Stricter requirements for businesses regarding water extraction or discharge

The European Commission has initiated infringement proceedings against the Netherlands last week for non-compliance with the Water Framework Directive (WFD). According to Brussels, the granting of permits for water extraction and discharge is insufficient. The Netherlands has been struggling with the directive for years, which requires groundwater and surface water to meet certain quality standards by 2027. This is not only harmful to humans and nature, but it also means that the Netherlands may face further legal proceedings from Europe. In addition, stakeholders such as environmental organizations may take legal action against the granting or renewal of permits for businesses to extract or discharge water. Organisations dealing with water in this way should prepare for a 'nitrogen-like' dossier, argue PwC's chief economist Barbara Baarsma and legal expert Skip van Duren.

Champion in water management threatens to not meet WFD standards for water quality

The attention to water has increased in recent years due to the contamination of drinking water, drought caused by climate change, and pollution of water by agriculture, industry, and households. This increased focus and concern are justified. Water is crucial for humans and nature, as well as for the production of food and goods. The Netherlands is one of the founders of the European Water Framework Directive (WFD), which has been in force since 2000 and aims to ensure that water throughout the European Union meets certain standards for chemical and biological quality by 2027. 

It is ironic that the Netherlands, as a founder and champion of water management, may not meet these standards. The quality of water in the Netherlands has improved significantly in recent years, but not enough to comply with the new regulations. Dutch water contains, among other things, too many chemicals and fertilizers. 

Failure to meet WFD standards may result in legal proceedings 

If the Netherlands fails to meet the deadline in 2027, it may lead to delays or cessation of business activities due to legal proceedings. Just like what happened after failing to meet the nitrogen targets of the European Habitat Directive, a part of the Netherlands may be locked down for commercial activities, which is reminiscent of the nitrogen issue. An important difference is that the effects of projects or activities on water quality are more localized than with nitrogen. A project in a specific area can have direct consequences for the water quality in that particular area, without necessarily affecting other areas.

The WFD dossier is reminiscent of the nitrogen issue 

Last year the Council for Infrastructure and the Environment published a report stating that a lack of urgency and non-binding agreements between all water managers (national government, provinces, water boards, municipalities) are some important reasons why the standards have still not been met. The council also pointed out that the legal measures to which these parties are obligated are often poorly implemented. Oversight is insufficient, permits are not updated or updated too late, and water treatment plants are adjusted too late.

The council also stated something interesting, that the water policy is too limited to the water domain and that in other policy areas - such as manure policy, regulations for pesticides or chemical substances - too little consideration is given to the WFD standards, even though they should have an impact in those areas. The council's analysis of the causes strongly resembles the causes underlying the nitrogen crisis.

Impulse program WFD can lead to difficult trade-offs

Last year, the previous responsible minister, Harbers, established an impulse program in an ultimate attempt to achieve the WFD goals by 2027. However, in his final letter to the House of Representatives, the outgoing minister stated that while water quality is improving, the pace is too slow. He indicated it will be 'exciting' to see whether the current approach is sufficient to meet the WFD in three years. One of the reasons, according to Harbers, is that 'easy measures have already been taken and that the remaining measures require difficult administrative choices that are not currently being discussed sharply enough.' 

Everyone can imagine what those 'difficult administrative decisions' will be about. It will involve companies’ activities that pollute water on the one hand but are economically important on the other. It will involve the size of the livestock population, whether or not to allow certain substances in consumer goods that end up in the water through the sewer system. Much will depend on the approach of the current government, which is still in the process of translating its main agreement into concrete policies. The actual wording: ‘Water Framework Directive’ does not appear in the main agreement, and when discussing the quality and availability of water, it is seen as a prerequisite for economic production in sectors such as construction, transportation, and agriculture.

Tightening permit requirements may have consequences for businesses 

Companies need to be aware regulations are becoming stricter. Firstly, this applies to organisations that have or need a permit for discharging or extracting water. Obtaining a permit will be less simple, as environmental organizations, local residents, and other stakeholders will hold the relevant authorities to legal standards. Some, especially large organisations, are preparing themselves, but there are still many organisations that are hardly aware of what is coming their way. In principle, the Water Framework Directive (WFD) is relevant to any organisation that discharges, extracts, or otherwise uses water, but organisations in the manufacturing sector (industry, construction, primary production), organisations in healthcare (pharmaceuticals), and the food industry (manure, crop protection, nutrients) are most affected by tightened permit policies.

Is the government itself WFD-proof? 

Furthermore, in conversations we have with organisations, we hear the government itself is not ready. Permit issuers such as Rijkswaterstaat and the water boards must have made their permits WFD-proof, but this has generally not yet been done. Partly because they struggle with how to interpret all the provisions of the WFD. This can have serious consequences for organisations as they also do not know if they comply with the WFD with an old, previously obtained permit. This does not mean that organisations cannot already do anything at this current time. The questions below provide starting points for preparing for the WFD.

Awareness of the WFD impact

• Does your organisation discharge one or more chemical substances? If yes, how many? 

• Does your organisation have an up-to-date overview of all discharges and emissions of pollutants into surface water and groundwater? 

• Does your organisation have insight into the amount of groundwater and surface water it extracts for its business processes, and do these extractions comply with the sustainability criteria and permit requirements as set out in the WFD and related guidelines?

Assessment of legal consequences for the organisation

Does your company have a plan for cases where re-evaluation of permits reveals that activities are not in compliance with the WFD standards?

Examining individual courses of action 

• What measures are needed to adjust your organisations operations and processes to meet the new water quality standards? This includes considering technical possibilities (such as additional filters), innovation in the production process (such as using different raw materials), water conservation, and reuse. 

• What are the expected costs for implementing these measures, and do you have a long-term budget plan? How does your organisation monitor the effectiveness of measures taken to improve water quality, and how do you report on this?

Being prepared for potential new policies and/or legal procedures

• Do you keep up with current policy changes adequately and anticipate them? For example, the WFD and the Priority Substances Directive will be supplemented with new substances. 

• Timely implementation of the obligations arising from the WFD in the company's operations.

Providing constructive contributions to policy development and finding a solution

• Do you have a communication strategy to inform stakeholders, including the local community and NGOs, about your efforts and progress in water management?  

• Do you contribute, where relevant, to the public debate and make the optimal course of action known (for example, through an industry association)?