My Lords, we are rightly proud of the environment in our country. Many facilities which could harm the environment or human health are regulated under the environmental permitting regime. We are today considering one type of enforcement, and as noble Lords know, enforcement is an important part of environmental regulation. In the past, it has generally relied on criminal prosecution with fines and imprisonment, or formal cautions which result in a criminal record. For some cases, prosecution and cautions can be heavy-handed and slow. Currently, there is no proportionate alternative for offences under the Environmental Permitting (England and Wales) Regulations 2010. The regulations we are considering today will enable the Environment Agency to accept enforcement undertakings for certain offences at facilities where an environment permit is required.
Originally introduced in 2008, enforcement undertakings give greater flexibility to regulators in the way they secure compliance, reserving criminal prosecution for the most serious offences. The Environment Agency started to use enforcement undertakings, as well as other civil sanctions, for some of its regulatory activities in January 2011. These regulations will allow it to start accepting enforcement undertakings for offences in the environmental permitting regime.
Enforcement undertakings are voluntary offers made by offenders to restore and remediate damage and, importantly, to ensure compliance both now and in
the future. There are around 90,000 Environment Agency permits which cover a diverse range of facilities including scrapyards, landfill sites, sewage works, chemical plants and nuclear power stations. It is a relatively new framework that has brought clarity and cohesion to permitting regulation without reducing levels of protection for the environment and human health. It is important to confirm that the worst offenders will continue to be prosecuted. Enforcement undertakings will be most appropriate for normally compliant people and businesses as long as they address the causes and effects of their offending. Where they are used, they will streamline enforcement, put compliance and restoration first, and encourage dialogue between the Environment Agency and business.
Let me give your Lordships an example of where these regulations could be used. I shall take an industrial company with high environmental performance standards which accidentally pollutes a river with sediment run-off from an on-site development project. Rather than being subject to prosecution, the company could in the future offer an enforcement undertaking. That offer might explain how the company would prevent the offence happening again, perhaps by changing procedures and possibly by making a board member responsible for future development projects and environmental performance as a whole. The enforcement undertaking would also quantify the environmental harm that had been caused and propose investment to that value, perhaps to a local environmental project or charity that works to improve the river which has been polluted.
As regards how the decision on accepting the offer of an enforcement undertaking is made, the Environment Agency, Defra’s regulator, has already put in place robust guidance and governance for its civil sanctions powers. In deciding appropriate enforcement, it will continue to apply a stringent assessment of what it calls “public interest” factors. In my example, if the offender’s compliance history had previously been good, the offence was not foreseeable and the environmental effect was minor, it may be appropriate to accept an enforcement undertaking. The regulations we are considering would extend enforcement undertakings to the Environment Agency’s largest regulatory regime. It is estimated that around 50 prosecutions or formal cautions could be avoided each year.
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These regulations introduce no new regulatory requirements and make no changes to existing offences or existing enforcement mechanisms beyond allowing the Environment Agency to accept enforcement undertakings from those who voluntarily offer them. The regulations will have no impact on businesses, charities, voluntary bodies or the public sector, unless they have failed to comply with the law. No impact assessment is therefore needed, as they introduce what is, in effect, a voluntary measure.
Just to be clear, the costs of enforcement undertakings fall only on offenders, who offer them to the regulator. Where enforcement undertakings are offered and accepted, they will give priority to the restoration of what has been harmed and a return to compliance and, where
appropriate, they will also benefit persons affected by the offending. Enforcement undertakings will streamline the enforcement process, which is no small matter. They will avoid the stigma of a criminal conviction, with its knock-on impacts, which may be higher business insurance and a negative impact on being able to bid for business contracts.
These regulations are part of a package of better regulation work on civil sanctions. My department has consulted twice on the introduction of enforcement undertakings for environmental permitting. More recently, stakeholders have confirmed that they continue to support them.
To summarise, the benefits of introducing enforcement undertakings include: restitution for local communities and those affected, instead of court penalties; giving priority to renewed compliance and restoration of harm, with opportunities for co-operation between business and regulator and giving offenders the opportunity to address non-compliance; and freeing-up regulators’ time to focus on tougher and speedier exercise of criminal sanctions where they are needed, tackling those who wilfully and repeatedly flout the law or harm local communities. The proposal is very much in line with the Government’s better regulation agenda. No one will be made to have an enforcement undertaking, but offenders will be able to offer them for some environmental permitting offences. They will give priority to renewed compliance and restoration of what has been harmed, including restitution for local communities, instead of court penalties. I commend the regulations to the Committee.