Speech for the WaterNZ conference

Introduction

• I want to thank the Water New Zealand board and staff for assembling such a comprehensive list of domestic and international three waters experts.
• I’d also like to acknowledge Water New Zealand President Kelvin Hill and Chief Executive John Pfahlert, not only for organising this event, but for your valuable input and advice throughout the year, as we’ve progressed critical three waters regulatory reforms.
• I want to take the opportunity this afternoon to update you on where we’re at with the Three Waters Review, and our thinking on where to next. I’ll also briefly touch on the links between this work, and the Government’s broader freshwater reform programme. 

Reform of three waters regulation

• In my address to last year’s Water New Zealand conference, I outlined the scale and complexities of the challenges facing our drinking water, wastewater and stormwater systems, and the clear case for change.
• I spoke about the serious system-wide issues identified by the Havelock North drinking water inquiry, and the need for decisive action in response to the inquiry’s recommendations.
• Failure to respond to these shortcomings is not an option. The risks of water supply failure are catastrophic – we simply can’t allow another Havelock North contamination to happen again.
• Nor should we accept a status quo where an estimated 34,000 people or more get sick from their drinking water every year.
• Fixing the current drinking water regulatory framework – a framework that’s been described as weak, fragmented and inadequate – has been our first priority.
• We’ve responded by announcing a comprehensive, system-wide overhaul of drinking water regulations. We’re also undertaking targeted reforms to improve the regulation and performance of wastewater and stormwater systems.
• I’m sure most of you will be familiar with the details, but to summarise, the new regulatory framework will:
  • establish a new, dedicated drinking water regulator;
  • extend regulatory coverage to all drinking water suppliers, except individual household self-suppliers;
  • provide a multi-barrier approach to drinking water treatment and safety;
  • strengthen government oversight and stewardship of wastewater and stormwater services; and
  • provide transitional arrangements of up to five years to allow water suppliers to adjust to the regulations. 
• These measures will progress us towards a three waters system that ensures public safety and reduces pollution, from the source to the tap and back again.

Proposed roles of the new water regulator

• This step-change in regulation will be led by the new drinking water regulator.
• Although detailed arrangements for the institutional form of the regulator are still to be confirmed, the organisation will have a range of responsibilities and functions necessary to oversee the new drinking water framework.
• Dependant on Cabinet decisions, this may include: 
  • sector leadership – overseeing and monitoring drinking water safety, promoting the importance of safe drinking water, ensuring co-ordination within the system, and ensuring the sector is meeting its obligations to Māori;
  • compliance, monitoring and enforcement – ensuring drinking water compliance in a manner that’s proportionate to provider capability, and safety risks to consumers;
  • capability building – promoting collaboration, education and training to ensure the sector has the knowledge, capability and cultural awareness to fulfil its functions;
  • information, advice and education – being a centre of technical and scientific expertise, able to provide sector-wide advice and guidance; facilitate research into drinking water science; and ensure the sector is kept informed of best practice; and
  • performance reporting – responsible for collating and publishing transparent drinking water compliance and monitoring information.
• Due to the strong synergies between drinking water, wastewater and stormwater, we’re also considering the feasibility of the regulator also undertaking some of the new functions for oversight of waste and stormwater within its role. However, regional councils will continue to be the lead regulator of wastewater and stormwater under the Resource Management Act.
• These arrangements will be the subject of further Cabinet consideration in the near future.
• Regardless of what the regulator’s final form and roles will be, we want to have the organisation up and running quickly, so we can start to see benefits from the improved regulatory system.
• All things going to plan, we’re hoping to introduce new legislation by the end of the year, to enable the regulator to “go live” later next year.

How the regulator might work with the sector and iwi/Māori

• The new regulator will need to develop extensive capabilities to undertake its role effectively. This includes the skills needed to be the public and frontline face of drinking water safety, and to become a centre of technical and scientific expertise.
• This won’t be easy. The regulator will need to work closely with the sector, and utilise existing knowledge and expertise where applicable. 
• It will need to work closely with councils and private suppliers to ensure they’re aware of their regulatory responsibilities, and know what to do and how to comply.
• It will also need to develop robust administrative systems to identify and formally register the country’s many water suppliers.
• In addition, I expect the regulator to work with and through sector organisations, and existing training and licensing bodies, to help suppliers build the capabilities to achieve compliance.
• The knowledge and expertise of organisations like Water New Zealand will be critical in this respect. I want to acknowledge your advocacy Kevin for Water NZ to play a significant leadership role in training and certification of skills in the transition phase.
• I expect there will be opportunities to partner with the new regulator in its sector leadership role, particularly in the areas of industry training and development, as well as data collection and utilisation.
• Acquiring expertise and building ongoing relationships with Māori will also be critical to the regulator’s success. This is a new and emerging area that will need to be enhanced.
• This approach will apply at a national level – in terms of supporting and enabling Te Mana o Te Wai and upholding Te Tiriti o Waitangi  
• It will also be important at a regional level, where the regulator will need to form local relationships and adapt to the unique kawa and mataraunga of mana whenua in different rohe.

A broader, longer-term strategy to improve the three waters system

• With the introduction of a strengthened regulatory framework – and bringing all suppliers into the system under the oversight of the regulator – we need to be mindful of the costs and challenges associated with achieving compliance.
• This was a concern heard frequently during our regional engagement earlier this year. 
• With a transitional timeframe of up to five years to fully implement and comply with the new requirements, our regulatory approach recognises that smaller suppliers are likely to need longer to comply with their obligations.
• However, there remain challenges in ensuring the country’s three waters system has the long-term capacity and capability to deliver wellbeing through Te Mana o Te Wai – the health of the water, the health of the people, and the health of the environment.
• This long-term challenge is best highlighted by our significant national water infrastructure deficit. Current estimates suggest it will cost around $500 million to upgrade our drinking water treatment plants to comply with current drinking water standards. Likewise, $3 to $4 billion may be required to upgrade our wastewater treatment systems over the coming years and potentially a similar figure for stormwater – and we haven’t even touched on resilience aspects related to floodwaters and Climate Change.
• It appears that these costs are absorbable in many parts of the country, particularly in our bigger cities where costs can be shared across many people. Many councils are already planning significant water infrastructure investments in this respect.
• The problem we face, though, is that some of our smaller councils and communities, and many non-council drinking water suppliers, such as marae, are not well-positioned to meet these costs. We will need leadership, collaboration and innovation to navigate our way towards achievable solutions for these communities.
• We need an approach that ensures all communities across Aotearoa benefit from safe, reliable, culturally acceptable three waters services in an affordable way.
• At the end of the year, I’ll be reporting back to Cabinet on ways our Government can assist councils, and community suppliers and operators, to deliver three waters services in a sustainable, cost-effective manner.
• I spoke last year about my trips to England, Scotland and Ireland, and how their experience with water reform might inform our own unique circumstances and communities. We’ve continued to draw insight from overseas jurisdictions, to further inform analysis of reform options in the New Zealand context.
• Back at home, my team of officials and I are having discussions with local government, iwi/Māori and water industry experts such as your organisation about how we might improve delivery of three waters services and funding arrangements.
• This may include thinking differently about how these services are structured and paid for, including options for sharing costs across regional communities, or a nationwide fund.
• We also need to consider ways to build the sector’s capacity and capability in terms of attracting and keeping quality professionals in the water industry. 
• I look forward to a robust debate and analysis of these matters over the rest of 2019 and beyond.

Support for voluntary initiatives

• While central government can assist at a national level, improving the way we deliver water services is a journey we must all be willing to make.
• It’s really encouraging to see councils in regions such as Hawke’s Bay, Canterbury, Waikato and the West Coast already discussing collaborative approaches to water delivery for their areas. 
• To help remove financial barriers and encourage further such initiatives, this Government has agreed to consider, on a case-by-case basis, proposals from regions for funding to support collaborative water service delivery efforts.
• For eligible funding applications, we will co-invest with local government up to 50 per cent of the costs associated with investigating collaborative approaches to water service delivery. 
• This might include, for example, financial support for a group of councils developing a business case for a dedicated, regional or cross-regional water approach, delivering efficiency and quality benefits to their communities.  
• I plan to announce further details about this funding initiative, including an applications process, in the near future.

Links to wider freshwater reforms and urban biodiversity

• The Three Waters Review is not being undertaken in isolation, but is proceeding in tandem with the Government’s wider Essential Freshwater programme, led by the Minister for the Environment.
• As you heard from Minister Parker this morning, this programme of reform is focused on ensuring an integrated and effective freshwater management system, with an emphasis on improving water quality and ecosystem health.
• There are clear overlaps between Essential Freshwater and the Three Waters Review. Freshwater outcomes, source protection, better monitoring, enforcement and compliance of discharges and overflow and best practise land use planning and stormwater design, wet land protection and restoration and urban stream protection are all aspects that enable an interconnected benefit to improve wellbeing outcomes.
• As Associate Minister for the Environment, I have a keen interest in improving water quality and biodiversity in urban environments.
• Declining water quality and the loss of urban streams and wetlands is having negative effects on aquatic ecosystems and biodiversity in urban areas.
• These issues are also impeding many communities and iwi from connecting with their local waterways, as many urban waterbodies have become unsafe for recreation and the gathering of kai.
• We’re looking at how we can encourage the uptake of good practices for urban water management in Aotearoa, particularly through the increased use of water sensitive urban design.
• I know the Urban Water Working Group is working hard to develop a suite of recommendations to promote the Urban Water Principles, and improve urban water management. These principles outline an ambitious vision for addressing degraded urban water.
• I’ve asked my officials to look hard at how these principles can inform the Government’s work.
• I also encourage you to consider how you can reflect the Urban Water Principles in the management of urban water and three waters infrastructure in your own work.

 Closing remarks

• This will feel like the longest conversation ‘Less hui more do-I’. But there are all sorts of political complexities and we need to get through these significant and complex issues in the best condition possible and by that I mean good and considered water reform for New Zealand and taking people with us. So that New Zealand can be a place where it prides itself on the quality of our drinking water and freshwater as well. So we can swim in our rivers. It’s necessarily a long conversation. If the reforms are done well by their scale and nature it is a legacy contribution to our children and grandchildren.