Environment Law Update: Water 2

United Kingdom

Water competition

From 17 August 2000, the threshold for the granting of inset appointments has been lowered from 250 megalitres of water per year to 100. Inset appointments provide for the existing regulated water or sewerage supplier to be replaced by another for a specific area. An applicant must meet one of three criteria: the site must not be currently served by a licenced supplier, the existing licenced supplier must agree to the inset or, the customer must use at least 100 megalitres of water per year. By lowering this threshold, Ofwat is hoping to open up market competition even further. To date, 8 inset appointments have been granted. The conditions apply in England only, the National Assembly for Wales is considering a similar lowering of the threshold level for customers whose undertaker is wholly or mainly in Wales.
(Ofwat News Release, 17 August 2000)

Service standards

Coming into force on 20 September 2000, the Water Supply and Sewerage Services (Customer Service Standards) (Amendment) Regulations 2000 (SI 2000 No 2301) update the 1989 Regulations improving consumer rights and ensuring that customers receive good quality service from their water companies. The improved rights include: an increase in compensation pay outs from £10 to £12 for domestic users and from £10 to £50 for business customers when the water companies fail to meet specified standards; responses to written complaints and bill queries from customers must be sent by water companies within 10 working days; a minimum of 48 hours written notice must be given by water companies for planned supply interruptions of more than 4 hours; the time for restoring an unplanned interrupted supply must be cut from 24 to 12 hours and automatic compensation payments must be made to customers who have had an interrupted water supply or sewer flooding.
(S0, August 2000)

New water regulator

Mr Philip Fletcher was appointed Director General of Water Services on 1 August 2000, replacing 11 years of service by his predecessor, Sir Ian Byatt. Philip Fletcher's previous post was a Receiver for the Metropolitan Police District. He has served in major management roles, primarily with public finance and procurement emphasis.
(Biographical note, Ofwat Website, 3 August 2000)

Companies' charges scheme

Ofwat issued a consultation document, seeking views on a number of charging matters that will need to be taken into account when considering companies' charges schemes next year. The document, "Approval of Companies' Charges Schemes 2001-02" contained 4 issues which were identified for the consultation as follows: balancing measured and unmeasured tariffs, with proposals to set the maximum allowed tariff deferential at £30 for 2001-02; low user tariffs; social tariffs for vulnerable customers and reduced charges for customers who have responsibility for their own sewers rather than the water company. Comments were invited until mid-August.
(Ofwat, June 2000)

Water companies' performance

Two reports have been released by Ofwat: "1999-2000 Report on Financial Performance and Expenditure of the Water Companies in England and Wales" and "1999-2000 Report on Levels of Service for the Water Industry in England and Wales". The Reports reveal that capital investment levels in the water industry last year continued at record levels and industry operating costs fell in real terms. Service standards to customers are being maintained, whilst companies are operating more efficiently, which has resulted in lower bills for consumers. The Drinking Water Inspectorate has confirmed that water companies have continued to improve the overall quality of drinking water and the Environment Agency has been satisfied with the environmental improvements achieved over the past 5 years.
(Ofwat, July 2000)

Discharge of dangerous substances

The Environment Agency has launched a consultation exercise seeking views on proposals for a consenting policy for discharges of dangerous substances to surface waters. One of the Agency's aims is to maintain and improve surface water quality throughout England and Wales and a key method of achieving this is through the control and monitoring of discharges to surface waters. The existing consenting policy is now viewed as deficient, in that although it captures all significant discharges, it may not include consents where dangerous substances are discharged in quantities that pose no threat to the water environment. The new policy seeks to ensure effective control of less significant discharges as well as environmentally significant discharges. The policy adopts the principle that the larger the risk to the environment, the closer the degree of Agency regulatory involvement. Comments are invited until the end of November with a provisional time scale for implementation of new discharge consent determinations of April 2001. It should be noted that these proposals relate to discharges subject to the Water Resources Act 1991 and not to discharges regulated by other regimes such as IPC permits, nor do the proposals apply to discharges to groundwaters.
(EA August 2000)

Water investment

As the water industry's environmental regulator, the Environment Agency has published details of their view of the benefits to the environment of the investments to be made by water companies for the period 2000-2005. With the recent Periodic Review (Ofwat's review of prices that water companies may charge for 2000-2005) now complete, Ministers have approved the programme of improvements to the environment to be made by water companies during this period, known as the National Environment Programme. In their report, "Achieving the Quality", the Agency reports on the programme which covers more than 6,000 projects aiming to improve water quality in coastal areas as well as in rivers and lakes, prevent the discharge of raw sewage, prevent over-abstraction of rivers and wetlands and meet the needs of European Directives and national legislation. The Agency claimed that more than 100 important wildlife sites will be protected through this programme, 3,600 kilometres of river will be protected or improved and more than 4,500 overflows of sewage discharges to rivers and the sea after storms will be dealt with.
(EA, July 2000)

Pipe laying

Ofwat has updated Information Note No. 22, first issued in July 1995 and posted the updated version on its web site. The Note explains the legal responsibilities and powers of water and sewerage companies when laying pipes on private land. The company should normally give at least 3 months' notice to the owner and occupier of private land, 42 days' notice should be given for altering an existing pipe and 7 days for minor maintenance or repairs. Compensation is payable for any depreciation in the value of the land caused by the presence of the pipe, together with an allowance for disturbance and actual losses. Any complaints should be addressed to The Director General of Water Services who has the authority to investigate complaints about pipe laying on private land. Where the complaint meets certain criteria, the Director may make an award of up to £5,000 against the company.
(Ofwat, July 2000)

Water quality

The Drinking Water Inspectorate's tenth annual report covering 1999 has been published, revealing that of the 2.8 million tests carried out during 1999, 99.82% met stringent quality standards. The Inspectorate highlights some of the main achievements in its tenth year of operation: pesticides have been virtually eliminated from water supplies; enforcement measures have resulted in a year on year improvement in compliance with stringent standards; rehabilitation of distribution systems has resulted in significant improvements in certain parameters such as iron; the Inspectorate's prosecution policy has necessitated improvements by water companies; and the Inspectorate's open policy on information, giving the public access to all reports. Another main feature for 1999 was the implementation of the Cryptosporidium Regulations, seen as a major advance in water supply public health protection.
(DWI, July 2000)

The Government has published the results of its fifteen headline indicators of sustainable development, as published in "Quality of Life Counts: Indicators for a Strategy for Sustainable Development for the UK", published last year. River water quality is one of these indicators and results reveal that the UK's rivers are cleaner than ever recorded with 95% of rivers rated good or fair in 1999 compared with 92% in 1990. The improvements have been achieved through tougher regulation and enforcement, investment by water companies in sewerage disposal and greater pollution prevention by the Environment Agency.
(DETR News Release, 21 September 2000)

European Union

Bathing water quality

The European Commission has referred the UK to the Court of Justice for non-respect of the Bathing Water Quality Directive (76/160/EEC). This Directive aims to ensure that bathing waters meet minimum quality criteria by establishing a set of binding and guide Community standards for a range of key parameters and by requiring Member States to carry out regular water quality monitoring. The UK has failed to ensure compliance with some of the limit values set by the Directive for a number of bathing waters across the UK.
(European Commission News Release, 27 July 2000)

Shellfish waters

The European Commission has referred the UK to the European Court of Justice for its failure to ensure compliance with the Shellfish Waters Directive (79/923/EEC). Under the Directive, which aims to protect and improve the quality of coastal and brackish waters which have been designated for the support of shellfish life, Member States must designate shellfish waters for which they must establish pollution reduction programmes to ensure high quality shellfish products for human consumption. The UK has not designated enough areas as shellfish waters, nor has it drawn up the necessary programmes for reducing pollution in these waters.
(European Commission News Release, 28 July 2000)

Water framework

Following the 5-year long review of fundamental Community water policy and 3 years of intense negotiations, an agreement was finally reached on the proposed Directive establishing a framework for Community action in the field of water policy. The proposals aim to prevent the further deterioration of water resources and enhance the protection of improvement of the aquatic environment, encompassing groundwater as well as surface waters. The phase-out of discharges of hazardous substances to water courses is also an aim of the Directive. The main overall objective is to achieve "high quality" waters in all Member States within 15 years. See article by Verity Shepley (entitled Water Framework Directive).
(European Commission, July 2000)

Water pricing

The Commission has published a Communication on pricing policies for enhancing the sustainability of water resources. The Communication comes alongside other recent initiatives designed to give more weight to economic instruments in environmental policies. The Water Framework Directive also promotes the use of water charging as an incentive for the sustainable use of water resources and to recover the costs of providing water services. The Communication has been produced to clarify the main issues relating to the use of water pricing for enhancing the sustainability of water resources, to present the rationale behind the Commission's preference for a strict application of sound economic and environmental principles in water pricing policies and to propose a set of guiding principles that will support the implementation of the Water Framework Directive.
(COM (2000) 477, 26 July 2000)