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Water Resources Regulation – Key issues and Principles

Water Resources Regulation – Key issues and Principles. March 2010. What is regulation?.

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Water Resources Regulation – Key issues and Principles

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  1. Water Resources Regulation – Key issues and Principles March 2010

  2. What is regulation? • “At its most general level, it refers to the means by which any activity, person, organism or institution is guided to behave in a regular fashion, or according to rule. In principle, reference can be made to the regulation of any kind of social behaviour… In the context of socio-legal studies, the concept has two main advantages. First, it leaves a useful ambiguity over the extent to which such regular behaviour is generated internally or entails external intervention. Secondly, it embraces all kinds of rules, not only formal state law.” • Picciotto, Sol and Campbell, David (eds). New Directions in Regulatory Theory. Blackwell publishing. 2002. p1

  3. Key elements of regulatory Framework Informal regulatory framework Media Formal regulatory framework Consultation Public participation Lobby Groups Policy Legislation Community Groups Regulating human impact on water resources Consumer Groups Organisations Instruments Social norms Self-regulation Human capacity Financial resources Customary law

  4. Why regulate? Public interest Market failure Response to interest group demands Result of agencies captured by regulated industries Product of competition between regional political economies

  5. Nested levels of Regulation International Catchment National Local Catchment

  6. Selecting Appropriate Instruments / Approaches • Regulation is a site of contestation • Issue of scale - profoundly affects outcomes • different groups have increased access to regulatory decision making at different spatial scales • decisions regarding scale are critical in the contestation for regulatory power • Raises issue of how to balance regional or local flexibility with compliance with national objectives • Distributional impacts of regulation • Pro-poor regulation

  7. Principles for Water ReSources Regulation Policy Principles for WR regulation Operational Principles for WR regulation Implementable Equitable Redistributive Low transaction costs Non-discriminatory Necessary Adaptive Appropriate to available resources Transparent Participatory Aligned with govt objectives Clear roles and mandates

  8. Water Resources Regulatory Chain AC Political regulation of public sector Parliament Independent regulator? Economic Regulation Dept of Water Affairs Governance Regulation Technical Regulation Judicial regulation of public sector Public sector regulation of public sector as regulatory authority Courts and Water Tribunal Public sector regulation of private sector as water users Catchment Management Agency Technical regulation Private Water Users Public sector regulation of public sector as water user Government Water Users

  9. Key Elements of Water Resources Regulation National Development and Transformation Objectives National Water Resources Objectives Policy Development and Articulation Economic Regulation Technical Regulation Institutional Regulation Compliance Monitoring and Enforcement

  10. Policy Development and Articulation • Key issue: • Translation of water resources regulatory policy into a clear, targeted, costed and implementable strategy and plan.

  11. Economic Regulation • Key issues: • No formal economic regulation currently • Capacity • Understanding economic regulation for water resources • Full value chain regulation • Conflict of interest • Independent water economic regulator?

  12. Governance Regulation • Ensuring good governance of water management institutions eg CMAs • Key issues: • Capacity; • Lack of separation between government’s role as sole shareholder and regulator; • Lack of clarity re governance responsibility of Board and regulatory responsibility of DWA. • Effective instruments and practice to ensure good corporate governance of water management institutions;

  13. Technical Regulation • CMAs • Regulation of abstraction, discharge, storage including dam safety, water quality, ecological and basic human needs reserve, water allocation reform; etc • DWA • Regulation of CMAs to ensure adequate technical performance

  14. Rainfall Sea 1 2 Stream flow reduction activities Interbasin transfers 18 10 17 Water Resource Discharge 20 11 Altering beds/ banks of water course Waste Water Treatment Discharge 16 9 15 Raw water non-consumptive use Treated water non-consumptive use 3 5 8 14 19 Ecological Reserve Storage 7 Raw water consumptive use Treated water Consumptive use Re-use 6 4 13 Water Treatment International flows 12 Abstraction Water Resources Water Services

  15. Technical Regulation • Key issues: • Lack of capacity; • Unclear roles and responsibilities in DWA; • Lack of progress on establishment of CMAs • Lack of establishment of NWRIA - leaves DWA as player/referee re operation and maintenance and safety of state dams; • Development, revision and application of more appropriate tools

  16. Compliance monitoring and Enforcement • Key issues: • Lack of capacity from inspectors to legal officers; • Lack of effective and targeted CME strategy aligned to available capacity • Poor alignment with other regulatory agencies such as DEA and PDEAs; • Weak enforcement tools, particularly in relation to local government • Limit on sanctions (e.g. fines) is too low to act as a real deterrent in many cases

  17. Licence revocation Licence suspension Criminal penalty Civil penalty Warning letter Persuasion An example of a regulatory pyramid (source Picciotto and Campbell 2002 p 20)

  18. Minimum norms and standards Command and Control Specified technology Pricing (abstraction and discharge) Economic Instruments Subsidies Tradable permits Market Mechanisms Technical Regulatory instruments Water banking Developing basin objectives Participatory planning Negotiated agreements Voluntary agreements Community based policing Provision of information to regulator Information (Toxic) discharge register Publication of compliance

  19. Regulatory Impact Assessment • Presidency working on this as requirement for all regulation • What does it mean in relation to WR regulation?

  20. Institutional Arrangements • Status quo + • Real need is to implement existing provisions more effectively • Regulatory branch in DWA • Establishment of CMAs • Independent regulator • Such as EPA or Environmental Agency? • Evolution of institutional arrangements not quantum leap • Should be informed by specific SA context including resource constraints • Different arrangements for technical vs economic and governance regulation?

  21. Relationship to other strategies • Regulatory strategy must align with • White Paper • NWRS • Water Services Regulatory Strategy • DEA strategy for environmental regulation

  22. Key Challenges • Transformational regulation • Understanding distributional impacts of particular approaches • Capacity, capacity, capacity • Align strategy with available capacity and expand as capacity develops • Build synergy with other regulatory departments eg DEA/PDEAs • Fast track establishment of CMAs • Formal programme to develop necessary skills • Institutional arrangements

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