New improved penalty powers for UK Environmental Regulators

New improved penalty powers for UK Environmental Regulators – Nov 2009

The UK Government is proposing to give extensive new powers to the environmental regulators in England & Wales (including the Environment Agency) to deal with environmental crime.    It is particularly evident in the environmental sphere that the level of fines and other penalties imposed by the courts has not had sufficient deterrent effect.  The new powers would derive from the Regulatory Enforcement and Sanctions Act 2008 which aims to give regulators in specified sectors a more efficient and effective toolkit of civil penalties to improve regulatory compliance.

The new penalties could be imposed by the regulator itself (without court involvement) although the regulator would need to follow criminal standards of investigation and proof and there would generally be a right of appeal.  Some of the new penalties are quite novel in the environmental field:

  • Fixed Monetary Penalties – to be used for minor breaches;
  • Variable Monetary Penalties – to be used for more serious offences.  In particular there is the possibility that these could be used to remove any financial benefit from non-compliance, e.g. by allowing penalties up to 10% of turnover (as in competition cases); and
  • Enforcement Undertakings – whereby companies agree with the regulator what action is to be taken – further regulatory action would ensue if these are breached.

Other types of penalty are already contained in certain environmental legislation but not in all cases and the new powers will therefore provide a more consistent suite of penalties:

  • Stop Notices
  • Compliance Notices
  • Restoration notices

Criminal prosecution will be available to back up these new penalties where necessary.  In addition, the Government intends to strengthen the courts’ sentencing powers for criminal offences, and sentencing guidelines. These changes aim to align more closely the new civil sanctions and the softer end of the criminal sanctions (e.g. fines that can take away financial benefit, publication of offences).

If introduced, these new measures are likely to see environmental compliance placed higher up the board room agenda, particularly if regulators are active in imposing significant monetary penalties.

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