Visits by Environment Agency or HSE Inspectors will be routine for companies operating under an environmental permit or caught by regulations to prevent major accidents. Such inspections focus on whether the company is operating in accordance with legal requirements, and can either be a routine inspection, or may take place following a complaint alleging non-compliance, for example odour problems.
However, we all know that occasionally things can go wrong, even for well managed companies operating in accordance with best practice.
In these situations, where an incident has triggered an investigation by the regulator, the focus and nature of the inspection will be very different to the routine visits the company will be used to dealing with. Here, the regulator will, from the outset, be considering whether there is evidence that the company has committed offences, and whether prosecution or some other penalty should follow.
This article will look at the powers of regulators (such as the Environment Agency and HSE) to investigate offences, how you can prepare for a crisis, and how best to respond in the immediate aftermath of an incident.
Powers of the investigating authorities
All regulators must investigate incidents which fall within the scope of their enforcement powers, and in accordance with their enforcement policies. The powers of both regulators are very wide and officers have broad tools available to obtain evidence, namely inspection and sampling, taking statements from employees, and seeking to formally interview the company (or its directors) under the Police and Criminal Evidence Act.
The Environment Act 1995 gives Environment Agency officers wide powers of entry to carry out an inspection to determine whether any relevant environmental laws have been breached. They also have powers of examination, to require the production of any record, take samples, photographs to name but a few. There is also a power for the officers to require use of facilities and assistance and this would extend to the need to use a photocopier or other office equipment to assist their investigation.
In order to exercise those powers, the officer must have the necessary authority from the Environment Agency, which must delegate those powers to that person. They must act in accordance with their authorisation and cannot exceed their statutory powers. The officer is required to produce evidence of their authority before exercising their statutory powers and entry to premises must be at a reasonable time unless the situation is an emergency.
One important power enables officers to require information from any person they think may be able to provide information relevant to the investigation. This power is often used to question employees. The employee is protected from prosecution as their answers are not admissible against them in evidence. However, such answers are admissible in evidence against the employer or its directors.
While officers can ask to inspect and copy documents, this does not apply to any documents covered by legal professional privilege. This applies wherever documents have been prepared in connection with legal advice taken by the company in contemplation of litigation.
It is an offence to intentionally obstruct an authorised officer in the performance of their powers or duties or fail, without reasonable excuse, to comply with any requirement of Section 108.
The powers of an inspector for the HSE are very similar to an Environment Agency officer and under Section 20 of the Health and Safety At Work Act 1974, all the same powers are available to HSE officers as are available to Environment Agency officers.
One of the most important investigation tools is the power to require any person the inspector believes can give relevant information to answer questions. Failure to comply with this request for information is an offence and there is a maximum fine of up to £5,000. Again, while the information given cannot be used in evidence against the person (usually an employee) answering the questions, it can be used in evidence against the company or its directors.
Again, there are offences and punishments available if the officer is obstructed, but there is nothing in the legislation to compel someone to hand over a document which is legally privileged.
All investigations must be compliant with the Police and Criminal Evidence Act 1984. For example, the same code of practice which applies to interviews with the Police applies to interviews with company representatives or directors.
Once the preliminary stages of the investigation have been completed the company is likely to be invited to attend a cautioned interview. Any information provided by a company representative during this interview will then become evidence. It is important to ascertain whether a director or other senior manager of the company is being interviewed in his personal capacity or as a representative of the company. If the company (or director) has been called to an interview this means that the regulator has reasonable grounds to suspect that an offence has been committed. Therefore you should never attend a cautioned interview without first taking legal advice and taking a legal representative with you.
While no offence is committed if you decline to take part in a cautioned interview, should your company later wish to contest the allegations, adverse inferences could be drawn from failure to mention something during the interview. Therefore serious consideration needs to be given to any request by the regulator for a cautioned interview with a company representative or director.
Sometimes, particularly where the offences are very complex, it can be better to provide a written response to the regulator. That way, the company can still set out its position, show it has co-operated with the investigation, and set out the reasons why the company should not be prosecuted, including any mitigation. There is no strict rule and the most appropriate course of action depends upon the circumstances of each individual case.
Immediate response
The company’s response in the immediate aftermath of an incident is vital and can have a significant bearing on the adverse publicity that surrounds any serious environmental or health and safety incident. The company’s response can also have a bearing on whether the company (or its directors) are likely to face prosecution.
As a general rule, it is always better to be helpful and co-operative with officers/inspectors, and it is often important mitigation that the company has co-operated with the regulator. But a word of caution, staff members should answer specific questions but should not volunteer information – if they do not know the answer to a question they should not speculate. During the inspection a specific member of staff should accompany the officer/inspector and take a note of what he/she observes. It can also be helpful if the member of staff takes their own set of notes during the inspection including any remarks made by the officer/inspector, duplicate photographs and so on.
Planning for an emergency
Any company that is able to implement a considered response to an incident quickly and effectively will stand a better chance of persuading the regulator that the company should not face prosecution. In contrast, a poor response will be damaging, and the company’s opportunity to influence the approach to be taken by the regulator will be lost.
Companies need to consider the potential emergency situations that could arise, and prepare detailed action plans, setting out which member of staff is responsible for what action. Staff can then be trained on the plan to ensure that, if the worst happens, they are well placed to implement it. Preparing emergency action plans will involve a senior company officer thoroughly reviewing the company’s activities to consider any significant risks to health and safety or the environment. Sometimes external consultants are very helpful when undertaking this exercise.
Staff members should avoid the production of communications, such as emails, which speculate on what may or may not have happened. These would not attract legal privilege and would then have to be disclosed to the officer/inspector which can be very damaging. Staff need to be trained to be aware of the importance of maintaining confidentiality in these situations. It is advisable for the crisis team leader and the company’s legal team to be solely responsible for the creation and exchange of such communications. By restricting communications to these key people it is easier to argue that any documents created attract legal professional privilege so do not have to be disclosed.
Unfortunately, too often in regulatory cases, solicitors are consulted well after the initial investigation. It is much more difficult to persuade a regulator not to proceed with prosecution once a summons has been issued. It is also impossible to undo any damage done by a company officer making admissions during cautioned interview that he should not have made. We would, therefore, advise that you to have your lawyer involved as soon as an incident occurs.
Some defences for environmental pollution offences rely upon immediate notification of the incident to the regulator so this will need to be given careful consideration and form part of the plan. You will also wish to consider whether you should shut down production and secure the site, and whether you need to notify the company’s insurance company. Finally, for a serious incident, it will be important to include a media strategy as part of the crisis management plan.
Whilst it always difficult to face a significant environmental or health and safety incident which results in investigation, if an emergency action plan has been put in place and is followed, this should give the company the best possible chance of avoiding prosecution. If the worst happens, the time and expense spent creating and implementing an emergency action plan will feel like money well spent, even in these days of austerity.
Julie Goulbourne is a specialist environmental law and regulatory defence solicitor at Stephensons Solicitors LLP. She acts for companies and directors facing criminal proceedings or other regulatory action and has over 20 years’ experience including many years at the Environment Agency.
Email: jgo@stephensons.co.uk
Telephone: 01616 966 229