The Upper Tribunal (Administrative Appeals Chamber), in Smartsource Drainage & Water Reports Limited ("Smartsource") v The Information Commissioner, has upheld the decision of the Information Commissioner ("IC") and found that privatised water and sewerage companies do not fall within the definition of public authorities for the purposes of the Environmental Information Regulations 2004 ("the Regulations").

The scope of determining what is a public authority under the Regulations has always been wider than under the Freedom of Information Act 2000 ("FOIA").  This case will therefore also be of interest to privatised utility companies and other regulated bodies, as it looks at the issues of control and providing functions of public administration in relation to determing what is a public authority.

Under the Regulations, the public has a right to request environmental information from any public authority. The definition of "public authority" includes: a government department; all organisations covered under the FOIA; or any other body or person that carries out functions of public administration or is under the control of a public body and exercises environmental duties.

Smartsource made a request for information from 16 different privatised water and sewerage companies under the Regulations.  All of the water companies refused to provide the information on the grounds that they were not public authorities for the purposes of the Regulations.

Smartsource then appealed to the IC, who held that they did not have the power to adjudicate on the matter as the water companies were not public authorities for the purposes of the Regulations and, therefore, fell outside his remit. Smartsource made a further appeal to the First-tier Tribunal, which ruled that the case should proceed to the Upper Tribunal due to the significance of the case.

In determining whether water companies perform functions of public administration, the Upper Tribunal adopted the factors that were established by the Information Tribunal in Network Rail Ltd v Information Commissioner (2006). The factors that should be taken into account include the extent to which, in carrying out the relevant function, the body is:

  • publicly funded; or
  • exercising statutory powers; or
  • taking the place of central government or local authorities; or
  • providing a public service, or the performance is of a regulatory function, or the body has a degree of governmental control. 

The Information Tribunal held that Network Rail was not a public authority as they failed to satisfy the majority of the factors.

The Upper Tribunal found that, when applying these same factors, the water companies had satisfied even fewer factors than Network Rail.  As such, the water companies were held to fall outside the definition of a public authority. The Tribunal held that the water companies had not been created by statute, but instead were merely appointed and licensed under statute. This was not the same as being required by a statutory regime to perform functions of public administration.

The Upper Tribunal then went on to consider the difference between regulation and control as water companies could also be subject to the Regulations if they were "under the control" of public authorities.  However, the Upper Tribunal stated that "control must go further than the functions associated with regulation", and held that although the water companies were subject to a regulatory regime, they were not under a system of control given their level of commercial freedom.
The decision by the Upper Tribunal will affect several other appeals against IC decisions, including one by the angling organisation Fish Legal, which has been requesting data on sewage discharges.

It is not yet clear whether Smartsource will appeal the decision, but Fish Legal is still intending to continue with its appeal against an IC decision, which was put on hold pending the Smartsource decision.

The decision will be welcomed by water companies in England and Wales, who will be relieved that they will be spared the time and expense of responding to requests for environmental information under the Regulations.

It should be noted that this decision only applies to privatised water and sewerage companies in England and Wales.  In both Scotland and Northern Ireland there is a single water company, both being a company in public ownership, which is subject to the environmental information requirements as well as being specifically covered under the Freedom of Information regime.  Therefore, different considerations apply to the water industries in the various jurisdictions of the UK.

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