COMMONS AMENDMENT (Hansard, 11 July 1995)

Earl Ferrers
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 35. It may be helpful to your Lordships if at the same time I speak also to Amendments Nos. 37, 38, 44 to 47, 49 to 57, 63 to 65, and 67 to 69.
The amendments in this group, particularly Amendment No. 56, make a number of significant changes to the enforcement procedures in the proposed contaminated land regime, and also re-work the provisions relating to liabilities. In many cases these amendments make changes which answer anxieties expressed by your Lordships in our earlier debates. We have introduced the important requirement for 1496 consultation to precede the service of any remediation notice, except in cases of urgency. My noble friend Lord Coleraine moved an amendment on this subject at Report stage.
Following on from this consultation, enforcing authorities will be precluded from serving a remediation notice if they are satisfied that appropriate remediation is or will be taking place without one. In such cases, a remediation statement will be included on the remediation registers to ensure that information about the site is not lost.
Amendment No. 67 strengthens the powers of enforcing authorities to undertake remediation themselves in appropriate circumstances. In particular, they will be specifically empowered to act in emergencies, where they have the agreement of the persons who would otherwise receive a remediation notice or where they cannot find any "appropriate person" on whom to serve a remediation notice. In such circumstances, the authorities would not serve a notice. They would, however, publish a remediation statement, which would go on the register.
Another important circumstance in which an authority would be precluded from serving a remediation notice would be where it considered that hardship would result from the service of a notice. The noble Lord, Lord Northbourne, the noble Earl, Lord Lytton, and my noble friend Lord Kinnoull moved amendments on this question of hardship at Report stage. Under the original provisions of the Bill, hardship would have been considered only in circumstances where the enforcing authority was actually seeking to recover costs incurred in undertaking remediation where the recipient of a notice had failed to comply with the requirements set out in that notice. In other words, a notice would have been served—and not complied with—before the question of hardship was considered. Under the terms of the new Sections 78EA and 78HH, however, if the authority decides that it would not seek to recover all of its costs were it to act itself, it is precluded from serving a remediation notice. This means that hardship must be considered before any notice is served.
Amendments Nos. 68 and 69 introduce a requirement that authorities should have regard to guidance from the Secretary of State in making decisions on questions relating to cost recovery and hardship. Amendment No. 56 is a substantial amendment and virtually re-writes the section which defines who is the "appropriate person" to be responsible for any remediation.
My noble friend Lord Jenkin was concerned that the provisions still seek to implement the "polluter pays" principle, with liability falling on any person who, caused or knowingly permitted the substances … by reason of which the contaminated land … is such land to be in, on or under that land". My noble friend Lord Coleraine expressed concerns about the meaning of the second element of this test— "knowingly permitted". He moved an amendment on Report. Concerns have also been raised by, among others, my noble friend Lord Jenkin, claiming that banks could be held liable as polluters by the act of lending money to polluting companies.
1497 We have considered the matter again since the Bill left the House. As your Lordships may be aware, the test of "causing or knowingly permitting" has been used in environmental legislation for more than 100 years and during that time there have been no cases where a bank lending money to a polluter has been held liable to be a "causer" or a "knowing permitter". I can also confirm that the National Rivers Authority has not brought such a case against a provider of finance under its current powers in the Water Resources Act 1991 which are based on "causing or knowingly permitting".
The test of "causing" requires some active participation in the operation or chain of operations resulting in the pollution. This has been well established in leading cases, including by the House of Lords in Alphacell Ltd. v. Woodward and by the Court of Appeal in Attorney-General's Reference (No. 1 of 1994). Accordingly, whether a lender could be held to have caused substances to be in, on or under the land will depend on whether it took some active participation in the operation or chain of operations resulting in those substances being in, on or under the land. The act of lending per se does not amount to such active participation.
The test of "knowingly permitting" would require both knowledge that the substances in question were in, on or under the land and the possession of the power to prevent such a substance being there. I am advised that there is no judicial decision which supports the contention that a lender, by virtue of the act of lending the money only, could be said to have "knowingly permitted" the substances to be in, on or under the land such that it is contaminated land. This would be the case if for no other reason than that the lender, irrespective of any covenants it may have required from the polluter as to its environmental behaviour, would have no permissive rights over the land in question to prevent contamination occurring or continuing.
Amendment No. 56 revises the definition of the "appropriate person", as regards polluters, in two important respects. First, we have introduced a limiting condition that any "polluter" can only be required to carry out any remediation which is to any extent referable to the substances for which he is responsible. He is, therefore, not liable for dealing with unrelated problems. This, I hope, will remove some of the concerns surrounding the issue of joint liability. The noble Lord, Lord Northbourne, the noble Earl, Lord Lytton, and my noble friend Lord Kinnoull moved an amendment on this matter at Report stage.
Secondly, we have clarified the provisions relating to the question of joint liability, confirming that two or more persons can be required jointly to do the same things by way of remediation, with the costs of so doing being apportioned between them by the enforcing authority in accordance with the guidance to be issued by the Secretary of State. Amendment No. 63 gives a specific defence against any prosecution for non-compliance with a remediation notice where the sole reason for non-compliance was the refusal or inability of another person to comply who was expected to bear a proportion of the costs.
1498 Where no "polluter" can be found, after reasonable inquiry, the owner or occupier of the land in question becomes the "appropriate person". In this, the contaminated land provisions follow directly the equivalent arrangements in the statutory nuisance regime in Part III of the Environmental Protection Act 1990. However, as my noble friend Lord Ullswater promised in our Third Reading debate, the Government have looked again at the operation of this provision with respect to liabilities for water pollution. Amendment No. 56 ensures that a person who is identified as an "appropriate person" solely by virtue of his ownership or occupation of land cannot be held liable for any remediation needed to deal solely with water pollution. This reflects the fact that there is no liability in respect of water pollution falling on owners or occupiers per se under Section 161 of the Water Resources Act 1991.
Amendment No. 56 also addresses the question of the potential overlap between these provisions and the provisions in the Water Resources Act dealing with water pollution from abandoned mines. Concerns in this area lay behind a number of amendments moved by the noble Earl, Lord Kintore, at Report stage. We have resolved those by copying into these provisions the exemption from liability which applies with respect to water from abandoned mines under the Water Resources Act.
Amendment No. 56 removes entirely two means by which liability might have fallen on owners or occupiers of land under the original provisions of the Bill. The first of these concerns "transfers of liability". The provision which would have allowed for polluters to have transferred their liabilities to new owners or occupiers of land—which the noble Lord, Lord Northbourne, the noble Earl, Lord Lytton, and my noble friend Lord Kinnoull sought to amend at Report stage— has been deleted. Having looked closely at the matter, the Government have concluded that it would be more practical to leave this question to be dealt with through the normal contractual means of guarantees and indemnities rather than to attempt to make detailed statutory provisions.
The other issue concerns the circumstances in which a person is required to do things by way of remediation with respect to particular contaminated land notwithstanding that he may not be entitled to do them. In order to resolve this problem, under the original provisions of the Bill the consent of the occupier of the land was needed before any remediation notice could be served. Any refusal on the part of the occupier to give such consent would have made the owner or the occupier of the land himself liable for the remediation.
These provisions have now been substantially restructured. There is now a requirement that, except in cases of urgency, any person whose consent might be required to enable remediation to be carried out should be consulted before a remediation notice is served concerning any rights which he might be required to grant. That person is then required to grant, or join in granting, the necessary rights of access. But any person required to grant rights in this way will be entitled to apply for compensation from the "appropriate person".
1499 Regulations will prescribe the procedures for applying for compensation and the manner in which the amount of any compensation will be determined.
I hope that these improvements will make the contaminated land problems a great deal easier to deal with and that the contaminated land regime will operate better in practice, both in terms of the mechanics of the regime and the equity and fairness of the arrangement relating to liabilities. I apologise for the length of my speech but this is an important matter and one about which many of your Lordships were concerned. I thought it appropriate to try to point out in the best and clearest way possible and in some detail how we have sought to meet the concerns expressed by your Lordships.

§ Baroness Hilton of Eggardon
My Lords, I have one specific question which the Minister may feel reluctant to answer. It concerns "reasonable time". I realise that he was reluctant to commit a Secretary of State to what might be a reasonable time for making a decision but this is in relation to the enforcing authority. Where an owner intends to take appropriate remediation measures he must prepare and publish a remediation statement. Where he fails to do so in a reasonable time the enforcing authority may do so itself and recover the costs of so doing. I wonder whether the noble Earl might venture an opinion as to what is a reasonable time in this respect. As he is not committing a Secretary of State on this occasion, I hope we can get some kind of answer as to whether six months, a year, two years or five years might be considered a reasonable time.
A more general and perhaps more important point relates to the costs to local authorities due to the introduction of these very welcome measures for dealing with contaminated land. For the first time local authorities will have an explicit duty to inspect their areas in order to identify contaminated land. The existing provisions, which are much more vague and tenuous, require only that they identify nuisances. The contaminated land test is set at a much lower level than the test for nuisance and therefore no doubt local authorities will be identifying far more contaminated land within their area. Moreover, this will require a much greater proportion of the land to be acted on.
Local authorities are also required to determine whether these contaminated sites should be identified as special sites. Contaminated land will also include closed and abandoned mines. Following identification, local authorities must also consult with owners, occupiers and all others with an interest in the land before serving a remediation notice or accepting proposals from an owner for a remediation programme.
All of those are considerable, time-consuming matters which will require additional staff and which may ultimately require additional capital investment. It has been estimated by the district councils that the formal inspection of land and the setting up of registers could mean that an additional one-and-a-half officers per district council are needed at an average cost of £30,000 per annum. Is it intended that that additional cost to 1500 local authorities will be funded from central funds? As we know, local authorities are already gravely overstretched through a number of other duties being imposed on them. The additional burden will make the welcome provisions of this legislation unworkable unless additional finance is provided for local authorities.

§ Lord Jenkin of Roding
My Lords, I know that I speak for a number of my noble friends when I say how immensely grateful I am for the long statement which my noble friend the Minister has made about the position of lenders. Without wishing in any way to appear ungrateful, when my noble friend replies to this brief debate will he say whether that statement about lenders will be made quite clear in the guidance when it is issued?

§ Lord Peyton of Yeovil
My Lords, I should like briefly to offer my warm congratulations to my noble friend on the skill with which he steered his way through the not always limpid clear waters of the amendments that we are now discussing.
However, I wonder whether my noble friend could say just a word or two more about "appropriate person". Amendment No. 35 does not do a great deal to help me. Indeed, I suspect that not all of your Lordships will feel deeply grateful for the explanation that it contains. It states: '"appropriate person' means any person who is an appropriate person". That does not take me much further. It then states: determined in accordance with section 78E below, to bear responsibility for any thing which is to be done by way of remediation in any particular case". Perhaps that particular piece of language should be enshrined in Hansard as an example of what ought to be avoided if at all possible. We are told by way of explanation that that implies that there can be more than one appropriate person in relation to any particular site. I am bound to say that that explanation and enlightenment succeeds in one thing: it adds to my confusion, but that may well be my fault and no one else's. I should be grateful if my noble friend could say a word or two about "appropriate person" because it might be important.

Earl Ferrers
My Lords, I apologise again for the lengthy introduction to this group of amendments. I apologise also for the fact that it might have been a little tedious for your Lordships. But, as my noble friend Lord Jenkin realised, this is of considerable importance to many people.
The noble Baroness, Lady Hilton, was keen to find out what I think "reasonable" means. I am afraid that I cannot give much of an answer because the "reasonableness" depends on the problem. Perhaps we can remove ourselves for a moment from consideration of the Bill. If the noble Baroness had left her handbag on a chair upon which I wanted to sit and I asked her to remove it, I might think that it was unreasonable if she took an hour to do so. On the other hand, if she was occupying my house and I asked her to move out of the 1501 house, it might be unreasonable to expect her to do so in under six months. A definition of "reasonableness" depends on the situation about which one is expected to be "reasonable". The question of how long is "reasonable" will have to be considered by local authorities, but I should have thought that it was likely to be a question of months rather than longer.
The noble Baroness was also concerned about remediation. As I have said, the time period depends very much on the problems. The noble Baroness also referred to costs and asked whether local authorities would receive more funding. The Department of the Environment already runs a contaminated land survey and a supplementary credit approval programme to provide capital resources to local authorities for such work. Since 1990, some £40 million has been spent under the programme on investigation and remediation works at over 800 sites. The size of the programme is reviewed annually in the public expenditure survey. I have no doubt that that will continue and that local authorities will be affected accordingly.
My noble friend Lord Jenkin asked whether the statement would appear in the guidance. I do not think that guidance can seek to construe primary legislation. There is a danger that if we seek to remove any doubt about the meaning of the term "cause or knowingly permit" in the context of this legislation, it could create the opposite effect in other legislation. I think that we ought to leave the statement as it is, knowing the way in which it will be taken.
My noble friend Lord Peyton referred to the "appropriate person" and said that such expressions should be enshrined in Hansard. I can understand my noble friend feeling that. Indeed, he reminded me of another Bill and a Committee debate about somebody being over the age of 16. The Bill said that a person would be deemed to be over the age of 16 if he was not under the age of 16. I thought that that was fairly explicit. The definition of who is an "appropriate person" will appear in Section 78E and anyone who does not fall within the definition will not be an appropriate person. My noble friend now knows exactly where he is. I should have thought that it was pretty obvious really.
The noble Baroness, Lady Hilton, was also concerned about the contaminated land regime which identifies land as contaminated only if it gives rise to significant harm or water pollution. That will not impose much greater burdens on local authorities than the existing statutory nuisance regime which identifies contaminated land which is prejudicial to health. I hope that I have responded to most of your Lordships' concerns and that your Lordships' will consider that this group of amendments should be approved.