Document 1
Priority Routine
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
1982
Title:
Three Waters Review: Māori rights and interests
Date:
26 February 2021
Act
Key issues
This briefing provides an update on the current thinking on the recognition of Māori rights and
interests in Three Waters Reform Programme. It is work in progress as iwi/Māori engagement is
ongoing, but is designed to test early thinking on some of the critical features, and to gain your
feedback on the options we are considering (
Appendix B and
Appendix C).
In particular, we are seeking your agreement to use the material at
Appendix C during the March
2021 engagement workshops with iwi/Māori and local government. We are due to meet with you
on 1 March 2021 for a conversation about entity numbers and boundaries, and will also discuss
your comfort with
Appendix C at that meeting.
Information
Action sought
Timeframe
Discuss this briefing with officials at a meeting on 1 March 2021.
By 3pm 1 March 2021
Agree the objectives for the Crown/Māori relationship within the three
waters service delivery reforms.
Official
Agree the material at
Appendix C can be used to gather feedback during
the March engagement with local government and iwi/Māori.
the
Contact for telephone discussions (if required)
Name
Position
Direct phone After hours
Suggested
line
phone
1st contact
Allan Prangnell
Executive Director, Three
021 865 809
021 865 809
✓
Waters
under
Ben Dickson
Principal Advisor Iwi/Māori s 9(2)(a)
s 9(2)(a)
Return electronic
Ben Dickson ([email address])
document to:
Cohesion
https://dia.cohesion.net.nz/Sites/LGV/TWRP/POLD/_layouts/15/DocIdRedir.aspx?ID=3W2DU3RAJ5R2-
reference
1651355117-107
Ministerial
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database
reference
Released
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Purpose
1.
This briefing provides an update on the current thinking on the recognition of Māori
rights and interests in Three Waters Reform Programme (Reform Programme). It is
work in progress as iwi/Māori engagement is ongoing, but is designed to test early
thinking on some of the critical features, and to gain your feedback on the options we
are considering (
Appendix B and
Appendix C).
2.
In particular, we are seeking your agreement to use the material at
Appendix C during
the March 2021 engagement workshops with iwi/Māori and local government. We are
due to meet with you on 1 March 2021 for a conversation about entity numbers and 1982
boundaries, and will also discuss your comfort with
Appendix C at that meeting.
Executive summary
Act
3.
Introduction of new legislative, governance and management arrangements within the
Reform Programme will give rise to interests related to Article Two of the Treaty of
Waitangi. These reforms sit within the broader context of reform of the resource
management system and issues associated with water allocation. This briefing sets out
some objectives for the Crown/Māori relationship that we seek to test with you to
guide our advice on the service delivery reforms, within a broader Treaty partnership
context.
4.
Given the nature of the proposed statutory water services entities, traditional
ownership and governance tools are likely to be less influential compared to other
Information
mechanisms. A range of options have been identified (
Appendix B) that may support
an increase in strategic influence consistent with the interests raised by iwi/Māori
during our engagement to date.
5.
Opportunities will exist to materially improve the connection between rights and
interests as they relate to Mana Whakahaere, Kaitiakitanga and Manaakitanga within
Official
Te Mana o te Wai in the delivery of three waters services. Current legislative
instruments are unable to fulfil this, it is likely that a new instrument will be required
to achieve this. Officials identify a ‘Te Mana o Te Wai Statement and Response
the
Mechanism’ to be investigated further.
6.
Water services entities will be operating within a legislative environment containing
several Treaty-related statutory references, such as those in the Taumata Arowai–the
Water Services Regulator Act. A new statutory Treaty reference will be required to
under
ensure consistency and alignment with the broader legislative environment. We will
need to ensure it reflects the appropriate legislative hierarchy, particularly in relation
to the Water Services Bill and proposed amendments to resource management
legislation.
7.
Finally, the rights and interests of Māori as consumers of water services need to be
considered predominantly under Article Three of the Treaty. There are good reasons
for general mechanisms of consumer protection and advocacy to specifically address
interests of Māori as they relate to historic inequity and the specific interests of Māori
Released
who are not mana whenua within the boundary of a specific entity, including urban
Māori.
8.
This briefing outlines our current thinking about the above matters, for your feedback.
Appendix C provides the material we are seeking to test with local government and
iwi/Māori in the planned March engagement.
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Background
Engagement with iwi/Māori to date
9.
From a te ao Māori consideration of water issues, the proposed reform of three waters
service delivery arrangements is narrowly focused, given it is a targeted initiative to
address immediate concerns about drinking water safety, and the performance of
wastewater and stormwater systems.
10. The approach to the recognition of rights and interests in service delivery reform have
followed a similar pattern to that of the regulatory reform with iterative engagement 1982
with iwi/Māori. In September and October 2020, officials completed 17 hui-ā-motu
with iwi, hapū and Māori, along with three zoom hui. Alongside this, officials have also
held informal meetings with iwi/Māori about the Reform Programme. From this
Act
engagement, clear themes have emerged:
10.1 Partnership – Iwi and Māori shared resounding support for a stronger
partnership between tangata whenua and the Crown, with the need to have
the Treaty of Waitangi embedded more explicitly throughout the reform
process and beyond.
10.2 Participation – Iwi and Māori shared concerns regarding their ability to
participate and engage in this kaupapa. Currently, there is insufficient capacity
and capability for many iwi, hapū and Māori to engage. Support needs to be
given to develop Māori capacity and capability to participate.
Information
10.3 Protection – Iwi and Māori called for protection of their rights, roles and
responsibilities as tangata whenua particularly for protection around their
cultural assets. Iwi and Māori also want to see protections against privatisation
of water services.
10.4 Recognition of cultural values – Iwi want to see their mātauranga-ā-iwi
Official
incorporated within the three waters reform process and Taumata Arowai’s
regulatory regime. In relation to entity design, iwi and Māori do not want to
see catchments broken and have a strong preference for the entity boundaries
the
to adhere to the ‘ki uta ki tai’ concept. Additionally, iwi, hapū and Māori do not
want their whakapapa/iwi/hapū boundaries to be separated by the new
entities.
10.5 Use mana enhancing processes – Iwi see the reform as an opportunity to work
under
together to design something that works better than the status quo for iwi,
hapū, whānau and small rural communities.
11. Iwi/Māori also told officials they want to be involved at all levels of the Reform
Programme and the new entities, but specifically want to be involved in the ‘nitty
gritty’ aspects where they can provide the greatest change.
12. To date, officials have focused on equitable outcomes in the proposed new water
services entities as a mechanism for recognising rights and interests. Ensuring policy
Released
options for the new water services entities provide for equitable service to
iwi/hapū/Māori has been paramount.
13. The Treaty of Waitangi analysis to date is presented in
Appendix A. This table
highlights how we have considered the rights and interests. It has been refreshed
since we last provided it to you, informed by more recent engagement and the specific
advice from our Te Ao Māori Technical Working Group (Technical Working Group)
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supporting our analysis. Our intention is to use and maintain this framework as a living
document informed by engagements, hui, and insights from the Technical Working
Group that has been established to guide our work.
Objectives for the Crown/Māori relationship within the three waters service delivery
reforms
14. The Government’s ambition for progressing service delivery reform sits within a
broader Treaty partnership context. To guide Government’s consideration of these
issues, we are seeking to confirm the following key objectives, to support our advice to
you in the context of the wider Crown/Māori relationship:
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14.1
Enable greater strategic influence: Enable iwi/Māori to have greater strategic
influence to exercise their rangatiratanga over water services delivery, Act
including through enhanced capacity and capability.
14.2
Integrated within a wider system: Ensure that the rights and interests of
iwi/Māori are analysed within a wider system, including issues related to
allocation and the future of the Resource Management Act, but specifically
focussing on issues that relate to the establishment of water services entities
and delivery of water services.
14.3
Reflective of a Te Ao Māori perspective: Recognise the holistic manner
(environmental, cultural, spiritual, economic) in which water is viewed using te
ao Māori perspectives and Te Mana o te Wai including ki uta ki tai or a
Information
catchment-based approach, consistent with rohe/takiwā or whakapapa links.
14.4
Supporting clear accountabilities: Ensure roles, responsibilities, and
accountability for the relationship with the Treaty partner is clear throughout
the wider system, and that capacity and capability is available to honour the
Crown’s Treaty obligations.
Official
14.5
Improving outcomes at a local level: Provide a step change improvement in
delivery of water services for iwi/Māori at a local level, including through
enhanced capacity and capability and improved wellbeing.
the
15. These Crown/Māori relationship objectives sit alongside the broader three waters
reform objectives, proposed options to recognise rights and interests in the Reform
Programme will be analysed against both objectives. Analysis also seeks to reconcile
these objectives and highlight relevant tensions where they may exist.
under
Testing options with iwi/Māori and local government during the March
engagement workshops
16. In partnership with the Joint Three Waters Steering Committee, we have planned
workshops on the Reform Programme with local government and iwi/Māori for March
2021.
17. We are seeking your agreement to test our approach and possible mechanisms during
Released
this engagement. A range of options have been identified (
Appendix B) that may
support an increase in strategic influence consistent with the interests raised by
iwi/Māori during our engagement to date. In the section below, we have identified
options to test during our planned engagement in March. The specific material is
provided in
Appendix C.
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Potential policy options to recognise rights and interests
18. Introduction of new legislative, governance and management arrangements to deliver
water services will give rise to interests related to Article Two of the Treaty. These sit
within the broader context of reform of the resource management system and issues
associated with water allocation.
The broader statutory framework
19. The broader system within which water services will be delivered in the future is being
reformed. The guiding principle is that Government will want to ensure Te Mana o Te 1982
Wai is appropriately referenced within the broader legislative framework. This is
reflected in the establishment of Taumata Arowai and the Water Services Bill.
20. For the water services entity legislation, we see a need to prepare advice for you in
Act
two distinct areas:
20.1 A statutory reference to the principles of the Treaty of Waitangi, which should
focus on the conduct of the entities and other system participants, including
their capacity to be a good Treaty partner.
20.2 A statutory reference to Te Mana o Te Wai should be sufficiently and
practically applied to ensure mana is able to be exercised at an iwi/hapū and
even whānau level. Design of mechanisms to give effect to Te Mana o Te Wai
need to carefully balance iwi/hapū/whānau input with the need for the water
Information
services entity to undertake investment activities to address the significant
infrastructure deficit. If designed well, we think these objectives need not be
mutually exclusive.
21. Design of these statutory references sit within a moving system that recognises giving
effect to Te Mana o Te Wai is a requirement in the Water Services Bill and the National
Policy Statement for Freshwater Management. This will likely be reinforced through Te
Official
Mana o Te Taiao statutory obligations under the proposed reform to the Resource
Management Act 1991. the
Governance and the opportunity for greater strategic influence
22. Introduction of new legislative, governance and management arrangements will give
rise to renewed interests in ownership and co-governance opportunities to provide an
ability for iwi/Māori to have greater strategic influence on water outcomes.
under
23. The proposed water services entities will not have standard commercial ownership
arrangements. For example, under our current proposals, the entities would not have
shares or shareholders, so shares will not be able to be traded and will therefore have
no value. With a small number of entities across the country, multiple local authorities
will have represented interests on a Governors representative group. You will receive
further advice on entity design on this shortly.
24. Cabinet has already made it clear it wants to put in place a range of statutory
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protections against privatisation. While many iwi/Māori do not consider iwi ownership
as ‘private ownership’, we have not considered policy options that would enable
transfer of ownership of the proposed water services entities to iwi. We wish to
confirm this approach with you.
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25. Some iwi/Māori have raised the question of whether there is an opportunity to invest
in water services entities. As a general proposition, the entities will have flexibility in
relation to how and where they source debt finance, subject to delivering efficient
outcomes (amongst other objectives).
26. Iwi/Māori are a potential source of finance. It is recognised that iwi/Māori bring a
different perspective, including considerations of intergenerational benefits and
outcomes that may be aligned to wider Reform Programme objectives. Separate to
issues of ownership, there is no reason why iwi/Māori should not be a source of debt
finance to the proposed entities or in relation to specific projects that the entities will
deliver. Ultimately, this will be a decision for each entity’s board.
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27. Iwi/Māori have raised a desire for the new water services entities to be co-governed.
This has also been raised by some local government sector representatives. Act
28. It is expected that the governance framework for water services entities will include
relevant governance instruments such as a Government Policy Statement, Letter of
Expectation, and Statement of Intent. The intention is that this framework will include
prohibitions on share transfer, divesting ownership, sale of assets and dividend
payments in respect of the water services entities.
29. Our current thinking is that local government interests will be expressed through a
representative ‘Governors Group’ that will have limited decision-making powers, with
the majority of decision-making rights being exercised by an independently-appointed,
competency-based, professional board. This ‘low control’ structure is considered to
Information
better enable the structural separation required to create independent balance sheet
capacity in the water services entities and is currently being tested through credit
rating agency engagement.
30. We are considering several options for iwi/Māori to influence the strategic framework
within which the water services entities operate. Options are outlined in
Appendix B
Official
and include:
30.1 no role in co-governance, as issues raised by iwi/Māori are addressed in other
the
parts of the regulatory and provision system;
30.2 co-governance within a single joint Governors Group for each entity;
30.3 co-governance in separate Governors Groups, where each group has additional
responsibilities, but key governance instruments are jointly agreed; or
under
30.4 creation of a Mana Whenua Forum (or similar) to directly influence the board
of the water entities outside of a traditional governance arrangement (
option
for use in engagement).
31. We have tested these concepts with our Technical Working Group. They
acknowledged that the constraints on ownership controls required to achieve
operational and financial independence are weak, but believe iwi/Māori will likely still
have an expectation of ownership and co-governance. On balance, officials currently
favour a mechanism that enable iwi/Māori to directly influence the strategic priorities
Released
of the board via a Mana Whenua Forum. We consider this would best address the
issues related to a step change in a Treaty partnership approach, and the Treaty and
cultural responsiveness of water services entities. It will also be a critical mechanism
to support the board to give effect to Te Mana o Te Wai.
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32. If you support this option for use in engagement, we would like to focus further advice
on the design of a relationship between the Mana Whenua Forum (or some other
name you may suggest) and the water services entities board, with a specific focus on
clear roles, responsibilities and accountabilities.
Governance and establishing representative rights
33. The proposed water services entities will need to be of a significantly larger scale than
current service delivery arrangements, to provide scale benefits in service provision
and infrastructure investment. Our analysis is focussing on between two and six
entities across the country, noting Ministers have previously expressed a preference 1982
for three to five entities. Within the boundaries of each of these entities there will be
multiple rohe/takiwā.
Act
34. Consistent with the conclusions of the
New directions for resource management in
New Zealand (Randerson Review), engagement with iwi/Māori has highlighted the
reality of kaitiakitanga, as it relates to the provision of water services, often operates
at a hapū or whānau level. It is also important to ensure the proposed water services
entities are not in a position to determine who represents mana whenua interests.
35. Officials from the Ministry for the Environment (MfE) are actively considering options
to improve resource management tools related to mana whenua involvement into a
single, integrated, partnership process at a regional level. This will assist in improving
issues as they relate to the powers and functions that will result from resource
Information
management reform. The proposed water services entities will operate within the
environmental regulatory system; however, it will also be important they have a direct
relationship with mana whenua given the significance of water from a te ao Māori
perspective.
36. A range of options have been considered with the objective of providing the most
effective representative interest for mana whenua. These are set out in
Appendix B
Official
and include:
36.1 mana whenua self-declare in a manner similar to the current Te Kahui Māngai
the
approach;
36.2 mana whenua are identified through a kaupapa Māori process once entities are
established;
36.3 Post Settlement Governance Entities are utilised; or
under
36.4 Post Settlement Governance Entities provide a transition to representation via
a Kaupapa Māori process (
option for use in engagement).
37. The Technical Working Group agree this is a complex area, but have urged us not to be
prescriptive to ensure a process of self-determination occurs. They were particularly
interested in an option, or transition to an option, that enables early influence of
iwi/Māori on the board through the formative establishment period. This is important
to ensure that the culture and capacity of the water services entities is prioritised early
Released
in the process.
38. If you support our option for use in engagement, our focus in future advice to you will
be on how this process could be designed. We would test this further with the
Technical Working Group and other smaller expert groups. We also intend to look
closely at other statutory mechanisms, including the process of representation for
Auckland’s Independent Māori Statutory Board, and Te Maruata as part of Local
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Government New Zealand. We will also work with MfE colleagues on how this relates
to the proposed partnership arrangements under the resource management reform
work programme.
Board arrangements
39. A central way for Te Mana o Te Wai to be embedded as an operating principle of the
entity is to ensure the board is adequately competent, as a Treaty partner, and with
expertise in accessing mātauranga Māori, tikanga Māori and te ao Māori to inform the
water entities activities. It is currently proposed that the board will be appointed via
an Independent Appointment/Selection Panel rather than directly through owners’
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representatives.
40. Options we have considered in ensuring the board is competent to improve outcomes
Act
for iwi/Māori are set out in
Appendix B, and include the following competencies for
board directors:
40.1 no specific competency required;
40.2 general Treaty of Waitangi competency;
40.3 mātauranga Māori, tikanga Māori and te ao Māori competency; or
40.4 collective competency in the Treaty of Waitangi, with specific competency in
mātauranga Māori, tikanga Māori and te ao Māori (
option for use in
engagement).
Information
41. If you support this option for use in engagement, the focus of further advice to you will
be on how this competency is specified and the balance of other competencies
required for the board. We also expect that iwi/Māori will raise the ability to directly
appoint the board through the engagement process.
Official
Kaitiakitanga
42. Consistent with feedback we have received from the engagement to date, Te Mana o
Te Wai is exercised in place, where as kaitiakitanga is more likely to be exercised at a
the
hapū/whānau level. The ability to connect governance with delivery on the ground will
require the proposed water services entities to make a difference in place at a
hapū/whānau level. This will primarily be achieved through the preparation of asset
management plans and the process that guides investment decision making.
under
43. Options for expression of kaitiakitanga considered included:
43.1 rely on existing mechanisms, including input into spatial plans, district plans,
resource management mechanisms, and the proposals included in the resource
management reforms;
43.2 a new statutory mechanism requiring water entities to each prepare a
statutory plan that addresses Te Mana o Te Wai; or
43.3 a new statutory mechanism that enables mana whenua to prepare a
Released ‘Statement of Te Mana o Te Wai’ (or similarly titled document), and requires
each water services entity to provide a formal response within a prescribed
timeframe (
option for use in engagement).
44. Rather than statutorily prescribe the requirements of an expression of kaitiakitanga,
our preference is to enable mana whenua to prioritise their capacity and capability to
this kaupapa through a flexible mechanism where the onus of response shifts to the
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water services entity. We need to undertake further analysis, but our preliminary view
is that any response from the entity should include comment and analysis of any
environmental, social, cultural and economic issues raised by mana whenua. This
would include a mechanism by which mana whenua may influence outcomes relating
to service level and coverage.
45. If you support the option for use in engagement, our advice to you will focus on the
design of this mechanism to ensure it appropriately balances an ability for mana
whenua to exercise kaitiakitanga with the ability of the water services entities to
progress what will likely be an ambitious programme of investment and service
enhancement. The mechanics of how such a mechanism would work, including
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appropriate statutory weighting, will also depend on the final form of the Water
Services Bill and the reform of the resource management system.
Act
Community and consumer input
46. Māori have interests as consumers and community members within the water services
system. There is evidence of historical inequities in investment for remote and rural
communities, as well as interests raised by urban Māori that are separate to the
interests raised by mana whenua. Māori are also more likely to be over-represented in
vulnerable community groups. For that reason, the consumer interests of Māori are
likely to require specific attention across the regulatory system. We have considered
two main options that are summarised in
Appendix B:
Information
46.1 consider Māori consumers on the same basis as other consumers in the design
of consumer advocacy mechanisms; or
46.2 provide for Māori to be represented as specific consumers with the consumer
mechanisms (
option for use in engagement).
47. If you support our option for use in engagement, our advice will focus on how to
Official
design such mechanisms in a manner that does not perpetuate historic inequities.
48.
Appendix B pulls out the most critical or first order features that will require a Crown
response to the issues raised by iwi/Māori. It presents the initial options analysis that
the
have been examined by officials on key areas identified above.
Technical Working Group
49. Officials have tested our preliminary thinking with the Technical Working Group,
under
during their most recent meeting on 24 February 2021. This was an opportunity to
receive external te ao Māori feedback on our thinking and proposals.
50. The Technical Working Group were encouraging of the direction of policy advice,
particularly the design of a Te Mana o Te Wai Kaitiaki mechanism as described within
the diagrams at
Appendix C. They cautioned against options that did not involve
ownership and/or co-governance (despite acknowledging these were not strong
levers). They also consistently highlighted the need to ensure support for mana
whenua to lift capacity and capability. This must be matched by a strong partnership
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culture reciprocated within the new entity to provide the step change in relationships.
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Next steps
51. We are seeking your feedback on this briefing and have scheduled a meeting on 1
March to accommodate this. Dependent on your feedback, material will be altered or
added for the March engagement.
52. We also suggest an updated version of this briefing (incorporating any feedback you
provide) is circulated to other Three Waters Ministers, and used as a basis of
discussion at the next meeting of that group.
Recommendations
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53. We recommend that you:
a) Discuss this briefing with officials at a meeting at 3pm on 1 March
Act
2021.
b) Agree the objectives for the Crown/Māori relationship within the
Yes/No
three waters service delivery reforms, as set out on page 4 of this
briefing.
c) Agree the material in
Appendix C can be used to gather feedback
Yes/No
during the March engagement with local government and iwi/Māori.
Information
Official
the
Allan Prangnell
Executive Director, Three Waters
under
Hon Nanaia Mahuta
Minister of Local Government
/
/
Released
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Appendix A: Summary rights and interests analysis (subject to further engagement)
Right
Considerations
Interest analysis
Commentary
Article two –
•
Are there options for Māori to
•
Iwi/Māori have expressed dissatisfaction with the Treaty
•
Iwi/Māori interests related to issues related to
Article Two sit within the
Rangatiratanga
exercise rangatiratanga while
partnership approach and cultural responsiveness of
broader context of reform of the resource management system and issues
Māori will have the right
recognising the right of the
current territorial authority delivery. This includes
associated with water allocation.
to make decisions over
Crown (including through local
understanding and application of mātauranga Māori
•
Given the nature of the proposed statutory entities,
traditional ownership
resources and taonga
government) to govern?
frameworks as they apply in place (hapū/whānau level)
and governance tools are likely to be less influential compared to other
which they wish to retain
•
What role is there for Māori in
•
Introduction of new, legislative, governance and
reforms. For example – there are unlikely to be shares that can be traded and
design and implementation?
management arrangements will give rise to interests in
valued.
Information
•
Does the reform offer an
co-governance opportunities.
•
Opportunities will exist to
materially improve the connection between
opportunity to enhance Māori
•
Iwi/Māori have expressed interest in ownership
Iwi/Māori rights and interests as they relate Mana Whakahaere,
wellbeing or build Māori
(including investment), governance, board
Kaitiakitanga, Manaakitanga on the delivery of services. It is likely that a new
capability and capacity?
appointments and board composition
instrument is required.
•
Water services entities will be operating within a legislative environment
containing several Treaty related statutory references. A
new statutory
Treaty reference will be required and will need to ensure it reflects the
appropriate hierarchy particularly in relation to the Water Services Bill and
Official
proposed amendments to the RMA.
Article three – Rights as
•
What are the implications for
•
Iwi/Māori raised the importance of ensuring that water
•
Consumer protections will need to ensure issues of equity, particularly as it
Citizens
equitable outcomes?
services are affordable for all.
applies to
rural and remote communities (particularly marae or papakāinga
the
Implicit assurance that
•
What considerations should
•
Iwi organisations have raised the potential for Māori to
supplies), are adequately addressed.
rights will be enjoyed
support legal values including
benefit from alternative delivery mechanisms more
•
Some iwi/Māori have raised the opportunity to encourage maximum
local job
equally by Māori with all
natural justice, due process,
directly (e.g. jobs, social enterprise)
creation and be supported such as social procurement and skills matching
New Zealanders. This may
fairness, and equity including
•
Iwi organisations have also expressed a desire to invest
services.
warrant special measures
through regulatory processes?
in the water infrastructure sector.
•
Issues related to how water services entities are able access funding including
to attain that equal
•
What does a tikanga lens bring
equity partners/investment sources.
enjoyment of benefits.
to consideration of the issues?
under
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Appendix B: Options analysis
Act
ASSESSMENT KEY:
Does not meet objectives
Partially meet objectives
Meets objectives
Design
Option 1
Option 2
Option 3
Option 4
Comments
Feature
GOVERNANCE
NO CO-GOVERNANCE
SINGLE CO-GOVERNANCE
JOINT CO-GOVERNANCE
MANA
It is likely that the governance framework for water services entities
What is the of
ROLE FOR MANA
WITH LOCAL AUTHORITIES
Iwi/Māori interests are
WHENUA
will include instruments such as a Government Policy Statement (GPS),
mana whenua
WHENUA
Iwi/Māori interests are
represented alongside
FORUM
Letter of Expectation (LOE) and Statement of Intent (SOI). This
role in
Iwi/Māori have no
represented alongside
local government in a
DIRECTLY
statutory framework will include prohibitions on share transfer,
Governance
direct role influencing
local government in a
separate Forum that
INPUTS TO
divesting ownership, sale of assets and dividend payments for a given
Information
governance of water
single Governors Group
comes together with a
BOARD
entity. For that reason, options of direct ownership of the water
services entities
with equal rights
Local Council Forum on
Iwi/Māori are
services entities by iwi/Māori have not been explored.
significant strategic
not
Our current thinking is that local government interests will be
issues like the SOI/LOE.
represented
addressed through a representative Governors Group that will have
Representation on the
within the
limited decision-making powers, with the majority of decision-making
Governors Group would
Governors
rights being exercised by the Board. This structure will better enable
be equal. Both the Mana
Group, and
Whenua Form and the
instead have
the structural separation required to create independent balance sheet
Official
Local Government
a statutorily
capacity in the water services entities.
Forum could also have
prescribed
Iwi/Māori have raised opportunity for co-governance as a mechanism
other functions.
direct
to achieve strategic influence. However, in the proposed entities
relationship
traditional governance governance levers are more limited that other
the
with the
governance structures. We have therefore analysed a broader range of
Board.
options for iwi/Māori to influence the strategic framework within
which the entities operate.
Any option also needs to be considered from a regulatory system
perspective including connections to Government decisions on water
allocation as well as they review of the Resource Management Act
under
1991
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1982
Design
Act
Option 1
Option 2
Option 3
Option 4
Comments
Feature
BOARD
NO SPECIFIC
GENERAL TREATY OF
MĀTAURANGA MĀORI,
COLLECTIVE
It is proposed that the competency based professional Board for each
ARRANGEMENTS
COMPETENCY
WAITANGI COMPETENCY
TIKANGA MĀORI AND TE
COMPETENCY
water services entity be appointed by an Independent Selection Panel.
What are the
No specific Treaty or Te
A specific requirement for
AO MĀORI COMPETENCY
A collective
A central way for Te Mana o Te Wai to be embedded as an operating
Board
Ao Māori competency
Treaty of Waitangi
A specific competency
Treaty of
principal of the entity is to ensure that the Board is adequately
competency
required of Directors.
competency
requirement related to
Waitangi
competent both as a Treaty partner, and with expertise in accessing
requirements?
prescribed areas of Te
Board
mātauranga Māori, tikanga Māori and Te Ao Māori knowledge to
Ao Māori competency.
competency
inform the water entities activities.
with a
specific Information
competency
related to
Mātauranga
Māori
knowledge
Official
the
under
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Design
Act
Option 1
Option 2
Option 3
Option 4
Comments
Feature
ESTABLISHING
MANA WHENUA - SELF
MANA WHENUA – WITH
POST SETTLEMENT
TRANSITION:
The proposed water services entities will need to be significantly larger
MANA WHENUA
DECLARED
SUPPORT FOR A KAUPAPA
GOVERNANCE ENTITIES
PSGES UNTIL
scale than current service delivery arrangements to provide scale
INTERESTS
Mana-whenua groups
MĀORI APPROACH
Mana whenua interests
A KAUPAPA
benefits in service provision and infrastructure investment. Our
How would a
are identified consistent
Mana whenua groups are
are represented by post-
MĀORI
analysis is focussing on between 2-6 entities across the country.
multi-regional
with current RMA
identified through
settlement iwi
PROCESS
Within the boundaries of each of these entities there will therefore be
entity identify
processes via
kaupapa Māori process
authorities
CONFIRMS
multiple rohe/takiwā.
which mana-
mechanisms likeTe
once entities are
INTEREST
Consistent with the conclusions of the Randerson Review, engagement
whenua have
Kahui Wai Māngai.
established
A combined
with iwi/Māori has highlighted that kaitiakitanga as it relates to the
interest within
option Information
provision of water services often operates at a hapū or whānau level.
their boundary?
whereby
It is also important to ensure that the proposed entities are not in a
PSGEs
position of determining who represents mana-whenua interests.
operate as a
mana-
Officials from MFE are actively considering options to improve RMA
whenua
tools related to mana whenua involvement into a single integrated
forum for a
partnership process. The proposed entities will operate within the
transitional
environmental regulatory system, however it will also be important
period until a
that they have a direct relationship with mana whenua given the
Official
kaupapa
significance of water from a Te Ao Māori perspective.
Maori
process for
mana-
the
whenua can
occur
under
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Design
Act
Option 1
Option 2
Option 3
Option 4
Comments
Feature
KAITIAKITANGA
EXISTING MECHANISMS
NEW STATUTORY
TE MANA O TE WAI
Article IV.
Consistent with feedback, Te Mana o Te Wai is richly experienced in
MECHANISM
Article I.
Rely
REQUIRED PLANS
STATEMENTS AND
place and kaitiakitanga is more likely to be exercised at a hapū/whānau
How will
on existing
Article II.
Require
RESPONCE
level. The ability to connect governance with delivery on the ground
hapū/whānau
mechanisms such as
water services entities
Article III.
Enable
will require the proposed water services entities to make a difference
level be able to
input into spatial
to prepare statutory
mana whenua to
in place at a hapū/whānau level. This will primarily be achieved
influence the
plans and
plans that addressed
provide a statement
through the preparation of asset management plans and investment
water services
mechanisms the
Te Mana o Te Wai.
of mana whenua
decision making tools.
entities
Resource
(with flexibility to
Rather than statutorily prescribe the requirements of the plan, our
outcomes
Management Act
determine form) and
Information
preference to enable mana-whenua to prioritise their capacity and
(and its replacement)
require water
capability to this Kaupapa through a flexible mechanism where the
to adequately
entitites to respond
onus of response shifts to the entity.
address
to that statement
environmental
effects .
COMMUNITY
MĀORI AS CONSUMERS
REPRESENTATIVE
Māori have interests as consumers and community members within
Official
AND CONSUMER
Article V.
CONSUMER INTERESTS
Māori
the water service system. There is evidence of historical inequirites in
INPUT
consumers have
ARTICLE VI.
The
investment for remote and rural communities. Māori are also more
How will Māori
access to the same
needs of Māori are
likely to be over-represented in vulnerable community groups. For that
input as
consumer advocacy
particularly highlighed
reason, the consumer interests of Māori are likely to require specific
the
consumers
and inputs as other
in the design of
attention across the regulatory system.
consumers
consumer advocacy
instruments to
recognise, and not
perpetuate, historic
inequities under
IN CONFIDENCE
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Appendix C: Draft material for March 2021 engagement with local government and iwi/Māori
Act
Information
Official
the
under
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1982
Act
Information
Official
the
under
IN CONFIDENCE
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1982
Act
Information
Official
the
under
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Released
Document 2
Priority Routinet
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
Title:
Three Waters Reform – update on water service entity design
1982
Date:
26 March 2021
Key issues
Act
This briefing provides you with an overview of the key features of officials’ preferred water service
entity design scenario and outlines emerging charging and pricing principles.
It seeks your agreement to include the preferred approaches to entity design and charging and
pricing in the forthcoming Cabinet paper proposals in May 2021.
Action sought
Timeframe
Agree that the proposed entity design and charging and pricing
approaches be included in the suite of draft papers due to be considered
by Cabinet in May 2021, subject to any feedback you have.
Note that as part of the Cabinet paper drafting process, officials will
Information
provide further advice in relation to outstanding entity design and charging 31 March 2021
and pricing matters.
Agree that a copy of this briefing is provided to Three Waters Ministers, as
part of the package of material that will be circulated for the meeting on 8
April 2021 (subject to addressing any feedback you provide).
Official
Contact for telephone discussions (if required)
Name
Position
Contact Number
Suggested
1st contact
the
Allan Prangnell
Executive Director, Three
021 865 809
✓
Waters
Michael Chatterley
Commercial & Financial
s 9(2)(a)
Lead, Three Waters
under
Return electronic document to:
[email address]
Cohesion reference
3W2DU3RAJ5R2-1009474250-188
Ministerial database reference
LG202100342
Pages 2 - 12 and 15 - 28 have been removed as they are out of scope of the request
Released
Information on pages 13 and 14 has also been redacted as it is out of scope of the
request
IN-CONFIDENCE
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The Department of Internal Affairs
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Role and membership of Governor Representative Group
58.
A Governor Representative Group enables efficient governance and decision making
1982
on behalf of a potentially large group of representative local authorities and iwi/Māori
within the multi-regional jurisdiction of the entity. Importantly, it serves as a reflection
and proxy for collective public and community ownership of water infrastructure.
Act
59.
It is proposed that
local authorities and mana whenua will be co-Governors and will
appoint and remove representatives to the Governor Representative Group. It is also
assumed that iwi/Māori (through mana whenua) will appoint representatives to the
Governor Representative Group with legislation setting minimum requirements
relevant to appointment of Governor Representatives.
Appointment of Governor Representatives
60.
The number of Governor Representatives for each entity is yet to be determined as it
Information
will depend on the number of entities and boundaries (that is, number of member
local authorities). It needs to be a workable number to ensure effective ability to arrive
at decisions. We anticipate there being 10 or fewer members.
61.
If an entity comprises more member local authorities and mana whenua
representatives than can be accommodated on the Governor Representative Group,
then Governor Representatives: Official
61.1 must comprise a distribution of metro, provincial and rural local authorities
(noting co-governance with mana whenua); and
the
61.2 represent a geographic spread across the jurisdiction of the entity.
62.
Members of the Governor Representative Group will be subject to minimum
requirements in legislation. In respect of local authority representatives, we expect
Governor Representatives to be limited to elected members, chief executives or other
under
appropriately qualified senior managers of a local authority. However, only elected
members will be able to appoint a representative, which retains a level of democratic
accountability.
63.
We also expect a requirement for an annual rotation of Governor Representatives,
where a certain number of nominating local authorities are required to retire their
Governor Representatives to avoid lengthy periods where a local authority may not be
a nominating local authority.
Released
64.
Legislation will provide for the appointment of Governor Representatives as above, but
would also include:
64.1 term of appointment of Governor Representatives;
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64.2 a requirement to agree and present to the entity Board (on an information
basis only) a charter outlining functions and operations of the Governor
Representative Group;
64.3 the process and procedures of meetings of the Governors Representative
Group for example, regularity of meetings, quorum, chairperson, voting;
64.4 reporting to Governor Representatives; that is, Board performance, and how
renewal versus continuity of members is being managed.
Functions and powers of Governor Representatives
1982
65.
The functions and powers of Governor Representatives in the Governor
Representative Group include:
65.1 establishing and monitoring the Independent Selection Panel (described below)
Act
that appoints members to the entity Board; and
65.2 developing and agreeing a Statement of Performance Expectations that will
guide the entity in its formation of key strategic and planning documents such
as Asset Management Plans.
Information
Official
the
under
Released
Out of scope
IN-CONFIDENCE
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Document 3
1982
Act
Three Waters Review
Delivering the three waters
reform programme
Information
Meeting of Three Waters Ministers
Preparing for Cabinet
decisions in May 2021 –
8 April 2021
discussion about entity and
Official
system design
the
under
IN CONFIDENCE
NOT GOVERNMENT POLICY
Released
Scope of this meeting and slide pack 1982
Act
•
Three Waters Ministers are meeting twice in early April to agree the key
features and reform proposals to take to Cabinet in May 2021
•
The agenda on the next slide outlines the focus of today’s meeting (8 April)
Information
•
The next meeting – on 12 April – will focus on:
• numbers and boundaries of the new entities
Official
• associated reform strategy and incentives
the
under
IN CONFIDENCE - NOT GOVERNMENT POLICY
2
Released
Agenda
1982
Act
1. Entity design – overview of key points of interest
2. Community voice and consumer protection
3. Iwi/Māori rights and interests
4. Stewardship – overview of proposed approach
Information
5. Establishment and transition – overview of proposed approach
6. Next steps
Official
a) Update on public information campaign
b) Reminder of future meetings and
the decision points
Pages 4, 5, 7 - 9, 11 - 13 and 16 - 26 have been removed as they are out of scope of the request.
under
IN CONFIDENCE - NOT GOVERNMENT POLICY
3
Released
Likely
Enabling legislation
1982
Outlines purpose, objectives, powers and functions of the new entities.
structure
Also provides further detail on establishment and minimum requirements
of key governance features.
Act
Local Authorities
Mana whenua
This structure was tested in the
Appoint
March 2021 engagement
Owners
Discussed later in this slide pack
workshops with local
government and iwi/Māori
Governor Representative Group
Information
Officials will provide Ministers
Local Authority Reps
Mana whenua Reps
with an update on the key
points of feedback during the
meeting
Independent
Strategic and
Official
Selection
performance
Panel
Issue
expectations
Appoint strategic and
Appoint
performance
the expectations
tity
Statement of
Guides
n
formulation
E
Entity Board
Intent
ice
v
Appoint
Entity
under
er
Produces
S
er
Key planning &
at
Entity Management
strategic
W
documents
6
Released
Proposed roles for local authorities, communities, and mana whenua in the new system
1982
Individual role to ensure new water entities wil be responsive to
Collective role to hold new wa
Act ter entities to account for
community needs
delivering objectives
•
Local authorities and mana whenua play an important role in
•
Local authorities and mana whenua collectively are best placed to
representing the interests of their communities
hold new water services entities (and their independent
competency-based boards) to account, and act as guardians
• Local authorities and mana whenua wil individual y continue to
influence decisions through:
•
Proposed mechanisms include:
Information
• Urban development and land use planning processes (noting
• Roles of the ‘Governor Representative Group’
current resource management reform proposals)
• Issuing strategic and performance expectations
• Long-term planning (through transition phase)
• Entities publicly and formal y report against statement of
corporate intent
• Input into consultation on national/regional standard settingOfficial • Audited annual reporting (statutory requirements)
• Advocacy
the
There would also be a direct relationship between water services entities and consumers/communities
We are proposing the entities be required to: under
•
act in the best interests of their consumers and communities when achieving objectives and delivering functions
•
engage with consumers and communities in relation to key planning and accountability documents
•
establish a consumer forum as a core mechanism for engagement
10
IN CONFIDENCE - NOT GOVERNMENT POLICY
Released
Iwi/Māori rights and interests relating to the new service delivery
1982
system
Act
•
We tested three models with iwi/Māori (and local government) during the March engagement
• Statutory reference to Te Mana o te Wai
• Oversight and monitoring of statutory reference
• Iwi/Māori consumer voice recognition mechanisms
Information
•
Key feedback (so far) includes:
•
Most participants felt the models were a good start; they also wanted more time to consider how best to recognise
rights and interests in the water services entitiesOfficial
• There was a
consensus that a hybrid of the first two models (outlined above) would best al ow for recognition of
rights and interests in the three waters infrastructure and services (this is shown on the next slide)
the
• Concerns were raised about
who would represent iwi/hapū in the Governor Representative Group and the
possible
process to determine this
• There were queries about how
changes to
under
the resource management system and freshwater alocation would
affect the proposals
IN CONFIDENCE - NOT GOVERNMENT POLICY
14
Released
Iwi/Māori rights and interests relating to the new service delivery
1982
system
Act
Kaupapa Māori mandating
process led by independent
chair through transition,
funded by Crown or Water
Mana Whenua
Services Entity
Water services entity required
MANA WHENUA
to give effect to Te Mana o Te
INFLUENCE MECHANISMS
Wai through support for the
ga
Forum
Information
tan
Iwi/Hapū
aaki
an
Funding to support capacity and capability
, M
Iwi/Hapū
Entity Board
Official
Iwi/Hapū
Te Mana o Te
Appoint
re, Kaitiakitanga
*this approac
W h
aic an also apply in a co-gove
S rna
ta nce op
tem teion
nt
ae
Iwi/Hapū
the
Statement
of Response
hakah
W
ana
Entity Management
under
d by M
de
Potential for delivery partnerships
Gui
IN CONFIDENCE - NOT GOVERNMENT POLICY
15
Released
Document 4
Priority Urgent
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
Copy to: Hon Grant Robertson
Minister of Finance
1982
Title:
Three Waters Reform: Auckland Council alternative reform proposals
Date:
16 August 2021
Act
Key issues
Auckland Council has raised several issues with the governance and oversight arrangements of the
three waters reform proposals, citing a “one size fits all” approach. In light of this, the Council has
proposed a series of alternative entity design scenarios they wish to test with Standard & Poor’s
that depart from the Government’s reform proposals.
Officials continue to engage with Auckland Council on aspects of the reforms, including on
variations to the governance arrangements to respond to the council’s influence and accountability
concerns while remaining consistent with the Government’s reform proposals.
However, issues remain around a perceived loss of accountability and influence of water services
Information
outcomes and a lack of recognition of Auckland’s scale in Entity A. These issues have become
sticking points for the Mayor.
Action sought
Timeframe
Agree to the recommendations
18 August 2021
Official
Contact for telephone discussions (if required)
Name
Position
Contact Number
Suggested
the
1st contact
Mike Chatterley
Commercial & Financial
s 9(2)(a)
✓
Lead, Three Waters
Allan Prangnell
Executive Director, Three
021 865 809
Waters
under
Return electronic document to:
Mike Chatterley ([email address])
Cohesion document reference
3W2DU3RAJ5R2-1009474250-437
Ministerial database reference
LG202100979
Pages 3 - 7 and 9 - 12 have been removed as they are out of scope of the request
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Information redacted on pages 2 and 8 is also out of scope of the request
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Out of scope
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1982
Act
Information
5.
Instead, the Council is seeking to test several alternative reform structures including:
Official
the
under
5.5
alternatives to the proposed shared oversight with iwi/Māori such as using the
Out of scope
existing the Independent Māori Statutory Board or enabling iwi/Māori to
appoint direct representation to the water service entity board.
6.
These proposals represent a significant departure from Cabinet mandate and the
Government’s objectives relating to professional competency-based governance of
Released
Water Service Entities (WSEs). They are unlikely to achieve sufficient balance sheet
separation.
7.
The alternative iwi/Māori mechanisms proposed by Auckland Council are also difficult
to reconcile with the principles-based approach that have informed Government’s
decisions on three waters reform to date.
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Scenario 3: Alternative iwi/Māori representation and oversight
47.
Auckland Council have raised concerns about the proposed joint oversight with
iwi/Māori as an additional source of dilution of Auckland Council’s influence over
Entity A.
48.
The Council have raised alternatives such as using the existing Independent Māori
1982
Statutory Board or enabling iwi/Māori to appoint direct representation to the water
service entity.
49.
More recent communication from the Council has indicated that the Council isAct
balancing its representative responsibility to all ethnicities in Auckland - not just Māori.
50.
The Government’s proposals take a Treaty-based approach recognising the rights and
interests of iwi/Māori. These include a partnership approach to oversight of the
entities, with mana whenua sharing half of the representative positions with councils.
51.
The proposal for joint oversight is one of a range of mechanisms that will provide a
step change ability for iwi/Māori rights and interests to be protected and promoted as
part of the reforms.
52.
While iwi/Māori themselves are still engaging with the reform material it is
Information
noteworthy that one prominent Auckland iwi, Ngāti Whātua Ōrākei, has written to the
Council indicating support for the reform as an improvement over the current CCO
arrangements.
53.
The alternative mechanisms proposed by Auckland Council are difficult to reconcile
with the principles-based approach that has informed Government’s decisions on
Official
three waters reform to date.
54.
Using the existing Independent Māori Statutory Board mechanism would need to be
the
tested with iwi/Māori, including those in Northland, but are unlikely to be preferred
over the direct Kaupapa Māori approach proposed by Government.
55.
Council have expressed concern that a Kaupapa Māori approach may take time and
the Government’s reform proposals have provided for transition arrangements to
enable this time to be taken by iwi/Māori.
under
56.
The ability for iwi/Māori to directly appoint to the water service entity boards may
have some appeal for iwi/Māori. However, it would be a significant departure from
Government’s strong preference to have professional competency-based boards.
57.
The Government has already provided for Treaty Rights/Te Ao Māori/Matauranga and
Tikanga to be recognised as a statutorily required board competency for all water
service entities.
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Out of scope
1982
Act
Information
Official
the
under
Released
s 9(2)(a)
The Department of Internal Affairs
Te Tari Taiwhenua
Purpose
1.
We are seeking your feedback on an initial draft Cabinet paper:
Strengthening
representation, governance and accountability of new water services entities
(
Appendix A).
2.
The final paper is due to be considered by the Cabinet Economic Development
Committee (DEV) on 30 March 2022.
Context for, and overview of, draft Cabinet paper
1982
3.
In October 2021, a Working Group on Representation, Governance and Accountability
(Working Group), was established to report to you with recommendations for a
preferred strengthened approach to the governance framework for the new water
Act
services entities. You are due to receive the Working Group’s final report on 7 March
2022.
4.
It is intended that you will provide information on the Working Group report, and your
proposed response, in a Cabinet paper in March 2022. In particula , you will need to
seek decisions to make changes to the draft Water Services Entities Bill to address
many of the Group’s recommendations – if you wish to give effect to those
recommendations.
5.
The Department has received a draft of the Working Group’s report, and has started
Information
preparing a draft Cabinet paper on this basis. This is attached at
Appendix A, for your
feedback. We note that this is an initial dra t only, and it contains a number of
‘placeholders’ and areas for further work. In particular, we will be seeking to discuss
the Working Group’s recommendations with you before inserting details about the
proposed response.
6.
The draft Cabinet paper also reports back on “proposals for managing any risks to the
Official
reform programme associated with the delayed timetable, and for managing the
timing and funding of reform-related policy, legislation and transition work, including
potential alternative options for progressing the suite of legislation” [DEV-21-MIN-
the
0268].
7.
You were invited to report back in March 2022 on these matters, when DEV made
decisions to issue an exposure draft of the Water Services Entities Bill to the Working
Group (on 8 December 2021).
under the Official Information Act 1982
under
8.
The draft Cabinet paper sets out a suggested revised approach to the policy and
legislation timetable. This reflects the delay to the introduction of the Bill, but will still
enable delivery of the reforms within the intended timeframe. The approach aligns
with discussions with you, a briefing provided on 15 February 2022 [LG202200107],
and your stated preference to have the Bill ready for introduction in May 2022.
9.
The paper also seeks decisions that will enable certain funding issues and cost
pressures relating to the policy, legislation and transition work to be managed. Initial
Released
advice on this matter was provided to you and the Minister of Finance on 24 February
2022 [LG202200170]. Further advice is due to be provided on 11 March 2022. Once
decisions, relevant details would be included in the draft Cabinet paper.
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1982
Act
Information
Official
the
under
Released
The Department of Internal Affairs
Te Tari Taiwhenua
Recommendations
12.
We recommend that you
provide feedback on the attached draft
Yes/No
Cabinet paper,
Strengthening representation, governance and
accountability of new water services entities (
Appendix A), by Tuesday
8 March 2022.
1982
Act
Michael Mills
Acting Director – Policy and Stewardship
Hon Nanaia Mahuta
Minister of Local Government
Information
/
/
Official
the
under the Official Information Act 1982
under
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Appendix A – Initial draft Cabinet paper, Strengthening representation, governance
and accountability of new water services entities
Section 18(d) - Cabinet Paper: Strengthening representation, governance and accountability of the new
water services entities - 19 April 2022 - https://www.dia.govt.nz/diawebsite.nsf/
Files/Three-waters-reform-programme-2022/$file/Cabinet-Paper-Strengthening-
representation-governance-and-accountability-19-April-2022.pdf
1982
Act
Information
Official
the
under the Official Information Act 1982
under
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IN CONFIDENCE
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Document 6
Priority Urgentt
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
Title:
Revised draft Cabinet paper for review and Ministerial consultation: 1982
Strengthening representation, governance and accountability of the
new water services entities
Act
Date:
10 March 2022
Key issues
We are asking you to review the attached draft Cabinet paper,
Strengthening representation,
governance and accountability of the new water services entities (
Appendix A), and circulate it for
Ministerial consultation.
You received the final report of the Working Group on Representation, Governance and
Accountability on 7 March 2022. The attached draft Cabinet paper has been updated to reflect
further work to develop proposed responses to the report’s recommendations.
Information
The final paper is due to be considered by the Cabinet Economic Development Committee (DEV) on
30 March 2022, and will need to be lodged with Cabinet Office on 24 March 2022. To meet this
deadline, we suggest you circulate the paper to other Ministers on Friday 11 March 2022, and seek
feedback by 21 March 2022. The deadline for feedback aligns with the date of the next meeting of
Three Waters Ministers, which will discuss aspects of this paper.
There are still some elements of the draft Cabinet paper and Working Group response that are
Official
being developed, and may require conversations with you. We propose that an updated version of
the paper is provided to Three Waters Ministers as part of the pack of material for the meeting.
the
Action sought
Timeframe
Review the draft Cabinet paper (
Appendix A), and
agree to circulate it for
Friday 11 March 2022
Ministerial consultation.
Agree that the draft Cabinet paper can be shared – in confidence – with
the Joint Central/Local Government Three Waters Steering Committee, for
under
its meeting on Monday 14 March 2022.
Contact for telephone discussions (if required)
Name
Position
Contact Number
Suggested
1st contact
Michael Mills
Acting Director – Policy and Stewardship
021 533 086
✓
Jane Fleetwood
Lead Strategic Advisor
04 494 0564
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Return electronic document to:
Jane Fleetwood
Ministerial database reference
LG202200212
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Purpose
1.
We are seeking your agreement to review the attached draft Cabinet paper,
Strengthening representation, governance and accountability of the new water services
entities (
Appendix A), and circulate it for Ministerial consultation.
2.
The final paper is due to be considered by the Cabinet Economic Development
Committee (DEV) on 30 March 2022, and will need to be lodged with Cabinet Office on
24 March 2022.
3.
To meet this deadline – and provide the required amount of time for consultation – we1982
suggest you circulate the paper to other Ministers on Friday 11 March 2022, and seek
feedback by 21 March 2022. The deadline for feedback aligns with the date of the
next meeting of Three Waters Ministers, which will discuss aspects of this paper.
Act
4.
There are still some elements of the draft Cabinet paper that are being developed, and
may require conversations with you. We propose that an updated version of the
paper is provided to Three Waters Ministers as part of the pack of material for the
meeting.
Background and context
5.
In October 2021, a Working Group on Representation, Governance and Accountability
(Working Group), was established to report to you with recommendations for a
Information
preferred strengthened approach to the governance framework for the new water
services entities. You received the Working Group’s final report on 7 March 2022.
6.
It is intended that you will provide information on the Working Group report, and your
proposed response, in a Cabinet paper in March 2022. In particular, you will need to
seek decisions to make changes to the draft Water Services Entities Bill to address
many of the Group’s recommendations – if you wish to give effect to those
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recommendations.
7.
The draft Cabinet paper will also include “proposals for managing any risks to the
the
reform programme associated with the delayed timetable, and for managing the
timing and funding of reform-related policy, legislation and transition work, including
potential alternative options for progressing the suite of legislation” [DEV-21-MIN-
0268]. You were invited to report back in March 2022 on these matters, when DEV
made decisions to issue an exposure draft of the Water Services Entities Bill to the
under
Working Group.
8.
We provided you with an initial draft Cabinet paper on 4 March 2022, and had a
discussion with you about this paper and the Working Group report on 7 March 2022.
As indicated then, the paper still had a number of placeholders, pending receipt and
consideration of the final report, and decisions on other briefings.
9.
Since then, we have been doing further work to develop proposed responses to the
Working Group’s recommendations, and to add relevant information into the draft
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Cabinet paper. The main changes to the paper are in Part A, from pages 7 to 20.
These sections include substantive commentary on, and responses to, the majority of
the recommendations – covering the following areas:
9.1
Ownership;
9.2
Governance;
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9.3
Strengthening accountability – strategic direction; and the entity board;
9.4
Regional Representative Group, and sub-regional groups;
9.5
Entity constitution;
9.6
Strengthening community and local voice;
9.7
Balance sheet separation;
9.8
Te Mana o te Wai;
9.9
Strengthening Te Tiriti o Waitangi;
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9.10 Preserving iwi, hapū and Māori rights and interests in water;
9.11 Definition of mana whenua
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9.12 Resourcing to ensure iwi, hapū and Māori can participate in the new
arrangements;
9.13 The ongoing role of the Crown to support the new system, and
recommendation for a five-year review;
9.14 Recommendations for a Water Services Ombudsman;
9.15 Public communications.
10.
We have also provided briefings on the other matters that will be covered in the
Information
paper, relating to:
Out of scope
Official
Comment
11.
We are providing a revised version of the draft Cabinet paper, for your review and
comment (
Appendix A). Given the short timeframes for progressing this paper, we are
the
asking you to circulate it for Ministerial consultation on 11 March 2022. We will
address any further feedback you may have on the paper, and undertake agency
consultation, in parallel with the Ministerial consultation process.
12.
We suggest you also provide a copy of the Working Group’s report to other Ministers,
under
for information.
13.
There are still some areas of the paper and Working Group response that require
further work before these can be finalised. One particular area that we will seek to
discuss with you is the Working Group recommendation relating to ongoing Crown
funding support.
Out of scope
14.
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15.
You have convened a meeting with Three Waters Ministers on 21 March 2022, which
will focus largely on the response to the Working Group and the draft Cabinet paper.
Given the paper is continuing to be developed, we propose that an updated version is
provided to Three Waters Ministers as part of the pack of material for the meeting.
That pack is due to be circulated on Thursday 17 March 2022.
16.
We note that the draft Cabinet paper deals with the Working Group’s
recommendations thematically. We are also preparing a more detailed table setting
out suggested responses to each of the recommendations, which we will provide to
you next week. Once completed, this may be shared with other Ministers and/or
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appended to the Cabinet paper for information.
17.
We also note that the Treasury has raised a concern about seeking Cabinet agreement
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to proposals before the Department has tested whether they achieve balance sheet
separation with Standard & Poor’s (S&P), particularly given the earlier changes that
were incorporated into the draft Bill in late 2021.
18.
We are beginning to draft an Information Memorandum for S&P based on the
attached draft Cabinet paper, and anticipate finalising our engagement with them in
early May 2022. The Treasury will be consulted during this process.
19.
It is the Department’s opinion that the proposals can achieve balance sheet
separation, but some nuancing or modifications may be required to achieve balance
sheet separation. If modifications are required, we will advise you as we become
Information
aware of these issues, and will look to develop alternative options that preserve the
intent of the Working Group’s recommendations.
Next steps
20.
The proposed next steps for progressing the draft Cabinet paper are set out in the
Official
table below:
Key activities –
March 2022 Cabinet paper
Timing
the
Revised draft Cabinet paper circulated for Ministerial and agency
Friday 11 March to Monday 21
consultation
March
Discussion with Three Waters Ministers
Monday 21 March
Briefing seeking Minister’s agreement to lodge Cabinet paper
Tuesday 22 March
under
Cabinet paper lodged with Cabinet Office
By 10am on Thursday 24 March
Cabinet paper considered by DEV
Wednesday 30 March
Cabinet consideration / confirmation
Monday 4 April
21.
The Joint Central/Local Government Three Waters Steering Committee is holding its
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next meeting on Monday 14 March 2022, and the Working Group report is an agenda
item for that meeting. We would like to share the attached version of the draft
Cabinet paper with members of the Committee – in confidence – to provide visibility
over the proposed response to the Working Group’s recommendations (with
appropriate caveats around the ‘draft’ nature of the response).
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Recommendations
22.
We recommend that you:
a)
review the draft Cabinet paper,
Strengthening representation,
Yes/No
governance and accountability of the new water services entities
(
Appendix A), and
agree to circulate this paper for Ministerial
consultation on 11 March 2022 (with a deadline for feedback of
21 March 2022) – along with a copy of the Working Group report,
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for information;
b)
note that the Department is continuing to work on the draft
Cabinet paper and suggested response to the Working Group
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report, and will provide an updated version of the paper as part of
the pack of material for the meeting of Three Waters Ministers on
21 March 2022;
c)
agree that the attached version of the draft Cabinet paper can be
Yes/No
shared – in confidence – with the Joint Central/Local Government
Three Waters Steering Committee, for its meeting on Monday
14 March 2022.
Information
Official
Michael Mills
Acting Director – Policy and Stewardship
the
Hon Nanaia Mahuta
under
Minister of Local Government
/
/
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Appendix A: Draft Cabinet paper – Strengthening representation, governance and
accountability of the new water services entities
Section 18(d) - Cabinet Paper: Strengthening representation, governance and accountability
of the new water services entities - 19 April 2022 - https://www.dia.govt.nz/diawebsite.nsf/
Files/Three-waters-reform-programme-2022/$file/Cabinet-Paper-Strengthening-
representation-governance-and-accountability-19-April-2022.pdf
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Information
Official
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under
s 9(2)(a)
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The Department of Internal Affairs
Te Tari Taiwhenua
Purpose
1.
We have prepared a draft slide pack to support the meeting of Three Waters Ministers
on 21 March 2022 (
Appendix A).
2.
We are seeking your feedback on these slides by midday on 16 March 2022. We will
then make any revisions and return the final pack to your office, for circulation to
other Three Waters Ministers on 17 March 2022.
Overview of the draft slide pack for the 21 March 2022 meeting
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3.
As outlined in the attached draft slide pack (
Appendix A), the proposed agenda for this
meeting covers:
3.1
Item 1: Draft Cabinet paper – proposed response to Working Group report.
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3.2
Item 2: Overview of policy and legislative timetable.
3.3
Item 3: Overview of transition and establishment timetable
3.4
Item 4: Communications and next steps.
4.
As discussed with you at the meeting with Local Government officials earlier today, the
focus of the meeting will be the first item – particularly key aspects of the response to
the Working Group report. Slides 4 to 10 summarise the main recommendations and
proposed responses in relation to:
Information
4.1
ownership;
4.2
governance and accountability;
4.3
Te Mana o te Wai;
4.4
strengthening the application of Te Tiriti o Waitangi;
Official
4.5
other matters relating to iwi / Māori rights and interests.
5.
We are continuing to work on the draft Cabinet paper,
Strengthening representation,
the
governance and accountability of the new water services entities. As indicated in our
briefing on 11 March 2022 [LG202200212], it is envisaged that the latest version of
that paper will be provided for distribution with the final package of material, for
information.
6.
The slide pack also includes two timeline diagrams – covering the policy and legislative
under the Official Information Act 1982
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timetable, and the timetable and critical decision points for Ministers relating to the
transition.
7.
We will provide you with an annotated agenda and talking points in advance of the
meeting, including an update on operational transition matters.
Recommendations
8.
We recommend that you:
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a)
review the attached draft slide pack for the meeting of Three
Yes/No
Waters Ministers on 21 March 2022 (
Appendix A), and provide
any feedback by 16 March 2022;
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b)
note that the information in the slide pack is supplemented by a
draft Cabinet paper – the next version of which will be provided
for distribution to Three Waters Ministers with the final package
of material.
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Act
Michael Mills
Acting Director – Policy and Stewardship
Hon Nanaia Mahuta
Minister of Local Government
/
/
Information
Official
the
under the Official Information Act 1982
under
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Appendix A: Draft slide pack for 21 March 2022 meeting of Three Waters Ministers
Attached
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Information
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the
under the Official Information Act 1982
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Document 7A
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Three Waters Reforms
Information
Meeting of Three Waters Ministers
21 March 2022
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Agenda
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1. Draft Cabinet paper – proposed response to Working Group report
2. Overview of policy and legislative timetable
3. Transition and establishment timetable
4. Communications and next steps
Information
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2
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1: Draft Cabinet paper – proposed response to Working
Information
Group report
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Key areas covered by Working Group report
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Act
• The Working Group developed a set of
47 recommendations to enhance the reform proposals and deliver
stronger representation, governance and accountability.
• These recommendations cover the fol owing main areas:
•
A public shareholding structure that makes community ownership clear, with shares held by councils on behalf of their
communities – to provide a tangible expression of ownership that is recognisable by communities and territorial
authorities, and to strengthen protections against privatisation Information
•
Embedding co-governance principles across the water services framework with the aim of ensuring the continued
improvement of three waters service delivery and environmental protection through increased representation of
communities, including iwi/hapū
•
Recognising and embracing Te Mana o te Wai as an underlying principle, and as the foundation for a more sophisticated
and integrated approach to providing first class drinking water, wa
Official stewater and stormwater networks
•
Tighter accountability from each water services entity board to the community – including strengthening and clarifying
the role of the Regional Representative Group (RRG)
the , and seeing the RRG approve entity strategic direction, as set out in
the Statement of Intent
•
Strengthened connection to local communities so that they have a clear and guiding voice in drinking water, wastewater
and stormwater network development – including sub-committees feeding into the RRG, comprised of representatives of
regional communities, to ensure local voice is
under considered as part of investment prioritisation. The number and geographic
area of each sub-group would be set out in entity constitutions, rather than in primary legislation
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Overview of proposed response
1982
Act
•
The draft Cabinet paper proposes most of the recommendations would be taken forward in some form and
seeks agreement to include changes in the Water Services Entities Bil
•
Key changes / decisions relate to:
•
Ownership
Information
•
Governance and accountability
•
Te Mana o te Wai
•
Strengthening the application of Te Tiriti o Waitangi
•
Other matters relating to iwi/Māori rights and interests
Official
•
For each of these key areas, the fol owing slid
the
es set out:
•
A summary of the Working Group recommendations
•
The existing arrangements provided for in the exposure draft of the Water Services Entities Bil
•
The proposed response, and changes to the Bil (if required)
under
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Ownership
1982
Act
Summary of Working Group recommendations
• Introduce a shareholding model with one share per 50,000 of population, rebased every five years to provide communities with
a tangible expression of ownership
• Shareholdings only carry voting rights in relation to merger or sale proposals and must carry a unanimous vote – to preserve
balance sheet separation, there is no financial interest attached
Existing arrangement in exposure draft
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• The Bil establishes a new form of statutory entity that provides for collective ownership by territorial authorities in the entity
service area
Proposed response / changes to the Bil
Official
• Amend the Bil to give effect to the Working Group’s recommendations such that ownership wil be reflected through a
shareholding, and shares are issued for each entity to the respective councils based on population
the
• Add a further level of protection against privatisation by requiring a 75 per cent Parliamentary majority to make any legislative
changes necessary to enable privatisation (‘entrenchment’)
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Governance and accountability
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Summary of Working Group recommendations
Act
• There are several recommendations to strengthen the governance and accountability. In particular, the Group recommends:
• strengthening co-governance arrangements through the introduction of co-chairs to the Regional Representative Group (RRG) and consensus
voting
• introducing ‘sub’ regional representative groups to provide regional/catchment level input into the RRG, while maintaining co-governance
• clarifying the role of the RRG and the range of inputs it may consider to strengthen accountability (example inputs include: the Government
Policy Statement, direction from regulators, local community priorities within the region as outlined in council strategic documents, Te Mana
o te Wai statements, and alignment with the Resource Management Act (or its replacement))
• that each entity wil be required to fund the support to its RRG to properly exercise its functions and po
Information wers, including anyremuneration
arrangements for territorial authority or iwi/hapū representatives
• the RRG issues the statement of strategic and performance expectations and has approval rights over strategic matters in the statement of
intent
Existing arrangement in exposure draft of the Bil
Official
• The Bill currently provides explicitly for a number of accountability arrangements, but also implicitly enables flexibility for RRGs to
self organise by not requiring particular measures (for example, sub RRGs are not expressly prohibited and were expected to be a
the
feature of RRGs as provided for in entity constitutions)
Proposed response / changes to the Bil
•
Amend the Bil to give effect to the Group’s recommendations – as set out above – in a way that provides for flexibility (likely
under
via entity constitutions), such that the unique characteristics of each entity can be provided for over time
Note that approval rights over the Statement of Intent are being considered further to ensure the balance of control by the RRG and
operational independence of the board to achieve balance sheet separation
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Te Mana o te Wai
1982
Te Mana o te Wai to apply to al functions and powers
•
Summary of Working Group recommendations – Te Mana o te Wai is a korowai, or overarching requirement, that applies to everything in the Bill
Act
•
Existing arrangement in exposure draft of the Bil – The duty to give effect to Te Mana o te Wai is one of several objectives of an entity, which would be able to “trade it
off” or give Te Mana o te Wai a lesser priority. This was never the intention of the legislation, and is not consistent with the approach taken elsewhere
Proposed response / changes to the Bil
•
Amend the Bil so al those who have functions, powers and duties (under the Bil ) must give effect to Te Mana o te Wai in the discharge of those functions, powers
and duties. This is consistent with the Water Services Act 2021, and is also consistent with the approach taken in the National Policy Statement for Freshwater
Management (NPS), which applies Te Mana o te Wai to all aspects of water management
•
Accountability for Te Mana o te Wai statements should become explicit through the strategic planning and accountability documents that relate to a water services
entity, based on existing requirements relating to the annual report
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Te Mana o te Wai should apply to al water
•
Summary of Working Group recommendation – Te Mana o te Wai applies to all water for the purpose of the three waters system.
Official
•
Existing arrangement in exposure draft – Te Mana o te Wai is defined as having the same meaning as under the NPS. However, the NPS only relates to specific parts of
freshwater bodies. Three waters services, in contrast, relate with other waters (including marine, estuarine and harbours, and rivermouths). This creates an obvious gap in
the
the application of this concept to three waters services, as many iwi and hapū have Te Mana o te Wai aspirations for water that are not fully covered by the NPS.
Proposed response / changes to the Bil –
Agree to this recommendation in principle, and propose to incorporate any changes in legislation through the second bil that wil implement water services reform. This
recommendation requires a whole of system view. Before it can be incorporated in legislation, it wil be necessary to ensure that concepts are properly aligned across a
under
range of areas, including the resource management system and proposals for its reform.
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Strengthening the application of Te Tiriti o Waitangi 1982
Principles of Te Tiriti to apply to al functions and powers
Act
•
Summary of Working Group recommendation – The requirement to give effect to Te Tiriti should apply equal y to the Crown, including when it makes a Government
Policy Statement, where engagement with Te Tiriti partners should be elevated above any consultation processes.
•
Existing arrangement in exposure draft of the Bil – Te Tiriti does not apply to any functions exercised by Minister. In addition, while there is a duty on the board to ensure
that an entity has “capacity and capability” to give effect to the principles of Te Tiriti, entities are explicitly not part of the Crown. This creates ambiguity, as it is not clear
how Te Tiriti o Waitangi applies to the entities.
Proposed response / changes to the Bil
•
Amend the Bil to require al persons who exercise functions, duties and powers under the Act to give effect to the principles of Te Tiriti o Waitangi, to the extent that it
applies to their duties, functions and powers. This wil ensure there is consistent application of Te Tiriti across the new regime and wil give effect to these
Information
recommendations.
Note: This approach is consistent with clause 6 of the exposure draft of the Natural and Built Environments Bil , which requires that “all persons exercising powers and
performing functions and duties under this Act must give effect to the principles of Te Tiriti o Waitangi”. This includes functions and powers exercised by both the Minister (such
as making national planning frameworks) and regional councils in their planning and environmental regulation role.
Preserving iwi, hapū and Māori rights and interests in waterOfficial
•
Summary of Working Group recommendation – The Bil should state that nothing in the Act creates or transfers ownership in water, or limits, extinguishes or adversely
affects iwi or hapū authority over, or rights in, water. This recommendation is based on the same ongoing concerns that have been articulated over a long period by iwi /
the
Māori about the implications of the three waters reform for ownership of water. The intention of the Working Group is to ensure that the status quo is preserved while the
Crown and Te Tiriti partners continue their ongoing discussion about al ocation of freshwater in the context of resource management reform
•
Existing arrangement in exposure draft of the Bil – There is no provision to this effect in the legislation.
Proposed response /changes to the Bil
under
•
Include a clause of this nature in the Bil
•
Note that this clause wil require work between agencies to ensure it is legally certain and does not have unintended consequences. I am therefore seeking agreement that
the Minister of Local Government, Attorney General, and Minister for Māori – Crown Relations should have delegated authority to draft this clause, and report back to the
Cabinet Legislation Committee when the Bil is proposed for introduction.
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Other matters relating to iwi/Māori rights and interests1982
Ensure Treaty settlements are enduring
Act
•
Summary of Working Group recommendation – legislation includes provisions to ensure that Treaty settlements are enduring and carried forward under the new regime.
•
Existing arrangement in exposure draft of the Bil – This recommendation wil be implemented by provisions across the two bil s. The exposure draft contains provisions
stating that where there is inconsistency between a Treaty settlement and the Act, the Treaty settlement prevails. There is also an operating principle requiring entities to
give effect to Treaty settlements. In the second bil , there would be provisions amending Treaty settlement legislation to ensure settlement obligations are carried forward
from territorial authorities to the new water services entities, along with any other arrangements between councils and mana whenua.
Proposed response
•
Accept this recommendation, based on existing policy settings.
Information
Definition of mana whenua
•
Summary of Working Group recommendation – Inclusion of a definition of “mana whenua” in the Bil .
•
Existing arrangement in exposure draft of the Bil – Mana whenua is currently not defined. This could lead to future debate, and potential y legal chal enge, about who has
the right to elect representatives to the Regional Representative Group. It might also lead to disputes about who has the right to make a Te Mana o te Wai Statement
Official
Proposed response
•
Amend the Bil so that mana whenua wil be defined as the iwi or hapū holding and exercising customary rights, interests and authority in accordance with tikanga in an
identified area.
the
Resourcing to ensure iwi, hapū and Māori can participate in the new arrangements
•
Summary of Working Group recommendation – That the Crown provides equitable resourcing to enable the full and effective participation of iwi and hapū in the three
waters regime. The Working Group’s priority for this recommendation is to ensure there is proper resourcing
under
Proposed response
•
Implement a two-stage funding arrangement, where the Crown funds participation by iwi and hapū through the transition period, and entities fund following full
establishment. Funding to support iwi/Māori to participate in transition is subject to decisions by Cabinet
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2: Overview of policy and legislative timetable
Information
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The reforms involve three bil s, and further policy decisions
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•
The first Water Services Entities Bil (Bil 1) establishes the water services entities, and sets out their governance and
Act
accountability arrangements
• This Bil would include the provisions in the current exposure draft and the changes proposed in response to the Working Group
report (subject to Cabinet agreement through the paper outlined earlier)
•
The second bil (Bil 2) wil amend the first bil to provide the entities’ detailed functions, duties, and powers
•
For Bil 2, policy decisions wil be sought (in May 2022) in relation to:
• pricing and charging for drinking water, wastewater and stormwater services
Information
• financing arrangements for the entities
• provisions for upholding Treaty settlement arrangements
• the entities’ involvement in the existing resource management and planning system (noting that consequential amendments are
likely to be required to give effect to the entities’ involvement in any reformed resource management system)
• land access provisions for utility infrastructure
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• obligations on the new entities as service providers
• stormwater management responsibilities
the
• the legislative mechanism for the transfer arrangements
• transitioning out of bylaws, customer agreements, and trade waste management
• enforcement, offences, and penalties
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•
The water services entities wil not be able to commence operations until both bil s have been enacted
•
There wil also be economic regulation and consumer protection legislation, led by the Minister of Commerce and
Consumer Affairs, and MBIE – this wil be discussed further at a future meeting of Three Waters Ministers
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Indicative legislative timetable*
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*Timetable is indicative only, and subject to Ministerial and Cabinet decisions and House time
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Technical advisory groups and Taumata Arowai
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• Resource management and planning alignment, and regulatory compliance costs for rural water schemes, are
important issues for councils
• The Department of Internal Affairs has established two technical working groups to inform the development of
policy:
•
Planning Technical Working Group – to support the development of policy proposals to ensure there is an effective
interface between the proposed water services entities and the planning and regulatory system
•
Rural Supplies Technical Working Group – to bring a rural perspective to the developm
Information ent of policy to implement the
water services reforms, including the obligations water services entities wil have to support rural water schemes and the
communities they serve
• The
Rural Supplies Technical Working Group is also considering issues for rural water schemes relating to the
regulation of drinking water, which
Taumata Arowai wil take in
Official to account in its implementation of the Water
Services Act 2021 – including proposals for how to simplify compliance
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This out of scope information has been redacted
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Information
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4: Communications strategy and next steps
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Communications about the reforms
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•
The Working Group recommended the Crown undertake a positive communications campaign to explain the ‘need for change’,
expectations of how we best ensure the health of our wai, and the opportunities provided by the reforms
Act
• This aligns with the existing communications strategy and there are opportunities to amplify this work
•
The focus is building public understanding of the case for change and benefits of reform, and working alongside key stakeholders to shift
public knowledge
•
Ministers have a leadership role to play in communicating the benefits of three waters reform – for example, I intend to run a range of
community meetings throughout New Zealand to inform and educate communities on this
•
The overarching communications and engagement activities from the Department of Internal Affairs will focus on:
Information
• continuing to increase awareness of the reforms and the case for change with those that are yet to engage with the reforms on a basic level
• engaging and informing those who are undecided, unconvinced, or have remaining concerns about the reforms
•
Ongoing activities include:
Official
• upgrading the ThreeWaters.govt.nz website – shifting from a campaign-focused website to a fact-based hub of accessible information
• traditional paid and organic print and digital media, and social media – focusing on amplifying the case for change and countering
the
misinformation, with a public cal to action to find out more about the reforms
• proactive media briefings, reactive statements, and work with a broader range of media outlets, including Māori media
• developing a range of evidence-based col ateral, such as factsheets, presentation templates and Q&As
under
• continuing to work with local government leadership in Taituarā and Local Government New Zealand
IN CONFIDENCE - NOT GOVERNMENT POLICY
18
Released
Next steps – policy and legislation
1982
Bill 1:
Act
•
30 March 2022 – DEV considers Cabinet paper, including proposed response to Working Group recommendations
•
Public announcement / communications about decisions – prior to Easter
•
If agreed, officials wil work with Parliamentary Counsel Office during April 2022 to make drafting changes to the Bil
•
In early May 2022 – LEG considers request to introduce the Bil (subject to the completion of further testing with
Standard and Poor’s of the amended structure proposed in the Bil )Information
•
The Bil wil be ready for its first reading and referral to select committee later in May 2022 – with a view to it being
reported back to the House in November 2022 and enacted by the end of 2022
Bill 2:
Official
•
April 2022 – Further meeting(s) of Three Waters Ministers
the
•
May 2022 – DEV considers suite of papers seeking decisions on remaining policy matters
•
September 2022 – LEG considers request to introduce the Bil
under
IN CONFIDENCE - NOT GOVERNMENT POLICY
19
Released
Document 8
Priority Urgent
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
Title:
Annotated agenda for 21 March 2022 meeting of Three Waters
1982
Ministers
Date:
17 March 2022
Act
Key issues
You are chairing a meeting of Three Waters Ministers on 21 March 2022. We have prepared an
annotated agenda, including talking points, to guide you through the meeting (
Appendix A). This is
based on the agenda and slide pack that were circulated in advance of the meeting.
The focus of discussions will be on the first of the agenda items – the response to the Working
Group recommendations. This item is supported by a draft of the Cabinet paper,
Strengthening
representation, governance and accountability of the new water services entities.
You have also indicated that you would like to discuss select committee arrangements for the three
Information
waters legislative programme. We have added some points on this to the annotated agenda, under
item 2 (overview of policy and legislative timetable).
Action sought
Timeframe
Note the information in this briefing, and
refer to the annotated agenda
By 4pm on Monday
(
Appendix A) during the meeting with Three Waters Ministers.
21 March 2022
Official
Contact for telephone discussions (if required)
the
Name
Position
Contact Number
Suggested
1st contact
Nick Davis
Executive Director, Three Waters 021 508 183
✓
Reform
Jane Fleetwood
Lead Strategic Advisor
s 9(2)(a)
under
Return electronic document to:
Jane Fleetwood
: [email address]
Ministerial database reference
LG202200264
Released
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The Department of Internal Affairs
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Purpose
1.
You are chairing a meeting of Three Waters Ministers on 21 March 2022. We have
prepared an annotated agenda, including talking points, to guide you through the
meeting (
Appendix A). This is based on the agenda and slide pack that were circulated
in advance of the meeting.
Overview of agenda and matters to be covered in the meeting
2.
The agenda for this meeting covers:
1982
2.1
Item 1: Draft Cabinet paper – proposed response to Working Group report.
2.2
Item 2: Overview of policy and legislative timetable.
Act
2.3
Item 3: Overview of transition and establishment timetable.
2.4
Item 4: Communications and next steps.
3.
We anticipate the focus of discussions will be on the first item – the response to the
Working Group recommendations. There may be an overlap between this discussion,
and in the approach to communication of the next steps of the reforms (item 4).
4.
There are many components to the Working Group response, as detailed in the draft
Cabinet paper. The slides and annotated agenda cover some of the key points.
5.
Ministerial consultation on the draft Cabinet paper is currently underway, and the
Information
deadline for feedback is the day of this meeting. An updated version of this paper was
provided to Ministers with the pack of material for the meeting.
6.
You have also indicated that you would like to discuss select committee arrangements
for the three waters legislative programme. We have added some points on this to the
annotated agenda, under item 2. Official
7.
Officials will be available to provide further information on any of the agenda items.
Please refer to Nick Davis in the first instance.
the
Recommendations
8.
We recommend that you
note the information in this briefing, and refer to the
annotated agenda (
Appendix A) during the meeting with Three Waters Ministers on
21 March 2022.
under
Nick Davis
Released
Executive Director, Three Waters Reforms
Hon Nanaia Mahuta
Minister of Local Government
/
/
IN CONFIDENCE
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The Department of Internal Affairs
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Appendix A: Annotated agenda for 21 March 2022 meeting of Three Waters
Ministers – below
1982
Act
Information
Official
the
under
Released
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The Department of Internal Affairs
Te Tari Taiwhenua
Annotated agenda for meeting of Three Waters Ministers on 21 March 2022
1982
Item
Notes / talking points for Minister of Local Government
Actions for Ministers
Act
1. Draft Cabinet
(A) Ownership (Slide 6)
•
Indicate levels of comfort with the proposed
paper –
•
response
The shareholding model provides a tangible form of ownership that communities and
proposed
councils are familiar with
•
Ask questions / raise concerns about any
response to
aspects of the response
Working Group
• The voting rights attached to shares provide an additional level of protection against
report
privatisation and also help to preserve balance sheet separation
• The entities remain statutory entities, and are not council-controlled organisations
Information
Official
the
under
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The Department of Internal Affairs
Te Tari Taiwhenua
1982
Item
Notes / talking points for Minister of Local Government
Actions for Ministers
(B) Governance and accountability (Slide 7)
•
Indicate levels of comfort with the proposed
Act
•
response
A number of recommendations relate to governance and accountability
• Many of these align with our policy intent, or look to legislate for behaviour that
•
Ask questions / raise concerns about any
would be considered best practice
aspects of the response
• I am proposing that we adopt the majority of the Group’s recommendations, either in •
Note that the arrangements in the Bill will be
full or with some minor modifications to ensure ongoing flexibility
assessed by Standards & Poor’s before it is
• The key changes are set out in the slides – of particular note are proposals to:
introduced into Parliament to confirm balance
sheet separation between water services
o clarify and strengthen the role of the regional representative group in bringing
entities and territorial authorities
together community interests and translating those to strategic direction for
the entities
•
In respect of regional representative group
Information
approval rights over the statement of intent
o introduce co-chairs to the regional representative group, and consensus
approval – test Ministers’ comfort with
voting to re-enforce the co-governance model
possible variations
o introduce ‘sub’ regional representative groups
• Variations could include:
• Regional representative group approval rights over the statement of intent is an area
o providing that the final statement of
where further work is needed
intent must include the board’s
•
Official
This may have practical implications for the degree of operational autonomy of the
response to the regional representative
board, and could potentially risk balance sheet separation – I propose this is tested
group’s comments; OR
with Standard & Poor’s prior to the introduction of the Bill
o provisions that set out a process for
the
• I note that the Working Group has proposed a bespoke arrangement for the
resolving disagreements between the
composition of the regional representative group for Entity A (Auckland/Northland)
regional representative group and
• I am proposing to proceed with this approach – which would comprise four Auckland
water services entities in relation to the
Council representatives, four Tāmaki Makaurau mana whenua representatives, one
statement of intent
council representative for each of the other councils, and three mana whenua
under
representatives from Te Tai Tokerau
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The Department of Internal Affairs
Te Tari Taiwhenua
1982
Item
Notes / talking points for Minister of Local Government
Actions for Ministers
(C) Te Mana o te Wai (Slide 8)
•
Indicate levels of comfort with the proposed
Act
•
response
I am proposing to adopt the Working Group’s recommendation that Te Mana o te Wai
is elevated to apply to all functions and powers in the Bill – a korowai
•
Ask questions / raise concerns about any
aspects of the response
o If agreed, this change will be implemented in the first bill
• I am proposing to adopt, in principle, the recommendation that Te Mana o te Wai
applies to all water for the purpose of the three waters system, and not just
freshwater
o If agreed, this change would be implemented in the second bill, following
further cross-agency work to ensure concepts are properly aligned with
broader environmental regulation
Information
• If this does not occur, entities will not have the same responsibilities where
wastewater or stormwater discharges to a rivermouth, an estuary, a harbour, or the
coast, and mana whenua will not be able to use Te Mana o te Wai statements to
convey their aspirations for these waterbodies
• There are numerous examples where this happens – Wairoa rivermouth is a coastal
Official
wastewater discharge; Moa Point in Wellington is a coastal wastewater discharge
the
under
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The Department of Internal Affairs
Te Tari Taiwhenua
1982
Item
Notes / talking points for Minister of Local Government
Actions for Ministers
(D) Te Tiriti o Waitangi (Slide 9)
•
Indicate levels of comfort with the proposed
Act
•
response
The Working Group recommended enhancements to the way Te Tiriti applies across
the three waters services system
•
Ask questions / raise concerns about any
•
aspects of the response
I am proposing to amend the Bill to require all persons who exercise functions, duties
and powers under the Act to give effect to the principles of Te Tiriti o Waitangi
• This approach is consistent with clause 6 of the exposure draft of the Natural and Built
Environments Bill, and will ensure there is consistent application of Te Tiriti across the
water services delivery system
• The Working Group also recommended the Bill should include a clause preserving the
status quo for iwi and Māori rights and interests in water. (A similar clause has been
Information
proposed by Te Tai Kaha Māori Collective for resource management reform.)
• I am proposing to include a clause of this nature in the Bill
• I will work with the Attorney General and Minister for Māori–Crown Relations to
ensure the clause is legally certain and does not have unintended consequences, and
will report back when the Bill is proposed for introduction
Official
the
under
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Released
The Department of Internal Affairs
Te Tari Taiwhenua
1982
Item
Notes / talking points for Minister of Local Government
Actions for Ministers
(E) Other matters relating to iwi/Māori rights and interests (Slide 10)
•
Indicate levels of comfort with the proposed
Act
•
response
The Working Group proposed a definition of mana whenua, which is the iwi or hapū
holding and exercising customary rights, interests, and authority in accordance with
•
Ask questions / raise concerns about any
tikanga in an identified area
aspects of the response
• I am proposing to adopt this recommendation. This will minimise the future risk of
legal challenge and dispute about who has rights as mana whenua under the Bill
• The Working Group recommended the Crown provides equitable resourcing to enable
the full and effective participation of iwi and hapū in the three waters regime
• I propose a two-stage funding arrangement, where the Crown provides support to iwi
and hapū through the transition period, with entities providing funding following full
Information
establishment
Official
the
under
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Released
The Department of Internal Affairs
Information redacted is out of scope
Te Tari Taiwhenua
1982
Act
Information
Official
the
under
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Information redacted is out of scope
The Department of Internal Affairs
Te Tari Taiwhenua
1982
Act
Information
Official
the
under
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The Department of Internal Affairs
Te Tari Taiwhenua
1982
Item
Notes / talking points for Minister of Local Government
Actions for Ministers
4. Communications (A) Communications
•
Note the communications strategy – including
Act
and next steps
•
that Ministers have a leadership role to play in
The Working Group recommended the Crown undertake a ‘positive communications
(Slides 18-19)
communicating the benefits of three waters
campaign’ to explain the case for change and benefits of reform
reform
• This aligns with the existing communications strategy and there are opportunities to
amplify this work – as outlined in slide 18
•
It is proposed that public announcements about the Government response to the
Working Group report would be made prior to Easter – following decisions on the
Cabinet paper
•
The local government sector and iwi are keenly anticipating the Government’s
announcements, and there is a general desire for certainty as to the next steps in
Information
the reforms
(B) Next steps
• Subject to Cabinet decisions, the intent is to have the first bill ready for introduction in
May 2022
•
Official
Decisions relating to the second bill – and the economic regulation and consumer
protection framework – will be sought in May 2022
the
under
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Released
Document 9
Priority Urgentt
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
Title:
Agreement to lodge Cabinet paper – Strengthening representation, 1982
governance and accountability of the new water services entities
Date:
22 March 2022
Act
Key issues
We seek your agreement to lodge the attached Cabinet paper,
Strengthening representation,
governance and accountability of the new water services entities (
Appendix A), for consideration by
the Cabinet Economic Development Committee on 30 March 2022. If you agree, the paper will
need to be lodged with Cabinet Office by 10am on Thursday 24 March 2022.
We are still undertaking final review and proofreading processes, which may result in minor drafting
changes before the paper is lodged.
Information
Action sought
Timeframe
Authorise the Department of Internal Affairs to upload the Cabinet paper,
By 8:30am on
Strengthening representation, governance and accountability of the new
Thursday 24 March
water services entities (
Appendix A), and attachment, onto CabNet,
2022
subject to final drafting amendments, and addressing any final comments
you may provide on the paper.
Official
Contact for telephone discussions (if required)
Name
Position
Contact Number
Suggested
the
1st contact
Michael Mills
Acting Director
021 533 086
✓
Jane Fleetwood
Lead Strategic Advisor
s 9(2)(a)
under
Return electronic document to:
Jane Fleetwood
Ministerial database reference
LG202200270
Released
IN CONFIDENCE
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The Department of Internal Affairs
Te Tari Taiwhenua
Purpose
1.
We are seeking your agreement to lodge the Cabinet paper,
Strengthening
representation, governance and accountability of the new water services entities
(
Appendix A), with Cabinet Office, through the CabNet system.
2.
If you agree, the paper will need to be lodged by 10am on Thursday 24 March 2022,
for consideration by the Cabinet Economic Development Committee on 30 March
2022.
1982
Context
3.
On 7 March 2022, you received the report from the Working Group on Representation,
Governance and Accountability (Working Group), with recommendations for aAct
preferred strengthened approach to the governance framework for the new water
services entities.
4.
It is intended that your proposed response to the Working Group report will be
provided in a Cabinet paper in March 2022. In particular, this paper will seek decisions
to make changes to the draft Water Services Entities Bill to address most of the
Group’s recommendations.
5.
We provided you with an initial draft Cabinet paper on 4 March 2022, and had a
discussion with you about this paper and the Working Group report on 7 March 2022.
Information
6.
You received a further draft on 10 March 2022, which was circulated for Ministerial
consultation. Agency consultation occurred in parallel.
7.
An updated version of the draft paper was provided to your office on 15 March 2022,
for circulation to Three Waters Ministers with other material for the meeting on 21
March 2022.
Official
8.
We note that Hon James Shaw’s office provided a couple of minor comments on the
paper. These suggest that the National Adaptation Plan and Emissions Reduction Plan
should be considered in relation to future work on the definition of Te Mana o te Wai,
the
and in relation to the ‘accountability’ arrangements for the water services entities
(particularly strategic direction setting).
9.
We will discuss this further with the Ministry of the Environment. Our initial view is
that these Plans could be considered in relation to the work on Te Mana o te Wai for
under
the second bill, as part of ensuring a ‘whole of system’ view. We suggest that the
relationship between these Plans and the accountability framework is best dealt with
through the Government Policy Statement. The draft Water Services Entities Bill
already includes provisions that enable expectations in relation to “climate change
mitigation and adaptation” to be set in that Statement.
Recent changes to the paper
10.
The attached version of the draft Cabinet paper now has all the remaining sections
Released
completed, including the substantial ‘financial implications’ section and associated
recommendations. The details in that section correspond with the decisions you and
the Minister of Finance made in relation to recent advice on funding pressures.
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The Department of Internal Affairs
Te Tari Taiwhenua
11.
We have also prepared a new attachment to the draft paper, which is a table listing all
of the Working Group recommendations (in numerical order) and the corresponding
Cabinet paper recommendations. We consider this could be a helpful way for
Ministers to easily navigate through the proposed response to all of the
recommendations. A draft of this table is attached for reference.
12.
The paper’s references to shareholding have been updated to clarify that there would
be a one share minimum for all territorial authorities, following comments on this
matter from the Minister for Rural Communities. This is the intent of the Working
Group, when it refers to “one share for each 50,000 people, rounded up” in the report.1982
13.
The paper has also been updated to include references to the statement of support
provided by the iwi representatives on the Working Group. The statement of support
Act
proposed three additional measures which, while consensus could not be reached, the
iwi representatives on the Group believed would result in better outcomes for
communities.
14.
These measures are discussed on pages 19 to 22 of the draft Cabinet paper,
particularly in the section on ‘Strengthening Te Tiriti o Waitangi’. There are
recommendations seeking agreement to two of the proposed measures, relating to
consensus decision making, and the application of Te Tiriti o Waitangi to all persons
who exercise functions and powers under the Bill.
15.
We have also made a few changes to the aspects of the paper that deal with the
Information
Working Group recommendation that the regional representative group should have
power to approve the strategic direction of the water services entity in its statement of
intent. This is dealt with on page 13 and in recommendations 32 to 35.
16.
This was an area of particular interest – and potential concern – to the National
Transition Unit Board. Ministers are also interested in any matters that may
Official
compromise balance sheet separation – as highlighted by the Minister of Housing, for
example, in the recent meeting with Three Waters Ministers.
17.
The Cabinet paper seeks agreement to amend the Bill so that the regional
the
representative group will have power to approve the strategic direction of the entity in
its statement of intent. However, the paper also notes that it will be necessary to
consider how best to give effect to the Working Group’s recommendation, while
preserving balance sheet separation, through testing the proposal with Standard &
under
Poor’s.
18.
The paper further notes that, if the Working Group’s recommendation is found to
compromise balance sheet separation, officials will engage on alternative ways to give
effect to this recommendation to preserve balance sheet separation. This includes
consideration of the Working Group’s alternative (fall back) suggestion that the
constitution sets out a process for resolving any differences in opinion regarding
content with the board.
Released
19.
The paper seeks delegated authority for you to make further decisions relating to
these matters, during the legislative drafting process – following further advice.
20.
Finally, there has been a minor change to the part of the paper that deals with the
Working Group recommendation for a clause that preserves iwi/Māori rights and
interests in water.
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The Department of Internal Affairs
Te Tari Taiwhenua
21.
s 9(2)(h)
22.
Given there is common understanding about the clause, and on discussion with the
Ministry for the Environment, we have removed the requirement in an earlier draft of 1982
the Cabinet paper that delegated authority to draft the clause be given to a group of
Ministers (the Attorney General, Minister for Māori – Crown Relations, and Minister of
Local Government). Instead, officials will work directly with the agencies concerned,
Act
and ensure there is a clause in the Bill that is acceptable to all parties.
Next steps
23.
Subject to your agreement, we will lodge the paper with Cabinet Office by 10am on
Thursday 24 March 2022.
24.
We are still undertaking final review and proofreading processes, which may result in
minor drafting changes before the paper is lodged. This includes checking and refining
the wording in the table proposed to be attached to the paper, to ensure alignment
Information
with the wording in the paper itself.
25.
We are also preparing material to support discussions at DEV and Cabinet, and will
provide this to your office on 24 March 2022.
Recommendations
Official
26.
We recommend that you
authorise the Department of Internal Affairs
Yes/No
to upload the Cabinet paper,
Strengthening representation, governance
and accountability of the new water services entities, and attachment,
the
onto CabNet (
Appendix A), subject to any final drafting amendments,
and addressing any final comments you may provide on the paper.
under
Michael Mills
Acting Director – Policy and Stewardship
Released
Hon Nanaia Mahuta
Minister of Local Government
/
/
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The Department of Internal Affairs
Te Tari Taiwhenua
Appendices
• ‘Final’ draft Cabinet paper –
Strengthening representation, governance and
accountability of the new water services entities (
Appendix A)
• Attachment to Cabinet paper:
Summary of Working Group recommendations and
[DRAFT] recommendations in Cabinet paper
Section 18(d) - Cabinet Paper: Strengthening representation, governance and accountability
of the new water services entities - 19 April 2022 - https://www.dia.govt.nz/diawebsite.nsf/
Files/Three-waters-reform-programme-2022/$file/Cabinet-Paper-Strengthening-
1982
representation-governance-and-accountability-19-April-2022.pdf
Section 18(d) - Recommendations from the Working Group on Representation, Governance
and Accountability of New Water Services Entities – 7 March 2022 - https://www.dia.govt.nz/
Act
diawebsite.nsf/Files/Three-waters-reform-programme-2022/$file/Governance-Working-
Group-Report-7-March-2022.pdf
Section 18(d) - Recommendations from the Working Group on Representation, Governance
and Accountability of New Water Services Entities – Executive Summary - 7 March 2022 -
https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-reform-programme-2022/$file/
Governance-Working-Group-Report-Executive-Summary-7-March-2022.PDF
Information
Official
the
under
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Document 10
Priority Urgentt
Local Government briefing
Hon Nanaia Mahuta
Minister of Local Government
Title:
Agreement to lodge three waters Cabinet paper – Strengthening
1982
representation, governance and accountability of the new water
services entities
Date:
5 April 2022
Act
Key issues
We seek your agreement to lodge the attached Cabinet paper,
Strengthening representation,
governance and accountability of the new water services entities (
Appendix A), for consideration by
the Cabinet Economic Development Committee on 13 April 2022. If you agree, the paper will need
to be lodged with Cabinet Office by 10am on Thursday 7 April 2022.
Recent changes to the draft paper are noted in this briefing.
Information
Action sought
Timeframe
Authorise the Department of Internal Affairs to upload the Cabinet paper,
By 8:30am on
Strengthening representation, governance and accountability of the new
Thursday 7 April 2022
water services entities (
Appendix A), and attachment, onto CabNet,
subject to minor drafting amendments, and addressing any final comments
you may provide on the paper.
Official
Contact for telephone discussions (if required)
the
Name
Position
Contact Number
Suggested
1st contact
Nick Davis
Chief Advisor
021 508 183
✓
Jane Fleetwood
Lead Strategic Advisor
s 9(2)(a)
under
Return electronic document to:
Jane Fleetwood
Ministerial database reference
LG202200336
Released
IN CONFIDENCE
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The Department of Internal Affairs
Te Tari Taiwhenua
Purpose
1.
We are seeking your agreement to lodge the Cabinet paper,
Strengthening
representation, governance and accountability of the new water services entities (
Appendix A), with Cabinet Office, through the CabNet system.
2.
If you agree, the paper will need to be lodged by 10am on Thursday 7 April 2022, for
consideration by the Cabinet Economic Development Committee DEV) on 13 April
2022.
1982
Background
3.
On 7 March 2022, you received the report from the Working Group on Representation,
Governance and Accountability (Working Group), with recommendations for a Act
preferred strengthened approach to the governance framework for the new water
services entities.
4.
It is intended that your proposed response to the Working Group report will be
provided in a Cabinet paper. In particular, this paper will seek decisions to make
changes to the draft Water Services Entities Bill to address most of the Group’s
recommendations.
5.
We provided you with an initial draft Cabinet paper on 4 March 2022, and had a
discussion with you about this paper and the Working Group report on 7 March 2022.
Information
6.
You received a further draft on 10 March 2022, which was circulated for Ministerial
consultation. Agency consultation occurred in parallel.
7.
An updated version of the draft paper was provided to your office on 15 March 2022,
for circulation to Three Waters Ministers with other material for the meeting on 21
March 2022.
Official
8.
Earlier drafts of the paper sought decisions relating to the management of funding
issues and cost pressures associated with implementing the three waters reform
programme.
the
9.
Following discussions with the Prime Minister’s Office, those components were
removed and became a separate paper –
Managing cost pressures associated with
implementing the three waters reform programme – which is due to be considered at
DEV on 6 April 2022.
under
10. The other recent changes to the paper are summarised below. Where relevant, we
have also updated the attachment to the paper – the table listing all of the Working
Group recommendations and the corresponding Cabinet paper recommendations.
11. We understand you have received a letter about this paper from the Minister of
Climate Change, Hon James Shaw. That letter is being responded to separately.
12. We note the paper had already been amended to address earlier comments from Hon
Shaw’s office, particularly regarding a request that the National Adaptation Plan and
Released
Emissions Reduction Plan should be considered in relation to future work on the
definition of Te Mana o te Wai. This is dealt with in paragraph 147.5 and
recommendation 88.4 of the attached version of the paper.
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Recent changes to the paper
13. Two sections of the draft Cabinet paper have been amended recently:
13.1 Preserving iwi, hapū and Māori rights and interests in water – amendments to
paragraphs 166-167 and recommendations 94-95.
13.2 Update on approach to ICT implementation – amendments to paragraphs 232-
237 and recommendations 130-135.
Preserving iwi, hapū and Māori rights and interests in water – amendments to paragraphs 1982
166-167 and recommendations 94-95
14. This section of the paper relates to the Working Group’s proposal for a clause in the
Bill preserving ownership of, and the customary rights and interests of iwi and hapū in,
Act
water.
15. A similar clause has been proposed for in the Natural and Built Environments Bill by Te
Tai Kaha Māori Collective, which is a group advising the Ministry for the Environment.
16. Paragraph 166 of the paper has been amended at the request of the office of the
Minister for the Environment (John Blincoe) to note the connection to resource
management reform, and that the final wording of the clauses should be compatible
across both pieces of legislation.
17.
Information
s 9(2)(h)
18. The recommendations have been reworded so Ministers are able to consider drafting
Official
options for this clause. There were concerns the wording in the previous version of
the paper required the clause to replicate the Working Group recommendation
exactly. This is not the intent.
the
Update on approach to ICT implementation – amendments to paragraphs 232-237 and
recommendations 130-135
19. This section of the paper has been amended to address recent discussions with the
Treasury. We have agreed the proposed wording with Treasury officials.
under
20. The paper explains that the National Transition Unit is working closely with the
Treasury to explore appropriate mechanisms for funding the necessary ICT investment.
The intention is that the funding options will be fiscally neutral under the current fiscal
management approach, in line with the expectations outlined to Cabinet in July 2021
[CAB-21-MIN-0269].
21. The paper notes that, to meet the ‘go live’ date of 1 July 2024, the Crown will need to
bear certain costs prior to establishment of the entities. Given this, it will be important
Released
for the Crown to have legal certainty that any establishment costs it incurs during the
transition period on behalf of the water services entities will be recoverable from the
entities.
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22.
To provide this legal certainty, the paper seeks agreement to include a provision in the
Water Services Entities Bill to clarify that certain costs incurred by the Crown on behalf
of the water services entities will be recovered from the new entities, and therefore
will constitute a debt due to the Crown by the relevant entity.
23.
The paper seeks delegated authority for you and the Minister of Finance to approve
this provision during the drafting process, including:
23.1 which costs will be recovered from the water services entities;
23.2 how these costs will be allocated across the four water services entities; and
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23.3 the terms and conditions of any loan made by the Minister of Finance on behalf
of the Crown to the water services entities.
Act
24.
With the agreement of the Minister of Finance, you will report back to the Cabinet
Legislation Committee on this matter when seeking approval to introduce the Bill.
Next steps
25.
Subject to your agreement, we will lodge the paper with Cabinet Office by 10am on
Thursday 7 April 2022 – for consideration at DEV on Wednesday 13 April 2022.
26.
We will also prepare material to support discussions at DEV and Cabinet, and provide
this to your office separately.
Information
27.
Given the high level of sector and public interest in the Government’s response to the
Working Group report, it is anticipated announcements will be made shortly after
Cabinet decisions are made. We will work with your office on a plan for these
announcements, including public release of the Cabinet paper.
Recommendations
Official
28.
We recommend that you
authorise the Department of Internal Affairs
Yes/No
to upload the Cabinet paper,
Strengthening representation, governance
the
and accountability of the new water services entities (
Appendix A), and
attachment, onto CabNet, subject to any minor drafting amendments,
and addressing any final comments you may provide on the paper.
under
Hamiora Bowkett
Executive Director – Three Waters Reforms
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Hon Nanaia Mahuta
Minister of Local Government
/
/
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Appendices
• ‘Final’ draft Cabinet paper –
Strengthening representation, governance and
accountability of the new water services entities (
Appendix A)
• Attachment to Cabinet paper:
Summary of Working Group recommendations and
recommendations in Cabinet paper
Section 18(d) - Cabinet Paper: Strengthening representation, governance and accountability of the new
water services entities - 19 April 2022 - https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-
1982
reform-programme-2022/$file/Cabinet-Paper-Strengthening-representation-governance-and-
accountability-19-April-2022.pdf
Section 18(d) - Recommendations from the Working Group on Representation, Governance and
Act
Accountability of New Water Services Entities – 7 March 2022 - https://www.dia.govt.nz/
diawebsite.nsf/Files/Three-waters-reform-programme-2022/$file/Governance-Working-
Group-Report-7-March-2022.pdf
Section 18(d) - Recommendations from the Working Group on Representation, Governance and
Accountability of New Water Services Entities – Executive Summary - 7 March 2022 -
https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-reform-programme-2022/$file/
Governance-Working-Group-Report-Executive-Summary-7-March-2022.PDF
Information
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under
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Information
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the
s 9(2)(a)
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Purpose
1.
The latest three waters Cabinet paper –
Strengthening representation, governance and
accountability of the new water services entities – is due to be considered by the
Cabinet Social Wellbeing Committee (SWC) on 13 April 2022.
2.
This briefing provides information to support discussions at the meeting. Talking points
are attached at
Appendix A.
Background/context
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3.
During June and July 2021, Cabinet made a series of decisions to transform the three
waters service delivery system, and create four new water services entities.
4.
In October 2021, Cabinet decided to proceed with reform. However, a Working Group
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on Representation, Governance and Accountability (Working Group), was established
to report with recommendations for a preferred strengthened approach to the
governance framework for the new water services entities.
5.
The Working Group approach responded to feedback received during engagement
with the local government sector and iwi/Māori in the preceding two months. This
raised concerns about the Government’s reform proposals relating to the
representation, governance and accountability arrangements for the new entities.
6.
On 8 December 2021, DEV agreed that an exposure draft of the Water Services Entities
Information
Bill (the Bill) would be provided to the Working Group. This would enable Ministers to
consider any recommendations arising from the Working Group process, and for the
Bill to reflect any Cabinet decisions made as a result. As a consequence, the
introduction of the Bill was delayed
7.
The Working Group provided its report on 7 March 2022, and a Cabinet paper was
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prepared – as discussed further below.
8.
A related Cabinet paper –
Managing cost pressures associated with implementing the
three waters reform programme – was considered by the Cabinet Economic
the
Development Committee on 6 April 2022, and agreed by Cabinet on 11 April 2022.
Key decisions sought in the Cabinet paper
Overview
under the Official Information Act 1982
under
9.
This paper considers and responds to the 47 recommendations of the Working Group,
and seeks agreement to make changes to the Bill and/or policy settings to give effect
to the majority of those recommendations. Appended to the paper is a table listing all
of the Working Group recommendations and the corresponding Cabinet paper
recommendations.
10. The recommended changes are consistent with the Government’s bottom lines: good
governance; Treaty partnership; and public ownership. Consistency with balance sheet
Released
separation will be confirmed prior to the Bill’s introduction.
11. The Cabinet paper also reports back on “proposals for managing any risks to the
reform programme associated with the delayed timetable, and for managing the
timing and funding of reform-related policy, legislation and transition work” [DEV-21-
MIN-0268].
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12. The paper notes that a revised approach to the policy and legislation timetable has
been developed, which will still enable delivery of the reforms within the intended
timeframe. This approach is designed to ensure the full suite of legislation is enacted
prior to the 2023 general election, and well in advance of the 1 July 2024 operational
go live date of the new water services entities.
13. In addition, the paper provides an update on a couple of matters relating to the
transition programme, concerning the approach to ICT implementation, and managing
the appointments of establishment chief executives.
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Ownership and protection against privatisation
14. The proposal is to amend the Bill to provide that ownership of a water services entity is
through shares assigned to each territorial authority in an entity’s service area. Each
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share would be assigned to the relevant territorial authority per 50,000 people in its
district – rounded up, with a one share minimum for every territorial authority.
15. The shareholding model provides a tangible form of ownership that councils and
communities are familiar with. The entities remain statutory entities, and are not
council-controlled organisations.
16. Shareholdings only carry voting rights in relation to merger or sale proposals and must
be carried by a unanimous vote. To preserve balance sheet separation, there is no
financial interest attached to shareholding. The voting rights attached to shares
Information
provide an additional level of protection against privatisation.
17. It is also proposed to add a further level of protection against privatisation by requiring
a 75 per cent Parliamentary majority to make any legislative changes necessary to
enable privatisation (‘entrenchment’). You have written to all political parties seeking
their support on entrenchment of these provisions.
Official
18. Entrenchment would mean that amendment or repeal of the core privatisation
provisions would require a 75 per cent Parliamentary majority. Entrenchment of a
provision must be carried in a committee of the whole House by the majority that it
the
would require for the amendment or repeal (Standing Order 270).
19. As the paper notes, entrenchment of these provisions would be unusual.
Entrenchment is currently reserved for core constitutional arrangements. There are
complex constitutional arguments about whether entrenchment of these provisions
under the Official Information Act 1982
under
would be respected by future Parliaments and the courts.
Governance, accountability and local voice
20. A number of recommendations relate to governance and accountability. Many of
these align with the policy intent, or look to legislate for behaviour that would be
considered best practice.
21. The paper seeks agreement to adopt the majority of the Group’s recommendations,
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either in full or with some minor modifications to ensure ongoing flexibility.
22. Of particular note are proposals to:
22.1 clarify and strengthen the role of the regional representative group in bringing
together community interests and translating those to strategic direction for
the entity;
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22.2 introduce co-chairs to the regional representative group, and consensus voting
to re-enforce the co-governance model;
22.3 introduce ‘sub’ regional representative groups (sub-committees).
23. A bespoke arrangement is proposed for the composition of the regional representative
group for Entity A (Auckland/Northland). This would comprise: four Auckland Council
representatives, four Tāmaki Makaurau mana whenua representatives, one council
representative for each of the other (Northland) territorial authorities, and three mana
whenua representatives from Te Tai Tokerau.
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24. Regional representative group approval rights over the statement of intent is an area
where further work is needed.
24.1 Working Group recommendations for the regional representative group to
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approve an entity’s statement of intent may have practical impli ations for the
degree of operational autonomy of the board, and could potentially risk
balance sheet separation.
24.2 This will be specifically tested with Standard & Poor’s prior to the introduction
of the Bill. Officials will provide further advice on consistency of the proposed
governance and accountability arrangements with the Government’s bottom
lines of balance sheet separation, as well as the implications for the
attractiveness of board positions and the ability to identify and appoint suitable
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candidates.
Ensuring balance sheet separation
25. An important bottom line is the achievement of balance sheet separation. Key to
achieving the benefits of reform is that entities are able to borrow more to fund
infrastructure investment without being constrained by local authority debt covenants.
Official
26. The water services entities need to be structurally separate from both local authorities
and the Crown, have financial and operational autonomy, be able to borrow in their
the
own right, and have independent, competent governance.
27. An important step will be testing with Standard & Poor’s that the Working Group’s
proposed governance and accountability model will achieve balance sheet separation.
28. As the paper notes, the Working Group process included testing this informally with
under the Official Information Act 1982
under
Standard & Poor’s. However, a formal Rating Engagement Service process will be
conducted following Cabinet decisions and prior to the Bill’s introduction.
29. The paper seeks delegated authority for the Prime Minister, Minister of Finance, and
Minister of Local Government to consider the findings of Standard & Poor’s
assessment and confirm the final design of the model for inclusion in the Water
Services Entities Bill.
Te Mana o te Wai
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30. The proposal is to adopt the Working Group’s recommendation that Te Mana o te Wai
is elevated to apply to all functions and powers in the Bill – a korowai. If agreed, this
change will be implemented in the first Water Services Entities Bill.
31. There is also a proposal to adopt, in principle, the recommendation that Te Mana o te
Wai applies to all water for the purpose of the three waters system, and not just
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freshwater. If agreed, this change would be implemented in the second Water
Services Entities (Amendment) Bill, following further cross-agency work to ensure
concepts are properly aligned with broader environmental regulation.
32. If this does not occur, entities will not have the same responsibilities where
wastewater or stormwater discharges to a rivermouth, an estuary, a harbour, or the
coast, and mana whenua will not be able to use Te Mana o te Wai statements to
convey their aspirations for these waterbodies.
Te Tiriti o Waitangi
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33. The Working Group recommended enhancements to the way Te Tiriti applies across
the three waters services system.
Act
34. The paper proposes to amend the Bill to require all persons who exercise functions,
duties and powers under the Act to give effect to the principles of Te Tiriti o Waitangi.
35. This approach is consistent with clause 6 of the exposure draft of the Natural and Built
Environments Bill, and will ensure there is consistent application of Te Tiriti across the
water services delivery system.
36. The Working Group also recommended the Bill should include a clause preserving the
status quo for iwi and Māori rights and interests in water A similar clause has been
proposed by Te Tai Kaha Māori Collective for resource management reform.
Information
37. The paper proposes:
37.1 to include a clause of this nature in the Bill; and
37.2 that you will work with the Attorney General, Minister for the Environment and
Minister for Māori–Crown Relations to ensure the clause is legally certain and
does not have unintended consequences, and will report back when the Bill is
Official
proposed for introduction.
Other matters relating to iwi/Māori rights and interests – including resourcing
the
38. The Working Group proposed a definition of mana whenua, which is the iwi or hapū
holding and exercising customary rights, interests, and authority in accordance with
tikanga in an identified area.
39. The paper proposes to adopt this recommendation. This will minimise the future risk
under the Official Information Act 1982
under
of legal challenge and dispute about who has rights as mana whenua under the Bill.
40. The Working Group recommended the Crown provides equitable resourcing to enable
the full and effective participation of iwi and hapū in the three waters regime.
41. The financial decisions obtained through the separate paper –
Managing cost
pressures associated with implementing the three waters reform programme – would
provide Crown funding to support iwi, hapū and Māori participation through the
transition period.
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42. There will need to be further consideration of how to ensure ongoing support, after
the transition period.
43. The preferred approach is that the water services entities would have some
responsibilities for providing support, following full establishment. However, there are
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also broader questions around Crown support in the implementation of reforms to the
three waters and resource management systems, which need further examination.
44. Officials in relevant agencies will do further work on these matters, including
considering the alignment across reform programmes, and provide advice to Ministers
in due course. Crown support may also need to be considered further in Budget 2023.
Decisions sought regarding the approach to ICT implementation
45. Suitable technology capability is essential to every aspect of water services operation
and the water services entities will not be able to operate without key systems.
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Technology will also be a critical enabler of the reform requirement for water service
entities to have operational and financial independence from councils.
Act
46. The paper explains that the National Transition Unit is working closely with the
Treasury to explore appropriate mechanisms for funding the necessary ICT investment.
The intention is that the funding options will be fiscally neutral under the current fiscal
management approach, in line with the expectations outlined to Cabinet in July 2021
[CAB-21-MIN-0269].
47. The paper notes that, to meet the ‘go live’ date of 1 July 2024, the Crown will need to
bear certain costs prior to establishment of the entities. Given this, it will be important
for the Crown to have legal certainty that any establishment costs it incurs during the
transition period on behalf of the water services entities will be recoverable from the
Information
entities.
48. To provide this legal certainty, the paper seeks agreement to include a provision in the
Water Services Entities Bill to clarify that certain costs incurred by the Crown on behalf
of the water services entities will be recovered from the new entities, and therefore
will constitute a debt due to the Crown by the relevant entity.
Official
49. The paper seeks delegated authority for you and the Minister of Finance to approve
this provision during the drafting process. With the agreement of the Minister of
Finance, you will report back to the Cabinet Legislation Committee on this matter
the
when seeking approval to introduce the Bill.
Update regarding appointment of establishment chief executives
50. An important next step for the sector is the appointment of establishment chief
under the Official Information Act 1982
under
executives. These appointments are made through the National Transition Unit by the
Department’s Chief Executive.
51. It was originally anticipated appointments would be made by December 2021, but they
were delayed to provide time for sector engagement and the Working Group process.
52. As noted in the paper, the Department recommends proceeding with the process to
appoint establishment chief executives immediately following the Government’s
response to the Working Group’s report.
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53. This will signal clearly to the sector and iwi/Māori that the transition is continuing to
proceed, and provide a focus and structure for each of the four entities.
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Next steps following consideration of the Cabinet paper
54. The Water Services Entities Bill will be redrafted on the basis of the decisions made
through the Cabinet paper.
55. There will be further testing of the proposed structure with Standard & Poor’s before
the relevant proposals are confirmed and the Bill is considered for introduction.
56. Approval to introduce the Bill is expected to be sought in late May or early June 2022.
57. Given the high level of sector and public interest in the Government’s response to the 1982
Working Group report, it is intended announcements will follow shortly after Cabinet
decisions are made.
58. A comprehensive public information campaign will support the introduction of the Bill,
Act
and ensure the public is well informed of the case for change and Government policy
ahead of the select committee submissions and hearing process.
59. As you recently noted, key points for public communications include the need to be
clear about:
59.1 what co-governance is and what it is not – including providing clarity about the
role of the joint regional representative group, as distinct from the board;
59.2 the fact that the board is independent, and its members are chosen for their
competency and experience, not on a representative basis;
Information
59.3 the point that shareholding clarifies the ownership of the water services
entities by territorial authorities, and iwi do not own the entities or the assets.
Recommendations
60. We recommend that you
note the contents of this briefing during the discussions
Official
about the Cabinet paper,
Strengthening representation, governance and accountability
of the new water services entities, at the Cabinet Social Wellbeing Committee meeting
on 13 April 2022.
the
under the Official Information Act 1982
under
Nick Davis
Acting Executive Director, Three Waters Reform
Hon Nanaia Mahuta
Minister of Local Government
/
/
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Appendix A: Talking points for SWC on 13 April 2022
Strengthening representation, governance and accountability of the new
water services entities
Overview
• This paper considers and responds to the 47 recommendations of the Working Group on
Representation, Governance and Accountability.
•
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I am suggesting we make a number of changes to the initial reform proposals, and to
include those changes in the draft Water Services Entities Bill.
•
These changes are designed to address the concerns raised by the local government
Act
sector, provide clarity about some of the core aspects of the new model, and achieve
greater community buy-in for the reforms.
• The recommended changes are consistent with the Government’s bottom lines: good
governance; Treaty partnership; and public ownership.
• There has been ‘soft testing’ of balance sheet separation with Standard & Poor’s (S&P)
through the Working Group process, but this will be formally tested through a rating
engagement process with S&P prior to the Bill’s introduction.
• As the Working Group’s report strongly reflects, through this process we have heard that
Information
there is broad agreement with the case for change and the need for significant reform.
• We have considered a wide range of options, and have arrived at the best possible set of
proposals. These proposals have been further tested and strengthened through the
important contribution of the Working Group.
• We have spent a considerable amount of time discussing and debating alternatives to
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reform, and now need to proceed with implementation. The sooner we do that, the
sooner we will start to see the benefits of reform and achieve the outcomes sought. The
sector is also asking for certainty.
the
Ownership and protections against privatisation
• As recommended by the Working Group,
I am proposing to strengthen community
ownership of the entities (and their assets) through a public shareholding structure.
under the Official Information Act 1982
under
• The proposal is to amend the Bill to provide that ownership of a water services entity is
through shares assigned to each territorial authority in an entity’s service area.
• Each share would be assigned to the relevant territorial authority per 50,000 people in
its district – rounded up, with a one share minimum for every territorial authority.
• The shareholding model provides a tangible form of ownership that councils and
communities are familiar with.
Released
• Shareholdings only carry voting rights in relation to merger or sale proposals, and must
be carried by a unanimous vote. To preserve balance sheet separation, there is no
financial interest attached to shareholding.
• The voting rights attached to shares provide an additional layer of protection against
privatisation.
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•
I note that the iwi representatives on the Working Group support the recommendation
that public ownership of the water services entities should be reflected by councils
being the shareholding owners on behalf of their communities.
• In a separate Statement of Support provided to me, the iwi representatives also
expressed disappointment that much of the public commentary regarding the reforms
has focused on misunderstanding and misinformation regarding the issue of ownership.
Those matters have sat outside of this reform work programme.
• As the iwi representatives recognise
, the proposed reforms do not involve the seizure of 1982
assets or disenfranchisement of communities in connection to those assets. These
assets will remain in community ownership.
• The proposed changes should help to reinforce this important message, and embed it in
Act
the legislation.
• It is also proposed to add a further level of protection against privatisation by requiring a
75 per cent Parliamentary majority to make any legislative changes necessary to enable
privatisation – known as ‘entrenchment’.
• I have written to all political parties seeking their support on entrenchment of these
provisions.
Clarifications about the governance structure
Information
• Through my proposed changes and the provisions already in the Bill, the water services
entities will have a two-tier governance structure, comprising a regional representative
group and a corporate board.
•
The regional representative group will represent the views of councils and mana
whenua in the service area of the entity, and will set expectations and approve the
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strategic direction of the entity, but will not be involved in making operational
decisions.
•
Appointments to the regional representative group will be based on a co-governance
the
model, where half of its members are drawn from territorial authorities, and half are
from mana whenua in the service area of the entity.
• The regional representative group will also have co-chairs appointed by council and
mana whenua representatives respectively.
under the Official Information Act 1982
under
• This approach will enable a strategic focus on the broad benefits of service delivery and
inf astructure investment decisions across a catchment, with due consideration for the
health, environmental and economic benefits for all communities in that region.
•
Importantly, the board is the governing body of the entity, and fulfils the same role as
the board of a company or Crown entity. The board remains primarily accountable for
developing the strategy and associated accountability documents, including the
statement of intent, and for delivering against that strategy once approved.
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• The board will have responsibility for the day-to-day operations of the entity and appoint
the chief executive.
•
Appointments to the board will be made on the basis of the skills of individual
members, or collective competencies across the board as a whole, and not whether a
person is from a council or mana whenua.
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•
I am proposing a bespoke arrangement for the composition of the regional
representative group for Entity A (Auckland/Northland), comprising:
o four Auckland Council representatives
o four Tāmaki Makaurau mana whenua representatives
o one council representative for each of the other (Northland) territorial authorities
o three mana whenua representatives from Te Tai Tokerau.
•
I am also taking forward the Working Group recommendation about providing for sub-
regional advisory groups/committees.
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• This approach will respond to calls from local government and iwi/hapū to ensure local
voice in decision making, and provide additional local strategic focus.
Act
• It will assist the board by providing a community-based perspective on investment
prioritisation and service standards, which is especially important for smaller
communities who are fearful their interests will not be accommodated.
• The sub-regional groups would follow the same co-governance principles of the regional
representative group, and would be aligned to sub-regions, takiwā or catchments (to be
agreed by each regional representative group).
Iwi, hapū and Māori rights and interests in the water services entities
Information
• The Working Group made a number of recommendations relating to iwi, hapū and Māori
rights and interests in the water services entities
•
A key proposal is to adopt the Working Group’s recommendation that Te Mana o te
Wai is elevated to apply to all functions and powers in the Bill – a korowai.
o If agreed, this change will be implemented in the first Water Services Entities Bill.
Official
• There is also a proposal to adopt in principle, the recommendation that Te Mana o te
Wai applies to all water for the purpose of the three waters system, and not just
freshwater.
the
o If agreed, this change would be implemented in the second Water Services
Entities Amendment Bill, following further cross-agency work to ensure concepts
are properly aligned with broader environmental regulation.
•
I am proposing to amend the Bill to require all persons who exercise functions, duties
under the Official Information Act 1982
under
and powers under the Act to give effect to the principles of Te Tiriti o Waitangi.
• This approach is consistent with clause 6 of the exposure draft of the Natural and Built
Environments Bill, and will ensure there is consistent application of Te Tiriti across the
water services delivery system.
•
I am proposing the Bill includes a clause preserving the status quo for iwi and Māori
rights and interests in water.
Released
• I will work with the Attorney General, Minister for the Environment, and Minister for
Māori–Crown Relations to ensure the clause is legally certain and does not have
unintended consequences, and report back when the Bill is proposed for introduction.
• There are a range of agency views on the preservation clause, and several options are
being developed for authorised Ministers to consider.
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•
I am also proposing to adopt the Working Group’s proposed a definition of mana
whenua, which is the iwi or hapū holding and exercising customary rights, interests, and
authority in accordance with tikanga in an identified area.
• This will minimise the future risk of legal challenge and dispute about who has rights as
mana whenua under the Bill.
• Finally, the Working Group recommended the Crown provides equitable resourcing to
enable the full and effective participation of iwi and hapū in the three waters regime.
• Decisions made through my recent paper –
Managing cost pressures associated with
1982
implementing the three waters reform programme – would provide Crown funding to
support iwi, hapū and Māori participation through the transition period.
•
Act
Cabinet has previously noted that, once established, each water services entity would be
expected to provide financial support to a ‘mana whenua forum’ in its area Further
consideration will be given to how to ensure ongoing support for iwi/Māori to perform
the roles envisaged in the three waters service delivery system following the transition
period.
Next steps – including communications
• The Water Services Entities Bill will be redrafted on the basis of the decisions made
through this Cabinet paper.
Information
• There will be further testing of the proposed structure with Standard & Poor’s, and
advice to authorised Ministers on balance sheet separation and accounting treatment,
before the relevant proposals are confirmed and the Bill is considered for introduction.
• Approval to introduce the Bill is expected to be sought in late May or early June 2022.
•
Given the high level of sector and public interest in the Government’s response to the
Official
Working Group report, it is intended that announcements will follow shortly after
Cabinet decisions are made.
the
• A comprehensive pub ic information campaign will support the introduction of the Bill,
and ensure the public is well informed of the case for change and Government policy
ahead of the select committee submissions and hearing process.
•
My intention is to put out messages around co-governance and local voice that are
under the Official Information Act 1982
under
clear and direct, to avoid these matters being obscured by those opposing the reform
programme.
• I anticipate
key points for public communications include the need to be clear about:
o
what co-governance is and what it is not – including providing clarity about the
role of the joint regional representative group, as distinct from the board
o the fact that
the board is independent, and its members are chosen for their
competency and experience, not on a representative basis
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o the point that
shareholding clarifies the ownership of the water services entities
by territorial authorities, and iwi do not own the entities or the assets.
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Act
Information
Official
the
s 9(2)(a)
under
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Te Tari Taiwhenua
Department of Internal Affairs
Purpose
1.
The latest three waters Cabinet paper –
Strengthening representation, governance and
accountability of the new water services entities – was considered by the Cabinet
Social Wellbeing Committee (SWC) on 13 April 2022.
2.
The paper is due to be considered at Cabinet on 19 April 2022.
3.
This briefing provides information to support discussions at the meeting – focusing on
the changes that were made to the paper following SWC. Talking points are attached
at
Appendix A.
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Summary of the recent changes to the paper
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Points raised by the Attorney-General / Minister for the Environment
4.
You received a number of suggestions from Hon David Parker. The paper has been
amended to address these suggestions, including using most of the wording provided
by his office. These changes are set out below.
Preserving iwi, hapū and Māori rights and interests in water
5.
Minister Parker asked that the following noting recommendation be added to the
paper. This is recommendation 94 in the updated version, and says:
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5.1
“note that the Bill proposes reform of the service delivery arrangements for
water services to communities, and that broader questions of freshwater
allocation and consents for taking water and discharges to it, and the
associated question of Māori rights and interests in freshwater, falls within the
ambit of the resource management system and the proposed Natural and Built
Environments Act;
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6.
Minister Parker also asked for changes to one of the existing recommendations, as
follows
: “agree to amend the Bill to include a clause that preserves the status quo for
ownership Māori rights and interests in freshwater, and iwi and hapū customary rights
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relating to, water, with the nature of that clause to be agreed in accordance with
paragraph 95 below”
7.
We advised your office that wording the recommendation as proposed would raise
some complexities and risks.
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8.
We suggested that it might be preferable if the clause makes it clear that nothing in
the legislation creates or transfers ownership rights or interests in water, and is not an
acknowledgement by the Crown that ownership rights or interests in water exist. This
would be a much clearer way of ensuring that ownership of water is not up for
negotiation in future.
9.
We also noted that:
9.1
Broadening the clause to “Māori rights and interests” is problematic as it raises
Released the very difficult question about whether Māori communities have rights and
interests in water when there is no mana whenua or whakapapa connection.
The Working Group confined its recommendation to iwi and hapū customary
rights and interests in water for a good reason – as we understand it this is a
core area for discussion between the Crown and Treaty partners.
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9.2
Broadening the recommendation in this way may not be well received by iwi
leaders. Confining the clause to iwi and hapū customary rights also has the
benefit of ensuring the clause is focussed on existing rights. It is not clear what
broader rights Māori communities have in water – this significantly increases
uncertainty around scope of the recommendation.
9.3
Limiting the clause to “freshwater” is problematic as, in the three waters
service delivery context, the regime does impact on customary authority, rights
and interests for non-freshwater bodies – an obvious example is discharge of
wastewater or stormwater into a river mouth, estuary or the coast where
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mana whenua are kaitiaki, or have mahinga kai. The point here is that, in the
specific three waters service delivery context, the discussion is broader than
allocation of take and discharge rights to freshwater bodies.
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10. As a result, a slightly different approach was taken to amend the recommendations in
the Cabinet paper. The proposed wording was agreed with Minister Parker’s office.
11.
Recommendations 95 and 96 now say:
11.1 “note that nothing in the legislation is an acknowledgement by the Crown that
ownership rights or interests in water exist;
11.2 agree to amend the Bill to include a clause that preserves the status quo iwi
and hapū customary rights and interests in water, with the nature of that
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clause to be agreed in accordance with recommendation 97 below;”
12. In addition,
recommendation 97 now includes the Associate Minister for the
Environment (Hon Kiritapu Allan) in the list of Ministers delegated to approve the
clause referred to in recommendation 96.
Clarification regarding Te Mana o te Wai
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13.
Paragraph 155 has been amended to say: “The Working Group has noted that Te
Mana o te Wai is a purpose-made korowai for the three waters system. I propose that
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it be applied to the functions, powers, or duties of the new water service entities. This
is consistent with the Water Services Act 2021”.
Connections with the resource management reforms
14.
Paragraph 209 has been amended to say: “ I note that officials in relevant agencies are
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already working together across the two reform programmes. This will continue as the
Bills progress, to ensure the new water services entities are able to work appropriately
within the reformed resource management system”.
15. There have also been some amendments to the recommendations relating to the
intersections between the three waters and resource management reforms. These
include changes we discussed with you yesterday, and changes requested by Minister
Parker.
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16.
Recommendations 126-128 now say:
16.1 note that there will be differences between the governance and decision-
making bodies enabled by three waters reforms and the resource management
reforms;
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16.2 direct officials in relevant agencies to continue to work together across the two
reform programmes, as appropriate, to ensure the new water services entities
are able to work within the reformed resource management system;
16.3 note that consents for taking and discharging water will continue to be
administered by local authorities under the Resource Management Act (which
will be transferred into the Natural and Built Environments Act, if enacted);
17. As requested by Minister Parker, we have deleted what was recommendation 124 (in
the earlier version). This had said “agree, in principle, that central government will
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ensure there is consistency across the reforms to the resource management system
and three waters service delivery system, as appropriate”.
Proposal relating to co-chairs
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18. As discussed with you yesterday, the paper has been amended so that the Bill would
enable – but not require – regional representative groups to have co-chairs.
19. This is addressed through
recommendation 26, which says “agree to amend the Bill to
enable each regional representative group to appoint co-chairs, comprising one council
and one mana whenua chair”.
20. The discussion about this matter in
paragraph 80 of the paper has been revised to
align with this approach.
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21. In addition, the following sentence was added to
paragraph 79: “My expectation is
that arrangements relating to co-chairs would be determined by each regional
representative group and given effect through the entity constitution”.
Some points to note about entrenchment
22. The Cabinet paper proposes entrenchment of the core provisions in the Bill that
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protect against privatisation You wrote to the leaders of the Parliamentary political
parties requesting their support for this proposal.
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23. Entrenchment is where the support of 75 per cent of the members of Parliament is
required to amend or repeal a provision in an Act.
24. Entrenchment currently only applies to a very small number of core constitutional
provisions (relating to elections and the term of Parliament).
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25. At select committee there are likely to be submissions both in support of
entrenchment (for example, from some councils) and in opposition (for example, from
some constitutional experts).
26. The latter group will likely say that entrenchment is unusual in the three waters service
delivery context.
27. Other constitutional settings (such as the New Zealand Bill of Rights Act 1990) and
other very significant policy settings (such as the zero carbon goals in the Climate
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Change Response Act 2019) are not entrenched.
28. Submissions are also likely to canvas complex legal arguments around whether the
courts would recognise entrenched provisions in the three waters context.
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29. If these provisions are entrenched, all the remaining provisions in the Act will continue
to be able to be amended or repealed by a simple Parliamentary majority. It may be
suggested that this allows a future Parliament to make “wrecking amendments”; for
example, repealing all provisions other than the entrenched provisions, or repealing
the title clause of the Act to disable it.
30. While this is theoretically possible, there would of course be questions around the
credibility of wrecking amendments of this nature that a future Parliament would need
to address as part of the broader debate.
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Recommendations
31. We recommend that you
note the contents of this briefing during the discussions
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about the paper,
Strengthening representation, governance and accountability of the
new water services entities, at Cabinet on 19 April 2022.
Nick Davis
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Acting Executive Director, Three Waters Reform
Hon Nanaia Mahuta
Minister of Local Government
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Appendix A: Talking points for Cabinet on 19 April 2022
Strengthening representation, governance and accountability of the new
water services entities
Changes made to the Cabinet paper following SWC
•
I have made changes to the paper to reflect the discussions at SWC and written
feedback I received subsequently from Minister Parker
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•
I have amended the recommendations relating to preserving iwi, hapū and Māori
rights and interests in water, in discussion with Minister Parker’s office
• Recommendations 95 and 96:
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o note that nothing in the legislation is an acknowledgement by the Crown that
ownership rights or interests in water exist;
o agree to amend the Bill to include a clause that preserves the status quo iwi and
hapū customary rights and interests in water, with the nature of that clause to be
agreed in accordance with recommendation 97 [below]
•
I have provided additional clarifications regarding Te Mana o te Wai • Paragraph 155 has been amended to say: “The Working Group has noted that Te Mana o
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te Wai is a purpose-made korowai for the three waters system. I propose that it be
applied to the functions, powers, or duties of the new water service entities. This is
consistent with the Water Services Act 2021”.
•
I have amended the proposal relating to co-chairs – so the Bill would enable, but not
require, regional representative groups to have co-chairs
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• This is addressed through recommendation 26, which says “agree to amend the Bill to
enable each regional representative group to appoint co-chairs, comprising one council
and one mana whenua chair”.
the
• The discussion about this matter in paragraphs 79 and 80 of the paper has been revised
to align with this approach.
• My expectation is that arrangements relating to co-chairs would be determined by each
regional representative group and given effect through the entity constitution.
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•
I have amended the description of the connections between the three waters and
resource management reforms – as suggested by Minister Parker
• Recommendations 126-128 now:
o note that there will be differences between the governance and decision-making
bodies enabled by three waters reforms and the resource management reforms;
o direct officials in relevant agencies to continue to work together across the two
Released reform programmes, as appropriate, to ensure the new water services entities
are able to work within the reformed resource management system;
o note that consents for taking and discharging water will continue to be
administered by local authorities under the Resource Management Act (which
will be transferred into the Natural and Built Environments Act, if enacted);
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Communications
•
My intention is to communicate messages around co-governance and local voice that
are clear and direct, to avoid these matters being obscured by those opposing the
reform programme.
• I anticipate
key points for public communications include the need to be clear about:
o
what co-governance is and what it is not – including providing clarity about the
role of the joint regional representative group, as distinct from the board
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o the fact that
the board is independent, and its members are chosen for their
competency and experience, not on a representative basis
o the point that
shareholding clarifies the ownership of the water services entities
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by territorial authorities, and iwi do not own the entities or the assets
o
the positive benefits offered by the public shareholding approach.
•
In addition, the communications material will include information about how many
shares each territorial authority will have in the relevant entity.
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Document Outline