value for nickel.
• All zones except one exceeded the long-term objective for ozone, set for the protection of human health.

Of particular concern is the fact that, in Defra’s equivalent 2015 report, Defra also stated that 37 zones exceeded the limit value for annual mean nitrogen dioxide. It is therefore not possible to identify any improvement in any part of the UK to the extent that a previously failing zone now meets legal limits. This failure is in spite of repeated legal battles on air quality and a Supreme Court judgment in April 2015 demanding “immediate action” to address air pollution.

The full report can be found here

 

Six Pump Court will be hosting a Regulatory and Planning Law Conference on 20th November in Leeds – click here

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.

Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger and William Upton consider calls from the Environmental Audit Committee for further views on chemicals regulation, the publication of Carbon Clear’s 2017 Sustainability Report, and the prohibitive costs generated by private nuisance cases.

 

Environmental Audit Committee calls for further views on chemicals regulation

The chemicals industry is the second largest exporter to the EU after cars. Chemicals regulation is important because it enables the sector to provide value to the economy whilst also protecting public health and the environment.

Some businesses that trade within the EU are responding to the uncertainty around the future of UK chemicals regulation by looking to move their operations overseas, putting UK jobs at risk.

I am disappointed that the Government hasn’t set out a plan to regulate this industry. With only 18 months until the UK leaves the EU, the Government must provide certainty to businesses in this sector.

These were the words of Mary Creagh, Chair of the Environmental Audit Committee as it called for further written submissions. Her sentiment doesn’t suddenly reflect a new concern. Back in April, a report by the EAC found that the Government then needed urgently to provide certainty to the UK chemicals industry over the future of chemicals regulation. The response of the Government is found in the Delegated Powers Memorandum to the EU (Withdrawal) Bill see here.

Paragraph 20 reads:

“In certain scenarios, a UK body may need to start evaluating and authorising chemicals in the UK taking over functions currently performed at a EU level. The European Chemicals Agency currently conducts evaluation and authorisation of chemicals under the REACH regulation (Regulation (EC) No 1907/2006). This function may need to be transferred so that consumers can continue to have confidence in the safety of certain chemicals and their proper regulation and international markets have sufficient confidence in the UK’s products so that UK businesses can continue exporting. In the event of no deal in this area, a UK government body would take on the functions of assessing chemical substances under the REACH regulation. Some sample drafting is at Annex A.”

The absence of any certainty on the future of chemicals regulation is deafening. It reflects a much larger concern about the prospect of a ‘compliance deficit’ and weakening of environmental standards following Brexit. The deadline to express views on the Government’s response is 5pm on Friday 20 October 2017.

 

Carbon Clear publishes 2017 Sustainability Report

Carbon Clear has published its research into the Sustainability Reporting Performance of businesses listed on the FTSE 100, IBEX 35 and CAC 40 indices. The focus of the report is on how some of the biggest companies in the world respond to investor calls for action on climate risk and legislative requirements, how they manage risk and future proof business operations and how they innovate to maximise on energy and emissions reductions opportunities and engage with stakeholders and beyond shareholders

The top ranking company in the FTSE 100 was Marks and Spencer, closely followed by BT Group. Interesting statistics identify that only 39% of FTSE 100 companies list climate change as a risk in their annual reports, 67% have reduced year on year emissions and whilst 70% have set carbon reduction targets, only 8% are science based targets. Supermarkets were the best performing industry, engineering and machinery the worst.

Overall, the report concludes that the FTSE 100 shows genuine improvement across several industry sectors and there has been substantial growth in the number of companies co-innovating with suppliers to address their own, and others’, sustainability challenges.

The report can be downloaded here

 

Prohibitive costs in private law nuisance

You might have thought that the European Court of Human Rights would welcome the opportunity to review the excessive costs regime that can apply to private litigants in England and Wales who seek to protect their home and possessions. Private nuisance proceedings carry a significant costs risk which often in practice precludes people from bringing proceedings. Indeed, the UK has been found to be in breach of its obligations in respect of the Aarhus Convention, but has declined to do anything about it – or rather, “The government will continue to consider how best to address these cases” (see “The government response to the consultation on proposals to revise the costs capping scheme for eligible environmental challenges”, MoJ, November 2016).

But it appears that the matter of Austin v UK (39714/15; 5 October 2017) is not such a case. This is the ECHR complaint arising from the refusal of costs protection by the High Court and the Court of Appeal (Austin v. Miller Argent (South Wales) Ltd [2014] EWCA Civ 1012). She was one of a large number of claimants who had sought a PCO to allow her to bring a claim about the dust and noise pollution from a nearby open-cast coal mine.

The ECtHR dismissed her application to them as inadmissible as it accepted the UK government’s argument that it was far too late for her in her own proceedings to introduce the human rights arguments. These were new grounds not pleaded in the UK courts until her application for permission to appeal to the Supreme Court.

So, although this claim is a win for the UK government, the question of whether the costs system for private nuisance cases is in breach of human rights (or, more specifically, the Human Rights Act) remains unresolved. The most that we now know is that the question has been left open. The ECtHR “would not exclude the possibility that the State’s responsibility under the Convention could potentially be engaged in such a case” (§40). We also now know that it will need to be pleaded in that way almost from the beginning if it is to have a proper chance of success.

 

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Keeping Paris on track and tackling Trumpgate: the agenda for COP23 takes shape

Posted by: Frances Lawson

Given the fragility of the legal architecture for tackling international climate change, there is no such thing as an ‘unimportant’ meeting in this arena. Yet the 23rd Conference of the Parties to the United Nations Framework Convention on Climate Change (‘UNFCCC’) is shaping up to be a meeting of particular significance in determining the form and character that the Paris Agreement will take in effect, as opposed to in text.

COP23 will be held in Bonn, Germany, between 6th and 17th November 2017. Although Germany is the physical host of the meeting, it is being organised and chaired by the Government of Fiji. One thing to be expected, therefore, is that the predicament and perspective of small island states will have particular prominence. Perhaps deservedly so. In his inaugural speech to the 72nd session of the United Nations General Assembly, the incoming Fijian President of COP23 expressed his sympathy for the Caribbean and American victims of Hurricane Irma, whilst pointing out that his own country lost forty-four citizens and one third of its GDP in the largest cyclone ever to reach land last year. In contrast to hurricane Irma, this Fijian tragedy registered little more than a tremor in the international media, making it all the more timely, and arguably deserved, for this COP to shine the spotlight on the neglected small-island states far removed from western consciousness.

The incoming President’s speech also drew attention to possibly the largest of many sizeable bones of contention that delegates will be chewing on at COP23. By highlighting the need for ‘collective action’ in the international climate change regime, and calling for an end to the pursuit of ‘narrow national interests’, the incoming President was undoubtedly making reference to the justifications given by President Trump for his declaration of intent to pull the US out of the Paris Agreement. As the President very eloquently stated:

“It is clear … that global warming changes our very understanding of what our national interests are. It challenges us to understand that the only way for every nation to put itself first is to lock arms with all other nations and go forward together. Anything else is self-destructive—for the world and for each nation. It may be tempting for political leaders to show that they are protecting some national industry or near-term economic goal, but at what cost? The wise leader must work hard to convince the people to embrace the path we know we must take.” (1)

The Trump question is likely to occupy considerable negotiating time at COP23 because divisions have started to appear in Parties’ attitude to the US position. Less than two weeks’ ago, the EU’s Commissioner for Climate Action created controversy by suggesting that the US could “modify” its commitments under the Paris Agreement and “chart its own path”, rather than being bound to the collective action therein. This suggestion has been widely rounded upon by many developing country parties who have said that allowing the US to remain a party whilst diluting its commitments and changing the terms of its engagement would open the door to “backsliding” and could enable other parties to follow suit, thus undermining the integrity of the whole Paris Accord.

This controversy highlights a very interesting legal question – do the terms of the Paris Agreement allow for a party to revise downward the level of its commitment thereto?

The United States ratified the Paris Agreement on 3rd September, and the Agreement entered into force in the US on 4th November 2016. The US therefore has the status in law of a Party to the Agreement. The Agreement as a whole entered into force on the same date in November 2016.

Article 3 of the Agreement states as follows:

“As nationally determined contributions to the global response to climate change, all Parties are to undertake and communicate ambitious efforts as defined in Articles 4, 7, 9, 10, 11 and 13 with the view to achieving the purpose of this Agreement as set out in Article 2. The efforts of all Parties will represent a progression over time, while recognizing the need to support developing country Parties for the effective implementation of this Agreement”.

Articles 4(2) and 4(3) provide that:

“Each Party shall prepare, communicate and maintain successive nationally determined contributions that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.”

“Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstance.”

What is striking from these provisions is that Parties are obliged under the Agreement to maintain a Nationally Determined Contribution (NDC) at all times, and for its level of greenhouse gas emissions reduction ambition expressed therein to increase in ambition over time and with each successive NDC. This is the “no backsliding” provision that was so hotly debated in the lead-up to COP21 in Paris. Whereas much of the Agreement’s language can fairly be described as “woolly”, this is not a criticism that can be fairly leveled at this obligation in Articles 3 and 4 above. One only has to consider the way the obligations are expressed to see that they are intended to be binding legal obligations: “the Parties are…”, “all Parties shall …”, each Party’s NDC will…”. Whatever else Parties in Paris did not agree on, there was consensus that all states should have an ambitious NDC, and that everyone’s NDC should increase in its ambition over time. This obligation, therefore, goes to the very heart of the treaty.

Unsurprisingly, given the above, there is no provision for Parties to withdraw a submitted NDC. Nor is there any provision for Parties to amend a submitted NDC so as to dilute the ambition of the commitments therein.

It is therefore apparent that Canete’s proposal to allow Trump and the US Administration to do precisely that with the submitted US NDC runs counter to the binding obligations expressed in Articles 3 and 4, would therefore be a breach of the terms of the Agreement, and therefore unlawful.

Whether such a legal analysis will flow through into Parties’ approach to discussions about ‘Trumpgate’ in Bonn next month remains to be seen. What is clear is that if the US is allow to “backslide” in this way, the integrity, both legally and politically, of the Paris Agreement will be seriously, perhaps irreparably, damaged.

(1) https://cop23.com.fj/global-warming-changes-understanding-national-interests/

 

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Environmental Law News Update

In this latest Environmental Law News Update, Charles Morgan and William Upton consider the concerns expressed by rural landowners over long-term fracking liabilities and new environmental practitioners joining Six Pump Court Chambers.

 

Rural owners express concerns over long-term fracking liabilities

The Countryside Landowners Association has written to Richard Harrington MP, Parliamentary Under-Secretary of State for Industry & Energy, expressing concerns over delays by the Government in addressing the protection of landowners from the potential long-term consequences of fracking activities. The CLA identifies two potential areas of anxiety. The first is about the inability of an insolvent operator to abandon a well in an orderly fashion, leaving the landowner to make good the situation. The second is about when, after the proper abandonment of a well and surrender of the associated licence, the residual liability will fall upon the Government. The CLA is worried that the Government has created no clear régime for ongoing inspection and monitoring despite acknowledging the problem in 2014, since when fracking activities have burgeoned with active Government encouragement.

The CLA’s worries are understandable. Even an activity as unfortunately everyday and mundane as the fly-tipping of domestic waste can give rise to significant costs and liabilities for innocent landowners. The capacity for unmanaged fracking wells to produce land contamination is large, as too is the potential residual liability of any current owner of them for clean-up costs under the Part IIA régime.

 

Six Pump Court Chambers – new tenants

Over the summer, Chambers were joined by Robert Griffiths QC and Nichola Strachan (both previously of Mondial Chambers, and once of 4-5 Grays Inn Square).

We are also pleased to announce that Mark Davies and Natasha Hausdorff (profiles to follow) have joined us as tenants at Six Pump Court, following their successful completion of pupillage. They have already had extensive experience on their feet, and they will continue to practice across the range of chambers work. Mark may be known to many of our readers through his work as one of UKELA’s Student Advisers. Natasha is a former solicitor and has a strong existing interest in international law.

 

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