Scottish Government

SECTION 3
CONSULTATION ISSUES

A APPLICATION TO ASPECTS OF THE ENVIRONMENT

Damage to biodiversity
The trigger for liability under ELD

39. Assessment of biodiversity damage under the Directive is based on the concept of "favourable conservation status" (or " FCS"), drawn from the established EU Birds Directive and Habitats Directives. In relation to damage to biodiversity, therefore, this provides a means of ensuring that vulnerable habitats and species are maintained in a way that secures their long-term viability in the areas of their natural distribution, and the structure and functioning of habitats to support this. The thinking underlying the Directive includes the use of common definitions from relevant Community legislation, so that common criteria can be used and uniform application promoted. Employing FCS in the context of environmental liability reflects the core emphasis placed by the Directive on addressing the broad-scale effects of environmental damage and contamination.

40. The test of 'significant damage' relates to conservation status over the territory of the Member State or Member States collectively or the natural range of that habitat or species. Moreover, Annex 1 to the Directive provides that the conservation status of the species or habitat across the Community may have to be taken into account. For example, if the conservation status in the UK is favourable but this is not the case across the Community, then the relevant status for the purposes of remediation would be that across the Community. Conversely, if the status is favourable in the Community as a whole, but unfavourable in the UK, the UK status will be the most relevant. It will be further noted that the above criteria refer to "the rarity of the species or habitat assessed at local, regional and higher level including at Community level".

41. So the ELD does not apply in any direct sense to designated nature conservation sites, The existence of such sites is relevant but the Directive is not constrained to any such 'artificial' boundaries. It may be instructive to expect to find the most vulnerable (and therefore most protected) species and habitats within EU-protected (Natura) sites and, at more local level, within nationally-protected sites. There is less information on the extent of vulnerable species and habitats on areas not protected within sites but the availability of this information is increasing, for example, through biodiversity audits carried out for environmental assessment and environmental management.

42. It might be attractive at first sight to adopt a site-based threshold, using existing data and mechanisms, and to in-fill where required outwith designated sites to meet the broader requirements of the Directive. Indeed, that might well be the starting point for operators and competent authorities. However, any test based on site integrity stands the risk that it would merely replicate elements of the existing protective regimes derived from the Birds and the Habitats Directives and the Nature Conservation (Scotland) Act 2004. The added value of the ELD in biodiversity protection lies in the high level aim to avoid or remedy impacts on FCS wherever they occur. Particularly if a site-based threshold is not included, then greater clarity will be needed for operators as to the circumstances in which FCS may be affected.

43. Under FCS, the 'significant damage' threshold will be ' …significant adverse effect on reaching or maintaining FCS…'. The RIA shows that an FCS approach sets a fairly high threshold and, in consequence, perhaps damage to biodiversity coming within the terms of the Directive might be one case per annum in the early years at a cost around £0.4m pa. See the RIA pages 64-65 for details.

Damage to biodiversity
Strict and fault-based liability

44. Damage to biodiversdity is the only area in which the ELD provides for two types of liability - strict liability for damage from activities in Annex III and fault-based liability for damage from all other occupational activities. That distinction re-emphasises the difference in character between the relatively higher risk EU-regulated activities listed in Annex III to the Directive and the broad range of all other possible but perhaps less-damaging activities, for which operators may be liable for remediation of significant damage only where they have been negligent or at fault.

Damage to biodiversity
Possible extension to include nationally-protected biodiversity

45. The Directive provides the option (Article 2.3(c)) that a Member State may apply the Directive tobiodiversity protected under national law as well as to that protected under EU Directives on birds and habitats. National law in this respect is characterised most commonly in Scotland by Sites of Special Scientific Interest ( SSSIs). It might be attractive to include some or all within the scope of the Directive, for example, in order to help reduce or halt the loss of biodiversity by 2010. It might provide an element of flexibility in transposing the directive, for example, where application to EU lists alone might not make for sensible transposition or where a site-based approach might give greater certainty or clarity.

46. On the other hand, the thinking underlying the Directive includes the aim of parity with other Community instruments. Member States have the opportunity to operate national protection under less formal and more sensitive arrangements. Carefully-created relationships with land managers, farmers and other uses may need such flexibility to operate as required by national law. Moreover, the Nature Conservation (Scotland) Act 2004 brought in new provisions to enhance the protection of SSSIs that have not yet been fully tried and tested.

47. On balance, the Executive's provisional preference is not to apply this option at the present time.

Question 1
Do you agree the Executive's approach?
Do you have evidence to suggest that inclusion of nationally-protected biodiversity should be considered now?
Damage to EU-protected waters
The trigger for liability under ELD

48. In Scotland, the Water Framework Directive ( WFD) was transposed by the Water Environment and Water Services (Scotland) Act 2003. Scottish Ministers introduced the Water Environment (Controlled Activities) (Scotland) Regulations 2005/348 ( CAR) under Section 20 of the Act, entering into full force on 1 April 2006. CAR introduced risk-based and proportionate controls to protect Scotland's water environment from "controlled activities" - for example, abstraction, impoundment, building and point-source discharges.

49. Water bodies are defined in terms of the WFD as 'discrete and significant', or in the case of ground water, as a 'distinct volume of water within an aquifer'. Water bodies were identified in these terms by SEPA in 2004, and provisionally classified by quality. In the period to 2009 work is being done to classify surface water quality progressively in status classes 'high', 'good',' moderate', 'poor' or 'bad' and ground water as 'good' or 'poor'. By 2009 fuller data will be available, linked to river basin management plans. Meantime, for the purposes of ELD, the best available information should be used until the full classification under the WFD is available.

50. 'Water bodies' as described above will be sufficiently large or individual in character to be significant in ELD terms. The threshold for significant damage in terms of ELD can be assessed by reference to 'significant' deterioration. We propose that this should be measured in terms of a reduction of one or more status classes. The RIA suggests that perhaps 3 cases may arise per year in the early years at a cost of potentially £0.6m. See RIA pages 65-66 for details.

51. In ELD, activities falling within Annex III are caught on a strict liability basis, which includes abstraction and impoundment of water and discharges into surface or groundwater.

Question 2
Do you agree the Executive's approach?

Damage to land causing significant risk of adverse effect on health
The trigger for liability under ELD

52. The Directive imposes liability for contamination of land by activities listed in Annex III to the Directive which poses a significant risk of adverse effect on human health. The UK Contaminated Land Regime ( CLR) established under Pt II of the Environmental Protection Act 1990 applies obligations in relation to historical contamination and is one possible starting point for transposition. The purpose of the CLR, which came into force in Scotland in 2000, is to deal with a substantial legacy of land which is already contaminated by, for example, past industrial, mining and waste disposal activities. The CLR places a duty on local authorities, as the primary regulators, to secure the remediation of historically contaminated land identified within their areas. SEPA has similar powers in respect of specials sites. While noting (see below) the slight differences in the text of the relevant definitions with regard to contaminated land, significant harm, risk etc in the CLR compared to the text in the ELD, there appears to be very little in the way of practical difference and to all intents and purposes the provisions with regard to dealing with land damage are relatively similar in both regimes. The key differences are -

53. However, the Directive is not retrospective and is concerned with damage occurring from 30 April 2007 onwards . It is also concerned with assessment of risk and prevention of damage occurring. So an alternative approach would be to ensure that whatever is put in place for ELD is consistent with existing arrangements for preventative action. There are existing regulatory regimes to prevent the creation of new contamination, such as Pollution, Prevention and Control ( PPC) and legislative controls on waste - the Environmental Protection Act 1990 ( EPA 90) and Waste Management Licensing ( WML).

The PPC (Scotland) Regulations 2000 impose strict liability upon operators of relevant processes to prevent or remedy the effects of a breach of a permit in a manner tolerably similar to ELD. SEPA may act in default of an operator and recover its costs of doing so.

Waste management licensing under EPA 90 Pt II and relevant regulations impose a duty of care on all holders of waste to ensure that no harm to the environment or human health is caused by the waste, and that it is sent to appropriately licensed treatment or disposal. There are in addition duties on relevant bodies and landowners to deal with illegal deposits of waste. Those requirements are also reasonably in line with ELD.

54. Hence, it might be more forward-looking and fit better with existing regimes, to focus the attention of operators upon the opportunities of averting damage than upon dealing with the inevitable consequences of damage which has occurred in the past.

55. The RIA suggests that there might be 5 cases of new damage arising each year because of the Directive, resulting in a cost of perhaps £0.4m.

56 . There is a case for either approach outlined above. The Directive features prevention and responsibility for operators planning for the future. It widens the scope of CLR to include organisms and micro-organisms. By contrast CLR deals with the inheritance from past generations' damage, in respect of which the identity of operators and processes may not be known or understood. The Executive's provisional preference is towards prevention and therefore toward current regimes such as PPC and waste management. It may be that, in practice, elements of both are required.

Question 3
Do you agree the Executive's provisional approach?

Damage in the marine and agriculture environments-
The context

57. The marine environment is important to Scotland. Significant damage may occur to coastal waters (under the terms of the Water Framework Directive) or to biodiversity from a range of activities including - oil exploration, fishing, engineering or dredging. In ELD, damage to the water body is caught only by activities in Annex III (perhaps most likely the transportation by sea of dangerous goods) but damage to biodiversity is caught for any activity. Damage from oil and dangerous substances is likely to be covered by separate international conventions (see Annex IV to the Directive) and from radioactive substances by other international conventions and instruments (see Annex V).

58. Of the remainder, perhaps the activity most likely to cause damage (and be detectable) is thought to be fishing with bottom gear in environmentally-sensitive areas. Even then, the incidence is low and may be too localised to amount to significant impact to European habitats or species at UK or EU level. The RIA suggests at Tables 2 and 5 perhaps one event of significance occurring in any 10 years, any one event costing perhaps up to £1m to put right. The European Commission has advised that the EU Common Fisheries Policy would probably be the vehicle for enforcing any case under ELD. The figures above are illustrative of the possible frequency and scale of events, based upon best available past information rather than a prediction of the likelihood in the future. Also, in the marine environment information on events may well be less obvious (and less detectable) than those on land.

59. Devolved competence of the Scottish Executive in relation to marine off-shore limits would extend to 12 miles. Although fishing is devolved beyond this limit, environmental damage by fishing vessels will fall under the UKELD regime. The Executive is currently considering with DEFRA how environmental protection policies can best be delivered in the Scottish offshore zone without compromising the respective competencies of the Scottish Executive and UK Governments.

60 Farmers and other land managers are uniquely close to land and water bodies. It is no real surprise then that the RIA at Table 5 suggests that this sector could be exposed to a risk of perhaps 35% of possible future damage, largely on account of their closeness to protected species and habitats. To put that in a proper context, the RIA points out that there are permit conditions, eg for discharges, and cross-compliance standards for those working in this sector which would operate in favour of good practice; and only one ELD case per year is estimated in relation to biodiversity. Liability for damage to land under ELD would arise where there arose a significant risk of an adverse effect on human health. Liability for damage to water or to protected species or natural habitats would arise where there was an effect of significance in terms of the EU Water Framework, Birds and Habitats Directives respectively. Hence the liability is real (particularly for those working with or near important species or habitats or whose operations may cause pollution of surface water or groundwater) but is likely to be limited to a few cases, perhaps where preventative measures are overcome.

B. PERMIT & STATE OF THE ART DEFENCES

Compliance with permit "defence"

61. Article 8.4(a) provides an option that Member States may allow the operator not to bear the cost of remedial actions taken pursuant to this Directive where he demonstrates that he was not at fault or negligent and that the environmental damage was caused by:

(a) an emission or event expressly authorised by, and fully in accordance with the conditions of, an authorisation conferred by or given under applicable national laws and regulations which implement those legislative measures adopted by the Community specified in Annex III, as applied at the date of the emission or event;"

62. The case for such a defence is based on the premise that it could be possible to cause significant environmental damage whilst operating in compliance with a permit. From reading of the activities covered by Annex III, it is evident that a wide range of "permits" is encompassed - some more rigorous than others. The fact that most regimes in Annex III are regulated and enforced suggests that damage of a serious scale (sufficient to trigger action under ELD) would not be a common occurrence. The defence, as the name suggests, would be a factor to be claimed by an operator and considered by a competent authority in mitigation against allegation of liability. It would not be an exemption; and, to the extent that a defence were accepted, it would not remove requirements under existing legislation. The weight to be given to any such defence would depend upon the circumstances of the case. The Directive does not extend the defence to include damage (to biodiversity) from activities outwith Annex III.

63. The possibility of a permit defence rests on the principle that an operator should not be held liable for remediation of environmental damage resulting from an occupational activity despite operating fully in accordance with the terms and conditions of the permit. Business interests have emphasised that the availability of a permit defence would bring certainty about obligations and enable businesses to undertake their activity with confidence. This in turn has benefits in terms of their ability to attract investment and to obtain any necessary insurance cover at a competitive premium. The insurance sector argued for the permit defence, enabling them, in due course, to offer reasonably-price financial security products to cover liability under the Directive.

64. Against, there is a view that a permit defence might result in tightening, by the relevant competent authority, of permit conditions for the activity in question. That might be to avoid any possibility, however small, that the damage might be caused within the permit conditions and be left unremediated or left to the competent authority to consider remediating. In practice, it would be quite normal for a competent authority to review with an operator the circumstances of damage caused despite the operator's compliance. Permit requirements might then be changed and time agreed for restoration of normal operation.

65. It might also be argued by some that a permit defence would have the effect of converting the strict liability regime which the ELD requires for permitted occupational activities falling within Annex III to a fault-based regime. Some might say also that a defence, as opposed to an exemption, would not give absolute certainty and therefore would not be sufficiently beneficial to business.

66. It may be helpful to distinguish permits established by earlier or changing regimes, in which the rigour of the permit might allow scope for environmental damage occurring in the shorter term, eg the review of water abstraction permits under WFD. Other arrangements may constitute more of a notification or registration than environmental control because of the lesser risk to the environment, eg for small-scale discharges or activities exempted from waste management licensing. Such permits are unlikely to justify much defence against liability - although the liability is also likely to be that much less and hardly likely to exceed the ELD threshold.

67. In summary, it may be argued that a permit defence could weaken application of ELD. On the other hand, it might promote dialogue between operator and CA and actually strengthen the process of risk assessment and compliance with permit requirements. The number of cases attracting such a defence is likely to be small. On balance, Scottish Ministers incline towards the case for the permit defence. See 'Recovering costs' (paragraphs 71-82 below) for discussion of possible consequential effects.

Question 4
Do you support or not application of the option to give a permit defence ie that an operator might claim in mitigation in response to an allegation of liability?
Question 5
Do you support a case by case basis, ie a distinction between permits and their conditions, based upon the degree of reliance that might be placed upon the permit to safeguard the environment?
Question 6
Are there any criteria which might be used to judge the mitigation in individual cases?

State of scientific and technical knowledge defence

68. Article 8.4(b) states that a Member States may allow the operator not to bear the cost of remedial actions taken pursuant to this Directive where he demonstrates that he was not at fault or negligent and that the environmental damage was caused by:

(b) an emission or activity or any manner of using a product in the course of an activity which the operator demonstrates was not considered likely to cause environmental damage according to the state of scientific and technical knowledge at the time when the emission was released or the activity took place.

69. Some have expressed the view that, as far as development risk is concerned, there is no justification for exonerating the developer of a product whose use has been accepted but which it subsequently becomes evident is harmful at the recommended levels. One concern is that the time period which may be involved before the harmful nature of the product becomes evident may exceed the 30 year liability limit imposed by the Directive (see Article 17).

70. On the other hand it is argued that not to make it available would run the risk of stifling entrepreneurship and the development of new, potentially beneficial, products and technologies. This would be likely to have economic and social disadvantages.

Scottish Ministers incline to the view that, on balance, this defence is justifiable.

Question 7
Do you agree or not that the defence should be adopted, allowing an operator a claim in mitigation of liability of working to the known state of scientific and technical knowledge?

C Recovering costs

71. Article 8.3 states that "…an operator should not be required to bear the cost of preventive or remedial actions taken…" (third party liable or compliance with a compulsory order). Article 8.4 states that " … Member States may allow the operator not to bear the costs of remedial action taken …" (permit and state of art defences). So the following questions arise, of which discussion follows in paragraphs 72-82.

• Is it a defence against liability to carry out remediation, or merely against bearing the cost of remediation? In other words, is the operator required to undertake remediation in the first place?
• What happens if the operator does bear the cost but is unable to recover such costs from the third party, for example, because the third party either cannot be identified or is incapable of meeting the costs?
• What happens if the operator is excused liability or claims a defence?
• Should Scottish Ministers provide for express cost recovery mechanisms from third parties in the implementing regulations?

The operator

72. An operator may have taken the preventive or remedial action or the competent authority may have done so Articles 5.4 and 6.3 of the Directive respectively oblige the competent authority to require the operator to take preventative and remedial measures. One pragmatic interpretation of Article 8.3 would be to construe it as exempting the operator from taking preventive or remedial action. It is difficult to accept that approach in relation to preventive measures to deal with an imminent threat or to immediate action to contain damage. The reference in Article 8.3 to 'action taken', together with the requirement in Article 5.1 and 6.1, of 'without delay', suggests that action - particularly immediate action to avert or contain damage - is not meant to await decisions upon the responsibility for meeting costs of such work. For example, if this approach were taken, an operator might avoid taking preventive measures because the imminent threat was caused by a third party which subsequently led to serious environmental damage. The Scottish Executive considers that this would not be acceptable.

73. If the operator takes preventive and remedial measures in circumstances where third party is liable (Article 8.3 (a)), then it is appropriate that he should recover the costs from the third party. However, if the third party cannot be identified or is insolvent the operator will be unable to recover his costs. Where a defence is claimed that does not involve a third party (eg a permit defence), the operator may argue similarly that he should be able '…not to bear the costs of remediation…'. It may be argued that the defence is only workable if the competent authority were to refund the operator in such circumstances. A question then arises as to whether these costs should then fall to the CA or whether there should be a separate arrangement or requirement promoted for this purpose, in line with the market development expectation described in paragraph 23 above.

74. The Scottish Executive proposes that, where the operator is absent, insolvent or claims a defence, the test of whether he should bear the costs of, in particular, preventative or immediate measures, should not be delayed until after the preventative or immediate measures are actually undertaken by the operator. For such decisions in relation to remedial measures, it may be possible or preferable to have liability considered before the primary, complementary or compensatory measures are put in place.

The competent authority

75. It is the Scottish Executive's view that obliging the CA to reimburse the operator or otherwise bear the cost would be contrary to the intention of Articles 5.4 and 6.3 - which is not to impose on the CA an obligation to act but to allow it to exercise its discretion whether or not to do so. Such a requirement would undermine the competent authority's discretion. In effect, it would introduce Member State subsidiary liability, which is not a feature of ELD.

76. On the other hand, were the competent authority to exercise its discretion to undertake the necessary preventive or remedial measures then, if the defence(s) were available to the operator, the competent authority would not be entitled to recover its costs from the operator. It could, however, seek to recover costs from a culpable third party. Articles 8.2 and 10 of the Directive provides for such action being taken.

77. The final paragraph of Article 8.3, in so far as it refers to "Member States", suggests some general legislative provision through which, in appropriate cases, an operator could seek to recover costs it has unjustly borne. It appears to mean that Member States should have in place legal mechanisms to enable operators to recover costs from third parties in the circumstances described, rather than undertake specific action to assist recovery of costs in each case.

78. Article 8.2 provides that, subject to provisions on third party responsibility and permit & state of the art defences, the competent authority shall recover, inter alia, via security over property or other appropriate guarantees from the operator who has caused the damage or the imminent threat of damage, the costs it has incurred in relation to the preventive or remedial actions taken under this Directive.

79. However, ELD allows that the competent authority may decide not to recover the full costs where the expenditure required to do so would be greater than the recoverable sum or where the operator cannot be identified.

80. Article 8.2 underpins the "polluter pays" principle by ensuring that, if a competent authority should incur costs in taking preventive and remedial actions under the Directive, it should take appropriate measures to recover its costs. This may be found in existing regimes but goes further in allowing the competent authority to take security over property or by means of "other appropriate guarantees".

81. Existing regulatory regimes tend to recover costs of inspecting, approving, monitoring, etc out of fees charged for issuing licences and permits. However, 'costs' are defined in ELD to include the costs of assessing environmental damage or an imminent threat of such damage and alternatives for action by the operator or by the competent authority if it so decides. Also included are administrative, legal and enforcement costs, data collection and other general costs and monitoring and supervision costs. This goes beyond the costs of the actual work done to protect or remediate the environment. For some enforcement authorities, such 'internal' or 'administrative' costs may be absorbed currently into normal operating costs. ELD makes it clearer that such costs should be recovered, ie the polluter should pay.

82. Concerns have been expressed at the potential for cases to be challenged too readily, including in the courts. The time and effort of such work for both operator and CA would be a further demand upon staff and costs and an incentive for sensible brokering of casework. The requirement on CAs to recover all such costs brings also potentially the prospect of additional record-keeping and accounting processes which the Executive would be keen not to create, especially regarding the expected small number of cases. It is hard to judge what impact ELD accounting would cause although they would be included in the definition of costs that may be recovered. It has been suggested that arrangements for handling events under civil contingency procedures published by the Scottish Executive might provide a model for recording and recovering costs of actions in response to events dealt with under ELD.

Question 8
Do you agree the Scottish executive's approach?
Question 9
Can you suggest any practical way of settling liability for costs quickly, in advance of or immediately upon discovery of a threat or of damage?
Question 10
What arrangements would best meet the costs of prevention, remediation and other costs (including CA costs)?
Question 11
What provision, if any, should the transposing instrument include to require the establishment of such an arrangement?
Question 12
Can you offer any good practice in the management of casework and / or costs where a number of CAs and / or supporting authorities are involved?

D Cost allocation in cases of multiple party causation

84. Article 9 provides that the Directive is without prejudice to any provisions of national regulations concerning cost allocation in cases of multiple party causation, especially concerning the apportionment of liability between the producer and the user of a product.

85. This provision addresses the allocation of costs for liability incurred where it can be established

• that a number of operators have contributed to a case or have individually caused to the same resource or service significant environmental damage and
• that both the producer of a product and the user of that product have caused significant environmental damage.

86. There are traditionally and practically two ways of dealing with this. Under joint and several liability one of the parties may be held liable, who is then left to resolve the liability with his partners. On a proportionate basis, the liability is shared in some proportion among the partnership. The provision relies on the practice under national regulations.

Question 13
Which of the above 2 options do you think should be adopted, and why?

E Requests for action

87. Article 12 of the Directive provides that natural or legal persons affected or likely to be affected by environmental damage or having a sufficient interest in environmental decision making relating to the damage shall be entitled to send to the competent authority any observations relating to instances of environmental damage and shall be entitled to request the competent authority to take action under this Directive. 'Sufficient interest' shall be determined by the Member State and the interest of any environmental NGO shall be deemed sufficient for the purpose.

88. Where, as explained in the Directive, it is 'plausible' that environmental damage exists, the competent authority is required to consider any such observations and requests for action and give the relevant operator an opportunity to make his views known. The competent authority is to inform the persons who submitted observations of its decision to agree or refuse the request for action and provide the reasons for it. This provision largely reflects rights under existing law and is consistent with the principles of the Aarhus Convention.

89. The Directive allows Member States to decide not to apply this provision to cases of imminent threat of damage. We need to consider the discretion for Member States whether or not to adopt the rights and obligations in respect of cases of imminent threats.

90. On the one hand it is argued that applying the provision in this way could avoid engaging CAs in formal exchanges when time is short in assessing immediate threats. There is no suggestion that CAs should ignore observations received or refrain from consulting operators where necessary. However, requiring investigation of requests about imminent threats could create extra, and unnecessary, costs to both CAs and to businesses, if such requests were regularly made without a justifiable basis or if the threats to which they refer were perceptions rather than real. Both CA and operator would be required to devote resources to addressing the request for preventative action. Thus it may be best not to impose this as a requirement, but instead to leave it to the discretion of competent authorities as to how to react to informal requests. It is unlikely that competent authorities would ignore observations received wherever these appeared to have a sound basis for concern.

91. On the other hand, it could be argued that the discretion (ie not to apply Article 12 in relation to imminent threats) should not be adopted, in order to provide optimum protection for the environment.

Question 14
Do you think that the request for action provision of Article 12 should be reduced for cases of imminent threat and why?

F Competent authorities

92. Article 11 requires Member States to designate competent authorities. The Executive has not yet concluded its policy but the following reflects some of the discussions to date.

93. In principle, the fewer competent authorities there are, the easier it may be to achieve consistency and, for example, the simpler the cost recovery and reporting aspects will be. Where a body has only a limited role in ELD implementation it may be better to have it in a supporting role and not as a competent authority. Ideally the competent authority would have expertise in both the type of damage and the activity which has led to damage e.g. SEPA where there has been water damage by a PPC site.

94. The most relevant players appear to be SEPA, SNH and local authorities. Support will be required at times from Scottish Water, Health Protection Scotland, Scottish Ministers, Pesticide Safety Directorate, Health and Safety Executive, SE Fisheries Research Services, DTI (offshore processes), Transport Scotland and the Department for Transport (including Maritime and Coastguard Agency). We envisage support mechanisms being established along the lines of those in place and available as required under civil contingencies legislation. We would be pleased to have advice upon the need for any more specific structure, particularly in view of the relatively small number of cases expected to arise under ELD.

95. Ideally the interaction with existing regulation will be as smooth as possible. This is particularly important as not all environmental damage is relevant to the ELD. This means that, for example, an assessment of whether or not the incident is subject to the ELD does not have to be taken before preventative or immediate mitigating actions are taken by the relevant body. For immediate actions, responsibility would lie better with the regulatory body which deals with the activity. It will have an understanding of the activity and generally will have powers to take action whether or not the damage is ELD relevant.

96. As the CA may not necessarily have expertise in a particular field, the CA must be able to draw on the relevant experts. This could be as statutory consultees but certain aspects of the ELD may require immediate responses. Advice on whether something poses an imminent threat to human health, for example, could not be subject to a 4 week consultation period.

97. Ideally an operator would have one point of contact, not multiple contacts for an incident e.g. it would be unhelpful for a company to have to report an incident to SEPA for licence compliance and to another CA for an ELD imminent threat. There needs to be clarity over who will lead when multiple authorities are involved in a case, particularly if more than one is a competent authority.

98. As the ELD could lead to a considerable if infrequent financial burden on an operator, and to ensure that operators are treated fairly, a review or appeal process should be offered. Where remediation costs are high, the likelihood of appeal also may be high . See paragraph 101-102.

99. Particular attention needs to be given to the role of competent authority in the marine environment. Issues arise of coastal, inshore and offshore environment and of fishing, recreation, transport and conservation activity. Different requirements may exist according to the maritime limits and constitutional arrangements for managing and policing them. Those most likely to be considered as marine competent authorities for Scotland are SEPA and SNH, with SFPA, Scottish Executive Marine Laboratory and the Maritime Coastguard Agency as supporting authorities.

100. Scottish Ministers have reached no firm conclusion on designation of competent authorities. Given the probability of a limited number but (perhaps) large cases arising in Scotland , they are likely to favour the simplest practical structure with fewer rather than a greater number of CAs. Hence SEPA and SNH might be principal contenders as competent authorities, with Scottish local authorities fulfilling a supporting role (not least civil contingencies planning and contaminated land) and other bodies as subject matter requires.

Question 15
Do you agree or not the provisional thinking on CA roles?
Question 16
Is there any particular factor that should be reflected in the designation of competent authority and why?

G Appeals

101. The civil law approach to transposition of the ELD, whereby obligations to remediate damage are owed to the environment, exactly as provided for in the Directive, is a departure from the traditional process of offences, enforcement and penalties. For it to work effectively, there will have to be a constructive dialogue between operators and CAs. The reporting of an immediate threat and taking of immediate action to contain damage are expected of the operator, without delay.

102. Where dialogue fails to reach agreement on liability, defences or longer-term remediation measures, despite efforts on both sides, an independent process will be needed to hear the case. In advance of experience in practice, it is difficult to distinguish how much such a matter depends upon technical judgements and how much upon established custom and practice in the exercising of reasonable care.

Question 17
How would you wish to have appeals handled in the case of a dispute?
Question 18
Given the civil law approach, would you be willing to deal with such matters in court, say before the Sheriff; or to Scottish Ministers?
Question 19
Do you think that liability for longer-term remediation should be suspended while an appeal is heard?

H Remediation requirements

103. This sub-section considers the remediation requirements and objectives of the Directive and the means by which these are to be delivered.

Biodiversity and water

104. Paragraph 1 of Annex II of the ELD states:

"Remedying of environmental damage, in relation to water or protected species or natural habitats, is achieved through the restoration of the environment to its baseline condition by way of primary, complementary and compensatory remediation…"

105. The requirement is to enable protected species or natural habitat or both generally to (a) return to the point on the trajectory towards favourable conservation status which would have obtained but for the damage or (b) return to favourable conservation status (baseline condition). Where the damage is confined to a Natura 2000 site, the objective would be to restore the integrity of the site to its pre-damage (baseline) condition. Water would return to the status class that it demonstrated before damage occurred.

106. In respect of primary remediation, the ELD stipulates that:

"Options comprised of actions to directly restore the natural resources and services towards baseline condition on an accelerated time frame, or through natural recovery, shall be considered."

107. The method by which the damaged water or protected species or natural habitats are remediated to their pre-damage condition will depend on the specific circumstances of the damage and the resources or services impaired as a result.

108. The ELD recognises that it may not always be possible or cost effective to return the originally-damaged resource or service to its former state through primary remediation. It provides for "complementary remediation" where primary remediation is unable to return the original resource or service fully to its pre-damaged condition.

"Where primary remediation does not result in the restoration of the environment to its baseline condition, then complementary remediation will be undertaken…"

109. Paragraph 1.1.2 of the Annex states:

"The purpose of complementary remediation is to provide a similar level of natural resources and /or services, including, as appropriate, at an alternative site, as would have been provided if the damaged site had been returned to its baseline condition."

110. The "remediation" required by complementary remediation - whether at the site of the damage or, as indicated, an alternative site - is by way of enhancement of resources and/or services, ie, improving or increasing the resources and/or services.

111. For example, if the original damage could be remediated only to, say, 80% of its pre-damage condition, then the remaining 20% would be made up through complementary enhancements either to the site itself, or some alternative site. Where the complementary remediation is to be undertaken at an alternative site, the ELD indicates that as far as possible/practicable, the alternative site should be geographically linked to the damaged site.

112. The ELD has an additional "compensatory remediation" requirement. This is essentially compensation for the time the damaged resource and/or service is unable to provide its pre-damage function. Compensatory remediation is not payment of money but an additional environmental resource or service; and there is no compensation in ELD to individuals eg for personal loss. Its purpose is to compensate for the interim loss of natural resources and services pending recovery. A fundamental parameter of compensatory remediation, not shared by complementary remediation, is the time which is to be taken for the damaged resource and/or service to be fully restored. In all other respects - principles, type and location of remediation - it is identical to complementary remediation.

113. The ELD (Annex II) specifies that when determining the scale of complementary and compensatory remediation, the use of "resource-to-resource" or "service-to-service" equivalence shall be considered first. Under these approaches actions that provide natural resources and/or services of the same type, quality or quantity as those damaged shall be considered first. Where it is not possible to do so, then alternative natural resources and/or services shall be provided. For example, a reduction in quality could be offset by an increase in the quantity of remedial measures.

114. The ELD (Annex II) provides that if it is not possible to use the first choice resource-to-resource or service-to-service equivalence approaches, then alternative valuation techniques shall be used. It empowers the competent authority to prescribe the method and gives an example of such an approach - monetary valuation. It further provides that if valuation of the lost resources and/or services is practicable, but valuation of the replacement natural resources and/or services cannot be performed within a reasonable time-frame or at a reasonable cost, the competent authority may choose remedial measures of equivalent cost to the estimated monetary value of the lost natural resources and/or services.

115. Finally, the ELD specifies criteria against which options for remediation of environmental damage should be evaluated by the competent authority:

• the effect of each option on public health and safety
• the cost of implementing the option
• the likelihood of success of each option
• the extent to which each option will prevent future damage, and avoid collateral damage as a result of its implementation
• the extent to which each option benefits each component of the natural resource and/or service
• the extent to which each option takes account of relevant social, economic and cultural concerns and other relevant factors specific to the locality
• the length of time it will take for the restoration of the environmental damage to be effective
• the extent to which each option achieves the restoration of the site of environmental damage
• the geographical linkage to the damaged site.

116. The ELD further provides that when evaluating the different remedial options, primary remedial measures that do not fully restore the damaged protected species or natural habitat or that restore it more slowly may be chosen. This decision can be made only if the natural resources and/or services to be foregone at the primary site are compensated by increasing complementary and compensatory actions. This would serve to provide a similar level of natural resources and /or services as were foregone. The ELD gives an illustration of when such a decision might be taken - when the equivalent natural resources and/or services could be provided elsewhere at a local cost.

117. Whilst there will be operational options - choices to be made by the competent authority with regard to the remedial measures to be taken, and the balance between primary (natural recovery or through active intervention) and complementary remediation (taking account of the criteria listed under paragraph 115, above), there are no real transposition policy choices.

Land

118. Remediation of land damage is concerned with removal of the risk of adverse effects on human health. "Baseline" is not referred to in this context in the ELD. Paragraph 2 of Annex II states:

"The necessary measures shall be taken to ensure, as a minimum, that the relevant contaminants are removed, controlled, contained, or diminished so that the contaminated land, taking account of its current use or approved future use at the time of the damage, no longer poses any significant risk of adversely affecting human health."

119. Natural recovery is also permitted as an option, although complementary and compensatory remediation are not required in relation to land damage.

120. As for biodiversity and water, whilst there will be operational choices for the competent authority, there are no transposition policy options in this context.