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Corruption Control - Part Three - Southern Water

Parts one and two of this blog series have looked at the hopelessly inadequate and poorly applied measures the Environment Agency claims it uses to manage conflicts of interest such as shareholdings in water companies and other regulated companies as well as directorships and interests in other companies.

The response to the example coming up may shock you.

The Agency has guidance that should prohibit directors from having compromising interests but it hasn't been applied and it hasn't worked.

Note - We do not claim to have evidence of wrongdoing on the part of the person named as the subject of this blog and we do not claim to have evidence of corruption by Southern Water but we are calling out the Environment Agency's leadership's and the government's negligent attitude to corruption control.

In October 2022 we sent a report on a series of 'conflict of interest' issues to Sir James Bevan who was the CEO of the Environment Agency until March 2023 - his response was to delay and dodge the questions we put to him.

There is still no reply from Environment Secretary Thérèse Coffey who we wrote to in March this year. We can only assume that she has little interest in establishing the reasons why regulation has failed.

This time we take a look at the case of Dr Toby Willison.

Dr Willison joined the EA in 2002 and rose to Director of Operations by 2015 - he was Acting Chief Executive at one stage.

Rather bizarrely, he became a Non-Executive Director of British Water (BW) in 2019. At the time BW described itself as a lobbying organisation for the water industry but presently describes itself as a 'trade organisation'.

In his declaration of 19.2.2020, Dr Willison described it as a ‘dynamic trade association'.

From the company’s articles of association regarding its purpose - item 7.7 states:

to monitor, seek to influence and campaign for or against policies, proposals, decisions, and legislative or regulatory instruments of government and other institutions in the UK and overseas which are relevant to the interests of the UK water and wastewater industry, to make government and other institutions aware of those interests and of the views of Members and to establish and foster such contacts with representatives of government and other institutions as appear to the Company to be appropriate for those purposes;

Well, that seems clear enough to make it highly inappropriate for a senior member of one of the 'other institutions' one of the most important to be a Non-Executive Director of it and thereby to serve the 'interests of the UK water and wastewater industry.'

However, he was allowed to take on the role (if anyone in the EA Board actually noticed and enquired) and we asked the following question of his boss at the Agency, Sir James Bevan:

'What consideration was given to the blatant conflict that placed an agent of British Water, working for the water industry, inside England’s key environmental regulator of the industry at a senior executive level? May we please see the documents that relate to the review of this situation and its management, showing when it became known? '

The question was not answered by Chief Operating Officer, Lucy Hunt, when she replied on the CEO's behalf.

Enter Southern Water...

Many people will recall news coverage of the £90M fine given to Southern Water, a company with a long history of criminality. The case was finalised at Canterbury Crown Court in July 2021.

The Southern Water offences took place between 2010 and 2015 and the result of the long period of pollution of coastal waters was very considerable environmental damage, and financial harm to the community and shellfish industry. The offending was massive and protracted.

Prosecuting Lawyer, Andrew Marshall told the court the offending was deliberate and was known about at corporate level.

“It was known about and permitted at a high level in the company, was brought about deliberately, by a deliberate lack of control and investment and ... has caused very considerable environmental damage by the release of raw sewage into coastal waters,”.

This was “the worst case brought by the Environment Agency in its history”, the court was told. Southern Water had acted “deliberately” and had reaped “considerable financial advantage” by allowing the discharges.

(source - Sandra Laville in the Guardian, 6 July 2021)

The Judge of course also noticed the link to the company's management: His Honour Mr Justice Jeremy Johnson said the offences had been "committed deliberately" by Southern Water's board of directors at the time.'

The "sheer scale" of offending meant it was "inherently unlikely this was due to a small number of rogue employees".

"It is far more likely to be due to deliberate disregard for the law from the top down," the judge said.

(Source BBC report July 2021)

It is inconceivable that the Director of Operations did not have a role in the management and decision-making in respect of such a large and high-profile investigation.

The questions that leap from the brief summary of accounts we have highlighted are:

  1. Why did none of the directors so clearly identified as culpable by the judge, not appear in court?

  2. Were they even investigated and if so, with what degree of competence and determination and what was the outcome?

  3. Why was the Proceeds of Crime Act not applied as it has been frequently in waste industry cases?

Prior to the July 2021 sentencing, Southern Water pleaded guilty to the offences in March 2020.

By September 2020 Dr Willison had accepted a senior job from Southern Water - during the final stages of the judicial process.

We understand that Southern Water created the job for him and that no competitive selection process was employed. We don't know what his salary was to be or how it compared with his remuneration at the EA.

Sothern Water's media announcement

Dr Willison's move was reported by the Guardian following contact by WASP, and in response to the newspaper's Sandra Laville, a spokesperson for the Agency and Dr Willison said:

“clear rules around conflict of interest” were put into place as soon as he decided to take up the new job. They would not go into detail about the measures taken, but said: “During [Willison’s] notice period he has stepped out of all relevant water company discussions and decision-making. He remains bound by and understands his ongoing duty of confidentiality once he takes up his new job.”

'Stepping out of relevant water company discussions' seems to confirm he was in them until that point.

The Agency won't go into what measures were taken or how it could possibly apply a confidentiality restriction in practice.

It is hard to imagine a more vague and feeble response to a serious compromise of the Agency and such a matter of public interest and confidence; a response that was invoked ‘as soon as he decided to take up the new job’ rather than when conversations and negotiations were underway, and we remain sceptical that anyone other than Dr Willison and his contacts at Southern Water knew when that was.

Our concern has been heightened by Sir James Bevan's avoidance of this question:

'May we ask whether the Agency or any other body conducted any investigation into whether there had been any inappropriate activity or communication in this case and if so, may we see the report?

This was the Chief Operating Officer's response in this respect: 'With regard to the conflicts of interests of Toby Willison and (redacted as not connected to this case) these people no longer work for the Environment Agency. However, I can assure you that these declarations of interest were recorded at the time and we are confident that any risks were appropriately managed as per the process for managing conflicts set out in the beginning of this letter.'

So that's it then, The Director of Operations left to work for one of the most notorious water companies during major criminal proceedings against the company and the leadership of the Agency has no further interest in what the consequences may be or what the consequences were, and shows no concern about the signal that sends to the rest of the workforce, the industry and the public.

The process that Lucy Hunt refers to is so vague as to be meaningless.

Dr Willison is currently Director of Environment and Corporate affairs at Soutrhern Water. The revolving door between regulated companies and regulators is well known a key feature of the 'capture of regulators' and something that should be avoided or strictly controlled.

Link to Regulatory Capture Theory:

Under the leadership style we have observed,it seems the Environment Agency is not a regulator fit to operate in the voracious commercial world it inhabits, where pollution for profit is deeply rooted and companies benefit by avoiding regulation. A world where the deliberate and corporate abuse of regulation and the law has been shown by campaigners to be rampant while the regulators mainly looked the other way.

The Board and Executive Directorship are exposed to interests that they themselves are supposed to control. The system is broken.

The Environment Secretary who is ultimately responsible for the shambolic state of regulation is simply avoiding the hard questions, which will not go away.

Just like the infrastructure, the regulatory system is broken and leaky

We do not claim to have evidence of corrupt activity by Dr Willison or Southern Water but we do say that the measures to provide tranparency, show probity and retain public confidence in the regulator/regulated relationship are not working.

Finally, a glimmer of hope for reform; the new CEO of the Agency, Philip Duffy, has just taken up post, so WASP is referring the corruption control papers to him. We will report on his response.

Next time - the Legal department.



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