The Water Act 2003 introduced the most significant changes to water abstraction licensing since the framework for water licensing was first set up in 1963. Further amendments, scheduled to come into force this year, will significantly affect many operators in the minerals sector. Geoff Keenan, principal from SLR Consulting’s Exeter office, explains the background to these amendments and urges the industry to act now in order to comply with the new regulations by October 2010
The 2003 Water Act provides for the removal of the existing exemption from water abstraction licence regulations for dewatering associated with mines, quarries and other underground activities. Scheduled to come into effect from the 1 October this year, Defra has previously postponed implementation on at least two previous occasions and recently closed a final consultation on the proposals. The results of the consultation are yet to be published.
When the new regulations are finally implemented mineral operators will require one, or both, of two different licence types: a Transfer Licence and/or a Full Licence.
Any abstraction for dewatering that involves more than 20m3/day of groundwater will require a ‘Transfer Licence’. This is a relatively new form of abstraction licence and is required for water that is transferred from one source of supply to another ‘without intervening use’. This is usually, but not always, the case for mineral dewatering activities.
The ‘without intervening use’ is an important condition as a Transfer Licence will not attract an annual charge based on the volume abstracted. This will be a relief to a number of mineral operators as some can abstract in excess of 30 million litres of water every day – enough to fill 12 Olympic size swimming pools.
A ‘Full Licence’ will be required for that portion of the abstracted water which is used for any purpose and this will attract an annual charge. For mineral operators, this would include use for dust suppression, mineral and wheel washing, and in product manufacture. Annual charges will be based on the volume of water used but will vary to reflect how much of the water is lost. For example, dust suppression is seen as high loss and will attract a higher charge than mineral washing, which is low loss.
Defra has proposed ‘transitional arrangements’ to assist operators with existing abstractions in complying with the new regulations. The Environment Agency (EA) and Defra have indicated that mineral companies will have until 1 October 2010 to prepare a licence application under these arrangements and the EA will have until 2015 to determine the licence.
In order to apply for a licence under the transitional arrangements, the operator must be able to demonstrate that they have actually abstracted water at any time within a period of four years preceding October 2009. The applicant will be required to provide justification for the volumes and uses applied for and prepare a technical supporting document to assess the impact of the abstraction on the environment. This will be known as a Hydrogeological Impact Appraisal or HIA, and will involve the assessment of the impact of the abstraction on the surrounding environment.
If the EA refuses a licence for an existing dewatering abstraction to be continued, compensation can be claimed. Defra have indicated that compensation will not be paid if the abstraction licence is refused on the basis that it is causing serious damage to any waters, channels or underground strata, or if flora or fauna are dependant on them.
If applications for licences are refused, there is no requirement for the EA to pay compensation, unless the operator can provide evidence that future dewatering abstraction was already planned before the de-exemption date of October 2009.
Operators will have only a 12-month period in which to prepare and submit an application. This timescale is extremely tight as, in many cases, they will need to install the necessary equipment to monitor the volumes of water abstracted and used. At sensitive sites they will also potentially have to monitor the impact of the abstraction on groundwater levels and surface water flows.
Operators will have to assess the environmental impact of their dewatering activities by carrying out a Hydrogeological Impact Appraisal (HIA) and present this in support of their licence application. This will involve the development of a conceptual site model, the prediction of impacts and the design of mitigation measures The procedure recommended is a tiered one with the complexity and sophistication of the assessment increasing as the volume of dewatering and/or the sensitivity of the surrounding area increase.
It is unclear whether the HIA will be required to be submitted with the application. Discussions with the EA indicate that it may be acceptable to submit a licence application without a supporting HIA and to wait for the EA to request one if they deem it is necessary. This, like many issues concerning how the regulations will be introduced, will remain unclear until detailed technical guidance is issued.
Recent experience at Glendinning’s Linhay Hill Quarry, in the south-west of England, indicates that operators will need to accurately determine how much they abstract, the category of use it is put to and what impact they are having on the environment. This will be essential information to support a licence application and operators will also need to provide evidence that they are minimizing their water usage as much as possible.
The industry has strongly argued that the one-year application period is too short. Operators of single quarries may be able to meet the deadline, but larger operators who manage multiple sites will have to prepare a large number of applications within a 12-month period. A better solution would be to stagger the applications over at least two to three years based on the risk of environmental damage. This could be based on the volume of water abstracted and on the environmental sensitivity of the surrounding area. This has been suggested during the recent consultation but the industry will have to wait and see if is adopted by Defra.
While the four-year qualifying period – to demonstrate a right to apply for a licence under the transitional arrangements – seems reasonable, it may be difficult, in some situations, to comply, eg where a site has planning permission but has not yet required dewatering. Defra has indicated that if the operator can prove that plans to de-water are in place, then an application can be made. It is unclear what will have to be done to prove that plans are in place and it would seem reasonable that if any operator has a valid planning permission to work a site that requires dewatering, then it should be possible to apply for licence under the transitional arrangements.
Costs are always a sensitive issue, but particularly during one of the worst recessions in living memory. The licence fee of £135 is not onerous but there will be additional fees of perhaps up to £2,000 to prepare and submit an application, even in simple situations. In complex situations, where a detailed HIA and the services of a consultant are required, costs could be significantly more. For operators with multiple sites these costs will soon mount up. This is another strong argument for the phasing of the applications, as it would allow operators to stagger the costs over more than one financial year.
The results of the recent consultation and any changes to the regulations are yet to be published, but it is clear that operators need to address the possible implications for their businesses now so that they are prepared well in advance of the October 2010 deadline.