Environmental Civil Sanctions (England) (Amendment) Order 2023

Baroness Bakewell of Hardington Mandeville Excerpts

Wednesday 13th September 2023 Grand Committee

[The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)]

My Lords, I beg to move that the Environmental Civil Sanctions (England) (Amendment) Order 2023, which was laid before this House on 12 July, be approved. In doing so, I hope that it will be useful to your Lordships if I speak also to the Environmental Permitting (England and Wales) (Amendment) (England) (No.2) Regulations 2023.

The purpose of the instruments before the Committee is to strengthen environmental civil sanctions and provide environmental regulators with the tools that they need to hold operators to account. The instruments have been grouped as they form a package of amendments to the civil sanctions available to Natural England and the Environment Agency.

A public consultation on these proposed changes was held earlier this year, first trailed in the plan for water, and received majority support from the public and a range of operators under the legislation in question. Strengthening regulations that hold polluters to account, from water companies to waste operators, is part of the Government’s wider plan to reduce pollution and protect the biodiversity and ecology of our natural environment. Earlier this year, we published our environmental improvement plan. It provides an ambitious five-year road map for a cleaner, greener country, with a delivery plan for restoring nature and improving environmental quality across the board. We have since gone further with our comprehensive integrated plan for water, which will deliver clean and plentiful water.

To deliver on our ambitions, we must ensure that regulators have all the tools they need to take action on unacceptable breaches of environmental regulations. The current provision for variable monetary penalties under the Environmental Civil Sanctions (England) Order 2010 is capped at £250,000. This means that some operators may think that they can price in the penalty rather than follow the law. Therefore, current penalties do not act as a strong deterrent, particularly for large operators with significant turnover.

The limitation can be resolved by the amendments before the Committee today, which will entirely remove the cap. This will future-proof penalties to ensure that Natural England and the Environment Agency can determine the amount of the penalty in line with their enforcement policy. Penalties will be based on the degree of environmental harm and culpability as well as the size of the operator, ensuring that penalties are calibrated to act as a proportionate deterrent and punishment.

Currently, there is no provision for variable monetary penalties under the Environmental Permitting (England and Wales) Regulations 2016. The majority of Environmental Agency investigations are conducted under the environmental permitting regulations but the agency is limited in its enforcement options to warnings, advice, guidance or criminal prosecutions. A “justice gap” exists for moderate to severe offences. This limitation can be resolved by the instruments, which will introduce variable monetary penalties to the environmental permitting regulations.

Strong safeguards for determining the penalty, including a requirement on the Environment Agency to take into account an operator’s ability to pay, remain in place. The Environment Agency will also continue to use the guidelines for environmental offences published by the independent Sentencing Council as the basis to determine the amounts of all variable monetary penalties. The guidelines include a number of safeguards to ensure that penalties are proportionate and take into account the size of an operator, its ability to pay, its degree of responsibility and the seriousness of the incident. The instruments require the environmental regulators to update and publish guidance that sets out their methodology for determining the amounts of these penalties. A consultation on updating the guidance has been launched and will ensure a fair, proportionate and consistent approach.

The UK has a long and proud history of work in this area. The Government’s environmental improvement plan and integrated plan for water make our commitment to protect the environment clear. These instruments will ensure that the regulators are able to act swiftly against those who would threaten to harm it. They build on announcements earlier this year, with the proceeds of fines going into water improvement schemes through a new water restoration fund, and on water company dividends being linked to environmental performance. Together, this is a strong package designed to target those companies most egregiously harming our environment.

I commend this draft instrument to the House.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for his introductory remarks on these two statutory instruments. It is regrettable but not entirely surprising that businesses find it cheaper to pay the current fine of up to £250,000 than to fix the problem causing the breach of environmental law. There have been numerous debates in the House on storm overflows and the resultant sewage spills into waterways. It is time that this was resolved in a way that effectively deters the polluters from their anti-social activities. I fully support the removal of the cap of £250,000 for a larger fine and hope that the threat of a more substantial fine will be a sufficient deterrent.

I have looked at the consultation questions and responses on changing the cap. There was enormous support, with 88% of respondents agreeing or strongly agreeing with the proposals to change the cap. I smiled to myself when I saw that the lowest support for this change came from the waste and resource management and energy sectors. Some 27 organisations ranging across a wide variety of interests are listed as having taken part in the consultation, from the Clean Rivers Trust and the River Otter Fisheries Association to Severn Trent Water and Wessex Water. There was a good cross-section of responses.

I noted that there was some concern that removing the cap might result in disproportionately high penalties. This would obviously depend on how someone had been affected by the breach of legal protection; the Minister set out the process for assessing fines. A minor breach is unlikely to receive a high penalty whereas a major incident that results in contamination over a large area and on a scale that takes huge resources to clean up should, quite rightly, deserve a substantial penalty.

Only by implementing the “polluter pays” principle in full will our environment eventually be cleared up. I note that the Secondary Legislation Scrutiny Committee also supports closing the gaps in the enforcement regime. I fully support this SI.