Southern Water and ex-CEO face criminal charges over wastewater tests
Matthew Wright faces fraud allegations in Environment Agency’s first charges against a water boss
Southern Water, its former chief executive and three other former employees face criminal charges brought by the UK’s Environment Agency over allegations they undertook a “carefully planned and extensive fraud” to cheat sewage treatment compliance checks.
The agency said on Wednesday that Matthew Wright, the utility company’s former CEO, is among the four former employees. The charges mark the agency’s first criminal proceedings taken against a water company’s boss for alleged failings on their watch.
The EA alleges that between January 2012 and December 2017, the four conspired to defraud the agency and the UK’s water regulator Ofwat by “manipulating” its self-monitoring testing regime by carrying out “artificial no-flow events at wastewater treatment works”.
“What is alleged against [them] involves carefully planned and extensive fraud and dishonesty at a high level within the company and on a large scale,” Lord Justice Popplewell and Mr Justice Hilliard wrote in a judgment on Wednesday.
The scheme is alleged to have involved the removal of sewage from treatment sites by tankers “in order to create no-flow results, with a view to covering up pollution and deceiving those whose function is to protect the public from such harm”, according to the judgment.
The self-monitoring regime requires water companies to take samples at their wastewater treatment works and report the results to the EA.
According to Wednesday’s judgment, the EA alleges that the scheme allowed Southern Water to avoid penalties of about £45mn while the regulator’s own assessment put the figure higher.
The EA said: “Strict rules govern how samples must be taken to ensure their independence and accuracy. It is an offence if there is evidence that flows or data are deliberately manipulated to avoid compliance checks.”
Conspiracy to defraud carries a maximum sentence of 10 years’ imprisonment.
Stephen Shergold, Wright’s solicitor at White & Case, said he “denies all wrongdoing and has co-operated fully with the Environment Agency’s investigation”.
Southern Water, which serves more than 4mn customers across Kent, Sussex and Hampshire, would separately face charges of breaching environmental permits in connection with the same conduct, the agency said. Three further individuals will also face charges linked to failure to comply with environmental permits.
In 2021 Southern Water received a record £90mn fine for illegally dumping between 16bn and 21bn litres of raw sewage from 17 different sewage plants.
Three former staff members at the company were separately convicted of obstructing data collection by the Environment Agency in 2019, but this marks the first time a CEO of a water company has faced criminal charges.
Southern Water said in a statement: “The charges relate to a historic set of failures between 2012 and 2017. These were uncovered through an internal company investigation in 2017. As soon as they were identified, Southern Water reported them to regulators, including the Environment Agency.”
It added: “Under new leadership and backed by new shareholders, we’ve radically addressed our culture, governance and operations. We’re serious about further change and improvement, and are investing in our largest-ever programme to protect the environment.”