Polluters like water or energy companies that befoul UK rivers and seas or spill waste will face unlimited penalties and tougher sanctions, according to expanded government legislation announced Wednesday.
(Bloomberg) — Polluters like water or energy companies that befoul UK rivers and seas or spill waste will face unlimited penalties and tougher sanctions, according to expanded government legislation announced Wednesday.
“We are scrapping the cap on civil penalties and significantly broadening their scope to target a much wider range of offenses — from breaches of storm overflow permits to the reckless disposal of hazardous waste,” Environment Secretary Thérèse Coffey said in a statement. The current limit is £250,000 ($323,625).
Read more: Water Companies Admit Bills Will Rise to Fix UK’s Sewage Crisis
Previously, higher penalties like the £3.3 million fine on Thames Water Ltd. for sewage in rivers near Gatwick Airport earlier this month, could only be levied when incidents go through criminal proceedings. While the new powers will allow for quicker fines, the most serious incidents will still go through the criminal courts, the Environment Agency said.
“A tighter policy/regulatory regime is closing in on the UK water sector, ahead of the planning for the next regulatory period, putting upward pressure on the associated risks and cost of equity,” said Ahmed Farman, equity analyst at Jefferies.
The legislation follows a consultation by the Department for Environment, Food and Rural Affairs, which examined the pollution of UK rivers and seas with sewage and untreated wastewater. The government’s ‘Plan for Water’ intends to strengthen regulation and prevent companies from accepting fines in lieu of paying the high costs of treating their sewage.
Environmental campaigners have previously accused water companies like Thames Water Plc of borrowing heavily to fund large dividends and executive bonuses instead of investing more heavily into the system’s often-antiquated infrastructure. Investors in the company, the UK’s largest water utility, have agreed add £750 million in equity funding to help stave off a temporary government takeover.
(Updates with additional details in third paragraph, analyst comment in fourth.)
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