Lessons to be learned for EPA licensees

• Ireland

• General

18-07-2017

On 11 July 2017, the Environmental Protection Agency (the “EPA”) released the Industrial and Waste Licence Enforcement Report for 2016 and the report indicates that the waste and food and drink industries will continue to be key areas of focus for enforcement by the EPA.

As can be seen below, any licence holder should begin with an expectation that their site will be inspected at least once in the coming year. However, certain licensees can expect greater scrutiny from the EPA than others. It is a policy of the EPA that each licensed site is categorised in terms of its perceived risk to the environment – with those that are deemed high risk inspected more often.

Assuming trends continue the report shows:

• Licensed sites have a two in three chance of being inspected by the EPA and more than half of those inspected may be inspected more than once in any given year.
• Licensees should ensure that they are always prepared for a site visit as they generally occur without prior warning. The report indicates that 95% of site visits in 2016 were unannounced.
• Twenty seven sites were visited after activity had ceased. Licensees who intend on shutting down their site should ensure that the cessation of activity is carried out in accordance with the terms contained in their licence.
• Licensees in the food and drink sector should ensure they are prepared for inspection in the next year. Over 90% of licensed sites in the food and drink sector were inspected in 2016.
• Water quality will be a key area of focus for the EPA in 2017. The most common type of site inspection in 2016 involved water sampling with routine inspections being the second most common.
• Complaints from the public form a key factor in identifying non-compliances.

Non-compliances

Licences granted by the EPA contain a number of conditions which the licensee is obliged to comply with and a finding of non-compliance is generally the first step towards EPA enforcement. The report identifies that the greatest number of non-compliances were recorded in the food and drink sector, with the waste sector the next worst offender. Significantly, the report records that 8% of all non-compliances related to a failure to notify the EPA of an incident at a licensed site. Compliance investigations by the EPA can, often of necessity, last as long as the underlying non-compliance remains an issue. Often, the solutions may take a great deal of time (eg new infrastructure, processes or authorisations) and the EPA will generally maintain an oversight to ensure these are carried out correctly. If they are not, enforcement proceedings may follow.

The EPA commenced 30% more enforcement proceedings last year than the year before. This increase in prosecutions is yet another example of a toughening approach on the EPA’s behalf. The EPA have demonstrated that they will not hesitate to use the full range of powers available to them to ensure compliance. We expect that this will be borne out in the coming year, with a further increase in prosecutions.

National Priority Sites

A notable measure introduced by the EPA in recent years is the identification of National Priority Sites. This system provides a ranking based on past records of compliance. Being categorised as a National Priority Site brings with it a greater degree of scrutiny from the EPA. The rankings are not static, with the EPA updating them on a quarterly basis.

In total, twenty five sites were classified as National Priority Sites during 2016. Once again, the food and drink and waste sectors were identified as the biggest offenders with eight sites out of the twenty five respectively.

As such, it appears that there is a strong likelihood that the EPA will heavily target these sectors in the coming year. Licensees in these sectors should be prepared for more frequent site visits, a greater willingness to institute Compliance Investigations and, ultimately, an increased threat of prosecution.

Financial provision

Securing financial provision is also stated to be a key part of the EPA’s strategy. The amount of financial provision secured increased by over 200% in 2016. This focus is to ensure that there are adequate finances in place to manage environmental risks.

We believe that this will continue to be an area of focus for the EPA in 2017. Licensees can expect to be required to set aside a greater portion of their finances by way of bonds, guarantees or insurance to cover potential liability for an environmental incident. Our Planning and Environmental team will be on hand to help negotiate the terms of your financial provision to ensure compliance has a proportionate impact on your finances.

Key lessons from the report

0. Licensed businesses in the waste and food and drink sectors should ensure that they are prepared for inspection in the coming year. These two sectors were identified as being the least compliant sectors in 2016.
0. Water quality will also be a significant area of focus for 2017. Water sampling was the most common type of site visit in 2016 while water quality accounted for the highest amount of open investigations in 2016. The report also states that the greatest concern at National Priority Sites was the potential for water pollution.
0. Odour was the most common cause of public complaints and the report specifically identifies the resolution of odour problems as a key priority.
0. Licensees should take proactive steps to ensure compliance, particularly in light of the development of National Priority Sites. As well as bringing reputational damage, categorisation as a National Priority Site also brings with it the added inconvenience of closer EPA scrutiny. Generally speaking, it will be more difficult to get off the list than to get on it, and as such, licensees should review their activities as soon as possible to ensure they are in compliance with any obligations contained within their licence. Further, any open investigations and public complaints should be dealt with as swiftly as possible.
0. Licensees should carefully examine the terms of their licences to determine their reporting obligations. As can be seen from the report, the EPA can prosecute a licensee for a failure to report an incident. Further, the scoring system used for identifying National Priority Sites assigns a greater weight to incidents which were not reported than to those that were.
0. As site inspections are generally unannounced, a proactive approach is again key to avoid being caught on the hop. Further, the possibility that the EPA may inspect more than once a year should keep licensees on their guard all year round.
0. Licensees who intend to shut down their licensed operations should ensure that this is done correctly as the EPA may still inspect these operations after activity has ceased.
0. Recent comments from the director of the EPA’s Office of Environmental Enforcement should also serve as a warning to directors of companies holding a licence. Speaking following the naming of the National Priority Sites at June 2017, the director stated that “the EPA will escalate enforcement action against companies, and their directors, if compliance does not improve”. The EPA’s Enforcement Policy specifically states that the Office of Environmental Enforcement may also take action against officers of a company in appropriate circumstances. This includes, for example, a situation where it is proven that the offence was committed with the officer’s consent or due to their negligence.

• Stephen Barry
• Partner
• +353 1 6644 284
• +353 1 6644 284

• Mark Varian
• Partner
• +353 1 6644 341
• +353 1 6644 341

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