Costing the earth

New legislation forcing the polluter to pay for land contamination is set to cost industry millions of pounds. Failure to carry out pollution audits on former sites will lead to stiff penalties. Patrick Murphy reports

British industry could face a bill of hundreds of millions of pounds following the introduction of long-delayed legislation aimed at cleaning up contaminated land.

Based on the principle of `the polluter pays’, the Environmental Protection Act, expected to come into force this December after the imminent publication of draft guidance, will make firms responsible for cleaning up sites which may have been abandoned decades before.

Industry estimates suggest there may be 100,000 contaminated sites in the UK, which could cost manufacturers up to £30bn to clean up. Any site on which an industrial process has been operated is potentially contaminated. `Firms should realise that contaminated land costs money,’ says Merlin Hyman, deputy director of the Environmental Industries Commission.

But there is no simple answer to the question of who is responsible. Many companies have built plants on old waste sites or foundries, gas and dye works. Pinpointing who is to blame for each contaminant will be difficult. Mergers, takeovers and insolvencies add a further level of complexity. In industries such as chemicals this is a significant issue.

`It might become a big paperchase,’ warns Judith Hackitt, business and environment director of the Chemical Industries Association. Hackitt is advising companies to check their own land before the local authority gets there first: `It’s best to find out for yourself. Then you are in control of the best solution instead of one being imposed.’

Environment minister Michael Meacher anticipates that most remediation works will take place on a voluntary basis and has pledged that small and medium-sized players will not be driven out of business by the cost of compliance.

But ominously, tens of millions of pounds are being earmarked for enforcement. Local authorities, which are policing the new regime, will get £50m over the next three years to make sure firms comply. The Environment Agency has had a grant increase of £13m over the same period to finance its role in getting the worst polluting sites to meet the requirements.

Penalties for non-compliance are severe. If a local authority believes contamination poses a serious enough threat to health, it can take action to remediate the land and then bill the company or individual responsible to recover its costs. Remediation notices can also be served, ordering firms to clean up a site. Failure to comply with such a notice is a criminal offence, leading to a fine of up to £20,000 on conviction, and additional fines of £2,000 per day after the conviction for every day of non-compliance.

Steel companies are expected to be hit hard by the legislation, although British Steel believes it already meets the commitments, citing its clean-up of the former Ravenscraig works in Motherwell, Scotland, as an example.

Ravenscraig covers over 400ha, and in the past was extensively mined for coal. The steel works were there for 35 years, closing in 1992. `We’re only just finishing the clean-up process which up until now has cost £25m,’ says a spokesman.

As well as proving costly, the tough new line on contaminated land could lead to protracted legal battles. A similar scheme called Superfund, launched in the US in 1980, led to claims that contaminated land which was previously unknown to be polluted was damaging health. The result was damages claims running into millions of dollars.

Property owners also sued industrial companies which they held responsible when the value of their land plummeted.

The UK Government claims that steps to avoid these situations have been taken and mistakes made in the US will not be repeated here.

The real gainers from the new law – apart from the environment, of course – will be environmental engineers, who are in line to receive a big windfall.

They will also get more opportunities to try out new technology such as bio-remediation – the use of living organisms to digest organic soil contaminants.

`Our members are keen on this legislation,’ says Hyman, whose Environmental Industries Commission represents such companies. `We believe this is a positive move and will help our industry to develop internationally.’

Copyright: Centaur Communications Limited