Blackland Park Exploration Ltd v Environment Agency

The appellant owns and operates an on-shore oilfield at Whisby in Lincolnshire. The site is about 5 miles south west of Lincoln. The issue in this appeal is whether the disposal there of hazardous liquid industrial wastes into sandstone and limestone strata lying 1000 metres or so below sea level through a borehole constitutes the site “landfill” within the meaning of the Landfill (England and Wales) Regulations 2002 (“the Landfill Regulations”). Blackburne J held that it does, with the consequence that the appellant must cease this aspect of its operations. The appellant is said to be the only company in the United Kingdom bringing wastes onto a site for disposal in this manner.

Regulation 9(1) of the Landfill Regulations provides, so far as material, that:

“The operator of a landfill site shall not accept any of the following types of waste at the landfill-

1)

any waste in liquid form (including waste waters but excluding sludge)-----”

By schedule 5 paragraph 3 this prohibition applies, from 16 July 2002, to hazardous wastes and the appellant accepts that the liquid wastes disposed of at its Whisby site are hazardous wastes.

The Landfill Regulations implement Council Directive 1999/31/EC on the landfill of waste (“the Landfill Directive”). It is trite law that the Landfill Regulations should be interpreted as far as possible in the light of the wording and purpose of the Landfill Directive in order to achieve the result pursued by it, see Marleasing S A v La Comercial Internationale de Alimentation S A [1990] ECR I-4135, and Litster and Others v Forth Dry Dock Engineering Co Ltd [1990] I AC 546.

Article 2(g) of the Landfill Directive defines ‘landfill’ as:

“a waste disposal site for the deposit of waste onto or into land (i.e underground).”

It will be seen that the wording in reg 3(2) of the Landfill Regulations is identical except that the words in brackets have been omitted. Nothing turns on this omission.

The facts

The appellant's site or oilfield at Whisby extends to about 121 hectares beneath the surface of the land. The oil is contained within a porous layer of sandstone and, beneath that, limestone. It is mixed with water. There are two production wells, through which it is pumped to the surface. Another well was abandoned and capped in 1990. The extracted oil flows as an emulsion into a recovery system whence it is separated into oil, gas and water. The oil is stored and transmitted off-site to a refinery. The gas is flared and the water, or production water as it is called, is moved to a separate injection well where, without further processing, it is re-injected into the oil-bearing strata. However, the part of the operation with which this appeal is concerned is not that which I have just described, but the disposal of liquid wastes that are brought onto the site from elsewhere and injected into the oil-bearing strata by means of the same injection well. The borehole in question is sunk to a depth and position in the strata where the liquid waste discharged from it will not mix with the oil/water, which is being extracted from elsewhere in the strata. The producers of the wastes pay the appellant to dispose of them.

Disposal of imported wastes has become the appellant’s major activity at the site. In the 18 months to November 2001 nearly 10500 tonnes of wastes were injected into the borehole.

As is apparent from reg 9 there is an absolute prohibition against the disposal of liquid waste at landfill sites. This has been the position in England and Wales following the implementation of art 5.3 of the Landfill Directive. The European Commission had come to the conclusion in 1997 that this was desirable when it proposed the Landfill Directive. The United Kingdom had pressed for a less extreme position i.e. not an absolute prohibition, but was unable to secure sufficient support from other Member States. It has not been suggested that the appellant’s operations have had or will have any detrimental effect on the environment, but the Commission in implementing the Landfill Directive has adopted a precautionary approach and if the site is a landfill site the prohibition must be complied with.

A report produced by the appellant and dated August 2001 states that a layer of impermeable rock above the injection zone prevents upward migration of hazardous contaminated water effectively isolating it from the earth’s surface and drinking water. It is thereby sealed much like oil and gas deposits and, so it is said, will be contained for millions of years. What is injected is going, effectively, into a huge underground reservoir or sponge. It cannot escape.

The oil production process at Whisby is permitted by an integrated pollution control authorisation (IPC) issued under Part I of the Environmental Protection Act 1990 (“the EPA 1990”). The IPC enables the appellant to operate the oil production process at the site subject to the conditions set out in the authorisation. It was issued in 1993 to the appellant’s predecessor and has been amended from time to time. The appellant also holds a waste management licence (WML) which, since 1994, has fallen to be treated as a WML under Part II of the EPA 1990.

The WML stipulates the types and quantities of waste that may be accepted at Whisby and injected through the No 2 borehole into the underground strata (described in the licence as the underground reservoir). It authorises the deposit of liquid waste subject to various conditions.

Reg 6 of the Landfill Regulations amends the Pollution Prevention and Control (England and Wales) Regulations 2000 (S.I 2000/1973) (“the PPC Regulations”) so that landfills covered by the Landfill Regulations require a permit under the PPC Regulations. Part II of the Landfill Regulations is headed ‘landfill permits’ and reg 9 sets out the various types of waste that are prohibited and these include liquid waste. Part III, which is headed ‘miscellaneous’, provides, inter alia, transitional provisions for existing landfills that are operative at 16 July 2002. Broadly, such sites are brought into compliance with the Landfill Regulations and those that are unable to comply are closed. Those that remain are to be granted new permits in accordance with the Landfill Regulations.

If the site is a landfill then the appellant is prohibited by the Landfill Regulations from disposing of the imported wastes; the WML is of no avail. If however the site is not a landfill, the position, as I understand it, is as follows. The Whisby site is an existing installation carrying out an activity under Part A (1)(a) of reg 5.3 of the PPC Regulations– disposal of hazardous waste (other than by incineration or landfill) in a facility with a capacity of more than 10 tonnes per day and at the appropriate time the appellant has to apply for the necessary permit under the PPC Regulations.

It is not disputed that the appellant may continue to re-inject the production water into the oil bearing strata but the parties are not agreed as to why this is so. Ms Smith, who has appeared for the respondent, submits it is not ‘waste’ within the meaning of Directive 75/442/EEC (“the Waste Framework Directive”). She relies on Application by Palin Granit Oy [2002] 1WLR 2644 in which the European Court of Justice considered at paras 33 – 37 of its judgment what amounted to waste. Her argument is (1) the production water is always re-injected into the oil bearing strata, (2) it is not subjected to any further processing following the extraction of the oil and any gas, and (3) it is re-injected to maintain the oilfield’s pressure and is therefore an integral part of the production process. Mr Tromans, for the appellant, on the other hand argues that the production water is ‘waste’ but is excluded from the scope of the Waste Framework Directive because it is “waste resulting from……extraction treatment and storage of mineral resources….” and accordingly falls within the exclusion in art 2(b)(ii). It therefore falls instead under the umbrella of Directive 80/68/EEC (“the Groundwater Directive”) and is not included within the list of prohibited substances under that Directive. It is also the case, as the respondent said in a letter of 15 January 2002, that it had declared under reg 4(5)(a) of the Groundwater Regulations 1998 (SI 1998/2746) that the groundwater at the Whisby site was permanently unsuitable for other uses with the consequence that List 1 substances could, subject to precautions, be discharged into it. In the event, as the judge pointed out, resolution of the issue why it is permissible to re-inject the production water is not required and I express no view upon it.

The appellant sought a binding declaration under Part 40.20. The judge refused the declaration sought by the appellant and instead granted a declaration that:

“The Whisby site and the strata and groundwater into which the No 2 borehole at the site discharges constitutes a “landfill” within the meaning of the Landfill Regulations insofar as imported liquid wastes are discharged into those strata.”

However, the respondent has permitted the appellant to continue the discharge of imported wastes pending the outcome of this appeal.

Regulation 17 of the Landfill Regulations makes it an offence to contravene, inter alia, reg 9 of those regulations. The maximum penalty on summary conviction is a fine not exceeding £20,000 or six months imprisonment and on indictment imprisonment up to 5 years or an unlimited fine.

During the hearing of the appeal the court raised with counsel whether an action for a declaration was appropriate and whether the proceedings should have been entertained by the judge. This question was not considered by, or indeed raised before, Blackburne J. It does, however, bear examination because, as Lord Steyn said in R (Rushbridger) v Attorney General [2003] 3 WLR 232, 240H, normally the seeking of a declaration in a civil case about the lawfulness of future conduct will not be permitted, although in truly exceptional cases the court may allow such a claim to proceed. Is this a truly exceptional case? In Rushbridger Lord Steyn referred to three criteria. The first is the absence of any genuine dispute about the subject matter. The second is whether the case is fact sensitive and the third is whether there is a cogent public or individual interest that can be advanced by the grant of a declaration. As Lord Hutton said at 245B, it is not the function of the courts to decide hypothetical questions which do not impact on the parties before them.

It is clear to my mind that applications under Part 40.20 should not be utilised to by-pass or delay the criminal process whether in environmental cases or any other branch of the law. However, there are in my view very exceptional circumstances in the present case that fully justify the present proceedings. There is no dispute about the essential facts. Both parties are anxious to have a discreet point of law clarified. They both have a genuine interest in the outcome. Indeed the appellant has been keen to have the issue resolved from well before the Landfill Regulations came into force and commenced the present proceedings before they did so. There is neither the existence nor the threat of criminal proceedings. Both sides simply want the law clarified. It was agreed that the respondent would not take criminal proceedings pending the outcome of the litigation. Picking up the way in which Lord Rodger of Earlsferry put it at 250E in Rushbridger, the interests of justice require that the appellant should be able to obtain the ruling of the civil court before continuing with a course of conduct that could lead to prosecution. For my part I am entirely satisfied that it was appropriate for the judge to hear the application.

The judge put his conclusion in this way. The question is the nature of the appellant’s activity: is it operating the Whisby site for the disposal of waste onto or into land? If it is, the site is a landfill and subject therefore to the requirements of the Landfill Directive. He answered the question in the affirmative.

The starting point is to look at the language of reg 3(2) against the background of the Landfill Directive and consider whether what the appellant is doing falls within the language of the Directive and the regulation. There is no doubt that the Whisby site is a site for the disposal of waste. Hazardous waste is brought there from elsewhere for disposal. The Whisby oilfield is regulated as a waste disposal site by a WML. The appellant accepts it is engaged in the disposal of what is described as hazardous waste into the oilbearing strata. The real question is whether the disposal involves “the deposit” of the waste into land.

Mr Tromans submits that there is no obvious reason why the appellant’s activities at Whisby should fall within the ambit of the Landfill Directive and the Landfill Regulations. There are other perfectly good means for controlling what is being done there. To construe them in such a way that the disposal of liquid wastes into the sandstone and limestone strata falls outside them is in no way to compromise the objectives of the Directive. Neither the Landfill Directive nor the Landfill Regulations was ever intended to catch this type of activity. It is simply not a landfill activity to discharge into a water environment. There is no control over where the waste goes once it leaves the borehole and intermingles with the water that is already there. A landfill is a controlled medium. He has advanced his argument under four broad headings, submitting that together they lead to the conclusion that the operation was not landfill. I shall deal with them in turn.

The other aspect of the appellant’s case is a submission that the most appropriate way of regulating the injection of production water and imported waste is through a discharge consent under ss 88(1)(a) and 91(8) of the Water Resources Act 1991. This point, however, does not arise if, as in my judgment is the case, the site is a ‘landfill’ and the Landfill Regulations apply.

The definition of landfill in the Landfill Directive contains the additional words in brackets “ i.e. underground.” These words do not, as I have said, appear in reg 2 but they do seem to me to emphasise the breadth of the Directive. The locality of the landfill can be anywhere on or beneath the surface of the land.

The heading of the Landfill Directive makes it clear that it is concerned with the landfill of waste. Article 1 of the Directive describes its aim in these terms:

“by way of stringent operational and technical requirements on the waste and landfills, to provide for measures procedures and guidance to prevent or reduce as far as possible negative effects on the environment, in particular the pollution of surface water, groundwater, soil and air, and on the global environment, including the greenhouse effect, as well as any resulting risk to human health, from landfilling of waste, during the whole life-cycle of the landfill.”

Recital (7) refers to the necessity to take measures to avoid the uncontrolled disposal of waste and the need to monitor landfill sites to see that substances contained in the waste as far as possible react in foreseeable ways. Recital (12) mentions specifically measures to protect against the pollution of groundwater by leachate infiltration into the soil.

Annex 1 to the Directive specifies general requirements for all classes of landfill including water control and leachate management as well as protection of soil and water. Art 5 covers waste and treatment not acceptable in landfills and art 5.3 specifically requires Member States to take all measures to ensure that liquid waste is not accepted in a landfill.

This Directive to my mind spells out a comprehensive code for the disposal of waste by landfill. Its fundamental concern, as Mummery LJ pointed out in argument, is with the removal of waste from one place to another rather than protecting the water environment. In short, its purpose is control of disposal of waste. Examination of the whole of the Directive in my view leads to the conclusion that it should be interpreted widely rather than narrowly and the same applies to the Landfill Regulations whose purpose is to implement the Landfill Directive in England and Wales.

A cornerstone of Mr Tromans’ argument is that the appellant’s operation is not the deposit of waste into land. The injection of liquid waste into deep hole wells is not appropriately described by the verb deposit. A more apt word would be discharge. I note, however, that the appellant’s waste management licence refers to ‘deposit’ rather than ‘discharge’ of waste through the wellhead. Nor, he submits, does the term disposal site suitably describe oil bearing strata 1000 metres below sea level. The reality of the operation is not deposit into land but discharge into water.

There are several measures that regulate the disposal of waste into water. They use the verb discharge rather than deposit. Examples are Directive 76/464/EEC (on pollution by dangerous substances discharged into the aquatic environment); the Groundwater Directive; Directive 78/176/EEC (on waste from the titanium oxide industry); and Directive 75/439/EEC (on the disposal of waste oils). Mr Tromans draws particular attention to the distinction in the latter between deposit into soil and discharge into water. He relies strongly on the linguistic distinction between discharge and deposit and argues that the use of the word deposit in the Landfill Directive is an important pointer in favour of his case.

He submits that his case is supported by other language versions of the Landfill Directive which all, he argues, point to landfill in the classically understood sense described in shorthand as the municipal tip. This is quite different from the discharge of liquid waste into water. For my part I find little assistance in looking at other language versions of the Directive. In this case, what Mr Tromans is seeking to do is via other language versions of the Directive to attach a particular meaning to the English word ‘deposit’ and thus distinguish it from ‘discharge’. In my judgment a much surer guide to its meaning is to be found from the Directive as a whole. Also, I do not find other language versions a pointer to why the United Kingdom should adopt a less restrictive interpretation to an anti-pollution measure of this kind. The purpose of the Directive is to move Member States forward, not to stop them taking a further step forward if they wish.

I see a clear distinction between the disposal of waste on the one hand and the pollution of water on the other. There will be cases, of which this is one, that fall somewhere near the boundary. The underlying objective of the legislation in both fields is protection of the environment. I do not see the two fields as mutually exclusive. To me it is not at all surprising if the two areas of legislation overlap. Essentially what is happening at the Whisby site is that the waste is being transmitted underground and left (deposited) in a large identifiable area in which it will remain. The fact that there is a great deal of water within the area and that the waste mixes with the water does not prevent what is occurring from being the deposit of waste into land. There is no difference in principle from depositing waste in a disused mine in which water lies. The distinction is that the waste is not being discharged into, for example, an underground stream through which the water passes away from the place of discharge and into the sea.

I agree with the judge’s conclusions that the word ‘deposit’ does not imply placing into a controlled medium and that the appellant’s activities cannot properly be described as discharge into groundwater and therefore outside the scope of the Directive. I think it is entirely appropriate that the Landfill Regulations should be interpreted broadly rather than narrowly. I accept the submissions of Ms Smith, for the respondent, in this regard. As the judge pointed out, the Directive explicitly recognises the danger of pollution of groundwater by the deposit of waste (see in particular recital 12 and art 1.)

The appellant’s argument is that the objectives of the Landfill Directive do not require its activities to be regulated as a landfill. The respondent submits that prohibiting the activities is not inconsistent with the purpose of the Directive which is clearly set out in art 1(1). The target is protection of the environment and human health. Pollution may occur whenever waste is placed onto or into land and the Directive is concerned to prevent or reduce that pollution. The prohibition of the appellant, if that is the effect of the Landfill Regulations, does not seem to me to be in any way inconsistent with that objective. I accept Ms Smith’s point that the Directive is concerned with landfill and its impact on the environment rather than other methods of disposal of waste such as incineration and it is for this reason that the Directive emphasises the potential polluting impact of landfill on groundwater (i.e. water underground). It is not arguable in my view that the Directive’s ambit extends no further than the traditional or “municipal tip” sense of landfill. The words “onto or into land” are very wide and include all methods of depositing waste onto or into land.

Some assistance can also be gleaned from the travaux preparatoires. An absolute ban on the disposal of liquid waste in landfill was eventually proposed in 1997 and this resulted in art 5.3 of the Landfill Directive. The position can be traced back to 1991(COM (91) 102 final) when the proposal was that liquid waste was only acceptable if compatible with other waste and the operational procedures. The concern was groundwater contamination and the stability of the site. Later efforts to achieve an absolute bar failed in 1993 (see explanatory memorandum to Com (93) 275 final) but succeeded in the Commission proposal in 1997 (see Com (97) 105 final) when liquid waste was among those types of waste proposed as not acceptable for landfill. This led to the Landfill Directive in 1999. As the chairman of the respondent pointed out to the appellant in a letter of 5 January 2001, the fact that the U.K. Government had pressed unsuccessfully for a ‘Best Practical Environmental Option’ to be a factor in determining whether a waste should be landfilled was neither here nor there. The question is simply whether the appellant’s operations are caught by the Landfill Regulations.

The travaux preparatoires also indicate that it is a purpose of the Directive to promote the waste hierarchy and discourage the landfilling of waste. There are alternative methods of disposal of waste, and by the waste hierarchy landfill is the last resort. Other things can be done with liquid waste. These include pyrolyisis and gasification; air stripping or pH balancing; aerobic and anaerobic treatment (such as those used by some water companies); high temperature incineration and solvent recovery treatment. It seems to me that prohibiting the disposal of liquid waste at Whisby is entirely consistent with the objectives of the Directive.

The Landfill Directive is clearly concerned with the protection of groundwater resources from landfill activities, but Mr Tromans submits that it is the Groundwater Directive that specifically governs the direct discharge of listed substances into groundwater. By implication, therefore, under the Groundwater Directive non-listed substances may be discharged into groundwater and listed substances expressly may be so discharged where, as in the present case, the groundwater in question has been declared to be permanently unsuitable for beneficial use.

So, it is argued, if the direct discharge undertaken by the appellant is “landfill” the effect is to render unlawful an activity that the Groundwater Directive expressly contemplates to be lawful. Had such a result been intended The European Commission would surely have amended or repealed the Groundwater Directive. I do not accept this argument.

Prior to the Landfill Directive, landfill activities were regulated under the waste management licensing regime. The Waste Framework Directive was introduced into U.K. domestic law by Part II of the EPA 1990, s 33 (1)(a) of which provides that:

“a person shall not deposit controlled waste--------in or on any land unless a waste management licence authorising the deposit is in force and the deposit is in accordance with the licence.”

European Community law regarded the deposit as lawful provided there was an appropriate licence in place. The appellant’s activity was regulated under the WML; waste disposal was permitted under the authority of the WML. The appellant’s activities were lawful if they were covered by the licence, which they were. But time moved on and the European Community decided, for very understandable reasons, to take a stronger line on waste disposal and produced the Landfill Directive which, by art 5.3, imposed a total ban on the deposit of liquid waste. There are stricter environmental controls nowadays and that which, in appropriate circumstances, could previously have been done lawfully is now prohibited under the Landfill Directive.

Also, the application of the Landfill Directive to operations at the appellant’s site does not render the Groundwater Directive obsolete. The fact that it was previously lawful to deposit liquid waste through the operation of the Groundwater Directive is nothing to the point. The Groundwater Directive applies to all discharges to groundwater of the substances listed in its annex. It applies across the board to discharges generally and not just to waste disposal activities such as those conducted by the appellant. It is important to distinguish between the pollution of groundwater on the one hand and disposal of waste on the other. The legislation in respect of each is not to be regarded as mutually exclusive.

Mr Tromans draws attention to the Water Framework Directive (2000/60/EC) which, he points out, is intended to provide a framework for the protection of all water resources in the Community by an integrated water policy. It will eventually replace the Groundwater Directive. Art 11 requires each Member State to establish a programme of measures. These are to include (per 11(3)(j)) a prohibition against the direct discharge of pollutants into groundwater subject to various conditions, one of which is that they may authorise, specifying the conditions for:

“injection of water containing substances resulting from the operations for exploration and extraction of hydrocarbon or mining activities, and injection of water for technical reasons into geological formations from which hydrocarbons or other substances have been extracted or into geological formations which for natural reasons are permanently unsuitable for other purposes. Such injections shall not contain substances other than those resulting from the above operations.”

By art 11(7) the programme of measures must be established within 9 years of the Directive coming into force (i.e. by 22 December 2009) and be implemented within 12 years (i.e. by 22 December 2012). So, argues Mr Tromans, the discharge of production water and liquid wastes can continue until at the latest 2012 and the discharge of production water could, if authorised, continue after that date. There is no need to construe the Landfill Directive and the Landfill Regulations in the wide manner urged by the respondent so as to negative what is envisaged by the Water Framework Directive as continuing until 2012.

We were referred to the Council Decision of 19 December 2002 establishing criteria and procedures for accepting waste at landfills pursuant to art 16 of and Annex II to the Landfill Directive. Mr Tromans submits that there is no mention of the type of process with which this case is concerned and, therefore, as I understand it, that this supports his case that the operation is controlled by the groundwater legislation rather than as landfill. I cannot accept this argument. Liquid waste was already prohibited by the Landfill Directive so one would hardly expect to find it referred to in the December 2002 Council Decision. The production water is either not truly classified as waste or, if it is, it is liquid waste. In either event one would not expect to find it covered in the Council Decision.

The appellant’s argument is that the technical standards set out in Annex 1 to the Landfill Directive and Schedule 2 to the Landfill Regulations are inappropriate for their waste disposal activity at Whisby and that therefore it cannot have been the intention that the activity should fall within the scope of the Directive.

We were referred to a series of what Mr Tromans described as mandatory technical standards that are inappropriate for regulation of deep hole well injection. These include the following. The references are to Schedule 2 of the Landfill Regulations which is headed: “General Requirements for Landfills.”

It seems to me that Mr Tromans’ argument puts the cart before the horse. It is not the case that because a site cannot meet the technical requirements it is therefore not a landfill. Whether or not a site is a landfill depends upon whether it falls within the definition of ‘landfill’. If a landfill site cannot meet the technical requirements then the sanction is that it will be denied a permit.

As Ms Smith points out the technical standards are not rigid. There is considerable flexibility in their application. Art 8 of the Landfill Directive refers to all relevant requirements of the Directive including the annexes. Also both paras 2 and 3.4 of annex I provide that the stringent technical standards do not apply if assessment shows that the landfill poses no potential hazard to the environment.

Ms Smith also invites us to note that it is not the case that all the technical standards could not apply to the operation at Whisby. Some are already applied by the WML.

She makes the following points in relation to the specific paragraphs referred to by Mr Tromans

As to Regulation 12, there are already detailed provisions for the inspection of waste on arrival at Whisby and before it is injected into the borehole (WML 3.3. and 3.4).

What it comes to is in my view this. None of the technical standards to which Mr Tromans refers support his argument that it cannot have been the intention of the legislator that the appellant’s activity should fall within the scope of the Directive. I accept Ms Smith’s submission that these standards are expressed with sufficient flexibility to show that they are intended to apply to different factual situations. The draughtsman probably had in the forefront of his mind the type of classical landfill site as most people understand it. Whilst Whisby is said to be a unique landfill, I am unpersuaded that these technical requirements help the appellant’s case that it was not a landfill site as defined in the regulations. In my judgment the judge was right to say that, these requirements merely go to show how stringently the framers of the Directive view what might qualify as landfill.

The European Community has over recent years been increasingly concerned to protect the environment. To this end a number of initiatives have been taken. Directives have been made and implemented in domestic legislation. Parallel systems of control have been developed concerning pollution of water and disposal of waste. The two are not mutually exclusive. This case involves, as regards the facts, the interaction between water and waste. The regulatory regimes overlap. But art 5.3 of the Landfill Directive, implemented in England and Wales by reg 9(1) of the Landfill Regulations, imposed from 16 July 2002 an absolute prohibition against accepting liquid waste at a landfill site. The critical question in this appeal is whether the 121 hectares at Whisby into which the appellant wishes to continue to deposit imported liquid waste is such a site. In my judgment it is and the single most important reason for so concluding is that, once deposited, the waste does not dissipate beyond the site. It is naturally buoyant and is constrained by the upper layer of clay. Thus it is deposited into land. The fact that there is a good deal of water present in the place into which it is deposited is no different in principle from the presence of water at the bottom of a disused mine.

I would therefore dismiss the appeal.

I agree.

I also agree.