Summary and implications
Environmental civil sanctions are an alternative means of enforcement to criminal sanctions (including prosecution), available for use by both the Environment Agency (EA) and Natural England (NE). It is important to note:
- The EA can impose civil sanctions on individuals and companies who commit certain environmental offences. It proposes to start using its new powers from 4 January 2011;
- The sanctions include monetary penalties (fixed and variable), and compliance, restoration and stop notices;
- The regulator can impose these sanctions without going to court.
The new regime is intended to promote an alternative and more proportionate response to environmental law non-compliance. It is intended for use for those who generally have a good compliance record but who have slipped up. Criminal prosecution will be left for only the most serious offenders, serial non-performers or for those unwilling to participate in this regime.
Whilst the new regime is welcome, particularly for its perceived flexibility and proportionality, it remains to be seen if it will be applied consistently.
This briefing will consider the new civil sanctions, the EA’s proposed approach to enforcement and some implications for business.
1. New civil sanctions
The Environmental Civil Sanctions (England) Order 2010, which came into force on 6 April 2010, gives the EA and NE new powers to impose civil sanctions for breaches of certain environmental laws. The EA has recently announced that it will use civil sanctions from 4 January 2011. NE has yet to confirm when it will start to use its new powers.
There are various forms of civil sanction. Some aim to penalise the offender and act as a deterrent; others focus on restoration and compensation for the damage caused by the offence. Subject to certain limitations and depending on the circumstances of the case, each sanction may be imposed on its own or in combination with other sanctions.
Please click here to see the summary of the new civil sanctions.
2. Only certain offences are covered by civil sanctions
Civil sanctions are only available for certain environmental offences. Within the prescribed offences not every type of civil sanction is available for that offence. For example, only Stop Notices can be imposed in relation to certain waste offences under the Environmental Protection Act 1990. We think civil sanctions will be extended to additional offences in due course.
Currently, the offences covered include, for example, those relating to hazardous waste, abstracting water and storing oil. A full list of the offences appears at Annex 1 to DEFRA Guidance on the application of Civil Sanctions. In particular, some waste management and water pollution offences are not covered neither are offences under the Environmental Damage (Prevention and Remediation) Regulations 2009, (which implement the Environmental Liability Directive).
From April 2011, civil sanctions are expected to apply to some environmental permitting offences under the Environmental Permitting (England and Wales) Regulations 2010. This is presently subject to consultation.
3. Procedures for using civil sanctions
When deciding whether to impose civil sanctions, (other than Stop Notices), regulators must apply a criminal standard of proof. They must be satisfied “beyond reasonable doubt” that an offence has been committed. This is more onerous than the civil law standard: “on the balance of probabilities”.
The general procedure for applying civil sanctions is as follows:
- the regulator issues a Notice of Intent (“NI”) to impose the sanction. This will include details of the grounds for imposing the sanction and the right to make objections;
- the offender has 28 days to object to the proposed sanction.
- the regulator must then decide whether to impose the sanction, (albeit with or without modifications). If it decides to impose a sanction, it must then issue a final notice (“FN”);
- the offender may appeal against the FN to the First-Tier Tribunal (the General Regulatory Chamber) on various grounds (see box). Any further appeals are to the Upper Tribunal (Administrative Appeals Chamber) and have to be on points of law alone.
The timeframe for appeals (both against the NI and the FN) is fairly short. Businesses will therefore have to act quickly if they wish to object to the proposed sanction.
The regulator has a variety of enforcement options if an offender fails to comply with a civil sanction. With the exception of monetary penalties, the offender can be prosecuted for the original offence or (where mitigating factors exist) given a non-compliance penalty (“NCP”). A NCP is a written notice issued by the regulator imposing a monetary penalty. However, if the non-compliance still continues, the regulator will be able to prosecute for the offence whether or not the NCP has been paid. The regulator can also offer alternatives within the civil sanctions regime. Monetary penalties (FMPs or VMPs) will be enforced through the civil courts but the offender cannot subsequently be prosecuted for the original offence.
4 . EA’s approach to enforcement
The new civil sanctions regime introduces a greater range of enforcement options for environmental offences. The EA has recently revised its Enforcement and Prosecution Policy to reflect its new powers. This will take effect from 4 January 2011 but will apply to offences committed after 6 April 2010 in England and after 15 July 2010 in Wales. It comprises:
- Enforcement and Sanctions Position Statement;
- Enforcement and Sanctions Guidance;
- Enforcement and Sanctions Offence Response Options.
The Position Statement describes the general principles the EA intends to follow. However, it also acknowledges that individual officers will have discretion when making decisions on enforcement action.
The Guidance considers how the EA will make enforcement decisions, the factors it will take into account when looking at the range of enforcement options available to it and how it will carry out the enforcement process. The guidance acknowledges that there is a drive towards outcome-focused regulation. This means that it will consider public interest factors when deciding what type of sanction (criminal or civil) to impose.
The Response Options sets out the enforcement options available for every offence which the EA regulates.
The EA may well take some time to become accustomed to the new regime and there are concerns that they may not apply their powers consistently. However, the policy and guidance also provide a framework or grounds for those wishing to challenge an enforcement decision.
5. Implications for business
- The new regime may lead to an increase in enforcement activity. Regulators will now have greater flexibility and broader discretion, where previously their only option was prosecution.
- VMPs may result in higher penalties than those issued by the court in criminal prosecutions. The EA will have considerable scope for calculating what it considers to be an appropriate level of penalty.
- The court may take into account any relevant civil sanctions previously imposed upon a business during sentencing for subsequent environmental offences. This may therefore be perceived to limit the commercial benefit associated with the new regime.
- Regulators will be required to publish details of enforcement action they take using civil sanctions. There is concern that too much information will be provided about the offence and the defendant company. This could create adverse publicity and could be potentially damaging to a business’ reputation.
- Businesses should also be aware that civil sanctions will not bring anonymity. Whilst the public spectacle of criminal prosecution may be avoided, regulators will still publish details of enforcement action, which could attract negative publicity. Compliance is still, therefore, the best approach.
- Despite an increase in activity in the short term, we think that the amount of regulatory enforcement should reduce over time, with the increasing benefit and competitive advantage that running a compliant business brings.
- If applied properly, the sanctions should be proportionate to the offence taking account of the harm caused and the facts of each case.