Environmental Law News Update

In this latest Environmental Law News Update, Christopher Badger considers new HSE guidance on chemicals regulation in the event of a ‘no deal’ Brexit, a reconsideration of the definition of “trade effluent” in a recent appeal case, and International Waste Shipments (Amendment) (EU Exit) Regulations 2018 recommended for consideration by Parliament.

HSE publishes guidance on chemicals regulation in the event of a ‘no deal’ Brexit

The HSE has published guidance on preparations for a ‘no deal’ Brexit.

The UK and EU negotiating teams have reached agreement on the terms of an implementation period and other separation issues including goods on the market. Subject to the ratification of the draft Withdrawal Agreement, the implementation period will start on 30 March 2019 and last until 31 December 2020.

But in the event of a ‘no deal’ Brexit, and the casting aside of the draft Withdrawal Agreement, it is the intention of the European Union (Withdrawal) Act 2018 to convert current EU chemicals regulation into domestic law. In the view of the HSE, this means that the requirements established through regulations will continue to apply in the UK after Brexit.

HSE is working with DEFRA, who are building a UK chemicals IT system to support the registration of chemicals placed on the UK market. This is intended to “guarantee continuity”, whatever the outcome of negotiations.

The key points are:

• In order to continue exporting substances or mixtures to the EU/EEA market, UK based entities currently holding EU REACH registrations would need to transfer their registrations to an EU/EEA-based entity, or support their EU/EEA-based importers to become registrants;
• Entities currently holding EU REACH registrations would also need a valid UK REACH registration to maintain access to the UK market;
• UK downstream users (who do not hold an EU REACH) registration) currently purchasing chemicals from an EU/EEA country would need to ensure the substances they purchase are covered by a valid UK REACH registration;
• UK downstream users using a substance subject to an EU REACH authorisation would need to provide information to the HSE to continue to benefit from the authorisation;
• UK and EU regulatory agencies would operate independently from each other. If companies are supplying and purchasing substances, mixtures or articles to and from the EU/EEA and the UK, they will need to ensure that the substances are registered with both agencies (ECHA and HSE) separately in order to maintain or gain access to both markets.

The UK REACH IT system will be launched by the point that the UK leaves the EU. There will be additional costs for UK companies, not least a duplication in fees. However, there will also be a phased approach. Companies currently holding EU REACH registrations will have 60 days to submit basic data and two years to submit the full data package to register chemicals under UK REACH. UK downstream users who don’t have EU REACH registrations have 180 days to provide the basic data and must provide the full registration data within two years.

The publication notes that access to the technical information used for ECHA registration may require renegotiating commercial contracts/letters of access originally put in place for EU REACH!

Definition of “trade effluent” reconsidered

On 13 December 2018 Boots UK Ltd lost its appeal in an attempt to claim back what it perceived as substantial overpayments to Severn Trent Water Ltd for the disposal of its trade effluent.

The trade effluent was discharged to a private sewer, but before this was done it was metered. At the time that the trade effluent reached the meter, it had mixed with surface water (essentially rainwater). Charges were levied in two ways. First, Severn Trent applied a charge to the metered volume of mixed liquid passing through the meter. Second, it levied a charge for the drainage of surface water by rateable value or area. Boots argued that it was not open for Severn Trent to charge it for the whole of the mixed liquid but only on that part which it considered to be its trade effluent.

The issues in the case were as follows:

i) Was the mixed liquid “trade effluent”, as defined by s.141(1) of the Water Industry Act 1991?
ii) If not, it is deemed to be trade effluent as a consequence of the arrangements between Boots and Severn Trent?

S.141 reads:

“trade effluent” –

(a) means any liquid, either with or without particles of matter in suspension in the liquid, which is wholly or partly produced in the course of any trade or industry carried on at trade premises; and

(b) in relation to any trade premises, means any such liquid which is so produced in the course of any trade or industry carried on at those premises,

but does not include domestic sewerage”

Boots argued that it was entitled to discharge surface water into the public sewer under s.106 of the Water Industry Act 1991, which provides an owner or occupier of premises the right to connect his drains or sewers to the public sewers. Consequently, s.141 should not be construed so as to remove that right. The purpose of the regime for the discharge of trade effluent was to create a “carve out” from what had been the prohibition on the discharge of trade effluent now contained in s.106. It was not intended to remove the pre-existing right to discharge surface water. Further, trade effluent could only be that “directly produced” in the course of any trade or industry.

In ruling against Boots, Lord Justice Lewison held that the argument was contrary to authority. The words “wholly or in part” relate to the composition or constitution of the trade effluent, which may be only partly composed of the product of the trade or business (see Yorkshire Dyeing and Proofing Co Ltd v Middleton BC [1953] 1 WLR 393). In this case, all of the mixed liquid was produced at Boots’ factory.

He also held that Boots’ construction of the definition “pays scant regard to the laws of physics”. Once two liquids mix, they cannot be separated. “Once you have added milk to your coffee or tonic to your gin, even though you can identify the sources from which the components of the mixed liquid originate, you have created a new and different liquid.”

Weight was also given to the fact that Boots had chosen to construct its facility in such a way as to allow the mixing to happen. It was in control of the arrangement of its own internal infrastructure. This was persuasive, even though Boots adduced evidence that it would now be impracticable or prohibitively expensive to retrofit the drainage.

As Boots failed on the first issue, the second issue did not arise.

One interesting potential consequence of the court’s acceptance that adventitious admixture does not prevent the product being ‘trade effluent’ is that it must be arguable that nor does deliberate admixture. If so, then a business discharging trade effluent would be entitled, provided that it could do so within its permitted volumetric limits and in the absence of any express prohibition, to dilute its trade effluent as necessary to achieve compliance with concentration limits which would otherwise be exceeded by the concentrated effluent – a practice not considered acceptable by at least some sewerage undertakers.

The judgment can be found here

International Waste Shipments (Amendment) (EU Exit) Regulations 2018 recommended for consideration by Parliament.

Despite the arguably dull headline above, this is a concrete example of the potential impact on Brexit on the waste industry. The House of Lords has recommended that a draft statutory instrument relating to international waste shipments should be considered by Parliament due to the risk that the UK will cease to be able to export waste to EU Member States following Brexit.

Shipments of notified waste (comprising hazardous wastes, mixed municipal wastes and wastes which are destined for disposal) between the UK and other EU Member States (of which England exported just under four million tonnes to the EU in 2017) are subject to a procedure of prior notification and consent according to rules set out in EU Regulation 1013/2006 on shipments of waste.

It had been proposed that the draft Regulations could be passed without debate – indeed, the House of Commons had already agreed to such a course of action. However, the House of Lords sifting committee has identified that the European Commission has indicated in a notice to stakeholders published on 8 November 2018 that those notifications which currently apply past 29 March 2019 will no longer be valid on exit day. DEFRA has explained that the UK’s competent authorities (including the Environment Agency) have written to their counterparts in other Member States to agree that the process of waste shipments can continue as normal after Brexit. Unfortunately, of the 533 letters written to date, only 61 responses have been received agreeing to roll-over existing notifications.

If an EU competent authority does not agree to roll-over an existing notification, new consents will need to be approved for those shipments to continue, which may impact on the UK’s ability to export notifiable waste.

The UK lacks the capacity to cope with the amount of waste that it generates. If it cannot export notifiable waste, even for a short period, the effects could be significant. This also provides an opportunity for EU Member States to reassess if they want to receive the UK’s waste. Capacity and issues over contamination are not problems isolated to the UK.

The report of the House of Lords Secondary Legislation Scrutiny Committee (Sub-Committee B) can be found here

We published November’s Environmental Law Podcast recently – a monthly round-up of the latest developments in environmental law.

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