Sanctions for pollution: Do we have the right regime?

Journal of Environmental Law

Volumn 14, Issue 3, 2002, Pages 283-298

  Ogus, Anthony ^a,b   Abbot, Carolyn ^a  

^a UNIVERSITY OF MANCHESTER   (United Kingdom)

^b MAASTRICHT UNIVERSITY   (Netherlands)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 11244312863     PISSN: 09528873     EISSN: None     Source Type: Journal    
DOI: 10.1093/jel/14.3.283     Document Type: Article

References (102)

1. See e.g. K. Hawkins, Environment and Enforcement: Regulation and the Social Definition of Pollution (Oxford: Clarendon Press, 1984); B. Hutter, Compliance: Regulation and Environment (Oxford: Clarendon Press, 1997); N. Gunningham, P. Grabosky and D. Sinclair, Smart Regulation: Designing Environmental Policy (Oxford: Clarendon Press, 1998) Ch 6.
2. See e.g. K. Hawkins, Environment and Enforcement: Regulation and the Social Definition of Pollution (Oxford: Clarendon Press, 1984); B. Hutter, Compliance: Regulation and Environment (Oxford: Clarendon Press, 1997); N. Gunningham, P. Grabosky and D. Sinclair, Smart Regulation: Designing Environmental Policy (Oxford: Clarendon Press, 1998) Ch 6.
3. See e.g. K. Hawkins, Environment and Enforcement: Regulation and the Social Definition of Pollution (Oxford: Clarendon Press, 1984); B. Hutter, Compliance: Regulation and Environment (Oxford: Clarendon Press, 1997); N. Gunningham, P. Grabosky and D. Sinclair, Smart Regulation: Designing Environmental Policy (Oxford: Clarendon Press, 1998) Ch 6.
4. See e.g. J. Bugler, Polluting Britain (Harmondsworth: Penguin, 1972); the editor's note at 'Sentencing for Environmental Offences', 8 JEL (1996) 389; the recommendations of the Select Committee on the Environment, Transport and the Regions, HC Session 1999-2000, 34I-II, para 98. See further, sections 4 and 6 of this paper.
5. See e.g. J. Bugler, Polluting Britain (Harmondsworth: Penguin, 1972); the editor's note at 'Sentencing for Environmental Offences', 8 JEL (1996) 389; the recommendations of the Select Committee on the Environment, Transport and the Regions, HC Session 1999-2000, 34I-II, para 98. See further, sections 4 and 6 of this paper.
6. N. Gunningham et al, op cit, n 1; G.I. Balch, 'The Stick, the Carrot, and Other Strategies: A Theoretical Analysis of Government Intervention', 2 Law and Policy Quarterly (1980) 35.
7. N. Gunningham et al, op cit, n 1; G.I. Balch, 'The Stick, the Carrot, and Other Strategies: A Theoretical Analysis of Government Intervention', 2 Law and Policy Quarterly (1980) 35.
8. Australian Law Reform Commission, Civil and Administrative Penalties, Consultation Paper December 2000.
9. We focus on the regulatory regimes of waste management, water quality and integrated pollution control (IPC). Although the latter has been superseded by a new system of pollution prevention and control (PPC), enforcement statistics relate to IPC, hence the continuing reference to that regime.
10. For a survey with bibliography, see A.M. Polinsky and S. Shavell, 'Public Enforcement of Law' in B. Bouckaert and G. De Geest (eds), Encyclopedia of Law and Economics (Cheltenham: Elgar, 2000) vol 5, p 307.
11. A formal caution is a written acceptance by the offender that an offence has been committed. This power can only be used where a prosecution could properly be brought.
12. A warning can consist of either a site warning by the investigating officer or a warning letter.
13. See, e.g. section 33(1)(c) Environmental Protection Act 1990 (EPA 1990) and section 85(1) and (3) Water Resources Act 1991 (WRA 1991).
14. See, e.g. section 6(1) EPA 1990 and section 33(1)(a) and (b) EPA 1990.
15. See sections 15 and 43 of the EPA 1990 and section 91 WRA 1991. With regard to IPC and waste management, it is interesting to note that the bringing of an appeal against the serving of a suspension or prohibition notice does not suspend the operation of that notice. This can be contrasted with an appeal against revocation of a licence where the notice is suspended until the appeal is determined.
16. Environment Agency Enforcement and Prosecution Policy (November 1998).
17. Ibid, paras 4 and 6.
18. Ibid, para 9.
19. Ibid, para 28.
20. Ibid, para 21.
21. Environment Agency, Guidance for the Enforcement and Prosecution Policy, September 1999. Available on www.environment-agency.gov.uk
22. An incident is defined as a 'specific event which comes to the attention of the Agency, is of concern to the Agency, and which may have an environmental and/or operational impact'. Ibid, section 1, para 3.2.
23. The same categorisation scheme can be used in relation to incidents or other events which have a potential environmental impact.
24. Environment Agency Annual Report and Accounts 1999-2000, 131. The Annual Report and Accounts for 2000-2001 (at 27) states that the Agency initiated 700 prosecutions for pollution offences. The Report does not, however, give a detailed breakdown of enforcement action.
25. Annual Report and Accounts 1999-2000, op cit, n 20 at 129.
26. See further A. Mehta and K. Hawkins, 'Integrated Pollution Control and Its Impact: Perspectives from Industry', 10 JEL 1 (1998) 61, 69.
27. 'Agency Flounders with Prosecution Policy', ENDS Report 315 (2001) 3. The findings are based on reviews carried out to a standard specification by the Agency's eight regions.
28. With decisions pending on 17% of cases.
29. This section focuses on the level of fines imposed by the courts. Although a number of other penalties, including prison sentences, can be imposed by the courts, Home Office statistics in 1997-98 indicate that where individuals or companies are convicted of offences under sections 23 and 33 of the EPA 1990 and section 85 of the WRA 1991, they are invariably fined.
30. It is alleged that judges and magistrates have very little experience of dealing with these offences, and have therefore failed to impose fines that reflect the impact that business has had on the environment and human health. See e.g. 'Environmental Offences: The Panel's Advice to the Court of Appeal' (1 March 2000) 2.
31. For example, the average level of fine increased from £3,500 in 1999 to £4,432 in 2000. Spotlight on Business Environmental Performance 2000 (Environment Agency, 2000) 14.
32. See e.g. Spotlight on Business Environmental Performance 2000, op cit, n 27 at 14: 'Although there has been a small increase in the level of fines, some businesses and individuals consider it cheaper to commit an environmental crime than comply with the law.' See also 'Crime Pays?' ENDS Report 316 (2001) 27.
33. See e.g. Spotlight on Business Environmental Performance 2000, op cit, n 27 at 14: 'Although there has been a small increase in the level of fines, some businesses and individuals consider it cheaper to commit an environmental crime than comply with the law.' See also 'Crime Pays?' ENDS Report 316 (2001) 27.
34. HC Written Answers, 30 November 2000, Cols 768-773W.
35. Select Committee on the Environment, Transport and the Regions, HC Session 1999-2000, 34 I-II, para 95.
36. See e.g. the Agency's statement in Spotlight on Business Environmental Performance 2000, op cit, n 27 at 14 where the Agency classes the level of fines imposed by the courts as a poor performer, staling that 'fines still do not reflect the impact that poor environmental management has had on the environment and human health.'
37. Op cit, n 26. Offences considered by Panel are listed in Annex A to the Panel's report. For a useful summary of the Report see N. Papworth, 'Environmental Offences: Views from the Sentencing Advisory Panel', 3 Environmental Liability (2000) 91-6.
38. Op cit, n 26. Offences considered by Panel are listed in Annex A to the Panel's report. For a useful summary of the Report see N. Papworth, 'Environmental Offences: Views from the Sentencing Advisory Panel', 3 Environmental Liability (2000) 91-6.
39. Op cit, n 12, para 21.
40. P. de Prez, 'Beyond Judicial Sanctions: The Negative Impact of Conviction for Environmental Offences', 2 Environmental Law Review (2000) 11, 13. The author surveyed 100 Agency officers including personnel from water pollution, waste management, IPC and radioactive substances regulation sectors. The survey found that 49% of Agency officers felt that adverse publicity was the most important consequence of prosecution, compared with 20% who felt that the fine was the most important. This distinction was more pronounced by those officers who regulate the large-scale chemicals industries.
41. See 'Hall of Shame' on the Environment Agency website (www.environment-agency.gov.uk). According to the recent Select Committee Report on the Agency, the 'naming and shaming' of companies has an important role to play in deterring non-compliance. However, the Committee was critical of the basis on which the tables were compiled, stressing the need for fair and consistent publication of environmental data (op cit, n 30, paras 88-94).
42. HC Written Answers, 26 February 2001, Col 314W.
43. S. Bell and D. McGillivray, Environmental Law, 5th edn (Blackstone Press, 2000) 580.
44. Environment Agency Annual Report and Accounts 1999-2000, op cit, n 20 at 130.
45. SI 1994/1056.
46. Waste Management Industry Training and Advisory Board.
47. 'Waste Competence Rules Force Few Site Closures For Time Being', ENDS Report 297 (1999) 18.
48. 'Agency Faces Enforcement Headache on Waste Competence', ENDS Report 314 (2001) 19.
49. Op cit, n 17.
50. Op cit, n 17, section 2, para 7.1.2.
51. Op cit, n 17, section 2, paras 7.1.5 and 7.1.6.
52. Below n 70, accompanying text and Figure 2.
53. G. Stigler, 'The Optimum Enforcement of Laws', 78 Journal of Political Economy 78 (1970) 526.
54. G. Becker, 'Crime and Punishment: An Economic Approach', 76 Journal of Political Economy (1968) 161.
55. For this purpose, p is a fraction of 1.00 which represents certainty. So, a potential offender should obey the law if, e.g. the profit from the illegal act (U) is £100, the chance of apprehension (p) is 1 in 5 (0.20), and the costs arising from being caught (D) are £800: 100 < 0.20 × 800.
56. A.M. Polinsky and S. Shavell, 'The Optimal Tradeoff between the Probability and Magnitude of Fines', 69 American Economic Review (1979) 880. The example given in the last note assumes risk neutrality (the individual derives neither utility or disutility from taking risks). But if another individual were twice as risk averse as the risk neutral individual he or she would be deterred from committing the offence even if the profit were £300 since 300 < (0.20 × 800) × 2.
57. So, for example, pD I might be the probability and costs of getting away with an informal warning, pD 2, the probability and costs of receiving a formal warning and so on.
58. I. Ayres and J. Braithwaite, Responsive Regulation: Transcending the Deregulation Debate (Oxford: Oxford University Press, 1992) 35. For a slightly different version, see B. Hutter, The Reasonable Arm of the Law? (Oxford: Oxford University Press, 1988) 149-53.
59. I. Ayres and J. Braithwaite, Responsive Regulation: Transcending the Deregulation Debate (Oxford: Oxford University Press, 1992) 35. For a slightly different version, see B. Hutter, The Reasonable Arm of the Law? (Oxford: Oxford University Press, 1988) 149-53.
60. K. Hawkins, 'Bargain and Bluff: Compliance Strategy and Deterrence in the Enforcement of Regulation', 5 Law and Policy Quarterly (1983) 35. See also the same author's Environment and Enforcement, op cit, n 1 at 149-53.
61. K. Hawkins, 'Bargain and Bluff: Compliance Strategy and Deterrence in the Enforcement of Regulation', 5 Law and Policy Quarterly (1983) 35. See also the same author's Environment and Enforcement, op cit, n 1 at 149-53.
62. See de Prez, op cit, n 34; also A. Blowers, Something in the Air: Corporate Power in the Environment (London: Harper and Row, 1984) 306.
63. See de Prez, op cit, n 34; also A. Blowers, Something in the Air: Corporate Power in the Environment (London: Harper and Row, 1984) 306.
64. Op cit, n 35 and accompanying text.
65. P. Fenn and C. Veljanovski, 'A Positive Economic Theory of Regulatory Enforcement', 98 Economic Journal (1988) 1055.
66. See J. Rowan-Robinson, P. Watchman and C. Barker, Crime and Regulation: A Study of the Enforcement of Regulatory Codes (Edinburgh: T & T Clark, 1990) 8 and the studies there cited.
67. Hutter, op cit, n 1.
68. Rowan-Robinson et al, op cit, n 57 at 255-63. See further the text accompanying n 33 above.
69. G. Williams, The Proof of Guilt: A Study of the English Criminal Trial, 2nd edn (London: Stevens, 1958) 154-8. In an interesting recent paper, it is justified as an effort rather to constrain the costs associated with abuses of prosecutorial or government authority: K.N. Hylton and V.S. Khanna, 'Toward an Economic Theory of ProDefendant Criminal Procedure' (2001) available at http://papers.ssrn.com/paper.taf?abstract - id=265795.
70. G. Williams, The Proof of Guilt: A Study of the English Criminal Trial, 2nd edn (London: Stevens, 1958) 154-8. In an interesting recent paper, it is justified as an effort rather to constrain the costs associated with abuses of prosecutorial or government authority: K.N. Hylton and V.S. Khanna, 'Toward an Economic Theory of ProDefendant Criminal Procedure' (2001) available at http://papers.ssrn.com/paper.taf?abstract - id=265795.
71. R. Posner, 'An Economic Approach to Legal Procedure and Judicial Administration', 2 Journal of Legal Studies (1973) 399.
72. To similar effect Posner, ibid at 410-17; L. Kaplow, 'The Value of Accuracy in Adjudication: An Economic Analysis' (1994) 23 Journal of Legal Studies 307, 349-62 and for commentary, Hylton and Khanna, op cit, n 60.
73. To similar effect Posner, ibid at 410-17; L. Kaplow, 'The Value of Accuracy in Adjudication: An Economic Analysis' (1994) 23 Journal of Legal Studies 307, 349-62 and for commentary, Hylton and Khanna, op cit, n 60.
74. To similar effect Posner, ibid at 410-17; L. Kaplow, 'The Value of Accuracy in Adjudication: An Economic Analysis' (1994) 23 Journal of Legal Studies 307, 349-62 and for commentary, Hylton and Khanna, op cit, n 60.
75. W. Blackstone, Commentaries Vol IV, 19th edn (London: Sweet & Maxwell, 1836) 358.
76. Op cit, n 60, assuming the 'beyond reasonable doubt' test to imply a probability of accuracy of 95%.
77. Hence their alternative explanation; see op cit, cit n. 60.
78. Posner, op cit, n 61 at 416, reaches the same conclusion. See also N. Garoupa and F. Gomez-Pomar, 'Punish Once or Twice: A Theory of the Use of Criminal Sanctions in Addition to Regulatory Penalties', Harvard Law and Economics Discussion Paper No 308 (2000) available at http: //papers.ssrn.com/paper.taf?abstract - id=260212.
79. Posner, op cit, n 61 at 416, reaches the same conclusion. See also N. Garoupa and F. Gomez-Pomar, 'Punish Once or Twice: A Theory of the Use of Criminal Sanctions in Addition to Regulatory Penalties', Harvard Law and Economics Discussion Paper No 308 (2000) available at http: //papers.ssrn.com/paper.taf?abstract - id=260212.
80. Cf. S. Shavell, 'A Model of Optimal Incapacitation', 77 American Economic Review (1987) 107.
81. S. Shavell, 'The Optimal Structure of Law Enforcement', 36 Journal of Law and Economics (1993) 255, 261-2.
82. J. Coffee, '"No Soul to Damn; No Body to Kick": An Unscandalised Inquiry into the Problem of Corporate Punishment', 79 Michigan Law Review (1981) 386, 390.
83. Op cit, n 51 at 35.
84. Op cit, n 52 at 36.
85. Op cit, n 52.
86. See, for example, section 7(4) Control of Pollution Act 1974 which provided for the revocation of waste disposal licences by the waste regulation authority and section 43 Water Resources Act 1963 which gave a river authority the power to revoke water abstraction licences.
87. Op cit, ns 36-41 and accompanying text. See to similar effect, on consumer credit licensing, C. Scott and J. Black, Cranston's Consumers and the Law, 3rd edn (London: Butterworths, 2000) 450.
88. Op cit, ns 36-41 and accompanying text. See to similar effect, on consumer credit licensing, C. Scott and J. Black, Cranston's Consumers and the Law, 3rd edn (London: Butterworths, 2000) 450.
89. Criticised on this ground in Rowan-Robinson et al, op cit, n 57 at 251-2.
90. Polinsky and Shavell, op cit, n 50.
91. Posner, op cit, n 61 at 416. He suggests, nevertheless, that since the agency (unlike a court) might weigh the benefits from a successful prosecution more heavily than the costs of punishing the innocent, constraints on the agency's power through, for example, judicial review are important.
92. Australian Law Reform Commission, op cit, n 4. See also: W. Funk, 'Close Enough for Government Work? Using Informal Procedures for Imposing Administrative Penalties', 24 Seton Hall Law Review (1993) 1; L.J. Kerrigan et al, 'Project: The Decriminalisation of Administrative Law Penalties', 45 Administrative Law Review (1993) 367; M. Gillooly and N.L. Wallace-Bruce, 'Civil Penalties in Australian Legislation', 13 University of Tasmania Law Review (1994) 269.
93. Australian Law Reform Commission, op cit, n 4. See also: W. Funk, 'Close Enough for Government Work? Using Informal Procedures for Imposing Administrative Penalties', 24 Seton Hall Law Review (1993) 1; L.J. Kerrigan et al, 'Project: The Decriminalisation of Administrative Law Penalties', 45 Administrative Law Review (1993) 367; M. Gillooly and N.L. Wallace-Bruce, 'Civil Penalties in Australian Legislation', 13 University of Tasmania Law Review (1994) 269.
94. Australian Law Reform Commission, op cit, n 4. See also: W. Funk, 'Close Enough for Government Work? Using Informal Procedures for Imposing Administrative Penalties', 24 Seton Hall Law Review (1993) 1; L.J. Kerrigan et al, 'Project: The Decriminalisation of Administrative Law Penalties', 45 Administrative Law Review (1993) 367; M. Gillooly and N.L. Wallace-Bruce, 'Civil Penalties in Australian Legislation', 13 University of Tasmania Law Review (1994) 269.
95. Australian Law Reform Commission, op cit, n 4. See also: W. Funk, 'Close Enough for Government Work? Using Informal Procedures for Imposing Administrative Penalties', 24 Seton Hall Law Review (1993) 1; L.J. Kerrigan et al, 'Project: The Decriminalisation of Administrative Law Penalties', 45 Administrative Law Review (1993) 367; M. Gillooly and N.L. Wallace-Bruce, 'Civil Penalties in Australian Legislation', 13 University of Tasmania Law Review (1994) 269.
96. Conseil d'Etat, Les 'pouvoirs de l'administration dans le domaine des sanctions (Paris: Documentation Française, 1995); European Commission, The System of Administrative and Penal Sanctions in the Member States of the European Communities (Brussels: Office for Official Publications of the European Communities, 1994).
97. Conseil d'Etat, Les 'pouvoirs de l'administration dans le domaine des sanctions (Paris: Documentation Française, 1995); European Commission, The System of Administrative and Penal Sanctions in the Member States of the European Communities (Brussels: Office for Official Publications of the European Communities, 1994).
98. The following two paragraph draw on the German national report in European Commission, op cit, n 79.
99. For example, J. Goldschmidt, Das Verwaltungsstrafrecht (Scientia, 1969, reprinting of original 1902 Berlin edition).
100. Gesetz zur Vereinfachung des Wirtschaftsstrafrechts.
101. Gesetz über Ordnungswidrigkeiten, 25 March 1952. The current legislation is Gesetz über Ordnungswidrigkeiten, 24 May 1968, as amended on 19 February 1987.
102. Gesetz über Ordnungswidrigkeiten, 25 March 1952. The current legislation is Gesetz über Ordnungswidrigkeiten, 24 May 1968, as amended on 19 February 1987.