Financial guidelines for supporting the management of Sites of Special Scientific Interest Natura 2000 sites
Section 3: Entitlement to SNH compensatory management agreements
3.1 The Scottish Ministers believe that, for the most part, the favourable conservation management of SSSIs should be achieved through voluntary action, supported by the availability of appropriate financial assistance and incentives. A brief guide to such assistance has been provided in Section 2 of these Guidelines.
3.2 There may, however, be occasions when SNH is unable to grant consent for operations which would adversely affect an SSSI, or where the Scottish Ministers have to use their powers, in the public interest, to protect an SSSI or Natura site from damage or deterioration. On these occasions, it may be appropriate for the land manager to receive compensation through an SNH management agreement.
3.3 It will be possible for SNH to combine compensatory and voluntary elements within the same management agreement, as necessary. Depending on the circumstances, the land which is relevant in relation to the compensatory element of a management agreement may be land within an SSSI; land within a Natura site; or land which is affected because of the need to protect an SSSI or Natura site. These different scenarios are explained below. SNH has discretion to deal appropriately with exceptional circumstances, including situations in which account should properly be taken of impacts on other land or on a business as a whole.
3.4 It should be noted that this section does not apply to situations in which public authorities other than SNH refuse (or modify or withdraw or otherwise restrict) consent in respect of operations which would be likely to damage the natural features of an SSSI or Natura site.
Situations in which compensation may be payable
? Operations Requiring Consent
3.5 A land manager may be entitled to compensation through an SNH management agreement in situations where section 16(9) of the 2004 Act applies - that is, where consent to an operation requiring consent (an "ORC") is refused, revoked, modified or made subject to conditions. In determining whether or not to offer an agreement under such circumstances, SNH is obliged by the Act to have regard to the guidance contained in these Financial Guidelines. Compensatory agreements of this kind are relevant only for SSSI land which is subject to ORCs.
3.6 The expectation of the Scottish Ministers is that SNH should offer to enter into an agreement with a land manager where:
SNH has used its powers under the 2004 Act to refuse, revoke or modify consent for an ORC, or where it makes its consent subject to conditions;
and the ORC in question is one which is shown to be part of the established management of the land;
and the refusal, revocation or modification, or the effect of any conditions, impacts on the land manager's activities in such a way that his ability to earn income, by continuing with the established management of the land, is unavoidably reduced.
? Nature Conservation Orders
3.7 The 2004 Act does not make specific provision for compensatory management agreements in connection with the exercise of ministerial powers to make Nature Conservation Orders ("NCOs") under section 23 of the 2004 Act.
3.8 This is because NCOs are unlikely to be used in future to prevent or restrict operations which are part of the established management of SSSI land. In the event that such operations do need to be controlled but are not currently on the ORC list for the SSSI, the preferred method will be for SNH to use its powers, in sections 6 and 7 of the 2004 Act, to add the relevant operation to the list of ORCs for the site and then to grant or refuse consent, or impose conditions, in the normal way. Rights to compensation will then be dealt with in the same way as for other cases involving applications for consent in relation to SSSI land.
3.9 Nonetheless, where a land manager can demonstrate that the making of an NCO covering SSSI land has adversely affected his interests by preventing or restricting the established management of the land, and he has suffered genuine loss as a result, the Scottish Ministers would normally expect SNH to use its discretion and to offer a management agreement on similar terms and conditions as would have applied in the analogous ORC situation set out in paragraphs 3.5 and 3.6 above.
3.10 SNH has similar discretion to offer a compensatory agreement in cases where an NCO applies either a) to land which is within a Natura site (whether or not the land is also an SSSI), or b) to land outwith a protected site. The principles already established above, in paragraph 3.6, will govern any such offer.
? Land Management Orders
3.11 Entitlements to payments may also arise through the exercise of ministerial powers to make Land Management Orders ("LMOs") under sections 29 to 37 of the 2004 Act. This situation is dealt with in more detail in Section 4 of these Guidelines. LMOs can be applied to both SSSI and Natura sites.
Disputes and appeals
3.12 A land manager who is aggrieved by a decision by SNH not to offer an agreement where section 16(9) applies, or by the terms and conditions of such an agreement, may appeal to the Scottish Land Court under the terms of section 18 of the 2004 Act.
3.13 Similarly, where the Scottish Ministers exercise powers to make an LMO, specific provision has been made in the Act to allow for representations and appeals. This provision includes a right of appeal to the Scottish Land Court under section 34.
3.14 No formal rights of appeal have been provided where SNH refuses to enter into a management agreement in connection with an NCO, but representations from any aggrieved party will be dealt with by SNH on a fair and reasonable basis.
3.15 The principles to be applied in resolving disputes are explained in more detail in Section 5 of these Guidelines.
Compensation - Key principles
3.16 In general, the principles governing a land manager's entitlement to compensation are that:
A land manager should be entitled to compensation through an SNH management agreement if he can show that the exercise of SNH's powers (or those of the Scottish Ministers' relating to NCOs) will cause him actual loss because he can no longer do something which is part of the established management of the land.
A land manager should not be entitled to compensation if the exercise of SNH's or the Scottish Ministers' powers prevents him from carrying out a new project which is not part of the established management of the land.
A land manager should not be entitled to compensation if he is refused consent or grant assistance for a project under another consent regime (e.g. if he is refused consent under Environmental Impact Regulations or the Scottish Environment Protection Agency's ("SEPA") discharge control system; or if he is refused SFGS approval or does not receive a grant for a project which would damage an SSSI or Natura site).
A land manager should not be entitled to compensation where any loss arises from either a requirement to comply with, or a failure to comply with: relevant environmental legislation or regulatory regimes; Standards of Good Farming Practice; Cross Compliance requirements; or other rules, requirements or standards of good practice which regulate the extent or conduct of an activity and its impact on the natural environment.
Established management and new projects
3.17 In most cases it will be relatively clear what constitutes a new project and what constitutes part of the established management of the land. But in some cases this may be a matter requiring specialist judgement, which may be informed by evidence provided by bodies such as the Scottish Executive Environment and Rural Affairs Department ("SEERAD"), FCS or other appropriate regulatory bodies. It may also be relevant in such cases to consider specialist advice obtained from other bodies and individuals, such as the Scottish Agricultural College or a suitably qualified professional adviser with extensive experience in a relevant area of practice.
3.18 It is for SNH to obtain appropriate advice, where it considers such advice to be necessary. In the event that a land manager disagrees with the position adopted by SNH, the potential need for further advice or a "second opinion" is something which may be explored within the context of any dispute resolution procedure.
3.19 As a general rule, projects which require an Environmental Impact Assessment ("EIA") under European EIA requirements 14 are likely to be regarded as new projects. Such projects are, in particular, likely to include any which require an EIA under the Environmental Impact Assessment (Forestry) (Scotland) Regulations 1999 15 or the Environmental Impact Assessment (Uncultivated Land and Semi-Natural Areas) (Scotland) Regulations 2002 16. Activities covered by other EIA regulations may also be regarded as new projects 17.
3.20 In judging what is part of the established management of the land and what is a new project, the following principles will be applied:
An activity is part of the established management of the land if it has been part of the actual or habitual pattern of use of that land within the preceding 15 years or is part of the normal rotational pattern of use of the type of land in question. The length of time which is regarded as the normal rotational pattern will vary according to the type of land and the type of crop/land use and 'custom of the country' in that locality;
An activity is part of the established management of the land if it is one which is necessary to maintain the existing use of the land in question. For example, the repair of field drains in accordance with traditional practice, would be considered to be part of the established management of the land if it is carried out in order to maintain the land in its current use, rather than to convert or intensify its use;
Adjustments to scale or intensity of an activity which may include such attributes as grazing pressure or stocking composition are part of established land management if the land manager can establish that in the past 15 years the stocking density and pattern or other activity has been at the level he proposes to attain, and if that level is consistent with the Standards of Good Farming Practice and Cross Compliance requirements which apply to the land in question 18;
In the case of woodland management, activity is much more periodic in its pattern over the life-cycle of the wood or forest. However, most such activity is likely to have been, or currently is, the subject of FCS approval through Woodland Grant Scheme/SFGS contracts incorporating an agreed Plan of Operations or the grant of a felling licence. Consequently, activities which fall within these criteria are, in most cases, likely to be established management for the woodland in question, provided they currently accord with the UK Forestry Standard;
Non-agricultural activities may be part of the established management of the land. For instance, a land manager may be entitled to compensation if the exercise of SNH's or the Scottish Ministers' powers will cause him an actual loss because of a loss in revenue from non-agricultural activities from which he has, within the past 10 years, earned revenue or (where no revenue is earned) from activity which has contributed to the capital value of the property.
An activity, whether agricultural or non-agricultural, will not be treated by SNH as being part of the established management of the land if it has been carried on in breach of relevant rules and regulations or of standards of good practice, or if the historical level of activity, revenue or capital value which is subsequently reduced has benefited from non-compliance with, or non-enforcement of, such requirements.
3.21 Land managers may make a case that exceptional circumstances exist and that a period longer than 15 years should be used in determining what constitutes established management.
3.22 In all cases, a land manager is expected to take reasonable steps to minimise the losses for which he may be compensated, and a failure to do so may affect his entitlement. In particular, a land manager may be required to demonstrate that he had no reasonable alternative way of pursuing the intended activity on his holding before SNH determines whether to enter into a compensatory management agreement.
Special circumstances - Uneconomic management
3.23 In some instances, the established management of the land may in future become uneconomic because of changed market circumstances. Where this occurs the economically rational course of action for the land manager may be to convert from one land use to another, or even to withdraw the land entirely from active management.
3.24 In cases where continuation of the existing land use is essential to maintenance of the special interest of the site, SNH will normally seek to enter into a voluntary management agreement which makes it worthwhile for the land manager to continue to manage the land in a manner consistent with its special interest.
3.25 A land manager who prefers, instead of entering into a voluntary agreement, to change the way in which SSSI land is managed is entitled to do so, but will require to secure consent from SNH (and/or any other relevant regulatory authority) for operations which are likely to damage the site. Where SNH consent is required, SNH will deal with any application for consent in the normal way and may grant consent, withhold consent or give consent subject to conditions.
3.26 SNH is, however, likely to refuse consent for new operations which will have a negative impact on the site, especially where the SSSI is also a Natura site. In the event that consent is refused the land manager will not, in practice, be able to implement the proposed change in land use. It is a criminal offence, under section 19(3) of the 2004 Act, to carry out an ORC without having obtained consent. Neither will the land manager be entitled to compensation, since the new operations will not, by definition, be part of the established management of the land. Compensatory management agreements are only available in circumstances where land managers suffer loss because they are unable to continue with established management practices.
3.27 In view of the above, SNH may, where existing land management practices are no longer economically-viable and alternative solutions do not exist, offer to lease or purchase land in order to ensure that a site continues to be managed in a manner consistent with its nature conservation interest.
3.28 SNH may do so where the established management regime for land within an SSSI is clearly no longer economically-viable and all of the following conditions are satisfied:
a suitable voluntary agreement to support the existing management regime cannot be agreed;
consent to proposed new management operations on the site cannot reasonably be given; and
no realistic, economically-viable, alternative use of the land can be identified which the land manager is willing to implement and which preserves the nature conservation interest of the site.
3.29 The general expectation of the Scottish Ministers in such circumstances is that responsibility for (and ownership of) land should, wherever possible, remain with the land manager rather than being acquired by SNH. A decision to lease or purchase the land should not be taken until other potential options have been properly considered and have been rejected.
3.30 The decision whether SNH should lease or purchase land for which existing management has become non-viable will (unless ordered by a court) be at SNH's discretion. SNH will not however withhold consent for a change of management regime in such exceptional circumstances unless it is reasonably prepared a) to offer an appropriate management agreement and b) if an acceptable agreement proves impossible to conclude, to lease or purchase the land.
3.31 The arrangements covered in paragraphs 3.27 to 3.30 above are not be understood as constituting a compulsory lease or purchase procedure. A land manager is not obliged to accept any such an offer of lease or purchase. The terms of any offer, including any amount payable, are to be negotiated freely between the respective parties.
3.32 Disputes in relation to the lease or purchase of land which can no longer be managed on an economically-viable basis do not fall directly within the jurisdiction conferred on the Scottish Land Court by the 2004 Act. Alternative means of dispute resolution will therefore require to be employed in such circumstances. Dispute resolution issues are also dealt with in Section 5
3.33 The Court does, however, have a potential role to play, by virtue of section 18 of the 2004 Act, in the specific circumstance where a land manager is aggrieved by a refusal of consent (or by the conditions imposed on any consent).
3.34 In such cases, where the land manager can show that SNH's decision will, in effect, render the land within a site incapable of any reasonable beneficial use, it is open to the Scottish Land Court to consider lease or purchase as potential solutions (amongst others) and to dispose of the case accordingly. The flexibility allowed to the Court under section 18 of the 2004 Act means that it may, should it see fit, direct SNH:
to permit the proposed new management regime (by giving ORC consent); or
to alter or remove any conditions imposed in connection with any consent; or
to offer an appropriate management agreement; or
to lease or purchase the land in question on such terms as may be appropriate.
3.35 Where SNH does offer to lease or purchase land within an SSSI, the offer may also include land outwith the site where this is necessary for the effective conservation of the site or where the remaining part of the holding located outside the SSSI would no longer constitute a viable enterprise in its own right.
3.36 In exceptional circumstances, where a voluntary lease or purchase arrangement cannot be agreed between SNH and the land manager, SNH may, as a last resort, use its powers of compulsory purchase under section 39 of the 2004 Act where this is necessary in order to ensure the protection of the nature conservation interest of the site.