Squeeze on Agency funds could jeopardise civil penalties regime

Hopes that the Environment Agency can assume responsibility for a new civil penalty regime for environmental offences are "doomed to failure" by the Government's squeeze on its funding, according to a report on corporate environmental crime by the House of Commons Environmental Audit Committee.1

The report is the Committee's fourth, and last, focusing on environmental crime. In November, the Government gave a lukewarm response to earlier reports on environmental crime and the courts and on local environmental crime, such as fly-tipping and noise nuisance (ENDS Report 358, p 46 ).

Recently the Government has suggested that civil penalties for environmental offences could offer faster, and more proportionate, action than a system based on prosecutions alone (ENDS Report 359, pp 27-31 ). The Labour Party's manifesto is likely to include a commitment to environmental justice legislation, or at least an overhaul of the system of criminal penalties.

In addition, the Clean Neighbourhoods and Environment Bill, currently passing through the Commons, could give local authorities powers to issue fixed penalty notices for certain waste offences (ENDS Report 359, pp 40-41 ).

The Committee supports the creation of a "robust" civil penalty regime and is "reassured" that DEFRA "clearly recognises that the status quo with regard to how environmental crime is dealt with cannot be allowed to continue."

However, "significant investment" will be needed if the day-to-day operation of such a regime falls to the Agency. The Committee points to the £4 million cut in grant-in-aid funding for the Agency in 2004/05, and the requirement for it to make efficiency savings of £73 million by 2007/08. It concludes that "any suggestion that [the Agency] can assume responsibility for a civil penalty regime without a significant increase in funding will doom this initiative to failure."

The introduction of a civil penalties regime will also need an effective method of communicating with all businesses to which such penalties might be applied. Failure to adopt a communications strategy from the outset "may lead to unforeseen rights of appeal being granted to those companies who might seek to demonstrate ignorance."

During the inquiry, Thames Water managing director John Sexton defended the fact that many water companies have been named by the Agency as repeat offenders. He argued that the size and age of the sewerage system meant that a relatively large number of incidents were inevitable within this sector (ENDS Report 358, p 35 ).

The Committee was unimpressed. "Irrespective of any mitigating factors which pertain to some of the pollution incidents resulting from Thames Water's activities, and regardless of the apparent legality of the discharges into the Thames, we are compelled to express our abhorrence of this legitimised pollution and the depressing attitude with which it is accepted."

The Committee was particularly concerned about last August's massive sewage overflow into the Thames, which killed thousands of fish. In December, the Government decided not to fund development work on a new "super-sewer" under the river (ENDS Report 359, pp 9-11 ).

This is not good enough for the Committee, which called for a decision on the planned tunnel to be made "by the time [the Government] responds to this report."

Anglian Water, Wessex Water and Dwr Cymru are commended for reducing pollution incidents in 2003. However, the report calls for "a similar commitment and achievement from all other water companies."

The Committee urges the Agency to urgently address the "perceived inconsistency of approach... in prosecuting environmental crime around the country." But it disagreed with claims by the waste and water sectors that the Agency focuses too much on companies that it already regulates because it is easier than clamping down on unregulated businesses.

"If an environmental regulation is being infringed then the Agency has every right and indeed a duty to act against the offender."

Even so, the Committee is concerned that "the majority of incidents are, by the Agency's own reckoning, committed by those in the unregulated sector. This is not adequately policed and this imbalance must be addressed."

If a civil penalty regime is introduced, the Agency should not be squeamish about imposing penalties that could force a business to cease operating, the MPs say. "Whilst no one would wish to see a business fail, if the civil penalty is effectively without teeth then it will fall at the first hurdle."

The Committee also supports the Agency's plans to use powers under the Proceeds of Crime Act 2002 to confiscate the assets of companies or directors in three cases likely to be heard this year. "We cannot consider that the survival of a business which is a serial offender... should rank higher...than the protection of the environment which that business desecrates."

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