3181 Introductory guide to environmental damage

Chapter 1
Introduction

In March 2009 the government department for Environment, Food and Rural Affairs (Defra) implemented the European Environmental Liabilities Directive (ELD) into English law.

Regulations for the other nations quickly followed and the implementation dates are presented below:

• England: The Environmental Damage (Prevention and Remediation) (England) Regulations 2009 No. 153 implemented on the 1 March 2009.
• Wales: The Environmental Damage (Prevention and Remediation) (Wales) Regulations 2009 No. 995 (W. 81) implemented on the 6 May 2009.
• Scotland: The Environmental Liability (Scotland) Regulations 2009 No. 266 implemented on the 24 June 2009.
• Northern Ireland: The Environmental Liability (Prevention and Remediation) Regulations (Northern Ireland) 2009 No. 252 implemented on the 24 July 2009.

The ELD seeks to encourage prevention of environmental damage to sensitive habitats and species by applying stringent (and potentially costly) remedial measures should damage or imminent threat of damage be present. Where operators are found to be liable, then the remedying of the damage will be required back to a pre-damage condition.

This guide was developed by the Energy Institute, with the assistance of ENVIRON, with the objective of introducing and explaining Environmental Damage in the context of the new Regulations. It is also a precursor to more detailed guidance which is in preparation by the Energy Institute. The detailed guidance will provide operators with practical approaches to help site managers establish and maintain baseline condition information for the natural habitats and protected species on and around their sites.

This introductory guide aims to:

• Explain the main concepts introduced in the European Environmental Liabilities Directive (ELD).
• Identify the important components of the Environmental Damage/Liability Regulations that have implemented the ELD into national Law.
• Explain what this means to operators of sites, including:
  • How gathering existing information on the sensitive species and habitats in the vicinity of a site can help protect against regulatory determination and overly stringent remediation.
  • A case study to illustrate the value of prior knowledge about a site's environmental setting.
  • How best to deal with damage if it occurs.

Chapter 2
Environmental Liabilities Directive

2.1 What is environmental liability?

In April 2004, the European Union (EU) created the Environmental Liabilities Directive (2004/35/EC) as a means of halting the loss of biodiversity and reducing health risks from contamination in the environment. The Directive was developed as the result of large scale incidents of environmental damage in the 1980s and 1990s in Europe such as the incident affecting Doñana Natural Park in 1998 when a dam containing toxic waste from a mine burst in the south of Spain, releasing a wave of sludge that eventually reached the National Park. It caused widespread damage to wildlife, soil and water resources and the Spanish authorities spent more than €240 million on clean-up operations.

The Environmental Liabilities Directive also specifically implements the 'polluter pays principle'; its fundamental aim is to hold operators whose activities have caused environmental damage financially liable for remedying this damage. In addition, the Directive holds those whose activities pose an imminent threat of environmental damage liable to taking immediate preventive actions.

2.2 What is not covered by the ELD?

Maritime oil spills and nuclear accidents are not covered under ELD because they are adequately covered by other legislation.

The Directive does not apply to cases of personal injury, damage to private property or to any economic loss. Nor does it apply to activities whose main purpose is to serve national defence or international security.

The Directive is not retro-active. This means operators are not liable for damage occurring prior to the implementation dates of national regulations.

Chapter 3
The Environmental Damage/Liability Regulations 2009

The Environmental Damage Regulations came into force in 2009 and implement the Environmental Liabilities Directive.

It is important to note that the Regulations do not cover damage resulting from incidents occurring prior to their implementation dates.

3.1 What do the regulations mean for operators?

New responsibilities were introduced through the Regulations which have implications for how sites with a potential to pollute are managed across Europe. The main features of the Regulations include:

• Operators now have an obligation to notify the authorities of an imminent threat of damage or where damage has actually occurred.
• 'Operations' are clearly defined and include, amongst others, industrial activities subject to environmental permits, waste management activities, and the production, storage, use and release of dangerous chemicals.
• The source of the pollution (i.e. specific operators) must be clearly identifiable for them to incur environmental liabilities.
• Public interest groups, such as non-governmental organisations (NGOs), pressure and local interest groups can request investigative action from public authorities and, if necessary, later challenge their decisions in court.
• There is a requirement to remediate to the same level of natural resources as would have existed had the damage not occurred.
• There are different remedial actions depending on the type of damage:
  • Land damage must be remediated until it no longer poses a significant risk to human health.
  • Damage to 'natural habitats' and 'protected species' as well as water, may be more complex to restore, and regulators have the flexibility to consider restoration of natural resources either where the damage occurred, or in another location. Where a damaged natural resource cannot be restored then alternative options may include providing another site (either nearby or in a different location) which can perform the same role as the damaged site.

3.2 Who do the regulations apply to?

The Regulations apply to:

• Damage caused by operational activities, which are defined in Schedule 2 of the Regulations, such as permitted installations covered by the Environmental Permitting Regulations (formerly IPPC), water abstractions and handling of dangerous substances.
• Damage caused to protected species and natural habitats by any other activity is also considered environmental damage but only where the operator intended to cause the damage or was negligent.

There are a number of exclusions outlined in the Regulations including damage caused by terrorism, exceptional natural phenomena such as hurricanes and flooding provided reasonable precautions had been taken.

In addition, there are two specific instances where an operator cannot be liable for environmental damage and the following defences apply:

1. If an operator was acting within the conditions of their Environmental Permit.
2. A 'state-of-the-art' defence where the operator is not liable if an emission, activity or product was not considered to cause environmental damage at the time according to the current state of scientific and technical knowledge.

3.3 What do the regulations apply to?

The Regulations cover:

• Damage to water – this relates to both surface water and groundwater and covers all waters up to one nautical mile from the shore.
• Damage to land – this means contamination of land by substances that result in a significant risk to human health.
• Damage to natural habitats and protected species – this involves European protected species, European conserved habitats and nationally important sites of conservation interest.
  The Regulations cover damage to all species and habitats protected under the 1992 Habitats Directive as well as the most threatened species and migratory birds protected under the 1979 Birds Directive. The protected species and areas represent biodiversity that is particularly rich and of conservation value in Europe.
  In England, Wales and Northern Ireland, the Regulations also include Sites or Areas of Special Scientific Interest (SSSI) of which there are more than 4,000 in England covering around 7 % of the country's land area. Over half of these, by area, are internationally important and designated as Special Areas of Conservation (231 in England), Special Protection Areas (78 in England) or Ramsar sites (66 in England).

3.4 What is environmental damage?

The process of identifying whether damage meets the definition of 'significant environmental damage' under the new Regulations can be complex. The following definitions apply, but there is currently limited guidance on how to practically assess damage, especially for natural habitats and species:

• Damage to water is identified as a decline in status as classified under the Water Framework Directive (2000/60/EC). For surface water bodies this means judging an effect on 'ecological status' which includes characterisation of biological quality, physico-chemical parameters and chemical status; for groundwater bodies this requires consideration of its conductivity, level or concentration of pollutants.
• Damage to land is identified as a 'significant risk of an adverse effect on human health'. Assessment of this aspect has been established in the UK for some time and requires risk-based assessment using accepted models and guidelines.
• For damage to natural habitats and protected species, the thresholds and methodologies are less clear and are not currently linked directly to other regulations or guidance.

3.5 Enforcement

The Regulations place a requirement on the operator to notify the enforcing authority immediately of any imminent threat or actual environmental damage.

3.5.1 Enforcing authorities

In general, where the damage is caused by a permitted installation, then the enforcing authorities responsible for enforcing the Regulations are those responsible for granting the permit under the Environmental Permit Regulations (2007).

If damage is caused by other operational activities then the enforcing authorities are as presented in Table 1. If more than one type of damage occurs then any or all authorities in the relevant country may enforce the Regulations.

3.6 Remediation

For damage to natural resources and to surface and ground waters, the approach to remediation is more comprehensive than in previous UK legislation. The approach consists of:

• Primary remediation – to directly clean up contamination and to restore the damaged resources back to the condition prior to the damage occurring.
• Complementary remediation – additional measures to offset the losses of natural resources while the damage is being restored, or provision of an alternative site, where primary remediation does not fully restore the damage.
• Compensatory remediation – to compensate for interim losses during the time taken to restore the damage.

For damage to land, remediation consists of removing or controlling contaminants so that the land no longer poses any significant risk of adversely affecting human health.

A generic overview of the Environmental Damage process based on Defra's guidance is presented in Figure 1.

Chapter 4
How is environmental damage assessed?

Environmental damage is a new field of environmental regulation in the UK and it is yet to be fully determined what legally constitutes 'significant environmental damage'. However, there are tried and tested methods available from similar regulations that can be applied here and, in some instances, Defra's guidance identifies the relevant approaches. Crossreferencing to similar legislation and the adoption of their methodologies also helps to avoid duplication while enhancing the understanding and consistency amongst operators and regulators alike.

4.1 Damage to water

Defra recommends that damage is judged against criteria set out in the European Water Framework Directive (WFD) where there are descriptions of what constitutes 'good ecological status' of a surface water body. The status of the water body refers to its ecological status, its ecological potential and its chemical status (see Box 2 for more details).

Damage to groundwater bodies requires the consideration of chemical status and quantitative status (see Box 2).

The development of methods for assessing ecological status has been under way for some years and methods are available via UK environment and conservation agencies.

4.2 Damage to land

For assessing damage to land, Defra recommends the use of guidance developed for the assessment of contaminated land under Part 2A of the Environmental Protection Act 1990.

4.3 Damage to natural habitats and protected species

The definitions of damage to biodiversity differ depending on the location of the damage. Where damage affects a Site of Special Scientific Interest, then damage is determined by an adverse effect on the integrity of the site. If a European protected species or habitat is affected then damage is defined as a significant adverse effect on reaching or maintaining favourable conservation status.

Unlike damage to water and land, suitable methods for assessing biodiversity damage are less well defined in the Defra guidance. However, best practice methodologies, such as Ecological Risk Assessment (ERA) are applicable. Recently an ERA Framework and assessment tools, primarily aimed at Part 2A Contaminated Land Regulations but with wider application, were launched by the Environment Agency and conservation authorities.

It is important to note that there are scientific differences between risk and damage. Risk is the probability or likelihood of adverse effects occurring and the severity or magnitude of the consequences. Damage concerns the actual adverse effects to ecosystems. However, there are sufficient similarities between the definitions of 'significant environmental damage' to natural habitats and protected species in the Environmental Damage Regulations and 'significant harm' to ecosystems in the Part 2A Regulations to suggest that the ERA approach is suitable for biodiversity damage assessment.

The key concepts underpinning ecological risk assessment and damage assessment are based on best practice from long-established methods in other countries. Many of these concepts were cited in the European Environmental Liabilities Directive, such as 'baseline condition' and 'causal link', but have been lost during the transposition to the Regulations for England and Wales. However, they still make useful references for the practical purposes of damage assessment.

Chapter 5
Assessing damage to natural habitats and protected species

Ecosystems are complex and the process for assessing damage is necessarily sophisticated, employing a range of tools for early screening or detailed damage assessment, including environmental screening values (i.e. chemical), ecological survey methods (i.e. biological), and the measurement of geological and hydrological parameters (i.e. physical).

Ecological risk assessment provides a process for judging whether the protection of ecosystems (i.e. natural habitats and protected species) is being or is likely to be adversely affected by chemical contamination. The main features of the methodology that are transferable to biodiversity damage assessment are:

• A Conceptual Site Model (CSM) for organising information about the site and confirming the plausibility of a pathway between a specific source of contamination and the ecological receptors.
• A causal link, used to determine whether the incident under investigation is the cause of contamination and is attributable to detrimental effects and, therefore, liability.
• The comparison of 'damaged conditions' with an appropriate baseline condition (a pre-damage condition) if an operator is to avoid under- or over-compensatory action.
• For ensuring assessments are practical and measurable, indicators can be used to make reliable and consistent decisions. Examples of indicators for damage include adverse effects on growth or survival of a population of protected species. These can be compared against a baseline condition to judge whether damage resulting from an incident is significant.

5.1 Ecosystem services

The Regulations expand the scope of damage to biodiversity by introducing the concept of ecosystem services (see Box 5). This goes beyond protecting the intrinsic diversity of wildlife to considering the benefits people obtain from ecosystems and then applying a financial value to them. These include tangible benefits such as food and recreational spaces to intangible services such as nutrient cycling.

These services interact and are ever-changing systems. Understanding their normal condition, dynamics and interactions, but only focusing on what is important, is key to the success of a damage assessment. The consideration of ecosystem services broadens the scope of the biodiversity assessment and, as such, a greater range of indicators and measurement tools may be needed to assess environmental damage and the type and cost of remediation.

5.2 Valuing liability

It is vital that any damage assessment focuses on gathering quantitative data for the damaged ecosystem services, as their valuation, remediation, restoration (ecosystem gains) and any interim compensation will need to be estimated.

There are existing approaches available, such as habitat equivalency analysis, that rely on scaling methods, a clear baseline condition and equivalent metrics for comparing different types, quality and quantity of services (see Box 5). Quantifying ecosystem services is difficult and the valuation of services is an emerging field of science. For these reasons it is important to consider a number of options for remedying and compensating for damage based on credible science and cost-effectiveness.

A diagram to illustrate damage to services, remedy and recovery is presented in Figure 2. Area A relates to services lost. It is important to note that primary remediation and recovery may not reach the baseline and complementary remediation may be required to offset ecosystem service losses.

Chapter 6
A case study of environmental damage to biodiversity

It is beneficial for operators to have a clear understanding of the environmental context of their site and its immediate surroundings, before an incident occurs. The absence of such knowledge could result in inappropriate determinations of environmental damage and possibly costly remedial work that could be avoided. An example of a plausible scenario for the energy industry is provided to illustrate potential damage under the new Regulations and emphasise, in particular, the importance of knowing the baseline condition of nearby habitats.

The example scenario is illustrated in Figure 3.

6.1 Scenario

Over the weekend, an above-ground storage tank (AST) and its bund at a petroleum facility have been damaged causing a sudden release of fuel to a drainage ditch which has overflowed into an area of marsh land. Spilled fuel has also entered a surface water drain whose outfall is directly on to the adjacent estuary foreshore. In addition, an historical leak from an underground storage tank (UST) had allowed fuel to enter groundwater some time in the past. The operator is aware of the leaked UST and has been monitoring the natural degradation of the previous fuel contamination over the past five years.

The internationally important wildlife potentially affected by this incident on- and off-site includes:

• European protected plant species Marsh Saxifrage (Saxifraga Hirculus) within the site boundary.
• European protected species Ringed Plovers (Charadrius Hiaticula) and Oystercatchers (Haematopus Ostralegus).
• A protected natural habitat, a Special Area of Conservation, adjacent to the site.

6.2 Management actions

Under the new Regulations the operator has a duty to inform the authorities that damage has occurred or there is an imminent threat of damage occurring. On Monday morning the site owner drained the AST, carried out spill response work and contacted the relevant authorities.

The authorities make an assessment of whether there has been environmental damage to natural habitats and protected species. They then notify the operator that damage has occurred as a result of fuel found in the marsh, foreshore and estuary and in a groundwater plume beneath the site in continuity with the foreshore. The resulting damage by fuel is reported to be an area equivalent to 50 % of the marshland making the area unsuitable for Marsh Saxifrage so it is no longer in favourable conservation status. The authorities carry out a bird survey a week after the incident and observe fewer Oystercatchers and Ringed Plovers than they had expected to find.

The authorities serve a remediation notice, including the need for compensatory and complementary actions.

In this scenario, the regulatory authorities have requested the following actions:

• Primary remediation of the marsh land and underlying groundwater.
• They estimate that the marsh will take eight years to be fully restored back to its pre-damage condition and require complementary action in terms of extending and enhancing adjacent marsh land until the Marsh Saxifrage population is restored.
• Primary remediation of the sediments along the foreshore and near-shore in the special area of conservation.
• Compensatory action is required to establish new breeding and feeding grounds for the Plovers and Oystercatchers until the Special Area of Conservation is fully restored.

In this scenario, the regulatory authorities have requested that primary remediation be undertaken so that the Special Area of Conservation and European protected species are restored to pre-damage conditions, including the marsh containing the Saxifrage. While the remediation works are taking place and the habitats are under restoration, new locations along the Special Area of Conservation are proposed by the regulatory authorities for compensatory action but these are to support 100 % of the wading bird populations based on a bird survey previously conducted by the regulator.

6.3 Benefits of a baseline

The site owner has collated seven years’ worth of population census data for the protected bird species recorded as part of the site's environmental management system and uses this evidence to show that the populations for Oystercatchers and Plovers had been in decline; the site owner proposes that the compensatory action should be to support only half as many birds. The regulator's population data are based on a single day’s monitoring (a snap shot in time); however, the operator's longer-term data demonstrate that these are over-estimates against long-term trends.

The site owner is also able to prove to the regulator that the groundwater contamination is historical and occurred prior to 1 March 2009. As a consequence, the site owner is not liable under the new Regulations for the contamination from the UST, although this may be addressed under other regulations, such as Part 2A Contaminated Land Regulations.

Chapter 7
Establishing the baseline condition

The aim of this introductory guide is to raise awareness of the new Environmental Damage Regulations but it is also a precursor to more detailed guidance which is in preparation by the Energy Institute. The detailed guidance will provide responsible operators with practical approaches to establishing and maintaining baseline condition information for the natural habitats and protected species on and around their sites.

7.1 The baseline assessment process

The assessment of a biodiversity baseline condition will be driven by the conceptual site model approach and be undertaken as part of a phased process. The cost and effort involved will depend on a number of factors such as the proximity of a site to protected species and sensitive habitats, the range and the quality of data and type of information that is easily and publicly available.

For example, the detailed guidance will include:

• Advice on what information is needed.
• An overview of what information is publicly available and where to get the information.
• A phased approach to establishing the baseline condition.
• The importance of the conceptual site model and source-pathway-receptor analysis.
• A guide to judging the reliability of information.

Chapter 8
Bibliography

Office of Public Sector Information (OPSI)

Statutory Instrument No. 153, The Environmental Damage (Prevention and Remediation) Regulations 2009.

Statutory Instrument No. 995, The Environmental Damage (Prevention and Remediation) (Wales) Regulations 2009.

The Environmental Damage (Prevention and Remediation) Regulations 2009. Guidance for England (draft guidance for Wales). February 2009.

Scottish Statutory Instrument No. 266. The Environmental Liability (Scotland) Regulations 2009.

Statutory Rules of Northern Ireland No. 252. The Environmental Liability (Prevention and Remediation) Regulations (Northern Ireland) 2009.

European Commission (EC)

Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage.

Millennium Ecosystem Assessment

Ecosystems and human well-being: Synthesis. Island Press, Washington DC, 2005

Acknowledgements

This introductory guide was commissioned by the Energy Institute’s Soil Waste Groundwater Group.

The Energy Institute wishes to record its appreciation of the work carried out by ENVIRON UK Ltd and also its gratitude for the valuable contributions made by members of the Soil Waste Groundwater Group during the development of this document.

The EI gratefully acknowledges the financial contributions towards the scientific and technical programme from the following companies