Last week the Government announced decisions on next steps in the reform pathway, including the establishment of three working groups to partner to refine outstanding elements of the reforms.

In this update we provide more information about these new working groups and the approach the Department is taking to establishing them. There is also further information on how to make a submission on the economic regulatory and consumer protection regime that is now open.

We understand that there is also interest in hearing more details of the transition process. This will be covered in a future update.

These groups are designed to respond to areas where significant feedback received through engagement on the reform proposals. The working groups will complement the work of the Joint Central-Local Government Steering Committee.

A report summarising council feedback on the reform proposals can be found here.  A summary of feedback from iwi and Māori engagement and an overview of all engagements held between June and September is included in the appendices to the Cabinet Paper on the Three Waters Reform Programme website.

Working group on representation, governance and accountability of new water services entities

Establishment of the group responds to the significant feedback received from the sector on the proposed representation, governance and accountability arrangements for the new water services entities. This feedback included concerns regarding:

·         The number of ‘layers’ in the governance structures, which were seen as confusing and bureaucratic

·         The size of the Representative Governance Group, and difficulties this presents for achieving adequate council and mana whenua representation

·         The lack of direct influence over the appointment and removal of entity board members, including whether the Independent Selection Panel is needed

·         Lack of assurance around how small communities’ interests will be prioritised

·         Concerns about a lack of accountability from the entities to democratically elected representatives.

The purpose of the Working Group is to take a fresh look at the proposals, with a view to developing recommendations on a strengthened set of representation, governance and accountability arrangements for the entities, within the bottom lines of good governance, Treaty partnership, safeguarding public ownership, and achieving operational and financial autonomy for the entities.

Membership of the Group will comprise an independent Chair, local government elected members and iwi/Māori representatives. The Department expects further details, including the Terms of Reference and membership of the Group, to be announced shortly.

Planning Technical Advisory Group

The reform’s objectives include a lifting the environmental performance of three waters services and enabling urban development and housing. To achieve those objectives, the new water services entities will be required to be active participants in local government-led planning processes, as well meeting any environmental regulatory requirements.

The reform of the resource management systems creates an opportunity to embed integrated planning approaches, in particular the delivery of three waters infrastructure to support urban development and environmental objectives. However, the concurrent nature of the resource management and three waters service delivery reforms does create some practical challenges around the alignment and timeframes of the policy and legislative processes.

This means that the Water Services Entity (Implementation) Bill (see timeline below) will need to consider how the new water service entities will interface with the Resource Management Act 1991 and the Local Government Act concurrently, with wider policy processes to consider how the new entities will interface with the future resource management system.

To support this work, the Government is establishing a technical advisory group to provide advice on the interface with the resource management system and local government planning to ensure the water service entities, councils and other infrastructure providers can work effectively together. This advisory group is expected to have a technical focus and include local authority elected members and officers and iwi representatives with experience in land use and infrastructure planning. This group will be supported by officials from the Department of Internal Affairs and the Ministry for the Environment.

Rural  Supplies Technical Advisory Group

The Department of Internal Affairs and Taumata Arowai have set up a project team to build on existing work focused on ensuring that there is a clear pathway and support for the transition of small, rural suppliers into regulatory system. The intention is that this  project team will support a Rural Supplies Technical Advisory Group, that will be convened to provide insights and practical and pragmatic advice into the key challenges, and issues for rural and non-councils suppliers, including informing the approach to regulation, considering which rural schemes transfer to water service entities, potential governance and management structures and arrangements, and the  future roles and functions of water service entities to support rural communities served by these non-council owned and community suppliers.

The Department and Taumata Arowai are currently working together to identify potential membership of the rural technical advisory group, which is likely to include elected members and officials from rural councils, iwi, Federated Farmers and other rural representative groups. We expect to be able to confirm the scope and Terms of Reference of the group shortly, with the Steering Committee. The intention is for the first meeting of this group to be held before the end of the year.

The Ministry of Business, Innovation and Employment has issued a discussion document seeking feedback on the economic regulation and consumer protection frameworks, including:

·         which suppliers economic regulation should apply to;

·         what form of economic regulation should apply;

·         what additional consumer protections are needed for the three waters sector; and

·          who the economic and consumer protection regulators should be.

Councils, iwi and members of the public can have their say on this issues by sending a submission to MBIE by 20 December 2021.

We would like to thank you for your time and engagement with us so far on this work and look forward to continuing to work together as the reforms progress.

Below is a timeline of key steps in the reform pathway.

Ngā mihi,
The Three Waters Team
Te Tari Taiwhenua | Department of Internal Affairs