Transparency is best policy

8th September 2014

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  • Water ,
  • Corporate fine ,
  • Prosecution ,
  • Environment agencies


Anne Marsden

Only 66% of pollution incidents are self-reported by water companies, according to the latest figures from the Environment Agency. But self-reporting makes both environmental and financial sense, argues Paul Suff.

The latest figures for the Environment Agency reveal that water companies only self-reported serious pollution incidents on 66% of occasions last year (p.5).

So, in a third of category 1, 2 or 3 pollution incidents, the nine utilities in England providing both water and sewage services did not inform the regulator of the problem.

Performance ranges markedly, however, between 39% and 80%, and three companies saw a deterioration in their self-reporting in 2013.

There are numerous recent examples of water companies’ failure to speedily self-report. In 2013, for example, Southern Water was fined £200,000 after a fault at a wastewater pumping station led to numerous discharges of untreated effluent into the sea near Margate. The agency said the company had failed to report the incident within 24 hours.

Swift self-reporting when things go wrong is important and can help to significantly diminish the environmental impact. Without a rapid response, relatively minor events can escalate and the opportunity for mitigation measures is often lost, says the agency.

But, in addition to limiting the environmental harm, notifying the agency quickly when a pollution incident occurs can reduce damage to a firm’s reputation and its bottom line.

Self-reporting is one factor taken into account by the agency when deciding whether to prosecute. Its enforcement guidance states: “Where the offender provides us with the details of an offence voluntarily or through a self-reporting mechanism, we will take this into account when deciding on a sanction or whether advice and guidance will suffice.”

Should an offence go to court, magistrates will take into account the conduct of the company. The revised sentencing guidelines for environment offences, which came into force on 1 July, highlight “self-reporting, cooperation and acceptance of responsibility” as mitigating factors.

The guidelines include potentially higher financial penalties for breaches of environment regulation, including fines of up to £3 million per offence in the most extreme cases involving big companies.

That figure is much higher than the previous “norm” for utility firms. The Observer reported last year the average fine imposed on water companies in England for a pollution offence between 2005 and 2013 was just £10,800.

So, self-reporting makes both environmental and financial sense. The agency is targeting 75% of all pollution incidents involving water companies to be self-reported by the end of the decade.

That should be the minimum. It is likely that those companies that fail to achieve such heights will incur much higher penalties in the future, and they will have no one to blame but themselves.

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