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Water industry reform
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Review of exemption regime

In late 2010, the NSW Government approved the Water Industry Competition (General) Amendment (Licensing Exemptions) Regulation 2010 to provide greater clarity and consistency to private water industry infrastructure that is exempt from requiring a licence.

The new exemptions are a shift away from the location-based clause and aim to specifically exempt certain low risk activities from requiring licensing. The new regulation addresses activities:

  • on remote Aboriginal land
  • on single and dual-occupancy residential properties
  • that involve the private conveying of water and sewerage from a public water utility or licensees under the Water Industry Competition Act 2006 (WIC Act)
  • associated with some lower risk sewerage infrastructure
  • relating to certain uses of roof water.

The new regulation also redrafts the remaining exemption clauses for greater clarity.

With a new set of prescriptive exemptions, a new transition period has been introduced for schemes no longer exempt from requiring a licence. Schemes no longer captured by the new exemptions but were previously exempt as of 17 December 2010 under clause 19(d) of the WIC Regulation will have until 1 September 2015 to prepare and submit a WIC licence application to the Independent Pricing and Regulatory Tribunal (IPART).

Review process

In 2010, the Metropolitan Water Directorate (formerly with the NSW Office of Water) reviewed clause 19(d) of the Water Industry Competition (General) Regulation 2008 to clarify the intention of the clause and to find out whether the exemption clause was operating as intended.

The review was initiated after it was identified that the current linking of the exemptions to the location appeared to have resulted in an inconsistent application of the provisions, primarily due to the lack of reference to the type of activity and level of risk.

In conjunction with the IPART, NSW Health and NSW Office of Water, the Metropolitan Water Directorate considered:

  • the type of activities that are captured by the clause
  • the level of risk to public health, the environment and consumer protection
  • what effect the activity has on competition.

While it is difficult to consider all the different water and sewerage infrastructure activities, certain low risk, non-competitive activities may be more appropriately regulated elsewhere, if at all.

In response, the Water Industry Competition (General) Amendment (Licensing Exemptions) Regulation 2010 was developed to help streamline the type of activities that require a licence under the Water Industry Competition Act 2006.

Further information on each of the new clauses under the draft regulation can be found below in the document Draft Schedule under the Water Industry Competition (General) Amendment (Licensing Exemptions) Regulation 2008.

Community consultation

In June 2010, over 300 stakeholders were invited to comment on the draft regulation. The Metropolitan Water Directorate received 17 submissions from government and private agencies, twelve of which are listed below.

Overall, there were no signification issues. Further to the feedback received, revisions were made to a number of clauses to clarify their intent.