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Report of the Enterprise Committee

Summary

Today, virtually all Danish enterprises, with a duty to be approved, do in fact have environmental approval. Technological development, initiatives from local authorities, and industry attitudes to environmental issues have given rise to great advances over the past ten years, and in general the environmental impacts from enterprises are under control. Many Danish enterprises lead Europe in environmental aspects.

Today, enterprises demand quicker and more flexible administration of approval procedures, and they expect easy access to information on the requirements they must meet. A clear initiative in this regard it is to examine opportunities to simplify and rationalise enterprises' reporting obligations.

It is also important that inspection by the authorities is based on well-defined and simple guidelines so that efforts are directed where they are most needed and so that the greatest possible benefit is reaped from enterprises' own environment work.

The Committee has therefore discussed the possibilities of simplifying the approval system for a number of enterprises so that fewer enterprises are subject to the current approval system. The Committee has also discussed the possibilities of changing the organisation of municipal inspection, the rules regarding user payment, and introducing reporting to a single place.

Future regulation of enterprises

The Committee has discussed the possibilities of easing the administrative burden of enterprises in connection with regulation. The Committee's discussions focused partly on the options for reducing the number of enterprises subject to the current, extremely comprehensive approval process, and partly on ways to develop a simplified approval system. Furthermore, the Committee discussed the current notification scheme. The Committee has confirmed that current environmental standards must be maintained.

The Committee considers that it is possible to introduce a simpler approval system, which could be applied to the majority of the enterprises with a duty to be approved so that the present approval procedure could in future be reserved for large and/or environmentally complex enterprises. All other enterprises would be regulated as before via improvement notices, if significant pollution is ascertained. .

The Committee has not pointed to any specific criteria that could be applied to identify clearly enterprises that should continue to be subject to the current approval system. However, there was agreement that this system should continue to apply to enterprises covered by both the IPPC Directive and appendix 1 of the EIA Directive. There is also agreement that the existing scheme should apply for certain other larger and environment-relevant enterprises. The Committee suggests that selection of these should be made in connection with preparation of the new regulations.

The simplified approval system is expected to cover up to 5,200 of approximately 6,550¹ existing enterprises subject to approval.

The Committee proposes that the simplified approval system should be based on standard approvals as far as possible. The precondition for being able to issue a standard approval is that there is a set of standard requirements for a given sector or type of enterprise that the approving authority can directly apply in its approval procedure. Therefore, the Committee proposes that, in cooperation with the sectors, regional/local authorities, and other relevant parties, the Danish EPA prepare a "datasheet" for sectors where this is possible.

The datasheet should include a short description of the sectors and their processes/activities; a brief description of the most important environmental factors pertaining to the enterprises in the relevant sector; standard conditions for organisation and operation on the basis of best available technology and clean technology, including emission limits for significant air pollution; and finally a limited degree of conditions for own control.

Noise and odour conditions and, to a certain extent, conditions for own control should be set individually on the basis of a specific assessment of the location of the enterprise in relation to its surroundings, while conditions for wastewater should be based on the existing rules for wastewater permits.

In addition, it may be necessary to make individual requirements based on conditions at the individual enterprise which deviate from the descriptions in the datasheet.

The datasheet should contain an application form specifically for the type of enterprise it deals with. The application requirements for advance documentation should be simplified compared with the current requirements. As the datasheet will take account of the most recent developments in best available technology (BAT), including clean technology, the enterprises covered by the datasheet (and therefore standard approval) should no longer have to report on their deliberations regarding BAT in their applications.

The datasheet should be prepared so that it represents the total knowledge at a given time for a given sector. With their current knowledge and experience, the Danish EPA and others can describe the potential pollution from a large number of types of enterprise and establish a set of standard requirements based on BAT.

From the enterprise's perspective, the datasheet will provide clarity, overview, and predictability for environmental requirements. Moreover, it will be easier for the authorities to issue an approval as usually only few conditions will have to be set individually.

The Committee does not expect that it will be possible to prepare datasheets for all types of enterprise subject to the simplified approval procedure. Therefore, the Committee proposes that the simplified approval system provides the possibility to issue an approval on the basis of an individual assessment according to the same guidelines as today.

With regard to these enterprises, simplification means that the requirements for the application and advance documentation will be reduced and that the current requirement that the enterprise must always report on any possibilities to apply BAT need only be complied with in cases where there is relevant material to be included by the enterprise in its deliberations on choice of technology and where the enterprise is not covered by a datasheet.

It is proposed that the existing approval system be retained with slight adjustments, including changes requested by the agricultural sector to ease administration. In this connection, the Ministry of the Environment will look at possible simplifications in the existing process for applications for approval.

Finally, the Committee proposes that the existing notification scheme be withdrawn. It is suggested that the municipality obtain information on new enterprises from the CVR register (a register of Danish companies), and information on changes and extensions to existing enterprises that may give rise to significant pollution through inspections and if possible through processing building permits, etc. The Committee also welcomes the possibility to consider simplification of the agricultural sector's notification obligations under the Statutory Order on Manure.

Future inspection

The Committee has discussed the possibilities of organising future municipal and county inspection to take account of the proposed changes in enterprise regulation.

The Committee's discussions have especially focused on differentiated inspection and that, via this differentiated approach to inspection, the supervisory authorities will best take into account the environmental initiatives carried out by the individual enterprise itself. The differentiated inspection approach will also lead to targeted exploitation of the resources of the authority for inspection activities.

In order to both promote consideration of the enterprises' own efforts and to ensure efficient and appropriate inspection, the Committee proposes that inspection of enterprises is differentiated according to the "something-for-something" principle so that inspection is reduced as enterprises' own environmental efforts increase. Enterprises with good environmental conditions should be able to perceive administrative benefits, including fewer inspection visits.

Through their inspection, many counties and municipalities have offered enterprises knowledge of more extensive and voluntary initiatives benefiting the environment, for example taking part in environment networks with exchange of experience, discussions about environmental action plans or eco-management systems, or possibly more environmentally friendly products. The environmental authorities have noted that enterprises are very interested in such dialogue.

In order to assist the authorities in their work with differentiated inspection and to "create more predictability in the organisation of inspection" the Danish EPA, in cooperation with the organisations represented in the Committee and others, will prepare guidelines on carrying out differentiated inspection on the basis of the principles below, which were laid down by the Committee.

The Committee proposes that enterprises are categorised in three levels according to their environmental efforts so that level 1 comprises enterprises most positive towards the environment, level 3 comprises the least positive, and level 2 comprises an intermediate group. The supervisory authorities are to use this categorisation to differentiate inspection of enterprises and to target and set priorities for inspection resources.

The categorisation is to be on the basis of the following three parameters:

• The enterprise's own systems for environmental work - eg. environmental action plans, eco-management systems, and the quality of own control procedures.
• The enterprise's own information for the authorities on any environmental problems arising, other reliable and complete information important to assess the environmental conditions of the enterprise, as well as the enterprise's own efforts to deal with justified complaints about nuisance from the enterprise.
• The enterprise's respect for the law, including prompt action regarding improvement notices, compliance with various conditions and provisions in own control procedures, etc.

The result will be that, all things being equal, level 3 enterprises will experience more thorough and visible inspection than level 1 enterprises. It should be possible to reduce inspections at level 1 enterprises to the minimum frequency for the relevant type of enterprise.

However, other considerations than the categorisation may have to be included in the inspection priority stipulated by the supervisory authority. For example, the potential pollution from the enterprise, the number of complaints about the enterprise, any accidents at the enterprise, and inspection with regard to tracing sources of pollution. Furthermore, the authorities may decide to prioritise special interest areas (eg. sector campaigns).

The Committee recommends that targeting inspection resources towards enterprises should take place so that, in its annual planning, the individual supervisory administration ensures that significantly more resources are spent on level 3 enterprises than on the same type of level 2 enterprise. Correspondingly, more resources should be spent on level 2 enterprises than on the same type of level 1 enterprise. Overall application of resources on inspection by each supervisory authority also depends on the number of enterprises in each category, as well as the distribution of enterprises regarding their supervisory complexity.

The Committee also recommends that as far as possible supervisory authorities use the information already available from the enterprises, eg. information from certification schemes (EMAS or ISO 14001). In this way, enterprises will avoid the risk of doing the same work twice and the authorities will avoid superfluous inspection and the associated costs.

In order to ensure quality inspection and targeted inspection resources, the Committee proposes that the current fixed minimum frequency for municipal inspection at enterprises be replaced with a minimum frequency for reviewing all important environmental conditions at an enterprise; what is referred to in the report as "overall inspection". In this way, the authority guarantees that all relevant environmental conditions are checked or assessed during overall inspection. However, it is always the responsibility of the enterprise to keep to relevant environmental provisions.

The individual supervisory authority must itself assess the measures necessary, but at all events inspection should be differentiated, and, for example, a "desktop inspection" may be enough for level 1 enterprises. In order to ensure contact with the enterprise, however, at least one physical visit to the enterprise should be carried out during the period for overall inspection.

The Confederation of Danish Industries (DI) does not consider that minimum frequencies and "overall inspection" are more important, but it does regard the allocation of supervisory authorities' resources to the different levels to be important benchmarks.

Furthermore, the Committee recommends that the Danish EPA gather information on application of resources within the different levels so that a basis for assessing whether the objectives have been met can be established within a few years.

The method of calculating application of resources will be laid down in the preparation of guidelines on differentiated inspection.

In order to further ensure the quality, transparency, and uniformity of inspection, the Danish EPA will examine the possibilities for benchmarking inspection by municipalities and counties in selected areas. The examination will look at whether measurement parameters for quality of inspection can be established for use in such a comparison.

Social consequences of the proposal

The proposal from the Committee regarding regulation of enterprises and inspection involves considerable administrative benefits for both enterprises and the authorities. With regard to enterprises, these benefits will be that more than 5,000 enterprises will be able to transfer to a simplified approval system. Of these, about 4,000 enterprises will in future be able to obtain a standard approval, and they will experience a notable relaxation in approval procedures, while the authorities will no longer have to carry out time-demanding approval procedures.

With regard to inspection, the future differentiated inspection will mean that efforts will be directed to the enterprises with the most serious environmental problems, thus achieving the most cost-effective solutions for society when achieving environmental objectives. Environmentally positive enterprises will experience benefits from differentiated inspection in that the efforts they make themselves will result in reduced control by the authorities, including fewer inspection visits. For the authorities, differentiated inspection will mean that resources are used efficiently and optimally.

The Committee agrees that the simplified approval system will lead to less use of resources by the public sector in parallel with implementation of the system.

Reporting

The Enterprise Committee agrees that the flow of environment information between enterprises and the authorities should be coordinated and organised as simply and as efficiently as possible so that enterprises are burdened as little as possible, while still meeting the information needs of the authorities and the public.

The ongoing reporting by enterprises being focused on by the Committee fulfils various purposes. These include ensuring public access to environment information, checking that the enterprise meets the authorities' conditions (own control), as well as various statistical purposes.

Reporting from enterprises also helps Denmark to meet a number of international reporting requirements, for example in connection with EPER² notification and the coming PRTR³ Protocol, as well as to document reductions in emissions, compliance with Directives, and similar.

The Committee has noted that a number of initiatives are in progress to assess the possibilities of simplifying and digitalising reporting by enterprises.

Reporting about waste generation comprises a significant part of enterprises' reporting obligations, and it is being analysed by a special working group that is expected to complete its work in 2004.

The Internet portal for enterprises virk.dk opened in autumn 2003, and this represents an obvious possible hub for future statutory reporting from enterprises about the environment.

The environment Internet portal, which will be established in cooperation between the counties and

The Danish EPA will ensure efficient exchange of data between the counties themselves, and between the counties and the Ministry of the Environment. At first, enterprises will not be part of the environment portal.

In order to avoid burdening enterprises more, the latest changes in green accounts aim for green accounts to be used for collecting environmental information for further international reporting.

The Digital Taskforce and the Danish EPA have initiated work to assess the possibilities for simplifying and digitalising green accounts. The Task Force is expected to complete its work at the end of 2004.

During the autumn of 2003 a more detailed specification of the data to be included in green accounts was issued. On the basis of this specification and the assessment of the potential for simplification and digitalisation of green accounts, as well as the initial experience with virk.dk, in early 2004 it will be possible to decide on the future simplification and digitalisation work.

The Danish EPA has stated that the Danish government has stipulated that user payment should continue.

If they are implemented, the changes in regulation of enterprises and organisation of inspection proposed by the Committee, will mean it is not possible to keep the rules for user payment for environmental approval and inspection as they are at present.

The Secretariat has asked the Committee to propose different new user-payment schemes, including a model for hourly rates. However, the Committee has not found in appropriate to discuss these models in more detail in this forum and it has not made any recommendations regarding the principles for future user-payment schemes.

1) This information comes from the inspection report by the Danish EPA for 2001.
2) EPER stands for European Pollutant Emission Register.
3) PRTR stands for Pollutant Release and Transfer Register.

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