#3220 - Environmental Issues - Commercial Property

Commercial Property: Environment

1. Preliminary Environmental Issues

Buying a site to develop – necessary environmental steps for buyer:

1. Searches and Enquires [i.e. CON29 etc] buyer should commission a ‘desktop study’

Phase I Report	Including site visit
Phase II Report	Including full testing of soil / underground waters etc.

2. Buyer should limit his liability against existing issues identified:

Warranties
Indemnities
Agreement on liabilities
Environmental insurance

Alternatives:

Price reduction
Carve out land – only purchase non-risky section
Impose positive obligations on each party [e.g. clean up land before sale]

3. Make enquiries to the seller

What environmental issues should the client be advised on when buying a property?

What is the environmental damage – be able to identify the problem:

Brown land site – previously used – possibility of contamination:

Potential environmental consequences:

Burning waste
Discharge of dioxins
Contaminated soil
Residents near by?
Dust / noise / smells / vibrations of development work on site

Advise the client on statutory controls that are at risk of being breached:

EU level: Integrated Pollution Prevention and Control [IPPC] Regulation	General principles Use best available techniques E.g. avoid waste / use energy efficiently
Pollution Prevention and Control Act 1999	UK law implementing the EU regulation [IPPC]
Water Resources Act 1991	S.85 Offence to pollute water S.24: offence to abstract water NB. Water is very difficult to control
Environment Protection Act 1990	S.33 Offence to deal with / permit waste or cause harm or pollution “Waste” has a wide definition – includes residues from industrial processes; oils; batteries etc. S.34 Imposes a general Duty of Care not to pollute. This includes preventing waste from escaping.
Environmental Damage (Prevention and Remediation) Regulations 2009 [Textbook p.88]	Duty of care to take preventative measures in the face of imminent environmental harm. Based on “Polluter pays” principle Reg. 13: Take all practicable steps to prevent environmental damage and notify relevant authority of all relevant details Reg. 14: Prevent further environmental damage by taking all practicable steps necessary. Failure to comply with 13 and 14 is an OFFENCE Not retrospective
Climate change Act 2008	Introduced the Carbon Reduction Commitment Scheme. Large organisations must abide by the mandatory scheme to reduce energy usage.
Other	SDLT incentives Carbon reduction committee Codes and guidance = “sustainable development / green leases Common law – Rylands v Fletcher

Advise client on possible defences that may apply: PERMITS

Environment Permitting (England and Wales) Regulation 2010 [EPR]

Client gets a permit for the operation / running of the property
If client is operating within the terms of a permit – then this is a viable defence against any environmental offence.
Reg 12 of the EPR 2010: If the operation comes within the regulation it is unlawful for it to operate without an environmentalpermit - the permit will have conditions attached under which the business must operate- so it is not just getting a permit before you start your business operating but you must continue to operate within the terms of the permit if you are not to commit an offence
Regulator = usually Environment Agency [Part A1 – for significant emissions] of Local Authority [Part A2 / Part B – for less significant emissions])
Grant of a permit if certain criteria are met
The schedules of the regulation set out the various regimes:
- Schedule 13 – waste incineration.
- Schedule 10: landfill
- Schedule 16: asbestos
- Schedule 21: water discharge activities
Permit will usually impose conditions =
- Use best available techniques to dispose of waste [following EU IPPC]
- Employ a certain amount of people
- Complete in a certain time frame.
- Remediation [i.e. pay to clean up the site]
All information is within the public domain

What are the potential consequences of failure to comply with the environmental permit?

EPA can issue the following:

Permit taken away and/ or other conditions imposed
Revocation notice [reg 22]
Enforcement notice [reg 36]
Suspension notice, for serious pollution risks [reg 37]
Remediation notice [reg 57]
Information requirement notice [reg 60]
Fines
Civil sanctions – e.g. pay compensation (under the Civil Sanctions Act)
Imprisonment [if breach is quite substantial].

Environmental Impact Assessment

Town and Country Planning (Environmental Impact Assessment) Regulations 1999
Purpose = to ensure that environmental factors are taken into account when developing land.
Planning permission will not be granted for the development without consideration of environmental information.
Circular 02/99: gives details about the assessment. Para 9: “the assessment is a means of drawing together, in a systematic way, an assessment of a project’s likely significant environmental effects.
Carry out before planning permission application

When is EIA needed?

Reg. 3: Prohibits granting for of planning permission for Schedule 1 and

Schedule 2[on certain conditions only] unless EIA procedure has been

followed.

Schedule 1: EIA is compulsory! [e.g. more than 100 tonnes per day]
Schedule 2 = is the development likely to have significant environmental effects and / or is it in a sensitive area, or size / nature / location of the development means that EIA is required! There are various thresholds to apply to the size of the site and the volume of the operation.

The Local Planning Authority or Environmental Agency decides whether EIA is necessary. They will provide a screening opinion – “Would this particular development be likely to have a significant impact on the environment” ?
Information must be provided by the developer in an “Environmental Statement” (ES) - See Circular Para.21.
Environmental statement is a PUBLIC document
Developer can get a “Scoping opinion” = formal opinion of local authority on what should be included in the ES [Circular Para.21].
It is not possible to avoid EIA process by agreeing with local authority to deal with any adverse environmental effects of the development.
EIA is the correct procedure! Developers cannot rely on planning conditions to deal with the environmental issues.
Advise client – do EIA if in doubt. Don’t proceed to planning application without it!

2. Contaminated land

Asbestos

Control of Asbestos Regulations 2006 = imposes a duty to identify and manage asbestos in non-domestic buildings
Reg. 4: duty to:

Determine whether asbestos is present
Manage the asbestos that is present

Who does the duty apply to: Regulation 4(1) – broad definition which includes owners / landlords / tenants / licensees and potentially managing agents. Where there are TWO parties – the duty will be apportioned in relation to the “nature and extent of the maintenance and repair obligations” owned by each duty-holder.
Enforcement: S.33 (1)(c) Health and Safety at Work Act 1974 – it is an offence to contravene any health and safety regulation.
S. 37 1974 Act: where the offence is committed with the consent / agreement of a manager / director / secretary or similar officer – then that person can be criminally liable also [as well as the organisation].
Penalty: fine or imprisonment [max 2 years]
Procedure to get rid of the problem:
- Used licensed operator to remove the asbestos [e.g. Hazardous Waste Disposal]
- Clearance certificate – to certify that building is now safe

Is the land contaminated?

Criteria [Pt.IIA EPA 1990]:

There is significant harm / significant possibility of harm by reason of POLLUTION in land OR water. This will take into account the proposed USE to which the site will be put.

[Harm = to health of any living organisms, land, property, eco-systems. The Circular provides guidance on different degrees of harm to different receptors.]

[“Significant possibility of harm = unacceptable risk, or more likely to occur than not]

There is a significant pollution linkage

What is the pollution linkage = it describes the causation

Contaminant: the chemical; rotting vegetable; fuel tanks
Pathway: building construction [e.g. future excavation], air, soil, earth, water, rivers, streams
Receptor: nearby residents who become ill due to emissions; buildings; livestock or protected areas.

Special sites:

S.78C EPA 1990: Site that is particularly sensitive to contamination because of the high level of harm and risk [e.g. is there are nearby parks, play areas etc.] Requires notice to be given to Secretary of State and regulation by the Environmental Agency.

Purchasing Contaminated land – liability!

Who is liable?

General rule: the polluter pays!
Contaminated Land Regime [2000] = if the original polluter cannot be found [or is excluded] then the current owner or occupier may ALSO be liable.
S.157 EPA 1990: if a company commits an offence with the consent / neglect of the director, secretary or similar officer – then that person can be personally liable!
Liability is strict and retrospective

How is contaminated land dealt with - procedure:

Mostly under a Planning Regime
Pt.IIA Environment Protection Act 1990 = requires local authority to identify contaminated land and then require the responsible person to clean it up!

#3220 - Environmental Issues - Commercial Property

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