Waste recovery or waste disposal?

R (on the application of Tarmac Aggregates Ltd) v Secretary of State for Environment Food and Rural Affairs and the Environment Agency [2015] EWCA Civ 1149 

A recent Court of Appeal decision, in which Freeths acted for the successful appellant, has considered the important definition of “waste recovery” (as distinct from waste disposal) in the EU Waste Framework Directive.

Article 3(15) of the Waste Framework Directive defines waste recovery as “…any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or wider economy…”.

The Directive makes a clear distinction between waste recovery and waste disposal “based on a genuine difference in environmental impact through the substitution of natural resources in the economy and recognising the potential benefits to the environment and human health as a resource” (Waste Framework Directive, recital 8). In short, the Directive encourages the use of waste, in the right circumstances, in place of virgin material.

In this case, Tarmac had applied to the Environment Agency for an environmental permit to use waste materials (spoil from quarrying operations and other similar waste) as part of an approved quarry restoration scheme. The type of environmental permit for which Tarmac applied relied on the use of waste being recovery rather than disposal.

A key element of the restoration was the creation of a land mass running between two water bodies to allow for the reinstatement, to its original route, of a public footpath that had been temporarily diverted while the quarry was worked. Reinstatement of the footpath was a condition both of Tarmac’s planning permission and of a separate but related Temporary Public Footpath Diversion Order.

The Environment Agency refused to issue the environmental permit, including on grounds that the proposal amounted to waste disposal rather than waste recovery. Although the precise reasoning for the refusal changed over time, by the time of the inquiry the Environment Agency’s main argument was that Tarmac would have found an alternative to the approved restoration scheme if it could not have used waste materials. If the scheme would not have gone ahead with non waste materials, the Environment Agency argued, the waste materials were not in fact replacing non waste materials.

Tarmac appealed the refusal, arguing that they would have completed the restoration scheme with non waste materials if necessary, not least because they had a legal obligation to do so under the planning permission and footpath diversion order.

The Inspector who dealt with the appeal found that:

1. The minimum amount of material was proposed to be used;
2. There was no reason to conclude that the work wouldn’t be completed to a reasonable standard;
3. The scale and design of the proposed landform were acceptable; and
4. The proposed materials were suitable for their intended purpose.

However, the Inspector accepted the Environment Agency’s argument that it was unlikely the footpath would have been reinstated using non-waste materials if waste materials could not be used. The Inspector concluded that the business would seek alternative approaches such as permanently diverting the footpath or redesigning the landform through the use of a bridge, for example.

The Inspector’s decision was challenged by way of judicial review. On 7 August 2015, Mrs Justice Patterson dismissed Tarmac’s claim, refusing to quash the Inspector’s decision. Put very briefly, it was held that the Inspector was right to ask whether the operation would be carried out using non-waste materials if waste could not be used and that he was right to consider alternative approaches. In particular, Mrs Justice Patterson said, the Inspector was alive to, and took into account, the requirements of the planning permission.

The Court of Appeal reviewed that decision and, on 17 November 2015, allowed Tarmac’s appeal, quashed the decision of the original Inspector and replaced it with a determination that the Environment Agency should issue the necessary environmental permit. The Court of Appeal held that “on the evidence before him and on the basis of findings made by him, the Inspector clearly should have found that the backfill operation to create the lakes and the land bridge at the Quarry site was a legitimate function which would have had to be carried out in any event, whether waste was used or not. All the evidence indicated that Tarmac would indeed be required by the Council to comply with the planning obligation to which it was subject …” (paragraph 40 of the judgement).

The decision raises some important practical issues.

First, it has been argued that, as a result of the case, if an activity is proposed pursuant to a planning condition it will always amount to recovery. We disagree. While the planning condition and requirement of the footpath diversion order were very important features of the case, equally important was the evidence as to how and why the detail of the approved restoration scheme had come about, evidence that the Council would have had no reason to release Tarmac from its restoration obligation even if primary materials had to be used for the purpose and the fact that the “alternatives” considered by the Inspector were speculative and unsupported by any evidence. The case did not turn on the existence of the planning condition and footpath diversion order alone. It also relied on evidence that those requirements would not be relaxed.

Secondly, much has been made of the finding that it would have been financially viable for Tarmac to have carried out the restoration using primary materials. Again, though, this was only one element of a wider factual context, all of which led to the conclusion that the Council would have had no reason to release Tarmac from its restoration obligation. Equally important was the fact that the “alternatives” considered by the Inspector would not have had the same ecological and recreational benefits as the approved restoration scheme, which benefits the Council had seen as important and in the public interest.

Both of these points highlight the importance of considering the case, and the evidence, as a whole. Each case will turn on its own facts and there will be more than one way to demonstrate that waste is (or is not) “replacing other materials which would otherwise have been used to fulfil a particular function”.

Thirdly, the case serves as a reminder to practitioners to remain focussed on the definition within the Waste Framework Directive and not to look elsewhere for fixed criteria. While guidance that has been issued at both EU and domestic level may be an aid to interpretation, it can never replace the legal test. In this case, the Inspector had noted that existing domestic guidance, EPR13, “had the potential to lead the Environment Agency to an approach which was not tightly aligned with the test in Art 3(15)” (paragraph 37 of the Court of Appeal judgement). The Environment Agency is in the process of issuing new guidance as to the recovery and disposal of waste on land and we will provide a further update when the new guidance is publicly available.

Fourthly, the case explored the interaction between example of recovery and disposal operations given in the Waste Framework Directive. Annex 1 to the Directive sets out a non exhaustive list of disposal operations including paragraph D1: deposit into or on to land (e.g. landfill). Annex 2 sets out a non exhaustive list of recovery operations including paragraph R10: treatment resulting in benefit to agriculture or ecological improvement. The Directive is clear that the Annexes are non-exhaustive and therefore, where a proposed activity does not fall within any of the listed operations, one may still rely on the definition in Art 3(15) to demonstrate recovery. In this case, though, the
Court of Appeal held that Tarmac’s proposed operation could be categorised as falling within either paragraph D1 or paragraph R10. Therefore, the court said, additional criteria had to be brought into play to assist in categorisation. The Court asked itself whether the principal objective of the operation is to use waste to secure ecological improvement of the site (that is, the objective of category R10) rather than to dispose of the waste (D1). On a practical level, then, an operator cannot simply identify a category in Annex II that, on the face of it, fits their proposed activity and stop there. They will be well advised to also consider whether there is any possible overlap with the categories in Annex I or, perhaps, whether on closer examination the facts and evidence indicate that the test in Art 3(15) has not in fact been met.

Finally, the Court of Appeal left open the question of whether the use of waste could ever be considered a recovery operation in circumstances where the operation would not have been carried out using primary materials. Counsel for the Secretary of State and counsel for the Environment Agency submitted that it could not and the Court of Appeal agreed that their submissions were supported by the Opinion of the Advocate General in the leading EU case on the subject. The Court of Justice of the European Union was not, though, explicit on the issue in that case and no doubt this is an area to be tested in the future.