Southern Water, its former chief executive Matthew Wright, and three other former employees have been charged by the Environment Agency with conspiracy to defraud in relation to alleged manipulation of sewage treatment compliance checks. According to the agency, the charges stem from an operation that took place between January 2012 and December 2017 involving a “carefully planned and extensive fraud” designed to deceive regulators and avoid penalties.
The Environment Agency claims that the group orchestrated artificial "no-flow events" at wastewater treatment sites by removing sewage via tankers to create false test results. This was allegedly done to conceal pollution levels and mislead the Environment Agency and the water industry regulator Ofwat, both responsible for enforcing environmental standards and public health safeguards. The self-monitoring regime in place requires water companies to conduct regular sampling and report accurate data on wastewater treatment processes. The manipulation of this system is viewed as a serious offence and can carry a maximum prison sentence of 10 years.
A recent judgment by Lord Justice Popplewell and Mr Justice Hilliard emphasized the high-level and large-scale nature of the alleged dishonesty within Southern Water, stating the scheme allowed the company to avoid approximately £45 million in penalties, with regulatory assessments suggesting the true figure could be even higher.
Southern Water, which supplies water services to over four million customers across Kent, Sussex, and Hampshire, will also face separate charges for breaching environmental permits related to the same misconduct. Additionally, three other individuals are to be charged concerning failures to comply with these environmental rules.
Wright, who is the first water company chief executive to face criminal charges in this context, denies all wrongdoing. His solicitor, Stephen Shergold, confirmed that Wright has cooperated fully with the Environment Agency’s investigation.
The case follows previous enforcement actions against Southern Water, including a record £20 million fine in 2021 for illegal raw sewage dumping. In 2019, three former employees were convicted for obstructing the Environment Agency’s data collection efforts.
Southern Water acknowledged the charges relate to historic failures identified during an internal investigation in 2017, which were promptly reported to relevant regulators. The company stated it has since undergone significant changes under new leadership and shareholders, focusing on improving governance, culture, and operational practices. Southern Water emphasized its commitment to ongoing reform and compliance moving forward.