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Clarity on turnover needed for new waste offences regime

Environmental lawyers have warned that a new system of punishing environmental crime contains ambiguity on how the turnover of an organisation will be assessed to impose penalties.

The Sentencing Council, which advises judges and magistrates, has called for more severe penalties for the worst offenders linked to their turnover, so that “it should not be cheaper to offend than to take the appropriate precautions”.

If an offence involves ‘major adverse effects’ or high clean-up costs – larger companies could face fines of up to £3m from July.

Cairo Nickolls, an environment law specialist at law firm Irwin Mitchell, warned he expected “some level of ambiguity in relation to how the turnover of organisations will be established.”

“In particular, I am concerned about the potential difficulty arising from sentencing a company which is part of a group of companies.

“As well as turnover, the court can also take into account the organisation’s wider financial circumstances and whether any operational savings were made by committing the breach.”

He stressed businesses need to ensure that they understand the new sentencing framework.

Alison Messenger, an associate at law firm Eversheds, said companies can now expect much greater in depth scrutiny of their behaviour and their accounts, particularly where they have a previous record.

Messenger said: “Companies will be expected to provide comprehensive accounts and, if these are not provided, the courts are entitled to draw reasonable inferences as to the offender’s means.”

Firms could be ranked anywhere between ‘large organisations’ with a turnover of £50m or more and so liable to the heaviest fines, down to ‘micro-organisations’ whose turnover was less than £2m.

The guidelines also state that for where a company’s turnover “very greatly exceeds” the £50m limit courts may “move outside of the suggested range”.

The Environmental Services Association expressed support for the heavier penalties but called for “a transfer of environmental knowledge to the courts”, given a record of limited understanding of waste offences among the judiciary.

The Chartered Institution of Wastes Management said the Sentencing Council’s tougher guidance will improve understanding about the impact of environmental crime.

Deputy chief executive Chris Murphy said: “It provides judges and magistrates with the right tools to appropriately punish those who seek to profit from damaging the environment, our communities and the legitimate waste industry.”

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