Environment Law update: Miscellaneous 7

United Kingdom
United Kingdom

CSR

The Secretary of State for the Environment, Margaret Becket, has delivered a key note speech strongly supporting Corporate Social Responsibility (CSR). In the speech, she said that issues such as the efficient use of resources should be taken seriously by business some of which have for some time recognised the links between sustainable development and success. She went on to state that CSR is becoming a mainstream consideration, with the market rewarding responsible behaviour, and the companies that measure and manage their environmental impacts often make substantial savings on their operating costs. It also reassures shareholders that companies are managing their risks and identifying business opportunities and customers are reassured by the fact that the products and services provided are not causing environmental damage. Such policies are also likely to motivate employees. In the speech she also identified the boundaries to CSR, i.e. where the market does not reward companies that comply with voluntary standards, and suggested that fiscal measures introduced by the Government will continue to move these boundaries in favour of sustainable development. Such measures, including the climate change levy and landfill tax, have already been implemented. The disclosure of environment information was also addressed in the speech. Examples cited included the Pensions Act, which requires occupational pension funds to disclose the extent to which ethical environmental and social considerations are taken into account in investment decisions, and proposals to include environmental, social and community issues in the annual reports of major companies in the Company Law Review. However there was no indication of mandating environmental reporting for all companies.
(DEFRA, February 2003)

Business in the Community (BITC) an independent charity consisting of 700 member companies with the aim of improving the positive impact of business on society, has published a benchmark CSR index. The index was based on an overall score achieved for strategy, integration and management practice on community, environment, market place and work place, and performance in seven impact areas, which include three social and four environment. The new index incorporates the previous annual index of corporate environmental engagement published by BITC. It covers 122 companies, 53 of which are in the FTSE100 and places the companies into one of five quintiles.
(BITC, March 2003)

Air transport

A report entitled ‘Aviation and the Environment – Using Economic Instruments’, has been published by the Department for Transport as the basis for discussion with stakeholders. It follows the announcement in the 2002 Pre-Budget Report that the Government would be considering the most effective economic instruments to reduce the impact of the aviation industry on the environment. The report provides estimates of aviation’s external environment costs including its contribution to greenhouse gases in the atmosphere and local air and noise pollution. The report is likely to be a precursor to a white paper to be released later in 2003, covering the future development of the aviation industry in the UK over the next 30 years. This will include the Government’s decision on airport development and environmental framework aimed at ensuring that air transport in the UK is sustainable. The Government’s current view is that economic instruments can be a useful way to reduce the environmental impact of air transport by encouraging the use of cleaner and quieter aircraft.
(Department for Transport, March 2003)

The Department for Transport has reissued its consultation document seeking views on the development of air transport in the south east of England. The reissue follows a High Court decision that it was wrong to exclude the option of developing a new runway at Gatwick Airport. As a result, although the content is very similar to the first consultation document, information is now included on options for new runways at Gatwick. The original consultation period had been due to end on 30 November 2002 but has now been extended to 30 June 2003. The paper is one of six consultation documents relating to different regional areas of the UK.
(Department for Transport, February 2003)

Hedgerows

The Government is consulting on reforming the legislation relating to hedgerows. A new draft guide relating to the law and good practice for amendments to the Hedgerows Regulations 1997 (SI 1997 No 1160) has been published. The Regulations contain the criteria for determining whether a hedgerow is ‘important’. Local planning authorities can order the retention of such hedgerows, although they are not required to legally do so. However, under the Regulations most countryside hedgerows cannot be removed without first notifying the local planning authority. A review of the Regulations began in May 1997 on how the system of hedgerow protection might be strengthened. In particular it considered whether the local authority should be given more time to respond to hedgerow removal notices and how the definition of important hedgerows might be improved. The new proposals in the consultation document include new powers to allow local planning authorities to prevent the removal of certain hedgerows that form an essential part of an area. These were identified by the Countryside Agency in 1999. DEFRA is also attempting to make the practical application of the Regulations more simple by proposing to relax the requirement for site visits by inspectors. Responses to the consultation paper must reach DEFRA by 18 April 2003.
(DEFRA, January 2003)

EMAS

The EA has announced that a chemical company has been suspended from the Eco-Management and Audit Scheme (EMAS), the voluntary EU environmental management system introduced by Regulation 761/2001. The suspension follows an unauthorised release of a harmful solvent. An investigation by the EA revealed that staff had been given no proper training on running the system, which had contributed to the release. This is the second occasion on which a UK company has been suspended from EMAS for contravening environment regulations. The EA is under a duty to take action to ensure that companies’ EMAS registration is removed when such a breach occurs.
(EA News, 7 March 2003)

Sustainable consumption and production

DEFRA has announced the launch of a UK strategy for Sustainable Consumption and Production (SCP). The strategy arose from the Johannesburg Summit held in September 2002 and will be developed over the next few months for publication in the summer of 2003. Containing the steps to take forward commitments made in Johannesburg, it will set out a framework for future action by Government and business. The strategy will be linked to existing and proposed UK and EU policies including the Strategy Unit’s report on waste and the Energy White Paper. While concentrating on two major policy areas – energy and waste – the strategy will set out the economic, social and environmental rationale for long term policy planning to uncouple economic growth and environmental degradation.
(DEFRA, 6 February 2003)

Environment awareness

A survey published by the EA has found that there is a general lack of environment awareness among SMEs. The survey was conducted across a range of business sectors which together are responsible for up to 80% of pollution incidents. Of the 1,175 SMEs surveyed, 86% did not think that their activities were harmful to the environment. Furthermore, only 18% could name any environment legislation that applied to them. The survey also found that most of the smaller businesses had no environmental management system in place, with only 17% having implemented one. Larger SMEs were more likely to have an EMS than smaller businesses and the chemical sector was more likely that hotels and restaurants, printing and publishing firms to have one in place.
(EA, January 2003)

Nature conservation – Scotland

A draft Nature Conservation (Scotland) Bill has been issued for consultation until 6 June 2003. The Bill is intended to strengthen the protection for SSSIs, place a duty on public organisations to protect and develop biodiversity and proposes new legislation to address wildlife crime. In relation to SSSIs, the Bill proposes to cease compensation paid to landowners who threaten such habitats with speculative developments. However, landowners will still be compensated where the existing management of the land has to change in order to protect an SSSI.
(Scottish Executive, March 2003)

Food and drink industry

After the publication of the Government’s Strategy for Sustainable Farming and Food in December 2003, producers, wholesalers, caterers and retailers are to work with the Government on a joint strategy to improve the food and drink industry’s economic, environment and social performance. The main remit of the group will be to develop performance indicators for the food industry and will address issues such as pollution, litter, waste, food miles, transport and energy use. A wide range of industry bodies and groups will be represented to work in a partnership with government to establish sustainability priorities and how to tackle these. The food industry sustainability strategy is due to be published at the end of 2003.
(DEFRA Press Notice, 7 March 2003)

Mobile phone masts

A study of mobile phone masts on 109 sites in the UK has shown that emissions range from hundreds to millions of times below international guideline values. As a result the DTI has said that results continue to show that exposure levels of the public are well below recommended limits. However, the study of masts at schools and hospitals is to continue throughout 2003. The survey for testing electromagnetic emissions which began in December 2000, could now be extended to other potentially sensitive sites.
(DTI Press Release, 18 February 2003)

Socially responsible investment

The UK branch of the Worldwide Fund for Nature (WWF) has announced that it is to sell all its shares in BP. The NGO cited the reason as the company’s oil and gas exploration in Alaska, where it is attempting to gain the go-ahead for drilling in the Arctic National Wildlife Refuge. Although the value of the shares was insignificant in financial terms, it is likely to impact on the environment reputation of the company. BP claims it has withdrawn from the Alaskan Lobby Group trying to obtain permission from the Bush Administration to open up the wildlife refuge for exploration. One of the UK’s leading ethical investment funds, Henderson Global Investors has also announced that it is selling BP shares worth several million pounds due to the company’s poor record on worker safety and the environment in Alaska.
(The Independent, 23 January and 8 February 2003)

Environment risks

Friends of the Earth have published a report ‘Open Disclosure: Sustainability and the Listings Regime’ calling for company listings requirements to be reformed to include environmental, social and ethical information. It says disclosure should include impacts such as climate change which is now widely recognised as a risk to the value of a company. The report compares listing regimes in the UK with those abroad and concludes that the UK is behind other stock exchanges in taking into account social and environmental risks. Friends of the Earth point out that many companies already address risks from social and environmental factors on their value. The report cites the case of a mining company XSTRATA whose share price fell 12% over 2 days following the release of news that there was a possibility of a Japanese coal tax, resulting from the country’s commitments under the Kyoto Protocol. The company had failed to disclose risks in this area. At present the Financial Services Authority is reviewing UK listing rules and a consultation paper is expected in summer 2003. This could lead to a policy change by December 2004. There are also moves at EU level to bring in new legislation relating to listing requirements.
(Friends of the Earth, March 2003)

Mineral working

The Office of the Deputy Prime Minister is consulting on a revised draft of Minerals Policy Statement (MPS) on controlling and mitigating the environmental effects of mineral working. The issues concerned were formerly consulted upon as an extension to MPG11 in 2000, and takes into account the responses received to this consultation. The ODPM is now eager to bring in the revised guidance as soon as possible. The major issues on which views are being sought are: the detail included in the revised MPS and specific effects covered in the annexes; the clarity of the explanation of requirements for PM10 and whether the requirements are reasonable; and the limits on noise emissions proposed. The consultation brings together in one MPS and its accompanying annexes, guidance previously dispersed among a number of different MPGs and in research reports on good practice. All views should have been submitted by 11 April 2003.
(ODPM, 14 February 2003)

Aggregates

The Aggregates Levy (General) (Amendment) Regulations 2003 (SI 2003 No 466), which came into force on 1 April 2003 amend the list of industrial and agricultural processes prescribed for the purpose of Section 30 of the Finance Act 2001. These are laid down in the schedule to the Aggregates Levy (General) Regulations 2002 (SI 2002 No 761). The new Regulations will affect Code 004 as far as water is concerned to drinking water and adds in oil filtration and purification. They will also add in the production and processing of drink to Code 012 and the production of growing media for sports pitches and other leisure facilities to Code 020. The manufacture of agricultural lime is clarified as falling within Code 039 as are agricultural and horticultural uses of growing media which fall within Code 044.
(SO, 3 March 2003)

European Union

Environment technologies

The European Commission has published for consultation the Communication ‘Developing an action plan for environmental technology’, which sets out its preliminary views on identifying and tackling the barriers to the development of environment technologies. Environment technologies defined by the Commission as ‘all technologies whose use is less environmentally harmful than relevant alternatives’, includes both low and high-tech applications and knowledge. The focus of the Communication is on four specific areas - climate change, soil protection, sustainable production and consumption, and water - although this scope is likely to be broader in the Action Plan, scheduled for publication by the end of 2003. Poor access to finance, long investment cycles, the need for more targeted research, poor dissemination of new technologies, organisational barriers slowing entry into the market and a lack of awareness and skills are all highlighted as important issues. It is proposed to deal with these barriers by using technical measures such as targeting particular research technologies, using regulatory measures to remove legislative hurdles, by including the costs of environmental impact into markets and by supporting promising pilot-scale technologies. All comments must reach the Commission by 15 May 2003.
(COM (2003) 131, 25 March 2003)

EMAS

The total number of EMAS registration fell by 3.4% in 2002, leaving 3,780 registered organisations and companies in January 2003. In contrast, the number of ISO 14001 certified organisations increased by 42% in the EU over the same period to 20,400. The ISO 14001 is seen as the weaker of the two standards in terms of requirements. Being an international standard, it incorporates the interest of many different countries. It also offers a greater flexibility and clarity to companies wishing to implement it. There are also criticism over the costs of implementing and maintaining an EMAS registration. Germany and Austria which are the traditionally strongholds of EMAS experienced particularly rapid falls in the number of organisations registered.
(European Commission, March 2003)

Organic farming

The European Commission has consulted on a working document for the development of organic farming in the EU. It follows the initiative of the European Council of Agricultural Ministers invitation to stakeholders to share ideas on further action for boosting organic products in Europe. The Commission is interested in receiving views, in order to bring forward a possible future action plan. Some of the issues being consulted upon are based on existing legislation whilst others would need the creation of new instruments. The consultation was closed on 16 March 2003.
(SEC (2002) 1368, 12 December 2002)

WTO

The WTO is to allow UN Environment Programme (UNEP) and Multi-lateral Environmental Agreements (MEAs) ad hoc attendance at its meetings on the environment. This decision is seen as a first step in responding to issues raised at the Johannesburg Summit on sustainable development. The EU has said that it is pushing for permanent observer status for UNEP and the various MEAs at future meetings.
(European Commission Press Release, 20 February 2003)

International

Sustainable development reporting

The World Business Council for Sustainable Development (WBCSD) has developed a web based portal to help companies report on their sustainable development activities. The portal provides examples of reporting practices from 43 companies in 14 business sectors in addition to a guide which can be used as a checklist against a company’s own practices. The portal is not intended to prescribe rigid practices but rather to generate ideas on what information to include in a sustainable development report.
(WBCSD, January 2003)

Tourism

A study published in the journal Ecological Economics has attacked the tourism industry claiming that it is an unsustainable contributor to land use change and pollution, which is leading to the destruction of habitats and species, and climate change. Furthermore, the report argues that the industry could be on the road to self destruction through environmental degradation. It says that the main problem is air travel which in total is responsible for around 10% of global carbon dioxide emissions.
(Financial Times, 23 January 2003)

For further information please contact Paul Sheridan on +44 (0)20 7367 2186 or at paul.sheridan@cms-cmck.com