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What does leaving the EU mean for waste management law?

Angus Evers, expert in waste law, reflects on the potential legal consequences for the waste and resource industry of the UK’s decision to leave the EU.

What does leaving the EU mean for waste management law?The EU membership referendum result will have come as an unwelcome surprise to many in the waste and resource management sector. At the recent Resourcing the Future conference organised by the Chartered Institution of Wastes Management, the Environmental Services Association and the Resource Association, 80 per cent of delegates indicated in an electronic poll that they favoured remaining in the EU.

The possible political, constitutional and economic consequences of the referendum result will take years, if not decades, to play out. They are currently being debated extensively in the media, and I am therefore not proposing to comment on them in this article. I am instead going to focus on some of the legal and regulatory aspects of the referendum result.

Certainties and uncertainties

The first (and very obvious) point to make is that nobody knows what the consequences for waste management law and regulation in the UK will be. The only certainty is that there will be uncertainty. This is primarily because of the failure of the Leave campaign to articulate any kind of manifesto for what it would advocate in the UK's exit negotiations with the other EU member states, but even if it had set out a clear vision for the waste and resource management sector post-exit, the reality of what emerged from those negotiations would inevitably look different. Environmental issues scarcely featured in the referendum campaign, and it is likely that they will not be high on the agenda for any new government mandated with extricating the UK from the EU.

Article 50

Before 24 June, few people had heard of Article 50 of the EU Treaty, which sets out the procedure for a member state to leave the union. Now, it is the focus of great attention. The first step would be for the UK government to give notice of withdrawal to the European Council (though the timing of that notice is another uncertainty). There would then be a two-year period for the UK to negotiate the terms of its exit. Any withdrawal agreement (including any free trade provisions) would have to be agreed on a qualified majority basis by the European Council, with the consent of the European Parliament. The UK would leave the EU when that agreement came into force, or if no agreement was concluded, two years after giving notice of withdrawal. The two-year deadline can only be extended if all the other 27 member states agree unanimously to extend it.

The Article 50 procedure has never been used before, so it is untried and untested. A similar procedure was used by Greenland to leave the European Economic Community in 1985, but the two-page agreement dealing mainly with fisheries issues took three years to negotiate, which does not bode well for the UK's negotiations.

Possible scenarios for waste management law and policy

A range of different possibilities now awaits waste management law and policy in the UK. Which one of these actually materialises depends on the terms of any withdrawal agreement. It is also important to remember that environmental matters such as waste policy are devolved matters, so different scenarios may play out in the four different parts of the UK (leaving aside the possibility of a second referendum on Scottish independence). Those predicting a bonfire of environmental regulations should bear in mind that many of the UK’s environmental laws implement international treaties and agreements that would still bind the UK – in the waste and resource management sector, the Basel Convention on Transboundary Movements of Waste is the most obvious example.

Here are three possible broad scenarios:

Scenario 1 – The UK is still bound by most EU waste management laws

If the UK ends up joining the European Economic Area or entering into an alternative agreement that gives it full access to the single market, it will almost certainly have to continue to apply most EU environmental laws, including those in relation to waste management. However, the UK would have no influence over the formulation of new laws because only EU member states can vote on proposals in the European Council and European Parliament. Certain existing EU environmental laws would cease to apply, including the Birds and Habitats Directives, which might make the delivery of major waste infrastructure easier; the government and the devolved administrations would need to decide what to do with domestic laws and policies in those areas.

Scenario 2 – Things remain as they are for other reasons

If the UK negotiates a withdrawal agreement that does not require it to continue to apply EU environmental laws, it might decide to preserve current waste management laws because regulating waste management activities makes sense from a regulatory perspective. Lower standards would risk diminishing the sector’s standing in the public eye and would give rogue operators greater freedom to operate.

Scenario 3 – The UK develops its own waste management laws and policies

Another possibility if the UK does not have to apply EU environmental laws would be that the government and devolved administrations develop their own ‘home-grown’ waste management policies and laws. The risk for businesses operating across the UK in this scenario is that some parts of the UK might choose to be more ambitious and adopt more stringent environmental laws and policies, while others choose to get rid of environmental laws and policies because they are considered barriers to economic growth. However, the government and the devolved administrations would not have an entirely free hand in this – as mentioned above, many existing environmental laws and policies implement international treaties and agreements.

What should businesses operating in the waste and resources sector do now?

Until the position becomes clearer on the timing of the notice of withdrawal under Article 50 and the UK’s negotiating stance in the withdrawal negotiations, from a legal perspective, the message is business as usual, as existing waste management laws continue to apply. Contracts will still need to be performed and laws will still need to be complied with. In the longer term, however, there are a number of important questions that will need to be considered, such as:

  • What will be the status of EU legislation that is referred to in domestic legislation such as the Environmental Permitting (England and Wales) Regulations 2010? On a positive note, this may provide a good opportunity to re-write confusing and impenetrable legislation in a more user-friendly way.
  • What would be the status of European Court decisions on matters such as the definition of ‘waste’? Could they continue to be used to assist with interpretation? Again, from a positive perspective, there may be an opportunity for the domestic courts to develop more flexible case law that facilitates innovation and the more sustainable use of secondary raw materials.
  • What will be the impact on contracts for the delivery and operation of major waste management infrastructure? Will change in law provisions be triggered? If so, which party bears the risk (and therefore the cost) of those changes? Will the UK’s withdrawal from the EU constitute a force majeure event allowing contracts to be terminated or performance suspended?

It is too early in the withdrawal process to be able to answer any of those questions, but in the meantime there is a window of opportunity for all stakeholders in the waste and resource management sector to engage with government and regulators to create a vision of what a successful sector operating in a post-EU future looks like. That vision then needs to be carried into the UK’s withdrawal negotiations with the other EU member states in order to create a coherent, transparent and accessible legal and policy framework that can serve the sector better than the existing EU framework.

Angus Evers is a Partner and Head of Environment at national law firm Shoosmiths LLP.