Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Examination of Witnesses (Questions 40 - 59)

WEDNESDAY 13 JUNE 2007

IAN PEARSON MP, MR NIGEL ATKINSON AND MS CAROLINE CONNELL

  Q40 Mr Drew: If we could move on from that to the issue which, to me, is really again at the kernel of whether this is going to make a real difference to wildlife sites, and that is about enforcement. As I say, it is interesting the allegations made that the Environment Agency was not present at stakeholder discussions. Certainly the Environment Agency has a view, if it becomes one of the competent authorities in terms of enforcement, whether it does that wholly or it does that in partnership with Natural England, and maybe other equivalent bodies. That is presumably something that you are looking to make a decision on following the consultation. What the Environment Agency certainly has said is that this is going to be an expensive occupation. They mentioned that they expect it to be about £700,000 per annum, assuming 15 cases a year, which does not sound like many cases. It is going to be at the front end of what the UK, playing its part within Europe, is actually introducing and that sounds like a very limited number of cases. Notwithstanding that, if those are the sorts of monies we are talking about presumably you are already engaged with the Environment Agency and Natural England to make sure that there is a funding mechanism, and presumably that there is a mechanism whereby those who transgress and cause the environmental damage will be paying for that damage, not only in terms of putting right the damage but also funding the policing of this particular operation. Is that something that you are engaged with in terms of those discussions?

  Ian Pearson: Firstly on the number of cases, clearly we do not know how many cases there are likely to be in any given year, but our best estimates are that these cases will be relatively few and far between because as I explained we are talking about significant adverse effects. So these will be important cases of environmental damage and it will be right that they are addressed in a sufficiently robust way. That is why £700,000 for 15 cases maybe sounds like it is not a great amount of money, but when you compare that sum with the total Environment Agency budget, which is around about £1 billion a year, I think you can see that we are only talking about a relatively small fraction of EA's budget overall.

  Q41  Mr Drew: Are you not a wee bit worried that if the allegation is true that they did not attend the stakeholder meetings that they are saying that they anticipate—

  Ian Pearson: I have to say I think that is something I think you can take up with the Environment Agency—

  Q42  Mr Drew: We certainly will.

  Ian Pearson: Certainly in all my dealings with the Environment Agency—and I meet them on a very regular basis—the Environment Agency is a very professional, competent body, and I have no doubt that it will want to discharge its responsibilities as a competent authority fully. It does so at the moment when it comes to the issue of environmental damage and it will do so under the ELD as well in the future, I have no doubt about that.

  Q43  Mr Drew: So they have not expressed any reservations to you at all about the new responsibilities they will get under the ELD?

  Ian Pearson: I have had no conversations with the Environment Agency where they have raised any significant problems with the role that they will be expected to fulfil as part of the ELD. Clearly they will make representations about the size of their budget as part of the Comprehensive Spending Review settlement; but this is in the general scheme of things, when you look at the size of the EA's budget, a relatively modest amount of expenditure that is going to be required in the future.

  Q44  Chairman: I am glad that everything is sweetness and light with the Environment Agency and we will explore that a bit further when we come on to asking some questions about the scope in the United Kingdom, the application of this, because some of the evidence submitted by the Environment Agency tells a slightly different story—it goes into the depths of what they are told.

  Ian Pearson: It is not a different story because we are talking about completely different questions. If you are asking did the Environment Agency have concerns about their ability to competently carry out their role then the answer is clearly no, they have not—I am sure they are completely confident in their ability to do that role. Do we have some policy disagreements with the Environment Agency from time to time on certain issues, including a few parts of the Environmental Liability Directive, yes, we have, and I am happy to discuss those with you.

  Q45  Chairman: Excellent.

  Ian Pearson: Particularly you will want to focus on SSSIs no doubt!

  Q46  Mr Rogerson: I think we have begun to establish, given that there are some fairly crucial issues, such as who will be responsible for the dealing with areas of enforcement and so on, what the problems are that you are trying to eliminate.

  Ian Pearson: Some limited areas but in lots of areas there is clear and common agreement.

  Q47  Mr Rogerson: These no doubt have contributed to the fact that we have passed the April 30 deadline and have not reached implementation—and obviously you said a number of States were in the same position. Have you yet had any formal contact with the Commission about late transposition and what action they might want to take on that?

  Ian Pearson: I have not as a Minister but I would not be surprised if officials have.

  Ms Connell: As you probably know the Commission start automatic infraction proceedings when you do not notify your implementing measures on time.

  Q48  Mr Rogerson: What sort of measures do you think the Commission would be considering? Have they given any indication of how they would react?

  Ms Connell: Yes, automatic infraction proceedings; that is what they do when you do not notify them on time.

  Q49  Mr Rogerson: What would be the result of those infraction proceedings? What sort of penalties can they impose?

  Ms Connell: The way it goes is that first of all they invite you to explain what the state of play is. Then in due course they will take a decision on whether the case ought to be referred to the European Court for a judgment, as to whether you are in breach, and if that happens then ultimately there might be a judgment and then if that happens the Commission could take it further. But we do not anticipate that we will get to that stage.

  Ian Pearson: That is the standard process, that every Member State that is late in transposing a Directive rule will go through and it does take, in many cases, a number of years, and certainly our anticipation at the moment is that we will have full implementation by May 2008, which will be a year late but I do not anticipate that we are going to have proceedings that will lead to fines or anything like that at all.

  Q50  Mr Rogerson: The City of London Law Society have raised the issue that we have this interim period now between passing that deadline on 30 April to transposition and the ultimate implementation, which you are saying might be a year. What would happen to those who had been breaking the regulation in that period? The City of London Law Society seemed to be of the opinion that having passed that deadline that we should really be enforcing. So what sort of arrangements will apply in that interim period?

  Ian Pearson: I am certainly aware of their opinion and I am aware of a number of different legal opinions in this area. I would like to say that my preference is for applying the obligations of the Environmental Liability Directive to incidents which occur after the regulations come into force, not before. I think this is simpler for everyone concerned. In the meantime, I am content that remediation can be delivered through our existing legislation, which is already strong; although I appreciate that it is not an exact fit with the requirements of the Environmental Liability Directive.

  Q51  Mr Rogerson: There are a number of legal opinions out there and you have just referred to one of them. Will Defra be issuing clarification to all the stakeholders along the lines that you have set out, about how you intend to handle it?

  Ian Pearson: I have stated my preference, that we should not be retrospective and we should not be applying this to incidents that occur before the regulations come into force, and I am happy to make that clear today, and my anticipation is that we would make this clear in the regulations.

  Q52  Chairman: One of the things that I was not clear about on this particular point was, say a factory had been continuously polluting some area of land through some deposit or other that it was pumping out through a chimney and it was causing damage, and it was not until after the ELD came into force that somebody noticed it and said, "Look, there is a problem," how do you handle the apportionment between what happened after implementation and what happened before? Is there a mechanism for doing that?

  Ian Pearson: The first thing to say is that if a factory is polluting now then it is likely that it is committing an offence under existing environmental protection laws in the United Kingdom, and I would expect to see that those laws are exercised. When you look at the financial penalty regime and the remediation requirements they are likely to be pretty much the same in the case that you are talking about, with existing law as it stands at the moment, and with the likely requirements of the Environmental Liability Directive. I think it is only in some other more specific cases where other remediation options are required that we are likely to see differences. As I say, overall we expect relatively few cases in a year, and it seems to me to be the simplest to make sure that it is only once the regulations come in place that we will enforce them.

  Q53  David Lepper: On this question of implementation you made it clear in the consultation document that it is the Government's policy not to go beyond the minimum requirements of the Directive unless there are exceptional circumstances justified by cost benefit analysis and following extensive stakeholder engagement. Yet you still consulted on the discretionary elements which would allow you to go beyond that bare minimum. Why did you do that if you had no intention of pursuing any of them?

  Ian Pearson: What we wanted to do as a Government is to be open and transparent about some serious policy choices that we have, and that is why you will find that when you look at the benefit costs assessment there is a case in some instances for actually going beyond the legal minimum implementation requirement. We think overall that is a marginal case and we do not think that there is strong and compelling evidence to go beyond it. Our policy right across Government that we do not believe in gold plating we believe is an important one, and that is why we took the decision that it should stand in this case, but we should give people an opportunity to express an alternative view.

  Q54  David Lepper: Many of them have expressed alternative views but you will not take any notice of them.

  Ian Pearson: We are fully assessing all the consultation and responses as part of this. I am not aware that there has come out of the consultation exercise major additional evidence that suggests there are significantly greater benefits than we have suggested as part of our draft regulatory impact assessment, that would make us want to change our mind. As we have said, yes, there is a case in some areas that you might want to go further, but it is not a very strong one. My understanding is that there were not any responses at all to the draft regulatory impact assessment, and so I think that people accept there is a marginal case for going it further. When you set that against Government policy overall of being against gold plating I do not think that that case is strong enough for us to say that we should go further and over implement, and that remains our position.

  Q55  David Lepper: You say there has been no case made in the responses to the consultation, except of a very marginal nature—

  Ian Pearson: No, just to be clear, I was saying that they have not disputed the benefit costs calculations of actually implementing on a sort of gold plated basis.

  Q56  David Lepper: If I am right the regulatory impact assessment did say that if the Government went beyond the minimum certainly there would be more cases to deal with and could be additional benefits of some £4 million to £5 million.

  Ian Pearson: Yes, it is pretty marginal overall, is it not? I do not think it justifies gold plating.

  Q57  David Lepper: In the light of all that could you give us some idea of what would constitute exceptional circumstances in this case? You say that you do not go beyond the minimum except in exceptional circumstances, so there must be some notion behind that of what exceptional circumstances might be.

  Ian Pearson: I think the notion would be that there would be very high benefits compared with the costs and that does not seem to be the case. We consulted and we gave people all our best views about benefits and costs and those figures have not been challenged. That is why I am saying that I do not think there is a compelling case for going further than minimum implementation of the Directive as it stands at the moment. I could conceive of other examples where it might make law fit together better, where you would potentially over implement, but we see that the Environmental Liability Directive has very much been supplementary and sitting alongside some very good environmental protection laws that we have in the United Kingdom.

  Q58  David Lepper: I think others might want to explore whether it might not give rise to some loopholes in the law, but I will leave that to other people.

  Ian Pearson: Can I be clear on this? We are not changing any of our existing law at the moment, and this is in addition to it. So if there are any loopholes there they exist already.

  Q59  Lynne Jones: Should you not want to close loopholes and use this opportunity to do so?

  Ian Pearson: I am very interested if you want to tell me what you think the loopholes are and then I will tell you whether I think they exist.

  Chairman: We are just the humble questioners; it is other people who tell us about loopholes.


 
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