Massive fine reflects change in sentencing as previously low penalties failed to deter water firms from polluting England’s rivers and beaches.
Thames Water has been hit with a record fine of £20.3m after huge leaks of untreated sewage into the Thames and its tributaries and on to land, including the popular Thames path. The prolonged leaks led to serious impacts on residents, farmers, and wildlife, killing birds and fish.
The fine imposed on Wednesday was for numerous offences in 2013 and 2014 at sewage treatment works at Aylesbury, Didcot, Henley and Little Marlow, and a large sewage pumping station at Littlemore. The Environment Agency (EA), which brought the prosecution, said the enormous volume of untreated sewage discharged was unprecedented – 1.4bn litres – as was the length of time over which the discharges occurred.
The sewage caused long-term pollution in the Thames and some tributaries, revolting riverside users and wiping out the season for a commercial cray fisherman. The EA said it was the biggest freshwater pollution case it had ever undertaken.
“This is a shocking and disgraceful state of affairs,” said Judge Francis Sheridan, who delivered the sentence at Aylesbury crown court. “It should not be cheaper to offend than to take appropriate precautions.” “I have to make the fine sufficiently large that [Thames Water] get the message,” he said. Describing the breaches as “wicked” and noting the companies “continual failure to report incidents” and “history of non-compliance”, he said: “One has to get the message across to the shareholders that the environment is to be treasured and protected, and not poisoned.”
Anne Brosnan, the EA’s chief prosecutor, said: “Thames Water was completely negligent to the environmental dangers created by the parlous state of its works. Our investigation revealed that we were dealing with a pattern of unprecedented pollution incidents which could have been avoided if Thames Water had been open and frank with the EA as required.”
Water companies have been the most frequent polluters of beaches and rivers in England and past fines were criticised as too low to deter these highly profitable companies that often offended repeatedly. But a change in sentencing guidelines in 2014 is now leading to far heavier penalties.
Thames Water, which is the UK’s biggest water company and serves about a quarter of the population, was fined £1m in 2016 for repeated discharges of sewage into the Grand Union canal in Hertfordshire and £380,000 later the same year, after a sewage leak in an area of outstanding natural beauty in the Chilterns.
Thames Water made an operating profit of £742m in 2015-16 and paid out £82m in dividends. It is owned by a consortium of institutional investors, including funds from China and Abu Dhabi, and was managed by Macquarie Capital Funds, which sold its final stake earlier in March to Kuwaiti and Canadian investors.
Richard Aylard, from Thames Water, said outside the court: “We have failed in our responsibility to the environment and that hurts both personally and professionally because we do care. But in the three years since the last of those incidents we have learnt our lesson – there have been sweeping, far-reaching changes across the waste water business.” He insisted the fine would not increase customers’ bills: “This fine will be paid in full by shareholders only.”
In 2013, the Observer revealed that the nation’s 10 biggest water companies were the most persistent polluters of England’s rivers and beaches. They committed more than 1,000 incidents between 2005-2013 but were fined a total of just £3.5m, a sum described at the time as “pitiful” by a senior MP.
Thames Water was the most heavily fined company in that period, paying £842,500 for 87 incidents. Fines have soared since the change in sentencing guidelines but it remains too early to determine if pollution incidents are falling, due to the time it takes prosecutions to come to court.
However, one source close to the issue told the Guardian recently: “The courts have basically added a nought. Once it gets to that level, the boards and shareholders of water companies start to take notice.”
The previous record fine was the £2m penalty imposed on Southern Water in December for flooding beaches in Kent with raw sewage, which left them closed to the public for nine days.
The EA called that event “catastrophic” and the judge in the case said the company’s repeat offending was “wholly unacceptable”. The company apologised unreservedly, as it had when fined £200,000 in 2013 for similar offences.
Water companies have been frequently criticised for making huge profits and awarding large shareholder dividends while paying little or no corporation tax. In October 2015, the National Audit Office found that an £800m windfall for water companies had not been passed on to consumers.