Farming industries lead hostile response to groundwater rules

The farming and agrochemical industries have responded in unusually critical terms to proposals issued earlier this year by the Department of the Environment, Transport and the Regions (DETR) for new regulations on groundwater protection. They claim that the proposals will bring limited environmental benefits at a cripplingly high cost - much of which would stem from charges levied by the environment agencies. The agencies themselves are worried about the potential burden of authorising and policing many tens of thousands of groundwater discharges. The Government is now under pressure to reconsider the proposed charging system and to encourage the agencies to apply the regulations flexibly - but without breaching EC obligations.

The draft regulations were issued in January (ENDS Report 276, pp 42-43 ). They are needed solely to complete the overdue implementation of the 1980 EC Directive on groundwater protection. The Government faces the threat of legal action by the European Commission if it fails to transpose the EC rules rapidly and in full, and is understood to be intending to have the finished regulations in place by the end of the year.

The Directive lays down two basic requirements: that discharges into groundwater of the most hazardous "List I" substances are prevented, and that discharges of less hazardous "List II" substances are limited so as to prevent groundwater pollution.

The Directive goes on to lay down different regulatory requirements for direct and indirect discharges of the two classes of substances, and the DETR's consultation paper proposed that these should be implemented by a combination of modifications of existing permits, a new kind of authorisation, and a new system of notices.

The draft regulations follow the wording of the Directive closely because of the need to ensure full compliance with it. Because the Directive's main provisions are written in fairly prescriptive terms, this has given rise to wide concern among respondents that a draconian and disproportionately costly regime is in the offing. In fact, the Directive does contain some important elements of flexibility, and it is how these are interpreted and applied which will determine the regulations' impact on business and the environment (see below).

The proposals have attracted limited responses from industry, even though they may have substantial implications for manufacturers and other activities such as petrol retailing. The most critical response has come from the farming and agrochemicals sectors.

Farmers will be caught by the regulations if they dispose of spent sheep dip and other pesticides to soakaways. Disposal of waste pesticides and tank washings by spraying on land will almost certainly require at least prior investigation. The National Farmers' Union (NFU) also points out that land disposal of farm chemicals such as antibiotics and disinfectants may fall within the scope of the regulations if these are List I or II substances.

The NFU brands the proposals as "poorly justified and expensive", adding to the "plethora" of recent environmental controls on agriculture. The potential £175 million annual charges payable to the Environment Agency are alone close to 10% of the entire industry's profits in 1997.

The NFU also compares this potential bill with the £41 million currently raised annually by the Agency from all other dischargers, arguing that the burden on farmers would be "entirely disproportionate" to the environmental benefits achieved, and cause "irreparable damage" to some sectors of the industry. Moreover, it claims, in no other EC country are farmers expected to pay cost-recovery charges under the groundwater Directive.

The NFU goes on to draw on Environment Agency data to point out that two organophosphate compounds commonly used in sheep dips were detected in groundwater on only 25 occasions between 1993-96 in England and Wales. In most cases the concentrations involved were low, and many of the 25 cases were known to arise from other sources.

The NFU acknowledges that the small number of contamination incidents was due in part to the limited groundwater monitoring carried out by the Agency, but argues that this was presumably attributable to its perception of the risks involved - though lack of resources and the relatively low priority given to groundwater monitoring will also have played a part. Comparable data on pyrethroid dips were not available.

The NFU does not quote similar Agency data for pesticides in groundwater, maintaining instead that newer pesticides and application techniques will greatly reduce the risk of groundwater pollution in future.

Overall, the NFU argues, the benefits of the draft regulations would be heavily outweighed by their costs, particularly for sheep dip. It wants the costs trimmed substantially, and contends that the cost-recovery charging scheme proposed by the DETR - based on the existing scheme for direct discharges - is "manifestly unsuitable" in the farming context. In particular, it wants the initial charge for authorisations dropped on the grounds that when the scheme for direct discharges was brought into effect no initial charge was made for existing discharges - though these, it must be said, had already been consented.

The NFU also believes that charges will encourage farmers to switch from sheep dipping to injecting their animals with protective chemicals such as ivermectin. It expresses concern about the environmental consequences, since the chemical has been known for some years to damage populations of dung beetles.

The National Office of Animal Health (NOAH), which represents manufacturers of animal medicines, is even more damning of the proposals. It points out that the anticipated first-year costs of the draft regulations for sheep farmers would, at £72 million, outweigh the annual value of sheep dip sales by nine times.

"We can only assume," says NOAH, "that either (a) those producing these proposals are woefully ignorant of the economic realities of farming or (b) that there is a deliberate, and cowardly, intent to ban sheep dips by the back door."

Like the NFU, NOAH says it has found no evidence that farmers elsewhere in the EC have to pay for authorisations for groundwater discharges, or indeed have to obtain authorisation at all. It goes on to argue that marketing authorisations of sheep dips, certification of users - currently confined to farmers using only organophosphate dips - and official codes of practice on disposal amount to a system of prior authorisation.

That line of argument does not stand up against the requirements of the groundwater Directive. The same is true of the suggestion by the British Agrochemicals Association that farmers should be required to carry out risk assessments, document the findings and apply necessary controls rather than be forced to the expense of a system of authorisations.

However, concern about the draft regulations is not confined to the farming industry and its chemical suppliers. The Scottish Environment Protection Agency (SEPA) estimates that more than 10,000 farms in Scotland will be affected by the regulations. Options for disposing of spent sheep dip and other chemicals other than to soakaways are severely restricted in some areas, it says. For instance, a waste disposal contractor has quoted £2,000 per load to remove spent sheep dip from the Scottish islands for disposal on the mainland. With costs so high, there is a "real risk of avoidance" of the regulations, according to a paper submitted to SEPA's Board.

SEPA itself is not well placed to implement the regulations. Assessing applications for authorisation will require hydrogeological expertise which is not available "to any significant degree" within the Agency. Fifty extra staff would be needed simply to carry out the authorisation process if this was spread over two years, and policing the rules would also be a "major new activity".

Likewise, the Environment Agency believes it may need to process "many thousands" of applications for authorisation in each of its eight regions - and this would require a "substantial addition" to its workforce even if the rules were made more flexible.

The Agency, indeed, suggests that the draft regulations are over-prescriptive - "specifically in terms of the duty placed on the Agency to authorise (in contrast to the power to take action against) a very large number of activities, which may be both impractical in terms of available resources and unnecessary from a pollution prevention viewpoint." But the problem, as it then concedes, is that that duty is "apparently necessary" to comply with the Directive - an issue which must inevitably be at the forefront of the Government's thinking.

Much of the Agency's response deals with the interfaces between the groundwater regulations and other regimes. These include:

  • IPC authorisations and discharge consents: The Agency believes that existing permits of these kinds will have to be reviewed at most within four years to ensure that they are consistent with the Directive's requirements. Some sites whose operations are partly covered by IPC authorisations will probably need a separate authorisation under the groundwater rules for non-IPC activities, and the two permits will have to be harmonised to ensure consistency. Revision of IPC process guidance notes may also be needed to take account of the groundwater regulations.

  • Waste management licensing: Following earlier pressure from the European Commission on the UK to apply the groundwater Directive to landfills, the 1994 waste licensing regulations included a requirement for a review of licences to ensure that they were consistent with the Directive's requirements.

    However, the Agency points out that the DETR made the mistaken assumption that all sites with waste licences are subject to this so-called "Regulation 15" assessment process. In fact, this applies only to waste disposal. Other licensable operations - notably metal recycling sites, transfer stations and civic amenity sites - "represent a real risk of pollution by List I and II substances", and the Agency suggests that this should be covered by amending the draft groundwater regulations to enable it to apply the notice procedure to these sites where necessary. Alternatively, such sites could be made subject to a Regulation 15 assessment.

    Equally, there are many waste management activities exempt from licensing which may need at least prior investigation under the groundwater protection regime. One example is land spreading of industrial wastes, where clarification will be needed whether this falls within waste "disposal" under the Directive and would therefore require prior investigation and authorisation.

  • Oil storage regulations: Proposed in mid-1996, these would set design standards for new and substantially upgraded oil stores (ENDS Report 263, pp 31-32 ). The Agency believes that the groundwater regulations, backed by a code of practice, could do away with the need for these as a groundwater protection measure, "though some additional measures to protect other controlled waters may be necessary." In fact, the main reason why the regulations were proposed was that leaks from oil stores have been one of the many sources of river pollution incidents for many years.

    The Agency also comments on detailed aspects of the consultation paper. One of the DETR's proposals was that codes of practice could set out the precautions needed to protect groundwater from indirect discharges. Breach of a code would be a possible trigger for the Agency to serve a formal notice.

    The Agency believes that such codes would need to be statutory if they were to serve this function. Preparing them would not be a trivial task, it adds, since most existing codes are insufficiently focused on groundwater protection. Codes for specific activities would probably have to be backed by a generic code.

    The Agency sees some promise in minimising the costs of the regulations by a variety of means. Where, for instance, prior investigations were required under the regulations, existing information could often be used for a risk assessment to obviate the need implied by the DETR's paper for intrusive investigations.

    In addition, the Agency says it will consider the possibility of "groups of applications" to minimise the costs of both prior investigations and the "requisite surveillance" required by the Directive.

    However, there is a sting in the tail. The Agency notes that the DETR envisaged charges only in connection with authorisations, but apparently not for activities covered by codes of practice and the notice powers. It points out that if the latter regime is to have credibility, some inspections will be needed - and this will require cross-subsidy from authorisation-holders or extra resources from some other source.

    Most industry responses to the consultation paper make only limited comments. The Chemical Industries Association (CIA), for instance, argues that more account must be taken of the "principle of proportionality" purportedly built into all EC Directives. Accordingly, it wants "some form of cost-benefit qualification" incorporated in the provisions requiring all technical precautions to be taken to prevent indirect discharges of List I substances and prevent groundwater pollution by List II substances. This, however, the Directive does not expressly provide for.

    Another of the CIA's concerns is that there is no definition of what constitutes a List I substance, making it possible unwittingly to break the law.

    The CIA has also spotted what many other industries have not - which is that the Agency will have the power to prohibit any activity in the ground which "might" lead to an indirect discharge of a List I substance or pollution by a List II substance. Much will clearly depend on how the Agency uses that power - and it has vowed to take a risk-based approach.

    The responses to the consultation paper point to the difficult dilemma facing the DETR. It must, on the one hand, implement the Directive in full. But it is also facing demands for almost every quarter for flexibility and proportionality - issues on which the paper said very little.

    Some of the demands for flexibility - such as those by the BAA and NOAH - clearly cannot be accommodated in the terms proposed. The same is probably true of the Environment Agency's suggestion that "a large number of activities, in particular those involving List II substances outside groundwater protection zones, can be readily controlled by the application and enforcement of codes of practice" - since whether an activity is within or outside a groundwater protection zone is immaterial under the Directive.

    A more fruitful line of argument may stem from a careful examination of the exemptions and key terms in the Directive.

    In respect of List II substances, for instance, a key term is "pollution". This is defined as discharges "the results of which are such as to endanger human health or water supplies, harm living resources and the aquatic ecosystem or interfere with other legitimate uses of water." The definition appears to provide considerable scope for a light touch in regulating indirect discharges of List II substances from activities "on or in the ground", whether within groundwater protection zones or beyond.

    The Directive also provides a number of exemptions. For instance, it does not apply to discharges containing List I or II substances "in a quantity and concentration so small as to obviate any present or future danger of deterioration in the quality of the receiving groundwater" - the interpretation of "small" and "deterioration" being crucial. Also exempted from the general ban on List I discharges are releases into groundwaters "permanently unsuitable for other uses."

    Official experience in applying these terms should in principle have accumulated since 1994 under the "Regulation 15" provisions of the waste licensing regime. However, the Environmental Services Association (ESA), which represents waste businesses, points out that interpretation of these provisions "remains shrouded in uncertainty."

    One example is the exemption for small quantities and low concentrations of List I and II discharges. The ESA says that interpretation has varied considerably across the country: "In some cases discharges at the molecular level have been considered contrary to the Directive, in others drinking water standards have been used to determine acceptable limits, whereas elsewhere consideration has been given to background [groundwater] quality plus two standard deviations."

    The ESA also says it is unaware of any groundwater being deemed to be "permanently unsuitable for other uses", "despite demonstrable contamination as minewater, saline intrusion and strata giving very poor yields." This, it argues, is contrary to both the spirit and letter of the Directive.

    According to the ESA, the Agency has drafted internal guidance on these and related issues on Regulation 15 and, while this is believed to take a "draconian" approach, the guidance has not been made available to the waste industry. For its part, the Agency says that the guidance is still in preparation and will need to take on board the final version of the groundwater regulations. It is this which may provide the first insight into how flexibly the regulations will be applied by the Agency to both landfills and other activities.

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