Managing Environmental Risks
Is your business aware of its impact on the environment and the potential penalties for getting it wrong?
When it comes to protecting your business, making sure your activities aren’t causing environmental harm is incredibly important as a breach of environmental law could have a profound effect on your business’s success.
What exactly does the term ‘environment’ mean?
When considering the environment, most people think of trees, rivers and animals, when in fact it encompasses most things around us, even other people.
ISO 14001:2015 defines the environment as ‘’The surroundings in which an organisation operates, including air, water, land, natural resources, flora, fauna, humans and their interrelationships’’, and these surroundings can extend from within the organisation to the local, regional and global system.
Environmental law covers all of the above aspects, so when considering what impact the organisation’s activities have on the environment it’s worth keeping in mind that these are not just direct, such as where we directly dispose of our waste, but also indirect, such as where our suppliers gain their materials.
What are the potential penalties and additional costs?
Most breaches of environmental law are criminal offences and carry penalties of a fine and/or imprisonment. For cases tried in the Magistrates’ Court, the maximum penalty is a fine of up to £50,000 and/or six months’ imprisonment, whilst cases tried in the Crown Court could incur an unlimited fine and/or two years imprisonment.
When considering the costs of environmental accidents, it is highly important to consider direct and indirect costs, as well as the insured and uninsured costs.
Direct costs are measurable and arise from an accident and / or any claim for liability in the civil or criminal courts.
These include elements such as:
- Repairs or replacement of damaged equipment and buildings;
- Product loss or damage,
- Loss of production,
- Public and/or product liability,
- Legal fees and
- Increases in insurance premiums.
Indirect costs may also be incurred as a result of an incident, but do not generally actually involve the payment of money. As these costs are largely immeasurable, they can be difficult to account for. In certain circumstances, they may be extremely high.
These include elements such as:
- Business interruption,
- Loss of orders,
- Cost of time spent on investigations and
- Loss of corporate image.
Not only does your business need to consider direct or indirect costs, but if your insurance will cover them. Uninsured costs usually include all indirect costs, as well as those relating to a loss of production as a result of many types of incident. Insurances may also be voided where it can be shown that the business had not taken adequate precautions to prevent the incident. Uninsured losses can be many times greater than insured losses.
What harm might your business cause the environment?
There are 000’s of different ways businesses can cause adverse effects on the environment. These can extend locally, regionally or even on a global scale. When considering how your business affects the environment, there are a few elements you should consider.
To learn more about each area of environmental risk and the potential damage they could cause your business, check out the toggles below.
There are many ways your business can affect the air quality on a local, regional and global scale. The contaminates of air are elements such as:
· Vehicle emissions,
· Fibres (i.e. wood, asbestos) etc.
By considering your activities and how they may release contaminates into the air, you are reducing the risk of enforcement and the associated costs.
In 2006 a hazardous waste company from the north west released toxic fumes into the air that left four members of staff needing medical treatment along with several members of the public reporting side effects.
The company had inadequate emergency plans and breached the conditions of their waste management license by accepting waste they were not permitted to hold and then stored it with another chemical substance. This resulted in a joint prosecution by the HSE and the Environment Agency which resulted in a £101,000 fine as a result of the eight charges brought against them, along with paying a further £65,000 in costs.
These types of breaches can be avoided by having the proper procedures in place and ensuring they are rigorously followed. (full story can be found here: Bootle Company Fined)
Some of the most common causes of environmental issues relating to land are:
· Hazardous waste,
· Leachate (i.e. from waste skips etc.)
Making sure your business has adequate procedures in place to reduce the likelihood of land pollution occurring is a key element to mitigating the risk of receiving hefty enforcement and the associated costs incurred, especially when it comes to remediation costs of putting the land back to its original state.
Back in 2013 a scrap metal company had been delivering large quantities of waste to a third party for disposal. The third party were licensed to take agricultural waste for deposit over agricultural land it owned, however the nearly 4000 tonnes of contaminated waste soil was revealed to include plastics, metals and household waste.
Norwich Crown Court fined the company £3600 after finding it guilty of allowing contaminated waste materials to be illegally deposited on the land. The court also ordered the company to pay full prosecution costs of £4718.
The documentation accompanying the waste was also found to be incorrect as it only identified soil waste and not the above waste types. In imposing the level of the fine, the court noted that the defendant’s actions were not primarily financially motivated and that there were other mitigating circumstances to consider, resulting in a lower level of fine than may otherwise have been applicable. (full story can be found here: Waste – Breach of Duty of Care)
Water pollution can be one of the costliest pollutions to rectify due to the extensive remediation costs as well as the pure size of the potential problems caused. A spill into a freshwater sewer left unchecked has the potential to pollute an entire eco system living in rivers, lakes, oceans etc.
Some of the most common pollutants to water are:
- Sewage (may contain solids such as wood, plastic waste, textiles etc.).
- Hazardous chemicals.
- Unauthorised discharges from manufacturing facilities.
- Construction site run off.
It is highly important to not only have the procedures in place for preventing discharge into water courses, but also what to do in the event of a spill or contamination, such as having appropriate emergency plans in place.
In 2017, a Leeds-based house building company was sentenced after it was found to be discharging contaminated run-off into a water course from a Huddersfield construction site. The effects that the discharges were having on the water quality in the watercourse were registered up to 3 kilometres downstream. The company were fined £120,000 for illegally polluting a watercourse and were ordered to pay an additional £8,706.71 in legal costs as well as a £120 victim surcharge. (full story can be found here: Watercourse Pollution).
Noise is an issue most companies identify as a health and safety issue for their workforce, but noise becomes an environmental issue when considering who or what it affects when it is being emitted outside of the workplace. Some of the causes of noise pollution are:
- Construction Noise (such as drilling, sawing etc.)
- Vehicles (Plant, delivery vehicles etc.)
- Manufacturing Processes (such as assembly lines etc.)
By considering noise as an environmental as well as a health & safety issue your organisation is not only protecting the health and wellbeing of your workforce, but also reducing the likelihood of prosecution should the noise affect the surrounding environment.
After numerous complaints from locals and interventions from the local council, a Bangor based construction company were sentenced in 2014 for causing noise nuisance from a building site. It was reported that they were breaking the imposed conditions set by the council that the construction work be limited between 8am and 6pm Monday to Friday and 9am to 1pm on Saturday. Yet residents, some with young children, have been disturbed by noise through weekends, early in the morning and late at night. The noise was caused from sources such as nail guns, saws, generators, skip collections at inappropriate times and forklifts continuously using reversing bleepers straight into residents living rooms.
The company were ordered to pay £6,000 for the four charges of breaching the relevant legislation and were also ordered to pay costs of £3,511.48 to the council as well as a £120 victim surcharge. (full story can be found here: Noise Pollution).
How we conduct business not only affects the local or regional wildlife, but also affects wildlife on a global scale. The UK is home to many protected species and adversely affecting their habitats can come at a great cost.
The most common causes of impact to fauna are:
- Waste(leading to death in animals or habitat being destroyed)
- Deforestation (due to high demand for materials etc.)
- Noise(causing forced evictions of animals)
A civil engineering company were sentenced in 2018 for illegally dumping more than 5,000 tonnes of construction waste into two land hollows in Herefordshire. The dumping of waste was compounded by the fact that the site was a habitat for great-crested newts, a European protected species. According to the Environment Agency, the actions of the company resulted in the disturbance, injury and killing of some of the newt population.
Great-crested newts are the largest species of newt in the UK and are protected by UK law, meaning to disturb or damage them or their nesting sites is punishable by unlimited fines and up to six months in prison. The company were ordered to pay £50,000 in fines and a further £50,000 towards prosecution costs. (full story can be found here: Protected Species).