Water companies are public authorities and must therefore disclose environmental information

16 April 2015 by Rosalind English

Fish Legal v Information Commissioner and others (Information rights practice and procedure) [2015] UKUT 52 (AAC) Charles J – read judgment

Water and sewage utility companies are “public authorities” for the purposes of the environmental information regulations, and are bound by them accordingly, the Administrative Appeals Chamber of the Upper Tribunal has ruled.

Fish Legal is the legal arm of the Angling Trust. In 2009 it asked United Utilities Water plc and Yorkshire Water Services Ltd for information relating to discharges, clean-up operations, and emergency overflow. Emily Shirley is a private individual. Again, she asked Southern Water Services Ltd for information relating to sewerage capacity for a planning proposal in her village. All three companies denied that they were under a duty to provide the information under Environmental Information Regulations. Both Fish Legal and Mrs Shirley complained to the Commissioner. In 2010 the Commissioner replied, explaining that as the companies were not public authorities for the purposes of EIR, he had no power to adjudicate the complaints.

Reference to the CJEU

By the time the matter came before the Upper Tribunal the information had been provided so the only issue was whether the information had been provided within time according to the Environmental Information Regulations. This question depended in turn on whether the companies were public authorities. Judge Jacobs found that this was in fact a challenge to the reasoning of the Upper Tribunal in Smartsource Drainage and Water Reports Ltd v the Information Commissioner and a Group of 19 Water Companies [2010] UKUT 415 (AAC), which decided that they were not. So he referred the question to the European Court of Justice (CJEU), asking in effect whether it was down to the discretion of an individual member state to decide whether  a natural or legal person was one “performing public administrative functions under national law”, and, if it was not, what EU law criteria could be used to determine whether the function was in substance a “public administrative one”. He further asked whether an “emanation of the state” according to Foster v British Gas (C-188/89) was the same as a person who was liable under the 2003 Directive on Public Access to Information.

I have previously posted on the Opinion of AG Cruz Villalon in this matter.  The CJEU considered the reference in C-279/12 ([2014] Env. L.R. 18. As the UT Appeals Chamber observed,

The CJEU has laid down tests that are general in their terms an uncertain in their application to particular cases.

In essence, considering the different ways the water industry is structured in different member states, the CJEU left it to the national court to apply the tests it identified. It suggested that the courts should examine whether the entities in question were vested with “special powers” that went beyond those vested in persons governed by private law.  But the CJEU did not specify what it meant by powers. Nor did it consider that any different approach should be adopted in respect of “hybrid” bodies exercising both “public” functions and activities that belong in the purely private sphere. The possibility of such a hybrid interpretation of the concept of a public authority was advanced in particular in the case of Smartsource.  That case suggests that if the water companies are obliged to disclose certain information under the Directive and the Information Regulations because they perform certain public administrative functions, they were only obliged to disclose only environmental information held by them in the performance of those particular functions, not others. The CJEU did not approve of this approach:

It must be held that, apart from the fact that a hybrid interpretation of the concept of a public authority is liable to give rise to significant uncertainty and practical problems in the effective implementation of Directive 2003/4, that approach does not, as such, find support in the wording or the scheme of that directive or the Aarhus Convention. [76]

Thus, said the CJEU, if an entity is classified as a public authority under the Information Directive it is obliged to disclose to “any applicant all the environmental information falling within one of the six categories of information set out in Article 2(1) of the 2003 Directive that is held by or for it.”

In his reference, Judge Jacobs asked about the relevance of the ‘emanation of the State’ test in Foster. The CJEU said that satisfying that test was an ‘indication’ that the control test under Aarhus and EID was satisfied, but it was not decisive.

There was an argument over whether the Information Commissioner had jurisdiction to consider the question at all which I will not go in to here. The feature of this case which concerns us is the public authority question. Suffice it to say that the Upper Tribunal concluded that the Commissioner and First Tribunal have jurisdiction both to investigate and to decide whether a body from whom information is sought, is or is not a public authority.

Protection of the Environment in the EU

The protection of the environment is part of the Constitution of the European Union; see Article 191 of the Treaty on the Functioning of the European Union (TFEU). Accordingly, the EU has signed the 1998 Aarhus agreement on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters. The Aarhus Convention

is a new kind of environmental agreement. It links environmental rights to human rights. It acknowledges that we owe an obligation to future generations  …

The legal structure of the Water Industry

Since the mid 20th century, the water industry was in public ownership. In 1989 it was privatised, and the management of British water was regulated by the 1991 Water Industry Act. The water services companies are limited liability companies like any other, with the important difference that they are effectively monopoly suppliers to most users of their services (water and sewage) in their areas of appointment. They are regulated by OFWAT, which approves their charges and business plans.

The Definition of Public Authority

The Aarhus definition of a public authority covers “natural or legal persons performing public administrative functions under national law”, and “any other natural or legal persons having public responsibilities or functions … under the control of [such bodies]”. This definition was transposed into the Information Directive and the Environmental Information Regulations.

The Upper Tribunal declined to “write a treatise” on this particular issue, “however interesting and useful that might be” (para 97).

It was argued on the companies’ behalf that if they were to be considered public authorities for the purposes of Aarhus and in the information regulations, they may have to consider to seek legislative change in order to divest themselves of the powers that had produced that effect.

The Upper Tribunal’s Decision

The UT took the view that the CJEU’s response to the reference did not require that the entity in question had any particularly “special” powers, only that they had

an ability that confers on it a practical advantage relative to the rules of private law (para 106)

Such an ability, in the context of water companies, is their power to purchase compulsorily any land in England or Wales which is required by them for the purposes of carrying out their functions. They also have the power to make bylaws, breach of which constitute a criminal offence.

This … is not a power that is available under private law. It is not comparable to the private landowner’s power to enforce a licence to enter on and enjoy land through the civil law. (para 109)

As Judge Jacobs noted in his reference, the reasoning … is potentially relevant to other privatised, regulated industries that deliver a once publicly owned service: electricity, gas, rail and telecoms. It will have to be applied to those and other bodies as and when cases arise. The outcome cannot be assumed for the purposes of deciding the cases before us. (para 110)

But the UT could not attempt to give an exhaustive definition, an exercise they described as “Hunting the Snark”.

there are no exhaustive criteria by which we could classify powers as being by their nature exclusively State powers. That is because the nature of the State is not sufficiently clear. Take the last century. In 1900, there would have been a clear view of what did not constitute State powers. There was no national health service, no social security provision and no nationalised industries. Fast forward to 1950 and the position was different. There was a national health service, a fully developed welfare system, and recently nationalised industries. Fast forward now to 2000 and the position was again changed. The national health service was still there, the social security system had changed significantly, and industries and utilities had been privatised. The boundaries between business and the State had changed. (para 113)

And indeed the CJEU did not seek to classify powers of “public authorities” as State power or other powers. The judgment directs the national courts to compare the powers in question with those that arise from the rules of private law. The CJEU must have meant this in the wide sense of the word, because if otherwise, it would have set a requirement that would effectively proven the special powers test being satisfied in all but the most exceptional case.

That would be surprising given the constitutional significance of the environment in the EU Constitution (para 120)

The power of the companies to impose “hosepipe bans” is another  example of its coercive powers; “the definition of a criminal offence is a classic use of State power that has survived the changes in the role of the State over the previous century”.

The UT therefore concluded that companies have “special powers” that are “sufficient, collectively in themselves and as examples of powers of the same type, to satisfy the test laid down by the CJEU. As such, the companies are public authorities for the purposes of Aarhus, the Environment Information Directive and the Environmental Information Regulations. The other requirement for the definition of public authority, the so-called “control of the state” test, was not satisfied in the case of the water companies, but this control test is a “demanding one” that few commercial enterprises would satisfy. As such, it did not have any relevance to the overall conclusion, that the companies were public authorities.

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