The warning follows the publication of an environment agency report entitled Spotlight on Business: Environmental Performance in 2003, which showed that 11 company directors last year received fines of up to £20,000 for pollution incidents, around four times as many as five years ago.
The food processing industry is a major contributor to industrial waste. According to the Environment Agency, the UK's food and drink sector produces between seven and eight million tonnes of waste per year, second only to the construction industry and consumes approximately 900 megalitres of water each day, enough to supply almost three-quarters of all customers' needs in London daily.
"The Environment Agency is taking a careful look at some interesting schemes in use elsewhere in the world, such as black-listing of companies with poor environmental records when procuring services; imposing suspended penalties which double or treble if the fault is not corrected and the making of restoration orders to put right environmental damage at the expense of the offender," said agency chief executive Barbara Young.
The report also stated that greenhouse gas emissions from regulated industry had increased by 5 per cent, reinforcing fears that the government would not meets its targets of a 20 per cent cut in emissions on 1990 levels by 2010. However, the Environment Agency said that the drive towards greener manufacturing is paying off, with the number of pollution incidents from industry down 12 per cent on 2002 and by 43 per cent over the last two years.
The farming industry cut the number of serious pollution incidents by around 25 per cent in 2003, the best result from the sector since environmental agency records began.
The CBI, which has criticised the UK government's implementation of environmental regulations, welcomed what it called the "balanced tone" of the Spotlight on Business report. The institute felt that it fairly acknowledges the effort that responsible business has made to improve environmental performance, with a 30 per cent reduction in pollution incidents over the past four years.
"Firms are not trying to avoid meeting their environmental obligations," said Michael Roberts, CBI director of business environment. "Responsible companies view fair enforcement, backed by effective sanctions, as an important part of their operating environment."
However, environmental group Friends of the Earth has urged the government to go further.
"We want to see tougher penalties for companies, but we also need new laws that impose environmental and social duties on directors," Brian Shaad, Friends of the Earth's corporate campaigner told the UK's Guardian newspaper.
"This would create a business environment in which companies would consider the real impact of what they do."
The government is currently consulting on its operating and financial review (OFR), which companies will be required to produce as part of their annual reporting process. The OFR would give an overview of a company, providing shareholders with key information on its objectives, strategies, past performance and future prospects.