Page 1

To what extent does the contaminated land regime in England reflect the polluter pays principle?

The Contaminated Land Regime (CLR) has arisen around almost 200 years of economic development in the United Kingdom. Contaminated Land is dealt with under the Part 2A of the Environmental Protection Act 1990 (EPA).1 Part 2A is concerned with identifying contaminated land and, because the associated cleanup costs are very high, determining who will pay for it to be remediated. There are estimates that contaminated land in the UK varies somewhere between 50,0002 and 300,0003 hectares. Although the government intends that “responsibility for paying for remediation will, where feasible, follow the “polluter pays” principle”4 that may not always be possible.5 For instance, where the original polluter is no longer in business. Section 78A(2) of Part 2A defines “contaminated land” as, “any land which appears to the local authority in whose area the land is situated to be in such a condition, by reason of substances in, on or under the land, that (a) significant harm is being caused or there is a significant possibility of such harm being caused; or (b) pollution of controlled waters is being, or is likely to be, caused”. Although water pollution emanating from contaminated land is included within this definition, where it does not come from such a source it is ordinarily covered by its own regulatory regime. Where section 78A(2) defines contaminated land it is “deliberately vague”6 and the statute must be read alongside the statutory guidance. 7

1

“Part 2A” was inserted into the 1990 Act by Section 57 of the Environment Act 1995.

2

T. Hellawell, Blakstones Guide to: Contaminated Land, 2000, p.2

3

D. Lawrence & R. Lee, Permitting Uncertainty: Owners and Occupiers and Responsibility for Remediation (2003), 66 MLR 261, p.261. (The accuracy of these figures in 2012 is uncertain given that remediation will have occurred, but new sites will also have been discovered). The “Polluter Pays” principle: “... the objective is to make those who cause environmental damage face the costs of control in full, without subsidy.” Government White Paper, This Common Inheritance, 1990, CM1200, par.1.25. 4

5

Defra Circular 01/2006, Environmental Protection Act 1990: Contaminated Land, 2006, Annex 1, par.37 (Hereafter Defra Circular 01/2006) 6

Environmental Law, 6th Edn, Bell & McGillivray, 2006, p.677

7

The current statutory guidance is contained in Defra Circular 01/2006, Environmental Protection Act 1990: Contaminated Land, 2006. However, on 7th February 2012 the revised draft statutory guidance was laid before Parliament. Subject to there not being a resolution in either House that the guidance should not be issued and a time period of 40 days passing the guidance will then be formally issued. A final version of the draft can be found at: archive.defra.gov.uk/environment/quality/land/contaminated/documents/contaminated-landguidance120206.pdf

LW3ENV

1/11

Assessed Work No: 3123


Part 2A imposes a duty upon local authorities to inspect and identify contaminated land in their area.8 If land is contaminated Part 2A imposes a duty on the local authority, or in certain situations the Environment Agency, to take action to ensure the remediation of the site, by the service of a formal remediation notice if necessary. It is clear that this duty occurs only when the contamination threatens significant harm or water pollution and it is both “strict and retrospective”.9 Once contaminated land has been identified a remediation notice must be served to the appropriate person. The appropriate person is defined in section 78F(2) of Part 2A: “any person... who caused or knowingly permitted the substances... to be in, on or under that land is an appropriate person”. The statutory guidance divides the appropriate persons into two groups: (Class A persons) a person who has “caused or knowingly permitted the pollutant to be present”;10 and (Class B persons) “where no Class A persons can be found for a significant pollutant, the enforcing authority needs to identify all of the owners or occupiers of the contaminated land in question”. 11 The statutory guidance states it is “ultimately for the courts to decide the meaning of ‘caused’ and ‘knowingly permitted’”.12 However, the guidance indicates that the test of ‘causing’ will require that “the person concerned was involved in some active operation, or series of operations, to which the presence of the pollutant is attributable. Such involvement may also take the form of a failure to act in certain circumstances”. 13 In Alphacell v Woodward, Lord Wilberforce stated, ‘causing’ must be given a “common sense meaning”.14 The factual nature of the word ‘cause’ gives a clear effect to the “polluter pays” principle: if a person causes something they are the polluter. Class A liability may also attach to a party who has ‘knowingly permitted’ the presence of pollution.15 The meaning of the term ‘knowingly permit’ in the statutory guidance 8

This is a two step process explained in Defra Circular 01/2006, Annex 3, par. A.11 and Annex 3, par.A.19

9

D. Lawrence & R. Lee, Permitting Uncertainty: Owners and Occupiers and Responsibility for Remediation (2003), 66 MLR 261, p.261 10

Defra Circular 01/2006, Annex 2, par.9.25

11

Defra Circular 01/2006, Annex 2, par.9.30

12

Defra Circular 01/2006, Annex 2, par.9.15

13

Defra Circular 01/2006, Annex 2, par.9.9

14

[1972] A.C. 824, at p.834

15

R. (on the Application of Crest Nicholson Residential Ltd.) v Secretary of State for Environment, Food and Rural Affairs, [2010] EWHC 1561 (Admin), [2011] Env. L.R. 1. In this case developers undertook work which resulted in contamination (contrary to EPA Part 2A, s.78A). Although not the original polluters, they were held to have caused the pollutant to be in the land as a result of their work. The inspectors report indicated that knowingly permitting would have been sufficient for Class A liability to be established.

LW3ENV

2/11

Assessed Work No: 3123


considers the statements of Earl Ferrers: “The test of “knowingly permitting” would require both knowledge that the substances in question were in, on or under the land and the possession of the power to prevent such a substance being there”.16 The guidance further states that a person who is informed about contamination may be considered to have “knowingly permitted” only where they had the ability to take steps to “prevent or remove that presence and had a reasonable opportunity to do so”.17 However, “knowledge” alone is not enough to establish liability. 18 In Tophams Ltd. v Earl Of Sefton, Lord Hodson stated, “one cannot permit that which one does not control. Authority is required before permission can be given”.19 This control requirement was seconded by Lord Guest, stating “The ordinary meaning of “to permit” is to give leave for an act to be done which the person permitting has power to prevent”.20 In Vehicle Inspectorate v Nuttall,21 the House of Lords emphasised the importance of taking the word ‘permit’ in the context of the appropriate legislation. Lord Nicholls, in referring to the word ‘permitted’, observed that, “Its meaning depends on the context”.22 In the context of the Part 2A, ‘permit’ means very little because it is not logical that control may be required with Class A persons, but yet Class B persons can come to the land, without knowledge or control of the contaminant, and then be equally liable to pay for remediation. Lord Wilberforce in Alphacell v Woodward 23 commented in the House of Lords that: “knowingly permitting... involves a failure to prevent the pollution, which failure, however, must be accompanied by knowledge”.24 Lord Goddard CJ in Lomas v Peek,25 observed that “If a man permits a thing to be done, it means that he gives permission for it to be done, and if a man gives permission for a thing to be done, he knows what is to be done or is being done”.26 It has also been observed that turning a blind eye to pollution may result in liability.27

16

House of Lords, Hansard [11 July 1995], col.1497

17

Defra Circular 01/2006, Annex 2, par.9.12

18

Defra Circular 01/2006, Annex 2, par.9.13 & 9.14

19

Tophams Ltd. v Earl Of Sefton [1967] 1 A.C. 50, p.65, Per Lord Hodson

20

Tophams Ltd. v Earl Of Sefton [1967] 1 A.C. 50, p.68, Per Lord Guest

21

[1999] 1 W.L.R. 629

22

[1999] 1 W.L.R. 629, p.630

23

[1972] A.C. 824

24

[1972] A.C. 824, p.834

25

[1947] 2 All E.R. 574

26

[1947] 2 All E.R. 574, p575

27

Kent CC v Beaney [1993] Env. L.R. 225

LW3ENV

3/11

Assessed Work No: 3123


Knowledge based liability does not gives effect to the “polluter pays” principle, so is the strict standard in the CLR preferable? The largest defect with the CLR is that under Part 2A, s.78F, Class B liability may be imposed on owners or occupiers.28 This is clearly inconsistent with the “polluter pays” principle, and inconsistent with how liability is attached to Class A persons, because Class B liability has no link to the pollution apart from a presence on the land. Yet, if after “reasonable inquiry”,29 no party is found who has ‘caused’ or ‘knowingly permitted’ the contamination then both the statute and the guidance indicate the owner or occupier will be liable. There is some consolation in Part 2A, s.78.J(3), which states that owners and occupiers will not be liable for “pollution of controlled waters”.30 This essentially creates a pseudo-“polluter pays” principle specifically for the CLR because Class B persons are effectively labeled as polluters when liability attaches to them, despite actually being non-polluters. Planning Regime Much of the remediation of contaminated land will involve planning regulations. In some cases, the carrying out of remediation activities may itself constitute “development” within the meaning given at s.55 of the Town and Country Planning Act 1990, and therefore require planning permission. The governments Planning Policy Statement requires that, “As a minimum, after carrying out the development and commencement of its use, the land should not be capable of being determined as contaminated land under Part 2A of the EPA 1990”.31 Planning regulations support the CLR by promoting remediation by the developer who is likely to have the opportunity and financial resources to carry out the remediation. The administrative court, in R. (on the application of Technoprint Plc) v Leeds City Council,32 granted an application to overturn planning permission for the construction of a block of flats. This was on the basis that it was unreasonable for permission to be granted when there were unresolved issues relating to contamination. It demonstrates the relationship between the CLR and planning and illustrates how land can be remediated without needing to serve a remediation notice. This indicates that the CLR is somewhat of a last resort and that 28

“Owner” is defined as the person entitled to receive the market rent (s.78A). “Occupier” is not defined, but it is “likely to be taken as the literal definition of someone in physical occupation of, or having some presence on, the land”. T. Hellawell, Contaminated Land, p.23 29

No formal guidance has been given in respect of the definition of ‘reasonable inquiry’, but the DETR policy is to let the courts determine the ambit of the phrase (Defra Circular 01/2006, Annex 2, par.9.18) 30

However, owners and occupiers may face liability for clean up works under Section 161 of the Water Resources Act 1991, which enables a “works notice” to be served in suitable circumstances. 31

Planning Policy Statement 23: Planning and Pollution Control, 2004, par.25

32

[2010] J.P.L. 1244

LW3ENV

4/11

Assessed Work No: 3123


voluntary assumption of responsibility is preferable. Practically it also makes sense for a developer to remedy the land before new buildings are built, or remediation may otherwise be impossible. Waste Management The CLR overlaps with waste management controls because depositing waste is a significant cause of contaminated land. Following the decision in Case C-1/04 Van de Walle,33 s.78YB of the Part 2A provides that the depositing of controlled waste on land is not subject to a remediation notice under the CLR because it is regulated by s.59 of the EPA. Land which would otherwise be contaminated will not be subject to the CLR where there is an existing waste management license as it is subject to clean up provisions under s.59(1). 34 Additionally, clean up operations under the CLR will require waste management licenses. Monitoring waste through licenses ensures there is a responsible party for the waste which creates a cradle-tograve management system and this encourages reduction, recycling and reuse of waste. Waste management reduces the possibility of future environmental problems which aims to deal with waste before it leads to a contamination falling within the scope of the CLR. Private Nuisance & Rylands v Fletcher 35 Private nuisance and the rule from Rylands v Fletcher, had the potential to develop into a common law equivalent to the CLR because both may be used as a means of protecting the environment. Were it not for Cambridge Water v Eastern Counties Leather, 36 where the House of Lords stated that the Rylands rule should not be developed as a means of environmental protection,37 common law could have been used in this way. In a similar approach Lord Hoffman, in Hunter v Canary Wharf,38 said, “the common law should be rational and coherent. It should not distort its principles and create anomalies merely as an expedient to fill a gap”.39

33

[2005] 1 C.M.L.R. 8

34

“If any controlled waste is deposited in or on any land... a waste regulation authority... may... require the occupier to... (a) to remove the waste from the land; (b) eliminating or reducing the consequences of the deposit of the waste.” 35

(1868) L.R. 3 H.L. 330, per Blackburn J, “that the person who for his own purposes brings onto his land and collects and keeps anything likely to do mischief if it escapes, must keep it as his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape”. 36

[1994] 2 A.C. 264

37

[1994] 2 A.C. 264, pp.305-306, per Kennedy J; see also Transco v Stockport MBC [2004] 2 A.C. 1, Lord Brightman, pp.7-12 38

[1997] A.C. 655

39

[1997] A.C. 655, p.707. However, see J.P.L. 1992, 809, p.812, for a further discussion of how the law had potential to develop in this area.

LW3ENV

5/11

Assessed Work No: 3123


The House of Lords seemed determined to maintain the division between common law proprietary rights and environmental rights. The CLR has come into existence to address the shortcomings of the common law in this respect and as a means of protecting the environment rather than property rights. The common law rules are not strict liability torts and require foreseeability to establish liability and this conflicts with the polluter pays principle. As most pollution occurs by accident this would understandably be an unworkable position for the CLR to adopt as the tax payer would eventually be left to foot the bill. Concluding Discussion The definition of “polluter” will clearly determine the scope of liability. Where liability is based on factual causation the “polluter pays” principle is given effect and satisfies the aim of the statute. Where liability is based on “knowingly permitting” there is some degree of culpability placed on knowing about, yet failing to prevent or remove, pollution. However, where last resort liability (Class B persons) attaches to owners and occupiers this seems to offend the layman's notion of justice as they can hardly be said to fit the common meaning of “polluter”. Bell and McGillivray suggest that the CLR is more concerned with “finding creative ways of financing the cost of the clean up”.40 The government have stated that the CLR is primarily concerned with recycling developed land,41

therefore financing the

development is obviously integral to this policy. Part 2A and the guidance define “appropriate person” in such broad terms that “polluter” has become an abstract concept, and the “polluter pays” principle is “shorthand for a series of detailed regulatory tests”42 to fix liability to a party other than the government and taxpayer. For the purposes of part 2A the ordinary “Polluter Pays” principle has been stretched beyond recognition. This paradox between the “polluter pays” principle as the ordinary man would understand it and the equivalent which seems to operate under the CLR was considered by the Earl of Lytton during the Parliamentary debates on the CLR. He stated that “making an economic scapegoat out of an individual for matters which in times gone by were at least partly a collective responsibility is wrong as a general principle. I have to say that I do not think it would work in practice.”43 Yet this is the position which the CLR still maintains almost a decade later. 40

Bell & McGillivray, Environmental Law, 6th, 2006, p.697

41

The Government’s national target is that by 2008, 60% of new dwellings should be provided on previouslydeveloped land and through conversions of existing buildings: Land Use Change in England: Residential Development to 2003 (LUCS 19), p.4 42

Bell & McGillivray, Environmental Law, 6th, 2006, p.688

43

Parliamentary Debates, House of Lords, 1994, Vol. 559. col.1424 (Dec. 15, 1994).

LW3ENV

6/11

Assessed Work No: 3123


A person who has ‘caused’ or ‘knowingly permitted’ contamination has directly influenced its presence, either through an act or omission, and liability is rightly attached to this. Although there is a degree of blameworthiness in a Class A person there is no required fault, indeed the guidance suggests liability is strict. Owners and occupiers who are liable because no Class A person can be found are not ‘polluters’ in the literal sense of the word at all. Distinguishing between Class A and B liability perhaps means that some greater liability attaches to those who ‘cause’ or ‘knowingly permit’, so the literal definition of polluter is not lost completely. But one has to ask what difference this distinction really makes. The obvious example of when it would be permissible to move away from the pseudo-“polluter pays” principle as used in the CLR is where an innocent Class B person could be fixed with liability. This would mirror the liability contained in the common law rules but would not help find a person to fund the remediation. This is the problem for the government because they do not want to open themselves up to the possibility of having to pay for remediation where the polluter was not at fault. The courts are ultimately responsible for determining who is liable and (one would hope) are unlikely to produce a decision which will be manifestly unjust, but the guidance indicates that there is a very narrow approach to the exclusion of liability. For instance persons who do not have a capital interest in the land (tenants) will be excluded,44 but owners are not protected. The local authority, however, is under a duty to have regard to any hardship, including financial hardship,45 which may be caused before serving a remediation notice to an appropriate person. This provision ensures the Local Authority retains control over fixing liability and protects a very limited group of persons. The reality of Part 2A is that only persons who can afford to pay are likely to be served a remediation notice. The archetypal corporate defendants are unlikely to encounter remediation notices anyway, as they will often voluntarily assume responsibility as remediation is necessary before land can be developed,46 which is then covered by planning regulations. Any modern pollution will be dealt with under the waste management licensing regulations and not the CLR. This serves to show why there are few examples of the CLR operating in practice and perhaps why Class B liability has not yet been abolished.

44

Defra Circular 01/2006, Environmental Protection Act 1990: Contaminated Land, 2006, Annex 3, par.D87

45

Defra Circular 01/2006, Environmental Protection Act 1990: Contaminated Land, 2006, Annex 2, par.10.9

46

The Local Authority will not ordinarily serve a remediation notice where parties volunteer to remediate the land.

LW3ENV

7/11

Assessed Work No: 3123


Bibliography Statutes • Environmental Protection Act 1990 • Environment Act 1995 • The Environmental Damage (Prevention and Remediation) (Amendment) Regulations, 2009 No. 3275 • Water Resources Act 1991

Case Law EU • C-1/04 Van de Walle [2005] 1 C.M.L.R. 8 UK • Alphacell v Woodward [1972] A.C. 824 • Cambridge Water v Eastern Counties Leather [1994] 2 A.C. 264 • Dennis v MOD [2003] Env LR 34 • Food and Rural Affairs, [2010] EWHC 1561 (Admin), [2011] Env. L.R. 1 • Hatton v UK [2003] 37 EHRR 28 • Hunter v Canary Wharf [1997] A.C. 655 • Kent CC v Beaney [1993] Env. L.R. 225 • Lomas v Peek [1947] 2 All E.R. 574 • R. (on the Application of Crest Nicholson Residential Ltd.) v Secretary of State for Environment, • R. (on the Application of Technoprint Plc) v Leeds City Council [2010] J.P.L. 1244 • Rylands v Fletcher (1868) L.R. 3 H.L. 330 • Tophams Ltd. v Earl Of Sefton [1967] 1 A.C. 50 • Transco v Stockport MBC [2004] 2 A.C. 1 • Vehicle Inspectorate v Nuttall [1999] 1 W.L.R. 629 LW3ENV

8/11

Assessed Work No: 3123


• X v. A, B and C [2000] E.L.R. 104

Books • Bell & McGillivray, Environmental Law, 6th, 2006 • Hellawell T., Blackstone's Guide to Contaminated Land, 2000. • Wolf and Stanley, Wolf and Stanley on Environmental Law, 5th, 2011

Practitioners Guides • Contaminated Land: Managing Legal Liabilities, 2nd Ed, Eversheds, Business and the Environment: Practitioner series, M. Warren, 2001.

Journals • Analysing the Polluter Pays Principle Through Law and Economics, B. N. Mamlyuk, 18 SE.E.L.J. 39 2009-2010 • Brownfield land: The Need for Greater Certainty, Paul Davies, E.L.R. 197, 2002 • Cambridge Water Company v Eastern Counties Leather Plc: a polluter's charter? D. A. Reid, S.P.E.L. 5, 1994 • Clean-up of Contaminated Land: An Assessment of the Mechanisms Available, S. Hawkins. J.P.L 1119, 1992 • Cleanup and Restoration: Who Should Pay? S. R. Poulter, 18 J. Land Resources & Envtl. L. 77 1998 • Contaminated Land - D-Day Approaches, P.L.B. 1, 1992 • Contaminated Land Regime in the UK, S. Tromans, 13 Nat. Resources & Env't. 487 1998-1999 • Contaminated land - Remediation and Liabilities, R. G. Lee, J.B.L. 172, 1997 • Energy, Economic Development, the Environment and Effective Global Governance: An Introduction, A. Adaralegbe, I.E.L.T.R. 185, 2005 • Enforced Remediation of Historically Contaminated Land, M. O'Reilly, C.L.J. 294, 2001 • Environmental Principles and Environmental Justice, O. W. Pedersen, E.L.R. 26, 2010

LW3ENV

9/11

Assessed Work No: 3123


• Funding the Remediation of Contaminated Land in Australia and New Zealand: The Problem of Orphan Sites, A. Kingsbury, 6 Waikato L.R. 37, 1998 • High Talk and Low Cunning: Putting Environmental Principles into Legal Practice, S. Tromans, J.P.L. 779, 1995 • Integrated Pollution Control in Victorian Britain: Rethinking Progress Within the History of Environmental Law, Ben Pontin, J.E.L. 173, 2007 • Muddying the Waters: Tort Law and the Environment from an English Perspective, D. Howarth, 41 Washburn L.J. 469, 2001-2002 • 'New' Environmental Liabilities:The Purpose and Scope of the Contaminated Land Regime and the Environmental Liability Directive, M. Lee, 11 E.L.R. 264, 2008-2009 • Permitting Uncertainty: Owners, Occupiers and Responsibility for Remediation, D. Lawrence and R. Lee 66 M.L.R. 261, 2003 • Talking bout my Generation: The Remediation Liability ofWaste Producers, D. Lawrence and R. Lee, 8 E.L.R. 93, 2006 • The Failed Promise of the "Polluter Pays" Principle: An Economic Analysis of Landowner Liability for Hazardous Waste, M. J. Gergen, 69 N.Y.U. L. Rev. 624, 1994 • The Quest for Environmental Law Equilibrium, A. Waite, E.L.R. 34, 2005 • Understanding Environmental Liability: The UK Legislative and Regulatory Framework, S. Tromans, I.C.C.L.R. 9, 1991 • What shall we do with the contaminated site? A. Harrison, J.P.L. 809, 1992

Government Documents • Contaminated Land Statutory Guidance, DEFRA, 2006 (Defra Circular 01/2006, Environmental Protection Act 1990: Contaminated Land, 2006) • Draft Contaminated Land Statutory Guidance, DEFRA, 2012 (Not in force) • Government White Paper, This Common Inheritance, 1990, CM1200 • Guidance on the Legal Definition of Contaminated Land, DEFRA, 2008 • Land Use Change in England: Residential Development to 2003 (LUCS 19), Office of the Deputy Prime Minister, 2004 • Planning Policy Statement 23: Planning and Pollution Control, Office of the Deputy Prime Minister, 2004 LW3ENV

10/11

Assessed Work No: 3123


Websites • Department for Environment, Food and Rural Affairs http://www.defra.gov.uk/

LW3ENV

11/11

Assessed Work No: 3123

To what extent does the contaminated land regime in England reflect the polluter paysprinciple?  

Extract: The Contaminated Land Regime (CLR) has arisen around almost 200 years of economic development in the United Kingdom. Contaminated L...