Examination of witnesses (Questions 600
WEDNESDAY 28 FEBRUARY 2001
and MR STEWART
600. Would there be any long-term effect?
(Mr Mitchell) It would not be long-term in the sense
of, for instance, if there was a toxic material discharged which
may then have an effect in the sediment. It would be something
which would happen and it would pass and the stream would recover
but in that time there may be some threatened species which may
not recover because of the population that is there.
601. So from the point of view of the watercourse
it would be better to let it burn from the point of view of health
and safety but you would want to control it?
(Mr Mitchell) I think in general for both health and
safety and for the environment, the preference would be to let
602. Under the Regulations, most of the malt
distillers fall into the so-called "lower-tier", ie
lower risk, category. SEPA has been visiting almost all the lower-tier
sites, for which obviously charges are made. To what extent might
it be argued that this enforcement programme, and the attendant
costs, are disproportionate to the risks?
(Mr Mitchell) I cannot actually answer that question
very well. The risks are obviously very high. The fact that we
have not had an incident does not mean to say that there is not
a risk there. The environment is very sensitive. At the moment
all of these distilleries are being visited this year. This is
the first year of the Regulations, so they are being visited this
year. Because of the situation we find where there has not been
a full system in place to look at what the impact may be there
may be a further single visit next year to every premises, but
thereafter, once the systems are in place and the risks have been
identified, I imagine that the frequency of inspections will be
much reduced. In terms of the cost, the cost is directly attributable
to the inspections.
603. The start-up costs?
(Mr Mitchell) Start-up costs.
Chairman: We now come to the policing of regulations.
604. Eric has very kindly asked half of my questions
about the policing of regulations. There are a number of criticisms
from whisky producers about what they considered to be an unduly
rigorous approach by SEPA in terms of policing their industry,
particularly with regard to effluent disposal, and Eric has raised
this point with you. One repeated comment concerned SEPA's interpretation
of European Directives, especially the Waste Water Directive,
which it was argued was blanket legislation aimed at cleaning
up parts of Southern Europe. Extrapolating the requirements of
the Directive onto parts of Scotland where there was no major
pollution was thought by some to be both costly and counterproductive.
The industry was concerned that granting of consents to discharge
trade effluent was not always based on scientific evidence of
harm to the receiving water. The industry had something of a persecution
complex, arguing that it felt itself to be an easy target for
SEPA who seemed to adopt a hardline approach. Can I ask you this
question: how would you respond to criticisms from the whisky
industry that in terms of Scotland you are pursuing the letter
rather than the spirit of relevant European directives? Is there
any inconsistency of approach both within and across the SEPA
(Ms Henton) I think I will start that question and
then I will hand over to my colleague for some of the detail.
I find the terminology there unfortunate. I think to say that
we are, in effect, picking out one particular sector for attention
over and above others is frankly unfair, it is not true. We seek
to implement all the legislation fairly and equably across all
sectors. I suppose the measure of the success of that is that
everybody complains about being regulated to some degree or another
but the fact is that it is our job to protect Scotland's environment
and we do that. We try, wherever possible, to exercise a light
tough but it is not always possible to do that because of the
nature of the particular bits of legislation. I would certainly
refute the suggestion that their sector, the whisky sector, has
been in any way selected for treatment which is different from
any other industrial sector.
(Mr Mitchell) Perhaps if I could look at the aspect
where you mentioned that the consent conditions are not based
on scientific information. There is a Directive, the Freshwater
Fisheries Directive, which sets a limit on how much the temperature
of the river can rise as compared to upstream and downstream from
the discharge of, say, cooling water and that is 1.5 degrees.
There are a number of stories of small watercourses that breach
that limit by quite a bit. Even on some of the larger streams,
the larger rivers like the Dulnain and the Fiddach, which are
tributaries of the River Spey, that does happen. We have sought
to enforce that limit with the distillers, but since they have
come to us and said they do not agree that this is necessary there
has been a research programme which they themselves are doing
looking at the life cycle of the salmon to try to see whether
there is any effect. As a result of that we have set conditions,
which are basically standstill conditions for the moment, until
this research programme is finished. I feel that we are basing
our judgments on scientific information and not just by the letter
of the law.
605. I can understand how you feel in responding
to this question but unfortunately this was the view of the whisky
producers and this was not the view of one here or there, this
was almost a unanimous view. It might be the case that there is
this lack of consultation and that is why I want to ask this question.
What consultation does SEPA have with the drinks' industry in
Scotland in order to develop efficient environmentally sound practices
which do not incur undue economic or bureaucratic costs?
(Ms Henton) We have both, if you like, strategic level
discussions with the industry and we have very much local level
discussions, it operates on both terms. We have at least an annual
meeting with the Scotch Whisky Association where they come in
and meet the Chairman, myself, and any other appropriate senior
staff. That has gone on ever since SEPA was started and it is
a very useful forum for exchanging views and information. It allows
us to keep them abreast of what is happening and what is coming
along on the lines of legislation, it allows us to hear their
concerns, and we do listen to them. I think by far the greatest
contact that we have with the industry takes place pretty much
on a day-to-day basis. My colleague has explained the sorts of
things that come out of specific applications. I know also that
we meet, for example, the Malt Whisky Association and we have
had extensive discussions with them. I think I am right in saying
that we have certainly for industry in general laid on seminars
explaining things like COMAH. When COMAH was a new piece of legislation
we went round and laid on seminars and explained exactly how it
is going to work and impact on different industries. I think the
amount of contact we have with the industry is high. That goes
for most industrial sectors, I would not pick this sector out
as being any different from any of the other major industrial
sectors in Scotland. Stewart, do you want to elaborate?
(Mr Mitchell) No, I do not think there is more to
(Dr Curran) We also have a joint study with the industry
looking at the toxicity of distillery effluent as well which is
being run on Skye and we can certainly provide you with information
relating to that, the major toxic element being the dissolved
copper of course. Again, just to emphasise the standard that is
set against that is based on a range of tests that have been done
for the toxicity of that particular element in the natural environment,
so there are sound scientific bases for the standards that are
606. Obviously there is a difference of opinion,
the industry has one view and you have firmly another view that
you have a high level of consultation with the industry. How can
we build this trust and mutual understanding between the industry
and SEPA and allay their fears that SEPA is heavy and hard on
(Ms Henton) Our door is open at any time for them
to come and have further discussion with us. There is no problem
with that. They are welcome to come and put those concerns to
us in person again if they feel that this has not been addressed
adequately. Again, through the individual applications for consent
and for authorisation built into all of those is the appeals procedure
if they really feel that we have been unfair in any way or the
conditions that we are imposing are not the correct ones, they
do have an appeal mechanism.
607. Following up on Mohammed Sarwar's point,
no one would dispute that it is your duty to protect Scotland's
environment, the suggestion being made to us is what is the end
result of this, do we just make Scotland one big national park
and close down all industry and lead a very, very green lifestyle,
with everyone unemployed, or do we get a proper balance? It was
not just the big companies who made the point to us, as Mr Sarwar
said, it was an unanimous views. We visited many companies, small
independent companies and in one case we were told the cost would
be £5,000 a year and this was a significant factor about
whether or not they decided to stay in business. There was a general
feeling that the whisky industry thought it was being seen as
a soft target because it was regarded as making substantial profits
and it was an easy one to hit, again and again and again. There
also was a very strong feeling of inconsistency of approach by
SEPA across the regions. Mr Sarwar did ask that question and I
do not think we got an answer.
(Ms Henton) Sorry, I did not pick up that bit on inconsistency.
I presume by that you mean inconsistency in the standards that
608. Yes, in different regions.
(Ms Henton) That is something that we are very aware
of in SEPA. If I might step back a bit to how SEPA came into being,
it was only five years ago, although it seems much longer, the
fact, inevitably, of bringing together seven river purification
boards, islands, councils and people from local authorities has
been a major exercise in trying to make this all into one organisation
that is entirely consistent in everything it does. We know that
we have not fully managed that, although we have achieved an awful
lot over the years. There was a recent report carried out by the
Audit Commission in Scotland into SEPA looking at this very issue
of consistency and they have picked up and made some very helpful
comments about it. We have also acknowledged this and are dealing
with it through a major reorganisation that we are undertaking
at this very moment, whereby we are going to go away from having
the three regions, which we currently haveand the whisky
industry is primarily situated in our north and west regionsand
we are going to bring all of the operational side of our business
together under one directorate. We are convinced that this will
finally lay to rest the issue of consistency, because we will
be able to better control the way that we deal with specific issues.
If I was to come back here in one year's time hopefully we would
not hear what complaint from people.
Chairman: Mr Clark referred to Islay and we
were told there that the cost of building a new outlet was something
between £400,000 and £500,000 and the added cost of
transporting it was something like £5 litre. Again it was
getting to the point, is it worth doing or is it better just to
609. The concerns were not just for the industry
itself but were we having a greater impact on the environment
by putting the affluent in the tankers and taking it all the way
across the island. The roads are quite fragile on the island,
as well as the rest of the environment. Here we have a situation
where each distillery put its affluent into the seawe are
not close to other landand now they have to put it in tankers
and take it from one end of the island to the other end of the
island. This is obviously having an impact on the road, it was
having an impact on the fuel they used and the cost of the fuel
they used. It was having an impact on the industry itself because
they did have to build this pipeline at Keills out into the Sound
at Jura. They were at the point of saying, "Is this worth
it any longer?" You also have to measure that against the
fact that this island is very fragile, it has 50 per cent unemployment
at the moment. It is very, very dependent on the whisky industry.
If the whisky industry goes from that island we might not have
to worry about the people that are there at all. What was levelled
at us was in this country, and we meant the whole of the United
Kingdom by that, we tend to take the very letter of the law sometimes
rather than the spirit of the law, whereby our European neighbours
tend to be a bit more relaxed about it, and take the spirit of
the law rather than the letter of the law and that has never left
us on a level playing field. This is a bone of contention with
the drinks industry anyway in the United Kingdom, that they are
not in a level playing field, and here was something else to add
to that. There was a multiplicity of questions from the islanders,
and it was not just from one. We spent two days on the island
speaking to all sorts of people and we were getting all of these
concerns from them.
(Ms Henton) You raise a number of issues there. I
think in terms of the island discharge itself, because none of
us around this table are familiar with the island in person, the
best thing is I can send you written information, as promised,
setting out the thinking behind why the authorisation was given
the way it was.
610. That would be helpful. The Treasury gets
something like £100m or £150m in taxation revenues from
that one island. If that was to be lost that affects everyone
in the country.
(Ms Henton) There are two wider points of principle,
the first one was the question the Chairman asked, do we want
to turn Scotland into a green theme park and nothing else. That
is certainly not our intention, no way did that ever enter into
our thinking. What we have to do is to recognise that the use
of natural resources, and that includes actually using the capacity
of the water, air and land to absorb pollution, can be over-stretched
in cases. We have to protect the ability of the land to absorb
pollution. There is a principle, it is not a terminology I like,
the shorthand version is that "polluter pays", people
tend to see that as a principle that means that you just pay hard
cash up front for charges. It goes deeper than that, it is the
principle that if you are using natural resources in any way that,
for example, the cost of building an affluent treatment plant
to treat the effluent from that process is part of the payment
you make for being able to use that natural resource. The "polluter
pays" principle is strongly enshrined both in United Kingdom
and European legislation. Obviously, again, we seek to protect
Scotland's environment, firstly so that people can use the natural
resources for industry, that there is clean water to drink. There
is the aesthetic value of having a nice environment. There is
also, very importantly, we heard it earlier from Scottish Enterprise,
the brand image. A lot of the protection of waters, the pristine
waters, the pretty pictures we see of the lochs and rivers it
is our job to make sure they stay reasonable and nice and that
people have a decent environment in which to live in an urban
situation. To move on to the European question, I am not going
to comment on how other European countries do or do not implement
European legislation, suffice it to say that the Commission itself
has taken very considerable interest in this over the last few
years and the European Fifth Action Programme on the Environment
is now evolving into the Sixth Action Programme and, as far as
we can judge from what is proposed, one of the key parts of the
Sixth Action Programme is actually to see that the European Directives
which have been passed are properly implemented across Europe.
The infraction proceedings, as they are called, that are being
issued to all European countries, not just the UK, although the
UK does receive a proportion of them, are being issued on all
Member States who are not implementing environmental legislation
adequately. I know there is a perception around but I think things
are actually changing and in the next few years you will find
that perception really has very little truth behind it.
Chairman: Again, we will see but I think we
are all suspicious. You will be relieved to hear that we have
only two questions left.
611. Obviously we have covered a great deal
this morning but I must say that as far as your assurance that
the environment is protected is something we share and there is
no alternative to the protection of the environment. My question
is where we have an industry which is environmentally friendly
to a great degree and depends on ensuring the purity of their
product and regulates itself in that direction then obviously
they have concerns as regards over-regulation in that respect.
Do you see SEPA as a "regulator" or as a "maker"
of environmental policy?
(Ms Henton) Primarily we are a regulator, that is
our prime role, but we also have a very strong role in what I
would loosely call "education". We can achieve a tremendous
amount through straight forward application of the law but some
of the greatest achievements that we have and the greatest improvements
have been in areas where we have worked, for example, in partnership
with others, where we have worked with local authorities, particularly
through, for example, the land use planning system. Very often
you can actually achieve more by getting certain things put in
a certain place and not another one much more effectively than
you ever can by going in and putting very strict conditions on
something that is inappropriately sited. Regulation is the base
line. Effective, well understood, firm regulation is something
that most industries welcome. We know this because they tell us
so. It gives them the sort of back-stop against which they can
plan to move forward. We do have a bigger role in putting information
into the public domain and raising public awareness and in achieving
things through working in partnership. Sorry, you asked me another
part of the question.
612. Are you a regulator or an environmental
(Ms Henton) It is this word "policy" that
causes the problem because what is policy and where does it come
from? Environmental policy is set at a governmental level and
really on environmental issues very much set at a European level,
so we do not make environmental policy per se, that comes
from Europe and from Westminster and from Holyrood. We certainly
have a route into trying to influence the way that things evolve
in the future because of our experience. We know what goes on
on the ground, we know what the issues are, we can foresee what
the up and coming problems are. It is part of our job to advise
Government, in this case through the Scottish Executive, that
we think they should be doing this or that to ensure that Scotland's
environment is properly protected in the future.
613. Can I just develop that. Obviously you
are a regulator and that is your prime function, to make sure
the regulations are applied, but how much latitude do you have
as regards regulation? I will give you an example of that. The
whisky industry has large storage areas where whisky is being
matured in casks and obviously a lot of money is tied up in that
industry and they have to ensure there is not any damage and they
constantly examine the barrels and the conditions in which the
whisky is maturing. My understanding is that one of the conditions
that might have to be applied as far as regulation is concerned
is that they would have to put in a sprinkler system that would
cover the whole area of the storage of that whisky. They see that
as something that will be very, very expensive and will be at
enormous cost to their industry. Would you have licence under
those circumstances to decide not to apply the regulation or would
you have to apply the regulation in that type of instance?
(Ms Henton) I will ask my colleague to answer the
detailed question but I suspect sprinkler systems are I
do not know.
(Mr Mitchell) If I can surmise where that may come
from, that is probably from the COMAH Regulations and the COMAH
Regulations do not require sprinkler systems. This would be something
which would come from a risk analysis of the site. If there was
a particularly sensitive site and a particularly high risk of
fire, say, or explosion then presumably that would call for the
need to have some sort of preventative measure. In answer to your
question it is probably true to say that there is some latitude
within SEPA. The COMAH Regulations are not entirely regulated
wholly by SEPA, it is what is known as a Joint Competent Authority,
which is the Health and Safety Executive with SEPA, so there would
have to be some sort of joint agreement on that. There would be
the ability to look at the risks and discuss them with the operator
614. The reason I am asking is obviously it
is within the producer's remit to make sure that they protect
the stock that they have and they do all they possibly can under
these circumstances. When working in partnership with that kind
of producer as regards that they would see that as a step forward
because there are some concerns there. You made the point as regards
funding of SEPA and I would like to ask you to what degree of
monitoring and auditing is SEPA subjected with regard to the fees
it charges and the number of inspections it undertakes of companies
with a good track record of regulation compliance?
(Ms Henton) SEPA operates a number of charging schemes.
I think there are at least ten different charging schemes that
apply to each bit of legislation. If the Committee would like
details of the number of charging schemes I can certainly supply
that. We are required by Parliament to recover costs on our charging
schemes and that is all. Each scheme is different, regrettably,
from the other and that does make for quite complex monitoring
of them. We are at the point where we are virtually cost recovering
on all the schemes but not quite, on some of the radioactive substances
schemes we are not quite at full cost recovery yet.
615. Cost recovery is an aspect of SEPA, they
have to break even. Would that mean that on the basis of the costs
they would need to recover they would decide the number of visits
or would it be the regulations that are required to be applied
that would decide that?
(Ms Henton) The regulations decide that. The only
scheme where the costs are directly related to the number of visits
that we make is the COMAH scheme.
616. Who actually monitors and audits these
visits and charges? Is it SEPA itself?
(Ms Henton) We are monitored by our sponsor department.
617. It would be very easy to visit the same
companies repeatedly, would it not?
(Ms Henton) I see what you mean. We determine how
many times we visit on the basis of risk assessment as to how
many times we visit different companies.
618. If a company feels that they have been
unfairly treated can they appeal? Is the appeal to you? Are you
judge and jury, that is what I am asking?
(Mr Mitchell) Perhaps I could assist here. In the
cost recovery schemes, for instance, for the Control of Pollution
Act and the various other air pollution cost recovery schemes,
it is not a cost to the company for the number of inspections
that we do, the charging scheme is based on their activity. For
instance, if we chose to go to a company much more frequently
because of some aspect of their operations in one particular year,
that company would not face any additional charges. The costs
are spread across the whole sector, all industries, all dischargers,
so basically it is like a postal system, it does not cost any
more to send a letter from
619. In relation to the whisky industry what
do you actually charge if you visit a distillery, for example?
(Mr Mitchell) If I can give you some figures, if that
would help. An Average distillery effluent treatment plant discharge
might cost £4,000, approximately, with a very large distillery
up to something like £6,000.
620. Is that for one visit?
(Mr Mitchell) That is an annual charge. For a cooling
water discharge it would be something like £350, that is
dependent on the volume. The costs are based on a charging system.
621. What does it work out per hour?
(Ms Henton) It is not based on per hour. All of the
charging fees are consulted upon. We are due for a revision of
one or two of our schemes coming up in the next year. Those go
out to public consultation, the industry will be consulted on
622. We were told by one producer that we visited
that one SEPA representative came, looked at his watch and said,
"The cost starts now."
(Ms Henton) That is COMAH. That is only scheme which
works in that way. All of the other schemes are as my colleague
623. There certainly seems to be a cause for
dissatisfaction that SEPA could come as often as it likes and
the charges suggested were rather high. You did say at the outset
that your budget was £40 million, partly grant-in-aid and
partly charged in levy. Can you break that down?
(Ms Henton) It is about 48 per cent grant-in-aid and
52 per cent charges, roughly. I can give you the exact figures
for last year and the projections for this year.
624. If the grant-in-aid remained constant or
reduced you would have to make up the shortfall by charges in
(Ms Henton) We can only charge for cost recovery.
We do not make a profit on what we do. We can only charge cost
Sir Robert Smith
625. On the formula based plans people will
be unhappy who say, "They never need to visit me, why on
earth should I pay so much", but conversely on the COMAH
ones people will be saying, "What drive is there for SEPA
to be efficient in the way it handles the visit?" That is
what worries them because, obviously, if the SEPA official turns
up and you are paying their bill then what is the incentive for
the SEPA person to be quick about it?
(Ms Henton) Professionalism and resources. We have
a lot of work to get through.
626. Yes, but you are charging for it. The longer
you spend there the more money you get.
(Mr Mitchell) Basically there has to be some element
of professionalism in what we do in terms of the number of inspections
and the amount of time that is spent on a particular site. If
there are good practices and good systems in place then, obviously,
there is an incentive there for the company to attain those and
once they have those there will obviously be much less need for
SEPA to go there. If they still felt that SEPA were paying them
undue attention then presumably they could make a complaint.
627. There is a dispute procedure if they think
they are being unnecessarily inspected.
(Ms Henton) They could write to the Scottish Executive.
628. Has anybody ever done so?
(Ms Henton) People do from time to time.
(Dr Curran) I just wanted to mention that under the
CoPA (Control of Pollution Act) scheme there are attributable
costs, not only on site visits to the premises but, of course,
SEPA is monitoring the receiving water as well, perhaps upstream
and downstream, and regularly throughout the year, and that is
cost recovered as well. You should not judge it just by who turns
up at the site, there is work going on unobtrusively elsewhere.
For marine monitoring in particular, it is quite expensive.
629. We have exhausted all of our questions,
are there any final points any one of you would like to make to
(Ms Henton) I do not think so. We would just like
to thank you for inviting us along and we hope we managed to answer
all of your questions.
Chairman: In that case I look forward to receiving
the notes from you, it will be helpful to the Committee.
5 See Evidence, p 191. Back