The Environment Agency (EA) should have used its discretion to reduce the fines faced by Criterion Capital Ltd from £45,000 per incident to £25,000 per incident to reflect the fact that the lateness of the reports was down to the agency it used and to reflect that Criterion had taken reasonable steps to rectify the breach once it had been made aware of it, according to the Secretary of State's decision (6-page / 245KB PDF).
Criterion had failed to submit a 'footprint' report and an annual report detailing its emisisons under the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. This Scheme requires large businesses and public sector bodies to report on their energy consumption and buy carbon dioxide allowances to cover that consumption.
The EA enforces the Scheme and can levy civil penalties on organisations that break the rules. Criterion failed to submit two reports on time.
Failure to submit various reports as required under the Scheme will trigger an immediate fine of £5000 and then a further fine of £500 for each subsequent day of delay up to a maximum of 40 days or a fine of £40,000 if the reports are delayed by more than 40 working days. The EA has discretion to waive or modify penalties if a participant can show it took reasonable steps to comply or rectify the failure once it became aware of the same.
The EA has imposed a total of £114,000 in civil penalties against six participants, all of which relate to failures to submit reports in required timeframes with the penalties ranging from £5000 to £20,500 per late report.
The CRC scheme is self audited but environmental law expert Linda Fletcher of Pinsent Masons, the law firm behind Out-Law.com, said that the EA will carry out spot checks of about 25% of participants.
"This case demonstrates how seriously the EA will take non-compliance with the Scheme and demonstrates the use of civil sanctions as an enforcement mechanism for certain environmental offences," said Fletcher.
"Now that the first compliance year of Phase 1 has completed we may expect more cases to be brought by the EA for subsequent failures to comply as participants should be more familiar with how the Scheme works and so have fewer reasons for any non compliance," she said.
