Imagine that your local stream is being polluted by a corporation. Imagine that corporation is one of the very small number of polluters actually charged with violating the Environmental Management Act. Imagine that they go to court and, after spending taxpayer dollars on a trial, are ordered to pay a fine (a fine could be up to a maximum of $1,000,000). That fine won’t restore the stream, but at least there’s a consequence for polluting your stream.
But, now imagine that they don’t pay the fine. Imagine that more money has to be spent to hassle them through collection agencies and legal demand letters to pay the fine, but that the fine remains unpaid. What, then, is the consequence to the corporation?
The reality is that 40% of court ordered environmental fines in British Columbia are not being paid. Indeed, for fines under the Environmental Management Act and its predecessor, the Waste Management Act, about 70% of fines are not paid. The good news is that the Ministry of Environment is working to improve the situation, but we believe that they should go further.
Closing the Gap Report
Under a Freedom of Information request, the Ministry of Environment recently provided West Coast Environmental Law Association with a copy of Closing the Gap, a BC Ministry of Environment report prepared in April 2010 on the payment of environmental fines. The 19-page report outlines the collection rate for environmental tickets and court fines, and makes recommendations to increase the rate of payment. The environmental tickets and court fines are associated with 7 environmentally-related acts, including the Environmental Management Act, the Fisheries Act and the Wildlife Act.
The report shows that the 2003-2008 average payment rate for violation ticket fines was 80% and the average payment rate for court convictions was 59%. According to the report, the audit data shows that the lower value court fines have a tendency to be paid, but higher fines (most often fines to corporations) remain unpaid. There are 83 violators who collectively owe $707,516 in outstanding court conviction fines, and most of this amount is owed by a few violators.
Closing the Gap states that “the low collection rate for court conviction fines is linked to some degree to a few corporations who owe large fines” and that,
[L]ower value court fines tend to get paid, but higher fines remain unpaid (this is more often fines to corporations)... When looking at the percentage of violators who pay their fines, the rate is 74%. This is due to the fact that the majority of lower court fine amounts ($500-$5000) get paid, but there are a small number of high court fine amounts ($10K +) that are not paid.
So how is the government collecting fines?
Closing the Gap explains that ticket fines and court-ordered fines go through different collection processes:
On behalf of the Minister of Finance, ICBC collects fines for all violations tickets issued under legislation and regulations administered by [the Ministry of Environment].
After the violation ticket has been issued, a copy is sent to ICBC. ICBC then sends a payment request to the violator and, if the fine is not paid, the ticket is sent to a contracted collection agency. If the ticket still remains unpaid, ICBC may opt to proceed with garnisheeing wages (having wages taken off of the violator’s paycheque and put directly toward their violation debt) or similar processes.
The collection process for court fines is different, but ends up with a similar result. The court imposes a fine. If the fine is unpaid after 120 days, the file is referred to a collection agency that sends a notification letter to the violator requesting payment. If this is unsuccessful, the collection agency follows up with automated phone calls, a demand letter and a legal warning letter as necessary. If all of these attempts are unsuccessful then the violator’s file is entered into the Canada Revenue Agency set-off program, where their federal tax return and HST credit may be withheld and be applied to the outstanding debt owed to the Province.
These processes are the Ministry’s way of attaching consequences to violators. But with tickets and court-ordered fines remaining unpaid, it’s a valid question as to whether these processes are working.
In past posts, we have noted that strong environmental enforcement works when would-be violators know that there’s a likelihood of being caught and a likelihood of real consequences. This report shows that, although violators are being caught and penalties are being set, about 40% of these court-ordered penalties are not being paid – higher under some statutes. The consequence is in place, but it’s not being enforced.
What can be done better? How can we impose and enforce consequences?
The Ministry recognizes that there is an issue with the collection rates – we appreciate that, as well as their efforts in preparing Closing the Gap. Closing the Gap offers five recommendations for improvement to the current system.
- Keep track of non-payment - The report suggests that the Ministry should begin to monitor fine collection rates for both tickets and court convictions on a consistent basis – an obvious first step. If the Ministry doesn’t track collection data, they won’t know whether what they are doing is helping or hurting in terms of fine collection.
- Property Seizure and Sale Process – Closing the Gap recommends using the Property Seizure and Sale Process to recover outstanding environmental court conviction fines. This is a process that the Provincial Courts have available to anyone owed outstanding court fines. The report states that:
[Ministry of Environment] staff have used the process to a limited degree with success, however it is not part of any regular collection mechanism. … Due to some staff time involved in initiating this process, it would be best suited for larger court imposed fine amounts or cases where there is a high public demand for justice.
- Public naming - Although the Ministry publishes a summary of all the tickets and court convictions issued in a quarter, the report recommends that the Ministry also publish a list of violators who have outstanding environmental fines. Since Closing the Gap was published, the government has started adding the names of individuals to its compliance and enforcement summaries, and has amended the Ministry of Environment Act to allow it to, in the future, publish information about how long an individual has owed a fine. We agree that publicly naming violators is a low cost mechanism that may well result in increased compliance and collection of fines.
- Refuse to Issue - Closing the Gap also suggests that, within the Natural Resource Sector, the Ministry should be able to withhold the issuance of permits, tenures, licences, etc. where there is a direct link between the environmental violation and privileges being revoked. This “refuse to issue mechanism is currently used by the Permit and Authorization Service Bureau when issuing or renewing hunting, fishing and firearms related licences”. We agree with this recommendation, but for reasons discussed below, we’re not as confident as the authors of Closing the Gap that it will be effective by itself.
- Enforce Creative Sentencing - Creative sentencing directs penalty dollars to foundations that use the funds to finance projects aimed at benefitting the environment. However, these beneficiaries have very limited legal mechanisms for collecting court ordered fines that are owed to them. Currently, only the Wildlife Act provides these organizations with a legal method of collecting fines. Closing the Gap suggests that the powers to collect creative sentencing awards within the Wildlife Act be extended to other pieces of legislation.
More on Refuse to Issue
We support the idea that the government should refuse to issue new permits or approvals to corporations and individuals that owe outstanding fines. Environmental offenders cannot be trusted to be responsible if they can’t even take responsibility for their past offences.
And there is some encouraging data. As Closing the Gap points out:
It is expected that the higher payment rates for fines issued under the Wildlife Act and its regulations as well as the Firearm Act is due to the specific powers under the Wildlife Act to automatically cancel or suspend hunting, angling and firearm licences due to non-payment of other ministry legislation.
However, when we look at the data on a year-by-year basis, as opposed to the average for the 5 year period, concerns arise. The following graphs show repayment rates for each year from 2003 to 2008.
There is an increasing trend in the percentage of unpaid fines, for both ticket fines and court conviction fines and for all types of legislation.
At this stage, it is not clear if the trend is due to a possible decrease in the effectiveness of Refuse to Issue legislation, and, if so, why that might be the case. It is worth noting that the effect might be partly temporal in nature (since offenders from 2003 had 7 years to pay, while their counterparts in 2008 “only” had 2 years). Clearly it will be important to track these trends and determine whether there is an ongoing problem.
Other recommendations
We need a deterrent for the court conviction fines that are associated with quasi-criminal regulatory offences. Although we think that Closing the Gap had some great suggestions to make the system more effective and efficient, we suggest that they also consider the following:
- Escalating consequences – Fines could be subject to a flat interest rate for non-payment or an incremental increase in the amount owed (similar to a parking ticket that gets more expensive if you wait to pay). Any business seeking to collect payment would charge, and collect, interest, and yet this is apparently not done for environmental fines. Similarly, many of the court convictions could result not only in a fine, but in jail time. Even if the offenders are only given a fine, when you are dealing with an offence that has the possibility of jail time, offenders who fail to pay should be subject to Contempt of Court proceedings for neglecting to pay their fine and/or the possibility of resentencing (presumably to jail time) in light of their failure to pay.
- Increased scrutiny – Offenders should be aware (and the Ministry should ensure) that if they have unpaid fines, they will be under increased scrutiny and their outstanding debts could reflect badly on them if they ended up back in court for a similar or related offence. In other jurisdictions a failure to comply with earlier orders has resulted in jail time for environmental offenders caught reoffending.
- Suspending natural resource authorizations until payment – While Closing the Gap recommends that the Ministry should refuse to issue or renewal permits under Natural Resource Statutes until fines have been paid, we would think that the Ministry should consider actually cancelling or suspending such approvals. Offenders should be given a warning to pay the fine, and if they neglect to do so, the permits they hold under the associated legislation should be suspended until payment has been made.
Currently, a lot of time goes into getting payments, and the lack of major consequences arising from delayed or non-payment certainly does not increase the chances of increased collection. Even if the Province does eventually obtain payment, possibly through such extraordinary measures as garnisheeing wages or collecting money from tax refunds, it goes only toward the initial fine amount – no interest is charged and, so far as we can determine, the Province does not recover costs of collecting the fines. There is no incentive to pay the fine when they get it, or even after the demand letters start rolling in or the collection agencies start calling in. There is no consequence for not paying their outstanding fines, so why bother when they can put it off and maybe it’ll just go away
Even the best of the Closing the Gap recommendations – such as ‘refusal to issue’ powers – are aimed at coercing payment of the original fine – not at creating real consequences for a failure to pay promptly.
What do you think?
What changes do you think the Ministry could or should make in order to see a better collection rate for the payment of environmental fines?
