My research list

Loading My Research List ...

Save my research

Don't lose any of your research. Fill out the form below and have your research list emailed to you.

Register to receive our latest publications

Government to establish water quality watchdog

August 02, 2019

Contacts

Partners Padraig McNamara, Matt Conway, Gerald Lanning, Bill Loutit, Jonathan Salter, Sarah Scott, James Winchester
Senior Associates Tim Fischer

Water management Local government Resource Management Act

Local Government and Health Ministers Nanaia Mahuta and David Clark have confirmed long-anticipated plans to establish a dedicated water quality regulator, as the centrepiece of regulatory reform that aims to ensure safe drinking water and deliver better environmental outcomes from New Zealand’s wastewater and stormwater systems.

In Summary - what you need to know

  • The new regulatory system is proposed to be implemented over a five year period, with staggered timeframes for compliance. The regulatory regime will capture all water suppliers except individual household self-suppliers.

  • The Government intends to decide later in 2019 how to address the cost implications of complying with the enhanced regulatory regime, including whether financial assistance from central government needs to be provided.

  • It’s not yet known if the Government intends to require aggregation of drinking water suppliers, however, the new compliance obligations create strong incentives for territorial authorities/drinking water suppliers to aggregate voluntarily.

  • Proposals in respect of wastewater and stormwater are directed at improving transparency through reporting requirements and providing greater guidance to local authorities and service providers, with support from a central regulatory agency.

  • Later this year Cabinet will consider whether the same regulator will be responsible for the drinking water supply, wastewater and stormwater functions.

Background

The Government estimates that 34,000 people across New Zealand become ill as a result of poor quality drinking water every year. Establishing a dedicated drinking water regulator was a key recommendation of the Government Inquiry into Havelock North Drinking Water which followed the 2016 outbreak of campylobacter in that town.

The Government’s announcement also signals an intention for greater regulation of wastewater and stormwater as well, reflecting concerns with wastewater and stormwater discharges, and their impact on bathing water quality in particular, that have been prominent throughout New Zealand over recent years.

Cabinet papers released with the Ministers’ announcement indicate that these proposals will be implemented through the Water Services Bill which the Government is aiming to introduce to Parliament by the end of the year, with possible enactment by mid-2020.

Responsibilities of the regulator

The functions of the regulator will include: sector leadership, setting standards, compliance, monitoring and enforcement, capability building, information, advice and education, and performance reporting. It can be inferred from the Cabinet paper released by the Government that the regulator’s mandate is to address public health issues. There is no indication that the drinking water regulator will have any economic regulatory functions equivalent to those held by the Commerce Commission.

The details of the regulator will be the subject of further Cabinet consideration later this year. The question of whether the same regulator will be responsible for the drinking water supply, wastewater and stormwater functions is also to be considered as part of the business case prepared later this year.

A better system for regulating drinking water and protecting source water

The new regulatory system is proposed to be implemented over a five year period, with timeframes for compliance being staggered. This allows water suppliers to adjust to the regulations, with support and assistance from the new regulator. The regulatory regime will capture all water suppliers except individual household self-suppliers.

There are requirements for registration of drinking water suppliers, preparation of and compliance with drinking water safety plans and compliance with other regulatory requirements.

Wastewater and stormwater services

Compared to the drinking water proposals, the proposals in respect of wastewater and stormwater do not involve such a significant structural shift from the status quo. They are directed at improving transparency through reporting requirements and providing greater guidance as to what is expected of regional councils and service providers, with support from a central regulatory agency. Regional councils would remain the primary environmental regulators.

Implications of the announcement

The Government acknowledges it will be challenging for smaller drinking water suppliers to comply with the new regulatory framework. It intends to decide later in 2019 how to address the cost implications of complying with the enhanced regulatory regime, including whether financial assistance from central government needs to be provided. Both Local Government New Zealand and Water New Zealand have already called for this, since the Government’s announcements on Wednesday evening.

There may also be scope for smaller suppliers to work together and pool resources to achieve compliance with the new regime. In some cases this may prove an efficient way of spreading the costs of compliance over a broader base. The Government has still to make announcements on whether it intends to require aggregation of drinking water suppliers - an issue flagged earlier in the Government’s Review of Three Waters Infrastructure. However, the new compliance obligations create strong incentives for territorial authorities and other drinking water suppliers to aggregate voluntarily. They may also reduce resistance from the sector, should the Government introduce legislation that requires aggregation to occur.

Another one to keep an eye on - Health (Drinking Water) Amendment Act

The Health (Drinking Water) Amendment Act received the Royal Assent on 31 July 2019.

This Act tightens the provisions in Part 2A of the Health Act in relation to compliance obligations for water supply and drinking water standards. It is going to be easier for the Minister/Ministry of Health to change drinking water standards, and the duties on those implementing water safety plans are clarified and made more rigorous. Further, those implementing water safety plans will have fewer excuses for not implementing water safety plans fully and promptly.

The Cabinet paper proposes to repeal this part of the Health Act 1956, which regulates drinking water, and to carry over existing provisions into the Water Services Bill, with amendments as appropriate (in some cases to reflect that the regulator would have a role in the process).

For more information on these developments and assistance in making a submission on the Water Services Bill, please get in touch with your regular Simpson Grierson contact or one of our people above.