Supplementary Memorandum by the Environment
Agency (EA 62(c))
1. INTRODUCTION
The Environment Agency appeared before the Environment
Sub-committee on 18 January 2000 and was asked to provide a further
memorandum on the integration of environmental legislation. The
Agency is also providing the Committee with supplementary information
on some other areas covered during the oral evidence session,
which may help the Committee with its final report.
2. INTEGRATION
OF ENVIRONMENTAL
LEGISLATION
Integration
The Agency inherited legislation for all its
functions when it was established in April 1966 by the Environment
Act 1995. Although the 1995 Act did provide some additional general
powers and duties for the Agency, most of the existing legislation
was transferred with only minimal consequential amendments. It
was recognised at the time that the inherited functional legislation
would need amendment in the light of experience of the integrated
operation of the Agency.
The additional duties placed on the Environment
Agency under the Environment Act required three major new areas
of policy delivery that were not explicitly required by its predecessors.
These are:
— to make a contribution to Sustainable
Development;
— to form opinions on the state of
the environment;
— to take account of costs and benefits
in its decisions.
These were the first "new duties"
to be faced by the Agency and in the next five years of its existence
it will have had to deal with nearly 50 more new duties as shown
in Annex 1. The prospect of this trend continuing, and even increasing,
seems likely and will add to the wealth and complexity of existing
environmental legislation.
The first level of possible legislative reform
requires the identification and amendment of all the areas of
administrative machinery contained in the inherited and subsequent
legislation. This legislation was essential when the legislation
was being administered by the various separate predecessor organisations,
but now means that the Agency has administrative requirements,
which are duplicated and contain differences, which are historical
or could be aligned. Unnecessary differences add complexity for
the Agency and those it regulates, reduces efficiency and results
in extra costs of administration, computer systems and training,
which must fall on the public or private purse.
For example, most of the inherited legislation
requires the Agency to maintain a public register for the particular
regime and all the provisions impose somewhat different requirements—the
Agency only needs one set of provisions about maintaining a public
register or, if differences are still required, these would be
better imposed in secondary legislation. Again it ought to be
possible to have one framework licensing system rather than different
systems for each functional area. These legislative barriers to
efficiency and effectiveness are the subject of the Department
of the Environment, Transport and Regions' (DETR) Review of Legislation
discussed below.
The second level of possible reform would be
a far reaching review of environmental law looking at the different
approaches and philosophies of existing legislation and examining
different methods and tools for achieving environmental change.
An example of this would be to allow the Agency to regulate industries
in a more flexible way on a sector or cross sector basis or companies
on a company wide basis instead of or in addition to the existing
site-specific basis. The review should utilise the experience
of industry, academia, relevant professions, the Royal Commission
on Environmental Pollution and Non-Government Organisations (NGOs)
as well as the experience of the Environment Agency and Scottish
Environment Protection Agency (SEPA) and Government. Comparative
law studies of the legislation of other Member States and countries
would be useful. Since much environmental legislation is derived
from the EU it would be valuable to utilise bodies such as IMPEL
where the Agency plays a leading role.
Regulatory Reform Bill
Whilst primary legislation would be required
for many amendments at present, the Agency also looks forward
to the possibility of simplifying its legislation using the provisions
of the Regulatory Reform Bill that is due to come before this
session of Parliament. If passed, this Bill will enable enactments,
which impose unnecessary burdens on Government or bodies such
as the Agency to be amended by order. This power is not available
under existing legislation.
Gaps in Legislation
Environmental Law, like many other areas of
law consists of various measures which have been taken in order
to deal with particular problems at various points in time. This
has been the approach both in the European Union where much of
the present environmental law originates and in the UK. Whilst
there has been some consolidation, notably water law in 1991,
much of the legislation is somewhat patchy in impact and would
benefit from review.
This can be illustrated by reference to environmental
law and agriculture (see Annex 2). Agriculture has a considerable
environmental impact. In 1998, there were 2,050 reportable water
pollution incidents in England and Wales attributed to farming,
representing about 10 per cent of all pollution incidents. In
addition there is widespread diffuse pollution from agriculture
to both ground and surface waters. Excluding wastes that are directly
deposited to land by farm animals, about 60 million tonnes of
livestock manure and slurries are spread on agricultural land
each year in England and Wales. A further five million tonnes
of industrial wastes and sewage sludge are also spread on agricultural
land. Within the UK, agricultural activities are estimated to
emit about 225,000 tonnes of ammonia, representing a substantial
percentage of total emissions of this pollutant. Modern agriculture
makes use of a wide range of chemicals, which require controls
on their use and disposal.
It should be noted that this patchy legislative
provision leaves unsatisfactory gaps in the Agency's ability to
regulate environmental emissions from agriculture. For example:
There is no primary regulation to deal with
emissions of phosphorus loss from agriculture or to deal with
land management practices that cause severe soil erosion and may
lead to flooding, sediment pollution and impacts on fisheries.
Intensive pig and poultry units are included in Integrated Pollution
Prevention and Control (IPPC) regulation, whereas intensive dairy
units that also have high risks of pollution and are the major
contributors to adverse impacts on the environment are currently
excluded from regulation. Also, there is currently no control
over the handling of manure exported from a farm by a third party.
In addition, there are at least seven separate
charging schemes applying to activities that could be carried
out on a farm, and whilst in practice it is unlikely that these
will all apply to most farms, other ways of collecting revenue
could avoid the need for the Agency to collect small sums from
individual farmers. For example, where appropriate, a small element
of a pesticides tax could be used to raise revenue to cover these
costs relieving the Agency of a considerable administrative burden
and enabling it to reduce costs or devote more of the resources
raised to environmental protection.
IPPC and Waste Licensing
The Agency mentioned to the Committee the possibility
of using the IPPC regime for the management of all waste management
sites rather than developing yet another regime for landfill sites.
The detail of the regime has yet to be worked up but it would
cover those landfills and other waste management facilities already
subject to IPPC and, on a simplified basis, all the smaller waste
facilities, which are currently regulated under a different regime.
This would simplify the waste regimes and provide more integrated
regulation with consequential benefits for those being regulated,
the Agency and the public. Considerable potential cost savings
in taking this approach have been identified by the Agency. It
could also provide a further benefit of simplifying the implementation
of new directives such as the forthcoming Landfill Directive by
avoiding the creation of a further separate licensing system.
3. DETR REVIEW
OF LEGISLATION
The impetus for this Review came from the Royal
Commission on Environmental Pollution, which promoted an integrated
approach to environmental protection. The Review's terms of reference
were deliberately written by the DETR to exclude differences in
the philosophical approaches to regulating different media. It
is focussed on rationalising regulatory mechanisms and
similar existing regimes—ie the more "nuts and bolts"
side. It was about removing any significant legislative, administrative
or managerial barriers to integration within the Agency (and
SEPA). Administrative and managerial barriers were particularly
important in the short term, as they were easier to affect than
primary legislation. Analysis of the various economic instruments
and incentive charging regimes were excluded as both were considered
to be major subjects in their own right.
Agency contributions to the DETR's Review of Legislation
The Agency has contributed the following papers
to the legislative review:
— Better Regulation to Protect the
Environment (Oct 99). The Agency Board Paper setting out priorities
and principles for environment protection.
— Agency Paper on a model Regulatory
Regime (Oct 98). An outline of the Agency's view of what regulatory
regimes should look like against which the review of legislation
can take place so as to achieve the model regime.
— Agency Paper on Opportunities
and Barriers (Oct 98). Proposals for new or amending legislation
to address problems and provide solutions to various aspects of
environmental regulation. For example, it provided an outline
for a system of environmental licensing that recognises the wide
variation in the scale and potential environmental impact of licensable
activities by the use of licences minor and major tailored to
the activity.
— Contribution to DETR Paper on
Charges harmonisation (Oct 98). A paper proposing ways to
harmonise the widely different charging schemes for environmental
licence application and subsistence.
— Public registers (Oct 98).
A paper offering the reasons for and advantages to be gained by
changes to legislation to improve and simplify the provision of
information by the Agency and SEPA.
— Comparison of IPC and Radioactive
Substances regimes. A paper comparing the similarities and
difference between the two regimes.
In addition the Agency made presentations at
a seminar with DETR Directors in September 1999 at which the Agency
promoted the following:
— The Agency's key principles and priorities
for their work on environmental regulation over the next few years.
— The Agency's work on a licensing
structure featuring three tiers (lower, middle and top) each with
differing requirements of industry in proportion to environmental
risk.
— The Agency's proposals re operators
carrying out more self-monitoring of discharges with an accompanying
move to the use of EMS and EMAS audit reports.
— The Agency's views re moving industry
away from paying for regulation to paying for their impact on
the environment on a fully costed basis, which would act as a
driver to make them more efficient.
The Agency also outlined work already instigated
on integrated/common approaches to their work in areas such as
enforcement and prosecution, extended public consultation for
selected licence applications and emissions reporting. Plans for
further integrated approaches included the issuing of unified
site licences, a pilot scheme to test out modifications to regulatory
practice at sites with accredited environmental management systems
and electronic dissemination of technical and internal guidance.
Potential future development areas are being
considered with respect to: licensing, public participation in
decision making, voluntary agreements, incentive charging and
public registers.
Legislative Review Steering Committee
The Agency is committed to support the work
of the steering committee and in particular has agreed to:
— Develop business impact statements
identifying the costs/benefits of legislative changes to bring
about integration and improvement of environmental legislation.
— Identify opportunities for incremental
improvements to legislative that will remove barriers to integration.
— Develop a generic list of terms for
the different legislative regimes to provide common language and
definitions across all regimes.
— Support work on further developments
to the Agency's three tier licensing system proposals.
— To work with the Department to examine
the role of public registers and public involvement in decision
making in the light of Aarhuus.
4. INTEGRATED
POLLUTION CONTROL
(IPC) UNIT CHARGING
RATE (£1,215)
An analysis of the IPC Inspector Unit Charging
Rate is presented in Annex 3.
Details are also published in the Environment
Agency's leaflet "Fees and Charges—Integrated Pollution
Control 1999-2000", which is freely available from Agency
offices (copy enclosed).
The following key points are particularly relevant
to the issues raised during the Inquiry:
— The Environment Agency is required
by Treasury's Fees and Charges Guide, and its own Financial Memorandum,
to recover all relevant costs associated with the licensing and
regulations of IPC and Radioactive substances (RAS) sites. Indeed
this requirement applies to all the Agency's charging schemes.
— The "inspector day rate"
(the term commonly applied to the IPC unit charge rate) is a misnomer
and is not a simple day rate which can be compared with commercial
consultancy day rates. It is instead a basis used for recovering
all the relevant costs attributable to the licensing and regulation
of an IPC (or RAS) site. The technical support work required to
determine the licence, the development and promulgation of technical
guidance, practical development of new regulatory regimes, policy
development and relevant R&D accounts for approximately two-thirds
of the costs included in the "inspector day rate" of
charge. These elements might be charged separately, but instead
are factored into total costs and recovered via the inspector
day rate and a component charge.
— It should also be noted that the
remaining one third of the cost, ie that of directly employing
front line staff is not the rate actually paid to an inspector.
It is the full cost of an inspector spread over the average time
an inspector spends on individual applications and authorisations,
which are approximately 60 per cent of his time. The remaining
40 per cent is spent on essential work to support individual authorisations,
such as policy development, work planning and R&D, which must
also be recovered from individual customers within the charge-out
rate.
— The Agency's charging rate of £1,215
has been compared unfavourably with that of both SEPA (£600)
and Health and Safety Executive (HSE) (£750). However, it
should be noted that both SEPA's and HSE's level of grant subsidy
from Government is much higher that the Agency's (64 per cent
and 84 per cent respectively compared with the Agency's 20 per
cent in total and 44 per cent on Environmental Protection (EP)
functions). This invalidates any like for like comparison of unit
charge rates. A crude analysis taking such factors as grant subsidy
into account does however indicate that the charges are similar.
A detailed comparison of charges is underway.
— The Agency has already undertaken
a major rationalisation of its organisation and continues to be
committed to an efficiency programme which continues to deliver
£12 million savings year on year (ie every year a further
£12m). Charge payers receive a share of the benefit as an
offset against annual charge increases.
— The Agency's accounts are subject
to the regular scrutiny of commercial external auditors (currently
PricewaterhouseCoopers) appointed by the DETR.
The Committee has also received comments concerning
the value for money for Agency charges. For example at its site
visit to Avonmouth, Rhodia may have given the Committee the impression
that all they get for the charges of £130,000 pa is a site
visit from an inspector once every two months, whereas the actual
breakdown of the Agency charges is approximately as follows:
| IPC licence annual subsistence charge
| £58,000 |
| IPC licence variations | £10,000
|
| Discharge Consents | £14,000
|
| Landfill site licence | £9,000
|
| Compliance Monitoring charges | £30,000
|
| Water Abstraction charges | £9,000
|
| Total | £130,000
|
| |
The total charge for this very complex site constitutes only
about 2 per cent of the company's turnover and it is important
to recognise that these payments:
— provide Rhodia with a licence to operate
— allow Rhodia legally to discharge strictly controlled
amounts of pollutant to water, air and landfill
— allow Rhodia to take strictly controlled quantities
of water from the environment
— allow Rhodia to revise its processes and vary
its discharges
—provide the company with analytical information about
the quality and quantity of its discharges;
—ensure the company and its UK competitiors have a more
or less level playing field from an environmental point of view;
—provide Rhodia with an environmental improvement plan
which may also enhance their operating effectiveness; and
—give Rhodia access to expert environmental advice.
The IPC subsistence and variation charges specifically provide
for some twenty inspections per year plus six meetings with senior
management. Officer time is also accounted for in office time
analysing monitoring reports and preparing variation conditions.
The Agency uses a lower rate for the Control of Major Accident
Hazards (COMAH) (the same as HSE's) so that it does not duplicate
the recovery of central costs already achieved through IPC charges.
5. MATRIX STRUCTURE
The potential organisational structure for multi-functional
organisations like the Agency has two extremes. These are central
functional control, which allows for a high degree of consistency
but no integration, and local control, which leads to integration
but little functional consistency.
Neither extreme would be appropriate for the Agency.
The Agency is required by the government to "adopt,
across all its functions, an integrated approach to environmental
protection and enhancement" and must not ignore its customers'
reasonable wish for national consistency and equitable treatment.
The matrix is a way of developing and operating nationally
consistent policies with a high degree of local delegation and
integration. This is achieved by involving members of regional
teams, who are accountable to their Regional Director, but also
advise the functional Head Office policy team, in the development
of policy and monitoring of operations.
This ensures that policy developed by the Head Office team
has the benefit of practical, local, advice from the Regional
teams.
The Head of Policy who chairs meetings of the regional and
Head Office policy groups, is also able to monitor and to quality
assure the implementation locally of agreed national policy through
the matrix.
The matrix works in an overall organisational context which
also includes the financial and non-financial schemes of delegation,
core values such as teamwork and customer focus, and customer
facing groups for different industry and agriculture sectors.
6. POLICY GUIDANCE
The Committee asked the Agency whether it operated to draft
policy guidance which is different to its published policies.
There are some areas of guidance, such as legal notes for
inspectors to make sure they comply with the law, which are not
placed in the public domain. We would find it helpful however
if the Committee could identify the particular areas where it
had heard that two sets of guidance or policy, in draft or elsewhere,
existed within the Agency so that we can provide a fuller explanation
if required.
7. DEVELOPMENT IN
FLOOD PLAINS
The Agency expressed the view to the Committee that its flood
plain maps should be in the public domain and that it was seeking
advice from leading Counsel to see if these maps could be accessible
to the general public by typing their postcode on to the Internet.
The Agency has now received the advice that it is legally
permissible for the public to access the flood maps in this way
and it will now be making arrangements to place the maps on the
Internet.
The Agency hopes the Committee will support the Agency in
this action.
Ed Gallagher,
Chief Executive
February 2000
| 
