Environmental Audit Committee
Oral evidence: Assessment of EU/UK environmental policy, HC 537
Wednesday 13 January 2016
Ordered by the House of Commons to be published on 13 January 2016.
Written evidence from witnesses:
Members present: Huw Irranca-Davies (Chair), Peter Aldous, Mary Creagh, Geraint Davies, Margaret Greenwood, Carolyn Harris, Peter Heaton-Jones, Mr Peter Lilley, Caroline Lucas, John McNally.
Questions 257-323
Witnesses: Daniel Calleja Crespo, Director General for the Environment, European Commission, Astrid Schomaker, Director Strategy, Directorate General Environment, European Commission, and Sybille Grohs, Governance & Legal Issues, Directorate General Environment, European Commission, gave evidence.
Q257 Chair: Welcome to this afternoon’s session of the Environmental Audit Committee’s inquiry into the assessment of EU/UK Environmental policy. You are all very welcome, particularly our witnesses here today. You are very welcome, Mr Crespo, Director General for the Environment in the EU Commission. Thank you for taking the time to be with us. Would you like to say a few words of introduction yourself and also your colleagues?
Daniel Calleja Crespo: Good afternoon, Mr Chairman. Good afternoon, honourable members of the Committee. I would like to say it is a great honour to take part in your meeting, to participate today to provide information, to answer your questions in relation to the European Union’s environmental policy.
I understand you have been conducting a very extensive and thorough analysis, and we are very happy to provide as much information today and in writing; I have already submitted some observations, but should there be any additional issues we are very happy to provide them.
I am appearing today on behalf of Commissioner Vella, who is the commissioner in charge of environmental policy. Today is the Commission meeting in Brussels. They have some pressing issues on the agenda and this is why I have been asked to participate on his behalf.
I am accompanied by two great experts from the European Commission. I am very lucky to have such brilliant colleagues with me. Astrid Schomaker is the director in charge of strategy and inter-institutional relations in DG Environment. She has very broad experience in environmental and international matters. On my left side, it is not ideological, is Sybille Grohs, who is in charge of enforcement issues. She has been following UK matters in particular, and she has a lot of expertise and detail on this.
I have to seek your indulgence because I have been the Director General of Environment since September, so I am quickly becoming an expert but in some of these issues, with your agreement, Mr Chairman and honourable Members, I would defer to my colleagues to provide additional information.
Chair: Thank you very much, and thank you for those words of introduction. You are all very welcome. I am sure that between yourself and your two colleagues you will be able to answer our questions. The inquiry is looking not only at what is done at an EU level and what is done at a UK level, but whether things can be done differently as well; whether things can be done in a different way. What needs to be done at a pan-European level and what does not need to be done at that level? There are a wide variety of views, even on the Committee, on that as well. It should be a good, interesting session, but be as frank with us as you possibly can. With that I am going to hand over to my colleague, Peter Lilley, to open the session.
Q258 Mr Lilley: Following on from your points, welcome to our guests and we express our gratitude to them for coming. Are there any areas of EU competence in the environmental field where there is not a cross-border element in the environmental issue being directed, and should there be?
Daniel Calleja Crespo: Thank you very much, honourable Member, for your question. To answer it in the proper context, I would like to discuss how environmental policy originally developed in the European Union. It started in 1972 following a call from the heads of state and Government to address it through the internal market angle. We did not have a legal basis at the time to develop environmental policy, but there was a concern that environmental standards could play a role and they could be a barrier to trade within the internal market. A UK factory would suffer problems if there were differences in the environmental standards in products. So there was a very strong transboundary internal market element and a very strong focus on product.
Later on these environmental issues evolved and we had a legal basis for the first time in the treaty, the Single European Act, and we now have a provision, which is Article 191. This provision specifically lays down how the EU can intervene in this matter. There is a conferred competence on the EU in order to meet four objectives, which I would like to highlight for the Committee: first, to preserve, to improve and to protect the quality of the environment, secondly, to protect human health, thirdly, to make more rational use of natural resources, and, fourthly, to promote measures at an international level with global environmental issues, in particular climate change. This is our remit. What has this meant for EU environmental policy? It means that it has evolved from an internal market, product-focused policy to a more anthropogenic approach. Environmental policy is also seeking to improve the quality of life of our citizens. Environmental policy in the EU deals with water, with air quality, with chemicals and with industrial emissions.
To reply precisely to your question: I would say it is not only when there is a transboundary element that it plays a role, although primarily this is the case because the environment is global. There are provisions to meet concerns about the quality of life of citizens: for example, you have an industrial emissions plant and there are a certain number of emissions. Air quality in cities is another issue. There is not a particular transboundary element in a city but it has been considered. It was agreed by member states in the treaty that, in these areas, the Commission could table proposals and they would be submitted to the European Parliament. They would be submitted to the Council under the co-decision procedure for a decision.
Environmental policy is a shared competence; it is a competence that we share with member states. It is not an exclusive competence like competition or trade. The name of the game is to work together with member states to meet the four objectives I mentioned: quality of life, improved environmental conditions, the international dimension of climate change, and the use of natural resources. It is also based on some principles that we have to respect, which are in the treaty, and that often gives rise to lots of discussions. As a precautionary principle, preventive action is preferred. In my country we say, “es mejor prevenir que curar”, “It is better to prevent than to cure”, to avoid having to step in later. It is based on the belief that damage should be rectified at source level and it relies very strongly on “the polluter pays” principle.
There is another unique feature, which does not exist in other policies. What we do in this area is agreed by the member states. We are now on our seventh European Union Environmental Action Plan, which takes us to 2020. It highlights the priorities and areas of work, and that is why it is unique. This has been adopted as legislation through the co-decision procedure, so we have the full agreement of the member states. We have the full agreement of the European Parliament. There are no surprises in this area because we have to develop the policies that are detailed in this environmental action plan.
The final point: the instruments we use in this policy are mainly directives. Why directives? That is because in our work we also have to take into account the principles of subsidiarity and proportionality. The best way to meet these objectives is to take into account, and to allow member states to take into account, the different national situations. For example, problems with water in the south of Spain or in Finland cannot be dealt with in the same way. The directives allow for member states to have plenty of margin for manoeuvre when developing their framework and their management groups.
Q259 Mr Lilley: Thank you very much. You have mentioned the principles of subsidiarity. As I understand it, if things can be done as well as or better than at a subnational level, they should be done at a national level. It is not obvious to me why decisions about handling floods—which is a big issue at the moment in the UK—should be determined by EU directives. They may be very wise directives, but it does not make too much difference to any other member country whether we handle our floods in Cumbria or Somerset well or badly.
Daniel Calleja Crespo: It is true that we have the floods directive. We have a water framework directive and we have a certain number of provisions. The logic behind European action in this area is to put a framework under which member states take the measures that they consider are most appropriate to meet these problems. You can have a case where floods have transboundary effects and you can say in this case it is clearly—
Mr Lilley: Not in Great Britain.
Daniel Calleja Crespo: Sorry, excuse my ignorance. Apart from this transboundary effect, you also have—the issue I was referring to—quality of life. There are provisions in the treaty saying it is important that we have healthy ecosystems in Europe and that countries are aware and manage these issues in accordance with, “This is what member states decided. This is the origin of these provisions”.
I have to say that, as far as I am informed, most member states find it useful to get together to deal with these issues, to exchange best practices, and there is plenty of margin for manoeuvre. The directive is not set in a rigid straightjacket but these directives are more process-orientated directives. It is a sound principle that it is important for member states to have management plans in place. It is important for member states, when a catastrophe happens and there is rainfall that you cannot control, that they have sound management plans in place. It is also in line with the precautionary principle and in line with the principle of prevention is better than cure.
In no way do these directives pre-empt the right of member states to take the national measures that they feel appropriate in order to manage the issues. What is being sold is a common framework saying, “To ensure that within the European Union we are doing this in accordance with the framework”, which is useful and can be used by the different member states adapting to different situations.
Q260 Mr Lilley: You also mentioned the principle of proportionality. I briefly saw—so far as my electronic apparatus allowed me to read it, which was difficult as the engineers did not come until 9 o’clock last night—that there was a case in the UK where the Government wanted to build some development in Sheffield. It was taken to the High Court, which ruled that under the EU directive cost could not be taken into account. That seemed to me not to allow for proportionality. You are looking at me as if I have read something that nobody else has read.
Chair: Sky News, was it?
Mr Lilley: No, it was in the papers. There was definitely a High Court ruling that concluded that economic factors could not be taken into account in this particular EU policy and, therefore, we were stuffed.
Chair: Peter, while you are looking for that, to give you a moment of time, do you mind if I bring Geraint in for a short supplementary?
Q261 Geraint Davies: You have explained Article 191 and the relationship between environmental protection and the single market and how there is some sort of balance there now. I want to take you into a slightly different area. People have been concerned about the EU-US free trade agreement, TTIP, and whether the provisions for investors to fine countries for loss of profit through changes in, for example, environmental law to implement the Paris agreement from COP21. At the moment, unless they are changed, it will mean that we could be subjected to fines in our bid to protect the environment. I wonder what your take is on that.
Daniel Calleja Crespo: Thank you very much, honourable Member, for this question. This treaty is very important. It is a great opportunity for Europe. It is one of the 10 priorities of President Juncker’s Commission, together with the digital single market, with the Energy Union, with the investment plan; one of the 10 priorities is this very important transatlantic negotiation with the United States. It is important because we are the two largest trading blocs in the world and we would create the biggest free trade area. These negotiations are about much more than traditional access to markets. They are about tariffs; we are looking at public procurement, we are looking at services, and we are looking at regulatory corporations.
However, I want to make very clear that in this agreement we are not going to weaken European standards in any way. This is not about reducing our standards and this is not about reducing or restricting our ability to legislate. It is very important to mention this. I know there are concerns on these issues but what is important is to look at it. If the United States or the European Union can agree on provisions that can benefit as a means, then that can facilitate the flow that can reduce tariffs, and that can have a benefit for consumers.
In relation to the environmental issues and the positives, concerns have been about what is called technically the ISDS provisions. I think your question refers to this. The Commission consulted very broadly on this issue. Some American investor could invest in the EU and then, because of a change of legislation, it could make an argument with a link to the environment and the ETS. You might say, “This is a kind of foreign office appropriation. There could be a risk that this would end up reducing our standards, including environmental standards”. There are many free trade agreements that have these kinds of provisions, which have been negotiated at national level.
Q262 Geraint Davies: Just briefly, you will be aware that TransCanada is suing the American Government for $15 billion for saying that they will not continue with plans for the pipeline for sand oil because of the impact on climate change. The concern in TTIP is that the investment chapter allows companies to use arbitration panels, which are commercial panels, meeting in secret to fine Governments. That is one of the many examples; it is a big example. On the other side of the coin, there are no environmental courts with teeth that can fine corporations in this way. Unless those provisions are changed there could be great concern. Maybe you could argue that the current standards might be protected but if we need to do future things to protect ourselves, for instance, against the health and environmental impacts of fracking, then we will be sued and taken to the cleaners.
Daniel Calleja Crespo: In order to overcome these concerns two things have been proposed by the Commission but negotiations are ongoing. I have negotiated with the United States Open Skies agreement and, as a negotiator, nothing is agreed until everything is agreed, but at this stage the European Union is defending two very important things to avoid this risk. First of all, nothing in the agreement should restrict the ability to legislate on its side, which is the first guarantee. You could not use this as a pretext to say, “Because of this provision you are prevented from legislating or from deciding the standards at European level”.
Secondly, the European Union and Commissioner Malmström—who is the commissioner in charge of this file—have put forward provisions to radically reform the arbitration mechanism. As originally envisaged, the mechanism could be unclear in a court with professional judges, with doubts about due process, independence and transparency. That would bring problems of credibility, and we want to avoid the kind of risks that you have mentioned. It is a sensitive matter and it is under discussion. I would also like to say that, when you are discussing these kinds of agreements, it is useful to have mechanisms with guarantees to avoid weakening standards or restricting them and to find solutions to investment issues, because there are many investment issues not linked to this that require settlement.
It is useful to have operational tools, but we must be able to guarantee that our capacity to legislate is not in any way restricted or weakened and, at the same time, we need a transparent system of dispute settlement, not with arbiters meeting obscurely but with courts, a system of guarantees, due process and transparency. That is limited by the provisions of the agreement—if the agreement says that nothing will restrict the ability on one side to legislate it is difficult for the court to go in that direction.
Negotiations are ongoing; this is an issue that is discussed by the masses. It is not in my area of competence but I can share with you the information I have. I can also come back with additional elements.
Q263 Chair: And nothing is decided until everything is decided?
Daniel Calleja Crespo: Nothing is agreed.
Chair: Hopefully, Mr Davies’s comments have been helpful to you in your discussions as well.
Q264 Mr Lilley: Apparently, back in 1993, the British Government decided to create an SPA, whatever that is—
Chair: Special protected area.
Mr Lilley: —A special protected area in Medway, but decided to exclude a neighbouring area of mudflats because that had already been granted planning permission to build a Sheerness port. The Royal Society for the Protection of Birds brought a legal case, a judicial review, saying that it was allowing economic considerations to limit its decision and that was upheld by the House of Lords, so we were not allowed to build a port and had to designate it all as an SPA. It says here—this is the guidance from the House of Commons library, I am sorry I was not very clear—that the EU Commission on interpreting the habitats and birds directive now incorporates those legal judgments and that has resulted in some stringent tests for compliance. One would obviously place a high value on habitats and birds and things but to place an infinite value does not seem proportionate.
Daniel Calleja Crespo: Let me tell you the logic of the birds and habitats directive, and then on the specifics of this case I am going to turn to Mrs Grohs. She is a living encyclopaedia. She will tell you the reasoning.
The birds and habitats directives are very important pieces of legislation to protect biodiversity, to protect species, and the UK is an important proponent of this approach: you raised concerns about on bird protection and you are one of the countries who have been leading in this area. Countries have the power to designate natural sites. The European Union has one of the most important networks in the world; no region in the world has done an exercise like Natura 2000. Many concerns are interconnected. We have land; you have marine sites; 18% of the territory of the European Union is covered. The UK has decided to notify— in accordance with the principle of subsidiarity, and in accordance with its national decision making—less than other countries. That is your right. If you decide to notify more this is also your right. In Europe it is 18%; I think the average for the UK is 8.5%.
When you have a protected site there are restrictions because if there are no restrictions there will be no protection for birds or habitats. Does this mean that everything is forbidden? No. We have two key provisions, Article 6(3) and Article 6(4). Before deciding any kind of use, you have to conduct some assessment so you can to evaluate what the impact will be, and there could be measures to protect the species on the site.
Article 6(4) deals with overriding public interest. Even if there are problems with the site, if there are overriding public economic interests you can still proceed.
Mr Lilley: That was not the view of the—
Daniel Calleja Crespo: I am telling you the EU law.
Q265 Mr Lilley: Yes, but I am telling you what our Supreme Court says.
Daniel Calleja Crespo: Yes, but my colleague will comment on this. On the EU law, as it stands—I cannot comment on national jurisdictions, I do not know the judgment—it is necessary, if you want to go further, to request an opinion from the Commission. There are certain limitations. There is an element of proportionality, there is an element of flexibility, there is an element of taking into account national circumstances, but this has to be balanced against the main objective of having some protection of species and the habitats because that is the main thing.
On a particular case, Mrs Grohs is going to tell you why the national courts ruled in this way.
Q266 Chair: Over to you Mrs Grohs.
Sybille Grohs: It is a very famous case—it is the Lappel Bank case—and it was very controversial at the time. You are supposed to designate the most valuable areas for bird protection under the wild birds directive, which dates from 1979, and in this case the most valuable areas were not protected. There was a dispute with the RSPB, which took the matter to the national courts. It wanted an injunction to say that, “While this court proceeding is going on we want this valuable bird protection area added to the protected site”. It could not ask for an injunction, however, as it was too expensive, so the whole court process trundled on. Eventually it was referred to the European Court, which responded and it went back to the national court, which made a decision. In the meantime this area—which was disputed, and which was recognised through the court process as being very valuable and which should have been designated as part of the nature and bird site—had been turned into a car park.
Q267 Mr Lilley: Presumably, because it had been given planning permission to build a port so—
Sybille Grohs: But, in terms of EU law, it was given planning permission incorrectly because the process that is supposed to be followed is that the most valuable areas are protected as sites. Once you have protected them and they are in the site protection area, you have the debate. You do not have the debate before you designate. Once it is designated you can have a debate. In Europe, port development is an issue. We have many problems with ports because they are usually in estuaries, which are valuable areas, particularly for migratory birds.
Tensions exist—it is something we have known in the Commission and DG Environment for a long time. We have a special guidance document to assist port authorities on implementing the legislation. The argument is quite technical and legal, I agree, but you designate first and you designate only on a nature interest, and then you have the argument. Is a car park an overriding public interest to flatten the area? It is rather a process argument but a mistake was made—and the mistake was agreed at the EU level and also in the UK national courts. You should designated first on pure science and afterwards have the argument: is this car park an overriding public interest on the basis of which you need to flatten the bird site?
Q268 Mr Lilley: That is interesting. We will have to set the House of Commons Library right in that case because they give a different interpretation of this court case, which says that economic considerations could not be taken into account. Are you saying they could have been afterwards, in which case why wouldn’t the Government just do it that way round?
Sybille Grohs: Because by that time the site was flattened, so it was a theoretical discussion then.
Daniel Calleja Crespo: What is important is that the logic of the rule is that countries are free to decide which areas they designate or not. Once they decide that it is a protected area it is still possible to do certain things, but there are limitations. There is a balance and there is a process as regards a particular case. Of course, we have lots of cases. I can tell you in these four months I have had much experience of this.
Chair: You have us chatting through various examples as well. We may return to that, but we will move on for a moment.
Q269 Caroline Lucas: I want to continue for a second on the issue of the tension between the environmental objectives and the shorter-term economic ones, and pick up where Geraint Davies left off. When it comes to some of those tensions between, for example, investment agreements and the environment, sometimes it is quite hard to say what the absolute impact of the investment agreement is, because the impact has a chilling effect. You do not know what other legislation might have been brought forward were it not for the fear of it being struck down by a trade or investment agreement.
I want to ask you whether you feel that the balance between environment, economy and trade is in the right place as far as DG Environment is concerned. We have received some written evidence, for example, that would say that the 2014 Circular Economy Package is shortly to be re-tabled with a much more explicit focus on jobs and growth, the argument being that is because of economic lobbying. Another piece of evidence was that the regulations restricting the use of endocrine disrupting chemicals and pesticides were delayed due to reported pressures from TTIP, and, finally, that the fuel quality directive was watered down due to pressure from the US and Canada so as not to discriminate against tar sands. I wonder if those examples ring true with you and whether you think there is a problem sometimes about exactly where that balance is struck between the different interests.
Daniel Calleja Crespo: Thank you very much, honourable Member. I think this is a very, very pertinent question, and in our daily work we always face difficult choices and tensions. Some people say there should be a balance between competitiveness and sustainability—how you grade environmental considerations in relation to environmental competitiveness, or to costs for business. I have very strong views on this point, and I have had experience in industry, internal markets and in aviation, in a previous life in the Commission. I believe very strongly that there is no contradiction between competitiveness and sustainability, that this should not be a question of balance, and the more competitive businesses in Europe are those who are the most sustainable.
Q270 Caroline Lucas: That might be true in principle and in theory, but when it comes to lobbying‑‑I was a member of the European Parliament, and I can promise you I was lobbied from morning until night by industries trying to reduce environmental regulation because they believed it was a blockage to competition. My question to you is whether, in practice, you think that is happening.
Daniel Calleja Crespo: But this is normal, because businesses tend to go on the short term, to lobby and to say—
Q271 Caroline Lucas: It is normal for businesses to lobby in that way, but where is the actual decision made? If that then means that some of the legislation coming forward is watered down, then that is not normal. That is problematic.
Daniel Calleja Crespo: I think my answer would be that, first, it is very important to have a better regulation process. We can comment, if you want, in more detail on what we are doing in this area. Secondly, better regulation is important because it is important to consult; it is important, before you come up with a proposal, to understand what the issues and concerns are. Sometimes it is not business that is against these rules, because perhaps we have to be sure that what we are proposing is the best proposal in order to accommodate environmental, social and economic concerns. Secondly, in my experience, when we are dealing with the environment, we are also looking at long-term issues. Why? It is because you are concerned about the planet and sometimes proposals that we are making have a short-term impact on costs for the industry. What I very strongly believe is that you can only be competitive if you are sustainable in the long term.
Q272 Caroline Lucas: Is the balance in the right place? That is the question I am asking you.
Daniel Calleja Crespo: In general, but it depends on each specific piece of legislation.
Q273 Caroline Lucas: You do not think there is any systemic problem with the balance being drawn between economy and environment, to the extent that they are sometimes perceived to be in contradiction with one another?
Daniel Calleja Crespo: This is something that you have to decide on a case-by-case basis. Every day in the decisions of the European Union you have decisions in one direction or another.
Q274 Caroline Lucas: You do not see any trends? Again, because one of the points in the written evidence was that some people are concerned that there is a greater trend now towards maximising the short-term economic objective over the long-term environmental one. Would you agree, yes or no?
Daniel Calleja Crespo: I would not agree.
Q275 Caroline Lucas: Okay. I have a couple more questions if I go fast. Are there policy areas in which the Commission feels the current balance of competencies does not work well? In other words, the competencies between the member states and the Commission? You explained the environment being a shared competence. Are there any places where you feel—
Daniel Calleja Crespo: But the question was: it does not work well? I think it works well.
Q276 Caroline Lucas: It is an open question. Does it work well?
Daniel Calleja Crespo: I have to be careful with my answers. I think the concept of shared competence applies in transport, applies in energy and applies in most of the policies, and I think it is a very reasonable way forward, because the areas where the Commission has exclusive competence in the end are limited. It is competition, trade, customs, fisheries. For the rest the name of the game is co-operation with member states; it is working with member states and finding solutions. There are areas where member states are legislating‑‑
Q277 Caroline Lucas: Maybe if I can nail this down, because your written evidence says that national Parliaments can formally express reservations where a proposal would be better dealt with at national level. Can you tell us how many times that has happened in the environmental sphere since that procedure was introduced?
Daniel Calleja Crespo: Here the Director General turns to the experts. Do we have this? I am sure we can provide this information.
Q278 Caroline Lucas: Could you find out? If you do not know off the top of your head could you find that out?
Daniel Calleja Crespo: We have what we call the yellow card procedure. I think this is used, but referring in particular to the environment, do we have this information? We can provide it for you.
Caroline Lucas: Could you find it? Thank you.
Astrid Schomaker: We can find it. I do not think it has happened very often, because it is a fairly new provision.
Q279 Caroline Lucas: We would be interested to know if it has been used and, in particular, which countries tend to provoke it most often?
Daniel Calleja Crespo: I know we have a special procedure, but there have to be a certain number of national Parliaments that go in the same direction. I know it has been used and we get notifications. I am trying to remember some cases I have encountered. We can provide you with this information.
Q280 Caroline Lucas: Can a single national Government express reservation successfully, or do a certain number, as you mentioned, have to?
Daniel Calleja Crespo: In the environmental area, in the treaty, there are some cases where you require unanimity, where it is qualified; of course, member states can always express reservations. They can vote against something, but there are some provisions in the treaty where unanimity is required for the environment. If a member state says “No”, the legislation cannot be passed. In qualified majority you need a blocking minority. At the latest Environment Council—and it was a public deliberation—we discussed air quality. We were going for improvement, because we have 400,000 premature deaths in Europe, and we had some parties who were not in agreement. We were not yet at the final vote at that stage of the procedure, but it would seem sufficient to continue the discussions.
Chair: Thank you, Caroline, and thank you for your offer to write to us. It would be good if you could.
Daniel Calleja Crespo: Yes, I think it is very important and sorry, I don’t know the answer.
Q281 Peter Heaton-Jones: I am sorry I had to step outside for a time, and I am sure you will stop me if this has been covered in my absence. Director General, first of all, thank you, I am finding it really very interesting. I want to discuss the influence that the UK has on EU environmental policy. Not that it is a competition, but let’s imagine it is: if there was a league table of member states, whereabouts would the UK come in terms of our influence on EU environmental policy? Would we be somewhere near the top, or would we be in the relegation zone?
Daniel Calleja Crespo: My personal opinion is that you would be very high, near the top, and I will explain why. First, the UK has been one of the main proponents in key areas of European legislation. If you think about climate change, if you think about ETS—the emissions trading scheme—and concerns in this country about birds, habitats, nature, those issues have been successfully raised with the European Union. In areas like industrial emissions, we have followed the approach proposed by the UK—the UK has first-class diplomacy. This is something I do not have to explain. The outreach that the European Union has attained in international negotiations is due partly to the efforts of the UK and thanks to the skills, pragmatic approach, and priority that the UK has given to this file.
The UK has a very effective way of working in Brussels. The UK representative is very strong. I think UK MEPs play a very important role. I am speaking of some of your former MEPs, and you know this very well. I would say that the position of the UK ranks very high. When I am in a meeting of member states in a committee and I see that the representative of the UK is very alert, I know something important is happening.
Q282 Peter Heaton-Jones: So when they are sitting back relaxed in the chair all is well in the world?
Daniel Calleja Crespo: Yes, he is reading the newspaper. That indicates it is not important.
Peter Heaton-Jones: Which newspaper?
Daniel Calleja Crespo: I would also like to say, on a more serious note, we have benefited a lot from this pragmatic approach. We can share with you statistics and tables. In terms of compliance and respect for EU law, you fight very hard if you do not agree but, at the end of the day, once you agree, you comply. We can come back to discuss the rate of compliance, but overall, in the ranking of the 28 member states, that gives you credibility in the discussions. This is not the case with all the member states, but I am not going to name them here.
Q283 Peter Heaton-Jones: Bearing in mind the situation that we are in now with a referendum on our future relationship with the EU on the doorstep—which I do not expect you to comment on either way—how do you think that influence, which you have just described very effectively, would change if the outcome of the referendum were that we were no longer members of the EU? Clearly we would not have that direct relationship, but in those circumstances do you think the UK would retain any sort of influence over EU environmental policy?
Daniel Calleja Crespo: You echoed what I was going to say. I cannot comment on a decision that will have to be taken by the UK people. I think at the end of the day the key word is “influence”. Europe has more influence with the UK for the reasons I mentioned. As for as the influence of the UK in this hypothesis, I cannot comment because it would depend very much on the relationship that you have. There are different models for environmental policies, but the important thing would be to preserve influence in shaping the policies. I can comment on the following example: we have a case with countries that are not part but which are following the rules. They have very little influence on the rules, yet they have to follow them. But these are dangerous waters and I do not want in any way to prejudge a discussion that belongs to the British people alone.
Q284 Margaret Greenwood: What are the major advantages and disadvantages the EU faces as an international negotiator to individual member states?
Daniel Calleja Crespo: The European Union has a very strong reputation, particularly in the environment, because we started before other countries, because of our economic development, and because of the attachment of citizens to the environment. I am very fortunate to be Director General in this area, because 95% of Europeans believe that environmental policy and environmental issues are some of the most important issues that affect their lives. The highest support for EU policies in citizens across Europe, including the UK, is on environmental issues, so it was natural that Europe took leadership and responsibility. It is very difficult in some cases because, when you start and you lead, you are not followed and you are criticised. I have had very difficult situations myself in aviation negotiations, defending the environment and the emissions trading system, and the rest of the world was not ready to follow.
The advantages of this leadership at the end of the day are: first, that you are making the world move towards a more sustainable framework. The environment is global and we need global solutions. Secondly, member states have more influence through the EU because you cannot deal with these challenges at a national level. Thirdly—and this is very important and Ms Lucas was referring to this—it also brings advantages to our competence because having global environmental standards also means more opportunities. It means more markets. What has happened in COP21 with the first ever universal agreement for climate change has implications for our businesses. The promotion of renewables, the promotion of the green economy, and the promotion of new technologies with global standards make all the difference. The fact that we have the first-mover advantage and that we can show leadership in this area is a very important element.
There are many advantages, but the difficulty is that sometimes these advantages are not seen immediately and the immediate perception is, “This is yet an additional cost. This is an additional burden”. On this point, I am so happy that I have Astrid with me because she has unbelievable experience in international negotiations, and she has been representing the European Union. I would like you, with your agreement, to listen to her comments.
Astrid Schomaker: I do not have much to add but maybe to comment on the perceived disadvantages, because you asked about those. I think what is perceived as a disadvantage sometimes is the speed, or lack thereof, of EU decision making to arrive at an international position. That has to be balanced against the fact that once we have that position, as Mr Crespo was saying, we speak with the force of 500 million citizens, based on an EU system that has demonstrated that what we ask other parties to do has worked domestically for the EU market. So I think that balance is a positive balance.
The second point I would make as to why the perception is wrong is, yes, it takes us time to arrive at an EU position, but that is because, in order to have an EU position—the 28 member states’ individual positions—we see what the arguments are and we find answers to all the arguments that we subsequently hear from third countries. Once we go with our position into a negotiation there are very few surprises. We know what the concerns are and we have our answers ready, because we tested them in our internal decision-making process. I think that in the end the perceived weakness has turned into a strength.
There are two more advantages, looking at the whole process of international negotiation. Having looked at the negotiation phase per se, to come to a negotiation you need solid evidence. You need a scientific basis. The EU science base and our knowledge are often led by the UK. If we look at ozone-depleting substances, for example, the science came from the UK. You demonstrated that there was a hole in the ozone above the Arctic. That then led to a realisation that something needed to be done globally. US negotiating power managed to reach a multi-national environmental agreement, which was exemplary and very, very successful.
The phase after negotiations is important. More and more, there is an issue with compliance. We have an issue of implementation within the EU, and there are international agreements to which countries sign up to and do not comply. What do you do? You need to be strong in order to take a third party to task, if that is the word. Again, it will always be easier for the EU to go to a compliance body, if there is one in the agreement, to say, “This does not work”, than for an individual country to do so.
Daniel Calleja Crespo: With your permission, Mr Chairman, could I go very quickly through two concrete examples I have experienced in the past four months? It is about the role of the European Union from an international perspective, which sometimes we do not realise. I was in China with experts, academics, and people from the World Bank, advising the Chinese Government, at their request, on reform. They have now come up with their 13th five-year plan, and they want to put in place a very serious reform of their environmental framework. You cannot grow sustainably at 8% every year without addressing sustainability issues.
They were looking at the way the European Union had established its system for 500 million people in 28 countries, and they asked us, “What are the key features of this system?” I said, “There are five things that are essential, including evidence-based decision-making.” Thanks to the European Environment Agency in Copenhagen, and the network of member states and the agencies, we have the most reliable data, which we are receiving on a daily basis, thanks to Copernicus, the global earth monitoring satellite system. We have evidence- based decision making, consultation mechanisms, enforcement and application, access to justice, which is important, and recognition of NGOs, which allow the system to have checks and balances. The Chinese were very seriously looking at each and every one of these issues and at shortcomings in their business reforms.
I will give you another example that came as a complete surprise. We were in bilateral negotiations with India, and the Indian Government said, “The topic that is most important for us is the water framework directive”. I told my colleagues, “How is it possible that India wants to discuss the EU water framework directive?” The reason is very simple: we are 28 member states and 500 million people. I think they are 29 states, more people than we are, more than double, but they have trans-boundary rivers, and constitutionally they do not have a national competence. They wanted to see how the EU had organised its system and how was it possible to have a framework established that afterwards allowed for water management plants. We have engaged with them, and we are now going to co-operate with European business in projects like cleaning up the Ganges and other rivers, and helping them to manage, with the experience of the Danube and the Rhine conventions, which are examples of international management.
So sometimes we underestimate the impact that the European Union has internationally, and it is our international partners who come to us to look at our experience, to identify and seek advice from some of the solutions that we have delivered over the past years.
Q285 Margaret Greenwood: A follow-on question: in other areas the EU has sometimes been criticised for adopting a lowest common denominator approach in order to ensure consensus. Would you say that this is the case or not in the environmental sphere?
Daniel Calleja Crespo: I do not think this would be right, because in the treaty we have a legal obligation to go for high environmental standards. Secondly, it is possible for member states, under certain conditions, to take higher additional measures, and there are examples of legislation. Water measures are an example of the systems that we have put in place, and what they guarantee is a race to the top. What we want to avoid is a race to the bottom. Finally, the experience shows that over the years, overall in the European Union, we have improved water quality, we have reduced waste, and we have improved many problems, including the situation with chemicals. So I think that the process shows that we have not gone into low-level environmental standards, but rather that the system goes in the sense of going for higher environmental standards for the benefit of our citizens.
Q286 Carolyn Harris: Can I first say that your enthusiasm and passion for your work reflects in your answers? It is completely pleasing. In the letter that David Cameron wrote to Donald Tusk, he set out the four areas that the UK were looking for in EU reform. To what extent do you think that will affect your work?
Daniel Calleja Crespo: I have to be careful, because I am the Director General for Environment, so I do not know this issue in detail, but I do not think any area concerns environmental policy. I think it is more about dealing with other areas of the EU, no?
Q287 Mary Creagh: Can I maybe clarify? One of the Prime Minister’s aims is about competition, which is massively material in terms of what you have said about treaty-base for why there is an environmental competence. We are interested to hear whether any of that high-level negotiation has filtered down and has come up in your Department. We are interested as British politicians.
Daniel Calleja Crespo: I am not aware that these negotiations have had an impact on our policies—at least they have not at my level. Maybe I am missing something.
Q288 Chair: Perhaps I can ask for another example then. You have put a lot of reliance on the principles of good decision making and good leadership within the European Union resting on its science and evidence base. What are the risks of our going separate way? Would we still be able to access, contribute to and co-ordinate with the European Union on that science and evidence base, both for our own good decision making, but also for our own unilateral approach, if we were to step away from the EU?
Daniel Calleja Crespo: In my experience in the European Commission and working with member states, we learn a lot from each other’s best practice in the framework of our discussions. When the Commission puts forward a proposal in the discussion, sometimes we realise that there are other ways of reaching the same objectives, or even better ways, on the basis of the experience that the member states bring to the table. Overall, this is an area where it is very important that information flows, that scientists work together. We have European space for research, and for the environment that is critical.
Q289 Chair: But if we were to step aside from the EU, would we still be a full participating partner? You would need our science base, I assume, as well. Would an arrangement simply be made that we continue in a different way to share and collaborate? Are there examples of the way you work as a directorate with other countries currently that are not full members of the EU to share science?
Daniel Calleja Crespo: In the area of science and research, we have a very important programme: Horizon 2020. It is not my department’s direct responsibility. I know that there are agreements that are negotiated with third countries in order to ensure, particularly if you are a member of the European Union, you are a part, and you are also contributing. If third countries want to participate, they have to negotiate an agreement and determine the modalities. Depending on status, that would require negotiation. I want to come back to your question, because cross-cutting, horizontal issues are important.
The United Kingdom has put a lot of emphasis—and this may be one of the four areas for reform—on better regulation. In the European Union and the European Commission, we are making a big effort these days to improve the quality of our regulation. This is not an agenda on deregulating, but about coming up with much better-quality proposals. There are a certain number of measures that show we are going in that direction, and the UK has been pushing very much in this direction.
First, before we even decide to launch an initiative there is a compulsory 12-week open consultation to find out everybody’s views. Secondly, there is a rigorous impact assessment of evidence-based decisions: what is going to be the impact and what are the different scenarios? Thirdly, is there a problem that has to be solved at EU level or can it be better solved at national level? Fourthly, for the first time there is a regulatory scrutiny board, previously the impact assessment, with external participation to have a credible input in evaluation and economic analysis.
What is also very important for current legislation is to do what we call a fitness check of existing legislation, to see if it remains fit for purpose, and whether we can improve it or not. We have examples where we have withdrawn measures. I am not saying this is a good example—there are different views—but we had a soils proposal that was making no progress. The Commission decided to withdraw 83 legal proposals, and the work programme of the Commission is now for 20 this year, which are linked to the 10 priorities.
All these measures create a culture of doing things better and improving the quality of our legislation, as well as looking at different forms of regulation. In some cases, the circular economy package, for example, you can go for economic incentives, you can go for voluntary standards, and you can go for exchange of best practice. We need to look at new things and to modernise the way we work when we decide on regulation. It remains important that we continue to regulate because there are issues that have to be addressed in the environment. We have to be satisfied that we are producing the best regulation that avoids some of the problems that might arise later.
When the Commission proposes something that is the beginning of the process. After scrutiny and analysis, we need to test what we have proposed with the member states. We need to go to the European Parliament and then the political choice has to be made. I think this part of the agenda relates to one of the four areas of reform: to have more efficient, competitive and better-quality European rules. There is a lot of good work being done in Brussels. It is a permanent challenge, but I think there is a big effort underway within the Commission in order to get things right.
Q290 Carolyn Harris: Is your department playing any role at all in the renegotiation?
Daniel Calleja Crespo: I do not think so. I should know, so the answer is no.
Chair: We thought you would know. We wanted you to know, so we will assume not.
Daniel Calleja Crespo: There is a special department within the Commission, Mr Jonathan Faull is leading.
Q291 Carolyn Harris: You are not working with Jonathan at all?
Daniel Calleja Crespo: I work very closely with him. I speak to him very often, asking his opinion and consulting him as director.
Q292 Chair: But there is no major impact, it seems, from the reform agenda with the Prime Minister that you are fundamentally engaged with. It is within other areas of the department. The reforms you were talking about are ones that are ongoing now?
Daniel Calleja Crespo: Yes, they are being dealt with by the Commission as a whole, all the departments. As for the UK and your Prime Minister, the proposals are dealt with at the level of the European Council, and there is a European Council in February that is going to address these issues.
Q293 John McNally: We skipped it a wee bit earlier—the possibility of us leaving the European Union—so I would like to lead you on to the legal aspect of this. What legal and practical issues surround the possible decision by the UK to leave the EU in relation to the environment?
Chair: We are not asking for a value judgment, don’t worry.
John McNally: I want to know the legal and practical issues that surround the possible decision. We are going to have a referendum.
Daniel Calleja Crespo: I cannot comment on the particular case. What I can share with you is some situations that in the European Union that illustrate differences. You have member states participating in the European Union in environmental policies. This gives the right to benefit from the programmes. The LIFE programme has contributed, and the UK has benefited over the past years from €500 million in projects and environmental innovation. Members take part in the decisions. Some countries that are quasi- members and then it depends on their status. Norway is part of the European economic area and participates in some areas of the environment because the EEA allows for these issues.
We have a meeting with the member states, and they participate in committee, but when we are going to vote the country is excused. They leave the room and we have the vote, then they come back. Sometimes the country says, “If we had been able to vote, we would have voted in favour—or against.” Then, depending on the arrangement, they are obliged to follow the rules, but there is a different situation for different cases. This is why I was referring to the issue of influence, which is the most important thing: influencing the decisions that are taken when you are a member.
John McNally: I think I am trying to get towards Article 50 of the Lisbon Treaty and the implications that would have on the UK as it exists at the moment. You mentioned in your opening remarks today you are from Spain. You quoted a Spanish saying that translated, as Teddy Roosevelt said, “Fail to prepare and prepare to fail”. It sounded similar to that, so what preparatory work has your department done to prepare for this eventuality, if we do leave the EU? Have you done anything at all and can you share anything with us today?
Daniel Calleja Crespo: I can reply to you that we have not done any preparatory work on hypothetical issues. We do not comment, we do not suggest answers.
Chair: That is a very straight answer. John, are you happy?
Daniel Calleja Crespo: We have plenty of work in managing the EU and dealing with all the environmental policy issues that we have in Europe.
Q294 Mary Creagh: We have heard the EU regulations are intended to act as a floor to member states’ domestic laws. To what extent do you think member states have treated them as a ceiling to their ambitions?
Daniel Calleja Crespo: In many cases it has been the case. It is very difficult to manage a European Union of 28 countries, with 500 million people and many different degrees of development. The European Union is increasingly diverse. The economic development of different countries is not the same. The environmental challenges that some countries face are very different from those for others, who are more mature and have more experience. In many cases, the benefit of European environmental policy is that it has stimulated greater awareness, with greater policy tools, greater evidence-based decisions and a lot of challenging issues reaching certain levels. For some countries it is very difficult to meet the targets.
I will give you an example from the recent proposals for waste in the European Union. We had a very difficult decision to make when we were considering the proposals. In Europe, some countries are below 20% in recycling. Others are close to 80%. How do you manage such a complicated situation? Do we take a national approach where each country tries to do it? After a lot of discussions and evaluation—and this was a decision taken with a lot of input from member states, from industry and from the European Parliament. It is under discussion right now—one of the messages we received from the internal market is it is very important to have a sense of direction and a level of ambition that allows the internal market to work, so at the end of the day you go in a certain direction.
Some countries need more time. It is not realistic, although when you are at a very low level you can do more but you need more time. One of the things that the Commission proposed, which is going to be discussed—and I am sure we will reach agreement—is that countries that are below 20% of recycling need additional time. It is important to have a common target and a sense of direction for review. For these countries the goal will be an absolute challenge. For others it may not be so difficult, but our system allows for that.
Q295 Mary Creagh: Of course the UK is one of those who were recycling a very small amount of waste, 7% in 1995 I think. We were land filling; I think 83% so the UK is an example of the effect that EU legislation can have in terms of stimulating new economy, new industry.
Daniel Calleja Crespo: With very positive developments. In the EU we have a target of 70% recycling for construction and demolition. The UK is 90%. This gives efficiency to your companies—a competitive advantage—which lowers the cost. This is resource efficiency—this is jobs, growth, and innovation. In some cases you have exceeded the target; in other cases it will be more challenging. Efforts on landfill remain. Europe has a very ambitious target on landfill, because we believe that restricting landfill will encourage recycling, and the more that you recycle the more resource-efficient you become.
There are studies. The report by McKinsey and the Ellen MacArthur Foundation says that when companies move in the circular economy they are more resource efficient. You can have €6 billion savings. You can create hundreds of thousands of jobs. You can reduce emissions more—from 2% to 4%. This is why we are very excited with the circular economy package because, despite the difficulties, we think that Europe, which is a region of the world that does not have abundant resources, has to go in the direction of more circularity and more resource efficiency. Our companies agree to go in this direction and have a first mover advantage in that they can find new markets.
Q296 Mary Creagh: The Chair has sort of asked: what scope would the UK have outside the EU to pursue ambitious long-term environmental policies? I am particularly interested in the post-Paris climate change treaty and how that would look, and also the sustainable development goals that were developed at the United Nations. I am keen to hear from your colleagues about what input your DG is having in the development of those SDGs. It is not just humanitarian and human-focused. There is a very broad environmental part to that as well.
Chair: I did not ask that; that was far better than my question.
Daniel Calleja Crespo: A multi-faceted question, so thank you very much, honourable Member, because I think you have mentioned two very important things for the environment that happened last year: the agreement in New York and the sustainable development goals for 2030. That is a major challenge for the EU and for the rest of the world, because we have an agreed agenda covering all the areas that we will have to implement, both domestically within the EU and internationally. Following the historic COP21, the first universally legally binding agreement on climate change, there is the process of implementation.
As regards t COP21, national commitments, are going to be submitted and there will be a monitoring process and reviews, so we will have to work within the European Union in order to introduce these measures. As for environmental policy, mitigation measures will have an impact. Forest policy and reducing emissions are important, so the European Union, which is a party to negotiations with member states, will have to contribute in the implementation exercise.
As for sustainable development goals in the 2030 agenda, the Commission will issue a communication this year. It is in a work programme, and we will have to decide how we are going to put this agenda in place. What are we going to discuss with the member states? There are some domestic issues. Some people think that all these targets are met by the European Union. One of the agreed targets is to cut food waste cut in half by 2030, which is very challenging. It is not obvious how we will do it, but it will have to happen. Then there is an international agenda with developing countries. All this is going to be very much ongoing work. We will contribute actively and in the course of this year we will discuss with member states the implementation phase.
Q297 Mary Creagh: Just going back to the first bit, what scope is there for the UK to influence the UK to the EU, if we were to leave?
Daniel Calleja Crespo: The UK within the EU framework I think has a very important role to play. If that were not the case then we would have to look at the situation and we would have to see in which way individually the UK should contribute.
Q298 Mr Lilley: Following on from that, as I understand it, the EU put in its own overall global contribution to the Paris COP21 talks, and it now has to allocate the targets among member states to add up to that total, or negotiate them. Is that correct?
Daniel Calleja Crespo: I think it is a little bit more complicated. Before the Paris talks there was an agreed EU position with targets, because we decided it was better—the EU would speak with a stronger voice—if we had some agreement. For example, 40% CO2 reduction by 2030, 27% for renewables, and other targets have been put forward. In parallel with this, there is a process of negotiation and discussion on application measures. With some of these measures we have said that, even if there is no international agreement, Europe has to lead with the example, and they are already being discussed and negotiated. Not everything has to be done from scratch following Paris. Some of the things are already in process because they were in our proposal.
Q299 Mr Lilley: At some stage, national contributions have to be agreed that add up to the aggregate. Britain is committed under the Climate Change Act to more substantial reductions than any other country in the world, it is legally committed, and certainly any other country in Europe. Presumably we are not going to add to what Britain is required to do, but the effect of Britain doing a lot means that other countries can do a bit less to reach the aggregate for Europe as a whole. Is that correct?
Daniel Calleja Crespo: I would like to check before replying, because I want to make something clear to the Committee. I am the Director General for the Environment, but there is a Director General for Climate Action, and I do not want to reply on their behalf. Perhaps on this point I could come back in writing, because it is an important point and I would like to give you a very precise reply, and it is not my direct competence. We could check if it is okay.
Chair: That is fine.
Q300 Peter Aldous: Director General, this is our third or fourth session on this particular inquiry, but in previous sessions two of our witnesses pointed out that in the 2014 environmental policy it was the EU policy area with the most ongoing infringements. Why do you think that was?
Daniel Calleja Crespo: That is a very good point. I was asking myself this question when I arrived in this job, because we have a huge number of infringements. There is not an easy or simple answer. There are several points that with your agreement I would like to share with you. First of all, over the years we have developed an important EU legislation on water, air quality, chemicals, industrial emissions, birds, and habitats. We have developed a considerable number but, okay, and there are issues in communicating. We are updating and reviewing our work, as there are cases of non-communication and incorrect transposition of the directives which have to be examined.
Secondly, since the environment is such a popular policy and has so much support, we have a lot of complaints from the citizens and the EU has to instruct on those complaints. Citizens sometimes go to the national courts, but then they come to the EU and we have a duty to respond. There are many issues—a road without an environmental impact assessment and other practical issues—that raise a lot of challenges.
Thirdly, in some cases, we are acting in the framework of our international obligations. There are rules on the transposition of international obligations, and we have to discuss that with member states. I think there is a discussion to be had—I want to put this on the table, but I don’t as yet have a personal opinion on it—on the fact that industry sometimes says the standards are so high that it is very difficult to meet those standards. I am not sure that this is valid, but we are not in direct contact with industry. We are in contact with member states, and we are making sure these things are pursued at a professional level. Perhaps my colleague, Dr Grohs, would like to come in on this, because she is the great expert on infringements. Why do we have so many?
Q301 Peter Aldous: I think you have explained it very well. Taking it one step on, some of the infringements that you have described might be called technical infringements, and when it comes to looking at them in detail how many of them are a serious source of concern?
Daniel Calleja Crespo: Can we classify the infringements according to their gravity? To forget to communicate a national measure to the Commissioner is more technical, but a serious breach of the legislation—
Sybille Grohs: For us, the breaches fall into different categories. We have the classic, rather boring, non-communication legislation that has been passed. The member state has not communicated or passed legislation to implement that on time. Once we get the legislation we check it to see if it conforms. They are much more complex and not very newsworthy, usually, but they are in many ways our bread and butter. Does the legislation comply with what was required? Then what we try to do is focus on areas where we see that there are key requirements. Has the member state designated the areas it should have done under nature or water directives? Has it adopted the plans it should to try to reach the aims under air and nitrates measures and so on? After that, I would say that we deal with many of the complaints that come in.
The infringement process is very slow, which frustrates a lot of complainants, but there is a reason why our infringement process is slow. The aim is not to go to court; the aim is to bring about compliance, and the more dialogue we have while we try to find solutions and negotiations the better. For all of us it is better not to go to court but, in terms of percentages, the number of complaints that go to court is very low.
Daniel Calleja Crespo: I would like to add something because, precisely for the reasons you have mentioned, we are working on an initiative that we are going to submit to the member states: the environmental implementation review. We are not satisfied with how many infringements we have or saying, “This country did not notify on 20 directives”. We need a more strategic implementation strategy. Right now, we are working on reports by member states that would give the situation in each country—how is the UK doing in air quality? What are the problems with water? We would like to do this for the 28 member states and present the results to Ministers, so we can address the problem at its root sources from a strategic viewpoint, and address the real problems that the environment is facing in Europe.
The biggest challenge we have now is no more regulations. We have a very sophisticated system of regulations that we are reviewing. In my view, the biggest challenge we have in Europe right now is implementation. This is something that is shared by the member states, and the environmental implementation review, which will be ready in the coming months, will allow for a strategic discussion on the real problems of implementation and environment.
Q302 Peter Aldous: I think you have looked into and seen the next point I want to go into. When it comes to implementation of the EU environmental policy, in your written evidence, one of the points you highlighted on the UK and UK business was what was described—and I am using your own words, a British phrase—as “a level playing field” with the rest of Europe. I think certain business groups within the UK would argue that that policy is implemented in an uneven way across different countries, with some countries implementing it in a more gold-plated way than others. How are you working towards evening out and addressing that particular problem, so that you have the same level of implementation and you get that truly level playing field?
Daniel Calleja Crespo: We want to have this level playing field.
Peter Aldous: Do you think we do have one at the moment?
Daniel Calleja Crespo: I think so.
Q303 Peter Aldous: So these businesses are not correct to be making that point?
Daniel Calleja Crespo: They make their points depending on their analysis of the situation. For the European Commission, one of the most important things is that we have to be fair when we are applying European law. We have to ensure uniform application. We have to have a level playing field and we have to make sure that countries that do not comply, whichever countries they are, commit to and respect their obligations. This is the name of the game. The Commission is the guardian of the treaties. It is not forbidden when you are transposing European legislation to go further, to do gold plating. It is the decision of each country.
I was saying that European legislation allows for a lot of margin and manoeuvre, and this is how it should be with subsidiarity. The situation of different countries is not the same, so perhaps some of the countries that you are referring to have experienced a specific problem. European legislation tries to have a level playing field, but in many cases we are not speaking of regulations that have uniform application across the EU, so it is about making sure that countries follow certain processes. With this process there may be a margin for different situations, so perhaps this is the explanation.
Q304 Peter Aldous: Are there some countries in some areas who are not good implementers?
Daniel Calleja Crespo: I was going to say many countries in many areas, but let’s be positive. We are reporting regularly on implementation, and we have charts on the number of infringements per country, which we can provide to the Committee, as well as on how countries are doing. If you are interested in the charts, I think the UK is doing quite well.
Q305 Peter Aldous: Is the UK a gold plater? A lot of people might view the UK as a gold plater. Would you regard them as a gold plater?
Sybille Grohs: I have not really come across any examples of gold plating in the environment, but there may well be ones that I am not aware of. It is not a problem that we are facing at the moment.
Daniel Calleja Crespo: I think the UK in general has a good record for transposing legislation on time. Most of the issues that we have with the UK concern the quality of the transposition, or the application of the law in practice. The UK discusses, fights and negotiates very hard in the discussions, but once the rule is made you have a very good record of transposition. Now, on particular issues of interpretation, there may be issues where some of your constituents raise concern, so it works on a case-by-case basis.
Q306 Peter Aldous: One final point about getting into the detail. I understand the UK Government has been criticised by the courts where its records are not meeting EU standards on nitrogen dioxide emissions. How does the UK compare with other member countries in its particular record of implementation on NOx?
Daniel Calleja Crespo: Perhaps Sybille would like to comment.
Sybille Grohs: We have had quite a few challenges with NOx—not just in the UK. There are a number of standards in the air quality directive: for PM10s, which are small particulate matter, the UK I think is one of only five member states that does comply, which is good. For NOx, by contrast, we have quite a considerable challenge, particularly the identification that most of the emissions come from transport. As far as I know, the majority of zones in the UK are in breach at the moment. We have just received improvement plans that look at ways in which that can be tackled—they were sent to us in December—so we are trying to look at those to see what level of ambition there is and whether it is realistic within a relatively short time for improvements to be made.
Q307 Peter Aldous: So it is a specific problem but the UK is not alone?
Sybille Grohs: It is not alone, no.
Daniel Calleja Crespo: I think we have 21 countries.
Sybille Grohs: With different levels of breach.
Daniel Calleja Crespo: So it is a serious issue, which we have to address because it is important.
Chair: Thank you, Peter. Your stamina is very impressive, I have to say. You are doing exceptionally well. As long as you can bear with us we will keep on going probably for another 25 minutes, if you are okay. We are finding it a very useful session.
Q308 Geraint Davies: Another half an hour on the issue of emissions. You have mentioned that the UK has been in breach of the standards for NOx, in particular, but we now know that one of the contributory factors to that has been Volkswagen basically implementing defeat devices that send out these NOx. In Britain we have something like 23,000 people dying a year from these emissions. I was wondering what the EU was doing to take VW to court and fine them, in the same way as the Environmental Protection Agency in the United States have under the Department of Justice? What are you intending to do about it?
Daniel Calleja Crespo: I would like to thank you, honourable Member, for this question. It is a very important issue that is of concern to us and which I was discussing with my colleagues only on Monday, following previous exchanges and contacts. The case of Volkswagen is one of fraud, which the company has admitted. When there is fraud there are sanctions and there are penalties that have to be applied. European legislation provides for member states that are responsible for enforcing legislation to apply fines in the case of non-compliance. We do not have powers to sanction the companies directly because, according to our rules, when you are using defeat devices the European Union is not certifying the cars. We do not have a European type certification agency. This is done by the member states and member states under our rules have the obligation to establish penalties and sanctions that are proportionate and effective. So there is no direct link between the European Commission and the company, contrary to what happens in the United States.
The EPA in the United States has the power to sanction the operator. The United States is a country—we are 28—and tight certification legislation and the real driving emissions legislation do not empower the Commission to sanction directly.
Q309 Geraint Davies: When we had the Minister for Transport and the Minister for the Environment here, one of the things that was said when I asked this question was, “It is above my pay grade and it will be done in Europe”. What you are saying is that it is a national responsibility. Are you aware of other individual EU countries that are taking VW to court?
Daniel Calleja Crespo: I will tell you what the European Commission has done. We have written to all the countries following the case, and we have asked them to investigate the situation and to report to us on the measures that they have taken. We are also reviewing the real driving emissions, because we need to tackle the problem at its root. The way to do so is to introduce a new system. We have been working in past years with the joint research centre to ensure that, when a car is certified, the emissions correspond as much as possible to real driving emissions.
The measure is now ready, and awaits a vote in the European Parliament next week. If the European Parliament votes in favour we will be the only region in the world with a real driving emission test in place. There are discussions to be had on the conformity factor, but that will be it. In addition, we are going to propose—and it has been announced by the Commission—that in order to avoid these problems, we need to oversee the way the legislation is enforced. There are areas of European law—I am referring to the European Aviation Safety Agency and the European Maritime Safety Agency—where you can audit or supervise the supervisor. We need to strengthen the supervisory mechanism in order to move in this direction.
We are also looking at whether the environmental responsibility directives that are in place would allow that. At this stage our lawyers are examining different possibilities. Is it possible for the European Union, in addition to all these measures that we are taking, to act on violation of air quality standards or on emissions at European level? The first thing that we would have to demonstrate would be that that is linked to the conduct of a company, because in many countries there are excess emissions affecting air quality, but that is not necessarily linked to one single company. We would have to establish this, and we would have to look at it legally. At this stage it is under examination but it is difficult, because the responsibility for implementing these directives lies at national level.
Q310 Geraint Davies: We know that millions of these devices have been introduced to these cars and their explicit raison d’être is basically to ensure that more emissions come out than is allowed under the law, so we know there is a breach. You are not aware of any other country in Europe that is taking legal action and you seem to be focusing on the future rather than sorting out this crime.
Daniel Calleja Crespo: What I am telling you is that we are in contact with all the countries, and we have asked them to report and to tell us the result of their investigations, and also report on the sanctions and measures that they are taking in relation to this company.
Q311 Mary Creagh: When are you expecting to receive that back? Have you had any back yet?
Daniel Calleja Crespo: I think this is the responsibility of my DG colleagues who were in charge of type certification of cars. I think they were expecting to get this information at the latest by the end of this month, but I could also check with you and give you more information.
Q312 Geraint Davies: That would be very helpful. Maybe you could send us a note. Finally, I want to ask about the precautionary principle. You have mentioned preventative work in contrast to what we have heard about VW. Some people have suggested it is done in too heavy-handed a way, but can I ask you specifically on the issue of shale gas and fracking. There is great concern that an enormous amount of contaminated water will emerge and there will be a lot of fugitive methane coming out of the process, maybe up to 5% according to a lot of the satellite pictures, which would make fracking worse than mining for coal, in fact. Are you doing work to ensure that the precautionary principle is applied, so that we do not wake up to a situation where the environmental impacts are much worse than predicted, and possibly under TTIP if we try to stop them a national government is sued?
Daniel Calleja Crespo: We have had very interesting discussions on the precautionary principle and very interesting debates as to whether the precautionary principle opposes the principle of innovation. We do not have the principle of innovation in our environmental policy but we have the precautionary principle.
In relation to the exploitation of unconventional hydrocarbons, which is what we call shale gas, there was a very intense discussion within the Commission and with the member states on whether we should regulate and introduce a certain number of conditions and restrictions, in order to prevent damage to the environment and in order also to have a framework in this area. The Commission decided not to issue a regulation but to issue a recommendation. The shale gas issue is not dealt with in the same way by every member state. In some cases it is forbidden and in some cases there are restrictions.
In the United Kingdom and Poland, as well as other countries, there is limited authorisation. It was decided at Commission level that the best way forward would be to issue a recommendation to those countries who decided to explore it, or authorise it, so that a certain number of measures would be taken in accordance with the precautionary principle. We said that we would review this recommendation in one year’s time. That time has now arrived and we are proceeding to review. All options will be open, but I think it is important—and I think you are probably aware—that of course the situation in the European Union is not the same as the United States,, which has proceeded with this big fracking industry.
Q313 Geraint Davies: Unregulated, yes.
Daniel Calleja Crespo: Including the property system, so in the United States if someone finds shale gas on their property they are allowed to extract. I think in Europe we have a very different situation. The geological situation is also very different. Now we are seeing, with the low price of oil, that in many cases what seemed a very productive possibility is no longer so. From our perspective what is important is to protect the environment.
Q314 Geraint Davies: Just so I am clear here, if the UK steams ahead with shale gas extraction, would that your recommendations have any bearing? Would that be a brake or a framework or can we just get on? It seems to me it is moving forward irrespective of the EU, who are dragging their heels.
Daniel Calleja Crespo: A recommendation is not a legally binding measure, so the UK is not obliged to follow our recommendation, which offers guidance and says how it should be done. As we are going to review the recommendation, it is possible that we will come up with other kinds of measures, but this has not yet been discussed. For the time being, the recommendation is not legally binding.
Q315 Geraint Davies: A final question—sorry, Chair. Fracking consists of putting millions of gallons of water into the ground and half of it comes back contaminated by hundreds of chemicals that are put into the fracking process, some of which are carcinogenic. We then end up with carcinogenic and radioactive waterways, and there is no established method of cleaning this water in a commercially viable way. We also know that the methane that is now coming out is something like 5%, which is 83 times more damaging to climate change than CO2 is. We know these things, but your department is basically not applying a broad brush principle in Britain to that situation on shale gas extraction.
Daniel Calleja Crespo: My department is bound by EU law, which has decided to go with a recommendation to avoid this kind of situation, but I am sure that the UK legislation also tries to address this issue.
Astrid Schomaker: I do not know the UK situation in detail, but I would say there are two additional elements. First, we are o aware of health and environmental concerns. We recently did a Eurobarometer survey to understand the views of the population in those countries that have an interest in fracking exploitation, or mostly exploration at the moment. UK citizens have come forward in significant numbers saying that they are concerned, as you explained, about these things. We have made a recommendation that comes on top of the existing legal framework. If, as a result of a fracking operation, we were in a situation where the water framework directive was violated the UK’s responsibility would still be to ensure that this directive, or other directives—the mining waste directive for example—were be respected.
Daniel Calleja Crespo: We also have REACH legislation, which also plays a role.
Q316 Chair: So all of that is still there in place?
Daniel Calleja Crespo: Yes, absolutely.
Geraint Davies: That is really the EU.
Daniel Calleja Crespo: This is legally binding legislation.
Astrid Schomaker: There were two more things. We had a very active discussion with member states. We have an expert group on shale gas that looks at the application of the recommendation. We have now looked at how it has been applied, but in that discussion we were also very happy to hear from the UK that there is a great interest and a great exchange of views with other member states to see how the law is applied in practice: how member states act when they explore shale gas or other unconventional hydrocarbons; how they deal with the existing legal framework. For us, as this proceeds—and it is a relatively new process—we would then be able to see if member states find it difficult to apply the water framework directive or the mining waste directives or other legislative instruments, which of course were in place before unconventional hydrocarbons and their specific risks were known. If member states find that there are difficulties we can have a more informed discussion to see if extra values are necessary and so on.
Finally, under Horizon 2020, a research programme which Mr Calleja has mentioned, we are looking at shale gas in quite some detail and there has been a commitment from the Commission saying that we are specifically interested in investigating the environment and health aspects. We are working with the US in this field. We also have networks of scientists at EU level exchanging information with us. There is quite a bit of activity in addition to the recommendation and an application of the recommendation.
Q317 Chair: Thank you very much for that, very helpful indeed. I have a couple of very short questions before I bring in Mr John McNally to round off this very useful session. First, we have heard from some organisations—one in renewables in small scale marine tidal, where very often it is smaller investors, not huge multi-national corporations—at the innovative end of renewable energy. We hear from the European Union that the overall cost implications and complexities are fairly minimal, plus 1% to 2% on costs of an average Environmental Impact Assessment. For a small marine tidal, it could be as much as £1 in every £5, and they gave us examples for a small organisation. What can you do to remedy that problem with smaller investors and businesses who want to do the right “green” thing but feel they cannot simply compete with that?
Daniel Calleja Crespo: It is a very important issue, Mr Chairman, and I am very committed to this file because in my previous job I was the SME envoy. I was working with SMEs and they were fighting to get the SME test into our system before any legislation was passed: can we analyse what are the implications are for SMEs, and if our proposal is very detrimental, can we introduce simplification measures to tackle that?
I can give you an example in REACH. We had lots of complaints from SMEs on the costs of REACH. We have asked the European Chemicals Agency at Helsinki to reduce the registration fees: a 95% reduction for micro companies, 65% for small and 35% for medium companies. We have to have reflexive regulation so that if the provisions have an impact on SMEs they can be simplified; there should be some element of reduction. In this particular EIA, we will have to look into it.
When member states are introducing European legislation they should also obey the principle which we call, “Think small first”. Think about the implications on the SMEs; think about the start-up; think of the cost—is it absolutely necessary?
In law you have to treat people equally, but different situations merit different treatment if there is unfairness. At a European level, this is something we have to look at when we issue the rule, and at a national level there should be margin for manoeuvre to introduce something. We should look at small companies because they are the ones which create the jobs; 80% of all the new jobs in Europe over the last five years have been created by SMEs.
Q318 Chair: I want to pass to John in a second but, can I just flip that round, and ask about the REFIT process? One of the challenges we have had from the other side of the spectrum is that green organisations worry that the REFIT process, particularly when you look at something like the habitats directives or the birds and wildlife directives, could lead to a watering down. How are you going to ensure that this is not a race to the bottom?
Daniel Calleja Crespo: I can reassure you in very clear terms. First, I would like to inform the Committee that we have had more than 540,000 replies to the public consultation, which is an absolute record in the history of the EU. We have never had that, even on TTIP, which was significantly less. More than 500,000 citizens and organisations have come in and said, “Please do not water down the measures. Please do not touch nature, birds and habitats directive; these are important pieces of EU legislation”.
We did a big consultation. We held a big conference and we have also received a lot of comments from member states. This will have to go the Commission, but what I would like to say is that at this stage most of the comments that we have received show that the real issue is not simplifying or merging the regulation for implementation. How do we make sure we are dealing with the problems of implementation? How do we tackle financing issues in some areas? All this will come and I think this year, in the spring, with the Dutch presidency we will reach a further position. Having looked at all the comments—and I have to tell you that at this stage there are a lot—there is a strong consensus on not weakening birds and habitats legislation.
Q319 John McNally: This has been extremely interesting, especially what you gave us just now regarding the fracking and shale gas extraction. This is happening in my own constituency with shale gas and, as you rightly said, it is causing a huge amount of concern. People are really concerned about their working environment, their perception and the cost to small businesses are affected by all of these things. What I want to ask you is whether the great majority of the EU environmental legislation is a legal form of directive, so will UK devolution, in your opinion, increase or decrease the capacity for individual UK countries, such as Northern Island, Scotland and Wales, to implement their own policy approaches? If you could give us a little insight into how other EU countries deal with EU environmental legislation, how could we learn from that?
Daniel Calleja Crespo: In the EU, with 28 member states, we work with many different forms of organisation. You have some countries that are more centralised than others and you have countries that are more decentralised than others. In some cases, countries have environmental rules that are applied at regional level.
Q320 John McNally: Can you give us an example?
Daniel Calleja Crespo: Spain. I had a meeting very recently with the Minister of the Environment in Extremadura, which is on the border with Portugal. They are concerned about the water hyacinth, which is a Macedonian plant but which is now covering the whole Guadiana River, causing lots of problems with the water. The issue is in the competence of the region. I have regular contacts with German Ministers from Maven, Gutenberg to North Rhine-Westphalia—Astrid knows them all—and we are working with them closely. Of course our main interlocutors remain the member states, and we have meetings with the participation of the national authorities. We try to find solutions and to support regional issues because regions have in many cases responsibility for solving the issues, of course in full agreement with the member states. Ultimately for the EU, the responsibility for compliance lies with the member state.
Q321 John McNally: What I take from that is that it is no matter how much further devolution is going on. We are in the middle of debating the Scotland Bill at the moment and receiving more power—I use the term “receiving” loosely—and we are actually getting more powers devolved to Scotland. In your opinion, will that increase or decrease our vote, or will it still remain in the hands of the UK Government?
Daniel Calleja Crespo: It is a very fundamental principle that responsibility for compliance lies with member states. We do not accept it a member state says, “I am in breach of this legislation but it is not my fault. It is the region”. That does not work because it is the member state who ultimately has responsibility. It is the member state, and this is why we insist on meetings with regions to co-operate, so that national authorities are involved. At the end of the day, our interlocutors are the member states who have the responsibility for implementation.
Q322 Chair: We are going to draw to a close. On this specific issue I think it would be really helpful if you were to submit, perhaps in writing, your further thoughts on this aspect of when you have an increase in devolution in somewhere like the UK, but you already have established devolution in other member states. To what extent does a devolved nation— Wales, Northern Island, Scotland—have an interplay with the European Union, and how will that continue or change over time?
The member state point is absolutely right: accountability lies firmly with that Minister sitting in that seat. From your experience, are there good examples of how that works where regions or Governments—in this case within the UK—can influence overall the one who sits in that hot seat. I do not think John McNally is quite right; we can almost spend another half an hour going through this. What would be helpful for us as a Committee is if you sent us some further thoughts on how that works and where it does not work. What are your thoughts on how it is changing as well, as there is increasing devolution of powers?
Daniel Calleja Crespo: I will do so, but I would like to say two things to the question. First, the EU is neutral on the organisation of each country. It is up to each country to decide.
Chair: Absolutely.
Daniel Calleja Crespo: Secondly, the responsibility of the member state remains. Thirdly, there are very positive experiences where proximity to the local province and region helps to solve the problems because there is proximity to the citizen. So the name of the game is very good articulation and very good communication at the local, regional, national and EU level.
Q323 Chair: I think you might have the final word for this session, Ms Grohs?
Sybille Grohs: My question was more about your question: do you want this to reflect our experience with the UK or more generally?
Chair: I think the UK would really appreciate some thoughts on it but also wider European examples of where there is good practice, and perhaps where it has failed as well because we can reflect on that as a Committee. Thank you.
Thank you very much indeed. You have stayed with us for quite some time and answered some in-depth questions. Thank you Committee members as well for staying with us. It has been very helpful. We appreciate your time and also the capacity here in the UK Parliament to exchange views with you and to examine what you are doing as well. Thank you very much indeed. We wish you a good journey back, wherever you are headed and whenever you are headed and, if I did not say it earlier, a belated happy New Year to you as well.
Daniel Calleja Crespo: Thank you very much. We have enjoyed the discussion. We have also learned more about the situation in the UK. We are available for any further input and we will certainly provide it in writing. Thank you very much and happy New Year to all of you.
Chair: This meeting is now adjourned.
Oral evidence: Assessment of EU/UK environmental policy, HC 537 3