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Viscount Ullswater: Amendment No. 237A, moved by the noble Lord, Lord Northbourne, would give an enforcing authority the power to consult with the owner of a closed landfill site when preparing a remediation statement. It is certainly the Government's intention that an enforcing authority should, as a matter of best practice, consult with those concerned both when preparing a remediation statement for a closed landfill site or, indeed, when preparing a remediation notice for any contaminated site. It is expected that the agencies' guidance to local authorities will make this clear.

This consultation could usefully serve to promote better mutual understanding between the regulators and those being regulated and could provide an opportunity to encourage voluntary action to deal with

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contamination. However, the Government are not convinced that there is a need to specify on the face of the Bill that the enforcing authorities have a power to consult for this purpose.

Amendment No. 237B, spoken to by the noble Lord, Lord Northbourne, would replace the existing duty on enforcing authorities to serve a remediation notice for any contaminated land with a discretionary power to do so. The Government would be extremely reluctant to soften this aspect of the regulatory regime, particularly if the definition of contaminated land is to be amended to bring it into better alignment with our "suitable for use" policy. A softening of the duty to serve a notice would result in there being a discretion for enforcing authorities to allow land to remain in a condition in which it was unsuitable for use, and this could not be supported.

A further issue is that we wish to avoid the possibility that a local authority might hold back from serving a remediation notice if the potentially liable site owner appeared to have few resources. It would then serve the notice on any "deeper pocket" who subsequently became owner of the site, unaware that the local authority was lying in a regulatory ambush. That would clearly be unacceptable, and the Government also wish to resist that amendment.

Having said that, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Northbourne: With regard to Amendment No. 237B I shall await the noble Viscount's new definition of contaminated land. With that comment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 237AA not moved.]

11 p.m.

The Deputy Chairman of Committees (The Viscount of Oxfuird): I must advise the Committee of a printing error in Amendment No. 237AB on the Marshalled List. It should read "line 5" and not "line 4". In addition, the use of italics is incorrect.

Lord Peyton of Yeovil moved Amendment No. 237AB:

Page 50, line 5, at end insert ("and has sought the advice of the appropriate Agency in accordance with section 78B(2), in particular as to whether the contaminated land poses an unacceptable actual or potential risk to health or the environment such that immediate remediation is required.").

The noble Lord said: In tabling Amendments No. 237AB and 238ZZB I am animated by the most respectable of purposes. First, I wish to understand the mind of the Government and, secondly, I wish to help them to achieve their purpose.

I should be grateful for my noble friend's confirmation that, since the Government themselves—for reasons which I understand perfectly—are not willing or able to clean up all contaminated land (and I avoid the term "remediation" even though I believe it finds favour with the noble Lord, Lord Williams of Elvel, because I do not like it), they wish to encourage potential improvers to do it for them. That being the case, I take it that they wish to ensure that land is

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saleable to those who wish to use it for a certain purpose and that it is made fit for that purpose. I hope that I have construed the Government's mind accurately.

I believe that we all agree that there ought to be a duty to act on all contaminated sites where there is an unacceptable risk to health or the environment. There are a great many contaminated sites which do not at present constitute such a menace. The cost of coping with all sites at once, regardless of risk, would be intolerable. Therefore, I hope that Amendment No. 237AB, which seeks to place some restriction on the freedom of local authorities immediately to identify as potentially dangerous any site as they see fit, will be helpful to the Government.

The second amendment suggests that regard should be had to the intended use of the land. There must be a vital distinction as to the use to which contaminated land is to be put. If it is be used for certain purposes then the land will have to be cleaned. For other purposes such a high standard of cleansing is not necessary. As I said in my opening remarks, it must be the Government's intention to promote a reasonably free and mobile market in contaminated land so that people who are willing to improve it have a chance to buy it on reasonable terms. That is all I need to say. However, I hope that my noble friend will be extremely grateful to me for the understanding that I have shown for his intentions and for the way that I seek to help him forward.

Viscount Ullswater: I hope that my noble friend will be equally grateful for my reply.

Essentially, the amendments go back to the discussions we had on earlier amendments both in terms of the overall definition of contaminated land and the importance of the use of the land in determining any remediation requirements. As I stated earlier, it is the Government's intention that remediation should be based on the suitable for use approach and that the definition of contaminated land should reflect the policy intentions we expressed in our document, Framework for Contaminated Land. The issue of whether any land in fact presents unacceptable actual or potential harm should be covered in the revised definitions which I have already suggested that the Government will introduce at a later stage. I also suggested earlier that any remediation notice also needs to consider those environmental effects which are not dependent on the use of the immediate site, in particular water pollution and the effects on neighbouring sites.

Perhaps on that basis I may ask my noble friend to withdraw his amendment.

Lord Peyton of Yeovil: I wish to consider carefully what my noble friend said, rather quickly. I am not all that quick at picking up the points at this hour of the night. However, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 237B to 238ZZB not moved.]

Lord Northbourne moved Amendment No. 238ZA:

Page 50, line 29, at end insert:

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("( ) A remediation notice shall not be served where the state of scientific and technical knowledge at the time when the substances were permitted or caused to be present in or on the land was not such that a person who caused or permitted them to be present in or on the land could have reasonably foreseen that their presence there could result in the contamination of that land.").

The noble Lord said: Amendment No. 238ZA refers to what might be called the state-of-the-art defence. I know from reading the Framework document that the Government are not well disposed to this concept.

The argument is that the liability for remediation must be limited by the liability which the owner of the land or the polluter undertook when the pollution took place. If at the time Brussels had not invented the particular contaminant to which the remediation notice relates, how could the person concerned have known that he was doing a wrong thing when he allowed that contaminant or substance to be deposited on the land?

It is worth noting that in its report on the European Green Paper on the use of civil liability for remedying environmental damage your Lordships' Select Committee on the European Communities argued that there should be a state-of-the-art defence as a matter of equity and people in the companies should be encouraged to make the best efforts to minimise pollution. As drafted, the Bill clearly is in conflict with the principles of equity and natural justice.

In the document Framework for Contaminated Land the Government point out that the common law rule in Cambridge Water Company v. Eastern Counties Leather plc established that a plaintiff must establish that the specific damage complained of was reasonably foreseeable at the time of the polluting act or emission.

I wish to ask the noble Viscount two questions. First, does the rule established in Cambridge Water Company v. Eastern Counties Leather plc apply to remediation notices served by a local authority or by the agency? Secondly, what in practice is the difference between the state-of-the-art defence which is proposed in the amendment and the defence that pollution was not reasonably foreseeable arising out of the common law rule established in Cambridge Water Company v. Eastern Counties Leather plc? I beg to move.

Lord Jenkin of Roding: This is as good a peg as any on which to hang a question to my noble friend about the meaning of the words "permitting or knowingly permitting". In his reply to me a few moments ago, my noble friend used the phrase "knowingly permitting". I think it is important for us to give consideration to what is meant by it, because it is a fairly loose term. Although, as I understand it, there is no substantive case law dealing directly with lender liability in the context of "knowingly permitting", a number of legal commentators have identified that lenders have a potential liability for knowingly permitting pollution with respect to activities of the borrower. Under the present drafting, therefore, as with the previous amendment, the risk remains that lenders could be held liable as appropriate persons, merely because they "knowingly permitted" substances which have

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contaminated land, to be on or under their land. I suggest that that might well be a matter which my noble friend may wish to consider.

Of course, lenders recognise that the environmental performance of their borrower may be one of the important factors when they come to make the loan and one may have loan documents which give lenders certain rights to check up that a borrower is performing his duties in relation to the pollution of the land. There may be circumstances in which a lender has a right to demand payment or immediate repayment or for the borrower to take corrective action if environmental performance is not up to scratch.

The fact remains that most banks and building societies are not experts in the field and they should not be held responsible for the acts or omissions of their borrowers merely because they happen to take what may be regarded as responsible steps to try to assess the quality of a borrower's environmental performance, requiring and monitoring environmental loan conditions. Again, there is the same problem. If the lenders are to be held liable in those circumstances, then lenders will not lend, business will suffer and the economy will suffer in consequence. There is an argument here as to what is meant. How far does the liability go and what do the words "permitted or knowingly permitted" mean in those circumstances?

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