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Environmental fines are not large enough to be a deterrent, according to the chair of the Environment Agency, who has called for penalties to be based on a percentage of company turnover.
“Fines need to hurt”, said Emma Howard Boyd speaking at the Institute of Water’s environment conference, stressing current penalties were “disproportionately small” when compared to other sectors such as financial services.
She said the agency has brought 44 prosecutions against water companies in the past five years resulting in £34 million of fines. That amount included a £20 million penalty for Thames, which Boyd said “was only worth ten days’ worth of operating profit” for the company.
“Economic turnover penalties are the next natural step if, after fair warning, water companies do not turn around their performance,” Boyd said. “That means the most serious breaches by very large companies would be based on a percentage of their turnover.”
She called for criminal courts to apply penalties consistently and proportionately, because “anything less is no deterrent.”
Southern Water received the largest penalty handed out by Ofwat to date for misreporting sewage pollution incidents over a five-year period. The EA brought a separate case for which the company is awaiting sentencing in the new year at Maidstone crown court after pleading guilty to 51 charges.
Decarbonisation at EA
Elsewhere in the address, Boyd set out the EA’s goals for reaching net zero by 2030, taking into account the emissions of its supply chain partners.
She said the group is on track to achieve the target by reducing emissions by at least 45 per cent this decade and offset the remaining.
The EA’s carbon footprint is around 180,000 tonnes a year, comprised of 44,000 tonnes from its own activities and 136,000 from its supply chain.
Boyd said not enough is being done fast enough for the sector to reach net zero, but praised the ambition and leadership shown in the commitment to decarbonise.
She called for an equal effort to reduce pollution incidents and prepare the country for floods and droughts to help transform the environment.
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