In this latest Environmental Law News Update, Charles Morgan, Christopher Badger and Mark Davies consider the sentencing in a case involving a conspiracy to defraud the WEEE régime, carbon credits and emission monitoring plans under consideration at a key international aviation industry meeting and stark warnings about the dangers of a no-deal Brexit from the Institute for Government.
Where’s There’s Muck There’s Money …
In 2016 Terence Dugbo was convicted of conspiracy to defraud WEEE compliance schemes by the creation of false WEEE evidence notes and sentenced to 7½ years in prison – the longest sentence for environmental crime ever secured by the Environment Agency. The WEEE régime has always had the potential, for dishonest people, to be a licence to print money – almost literally, since the issue of WEEE evidence notes creates an automatic obligation upon compliance schemes to purchase them in order to make their books balance at the end of each compliance year. Dugbo’s scheme was essentially simple – scrutiny of his recycling company’s collection records (a task which occupied an Environment Agency officer for a whole year) revealed that, for example, a vehicle registered as a moped was recorded as having collected 991 TVs and 413 fridges in a single day, much of it from false addresses.
Last week, following a Proceeds of Crime Act hearing, the Crown Court at Leeds (HHJ Jameson QC) concluded that only 10% of the company’s activities were attributable to actual recycling, the minimum necessary in order to create the illusion of a genuine business. The court ordered Dugbo to repay £1,373,060 or to serve a further 8 years in prison. The full press release can be found here:
Six Pump Court’s Richard Barraclough QC (leading Kate Kelleher of 36 Bedford Row) has represented Dugbo throughout the proceedings. Charles Morgan represented Dugbo’s co-accused at the trial in 2016, at which she was acquitted. Richard Barraclough is also a tenant at St. Paul’s Chambers, Leeds, where Simon Bickler QC (who led Charles Morgan) is Head of Chambers.
Carbon credits and emission monitoring plans, due to land on the Aviation industry
On 7 February 2019 the President of the International Civil Aviation Organisation addressed the 11th Meeting of the ICAO’s Committee on Aviation Environmental Protection in Montreal and underscored how “the global importance of environmental protection has grown immensely over recent decades, and with it the significance and relevance of the work of ICAO in minimising the effects of global civil aviation on the environment.”
Part of the work of the ICAO includes a global Carbon Offsetting and Reduction Scheme for International Aviation or ‘CORSIA’. For several years the ICAO has been negotiating to develop an international framework for treatment of GHG emissions from aviation. Progress has been very slow – a factor that led to the EU including aviation emissions within the EU ETS (since subject to a significant derogation after a Court challenge by several US aircraft operators).
CORSIA, the result of the ICAO’s deliberations, is based largely on a system of carbon credits. 2021 – 2023 will see a pilot phase for States to voluntarily participate in CORSIA. As of January 2019, 78 States, including all EU countries and the US have voluntarily agreed to participate form 2021. Mandatory participation won’t actually be brought in until 2027.
However, irrespective of CORSIA, all States with operators that undertake international flights must now develop a monitoring, reporting and verification (‘MRV’) system for CO2 emissions. Operators must submit an Emissions Monitoring Plan (‘EMP’) to its relevant State authority, the deadline for which is 28 February 2019. EMPs that meet the necessary requirements will be approved by that authority. Airline operators must then submit verified annual emissions reports, the first by 31 May 2020 to include 2019’s emissions.
Notably, the EU ETS scheme is currently due to run in its current form until 31 December 2023. It is therefore likely that flights between European Economic Area states will be subject to both EU ETS and CORSIA between 2021 and 2023. The EU is currently understood to be awaiting clarity on the nature and content of CORSIA before proposing any amendments.
The UK is a volunteer participant in CORSIA. Consequently, whilst Brexit may affect the UK’s involvement in the EU ETS, it isn’t anticipated that it will have any effect on its involvement with CORSIA.
The ICAO’s meeting will last two weeks and will also consider emerging technologies and innovations that are arising in response to environmental challenges, such as hybrid and electric aircraft. The hope is that progress can be made a little more quickly than has been seen to date.
Institute for Government provides stark warning about the dangers of a no deal Brexit
On 31 January the Institute for Government published a paper entitled ‘Brexit: two months to go’. The purpose of the paper is to assess, with only two months to go until Brexit, what the state of the UK Government’s progress is in preparing to leave the EU without a deal, and it makes for a sobering read.
The paper notes that ‘even if the Government had been preparing for no deal from the day after the referendum in 2016, under three years would have been a much more compressed timetable than was required for other major (though much simpler) programmes like Universal Credit, Automatic Pension Enrolment or the 2012 Olympics’. Of course, as everyone is aware, and as the paper goes on to point out, the Government did not start preparing for no deal on day one.
Amongst other points made, the paper notes that only around 100 of the required 600 statutory instruments required for a no deal Brexit have made it through Parliament (with almost half not yet tabled!) and that the UK has still not said what tariff regime it proposes to operate after Brexit day. Whilst legislation can be rushed through Parliament, that necessarily reduces the time, if any at all is afforded, for scrutiny and the effect of a lack of information on tariffs will almost certainly lead to increased regulatory spending by businesses that have not had adequate time to prepare.
The paper goes on to set out two very simple tables showing what stage of readiness pieces of legislation are in, as well as the implementation in relevant areas, as we head towards 29 March. Operating on a traffic light system (green is likely to or already has achieved Royal Assent in time for a no deal, amber meaning uncertain and red meaning that the Government will face major challenges – without wishing to spoil it for you, there’s a lot more red than anything else) the paper paints a pretty bleak picture.
In relation to the implementation aspects of ‘Agriculture, fisheries and food’ it is noted that ‘there is no clarity over the UK’s approach to fishing quotas after Brexit’, and that DEFRA ‘has already recognised that it will not be ready for no deal in crucial areas such as enforcement of fishing rights and export health certificates. That’s just for starters, of course ‘UK exporters would need to get approval before being able to export any product of animal or plant origin to the EU’.
In relation to the implementation aspects of ‘Energy and environment’, ‘the UK has promised a new environmental watchdog to replace EU functions. However, this will not be in place until 2021 at the earliest’. So a minimum of 21 months without the benefit of the ‘world-leading, statutory and independent environment body’ we’ve been promised. But, perhaps more worryingly, ‘security of electricity supply for Northern Ireland in the case of a no deal is a major risk. The UK and Irish Governments are both seeking to maintain the all-island Single Electricity Market, but there is no clarity on progress to date’. Now, you may feel (or perhaps simply blindly hope) that this is something that will be, has to be, sorted out by 29 March, but the sheer fact that we’re now seven weeks from Brexit Day and no further forward must surely be causing even the most optimistic to question whether an extension to the timeframe for compliance with Article 50 should be sought.
The full report, in all its depressing glory, can be found here
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