Environment Bulletin: New Opportunity for managing impacts from Environmental Breaches

From 6 April 2015, organisations now have a new potential strategy for managing the fall-out from a breach of environmental legislation. Where there has been an offence under environmental permitting legislation, including water pollution offences, businesses and organisations may now be able to offer an “enforcement undertaking” to the Environment Agency as an alternative to prosecution.

An enforcement undertaking (EU) is a voluntary offer made by the offender which aims to remedy any environmental impact of the offence and other effects, such as financial impact on others, within agreed timescales. The EU should also include measures to ensure that the offence does not recur. If the EU is accepted by the Environment Agency, the Agency is prevented from bringing a prosecution for that offence, so long as you comply with the EU.

This means that if you become aware that your organisation has breached this legislation, you need to decide whether to bring this to the attention of the Environment Agency and offer an EU, or to wait to see what action the regulator will take.

EUs allow a proactive approach when a business or organisation discovers its own environmental breach, or even where this is brought to its attention by the regulator. It can mean that money that would otherwise have been spent on costly court proceedings can instead be used to remedy any damage caused and implement systems to ensure the problem does not happen again. Because the terms of the EU are proposed by the organisation itself, it can be better focussed on its particular circumstances and organisational structure. Also, as long as the EU is accepted by the Environment Agency and complied with, the organisation will avoid a potential criminal conviction, which could otherwise have both reputational impacts and affect its ability to tender for certain work.

EUs are only available where the potential environmental permitting offence was committed in England after 6 April 2015 and excludes certain offences such as those involving deception or fraudulent mis-reporting and breaches of enforcement notices. However, all the main offences under the environmental permitting legislation are included, such as water pollution offences, operation of regulated activities without, or in breach of, an environmental permit and failure to keep required records EUs can also be used by directors, managers and secretaries where their company's offence is committed with their consent, connivance or neglect, so long as EUs are an enforcement option for the company's own offence.

The Environment Agency can accept an EU where it has reasonable suspicion that an offence has been committed and where it believes that this is an acceptable regulatory outcome. In deciding whether to accept the EU, the Agency will consider factors such the severity of the environmental impact, the intent of the offender and whether it is likely that the organisation will comply with the EU (given their compliance history).

EUs have been available for some time for some other environmental offences, and have been used widely in relation to packaging waste offences. However, this development marks a departure into an area of environmental law where offences can have more immediate and identifiable environmental impacts.

Since there is limited scope for negotiation of terms of an EU, it is critical to pitch your offer at the right level and meet all the regulatory requirements to maximise the chance that the Environment Agency accepts your EU. Whilst an EU will not always be the preferred strategy, it does offer a welcome development in a more balanced approach to regulation. Also, using an EU can ensure that resources are directed at dealing with the issues and preventing recurrence of the problem, rather than dealing with lengthy and costly defence proceedings.