Suspected failings in the regulation of combined sewer overflows

In June 2022 the Office for Environmental Protection (OEP) announced that it would carry out an investigation into the roles of Ofwat, the Environment Agency and Defra in the regulation of combined sewer overflows (CSOs) in England.

Shortly afterwards, in a speech to the Westminster Forum, the Chair of the OEP made clear their intent to get to the root cause of any failure. In the context of CSOs, this may mean potential enforcement action for non-compliance with the law, or a finding that there is an issue with the law itself. The full range of the OEPs powers have been left in play.

A little over a year later, on 12 September 2023 the OEP announced that they had identified possible failures to comply with environmental law by Defra, the Environment Agency and Ofwat in regard to the regulation of CSOs. But what are those failures, and what happens next?

What are the suspected failures?

The core issue, according to the OEP, relates to the misinterpretation of key points of law.
The OEP’s Chief Regulatory Officer commented that, while the OEP interpret the law to mean that untreated sewage discharges should generally be allowed only in exceptional circumstances, such as during unusually heavy rainfall, it appears that the public authorities may have interpreted the law differently, permitting such discharges to occur more often. 

 Information Notices have been issued to all three public authorities (the Public Authorities) setting out, what OEP believe are the Public Authorities’ failures to comply with environmental law. These failings are stated relate to the following:

Environment Agency - the requirements of urban wastewater legislation and the EA’s role in devising guidance, setting permit conditions, and reviewing/enforcing the conditions.

Ofwat - interpretation of sewerage undertakers’ duties to effectively deal with sewage and Ofwat’s duty to make enforcement orders where sewerage undertakers fail to comply with their duties.

Defra - the requirements of urban wastewater and water quality legislation and Defra’s duty to make enforcement orders where sewerage undertakers fail to comply with their duties to deal with sewage effectively.

The suspected failures, therefore, go to the heart of the framework for the regulation of CSOs.

The Response

The Public Authorities have two months from the issue of the Information Notices to respond in writing, setting out their position in respect of the suspected failures, and what steps (if any) they plan to take in order to deal with them.

The responses from the Public Authorities may, potentially, change the OEP’s view of the alleged failures, resulting in no further action being taken. If that is the case, the OEP can be expected to publish a report on its findings.

However, while it could be that OEP softens its view in respect of some of the failures, it seems unlikely that the collective responses from Defra, the EA and Ofwat will result in an about-turn from the OEP.

Should the OEP’s view remain unchanged, the next step would be for the OEP to serve a Decision Notice.

What comes next? – Decision Notice and beyond

A Decision Notice is a formal document which sets out the OEP’s conclusions on a public authority’s failure to comply with environmental law. It will include why they think that the failure is serious, and the steps that the OEP considers that the public authority should take in relation to that failure.

This is where the next steps of the OEP investigation will be very interesting. What might be the suggested actions to remedy, mitigate or prevent reoccurrence of the failures listed above? A more robust interpretation of existing legal frameworks, for example? Or could it be that these legal frameworks need to be revisited in their entirety?

If a Decision Notice is issued, the Public Authorities must respond in writing on whether they are going to implement the steps recommended by the OEP. However, what happens if one, or more, of the Public Authorities:

• contest the OEP’s findings that they failed to comply with environmental law;
• do not implement the recommendations in a Decision Notice, or do not do so in a timely manner;
• accept any breach but disputes the remedial steps suggested by the OEP?

The complexity and political significance of these issues may increase the likelihood of ‘non-compliance’ with a Decision Notice by one, or more, of the Public Authorities.

If that is the case, the OEP’s Strategy and Enforcement Policy indicates that action via the courts in an available option. This would entail a decision by the OEP to commence proceedings in the High Court via an environmental review.

Not only would an environmental review be damaging for the Public Authorities, the outcome of an environmental review could result in the issuing of a statement of non-compliance (SONC). The High Court can also grant any remedy that would be available on judicial review.

Comment

It is no surprise that the OEP’s investigation has been well received by environmental campaigners and it appears it is set to attract much greater public attention.

The OEP was established as an independent watchdog, to hold the government and other public authorities to account in upholding environmental laws. From the outset, this investigation has had the feel of a test of the OEP’s new role. The key challenge for the OEP will be navigating, not only an extremely technically complex area of law and practice, but an intrinsically political one.

With a general election around the corner, and Ofwat’s ongoing consideration of the recently submitted business plans as part of PR24, the subject of the OEP’s investigation may be viewed as deeply political. All eyes will be on the Public Authorities’ responses to the Information Notices and the OEP’s next steps.