General policy statement
This Bill is an omnibus Bill that will repeal Part 2A of the Health Act 1956 and replace it with a stand-alone Act to regulate drinking water. There are also amendments to the Local Government Act 2002 and amendments to other Acts, including a discrete amendment to the Resource Management Act 1991. The Bill is introduced under Standing Order 263(a) because the amendments deal with an interrelated topic that can be regarded as implementing a single broad policy. That single broad policy is to implement the Government’s decision to comprehensively reform the drinking water regulatory system, with targeted reforms to improve the regulation and performance of wastewater and stormwater networks.
Introduction
New Zealand’s drinking water regulatory system presents a number of challenges. There is a lack of compliance and enforcement activity, and significant variability in the size and capability of suppliers, with little support to assist them to comply with regulatory requirements. There has been a lack of Māori input within decision-making frameworks. As a result, the current drinking water regulatory system is failing to provide necessary assurances that drinking water supplies across New Zealand are safe and reliable.
To address these regulatory issues, the Bill is part of a broader package of reforms that includes—
establishment of a Crown agent, Taumata Arowai–the Water Services Regulator (Taumata Arowai), which will be responsible for administering the regulatory regime in the Bill; and
reform of the National Environmental Standard for Sources of Human Drinking Water (which is a regulation made under the Resource Management Act 1991).
These measures comprise a significant part of the Government’s response to the report of the Havelock North Drinking Water Inquiry. They provide the regulatory framework to implement the 6 fundamental principles of drinking water safety articulated by the Inquiry. These principles are—
a high standard of care must be embraced in relation to drinking water:
protection of source water is of paramount importance:
multiple barriers against contamination of drinking water must be maintained:
change precedes contamination of drinking water, and must never be ignored:
suppliers must own the safety of drinking water:
a preventive risk management approach must be applied in relation to drinking water.
Duties, obligations, and functions under Bill
Drinking water suppliers
The Bill imposes duties on drinking water suppliers. Those duties will apply to all drinking water suppliers, other than domestic self-suppliers, and include duties to—
provide safe drinking water and meet drinking water standards, along with clear obligations to act when drinking water is not safe or fails to meet standards:
ensure that there is a sufficient quantity of drinking water to support the ordinary needs of consumers, with clear obligations to act where supply is interrupted or restricted for any reason:
register drinking water supplies with Taumata Arowai, and keep essential details relating to supplies updated each year:
have a drinking water safety plan that contains a multi-barrier approach to drinking water safety:
notify Taumata Arowai and take action where there are risks to public health arising from drinking water, breaches of drinking water standards, or other significant risk events.
The Bill also imposes a duty on officers, employees, and agents of drinking water suppliers to exercise professional due diligence. This duty is based on similar requirements in the Health and Safety at Work Act 2015.
Source water risk management
The Bill proposes new arrangements relating to sources of drinking water—that is, the freshwater bodies from which water is abstracted before treatment. These new arrangements are based on a preventive risk management approach, alongside open flows of information between local authorities, drinking water suppliers, and Taumata Arowai. Key measures for this approach include—
drinking water suppliers must have a source water risk management plan, which identifies the risks to a source of drinking water and manages, controls, or eliminates those risks as part of a drinking water safety plan:
local authorities must contribute to source water risk management plans by sharing information about risks and undertaking actions to address them on behalf of a drinking water supplier:
drinking water suppliers must monitor source water quality, and regional councils must assess the effectiveness of regulatory and non-regulatory interventions relating to source water every 3 years:
a new provision in the Resource Management Act 1991 to require consent authorities to have regard to risks, or potential risks, to source water when considering applications for resource consents.
Approach based on scale, complexity, and risk profile
The Bill provides mechanisms that enable many aspects of drinking water regulation to be proportionate to the scale, complexity, and risk profile of a supply, from large, capable suppliers through to small suppliers such as marae or rural suppliers.
Drinking water safety plans, source water risk management plans, and consumer complaints processes must be proportionate to the scale, risk, and complexity of a supply.
The Bill also provides a toolkit to Taumata Arowai to enable it to support suppliers in fulfilling their obligations, including templates, models, and acceptable solutions and verification methods for drinking water that are based on, and designed to be a good regulatory fit with, Building Act 2004 requirements.
Exemptions
The Bill contains 2 significant exemption powers. Both powers are vested with the chief executive of Taumata Arowai to ensure that they are exercised independently as follows:
a general exemption power allows the chief executive of Taumata Arowai to exempt a supply or class of supply from many of the key regulatory requirements in the Bill; and
a residual disinfection exemption power allows the chief executive of Taumata Arowai to exempt a supply from the requirement to treat a reticulated supply with residual disinfection (such as chlorination). This will allow a supplier to adopt arrangements or use treatment methods other than chlorination to make drinking water safe.
There are safeguards built into the exemption powers, including—
for a residual disinfection exemption, if the chief executive requires it, the supplier must first demonstrate to the satisfaction of the chief executive that the drinking water will comply with legislative requirements and the drinking water safety plan on an ongoing basis. This is in line with recommendations made by the Havelock North Drinking Water Inquiry; and
provision for both exemptions to be subject to terms and conditions and a maximum 5-year limit after which renewal is required.
Drinking water emergencies
The Bill contains powers enabling Taumata Arowai to declare and manage drinking water emergencies such as major infrastructure damage, contamination events, or droughts. Taumata Arowai must consult its responsible Minister before declaring a drinking water emergency.
Te Mana o te Wai
The Bill requires all persons who perform or exercise functions, powers, and duties under the legislation to give effect to Te Mana o te Wai. This parallels requirements imposed on local authorities under the National Policy Statement for Freshwater Management, and on Taumata Arowai under the Taumata Arowai–the Water Services Regulator Bill.
As part of its governance arrangements, Taumata Arowai will have a Māori Advisory Group that is charged with advising on Māori interests and knowledge as they relate to the objectives, functions, and principles of Taumata Arowai. This includes—
developing and maintaining a framework that provides advice and guidance on how to interpret and give effect to Te Mana o te Wai:
providing advice on how to enable mātauranga Māori, tikanga Māori, and kaitiakitanga to be exercised.
Authorisations, occupational regulation, and laboratory accreditation
The Bill contains a framework to enable authorisations and occupational regulation of drinking water suppliers. This area is new in legislation and is designed to improve the professional capability of drinking water suppliers. The Water Services Bill contains detailed regulation-making powers supporting the authorisations framework so that—
some organisations will need to be authorised to operate a drinking water supply under competency requirements, such as having systems and processes or employees that meet professional skill or qualification requirements. All territorial authorities and council-controlled organisations will be required to become authorised, or have their drinking water services delivered by an authorised supplier, within 5 years of the commencement of the Bill:
some individuals who operate drinking water supplies, who test, assess, or certify supplies, or who sample drinking water will be required to meet minimum skills, qualification, or experience requirements.
The Bill also includes an accreditation regime for laboratories that test source water, raw water, and drinking water.
Reporting, compliance, and enforcement
The Bill contains a broad toolkit for compliance and enforcement. Along with powers adopted from the existing regime in Part 2A of the Health Act 1956, additional powers have been developed to ensure that there can be a graduated response to non-compliance. These powers are vested in the chief executive of Taumata Arowai and its compliance officers to ensure that they are exercised independently, and include—
powers for compliance officers to direct suppliers, with the chief executive able to issue compliance orders where non-compliance is persistent or serious:
search and information-gathering powers for compliance officers to obtain documents, test water samples, deal with serious risks to public health, enter premises without a search warrant to inspect drinking water infrastructure if an officer reasonably believes there is a serious risk to public health, and obtain a search warrant to investigate non-compliance:
new powers that enable the chief executive to enter into an enforceable undertaking with a drinking water supplier as an alternative to issuing a compliance order or seeking prosecution:
new statutory intervention powers that enable the chief executive to appoint an operator of a drinking water supply in cases of serious or persistent non-compliance:
new infringement offences that are available for minor non-compliance:
reformed offences to better direct the provisions at behaviours that need to be regulated. These include significant new offences where a supplier exposes consumers to a serious risk of death, illness, or injury through negligent or reckless conduct. Alongside this, the penalty levels have been increased so they are commensurate with comparable regimes:
additional sentencing options for the court, including tailored sentencing criteria and supervision and training orders.
The Bill requires Taumata Arowai to publish a compliance, monitoring, and enforcement strategy so it can take a graduated approach to regulation, reflecting the time it will take for suppliers to reach full compliance. The strategy will provide transparency about how Taumata Arowai intends to target its compliance, monitoring, and enforcement activities and support drinking water suppliers of different types, sizes, and abilities. The strategy must be reviewed at least every 3 years.
Consumer complaints
The Bill contains a consumer complaints framework. This is designed to ensure that consumer concerns about drinking water are properly investigated by suppliers, with action taken where necessary.
If a consumer is not satisfied that their complaint has been properly dealt with, they will be able to seek review of a decision by Taumata Arowai. The detail of the consumer complaints framework will be set out in regulations.
Defence and liability arrangements
The Bill contains strict liability offences (criminal offences where there is no requirement to prove that a person intended to commit the offence). For these offences, there is a defence available where a defendant proves that the commission of the offence was due to the act or omission of another person, an accident, or some other cause outside the defendant’s control, and the defendant took all reasonable precautions and exercised due diligence to avoid the commission of the offence.
Provisions clarify that body corporates or unincorporated bodies are liable for actions of officers, employees, or agents. There are also the following exemptions from criminal liability:
officers, employees, and agents of drinking water suppliers are liable for failing to meet the duty of due diligence imposed on them, but are otherwise not liable for offences relating to drinking water suppliers:
volunteers are not liable for negligence in the supply of unsafe drinking water or negligence in failure to take immediate action when drinking water is unsafe, for failure to provide a sufficient quantity of drinking water, for failure to advise consumers about, provide and report on complaint processes, or for failure to comply with the duty of due diligence:
elected local body office holders and boards of trustees are not liable for offences under the Bill.
Wastewater and stormwater
The Bill contains new national-level reporting, monitoring, and advisory functions for wastewater and stormwater, empowering Taumata Arowai to—
compile information about wastewater and stormwater networks in a national public database:
set environmental performance measures, which wastewater and stormwater operators will have to report against annually:
publish an annual report on the environmental performance of wastewater and stormwater networks and their compliance with applicable regulatory requirements (such as resource consents):
identify and promote national good practice for the design and management of wastewater and stormwater networks.
Relationship to Local Government Act 2002
The Bill contains new responsibilities for territorial authorities to ensure that their communities continue to have access to drinking water, understand the risks to ongoing access, and plan to ensure that services continue to be available. The Bill also places new responsibilities on territorial authorities when supplies fail or are at risk of failing. These provisions recognise the role that territorial authorities play in providing drinking water to their communities, and are contained in an amendment to the Local Government Act 2002 that will—
require territorial authorities to assess every 3 years the access that communities in their district have to drinking water services, and consider its implications for local government planning requirements:
require territorial authorities to work with a supplier, consumers of a supply, and Taumata Arowai to find a solution if drinking water services fail, or are at risk of failing, and ensure that consumers continue to have access to drinking water services—whether provided by the territorial authority itself, or by another supplier.
Transitional arrangements
Transitional arrangements in the Bill are that—
all supplies registered under the existing drinking water register will be transferred to the new drinking water register. Suppliers will have 12 months following commencement to register if they own an unregistered supply, or to supply details to comply with new registration requirements:
drinking water safety plans approved under the Health Act 1956 will continue in force. Drinking water supplies serving 500 or more consumers for at least 60 days per year will have 12 months following commencement to have a drinking water safety plan that complies with new requirements, and all other supplies will have 5 years following commencement:
all territorial authorities will be required to become authorised, or have their drinking water services delivered by an authorised supplier, within 5 years of commencement:
the first compliance monitoring and enforcement strategy must be made within 12 months of commencement.
The Government does not intend provisions relating to wastewater and stormwater to commence until 2 years following Royal assent, to allow Taumata Arowai to prioritise drinking water regulation.