Local Government Magazine

Legal challenge to Three Waters’ proposals

3 waters

By Gary Judd, QC, who is representing the Water Users’ Group, set to oppose the Government’s Three Waters reforms.

The group has filed a legal claim against LG Minister Mahuta in December 2021. Gary outlines the basis of that claim and why the group thinks the Minister has got it wrong.

Water Users’ Group (NZ) Inc has filed a statement of claim against Hon Nanaia Mahuta who brought her three waters proposals to Cabinet. Cabinet agreed to her proposals. The claim names the Attorney-General to represent Cabinet and the Crown.
Everyone is subject to the law. Even a cabinet minister cannot say something is the law if it isn’t. It is the job of the courts to say what the law is.
The claim states that Minister Mahuta got the law wrong when persuading Cabinet to agree to her proposals, so Cabinet proceeded on a false legal basis. The claimant wants the courts to examine the Minister’s reasons and if the courts agree that the Minister got the law wrong, to say so. That can’t stop the government proceeding because if it has the numbers, it can change the law, but if the claimant is correct, everyone will know the government is basing its actions on a legal falsehood.
This note gives a brief explanation of why the claim says the Minister got the law wrong.
The three waters proposal concerns the assets involved in providing or handling the three waters – drinking water, wastewater and stormwater – now owned, managed and delivered by New Zealand local authorities either directly or through council-controlled organisations, or subsidiaries of council-controlled organisations – for short, local authorities.
Most of us live in an area where a local authority supplies our water. We drink it, use it for cooking, washing and so on. What does not stay on the property is taken away as wastewater. In some cases, it is taken away as stormwater (e.g. run-off from washing the car) along with the water which falls from the sky as rain and does not soak into the ground. We pay for the water supplied to us, and for the services provided by the local authority to deliver it and take it away, through water rates or similar charges.
The water delivered to us must first be captured and contained by a local authority so that it is available for delivery. Infrastructure and work are required to capture and contain it, to deliver it, to take it away and in the case of wastewater to treat it in treatment plants before disposing of it. The dams, bores, pipes, sewers, pumping stations, treatment plants and other necessary infrastructure have been built and are maintained and used by local authorities. The infrastructure has been paid for by rates, water rates and other forms of charges imposed on ratepayers and other water users past and present, and through borrowing which is a charge on future users. Service delivery has been and is paid for in the same way.
The infrastructure and associated service industries are owned by local authorities and the water itself, when captured and when controlled is owned by them until it is sold to those who are paying for it who also pay for subsequent disposal.
Legal scholars may argue about what is meant by ownership, but it is certain that if one has no right to use something, to enjoy it, to gain a return from it, to dispose of it, to destroy it, to control it or to control its use, one does not own the thing.
Local authorities now have those rights in relation to the infrastructure and the water whilst it is under the local authority’s control and we, the users, also have some of the rights after the water is delivered to our properties.
The Minister’s proposals, which Cabinet accepted, will take ownership away from the local authorities and transfer it to four legislatively created entities (“controlling entities”). The Minister pretends that the assets will still be owned by local authorities because the legislation will say that the controlling entities are owned by local authorities. But you don’t own something just because someone (even Parliament) says you do, if you have none of the rights of ownership. The purported “ownership” is just fiction.
The controlling entities will be governed by boards selected through a convoluted structure comprising regional representation groups selecting independent selection panels who in turn select controlling entities’ board members.
A regional representation group will have 12 members, six selected by the local authorities within the region and six by ‘mana whenua’ within the region. Decisions will require a 75 percent majority.
When, throughout her papers, the Minister speaks of ‘mana whenua’, as if referring to the indigenous people of the region with implicit connotations of democracy for the Maori people of the region, she is really referring to the Crown-recognised iwi and hapu who have, or have an interest in, or authority over territory in the region. As the claim relates to the Minister’s papers, this note uses the term the way the Minister does.
Local authorities cannot choose the controlling entities’ board members. An individual local authority cannot even be represented on the regional representation group. All an individual local authority within a controlling entity’s region can do is to have a say in the selection of the six who will represent them all. It is impossible for a local authority to exercise any right of ownership in respect of the assets which the legislation will expropriate from them.
The claim alleges that the convoluted structure and other mechanisms contained in the Minister’s proposals and summarised in the statement of claim have the purpose of conferring rights of ownership on what the Minister calls “iwi/Maori”.
She justifies conferring ownership rights on iwi/Maori by the unproven assertion that iwi/Maori have Treaty rights and interests in the three waters. The claim says that the Minister does not explain how iwi/Maori can have Treaty rights and interests in the three waters.
The Waitangi Tribunal has said that iwi or hapu may have Treaty rights in respect of bodies of water within their rohe [territories] with which they had an appropriate connection on six February 1840. That is something which would need to be proved. As the three waters infrastructure has been created after 6 February 1840, it is inherently unlikely, but perhaps not impossible, that an iwi or hapu could have a right or interest in a body of water used within the three waters. It would need to be identified and proved.
“Maori” don’t have Treaty rights or interests in water, in the same way “Maori” don’t have Treaty rights or interests in land. “Maori” is the Maori race. The Minister is wrong to propose taking away assets paid for by all New Zealanders, generations of them, without racial distinction, and to place them in the hands of entities over which ‘mana whenua’ will have substantial influence and control, on the basis that Maori as a race have rights and interests in those assets.
If there are bodies of water within the three waters and the territory of an entity in respect of which iwi or hapu may have a Treaty claim, she is also wrong, and acting inconsistently with the principles of the Treaty, to foreclose the ability of the iwi or hapu to make a Treaty claim.
Therefore, the claim says, for these and other reasons including the mutual and reciprocal obligations under the Treaty of both Maori and the Crown to act with good faith, fairness, reasonableness, honour and justice, the Minister proceeded on an incorrect legal basis, and the courts are asked to declare this to be so.

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