'Combative and intransigent' bureaucrats white-anted attempts to regulate stormwaters and set in place consumer protections, says one MP
Faceless Internal Affairs officials went behind the backs of MPs to make "unauthorised" changes to the bills setting in place the Government's Three Waters reforms, a Parliamentary select committee says.
The breakdown in relations between the department and elected representatives is being described as unprecedented by some MPs.
The unanimous rebuke from Government and Opposition MPs is grounds for concern about the relationship between the executive and Parliament, says Wellington constitutional law expert Graeme Edgeler. "Very much so," he says. "More so than in other cases, because what has happened is obviously worse than has happened in other cases."
READ MORE: * Law change empowers a new consumer advocacy agency for water * Time to pay the piper for Three Waters IT system * Councils say Three Waters erodes flood response
"This is the shot across the bow. It's indicative of the ongoing problem we have in New Zealand, that Parliament is highly dependent on the executive for advice on bills and drafting. The people who are amending the bill don't work for Parliament, but for the Government."
The finance and expenditure select committee is chaired by the Labour MP Ingrid Leary, and a majority of its members are from the Government, yet they have united with Opposition members in rare agreement over problems with officials capturing the process – a criticism that has previously been levelled by opponents of the Three Waters reforms.
“We are concerned there were instances where it appeared that departmental officials, perhaps inadvertently, directed Parliamentary Counsel to make changes to the revision-tracked version of the bill that were either not clearly authorised by us.” – Finance and Expenditure select committee
"We wish to put on record that we did experience some problems during our scrutiny of the bill and the preparation of this report to the House," the committee reports.
"We are concerned there were instances where it appeared that departmental officials, perhaps inadvertently, directed Parliamentary Counsel to make changes to the revision-tracked version of the bill that were either not clearly authorised by us, or ran contrary to recommendations."
A select committee is constitutionally independent of government and doesn't just advise on changes to legislation – it actually makes the changes then returns the amended bill to the House to be voted on.
“I expect officials to work well with select committees.” – Kieran McAnulty, Local Government Minister
The legislative process requires that amendments are included in a revision-tracked version of the bill – only at the direction of a majority of the elected MPs on the committee.
"The principle of informed decision-making by elected representatives sits at the heart of a democratic legislative process," the committee report says.
Local Government Minister Kieran McAnulty gave a terse response to the criticism of his department officials. "I expect officials to work well with select committees," he tells Newsroom.
"The select committee worked constructively together and have improved the bill, which I am grateful for. Since taking over the local government portfolio I’ve been open to refining things wherever possible."
“With respect to the behaviour and actions of Department of Internal Affairs staff, at times their responses were combative and intransigent when asked to respond to requests from committee members.” – Simon Court, ACT Party
Internal Affairs' local govt arm is headed by deputy chief executive Michael Lovett. Hamiora Bowkett reports to him as executive director of the reform programme, and Heather Shotter as executive director of the national transition unit. But last night, none of them would respond to the MPs' criticisms.
Newsroom has asked whether they accepted the MPs’ criticism that they subverted the democratic legislative process. They've been asked what changes they wrongly made to the bills, what disciplinary action will now be taken, and whether the department’s leadership will be apologising to MPs.
They've been asked whether the department will be reviewing its actions, with regards to other bills before this and other select committees.
Newsroom also approached all the MPs on the committee for comment on the report, and they were more forthcoming.
According to the ACT MP Simon Court, the officials' intervention was most pronounced around attempts to regulate stormwater services and, in an accompanying bill, attempts to provide consumer protections in the relationship between the big new water corporates and housing developers.
"With respect to the behaviour and actions of Department of Internal Affairs staff, at times their responses were combative and intransigent when asked to respond to requests from committee members," he tells Newsroom.
“With only 24 sitting days of parliament left before the election, the Minister is fast running out of runway to meet his commitment to legislate the 10 new water entities ... It will once again be rammed through under urgency with limited public scrutiny.” – Simon Watts, National Party
The National MP Simon Watts declines to discuss the behaviour of the officials, saying the minister is accountable for those issues. But he does note the key change to make the new water services entities responsible for managing stormwater networks through private land, particularly in flood-hit Auckland. "How this will impact councils and ratepayers is a question for the minister," he warns.
Committee chair Ingrid Leary declined to expand further on the committee's criticisms. "Everything we have to say about process is in the commentary," she says.
The amended bill, reported back to the House this week, allows councils to retain control of water contractors working for their council-controlled works organisations, as revealed by Newsroom last month. It doesn't increase the number of regional water corporations from four to 10, as McAnulty has promised – that will have to be done in a further amendment bill which will be introduced this month.
That will likely have to be passed under urgency, to meet McAnulty's deadlines before Parliament rises for the election.
“With only 24 sitting days of parliament left before the election, the minister is fast running out of runway to meet his commitment to legislate the 10 new water entities and delay the commencement date to mid 2026," Watts says. "It’s clear, if this remains his intent, then it will once again be rammed through under urgency with limited public scrutiny."
This morning, McAnulty says there will be an opportunity for public feedback on the additional amendment bill to create 10 entities – but he reiterates his determination to speed its progress: "The Government intends to pass all legislation to give effect to the water services reforms before the House rises for the General Election 2023."
He says many of the committee's changes are "technical amendments" in response to submissions, that will ensure it is workable for water services entities and communities.
The committee's main changes to the water services reforms are around the way stormwaters are included as the third of the Three Waters. Court says MPs were concerned about the difficulty the water entities faced in absorbing stormwater functions outside of piped networks, and the crossover with local government land use planning and natural hazard management.
"Officials appeared unable or unwilling to accept that the issues raised by committee members required additional consideration and drafting to address the complex issues."
In the end, however, the committee voted to change the bill to make the new water corporations responsible for managing stormwater networks through private land – especially in Auckland, where a bylaw lays the responsibility at the door of the property owner.
"The recent extreme weather events have highlighted the importance of adequate maintenance of watercourses that are part of the stormwater network," the report says. "An urban stream can run through dozens of properties. All it takes is one property owner to leave a blockage and entire neighbourhoods can experience catastrophic flooding as a result."
So the committee has changed the bill to make the water corporations primarily responsible for managing and maintaining all watercourses, even over private property. The report acknowledges this is a "significant addition" to the water entities' operational responsibilities.
In addition:
► The Water Services Legislation Bill now addresses councils' concerns by making the relationship agreements between local authorities and the new water corporations legally binding. They must formally agree how they will work together on stormwater management, spatial and land use planning, emergency management, and Treaty settlement obligations;
► There is now a provision to take disputes to arbitration if they can't be otherwise resolved;
► Kāinga Ora must pay water infrastructure contribution charges, like other housing developers;
► Committee changes to the accompanying Water Services Economic Efficiency and Consumer Protection Bill create a new Three Waters consumer advocacy group.
There's been a long list of MPs who read the 574 submissions, heard 190 of those orally, and concurrently considered the changes to the two water reform bills.
The numerous changes to committee's membership were in part driven by the retirement of Jacinda Ardern, and Chris Hipkins' ensuing Cabinet reshuffle. Former committee chair Barbara Edmonds was promoted to Cabinet in February, then her successor Rachel Brooking became a minister outside Cabinet in April.
That left Leary as the new chair from April 17. She was joined at different times by Labour's Glen Bennett, David Clark, Shanan Halbert, Anna Lorck, Dan Rosewarne, Phil Twyford, Helen White and Vanushi Walters; National's Andrew Bayly, Simon Watts, Nicola Willis and Michael Woodhouse; ACT's Damien Smith and Simon Court; and the Green Party's Chlöe Swarbrick, Eugenie Sage and Teanau Tuiono.
