Environment Damage Regulations take effect in England on 1 March 2009

In May 2008 we outlined new notification obligations arising from draft regulations implementing Directive 2004/35/EC of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage (otherwise known as the Environmental Liability Directive). The final version of the regulations, the Environmental Damage (Prevention and Remediation) Regulations 2009 (the “Regulations”) based on the “polluter pays principle” will come into force on 1 March 2009. A link to the Regulations is available here.

The Regulations apply to England only. Separate regulations will be produced for Northern Ireland, Scotland and Wales and are expected to come into force in 2009. The Regulations provide that, for certain activities, where there is an imminent risk of “environmental damage”, the operator must take steps to prevent it. If damage has occurred and is or is likely to be “environmental damage”, the operator must prevent further damage. Where damage has occurred, the relevant enforcing authority must assess the damage, identify whether it is “environmental damage”, decide upon remedial measures and serve a remediation notice on the responsible operator specifying what remediation is required.

The key elements of the Regulations are summarised below.

Application of the Regulations

• “Environmental damage” covers damage to:-
  • protected species or natural habitats, or a site of special scientific interest (“SSSI”),
  • surface water or groundwater; or
  • land.
• The Regulations apply in relation to environmental damage if caused by an activity specified in Schedule 2 to the Regulations. In addition the Regulations apply to other activities in the case of environmental damage to protected species, natural habitats or a SSSI if the operator intended to cause environmental damage or was negligent as to whether damage would be caused.
• The Regulations apply, in the case of damage to:-
  • water: to all water up to one nautical mile seaward from the baseline in England;
  • protected species or natural habitats: to England, the seabed of the continental shelf, anywhere other than the seabed in the Renewable Energy Zone (approximately 200 miles offshore)
  • land and damage to a SSSI: to England.
• There are exemptions. In particular the Regulations do not apply to environmental damage caused by an incident which falls within the scope of specified international conventions in relation to oil pollution.

Provisions in respect of preventing environmental damage and further environmental damage

• An operator of an activity that causes an imminent threat of environmental damage or an imminent threat of damage which there are reasonable grounds to believe will become environmental damage must take all practicable steps to prevent the damage and unless the threat has been eliminated, notify all relevant details to the enforcing authority.
• The enforcing authority may serve a notice specifying the measures required to prevent the damage and requiring action by the operator within a particular timescale.
• If the operator fails to comply with a notice specifying steps required to prevent damage or further damage; it is an emergency, or the operator cannot be ascertained, an enforcing authority may carry out any reasonable works. The enforcing authority may claim any reasonable costs of the work.

Remediation

• Where damage has been caused and there are reasonable grounds for believing that it is or may be environmental damage, the enforcing authority will determine liability and the operator must submit remediation proposals. There is a right of appeal within 28 days against a notice determining liability to remediate.
• Once remediation proposals are received from the operator or in their absence, the enforcing authority must, as far as practicable, consult anyone involved in notifying an authority, any person on whose land the remedial measures will be conducted and any other person as appears necessary.
• Following consultation the enforcing authority must serve a remediation notice on the operator setting out the actions required and the timescale. The notice must include a right of appeal. Notice of appeal must be served within 28 days. Further remediation notices may be served during works.
• If the operator fails to comply with a remediation notice, is not required to remediate or the operator cannot be identified, an enforcing authority may carry out any reasonable works. The enforcing authority may claim any reasonable costs of the work.
• For damage to land, remediation involves taking measures so that the damage no longer poses any significant risk of adversely affecting human health. For all other damage, remediation involves restoring the environment back as far as possible to the condition it would have been in had the damage not occurred in addition to any complementary and compensatory remediation necessary.
• There are specified grounds of appeal against the liability to remediate which include that the operator was not at fault or negligent and was operating in accordance with a specified permit or if it shown that the damage was caused as a result of a third party act which occurred despite appropriate safety measures.

Interested Parties

Any person who is affected or likely to be affected by environmental damage or is deemed to have sufficient interest may notify the appropriate authority of any environmental damage or risk of the same and as a result the authority must inform the notifier what action, if any, will be taken.

Offences

It is an offence:

• In the case of imminent threat of environmental damage or an imminent threat of damage where there are reasonable grounds to believe it will become environmental damage:
  • Not to take all practicable steps to prevent the damage and unless the threat has been eliminated, not to notify the appropriate enforcing authority
  • To fail to comply with a notice served by an enforcing authority
• Where environmental damage has been caused or damage caused where there are reasonable grounds to believe that the damage is or will become environmental damage:
  • To fail to take all practicable steps to prevent further damage and notify all relevant details to the appropriate enforcing authority
  • To fail to comply with a notice served by the enforcing authority.
• To fail to comply with a remediation notice.

Penalties

The penalties for an offence under the Regulations are up to a £5,000 fine in the Magistrates Court and/or up to 3 months imprisonment or an unlimited fine and/or up to 2 years imprisonment in the Crown Court. Where a body corporate is guilty of an offence and the offence is proved to have been committed with the consent or connivance of or to have been attributable to any neglect on the part of any director, manager, secretary or person of similar standing or any person purporting to act in such a capacity that person is also guilty of an offence.

Enforcement

Enforcement action must be taken within 30 years. The operator is liable for any costs incurred in serving notices, assessing damage, identifying the responsible operator, determining liability, assessing appropriate remediation, consultation and monitoring. Proceedings for the recovery of costs must be started within the later of either 5 years of the completion of measures or the identification of the operator liable to carry out the measures.

Effect

The Regulations are not retrospective in effect and supplement existing environment legislation. Many businesses may already be required to notify regulators of environment incidents. However, all businesses should ensure that the notification obligations are factored into incident response plans and appropriate training provided. Consideration should also be given to reviewing insurance policies to assess whether there is adequate cover for potential liabilities. Care should be taken to ensure that in addition to enforcement action in respect of an incident itself, businesses are not also prosecuted for the new offences under the Regulations. In the event that operators have the ability to discuss changes to existing permit conditions thought should also be given to whether additional conditions should be incorporated to take account of the “permit defence” in respect of remediation. The Regulations may also act as a route for campaign groups to place pressure on regulators and scrutinise enforcement action.