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South East Queensland Water Board (Reform Facilitation)
SOUTH EAST QUEENSLAND WATER
BOARD (REFORM FACILITATION) BILL
EXPLANATORY NOTES
1. GENERAL OUTLINE
Short title
The Act will be known as the South East Queensland Water Board
(Reform Facilitation) Act 1999.
Objectives of the Bill
The primary policy objectives of the Bill are to:
· enable the South East Queensland Water Board (`the board'),
subject to Ministerial powers of direction, to transfer the whole of
its undertaking to a company incorporated under the
Corporations Law that will be wholly owned by the State and the
twelve local Governments within the current operational area of
the board (`the local Governments');
· amend the Water Resources Act 1989 to adopt some regulatory
powers currently found in the South East Queensland Water
Board Act 1979. This will be transitional pending enactment of
the generic water industry regulatory regime; and
· provide for the winding up of the board and repeal of the South
East Queensland Water Board Act 1979.
The objectives are based on the State's obligations under the Competition
Principles Agreement to examine reform options for entities such as the
board, particularly those that will give the entity a more commercial
mandate. Apart from these obligations, it is important that key publicly
owned enterprises are re-assessed from time to time in terms of whether
their structure remains relevant to the environment in which they operate.
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South East Queensland Water Board (Reform Facilitation)
Reasons for the Bill
The board is currently a statutory authority under the nominal ownership
of the State. However, the State receives no financial benefits from the
board's operations and has very limited influence over the board, as the
majority of the members of the board are local Government nominees, with
the State having power only to nominate the chair of the board and rescind
certain decisions of the board.
It was therefore proposed to convert the board into a company in which
both the State and the local Governments could have shareholding
ownership. For tax reasons, it was considered that the most appropriate
way to achieve the conversion would be by the transfer, on commercial
terms, of the board's undertaking (that is, its entire business and assets and
liabilities) to the new company. This company would be incorporated under
the Corporations Law and be jointly owned by the State and the local
Governments.
However, at present the board does not have power under the South East
Queensland Water Board Act 1979 to transfer its entire undertaking.
The reason for this Bill is primarily to enable the transfer of the board's
undertaking to the company and ultimately provide for the winding up of
the board upon completion of the transfer. As matters incidental to the
proposed transfer, the Bill will also provide for the continuation, on a
transitional basis, of certain matters necessary for the company to assume
the board's operations.
Way in which policy objective is to be achieved
The Bill gives the board power to transfer its undertaking to the
company, with the approval of the Minister for Natural Resources and
subject to any written directions about the transfer given by the Minister.
As the State and the local Governments will be the shareholders of the
company the transfer to the company will enable the State to obtain some
financial return in respect of the undertaking previously carried on by the
board and to share ownership of that undertaking with the local
Governments.
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South East Queensland Water Board (Reform Facilitation)
Alternative ways of achieving objective
One of the major challenges that reform of the board has presented
(which has not existed for any of the other State businesses previously
reformed) is the substantial local Government involvement in the operations
of the board, both now and in the past. The State and the local
Governments have agreed to a joint State/local government ownership of
the board into the future. Under commercialisation or corporatisation
models, whilst formal local Government ownership was not possible, the
State had already indicated a willingness to share certain ownership benefits
with the councils (including the possibility of the local Governments
maintaining their board memberships). However, this still did not meet the
needs of the local Governments, hence the proposal to transfer the board's
undertaking to the joint State/local Government owned company.
Administrative cost to government of implementation
Any costs associated with the implementation of the Bill will be
recovered from either the State's competition payments from the
Commonwealth Government or the State's and local Governments' agreed
share of the transfer proceeds. In addition to the transfer proceeds, the State
will be entitled to annual dividends from the company in the future. The
company will also be liable to pay State taxes for which the board is
currently exempt (for example land tax).
Consistency with fundamental legislative principles
The Bill is consistent with fundamental legislative principles set out in
section 4 of the Legislative Standards Act 1992, except in the following
respects:
· Clause 10 of the Act provides that at the end of the settlement day
described in the Act, the board is dissolved and its members go
out of office. There is no provision for compensation to be
payable to the board members because there is no contract to pay
the board members for a specified period of time. The removal
of the members of the board without compensation may be
regarded as being inconsistent with the fundamental legislative
principle contained in section 4(2)(a) of the Legislative Standards
Act 1992. However, with the exception of the chair, all members
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South East Queensland Water Board (Reform Facilitation)
of the board are nominated by local governments and are
councillors. As the majority of the board members are therefore
acting on a part time basis, dissolution of the board and removal
from office will not have significant effects on their livelihood.
Further, they are not appointed to the board in their individual
capacity but as representatives of the interests of the local
Governments.
· Clause 13 inserts a new clause 215R in the Water Resources Act
1989, giving an authorised officer of the company power to enter
land at all reasonable times after giving the occupier 14 days
notice of the entry or without notice in an emergency. Entry to
land without a warrant is not consistent with the fundamental
legislative principle contained in section 4(3)(e) of the Legislative
Standards Act 1992. The power is necessary because it is
imperative for the company, which will for the time being be the
major bulk water supplier in South East Queensland, to be able to
gain access to its infrastructure or equipment in order to ensure
continuity of an essential service to a large proportion of the
population of Queensland and to ensure the availability of dam,
river, rainfall and water quality data at all times in the interests of
public health and safety.
· Clause 18 contains a transitional regulation-making power to
facilitate the doing of anything to achieve the purposes of the Act.
The Act enables the board (which presently comprise four
nominees representing the local Governments and a chair
nominated by the State) to transfer its undertaking to the company
(in which the State and the local Governments will be the
shareholders). It is reasonable in the circumstances to include a
supplementary power in the Act to facilitate the completion of the
intended transfer in a manner consistent with the proposed joint
State/local Government owned company model.
Consultation
A public consultation document Converting the South East Queensland
Water Board into a joint State/local Government owned company was
circulated to key stakeholder groups in July 1999, including existing and
potential new customers, employees and unions, lessees, irrigators, existing
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South East Queensland Water Board (Reform Facilitation)
contractors, environmental groups, recreation and community groups, local
Governments (both within the proposed shareholding group and councils
bordering the board's current operational area), business and consumer peak
bodies and industry regulators. The public consultation document was also
forwarded across departments and to agencies with interests in public
accountability matters and the board. Detailed staff and union consultation
has also taken place. The public consultation document addressed the need
for this legislation to be enacted.
2. ANALYSIS OF THE BILL
PART 1--PRELIMINARY
Short title
Clause 1 provides that the short title for the Act is the South East
Queensland Water Board (Reform Facilitation) Act 1999.
Commencement
Clause 2 provides that parts 1 to 3, sections 14, 16 and 18 and schedule 2
of the Act will commence on assent and that the remaining provisions of the
Act will commence on the settlement day.
Purposes of Act
Clause 3 sets out the purposes of the Act, which are to enable the board
to transfer its undertaking to the company and to give the Minister powers
of direction over the transfer process.
Definitions
Clause 4 provides for a dictionary of defined words and phrases,
contained in schedule 2.
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South East Queensland Water Board (Reform Facilitation)
PART 2--TRANSFER OF BOARD'S UNDERTAKING
Board's power to transfer its undertaking
Clause 5 gives the board power to transfer its undertaking to the
company. This express power is necessary because, although the board has
power under the South East Queensland Water Board Act 1979, amongst
other things, to enter into contracts and dispose of property, those powers
can only be used in furtherance of the functions set out in section 22 and for
that reason would not extend to the transfer of the board's entire
undertaking.
The new power is subject to Ministerial approval and direction. This is
necessary to enable the State to maintain control over the terms and
conditions of the transfer, especially as it has limited, if any, other capacity
to ensure the transfer occurs in accordance with the proposed joint
State/local Government owned company model. A transfer by the board
which is not in accordance with clause 5(2) will be of no effect.
The new power includes power to do all things incidental to the exercise
of the power to transfer the undertaking and there is validation of any
incidental powers which may have been exercised by the board before the
commencement of the clause.
Minister's approval to transfer
Clause 6 provides that the board must obtain the Minister's approval for
the exercise of the board's power under section 5(1). The Minister may
only approve the exercise of the power if the State has secured an indemnity
in respect of certain liabilities mentioned in clause 10(2) and clause 15 and if
the Minister is satisfied that the officers and employees of the board (other
than the actual board members) will be offered employment with the
company on their existing, or equivalent, terms and conditions.
Minister's directions about transfer
Clause 7 sets out (without limiting the Minister's power to give
directions) the types of matters about which the Minister may direct the
board. Any direction given by the Minister must be made public by being
gazetted as soon as practicable and also tabled in Parliament within 14
sitting days.
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South East Queensland Water Board (Reform Facilitation)
Settlement day
Clause 8 provides that the Minister is to fix the day which will be the
settlement day.
Board to ensure transfer proceeds are paid to State
Clause 9 requires the board to ensure that the transfer proceeds are paid
to the State on the settlement day.
Dissolution of board
Clause 10 provides that at the end of the settlement day, the board is
dissolved and its members go out of office. On dissolution of the board,
the State stands in the place of the board for the purposes of the transfer
contract.
PART 3--MISCELLANEOUS
Protection from liability
Clause 11 provides that the Minister or a member of the board will not
incur civil liability for an act done or omission made honestly and without
negligence. In such case, the liability attaches instead to the State.
PART 4--AMENDMENT OF WATER RESOURCES
ACT 1989
Act amended in pt 4
Clause 12 provides that part 4 amends the Water Resources Act 1989.
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South East Queensland Water Board (Reform Facilitation)
Insertion of new pt 10A
Clause 13 inserts a new part 10A in the Water Resources Act 1989.
PART 10A--BULK WATER SUPPLY IN SOUTH-EAST
QUEENSLAND
Division 1--Preliminary
Definitions for pt 10A
Clause 215A provides for definitions of certain words and phrases for the
purposes of part 10A.
Application of pt 10A
Clause 215B provides that part 10A applies if the board transfers its
undertaking to the company.
Division 2--Flood mitigation
Establishment of technical advisory committee
Clause 215C gives the Minister discretionary power to establish a
technical advisory committee.
Functions of committee
Clause 215D provides that the functions of the technical advisory
committee are to advise and make recommendations to the Minister (either
on its own initiative or as requested by the Minister) and to prepare a flood
mitigation manual of operational procedures for flood mitigation for each of
the company's reservoirs.
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South East Queensland Water Board (Reform Facilitation)
Committee meetings
Clause 215E provides that the technical advisory committee can meet at
times and places decided by it.
Minister's approval of flood mitigation manual
Clause 215F provides that the technical advisory committee must give
the Minister a copy of each flood mitigation manual that it prepares, and any
proposed amendment, and that the Minister may approve the manual or
amendment.
Protection from liability
Clause 215G provides that the Minister or a member of the technical
advisory committee will not be civilly liable for an act done or omission
made honestly and without negligence under this division. It also provides
that a company official (which includes a director, employee or agent of the
company) who observes the operational procedures contained in a flood
mitigation manual approved by the Minister, will not be civilly liable for an
act done or omission made honestly and without negligence in observing
the operational procedures. In both cases, the liability attaches to the State
instead.
Division 3--Protection of water quality
Purpose of div 3
Clause 215H provides that the purpose of division 3 is to protect the
quality of water in a company reservoir. This division continues a
regulation-making power previously contained in the South East
Queensland Water Board Act 1979. Ultimately this and existing provisions
in the Water Resources Act 1989 that deal with land use will need to be
amended as part of the implementation of the Integrated Planning Act 1997
through consequential amendments to other Acts.
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South East Queensland Water Board (Reform Facilitation)
Regulation of land use in catchment area
Clause 215I provides that a regulation can be made to regulate the use of
land in a catchment area of a company reservoir or the erection and use of
buildings on that land. To the extent that a planning scheme or development
approval under the Integrated Planning Act 1997 is inconsistent with such a
regulation, the planning scheme or development approval is ineffective.
Effect of regulation
Clause 215J provides that a regulation made under clause 215I does not
affect a power under this Act or any other Act to take action to protect the
quality of water in a company reservoir.
Division 4--Protection of existing water allocations
Purpose of div 4
Clause 215K provides that the purpose of division 4 is to protect existing
entitlements to water from a reservoir transferred by the board to the
company.
Existing entitlements to water continue
Clause 215L provides that an entitlement to water under the Water
Resources Act 1989 (for example, a licence to take water issued under that
Act) or the South East Queensland Water Board Act 1979 (for example, the
provisions for water supply for Esk, Lowood and Glamorgan Vale Water
Supply Area appearing in sections 45, 46 and 47 of that Act) which was in
existence immediately prior to the settlement day, is unaffected by a transfer
of the board's undertaking to the company. These allocations will be
specified in a regulation to be made under clause 14.
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South East Queensland Water Board (Reform Facilitation)
Division 5--Company's power to access and maintain its facilities
Definition for div 5
Clause 215M provides for a definition of "authorised person" for this
division.
Appointment of authorised persons
Clause 215N provides that a company may appoint a person to be an
authorised person only if it is satisfied that the person has the necessary
expertise or experience to be an authorised person or if the person has
satisfactorily completed training approved by the company.
Identity card for company's authorised persons
Clause 215O provides that the company must give each of its authorised
persons an identity card, containing a photograph, signature and expiry date,
to identify the person as an authorised person.
Failure to return identity card
Clause 215P provides that when a person ceases to be an authorised
person, the person must return the identity card to the company within 7
days, unless there is a reasonable excuse. A penalty of 10 penalty units
applies for non-compliance.
Display of authorised person's identity card
Clause 215Q requires an authorised person to produce the identity card
when exercising the powers of an authorised person and to keep the identity
card clearly visible.
Power to enter places
Clause 215R provides that an authorised person may enter a place in
order to inspect, operate, change, maintain, remove, repair or replace a
company facility at the place. The power of entry may be exercised at any
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South East Queensland Water Board (Reform Facilitation)
reasonable time but only if the company has given the occupier at least 14
days prior notice of the proposed entry and advised the purpose of the
proposed entry or the company needs to take urgent action in relation to its
facility at the place, in the interest of public health or safety. The clause
contains a definition of "facility" for the purpose of the clause.
Power to carry out activities
Clause 215S provides that when entering a place, the authorised person
can only carry out the activity that is the purpose of the entry.
Compensation
Clause 215T provides that a person can claim compensation from the
company for loss or expense incurred because of the exercise or purported
exercise of a power of entry. A court of competent jurisdiction can award
compensation if its is satisfied that it is just to do so.
Company to give notice of damage
Clause 215U provides that if, in exercising or purporting to exercise a
power of entry under this subdivision, an authorised person damages
anything, the authorised person must immediately give written notice of the
damage to the owner of the thing, or the person in control of it. If it is not
practicable to do that, the authorised person must leave the written notice, in
a reasonably secure way and in a conspicuous position, at the place where
the damage happened.
Division 6--Information request
Chief executive's power to require information from the company
Clause 215V provides that the company must give the chief executive of
the Department of Natural Resources any information which the chief
executive reasonably requires to be able to perform the chief executive's
functions (those functions are set out in section 8(2) of the Water Resources
Act 1989). The company must provide the information within a reasonable
time after a request. The company is not required to give information which
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South East Queensland Water Board (Reform Facilitation)
might tend to incriminate it. A penalty of 200 penalty units applies for
non-compliance with this clause.
Commercially sensitive information
Clause 215W provides that the chief executive must not disclose to any
person any commercially sensitive information received from the company
under clause 215V.
Division 7--General provisions about the company
Application of Financial Administration and Audit Act 1977
Clause 215X removes from doubt that the Financial Administration and
Audit Act 1977 does not apply to the company.
Division 8--Transitional
Existing approved manual of operational procedures for flood
mitigation
Clause 215Y provides that, until the Minister approves a flood mitigation
manual under division 3, the flood mitigation manual previously approved
under the South East Queensland Water Board Act 1979 for the North Pine
Dam and the flood mitigation manual previously approved under the South
East Queensland Water Board Act 1979 for the Wivenhoe and Somerset
Dams are taken to be the relevant flood mitigation manual approved by the
Minister under division 3.
Amendment of s 250A (Regulation-making power)
Clause 14 provides for the insertion of a new subsection (4) into section
250A of the Water Resources Act 1989. The new subsection (4) provides
that a regulation may fix a water allocation for an entity and impose
conditions on that water allocation. Such conditions may include volumes
and the term of the allocation. This will enable a regulation to be made under
the Water Resources Act 1989 to give the company, the entitlement holders
referred to in clause 215L and other persons a water allocation.
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South East Queensland Water Board (Reform Facilitation)
PART 5--TRANSITIONAL PROVISIONS, REPEAL
AND MINOR AMENDMENTS
State undertakes non-transferable civil liability
Clause 15 applies to any act or omission in relation to the board's
undertaking that occurs before the settlement day and gives rise to a civil
liability that cannot, at law, be transferred to the company and provides that
the State stands in the place of the board in relation to that act or omission.
Civil liability in this clause includes statutory liability but not criminal
liability.
Constructing authority for particular land acquired under the
Acquisition of Land Act 1967
Clause 16 applies to land which the board has acquired as a constructing
authority under the Acquisition of Land Act 1967. Section 41 of the
Acquisition of Land Act provides that if, within 7 years after acquiring land
under the Acquisition of Land Act, a constructing authority no longer
requires the land, it must offer the land to the former owner. Clause 16 of
this Act provides that if any such acquired land is acquired by the State from
the board prior to the settlement day, or is transferred to the company as part
of the board's undertaking, the State or the company as the transferee as the
case may be is taken to be the constructing authority for the purpose of
section 41 of the Acquisition of Land Act. This would mean that if the land
were no longer needed for the purpose for which it was originally acquired,
either the State or the company would have to offer the land for sale back to
the former owner in accordance with section 41.
South East Queensland Water Board By-law 1991 to continue in force
Clause 17 continues the South East Queensland Water Board By-law
1991 in force for a transitional period of two years (unless sooner repealed).
An authorised officer appointed under the by-law is taken to be an
authorised officer of the company.
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South East Queensland Water Board (Reform Facilitation)
Transitional regulations
Clause 18 provides for the making of transitional regulations to facilitate
the doing of anything to achieve the purposes of the Act. A transitional
regulation may only be made within 1 year after the commencement of the
clause and any such transitional regulation made will expire 1 year after the
regulation commences.
Repeal of SEQWB Act
Clause 19 provides that the South East Queensland Water Board Act
1979 is repealed at the end of the settlement day.
Act amended
Clause 20 provides that schedule 1 amends the Acts mentioned in it.
PART 6--EXPIRY
Expiry
Clause 21 provides that the Act expires 2 years after the settlement day.
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South East Queensland Water Board (Reform Facilitation)
SCHEDULE 1
ACT AMENDED
QUEENSLAND COMPETITION AUTHORITY ACT
1997
Schedule, definition "water board", paragraph (b)
Clause 1 provides that paragraph (b) of the definition of "water board" in
the Queensland Competition Authority Act is omitted. The effect of this is
that the South East Queensland Water Board will no longer be included in
the definition of "water board" for the purposes of the Queensland
Competition Authority Act.
Schedule, definition "water board", paragraphs (c) and (d)
Clause 2 provides that paragraphs (c) and (d) of the definition of "water
board" in the Queensland Competition Authority Act will be renumbered to
paragraphs (b) and (c).
SCHEDULE 2
DICTIONARY
This schedule provides the dictionary, defining particular words and
phrases used in the Act, as referred to in clause 4.
© The State of Queensland 1999