8 June 2015 by Caelia Quinault

Large waste companies to face higher fines for pollution

Large waste firms which commit pollution offences have been warned that they could be hit by much higher fines in future which are proportionate to the size of their businesses under new sentencing guidelines.

The warning from the Environment Agency comes after the Court of Appeal last week (June 4) upheld a £250,000 fine for Thames Water Utilities Ltd for polluting a nature reserve.

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Last week’s Court of Appeal ruling is significant for the waste sector

While the judgement itself did not relate to waste, it was the first in the Court of Appeal to consider new Sentencing Council Guideline for Environmental Offences which were issued in July 2014 and also apply to the waste sector.

The guidelines require that any fines given should take into account the means of a particular company offender and to increase it where the company can afford to pay more, as well as decrease it in other cases.

This means that larger companies operating in the waste sector which pollute the environment could see themselves slapped with much higher fines than previously, which are more proportionate to the size of their businesses.

‘Significant’

A spokeswoman for the Environment Agency said: “This is significant for waste crime as well as the water industry. The Court said that in the worst cases fines could be in excess of £100 million/100% of companies’ pre-tax profit.”

Regarding repeat offending,  the Court of Appeal said it wanted: “to bring the message home to the directors and shareholders of organisations which have offended negligently more than once before, a substantial increase in the level of fines, sufficient to have a material impact on the finances of the company as a whole, will ordinarily be appropriate. This may therefore result in fines measured in millions of pounds.”

Speaking after the ruling, Anne Brosnan, deputy director of legal services at the Environment Agency said: “We welcome the Court of Appeal’s decision to uphold this significant prosecution result, which demonstrates that businesses need to prevent pollution or their profits could take a hit.

“Under the new environmental sentencing guideline very large companies who risk causing serious environmental damage could now face very large fines.”

UKELA

Angus Evers, co-convenor of the waste working party at the UK Environmental Law Association, explained in more detail what the judgement and sentencing guidelines would mean for companies operating in the waste sector.

Angus Evers is co-convenor of the UKELA waste working party

Angus Evers is vice chair of the UKELA waste working party

Mr Evers, who is a partner at law firm King & Wood Mallesons in London, said: “The big waste companies should be more concerned than some of the smaller operators as the sentencing guidelines provide for larger fines for companies with larger turnovers. In the guidelines a large company is defined as any organisation with a turnover over £50 million which is not that high. There is also a category for very large companies but no definition is given

“One of the aims of the guidelines is to make sure fines are more proportionate to the financial strength of that company. Before what was happening is that the same level of fine was being given to large companies as to one-man bands.

Mr Evers added that he expected fines across the board should rise under the new guidelines.

He commented: “This should in general see higher fines for pollution offences in the waste and other sectors as the fine starting points and ranges are higher than in previous guidelines.

“I think there been frustration amongst legitimate operators that the companies have been breaking the law and due to the low fines effectively getting away with it, hopefully that will happen less now.”

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