Select Committee on Scottish Affairs Minutes of Evidence

Examination of witnesses (Questions 580 - 599)




  580. Can you explain what is "fairly limited"? What is "fairly limited" to some people may be crucial to others and many companies may be on the edge of viability and another cost could just tip them over the edge.
  (Dr Curran) It is very difficult to do. Again, if you were looking at a level playing field and if you were looking at the Environment Agency current charging scheme for abstraction, there is a very complex process there by which various factors are multiplied together to end up with an annual cost of having a licence. Those factors include a basic charge per unit volume of water abstracted, which varies across different areas of England and Wales. You multiply that by a source factor, what type of river it is or ground water that is being abstracted from. That is, quite simply, is it a supported source, are you having to introduce new water to keep that river running and then somebody else is taking it back out again, so I do not think that is going to be a very commonly used factor in Scotland. There is the season factor in that clearly if you are abstracting in the winter there is less likelihood of damage to the environment than if you are abstracting in the summer when there are low flows or low aquifer levels. There is a loss factor, is the abstracted water returned to the same river very shortly afterwards downstream or is it taken right out of the catchment? You can multiply these up and get typical charges. For the purpose of appearing before this Committee I did one example. I do not know if I should perhaps even mention it because the figures are very much estimates. I do not know how much reliance to put on these figures.

  581. They will be treated as such, but now that you have mentioned it we would be very disappointed if you did not.
  (Dr Curran) Since we have no role in abstraction control, or a very limited role in abstraction control at this stage, we have very little feel for the figures that might be used. We did estimate that a typical distillery, just by chance, may be abstracting 90 litres per second. The largest abstraction clearly is for cooling water. That figure may not mean much to you but it seems quite a significant amount of water to me. I have done my best to apply the Environment Agency charging scheme to that and I reckon, and I hope I have not made any mistakes, that the annual licence charge will be around about £1,000 a year for that. There is an application fee as well when you apply for a licence which is £110 at the moment. So when I say "limited", that is the kind of figure I have in mind for an industrial site like that. Clearly there will be large abstractors, like hydroelectric or public water suppliers, which will be abstracting very, very significant volumes and they may attract higher charges.

Mr Brown

  582. Obviously the Environment Agency have stated that they must pay special attention to the effects of any proposals on the economic and social wellbeing of rural communities. The fact that they are actually required to measure any impact of that policy on rural communities is important. Does SEPA have a similar responsibility and, in a general sense, how does SEPA draw a balance between the environmental, sustainable development and economic impacts of any proposals?
  (Ms Henton) Yes, we do have a general requirement to take into account such impacts. My colleague can explain a bit more about the process of licensing, for example.
  (Mr Mitchell) In terms of licensing discharges to the environment, and obviously there will be a similar sort of thing for abstractions, there is a cost benefit analysis generally done in terms of how much additional requirements will be needed to protect the environment. There are a number of overriding factors in terms of fixed emission limits if there are European Directives or something like that that drive these. In terms of legislation, generally we apply getting the best but not requiring excessive costs. Most licences are generally given in draft to the person to be authorised and there are discussions around what level of treatment will be required. In general if they come back and point out that this will cost them significant amounts, if this is an existing situation that will generally be phased. There are situations where the costs to the company are taken into account and if it is a drive towards a standard which is a best practice standard then generally that is phased.

Mrs Adams

  583. Some of these rural communities are very fragile indeed. I do declare an interest in that I am the Chair of the Scotch Whisky Group in Parliament. These areas sometimes depend greatly on the whisky industry. Who does strike a balance as to what comes first, the environment or the community that it sustains? Would you push it to the point where the whisky industry, for example, could no longer support that community and that community dies and, therefore, there is no need for water anyway if that happens? Who strikes that balance?
  (Ms Henton) That is a very interesting question and there is not a very straight forward answer to it. It is not something that is unique to the whisky industry.

  584. No, I gave that as an example.
  (Ms Henton) We face this from a number of other sectors, for example the marine aquaculture sector at the moment, fish farming. We have exactly the same question that comes from that because we authorise them in the same way as we authorise the Scotch whisky industry. To begin with there is basic European legislation, basic UK legislation, which has to be implemented and some of these are given, as Stewart has alluded to, some of them we have a degree of discretion over. We seek, as a matter of principle, as a protection agency to be fair, equable, to take into account all these issues that you have indicated. At the end of the day there is a process for appeals to Scottish Ministers built into all the regulation that we implement, so if the person who is going to be licensed feels that we have overstepped the mark, that we have not been fair, that it is inequitable, they have a right of appeal to Scottish Ministers and ultimately the decision does rest there.

Mr Tynan

  585. This is really just for clarification. You say you have 22 offices?
  (Ms Henton) Yes.

  586. And 750 staff?
  (Ms Henton) Yes.

  587. How many offices do you have in Scotland?
  (Ms Henton) They are all in Scotland.

  588. On the question of strict controls, what was said by Dr Curran was if there were no controls then anyone could abstract water. Could I pose a situation where natural mineral water is abstracted from the ground and there is very strict regulation as regards that abstraction and the quality of that water. I understood from one of the companies we visited they have some 300 acres of ground. Do you feel that it is necessary to protect the environment to the degree that you would seek to protect it on the basis of the company's co-operation as regards the abstraction of that mineral water and the tests that they have to ensure the purity of that water exists? Do you believe that it is necessary in comparison with other European countries, for example, for Scotland to have rigid application of licence applications?
  (Dr Curran) That is quite a wide ranging question. Again, if I can go back to the Water Framework Directive, which is obviously going to guide us in this area in the future, in the very first paragraph of it, it states "Water is not a commercial product like any other, but rather a heritage which must be protected, defended and treated as such". That is the whole basis of the Framework Directive. The fact that, if you like, the operator owns the whole catchment, or indeed the whole land surface covering an aquifer, does not remove the obligation to meet the objectives of that Directive which are largely ecological in content in that we have to maintain and improve the ecological status of the natural waters. As an agency we always try to work with industry, clearly that is easier. Taking a hypothetical example of a bottled water abstractor, they will certainly have an interest in protecting the quality of the water they wish to abstract from that aquifer and, therefore, they would have a clear interest in various pollutants not being able to enter that ground water and, again, that falls to us as the environmental regulator to control that. Equally, they would be interested in another operator not coming along and sinking another borehole into the same aquifer and abstracting the water that they would wish to bottle. I think there is a lot of argument bound up in your question. Am I being helpful or not?

  589. To a degree. Really we have a situation where, as the Chairman made the point, we could be at the margins as regards a company continuing to operate. If the regulation is too strong where it is not necessary it could be the difference between success or failure for that company. Obviously our concern and investigation is we are looking at employment in Scotland and you have considerable employment, 750 staff, but I am looking at a situation where a small company produces pure mineral water because, unlike other countries in Europe who do add to their natural mineral water and then sell it on to the UK, within Scotland that is not the case, so they have a vested interest in making sure of the purity of the water. I am wondering if that would be a light touch regulation as far as you are concerned and is that the way you would view it?
  (Dr Curran) It is a very difficult question to answer. There are requirements under the forthcoming Water Framework Directive and whether SEPA ends up as the competent authority or not we wait to see. There are requirements to meet the specific objectives of the Directive and to report them back to the Commission, so the Member States have to undertake those obligations or presumably they will be in trouble. Having said that, there are already controls in place to hopefully maintain the quality of that ground water, things like the Ground Water Regulations, the Nitrates Directive and so on, so perhaps I do not see the potential for the kind of difficulty you are suggesting. However controls may need to be put on the rate of abstraction in order to meet the environmental objectives of the forthcoming Framework Directive. If those controls drove below certain thresholds the amounts that could be abstracted and, therefore, made the industry unviable then it is very difficult to get around that in terms of the Directive. The only get-out clause I can think of is one that does relate to industries contributing to overall sustainable development and if arguments could be based on social or economic grounds under the term "sustainability" then perhaps there may be some sort of derogation from the fundamental requirements of the Directive. That is all I can proposition at this stage.
  (Mr Mitchell) Can I just add something which may be an advantage to industry if there is a system whereby there is some registration of discharges. If we take the example that you have given of this mineral drinks abstractor drawing from an aquifer, at the moment because he is unlicensed by SEPA presumably the environmental health will know about him but SEPA does not know about him. If there is any proposal by someone to either discharge something on the land which may affect him, or if there was a surface water abstractor, and there are many in Scotland, drawing drinking water or cooling water or even process water from rivers, if we know about that we can at least warn him that there has been some upstream incident which perhaps allowed a slug of pollution into the river, oil pollution or something, so he can protect his resource at that point and close off the intake or whatever, or make representations at the time when it happens. At the moment, because there is this unknown quantity as to where people are abstracting, whilst we endeavour to protect and warn of pollution incidents where we are aware of abstractors, if there was a more comprehensive system we might be able to act more comprehensively in the protection of their resources, which is obviously their business as well. So there is another side to the coin perhaps.

Sir Robert Smith

  590. You mentioned earlier in answer to the Chairman about in effect rationing the water if there was an over demand for a particular source and then you read out that charging scheme and I thought the implication was it was just to recover costs, but then it seemed to be very much aimed at rationing because in the summer you pay more than you do in the winter and if you are a high volume user you pay more. I cannot see how costs necessarily would relate to that.
  (Dr Curran) The figures I was quoting there, as I say, are very much estimates and are based on a pure cost recovery scheme, that is recovering the costs of administering and monitoring the abstraction control regime.

  591. Why would it cost more in the summer than in winter?
  (Dr Curran) Because you would have to go out and do more monitoring. If you were in a dry spell clearly you would need to be out in the streams or on the rivers actually monitoring the flow to see if you were getting below critical levels which would do environmental damage, ecological damage.

  592. When it comes to the rationing, if there is not enough water to go around who decides who gets first call? Is it first come first served?
  (Dr Curran) Again, the Environment Agency experience says something about that in that they do try, and I hope I am not misrepresenting them again, to take a fairly sensible approach in trying to marry both of those. If there is an existing abstraction then, to some extent, that deserves a priority. In terms of the Directive there would need to perhaps be notice given that conditions might change in the future to try to give operators or industry a lead-in time so that they could adjust their processes or build in some storage or adopt more efficient water usage, technologies and so on, so that adjustments could be made with time. Hopefully there would be nothing produced with immediate effect that would cause serious concern to operators.

Mr Clarke

  593. I am going to talk about effluent, discharge of industrial waste. We went to the Isle of Islay and there are a few distilleries there that have been pumping effluent into the sea for a long time, only for them to discover a circular came from the European Commission which was based, in their opinion, on what was being discharged in the Mediterranean rather than the North Sea. They thought that the imposition that was put on them was something that was not needed. They said that the area that they were dumping into was a bay and it was not detrimental to the molluscs because the fishermen said that they were catching bigger and better beasties than they had before. They have got to transport this and extend the pipeline in another direction into the sea and this is a cost to them. These island distilleries are very, very prone to costs because they are not on the mainland and everything is an extra burden on them. Here we have a situation where they think—this is what they said to us—this is of detriment to them and it is being forced on them not because of a North Sea problem or a West Coast problem but a Mediterranean problem. Do you feed back to the Ministers these concerns so that they can adjust accordingly or adapt accordingly these Directives?
  (Ms Henton) Perhaps if I could say a few words. First of all, none of us around here are totally familiar with the Islay situation. We are all aware of it but none of us here has actually dealt personally with it. If you want details of it we can supply that, there is no problem at all[4]


  594. I think that would be helpful.
  (Ms Henton) In terms of European Directives, this is a question that does generate a lot of debate obviously, but the fact is that the UK is a Member State of the European Union, it has signed up to these Directives and, as you are aware, they go through a very, very long process of discussion in the Commission, in the Parliament, before they reach agreement. At the end of the day the UK Government will be signed up to them. They then cascade through Westminster and through the Scottish Parliament in terms of actually implementing the legislation. We, as the body responsible for implementation of the legislation, seek to carry that out fairly, equably, openly, etc. We know that with some of the early Directives there have been difficulties and we do feed that information back both through our own sponsor department, the Scottish Executive, and also directly to the Commission, we are able to provide information to them. So where there are particular problems or anomalies caused by any of the Environmental Directives we do take those up through the appropriate channels. At the end of the day though there is legislation there which we are required to implement and, again, we do it as fairly and equably as we can. I hope that reassures you on that issue.
  (Mr Mitchell) Can I just add a slight addition to that. In terms of the Urban Waste Water Treatment Directive, which is to what you refer, there is specific provision in the Directive and in the ensuing regulations for Scotland which does make a separate allowance for discharges of industrial effluent which do not enter what are known as urban waster water treatment plants, basically sewage treatment plants. If there is a sewage works, for instance, which takes distillery effluent, and there are some, then the Directive requires specific conditions for sewage effluent which would have to be met. Where the distillery effluent discharges directly to the sea then the thing that governs the licence, and the Directive makes specific provision for this, is the Environmental Quality Standards. So, for somewhere like Islay, and I have to confess I am not familiar directly with what is going on there, the driver for the effluent standard would be the Environmental Quality Standard, not the Directive.

  Chairman: We do have some specific questions on policing of regulations later on. I think we will move on now because we still have some way to go and we have other witnesses and we are falling behind. Can I move on to the Control of Major Accident Hazards, the COMAH Regulations.

Sir Robert Smith

  595. Do you feel that the level of impact assessment and complexity of the information required by the Competent Authority (SEPA and HSE) appropriate to the risks involved in the whisky industry?
  (Mr Mitchell) I will try and answer that as best I can. We feel that it is appropriate. Where the whisky industry is located is often in some of the most environmentally sensitive areas in Scotland. If you take, for instance, the River Spey, the River Spey has a large concentration of the whisky industry and the River Spey itself is a special area of conservation for several species: salmon, otters, freshwater pearl mussels, these sorts of things. This is the first year of the COMAH Regulations so everyone is on a learning curve, industry as well as SEPA. The problem at the moment is that in our inspections of the distilleries where they find there is a shortfall at the moment is that whilst the distillers themselves have the health and safety aspects looked at, the trips and slips they have always looked at, where they have not gone is the extra little bit that the regulations require, to look at if they were to have a large spillage of spirit, a large fire, what would be the environmental consequences of that. We feel that they have not done that yet. There has been a lot of discussion with them and, so far as I am aware, they are co-operating and we are co-operating with them and giving them time to actually do these assessments.

  596. Do you have any experience of a major accident hazard in the whisky industry?
  (Mr Mitchell) I do not personally.

  597. Are there any records?
  (Mr Mitchell) There was certainly a very large incident in Kentucky last year which gave rise to significant environmental impact. I have no direct knowledge.

  598. Is Kentucky the only one?
  (Mr Mitchell) It is the only one I am aware of that springs to mind but I think there have been others. The regulations do not pick whisky as a source of control, the regulations set thresholds for the volume of flammable liquids stored, and whisky is a flammable liquid. The lower tier limit, I believe, is 5,000 tonnes. 5,000 tonnes of flammable liquid in one place, in a warehouse, is a significant risk on any standard.

  599. What sort of environmental consequences would there be of a discharge of spirit into the watercourse?
  (Mr Mitchell) Whisky has a very high oxygen demand. If it was to enter a watercourse it would denude the stream of the oxygen and the fish and the other life would be suffocated effectively.

4   See evidence, p. 191. Back

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