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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 126-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE Environmental Audit Committee (Environmental Crime SUB COMMITTEE) Environmental Crime and the Courts
Thursday 22 January 2004 MR NIC NAVARRO, MR DAVID STOTT, MS ANNE BROSNAN and MR ARWYN JONES Evidence heard in Public Questions 1 - 88
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee on Thursday 22 January 2004 Members present Mr Peter Ainsworth, in the Chair Mr Colin Challen Mrs Helen Clark Sue Doughty Paul Flynn Mr Simon Thomas ________________ Memorandum submitted by the Environment Agency Witnesses: Mr Nic Navarro, Director of Legal Services, Mr David Stott, Chief Prosecutor, Ms Anne Brosnan, Principal Solicitor, the Environment Agency, and Mr Arwyn Jones, Process Manager (Enforcement), examined. Q1 Chairman: Good morning. Thank you very much for coming along. Thank you also for your written evidence which we received and read with interest. Do you have any opening remarks you would like to begin with? Mr Navarro: I think I would like to welcome the interest which the Committee is showing in environmental crime and introduce my team. I apologise, in a sense, for coming with rather a large number of people - mob handed - but I think that reflects the breadth of the subject, the fact that we do take this seriously and it is very good experience to be able to appear before the Committee. May I introduce David Stott who is the chief prosecutor for the Environmental Agency. He is an ex-CPS Crown prosecutor and he sits as a stipendiary magistrate. Anne Brosnan is deputy chief prosecutor and has long experience of prosecutions with the Agency and the NRA. Arwyn Jones is from the operational side of the Agency and is head of the Agency's enforcement and prosecution process team. Chairman: Thank you very much indeed. You have a good team and we look forward to hearing the answers to our initial questions. This is, of course, our first evidence session in this inquiry. Q2 Sue Doughty: I think the first question is very much a matter of us getting our head around the problems and the challenges that we are faced with in this whole field of crime, punishment and justice as regards the environment. What do you believe are the main aims of the criminal justice system in terms of environmental and sustainable development? Mr Navarro: I think the important first point is how broad environmental crime is and how many players there are involved. We have submitted to the Committee a diagram illustrating that graphically. Mr Stott: Environmental crime, as Mr Navarro has said, is a very wide spectrum of offending. There are a lot of other organisations who have to deal with it, but in terms of what we are trying to achieve - like with any other criminal offence - is punishment, deterrent, rehabilitation so far as we can get it. As regards the sustainability aspect, that is to do with the environmental impacts so deterrents to try to prevent any further to the environment by the penalties and methods that we can bring to bear. Environmental crime as such falls into the sphere of criminal courts - the whole system - and that is where we start to run into problems because it is different to deal with than ordinary mainstream crime assaults - burglary, criminal damage, et cetera - and that is where, I suspect, your further questions will start to probe. In handling environmental crime, like any other crime, we try to punish, to deter and to rehabilitate. Q3 Sue Doughty: How far do you actually believe that the criminal justice system is effective in achieving this? Mr Stott: Effective to an extent, but not wholly effective. It depends - and this is the problem - on the span of offenders; they range from the individual (fly tipper, dumper of black plastic bags) to the multi-national. It is such a wide span of offenders which makes it different to the normal conventional type of crime that is dealt with. In dealing with the individual, the smaller offender, I think it is effective and I think the powers are appropriate if they are used properly - which we do not think they are - but when you get outside that into corporations or large companies we think there is a problem. Q4 Sue Doughty: Do you feel that people who commit environmental crimes really consider themselves as criminals? Thinking about people's view of it - not only individuals but corporate environmental crime and individuals who work for corporates - the corollary of that is how far do you think those in the criminal justice system take seriously environmental crime, so have we got a problem both with offenders and those dealing with offenders about the gravity? Mr Stott: I think we probably have. I think individuals - company directors or individual fly tippers - who are brought into the system because we prosecute inevitably do see themselves as criminals because of the process that we bring them into before the courts, with the sentencing and all the rest of it. Again, it is this element of the corporate bodies that we prosecute and licence breachers and I think they look at it differently. There are undoubtedly two stages. Q5 Sue Doughty: How about the actual justice system and how seriously they actually take environmental crime in the courts - the lawyers, the magistrates, the judges? What is your view about that? Do they take it as seriously as ordinary burglary, for example, or other sorts of crimes? Mr Navarro: I think the difficult is the infrequency - certainly so far as magistrates and judges are concerned - with which they actually come into contact with environmental crime. We know on average that it is only once in seven years that a magistrate will have an environmental case. I think that is probably at the heart of some of the problems. Because they do not have the experience of those cases and they do not necessarily understand the real impacts and the seriousness of the cases, they find it very difficult therefore to sentence. We have certainly welcomed the guidance which has been provided to magistrates and we hope that is going to make a difference. We think there are opportunities in terms of specialisation of magistrates and the judiciary to gain experience to be able to be better trained and we think that would have the effect of being able to take environmental crime more seriously. Mr Stott: On the figures themselves - which I think are in the submissions - there are 28,000 members of the Magistrates' Association and we prosecute between 700 and 800 cases a year. The spread is very thin. There is no concentrated mass of cases in either location or before the same benches. Q6 Sue Doughty: We will be looking a little bit more about bringing offenders to prosecution. There is a little bit of an apples and oranges problem here in comparing environmental crime with other criminal activity. How far do you think there is a problem about the gravity of the situation and does environmental crime matter at all? How important is it? Mr Navarro: We certainly seek to lead evidence on the impact of environmental crime and the aggravating factors that the courts should take into account. However, I think it is true that we do sometimes have the perception - because of the inconsistency in sentencing, particularly in the crown courts - that judges who are sitting day after day dealing with normal crime (shall we say) find it difficult to know where to pitch environmental crime in that spectrum. That is why we are suggesting - and have pressed for - guidelines which would give assistance to the courts to give them a starting point. Mr Stott: I think there is a change in culture and awareness of environmental issues within the courts generally. Annex nine shows the higher types of penalties that have been imposed and are being imposed. I think the message is getting through. It is like turning a ship round; it filters through the system. We are doing a lot of training of magistrates at a regional level. They are very keen and interested but they then go away after the training and do not see a case for a very long time. That is the problem. Q7 Mr Thomas: If we look at the Old Bailey we see the scales of justice there. On the one side we might put the idea of the cost that you have of an Environmental Agency prosecuting and collecting evidence, everything you do to enforce environmental crime; on the other side of the scales we may put the fines, punishments and so forth that are metered out. Do you think those scales actually balance or do you think it costs an awful lot more to deal with environmental crime than we get back from those who are criminals? Mr Navarro: We do not, of course, know how much environmental crime there is overall so we are only looking probably at the tip of the iceberg. Mr Jones: Broadly we spend about £12 million a year on enforcement activity, that activity which directly relates to prosecutions, cautions and elements of notices. That is about three per cent of our regulatory budget that we spend on that. On the other side, the fines are just one way of penalising or punishing, and building on the earlier evidence and I think there is a need and scope for a better understanding of the motivators and de-motivators of those who are committing environmental crime. It may well be that fines are not always the best way of punishing and de-motivating people from committing offences at the lower end of offending. I do not necessarily think there is a strict comparison on that scale. We know DEFRA are very keen to help in actually understanding that better. For example, if a skip is illegally disposing waste in an area a better punishment for them might be some form of community punishment which makes them clear up the type of mess they have just created rather than necessarily a fine. We need to understand better what motivates people to commit and what de-motivates them from committing environmental crime. Q8 Mr Thomas: You say it is about three per cent of your regulatory budget. There must be an awful lot of companies and individuals out there who are doing their utmost to follow the rules, follow the regulations. Skips is a very good example of where you will have a company which is doing the right thing, therefore has to charge the customer the right amount, and another cowboy down the road that will be cheaper, getting more business and just disposing of the rubbish in an inappropriate manner. How much pressure do you come under from other companies that you are actually regulating to deal with these bad apples? Mr Jones: I think it is fair to say that we do come under pressure and we do respond to it. We are trying to transform the way that we undertake our enforcement actions into a more intelligence led approach, so trying to pull together pieces of jigsaw that say it is company X or person B who we really need to be focussing on and concentrating on, but particularly working partners in the police and local authorities to help us put those pieces of the jigsaw together. We do respond to that and certainly that is the way we want to target our efforts in the future onto those who are really abusing. We had a very good example of that recently with the tyres campaign where the tyre industry were saying that those who actually want to follow the rules and play the came correctly are being undermined by those who are deliberately fly tipping tyres, and by working with DTI and the Government we were able to fund a campaign nationally to both educate and increase awareness of how tyres should be properly disposed of. We took a number of prosecutions to clamp down on those who were abusing and illegally dumping. So we do respond to that. I think we would like to be able to do more but we need to forge stronger links and better systems with some of our partners as well. Mr Navarro: I think the competitiveness aspects of environmental crime are worth looking at because at the moment we have to fund our enforcement effort from GIA; it is not paid for generally by charge payers. If one does look at it as ensuring that legitimate businesses are not undercut by illegitimate operations I think there is justification for the legitimate businesses to contribute towards the enforcement effort. As you know, we have had GIAs not being adjusted by inflation so the amount of money available for enforcement is under pressure. If we can review the charges and have a contribution from all the charge payers towards enforcement we could do more. Q9 Mr Thomas: There would be a huge expectation on you then to actually up your prosecution and success rate if that were to happen. Mr Stott: Yes, but there is a big area there, the unregulated side of things, especially in the waste disposal of construction and waste and especially round metropolitan areas like London. There is a big problem there that we need to address; it is not an easy problem. Q10 Mr Thomas: Staying with prosecution rates, are you able to compare your success rate - if I can put it that way - with other prosecuting authorities. We have this diagram of where you lie; we have DEFRA and local authorities, customs and excise and so forth who also may prosecute for environmental crime. Do you ever lean across and compare your success with their rates? Mr Navarro: We certainly keep statistics about our success rate. Ms Brosnan: Our success rate is very good, particularly in waste and water quality prosecutions. It is very difficult to read across to other prosecuting bodies because the Environment Agency prosecutes 90 per cent of environmental crime. Q11 Mr Thomas: So even though on this diagram you look like ten per cent, you are doing 90 per cent of prosecutions. Ms Brosnan: In terms of prosecutions, yes we are. It is very difficult to correlate exactly across to other bodies because we keep our statistics in different ways. However, our success rate is particularly good. Q12 Mr Thomas: Is that, in your opinion, because other bodies have a very different approach to prosecution? Mr Stott: No, we follow the same criteria and guidelines as all prosecuting bodies which is the Attorney General's guidelines. In terms of comparison, for example with the CPS, it is a false comparison. CPS are dealing with thousands of cases a year; we are not, nothing like it. The best comparator is probably the health and safety executive. They take around the same annual number of cases as us. I do not know what their figures are, but on our figures on contested cases we lose around five per cent. So you could say our success rate is 95 per cent. I suspect it will be very comparable with health and safety because, as I say, we are following the same criteria of evidential sufficiency and public interest. Q13 Chairman: You have just said that you were responsible for 90 per cent of the cases. Mr Stott: Environmental crime. Q14 Chairman: So your reference just then to customs and excise doing roughly the same amount of prosecutions ... Mr Stott: I do beg your pardon. Crown Prosecution Service, who are not on our chart, as a success rate comparator to answer the question: how many do the Crown Prosecution Service lose, for instance, compared with how many do we lose, I think they lose far more because their scale of case load is massive compared with ours; it is in the multiple thousands. Q15 Mr Thomas: Do you only prosecute those cases that you are almost sure you will win? Mr Stott: No. The guidelines are: is there a realistic prospect of conviction on the evidence that you have? Can you assess it in terms of: is it more likely than not realistically that you would obtain a conviction? If the answer is yes, you take it; if the answer is no, you do not. Then, is it in the public interest here, is it right, is it worth spending the money to bring this case? Q16 Mr Thomas: Just to go back a little bit, does public interest include the interest of companies who are legitimately trading in that field and need to protect their business? Ms Brosnan: Yes, it does. Can I make the point that when we prosecute we do routinely bring to the attention of the court the saving that would have been made by the illegal operator in not obtaining the licence and the fact that the illegal activity undermines the regulated industry who are paying those fees and are abiding by the terms of their licences. Q17 Mr Thomas: We have had some evidence - for example from the Law Society - that you and other prosecutors in the field of environmental crime may lack some of the necessary powers in dealing with offenders. Would you agree with that evidence? Can you identify where you would like to have different or more powers to take forward other prosecutions? Mr Navarro: I think on the whole we do consider our powers reasonably comprehensive. We do have quite extensive powers. We have submitted evidence about additional powers. Mr Stott: Yes, annex eight is a truncated list of some elements that we would like to see changed. We cannot stop vehicles, for instance; we cannot stop the lorry that is carrying something suspicious without police involvement. We have no powers of detention other than very limited for poaching between nightfall and dawn. During the hours of night our bailiffs are designated as constables. Q18 Chairman: How many cases of poaching do you deal with? Mr Stott: About fifty a year, but please do not underestimate poaching. Poaching is a very serious, lucrative and violent vicious area of work. There is a lot of risk attached to the bailiff because the gangs are very highly organised; there is a lot of money in it. We have to be very careful because there is a considerable health and safety aspect for the officers involved. Q19 Mr Thomas: In our inquiry we obviously need to look at the other authorities and how they prosecute. In terms of your own staff, can you say something about the training that your staff receive and whether you are convinced that you always have the right staff in the right place, at the right time, with the right qualities and training to convince that bench of magistrates or to take forward the prosecution at the right level? You are a large Agency within England and Wales, are you convinced that all your staff have a consistency of approach in that regard? Mr Navarro: Can we distinguish the operational staff, the technical staff whom Arwyn can talk about, and then we can speak about the training of lawyers. Mr Jones: Certainly in terms of the operational staff we responded to feedback some four years ago and had implemented in the Agency a warranted officers scheme which requires our officers to go through a scheme of competency training which is logged, tracked and reviewed periodically. For our fishery staff that is reviewed annually; for our environment protection staff that is reviewed every three years. Quite recently we put in place the means to actually help staff locally check with their line managers that those competencies are still up to date and also to make more accessible the training materials. We are using new technology such as on-line assessments. In addition to that we have a very comprehensive induction scheme now where we tend to batch recruit new Environmental Agency officers into the Agency and they go through a six month induction programme before they are allowed to actually join a team going forward. I think we feel we have much stronger processes in place now to get the training right and we have actually got a supporting suite that is there through the working life of an environment officer to keep their skills refreshed but also to update it because we ever new burdens of duty coming at us which bring in new enforcement requirements. The Reservoirs Act is coming out and we shall have some slightly different enforcement angles. Emissions trading will bring in some new enforcement skills. We need to keep up to date with those as well as the more traditional field activities. Q20 Mr Thomas: When was the training of warranted officers introduced into the Environmental Agency? Mr Jones: In 2000. The three year review for our EP officers is actually in play now. It does not happen on day one, there is a six month period whilst that is happening. Our fishery staff go through an annual review to check that their competencies are still up to date before they have their warrant renewed. Mr Navarro: There are three strands of training and experience in terms of calibre of the staff. There is the technical capability as scientists on the technical side. There is their industrial experience: have they got experience of how it actually operates? Then there is their experience as criminal investigators. Obviously they do not all need to have the same sort of training as the criminal investigators, but by a degree of specialisation we can improve and hone those skills. I have to say that we have very dedicated and enthusiastic staff. We have got these programmes, with secondments to industry as well, to raise the general standard of staff over time. Ms Brosnan: You mentioned the Law Society's evidence earlier. There is a slight mistake that they have made in the submission they have made. They say that our prosecutions are dependent on convincing the Crown Prosecution Service on the likelihood of conviction. That is not right; we make our own decisions and we bring our own prosecutions. Mr Stott: What happens is that the potential offence is identified, the case file put together by the officer with guidance. That case file comes across into the legal section. The presentation of that file in court is critical for obvious reasons. All the elements have to be presented. In 2000 we developed and devised an advocacy assessment programme whereby we have our own 40 advocates spread across eight regions. The senior lawyer in ever region was to assess those going into court and to go into court and have a look at them. We took the documentation from the Crown Prosecution Service Inspectorate and adapted it for our purposes so we follow that documentation material. That is what we have done to try to raise the game. Q21 Mr Thomas: A lot seems to have happened since 2000 so that would be welcome, I am sure, by this Committee. From the Law Society's point of view are there any material differences between the way the Crown Prosecution Service would approach a matter like this and the way you in fact do so? Mr Stott: No. The evidence is the same. The evidential requirements are quite the same and the techniques of advocacy are quite the same; they are common. Unless you have covered those grounds, it does not matter what sort of offence you are dealing with - environmental or ordinary crime - you are not going to get anywhere. We have to have the basics covered by all our advocates. Mr Navarro: If we compare the experience of SEEFA where they rely on procreative fiscals to actually take prosecution decisions and the system in England and Wales where the Agency is able to take the decisions, the evidence, I think, is quite strong that we are able to take more decisions than we would if we had to rely on the Crown Prosecution Service who would then - in the same way as the judges - be looking at the offences in relation to ordinary crime. They may not realise the significance of them as we do. Q22 Mr Challen: In your memorandum you say that the sentencing powers are broadly sufficient but the sentences handed out are not. Why do you think that is? Mr Navarro: It is important to realise that because of the spread of offenders there is the need for flexibility at the one end for the pensioner who leaves their bag of grass cuttings outside the civic amenity site because it is closed, all the way through to the organised fly tipping and organised criminals who are making great sums of money from their activities. There is a very broad range of offences which the courts have to deal with, but we come back, I think to the lack of relative experience of individual magistrates in dealing with these sorts of offences. Q23 Chairman: Before you go on, can we just establish that the pensioner who leaves his bag of grass cuttings outside the site would not be prosecuted. Mr Navarro: No, of course he would not. Ms Brosnan: The usual statutory maximum for an offence in the magistrates' court is £5000. That is the normal maximum that magistrates would have to deal with. In most environmental offences that maximum is increased to £20,000 so magistrates have sentencing powers for our offences - also for health and safety offences - but they are perhaps not used to dealing with them. We have put a lot of effort into the training of magistrates - we have addressed magistrates at their annual general meeting; we have assisted them in drafting guidance and training manuals for justices - so that they feel more comfortable with the sentencing powers. The Lord Chancellor has suggested to them that they should accustom themselves to imposing much greater penalties than they are used to, but I think they have perhaps taken a cautious approach to sentencing with these extended penalties because they are perhaps uncomfortable in using them rather than saying that they do not want to impose large fines for these types of offences. Q24 Mr Challen: Have you picked up any regional variations in sentencing or is it fairly uniform across the country? Mr Navarro: The magistrates have now had the benefit of the guidance which was provided to them in 2002 which we certainly welcome. It may be too soon to say what the effects of that are. We would hope for an improvement because they have guidance on entry levels. We think there are variations. The report that was submitted to the Committee picked up quite wide regional variations in sentencing. Mr Stott: It is hard to explain why that is. As I said, we are training magistrates throughout the country but we cannot cover all of them. Q25 Mr Challen: Would it reflect the number of cases taken to court, for example? Are some regions more precocious than others in doing that? Mr Stott: In general terms the weight of prosecution is in the north-east, north-west - where the old industry is - and also down here in what we call the Thames region. That is where the bulk of the case load is found. It is generally waste featured cases. Mr Navarro: I think in the report submitted to the Committee there was a sort of perverse relationship between the large number of prosecutions generally and the size of the fine which tended to be lower. It certainly merits more investigation. Q26 Mr Challen: Looking at the guidance, has there been any justification by either the courts or the Judicial Studies Board as to why they have not provided more guidance, other than to say that cases should be decided on their merits? Mr Stott: The Judicial Studies Board covers the training in particular of the Crown Court of judges as opposed to the Magistrates Association which covers the magistrates' level. We have not yet been able to get a slot in the Judicial Studies Board training of judges. Bear in mind that their number of cases is very small compared to the number that the magistrates are dealing with. They have a lot of training to cover and this year and the year to come they will have even more with the Criminal Justice Act and all the new changes coming in. It is not easy to get ourselves a slot. Q27 Mr Challen: What is your view on the size of the penalties metered out to offenders? Judging by the size of their organisation should large companies suffer larger penalties? Should it be according to the ability to pay, do you think? Mr Navarro: I think if there was specialisation that would enable more training to be given to that cadres of environmental judges or environmental magistrates because we are competing with very significant changes in the criminal justice system each year and there are only scarce resources, there are only a number of training days which magistrates have available, so it is not surprising that we cannot train them all up. Mr Stott: If you nominated individual magistrates - maybe two for each court area - and perhaps a couple of judges on each circuit to deal with this and maybe health and safety cases together you would have a chance of a form of specialism at no cost, without going so far as to suggest an environmental court which would have bureaucracy attached to it and would cost. I think that would be worth considering. We are beginning to see the serious offences beginning to attract more significant penalties, although there is an issue about the size of those penalties if we are talking about very large companies and whether - even at the quarter of a million mark - they are significant. Q28 Mr Challen: Should we go for penalty fares? Mr Stott: Yes. Q29 Mr Challen: Or is it simply a sort of slap on the wrist? Mr Stott: The magistrates' guidance says that the aim of their sentence should be for any fine to have equal impact on the rich or poor. They say this is true of companies as well as individuals. It has been difficult for magistrates to sentence companies without possibly seeing the accounts and seeing what money we are talking about in terms of turnover in profit. There has been a recent case - the case of Howell - which suggested that if companies are prosecuted, when they fall to be sentenced by the courts they should produce their accounts to the court so that the court can look at the profitability of the company and try to make the fine have an equal impact on the company as it possibly might on the individual. Q30 Mr Challen: I picked up from your memo that serious offences are attracting appropriately large penalties despite variations on appeal. It appears that those appeals are often successful so is this down to the legal team of a large corporation that can bamboozle the appeal court judges? Or do the appeal court judges feel that really this is not a terribly serious matter in the first place? Mr Stott: I do not think it is that. I think the problem is more fundamental than that. This is the point really, there is no yardstick, no guidance that has been issued by the court of appeal - like in other types - as to where a sentencing court should start to look in terms of the amount of the fine. When I sit - and anybody else who is a magistrate here - I know that for an individual offender the gravity of the offence is assessed, there is documentation and then you look at the income and you then give a guidance only - it is not a directive - matching one with the other. There is nothing like that for companies. We have asked the court of appeal twice to consider possibly issuing some form of guidance to those sentencing companies against the offences - against the gravity of the waste disposal or the pollution of the river or whatever - to give courts an indication of what bracket the fine should fall in to. Is it based on turnover? Is it based on profitability? What is it based on? They have shied away from doing that and that is the problem. Q31 Mr Challen: Do any of these cases go to a jury trial and, if so, what kind of result does that produce? I am thinking that there is a parallel here between this and libel cases where guidelines have been introduced on how much you can impose. Mr Stott: That is right. There are very few jury trials. The majority will plead at Crown Court to get it over quickly. It is the adverse publicity aspect that they do not want. Ms Brosnan: The judge sentences in our cases. I think juries fix libel damages whereas the judge would sentence in our cases. And they are led by tariffs. Q32 Chairman: Going back to the training of magistrates and judges you were talking about, given the plethora of criminal justice legislation - I have lost track of the number of Home Office bills we have had in the last five years - is it not always the case that these environmental issues are going to come pretty low down on the pecking order? What realistic chance do you think there is of getting the dedicated training that you have been talking about? Mr Stott: Environmental crime has risen on the political agenda. Three years ago the Sentencing Advisory Panel was created. It came in 1998/99 to give advice to the court of appeal as to how to sentence all types of crime. The first topic of its remit - the first topic of a new body like that - was environmental crime. That, to us, was an indication that environmental crime is of significance. Unfortunately, they gave their guidance, they gave their criteria and they passed it across to the court of appeal. We hoped that the case of Milfordhaven (which was the Sea Empress case where thousands of tons of crude were spilt on the Welsh coast) was to be the vehicle that that court of appeal would use to issue guidelines. The then Lord Chief Justice felt that there was no need for any guidance to be given so that opportunity went. However, that was the first topic of a new body. Q33 Chairman: Did you have a go at the time of the Anglia Water? Ms Brosnan: We did, yes. Q34 Chairman: With no success. Ms Brosnan: The court of appeal said they wished to see each case decided on its merits, on the individual facts of each case. Going back to your point about training, we do offer training to magistrates, evening sessions for various benches. We find they pick up on it, they are very interested and we get a very good turnout, but we do find that we are competing with sessions on drugs for example, and they are more likely to come across drugs offences than environmental offences. Q35 Mrs Clark: If we can look at the sort of sentences that are actually metered out, certainly in your evidence you seem to imply that for certain water companies - we have just mentioned Anglia - and some of the larger waste management operators, the actual length of sentence or type of sentence does not really seem to be having the right sort of deterrent. In your view should there be a sort of base line, average sentence that you would like to see and that things should not fall below? Mr Navarro: I do think the water companies are increasingly taking their environmental record very seriously. Q36 Mrs Clark: Is it not rather patchy, though? Mr Navarro: Yes, it is perhaps rather patchy and we have led evidence for alternatives which may be more appropriate for those large corporations. Ms Brosnan: Water companies are concerned about their professional reputation and so the number of offences they incur, the number of convictions they occur, the cumulative penalties, their respective positions in relation to each other do now concern them and they do try to avoid offending to try to preserve their professional reputations. OFWAT, the financial regulator, uses the breaches of their licences to record their performance as a statistical measure now for their cost pass through factor. That is of extreme concern to them because if they are seen as a poor performer then they may not be able to recover the same funds as another water company. Q37 Mrs Clark: What role does, for example, Water UK, play in setting standards and monitoring throughout the companies? Mr Navarro: They do look at the performance measures of the water companies. In general it is all part of a complex picture of levers that we are trying to pull but we do give in Spotlight business performance every year and that has now become an established date on the calendar when we try to present the good and the poor performers. That is becoming of increasing interest both to the business community and to the investment community as well because increasingly - again in the interest of the city - they can spot that well managed companies that do not pollute are more likely to have a better financial performance. All those pressures are increasing to drive company performance. Q38 Mrs Clark: Is it not fair to say, though, that some of the culprits do it again and again and again? Is this because the sentences really are not high enough or because they know they can get away with it and just will not get nicked? Mr Navarro: We do nick them. We do detect those incidents and we have a good record on that and there may well be an element that companies get accustomed to a certain level of tolerance of fines and the fines are just not sufficient to really register with the boardroom. As we say, we are showing evidence of higher fines for the serious and persistent offenders. Q39 Mrs Clark: I would have thought that being named and shamed would be more of an off-putter than length of sentence, particularly if it gets on the Today programme or The Daily Mail or something like that. I can remember some environmental culprits who have achieved just that, so to speak. Mr Navarro: That is true. Naming and shaming is certainly effective, but of course we have to take the cases, we have to get the fines before we can name and shame. Mr Jones: In the waste management industry there are provisions round fit and proper persons. Last year we introduced a more rigourous policy about how we assess post-conviction status of somebody continuing to be a fit and proper person. Following some big cases we are now putting in quite a rigorous process of assessing whether the whole of that waste management licence is still fit and proper to hold that licence and we have powers there to either suspend or revoke the licence as a result of that. That is specific to those who hold waste management licences. It will not deal with those who are fly tipping or in other industry sectors. That is another quite powerful tool that we are making more use of than we have in the past. Q40 Mr Thomas: Do you have any powers at all, short of prosecution, of naming companies that are, in your view, not complying fully with regulations? Mr Navarro: We do issue press releases when we serve enforcement notices on regulated companies to secure their compliance with their obligations, so there is that process. However, we cannot just issue press releases of people whom we have a poor opinion of. The public register shows the company's record and we do have operator performance and appraisal systems which rank the performance of the companies and that, again, is an indication of their performance in which investors take an interest. It is interesting that we now have no band E performers, the lowest performers. For regulated industry we are raising the standard. Q41 Mr Thomas: You mentioned your Spotlight publication as well, and we talked about investment and the city. Is there any evidence that a series of prosecutions - whether the fines are severe or not - is having an effect on shareholder price and therefore is having an effect back to the boardroom through the shareholders themselves? Are you able to trace that at all, or are shareholders not interested in environmental crime done by the companies they have holdings in? Mr Navarro: I think that is what we are working on, to raise awareness so it does feedback, may be not directly to individual shareholders but to the institutional investors who will take into account environmental performance as an indication of general company standard of management, the standard of investment, the attitude of the company and the sustainability of the company. We are trying to address all of those levers and I think with some success. There is no doubt that a series of cases will drive investment by the company. Take the water industry, we know that an order to comply summons them, and this is to be taken into account; it is not just the fine. Very often the major expense of the company is the investment - millions of pounds sometimes - in order to comply with their licensed obligations. Mr Stott: We have had a considerable success recently with a very high fine on a waste company and we know that as a direct result of that its clients (who are major) are looking very closely at whether or not they should continue to feed their supplies to that company. I think it is going to have a dramatic effect on the company. Q42 Chairman: Can I explore further the question of remediation? To what extent do the courts have the ability to instruct people found guilty of environmental crime to repair the damage? Mr Navarro: I think it is important to realise that we do have powers which are not dependent upon convictions in order to require companies to clean up after pollution incidents. Mr Stott: I think I am right in saying that in terms of water legislation there is power after conviction to order clean up; under water legislation, not under waste. There is a gap there. Q43 Chairman: What about oil? Ms Brosnan: Oil is usually found in water offences so it would normally be covered by water. Mr Stott: But there is a gap there with waste. As Mr Navarro said, we have the power to serve a notice for them to remove it but the court has no power on conviction of a waste offence to order remediation. If there has been damage, loss or injury caused to a victim it can order compensation for that person, but it cannot order remediation. Q44 Chairman: Do you think it should be able to? Mr Stott: I think it would be very helpful if it could, yes. Q45 Chairman: What about the money that is raised by way of fines? The remainder of that goes back into the central coffer, does it not? Mr Navarro: Yes, it does. Q46 Chairman: Do you think there is a case for keeping it within the environment so to speak, and applying it to solve either the specific environmental problem that has led to the case or other environmental issues? Mr Navarro: We do think there is a case and we will be making submission to the Treasury to that effect. We are talking about three and half to four million pounds a year that at the moment goes directly to the Treasury and would be available - if the Agency were to be able to retain it - to go increasing our enforcement effort (which, as I said, is not funded, apart from GIAs, so it might plug that gap) or on projects to benefit the environment which we would not otherwise be able to do. Q47 Chairman: That might include remediation measures as well, might it? Mr Navarro: Yes, although on remediation measures I think if the offender has the means and is still in existence, then the polluter should pay so it should fall on the company or the offender who has caused the pollution. We would not seek to spread that, I think, to the general community. The polluter should pay. For cases where the company has disappeared or the offender has no means, it could be available for that. Q48 Chairman: That would be in addition to any fines. Mr Navarro: Yes, in addition to any fines. Q49 Chairman: Going back to what you were talking about just now about the sort of penalties available in the case of corporate crimes, obviously you cannot lock up a company. There may be some companies that people would like to see locked up, but you cannot actually do it. I think you have been looking at various specific alternatives to that. I would be interested to hear a little bit more for example about your ideas for compulsory share issues. Mr Stott: That may be a bit radical, but we did enter a dialogue with the Home Office just before the last election on trying to create more imaginative or a wider range of types of sentence. We were looking at Europe and America as well. That committee fell at the election and has never been resurrected. This was blue sky thinking quite frankly and never got solidified, but we were looking at corporate probation, for instance, or maybe the power of a court to order that for a certain period the Agency or another regulatory body was a member of the board for a period, to look at the environmental effect; the issue of a bond of a million pounds to be lodged for a five year period to be set against their environmental performance. Maybe the court could order a block of share issue which would make the shareholders sit up immediately. If you are serious about environmental improvements, if you are seriously prepared to go that far, we actually think that the creation of the Sentencing Guidelines Council in the Criminal Justice Act would be the vehicle to take this forward and have a look at whether or not we could create more imaginative types of penalties, especially for the corporate offender. Rather than just the blunt instrument of fines, fines, fines, let us widen it and look at something else. Q50 Chairman: Are you actively reviving that discussion? Mr Stott: We would like to. Q51 Chairman: What does that mean? Mr Stott: We have not really done any in-depth thing; we are playing around with these ideas, but I would be keen to take them forward. Mr Navarro: It is an interesting area which we would like to engage on. The other aspect, of course, is increasing the number of cases against individual directors. Seven or eight directors have received sentences. Those tend to be the smaller companies where it is much easier to attribute the actions of the company to the individual. When we get to the larger companies with the layers of management it is much more difficult for us to be able to attribute individual responsibility - quite rightly, because there is a high test - to individual directors. That would certainly also grab their attention, I think, if we were able to do more of that. Q52 Chairman: What does corporate probation mean? Mr Stott: It is like any other probation order. For a period of two years or whatever they do not commit any form of environment offence or you bring them back to court. Ms Brosnan: We also thought about a requirement that they should publish details of the conviction in their annual report so it is brought home to shareholders exactly what the failures are, so that shareholders can have an eye to making sure that those are not repeated. Q53 Chairman: You said it was blue sky, but you also suggested it might be happening elsewhere in the world. Mr Stott: Yes, I think it is, certainly in America. In Germany and Sweden they are using the administrative civil type penalty. Rather than prosecuting and taking them into court the regulator sets an amount. There would have to be an appeal provision built into that, but that is another avenue that could be explored. Mr Challen: If we could have a memo on this I think it would be a very exciting area to examine in more detail. Q54 Chairman: I agree. Would that be possible? If you have done some work on what is happening elsewhere, it would be very helpful if you could include it. Mr Stott: I cannot promise it would be a very long paper, but we can certainly provide something. Q55 Mr Challen: If you have examples from other countries - the United States or Canada - it would be very interesting to see what their thinking is. Mr Navarro: Certainly. Q56 Chairman: Who actually terminated these discussions and on what grounds? Mr Stott: They just fell with the election and were never resurrected. It was a Home Office initiative. Q57 Chairman: Did you seek to resurrect it after the election? Mr Navarro: It fell into abeyance at that stage. Q58 Chairman: Were ministers involved in those discussions at the time? Mr Navarro: I do not think it had reached that stage. It was discussions between officials. Q59 Paul Flynn: In your submission you talk about the introduction of civil and administrative penalties. How do you think they would work? Mr Stott: I think they are being used at the present time by the DTI under the Competition Act. If they believe a monopoly has been breached then the DTI, as the regulator, can actually set an amount for a penalty itself. They have done it a couple of times, and I think the penalty was a million pounds on one occasion. If you prosecute you obviously have to follow the laws of evidence and the Police and Criminal Evidence Act et cetera, so there is a bureaucracy and administration to follow. The burden of proof is different as well; this is on the balance of probabilities that you set the administrative penalty rather than beyond all reasonable doubt. So there are attractions to a regulator. Q60 Paul Flynn: You mentioned the good work you do with magistrates in training but I understand there is not the equivalent amount of training to the Crown Court. What have you done to address that? Mr Stott: We have mentioned this to the Attorney General. We see the Attorney every quarter or every four months with a case list of our most important or serious cases. We have raised this issue of sentencing with him and he is prepared to help us to get an introduction into the Judicial Studies Board and to try to get a slot in their training agenda on environmental crime. Q61 Paul Flynn: You mentioned the Milfordhaven case. As you will recall, the original fine was four million and achieved great publicity. It was then reduced on appeal to three quarters of a million. One of the reasons for reducing fines is that the courts decide that the offence was not a malicious one. One presumes that if they are acting on behalf of the community they should be fining them as a deterrent and because of the extent of the damage done (which was enormous in the case of Milfordhaven and four million would seem to be a very light fine). Do you think this is a sensible way forward, if courts are going to reduce the fines in that way? Mr Stott: That is why we are very keen to try and get some form of tariff set by the court of appeal. These massive swings are very difficult to juggle with. Q62 Paul Flynn: It is hard to see that this type of offence would be done maliciously or deliberately. Mr Stott: That is right, but I cannot impress enough the scale of some of the waste disposal operations. You are talking about thousands of tons from new construction. Twenty, sixty wagon loads suddenly appearing, very well organised, dumping it quickly - it does not take long - and away. These are well organised operations and there is a lot of money involved here. Q63 Paul Flynn: We have had some references to the desirability of you producing and making public a database of the environmental prosecutions and sentences. Are there any plans to publish this? Mr Navarro: We do publish our Spotlight publication. I think you are referring to a database to try to capture the whole of environmental crime. We are going to be able to do something in relation to fly tipping. Mr Jones: In relation to one facet of environmental crime which is fly tipping, in discussion with DEFRA and with local authorities, we are developing a database which is intended to go live from this April. We will log all instances of fly tipping and the local authorities will also be doing that. This will give us, for the first time, a picture of what is going on nationally in relation to fly tipping. Q64 Paul Flynn: How do you disseminate that? Mr Jones: Under the Antisocial Behaviour Act the minister will be able to require reports on that and both ourselves and local authorities will report from that. I am not quite sure if we have decided yet whether we are going to publicise ourselves from that database, but it will be in effect an incident database - reports of fly tipping - so that we can actually build that picture up for the first time. That will give us a much better picture of the scale. Is it increasing? Really increasing? If so, what types of fly tipping, what types of materials are being fly tipped? There will also be an indication of how much it is actually costing to clean that up. Q65 Paul Flynn: Is this extended to other environmental crimes? Mr Jones: Not at this stage, no. Mr Stott: That would be a large operation and takes you into other territory because there are a lot of other regulators dealing with environmental crime - drinking water pollution, et cetera - and we all collect our data in different ways, regrettably. Undoubtedly if it could all be corralled and brought into one that would be beneficial, but I would not underestimate the kind of task involved in doing that. However, it does lead on to interesting questions once you have got that into the Environmental Agency's hands. Q66 Mr Thomas: I just want to return briefly to this idea of malice because that is not a feature of the actual environmental legislation, is it? That is a concept that the courts have introduced. Am I right in thinking that? Mr Stott: Most of our offences are strict liability. They have to prove that company A has caused an offence to occur. Q67 Mr Thomas: When this happens in the court of appeal, this idea of maliciousness, what happens? Mr Stott: They look closely at negligence, recklessness, poor management et cetera. All those elements are looked at, but we do not have to establish 'You did knowingly'. Q68 Mr Thomas: Why then do you think the court of appeal somehow introduced this concept into it? Mr Stott: They look at fault. They are looking to see what is the degree, the element of fault, that has led to this particular incident occurring. Is it just carelessness? Is it pure accident? Is it deliberate or whatever? Q69 Mr Thomas: But in the court system - which I think we can already see from this first evidence session - which is not necessarily imposing high enough fines in the first place, we then seem to have another step backwards at an appeal level. Many would say in the Milfordhaven case that four million pounds was peanuts compared to the cost to tourism and the environment and everything that happened in Pembrokeshire, West Wales at that stage. Would you agree with me - from what we have seen at this evidence session - that we have two stages here where there is a problem. One is where the fines in the first place are not necessarily high enough to act as a deterrent and to alert the company in a corporate way. Secondly, there is this extra element - which I agree is there within the appeal process anyway - of taking down the fines yet another level. Putting those together, environmental crime is not getting its just desserts. Mr Navarro: I could not disagree. I certainly do agree. Q70 Mr Challen: On the question of fly tipping, do you have a fly tipping hotline or something like that so that the public can contact you directly? Mr Jones: We do have a standard emergency number for people to contact us. Q71 Mr Challen: Where is it publicised? Mr Jones: It is publicised as part of our Environmental Agency hotline. It is published through local authorities and libraries quite widely. The thing to bear in mind about fly tipping is that the majority of fly tipping is probably the responsibility of the local authority. There are split responsibilities with local authorities here and the focus for ourselves is really round the hazardous waste side, the organised crime involvement in fly tipping. Nevertheless, if we do not believe it is for ourselves to deal with, then we would pass that on to local authorities and we are currently reviewing the protocol we have for that. Q72 Mr Challen: There is room for confusion there for the public. They might want to report it to the police, for example, so there is another agency involved. Mr Jones: I think that is fair to say, and we are aware of that. Q73 Mr Challen: What evidence is currently being put before the courts so that they can fully assess the appropriate fine? How do you put it in the wider context of environmental, social and economic damage? Mr Navarro: I think it is important to realise the role of the prosecution in terms of putting evidence in front of the court. We are not there to achieve a particular penalty; we are there to lay the information in front of the court. Ms Brosnan: It is very difficult to get into socio-economic factors because the courts are wanting to sentence on the basis of actual harm and actual risk, matters that we can prove to them by evidence and if they are disputed could be tried and resolved by evidence. If we put evidence of harm, we can put evidence of impact on a business before the courts, we will do those things. In the environment there may not be victims but we can say that there is fish loss, that there is potential damage to otters, for example. We have examined otter spraints to show that a particular chemical may have an impact on an otter community. We do try to put as broad a spread of information as we can before the court, but it has to be very factually based for them to sentence on it. Q74 Mr Challen: What sort of waste would they put on the risk of harm as opposed to actual harm? Does that carry a lot of weight with them when sentencing? Ms Brosnan: They are used to dealing with issues of risk, for example with dangerous driving. You do not have to spell out all of the risks associated with a particular course of conduct. With environmental offences you possibly do have to spell out some of the risks because they are not as conversant with them. However, you cannot be too hypothetical in your suggestion of risk; you have to be able to produce evidence to substantiate it and sometimes we have to do modelling to indicate that a particular outfall might spread over a particular area. It has to be based on fact. Q75 Mr Thomas: Is loss of amenity relevant then? For example, if a river has been polluted it means that you cannot enjoy that river. Can you show that? Mr Stott: Yes, that would aggravate the case, aggravate the sentence. It should do, yes. Ms Brosnan: If it is in a public area and it passes a school, that would be a more aggravating feature. Q76 Mr Challen: What is a typical reaction from a sentencing court to environmental and sustainability principles? Do you think they actually grasp the importance of these principles? Mr Stott: I think very much so. Certainly at magistrates' court level it is. If it is their local river or local playing field that has been dumped on and the impact that would have is not lost on them by any means. Q77 Chairman: Going back to the question of the database, I think, Mr Stott, you were saying that is it very difficult to do a comprehensive database because there are so many different agencies involved and you all collect information in different ways. Why can you not produce your own database for the cases which you have been handling? Mr Stott: We do. We have our own. Q78 Chairman: Is that the same as Spotlight or is that something else? Mr Stott: Spotlight feeds out of the national enforcement database which is a computerised system which collects all the data with the names, with the offences, with the penalties, et cetera. Spotlight feeds off that, that is where the information comes from, but in our database we are not collecting the same information that the other organisations are collecting. Q79 Chairman: Is your database in the public domain? Do you publish it? Mr Stott: No, we do not. Q80 Chairman: Why not? Mr Stott: It has individual names on it; data protection. Q81 Chairman: But these are cases that have been before the courts, are they not? Mr Stott: Yes, but they fall out of use, do they not? There is a mix of companies and individuals. I think we probably could put on the Internet the companies, but we have been instructed that we have a problem with data protection with individuals. Mr Navarro: That is certainly something that we are exploring actively with the Commission. Q82 Chairman: I think it would be helpful to magistrates in particular to be able to access this to get an idea of the scale and nature of offences. Mr Stott: It does not give details. It gives the name of the offender, the sentence and the section numbers under which they were convicted. There is no short synopsis of the type of offence. What magistrates need is a short comparison of facts. That database does not cover that. Q83 Chairman: Is that something you would like to produce? Mr Navarro: We do produce those on individual cases, so would the defence. It would be quite normal for us to submit the range of sentences which have occurred in the past; the defence also will submit evidence to the magistrates so that they have information at that stage in front of them about past sentencing. Q84 Chairman: Given the uncertainties that we have touched on in talking about the difficulties that exist in sentencing, anything that you could provide that adds to what is already there would be very helpful. This is something which you might be able to provide. Mr Stott: The court is a sentencing body obviously and we can assist the court with their sentencing exercise if they wish to have that form of assistance. However, for every case which is in our favour, as officers of the court we would be obliged to show them the other side of the coin and there are a lot of cases going the other way. Mr Navarro: With an inconsistent pattern it probably is not of great assistance to the court to have it exposed to them in even greater detail. Q85 Chairman: Even an inconsistent pattern is better than no pattern at all, I suspect, but maybe that is arguable. I have one final question which goes back to something we slightly skated over. I would very much like to know your view of the suggestion that has been floated that there should be a system of civil penalties. What position do you take on that issue? Mr Navarro: I think civil penalties would be a useful additional tool in our armoury which would avoid the overhead for both the organised regulated industry and ourselves to have to go to the criminal courts. I think it then comes down to the level of penalty which Parliament would be prepared to allow the Agency to impose. We certainly would not shrink from exercising that. However, if it is going to be a significant penalty I think we would perhaps need to go to an environmental appeal tribunal for them to set a high level rather than exercising that power ourselves. If we did have the power to impose unlimited penalties, we would expect there to be a right of appeal to such a tribunal. It would be a useful additional tool in our locker, I think. Q86 Chairman: Such a system exists in the United States, I believe. I read of an oil company that spilled oil and found itself with a civil penalty for $34 million. Mr Stott: The do not prosecute to the same extent as we do. They do not take the number of cases, but the cases they do take they are frequently looking to close the companies. Q87 Chairman: That would help concentrate the mind, would it not? Mr Stott: Yes, it would. Mr Navarro: It is a completely different regime. It is quite clear in the United States that if anything is taken to the criminal courts the penalties are very significant. Nested below those penalties are the administrative penalties which in themselves are significant compared to ours. However, I think you have to have that relationship in order to encourage the take up of the administrative penalties. Q88 Chairman: Thank you very much. I think that concludes our questioning, but if there is anything else you think we should have asked or you would like to say, now is an opportunity to do so. Mr Navarro: I think we have covered everything we wanted to, thank you very much. Chairman: Thank you very much indeed. We are very grateful to you. |