Glass war

In October 2005, the High Court ruled that the permit to operate a major new glass container plant was unlawful. The manufacturer, Quinn Glass, is appealing the ruling and has been granted a stay on quashing of the permit pending appeal. However, confirmation that its permit is unlawful must have been sobering news.

This is all the more so because Quinn’s new plant also has no planning permission. That application is called in for determination by the Secretary of State.

The case concerns the interpretation of Pollution Prevention and Control Regulations, governing permits to operate industrial processes. As well as glass manufacturing, they apply to processes for energy, metals, minerals, plastics, ceramics, chemicals, waste, timber, paper, pulp, printing, textiles, rubber, tanning, food and intensive farming.

Environmental protection

To protect the environment, a key feature of this regime is achieving best available techniques. To obtain a permit to operate, the process must use technology or other measures which prevent or reduce emissions.

The court was aware of the significance of this case. At the outset, the judge identified:

• The regulator sought guidance on a central issue where no authority currently exists
• The case involved interpretation and application of “an important part of the European and UK legislation designed to protect the environment from industrial pollution”
• There had been major investment in the plant and shutting it down would result in costs and losses worth millions of pounds and the potential lay-off of a 220-strong workforce

The judge said: “The circumstances in which the expenditure was incurred by Quinn, and its employment of large numbers of people, are unusual, and represented the taking of a calculated risk on its part.

“The largest container glass factory in Europe has been quite deliberately advanced far beyond the design and planning stage without two of the necessary fundamental statutory permits being in place.

“It has also been constructed and started up before the local planning authority has considered any of the environmental information or considered whether the environmental effects have been adequately addressed.

“It is entirely inconsistent with the objectives of either the European or national pollution, prevention and control codes, which seek to ensure that a process is gone through before a plant’s design is finalised.”

The central issue was the degree to which the technique, production capacity and process configuration proposed is determinative of the process, criteria and considerations by which the application is judged by the regulator.

It was also key that the regulator, Chester City Council, submitted that it had to “take as a given” major aspects of the plant in Quinn’s permit application, including its configuration and the size, number and type of furnaces. The judge disagreed. It seemed extraordinary that a regulator might be powerless to reject and had to accept the fundamental features of a new plant capable of making a real difference to its emissions.

It did not help that the evidence revealed that Chester council had looked at the availability of the very technologies it suggested in court were to be disregarded because they differed from those in the application.

The judge said: “[A regulator] will take account of the individual characteristics of the proposed [plant], but in my judgment it is not bound by them. The [regulator] must also have regard to other configurations or designs which would result in lower levels of emissions.

“It is obvious… that, if a Best Available Technology (BAT) analysis is carried out, then choice of process has to be examined, as does the design of the furnace.

“It cannot be right in my view that a regulator is not permitted to consider whether a different configuration of production facility or furnace size or otherwise would reduce the rate of emissions of pollutants.”

Quinn submitted that its technology achieved BAT on the basis that:

• Its modelling for the emissions showed no breach of local air quality objectives under the National Air Quality Strategy (NAQS)
• It therefore achieved the required high level of protection for the environment

It was clear to the court, though, that requirements of BAT do not stop there. There is also an obligation to minimise emissions. The evidence showed that other technology was available which would significantly further reduce the plant’s emissions.

A notable feature of this case, though not highlighted in the court’s judgment, is that Quinn had, shortly before building the plant, changed the technology. Quinn applied initially for planning permission for a plant (440,000 tonnes a year) using three state-of-the-art oxyfuel furnaces.

A couple of months later, Quinn applied instead for a smaller plant (310,000 tonnes a year) using two such furnaces. This plant was granted planning permission a couple of years later. Within six months, Quinn applied for and obtained planning approval for a larger plant (370,000 tonnes a year) using two larger regenerative furnaces. It was this plant that Quinn built, starting two months before planning approval. Regenerative furnaces are older technology, lacking the lower nitrogen oxides emissions associated with oxyfuel furnaces.

The question is whether Chester council fully appreciated the significance of the change.

Quinn asserted that its new plant was the cleanest in its sector, discounting the court challenges as those of a commercial rival seeking to avoid competition. Chester council, apparently overlooked key differences between new and existing plants under the regime. The judgement identifies two key errors:

• Chester misinterpreted the statutory guidance regarding a deadline for achieving a certain emission level which applied to existing plants, not new plants
• In determining the emissions levels that represented BAT for Quinn’s new plant, Chester took into account the levels achieved by existing plants, described by the court as an “immaterial consideration”

The judge was also satisfied that the existing manufacturer’s challenge was legitimate.

Until recently at least, Quinn may have taken the view that, if Chester council was not using full rigour in considering its planning and permit applications and subjecting them to testing scrutiny, this was to Quinn’s advantage.

This case demonstrates that, while this may have initial attractions in posing the possibility of savings on time, cost and other resource, it also has real dangers.

As regards the local authority, the nature and extent of the court’s criticism cannot be ignored. Regardless of the political and economic attractions of a new industrial development, care must be taken to ensure every application and its impact is fully understood.

This is especially important where the local authority lacks much experience of the type of application. Decisions must be properly informed, if necessary securing expertise externally.

The regime in this case is of national and international significance. Local regulators can and should develop effective, long-term, working relationships with the industries in their area, but they must remain alert to the risks of compromising a national and international regulatory regime through inconsistency. Local political and economic considerations must not be permitted to assume any undue and distorting influence.

Nina Benson is an associate in the litigation group at DLA Piper Rudnick Gray Cary UK LLP