TWO Acts have been introduced in recent times by the federal government for it to take control of water supply and sewerage services. They are the Water Services and Industry Act 2006 (WSIA) and the Suruhanjaya Perkhidmatan Air Negara 2006 (SPAN) Acts.

Because all of us depend on water supply (and sewerage) services it is good to know how these two Acts can have great (and unwelcome) consequences on the lives of citizens as well as on the environment.

The two Acts took effect on Jan 1 last year. A water supply body may continue to provide water supply services provided it registers with SPAN within three months of the appointed date (ie Jan 1, 2008) or any extended period allowed by SPAN. It would be useful to provide here some background development to these laws.

In 2002, the federal government commissioned a feasibility study on establishing a national water commission. The study concluded that if this was attempted it would not have any legal authority as water was a state matter under the constitution.

Undeterred, the federal government then decided that the constitution had to be changed. Using its two-thirds majority, it removed water supply services from the State List and added it to the Concurrent List. This meant that water henceforth could come under the authority of both state and federal governments.

Having thus given itself constitutional power to pass laws on water, the government introduced two bills, the Water Services Industry Bill and the SPAN Bill. With a minimum of fuss, the first reading for the WSI Bill was accomplished in one day in April 2006 and the second and third readings were done in three days the following month.

The Opposition strenuously opposed these bills but having less than one-third of the seats in that Parliament it had little chance to stop the passage of these bills.

Before these laws, water supply services for all states came under a state law. The law relating to water supply services in Selangor was Selangor’s Water Supply Enactment 1997. Other states had similarly named statutes.

Each state has (and will continue to have until the transition is completed) a regulatory state authority. The state authority is the topmost authority and decision maker in this enactment.

Thus, in Selangor, the state authority gave a licence to Syabas to operate the water supply services in Selangor and Syabas is bound by Selangor’s Water Supply Enactment.

Under a state’s Water Supply Enactment, the state authority is empowered to fix and prescribe, from time to time, water charges with regard to water supply services. The state authority still has powers in regard to water pricing but only until when SPAN takes over regulatory functions of the state authority.

WSIA will override a state’s Water Supply Enactment. This is in respect of the executive authority over water supply services. After Jan 1, 2008, all water supply bodies or concessionaires must apply for a licence from SPAN to continue supplying water and, failing to do so, SPAN can terminate any existing water supply service after two years or such extended period.

The SPAN Act provides for the establishment of the Suruhanjaya Perkhidmatan Air Negara with powers to supervise and regulate water supply services and sewerage services and to enforce laws and related matters.

The two Acts give the minister (in charge of water) sweeping powers with no check-and-balance provision built in to ensure good governance. An example can be cited here. The following is extracted from Part IX of the WSIA.

(Section) 114. (1) Notwithstanding any other provisions of this Act or any other written law, the minister may, if he thinks it necessary for national interest, by order published in the Gazette, direct:

(a) the commission to assume control of the whole of the property, business and affairs of a licensee and to carry on the whole of the licensee’s business and affairs…

Thus, a minister may take control of the whole of a licensee’s business and operation on the basis of a stated threat to national interest. How would the reality of such a threat be identified to the citizenry? There will be no such need as the following sub-section makes clear:

(2) The determination of what amounts to national interest shall be made by the minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.

Just in case the absolute and unquestionable power vested with  the minister has not been made sufficiently clear yet, Part IX ends with the following section:

120. An order of the minister under this part shall be final and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.

Such excessive power vested in the minister and, by his subservient position in the cabinet, to the prime minister, places the licensee at the mercy of the ruling government regardless of the party in power. If the licensee steps on a toe intentionally or even accidentally, he may be deemed a threat to national interest and can be made to pay dearly.

For that matter, the licensee may risk losing his licence even for doing the right thing. To illustrate with an example, if Syabas together with the Selangor government embarked on implementing a Water Demand Management Plan that would eliminate the need for the Pahang-Selangor Raw Water Transfer Project, the minister may be left feeling severely embarrassed after having committed billions of ringgit to this project. He can then easily decide to revoke the licence to Syabas in the “national interest”.

Indeed, Malaysian Nature Society in partnership with stakeholders, NGOs and professionals has submitted a detailed proposal for a Water Demand Management Plan to the Selangor government.

Implementing the plan would render the Pahang-Selangor Raw Water Transfer Project unnecessary, and it will cost a mere fraction of this multi-billion ringgit project.

This simple but topical example demonstrates how the minister may get away with a colossal mistake while a licensee can be punished for doing the right thing. This is possible because there are no check-and-balance provisions to ensure good governance which is just as important for proper stewardship of our natural resources.

In the national interest, I respectfully request the minister to amend the laws by introducing into them essential check-and-balance provisions.
 

                                                                                                                                                   JC Tansen
                                                                                                                                                   Petaling Jaya

Source: The Sun – October 5, 2009