This article was first published by Water New Zealand here.
In 2021, there were significant developments in the Government's programme to comprehensively reform the drinking water regulatory system, with the Water Services Act 2021 coming into force on 15 November 2021. As part of this, Taumata Arowai commenced its role and powers as the new independent water services regulator for Aotearoa.
While Taumata Arowai is empowered to deal with wastewater and stormwater networks, the Water Services Bill, as initially introduced to Parliament, focused squarely on the establishment of a new regulatory regime for the supply of drinking water. The scheme of the Bill suggested that, like the regime under the Health Act 1956, the focus was on those who source and supply drinking water. However, as the Bill evolved, provisions were added which seek to improve the regulation and performance of wastewater and stormwater networks. The most significant provisions relating to wastewater networks were inserted into the Water Services Bill through a Supplementary Order Paper released on 3 September 2021.
The amendments expanded the role and powers of Taumata Arowai to include:
Given the late insertion of provisions relating to wastewater and stormwater networks, it is not surprising that much of the focus to date has been on the implications for those who source and supply drinking water. Without detracting from the significance of these implications, we consider that the Water Services Act will also have critical implications for wastewater networks. Particularly when it comes to seeking consent for new or existing infrastructure under the Resource Management Act 1991 (RMA).
Wastewater environmental performance standards
The Water Services Act provides Taumata Arowai with the power to make wastewater environmental performance standards. It also provides Taumata Arowai with the power to set measures and targets to improve the performance of drinking water, stormwater, and wastewater networks in areas that require long-term focus. Taumata Arowai can only set wastewater environmental performance standards following consultation with wastewater network operators, regional councils and any other person Taumata Arowai considers appropriate.
Wastewater environmental performance standards can relate to:
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discharges to air, water or land;
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biosolids and any other by products from wastewater;
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energy use; and
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waste that is introduced by a third party into a wastewater network (i.e. trade waste).
In accordance with the Water Services Act, wastewater environmental performance standards may include (but are not limited to) requirements, limits, conditions, or prohibitions. They may apply to all wastewater networks and their operators, or to classes of wastewater network and their operators.
Influence of regional councils to be pared back?
Relevant to Taumata Arowai's power to set national wastewater environmental performance standards, the Water Services Act makes corresponding amendments to the RMA which effectively mean that non-compliance with a wastewater environmental performance standard is prohibited. This is because the Water Services Act amends section 104 RMA so, that when considering a resource consent application that relates to a wastewater network, a consent authority cannot grant the consent contrary to a wastewater environmental performance standard made under section 138 of the Water Services Act. The consent authority must also include as a condition of granting the consent, requirements that that are no less restrictive than is necessary to give effect to the wastewater environmental performance standard.
In our view, and consistent with the overall intent of the Three Waters reforms, the overall effect of this will be to discourage Regional Councils from setting their own technical or environmental limits through RMA plans and consents on wastewater discharges, at least to the extent that these may seek to differ from corresponding wastewater environmental performance standards established by Taumata Arowai at the national level. This will further pare back the regulatory oversight and control that regional councils will have over wastewater infrastructure under the new, much more centralised regulatory framework.
Implications for consenting wastewater infrastructure
In our view, the development of wastewater environmental performance standards at a national level will go a long way towards the Government's goal of improving the overall performance of wastewater networks.
However, it almost goes without saying, but the setting of clear, workable, and fit for purpose wastewater environmental performance standards will already be essential to ensure wastewater networks can obtain consent under the RMA. As part of this, it will be critical that existing wastewater network operators fully engage in any consultation on the development of wastewater environmental performance standards to ensure that compliance can be fully achieved. Unachievable wastewater environmental performance standards will essentially make consent impossible to obtain for wastewater infrastructure, at least without prohibitively expensive upgrades to treatment plants etc.
We see a real risk that ambitious absolute environmental limits imposed by wastewater environmental performance standards may cause substantial issues for the delivery of essential wastewater infrastructure services, particularly for smaller authorities and treatment facilities where economics of scale to fund upgrades may be harder to achieve. The Government's broader Three Waters reform programme if enacted as currently envisaged would likely alleviate this concern (at least to a substantial degree).
From an RMA standpoint, the power for Taumata Arowai to make wastewater environmental performance standards also raises the potential scenario of Taumata Arowai as the maker of the performance standards, participating as a submitter on wastewater consent applications.
This is particularly likely in circumstances where:
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There is potential debate or ambiguity about compliance with a wastewater environmental performance standard; or
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There is ambiguity around the interplay between any resource consent conditions imposed by regional councils and corresponding national wastewater environmental performance standards set by Taumata Arowai.
The latter circumstance has the potential to be particularly fraught, given regional councils will be required through the corresponding RMA changes to only impose conditions on wastewater consents "that are no less restrictive than is necessary to give effect to the wastewater environmental performance standard" – there will potentially be considerable scope to argue whether a proposed consent condition is more or less restrictive than is necessary to achieve one of Taumata Arowai's national standards.
As set out above, this is another reason why the provision of clear, workable and fit for purpose wastewater environmental performance standards that can easily be translated into corresponding resource consent conditions will be essential.
Interim implications
With Taumata Arowai's oversight role in relation to wastewater and stormwater not commencing until late 2023, we do not expect to see the release of draft wastewater environmental performance standards for consultation this year. However, we consider that the impending release of national wastewater environmental performance standards may have indirect implications for existing wastewater consents which require re-consenting in the next few years.
We anticipate that consent authorities may be hesitant to grant longer term consents for existing wastewater treatment facilities consents ahead of the release of any wastewater environmental performance standards. This is to avoid locking in treatment standards for the long-term, where facilities may be contrary to any future performance standards set by Taumata Arowai. This is unlikely to be well-received by infrastructure providers, given the need for long-term investment certainty.
While it is too soon to tell how this will play out in practice, applicants may need to be open to shorter duration consents in the interim, or otherwise more detailed review conditions that would appropriately enable future performance standards to be integrated into longer-term consents at a later point. Similarly, the lead up planning and preparation of consent applications for wastewater infrastructure can take months, if not years.
Applicants preparing applications ahead of the release of the wastewater environmental standards may need to be flexible and respond accordingly once the standards are released.
This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.