The Environment Agency (“EA”) has recently launched a consultation on its proposals to update its current Enforcement and Sanctions Statement (“ESS”) and Enforcement and Sanctions Guidance (“ESG”). The ESS and ESG are applied by the EA during its enforcement of various environmental legislative regimes in England. The consultation has been triggered by:
- changes in Government policy and law, to which the EA is required to give effect in the ESS/ESG (such as the Definitive Guideline for Sentencing for Environmental Offences (2014) (the “Sentencing Guideline”)); and
- experience gained by the EA during the enforcement of environmental laws.
Combined policy document
In order to streamline and clarify the current guidance, the ESS and ESG are to be combined into a single document entitled “Enforcement and Sanctions Policy” (“ESP”). Notably, however, no changes are proposed to the Offence Response Options document, which sets out which regulatory enforcement options are available for specific environmental offences. This is considered by the EA alongside the current ESS and ESG when contemplating enforcement action.
Traditional principles of enforcement +1
There are no substantive changes proposed in the draft ESP to the current principles underlying the EA’s approach to regulatory enforcement action (i.e. the application of proportionality, consistency, transparency, targeting of enforcement action and accountability when carrying out enforcement activities) save that the EA is required to also have regard to the statutory economic growth duty1. The two potentially conflicting principles (protection of the environment and promotion of economic growth) could become an area of tension for the EA when deciding whether and how to take enforcement action. Interestingly the draft ESP states that the EA’s decision to commence a prosecution and any decisions made during prosecution proceedings are not subject to the growth duty.
Enforcement Undertakings (“EU”)
The draft ESP provides further guidance on the form of EU which is capable of acceptance by the EA and, conversely, what it is likely to refuse. The consultation document suggests a few changes which are driven by the EA’s recent experience.
EUs are required to specify a number of measures that the offender will undertake to prevent reoccurrence of the offence, restoration and payments to third parties affected by the offence. The EU must also set out the action that will be taken to secure the equivalent benefit or improvement to the environment where it is not possible to remedy the harm caused by the offence. This latter concept can often be difficult to accurately assess and quantify, particularly for offences which impact upon the water environment. As a result for offences involving water pollution, the draft ESP proposes employing (at least as a starting point) a natural capital methodology, namely the EA’s Natural Capital Assessment calculator.
If this is successful, consideration will be given to applying a similar methodology to harm to land and possibly extending it to other regimes such as the transfrontier shipment of waste and producer responsibility.
Variable Monetary Penalty (“VMP”)
A potentially significant development is the proposal to base the calculation of a VMP on the Sentencing Guideline. The Sentencing Guideline takes account of a range of factors but, importantly, it provides for an assessment of the level of penalty based upon the size and turnover of the corporate entity in question. This approach has led to a significant increase in the level of fines received by large companies for environment offences. However, to place this proposed change in context, VMPs are currently only available as an enforcement option for certain environmental offences (and do not extend to offences committed under the Environmental Permitting (England & Wales) Regulations 2016. They are subject also to a statutory cap of £250,000 (for which, the EA has indicated, adjustment will need to be made).
The EA can do this already, but in the draft ESP the EA has signalled perhaps a stronger intent to question the continued competence of an environmental permit holder to hold such permits in the event of a permitting conviction.
Victim’s Right to Review
A further change to be introduced under the new guidance is the Victim’s Right to Review. Victims of environmental offences which do not result (following investigation by the EA) in a decision to prosecute, can request (within 5 working days) that such decision is reviewed. No further information is provided in the draft ESP as to the mechanism of such review or what happens if the outcome remains the same as the original decision.
Enforcement Climate Change and others
The draft ESP contains proposals to incorporate the approach taken in the Sentencing Guidelines to civil penalties for non-compliance under new environmental legislation, namely the (draft) Fluorinated Greenhouse Gas Regulations 20172; and the Control of Mercury (Enforcement) Regulations 2017; as well as various climate change schemes3.
Responding to the consultation
Views are being sought via a set of specific questions on aspects which the EA considers are significant. There is also an opportunity to provide general comments on the proposals, including potential impact on business.
The EA states that it hopes that better guidance on EUs and VMPs will ensure that they become increasingly accepted as useful enforcement interventions4. This signals the EA’s continued shift towards enforcement measures other than prosecution. However, clearly the EA is very happy with how the Sentencing Guidelines have worked out in prosecutions and, as a result, is seeking to embed the principles into other enforcement mechanisms.
Responses need to be submitted by 15 January 2018.