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CHAPTER 3 - REDUCING THE BURDEN

INTRODUCTION

71. Scottish Ministers currently issue a range of licences or consents covering a wide variety of purposes. There is a range of licences that deal broadly with: protection of water from pollution, for example FEPA (Food and Environment Protection Act 1985) (Box 3.1) and CAR (Controlled Activities Regulations 2005); navigation, for example CPA (Coast Protection Act 1949); a range of licences that deal with marine wildlife including fishing; and a range of other licensing and consenting processes such as those relating to the marine historic environment. A list of the main marine legislation is in table 3.1.

72. Responsibility for licensing many marine-related activities lies with Scottish Ministers through a complex mix of legislative and administrative devolution. Licensing for devolved activities within the territorial sea, i.e. within 12nm of the coastal baseline, is legislatively devolved while certain licensing powers from 12nm out to 200nm are administratively devolved. Separately, the Secretary of State has responsibility for licensing reserved activities in the 0-200nm area, most notably oil and gas exploration and exploitation, pipelines and merchant shipping.

AIM OF LICENSING

73. The current licensing system seeks either to protect various features of the marine and coastal area from the impact of marine development or to mitigate the impact of those developments. The licensing system is complex with a number of licences which appear to protect against similar things being delivered by a range of different bodies. The process of assessing and delivering a licence involves what can appear to be a random selection of other bodies as consultees, statutory and otherwise. The limited evidence that is available suggests that the process of obtaining multiple licences from a range of licensing bodies, with differing consultation requirements, is not an efficient way to deliver protection or mitigation. It is also clear that the current licensing regime is not uniformly enforced and it is not always clear what checks there are to ensure that mitigation measures are followed.

74. The existing system of fishing vessel licences is reasonably well integrated and focused. Scottish Ministers do not intend to include consideration of it in any new licensing system.

75. Licensing is only one possible approach to protecting the marine features outlined above. Licensing has the great advantage that it delivers the certainty that no matter what the project is, it will be subject to independent scrutiny by an external body. That scrutiny will assess the potential impacts and reach a view on whether they are acceptable and, if they are not, what has to be done to make the impacts acceptable. Certainty is key to the delivery of environmental protection and some of our international obligations such as Water Framework Directive ( WFD) and the Marine Strategy Framework Directive ( MSFD). However it does have costs in terms of the time to process applications which may result in possible delays to economic development.

76. The Sustainable Seas Task Force ( SSTF) considered whether, in principle, licensing remained an effective system for managing activity in the coastal and marine area in the 21st century. In general, they concluded that licensing was an appropriate approach. Licensing provides certainty for those undertaking activity in the marine area, and licensees can effectively continue with the activity as long as they adhere to the conditions of the licence. The SSTF felt that licensing also provides Government with a mechanism to control, avoid or mitigate adverse impacts on Scotland's seas.

Q14 Does licensing remain an effective method of delivering both certainty for investment purposes, and protection for the marine environment?

CHANGES TO LICENSING

77. In general, the sea and coastal area are complex, dynamic and fast changing which creates difficulties in designing any robust licensing system. Moreover, the seas around Scotland can vary in nature, for example the East and West coast marine areas are very different. A key aim of the changes to marine licensing legislation is to deliver an effective, streamlined and modernised licensing system that deals with the diversity around Scotland's coasts.

Making licensing effective

The range of licensed activities and impacts

78. The licensing regime broadly aims to protect the marine area or mitigate or control the likely impact of human activities on the marine area. In general licences seek, where possible, to protect the following features of the marine area and, if it is not possible to protect these features, to seek to minimise the adverse impact that activity will have on these features:

• water quality i.e. keeping water chemistry, physics and biology within acceptable limits;
• physical features (including historic assets) ensuring they remain substantially undamaged;
• marine life, providing a high level of protection for some species for example seals, and management of other species, for example through fishing quotas;
• visual amenity/seascape, ensuring Scotland's iconic seascape is not lost;
• sea lanes, keeping sea channels navigable; and
• multiple use of areas, use of conditions, including temporal restrictions, can enable multiple use rather than single use.

79. The Sustainable Seas Task Force concluded that most of the potentially damaging activities were caught by the existing licensing regime. The SSTF identified dredging (including dredging in ports and harbours) as one activity that could be added to the list of licensed activities. Currently only the dumping of dredge spoil in the sea is licensed under FEPA (Box 3.2). Dredging activity (other than aggregates dredging) itself is not licensed although capital dredging is subject to Environmental Impact Assessment and scrutiny by Scottish Ministers. Scottish Ministers are responsible for licensing aggregates dredging out to 200nm. There are a range of other very much smaller activities, such as harvesting of seaweed that occurs to a very limited extent in limited areas but which could be considered as a licensable activity. However, at this point there is no indication that these activities have a marked environmental impact.

80. New forms of dredging i.e. water cutting, plough dredging or agitation dredging, which disturb the sea bed and allow disturbed sediment to drift away on the current rather than physically scrape sediment away, are not licensed under part II of FEPA and, as such, not subject to EIA. The cloud of sediment created by these forms of dredging can be particularly damaging especially through the smothering of adjacent shellfish beds. Scottish Ministers intend that all new forms of dredging should be subject to some form of licence and, where appropriate, environmental assessment.

81. The UK Energy Bill will create a new licence to regulate carbon storage below the seabed. This will replace that part of FEPA which would have regulated this activity. Scottish Ministers will have full responsibility for this new licensing regime within territorial waters i.e. within 12nm.

Q15 The existing licensing system covers most of the impacts on the seas from existing activities. One area of activity that has potentially large impacts and is not licensed is dredging. Scottish Ministers propose to license all new forms of dredging ( i.e. those forms that agitate the sea bed). Do you agree? Are there other activities that should be licensed?

Expansion of activities and impacts

82. Impacts on the marine and coastal area come from a diverse range of activity including fishing, aquaculture, shipping related activity, oil and gas, renewable energy, leisure and recreation. There is a widely held view that increased pressure on the marine area will come from the expansion of these activities rather than new activities. It is also possible that changes in the form of an activity may change the impact that activity has on the marine environment. The new forms of dredging are a clear example of this.

83. Scottish Ministers feel there may be some value in creating a power to add new devolved activities and impacts to the list of activities covered by the devolved licensing system. This could be done by creating a list of licensable activities and impacts in secondary legislation and providing Scottish Ministers with a power to amend the list subject to Parliamentary approval.

Q16 Scottish Ministers intend to create powers to set out a list of licensable activities in regulations. Do you have any views on this approach?

Making licensing streamlined

How licences are delivered

84. Licences are currently granted by a wide range of organisations including FRS, SEPA and Scottish Ministers. Delivery of separate licences for the same project can be problematic and time consuming. Scottish Ministers intend that the delivery of licences for marine based activities and impacts should be rationalised to reduce the regulatory burden. Scottish Ministers therefore propose that Marine Scotland should have general responsibility for any new marine licensing scheme.

Q17 The proposed Marine Scotland should have general responsibility for the delivery of the marine licensing system. Do you agree?

Numbers of licences

85. Scottish Ministers wish to minimise bureaucracy by reducing the number of devolved licence applications to a minimum and simplifying the application/consideration process and related consultation requirements. In general, any activity that is deemed to impact on the marine sensitivities set out above can require a number of separate licences. For example, developing a new fish farm will require planning permission from the Local Planning Authority, a CPA consent (safety of navigation) from the Scottish Government, and could also trigger Environmental Impact Assessment Regulations. Sites may also require consideration under the Habitats Directive if the development is likely to have a significant effect on a Natura 2000 site. In addition, any associated jetties, discharges from well-boats etc. may require a FEPA licence from FRS on behalf of Scottish Ministers. Operation of the farm will require a CAR licence (discharge consent) from SEPA and there will be further regulation covering containment and sea lice issues. In effect, the current system provides permissions/consents etc for individual environmental/ecological impacts separately rather than collectively.

86. There are two possible approaches to streamlining consents. The first would be to pull licences for individual impacts together into one environmental/ecological impact licence where it was sensible to do so. Obvious candidates would be FEPA, CPA, CAR consents (solely for discharges from marine installations), aggregates dredging and wildlife licences. This approach would leave the marine development consent where it currently lies, i.e. development consents for fish farms would remain with local authorities and for marine renewables with Scottish Ministers. In bring licensing together in this way, it would be necessary to ensure consistency of regulation where the licenses also apply to land based activities.

87. It may also be possible to integrate consideration of EIA into this regulatory mechanism. Scottish Ministers could potentially achieve this by making Marine Scotland the competent authority for EIA.

The merit of the impact approach is that it reduces the number of licences to two - an environmental/ ecological impact licence and a development consent (from Local Authorities for fish farms and a development consent from Scottish Ministers for renewable energy project). The impact approach probably brings a greater focus on environmental issues.

88. An alternative approach would be to integrate allthe licences which a particular activity has to apply for currently into one licence, creating a single activity licence. For example, rather than license all the separate aspects of a wet renewables project such as the development consent, any environmental/ecological consents, the navigation consents and the wildlife consents (if required), Scottish Ministers would create a single licence to cover the marine development, environmental, ecological and navigational aspects of any particular activity.

Similar to the first option, care would have to be taken to ensure consistency of regulation where the licences also apply to land based activities.

89. The merit of the activity approach is that it reduces the number of licences to the number of activities, this would probably be a minimum of three (aquaculture, renewables and others). This approach would probably have a greater impact on the timescales to deliver licences. However, in the case of aquaculture it does run the risk of reducing local democratic accountability by potentially removing local authorities from the fish farm development consent process (though they would of course be engaged in regional/local marine planning). For this reason Scottish Ministers are not minded to pursue an activity based licence for fish farming.

Q18 Scottish Ministers intend to reduce the numbers of marine licences that developers require to get before an activity can take place. There are two ways to reduce the numbers of licences either by creating a single licence for all marine impacts or by creating a single licence for each activity. Which system do you prefer?

Delivery mechanisms

90. In addition to the two approaches for structuring licences described above, there are two models for delivery.

91. The first is for Marine Scotland to be wholly responsible for regulation of marine consents, (excluding land-based operations). This would have the advantage of a one-stop shop for operators in the marine environment. For instance this could bring all aspects of a fish farm operation into a new single regulatory regime. While a single regulator approach has some intuitive attractions, this raises issues of consistency with other regulatory regimes, and the coordination and availability of expertise and resource between Marine Scotland and existing regulators.

92. An alternative option, which would address these considerations, is to provide operators with a single access point to the licensing framework, with Marine Scotland acting as the front door/gateway. For example in such a case SEPA could continue to regulate impacts in the water environment under CAR as at present. This model has the added advantage of ensuring the continuing effective delivery of our Water Framework Directive obligations.

Q19 Marine Scotland could undertake the licence work itself or operate as a front door coordinating the work of others. Do you have any views on these options?

Consultation

93. Licence applications are generally not subject to public consultation (through advertising) although the development consents underlying the siting of fish farms and renewables developments can be.

94. The licensing system appears to rest on a network of formal (statutory) and informal consultation. For example the CPA Part II consent rests on the views of a range of statutory consultees including Northern Lighthouse Board, Maritime and Coastguard Agency, SEPA, SNH, Harbour Authorities, Ministry of Defence and non-statutory consultees like the Royal Yachting Association and fisheries interests; though not every application will be sent to all these consultees. Some of these consultees will also be consulted on FEPA and CAR applications though the process is by no means uniform. It is clear that consultation is an essential element of the wider licensing system but that the consultation needs to be coherent and consistent, avoiding the apparent randomness of the existing system. Scottish Ministers propose to create a duty to produce and consult on a list of consultees for the new licensing system. Scottish Ministers would similarly ensure these parties would be consulted on new licence applications.

95. Over and above the formal consultation process, Scottish Ministers intend to consider new ways to improve local involvement in licensing decisions and new mechanisms to increase local accountability for decision making in the marine and coastal area.

Q20 Do you agree with the proposed approach to consultation, involving local stakeholders? Do you have any further comments?

96. The Sustainable Seas Task Force was firmly of the view that every effort should be made to exploit web-based solutions to provide more information on licensing and so that applications can be made online. Scottish Ministers agree with this view and intend to instruct Marine Scotland to investigate and pursue innovative approaches and where possible web-based approaches to licensing and consultation on licence applications.

Making licensing modern

97. The licensing system reflects an accumulation of licensing processes of different vintages reflecting different views of how licensing processes should work. In general the licensing system does not have a uniform approach to de-minimis rules ( i.e. when projects are too small to require licences), appeals procedures, or set timetables for decisions. In many respects the licensing system simply does not reflect modern good practice to minimise the regulatory burden and ensure that decisions are reached quickly and openly.

De-minimis

98. Anecdotal evidence suggests that there are a large number of licences issued for small uncontroversial projects each year. In many respects the administrative time spent licensing these projects is not justified by the associated risk or degree of protection delivered. It would be possible simply to remove these projects from the licensing system though that would raise a question of defining a level of project that is deemed too small either in scale or environmental impact risk. In Scotland an alternative approach that balances size and risk already exists, i.e.CAR, which sets out an approach to this issue that has been generally welcomed (Figure 3.1).

Figure 3.1 CAR Approach

99. In order to minimise the regulatory burden introduced by the new controls, the Controlled Activity Regulations establish a single cohesive framework setting out provisions for three tiers of control. This allows the most appropriate level of regulation to be applied. The three tiers of control are:

• General binding rules ( GBR) - intended for activities which represent a small risk to the water environment. SEPA will not be contacted by operators acting under a GBR and therefore SEPA will not know the location etc. of such activities. Consequently, they are appropriate for low risk activities which are unlikely to represent a cumulative impact.
• Registration - used to control relatively simple activities where the environmental impacts are predictable but where cumulative impacts are likely. Registration will encompass such activities as septic tank discharges, small abstractions and minor engineering works.
• Licences - control those activities posing the greatest risk to the water environment. These will be tailored to the particular circumstances of the activity concerned - its nature, extent and location. A significant proportion of licences will be simple authorisations permitting activities with standard conditions. Other licences will be more complex and SEPA will have to set a range of site-specific conditions.

100. One of the great benefits of the CAR approach is that it focuses attention on those activities which are likely to create damage. Further, it produces relatively little regulatory burden on smaller projects.
A simplified CAR approach based on the upper two tiers - registration and licensing - could be an appropriate way forward. Registrations could be run as a web based service.

Q21 Do you agree that the revised licensing system should incorporate the simplified CAR model throughout, to focus scrutiny on higher risk activities/impacts and reduce the regulatory burden?

Conditions

101. With the growth of activity in the marine area, competition for space will increase and the extent to which activities will have to co-exist, either in adjacent spaces or the same space, will grow. Operators and developers will therefore have a responsibility to act as good neighbours both in respect of adjacent activities and the sea itself. In general, any dispute between two activities about operational issues should be dealt with through negotiations at the Scottish Marine Region level. Nonetheless, there may be occasions where more formal action is required and Scottish Ministers would propose to provide Marine Scotland with the ability to insert conditions into a licence. In particular Scottish Ministers are considering whether to introduce a standard condition on decommissioning once an installation is at the end of its life. This approach would ensure the removal of redundant installations, freeing up marine space and avoiding potential detriment to the marine environment.

Q22 Scottish Ministers intend to provide Marine Scotland with powers to insert conditions into licences. Do you agree with this approach? In particular Scottish Ministers intend to create a standard condition on removal of redundant kit and installations, do you agree?

Appeals

102. Scottish Ministers are minded to develop some form of review mechanism. The exact form of the review, whether it is a formal appeal or a less formal review process will depend on the status of Marine Scotland. Modern practice suggests that a review process for those directly involved in an application is a valuable addition to decision making procedures. The ability of the applicant to seek a review can provide protection against poor decision making and protects applicants' rights. Nonetheless, any appeal mechanism can be time consuming and costly. In addition there needs to be sufficient separation between original decision-makers and those dealing with appeals to make an appeals process effective. The mechanism would be available to those directly involved in the development. The review could be developed in two stages: the first stage would be to ask Marine Scotland to exercise its "call in" powers to review the case; the second would be some form of independent consideration of the issue. Because of the nature of Marine Scotland (see chapter 6), consideration needs to be given to how best to construct a review process. A similar process of appeal would be used in relation to marine planning (paragraph 67).

Q23 Scottish Ministers believe an appeals procedure for those directly involved in the licence application would be a beneficial development. Do you agree?

Timetables

103. Anecdotal evidence suggests that the time taken to deliver a licence can occasionally be a problem. Ministers propose to take powers to set out appropriate timescales for the regulator to reach decisions. Scottish Ministers would seek parliamentary approval for these timescales through secondary legislation.

Charging

104. There is a wide variation of charging practice for marine licences in Scotland. CPA Part II consents are not charged for, FEPA Part II licences are charged for but on the basis of charges set in 1996, and CAR consents are charged on the basis of full cost recovery. In principle, the charges levied should cover the cost of assessing the application and issuing the licence, and related compliance monitoring and enforcement activity. It is a general principle that Government recovers the costs of providing licences. Nonetheless, there is some benefit in unifying the approach to charges and agreeing a transparent basis for charging. Care needs to be exercised to ensure that any charge is at a level that is not a disincentive to new businesses. In general the charge should reflect the polluter pays principle and should either be related to the size of project or to cost recovery.

Q24 To provide an easy and transparent system, do you agree that a scale of charges related to cost recovery is the most appropriate way to recover the costs of assessing, issuing, monitoring and enforcing licences?

Compliance Monitoring, Surveillance and Enforcement

105. SFPA uses a "risk based" approach to compliance monitoring. This technique concentrates surveillance onshore, at sea and in the air on activities and areas of greatest concern. A UK Police standard system collates and assesses intelligence received providing further precision targeting. This system is regarded throughout the EU as an exemplar of maritime surveillance.

106. Monitoring of compliance with licence/licence conditions and subsequent enforcement seems to be carried out with varying degrees of rigour across the various licensing regimes. In some cases such as CAR, monitoring is built into the consent; in others such as FEPA, there is a rolling monitoring programme; in relation to sea fishing the SFPA carries out this function, and in some areas there is no pro-active or dedicated monitoring activity at all.

107. Compliance monitoring covers a whole range of activities and could include, amongst other scenarios:

• scientific monitoring of any effects on habitats and the marine environment generally; and
• ensuring that conditions placed on licensed activity are being adhered to.

In relation to fishing, it means ensuring compliance with technical, conservation and quota management regulations in order to minimise illegal fishing and/or landings.

108. Equally, enforcement across this range of activity in the marine environment will also vary. At one end of the spectrum it could mean that operators are required to take preventative or remedial action in specific circumstances. At the other end, it could mean the withdrawal or suspension of any necessary consents; the imposition of administrative penalties; in terms of fishing, the reassigning of landings to species or areas different from that declared, or prosecution through the criminal courts.

109. Resources required to perform these activities are already in place by virtue of the SFPA's air, sea and other assets, and a network of local offices across Scotland. Many tasks can also be performed concurrently with other functions. For example, fisheries enforcement is undertaken by the SFPA alongside enforcement of marine nature conservation provisions in the offshore area around Scotland. This model could also be applied in other situations.

110. Variation in monitoring and enforcement activity can undermine the value of a licensing regime. There is value in ensuring that such activity is efficient, consistent and co-ordinated (where practicable) across licensing regimes, focused on ensuring licences are adhered to but causing a minimum level of disruption. The SSTF acknowledged that monitoring and enforcement could be costly but was unanimous in its view that the current licensing system lacks uniformity. It was also unanimous that proper monitoring and robust enforcement was essential if the licensing system is to operate effectively.

Q25 The Scottish Government proposes a review of existing licence monitoring and enforcement provisions relating to the marine environment and wishes to consolidate them into a single set of coherent powers and remedies. Marine Scotland should be tasked with ensuring compliance monitoring and enforcement activity is carried out consistently and efficiently. Do you agree?

Q26 Please provide any further comments you have on the licensing provisions in the consultation paper.

Table 3.1 Main marine legislation and responsibilities in Scottish territorial waters*

* Note: other, including reserved, responsibilities apply - some of which may be affected by UK marine legislation proposals/developments.

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