Environmental Permitting of Waste Water Treatment Plants
The courts in the recent United Utilities v Environment Agency litigation have decided a number of important issues in relation to the relative fields of operation of two schemes of EU environmental regulation :
- the system of Integrated Pollution Prevention and Control (IPPC), and
- the obligations imposed by the Urban Waste Water Treatment Directive (UWWTD).
They have also shed light on important questions about the need for a Pollution Prevention and Control permit, where an operator carries on activities which are not in themselves subject to IPPC but in circumstances where those activities are 'associated with' and have a 'technical connection' with the activities of an adjacent operator whose activities clearly fall within IPPC.
Some changes to the implementing national Regulations may be expected following the conclusion of this litigation. Companies holding permits for IPPC activities should consider how they may potentially be affected by such changes.
The claimant water and sewerage company challenged the view of the Environment Agency that permits under the Pollution Prevention and Control (England and Wales) Regulations 2000 (implementing the Integrated Pollution Prevention and Control Directive) were needed for various activities at its waste water treatment plants.
The claimant argued instead that the activities at those sites should be governed by the system of water discharge consents (under the Water Resources Act 1991) and the obligations contained within the Urban Waste Water Treatment (England and Wales) Regulations 1994 (implementing the Urban Waste Water Treatment Directive 1991).
As the case moved through the various courts, culminating in judgment in the House of Lords on October 17, 2007, the points in issue became progressively narrower.
This Briefing draws attention not just to the single issue which remained before the House of Lords, but also summarises findings on other issues at first instance and in the Court of Appeal.
Argument in the case focused on the characteristics of a small number of representative waste water treatment plants operated by United Utilities.
Some of these sites raised issues of the inter-relationship between the above-mentioned environmental regimes because at those sites there was undertaken various kinds of on-site residual sewage sludge treatment.
Other sites were contentious for a quite different reason. This was because they received partially treated industrial effluent by pipeline from IPPC-regulated plants (a milk processing plant and a brewery) some 700/800 metres away. The issue here was whether the further treatment of that effluent at the waste water treatment plant should be regarded as an activity so 'associated with' and 'connected to' that of the main IPPC activity of those industrial concerns as to require a separate PPC permit in its own right.
The Legal Issues
Four principal questions were considered by the various judges:
- Whether it was the scheme of the EU Directives that there should be a clear division between (i) activities regulated by the UWWTD (even though some aspects of those activities may involve things within the apparent ambit of the IPPC Directive), and (ii) activities to be regulated by IPPC?
- Whether sewage sludge is 'waste'?
- Whether the partial treatment of sewage sludge as undertaken at the waste water treatment plants falls within the list of activities regulated under IPPC?
- Whether the final treatment of effluent from the nearby industrial concerns was (i) a 'directly associated activity' to that of the industrial concerns, with (ii) a 'technical connection', and – possibly also - (iii) undertaken on the 'same site'?
Issue One: Whether it was the scheme of the EU Directives that there should be a clear division between (i) activities regulated by the UWWTD (even though some aspects of those activities may involve things within the apparent ambit of the IPPC Directive), and (ii) activities to be regulated by IPPC?
On this matter the trial judge, Nelson J, concluded that the proper interpretation of the IPPC Directive was that its provisions did have potential application to waste water treatment activities despite the fact that the UWWTD also applies. No appeal was taken on this matter.
Issue Two: Whether sewage sludge is 'waste'?
Nelson J concluded that it was clear that sewage sludge was, on the face of it, 'waste' within the meaning of the Waste Framework Directive (WFD). It was material 'held' by the claimant, whose intention was to 'discard' it. Argument centred on Art 2(b)(iv) of the WFD. This provides that 'waste waters' should not be regarded as 'waste' in circumstances where they are dealt with by 'other legislation'. However, 'waste in liquid form' should be regarded as 'waste'
Nelson J found that residual sewage sludge should be regarded as something different from the 'waste water' from which it has been separated. It was proper, however, to regard it as 'waste in liquid form'.
On the basis that sewage sludge waste was not to be regarded as 'waste water' it was not strictly necessary for any conclusion to be reached as to whether waste waters were 'covered by other legislation' so as not to be 'waste' within the WFD. Nevertheless, Nelson J reviewed ECJ case-law and concluded that for this purpose the 'other legislation' must afford equivalent protection to that afforded by a combination of the WFD and the IPPC Directive. Given that the 'other legislation' (powers of enforcement under the Water Industry Act 1991 of obligations under the UWWTD) did not extend – as does IPPC - to matters such as odour and noise, it was not the case that this 'other legislation' afforded 'equivalent protection'.
As with Issue One, the findings of Nelson J on this point was not appealed.
Issue Three: Whether the partial treatment of sewage sludge, as undertaken at the waste water treatment plants, falls within the list of activities regulated under IPPC?
Under Issue One, above, the decision was that IPPC was potentially applicable to United Utilities' activities in relation to the residual sludge. Whether or not IPPC was actually applicable would depend on whether or not what was being done by United Utilities fell within the list of activities falling within the IPPC Directive. It was agreed between the parties that what was being done amounted to either 'biological treatment' or 'physico-chemical treatment'. The key issue, in determining whether IPPC was applicable, was whether such treatment resulted 'in final compounds or mixtures' which were 'discarded' by means of operations such as 'incineration', 'permanent storage', 'blending or mixing' , 'repackaging' or 'storage pending further operations'.
On this point the claimants argued that at each of their waste water treatment plants the sewage sludge was only partially treated, being then moved elsewhere for further and final treatment. On that basis they argued that the sludge as treated at their waste water treatment plants should not be regarded at that point as having been made into a 'final compound' as required for IPPC to be applicable.
Both Nelson J and the Court of Appeal took the opposite view, and this point formed the sole issue taken before the House of Lords, which also ruled in favour of the Environment Agency.
In the words of Lord Hoffmann:
" ... the short point in this appeal is whether the production and discarding of the end product must take place within the same installation as the biological or physico-chemical treatment. The appellants say that treatment of non-hazardous waste at an installation which produces an intermediate product which is then transferred to another plant for final treatment and disposal does not fall within the definition. I do not agree. The purpose of the legislation was, among other things, to protect the environment against potential damage from the operations involved in the disposal of non-hazardous waste, including biological or physico-chemical treatment. If one asks why, in that case, the regulations did not simply designate "biological or physico-chemical treatment of non-hazardous waste" as an activity requiring a permit, the answer is that it was necessary to distinguish between such treatment for the purposes of disposal and the same treatment for the purposes of recovery. Hence the qualification introduced by the words "which results in final compounds or mixtures which are discarded…". The exclusion of recovery processes from the permit regime was no doubt part of a policy of encouraging recovery. But exclusion of treatment simply on the ground that the final product for discarding was produced elsewhere could have no rational explanation. In my opinion ... the [biological or physico-chemical'] treatment must form part of a process which results in a discarded rather than a recovered product but [the Directive does] not stipulate where that should take place."
Issue 4: Whether the final treatment of effluent from the nearby industrial concerns was (i) a 'directly associated activity' to that of the industrial concerns, with (ii) a 'technical connection', and – possibly also - (iii) undertaken on the 'same site'?
This matter was considered by both Nelson J and the Court of Appeal. Both expressed great difficulty in interpreting the governing provisions of the Directive.
At first instance, Nelson J took the view that:
"even if the treatment of the effluent amounts to a directly associated activity which has a technical connection with the activity carried on in the stationary technical unit (of which I am doubtful) I am satisfied that the requirements of 'same site'[in the implementing regulations] are not met here. The words import ... an element of proximity beyond the requirements of technical connection and directly associated activity."
In Nelson J's opinion two activities could be on the 'same site' even though separated by, for example, a road or a river. However, in the present case there were distances of 700 and 800 metres between the waste water treatment plant and each of the two industrial concerns. This was regarded by Nelson J as too far a distance to allow a conclusion that the 'same site' test was satisfied.
The Court of Appeal dismissed the Environment Agency's appeal on this point.
In the leading judgment Laws LJ agreed with the trial judge that the waste water treatment plant and the industrial sites could not properly be regarded as being on the 'same site', even though connected by a pipeline.
However, it is significant that Law LJ took the view that the national regulations which purported to implement the IPPC Directive appear to have failed properly to achieve the required result.
In Law LJ's view there is no 'same site' requirement within the IPPC Directive. As such the domestic Regulation may place outside the ambit of IPPC something which should be within its scope according to the Directive.
However, the Environment Agency, as an arm or emanation of the State, should not be permitted to argue in court that the provisions of the Directive should over-ride the provisions of the implementing Regulations. If those Regulations took something outside IPPC which under the Directive should have come within IPPC the court should apply the Regulations even though this might mean that the United Kingdom was failing to apply IPPC as broadly as the Directive required.
This aspect of the case was – perhaps unfortunately - not appealed to the House of Lords.
Although the principal issues under consideration will be of most concern to the sewerage companies, the comments of the judges about the difficulty in interpreting and applying the concepts of 'directly associated activities' and 'technical connection', and the view of Law LJ that the 'same site' requirement in the domestic implementing Regulations may under-implement the IPPC Directive, will give rise to concerns rather more widely.
The case suggests that DEFRA may have implemented the Directive more narrowly than the Directive requires. No doubt this is a matter under review by DEFRA and the Environment Agency, and following on from Law LJ's comments some indication may be anticipated from Government as regards amendment of the PPC Regulations.
Companies which may have benefited hitherto from the 'same site' test may find their position in future rather different.