Select Committee on Environment, Transport and Regional Affairs Memoranda


Memorandum by the Royal Society for the Protection of Birds (RSPB) (DWB 24)

INTRODUCTION

  The Royal Society for the Protection of Birds welcomes this opportunity to present evidence to the Committee's inquiry into the draft Water Bill. The RSPB works for a healthy environment rich in birds and wildlife. It depends on the support and generosity of others to make a difference. The RSPB has considerable experience in water resources policy. With partner organisations, we highlighted Sites of Special Scientific Interest (SSSIs) threatened from over-abstraction in the High and Dry report in 1996(1)—and worked to ensure that action to protect many of these sites was incorporated into the National Environment Programme funded by the 1999 Water Price Review. We have made submissions to Government consultations on the reform of the abstraction licensing regime and utility regulation. We have commissioned policy research into the use of economic instruments for water abstraction.(2) We also responded to the more recent consultations on the introduction of Catchment Abstraction Management Strategies (CAMs), Competition in the Water Industry, and the use of economic instruments in water pricing. We address three main areas in our evidence:

    —  Abstraction and Impoundment.

    —  New Regulatory Arrangements.

    —  Other measures recommended for consideration in the draft Water Bill.

MAIN CONCLUSIONS

  1.  The RSPB supports much of the draft Bill's content. We particularly support the measures to reform our archaic abstraction licensing system that has been so damaging to our wetland heritage. We are also pleased that the draft Bill gives water companies an enforceable duty to further water conservation.

  2.  Sustainable water management must be at the heart of regulation. It is important that the regulators, and society as a whole, treats water as a heritage, as an invaluable natural resource, not as a commodity. Legislative reform on water is an infrequent occurrence, we should not have to wait another 10 years to get a sustainable regulatory system in place—we must get it right this time.

  3.  The draft Water Bill has had a long gestation. Many elements of it were consulted upon in 1997 and 1998.(3,4) Issuing the Water Bill as a draft further delays measures necessary to implement decisions already agreed by the Department for the Environment, Transport and the Regions (DETR) back in March 1999.(5) We are also concerned that the draft Bill has been released as an incomplete draft—adding further unnecessary delay.

  4.  The draft Bill does not, but should, include proposals on the important areas of using economic instruments for water abstraction or on competition in the water industry.

  5.  The draft Bill makes no reference to the EC Water Framework Directive(6) that will need to be transposed into UK law within the next three years. The Directive has important implications for water management in the UK and DETR's release of the draft Water Bill with no reference to the Directive could be considered short-sighted.

  6.  The draft Bill rightly establishes a new consumer objective for OFWAT but this should be balanced with an accompanying objective to protect the environment and further nature conservation.

  7.  A duty should be placed on OFWAT to ensure the effective management of water demand by water companies, including the ability to set mandatory demand management targets. The establishment of a Water Savings Trust, an independent body that could advise consumers on water efficiency, would support this.

IMPORTANCE OF THE DRAFT WATER BILL TO NATURE CONSERVATION

  Wetlands are remarkable environments for biodiversity—they support a rich and diverse array of birds, plants, insects, amphibians and mammals. Wetlands, such as lowland wet grassland, reedbeds, peatlands, and rivers, provide some of the richest wildlife habitats in the world. Wetlands are home to birds such as the bittern, redshank, lapwing and kingfisher. Wetlands also provide natural infrastructures for filtering and storing water, and controlling floods. They provide aesthetic and healthy landscapes for local communities and are often good places for wildlife tourism. Governments recognise the importance of wetland wildlife by providing designations to help protect and manage them both nationally and internationally—SSSIs, Special Protection Areas, Special Areas of Conservation, and Ramsar Sites. To maintain their viability and wildlife, wetlands require a reliable supply of clean water, either from underground sources or rivers and streams.

  The droughts of 1995 to 1997 illustrate just how vulnerable wetlands are. Many rivers suffered from low flows and many wetlands suffered from lowered water levels—adversely affecting wetland habitats, plants and animals.

  Delivering a robust and successful draft Water Bill will be fundamental to the protection of the environment in the face of increasing water demands, changes in the water industry and in the face of climate change. If the draft Water Bill does not incorporate the needs of wildlife sufficiently, then its implementation could endanger wetland habitats and species.

1.  ABSTRACTION AND IMPOUNDMENT

  1.1  In March 1999 the Government published Taking Water Responsibly outlining Government decisions following consultations on changes to the water abstraction licensing system in England and Wales. The RSPB welcomed this report, which included many of the policy and legislative changes we had been pressing for. The draft Bill includes all of the legislative measures necessary to implement the recommendations in Taking Water Responsibly. The RSPB particularly supports the following measures:

    (a)  the confirmation that all new licences will be time-limited (Clauses 10 and 11). In parallel to this we expect the Environment Agency to draw up a programme for converting all existing licences to a time-limited basis;

    (b)  to enable the Environment Agency to revoke an abstraction licence if it has not been used for four years (Clause 15);

    (c)  the removal of most exemptions from abstraction licensing (Clauses 2 and 4);

    (d)  to allow the license threshold to be varied in defined areas (Clause 3). We would suggest that the setting of any threshold should be linked with the Environment Agency's Catchment Abstraction Management Strategies (CAMs), which will identify the sustainability status of water resources within each catchment;

    (e)  the duties on water companies to make and agree publicly available drought plans (Clause 46). This should encourage a transparent emergency planning process, and as recommended by the Environment Select Committee in 1996 in it's First Report into Water Conservation and Supply(7) such plans should be subject to a strategic environmental assessment;

    (f)  an enforceable duty on water companies to further water conservation (Clause 53);

    (g)  the ability for the Environment Agency to enter into enforceable water management schemes with abstractors (Clauses 18 and 19). This should control abstractions that cause damage to important wildlife sites;

    (h)  the increased fines for water abstraction offences and the extra enforcement powers to deal with breaches of conditions (Clause 20). This would give the Agency the necessary teeth to enforce its duties.

  1.2  The RSPB does not believe, however, that another consultation was needed for these measures—they have already been consulted on twice before in 1997 and 1998 (our responses to both of these consultations are attached[24]). This has unnecessarily delayed the implementation of a more rational and sustainable licensing system.

  1.3  There are a number of measures that the draft Water Bill does not include but which the RSPB would recommend be incorporated:

    —  the duty to use water efficiently should be extended from water companies to cover all abstractors, such as industrial and agricultural abstractors. This was a proposed in Taking Water Responsibly and it is unfortunate that the Government has decided not to incorporate it into the draft Bill;

    —  a requirement that water resource plans produced by water companies, and approved by the Environment Agency, should be made publicly available. Such plans should consider all the options to meet demands for water in the long-term. This should encourage an open and transparent planning process, and as was recommended by the Environment Select Committee in 1996 in its First Report into Water Conservation and Supply such plans should be subject to a strategic environmental assessment.

  1.4  The RSPB welcomes the intention of Clause 17 to remove the right to compensation, from 2012, for curtailment of licences causing environmental damage. However, the RSPB:

    —  would prefer the date to be bought forward to 2008, in order to reverse more quickly the past and present environmental damage;

    —  is concerned that the removal of revocation is only applicable in those cases where "the Secretary of State is satisfied that the revocation or variation is necessary in order to protect any waters or underground strata, or any flora and fauna dependent on them, from serious damage". This will only serve to:

        (a)  add unnecessary additional burden and delay to the revocation of licences causing environmental damage, for example the term "serious damage" is very imprecise and open to interpretation; and

        (b)  prevent the Agency from "achieving conversion of existing licences to time-limited status", as recommended by the Government in Taking Water Responsibility (paragraph 7.13), because compensation will be payable for conversion of those licences not causing "serious damage".

  The Agency is already required under the Environment Act 1995 to secure the proper use of water resources and will be required to fulfil this duty when seeking revocation or variation of any licence.

  This will ensure that revocation or variation will only take place where the Agency feels unable to fulfil this duty. The RSPB, therefore, believes that the Government should end compensation for losses arising from the revocation or variation of all licences without a time limit.

  1.5  The RSPB is disappointed that the draft Bill does not include any proposals on the use of economic instruments for water abstraction. The RSPB agrees that the control of abstraction should continue to be based on a regulatory approach, since regulations can ensure that environmental standards are met. However, to encourage greater efficiency of water use we believe that the use of economic instruments, in the form of incentive charging, should be introduced to complement regulation.

  1.6  DETR considered options for introducing economic instruments on abstraction licensing in the 1997 and 1998 consultations on abstraction licensing. This considered the role of incentive charging and trading in abstraction licences. In May 2000 it published a further consultation on the use of economic instruments in water abstraction.(8) This proposed the introduction of trading and largely ruled out any role for incentive charging. The RSPB has significant concerns over their proposal for trading. In 1997 we commissioned Cranfield and Middlesex Universities to research the practical implications of introducing tradeable permits.2 This reported that trading could result in greater take-up of sleeper licences which will lead to reduced flows and levels in rivers and drainage systems. It also showed that the seasonal, fluctuating and uncertain nature of supply and demand for water would introduce complexities into any trading system. This suggests that trading will only be possible within a limited number of catchments and only on a local scale consistent with the nature of water supply so that no adverse environmental effects would result. In any event trading of licences must not be allowed to proceed until the Environment Agency's Catchment Abstraction Management Strategies have been rolled out to all catchments to establish a robust environmental "requirement" for water. Only once the sustainability of a catchment has been defined can trading be used to determine the efficient allocation of water.

  1.7  In any event, it is likely that trading will only be possible in about 5 per cent of catchments. The RSPB, therefore, supports the intelligent use of incentive charging to encourage the efficient use of water—for example by pricing water closer to its environmental cost and charging water at different rates in different areas and seasons. This draft Bill does not include anything on licence trading nor on incentive charging—a major omission when they could substantially change the way water resources are managed.

2.  NEW REGULATORY ARRANGEMENTS

  2.1  We welcome the establishment of a truly independent "Consumer Council for Water" (Clauses 23, 31 and 35) as long as it will represent all water consumers and not just those who complain or contact it—as tended to be the case with OFWAT's National Customer Council. The four million members of environmental organisations are also water consumers and they expect to see a consumer organisation championing their interests to ensure water is managed to protect and enhance our wetlands. A clean, sustainable, water environment, rich in wildlife is also in the interests of all water consumers. We, therefore, welcome the definition of "consumers" to include both existing and future consumers. Future, and existing, consumers will be keen that the regulator oversees the sustainable use of water by the water industry so that there is sufficient and clean water for their future use. To be truly representative of all consumers the new Consumer Council must:

    —  be given sufficient resources to undertake robust consultation and research of consumers' views, rather than base their views of consumer interests on those who write in to complain;

    —  be given an environmental duty to complement and balance its duties to protect consumers;

    —  be given a duty to ensure water companies further water conservation and promote the adoption of demand management measures. It is in all consumers' interests for water resources to be used efficiently—it reduces the cost of treatment and of further resource development;

    —  includes in its membership representation from all types of consumer, including those who can represent the needs of the environment.

  22.  The new checks and balances on the Director General of OFWAT, in the form of the Water Advisory Panel (Clause 22) are welcome. This should be complemented by the introduction of a new environmental objective on OFWAT to balance with the new "consumer objective" outlined in the draft Bill. The RSPB, therefore, recommends that:

    —  the Director General be given a new environmental objective "to protect the interests of the environment and to help achieve sustainable water management";

    —  the Water Advisory Panel includes someone who can represent environmental interests. Such a representative will be able to advise the Director General on environmental matters relevant to water undertakers.

  2.3  The RSPB welcomes the development of guidance by DETR and the National Assembly for Wales on social and environmental matters (Clause 28). To be effective it is important that:

    —  the draft Bill specifies that the Secretary of State and the Welsh Assembly shall be required to consult the Environment Agency and English Nature/Countryside Council for Wales before issuing guidance to the Director on environmental matters (clause 28, section (3));

    —  the Director General is required to ensure its actions promote and further, rather than simply "have regard to", the guidance (clause 28 section 3).

  2.4  The new Consumer Objective requires OFWAT (and the Secretary of State and NAW) to promote consumers' interests, "wherever appropriate by promoting effective competition". One glaring omission in the draft Bill is the absence of any indication as to what form that competition will take. DETR produced a consultation on competition in the water industry in April 2000(9), their response to comments has yet to be published. The RSPB has some serious misgivings about extending competition to the management of a scarce and valuable resource and about the absence, thus far, of any environmental assessment of its implications.

  2.5  While OFWAT and the water companies have a duty to further water conservation, they do not have a duty to promote demand management. Other than leakage targets, there are no enforceable targets for adopting demand management measures like water re-use/recycle systems, metering etc. The adoption of mandatory leakage targets has had the effect of focusing company attention in the last five years, to the extent that 1,806 million litres of water are now saved per day. A targeted approach to encouraging other techniques could save many million litres more—to the benefit of the environment and the long-term interests of consumers.

  2.6  The establishment of an independent Water Savings Trust (following the model of the Energy Savings Trust) would make a valuable contribution to water management. It could provide impartial advice on water efficiency and demand management measures to domestic and industrial consumers and run public information campaigns on the importance of water saving. Not having any association with the water companies or with any of the water regulators would have clear advantages. The RSPB and others have continually called for such a body for many years, first promoting the idea through a private members bill in 1995. The Environment Select Committee in its 1996 First Report on Water Conservation and Supply believed that there was "a strong case for establishing a national body which will campaign for the sustainable and efficient use of water in the home and industry" and "called upon Government to seek agreement . . . concerning the funding of this body and to introduce the necessary legislation at the earliest opportunity." DETR have ignored these calls and there is a danger that another opportunity will have been lost.

3.  OTHER MEASURES RECOMMENDED FOR CONSIDERATION IN THE DRAFT WATER BILL

  3.1  Integration of policies on water quality, flood protection, wildlife, and water resources is crucial to the achievement of sustainable water management. All these policies are linked through the water cycle but at present we manage them as individual functions, compartmentalising the water cycle rather than making the links. The Water Framework Director requires Member States to establish river basin management plans in order to make these links and achieve "good ecological status" for all waters. The draft Water Bill makes no reference to the need to transpose the directive into UK law. The draft Bill could act as a crucial step to move towards what the Directive requires the UK to do—instead it has merely tinkered with our existing legislation. Legislative reform on water is an infrequent occurrence, we should not have to wait another ten years to get a sustainable regulatory system in place—we must get it right this time.

  3.2  The Countryside and Rights of Way Act 2000 provides a statutory underpinning to the achievement of biodiversity action plan targets. That requires DETR, DTI and their agencies (including OFWAT and the Environment Agency) to have regard to environmental enhancement and not just of the environmental status quo. How water resources are managed is fundamental to the restoration and creation of wetland habitats like grazing marsh and reedbeds (both priority biodiversity action plan habitats). In order to meet the requirements of the Countryside and Rights of Way Act 2000:

    —  The Environment Agency Catchment Abstraction Management Strategies should be required to allocate enough water in appropriate catchments to allow for wetland creation in addition to protecting the existing environment.

    —  OFWAT, through the price review mechanism, should allow water companies to help fund the creation of wetlands that provide a water quality and/or water resource function.

  It is unfortunate that the draft Water Bill provides no guidance to regulators on how they should incorporate biodiversity targets into their work plans and strategies.

  3.3  The future of the British economy depends on an energy, transport, communications and water infrastructure to deliver competitiveness, jobs, a decent society and a healthy environment. The water sector faces enormous challenges and future environmental pressures may be more challenging than most currently allow for, as the recent floods serve to illustrate. The present water industry regulatory system stifles creative thinking and imposes unsustainable end-of-pipe remedies to our water problems—closing a borehole or building a new sewer. For example, in the 1999 price review OFWAT approved £1.7 billion of spending on "solving" the urban flooding problem by installing even bigger drainage pipes which simply pushes the flooding problem from one bottleneck to another downstream. The National Environment Programme approved by OFWAT in the 1999 price review is largely about the mitigation of environmental problems bought about by managing the water cycle in an unsustainable way rather than tackling the underlying problems themselves.

  3.4  The regulatory system pressurises the water industry to agree large capital investment projects with hard engineering solutions. This prevents the adoption of innovative and sustainable solutions to water management problems—deterring water companies from the flexible and partnership responses needed to cope with future challenges, of which climate change looms large. Such measures could include:

    —  promotion of grey-water recycling systems within new development;

    —  restoration and creation of wetlands within floodplains which reduce flood risk, improve water supply security and water quality and enhances biodiversity;

    —  promotion of low-input farming systems to reduce the high cost of treating drinking water contaminated with pesticide and nitrates—estimated at over £136 million per year (10).

  3.5  The draft Water Bill only tinkers at the edges in altering the current regulatory regime to deliver sustainable water management. We urge the Government to undertake a more wholescale assessment of the water industry regulatory regime towards one which rewards efficient and creative thinking and which is focused on environmental results, not inputs.

January 2001

REFERENCES

  1.  Biodiversity Challenge, 1996 High and Dry: the impact on wildlife of taking too much water from our environment.

  2.  Cranfield University and Middlesex University 1997 Practical Implications of Introducing Tradeable permits for Water Abstraction: Report to the RSPB.

  3.  DETR 1997 Review of the Abstraction Licensing System in England Wales.

  4.  DETR 1998 The Review of the Abstraction Licensing System in England and Wales; consultation paper.

  5.  DETR 1999 Taking Water Responsibly: Government Decisions following consultation on changes to the water abstraction licensing system in England and Wales.

  6.  CEC, 2000 Water Framework Directive, Directive 2000/60/EC. Brussels.

  7.  Environment Committee, 1996 First Report into Water Conservation and Supply.

  8.  DETR 2000 Economic Instruments in Relaton to Water Abstraction.

  9.  DETR 2000 Competition in the Water Industry in England and Wales.

  10.  Pretty JN, Brett C, Gee D, Hine RE, Mason CF, Morison JIL, Raven H, Rayment MD and van der Bijl G, 2000 As assessment of the total external costs of UK agriculture. Agriculture Systems.


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