The Transport and Industrial Relations Committee has examined the Infrastructure Bill and recommends that it be passed with the amendments shown.
This bill provides for a new Utilities Access Act, and makes a number of amendments to several Acts to remove a number of legislative barriers to infrastructure development. This is an omnibus bill of four Parts, covering three areas:
changes to utilities’ access arrangements to transport corridors
changes to the New Zealand Railways Corporation Act 1981
the repeal of the Affordable Housing: Enabling Territorial Authorities Act 2008.
Changes to utilities’ access arrangements to transport corridors would provide a consistent approach for local authorities, Government agencies, and utility operators. The bill would allow the Minister to approve a Code of Practice for processes relating to access to road, rail, and motorway corridors.
We consider that changes are required to the New Zealand Railways Corporation Act 1981 to remove statutory restrictions that adversely affect the running of the New Zealand Railways Corporation’s business, and to align the corporation’s governance arrangements with equivalent provisions in the Crown Entities Act 2004.
The bill would also repeal the Affordable Housing: Enabling Territorial Authorities Act 2008, while retaining a modified version of section 30 of that Act, which deals with restrictive covenants, by means of an amendment to the Property Law Act 2007. The bill proposes that the prohibition on restrictive covenants be limited to social housing, including housing for persons on low income or with special housing needs and disabilities.
This commentary discusses the main issues we considered and explains the significant amendments we recommend to the bill. It does not address minor and technical amendments.
Clause 4 says that “corridor manager”, in relation to railway land, means the licensed access provider who controls access to the land. We recommend the insertion of a definition of “railway land” in clause 4, so it is clear that it includes adjacent land that is held or used in connection with operating a railway on railway lines. This would mean that the definition of “transport corridor” in clause 4 would include such land as well as the railway line itself.
We also recommend that the definition of “utility operator” in relation to water and wastewater in clause 4 be amended to include any person acting on behalf of local authorities. The definition we have recommended takes into account the fact that not all water and wastewater utility operators are local authorities.
Clause 6(3) sets out the circumstances in which a utility operator would not have to comply with the Code when carrying out work in a transport corridor: when the Code conflicts with another enactment or obligation binding the utility operator; or when non-compliance is agreed between the corridor manager and affected operators. This prevents the situation where two participants are forced to do something inefficient and costly because it is a requirement of the Code.
We recommend that new subclause 3A be inserted to make it clear that such an agreement not to comply with the Code does not affect corridor managers’ or utility operators’ obligations under any enactment, or under any standard with which they are obliged to comply.
We recommend that clause 7(1) be amended to provide that the District Court may require a utility operator or corridor manager to comply only with the obligations set out in clause 6, rather than to comply and act consistently with the Code in general. This would allow the District Court to consider any breaches of the obligation to comply with the Code. However, before participants could apply to the District Court for a court order, they would have to use the appropriate dispute resolution procedures in the Code.
Clause 9(b) currently sets out measures to ensure that disruptions to roads, motorways, and railways caused by utility operators’ work are kept to a minimum, while ensuring public safety. We recommend that this clause be broadened by replacing “ensuring public” with “maintaining”. This would ensure that the safety of all concerned be maintained without targeting a particular group.
Clause 10(1) specifies what the Code must set out in order to achieve its purpose. We recommend a number of changes to this clause, in order to strengthen some of its provisions, particularly relating to working relationships between corridor managers and utility operators, for the sake of efficiency and effective coordination, and to insert additional provisions to clarify important detail.
It is not clear in clause 10(1)(b) as introduced that the Code must also coordinate work between utility operators. We recommend that this clause be amended so it is clear that the Code covers the principles governing how utility operators deal with corridor managers as well as other utility operators, on issues in relation to access to transport corridors.
We recommend that clause 10(1)(c) be amended to cover the coordination of work in transport corridors that affects utility operators’ assets.
We recommend replacing clause 10(1)(e) and inserting an additional clause, 10(1)(fa), to require that the Code specify how criteria for access published by corridor managers, and statutory criteria for local authorities imposing reasonable conditions, must be applied.
We further recommend that paragraph (fb) be inserted to require that the Code include processes and rules for the sharing of information, such as “as-built” plans, by utility operators and corridor managers. The extent of the obligation on small local authorities can be determined in the Code-making process.
The Code under the bill as introduced could refer to standards, guidelines, and other documents not reproduced in the Code. We recommend the insertion of new paragraph (i) to require that the Code indicate where such external material is available and in what specific edition or version.
A draft Code may be prepared by the Ministry responsible for the administration of this Part, or by any person or body of persons, using whatever processes the Ministry, person, or body considers appropriate. We recommend amending clause 11(2) to specify that the minimum consultation requirement when developing a Code is to consult with utility operators and corridor managers likely to be affected by the Code. This would involve a similar amendment to clause 12(2)(iv).
We further recommend the insertion of new clause 11(4) so that any consultation done before the bill comes into force does not count as consultation for the purposes of clause 11(2).
The intent of clause 21 and parts of clauses 30 and 32 is to restrict the ability of local authorities to impose upon utility operators conditions that would create additional amenity value, beyond the current amenity value of the area. A local authority should pay the cost of such a condition, and the area should be specified in advance. However, while local authorities would have to meet the costs of upgrading the amenity value of the area, from work carried out by utility operators, we consider they should still be able to impose conditions on utility operators to ensure they match the current amenity standard of the area.
Concern has been raised that these clauses as introduced would restrict local authorities’ ability to maintain the amenity value of certain roads and increase the costs of doing so. It was argued, for example, that local authorities should not be required to pay for utility operators installing new assets to match the existing amenity value of a road, where the utility operator would otherwise have installed a second-hand piece of equipment.
We therefore recommend that clauses 21, 30, and 32 be amended. The proposed amendments clarify that the restriction does not apply if utility operators are merely being required to maintain amenity values.
Clause 25 sets out a proposed amendment of section 142(2) of the Telecommunications Act 2001 requiring a telecommunications operator to give 10 working days’ notice of its intention to place a cabinet or other appliance on the road, to both the local authority or any other person who has jurisdiction over the road and to any utility operator whose pipes, lines, or other structures will be or are likely to be affected by the work.
The clause is inconsistent with other provisions of the Telecommunications Act, which allow local authorities 15 days to respond with conditions. We recommend retaining the requirement to give notice but removing the requirement to provide that notice at least 10 working days in advance, bringing the section into line with the Electricity Act 1992 and the Gas Act 1992.
The Electricity Act and the Gas Act currently allow both local authorities, and other utility operators whose assets are being moved, to impose conditions on electricity and gas operators. However, the Telecommunications Act allows only local authorities to impose conditions.
We recommend that the Electricity Act and the Gas Act be made consistent with the Telecommunications Act, so that only local authorities, and not other utilities, can impose such conditions. The necessary amendments are set out in new clauses 29A and 31A.
The proposed amendments would also address anti-competitive concerns. Removing the ability of all operators to impose conditions on each other would allow utility operators to compete without a risk of disadvantageous conditions being imposed by their competitors.
The Electricity Act and the Gas Act apply a “causer pays” principle when utilities’ assets are required to be moved. This means the causer of the work pays the whole cost. However, these Acts also provide for utility operators to share the cost when a “controlling authority” causes the work.
Submitters raised concerns with us about the definition of a “controlling authority” and whether this term refers to the New Zealand Transport Agency or local authorities. We recommend amending section 33(4) of the Electricity Act, section 34(4) of the Gas Act, and proposed new section 147B (being inserted by clause 28 of the bill) of the Telecommunications Act, to make it clear that a “controlling authority” applies only to the agent of the Minister of Transport or the New Zealand Transport Agency.
In proposed new section 147B of the Telecommunications Act (inserted by clause 28), the utility is required to pay for the “fittings” used in carrying out the required work while the controlling authority pays for the actual work done. The term “fittings” in this sense is a defined term in the Electricity Act and the Gas Act, but not in the Telecommunications Act. We therefore recommend replacing the word “fittings” in proposed new section 147B of the Telecommunications Act with “lines, cabinets, other appliances, and associated equipment”. This phrase reflects the meanings of “fittings” as it is used in the other Acts.
Section 52 of the Government Roading Powers Act 1989 states that a utility needs consent from a road controlling authority, including a local authority, before it enters the road. This section is inconsistent with provisions of the Electricity Act, the Gas Act, and the Telecommunications Act regarding access to roads. We recommend amending section 52 of the Government Roading Powers Act in clause 35(2), so that this section does not override the relevant provisions in the Electricity Act, the Gas Act, or the Telecommunications Act that relate to works or maintenance on, under, or over a road.
The bill provides for “licensed access providers” to publish criteria for access on a publicly available website. There are 80 such providers, ranging from small voluntary organisations to industrial rail operators and the New Zealand Railways Corporation. We recommend amending section 75 of the Railways Act 2005 in clause 38(2) to limit this requirement to the New Zealand Railways Corporation and any other licensed access provider that the Minister declares by notice in the Gazette to be subject to it. This would avoid requiring rail operators who were unlikely to be providing utility access to their tracks from having to publish criteria for access on a publicly available website.
We sought the advice of the Regulations Review Committee on the provision in the bill for an approved industry-led code of practice to become a deemed regulation.
As a result of advice received we adopted two recommendations for amendments to the bill. The first is to amend clause 10 to require that where a Code of practice refers to standards, guidelines, or other external documents it must say how this material may be accessed and refer to the specific edition.
The second recommendation is an amendment to clause 6(3) to make it clear that an agreement not to comply with the Code does not affect corridor managers’ or utility operators’ obligations under any enactment, or under any standard with which they are obliged to comply.
Labour members oppose the repeal of the Affordable Housing: Enabling Territorial Authorities Act.
Labour members believe housing affordability is a major issue in New Zealand, with close to one in three New Zealanders now spending 30 percent or more of their disposable income on housing, with 30 percent being the internationally agreed benchmark for housing affordability.
If the Government believes the current Act is not working then Labour and Green members believe it should be referred to a select committee where possible amendments could be considered. We believe that this decision to repeal the Act without such consideration is a wasted opportunity, and further limits the tools available to address housing affordability in New Zealand.
We also believe that the repeal of this Act should not have been hidden away in the Infrastructure Bill, and should have been referred to either the Social Services or the Local Government and Environment Committees.
We support the retention of clauses prohibiting restrictive covenants that aim to exclude social housing; however we are disappointed that the Government has decided to water down these provisions and to remove the prohibition of restrictive covenants that aim to exclude affordable housing. The decision to make the provisions only apply if such discrimination is a “principle purpose” of the covenant creates a huge loophole. We support the wording in the existing law which says that “A covenant over land is void if one of its purposes is to stop the provision of affordable housing or social housing on the land.”
We hope it will be possible in the third reading to vote separately on Part 4 from the rest of the bill.
The Infrastructure Bill was referred to us on 25 August 2009. The closing date for submissions was 18 September 2009. We received and considered 37 submissions from interested groups and individuals. We heard 14 submissions.
We received advice from The Treasury, the Ministry of Economic Development, the Ministry of Transport, and the Housing New Zealand Corporation. The Regulations Review Committee reported to us on the powers contained in clause 6(3) and clause 18(4).
David Bennett (Chairperson)
Dr Jackie Blue
Carol Beaumont
Darien Fenton
Jeanette Fitzsimons
Hon Tau Henare
Moana Mackey
Allan Peachey
Michael Woodhouse