Government Announces Unlimited Penalties for Environmental Polluters

River Cleddau in Haverfordwest, Wales, on Oct. 31, 2021. (Bronwen Weatherby/PA）

Environmental polluters will face unlimited penalties under new legislation introduced today.

Companies holding environmental permits, such as energy and water operators, will see the current penalty limit of £250,000 scrapped.

The Department for Environment, Food and Rural Affairs (Defra) announced changes to the legislation, following a government consultation, which received “widespread public support.”

The consultation offered several options to change the cap, ranging from £25 million to unlimited penalties.

As the government decided to opt for unlimited penalties, the Environment Agency (EA) and Natural England will be able to apply “a quicker method of enforcement than lengthy and costly criminal prosecutions.”

EA Chair Alan Lovell said that the new powers will enable the government to deliver penalties quicker and easier, while the most serious cases will continue to be taken through criminal proceedings.

The size of the penalties will be determined by a number of factors, such as the extent of the pollution and the degree of responsibility and harm. The polluting company’s size and ability to pay will also be considered.

The Sentencing Council will ensure that the level of penalties will be proportionate to the degree of environmental harm and culpability, the government said.

“This aligns the approach to calculating civil penalties with how the court calculates criminal sanctions,” the government added.

Under the new rules companies, including waste operators and incinerators, will be held to greater account, said Whitehall.

“Polluters must pay,” said Environment Secretary Therese Coffey, adding that the government will target a much wider range of offences. These will include breaches of storm overflow permits and reckless disposal of hazardous waste.

Companies will also face the proposed higher penalties if found to breach the Environmental Permitting (England and Wales) Regulations 2016. The majority of EA investigations, as well as environmental permitting in England and Wales, take place under these regulations.

Mr. Lovell called the scrapped penalty limit an “important deterrent” that will boost compliance across a range of sectors.

Impact

In England, the EA is responsible for regulating major industries and waste, treatment of contaminated land, water quality and resources and fisheries among other sectors.

The proposed changes will affect waste operations and water discharge activities. This means that water and sewage companies, who earlier this year admitted spills of untreated sewage onto beaches and into rivers over the past few years, may face higher penalties in the future.

Future penalties for water companies will be reinvested in the government’s new Water Restoration Fund, meant to improve water quality and deliver help to local communities.

In April, the government announced that water and sewage regulator Ofwat can impose larger penalties on water companies, without needing to go to court. Depending on the company’s performance, Ofwat can influence its payouts to shareholders and management.

Water UK, a membership body representing the UK water industry, has welcomed the government announcement.

“It is right that regulators have all the powers they need when things go wrong,” a Water UK spokesperson said.

The proposed regulations may have an impact on the net housing supply. The Home Builders Federation warned earlier in May that rules imposed by Natural England and Defra, such as the nutrient neutrality requirements, could lead to a drop in housing supply by up to 122,000 homes per year.

The nutrient neutrality requirements, which originated from a 2018 European Court of Justice ruling, caused Natural England to revise its guidance to local authorities. Nutrient neutrality is a means of ensuring that a development project does not add to the amount of nitrates entering the water system in an area.

The proposed amendments are yet to be approved by both Houses of Parliament, before coming into force.