Introducing unlimited penalties for those who pollute the environment

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Companies that pollute the environment could face unlimited financial penalties from the Environment Agency from today (11 December 2023).

The previous cap of £250,000 on variable fines (VMPs) has been removed and the range of offenses covered has been expanded. This means the Environment Agency has more tools to hold the water industry and other industries to account.

The range of offenses punishable under the VMP includes:

  • Violation of permit conditions from sites discharging into rivers or oceans – for example, violation of permit conditions from sewage treatment plants or permitted storm overflows.
  • Illegal discharges into water without a permit, such as in the case of agricultural pollution from slurry storage.
  • Illegal waste crimes from illegal waste disposal sites and unauthorized waste management facilities.
  • Allows violations by manufacturing and power plants that contribute to air pollution.

The new unlimited fines, a measure of the UK Government’s Water Plan, are part of efforts to secure more investment, stronger regulation and tougher enforcement across water systems.

The changes follow a consultation in spring 2023 and will affect all companies with environmental permits, including water and waste companies, the agricultural sector and processing industries. The fines imposed will be proportionate to the size of the company and the nature of the offense, in accordance with Sentencing Council guidelines.

Environment Secretary Steve Barclay said:

Polluters should believe they will pay a price for the damage they cause to our precious habitats and waterways.

By lifting the caps on these sanctions, we are simultaneously strengthening our enforcement tools and expanding the scope for regulators to use them. These changes will result in appropriate penalties for businesses that violate permits and cause pollution.

Through the launch of the Water Reclamation Fund, funds raised from fines imposed on water companies will be used to restore and protect our water. This is part of the increased investment, increased regulation and increased enforcement we are making through our Water Plan.

John Leyland, Director General of the Environment Agency, said:

These new powers will enable us to impose more penalties and continue to hold polluters, including water companies, accountable.

The threat of uncapped fines should help encourage compliance with environmental laws and provide stronger protection for the environment, communities and nature.

As well as changes to the VMP system, the government has recently taken other steps to hold polluters accountable for environmental damage. We gave Ofwat more powers to ensure water companies’ dividends are linked to environmental performance, and the regulator also strengthened rules around bonus payments. From 2022 to 2023, UK water company managers will no longer pay CEO bonuses out of customer money.

Funds raised from water company fines will be reinvested into a new water reclamation fund aimed at providing direct investment into projects that work to improve rivers, lakes and streams at a local level.

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