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Focus: New water reliability and safety framework in Queensland

4 June 2008

In brief: A new regulatory framework for recycled water and the safety and reliability of the water supply in South East Queensland has been set by the recently enacted Water Supply (Safety and Reliability) Act 2008. Senior Associate Suzy Cairney and Lawyer Scott Watson explain.

How does it affect you?

  • The Water Supply (Safety and Reliability) Act 2008 will have implications for almost everyone in South East Queensland, in particular:
    • if you are in the recycled water industry, you will be affected by the new requirement for the production of recycled water management plans;
    • owners and operators of water infrastructure that will receive recycled water or that provide drinking water are also regulated under this Act; and
    • users of water that will shortly include recycled water, businesses and individuals have a vested interest in ensuring the continuity of supply of good quality drinking water, which is critical to the economic future of Queensland.

Background and purpose of the Act

The Water Supply (Safety and Reliability) Act 2008 (the Act) was passed by the Legislative Assembly on 15 May 2008 and was assented to on 21 May 2008. Its main provisions will commence upon a date to be fixed by proclamation.

The Explanatory Notes to the Act state that key drivers for the Act include supporting the delivery of high-quality purified recycled water by the Western Corridor Recycled Water Project. The Act has clearly been drafted with this project in mind.

Recycled water and drinking water

The Act has four main implications for the supply of recycled water.

Regulating recycled water

The Water Act 2000 (Qld) provided for the establishment of a regulator to register service providers, review standards and practices and monitor compliance with the Act. These provisions have now been moved into the new Act, and the Department of Natural Resources and Water, through the Office of the Water Supply Regulator, will now regulate the supply of drinking and recycled water.

The Act also addresses recycled water management.1 Recycled water is any of the following that are intended to be re-used:

  • sewage or effluent sourced from a service provider's sewerage;
  • greywater sourced from a large greywater treatment plant within the meaning of the Plumbing and Drainage Act 2002 (Qld); and
  • wastewater, other than wastewater as mentioned above.

The Act therefore clearly applies only to major recycling plants and not to 'back yard' style water recycling. Most of the obligations under the Act fall on the 'recycled water provider', which is generally the entity that owns infrastructure for the production and supply of recycled water.

The recycled water management plan is now a critical document in the provision of recycled water and the Act sets out the purposes and required contents of this plan.2 A recycled water management plan amounts to a risk identification and management tool, except that this tool must now be approved by the new regulator. The regulator has 80 business days (and in some cases more) in which to approve this plan. The required contents of the plan are quite broad and only experience will tell as to the level of detail that will be required by the regulator. In any case, the time necessary to prepare and obtain approval for recycled water management plans must now be factored into relevant projects (although some transitional provisions apply).

To ensure compliance with these requirements, the Act makes it an offence for a recycled water provider to supply recycled water without an approved recycled water management plan, (unless an exemption exists) or to fail to comply with the conditions of an approved recycled water management plan.3 Substantial fines can be imposed in relation to each offence.

The regulator may issue compliance notices in relation to drinking water providers or recycled water providers for contravention of the Act. Failure to comply with a direction of the regulator can also result in a substantial fine. The Act also allows authorised officers to enter premises and to exercise certain emergency powers.

Quality

The Act creates a framework for the regulation of drinking water to ensure the protection of public health (previously there was no regulatory framework governing the quality of drinking water in Queensland). This is achieved through the obligation on drinking water service providers to prepare an approved drinking water quality management plan, which is assessed against water quality criteria prescribed under the Public Health Act 2005 (Qld). It is intended that Queensland Health will play a key role in the regulation of recycled water and drinking water throughout Queensland.

Drinking water service providers are now required to supply water for drinking purposes that is not 'unsafe'.4 The supply of drinking water that the supplier knew or should reasonably have known was 'unsafe' is an offence attracting large fines and up to two years' imprisonment.

To protect public health, the Act requires a drinking water service provider to notify the regulator of any incidence where the water quality is not consistent with the relevant drinking water quality management plan.5 Similar obligations apply to recycled water providers for non-compliance with an approved recycled water management plan.6

Because recycled water may be included in the public's drinking water supply in the near future, the Act obliges a recycled water provider to prepare a validation program for approval by the regulator. This program must document how the recycled water will meet the drinking water quality criteria.

Continuity

The Act introduces the concept of 'critical water infrastructure'.7 This allows the regulator to declare certain infrastructure to be 'critical water infrastructure' and, in some cases, the regulator is required to make such a declaration (for example, where recycled water is supplied or is proposed to be supplied to augment the supply of drinking water).8

This declaration has several implications that are designed to ensure that the supply of good quality water from these facilities continues. Specifically:

  • no exemption is given to critical water infrastructure from the requirement to have an approved recycled water management plan;9
  • in most cases, at least 60 days' notice must be given to the regulator before the supply of recycled water from critical water infrastructure can permanently cease;10 and
  • the regulator can step in and operate critical water infrastructure in certain circumstances.11

Each of the above requirements could have implications for those currently negotiating contracts for the provision and operation of these types of facilities.

The Act provides for a compulsory dispute resolution process where there is an unresolved dispute between parties to a 'multiple-entity recycled water scheme' (being a scheme involving the production and supply of recycled water by a recycled water provider and at least one other entity), and an approved recycled water management plan exists, and the dispute is likely to adversely affect public health or continuity of operation of the scheme.12 The dispute resolution process will be provided under a regulation to the Act. However, it is clear that the Act only anticipates arbitration or mediation as possible methods of dispute resolution, and the regulation will prevail over any inconsistent contractual conditions. This could have significant implications for parties who may have already spent considerable time and effort agreeing a dispute resolution process for dealing with complex and commercially significant disputes.

Liability

The State is now responsible for public health risks associated with the provision of drinking water by a drinking water service provider or a recycled water provider. The responsibility previously fell on local governments.

Recycled water is a relatively new product and the effects on humans and the environment of its long-term use are not yet fully known. The Act therefore recognises the need to offer some form of protection from the potentially huge liability that water industry players could be subjected to through the use of recycled water.

The Act provides that a service provider or operator is not liable for damages arising out of an event or circumstance beyond their control, provided they acted reasonably and without negligence.13 This protection previously appeared in the Water Act 2000 but has been amended and moved to the new Act.

The amendments have extended the protection to include operators of particular infrastructure of State significance, but the protection itself may have been diminished. Previously, certain events were deemed to be 'beyond the control' of the service provider or operator. Now, under the amended provision, the service provider or operator must establish not only that it acted reasonably and without negligence, but that the event was beyond its control.

Interestingly, desalinated water is included in the definition of 'manufactured water' for the purpose of this protection from liability, but is not dealt with in any other part of the Act. This may reflect the fact that desalination is a relatively expensive (and therefore not commonly used) method of re-using water, or it may represent a missed opportunity by the State to provide for the future regulation of this source of water (bearing in mind the fact that the Gold Coast Desalination Plant is due to begin pumping water into the South East Queensland water grid early next year).

Implications of the Act

Regulation of recycled water is appropriate, given its increasing importance as a source of water for South East Queensland. The Act will bring the regulation of recycled water and drinking water in line with the regulation of other water service providers in the state, and will help to standardise the quality of drinking water in Queensland.

The effectiveness of the Act in practice remains to be seen. The processes prescribed by the Act give the State Government a significant level of control over, and a role in, the water industry that it has not previously had. Much will depend on the regulator's application of the provisions regarding recycled water management plans, and the use the regulator makes of its various powers. However, community concern over the use of recycled water both in industry and in drinking water seems likely to encourage the regulator to apply the Act rigorously.

Operators and owners of infrastructure that supply water should monitor these developments closely. In the meantime, the public can derive some comfort from the controls and protections being put in place over drinking water supplies.

The Act makes amendments to the Water Act 2000 (Qld) to implement new institutional arrangements for urban water supply, including setting up a regulatory framework governing the operation of the South East Queensland water grid and the South East Queensland water market, due to commence on 1 July 2008. We will address these amendments in a future article.

Footnotes
  1. Refer to chapter 3 of the Act.
  2. Refer to ss200 and 201 of the Act.
  3. Refer to ss196 and 197 of the Act.
  4. Refer to s652 of the Act, which inserts s57E into the Water Act 2000 (Qld) and defines "unsafe".
  5. Refer to s102 of the Act.
  6. Refer to s270 of the Act.
  7. Refer to chapter 3, part 8 of the Act.
  8. Refer to s301 of the Act.
  9. Refer to s250 of the Act.
  10. Refer to s230 of the Act.
  11. Refer to s535 of the Act.
  12. Refer to ss316 and 317 of the Act.
  13. Refer to s49 of the Act. This provision was formerly s395 of the Water Act 2000 (Qld).

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