Institute of Occupational Health and Safety Land Legacy Issues

Institute of Occupational Health and Safety Land Legacy Issues

Presentation Content 1. When do you need to assess contaminated land? 2. How do you assess contaminated land? 3. How can contaminated land be remediated? 4. Environmental Due Diligence

When do you need to Investigate Contaminated Land? 1. Vendor / Purchaser Assessment to determine Environmental Liabilities during the land transaction process (Environmental Due Diligence) 2. Required to Support Planning Application on Brownfield Land to assess if the site is suitable for use. 3. To identify / pre-empt liabilities under Part III / ELD 4. To assess a Pollution / Spillage incident at a site

NI Contaminated Land Regulation Planning Development & Control NIEA / Council Advice to Planning Service to identify and manage risks to ensure site is suitable for use Part 3 of WCLO 97 (pending) Identify and remove risks & return damaged land to beneficial use (where there is no change in landuse) Land affected by Contamination Voluntary remediation NIEA provide advice to managing risks and remediation of strategically important sites Environmental Liability Directive NIEA Regulate where land damage results in significant risk of adverse effects on health > 2009

Part III Part III of the Waste and Contaminated Land (Northern Ireland) Order 1997 Contains the main legal provisions for the introduction of a contaminated land regime in Northern Ireland. The aim of the regime is to deal with the legacy of historically contaminated land through the polluter pays principle. This will ensure that, where possible, those who pollute the land will pay for its remediation so that it is suitable for use. The Order was enacted in 1997 but Part III has not yet been commenced.

Illustration of Liability Bounce Back Under Part III of W&CL Order (and ELD), liability can bounce back to previous owners / funders Need to ensure that transaction is secured or safe to prevent future liabilities

How many contaminated sites in Northern Ireland?

Estimated > 13,000 potentially contaminated sites in N.Ireland

Industry Standard Process Overview of Model Procedures (EA CLR 11) Stage 1: SI & Risk Assessment Stage 2: Corrective Action, feasibility & design Stage 3: Corrective Action, Implementation & aftercare If you are undertaking an assessment to support a Planning Application the NIEA / Local Council will require strict adherence to the above approach.

Tier 1 - Preliminary Risk Assessment Site History - previous and current use Geology, Hydrogeology, Hydrology EPA and Council records and registers Data from previous investigations Anecdotal Information Site Walkover Conceptual Model (potential contaminants, receptors, pathways, site characteristics possible relationships Pollutant Linkages)

Get into the driving seat by: Develop a preliminary site conceptual model Undertake Preliminary Risk Assessment (EA (UK) & CIRIA Guidelines) Design Site Investigation (or justify if none required) Site History

What Are The Issues?

Site Walkover Possible asbestos in building Evidence of underground tanks Ventilation possible use of volatile compounds such as solvents Subsidence indicating poor quality fill Cracks in car park Potential for infiltration of contaminants

Tier 2 Site Investigation & Generic Site Risk Assessment

Tier 2 Site Investigation & Generic Site Risk Assessment Ing estion, Ab sorption, & Inhalation from Surficial So ils Inh alation of Am bient Vapors & Particulates Inh alation of Ind oor Vapors Surface Source Ingestion of Potab le Water Subsurface Source Vapor Intrusion Leaching/ Perco lation Fish Groundw ater Transport Groundw ater Migration Fish Larvae Shellfish

REMEDIAL STRATEGY / DESIGN 1) Identifying feasible remediation options for each relevant pollutant linkage; 2) Carrying out a detailed evaluation of feasible remediation options to identify the most appropriate option for any particular linkage; 3) Producing a remediation strategy that addresses all relevant pollution linkages, where appropriate by combining remediation options. 4) Apply to NIEA for MTL (where relevant) and then implement works upon approval If contamination is identified on a site as part of a pre planning assessment a remediation strategy is generally the minimum stage the consultees will require to enable placing negative conditions.

What Remediation Options are there? Source Removal (Dig & Dump)

What Remediation Options are there? Physical Barriers Capping Layer, Belfast Gas membrane

What Remediation Options are there? Bioremediation / Chemical Oxidation Soil Bioremediation, Maze Site Groundwater Bioremediation Co. Down

What Remediation Options are there? Groundwater Treatment / Air Sparging

What Remediation Options are there? Long Term Monitoring - MNA Belfast

Environmental Due Diligence COST IMPLICATIONS/ IMPACT ON LAND VALUES MANAGING TRANSACTION AND LIABILITY

COST IMPLICATIONS FOR REMEDIATING BROWNFIELD SITES Remedial costs and monitoring Effects on Programming Litigation costs Insurances Waste Soil Disposal Risk Identification Clean-up Costs Legal Compliance Indemnities and warranties Safety Implications Turning Liability into Asset Increased cost of finance Construction Costs Land Use Market Perception Changes to development design Liabilities to third parties

SUGGESTED TEMPORAL CHANGES IN VALUE CAUSED BY LAND CONTAMINATION & WHEN TO BUY / SELL Value 1 Optimal sellers price 6 4 5 well managed transaction price KEY : 1-2 Effect of the discovery of the contamination 2 3 2-3 Delay before site investigation works are completed ( worst case cost assumed) 3-4 Effect of completion of site investigation works ( SI & risk assessment give definitive remediation costs) 4-5 Delay before remedial works are completed Optimal buyers price 5-6 Effect of completion of remedial works ( upon completion of remediation and regulator sign off land prices recover) (Source: A Brown and Pleasant Land) Time

Types of Land Transaction and Corresponding Risk Categories Type of Land Transaction Risk Category Sold as seen with no information (buyer beware) Sold with information but without a specifically identified discount for contamination Sold with information but with a specifically identified discount for contamination based on site investigation by a knowledgeable buyer As above but with a indemnity given by the buyer to the seller As above but an environmental insurance policy As above but with a limited parent company guarantee As above but with an unlimited parent company guarantee HIGH RISK TRANSACTION CONTROLLED TRANSACTION CONTROLLED TRANSACTION SECURED TRANSACTION SECURED TRANSACTION SAFE TRANSACTION SAFE TRANSACTION Source: Nicole: Environmental Liability Transfer in Europe: Divestment of Contaminated Land for Brownfield Regeneration 2011

EXAMPLE OF CONCEPTUAL LIABILITY MODEL The liable party might be: The original polluter; or The successor in title to the land polluted by the original polluter. Another party to whom liability has been transferred, potentially including consultants, contractors, insurance companies, funders or a specialist liability vehicle. The Conceptual Liability Model can be considered as the collection of liability linkages or the site.

Professions that can be Liable? Management of client s estate or property ( surveyors) - direct liability for environmental offence or negligent advice resulting in client being liable for environmental offence, remediation costs or common law damages Valuations of property / Company ( surveyors / accountants)- negligent advice resulting in incorrect valuation of property/company due to contamination or env. liabilities Agency / legal - negligent advice resulting in client inadvertently becoming liable due to acquisition of freehold or leasehold interest in contaminated property due to inadequate due diligence or in client retaining remediation liabilities when disposing of contaminated land Receiver / Liquidator - potential to retain liability Class B persons under Part 3 or by not maintaining env management of an operational site under ELD. Banks/Lenders Impact on site value but also may retain environmental liability of property during and post sale. Brokers providing incorrect advice on insurance cover Environmental Consultants providing negligent advice

Remediation Tax Relief Finance Act 2001 The introduction of tax credits for the remediation of contaminated land in the 2001 Finance Act offers some significant financial benefits to owners of contaminated sites as well as developers, so long as they did not cause the contamination themselves. The qualifying land remediation expenditure must relate to any estate, interest or right in or over land acquired by the company for the purposes of a Schedule A business or trade carried on by the company. The Finance Act, 2001, offers property developers &/or owners a 150% Tax Credit for the costs of cleaning up the land. Therefore, should you pay Corporation Tax at 30%, you could get 45% of your remediation expenditure ( can incl. consultancy, earthworks etc.) back depending upon your financial status

CASE STUDIES

Case Study 1: Former Gasworks, N. Ireland WYG Environment part of the WYG group

CASE STUDY 2: FORMER LANDFILL SITE CO. ANTRIM

CASE STUDY 3: PFS North Coast CONTROLLED TRANSACTION Sold with information but with a specifically identified discount for contamination based on site investigation by a knowledgeable buyer

PR Management becoming more of a consideration

In Summary 1. Prior to disposing or acquiring Land undertake appropriate Environmental Due Diligence The more information you have the higher level of surety on costs. 2. Ensure that you have appropriate professional support to determine abnormal development and accurate remedial costs. 3. Be pro-active at the outset of projects to ensure you are in the driving seat. If you are submitting a planning application get the consultant in early in the process to assist masterplan layout, the earlier in the process generally the more cost effective the solution. 4. Develop a transaction strategy and implement/manage to minimise current and potential longer term / legacy risks 5. Environmental liabilities are impacting land values currently, however due to a lack of due diligence during the boom years and new legislation there is a legacy of environmental liabilities in NI that are materialising going forward. Be a knowledgeable buyer / seller / Advisor / developer!

ENVIRONMENTAL SITE CHECK REPORT WYG have developed a low cost site check report similar to what is available in GB to provide a quick, preliminary environmental assessment of sites for the surveyor, legal and financial sectors.

THANK YOU Alan Dew MCIWEM C.WEM CEnv Senior Geo-Environmental Scientist WYG Tel: 02890706000 Email: alan.dew@wyg.com