Theory of Water Services

 
 

With water charges back, as the Oireachtas water committee considers ‘excessive use’ charges, it is timely to look at the theory which underlies water-pricing.

Austerity and the arrival of the Troika to Ireland exposed the fact that several aspects of water services provision have been critical issues for decades.

Not unique to Ireland, these issues have been addressed by the roll-back of what is known as the‘hydraulic’ or ‘municipal’ model of water provision and the roll-out of what Karen Bakker has called a market environmentalist model. This shift remains uneven and contested.

The hydraulic model, which evolved after states first took interest in supplying water as a public good and a public health measure in the nineteenth century, treated water as a plentiful resource. Provision was supply-led, with an emphasis on equity and universal access. Water was paid for primarily through general taxation, and user charges, in place across Europe, were treated as a supplementary form of income. For infrastructure costs too great for general taxation, government bonds were issued.

Crises in municipal water services date from the 1970s, when several aspects of the hydraulic model became no longer tenable. In particular, ageing infrastructure required new investment, in a strained financial climate. Other pressures have since emerged, including: the cost of developments in water treatment technologies; higher health and environmental standards for drinking water which, in the case of EU member states, are set supra-nationally; and threats to supply induced by climate change, with drought and flooding affecting the quality and continuity of supply.

Market environmentalism marks the merger of neo-liberal thinking about the role of the State and the growing influence of market-based thinking in solving environmental problems. The hallmarks of the market environmentalist model of water provision are that it is demand-led and fully costed. In the process the understanding of water as a public good is displaced by the understanding of water as an economic good.  It is assumed that the price signal is a key policy instrument for regulating demand and supply, as well as central to changing behaviour, ‘valuing’ the environment and conserving scarce natural resources. This is underpinned by a discourse of ‘state failure’. The state is berated for its neglect of water services infrastructure, yet public funding and public management is also assumed to be a sub-optimal solution leading to inefficient and unaccounted-for subsidies which private-sector involvement and commercial-pricing rules will overcome.

In practice, private involvement in the water utility sector has grown in a variety of complex, hybrid relationships. With the exception of England and Wales, ownership of water supply systems in Europe have remained in public hands. Rather than complete state withdrawal via privatisation, the neo-liberalisation of water can involve the roll-out of new institutions and the forging of complex state-market relationships. These include the commercialisation of water utilities, as well as their financialisation in the sense of the increasing influence of financial motives in how water is funded and managed, and the commodification of services.

Ireland’s water services funding challenges stem from the decision to abolish domestic rates, under which water charges were subsumed, in 1978.  As early as 1983, local authorities were re-granted the power to levy charges for water, sewerage and waste. Mounting resistance and the near political success of an anti-water charge candidate in a Dublin by-election led to the withdrawal of local authority power to charge domestic users for water, in 1997.  Against that background also an exemption from the water charges element of the EU Water Framework Directive was sought and achieved by the Irish State. However, even during the early to mid-2000s, domestic water charges were never completely off the political agenda.

By the late 2000s, before the arrival of the Troika, ideas to re-introduce water charges, to introduce domestic water-metering, and to rationalise the sector by creating a single water utility burgeoned in domestic policy proposals. In particular, recommendations made in 2009, by both the Commission on Taxation, and by the Special Group on Public Service Numbers and Expenditure Programmes, bore the increasing influence of market-environmentalist ideas regarding water pricing and cost recovery. Troika conditions relating to full cost recovery for water services and the establishment of a water utility that would become self-funding over time were therefore not completely new and externally imposed ideas.

However, attempts to commercialise and financialise the management and funding of water by establishing Irish Water as a commercial semi-state company, and efforts to commodify water by converting citizens into Irish Water customers have all essentially failed.

Resistance to water charges has, in effect, rejected the notion of water as an economic good and asserted its unique social properties as a good held in common, and a basic need essential to human life, which should therefore be provided without regard to ability to pay. The likelihood of charges being limited to excessive or wasteful use of water, as recommended by the ‘Report on the Funding of Domestic Public Water Services in Ireland’, means that the state, and the social aspects of water, remain much more central to water provision than countenanced by the market environmentalist model and its world of water customers.

Yet the Report’s ‘fix’ on the matter of domestic water charges does not allay the long-standing challenges associated with adequately funding water services provision. As well as the challenge of defining what excessive or wasteful use of water IS, the challenge of how to fund water provision, whether as “a dedicated tax, a broadly-based fiscal instrument, or an adjustment to existing taxes”, as the Report puts it, remains.  Irish Water estimates that capital costs associated with up-grading water-services infrastructure, to comply with quality standards, are in the region of €13 billion. Though not limited to domestic water supplies, the Environmental Protection Agency suggests that Ireland is a long way off meeting the legal requirements on water quality specified by the EU Water Framework Directive. In addition, lack of compliance with the Urban Waste Treatment Directive in 38 locations across Ireland has resulted in an infringement case being taken by the European Commission against the State.

While efforts since 2010 to neo-liberalise water along market environmentalist lines have not progressed and reflect a long back-story of political troubles with water charges, in other respects there has actually been a longer and less visible process of neo-liberalising water services delivery.

Since the State embraced Public Private Partnerships in 1999, research by Eoin Reeves shows that over sixty per cent of all Public Private Partnerships in operation are contracted in the water sector. A strong element of the rationale for preferring PPPs is the assumed value for money over traditional public-sector procurement which, as Reeves has found, undermines the objectivity of value-for-money tests.  Moreover, there is very little transparency involved in the procurement process. These contracts typically operate on a design, build and operate procurement model, with contracts awarded to private companies for up to twenty years. Previous local government procurement practice involved issuing separate contracts for the design-and-build element of infrastructure followed by the takeover of facilities by Local Authorities. Existing contracts still have some years to run. On termination, because of the switch in government role from provision to regulation and monitoring, skills and expertise in the public sector in the operation of water services will have been lost. This increases the likelihood of re-contracting the services to private operators.

Under the Water Services Act (No.2) (2013), 970 contracts for water services were transferred from local authorities to Irish Water. Not all of these are for full design, build and operate services, but they do give an indication of the range of transnational water corporations involved in providing services in Ireland.  These include Veolia Ireland which operates more than 30 plants, and Glan Aqua a subsidiary of the Portuguese group Mota-Engil, also operating approximately 30 water treatment plants.  Other companies include Aecom whose global headquarters are in Los Angeles and which is involved in design, build and operate infrastructural projects across 160 countries.  Companies with UK origins such as Severn Trent Response, Northumbrian Water Projects, Anglian Water International (the latter two now owned by global investment consortia) also have an Irish presence.  Since the establishment of Irish Water a total of 115 design-build-operate contracts, operating across 232 different sites were transferred from Local Authorities.  Internationally, as Global Water Intelligence has found, Public Private Partnerships have become the preferred mode of operation of many private water companies, because they represent model of making money out of water that is more bankable than outright private ownership.

The commodification and commercialisation of water-services provision has failed, yet this failure sits alongside a longer-term process of privatising the operation of water-services infrastructure. Meanwhile the challenges of adequately funding water services and more broadly protecting water as an environmental resource remain unsettled.

 

 

Dr Fiona Dukelow is College lecturer in Appied Social Studies, University College Cork.  This article is based on ‘Irish water services reform: past, present and future’ in Murphy and Dukelow (editors 2016), ‘The Irish Welfare State in the Twenty-First Century: challenges and change’.

 

Source: Village April 27 2017


Fianna Fáil will chase anyone who has not paid water charges -Anti Austerity Alliance responds

It was reported by Niall O'Connor in the Irish Independent on March 18 that 'Over half a million households refusing to pay their water bills face having the charges deducted from their salaries or social welfare payments under a plan being devised by Fianna Fáil.'

 Barry Cowen TD Fianna Fail.  Photo Tom Burke

Barry Cowen TD Fianna Fail.  Photo Tom Burke

The Irish Independent did not name a source other than 'a senior party source'.  The article went one

Non-payers will be pursued by a new, slimmed-down authority which the party says will be set up to replace Irish Water, the Irish Independent understands.

The confirmation that Fianna Fáil, like Fine Gael, intends to pursue those boycotting the charges removes another stumbling block to the two parties striking a coalition deal.

Having been accused of several flip-flops on the issue of water charges to date, Fianna Fáil is now adamant that bills issued must be honoured.

"You can't have one half of the country paying, and the other half refusing. We will address the issue of non-payment before we move to suspend charges," a senior party source told the Irish Independent.

Although consideration has been given to the introduction of tax credits for households who have already paid their bills, Fianna Fáil strategists now say dodgers will be pursued through the form of attachment orders.

This will happen under legislation introduced by Justice Minister Frances Fitzgerald last year, which allows State bodies like Irish Water to pursue debtors for bills of up to €5,000.

Read more: Fianna Fáil will chase anyone who has not paid water charges

 

Paul Murphy TD Anti-Austerity Alliance responds March 18 2016

Fianna Fail’s threats to deduct water charges is‘unworkable’ – legislation for deductions is only effective when debt reaches €500, however, if bills are scrapped debt will never reach €500.

Massive increases in non-payment will make ‘empty threats’ of FF plan.

Pursuing non-payers would mean hundreds of thousands of court cases.

The Anti-Austerity Alliance has responded to a reported plan by Fianna Fail to force payment of the water charges saying it is an ‘empty threat’ as non-payment has sky-rocketed and would be ‘unworkable’ because the legislation which they propose to use is only effective once a debt reaches €500.

Mick Barry TD said “Fianna Fail’s plan to try pursue people for payment of the water charges continues their back-tracking on their election promises and would be impossible for them to implement. The previous government’s threats and plans to deduct payment from non-payers was unworkable, the Fianna Fail plan is even more unworkable.

“Legally the legislation [Civil Debt Procedures Bill] which would be used to get attachment orders for deductions can only be used when the debt owed reaches €500, however, under Fianna Fail’s plan if they scrapped Irish Water and stopped issuing bills, people’s debt would never reach €500. So their whole plan is legally unworkable, before they even attempt to try to bring hundreds of thousands of people to court.”

Paul Murphy TD said “Since the General Election, non-payment of the water charges which stood at 50% has sky-rocketed. This makes any plan to pursue non-payers empty threats. These threats are part of a rear-guard action by them to try to hold back the flood of people cancelling direct debits and joining the boycott. We would encourage people to join the boycott, this will increases the pressure massively on all parties, but particularly Fianna Fail, while they are negotiating to form a government to not only scrap the charges but to refund people who have paid the charge."

Ruth Coppinger TD said “The election sent a clear message to all the political parties that people reject water charges. They should be abolished immediately, and people should be refunded. No government will be able to break the water charges boycott now.

“People need to increase the pressure on Fianna Fail to force them to commit to abolish Irish Water and stop these threats to non-payers. The plan to abolish Irish Water and have a new body chase up non-payment will be impossible to work out. We should now increase the pressure with the boycott and force the abolition of the charges and to scarp the bills.”

Update today March 18 - Conflicting statements

Barry Cowen on Uplands 103 radio

Fianna Fáil’s Environment Spokesperson Barry Cowen says no decisions have been made on the issue of unpaid water bills.

The Irish Independent reports today that the party will pursue those who fail to pay their water bills if in Government and that more than half a million householders face having payments deducted from their salaries or social welfare by a new slimmed down authority replacing Irish Water.

Offaly Deputy Cowen, who is part of the Fianna Fáil negotiation team meeting with other parties and independents, had told Midlands 103 that no discussions have taken place on unpaid bills.

He also says their position on charges is unchanged from the election manifesto which proposes abolishing water charges and Irish Water.


Michael Noonan 'Water Charges Required Under European Law' is a Lie

Article by James Quigley

Former Fine Gael finance minister Michael Noonan's comments made to RTE on March 07, 2016,  have been exposed as lies by Kathy Sinnott.  Ms Sinnott was a member of the European Parliament from 2006 to 2009 and has written extensively on the Water Framework Directive and the River Basin Management Plan, with particular reference to Ireland's derogation (exemption) to the Water Framework Directive, 2000/60/EC .

Mr Noonan said on RTE News, Mon March 07, that "Under European law, Ireland was obliged to charge consumers for water.  There was a derogation up to 2010 where Ireland wasn't obliged to charge for water, but the derogation was ended by the Fianna Fáil-Green government, so legally now under European law water must be charged for in Ireland."

 

Kathy Sinnott - Mr Noonan is incorrect.

 Kathy Sinnott Independent MEP 2004-2009

Kathy Sinnott Independent MEP 2004-2009

Ms Sinnott said "Mr Noonan is incorrect.  Our derogation is included in the first Irish River Basin Management Plan (RBMP) 2008-2015. This was supposed to be a 7 year plan but Ireland is behind schedule. The next Irish River Basin Management Plan was supposed to come out this year for the period of 2016-2021, however, there is a delay and it may not come out until 2017"

Ms Sinnott said that "as long as we are functioning under the first plan that was put in place when I was an MEP,  then we have a derogation, the so called Irish Exemption".  She believed that"Alan Kelly may haveput water charging in the second River Basin Management Plan for 2016-2021.  However, if this new plan is not activated then we are still functioning under the 2008 plan." 

Michael Noonan is misinformed or maybe lying when he says our derogation ended in 2010.  It could be he is getting mixed up between the Water Framework Directive and the River Basin Management Plan.   A mix up that is quite easy to make for ordinary folk but for a minister, well, that is another matter.

Ms Sinnot said that" the EU was functioning at that time under the 2008 plan and would have continued for at least the next 7 years.   When I was checking it out I spoke to an official In the European Commission in the section that deals with the European Water Framework Directive which the River Basin Management Plan comes under.   I was informed that we still had the derogation.  The official assured me that the EU could not take the derogation away from us and that the only way we could loose it was for Ireland to give it up voluntarily." 

The official told Ms Sinnott that the then Minister for Environment, Alan Kelly was going to get rid of the derogation.  However, any detail of the new plan has not been made public.  Whether it will be passed remains to be seen especially in light of developments in relation to the issues around Irish Water and water charging.

See full details of Kathy Sinnott's “The Irish Exemption”  in Attack The Tax

 

Nessa Childers querying Alan Kelly's new River Basin Management Plan 2016-2021

 Nessa Childers MEP Incumbent

Nessa Childers MEP Incumbent

Buncrana Together contacted Ms Nessa Childers, MEP Dublin, who has written extensively on the Water Framework Directive, Childers Welcomes Clarification from European Commission Re Water Charges and European Law

Bronwen Maher on behalf of Ms Childers said that
" the 2016-2021 River Basin Management Plan was submitted by the Irish Government last year and included water charges (the Government thereby opting out of the non domestic charge clause in the Water Framework Directive).  I suspect as the last Government has submitted the next RBMP that it cannot be withdrawn but we will table a question with the Commission to seek clarification on this issue.  Please note that it can take up to four weeks,  if not longer, for an answer to be returned to an MEP "

Ms Childers in the above article,  December 2015, welcomed clarification from the European Commission that member states, including Ireland, do not have to apply individualised domestic water charges to comply with the Water Framework Directive. 

She said "Each EU member state is obliged to draw up plans under this directive to show how water sources are protected from pollution, and how the cost of water services is carefully priced, including domestic usage.  It is an extremely good piece of European environmental legislation – and we have much work to do to improve water quality in Ireland.  However I am perplexed about reports that Ireland will formally submit a plan to include domestic water charges under our EU Water Framework Directive.  I strongly recommend that we reserve the option to design our water services funding to suit our needs in Ireland."

Interestingly the article gives a response to Ms Childers questions to the Commission, Dec 05, 2015 where Mr Vella on behalf of the Commission stated

" The responsibility for implementation of the Water Framework Directive (WFD)  lies with the Member States and there is no obligation to follow particular schemes or methods. However, methodologies for calculation of cost recovery of water services do exist and are being developed further. For example there is work under way within the Common Implementation Strategy for the WFD implementation on further guidance on assessment of environmental and resource costs.

There is no specific requirement in Art 9 of the WFD for cost recovery to rely on individual consumption. However, for the Commission, an adequate implementation of the principle of incentive water pricing included in the provisions of Art 9, as well as of the more general polluter-pays principle embedded in the Treaties, requires a clear link between water tariffs and actual individual water consumption. In this context, water metering seems to be a basic precondition for proper implementation of the WFD."

Make of that what you will. Notice the work 'seem' in the last sentence.   It seems to be in the interpretation. 

 

Fliuch Off Irish Water Ltd - zones in on article 9 of Water Framework Directive

Fliuch Off Irish Water Ltd, a Cork City based anti Irish Water organisation stated that" Irish people have paid for their water infrastructure over the years via income tax – this was the understanding that Irish people had – now we are being fed the lie that we must be like our EU neighbours and pay for our water – while €11 billion of water infrastructure is given to Irish Water gratis.

What Irish media and government politicians fail to point out is that most other EU citizens get a far higher quality of public services – i.e. a bigger bang for their buck. You simply cannot compare the current system in Ireland to any other EU country – it’s like comparing apples and oranges." 

Noel from Fliuch Off directed our attention to Article 9 of the Water Framework Directive and emphasising the complete article pointed out clause 4 and in particular phrase *established practice*.   He said " what they've done now is tried to say that direct domestic charges are now and 'established practice'.  This is patently untrue.

 

Water Framework Directive 2000/60/EC

Read full text, in particular Ariticle 9 of the Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy

Article 9
Recovery of costs for water services
1. Member States shall take account of the principle of recovery of the costs of water services, including environmental and resource costs, having regard to the economic analysis conducted according to Annex III, and in accordance in particular with the polluter pays principle.

Member States shall ensure by 2010

- that water-pricing policies provide adequate incentives for users to use water resources efficiently, and thereby contribute to the environmental objectives of this Directive,
- an adequate contribution of the different water uses, disaggregated into at least industry, households and agriculture, to the recovery of the costs of water services, based on the economic analysis conducted according to Annex III and taking account of the polluter pays principle.

Member States may in so doing have regard to the social, environmental and economic effects of the recovery as well as the geographic and climatic conditions of the region or regions affected.

2. Member States shall report in the river basin management plans on the planned steps towards implementing paragraph 1 which will contribute to achieving the environmental objectives of this Directive and on the contribution made by the various water uses to the recovery of the costs of water services.

3. Nothing in this Article shall prevent the funding of particular preventive or remedial measures in order to achieve the objectives of this Directive.

4. Member States shall not be in breach of this Directive if they decide in accordance with established practices not to apply the provisions of paragraph 1, second sentence, and for that purpose the relevant provisions of paragraph 2, for a given water-use activity, where this does not compromise the purposes and the achievement of the objectives of this Directive. Member States shall report the reasons for not fully applying paragraph 1, second sentence, in the river basin management plans.

 

Questionsthe Commission must be asked

As well as Ms Childers submitting questions to the European CommissionBuncrana Together has already sent questions to Mr Enrico Brivio, spokesperson for Environment, Maritime Affair and Fisheries, European Commission.  In particular this isimmediate question we would like answered - 
Is Ireland at present operating under the River Basin Management Plan 2008-2015?

 Other questions are we have to ask is

1. Has the last Government presented a new plan?  

2. When and how will it be ratified?

3.  Is it possible to view the contents? 

4.  Has Mr Kelly implemented charging for water and if so has his submission done away with the Irish derogation as implied in the RBMP 2008-2015?

5 Last but not least can Ireland revoke Mr Kelly's plan?

The above questions must be asked by all our newly elected TDs and parties, especially those who have promised the abolition of Irish Water and Water Charges.  However, they must go a lot further and question the bona fides of Mr Kelly and the former government in their handling of the Irish Water and Water Charges issue and in particular the veracity of any submission to the European Commission.    We have to question Mr Alan Kelly and Mr Noonan's constant misrepresentation of fact especially in light Mr Kelly possibly not renewing the Irish derogation and his inclusion of Water Charges into the River Basin Management Plan 2016-2021.

 
  The Pensive Quill

The Pensive Quill

Buncrana Together would like to thank all the above contributors.  We would like to make special mention of Anthony McIntyre editor ofThe Pensive Quill.  He has tirelessly championed truth and justice.  His constant and recent facebook and twitter posts kept to the fore the question of the Water Framework Directive.  See the article in Pensive Quill, written by Direct Democracy Ireland EU Say Ireland’s Domestic Water Charge Exemption Is Safe, Unless Alan Kelly Gives It Away On January 1st