The brouhaha over the level of fines imposed on Friday following the 2005 Buncefield oil depot disaster was not unexpected. This was despite the penalties being the largest ever imposed by a British court for an environmental offence.
St Albans crown court fined three companies a total of £5.38m for polluting groundwater, for health and safety law violations and for breaching the major hazards control (COMAH) regulations. The environmental component totalled £1.35m. Together with prosecution and investigation costs, the full bill imposed on the firms came to £9.43m.
The record fine for an individual environmental offence remains at £1m, set in 1990 for a Shell oil leak into the river Mersey. A £4m fine over the 1996 Sea Empress disaster was cut to £750,000 on appeal.
Hemel Hempstead MP and junior transport minister Mike Penning joined a chorus of disapproval over Mr Justice David Calvert-Smith’s sentences. “How is a fine of £5.35m [sic] justice?” he asked. The explosion, fires and groundwater pollution are calculated to have caused more than £1bn of economic damage. The social costs, in terms of stress and family upheaval, have been enormous.
The MP said that he intends to ask the attorney general to rule on whether the penalties are unduly lenient. But unless he really is unaware of the rules, it is a purely political gambit.
The attorney general’s power to refer sentences for consideration in the Court of Appeal covers the like of sex crimes, murder and robbery. It does not cover offences that can be dealt with by magistrates, including environmental offences.
In fact the fine is far from the only cost being imposed on the site operator Total. Its full liability to pay compensation in civil law has been estimated at £750m. Rebuilding the site, for which it recently received planning permission, will cost it more again.
The judge took this liability into account when deciding the level of fines, citing a court ruling in February which confirmed that compensation should be factored in when deciding a fine for environmental damage.
The question remains, though, whether the fines which are supposed to punish, send a sufficiently strong message to industrial operators.
Including fines and costs, Total was ordered to pay £7.36m. The figure includes its 60% liability for the fines and costs imposed on Hertfordshire Oil Storage Ltd, which it co-owned.
For the first quarter of this year alone, Total made just under €2.3bn, or about £1.9bn, in global profits. In other words, the full impact of the criminal trial could be absorbed by about eight hours of trading.
Mike Penning does indeed have a valid point.