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In the absence of fines: The role of negotiation in the enforcement of environmental law

By Dr Ole Pedersen, Reader in Environmental Law at Newcastle University Law School.

Much of the attention focusing on the post-Brexit environmental law has focused on the creation of a public authority able to take ‘proportionate enforcement action’ against the government as created by s 16(1)(d) of the European Union (Withdrawal) Act 2018 and whether such a body should have the powers to fine the government. Much less attention has been paid to the suggestion that a new environmental watchdog might be able to use so-called ‘environmental undertakings’. In the government’s recent consultation on environmental principles and governance after Brexit, the point is discussed in only two paragraphs (107-108). The lack of attention is puzzling because the government’s proposal is both novel and potentially transformative. But what is an ‘environmental undertaking’ and how does an undertaking work?

First, there is not actually anything called an ‘environmental undertaking’ at present in UK environmental law or policy. The clue is found in the consultation document itself when it refers (paragraph 71) to the undertakings ‘being similar to the […] domestic civil sanctions provisions’. What then is a civil sanction? A civil sanction is a new tool of enforcement introduced in UK environmental law through the Regulatory Enforcement and Sanctions Act 2008 intended to be used in place of criminal prosecutions. Among the civil sanctions introduced by the Act is what is called an enforcement undertaking.

An enforcement undertaking is a negotiated and written agreement between an offender who has committed a criminal offence and a government regulator such as the Environment Agency or Natural England. In an enforcement undertaking, the offender practically accepts guilt, proposes steps to remedy environmental harm and often also proposes to compensate third-parties who have suffered as a result of the environmental harm roughly to the tune of the amount that the offender has gained or saved by not complying with the law.

Undertakings have two clear and primary advantages compared to criminal law: they allow flexible enforcement and are very cost-effective. In terms of flexibility, undertakings allow enforcement action to be tailored to the precise circumstances of an offence and the actions of an offender. Often criminal prosecutions are seen as a rigid one-size-fits-all approach. In terms of cost-effectiveness, an undertaking is often much cheaper to negotiate compared to a criminal trial in the courts and often an undertaking allows the regulator to recoup costs which it would not be able to retrieve before the courts.

Importantly, an undertaking often facilitates restitution of environmental harm through either compensation or donations to third-parties such as local environmental organisation or charities. Enforcement undertakings moreover allow the offender to come forward and propose an undertaking to the regulatory agency on its own initiative. Though this might be portrayed as an offender ‘buying’ itself out of a criminal prosecution, the proactive potential of an undertaking allows honest and otherwise compliant businesses to alert the regulator to undetected offences, sharing responsibility for enforcement of the law between the offender and the regulatory agency.

So what role may enforcement undertakings play in post-Brexit UK environmental law? The first point to make is that enforcement undertakings are already used extensively. This is particularly true for the Environment Agency, which have accepted more than 250 undertakings since 2011 and secured more than £14 million in donations to environmental restoration and charitable courses. However, in its consultation document, the government suggests that a new body overseeing the government’s environmental law and policy might be able to make use of undertakings where the government is deemed to have failed in its legal responsibilities.

The suggested use of undertakings against the government is therefore different from the use of undertakings by the Environment Agency, which largely agrees to undertakings between businesses and the Agency (on only one occasion has the Agency entered into an undertaking with a local authority). Whether an undertaking is agreed as a result of an offender voluntarily coming forward or whether it is agreed as a result of regulatory investigations by an agency, the main incentive behind an undertaking is that it avoids prosecution under criminal law. But in the case of undertakings between a new environmental enforcement body and the government, this incentive is lacking because the government has made it clear that it is unlikely to create a regime in which the government will be subject to criminal fines where it is found to violate the law. In the absence of a right to take legal action against the government, the incentive structure of the undertaking breaks down.

In order for an undertaking to work optimally, the bargaining power between the two parties will have to be roughly equal. Under the government’s proposal, the balance of power is tipped in favour of the government. Moreover, enforcement undertakings work well in a regulatory setting where certain environmental offences cause little tangible and immediate environmental harm but where the only other enforcement option available to a regulator is a criminal sanction (as in the case of offences relating to the failure by businesses to register with a packaging waste compliance scheme).

That is, undertakings are most useful where offences are primarily regulatory and carry little moral blameworthiness. It is not clear what type of government acts or omissions the use of undertakings might cover, nor who would decide whether a given act or omission is suitable for the negotiation of an undertaking. Often concrete environmental harm is difficult to quantify where a government has failed in its legal obligations. Therefore, it is challenging to identify how a government would secure restitution and compensation for potential victims. For example, in the context of the government’s failings to comply with air pollution thresholds, who exactly would be the ones to benefit from an undertaking by the government and how exactly would adequate compensation be provided for a breach which is estimated to result in over 20,000 annual deaths?

Enforcement undertakings have become an important tool of enforcement of environmental law and have been used with some success by the Environment Agency. It does not, however, necessarily follow that enforcement undertakings will be a useful tool were they to be used by the new environmental watchdog against the government. The real place for undertakings in post-Brexit UK environmental law will likely be alongside a range of other enforcement and accountability tools, including judicial enforcement and even fines.

Photo: Delamere Forest (Cheshire, England), courtesy of  Wikipedia Commons.

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