Bill 1: The Water Services Entities Bill

11 November 2022

The Water Services Entities Bill was introduced on 2 June 2022. The Bill establishes four publicly owned dedicated Water Services Entities to deliver safe, reliable, and efficient water services. While the entities will continue to be proportionately owned by councils, they will have more scale to invest in water infrastructure and do things differently to improve management of three waters.

After the Bill’s first reading on 9 June, it was referred to the Finance and Expenditure Select Committee. The Committee considered over 80,000 submissions on this legislation.

On 11 November, the Finance and Expenditure Committee issued its report on the Water Services Entities Bill.

As a result of submissions, the Departmental Report and other advice, approximately 130 amendments have been made to the Bill. Given the Bill has 228 clauses (plus schedules), the number of changes to address feedback is substantial and significant.

All the amendments improve the legislation and positively impact the way the entities will operate from 1 July 2024.

They will strengthen representation, magnify local voice, and increase transparency. They will also provide more certainty to councils and those working in the three waters sector. 

These changes strengthen the ability of the Water Services Entities to deliver sustainable water services and protect the health and well-being of communities today and for future generations.

What were the key themes from submissions?

There were a number of key themes from the more than 80,000 written and 227 oral submissions. These included existing service provision, ownership, governance structure, joint-oversight, the scope and scale of the entities, privatisation, and local voice and community engagement, amongst others.

The Select Committee considered these key themes in making its recommendations to the Government.

What are the most significant changes?

• WSEs are responsive to councils’ planning processes

Revisions to the Bill make it clear that WSEs need to support councils’ planning processes and growth strategies.

• Ensuring all voices are heard at the table

The make-up of the Regional Representative Group will be required to consider the appropriate mix of metro, provincial and rural councils to ensure smaller councils have a voice alongside larger councils.

• Increased accountability to communities

The entities will be required to have an annual shareholder meeting to keep them accountable to communities. This is in addition to the existing requirements in the Bill around responsiveness and accountability to communities, which exceed the current requirements in the Local Government Act.

What are the most substantive changes to the Water Services Entities Bill, and what clauses are these in?

The three most substantive recommendations relate to the purpose of the Water Services Entities, objectives of the entities, and expanding the operating principles.

1. Purpose – Clause 3.

• The purpose has been updated to help make the legislation more accessible, especially for those who do not have a legal background.
• This expands the purpose statement of the legislation to transforming the three waters service delivery system, to enable long-term, sustainable improvement in the safety, quality resilience, accessibility, and performance of drinking water wastewater and stormwater in a manner that is efficient and affordable for New Zealanders.

2. Objectives – Clause 11. Two changes have been made:

• Including supporting and enabling planning processes and growth as an objective under clause 11(c).
• Expanding clause 11(f) to include a reference to climate change adaptation (in addition to climate change mitigation).

3. Operating principles – clause 13. Two changes have been made:

• A requirement for the Water Services Entities to have regard to areas where services are delivered to communities, and ensure there is capability in, and an understanding of, local cultural or environmental factors. This will help drive socially responsible procurement.
• A requirement for the water services entities to take a whole of catchment approach to the delivery of water services and identification and management of risks and hazards relating to water services.