A Shropshire man was one of four who have been charged over alleged efforts to manipulate water quality tests to avoid millions of pounds in penalties.
Clive Massey, 65, of Brandhill, between Craven Arms and Knighton, has been accused alongside three others of conspiring to defraud the Environment Agency (EA) and water regulator Ofwat by manipulating the self-monitoring regime at water treatment works to avoid failing environmental checks.
The move could have avoided fines of £45 million or higher, according to the allegations.
Massey, along with Southern Water Chief Executive Matthew Wright, as well as Philip Barker and Mark Gregory, who also worked at the company, have been charged with conspiring to "defraud persons performing public duties in respect of environmental and financial regulation" of Southern Water, including the EA and Ofwat.
If convicted, they could face up to 10 years in prison.
Waste water treatment works can only be run with an environmental permit issued by the EA, but since 2009, treated effluent from facilities has been tested to ensure it complies with the rules under an "operator self-monitoring" scheme.
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Tests by water companies are carried out in unannounced visits by teams which operate separately from teams that operate the works.
Results are shared with the EA and Ofwat, with penalties if they do not meet the terms of the permit.
But if the discharge flow at the time of the test is insufficient to take a sample – known as a "no-flow event" – it is not recorded as a fail.
Massey, along with Wright, 61, of Haslemere, Surrey, Barker, 58, of Chiltington, West Sussex, and 64-year-old Gregory, of Southampton, are accused of conspiring to implement artificial no-flow events at waste water treatment works between 2012 and 2017.
A summons was issued last year but a legal challenge over the move was launched by Wright, who joined Southern Water from United Utilities in 2011 and left in December 2016, going on to be managing director of Orsted and then hold senior roles at other energy companies.
His lawyers told the High Court in June that the EA did not have the power to issue the summons and that it should be thrown out as a "nullity".
On Wednesday, two senior judges dismissed Wright’s claim and ruled that restrictions previously preventing reporting of the legal challenge should be lifted.
Lord Justice Popplewell, sitting with Mr Justice Hilliard, said the charge against Wright involves "very serious allegations of criminal misconduct".
He said: "What is alleged … involves carefully planned and extensive fraud and dishonesty at a high level within the company and on a large scale, including, for example, arranging for wastewater to be removed from facilities by tankers in order to create no-flow results, with a view to covering up pollution and deceiving those whose function is to protect the public from such harm.
"The EA says that by the company’s own assessment, it avoided penalties of the order of £45 million, and on the EA’s assessment the figure is higher."
Stephen Shergold, Wright’s solicitor, said following the ruling: "Mr Wright denies all wrongdoing and has co-operated fully with the Environment Agency’s investigation."
Southern Water has separately been charged with dozens of offences of failing to comply with or contravening an environmental permit condition between 2013 and 2017 at multiple waste water treatment works.
The case will now proceed at Medway Magistrates’ Court.
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