In the case of the Environment Agency v Hennessy and others (2016) the EA was successful in its application for a Voluntary Bill of Indictment to argue that the company was not operating an exempt waste facility because it had breached the conditions of the exemption. Sarah Holmes of Bond Dickinson LLP reports.

Background

Does a facility cease to operate an “exempt waste operation” for the purposes of the Environmental Permitting Regulations 2010, Regulation 12(1)(a) when:

  1. the operator breaches the conditions set out in schedule 2, paragraph 3(1) to the Regulations

  2. the regulator removes the facility’s entry from the register of exempt facilities?

It may come as a surprise to many that this question was even considered by the High Court, since the answer provided by the High Court was a resounding (a). However, the case is interesting for three reasons.

  1. The use by the Environment Agency of a rarely used procedure to seek a fresh trial of the three defendants against who charges had been dismissed on the basis that no offence had been committed by the company.

  2. As a reminder for undertakings that operate under waste exemptions that it is important to ensure compliance with all of the conditions specified for any exempt waste.

  3. That the Environment Agency will take proceedings against directors where it considers that they have either turned a blind eye to breaches, failed to take steps to ensure that they know how their business is running, or knowingly breached exemptions.

Facts

A company, Prime, operated a waste wood storage and processing facility that had been registered with the Environment Agency as exempt from the need for an environmental permit. The Environment Agency inspected Prime’s site and concluded that between September 2013 and December 2013 the quantity of waste wood being stored over a 7-day period exceeded the 500t limit specified in the regulations. Where the storage threshold is exceeded, facilities must operate with the benefit of an environmental permit. Accordingly, it concluded that Prime had operated a regulated facility without an environmental permit in breach of Regulation 12(1)(a) of the 2010 Regulations.

There were two counts to the charge brought against the three defendant directors. The first count was that the offence was attributable to the neglect of the defendants as directors. The second count was that they consented or connived in the commission of the company’s offence. The judge in the first trial preferred the argument advanced by the advocate for the defendants — that a facility was exempt from environmental permitting until it was removed from the register of exempt waste operations — and dismissed the charges against the three defendants.

This led to an application by the Environment Agency to the High Court for a rarely used “Voluntary Bill of Indictment” to require that the charges should be the subject of a fresh trial. Voluntary Bills of Indictment are granted only in exceptional circumstances, where good reason to depart from normal procedure is clearly shown and where the interests of justice, rather than considerations of administrative convenience, require it. In seeking a Voluntary Bill of Indictment the Environment Agency asserted that Prime was not running an exempt waste facility because it had breached the conditions of the exemption. It argued that the registration of exemptions was an administrative process and that the register was not the mechanism for determining whether a facility was an exempt waste operation or not.

Judgment

The Environment Agency was successful in its application for a Voluntary Bill of Indictment under the Administration of Justice (Miscellaneous) Provisions Act 1993. Mr Justice Spencer concluded that the trial judge had incorrectly interpreted the Environmental Permitting Regulations. In particular, he had ignored Regulation 5, which defines an exempt waste operation as a waste operation that (a) is not carried out at an installation and (b) that meets the requirements of paragraph 3(1) of schedule 2 to the 2010 Regulations.

The 2010 Regulations requirements are threefold:

  1. that a waste operation falls within a specified description and satisfies the general and specific conditions specified in relation to that description

  2. that the waste operation is registered; and that an establishment or undertaking is registered in relation to it

  3. that the type and quantity of waste submitted to the waste operation, and the method of disposal and recovery, are consistent with the need to attain the objective mentioned in Article 13 of the Waste Framework Directive.

Accordingly, to be an exempt waste operation a facility must meet the requirements of schedule 2 paragraph 3(1). The failure of the Environment Agency to comply with its duty to deregister the undertaking when the conditions required for the exemption to subsist had been breached did not affect the validity or otherwise of the exemption. Since a fundamental error of law had been made, the High Court consented to a Voluntary Bill on the basis of exceptional circumstances having been demonstrated and the Voluntary Bill being required in the interests of justice. The three defendants will now be the subject of further proceedings where they will be tried on the merits of the case against them.

Overview

For lawyers, the principal interest in this case is the rare use of the Voluntary Bill of Indictment. For operators of exempt waste facilities, the case confirms that a facility will cease to benefit from an exemption if it breaches any of the conditions specified in schedule 2, paragraph 3(1) of the Environmental Permitting Regulations 2010 (as amended). Where a threshold specified in a condition is exceeded then the Environment Agency is entitled to find that there has been a breach of Regulation 12(1)(a) of the 2010 Regulations. Operators should ensure that compliance with the conditions imposed on exempt waste operations is monitored. If an issue is identified then consideration should be given to changing operations to enable compliance or to the need for an environmental permit.

Last reviewed 13 June 2016