A council-iwi water reform working group recommends a local ownership structure which it says makes future privatisation virtually impossible

It sounded unlikely. Putting nine iwi leaders, nine mayors, a central-local government representative and an independent chair in a room one day a week for almost two months and expecting them to come to a consensus (yes, consensus) decision on one of the more controversial issues of the day – reform of drinking, waste and stormwater. 

But naysayers would have been wrong. Well almost.

With the exception of Auckland Mayor Phil Goff, who in an appendix to the report says ‘yes’ to the working group’s recommendations but ‘no’ to his city’s water body Watercare being part of them, the 20-strong group has come up with a set of proposals which, if accepted, would mean a pretty significant change to the Government’s original plan.

Consensus did not come easy, says working group chair Doug Martin.

“Our meetings have been pretty intense, intense in a constructive way, not destructive, and often they lasted for a full day.” 

Former Māori Party MP Tukoroirangi Morgan agrees. 

“The engagement between iwi representatives and mayors from around the country has been both robust and compelling and there’s been positive achievements arising from that collaboration.”

The most significant change from the original plan is that instead of ownership of water assets moving from our 78 councils to four new ‘water service entities’, the recommendation from the Working Group on Representation, Governance and Accountability of New Water Service Entities is for local councils and the regions to be allocated shares in whichever entity they belong to “more or less in proportion to their population”, Martin says.

For example, one suggestion is councils with up to 50,000 people will get one share, those with 50,000-100,000 people will get two shares, 100,000-150,000 three shares, and so on.

“How exactly that’ll work out will be in the detail, but those shares will be owned by the council,” Martin says.

Councillors wanting some say in how the assets are managed will be disappointed – the water entities will make all the decisions about investment. What locals will have is a veto on any sale of those assets.

“There was quite a bit of concern expressed [by detractors of the Government’s original plan] around the risks of privatisation of the infrastructure assets,” Martin says. “The shareholding structure provides an additional layer of protection by requiring unanimous agreement of the shareholding local authorities.”

That means every councillor, or potentially every ratepayer in a particular area, would have to agree before that district’s water asset share was sold.

The third strand of the recommendations is around local representation, including strengthening the role of the Regional Representative Groups in decision-making over investment in the networks, a 50:50 co-governance model with Te Ao Māori to improve service delivery and environmental protection, and the appointment of some sort of water ombudsman.

Whether this is enough to allay the fears of the many people against the original proposals remains to be seen. 

In the less than five months since the Government announced its plan to split the country into four water service entities, there have been High Court challenges, the formation of a 31-council water protest organisation called Communities for Local Democracy (C4LD) and anti-Three Waters reform campaigners joining the Groundswell tractor rallies around the country last July and the recent anti-vaccine mandate protest at Parliament.

C4LD chair Helen Worboys, Mayor of Manawatu, calls the recommendations “predictably disappointing” and says the working group was “hamstrung”.

“The Government well and truly stymied the working group members with the terms of reference, making any chance of real change impossible. This was an opportunity for genuine engagement with local councils and mana whenua, but the Government deliberately limited the scope of the group so it posed no threat to its bottom lines on three waters.

“Even the small movement on the ownership side falls short of what is needed,” Worboys says.

One positive sign the latest recommendations might be more acceptable than the originals for some at least is the united front presented by the nine mayors and the nine iwi Māori leaders.

Three of the mayors – for Kaipara, Christchurch and Masterton – are from councils which are part of Communities for Local Democracy, and another one, Garry Webber from the Western Bay of Plenty, faced a challenge to his leadership when he joined the working group.

The greater good

What is not in doubt, although sometimes gets hidden in the protest rhetoric, is something has to happen to make sure our drinking water is safe, to keep sewage from cascading onto our streets and into our harbours, and to replace pipes and water treatment infrastructure which has either reached or long passed its use-by date.

“We’ve had generational under-performance, generational non-compliance, and the status quo is just not going to get us there,” Webber says.

The water capital works bill could be up to $150 billion over the next 20-30 years, Webber says, and that will include massive spending just to meet existing environmental and water safety standards.

“The first question these boards will be asking when they are set up should be ‘Is everything we are doing compliant?’ and the answer unfortunately on day one will be ‘No’. A significant  number of resource consents throughout New Zealand are expired. Some of them expired many years ago.

“It’s a priority when you look at the health of the people, the health of the environment, the health of the water. These boards are going to have to invest for 15-20 years, starting with getting the bottom 5 percent up to standard, and keeping on working their way up until everything is compliant, until all our water infrastructure complies with the law.”

Bruce Robertson is a former assistant Auditor General, now working as a consultant. He says the issue of fairness is a difficult one – some councils have invested much more than others over the decades in their water infrastructure, yet it will be the poorest performers (the ones whose ratepayers forked out least in the past) that might get the most funding from the aggregated entities.

“If I’m putting in an asset of good quality, should I be penalised relative to my neighbour who isn’t?”

He says some form of financial compensation system might be possible, but in the end it could come down to accepting some unfairness for the “greater good” – getting our water assets up to scratch.

Next week’s National Performance Review, the latest Water New Zealand state-of-the-nation benchmark water infrastructure report, is unlikely to be edifying reading. Last year’s showed unmonitored sewage overflows, a fifth of water lost from leaks, wastewater treatment plants discharging contaminated water and big parts of the network where no one even knew what condition the pipes were in. (See Newsroom’s story “Our water problem in 15 worrying charts”).  

Water NZ chief executive Gillian Blythe says one of the most important things about the three waters reform, and particularly about the latest recommendations, is the consistency they aim to provide.

The working party’s report puts the concept of Te Mana o te Wai, the health and wellbeing of water, at the heart of all water reform, whether it be investment decisions or resource management legislation. And that’s crucial, Blythe says.

“Piecemeal regulation is not helpful, but Te Mana o te Wai provides the framework for a consistent and coherent regulatory environment. Not being told by one regulator you need to jump three foot and by another it’s two and a half foot.”

Doug Martin said the report could be considered by Local Government Minister Nanaia Mahuta as early as this month, including Phil Goff’s appendix calling on the Government to exclude Auckland from the reforms, leaving its water assets in the hand of Council Controlled Organisation Watercare. 

Mahuta didn’t comment on Goff’s appendix, but has been pretty resolute since deciding to make the increasingly unpopular reforms mandatory for councils. 

“Cabinet will carefully consider the recommendations before finalising reform plans and introducing legislation,” Mahuta says. “We know it is important to get this reform right.” 

Nikki Mandow was Newsroom's business editor and the 2021 Voyager Media Awards Business Journalist of the Year @NikkiMandow.

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