ICEL Conference 18 October 2012
Current policy issues in the water sector and the establishment of Irish Water
Mark Griffin
Assistant Secretary
Department of the Environment, Community and Local Government
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Introduction
We are at the start of a huge transformational programme in the water sector. On foot of
commitments in the Programme for Government, the Government has decided to establish Irish
Water a new State owned, independently regulated, water utility and to install water meters in
households connected to public water supplies to facilitate the introduction of domestic water
charges. This programme of work will be underway for several years leading to a fundamental
change in how water services are organised, delivered and funded in the State.
We are moving now from what has been largely a planning phase for the water reform
programme to a policy, legislative development and implementation phase with very significant
activity and milestones to be achieved over the next few years.
EU Water Policy
Water policy in Europe has become increasingly more ambitious and sophisticated requiring a
more holistic approach to protecting waters. Both the Water Framework Directive and Marine
Strategy Framework Directive underpin this fundamental shift in European water policy
establishing the legal framework to protect and restore clean water across Europe with the aim
of ensuring its long-term, sustainable use.
Both directives require the establishment of a cyclical adaptive management approach to water
management based on an assessment of environmental status of waters, the establishment of
environmental objectives, the development of programmes of measures to deliver objectives
and comprehensive monitoring programmes to measure progress. Achieving the objectives is
dependent on better integration of water policy with other relevant policies such as the
Common Agricultural Policy and land use management policy.
The directives establish several innovative principles for water management, including public
participation in the planning stages and the integration of economic approaches, including the
recovery of the cost of water services and uses (service provision, environmental costs and
resource costs) and the incorporation of economic considerations into decision making.
Achievements to-date
Significant progress has been made in Ireland since the Water Framework Directive came into
force in 2000:
 Seven River Basin Districts were established consisting of approximately 5,000 surface
water bodies and 560 groundwater bodies;
 Duties were assigned to public bodies, principally the local authorities and the EPA;
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Working groups were established to oversee the delivery of technical deliverables and
the planning process also involved many public bodies working closely together for the
first time;
River Basin Advisory Councils were established to facilitate public participation in the
river basin planning process;
Detailed assessments were undertaken of the pressures on water resources (e.g.
pollution inputs, abstractions, physical alterations) and comprehensive national
monitoring networks were established to assess the status of all waters.
The process generated substantial new environmental datasets which will be used to support
future management decision including the maps of groundwater and surface water bodies,
environmental pressures (e.g. pollutant sources) and vulnerabilities (e.g. groundwater
vulnerability to pollution), water status and so on. The final plans established time based
environmental objectives for waters and set out planned management measures across sectors
for delivering objectives.
Lessons learned
While Ireland has managed to deliver on milestones to date due to the significant efforts of
public bodies, the process of developing the plans has been complex and challenging and has
flagged up a number of deficiencies in the existing delivery architecture:
 Responsibility for implementation of the plans is currently assigned across a range of
organisations with no single body having ultimate responsibility;
 The current administrative systems are fragmented along administrative lines and do not
facilitate analysis, identification and implementation of the most cost-effective solutions
to manage water quality holistically at river basin level. You can get a good sense of the
challenges when you consider, for example, that Shannon RBD covers 18 local
authorities;
 In addition, the implementation of many of the measures necessary to achieve the
objectives of the plans is the responsibility of national rather than local authorities.
Given the complexity of the exercise, it is to the credit of the many organizations involved in the
development and publication of the first cycle river basin management plans that the process,
which started in earnest in 2004, was completed in July 2010, just six months after the due date.
With the benefit of hindsight, it is clear that the roles and responsibilities established in the 2003
Water Policy Regulations could have been assigned more appropriately. When you look at the
2003 Regulations we find that they assign a general duty on every public authority to exercise
their functions in a manner consistent with the provisions of the Directive. The Minister is
required to “promote the coordinate implementation” of the Directive. The EPA is given powers
to take such measures as it considers appropriate to “promote and facilitate the coordination of
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activities in pursuit of the objectives of the Directive.” The local authorities ‘acting jointly’ are the
designated competent authorities for the actual making of river basin management plans and
their associated programmes of measures. Within each river basin district, one local authority is
designated as a coordinating authority.
Looking more closely at the actual tasks assigned by the Regulations we find that many of the
key responsibilities were assigned to the local authorities including:
 analysing the characteristics of the river basin district;
 reviewing the impact of human activity on water quality;
 conducting an economic analysis of water use;
 ensuring compliance with Article 9 of the Directive which deals with recovery of costs of
water services and water-pricing policies; and crucially,
 establishing environmental objectives, programmes of measures and river basin
management plans.
In the first instance, these are specialised tasks, the skills for which were not readily found within
the local authority structure. Secondly, the local authorities, even working in concert within
river basin districts, were not in a position where they could bring national authorities together
from agriculture, industry, energy and other sectors to manage the water resource in an
integrated fashion.
In any event, because of their potentially conflicting roles as the regulator and the regulated in
relation to the provision of water services and the licensing of discharges to sewers and waters,
the local authorities were faced with real challenges in implementing the river basin
management plans.
Against this background and one of severe public funding difficulties there is a growing need to
strengthen and adjust the existing administrative structures to ensure cost effective delivery of
the river basin plans including enforcement of relevant legislation, across local, regional and
national levels.
These were some of the principal reasons why the Department, the EPA and the local
authorities, have together been looking at introducing new governance arrangements with clear
roles and defined responsibilities, to support effective implementation of the Directive. One of
the key principles that has informed these discussions is the need to have roles and
responsibilities assigned to the most appropriate level in the system.
What has emerged from the discussions is broad agreement on a proposed three-tier model:
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Tier 1 is intended to be a high-level management group comprising representatives of the
key Departments, agencies and authorities. It is at this level that the integration of
sectoral policies will be addressed;
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Tier 2 would see the EPA taking an expanded role in river basin planning and oversight;
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Tier 3 would see the local authorities playing a key role in operational implementation
(mainly enforcement activities) through greater use of networks. There would be close
links and dependencies between the tiers and the model is likely to be underpinned by
service level agreements.
Reforming water abstraction management
One further area that requires mention is the area of water abstractions. The Water Framework
Directive places a clear duty on the State to manage water resources sustainably. This means
that the State must exercise responsible management of all existing and future water
abstractions ensuring there is sufficient water for people, businesses, agriculture and the
environment.
The existing corpus of water policy legislation, at best, only indirectly and inadequately deals
with the environmental aspects of water abstractions and falls short of the requirements of the
Water Framework Directive. For example, while the 1978 Water Pollution Regulations require
local authorities to maintain a register of water abstractions above 25m 3 they do not provide for
the control of water abstractions. There are also issues with the implementation of these
regulations and with the completeness and quality of the data. While a major exercise was
undertaken as part of the River Basin Management Plans to improve the data insofar as public
and group water supplies are concerned we still have an incomplete picture in relation to
industrial, commercial and small private abstractions.
Water Policy legislation
What do these policy issues mean for our legislation?
The European Commission is close to completing a major analysis of the implementation of the
Water Framework Directive and a ‘fitness check’ of the EU legislation in the area of water
quality. The output of this analysis will be a Blueprint for the Protection of European Waters,
due for publication next month. Perhaps not surprisingly, one of the main findings emerging
from this analysis is that while the legislation is good, much remains to be done across the EU on
integrating water policy objectives with policies in other relevant sectors such as agriculture,
industry and energy.
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Irish water legislation has evolved over several decades and as a consequence it is not surprising
that it is now fragmented, it is dated and it needs consolidation and enhancement in a number
of respects. There is a wide range of water policy legislation, both primary and secondary,
covering issues such as drinking water, urban waste water, bathing waters, nitrates, shellfish
waters, septic tanks, surface water and groundwaters.
In addition to the consolidation work, areas that need attention include:
 The definition of water services. On this point, Ireland, like a lot of Member States, has
held what might be considered to be a ‘traditional’ understanding of water services,
extending to the provision of drinking water and the collection and treatment of
wastewater. The definition of ‘water services’ in the Water Services Act, 2007, is
consistent with this interpretation. The European Commission, on the other hand, holds
the view that ‘water services’, as defined in the Water Framework Directive, includes
water abstraction for the purpose of, for example, irrigation or cooling industrial
installations; the impoundment or storage of waters for hydro-power or navigation
purposes; and well-drilling for agricultural, industrial or private consumption. The
Commission is of the view that the narrower definition as adopted by a number of
Member States hinders the full and correct application of the Directive by excluding
these services from the principle of cost recovery of the environmental and resource
costs of water use. Reconciling these views, and considering, what, if any impact, they
have on the approach to water pricing policy will be necessary.
 The need for a register of water abstractions and, to the extent necessary, a system of
prior authorisation for abstraction and impoundment;
 A stronger governance structure for river basin management planning which facilitates
greater policy integration and therefore greater potential for meeting objectives and
implementation of programmes of measures and which also provides for a sound
approach to public participation;
 Our approach to water charges and how our charging policy should be aligned with
Article 9 of the Water Framework Directive. Under the directive the recovery of costs
refers to several elements. These include that the prices users pay for water should
cover the operational and maintenance costs of its supply and treatment and the costs
invested in infrastructure. But the directive goes further and requires that prices paid by
users also cover environmental and resource costs. The introduction of water charges
provides an opportunity to set a clear policy in relation to the funding of water services.
Irish Water
There are essentially three inter-related components to the Government’s proposed programme
of reform for the sector and to date decisions have been taken by Government to:
 establish Irish Water as an independent state owned company within the Bord Gáis
Group based on a public utility model;
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introduce a sustainable funding model to support much needed investment in the sector,
in line with the commitment in the Programme for Government and the Memorandum
for understanding with the EU/IMF/ECB and this will include the introduction of water
charges for domestic users, and
establish an independent economic regulator for water services, a function being
assigned to the Commission for Energy Regulation.
An independent review undertaken last year concluded, based on an analysis of the strengths
and weaknesses of the current system, international experience and stakeholder soundings, that
a public utility offers the best opportunity to improve the efficiency and effectiveness of water
services delivery, provide access to new funding sources, and improve strategic planning and
accountability. The fragmentation of the current structures, the inability to achieve real
economies of scale in delivery and operation, and the major investment challenge that remains
at a time of severe constraints on the public finances, means that new approaches are
necessary.
Moving from where we are now with 34 separate water services authority to one national public
water utility by end 2013 and the introduction of water charges will mean that over the next 15
months we will have to:
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Establish Irish Water as a subsidiary of Bord Gáís;
Establish a Regulator for Water Services within the existing structures of the Commission
for Irish Water;
Develop the organisational model for Irish Water and address the human resources
implications;
Finalise the procurement process for the water metering programme and commence the
installation of water meters in over 1m households;
Establish a customer database and billing system as well as a customer services call
centre;
Finalise a water pricing framework and agree the tariffs to apply along with affordability
measures for vulnerable groups; and
ultimately transfer the water services functions from the 34 water services authorities to
Irish Water.
Meeting these commitments and delivering on these milestones involves a significant
restructuring of the water services sector and will require a comprehensive package of
legislation.
There are a number of specific objectives under the legislative work programme which must be
met over the next 12 months. These include:
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The establishment of an interim ‘Irish Water’ and the assignment of the appropriate legal
powers to it;
The establishment of an economic regulator for water services;
The establishment of Irish Water under its own statute; and
Providing a legal basis for Irish Water to charge for water services.
It is envisaged that the legislation will be introduced in at least two phases.
Interim Legislation
The first Bill has two main objectives.
The first objective is to assign certain powers of a water services authority to Bord Gáis. Pending
the establishment of Irish Water under its own statute, it is important that Bord Gáis can
commence certain activities including:
 The installation of water meters in households connected to public water supplies;
 The creation of a database of domestic customers;
 The preparation for the transfer of functions from the 34 water services authorities to
Irish Water.
The second objective of the interim legislation is to establish an economic regulator for the
water services sector. The Government decided earlier this year that the Commission for Energy
Regulation would be assigned responsibility for the economic regulation of water services, with
the EPA remaining responsible for environmental regulation. The current Bill will also expand
the statutory role of CER to include water services.
The aim is to have the Bill published and enacted before the end of this year.
Permanent Legislation
The next phase of the legislative reforms will address the more permanent aspects of the reform
process and will focus on the establishment of Irish Water under its own statute during 2013.
This will be a major piece of legislation, setting down the legal basis for the transfer of water
services from the 34 water services authorities to Irish Water. The Department has commenced
work on the preparation of this legislation. There are a number of elements related to the
establishment of Irish Water that will need to be addressed in the Bill. These include:
 The legal structure of Irish Water;
 The Corporate Governance arrangements for Irish Water, including accountability to the
Minister and to the Oireachtas;
 The Governance relationship between Irish Water and the Bord Gáis Group;
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The relationship between Irish Water and the economic and environmental regulators;
The timescale for the transfer of functions from the local authorities to Irish Water; and
The legislative basis for the proposed service level agreements between Irish Water and
the local authorities.
In addition to establishing Irish Water under its own statute, there is a broader task of ensuring
that a wider body of legislation in the area of planning and development, and emergency
planning are aligned with the restructured delivery model. The legislation will need to ensure
that the relationship between Irish Water and the Local Government Sector is fit for purpose and
a review of local government legislation as well as planning legislation will be undertaken.
A review of environmental legislation is also required. There is a suite of environmental
legislation, placing specific obligations on water services authorities in relation to drinking water
quality and waste water treatment. A number of amendments will be required to ensure that
that these obligations are mapped across to the new utility.
The legislation will also need to establish a legal basis for Irish Water to charge for water
services. The legislation relating to water charges will need to be updated and the policies and
principles for charging addressed in the Bill.
ENDS
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