The most persistent and frequent polluters of England’s rivers and beaches are the nation’s 10 biggest water companies, an Observer investigation has revealed.
The companies, which are responsible for treating waste water and delivering clean supplies, have been punished for more than 1,000 incidents in the past nine years, but fined a total of only £3.5m.
The revelations have raised concern that the financial penalties are far too low to change the behaviour of an industry that generates billions of pounds in profits and shareholder dividends. The charge is backed by the Sentencing Council for England and Wales, which is proposing major hikes in penalties.
Pollution incidents, which have included sewage illegally pouring into a harbour for more than a year, and managers destroying records, show no sign of declining, according to data obtained from the Environment Agency (EA) under freedom of information rules. Only a third of the 1,000 incidents led to a fine (of an average of just £10,800 ); the rest resulted in cautions.
“In law, the ’polluter pays’ principle is supposed to deter companies from damaging the environment, but in this case the penalties appear to be so pitiful that water companies seem to be accepting them as the price of doing business,” Joan Walley MP, chair of the Environmental Audit Committee (EAC), told the Observer. “The sentencing council must ensure that courts take into account the profits made from environmental crimes, and that fines have a sufficient deterrent effect.”
Simon Hughes MP, deputy leader of the Liberal Democrats, said: “These figures are another indictment of the failings of our privatised water companies in England. Many of them make large profits, pay huge dividends, increase prices and pay little tax. When, in addition, these figures show they don’t deliver clean water, the public is entitled to say that our monopoly water providers are neither good corporate citizens nor good stewards of our precious environmental assets.”
In November the Observer revealed that three of Britain’s biggest water companies paid little or no tax on their profits in 2012 while generously rewarding their executives and investors. The water industry was paid £10.5bn by customers in 2010-11, according to the latest Ofwat figures available, while making pre-tax profits of £1.7bn and paying dividends of £2.2bn, a 42% year-on-year rise. In 2013-14, water bills are rising by 3.5%, above both inflation and average pay rises.
The sentencing council’s draft guidelines direct that for deliberate pollution incidents by large companies and with the most serious environmental impacts, the standard fine should be £750,000 but could be varied between £250,000 and £2m depending on circumstances.