Court of Appeal gives judgment on PPC permit appeal

The Court of Appeal recently heard an appeal that raises important issues relating to requirements for Environmental Impact Assessments, the granting of environment permits, associated public consultations and the disclosure of reports by the Environment Agency.

R (on the application of Edwards) v Environment Agency and Others ([2006]EWCA Civ 877) concerned the grant of a Pollution Prevention and Control (PPC) permit by the Environment Agency to Cemex UK Cement (formerly Rugby) Ltd. The PPC permit related to the proposed burning of tyres as a partial fuel substitute in a cement kiln. Edwards judicially reviewed the grant of the permit on the grounds that the Agency failed to conduct a full Environmental Impact Assessment and failed to properly consult on the application due to the non-disclosure of two reports on dust emissions. The court at first instance found in favour of Edwards solely in relation to the Agency’s failure to disclose and declined to grant relief (such as quashing the PPC permit). Edwards appealed the decision.

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The Court of Appeal recently heard an appeal that raises important issues relating to requirements for Environmental Impact Assessments, the granting of environment permits, associated public consultations and the disclosure of reports by the Environment Agency.

In R (on the application of Edwards) v Environment Agency and Others ([2006]EWCA Civ 877) the appellants appealed the decision ((2005)EWHC 657 (Admin)) not to quash a Pollution Prevention and Control (PPC) permit granted by the Environment Agency to Cemex UK Cement Ltd (formerly Rugby Cement). The PPC permit, issued under the PPC (England and Wales) Regulations 2000 (the PPC Regulations) related to the operation of an existing cement kiln at Cemex’s Rugby plant at which it proposed to burn used tyres as a partial substitute for conventional fuel. Following a public consultation the Environment Agency granted a permit on the condition that a successful trial was undertaken. Edwards and others, as part of a local residents’ group, applied for judicial review of the permit.

In the judicial review, the court at first instance held that the Environment Agency had not breached EU law relating to environmental impact assessment but had been in breach of its common law duty of fairness in withholding certain internal reports during the permitting process. The reports in question related to both emissions from the kiln, plus dust and particulate emissions from the site as a whole and were produced after the public consultation. However the court, in exercising its discretion, withheld any relief in relation to the breach (for example, by quashing the PPC permit). Edwards and others appealed the decision on the basis that (i) the permit was unlawful due to the lack of an Environmental Impact Assessment (EIA) under EC Directive 85/337 on the assessment of the effects of certain public and private projects on the environment; (ii) the PPC application and consultation were inadequate due to a shortfall in information and lack of impact assessment on dust emissions, and (iii) the judge was incorrect in refusing relief.

The Court of Appeal dismissed the appeal.

One argument raised by the appellants was that the absence of a requirement to conduct an EIA as defined by Directive 85/337 when determining a PPC application exposed a gap in the UK’s implementation of the EIA Directive. The Court held that an EIA was not required as the introduction of a new incineration process to an existing plant did not constitute a project requiring development consent under Directive 85/337. To the extent that Directive 85/337 did apply, the court was satisfied that the information requirements of the PPC application complied substantially with the requirements of an EIA.

In relation to the PPC application, the Court held that the adequacy or otherwise of information supplied was a matter for the Environment Agency to assess as the competent authority. The fact that further information was supplied following the public consultation did not in itself render the initial application and consultation inadequate.

The Court also held that the judge in the judicial review was entitled in his exercise of discretion to refuse to grant relief. The Court of Appeal agreed that failure to disclose the reports was in breach of the Agency’s common law duty of fairness. However, the judge in the judicial review was entitled to take the view that the Environment Agency would not have made a different decision had it consulted further with the public. Of importance was the fact that the Agency reports were based on prediction rather than factual monitoring data. Going forward there were a number of protections available in the light of actual monitoring data arising from the permitted process. These included the Environment Agency’s powers under the PPC Regulations to ensure that relevant permit conditions were not breached and to review and vary the conditions of the permit. On this basis it would have served no benefit for the public to have been re-consulted on what was effectively out of date data. Subsequent monitoring data was readily available to the public through the statutory public register relating to PPC authorised processes.

The Court of Appeal’s decision provides further clarity on the disclosure obligations of the Environment Agency and in particular that the Agency must take care to disclose all potentially material information including internal reports. However, a failure to disclose does not in itself automatically render any previous consultation or future permitting decision void. In this case the Court of Appeal was satisfied that the release of the reports would not have made a material difference to the Environment Agency’s decision to grant the permit. The need for a PPC permit arose due to the decision of Cemex to burn tyres as fuel; the issue of particulate emissions from the site as a whole was effectively secondary to this and, in any event the Agency was satisfied - and the subsequent monitoring evidence bore out the fact - that all emissions from the plant were within acceptable limits. Although the reports were material to the Environment Agency’s decision-making process, the Court acknowledged the ability of the Agency to make its own expert determination on the merits of the application and to adequately regulate the permitted process to ensure the necessary level of environment protection. The Court of Appeal’s decision endorses the Environment Agency, as primary regulator, to come to its own judgments on the potential environment impacts of a permitted process. However, the ruling by no means provides carte blanche for the Agency to make decisions without adequate public consultation.

The decision also endorses the UK Government’s approach to implementation of the EIA Directive. The Court was satisfied, without the need to refer the case to the European Court of Justice, that the current PPC permitting regime adequately addresses the EIA requirements of the Directive where development consent is not required under the planning regime. This clarification may be useful for other operators considering the use of waste as a full or partial replacement to fossil fuels in existing manufacturing processes. Where this involves the adaptation of existing plant, a full EIA would not be required. However, where new manufacturing plant is being constructed and development consent would be required as part of the planning process, it is likely that a full EIA would be necessary in addition (or in parallel to) to the information requirements of a PPC application.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 06/07/2006.