Winning on penalties

Without development we would have no homes, offices, factories or superstores, but in the process of building them we often cause damage to protected sites and species, and generate pollution from emissions, waste and other forms of contamination. To rectify this damage we have a system of regulation that is supposed to maintain high standards among developers and contractors and provide incentives for poor performers.

The problem is that UK environmental regulation is underpinned by the threat of criminal prosecution, which is often too rigid an approach to be used for any but the most serious offences. It focuses on punishment rather than prevention, and the more stringent procedural safeguards in a criminal trial can undermine regulatory efficiency.

The application of strict liability often leads to criminal blame being attached to a pollution incident caused by an oversight rather than an intentional act. This is leading to the trivialisation of environmental offences, the imposition of inadequate fines, and reluctance by regulators to pursue more difficult cases. The end result is a system that does not deal fairly with businesses or adequately protect the environment.

Could there be a better approach?

The government has been looking at how to improve environmental justice in the UK generally, and in particular how to tackle environmental crime. Back in 2003, I co-authored a University College London report for DEFRA that proposed the introduction of environmental civil penalties as a more flexible and proportionate mechanism for dealing with regulatory breaches that are hard to prove, or where there has been a genuine mistake by a contractor that does not really deserve to be branded as criminal behaviour.

Under this proposal regulators would only have to prove a breach of regulations on the balance of probabilities, rather than beyond reasonable doubt, and the penalties could be imposed at the discretion of the regulator depending on the profit gained from non-compliance and the cost of the damage done. Such penalties would be used as an alternative to, rather than a replacement for, criminal prosecution.

The report proposed an initial model in which the Environment Agency would apply civil penalties for a core set of less serious regulatory offences, including the unintentional breach of a permit or the intentional fly-tipping of waste. The penalties would recognise the gravity of the breach, the financial means of the party involved and its behaviour in addressing the breach.

The end result is a system that does not deal fairly with businesses or adequately protect the environment. Could there be a better approach?

Civil procedures would be followed and a suitable appeal mechanism would be provided, for example through an environmental tribunal. Following evaluation, the system could be extended to other areas of environmental regulation and other regulators.

Since the publication of this report progress has been slow, but political support for better environmental enforcement has been steadily growing. The parliamentary environmental audit committee has recommended looking at alternative compliance methods, including civil penalties, and a recent Treasury review of regulatory inspection and enforcement has

also advocated the use of “administrative penalties”.

There has even been talk of legislation after a positive response from DEFRA and the Environment Agency to the UCL proposal, which would allow the agency to impose civil penalties for “routine” pollution offences according to a tariff based on turnover, or a fixed sum for individuals. Last month DEFRA announced a review of the enforcement of environmental legislation, which it is hoped will lead to the greater use of civil penalties in the not too distant future.

A modern approach to environmental regulation demands a proportionate response that recognises good performance, allows effective action to be taken against businesses that fail to meet acceptable standards, and at the same time recovers the costs of damage caused to the environment.