Thursday, 12 February 2015

Government must now take action over restitution

We have seen the legal cosh applied to planning committees to force through such unwanted developments as windfarms in areas of natural beauty, supermarkets where ample shopping provision exists and power-stations burning carbon-based fuels. Defending sensible decisions through the appeal process (note there is no possibility of appeal against an irrational approval of development) is expensive enough if a council is successful, but there is always the threat of having to pay all the costs if unsuccessful. Developers usually have deep pockets and can ante up for powerful legal teams.

Now a central government agency has been coshed. The Serious Fraud Office has been billed for the defence costs as well as its own in the case referred to here. The SFO is said to be considering appeal against the costs order. If the SFO is unsuccessful, there will be a powerful disincentive to its pursuing similar cases in future.

Given the appearance of dishonesty on the part of the defendants it seems to me that the SFO had every right to pursue them. As the judge in the criminal case opined:

after five days of legal submissions, Lord Justice Hickinbottom threw the Serious Fraud Office's case out saying that the six defendants had not acted unlawfully regardless of whether or not they had acted dishonestly [My emphasis]

So, as the law stands, there is no practical means of enforcing restitution of mineral extraction in this country if the extractor contrives to move ownership offshore. This is a serious worry not only for the areas round here sitting on coal, but also for those where fracking is possible.

Fracking is not economic at present because of the falling price of petroleum. However, it may become more attractive in England and Wales when Saudi Arabia turns off the taps again. The main objection to fracking (apart from its potentiating earth movements) based on experience in the States is that slipshod or minimal restitution, including capping no longer profitable wells, leads to contamination of ground water. Since the economic viability of fracking in this country is going to be marginal compared with that in the vast plains of the US, the temptation to skimp on restitution legally is obvious.

Only changes in the law can prevent this. At the very least, adequate funds for restitution should be put into an independent account held onshore. Ideally, the liberalisation of offshore and brass-plate companies, which has led to losses to the exchequer as well as communities, should be reversed.

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