Environmental Law Quarterly Update - Q4 2021

This quarterly environmental law update provides a summary of news stories published in the period October – December 2021.
 

October

FAFT update their recommendations for combatting money laundering and terrorist financing

In October 2021 the Financial Action Task Force (FAFT) updated their ‘International Standards on Combating Money Laundering and The Financing of Terrorism & Proliferation’ Recommendations. In this update, FAFT clarified the types of offences considered to fall within the definition of ‘environmental crime’, namely: criminal harvesting, extraction or trafficking of protected species of wild fauna and flora, precious metals and stones, other natural resources, or waste. Whilst environmental crimes were already listed as designated category offences, meaning countries have always been required to criminalise money laundering for such crimes (as FAFT recognised at their October Plenary), FAFT found that there were significant differences in how each defined environmental crimes which had the potential to affect how they investigated them.  FAFT’s October update is intended to complement its June 2021 environmental crime report, as discussed in our Q2 update here.

Defra provides an additional £7.2m to projects tackling illegal wildlife trade

On 1 October 2021 the Department for Environment, Food & Rural Affairs (Defra) announced it will provide a total of £7.2m in funding to 17 conservation projects focussed on protecting endangered species, such as tigers in Nepal, orangutans in Indonesia and pangolins in the Philippines. The funding was awarded following Round 7 of the Government’s ‘Illegal Wildlife Trade Challenge Fund’ – a UK government competitive grants scheme aimed at eradicating illegal wildlife trade. Applicants for Round 8 funding, aimed at projects in sub–Saharan Africa, East and South East Asia and Latin America, had until 22 November to apply.

Environment Agency reports on the environmental performance of regulated businesses

In October 2021 the Environment Agency published its annual report on the environmental performance of regulated businesses in England throughout 2020 and the regulatory role taken by the Environment Agency. The report explained that whilst the permit compliance rate was high (97%) there remained issues of prolonged non-compliance, particularly amongst waste activities (which was recently also the subject of an EA survey). Concerns expressed in the Environment Agency’s earlier report on water companies’ performance (referred to in our Q3 update) were also repeated. Enforcement action was, expectedly, down on previous years but not insignificant, with 27% of all enforcement action resulting in prosecutions. The majority of the other action taken resulted in enforcement notices (39%) and enforcement undertakings (31%). Only 6 cautions were issued, with the EA finding they were less effective than other powers available to them. In more positive news, they recognised there had been some significant progress, such the implementation of the EA2025.

November

COP26

From 31 October to 12 November 2021 the annual United Nations’ climate change conference took place in Glasgow. This conference, the 26^th Conference of the Parties (COP26), was seen as the most important conference since COP21 (which produced the 2015 Paris Agreement) because it was the moment countries revisited climate pledges made under the Paris Agreement.

One of the outcomes of COP26 was the Glasgow Climate Pact which, amongst other matters, agreed to:

• Work towards further cuts to CO2 emissions in an attempt to keep temperature rises within 1.5°C, as set out in the Paris Agreement;
• “Phase down” the use of coal and “phase out” inefficient fossil fuel subsidies, which are used to artificially reduce the price of oil, coal or natural gas; and
• Increase funding available to poorer countries to manage the impact of climate change and the costs associated with moving to clean energy.

Leaders from over 100 countries with 85% of the world’s forests agreed to stop deforestation by 2030, whilst an agreement to cut methane emissions by 30% by 2030 was also reached. The delegates agreed to review their climate pledges by the end of 2022.

Environment Act 2021

On 9 November 2021 the Environment Act 2021 was granted royal assent, with a number of provisions coming into force on 17 November 2021. Several of its other substantive provisions will come into force on 9 January 2022.

Amongst other changes, the Act:

• Creates an independent body, the Office for Environmental Protection (OEP), to take over the role of the European Commission as the environmental watchdog in the UK. The OEP is responsible for reviewing and reporting on the government’s progress in meeting environmental goals and targets; monitoring and reporting on the implementation of environmental law; advising the government on proposed changes to environmental law and related matters; and inspecting alleged failures to comply with environmental law by the government or other public bodies, enforcing compliance where required;
• Requires the government to meet a legally binding target on species abundance by 2030; and
• Makes it illegal for large businesses operating in the UK to use key forest commodities produced on land illegally occupied or used. This will complement the existing UK Timber Regulations which already criminalise the placing of illegally harvested timber on the UK market. Relevant businesses will need to report annually on the due diligence exercises they have conducted on their supply chains.

Major investigation into sewage treatment works

On 18 November 2021 it was announced that the Environment Agency and Ofwat had initiated a substantial investigation into over 2,000 sewage treatment works. The investigation was immediately launched after the Environment Agency became aware from a number of companies that their treatment works may be releasing sewage discharges in breach of their permits. The investigation is designed to assess how wide-spread the problem is and it is clear that the Environment Agency and Ofwat are taking this issue very seriously, with “any company caught breaching their legal permits facing enforcement action, including fines or prosecutions”. 

NORTHUMBRIAN WATER ORDERED TO PAY OVER £680,000 FOR DISCHARGING SEWAGE EFFLUENT INTO A WATERCOURSE

On 4 October 2021 Northumbrian Water pleaded guilty to discharging sewage effluent which occurred on 22 May 2017 after a blockage in a combined sewer caused the discharge onto a watercourse in County Durham. The following day the company self-reported the incident to the Environment Agency and worked on clearing the blockage and carrying out remedial improvement works. Investigations which followed found that from the point of the incident, the watercourse’s ecology and habitat had been damaged for 2km and the water quality had been impacted for 4km. At a sentencing hearing on 6 October Northumbrian Water was fined £540,000 and ordered to pay costs of more than £142,000.

Enforcement Undertaking sees Sanderson Environmental Ltd pay £30,000 to the Land Trust

On 27 October 2021 it was reported that following an investigation which began in 2017, the Environment Agency had accepted an Enforcement Undertaking from Sanderson Environmental Ltd after they breached the conditions of their environmental permit by importing and spreading untreated sewage sludge, without notification, over land operated by them in Doncaster. Under the terms of the undertaking, Sanderson Environmental Ltd paid costs of £8,137.36 and donated £30,000 to the Land Trust, a charity working to improve former coalfield sites in Yorkshire. The two owners of the land, Sutcliffe Farmers Ltd and Senviro Ltd, were issued with variable monetary penalties (VMPs) of £7,521.54 and £2,507.7 respectively, for breaches of the Nitrate Pollution Prevention Regulations 2015. They were also ordered to pay costs of £8,137.63.

December

Defra consults on the Environment Act’s due diligence provisions

As referred to above, the Environment Act 2021 introduced the requirement on relevant businesses to conduct due diligence on key forest commodities. In order for these provisions to be implemented, secondary legislation needs to be passed. In December 2021 the Department for Environment, Food & Rural Affairs (Defra) launched a consultation on this issue, seeking the views of interested parties. The deadline for responses is 11 March 2022.

Severn Trent Water Ltd fined £1.5m for illegal sewage discharges

On 7 December 2021 Severn Trent Water was fined £1.5m and ordered to pay costs of £58,365 after it admitted to discharging sewage illegally and breaching limits set for Biological Oxygen Demand (BOD) and ammoniacal nitrogen. The incidents occurred across four sewage treatment works between February and August 2018 and resulted in approximately 360,000 litres of raw sewage being illegally discharged from one of the treatment works into a nearby brook. This is not the first time Severn Trent have been before the courts in recent years for relevant offences; the company was fined £800,000 last summer after more than 3 million litres of raw sewage was allowed to enter a Shropshire stream between November 2014 and May 2016.

Further information

For further information on the issues raised in this blog post, please contact a member of our Health, Safety & Environment team.

About the authors

Nicola Finnerty is a Partner in our Criminal Litigation team and a leading expert in white collar and business crime, proceeds of crime & asset forfeiture. Over the last 25 years she has been involved in many of the most high-profile, complex criminal and regulatory investigations and prosecutions, both in the UK and in matters which span multiple jurisdictions. Her expertise includes money laundering, fraud & bribery and corruption along with being regularly consulted by individuals and institutions in the regulated sector in respect of the Money Laundering Regulations 2017. Nicola represents high net worth individuals, multi nation corporate clients, financial institutions and professional firms in investigations and proceedings brought by UK enforcement agencies.

Sophie Wood is a Senior Associate in the Criminal Litigation team with extensive experience in advising corporate and individual clients involved in a wide range of internal, criminal and regulatory investigations. Sophie has acted for individuals and companies involved in investigations brought by the Environment Agency, Health and Safety Executive and local authorities, and is a member of the firm’s cross-practice Health, Safety and Environment Group.

Sarah Wylie is a trainee solicitor in her third seat with the Criminal Litigation team, having spent her previous seats with the Immigration and Dispute Resolution teams.