Three things you need to know
- EU environmental law is commercially significant for many businesses operating in the UK. The EU has been very important in influencing and driving change in most areas of UK environmental law. As a result, EU environmental law is commercially important for UK business. It establishes rules which go straight to the bottom line, like air emissions limits, regulatory controls on waste and environmental rules applicable to products placed on the EU market. The Environment Agency estimated last year that 90 per cent of prosecutions it brought involved breaches of EU derived law.
- In terms of environmental law, there are many possible outcomes to the "Brexit" process. If the UK retains access to the single market, it is likely to remain subject to most EU environmental laws. In this scenario, there would be no fundamental regulatory change for UK business. If the UK exits the single market, EU environmental laws will – at least in the long term – cease to apply. In this scenario, there is likely to be a "transitional period" during which EU laws will continue to apply, to avoid a regulatory vacuum. Even where the UK exits the single market, all environmental rules relating to products (e.g. essential requirements for packaging) will need to be complied with if UK products are to be sold into the EU market.
- If EU environmental law is phased out, this will present both a threat and an opportunity for UK business. A threat because if there is a poorly managed transition, for example if important rules and incentive systems fall away and are not replaced, this will discourage investment and cause confusion amongst operators. It may also lead to a drop in environmental standards even amongst law-abiding businesses. An opportunity because the EU legal framework is inflexible and slow to react. Without it, the UK government and regulators will have an opportunity to design and consult upon a more sophisticated, flexible and effective environmental regime.
Brexit and environmental law
Introduction: has EU environmental law been a force for good?
The EU legal framework is in some respects very well suited to effective environmental regulation. For example, it can:
- set common rules and standards e.g. on emissions limits which are consistent across all EU member states. Common rules across the EU do not allow any one member to lower environmental standards intentionally to attract businesses at the expense of the environment;
- define pan-EU environmental objectives with specific binding targets (e.g. for a percentage proportion of energy to be provided by renewables by a set date);
- set common environmental rules relating to products placed on the entire EU market e.g. relating to packaging or information on disposal.
This overarching structure confers stability and business certainty on the EU market. It is also (arguably) well suited to effective long-term environmental policy. For example, the setting of long term environmental objectives and targets (e.g. emissions or waste reduction targets) is dealt with at EU level and is removed from the political cycle in individual member states.
On the other hand, the government has little flexibility on the implementation of laws relating to the environment, including the timing of measures and the extent of regulation. Because of this it can be difficult to adapt UK legislation to respond to the UK's needs.
However, any disadvantages associated with the inflexibility of the EU framework need to be balanced against the advantages of a "level playing field". The EU environmental law framework ensures the enactment of environmental measures in the UK which are, by definition, consistent with legislation enacted in other EU members states. Arguably this encourages investment and business mobility across national boundaries. And, although influencing EU environmental policy can be difficult and frustrating both for UK government and commercial interests, whilst it remains a member of the EU, the UK government and business is entitled to and regularly does influence the development of EU environmental law at EU level.
Some sectors in fact benefit from strong regulation from Brussels. The waste and renewables sectors are good examples of this. In the waste sector, stringent controls from the EU on landfill and challenging targets for recycling and recovery rates have driven substantial investment in the sector. In the renewables sector, EU targets for renewable generation have driven substantial investment, particularly in wind and solar technologies.
But the UK Government has by no means unequivocally welcomed EU environmental legislation. It has reacted differently to different areas of EU regulation. Some proposals that have come out of the European Commission would under no circumstances have been adopted by the UK Government voluntarily. For example the UK has been opposed to a target for renewable energy and energy efficiency and has not supported aspects of the "circular economy" package currently at proposal stage in the EU. Another example is the Offshore Safety Directive, which was adopted in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico. The UK was opposed to new legislation in this area, taking the view that the UK had a world-class regulatory regime for oil and gas and did not need new EU legislation. Nonetheless a new Directive on Offshore Safety was passed, and had to be implemented in the UK.
There are some areas of EU environmental law the development of which has actually been led and influenced by the UK, such as the pollution control regime and the Water Framework Directive. These areas of EU law are in some important respects modelled on the UK regime.
Some regulatory mechanisms work better at European level, such as the European Chemicals Agency. This organisation carries out work in regulating chemicals within the EU, which is expensive, technical and resource heavy, and benefits from the economy of scale achieved by an EU-wide framework. It would be difficult for the UK to replicate its work as a single nation.
What will happen to EU environmental law as a result of Brexit?
EU environmental law, including new EU laws, will remain binding on the UK at least until such time as it exits the EU.
If the UK negotiates a Brexit package which includes single market access (like Norway) it is likely that the UK will continue to be bound by most EU environmental legislation, including any future changes and revisions to the regulatory framework. A few areas of EU law, e.g. conservation law such as the Habitats and Birds Directives and water quality legislation, would probably not have to be retained as part of a single market deal. However, we suggest the UK is likely to retain or replicate those areas of environmental protection.
If the UK does not negotiate access to the single market, but exits the EU anyway, the position is less straightforward. In that scenario, the UK will, starting on the day it leaves the EU, no longer be obliged to apply EU environmental laws. However, in practice, the status of UK environmental rules which are derived from EU legislation, and the extent to which the UK decides to continue to apply such rules, will be in the hands of the government of the day. We consider below some of the issues that are likely to arise if the UK does not negotiate access to the single market.
- Transitional period. In the UK, the majority of our environmental law derives from EU legislation. EU law is implemented into UK law by both primary legislation (Acts of Parliament) and secondary legislation (statutory instruments such as regulations and orders). There is a great deal of reliance on the European Communities Act 1972, which applies EU community law in the UK, as the parent act. Whilst this Act will need to be revoked if EU law is to be disapplied, it is difficult to see the UK Government simply allowing all EU environmental directives and regulations to fall away abruptly on Brexit day. This would leave a regulatory vacuum, create severe regulatory uncertainty for business, and, we suggest, profound difficulties for environmental regulators. To address this, the UK Government may consider "grandfathering" existing EU legislation at the point of exit from the EU, together with relevant UK primary and secondary legislation implementing those EU laws. This would preserve existing EU environmental laws until such time as they are reviewed, consulted upon and reformed as appropriate, with unwanted EU laws thrown out and others retained and/or reformed. There are some difficult questions which will arise as to how such a transitional period will work. For example, if EU environmental laws are to be preserved during a transitional period, will the Government also wish to continue to apply new developments in EU law that arise during the transitional period? Or will it preserve only those laws that were applicable on Brexit day?
- Change in status of EU case law. EU case law has a strong influence on how UK environmental regulators make decisions about the legality of UK business operations. In many cases, EU case law will draw the line between a criminal breach and lawful activity by an operator. The status of this important body of case law will certainly change following an exit from the single market. However, how it will change is not clear at this stage. There are some difficult issues here. For example, will pre-Brexit High Court decisions based on CJEU judgments be binding on future High Court decisions? Will post-Brexit CJEU cases and opinions be persuasive in UK courts if they are relevant to questions of interpretation before the UK courts on EU-derived laws which have been preserved? Could operators revisit or challenge previous CJEU interpretations simply on the basis that the CJEU no longer has jurisdiction in the UK? Certainly there are some areas of law, e.g. the legal definition of waste, where UK courts have been openly critical of the CJEU.
- Status of non-EU environmental law. Most EU environmental law is in the form of directives, and thus implemented in the UK by means of domestic legislation. The UK also has other international environmental obligations outside of those found within EU law. Examples include the OSPAR Convention on marine pollution, the Berne Convention on conservation and the Aarhus Convention on access to environmental information and justice. Where the UK is independently a party to international environmental agreements, a decision to leave the single market will not affect the UK's commitments under those agreements.
- "Stand-alone" EU targets. There are other areas, such as waste management and renewable energy targets, where there is no international equivalent and the EU has led the way. In these areas, the UK would need, if it wished to continue to apply these targets, to retain EU targets or enact new legislation implementing its own targets in these areas.
- Environmental product regulations. Finally, trading with the EU from outside the single market will entail a continuing requirement to comply with some aspects of EU product-related legislation, as any state outside the EU importing in currently has to do. This would not be all European legislation, but would include areas of product regulation (e.g. relating to packaging waste, waste electronic equipment) and the requirements of REACH.
Law stated as at 11 July 2016