Memorandum submitted by the Confederation
of British Industry (ELD 12)
EXECUTIVE SUMMARY
1. The Confederation of British Industry
(CBI) has been involved in the policy debate about the Environmental
Liability Directive (ELD) since early in its development and has
worked with DEFRA to see that the UK position reflects business
concerns.
2. DEFRA's support for the ELD and ensuring
that it contained many elements favourable to business was good.
However, there is still uncertainty as to the details of the ELD
implementation and the liabilities that could occur in the interim.
3. The CBI supports the decisions that the
Government has taken on areas where discretion has been left to
Member States as the best option to maintain UK competitiveness.
4. There are other regulatory developments
such as the proposed Soil Framework Directive which will have
implications for the future implementation of the ELD and therefore
should be considered by this inquiry.
CBI EVIDENCE
1. The Confederation of British Industry
(CBI)—with a direct company membership employing over four
million and a trade association membership representing over six
million of the workforce—is the premier organisation speaking
for business in the UK. Our members represent a wide range of
industry sectors, including those covered by Annex III of the
Environmental Liability Directive (ELD).
POINTS ON
THE COMMITTEE'S
PARTICULAR INTEREST
AREAS
DEFRA consultations
2. The CBI has been involved in DEFRA's
stakeholder consultation on the ELD since the Directive was being
discussed in Brussels. Prior to the agreement of the Directive,
DEFRA's consultation with stakeholders was excellent: stakeholders
were kept up to date of the progress of discussions in Brussels
and information to support the Government's position was sought
regularly. DEFRA's input at all levels led to the agreement of
a Directive which included many elements needed to make implementation
fit with good business practices.
3. Following the adoption of the Directive
there was very little contact between DEFRA and stakeholders until
late 2005, when a draft consultation document was discussed. Based
on the DEFRA implementation strategy which was set out for stakeholders
following the adoption of the ELD it is unclear why the transposition
process has taken so long and why the UK will be late in implementing
the ELD.
4. In other regulatory areas within DEFRA,
the Environment Agency (EA) is invited to engage with the stakeholder
group at an early stage. The EA has not to our knowledge been
present at stakeholder discussions on the ELD, even though it
would have been useful to have their input on issues such as the
permit defence and the extension of the scope to cover UK designated
sites and species. The CBI raised this concern at the stakeholder
meetings and at the Committee's inquiry on the Environment Agency
in 2006.
5. The CBI supports the Government's proposed
approach to implementing the ELD, however, we are still unclear
as to many of the details as these were not included in the recent
consultation and will be determined through guidance.
Member State discretion
6. The CBI fully supports DEFRA's intention
to adopt the permit and state of knowledge defences. DEFRA was
instrumental in ensuring that the defences were included in the
ELD.
7. The permit defence is particularly important
for businesses whose activities are covered by Annex III of the
ELD as they are already highly regulated. The cost of obtaining
an IPPC permit for a complex site in the UK, for example, is well
over £100,000, with annual subsistence charges of many tens
of thousands of pounds. This does not include the internal cost
to companies of dealing with the permit and its maintenance, reporting
etc. In other Member States the costs associated with such permits
is significantly lower. Not adopting the permit defence could
impact the competitiveness of the UK based companies compared
to those in other Member States.
8. The CBI has always supported DEFRA's
intention of limiting strict liability under the Directive to
Annex III activities. Proportionate liability is the most equitable
means of dealing with multi-party cases and non-Annex III damage.
SSSIs
9. The CBI fully supports DEFRA's position
on limiting the scope of the ELD to EU designated sites and species.
Businesses who are situated near to a SSSI already have this reflected
in their permit conditions and are subject to an increased regulatory
charge as a result. Extending the scope of the ELD would be regulatory
goldplating and could be seen as a way of making businesses who
are in compliance with the law pay to achieve the Government's
environmental quality targets for which they are not liable.
ADDITIONAL POINTS
10. There is still a lack of clarity as
to how cases of environmental damage which meet the ELD thresholds
will be dealt with between 30 April 2007 and the adoption of the
UK regulations. In our response to the recent consultation we
asked DEFRA to provide advice as to whether the existing regulations
will apply, or if the ELD will be applied retrospectively to any
such cases. As yet we have received no clarification from DEFRA
on this matter.
11. The European Commission published proposals
for a Soil Thematic Strategy and accompanying Soil Framework Directive
(SFD) in September 2006. The SFD is closely linked to the ELD
as it will in effect apply to soil contamination which occurred
at a site before the ELD came into effect, and in the future to
cases where the ELD limitation of liability of 30 years has expired.
In addition, the SFD requires the revision of the ELD. The CBI
is concerned that the SFD has none of the risk-based, proportional
elements of the ELD and could have significant implications for
business. For example, under the current proposal, sites which
are identified as contaminated must be remediated, regardless
of the potential risk posed, or the associated costs and benefits.
Due to close linkages between the ELD and the SFD we feel that
the Committee should look at the implications of the SFD on the
implementation of the ELD as part of this inquiry.
12. It is important that the implementation
of the ELD be considered within the context of the Better Regulation
agenda, and in particular the Davidson and Macrory Reviews and
DEFRA and the EA's proposed Environmental Permitting Programme
(EPP).
April 2007
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