As the Chairman stated, I am accompanied by Mr. Colm Lavery, principal officer, and Mr. Stephen Dineen, assistant principal officer, from the water division of the Department.
In the context of the committee’s consideration of the issue of providing constitutional protection for the public ownership of the public water system, it may be useful if I set out both the current legislative safeguards to prohibit the privatisation of Irish Water and the current status of work, from the Department's perspective, on proposals for a constitutional amendment. There are a number of features of the water sector in Ireland that are relevant in this context. The nature of our topography and population dispersal means we have an extensive number of small, mainly surface water sources, rather than single large aquifers which can be the case in other countries. The evolution of water services in rural areas has been largely dependent on private or group water investment. Thus, the public water utility, Irish Water, is not the exclusive provider of water services but provides drinking water to 83% of the population and wastewater services to 64% of the population. Therefore, from a broader perspective, water policy seeks 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.
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, that is, 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. This approach is further underpinned by the confidence and supply agreement agreed between the Government and Fianna Fáil in the context of supporting a minority Government, which reflects a commitment to retain Irish Water as a single national water utility in public ownership, responsible for the delivery of water and wastewater services.
In my experience, having worked in this area for a number of years, the strong policy intent 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 the alienation of public water assets were carried forward into the new arrangements. Nonetheless, concerns have been raised that the reform process initiated in 2011 could lead to the future privatisation of water services. Recognising these concerns, the previous Government twice legislated on the issue of public ownership of water services to give further protections. The Water Services Act 2013 places a clear prohibition on the shareholders of Irish Water, namely, the Ministers for Housing, Planning, Community and Local Government and Finance as well as 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 this 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. 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. Third, the Minister would then have to initiate legislation to privatise Irish Water or alienate any share held by the Government. 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.
The provisions on the plebiscite reflected in the 2014 legislation were brought forward as an alternative to a constitutional provision in the light of concerns at the time regarding potential unintended consequences of such a provision. They also reflected the fact that the operations of State structures are usually described in legislation approved by the Oireachtas, rather than in the fundamental legal document of the State. 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. The Minister for Housing, Planning, Community and Local Government has informed the Dáil that he is open to considering workable proposals that provide the necessary certainty regarding the future public ownership of Irish Water.
On 9 November 2016, the Dáil debated one of these Bills, the Thirty-fifth Amendment of the Constitution (Water in Public Ownership) (No. 2) Bill 2016. The Bill passed Second Stage in the Dáil on 9 November 2016 and has been referred to the Joint Committee on Housing, Planning, Community and Local Government for Committee Stage. While the Government did not oppose the Bill, the Minister indicated that, due to the complexity of issues involved in any potential constitutional protection, he reserves his position to propose a Government amendment to the wording on Committee Stage.
The Minister has stressed the need for the legal and technical issues to be carefully teased out during the pre-legislative scrutiny of the Bill. He and the Department are fully committed to assisting the Joint Committee on Housing, Planning, Community and Local Government in this endeavour. Among the issues to be considered in drafting a constitutional amendment are wording challenges arising owing to the range of categories of infrastructural ownership, achieving balance between principles reflected in the Constitution and the more detailed policy to be reflected in legislation, and addressing the risk of unintended consequences. Issues around the wording of any amendment also 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 around the potential for unintended consequences that could impinge on individuals' rights to private property.
As I indicated, the Bill has been referred to the Joint Committee on Housing, Planning, Community and Local Government. In parallel, the Department is working with the Office of the Attorney General on the issues arising to provide advice to the Minister and Government as the Bill progresses through the Oireachtas and possibly bringing forward amendments to address some of the issues I have outlined. I trust this clarifies the position and I will be pleased to respond to questions.
