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House of Commons
Session 2008 - 09
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Public Bill Committee Debates

The Committee consisted of the following Members:

Chairman: Mr. David Amess
Allen, Mr. Graham (Nottingham, North) (Lab)
Beresford, Sir Paul (Mole Valley) (Con)
Harris, Mr. Tom (Glasgow, South) (Lab)
Hewitt, Ms Patricia (Leicester, West) (Lab)
Hogg, Mr. Douglas (Sleaford and North Hykeham) (Con)
Horwood, Martin (Cheltenham) (LD)
Kumar, Dr. Ashok (Middlesbrough, South and East Cleveland) (Lab)
McIntosh, Miss Anne (Vale of York) (Con)
Morden, Jessica (Newport, East) (Lab)
Norris, Dan (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
Robinson, Mr. Geoffrey (Coventry, North-West) (Lab)
Smith, Mr. Andrew (Oxford, East) (Lab)
Swire, Mr. Hugo (East Devon) (Con)
Watkinson, Angela (Upminster) (Con)
Williams, Mr. Roger (Brecon and Radnorshire) (LD)
Wright, David (Telford) (Lab)
Mark Oxborough, Committee Clerk
† attended the Committee

First Delegated Legislation Committee

Tuesday 23 June 2009

[Mr. David Amess in the Chair]

Draft Environmental Permitting (England and Wales) (Amendment) Regulations 2009

10.30 am
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Norris): I beg to move,
That the Committee has considered the draft Environmental Permitting (England and Wales) (Amendment) Regulations 2009.
The regulations are being made to transpose, in England and Wales, the permitting and compliance requirements of directive 2006/21/EC, known as the mining waste directive. The directive’s key objective is to prevent, or to reduce as far as possible, any adverse effects on the environment and human health as a result of the management of waste from the extractive industries. This essentially means waste from the extraction and treatment of mineral resources and the working of quarries.
A series of pollution incidents, including serious incidents in Spain in 1998, where a waste pond with dangerous materials in the water broke its banks, and in Romania in 2000, where cyanide, which is used in gold extraction, got into a river, killing all of the aquatic life, led the European Commission to consider the need for a specific measure on the management of extractive waste. After extensive negotiations on a Commission proposal, the outcome was the adoption in May 2006 of the mining waste directive.
The due date for transposition of the directive by member states was 1 May 2008, and the European Commission has recently confirmed that 17 out of 27 member states have formally notified their transposing legislation. With the agreement of the House, the regulations that we are debating today will enable the Government to do so in relation to England and Wales, with the agreement of the Welsh Assembly Government as well. Separate regulations will be made by the devolved Administrations in Scotland and Northern Ireland.
The Government established close and regular contact with the extractive industries during the negotiation of the directive and have maintained that contact since its adoption. It is the Government’s policy not to gold-plate directives by going beyond their minimum requirements, and to make full use of available derogations. Our aim has been to fulfil both objectives in the transposition of the mining waste directive.
In addition to our continuing engagement with the industries, the Government carried out a three-month public consultation on the options for transposing the directive. We consulted on three transposition options and assessed the cost of each in an impact assessment. After consideration of all the responses to the three options, the Government concluded that the most effective and cost-efficient means of fulfilling the directive’s objectives is by using the environmental permitting system, with the Environment Agency as the regulatory authority.
The environmental permitting system came into force in April 2008 and already implements 12 other EU directives. It is part of the Better Regulation initiative by the Government to cut red tape and reduce regulatory costs for industry while continuing to protect the environment and human health. As I have said, the key objective of the mining waste directive is to prevent, or to reduce as far as possible, any adverse effects on the environment and human health as a result of the management of extractive waste. Parliament has already given the Environment Agency responsibility for the management of waste from other sectors of industry in England and Wales. The Government have concluded that the Environment Agency is also best placed, and should have the responsibility, for dealing with waste from the extractive industries.
The operators of most extractive waste facilities already hold an environmental permit to meet the requirements of other EU directives. Transposition of the mining waste directive by means of the environmental permitting system therefore ensures that the administrative and regulatory burdens arising from the directive are kept to a minimum.
The regulations before the Committee will ensure that the directive’s requirements are implemented in a proportionate, risk-based and cost-effective way. In the Government’s view, transposition of the directive by means of the environmental permitting system, with the Environment Agency as the regulatory authority, will be of benefit to the industry, the environment and, very importantly, human health. I commend the regulations to the Committee.
10.34 am
Miss Anne McIntosh (Vale of York) (Con): Welcome to the Chair, Mr. Amess. It is a pleasure to appear before you. I congratulate the Minister on his reappearance on the Government Benches. It is a particular pleasure to welcome him to this position and I look forward to many outings together in the time remaining.
I also want to put it on the record that the postponement of the first Committee sitting at short notice was unfortunate. It did not affect me unduly and I will not labour the point, but I know that a number of staff members would have been travelling in from some distance during a strike. The fact that the sitting was postponed only at five minutes to 6 the day before caused some inconvenience. I am sure that the Minister would like to address that in his remarks.
For the sake of clarity, let me say that I speak for the official Opposition on environmental matters. However, for a number of years I was a practising European lawyer in Brussels, and for 10 years I was also a Member of the European Parliament. I spoke on transport matters, rather than the environment.
As eloquent as the Minister’s opening remarks were, he has failed to make the case for why we need to introduce these regulations at all and in particular, at this time. I would argue that the consultation itself was flawed. The Minister has been in post for a short time, but I am sure that he would have been well briefed because he is a very able chap. As he stated in his opening remarks, regulations to introduce the mining waste directive were meant to be transposed by 1 May 2008. In the Government’s own document—the explanatory memorandum—they say that one of the main reasons for transposing this directive is simply to avoid being prosecuted for an infraction or breach of the European directive. As the Minister knows, many in the House of Commons would wear that badge with pride, but this Government wear that badge with supreme pride. His Department has said on the record that it has no intention of introducing and implementing the EU floods directive by the time it is meant to be transposed into British law.
I welcome the Minister’s statement that the Government have no intention of gold-plating the regulations. However, he cannot expect us as parliamentarians—nor indeed, can he expect the industry—to accept that the main purpose of the regulations is simply to avoid infraction proceedings. To me, that is not a good reason. I put it to the Minister that it is much better to delay the introduction of the regulations until proper consultation has taken place and the industry has had sufficient time to prepare. I would also be grateful if the Minister could confirm whether the industry would be expected to implement these regulations by 8 July, if the official Opposition’s request to delay the transposition fell on deaf ears. The first week in July would not give sufficient notice to the industry to meet the requirements of what is a technical directive.
There is an issue of greater concern and it is quite a technical point. The draft Major Accident Off-Site Emergency Plan (Management of Waste from Extractive Industries) Regulations 2009 are due to come into force at the same time as the environmental permitting regulations. They are not as straightforward as they appear. Paragraph 14 of proposed new schedule 18B of the Environmental Permitting (England and Wales) Regulations 2007 was not part of the consultation by the Government. It was introduced only towards the end of the period of consultation on the regulations before the Committee.
There was no proper consultation on paragraph 14 (2), which states:
“The regulator must refuse an application for an environmental permit relating to a Category A mining waste facility that is an existing mining waste facility upon receipt of a notice by the relevant emergency planner stating that the operator has not provided the information necessary to enable the relevant emergency planner to draw up an external emergency plan.”
Although the industry will proactively engage at an early stage with the so-called relevant emergency planner to ensure that the information required is scoped as fully as possible, there is grave concern in the industry that—through no fault of its own—the authority may have to issue a notice to the Environment Agency that would lead to the refusal of the permit application.
The Minister and I live a long way from Cornwall and do not have the pleasure of representing that part of the country. However, I am told that if the Minister is not minded to delay the implementation of the regulations providing for enforcement measures—backed up by heavy penalties—and should the existing operational facility not have a permit on the due date of 1 May 2012, then an interim refusal does not appear to be the most effective way of meeting the objectives in the directive. The implication is that the operating plant might be forced to close down, with the consequent loss of jobs and loss to the local economy of Cornwall.
I understand that, given a little more time and effort, a suitable mechanism of arbitration or form of appeal added to either set of regulations could alleviate the considerable operational difficulties and disruption to the industry, and particularly to the continued supply of china clay from the south-west. Lead mines were the traditional source of employment in the south-west, but china clay still has a substantial contribution to make to industry in that area. I hope the Minister will look kindly on those remarks.
The main purpose of the regulations, as the Minister said, is to implement the EU mining waste directive. There are a few minor technical changes to the original 2007 regulations. One of those will directly affect a number of waste management activities. The technical change to regulation 71 will affect landfill sites that are currently operating under old waste management licences and are the subject of an appeal, meaning that if an appeal is rejected, the site could close under the old waste management licensing rules without its needing to transfer into the new environmental permitting regulations. I do not know whether that is an unintended consequence.
The effects of the EU mining directive and the draft regulations are a cause of concern for quarrying. There are a number of issues about how the regulation and the directive fit with the requirements of the waste framework directive. The concerns centre on the back-filling of quarries with material generated by quarrying activity. Currently, this is regarded as a recovery operation. Under the new regulation, the status of back-filling activity would be changed; the waste legislation would be invoked, and the activity would become a disposal operation—landfill tax would become payable on all material deposited, albeit at a lower rate. The Minister will understand that for the industry, the consequences of that are not insubstantial.
As the cost of disposing of quarrying material rises due to landfill tax, some operators might seek to divert the material to sham recovery projects such as golf course improvements, when, in fact, they are depositing waste. There has, I think, been a recent example of that not a million miles from the area you represent, Mr. Amess. The Department and the Environment Agency are, I understand, aware of the concerns. Will the Minister explain how he and the Department propose to address those?
The cost of transposing the directive is not insignificant. The explanatory memorandum sets it out in detail. The impact on business and charities or voluntary bodies of fulfilling obligations under the draft regulations is estimated to be in the region of £95.7 million. The impact on public sector bodies of covering the costs of enforcing the draft regulations will be about £2 million per annum. One element of the regulation which is of concern to the UK minerals industry and in particular, the china clay industry, is paragraph 14(2) of new schedule 18B. That was inserted in the draft regulations only in April 2009 and did not, as I understand it, feature in the draft that went out to consultation in February. If that is the case, the Minister will surely accept that the consultation is flawed.
I have mentioned that paragraph 14(2) will allow the Environment Agency to refuse a permit for the operation of existing category A facilities. I hope that the Minister will address that point. The UK has one of the most effective systems of regulatory control for mining waste operations in Europe. What representations have been made to the European institutions—the Council of Ministers and the European Parliament—to ask why we should be giving up a very good regulatory control system for a less effective one. Many other states, including Germany and Sweden, have decided that their existing regulations are sufficient and do not need changing in light of the mining waste directive. It appears that we would be able to maintain the status quo and the Government could have argued that UK-based firms remain subject to the regulatory controls. We are actually going to discriminate against and disadvantage—in the Minister’s terms, we are going to “gold-plate”—the regulatory regime that UK firms will be faced with from 2012. They will also be subject to greater regulation than their European counterparts, quite apart from having firm regulation in the UK. I would welcome the Minister’s comments on the fact that insufficient consideration has been given to the potential impact on the china clay industry of the regulations that I mentioned.
Momentarily, I would like to turn to the explanatory memorandum which apparently, does not give a full explanation of the total costs. Will the Minister tell us why that is? Paragraph 15 of the impact assessment says that the failure to implement the directive would leave the UK open to infraction proceedings. As I mentioned at the outset, that is not a reason for putting the Committee through its paces or for incurring extra regulatory costs for the industry. The Government have no intention of implementing other directives in time, so why this particular one?
Paragraph 22 of the impact assessment states clearly that no assessment of costs under article 14 of the mining waste directive was made. Why not? Paragraph 35 mentions that assumptions have been made about the nature of waste from the extractive industries under article 3(1) of the directive. It would be helpful to have an idea of how those definitions were arrived at. How does the Minister see the definitions set out in the explanatory memorandum fitting in with current UK practice?
I ask the Committee to look at the summary on page 15 of the analysis and evidence, which sets out the annual benefits. Having set out that the costs are £95.7 million—a one-off cost of £27.58 million over four years and an average annual cost of £8.47 million—it tells us that the only annual benefit that can be quantified is the avoidance of fines from the European Court of Justice. Yet we already have a much tougher regulatory regime than any other European country. Perhaps the Minister can clarify that, and explain why the time scales are so tight and why there was not a full consultation.
Tables 5.6a, 5.6c and 5.6d in paragraph 5.22 of annex 1 show how the total costs—which seem quite staggering—were arrived at. How does the Minister expect the industry, in a time of recession and credit crisis, to pay those? Table 5.12 shows how the change in costs as a percentage goes up incrementally over the period in question.
To conclude, I have set out a good case why the Committee need be detained no longer today. I hope that the Minister will withdraw the regulations, renew consultation—particularly on paragraph 14—so that a proper consultation can be done, and come back to the Committee with a full breakdown of the costs. It is not good law to say that a regulatory regime is being introduced not because it will impose a better, fairer system, but to avoid infraction proceedings before the European Court of Justice—that does not wash.
10.51 am
Mr. Roger Williams (Brecon and Radnorshire) (LD): It is a great pleasure to serve under your chairmanship, Mr. Amess. This is the second outing I have had with the Minister and I look forward to his response to the full case made by the hon. Member for Vale of York. She has been so comprehensive that she has almost covered the whole of the common brief we have been provided with.
There is no good time to load any industry with regulation. That is particularly so when those such as UK quarrying and other mineral extractive industries are well regulated and fulfil all the criteria necessary at the present time. They are far better regulated than industries in many other EU nations that have said they do not wish to implement these regulations, as they believe their industries comply with the highest standards.
The key issue is paragraph 14 of new schedule 18B, which was not consulted on when the impact assessment went out for consultation. That gives the Environment Agency the right to close a facility if it does not provide the required information. That is a draconian sanction to impose on any operation, and a company can access no appeal procedure or tribunal to contest it. It is an inappropriate sanction in any case because to walk away from a facility would leave it more dangerous and liable to environmental damage than if the operation continued. Other sanctions, such as fines or imprisonment, could be applied to those that do not provide that information.
Briefly, I concur with the hon. Lady that the regulations should not be implemented now and should go out for further consultation. In any event, the sanction is inappropriate and conducive neither to health and safety nor environmental safety.
10.54 am
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