Brexit and environmental law. Environment, trade and the potential for change. The EU, the UK and the environment. Legal Director, Bond Dickinson LLP

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1 STRATEGIC ISSUES ENGLAND AND WALES : (2016) 28 ELM 37 Brexit ad evirometal law Sarah Holmes Legal Director, Bod Dickiso LLP Global ad atioal awareess of the ecoomic, social ad wider impacts of climate chage, resource availability ad pollutio has largely developed over the past 40 years, which is coicidetal with the UK s period of membership of what is ow the Europea Uio. I the early years of membership, the UK was kow as the dirty ma of Europe. That is o loger the case. Much of the evirometal regulatory framework that has delivered so much of this beefit derives from the body of Europea evirometal law that has developed ot simply to set a level playig field for busiesses tradig withi the Sigle Market, but to achieve the EU s loger-term visio of a safe ad sustaiable society. The future directio of eviromet ad eergy policy ad law i a idepedet UK would be heavily iflueced by ew tradig arragemets, iteratioal treaty obligatios, devolutio ad the political make-up of the govermets ad admiistratios i the UK. As the referedum draws closer this article looks at potetial implicatios of a Brexit (Britai+exit) vote for the extesive body of evirometal law that applies i the UK. Eviromet, trade ad the potetial for chage The questio to be posed to voters i the forthcomig referedum is biary: i or out? Voters will ot have a opportuity to select their preferred optio for a post- Brexit UK. If the majority vote is i favour of Brexit the it will be up to the icumbet govermet to determie the ature of future relatioships. It is coceivable that egotiatios could spa successive govermets, depedig o the legth of time take to egotiate the withdrawal agreemet. Furthermore, through its membership of the EU, the UK trades with other coutries uder more tha 50 tradig agreemets. These, as well as replacemet EU tradig arragemets, would eed to be the subject of separate, ew tradig agreemets uless the UK relied upo its membership of the World Trade Orgaizatio. Where would this leave evirometal law i the UK? The extet to which Brexit could deliver sovereigty for the UK i terms of evirometal law would ot be kow for some time after a referedum vote i favour of Brexit. Much would deped o the ature of replacemet tradig arragemets with the Europea Uio, which could rage from retetio of access to all or part of the Sigle Market to leavig the Sigle Market altogether ad istead egotiatig ew free trade arragemets with the EU. All optios have differet implicatios for UK evirometal law. The terms that the post-brexit tradig arragemets with the EU would determie iclude: The level of access the UK retaied to the Sigle Market, whether free or market restricted movemet of maufactured goods, agricultural ad fishery products, ad services. This would be ifluetial i the extet to which the UK should expect to cotiue to comply with EU evirometal law. The extet to which there would be free movemet of people betwee the UK ad the EU, icludig withi the evirometal services sector. How much the UK cotributed to the EU budget for access to the Sigle Market ad/or paid i tariffs for access to agreed EU markets ad reciprocal provisios for tradig parters. The extet to which existig ad future EU evirometal laws would apply to the UK ad be eforceable by the EU (ote that all exports to the EU must comply with product quality stadards). The extet to which the UK would have represetatio i future EU evirometal law ad policy. The extet to which the UK could egotiate its ow tradig agreemets, icludig ay evirometal provisios, with other atios. The replacemet tradig arragemets would be egotiated separately from, ad are outside the scope of, the withdrawal treaty. I the absece of agreed UK EU tradig arragemets if Brexit takes effect, the World Trade Orgaizatio s Geeral Agreemet o Tariffs ad Trade (GATT) would apply. The EU, the UK ad the eviromet Uder the EU subsidiarity priciple, actio should oly be take at EU level whe objectives caot be sufficietly achieved by Member States actig aloe. The growth of EU evirometal law reflects the cross-border ature of may evirometal issues ad the desirability of prevetig coutries from seekig competitive advatage by allowig harmful evirometal practices. EU evirometal law has developed to set commo rules for product stadards, to require that pollutig activities are regulated through permits ad to set targets (eg improvig air quality, reducig ladfill of waste, reducig greehouse gas emissios ad raisig bathig waters stadards) to ifluece ivestmet ad behaviour. This, i tur, has eabled evirometal objectives to be icluded i competitio ad trade arragemets ad has provided loger-term strategic frameworks ad market scale to ecourage ivestmet i iovatio, ew markets ad techologies, as well as the geeratio of employmet ad ecoomic growth. The Europea 7th Eviromet Actio Programme is curretly guidig EU eviromet policy for the period

2 38 (2016) 28 ELM : STRATEGIC ISSUES ENGLAND AND WALES to It focuses o the protectio, coservatio ad ehacemet of the EU s atural capital, turig the EU ito a resource-efficiet, gree ad competitive low-carbo ecoomy, whilst also safeguardig citizes from eviromet-related pressures ad risks to health ad wellbeig. Proposed legislatio ad amedmets to existig EU legislatio are focused o the followig eablers to help deliver these goals: better implemetatio of legislatio better iformatio by improvig kowledge base more ad wiser ivestmet for eviromet ad climate policy ad full itegratio of evirometal requiremets ad cosideratios ito other policies. The UK has ot bee aloe i challegig the EU o uecessary burdes from EU legislatio. A umber of evirometal directives, icludig the Habitats Directive, have bee ad are uder scrutiy by the Europea Commissio as part of its Regulatory Fitess ad Performace Programme, stregtheed followig the lauch of the EU Better Regulatio Ageda i May Some chages to EU evirometal law have bee proposed ad more are expected. The UK is active i the developmet of EU evirometal policy ad law. I the recet EU cosultatio o the Circular Ecoomy package of measures, the UK made clear that Commissio proposals should be developed with Member States, allow flexibility, esure that costs are justified by expected impacts, avoid uecessary burdes o busiess ad create a eviromet that welcomes iovatio, improves resource productivity ad helps icrease busiess competitiveess. I some areas of evirometal law the UK has goe further tha the miimum stadards required by Europea law. The UK Govermet s Better Regulatio drive has idetified a umber of provisios for relaxatio, for example from 1 April 2016 the removal of the requiremet to register premises i Eglad that produce hazardous waste. 2 Idepedetly of EU evirometal law, the UK became the first coutry i the world to itroduce legislatio to set legally bidig carbo reductio targets. The Climate Chage Act 2008 ad the Climate Chage (Scotlad) Act 2009 are examples of UK evirometal laws that do ot rely o the Europea Commuities Act 1972 for their effect ad so would ot require legislatio to remai effective post-brexit. UK evirometal law post-brexit Whilst the ature of the UK s tradig relatioship with other coutries will be determied by future agreemets, it is possible to cosider the likely status of the differet EU evirometal legal ad policy istrumets post-brexit, together with the scope for chages to be made to evirometal laws withi a idepedet UK. The Treaty o the Fuctioig of the Europea Uio, Article 11 The Treaty o the Fuctioig of the Europea Uio (Treaty) would cease to have effect two years after the UK gives otice of its itetio to leave the EU, uless either a extesio is uaimously agreed by all Member States or the withdrawal treaty betwee the UK ad the EU has bee completed. Notice of withdrawal could be give some moths after the referedum to give time for the EU ad the UK to prepare for the complexities ivolved. The withdrawal treaty (which is separate from ay ew tradig agreemet) would eed to be approved by a qualified majority of the Coucil ad of the Parliamet of the EU (55 per cet of EU coutry votes, which must represet at least 65 per cet of the total EU populatio). 3 Pedig withdrawal, the UK would be subject to EU evirometal laws icludig ew provisios, amedmets to existig laws, eforcemet actio by the Europea Commissio ad judgmets of the Court of Justice of the Europea Uio (CJEU). Article 11 of the Treaty requires that evirometal protectio requiremets must be itegrated ito the defiitio ad implemetatio of the Commuity policies i particular with a view to promotig sustaiable developmet. However, Article 11 does ot apply to domestic legislatio i Member States, so would make o differece to law-makig i the UK post-brexit. Article 11 would cotiue to apply to policy ad law developed by the EU post- Brexit. EU regulatios EU regulatios o product stadards for goods exported to the EU would eed to be complied with. EU regulatios are immediately eforceable i Member States without the eed for atioal legislatio. All would cease to apply i the UK o withdrawal from the EU. Uder ay departure situatio the UK would eed to legislate if it wished to set the same bidig stadards for goods withi the UK market as for products exported to the EU. Alteratively, UK jurisdictios could choose to relax product stadards so that differet (lesser or greater) stadards were applied for goods produced or imported for cosumptio withi the relevat UK jurisdictios. It would be possible for differet UK jurisdictios to require differet product stadards. Oe example of a EU product regulatio is Regulatio (EC) No 1907/2006 of the Europea Parliamet ad of the Coucil o the Registratio, Evaluatio, Authorisatio ad Restrictio of Chemicals (REACH), which prohibits the etry ito the Sigle Market of ay chemicals, substaces ad products that do ot meet specified requiremets. Other EU regulatios cotrol hazardous substaces i electrical products, vehicle emissios ad fuel quality. 1 c_2015_3261_e.pdf geaff/ pdf.

3 STRATEGIC ISSUES ENGLAND AND WALES : (2016) 28 ELM 39 EU directives Compliace with EU directives would deped o future tradig arragemets with the EU. Most EU evirometal law takes the form of directives, which are bidig as to the result to be achieved but leave Member States a choice of form ad methods. Some EU product stadards, eg packagig ad packagig waste, are set out i directives ad, like EU product regulatios, would eed ew UK laws if the stadards were to be maitaied withi the UK market. Directives are usually trasposed i the UK by statutory istrumets. Alog with a array of competeces that iclude urba plaig, housig, ecoomic developmet ad agriculture, forestry ad fisheries, resposibility for evirometal policy ad law is devolved to each of Scotlad, Wales ad Norther Irelad, who ca act idepedetly albeit withi the commo framework of EU law. Some traspositio istrumets, such as the Eergy Savigs Opportuity Scheme Regulatios 2014, apply across the UK. I cotrast, Eglad, Scotlad, Wales ad Norther Irelad have separately trasposed the EU Waste Framework Directive, with some differeces betwee jurisdictios; Eglad is the oly UK jurisdictio ot to have the power to regulate for the separate collectio of food waste. Most but ot all evirometal directives are trasposed uder sectio 2(2) of the Europea Commuities Act Some of the UK evirometal laws refer to EU directives for defiitios ad other provisios, for example the defiitio of waste i Article 3.1 of the Framework Directive o waste. Legislatio would be eeded to avoid legal vacuums ad to esure that the UK complied with its existig iteratioal evirometal treaty obligatios, although these are geerally less demadig. The sheer scale of evirometal law withi the UK ad its reliace o EU law would make a law-by-law assessmet of chages a sigificat ad time-cosumig task. It is reasoable to assume that the UK would ot be permitted access to the EU Sigle Market uder coditios that would eable it to gai a competitive advatage by reducig evirometal (ad other) stadards. If the post- Brexit UK sought access to the Sigle Market alog the lies that Norway does the the icorporatio of future EU evirometal law to which the UK would be subject after Brexit would eed to be addressed, as would the status of decisios of the CJEU o relevat evirometal law. If the UK was required to comply with existig ad future EU evirometal law the logically the CJEU would remai the highest authority for the iterpretatio of such laws, whether made before or after Brexit. The ew tradig arragemets would eed to address whether the UK would be able to seek ruligs from the CJEU itself. If a post-brexit UK sought to trade with the EU through oe or more free trade agreemets the it would ot be subject to EU evirometal law. Brexit would provide a opportuity for successive govermets ad admiistratios withi UK jurisdictios to form their ow evirometal policies ad agedas, revokig or amedig or retaiig existig evirometal laws accordigly. There would be a period durig which the withdrawal treaty would be egotiated ad the UK would remai a Member State of the EU, i priciple required to implemet ad apply EU law. Prior to withdrawal, legislatio would be eeded to avoid vacuums i existig evirometal laws o the revocatio of the Europea Commuities Act Whilst the CJEU would o loger have jurisdictio i respect of the iterpretatio of EU evirometal law, it is ot clear what status judgmets of the CJEU would have i respect of EU derived evirometal law retaied i a free trade agreemet Brexit. Although the UK would o loger be subject to EU evirometal law, much of such law is icorporated withi UK law ad already the subject of judgmets of the CJEU that UK courts have applied where relevat. It may be that a distictio would be draw betwee those cases where UK courts have already applied CJEU judgmets ad those cases where it has ot, although the ratioale for such a distictio would ot appear logical. Evirometal law would ot be the oly area of law to cofrot such issues, ad Parliamet would eed to itroduce legislatio to miimise the potetial for ecoomic ad evirometal damage durig the trasitio from EU Member State to idepedet state. Iteratioal treaties UK obligatios uder iteratioal treaties would be uaffected but where the UK relies o EU legislatio to comply, eg o climate chage, ew UK legislatio would be required. Followig Brexit the UK s emissios reductios commitmets uder the UN Framework Covetio o Climate Chage would eed to be removed from the EU obligatio ad a UK atioally determied cotributio (NDC) submitted to the UN. Depedig o the terms of the tradig agreemet(s) reached with the EU the UK may or may ot remai subject to EU reewable eergy ad eergy efficiecy targets, ad may or may ot participate i the EU emissios tradig scheme. Withdrawal from the latter would require trasitioal arragemets for participats to be agreed. EU evirometal policy The UK would lose ifluece over EU evirometal policy, which is developed by the Europea Commissio i cosultatio with Member States. The UK has bee active ad relatively effective i cotributig to the developmet of EU evirometal law ad policy. The tradig agreemet betwee the EU ad the Europea Ecoomic Area (EEA) allows EEA Member States to be cosulted o proposals but their views have o formal ifluece. A ew tradig arragemet with the EU could iclude provisios for cosultatio with the UK. Sovereigty The extet of true UK sovereigty over evirometal law ad policy will deped o ew tradig arragemets. Followig Brexit UK jurisdictios could be empowered to develop their ow evirometal visios ad associated policy ad legislatio, to the extet compatible with iter-

4 40 (2016) 28 ELM : STRATEGIC ISSUES ENGLAND AND WALES atioal treaty obligatios ad ew tradig agreemets with the EU, as well as with other coutries. The EU has strict cotrols o the growig of geetically modified crops, usig the precautioary priciple to require detailed, evidece-based evaluatios o a crop-by-crop basis. Subject to the terms of ay tradig agreemets, a idepedet UK could decide to take a differet approach more leiet or stricter although this could lead to differet approaches withi the UK if devolved admiistratios disagreed with each other. The much criticised (ad curretly udergoig some reform) EU Commo Agricultural Policy ad Commo Fisheries Policy would cease to apply withi the UK o withdrawal from the EU. As agriculture ad fisheries are devolved competeces, future UK policies would eed to be egotiated domestically, alog with replacemet fudig streams. Tariffs to be applied to agricultural ad fishery products exported from the UK to the EU, ad vice versa, would be the subject of the future trade agreemet(s). Reciprocal agreemets with other coutries would be eeded to permit UK fishig boats to operate i their waters, icludig ay cotrols over sustaiability of fish stocks. Devolutio Devolutio withi the UK poses particular challeges for a post-brexit situatio. Uless a joit UK evirometal regulatory framework is established post-brexit to set commo stadards ad to provide loger-term stability, the loss of the commo EU evirometal law framework could lead to greater divergeces betwee regulatory regimes i UK jurisdictios, seekig differetiatio ad/or competitiveess, whether i the iterests of ecouragig ew ivestmet or i reducig regulatory requiremets. For example, the waste law aspects of developig a circular ecoomy are devolved. Wales ad Scotlad are actively promotig circular ecoomy policies i cotrast to Defra s decisio to step back from implemetig ay ew policies cocerig waste ad recyclig i Eglad. It is coceivable that busiesses operatig across UK jurisdictios may face more red tape post-brexit owig to the eed to avigate a greater array of differeces betwee UK jurisdictios, freed from the commo framework provided by EU evirometal law. By way of compariso, policy areas withi the UK that are devolved ad ot withi the competecy of the EU iclude educatio ad tow ad coutry plaig. Tow ad coutry plaig EU law has little ifluece over tow ad coutry plaig i the UK, which uder the subsidiarity priciple is largely left to the competeces of Member States. Two aspects of evirometal law that do have a effect o developmet cotrol withi Member States cocer the provisio of evirometal iformatio to iform cosetig decisios ad the attaimet of specified stadards, for example i respect of air quality, water quality, habitats ad species. The process of evirometal impact assessmet (EIA), ow set out i Directive 2011/92/EU, is iteded to esure that prior to the grat of developmet coset for certai projects that are likely to have sigificat effects o the eviromet the decisio-maker is preseted with full iformatio o such effects, gathered durig a process i which the public is cosulted alog with statutory cosultees. Revisios to the 2011 EIA Directive are set out i Directive 2014/52/EU, which is required to be trasposed by 16 May Followig Brexit, it would be up to each of Eglad, Scotlad, Wales ad Norther Irelad to retai as much or as little of the EIA process as they wished i their respective plaig systems. Sice it would be extremely ulikely that a withdrawal treaty could be egotiated so quickly, with oly a year to go util traspositio of the 2014 EIA Directive is required it is likely that the requiremets would fall to be trasposed eve i the evet of a Brexit vote. Protectios afforded by the Habitats Directive ad the Wild Birds Directive are see by some as vital for the protectio of habitats ad species across the EU but by others as impedimets to developmet. The Habitats Directive prohibits the grat of coset for ay developmet that would adversely affect the itegrity of a Europea site of ature coservatio importace (formig part of the pa-eu Natura 2000 etwork). It is the oly legal provisio withi ay UK plaig regime where the outcome of a assessmet is capable i law of determiig whether or ot coset ca be grated. Post-Brexit, it would be up to idividual UK jurisdictios to decide whether they retaied the substace of these directives. The balace of competeces betwee the EU ad the UK Betwee December 2012 ad December 2014 the Coalitio Govermet coducted a review of the UK s relatioship with the EU. This led to the publicatio of 32 reports. 4 The review was ot udertake to predetermie or prejudge proposals for chages to the EU or about the appropriate balace of competeces. May stakeholders were cosulted. The Executive Summary to Report 10 o Eviromet ad Climate Chage stated that:... the Govermet has recogised the eed for a ope-mided debate aroud EU competece o the eviromet ad climate chage withi the cotext of fidig a appropriate balace ad exploitig syergies betwee the eed for ecoomic growth ad a sustaiable approach to the future. Whilst there ca be tesios betwee evirometal stadards ad competitiveess, the evidece paits a more uaced picture i which some sectors of busiess welcomes some degree of cross-eu evirometal regulatio. For example, EU targets o waste ad o climate chage were see by may as providig greater certaity for ivestors ad a importat spur for growth i the rapidly expadig evirometal ad low carbo services ad products sector. I additio, EU regulatio o chemicals ad other evirometal 4 The reports are available at

5 STRATEGIC ISSUES ENGLAND AND WALES : (2016) 28 ELM 41 stadards was also see by may busiesses as importat i providig a level playig field across the Sigle Market. 5 A overview Evirometal law at iteratioal, EU ad UK level has evolved from cotrollig poit source pollutio i the 1970s ad 1980s to settig up mechaisms to itervee i markets ad chage behaviour. Whilst a post-brexit UK would remai subject to iteratioal treaty obligatios, these are ot geerally as demadig as EU obligatios ad lack the more robust eforcemet framework that applies to Member States who fail to comply with EU law. Further, citizes have relied o EU evirometal law to seek to protect ad improve air quality, water quality ad decisiomakig quality i the UK. Evirometal lawyers will recall the trumpetig of Directive 2004/35/EC o evirometal liability with regard to the prevetio ad remedyig of evirometal damage as the first piece of legislatio to seek to protect the eviromet for its ow sake ad ot simply because of a coectio to owership of property ad other assets. If the UK remais withi the EU or, followig a Brexit, the Sigle Market, the the applicatio of EU evirometal law will cotiue, although there would be a eed for trasitioal legislative arragemets to be put i place. I cotrast, a post-brexit UK that relied o free trade agreemets with the EU would ot be subject to EU evirometal law. Such a positio would give rise to the eed for substative UK legislatio i the short term i order to determie the directio of travel for evirometal protectio ad developmet i each of Eglad, Scotlad, Wales ad Norther Irelad. The challeges of campaigig for chage i a referedum with a biary vote iclude the impossibility of presetig a maifesto with commitmets. Further, with o electios of idividuals there is o mechaism to hold ayoe to accout. This meas that it is ot possible to do more tha idetify potetial outcomes for evirometal law i the evet of a referedum vote i favour of Brexit. To this is added the reality of egotiatig agreemets: trade agreemets betwee atios are little differet i priciple to commercial cotracts. Parties will seek to egotiate the best outcome for themselves, usig tactics that will assist them the most. Each will have differet stregths ad weakesses. Playig fields are ot level to start with ad ca chage as egotiatios progress. The process for withdrawal from the EU set out i Article 50 of the Treaty o Europea Uio (TEU) does ot iclude the process for egotiatig ew tradig arragemets. It is coceivable that the pressures that would be focused o the UK as the Article 50 two-year period, or uaimously agreed extesio, approached could be used by oe or more Member States, whether seekig to secure cocessios from the UK or from other Member States whose eed or wish to eter ito a tradig agreemet with the UK is greater. It makes it eve harder to predict the future of evirometal law i a idepedet UK: would a UK govermet with less commitmet to evirometal stadards that sought a free trade agreemet rather tha etry ito the Sigle Market oetheless be willig to accept some level of coformity with EU evirometal law i order to secure other objectives? There has bee o suggestio that evirometal stadards would geerally stregthe i a idepedet UK, although the publicatio i March 2016 of a code of practice etitled Household Recyclig i Scotlad by Zero Waste Scotlad 6 goes beyod the ambitios of the EU Actio Pla for the Circular Ecoomy. 7 Ideed, the extet to which devolutio has take place over recet years adds complexity: the Treasury holds crucial purse strigs but there is cosiderable scope for differet evirometal law ad policy to develop further withi the separate UK jurisdictios without the commo legislative ad policy framework curretly provided by the EU. Whilst it is ot possible to assess with ay degree of cofidece the future of evirometal law ad policy i a idepedet UK it is clear that a Brexit vote would give rise to a eed for a ew ad sigificat domestic legislative programme. Evirometal law would be oe of may areas o which the UK Govermet as well as the Scottish Govermet, the Welsh Assembly Govermet ad the Norther Irelad Executive would eed to brig forward legislatio to avoid vacuums, to esure that regulators retaied the ability to apply ad eforce the law, ad to provide the certaity ad cofidece i regulated markets such as waste ad eergy that ivestors ad operators require to cotiue to trade ad operate. I the loger term, there would be a eed to develop idepedet policy framework withi the UK for the legislative framework to pursue. I the absece of cofidece i a logterm strategic framework such as that provided by EU evirometal actio programmes, evirometal law ad policy could become more politicised ad so proe to chages as govermets chage across the UK jurisdictios. Whether a etity will fare better i the eviromet of a idepedet UK or a UK withi the EU will be determied by may factors i additio to evirometal cosideratios. Whatever the outcome of the referedum, it will remai the case that those etities likely to be most successful are those best able to adapt to their wider social, ecoomic ad evirometal surroudigs. 5 data/file/284500/eviromet-climate-chage-documets-fialreport.pdf at uri=celex:52015dc0614.