Scottish businesses urged to go 'beyond' environmental compliance in new SEPA strategy

SEPA intends to use its new powers under the 2014 Regulatory Reform (Scotland) Act to "encourage and support" those businesses that choose to go beyond their basic responsibilities under environmental laws, while at the same time taking firm action against non-compliance, according to its new 'strategy for 21st century regulation' (12-page / 698KB PDF).

"By identifying where individual businesses and industry can go beyond compliance, Scotland has the unique opportunity to set the trend on a global scale," said Terry A'Hearn, SEPA's chief executive.

"There are huge economic incentives for going beyond basic compliance. Especially as pressure on our current resources becomes greater, it will ultimately be businesses that are more sustainable that will continue to thrive, helping to create mire lasting and inclusive growth in Scotland," he said.

Planning and environmental law expert Gordon McCreath of Pinsent Masons, the law firm behind Out-Law.com, described the new strategy as "yet another fundamental shift for environmental regulation in Scotland".

"The word that keeps coming up is 'help'," he said. "SEPA's job is no longer just to 'wield the stick' - it is to help regulated persons go beyond compliance, advising and working in partnership with them at a senior level. Larger organisations should be thinking about who at board or senior management level will engage with SEPA; while industry bodies will need to plan to make the most of the opportunity to influence SEPA's sector plans on how they will regulate and 'help' them."

"But what happens if you don't let yourself be helped? If businesses don't allow themselves to be helped to go beyond compliance, will the 'stick' reappear and the standard of compliance just be tightened instead? In the new enforcement framework, there is already provision for SEPA to only approve enforcement undertakings that go beyond compliance. This new strategy suggests that we might well see more of that approach," he said.

Passed in January 2014, the Regulatory Reform (Scotland) Act gave SEPA a new statutory purpose: to protect and improve the environment in ways that, as far as possible, create both health and well-being benefits and sustainable economic growth. The new strategy document sets out how SEPA will develop "a range of new regulatory tools" with which to deliver this objective.

SEPA intends to take a proportionate and effective approach to enforcement, while at the same time phasing in the practical use of the new enforcement powers granted to it under the Act. These include the ability to issue fixed and variable monetary penalties of up to £40,000 in relation to environmental crimes without having to take offenders to court, as well as the power to accept voluntary 'enforcement undertakings' from offenders committed to changing their behaviour in a wider range of circumstances.

The regulator intends to develop 'sector plans' covering each of the business areas that it regulates, which will set out what it expects of those businesses and what businesses can expect of SEPA. These plans will focus on "practical ways of delivering environmental, social and economic benefits", the regulator said.

As part of its new approach, SEPA intends to increasingly interact with businesses at "the most senior levels, as this is where the most important business decisions are made". It will develop voluntary, but formal, 'sustainable growth agreements' (SGAs) through which "influential" businesses will be able to deliver "clear practical actions" for the benefit of the environment with agreed support from SEPA. The regulator intends to have signed three of these by the end of the current financial year, according to the strategy document.

The new approach will require SEPA to work collaboratively with businesses at both the individual and industry level in order to "drive and support innovation", according to the document.

"We believe this is a unique and visionary approach, which will transform SEPA into a truly world class environmental protection agency, and Scotland into one of the first places in the world to be home to a genuinely 21st century environmental regulator," it said.