In May 2020 the Court of Appeal ruled on issues concerning the lawfulness of an exempt waste management operation; in this instance the storage and treatment of waste wood. At trial both the operating company and two of its directors were convicted. The Court of Appeal upheld these convictions. Whilst the Court of Appeal’s decision was quite predictable, decisions of this upper court in this area are rare. Therefore, leaving aside the predictability of the ruling, it is nonetheless a useful ruling because it confirms a sensible interpretation of the relevant legislation. This is important for operators of exempt waste operations and, landlords, waste suppliers and others who are reliant on the waste operation being lawful.
The case was brought by the Environment Agency against Prime Biomass Limited (the “Company”) and three of its directors for waste management activities in the period 3rd September 2013 and 6th December 2013. The case was brought under the then applicable Environmental Permitting (England and Wales) Regulations 2010 (“EPR”). These regulations were subsequently revoked and replaced by the Environmental Permitting (England and Wales) Regulations 2016. Whilst the two sets of regulations are in substantially the same form for the purposes of these convictions, for convenience, references are made below to the 2010 regulations rather than the 2016 regulations.
The Company operated a waste wood storage and treatment facility in Rainham, Essex. There was no dispute that the facility was a waste management facility which needed either to have an environmental permit to operate or be an “exempt facility”. Whilst exempt facilities do not need environmental permits they are required to operate within express parameters (EPR Regulation 5 and Para 3 of Schedule 2) and are required to be registered as exempt facilities (EPR Paras 6 - 8 of Schedule 2). The Company duly registered the operation as an exempt waste facility but did not operate, in two respects, within the express parameters for exempt facilities.
The exemption (“T6”) allowed for up to 500 tonnes of waste wood to be stored or treated at the site over any seven-day period. A general requirement for exemptions, including the T6, is that the type and quantity of waste and the method of treatment must be consistent with the objectives of the Waste Framework Directive (Directive 2008/98/EC), which essentially are that no harm to the environment and human health will be caused.
Between 3 September and 6 December 2013, the Environment Agency made a number of visits to the site and found that waste wood stored exceeded 500 tonnes. The company was advised on several occasions to urgently reduce the amount of waste wood and was warned of potential enforcement action. The mass of waste wood was not reduced below 500 tonnes and indeed increased on occasions as more waste wood was received on site.
On 12 March 2014, the exemption was removed from the public register by the Environment Agency. Also, the Environment Agency informed the Company that the storage of the material in contravention of the waste exemption requirements was an offence. On 24 March 2014, the company went into voluntary liquidation. Further by this time the Environment Agency had received complaints from several neighbouring business owners about nuisance from emissions of wood dust from the site.
The Environment Agency brought criminal proceedings against the Company and three directors. The case against the Company was that as there was non-compliance with the requirements of the T6 exemption, the facility was not an exempt facility; and because it was not an exempt facility it was necessarily a regulated facility which required an environmental permit. As there was no environmental permit, an offence was committed by the Company (under the EPR (regulations 12(1)(a) and 38(1)(a)).
In terms of the prosecutions of the three directors, the Environment Agency relied on a provision (EPR Regulation 41) which is common to environment legislation. This is that where an offence is committed by a body corporate (i.e. the Company in this instance), and that offence is committed with the “consent, or connivance”, or is “attributable to any neglect”, of a director or officer of the company, then such director or officer is also guilty of the offence.
At trial, the judge gave directions to the jury that the site would not have been an exempt waste facility and therefore would be a “regulated facility” if one or both of two situations existed, namely:
- the total quantity of waste stored at the site during seven-day periods within the indictment exceeded 500 tonnes; and/or
- the type and quantity of waste and the method of treatment was not consistent with the objectives of the Waste Framework Directive (Directive 2008/98/EC) because the wood dust alleged to have emanated from the site was such as to endanger human life or to harm the environment (i.e. pollution).
The jury found the Company guilty and convicted two of the three directors.
Court of Appeal
The two convicted directors appealed. Interestingly they did not appeal on grounds particular to their own actions (i.e. consent, connivance or neglect). Rather they argued that the trial judge erred in his directions to the jury concerning whether the Company’s operations were exempt under T6. They argued that because the facility was once registered, it could only cease to be an exempt facility on the date it was deregistered by the Environment Agency. If they succeeded in this regard, then their personal convictions could not stand.
The Court of Appeal rejected the directors’ arguments. The Court of Appeal was clear, and agreed with the trial judge, namely at the point that the facility fails to fulfil the conditions for exemption, it ceases to be an exempt facility. “On a straightforward interpretation of the legislative provisions, in our view, a waste operation will only be an “exempt facility” if it fully meets the requirements of paragraph 3(1) of Schedule 2. If it does not meet those requirements in full, it cannot be an “exempt facility”, and it must be a “regulated facility”; there is no other status it can have. And if, as a “regulated facility”, it is operated without an environmental permit, there is a breach of regulation 12, and offence under regulation 38 has been committed”.
We suspect that difficulties arose for the Company in terms of finding onward customers for its treated wood waste. If so, this in turn would have given rise to unacceptable volumes of waste on site and financial difficulties for the Company. These are however commercial difficulties. Strictly they play no part in terms of the legal analysis (albeit the Environment Agency provided several opportunities for the Company to try and rectify the situation).
Whilst the decision is predictable, the case serves as a valuable reminder of the legal basis for waste management exempt facilities. It is worth noting that an advantage for operators in terms of exempt waste facilities is that the regulatory burden is quite low. It is very much dependent on self-policing. Maybe it follows therefore that the consequence of failure to abide by such low regulation is likewise straightforward; as in this case.
Article to co-authored by Lucy Charatan
 Environment Agency v Mustafa and another  EWCA Crim 597.