Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger, Mark Davies and Antony Batholomeusz consider an EGC judgment in three linked agricultural pesticide cases, EU infringement proceedings against the UK, France and Germany for breaching nitrogen dioxide limits, and prospects for environmental protection under the EEA Agreement.

 

The EGC floats like a butterfly and stings like a bee

On 17 May the General Court of the European Union (“the EGC”) delivered a judgment with a sting in its tail in three linked cases, (T-429/13 Bayer CropScience AG and Others v Commission, T451/13 Syngenta Crop Protection AC and Others v Commission and T-584/13 BASF Agro BV and Others v Commission) confirming the prohibition enacted by Regulation No. 485/2013 on the use of various pesticides in the neonicotinoid family (clothianidin, thiamethoxam and imidacloprid).

The case was not a complete loss for the agrochemical industry with the EGC upholding part of the action brought by BASF annulling the measures restricting the use of the pesticide fipronil. The Court found that the restrictions had been imposed without a prior impact assessment and that that failing had itself breached the precautionary principle.

Notwithstanding the decision in respect of fipronil, the verdict constitutes a win for bee-lovers. The prohibition was originally brought in on 26 May 2013 following a report by the European Food Safety Authority (“EFSA”) into the apparent decline in bee colonies attributed to the misuse of the pesticides.

The cases were brought by various industry giants: the Bayer group produces and markets imidacloprid and clothianidin in the EU; the Syngenta group produces and markets thiamethoxam (as well as treated seeds); the BASF group produces and markets fipronil. As part of its case Syngenta sought payment of compensation of at least EUR 367.9 million.

In dismissing Syngenta and Bayer’s cases, the Court noted in respect of the precautionary principle that where there is scientific uncertainty as to the existence or extent of risks to human health or to the environment, the principle can be invoked to take protective measures without waiting for the reality and/or seriousness of the risks to become fully apparent, or without waiting for adverse health effects to materialise.

The Court also remarked that the precautionary principle gives precedence to the protection of public health, safety and the environment over economic interests.

The unsuccessful parties have two months from the date of the decision to appeal to the ECJ on any points of law.

The EGC press release, including the particulars of the upheld ban, can be read here.

 

EU infringement proceedings for air quality

On 17 May the European Commission confirmed that it has referred the UK, together with France and Germany, to the European Court of Justice for failure to respect limit values for nitrogen dioxide and for failing to take appropriate measures to keep exceedences periods as short as possible.

The UK has breached the legal limit for Nitrogen Dioxide in a number of regions since the legislation came into force in 2010 and the Commission notes that, of France, Germany and the UK, the UK has the worst annual concentrations of Nitrogen Dioxide. Plans to bring the UK into line with its obligations have been overturned numerous times in the Courts, most recently in January of this year, in a series of cases taken by Client Earth.

The announcement came just days before the Government released its draft Clean Air Strategy on 22 May, to be backed up through new primary legislation which will focus on giving more powers to local authorities which could include powers to implement measures such as clean air zones. However, no reference is made to how local authorities would fund such proposals. Perhaps more critically, especially in light of the EU’s legal action, the plans do not tackle the issue of road transport and traffic in any detail, still the main source of air pollution in towns and cities and accounting for nearly half of all nitrogen dioxide emissions in the UK. This has led to Green MEP Keith Taylor describing the plan as “dangerously inadequate” and major environmental NGOs raising concerns as to how the Government intend to take the most polluting vehicles out of the most polluted areas in the country.

 

Environmental Protection under the EEA Agreement

The idea of the UK joining the EEA Agreement (“the Agreement”) post-Brexit has once again been recently floated, this time in the form of cautiously positive comments by the Prime Minister of Norway – the largest of the three EEA states. But what would it mean for environmental protection?

Article 73 of the Agreement sets the objectives of preserving, protecting and improving the quality of the environment, contributing towards protecting human health and ensuring a prudent and rational utilization of resources. Further, actions relating to the environment are to be based on the preventative action principle, the rectification at source principle and the polluter pays principle. Environmental protection requirements are also to be a component of other policies.

Article 73 covers much of the same ground as Article 191 TFEU, with two notable omissions. Firstly, there is no reference to ‘promoting measures at the international level to deal with regional or worldwide problems, and in particular combating climate change.’ This is perhaps because the EEA Agreement does not provide for any aspect of a common foreign policy or common representation in international bodies.

Secondly, there is no mention of the precautionary principle, although this has not prevented the EFTA Court – the EEA states’ counterpart of the Court of Justice of the European Union – from applying the precautionary principle in its case-law (see, for example, E-03/00 EFTA Surveillance Authority v Norway, judgment of 5 April 2001.)

Annex XX of the Agreement sets out the list of EU legal acts (regulations, directives, etc) relating to environmental protection that are of ‘EEA relevance’. These generally bind an EEA state as if they were an EU member-state. Annex XX is divided into five main sections (i) General (ii) Water (iii) Air (iv) Chemicals, Industrial Risk and Biotechnology and (v) Waste. Not all EU legal acts relating to the environment are included in Annex XX: the Habitat Directive, the Birds Directive and the Bathing Water Directive are considered to not be of EEA relevance.

One of the underlying issues in the Brexit negotiations is how to manage so-called ‘regulatory divergence’ – the question of what happens when either the UK or the EU changes its laws. The EEA Agreement provides an as yet underutilised option where the EEA states do not wish to ‘copy and paste’ EU legal acts into their national law. EEA states can instead agree with the European Commission that a national law is ‘equivalent’ to that of a new EU law. The House of Lords European Union Select Committee observed that it may be possible for the UK to have a carbon tax that is deemed equivalent to the EU’s Emissions Trading Scheme. Ultimately, of course, what is ‘equivalent’ is a matter for political agreement between the EEA states and the Commission.

The UK government, has, of course, ruled out EEA membership because it appears incompatible with the UK’s ‘red lines’. However, examining the environmental protections under the EEA Agreement can still provide insight into the Brexit negotiations. It demonstrates the degree of flexibility (or lack thereof) that the EU accords its closest economic partners, as well as suggesting what a ‘level playing field’ might look like.

 

Have you seen our International Climate Change Blog providing legal analysis of the international climate change negotiations ahead of, and beyond, the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change. Click here for the latest post – Border carbon adjustments: a solution to carbon leakage?

To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at bridget.tough@6pumpcourt.co.uk

Environmental Law News Update

In this latest Environmental Law News Update, Charles Morgan, Mark Davies and Antony Batholomeusz consider the implications of failing to comply with a Remediation Order, a vote by the House of Lords for greater environmental protection post-Brexit, and the continuation of legal controversies over discharges into the Manchester Ship Canal.

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Ensuring compliance with a Remediation Order

What should a criminal court do when a company fails to comply with a Remediation Order (made under reg.44 of the Environmental Permitting Regulations (England and Wales) 2010 (‘the EPR’))? The Oxford Crown Court had made a Remediation Order requiring a defendant company, Tapecrown Ltd, to remove the waste from their site in addition to fining the company for its criminality. However, Tapecrown failed to comply with the Remediation Order to the extent that, following a contested hearing, they were held in contempt of court.

Curiously, the EPR does not provide a mechanism to enforce a Remediation Order. The Environment Agency proposed a creative solution. The Crown Court has the same powers as the High Court to enforce its orders. Where a party fails to carry out an act required by a court order, the Civil Procedure Rules allow the court to appoint someone to do the act. The disobedient party bears the expenses of the person appointed by the court. So Oxford Crown Court appointed a waste management company to clear Tapecrown’s site. The order made provision to allow Tapecrown to challenge the reasonableness of the costs charged.

Tapecrown subsequently argued that too much waste had been removed and applied to challenge the costs. Initially Oxford Crown Court held that the application was out of time and had no merit. That decision was quashed by the Administrative Court, which granted a judicial review application to to allow for Tapecrown to apply to extend time to be able to challenge the reasonableness of the amount of waste removed.

That decision has thrown up at least two interesting points.

First, the Administrative Court recognised the use of the CPR as a means of ensuring that the site would be cleared. This is an important development for Remediation Orders. Providing that a willing contractor can be found to undertake the work, there is now a genuine mechanism for ensuring remediation that will not unduly impact on the public purse.

Second, although the order had been made following contempt proceedings, Tapecrown’s assertion that it had an automatic right of appeal to the Court of Appeal (Criminal Division) was rejected. The order had not been made under the Crown Court’s jurisdiction to punish for contempt of court but was in fact entirely ancillary to that jurisdiction.

Christopher Badger (of Six Pump Court) acted for the Environment Agency.

 

House of Lords win through on environmental protection post-Brexit

On Wednesday last week the House of Lords voted 294 to 244 in favour of approving what was the government’s 15th defeat on the Withdrawal Bill. The aim of the latest amendment? Bolstering environmental protection post-Brexit.

The amendment, proposed by Lords Krebs and Deben and Ladies Jones of Whitchurch and Bakewell of Hardington Mandeville, is worth reading in full. It inserts the following new clause after the current Clause 3:

“Maintenance of EU environmental principles and standards

(1) The Secretary of State must take steps designed to ensure that the United Kingdom’s withdrawal from the EU does not result in the removal or diminution of any rights, powers, liabilities, obligations, restrictions, remedies and procedures that contribute to the protection and improvement of the environment.

(2) In particular, the Secretary of State must carry out the activities required by subsections (3) to (5) within the period of six months beginning with the date on which this Act is passed.

(3) The Secretary of State must publish proposals for primary legislation to establish a duty on public authorities to apply principles of environmental law established in EU law or on which EU environmental law is based in the exercise of relevant functions after exit day.

(4) The Secretary of State must publish proposals for primary legislation to establish an independent body with the purpose of ensuring compliance with environmental law by public authorities.

(5) The Secretary of State must publish—
    (a) a list of statutory functions that can be exercised so as to achieve the objective in subsection (1); and
    (b) a list of functions currently exercised by EU bodies that require to be retained or replicated in UK law in order to achieve the objective in subsection (1).

(6) The Secretary of State must before 1 January 2020 lay before Parliament a Statement of Environmental Policy which sets out how the principles in subsection (7) will be given effect.

(7) The principles referred to in subsection (3) include—
    (a) the precautionary principle as it relates to the environment,
    (b) the principle of preventive action to avert environmental damage,
    (c) the principle that environmental damage should as a priority be rectified at source,
    (d) the polluter pays principle,
    (e) sustainable development,
    (f) prudent and rational utilisation of natural resources,
    (g) public access to environmental information,
    (h) public participation in environmental decision making, and
    (i) access to justice in relation to environmental matters.

(8) Before complying with subsections (3) to (6) the Secretary of State must consult—
    (a) each of the devolved administrations;
    (b) persons appearing to represent the interests of local government;
    (c) persons appearing to represent environmental interests;
    (d) farmers and land managers; and
    (e) such other persons as the Secretary of State thinks appropriate.”

Interestingly, the amendment’s Third Reading had been delayed pending the publishing of DEFRA’s consultation paper on ‘Environmental Principles and Governance after EU Exit’. It was thought that the consultation paper would assuage any fears the House of Lords might have and obviate the need for the amendment at all. So, what did the inimitable Lord Krebs think about the proposals in the consultation paper?

“At first sight, the Government’s consultation appears to address our concerns, as the Minister assured us that it would. It includes discussion both of the environmental principles, such as the precautionary principle and the polluter pays principle, and of a new green watchdog to ensure that environmental standards are upheld, thus filling the governance gap that otherwise would be created by Brexit…

However, on closer inspection, the Government’s proposals are simply too weak. There is no commitment to enshrine in legislation the environmental principles to which I have referred. Instead, the preferred option is to create a policy statement, which, as the consultation document says, would allow the Government,

“to balance environmental priorities alongside other national priorities”,

and,

“offer greater flexibility for Ministers”.

The favoured option for the green watchdog’s enforcement role is that it would be able to serve advisory notices to the Government or other public bodies. To quote again from the consultation document:

“government believes that advisory notices should be the main form of enforcement”.

That is far weaker than the current arrangements, under which the Commission has the power to initiate court action. In contrast, an advisory notice can be ignored and there is no sanction if it is. The consultation document even acknowledges the need for strong enforcement when it says:

“there is a special case to act on the environment. Most EU infringement proceedings against all Member States have related to environmental law, indicating a greater need for oversight in this area. In addition, while there are individuals or bodies with direct interests to protect in other areas of EU law, the environment is in a different position”.

Finally, the Government’s timetable for their proposals, weak as they are, show that their new mechanisms would not be in place by Brexit day.

Noble Lords who care about the preservation of our environment for future generations should support this amendment.”

Hear, hear.

 

More Falling Out Over the Outfalls

Legal controversies over discharges into the Manchester Ship Canal continue. In The Manchester Ship Canal Company Ltd. v Vauxhall Motors Ltd. [2018] EWCA Civ 1100 the Court of Appeal upheld the decision of the High Court (HHJ Behrens) that Vauxhall Motors Ltd. (formerly General Motors UK Ltd.) was entitled to relief from the forfeiture of its perpetual licence to make such discharges from its factory at Ellesmere Port following its inadvertent failure to pay the annual licence fee of £50. The current value of the right was estimated at £300,000 – £440,000 per annum.

The licence was granted in 1962. It allowed GM to construct infrastructure, mainly pipework, on land owned by MSCC and to discharge surface water and trade effluent into the canal.

The Court of Appeal held that the effect of the licence was to grant GM possessory rights over the infrastructure on MSCC’s land by dint of GM’s degree of use and control. Thus the jurisdiction to grant relief from forfeiture was engaged and the judge had been entitled on the facts to exercise it in GM’s favour.

The Court of Appeal also considered a second basis of GM’s claim founded upon provisions in the Manchester Ship Canal Act 1885 enacted for the protection of GM’s predecessor in title. The court held that if relief from forfeiture had not been granted then the relevant provisions would not have allowed GM to continue to make the discharges. The protective provisions were intended merely to protect the rights which subsisted in 1885 by virtue of the predecessor’s riparian ownership, including the ”natural right” to allow naturally occurring water to drain onto lower land. Even assuming those rights to have included also a prescriptive right of artificial drainage, the construction by GM of its factory and the use thereafter made by GM pursuant to the licence constituted a “radical change in the character” of the dominant tenement beyond the scope of such an easement.

The full judgment can be found here.

 

We published our Environmental Law Video Newscast recently – a monthly round-up of the latest developments in environmental law.

Chambers UK Guide to Environmental Law 2018 was published this month and written by Six Pump Court’s Environmental Law Team. You can also use this link to access the full-text pdf version. The Guide provides easily accessible information to help navigate environmental law in the UK and covers the environmental regulatory framework, environmental protection, developments in policy and law, enforcement, liability and disclosure requirements as well as the law as it relates to contaminated land, waste, asbestos, climate change and emissions.

 

To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at bridget.tough@6pumpcourt.co.uk

Border carbon adjustments: a solution to carbon leakage?

Posted by: Frances Lawson

…we have to put in place a taxation at the border for those who decide not to make the same environmental choice” – President Emmanuel Macron, 22 March 2018

In 2005 the world watched with eager anticipation as the EU initiated the world’s largest carbon pricing scheme, describing it as “a cornerstone in the fight against climate change”. The logic was simple: in order to emit carbon, businesses (the sectors covered by the EU Emissions Trading System (EU ETS) are together responsible for almost half of the EU’s total carbon emissions) would be required to buy permits. Policymakers would limit their supply and market demand would determine their price. To avoid paying for them, businesses would be incentivised to research and adopt alternative practices that generate fewer emissions.

Over a decade later and the flames of hope reduced to mere embers of what could have been. The carbon price meandered around the €5 mark until recently and has only recently started to climb towards ~€10 in anticipation of recently agreed strengthening measures. To put this into perspective, last year’s report by the High Level Commission on Carbon Prices – supported by the World Bank and the International Monetary Fund (IMF) and co-authored by Nobel Prize-winning economist Joseph Stiglitz – suggests a carbon price of $40 to $80 (~€32 – €65) is needed by 2020 to prevent a 2C rise in global temperatures.

Policymakers are well aware of mechanisms to increase prices. For example, the supply of allowances could be reduced further or, as President Macron has suggested, an EU-wide a minimum or ‘floor’ could be imposed, so that the carbon price never drops too low.

Why aren’t such measures implemented? One key reason is that if the carbon price is too high, in order to remain competitive the production of goods could shift to jurisdictions where it is lower or non-existent (so-called ‘carbon leakage’). This would undermine the environmental aims behind carbon pricing, while also adversely affecting the economy. While there is little evidence that carbon leakage has occurred so far, it remains a concern for industries and policymakers, and as carbon prices rise the risk will increase.

President Macron offers a solution to this problem through his proposal for an EU border carbon adjustment mechanism (BCA). Imported goods would be taxed to ensure they face a comparable carbon price to those produced in the EU. As the carbon price rises, so would the border tax, thereby reducing the incentive to shift production overseas in search of a lower carbon price.

The idea isn’t new. In recent years they have been proposed by senior Republicans in the United States (including two former-US Treasury Secretaries), the Chairman of steel giant ArcellorMittal, Lakshmi Mittal, and legislation has been proposed (but ultimately rejected) in respect of the EU ETS and California ETS. However, while promising on the surface, there are a number of complicating issues, not least their legality.

Are BCAs legal?

The most relevant and difficult legal question facing BCAs is whether or not they are compatible with World Trade Organisation (WTO) rules that constrain the ability of states to implement measures that restrict trade. A number of recent reports focus on precisely this issue (see here, here and here). Of particular relevance is Article III (2) of the General Agreement on Tariffs and Trade 1994 (“GATT”), which provides:

The products of the territory of any contracting party imported into the territory of any other contracting party shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products.

In other words, imported goods can be taxed but only to the extent that ‘like’ domestic products face the same charge. The 1970 GATT Working Party on Border Tax Adjustments set out a non-exhaustive list of factors to consider for determining “likeness”, which includes “the product’s end uses in a given market; consumers’ tastes and habits, which change from country to country; [and] the product’s properties, nature and quality” (at 18). This list focusses on the end product’s characteristics. However, for BCAs to work, it must be possible to levy different charges on otherwise similar products on account of the emissions generated during their respective production processes. Some WTO dispute reports suggest that products can be differentiated on the grounds of how they are produced. For example, in US — Tuna II (Mexico) tuna imports into the US could be differentiated by the way in which they were caught). However, this was because of the effect it had on consumer preferences; consumers are currently not responsive to the carbon emissions used to produce goods.

Does this mean that BCAs are doomed from the start? Not necessarily. Jennifer Hillman, former member of the WTO Appellate Body, points out that BCAs could be viewed as placing the same charge on similar products. While different producers may pay different total amounts, the BCA could impose on them the same price per tonne of carbon emitted during production. Further, she argues that BCAs would not be infringing upon the overriding objective of Article III, which is to prevent measures that protect domestic products.

Even if BCAs are not construed in this favourable way, it may be possible to rely upon Article XX which provides for circumstances in which trade-restricting measures are permissible. Most relevant are Article XX(b), which provides for measures “necessary to protect human, animal or plant life or health”, and XX(g), which provides for measures relating to the “conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption”. To satisfy these provisions, evidence would be needed to show that BCAs are not merely disguised restrictions on trade but are in fact necessary to mitigate against the adverse impacts of climate change (Article XX (b)) or to reduce fossil fuel use (Article XX (g)). Moreover, they would need to be necessary in the absence of adequate alternatives (see United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services). There are other ways of mitigating against carbon leakage, for example the EU ETS currently allocates some permits for free to particularly vulnerable industries. BCAs would need to be demonstrably more effective than other means of tackling carbon leakage so as to satisfy the Article XX criteria.

Concluding Remarks

Ultimately, it is unclear whether WTO rules permit BCAs. A recent report by NGO Climate Strategies concludes that “it is clear that the WTO legality of BCAs
will ultimately depend on their design” (at p.38). This seems right, and we await the details behind President Macron’s proposals. However, WTO rules are not the only obstacle in the path of BCAs. First, they fly in the face of the dominant neoliberal narrative of free trade and low taxes, which could make it more difficult for the idea to gain political traction. Second, many conceptions of BCAs only offer a partial solution to the risk of carbon leakage. They tax imports so that in the domestic market goods are not differentiated by the carbon pricing regime governing their production. However, this differentiation would prevail in export markets (to remedy this, some BCA models include a mechanism to subsidise domestic goods that are exported so that they remain competitive). Third, it is not clear how the level of the BCA charge would be set. The EU ETS price fluctuates; there is no fixed reference point that can be used.

Nevertheless, BCAs may be the best way of ensuring that the carbon price can rise as high as it needs to be in order for there to be a real impact on emissions, while mitigating against economic and carbon leakage risks. Other mechanisms that tackle carbon leakage risks have the unfortunate consequence of dampening the incentive to decarbonise. For example, the current practice of issuing free allocation of permits to vulnerable industries means that those industries have fewer permits to buy and are therefore less incentivised to decarbonise. Although BCAs have been advocated by climate change academics for some years, it is only recently that they have found much in the way of political support. Given the seeming remoteness of meeting the 2 degree target, BCAs are certainly worthy of further exploration. In that sense, President Macron’s comments are a promising indication of political support for this important initiative.

This article has been co-authored by Vedantha Kumar.

Environmental Law News Update

In this latest Environmental Law News Update Christopher Badger and Mark Davies consider the new environmental watchdog proposed by DEFRA, a report assessing the key issues for environmental equivalence post-Brexit, and the Public Account Committee’s assessment of DEFRA’s Brexit preparations.

 

DEFRA launches environment watchdog consultation

DEFRA has launched a 12-week consultation in which it states that a new Environmental Principles and Governance Bill will create a “new, world-leading, independent environmental watchdog to hold government to account on [the UK’s] environmental ambitions and obligations” once the UK has left the EU.

Issues on which DEFRA is consulting include:

  • Should the new independent body have the power to provide independent scrutiny and advice of implementation of environmental legislation and government policy?
  • To what extent should it be able to handle complaints, conduct investigations and require the provision of information?
  • To what extent should the new body be able to supervise the government delivery of environmental law and take formal compliance action? Any potential powers to take enforcement action against the government would be limited to where a “legal obligation” exists. Critically, it isn’t suggested that the new body will be able to take the government to court.
  • Should the new watchdog’s remit extend to public bodies outside central government departments? If so, this will presumably require additional resources, otherwise the government risks diluting the body’s focus on the most significant national or strategic issues.
  • To what extent should the remit include oversight of international environmental agreements?

It is also intended to create a new statutory statement of the environmental principles that will guide the UK, drawing on the current international and EU environmental principles. Two options are canvassed – either as part of primary legislation or as a policy statement.

It is suggested that setting out the principles in a policy statement would allow for more flexibility to keep the list of principles up to date responding to the latest scientific and economic developments. However, it is arguable that the latest scientific and economic developments are already required to be taken into account, under Article 191(3) of the TFEU. Green bodies are already extremely concerned that critical principles of environmental law need to be enshrined in law.

Further, the application of the policy statement would not extend to individual regulatory decisions or administrative actions by government or its delivery bodies and the consultation relates only to environmental governance in England.

DEFRA has said that the new body and environmental principles will not be in place for exit day but will in fact be introduced in time for the end of the implementation period in December 2020.

The consultation document can be found here.

The deadline for responses is 2 August 2018.

 

An independent assessment of Brexit and environmental equivalence

The Institute for European Environmental Policy (“IEEP”), an ‘independent, non-profit research institute dedicated to advancing an environmentally sustainable Europe through policy analysis, development and dissemination’, published its report, ‘Brexit and the level playing field: key issues for environmental equivalence’, on 8 May.

The report discusses risks, highlighting the risk to competition, to the EU created by the juxtaposition of statements from UK Ministers, who have stressed their commitment to high environmental standards, with the potential for reduced standards as the UK pursues free trade agreements. The IEEP further considers how the EU could approach negotiations and suggests potential solutions to governance arrangements.

The point is made, validly in this author’s opinion, that should the UK gain a competitive advantage by lowering environmental standards, that may reduce the appetite and political space available in the EU for ‘ambitious environmental policy’ in the future. The possible effects on competition are not the only focus of the report with it also considering the potential negative impact on transboundary issues.

The suggestions put forwards for principles the EU should follow in negotiations to avoid any inequivalence post-Brexit are:

  • Avoiding negative impacts on EU environmental outcomes;
  • Avoiding competitiveness impacts on EU businesses;
  • Ensuring that the UK delivers on environmental commitments it makes in the negotiations;
  • Allowing for future increases in environmental ambition throughout Europe, and;
  • Avoiding erosion of EU27 political commitment to environmental protection over time.

One might think it perhaps easier said than done to bear all of those principles in mind.

Tying in with DEFRA’s consultation on the new environmental watchdog (see above), the authors of the IEEP report have warned against the possibility of the UK making commitments to deliver environmental outcomes ‘in principle’, without accompanying them with any concrete obligations to deliver them ‘in practice’. Setting aside the obvious cynicism in the report, which you may or may not feel is well founded, the authors raise a valid point and one which should be fed into the consultation; a watchdog with no teeth is likely to be all principle and no practice.

The importance of the enforceability of environmental rights is a position recognised in the report’s section on governance, with the authors noting that within any new legislative underpinning on a future trade agreement between the UK and the EU there should be, “scope for the courts to require Government to take action”.

The report may be downloaded in full here.

 

The Public Accounts Committee’s damning assessment of DEFRA’s Brexit preparations

On 4 May the House of Commons Public Accounts Committee published a report roundly criticising the preparations of DEFRA for Brexit. The Committee took evidence in preparing its report on 7 March 2018.

The Committee did note both that DEFRA’s preparations are, ‘being hampered by the pervasive uncertainty about the UK’s future relationship with the EU’, the corollary being that DEFRA is having to work up options for deal, no-deal, or transition scenarios, and that the Department’s burden during the Brexit process is larger than most given that the bulk of its areas of responsibility are framed by EU legislation.

To put DEFRA’s burden in perspective, it is, according to the Committee, responsible for 43 of the 300+ Brexit-related workstreams in government, with just over half having an IT component, and some requiring the establishment of new regulatory bodies (vis-à-vis the consultation, see above). DEFRA is being asked to deliver all of this, the report goes on to concede, against a backdrop of major new legislation on agriculture and fisheries and ongoing business and efficiency savings of £138 million in 2018-2019.

If you weren’t filled with sympathy for the civil servants at DEFRA before, you may (perhaps indeed should) be now.

Some of the Committee’s conclusions and recommendations are stark:

  • Planning for deal, no-deal and transition scenarios is the fault of uncertainty – DEFRA must, by July 2018, publish on its website information and timelines setting out how and when they will be able to provide more explicit guidance to businesses and stakeholders on preparing for Brexit.
  • The Treasury must improve its processes for approving Brexit funding so departments have certainty about funding and can plan effectively.
  • With DEFRA estimating that 80% of its functions are in devolved areas of policy it must, by July 2018, report to the Committee on its engagement with devolved administrations.
  • It is unrealistic to expect DEFRA to achieve its efficiency savings alongside delivering Brexit and its other work, and it should acknowledge that it, ‘cannot continue to do everything it is currently doing’ and should write to the Committee by the end of June 2018 with processes for prioritisation.
  • Perhaps most worryingly: ‘There are substantial risks, including disruption to the agri-food and chemical industries if DEFRA’s IT systems are not ready.’ – the Committee noted the potential for disruption and requested an update, again by the end of June 2018, on the progress of the new IT systems.

Rather alarmingly there is talk in the report of ‘manual processes’ if IT systems are not ready in time…

 

We published our Environmental Law Video Newscast last week – a monthly round-up of the latest developments in environmental law.

Chambers UK Guide to Environmental Law 2018 was published this month and written by Six Pump Court’s Environmental Law Team. You can also use this link to access the full-text pdf version. The Guide provides easily accessible information to help navigate environmental law in the UK and covers the environmental regulatory framework, environmental protection, developments in policy and law, enforcement, liability and disclosure requirements as well as the law as it relates to contaminated land, waste, asbestos, climate change and emissions.

 

To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at bridget.tough@6pumpcourt.co.uk

Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger, Charles Morgan and Mark Davies consider the EU’s packaging and waste targets, the treatment of “fluff” within the landfill system and what happens when a mattress recycling business abandons its premises and several hundred tonnes of mattresses.

 

The EU’s Circular Economy Package and Waste Targets

On 18 April, following long-running discussions between the EU Commission, Council and Parliament, MEPs voted to approve the EU’s Circular Economy Package (“CEP”).

Under the CEP, Member States will have to reach a 55% municipal recycling rate by 2025, 60% by 2030 and 65% by 2035. For context, in 2015, the EU average for municipal waste that was recycled was 32%, with the UK above average on 46%.

The CEP does not just cover municipal recycling, but also, amongst other aims, contains specific targets for packaging recycling by 2030: 85% of paper and cardboard; 80% of ferrous metals; 75% of glass; 70% of all packaging; 60% of aluminium; 55% of plastic; and 30% of wood. Member States must additionally ensure, by 2030, that all waste suitable for recycling or other recovery is not accepted at landfill sites, excepting waste for which disposal by landfill is the ‘best environmental outcome’.

Looking at the timeframes for the CEP, one might be forgiven for thinking that post-Brexit the UK will be able to forge its own path on recycling targets. However, it has been widely reported that DEFRA have confirmed in writing that the country will be supporting the CEP irrespective of our departure from the Union.

If it is truly the case that the UK will be supporting the CEP after exit day, it seems curious that there is no more than one, solitary mention of the circular economy idea within the 25 Year Environment Plan, with that coming in reference to the ‘Industrial Strategy’ section and the goal of zero avoidable waste by 2050. Admittedly the goal of zero avoidable waste by 2050 is not necessarily in conflict with the proposals in the CEP, but it will be interesting to see whether the government (and successive governments) continue to back the European project as its milestone goals are first in time by some measure.

 

‘Fluff’ is subject to landfill tax

Back on 11 April 2018, in Devon Waste Management Ltd & ors v HMRC [2018] UKFTT 181 (TC) the First-Tier Tribunal Tax Chamber determined a number of appeals that centred on the use of ‘fluff’ (mainly black bag waste) in the construction of landfill cells. The fluff had been specifically selected as part of a base layer designed to protect the liner of the landfill cell.

The appellants argued that deposits of ‘fluff’ in the cells of their landfill sites amounted to a “use” of that material and accordingly had not been disposed of as waste or by way of landfill and as a result was not subject to landfill tax. They argued that the black bag waste formed an integral part of the landfill containment and barrier system and had been specifically selected and inspected, and its placement supervised, for that purpose. In this way, the ‘fluff’ was indistinguishable, from a legal point of view, from the daily cover that the Court of Appeal found in Waste Recycling Group Ltd v HMRC [2008] EWCA Civ 849 was not waste.

HMRC argued in response that the use of ‘fluff’ was no more than the careful management of material deploying waste deposit procedures which were appropriate for black bag domestic waste.

The Tribunal found that there were two main questions to be decided. Firstly, was the ‘fluff’ disposed of as waste, in particular whether the disposal was made “with the intention of discarding” it. The second was whether the disposals were “by way of landfill”.

It held that, while in one sense, the black bag waste was “used” to protect the lining system, this was not the end of the matter. All of the material was destined for landfill, in the main body of landfilled waste if it was not to be ‘fluff’. ‘Use’ was not considered to be an antonym for ‘discard’ – the fact that the material continued to serve a useful function after it had been disposed of did not affect this conclusion.

Secondly, while the simple act of depositing material on the ground anywhere in a landfill site could not amount to a “disposal by way of landfill”, the phrase “by way of landfill” was a qualification that allowed a filter of common sense to be applied, to exclude deposits that were clearly not by way of landfill on any sensible interpretation. The deposit of black bag waste which was intended to remain in the landfill permanently was not intended to be an exception.

The full judgment can be found here

A very similar appeal, Biffa Waste Management Ltd v HMRC [2018] UKFTT 199 (TC), concerning the deposit of shredded waste deposited at the top of landfill cells, also failed. The Tribunal held that the various deposits were all made with the intention of discarding it as waste and were all made by way of landfill. The linked appeal can be found here

 

Letting Sleeping Mattresses Lie

The almost metaphysical striving for the meaning of the vocabulary of waste law continues with the case of Stone and Salhouse Norwich Ltd. v Environment Agency [2018] EWHC 994 (Admin). Mr. Stone is a director of Salhouse Norwich Ltd., which owns a site in Norwich which was let to a mattress recycling business which lacked any environmental permit. The Agency served an enforcement notice on the tenant, who immediately ceased to trade and vacated the site, leaving the landlord to address the problem of the 471 tonnes of mattresses remaining there. The landlord did little beyond engaging in preliminary discussions with the Agency. The Agency then charged the landlord and its directors with the offence of knowingly permitting storage of waste without authorisation under the Environmental Permitting (England and Wales) Regulations 2010.

The 2010 Regulations derive their force and meaning from the Waste Framework Directive, which defines ‘storage’ so as to include storage pending disposal or recovery operations, in each case constituting a ‘waste operation’ requiring authorisation. The defendants argued that they had not been carrying out any such ‘waste operation’. The defunct business had not been theirs and any subsequent events on site should be regarded as merely the first steps in a remedial clean-up operation; nor had they ‘knowingly permitted’ anything, since they had been unaware of the service of the enforcement notice and had simply ‘passively suffered’ the mattresses to remain. The Agency contended that there was a continuing waste operation after service of the enforcement notice which the landlord had knowingly permitted, with the ‘consent or connivance’ of its directors or in a manner attributable to their neglect (as required for the conviction of the directors: regulation 41 of the 2010 Regulations).

The Magistrates Court convicted and the High Court dismissed an appeal by way of case stated.

Nicol J. held that the Magistrates had been correct to find that there had been a continuing ‘waste operation’ after the departure of the tenant and that the landlord had ‘knowingly permitted’ it. It had failed to prevent the waste from remaining on site; no positive act was required. The posited distinction of ‘passive sufferance’ was meaningless.

This is a tough decision for commercial landlords; rather than requiring the prosecution to prove positive steps as an ingredient of ‘knowingly permitting’, it requires the defendant owner of land to demonstrate either ignorance of the unauthorised activity or the taking of some positive steps on its part to prevent the storage from continuing. Passivity is not enough.

The full judgment can be found here. Nicholas Ostrowski of Six Pump Court acted for the Agency.

 

We published our Environmental Law Video Newscast last week – a monthly round-up of the latest developments in environmental law.

Chambers UK Guide to Environmental Law 2018 was published this month and written by Six Pump Court’s Environmental Law Team. You can also use this link to access the full-text pdf version. The Guide provides easily accessible information to help navigate environmental law in the UK and covers the environmental regulatory framework, environmental protection, developments in policy and law, enforcement, liability and disclosure requirements as well as the law as it relates to contaminated land, waste, asbestos, climate change and emissions.

 

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