One of my close friends, along with her family and others, regularly swims in the Thames – her partner is a serious triathlete and trains on the Henley to Maidenhead stretch. I’ve never been tempted to join them, being a poor swimmer and not fond of freezing water, but there are other dangers as well, as you might guess.
In October, the UK’s Environment Agency (EA) issued its annual assessment of the nine privatised water and sewerage companies, and its Chair, Emma Howard Boyd, said their performance continued to be unacceptable. Water companies in England were responsible for their worst levels of environmental pollution for five years in 2019, so matters appear to be getting worse rather than better.
The EA performance assessment published showed 2,204 “pollution events” last year – the highest number since 2014. Southern Water was top of the list of shame, with 458 incidents, nearly double its 2018 total. South West Water wasn’t far behind. Severn Trent, Wessex and Northumbrian water were the “best” and also the only three to show a year on year improvement.
Last month the Times also reported on Thames Water and its failure to reveal huge releases of sewage directly into the Thames. Its Mogden Sewage Treatment Works in west London is supposed to process waste from two million people.
As the Times reported, “In an emergency resulting from heavy rain, and in order to forestall a calamitous back-up of Britain’s antiquated sewerage system, sewage plants are permitted to release raw effluent into the nearest river, in this case the Thames. These releases must be recorded by devices known as event duration monitors. … And yet, in February this year, after a spillage large enough to fill 240 Olympic-sized swimming pools, the Mogden monitors recorded no release whatsoever. Thus no warnings were issued. Last year seven out of 26 such spills went undetected by Thames Water”.
The firm blamed “human error” for the lack of recording of these events – very convenient. Back in 2017, Thames Water was fined £20 million for its illegal release of 1.9 billion litres of untreated sewage into the Thames. That remains the biggest fine given to a water company, but is tiny compared to Thames’ annual operating profit of half a billion pounds or so. And although the EA complains about the firms’ performance, its own looks pretty pathetic. It brought only 4 prosecutions against firms last year, with fines of just £1.3 million in total. That is also just under half the payoff awarded to the CEO of Thames when he left earlier this year, fired over leakages and pollution incidents.
Meanwhile, the Guardian calculates that since 1991, just after privatisation, water companies have paid out £57 billion in dividends, some £2 billion a year on average, much of which has gone to private equity investors. Indeed, companies have increased their borrowings in order to pay dividends, paying interest on their debt out of customer income. The CEOs have also gained, with salary packages of over £2 million a year not unusual. Critics suggest that less in the way of dividends – and perhaps bonuses to top management - could have opened up the prospect of more capital investment to replace old plant and reduce these pollution events.
We won’t get too political here, although the Labour Party’s policy to re-nationalise the industry was one of the more popular in their last election manifesto. The problem from a procurement with purpose standpoint is that customers of the firms have little real choice. The industry is still in effect a series of local monopolies - which in itself leads to obvious questions about whether it was a suitable sector for privatisation.
But we’ve seen how large buyers in the public and private sector can exert real influence on suppliers in many procurement with purpose areas, from modern slavery to deforestation. To do that, buyers need some leverage, some ability to put pressure on suppliers to change their ways. It is not clear that large water users have that power; however, it would be good to see more effort made by those corporate and industrial customers. At least they could highlight the problems, and perhaps embarrass their water suppliers more publicly if they don’t perform.
Saving the orangutans and addressing global warming are very admirable and high-profile procurement with purpose topics, and resonate well with consumers and the media. But wouldn’t it be good if we could also focus on stopping water firms here in the UK from pouring raw shit into our rivers?