By Nikola Bryce (Workers GB Writers Group)
The Environment Agency (EA) called for the worst offending water company bosses to be jailed following the release of their 2021 environmental performance assessment in July 2022. Emma Howard Boyd Chair of the EA commented: “Company directors let this happen. We plan to make it too painful for them to continue like this… fines currently handed down by the courts often amount to less than a Chief Executive’s salary… Investors should no longer see England’s water monopolies as a one-way bet.”
Whilst vociferous in their condemnation and ire, the EA recently suffered savage “efficiency savings“ of £235 million to their budget under Liz Truss‘ premiership. They are unfortunately more akin to King Canute attempting to hold back the shit storm of raw sewage plaguing our seas, coastline and destroying our rivers and ecosystems.
At present, if water companies fail to uphold the law or cause environmental harm, it’s the job of the regulators such as the EA and Ofwat to pursue both criminal and civil prosecutions as part of their enforcement regime. Fines can be up to 10% of annual turnover for civil cases, or unlimited in criminal proceedings.
Challenging this legal premise is Manchester Ship Canal (MSC) following United Utilities release of “untreated foul water” without permission into the canal. Represented by the Good Law Project (GLP) and Environmental Law Foundation (ELF), they have taken the case all the way to the Supreme Court. United Utilities, relying on existing law, claim unauthorised release of raw sewage into waterways cannot be subject to any private legal action.
Rich pickings are there to be made despite the fines metered out to UK’s water companies. An estimated £57 billion in shareholder dividends were paid out between 1991 when Thatcher sold off the water industry and 2019.
Whilst millions struggle to pay their utility bills, in December 2022, Thames Water reported profits of nearly £398m for the past six months. United Utilities more than doubled their profits posting pre-tax profits of £426.3m for the first half to the end of September 2022. According to a Mirror investigation the salaries of the chief executives are just as eye watering: “The average wage for bosses at the water and sewage companies in England was nearly £1.7m and their standard salary rise was 27%.” However the Chief Executive of Scotland’s state run water authority Scottish Water, earns £267,000 plus a £92,000 bonus.
Water firms should only discharge raw sewage from storm overflows during periods of heavy rainfall, the purpose, to prevent sewers flooding homes and streets. However in November 2022 Surfers Against Sewage (SOS) claimed water companies had released raw sewage into UK rivers and seas almost 150 times during “dry spells.”
According to the House of Commons Committee report of 2021-22 “… only 14% of English rivers meet good ecological status and no River met good chemical status.” However, just as alarming, the EA has warned that without new interventions, that figure is set to halve by 2027.
When raw sewage combines with what runs off the urban environment it creates, according to Dr Rob Collins of the Rivers Trust, “a huge chemical cocktail.” The nitrogen and phosphorous in the sewage spewed into our rivers stimulates the growth of algae, which in turn impacts the rest of the ecosystem such as blocking out the light plants need for photosynthesis, killing the plants and the algae, reducing oxygen in the water, killing insects, fish and other organisms. Depending on the nature of the spillage some of these ecosystems can recover, if the political will exists.
Again according to the Rivers Trust, whilst Germany has 32 designated bathing rivers; Poland 76; and France 420, England has one. However previous to 2020 England had none, the bathing water status only secured thanks to a long hard campaign in Ilkley, West Yorkshire.
Research carried out by the Financial Times in December 2021 revealed: “investments in the sewage and wastewater network has fallen by almost a fifth in the past 30 years, from £2.9 billion a year in the 1990s to £2.4bn now. Over the same time the companies – which were privatised with no debt and handed £1.5bn have borrowed £53bn, the equivalent of around £2000 per household much of which has been used to pay £72bn in dividends.”
In November 2021 following Ofwat checks, water companies admitted they could be releasing unpermitted sewage discharges into rivers and watercourses. A major investigation was launched into 2,480 sewage treatment works breaching their permits and therefore acting illegally.
Alarmingly in a December 2022 report, Ofwat revealed water companies had only spent 68% of their forecast enhancement cost allowances, under delivering in areas such as wastewater capacity, to reduce sewage discharges and improve drought resilience. Out of the seventeen companies in England and Wales, fifteen spent less than 50%. Yorkshire Water, Southwest Water and Affinity Water spent 25%, 46% and 47% respectively.
Unfortunately the punitive approach brought by the regulatory authorities does not appear to be working. By the end of 2021 Thames Water had received a total of £32.4 million in fines from 2017. Prior to Southern Water’s headline fine of £90m in July 2021, they had pleaded guilty to 51 offences of breaching the Environmental Permitting Regs committed between 2010 and 2015, dumping billions of litres of illegal sewage into numerous conservation sites and protected areas. Its Chief Executive received a whopping £550,000 bonus in 2022.
Affected communities, environmental groups and other interested parties are becoming more angry and vocal with the government in their demands for stronger enforcement and tightening up of regulations. Currently water companies are allowed to self monitor through Operator Self Monitoring Environmental Permits, a bit like the fox guarding the henhouse.
The government’s much publicised Storm Discharge Reduction Plan, published in August 2022, is a requirement of the Environment Act 2021. Pressure groups describe it as showing a “lack of ambition and clarity”. The plan promises capital investment of £56 billion over 25 years, giving water companies a leisurely 27 years until 2050 in some cases, to improve all storm overflows near designated bathing water areas and improve 75% of overflow discharges into high priority nature sites, eliminating ecological harm. The Sunday Times revealed in March 2023 that “several water companies privately lobbied to weaken the government’s £56bn plan to clean up storm overflows arguing that it risked driving up consumer bills by hundreds or even thousands of pounds.”
Whilst Liz Truss was in charge of Defra, according to a Labour Party analysis, sewage discharge more than doubled between 2016 and 2021. However as PM her Environment Secretary Ranil Jayawardena announced polluting water companies could face an increase in penalties from £250,000 to £250 million. Thérèse Coffey appears to be backtracking on this promise, stating she wanted to “make sure that fines are proportionate and easy to enforce”, adding she will “look at the evidence with a fresh pair of eyes and do what is most effective.” One wonders if the suggested penalties increase will be flushed down the can in the consultation process.
In a November 2022 press release, the government declared they had “handed a record amount in fines for pollution incidents last year as part of ongoing action to hold rule-breakers to account.” They added, since 2015 the EA had concluded 56 prosecutions against water and sewerage companies, securing fines of over £141m.
This is in stark contrast to a March 2022 Guardian article, where a leaked report revealed: “England’s Environment Agency has downgraded 93% of prosecutions for serious pollution over four years, despite recommendations from frontline staff for the perpetrators to face the highest sanction…” The leaked report went on to outline between April 2016 and December 2020, out of 495 evidence-based serious incidents “involving the worst type of pollution of rivers and coastal waters as well as serious waste crimes…” despite staff recommending the agency prosecute all the cases “after intervention by managers just 35 cases were taken forward to prosecution.”
Tory commitment to the environment was clearly illustrated when, a week before the COP26 summit in Glasgow, George Eustice, Environment Secretary, recommended MPs vote down the House of Lords amendment to the then Environment Bill which sought to “place a duty on water companies to ensure that untreated sewage is not discharged into rivers and other inland waters.” The amendment fell with 265 Tory MPs voting against, including the present Environment Secretary Thérèse Coffey.
Many of our seaside communities have some of the highest unemployment and lowest wages in the country, with small businesses relying on the summer trade to see them through the year out of season. However, according to SOS, between May and September 2022, sewage was pumped into designated seaside bathing areas on 5,540 occasions.
Sir James Bevan, Chief Executive of the EA, told the House of Lords in October 2022, “The cleanest solution, the obvious solution, is a modern system which separates sewage and rainwater – and those things exist.” He estimated the cost of retrofitting the whole country would be anywhere between £100bn to £200bn.
It is to be hoped the GLP and ELF win their case currently being heard in the Supreme Court, as it will essentially create a precedent, thereby ending the water companies almost total immunity from private legal action for discharging untreated sewage into UK waterways.
Clearly the government has not passed the test when it comes to the health of British rivers, seas and coastline. Instead finding itself presiding over an ever increasing environmental and ecological nightmare, where fines for these corporate crimes do not deter the handsome financial rewards to shareholders and water bosses. Whilst trashing our environment is the cost of business for these companies it’s the British people, our wildlife and their habitat that pay the price.
One thought on “Calls for water bosses to be jailed”
excellent analysis which deserves wider recognition.