The Government has issued a White Paper on proposed reforms to UK Company Law. It contains the first draft legislation resulting from the three-year review and consultation process. There are some environment-related provisions which will affect companies and their Directors. Among the proposed changes is a requirement for public and large private companies to publish in their annual report, an audited Operating and Financial Review (OFR). It is proposed that this should contain an assessment of the company’s business and performance. The OFR will have to contain several core elements including relationships with employees, customers and suppliers and the company’s impact on the environment and the wider community. It is suggested that the OFR might apply where a company meets certain size criteria. At present this would include companies or groups with an estimated aggregate turnover in the region of £1,000 billion and would cover a quarter of corporate economic activity in the UK. However, it represents less than 0.1% of registered companies.
(DTI, July 2002)
Access to environmental information
DEFRA has launched a public consultation on new environmental information regulations. The new regulations will form part of the implementation of the Freedom of Information Act 2000. They will also transpose the access to information limb of the UN Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (the Aarhus Convention). At present, legal rights of access to environmental information are regulated under the Environmental Information Regulations 1992 (as amended) (SI 1992 No 3240). The new proposals aim to amend the existing regime by altering the scope of these Regulations and the bodies affected by them, reduce the time limit for responses to applications to one month and introduce a public interest test, an information commissioner and a tribunal to provide a means of review for applicants. The consultation period will run until 4 October 2002, with the new regulations expected to come into force at the end of 2002 or early 2003.
(DEFRA, July 2002)
The European Parliament has concluded its second reading of the proposed Directive on public participation in environmental decision making which will implement one of the limbs of the Aarhus Convention. The Parliament is calling for all Pollution Prevention and Control (PPC) permits to be subject to full public participation. This is contrary to the Council’s position, which is that this is only necessary when there are significant changes to emissions limits in permits. The Parliament also wants a wider definition of the types of plans and programmes that are covered under the Directive and to restrict the scope for allowing authorities to exempt certain defence and civil emergency plans from the procedure. It wants the Directive to enter into force within one year, while the Council has called for a two year period for implementation. The proposed Directive will now be considered by the Council in its second reading.
(European Parliament, 5 September 2002)
Copying and graphic paper
Revised criteria for an eco label for copying and graphic paper have been published in the Official Journal. The new Decision revises the 1999 criteria in order to reflect the developments in the market and to include graphic paper in the definition of product group. One of the most significant changes is an obligation for producers to source at least 10% of all virgin wood fibres from forests that are certified as being managed according to sustainable practices. Producers of this product group which have already been awarded, or have already applied for, an eco label under the old marking scheme will be able to continue to use the label until 31 August 2003.
(OJ L237, 5 September 2002)
Indoor paints and varnishes
New criteria for an eco label have been published for indoor paints and varnishes. This product group represents the scheme’s second most successful group, with over 100 eco labelled products currently available. There are only minor changes in the new criteria. One of these is that the allowable titanium dioxide white pigment is reduced from 40 grammes per square metre under the old eco label, to 38 grammes per square metre. Both the new criteria and the criteria established under the old 1999 eco label will be valid concurrently for 12 months. This should allow sufficient time for companies that have been awarded or that have applied for the old ecolabel to adapt their products to comply with the new criteria. The product group includes indoor decorative paints and varnishes, wood stains and related products both for home use and professional users.
(OJL 236, 4 September 2002)
The European Commission has issued revised criteria for awarding eco labels to bed mattresses. There are only slight changes to previous criteria established in 1998. These include the banning of organic tin compounds in polyurethane filler material and a reduction in the amount of formaldehyde allowed in latex foam filling. Both the new and old criteria will be valid concurrently for a period of 18 months.
(OJ L236, 4 September 2002)
Stricter criteria for awarding an ecolabel to light bulbs have been published in the Official Journal. The label requires all single and double-ended light bulbs to operate to Class A energy efficiency standards, except single-ended non-ballast bulbs, which may also be in Class B. Compact fluorescent long-life bulbs must last longer than 20,000 on/off cycles. In addition, the maximum mercury content is reduced by around a third, while polybrominated diphenyl ether (PBDE) and short-chain chloro-paraffin flame retardants are banned. The old criteria will be valid for one year .
(OJ L242 10 September 2002)
The Global Reporting Initiative (GRI) has released guidelines for producing sustainability reports. The new guidelines update and expand the original guidelines produced two years ago and which have been used by hundreds of firms worldwide to produce their report. The new guidelines include a list of expanded performance indicators aimed at placing a greater emphasis on social and economic issues, rather than just concentrating on environmental issues. They also present a more structured guide to reporting and insist that statements on the company’s vision and strategy regarding sustainable development, as well as specific company information on governance, are included before a report can be described as in accordance with GRI guidelines. However, the issue of report verification is only touched upon briefly.
(GRI, August 2002)
For further information please contact Paul Sheridan on +44 (0)20 7367 2186 or at [email protected]