The Environmental Impact Assessment Process and Hong Kong’s Third Runway

Judicial review proceedings against the approval of the Airport Authority Hong Kong’s (“AAHK”) Environmental Impact Assessment (“EIA”) Report and the grant of an environmental permit (“Permit”) for the proposed third-runway system at the Hong Kong International Airport (“HKIA”) were dismissed with costs on 22 December 2016 (HCAL 21 & 22/2015, 22 December 2016).

This is a crucial infrastructure project valued at HK$141.5 billion which aims to enhance Hong Kong’s standing as an aviation hub in the region and its economy. 

The Court dismissed all of the challenges, finding that AAHK’s EIA Report met all legal requirements.

The EIA Process

The EIA Ordinance (Cap. 499) (“Ordinance”) prescribes a process for the proponent of a designated project to obtain a Permit without which construction of a designated project may not commence. An airport, including the proposed third-runway system, is such a “designated project”.

The EIA process begins with the project proponent applying to the Director of Environmental Protection (“Director”) for a Study Brief, by submitting, inter alia, a project profile that complies with the Technical Memorandum. The Technical Memorandum is generally applicable to all designated projects, whereas the Study Brief is project-specific.

Within 14 days, the Director is empowered to ask the applicant to give further information concerning the project profile or notify the applicant of any defects in the application. Thereafter, the Director is obliged to issue to the applicant an EIA Study Brief within 45 days. 

The project proponent then completes an EIA report in accordance with the Study Brief and the Technical Memorandum and submits it to the Director, who has 60 days to decide whether the EIA report meets the requirements of the EIA Study Brief and the Technical Memorandum. Following a positive decision, the EIA report will be advertised, published and made available for public inspection. Meanwhile, the Advisory Council on the Environment has 60 days to give their comments on the EIA report to the Director.

The EIA report then enters the critical stage of approval: the Director has 30 days to “approve, approve with conditions or reject” the EIA report. After the EIA report has been approved, it will be placed on the EIA register. Following this, and before the project proponent commences works in relation to a designated project, the proponent should refer to the EIA report on the register and apply to the Director for a Permit.

The Director has 30 days to reject the Permit application or approve it with conditions. The project proponent may not proceed to construct and operate the designated project without the Permit.

The Third-Runway System Judicial Review Proceedings: Four Key Issues

The same EIA process applied to the third-runway system. The Director issued a Study Brief to AAHK, the project proponent, on 28 May 2012 pursuant to which the EIA Report was prepared. Eventually, the EIA Report was approved and the Permit granted on 7 November 2014.

Bearing in mind the EIA process described above, four key legal issues were raised in the third-runway system judicial review proceedings: 

  1. Whether “strict compliance” with the Technical Memorandum and Study Brief was required in every case.
  2. Whether the so-called Tameside duty is applicable to the EIA process.
  3. Whether the Technical Memorandum and Study Brief in this case required AAHK’s EIA Report to state an assumption that the immediate airspace in the Pearl River Delta area (“PRD Airspace”) would be available for use by the projected air traffic movements into or out of Hong Kong (the “PRD Airspace Assumption”).
  4. Whether the Technical Memorandum and Study Brief mandated consideration and provision, in the EIA Report, of off-site compensation measures during the construction phase of the third-runway system in relation to the ecological impact assessment concerning Chinese white dolphins (“Dolphins”).

These issues are examined respectively below.

Issue 1: “Strict Compliance” with the Technical Memorandum and Study Brief

On this issue, the Court rejected the argument that any deviation or non-compliance from or with the Technical Memorandum and Study Brief, however minor, insignificant or inconsequential, would result in the invalidation of the Director’s approval of the EIA report. The correct position was set out in Shiu Wing Steel Ltd v Director of Environmental Protection & Airport Authority (No. 2) (Third Party) (2006) 9 HKCFAR 478 that:

  • if the EIA report deviates from or does not comply with the Technical Memorandum and Study Brief, the Director should advise the project proponent of the reasons why the EIA report is unacceptable; and 
  • if the Director approved an EIA report not complying literally or fully with the Technical Memorandum and Study Brief, whether the Director’s decision was made without jurisdiction or unlawfully would depend on the circumstances of the case, including the nature and seriousness of the non-compliance. In particular, whether the non-compliance or breach is purely technical and has no material impact on the decision or on the environment.

Issue 2: Tameside Duty

The so-called Tameside duty, derived from the House of Lords’ decision in Secretary of State for Education and Science v Tameside MBC [1977] AC 1014, requires every decision-maker (here, the Director) “to take reasonable steps to equip himself with the necessary relevant information to enable himself to make an informed decision”. In these judicial review proceedings, an Applicant contended that a Tameside duty exists alongside the statutory duties imposed on the Director. 

The Court rejected this argument, holding that the express obligations imposed by the Ordinance were already highly detailed and prescriptive, and should be regarded as a sufficient discharge of the Director’s duties in relation to the EIA process. The court should not impose additional obligations on the Director.

However, the Court did not completely close the door on potential scope for further duties, whether in terms of Tameside or the duty to inquire/consult. But in any particular case, the Court should only strike down a decision for any such failure “if no reasonable [decision-maker] possessed of that material could suppose that the inquiries they had made were sufficient”.

Issue 3: PRD Airspace Assumption

One of the judicial review proceedings grounds challenged the assumptions on which the EIA Report was based, claiming that: 

  • AAHK’s EIA Report had to disclose the assumptions and their limitations, and the findings and calculations employed in arriving at the environmental impacts of capacity increase at the HKIA; 
  • the assumption that the PRD Airspace would be available for use by the projected air traffic movements into or out of Hong Kong was wrong; and
  • accordingly assumptions adopted by, and upon which the EIA Report was based, were incorrect.

The Court rejected this line of argument, holding that the EIA Report’s noise impact assessment study is concerned with finding out what may be the third-runway system’s possible or likely noise impact, and the assumptions on which this is based are not required to be justified in the EIA Report.

Issue 4: The Dolphins

Finally, on the Dolphins issue, the Applicant complained that the EIA Report failed to consider the possibility of off-site mitigation – specifically, compensation – measures during the third-runway system’s construction phase. 

The Court also rejected this complaint, holding that the general policy for mitigating impacts on important habitats and wildlife, in order of priority, are avoidance, minimising, and compensation. In this case, the EIA Report already identifies and recommends a series of on-site mitigation measures during the third-runway system’s construction phase, which are designed to avoid and/or minimise the adverse ecological impacts caused by the third-runway system. Further, though off-site compensation measures during the construction phase had been considered but rejected because of impracticability, nothing in the Technical Memorandum or Study Brief requires the EIA Report to specifically “consider” or “provide” off-site compensation measures during the third-runway system’s construction phase.

Practical Points

Chow J’s written judgment concludes with a strong reminder of the way in which Form 86 should be drafted by referring to a statement by Litton PJ in Lau Kong Yong v Director of Immigration (1999) 2 HKCFAR 300, that “what is required, in a proper Form 86, is to state the grounds of judicial review clearly, succinctly and in a few numbered paragraphs”. Chow J closes his judgment with the threat of Court actions to enforce compliance with these basic requirements of the Form 86.

Practitioners should take heed of these wise words.

Jurisdictions: 

Hogan Lovells, Partner 

As head of the litigation practice of Hogan Lovells in Hong Kong, Mr. Leung has over 25 years of experience dealing in a broad range of dispute work, including corporate commercial, financial services and regulatory, judicial review, environmental, product liability, cross-border contentious insolvency, fraud and asset recovery, and employment. He is widely recognised and named in a number of legal directories as an outstanding litigator.

Hogan Lovells, Senior Associate

Depth and versatility summarise Mr. Wong’s experience as a senior associate in Hogan Lovells’ litigation team. Breach of fiduciary and director’s duties, audit negligence, commercial and infrastructure judicial review applications, defamation, and company litigation are just some of the areas of commercial litigation work he handles. In addition to his commercial litigation work, Mr. Wong also has particular interests and experience in international legal affairs and advocacy. He has worked as a part-time lecturer (non-clinical) at the University of Hong Kong Law Faculty, where he coached top students for an international mooting competition on the law of the World Trade Organization.