EBA April-2013 Palma - Agenda Item 12a - Water-Framework-Directive-update-including-water-services - v1.1

Agenda Item 12a Water Framework Directive Update (including Water Services) This paper provides some background to the issue of water services under the Water Framework Directive and gives an update on progress to date. For completeness it includes the paper circulated in Bodrum (October 2012) and contributions from W. Dekker and D. Haendel on this matter as appendices to the summary document. WFD Background The EU Water Framework Directive (WFD) promotes a new approach to water management through river basin planning. It aims to prevent deterioration in water quality; improve and protect inland and coastal waters and groundwater; lead to better and more sustainable use of water as a natural resource; create better habitats for wildlife that lives in and around water and help reduce the effects of floods and droughts. WFD operates on a series of six year cycles, as follows First cycle Planning complete end 2009 Implementation complete end 2015 Second cycle Planning complete end 2015 Implementation complete end 2021 Third cycle Planning complete end 2021 Implementation complete end 2027 WFD requires the production in each planning cycle of a River Basin Management Plan (RBMP) for each river basin district. Each plan is required to contain a programme of measures (POMs) designed to meet the objectives of the Directive.

The Directive requires Member States to achieve Good Status for all its waterbodies by 2027 at the latest. Ideally this target should be met by 2015 but the Directive allows for some late delivery (through measures being deferred to later planning cycles) on the grounds of technical infeasibility, disproportionate cost or natural conditions provided there is no deterioration. Progress to date 23 Member States (MS) have recently submitted their 1st cycle RBMPs to the EU Commission (EU COM) for assessment. 4 MS have not delivered (all of) their RBMPs (Belgium is missing one region, Spain is missing most and Greece and Portugal have not reported). EU COM review of the RBMPs raised a number of issues, some positive and some negative. Whilst it was recognised that MS had worked extremely hard to deliver their RBMPs EU COM are expecting more consistency and fewer deferred measures in future cycles. EU COM criticised the ‘overuse of exemptions’, particularly disproportionate cost as a reason to defer measures to later planning cycles. MS’ reliance on such exemptions appears to be one of the reasons why the EU COM is focussing on cost-recovery and seeking to identify ways that MS can recover costs from third parties to fund WFD measures.

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One of the ways this is being tackled is through the interpretation of water services under WFD. Water Services Article 9(1) of the WFD requires MS to ‘take account of the principle of recovery of the costs of water services, including environmental and resource costs….in accordance….with the polluter pays principle’. Water services are defined in Article 2(38) of the Directive as all services which provide for households, public institutions or any economic activity: (a) abstraction, impoundment1, storage, treatment and distribution of surface water or groundwater; (b) waste-water collection and treatment facilities which subsequently discharge into surface water. Environmental and resource costs, or economic externalities, are costs that may not currently be included in the price paid by consumers. These are described in advice published on the Europa website as relating respectively to:

The cost of the waste caused by water use on the ecosystem (for example salination or degradation of productive soils), and

The cost of resource depletion leading to the disappearance of certain options for other users.

Water use, meanwhile, includes water services plus ‘any other activity identified under Article 5 and Annex II as having a significant impact on the status of water’ (Article 2(39)). Thus activities may be either a water use and a water service or only a water use. Since the submission of the 1st cycle of RBMP it has become clear that the EU COM feels that the concept of water services is being too narrowly interpreted by MS. The COM defines water services as a ‘wide notion that includes water for abstraction for the cooling of industrial installations and for irrigation in agriculture; the use of surface waters for navigation purposes, flood protection or hydro-power production; and wells drilled for agriculture, industrial or private consumption’. It is also, in their view, an ‘effective way to implement the polluter pays principle enshrined in Article 9 of the WFD’. Whilst the EU COM understand that MS may refrain from applying the cost recovery of water services principle if certain conditions are met, they ‘cannot exclude the cost recovery of certain services as a matter of principle’. In other words, it is up to the MS whether they wish to apply cost recovery to certain activities but there must be specific reasons rather than exclusions being applied across the board. This seems to be particularly the case if ‘lack of resources’ is then cited as a reason for not achieving certain objectives of the WFD.

1 For example through the use of locks/dams/other structures to hold back water within a system for the

purposes of navigation

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What action have EU COM taken on the issue of water services? Nine cases are open between the EU COM and Austria, Belgium, Germany, Denmark, Hungary, Ireland, Finland, the Netherlands and Sweden on the interpretation of water services. The case against Germany has been taken to the European Court of Justice (ECJ) and details are provided overleaf:

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Case against Germany Action brought on 19 November 2012 — European Commission v Germany (Case C-525/12) (2013/C 26/67) Language of the case: German Parties Applicant: European Commission (represented by: E. Manhaeve and G. Wilms, acting as Agents) Defendant: Federal Republic of Germany Form of order sought The applicant claims that the Court should:

1. declare that the Federal Republic of Germany has failed to fulfil its obligations under Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (the Water Framework Directive) and in particular under Article 2(38) and Article 9, because it has adopted an interpretation which excludes certain services from the concept of ‘water services’.

2. order the Federal Republic of Germany to pay the costs. Pleas in law and main arguments The Commission considers that the abstraction, impoundment, storage, treatment and distribution of surface water or ground water for the purposes of hydro-electric power production, navigation and flood protection are also included within water services. Further, personal consumption is also be categorised under water services. The use of the concept ‘water services’ by the defendant is contrary to Article 9 of the Water Framework Directive (WFD). The defendant excludes water services such as impoundment which is intended for hydro-electric power production, navigation and flood protection from the scope of water services within the meaning of the Directive. Such a narrow interpretation is not compatible with the WFD, undermines the effectiveness of Article 9 WFD and thereby jeopardises the attainment of the Directive’s objectives. It is true that the Member States enjoy a certain margin of discretion on the basis of Article 9 WFD to exclude water services from recovery of costs. They might first have regard to the social, environmental and economic effects of the recovery of costs as well as the geographic and climatic conditions. Further, a Member State might under Article 9(4) WFD decide not to apply the provisions of the second sentence of Article 9(1) WFD in relation to water-pricing policies and recovery of the costs of water services. That option is subject to the condition that there is an established practice in the Member State and that the purposes and the achievement of the objectives of the Directive are not compromised. However, the complete exclusion of a substantial range of water services, as effected by the defendant, goes far beyond that margin of discretion.

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Why is this important for boaters?

If EU COM succeeds in widening the interpretation of water services to include navigation

there is a chance that boaters will be charged for using the waterways of Europe. In

addition, because the navigation sector in the wider sense will suffer increased costs, e.g.

dredging companies, port operators, harbour authorities, it is likely that they will pass at

least some of them onto the users.

In some countries boaters already pay to use the waterways, particularly inland. However

this wider interpretation of water services could increase existing costs and make them

more widespread.

What happens next?

Member States have a period of time to respond to the EU COM cases and either accept

their position in principle or challenge it; EU COM will then consider their responses.

Ireland have already accepted the EU COM position in principle i.e. that the interpretation

of water services should be wider. There is no detail as yet on how water services cost

recovery will be widened so it is unclear what sectors could be affected.

A number of international conventions cover the larger river systems in the EU (e.g.

Manheim Act, Danube Convention) which enshrine free passage on these large river

systems. These Acts take precedence over EU legislation and it is likely that the relevant

Member States will use this as part of their defence. For waterways not covered by similar

international laws the situation is less clear. This could leave smaller waterways at a

competitive disadvantage from an industry point of view, and create disparity in terms of

user charging.

The Netherlands and Belgium have sought a reasoned opinion on the issue of impoundment

for shipping and flood protection. The Supreme Court in the Netherlands has judged that

the provisions of the Manheim Act should apply to their other waterways however their

decision does not supersede EU legislation.

The outcome of the Germany case is anticipated at the end of 2013/early 2014 and this will

influence future steps EU COM may take against other Member States.

What is the EBA doing on this issue?

EBA has membership on the WFD Navigation Task Group (WFDNTG) which comprises a

thematic cluster of European navigation-related organisations which provide the navigation

sector’s contribution to the WFD Common Implementation Strategy (CIS). In 2008 when the

issue of water services first came to light, the WFDNTG produced a position paper that

clearly supports the position of the majority of Member States in defining navigation and its

associated infrastructure as a water use in line with Article 2(39) of the WFD, but not as a

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water service as defined in Article 2(38). This paper was reviewed at the end of 2012 and

was considered to still correctly reflect the position of the navigation sector.

The Secretariat will continue to monitor the water services issue through the WFDNTG and

seek to influence EU COM on this matter wherever possible. Until the outcome of the

Germany case is known there is unlikely to be much progress.

EBA members in the relevant Member States can help to keep the Secretariat abreast of

developments in their country and identify potential opportunities to bring influence. For

example, what detail is available on the interpretation of water services?

The Secretariat will provide an update on this matter at the next EBA meeting in October

2013.

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Appendices

Appendix 1……………………………………………………..WFDNTG Position Paper on Water Services

Appendix 2…………………………………………………Correspondence from W. Dekker on Item 12a

Appendix 3………………………………………………… Water service update from D. Haendel

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Appendix 1…………………………………WFDNTG Position Paper on Water Services

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Navigation as a water use vs. water service WFD Navigation Task Group1 Position Paper

November 2008

Background Article 9(1) of the EU Water Framework Directive (WFD) requires Member States to ‘take account of the principle of recovery of the costs of water services, including environmental and resource costs……in accordance…...with the polluter pays principle’. Water services are defined in Article 2(38) of the Directive as all services which provide, for households, public institutions or any economic activity: (a) abstraction, impoundment, storage, treatment and distribution of surface water or groundwater; (b) waste-water collection and treatment facilities which subsequently discharge into surface water. Environmental and resource costs, or economic externalities, are costs that may not currently be included in the price paid by consumers. These are described in advice published on the Europa website2 as relating respectively to:

- the cost of the waste caused by water use on the ecosystem (for example salination or degradation of productive soils), and

- the cost of resource depletion leading to the disappearance of certain options for other users.

Water use, meanwhile, includes water services plus ‘any other activity identified under Article 5 and Annex II having a significant impact on the status of water (Article 2(39)). Thus activities may be either a water use and a water service or only a water use. The CIS WATECO Guidance3 “Economics and the Environment” does not include navigation on its list of water services. Indeed, Annex B3 of the WATECO guidance specifically identifies navigation as being amongst the “important water uses which may cause significant impacts and therefore have to be taken in consideration.” Article 9 of the WFD only applies to activities that are both a water use and a water service. It does not apply to activities that are only a water use. Navigation as a water use or a water service? Based on the above, it is clear to members of the WFD Navigation Task Group that navigation is not a water service, but a use of the water body. This is not to say that navigation and its associated infrastructure do not impact on the status of water - of course there may be impacts which require measures under Article 11(1) of the Directive. Rather it is to make the point that navigation should be considered only as a water use (Article 2(39)) not also as a water service (Article 2(38)). This position is in line with the vast majority of EU Member States who, in their 2005 Article 5 reports, treated navigation as a water use not as a water service. It is also consistent with Article 9(4), which indicates that Member States shall not be in breach of the Directive if they decide not to apply water pricing and cost recovery for a given water-use activity, as long as

i) this does not compromise the purposes and the achievement of the objectives of the Directive [eg. it does not prevent measures being implemented], and

ii) the associated reasons are reported in the river basin management plans. The Task Group believes that any measures needed to address impacts can be identified and delivered without recourse to treating navigation as a water service. Both the requirement to ensure improvements in water status and the need to guard against deterioration can be achieved by including any necessary measures in the programmes of measures required by Article 11(1). There is, therefore, no reason to expect that either the purposes or the

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objectives of the Directive would be compromised by continuing to consider navigation as a water use. The advice on the Europa website (op.cit.1) further suggests that each user must bear the cost of consuming water: to promote efficient water use, water prices should be ‘directly linked to the amount of water consumed and/or pollution produced’. The concept of efficiency of water use is not really appropriate to (typically non-consumptive) navigation uses and there are rarely any significant environmental or resource costs to recover. ‘Water pricing’ and ‘cost recovery’ are difficult concepts to apply across the navigation sector, not only for the aforementioned reasons, but also because international treaties such as the Rhine Convention and the Belgrade Convention (Danube) establish the right to free navigation for vessels of all nations. For maritime navigation, the ‘right of innocent passage’ is similarly enshrined in the UN Convention on the Law of the Sea. Overall, therefore, it does not appear to the WFD Navigation Task Group that considering navigation as a water service will assist in achieving the purpose of Article 9. Conclusion: the WFD Navigation Task Group position The Navigation Task Group supports the position of the majority of Member States in defining navigation and its associated infrastructure as a water use in line with Article 2(39) of the Water Framework Directive, but not as a water service as defined in Article 2(38), and requests that the Commission provides clarification to this effect. Notes 1 the WFD Navigation Task Group comprises a ‘thematic cluster’ of European navigation-related organisations which provides the navigation sector’s contribution to the WFD Common Implementation Strategy (CIS). The Task Group comprises the following professional bodies, trade associations and other stakeholders concerned with ports, commercial and leisure navigation and dredging: Central Dredging Association; European Barge Union; European Boating Association; European Community Shipowners’ Associations; European Dredging Association; European Federation of Inland Ports; European Sea Ports Organisation ; EU Recreational Marine Industries Group ; PIANC; and Inland Navigation Europe. Central Commission for Navigation on the Rhine, the Danube Commission and the International Sava River Basin Commission are also invited to attend our meetings as observers. 2 see http://europa.eu/scadplus/leg/en/lvb/l28112.htm 3 CIS WATECO Guidance (2003): Economics and the Environment - The Implementation Challenge of the Water Framework Directive

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Appendix 2……………………………………………Correspondence from W Dekker on Item 12a

Effects of Water Framework Directive Implementation. Last December our Ministry of Transport informed us that the European Commission had evaluated our water basin management plans against the goals set for the Water Framework Directive. One of the comments addressed the apparent omission to charge for water usage in the form of using waterways. This is not part of our national approach and for commercial usage (barges) there is an international agreement in the "Manheim Act" which stands for free and unrestricted use of the river Rhine and associated basins. Apparently the European Commission approach is to see this specific use as a "water service" which is to be charged. At the Same time I was made to understand that Germany is in a very similar situation albeit that the German Government was already invited to appear in the EU court of justice. Unfortunately the relevant documentation is on my computer which is non- functional at this moment. I do not know if Dieter is able to share any light on this subject. My worry is that this initiative might lead to an increase in cost for boating on inland waterways or worse lead to a form of taxation. I suggest a quick check with Dieter and see if this item is noteworthy enough for the agenda. Willem Dekker, 19 februari 2013.

Email reply from Dieter Haendel Dear Willem, we got this information about threatening fees for using waters during our last meeting in Bodrum. Please take note of item 16b in the Bodrum minutes. While EBA has not taken a decision in Bodrum I mentioned this problem in my German report about our Bodrum meeting (item "Umweltschutz") to enforce a discussion in Germany. My report has been published in the German boater magazine Wassersport 2/2013, but there is no reaction until today. For next week the 27th I got an invitation to a European sport evening in Brussels organised by German Olympic Sport Association to contact some MEP with interest in water sport. I hope that this event can be a starting point for more information or influence. We shall continue our discussion under item 12a in Palma. Best regards, Dieter.

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Appendix 3 ……………..Update on water services from Dieter Haendel

Navigation as a water use vs. water service

Updated status 2013-April

In a press release from 31th May 2012 EU Commission informed that they have accused Germany violating the principle of cost recovery of water services in case of using waters for navigation and investigate the same matter in 7 other member states (Austria, Belgium Region Flanders, Denmark, Finland, Hungary, Netherland, Sweden) to bring it also to the European Court of Justice. Meanwhile Ireland has accepted EU Commission´s position and promised to change its national law.

EU Commission demands cost recovery in a wide extension of Article 9 WFD which German government only accepts for drink water supply and treatment and discharge of waste water. As a result of bilateral contact from German government to EU Commission the Commission explained commercial shipping on dammed rivers as a typical water use. And recreational boating which has not been causal for river damming must not be charged for cost recovery on this matter. But this is only a political and not a legal interpretation and it is not a definitely basis for recreational boating free of charge from ecological cost. The Commission means in principle navigation on heavy modified bodies must pay for this modification. This Commission´s opinion can also hit recreational boating in other European countries, especially in France.

DSV and DMYV try to get influence on political EU decisions by contacting EU Office of EOC to arrange that navigation for sportive purposes including recreational boating must be generally free of charge for WFD water use.

EBA should decide how to deal with this problem.

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