The Environment Agency is to get 'real teeth' with meaningful penalties to deter offenders in the water industry

The environment secretary, Ranil Jayawardena, has announced that the government will consult on proposals to increase the civil penalty limit from £250,000 to £250 million for water companies that pollute rivers and waterways.

The move follows widespread concern about the number of pollution incidents by water companies and forms part of the government's focus on cleaning up the UK's rivers and waterways.

As criminal prosecutions are lengthy and complicated, the proposals aim to enable the Environment Agency (EA) to bring more swift enforcement action through the use of variable monetary penalties (VMP).

Enforcement action

Depending on the breach, the EA can prosecute offenders through the criminal court system or it can unilaterally impose a civil penalty. If the EA decides to prosecute an offender, this can take several months or sometimes years to reach a resolution and will usually result in the court imposing a fine. Even for an offender that decides to plead guilty, there are various procedures that need to be fulfilled before the case will be heard in court.

However, a VMP can be imposed by the EA with minimal procedure and without the obligation on the EA to meet the evidential and disclosure requirements that exist in the criminal court system. There is a right of appeal to a first-tier tribunal but the grounds of appeal are based on the presumption that the offender is guilty and there has been an error.

The EA's 2021 report on the environmental performance of water and sewerage companies in England illustrates the regulator's intention to take tougher action through prosecution against them and their senior executives. Increasing the limit of VMPs to £250 million will provide the EA with another avenue to pursue more robust enforcement.

Environment Agency in the spotlight

The EA's enforcement practices have recently come under scrutiny in environmental news service the ENDS Report's film "Severn: The poisoning of Britain’s Amazon". The documentary focused on the EA's apparent lack of action and that, when enforcement action is taken, the fines imposed by the courts are not high enough to deter water companies from discharging pollutants into the UK's rivers and waterways.

In light of the increased scrutiny of the EA's enforcement practices, the new proposals to increase civil penalties and take tougher civil action against companies that pollute rivers and waterways will likely be welcomed by the regulator.

Osborne Clarke comment

The proposal to increase the limit of civil penalties for water pollution breaches illustrates the government's increased willingness to tackle water pollution. Pressure on the regulator to take further action against water companies is mounting and increased enforcement is expected.

When VMPs were introduced they provided the EA with an easier and quicker means to impose penalties on offenders. The increase in the limit will give the EA "real teeth" to impose a meaningful penalty that can act as a deterrent. However, if higher penalties are imposed this is also likely to lead to an increase in appeals to the first-tier tribunal. Water industry participants should look at their own instances of discharges of pollutants to rivers and watercourse and consider whether improvements to their infrastructure can be made – or risk higher penalties.