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THE ‘EASTMED PIPELINE’ – HARD REALITY OR A PIPEDREAM?

2020 commenced with a milestone which could, it has been said, be of great geo-political significance. On 2nd January 2020, after many years of discussion and evaluation, the energy ministers of Greece, Cyprus and Israel, in the presence of their President and Prime-Ministers, signed in Athens an Agreement for the Construction of the Offshore/Onshore Natural Gas Pipeline connecting the East Mediterranean gas reserves to the South European mainland: the ‘EastMed Pipeline’.

The Background to the Pipeline

At the time of writing, the Agreement itself had not yet been released into the public domain. This makes it currently impossible to place a legal interpretation on the intentions of the Parties. However, in anticipation of its publication, below follow some background facts:

By 2025, the EastMed Pipeline should facilitate the exploitation and transportation of some 553 milliard cubic metres of natural gas estimated to be present in the exploration fields ‘Leviathan’ and 238 milliard cubic metres in ‘Tamar’, both located in the Israeli exclusive economic zone in the Levantine Basin.

Originating in the Levantine Gasfield, at some 130 kilometers distance west of Haifa, the pipeline’s exit points are to be located in Cyprus, Crete and on Mainland Greece. From there the gas will be routed under the Mediterranean Sea to depths of almost 3000 metres. The pipeline’s ultimate landfall will be in Italy after travelling a distance of some 1900 kilometers. From Italy, the gas can be further transported to Northern Europe.

Since Cyprus and Greece are exploring substantial reserves of natural gas in their own territorial waters, they will, it has been said, shortly be able to exploit these using the EastMed Pipeline. On the basis of current projections in the industry and taking the Cypriot gas into account, it is said that the pipeline will be able to transport ten billion cubic metres of gas per year.

The Project promises to be a masterpiece of technological invention and ambitious construction. It has received backing from the US Administration, which would favour a Europe no longer consuming Russian gas, while the European Commission, by its regulation 347/2013, designated the pipeline as a Project of Common Interest (PCI 7.3.1) and pledged Euro 1.927.924 million for its design and development.

The parties have announced that the immediate benefits of the pipeline up, once it is live, could be summed up as:

  • enhancing Europe’s energy security through the diversification of sources, locations and transport routes
  • developing Europe’s own gas resources within the EU territory
  • advancing the importance of the East Mediterranean basin with a view to adding stability to the region
  • weaning European consumers of their dependence on Russian gas

At first glance, all this would appear to be good news for both Europe and the East-Mediterranean region and it is therefore not altogether surprising that local and international media published images of broadly smiling Greek, Cypriot and Israeli Heads of State at the Agreement signing ceremony. Is the euphoria nevertheless entirely justified? 

Evaluating the potential of the Pipeline

The origins of the EastMed Pipeline date back to the beginning of this century and the gradual discovery of a number of promising gas and oil reserves in the East Mediterranean. Upon discovery of the Leviathan gasfield in 2010 and confirmation in 2012 that the gas was indeed technically recoverable, concrete plans for the creation of a gasline were then mapped out.

A decade has passed and both in respect of the politics of the region as well as the consumption trends of natural gas and the geopolitical competition these brought about, the world has changed. Add to this the challenges ahead for off-shore and deep water construction of the pipeline, the decision by the European Investment Bank (EIB) to cease funding fossil fuel projects by the end of 2021 and, finally, the inexorable rise of the production and use of renewable energy, it comes as no surprise that the High Contracting Parties signed an Agreement which, despite all the hullabaloo which the signing accompanied, is drawn up as a mere statement of political will.

Let us take these obstacles one at a time:

(A) When the pipeline was first conceptualised the Arab Spring was yet to dawn over the Mediterranean territory. Some of the Eastern region had been governed by despotic leaders who had, by their dominance and to a certain extent, created a period of relative tranquility. Countries such as Greece, Cyrpus and Israel meanwhile continued a balancing act between mega powers such as Russia and Turkey. While there were stirrings of civil unrest in some of the littoral East-Mediterranean countries before 2011, soon after the entire the region became mired in turmoil causing extreme violence to populations and untold damage to infrastructure projects. This situation has yet to end.

More recently, vocal environmental pressure groups in Israel such as ‘Shomrei Habayit’, as well as a number of Israeli politicians and trade union bosses, have demonstrated in their thousands against the location of gas processing platforms serving the Leviathan reservoir, some 10 miles only out to sea. The primary concern of the demonstrators is the release of benzene, a carcinogenic, out of the processing process.  

The official position of the Israeli Government is that the economic benefits and the prospect of Israel becoming an ‘energy superpower’ outweigh the human and environmental concerns of the demonstrators. 

Late November 2019, another political obstacle to the success of the pipeline emerged. Since the Turkish and Libyan Prime Ministers signed an Accord for the delineation of their spheres of influence over the high seas between them, serious tensions have arisen between Greece and Turkey regarding their respective sovereign rights and influence over the mineral resources under the Mediterranean Sea. It is understood that in the Libyan Accord, Turkey reserves sections of the sea unto itself which should belong to the Greek exclusive economic zone according to the international law of the sea. Interestingly, Turkey did not sign nor ratify the 1982 UN International Law of the Sea Convention.  

Meanwhile, in a show of strength, the French Republic has sent her aircraft carrier, ‘Charles de Gaulle’, to the East Mediterranean. She reached Limassol on 21st February. There could be no clearer show of French support for Cyprus, which equally fears for the illegal exploitation by Turkey of her mineral resources.

The question begs whether in a region where wildly diverging countries are located each with their own seemingly insurmountable internal as well as external problems and interests, the concept of a pipeline which could connect and ensure peace and stability is based in reality or a figment of wishful political thinking.

(B) The technical challenge of laying the world’s longest offshore pipeline at a depth of 3000 metres is also daunting. DEPA, the Greek Public Gas Company S.A. responsible for the development of the Project and delegated under the PCI to oversee its construction, have tasked it’s subsidiary IGI Poseidon with the initial technical feasibility and economic viability studies. The pre-feed studies have been finalised and the feed-stage, the technical study involving marine surveys and route accuracy measurements initiating the proper development of the Project, may now be launched. A final investment decision should be taken in 2022. Despite these confident projections dating from 2015-2016, the challenge to get the Project up and running by 2025 therefore remains.

(C) The financing of the Project would appear to be the next headache for the promoters of the EastMed Pipeline. Whilst the initial stages have been assisted by the European Union’s funds, the next stage appears fort he moment to be deprived of the massive funding the Project needs. The European Investment Bank has in any event announced that it will no longer provide financial resources for non-renewables projects. Estimates of 5.2 billion Euros required to fund the initial capacity stage have appeared in the media. Greek sources have even suggested that the funding may have to come from private investors.

(D) Another cause for skepticisim is the trend in European gas consumption which is showing signs of tailing off. The Oxford Institute for Energy Studies reckons that projections of European gas demand show only a marginal increase or even a flat lining into the 2020s and that LNG projects will compete heavily and be the preferred modus of gas trade and transport into the 21st century.

Whilst the motor behind the construction of the EastMed Pipeline keeps slowly churning, the accelerated rise of renewables progresses at a pace. Moreover, the European demand for natural gas from the EastMed source is also under heavy competiton from gas produced by Russia. To facilitate the export of Russian gas to Europe, it is worth noting that on 30th December 2019, the latter reached a final agreement with Ukraine on the transit of gas destined for the European market for the next five years

Global demand for clean energy appears unstoppable. With Russia pumping gas into Europe also into the future and, the availability and use of renewable energy progressing at a pace, there must be doubt whether by the time the EastMed Pipeline finally comes on stream, there is still enough call for its natural gas which would fully justify the enormous investment in the entire Project.    

About the Author

Reina Maria van Pallandt is a senior disputes resolution lawyer with dual British and Dutch nationality. Reina Maria obtained a degree in Dutch Law and Public International Law (LLB Hons) at the University of Amsterdam and was subsequently admitted as a Solicitor of the Senior Courts of England & Wales in 1979 and to the Law Society of Ireland in 2019. Reina Maria originally practised as a solicitor at Holman, Fenwick & Willan in London and Paris and thereafter at Clifford Chance where she specialised in marine and general commercial arbitration and litigation representing shipowners, P&I Clubs, shipbuilders, repair yards and charterers such as oil and gas companies and commodity traders.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy, infrastructure and natural resources  sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and other technical experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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NET ZERO: THE UK’S CONTRIBUTION TO STOPPING GLOBAL WARMING

The UK Committee on Climate Change ‘CCC’, established by the Climate Change Act 2008, has been recommending 5 yearly carbon budgets and seeing them enacted as law by the constituent Parliaments of the UK for 10 years.

In May 2019 the CCC, reflecting on the latest science from the Intergovernmental Panel on Climate Change, and perhaps sensing a shift in the tectonic plates of public opinion on climate change, produced a new report for the Parliaments of the UK, Wales and Scotland – ‘Net Zero – the UK’s contribution to stopping global warming.’

The CCC has now proposed that the UK can end its contribution to global warming within 30 years, by setting an ambitious new target to reduce greenhouse gas emissions to zero by 2050. It proposes that Scotland could reach net zero emissions by 2045, with Wales achieving 95% reductions by 2050.

Introducing the new recommendations, the CCC said –

“The CCC’s recommended targets, which cover all sectors of the UK, Scottish and Welsh economies, are achievable with known technologies, alongside improvements in peoples’ lives, and should be put into law as soon as possible.”

This target, and the political will to meet it, will create major and immediate challenges, whilst also opening up major new opportunities, across many sectors including –

  • The automotive sector
  • Construction
  • Manufacturing industry
  • Carbon Capture and Storage technology
  • Low carbon hydrogen
  • The waste industry
  • Aviation
  • Shipping
  • Farming
  • Low carbon power
  • Banking, finance and insurance

In fact, of course, as the CCC has said, this will affect all sectors of the economy. In an article for the Guardian in April 2019, Mark Carney, Governor of the Bank of England, Francois Villeroy de Galhau, Governor of the Banque de France, and Frank Elderson, Chair of the Network for Greening the Financial System, wrote that –

“The catastrophic effects of climate change are already visible around the world. From blistering heatwaves in North Africa to typhoons in south-east Asia and droughts in Africa and Australia, no country or community is immune…

Carbon emissions have to decline by 45% from 2010 levels over the next decade in order the reach net zero by 2050. That requires a massive reallocation of capital. If some companies and industries fail to adjust to this new world, they will fail to exist.”

Major changes in environmental and other laws and regulations will be needed at the UK level and in each of the devolved Parliaments, and we expect to be involved in advising some of the many businesses and industries affected by the changes.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Group is an award winning Multi-Disciplinary Practice combining the legal services of Prospect Law with the consultancy services of Prospect Advisory. Our lawyers and technical experts provide a single point of reference for clients involved in energy, infrastructure and other development projects.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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LOSS OF SOCIAL LICENSE TO OPERATE: THE TOP RISK FACING EXTRACTIVE SECTOR IN 2019/2010

Ernst and Young has assessed the loss of a Social License to Operate (LTO) as the top business risk for the extractive sector in 2019/2020.

This exponential rise has come about because the current approach taken by boards and CEOs is not broad enough. Indeed, the stakeholder landscape is changing and miners need to adapt. Furthermore, there has been a dramatic rise in resource nationalism globally, and the necessity of digital transformation highlights needs for a stronger LTO.

Whilst most sections of the metals and mining industry say the right things with regard to LTO issues, few actually take action. Today, LTOs extend well beyond social and environmental issues, into the realm of issues relating to Shared Value. If mining/metals companies are to remain competitive and keep their stakeholders on side, they need to focus more greatly on how they can Create Shared Value, to the point where this mindset needs to become deeply embedded within a company’s fundamental DNA.

LTO issues cannot be delegated to a department within the business. Rather, LTO concerns must be integrated into a Company’s core decision making process. There is more information about, and bigger platforms for the sharing of that information – just one disaffected shareholder has the ability to destroy a Company’s reputation for good.

Wider society is increasingly participative in multiple issues that directly concern mining/metals operations – social media and the internet rally issues-based stakeholder participation en masse, especially in relation to issues such as sustainability, pollution and workers rights.

Social media has given minority groups, such as indigenous communities, global reach in respect of their issues of concern.

New business models are increasingly focussed on community owned operations, as opposed to more traditional models, whilst host nation governments have higher expectations of shared value outcomes. Essentially, governments want much more than tax and employment opportunities in return for the granting of access to resources. Increased transparency, as a result of more disclosure regimes, means that positive and negative impacts of mining operations are subject to much closer scrutiny than previously. Increasingly, projects are assessed on the basis of the quality and extent of stakeholder engagement. Kenya, for example, has enshrined the principle of public participation into its constitution, under Articles 10, (2) and 69 (d). Further, disaffected stakeholders are pursuing litigation in respect of past damages, and provisioning for such eventualities will become a key issue for companies and regulators.

Click on the links below to read Mark’s previous articles on Shared Value

The Creation of Shared Value – The Need for a Long-Term Perspective

Creating Share Value in Complex Environments:

Part I
Part II
Part III
Part IV

About the Author

Mark Jenkins advises clients on Corporate Social Responsibility (CSR), security and risk management issues affecting the viability of on and off-shore energy, mining and infrastructure sector projects in Europe, the Middle East and Africa. Mark’s experience has been focussed on creating reliable community support for projects through the development of a Social License to Operate (SLO) based on effective CSR initiatives. The success of these initiatives has been based on a thorough understanding of local environmental, commercial, and cultural dynamics, especially Islamic ones.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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THE CREATION OF SHARED VALUE – THE NEED FOR A LONG-TERM PERSPECTIVE

Capitalism is under siege…diminished trust in business is causing business leaders to set policies that sap economic growth…business is caught in a vicious circle…the purpose of the corporation must be redefined around Creating Shared Value” – Harvard Business Review

What is Shared Value?

Shared value refers to the policies and operating practices that enhance the competitiveness of a company, while simultaneously advancing the economic and social conditions of the community in which the company operates. The creation of Shared Value focuses on the identification and expansion of connections between societal and economic progress. Its premise is that economic and societal progress must be addressed using value principles, and that value is defined as benefits relative to costs, not just benefits alone.

The business and social sector (government and NGOs) have tended not to think in terms of the creation of value, instead being focused on profit alone (business) and benefits achieved (NGOs/Governments). In the new paradigm advocated here, there will be increased cooperation between business, NGOs and government.

The Traditional Approach

Over the years companies have optimised short term financial performance while ignoring broader influences that determine their longer term success. These can include the well being of their customers, the depletion of natural resources, the viability of key suppliers and the economic success of the communities in which they produce and sell.

Governments and civil society have often exacerbated the problem by attempting to address social problems at the expense of business. As a result, the presumed trade-off between economic efficiency and social progress has been institutionalised. Many companies are aware of the problem, but are locked in a CSR mindset, with social issues at the periphery and not the core.

The Solution

The Solution lies in the principle of shared value, namely the creation of economic value in a way that also creates value for society, by addressing needs and challenges. Business must reconnect company success with social progress, as Shared Value is not social responsibility or even sustainability. Rather, it is the best way to achieve economic success.

Shared Value requires leadership that possesses a deep understanding of society’s needs, a greater understanding of the true bases of company productivity and the ability to collaborate across non-profit/profit boundaries. The purpose of the corporation must redefined to address the creation of shared value, not just profit per se, as the concept of Shared Value recognises that societal needs define markets.

Shared Value is not about personal values, nor is it about redistribution. Rather, it is about the expansion of the total pool of economic and social value. Shared Value focuses on improving production techniques and strengthening the local cluster of supporting suppliers and other institutions, in order to increase local business efficiency, yields, product quality and sustainability These all lead to bigger revenue and profits that benefit both local businesses and the companies that buy from them. For example, studies of cocoa farmers have suggested Fair Trade can improve profits for farmers by 10-20%, whereas SV initiatives can increase it by over 300%.

Creating Societal Value

A business needs a successful community, not only to create demand for its products but also to provide critical public assets and a supportive environment. At the same time, a community needs successful businesses to provide jobs and wealth creation opportunities for its citizens. There are three ways in which societal value can be created in order to develop economic value.

re-conception of products and markets – the starting point for SV is to identify all the societal needs, benefits and harms that could be embodied in a company’s products;

redefinition of productivity in the value chain – striking improvements in energy utilisation through better technology all create SV; heightened environmental awareness and advances in technology mean new approaches in areas such as use of water, raw materials and packaging; increasingly companies realise that suppliers must be nurtured by increasing access to inputs, sharing technology and providing financing – when companies buy local heir suppliers get stronger, increase their profits and hire more people on better wages – that’s shared value; distribution of financial services, eg Microfinance; employee productivity is improved by better pay, wellness, training and career advancement as well as reducing days lost through illness; local communities are increasingly important due to rising costs of carbon emissions and energy and and also the costs of a highly dispersed production system.

building supportive industry clusters at the company’s locations – the success of every company is affected by local communities and infrastructure. Without a supporting cluster productivity suffers – deficiencies in a cluster create internal costs for the company. As companies become disconnected from communities so their influence declines and costs grow. Initiatives that address cluster weaknesses that constrain companies will be much more effective than community focused CSR programmes which have limited impact because they take on too many areas without focusing on value.

Summary

Corporate Social Responsibility

    • Values – doing good;
    • Citizenship, philanthropy, sustainability;
    • Discretionary or in response to external pressure;
    • Separate from profit maximisation;
    • Agenda is determined by external reporting and personal preferences;
  • Impact limited by corporate footprint and CSR budget.

Example: Fair Trade Processing

Creation of Shared Value

  • Values – economic and societal benefits relative to cost;
  • Joint company and community value creation;
  • Integral to competing;
  • Integral to profit maximisation;
  • Agenda is company specific and internally generated;
  • Realigns the entire company budget

Example: Transforming procurement to increase quality and yield.

About the Author

Mark Jenkins advises clients on Corporate Social Responsibility (CSR), security and risk management issues affecting the viability of on and off-shore energy, mining and infrastructure sector projects in Europe, the Middle East and Africa. Mark’s experience has been focussed on creating reliable community support for projects through the development of a Social License to Operate (SLO) based on effective CSR initiatives. The success of these initiatives has been based on a thorough understanding of local environmental, commercial, and cultural dynamics, especially Islamic ones.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental  sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

Click on the links below to read Mark’s previous articles on Shared Value

Part 1- August 21st 2018
Part 2 – 7th September 2018

For a PDF of this blog click here

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FOSSIL FUELS: THE POSSIBLE IMPACT OF REDUCED INSURANCE COVERAGE

Growing Opposition

In September 2016 a Lutheran pastor in America’s Washington state led a blockade of a train of oil tankers; he and other members of ‘Veterans for Peace’ were repeating a similar blockade earlier in 2016 of a coal train by ‘Raging Grannies’.

These events could easily be dismissed as the actions of a minority of climate cranks, but that would be foolish. Since 2016, these anti fossil fuel protests have become increasingly mainstream, and the insurance market has witnessed growing and successful pressure intended to shame insurers into refusing to insure the coal industry.

The protestors no doubt feel added legitimacy for this pressure, since the publication of the IPCC’s October 2018 report that calls for urgent action within the next 12 years to keep global warming to 1.5oC, and, even more recently, the EBRD’s announcement that it too will no longer fund coal and oil projects.

Non-Governmental Organisations

Whatever one feels about the climate change debate, the pressure on the insurance market and wider financial services sector has been successful. One NGO, Unfriend Coal, is leading a campaign to render the coal industry uninsurable. Moreover, 2018 has seen large insurance businesses such as Allianz, Aviva, Scor, Swiss Re and Lloyd’s of London, scale back their coal industry involvement, largely in response to this campaign.

Unfriend Coal’s ultimate objective is to starve coal of finance, by denying the investors the security of insurance. However, as the CEO of Swiss Re said back in July: “it’s not simple…if you stopped financing and insuring it tomorrow it would be a disaster for society”.

Unfriend Coal is certainly right about one thing: the insurance sector is right at the centre of this debate. On the one hand insurers bear the brunt of the increasing scale of natural catastrophe losses, howsoever caused, and they fund numerous research projects into this subject and into climate change.

Impact on Less Developed Countries

On the other hand, insurance is an essential component in any finance arrangement for a project. Insurers have an obligation to be responsible players in society, by underwriting investment projects that will help improve living standards for the two-thirds of humanity who live in less developed nations.

These may be coal fired power projects because basic energy provision is often the first step towards unlocking greater prosperity. It’s not a perfect world and the insurance sector must serve the world as it is as today, as well as try to respond to those who want change for tomorrow. Coal mining and power generation will likely play an increasing role in South East Asia and Latin America in the coming decade, even as some developed nations reduce or even stop fossil fuel use.

Nevertheless, there is still disunity amongst OECD countries. Australia and the United States are politically supportive of coal and consequently there have been no insurers there reducing their exposure to the coal industry.

Conclusion

So, what to do? Follow the money and keep insuring risks that are unfashionable and unpopular, or stop insuring sectors that have been fingered as climate changing by a prosperous first world minority that perhaps watches too much TV.  This dilemma is an uncomfortable one for a sector that isn’t really used to the limelight and just normally gets on with the job of mitigating the risks facing so much of today’s human endeavour.

Fossil fuels are ‘dirty’, and most would agree we can’t just blindly continue polluting the world as we have done in the past, but insurers need to take a step away from the ideology and remember that the priority surely is to continue lifting as many as possible out of poverty, by supporting infrastructure investment.

This implies judging each project on its merits. It means taking the foot off the throttle, but not jamming on the brakes. For the sake of human progress, insurance needs to play its part in unlocking good investment projects of all types that could reduce poverty for millions more, rather than turn its back on whole sectors of economic activity.

About the Author

Mark Tetley has wide experience gained from senior positions across the London insurance market as  both an underwriter  and a broker , in a variety of sectors. He provides advice and assistance on a wide range of insurance and risk issues, including comprehensive nuclear liability and property insurance assistance, complex infrastructure project programme design and review, claims and policy reviews, assistance with project insurance design and implementation in developing countries, and many other aspects of risk mitigation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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WHOLESALE ENERGY PRICES: OCTOBER 2018

In this article, Dominic Whittome covers recent changes to wholesale energy prices.

Oil

Despite the efforts of the US to almost brow-beat Saudi Arabia into increasing output, crude oil continued to march upwards and rose a further 9% amid open talk in trading circles of a possible three digit oil price at some point this winter, especially if crude or petroleum product inventories look like tightening further.

Paradoxically the latest intervention will have made the Saudis even less inclined to raise output, lest it reinforce the perception it is know-towing the US and working at odds with its cartel partners. There are other reasons why high prices (though below $100/bl) remain a policy goal for the kingdom, not least the delayed floatation of Aramco, for which a robust oil market remains essential.

There are also physical limits as to how much more oil it can produce. No OPEC oil producer should ever want its geo-politically priceless ‘swing capacity’ put to the test unless absolutely necessary. The same holds true for many North African and South American oil producers who may be strong on reserves but still have quite limited capacity to export more oil amid creaking infrastructure and worsening economic outlooks that will thwart foreign investment.

With the Russians and Iranians incentivised to rattle the cages of Western economies, this winter could see further stockpiling that alone will cause the market to tighten. The petro-dollar meanwhile has strengthened through the year, magnifying energy inflation effects in many oil importing countries. Indeed, inflation is a key factor to watch for general energy consumers, with rises in petroleum product prices evidently feeding to gas and liquid fuel markets with contract prices fixed against oil and escalation terms indexed to oil in a stronger petrodollar.

Gas

Natural gas prices increased another 12%, following on from their 15% climb over the May and June period amid expectations of continuingly high crude prices and a cold and protracted European winter that might extend into the shoulder months of March and April, when the Forward Market is generally at its most volatile and gas storage close to depletion in some regions.

In particular, the UK is now without a major gas storage facility following the closure of Centrica’s Rough platform. Whilst concerns over the security of supply from Russia and other Eastern countries may have been overstated in the past year, the forward market is probably now building, amid clearly rising East-West tensions, a higher risk-premium into prices out on the curve. Last month the UK’s annual gas contract hit a ten year high, breaking past 70 pence per therm at one stage.

However, today sees gas prices being influenced by an ever-expanding mixture of global supply & demand factors, with LNG playing a marginal supply role, including recent hurricanes in the USA which drove up crude and spot gas prices up in tandem. In fact, there has been no shortage of bullish news to keep the prompt market strong and this is now affecting gas prices further out on the curve, even if the actual justification for rising long-term gas prices is tenuous. Indeed from a resource perspective there is no actual or expected shortage of gas. The commodity enjoys an increasingly wide geographical spread as far as production is concerned and, according to the latest BP figures, the world has well over 300 years of forward supply at current rates of consumption. In reality however, short-term security of supply concerns, together with persisting long-term indexation to oil, have served to keep driving gas prices higher. The NBP traded over-the-counter price for gas has since risen by over 75% in the last eighteen months.            

Electricity

Although it had been hoped that most of Europe’s reactors would be back up after the summer hiatus, when a lack of cooling water supplies forced many to go offline, there have been reports of persisting outages. The age of nuclear fleets across the Continent is now a growing concern. In the UK too, all existing nuclear power stations, bar Sellafield, are due to close within five to ten years.

It is also becoming clear that renewable electricity and sub-sea interconnectors will not plug the gap, with new-build reactor projects arriving late, due to construction and safety problems, or not even getting off the ground at all amid concerns over technology, rising costs and funding.

In the backdrop, several European countries are quietly permitting the building of new fossil-fuelled power stations. Germany is currently installing coal-fired plants at a faster rate than the Chinese and last month it sanctioned the felling of an entire tree forest to produce the lignite dedicated to power generation.

The UK government itself has just given the go-ahead for a mammoth 2,500 MW gas-fired power station at Eggborough, the site of a former coal-fired plant that was closed only recently. This new power plant will produce some 80% of the output of Hinckley Point C; it will come on line sooner and it will not entail any meaningful subsidy, not from government or from the consumer by way of price-support under CFD tariffs added to bills.

Whether or not these examples mark a general policy shift towards fossil-fired generation remains to be seen. In the meantime, however, the market is tightening.                                                                                                                                 
About the Author

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law and Prospect Advisory and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

Prices quoted are indicative and may be based on approximate or readjusted prices, indices or mean levels discussed in the market. No warranty is given to the accuracy of any view, statement or price information made here which readers must verify.

Dominic Whittome is an economist with 25 years of commercial experience in oil & gas exploration, power generation, business development and supply & trading. Dominic has served as an analyst, contract negotiator and Head of Trading with four energy majors (Statoil, Mobil, ENI and EDF). As a consultant, Dominic has also advised government clients (including the UK Treasury, Met Office and Consumer Focus) and private entities on a range of energy origination, strategy and trading issues.

For more information or assistance with a particular query, please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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AN ANALYSIS OF THE CONSULTATION ON AN ENVIRONMENTAL PRINCIPLES AND GOVERNANCE BILL: PART II

Perhaps unnoticed, Defra’s consultation on ‘Environmental Principles and Governance after the United Kingdom leaves the European Union’, is probably the most important consultation affecting environmental laws to be introduced for at least the last ten years. It goes right to the heart of how environmental laws will, or should, or may not be, enforced, after the UK leaves the EU.

The second part of this series addresses losses the UK may suffer in terms of environmental law enforcement once it leaves the EU, as well as the likely aims of bodies set up under the Environmental Principles and Governance Bill  and environmental justice concepts  in operation in  the USA.

What the UK will lose in terms of environmental law enforcement on leaving the EU

On top of the existing failures to deliver effective enforcement of existing laws, the U.K. will now, after Brexit, lose:

  • Treaty obligations reinforcing environmental laws;
  • enforcement by the European Commission;
  • enforcement by the Court of Justice of the European Union;
  • the ultimate sanction of Member States risking fines for continuing
    breaches of EU law;
  • the legal requirement upon government to ensure that penalties for
    breaches are “effective, proportionate and dissuasive”; and
  • the right of individuals to activate enforcement of EU environmental laws, at no cost, by raising complaints with the European Commission.

Environmental governance                                                                                              

Any body, or set of bodies, set up, under the U.K. government’s proposed Environmental Principles and Governance Bill and/or parallel legislation in the devolved Parliaments will need to aim to deliver a consistent approach to environmental law enforcement across the UK; to be independently financed, established by statute and answerable to Parliament(s); to have the right to take up and investigate individual citizen complaints of breaches or non-enforcement of environmental laws without the prohibitive costs of judicial review; and to be able to hold government and public bodies to account.

Issues of Environmental Principles

With respect to the principles covered by section 16 of the European Union (Withdrawal) Act 2018 , as a minimum:

(a) government and public bodies at all levels should have regard to them  when discharging their functions; and

(b) where they are already embedded in retained EU law, there should be a commitment by government to reflect that, and not to dilute their application.

Environmental Justice

In America, there are much better developed concepts of environmental justice in the way in which environmental laws and regulation are applied. As an example, the Presidential Executive Order for 1994 stated that:

…”to the greatest extent practicable and permitted by law…each Federal agency shall make achieving environmental justice part of its mission by identifying and addressing as appropriate disproportionately high and adverse human health or environmental effects of its programs, policies and activities on minority populations or low-income populations.

Another way that this was explained to the author of this article, by Professor Robert Kuehn of Tulane University Law School was as follows:

The observation that most community environmental struggles are not won solely through the hands of lawyers is profoundly accurate. If equal enforcement of environmental laws is to be achieved, then all aspects of the enforcement process need to be opened up to residents of affected communities – their participation in making enforcement decisions must be sought out, their opinions and desires respected and addressed, and their ability to protect their own communities and police the facilities in those communities enhanced.”

Concepts of environmental justice, and the approach to law making and enforcement recommended there by Professor Kuehn, might well have helped to avoid some of the worst aspects of the Grenfell fire disaster. It may be time to consider what lessons there are to learn from American approaches to environmental justice when considering environmental governance in the UK.

The fundamental structures of enforcement of environmental laws are being re-designed from scratch. At a time of some legislative and constitutional turmoil, environmental lawyer, and those interested in effective environmental laws, need to identify what really matters, and to speak up for it.

Prospect Law Ltd, September 2018

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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CREATING SHARED VALUE IN COMPLEX ENVIRONMENTS: PART II

Part II of this series will focus on a company’s internal structures and external relations department, and the impact these can have on a company’s relations with its community stakeholders. There will also be discussion of the promotion and protection of human rights in the context of a social license to operate.

Internal Management Issues and the Acquisition of a Social License to Operate

Attempts to acquire a SLO will succeed to the extent that its core purpose is conducive to the acquisition of a SLO. Initiatives which create Shared Value among relevant stakeholders will succeed to the extent that they are fully integrated into core commercial decision-making policies, designed to deliver sustainable, long term success.

Commercial decisions that resolve societal problems are fundamental to the achievement of an effective SLO.

There is clear evidence that the manner in which the internal departments of a company are structured, and relate to each other, has a direct impact on the success of a company’s relations with its community stakeholders. The way a company conducts its day to day core activities is more important than its community relations programmes in determining how the company is perceived by local stakeholders.

Fundamentally, it is the behaviour of the Company as a whole, not just its external relations department, that drives people’s perceptions of the Company.

It is essential that policies conducive to the acquisition of a SLO are integrated into the decision-making cycles of all departments. For example, the HR Department determines who gets hired, the Contracts Department sets policies that can favour local contractors and suppliers, or make it difficult for local businesses to benefit from the corporate presence. The Accounting Department can facilitate administrative procedures and ensure speedy payment of compensation, or set complicated and delaying administrative requirements.

All the best efforts of an external affairs department can have little impact if the hiring procedures of a company are seen as unfair, security policies are seen to be oppressive or local contractors are not paid on time.

External Engagement – A Concern for All Departments

Safety issues are regarded as the responsibility of everyone on the workforce, regardless of their particular role. Similarly, external relations should be regarded as a responsibility of all, rather than just the External Affairs Department – which should coordinate rather than implement.

When an external relations department is the sole location for community relations experts, this often means that their expertise is required to resolve community problems only after they have already occurred.

It is essential to ensure that ways are found whereby external relations can be transformed from a fire-fighting role, to one of internal service provision. It is also important that ways are found to broaden the ownership for external relations within the organization:

Communities should be approached as partners, rather than as potential risks to be mitigated;

  • Every member of the company should receive training in community affairs skills;
  • Representatives from all departments should be invited to participate in community meetings;
  • The quality of the company’s relationship with local stakeholders should be incorporated into performance reviews for all staff – the number of community related incidents might be linked to the determination of bonuses, or to provide company wide awards for staff of departments that are judged to have made a positive contribution to company-community relations;
  • Ways should be identified to develop in-house capacity in conflict-resolution skills.

Guidelines for the building of a SLO in complex environments

Human Rights (VPSHR)

VPHSRs state that risk assessments are vital to the promotion and protection of human rights. These risk assessments must consider the available human rights records of public security forces, paramilitaries, local and national law enforcement as well as the reputation of private security. Awareness of past abuses and allegations will help companies avoid recurrences as well as promote accountability going forward.

Companies must take care to ensure that their partners are consistent with the protection and promotion of human rights. The following measures will help ensure this:

  • Regular consultation between stakeholders about the impact of security arrangements on those communities, and clear communication between all stakeholders about the need for ethical conduct and respect for human rights by public service providers;
  • The primary role of public security agencies should be to maintain the rule of law, including the safeguarding of human rights, and deterrence of acts which might threaten personnel and facilities;
  • Individuals credibly implicated in human rights abuses must not be allowed to provide security services, and force should only be used when strictly necessary and to an extent proportional to the threat, and the rights of the individual should not be violated while exercising the right to exercise freedom of association and peaceful assembly, the right to engage in collective bargaining or other related rights of employees– as recognised by the Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work;
  • Companies should ensure the holding of structured meetings with public security on a regular basis to discuss security, human rights and related work-place safety issues. Support should be given to the host nation governments to provide human rights training and education for public security, as well as in their efforts to strengthen state institutions to ensure accountability and respect for human rights;
  • In respect of allegations of human rights abuses there should be active monitoring of the status of any on-going investigation, and pressure for proper resolution of these issues, in consultation with host nation government and relevant NGOs. The security and safety of sources must be protected and additional or more accurate information that may alter previous allegations must be made available as appropriate to concerned parties;
  • Companies must ensure that private security companies observe company policies in regard to ethical conduct and human rights, the law and professional standards of host nations, emerging best practice developed by the industry, civil society and governments and the promotion of the observance of international humanitarian law. In particular private security contractors must act in a lawful manner, exercising caution and restraint in a manner consistent with international guidelines on the use of force, including the UN Principles on the Use of Force and Firearms by law enforcement officials and the UN Coode of Conduct for Law Enforcement Officials as well as emerging best practice.
  • Furthermore, private security companies must have policies regarding appropriate conduct and the use of force, which are capable of being monitored. Such monitoring should encompass detailed investigations into allegations of abusive or unlawful acts, the availability of disciplinary measures sufficient to prevent and deter, and procedures for reporting allegations to relevant local law enforcement authorities when appropriate. All allegations of human rights abuses by private security must be recorded, and credible allegations investigated. Once those allegations have been forwarded to the relevant law enforcement authorities, companies should actively monitor the status of investigations and press for their proper resolution.

Part 3 of this series will cover corporate engagement with NGOs and the need for formal engagement, at the outset, between NGOs and corporates on various CSR initiatives. There will also be an overview of the indications of a positive NGO-Corporate relationship, as well as discussion of the need to integrate a grievance procedure when consulting local communities.

Prospect Law Ltd, 7th September 2018

About the Author:

Mark Jenkins advises clients on Corporate Social Responsibility (CSR), security and risk management issues affecting the viability of on and off-shore energy, mining and infrastructure sector projects in Europe, the Middle East and Africa. Mark’s experience has been focussed on creating reliable community support for projects through the development of a Social License to Operate (SLO) based on effective CSR initiatives. The success of these initiatives has been based on a thorough understanding of local environmental, commercial, and cultural dynamics, especially Islamic ones.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here

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CREATING SHARED VALUE IN COMPLEX ENVIRONMENTS: PART I

Part I of this series will focus on the three categories for understanding and analysing company-community relations – Benefits Distribution, Accountability for Impacts and Appropriate Behaviour. There will be analysis of how these categories combine in the building of the kind of relationships necessary for the building of an effective Social License to Operate (SLO).

I am often asked to share thoughts on how corporates can Create Shared Value in complex environments, thereby reducing the significant risk posed to their operations by loss of a Social License to Operate.

Company – Community Relations

A schematic representation of how the three relationships work is below:

 

 

 

 

 

 

Accountability for Impacts

An effective SLO plan will acknowledge the positive and the negative side effects of mining operations on local, and national communities. When a community sees that a company is concerned by, and accepts responsibility for the unintended and long term side effects of its operations, then they will interpret this as a sign that the company cares about them and their lives.

Acceptance of responsibility for any negative effects of commercial operations, such as the Curse of Resources/Dutch disease, is a good example of such acknowledgement. Crucial to the acceptance of accountability for impacts is the need to discuss a long term vision with communities, listen to their concerns about possible negative impacts and provide long term contracts and training plans.

Fair Benefit Distribution

The right approach to benefits distribution is based on the principle of fairness.

Fairness refers to how people in communities perceive the distribution of benefits and their share of these benefits. Unsurprisingly, the key is to ensure that deserving people get what they deserve, and those who do not deserve rewards do not get them. Furthermore, many communities assign value to immaterial and intangible things such as historical and traditional hierarchies, social relations and spiritual qualities. SLO strategies must ensure that people feel they receive non monetary benefits – as well as payments – as a result of a company’s presence. If communities believe the company is fair, it will be reassured. This will reduce needless competition and fear, as well as reinforcing the long term view over short term gains. Transparency is a key component of fairness. A divider and connector analysis will guide ways in which a SLO plan can emphasize and reinforce common and collective interests, among communities.

Appropriate Behaviour

How a company behaves towards communities sends messages about respect and disrespect, trust and mistrust and whether or not it cares, or does not care about them. The behaviour of a company, including its contracted agencies, has a direct impact on how communities view the company. More messages are communicated to local communities by company behaviour than by words or publications. Getting it right involves the showing of respect, trust and care for the communities affected by a company’s operations – respect, trust and care sets the tone for company community relationships, and mitigates risk.

There are many ways in which a company can display these qualities, including:

  • good social interaction;
  • identification and mapping of culturally important sites;
  • open engagement;
  • minimization of overt displays of security;
  • following through on commitments;
  • responsiveness to community inquiries;
  • acceptance of corporate accountability to local communities.

Creation of Shared Value (CSV)

John Browne, a former CEO of BP, has emphasized the risk posed to corporates by having the wrong relationship with society, of neglecting those aspects of their activity that go beyond narrowly legal requirements. For Browne, activities that make a social contribution should be construed as being part of a company’s central purpose.

Browne argues that companies should engage with society in a radical, rather than a grudging and episodic manner. He says that the “definition of purpose” is changing for many organisations, with an increasing acceptance that shareholder value should be seen as an outcome, rather than the goal of commercial activity. Browne says that the integration of Corporate Social Responsibility (CSR) and sustainability into core business activity is tough, but that there is a clear business imperative for the extractive industry to improve its relations with host communities. Across the world extractive communities lose billions of dollars each year as a result of community strife. In particular Browne advocates:

  • Building a portfolio of strategic programmes with long term economic development strategies, rather than making one-off, reactive investments;
  • Creating processes which integrate social investment staff into core business decision making;
  • For a switch from incentivizing on-time, low cost delivery to incorporating social performance into compensation packages;
  • Measuring investments in communities by dollars spent to measuring investments in communities by societal and business outcomes;
  • Building relationships with governments/NGOs and community leaders to help solve societal problems.

Part II of this series will focus on a company’s internal structures and external relations department, and the impact these can have on a company’s relations with its community stakeholders. There will also be discussion of the promotion and protection of human rights in the context of a social license to operate.

Prospect Law Ltd, 21st August 2018

For a PDF of this blog click here

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AN ANALYSIS OF THE CONSULTATION ON AN ENVIRONMENTAL PRINCIPLES AND GOVERNANCE BILL: PART I

Perhaps unnoticed, as people head to the beach in August, Defra’s consultation on ‘Environmental Principles and Governance after the United Kingdom leaves the European Union, which closed on 2 August 2018, is probably the most important consultation affecting environmental laws to be introduced for at least the last ten years. It goes right to the heart of how environmental laws will, or should, or may not be, enforced, after the UK leaves the EU.

It proposes a new Bill, to set up a new body with the essential task of holding government and public bodies to account for environmental law enforcement, in place of enforcement of EU law by the European Commission and Court of Justice of the European Union.

The Bill will also address how the key environmental principles which underpin EU environmental laws should be reflected in UK laws after Brexit. The new Bill will only apply to England, as responsibility for the environment is a devolved matter, but similar issues will arise for each devolved administration. Debates continue over the workability of having four separate enforcement bodies, or a single body for the UK applying consistent standards but (and this is now a pressing need) taking real and full account of the concerns in each of the UK’s constituent parts.

In this article, the author argues that given the current failures of enforcement under existing legal structures, there now needs to be a legal duty upon all levels of government“ to secure the effective enforcement of environmental laws” for which they are responsible. He also argues that government and public bodies must, as a minimum, have regard to environmental principles when discharging their functions, and must commit not to dilute the existing application of those environmental principles where already reflected in EU law; and that it is time to introduce the principle of environmental justice to UK law.

Issues of non enforcement of existing EU environmental laws

The consultation does not address the really serious issue of non-enforcement of existing EU laws under existing structures. Examples of this are as follows.

Volkswagen and ‘defeat devices’

Volkswagen placed 590,000 vehicles containing defeat devices to mislead emissions tests on the US market. After investigations by Congress, State Attorneys General, the FBI, the Department of Justice, the State of California, Volkswagen in 2017 agreed to plead guilty and to pay $4.3 billion in criminal and civil penalties, ($2.8 billion criminal and $1.5 billion civil penalties). Six executives and employees were named and indicted.

Volkswagen placed 1.2 million cars fitted with similar devices on the UK market. Initially, the then Transport Secretary wrote to the European Commission saying that he hoped they would “investigate this matter thoroughly and take appropriate action to avoid a recurrence”. On 8 December 2016, the European Commission opened infringement proceedings against 7 states, including the UK and Germany “for failing to set up penalties systems to deter car manufacturers from violating car emissions legislation, or not applying such sanctions where a breach of law has occurred.” Since that time, it does not appear that any UK enforcement authority has taken any enforcement action of any description against Volkswagen for this matter.

Air quality and the ClientEarth cases

The UK’s non- compliance with EU air quality legislation, and the ClientEarth series of cases in different jurisdictions to try to enforce it, are a matter of record. Successive UK governments must know quite well what EU laws require on air quality; but ClientEarth has been obliged to go back and back to court to obtain one ruling after another that the UK government is in breach.

Illegal waste sites

It is becoming clear that in parts of the UK there may be hundreds of illegal waste sites that are not yet being tackled by the environmental regulators, who are somewhat given to complaining that they simply lack the resources to do more to enforce existing laws in the area. This gives rise to two questions. First, is there the will to enforce existing law? Secondly, if the issue is really about resources, what can and should be done, for example, to share more of the proceeds of crime recovered in waste cases with the regulatory agencies, instead of with the Treasury?

Enforcement of river pollution incidents

The current referral to the European Commission by Afonydd Cymru of the inactions by the NRW in enforcing existing river and nitrate legislation underlines both the availability at present of a European remedy to breaches of EU environmental law, and the importance of oversight of environmental regulators as a practical issue for environmental law enforcement.

Failure to enforce existing environmental laws, at a time when the UK is, on Brexit, removing many of the most effective powers and means for their enforcement, risks sending a signal that pollution pays, that compliance with environmental laws is for the little people, not large companies, and that regardless of public concern, there isn’t the political will to make enforcement effective. Again, if environmental laws are not going to be effectively enforced, it doesn’t greatly matter what they say.

What is needed to make enforcement of environmental laws effective is –

(i)        clearly drafted laws;

(ii)       a strong political message, from the top, that environmental laws are there to do an important job, and will be enforced, against individuals, and companies of all sizes;

(iii)      a proper statement of enforcement policy by regulators;

(iv)      properly resourced, adequately informed and skilled, independent and robust regulators; and

(v)        a legal duty on all levels of government “to secure the effective enforcement of environmental laws” – something which the new environmental regulator can focus on, and support.

The follow-up to this article will address losses the UK may suffer in terms of environmental law enforcement once it leaves the EU, as well as the likely aims of bodies set up under the Environmental Principles and Governance Bill and environmental justice concepts  in operation in  the USA.

About the Author

William Wilson is a specialist environmental, regulatory and nuclear lawyer with over 25 years experience in government, private practice and consultancy. He worked as a senior lawyer at the UK Department of the Environment/DETR/Defra, and helped to build up the environmental and nuclear practices at another major law firm, as well as running his own environmental policy consultancies. William has experience of all aspects of environmental law, including water, waste, air quality and industrial emissions, REACH and chemicals regulation, environmental protection, environmental permitting, litigation, legislative drafting, managing primary legislation, negotiating EU Directives and drafting secondary legislation.

Prospect Law is a multi-disciplinary practice with specialist expertise in the energy and environmental sectors with particular experience in the low carbon energy sector. The firm is made up of lawyers, engineers, surveyors and finance experts.

This article remains the copyright property of Prospect Law Ltd and Prospect Advisory Ltd and neither the article nor any part of it may be published or copied without the prior written permission of the directors of Prospect Law and Prospect Advisory.

This article is not intended to constitute legal or other professional advice and it should not be relied on in any way.

For more information or assistance with a particular query please in the first instance contact Adam Mikula on 020 7947 5354 or by email on adm@prospectlaw.co.uk.

For a PDF of this blog click here