The Environment Agency (EA) is coming down hard on businesses for non-compliance against current regulations in place. In 2017-2018, prosecutions were made against 22 top officers of companies with fines ranging between thousands and millions of pounds. Whilst the number of prosecutions is falling, the fine amount is rising rapidly and non-compliance with the EA could put a serious financial strain on you and your business.
Additionally, the financial cost may not just end at any fines issued by the EA. If your prosecution has resulted in fallen shares or your entity has entered into administration, this could also trigger claims made by investors against your directors and officers.
What are the consequences?
One of the biggest fines issued to date was made to a water firm in London which was charged an eye-watering £20.3m from the result of huge sewage leaks into the River Thames. It had a serious impact on wildlife, residents and surrounding farmers. The company was accused of not taking the appropriate precautions in order to save money, thus committing serious breaches and negligence.
Alongside any financial repercussions, breaches could also result in a prison sentence if they’re made as a result of illegal operations. This was demonstrated in a case where mixed commercial and construction/demolition waste was being stored illegally by a company, against frequent advice issued by EA officers. The director was eventually sentenced to 4 months in prison, suspended for 2 years and issued a fine of £5,592.
Fines can be charged for a number of things, from not obtaining the necessary permit to breaching regulations set down by the agency and directly ignoring advice provided by officers. In Leicester, a textile firm was ordered to pay a fine of £40,000 and costs of £19,084 alongside a £175 victim surcharge due to operating their business illegally by failing to obtain the necessary permit.
Why are the laws in place?
EA laws are in place to protect the environment, surrounding wildlife, the public and local businesses from the effects of unnecessary pollutants and aims to reduce pollution as a whole across Europe. Industries in areas such as fuel and power, chemicals, waste management and metal production are particularly subject to regulations governed by the Pollution Prevention and Control Act 1999 and the Environmental Permitting Regulations 2008.
The best way to avoid getting caught out is to ensure your business complies with the current regulations. EA officers can provide advice on making your company compliant and there’s plenty of information available online.
If you want to protect your business, especially your directors and officers, against the financial repercussions of an EA court case, contact the Chartered brokers at Hine on 0161 438 0000 to discuss how a directors and officers policy can help you.