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Managers of water companies in England and Wales may be subject to penalties for unauthorized release of sewage, resulting in the loss of bonuses.
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Managers of water companies in England and Wales may be subject to penalties for unauthorized release of sewage, resulting in the loss of bonuses.

The government officials will prohibit bonuses for executives of water companies in England and Wales if they do not successfully prevent illegal sewage spills that contaminate bodies of water such as rivers, lakes, and seas.

Various groups, such as Labour and the Liberal Democrats, have been urging the government to adopt a policy in response to public anger regarding the negative effects and frequency of unlawful releases of untreated sewage.

The secretary of the environment, Steve Barclay, is suggesting the prevention of bonuses to company executives who are involved in criminal cases of water pollution. This measure will begin with the 2024-25 fiscal year starting in April.

Over the past four years, despite illegally discharging large amounts of sewage into waterways, bosses received over £26 million in bonuses, benefits, and incentives.

Last year, top-level managers at five out of the 11 water companies responsible for sewage received bonuses. However, the executives at the remaining six companies chose not to accept bonuses due to public outrage.

Simultaneously, businesses have declared intentions to raise consumers’ expenses by approximately £156 per year in order to fund investments aimed at preventing 140,000 sewage overflow incidents that occur annually.

Later this year, Ofwat will seek feedback on the specifics of the suggested ban. According to Barclay, this punishment should be enforced on all companies that have committed significant criminal violations.

According to the Department for Environment, Food and Rural Affairs, a bonus may be prohibited if a company has been convicted of serious management failures or if there has been a successful prosecution for the top two types of pollution (causing significant pollution at a bathing site or conservation area).

This could pertain to CEOs and all members of the executive board.

If put into action, Ofwat would enforce the measures by altering the terms of water company licenses.

It is unacceptable for individuals to benefit from unlawful actions, and it is necessary for water company leaders to be held accountable for their actions.

“Stronger measures must be taken to tackle the inadequate performance of water companies. I am glad that Ofwat is taking additional steps today regarding incentive payments.”

There is absolutely no excuse for companies to award bonuses if they have committed criminal violations. This practice must come to an end immediately.

In the near future, I will provide more information on additional measures to improve the cleanliness of our waters. This will involve reducing the dependence on water companies’ self-monitoring and implementing stricter accountability measures to encourage the necessary improvements.

Labour takes the lead, while the Conservatives follow suit, according to shadow environment secretary Steve Reed.

Last year, Labour urged for the water regulator to have increased authority in preventing bonuses for water executives who contribute to pollution. Despite not taking action for 14 years, the Conservatives have now been pressured into adopting Labour’s proposal.

However, it is necessary for them to take additional steps and support the entirety of Labour’s proposal to improve the cleanliness of our rivers. This also means holding accountable executives who repeatedly engage in illegal sewage dumping by pressing criminal charges against them.

The Labour party has stated that, according to their proposed plans, Ofwat would have had the power to prevent six out of nine water company executives from receiving bonuses last year.

A representative from Ofwat stated: “We implemented new measures last year to ensure that executive bonuses are tied to achieving improved results for customers and the environment.”

“Today’s statement expands upon that strategy, but goes even beyond. We will seek feedback on the specifics of the suggestions later in the year.”

According to Tim Farron, the spokesperson for the Liberal Democrats on environmental issues, after a long campaign led by his party two years ago, ministers have finally given in. However, even with this recent attempt to ban bonuses, it is still seen as insufficient and lacking in strength.

There has been widespread anger among the public as Conservative politicians have stood by disgraced water companies and refused to take action against excessive bonuses.

“Each day, these companies that harm the environment and prioritize profits are able to escape consequences. The practice of awarding bonuses should be prohibited immediately, regardless of any criminal convictions.”

Source: theguardian.com