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Company Strictly Liable for Environmental Crime

In a case of vital importance to landowners and those involved in handling waste, the Court of Appeal has fixed strict criminal liability on a company – despite its plea that it was unaware that a third party was carrying out unauthorised and environmentally damaging operations on its property.

The haulage company had bought industrial premises and instructed a contractor to demolish existing buildings on the site with a view to its redevelopment. The Environment Agency launched an investigation after local residents complained of fires being lit on the site, giving off ‘acrid and choking’ fumes.

It emerged that the contractor was running an illegal waste transfer station on the site. Waste was being imported illegally onto the land, non-compliant aggregate was being manufactured from crushed waste and asbestos was found mixed in with crushed material.

The haulage company was charged with knowingly permitting the operation of a regulated facility without an environmental permit, contrary to Regulation 38 of the Environmental Permitting (England and Wales) Regulations 2007. It pleaded guilty after the judge accepted prosecution arguments that, in order to establish the offence, it was only necessary to prove that the company had knowingly permitted the particular waste operation and that, as a matter of fact, the waste operation was not in accordance with an environmental permit.

On appeal, the company argued that the judge had misinterpreted the regulation and that it had also been necessary for the prosecution to establish that it knew that the waste handling operation was not in accordance with an environment permit. It was submitted that the company’s director had periodically visited the site and seen nothing to indicate that illegal operations were taking place.

In dismissing the appeal, however, the Court found that the judge’s interpretation of the words ‘knowingly permits’ had been correct. The law required the company’s director to ensure that what was happening on the site was compliant with the conditions of an environmental permit and it would have been no defence to say that he had been told lies.

The Court found that those who drafted the Regulations had made ‘a deliberate choice’ to exclude the possibility of a due diligence defence in order to secure higher environmental standards. If the company’s interpretation of the Regulations were correct, it would be tantamount to creating such a defence ‘by the back door’.