Local Government (Water Services) Bill

Good morning, members. The committee is resumed on the Local Government (Water Services) Bill. When we were considering the bill last night, we were on Part 5. This is the debate on clauses 215 to 343, “Amendments to other legislation”, and Schedules 5 to 11. The question is, again, that Part 5 stand part.

As at 9.55 p.m. yesterday evening, the Minister of Local Government dropped another amendment on the table. We thought at the time, “Well, that’s pretty unusual, having a tabled amendment dropped”—not exactly at the 11th hour; it was the 10th hour by then I suppose; we might call it that, who knows? And so we thought, “Well, what is going to be in this tabled amendment?”—we’d gotten word that it was going to happen.

We now have it in front of us. The “Hon Simon Watts, in Committee, to move the following amendments:” clause 273(3A)—in clause 273(3A), new subclause (2EA), replace 2EA, page 242, with (2EAAA); and in clause 347(3), to delete clause 347(3) on page 283. So not a particularly exciting amendment, but given that it was dropped at the very last minute, I wonder if the Minister in the chair, the Hon Scott Simpson, could explain why we needed to have this particular tabled amendment dropped on the table at 9.55 p.m. as we were debating this bill. It seems quite an extraordinary thing to do at this stage of proceedings.

Well, far be it from me, Mr Chair, to cast doubt upon the role of the Minister to put the amendment in at that hour, but clarity and certainty is important and that’s what this amendment seeks to achieve, and I’m sure the member will understand the necessity for those matters.

Thank you, Mr Chair, and I thank the Minister for his brief clarity in that regard. What I find really interesting is, at a moment when the only contributions Government members were seeking as part of committee stage were closures, they were seeking closures at the same time as this Amendment Paper was basically landing on the Table. So that’s a new one for transparency as part of process, isn’t it? That’s a new one for transparency as part of process: to land an Amendment Paper that has been tabled at 5 minutes to 10—and I think, actually, the committee of the whole House rose at about 4 minutes to 10, or thereabouts.

Cameron Brewer: Back to the bill!

TANGI UTIKERE: Well, this is about the bill because it means, actually, that we didn’t know what this was about at potentially the same time that we would have been voting on something that was actually not there. So that is certainly a new one for transparency. But I do thank the Minister for providing that clarity there.

Now, there is, however, an Amendment Paper in my name that was lodged back in July, and what that does is it provides an opportunity to amend Schedule 5, and so we are looking at Schedule 5 as part of Part 5 of the bill. So my question to the Minister is, well, firstly, whether he intends to throw his support behind my Amendment Paper. For the benefit of the committee, this basically seeks to initiate some date changes. It is one date change, but it does, none the less, relate through the remainder the schedule. It’s specifically related to clause 29 when it comes to the new Part 6, which would be inserted into Schedule 1AA of the Commerce Act 1986. The rationale for promoting this change, basically replacing the date 1 July 2026 with 1 July 2027 is to effectively give councils more time. What we are seeing, clearly, is a huge number of entities that have been identified in these water services delivery plans that are expected to be with the Minister in the first week of September, and it’s not that far away. The numbers of individual entities far surpass the expectations of the Government, which is really causing them a bit of grief. So I’m happy to help them out and just give them a little bit more time to perhaps delay the implementation of this so that they can just think things through a little bit.

So, my question to the Minister is: Amendment Paper 342, which seeks to amend Schedule 5, effectively delaying the implementation of this because, clearly, what has been proposed by the Government is not working; it is making things worse, and that’s before it’s actually even gotten under way—so, Minister, please indulge us in terms of your support for the Amendment Paper.

The short answer to the member’s question is no. And the irony of that member, a member of his party, trying to talk about transparency on this day of all days is not lost on the committee of the whole House.

Thank you, Mr Chair. I would like to look specifically on page 247, and this is clause 269. This is about the proposed waste-water and stormwater environmental performance standards. Now, this was an area that we started to touch on just at the very end of last night. In fact, I was in the middle of talking about this when the House had to rise, so I would really like to return here because I was only part-way through my questions for the Minister. And just a point of order on that, Mr Chair: are there questions already noted from last night from that aspect or do I need to revisit any of those to make sure they are answered this morning?

CHAIRPERSON (Greg O’Connor): You’d probably be safer. The Chair will ensure you get the time to revisit. Given that there is actually a new Minister in the chair, it would probably be the best way to go.

LAN PHAM: OK. Excellent. Thank you so much for clarifying that. So the first aspect that I’m really keen to hear from the Minister about is on new section 58JA(2), inserted by clause 269. Really this is about these set standards that are actually proposed outside of this legislation but which are given effect to in Part 5, Subpart 7. The setting of these standards is such that my understanding—I’d like clarity from the Minister on whether they are respective or irrespective on the current state of the receiving environment.

Now, the justification with these standards is that they are in some way tailored in that there are different categories, essentially, of receiving environments, whether that be high-flow areas, so more like in our oceans or rivers, or low-mixing environments like estuaries and perhaps lower-flow rivers. It’s been unclear in our deliberations on this as part of the select committee process how much impact the current state of the receiving environment actually has on those standards, and so I’m really keen on hearing about that.

What I’m proposing as part of my tabled amendment is actually to have this subsection apply only where the rule is less stringent than the waste-water environmental performance standard or the stormwater environmental performance standard. That would basically have the effect of having those standards—proposed and given effect to by this legislation—only prevail where the rule is actually less stringent than the standards.

The example that I gave with addressing that came from Environment Canterbury when they talked in their submission about the Christchurch waste-water discharge for the city and how these standards basically take many, many times greater than what is currently permitted. We heard concern about this not just from Environment Canterbury but across local government, and concern about the water quality of the receiving environments, be that the rivers or the beaches.

Now, the other aspect that I’m really interested in with these waste-water and stormwater standards is we heard from officials during the select committee process that they were based on international best practice. I would really like to hear what some examples are of those standards and how those situations or environments actually relate to New Zealand’s circumstances. We know the ecology of different environments is absolutely critical to whether these are actually having a serious adverse environmental effect or a lesser one, and so I’m really interested in hearing about that.

The other aspect that I would like to get direction on from the Minister is further in this section—new section 58JA(3), inserted by clause 269. It talks about where there is any conflict or duplication between a waste-water environmental performance standard or a stormwater environmental performance standard, and the documents are listed in new section 58JA(4). Basically, the waste-water and stormwater standards would prevail.

Now, the documents listed in new section 58JA(4) are really meaty, serious documents. These are national policy statements, New Zealand coastal policy statements, and national environmental standards, and then we’ve got our regional policy statements, regional plans, and district plans. These documents are really the heart of environmental protections when it comes to a local level, so I’m interested in what the justification is from the Minister to actually override these democratic processes that have been undertaken by communities with councils to set rules, standards, and limits, and then these proposed waste-water and stormwater standards are coming in over the top of that.

I would like to hear whether the Minister would consider simply replacing the words “the environmental performance standard prevails.” with “a document listed in subsection (4) prevails.” All this would mean is that where these standards have been made more stringent than the ones currently proposed, they can remain.

This is particularly important because we know that we’ve got about 60 percent of our waste-water consents for our waste-water treatment plants coming up for renewal in the next decade and 20 percent of those are already operating on expired consents, so these new water service entities are going to be making absolutely critical investment decisions about what level of treatment they’ll be putting in place. It would be fantastic if within that decision making they could actually uphold where the community will has got to with their regional plans, with their district plans, and even things like the New Zealand coastal policy statement and national environmental standards, which we know contain really serious bottom lines that would help keep our communities and our environment safer than if we were just making these standards much more lax, which we’ve heard again from councils is the effect of these changes. Thank you.

The member makes cogent observations about the historic inconsistency of environmental water standards across regions. Now, some of the matters that she raises relate to inconsistency—different standards, different rules and regulations in different regions—and so, the current receiving environment suffers from that inconsistent approach that has occurred over time, over years. Many of the consents, for instance, are expired and they include some unconsented waste-water discharges, as well.

The proposed new standards in clause 269 will help fix that problem by prioritising clear requirements. That’s pivotal and fundamental to this new proposed legislation. So, yes, standards do vary from region to region in terms of the receiving environments. The consenting authority cannot impose requirements more or less stringent than the standards, but the consent authorities will still have to consider the impact on the receiving environment as part of the usual resource consent decision making.

I would just make the point in relation to the issues that the member raises, that it’s been widely recognised across the House and by this committee that the current Resource Management Act (RMA) system is not leading to good freshwater outcomes. I think there’s general acknowledgment and understanding of that. I’m told 20 percent of existing water treatment plants are currently operating on expired resource consents; the longest has been expired for 24 years.

There is some historic tidying up that needs to be achieved and I am confident and very optimistic that the passage of this legislation will aid and assist that in a way that hasn’t previously been the case. It has been the cause of significant frustration not only to citizens but to the regulatory councils; also, in terms of the quality of water in various regions, from receiving environments.

Thank you, Mr Chair. I raised similar points but not in as much detail as my colleague Lan Pham last night. The Minister of Local Government gave me a short answer, but it didn’t address my question and it’s still relevant. I thank the Minister of Commerce and Consumer Affairs, who is in the chair now, for answering some of those questions about some of the problems with the Resource Management Act (RMA), which of course the last Government repealed and replaced with legislation that this Government has, in turn, repealed.

The Minister’s talked about an inconsistent approach to water standards, and I’m in no disagreement there. But what I’m interested in is that these standards are imported from different legislation into the RMA—into the Resource Management Act. That is what this part of Part 5 is doing: it’s importing something from waste-water legislation into the Resource Management Act.

My question last night, that still hasn’t been answered, was: what tests do those standards go through before they become standards that are then imported into the Resource Management Act; and are those tests subject to the considerations that the Resource Management Act is in terms of Part 2 of that Act and sustainable management, which is in the purpose of section 5 of the Resource Management Act? That question remains unanswered.

We heard in the last contribution some concern that some of these standards are being created at an international level. How do we know that these international standards will be appropriate for New Zealand - specific ecology? That has not been answered—when the Minister talks about an inconsistent approach of the RMA, that’s across regions but not across different countries.

So what comfort can he give us that these standards will be as rigorous as they would have been if they had been made under the Resource Management Act, noting that he says, “Well, some of these waste-water treatment plants have been unconsented for over 20 years.”, which is, of course, egregious. But if they were consented under the Resource Management Act, then they would be subject to those Part 2 requirements and sustainable management. Where does sustainable management fit with these standards that this Local Government (Water Services) Bill is importing into the Resource Management Act in Part 5, in the bowels of the bill? If he could answer that, that would be greatly appreciated.

Thank you, Mr Chair. I want to jump ahead in the bill—still in Part 5. This is later in the bill, at page 286 and section 328. Why I’m jumping here is because I’d like clarification, first, from the Minister’s response about the receiving environment, and I’m just checking if I heard the Minister correctly, saying that there actually is some form of regional variation that is put into these standards. If so, how can that work, and what does that actually look like when you’re actually not going into the detail of specific, consent-by-consent levels, clearly? Is there literally a regional formula? How would that actually apply versus the actual different ecosystems and different environments that these discharges are actually going into? I’d like some clarity on that.

This clause that I’m picking up on, though, is really about a proposal to amend the bill to state that consent authorities would have discretion over the activities controlled by waste-water environmental performance standards—and the same could go, for the next section, to the stormwater environmental performance standards as well. Now, why I’m interested in this is because these sections preclude public notification of applications for resource consents when it comes to these waste-water or stormwater environmental performance standards and the activities that they would allow. If the Government is saying these are a set form of standards and that they will not give any regard to regional plans and district plans where local people have actually made the rules, surely it would warrant public notification so that local people actually get to input and have their say—and at least that could be an option rather than completely precluding public notification?

My proposed amendment, which I appreciate the Minister considering, is to replace—this is clause 328(2), inserting new section 138(2A)(c)(i) and (ii)—“is precluded from giving limited notification of an application for a resource consent” with “has discretion over whether to provide limited notification of an application for a resource consent or whether to provide public notification of an application for a resource consent”. Again, it’s simply giving the discretion as to whether they could do that. Particularly, this would allow not only the set standards which are being proposed to be put in place, but it would actually provide for some level of input from local people in response to the local environment. I’d really like to hear the Minister’s thoughts on that. Thank you.

Thank you, Mr Chair. Also, it’s good to see you, Mr Chair, back in the House as well.

Just following on from what the Minister responded with, which is around some of the amendments, and particularly the late amendment that we have mentioned that was dropped at 9.55 p.m. last night—and I think there was a part of that we’ll mention later on in Part 6. Just hearing the Minister’s response in terms of clarity and transparency, it is important, I think, on the basis of transparency, that the Minister consider what my colleague Lan Pham has proposed in her amendment in terms of the ability for the public to be notified of such changes.

My question to the Minister is: in an earlier clause, clause 218, “Subpart 2—Amendments to Commerce Act 1986”, and looking at clause 225, “New subpart 12 of Part 4 inserted”—I want to specifically ask the Minister around new section 57AB, “Order in Council declaring water services”. There are two questions that I have on this section. I think the first one is just a clarification of subsections 1(a) and (b). Is the Minister saying that on the recommendation of the Minister, the Governor-General will be declaring when essentially one or more water services—that it becomes that declaring one or more service that involves a water service, essentially when it’s established, or one or more service not being a stormwater service as in it no longer is but it was before? Because the way that I read this particular section is that it means that the Governor-General is able to just make declarations on both sides. I feel like it’s got this interesting conundrum here where a service is both a service or not a service, unless a Minister makes a declaration. So I just want to get clarification that (a) it involves when something becomes a service, and (b) it involves a service that is an existing service no longer being a service. So that’s my first question for the Minister, in terms of clarification.

I guess the second part is in terms of the recommendation of the Minister and subsection (2), “the Minister must be satisfied that (a) the Commission has made the recommendation”, which on the surface looks reasonable, but in the context of the fact that this sits under the Commerce Act, can I just check if what we’re saying here is that the declaration of what is a water service and what isn’t a water service is on the recommendation of the relevant Minister of the Commerce Act, which is the Minister himself, the Minister of Commerce and Consumer Affairs, and the commission is the Commerce Commission in that case? So is what we’re seeing here that the secondary legislation of determining or declaring a water service is not done under the local government but done by the commerce Minister and the Commerce Commission? That’s my second question, if the Minister wouldn’t mind clarifying.

So those are my two questions: the clarification on new section 57AB(1) and also, just in general for clarity, that the “Minister” and the “commission” here is the Minister of Commerce and Consumer Affairs and the Commerce Commission. Thank you.

Responding to the member’s question relating to the Minister of Commerce and Consumer Affairs, I can tell the member he can be assured of the diligence and proactive attention of the Minister in relation to that. I can give that personal assurance.

I want to just go back to the question that the Hon Rachel Brooking asked about the Resource Management Act (RMA) particularly, because the RMA has been the subject of enormous discussion and debate over decades in this Chamber and outside. So, look, the provisions of this piece of legislation are designed entirely to ensure that the statutory purpose of this legislation is adhered to. So the decisions were made in accordance with the statutory purpose and the empowering provisions in the Water Services Act.

I would just take the opportunity to remind the committee that the relevant purpose in providing for this piece of legislation is for the progressive improvement of quality of water services, and that is the nub of it, and usual RMA considerations will apply through the consenting process.

Lan Pham asked some questions that relate to different receiving environments, and the point I would make in response to her line of questioning is that there are seven kinds of receiving environmental processes provided for in discharge to water standards, and different regions will, as I mentioned earlier, differ from one to another. So those different receiving environments will need to be ultimately aligned. That’s part of the purpose of this legislation, but there are seven kinds of receiving environments provided for in legislation. I hope that assists the member in some way.

Thank you, Mr Chair. Keen to just do a quick call on the Minister of Commerce and Consumer Affairs’ answer there. He said that the provisions that are being imported into the Resource Management Act (RMA) must meet the purpose of this bill—I think is what he said—“this bill” being the Local Government (Water Services) Bill, being different from the Water Services Act 2021, which is where these performance standards come from. He then referred to the purpose of this bill—the Local Government (Water Services) Bill—being about the improvement of water services.

Now, the improvement of water services is quite different from the improvement of water quality from the receiving environment. If we’re thinking about water services, we think about a water treatment plant and we want that water treatment plant to be improved—and presumably that does include some of the discharge. But my concern here is that the discharge that comes from that water treatment plant might not have to be subject to the same controls as a discharge coming from a treatment plant that was controlled under the other provisions in the RMA, such as a national environmental standard—a national environmental standard that has to be made in accordance with Part 2 of the Resource Management Act, and that it is the Resource Management Act Part 2 that has this sustainable management purpose to it.

If the Minister could come back to me on that the purpose he was referring to—and I see his officials looking at him—was in the Local Government (Water Services) Bill and how that purpose then relates to the purpose of the RMA. Does he understand or agree, or does he disagree for some reason, with my point that improvement of water services is different from improvement of the water quality in the receiving environment? So in the coastal environment that a treatment plant is discharging—we’re talking about sewage here, right? We’re talking about sewage; the Minister was talking about sewage, so it might be going to a coastal environment, it might be going to land, it might be going into a river. What are the controls for that receiving environment—that river, that coastal environment? Are those controls based on sustainable management or being the purpose of the Resource Management Act, or are they based on improving water services?

It’s quite a simple question. Please give me some comfort that, in fact, because it’s coming under the Resource Management Act, it should definitely be going back to sustainable management as the purpose.

I move, That debate on this question now close.

Thank you, Mr Chair. Perhaps the Minister may want a bit of time to respond to my colleague the Hon Rachel Brooking’s question—a simple one. Look, I just want to touch on a couple of things that haven’t been referred to yet. This actually does relate to the amendments that are proposed to the Water Services Act. When we come to clause 307A, which seeks to amend section 32 of the Act—this is about compliance, monitoring plans, and the like from Taumata Arowai—and we look at subclause (6), there are four examples listed in relation to a drinking-water supplier. My question to the Minister is very simple: is there actually a requirement to list those; and why not just leave it as, actually, a drinking-water supplier? Because it’s referring to subsection (3), which is pretty clear, but maybe it’s simply a catch-all in whether that’s needed or not. I’ll leave that with the Minister.

The only other one I wanted to raise was clause 308C; this seeks to insert a new section 43A, and this is around management of risk when it comes to the additional provisions for water-service providers. In particular, in clause 43A, subclause (3), it does reference the use of contamination of water. Now, this is, obviously, something that is of particular concern and interest. Certainly, yes, the use of contaminated water, however that might be described, could be utilised in a way that is friendly to the receiving environment, but can the Minister provide some guarantees and assurances around what could be seen as the timely and effective public notification in terms of communication for this? What we have, as part of the former parts and elsewhere, are requirements around notification of notices, etc. This is about the public communication of warnings of circumstances where contamination or other sort of issues may arise.

Thank you, Mr Chair. I think that while the Minister in the chair, the Hon Scott Simpson, is getting some advice, I just want to touch on a few additional points here. The first one is clause 269 inserting new sections 58JA to 58JC. One of the things that I’m interested in—and again, just for the Minister’s sake and also clarity, the things that I’m looking for and have questions for the Minister on by and large refer to the new amendment that has been released post - select committee, which is an Amendment Paper from the Minister of Local Government, Amendment Paper 346.

In here, there’s a new section 58JAA that’s been introduced, in terms of a plan that may permit effects that waste water or stormwater environmental performance standards does not deal with. I just wanted to check with the Minister, in terms of the rationale for including that as part of the amendment around waste water and stormwater environmental performance standards, why that part wasn’t something that was considered previously, and what this additional section is intending to do.

We’re seeing the same thing here in a later section—in clause 273, section 104 amended—where new subsection (2DA) has been inserted, in terms of when you’re looking at waste water environmental performance standards and infrastructure design solutions as well. So, again, we’re seeing these reasonably substantial sections that have been introduced as part of Amendment Paper 346, but there’s no commentary to this Amendment Paper, so it’s really hard for us, not having any advice from the officials, to know what some of the intentions behind this are.

I just also want to remind the Minister—I appreciate the Minister’s response in terms of confirming my earlier question, that it is indeed the Minister for Commerce and Consumer Affairs for some of those. But if the Minister wouldn’t mind responding to my question around 57AB, inserted by clause 225, that I mentioned previously, around this interesting case of a Schrödinger declaration, where water service is both a water service and not a water service, potentially at the same time—so if the Minister wouldn’t mind responding to that.

So the question primarily is—again, just a reminder, Minister, in case I’m jumping through too many sections—clause 269, new section 58JAA, and clause 2731(a), new subsection (2DA).

Thank you, Mr Chair. I want to go back to the issue that the Hon Rachel Brooking raised, and I want to just restate the previous answer I gave, because I’m not sure that she quite grasped what I was on about.

The issue relates, really, to decisions that are made in accordance with the statutory purposes and empowering provisions in the Water Services Act. Now, a relevant purpose is providing for progressive improvement of quality of water services, and then usual Resource Management Act considerations will apply through the consent process. What’s important, in terms of the standards, is that those standards are focused on the impact on the receiving environment, and they’re designed to achieve consistency across waste-water services. We know that there is inconsistency at the moment, so the purpose is to provide some consistency—consistency that is good for the environment, and also design and provision for water service consistency as well. What we do know is that, across the country, controls will be similar, but they need to be consistent. That is an ongoing process. There isn’t going to be, sort of, a moment when it is all consistent from day one, but that is, for want of a better term, a journey of consistent improvement over time. I’m excited by that opportunity, because I think that the member will share with me our mutual concerns about the quality of the discharges being suitable for purpose and much better than they are in some parts of the country now.

Tangi Utikere asks a question about, “Why list some drinking water suppliers?” I think that was in particular reference to clause 307A. I’m advised that the provision limits application of information and related powers to limited categories of drinking-water suppliers to ensure any burden is proportionate to the risks and the costs. Again, it’s a balancing proportional test, which I think, under the circumstances, is appropriate.

Thank you, Mr Chair. Just an answer to the Minister’s answer to me—no, it’s not an answer; I’m not giving the answers, I’m asking a question. And that question is: the Minister there was clear in saying the purpose is the purpose of the Water Services Act— which is an Act already in place—and that purpose is to improve the quality of water services, and then there will be some resource management consenting issues as well.

But that doesn’t answer my question to the Minister, which is: is there anything, then, in the Water Services Act around what the quality of a water service is defined as, or in the provisions of the Act, which I don’t have in front of me, that relates to improving the environment, so improving the environmental quality—so the quality of the receiving environment, be it the river, the coastal environment, whatever it is? Is there any requirement to improve that quality, rather than the quality of the water service? Can the Minister understand the distinction that I’m making here between a water service and the receiving environment?

So it’s just that very small point: is there anything, in any of the requirements for these standards that will be imported into the Resource Management Act, that requires the receiving environment—the river or the coast—to be improved?

The member Rachel Brooking has asked the question three times now. I’ve given two answers and I’m not intending to give it a third time, but I think that the previous answers that I’ve given make it clear that there is a requirement for environmental improvement. That’s the whole purpose of not only this piece of legislation but a variety of other pieces of legislation.

I want to turn to the question specifically that the member Lawrence Xu-Nan asked, which was in relation to when a water service is and is not a water service—clause 57(2)(a) and (b). I’d simply respond by saying that it allows flexibility, given the developing nature of New Zealand’s water services. So, again, it’s part of the ongoing development of the water services regime.

I move, That debate on this question now close.

The question is that the Minister’s tabled amendment to Amendment Paper 346 amending clauses 273(3A) and 299(6) be agreed to.

The question is that the Minister’s amendments to Part 5 set out on Amendment Paper 346 as amended be agreed to.

I’ll just ask the Green Party member: in the previous vote, you cast 15. Should that have been 14?

Yes. If possible, I would like to correct the vote to say 14 votes opposed from the Green Party.

OK. We’ll correct that. Is leave given to correct that vote from the Green Party? Leave is given.

The question is that Lan Pham’s tabled amendment to clause 269, new section 58JA, to replace subsection (2) be agreed to.

The question is that Lan Pham’s tabled amendment to clause 269, new section 58JA(3), be agreed to.

The question is that Lan Pham’s tabled amendment to clause 328, new subsection (2A)(c) of section 138, be agreed to.