I. SUMMARY OF GROUNDS

I. The grounds of this application can be summarised as follows:
a) Territorial Scope

II. The Habitats Directive applies to the Continental Shelf (para 46-47).

III. The Regulations implementing the Directive wrongly limit the scope of the government's Directive obligations to the territorial waters of the UK. The government is bound by the Directive itself (para 48).
b) Stages of a licence to be treated as one.

IV. For the purposes of the Habitats Directive, exploration for and production of petroleum are to be treated as a single project (para 49-59).

V. Alternatively, the exploration and production stages of a licence have to be considered together for the purposes of considering environmental effects under article 6(3) of the Directive (para 60).
c) Lophelia Pertusa

VI. Because the government failed to apply the Directive to waters beyond its territorial waters, it failed to consider habitat types and species beyond those waters and thereby fettered its discretion in that it deprived itself of the opportunity of considering whether or not areas of Lophelia or reefs formed from it should fall within any list of candidate Special Areas of Conservation ("SAC"s) sent to the European Commission (para 61-65).

VII. Had the UK government considered the whole area covered by the Directive, it is likely that it would have included sites containing Lophelia in a candidate list (para 66)

VIII. Therefore, in granting the licences the UK government failed to have regard to a relevant consideration namely that sites which should or could have been on a candidate list were in or close to the tranches which were under consideration for licence (para 67).

IX. Had the government taken account of the above, it could not reasonably have granted the licences without first conducting an assessment under article 6(3) because:

A. It is government policy to treat candidate sites as classified SACs (para 69-70) .
B. The provisions of art 6(3) apply to SACs.
C. The SOS would therefore, in accordance with policy, have had to consider whether the licensed activities would be likely to have a significant effect on the sites containing Lophelia (para 71(a)).
D. Had the SOS considered this, looking at the licence as a whole, s/he was at least likely to conclude on the evidence that the activities were likely to have such an effect, or could not reasonably have concluded otherwise (para 71(b)).
E. Therefore, the SOS would have been bound to conduct an assessment under article 6(3) and take appropriate action thereafter (para 71(c)).
F. The SOS has not conducted such an assessment (para 71(d).
G. The proposal to conduct an environmental study prior to the production stage is not sufficient (para 72-76).

X. Therefore, by failing to take account of the application of the Directive to the licensed tranches, the SOS failed to take account of a relevant consideration (para 77)
d) St Kilda

XI. St Kilda is a designated Special Protection Area ("SPA") (para 79).

XII. Therefore the provisions of Art 6 Habitats Directive apply for the purposes of protection of the birds in respect of which the site was designated, by virtue of article 7 of the Directive.

XIII. St Kilda is also a candidate SAC listed by UK government, by reason of its marine habitats (para 81).

XIV. Government policy is that the regulations implementing the Directive should apply to candidate sites as much as to designated sites.

XV. The courts will enforce government policy unless there is reason to depart from it (para 83).

XVI. Therefore, the provisions of the regulations ( and the Directive) should have been applied to any consideration of licensed activities that might affect the marine habitats (para 85).

XVII. The SOS is in breach of Directive/Regulations because:

A. The SOS failed to consider whether the licensed activities would be likely to have a significant effect on the St Kilda as a SPA or a candidate SAC (para 87-88).
B. Had the SOS considered this, looking at the licence as a whole, s/he was likely on the evidence to find that the activities were likely to have such an effect, or could not reasonably have concluded otherwise (para 89).
C. Therefore, the SOS would have been bound to conduct an assessment under article 6(3) and take appropriate action thereafter (para 90).
D. The SOS has not conducted such an assessment (para 91-94).
E. The proposal to conduct an environmental study prior to the production stage is not sufficient (para 95).

XVIII. Therefore, the SOS decision to grant licences is unlawful because (para 96):

A. In relation to St Kilda as a designated SPA s/he is in breach of the Directive and the Regulations.
B. In relation to St Kilda as a candidate SAC, s/he is in breach of government policy and has given no good reason for departing from the policy.
C. The decision has been taken on a fundamental error of law, namely that the exploration stage of the licences constitutes a separate project from the production stage.

II. LOCUS

XIX. The Applicant is the corporate identity of Greenpeace UK, the UK national office of Greenpeace International (incorporated in the Netherlands as Stichting Greenpeace Council). It is a well known campaigning body and has as its prime object the protection of the natural environment. Greenpeace International has been accredited with consultative status with the United Nations Economic and Social Council and the UN Conference on Environment and Development. Greenpeace also has observer status or the right to attend meetings of very many bodies set up under international conventions, including:

• the 1974 Paris Convention for the Prevention of Marine Pollution from Land Based Sources (PARCOM)
• the 1972 Convention on the Protection of the Marine Environment and from Pollution by Dumping Waste and other Matter (London Dumping Convention)
• OSPAR Convention 1992 for the Protection of the Marine Environment of the North East Atlantic.

XX. In R v. Inspectorate of Pollution and another, ex parte Greenpeace Ltd (No.2) [1994] 4 All ER 329, Otton J held that Greenpeace Ltd had a sufficient interest in a matter concerning a nuclear fuel reprocessing plant and the levels of radioactive discharge from the site of the plant, to apply for judicial review of an Inspectorate decision concerning the plant. The court had regard to the fact that the applicant was an entirely responsible and respected body with a genuine interest in the issues raised, that it had 2500 supporters in the area where the plant was situated, who might or might not otherwise have an effective means of bringing their concerns before the court if the applicant were denied locus standi, that the primary relief sought was an order of certiorari and not mandamus, and that the applicant had been actively involved in the consultation process relating to the plant.

XXI. The Divisional Court in R v. Secretary of State for Foreign Affairs, ex parte World Development Movement Ltd. [1995] 1 All ER 611, extended this principle by holding that WDM had locus standi to apply for judicial review of a decision by the Foreign Secretary to allow funding for the Pergau Dam Project. No individual member or supporter of WDM could claim to be potentially adversely affected by the decision being challenged. Most or all of the potential beneficiaries resided outside of the jurisdiction. The basis of the Court's reasoning was that Parliament gave specific and confined powers to the Secretary of State, that such powers could be abused, and, because no individual could be identified who had a sufficient interest, if WDM did not have standing, the Secretary of State's decision would go unchallenged even if it was unlawful.

Applying the above principles, it is clear that the Applicant in the present proceedings has locus standi. In particular, in the present case the decision in issue involves activities to take place in the Atlantic Ocean, where no individual lives and in respect of which no individual can claim to be directly adversely affected by the decision in question. The purpose of Greenpeace making this application is to protect the marine environment and in particular corals and wild birds. There is no other individual or body which could more appropriately make such a challenge.

III. BACKGROUND

a) Licensing

II. This application concerns the granting of licences by the UK Government, through the Department of Trade and Industry ("DTI"), to a variety of oil companies in order to search and bore for petroleum in the Atlantic Regulation, the majority being West of Shetland, under the powers contained in the Petroleum Production Act 1934 and Regulations made thereunder.

III. The licences in question were awarded by the DTI on 7 April 1997. The licences were awarded in respect of 25 tranches, covering a total of 114 blocks. The meaning of tranches and blocks is set out in the 1988 and 1996 Regulations, the relevant parts of which are summarised in paragraphs 38-42 below. Greenpeace had applied for production licences on 25 March 1997 in respect of all tranches offered, but the application was rejected by the Secretary of State on 7 April 1997.

IV. An oil and gas production licence is granted for a series of terms or stages. It is to be distinguished from an exploration licence (see Regulation 4, 8(2)(b) and Schedule 5 of the Petroleum (Production)(Seaward Areas) Regulations 1988). The production licences involve a two stage process. The first stage of a production licence involves "exploration". This is effectively a process of appraisal of the blocks in question for the production of oil. It involves conducting seismic testing of the seabed and requires the drilling of at least one well. The second stage involves extraction of petroleum.

V. The tranches in respect of which licences have been awarded have located in or near them a variety of natural habitats and species of wild fauna and flora whose preservation and protection, including the improvement of the quality of their environment, is threatened or in respect of which exhibit particular features such that they are of particular interest from a conservation point of view.

VI. It is the Applicant's case that all activities associated with these licences (from exploration and appraisal to production) are likely to have an effect on such habitats and risk endangering those species. The extent of the risk of harm, in terms of the likelihood of it occurring or the degree of harm that would result, is at present unknown but significant.
b) Sustainable development

VII. The UK government has determined to make sustainable development the touchstone of its policies and has stated that it will take account of the following principles:

• Decisions should be based on the best possible scientific information and analysis of risks.
• Where there is uncertainty and potentially serious risks exist, precautionary action may be necessary.
• Ecological impact must be considered, particularly where resources are non-renewable or effects may be irreversible.
• Cost implications should be brought home directly to the people responsible - the "polluter pays" principle."

VIII. The precautionary principle has been described by the Government as:

"Where there are significant risks of damage to the environment, the Government will be prepared to take precautionary action to limit the use of potentially dangerous materials or the spread of potentially dangerous pollutants, even where scientific knowledge is not conclusive, if the balance of likely costs and benefits justifies it."

This is consistent with the precautionary principle as reflected inter alia in the 1992 OSPAR Convention (article 2(2)(a)) and the Biodiversity Convention (Preamble).

IX. These principles provide the background against which the propositions set out herein should be tested.
c) The Applicant's concerns

X. Greenpeace is concerned in particular about the following natural habitats and species in the following sites and regions:

A. Cold water corals in the Atlantic biogeographical region

1. Lophelia pertusa is a form of deep-water coral which can develop into a reef. It is to be found in large quantities in various parts of the UK maritime waters off the west coast, including territorial waters and the continental shelf beyond territorial waters, and including in or near some of the areas which have been licensed in the 17th round. The North East Atlantic (where the licensed areas are located) may be regarded as of global significance for the species.

2. L. pertusa provides a habitat for over 800 species and has important functions in contributing to the biodiversity of the area. It is comparable to shallow tropical reefs in terms of the diversity of its various associated taxanomic groups.

B. Wild birds on St Kilda

1. Seven of the licensed tranches, namely those numbered 19, 21, 22, 30, 36, 37 and 38 are close to the island of St Kilda. St Kilda is an area of considerable biodiversity. It is a sanctuary for rare birds, and in September 1992 it was designated a Special Protection Area ("SPA") under the Wild Birds Directive (79/409/EEC). St Kilda was declared a national nature reserve and also notified as a Site of Special Scientific Interest ("SSSI") under section 28 of the Wildlife and Countryside Act 1981. It is also designated under a number of other special protection measures, for example it is a World Heritage Site.

C. Marine habitat surrounding St Kilda

1. St Kilda hosts a wide range of marine habitats and species. These include reefs, vegetated sea cliffs, and submerged or partly submerged sea caves. The reefs are nationally rare or scarce. The sea cliffs and caves are unique, at least in the British Isles, and are of considerable scientific and ecological interest.

2. Because of these features, the UK government has included St Kilda on its list of proposed sites of community importance within the Habitats Directive, which was sent to the European Commission in October 1996.

XI. The risks to the above species and habitats from the licensed activities, as shown by experts in the field, include the following:

A. Lophelia pertusa

• Oil companies are unlikely to have accurate knowledge of Lophelia's distribution and therefore will not be able to avoid damaging it.
• Drill cuttings can cause extensive damage to Lophelia
• Sedimentation from drill cuttings can kill Lophelia or decrease its growth rate.
• Oil contamination can cause a decrease in fecundity of lophelia and can cause a complete reproductive failure.
• Partially damaged Lophelia will make poor recovery.
• The distribution of the pollutants from the oil exploration and production activities is likely to be widespread and therefore more likely to affect colonies of Lophelia even where they are not based in a licensed area.

B. Wild birds

• Seismic testing has a direct effect on fish distribution and supply, which can disrupt the food sources of wild birds. There is the possibility of other direct impacts of seismic testing upon birds.
• There is a risk of oil spillage arising from exploration, production and tanker transport. In addition, a certain amount of deliberate oil discharge takes place from shipping. The birds of St Kilda are categorised by the JNCC as being very highly or highly vulnerable to oil pollution for 8 months of the year.
• Oil spillage could result in lethal or sub-lethal effects on the wild birds.
• A range of factors mean that small spills (of which there is a higher risk than large spills) are capable of killing as many seabirds as the larger spills.

C. Marine habitat surrounding St Kilda

• There is a risk that drilling waste could cause long-term chronic or sub-lethal impacts on the island's benthos. This includes the reefs. Further research is required but, at the present stage, this risk cannot be dismissed.
• The inter-tidal and sub-tidal benthos (including the reefs) are vulnerable to oil spill. There is a risk of extinction of certain rare species which cannot be discounted. Further research is needed.

Because of the concerns that Greenpeace has about the above activities, it wrote to the then President of the Board of Trade (the "SOS") on 25 April 1997 and again (to the current SOS) on 7 May and 10 June. A substantive response was sent by the SOS on 18 June 1997.