Last reviewed 4 February 2019
The Environment Agency (EA) has published streamlined guidance on how it assesses and scores permit compliance and how these affect charges for waste operations and installations. John Barwise outlines the key principles, explains the scoring system and subsistence charges and outlines the regulator’s plans to move to performance-based regulations.
The EA carries out periodic compliance assessments for all sites permitted under Environmental Permitting Regulations (EPR) to check that operators are following permit conditions — a process that can be complex and time-consuming for operators, who want to see greater consistency and clarity in the way assessments are determined.
In response to recent consultation, the EA has sought to streamline and simplify guidance on assessing and scoring environmental compliance relating to waste, installations (including intensive farming) and non-nuclear radioactive substances.
As part of its consultation process, the EA also sought views on reforming its Compliance Classification Scheme (CCS) which it uses to assess, categorise and score permit compliance. The changes it proposed are aimed at taking the first major step towards implementing performance-based regulation (PBR).
In the end, the EA decided to keep its current risk-based approach for assessing compliance with environmental permitting conditions, at least for the short term, but says it intends to develop principles of PBR across all regimes at some point in the future.
The EA regulates a range of high-risk activities under the Environmental Permitting (England and Wales) Regulations 2016 (EPR)(see Environmental Permitting Programme topic), including activities related to waste management and industrial processes, discharges of treated effluents and other activities.
Regulated activities are categorised and scored under the CCS, including permit non-compliances, depending on their level of actual or potential impact on people and the environment.
In 2017, the EA decided to replace its risk-based Operator Risk Appraisal (OPRA) scheme, in favour of a performance-based approach, but decided to keep the CCS for assessing compliance and classifying environmental permit breaches. The EA also launched a consultation of its CCS to determine how to make assessment and scoring of permit compliances more consistent and proportionate and to explain how assessment findings are recorded on the Compliance Assessment Report (CAR) form.
The consultation coincided with the EA’s “Strategic Review of Charges” (SROC) which set out proposals to review its permitting charges regime which, according to the EA, does not fully reflect the full costs of the services it provides. The aim of the SROC is to change from a risk-based approach, as previously with OPRA, to a performance-based system, whereby low-risk, well managed activities would be charged less than higher risk or poorly managed activities.
Streamlined guidance — brief summary
The revised guidance aims to clarify how the EA assess and scores permit compliance and explains what happens after a compliance assessment and how the results are used, including how this affects subsistence charges for waste operations and installations.
The guidance applies to permit holders with permits regulated under the EPR. It includes those carrying out the following activities:
installations, including intensive farming
non-nuclear radioactive substances.
EA guidance is based on six principles:
Principle 1: record all non-compliances. All non-compliances identified during the assessment on the CAR form are recorded, including those related to permit conditions and where Duty of Care has not been followed. Permits can contain multiple conditions, including, for example, permitted activities, infrastructure, general management, resource efficiency, monitoring and records, emissions and incident management.
Principle 2: consolidation. All non-compliances relating to an individual permit condition are consolidated. This means that during an assessment the EA will only give a permit holder one category and score per permit condition. Where there are several non-compliances, these are consolidated when assessing risk or impact, and for scoring. This does not apply to Emission Limit Values (ELVs) non-compliances.
Principle 3: assess the reasonably foreseeable impact. The risk category and score given to a non-compliance reflects the potential impact it can have if not addressed adequately. Assessing reasonably foreseeable impact takes account of:
the proximity and vulnerability of the local population
the sensitivity of the surrounding environment
any procedures, resources and infrastructure that the permit holder has in place to mitigate pollution (these are collectively known as “appropriate measures”)
the responsiveness of the permit holder and site staff.
Principle 4: assess the root cause of the original non-compliance. The EA will categorise and score root causes. Where the EA find several non-compliances under different permit conditions, these will be consolidated into one risk category and scored under the management system condition. The guidance points out that the root cause may have the potential for greater impact than the original non-compliance. For example, an inadequate management system could have a greater reasonably foreseeable impact than the administrative failure that led to its discovery.
Principle 5: suspend scores. The EA identifies, records, categorises and scores permit non-compliances. But in some circumstances, such as when complex non-compliances take a long time to resolve, the scores which relate to that specific permit condition may be suspended. Scores will only be suspended where a permit holder is actively taking steps to address the non-compliance.
Principle 6: assess the category of non-compliance. There are four risk categories of non-compliance, depending on the severity of the “reasonably foreseeable” impact, or in the case of amenity conditions, the actual impact. Each risk category is scored.
Risk category 1 non-compliances score 60 points — associated with a major impact on human health, quality of life or the environment.
Risk category 2 non-compliances score 31 points — associated with a significant impact on human health, quality of life or the environment.
Risk category 3 non-compliances score 4 points — associated with a minor impact on human health, quality of life or the environment.
Risk category 4 non-compliances score 0.1 points — associated with no impact on human health, quality of life or the environment.
The allocated scores for waste and installations are accumulated during the compliance year.
Explaining the outcomes of a compliance assessment
The EA will carry out site visits for a compliance assessment when the site manager is present so they are aware of any non-compliances. If the non-compliance relates to a permit condition, the regulator will explain what the risk category and score is likely to be.
Permit holders will receive a CAR form the EA outlining the results of a compliance assessment. This is usually within 14 days of the assessment — even when they have not identified any non-compliances.
Calculating subsistence charges for waste activities and installations
Subsistence charges for waste activities and installations aim to reflect both the regulatory interventions and the effort applied by the EA in the previous compliance year. The subsistence charge is calculated by applying a percentage multiplier to the baseline subsistence charge, based upon the compliance band for the previous year.
At the end of the compliance year, the scores for non-compliance are added together to generate a compliance band:
A = 0 points
B = 0.1 to 10 points
C = 10.1 to 30 points
D = 30.1 to 60 points
E = 60.1 to 149.9 points
F more than 150 points.
Sites in compliance bands A and B have demonstrated an expected level of permit compliance. Those sites in compliance bands C and D must improve to achieve permit compliance. Sites in compliance bands E and F must significantly improve in order to achieve permit compliance. These sites are more likely to have their permit revoked unless there is substantial evidence that they are working towards achieving compliance in a timely manner.
At the end of the calendar year, fully compliant sites will receive a 5% discount on their subsistence charge, while noncompliant sites will be charged more — depending on the severity of the non-compliance.
Publishing data from a compliance assessment
The EA publishes open data which is available to everyone to access, use and share. Data which relates to assessing and scoring permit compliance includes:
The EA also publishes annual reports which include information about:
assessing permit compliance
emissions to air from the businesses we regulate
the number of serious pollution incidents and sectors responsible
reductions in costs for businesses we regulate
enforcement action we take when businesses do not comply.
In its summary to its consultation on assessing and scoring permit compliance, the EA says it has decided not to take forward proposed changes to consolidating ELVs or to change its service level regarding the timeliness of the CAR form — which will remain as 14 days.
However, the EA points out that its guidance is an “interim policy position” for the regulation of waste sites, installations and non-nuclear radioactive substances. In the longer-term, the EA wants to move towards a common framework for regulating across all permitted sites and is keen to build on this framework to develop the principles of PBR.
Full details of the EA policy paper “Assessing and scoring environmental permit compliance” are available here.