On Thursday 27 July DEFRA opened the application process for responsible bodies (RB), the third parties who will be monitoring and enforcing conservation covenants (CCs) on the land. They followed this with an explanatory webinar on Wednesday 2 August. After years of anticipation, all the pieces for CCs are finally in place, although it will be some months before we see live specimens in the wild - DEFRA needs to approve an RB (a process that will take up 12 weeks) and then parties need to agree the CC.
I have written previously about CCs as a potential tool for natural capital investment, but for those who are not familiar, CCs are a new legal tool where a landowner voluntarily contracts with an RB to bind their land either indefinitely or a limited period for a "conservation purpose". The aim is to make conservation more attractive and straightforward.
The DEFRA webinar raised some interesting points. Nothing revolutionary compared to the guidance and policy announcements that have gone before, but nevertheless useful emphasis and clarity.
- Tim Andrews, DEFRA lead for CCs, underlined how CCs are designed to be versatile and DEFRA was not prescriptive about how they should be used. They can be deployed to deliver Biodiversity Net Gain, for pure altruism, to give a cheaper alternative to outright buying the land or to access green market services. This will be welcomed by those like me who believe CCs should be a flexible and wide ranging tool.
- DEFRA confirmed that it has no issue with RBs making money from enforcing CCs if they wish. The other two cited reasons to become an RB were to raise an organisation’s profile and/or deliver for the public good.
- The government will not publish a standard CC, citing the wide range of different uses to which CCs can be put. The private sector is however already building its own precedents - the Practical Law CC is just one example.
- RBs have no specific or new enforcement powers. Indeed, Tim Andrews was hesitant in using the word "enforcement" at all, preferring "monitoring". Disputes must be settled by the courts in the ordinary way.
- Graham Kerr of Natural England confirmed that Natural England (NE) will apply to become an RB. But NE will be "pretty cautious", however, in the early stages and look to take on just a handful of CCs initially.
- The RB application process is simultaneously quite simple and quite rigorous. The form is just 10 pages long and asks for sensible information, including evidence that your organisation is based in the UK, financially secure, experienced in conservation, adequately resourced, properly governed, etc. However, the form itself and the DEFRA tone suggests a high bar only quite sophisticated and well established organisations will be able to meet. CCs are long term (perhaps even indefinite) commitments. While they will bind successors in title to the land, there is no obvious RB successor and DEFRA has laid out quite intricate procedures for just this scenario. There is understandable concern, therefore, to make sure that approved RBs are as durable and robust as possible.
I will watch carefully the uptake (or not) of CCs in the coming years and months to see how viable and practical they are in reality. The main limiting factor in the short term at least is likely to be a shortage of RBs. There is clearly considerable interest though. Towards 500 people attended the webinar, mainly from local authorities wondering whether to set up as RBs. For those (like me) with an eye on nascent green markets, the real test will be whether institutional investors decide CCs are a good way of structuring their investments and can find RBs they are prepared to do business with.