Speech to the Institute of Public Works Engineering Australasia Conference 2019

• I would like to thank you for the invitation to speak to you this afternoon.
• I see you have a very full and interesting programme ahead. I encourage you, over the next couple of days, to take the opportunity to reflect on the last six months, to reconnect with each other, and to come together to share your collective experience and knowledge.  
• Today, I would like to update you on an important part of this Government’s infrastructure reform programme – and one of my key priorities as Minister of Local Government – namely the Three Waters Review.
• I’ll also briefly touch on the Government’s wider programme to reform freshwater management and improve water quality, including urban water ecosystems.
• But first, let me start with the Three Waters Review. 

Importance of the three waters and the case for change

• Having well maintained and managed drinking water, wastewater and stormwater systems is critical for the health and wellbeing of all New Zealanders, and for upholding Te Mana o te Wai – the health of the water, the health of the environment, and the health of the people.
• However, in many parts of the country, communities cannot be confident that drinking water is safe when they turn on the tap, or that good environmental outcomes are being achieved from our waste and stormwater systems.
• The Havelock North contamination in 2016 drew the nation’s attention to the catastrophic consequences of failure – around 5000 people became ill and up to four people died as a result.
• Even putting Havelock Northt to one side, around 34,000 people across New Zealand become ill from their drinking water every year, and many thousands must boil their water to drink it safely.
• This is simply unacceptable in a developed nation such as ours.
• These issues are symptomatic of historic underinvestment in our water infrastructure. A lack of investment that is compounded by weak or sometimes non-existent regulation, and a lack of enforcement.
• Although drinking water is the priority, regulatory weaknesses stretch past drinking water.
• We are all aware of the numerous examples of waste and stormwater treatment failures, and discharges onto mahinga kai – these incidents are all too common across the country. 
• Safe, clean water is a birthright of every New Zealander. The status quo is simply not meeting community expectations, nor is it protecting our invaluable clean, green image.
• It’s clear that we must consider and address these issues in a holistic way, across all three waters – from source to tap and back again.
• And we must act now to bring about much needed improvements, so that events like Havelock North don’t happen again.

Proposed regulatory reforms

• Addressing the regulatory deficiencies has been the initial priority of the Three Waters Review.
• Many of you will be aware that officials have, this year, been engaging with local government, iwi/Māori, water infrastructure specialists and others on a suite of proposals for strengthening the regulation of the three waters.
• In summary, proposals for overhauling drinking water regulation include:
  • ensuring all communities have access to water that is safe to drink;
  • managing risks to drinking water safety, including mandatory residual treatment of drinking water supplies, with only limited exemptions;
  • stronger obligations and direction to local authorities to protect drinking water sources; and
  • strengthening compliance, monitoring and enforcement of drinking water regulation.
• Targeted reforms to improve the environmental performance of our wastewater and stormwater systems include proposals for:
  • new national environmental standards for wastewater discharges and overflows;
  • new obligations on wastewater and stormwater network operators to manage risks to people, property and the environment, and to report on their environmental performance; and
  • national good practice guidelines for stormwater network design and management.
• Cabinet is scheduled to consider these reforms shortly. 
• We’re also considering the establishment of an independent government regulator to oversee the new regime.
• Although we’re still working through the detail of what a water regulator might look like, I would expect it to play a key role in sector leadership and education, including support for our water engineers.
• Details of the form and function of a regulator are expected to be considered by Cabinet in August. 
• These proposals will require legislative change to implement. A Water Services Bill could be introduced before the end of the year, with possible enactment by mid-2020.
• As professionals ‘at the coalface’ of engineering and asset management, you are the critical link in translating these policy initiatives into physical assets and services, bringing improved health, wellbeing and environmental outcomes for our communities and ecosystems.  
• And it will be no small job. Research is still being finalised, but the indicative capital cost of upgrading wastewater treatment systems across the country could be in the region of $3 billion to $4 billion over the coming years.
• Further research indicates the potential national capital cost of upgrading drinking water treatment plants to meet enhanced Drinking Water Standards could be around $300 million to $570 million.
  
   

Addressing funding and capacity issues

• It’s important that we prioritise these regulatory reforms, even though this work will come at a cost and may be challenging for some water service providers – particularly some smaller councils and community suppliers, such as marae.
• In addition to addressing the immediate regulatory issues, the Three Waters Review is considering the wider affordability and capability challenges facing the sector.
• This includes addressing the significant disparities between communities in terms of the safety, reliability and price of their drinking water, and the environmental outcomes they experience.
• Put simply, we need to ensure that some communities don’t fall behind the rest of the country.
• The proposed regulatory reforms will be phased in, providing us with time to consider how to deal with these wider issues, and for service providers to adjust. This includes a proposed five-year transition period to allow smaller drinking water suppliers to come up to speed with the new requirements.
• Throughout 2019 and into 2020, my officials will be having discussions with local government, water industry experts, iwi/Māori and others about options to improve three waters service delivery and funding arrangements.
• This may include thinking differently about how these services are delivered and paid for, including options for sharing costs across communities, or a nationwide fund.
• Regardless of what options are considered, the continued public ownership of existing three waters assets will be a bottom line.
• At the same time, we’re looking at ways to support councils and regions that are investigating collaborative initiatives to improve their water services, including shared regional services. 
• It’s encouraging to see such initiatives already in progress, including:
  • the agreement for Watercare to provide water services for Waikato District Council;
  • territorial authorities in the Waikato region developing a project plan for collaboration on three waters activities;
  • South Wairarapa District Council joining with Wellington Water; and
  • Hawke’s Bay councils undertaking a Three Waters review.
• Alongside service delivery improvements, a key challenge in improving capacity and capability in the three waters is staff recruitment, retention and training. This is another issue being considered by the Three Waters Review.
• I’d like to acknowledge the role of IPWEA as a key contributor to these conversations, and in promoting industry professionalism, education and knowledge sharing.

Wider freshwater reforms

• The Three Waters Review is not being undertaken in isolation, but is proceeding in tandem with the Government’s Essential Freshwater programme, led by the Minister for the Environment and supported by myself, as Associate Minister for the Environment.
• This wider programme of reform is focused on ensuring an integrated and effective freshwater management system, with an emphasis on improving water quality and ecosystem health, and upholding Te Mana o te Wai.
• There are clear overlaps between Essential Freshwater and the Three Waters Review. But wai is wai and we need to be cognisant that whatever we do in one area will impact on other parts of the environment. Officials and Ministers are therefore working closely together in both areas of work.
• I have a keen interest in improving water quality and biodiversity in urban environments.
• The decline in water quality and the loss of streams and other urban water bodies through piping and alteration has had adverse effects on aquatic ecosystems and biodiversity in urban areas.
• For people, these practices have also caused a loss of physical connection to the water, and made many urban waterbodies unsafe for recreation and the gathering of kai.
• We need to prevent the further degradation of freshwater ecosystems, reverse past damage, and improve the health of freshwater.
• Our proposed amendments to the National Policy Statement for Freshwater Management will mean more integrated management of land use and water between regional councils and territorial authorities in urban areas.
• Through the development of Urban Water Principles, we’re also looking at how we can encourage the uptake of good practices for urban water management in Aotearoa, particularly through the increased use of water sensitive urban design.
• Good urban water management can enhance environmental wellbeing, not only by improving the quality and quantity of wastewater and stormwater discharges, but by enhancing urban biodiversity.
• Social wellbeing can be enhanced by the provision of green spaces through water sensitive urban design. A good example of this in Wynyard Quarter in Auckland, or Waitangi Park in Wellington. These areas have constructed wetlands and are a popular spot for people to visit or relax by. Councils can also use these areas to educate people on urban water and freshwater issues – enhancing public education and awareness.
• By having Te Mana o te Wai as the overall framework for urban water, we can also improve cultural wellbeing. Water has important cultural connections for all New Zealanders. Empowering tangata whenua, in particular, to express kaitiakitanga through urban water management is also something we can all work towards.

Closing remarks

• We have a busy programme of work ahead of us, and we need to work together on it – central and local government (including you as engineers, asset managers and policy practitioners) – each bringing our respective strengths to play.
• Reflecting on your conference theme “Delivering on Reform – Future Infrastructure Perspectives”, I encourage all of you to consider how you can reflect the upcoming Three Waters and Essential Freshwater reforms in your own work.
• I think this will benefit Aotearoa and enhance the four wellbeings of local government, these being social, economic, environmental and cultural wellbeing.
• I wish you well for the rest of your conference.