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Lord Whitty moved Amendment No. 7:

Page 1, line 25, at end insert--
("( ) In the definition of "environmental pollution" in subsection (3), "harm" means--
(a) harm to the health of human beings or other living organisms;
(b) harm to the quality of the environment, including--
(i) harm to the quality of the environment taken as a whole,
(ii) harm to the quality of the air, water or land, and
(iii) other impairment of, or interference with, the ecological systems of which any living organisms form part;
(c) offence to the senses of human beings;
(d) damage to property; or
(e) impairment of, or interference with, amenities or other legitimate uses of the environment (expressions used in this paragraph having the same meaning as in Council Directive 96/61/EC).")

Lord Dixon-Smith had given notice of his intention to move, as an amendment to Amendment No. 7, Amendment No. 8:

Leave out line 4

The noble Lord said: In the light of the Minister's remarks, which I shall study with great care, I shall not move the amendment.

[Amendment No. 8, as an amendment to Amendment No. 7, not moved.]

On Question, amendment agreed to.

4.30 p.m.

Lord Jenkin of Roding moved Amendment No. 9:

Page 1, line 25, at end insert--
("( ) Regulations under this section shall require individuals or bodies responsible for carrying out such activities as are referred to in the regulations to employ the best available techniques not entailing excessive cost (in this clause referred to as "BATNEEC") to be used for minimising the pollution which may be caused to the environment as a whole by those activities:
Provided that--
(a) regulations under this section may specify circumstances where a more or less restrictive regime than BATNEEC

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may be required either to comply with European or other international obligations, or on account of other circumstances;
(b) where regulations are made pursuant to paragraph (a) above, they shall be accompanied by a statement explaining why such a more or less restrictive regime should be applied; and
(c) if the regime to be employed is more restrictive than BATNEEC, the regulations embodying that regime shall not be made unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.")

The noble Lord said: We return to the subject of BATNEEC: best available techniques not entailing excessive cost. We debated this matter fully at the earlier Committee stage. Of all the original recommendations made by the Delegated Powers and Deregulation Committee, the one that the committee acknowledged the Government had not met was its original proposal that BATNEEC should be written into the Bill. In response both to the third report of the Delegated Powers and Deregulation Committee and to the Select Committee at a later stage, the Minister has argued that he is justified in not accepting this proposal, that the well understood, well tried and well applied British test of BATNEEC should be included in the new Bill and the regulations, because there may well be circumstances in which it would be necessary to legislate for what might be described as a more stringent requirement. I believe I am right in saying that the Select Committee recognised the weight of that argument, but also thought it right to clarify whether or not there would be any circumstances in which a less stringent test should be applied. Its indication was that there would not, and should not, be.

This new clause takes up both those points. It attempts to meet the Government's argument that there may well be circumstances where a more stringent test than BATNEEC should be applied. But it also raises the possibility that there may be circumstances where it would not be right to apply the full rigour of BATNEEC where a less rigorous regime would be appropriate. One can imagine circumstances where the balance of cost and advantage, between the cost to the operators and the advantage to the environment (I use the word in its widest sense) might well justify such a circumstance.

My amendment therefore recognises that BATNEEC should be the central test. I argue for that because the principle is well known and well understood. Also, the Minister has said, in various different formulations--that it is very similar to; or not dissimilar from; or that BATNEEC lies at the heart of the environmental legislation--that this is what firms, professionals and regulators in this country are all familiar with. If it is the same as the test in the directive, why should we not continue to use it?

The amendment recognises that there may be either a more stringent regime or a less stringent one. It therefore meets the Government's case on a more stringent regime but provides a new procedure. If, in their wisdom, the Government decide to make regulations which would impose a more severe duty on operators than BATNEEC, or if they were to decide, perhaps in the face of opposition from environmental groups, that there

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should be a less stringent regime, they would have to accompany the regulations with a statement justifying their decision. Further, those regulations must be subject to the affirmative, not merely the negative, procedure in both Houses of Parliament.

I ask the Government to consider this amendment seriously. It is intended to meet the case pressed by industry, and by the Select Committee, to write BATNEEC--best available techniques not entailing excessive cost--into the Bill. It meets the Government's case as regards giving them power to impose a more rigorous regime. It would also allow the Government in certain circumstances to introduce a less rigorous scheme, subject to the procedural proposals that I have just described. I beg to move.

Lord Dixon-Smith: In rising to support my noble friend, I congratulate him on his ingenuity in drafting an amendment which literally allows the Government to go both ways--to be more, or less, severe--and then requires them, whichever way they may choose, to provide a public explanation of the reasons for so doing.

The BATNEEC principle is well understood and is measurable. It has worked successfully for a very long time. The difficulty with moving to a more open and potentially more severe regime is the possibility that no limitations would thereby be created. Theoretically, an industry could quickly be closed down. My noble friend's amendment at the very least merits serious study.

Lord Whitty: This matter is slightly complex. There are two separate issues involved. The first is whether we should retain as part of our new regime the concept of BATNEEC, or whether we should adopt the BAT regime specified in the directive. The second concerns the freedom of manoeuvre of the Secretary of State in either direction.

On the first issue, I appreciate the point made by both noble Lords that BATNEEC is a concept with which industry in general is already familiar. It is not originally a British concept. It arose from an EC directive issued in 1984 and was reflected in the 1990 Act. The EU has moved on and has now replaced BATNEEC by specifying the concept of BAT, which we must now apply.

I see that BATNEEC appears to provide a more explicit reference. However, the two techniques are similar. To my knowledge, neither industry nor regulator has expressed any great concern about having to substitute one for another. BAT is clearly defined in the European legislation--far more clearly than BATNEEC was defined in the 1990 legislation. Paragraph 11 of Article 2 of the directive makes it absolutely clear that cost is a key consideration. It states that,

    "available techniques shall mean those developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions, taking into consideration the costs and advantages". We are therefore not losing the reference to costs which may be behind some of the concerns expressed.

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I should point out that the UK Government cannot now alter the concept of BAT as it is set firmly within the framework of European legislation. Only by changing the European legislation could it be altered. That would require us to go back to square one in Europe, let alone on this particular base of legislation. Although BATNEEC and BAT are similar, they are not identical. We are obliged to transpose the directive in terms of BAT. Since BATNEEC is not identical, and does not have a definition which would allow us to argue that it is identical, we do not have that option.

Perhaps more fundamentally, if we tried to legislate for BATNEEC here while the directive prescribed BAT, we would all have a headache, working with two different potential definitions and a constant argument about which one applied. That would cause the kind of legal muddle which I know the noble Lord desires to avoid.

On the second issue, under Section 7 of the existing Environmental Protection Act 1990, an authorisation has to include such conditions as the regulator considers appropriate to achieve a number of objectives, including BATNEEC, and such conditions as are specified in directions given by the Secretary of State. Thus, there is some flexibility in the existing system.

The circumstances in which more stringent conditions than those dictated by BATNEEC may be imposed are not specified in the l990 Act. Likewise, the conditions in which more stringent criteria than BAT could be specified in the current proposals are not specified either in the directive or in our proposed Bill. Nevertheless, we have recognised that there could be directives or consequences arising from the discussions on the report of the noble and learned Lord, Lord Donaldson, or others which were not covered by the technique of BAT. We would wish to impose more stringent regulations on them. As the noble Lord, Lord Jenkin, indicated, the Delegated Powers and Deregulation Committee recognised that. If we wished to make more stringent regulations they would need to be subject to affirmative procedure.

The flexibility to operate in the opposite direction, to dilute the effect of BAT or BATNEEC under the existing situation, arises in the sense that the Secretary of State and the regulator have both the ability to grant a transitional period, for example, and to take note of the particular technical and locational characteristics of the installation concerned. If an operator feels that a rigid application of the technique to his case is wrong, there are grounds for appeal.

Therefore, under the current regime--and it will continue under this regime--we allow some degree of flexibility. I would not say it is less stringent; it would allow a case-by-case assessment of the situation. If that degree of discretion were to be prescribed in regulations, the flexibility would be removed. That would probably be a retrograde step in the way in which the regulator co-operates with industry in applying the regulations.

Therefore, on both grounds but particularly on the first ground, I do not think it would be sensible to specify BATNEEC in the way proposed in the noble Lord's amendment. We might be in some difficulty were we to

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attempt to do so. I appreciate his desire to give the Government and the regulator some degree of flexibility, but we do not believe that laying down that it should be prescribed in regulations would be the appropriate way to achieve that. It might make matters more rigid than they would otherwise be.

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