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New CEO - Passing the buck.

On 12 January we wrote to ask the new Thames Water CEO, Chris Weston about Thames Water polluting our drinking water supply but mainly to establish whether he intended to keep breaking the law in the same way his predecessors had.

(WASP Blog Jan 28)

One of the reasons that pollution remains profitable - the Environment Agency mostly asks the water companies to investigate themselves.

He chose to pass the buck - (presumably on the advice of the company's lawyers - funded by the billpayer) to Cathryn Ross who had been doing his job in a temporary role before he moved in.

But he authorised it, so we will treat it as if it came from Mr Weston, particularly as the second question was only answerable by him - it was about his personal intent.

'Do you intend for the company to continue to operate outside the law or will you bring an end to your predecessors’ exploitation of the Environment Agency’s tolerance of criminal pollution and, if so, when? '

Here is his reply written by Cathryn Ross on his behalf. We will cover the water supply questions another day and keep our eye on the ball - the law

Reply from CW - via CR Feb 2024
Download PDF • 129KB

Skirting around the illegality with the same approach and the same language introduced by CEO Sarah Bentley in 2020, the letter states:

'As you know, we regard any discharge of untreated sewage as unacceptable, even when it is legally permitted.'

Bampton Sewage Works dumped untreated sewage for 1815 hours in 2023.

But we are not asking about the captive public being forced to accept the 'unacceptable' from a monopoly water company, we are asking whether the new CEO of Thames Water will decide to continue to break the law by not fixing illegally operating assets.

The company cannot hide behind Ofwat allegedly denying funding, especially when it was allocated money to upgrade a range of sewage works and sewers by 2025 but still let 108 of the required projects fall back as far as 2030 or beyond and some of those are operating illegally. Furthermore, despite claims to the contrary, the company is free to eat into its profits to fix anything else - but of course, it doesn't - perhaps because Directors know that breaking the law is profitable.

This comment from the reply made for Mr Weston drives our point home:

 "as you are well aware - the overall problem is huge and delivering all of the necessary improvements will take time."

Yes, we are well aware that previous CEOs ran the company in a way that created this black hole of underinvestment over 33 years as a consequence of deliberate underinvestment. At the same time, they took massive salaries and bonuses and the shareholders were awarded generous dividends while the company racked up over 160 criminal convictions and must have contravened the Ofwat license terms, especially this one:

So, where does the buck for criminality stop?

In 2017 when Thames Water was fined £20M, Judge Francis Sheridan said the scale of the problem was such that it must have been known up the chain of command.

He told Aylesbury Crown Court "it was inconceivable that all the individual managers made the same decisions to run pumps at half levels, calling it a "shocking and disgraceful state of affairs".

He added: "It should not be cheaper to offend than to take appropriate precautions." And there he hit on the heart of the failure of privatisation and regulation -it was and it still is.

(Source BBC News)

In July 2021 at Canterbury Crown Court, Southern Water was fined £90M. 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.

The offences had been aggravated by Southern Water's "persistent pollution of the environment" which had led to 168 previous convictions and cautions, he said.

(Source BBC News 9 July 2021)

Interestingly, during the closing stages of the trial, the then Director of Operations of the Environment Agency (prosecuting Southern Water) was given a job with - Southern Water. You can read more about that in our blog of July 7 - Corruption Control Part 3.

These are just two of the most serious offences to get to court - most illegality goes unaddressed. Hidden from the public.

There is a huge amount of evidence on offer to show which sewage works and networks operate illegally (WASP's Prof Peter Hammond's work opened that door through data analysis) and to link the decisions and actions of the Company Directors to that illegality - but the Environment Agency won't go there.

So something is stopping the Environment Agency from dealing with water company Directors - but what?

The question takes on even more significance when we discover that the Directors of Waste companies are being prosecuted and even imprisoned for very similar conduct - In the following case, a breach of an environmental permit refers to the same regulatory framework under which water companies operate.

The conduct of waste and water company directors appears to be so similar yet they are treated so differently - why?

The offender, Mr Connell, was sentenced to 22 weeks, imprisonment suspended for 12 months, ordered to pay costs of £8,132.45 and a victim surcharge of £115. Mr Connell was also disqualified from being a director of a company for 3 years.

(source Defra blog)

There are many examples like this.

And vitally importantly, the Proceeds of Crime Act 2002 is being used extensively against the waste industry to recover the ill-gotten gains - as far back as 2008, £1.2M was seized from a waste operator and the EA has just established an Economic Crime Unit to deal with waste companies - yes, the same Agency that claims it can't afford to regulate the water industry properly.

Waste companies don't just get to carry on and put up customers' bills like water companies do.

Water companies can dump hundreds of thousands of tonnes of untreated sewage illegally, but nothing happens to the Directors or the money they make and take when the company operates outside of the law - why not?

Most commonly nothing even happens to the company.

Thames Water, alongside the other water/sewerage utilities, is currently being investigated for various offences as part of a national investigation that has already been going on, effectively in secret, for over two years. The company knows which of its assets are under capacity and those that are are still dumping untreated sewage illegally and have been doing so for years.

Mr Weston must know what he has taken on but perhaps based on the fact that no Chief Executives have ever done anything but benefit from illegally operating water companies so far, has decided to take the job and the risk that goes with it - and of course, it is well rewarded.

Thames Water revealed that Mr Weston will be paid £850,000 a year, plus £117,000 in pension and benefits, and a further potential £1.3 million in performance-related bonuses.

(source iNewspaper)

So there we have it - a ridiculously high salary to be paid to a CEO running a company that is making its money while breaking the law and by breaking the law. A company that cannot lose its customers as it has the monopoly rights to supply an essential resource to them and has normalised illegal pollution as a profitable business activity.

Progress on bonuses?

On 12 February, Defra announced for the second time that Ofwat is consulting on reducing water bosses' bonuses for serious offending. The same announcement was made on 30 March last year and nothing changed so we think this is just more hot air. There are many ways that companies can get around whatever restriction might be made so it must come as a great comfort to those bosses who are operating sewage assets illegally that there is still no intention of looking at their personal criminal liabilities - lawbreaking in plain sight.

But the law is the law, the facts are the facts, the evidence won't go away and one day soon, things may change.

It's something that all water bosses might want to think about.



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