So creditors wishing to take over Thames Water want the company and its senior management to be granted clemency from rules on sewage spills and environmental protection (Bidders demand Thames Water granted immunity over environmental crimes, 7 June). The rights of investors, it would seem, should prevail over the rights of communities to a clean environment.
It is the failure of rigorously enforced regulation that led to the mismanagement of Thames Water, with loans being used to increase shareholder dividends and bloated bonuses for incompetent managers. In many countries the law can now be used to confiscate private assets gained from immoral activities, such as drug-running and prostitution. There is no reason why those who accrue wealth through the degradation of the natural environment should be treated any differently.
Far from granting immunity from prosecution, the government should tighten the law to enable the criminal prosecution of the managers responsible and the repayment of shareholder dividends awarded by an underperforming business. Such a move would enable financial markets to promote good corporate governance and environmental sustainability. After all, financial investors and shareholders want profitable businesses that provide them with financial returns. If investors knew that they could lose their investment and dividends by investing in a company such as Thames Water, they would soon look to invest in more ethically run businesses.
The government should now initiate legal proceedings to seize the assets of those managers who enriched themselves by creating a debt-laden, high-polluting water company. The proceeds should be invested in water infrastructure and environmental clean-ups. And Thames Water should be taken into public ownership and its assets auctioned off. Only socially responsible investors need apply.
David Humphreys
Emeritus professor of environmental policy, Open University
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