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Havelock North Drinking Water Inquiry, Stage 2 Report released

December 15, 2017

Contacts

Partners Matt Conway, Sally McKechnie, Padraig McNamara, Jonathan Salter, Sarah Scott
Special Advisors Tony Ryall

Local government Public Policy (inc Election 2017) Public law Water management

The Havelock North Drinking Water Inquiry released its Stage 2 report into the 2016 outbreak of gastroenteritis in Havelock North on 6 December 2017. It would be difficult to argue with the report’s logic that high standards of care should apply to drinking water. The real question will be how far New Zealand’s communities are willing (and can afford) to go towards implementing its recommendations in order to reduce the risk of similar outbreaks in the future.

The focus of Stage 2 of the inquiry was the improvement of the safety of drinking water in New Zealand, lessons to be learned from the Havelock North outbreak, and changes which should be made to achieve those goals [2]. Following the inquiry’s investigation, 19 urgent recommendations and 31 further recommendations have been made, which together call for an entire overhaul of NZ’s drinking water regulatory regime.

Vital importance of drinking water

The overarching principle that underpins the Report’s assessments and recommendations is the very high standard of care and diligence which should apply to the supply of drinking water [16]. And this is the real emphasis of the approximately 7-month investigation, that there is a real risk of a substantially worse outbreak, which would put many lives at risk, and impact on NZ’s international clean/green image. Given slightly different circumstances and/or a different pathogen, the outcomes of the outbreak could have been substantially worse [17].

The recommendations set out are therefore fulsome and detailed, urging the government and local authorities to drastically reform how they manage drinking water. However, an important side note is that the catalyst for this report was the event at Havelock North, which is a very different environment in terms of drinking water than Auckland, Christchurch or the Tasman District. Is an entire overhaul of our current drinking water regime required or is there still room for “horses for courses”?

Should all drinking water be treated?

Most notably, the report recommends that all drinking water should be appropriately and effectively treated (Recommendations 6-8 and 20). Push-back against this suggestion has been rapid; for example, the Christchurch City Council has stated it does not consider treatment necessary in its circumstances, and while some territorial authorities have commenced or expanded their water treatment since the Havelock North incident, others have not.

The Inquiry considered several reasons presented to it about why universal treatment should not be mandatory, and did not consider any of them to be compelling. Given the Report’s emphasis of the risk of doing nothing and the clear community opposition in some areas to treatment of drinking water, legislative change would be necessary before universal treatment became a reality, and this issue is likely to become a political football.

The type of water supplies that are targeted through any implementation of the recommendations will have a significant impact on the extent of benefits and the burden of the recommendations, and there will be limits to what can reasonably be justified on the basis of the Stage 2 report. In particular, despite the Inquiry acknowledging that self-suppliers were outside the scope of the inquiry, the Report urges the extension of its findings to those suppliers, not just to the networked supplies that were the focus of the inquiry and provided the evidential base for its findings. In the absence of an investigation into the nature and circumstances of self-suppliers, caution is warranted before requiring universal treatment of those supplies at this stage.

Counting the cost

A natural part of the objection by some councils to the treatment of all drinking water is the cost of doing so. If the risks of an outbreak are perceived as being low, then some may not see the need to spend substantial amounts of community money to reduce those risks further, particularly if treatment comes with a change in the taste of drinking water. However, likelihood is only one component, and the RMA proceeds on the basis that any potential effect of low probability that has a high potential impact is a relevant effect and cannot be ignored. A focus on avoiding outbreaks that could have significant impacts on communities is therefore understandable.

Despite the merits of reducing risk as much as possible, the Report does not fully address the cost of doing so. In fact, it specifically noted that an assessment of the financial implications of mandatory treatment was beyond the scope of the Inquiry [152]. Councils are on limited budgets and therefore need to make strategic choices about what is the priority for their local areas, which requires balancing of all the different effects against the economic cost of different responses. Assuming a limited appetite for hiking rates, increased expenditure on drinking water protection is likely to come at the expense of other community initiatives.

Recommendation 32 could assist in the necessary balancing exercise as it recommends that aggregated dedicated water suppliers be set up. If implemented, this approach may help to spread the cost over a wider area and allow smaller townships to obtain the funding ability of larger urban populations. This recommendation is also relevant to the ‘political football’ issue explained above. At a national level, the current Government may have difficulty requiring the formation of dedicated water suppliers, because Labour, NZ First and the Greens are on record as having opposed Watercare-like CCOs on the basis that they are contrary to local choice and subsidiarity. On the other hand, at a local government level, using CCOs to run and treat drinking water supplies could reduce the scope for water to be used as an election platform and increase the prospects of real outcomes in the short-term. In any event, further work is needed by the Government in this area to ensure the benefits of this structure outweigh the cost of setup.

“Easier” wins

However, amidst the 50 recommendations there are some that can be implemented more swiftly and with lower cost. In particular, Recommendation 37 calls for water suppliers to be required by the Director General to review their Water Safety Plans to ensure that leadership, governance and management understand the relevant drinking water risks and have appropriately addressed those risks in their strategic decision making, long term planning, audit and resource allocation processes, and delegations. It also calls for operational staff to understand the critical control points and other processes, and ensure that they are being effectively implemented.

While significant changes may take some time, at a minimum we anticipate that water suppliers will need to ensure their current systems are being effectively implemented and any obvious inadequacies are addressed.

National inquiry?

A final thought to note is that this inquiry was never intended to be a national inquiry into drinking water but that is what it has developed into. How to reduce the risk of similar outbreaks in the future was a small part of the overall terms of reference, which was focussed primarily on what happened in Havelock North. As noted above, the cost of the sweeping recommendations is not a focus of this Report and will require further consideration before any overhaul of the national drinking water regime is undertaken.

Contributors catherine.mccallum@simpsongrierson.com