Current situation
Typical NZ household water use
Moves towards user-pays and privatisation
NZ legal and policy environment
Parliamentary discussions on water supply
NZ pro-metering lobby

Overview
Public Private Partnerships (PPPs)

25%    Bath / Shower
25%    Toilet
20%    Garden
20%    Laundry
10%    Kitchen

Transcript of Metrowater v Gladwin, CP655/98, 24 June 1999

New Zealand legal and policy environment


Local Government Act Amendment Bill
 
Local Government Act 2002
The Act states that local government must not divest itself of ownership of water services or sell off significant infrastructure related to water. However the Act actively facilitates the use of public-private partnerships (PPPs) by local councils through providing the legal framework that allows for long-term contracting (up to 15 year contracts) for management of the water service (see section 130 & 136). PPPs are the most common form of water privatisation in the world.

The Act also enables further commercialisation through Council Controlled Organisations and Council Controlled Trading Organisation, the latter of which are described as Council entities trading in order to make a profit (see s6).

"Funding Local Governmment" - The Shand Report
In February 2007 the Minister for Local Government commissioned an inquiry into rates prompted (supposedly) by concern that rates were too high. The Inquiry was headed by David Shand, a former employee of the IMF and the World Bank. These institutions are implicated in forcing the privatisation of domestic water supply in developing countries. The report recommends volumetric charging for household water use (see 10.17).

Sustainable Water Programme of Action
Official site for the Programme which involves three new instruments for the management of freshwater: a national policy statement, a national environmental standard for measurement of water takes and a national environmental standard on ecological flows and water levels.

Proposed National Policy Statement for Freshwater Management
Minister for the Environment, Trevor Mallard, appointed a Board of Enquiry into water which called for submissions to this statement in September 2008.  Submissions closed Friday 23rd January 2009. The objectives outlined make no mention of ensuring New Zealanders' human right to water are protected.


United Nations Committe on Economic, Social and Cultural Rights, General Comment 15
General Comment 15 provides guidance to UN states (including NZ) on how to meet their commitment to the right to water as detailed in articles 11 and 12 of the International Covenant on Economic, Social and Cultural Rights.


Parliamentary discussion on water supply

12 May 2009, Questions for Oral Answer, Auckland-Local Government Reform
7 May 2009, Questions for Oral Answer, Water Services, Council - Privatisation
12 March 2009, Hansard, Daily Debates, Water Supply - Funding [scroll down to item 10]

The New Zealand pro-metering lobby


NZ Business Roundtable
Represents the chief executives of the country’s most profitable companies, has been lobbying for reform of the water industry since the 1990s. On the website you can view numerous speeches and papers on the issue dating from the mid-1990s.

Instituition of Professional Engineers New Zealand (IPENZ)
Body claiming to represent professional engineers in New Zealand. It is actively lobbying for mandatory meters in New Zealand. Spokesperson on the issue is the Institution's Director of Policy, Tim Davin. In 1994 Porirua City Council published a paper Tim Davin had written for his Masters in Public Policy at Victoria University of Wellington, called The Water and Wastewater Monopoly in Local Government. In 1995 the Business Roundtable commissioned a report called Reform of the Water Industry which quotes heavily from Davin’s report. Both papers argue that water is an anomaly in being managed by the public sector. In October 2008, IPENZ produced a prometering report on water.

Water NZ / NZ Water and Wastes Association
Its stated aim is  "Promoting and enabling the sustainable management and development of the water environment". However the group is the water industry lobby group, includes corporate and individual members from the public and private sector and is actively lobbying in favour of water meters.

Governance of Water, A proposal from the Turnbull Group, July 2009
In June 2009 Nick Smith, Minister for the Environment announed a year long process to develop a strategy for freshwater management to be led by the Land and Water Forum. The Forum is made up of what used to be the Sustainable Land Use Forum and the Turnbull Group. The Turnbull Group is convened by Water NZ, the water industry lobby group, and this proposal includes universal volumetric charging for household water usage.

New Zealand's valuable natural resource: IPENZ Report on Water, October 2008
Water Metering and Volumetric Charging on Domestic Dwellings: NZWWA Draft Policy, November 2008

Household Water Supply in Wellington

Most businesses have water meters and are charged for the amount they use. Households can opt to use meters. According to the Wellington City Council (Website around 1800 residential households opt to use meters. Last we looked households and businesses were charged at the same rate but it's hard to find that information on the WCC site.

All new houses are fitted with tobys designed for future meter installation.

In 2007, WCC also created a Water Charter outlining the rights and responsibilities of the Council as supplier of water and those who used water.

Capacity, a Council Controlled Trading Organisation (CCTO) provides water, wastewater and stormwater management services to Wellington and Hutt City. Under the Local Government Act, CCTOs are Council entities operating in order to make a profit. Despite this their website says they operate on a not-for-profit basis.

Councils must be able to appoint at least 50% of the Directors of the CCTOs, however just 2 of Capacity's 6 directors are council representatives, so decisions are effectively controlled by the private sector.

In 2007, Capacity chair and directors fees were increased by 50%.

After being challenged the Council has recently admitted that the figures they've been using regarding Wellingtonians' use of water, often in association with pro-meter comments, have been misleading.

In October 2009, WCC accepted the recommendations of a report by Capacity that calls for universal water metering in the city if the city exceed its current level of water use.

Water Supply Annual Report for the year ended 30 June 2009 / Greater Wellington Regional Council
Wellington City Council Water Supply Overview
Capacity homepage
Remuneration of external appointments to the Boards of CCTOs and Council subcommittees 6th November 2007
Right to Water's page on the Cook Report (on WCC misleading water use figures)
'Water Conservation and Efficiency', Capacity's report to Wellington City Council, Report 1, WCC Strategy and Policy Meeting, 15 October 2009

Household water supply in the world

Overview

• The water industry is popularly estimated to be worth US$400 billion a year

• It is dominated by about 10 mega-companies

• The most common model for private sector involvement is public-private partnerships where central or local governments maintain ownership of water infrastructure and aspects of management and supply are contracted out on a long-term basis to private companies

• Some companies initially specialised in water projects in poor countries taking advantage of a new privatisation and commercialisation approach applied by international development big-wigs like the World Bank and the International Monetary Fund. These organisations offered countries aid or loans on condition that they privatise,

• As companies realised that people in poor countries couldn’t afford water charges, they turned their attention to wealthier countries like New Zealand.

• There is international resistance to water privatisation, user-pays and other forms of commodification. Recent fights have emerged over pre-paid water meters. 

Public Private Partnerships (PPPs)

• PPPs are the most common form of water privatisation in the world. 

• PPPs are typically partnerships where government (local or central) maintains ownership of infrastructure and a regulatory / governance role and the private sector takes on management of a particular aspect of a public service.

• Those advocating PPPs often pose it as an alternative to full-scale privatisation, saying public involvement ensures social responsibility goals are met while private sector can bring money and skills around resource management and risk-taking. 

• Many pro-PPP policy makers in NZ insist on discussing PPPs as something different to privatisation. Internationally it is considered a form of privatisation. 

• Under PPPs the private sector has access to potentially profitable areas of a public service while the public service has to fork out for maintenance of infrastructure.

• Rather than PPPs being an alternative to privatisation, PPPs are simply the latest form of privatisation. As the limits of privatisation are highlighted, with companies managing assets once in public hands needing to be bailed out, and concern over dubious ethics of private providers of public goods like electricity, PPPs are more politically palatable. Outright privatisation of water may outrage the general public, while PPPs appear innocuous. The private sector could not access water under traditional privatisation models but PPP models allow access to a profitable sector previously off-limits.

• In the wake of the Local Government Act 2002 which facilitates the use of PPPs in water management, Auckland hosted a conference called Establishing and Funding Public and Private Sector Partnerships: Practical Lessons from Overseas applied to New Zealand. It was attended by central and local government representatives and many private sector interests. Other similar conferences have followed. 

New Zealand Council for Infrastructure Development (NZ's very own lobby group for PPPs!)   

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Right to Water, PO Box 9263, Wellington, NZ, Email us, This page last updated 26 October 2009