In an Expert Focus article for Waterbriefing, Dr Evan Dollar, MWH Technical Director and expert in water management and Rachel Dewhurst , MWH Technical Discipline lead in Water Resources discuss the potential opportunities post-Brexit for stakeholders, particularly the water companies to challenge legislation in the context of “good science” on a local and national scale.

Dr Evan Dollar and Rachel Dewhurst: Numerous commentators have now published their views on the implications of Brexit for UK in terms of environmental law and policy, and by implication, future investment planning (at least in part) in the UK water sector. 

The views, as would be expected, reflect the interests of the commentators / organizations, and reflect a range of views from the return to being the ‘dirty man of Europe’ to a more positive stance of taking back control of our environment.  What is clear is that environmental standards imposed mainly through EU legislation have strengthened the UK’s environment quality, and have encouraged the drive towards a circular economy.  Some, however, argue that this would have happened regardless of EU legislation, as environmental issues are now higher on the political agenda, and will remain so as population increases and resources become more limited.

EU Directives have been transposed into UK legislation, and have directly impacted our clients’ business, for example, the UWWTD, WFD, BWD and Eels Directive. The UK has also absorbed and adopted EU regulations within our regulatory regimes for dealing with permitting, enforcement and penalties.  To complicate the situation further, each member country of the UK has adopted slightly different environmental legislation to reflect the aspirations of the policy makers in London, Cardiff, Edinburgh and Belfast.

 Leaving the EU will take time, but at the end of the process, EU Directives will no longer apply in the UK, however environmental laws which are derived from international treaties and those parts of the EU Directives enshrined in UK Legislation, if not repealed, will continue to apply.

Clear that a review of environmental legislation will be required

 It is clear that a review of environmental legislation will now be required to decide what should continue to apply, a risk given the variation that already exists between members of the UK and the potential for uncertainty (e.g. coverage, gaps, uncertainty, status of EU case law). EU Directives have been subject to significant periods of development and negotiation between parties, generally isolated from political influence, prior to their transposition into UK law, and as such can represent best practice for a particular environmental issue. 

That is not to say that all EU Directives are based on good science or represent a course of action that the UK, and industries operating in the UK, wish to take.  A few bad eggs do not spoil a whole basket and the wholesale demolition of the environmental legislative regime in a short period of time is not to be encouraged, particularly as it is likely that the UK will want to retain access to EU markets (EEA and / or EFTA). 

In such a case, the UK will still need to meet key standards of EU legislation (e.g. environment) and hence will be constrained by EU environmental law. Even if the UK is unable to access EU markets through EEA / EFTA, it is still likely that it will need to meet environmental product and supply chain standards.

So what is the potential way forward?

The regulatory authorities (EA, NRW, and SEPA) have stated it will be business as usual for the time being with the likely pathway being status quo at first, followed by adjusted legal standards, and certainly this could be maintained at least until the next general election.  The outcome after that is uncertain as the UK legislative process is more susceptible to political cycles than the EU legislative process and is dependent upon the political will of the governing party. 

Outcomes could include lower standards for environmental protection - the concern of the environmental and NGO sectors. Others argue that this would allow the UK the freedom to make more fit-for-purpose standards.  A perverse outcome might be that the UK may need to comply with EU legislation (via access to EU markets) without having the ability to influence it; a fact that should be considered by those managing Brexit.

Need to plan for a change of legislative regime

However with the start of the planning cycle for the next AMP period and the financial pressures to deliver value for money for customers within the current investment period, the need to discuss and implement a plan for the change of legislative regime, if and when it arrives, needs to be put into place.

We are at the start of a long process of developing ‘new’ rules and regulations.  There is no certainty as to how this will develop, as it depends on the exit deal.  Certainly we do not wish, as Water and Environment Professionals, for DEFRA to be instructed to back away from their stated “long term plan which will ensure Britain has one of the best environments anywhere”.

Brexit: opportunities to challenge legislation on a local and national scale

Brexit does, however, present opportunities to challenge the regulatory status of various items of legislation in the context of “good science” on a local and national scale; a challenge that needs to be taken up by all stakeholders, but particularly by the water companies who act as custodians of water resources within society. 

Key considerations are centred on the need to fix or lower customer costs, while providing a good level of service, meeting the need for water to be available into the future and at times of peak demand.  Customers are not always willing to pay for a perfect river environment, although are in no doubt distressed when there are dead fish in a dried up bed.  Maximising socio-economic-environmental benefits is impossible but what is possible is the development of a set of solutions that produce some benefits across all sectors (Jowitt et al. 2012).

So in the changing world of Brexit, where incomes have the potential to become limited, significant changes could be required to allow the best affordable technology to produce a catchment level acceptable outcome.  One screening number, one ecological indicator does not necessarily produce the outcome expected across a whole water body. 

Better science and improved monitoring can demonstrate in a cost effective manner that the capital improvements required within legislation do produce the expected outcome. This may also demonstrate that the ecosystem services within the receiving waters are more than sufficient to reduce the need for investment.  Stakeholders may not be willing to invest in their natural infrastructure to meet a chemical target that makes little difference to the quality of their amenity and water supply.

What cannot be lost however in the interesting times that we live in, is that the natural infrastructure of the UK; its soils, its rivers, its ecology and its aquifers, are subject to the increasing pressures of climate change and population growth.  Some EU Directives have been instrumental in trying to reduce the impact of such pressures by requiring integrated and holistic planning on the catchment scale.  Flood control, drainage management, resource efficiency, reuse and water resources cannot exist in an isolated environment within anthropogenic boundaries but required integrated approaches.

Deregulation and customer demand will drive step change with or without Brexit

The UK will still require a level of resilience that means that customers have security of water supply under all but the most extreme circumstances.  Ensuring that the nexus between water-energy-food is not skewed in any particular direction and that the rivers still flow to the sea. 

The document ‘The Water and Wastewater Sectors – the long view’, proposes that even without Brexit a step change in the UK water industry will occur, with deregulation and customer demand driving a range of scenarios.  However, in the face of Brexit further opportunity presents itself.  It only remains to be seen if a balance can be struck between removing the legislative drivers derived from the EU that bring no benefit to the UK’s environment and industry and the need for the UK to adopt a responsible position on the environment, sustainability and resilience.

Click here to download PWC and Yorkshire Water, The Water and Wastewater Sectors – the long view May 2016.