Environmental Law News Update

In this latest Environmental Law News Update, David Hercock, Natasha Hausdorff and Mark Davies consider a Court of Appeal ruling on the meaning of the term “recovery”, a report from the Climate Change Committee advocating legally binding targets on greenhouse gas emissions, and a decision from the Information Commissioner on disclosure and damage to legitimate economic interests.

Court of Appeal ruling on the meaning of the term “recovery”

Neal Soil Suppliers Limited & Others v Natural Resources Wales Ltd [2017] EWCA Crim 645 involved an appeal arising from a Crown Court ruling in the course of a preparatory hearing in relation to the meaning of the term “recovery”.

The Appellant held an environmental permit enabling it to accept and treat waste soil and aggregate so as to produce useable and saleable soil and aggregate at a site which is within the Gwent Levels, a Site of Special Scientific Interest. The permit authorised the Appellant to store waste soil on the site for a maximum of three years “prior to recovery”. The principal issue essentially concerned the meaning of the term “recovery” in the Waste Framework Directive, and in particular the meaning of the phrase “prior to recovery” in the environmental permit.

The Appellant argued that once material had been subjected to a recovery operation (such as sorting the waste into its component parts) then the recovery process must be taken to have been commenced, and it could no longer be said that the waste was being stored “prior to recovery”. Natural Resources Wales (“NRW”) contended that it is the state of affairs which results from the outcome of recovery operations which is described by the term “recovery”. On that basis, it submitted that the words “prior to recovery” in the permit were to be read as referring to the whole period prior to the achievement of the result whereby the material is recovered.

The Court of Appeal, whilst not committing themselves definitively to the Appellant’s proposition, gave the Appellant’s approach a green light for the purposes of the case. The Court of Appeal observed that the definition of “recovery” in the Directive does not proceed by reference to a result. On the contrary it describes “recovery” as meaning “any operation” which operation is then defined by reference to the result achieved.

On a slightly more straightforward point, the Court also confirmed that terminology in an environmental permit must be construed consistently with the Directive, and that an enforcement notice issued under the environmental permitting regime must itself be interpreted in conformity with the terms of the underlying environmental permit.

In the light of this ruling, NRW conceded that it could not, for the purposes of the prosecution, establish (as they had to do) that the waste in question had been stored for a period in excess of three years prior to recovery. The prosecution on that charge therefore could not proceed.

Stephen Hockman QC and David Hercock appeared for the successful Appellant, instructed by Dolmans of Cardiff.

Committee on Climate Change urges Government to set new policies on reducing greenhouse gas emissions

The Committee on Climate Change published on 28 June 2018 its 2018 Progress Report to Parliament on reducing carbon emissions, marking ten years since the Climate Change Act came into force. The report emphasises that failure to act now would entail unnecessary expense for a future shift to a low-carbon economy.

Overall, UK emissions are down 43% compared to the 1990 baseline while the economy has grown significantly over the same period and in the last ten years there has been a rapid reduction in emissions in the electricity sector in the UK. Nevertheless, the report highlights a “marked failure to decarbonise other sectors, including transport, agriculture and buildings”. As a result, the Committee warns that the UK is not on course to meet the fourth (2023-2027) or fifth (2028-2032) carbon budgets.

In this vein the report sets out four key messages to Government:

1- ‘The simple, low-cost options’. The report notes that these options to reduce emissions are not being supported by Government and this penalises the consumer. In particular withdrawal of incentives has cut home insulation installations to 5% of their 2012 level and there is no route to market for cheap onshore wind.

2- ‘Commit to effective regulation and strict enforcement’. The committee notes that more robust standards operating in the long term for construction and vehicle emissions can positively effect consumer demand, innovation, and cost reduction. A long-term strategy for regulation also reduces the overall economic costs of compliance and value for the consumer.

3- ‘End the chopping and changing of policy’. Programs such as Zero Carbon Homes and the Carbon Capture and Storage (CCS) Commercialisation Programme have been cancelled at short notice, generating uncertainty. The report emphasises that a consistent policy environment keeps investor risk low, reduces the cost of capital, provides clear signals to the consumer and gives businesses the confidence to build UK-based supply chains.

4- ‘Act now to keep long-term options open’. The report notes the need for a new national infrastructure. The deeper emissions reductions implied by the Paris Agreement make these developments even more important. The key message is that technologies should be pulled through now in anticipation of the 2050 systems for carbon capture, zero-carbon transport, hydrogen or electrification of heat, to bring down costs and to support the growth of the low-carbon goods and services sector

The Committee Chairman, Lord Deben, said of the report: “We welcomed the Government’s commitment in the Clean Growth Strategy to put green growth at the heart of its economic policy … We now have to ensure that the Government learns from this experience and presents a programme to tackle emissions right across the economy … This action is now urgent in order to meet the UK’s legally-binding climate change targets, and to prepare to fulfil the obligations of the Paris Agreement.”

Information Commissioner decision on disclosure and damage to legitimate economic interests

On 7 June 2018 the Information Commissioner’s Office (“ICO”) handed down its decision in a complaint relating to alleged failings to disclose by Gloucestershire County Council (“the Council”) under the Environmental Information Regulations 2004 (“the EIR Regulations”).

The complainant had requested information relating to Council’s agreement with Urbaser Balfour Beaty (“UBB”) to develop and run an Energy from Waste (“EfW”) plant in the county. The Council complied with most of the disclosure request but redacted elements of an Ernst & Young LLP report dealing with “value for money and affordability analysis,” citing Regulation 12(5)(e) – confidentiality of commercial or industrial information where such confidentiality is provided by law to protect a legitimate economic interest – as the reason.

The Information Tribunal had already ruled on the disclosure of an earlier version of the Ernst & Young report and had directed that the predecessor schedule in that report be disclosed.

In the course of the decision the ICO has provided a useful exposition of the principles to be considered in determining whether Regulation 12(5)(e) applies:

• Is the information commercial or industrial in nature?
• Is the information subject to confidentiality provided by law?
• Is that confidentiality provided to protect a legitimate economic interest?
• Would the confidentiality be adversely affected by disclosure?

The ICO found the first three elements proved (indeed noting that disclosure would ‘consequently harm the legitimate economic interest of the Council and UBB’) and so went on to consider whether in all the circumstances of the case the public interest in upholding the exception outweighed the public interest in disclosure of the requested information.

Having taken into account the presumption in favour of disclosure required by Regulation 12(2) the ICO found that:

• Disclosure of the redacted information would add to the understanding of the report, which was itself to assess whether the Council were obtaining value for money.
• It would be extremely difficult for the public to understand the financial decision in choosing EfW without the specific figures such as estimates used for the sale of the electricity generated. Here the Commissioner noted that EfW plants are a controversial solution to Gloucestershire’s waste problems.
• Some of the redacted information, such as interest rates, debt rates and operating costs of UBB did not relate to the value for money question but rather solely to UBB’s commercial sensitivities.

On the basis of those findings the Commissioner ordered the disclosure of the material sought aside from that identified in the final bullet point.

The ruling is a useful reminder of the principles to be applied when seeking to rely upon the commercial confidentiality exception and would support the conclusion that the public interest in assessing the decisions of public bodies will often outweigh any commercial sensitivities at play.

The full decision may be read here.

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