1. Introduction. 2. Purchase of a Green Field Site - Environmental Issues Arising:- 2.1 Planning and Environmental Impact Assessment 2.2 Water, air and waste licences 2.3 Integrated Pollution Control licensing 2.4 Other. 3. Enforcement and Liability. 4. Acquisition and Due Diligence. 5. Officer Liability. 6. Lender Liability. 7. Conclusion. 7.1 Planning Permission Application Schematic. 7.2 IPC Licence Application Schematic.
1. Introduction
Ireland has a very developed system of Environmental Law, most of which is driven by our membership of the European Union. As a result, our legislation is broadly similar to that of other EU countries, although it retains its basis in common law. Generally speaking, however, the standards adopted by the Irish Government are the more stringent standards proposed by the EU, at least in so far as they affect the private sector, and they are applied on a broader basis than is the case in most other EU countries. Monitoring is by local authorities, the relatively newly established Environmental Protection Agency ("EPA"), and by the public whose participation is encouraged both in the planning and environmental licensing processes.
A number of public authorities are involved in the protection of the environment and related areas. Any newly establishing facility in Ireland will require a planning permission and may require the submission of an Environmental Impact Statement ("EIS") if the facility is of a size or type that is categorised as having potential to damage the environment. A facility may also need a range of environmental licences which will govern aspects of the physical building and the operation of the facility.
The relevant Local Authority determines planning applications which frequently is the forum for dealing with environmental issues. It may be legally necessary for an EIS to accompany the planning application. Decisions of the Local Authority can be appealed to an independent appellate board called An Bord Pleanala (the Planning Board). Appeals from An Bord Pleanala are only on points of law by way of Judicial Review to the High Court.
Up until recently, those same Local Authorities also determined applications for air emission, effluent discharge and waste disposal licences and they still do so for facilities which are not required to have an Integrated Pollution Control ("IPC") licence. The EPA has the sole authority to grant IPC licences required for carrying out certain activities which are listed in the First Schedule of the Environmental Protection Agency Act, 1992 (termed "Scheduled Activities"). There is no general right of appeal from a decision of the EPA, although its decision may be challenged in the High Court by way of judicial review on a point of law.
Health and safety issues are dealt with by the National Authority for Occupational Safety and Health.
2. Purchase Of A Green Field Site - Environmental Issues Arising
2.1 Planning Permission
An investor or developer must first of all apply for and obtain planning permission for any proposed development. This will usually involve considerable negotiation with the Local Authority (i.e. the County Council, Urban District Council, County Borough or Corporation for the area) concerning the proposed plans for the development.
Regulations specify which developments require submission by the developer of an EIS. for certain border-line projects the planning authority retains a discretion as to whether or not to seek an EIS.
Application is made to the Local Authority (on notice to the public) who may request additional information before arriving at its decision. Its decision must be made within two months failing which permission is deemed to be granted. The applicant and third parties each have 1 month within which to appeal a decision to An Bord Pleanala. The appeal must be lodged in full within that period and no additional documentation will be accepted subsequently unless in response to additional queries from the Local Authority.
The appeal will be determined by An Bord Pleanala. This determination is normally on the basis of written submissions but for larger projects or projects which attract substantial public interest or participation the Bord may decide to hold an oral hearing on the matter. An Bord Pleanala must make its decision as expeditiously as possible, and must endeavour to ensure that decisions are made within a period of four months (which can be extended if they request additional information). Statistics published for 1993 disclosed that over 95% of appeals were disposed of within 4 months.
The leave of the High Court must be obtained before a decision of An Bord Pleanala may be challenged by way of Judicial Review. Such a challenge must be made within 2 months of An Bord Pleanala's decision. Only a case certified by a High Court Judge as involving substantial grounds for contending that the decision is invalid or ought to be quashed may be judicially reviewed. Judicial Review proceedings could take up to a year, and if appealed to the Supreme Court there would be further delays. The fees vary but are not particularly significant, in comparison to the cost of preparing a planning application and an EIS (if necessary).
2.2 Environmental Licences
Any activity involving emissions to the environment will require to be licensed under the relevant statutory provisions regulating water pollution, air pollution and/or waste disposal. In the case of "non-scheduled" activities i.e. those less likely to cause harm to the environment, one applies to the Local Authority for an effluent discharge licence, an air pollution licence, and/or a waste disposal licence (as the case may be). The publication and appeal procedures are similar to those in the planning sphere. The Local Authority can, and invariably does, impose conditions concerning the volume and concentration of effluent or emission, the type of monitoring to be carried out, the type of equipment to be used and so on, applying the principle of best practicable means not entailing excessive cost (BATNEEC). The Local Authority monitors the activity's performance in the context of that Licence. There is a significant cost factor in preparing the application in addition to the fees charged.
2.3 Integrated Pollution Control
Since 16th May, 1994, the system of Integrated Pollution Control ("IPC") licensing introduced by the Environmental Protection Agency Act, 1992 has been in operation. The EPA is the sole arbiter of IPC applications.
All new Scheduled Activities must have an IPC licence which is an entirely separate application (made to the EPA) from the planning application needed for the physical elements of the development (still made to the Local Authority). IPC licensing for Scheduled Activities which were established prior to 16th May, 1994 are being phased in on a sector specific basis. The current Scheduled Activities to which IPC applies are activities in the areas of extraction of mineral and other materials, energy, mineral fibres and glass, chemicals, food and drink, wood, paper, textiles and leather, cement, and waste disposal. Regulations should be checked to determine whether IPC applies to a particular development. The application requires the provision of extremely detailed information on the proposed process and its potential for environmental impact.
This system is not unlike that pertaining in the UK and IPPC envisaged at EU level and is subject to publication requirements, much like the planning procedure. A policy of transparency is promoted by the EPA.
Emissions to all environmental media, including noise, are caught by the IPC Licence, the aim being to reduce the impact of an activity on the environment as a whole. Waste minimisation is a key feature. BATNEEC (Best Available Technology Not Entailing Excessive Cost) must be applied.
There is no appeal from a decision of the EPA save on a point of law. The EPA must consider an IPC application and issue a notification of its intended decision within two months. Applicants then have 28 days (and third parties 21 days) within which to make submissions to the EPA in respect of that intended decision. (An Bord Pleanala has no function in the environmental aspects of a proposed facility which is the subject matter of an IPC application). IPC licences granted will have conditions applied to them as described above. The fees are laid down by Regulation and are significant. The EPA will also consider any EIS submitted with a planning application in respect of a non-scheduled activity.
An IPC licence is likely to require the operator to introduce some form of environmental management programme, with the EPA's approval, and to have a five year policy of improvement of the operation from an environmental perspective, including for example, a waste minimisation policy with set targets. Monitoring reports are also likely to be required, either on a once off or continuing basis, related to for example the quality of groundwater, nature of emissions, amount of noise emanating from the operation etc. Both capital costs and ongoing operational costs of complying with an IPC licence will therefore be significant. An IPC licence can be reviewed after three years (or earlier if, for example, the activity changes) and more stringent conditions imposed if deemed necessary by the EPA to comply with BATNEEC.
2.4 Additional areas of Environmental Regulation
Other environmental legislation may also be relevant to the setting up of an activity in Ireland, including for instance, health & safety legislation, the Seveso Directive as implemented in Ireland, the storage, use, transport, or disposal of dangerous substances (as defined) legislation, legislation concerning radioactive materials or the transfrontier shipment of both hazardous and ordinary waste.
3. Enforcement And Liability
Liability for environmental damage (including costs of clean up) can attach to an owner or occupier by virtue of legislation and/or common law. Most licences (and indeed the legislation itself) contain a requirement for accidents or incidents to be notified to the relevant Authority, which Authority can serve notices on the owner/occupier requiring remedial steps (including clean-up) to be carried out within a specified period, failing which prosecutions may ensue. The cost of clean-up, if it has to be carried out by the Authorities, and which can be substantial, is chargeable on the owner/occupier. Prosecutions may result in fines, imprisonment, officer liability, or an injunction preventing further activity on the site, taken out by the Local Authority or a third party. Individual common law actions for trespass, nuisance, negligence and Rylands -v- Fletcher seeking damages for personal injuries, property damage and/or economic loss may also result from environmental incidents.
4. Acquisition And Due Diligence
An investor acquiring an Irish company would do well to carry out an environmental due diligence exercise in order to assess the likelihood of the target facing environmental liabilities, and its ability to absorb environment related losses. An environmental due diligence will usually reveal whether or not the target has an environmental management system in place. The objective of the investor must be to ensure that the target treats environmental issues seriously, thus minimising the possibility of environmental liability related costs which could diminish the profitability of the target or the value of the property. Warranties are usually obtained, though as is the case with any other warranties regard must be had to the strength of the covenant. The investor must also be aware that any operating licences the target may have will be subject to review after three years or in the event that the process changes in any significant way in the meantime. The target may also become subject to IPC licensing. Searches can be carried out on public registers to ascertain the nature of the planning and environmental licences obtained and whether any prosecutions have ensued.
5. Officer Liability
All of the major environmental legislation in Ireland contains a provision whereby liability for environmental damage may be imposed on an officer (not just a director) of a corporate body where it is found that environmental damage occurred due to his or her consent, connivance, or neglect. The penalties are substantial fines and/or imprisonment.
6. Lender Liability
Lenders may become liable for the environmental problems of their borrowers if they are shown to exercise control over the borrower's affairs, for example if they enter as mortgagee in possession. In addition, the value of the security may be severely diminished by virtue of an environmental incident. Due diligence similar to that referred to in Section 4 above is vital. Lenders will not per se become liable for the environmental sins of their borrowers, however.
7. Conclusion
Ireland sees itself as a green, environmentally sound country, and has sound commercial reasons to preserve this image, albeit balanced against the need to encourage investment and job creation. Significant environmental penalties are available to the various enforcing bodies and the public is increasingly aware of its ability to influence environmental compliance. Public participation in an "open" procedure is a critical element to be addressed by the developer or investor involved in any planning and licence application.
Investors would do well therefore to have regard to the environmental implications of their proposed investment at the earliest opportunity, and to:
- engage the services of experienced professional advisors to cover engineering, planning, environmental and legal aspects of the project;
- consider carefully the alternatives for the location of the project; and
- consult fully with the relevant authorities prior to making application for permissions or licences;
- prepare for the public aspect of the planning and licensing process.
Planning Permission Procedure
("Act") Local Government (Planning and Development) Acts,1963 to 1992
("EIA Regs ) EC (EIA) Regulations, 1989
("Regs") Local Government (Planning and Development) Regulations, 1994
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
