A court has fined Thames Water a record £20m for a sewage spill in 2013/2014. The company pumped nearly 1.5 billion litres of untreated sewage into the River Thames. But the fine is dwarfed by the profits Thames Water made for its shareholders.
Shocking mismanagement
The sewage spills happened at five Thames Water sites, in Aylesbury, Didcot, Henley, Little Marlow and Littlemore. Thames Water admitted 13 breaches of environmental laws. But the effects of the spills were far-reaching:
- Hundreds of birds and fish died.
- Sewage spilled into nature reserves.
- Raw sewage went into the Thames.
- Manholes overflowed.
- It caused environmental damage in Henley and Marlow.
“Wicked” and “shocking”
The fine is the largest a court has ever given to a water utility company. And the Environment Agency (EA) said it was the largest case it has ever dealt with. Judge Francis Sheridan said that the spills occurred because Thames Water was running sewage pumps at half levels. He called Thames Water’s actions “wicked”, and noted that the company has a “continual failure to report incidents” and a “history of non-compliance”:
This is a shocking and disgraceful state of affairs… It should not be cheaper to offend than to take appropriate precautions. One has to get the message across to the shareholders that the environment is to be treasured and protected, and not poisoned.
Rose O’Neill, UK Freshwater Policy Manager at the World Wildlife Fund, said:
There are around 1,500 sewer overflows across England releasing raw sewage into our rivers. [Water companies] simply can’t continue treating our rivers as their dumping ground.
Shrugging of shoulders
But Thames Water shareholders are probably not concerned about the fine. Because Thames Water’s profits dwarf its £20m fine. In 2015/16, it made an operating profit of £742m and paid out £82m in dividends to shareholders. And Thames Water’s owners probably don’t care about the fine, or the environmental damage, either. As they are a web of foreign groups and companies.
Kemble Water Holdings Ltd bought Thames Water in 2007. It in turn is owned by a consortium of investment management companies, foreign governments like China [paywall] and the United Arab Emirates, and pension funds. On 14 March, Macquarie (an Australian infrastructure bank nicknamed ‘the vampire kangaroo‘) sold [paywall] its stake in Kemble Water for around £1.35bn. Canadian pension fund Borealis Infrastructure and the Kuwait Investment Authority bought the stake.
Thames Water Director Richard Aylard said:
We have failed in our responsibility to the environment and that hurts both personally and professionally, because we do care. We’ve also failed in our responsibility to our customers who pay us to provide an essential public service all the time, every day and not just some of the time, and we apologise for all of those failings.
We need a resolution
Thames Water’s £20m fine is welcome. But the case highlights a serious problem within our utility companies. Because how can foreign banks, pension funds and governments seriously be expected to concern themselves with the UK’s environment when their main motivators are profit? We need to have a real debate about the future of this country’s utility companies. Because nationalisation is long overdue.
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Featured image via screengrab
