I thank the Chairman and members of the committee for the invitation to be here today to participate in its consideration and scrutiny of the Thirty-fifth Amendment of the Constitution (Water in Public Ownership) (No. 2) Bill 2016, which seeks to provide constitutional protection for the public ownership of the public water system.
Members will be aware that the Bill before us passed through Second Stage in the Dáil in November. At that time a good debate took place with Members on all sides of the House contributing. That debate reinforced the fact that all of us share a common view on the State owning this vital public service. Not once have I heard a dissenting voice in the Oireachtas on this issue.
There are a number of features of the water sector in Ireland that are relevant when considering the Bill. First, the nature of our topography and population dispersal means that we have an extensive number of small, mainly surface water sources, rather than single large aquifers which can be the case in other countries. In addition, the evolution of water services in rural areas has largely been dependent on private or group water investment. Thus the public water utility, Irish Water, is not the exclusive provider of water services, but does provide drinking water to 83% of the population and waste water services to 64% of the population.
Water policy is seeking to ensure the appropriate stewardship of all of the nation’s water resources and that all citizens have access to quality drinking water, across a sector that has multiple stakeholders and varying ownership and delivery structures. That being said, the majority of citizens receive water services from Irish Water, the State’s public water utility, and the concerns raised regarding potential privatisation of water services are focused on Irish Water. That is my understanding from Deputy Collins's Bill.
It may be useful if I set out both the current legislative safeguards to prohibit the privatisation of Irish Water, as well as the current status of work, from my Department’s perspective, on proposals for a constitutional amendment. The Water Services Act 2013 places a clear prohibition on the shareholders of Irish Water, that is, the Minister for Housing, Planning, Community and Local Government; the Minister for Finance; and the board of Ervia, from alienating their shares in the utility. Subsequently, in 2014, the Government introduced a further safeguard through the Water Services Act 2014. Arising from the Act, were a situation ever to arise where any privatisation or part-privatisation of Irish Water was to be contemplated, through alienation of any share in Irish Water to anyone other than another Minister, this could not occur without three specific actions taking place: first, both Houses of the Oireachtas would have to pass a resolution approving such a proposal; second, a majority of voters in a plebiscite would have to give their approval to the proposal; and third, the Minister would then have to initiate legislation to privatise Irish Water or alienate any share held by the Government. In other words a triple lock was put in place in legislation to try to reassure people on this issue.
A key principle in addressing the fragmentation within the system and bringing delivery and strategic planning into a single water utility was that this would be a public utility - a State body in public ownership. The objective of moving from a system of water services delivery by 34 water services authorities towards a single utility approach was to achieve economies of scale, greater efficiency and more effective long-term strategic planning, which I am glad to say is all happening now.
The strong policy intent of the State has always been to maintain public water services in public ownership. This was already reflected in the Water Services Act 2007 and, in transferring functions from local authorities to Irish Water in 2013, the protections in that Act against what is termed “alienation of public water assets” were carried forward into the new arrangements. Concerns that the reform process, initiated in 2011, might lead to the future privatisation of water services, persisted. Recognising these concerns, the previous Government twice legislated on the issue of public ownership of water services to give further protections and I have outlined what those protections were.
Existing legislation, therefore, already provides a statutory prohibition on the privatisation of Irish Water and sets out a range of steps that would need to be taken in the event that the statutory prohibition involved was to be removed. However, despite these legislative barriers to privatisation, people continue to have genuine concerns and I accept that. The Government respects and acknowledges these concerns and the efforts made by the authors of the Bill to address them. Indeed, it was in this context that I asked my officials to meet Deputy Joan Collins and her team to develop a shared understanding of the specific operation of the existing prohibitions and the issues that would need to be carefully considered in further future arrangements.
The possibility of a constitutional amendment to protect public ownership of water infrastructure has been considered previously. The provisions on the plebiscite, reflected in the 2014 legislation, were brought forward as an alternative to a constitutional provision in light of concerns at the time regarding potential unintended consequences of such a provision. They also reflected the fact that the operation of State structures is usually described in legislation approved by the Oireachtas rather than in the fundamental legal document of the State, namely, the Constitution. However, in the intervening period, Opposition Deputies published four similar Bills proposing a constitutional amendment to enshrine public ownership of the water system in the Constitution. Resulting from this, I stated during the Second Stage debate last November in the Dáil that I am open to considering a workable proposal that provides the necessary certainty in respect of the future public ownership of Irish Water. I also indicated that due to the complexity of issues involved in any potential constitutional protection, I reserved my position to propose a Government amendment to the wording on Committee Stage.
Among the issues to be considered in drafting a constitutional amendment are wording challenges arising as a result of the range of categories of infrastructural ownership, achieving a balance between principles reflected in the Constitution and the more detailed policy to be reflected in legislation and addressing the risk of unintended consequences. The last is probably the biggest concern that I have, to be honest, but we can talk through these issues further. Issues around the wording of any amendment arise from the plurality of water infrastructure ownership categories. These include private bore holes, private group water schemes, private group schemes that are sourcing water from the public network and water infrastructure located on privately-owned land. There are also issues to be considered in the context of the potential for unintended consequences that could impinge on individuals’ rights to private property, which are strongly protected in the Constitution. My officials are working with the Office of the Attorney General on the issues arising in order to provide advice to me, the Government and this committee, as this Bill progresses through the Oireachtas. I will possibly be bringing forward amendments to address some of the issues I have outlined.
I recognise where we have come to in terms of the water debates. I also recognise the recommendations that have been made by both the expert commission and the Joint Committee on the Future Funding of Domestic Water Services. This was one of the issues on which there was not a lot of division or contention at the aforementioned committee. I hope that people will accept that there is a willingness to try to be helpful here. That said, I also want to ensure that, in our efforts to put this issue to bed in terms of the concerns around privatisation of our water infrastructure, we do not do something that will prevent the normal functioning and management of Irish Water as a single utility in the context of its efforts to provide safe, efficient and well-run services. I refer here to the infrastructure that needs to be put in place, as well as to the treatment of drinking water and wastewater. I want to ensure that we do not, in some way, freeze Irish Water in its ability to be able to create partnerships and be innovative in its approach to the work it must do. I am also concerned that we do not create unintended consequences for water infrastructure that is currently privately owned through group water schemes and other water infrastructure like, for example, the extensive network of septic tanks and wastewater treatment facilities, many of which are privately owned and operated.
I am anxious to be helpful. I think I know what people are looking for here but we can tease that out further. People want more than reassurance in legislation that could potentially be changed by a future Government with a majority. They want constitutional protection and a permanency in terms of policy in this area regarding maintaining public ownership of core public water infrastructure and the company or, more correctly, the State entity that manages that. That is where I am coming from. If we can tease through the issues while also being willing to take sensible and good legal advice, particularly from the Attorney General's office, then we should be able to work together to get a good outcome.