Penalties for businesses falling foul of environmental laws are currently applied inconsistently by the courts. Even where local wildlife or neighbouring homes have been affected, the fines applied are often small and bear no reflection to the profits or turnover of the companies involved.
To take just one example, in 2012, Severn Trent (which boasts profits of £275.3m) was fined for a series of water pollution incidents which led to a large number of trout and salmon being killed. Even though the offence was categorised by the Environment Agency as a category 1 ‘major’ incident, and was the third prosecution against Severn Trent in just six weeks, the company was fined just £18,000.
Changes Afoot
Proposed changes to environmental sentencing guidelines mean a different approach is likely in the near future. The Sentencing Council, an independent body responsible for developing sentencing guidelines for the courts to use when passing a sentence, has produced draft guidelines for consultation. These guidelines aim to provide clear guidance on courts sentencing environmental offences and are likely to mean higher fines for serious offences or larger companies.
Why the Lack of Consistency?
The Sentencing Council blames the lack of consistency on a shortage of existing guidance on sentencing, as well as the infrequency with which environmental cases are seen by courts.
To tackle the problem, the draft guidelines propose a tariff-based system for a wide variety of environmental offences ranging from minor breaches such as fly tipping, to more serious cases of water and waste pollution involving significant harm to the environment.
The New Guidelines
The new guidelines set out a step-by-step process for courts to follow in order to determine how serious a breach is. There are clear starting points and ranges for fines that take into consideration the amount of damage that could have been caused, the culpability of the business involved and aggravating factors such as previous convictions and steps taken to remedy the breach.
After following this step-by-step process, a court would then consider other factors including ‘the likely effect of the fine on the offender and others’ and ‘the means or worth of the offender’.
Notable Changes in Approach
This is the first time that the courts will be encouraged to consider the size of an organisation when setting a fine for an environmental offence. This could spell trouble for large companies who are repeat offenders such as Severn Trent and other national organisations.
The suggested ranges for fines are fairly broad. Where there is a deliberate, serious breach, a ‘large organisation’ with a turnover of £25.9m or more could be looking at a fine in the range of £270,000 to £2 million. For a ‘small organisation’ with a turnover less than £6.5 million, the range would be £9,000 to £70,000.
The Purpose of the Draft Guidelines
Clearer rules and consistency will help businesses to have greater certainty of the risks involved in breaching environmental law, but there is a wider purpose to the guidelines as they should also encourage the courts to apply more substantial fines for corporate offenders and more serious breaches.
Fines that have a real economic impact and hit businesses where it hurts should provide a strong deterrent to other potential offenders. There will be an increased need for businesses to ensure their operations comply with all relevant environmental legislation - the implications of breaching the law will be greater than ever.
Consultation
The Sentencing Council are seeking views from the public on the proposals and the consultation on the new guidelines ends on 6th June. If you would like more information on the guidelines, advice on how you can respond on behalf of your industry or to discuss any other aspect of environmental law; speak to our specialist environmental law team today. Contact Julie Goulbourne by telephone 01616 966 229 or email jgo@stephensons.co.uk today for more information.