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European Court provides further clarification on mitigation and compensation measures

17 August 2018

This article is taken from August's public matters newsletter. Click here to view more articles from this issue.


Recently the case of People Over Wind and Sweetman v Coillte Teoranta (C-323/17) gave guidance on when mitigation measures should be considered in relation to projects in European protected sites.

In another Irish wind farm litigation case (Grace and Sweetman (Case C-164/17) – 25 July 2018), which interesting involves one of the claimants from the People Over Wind case, the Court of Justice of the European Union has handed down a preliminary ruling in connection with whether proposed measures were mitigation or compensation pursuant to the Habitats Directive 92/43/EC.

A referral was made to the European Court by the Irish Supreme Court. The European Court considered the question of whether, on a site where the suitable habitat for a protected species fluctuates, it could take into account at the appropriate assessment stage measures in a management plan. It was acknowledged that an area of potential habitat was being lost. However the proposed measures were said to ensure that the area of a suitable habitat would not be reduced and indeed may have been enhanced.

The crux of the question referred was if the measures could be considered as mitigation and therefore be considered under Article 6(3) when assessing whether the proposal adversely affects the integrity of a Special Protection Area or whether they were in fact compensatory and therefore would be relevant, if necessary, under Article 6(4).

The facts

The dispute surrounded the plan to build a wind farm in an Special Protection Area which is a natural habitat for the hen harrier. The hen harrier, a protected species under Annex 1 of the Birds Directive 2009/147/EC, forages in open-canopy forests. That territory, which covers 20,935 hectares, includes, in particular, areas of unplanted blanket bog and heath and 12,078 hectares of woodland. Due to its characteristics, the whole of the Special Protection Area is potentially suitable as a habitat for that species. The areas of the Special Protection Area in which the trees have matured to the point where there is a closed-canopy are felled and replanted. This is done in stages with the aim of maintaining a similar amount of open-canopy forest within the Special Protection Area. Accordingly, the parts of the Special Protection Area that are suitable habitat for hen harriers changes over time.

The wind farm development included a Species and Habitat Management Plan. That plan was for the Special Protection Area to be managed ‘dynamically’ and was to be implemented over a period of five years. It included measures to address the potential effects of the wind farm on the hen harrier’s foraging habitat. The proposals included three areas to be restored to blanket bog during the lifetime of the development and an area of second rotation forest to be subjected to ‘sensitive’ management. This sensitive management foresees the felling and replacing of the current closed canopy forest so as to ensure that there will be the same amount of hectares of perpetually open canopy forest providing suitable foraging habitat for the hen harrier and an ecological corridor between two areas of open bog. The felling would be done on a phased basis. Additionally, construction works would generally be confined to times outside the main hen harrier breeding season.

Article 7 of the Habitats Directive requires the procedure in Article 6 of that Directive to be followed in respect of proposed developments affecting Special Protection Areas under the Birds Directive. Firstly, Article 6(3) provides that any plan or project that is likely to have a significant effect on a Special Protection Area must be assessed. The competent authority may agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned. Secondly, Article 6(4) provides ‘derogation’ from Article 6(3) where a plan or project must be carried out “for imperative reasons of overriding public interest, including those of a social or economic nature”. In such cases, the member-state is obliged to require ‘compensatory measures’ and notify these to the European Commission. If compensatory measures cannot be provided then the project cannot be authorised.

The Habitats Directive does not refer to mitigation measures. However mitigation measures are generally considered measures that avoid there being an adverse affect on the integrity of a site by avoiding harm being caused (for example avoiding harm to nesting birds by only undertaking work at certain times of the year). The case of People over Wind and Sweetman made it clear that mitigation measures were to be considered at the Appropriate Assessment stage and not that the screening stage.

In 2014, An Bord Pleanála (the competent authority in this case) decided to grant permission for the development on the ground that it would not adversely affect the integrity of the Special Protection Area. Grace and Sweetman brought a judicial review challenging the decision. In their view the measures taken were not mitigation as they did not stop the harm occurring (the potential habitat of the Hen Harrier was still being destroyed) it simply reduced the impact. Instead they considered them compensatory. This is important because if the measures were compensatory then the Competent Authority was required to demonstrate imperative reasons of overriding public interest prior to authorising the use.

The initial appeal court rejected their application and upheld the decision by the competent authority. Grace and Sweetman were granted leave to appeal to Ireland’s Supreme Court. The Supreme Court determined two of the three grounds of appeal but referred the point about the interpretation of Article 6(3) and Article 6(4) of the Habitats Directive to the European Court.

The crux of the question was whether in the circumstances of the present case, the proposed measures be classified as mitigating measures, or whether they must be regarded as compensatory measures within the meaning of Article 6(4) of the Habitats Directive. The court interpreted the question to be:

“whether Article 6 of the Habitats Directive must be interpreted as meaning that, where it is intended to carry out a project on a site designated for the protection and conservation of certain species, of which the area suitable for providing for the needs of a protected species fluctuates over time, and the temporary or permanent effect of that project will be that some parts of the site will no longer be able to provide a suitable habitat for the species in question, the fact that the project includes measures to ensure that, after an appropriate assessment of the implications of the project has been carried out and throughout the lifetime of the project, the part of the site that is in fact likely to provide a suitable habitat will not be reduced and indeed may be enhanced may be taken into account for the purpose of the assessment that must be carried out in accordance with Article 6(3) of the directive to ensure that the project in question will not adversely affect the integrity of the site concerned, or whether that fact falls to be considered, if need be, under Article 6(4) of the directive”

The outcome

The court referred to its previous rulings in similar matters that ‘the effectiveness of the protective measures provided for in Article 6 of the Habitats Directive is intended to avoid a situation where competent national authorities allow so-called ‘mitigating’ measures’ — which are in reality compensatory measures — in order to circumvent the specific procedures laid down in Article 6(3) of the directive and authorise projects which adversely affect the integrity of the site concerned.’

There is a distinction to be drawn between protective measures forming part of a project and intended to avoid or reduce any direct adverse effects that may be caused by the project in order to ensure that the project does not adversely affect the integrity of the area, which are covered by Article 6(3), and measures which, in accordance with Article 6(4), are aimed at compensating for the negative effects of the project on a protected area and cannot be taken into account in the assessment of the implications of the project.

The Court noted the high level of uncertainty around the positive effects of the future creation of a new habitat for compensation for the loss of area or quality of a habitat in a protected area. The Court held that although measures in the management plan would at a minimum maintain and also potentially increase the amount of suitable habitat available for a protected species they could not be classed as mitigation measures and thereby be included in an appropriate assessment carried out under Article 6(3) to determine whether the plan or project would adversely affect the integrity of the site.

The court also noted that some parts of the Special Protection Area would no longer provide a suitable habitat for the hen harrier because of the development and questioned whether there was sufficient certainty that the measures in the plan would achieve its objectives. The judgement stated that “it is only when it is sufficiently certain that a measure will make an effective contribution to avoiding harm, guaranteeing beyond all reasonable doubt that the project will not adversely affect the integrity of the area that such a measure may be taken into consideration when the appropriate assessment is carried out”.

Although it is clear that some potential habitat was being lost, the improvements to other areas meant that it was arguable that the specific habitat for the protected species was maintained. Accordingly it is arguable that there was not an adverse affect on the integrity of the site as the amount of habitat was maintained.

The court considered this issue and found that it was not possible for the benefits of the proposed measures to be foreseen with the requisite degree of certainty when the authorities approved the development.

The court ruled that (emphasis added):

“where it is intended to carry out a project on a site designated for the protection and conservation of certain species, of which the area suitable for providing for the needs of a protected species fluctuates over time, and the temporary or permanent effect of that project will be that some parts of the site will no longer be able to provide a suitable habitat for the species in question, the fact that the project includes measures to ensure that, after an appropriate assessment of the implications of the project has been carried out and throughout the lifetime of the project, the part of the site that is in fact likely to provide a suitable habitat will not be reduced and indeed may be enhanced may not be taken into account for the purpose of the assessment that must be carried out in accordance with Article 6(3) of the directive to ensure that the project in question will not adversely affect the integrity of the site concerned; that fact falls to be considered, if need be, under Article 6(4) of the directive”

Impact of the decision

In its ruling, the court relies on a number of its previous rulings (People Over Wind, Orleans and Others, Briels and Others) to come to its conclusion, and provides further guidance as to what constitutes mitigation measures and when such measures can be considered. Whilst the People Over Wind case stated that mitigation measures should not be considered at the screening stage, but in an appropriate assessment, this case, in my opinion, reiterates previous rulings that only measures which avoid the adverse effects are mitigation measures. Measures which reduce the harmful effects of the habitat loss should normally be considered as compensation measures.

The European Court’s reference to the effectiveness of the proposed measures is interesting. It potentially leaves the door open to arguments that if a measure to improve habitat in another part of the Special Protection Area could be guaranteed to be effective then, despite it not stopping the harm to a particular part of the Special Protection Area being caused, it could still be considered at the appropriate assessment stage. In my opinion this is not however the intention of the court. The court is likely to take a negative view on any attempt by competent authorities to class compensatory measures as mitigation measures and so avoid having to establish imperative reasons of overriding public interest.

Whilst the case provides further clarity on what falls within mitigation measures, this largely supports the current case law. However each case will depend on the structure and intention of the plan or project in question and the benefits of avoiding having to establish imperative reasons of overriding public interest are such that this is unlikely to be the final case we see on this point.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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