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Judgments - R (on the application of Edwards and another (Appellant)) v Environment Agency and others (Respondents)

HOUSE OF LORDS

SESSION 2007-08

[2008] UKHL 22

on appeal from: [2006] EWCA Civ 877

OPINIONS

OF THE LORDS OF APPEAL

FOR JUDGMENT IN THE CAUSE

R (on the application of Edwards and another (Appellant)) v Environment Agency and others (Respondents)

Appellate Committee

Lord Hoffmann

Lord Hope of Craighead

Lord Walker of Gestingthorpe

Lord Brown of Eaton-under-Heywood

Lord Mance

Counsel

Appellants:

David Wolfe

Tessa Hetherington

(Instructed by Richard Buxton)

Respondents:

David Elvin QC

Kassie Smith

(Instructed by Environment Agency; Treasury Solicitor)

Interveners Counsel

Stephen Tromans

Colin Thomann

(Instructed by Cemex UK Cement Limited)

Hearing date:

21-23 JANUARY 2008

ON

WEDNESDAY 16 APRIL 2008

HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

R (on the application of Edwards and another (Appellant)) v Environment Agency and others (Respondents)

[2008] UKHL 22

LORD HOFFMANN

My Lords,

1.  This appeal arises out of an application to quash a permit issued on 12 August 2003 by the Environment Agency (“the Agency”) to Rugby Ltd for the operation of a cement works in Lawford Road, Rugby. The chief grounds are that the Agency did not disclose enough information about the environmental impact of the plant to satisfy its statutory and common law duties of public consultation. Rugby Ltd has since been taken over by the Mexican multinational Cemex and is called Cemex UK Cement Ltd, but I shall for convenience refer to it as “the company".

The PPC Regulations

2.  Cement has been made at Rugby since the time of Dr Arnold. But the Lawford Road plant was built less than 10 years ago. It represents the latest technology in cement making. When it was built, the manufacture of cement required authorisation under Part I of the Environmental Protection Act 1990. Authorisation was granted in 1999 and the plant began commissioning in the following year. In 2000 a new system of pollution control was introduced by the Pollution Prevention and Control (England and Wales) Regulations SI 2000/1973 (“the Regulations”). These Regulations were made under the Pollution Prevention and Control Act 1999, mainly to enable the UK to give effect to the European Council Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control (“the IPPC Directive”) but in some respects going further than the directive required.

Principles of pollution control

3.  The Regulations provide that anyone operating a cement plant must obtain a permit from the Agency. No distinction is made between plants already in operation and new plants. Part II of the Regulations sets out the principles upon which the Agency must act in deciding whether to grant a permit. They are quite complicated and involve a lot of acronyms (there is a glossary at the end of the printed version of my speech), but I shall try to explain them as briefly as the subject will allow, because some knowledge of the general scheme is necessary to understand this case.

4.  The Regulations use, broadly speaking, two approaches to the control of pollution. The first is based upon the IPPC Directive. It is to impose limits (“emission limit values” or ELVs) on the quantities of polluting matter which a given activity may emit; e.g. requiring that a plant may not emit more than so much nitrogen dioxide: see regulation 12(2) and (6). That approach is helpful so far as it goes, but does not prevent excessive pollution caused by there being simply too many sources of nitrogen dioxide in the area. The other method is based upon the Directive 96/62/EC of 27 September 1996 on ambient air quality assessment and management (the “Air Quality Directive”), which provides a framework for specific directives imposing quantitative limits (environmental quality standards or “EQS”) on the extent to which the environment may be polluted. Relevantly in the present case, Council Directive of 22 April 1999 (1999/30/EC) imposed limits on concentrations of sulphur dioxide, nitrogen dioxide and oxides of nitrogen, particulate matter and lead in ambient air. The application of an EQS may in some cases be unfair to an applicant whose plant appears likely to breach the limit but will actually emit very little pollutant compared with other existing sources. He may be refused a permit because he happens to be at the end of the queue.

5.  The Regulations use, as I say, a combination of these techniques. Regulation 11(2) says that the object of regulation is to ensure that —

(a) all the appropriate preventative measures are taken against pollution, in particular through application of the best available techniques; and


(b) no significant pollution is caused.

6.  To give effect to (a), the Agency requires applicants to satisfy them that they are using the best available techniques (“BAT”) calculated to prevent, or at least to minimise, the emission of polluting matter. BAT are required irrespective of whether the emission would cause a breach of an overall pollution limit: as the Agency says in its Sector Guidance Note for the Cement and Lime Industry (IPPC S3.01) Version 1, April 2001, at p. 1, the regulations “[require] us not to consider the environment as a recipient of pollutants and waste, which can be filled up to a given level, but to do all that is practicable to minimise the impact of industrial activities.” (To similar effect, Buxton LJ in R. (Rockware Glass Ltd) v Chester City Council [2007] Env LR 3, paras 33-39). Sector Guidance Notes, such as that to which I have referred, contain “indicative” standards of what the Agency considers to be BAT for activities in that industry. They take the form of a description of the technology which should be used and a “benchmark” of the emission limits which should be achieved. An applicant has to justify any departure from these indicative standards. Regulation 12 (6) requires that the permit, when granted, should contain conditions imposing ELVs based upon what BAT should be able to achieve.

7.  The second principle is that the activity shall not cause “significant pollution” (regulation 11(2)(b)), whether it is using BAT or not. If BAT cannot prevent significant pollution, the activity should not be licensed at all. But what is significant pollution? For the purposes of the regulations, it is pollution which causes a breach of an EQS. Regulation 12(7) provides:

“Where an environmental quality standard requires stricter emission limit values than those that would be imposed pursuant to paragraph (6), paragraph (2) shall require those stricter emission limit values; and for the purpose of this paragraph ‘environmental quality standard’ means the set of requirements which must be fulfilled at a given time by a given environment or particular part thereof, as set out in Community legislation.”

8.  As I have already mentioned, a crude application of regulation 12(7) could be unfair when an applicant will cause very little pollution but the air is already close to breaching an EQS because of pollution from other sources. Guidance on the question of whether a European EQS will “require” stricter ELVs is contained in Integrated Pollution Prevention and Control: A Practical Guide, Edition 4 issued by DEFRA in June 2005:

“10.1…[T]he main basis for setting ELVs under the PPC Regulations will be the application of BAT. However, ELVs must also satisfy regulation 12(7), among other provisions. Regulation 12(7) states that where an environmental quality standard (EQS) as set out in Community legislation requires stricter ELVs than those achievable under BAT, the regulator must impose those stricter limits….

10.7 Where an existing installation is the main or only cause of a breach of a Community EQS the regulator must set ELVs accordingly. If those are not viably achievable, the regulator should refuse the permit…

10.8 Where an existing installation is a significant contributor to a breach of a Community EQS, but other sources such as traffic also make major contributions, regulators should explore all options for securing compliance with that EQS. It may be right for them to restrict releases from the other sources rather than tighten the IPPC limits. How far a regulator can do this will depend on its powers to control the other sources. Alternatively, the regulator may find that there are other things it can do to rectify the breach, such as draw up an action plan for an air quality management area (AQMA) under Part IV of the Environment Act 1995. However, if the regulator does not have powers to control the other sources, and does not believe that other means will bring about compliance with the EQS, it must impose stricter permit conditions, but it should involve the operator in that consideration so that the operator has the opportunity to suggest solutions. A combination of controls on all sources must ensure that Community EQSs are met.

10.9 Where an existing installation makes only a minor contribution to a breach of a Community EQS caused mainly by other, non-IPPC sources, ELVs for the installation should reflect that and would generally be expected not to differ significantly from those which would apply regardless of the applicability of the Community EQS. It will be much more important for the regulator to use whatever other powers it has to control the main sources of the breach.

10.10 A breach of a Community EQS could result from the combined effects of a number of installations. This could occur in an industrial area with elevated concentrations of air pollutants, or in an estuary where high levels of pollutants have accumulated due to releases up-river. In such cases it may be appropriate to review several permits in the area to set slightly stricter ELVs for each installation rather than simply imposing the entire burden of compliance on the last applicant.”

The permit application

9.  My Lords, against that regulatory background I can explain how the dispute in this case arose. The company applied for a permit on 21 August 2001. Paragraph 1 of Schedule 4 of the Regulations requires an application to provide information as to a large number of matters, including:

“(g) the nature, quantities and sources of foreseeable emissions from the installation…into each environmental medium, and a description of any foreseeable significant effects of the emissions on the environment;

(h) the proposed technology and other techniques for preventing or, where that is not practicable, reducing emissions from the installation…”

10.  For the most part, the activities for which the permit was sought were the same as those which had already been authorised under the 1990 Act. If nothing else had been proposed, it may be doubted whether it would have stirred up much opposition. After all, the inhabitants of Rugby had been living with a cement works for a long time and, although it seems to have had some teething troubles, the new, state-of-the-art plant was in principle more environmentally friendly than the old one. What caused intense controversy was a new proposal, contained in a lengthy appendix to the application, for permission to replace some of the fuel (coal and petroleum coke) with shredded tyres. Although the company explained that burning tyres at very high temperatures would not produce unpleasant smoke, smells or other pollution, the local people were sceptical and reluctant to be experimented upon. The result was, as the Agency subsequently said in its decision document (at para 4.46), “few determinations have been subjected to such intense scrutiny and debate as this one.” The debate concentrated overwhelming on the question of burning tyres: “Almost without exception” said the Agency in para 1.6 of its decision “the representations received during this consultation focused on the proposed use of tyres as a fuel in partial substitution for coal and petcoke” at the installation.

11.  Burning fuel is not, however, the only potential source of pollution from a cement plant. The product is made by mixing chalk, limestone and clay (with some sand and iron oxide) in the kiln at high temperature to produce a clinker which is then ground in a mill to make cement powder. The waste gases produced in the kiln by burning the fuel and sintering the raw materials are discharged through a tall chimney. They will include oxides of sulphur and nitrogen, water vapour and dust. In addition, the movement and mixing of raw materials and the grinding of the clinker will produce dust within the plant, some of which may escape from other points into the atmosphere. These are called low level point sources (“LLPS”) as opposed to discharges from the main stack.

12.  In its application, the company described the techniques which it was using or proposed to use to prevent or reduce emissions of, among other pollutants, dust or “particulate matter". The particulates which are environmentally most significant are those smaller than 10 microns (millionths of a metre) in diameter (“PM10”). They are important because they can be inhaled and cause respiratory diseases. The relevant indicative BAT standard in the Agency’s Sector Guidance Note for the industry (IPPC S3.01) said (at pp. 43-44) that BAT for reducing emissions of PM10 required the use of fabric filters. These are large numbers of fabric bags which trap the dust and enable it to be collected and removed. The benchmark emission value was stated (at p. 86) to be 20-30 mg/m3.

13.  The application identified various LLPS and said that fabric filters would be used and that the benchmark emission value would be achieved. In the case of emissions from the kiln through the main stack, however, it was proposed to use electrostatic precipitators (EP) instead of fabric filters. The application presented arguments as to why EP were as good as, if not better than, fabric filters and should also be regarded as BAT. In the end the Agency accepted these arguments, although the question is now academic because the company has gone over to using fabric filters.

Judicial review

14.  The application for judicial review, launched by Mr David Edwards, a resident of Rugby, on 28 October 2003, was based on three grounds, the third of which need not be considered because it was abandoned by amendment on 12 March 2004. The first was a discrete point on the European Council Directive of 27 June 1985 “on the assessment of the effects of certain public and private projects on the environment” (85/337/EEC) (“the EIA directive”), to which I shall return later. The second was an allegation that, in allowing the company not to use fabric filters for the kiln gases, the Agency had failed to ensure that it used BAT.

15.  In the course of the application, however, this ground of complaint was also abandoned and an entirely new one introduced. This concerned PM10 emissions from LLPS. In the case of these emissions, it could not be said that the Agency had failed to comply with its duty under regulation 11(2)(a) to ensure that the company was using BAT. The application described in section 2.3.2 the various LLPS under the headings “(B) Raw Materials Handling, Storage and Preparation", “(C) Fuel Storage and Handling", “(E) Clinker Handling and Cement Milling” and “(F) Cement Loading, Packing and Despatch". In each case it was said that fabric filters were in use and that emissions were expected to be within the Agency’s indicative benchmark. It has never been questioned that this was BAT.

16.  Instead, the appellant’s complaint is that the Agency did not properly discharge its statutory obligation of public consultation before reaching a decision on the other limb of pollution control, namely, whether the plant, notwithstanding its use of BAT, would cause significant pollution (regulation 11(2)(b)).

The application’s assessment of environmental impact

17.  Paragraph 1(g) of the Fourth Schedule to the Regulations, which I have already quoted, requires the application to state—

“the nature, quantities and sources of foreseeable emissions from the installation…into each environmental medium, and a description of any foreseeable significant effects of the emissions on the environment“ (emphasis added)

18.  Section 4 of the application dealt with impact on the environment. For this purpose, the company commissioned consultants to run a computer model of the effect of emissions from the main stack on ground level concentrations of gases such as sulphur dioxide, nitrogen dioxide, and carbon monoxide, and also of PM10. Such a computer model is a complicated calculation, involving assumptions about quantity of emissions, the heights from which they are dispersed, weather conditions and so forth. The conclusion in relation to PM10 was that the maximum contribution from the works would be (expressed as 24 hour mean) a 0.17 g/m3 contribution to an ambient air concentration of 36-40 g/m3, as against a European EQS (imposed by Council Directive of 22 April 1999 (1999/30/EC)) of 50 g/m3. The application commented: “The maximum predicted contribution to ambient concentrations of fine particulate matter is insignificant in terms both of the ambient air quality and the assessment criteria.”

19.  The application said nothing, however, about the effect of adding the contribution of emissions of PM10 from LLPS to the ambient air quality. The consultants had not been asked to include these emissions in their computer model. Dr Evans explained this in his second witness statement on behalf of the company (at para 8):

“The rationale for this was that releases from the main stack were considered to be of more significance than those from the other point sources, such as the cement mills, where there would be lower discharge volumes and concentrations. We considered this general risk assessment approach to be satisfactory and in line with general guidance.”

20.  One reason for excluding LLPS from the company’s modelling exercise may have been the great difficulty of doing so with any pretence at accuracy. Whereas emissions from the main stack are continuous and from a single fixed point above all the surrounding buildings, the emissions from LLPS are from a number of different places at different heights for irregular periods of time and may be affected by the layout of the buildings. An attempt at modelling may therefore not have been able to produce very helpful information. And the Sector Guidance Note for the Cement and Lime Industry (IPPC S3.01) says (at p.3) that “an applicant is not required to supply detail that could not reasonably be expected to contribute to a decision to issue a permit".

The Air Quality Modelling Assessment Unit

21.  The Agency decided, however, that in view of what its technical adviser Mr Sheldon called “the contentious nature of the application” (second witness statement, para 163) it was essential to have an independent assessment of the application data. He therefore went to the Agency’s in-house experts on air quality, a highly respected group of scientists called the Air Quality Modelling Assessment Unit (“AQMAU”) and asked them to run their own computer model and report whether it confirmed the results submitted on behalf of the company.

22.  AQMAU produced a report dated 7 January 2003 which has been called AQMAU 2 because it followed an earlier draft or report of work in progress dated 21 November 2002 which has been called AQMAU 1. The AQMAU model did try to take LLPS emissions of PM10 into account. The result was a prediction that, as the decision document said at para 9.46, “the relevant EQS will be breached locally, if all the sources were emitting at the ELVs at the same time.” The basis for this statement was the statement in para 5.4 of AQMAU 2 that “within model uncertainty, the air quality objectives for PM10 are likely to be exceeded. This is due to the high background concentrations of PM10.” In other words, there was already so much dust in the air of Rugby that, on certain assumptions fed into the model, the addition of PM10 from the plant appeared likely to breach the EQS.

23.  Para 9.46 said that the Agency’s view was that this was not a situation which was likely to occur in practice. It went on in para 9.47 to say:

“In addition, there are uncertainties with the modelling used to carry out the…assessment (although it can with certainty be said to have been very precautionary and to have overestimated the actual impact) because of the physical layout and variability of the emission conditions. The Agency considers that it is possible that, in the reality, the relevant EQS may not be exceeded. As explained above, current abatement techniques are considered to comply with indicative BAT”

24.  The Agency decided however to include in the permit a condition 9.1.1.13 to “enable the Agency to consider further whether additional abatement measures might be justified on BAT grounds":

“The operator shall complete a comprehensive audit of all particulate emissions from the site including point source and fugitive emissions. The audit will then be used to assess the combined impact of the emissions on air quality for both short term and long term scenarios. The operator shall develop BAT proposals for any remedial work required. A report outlining the assessment, its conclusions and measures to address any issues raised is to be forwarded to the Agency.”

Was failure to disclose the AQMAU reports a procedural irregularity?

25.  There is no suggestion that, on the basis of the AQMAU report and the other material available to the Agency, the grant of the permit and the conditions imposed were in any way unreasonable. The complaint is that the Agency failed in its duty of consultation and the grant of the permit is therefore vitiated by a procedural irregularity. The breach of duty is a failure to publish both the AQMAU reports. The public was thereby deprived of the opportunity to make representations about the matters contained in these documents which could have influenced the Agency’s decision.

26.  The legal basis for this duty of consulting the public is put as having been the requirements of, first, the IPPC directive; secondly, the regulations, and thirdly, the common law duty of the Agency as a body exercising public functions.

The IPPC Directive

27.  I shall first consider the directive. Unlike the regulations, it distinguishes between existing installations on the one hand and new installations, or “substantial changes” to existing installations, on the other. All are subject to control under the directive, but both the recitals and the body of the directive make it clear that the duty to make information available to the public applies only to new installations or substantial changes. Thus recital 23 says:

“Whereas, in order to inform the public of the operation of installations and their potential effect on the environment, and in order to ensure the transparency of the licensing process throughout the Community, the public must have access, before any decision is taken, to information relating to applications for permits for new installations or substantial changes and to the permits themselves, their updating and the relevant monitoring data.”

28.  Nothing there about publishing applications for permits (or any other information) relating to existing installations. Likewise, article 15.1 says:

“…Member States shall take the necessary measures to ensure that applications for permits for new installations or for substantial changes are made available for an appropriate period of time to the public, to enable it to comment on them before the competent authority reaches its decision.

That decision, including at least a copy of the permit, and any subsequent updates, must be made available to the public.”

 
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