Oil & Gas

The new Offshore Environmental Civil Sanctions Regulations 2018 are here.

At present, only the onshore environmental regulators (SEPA in Scotland and the EA in England/Wales) have the power to issue civil penalties instead of pursuing those in breach by criminal prosecution (with civil penalties under the emissions trading scheme regulations being the exception).

As a result, the Offshore Petroleum Regulator for Environment and Decommissioning (“OPRED”), which is tasked with policing offshore environmental regulations, faces the hurdles, delays and costs – to the regulator and to the public purse – associated with criminal prosecution in relation to serious breaches. This dependence on criminal proceedings can result in less enforcement action where there are insufficient resources available.

This year the UK Parliament passed the Offshore Environmental Civil Sanctions Regulations 2018 (“the Regulations”) which seek to provide “a more appropriate and proportionate enforcement option”. In essence, the Regulations make it easier for OPRED to penalise offshore environmental breaches.

But does easier environmental enforcement mean increased environmental enforcement?

In consultation, the Government assured the public that the intention is only to pursue serious breaches of environmental regulations which would currently be considered for criminal prosecution. Currently around 10% of known offshore environmental contraventions are considered by OPRED for criminal prosecution and it is envisaged that civil sanctions will now be considered in relation to that same category of contraventions.

It is important to note that OPRED’s stated approach is a matter of policy; it is not enshrined in the Regulations. The Regulations permit penalties to be applied as long as OPRED is satisfied that a criminal case in relation to the offence would be successful; the severity of the breach is not a factor. However, the “only for severe breach” policy was not unequivocally adopted by the Minister for Energy and Clean Growth, Claire Perry, when she indicated, in a parliamentary committee, that the Regulations provide a “more timely and cost-effective response” for operators “that have committed only a minor breach that they are anxious to put right but for which there is currently no sufficient penalty regime”.

The Regulations provide the opportunity to appeal the penalty being proposed for various reasons, including: the decision was based on an error of fact; it was unreasonable; it was wrong in law; or “any other reason”.

So how will the new regime work? The Regulations have already been passed by Parliament; they are now in force but can only be applied to environmental breaches occurring on or after 1 November 2018. By this date OPRED is expected to formulate and publish guidance on the circumstances in which penalties are likely to be imposed and the processes surrounding objecting to and appealing any penalties issued.

We will issue an update about the guidance in due course, but in the meantime, you can find out more in our handy guide on the key take-aways from the Regulations.

For more information on how these Regulations could affect your business, please get in touch with me, Paul Marshall or your usual Brodies contact.

Fran Hutchison

Fran Hutchison

Associate at Brodies LLP
Fran joined Brodies’ Government, Regulation and Competition team as an Associate in June 2018. Specialising in corporate crime and investigations, Fran has more than six years of experience advising clients on all aspects of corporate compliance including anti-bribery and corruption, export and international trade controls (including trade with Iran and Russia), health, safety and environmental regulations and other regulatory areas.
Fran Hutchison