You would be forgiven for thinking that prosecutorial action by the regulator was on the increase. Just a few months ago the Environment Agency (EA) issued a £1.52 million fine to Dairy Crest Limited for committing environmental offences over a five year period, and in 2021 fined Southern Water a record £90 million. Despite this, research carried out by ENDS reveals a steep decline in EA prosecutions through analysis of two decades’ worth of industry prosecution data.
The data shows a substantial 76.4% decrease in prosecutions from 2000 to 2010 and 2011 to 2021 respectively. Understandably, Covid-19 had a significant impact on prosecutions in 2020 and 2021 due to court backlogs and the effect of the pandemic generally. But this does not fully explain such a continued and steep decline.
It would be optimistic to suggest that improved environmental awareness and compliance has driven such a significant decrease in incidents leading to prosecutions. This is not even backed up by the EA’s own statistics which, for instance, show a substantial rise in serious pollution incidents in the year 2021/2022.
A more credible explanation is a policy shift in the regulator’s approach to ensuring compliance and punishment of those in breach of environmental law. Industry awareness of environmental, social and governance factors is undoubtedly improving. But EA budgetary cuts, combined with the expense and protracted nature of enforcement through the criminal courts, appears to be a more significant factor.
The government recently announced proposals to significantly increase the maximum value of Variable Monetary Penalties which can be imposed directly by the EA rather than through the courts. The proposal will see the maximum civil penalty for water companies that pollute the environment increase from £250,000 to up to £250 million. This increased capability to sidestep the backlogged criminal courts and issue hefty fines against polluters will empower the regulator to achieve its objectives without a traditional prosecution. The proposal seems to evidence an apparent policy shift, although the EA’s Chief Executive Sir James Bevan recently said that the regulator “wouldn’t hesitate to press for custodial prison sentences for a water company employee if the evidence warranted it”.
While there is no doubt that the EA still has the ability to pursue criminal prosecutions, continued decline in traditional enforcement through the criminal courts is likely. This is in light of the relative ease with which the EA can issue civil penalties, and the current proposals to substantially increase their financial limit.
As traditional sanctions remain at the regulator’s disposal both in the form of unlimited fines and custodial sentences through the criminal courts, the latest data should not provide comfort to those in breach of environmental law.
The EA remains equipped to take regulatory action with serious consequences, both for businesses and individual directors, although the way in which it does so looks to be ever evolving. A shift in focus from criminal regulatory action to civil sanctions may in fact lead to more proactive enforcement and the EA should certainly not be considered docile.
Our Environment team is unique in its ability to advise across the full spectrum of contentious and non-contentious, civil and criminal environmental matters. Please contact Rachel, Mike or any member of the team if you need advice or assistance in relation to Environment Agency prosecutions or any environmental issue.