England and Wales
The law relating to water companies in England and Wales is contained principally in the Water Industry Acts 1991 and 1999 and the Water Act 2003. Also relevant are the Water Resources Act 1991 as amended and other national and European environmental legislation, particularly the Water Framework Directive 2000/60/EC, now being implemented.
Legislation for water in England and Wales dates from Victorian times, when Acts of Parliament were passed to give local authorities, statutory boards and companies the powers they needed to provide water and sewerage services to expanding centres of population. The scope of this legislation was increased and consolidated through both world wars but without fundamental change.
Then, in 1963, the Water Resources Act was passed. For the first time the abstraction and impounding of water resources became regulated on a regional basis.
The 1963 Act created ‘River Authorities’ with responsibility for enforcing the law relating to water resources, river pollution, land drainage, fisheries and water space recreation. This was the beginning of river basin management.
The administration of water law remained local until the Water Act 1973, which created ten regional water authorities whose areas were defined by river basins. These authorities had overall responsibility for water supply, sewage disposal and river basin management. They were, however, also required to work to some extent through the statutory water companies and the local authorities.
Privatisation of the ten water authorities’ water supply and sewerage functions came with the Water Act 1989 and with it transfer of the river functions to a newly created National Rivers Authority (NRA). The NRA was later to be subsumed within the Environment Agency (Environment Act 1995). Still, however, much of the substantive law remained unchanged.
Since 1989 water law in England and Wales has been consolidated and to some extent updated by the following Acts of Parliament:
The Water Industry Act 1991 as principally amended by the Water Industry Act 1999 and the Water Act 2003.
This deals with such matters as:
• the appointment and economic regulation of water and sewerage companies, and licensed water suppliers, by the Water Services Regulation Authority (Ofwat);
• water supply and sewage disposal powers, and duties of the companies and suppliers;
• drinking water quality obligations of water companies and licensed water suppliers, and the enforcement of those obligations by Defra and the Drinking Water Inspectorate;
• charging powers of water companies and the control of charges by Ofwat;
• protection of customers and consumers by Ofwat and the Consumer Council for Water; and
• retail and common carriage competition.
The Water Resources Act 1991 as principally amended by the Water Act 2003.
Among other things, this provides for the regulation by the Environment Agency of:
• water resource management, abstraction and impounding; and
• water quality standards and pollution control.
Water and sewerage companies have to take into account other national legislation and EC environmental directives as they relate to regulation by the Environment Agency of waste, land contamination, protected areas, air quality, flood defence, fisheries and water space amenity. The companies now also have regard to the qualitative and quantitative water standards imposed via ‘River Basin Management Plans’ under the Water Framework Directive 2000/60/EC.
Scotland
Scotland also went through the process of moving from locally administered legislation to regionalisation. However, with the Scotland Act 1998 legal responsibility for water supply and sewage disposal passed from the government and parliament in London to the Scottish Executive and the Scottish Parliament in Edinburgh.
The Scottish Parliament enacted the Water Industry (Scotland) Act 2002. This established:
• Scottish Water as the water supply and sewerage authority for the whole of Scotland. Its obligations were defined by the Water (Scotland) Act 1980 and the Sewage (Scotland) Act 1968 as amended;
• the Water Industry Commissioner, responsible to the Scottish Executive for the economic regulation of Scottish Water;
• the Drinking Water Quality Regulator for Scotland; and
• ‘Water Customer Panels’.
The Water Services etc (Scotland) Act 2005 then:
• replaced the Water Industry Commissioner with the Water Industry Commission for Scotland (WICS); and
• provided for the separation of Scottish Water’s operational and retail functions in order to open up to competition the retailing of water supply and sewage disposal services for businesses.
The Environment Act 1995 also created the Scottish Environmental Protection Agency (SEPA). Under the Water Environment and Water Services (Scotland) Act 2003, SEPA exercises similar powers to those of the Environment Agency in England and Wales.
Northern Ireland
In Northern Ireland, water supply and sewerage services were also originally provided by local authorities. However, as a result of the troubles, responsibility for such services was transferred to central government. For some years water and sewerage services were then provided by the NI Department for Regional Development under the name of Northern Ireland Water Services.
On 1 April 2007, under the Water and Sewerage Services (Northern Ireland) Order 2006, responsibility for water supply and sewerage services was transferred to a government-owned company called Northern Ireland Water.
Based on the English Water Industry Act 1991, the 2006 Order includes provisions on the following:
• the establishment of the Northern Ireland Authority for Utility Regulation, responsible for the economic regulation of utilities;
• the establishment of the NI General Consumer Council;
• power for the NI Department of Regional Development and/or the Authority to appoint water and sewerage undertakers; and
• the powers and duties of water and sewerage undertakers.
Environmental regulation is in the hands of the NI Department of the Environment, which operates through its Environment and Heritage Service. Its responsibilities are similar to those of the Environment Agency in England and Wales.
