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Australia – Changes To Water Services Licensing Regime In Western Australia.

2 December, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Energy & Project Finance

 

WHAT YOU NEED TO KNOW

 

  • All persons providing water services are now required to have a licence or exemption for the provision of water services to all areas (not just “controlled areas”).
  • Resources companies should be aware that there are now exemptions for the provision of water services to mining camps, to a related body corporate and involving the on-supply of water where the licensee has no control over water quality.
  • It is now a condition of every water services licence that the licensee must comply with relevant codes of practice and conduct, and be a member of an approved Water Services Ombudsman scheme (new conditions).
 

WHAT YOU NEED TO DO

 

  • Resources companies should confirm what licences and exemptions they currently have in place, as these will continue to be in force and will be subject to the new conditions.
  • Resources companies will need to apply for a licence or exemption for the provision of water services to areas which were not a “controlled area” under previous legislation.
  • Resources companies subject to State Agreements should consider how the new regime may affect their State Agreement provisions in relation to the provision of water services.
  • Resources companies holding water services licences should ensure that they are a member of an approved Water Services Ombudsman scheme and are compliant with any relevant codes of practice and conduct.
 

Overview Of The New Regime

 

New water laws came into force in Western Australia (WA) on 19 November 2013. The Water Services Act 2012 (WA) (the Act) and Water Services Regulations 2013 (WA) consolidate and modernise existing water services legislation.

 

Broadly, the new legislation:

 

  • replaces the licencing regime under the Water Services Licencing Act 1995 (WA) and expands the circumstances in which a water services provider is required to hold a licence;
  • streamlines regulatory arrangements, including giving all water services providers the same powers as the Water Corporation and enabling the Minister to regulate water services charges; and
  • establishes new customer protection mechanisms, including codes of practice and conduct and a Water Services Ombudsman scheme.
 

This alert provides a brief overview of the implications of the new regime for resources companies.

 

Implications For Resources Companies

 

Resources companies commonly supply water services to mining camps, towns pursuant to State Agreements, related body corporates and other resources companies (by way of on-supply).

 

Water Services Licences


Under the previous regime, an operating licence for water supply services was only required in relation to “controlled areas”. Under the new legislation, a licence is required for the provision of water services to all areas.

 

As a result, water services that did not require a licence under the previous legislation because they were not being provided to a “controlled area”, will now require a licence or an exemption.


The previous licence structure has been retained, whereby different classes of water services provided by a licensee may be authorised by a single licence. Licences granted under the previous regime continue to be in force.


The Regulations provide that the on-supply of water by a licensee, where that licensee does not have control over the quality of the water, is not a water supply service and can, therefore, be carried out without a licence.


A licensee may be exempted from the requirement to hold a licence. There is a new exemption under the Act where a body corporate is providing water services to a related body corporate. A class exemption has also been granted for the provision of water services to mining, oil and gas camps. In addition, exemptions granted under the previous regime continue to be in force.


Codes Of Practice And Conduct


The new legislation enables the Minister for Water (Minister) to make codes of practice and the Economic Regulation Authority (ERA) to make codes of conduct which deal with certain matters in relation to the provision of water services. Before making a code (other than the initial code), the Minister or ERA must consult with each licensee to which the code will apply.


There is an initial code of conduct already in place, but no initial code of practice. The Code of Conduct (Customer Service Standards) 2013 applies to the water supply of potable water and non-potable water that is supplied on the basis that the customer is responsible making it fit for human consumption.


The new legislation makes it a condition on every licence that the licensee must comply with each code of practice or code of conduct that applies to that licence. The ERA has amended all existing water services operating licences to align them with this new requirement.


The Act states that a code of practice may provide that if a licensee fails to meet a standard, it must pay a specified amount to persons affected by the failure who comes within a specified description.


Water Services Ombudsman Scheme


The new legislation provides for the establishment of Water Services Ombudsman schemes which are funded by the licensees who are required to be members of each scheme.
All licensees will be required to be a member of an approved scheme in order to obtain a water services licence. There is no longer a requirement for licensees to have customer service charters.


The initial Water Services Ombudsman scheme was approved on 4 October 2013 and will come into effect on 1 January 2014.


Offences And Penalties


The penalty for providing a water service without a licence is $1,500 per day, up to a maximum $150,000 for a body corporate which is comparable to the penalty for the same offence under the Water Services Licencing Act 1995 (WA) (adjusted for CPI).


Under the new Act, the maximum penalty for failure to comply with a condition of a licence has increased from $100,000 to $150,000 for a body corporate.


If a resources company is charged with an offence under the Act, then an officer of the company may also be charged with offence and will be deemed to be guilty if the body corporate is found to be guilty.

 

Comments

 

The circumstances in which a resources company is required to have a licence for the provision of water services have changed as a result of the new legislation. Resources companies are now required to have a licence or exemption for the provision of water services to all areas (not just “controlled areas”).

 

There are exemptions for the provision of water services to mining camps or a related body corporate, and for the on-supply of water where the licensee has no control over water quality.


As a result of the new legislation, it is now a condition of every water services licence (including existing licences) that the licensee must comply with codes of practice and conduct that apply to that licence and that the licensee must be a member of an approved Water Services Ombudsman scheme.

 

Next Steps

 

Resources companies should consider the different ways in which the new legislation might apply to their operations.

 

We recommend that they confirm what licences and exemptions they currently have in place in WA, as these will now be subject to the new conditions.


Resources companies should also consider whether they provide water services to any areas which were not “controlled areas” under the previous legislation. Under the new legislation, they will need to apply for a licence or exemption for the provision of water services to those areas.


Resources companies subject to State Agreements should consider how the new regime may affect their State Agreement provisions in relation to the provision of water services.
Resources companies holding water services licences will need to ensure that they are a member of an approved Water Services Ombudsman scheme and are compliant with any relevant codes of practice and codes of conduct.

 

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For further  information, please contact:

 

Katie Winterbourne, Partner, Ashurst
katie.winterbourne@ashurst.com


Emily O’Leary, Ashurst
emily.oleary@ashurst.com


Ashurst Environment Practice Profile in Australia 

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