Official Report: Minutes of Evidence

The Chairperson (Ms D Armstrong): I welcome the representatives from Northern Ireland Water to the Senate Chamber. We are joined by Angela Halpenny, head of environmental regulation, and Orla Crothers, head of climate change and waste water regulation reform. I invite you to brief the Committee.

Ms Angela Halpenny (Northern Ireland Water): Thank you very much, Committee Chair and members, for the opportunity for me to attend the Committee today with my colleague Orla to participate in the consultation process for the Fisheries, Aquaculture and Water Environment Bill.

NI Water promotes water as a valuable resource. Our strategy for 2021 to 2046 outlines NI Water's focus on:

To support the driving of improvements to water quality in our rivers, lakes and seas, NI Water recognises the importance of modernising approaches to the water environment, adopting a catchment-based approach and having appropriate levels of enforcement. We welcome the Department of Agriculture, Environment and Rural Affairs' outlined approach to enforcement, whereby the Department will initially seek to work with those that are regulated to achieve compliance through positive engagement before other enforcement actions are taken. Having reviewed the Bill, we note that it contains two amendments to the Water (Northern Ireland) Order 1999 that specifically impact on NI Water, namely the proposed uplift of the maximum fine from £20,000 to £50,000 and the introduction of fixed penalty notices.

On many occasions, reference has been made to NI Water being treated differently when it comes to prosecution: I will take the opportunity to provide clarity on that matter. NI Water was formed in 2007, following the Water and Sewerage Services (Northern Ireland) Order 2006, which included provision for the removal of Crown immunity, meaning that NI Water was liable for prosecution for environmental offences. Since 2007, NI Water has been subject to prosecution by the Northern Ireland Environment Agency (NIEA) for pollution offences under article 7 of the 1999 Order and has faced court on a number of occasions. That is a matter of public record. As a custodian of the environment, NI Water takes each prosecution case seriously from an environmental impact perspective and from that of associated reputational damage. Therefore, we always aim to operate our assets in such a way as to avoid situations in which pollution arises, and we certainly do not deliberately set out to cause pollution or to discharge untreated waste water into our waterways.

On the proposed fixed penalty notices, NI Water considers it important that clear guidelines be put in place for DAERA officials, should a more flexible enforcement system with increased powers to introduce fixed or variable penalties for minor to moderate breaches of legislation be introduced. The vast majority of reported NI Water pollution incidents are classified by the NIEA as being of low severity. In most cases, the root cause has been third-party action, such as abuse of a sewer through the disposal of inappropriate items, rather than as a direct result of management failure on the part of NI Water. Our view is that the introduction of fixed penalty notices against NI Water will not provide an immediate deterrent against non-compliance for minor breaches of legislation relating to low-severity pollution incidents that have been attributed to third-party offenders, because, ultimately, the offender — the party interfering with the sewerage system — will not be held to account.

In considering the impact on NI Water of the introduction of fixed penalty notices, it is difficult for us to quantify that without having the details of the potential level of penalty to be imposed and in which circumstances. Ultimately, water and waste water infrastructure underpins public health, housing, economic growth and environmental protection. If we want to deliver on any of those ambitions, we need the infrastructure to support them. As many independent reports have shown, Northern Ireland's water and waste water infrastructure has experienced sustained underinvestment over many years. The consequences are now evident in ageing assets, waste water capacity constraints, environmental pressures and restrictions on environmental improvement, housing and economic development. Those challenges cannot be resolved without sustained investment across multiple planning periods in line with our various business plans.

NI Water's price control 28 (PC28) business plan, which covers the period from 2028 to 2033, identifies £13 billion of current need and proposes approximately £3 billion of investment as the minimum acceptable level required for water and waste water services. The plan focuses on maintaining safe and reliable essential services, meeting statutory and regulatory obligations, protecting drinking water and beginning to address waste water constraints and environmental performance. NI Water highlights the fact that, if PC28 is not adequately funded, difficult choices will be unavoidable. Investment would have to be reduced or delayed, increasing the risk of asset deterioration and non-compliance, slowing environmental improvement and leaving more communities constrained in their ability to support new homes and economic growth. NI Water recognises the pressures on public finances and is committed to efficiency, transformation, innovation and making the best use of existing assets. While innovation can stretch investment to some extent, it cannot replace the sustained capital investment that is necessary. Progress will require government, regulators, developers, NI Water and other stakeholders to work together on a practical, phased and properly funded approach that supports public health, housing, the economy and the environment together.

To summarise, NI Water recognises the intent behind the higher fines proposed in the Bill, but, in an already constrained system, increasing financial penalties, with the associated legal costs, would further reduce the resources available to NI Water for investment and environmental improvement without addressing the underlying capacity and infrastructure challenges that give rise to many of the issues.

The Chairperson (Ms D Armstrong): Thank you very much for your briefing. I think that all MLAs are aware of NI Water's resource difficulties. I suppose that that is a matter for the Minister for Infrastructure to consider.

I have a few questions. You argue that increasing the financial penalties risks diverting resources away from infrastructure investment and environmental improvements. The purpose, however, of the penalties is to ensure compliance. How can the Committee be satisfied that financial pressures are not being used to excuse failures to meet environmental obligations?

Ms Halpenny: We have identified the priorities for our PC28 business plan. We have collaborated with our regulators to identify a process of prioritising the assets with the greatest need. We will continue to strive to make improvements, subject to funding availability.

The Chairperson (Ms D Armstrong): You said that you have no control over third-party pollution of the waterways.

What has worked? What has been a good action to take to minimise third-party pollution?

Ms Halpenny: We have an education team that promotes the fats, oil and grease campaign and the "Bag it and Bin it" messaging. We welcome the DAERA water quality campaign, which was launched recently to raise awareness of the appropriate use of our waterways and waste water systems. It is about continually promoting messages about and raising awareness of sewer blockages, particularly if a sewer backs up and floods an individual's home. That is a really unpleasant experience. It is about encouraging everyone who uses the public waste water system to do so responsibly. That will help us to manage waste water.

The Chairperson (Ms D Armstrong): You highlight the £13 billion need and identify £3 billion as the minimum acceptable investment for PC28: what environmental outcomes would be at risk if that minimum funding level were not achieved?

Ms Halpenny: For our price control, we will always prioritise base maintenance, which is like servicing a car to keep it running. We call that the base maintenance of all our assets across our water and waste water asset base. The quality of our drinking water has a higher priority than waste water investment, so there would be a risk of not delivering the waste water improvements that we have included in our PC28 plan.

Mr McAleer: Thank you, Angela and Orla. Is the £3 billion for base maintenance to which you referred your running costs over a period, as opposed to any investment in modernisation?

Ms Halpenny: No, sorry. The £3 billion would include investment across a broad range of prioritised themes. Base maintenance would form part of the overall £3 billion.

Mr McAleer: In your presentation, Angela, you said that you will need clear guidelines on fixed penalty notices: what clarity is required?

Ms Halpenny: I understand that there are quite a number of DAERA or NIEA officials out on the ground investigating incidents and so on. There is room for subjectivity, depending on an individual's perception, so it is important that there be consistency across all the teams that will apply the regulations.

Mr McAleer: Should penalties for management failures differ from those for third-party actions?

Ms Halpenny: Yes. I can speak only from my experience of how NI Water has been regulated. The situations in which we have ended up being subject to prosecution have primarily been associated with management failure. My view is that, if a pollution incident arises and it is clear that there is something in the sewer that we are not obliged to receive, that is a third-party intervention. Sewerage systems are complex, however. It is difficult to pinpoint the individual or the property that caused the issue. In some instances, multiple properties could have caused it.

Mr Blair: Thanks to you both for the information that you have supplied today. My questions will be pretty negative, given the reality. That reality is reflected in your submission. I represent South Antrim, which has the shoreline of Lough Neagh from south of Glenavy to north-west of Toome. I am familiar with the Lough Neagh crisis and its impact on the people whom I represent. You can therefore imagine my frustration when I read today's media coverage about the fact that Northern Ireland Water is discharging millions of tons of sewage into Lough Neagh every year. We more or less know that. Only one third of the pipes involved in that distribution of sewage are monitored. I will ask you two questions. First, what measures are being taken currently to improve the situation? Secondly, what re-profiling and prioritisation has there been to try to better it in the months and years ahead?

Ms Halpenny: I will pass that one to Orla.

Ms Orla Crothers (Northern Ireland Water): Throughout price control 21 (PC21), we have been running a multiyear investment programme to install event duration monitors (EDMs) at our storm overflows. The programme was initially prioritised for bathing waters and shellfish water protected areas. As we moved into subsequent phases — again, liaising with the NIEA — we prioritised Lough Neagh. Its catchment, if we include its contributing rivers, covers around 40% of the Province and a lot of the population. There are over 700 storm overflows. We are moving to install EDMs across the Lough Neagh catchment. We have included in PC28 a programme to continue to extend the installation of EDMs so that all overflows — or 95% of them — will be covered by the end of the next price control period. That will mean that we have monitoring available for all storm overflows or the vast majority of them.

Mr Blair: OK. Thank you.

The Chairperson (Ms D Armstrong): Thank you. That was useful.

Mr T Buchanan: NI Water is concerned about the increase in fines for pollution incidents. If you were to look back over the past three or four years and take an average of what NI Water has paid out in fines, what would the difference be, say, annually if the fine were to be increased to a minimum of £50,000? How much extra would NI Water pay out in fines?

Ms Halpenny: I do not have those figures in front of me today. The fines depend on the judicial system, but, typically, they range from £5,000 to £10,000 per incident. There have been occasions on which cases were referred to the Crown Court, resulting in higher fines.

Mr T Buchanan: The issue is that, for many years, the focus was always on and the finger always pointed at the farming community. They were held responsible for the pollution of our rivers and waterways. It is only more recently that the finger has been pointed elsewhere, and people have been saying, "Well, the farmer isn't the only one who is polluting the water here. So is NI Water". Given the amount of pollution from NI Water — John mentioned it — that is going into rivers and waterways, something drastic has to be done. Are we starting to see any improvement, or is the same amount of pollution still going into our waterways? What improvement has there been?

Ms Halpenny: We need to be clear. NI Water came to the Committee in March and presented information on the models that we are developing for the Lough Neagh rivers. It is important to remember that the discharges that we make into waterways are made under Water Order consents, so we have a consent to discharge. Sewerage systems in Northern Ireland are pretty much combined systems, which means that they take rainwater and waste water into the same sewers. In high rainfall events, the operation of the combined sewer overflows to discharge diluted waste water is a legitimate use of the waterway.

In most circumstances, the discharges are highly diluted. Untreated waste water is not being discharged into the waterways.

Mr T Buchanan: Are all the discharges that go into our rivers and waterways regulated so that you know exactly how much is going in and what is going in?

Ms Halpenny: There is a programme of installation of further monitoring equipment. We put sensors on the overflows to record events and their duration, so we will know how long discharges operate and the occasions on which they operate. We are installing flow metering in our waste water treatment works to measure the actual volume that is being treated. That is a big programme.

Mr T Buchanan: I suppose that this will be a more difficult question: has NI Water ever done an assessment of the damage that the waste that it puts into rivers causes to rivers and waterways and the life in them?

Ms Halpenny: Responsibility for monitoring the water quality in rivers falls to the NIEA and DAERA. Under the water framework directive, they have monitoring programmes at strategic points on all the rivers in Northern Ireland. That information is publicly available on the map viewer.

Mr T Buchanan: If all the waste that goes into the rivers is regulated by NI Water, why are you getting fined?

Ms Halpenny: No. NI Water is regulated by the NIEA.

Mr T Buchanan: Why are you getting fined? You say that you have licence, if you like, to put all that waste into the rivers and that you know how much is going in, so why are you getting fined?

Ms Halpenny: When operational issues arise, such as blocked sewers, or if we have an issue with the pumping station and are not able to deal with it fast enough, the NIEA will initiate enforcement proceedings.

Ms Crothers: It is probably worth noting that we are subject to enforcement notices that require us to upgrade a treatment works through, for example, growth or tighter environmental standards. We will be given an enforcement notice to deliver that. That will generally be aligned with our business planning periods, because we operate to regulatory cycles. With waste water regulation reform and as we install more instrumentation to monitor overflows and treatment works, more information will become available on the performance of our waste water assets, which will likely highlight the need to improve some assets further. We will then be subject to more enforcement notices. For us, it will be important to work with our regulators to develop our business plan so that, in order to make those upgrades, we can align the funding that we receive with the periods that are provided to us for planning, design, land purchases and suchlike.

Mr T Buchanan: All the work that you are doing is commendable, but I am still trying to get my head around why, if all the waste water that you put into the rivers and waterways is diluted and you have licence to do so, you are getting fined. Is it because you put in too much stuff or because the stuff is not as diluted as it should be? What is the problem? If you were doing everything by the book, you would not be fined.

Ms Halpenny: We have made it clear that waste water capacity is under strain and that improvements are required. We have a process for classifying our storm overflows. I hope that I have not misled you by talking about all our consents. We have a consent to discharge. In our sewerage systems, that is known as a "collection system consent". All the overflows and pumping stations in the catchment will be listed in a table. There is then a process of assessing whether they are satisfactory or unsatisfactory. We are working through a process with our regulators to determine the status of each overflow. We have been open about that. The information is on our website that we have a significant number of unsatisfactory intermittent discharges (UIDs). Those discharges will operate too soon, if you like, and there is not sufficient storage or screening available to meet all the environmental needs. The planned PC28 investment would begin to address some of those constraints.

Mr T Buchanan: Thank you.

Miss McIlveen: Thank you for your presentation. You will know that I have submitted quite a number of questions about my constituency, in particular about Strangford lough. My question overlaps with John's. I am sympathetic to your argument about underinvestment. Strangford lough, however, is probably one of the most designated areas of water in the United Kingdom. Through answers to some of our questions, we have already uncovered that there are particular issues. Tens of millions of litres of diluted sewage are coming from just one pumping station. In the public's mind, sewage is sewage regardless of whether it is diluted. In response to John's question about Lough Neagh, you said that you planned to invest in monitoring, particularly through the use of EDMs: are you planning to do the same at Strangford lough?

Ms Crothers: Yes. We will continue to install EDMs this year and next year. By the end of that period, as we roll into PC28, it is our intention to have 95% of all overflows monitored. Where overflows are not monitored, there will be occasions on which technical infeasibility means that we cannot access an overflow or that there is not a sufficient signal for us to get a return on the data coming back to us. We therefore anticipate that there will be some minor cases that mean that we will not be able to cover all overflows, but it is our intention to cover all that we can.

Miss McIlveen: The challenge in all of this is that there has been an absence of data. You have now made an investment that will capture more data. That, however, creates the further gap of what the intervention will be to rectify the situation.

That leads me on to questions about fixed penalty notices, the potential withdrawal of the statement of regulatory principles and intent (SORPI) and the impact that that would have on your overall ability to make an intervention.

Ms Halpenny: As we get more data, that will give us better operational insight. For years, the storm overflows on the sewer networks had no telemetry to alert us when a problem arose. Our operational centre is able to monitor the performance of the networks that have EDMs in place and can therefore send out crews to deal with operational issues and solve them more quickly than waiting until someone spots an overflow and reports it. We are improving those processes all the time.

We want to get to a place in which SORPI is no longer needed, but that is possible only with adequate and sustained investment. SORPI was introduced in order to manage the consequences of historical underfunding. Although we support the aspiration to remove it, any decision to do so must be accompanied by a funded, cross-departmental transition plan with a phased approach. The real challenge, however, is to address the infrastructure deficit that made SORPI necessary in the first place. Without the right investment and a credible alternative, the result will be fewer new homes, constrained economic growth and greater environmental risk.

Miss McIlveen: What is your estimate of the number of homes and businesses that may be impacted by the removal of SORPI?

Ms Halpenny: I am sorry, but I do not have those figures with me today.

Miss McIlveen: It would be useful if you could supply them to the Committee.

Ms Halpenny: Yes.

Miss McIlveen: Thank you.

Ms Finnegan: Thank you for your briefing. I did listen in to it. I did not miss it; I was linked. I found it useful in explaining your position. You have been frank about the underinvestment and stuff like that, and it is important to get that message across.

Michelle touched on the phasing out of SORPI and so on, so I am happy for you to come back with the number of houses that will be affected. In an ideal world, where waste water infrastructure was up to modern standards, would you support the recommendations in the Bill?

Ms Crothers: In our response, we highlighted that we understand and recognise the need to modernise the system and move with the times and that there are appropriate levels of enforcement for water offences, so we support the intent of the Bill. For us, it is more the implementation and phasing of that as well as the need for the initial step of positive engagement on how priorities can be aligned with what are set cycles and that we engage with our regulators to manage that so that, with any enforcement notices, we have time to put improvement plans in place before further action is taken.

Ms Finnegan: The rest of my questions have already been answered, so thank you.

The Chairperson (Ms D Armstrong): Just one final one from me. Have you had any discussions with DAERA, the Utility Regulator and other stakeholders about funding requirements linked to future compliance obligations?

Ms Crothers: Yes. Our key stakeholders are part of engagement groups as we develop our business plan so that we have an opportunity to set out the processes by which we look at how we prioritise and assess environmental risk to get feedback from DAERA and NIEA on those processes so that, as we build our business plan, we have that engagement and are designing it alongside all our stakeholders. They are engaged throughout the process of preparing the business plans, and we welcome their input to help us to understand the environmental needs in particular.

Ms Halpenny: In early April, we submitted our outline capital submission. That was the first cut at which projects would be included in the PC28 plan. At that time, there were one-to-one presentations to each key stakeholder with different scenarios for levels of funding and what could be delivered for each.

The Chairperson (Ms D Armstrong): I think that that answers that.

Thank you again, Angela and Orla, for coming in this morning, and for your presentation, which has been helpful for the Committee.

Ms Halpenny: Can I say one more thing?

The Chairperson (Ms D Armstrong): Yes.

Ms Halpenny: Will there be an opportunity for any fines that might be generated as a result of delivery of the Bill to be ring-fenced to deliver environmental improvements?

The Chairperson (Ms D Armstrong): We can submit that as a comment. We will certainly do that.

Ms Halpenny: OK, thank you very much.