Environmental impact

As the Earth Summit focused global attention on the environment, specialist environmental lawyers face challenges in responding to EU legislation and tighter controls, says Julie Eldridge

The Earth Summit recently held in Johannesburg has refocused the public's attention on the environment.

But if the Rio de Janeiro summit in 1992 is anything to go by, optimism about the future may be premature.

Some 150 nations planned to replace oil and coal with renewable green sources and vowed to tackle emission levels.

Since then, greenhouse gases have increased by 10%.

In the UK, waste is a hot topic with the government, which earlier this month announced the upgrade of 222 landfill sites to take hazardous waste.

Sites are currently able to take a mix of both hazardous and non-hazardous waste.

From 2004, in compliance with European law, all sites must take one or the other.

For the past year-and-a-half owners of landfill sites have been seeking advice regarding the implications of the new legislation brought in under the Landfill Directive.

Tighter environmental standards governing the linings used in sites, and the collection and management of leachate (liquid run-off created by rain seeping through the sites) will increase the cost of maintenance and therefore influence the choices made.

Owners of landfill sites were required to submit site condition reports by last July, stipulating whether they planned to apply for a licence for hazardous or non-hazardous waste.

Environmental law firms in the UK have faced many other legislative changes over the past few years.

The latest is the draft directive on environmental liability, published on 23 January this year.

It is intended to place responsibility for damage on those who cause it, in a similar fashion to the contaminated land regime under the Environment Act 1995.

Talks started with a Green Paper in 1993 and there has been much controversy since then over the level of control.

The key legal issue is that a company may find itself exposed to unlimited liability claims and that it would be impossible to insure itself against them.

The European Commission estimates costs of around 1.5 billion per year to implement the regime.

Steve Durno, policy adviser to the Law Society's planning and environmental law committee, says that drafting changes suggested by UK lawyers during the consultation have succeeded in moderating the effect of the directive.

Its impact should not unduly burden clients over and above their existing obligations under the Landfill Directive.

'I don't think it is going to cause as much concern as it at first engendered.'

Furthermore, there is a move to increase the amount of information that a company is required to release to the public regarding its environmental impact.

Environmental management standards (EMAS) have been developed by the commission to encourage codes of conduct and a European-wide standard for reporting.

'If there are requirements to report on environmental impact then these will apply to solicitors as well,' says Mr Durno.

'The Law Society has published some guidelines to firms with offices overseas for good practice in terms of employment and the environment.'

With so many changes at the core of this business, it is essential that firms have strategies in place not only to keep up, but to keep ahead of the game.

The UK environment group of City firm Allen & Overy has two partners, nine assistants and a professional support lawyer, all dedicated to environmental issues.

It has a network of lawyers to call on across Europe and a new presence in the US.

In the past two-and-a-half years the group has doubled in size, despite the recent drop in corporate environmental work.

Areas such as environmental litigation, general advisory work, climate change, emissions trading and energy-related work have increased.

'The level of corporate activity has slowed down across the board,' says Matthew Townsend, senior associate at Allen & Overy.

The balance provided by the other areas has picked up for some specific reasons.

'In litigation, we have seen an increased willingness among clients to make indemnity and warranty claims in the context of environmental issues.' He says that this is mostly triggered by clients becoming more aware of the benefits of these clauses and their desire to utilise parts of the contract that take so long to negotiate.

Fresh initiatives from the commission clearly account for the rest of the work volume.

Allen & Overy's high-profile cases include advice given to TXU Energy regarding the disposal of coal and gas-fired power stations and on the impact of the Large Combustion Plants Directive, pending legislation, which will limit general emissions.

It also acted for Phillips Petroleum in its export and decommissioning of a platform to Norway.

Valpak, the largest industry compliance scheme for packaging and recycling packaging waste, is another of Allen & Overy's key environmental clients.

'The most recent advice was on a judicial review of the Environment Agency's interpretation of the packaging waste regulations,' says Mr Townsend.

The High Court found that it should be the responsibility of pubs, clubs and bars to meet recycling targets relating to bottling, whereas before that it was unclear where the recycling duty lay and whether the manufacturers rather than vendors of the bottles should be responsible.

City firm Simmons & Simmons, another major player in the environment sector, has made some changes to its environmental division in the past 18 months.

It is now located within the litigation department, keeping both the contentious and non-contentious arms together.

'Service to clients is functioning better,' says Kathy Mylrea, head of the environment group.

'We now have litigators that are pretty much doing environment law as well.' However, they are not dedicated to environment alone.

One of the recurring issues for Simmons is the capacity in which the Environment Agency is interviewing plant managers.

Simmons is currently acting for two clients in which the Environment Agency has taken unofficial soundings in relation to potential breaches of the Environmental Protection Act 1990.

Is it in their capacity as managers or on a personal level? Pressure has had to be applied to the Agency to make this distinction and establish the best way to advise these clients.

Those clients dealing with environmental matters on a regular basis have become wise to the pitfalls and have learnt a lot, while those hit for the first time are still struggling.

As a result, general advisory work is becoming increasingly specialist, requiring a high level of information.

'We used to write a lot of manuals for clients, but now most have got their procedures in place,' says Ms Mylrea.

'It is now either looking ahead to planning or giving advice when something goes wrong.'

Another client is the Office of Gas and Electricity Markets, which has been advised on the requirement imposed by the Renewables Obligation Order 2002 that electricity suppliers must purchase a percentage of their energy from renewable sources or pay penalties.

'The whole energy-environment link is becoming stronger than it was, particularly the link with renewables.

I think that over the next 18 months that link will get stronger,' says Ms Mylrea.

She agrees that there has been a downturn in transactional work.

Consequently, she is running her team with one fewer lawyer, Julie Thornton, who went to Allen & Overy last year.

'For environmental lawyers that like developing law and applying it to the commercial side, it is a really busy time.

For those that like transactional work it is not quite so exciting.'

Paul Sheridan, partner and head of the environmental department at City firm CMS Cameron McKenna, heads a team that acts for clients including the Atomic Weapons Establishment (AWE).

It acted for them in the judicial review on the lawfulness of the UK independent nuclear deterrent actions brought by an individual, Emanuela Marchiori, and the Nuclear Awareness Group.

This stemmed from a new waste management licence under the Radioactive Substances Act.

The case went to the Court of Appeal and AWE won.

'Environment law is developing at pace; it is difficult to keep up,' says Mr Sheridan.

'It doesn't suit those that are afraid of law; it doesn't suit the managing lawyer.

A very interesting part of it is creating opportunities for businesses through technology and services.

It isn't just a liability regime.'

Since the Freshfields Bruckhaus Deringer merger, this global law firm has experienced broad-based re-structuring, encompassing the environmental group.

It can now offer a cross-border pan-European practice with 20 partners and 60 associates.

Paul Bowden, partner and co-head of the environment planning and regulatory department, says: 'The environ-mental covenant of sale and purchase agreements tend to be second only in complexity to the tax covenant.

Both now need to be negotiated by specialist teams.'

One of the key developments according to Mr Bowden is the progressive introduction of integrated pollution prevention control (IPPC), the new form of integrated pollution control created by the European Union.

This applies to industrial installations, not just processes, and applies to a wide range of activities including landfill sites and farming.

Permit conditions cover energy, waste production and accident prevention.

Controversially, it includes site closure provisions, not formerly covered by earlier controls.

Freshfields partner Jonathan Isted has been acting for British Nuclear Fuels (BNFL) in relation to the challenges by the Irish government to the operation of the new Thorp nuclear reprocessing plant at Sellafield.

The government has brought in various challenges.

Environmental law and public international law has merged in this case.

Mr Isted says: 'We are acting for BNFL who are a third party in a legal challenge brought by Greenpeace against the Environment Agency concerning one aspect of the recent nuclear fuel return from Japan.'

Greenpeace is challenging the Agency's decision to allow the fuel to return to the UK without a licence.

'Environmental law is what you make it,' says Southampton-based Bond Pearce partner and head of its planning and environment unit, Marcus Trinick.

'Pure compliance environmental law dribbles along; the real action is in corporate support and litigation.' A lull in corporate support of about a year has now passed and his team is busy.

'The trouble with that area is that you can't predict it.

It arrives in a rush and then you get a month's famine.

All the signs are that we are on a bit of a roll.'

Offshore and onshore wind energy farms are the key to his client work, involving environ-mental and planning issues.

So, will the aims set at Johannesburg make any difference? The problem is that none of the 192 countries present is legally obliged to stick to the pledges made.

Whatever impact it may have will be many years down the line, but in the meantime, lawyers will need to negotiate the gap between public desire and private reality.

Julie Eldridge is a freelance journalist