March 2010

  “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

Informal regulatory framework Formal regulatory framework Media Policy Organisations

Consultation Public participation

Legislation Regulating human impact on water resources Human capacity Instruments Financial resources Lobby Groups Community Groups Consumer Groups Social norms Self regulation Customary law

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

Catchment Local Catchment National International

 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

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

Parliament Courts and Water Tribunal Political regulation of public sector Economic Regulation Dept of Water Affairs Governance Regulation Technical Regulation Judicial regulation of public sector regulatory authority Catchment Management Agency Technical regulation Public sector regulation of public sector as water user Independent regulator?

Public sector regulation of private sector as water users Private Water Users Government Water Users

Policy Development and Articulation Economic Regulation Technical Regulation Institutional Regulation Compliance Monitoring and Enforcement

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Key issue:

 Translation of water resources regulatory policy into a clear, targeted, costed and implementable strategy and plan.

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Key issues:

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No formal economic regulation currently

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Capacity

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Understanding economic regulation for water resources

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Full value chain regulation

 Conflict of interest  Independent water economic regulator?

 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;

 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

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

Water Resources Water Services

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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

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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

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

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

 Presidency working on this as requirement for all regulation  What does it mean in relation to WR regulation?

 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?

 Regulatory strategy must align with     White Paper NWRS Water Services Regulatory Strategy DEA strategy for environmental regulation

 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