Approval of an Environmental Impact Assessment Report and the issuance of an Environmental Permit, both by the Director of Environmental Protection

Legal principles which apply when challenges are made to the approval of an Environmental Impact Assessment (EIA) Report and the issuance of an Environmental Permit (EP), both by the Director of Environmental Protection (Director).

The Court of First Instance considered the legal principles which apply in the above circumstance in Leung Hon Wai v. Director of Environmental Protection and Town Planning Board (HCAL 49/2012), which concerns a judicial review relating to a "designated project" to construct and operate a muncipal wastes incinerator (Project).

Under the EIA Ordinance (Cap. 499)(EIAO), the project proponent (Proponent) of a designated project shall apply to the Director for an EIA study brief (Brief). Upon receipt of such an application, the Director shall issue a Brief. Thereafter, the Proponent shall prepare an EIA report in accordance with the requirements of the Brief issued, and the Technical Memorandum (TM) applicable to the assessment. The Director shall then decide whether or not the EIA report meets the requirements of the Brief and the TM, and approve, approve with conditions, or reject the EIA report. Upon approval of the EIA report, the Proponent shall apply to the Director for an EP. Otherwise, the Proponent cannot construct and operate the designated project2.

The facts of the above case, in brief, are that the Environmetal Protection Department (EPD) is the Project’s Proponent. The head of the EPD is the Director. In March 2008, the EPD submitted an application for a Brief to the Director. The Director issued the Brief in May 2008. An EIA report for the Project was first submitted in January 2011 for approval. After a few rounds of submissions, the Director approved a revised EIA report under section 8(3) of the EIAO in January 2012 (EIA Report). Subsequently, the Director granted the EP. The EP was issued to the Director (being the head of EPD, the Proponent) and signed by a Senior Environmental Protection Officer for the Director3.  

In the judicial review, the Applicant challenged, amongst other things, the Director’s respective decisions to approve the EIA Report (1st Decision) and to grant the EP (2nd Decision). The Applicant sought to quash the 1st and 2nd Decisions on various judicial review grounds, which include the following:  

• The 1st and 2nd Decisions were unlawfully made, as the EIA Report did not comply with various provisions or requirements set out in the TM and the Brief, and the 1st and 2nd Decisions were in any event Wednesbury unreasonable.  
• There was a breach of natural justice where the Director acted both as the Proponent for and the grantor of the approval of the EIA Report and the EP. In other words, the Director was the judge in the Director’s own cause. The 1st and 2nd Decisions are in any event tainted by apparent bias given that the Director was both the applicant and the judge in the EIA process. In this context, the Applicant also raised the argument of “illegality”, namely, that on a proper construction, the “applicant” under the EIAO cannot include the Director for various reasons.

THE 1ST AND 2ND DECISIONS WERE UNLAWFULLY MADE AND WEDNESBURY UNREASONABLE?  

In considering whether or not the EIA Report complied with the TM and the Brief, the Court reiterated the following general legal principles on the question of the construction of the TM and the Brief4:

• Whether or not the EIA report meets the requirements of the TM and the Brief is a question of law for the court to decide. The court should ascertain the meaning of the TM and the Brief, and the procedure they prescribe in order to determine the scope of the Director’s power to approve the EIA report: Shiu Wing Steel Ltd v. Director of Environmental Protection5.  
• The above question is to be determined objectively. The TM and the Brief are to be construed not as legislative instruments, but as they would be understood by an expert risk assessor and should be read in a “down-to-earth way”. Technical evidence may be needed to show that an EIA report meets or does not meet the requirements so determined.  
• The TM is a document which applies generally to all designated projects, while a Brief is projectspecific. The Brief sets the agenda for the rest of the process. (The Court added that as a matter of construction, the general requirements of the relevant provisions in the TM should be informed of and prescribed by what has been set out at corresponding provisions of the Brief (if any), which is made specifically for the project)6.  
• Although it is a matter of construction for the court to decide what is required by the TM and the Brief, it is often a question of professional judgment what information is required to be contained in the EIA report to enable the Director to perform the Director’s duties. Unless the judgment is Wednesbury unreasonable, the court will not interfere.  

On the facts of the case7, the Court found that the EIA Report complied with the TM and the Brief. Accordingly, the 1st and 2nd Decisions were not unlawful and were not Wednesbury unreasonable. The Court made clear that the questions of what are environmentally acceptable standards in Hong Kong are questions of policy and are thus outside the purview of the Court8.  

BREACH OF NATURAL JUSTICE

In considering whether or not natural justice has been breached in circumstances where the Director acted both as the applicant and the grantor of the approval of the EIA Report, the Court stated that this relates to the question whether as a matter of fact, the Director did act as a judge in the Director’s own cause in the EIA process9.  

The Court found that on the facts (which were not disputed by the Applicant)10 that there was factual segregation of personnel and duties within the EPD in (i) the infrastructure planning aspect including the preparation of the EIA Report, and (ii) the EIA process relating to the Project. Accordingly, the Court was satisfied that the Director has played no actual or active role in either the planning of the MWI (including the preparation of the EIA Report) or the approval of the EIA Report and the decision to issue the EP. Since the Director’s name was used only nominally as the Proponent on the one hand, and the approval of the EIA Report and issue of the EP on the other hand as the Director is the head of the EPD, the Court concluded that the Director was not being the judge in the Director’s own cause. The allegation of breach of natural justice was simply not made out on the evidence11. 

APPARENT BIAS

On the question of apparent bias, the Court stated that the following principles were relevant:  

• The question to be asked is whether all the relevant circumstances would lead a fair-minded and informed objective observer to conclude that there is a reasonable apprehension of bias. Such an observer is assumed to have access to all the facts that are capable of being known by members of the public generally, bearing in mind it is the appearance that these facts give rise to that matters, not what is in the mind of the person under scrutiny. The observer is neither complacent nor unduly sensitive or suspicious when he examines the facts and will be able to distinguish what is relevant and what is irrelevant, and decide what weight should be given to the facts that are relevant when exercising his judgment12.  
• The courts do have regard to the actual segregation of personnel and duties within the subject administrative or government department in applying the principle of apparent bias. If there is clear segregation of responsibilities and personnel in the complaint decision making process, which would be taken to be the background the observer is informed of, the court has held that there is no actual or apparent bias in the circumstances of those cases13.  

On the facts14, the Court found that that the fairminded and informed observer would not conclude that there was a reasonable apprehension of bias on the part of the decision maker.  

ILLEGALITY

The Court dismissed the Applicant’s arguments on “illegality”15 on various grounds16:  

• The EIAO does not by any express language exclude the Director as an applicant. Quite to the contrary, the plain words of the EIAO do not seek to exclude any identified person or party, not least the Director, as an applicant17. To construe otherwise would involve departing from the natural and plain meaning of the EIAO.  
• There are procedures and practices that could be adopted to ensure that there would be no breach of natural justice even if the Director is to act nominally as an applicant. Hence, the ordinary and plain construction of the EIAO of the meaning of an applicant to include the Director would not necessarily lead to breach of natural justice or absurdity.  
• The segregation of responsibilities and duties would equally eliminate the alleged absurdity of their operations.  
• However, if in fact there is a breach of natural justice in a particular case by reason of the Director being the applicant in an EIA process under the EIAO, the decision so rendered would be subject to judicial review on that basis. But that is not because of the construction of the meaning of applicant in the EIAO.