Environment info centre

SAMPLE CONTENT

Here you can get a sneak preview of the kind of content you’ll find once you subscribe to the Info Centre. Simply choose the kind of content you want to look at and explore…

Environment Agency v. Veolia Water Solutions and Technologies (VWS) (2010)

Case overview

On 23 February 2010, Veolia Water Solutions and Technologies (VWS) pleaded guilty to ten environmental breaches at Selby Magistrates’ Court. The breaches occurred in 2008 and 2009 and related to its running of a Waste Treatment Plant (WTP) in Tadcaster. The WTP served two breweries on different sites, with one run by Scottish and Newcastle Breweries and the other by Molson Coors Brewing Company. The WTP was designed to take the effluent from these breweries, treat it and discharge it into the River Wharf once it was at permitted levels for suspended solids, Biochemical Oxygen Demand (BOD) and Ammonia.

All of the breaches carried a potential fine of £20,000 except for one, which carried a fine of £50,000 due to changes to penalties being introduced on that date. In all, around 300 breaches of its permits by VWS were to be taken into consideration.

In mitigation, VWS admitted that the incidences had provided a harsh lesson for the company. VWS had taken over consent for the Molson Coors site in November 2007 and the Scottish and Newcastle Breweries site in May 2008. VWS admitted that initially it did not have sufficient management systems in place to handle the discharges and that it was only during the initial bedding-in period following taking over responsibility that it began to understand the issues.

As soon as VWS’s Board became aware of the problems, it put in place measures to rectify them, although it did accept that the breaches covered a long period of time and that the management systems initially in place had proved to be inadequate.

VWS highlighted the fact that it had had no previous environmental convictions and had gained no financial benefit from the breaches. Also, no harm had been done to the public, nor had it been necessary to conduct any clean up operation. In addition to this VWS had cooperated fully with the investigation throughout and had pleaded guilty at the first opportunity.

VWS is no longer working for the Scottish and Newcastle Breweries site and on 1 April 2010 it stepped down from the Molson Coors site.

VWS submitted to the court that a high fine should be avoided as the conviction alone would have serious financial implication for VWS as they work in the environmental field and would have to declare the conviction in any tender bids. This would mean its bids would be marked down and they could lose a competitive advantage as a result. 

Official judgement

Case outcomes

The Magistrates held that VWS was responsible for a systematic failure over a lengthy period to comply with its permit obligations. This had been the direct result of the poor management systems that the company had put in place. The Magistrates therefore fined the company a total of £40,000 plus full costs of over £11,000.

Expert review

The Environmental Permitting (England and Wales) Regulations 2007 (EP Regulations) were introduced to streamline and integrate the previously separate Waste Management Licensing and Pollution Prevention and Control Regulations. The EP Regulations define specific activities (Schedule 1 to the Regulations) which require Operators to apply for and adhere to a permit to operate. Permits are issued from the relevant regulatory authority (Environment Agency or Local Authority) and contain detailed conditions that effectively regulate the operating performance of the Installation.

The content of permits issued under the EP Regulations is unique to each Installation, but the structure of each permit usually follows generic overarching principles. These include specifying emission limits, monitoring techniques and frequencies, as well as the processes for interpreting and communicating results. In the case of discharges to water, for example, effluent emission parameters typically include pH, pollutant concentration, temperature, BOD and volume, while monitoring requirements may be by either spot sampling or continuous analysis. Other key conditions in permits issued under the EP Regulations are management issues, which normally address minimum requirements for competence and training, record keeping and calibration and maintenance of key process plant and equipment. Permits will also clearly detail the process to be followed in the event that an emission discharge exceeds stated limits and this always requires communication with the regulator.

In the case of Veolia Water Solutions and Technologies (VWS), which has recently been fined more than £51,000 for breaching the conditions of its Environmental Permit, several issues warrant further consideration. Firstly, the scale of the breaches (VWS pleaded guilty to ten breaches of permit conditions and asked for a further 306 to be taken into consideration) raises concerns as to the overall effectiveness of internal operational controls designed to manage permit compliance. Secondly, the duration of the breaches, which were understood to have occurred regularly between June 2008 and July 2009, and most importantly, that according to Environment Agency prosecutor, Craig Burman, VWS was aware of the breaches but did not act to avoid them.

Managing the composition and ultimate discharge of effluent was the central part to the permit requirement, as it is this aspect that gives rise to the most significant potential environmental impact if not adequately controlled. The permit conditions specified emission limits for effluent composition, including suspended solids, ammonia and BOD, with the requirement that these parameters be monitored daily with any breaches reported to the Environment Agency.

The results of the VWS effluent monitoring highlighted that effluent discharge appeared to be persistently exceeding permit emission limits, which, assuming that monitoring equipment was fully functional and calibrated, suggests the root cause lies within the area of training, competence and communication. However, this conclusion ignores the responsibility of VWS senior management who have ultimate responsibility to verify the accuracy of data results, monitoring techniques and, more broadly, to seek assurances that the full requirements of the Environmental Permit was being effectively managed.

In summing up the case, Magistrates concluded the breaches represented a systemic failure, and it is difficult to argue to the contrary, based on the scale and duration of the permit breaches. It is a matter of fact that comprehensive and demonstrable compliance with all Permit conditions should not only have been prioritised by VWS management, but also have been routinely subject to internal audit and checking processes.

This case highlights the direct financial implications through court fines that can result from breaching environmental law. But, perhaps more importantly, it also highlights the less quantifiable but unquestionably more damaging impact upon reputation and image amongst key stakeholders. This latter issue was of such significance that it was specifically addressed by VWS in an attempt to stave off a large fine, citing future commercial disadvantage in the tendering process. The extent to which the long-term business performance of VWS will be affected by this case is a matter for the future to determine, but in the present there can be little doubt surrounding the importance of effective environmental compliance management.