Environmental Law News Update
January 21, 2019
In this latest Environmental Law News Update, Charles Morgan, William Upton and Mark Davies consider a case where a property owner was required to remedy a connection to the sewerage system outside of the property, how much has to be reconsidered when an Environmental Permit is varied and a new EU report on climate-related disclosures.
Owner gets wires crossed over sewerage responsibilities
In Mustafa v Enfield LBC [2018] EWHC 3726 (Admin) Lewis J. held that a local authority was entitled to serve a notice under s.59 of the Building Act 1984 requiring a property owner to remedy at his own expense a wrong connection to the public sewerage system outside the property.
The property comprised three flats in a converted house sharing a vertical soil pipe which left the curtilage of the property and connected to the public sewers under the street. Unfortunately it had been connected, in unknown circumstances, to the surface water sewer not the foul sewer. The owner considered the correction of that to be the responsibility of the local authority or sewerage undertaker. The Magistrates Court nevertheless ordered the owner to effect the remedial work, a result upheld by the High Court.
The principal basis of the decision was that s.59 applied where “satisfactory provision has not been, and ought to be, made for drainage” of a building. This wording was not confined to the state of the building itself or to matters arising within its curtilage and was wide enough to include the private pipe connecting the soil pipe to the public sewer in the street outside and the manner of its connection. Lewis J. considered that this reasoning was also consonant with the provisions of the Water Industry Act 1991, s.106 of which entitles property owners to communicate with the public sewer.
The court left open the interesting question of whether in similar circumstances a sewerage undertaker could be joined in an appeal against a s.59 notice with a view to requiring it to bear some or all of the cost. Whilst Thames Water had intervened on the appeal, it had not formally been a party below and was not directly interested in its outcome.
Enfield LBC was represented by Six Pump Court’s Nicholas Ostrowski. The full judgment is available on Lawtel and Westlaw.
How much has to be reconsidered when an Environmental Permit is varied?
The requirement to keep environmental permits up to date so that they keep using the best available techniques (“BAT”) is a difficult one to apply. It is arguable that the Environment Agency’s own duty to stay informed of developments means that it must take every chance to look at what is BAT whenever it comes to review an existing environmental permit. The issue has arisen in connection with the continuing controversies over Cuadrilla’s shale gas exploration site at Preston New Road, Lancashire.
The recent case of R (oao Friends of the Earth Limited) v Environment Agency and Cuadrilla Bowland Limited [2019] EWHC 25 (Admin), 11 January 2019, has confirmed that the need to consider BAT is indeed an arguable issue, but not necessarily a winning argument. Supperstone J granted permission to proceed but ultimately rejected the challenge to the Agency’s decision to vary Cuadrilla’s Environmental Permit. The variation amended the injection limit of fracturing fluid per day to a limit that applied per hydraulic fracturing stage. The Agency did not review what was BAT, and the complaint was they had failed to consider if an emerging technology would constitute BAT as part of the permitted activities. Friends of the Earth had submitted expert evidence as part of the public consultation on the new variation decision, to the effect that “electrocoagulation” had the potential to reduce the environmental impacts of the scheme by increasing the re-use of the fluid.
The judge was persuaded by the submissions that, in the interests of legal certainty, the process by which the Waste Management Plan (“WMP”) is updated, and any changes in BAT are taken into account, occurs in a controlled and predictable fashion. The relevant Directive only expressly provides for the WMP to be reviewed “every five years” or if there are “substantial changes to the operation of the waste facility or to the waste deposited”. The Agency was not required to reconsider or review the WMP in this case, as no substantial changes were being made to the operation of the permitted waste facility. FoE might disagree about whether the Variation Decision would have a substantive effect, but that was a matter of judgment for the expert regulator in this complex technical field which could only be reviewed on Wednesbury grounds. The judge also concluded that it was highly likely that the outcome would not have been substantially different if the conduct complained of had not occurred, as the Agency did not consider electrocoagulation to be a suitable treatment method at this site.
The upshot is that the case confirms that the Agency is not required to undertake a full assessment of BAT for each aspect of a regulated facility’s operation on each and every occasion that an operator seeks a variation, however minor, of an existing permit – even if arguments about where the line should be drawn are likely to continue.
New Year, new Report on Climate-related Disclosures
On 10 January the European Commission published to its website a report by the Technical Expert Group on Sustainable Finance; the ‘Report on Climate-related Disclosures’. The Report is the latest in a growing body of material examining how finance could be connected with sustainability and was produced in pursuance of Action 9.2 of the Commission’s ‘Action Plan on Financing Sustainable Growth’, published in March 2018.
The commitment of Action 9.2 was to revise the non-binding guidelines of the Non-Financial Reporting Directive (“NFRD”) that govern the disclosure of environmental, social and governance-related information. More specifically updating the non-binding guidelines to, “…provide further guidance on companies on how to disclose climate-related information, in line with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) and the climate-related metrics developed under the new classification system.”
The Commission set up the Technical Expert Group to assist in the implementation of the Action Plan, tasking it to develop four key areas:
- A unified classification system for sustainable economic activities;
- An EU green bond standard;
- Benchmarks for low-carbon investment strategies; and
- Guidance to improve corporate disclosure of climate-related information.
It may not seem it, but this is actually quite exciting (a relative term, please bear in mind). There has been talk, and work done, for several years now to connect finance with sustainability, but it is only now that the Commission truly seems to be moving towards developing a proper system of metrics that will allow businesses (the companies in the scope of the NFRD are large Public Interest Entities, i.e., listed companies, banks, insurance undertakings and other, Member State identified, companies with more than 500 employees) to start ‘greening their finance’.
The purpose of the guidance in the Report is to assist companies develop ‘high quality’ climate-related disclosures that comply with the NFRD, which is the legal starting point, and which provide a foundation for addressing the recommendations of the TCFD. Those disclosures are broken down into three types
- Type 1 – those that companies should disclose (high expectation that all reporting companies disclose them, e.g. governance processes addressing climate-related risk and opportunities or Scope 1 and Scope 2 Greenhouse Gas emissions)
- Type 2 – those that companies should consider disclosing (expected of companies with significant exposure to climate-related risks and opportunities, e.g. the roles of board and management level positions in charge of climate-related topics)
- Type 3 – those that companies may consider disclosing (additional or innovative disclosures that provide more enhanced information, e.g. explanations as to how strategy has been adapted to increase resilience under different climate-related scenarios).
All the disclosures are aimed at meeting the needs of investors and other stakeholders, in addition to providing consumers with easily accessible information on the impact of businesses on society.
The issues the Report may face are that its ‘Types’ of disclosures are not overly specific and there is arguably cross-over between Types 1 and 2, such that it is not necessarily clear into which ‘Type’ something may fall. It also seeks to align the legal elements of the NFRD with the TCFD recommendations, which are not necessarily the easiest of bedfellows. Irrespective of these issues, with the updated guidelines expected in June 2019, businesses in the scope of the NFRD would be well advised to begin considering their own climate-related disclosures in accordance with the Report.
The full Report is available here
We published January’s Environmental Law Podcast recently – a monthly round-up of the latest developments in environmental law.
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