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Hidden Liabilities of contaminated land
An increasingly valuable asset of any company or organization is the land upon which it stands. However there can be hidden liabilities associated with its past industrial use.
Owners, landlords, tenants and prospective purchasers of land should therefore be aware of the quality of that land.
Environmental liability can affect both owner and occupier since legislation in the form of a new contaminated land regime provides for the investigation and enforced remediation of contaminated land.
Where remediation is necessary, this can run into millions of pounds and there are examples where land can have a significant negative equity value. However, less obvious are the facts that potential income streams reduce, financing difficulties arise, and that management and production time is lost. Since pollutants can migrate, the influence of neighbouring land should not be overlooked.
The Environmental Act 1995 provides a statutory definition of "contaminated land " as:
" any land which appears to the local authority in whose area it is situated to be in such a condition, by reason of substances in, on or under the land, that :-
significant harm is being caused or there is a significant possibility of such harm being caused; or
significant pollution of controlled waters is being caused or there is a significant possibility of such pollution being caused."
The Act introduces the concept of a pollution linkage. This linkage consists of a pollution (contaminative) source or hazard and a receptor, together with an established pathway between the two. For land to be contaminated, a pollution linkage must exist. The hazards can arise from contamination introduced by past industrial processes including waste disposal, storage, leaking pipework, spillages and various other reasons including mining, landfilling or subsidence. More often than not, this was not industrial vandalism, simply that the dangers were not appreciated, take asbestos for example.
It is essential therefore that the risks associated with contaminated land are carefully managed, in much the same way as financial and production risks.
The first stage is to quantify the risk by a geoenvironmental assessment carried out by a suitably qualified geoenvironmental engineer. Such an assessment can range from a preliminary site assessment through to intrusive investigation, sampling and full remediation. It should also provide information on other ground related risks such as mining and slope stability. One of the main difficulties is however inconsistency in the approach taken by parties in the assessment of contaminated land.
In 1999, the Urban Task Force identified the benefits of greater standardisation in the handling of information on land contamination. They recommended the introduction of documentation to be known as a " Land Condition Record " (LCR). The stated purpose would be;
" to ensure that during the sale, purchase and redevelopment of land, all parties had access to the same data set and could develop some general agreement between them on the levels of risk associated with that particular site and that particular use ".
The LCR contains and summarizes information relevant to land contamination which would normally be obtained during a desk study and/or intrusive investigation of the land, or as part of remediation or redevelopment. To ensure accuracy and consistency the LCR should be completed by a "Specialist in Land Condition". Typically the LCR would include, amongst other things, detailed site information, past and present land use, site history, geology, hydrogeology, mining, existing ground investigation data and regulatory authority information.
Although the use of a Land Condition Record is at present voluntary, it should be used where there are " advantages in providing available information in a consistent and transparent way. It will make clear what information is being transferred and promote confidence in that information ". Specific areas of use could include conveyancing, regulatory compliance, environmental regulation, health and safety management, and insurance.
It is important to recognise that the LCR does not include the assessment or evaluation of environmental risk, potential liabilities, potential costs, valuations or recommendations. Specialist advice will still be required for the assessment of risk as described earlier. LCRs could however be an important development in relation to mergers and acquisitions, and the funding thereof.
Clearly a short article, such as this, only scratches the surface of what is a vast and complex issue. Failure to identify contamination prior to acquiring a site or investing in it could lead to potentially huge environmental liabilities. These risks can however, be quantified and managed in a sensible cost effective manner providing there is an appropriate geotechnical input.
Latest company developments
"Specialist in Land Condition" (SiLC)
Michael D Joyce Associates LLP are pleased to announce that Anthony Joyce CEng, CGeol has become an accredited "Specialist in Land Condition" (SiLC); one of the few so far qualified.
The SiLC scheme provides a formal accreditation process for professionals involved in issues of contaminated and brownfield land. It is backed by a number of organisations including the Institution of Civil Engineers and the Royal Institution of Chartered Surveyors. Prospective candidates are required to have 8 to 10 years relevant experience and to undergo an examination and interview process. A qualified SiLC is authorized to complete and certify Land Condition Records which provide standardized documentation for the handling of information related to brownfield sites.
In 1999, the Urban Task Force identified the benefits of greater standardization in the handling of information on land contamination. They recommended the introduction of documentation to be known as a " Land Condition Record " (LCR). The stated purpose would be;
" to ensure that during the sale, purchase and redevelopment of land, all parties had access to the same date set and could develop some general agreement between them on the levels of risk associated with that particular site and that particular use ".
Although the use of a Land Condition Record is at present voluntary, it should be used where there are "advantages in providing available information in a consistent and transparent way. It will make clear what information is being transferred and promote confidence in that information". Specific areas of use could included conveyancing, regulatory compliance, environmental regulation, health and safety management and insurance.
Groundwater Protection Code
Petrol Stations and Other Fuel Dispensing Facilities Involving Underground Storage Tanks.
The above code and its intention to provide advice on the protection of groundwater, primarily in respect of USTs. The code identifies four key elements recommended to protect groundwater from potential pollution. This includes the preparation of an Environmental Risk Assessment as a first stage.
Michael D Joyce Associates LLP
Would you please note that with effect from 1 st October 2002 the practice has become a Limited Liability Partnership.
May we take this opportunity of thanking our clients for their support over the years. Should you have any comments or suggestions for improving our service, we would be pleased to hear from you.
Landmark
As part of the on-going development of services to our clients, we now provide a Landmark Envirocheck report as standard in our own reports. These provide accurate and reliable quality controlled environmental data from the Environment Agency, SEPA, British Geological Survey and many other organisations.
Where we differ from many others in the provision of this service, is that we are able to provide the crucial and necessary interpretation of Landmark's data. By always using professionally qualified staff with extensive local knowledge, we analyse the data, carry out a site inspection and provide a comprehensive risk assessment.
This assessment details whether the site or property is actually a real geotechnical and environmental risk in accordance with the Environmental Protection Act. In addition, we can advise, plan and supervise any intrusive investigation which may be required.