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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Mackay of Drumadoon

Lady Smith

Lord McEwan

[2013] CSIH 58

XA67/11

OPINION OF LORD MACKAY OF DRUMADOON

in the reclaiming motion

NORTH LANARKSHIRE COUNCIL

Appellants and Reclaimers;

against

SCOTTISH MINISTERS AND

SHORE ENERGY

Respondents;

_______________

Act: Armstrong QC; Simpson & Marwick

Alt: Thomson QC, E.G. Mackenzie; Scottish Government Legal Directorate

Alt: Mure QC; Brodies LLP

20 June 2013

[1] I have had the opportunity of reading in draft the opinions of Lady Smith and Lord McEwan. For the reasons given by Lady Smith and Lord McEwan, with which I agree, I would propose that this reclaiming motion be refused.

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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Mackay of Drumadoon

Lady Smith

Lord McEwan

[2013] CSIH 58

XA67/11

OPINION OF LADY SMITH

in the reclaiming motion

NORTH LANARKSHIRE COUNCIL

Appellants and Reclaimers;

against

SCOTTISH MINISTERS AND

SHORE ENERGY

Respondents:

_______________

Act: Armstrong QC; Simpson & Marwick

Alt: Thomson QC, E.G. Mackenzie; Scottish Government Legal Directorate

Alt: Mure QC; Brodies LLP

20 June 2013

INTRODUCTION

[2] This case is about rubbish. We are, it is said, a throwaway society. We have turned our backs on 'make do and mend'. We have generated more and more waste whether because of the increase of cheaper products planned to become rapidly obsolete, unnecessary packaging, commercial and industrial processes, attitudinal changes or otherwise. In 2008, in Scotland - a country with a population of only a little more than 5 million people - almost 20 million tonnes of waste was generated. Over 6 million tonnes of that waste went to landfill. This state of affairs cannot carry on.

[3] The need for a sea change in our attitude to and management of waste has now been recognised. It has been recognised at both European and domestic level. Hence the European legislation to which I refer below and, also, the policies which have been formulated by Scottish Ministers ("the Ministers") to address the problem, at the heart of which lies a "Zero Waste" target.

BACKGROUND FACTS

The Site and the Proposal

[4] There is a site extending to about 3.6ha on brownfield urban land adjacent to the A8 Edinburgh/Glasgow road at Carnbroe, a village in Lanarkshire, close to the town of Coatbridge. It used to be operated by Shanks and McEwan as a waste landfill site. Shore Energy Limited ("Shore Energy") want to process waste at that site. In 2009, they applied to the appellants, North Lanarkshire Council ("the Council") for planning permission in relation to it
[1].

[5] Shore Energy's application was for the development of a materials recovery and renewable energy facility which would have the capacity to process up to 160,000 tonnes of non-hazardous waste each year. The materials recovery part of the process would involve both recovery of waste that is suitable for recycling - such as glass, metals and plastics - and preparation of other waste for fuel production purposes. The energy facility part of the process would involve pyrolysis with power generation and waste heat recovery. It would, potentially, have a maximum output of 10MW of electricity each year, 3 MW of which would be used within the facility itself and 7MW of which would be exported to the national grid; there is already a sub-station on the site. Put shortly, Shore Energy's planning application was submitted on the basis that their proposals would maximise recycling with only residual non-recyclable waste being processed in a pyrolysis plant which would turn waste that would, otherwise, have been disposed of without benefit, into energy which could be classed as renewable.

[6] A grant of planning permission will not, in itself, enable Shore Energy to put its proposals into operation. They will be subject to the relevant regulatory control which operates independently of the planning system and they will require to secure the appropriate permits.

Other Proposals

[7] Planning consents had, prior to the inquiry in respect of Shore Energy's planning application, been granted for the development of a site at Drumshangie, North Lanarkshire and a site at Dovesdale Farm, South Lanarkshire. Neither site had, however, become operational by the time that the reporters were considering the appeal in this case.

Determination of Shore Energy's Planning Application

[8] Officials of the Council's planning department considered Shore Energy's application and recommended that it should be accepted. Nothwithstanding that recommendation, the Council refused it, on 29 March 2010.

Appeal to the Ministers

[9] Shore Energy appealed to the Ministers, as they were entitled to do, under sec 47 of the Town and Country Planning (Scotland)Act 1997 ("the 1997 Act"). The Ministers appointed H M Begg and E D K Thomas ("the reporters") who, it was accepted, are experienced reporters, to consider the appeal and they delegated to them the power to determine it. The reporters did so. They upheld Shore Energy's appeal and granted planning permission, subject to various conditions which, amongst other things, were designed to ensure that only residual waste (ie the waste remaining after all practicable and reasonable efforts have been made to extract recyclable and compostable material) would be subjected to the pyrolysis process, to ensure consultation with the Scottish Environmental Protection Agency ("SEPA") and compliance with its requirements where appropriate.

DIRECTIVE 2008/98/EC ("The Waste Directive")

[10] The Waste Directive is a framework directive following on from Directive 2006/12/EC which had established a legislative framework for the handling of waste in the European Community and obliged Member States to draw up waste management plans in accordance with principles which included handling waste in a way that does not have a negative impact on the environment or human health and applying a concept called the 'waste hierarchy'. The Waste Directive stresses the importance of recycling and the use of waste as a resource, sets out new definitions and gives direction on certain principles that are to be applied by Member States in relation to their approach to and management of waste. Recital 28 states:

" This Directive should help move the EU closer to a 'recycling society', seeking to avoid waste generation and to use waste as a resource."

and that objective is reflected in article 4 which defines the 'waste hierarchy' as follows:

"Article 4

Waste hierarchy

1. The following waste hierarchy shall apply as a priority order in waste prevention and management legislation and policy:

(a) prevention;

(b) preparing for re-use;

(d) other recovery, e.g. energy recovery; and

(e) disposal."

In article 3(15) 'recovery' is defined as :

"...any operation the principal result of which is waste serving a useful purpose by replacing other materials which would otherwise have been used to fulfil a particular function, or waste being prepared to fulfil that function, in the plant or in the wider economy. Annex II sets out a non-exhaustive list of recovery operations."

and the first item on the list in Annex II is:

"Use principally as a fuel or other means to generate energy."

In article 3 (17), 'recycling' is defined as :

"....any recovery operation by which waste materials are reprocessed into products, materials or substances whether for the original or other purposes. It includes the reprocessing of organic material but does include energy recovery and the reprocessing into materials that are to be used as fuels or for backfilling operations."

[11] Article 11 sets targets which are prefaced by general direction:

"Article 11

Re - use and recycling

1. Member States shall take measures, as appropriate, to promote the re- use products and preparing for re-use of activities, notably by encouraging the establishment and support of re-use and repair networks, the use of economic instruments, procurement criteria, quantitative objectives or other measures.

..................

2. In order to comply with the objectives of this Directive, and move towards a European recycling society with a high level of resource efficiency, Member States shall take the necessary measures designed to achieve the following targets:

(a) by 2020, the preparing for re-use and the recycling of waste materials such as at least paper, metal, plastic and glass from households and possibly from other origins as far as these waste streams are similar to waste from households, shall be increased to a minimum of overall 50% by weight;

(b) by 2020, the preparing for re-use, recycling and other material recovery, including backfilling operations using waste to substitute other materials of non-hazardous construction and demolition waste excluding naturally occurring material defined in category 17 05 04 in the list of waste shall be increased to a minimum of 70% by weight."

The Waste Directive includes the following principles which are of particular significance to the issue that arises in this application:

"Article 16

Principles of self-sufficiency and proximity

1. Member States shall take appropriate measures, in co-operation with other Member States where this is necessary or advisable, to establish an integrated and adequate network of waste disposal installations and of installations for the recovery of mixed municipal waste collected from private households, including where such collection also covers such waste from other producers, taking into account best available techniques.

.................

2. The network shall be designed to enable the Community as a whole to become self-sufficient in waste disposal as well as in the recovery of waste referred to in paragraph 1, and to enable Member States to move towards that aim individually, taking into account geographical circumstances or the need for specialised installations for certain types of waste.

3. The network shall enable waste to be disposed of or waste referred to in paragraph 1 to be recovered in one of the nearest appropriate installations, by means of the most appropriate methods and technologies, in order to ensure a high level of protection for the environment and public health."

[12] The 'Europe - wide' approach of the Directive is made particularly clear in article 16. Article 16 is not prescriptive as to the location of waste disposal installations or the operation of waste disposal networks. Waste may cross national borders. Waste may travel within national borders. Whilst, as a generality, waste should, given the proximity principle, be processed as close to source as possible, flexibility is provided for - networks are to enable processing in "one of the nearest" installations not only the nearest. Further, the exercise of discretion in the choice of installation for the processing of the waste is allowed for - waste is to be processed in whatever are judged to be the "appropriate" installations for the waste in question.

[13] The case of The European Commission v Belgium, Case C-2/90 in which judgment was issued on 9 July 1992, contrary to what seemed to be suggested by senior counsel for the Council, can be seen as supporting the conclusion that, under European law, application of the principles of self-sufficiency and proximity will, in practice, involve a fair measure of flexibility. The reason for the court's reference to those principles should, however, be noted at the outset. It arose in the context of the court's determination of the issue of whether or not certain waste
[2] produced within Wallonia and waste produced outwith Wallonia were, by reason of the difference in their place of origin, different 'goods' irrespective of their nature. Could the same type of waste constitute different goods for the purposes of Article 30 of the EEC Treaty? In concluding that they were indeed different goods and that a ban on the importation of such waste from outwith Wallonia was not, therefore, discriminatory, the court seemed to rely on the principles of self-sufficiency and proximity contained in the Basel Convention of 22 March 1989 on the control of transboundary movements of hazardous waste and its disposal. That is a convention which was entered into because of concerns about 'pollution source transfer' from state to state, particularly from developed countries to less well developed countries. The convention regulates but does not prevent such transfers between signatories. The convention does not relate to movement of waste within a state which is the concern in the present case. Accordingly, the court's concern in the Belgium case was to determine whether or not the ban was discriminatory not whether it was justified by reason of the principles of self-sufficiency and proximity. It is also of note that the court refers to waste being "disposed of as close as possible to the place where it is produced, in order to limit as far as possible the transport of waste"
[3] (my emphasis) thereby recognising that waste may have to travel, the need for flexibility of approach and that much will have to be left to the judgment of the individual Member States when it comes to deciding what is and is not possible. Earlier discussion in the judgment about allowing for future changes, cost and viability when deciding what is and is not recyclable, is in a similar vein
[4].

[14] The waste management policy of the Scottish Government, discussed below, demonstrates a clear awareness of and intention to adhere to the principles and directions contained in the Waste Directive.

RELEVANT SCOTTISH GOVERNMENT POLICY

[15] In interpreting the Scottish Government's policy on waste management, I bear in mind that that is a task for the court (Tesco Stores v Dundee City Council [2012] UKSC 13
[5]). The policy is, perhaps not surprisingly, stated at high level, is characterised by broad statements and avoids prescription wherever possible. Scottish Government, local authorities and SEPA are to work together to seek to achieve objectives that are consistent with the Waste Directive but they are to be afforded flexibility to do so, which accords with what appears to be the intent of the Directive, as discussed above. That must particularly be so where, as here, reliance is being placed on the private sector to invest in the construction, development and operation of the required facilities. Waste policy will require to evolve as, indeed, has already occurred.

[16] The state of Scottish Government's waste policy at the time that is relevant for present purposes can be identified by considering a number of documents. Taking them in chronological order, they are as follows.

National Planning Framework
[6]

[17] In 2009, a National Planning Framework for Scotland ("NPFS 2") was published. Waste management is referred to in very general terms at paragraph 27 which states:

" 27. The effective management and re-use of waste is essential to a sustainable future. The EU Landfill Directive requires the amount of biodegradable municipal waste going to landfill to be reduced by 35% of the total produced in 1995 by 2020. Landfill Tax is increasing substantially. Additional facilities for the treatment and recycling of municipal, commercial and industrial wastes are therefore urgently needed. As the methane produced by landfill sites is a powerful greenhouse gas, reducing the scale of landfill helps to combat climate change. The construction and operation of waste management installations can also offer new economic opportunities."

Scottish Planning Policy
[7]

[18] By February 2010, the Scottish Government had adopted "Zero Waste" as a goal. It issued a statement of its policy on nationally important land use planning matters in a document entitled "Scottish Planning Policy" ("SPP") which, accordingly, contained a section on waste management. That section includes the following:

"212. The Scottish Government has adopted Zero Waste as a goal. This means eliminating the unnecessary use of raw materials, sustainable design, resource efficiency, and waste prevention, reusing products wherever possible, and recovering value from products when they reach the end of their lives either through recycling, composting or energy recovery, in accordance with the waste hierarchy. Policy on waste management is driven by European and national legislation including the EU Waste Framework Directive and the Landfill (Scotland) Regulations (2003). "

The paragraph then goes on to set out specific targets for municipal waste which involve:

increasing the proportion recycled or composted to 40% by 2010, 50% by 2020, and 70% by 2025;
limiting the landfill of municipal waste to 5% by 2025;
stopping the growth in municipal waste by 2010; and
limiting the production of energy from mixed municipal waste to 25%.

[19] At paragraph 213, SPP deals with the application of the proximity principle:

" A sustainable approach to waste management planning relies on a number of objectives including those reflected in the Zero Waste Plan and the waste hierarchy, reduced reliance on landfill and the precautionary and proximity principles. The waste hierarchy favours prevention over reuse, recycling, recovery then disposal. The proximity principle requires waste to be dealt with as close as possible to where it is produced. This means taking local responsibility for the treatment and disposal of waste. Planning for waste management infrastructure to meet all waste needs within each local authority area is a key part of fulfilling this responsibility. An authority may also fulfil this responsibility by working with other authorities to develop shared strategic waste infrastructure."

[20] The Zero Waste Plan to which that paragraph refers is discussed below but it had, by the time of the Inquiry, been revised in important respects in the policy document that was issued on 14 February 2011; in particular, the general principle of 'local waste to go to local facilities' that emanates from the above, has been departed from.

[21] In paragraph 214 of the SPP, it is stated that there is a need for there to be a significant increase in the number, range and type of waste management installations to manage municipal, commercial and industrial waste.

Zero Waste Plan
[8]

[22] "Scotland's Zero Waste Plan" ("ZWP") was published in June 2010. It is a high level, aspirational document which is "deliberately concise and strategic in approach"
[9]. The goal is to deliver a zero waste Scotland over the next ten years with the waste hierarchy, as set out in the Waste Directive, "central to this vision"
[10]. ZWP states a commitment to taking action across four areas one of which is the resource management sector where the strategic direction is stated to include, as a separate theme, the encouragement of business investment in resource management and treatment and that the land use planning system will support the delivery of a zero waste Scotland
[11]. Targets are contained in Annex A to ZWP which include that, by 2025, no more than 5% of all waste will go to landfill. That is, that by 2025,the vision is for a transformation to have occurred as compared to the state of affairs recorded in 2008, when some 44% of waste went to landfill.

Zero Waste Plan Revised Annex B
[12]

[23] Annex B of ZWP deals with role of the land use planning system in delivering a zero waste Scotland. The relevant version is in the revisal which was issued on 14February 2011. The following aspects of revised Annex B are of particular note for present purposes:

it is expressly stated to supersede some aspects of waste policy contained in the NPFS2 and SPP so that "the Zero Waste Plan and the associated documents listed in paragraph 3.3 of this Annex constitute Scotland's new National Waste Management Plan for planning purposes.";

it sends out a clear message of urgency;

it sets out, again, the target of reducing landfill to a maximum of 5% of all Scotland's annual waste by 2025 and also some revised targets ;

the nation-wide need for new waste management facilities is strongly emphasised;

it is hoped that Scotland's approach to zero waste might enable it to become a centre of expertise for the reprocessing of high value resources so as to add social and, in particular, economic benefits to the environmental benefits of becoming a zero waste society - Table 1, referred to below, although demonstrating a substantial national unmet need for waste management infrastructure is not to be interpreted as limiting the development of such infrastructure; it is hoped that growth of the resource management sector will be thus enabled and, furthermore, such growth can be allowed to proceed even if the result is to produce more infrastructure than is provided for in Table 1 ;

references in paragraph 213 of SPP to the proximity principle "should be taken in the context of the guidance in Section 4 of this Annex" where the principle of 'local waste to go to local facilities' is departed from;

in Section 4:

Scottish Government sets out its approach to the application of article 16 (1) of the revised Waste Framework Directive as being that it will be met "when there is enough infrastructure to deal with all waste arising annually in Scotland." adding that "This is not to say suggest that waste will not leave or enter Scotland, rather that there would be no major net change."
[13];
planning authorities are told that they "should be mindful" of certain matters including that "need and proximity for waste management facilities should be considered strategically as the achievement of a sustainable strategy may involve waste crossing planning boundaries within Scotland";
the policy is intended to provide a high level framework with central government specifically refraining from being prescriptive about the precise mix of technologies to be provided or the phasing of infrastructure provision;
the national shortfall in the operational capacity of waste management infrastructure required to meet the targets of the ZWP - as calculated by SEPA - is set out in an attached table (Table 1);
Table 1 sets out allocations of capacities that are divided according to local authorities or development plan areas but that geographical division is not intended to be prescriptive
[14];
Table 1 shows the total additional operational waste management infrastructure to meet the ZWP targets as being 5,140,000 tonnes, as at February 2011 comprising the requirements for 2,130,000 tonnes of source segregated recyclables and organic wastes and for 3,010,000 tonnes of unsorted wastes ;
810,000 tonnes of the figure for source segregated/ organic wastes and 1,150,000 tonnes of the figure for unsorted wastes was allocated to Glasgow and Clyde Valley Strategic Development Plan Area
[15]; and
planning authorities are cautioned against assuming that planning consent will not of itself guarantee the construction and commissioning of waste facilities - "....It is important that the planning system recognises that the market will be key to infrastructure delivery, and that planning consent does not in itself guarantee construction and commissioning. This is why figures used to determine need are linked to operational infrastructure, not planning consents granted."
[16]

Web Based Advice
[17]

[24] This is guidance which can be accessed online, rather than a policy document. It was issued at the same time as revised Annex B. It advises planning authorities that they are expected to deal with waste as a resource rather than as a burden. It states that Energy from Waste ("EfW") - such as that which would be produced by part of Shore Energy's facility - has an important part to play in meeting renewable energy targets. It repeats the statement in Annex B, under reference to article 16(1) of the Waste Directive, that its principles will be met when there is an adequate network of waste infrastructure established in Scotland; that will allow the proximity principle to be satisfied.

Planning Advice Note: PAN 63 Waste Management and Planning
[18]

[25] Planning Advice Note 63 ("PAN 63") was first issued in 2002 and was subsequently updated. It is, however, not a primary statement of policy. Whilst the annex to PAN 63 gives advice about self- sufficiency and the proximity principle including that structure plans should generally seek to provide sufficient facilities for managing local waste and that all waste should be disposed of or otherwise managed as close as practicable to the point at which it is generated, it was written when the versions of ZWP Annex B, NPF2 and SPP were in force which, in relation to waste policy, were superseded by the revised Annex B.

SEPA Thermal treatment of waste guidelines 2009 ("TTWG")
[19]

[26] SEPA does not speak for Scottish Government; rather, it is a statutory consultee on matters concerning the environment including waste policy. However, its understanding of government policy on waste is of clear interest being the understanding of those who are expert in this field. The original version of these guidelines referred to the proximity principle as meaning that, for their consultation purposes, they required applicants for planning permission for waste treatment facilities to specify where the waste would arise and to provide information demonstrating that there was a need for the proposed development since, as they saw it, the waste policy then in force applied the proximity principle so as to require that waste be dealt with as close as possible to where it was produced. However, following the publication of revised Annex B, they issued a further guidance note dated 25 May 2011
[20] in which they refer to that Annex and, in particular, to paragraph 4.1 as meaning that:

"6.2......it is acceptable for waste arising from any location within Scotland to be treated in any waste management facility proposed within Scotland. We will therefore not require information about the origin of the waste to be treated in a particular facility to be provided in a planning application."

Regarding the question of need, again under reference to the revised Annex B, they explain:

" 7.1 The ZWP establishes that there is a need for new waste management infrastructure to be provided until there is a national annual capacity available to meet the targets set out in the ZWP. The consideration of "need" for a waste management facility will be undertaken by the Planning Authority in accordance with the detailed guidance set out in Annex B of the ZWP. Planning applications should include information which demonstrates to the planning authority that a new proposal will support the achievement of an integrated sustainable waste management network and contribute towards meeting the need for facilities that address the Zero Waste requirements. We will not comment in relation to "need" in our planning responses for waste management infrastructure other than in 7.3 and 7.4 below."

[27] In paragraphs 7.3 and 7.4, SEPA refer to the Tables attached to revised Annex B, to future assessment being under reference to national need but, furthermore, reflecting the other arm of government policy - that which sees waste policy as an opportunity for economic growth, that the infrastructure requirements shown by them in Table is not to be taken as a limitation on development of the resource management sector.

[28] It seems, accordingly, clear that by the time the reporters were considering Shore Energy's planning application, there had been a marked shift in emphasis in Scottish Government's waste policy, partly to allow for the fact that, as at February 2011, there was not yet an established nation-wide waste management infrastructure - and partly because SEPA had calculated that there was a very substantial unmet need for such an infrastructure, bearing in mind that the majority of waste management requirements arose not in the domestic ie population related context but in other contexts. It was not, accordingly, helpful or appropriate to think in terms of restricting provision according to population centres. That being so, a nation-wide approach to waste management policy was adopted and, furthermore, was specifically judged by the Scottish Government to be consistent with the requirements of article 16(1) of the Waste Directive, given that Scotland was not yet at the stage of having completed the establishment of the "integrated and adequate network" in accordance with those provisions and which would be necessary if the objectives of the ZWP were to be met. Priority was to be given to the establishment of such a network and, in the meantime at least, proximity required to be approached on a Scotland wide basis. That is not, however, to say that the economic considerations which also feature as a key aspect of the policy may not also, according to this new policy, come into play when applying the proximity principle. Economic factors did not, however, arise for consideration in the issue before the court in the present case.

SEPA

[29] I have already referred to the contribution of SEPA to revised Annex B and to their TTWG. SEPA originally objected to Shore Energy's application on the basis that insufficient information had been provided regarding sustainable waste management. Their letter of objection was dated 23 October 2009 and was before the reporters
[21]. The terms of that letter show that SEPA were not, however, concerned about compliance with the proximity principle. At paragraph 1.7 they discuss the issue of proximity. After having noted that, on their interpretation of the then current policy, it was recognised that it would not always be practicable to manage waste at a location close to that where it arises and that there may be clear benefits from joint infrastructure solutions between areas, they note:

"The applicant states that the site's location has been chosen on the basis that 15 Local Authorities are within a 30 mile radius of the site. If the planning authority are satisfied that this specific location is acceptable in land use planning terms, we consider that this facility can be considered as a "joint infrastructure solution...".

[30] SEPA thus concluded, at that stage - prior to the publication of the ZWP and before the change in government policy demonstrated by revised Annex B - that Shore Energy had demonstrated compliance with the proximity principle.

[31] They issued a further letter in relation to Shore Energy's application, dated 17 January 2011
[22] ie postdating the ZWP but prior to the publication of revised Annex B. Whilst their position on the matter of a cap on municipal waste being sent to EfW was updated, they were not concerned about the issue of need. They state, in terms, that their position was that "need for additional waste management facilities has been identified.."
[23].

SCOTTISH GOVERNMENT POLICY: THE APPROACH OF EAST LOTHIAN COUNCIL

[32] We were referred to the treatment of a planning application for the development of an EfW facility at Oxwellmains, Dunbar, by East Lothian Council
[24] as being another example of the interpretation of government waste policy post revised Annex B.

[33] Following a public local inquiry in, it seems, 2010, a Reporter had allowed the developer's appeal and granted planning permission
[25] subject to conditions including a condition in the following terms:

" 5. Unless otherwise approved in writing by the Planning Authority, waste received and treated at the energy from waste facility shall be restricted to:

(1) Non-hazardous residual municipal waste arising within the East Lothian, Midlothian, Scottish Borders and City of Edinburgh Council areas; and

(2) Non- hazardous residual commercial and industrial waste arising within the East Lothian, Midlothian, Scottish Borders and City of Edinburgh Council areas."

[34] That is, originally, planning permission for the waste facility had, applying need and proximity as determinative issues limited the area from which waste could be transported to it. It was restricted to a defined local area, the reporter having considered the nature and extent of the local need for the facility. Following the publication of revised Annex B, the developer had applied for variation of that condition so as to allow them to extend the areas from where waste could be transported to the facility. They wished to be able to process waste transported to the facility from anywhere in Scotland. The Council interpreted revised Annex B and the alterations to the SEPA guidelines as demonstrating such an altered approach to the proximity principle that there were no good grounds for refusing the application for variation. The condition was, accordingly, varied so as to include the following:

"5. Unless otherwise approved in writing by the Planning Authority, waste received and treated at the energy from waste facility shall arise within Scotland and be restricted to:

(1) Non- hazardous residual municipal waste; and

(2) Non-hazardous residual commercial and industrial waste."

[35] The condition then made clear that waste arising outwith Scotland was not to be transferred to the facility without express consent. The reason for the condition was stated to be:

" Reason:

To ensure that waste is not being transported for treatment at the plant from outwith Scotland, in accordance with the guidance given in Annex B of the Zero Waste Plan."

Put shortly, because of what they interpreted as a significant change in government policy, East Lothian Council adopted a Scotland- wide approach to the relevant assessment of need.

APPLICATION TO THE COURT OF SESSION

[36] Being an appeal under sec 47 of the 1997 Act, sec 48(6), which provides that :

"The decision of the Secretary of State on such an appeal shall be final."

applied to the reporters' grant of planning permission. Accordingly, the only avenue of challenge remaining open to the Council under the legislation was under sec 239, the relevant terms of which provide:

"239. - Proceedings for questioning the validity of other orders, decisions and directions.

(1) If any person -

(a) is aggrieved by any order to which this section applies and wishes to question the validity of that order on the grounds -

(i) that the order is not within the powers of this Act, or

(ii) that any of the relevant requirements have not been complied with in relation to that order, or

(b) is aggrieved by any action on the part of the Secretary of State .....to which this section applies and wishes to question the validity of that action on the grounds -

(i) that the action is not within the powers of this Act, or

(ii) that any of the relevant requirements have not been complied with in relation to that action, he may make an application to the Court of Session under this section.

..............

(5) On any application under this section the Court of Session -

(a)........

(b) if satisfied that the order or action in question is not within the powers of this Act, or that the interests of the applicant have been substantially prejudiced by failure to comply with any of the relevant requirements in relation to it, may quash that order or action."

[37] The Council lodged an application under that section. Such appeals are, under Chapter 41 of the Rules of the Court of Session, to the Inner House but they may be remitted to the Outer House. By interlocutor dated 5 August 2011 the appeal was so remitted. The Lord Ordinary refused the appeal by interlocutor dated 18 September 2012 and the appellants have now reclaimed.

THE INQUIRY BY THE REPORTERS AND THEIR DECISION NOTICE

[38] At a preliminary meeting with the reporters, parties were agreed on what were the key determining issues in the appeal. The first was: "the need for this facility, taking into account the proximity principle, and the suitability of the preferred location"
[26] and is the only issue relevant in this reclaiming motion.

[39] The inquiry and hearing sessions took place on 15 - 18 February 2011. Evidence was led, submissions were made and a site visit took place. The day before the inquiry commenced, 14 February 2011, the Ministers published the revised Annex B to the ZWP which, as discussed, was an important document setting out their up to date planning policy for delivering a "Zero Waste" Scotland
[27]. Parties were aware of the document and took account of it in their presentations to the reporters. It was not suggested by any party that they could not adequately deal with the new document in the time available and there were no applications to adjourn the inquiry for that or any other purposes.

[40] At paragraphs 6 - 10 of their Decision Notice
[28], the reporters identify the relevant government policy by reference to the documents referred to above. It is of note that, at paragraph 10, they observe:

" 10. In making our determination, we must give considerable weight to the up to date statements of policy which are to be found variously in the Zero Waste Plan including the revised Annex B, the National Planning Framework 2, Scottish Planning Policy, and the Scottish Environment Protection Agency's 2009 Thermal treatment of waste guidelines. Where there is any remaining disconnect or residual ambiguity in the wording of these documents we must pay particular attention to the terms of the latest statement of policy as set out in the Zero Waste Plan and its newly published Annex B."

[41] It was not suggested by Mr Armstrong QC, for the Council, that they were wrong about that.

[42] In paragraphs 11 and 12, the reporters set out their understanding of the nature of the application and the potential use to which the facility could be put. In paragraph 12 , they state:

"12. If the facility, taken as a whole, was working to capacity then approximately 23% of the materials would comprise water which would be evaporated or recycled and some 46% would be converted to a refined biofuel. The remainder (approximately 57,600te) would be exported from the site in the form of 32,000te of recyclates, and 8,000te of char, with 17,600te (11% of the inputs) going to land fill. The facility would have a maximum output of 10MW of electricity per annum. Of this 3MW would be used in the facility, and 7MW exported to the national grid."

[43] This is actually a short reference to detailed information that was presented to the reporters about the Glasgow Waste Composition Analysis and a study of the actual experience of a similar facility in Merseyside, in evidence, and which was put forward as indicative of the potential outcomes at the Shore Energy site
[29].

[44] In paragraph 13, they note the nature of the objections raised and state their task as being to judge:

"...whether the proposed development would support the objectives of sustainable waste management and, related to that, the targets set out in the Zero Waste Plan."

adding that , in short, that meant that:

" ....in our determination we must assess whether the commercial ambitions of the appellant are compatible with securing objectives of national waste management and the targets incorporated within it." (my emphasis)

[45] Again, it was not suggested that they were wrong about that.

[46] At paragraph 14, the reporters expand on the subject of the effect of revised Annex B, saying:

"Both confirm that the requirements of the EU Directive will be met when there is enough infrastructure to deal with all waste arising annually in Scotland with any imports to the country broadly balancing exports. Table 1 in Annex B sets out the Additional Operational Waste Management Infrastructure Capacity Required to meet the Zero Waste Plan Targets (by Development Plan Area). It is intended that these figures will be updated annually and they would take account of any reduction in the waste streams requiring treatment. In the meantime, they are the most up to date and authoritative statement of need available to us. The figures demonstrate that there is a pressing need to provide additional operational waste management infrastructure if the targets incorporated within the Zero Waste Plan are to be met by 2025."

[47] Once more, it was not suggested that they were wrong in that assessment of the relevant policy and of the then current state of affairs.

[48] At paragraph 15, the reporters again note the extent of the national shortfall in provision of the required waste management infrastructure; the existence of that shortfall is regarded by them as a key factor. They observe that no ceiling is placed on what approvals for waste management facilities can be granted within the Glasgow and Clyde Valley Development Plan Area or, indeed, the number of facilities that may be permitted by SEPA. Through the remainder of that paragraph and paragraphs 16 - 21, the reporters explain their reasons for concluding that Shore Energy's proposal would not conflict with government policy on waste management. Central to their reasoning is their interpretation of that policy as being that the government's approach to application of the proximity principle is that at this initial stage, given the terms of article 16(1) of the Waste Directive, priority has to be given to the need for an integrated and adequate network of waste recovery and disposal installations to be established. They, accordingly, approach their considerations "thinking strategically and across local planning boundaries"
[30] and follow a Scotland - wide approach as opposed to one which would "open the door to 32 local solutions to treating waste"
[31]. They clearly considered that that was what national policy required them to do. It is clear that, given the extent and urgency of unmet national need there could, in the reporters' view, be no question of refusing the application on the ground raised in the first issue
[32].

[49] I should make specific mention of the reporters' discussion at paragraph 17 because it was the focus of specific criticism on behalf of the Council both before the Lord Ordinary and before this court. They state that they could not identify definitive guidance on what amounted to an integrated network of waste recovery but were satisfied that it would involve an arrangement of facilities of suitable size and location with sufficient infrastructure to meet the national targets in the Zero Waste Plan. They concluded that the proposed development - which would bring in waste materials from one location and export them, and power, elsewhere - would form part of such a network as would the movement within the site itself from the materials recovery part of the installation to the pyrolysis plant.

[50] At paragraphs 22- 33, the reporters consider the suitability of the location taking account of the relevant development plan. The reporters then proceed, over paragraphs 22 - 71 to deal carefully, methodically and in a manner which demonstrates sensitivity and understanding of local anxieties with the matters raised in the second issue (traffic impact, landscape, visual amenity, habitats, ecology, air quality, odour, human health, land quality and flood risk.)

[51] The reporters' grant of permission was subject to 24 conditions which highlight the role that SEPA will play at the construction stage, limits the amount of waste to be transported into the site to a maximum of 180,000 tonnes per year and makes it clear that no waste may be accepted onto the site until the facility is operational.

THE LORD ORDINARY'S OPINION

[52] Before the Lord Ordinary, the argument for the Council was, essentially, that assessment of need for the purposes of the first issue necessarily required the reporters to determine the area to be served by the proposed facility and the extent to which it could be met by other actual or proposed waste management developments. The Council did not accept that a Scotland - wide approach was appropriate.

[53] The Lord Ordinary rejected the Council's approach. Whilst he may have, wrongly, assumed that the North Lanarkshire area and the Glasgow and Clyde Valley Structure Plan area were one and the same
[33], that error is not material since, having considered the relevant policy documents, his conclusion was that revised Annex B was "quite capable of bearing"
[34] the meaning that it represented a new policy direction to the effect that the relevant need assessment area was Scotland as a whole
[35]. Further, he was satisfied that the reasons given by the reporters were intelligible
[36] and that they had had regard to the proximity principle insofar as it was recognised by current policy. He expressed the view that:

"A feature of the new national policy direction is that it subordinates the proximity principle to need and even tends to drain the proximity principle of content."
[37]

[54] He observed, further, that any question as to whether or not Scottish Government policy on waste management represents an appropriate implementation of the Waste Directive or whether there had been proper consultation in relation to the change of policy were not issues before him
[38]. Likewise, they do not arise as issues in this reclaiming motion.

[55] The Lord Ordinary dealt with and rejected other submissions made on behalf of the Council relating to the reporters' approach to the concept of an integrated network of waste recovery , to whether or not the reporters had misunderstood the process, whether or not they had failed to apply a strategic policy in the structure plan and whether or not they had erred in failing to impose a condition restricting the input of waste into the facility to waste arising in North Lanarkshire.

SUBMISSIONS FOR PARTIES

[56] As all counsel provided detailed written notes of argument, I do not propose to rehearse their submissions in detail. They can be summarised as follows.

SUBMISSIONS FOR THE COUNCIL

[57] All of the submissions made by Mr Armstrong for the Council were said to be in support of his primary argument which was that the reporters had failed to set out adequate and intelligible reasons and had not considered key material considerations.

[58] The 'key material considerations' which they were said to have failed to consider were the identification/application of the relevant network of waste recovery, the nature of the waste management process and an aspect of the relevant development plan.

[59] As to the relevant Scottish Government policy, Mr Armstrong submitted that it did not set out the relevant area for the consideration of need, it did not of itself justify the present proposal, it was left to the decision maker to decide the issue of need having regard to the proposal and the evidence before him, it did not alter the proximity principle as stated prior to revised Annex B and it did not exclude consented and proposed infrastructure from being a material consideration when assessing need. What it did, in his submission, do was it set out guidance on the application of the proximity principle - in terms of which there was nothing to say that need and proximity were to be considered on a Scotland-wide basis - and that regard required to be had to the waste hierarchy.

[60] At the heart of his reasons challenge was Mr Armstrong's submission that the reporters had failed to state what geographical area they had had in mind when considering the issue of need. He added, however, that if they had clearly set out in their reasons that they were approaching matters on the basis that they thought that the correct area was the whole of Scotland, he was not saying that that was unreasonable or that it was an approach that was not open to them as a matter of law. He thus appeared at one point at least, to accept that, notwithstanding his earlier submissions on the meaning of the policy, it fell to be interpreted as being as I have stated it above, namely that revised Annex B did indeed represent a clear shift to a Scotland- wide approach to need and proximity.

[61] In addition to his submission that the reporters had failed to identify the appropriate geographical area, Mr Armstrong submitted that their reasons failed to show that they applied the proximity principle and Scottish Government's advice in relation to it, that they had failed to assess the need for this particular type of facility, that they had failed to set out a basis for there being a pressing need for this type of facility, and failed to show that the reporters had made an assessment of previously consented development when assessing whether there was a need for this facility.

[62] Mr Armstrong's submission to the effect that the reporters required to ask whether there was a need for this particular type of facility was based on an assertion that they required to do so standing the fact that it was government policy to restrict EfW. This argument was an aspect of the Council's position being that the reporters could and should, at least, have restricted planning permission so as to exclude the EfW aspect of the development - the most undesirable aspect of the proposal in the opinion of some of the objectors - not that that was pressed as a separate ground.

[63] Turning to material considerations, regarding the matter of an integrated network of waste recovery, central to Mr Armstrong's submissions was the proposition that since government policy was that there was to be an integrated network of waste management facilities, that involved a geographical spread. His criticism of the reporters was an assertion that they had not applied that policy.

[64] Regarding the waste management process itself, Mr Armstrong submitted that the reporters had misunderstood the process which they were considering in respect that the figures quoted by the reporters at paragraph 12 of the Decision Notice could not be taken as absolutes; the actual outcomes from waste processing would depend on the waste brought onto the site.

[65] Regarding the development plan
[39], under reference to the reporters' statutory duty to have regard to it
[40] , whilst Mr Armstrong accepted that an aspect of it previously relied on by the Council (policy 9A(vi)) had been overtaken by revised Annex B, policy 10.9 still applied and it was in terms which required planning proposals to be justified in terms of need and the proximity principle.

[66] Whilst much of Mr Armstrong's argument was a rehearsal of what he submitted to the Lord Ordinary, he also submitted that the Lord Ordinary had failed to give adequate reasons for rejecting his submission that the reporters had not properly interpreted and applied the proximity principle and government policy in relation to it, that the Lord Ordinary's approach to the matter of an integrated network of waste management was at odds with government policy, that the Lord Ordinary had erred in failing to accept that the reporters had, in their paragraph 12, made a material error regarding the nature of the process and that the Lord Ordinary had not properly understood the Council's concession regarding the development plan policy 9.

[67] Mr Armstrong's written note of argument contains quite a substantial number of references to authority largely for the uncontrovertible propositions that the decision maker in a planning matter requires to provide intelligible reasons, that whilst the decision maker's obligation to have regard to government policy does not mean that he requires to follow it, if he is departing from it, he requires to explain why he is doing so, that if the decision maker misunderstands the relevant policy then his decision will be as defective as if he had not had regard to the policy at all, that a factor may be material without being the dominant reason for the decision and that it is not for the court to read into a decision something more coherent than a fair reading of it justifies. Ultimately, however, those on which he really seemed to rely in support of his submissions seemed to be confined to: European Commission v Belgium; South Bucks District Council v Porter No 2 [2004] UKHL 33, Moray Council v Scottish Ministers (2006) SC 691, and Gransden v Secretary of State for the Environment [1987] P & CR 86. In his written submission , he relied on Gransden for the proposition that the decision maker is bound to apply a correct understanding of the relevant policy and provide intelligible reasons for her decision. In oral argument, however, he relied on it in support of a submission that government policy could not make that which was relevant irrelevant; therefore, paragraph 4.8 of revised Annex B could not render the existence of prior planning permissions irrelevant since they were manifestly of relevance.

SUBMISSIONS FOR THE MINISTERS

[68] As abovenoted, prior to the Supreme Court's judgment in Tesco Stores Ltd v Dundee City Council, the Ministers had refrained from stating what, in their submission, was the correct interpretation of the relevant waste management policy. That is, in the circumstances, understandable. They now, however, do so. That is also, standing Lord Reed's observations in Tesco, understandable. It is, according to Mr Thomson QC, that the relevant policy is to the effect that need and proximity require to be considered on a national ie Scotland- wide basis. That is required because of the objectives of ZWP and because, at this stage in the development of the necessary national waste management infrastructure, need requires to be given more weight than proximity. Further, it was clear that ZWP deliberately avoided taking an over-prescriptive approach and that it sought to create the necessary conditions for the private sector to provide infrastructure. Mr Thomson made detailed submissions in support of that interpretation of the policy under reference to the documents to which I refer above, distinguishing between those which were, properly, policy documents and which were guidance documents or examples of policy interpretation (such as by SEPA). That approach to the relevant policy underlay all Mr Thomson's submissions in relation to the reasons part of the Council's challenge.

[69] Mr Thomson submitted that the reporters had correctly identified and understood the relevant policy and that was apparent from their Decision Notice. Table 1 of Annex B was crucial and the reporters had correctly had regard to it; there was no requirement for the reporters to enquire any further about need once they had established via Table 1 that there was a national need. Moreover, that need was shown to be substantial and pressing. The proximity principle would in fact be applied every time it was referred to and the question of whether or not there was a need for additional waste infrastructure was addressed. The present position was that Table 1 demonstrated both local and national need insofar as the Shore Energy application was concerned and that the waste hierarchy and proximity had been accounted for in arriving at it.

[70] A separate theme in Mr Thomson's submissions related to the fact that the reporters had recognised - and required to recognise - that this was a commercial venture and that if it all took too long to get facilities like this into operation then they would cease to be commercially attractive. Therefore it was necessary, as was within the knowledge of these experienced reporters, to make urgent progress

[71] Mr Thomson was also at pains to stress that the Council's population- based approach - as exemplified by certain submissions made by Mr Armstrong to the reporters
[41] - was wholly unjustified. It was contrary to the relevant policy which required a Scotland- wide approach to the assessment of need. Further, the existence of prior grants of planning permission were not relevant to the assessment of need, given the terms of paragraph 4.8 of revised Annex B. The existence of such grants could be a material consideration justifying the refusal of permission - the Ministers were not saying that that was wholly irrelevant - but that was another matter; it could not be a good reason for concluding that there was no need for the facility proposed.

[72] Turning to the reasons challenge, Mr Thomson submitted that it was not incumbent on the reporters to explain all the matters referred to by Mr Armstrong. In particular, they did not require to identify a particular geographical area in their assessment of need - they considered both Scotland and the development plan area and that was enough, the proximity principle did not require separate consideration, it was not necessary to consider whether or not there was a need for this particular type of facility and, for the above reasons, they did not require to have regard to other consented or proposed infrastructure. The Decision Letter was a model of clarity and lucidity. He relied on the Moray Council case at paragraphs 30 and 31. In any event, it would only be if there was a real possibility that the decision maker would have reached a different conclusion if he had taken account of material matter which was overlooked that it could affect the validity of his decision: Bolton MBC v Secretary of State for the Environment and Greater Manchester Waste Disposal Authority [1991] 61 P& CR 343 per Glidewell LJ at p.352.

[73] Regarding the integrated network of waste management facilities, Mr Thomson submitted that it was clear that the reporters had properly understood the arguments and that, at this stage in the evolution of the system, it could not be argued that there was any problem with their approach.

[74] Regarding the waste management process, the criticisms were without substance. There was no indication of the reporters having misunderstood the process.

[75] Regarding the matter of having regard to the development plan, the reporters had carefully considered it. In relation to policy 10, it only applied to proposals which did not meet the criteria in policy 9 and since the reporters were satisfied that policy 9 was met, it did not apply. However, they had indicated, correctly, that if it did apply, it was satisfied given need, the benefits in terms of the ZWP, the suitability of the location and the limited impacts that would arise. They had not erred.

SUBMISSIONS FOR SHORE ENERGY

[76] For Shore energy, Mr Mure QC's approach to government policy, need and the proximity principle was in accordance with that of the Ministers, as was his response to the submissions that the reporters had failed to provide adequate reasons and failed to take account of material considerations.

[77] He added that Shore Energy would hope that this plant would be reasonably close to the source of waste. The recovery part of the facility was beside the pyrolysis plant (which, in such circumstances was not always the case). It was close to towns and cities which generate waste. It was close to the electricity grid. It was close to waste installations in the West of Scotland. It would be in the right place to make real inroads into the pressing national need that had been shown to exist. Even at disaggregated level, there was still a substantial need.

[78] Regarding other consented or proposed facilities, not only was it clear that they were not relevant when assessing need, the facilities referred to by the Council were not yet operational in any event and it could not be assumed that the market would in fact agree to build and develop. There could be no guarantees. It was the understanding of Shore Energy that not only had nothing been built at Drumshangie, the company which owned the land was, according to a search at Companies House, in administration. As for Dovesdale Farm, its application for a permit had been withdrawn last year. These experiences showed why the policy sought actual operating capacity, not simply possible future operation based on consents given or minded.

[79] As for the integrated network of waste management, Shore Energy had provided the reporters with information about the network role that they would play including the details of an agreement entered into to obtain waste for processing and the locations of facilities that could receive recycled products from the facility. Regarding the nature of the process, there was no substance in the submission that the reporters had not understood it correctly. Nor was it the case that the reporters had failed in their obligations anent the development plan.

Discussion and Decision

[80] This is an application under sec 239 of the 1997 Act. As such, it cannot succeed unless the Council demonstrates that the reporters' grant of planning permission was not valid. That is, this court can only be concerned with the legality of the reporters' decision, not with the merits of the decision to grant planning permission. It is not for us to interfere with matters of planning judgment (Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759 at p. 780). What can, in a sec 239 application, be considered by the court is:

whether or not the decision - maker correctly identified and applied the relevant policy( as interpreted by the court);
if the application of that policy involved the exercise of judgment by the decision - maker, whether or not that exercise of judgment was irrational or perverse (Wordie Property Company Co Ltd v Secretary of State for Scotland 1984 SLT 345 at p.345 -8; City of Edinburgh Council v Secretary of State for Scotland 1998 SC (HL) 33 at 44 - 45; Moray Council v Scottish Ministers 2006 SC 691 at paras 29 and 30); whether the decision -maker has given proper and adequate reasons for his decision, leaving the recipient of the decision in no real or substantial doubt as to what his reasons were - but this does not require the reasons to be subjected to detailed textual analysis or scrutiny such as would apply if it were a statute or a conveyancing document (Wordie at p.348; Moray Council at paras 28 - 30 ; Glasgow District Council v Secretary of State for Scotland 1992 SCLR 453 at p.458).

In the light of the first of the issues they had to determine, the reporters had to proceed as follows. They required to consider whether or not the development which Shore Energy proposed was in accordance with the relevant policy and if not, whether there were any material considerations which justified a departure from the policy. They required, in the course of their considerations, to have regard to the provisions of the development plan, insofar as they were material
[42]. They required to have regard to any other material considerations
[43]. Materiality, in that context, was a matter for their judgment. What also was for their judgment was the assessment of whether or not, on the facts before them, the development proposal would fall within the relevant policy or not.

[81] Regarding the relevant policy, the reporters required to proceed on the basis of what, objectively interpreted, it meant. In City of Edinburgh Council v Secretary of State for Scotland 1998 SC(HL)33 Lord Clyde said, at p.44:

"[The decision maker's] decision will be open to challenge if he fails to have regard to a policy in the development plan which is relevant to the application or fails properly to interpret it."

and, in Tesco Stores v Dundee City Council per Lord Reed at paragraph 18, when referring to that passage from the speech of Lord Clyde and discussing policies disclosed by development plans, he states:

"As in other areas of administrative law, the policies which it sets out are designed to secure consistency and direction in the exercise of discretionary powers, while allowing a measure of flexibility to be retained. Those considerations point away from the view that the meaning of the plan is in principle a matter which each planning authority is entitled to determine from time to time as it pleases ......policy statements should be interpreted objectively in accordance with the language used."

I have, accordingly, set out my interpretation of the relevant policy in paragraphs 14 - 27 above. Although the Lord Ordinary was not addressed on the import of the judgment in the Tesco Stores case, the meaning which he considered the policy was capable of bearing appears to accord with that interpretation albeit that I would not go as far as saying that the policy tends to drain the proximity principle of content. Rather, as was submitted on behalf of the Ministers and Shore Energy, proximity is to be considered in a Scotland - wide context, at least for the time being since there is such a substantial national shortfall in waste management facilities that urgently requires to be addressed. That that is also the evident understanding of SEPA lends support to that interpretation as does the progress and ultimate disposal of the East Lothian application, also referred to above.

[82] It follows that I do not accept the Council's proposition that the relevant policy does not set out the relevant area when considering need; the relevant area is Scotland. Whilst, on one view, they are correct in saying that the policy does not alter the proximity principle - that principle has always been as stated in article 16(3) of the Waste Directive and nothing said or done by Scottish Government has suggested otherwise - that is really beside the point. As the terms of article 16(3) demonstrate, application of the principle to a given set of facts will be a matter for Member States to work out in practice. The given set of facts against which Scottish Government formulated its policy on proximity when revised Annex B was published was that there was a substantial national shortfall in waste management infrastructure provision that urgently required to be met.

[83] Thus, the guidance on the proximity principle that was, through the policy, provided to the relevant decision makers was that they were to look Scotland- wide, not just locally. Need remained a relevant and important consideration; it was to be prioritised and to be considered in a Scotland - wide context.

[84] I turn to the question of whether the reporters required, when considering need, to take account of other similar waste management installations for which consent had been granted or in respect of which the Council were minded to grant permission. I do not accept that they required to do so. Paragraph 4.8 of revised Annex B is clear and is logical in the context of the assessment of need. It cannot be said that any of the need is actually met unless and until an appropriate waste management installation becomes operational. That is not to say, as Mr Thomson rightly recognised, that the existence of other planning consents may, in a particular case, amount to a material factor amongst reasons provided for refusing consent but that was not, of course, the issue here. None of that is, in my view, inconsistent with what was said by Woolf J, as he then was, in the case of Gransden, regarding it not being open to government, via policy statement, to render irrelevant that which, applying the relevant statute, was a material factor. It was, in any event, a rather different case which involved a misinterpretation of planning policy but was ultimately decided on the basis that even without that misinterpretation, the planning inspector's decision would have been the same.

[85] The duty of the decision - maker to provide intelligible reasons hardly requires repetition nor does the reminder that a reporters' Decision Notice ought not be subjected to detailed textual analysis or the sort of scrutiny that, for instance, statutory or contractual provisions require. In the present case, for the purposes of the first issue, the reporters required to show that they had properly understood the relevant policy, properly understood the material factors and judged whether, in the light of that policy and those factors, planning permission ought to be granted within the bounds of the discretion available to them.

[86] I am not persuaded that the reporters' Decision Notice discloses anything other than a correct understanding of the policy and would refer to my above discussion of the content of their notice in that regard, particularly under reference to the passages between paragraphs 10 to 21. Nor am I persuaded, given the content of that policy, that they required to identify any geographical area other than Scotland as being relevant to their considerations. It is plain that that is what they did. Equally, it is clear that they did consider the proximity principle, consider whether it meant, as was contended, that they required to look at a lesser local area. They determined that, in the light of revised Annex B, the localised approach, as urged upon them by the Council and objectors, was not one which the proximity element of the relevant up to date policy required them to adopt. They decided, in terms, that "the transport of inputs from elsewhere to the appeal site" would not breach that part of the policy. I do not accept that the reporters did other than show that they had interpreted the relevant policy correctly, that they had regard to many material factors (including those matters raised under the second issue), what their understanding of those factors was and why, in the light of them, the relevant policy and the conditions that they were able to and did impose, they decided to grant the permission that was sought.

[87] Further, on the particular facts of this application, even if it were the case that the relevant geographical area when considering need was the development plan area, the answer had to be that there was still a substantial unmet need, given the figures in Table 1. Mr Armstrong's attempt to reduce those figures by reference to the local population was, I agree, unwarranted given that most waste arises from non-domestic sources.

[88] Regarding the 'reasons' aspect of the challenge, I would only add two observations. First, all those matters which, according to the submissions made on behalf of the Council, were not covered in the reasons can be identified as having been considered and dealt with by the reporters on the most straightforward reading of their terms. Indeed, as matters developed, what was presented as a 'reasons' challenge, sounded rather more like a challenge to the merits of the decision itself. That impression was reinforced by the fact that at no point was it suggested that the Council were in some way prejudiced by an inadequacy in the reasons. That calls to mind the observation of Lord Browne of Eaton- under- Heywood in the case of South Bucks District Council v Porter (No 2) at para 36:

"A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequate reasoned decision."

[89] In all these circumstances, I am satisfied that there is no merit in the 'reasons' part of the challenge to the validity of the reporters' decision.

[90] I move then to the 'material considerations' aspect of the challenge, taking the matter of the "integrated network of waste recovery/management" (the expressions were used interchangeably) first. I am not satisfied that the Council's criticisms are well founded. Their argument is based on an erroneous premise namely that the reporters departed from government policy and the structure plan. Yet the reporters plainly took care to have regard to the up to date policy (and, indeed, its history), checked to see if there was any specific guidance regarding the concept of an integrated network of waste recovery and, on finding none, drew their own conclusions. There is nothing wrong with them having done that and their conclusions were plainly in line with the overall, Scotland- wide, approach of revised Annex B. Further, they noted that, in this case, there would be a network within the site itself given that it would accommodate both a materials recovery facility and a pyrolysis plant, and outwith the site given the power that would emanate from and waste and recovered materials that would come into and be distributed from the site. Having had regard to the nature of the proposed processing work at the site, the reporters' observations at paragraph 17 to the effect that, in operation, the installation would inevitably be part of a larger network cannot be gainsaid. It was certainly a judgment that they were entitled to make on the basis of the evidence before them.

[91] Turning to the reporters' understanding of the process, I did not understand the Council to dispute the evidential background to their summary in paragraph 12 of the potential outcome if the installation were to go ahead. I refer to that evidential background at paragraphs 42 -3 and footnote 28 above. That potential outcome is not expressed as an absolute or a guarantee and it is clear that the reporters were aware of that. I do not accept that this criticism is well founded.

[92] Finally, I turn to the matter of the development plan. I accept Mr Thomson's submissions. Even accepting that the Council's concession related to only one part of policy 9, its subsisting criteria were, on the reporters' assessment of need - which had to be carried out in accordance with revised Annex B - met. That was the reporters' conclusion and it was one which they were entitled to reach. Even if the relevant criteria of policy 9 had not been met, the urgent unmet need for these facilities, the suitability of the location and the limitation of impacts anticipated were material considerations which the reporters would have been entitled to rely on so as to satisfy the requirements of policy 10, which is what they say would, in that event, have been their position. It cannot, in my view, be said that they would not have been entitled so to judge matters. Again, the criticism of their decision under reference to the development policy is, to my mind, without foundation.

[93] It follows that I agree with the Lord Ordinary's conclusion to the effect that the Council had not demonstrated that the reporters' decision lacked the requisite validity. That being so, this reclaiming motion ought, in my opinion, to be refused.

$Description: \\SUPREME1\typists\COMMON\Opinions\Opins2001\cos-blu.gif$

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

Lord Mackay of Drumadoon

Lady Smith

Lord McEwan

[2013] CSIH 58

XA67/11

OPINION OF LORD McEWAN

in the reclaiming motion

NORTH LANARKSHIRE COUNCIL

Appellants and Reclaimers;

against

SCOTTISH MINISTERS AND

SHORE ENERGY

Respondents:

_______________

Act: Armstrong QC; Simpson & Marwick

Alt: Thomson QC, E.G. Mackenzie; Scottish Government Legal Directorate

Alt: Mure QC; Brodies LLP

20 June 2013

[94] I am in agreement with your Ladyship and with the result that this reclaiming motion falls to be refused. I wish to add observations of my own on a number of the points raised.

[95] Carnbroe is a little village in North Lanarkshire near to the busy A8 between Glasgow and Edinburgh. Close to it, is the former site of the business of Shanks and McEwan. In the papers before the court the whole area is described as having a century of industrial activity. The particular site is described accurately as "brownfield urban land". It is part of the established industrial land supply and could expect to be reused. Shore Energy want to build their recycling and pyrolysis facility at the Carnbroe site. It is to be a facility which will recycle waste and make energy from waste. They say there is a need for such a facility in the relevant area, and they rely on the policy of the first respondents which they say means that there is a national need for such a facility against a background of a Zero Waste Policy (ZWP). They sought planning permission in June 2009. The reclaimers, against the advice of their officials refused permission in a short letter. The matter then went to an inquiry and in May 2011 two reporters granted permission. It then proceeded under section 239 to this court and in 2012 Lord Stewart confirmed the decision of the reporters.

[96] Before us a number of matters were agreed or at least not seriously disputed. Some relate to facts, some to law and some are mixed. It is not disputed that within a ZWP there is a hierarchy of five types viz no waste, reuse, recycle, energy from waste (EfW) and landfill. Landfill is to be avoided if at all possible. It is a solution of last resort. It was agreed that in Scotland there were a number of other facilities similar to the one in issue where permission had been granted, minded to grant or were pending. A list of these can be found in the papers before us. Nothing was said to us to suggest that any of these were "on stream". The financial health of some of the operators is unknown.

[97] It was accepted that there are now no adverse site specific objections to Carnbroe. The alleged traffic and environmental considerations are not live issues. There is no issue but that both reporters were very experienced. It is a fact that the policy of the Ministers changed on the day before the inquiry. While the timing of that then may have been unfortunate, no issue about it arose before us. It was well within the experience of those appearing at the inquiry to deal with. It has not been claimed that it prevented full examination of all relevant matters.

[98] Lastly, as to fact, it was agreed that a Carnbroe type facility was market driven. The operator had to have expertise otherwise SEPA would not grant the necessary permit. They had to secure contracts at both ends, supply and sale and have the capital in place to invest.

[99] It was accepted in view of the recent Tesco decision that the interpretation of what the first respondent's policy meant was a matter for the court, although what that actually was, was not greatly in dispute. It was agreed that the matter had to be looked at against the background of the two relevant European Directives relating to waste.

[100] It was agreed that the waste targets were updated annually against an end date of 2025. It was accepted that the Lord Ordinary had made a minor error in his description of the regulations, however nothing turned on that.

[101] With all these matters in mind; something must now be said about the reporters' decision of 18 May 2011. In the first place it has to be said that it would not be easily presumed that two experienced reporters would fall into error in the way contended for by Mr Armstrong. He said they had not given adequate reasons for their decision and had failed to understand the appellants' policy. He asked a number of questions of the decision. On the other hand, unsurprisingly, both counsel for the respondents variously described the letter as "a model" and as "admirable".

[102] The report itself is carefully and properly structured. The generality and detail is found in paragraphs 1 to 62. Thereafter the question of conditions is looked at and reasons advanced for imposing the 24 conditions on the site. I draw attention to one of these (No. 2). That makes it quite clear that the reporters appreciated the important point that this merchant operated facility would have to be "up and running" before any waste would come to Cambroe.

[103] As I have already said a number of matters are not now live issues but it is important to note the care with which the reporters analysed each of these and gave full reasons for their conclusions. Beginning with the locus at paragraph 21 through to the benefits at paragraph 61, traffic, visual impact, ecology, health and flood risk all receive measured consideration.

[104] The issue, of course, is the policy. The report makes it clear that the strategy aims at zero waste and is a national strategy., They have looked at the matter from a Scotland perspective (see para. 61). It is obvious from that, that if the whole issue was to be Scotland based, waste of all kinds may need to cross planning boundaries. In paragraphs 6 and 7 they have taken account of the revised policy and (para 17) have looked to find an integrated network for each element in the hierarchy. The Scottish targets for ZWP have been fixed (para 7) and the need for infrastructure to fulfil these targets is great and delivery is urgent (para 23). In my opinion it is impossible to argue that the reporters, having set out these, and other factors, have shown that they misunderstood the policy. On the contrary they have demonstrated how well they have understood it. Some negative factors confirm that view. They criticise the appellants' embargo on approvals based on population or other criteria. I think they were correct to do so (para 15). They reinforce that by remarking that even the appellants, looking to "proximity", had to accept cross boundary strategy (para 18). I have no criticisms of what they say in their reasoning about other sites, actual or potential. The critical factor is that the whole operation is market driven and depends on capital, loans, finance and customers (see paras 15 and 19).

[105] Without needing to award the accolades of Mr Thomson and Mr Mure, it is clear to me that the report in general and particular is sound and discloses no error. Mr Armstrong's argument does not answer his own questions.

[106] I am further of the view that the report is consistent with the European dimension. I now look briefly at the case of The Commission v Belgium 1992. The facts are complex and not the same as in the case before this court. The problem which arose was that into the Wallonia region of Belgium waste of different kinds was coming from other regions of Belgium and from other countries. Under the relevant directions at the time, there was an obligation to supervise and control within the EC transfrontier shipment of hazardous waste. The relevant environmental authority in Wallonia made rules governing the use of tips, depots and treatment installations for waste from foreign countries or other regions of Belgium. That became in essence a prohibition. The decision in the case so far as transfrontier shipment of hazardous waste was concerned, was that Belgium was not fulfilling its obligation under the directive. For local waste the rule was upheld.

[107] It seems to me that this case emphasises the need for flexibility in a policy where cross border trafficking of waste is to be expected.

[108] I look finally at Gransden v Secretary of State for the Environment 54 P CR 86. It concerned a refusal of planning permission for housing at Rainham. The local authority had a policy which, in the absence of an identified supply of land, created a presumption in favour of planning permission. The refusal went to inquiry before an inspector and he inter alia took some account of possible future housing development at Chatham Dockyard. Before Woolf J both parties contended that this was an error. It seems to me (p 93) that the judge had some sympathy with the alleged error into which he himself might have fallen. He escaped a decision on the point by assuming without deciding that it was an error but it did not affect the final decision to refuse which was inevitable on other planning grounds. Woolf J also emphasised the importance of the fact that it was for the court to interpret the policy.

[1] See: Document 6 for the Supporting Statement to Shore Energy's planning application (dated June 2009).

[2] i.e. such waste as was not covered by Directive 84/631/EEC regarding the transfrontier shipments of hazardous waste - Belgium's blanket prohibition in relation to that waste was held to have failed to conform with that Directive.

[3] At paragraph 34.

[4] See paragraph 27: " As was explained to the Court, moreover, the distinction between recyclable and non-recyclable waste is particularly difficult to apply in practice, especially with respect to controls at frontiers. That distinction is based on factors which are uncertain and liable to change in the course of time according to technical progress. Furthermore, whether waste is recyclable or not also depends on the cost of the recycling process and consequently on whether its proposed reutilization is viable, with the result that classification of waste is necessarily subjective and depends on various factors."

[5] See: Lord Reed at paragraphs 18 - 19.

[6] Document 2.

[7] Document 22.

[8] Document 15.

[9] See p. vii of ZWP, paragraph 5 of the 'Introduction'.

[10] See p.3 of ZWP paragraph 3.

[11] See ZWP at p.9.

[12] Document 16.

[13] Revised Annex B paragraph 4.1.

[14] " ..these allocated capacities should not be treated as a limit. It is also acknowledged that authorities can work in a number of arrangements spatially and operationally to deliver the figures and not just in the groupings presented in the table." (Annex B, paragraph 4.5)

[15] Those figures can be compared with Shore Energy's proposal which was, in terms of their planning application , that their facility would process 160,000 tonnes of waste i.e. a fraction of the unmet need for the area in which Carnbroe is situated let alone in relation to the wider unmet need in respect of all waste, not just 'population related' waste (domestic waste) which is far exceeded by non-domestic waste; the relevant proportions are approximately 15% domestic and 85% other waste.

[16] Paragraph 4.8. It is, however, worth noting that when assessing need as per Table 1, SEPA did in fact take into account the facility at Drumshangie for which consent had been granted although it had not become operational and also, a facility at Greengairs, for which the Council were 'minded to grant' permission (see: Report to Committee of the Council dated 15 February 2010, p.45 para 7).

[17] Document 24.

[18] Document 23.

[19] Document 18

[20] Document 19 p.45 -6.

[21] Document 21.

[22] Document 20.

[23] Document 20 p.2 para 4.

[24] East Lothian Council Application no. 12/00263/PM by Viridor Waste Management Limited.

[25] East Lothian Council reference no. 08/00467/FUL.

[26] Appeal Decision Notice para 4 - doc 1.

[27] See revised Annex B (doc 16) to Scotland's Zero Waste Plan (doc 15)

[28] Document 1.

[29] See: Shore Energy's Supporting Statement, p.11-12; Document 6.

[30] Paragraph 18.

[31] Paragraph 18.

[32] That conclusion is explained in paragraphs 18 and 61.

[33] Lord Ordinary at paragraphs 98 -99.

[34] Lord Ordinary paragraph 106. Although the Lord Ordinary's opinion was issued in September 2012 , the hearing of the application had taken place in January i.e. prior to the issuing by the Supreme Court, in 21 March 2012, of its judgment in Tesco Stores v Dundee City Council, at a time when it was thought that it was enough if the decision maker had afforded to a policy a meaning that its words were capable of bearing (see: City of Edinburgh Council v Scottish Ministers (2001) SC 957).

[35] Lord Ordinary at paragraph 106.

[36] Lord Ordinary paragraph 107.

[37] Lord Ordinary paragraph 108.

[38] Lord Ordinary paragraph 108.

[39] The Glasgow and Clyde Valley Joint Structure Plan 2006.

[40] See sec 25(1) and 37(2) of the 1997 Act.

[41] See: Closing Statement to the Inquiry for the Council (Document 4), particularly at para 4.4. where it is submitted that the reporters should approach their consideration of need by reducing the figures in Table 1 to allow for the fact that the population of the Council's area was only 20% of the total structure plan area and that permissions had been or would be granted for the Drumshangie and Greengairs sites .

[42] See: sec 37(2) of the 1997 Act.

[43] Also see: sec 37(2) of the 1997 Act.