GUEST BLOG: Niki Gladding – How 3 Waters becomes a blueprint for water privatisation

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Christchurch Water Rally December 2019. Photo credit Ezra Holder

While NZ is scrapping over the illusion of 50/50 iwi/council ‘control’ of the three waters entities, the real issues of control are flying well below the radar.  With just a week left to submit on the Three Waters Entities Bill, we need to put the co-governance debate to one side and start questioning the corporatisation of our wai, and where that might lead given the pressure on water resources locally and globally.

Link to the Bill: 

At the risk of sounding insensitive, in the context of these reforms co-governance is a gigantic ‘red herring’.  Co-governance is vitally important but right now the debate is a diversion, or at least a distraction. Why?  Firstly, no matter how water is governed it can be done in partnership with iwi.  Secondly, neither iwi nor the council ‘owners’ will have any meaningful control of the Water Entities – not if the Bill is passed as drafted.

Whether this ‘red herring’ is some PR firm’s clever tactic or not, the point is we have allowed ourselves to be distracted – by our fears or philosophy or a long-fought-for precedent.  What should matter right now, because we all love this country, is that Aotearoa/NZ is facing the corporatisation of its public water assets, and a huge cut to its local democracy.  And that’s not good for any of us – not with conflict over water increasing.

The drafting of the Bill points to corporate control:

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  • The council shareholding is not ownership – there are no meaningful or enduring rights or responsibilities attached to it.  The only thing the shareholding does at this point is provide a right to vote on a proposal to sell. However some asset sales can occur despite this right.  We’re not even sure that shares will matter when establishing the 50/50 iwi/’owners’ Regional Representative Group (RRG) (see ss115 and 116)
  • The Entities cannot be ‘bailed’ out by their council ‘owners’, making an eventual share sale more likely (see s116)
  • The Working Group’s big win (removal of the Board between the RRG and the Entity) has been foiled by two words – ‘just cause’. The RRG, representing the territorial owners and iwi, can remove the entity board (via its Appointment Committee) but only for very narrowly defined ‘just cause’.  ‘Just cause’, as defined in the Bill, has nothing to do with the Board’s interpretation of the high level guidance from iwi and the RRG (see s68)
  • There is no ability for the RRG to amend an entity’s Statement of Intent (SOI)
  • The Entities are legislated to be completely independent and can not be directed by the Regional Representative Group or the Government Policy Statement – to do anything (see s115)
  • The Entities are not limited by, or required to implement, Councils’ Spatial Plans or Future Development Strategies.
  • The entities’ constitutions are legislated to be short on scope and are ultimately controlled by the Minister.  The first constitutions will be written by the Minister and he or she will not have to consult the council ‘owners’ (see ss 94 and 95)
  • There is a lot of consultation ‘window-dressing’ and consensus building, which will consume time and money. It will also frustrate the hell out of us because even if we manage agreement, we can’t ensure the entities will act on recommendations.
  • The entities will be able to enter 35-year joint arrangements with other water and non-water entities to supply infrastructure and services, as long as they retain control of policy and pricing (ss 117 and 118).
  • Under those joint arrangements they will also be able to sell or transfer assets at the end of an ‘arrangement’ if the Board considers the sale of those assets to be incidental to or consequential on the joint arrangement – whatever that means (see s118(3)(d)(i)and (ii)).  Bus-sized loophole right there.
  • The entities are also empowered to sell assets if they can retain the capacity to exercise the duties functions and powers (s116(2)(ii)).  The ‘owners’ can’t prevent this, nor can the RRG or the appointment board.
  • Conflicted Board members can be authorised to act despite having an interest in a matter.  And this can be done by the Chair acting alone.  Reporting on these permissions is retrospective (ss 107 and 108).
  • Recent interests in the water industry are not considered to be a conflict, so there appears to be plenty of scope for the Entities to be captured by the industry via its ‘experts’ (see s100)

N.B. you can oppose all of this and more by submitting on the Bill. Submissions close 11:59pm on 22 July. Submit here: https://www.parliament.nz/en/pb/sc/make-a-submission/document/53SCFE_SCF_BILL_124081/water-services-entities-bill )

Of course, this is what the Reform was always meant to deliver – not co-governance but a governance model completely free from meaningful community and iwi control and political interference. The industry’s aim has long been to enable a steady and secure pipeline of works, with sufficient ongoing funding – public or private – to enable growth. And that is what it looks set to get.

It wasn’t iwi leaders that convinced staff from the DIA and Treasury to fly across the world to Scotland in March 2017 – it was Infrastructure New Zealand (INZ). And given current tensions in the Pacific it’s worth mentioning that INZ’s membership includes the the China Construction Bank, Industrial and Commercial Bank of China, Bank of China, and MUFG (a Japanese Megabank). See membership of INZ here: https://infrastructure.org.nz/membership/

That trip led to a report: “Building National Infrastructure Capability – Lessons from Scotland” https://infrastructure.org.nz/wp-content/uploads/2021/08/Infrastructure-New-Zealand-Scotland-Report.pdf. The recommendations include reform of the water sector – specifically, consolidating water supply and wastewater services into a smaller number of large operators. It even recommended investigating the partial or full sell down of Watercare to fund growth.  INZ has also lobbied hard for years to reduce the size of local government and it has been very effective…

This Bill creates 4 water entities and gives all tangible control of those entities to industry experts and to the companies doing deals with those entities.  The Bill is also part of a huge reform program that diminishes the role of local government and the democratic accountability that comes with it.

Local government is not perfect but it’s not driven by profit, it works as an integrated system rather than a series of silos (which is critical if we’re to address climate change), and it really does have the community at heart. Corporatisation, on the other hand, is neo-liberal policy driven by aspirations of ‘efficiency’ (in the narrowest sense) and is the halfway house on the road to privatisation and a focus on profits.

We are, of course, being assured that there are very strong protections against privatisation in the Bill.  In reality they are just words and can be removed by a future government just as easily as this government will override the s130(3) protections that reside in the Local Government Act (see clause 14 of Schedule 1 of the Bill).  All it will take is one Entity nudging its debt ceiling and a bit of scaremongering in the name of public health.  History repeating itself.

So, this is my plea to Iwi leaders and councils, the DIA, and MPs:  get out of your singular-focus silos and forget about your reputations and your small wins for a minute, because retaining control of our water infrastructure, and the large water permits associated with those, is more important than either. It is time to think more holistically…

  • Think about the global and regional context, including water shortages, climate change, and tensions in the Pacific. Think about water security.
  • Think about the impact of this Bill in the context of our trade agreements – what do those agreements prevent us from doing if the entities sell water infrastructure to global corporates?
  • Think about localism and local democracy – what will be the social, financial, economic and cultural, effects of reduced place-making powers, reduced of economies of scope, and reduced local democracy?
  • Think about the potential consequences of corporatising, and eventually privatising, the most basic of needs, which also happens to be a limited resource and the source of growing conflict. Who will decide who gets how much of a finite reticulated supply?

We all still have a chance to oppose this industry-driven reform. Failing that, we still have a chance to push for amendments to the Bill to at least give local communities (as the ‘owners’) some control, to prevent asset sales and capture by the industry, and to ensure competition.   The alternative is a future where the big foreign corporates are calling all the shots.

Clean water and local control – we can have both if we stop arguing over red herrings.

Niki Gladding is a Queenstown Lakes District councillor, sitting on QLDC’s Infrastructure Committee and Climate Reference Group.  Niki co-founded Aotearoa Water Action in 2018 and has spent the last five years challenging consents granted to 2 foreign water-bottlers.  She supports mana whenua partnering with councils to govern three waters assets.”

 

20 COMMENTS

  1. Councillors’ re-election ‘is at the heart’ of what Councils do. That is the reality.

    The unsexy stuff of sewerage and safe water needs higher rates (and losing votes) and that’s why Councillors can’t be trusted to fund or manage water.

    New stadiums/rebuilding decrepit earthquake-prone buildings on the other hand….

    • We all know that Ada. Not what this is about this about, the theft and control of our last great asset. Thank you Nikki. And yes Co governance is another debate, however dividing water assets along Iwi lines is a really dumb idea. Lumping radically different regions together for some ideal view of treaty obligations is so impractical and simply will not work. Remaining oblivious to the realities of geographical boundaries defined by existing regions topographical distinctions is breathtaking in it’s utter stupidity.But then that is this government’s defining quality.

      • Not really. Owning an asset is not the same as building a vitally important national security infrastructure like safe secure drinking water, indefinitely.

        What the treaty doesn’t say is we will con Maori out of there assets, you’ve got to look at there policies for that ie nobody owns the water or everyone has an interest in water.

        All the Treaty does is gives the crown the right to create and build things only a government should build like an airforce, navy, and water infrastructure.

        How water is allocated under the treaty is entirely between Maori and the crown and no one else.

    • The desire to be re-elected is at the heart of democracy… it’s how the community retains power. It just needs to be balanced with sensible regulation, which is something that’s been missing to date in the area of 3 Waters. With the introduction of Taumata Arawai councils have doubled spending on 3 Waters.

  2. It’s almost sounding like it is a ‘Right’ to transfer ownership, given to this governance group similar to the RfR. In Treaty speak. The Right of (first) Refusal. These rights give the ‘winner’ an exclusive right to purchase the property (because it will become property) within a set period of anywhere from 25 years to 170 years.
    In the meanwhile, the governing group will be able to extract as much as they can from the asset(s) whilst they have governorship and or set the terms and conditions and find a suitable buyer with deep pockets to bribe them all within the process of discovery. Finding a ‘suitable’ buyer.
    Who said privatisation by stealth wasn’t a real thing?

  3. Iwi Corporations have an major flaw, it is based on key family members, making the talent pool rather small. They (the corporations) are not overly happy for oversight as well.

    • Maori are under no obligations to hold onto to the crown from 200 years ago. The crown has honoured none of its treaty obligations. To turn around and have ago at Maori for the crowns failings is just something a con artist does.

  4. We can pass on the external costs of cigarettes direct to the consumer, but we can’t do it for water.

    New Zealand is a small nation by its very nature of taking at least 200 years for its forests to grow to maturity. It tries, it really does. But when it can’t get its water, it just can’t do it.

  5. I’ve said from day 1!
    Labour will lose the election due mainly (but not only) 3 waters….snubbing their nose at 90% of the council’s who voted no, so basically the whole ‘let us know how you feel about this’ was a crock!
    Mark my words…the terrible stats and non delivery over last 5yrs and pushing ahead with the deeply unpopular 3waters will ensure National/ACT in Govt next year and any 3waters policy/law in place will be dismantled and reversed….
    Why no referendum from Labour on 3waters?, because they know most voters are against it!

    • Agreed .The arrogance of this government in not listening to the people is breathtaking. Dr Doo Little on health Mahuta on 3 Waters. These two alone will absorb so much money that could go to boosting the income of those in need as prices rocket out of control.

    • Yes I’m right we should have a referendum on this like our power company sell off referendum…oh wait that referendum was ignored because by being elected into Government Key said they had a mandate so ignored the referendum results. So yeah, lets have a referendum and ignore the results and privatise the shit out of water.

  6. I had been wondering the same thing and couldnt figure out how they could say 3 waters makes it safe from privatisation so good to see Nikki summarise it clearly. And dont forget the likelihood that most small councils will go because of loss of economies of scale as a result of losing water services. This should worry more people than it does.

    Especially if there is an outside chance that in time. all councils ultimately get absorbed into these 4 iwi led organisations taking the form of super delivery and governance bodies. Given the unaccountable nature of them, this would be horrific.

  7. Where NZ is heading… Debt trap through construction projects….. then all the assets collected like 3 Waters, will be privatised as the country goes broke.

    China accused of luring countries like Sri Lanka and Laos into ‘debt trap’
    https://www.nzherald.co.nz/world/china-accused-of-luring-countries-like-sri-lanka-and-laos-into-debt-trap/DSU3K3SKTT2FBLY4666AVGO42A/

    “Sri Lanka’s economic collapse and civil unrest have been widely blamed on the government’s cosy relationship with Beijing. And the foreclosure of its multi-billion dollar Hambantota Port – handed over to China in 2017 – is treated as a case study in “debt trap diplomacy”.

    But it’s not the only nation facing such a crisis.

    Pakistan is struggling to meet debt repayments. As are the Philippines and Laos.”

    NZ government policy and OIO has literally given away NZ water.

    NZ Government Secretly Funded Water Bottling Companies
    https://www.scoop.co.nz/stories/PO1904/S00055/nz-government-secretly-funded-water-bottling-companies.htm

    NZ natural resources that seem to be drying up…

    Waihi runs out of water, council distributing water bottles
    https://www.newshub.co.nz/home/new-zealand/2020/02/waihi-runs-out-of-water-council-distributing-water-bottles.html

    Appeals against Chinese water bottling plant dismissed
    https://www.stuff.co.nz/business/118255435/appeals-against-chinese-water-bottling-plant-dismissed

    Dairy firm wants ocean wastewater outfall
    https://www.odt.co.nz/rural-life/dairy/dairy-firm-wants-ocean-wastewater-outfall

    No plan to tackle environmental degradation by increased tourism – Commissioner
    https://www.rnz.co.nz/news/national/405767/no-plan-to-tackle-environmental-degradation-by-increased-tourism-commissioner

    Growth, growth, growth, bankrupting NZ

    Sewage in Wellington marine reserve 43-times worse than acceptable levels
    https://www.stuff.co.nz/dominion-post/news/118890119/sewage-in-wellington-marine-reserve-43times-worse-than-acceptable-levels

    Wellington road closed for two months amid waste pipe repair
    https://www.tvnz.co.nz/one-news/new-zealand/wellington-road-closed-two-months-amid-waste-pipe-repair

    Work on burst Taupō waste pipe begins
    https://www.rnz.co.nz/news/national/393896/work-on-burst-taupo-waste-pipe-begins

    Sadly now everything in NZ under Rogernomics and globalism and hyper low wage migration, costs three times as much and takes three times as long, and has three times more remediation, due to NZ’s low wages and inability to hire, train, retain and pay decent wages to experienced people (not administrators) who can get the job done the first time. Instead making everything fail with poor management and staff, ensures even more profits as the government keeps handing out taxpayers money!!!!!

    • What does China have to do with it, bud? China has never called in an infrastructure debt- meanwhile, American hedge funds are stealing ships from Argentina in foreign countries, on the basis of loans that were imposed by American-supported dictators.

  8. We are heading in this direction…

    The scandal of millions of Americans deprived of running water
    https://www.theguardian.com/news/audio/2020/jul/02/the-scandal-of-millions-of-americans-being-deprived-of-running-water-podcast

    What happens to locals as the councils and governments give the water away to private firms…

    The fight to stop Nestlé from taking America’s water to sell in plastic bottles
    https://www.theguardian.com/environment/2019/oct/29/the-fight-over-water-how-nestle-dries-up-us-creeks-to-sell-water-in-plastic-bottles

    Coca-Cola sucking wells dry in indigenous Mexican town – forcing residents to buy bottled water
    Bottling plant ‘consumes more than a million litres of water a day’
    https://www.independent.co.uk/news/world/americas/coca-cola-mexico-wells-dry-bottled-water-sucking-san-felipe-ecatepec-chiapas-a7953026.html

    Coca-Cola Charged With Groundwater Depletion and Pollution in India
    https://www.thoughtco.com/coca-cola-groundwater-depletion-in-india-1204204

    The company admits that without water it would have no business at all. Coca-Cola’s operations rely on access to vast supplies of water, as it takes almost three litres of water to make one litre of Coca-Cola. In order to satisfy this need, Coca-Cola is increasingly taking over control of aquifers in communities around the world. These vast subterranean chambers hold water resources collected over many hundreds of years. As such they the represent the heritage of entire communities.
    https://waronwant.org/media/coca-cola-drinking-world-dry

    Chinese company approved to run water mining operation in drought-stricken Queensland
    https://www.theguardian.com/environment/2019/dec/28/chinese-company-approved-to-run-water-mining-operation-in-drought-stricken-queensland

    IN NZ

    Green Party members revolt over water bottling decision
    https://www.stuff.co.nz/national/politics/104668519/green-party-members-revolt-over-water-bottling-decision

    Consent granted for Chinese water bottling giant to purchase Otakiri Spring
    https://www.stuff.co.nz/business/104695650/consent-granted-for-chinese-water-bottling-giant-to-purchase-otakiri-spring

    Chinese water bottling plant’s proposal to take water from Whakatane aquifer ‘sustainable’, court hears
    https://www.tvnz.co.nz/one-news/new-zealand/chinese-water-bottling-plants-proposal-take-whakatane-aquifer-sustainable-court-hears

    Canterbury water on way to Chinese market as bottling plant starts production
    https://www.stuff.co.nz/environment/107721548/canterbury-water-on-way-to-chinese-market-as-bottling-plant-starts-production

    Whakatane locals outraged on government’s encouragement of Chinese water bottling investment
    https://www.tvnz.co.nz/one-news/new-zealand/whakatane-locals-outraged-governments-encouragement-chinese-water-bottling-investment

    NZ Government Secretly Funded Water Bottling Companies
    https://www.scoop.co.nz/stories/PO1904/S00055/nz-government-secretly-funded-water-bottling-companies.htm

  9. Thanks Nikki. There is not one supposed benefit from these reforms that could not be solved better by setting up a national government body to assist councils in decisionmaking by providing best practice guidance and assistance in coordination and the establishment of minimum standards.

    And that wouldn’t bring these key resources closer to rape by privatization. Really makes you think.

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