The legislative framework enabling and governing our operations as the provider of water and wastewater services in Auckland is found largely in four Acts:

• Local Government Act 2002

• Local Government (Tamaki Makaurau Reorganisation) Act 2009

• Local Government (Auckland Council) Act 2009

• Local Government (Auckland Transitional Provisions) Act 2010

We manage our operations in accordance with New Zealand law, under a regulatory and legislative framework specific to Watercare and other water services entities.

Our primary responsibility is set out in section 57(1)(a) of the Local Government (Auckland Council) Act 2009. We are required to manage our operations efficiently to ensure the overall costs of water supply and wastewater services to our customers (collectively) are kept at the minimum levels, consistent with the effective running of our business and maintaining the long-term integrity of our assets.

In addition to the requirement above, the combined legislative framework provides that we:

• Are owned by Auckland Council and must give effect to its Long-Term Plan (LTP) as well as other relevant plans and strategies regulatory framework

• Have a statutory obligation to maintain drinking and wastewater services in Auckland

• Are responsible for borrowing in our own name, without any financial support from Auckland Council, from 1 July 2025

• Must repay all debt to Auckland Council by 30 June 2030

• Must not pay any dividend or distribute any surplus to Auckland Council

• Must have our financial statements, Statement of Intent, and specified long-term plans audited by the Auditor- General, or by an auditor acting on behalf of the Auditor-General

• Must have regard for public safety in relation to our structures.

The Local Government (Water Services) Bill was introduced into Parliament in December 2024. The Act, which includes enduring settings for a comprehensive economic regulation regime, is expected to come into force in mid-2025 with permanent economic regulation due to take effect in July 2028.

Interim economic regulation

Until comprehensive economic regulation is implemented, we are subject to interim regulatory oversight by a Crown Monitor (being the Commerce Commission), with requirements outlined in a ‘Watercare Charter’ (Charter). The Charter is in effect for the three-year period until 30 June 2028 and was passed as secondary legislation in on 6th March 2025. The Charter provides for:

• Minimum service quality standards

• Financial performance objectives

• The interim price-quality path

• Performance requirements.

Also under the legislative framework:

• We became a substantive council-controlled organisation (CCO) on 1 July 2012.

• At least two board meetings a year are required to be held in public: one before 30 June to consider the council’s comments on the draft statement of intent (SOI) for the upcoming financial year, and one after 1 July to consider our performance under the SOI for the previous financial year. In practice, all board meetings have a session open to the public.

This bylaw serves as a legally binding mechanism that enables us to protect our water supply and wastewater network assets. It replaces Auckland’s eight previous water supply and wastewater bylaws, standardising regulation across the region.

The bylaw covers various matters including:

• avoiding illegal or inappropriate connection to or disconnection from our network

• ​protecting our network from damage, misuse and interference

• requiring appropriate standards for infrastructure that will be vested as public assets

• enabling the restriction of water supply to maintain an adequate supply of drinking water in a drought or other emergency.

Taumata Arowai – the Water Services Regulator Act 2020:

• Under this legislation the principal regulators for water quality include Auckland Council, Waikato Regional Council and Taumata Arowai.

Water Services Act 2021:

• This Act requires all persons who perform or exercise functions, power and duties under the legislation to give effect to Te Mana o Te Wai. These parallels requirements imposed on local authorities under the National Policy Statement for Freshwater Management, and on Taumata Arowai under the Taumata Arowai – the Water Services Regulator Act. In particular, the purpose of the Act is to ensure that drinking water suppliers provide safe drinking water to consumers. New drinking water rules and standards came into effect on 1 July 2022.

Te Puna (Taumata Arowai):

• As part of its governance arrangements, Taumata Arowai has Te Puna – Māori Advisory Group that is charged with advising on Māori interests and knowledge as they relate to the objectives, functions and principles of Taumata Arowai. This includes developing and maintaining a framework that provides advice and guidance on how to interpret and give effect to Te Mana o Te Wai and providing advice on how to enable mātauranga Māori, tikanga Māori and kaitiakitanga to be exercised.

Health Act 1956:

• Schedule 1AA includes transitional provisions relating to fluoridation of drinking water and aims to protect public health by improving drinking-water qualities in communities.

Health and Safety at Work Act 2015:

• Sets out the principles, duties and rights in relation to workplace health and safety. A guiding principle is that workers and others must reasonably be given the highest level of protection from workplace health and safety risks.

Climate Change Response Act 2020:

• Creates an obligation for us if the Minister or the Commission makes a request for information as provided for at subsection (1).

Resource Management Act 1991:

• Focuses on the health of the environment but is soon expected to be repealed and replaced with the Natural and Built Environment Act and Spatial Planning Act.