Archived press release

Environment Agency report shows Companies Bill must be strengthened and fines increased

26 July 2006

Friends of the Earth will today (26 July) challenged the Government to strengthen its Companies Bill when it returns to the House of Commons in the autumn, after the revelation that its current proposals for annual environment reports would affect just one of the top ten polluting companies from last year.

The organisation will be writing to Margaret Hodge, Minister for Industry to demand action.

The revelation is contained within the Environment Agency's annual "Spotlight on Business" report which details the watchdog's enforcement activities over the last year. It "names and shames" individual companies and the fines levied against them.

The Companies Bill, which represents the biggest shake-up of company law for decades, finished in Standing Committee last week and is due to return to the House of Commons for its Third Reading and Report Stage in September. As currently drafted, it will require all quoted companies (i.e. "PLCs") to produce a "Business Review" that must include information on:

"the impact of the company's business on the environment ….including information about any policies of the company in relation to the above matters and the effectiveness of those policies".

This provision does not apply to private companies (i.e. Ltd) and yet, of the top ten polluters from last year, 9 were private companies and only 1 was publicly quoted [1].

Friends of the Earth's Head of Corporate Accountability said:

"The Government needs to look no further than the evidence coming from its own environment watchdog to see why it should be requiring all 36,000 large and medium sized public and private companies to report on environmental issues - not just the 1,300 or so publicly listed ones".

Friends of the Earth is also calling for fines to be proportionate to business turnover: The Environment Agency report details that Carlsberg UK Ltd was fined a total of £25,000 for 2 events categorized as "illegal waste activity". This is £11,000 less that the average cost of a single primetime TV advert and a tiny proportion of the £10 million that Carlsberg is estimated to spent on its advertising campaign around the World Cup [2].

United Utilities Water PLC were fined a total of £47,500 for 4 water pollution incidents, an amount that its former Chief Executive, John Roberts earned every 21 days in 2004/2005 [3].

Craig Bennett continued:

"Even the largest fines levied against polluting companies are tiny in relation to other business expenses, such as advertising budgets or directors' remuneration. Until we see fines that are proportionate to business turnover, it is nave to consider them as an effective deterrent; the reality is that many companies see environmental fines as a legitimate and insignificant business expense".

Notes

[1] The top 10 cumulative fines were levied on: Thames Water Utilities Ltd, Sundorne Products Ltd, Robinson Brothers Ltd, Southern Water Services Ltd, Severn Trent Water Ltd, Edmund Nuttall Ltd, United Utilities Water PLC, Wyman Ltd, Easco (Midlands) Ltd, Jewson Ltd.

[2] For an estimate on how much Carlsberg spent on its World Cup campaign see: www.dolphinmarketing.co.uk/news/corporate-promotional-gift/211/article.php

For an estimate on how much it costs for Sunday primetime TV adverts see: http://news.bbc.co.uk/1/hi/programmes/working_lunch/3590733.stm

[3] The Remuneration Report from the United Utilities Annual Report and Accounts 2005 indicates that its Chief Executive, John Roberts earned a total emoluments of £814k for financial year 2004/2005 (representing £2230 a day).

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Published by Friends of the Earth Trust