Exposed: Britain's worst polluters

They make billions in profits, and deliver millions in dividends to their shareholders. They care a sight less about the environment.

More than a dozen blue chip companies were revealed yesterday as serial polluters who simply shrug off the paltry fines for breaking the law. Even for Anglian Water Services, the worst of Britain's offenders last year, the financial penalties amounted to less than one-thousandth of its annual profit.

The consequences are stark: rivers where thousands of fish have died; dumping of thousands of tons of waste contaminating inner-city allotments; an entire town where the groundwater could be contaminated with petrol. That near catastrophe at Luton, Bedfordshire, was caused by a hole the size of a 10 pence coin in a BP storage tank. It could take more than a decade to clean up. BP, the guilty party, was fined just £60,000.

The evidence, contained in the Environment Agency's fifth Spotlight report on companies' environmental behaviour in England and Wales, frustrated Barbara Young, its chief executive. She said: "Fines are still small change for big business."

That statement shows the lessons from the court case following Britain's biggest environmental disaster - when a Welsh port authority was prosecuted after the oil tanker Sea Empress ran aground in 1996 - have still to be learned. In March 2000, a panel of judges said fines for environmental offences should be "substantial enough to have a real economic impact'' on the offenders. The aim? To "create sufficient pressure on management and shareholders to tighten regulatory compliance and change company policy".

Instead, the fines revealed in the report are little more than flea bites on some of Britain's wealthiest companies. While the number of prosecutions rose by 13 per cent, and the total fines imposed by the courts rose by 36 per cent, the average fine per prosecution rose only slightly, to £8,744.

To Baroness Young, the conclusion was obvious. "One constant theme has echoed down through successive Spotlight reports - the weak response of the courts to environmental crime," she said. "With irreparable environmental damage or serious risk to public health, penalties often fail even to match up to costs avoided. This is unacceptable."

There is no sign that the Government is listening. The Department for Environment, Fisheries and Rural Affairs, in charge of environmental legislation, said yesterday that changing the sentencing system would require primary legislation. Instead, the department said it prefers to "educate" magistrates, who deal initially with all the cases, about the importance of environmental offences.

Some of the biggest fines went to repeat offenders, who made up one-fifth of the annual list of poor performers. Three companies - Anglian Water Services, Welsh Water, and Thames Water - have featured in the list every year. In that time, they have been fined more than a million pounds. Set against combined profits for last year, of £680m, it looks paltry.

All said yesterday they had cleaned up their act. Anglian Water said that it is investing £1m per day on new monitoring and treatment technologies, and that it "learned from every incident". It was "pleased that the Environment Agency recognises we have 99 per cent compliance with discharge consents, the best bathing water quality results ever and the best river water quality since before the industrial revolution".

Yet last year the trio accumulated £446,500 in fines, nearly half their five-year total, suggesting that there is no great improvement.

Craig Bennett, corporate accountability campaigner for Friends of the Earth, said: "It's good that the Environment Agency is bringing these prosecutions, but it is clear that the biggest and baddest businesses see fines as a price worth paying when they can make profits at the expense of people and the environment, and when the fines are tiny compared to the cheques they hand out to their fat cat directors."

Nor was there much penitence from United Utilities, which racked up the year's biggest cumulative fine, of £327,500. Stephen Beaumont, manager of its service delivery business, commented that its prosecution record "takes the shine off" the praise he detected in the rest of the Agency's report. "It says that we are the best-performing water company," he said.

The Environment Agency aims to get tough. Magistrates' courts can impose a maximum fine of £20,000. But the Crown Court can impose, theoretically, an unlimited fine. The biggest fine ever imposed for pollution was £750,000 against Milford Haven Port Authority in 2000, after it sent an inexperienced pilot to bring the oil tanker Sea Empress into port.

"We're trying to focus on the magistrates to raise their awareness of the risks that environmental incidents carry," said a spokesman for the Agency. "The key thing is to get the judiciary to realise the need for the more serious cases to be heard in the Crown Court."

ANGLIAN WATER SERVICES

Incidents (2002): Six

Fines (2002): £285,000

Profits (2002): £332.4m

Worst offence: Sewage wipes out most wildlife in Elstow Brook, Bedfordshire

Last five years: Seven other offences

BP

Incidents: One

Fines: £60,000

Profits: £5.46bn

Worst offence: Massive petrol leak contaminates Luton's water supplies

Last five years: One other offence

SHANKS

Incidents: Five

Fines: £89,000

Profits: £26.9m

Worst offence: Poison gas leak from landfill in Buckinghamshire

Last five years: One other offence

THAMES WATER

Incidents: Eleven

Fines: £135,000

Profits: £279.6m

Worst offence: Sewage leaked into houses at Earlswood , Surrey

Last five years: Nine other offences

UNITED UTILITIES

Incidents: Twelve

Fines: £327,500

Profits: £330m

Worst offence: Sewage discharge with low oxygen levels kills wildlife

Last five years: Seven other offences