Sir James Bevan emphasises the importance of good regulation

On 4th August 2020, a speech given by the Chief Executive of the Environment Agency, Sir James Bevan, at the London Chamber of Commerce and Industry on environmental regulation, was published online. The speech, titled, In praise of red tape: getting regulation right, emphasised the important role good regulation plays in protecting and enhancing the environment.

Good regulation

In his speech, Sir James Bevan stated that good regulation is essential and achieves several things; it protects people and the environment from harm and “creates a level playing field for business, allowing well-run companies to thrive and stopping those who don’t want to play by the rules from undercutting them.”

He also spoke about the role that the industry plays in good regulation, stating “responsible industries welcome it as a way to help reduce the risk their operations could otherwise pose to people or the environment.” Furthermore, he indicated that responsible industries agree with the “cardinal principle” that the polluter pays and accepts that it is they who should pay the cost of being regulated and not the government, taxpayer or local community. Sir Bevan was clear that good regulation works. Evidence of this, he suggested, can be seen in the improvement of air quality, which has been achieved through “good law, good practice and good regulation.”

Regulating in the right way

Whilst Sir Bevan was eager to praise good regulation, he made the point that “not all regulation works and not all regulation is good.” Bad regulation, he said, could be “too prescriptive, too bureaucratic, too expensive, out of date for the industry it regulates, worst of all, ineffective at doing what it is supposed to do.” He suggested that regulation must always serve a purpose and be aimed at resolving a particular issue. To this end, he asserted: “I am against red tape, if by red tape we mean regulation for its own sake, or bad regulation.” The focus, he indicated, should be on the real issue. Regulators should take a common-sense approach and assess where the real risk is and the best way to mitigate it. As Sir Bevan pointed out: “The more regulators have to focus on things which are not the main thing, the bigger the risk that the real main thing gets neglected… In regulation, as in so much else, less is more.”

Supporting legitimate businesses

In addition to focusing regulation on “the right things”, Sir Bevan stated that it was important that the Environment Agency “regulate in the right way.” Regulation, he said, must be “risk-based, proportionate, and business friendly.’” Balance and common sense, he suggested, are essential stating: “Too much regulation of too little risk is a cost on business and a dangerous distraction for the regulator from other activities on which we should be focused.” Sir Bevan spoke of the reciprocal relationship between the regulator and those they regulate. Regulators must “actively…support legitimate businesses” which provide jobs, goods and services. In turn, good businesses should support good regulators, who help prevent major pollution incidents, which can be damaging to a business’ reputation.

An outcomes-based approach should be adopted, with both parties working together to resolve issues. This spirit of co-operation, Sir Bevan suggested, is provided for within the Environment Agency’s regulatory framework, whose “default regulatory approach is to provide advice and guidance to businesses to allow them to operate successfully, and to use our powers of enforcement only when necessary.” Regulators should “tell companies the effect they need to achieve” but leave the execution to businesses. The regulator, Sir Bevan suggested, should listen to businesses, who are in the best position to “identify the most cost-effective way to achieve that effect” and are “much more likely to know the right answer than the regulator.” The point, he was eager to establish, “is what you achieve not how you do it.”

Putting ‘good regulation’ into practice

Sir James Bevan’s view on good, proportionate and collaborative regulation is encouraging. Regulators should take an outcomes-based approach predicated on risk to ensure that regulation is proportionate. However, it is our experience that all too often the approach taken by the Environment Agency is heavy-handed, regulation for regulation’s sake – creating the unnecessary red tape that Sir James Bevan is so keen to avoid.

In recent years, we have seen several cases where the Environment Agency has taken an approach which is not outcomes-based and which seeks to punish legitimate businesses for issues which can be easily remedied instead of working with them to resolve matters. We have dealt with incidents where Enforcement Notices have been issued which do not resolve the issues complained of and situations where best available techniques and operations which achieve outcomes have been deemed non-compliant because they are outside a particular area’s expertise and experience. This inflexible and enforcement-minded approach must be addressed. Whilst Sir James Bevan’s desire to cut red tape is to be commended, it is only effective if those on the frontline of regulation put this principle into practice. All too often we see the Environment Agency working against legitimate operators instead of with them.

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