House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Fourth Report

Conflicts of interest

64. The designation of the Environment Agency as competent authority raises the possibility of conflicts of interests. For example, British Waterways, whilst welcoming the choice of the Environment Agency as competent authority, says that "there are issues arising from the fact that the Environment Agency will effectively be regulating its own operational activities in navigation and flood defence".[106] Another witness identified difficulties in the fact that as competent authority the Agency would presumably require that water quality improved, whilst at the same time being obliged to abide by investment decisions made for the water industry by the regulator, in part following directions made by Defra.[107] We recommend that the Government examine concerns about possible conflicts of interest arising as a result of the designation of the Environment Agency as competent authority, and that it act to resolve them as necessary.

Lack of democratic mandate

65. The Water Framework Directive will affect all parts of society.[108] The Directive's objective of good water status will be achieved via a programme of measures to control a wide range of human activities, which, directly or indirectly, impact on, or are affected by, the water environment. There will therefore be impacts on specific industries and sectors such as the chemicals industry and agriculture,[109] and on social and economic development. River basin management plans will impact on all those living in the districts to which they apply.[110] While there will be public consultation about the management plans, ultimately decisions about them will be made by the competent authority: the Environment Agency.

66. The wide-ranging impacts of river basin management plans on the life of individuals and communities covered by them has led some to argue that, like other development plans, they should be decided by an authority with a democratic mandate.[111] The Environment Agency is a technocratic body, primarily functioning as an environmental regulator. It is not felt by all to be the appropriate body to make decisions which are of political or socioeconomic significance. Defra does not accept that view: the Minister told us that as an agency of Government the Environment Agency is accountable through Ministers to Parliament.[112] We have considered the arguments made about the disparity between the designation of the Environment Agency as sole competent authority under the Directive and its perceived lack of a democratic mandate. We are not persuaded by them, particularly since most of the alternatives proposed would require yet another layer of government to be created to oversee river basins. Instead, we believe that mechanisms which allow proper consultation with the public and other relevant bodies will respond to concerns about the democratic legitimacy of the process.

Integration and powers

67. The point made about the 'undemocratic' nature of the Environment Agency goes hand-in-hand with concerns about the range of powers needed to deliver the objectives of the Water Framework Directive. Whilst previous water-related Directives were targeted at specific water issues, the Water Framework Directive, as we have indicated, takes a much more holistic approach to the protection and management of water resources. As Severn Trent Water Limited put it, the Directive "does affect the water environment, but it is a much more all-embracing environmental Directive".[113] The Chief Executive of the Environment Agency agreed. She said that

"the one thing that I think took quite a lot of people a long time to discover about the Water Framework Directive is that it is not just about water, it is probably more about land use than anything else, so the two major impacts on land use are planning development and agriculture ... we certainly would want to see planning authorities with a duty to take account of the requirements of the Water Framework Directive in their planning role".[114]

In other words one of the most important facets of the Directive is the need to integrate landuse and development planning with water resource planning and pollution control.[115]

68. The point was also made by the RSPB. It told us that "many land use planning decisions affect the good status of waters. These include water resource requirements for new housing developments, water runoff from developments and infrastructure which can exacerbate flooding and cause pollution, developments on functioning floodplains which have detrimental effects on natural flood management processes, and point source discharges such as sewerage and downpipes. Local authorities will need to play a key role in achieving the Water Framework Directive's objectives".[116]

69. Integrating other areas of policy with water policy will pose considerable institutional challenges. The Environment Agency told us that as competent authority it would need to work closely with water companies, Ofwat, the agricultural sector, regional and local planning authorities, and other regulators such as English Nature and the Countryside Council for Wales, as well as data and research providers.[117] The Agency also observed that it would "need to be assured that there are obligations on other statutory bodies to ensure timely and appropriate participation from them, to allow the competent authority to meet its statutory duties".[118] The development of such new institutional arrangements appears to be some way off: the RSPB told us that "this whole issue is very under-developed".[119] And the Head of the Water, the Marine and Soil Unit in DG Environment of the European Commission told us that his "observation is that many of the Member States are only just waking up to how big an institutional challenge that is".[120]

70. We strongly recommend that the Government begin now to develop the arrangements, agreements and protocols which will be needed to ensure that the river basin management plans drawn up by the Environment Agency as competent authority carry sufficient force - and to ensure that the Agency is required to take into account the views of others in drawing up the management plans. Clarity about such matters is in any event essential, but settling the details of these administrative arrangements sooner rather than later will allow shortcomings to be identified and addressed.

71. For example, Defra proposes that the Water Framework Directive should be brought into force through secondary, rather than primary, legislation.[121] The Minister told us that "we have well-established primary legislation that is in place ... Therefore, the bulk of the implementation will be by secondary legislation".[122] South West Water Limited, however, reported to us that "primary legislation is recommended strongly as the preferred vehicle to enable the transposition of the Water Framework Directive into national legislation".[123] We do not make a judgement on this point: although the status and comprehensive nature of the Directive amply justifies the introduction of a 'standalone' bill, the important point is the effectiveness of the transposition of the Directive into national law, not the means by which that is achieved. But until the administrative arrangements which will enable the Environment Agency to function as the competent authority have been properly explored, Defra cannot be certain that primary legislation is not required. We therefore repeat our recommendation that possible shortcomings in such administrative arrangements be identified as early as possible, and we recommend that the Government keep an open mind about the need for primary legislation to address such shortcomings. To address this issue the Government should publish a legislative impact study on the requirements of the Directive. In particular it should examine how it relates to existing law in planning, abstraction controls, discharges and flood defence requirements. It should also address the question of whether any new laws are required, particularly in areas such as groundwater management.

A pilot river basin management plan

72. In order to guide implementation of the Directive, Member States have begun work to identify 'pilot' river basins, and to develop management plans for them. The Head of the Water, the Marine and Soil Unit in DG Environment welcomed this development. He told us that

one of the reasons why I think the pilot river basin exercise is going to be useful is that not only will it demonstrate how effective [the] technical guidance document will be, but by trying to replay it in practice, the institutional barriers and institutional problems will be highlighted.[124]

He suggested that the pilot river basin management plans would be an antidote to complacency in Member States: "what I have heard many Member States say is, 'Oh, we have these arrangements and we have always worked on the basis of river basins for many years and we know what we are doing', but then they actually start to look at it in practice and they say, 'Oh, that means we have to talk to these guys now and these guys', and on and on and on".[125]

73. It was therefore surprising that, alone among Member States, the United Kingdom Government initially decided not to identify a pilot river basin.[126] The logic behind the decision appears to have been that management of water resources and water quality in this country has been based on river basins for a number of years, and that we already had adequate experience. It is an attitude reflected in the Environment Agency's observation that "this is a better way of doing old things rather than something that is completely new ... in other Member States .. they have not had the experience that we have had".[127] However, Defra subsequently announced that in fact a pilot would take place on the Ribble,[128] looking at "ways in which you can bring together the various aspects of regulation we have at the present time, diffuse pollution, abstraction, discharge consents, quality, use, and indeed involvement of public opinion as well".[129] We welcome the Government's belated decision to conduct a pilot in the Ribble valley basin. We trust that the pilot will be comprehensive, and not just a token exercise. We also trust that the results of the pilot will be published. We seek from the Government confirmation that the study will fully address the following points; clarification of the concept of good water status and the extent of the improvements necessary to achieve this; provision of an economic assessment of all aspects of implementing the Directive in the Ribble basin; trialing of measures designed to address different aspects of diffuse pollution; an assessment of the links between biodiversity and river basin plans, including the role of wetlands and salt marshes; and the means whereby all interested parties can be fully involved in the implementation process. We recommend that the lessons learnt in the Ribble valley inform decisions about the administrative arrangements concerning the Environment Agency's role as competent authority.

Consultation with stakeholders

74. Article 14 of the Directive, which deals with the provision of access to information and consultation with the public and interested parties, has been interpreted in various ways by our witnesses. The views taken of the Article have ranged from it requiring full stakeholder engagement, including public participation, to continuing with current, more limited, practices of providing some information and issuing consultation documents.[130]

75. These differences of view centre on different interpretations of the requirement of Article 14 that Member States "shall encourage the active involvement of all interested parties in the implementation of this Directive", and in particular on the meaning of the phrase "all interested parties". This may reasonably be construed to mean 'all stakeholders' which, given the wide-ranging impact of the Directive, represents a substantial group. The reality, however, is that whilst many in the water industry, environmental NGOs and the farming unions are keen to be involved, some important groups, including local planning authorities and some industries are not yet interested in the Water Framework Directive. For example, Water UK told us

local government is a challenge for us all ... we have had no problem at all engaging other stakeholders. We had a meeting yesterday with over 40 stakeholders, the RSPB, business, health, environmental groups, and so on, and the people who were conspicuous by their absence, again, were local government. Our regulators were there, Ofwat was there, Environment Agency was there, but again not local government. And we have always found it a problem trying to engage local government, particularly in the work of the Water Framework Directive, and that is a shame because they are going to have to be involved.[131]

Water UK also made the point that "the current low level of awareness about the implications of the Water Framework Directive for sectors that may be directly affected such as chemical manufacturing and the paper and pulp industry indicates the need for more information to be disseminated".[132] Many of our recommendations will inevitably lead to greater involvement by local government in the process of implementing the Water Framework Directive. Nevertheless, we recommend that the Government take further urgent steps to encourage local authorities, as well as all affected sectors of industry, to become involved in discussions about the implementation of the Directive.

76. Public awareness of, as well as interest in, the Directive is also low, despite the fact that it will have significant effects for everyone. There is an onus on those responsible for the legislation to stimulate interest in it. One of our witnesses told us that

public participation ... should help ascertain what people want and are willing to pay for on key issues such as flooding, water quality and recreational use of rivers. It can avoid problems and misunderstandings in the long term about the ways rivers are managed. It should result in both better informed and better value decisions.[133]

Without broad public involvement and acceptance, the degree to which river basin management plans will be successfully implemented is likely to be reduced. Yet the evidence of the Consultation Papers produced so far does not give hope for a wide-ranging public discussion of the subject. We recommend that Defra begin work now to determine how best to interest the public in the Water Framework Directive. Information should be provided both nationally, in terms of the reasons for, and potential impact of, the Directive as a whole, and locally, in the context of river basin management plans.

Conclusions about administration

77. The Government recognises the vital importance of water, and supports the idea of an integrated approach to policy-making surrounding water. In the foreword to Directing the flow: Priorities for future water policy, the Secretary of State said that

we must embrace wholeheartedly the aims of all three pillars of sustainable development - economic, social and environmental - in our approach to water. Second, water and the water environment cannot be taken for granted but need us to nurture and support it. Third, we need more integration between different strands of water policy and between water and other policy areas. Fourth, there is virtue in stability and certainty in the institutional and management arrangements for water: while we should be alive to the benefits and need for change, if we are expecting necessary investment to continue, there must be clarity and confidence about what is required and expected.[134]

Such comments obviously chime with the approach that will be needed for a successful implementation of the Water Framework Directive.

78. It is therefore regrettable that there has been so little progress in making the institutional changes that will be needed to meet the objectives of the Directive. As we have said, the Environment Agency has not been given sufficient resources as yet; and the Department itself has only about five staff dedicated to the Directive.[135] Little attention has yet been given to instituting the linkages between the Environment Agency and other interested parties, including those which will take a significant role in delivering changes needed under the Directive, such as local planning authorities. Efforts at consultation have been rather limited: certainly little or no attempt has been made to engage the wider public in discussion of the Directive. And there seems to be a 'mental block' about the possibility of using primary legislation to implement the Directive, which would offer the prospect of starting afresh in the management and improvement of water quality. In short, there is a palpable lack of urgency - perhaps even a sense of complacency - in the approach currently taken to making administrative arrangements to implement the Directive.

Integration: a new way of thinking?

79. The linkage by Secretary of State of water policy with the objectives of sustainable development, and the connection between water policy and other policy areas, are concepts which were taken up and expanded upon by a number of our witnesses. We have already set out the views of the European Commission, Environment Agency and Water UK that the Directive offers the prospect of economic and social, as well as environmental, benefits. Similarly, the WWF commented that "there could be significant socioeconomic and environmental gains from the more sustainable approach to water and land management that the Water Framework Directive could deliver".[136] The Natural Step told us that "the vision inherent in the Directive provides a powerful opportunity to invest in a future rich not only in biological diversity but also economic potential".[137] The Wildlife Trusts envisaged improved amenity and recreation, and "opportunities to engender social inclusion through community participation on the ground and in the development of plans".[138]

80. The United Kingdom Environmental Law Association told us that the Directive "provides a window of opportunity to set the foundations for delivering sustainable development because of its integrated approach towards water management and conservation".[139] As the Department created to take the lead on sustainable development,[140] Defra seeks to bring "farming, the food chain, rural affairs and the environment together in a sustainable partnership".[141] Implementation of the Water Framework Directive gives an opportunity for Defra to give real meaning to the rather nebulous concept of 'sustainable development'. We strongly urge the Department to approach it in that spirit, and to act positively and with enthusiasm in dealing with the Directive.

Costs, 'gold-plating' and the Directive

81. Estimates of the potential costs of the Water Framework Directive vary enormously. Certainly it will be an expensive piece of legislation, and allocating its cost fairly will be challenging for Defra, the Environment Agency, and those others involved. The Director General of Ofwat, agreed that it is "desperately difficult"[142] to decide how costs should be allocated and controlled, a concern shared by many other witnesses. It remains unclear how the cost burden will be distributed, and if or how the polluter pays principle will be applied. These ambiguities need to be resolved urgently so that an accurate total cost estimate can be produced. The 'polluter pays' approach to cost distribution set out in the Directive is generally accepted as a fair one; but as we have said agriculture can ill-afford the significant expense that it would incur if that approach was applied to diffuse pollution. 'End-of-pipe' treatment is likely to prove expensive to water companies and their customers, and will not tackle the root of the problem.

106 Ev 183, para.22. Back

107 Ev 178, paras.29 ff. Back

108 See Ev 107, para.5. Back

109 See, for example, Ev 132, para.22. Back

110 See, for example, Ev 242, para.2 Back

111 See Ev 178, para.36; Ev 180, para.6 Back

112 Q 519 Back

113 Q 304. Back

114 Q 204. Back

115 Ev 97, para.28; Ev 184; Ev 35, para.41; Ev 243, Section 1. Back

116 Ev 243, para.1.1. Back

117 Ev 55, para.13. Back