The Watchdog

Keeping citizens in the loop


4 April 2011

The Local Government and Environment Select Committee Report of 20 September 2007, which ruled Metrowater ‘Charitable payments’ were ‘unacceptable’:


Requesting that the House conduct an Inquiry into the charging and practices of Metrowater and Watercare Services Ltd, and the actions and practices of Auckland City Council’s Finance and Corporate Business Committee.                                                                                         28 June 2007


Given the significant public interest and concern over revelations of water services pricing policy in Auckland City (namely the blatant use of Council Controlled Organisation (CCO) Metrowater’s use as a Ca$h Cow Organisation) we request the following IMMEDIATE  LEGISLATIVE action:

1)    That the proposed water charge increases, and payments from Metrowater’s ‘user-charges’

for water and wastewater to be used to subsidise Auckland City Council rates be STOPPED FORTHWITH by the House, because, for reasons following, they are UNLAWFUL.

a)   Metrowater’s scope of work both as stated in their Statement of Intent and in their ‘Customer Contract’ is only for the provision of water and wastewater services –  NOT stormwater -which are both paid for on a ‘user-pays’ basis.

(The water supply is metered and currently charged at $1.288 per m3.

The wastewater is based on a never-ending ‘guesstimate’ based on 75% of the incoming

amount of metered water and currently charged at $3.08 per m3.)

b)   Metrowater’s ‘Customer Contract’ specifically EXCLUDES stormwater.

“12 Definitions and Interpretations:

Wastewater – wastewater or sewage, excluding trade wastes as defined in the Auckland Regional Council’s Trade Waste Bylaw 1991) and the stormwater that is transported by the Auckland City Council’s stormwater drainage system”

c)   Stormwater is paid for under Auckland City Council rates, so how can it be LAWFUL to take money under a customer contract which excludes stormwater – then give it back to the Council for stormwater?

d)   How is it LAWFUL for user-charges to subsidise rates?

e)   Metrowater’s Constitution specifically excludes a ‘distribution’ being made to the shareholder, or the ‘incuring of debt to or for the benefit of the shareholder’.

Yet Metrowater are doing both! How is this LAWFUL?

e)   Are not ‘Charitable payments’ effectively a ‘Clayton’s ‘distribution’ or ‘dividend’?

f)   Since when was stormwater a ‘charity’?

g)   Doesn’t the Income Tax Act 1994, define a ‘charitable purpose’ to include ‘the relief of poverty, the advancement of education or religion, or any other matter beneficial to the community’?  The facts are that the Metrowater price increases in order to fund more ‘charitable payments’ for stormwater are helping to create or exacerbate poverty!  Particularly when Metrowater, backed by Auckland City Council uses water restriction, and other punitive debt enforcement methods to effectively extort payment of their inflated charges.

h)     Behind closed doors on 23 May 2007, Metrowater made a major water policy pricing change in their Statement of Intent from ‘sustainable pricing’ to ‘return on public investment’.  “The Council considers that it is appropriate for Metrowater to return funds to its shareholder and supplier of capital to address the current subsidization of Metrowater’s customers by ratepayers…”

What manner of Council ‘beaurocrat babble’ is this? Metrowater customers ARE ratepayers!

i)    It is alleged that public consultation under the LTCCP was properly carried out, and that the public agreed with this proposal.  But it increases were said to be ‘small’.

j)    Under section 93 of the Local Government Act 2002 the LTCCP must use the ‘special consultative proposal’, which should have included:

Section 83 – a Statement of Proposal

“The summary of information must be a fair representation of major matters in the statement of proposal.”

There was no such statement of proposal.

Where was the ‘Statement of Proposal’ that was supposed to clearly state

2)  That section 193 of the local Government Act 2002 be STRUCK OUT  because Metrowater claim it expressly allows them (as a Council Controlled Organisation)  to restrict the flow of water to households.

a) The right to affordable safe water is a basic human right.

b) Water is VITAL  to life and ESSENTIAL to public health and sanitation.

c)  Metrowater is using that clause to act in a manner which is NOT ‘socially responsible’,and is  continuing to use water restriction as a means of debt enforcement of their inflated charges.

d)  This is against the stated advice of public health professionals who are opposed to this practice  because of the public health concerns which can be raised if families have insufficient water for health and sanitation.

3)   That Metrowater be INSTRUCTED  by this Select Committee, to CEASE FORTHWITH

their campaign of organized and systematic  intimidation use of debt enforcement proceedings against citizens, particularly Water Pressure Group  members, which we believe constitutes ‘legalised extortion’.

That Metrowater be likewise INSTRUCTED FORTHWITH to remove ALL Charging Orders which they have had placed over properties as a debt enforcement mechanism.

a)   This Committee has already been provided with the evidence of the 384 Court cases to date in which Metrowater have been named as parties to litigation – which included the unprecedented step of  initiating bankruptcy proceedings in the High Court.  Over disputed water bills!

b)   Metrowater have failed to follow their own Disputes Process, but are refusing to provide the information which would confirm this. Metrowater have had over $7 million set aside for ‘doubtful debt’ and have written off over $1.5 million of ‘bad debt’ since 1997; yet continue to persecute particularly WPG members, and are putting many of them, particularly the elderly and unwell under huge stress with threats of legal action through debt enforcement agents, lawyers and the Courts.

c)   Stress is a killer.  We have already had one WPG member, only 49 years old, die in May 2005, of heart attack, which his wife (a qualified doctor practicing in New Zealand)  believes was Metrowater stress-related. This member had a blood pressure condition, and was VERY stressed when threatened with arrest for refusing to attend a Court Order to be financially examined as to his means to pay Metrowater’s unfair, unreasonable and we believe fraudulent bill – when Metrowater had failed to follow their stated Disputes Process, as stated in their ‘Customer Charter’.

The week before he died, Metrowater has restricted the water to his household.
Metrowater then sent a letter to the grieving widow threatening to sell the family home!

d)  Metrowater has a statutory duty to act in a ‘socially responsible’ manner.  This must be enforced. The recent tragic death over the disconnection of electricity has thrown the role of State Owned Enterprises (the ‘commercialised model’ at central government level) into sharp relief. Judge Salmon’s ruling needs overturning on this point.

4)   That this Committee order Metrowater, as the bare minimum to fully reimburse:

a)  Those citizens, who were intimidated into paying Metrowater accounts and legal fees by their improper  use of bankruptcy proceedings as a debt enforcement mechanism ( the Insolvency Act 1967 is for use against insolvent persons who CANNOT pay – not solvent persons who WILL NOT pay ( in the case of WPG members who had refused to pay because they were DISPUTING Metrowater’s accounts).

b)  Fully reimburse and compensate the one WPG member who was adjudicated bankrupt.

c)  Fully reimburse those who (‘unlawfully’)  had their funds seized under Garnishee Orders in the District Court once bankruptcy proceedings failed once people’s ‘pots of gold’ were identified to prove solvency.


1) METROWATER: The WPG has ten years of  accumulated evidence proving that Metrowater, the commercialized model for water and wastewater services, has effectively been a rort and a fraud perpetrated upon the public in Auckland City.

We want the ‘Abolish Metrowater Bill’ – the abolition of the commercialized profit-making model for water services and it’s replacement with the essential public service model and the abolition of user charges and fixed charges as the method of payment.

a) User-charges are NOT fairer.

They violate our basic human right to affordable water by disproportionately burdening poorer

families compared with wealthier families.

The main beneficiaries of the 20% rates reduction that occurred when Metrowater was established

were those who paid the most rates. The wealthy living in high valued properties and big companies.

Metrowater have made over $90 million profit since 1997. This is PROOF of their overcharging.

$90 million profit is NOT consistent with fair and reasonable charging and keeping tariffs to a minimum.

Over $26 million has been returned to Auckland City Council in the form of  ‘Charitable Payments’ for stormwater. This further financially cripples poorer families through user-charges to subsidise the rates particularly of wealthier families and big companies.

Fixed charges – where ‘everyone pays the same amount’ hit hardest those on low fixed incomes, like pensioners who don’t use much water.

To shift payment for water services from the owner to the occupier (ie: from landlord to tenant) will

again disproportionately burden poorer families, and violate the basic human right to affordable water.  Particularly non-payment of water bills  becomes grounds for eviction.

b) Metrowater is NOT more efficient.

Metrowater is now losing/wasting nearly 18% of the water it receives from wholesaler Watercare,

compared with 13.3% when they were forced upon us in 1997.

c) User-charges do NOT encourage water conservation and work against environmental sustainability.

The commercialized, ‘profit-making’ model is fundamentally opposed to conserving water, because the more water saved – the less income received.

65% of water used in households does NOT have to be drinking water quality. A HUGE amount!

Why use drinking quality water to flush the toilet, wash the clothes,  water the garden?

Imagine how much income Metrowater would lose if they gave incentives for households to retrofit

rainwater tanks, to catch the rain before it turned into problem stormwater!

d) Metrowater are not ‘socially responsible’, as required by the Local Government Act and act as if they are above and unaccountable to the law.

They have stated that they are NOT covered by the Health Act.

While continue to tamper with families basic human right to water – I have been threatened with

a potential  $20,000 fine for taking full personal responsibility for organizing a water unrestriction.

Metrowater have not followed their Disputes Process as required by the Fair Trading Act.

Metrowater got a warning from the Commerce Commission in 2003 for publicly stating that the water they supplied was ‘Aa’ grade at a time it was NOT.

Metrowater continue to use ‘legalised’ bullying and harassment and water restriction as a means

of debt enforcement against some ‘customers’ while just writing off the debts of others.

e) Metrowater’s Directors are appointed not elected. They are not directly accountable to the people. Although we the people of Auckland own Metrowater 100% through Auckland City Council,

the business of  this ‘natural’ monopoly supplier of water services is carried out behind closed

doors by consecutive Boards of Directors who have overseen and authorized these above practices.

f) Metrowater is now going to have to pay tax.          (Councils do not have to pay tax.)

g) This CCO model has now spread to Manukau Water, with a separate Board of Directors, and is learning Metrowater’s bullying ways – namely using water restriction as a means of debt enforcement.

h) It is this CCO model which has been suggested for Auckland Regional Governance changes.


THE ANSWER?  The Water Pressure Group supports the Christchurch model.

Water meters but no user-charges.   (Can use water meters to check for leaks)

Charges for water and wastewater services are a proportion of the property-based  rate so the cost to the community of water services are spread more equitably on the basis of ‘ability to pay’ – publicly owned, operated and managed as an essential, non-profit-making basis, under the direct democratic control of our elected representatives.

2) WATERCARE SERVICES LTD: Why the WPG want a full inquiry into their charging and practices.

The secret corporate water privatization agenda – Watercare to become ‘one big Auckland Water Company.

The role of the Waikato pipeline as part of that privatization agenda.

The role of ‘privatisers’ working for Watercare, (and Metrowater and Manukau Water as CCO’s).

Watercare misleading the public about water quality and effectively stopping a Court case which

Could have informed the public about their actions.

Watercare’s policy and actions on stopping pollutants going into waterways and sewer lines.

Why do Watercare need to put up their prices?

a) The WPG believes that for many years there has been a secret water privatization agenda for

Auckland regional water services – commercialise – corporatise then privatize.

b) The corporate agenda, we believe, is for Watercare to become ‘vertically integrated’ – become one big

Auckland water company taking over the ‘retail’ functions of water services currently controlled by

Councils or Council Controlled Organisations.

c) The plan would then be to contract out the operation and management of water services in the

Auckland region to United Water – the water multinational who already has established such a

foothold in Papakura under a 30 year contract.

Such contracting out /franchising /Public-Private-Partnerships (PPPs) are the most common form of

water privatisation internationally – operation and management for private profit, water services

infrastructure which is still ‘publicly’ owned.

The Local Government Act 2002 – still allows such water privatization, contracts for 15 years –

which is what the United Water contract with Adelaide, South Australia provides – commercialized

–          corporatised – vertically integrated – then PRIVATISED.

d) Such a proposal, for vertical integration – then privatisation was put forward by United Water, at the Public-Private-Partnership Conference held in Auckland in August 2002.

e) The development of the Waikato pipeline, was part of this privatization agenda – ‘do up the asset –

before you flick it off!’  Apparently, when the multinationals expressed interest in Watercare in the

early 1990’s, they stated words to the effect – ‘you’re not much use to us unless you have a continuous

water supply in case of a big drought’.

Watercare commissioned Thames Water in 1995, to do a report on the suitability of Waikato water to

augment Auckland water supplies. Suddenly, (how convenient) we got a ‘big drought’ – and the

Waikato pipeline was rushed through, originally as an ‘emergency’ water supply – but since its

commissioning – has been effectively forced down our throats on a daily basis.

Within two years, Thames Water had a foothold in the Auckland region as part of the multinational

United Water consortium in Papakura.

f) Join the dots!  The ex-privatising Mayor from Papakura, David Hawkins, we believe is still Corporate

Liaison Manager for Watercare Services.  The new CEO for Metrowater, Jim Bentley, is ex-Thames Water, and spent the first five months in New Zealand working for Watercare, project managing

the ‘Three Waters Strategy’, which is the latest attempt to push the ‘one big Auckland water company’. The voting public do not choose these people.

g) Watercare have lied to the public about the quality of the water they provide, saying that treated Waikato river water was ‘Aa’ grade, at a time it was not.

Watercare stated that the treated Waikato river water was ‘pure’ and ‘safe to drink’.

When Rarotongan grandmother Annie King took a $30 disputes tribunal claim to try and turn off

the $165 million Waikato pipeline because of Watercare’s alleged misleading and deceptive conduct

under the Fair Trading Act – her case was never heard in Court. (It was transferred to the Manukau District Court) Both Watercare and Manukau City Council demanded and got a Court Order for  $70,000 ‘security for costs’ before this case could be heard.  Annie King is a sickness beneficiary.  Having spent some hundreds of hours researching this issue – I helped Annie prepare her Court documentation.

The facts are that the short and long term health effects of drinking treated Waikato water were not

assessed before the pipeline was built.

The facts are that compared with European Drinking Water Standards, NZ Drinking Water Standards (at the time this research was done in 2003) allowed us to drink a virtual chemical cocktail.

h) Why are our rivers allowed to be used as ‘liquid tips’?

What steps are Watercare taking to stop ‘point discharges’ of contaminants into our waterways?

What steps have Watercare taken to learn from ‘international best practice’ to help stop this?

i) Isn’t it true that Watercare makes money out of ‘trade waste’ – allowing polluters to use the sewers

also as ‘liquid tips’?

j) What is Watercare doing to encourage water conservation given that 65% of water for residential

use doesn’t have to be drinking water quality?

k)   Why do Watercare need to double their prices  CHECK FACTS!



Why the WPG want a full inquiry into their actions and practices.

We believe that  Metrowater’s ‘monitoring body’ under the Local Government Act 2002 – the majority of the Finance and Corporate Business Committee (FCBC) have failed to carry out their statutory duties.  This Auckland City Council ‘gamekeeper’ has been working hand in hand with the Metrowater ‘poacher’  effectively to defraud the public, because the Council have had their hand deeply in Metrowater’s till.  The majority on the FCBC has supported and endorsed Metrowater’s victimization and bullying of WPG members when we have repeatedly gone to them in good faith,  because they also have had a vested interest in trying to shut down the only group which has ever effectively stood up to them.

a) The principles underpinning the Local Government Act 2002, of ‘open, transparent and democratically

accountable” local government have been fundamentally violated. This legislation has not been working.

b) The democratic rights of citizens to ‘impart and receive’ information, have been found to have been

breached by three different District Court Judges.

c) Metrowater is the monopoly supplier of water services in Auckland City – yet ‘commercial sensitivity’

has been used as the excuse to put Metrowater matters under ‘CONFIDENTIAL’.

‘Political sensitivity’ has been the real reason. They don’t want the public to know what’s going on.

d) Some controlling unelected Council beaurocrats appear to be managing Auckland City Council, behind the public’s back,  as if it were their own private corporation.

This has got to stop. Council staff with no concept or understanding of public service or being public servants should leave and join the private sector – or be removed forthwith for not acting lawfully.

e) Council Officers and elected Councillors who have had acted as ‘meeting chairs’, have been proven in

Court not to know, understand or implement the key legislation upon which their jobs and statutory duties are based.  As a ‘judicially recognised’ public watchdog, on behalf of the WPG, it has been proven

in Court that my understanding of the law on these matters has been greater than theirs – yet I am still being arrested.

f) It is now 15 times that I have been arrested, in my role as duly-elected WPG Media Spokesperson in defending the public’s right to ‘open, transparent  and democratically accountable’ local government, yet I have not yet lost in Court. (So far – I have won 5 cases and the Police have dropped 5).

In Court I have found that those who have sworn an oath to uphold the law –do not know what the law is – and neither do the Council staff who are supposed to advise them.

g) Whatever mechanisms are supposed to exist to ensure that those working in Local Government in

Auckland City actually know what they lawfully should be doing – are NOT working.

What is the point of making law if it’s not upheld or implemented?

As a Public Watchdog – why is it my job to tell them their job?

If it is the job of the Police to uphold the law, before which we are all supposed to be equal – why do they keep arresting me – why not the Mayor?

h) The Local Government Act 2002 and the Local Government Official Information and Meetings Act legislation is NOT working at Auckland City Council.

What is ‘best practice’ elsewhere, at other Councils for ensuring that both elected representatives and

Council staff become familiar with the LAW that is supposed to govern their jobs?

i) When in good faith, on behalf of the WPG, I made a series of submissions to the FCBC, explaining

Metrowater’s actions and how they had failed to follow their own disputes process – the FCBC set up a ‘Working Party’ – which whitewashed Metrowater’s actions and supported Metrowater using Charging Orders and bankruptcy as methods of debt enforcement, although we had provided extensive evidence of Metrowater’s failure to follow their disputes process.

April 4, 2011 - Posted by | Fighting corruption in NZ, Fighting water privatisation in NZ, Metrowater

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