The Environmental Liability Directive is now implemented in England. The new regulations impose liability for preventing and remediating environmental damage. This note considers its impact on developers
Environmental Liability Directive
The Environmental Liability Directive (2004/35/EC) (“the ELD”) imposes liability for the prevention and remedying of environmental damage. Although some aspects of the ELD are already incorporated in national legislation those parts not so covered have been transposed into English law by the Environmental Damage (Prevention and Remediation) Regulations 2009 (“the Regulations”). In some instances existing legislation is more onerous than the requirements of the ELD (but this is not being watered down).
The Regulations came into force on 1 March 2009. Defra has published explanatory non statutory guidance for England (“the Guidance”) and a summary booklet providing an overview of the environmental liability regime. The Guidance also serves as the draft guidance for the draft ELD Regulations for Wales which are expected to be implemented in the first half of 2009.
The Regulations introduce a concept of environmental damage or the threat of imminent environmental damage. There are three possible heads of environmental damage:
- damage to protected species and
- natural habitats;
- damage to water;
- significant risk of adverse effects on human health from land contamination by substances, preparations, organisms or micro organisms.
Liability arises when certain specified activities are undertaken which cause or imminently threaten environmental damage (in some instances a strict liability offence but with some limited defences). In respect of environmental damage to habitats or species only, liability also attaches when someone deliberately or negligently undertakes any commercial activity which brings about environmental damage to the habitat or species.
The aim of the legislation is to remedy the damage or remove the threat of such damage rather than penalise those responsible for it. That said, the Regulations contain criminal sanctions for any breach. For remediation of natural resources, other than land, the objective is to achieve remediation to the same level of natural resource or services as would have existed if the environmental damage had not occurred. For land contamination the requirement is to remove, control, contain or diminish the contaminants so that there is no longer any significant risk to human health. This requirement is based on a current lawful use or any use permitted by a planning permission in existence at the time of the damage. Remediation can, where appropriate, include allowing natural recovery of the land.
Primary Remediation and Complementary Remediation
It is recognised that remediation of natural habitats and species may not always be possible, either immediately or at all. In such circumstances, remediation has to consist of the primary remediation (essentially those works which are possible and return the damaged natural resources towards their predamaged state) and complementary remediation, being remedial measures elsewhere to allow for the fact that primary remediation will not completely make good the damage. Examples of complementary remediation given in the Guidance is the loss of ancient woodland, where it may be more effective to improve other existing woodland rather than try and replant on the site of the ancient woodland.
Compensatory Remediation for interim losses
Compensatory remediation may also be required to cover interim losses of natural resources pending the primary or complementary remediation taking effect. Despite its name, compensatory remediation does not include paying financial compensation to third parties.
Strict Liability Activities: Damage to habitats and protected species
The strictliability activities relating to damage to protected species or natural habitats are listed in Schedule 2 of the Regulations. Many of these relate to activities with which developers would not be directly involved. For example: undertaking industrial processes or other processes which require environmental permits under the Environmental Permitting regime; management of mining waste; transportation of dangerous or polluting goods; the contained use of GMOs. However, the more likely areas of impact could be:
- activities which require authorisations to discharge into surface water or ground water;
- activities that require abstraction and impoundment of water;
- activities involving the use of plant protection products or biocidals (for example when clearing or landscaping on site).
Negligent or careless activities causing damage to habitats or species
This is the second head of liability for environmental damage. Liability arises if caused by an activity where the responsible operator intended to cause such damage or was negligent as to whether such damage would be caused.
Tipping Off/ Interested Parties
The Regulations require enforcing authorities to consider any notifications given by “interested parties”. These are defined as any person who is affected or likely to be affected by environmental damage or who otherwise has a sufficient interest. Such people can advise the authority of any environmental damage or an imminent threat. The Guidance suggests that interested parties could include:
- bird watchers
- residents’ organisations
- those whose health might be at risk or who care for people whose health might be at risk
Actions required when Environmental Damage occurs or is threatened
Where there is an imminent threat of environmental damage or actual environmental damage, the responsible operator has to take immediate steps to prevent the damage or any furtherance of that damage. It has to report to the relevant enforcing authority details of the environmental damage and the action that it has taken. It is an offence not to do this. The enforcing authority can then serve a notice on that operator, requiring additional information and specifying the measures the operator must undertake to prevent further damage within a specified period. This will include requiring the submission of proposals that will achieve remediation of the environmental damage. The authority has a duty to consult “interested parties”, any person on whose land the remedial measures will be carried out and any other relevant person. Following consultation the authority may then serve a remediation notice on the responsible operator. It is an offence not to comply with the remediation notice.
Exemptions and Limitations
Liability will only apply to environmental damage occurring after the 1 March 2009, notwithstanding the requirement that the Directive should have been transposed into national law by 30 April 2007.
Environmental damage will not be caught if:
- it is caused by an incident or activity which finished before 1 March 2009;
- it occurs after the 28 February 2009 but is caused by an incident, event or emission that took place before the 1 March 2009; or
- it is caused by an incident that occurs after the 28 February 2009, if that incident derives from an activity that took place and finished before that date.
Activities where no causal link can be established between the damage caused and the relevant operator will not fall within the Regulations. Environmental damage caused by emissions or events, or an incident emanating from an event or incident that took place 30 years or more before the damage takes place will also be excluded. There are a number of other exemptions where environmental damage is caused by an act of terrorism, damage from nuclear installations or arising from national defence or international security activities, as well as damage arising from an exceptional natural phenomenon. There is a proviso to the exceptional natural phenomenon exemption in that the responsible operator must take all reasonable precautions to protect against such environmental damage. The Guidance provides that an exceptional natural phenomenon is something that is unforeseeable or unlikely to occur several times over a few years. This Guidance suggests that exceptional disasters like the 1987 hurricane or exceptional flooding would be excluded but it would not cover regular seasonal flooding.
The English Government has not “gold plated” the transposition of the ELD. It has on the whole taken full advantage of the available defences and decided not to extend strict liability to non Schedule 2 activities. That said the Welsh Government seem to be taking a more prescriptive approach to environmental damage caused by GMOs and will not take advantage of the available defences where environmental damage is caused by the release of a GMO.
The Regulations contain the following defences:
- the environmental damage resulted from complying with instructions from a public authority;
- the operator was not at fault or negligent and was fully in compliance with its operating permit;
- there was no fault or negligence on the part of the operator and the activity is not considered one which would cause environmental damage by reference to the present state of scientific or technical knowledge;
- damage occurred as a result of third party intervention and occurred despite the operator taking appropriate safety measures.
The Regulations give the enforcing authority powers to remedy environmental damage and recover the cost from the responsible operator. However, costs recovery is limited to a period of 5 years from completion of the remediation works or the identification of the responsible operator, whichever is the later date.
Overlap with other Legislation
It is anticipated that there will be overlap with other legislation. Annex 4 of the Guidance helpfully sets out a schedule of where other legislation may apply, as well as guidance on how and when the enforcement authorities should apply the Regulations as against other legislation. For example, the Core Principles in the Guidance say that for land contamination the order for deciding which regime to use (assuming the relevant circumstances apply) is as follows:
- The Regulations;
- Remediation under planning conditions;
- Part II A EPA 1990 ( the contaminated land regime)
Penalties for Breach
Although this is meant to be proactive legislation aiming at remediation rather than punishment, breach of the regulations is an offence subject on summary conviction, to a fine up to the statutory maximum or imprisonment for up to three months or on indictment to a fine or imprisonment for a term not exceeding two years or both. Any offence committed by a company which is proved to have been committed with the consent or connivance or can be attributable to any neglect on the part of any director, manager, secretary or other similar member of the company or any person who is purporting to act in such capacity could also render such individual guilty of the offence, as well as the company.
Key issues for developers
Tipping off by interested parties is likely to become a tactic used by those who wish to delay or prevent development. One would have hoped that potential environmental damage would have been fully anticipated and dealt with in any environmental impact assessment as part of the planning process. Therefore, any attempt to derail the development at this stage should be given short shrift. However, it does underline the need for developers to comply very carefully with any biodiversity conditions in planning permissions and to be aware of the impact of the development particularly to habitats and species, not just on the development site but also on neighbouring land.
The Regulations may cause a Developer to incur additional costs these might include:
- Any costs incurred by an authority when consulting interested parties
- The costs involved in submitting remediation proposals which have to be based on detailed criteria set out in the Regulations.
Tactical considerations as to submitting the remediation proposals
Failure to submit the initial remediation proposals (whilst the authority is still identifying those responsible) is not an offence under the Regulations. Therefore the question has to be asked whether a developer should submit any proposals at that stage. However, this needs careful consideration as it has implications on the ability to appeal any remediation notice if one is subsequently served.
The Regulations impose a further layer of legislation aimed at protecting the environment. They have the potential to slow down the development process and contain some quite challenging technical legal requirements.