- About Us
- Areas of Expertise
- Instructing Us
- News & Events
Posted on: 21 January 2020
Environmental Law News UpdateTweet
In this latest Environmental Law News Update, Charles Morgan and Nicholas Ostrowski consider the launch of a new Waste Crime Task Force, a case upholding the Environment Agency’s charging scheme for vessels and a successful appeal regarding the landfill tax treatment of ‘fluff’.
Waste Crime Task Force
In 2016 Sir James Bevan, then, as now, CEO of the Environment Agency, described waste crime as “the new narcotics”. Quite apart from the scourge of unlicensed landfills and waste reception sites, fly-tipping on an industrial scale and the illegal export of waste, some regulatory régimes in the sector have unintentionally created almost literally a licence to print money (in the form of false WEEE evidence notes or packaging waste recovery notes, for example). This has led to an increasing incidence, in the context of waste regulation, of more broadly-distributed criminality such as fraud – the familiar province of the police than the Environment Agency.
Last week, following the Defra report of November 2018 on “Independent review into serious and organised crime in the waste sector”, the Government announced the launch of a task force dedicated to tackling “serious and organised waste crime”. The Joint Unit for Waste Crime will bring together law enforcement agencies, environmental regulators, HMRC and the National Crime Agency to co-ordinate the whole process of enforcement from site inspection through to prosecution, conviction, sentencing and proceeds of crime recovery.
The past few years have seen the grant of increasing powers to the Environment Agency (eg sections 109A -109N of the Environment Act 1995 concerning “restriction notices”) coupled with a reduction of resources which has inhibited the effective exercise of those powers. For example, the Environment Agency announced at the start of the year that it was reducing the number of PRN site inspections. It remains to be seen if the new Joint Unit will reverse this trend or otherwise overcome the inherent resulting problems.
Environment Agency’s charging scheme for vessels upheld by High Court
Shortly before Christmas the High Court (Nicol J) dismissed a challenge by the owner of a vessel against the Agency’s charging scheme for vessels made under the Environment Agency (Inland Waterways) Order 2010.
In a judgment (Sunman v Environment Agency  EWHC 3654,  WLR 8) which will be of some financial significance to the Agency (and which was keenly watched by some members of the boating community) the High Court upheld the Agency’s system which requires vessels to pay particular sums based on the size of the vessel for every vessel moored on specified rivers.
Nicol J considered the complex statutory background to the charging scheme which included a so-called Henry VIII clause permitting the Secretary of State through the Environment Agency (Inland Waterways) Order 2010 (a statutory instrument) to amend primary legislation – in this case the Anglian Water Authority Act 1977.
The judge agreed with the Appellant that this was an issue he could have raised despite having already pleaded guilty to an offence of not registering his vessel and the judge also agreed that a vessel-owner could claim, in a criminal prosecution, that the amount of any charge levied on him under the 2010 Order was excessive. In this case though, upon finding that the Agency had the relevant statutory authority despite the Henry VIII clause, the Agency had acted lawfully and the criminal conviction could not be impugned. The judge went on to dismiss the assertion that the amount of the registration fee charged by the Agency was unlawful as there was no evidence before him or the Crown Court that the amount of registration fee imposed by the Agency was Wednesbury unreasonable.
Nicholas Ostrowski appeared for the Agency.
‘Fluff’ is not subject to landfill tax
In May 2018 we reported that the HMRC had successfully persuaded the First Tier Tribunal (Tax Chamber) that ‘fluff’, which is normally black bag waste from domestic premises that is used as part of a base layer to protect the liner of the landfill cell, was waste and hence was subject to landfill tax.
That decision was recently overturned on appeal though in the Upper Tribunal by Fancourt J and UTJ Herrington in  UKUT 0001 (TCC).
At first instance the First Tier Tribunal had held that while, in one sense, the black bag waste was “used” to protect the lining system, this was not the end of the matter. All of the material was destined for landfill, in the main body of landfilled waste if it was not to be ‘fluff’. ‘Use’ was not considered to be an antonym for ‘discard’ – the fact that the material continued to serve a useful function after it had been disposed of did not affect this conclusion.
The Upper Tribunal held that that First Tier Tribunal’s decision misinterpreted the ruling in Waste Recycling Group Ltd v HMRC  EWCA Civ 849 and found that ‘use’ really is the opposite of ‘discard’ and if a site operator uses black bag waste for a particular purpose then they are not discarding it: “if a site operator disposes of material at a landfill site, but in doing so intends to and does make use of its properties for his own purposes, including compliance with regulations, licenses, permits or any other requirements for the site, that use means that the operator does not make the disposal with the intention of discarding the material”.
New provisions dealing with this material were introduced in the Finance Act 2018 with effect from April 2018 so there are no ongoing issues arising from fluff. Nevertheless, the financial consequences of this decision in relation to material previously categorised as landfill waste and subject to tax are said to run into hundreds of millions of pounds and HMRC are reportedly considering appealing the judgment to the Court of Appeal.
To keep up-to-date follow us on Twitter @6pumpcourt or click here to subscribe to the mailing list. If you have any comments or suggestions please contact Bridget Tough at email@example.com