New Statutory Pollution Incident Reduction Plans

What Water Companies Need to Know

On 8 January 2026, the Environment Agency and Natural Resources Wales published joint guidance on new statutory requirements for water companies to prepare and publish annual Pollution Incident Reduction Plans (PIRPs) and Implementation Reports.

This marks a shift from the previous voluntary regime to mandatory legal obligations, with failure to comply now a criminal offence for both the company and its chief executive personally. The regulators may also impose civil sanctions as an alternative to prosecution, applying a lower burden of proof. Beyond immediate penalties, a company's PIRP implementation record will be considered in future regulatory and enforcement decisions, and chief executives face potential director disqualification proceedings and significant reputational consequences in the event of conviction. With the first PIRP due before 1 April 2026, water companies should be familiar with the guidance.

What has changed?

New Legal Obligations

The Water (Special Measures) Act 2025 has inserted new sections 205A to 205C into the Water Industry Act 1991, creating two statutory obligations:

Pollution Incident Reduction Plans (PIRPs): Water companies must prepare and publish a new PIRP before 1 April 2026, and annually thereafter. Each PIRP must review the measures currently in place to reduce pollution incidents and review pollution incidents that occurred in the preceding calendar year and explain how the company will reduce pollution incidents in the next calendar year.

Implementation Reports: Water companies must prepare and publish Implementation Reports before 1 April 2027, and annually thereafter. Implementation Reports must contain the undertaker's assessment of the extent to which the previous PIRP succeeded in implementing the planned measures during the preceding calendar year and, where it failed, the reasons for that failure and how the undertaker intends to avoid repeating that failure in respect of similar measures in its current plan.

Criminal Liability

Failure to comply with any requirement relating to PIRPs or Implementation Reports is a criminal offence under section 205C of the Water Industry Act 1991. Both the water company and its chief executive may be prosecuted. The penalty is an unlimited fine - there is no cap on the amount, and no provision for imprisonment. Chief executives have a statutory defence if they can prove that they took all reasonable steps and exercised all due diligence to ensure compliance. Importantly, this defence is personal to the chief executive and does not absolve the company itself. The offences are also designated as "relevant offences" under Part 3 of the Regulatory Enforcement and Sanctions Act 2008, meaning civil sanctions (such as fixed monetary penalties, discretionary requirements, stop notices, and enforcement undertakings) may be applied, subject to an appropriate order being made to activate those powers.

Practical Implications of Personal Liability

The personal liability provisions have significant practical implications for chief executives. Unlike typical corporate offences where liability rests with the company, the Act creates automatic personal exposure for the CEO whenever the undertaker fails to comply. To rely on the statutory defence, chief executives will need to demonstrate and document the steps they took to prevent non-compliance. This means establishing clear governance structures, maintaining audit trails of decision-making, ensuring adequate resourcing for PIRP preparation and actively overseeing the process rather than delegating entirely. Companies should consider what evidence would be needed to establish the defence and ensure contemporaneous records are kept.

Mandatory Chief Executive Approval

PIRPs and Implementation Reports must include a statement by the chief executive that they have personally approved the plan. This requirement creates board-level accountability and oversight of pollution reduction strategies.

What must PIRPs contain?

Core Content Requirements

PIRPs must include a review of measures currently in place to reduce pollution incidents; a review of pollution incidents that occurred in the preceding calendar year; and an explanation of how the company will reduce pollution incidents in the next calendar year.

The guidance provides expectations for each element:

Review of Current Measures: Water companies should describe the measures they currently have in place to reduce pollution incidents, including both operational measures and strategic initiatives. This should include reference to relevant Drainage and Wastewater Management Plans (DWMPs) and how these align with pollution reduction objectives.

Review of Previous Year's Pollution Incidents: Companies must analyse pollution incidents from the preceding calendar year, identifying patterns, trends, and root causes. The guidance distinguishes between immediate causes (such as equipment failure) and root causes (such as inadequate maintenance planning or insufficient investment). For example, while a pump failure might be the immediate cause of a pollution incident, the root cause could be inadequate preventative maintenance schedules or underinvestment in asset replacement programmes.

Planned Measures for the Coming Year: PIRPs must set out specific, measurable actions the company will take in the next calendar year to reduce pollution incidents. The guidance includes a list of standardised measures that water companies should consider, though companies are not limited to this list and may include bespoke measures appropriate to their circumstances. For each planned measure, companies should explain how it will reduce pollution incidents, provide timescales for implementation, and identify who is responsible for delivery.

Integration with Existing Planning: PIRPs should be aligned with companies' DWMPs, which set out long-term strategies for drainage and wastewater management over a 25-year planning horizon.

What must implementation reports contain?

The PIRP regime requires two distinct annual "returns": the PIRP itself (forward-looking) and the Implementation Report (backward-looking). Both must follow a structured format. The guidance requires undertakers to use example tables for presenting incident data summaries, breakdowns of frequency, seriousness and causes, lists of measures planned or taken, timelines for delivery, and assessments of impact. The purpose is to ensure consistency and comparability across all undertakers. PIRPs and Implementation Reports must not be purely narrative documents - they must include structured tabular information so that pollution incidents are presented numerically and categorically; actions are shown with dates, responsible teams, and progress indicators; and effectiveness can be assessed transparently. Companies holding both water and sewerage appointments must produce a single PIRP covering both systems, with clear separation between the two.

Structure and Format of Returns

From 2027 onwards, water companies must publish annual Implementation Reports assessing their performance against the previous year's PIRP. In statutory terms, these reports must describe the steps actually taken to deliver the measures identified in the previous PIRP, provide an assessment of whether those steps were effective, explain any failures (meaning measures not completed, or not completed on time), and set out what will be done to avoid such failures in future. The guidance requires clear reconciliation between planned and delivered actions, evidence-backed assessment of effectiveness, narrative explanation of successes, failures and lessons learned, and transparency about reasons for any delays or partial delivery. These reports are statutory accountability documents - regulators and the public will use them to assess whether companies are delivering on their commitments.

Regulatory Oversight and Enforcement

The Environment Agency and Natural Resources Wales will consider a water company's record of implementing its PIRPs when making regulatory decisions, including enforcement actions. A strong track record of delivering on PIRP commitments may be viewed favourably, while repeated failures to implement planned measures could result in escalated enforcement. The guidance makes clear that regulators expect PIRPs to be meaningful, deliverable commitments rather than aspirational statements.

What Water Companies Must Do Now

With the first PIRP deadline of 1 April 2026 rapidly approaching, water companies should consider the following actions:

Conduct a comprehensive review of all pollution incidents from 2025, identifying both immediate and root causes using the framework set out in the guidance.

Assess current pollution reduction measures across all operational areas, including asset maintenance, operational procedures, staff training, and investment programmes.

Develop a prioritised action plan for 2026 using the standardised measures in the guidance as a starting point, supplemented by bespoke measures tailored to the company's specific risk profile.

Ensure alignment between the PIRP and existing DWMPs, identifying any gaps or inconsistencies that need to be addressed.

Establish governance structures to ensure chief executive oversight and approval of the PIRP, including evidence of the steps taken to comply with the statutory requirements.

Prepare internal systems for tracking and reporting on PIRP implementation to support the first Implementation Report.

Consider the evidential requirements for the chief executive's defence under section 205C, ensuring that all reasonable steps and due diligence can be demonstrated and documented.

Our team has extensive experience advising water companies on environmental compliance, regulatory strategy, and corporate governance. If you would like to discuss how these new requirements affect your organisation, please get in touch.

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