Supplementary memorandum submitted by
Sandy Luk (ELD 20a)
IN RESPONSE
TO EVIDENCE
SESSION OF
13 JUNE 2007
Please note that the text in italics reflects
the author's understanding only of the evidence given by Mr. Ian
Pearson, MP, Mr Nigel Atkinson and Ms Caroline Connell to the
EFRA Committee on 13 June 2007.
1. THE HIGH
DAMAGE THRESHOLDS
According to the UK Government's analysis
of the potential economic and practical impact of the Environmental
Liability Directive (ELD), it would seem that the ELD will have
very little effect in the UK, only applying in less than 1% of
all environmental damage cases. This assessment is made because
the damage thresholds under the ELD are perceived to be extremely
high ("significant adverse effects" etc).
There are a number of problems with this approach:
(a) Although the thresholds are undoubtedly
high, both the threshold in relation to wildlife damage and the
one relation to water damage are intended to be set at too high
a level. Indeed, in evidence it was admitted that "favourable
conservation status" might be applied to a field, South East
England or more, as appropriate. However, if transposed as planned
(as evidenced in the Government's first consultation paper), this
could mean that the UK will be in breach of the ELD and the Habitats
Directive 1992, with the possibility of infraction proceedings
being brought against the UK.
Another important point to make in this context
is a legal/practical one. Under the requirements of the ELD, operators
are under an immediate obligation to take control and containment
measures if they cause environmental damage. It will be impossible
for an operator to wait until it is established whether this damage
is significant, if he is to comply with the provisions of the
Directive and not expose himself to significant additional liabilities.
In the case of prudent operators this will mean that the high
damage threshold, at least in relation to immediate control measures,
will not be as important as it is made out to be by the Government,
but in any case imposing a very high or unnecessarily complex
damage threshold will make it very much harder for operators to
assess the significance of damage themselves and come to the right
decision in this context.
Set at the appropriate (and practical) levels,
damage thresholds may still be high, but may well allow for more
cases to be caught by the ELD. Also, lower thresholds would make
for more clarity, certainty and predictability for operators in
practical terms, fewer breaches of the ELD with less onerous long-term
liabilities.
(b) In addition, Defra's analysis of the
likely number of cases that would be caught by the ELD shows a
strong reliance on cases that fall within existing legislation.
However, the ELD operates differently to existing legislation.
Unlike the Water Resources Act 1991, for example, the ELD covers
all types of environmental damage, not just pollution damage.
In relation to wildlife damage, the ELD could also cover development.
Moreover, it covers protected habitats and species outside Natura
2000 sites, as well as on such sites.
It is very difficult to assess the significance
of these issues and make a reliable prediction of future cases,
but what is clear is that the Government has probably under-estimated
the number of cases that could fall within the ambit of the ELD.
(c) There will be significant over-lap and
conflict between the ELD and national law, which will lead to
confusion and a possible eroding of national laws over time. The
imposition of high thresholds in the ELD is not a good reason
to let this happen. Rather it would make sense to take a robust
approach that ensures a high level of environmental protection,
clarity and predictability.
(d) The meaning of "significant",
particularly in relation to wildlife damage, is a partly legal,
mainly scientific question, and, especially in relation to ELD
damage, which has already happened and is not a matter of future
conjecture (as opposed to future damage under the appropriate
assessment mechanisms of the Habitat Directive), is not a matter
of value judgement, except to a very minor degree.
BETTER REGULATION
AND REASONS
FOR NOT
OVER-IMPLEMENTING
From the evidence given, it would appear
that there are two main reasons against "over-implementation"
of the ELD (in spite of the over-all benefits identified in the
Regulatory Impact Assessment's (RIA's) cost-benefit analyses in
relation to some of the "environmental" options). They
relate to the marginal benefits of the environmental options and
the lack of support for better fitting laws:
(a) The benefits
identified in the RIA are so marginal that they are not worth
pursuing, and it is felt that in that situation additional costs
to business are not justified. The Government consultation is
said not to have identified any major additional benefits, and
the figures in the cost-benefit analyses were not challenged.
In this context, it should be noted that some
of the NGO responses (eg the RSPB's), did challenge the RIA and
the cost benefit analyses, as well as the underlying minimum implementation
approach applied to the ELD (see first part of the RSPB's response).
They identified a probable over-estimation of costs and under-estimation
of benefits in the cost benefit analyses, as well as instances
where costs appear to have been taken into account more than once
in the underlying calculations (thereby de-creasing benefits).
In addition, they questioned the compatibility of this approach
with true "better regulation" principles and with the
UK Government's Sustainable Development Strategy and the application
of the "polluter pays principle".
In terms of the importance of the benefits identified
in the RIA, it is questionable whether they really are "marginal".
In fact, all the alternative options taken together are shown
to be of a beneficial value of £4.8 million per year which
amounts to roughly 23% of the total annual benefits identified
for the minimum implementation option—not merely a marginal
increase (see summary table on p 8 of the consultation document).
Moreover, in relation to wildlife protection
and set against the annual spend on wildlife protection and, in
particular, damage restoration, £1 million per annum, for
example (roughly the value of the benefit identified in the RIA
for including SSSIs), constitutes a significant amount. As an
example, the water vole is a species subject to widespread decline
and needing vital recovery work, and therefore subject to much
higher spending than other species protected under the UK Biodiversity
Action Plan. The Environment Agency estimates that plans that
are intended to improve the status of the water vole amount to
£1.2 million per annum. On average, yearly spending is around
£56,000 per action plan. Clearly, £1 million a year
in this context is not a marginal sum.
(b) There is no intention to change existing
laws and no strong case was made in the consultation responses
to make the laws fit together better, even if the law will not
be "as clear and transparent as could be".
Many of the responses to Defra's consultation
high-lighted concerns about the potential overlaps and conflicts
between different laws on the same kind of environmental damage,
which may lead to an erosion of stronger national laws over time.
Of equal, but possibly more immediate importance, though, are
the several instances identified by consultees, where the Government's
current approach would lead to breaches of the ELD itself or of
other European laws, leading to the possibility of infraction
proceedings being brought by the Commission (for example, in relation
to the thresholds, or in relation to applying the permit defences
before remedial measures have been taken).
In addition, it would be worth considering the
discussions in relation to the "disproportionate costs derogations"
under the Water Framework Directive 2000 and ensuring consistency
of approach to these kinds of considerations where the value of
environmental benefits is set against the relevant costs.
INCLUDING SSSIS,
UK BIODIVERSITY ACTION
PLAN HABITATS
AND SPECIES
AND RAMSAR
SITES
(a) Including SSSIs within the ambit of the ELD rules
will only be of marginal benefit (see arguments above) and will
only lead to a 1% improvement in meeting the Government's Performance
Services Agreement (PSA) target of bringing 95% of SSSIs into
favourable or recovering condition by 2010, which is also felt
to be of marginal value.
It is mistaken to see a 1% improvement in meeting
the 95% target as a marginal improvement only. At the moment,
the Government is struggling to reach this PSA target, and has
yet to improve performance by roughly another 20% to actually
meet this target. To the same degree as improving performance
becomes more difficult (as is witnessed by current status), every
additional percentage gain is harder to achieve and more valuable,
so where first improvements of SSSI condition were relatively
easy to achieve, any additional improvement now is becoming harder
and harder and any gain is extremely important. Therefore, a 1%
improvement to meeting the Government's PSA target is extremely
important, and more so the closer the target becomes to being
met. If it is true that the damage thresholds have been over-estimated
and the benefits of the environmental options under-estimated,
this percentage may be higher in any case.
(b) It is argued that 90% of SSSIs will
contain some kind of EU feature in any case. However, it is also
stressed that it will only be the EU features, which will benefit
from protection under the ELD, not any of the remaining protected
SSSI features. Similarly, Ramsar sites are covered if an EU feature
is at stake.
The figure of a 90% "overlap" appears
to be a new one, which has not so far been mentioned in any official
documentation that the author of this note is aware of. The Defra
consultation paper refers to a figure of a 70% overlap between
SSSIs and Natura 2000 sites (by area), and the Government's answers
to parliamentary questions show that 3,300 SSSIs will not be covered
at all by the ELD. It is quite likely that the 90% figure is an
over-estimate, but even if it is not, it must be remembered that
the ELD will only apply if an EU interest has been damaged, but
not if a nationally important feature is damaged.
THE POLLUTER
PAYS PRINCIPLE
In its assessment of the provisions of the ELD,
the Government appears to be focusing very much on what it perceives
to be "fair" on industry, particularly in the application
of fault-based and strict liability, ignoring the extent to which
principles of strict liability are already anchored in UK law,
and ignoring its commitment to the "polluter pays principle"
in relation to environmental protection and as part of its Sustainable
Development Strategy. This is of particular relevance in the field
of GMOs and similar technologies.
UN-REMEDIED DAMAGE
There still has not been enough focus on the
problem of un-remedied damage under provisions of the ELD. It
is clear that the ELD does not impose, and the Government does
not accept, the concept of "subsidiary state responsibility"
in relation to environmental damage that falls under the Directive
but where the operator cannot be found or cannot pay. Unless such
a principle is accepted, at least to an extent, it will be impossible
to operate a regime that contains fault-based liability concepts,
and that incorporates defences such as in relation to compliance
with permit or operation according to the state of scientific
and technical knowledge at the time.
June 2007
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