PIEN HUANG, HOST:
England's land - so goes an old song - is green and pleasant, but for years, many of its rivers have been dirty and gross. That's because of sewage discharge that causes pollution and has led to considerable controversy around the nation's privatized water system. Now, a major new review is shaking up the industry and cleaning up the waterways, as Willem Marx reports.
WILLEM MARX, BYLINE: Humans have lived near the River Kennet in the west of England for thousands of years. Today, so, too, does James Wallace, who's shown me what was one of his family's favorite swimming spots.
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JAMES WALLACE: It is beautiful, but as we step towards the water edge, we can see this carpet going along the bottom of algae, which is snuffing out the opportunity for life. And it means that on the top, on the surface, we see a vibrant, healthy habitat, and beneath, we see a dead one. And that is because of sewage pollution.
MARX: The pollution comes from a nearby sewage treatment plant, run by a company called Thames Water. It's now nationally notorious. In May, it was fined nearly $165 million, a record, for discharging untreated sewage into rivers, with a separate fine for paying hefty but unjustified dividends to its shareholders.
WALLACE: We're seeing the places like this, which are highly protected, natural environment, are being trashed by corporate profits.
MARX: Wallace runs an environmental campaign group called River Action and wanted me to see Thames Water's nearby treatment plant, a few miles upriver.
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WALLACE: How about I show you some of the wilder bits?
MARX: Behind a green metal gate, the facility handles smelly household sewage and rainwater runoff. But as Britain's population increases and its rainfall dwindles under climate change, pressure on the overall water system has increased, while spending on it has historically not.
WALLACE: The system was designed to cope with it years ago, but not now. Because of a lack of investment across the industry, not just Thames Water, it means the whole of Britain is exposed to a serious crisis in water pollution.
MARX: And after sewage started clogging the country's waterways and stinking up shorelines, that systemwide crisis has prompted a massive public outcry. The U.K. was once known as the dirty man of Europe thanks to its industrial pollution. That improved with the introduction of environmental rules. But then Margaret Thatcher privatized the Victorian age system, and ever since, a couple dozen companies - of which Thames Water is the largest - have been responsible for providing fresh water and removing raw sewage. It's a system that's largely failing, says Bertie Wnek, an infrastructure expert at the policy consultancy Public First.
BERTIE WNEK: What we have is a situation where companies have been kind of incentivized to bring on a load of debt onto the system over time, and we're finding now that we're sort of paying the price for that behavior.
MARX: The U.K.'s water regulator had long prioritized low bills for customers, preventing companies from raising revenues as much as they wanted. So some like Thames relied instead on borrowing money to invest in new infrastructure and generate their profits, amassing huge debts along the way.
HUGO TAGHOLM: This is both an environmental issue. It's a health issue, but it's also a financial scandal.
MARX: Hugo Tagholm is a surfer and swimmer who led the campaign group Surfers Against Sewage. He's now with the nonprofit Oceana and criticizes companies for extracting tens of billions of dollars from the industry as profits rather than reinvesting.
TAGHOLM: This is something that's enraged the public. The system needs, you know, massive investment, and that really should come from shareholders and the owners of those businesses rather than the customer.
MARX: Many companies acknowledge investment is needed but argue responsibility for new funding should lie with regulators and political leaders, says Jeevan Jones, chief economist at the industry's advocacy group, Water UK.
JEEVAN JONES: The way to get investment is through clear regulation, strong steers from governments and a system that brings in the finance and the investment projects that upgrade those networks and increase our supply.
MARX: For its part, Thames Water said in a statement this May that it takes its, quote, "responsibility towards the environment very seriously" and says the U.K.'s water regulator, quote, "acknowledges that we've already made progress to address issues raised." Keir Starmer's government has commissioned an independent report into these problems. The final findings come out this month and will likely suggest an entirely new system of regulation. That can't come soon enough, says Bhikhu Samat, legal director at the U.K. law firm Shakespeare Martineau, where he specializes in water regulations.
BHIKHU SAMAT: It's really a great way for us as a nation to look at what our goals are with water scarcity and climate change impacting us hugely. The recess is well overdue.
MARX: The water companies' customers will hope any future changes could calm Britain's troubled, sometimes dangerously dirty waters. For NPR News, I'm Willem Marx in Marlborough, England. Transcript provided by NPR, Copyright NPR.
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