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Guidance on applying for an exemption

This guidance includes information for drinking water suppliers who wish to apply for an exemption from compliance with certain requirements of the Water Services Act 2021 (the Act). 

Background

The Act provides the regulatory framework for Taumata Arowai to operate and perform its functions as the New Zealand drinking water regulator.

The main purpose of the Act is to ensure that drinking water suppliers provide safe drinking water to consumers. This is achieved in a number of ways, including requiring drinking water suppliers to ensure that drinking water complies with drinking water standards and compliance rules.

The Act is designed for the majority of suppliers and water supplies. But the Act also recognises for some suppliers it may be disproportionate to the scale, complexity and risk profile of their water supply to comply with all of the legislative requirements, or that suppliers may be able to operate in alternative ways, while still achieving the main purpose of the Act. In such cases, the Chief Executive of Taumata Arowai, or their delegate, has the discretion to exempt suppliers from the need to comply with specified legislative requirements.

However, exemptions exclude requirements that ordinarily apply to drinking water suppliers as part of the statutory scheme. The power to exempt drinking water suppliers from requirements that Parliament has otherwise imposed must be exercised carefully. Taumata Arowai takes the approach that they should be used sparingly and to solve exceptional problems or respond to exceptional circumstances, where other options have been discounted, rather than as a business-as-usual tool. The statutory scheme supports this approach.

When assessing and making decisions on exemption applications, Taumata Arowai and its decision-makers will also be guided by our objectives and operating principles as set out in ss10 and 18 Taumata Arowai–the Water Services Regulator Act 2020.

Exemption types

There are two kinds of exemptions covered by this guidance:

  • General exemptions under s57 of the Act.
  • Exemptions from the requirement to use residual disinfection in a reticulated drinking water supply, under s58 of the Act.

An individual drinking water supplier can apply for a ‘general exemption’ or a ‘residual disinfection exemption’. In either case, an application can be made in relation to a single drinking water supply, multiple supplies, or on behalf of a class of drinking water supplier. Guidance on class exemptions is set out below.

General exemption

A general exemption excuses a drinking water supplier from the need to meet the legislative requirements listed in s57 of the Act. These include requirements to supply drinking water that is safe and that complies with drinking water standards.

Any drinking water supplier can apply for a general exemption under the Act. An applicant must satisfy the Chief Executive (or delegate) that an exemption is consistent with the main purpose of the Act (other than the duty to have a drinking water safety plan), taking account of the scale, complexity, and risk profile of each drinking water supply. This is elaborated further in the decision-making principles described later in this guidance document.

A general exemption may be granted subject to conditions.

If an application is made to exempt a class of drinking water supplier, the Chief Executive must consult the public in relation to the proposed general exemption.

If a general exemption is granted, the affected drinking water supplier is exempt from compliance with the following key legislative requirements in the Act in relation to their drinking water supply or supplies:

  • supplying safe drinking water
  • complying with drinking water standards
  • taking reasonable steps to provide aesthetically acceptable drinking water
  • providing a sufficient quantity of drinking water to consumers at each point of supply
  • protecting against the risk of backflow
  • requirements relating to end-point treatment
  • having a drinking water safety plan
  • keeping records
  • providing information to consumers and having a consumer complaints process

The drinking water supply must still be registered, and the registration must be renewed annually.

Residual disinfection exemption

A residual disinfection exemption exempts drinking water suppliers from the default requirement to use residual disinfection (for example chlorine) in their reticulated supply, or in any part of their supply that includes reticulation.

A drinking water supply is made up of the infrastructure and processes used to abstract, store, treat, or distribute drinking water to consumers or another drinking water supplier. A drinking water supplier may apply for a residual disinfection exemption for:

  • a supply that includes reticulation
  • a part or parts of a supply that includes reticulation, including treatment plants and distribution zones, that can be distinguished from the rest of the supply
  • for a process, such as a requirement for contact time, that is part of a supply that includes reticulation.

To be granted an exemption, an applicant must satisfy the Chief Executive that an exemption is consistent with the main purpose of the Act and that their drinking water will comply with all other legislative requirements and their drinking water safety plan on an ongoing basis. A residual disinfection exemption may be granted subject to conditions.

If an application is made to exempt a class of drinking water supplier, the Chief Executive must also consult the public in relation to the proposed residual disinfection exemption.

Class of supplier exemptions

Exemptions can apply to an individual drinking water supplier or a class of drinking water supplier. This is the case for both general exemptions and residual disinfection exemptions.

The decision maker must consult with the public before granting a class of supplier exemption. The consultation requirements are set by s53 of the Act and must include:

  • adequate and appropriate notice of a proposed exemption for a class of supplier; and
  • a reasonable opportunity for interested people to make submissions; and
  • appropriate consideration of submissions received.

Class of supplier is not specifically defined in the Act. It will be for an applicant or group of applicants to consider whether the drinking water supplies that they operate are so alike that one exemption could be applied to all of them as a single ‘class’.

The determining factors as to whether there is a class of supplier will be based on the features of the drinking water supplies that they operate. The features that may be relevant include:

  • The population served by the supply
  • The nature of the water source. For example, surface water, ground water, or rainwater
  • The general environmental surroundings that may impact on the water quality. For example, intensive livestock farming area or a built-up residential suburb
  • The method of abstraction and water treatment
  • The type of treatment plant and equipment used
  • The method of storage, reticulation or delivery of water to consumers.

An application must clearly set out the common supply features required for an exemption to apply to all supplies of that class. A class of supplier exemption won’t apply if, despite being generally similar, a supply includes components or features in addition to those that are alike, and the additional features may significantly affect the performance of the drinking water supply or its associated risks.

It’s each supplier’s choice whether they seek or rely on an exemption. A supplier may choose to meet the requirements of the Act in other ways, regardless of whether their supply fits the criteria of a ‘class of supplier’ exemption. 

The principles for considering class exemptions are:

  • An application must clearly describe all the common features that relate to the performance and risks of the supplies covered in the application.
  • Taumata Arowai will engage with people who are considering an application for a class of supplier exemption to assist them in deciding whether to apply for individual exemptions or a class of supplier exemption. It will be for the applicant(s) to decide how to frame their application.
  • For administrative convenience, an individual supplier can make one application to exempt multiple supplies with common characteristics – this doesn’t require a class exemption application.
  • Any group or person can apply, and each application will be treated on its own merits.
  • Once a class exemption has been granted, a supplier that fits the class can use the exemption without an application or a fee being required. They must fit the class (including not having material additional components or features that distinguish them from the class) and follow any conditions published as a part of the class exemption, which will usually include notifying Taumata Arowai of the intention to rely on the class of supplier exemption.

The application process

Who can apply for an exemption?

Any drinking water supplier can apply for a general exemption.

In contrast, only a supplier with a reticulated supply (in whole or part) can apply for a residual disinfection exemption.

How to apply for an exemption

Download the application form for an exemption. You can use this application form for all exemption applications by selecting the type of exemption sought on the form.

Email your application form to info@taumataarowai.govt.nz. When we receive it, we’ll check it for completeness and email you with an indicative timeframe and fee for processing the application.

What does it cost?

Fees and charges for exemption applications are set by regulation and are available on the Taumata Arowai website. They may be subject to changes over time.

Fees and charges are made up of:

  • Application fees: for general exemption applications and residual disinfection exemption applications.
  • Assessment charges: for Taumata Arowai personnel processing time, after the base hours covered by each application fee.
  • Expert advice charges: for external expert advice (generally only sought in relation to residual disinfection exemptions applications).
  • Incidental cost charges: costs associated with any travel, accommodation, or other matters reasonably associated with the processing of an exemption application.

Applicants will be provided an estimate of the total costs of processing their application before work on the application commences, unless those costs are not likely to exceed $1,000 (over and above the application fee). The application will only be considered if the estimate is agreed to.

When public consultation is undertaken, the cost of the consultation process won’t be charged to the applicant(s).

Further information about calculating fees and payment of fees is available on the Taumata Arowai website.

How long will the assessment process take?

As a guide, indicative timeframes are:

  • 40 working days: general exemption
  • 50 – 65 working days: residual disinfection exemption, depending on the size and complexity of the supply.

A class of supplier exemption will take longer as there will be more assessment required and a public consultation process.

Taumata Arowai will review the anticipated timeframe for each application and keep the applicant up to date, taking into account:

  • availability of appropriate resourcing
  • number of applications to process
  • the complexity of the supply or supplies that are the subject of the application
  • any consultation requirements for a class of supplier exemption.

The decision-making process

Who makes the decision on the exemption?

The Taumata Arowai Chief Executive (or delegate) makes the decision on each exemption application and may impose conditions.

What are the decision making principles?

When determining each application, the decision-maker is guided by the following principles:

  • Consumption of safe drinking water by consumers is paramount.
  • In order to grant an exemption, the decision-maker must be satisfied that the exemption is consistent with the main purpose of the Act. That is, to ensure that drinking water suppliers provide safe drinking water to consumers. Under the Act, drinking water is ‘safe’ if it’s unlikely to cause a serious risk of death, injury, or illness either immediately or over time.
  • The Act provides for its main purpose to be achieved through several methods. Those include regulatory mechanisms and activities that are proportionate to the scale, complexity and risk profile of each drinking water supply.
  • For residual disinfection exemptions for individual drinking water suppliers, the decision-maker must also be satisfied that all other legislative requirements and the drinking water safety plan will be complied with on an ongoing basis.
  • A general exemption can be consistent with the main purpose of the Act without the drinking water supplier providing safe drinking water to consumers. However, consistency with the main purpose requires that measures, which may include the provision of information, are in place so consumers only consume safe drinking water (so they are unlikely to suffer death, injury, or illness from drinking it). Whether the proposed measures are sufficient to be consistent with the main purpose of the Act will be assessed on a case-by-case basis, including taking into account the scale, complexity, and degree of risk associated with a drinking water supply.

Giving effect to Te Mana o te Wai

When considering and determining an exemption application, the decision-maker must give effect to Te Mana o te Wai to the extent it applies to the function and powers being exercised

The degree to which an exemption gives effect to Te Mana o te Wai is something the decision-maker must consider. When doing so, the decision-maker will take account any advice and guidance framework developed by the Taumata Arowai Māori Advisory Group, Te Puna, on how to interpret and give effect to Te Mana o te Wai, in the context of exemptions.

Being proportionate

Exemptions exclude requirements that ordinarily apply to drinking water suppliers as part of the statutory scheme. The power to exempt drinking water suppliers from requirements that Parliament has otherwise imposed must be exercised carefully. As noted, Taumata Arowai takes the approach that they should be used sparingly and to solve exceptional problems or respond to exceptional circumstances, where other options have been discounted, rather than as a business-as-usual tool.

Factors that may be relevant in this context include:

  • The scale, complexity and risk profile of each drinking water supply.
  • The remoteness and accessibility of a drinking water supply and the availability of utility services.
  • The practicability or cost of options to comply with the Act’s requirements.

Being informed

When making an exemption decision, the decision-maker must ensure:

  • There is adequate relevant information to support the decision.
  • Any information provided to the decision-maker that is not considered relevant is identified and the reasons for that view recorded.
  • Any questions or issues identified with the application are clarified with the applicant prior to making a decision.

Being impartial

An application for a general exemption may be made in relation to any kind of drinking water supply. Each application will be considered on its own merits, without favour for one drinking water supplier (or class of drinking water supplier) over another.

An application for a residual disinfection exemption can only be made in relation to a drinking water supplier for a supply that includes reticulation.  

While the Act establishes the default position that residual disinfection must be provided for reticulated drinking water supplies, it also contemplates that there may be occasions where exemptions should be granted. As with all exercises of discretion by Taumata Arowai, the decision maker approaches applications for exemption from the requirement for residual disinfection with an open mind.

Taumata Arowai personnel are subject to requirements to identify and appropriately manage any actual or perceived conflicts of interest that arise in relation to their work, which help ensure that all decision making under the Act is impartial. All personnel involved in the processing, assessment or determination of exemption applications will comply with these requirements.

Being transparent and accountable

The exemption process will be transparent, so that drinking water suppliers know what to expect from the process and how exemption decisions will be made. Decisions and the reasons for them will be clearly expressed and shared with the applicant. 

The exemptions process will be administered in accordance with the principles of natural justice, which may result in different process steps depending on the nature of a proposed exemption and the scale, complexity and risk profile of the associated drinking water supply or supplies.

Taumata Arowai will keep applicants up to date about the progress of their applications and any requirements for further information that may arise. Applicants will have the opportunity to consider and comment on draft exemption decisions before they are finalised. If there has been an application for a class of supplier exemption, the public will be consulted on the application for an exemption before a decision is made. 

When an exemption is granted the decision and the reasons for it will be published in accordance with legislative requirements, along with any conditions and the reasons for the decision to grant the exemption. This will involve a combination of Gazette notices and publication on the Taumata Arowai website. General exemptions, and residual disinfection exemptions for classes of drinking water supplier, must also be presented to the House of Representatives and are subject to Parliamentary disallowance processes set out in the Legislation Act 2019.

When an application is declined the decision and the reasons for it will be published on the Taumata Arowai website.

Being consistent

Exemption applications will be considered on a case-by-case basis. For the purposes of consistency in regulation and to help ensure that similar decisions are made (and similar conditions are imposed) in similar circumstances, exemption applications will be made against a common set of principles and taking into account previous decisions. 

What information is required in a General Exemption application?

An applicant must satisfy the decision-maker that a general exemption application should be granted.

In line with this guidance and with the Act, applicants will need to:

  • provide a description of the supply
  • describe the reason they are applying for an exemption
  • demonstrate how they will minimise any risk to public health, whilst still being consistent with the provision of safe drinking water to consumers
  • indicate how they will ensure consumers will receive drinking water and that it’s safe to consume
  • detail a list of any other options that they have considered to provide safe drinking water (this may also include consideration of Acceptable Solutions and why they are not able to be adopted)
  • explain how the granting of an exemption will be consistent with the main purpose of the Act
  • explain how the granting of an exemption will give effect to Te Mana o te Wai, to the extent it is relevant.

What will the decision-maker consider when assessing a general exemption application?

In relation to applications for general exemptions, the considerations that will be taken into account include:

  • that any exemption must be consistent with the main purpose of the Act
  • whether or how the proposed exemption would give effect to Te Mana o te Wai, to the extent that it is relevant
  • if safe drinking water can viably be provided to consumers, taking into account the scale, complexity and risk profile of the supply
  • what measures may need to be put in place to ensure water is safe to drink and whether an Acceptable Solution is available for the supply type and has been considered
  • if drinking water cannot be made safe to drink, what measures can be put in place to ensure consumers are advised that the water is not safe to drink
  • whether practical considerations (including the costs of compliance) are unreasonable or impractical and disproportionate to the risks to the consumers if the supply was exempted
  • the nature and consequence of conditions that might be imposed on an exemption
  • relevant provisions in any drinking water compliance, monitoring, and enforcement strategy prepared under the Act.

The decision-maker can only grant an exemption if they are satisfied, on all the available information, that the exemption is consistent with the main purpose of the Act.

General exemption conditions

An exemption can be granted without conditions or on any conditions that the decision-maker considers appropriate. The conditions form part of the exemption. Non-compliance with any condition is a breach of the requirements of the exemption itself.

The Act specifically provides in s57(6) that general exemption conditions may include requirements:

  • ensuring appropriate measures are taken to minimise any risk to public health
  • ensuring consumers are informed that water may not be safe and are aware of the requirement to boil the water before consumption (including via signs at taps)
  • relating to the composition of the drinking water
  • requiring monitoring of the quality of the drinking water
  • providing for notification of the exemption and conditions to the relevant local authority.

The list above is not exhaustive and other conditions may be imposed, for example, requiring the supplier to:

  • inform Taumata Arowai immediately of any circumstances that may change the risk assessment of the drinking water supply or the basis on which the exemption was granted
  • ensure that any analysis is undertaken by an accredited laboratory
  • report results to Taumata Arowai with the frequency specified.

What information is required for Residual Disinfection Exemption?

Applications for residual disinfection must include the following information:

  • the reasons why an exemption is sought
  • a history of the drinking water supply
  • a comprehensive description of the drinking water supply
  • a comprehensive assessment of the source water, risks associated with the source water and how they are managed
  • a comprehensive description of the water supply distribution system, including how it is managed, what organisations undertake work on it how people are authorised to work on it, operating procedures, maintenance procedures and hygiene procedures that are relevant to it
  • details about the performance of the distribution system including matters like water loss and how it has been assessed, pipe age, materials, criticality, breakage rates etc
  • an inventory of risks associated with the drinking water supply
  • the steps that the water supplier will take to manage the risks to contamination of the water supply in the absence of a residual disinfectant
  • details of emergency disinfection procedures for the treatment and distribution and the circumstances that would require its use
  • details of communications plans for alerting consumers if poor quality water is provided
  • a current or draft drinking water safety plan
  • a history of water testing results for the supply including any results that have exceeded MAVs, reports into those exceedances, the reasons exceedances have occurred, and the remedial actions taken in response to those
  • any other information that the water supplier considers relevant.

An applicant must submit a draft drinking water safety plan, or a document that contains materially the same information, to Taumata Arowai alongside their exemption application. This is necessary to demonstrate how the supplier will meet other legislative requirements and provide safe drinking water without using chlorine or another type of residual disinfection. The drinking water safety plan should address the water supply attributes set out in the table below.

It’s the responsibility of the applicant to provide sufficient information to demonstrate how their water supply can, on an ongoing basis, be operated in a way that provides safe water to consumers without residual disinfection. If insufficient information is provided to allow a decision to be made, further information may be requested by Taumata Arowai.

What will the decision-maker consider when assessing a residual disinfection exemption application?

To support the decision-maker in deciding residual disinfection exemption applications, independent technical advice is sought from a panel of international experts. The role of the external advisory panel in assessing residual disinfectant applications will be proportionate to the scale, complexity, and risk of the supply to which the application relates. Additional advice may also be sought from Taumata Arowai staff, or from other sources, as is necessary to support the decision-making process. The scope of advice may include whether the application should be approved and if any conditions should be imposed.

An application for a residual disinfection exemption will involve the assessment of a range of attributes relevant to the specific water supply system and the organisation represented by the applicant.

Water supply attributes that will commonly be considered when an application for an exemption for residual disinfection is considered are set out in this table. Other attributes will be considered as relevant:

Attribute

Consideration

Cross-connection control and backflow prevention

Demonstration of an effective cross-connection control and backflow prevention programme

Pressure management

Demonstration of comprehensive understanding of network pressures and best practice for pressure management

Hygienic practices

Demonstration that hygiene best practices for planned and unplanned repairs are always used

Water storage

Demonstration of best practice for operation, inspection, and maintenance of water storage

System condition

Demonstration of regular assessment of system condition and that overall system is sound

Sanitary sewers

Demonstration of sufficient separation of sanitary and water networks

Seismic design

Demonstration of best practice in system design for seismic resiliency

Operational staff

Demonstration of staffing level adequacy, technical competency, awareness of risk, involvement in quality management and continuous improvement, and continual training

Network cleaning

Demonstration of best practice in regular and effective network cleaning programme

Water loss

Demonstration of best practice in leak detection and loss control programme and minimal non-revenue water

Online monitoring

Demonstration of effective online monitoring capability for key water quality parameters in the network at key locations

Continuous improvement

Demonstration of best practice in asset management and capital improvements, including repair, rehabilitation, and replacement planning and activities

Electrical power

Demonstration of best practice for reliability of electrical power system, including emergency backup and standby capabilities

Emergency chlorination

Demonstration of provision of emergency chlorination capability for network

Incident and emergency response

Demonstration of effective emergency response capabilities, including communication, contingency supply, response protocols, regular training exercises

Public communications

Demonstration of effective public communications strategy and capability

Customer complaints

Demonstration of effective capability to receive and rapidly respond to customer complaints

Organisational awareness and commitment

Demonstration of organisational awareness of system risks and commitment to water quality protection from all levels of personnel

Residual disinfection exemption conditions

The decision-maker may grant residual disinfection exemptions without conditions or on any conditions they see fit to impose and suppliers must comply with them. Amongst other matters, conditions may be directed at ensuring suppliers meet their ongoing monitoring requirements and set requirements that are specific to the solution. Non-compliance with any condition is a breach of the requirements of the exemption itself.

Conditions could include:

  • Ensuring appropriate measures are taken to minimise any risk to public health
  • Ensuring suppliers meet their ongoing monitoring / reporting requirements, and set other monitoring / reporting requirements that are specific to the supplier’s solution
  • Notification of the exemption and conditions to the relevant local authority
  • A requirement to assess the quality of the water provided to consumers
  • A requirement to inform Taumata Arowai immediately of any circumstances that may change the risk assessment of the drinking water supply or the basis on which the exemption was granted.

Application not granted

An application may be declined where the decision-maker is not satisfied on all the available information, including any recommendations from the External Advisory Panel, that the applicant is able to demonstrate the ability to provide safe water and meet other legislative requirements without using residual disinfection in the supply. 

Advising of the draft decision

Before a final decision is made to grant an exemption subject to conditions, or to decline an exemption, the applicant will be provided with a copy of the draft decision and the reasons for it.

The applicant will also be provided with:

  • any expert advice provided to the decision-maker in relation to the proposed exemption, and
  • in the case of an application for a class of exemption, any submissions or comments received from the public in the course of consultation on the proposed exemption.

The applicant will be able to provide Taumata Arowai with any comments or additional information relating to the draft decision, and the expert advice or public feedback that informed it, within 10 working days (or any longer period the decision-maker may allow).

The decision-maker will take account of any comments or additional information received from the applicant before making a final decision on the exemption application.

We’ll advise the applicant by email of the final exemption decision. If the application is approved, the applicant will be sent the published notice. 

Challenging an exemption decision: internal review and right of appeal

Any person affected by the decision to grant or refuse an exemption (whether the applicant or not), or the conditions or timeframe applied to an exemption, may apply to have that decision reviewed internally by Taumata Arowai.

An application for internal review should be made within 20 working days after the date on which the decision first came to the notice of the affected person. Taumata Arowai may allow later applications where good reasons exist. There is no fee for an internal review.

An internal review decision may result in the exemption decision (including any conditions or timeframe associated with the exemption) being confirmed or varied, set aside, or substituted with a different decision. 

Information on how to apply for a review is available here.

There is a subsequent right of appeal to the District Court against an internal review decision by Taumata Arowai and further rights of appeal from the District Court to higher courts on questions of law.

Publication of approved exemptions

Notices of all general exemptions, residual disinfection exemptions and class of supplier exemptions will be published on the Taumata Arowai website, with the reasons for the decision.

General exemptions and class of supplier residual disinfection exemptions will also be published in the Gazette and must be presented to the House of Representatives and are subject to Parliamentary disallowance processes set out in the Legislation Act 2019.

The date on which an exemption will take effect will be specified in the published notice.

The Public Register of Drinking Water Supplies will also include information on any exemptions that are approved for a supply. This will include identification of any class of supplier exemption that a supply is relying on.

Managing approved exemptions

How long is an exemption valid for?

An exemption may be issued for a maximum of 5 years, but it could be for a shorter period. A shorter period may be requested by the applicant (e.g. they are intending to comply but cannot complete the work required to the infrastructure by the deadline and need more time). A shorter duration might also be specified by the decision-maker as part of its decision to grant the exemption. For example, a shorter period may be specified because new technology that would enable the supplier to comply is reasonably likely to be available within a shorter period and an exemption would be unlikely to be approved if it was already available.

Continuing an exemption after the expiry date

Exemptions do not automatically renew. Prior to the expiry date, a supplier who seeks to continue an exemption must submit another application, along with the appropriate fee. The new application will be considered on its own merits. Amongst other matters, consideration will be given to the performance of the supply during the period of the original exemption.

What happens if a drinking water supplier does not comply with the exemption conditions?

Drinking water suppliers must comply with any exemption conditions. Taumata Arowai may serve compliance orders or directions on the water supplier if conditions are not met.

In more serious cases of non-compliance Taumata Arowai may prosecute suppliers for failing to comply with conditions imposed on general exemptions. This provides an enforcement alternative to revocation, with maximum penalties of a $25,000 fine for an individual and a $100,000 fine for a body corporate or an unincorporated body.

It’s also an offence involving a drinking water safety plan for a supplier to fail to comply with any condition to a residual disinfection exemption. The maximum penalties are a $50,000 fine for an individual or a $200,000 fine for a body corporate or unincorporated body.