Prospect of increased Environment Agency enforcement action following National Audit Office process: Clyde & Co – Advice Eating

The National Audit Office (NAO) has released a report on its investigation into government action to combat waste crime.


It is clear from the report that despite attempts by Defra and the Environment Agency (EA) to eliminate waste crime, waste crime remains a serious problem, consisting of a range of illegal activities costing the English economy a staggering £900m per year year cost.

While the report shines a spotlight on the sheer scale and nature of waste crime, it clearly acknowledges how the EA has relied heavily on advice and guidance in recent times to deal with waste crime, including on issues such as permit violations. However, the findings of the NAO report show that this approach has not worked – it is only a matter of time before the EA increasingly uses its full arsenal of enforcement powers, including law enforcement.

However, despite the government’s attempts to crack down on waste-related crime, the report highlights rather scathingly that waste-related crime in general is on the rise, while formal enforcement action has declined. Inevitably, regulators are expected to have a strong response to the report’s findings, and the EA is expected to be as robust as ever in using its enforcement powers.

The report covers three main areas, each of which is considered below:

The extent and nature of waste crime

The report highlights the serious national lack of data on waste crime.

Key findings include:

  • Between 2004-05 and 2014-15, the landfill tax increased faster than inflation. The tax increased recycling as intended. However, this in turn has increased the potential financial return from illegal activities that avoid landfill tax, such as B. the misdescription of waste and illegal landfills. This has also increased the attractiveness of the organized crime market. HMRC estimates £200m in landfill taxes due in 2019/20 went uncollected. For information on HMRC Landfill Tax please contact the email address below.
  • At the end of 2020-21, the EA was aware of 470 active illegal landfills, up from 685 in 2018-19. However, the EA warns that this figure may not be representative as the COVID-19 pandemic has limited its officials’ ability to travel and identify such locations.
  • The EA believes there is widespread misuse of permit exceptions. A derogation can be seen as an easy route into waste management as it can be registered free of charge and with limited verification. Failure to comply with exemptions is an expected common occurrence, but there is little regulatory oversight. In 2015, the EA found that 30% of the websites surveyed may be violating exemptions.
  • The number of serious environmental permit violations by waste operators investigated by the EA has been increasing since 2017 – yet only seven out of 287 complaints by the EA for 2020/21 permit violations resulted in prosecution, (and the majority dealt with through advice and guidance). The EA currently arguably takes a “relaxed” approach to permit violations – the report comments on EA’s current stance that permit violations are due to difficulties in distinguishing between poor performance and crime. NAO figures show that in recent years the EA has relied heavily on advice and guidance and formal warning letters to deal with breaches of this nature, with prosecutions falling sharply since 2007.
  • A 2019 investigation found the UK to be the worst culprit in Europe for illegal e-waste exports to developing countries. Although the EA confiscates approximately 200-450 containers per year containing non-compliant waste export regulations, the true extent of illegally exported waste is unknown.
  • The number of aircraft tip-over incidents reported by local authorities has increased sharply since 2012-13, reaching more than 1.13 million incidents in 2020-21.

sanctions against perpetrators

In line with government policy for regulators to take a risk-based and proportionate approach to enforcing compliance, EA’s policy is to provide advice, guidance or warning where possible and only in more serious cases or informal approaches moving to more formal sanctions is not working.

The report looked at EA’s response to waste crime. In the period 2014-15 to 2020-21, the EA provided advice and guidance in 52% and 53% of illegal landfill and permit violation investigations, respectively. Sending warning letters was the second most common action for both types of crime (37% and 26% respectively). In 2020-21, only 7% of detected illegal landfills and 5% of detected permit violations were prosecuted.

Due to the resource-intensive and time-consuming nature of law enforcement, these are reserved for only the most serious offences. The number of investigations conducted by the EA that have led to prosecutions against companies has fallen from 800 to 60 per year since 2017-18, while the time taken to complete investigations has increased. The average length of investigations leading to prosecutions in 2020-21 was over 1,500 days (with the COVID-19 pandemic contributing to such delays).

How effective are advances in waste crime?

In 2020 the Joint Unit for Waste Crime was formed, consisting of nine strategic partner organizations (such as the EA, HMRC and the National Crime Agency) coordinating to tackle waste crime. For example, in the first half of 2021-22, it participated in 24 coordinated days of action with partners to prevent and disrupt the involvement of organized crime groups in the waste sector, with 35 arrests associated.

Defra has provided a policy update on its progress on actions in the Resources and Waste Strategy on waste crime for 2021-22. Some commitments have been met, for example increased powers for EA through the Environment Act. Defra also began advising on proposals to move from a registration-based to a permit-based system required for the transfer or trade of waste, and mandates the digital recording of waste movements. It also intends to introduce legislative tools between 2022 and 2023 to reform the existing environmental permitting system to prevent illegal activities from being obscured by waste exemptions.

What to expect next?

Ultimately, the government’s progress in implementing measures to combat waste crime has been slower than hoped. The government plans to regularly review progress and assess what further action is needed, but the report highlights that it does not yet have appropriate performance indicators to support this.

It is clear that organized crime has found financial incentives to commit waste crimes, barriers to entry for operators are low and sanctions and prosecutions may not be an effective deterrent. As such, the report includes the following recommendations:

  • Improving data on waste crime and improving understanding of the resources used to fight it so that resources can be better targeted;
  • Better understanding of the relationship between landfill tax rates and incentives to commit waste crimes;
  • introduce progress indicators for the waste crime elements of the Waste and Resources Strategy as soon as possible;
  • Leverage data from police databases and systems to improve intelligence gathering and collaboration with partners; and
  • Create a more stable foundation for funding the Joint Unit for Waste Crime.

Given the slow progress and lack of formal enforcement actions mentioned in the report, we understand that the EA would like to be seen as committed to taking proactive steps to tackle waste crime. It would therefore not be surprising if the EA took a tougher approach, shifting the focus where appropriate from advice and guidance to more formal sanctions (including criminal prosecution) where warranted. This may be especially evident with permit abuse and illegal landfills as we emerge from the COVID-19 pandemic and the ability for EA officials to travel and visit sites resumes.

Having so clearly flagged up the lack of enforcement action, it seems inevitable that the EA will start to increase the level of formal enforcement action they take, particularly on more serious and repeated offences. Now more than ever, companies are well advised to take all necessary precautions to ensure compliance at their sites.

A link to the report can be found here: Inquiry into government action to tackle waste crime in England – National Audit Office (NAO) report.

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