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Mayer Parry Recycling Ltd v. Environment Agency [1998] EWHC Ch 286 (9th November, 1998)
CH 1997 M No. 2722
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before: THE HON. MR. JUSTICE CARNWATH
B E T W E E N
MAYER PARRY RECYCLING LTD |
Plaintiff |
|
- and - |
||
THE ENVIRONMENT AGENCY |
Defendant |
Mr Anthony Scrivener QC and Mr John Whittaker instructed by Cameron McKenna for the Plaintiff
Professor Derrick Wyatt QC and Mr Mark Hoskins instructed by The Environment Agency for the Defendant
Hearing dates: 5th October 1998 to 7th October 1998
JUDGMENT
| This is the official judgment of the court and I direct that no further note or transcript be made |
DATED: Monday 9th November 1998
The Hon. Mr Justice Carnwath
Introduction
1) Mayer Parry ("MPR") is one of the largest scrap metal merchants in the UK. Its turnover in 1995 exceeded £175m. It is part of the Co-Steel group of steel manufacturing companies. It operates from 19 sites in the UK, of which 17 process scrap metal, the other two being dockside sites handling exports. One of the largest is a 9 acre site at Erith. A summary of the evidence relating to the scrap industry generally, and to MPR's operations, is given in appendix 1 to this judgment.
2) The Defendant is the Environment Agency, established by Part I of the Environment Act 1995. It is (since 1 April 1996) the body responsible for the issuing and enforcement of waste management licences under Part II of the Environmental Protection Act 1990; and is the competent authority of dispatch and destination in the UK in relation to the transfrontier shipment of waste.
3) The dispute between MPR and the Environment Agency (the "Agency") concerns the scope of the definition of "waste" in the Waste Management Regulations 1994 (the "WMR"). They give effect in the UK to the EEC Waste Framework Directive (the "WFD") - that is, Directive 75/442 of 15th July 1975, as amended by Directive 91/156 of 18th March 1991. The WMR introduced into English law from the WFD the concept of "Directive waste".
4) For practical purposes, the principal significance of a finding whether material handled by MPR at various stages is "waste" is in determining whether or to what extent it requires a waste management licence (under section 33 of the Environment Protection Act 1990). (MPR has in fact applied for and obtained a licence without prejudice to its contentions in this case.) It is also relevant to the application of statutory regimes governing transportation, export and brokerage of waste, as well as to the "duty of care" applying to those handling "waste" (under s 33 of the 1990 Act). Although the statutory regime covering such matters is complex, and much of it predates the WMR, it is common ground that (by virtue of various amending regulations) the same definition of "Directive waste" applies throughout. It is unnecessary therefore to consider the various statutory provisions in any detail.
5) In one respect, I am concerned with an issue of pure European law, since EC Regulation 259/93, which governs exports of waste, has direct effect. Since it adopts the same WFD definition of waste, the issue is in practice identical. Neither side has suggested that I should refer it to the European Court.
Procedure
6) The proceedings were commenced by originating summons dated 15th May 1997. The amended summons (15th January 1998) seeks declarations in relation to different categories of scrap metal. They are defined in paragraphs 1.1-11 (material received by MPR); 2 (material transported by MPR); 3 (material bought and sold as broker); 4.1-4 (product despatched by MPR); and 5 (product exported from the EC). The proposed declarations are reproduced in Appendix 2 to this judgment. They are drafted, as I understand, with a view to testing different criteria which might be considered relevant to the definition of waste, in relation to the various categories handled by MPR.
7) During the course of argument Mr Scrivener submitted for consideration a draft revised set of declarations, comprising 8 detailed paragraphs incorporating by reference the evidence of MPR an its suppliers, and one more general paragraph in the following terms:
"A declaration that scrap metal falling within Part II of Schedule 4 to the Waste Management Licensing Regulations 1994 is not Directive Waste merely because it is subjected to, or is intended to be subjected to, a recovery operation within the meaning of Part IV of the said Schedule 4."
8) The Agency wishes to reserve its position as to whether the Originating Summons procedure, as opposed to judicial review, would be appropriate in other cases. However, it takes no point in this case, having regard to the flexible approach advocated by the Court of Appeal in R v. Sheffield City Council ex p Dennis Rye [1997] 4 All ER 747.
9) I agree that no objection should be taken to the originating summons procedure in this case. There is no doubt that MPR is entitled in principle to seek the determination of the Courts as to the status of its activities under a statutory regime such as this (see Pyx Granite v MHLG [1960] AC 260). There is nothing in the legislation which reserves such questions to any other tribunal, or to the Secretary of State or the Environment Agency. If MPR had made an application for judicial review, leave would undoubtedly have been granted. The issues are serious issues of general importance. MPR made clear its objections to the Environment Agency's position in good time, and applied for a licence without prejudice to those objections. For practical purposes the procedure in judicial review would have been substantially similar. Indeed the large volume of affidavit evidence (albeit largely uncontentious), and the fact that the Court is being asked to make primary findings of fact, argue if anything in favour of the originating summons procedure.
10) On the other hand, the detailed and somewhat indigestible form of the proposed declarations does raise questions as to the degree of refinement with which it is possible or appropriate for the Court to formulate its determinations in such a case. The procedure is generally better suited to resolving issues of law or principle, rather than drawing narrow factual distinctions depending on detailed technical evidence. The Court must also be careful to avoid pre-empting decisions more properly taken in criminal or other enforcement proceedings relating to specific facts (cf Imperial Tobacco v A-G [1981] AC 718, 741-2). The Court must also be satisfied as to the practical utility of what it is asked to declare. Difficult borderline issues may be better left to resolution by agreement, having regard to the flexibility which is inherent in any enforcement system (see, e.g., my comments in R -v- The Environment Agency ex parte Dockgrange [1998] JER 146, 153-4). Furthermore, where one is dealing with a large undertaking carrying on a range of activities, many of which are agreed to involve the handling of waste, precise lines of demarcation may not be possible or necessary. If the activities are all carried on within the same undertaking, a licence is likely to be required, even if some individual activities would not qualify on their own. It was suggested for MPR that, once the dividing line between waste and non-waste had been clearly established, it might be feasible, and economically desirable, for the activities not requiring a licence to be managed separately. In a straightforward case, perhaps, it might be appropriate to grant a declaration to enable a commercial organisation to re-organise its affairs more economically (see e.g. Cinzano UK -v- Commissioners of Customs & Excise [1985] 1WLR 484). However, it remains speculative, on the evidence in the present case, to what extent declarations formulated to the degree of precision proposed by the originating summons would be of practical value.
11) I propose therefore to examine the issues as questions of general principle, and then to consider to what extent it is possible or appropriate to formulate detailed declarations to give effect to my conclusions.
The definition of waste
12) It is common ground, for the purposes of this case, that the definition of waste as applied by the WMR is identical in effect to that in the WFD. Since the relevant European cases refer to the WFD, it will be convenient to confine references in this judgment to the WFD (with an indication, where relevant, of the corresponding provisions in the WMR). I shall refer to the WFD as amended by Directive 91/156/EEC (and with Annex IIB in its form as re-ordered by Decision 96/350/EC).
13) Article 1 (cf WMR Art 1(3)) provides:-
"(a) 'waste' shall mean any substance or object in the categories set out in Annex I which the holder discards or intends or is required to discard.
The Commission, acting in accordance with the procedure laid down in Article 18, will draw up, not later than 1 April 1993, a list of wastes belonging to the categories listed in Annex 1. This list will be periodically reviewed and, if necessary, revised by the same procedure;
(b) 'producer' shall mean anyone whose activities produce waste ('original producer') and/or anyone who carries out pre-processing, mixing or other operations resulting in a change in the nature or composition of this waste;
(c) 'holder' shall mean the producer of the waste or the natural or legal person who is in possession of it;
(d) 'management' shall mean the collection, transport, recovery and disposal of waste, including the supervision of such operations and after-care of disposal sites;
(e) 'disposal' shall mean any of the operations provided for in Annex IIA;
(f) 'recovery' shall mean any of the operations provided for in Annex IIB.
(g) 'collection' shall mean the gathering, sorting and/or mixing of waste for the purpose of transport".
14) Annex I (cf WMR Part II) is entitled CATEGORIES OF WASTE. It lists a number of specific categories (e.g. Production residues, off-specification products, unusable parts, machine finishing residues, products for which the holder has no further use), and a general residual category ("any materials, substances or products which are not contained in the above categories").
15) Further guidance on categories of "waste" for these purposes is found in the so-called "European Waste Catalogue" (Commission Decision of 20 December 1993, pursuant to Article 1(a) of the WDA). The Annex to the Decision includes:
(i) Under the heading WASTE NOT OTHERWISE SPECIFIED IN THE CATALOGUE:-
end of life vehicles discarded vehicles discarded equipment and shredder residues off-specification batches inorganic off-specification batches
(ii) Under the heading CONSTRUCTION AND DEMOLITION WASTE (INCLUDING ROAD CONSTRUCTION):-
metals (including their alloys) copper, bronze, brass, aluminium, lead, zinc, iron and steel, mixed metals, cables, mixed construction and demolition waste.
16) Annex IIA of the Directive (cf WMR Part III) is entitled DISPOSAL OPERATIONS. There is an annotation to the heading, which reads:
"This Annex is intended to list disposal operations such as they occur in practice. In accordance with Article 4 waste must be disposed of without endangering human health and without the use of processes or methods likely to harm the environment"
There is a list of operations (including such activities as "tipping above or underground", "release into seas/oceans..."), generally concerned with the final disposal of the wastes in question, or its handling pending such disposal.
17) Annex IIB (cf WMR Part IV) is entitled RECOVERY OPERATIONS. There is an annotation to the heading, which reads:
"This Annex is intended to list recovery operations as they are carried out in practice. In accordance with Article 4 waste must be recovered without endangering human health and without the use of processes or methods likely to harm the environment"
There is a list of operations concerned with reclamation or recycling of different types of waste. One category comprises "Recycling/reclamation of metals and metal compounds" (R4). Some categories are not in terms confined to waste treatment (e.g. R1 - "Use principally as a fuel...").
18) Since the issue concerns only the definition of waste, it is unnecessary to refer in detail to the other parts of the Directive, save by way of context. The preamble makes clear the general purpose of the Directive, which is directed at achieving "a higher level of environmental protection". Specific objectives are to reduce the disparity between member states' laws on waste disposal and recovery, which "can affect the quality of the environment and interfere with the functioning of the internal market"; "to encourage the recycling of waste and re-use of waste as raw materials"; and to provide for authorisation and inspection of "undertakings which carry out waste disposal and recovery" in order to ensure "a high level of protection and effective control".
19) Article 4 imposes an obligation on member states to take -
"the necessary measures to ensure that waste is recovered or disposed of without endangering human health and without using processes or methods which could harm the environment...".
They are also required to take necessary measures to prohibit the abandonment, dumping or uncontrolled disposal of waste.
20) Article 5 provides for the establishment by member states of adequate networks of disposal installations. Article 6 requires member states to establish "competent authorities" responsible for implementation of the Directive. By Article 7, competent authorities are required to draw up waste management plans dealing inter alia with recovery and disposal of waste, and providing measures for "rationalisation of the collection, sorting and treatment of waste". Articles 9 and 10, subject to certain qualifications, require that any undertaking carrying out disposal or recovery operations must obtain a permit from the competent authority. Article 12 requires undertakings which "collect or transport waste on a professional basis", or which act as dealers or brokers for the disposal or recovery of waste, to be registered (if not otherwise subject to authorisation). Article 14 requires undertakings to which Articles 9 and 10 apply to keep records of the handling of waste including where relevant "the destination, frequency of collection, mode of transport and treatment method".
Interpretation of EC Directives
21) There is no dispute as to the proper approach to construction. EC Directives are construed in a purposive way, in the light of the manifest purpose and general scheme of the legislation. UK primary legislation and regulations implementing EC Directives are to be interpreted in the same purposive way, so as to accord with the interpretation of the Directive as laid down by the ECJ, if that can be done without distorting the meaning of the domestic legislation. In determining the purpose and scheme of a Directive, and to assist in interpretation, the Court may refer to the recitals.
22) Account has also to be taken of the fact that-
"Community legislation is drafted in several languages and that the different language versions are all equally authentic. An interpretation of a provision of Community law thus involves a comparison of the different language versions". (see Cilfit -v- Ministero della Sanità [1982] ECR 3415).
In the case of divergence between the different languages, the provision must be interpreted by reference to the purpose and general scheme of the rules of which it forms part (Rockfon [1995] ECR I - 4291 para 28).
The meaning of "waste"
23) The definition of "waste" in the WFD, and in particular the meaning (if any) to be given to the word "discard", has given rise to much controversy and academic debate. There is, for example, an illuminating discussion by Cheyne and Purdue in the 1994 Journal of Environmental Law p 149, which refers to other academic treatments of the subject. There is also a detailed and helpful discussion of the legal issues in the Department of Environment's Circular (11/94), issued at the time of the WMR. It is unnecessary to refer to this discussion in any detail, since, as will appear, it seems to me to have been largely overtaken by two recent decisions of the European Court (including detailed analysis of the issues by Advocate General Jacobs). Both were decided after the commencement of proceedings in the present case.
24) Before considering the judgments, however, and in deference to the discussion before me, I should refer briefly to the background of the use of the word "discard" and the comparisons offered to me with the French and Italian texts. (I have not been referred to any other language versions, although I note that Cheyne and Purdue refer in a footnote to possible ambiguity also in the German version - op cit p155.)
25) In the original 1975 version of the Directive, the English version contained the following definitions:
"1 (a) Waste means any substance or object which the holder disposes of or is required to dispose of pursuant to the provisions of national law in force;
(b) Disposal means:-
-the collection, sorting, transport and treatment of waste as well as its storage and tipping above or underground
- the transformation operations necessary for its re-use, recovery or recycling".
Thus the term "dispose" or "disposal" was used in both parts of the definition - in the latter part, to cover both final disposal and recovery. There was no list of typical waste products (comparable to Annex I of the revised Directive). Member states had a general duty to ensure that waste was "disposed of" without harm (Article 4).
26) In the French text the term for waste was "déchets". In place of "disposal", two different terms were used in paragraph (a) and (b) respectively. Waste was defined as meaning substances "dont le detenteur se défait..."; while in (b) the equivalent term was "élimination". Similarly, in Article 4 the duty was to ensure that wastes would be "éliminés" without harm. The Italian text used similar terminology to the French. In (a) the corresponding verb was "disfarsi di"; the term used in (b), corresponding to "disposal" and "élimination", was "smaltimento". The duty in Article 4 was to ensure that wastes would be "smaltiti" without harm.
27) In the amendments made in 1991 the language of the English text changed. In the basic definition of waste, the term "discard" was substituted for "dispose". Waste is now a substance in the categories listed in Annex I which the holder "discards". The word "disposal" is retained, but used solely for operations provided for in Annex IIA, that is final disposal. A new term, "recovery", is introduced to cover all forms of recycling. The duty in Article 4 is to ensure that waste is "recovered or disposed of" without risk.
28) In the French text, there is no equivalent change to the basic definition, which still uses the term "se défaire de". The term "élimination", like the term "disposal" in the English text, is used to describe the Annex IIA operations, and the term "valorisation" is introduced for recovery operations in Annex IIB. The Article 4 duty becomes to ensure that wastes are "valorisés ou éliminés" without risks. Similarly, the Italian text retains the verb "disfarsi di" in the basic definition, and "smaltimento" to describe the Annex IIA operations; it introduces the word "ricupero" for Annex IIB operations, and the Article 4 duty is correspondingly adjusted.
29) The Italian version is perhaps of particular interest, because Italian does have an etymological equivalent of "discard", in the word "scartare". One finds that reflected in one of the categories of waste (Annex I Q14), which in the English version refers to "commercial and shop discards" and in the Italian refers to articles "messi fra gli scarti..." (The French version has "mis au rebut"). In Article 1(a), however, the Italian text follows the French rather than the English.
30) The attention given to this part of the definition of "waste" implies that some importance was attached to it by the draftsmen. It was an apparent weakness of the 1975 English version that it used the same word - "dispose" or "disposal" - in both parts of Article 1, where the French and Italian texts used different words. However, the substitution of the word "discard" in the English version created its own problems. "Discard" has a more negative connotation than the word "disposal". The Concise Oxford Dictionary defines "discard" as "reject or get rid of as unwanted or superfluous". "Dispose of" is more neutral, encompassing (according to the same dictionary) both "getting rid of" and "selling". (See the discussion in Cheyne and Purdue ibid). As far as one can judge from the relevant dictionaries, the terms "se défaire" and "disfarsi" have a meaning somewhere between "discard" and "dispose of". The nearest English equivalent may be "get rid of". The draftsman perhaps felt that the use of the term "get rid of" in Article IA would have been awkward grammatically. In any event, having regard to the interpretation principles to which I have referred, it would be wrong to attach too much weight to the specific connotations of the ordinary English usage of the word "discard" without regard to the background and the other language versions.
ECJ decisions
31) Two recent decisions of the European Court, and the opinions of Advocate-General Jacobs in each of them, have been central to the argument in this case. They are the case of Criminal proceedings against Euro Tombesi and others [1997] ECR 1 - 3561 ("the Tombesi case"), and Inter-Environnement Wallonie -v- Région Wallonne [1997] ECR I-7411 ("the Wallonne case"). Judgment in the first case was given on 25th June 1997, and in the second on 18th December 1997.
32) The Tombesi case concerned questions referred by an Italian court in connection with four sets of criminal proceedings for various offences concerned with waste. The questions referred by the Court were:
"(1) Does the EEC legislation provide for the exclusion from the definition of waste and the relevant rules relating to the protection of health and of the environment of substances and objects which are capable of economic re-utilisation?
(2) Does the concept of waste arising out of (the relevant Directives) cover any substance which the addressee [discards], has decided to [discard] or is under a duty to [discard], regardless of the fact that the substance to be re-utilised may be the subject of a legal transaction or quoted on public or private commercial lists?"
(I have substituted "discard" in the square brackets, in place of "dispose of" which is incorrectly used in the English version of the judgment.)
33) A detailed discussion of the legal issues is found in the opinion of the Advocate-General. He considered the problem of interpretation in detail at paragraphs 50 to 56 of his opinion. Since these provide the essential background to the consideration by the European Court in this and the subsequent case, I have reproduced them in an appendix to this judgment (appendix 3). The Court had before it written observations from a number of member states, including the UK Government and the Commission, and these were reviewed in the opinion.
34) What emerges from the discussion is the difficulty that has been found throughout the Community in interpreting the definition of waste, particularly as applied to residues or by-products from production processes which are suitable for recycling. The Advocate-General took the view that -
"... little is to be gained by considering the normal meaning of the term 'discard', which should be taken as having a special meaning encompassing both the disposal of waste and its consignment to a recovery operation." (para 50)
He noted the problem that the concept of a "recovery operation" is not exhaustively defined, but suggested that the solution is -
"... not to seek to lay down a comprehensive definition but to work by example, in other words examine whether the holder of an object or substance consigns or intends to consign it to one of the operations listed in Annex IIB or to an analogous operation." (para 55)
This he saw as being largely a matter for the member states:
"As the Directive stands at present, I think it must to some extent be left to member states to develop more detailed criteria to apply the term 'recovery operation' to the various situations which may occur in practice. Such an approach is consistent with the division of responsibilities between the Court and the national courts under the Treaty. It is for the national courts to apply the Directive to the facts of a potentially large number of borderline cases which may arise in practice." (para 56)
35) The Court dealt with the issues shortly. It did not, at this stage at least, expressly adopt the Advocate-General's reasoning. The Court referred to "settled case law," which made clear that the concept of waste in the Directive in its original version -
"was not to be understood as excluding substances and objects which were capable of economic re-utilisation",
and confirmed that in this respect that interpretation had not been affected by the 1991 amendments (paras 47-8). It referred to the provisions of the Directive, as amended, providing for the control of the recovery or disposal of waste and said:
"It follows that the system of supervision and control established by Directive 75/442, as amended, is intended to cover all objects and substances discarded by their owners, even if they have a commercial value and are collected on a commercial basis for recycling, reclamation or re-use." (para 52).
(One notes that the word "discard" is used without qualification, and without reference to the "special meaning" proposed by the Advocate General). The answer to the question posed by the Italian court was that the concept of waste under the Directive -
"... is not to be understood as excluding substances and objects which are capable of economic re-utilisation, even if the materials in question may be the subject of a transaction or quoted on public or private commercial lists."
36) The Wallonne case concerned proceedings brought by a non-profit making association for the annulment of an order of the Wallonne Regional Executive on toxic waste. Only the second question referred to the Court is relevant to the present discussion. That was in these terms:
"Is a substance referred to in Annex I (to the 1991 Directive) and which directly or indirectly forms an integral part of an industrial production process to be considered 'waste' within the meaning of Article 1A of that Directive?"
37) In his Opinion (which was delivered on 24th April 1997, before the judgment of the Court in the Tombesi case) the Advocate-General reverted to the discussion in that case. He referred to the lists of wastes in Annex I and the Waste Catalogue (paras 58-9). He commented:
"As I noted in my opinion in Tombesi, it is clear from the provision of the Directive, in particular Article 4, Articles 8 to 12 and Annexes IIA and B, that the term 'discard' employed in the definition of waste in Article 1A has a special meaning encompassing not only the disposal of waste but also its consignment to a recovery operation" (para 60).
He observed that there was nothing in the Directive to suggest that its scope was limited to operations not forming an integral part of an industrial process. Rather, having regard to the lists in Annex I and 2A and B -
"... the notion of waste is sufficiently broad to cover all kinds of industrial residues, by-products and other materials resulting from production processes." (para 61)
38) He referred to the arguments of the various national governments, including the United Kingdom, and also the practice of the OECD countries, as explained in a survey of their law and practice produced by the German Government. The Advocate-General noted the "considerable common ground" between the position in the different countries, and he referred to a list of some 17 criteria mentioned in the survey as being used in the member countries. He referred to -
"a general consensus that, where a secondary raw material or residue can be used directly for further process, possibly as a substitute for a primary raw material, it is unlikely to constitute waste. It will on the other hand constitute waste if it must first undergo a recovery process." (para 78)
He referred also to -
"a general consensus among OECD countries that it is relevant to consider whether the use of a residual product or by-product as a substitute for another material or ingredient is as environmentally sound as that of the material or ingredient which it is replacing; in other words, whether it complies with the same standards, regulations and specifications as those applicable to that product...." (para 79)
This led him to his general conclusion expressed as follows:
"I conclude therefore that the mere fact that a disposal or recovery operation within the meaning of the Directive is carried out as part of an industrial process does not remove it from the scope of the Directive. For the purpose of distinguishing between waste recovery and processing of non-waste materials it is relevant to consider whether a substance is destined to be put directly to continued use in its existing form. In the case of residues, by-products, secondary raw materials or other materials resulting from industrial processes, that condition is fulfilled where the material, or the process to which it is destined to be put, meets normal health and environmental requirements applicable to non-waste products or processes."
39) The Court treated the referred question as in effect asking whether a substance is excluded from the definition of waste -
"merely because it directly or indirectly forms an integral part of an industrial production process";
It answered that question in the negative. The reasoning is set out in paragraphs 26 to 33, which I cite in full:
"26 First of all, it follows from the wording of Article 1(a) of Directive 75/442, as amended, that the scope of the term 'waste' turns on the meaning of the term 'discard'.
27 It is also clear from the provisions of Directive 75/442, as amended, in particular from Article 4, Articles 8 to 12 and Annexes IIA and IIB, that the term 'discard' covers both disposal and recovery of a substance or object.
28 As the Advocate General has pointed out in Paragraphs 58 to 61 of his Opinion, the list of categories of waste in Annex I to Directive 75/442, as amended, and the disposal and recovery operations listed in Annexes IIA and IIB to that directive demonstrate that the concept of waste does not in principle exclude any kind of residue, industrial by-product or other substance arising from production processes. This finding is further supported by the list of wastes drawn up by the Commission in Decision 94/3.
29 First, Directive 75/442, as amended, applies, as is apparent in particular from Articles 9 to 11, not only to disposal and recovery of waste by specialist undertakings, but also to disposal and recovery of waste by the undertakings which produced them, at the place of production.
30 Second, while Article 4 of Directive 75/442, as amended, provides that waste is to be recovered or disposed of without endangering human health or using processes or methods which could harm the environment, there is nothing in that directive to indicate that it does not apply to disposal or recovery operations forming part of an industrial process where they do not appear to constitute a danger to human health or the environment.
31 Finally, it should be borne in mind that the Court has already held that the definition of waste in Article 1 of Directive 75/442, as amended, is not to be understood as excluding substances and objects which were capable of economic reutilization.
32 It follows from all those considerations that substances forming part of an industrial process may constitute waste within the meaning of Article 1(a) of Directive 75/442, as amended.
33. That conclusion does not undermine the distinction which must be drawn, as the Belgian, German, Netherlands and United Kingdom Governments have correctly submitted, between waste recovery within the meaning of Directive 75/442, as amended, and normal industrial treatment of products which are not waste, no matter how difficult that distinction may be."
40) This judgment moves much closer than the Tombesi judgment to express adoption of the Advocate General's approach. Although it does not discuss the OECD practice in detail, it affirms the need to distinguish between "waste recovery" and "normal industrial treatment of products which are not waste", notwithstanding the difficulties of drawing the distinction. It refers with apparent approval to paragraphs 58 to 61 of the Opinion, which appears to imply approval of paragraph 50 of the earlier opinion (referred to in para 60), and its proposal of a "special meaning" for "discard". It adopts in terms the view that "discard covers both disposal and recovery of a substance or object".
41) Mr Scrivener suggested that the word "covers" there simply means "is capable of applying to"; so that "discard" may include both disposal and recovery operations, but is not necessarily co-extensive with them. However, I find it difficult to read the paragraph as doing other than repeating the effects of the Advocate General's reference (in para 50) to a special meaning "encompassing not only the disposal of waste but also its consignment to a recovery operation". The Court had indicated in the previous paragraph that the scope of the term waste "turns on the meaning of the term discard"; it must therefore be assumed that it was intending to explain that meaning. I note also that in the French text the word "covers" is expressed by the word "englobe", which, like the word "encompasses", suggests (even more clearly than the word "covers") a description intended to be all-embracing.
Discussion
42) The difference between the parties can be summarised shortly. The Agency follows the Advocate General in putting the emphasis not on the term "discard", but on the description in Annex IIB of recovery operations. In this case the relevant category is "recycling/reclamation of metals and metal compounds". The Agency considers that this category covers all operations which have the purpose of making the metal content of substances or objects re-usable as a raw material (including any measures which have the purpose of ensuring that that metal content is re-usable without threat to public health or the environment). It contends accordingly that the category covers all the processes of MPR, including sorting, separating, fragmentising, cutting, shearing, crushing, compressing and baling.
43) It agrees on the other hand that scrap metal which can be used as feedstock in a furnace without any further processing is a raw material which is not destined for a recovery operation, and that accordingly it is not waste. Furthermore, it accepts that processing solely for economic or grading reasons, as described in paragraph 8 of Mr Crowe's second affidavit (see Appendix 1 para 23), does not constitute a recovery operation, and therefore that materials subject to such processing are not for that reason alone to be treated as waste.
44) MPR by contrast treat the concept of "discarding" as central to the interpretation of the Directive. In their submission it means "get rid of or dispose of as unwanted and not needed". To determine whether the definition applies in any particular case it is necessary -
"... to look at all the facts in order to determine whether a discarding intention is reasonably and on objective appraisal of the surrounding circumstances to be attributed to the disposal."
They accept that the mere fact that material is sold for value to MPR does not exclude it from the definition of waste, but they ask me to find as a fact, in each of the cases referred to in the evidence, that the sale of the material is not simply discarding something unwanted (albeit for value), but that it is being dealt with in "the mainstream of the commercial recycling industry", and as "an integral part of the principal businesses on both supply and receipt sides."
45) MPR's approach would have more force, if it were possible to approach the issue as purely a matter of construction of the UK regulations. However, in the light of the linguistic considerations considered above, and of the recent judgments of the European Court, I have to conclude that the Environment Agency's approach is in principle correct.
46) The general concept is now reasonably clear. The term "discard" is used in a broad sense equivalent to "get rid of"; but it is coloured by the examples of waste given in Annex I and the Waste Catalogue, which indicate that it is concerned generally with materials which have ceased to be required for their original purpose, normally because they are unsuitable, unwanted or surplus to requirements. That broad category is however limited by the context, which shows that the purpose is to control disposal and recovery of such materials. Accordingly, materials which are to be re-used (rather than finally disposed of), but which do not require any recovery operation before being put to their new use, are not treated as waste. Similarly, materials which are made ready for re-use by a recovery operation, cease to be waste when the recovery operation is complete.
47) Turning to the facts of this case, all the materials referred to in the evidence are potentially within the definition of waste, in the sense that they are "got rid of" by their original users, because they are not wanted or needed for their original purpose. Thus, manufacturers get rid of surplus material, such as borings and offcuts, because they are not needed for their primary product; materials in a building about to be demolished are no longer needed by the original owner; and the vehicle dismantler handles cars which have reached the end of their useful life for their original purpose.
48) Accordingly, the issue in this case turns on the scope of the term "recovery". Insofar as the discarded materials do not require any recovery operation, as the Agency concedes, they are not treated as waste at all. Insofar as they do require recovery operations, they remain waste until those recovery operations are complete.
49) The difficulty at this point is in drawing a clear line between the recovery operations, and the industrial operations for which the recycled scrap is to be used as a raw material. The Court in the Wallonne case affirmed the need to draw such a distinction but recognised the difficulty of doing so. Circular 11/94 tackles the problem by using the concept of "a specialised recovery operation", defined as -
"... an operation listed in (annex IIB) which either re-uses substances or objects which are waste because they have fallen out of the normal commercial cycle or chain of utility; or recycles them in a way which eliminates or diminishes sufficiently the threat posed by their original production as waste and produces a raw material which can be use in the same way as raw material of non-waste origin." (Para 2.31).
Accordingly, a material ceases to be waste -
"... when its processing produces a material of sufficient beneficial use to eliminate or diminish sufficiently the threat posed by the original production of waste. This will generally take place when the recovered material can be used as raw material in the same way as raw materials of non-waste origin by a person other than a specialised recovery establishment or undertaking." (para 2.47).
The term "normal commercial cycle" is there used in contra-distinction to -
"... the commercial cycle which exists for the purpose of collecting, transporting, storing, recovering and disposing of waste" (para 2.15).
50) This guidance seems to me in line with the approach of the European Court. However, I do not find it necessary to explore it in detail in the context of the present case. What is clear from the terms of the Directive (Annex IIB R4) is that one form of "recovery operation" is "recycling or reclamation of metals and metal compounds". (It was not argued that other language versions differed materially in this respect. For example, the French text has "recyclage ou récupération des metaux..."). Accordingly, so long as the materials continue to be subject to any process falling within that description they remain waste for the purpose of the definition.
51) MPR is part of an industry which, in Mr Crowe's words, "exists to recycle scrap metal, so that the metal content may be used in the manufacture of new products." Thus, "recycling/reclamation of metals" (in terms of Annex IIB) is MPR's business; the presumption, accordingly, must be that all the operations which form part of that business - from sorting to fragmentising - are recovery operations within the meaning of the directive. In particular, the mere fact that some operations do not in themselves have environmental implications is not a reason for excluding them from the definition (see Wallonne judgment para 30). Conversely, once MPR has restored the material to a form which is suitable for sale as raw material to steelworks or other manufacturers, the presumption is that the task of recovery is complete, and the material ceases to be waste.
The materials in dispute
52) Having reached that point in the discussion, it is appropriate to consider the individual categories of materials which are in issue. The parties have agreed that the materials referred to in the Summons may be considered under four categories:
(1) Ferrous and non-ferrous scrap metal requiring no further processing, but capable of being used as a feedstock for electric arc furnaces or otherwise for melting by producers of steel or other manufacturers without being subjected to any further recovery operation within the meaning of Annex IIB;
(2) Scrap metal destined for treatment or processing, including, in particular, sorting, separating, cutting, shearing, crushing, fragmentizing, compressing or baling, with a view to that scrap metal being used as a raw material for smelting.
(3) Scrap metal contaminated with oil and cutting fluids, which requires:
(a) (as regards non-ferrous scrap) to be dried in a swarf dryer before smelting, or to be smelted in a smelter equipped with an afterburner, or
(b) (in the case of ferrous and non-ferrous scrap) to be subject to special measures as regards its handling, storage or transport in order to protect public health or the environment.
(4) Loads of scrap containing small amounts of foreign matter:
(a) Loads of ferrous metal scrap comprising for the most part material within one or more of the above categories, but which also contain up to 5% foreign matter, being plastic, concrete, wood, soil, glass and rubber.
(b) Loads of non-ferrous metal scrap comprising for the most part material within one or more of the above categories, but which also contain up to 2% foreign matter, being plastic, concrete, wood, soil, glass and rubber.
53) The Agency considers that scrap metal in the first category is not waste; but that scrap metal in the other categories is waste, because in each case one or more recovery operations is involved. They are: in category (2), all the various forms of treatment or processing referred to; in (3)(a), treatment by drying of oily swarf in a swarf dryer, or by the use of an afterburner in a smelter to dispose of the oil and cutting fluid; in (3)(b), the special measures (for the protection of public health or the environment) required in the handling, storage and transport of scrap metal contaminated with oil or cutting fluid; in (4), the separation of potential furnace feed from the foreign material.
54) I agree with the Agency that, so long as recovery operations continue, the material continues to be waste. I also agree that all the recycling operations normally carried out by MPR (listed in category (2)) are recovery operations. The same applies to the operations carried out by specialists to which MPR sends particular categories of metals for further treatment (see Appendix 1 para 25(2)(3)). Category (4) is the subject-matter of proposed declarations 1.7 and 1.11 (Appendix 2). The supporting evidence (Appendix 1 para 24) shows that it is directed solely to materials which are sold to MPR in accordance with a prescribed specification and that such a tolerance is allowed only on "isolated" occasions. It does not appear, therefore, to be an issue of sufficient practical importance to justify a specific determination. In principle, I would agree with the Agency, that sorting by MPR to remove impurities is a recovery operation, and that the material so treated is waste.
55) Where I think there is more room for argument is when one is considering operations carried out after the material has been restored by MPR to a form which is acceptable to the end-user or is transported direct from the supplier in such a form. Does the mere factor that the manufacturer requires to incorporate special measures into his processes to deal with contamination mean that he is carrying out a recovery operation?
56) Under category (3)(a), measures used by manufacturers for dealing with oil contamination, such as swarf dryers, are often "operated by companies as an integrated part of their foundry operations" (in Mr Terry's words). Arguably, therefore, if one is drawing the difficult distinction required by the European Court between "waste recovery" and "normal industrial treatment" (Wallonne para 33), they could be said to fall on the latter side of the line. The mere fact that they have environmental implications does not distinguish them from the many other industrial processes which have such effects, and are regulated under other legislation. Similarly, under (3)(b), special measures may be required during the handling and transport of such material to the manufacturer, and they may be a proper subject for regulation; but such measures would not naturally be described, in themselves, as "recovery operations".
57) I do not think there can be a wholly logical resolution of this issues. As the Advocate General advised, it is necessary to interpret the word waste "broadly in the light of the objective of ensuring a high level of environmental protection" (Wallonne para 56). Following that approach, he concluded that, where one is dealing with operations forming part of an industrial process, a relevant test is whether -
"... the material or the process to which it is destined to be put, meets normal health and environmental requirements applicable to non-waste products or processes"
This formulation itself raises a number of questions. However, it lends general support to the Agency's view that operations in category (3)(a) should be regarded as recovery operations, even though forming part of an industrial process, and that materials subjected to such operations are waste. I would agree with this view. By the same token, under (3)(b), although I would not agree that the mere handling or transport of materials is in itself a recovery operation, I accept the Agency's view that, so long as the materials so handled or transported are destined for an operation in category (3)(a), they continue to be waste.
58) Another related question, which is not directly raised by the Originating Summons, is the extent to which any sorting carried out by a manufacturer after delivery is to be regarded as a recovery operation. The Agency accepts that some forms of sorting, described as "economic" (see Appendix 1 para 23), are not recovery operations. The distinction, as I understand the Agency's submissions, is that in the category so described all the materials have already been restored to some re-usable form prior to sorting; by contrast, where the purpose of sorting is to separate non re-usable material (for disposal) from re-usable material (for re-use), a recovery operation is involved.
59) This appears to me an acceptable basis of distinction in most cases, but it may not be a complete answer. For example, there is evidence that on occasions manufacturers may accept loads containing small amounts of non-hazardous foreign material, and make an appropriate adjustment to the weight allowed (Appendix 1, paras 26 and 27). I would not necessarily accept that merely, because a very small amount of unusable material is separated and disposed of at that stage, the whole load is to be treated as waste. There must be a level at which such an operation can be regarded as de minimis (that is, immaterial in legal terms).
60) A different category of sorting operation is that of "mixed heavy metals" after export (see Appendix 1 para 25). It is not clear from the evidence to what extent there is an issue as to the treatment of such material. As I understand the evidence of Mr Bevan (of MPR), the metals which leave MPR are re-usable non-ferrous metals with no impurities; the extent of sorting carried out in the UK as opposed to the Far East is dictated purely by economic considerations and has no environmental significance. If that is the case, it may be in the same category as the "economic sorting" which is accepted not to involve a recovery operation. However, I have not heard detailed argument on this issue or its practical implications, and I express no concluded view.
Conclusion
61) In conclusion, I agree with the Agency in holding that materials in category (1) are not waste, whereas those in categories (2) and (3) are waste. Category (4) is not of practical significance, but I agree with the Agency's general approach that, so long as sorting by MPR is required to remove impurities, the material continues to be waste.
62) I will hear argument as to the form of declaration (if any) which is appropriate to give effect to my conclusion on category (1). I would not regard the mere fact that the Agency has not disputed MPR's case on certain points as a reason for not granting a declaration. I accept that the Court will only grant declarations on issues where there is a genuine dispute. But I do not think that principle precludes the grant of such relief where there is, as here, a genuine overall dispute as to the lines of demarcation between waste and non-waste under the Directive, and the areas of agreement solely relate to points of detail within the scope of the dispute. On the other hand, I would wish to hear submissions in the light of my general observations earlier in this judgment on the limitations of the declaratory jurisdiction.
Appendix 1
Materials handled by MPR
1) Evidence as to the nature of the industry generally, and as to MPR's activities (relating principally to activities at Erith), was given by their managing director Mr Crowe, supported by representatives of typical suppliers and customers, and also by Mr Terry of the Environment Agency. This was largely uncontentious. The following is a summary of the main points.
The scrap metal industry generally
2) The industry exists to recycle scrap metal, so that the metal content of products and items may be used again in the manufacture of new products. Scrap metals are divided in to ferrous metals (steel and iron), and non-ferrous metals (principally, aluminium, copper, brass, stainless steel, lead nickel, tin, magnesium, and zinc).
3) The industry is pyramidal in structure, with many small traders at the bottom, a smaller number of medium-sized dealers in the middle, and a very few large companies at the top. The large companies supply the steel-making companies, foundries and other metal smelters with raw materials for the production of steel and other metals. They also export recycled metals and import metal waste for recycling.
4) While progressing up the pyramid, metals are progressively sorted and treated in order to remove non-metal contamination, to separate one type of metal from another, and to produce the size and form of material required by the end-user. Techniques range from hand-sorting by eye to the use of technically advanced equipment which can distinguish one metal from another. Some companies specialise in particular non-ferrous metals, such as manganese, magnesium or nickel; others in the recovery of precious metals, such as platinum, gold and silver (especially from redundant electrical equipment). There are also specialist companies dealing with particular categories of material (such as redundant electrical transmission equipment).
5) The Agency recognises that the industry confers significant environmental benefits, notably the reduction of the need for landfill, and the saving in the use of primary raw materials. However, many of the sources of scrap carry potential risks to the environment or health, which justify regulation of the industry.
Industry specifications
6) The industry works to sets of specifications prepared by the main trade associations . For ferrous metals there is a set prepared in 1995, described in its introduction as "the United Kingdom specifications for ferrous raw materials re-cycled, for the manufacture of iron and steel". There are certain "general conditions" applicable to all grades, which include requirements relating to safety, radioactive material, cleanness, residual and other alloys, and grading. There is then a series of grades from "OA to 12D" with descriptions according to size and character of materials. Examples mentioned in the evidence are:-
"Grade OA - plate and structural, consisting of cut, structural and plate arisings predominantly 6mm thick in sizes not exceeding 1.50m X 0.60m X 0.60m (or as otherwise agreed) prepared in a manner to ensure compact charging. May include properly prepared waggon material less than 6mm thick. Excludes tube and hollow section.
Grade 1 - Old steel, predominantly 6mm thick in sizes not exceeding 1.50m X 0.60m X 0.60m (or as otherwise agreed) prepared in a manner to ensure compact charging. May include tube and hollow section, wire rope properly prepared by agreement with consumer, properly prepared material from heavy commercial vehicles including wheels, but excluding body and wheels from light vehicles."
There are similar sets of specifications for Aluminium Scrap and other non-ferrous scrap.
MPR's Processes
7) Processes carried out at Erith include sorting, cutting, crushing, separating, compressing and baling. Items which are cut (manually with a gas-flame cutter or by mechanical shearing) include thick ferrous metals, such as joists and pipelines, and non-ferrous items such as copper water tanks. Crushing (by hydraulic hammer and "muncher") is used for cast-iron items, such as old-style domestic radiators and baths, man-hole covers, pipes and old-style lamp-posts. Separation of the metal content in a wide variety of items (such as vehicles or vehicle parts, and white goods) is carried out by means of a large piece of machinery, known as a fragmentiser (or shredder). Compressing and baling are used for a number of specifications of ferrous and non-ferrous metals.
Material received by MPR
8) Material received comes from four principal sources:-
(a) Factories.
9) Supplies from factories represent some 15% of the total, of which 95% are ferrous. They include materials from the production process: for example, "turnings and borings" (or "swarf"), which are filings and fine coils produced when metals are machined; "stampings and offcuts", produced when pieces are stamped or cut out of metal sheets; and "ends", the final pieces of metal bars or strips. Other items include: defective or off specification products; machines which have come to the end of their useful life; and "light iron" (such as metal filing cabinets or iron fencing).
10) Generally the metals are sorted by the factory operators into ferrous and non-ferrous categories, and the latter into individual metals and grades. They may employ sophisticated machinery to separate metal from non-metal substances. Sometimes they also compress and bale the metals.
11) Some materials may be received from factories with oil or cutting fluids still attached. These may be treated by MPR itself. Alternatively, they may be acceptable to manufacturers if they have specialised equipment for the purpose. For example, the manufacturer may have an "afterburner", whose purpose is to capture and combust in a second chamber the furnace gases arising from the burning of oil or other organic contaminants attached to the material, and to burn those gases at a high temperature in order to destroy the products resulting from the prior partial combustion of the oil. (The Agency regard that process, even where it is an integral part of the steel manufacturers' process, as a form or recovery process.)
12) A typical manufacturer supplying scrap is Auto Turned Products (Northants) Ltd ("ATP"), which specialises in the manufacture of turned products for the motoring industry. Mr Hedge of that firm says:
"Whilst the production of scrap metals is not ATP's core business, those scrap metals are, as I see it, a valuable by-product or offshoot of ATP's business. My aim is to capitalise to the fullest extent possible on the value of the scrap metals. I see the sale of them as part of ATP's normal business cycle".
The largest category supplied by them consists of steel turnings and borings produced in their machining processes. They have equipment to separate the scrap metals from the cutting fluid, which is reused. The metal is dried and airblown to dedicated skips provided by MPR. They produce approximately one skip load (about 4 to 6 tonnes) of turnings and borings each day. Other ferrous items include incorrectly manufactured products, ends of steel bars and old pieces of machinery. There is also some stainless steel and aluminium scrap.
(b) Demolition and dismantling.
13) This is the largest single source of scrap for MPR, representing 35% by weight of all material received at their Erith plant. Approximately 95% of it is ferrous material. The demolition contractor removes from the steel or other metals any attached concrete or other non-metallic materials before passing the metals to MPR, either by direct delivery or by placing them in dedicated containers to be collected by MPR. Such ferrous material includes structural plate, reinforced steel joists, girders, and rebar. Some of these materials can be passed on direct to steelworks for use as feed without any treatment. In other cases the only treatment required is the cutting of the scrap which exceeds the dimensions for the OA, number 1 or number 2 grades of the 1995 ferrous specifications.
14) From the demolition contractor's point of view the scrap metal arisings are an important part of the economics of the contract. Ordinarily, in the tendering process, the employer's engineer will produce a schedule of materials, including all likely scrap metal arisings. The employer will invite the tenderers to price their contracts on a "debits and credits" basis. The debits are the sums payable by the employer to the contractor and the credits are sums payable by the contractor to the employer. In practice the credit sums relate to the quantity of scrap metals in the building to be demolished. In most cases the sums are simply netted off and the balance paid by the employer to the contractor. In relation to contracts of former power stations, however, the debits and credits are paid separately by instalments at different times.
15) Mr Brown of Brown and Mason Ltd, whose main business is demolition and dismantling, gives evidence of a typical contract relating to the former West Thurrock Power Station. The total sum payable by National Power to Brown and Mason was over £6m, but against that was set a credit sum payable by Brown and Mason of some £2.2m, which was made up solely by reference to the scrap metal content of the former power station. Under the contract with National Power, title to the scrap metal passed to the contractor. He in turn entered into contracts with metal recyclers including MPR to deal with the scrap metal arisings. 90% of the ferrous scrap metal arisings was made up of two grades, OA and 1. For these they were to able to negotiate a fixed price from MPR for the duration of the contract (some two or three years), thus passing the risk inherent in the volatility of the market price to MPR.
16) Such materials would be transported direct to Co-Steel Sheerness and never pass through the MPR site, although the invoicing would be conducted by MPR's offices. Brown and Mason would ensure that, at the demolition and dismantling sites, the scrap metals were cut to the appropriate size and cleaned of any foreign substances, so as to meet the required grades. Inspections would be carried out at Co-Steel Sheerness, and deliveries could be rejected if they did not meet specifications or contained unsuitable material such as sealed cylinders. They would also be checked for nuclear radiation.
(c) Smaller scrap metal dealers.
17) 20% by weight of the scrap metal received at Erith comes from smaller dealers, who will have collected, sorted and processed scrap material from, a variety of sources. 90% of that is ferrous scrap metal, and includes large items such as steel plate, structural steel and cookers (or other "white goods"), and smaller items such as metal piping, fencing and filing cabinets. Steel plate and structural steel will often be in a form which meets the OA specification, in which case it can be delivered to a steel maker without any treatment. Where cutting to size is required, the dealer may cut it himself, or deliver it to MPR for cutting in their shearer. In the case of OA grade, there is a sufficient price differential between cut and uncut material to make it economic for the dealers to cut the scrap themselves; but it is usually uneconomic for them to do so in the case of Grade 1.
18) Non-ferrous metal scrap received from small dealers includes large items such as copper tanks and smaller items such as car batteries. There are also items which are a mixture of iron and aluminium (for example vehicle engine blocks, and locks and hinges from window frames). They are sent to MPR's Newmarket site, where a shredder separates the iron from the aluminium.
19) The scrap metal suppliers receive their material from a variety of sources, such as vehicle dismantlers, plumbers and electricians, and other small businesses, and from "totters" who collect direct from the public.
(d) Vehicle dismantlers.
20) 30% of the metal received at Erith comes from this source. The dismantlers will normally have bought the vehicles and carried out their own sorting and dismantling operations, removing those parts or materials which can be sold for re-use. What is left is delivered to or collected by MPR.
21) All vehicles received by MPR are put into the fragmentiser, which removes non-metallic substances such as paint, glass, plastics, rubber and textiles as well as hydrocarbon liquids. Ferrous metals are separated from non-ferrous metals by electro-magnets, leaving pure ferrous scrap which can be fed into an electric arc furnace without further processing.
22) A typical vehicle dismantler is Emmins Motors, which dismantles between 3 and 4,000 vehicles a year. The average turnround period for a vehicle is four months. During that period it will be stripped of all saleable parts which may include engines, gearboxes, panels, doors, windows, and radios. Tyres are either sold to customers, or removed by a re-moulding company which is paid to take them away. What is left is the shell of the vehicle, the carpets, some windows and perhaps some incidental components. These are sold to MPR. 90% of their source of vehicles is from the general public and the remainder from local vehicle salvage companies.
Treatment solely for economic reasons
23) In paragraph 8 of his affidavit, Mr Crowe says that there are occasions where material which constitutes saleable furnace feed is nevertheless processed to produce another, more valuable furnace feed. For example, a product may be "densified", which has the advantage for the customer of requiring less energy in the melting process. One example is the treatment of "light steel cuts" (for instance from factory sheet offcuts) which constitute grade 12D of the 1995 specifications. They can be sent to a steel works either loose or compressed into bales, but at one site this material is put through a fragmentiser in order to produce a denser furnace feed which achieves a higher price.
Industry tolerances
24) According to Mr Crowe's evidence, the scrap metal industry recognises a level of tolerance in respect of compliance with product specification. He says that foreign material, amounting on a load of ferrous scrap to 5% by weight, or on a load of non-ferrous scrap 2% by weight, would generally be acceptable to MPR. Examples would be concrete or wood remaining on scrap metal from a demolition site. In his second affidavit, Mr Crowe explained that he was speaking of his own experience (rather than any industry norm) and that such tolerances would only be allowed "in isolated cases" and in relation to exclusively non-hazardous material.
MPR's Product
25) The principal product is ferrous metal, to be used as furnace feed in the electric arc furnaces of steel makers. This has to be of a quality acceptable to the furnace operators. The products are ready for direct and immediate use as furnace feed. Exceptions are:-
(1) "Mixed heavy metals" (non-ferrous). That is an industry recognised term. The metals may include zinc, copper, brass, stainless steel, titanium, lead, aluminium and very small amounts of gold and silver. After treatment by MPR these are pure non-ferrous metals with no foreign material. A limited amount of hand sorting is carried out by MPR to separate large pieces of the more valuable metals. Mixed heavy metals are exported for use in furnaces, mostly to the Far East. They are generally hand sorted at the locations of the foundries, where the labour is cheaper.
(2) Lead acid batteries and copper armatures are sent to specialist bodies for treatment.
(3) Some vehicle engines may be sent away to third parties to be broken down into component parts, or for specialist treatment (for example, some vehicle radiators are treated in a "sloping hearth furnace", which separates brass from copper).
26) There is evidence from representatives of the Tremorfa Steel Works in Cardiff and Co-Steel Sheerness PLC, Kent of the importance to them of MPR's ability to supply scrap metal meeting their specifications. They have their own inspectors who ensure that supplies meet their requirements. If unwanted materials (for example, wood, concrete, brick or dirt) are found, the load may be rejected or the overall weight allowance reduced by the weight of the unwanted materials.
27) Similar evidence is given by a representative of J McIntyre (Aluminium) Ltd in relation to supplies of aluminium scrap received from MPR. Again, inspections are made of loads on delivery and the load may be rejected or downgraded if it does not meet specifications. Different grades of scrap may be mixed for feeding to the furnaces, determined by the requirements of their customers. JMA operates a "multi melting furnace", designed to deal with a wide range of aluminium scrap, including feed contaminated with oil and paint. Some shearing, cutting and baling of raw materials is carried out by JMA.
Transport of materials
28) MPR is registered pursuant to the Control of Pollution Amendment Act 1989 as a carrier of waste. It transports materials from factories and from demolition or dismantling sites, to Erith and other MPR sites or direct to steel works. They are also registered as a broker of waste under the Waste Management Licensing Regulations 1994. In that capacity they arrange, for example, for demolition contractors to deliver pure ferrous scrap metal direct from their sites to Co-Steel Sheerness. More generally they provide for all Co-Steel Sheerness' requirements for scrap metal whether from their own operations or from other dealers.
Appendix 2
Appendix 2
Proposed declarations
A. Material Received
1. A declaration that the following materials received by the Plaintiff from third party suppliers to it at its site at Manor Road, Erith, Kent do not constitute "Directive waste" under and for the purposes of The Controlled Waste Regulations 1992 (1992 S.I. No. 588) and The Waste Management Licensing Regulations 1994 (1994 S.I. No. 1056) namely:-
1.1 Any turnings, borings, stampings, offcuts, ends or other material emanating from the process of a manufacturer (and purchased by the Plaintiff in good faith with a view to reclamation or recycling) which are supplied to the Plaintiff as aforesaid by the said manufacturer in circumstances where the said manufacturer has determined to supply such material to the Plaintiff as part of and/or in the course of such manufacturer's principal business or commercial activity;
1.2 Any material (purchased by the Plaintiff in good faith with a view to reclamation or recycling) which is supplied to the Plaintiff as aforesaid by a demolition contractor (a) in the course of carrying out a contract for demolition or dismantling and under which contract such demolition contractor has paid for or given credit for value of scrap metal arising from such demolition or dismantling or (b) otherwise as an integral part of his sole or principal business or commercial activity;
1.3 Any material (purchased by the Plaintiff in good faith with a view to reclamation or recycling) which as supplied has undergone or is a product of substantial recycling or reclamation carried out by a person as part of his sole or principal business or commercial activity, and which material is either supplied to the Plaintiff by the person who has carried out such recycling or reclamation as the product of his said business or commercial activity or is supplied to the Plaintiff by an intermediary to whom the said material was supplied as aforesaid and who supplies such material to the Plaintiff as part of such intermediary's principal business or commercial activity.
Further or alternatively to paragraphs 1.1 to 1.3 above.
Ferrous Material
1.4 Ferrous metal material which as so supplied is saleable in the open market by the Plaintiff for use without being subjected to any further recovery operation within the meaning of Part IV of Schedule 4 to the Waste Management Licensing Regulations 1994 ("recovery operation") (a) as feedstock for electric arc furnaces by producers of steel or (b) otherwise for melting by producers of steel and whether or not such material is contaminated with oil, cutting fluids or any other substances as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment;
1.5 Ferrous metal material which as so supplied conforms to any one of the grades specified in the following specifications ("the 1995 Ferrous Specifications"), namely UK Specifications of Ferrous Raw Material Recycled for the Manufacture of Iron and Steel agreed by the Tripartite Committee of the British Foundry Association, the British Iron and Steel Producers Association and the British Metals Federation and dated 1 January 1995 (including the General Conditions of the said Specifications applicable to all grades) being material which can be used without being subjected to any further recovery operation (a) as feedstock for electric arc furnaces by producers of steel or (b) otherwise for melting by producers of steel and whether or not such material is contaminated with oil, cutting fluids or any other substances as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment;
1.6 Ferrous metal material which as so supplied (a) is saleable in the open market by the Plaintiff for use as feedstock for electric arc furnaces by producers of steel or (b) conforms to any one of the grades specified in the 1995 Ferrous Specifications being material which can be used as feedstock for electric arc furnaces subject only to such material being cut (whether manually or by mechanical shearing) and/or compressed;
1.7 Material which as so supplied (a) does not include as part of the relevant delivery vehicle load any significant amount of non-hazardous material which is not ferrous metal material, where the relevant delivery vehicle load is the total of the material being supplied to the Plaintiff in the vehicle delivering the same to the Plaintiff and a significant amount of non-hazardous material would constitute 5 per cent or more by weight of the relevant delivery vehicle load and non-hazardous material is plastic, concrete, wood, soil, glass or and rubber and (b) save for the amount of non-hazardous material contained in the relevant delivery vehicle load which is not significant as hereinbefore specified falls within any one or more of 1.4 to 1.6 inclusive above;
Non-ferrous Material
1.8 Non-ferrous metal material (including aluminium, brass, copper, magnesium, stainless steel, tin and zinc) which as so supplied is saleable in the open market by the Plaintiff for use without being subjected to any further recovery operation as feedstock for melting and whether or not such material is contaminated with oil, cutting fluids or any other substance (a) as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment or (b) as to require (i) drying in a swarf dryer before going into a melting furnace or (ii) use of a melting furnace with an afterburner in order to reduce emissions to air from the melting of it in a furnace;
1.9 Aluminium material which conforms to any one of classifications 1 to 11 (inclusive) contained in the Aluminium Scrap Classifications of the Association of Light Alloy Refiners Limited and the British Secondary Metals Association of 1991 ("the Aluminium Classifications"), or other non-ferrous metal material which conforms to any one of the specifications, descriptions or grades contained in the Standard Classifications for non-ferrous scrap metals issued by the British Secondary Metals Association ("the Non-Ferrous Classifications"), being material which in either case can be used without being subjected to any further recovery operation as feedstock for melting and whether or not such material is contaminated with oil, cutting fluids or any other substance (a) as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment or (b) as to require (i) drying in a swarf dryer before going into a melting furnace or (ii) use of a melting furnace with an afterburner in order to reduce emissions to air from the melting of it in a furnace;
1.10 Aluminium or other non-ferrous metal material which as so supplied (a) is saleable in the open market by the Plaintiff for use as feedstock for melting or (b) conforms to any one of classifications 1 to 11 (inclusive) of the Aluminium Classifications or to any one of the Non-Ferrous Classifications being material which can be used as feedstock for melting subject only to such material being cut (whether manually or by mechanical shearing) and/or compressed; and
1.11 Material which as so supplied (a) does not include as part of the relevant delivery vehicle load any significant amount of non-hazardous material which is not non-ferrous metal material, where the relevant delivery vehicle load is the total of the material being supplied to the Plaintiff in the vehicle delivering the same to the Plaintiff, significant amount of non-hazardous material would constitute 2 per cent or more by weight of the relevant delivery vehicle load and non-hazardous material is plastic, concrete, wood, soil, glass or rubber and (b) save for the amount of non-hazardous material contained in the relevant delivery which is not significant as hereinbefore specified falls within any one or more of 1.8 to 1.10 inclusive above.
2. A declaration that the Plaintiff is not required to be registered as a carrier of controlled waste under and for the purposes of the Control of Pollution (Amendment) Act 1989 and The Controlled Waste (Registration of Carriers and Seizure of Vehicles) Regulations 1991 (1991 S.I. No. 1624) in respect of any transporting by it of the following material, namely such material as is specified in any one or more of l.l to l.11 inclusive of paragraph 1 above save that the said material is transported from the relevant premises or site of the person supplying the same to the Plaintiff to the premises of the Plaintiff by the Plaintiff.
3. A declaration that in arranging for ferrous metal material which is ready for use without further sorting or other treatment or processing as feedstock for electric arc furnaces to be supplied to Co-Steel Sheerness Plc ("Co-Steel") at Sheerness, Kent for use as such feedstock in the production of steel without such material passing through the Plaintiff's premises the Plaintiff is not arranging (as dealer or broker) for the disposal or recovery controlled waste on behalf of another under and for purposes of regulation 20 of the Waste Management Regulations 1994 (1994 S.I. No. 1056).
B. Product Despatched
4. A declaration that the following products of the Plaintiff do not constitute "Directive waste" under and for the purposes of The Controlled Waste Regulations 1992 (1992 S.I. No. 588) and in the Waste Management Licensing Regulations 1994 (1994 S.I. No. 1056), namely:-
Ferrous Material
4.1 Ferrous metal product sold by the Plaintiff in the open market for use without being subjected to any further recovery operation (a) as feedstock for electric arc furnaces by producers of steel or (b) otherwise for melting by producers of steel and whether or not such material is contaminated with oil, cutting fluids or any other substances as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment;
4.2 Ferrous metal product which conforms to any one of the grades specified in the 1995 Ferrous Specifications being material which can be used without being subjected to any further recovery operation (a) as feedstock for electric arc furnaces by producers of steel or (b) otherwise for melting by producers of steel and whether or not such material is contaminated with oil, cutting fluids or any other substances as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment;
Non-ferrous Material
4.3 Non-ferrous metal product (including aluminium, brass, copper, magnesium, stainless steel, tin and zinc) sold by the Plaintiff in the open market for use without being subjected to any further recovery operation as feedstock for melting and whether or not such material is contaminated with oil, cutting fluids or any other substance (a) as to require supervisory or precautionary measures in the course of its handling, storage or transport in order to protect public health or the environment or (b) as to require (i) drying in a swarf dryer before going into a melting furnace or (ii) use of a melting furnace with an afterburner in order to reduce emissions to air from the melting of it in a furnace; and
4.4 Non-ferrous metal product which conforms to (a) any one of classifications 1 to 11 (inclusive) contained in the Aluminium Classifications or (b) any one of the Non-Ferrous Classifications or (c) any one of the specifications contained in the non-ferrous scrap specifications of the Institute of Scrap Recycling Industries of the United States, being in all cases material which can be used without being subjected to any further recovery operation as feedstock for melting and whether or not such material is contaminated with oil, cutting fluids or any other substance (a) as to require supervisory or precautionary measures in the course of its handling, storage or transporting order to protect public health or the environment or (b) as to require (i) drying in a swarf dryer before going into a melting furnace or (ii) use of a melting furnace with an afterburner in order to reduce emissions to air from the melting of it in a furnace-
5. A declaration that the products of the Plaintiff set out in 4.1 to 4.4 inclusive of paragraph 4 above do not constitute "waste" under and for the purposes of (a) Council Regulation (EEC) No. 259/93 of the European Community on the supervision and control of shipments of waste within, into and out of the European Community or (b) The Transfrontier Shipment of Waste Regulations 1994 (1994 S.I. No. 1137).
Appendix 3
The Tombesi case - extract from Opinion of Advocate General Jacobs
"50. The necessary starting point in appraising those arguments is the definition given to the term 'waste' in Article 1(a). That provision states that waste is any substance or object in the categories set out in Annex 1 which the holder 'discards or intends or is required to discard'. It seems to me that little is to be gained by considering the normal meaning of the term 'discard'. It is clear from the provisions of the Directive, in particular Article 4, Articles 8 to 12 and Annexes IIA and B, that the term 'waste' and the regulatory system of the Directive extend both to substances or objects which are disposed of and to those which are recovered. Thus the term 'discard' employed in the definition of waste in Article 1(a) has a special meaning encompassing both the disposal of waste and its consignment to a recovery operation. The scope of the term 'waste' therefore depends on what is meant by "disposal operation" and "recovery operation".
51. Unfortunately, however - if perhaps inevitably - those terms do not appear to be exhaustively defined. Annex IIA lists disposal operations 'such as they occur in practice'; similarly Annex IIB is merely 'Intended to list recovery operations as they are carried out in practice'. That wording suggests that the lists are merely illustrative and based on existing experience.
52. It may nevertheless be inferred from the term 'recovery operation' itself and from the list in Annex IIB set out above that what is entailed by 'recovery' is a process by which goods are restored to their previous state or transformed into a useable state or by which certain usable components are extracted or produced. It follows that, as the Italian, Netherlands and United Kingdom Governments suggest, goods which are transferred to another person and put to continued use in their existing form are not 'recovered' in the above sense. Thus a second-hand motor vehicle sold to another person for continued use as a motor vehicle does not constitute waste.
53. However, the distinction implicit in the Directive between goods which are the subject of continued use in their existing form and those which are subject to a recovery operation seems somewhat artificial. Certainly it is easy to see that recovery would include, for example, the recycling of glass from broken bottles by returning it to a furnace. Such an operation is readily recognisable as a recovery operation because it involves the recycling of the components of an existing end product in order to produce another end product. In other cases, however, it may be difficult to distinguish between recovery and continued processing of raw materials or intermediate products. That is particularly so in relation to residues or by-products from production processes. Although residues are not expressly referred to in Annex IIB, they are mentioned as specific categories of waste in Annex I. Clearly, if residues are disposed of by their holder they constitute waste. However, by analogy with the operations listed in Annex IIB, it also seems that the consignment of a residue to a process designed to transform it or certain of its components into a usable raw material constitutes a recovery process within the meaning of the Annex. Indeed Article 3(1)(b)(1) of the Directive requires Member States to take appropriate measures to encourage 'the recovery of waste by means of recycling, re-use or reclamation or any other process with a view to extracting secondary raw materials' (my emphasis). Moreover, many of the items listed in Annex IIB, for example Rl ('Solvent reclamation'), R2 Recycling/reclamation of R2 organic substances which are not used as solvents'), R3 ('Recycling/reclamation of metals and metal compounds'), would be capable of including recovery of residues from industrial processes. Thus I share the French Government's view that, where a residue cannot be used in a normal industrial process without undergoing a recovery operation such as those listed in Annex IIB, it must be regarded as waste until such time as it is recovered.
54. The problem, however, is that the distinction between recovery of waste and normal processing of raw materials is somewhat fragile. In economic terms waste which is destined for recovery and use as a substitute raw material in an industrial process is a raw material even before it is recovered. It is, for example, conceivable that a producer might, depending on commercial conditions, switch to the use of a substitute raw material and even adapt his process to accommodate a residue or by-product directly, integrating the 'recovery' operation into the normal process. Equally a manufacturer may need to treat or refine a naturally occurring primary raw material before he uses it in a production process; yet this would presumably not be considered a recovery process.
55. The difficulty therefore arises in interpreting and applying the Directive that the concept of 'recovery operation', upon which the definition of waste in part depends, is not exhaustively defined in the Directive and may be inherently difficult to apply in some cases. Moreover there is an element of circularity: whether there is 'recovery' depends on whether there is 'waste', which in turn depends on whether there is 'recovery'. It seems to me that the way to overcome that difficulty is not to seek to lay down a comprehensive definition but to work by example, in other words to examine whether the holder of an object or substance consigns or intends to consign it to one of the operations listed in Annex IIB or to an analogous operation.
56. Contrary to the Commission's view, it seems to me therefore that the approach of the Netherlands and United Kingdom Governments of distinguishing between goods belonging to the normal commercial cycle and waste by examining whether an object or substance is consigned to a recovery operation is entirely in keeping with the Directive. I accept the Commission's argument that to some extent a case-by-case approach is necessary. However, I think the Commission perhaps overlooks the Member States' need to lay down practical rules and guidelines for the day-to-day application of the Directive providing the necessary degree of legal certainty for individuals; that is particularly so since failure to respect national implementing rules may lead to the imposition of criminal penalties. The definition of 'waste' in the Directive is imprecise and open-ended, and it is clear that the Member States have found it difficult to apply to the various situations which may occur in practice. The Italian Government has stated that the problem of distinguishing between secondary raw materials and residues has been the subject of discussion in the committee set up under Article 18 of the Directive. As the Directive stands at present, I think it must to some extent be left to Member States to develop more detailed criteria to apply the term 'recovery operation' to the various situations which may occur in practice. Such an approach is consistent with the division of responsibilities between the Court and the national courts under the Treaty. It is for the national courts to apply the Directive to the facts of the potentially large number of borderline cases which may arise in practice. The role of the Court should be limited to providing national courts with the interpretative guidance which they require. In that regard it is clear that 'waste' must be interpreted broadly in the light of the objective of ensuring a high level of environmental protection and in particular covers objects or substances even where they have a commercial value and are destined for further use if they must first undergo a recovery operation listed in, or analogous to those listed in, Annex IIB."
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