UK water companies face new automatic fines over environmental breaches

A consultation has been launched over proposals to tighten environmental protections, with a new upper cap on fines of up to £500,000 and a lower standard of proof among the options being explored.

The move comes in the wake of the Cunliffe report earlier this year, and its recommendations for major changes to water infrastructure regulation in England and Wales.

Among the changes being proposed are lowering the burden of proof on the Environment Agency needs to bring punishment against water companies for breaching permits or licences, as the criminal standard of “beyond reasonable doubt” currently applies.

It is proposed that this be lowered to match the civil standard of “in the balance of probabilities”. This would make it easier for the Environment Agency to impose penalties for minor to moderate breaches, which represent the vast majority of transgressions.

“These changes would be a welcome boost to our current enforcement powers and allow us to deliver swifter and more appropriate penalties,” said Alan Lovell, chair of the Environment Agency.

“Through a larger workforce and upgraded digital tools, we can deter poor performance and achieve a cleaner water environment for communities and nature.”  

The proposed changes also include introducing new automatic penalties which must be issued for specific licence breaches by companies, such as failing to report a significant pollution incident within four hours, using emergency overflows more than three times in a year, or failing to provide required data on time.

Both automatic and issued fines would vary from £5,000 to £20,000, depending on the offence and the company turnover.

“The proposals, if implemented would represent a significant change in approach, with the Environment Agency being obliged to automatically issue fines for certain offences, and a lower standard of proof applying to variable monetary penalties,” said Fiona Ross, an environmental expert with Pinsent Masons.

“The application of the proposals to matters such as the use of emergency overflows in particular could see a significant increase in penalties levied at water companies.”

A new upper limit for fines imposed by the Environment Agency to either £350,000 or £500,000 for the larger breaches is also proposed, with the UK government estimating the proposed enforcement changes would cost the water industry up to £67 million a year annually – although this would not be passed onto customers under regulator rules. 

The consultation runs until 3 December.