1. Balancing the Stick and Carrot in Securing Compliance and Enforcement in England 21 April 2016 Peter Kellett, Director of Legal Services Environment Agency for England

2. The Environment Agency Developments in sanctions Outcome based enforcement Sentencing Council Guidelines Enforcement Undertakings Balancing the stick and the carrot Outline

3. Environment Agency for England What we do Environmental regulator Compliance, Enforcement and Prosecution –Industrial Emissions Directive –Waste Directives and Regulations –Water Directives –Emissions Trading –Radioactive Substances –Contaminated land Environmental operator Environmental advisor

4. Environment Agency for England What we are Non Departmental Public Body (NDPB) Established by Environment Act 1995 Independent but Secretary of State: Appoints the Board Can give Statutory Guidance and Directions Sets budget Appeals to the Secretary of State

5. ACCEPTABLE COMPLIANCE RANGE UNACCEPTABLE COMPLIANCE RANGE LEVEL OF COMPLIANCE Criminals No intention of complying Generally non-compliant Generally compliant Trail-blazers Go beyond compliance Total disregard Investigate, prosecute and disrupt to stop this activity Unaware or obstructive Inform and educate – backed up by enforcement Positive(constructive) ownership Support towards full compliance Proactive ownership Step back and allow ownership

6. A. To stop offending – aim to stop an illegal activity from continuing/occurring. B. To restore and/or remediate – aim to put right environmental harm or damage. C. To bring under regulatory control – aim to bring an illegal activity into compliance with the law. D. Punish and/or deter – to punish an offender and/or deter future offending. “Level Playing Field” Developments in Sanctions 1 - Outcome Focussed Regulation

7. Other Factors That May Affect the Picture Earlier interventions / T-Junction conversations Enhanced powers for enforcement Compliance move to self-monitoring Inspections and audits 6

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13. Increased litigation from regulatory decisions 12

14. Developments in Sanctions 2 - Sentencing Council Guidelines

15. Sentencing Council Guidelines 2014 Range £450,000 - £3m category 1 incident, major harm large company (£50m turnover) deliberate Range £400 - £3,500 category 4 incident, risk of localised harm small company (£2-10m turnover) low or no culpability 14

16. Sentencing Council - features Applies to Individuals (18+) and Organisations sentenced on or after 1 July 2014 Every court must follow the guidelines (unless contrary to interests of justice) Penalties based on Culpability Harm Organisation (Turnover) Specify Offence Ranges and Starting Points Twelve Steps

17. Sentencing Council Guidelines - ranges

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21. Developments in Sanctions 3 - New civil sanctions Regulatory Enforcement & Sanctions Act 2008 In use partially since 2011 EUs available for the main Permitting Regime from April 2015.

22. Civil Sanctions Regulatory Enforcement and Sanctions Act 2008 Fixed Monetary Penalties (FMPs) Stop Notices (SNs) Enforcement Undertakings (EUs) Variable Monetary Penalties (VMPs) Compliance Notice (CNs) Restoration Notice (RNs) Order or Regulations Give Access to Some / All Civil Sanctions

23. Variable Monetary Penalties Capped at £250,000 Complex Guidance from Government Limited offences (not permitting) S4 Salmon and Freshwater Fisheries Act 75 25 Aug 2015, Cumbria County Council £63,958 and costs recovery of £5,564 No appeals yet to First Tier Tribunal

24. Enforcement Undertakings (EUs) Relevant Offence Voluntary Proactive or reactive Accept or reject Legally binding EU Offer form template

25. EUs – What must they contain? Actions: -to stop offending and prevent a recurrence -to ensure the position is restored -to benefit any person affected -where restoration is not possible, actions to secure equivalent benefit/improvement Terms of the undertaking Completion Date Completion Criteria Why is this important?

26. EU Acceptance Letter

27. EUs – Factors in favour of acceptance Early Offer Environment & Community Good compliance history More appropriate response based on the nature of the offence and the regulatory impact Timely and satisfactory environmental outcome, in the public interest Offering more than the bare minimum

28. EUs – Factors in favour of rejection Legal proceedings have commenced Category 1 offence Intent Bad Faith Clauses denying liability or sets up a defence for possible non-compliance

29. Benefits of EUs Can be used to achieve desired outcomes, such as: Relevant permit, registration or authorisation Staff Training Responsible person New or improved management systems New or improved site infrastructure Cost Recovery Financial contribution to legitimate environmental organisation or project

30. Combined trends in enforcement More refusals, revocations and litigation More enforcement undertaking offers Lower inspection rates Fewer prosecutions Higher fines …leading to greater compliance? Gaps because VMPs limited to a narrow range of offences and EUs to a slightly wider range

31. Striking the Balance Stick - Sentencing Council Guidelines Driving improvement at previously impracticable sites Attracting the attention of senior managers of vary large companies Much higher incentives Carrot - Enforcement Undertakings Ability to put things right quickly Behavioural change Potential restoration of natural capital 30