EA consults on details of the new unlimited fines for permit offences

The Environment Agency (EA) has launched a consultation to iron out the details of when the new unlimited variable monetary penalties for environmental offences can be used, how they will be calculated and details on the appeals process.

Last month, DEFRA announced that it would amend legislation to remove the current £250,000 cap under the Environmental Civil Sanctions (England) Order 2021 for variable monetary penalties (VMPs) and introduce unlimited VMPs as a civil sanction in the Environmental Permitting (England and Wales) Regulations 2016.

All future fines and penalties from water companies will be put into a new Water Restoration Fund, which will be reinvested back into the environment by supporting local groups and community-led schemes. There is no mention of a similar proposal for fines from other environmental offences. 

Now these changes have been approved, the EA has launched an eight-week consultation to confirm details on how the new powers will be used and how the penalties will be calculated before it amend its Enforcement and Sanctions Policy. 

READ MORE: Are the government’s new ‘better, quicker, faster’ unlimited civil sanctions all they’re cracked up to be?

Under the Environmental Civil Sanctions Order, the EA is only allowed to issue a VMP where they are “satisfied beyond reasonable doubt” that a person or organisation has committed an offence. The EA has highlighted that this will be the same position under Environmental Permitting Regulations.

The consultation asks stakeholders whether it is clear within the enforcement and sanctions policy when the EA can use VMPs. 

Currently the EA refers to the Sentencing Council’s definitive guideline for the sentencing of environmental offences in order to calculate the appropriate financial penalty of a VMP. 

The consultation states that while there will be no cap on VMPs, the EA will take into account the sentencing guideline and case law when determining an appropriate penalty. It says that “this will enable us to calculate a fair and proportionate penalty”.

The guidelines assess organisations according to their size based on turnover or an equivalent metric. It then provides a starting point and a range for an appropriate penalty. The guidelines allow for penalties with a starting point of up to £1,000,000 for large organisations and states that for very large organisations, where the turnover or equivalent very greatly exceeds the threshold the guidelines set out, that it may be necessary to “move outside the suggested range to achieve a proportionate penalty”. 

In addition to the size of the organisation, the guidance takes into account the level of culpability and the environmental impact. Other public interest factors, including the offender’s ability to pay, are also taken into consideration when deciding the final penalty.

The consultation asks respondents whether this calculation method is clear and easy to understand and asks whether by amending the approach, the EA will be able to issue proportionate and fair variable monetary penalties. 

In a blog post earlier this year, Michael Barlow, a partner at law firm Burges Salmon, wrote that “it is difficult to see why the removal of the cap on VMPs is likely to have the claimed deterrent effect”. 

This, he said, is because a prosecution for an environmental offence can already result in an unlimited fine as per the Environmental Sentencing Guidelines. 

“When using the Environmental Sentencing Guidelines to issue civil sanctions with an unlimited fine, the fine ought to be the same or less and probably ought to be less because it’s for less serious offences,” Barlow told ENDS. 

The consultation also notes that under the changes, the appeal process for VMPs will remain unchanged. 

This means that the offender will have 28days to make a representation to the EA following the issue of a Notice of Intent, and any matters that are not resolved through the representation process can be appealed to the First Tier Tribunal following the issue of the Final Notice.

Barlow also previously warned that given the short time period to make a representation, Burges Salmon anticipates that there will be a “significant increase in the number of appeals being brought”.

The consultation asks stakeholders whether the current policy on appeals gives enough information and clarity to customers to understand the appeal process. 

Commenting on the consultation, environment minister Rebecca Pow said: “This consultation builds on government action to increase investment, toughen enforcement and tighten regulation and will make sure there is a proportionate punishment for operators that breach their permits and harm our rivers, seas and precious habitats.”