Proposed Framework: Civil Standard VMPs and Automatic Fines
At the heart of the consultation are two new enforcement tools:
1. Variable Monetary Penalties (VMPs) to the Civil Standard of Proof
These would allow the EA to impose fines for minor or moderate environmental offences based on the civil standard—“on the balance of probabilities”—rather than the higher criminal threshold of “beyond reasonable doubt”, which is the case presently. This change is designed to enable quicker and more cost-effective enforcement for less severe breaches.
For new civil standard VMPs, secondary legislation is required to set a maximum penalty that can be imposed under the civil standard of proof (i.e. a cap). The EA propose that above this cap, the EA can impose criminal standard VMPs, and below this cap, the EA can impose civil standard VMPs. The consultation considers caps of £350,000 and £500,000. Procedural safeguards, including a water company’s right to representations and appeals, will be provided for.
2. Automatic Fixed Penalties
The current process for the EA to impose fixed monetary penalties (FMPs) for minor to moderate offending is considered resource intensive according to the EA, taking up time that could be used for other investigations or enforcement action. In addition to the high, criminal standard of proof, the FMP amount the EA can currently impose for certain water industry offences is set at just £300. The WSMA addressed this by introducing automatic penalties, where environmental regulators are placed under a duty to impose FMPs in specific circumstances. It is the EA’s intention for automatic penalties to also rely on the civil standard of proof.
The EA proposes to:
- Introduce civil standard FMP powers for permit and licence breaches, for the purposes of enabling the EA to impose automatic penalties; and
- For abstraction offences, replace existing criminal standard FMP powers where civil standard FMP powers would be available instead.
The EA is seeking to use automatic penalties in circumstances that are straightforward and easy to prove, so that they can be quickly imposed and without disproportionately lengthy investigations. As a result, the EA is proposing to make changes to water company permits and/or licence conditions to enable this. These include:
- introducing specific conditions which, if breached, would result in an automatic penalty; and
- standardising conditions across relevant permits or licences in areas that relate to automatic penalties that support the EA in identifying an offence.
These changes would be made by the secondary legislation (called ‘deemed conditions’), rather than by reviewing individual permits and/or licences.
The sorts of circumstances that could trigger an automatic penalty include:
- failure to report a significant pollution incident within 4 hours;
- failure to maintain Event Duration Monitor operation at or above 90% of a reporting year;
- failure to return monitoring data within specified time limits; and
- failure to have an accurate and reliable monitoring device in place to measure the quantity of water abstracted.
The penalty values proposed range from £5,000 to £10,000 for very large organisations (turnover of over £250m), which all water and sewerage companies in England would currently be classed as (according to the EA), and increasing to £20,000 where a company does not discharge liability following an initial notice of intention to issue a penalty (i.e. makes a payment to discharge liability). In practice, what this would mean is that, upon receiving a notice of intent, a water company would have 28 days to:
- make representations (such as comments or additional information) to the EA. The EA will review the proposed penalty based on their evaluation of any representations they receive and may reassess the penalty as necessary; and
- make a payment to discharge liability
If a company does not make such payment within 28 days and the EA proceeds to impose the penalty following representations, the EA will issue a final notice confirming the penalty and setting out appeal rights. At this final notice stage, the penalty payable would be doubled for failure to discharge liability at the initial notice stage.
Both these new penalties are intended to complement, not replace, existing enforcement mechanisms. Prosecutions and unlimited VMPs under the criminal standard will remain in place for serious or repeated offences.
Environment Secretary Emma Reynolds said the proposals form part of the government’s wider “Plan for Change” to clean up the country’s water systems:
