A perfect storm: Storm overflows and the new legislative pressures

With dry, hot weather putting water companies in the spotlight over the summer and bringing even greater scrutiny over sewage discharges, Nick Barker, environmental lawyer and principle associate at the law firm Weightmans, discusses the new requirements they now face following the passage of new Environment Act last year and the publication of the government’s Storm Overflows Discharge Reduction Plan in August.

Over recent weeks water companies have faced further scrutiny in the press after excess sewage and rainwater caused by flooding continued to be discharged into seas around Britain. This adds to a sustained period over which discharges into waters have come under review.

The issue of storm overflows is not a new one; its current status reflecting the complexity of the problem. They are the result of a Victorian sewer infrastructure, operating as safety valves built into the combined sewer system. They discharge excess sewage and rainwater to rivers, lakes, or the sea when the sewer system is under strain, protecting properties from flooding and preventing sewage backing up into streets and homes.

Like many, water companies have long regarded the situation as unacceptable, but lacked the necessary statutory and regulatory framework to act. This has changed with the passing of the Environment Act 2021 and the publication of the Storm Overflows Discharge Reduction Plan (the Plan), marking a watershed in the industry’s approach to the issue.

The Environment Act sets out a requirement for sewerage undertakers to secure a progressive reduction in the adverse impacts of storm overflow discharges, while the Plan provides clear and unambiguous requirements for what is needed.

We explain the changes, as well as the imperative of ensuring regulatory compliance in the short term and steps water companies can take to do so.

Regulatory shifts

The Environment Act contained several key provisions relating to storm overflows, including the requirement for the government to prepare a plan for reducing discharges (both frequency and volume) from the storm overflows of English sewerage undertakers and reducing the adverse impacts (both on the environment and public health) of those discharges. This requirement has been met in the form of the Plan, meeting the Environment Act’s 1 September deadline.

The Plan sets out ambitious targets requiring water companies to participate in a mandatory £56 billion investment project to fix the long-standing issue of storm overflow discharges. Two clear targets are:

• By 2035, water companies must have improved all overflows discharging into or near all designated bathing water, and improved 75% of those discharging to high priority sites
• By 2050, no storm overflows will be permitted to operate outside of unusually heavy rainfall or cause any adverse ecological harm

Progress against this plan will be scrutinised by Ofwat, the economic regulator for the water industry, and the Environment Agency (EA), the environmental regulator in England.

Supporting them to do so are strengthened monitoring and reporting requirements, including:

• 100% coverage of storm overflows through event duration monitoring (EDM) by 2023, requiring water companies to report the frequency and duration of spills
• Storm overflow data to be published annually, with frequency and duration data required in near real time
• Monitoring the water quality impact of assets that discharge sewage into river systems

What should water companies be doing in the short-term?

Water companies will be reviewing the Plan and carefully considering what it means for long-term planning and future investment. The scale of this project cannot be understated.

The immediate challenges presented by storm overflows will not, however, go away. Where water companies aren’t meeting existing legal obligations, the EA have a range of options available to them, including issuing enforcement notices, prosecuting water companies in the criminal courts and in extreme cases even jailing individuals whose water companies are responsible for the most serious incidents (although that hasn’t happened to date).

These enforcement options will be considered against a background of increasing public scrutiny. In addition to extensive press coverage, the recently created Office for Environmental Protection announced an investigation the roles of Ofwat, the EA and Defra in relation to their regulation of combined sewer overflows. The aim of this investigation is to establish whether they have failed to comply with their respective duties regarding the monitoring and enforcement of water companies’ own duties to manage sewage.

There is an investigation underway by the EA into potential non-compliance by water and sewage companies at wastewater treatment works, against which recent comments calling for tougher sentences on water companies that pollute, including prison sentences for chief executives and company boards whose water companies are responsible for the most serious incidents. This brings and even greater imperative to ensure compliance with existing regulations.

In addition to the long-term measures required to tackle storm overflows, water companies will be looking to:

• Strengthen compliance – Water companies will be regularly reviewing their environmental management systems to ensure they are proactively monitoring compliance with existing legislation such as the Environmental Permitting Regulations and the Urban Wastewater Treatment Regulations. This review will also help provide evidence that water companies are taking full responsibility for their environmental impacts, an expectation set out in an open letter from Ofwat earlier this year.
• Take commitments seriously – Water companies operate sophisticated systems for the identification and investigation of environmental incidents. Arguably discharges from storm overflows warrant consideration as a distinct category of incident within these systems.Monitoring conditions and reporting requirements are already included within discharge permits for each storm overflow identified for EDM, with a detailed framework for assessment. However, a wider approach to their investigation and reporting will provide an insight into common causes, demonstrate a proactive approach to regulators and stakeholders, as well as mitigating reputational risk arising from discharges.
• Get clued up on reporting – Annual and real time reporting by water companies are important requirements of the Environment Act. These responsibilities should however be approached with care and will need to be consistent with and complementary to wider company reporting, such as that on ESG.
• Harness the potential of data, knowledge is power – Improving EDM data provides a robust and consistent way of monitoring storm overflows. Water companies should consider the potential of data generated by increased monitoring responsibilities, with opportunities to: engage real-time data analytics solutions to support operational decisions; provide elevated insight into operational risk management; inform investigations into discharges; and engage with stakeholders.

The Plan will help water companies bring much needed improvement to Britain’s antiquated sewer infrastructure and have a positive impact on the environment.

Alongside a commitment to achieving its long-term objectives, a key focus will be ensuring current legal obligations regarding storm overflows are being complied with and the problem is being tackled with urgency.