Water company executives who pollute rivers and waterways could be banned from receiving bonuses and face prison under proposed new legislation by the UK government. The Water (Special Measures) Bill will apply to England and Wales and aims to strengthen regulators’ powers to address companies that pollute. It will also make it easier to impose fines.
The new legislation introduces more serious penalties for executives who fail to assist investigators or obstruct them, with prison sentences of up to two years. The burden of proof in civil cases will be reduced, making it easier for the Environment Agency to bring forward criminal charges against executives. Regulators will also have the power to prevent water company executives from receiving bonuses if they are not meeting high environmental, consumer or financial standards.
Environment Secretary Steve Reed hopes the measures will end the “disgraceful behaviour of water companies and their bosses”. However, campaigners have criticised the legislation as inadequate. Some maintain that the failure is with the industry regulator, Ofwat, and the Environment Agency which do not adequately enforce existing laws.
The UK’s water industry has been widely criticised for paying large salaries and bonuses to executives despite regular sewage spills. In 2022, every major English water company was found to have discharged untreated sewage when weather conditions were dry, which might be illegal. Decades of underinvestment in sewage infrastructure has caused it to be frequently overwhelmed, leading to spillages.
Water UK, an industry group representing the water companies, agreed that the current system is not effective. The group called on Ofwat to back its £105bn plan to invest in water and sewage infrastructure, which will increase consumer bills. Negotiations over increases are ongoing.
The government expects to introduce further legislation to reform the water industry, including changes to speed up infrastructure upgrades, tackle pollution and ensure reliable water supply
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