Legal brief: Shopping for the best penalties

5th September 2013


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  • Waste ,
  • Business & Industry ,
  • Prosecution ,
  • Environment agencies



With enforcement of environmental regulation becoming increasingly devolved, Simon Colvin describes how organisations may soon be able to pick a jurisdiction

For some time, there have been concerns raised over the impact of devolution on environmental regulation. Many businesses operate across the boundaries of the devolved jurisdictions and being forced to deal with separate regulators and different controls is a headache. It also contradicts the approach being advocated by the UK government in its drive to simplify regulation for business.

However, it seems that the impact of devolution may not be all bad when it comes to environmental regulation. Devolution and the creation of separate regulators in each of the devolved jurisdictions have resulted in the prospect of “forum shopping” when it comes to environmental offences – that is, the ability to pick a jurisdiction to be tried in. One example of where this can be found is in the waste packaging regime.

Producer responsibility

The Packaging Waste Directive (94/62/EC) came into force on 31 December 1994. It was implemented in the UK on 31 July 1996 and can now be found in the form of the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 and the Producer Responsibility Obligations (Packaging Waste) Regulations (Northern Ireland) 2007 – together “the Regulations”.

The Regulations impose a regime that requires those producing packaging to finance its recovery and recycling. Different targets apply to different types of packaging. There are also requirements for packaging to meet certain minimum standards in terms of design and composition. The approach is based on the principle of “producer responsibility”.

A key aspect of the regime is the role of registered compliance schemes. Producers can join these schemes, which will then comply with the organisation’s packaging obligations on its behalf. The schemes do this by estimating the volumes of packaging their members will produce and then acquiring the required volumes of packaging recovery notes (PRNs) and packaging export recovery notes (PERNs) throughout the year.

However, problems in the glass PRN market earlier this year gave rise to the prospect of forum shopping. Irregularities in the market and the removal of two glass recycling companies led to a shortage of glass PRNs and a spike in their price.

Schemes that operate in the devolved jurisdictions have obligations on behalf of their members in each jurisdiction. PRNs and PERNs are not jurisdiction specific, so schemes are able to decide where they will surrender the recovery notes that they hold.

This means that in the event a scheme does not have the required number of PRNs/PERNs to satisfy obligations in each of the jurisdictions, and if it is unable to source any more, it could legitimately choose the jurisdictions in which it wanted to comply.

Different regulators

When deciding whether to comply in a jurisdiction, schemes are likely to consider the outcome of any enforcement action and the penalty options available to the regulators. Devolution means we now have four different regulators, the Environment Agency, Natural Resources Wales, the Scottish Environment Protection Agency (Sepa) and the Northern Ireland Environment Agency (NIEA).

Since January 2011, regulators in England and Wales have been able to apply civil sanctions in relation to environmental offences, but neither Sepa nor the NIEA have such an option.

The Scottish government is, however, undertaking a fundamental review of environmental regulation and it is possible that civil sanctions will form part of a new approach, but that will not happen for a number of years.

Also, with new sentencing guidelines for environmental offences in England and Wales being finalised, we are starting to see some significant differences in the likely level of penalties and the sentencing options available across the UK.

Once the courts in England and Wales start to follow the new guidance, which is expected to be introduced in spring 2014, it is likely that courts in Scotland will follow suit in elevating the levels of fines for environmental offences. However, this will probably take time to filter through without any specific directions or requirements from the devolved administration in Edinburgh.

For now, if you were in charge of a producer responsibility scheme and could opt to breach the regulations in England and enter into an enforcement undertaking with the Environment Agency, that would be a much more attractive option than facing a criminal prosecution in Scotland or Northern Ireland.

It will be interesting to see the extent forum shopping plays in the future, as devolution and a divergence in approach to environmental regulation gather pace.

Glass PRN fraud

In July, Swansea Crown Court jailed the directors of Nationwide Recycling Limited for four years each after they admitted fraudulently issuing glass packaging recovery notes (PRNs) during 2009 and 2010.

Andrew Thomas and Paul Thomas used registration numbers from other vehicles, including a Harley Davidson motorcycle, to inflate the number of lorries delivering waste glass to the Llandarcy-based recycling firm so they could sell more PRN certificates.

The court heard that Nationwide Recycling benefited financially from the fraud by £1.56 million. Undercover surveillance revealed that in just one month in 2009, the company fraudulently claimed £19,000 worth of PRNs.

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