Environment Agency Chief Executive Sir James Bevan has said that regulators need to “think differently, speak softly, and carry an even bigger stick” in order to regulate better after Brexit - including "fines so large they would put a major dent in companies’ bottom lines and sentences that would put their bosses in jail."

Sir James Bevan was addressing the Westminster Energy, Environment & Transport Forum conference on future environmental standards which took place this week .

He told delegates:

“Now we have left the EU I think we could invent a new model which would simultaneously improve the environment, deliver better for business and cost the taxpayer less.

"That model would think differently. It would set higher standards than the ones we have now. It would be climate-proof, ensuring our regulation is forward-thinking and flexible to help us mitigate and adapt to the climate emergency, which remains the biggest threat of our time.

“It would define more clearly than a lot of the current legislation the goal to be achieved and by when – healthy water quality in all our rivers by 2030 - for example. It would have fewer, simpler and better regulations to achieve those goals. Those regulations and the way they were implemented by the regulators would be proportionate, risk-based and outcome-focused.”

According to the EA Chief, the Agency works at its best by working with, rather than against the organisations it regulates by collaborating, innovating and problem-solving.

He explained that in running the model, the regulators would speak softly, at least at first. The EA would assume good intent on the part of operators until and unless they showed otherwise. The default approach would be the carrot of advice and guidance to help operators comply before any resort to the stick of enforcement. Pointing out that complying with the overall model would be less burdensome for good businesses, he said those with a strong track record of compliance would be rewarded with lower regulatory charges, fewer inspections and a wider degree of discretion in deciding how the standards would be met.

Bigger stick would include "fines so large they would put a major dent in companies’ bottom lines and sentences that would put their bosses in jail"

However, he went on to warn that “not every operator has good intent” and the future model he would like to see would also carry a much bigger stick which would:

• make regulated industries pay the full cost of their regulation
• make them pay the full cost of repairing any damage they do to the environment
• carry much tougher punishment for the biggest and worst polluters.

He added that in cases of extremely harmful and reckless pollution that would “include fines so large they would put a major dent in companies’ bottom lines and sentences that would put their bosses in jail. That would greatly concentrate the minds of Boards and Chief Executives and have a powerful deterrent effect.”

He also highlighted one other feature the future model would include - greater cooperation between the regulators themselves to deliver better outcomes. According to Sir James, this is already happening in the water sector where there is “very strong collaboration” between the EA, Ofwat and the Drinking Water Inspectorate to share intelligence and to ensure that by using different tools in a joined-up way, together they can be “stronger and even more effective regulators of the water companies.”

Sir James said the new Office for Environmental Protection would have a key role to play in helping “all of us be better regulators” – both in helping share analysis, advice and best practice, and in holding regulators – and the government – to account “when we fall short. The regulators need regulating too.”

Good regulation needs the right funding

The EA Chief also reiterated a theme he has highlighted in previous speeches – that “ultimately we will get the environment we are prepared to pay for” which applies to regulation as well.

In his view adequate funding is a core requirement for robust and effective regulation. Explaining that the Environment Agency’s regulation is funded from two sources: government grants and the charges it applies to the businesses it regulates to cover the costs incurred in regulating them, he commented:

“ We think there is a strong case for increases in both of those income streams and we are having good conversations with the government about that.”

He concluded by saying that none of the big environmental wins of the past - preventing acid rain or the hole in the ozone layer - would have been possible without regulation, adding:

“The right regulation is not deregulation.”