UK: THE LIE OF THE LAND.

UK: THE LIE OF THE LAND. - Few owners of old industrial land can ignore the worrying possibility of contamination. Neither these worries nor the problem itself will go away until some hard questions are answered.

by Anita van de Vliet.
Last Updated: 31 Aug 2010

Few owners of old industrial land can ignore the worrying possibility of contamination. Neither these worries nor the problem itself will go away until some hard questions are answered.

Vast tracts of British land are no longer very green - or even particularly pleasant. Such land, now dubbed 'brown', has been contaminated not by any dramatic, newsworthy spill or explosion but by the slow drip, drip of some quietly insidious polluting practice. Grim news, naturally, for the environmentalists but not, surely, a problem to prick the conscience of hard-pressed businessmen?

Not so. At the very least brown land poses huge health risks. More to the bottom-line point, businesses built on contaminated land could face huge cleaning bills in future. Indeed, as the environment races up the political agenda, so, too, the potential cost of being caught holding a poisonous parcel of land escalates.

Brown land is a source of headaches in more ways than one. Contamination can generate gas, causing explosions and adding to the greenhouse effect; it can eat into building materials and structures; it can produce fires. It causes a drop in property values and can threaten the finances of current and past owners. Who, after all, is responsible if your land is found to be contaminated? Who pays the bill to clean it up? Who would be persuaded to buy a brown rather than a greenfield site when the former is dogged by uncertain future costs and liabilities? Yet how many new greenfield sites can this island support and what will they cost in future?

The scale of the UK's brown land problem is not precisely known, but it is sizeable. Friends of the Earth estimate that there are 100,000 contaminated sites, while the CBI suggests that some 200,000 hectares might be affected. Estimates of the cost of cleaning up the land range from £10 billion to £30 billion. Contaminated land is the unwanted legacy of Britain's long industrial history, dating back centuries in some cases (as in the tin mines of the South West, dug and delved into since the 13th century and now turning whole bays in Devon white with pollution) and in others harking back to practices which were halted only in the 1970s (such as the chemical industry's blithe disposal of waste by simply pouring it into a hole in the ground).

The chief causes of contamination, as listed by the Interdepartmental Committee on the Redevelopment of Contaminated land, are gas works, waste tips, metal industries, sewage works and sludge tips, chemical works, docks and wharfs, tar, oil and petroleum depots, scrapyards, munitions, and tanneries. In some sites, contamination is obvious - where the land lies derelict, for example, or when the soil turns blue and smells peculiar. But in other cases, where the land has been redeveloped, contamination may be lurking invisibly beneath the surface - a potential danger to both health and profits.

Smelly and obvious or odour-free and invisible, that Britain has contaminated land and that such land is a problem may be the only element of certainty in a confused and confusing topic. Lord Lewis of Newnham, chairman for many years of the Royal Commission on Environmental Pollution, points, for example, to the very real difficulty in identifying contamination in the first place, given that much of the land is not derelict but in use. No strict definition of what constitutes contamination exists. Added to which, how clean should a clean-up be? Should damaged land be restored to its pristine state or is it sufficient to restore it to suitability for a limited range of uses?

If defining contamination and cleanliness is hard, deciding who foots the clean-up bill is even harder. Most people would accept the principle that 'the polluter' should pay for rectifying his damage, but how is that 'polluter' to be defined? Is it always the present owner of the site? Or, where there has been continuing pollution, are previous owners implicated? Or is the polluter the controller of the operation causing the damage? How is causation to be established? Who will investigate? How is liability to be apportioned where there are several persons or legal entities to be held responsible? Who is to pay when the polluter cannot be traced or lacks adequate funds?

These, and similar questions, arising in what is a relatively new area of concern, can be grouped under two broad headings - questions of definition, standards and priorities on the one hand, and questions of liability and who should pay on the other. The Government's latest position on both aspects is outlined in the Department of the Environment's Framework for Contaminated Land, published last November, which has proved a massive relief to the property industry and a major disappointment to environmentalists.

The Framework offers no definition of contamination, no nationwide standards for clean-up and no national programme of priorities. Currently, a business may discover whether land could potentially be contaminated through desk studies of historical archives and geographical information. Monitoring by the local environmental health department or the National Rivers Authority (NRA) will determine whether the land is actually contaminated. But these definitions vary and, to date, no strict definition of what constitutes contamination exists. The Interdepartmental Committee on the Redevelopment of Contaminated Land has merely set guidelines on 'acceptable' levels of pollutants in land that is being redeveloped. These levels are set with reference to the end use of the land - car park or nursery school, for example. But these guidelines are not statutory and not legally enforceable. In other words, businesses buying offices on developed 'brown' land may in time - given the arrival of stricter definitions of contamination and tougher EU legislation - find themselves liable to pay for cleaning up land they either did not pollute or did not consider polluted.

On the question of regulating brown land, the Framework is similarly unhelpful. Regulation, it says, will be in the hands of the new Environment Agency and the local authorities which, between them, share the responsibility for identifying and acting on land contamination. Borough and district councils will have the duty of checking their areas for possibly contaminated sites 'from time to time' and will be able to serve a notice on 'the appropriate person' (not defined) requiring the clean-up of a site. But testing sites for contamination is expensive and it is unclear whether local authorities will be granted the necessary resources. According to Friends of the Earth, relatively simple samples taken from four back gardens in Enfield, Middlesex cost about £1,500. British Gas, which has been conducting a systematic investigation and analysis of some 1,100 sites has spent around £10 million. The majority of local authorities, meanwhile, have annual environmental analysis budgets of between £5,000 and £15,000.

Even the Framework's standards for clean-up lack bite, consisting of 'unenforceable' guidelines which many believe are inadequate. The Government's approach is the 'suitable for use' policy - accepting lower standards of decontamination for land designated as a car park than that scheduled for redevelopment as housing, for example, rather than the 'multi-functional' approach adopted in the Netherlands and the US. Critics of the 'suitable for use' policy fear that it will encourage low grade development and an oversupply of carparks. They also point out that creeping contamination can continue after a site has been only partially cleaned up.

The NRA, meanwhile, has warned that the 'suitable for use' approach may not be enough to protect ground-water, whence the British derive 30% of their drinking water (70% in parts of the South). On the other hand, restoring all contaminated land to its prelapsarian state would be enormously expensive; and even the US and the Netherlands - the latter with its peculiarly waterlogged and overpopulated characteristics - are now softening their multi-functional line in the face of harsh economic facts.

Once land is deemed contaminated and clean-up is required who, according to the Framework, will be liable? In particular, who in the UK will have to pay for cleaning up the effects of pollution often caused over decades by a succession of owners acting according to standards and practices which were legal at the time?

Liability, says the Framework, will rest with the person who 'caused or knowingly permitted the contamination to occur' - if such a person can be identified and found, which is not always that simple. If the polluter cannot be identified or found, the clean-up costs will fall on the current owner or occupier of the land - a solution which should cause businessmen grave concern. The enforcing authorities will take 'hardship' into account when seeking to recover the costs of clean-up, which should benefit homeowners and small and medium enterprises, but it is not clear whether local authorities will receive extra funding to pay for the clean-up themselves as the Government intends to keep 'orphan liabilities' to a minimum.

Government is, of course, concerned to avoid the experience of the US Superfund regime, where between 30% and 60% of the expenditure of the Environmental Protection Agency, the operators and their insurers has gone on extraordinarily complicated court cases and proceedings: at the end of 1993 the number of people engaged in litigation was put at 14,000, and in one case well over 400 insurers were involved. This bonanza for lawyers is the result of the draconian liability system for funding clean-up measures, which is retrospective, strict (meaning that it matters not whether it was your fault or not), joint and several (meaning that each 'potentially responsible person' is liable not for a proportion of the costs but for the whole). Liability may fall on the present owner, on the owner at the time pollution occurred, on firms responsible for discharges in the past, even if the practice was legal at the time; in practice, even credit institutions such as banks may be liable if they have taken possession of contaminated land under mortgage; and it tends to fall upon the party with the deepest pocket who understandably contests the case.

Strict liability, of course, is far from the Framework's thinking but here the UK is running behind EU thinking since future EU legislation is likely to shift the balance in that direction. Strict liability has the advantage of acting as a deterrent when it comes to preventing present and future pollution. The House of Lords Select Committee, for one, argues that there should be more onerous liability for future consequences of current polluting practices from a specific start-date. In view of changed attitudes to pollution, ignorance is no longer justifiable.

When it comes to the even trickier question of liability for historical pollution, the Framework document fails to enlighten. Elsewhere, however, a range of proposals for raising money to reclaim contaminated land, when no polluter can be found, have been mooted. These include a levy on all house transactions, sectoral funds (such as already exist in the oil industry), a tax on industrial insurance premiums, a national environmental trust fund, using the proceeds of the national lottery, or, quite simply, the taxpayer, since the Government's concern to protect the public purse should not override its responsibility to protect the land and its people.

Demand is growing, moreover, for a similarly imaginative and far-reaching approach to the other central problems of brown land: how to identify and control contaminated sites. Chief among these demands is the call for a public register of potentially contaminated land - an idea which, after its proposal in the 1990 Environmental Protection Act, has subsequently disappeared from this Government's agenda but has reappeared in the Labour Party's policy document, In Trust for Tomorrow.

The main purpose of a public register, as the DoE explained forcefully in 1991, would be 'to alert local authorities, landowners and potential purchasers or developers to the possibility of contamination, and enable environment health departments to identify potential threats to public health': 'It is better', it continues, 'for everyone concerned to be aware of possible contamination so that appropriate investigations can be carried out on a basis of knowledge ... The best response to public alarm is a policy of openness.'

Introducing a public register of possible contamination would, of course, present problems of its own. Sir David Trippier, then minister of state for the environment, recalls the soul-searching which preceded the inclusion of the idea in the 1990 EPA: the fear that those regions that were battling towards economic regeneration would find substantial tracts of land on the register and that companies would accordingly be wary of investing there; and the likelihood that the price of land would drop dramatically. Trippier and the all-party Environmental Select Committee also puzzled over whether and how land could be removed from the register. If cleansed, to what degree? Would it have to be totally sanitised or just cleansed of the worst pollutants - suitable for recreation, but not for housing? 'In my three years as green minister, the contaminated land register was the most difficult - agonising - problem I faced,' recalls Tripper. Ultimately objectors won the day and the register idea was shelved.

In abandoning the registers the Government lost an opportunity to seize the environment initiative. Derek Wanless, chief executive of National Westminster Bank and chairman of the Advisory Committee on Business and the Environment (ACBE), said the proposed registers would have provided long-term benefits for owners and purchasers of land provided they were 'well managed'; and the ACBE financial-sector working group came up with a number of specific proposals to this end. These included using a title which would not cause consternation among landowners and the general public (land uses register, for example); stating clearly why a piece of land was on the register, and the source of the information; and providing details of action taken subsequently (surveys, environmental audits, clean-up operations and by whom done, when and by what methodology).

The DoE would need to issue comprehensive instructions to local authorities to ensure consistency across the country; and local authorities would need adequate resources to ensure timely and accurate responses to enquiries. The group also suggested that three months' notice should be given before a piece of land was included on the register and that there should be the statutory right of appeal against inclusion. It recommended, too, publishing the full list of contaminative uses at the outset, even if different categories were to be phased in over time, so that people with a long-term interest in a property could plan ahead. Given these preconditions, the ACBE group concluded the registers could 'provide the necessary database for any future national system for managing land which may be contaminated'.

Cost considerations effectively scuppered the ACBE recommendations, and objectors to the land register scheme - including the Royal Institution of Chartered Surveyors (RICS) - won the day. Instead the RICS suggested that the issue of contaminated land should be integrated into the planning process, and it has now drawn up 'land quality statements' for this purpose. These should prove useful in reassuring potential purchasers about the environmental risks of a site and help vendors by removing or confirming concerns about the quality of land and its impact on the sale.

Land quality statements should also contribute towards the gradual build-up of information on brown land (the RICS estimates that almost 50% of property will be bought and sold over a 10-year period). So, too, will the registers kept by local authorities of land that is actually contaminated - that is, land which they have identified as requiring to be cleaned. However, neither of these endeavours is a substitute for a comprehensive public register. Nor is the current Framework document sufficiently clear on what constitutes contamination, who must bear responsibility for its clean-up, or where, ultimately, that money will come from. Until some clarity penetrates this confusion, few UK businesses should claim to be sitting comfortably.

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