Thomas Cranmer: Three Waters and the Water Services Entities

WE ARE TOLD the water services entities will be independent bodies run by professional boards – but how independent will these entities really be and who will sit on their boards?

This article is the fourth in a series by Thomas Cranmer, the pseudonym adopted by a legal analyst who has been carefully dissecting the Three Waters legislation.  He writes: 

Whilst co-governance has been an undeniable source of contention during the Three Waters reforms, the Government has repeatedly reminded the public that this is only a feature of the Regional Representative Groups and will not be a feature at the operational level of the structure. When the Water Services Entities Bill was introduced to the House, Minister Mahuta reiterated this point in an interview with RNZ:

“In fact, co-management arrangements are at the strategic level – that is not at the professional board level – who will have a focus group of directors to undertake that role.”

In her speech to the House Mahuta highlighted this fact by stating that:

“… the entity boards will be made up of people hired for their expertise and skill in water services delivery.”

Sounds simple enough – but is this really the case?

As we know, the Regional Representative Groups are made up of a 50:50 split between council representatives and those appointed by mana whenua.

The RRGs are required to set up a Board Appointment Committee who collectively have expertise in relation to performance monitoring and governance; network infrastructure industries; the principles of te Tiriti o Waitangi/the Treaty of Waitangi; and perspectives of mana whenua, mātauranga, tikanga and te ao Māori.

It will be that Board Appointment Committee which will prepare an appointment policy that sets out the collective or individual experience, qualifications, skills, or expertise required of members of the water services entity’s board.

In fact Eugenie Sage was more revealing in her speech to the House than Minister Mahuta when considering the boards of the water entities:

“The regional representative groups will appoint the committee which appoints the board of the water services entity. Those boards are to be competency based. Those competencies include mātauranga Māori, tikanga Māori, and an understanding of Te Ao Māori.”

The risk, of course, is that this process will select only those individuals that hold the same radical views on the Treaty and related matters as the current Government and that cultural correctness will overshadow technical expertise.

Ironically, although the Bill states that in making an appointment, the board appointment committee must take into account the desirability of promoting diversity in the membership of the board, one gets the feeling that there will not be diversity of thought.

And in the case of any technical experts that are appointed to the board, the Bill also provides that it maintains systems and processes for the continuing education of all board members to gain knowledge of, and experience and expertise in relation to, the principles of te Tiriti o Waitangi/the Treaty of Waitangi. In other words, everyone is going to get with the programme.

Once appointed, things don’t get any better. The Bill is exceptionally clear in requiring that anyone exercising duties, functions or powers under it (including the water entity boards), must give effect to the Treaty and to Te Mana o te Wai – the only matter that this principle is subject to is that Treaty settlement obligations must prevail over everything.

This is the foundational non-negotiable principle of the Bill – not the improvement of water delivery services which features lower down the pecking order.

Each water service entity will have a constitution – currently being prepared by the Government – which could also include additional qualifications or requirements for the directors as well as placing other requirements on the board.

Thus whilst each board of a water entity will be accountable to the relevant Regional Representative Group, they will also be required to engage with, and understand the perspectives of mana whenua which includes giving effect to the Te Mana o te Wai statements issued from time to time.

In addition, each of the water service entities will be incurring substantial amounts of debt in the international financial markets and will therefore also need to comply with the terms and requirements of that debt and manage a large syndicate of international creditors.

The Government, too, has an opportunity to periodically issue a policy statement which can set out its priorities for water services, its expectations in relation to Māori interests, partnering with mana whenua and giving effect to Te Mana o te Wai, and how it expects water services entities to take into account the well-being of communities.

Overseeing compliance, as the service regulator, will be Taumata Arowai – and specifically the sister of Minister Mahuta, in her role as Chair of the Maori Advisory Group.

There is currently consideration being given as to how economic and consumer regulation of the entities will be structured.

Lastly, and somewhat forgotten in this legislation, are the consumers and ratepayers upon whom all of the risk of this structure falls and who will have their own set of expectations by which they will measure the boards. There will, rightly, be intense public scrutiny of the performance of the water entities boards.

All of this gives one the impression that the boards will be pulled in many different directions at once. It would appear that their skills will need to include multi-tasking, people-pleasing and pulling rabbits out of hats.

For the headhunters it will be a tough (but presumably profitable) gig to fill the board seats although I’m sure Minister Mahuta will have a few suggestions.

To anyone considering taking a seat on one of these boards my advice is to remember Homer:

If you serve too many masters, you’ll soon suffer

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