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Appendix 6: Partial Regulatory Impact Assessment on Compliance with Council Regulation ( EC) No 1/2005 on the Protection of Animals During Transport and Related Operations

1. Title of proposal

1.1 The Welfare of Animals (Transport) (Scotland) Order 2006

2. Purpose and intended effect

Objective

2.1 To set up the administrative and enforcement arrangements to ensure compliance with the directly applicable Regulation that sets rules for the protection of animals during transport within, to and from the EU.

2.2 The intention is to introduce these arrangements in the most effective, proportionate and least burdensome way to those affected.

Background

2.3 In 1997 Member States were obliged to implement and enforce additional requirements enhancing the controls first agreed in 1991 (Directive 95/29 amending Directive 91/628). The main changes were the introduction of statutory registration of transporters and route plans. By detailing the planned journey, route plans help to ensure compliance with specified maximum journey times, feed and rest periods for farmed livestock and horses. The Welfare of Animals (Transport) Order 1997 implemented the Directive.

2.4 However, the Directive was considered to be inadequate in that the lack of independent assessment was not credible and enforcement tools were not robust enough for enforcers to identify and take sanctions against transporters who did not comply with the rules. Ministers therefore made a commitment to review the implementing Welfare of Animals (Transport) Order 1997 after one year of operation. A review was carried out in 1998/99 - one of the measures proposed following this review was mandatory independent assessment of transporters in place of the assessment by employers or self-assessment by the self-employed. Consultation was carried out on the review, but the further work to amend the Order was stopped when the European Commission announced that they were to review the Directive.

2.5 A Commission Report of December 2000 on the experiences of Member States since implementation of the 1997 rules highlighted problems and recommended improvements in: the transport of horses; dealing with non-compliance with route plans and travelling time limits; handling of animals and preventing transport of unfit animals; road vehicle standards and ventilation on long distance vehicles; enforcement of space allowances; harmonisation of certification of transporters; and use of data from Member States' inspection reports.

2.6 In many cases it recommended adoption of measures developed by the UK. A report by the Food and Veterinary Office ( FVO) on its mission to the UK in February 2001 ²⁵ stated 'the procedures developed in the UK are an example of best practice in relation to similar controls operated in other Member States'.

2.7 Following consideration of the Commission Report by the Committee on Agriculture and Rural Development and the opinion of the Committee on the Environment, Public Health and Consumer Policy, a report and Motion for Resolution were produced ²⁶. The Resolution included 29 detailed points ranging from maximum journey times, through vehicle standards and improved enforcement to export refunds and restructuring the EU meat production chain.

2.8 The Report of the Scientific Sub Committee on Animal Health and Welfare on the Welfare of Animals during Transport adopted in March 2002 made recommendations on maximum travel times and space allowances for cattle, sheep, goats, pigs and horses.

2.9 The Commission carried out consultation with industry and the public and in December 2002 announced results that showed clear support for change. Responses throughout the Community were heavily weighted towards individuals (3539) rather than organisations (602). Further more, the number of respondents from the UK (636) was the second largest to Germany (954). Responses supported: changes to maximum journey times and space allowances; improved vehicle standards; better handling of animals; better planning and organisation of journeys; stricter approval and certification of competence conditions for transporters; approval of vehicles; enhanced communication between Member States; heavier penalties for infringements; and more checks and controls by Member States.

2.10 Proposals to amend the Directive were issued in July 2003. These included changes to journey times, allowed animals to be rested on vehicles during mid journey rests and set new space allowances. These changes were too radical for some Member States. Failure to reach consensus meant that discussions collapsed at the April 2004 Agriculture Council due mainly to Member States being unable to reach agreement on journey times.

2.11 The following Presidency revived the package avoiding the contentious issues of journey times and space allowances. The UK welcomed the possibility of salvaging the bulk of proposed new regulations which included the improvements for protection of horses. A compromise package meant however that some less welcome changes had to be accepted in order to maintain what gains had been achieved. The Regulation came into effect in December 2004.

The Regulation

2.12 The Regulation will apply to the commercial transport of all vertebrate animals. Some requirements apply only to horses, farmed animals (cattle, sheep, goats and pigs) and poultry.

(a) Exempted

2.13 Journeys directly to or from a veterinary practice or clinic under the advice of a veterinarian; and farmers transporting their own animals in their own vehicles under 50 Km are exempted from most of the Regulation. Some general conditions still apply however such as:

• ensuring the journey time is kept to a minimum and the animals are checked and their needs met during the journey;
• the animals are fit to travel;
• the vehicle and loading and unloading facilities are designed, constructed and maintained to avoid injury and suffering;
• those handling animals are trained or competent in the task and do not use violence or any methods likely to cause unnecessary fear, injury or suffering;
• water, feed and rest are given to the animals as needed; and sufficient floor space and height is allowed.

(b) Journeys Up to 65 Km

2.14 Transporters of animals on journeys up to 65 Km are exempted from requirements for authorisation, training and certificates of competence but the detailed technical rules must still be complied with on: fitness to travel; means of transport; and transport practices.

(c) Up to 8 Hours

2.15 Other transporters carrying out journeys up to 8 hours will have to:

• be authorised by the competent authority (valid for 5 years);
• have received training and, if transporting horses, farmed animals or poultry, have independent certification of competence;
• demonstrate that they have appropriate staff and equipment to transport animals in a proper way and have no record of serious infringements of animal welfare legislation in the preceding 5 years.

(d) Over 8 Hours

2.16 Transporters carrying out journeys of over 8 hours by road will, in addition, have to have their vehicles or livestock containers inspected and approved according to specific criteria including on-vehicle drinking systems, ventilation systems, temperature monitoring and a system to alert the driver to potential problems.

2.17 From 2007, new vehicles, and from 2009, all vehicles used to transport horses ²⁷ or farmed animals on journeys over 8 hours by road will also have to be equipped with a navigation system to trace and verify compliance with travel times limits for animals.

(e) Other Provisions

2.18 Maximum journey times and space allowances are unchanged, but the EU Commission is required to review them by 2011.

2.19 Unfit animals are more tightly defined and there will be a ban on transporting very young animals except if the journey is less than 100 km. For example: calves of less than 10 days of age; pigs of less than three weeks; and lambs of less than one week. In particular:

• the transport of calves of less than 14 days of age on journeys exceeding 8 hours will not be permitted;
• pregnant animals will not be considered fit for transport if they have reached the latest stage of gestation (within 10% of the estimated time of the gestation before birth) and for a period of one week after giving birth; and
• cats and dogs under 8 weeks of age may not be transported commercially, unless accompanied by their mother.

2.20 Specific rules for the transport of horses include:

• they must be transported in single partitions on journeys longer than 8 hours, or when transported in a vehicle on a roll-on roll-off ferry (other than a mare and foal);
• a minimum space above the withers must be given;
• unbroken ponies may not be transported in groups of more than four and cannot be transported on journeys longer than 8 hours by road;
• foals under 4 months must have appropriate bedding and (unless with their mother) may not be transported for longer than 8 ²⁸ hours by road.

2.21 Transport by sea will be subject to approval of livestock vessels (but not roll-on roll-off ferries) used to transport horses or farmed animals for distances greater then 10 nautical miles.

2.22 Operators of markets and assembly centres will be responsible for the welfare of animals and application of the rules on their premises and personnel will have to be trained.

2.23 Competent authorities will be better equipped to monitor and enforce rules as the EU Regulation is directly applicable in all Member States. This will improve harmonisation across all Member States and avoid inconsistent interpretations that are possible under a Directive. An electronic database of long distance transporters and their vehicles will be accessible to authorities in all Member States and documentation must be carried in a harmonised format to facilitate checks including:

• details of animals being transported;
• transporters' authorisation;
• certificate of approval of the vehicle (in the case of long journeys); and
• a certificate of competence for drivers and attendants.

2.24 Exchange of information between authorities will be improved by the establishment of contact points on animal transport in each Member State. Infringements by transporters and withdrawal of authorisations will be notified to all contact points concerned, so as to prevent repeated or serious offenders continuing to operate.

2.25 Further developments have been promised. The Commission has issued a report and proposals to introduce a different range of maximum and minimum temperatures for the transport animals, but this remains to be finalised. A report on the impact of the Regulation is due in 2011 which may be accompanied by further proposals, in particular, on journey times, resting periods and space allowances. A study on navigation systems and their application is due by 1 January 2008 and a report on the implementation of these systems and, possibly, proposals to define the specifications to be used are due by 1 January 2010.

2.26 The European Food Standards Authority produced a report in 2004 on transport of poultry and other species for which there no are specific requirements in the regulation. The European Commission may publish proposals based on these recommendations but there is no timetable for this at present.

Rationale for government intervention

2.27 Council Regulation ( EC) No 1/2005 on the protection of animals during transport and related operations is directly applicable in all Member States. In England, Scotland, Wales and Northern Ireland, however, secondary legislation is needed to set administrative arrangements and penalties for non-compliance. Without such Orders the UK could be liable to infraction proceedings. The Food and Veterinary Office ( FVO) of the Commission can be expected to include application of welfare rules in missions following the new rules coming into effect.

2.28 The UK was prominent in calling for proposals which resulted in the new Regulation and although they do not address the most controversial issues such as journey times and space allowances they provide significant improvements in the protection of horses and enforcement capability in respect of all species. The mandatory independent assessment of competence of drivers and attendants is most welcome, having been considered previously in a domestic review of The Welfare of Animals (Transport) Order 1997 in 1999.

2.29 The Welfare of Animals (Transport) (Scotland) Order 2006 will now put in place for Scotland the mechanism for administration and enforcement of Regulation 1/2005. Journey times and space allowance remain as in the Directive and animal handling arrangements remain largely unchanged apart from improvements on the protection of horses.

3. Consultation

Within government

3.1 Other devolved administrations, Defra and its Agencies, the Small Business Service, the Better Regulation Executive of the Cabinet Office and Department for Transport Agencies.

Public consultation

3.2 Stakeholders, including all known transporters of farmed livestock were advised of the requirements under the Regulation in February 2005. At that time proposals as to how they were to be made effective had not been worked out in detail. Preliminary discussions were held and working groups were set up with key stakeholders to explore ways in which the objectives of the regulation could be met. The proposals in this paper are the result of those discussions, which have also been discussed with the major welfare NGOs. Data included in this assessment includes that provided by the British Egg Industry Council, British Horse Industry Confederation, British Poultry Council, Association of British Insurers, Crowe Livestock Underwriting Ltd, the National Farmers' Union and the Road Haulage Association.

4. Options

4.1 Option 1 - Do Nothing. Regulation and its requirements will apply, but the Government will be at risk of infraction proceedings as effective enforcement of rules will be impossible. This option is not acceptable.

4.2 Option 2 - Full Application of Regulation. Apply full and immediate enforcement powers to all sectors caught by the Regulation. No risk of infraction proceedings from the European Commission, but this option would impose heavy cost burdens on industry - particularly small businesses in the farming and road haulage sectors.

4.3 Option 3 - Full Use of Derogations. Article 18.4 of the Regulation allows Member States to derogate from the requirements of:

• Article 18 (Requirement for a vehicle carrying animals over 8 hours to have a certificate of approval);
• Chapter V, 1.4(b) (Pigs having continuous access to water);
• Chapter VI of Annex I (Technical standards for vehicles carrying farm animals and horses over 8 hours).

4.4 The use of derogation is limited. It is only available for road vehicles undertaking journeys for a maximum of 12 hours in order to reach the final destination.

4.5 Option 4 - Selected Use of Derogations and Deferred Application of Ramp Angles. Phased introduction of authorisation and application of enforcement starting with sectors where risk of compromised welfare is highest. This will defer costly vehicle specification changes by use of derogations that are permitted for journeys starting and ending within the UK. Subject to the evaluation of the outcome of the Consultation, this option would appear to best match animal welfare benefits proportionately with burdens on industry.

5. Costs and Benefits

Sectors and groups affected

5.1 Those transporting vertebrate animals in relation to economic activity including agriculture, equine industry, poultry, road haulage, shipping, air transport, pet industry, and zoo animals.

Benefits of the Regulation (General)

Non-market benefits to improving animal welfare during transport

5.2 The objective and most important benefit is protection of animals during transport. Where society values animal welfare, these improvements constitute social benefits. Many studies of willingness to pay and informal sources demonstrate that people do value animal welfare. In relation to welfare of animals during transport, the example of public perceptions of live exports indicates the social benefits that could be gained from implementing this regulation. This has particular relevance with the resumption of cattle and, more importantly, calf exports during 2006 when improved animal transport rules could help allay public concern over such exports.

5.3 It is unlikely that society will achieve the optimum level of animal welfare without government intervention as improvements in animal welfare during transport are unlikely to be delivered through market pressures alone. One market pressure to improve animal welfare is the loss of value of bruised carcasses or lost value if animals are sick on arrival at markets or abattoirs after journeys which have not protected their welfare. However, it might be difficult for producers to separate the costs of loss of value that have occurred from transport conditions alone. The Regulations are unlikely to result in a vast change in, for example, carcass downgrading. A second market pressure to improve animal welfare is consumer demands. Again, it is difficult for consumers to express preferences on conditions for animals during transport at the retail end of the production process. Consumers are likely to be uninformed about transport conditions and, even where they are informed, their choices of meat products reflect a range of preferences. Similarly, prices of animal-based products reflect many other characteristics other than the welfare of the animal during transport.

Animal Welfare as a Public Good

5.4 The following section has been taken from the final report of a Scottish Agriculture Colleges ( SAC) project which can be used as an example study of public perceptions of chicken welfare and their chicken and egg purchasing choices, rather than in direct relevance to welfare during transport, or all the demand for all meat products. The study identified the non-market benefits of the proposed Directive to set minimum standards for the welfare of meat chickens ( http://defraweb/animalh/welfare/farmed/meatchks/pdf/non-marketbenefits.pdf ).

5.5 Consumer demand for higher animal welfare standards has been reflected in the increasing market share of products considered to be "welfare friendly", most notably free-range eggs.

5.6 However, there still remain a number of barriers to the more widespread adoption of welfare friendly products across the broader range of animal produce. Harper and Henson (2001) reported on the results of a pan-European project looking into consumer concerns about animal welfare and the impact on food choice. A number of important results emanate from this research:

• Consumers are concerned about animal welfare both due to the impact on the animals and a perceived impact on food safety, quality and healthiness. These are seen as being interdependent and policy should address both issues.
• That high reported levels of concern about animal welfare are not translated into purchase decisions is due to a number of perceived barriers to "ethical" choice.
• These include a lack of information; a perceived lack of availability of higher welfare products; a perception of low influence over welfare standards; disassociation from animal productions and slaughter; and perceived higher cost.
• Consumers prefer a strategic approach favouring both supply and demand side measures to improve animal welfare. On the supply side, there should be minimum welfare standards and reform of agricultural policy. Demand side measures should include compulsory labelling and consumer education.

5.7 The results reported by Harper and Henson (2001) demonstrate that there are two particular contradictions in the way consumers think about animal welfare:

• They want more information but they do not want to associate food with the killing of animals;
• They say they do not consider price to be the most important factor in food choice but this is not the case at the point of purchase.

5.8 These suggest that animal welfare should be treated as a public good issue in the same sense as environmental issues and that policy interventions in a similar vein to agri-environment policy may be the most appropriate method of meeting public preferences for welfare standards.

5.9 Mintel (2001) carried out research into attitudes towards ethical foods; (incorporating fair trade, organic vs. GM, the environment, and animal welfare) found that major drivers are consumer trust in the products and perceived health benefits. However, it was found that purchasers of free-range eggs are more likely to cite animal welfare as a concern than health.

5.10 Earlier research by Mintel (1999) found that 41% of meat purchasers noted concern about animal welfare with 46% of those claiming that it influenced purchase decisions, i.e. 19% of meat purchasers are influenced by welfare issues. Whereas 32% cited personal health as a concern with 53% of those saying it influenced them to seek meat that was not "factory-farmed", i.e. 17% of all meat purchasers.

Benefits to animals during transport

5.11 A high proportion of animals are transported at some point in their lives. This is true for all animals whether they be companion, zoo or livestock animals. Livestock are the sector that greatest focus has been on in the past with public interest in the live export of animals. There has been little or no research carried out to ascertain how animals other than livestock perceive a transport environment. The Regulation to be implemented does not alter journey times or space allowance, rather improves the enforceability of the legislation with a greater emphasis on competency training of drivers and attendants, ventilation, provision of GPS on long journeys and changes in ramp angles. There is no doubt that these individual aspects of the regulation will have significant effects on the animals.

Training and competence

5.12 "The behaviour of the people who are in direct contact with the livestock, who rear and transport them, is central to the animal welfare issue and the training and qualification of personnel is of paramount importance". (p.620 Seng and Laporte, 2005). Driver behaviour is an important component of welfare outcomes of transport (Cockram et al., 2004) and development of training aids have been initiated through research at Edinburgh University for the transportation of cattle, sheep and pigs.

Ventilation and roof insulation

5.13 The environment within a transporter has a profound effect on the physiological and behavioural reactions of animals to transportation. Temperature is a key component of the environment and the Regulations will legislate that temperature shall be monitored and recorded and must be within 5-30°C ±5°C for long journeys. This aspect of the Regulation will ensure that animals are transported in vehicles with forced ventilation and will prevent animals experiencing excessively low or high temperatures. This is particularly important during long journeys where animals may experience temperatures to which they have not been acclimatised. Some animals are able to cope with changes in temperatures better than others, for example pigs are more prone to heat stress than sheep. The Regulation specifies that no animal shall be transported over 8hrs below 0°C, however, there is an issue as to whether animals used to and being loaded at a temperature below 0°C would receive any welfare benefit that would justify heating a vehicle prior to loading.

Ramps

5. 14 Ramp angles affect the loading and unloading of animals in vehicles that do not have an automatic tailgate. The Regulation will alter the ramp angles applicable in GB under the Transport of Animals (Road and Rail) Order 1975. These angles will change from 29°44 (external)/33°42 to 20° for pigs, calves and horses and 26° 34' for sheep and cattle. The changes bring ramp angles broadly in line with draft Codes of Conduct under the Council of Europe Convention for the Protection of Animals during International Transport.

Market benefits to improving animal welfare during transport

5. 15 Transport conditions for animals not only have an impact on animal welfare but can also affect carcass and meat quality. Training may ensure improved driving abilities and a subsequent improvement in meat quality and hence an increase in profitability. Allocating a figure to this possible improvement in profitability is extremely difficult because specific research on this topic has not investigated market benefits per se. There is however related scientific evidence that adds weight to this train of thought.

5. 16 Losses which occur during handling and transport can cause financial incentives to industry to improve their practices. There is limited UK evidence of the monetary value of downgraded carcasses, but in the USA the National Beef Quality Audit calculated that $4.03 is lost due to bruises on every fed animal marketed (Grandin, 2000, p3). In addition, stress-related meat quality issues may cause monetary losses, for example, pale, soft, exudative ( PSE) in pork meat and in 1982 cost an additional £1.13 loss at the retail level per carcass (Smith and Lesser, 1982 - cited in Grandin, 2000 pg5). However, the link between specific transporting environments and PSE is unclear and handling may have a greater influence than transportation per se. Therefore it is difficult to relate specific policy changes to market benefits.

5. 17 Not all animals transported to go to slaughter have high value, such as end of lay hens and these animals may require the full weight of legislation to protect them. End of lay hens may have skeletal damage and more research is being funded by Defra to ascertain the on-farm time cause of this damage. However, a study in 1989 identified 29% of a sample of 3115 from conventional cages to have at least one bone breakage before they reached the stunner (Gregory and Wilkins, 1989). However, it is unclear how specific transportation environments per se influence bone damage, again making it difficult to allocate a market or non-market benefit to changes in legislation. For references see footnotes ²⁹.

5.18 Benefits Option 1. The do nothing option will neither increase nor decrease animal welfare benefits or industry costs. But, the UK would be open to infraction proceedings by the European Commission for non-compliance.

5.19. Benefits Option 2. Full application of regulation. Benefits highlighted above will ensue, but costs to industry - particularly small business - could be considerable.

5.20 The costs of altering ramp angles in vehicles may negate benefits by producing the new ramp angle through provision of a step at the end of the ramp. This would satisfy the Regulation, but livestock finds steps aversive and this may actually result in an increase in slips or falls and hence poorer welfare and meat quality. Therefore it would be beneficial from both welfare and an industry perspective to phase in the use of ramp angles.

5.21 Benefits Option 3. Full use of derogations. This would help minimise industry costs, but it has limited applications and does not apply to the lower ramp angles that are being introduced.

5.22 The scope of derogations was the subject of an informal discussion paper issued in January 2006. The views of known stakeholders were sought on the use of derogations.

5.23 Certain of the new rules are identical or very similar to the current rules so that additional costs to business would be minimal. Other potential derogations cover rules where it is considered compliance would not be difficult for UK industry.

5.24 We need to balance welfare benefits against cost and ease of compliance/enforcement. We therefore consider that it is not necessary to utilise all potential derogations, but they would benefit UK industry where: the costs to the transport industry in implementing the new requirements are disproportionate to the welfare benefits; or the cost to industry is disproportionate to the number and type of journeys undertaken; or the new requirements are difficult to enforce effectively.

5.25 Benefits Option 4. Selected use of derogations and deferred application of new ramp angles. A risk-based approach that seeks to balance improvements in animal welfare with phased implementation of those provisions where implementation costs would hit industry hard - particularly those in the small business sector.

5.26 The Consultation Document proposes taking advantage of provision in the Regulation for Member States to apply derogations to journeys that are less than 12 hours to their final destination. This would cover the majority of journeys in the UK and offers the prospect of minimising burdens relating to vehicle approval and vehicle standards (except ramp slopes) arising from journeys between 8-12 hours. Those continuing to be affected in meeting the full vehicle requirements would be principally professional horse and livestock hauliers engaged in transporting animals on longer journeys and abroad. The derogations proposed would cover vehicles having to:

• install navigation systems
• install ventilation systems
• maintain vehicle temperatures at 0° C or more
• have insulated roofs in existing vehicles
• have water constantly available to pigs

5.27 The Regulation requires a number of vehicle standards most of which already apply through existing rules. The main change of significance for cost is shallower ramp angles aimed at reducing the difficulty and accompanying stress of loading and unloading animals. While the Regulation does not provide for a phase-in period for existing vehicles, the Consultation Document questions whether the costs applicable to converting existing vehicles are a justifiable burden in relation to welfare benefits. It therefore proposes for existing vehicles meeting current requirements and operating in the UK that, for a period to be decided, enforcement on this aspect should be based principally on advice to allow transporters to continue to use such vehicles during their economic life.

Q.1 Are there other benefits of the Regulation and/or various options that have not been covered here?

Q2. Have we fully covered the benefits of each option in connection with their impacts on small businesses?

Q3. What period of time should be allowed for the phasing in of the ramp angles for existing vehicles? Please justify your comments.

Costs

5. 28 The following costs represent the best estimates that can be made at present based on information we have so far been able to identify from industry and other sources. In many cases the figures used are generous assumptions and should be considered indicative only. It is hoped that information received during public consultation will help firm up these costings.

5. 29 Costs will arise from 4 main areas of the Regulation:

• Authorising transporters
• Training and competence testing for drivers and attendants of livestock
• Vehicle standards
• Vehicle inspection and approval

Authorising Transporters (of animals over 65Km)

5.30 The anticipated sectors, numbers of businesses and people affected and costs are difficult to determine. However a rough indication based on advice from Defra and our knowledge of the Scottish industry suggests that the estimated figures may be:

Working assumption 35,000

Cost to industry every 5 years:

Training and Competence

5.31 Existing training arrangements in the industry will be able to meet the Regulation's needs with small syllabus changes.

5.32 Assessment of competence can be provided by nominated awarding bodies subject to meeting criteria including a framework of competences designed to satisfy the requirements of the Regulation and accreditation of the awarding body by expert organisations in this field. Awarding bodies could be existing providers of independent certification on a voluntary basis under current rules or new ones which could include quality assurance schemes. It is proposed to recognise two types of competence certificate: long distance drivers being assessed for all the required competences, including their driving skills; and others, including farmers, only being assessed for the competences relating to shorter journeys by a written test. Web-based assessment is being explored to enable easy and independent assessment for those carrying out shorter journeys.

5.33 Tests will be one off (that is, certificates are not time limited) and provided through the private sector so no Government costs. The sectors and numbers of people affected in GB are estimated below.

Vehicle Standards (Ramp Angles)

5.34 The Regulation requires a number of vehicle standards most of which already apply through existing rules. The main change of significance for cost is shallower ramp angles aimed at reducing the difficulty and accompanying stress of loading and unloading animals. For new vehicles the change in ramp angles should not have a significant impact on cost. Many existing vehicles however could need conversion although it is not believed to be an issue for horse vehicles. The cost of conversion will depend on a variety of factors (particularly size and number of decks) and can be unique to the vehicle. As such, hard information has not been obtainable and the following represents best estimates.

• Single ramp vehicles/trailers - many should be able to convert with minor changes; others might cost up to £200.
  Assumption - 10,000 vehicles at £200 is £2m
• 2 deck vehicle/trailers - up to £350 (cost of new trailer is approx £4,000)
  Assumption - 10,000 vehicles at £350 is £3.5m
• Multi-deck vehicles - approx. £10,000
  Assumption - 1,000 vehicles at £10,000 is £10m

Vehicle Inspection and Approval

5.35 Road vehicles carrying animals on journeys over 8 hours will be required to be inspected and approved against specified standards. Approvals would be granted for five years. The standards required are higher than those for shorter journeys and include some that are significant in relation to cost, in particular, navigation systems, temperature monitoring.

5.36 Assumptions:

1,000 small vehicles at conversion cost of £1,750 a vehicle is £1.75m

300 medium vehicles at conversion cost of £6,500 a vehicle is £1.95m

1,500 large vehicles at conversion cost of £12,250 a vehicle is £18.375m

Of these 500 vehicles would do journeys over 12 hours or outside the UK

5.37 The consultation document proposes taking advantage of provision in the Regulation for derogations (see para. 5.22 above). The derogations proposed would cover vehicles having to:

• install navigation systems
• install ventilation systems
• maintain vehicle temperatures at 0°C or more
• have insulated roofs in existing vehicles
• have water constantly available to pigs.

5.38 Not taking advantage of the derogations would cost the whole industry approximately £22m in conversion costs. Taking up the derogation spares the majority of transporters who do not transport animals on export journeys or other journeys of over 12 hours from these additional costs.

5.39 The consultation document also proposes that inspection and approval should be carried out by bodies that can obtain accreditation from the United Kingdom Accreditation Service as being able to provide such inspection and approval according to rules and standards Government will lay down. This would build on existing voluntary industry run vehicle approval schemes, thus reducing the number of inspections that transporters would have been subject to. The estimated cost for such approval, if similar to existing voluntary schemes, would be about £150 a vehicle which equates to an overall 5 yearly cost to industry of £0.42m.

Summary Costs

5.40 Costs Option 1. The do nothing option is not a viable option. We would be subject to infraction proceedings which could result in heavy financial penalties.

5.41 Costs Option 2. Full implementation. Some aspects are very costly for industry to implement immediately and this could result in significant impacts on the competitive position and financial viability of industry - particularly small businesses.

5.42. Costs Option 3. Full use of derogations. (See above paras. 5.21- 5.24). Some of the new rules are similar or identical to current rules so in these areas no additional costs to business would apply or compliance costs would be minimal. Other potential derogations cover rules where it is considered compliance costs would not be difficult for UK industry. However, even using full derogation powers, industry would still have to implement the lower ramp angles which would result in heavy cost burdens.

5.43 Costs Option 4. Selected use of derogations and the deferred implementation of new ramp angles (see paras. 5. 25 - 5.27 above). Subject to the evaluation of the outcome of the consultation, this option would appear to best match animal welfare benefits proportionately with burdens on industry.

Summary of costs of options

5.44 The tables on the following page should be viewed in the context of the total value of the livestock sector which we estimate was £8.2bn in 2004. The largest elements of the proposals relate to vehicle specifications and are one-off costs. If derogations together with the deferment of the introduction of the new ramp angles are applied, the significant burden of industry costs will be deferred until vehicles need to be replaced in the normal course of business. Certification of competence is also a one-off cost apart from new entrants into the industry.

Q.1 Can you provide improved cost data for your sector?

Q.2 Have we omitted significant financial benefits/costs that could affect our options?

Q.3 Do you have any improved data on the number of businesses in your sector that are likely to be affected?

Q. 4 Do our working assumptions of costs reflect your knowledge of your industry? If not, what figures should we be using?

Q.5 The costs of conversion of vehicles to meet the new ramp angle standards have been difficult to assess. Can you provide data that can refine our best estimates?

Indicative costs of options for a range of businesses

Farmer transporting his own animals in a small trailer or 7.5 tonne vehicle on journeys to market or slaughterhouse under 8 hours:

Commercial livestock haulier with 5 drivers and 5 vehicles transporting farmed animals over 8 hours within the UK:

Commercial livestock haulier with 5 drivers and 5 vehicles transporting farmed animals over 12 hours within UK and over 8 hours if going outside UK:

6. Small Firms Impact Test

6.1 For the purposes of Regulatory Impact Assessments, a small firm is a firm who employs less than 50 people and either has less than £4.4m annual turnover or less than £3.18m annual balance sheet total.

6.2 Based on these criteria, virtually all farmers are small firms - only 0.2% of farmers are not small firms. However, we estimate that only 3% of farmers transport livestock more than 50 kms (30 miles).

6.3 Although hard data on firms in the road haulage, pet shops and small breeders sectors is very difficult to come by, we expect that most firms in these sectors are also small firms. For the livestock haulage industry, it is expected that even the smallest estimated costs of the regulation could have a significant impact. The cost of capital investment for livestock hauliers to meet the measures is in the range £1,279 to £112,520. As the cost to livestock hauliers of the regulation is high compared to the low profitability of livestock haulage enterprises, it is likely that costs will be passed on to those using hauliers to transport their animals.

6.4 Costs for the options under consideration and for indicative businesses are presented and discussed in Section 5 above (Costs and Benefits) and the Consultation Document. Option 4 is by far the least cost option and will minimise cost burdens to small firms in connection with vehicle standards, ramp angles and vehicle approval. This current assessment has been based on discussions with umbrella organisations who represent a range of businesses and other interests. These include the National Farmers' Union, the Road Haulage Association, the British Horse Industry Confederation, the National Sheep Association, the Livestock Hauliers Association, the British Poultry Council, the Association of Circus Proprietors, the British and Irish Association of Zoos and Aquariums and the Dogs Trust.

6.5 . Given the limited data available on small firms and profitability in most of the sectors affected by the regulation, stakeholder feedback is invited in order to fully scope out the issues. We are willing to hold a meeting with representatives of businesses if this will help reveal more information on the likely impact. If you are interested in participating please let us know by 2 June 2006. If not, your written comments would be helpful.

Q.1 Do you consider the proposals to be a challenge/threat/opportunity to your business/ your industry as a whole? What are these and reasons?

Q.2 What are the workforce impacts likely to be for small firms?

Q.3 Is the sector you work in likely to expand or contract as a result of these proposals? Will there be new entrants or mergers?

Q.4 What affect do you think the Regulation will have on income/profit within the industry and your firm? What are the implications of this for your business, the industry and the public at large?

Q.5 Are there other matters you wish to raise in connection with these proposals?

Q.6 Do you have any cost or industry data that can help us evaluate the costs and benefits relating to small businesses/ your industry sector as a whole?

7. Competition assessment

7.1 Application of the Regulation will improve uniform enforcement of standards in all Member States. This will ensure that UK transporters are not disadvantaged by lower standards of treatment and enforcement being applied by competitors in other Member States (an often made criticism under the existing Directive).

7.2 However, full, immediate implementation of provisions relating to vehicle standards and new ramp angles could significantly affect the competitive position of small businesses unless mitigating measures are adopted.

8. Enforcement, sanctions and monitoring

8.1 Enforcement is currently and will remain primarily with Local Authorities, and with the State Veterinary Service, both carrying out certain agreed checks which are risk based coupled with targeted and intelligence led investigations.

8.2 It is believed that overall the implementation of Regulation 1/2005 will be cost neutral for carrying out enforcement checks and taking any sanctions against non compliance but there is a cost in monitoring checks and sanctions through changes to the enforcement system database.

8.3 Regulation 1/2005 has common enforcement objectives with current welfare in transport rules, e.g. animals must not be caused unnecessary suffering; animals must be fit for their journey; vehicles must be suitable; journey time limits and space allowances remain the same; and travel documentation is still required.

8.4 The new Regulation introduces new requirements:

• all transporters of any vertebrate animals must hold an authorisation if travelling over 65km (not just over 8 hours as at present for livestock and horses);
• long journey transporters required to have their vehicles approved;
• all transporters must carry their authorisation certificates;
• extension of all the above to non farmed species;
• transporters of livestock, horses and poultry over 65km must have training and certificates of competence; and
• long journey transporters must carry their vehicle approval and competence certificates.

8.5 The extension of the regulations to non-farmed species will slightly increase the number of inspections and the requirements to carry documents will slightly increase the time spent checking documents at point of inspection. However, this should be offset through the benefits of competence training and vehicle approval leading to a reduction in the amount of enforcement action taken and the time needed to carry out the compliance checks.

8.6 There are no plans to change the penalties that can be imposed through prosecutions which will remain at Level 5 (i.e. a fine of up to £5,000 and/or 6 months imprisonment on summary conviction). Enforcement action short of this will initially continue to include serving Statutory Notices, giving written or oral warnings or taking regulatory action by revoking, suspending or putting conditions on a transporter's authorisation for serious or repeat infringements.

8.7 Compliance checks (and transporter authorisations) are currently recorded by Local Authorities on the Defra internet based Animal Health and Welfare Management and Enforcement System ( AMES) and this will continue for now. In order to comply with the Regulation and better inform enforcement action, a number of changes have been made to the database to allow for better monitoring of transporter activities and to make the statutory return of enforcement activities to the European Commission. The cost of these changes, including system maintenance for the next five years is £100,000.

8.8 New computer codes for compliance checks will need to be produced for AMES so that the checks carried out and actions taken reflect properly regulation 1/2005 and feed into enforcement and monitoring procedures.

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