Thames Water

[Benihana]

In the linked article it mentions...

When commenting on the level of the fines, His Honour Judge Sheridan, noted this was a record breaking fine for record breaking offending. He asks that the fines must be met by Thames Water, and not be passed onto customers; it was the company, not the customers, who broke the law.

 

[Avenged7Fold]

That said, since they dont have full control over water pricing, it is pointless statement made by the judge.

 

[ttaskmaster]

That way the shareholders are punished and will take out their ire on the Directors.

Without the shareholders to invest, the infrastructure becomes neglected and water services fail. With the shareholders, some of the money gets paid in dividends and the like, but enough remains for maintenance and infrastructure investment.
A lot of TW is foreign investment, anyway.

The Directors are punished as they probably hold shares/options and their holdings are diluted.

It was still management, not the senior execs who chose the strategy, though.

They must have known they'd get caught, I imagine they probably did the old cost analysis thing and worked out the fine would be cheaper than the cost to treat the sewage (or whatever other problem they had that releasing the sewage into the river system fixed).

I believe it was problems with old, knackered pumps at pumping stations, which cost a fortune to maintain.
And yes, until today there has never been a fine or cost of failure anything close to the cost of maintenance... I think this was covered on a BBC article, which mentioned the recent trend of increasing fines to hold companies responsible in a way that they actually feel it.

 

[TangoEchoAlpha]

That'll be my water bill going up then. I wish the water industry was deregulated as well, so we had a choice of supplier.

 

[ttaskmaster]

That'll be my water bill going up then. I wish the water industry was deregulated as well, so we had a choice of supplier.

We will, soon.
Already commercial customers have the choice of supplier.

BUT....

The same utilities companies will continue to own and maintain the actual assets and simply sell services to the retailers wholesale, who then retail it to us.
For the actual supplier (ie service provider) to change, you'd probably have to force the water company to sell their assets to other companies.

 

[asim18]

should be prosecuting the individuals making that decision in that case and giving them personal fines and/or prison sentences

Totally agree.

Fining a business is silly in a lot of circumstances, everyone except the responsible person has to pay for his mistake.

 

[flexo786]

has anyone seen any figures to say what its cost to clean up the sewage and what they saved by just dumping it?

 

[Lord-Jaffa]

Probably saved more just dumping it and paying the fine rather than treating it.

 

[Pipe & Slippers]

Without the shareholders to invest, the infrastructure becomes neglected and water services fail. With the shareholders, some of the money gets paid in dividends and the like, but enough remains for maintenance and infrastructure investment.
A lot of TW is foreign investment, anyway.

It was still management, not the senior execs who chose the strategy, though

I agree with what you say but if they the shareholders employ incompetent directors, they need to pay some price
Same goes for the directors. They are responsible for what happened whether it was their direct decision or not
You can't let companies/people off from the consequences of doing bad things

 

[Kenai]

That'll be my water bill going up then. I wish the water industry was deregulated as well, so we had a choice of supplier.

You soon will but like the energy industry, all that really means is a bunch of middle men creating a layer between the customer and the people who actually produce the water and treat the waste.

 

[Nasher]

What should happen instead, is their contracts are cancelled and offered to someone else.

These corporations don't care about fines, but say your voiding their contracts and toys immediately get thrown out of the pram. That is the way to punish them.

 

[ttaskmaster]

I agree with what you say but if they the shareholders employ incompetent directors, they need to pay some price

Shareholders don't decide who is appointed a director, any more than they get to decide who is appointed to management.
Might as well fine the employees, who "didn't try hard enough"* when reporting the issues to their management....

*Quote from someone phoning in on the radio this morning.

 

[MeEsH BaKkA]

This will keep happening until Tideway is completed, not really much you can do with a Victorian sewage system, massive building development and 8 million people all it needs is heavy rain and sewage is diverted into the Thames untreated for relief.

The alternative is people wading through their own **** and it backing up through toilets, not exactly ideal for a first world major city, I'm sure they'll happy pay the fine for pollution rather than the billions in compensation for ruining every ground floor property in central London.

 

[Pipe & Slippers]

Shareholders don't decide who is appointed a director, any more than they get to decide who is appointed to management.
Might as well fine the employees, who "didn't try hard enough"* when reporting the issues to their management....

*Quote from someone phoning in on the radio this morning.

I'm interested to know what you position is on this - your first and second post implies that neither shareholders or Directors have any culpability (?)
I agree that the shareholders are so remote from the day to day running, they don't exercise any real influence, but they are the ones that own the company
Ultimately the responsibility for the way the company behaves, and that includes the actions of its employees, lies with the Directors. If the Directors don't know what their staff are doing they are not acting competently

 

[ttaskmaster]

This will keep happening until Tideway is completed, not really much you can do with a Victorian sewage system, massive building development and 8 million people all it needs is heavy rain and sewage is diverted into the Thames untreated for relief.

That's debatable...
One argument is around cleaning the existing sewers out, so they don't surcharge and need either a Tideway Tunnel or spillage into the Thames. The main point of debate is around the cost of cleaning vs the cost of Tideway, though - Customers don't want all their bill money spent on sewer cleaning, but neither do they want it spent on a big ugly mega-sewer development that blights their land for a short time...
The kicker is that customers also don't want their sewers to block up and spill into the rivers, but they still happily chuck all manner of stuff down the sewers that then block up as a result...!!
Build the biggest sewer you like, it will still need the same amount of cleaning because it will keep blocking up so long as customers chuck stuff down there.

I think it all actually worked better pre-privatisation, TBH...

I'm interested to know what you position is on this - your first and second post implies that neither shareholders or Directors have any culpability (?)

Perhaps not directly and less likely in the case of the shareholders.

I agree that the shareholders are so remote from the day to day running, they don't exercise any real influence, but they are the ones that own the company

In Thames's case, the actual shareholders invested in an investment company, that invested in Thames and manages the shareholding companies' investments on their behalf.
It's also further complicated because the problems that have led to Thames being fined are a hang-over from past management as well as present and many of the current shareholders have only just invested in the last couple of months. McQuarrie only recently sold their 28% stake. This is likely the first these new shareholders have even heard about the problems!
But in addition, most of the Thames investors are pension schemes, including those of BT and the Royal Canadian Mounted Police - You hit them with the punishment, you rob peoples' pensions... possibly including your own, depending on all the details.

And lastly, I'm sure companies aren't above lying in order to secure investments... You want to punish someone for being lied to?

Ultimately the responsibility for the way the company behaves, and that includes the actions of its employees, lies with the Directors. If the Directors don't know what their staff are doing they are not acting competently

But the employees are also capable of taking some quite serious actions that the directors cannot immediately prevent. They can be (and a few have been) fired and prosecuted for it afterward, with some hefty punishments available, but the directors themselves are not always directly responsible.

 

[fez]

Its the same with the banks, until the people actually responsible for these actions suffer then there is no real incentive to care. I would happily earn millions a year for even a couple of years, run a bank into the ground and then get fired. Wouldn't care if I couldn't get a similar job again either. Chances are good that I would however because the bank suffers, not the people who made these decisions. The shareholders who matter will have made huge sums from my dodgy actions for years anyway so they won't suffer either.

 

[Windle]

That's debatable...
One argument is around cleaning the existing sewers out, so they don't surcharge and need either a Tideway Tunnel or spillage into the Thames. The main point of debate is around the cost of cleaning vs the cost of Tideway, though - Customers don't want all their bill money spent on sewer cleaning, but neither do they want it spent on a big ugly mega-sewer development that blights their land for a short time...
The kicker is that customers also don't want their sewers to block up and spill into the rivers, but they still happily chuck all manner of stuff down the sewers that then block up as a result...!!
Build the biggest sewer you like, it will still need the same amount of cleaning because it will keep blocking up so long as customers chuck stuff down there.

I think it all actually worked better pre-privatisation, TBH...

That's a stupid argument, you cannot physically build sewers capable of withstanding all weather events. It's not conomic and it's not practical due to the size of sewer you would require. It's why all sewer systems are design to overflow to watercourses, it has nothing to do with cleaning and blockages albeit I agree more could be done in this side. In the circumstances of this particular fine the issues were avoidable as per the EA statement and that's why it's been levied so high, if these were standard CSO discharges there would have been no fine as it would have effectively been permitted, unavoidable pollution.

 

[ttaskmaster]

That's a stupid argument

It's one already put forward by numerous engineers in the industry, actually, as a challenge to the requirement of the Tideway tunnel.
The sewer system is still well within design capacity and it's just the lack of cleaning causing high siltation and cross-sectional area loss that is reducing capacity, leading to the claimed 'requirement' for a stupidly large storm drain.

you cannot physically build sewers capable of withstanding all weather events.

That's not what Tideway is about. It's a cheap (and IMO temporary) solution against the time and effort in cleaning, because the latter is so involved.

It's why all sewer systems are design to overflow to watercourses

They aren't, which is why we don't have trade effluent spilling into our rivers. Surface sewers do, after a screening process. Foul sewers go to treatment works, primarily. A few have CSOs as emergency overflows, where surface waters sufficiently dilute the flows.

In the circumstances of this particular fine the issues were avoidable as per the EA statement and that's why it's been levied so high, if these were standard CSO discharges there would have been no fine as it would have effectively been permitted, unavoidable pollution.

CSOs discharge as overflows, not by design.
These incidents were caused by treatment works and pumping station failures. Those sewers were never supposed to discharge, ever.

 

[Windle]

A few have CSOs? There are tens of thousands in the UK and found in every water company region.

 

[ttaskmaster]

A few have CSOs? There are tens of thousands in the UK and found in every water company region.

And there are many millions of sewers in the UK. A few thousand is just a handful and since they (should) only discharge in emergencies, the outfall is minimal.