Environmental Law News Update

March 27, 2017

In this latest Environmental Law News Update, Christopher Badger and William Upton provide comment on the £20 million fine imposed on Thames Water for environmental offences, the latest EU warnings on the risks to the environment of future regulatory divergence, and recent case law illustrating the difficulties of assessing impacts on sensitive nature conservation areas from new housing developments.


Thames Water fined £20 million for environmental offences

Thames Water Utilities Ltd were fined £20,361,140.06 in fines and costs for a series of significant pollution incidents on the River Thames or its tributaries. 6 separate cases were brought together for one hearing at Aylesbury Crown Court the biggest freshwater pollution case in the Environment Agency’s 20-year history.

5 sewage treatment works (2 serving populations of 100,000+ and 160,000 respectively) and the largest sewage pumping station outside London were the subjects of the prosecutions. All were during the period July 2012 to early 2014, the same period of offending as 6 previous convictions of TWUL for pollution incidents.

The EA put forward evidence of a catalogue of failures by TW’s management, involving repeated discharges of untreated or poorly treated sewage into rivers, disregarding risks identified by their own staff and failing to react adequately to thousands of high priority alarms.

For weeks, untreated sewage, amounting to millions of litres per day, was diverted to rivers and away from the treatment process, despite the fact that incoming flow was well within the designated capacity of the treatment works.

HHJ Sheridan condemned the “disgraceful conduct” of TW, which he said was “entirely foreseeable and preventable”. TW demonstrated “scant regard for the law, with dreadful results for people who live in the area”.

The Court found that culpability for two of the offences at pumping stations in Aylesbury and Little Marlow was reckless and the environmental harm was category 2, attracting individual fines of £9 million and £8 million respectively. Remaining offences were deemed to be negligent culpability, category 3 harm. Critical to the sentence, the Court found that management failures had been “systemic”.

For the year ending 31 March 2016, Thames Water Utilities Ltd had a gross turnover of just over £2 billion and operating profit of £742 million. The court emphasised that the message must be brought home to management and the shareholders, and asked that the fines be born by the company, not the public. In total the fine amounted to two weeks profit.

The highest fine for an environmental offence prior to this sentence had been £2 million, imposed on Southern Water on 19 December 2016 for a negligent category 1 offence.


Michael Barnier warns the UK against “regulatory dumping”

At a plenary session of the European Committee of the Regions, Michael Barnier identified that due to the fact that the UK currently complies with all EU standards and rules, the risk for the EU is not an issue of regulatory convergence but whether regulatory divergence could harm the internal market. To guard against this, Barnier’s stance was to take a position whereby regulatory divergence did not turn into “regulatory dumping”, what he viewed as unfair competition from a country with lower environmental and social standards.

One approach, as yet unmentioned by any party but conceivable to the author, could be to attempt to attempt to bind the UK to EU environmental standards as a precondition of market access. In this way environmental standards could retain both national and supra-national effect, by attempting to tie the hands of the UK on future trade negotiations with other states through an overarching requirement of environmental parity with the EU at the risk of otherwise facing sanctions and/or restriction of trade with the EU. It is not uncommon in trade agreements over the last 25 years for environmental standards to feature as stand alone conditions.

The UK Government has stated that there is a strong shared interest in maintaining cross-border trade and that, as a consequence, “a degree of alignment between the UK and the EU on environmental standards will continue to be key to maintaining access to each other’s markets” (note the word “degree”!). What will prove interesting is whether the EU attempts to negotiate and maintain some form of supra-national control over the UK’s environmental standards, even after the UK has left the EU.


Irrational expert advice

The difficulties of assessing impacts on sensitive nature conservation areas from new housing has been well illustrated by the case of Wealden District Council v. Secretary of State for Communities and Local Government, Lewes District Council and South Downs National Park Authority [2017] EWHC 351 (Admin), handed down by Mr Justice Jay on 20 March 2017. It is also a striking example of how irrational expert advice will infect and vitiate the whole decision, despite the Court’s normal reluctance to interfere in the merits.

The Ashford Forest is a Special Area of Conservation (“SAC”) that demands a high level of protection under the Habitats Regulations. The SAC’s extensive areas of lowland heath are vulnerable to nitrogen dioxide pollution from passing traffic. Wealden DC predicted that the likely effects from its own development plan for 9,440 houses was just within the threshold where it could conclude that the environmental effects from the increase in traffic could be regarded as neutral and “scoped” out of any further assessment. The threshold is one used by Highways England in traffic assessment (in the nationally-used DMRB document).

The problem of going above the threshold was that it would trigger the need for an “appropriate assessment” of the implications for the site in view of that site’s conservation objectives. There would be a risk of significant adverse effects to a protected site, and the competent authority could not then approve the plan unless it was certain that the plan will not adversely affect the integrity of the site concerned. There should be “no reasonable scientific doubt” remaining as to the absence of such effects.

So, when the next door planning authorities (Lewes DC and the South Downs National Park Authority) jointly approved their own plan for another 6,900 houses, some of which would take the likely traffic levels above the threshold, when considered alongside WDC’s own housing, you would have thought that this would trigger the need for an appropriate assessment.

However, the advice from the national body responsible for nature conservation, Natural England, was that this level of new development would not be likely to have a significant impact on the SAC. They assumed that the in-combination effects were catered for within the DMRB threshold already.

So, when the Secretary of State’s Inspector and the 2 local authorities took Natural England’s advice, they thought that they would be OK.

But the Court agreed with WDC. The judge accepted that it looked like an in-combination assessment had been made, but he was scathing about Natural England’s advice. It was “plainly erroneous” and “cried out for further explanation”. It could not be supported “on logical and empirical grounds.” What had occurred was irrational. The Wednesbury error in the underlying advice created, without more, an equivalent Wednesbury error in the evaluative assessments carried out by the authorities.

So, although LDC and SDNPA had accepted Natural England’s advice in good faith, the Court had to censure the decisions of the ‘competent authorities’ – in this case, the Secretary of State, as well as the two local authorities.

WDC were a little late in making their challenge, so the Court quashed what it could (all the housing policies in the joint plan that covered the NPA area), and declared that rest of the housing policies in the plan (covering Lewes) were probably in the wrong as well.

The judge also asked that court’s judgment be almost hand-delivered to Highways England. The DRMB should be re-examined, and clarified, to reflect his concerns.

This is a complex outcome for a simple point: in-combination effects cannot be ignored or under-played in appropriate assessments on habitats.

And then there is the general point of importance: if expert advice looks plainly wrong and cries out for further explanation, then you must ask for it.


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