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Civil penalties for offshore environment breaches in force from October

A new civil penalty regime for environmental law breaches by offshore oil and gas companies will come into force on 1 October 2018.17 Aug 2018

The Offshore Environmental Civil Sanctions Regulations will allow the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) to impose fixed and variable monetary penalties for breaches of some existing offshore oil and gas environmental regulations, which are currently criminal offences.

The new civil sanctions will only apply to offences committed after OPRED publishes statutory guidance on the operation of the new regime, which it is due to do by 1 November 2018.

"This means that companies have a small amount of time before 1 November to check their compliance with the environmental regulations and make necessary changes to ensure compliance, before the new regime is introduced and imposition of penalties is much easier for OPRED," said environmental law expert Georgie Messent of Pinsent Masons, the law firm behind Out-Law.com.

"We will be closely monitoring the impact of this new civil penalty regime," she said.

The regulations were subject to consultation in January 2018. At the time, OPRED said that the intention behind the new regime was to address "concerns that the current enforcement measures do not provide sufficient deterrent against non-compliance".

"Within the current regime there are no financial sanctions available to OPRED unless the case is subject to criminal prosecution, which although they can result in substantial financial penalties being imposed by the criminal courts, are slow, resource intensive and costly to pursue. The introduction of the 2018 Regulations will provide OPRED with a more flexible, proportionate and timely enforcement response in respect of breaches that amount to criminal offences and would otherwise be dealt with by prosecution," it said.

The new sanctions will apply to offshore oil and gas operators engaged in hydrocarbon-related activities on the United Kingdom Continental Shelf (UKCS), including oil and gas operations, gas unloading and storage operations and carbon dioxide storage operations. They would only be available in respect of breaches which presently amount to criminal offences, and OPRED must be satisfied to a criminal standard of proof that a breach has occurred. However, any civil penalties imposed by OPRED would be instead of, rather than in addition to, criminal prosecution under the current enforcement regime.

OPRED will be able to impose fixed monetary penalties, ranging in scale from £500 to £2,500, which will apply to the majority of breaches. It will also be able to impose variable monetary penalties, subject to a £50,000 maximum limit, which will only be applied in the most serious of cases. The amount of a variable penalty will be decided based on OPRED's enforcement policy, and taking into account any aggravating or mitigating factors.

Operators subject to civil sanctions will receive a 'notice of intent' from OPRED, setting out the grounds on which the sanction has been imposed and the amount. The operator will then have a period of 35 days in which to discharge the penalty by paying two thirds of the stated amount, or to make written representations to OPRED setting out why the sanction should not be imposed. Once this period has passed, OPRED will make a final decision on whether to impose the sanction, issuing a final notice if necessary.

A right of appeal to the First-tier Tribunal (General Regulatory Chamber) is available in respect of any civil sanctions imposed by OPRED.