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A number of important issues should be addressed in the procurement of the construction phase.
Pre-qualification of contractors
Increasingly, development pre-qualification requires a degree of environmental competence for many construction projects. In relation to previously developed land these issues are of central importance to the successful delivery and impact directly upon the economics of a scheme. Contractors are also required to have a sound understanding of the health and safety issues under the CDM Regulations and other related regulations.
Ensure verification procedures are in place
With remediation activities, and depending upon the nature of the project, verification should be undertaken to identify:
Each site is unique. The combination of the remediation processes employed, the performance criteria the processes are designed to achieve, site characteristics, such as geology, hydrogeology site history and current usage all contribute to a specific situation. Verification processes need to be tailored to account for the site-specific nature of the project.
Secure construction insurance
The purpose of consultants’ and contractors’ professional indemnity insurance is often widely misunderstood by clients. It is not a benefit to the client. It is a defence mechanism, which will often be used by the insured and insurer to resist a claim against them. The onus is on clients to prove negligence against the consultant or contractor, and that can be a tortuous route with no guarantee of recovery. Even when negligence is ultimately proven, it can take years to gain compensation through the courts, with all the associated financial implications that can ensue.
Many consultants’ and contractors’ professional indemnity policies carry limitations, restrictions and exclusions that may prove unacceptable. Depending upon the policy, if the consultant or contractor becomes insolvent, professional indemnity insurance may become void.
The type of insurance needed would reflect how the contractor is to be employed and on what terms. For example, it is not uncommon for contractors to be appointed to carry out a full design-and-build package of works, whereby the contractor may not be insured because of professional indemnity insurance restrictions. Pollution exclusion clauses may apply.
Contractors involved with remediation often carry ineffective insurance protection. Limits of indemnity may be inadequate and exclusions for gradual pollution often apply. Such risk is often heightened during remediation. For example, a site may be contaminated yet not be classed as “contaminated land” under Part IIA. The remediation activities can themselves create a linkage that causes a problem – for example, by making a pathway for the contamination to migrate to a sensitive receptor.
Unless a view is taken on the overall interaction of construction, similar problems can occur on a remediated site, when construction contractors are involved. For example, groundwork or foundation activities, such as piling, can create pathways for the migration of contaminants. Care is needed to establish with construction contractors whether they have gradual pollution exclusions within their public liability policies. If so, other risk management measures may have to be considered.
4.4 Ensure that design issues are incorporated in the construction phase
The key issues developed through the investigation and design phases need to be adequately embraced in documents supporting the procurement process. How and to what degree the elements are incorporated will depend upon the selected form of contract. Matters to be considered include:
It is also important to ensure planning conditions are reflected in the design stages.
Site co-ordination issues
Examples of site co-ordinating factors that may need to be incorporated in procurement documents are:
Other contractor’s obligations
Amongst the potential obligations that may be required of contractors are:
Account for nature conservation
In preparing for construction procurement, clients need to consider:
Accommodate needs of specialist contractors
Site remediation may involve various specialist activities. Specialist contractors providing specific services, eg groundwater treatment may have to be included within the contract team to work in conjunction with the main contractor.
Depending upon the manner of contracting, it may be appropriate to ask main contractors what experience they possess in working alongside specialist contractors such as companies offering bio-remediation or in situ remediation technologies or experienced groundwork contractors experienced in contaminated spoil haulage and disposal.
Enquiries should also be made with prospective contracting parties at the procurement stage to establish whether there are any grounds that preclude them working together.
Waste management issues
The implementation of the Landfill Directive and the introduction of pollution prevention control permits for landfills and other waste management operations are leading to more stringent standards and a possible increase in the disposal costs of wastes from projects involving previously developed land. Some of the issues for waste management are set out below.
The Environment Agency published guidance in 2001 on the relationship between waste management licensing and remediation. Clients should seek advice from their consultants and environmental lawyers on issues arising from the guidance.
The temporary use of mobile plant for such purposes, that is for less than 28 days, will not generally require planning consent, but long-term use should be part of planning obtained for the development. A mobile plant licence will be required from the relevant environmental agency for mobile waste management or treatment operations.
It is common for concrete and other demolition material from former buildings or hard standing to be reused on or off the development site. The introduction of the aggregates tax has created an incentive for clients to create secondary aggregate from any available materials.
If mobile plant is being used for the crushing operations, the plant should be authorised as a Part B process under Part I of the Environmental Protection Act 1990 in the name of the operator and by reference to his principal place of business. A permit under the Pollution Prevention and Control (England and Wales) Regulations 2000 became a requirement from 1 April 2002 for new processes, and existing processes are deemed to have applied on that date. The permitting authority is the local authority.
Provision should be made in documents for the generation, retention and access to proper records of all waste movements on and off the site. Duty of care transfer notes will be needed for non-special wastes under the Environmental Protection (Duty of Care) Regulations 1991 and combined special waste consignment notes for the movement of special wastes so as to comply with the Special Waste Regulations 1996 as amended.
All wastes must be carried by a carrier registered as a waste carrier under the Control of Pollution (Amendment) Act 1989 and the Controlled Waste (Registration of Carriers and Seizure of Vehicles) Regulations 1991. That such registrations are in place should be cross-checked by obtaining details from the environmental agencies. Regulations are being introduced which require producers of special waste to be registered with the appropriate environmental agency.
Key issues at this stage are:
The law provides for exemption from landfill tax for certain wastes arising from the reclamation of contaminated land. Sections 43a and 43b of the Finance Act 1996 as inserted by Landfill Tax Contaminated Land (Order 1996), SI 1996 (1529) Under Landfill Tax Guidance Note 2 (LFT 2), reclamation will qualify for exemption if it falls within one of the following categories (provided that it also meets certain conditions):
(a) It is, or is to be, carried out with the objective of facilities and development, conservation, the provision of a public path or other amenity, or the use of a landfill agricultural or forestry.
(b) In the case of others than within paragraph (a) above, it is, or is to be, carried out with the object of reducing or removing the potential pollutants to cause harm.
Pollutants do not necessarily need to be cleared from the land to qualify for the exemption, but the cause of the pollution must have ceased. In addition, the land must not be subject to a works or a remediation notice served under the Water Resources Act 1991 (49) or Part IIA of the Environmental Protection Act 1990 respectively.
Other exemptions relate to dredging and mining and quarrying wastes, and clients should take specialist advice as to whether these are applicable.
The parties should clarify who is responsible for obtaining discharge consents or abstraction licences that may be required for the development. In particular, there is often misunderstanding over the disposal of water from the works into local watercourses. Draining over grassed or wooded areas and then into a watercourse is only acceptable if formally agreed with the Environment Agency. The Environment Agency is concerned at the impact of suspended solids on watercourses and views the construction industry as a major polluter of water. Formal discharge arrangements are likely to be required.
Health and safety provisions need to be integrated for the particular remediation processes applied to the site.
Developing the site log. Much of the activity at this procurement stage will be supplying information to prospective contractors.