Select Committee on Environment, Transport and Regional Affairs Memoranda


Memorandum by The Wildlife Trusts (DWB 07)

1.  INTRODUCTION

  1.1  The Wildlife Trusts are a unique national partnership of 46 independent charities, the Urban Wildlife Partnership and Wildlife Watch, the junior branch.

  1.2  At a local level we are working to protect wildlife and natural places for future generations to enjoy. At a national level we join forces to influence decision-makers and put across our message. Together with more than 350,000 members, we form the largest voluntary group concerned with all aspects of wildlife conservation and environmental protection.

  1.3  Collectively, The Wildlife Trusts manage approximately 2,250 wetland habitats and 595 river reaches. Outside of our reserves the Otters and Rivers Project (OARP) deliver advice and practical expertise to riparian and wetland managers. In the past 18 months the OARP has carried out over 240 significant habitat enhancement schemes and visited over 740 landowners to provide habitat management advice. The Wildlife Trusts are strongly committed to the Biodiversity Action Plan (BAP) process, acting as a lead or joint lead partner for 23 Species Action Plans.

  1.4  The Wildlife Trusts welcome the publication of the draft Water Bill and this opportunity to give evidence to the Select Committee. We will also be submitting a response to the Government's consultation on the draft Bill. Our comments focus on five key areas:

    —  the spirit of the draft Bill;

    —  abstraction and impoundment issues;

    —  new regulatory arrangements;

    —  enhanced competition in the water industry; and

    —  economic instruments as a mechanism to protect water resources.

2.  THE SPIRIT OF THE BILL

  2.1  Although the published sections of the draft Water Bill focus on reforming the existing abstraction licensing system and financial regulatory structures The Wildlife Trusts believe that the draft Bill offers a real opportunity to address the wider aims of sustainable water resource management and holistic river basin management. These aims are both shared by water companies and the Environment Agency.

  2.2  Recent floods, the uncertainties of future climate change scenarios, and new European legislation mean that legislation being drafted now needs to take into account a wide range of issues and have a long term perspective. The structure and content of the draft Bill must support and reinforce other complementary legislation and policy such as the BAP process, Habitats Regulations and new Countryside and Rights of Way Act 2000.

  2.3  The Wildlife Trusts believe that the draft Bill should demonstrate the precautionary principle towards safeguarding the environment and be aspirational in what it is setting out to achieve. In other words the draft Bill needs to be structured in such a way as to encourage and support the enhancement of wetland habitats, a key requirement of the BAP process and the Water Framework Directive.[13]

  2.4  The draft Bill goes some way towards addressing some of these concerns but on the whole is a missed opportunity. In the specific areas of the Bill highlighted below, the Wildlife Trusts aim to demonstrate how it might be strengthened to deliver a more integrated approach to water resource management through better control of abstraction, encouraging demand management and placing sustainability at the heart of regulation.

3.  ABSTRACTION AND IMPOUNDMENT ISSUES

  3.1  On the whole, The Wildlife Trusts support the measures introduced in the draft legislation as long overdue. In particular The Wildlife Trusts welcome the prospect of curtailing or ending damaging abstractions, particularly those authorised as "Licences of Right". However, the current wording gives us great cause for concern. In Clause 17 the draft Bill removes the right to compensation for varying a licence "to protect any waters or under ground strata, or any flora and fauna dependent on them from serious damage". This measure, as currently drafted does nothing to support the precautionary principle. Would there have to be a demonstration of "serious damage" occurring before anything was done? How would serious damage be defined? The current wording is not acceptable.

  3.2  The Wildlife Trusts believe that the draft Bill should be constructed within the context of The Water Framework Directive which recognises the unique nature of water as a resource stating:

    "Water is not a commercial product like any other, but rather, a heritage which must be protected, defended and treated as such".[14]

  The Directive commits the Government to delivering surface and groundwaters of "Good Water Status", a definition that includes biological and quality elements. In order to achieve this aspiration the draft Bill must do more than protect against "serious damage" but rather deliver real improvements.

  3.3  The Countryside and Rights of Way Act 2000 implements a duty on all Government Departments to have regard to the purpose of conserving biological diversity in accordance with the Convention of Biological Diversity. The SoS and National Assembly for Wales must also take steps (and promote the taking of steps by others, to further the conservation of living organisms and habitats of principle importance for conserving biodiversity). The Bill as currently drafted goes against the spirit of this new piece of legislation if "serious damage" to flora and fauna must be demonstrated before action is taken. This may not be the intention, but it is not at all clear.

  3.4  The Wildlife Trusts feel strongly that the Environment Agency must be able to revoke abstractions that cause ecological damage to wetlands without being inhibited by concerns over compensation. The draft Bill goes some way to addressing this but the timescale (which gives 2012 as the cut off point for revocation of licences without compensation) gives us cause for concern as outlined below.

  3.5  The timescale for the review of consents affecting sites of international importance (SACs and SPAs) is to be completed imminently. This could mean that sites that are identified as being damaged by abstraction as part of the review process may not have damaging licences revoked until 2012 if the Agency does not have the resources to compensate the abstractor. The Wildlife Trusts understand that there are human rights issues surrounding the revocation of abstraction licences. However, the draft Bill could no more to facilitate the end of damaging abstractions through, for example, a duty on OFWAT to ensure it plays an active and effective part in efforts to manage the demand for water (and consequently reduce abstraction requirements). The necessary mechanism to enable it to do this is currently missing from the draft Bill (see Part 4 New Regulatory Arrangements).


4.  NEW REGULATORY ARRANGEMENTS

  4.1  By 2021 3.8 million new homes are planned with a projected increase of 20 per cent in per capita consumption of water. The Wildlife Trusts welcome new duty on water undertakers to conserve water (Clause 53) but we feel that as currently set out, the draft Bill is missing a vital opportunity to promote demand management. The draft Bill needs to take a wider perspective and set the context (through both regulation and guidance) to ensure the rising demand for water is properly managed in years to come.

  4.2  The draft Bill should introduce a new objective for OFWAT to secure the effective management of water demand by water companies (including giving OFWAT the ability to set mandatory demand management targets). The Wildlife Trusts agree with the Environment Audit Committee[15] that " . . . (water) companies do not have significant incentives to promote water efficiency" and support their conclusion that "there would be merit in investigating the feasibility of setting company-specific targets for domestic water use . . . " We believe that the draft Bill provides an ideal opportunity to drive this forward through a demand management objective. This is needed in addition to the new duty on water companies to conserve water, the provision for guidance on environmental matters from the SoS and the provision for the setting of standards of performance for the following reason:

  4.3  The Regulatory appraisal (section 3.17) states "where Government policy calls for intervention with significant financial implications for consumers or for the regulated companies, the Government has said that these should be taken forward by means of new legal provisions rather than seeking to act through guidance to the regulator". If the water industry is to fulfil its duty to conserve water, itself and by its customers, then there will be significant cost implications for the industry. This being the case, The Wildlife Trusts would support a new statutory objective for OFWAT as outlined in 4.2. The Wildlife Trusts welcome the fact that there will be guidance from the SoS on social and environmental matters. There should be guidance on the duties for further water conservation (both for companies themselves and customers) and standards of performance (which should include environmental standards of performance).

  4.4  The AMP 3 process demonstrated that the environment was a legitimate customer concern and The Wildlife Trusts believe these concerns were marginalised by OFWAT in the AMP 3 process. The draft Bill needs to define a specific role for OFWAT to bring together environmental and consumer concerns. This view is supported by the Environmental Audit Committee which recommends that "OFWAT must make further efforts to involve the full range of stakeholders beyond the quadripartite forum during the periodic review process".[16]

  4.5  The Wildlife Trusts welcome the setting up of the Water Advisory Panel and Consumer Council for Water through the draft Bill. It should be recognised that the rights of consumers extend not only to "value for money" but also the right to enjoy the nations heritage and environment. An individuals act of consumption affects others and therefore decisions regarding consumer rights must take into account wider public interest including our right of present and future generations to enjoy a rich, sustainable, wetland environment. Therefore The Wildlife Trusts believe that both the Advisory Panel and Consumer Council should have the consideration of environmental and social issues as their core remit. Consideration should also be given to the statutory appointment of at least one environmental representative along the lines of MAFF appointed Regional Flood Defence Committees.



5.  ENHANCED COMPETITION IN THE WATER INDUSTRY

  5.1  Competition is classified as "work in progress" but our key concerns are summarised as follows:

  5.2  The Wildlife Trusts support a better deal for consumers and more efficient use of water resources. Whilst The Wildlife Trusts do not oppose increased competition in the water industry, the efficiency savings and innovation sought must not be achieved at the expense of the environment. There remains a fundamental concern that the constant focus on driving down costs does not provide an economic signal to reinforce the message that water is a precious and limited resource.

  5.3  The Wildlife Trusts believe that the opening up of the water industry to greater competition poses new threats to the environment including:

    —  a significant increase in abstraction from under-utilised abstraction rights;

    —  the trading of abstraction rights across hydrological/hydrogeological boundaries, between industries with different treatment processes, with different losses and seasonal fluctuations;

    —  more inter-regional transfer schemes increasing energy consumption and

    —  non-domestic cross-border supplies and effluent disposal changing catchment effluent return patterns.

  5.4  The strong environmental safeguards required to deal with these threats poses a regulatory challenge that will require new powers and duties for the regulators and, if the Government's proposed regulatory changes in order to enhance competition are to contribute to the delivery of sustainable development, current educational schemes promoting the wise use of water must be expanded. Demand management programmes must be funded to ensure real progress in restricting the growth of individual water use and the adoption of best practice in industry. This can partly be achieved by regulation and partly by incentive.

  5.5  In parts 1-4 of this evidence The Wildlife Trusts have given our proposals as to how regulation (the draft water bill) could be framed to guard against some of the damaging environmental consequences that could result from enhanced competition. In section 6 below we outline how incentive charging may also bring benefits.

6.  ECONOMIC INSTRUMENTS AS A MECHANISM TO PROTECT WATER RESOURCES

  6.1  Applying economic instruments to water abstraction has been omitted from the draft Bill and is classified as "work in progress". The Wildlife Trusts responded to the Government consultation in April 2000 If measures are introduced as part of the draft Bill (and we believe they should be) the Wildlife Trusts outline below how we believe the Bill should be framed if it is to deliver some of the broader objectives outlined in part 1 of this memorandum.

  6.2  The Wildlife Trusts believe that without improved financial incentive charging at the point of abstraction, the Government and OFWAT will find it hard to make the water industry genuinely water efficient, even with the additional environmental duties proposed in part 4.2 above.

  6.3  The Wildlife Trusts are disappointed with the Government's decision to maintain a cost recovering charging scheme as outlined in their consultation April 2000. We strongly advocate that the costs of raw water should reflect the full environmental value of water and the sensitivity of the catchment from which abstraction is taking place. This is the basic tenet of the "polluter pays principle" that should be central to the regulation of environmentally damaging activities.

  6.4  Revenues raised above cost recovery would provide a valuable source of hypothecated revenue to fund a "water trust fund", promoting wise use of water, BAP driven river and wetland habitat restoration/creation projects and educational schemes.

  6.5  The trading of abstraction licences could play a very useful role in re-distributing water resources and ensuring the greatest economic return on the use of a precious and limited resource. However, the introduction of trading per se will not protect wetland habitats or contribute to the delivery of BAP targets unless it is conducted within strict guidelines and a strong regulatory system. The Wildlife Trusts are concerned about the reactivation of "sleeper licences" in order that the abstractor may profit.

December 2000


13   The Water Framework Directive requires member states to aim to achieve "Good Water Status" inland waters within 15 years of implementation. Back

14   Paragraph 1 of the Water Framework Directive joint text agreed by conciliation committee. Back

15   Paragraph 225-Environmental Audit Committee 7th Report-"Water prices and the Environment". Back

16   Paragraph 104-ibidBack


 
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