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Could Large Waste Companies Face Higher Fines for Pollution?

Tuesday, June 9, 2015

Large waste management firms that commit pollution offences could be hit with much higher fines under new sentencing guidelines.  Companies have been warned that future fines could be proportionate to the size of their businesses, meaning larger businesses could face significantly higher fines should they be responsible for pollution or damage to the environment.  

The warnings comes from the Environment Agency in the wake of the Court of Appeal decision in early June that ruled against Thames Water Utilities and upheld a £250,000 for the pollution of a nature reserve.   In this incident, Thames Water allowed untreated sewage to enter a brook which flows through a National Trust nature reserve within an area of Outstanding Natural Beauty and a Site of Special Scientific Interest (SSSI).

Thames Water had initially appealed against the fine, but the Court of Appeal ruled that the fine should stand, and added that it would have also upheld a ‘substantially higher fine in this case’.

The ruling by the Court is significant for the waste sector as it was the first to consider new sentencing guidelines that were issued by the Sentencing Council in July 2014.  The guidelines – Sentencing Council Guideline for Environmental Offences – apply to individuals and organisations that commit certain offences, including the unauthorised or harmful deposit, treatment or disposal of waste and illegal discharges to air, land and water.

The guidelines require that any fines should consider the means of company offenders and, where a company can afford to pay more, that fine should be increased.  This has a significant impact on larger companies, as well as those with higher turnovers, that could be considered to ‘afford to pay more’, as they could see themselves being handed much higher fines than previously ordered.

The Court has also stated that in worst cases, where significant pollution offences have been committed or for repeat offenders, fines could be in excess of £100 million, or 100% of a large company’s pre-tax profit.

In the guidelines a large company is defined as any organisation with a turnover of over £50 million. There is also a category for very large companies, but no definition on turnover is provided.

The new guidelines are likely to cause some concern for large waste companies, although it is hoped that they will ultimately help reduce the number of pollution incidents in the UK and drive improved environmental management and pollution prevention practices across the waste sector.

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