New South Wales: Water Industry Competition Act 2006 (NSW)

Water Industry Competition Act 2006 No 104 An Act to facilitate and regulate the water industry excluding certain public water utilities; to make provision for the continuity of essential services provided by the industry; to establish an access regime for significant water industry infrastructure; and for other purposes. Part 1 Preliminary 1 Name of Act This Act is the Water Industry Competition Act 2006. 2 Commencement This Act commences on a day or days to be appointed by proclamation. 2A Objects of Act The objects of this Act are— (a) to protect public health and safety and the environment in connection with the water industry, including in the longer term, and (b) to protect the interests of consumers, particularly small retail customers, in the quality, reliability and price of water and sewerage services, including in the longer term, and (c) to facilitate the efficient, reliable and sustainable provision of water and sewerage services, having regard to financial, environmental and social considerations, and (d) to promote the sustainable use of resources in connection with the water industry, and (e) to facilitate competition in the water industry with a view to encouraging innovation and improved efficiency in the industry. 3 Definitions (1) Words and expressions that are defined in the Dictionary at the end of this Act have the meanings set out in that Dictionary. (2) Notes included in this Act do not form part of this Act. 3A Meaning of "classes" of water industry infrastructure The classes of water industry infrastructure are as follows— (a) infrastructure for the purpose of the production or supply of drinking water, (b) infrastructure for the purpose of the capture and treatment of stormwater for the production, supply and use of recycled water, (c) infrastructure for the purpose of the collection and treatment of sewage for the production, supply and use of recycled water, (d) infrastructure for the purpose of the collection and further treatment of recycled water for the supply and use of the further treated recycled water, (e) infrastructure for the purpose of the collection and treatment of sewage for disposal and the disposal of the treated sewage, (f) infrastructure for another purpose prescribed by the regulations. 4 Act binds Crown This Act binds the Crown in right of New South Wales and, in so far as the legislative power of Parliament permits, the Crown in all its other capacities. Part 2 Approvals and licences for certain water industry infrastructure Division 1 Preliminary 5 Water industry infrastructure to which Part applies (1) This Part applies to the following— (a) water industry infrastructure used or to be used for providing water or sewerage services to 30 or more small retail customer premises (a category A scheme), (b) water industry infrastructure used or to be used for the production of drinking water, including a filtration, treatment or desalination facility, that has a design capacity of more than 500 kilolitres each day, together with a reticulation network connected to the infrastructure and used to convey anything to or from the infrastructure, (c) water industry infrastructure used or to be used for the treatment of sewage, stormwater or recycled water that has a design capacity of more than 750 kilolitres each day, together with a reticulation network connected to the infrastructure and used to convey anything to or from the infrastructure, (d) water industry infrastructure declared by the regulations to be water industry infrastructure to which this Part applies. (2) However, this Part does not apply to the following— (a) water industry infrastructure within the area of operations of a public water utility and operated by or on behalf of the public water utility, other than as a last resort provider, (b) water industry infrastructure excluded from the application of this Part by the regulations. (3) For the purposes of determining whether this Part applies to water industry infrastructure by operation of subsection (1)— (a) initial and planned future stages of development of the infrastructure are to be taken into account, and (b) the design capacity of the infrastructure is to be determined in accordance with guidelines issued by IPART and published in the Gazette and on IPART's website. 5A Additional objects of Part In considering whether or not an approval or licence is to be granted or varied under this Part and what conditions are to be imposed on an approval or licence, regard is to be had to the objects of this Act and the following additional objects— (a) to promote the adoption of written policies concerning the use of water resources as prescribed by the regulations, if any, (b) to mitigate the potential for adverse financial implications for small retail customers generally arising from the activities proposed to be covered by the approval or licence, (c) to promote the equitable sharing among participants in the drinking water market of the costs of water industry infrastructure that significantly contributes to water security. Division 2 Requirements for approvals and licences 6 Requirements for construction of water industry infrastructure (1) A person must not construct water industry infrastructure to which this Part applies unless the construction— (a) is authorised by a scheme approval, and (b) is carried out by or on behalf of the registered operator for the scheme. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. (2) The regulations may prescribe exceptions to this section. 6A Requirements for operation of water industry infrastructure (1) A person must not operate water industry infrastructure to which this Part applies unless— (a) the infrastructure is substantially constructed as authorised by a scheme approval, and (b) the operation is authorised by an operational approval, and (c) the person is the registered operator for the infrastructure. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. (2) This section does not apply to the operation of water industry infrastructure in the course of commissioning the infrastructure. (3) The regulations may prescribe further exceptions to this section. 6B Requirements for sale of water and sewerage services from regulated schemes (1) A person must not sell water or sewerage services provided by means of a regulated scheme, including the service of connecting premises to the water or sewerage services, unless— (a) the person is the registered retailer for the infrastructure, and (b) the sale is authorised by the person's retailer licence. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. (2) In this section, sell water or sewerage services includes charging a fee or amount to connect premises to a water or sewerage service, including charging an infrastructure charge, developer charge or administration charge related to connecting premises to a service. (3) Subsection (1) does not apply to a council. (4) This section does not apply to the sale of the service of connecting premises to the water or sewerage services by a registered operator for a scheme if— (a) the scheme is under construction, and (b) no person has been registered as the registered retailer for the scheme. (5) The regulations may prescribe further exceptions to this section. Division 3 Approvals Note— A scheme approval authorises the construction of water industry infrastructure to which this Part applies as specified in the approval. Scheme approvals are granted by IPART. An operational approval authorises the operation of water industry infrastructure to which this Part applies as specified in the approval. Operational approvals are granted by IPART. 7 Application for approval (1) An application for a scheme approval or operational approval is to be made to IPART. Note— Section 12 imposes requirements for an application and allows an application to be rejected if the requirements are not complied with. (2) An application for a scheme approval for water industry infrastructure— (a) may be made by any person, and (b) must only be made with the consent of the owner of the land on which the infrastructure, other than pipelines within the reticulation network connected to the infrastructure, is or is to be located. (3) An application for an operational approval for water industry infrastructure— (a) may be made by any person, and (b) must specify the scheme and scheme approval to which it relates. 7A Process for dealing with an application for approval (1) For all applications for an approval, IPART must invite submissions— (a) from the Department of the Public Service responsible to the Minister administering this Part, and (b) from the Department of the Public Service responsible to the Minister administering the Public Health Act 2010, and (c) as otherwise required by the regulations. (2) In addition, if the application is for a scheme approval, IPART must also invite submissions from— (a) the public, by notice published on IPART's website and otherwise as considered appropriate by IPART, and (b) the council for the local government area within which the proposed area of operations of the scheme is located or to whose infrastructure the scheme is to be connected, and (c) the Department of the Public Service responsible to the Minister administering the Environmental Planning and Assessment Act 1979, and (d) if a licence under the Protection of the Environment Operations Act 1997 may also be required—the appropriate regulatory authority under that Act, and (e) if the infrastructure is or is proposed to be within the area of operations of a public water utility—the public water utility, and (f) if an authorisation, however described, under the Water Management Act 2000 may also be required—the Department of the Public Service responsible to the Minister administering that Act, Chapter 3. (3) An invitation to make submissions on an application must— (a) allow at least 28 days for submissions to be made, and (b) be accompanied by a copy of the application, other than material that IPART considers to be confidential, or set out how a copy of the application may be obtained. (4) IPART must not accept a variation of an application after an invitation to make submissions has been given unless satisfied that— (a) the application as varied will be substantially the same as the original application, and (b) no prejudice will be caused to a person who made a submission concerning the original application. (5) If a variation is not accepted, the applicant may withdraw the application and make a new application. 7B Determining an application for approval (1) IPART is to determine an application for an approval by granting the approval, either as applied for or with modifications IPART considers appropriate, or by refusing to grant the approval. (2) If IPART proposes to refuse to grant an approval or to grant an approval with modifications, IPART must— (a) give written notice of the proposed refusal or modifications to the applicant specifying the reasons for it, and (b) allow the applicant at least 14 days within which to make submissions to IPART about the proposed refusal or modifications. (3) On determining an application for an approval, IPART must ensure notice of the determination is given to the applicant and published on IPART's website. 7C Grant of scheme approval (1) A scheme approval must not be granted unless IPART is satisfied as to each of the following— (a) the infrastructure will, if constructed as authorised by the approval, be fit for purpose and capable of operating— (i) safely and reliably, and (ii) in a way consistent with the national safety guidelines for the control of public health risks, and (iii) in a way that does not present a significant risk of harm to the environment, (b) the applicant has established it is highly likely the proposed scheme will become financially viable to operate within a reasonable period of time and will then remain financially viable for the life of the scheme, (c) the applicant has established, for a regulated scheme, that it is not reasonably foreseeable that the operation of the scheme will have significant adverse financial implications for small retail customers, (d) the proposed registered operator of the scheme— (i) if the applicant is the proposed registered operator, holds an appropriate operator licence, and (ii) if the applicant is not the proposed registered operator, has entered into an agreement with the applicant for the operation of the scheme, (e) the applicant has established that the proposed area of operations of the scheme is appropriate, Note— IPART may consider a proposed area of operations is not appropriate if— (a) the scheme is unlikely to be capable of supplying water supply or sewerage services to all premises within the proposed area of operations within a reasonable period, or (b) the proposed area of operations excludes premises within the outermost boundary of, or near, the area of operations, including, for example, by excluded enclaves or unusual boundaries, unless the exclusion is reasonable, having regard to the characteristics of the proposed scheme, the characteristics of the premises or the services already available to the premises. (f) for a scheme proposed to be constructed in stages—the applicant has established that the group of premises proposed to be serviced by each stage is reasonable having regard to the orderly and economic use and development of land in the area, (g) matters prescribed by the regulations. (2) In determining an application for a scheme approval, IPART must have regard to the following— (a) whether disciplinary action against the proposed registered operator is pending or, as a result of disciplinary action against the proposed registered operator, the proposed registered operator is prohibited from being registered as the registered operator under a further scheme approval, (b) whether, in the reasonable suspicion of IPART, a statutory default within the meaning of Division 6 has occurred within 2 years before the determination is made, and the proposed registered operator, or a related corporation of the proposed registered operator, is the alleged defaulter, (c) the proposed registered operator, or a related corporation of the proposed registered operator, has failed to provide a service, or a connection to infrastructure, after granting a certificate of compliance relating to the service or infrastructure. Note— Section 5A also requires the decision-maker to have regard to the objects of this Act and other additional objects when considering whether or not an approval or licence is to be granted or varied under this Part and what conditions are to be imposed on an approval or licence. (3) On the grant of the scheme approval, IPART must— (a) register the proposed registered operator referred to in subsection (1)(d) as the registered operator for the scheme, and (b) consider whether to make a determination under section 54 that the scheme is essential infrastructure. (4) For the purposes of this section, disciplinary action is pending from the time when notice is given to the licensee requiring the licensee to show cause why disciplinary action should not be taken against the licensee until— (a) disciplinary action is taken against the licensee, or (b) the decision is made that disciplinary action will not be taken against the licensee. 7D Grant of operational approval (1) An operational approval must not be granted unless IPART is satisfied as to each of the following— (a) the infrastructure has been substantially constructed as authorised by a scheme approval for the infrastructure, (b) the infrastructure is fit for purpose and is capable of operating— (i) safely and reliably, and (ii) in a way consistent with the national safety guidelines for the control of public health risks, and (iii) in a way that does not present a significant risk of harm to the environment, (c) there are adequate plans and systems in place to ensure the infrastructure continues to be fit for purpose and operated— (i) safely and reliably, and (ii) in a way consistent with the national safety guidelines for the control of public health risks, and (iii) in a way that does not present a significant risk of harm to the environment, (d) the infrastructure is capable of operating in compliance with this Act and the regulations, the plans and systems referred to in paragraph (c) and the conditions of the registered operator's operator licence, (e) if the infrastructure is or is likely to be essential infrastructure—a last resort provider has been designated for each essential service provider, (f) the applicant is the registered operator or has entered into an agreement with the registered operator for the operation of the infrastructure, (g) in relation to a regulated scheme, the applicant— (i) holds a retailer licence or is a council, or (ii) has entered into an agreement with a public water utility or an appropriately authorised licensed retailer for the sale of the water or sewerage services provided by the infrastructure, (h) matters prescribed by the regulations. (2) In determining an application for an operational approval, IPART must have regard to the following— (a) whether disciplinary action against the proposed registered retailer is pending or, as a result of disciplinary action against the proposed registered retailer, the proposed registered retailer is prohibited from being registered as the registered retailer under a further operational approval, (b) whether, in the reasonable suspicion of IPART, a statutory default within the meaning of Division 6 has occurred within 2 years before the determination was made, and the proposed registered retailer, or a related corporation of the proposed registered retailer, is the alleged defaulter. Note— Section 5A also requires the decision-maker to have regard to the objects of this Act and other additional objects when considering whether or not an approval or licence is to be granted or varied under this Part and what conditions are to be imposed on an approval or licence. (3) On the grant of the operational approval, IPART must— (a) unless already registered, register the person referred to in subsection (1)(f) as the registered operator for the scheme, and (b) register the person referred to in subsection (1)(g) as the registered retailer for the scheme. (4) For the purposes of this section, disciplinary action is pending from the time when notice is given to the licensee requiring the licensee to show cause why disciplinary action should not be taken against the licensee until— (a) disciplinary action is taken against the licensee, or (b) the decision is made that disciplinary action will not be taken against the licensee. 7E Grant of approval—general (1) IPART may refuse to grant an approval if not satisfied— (a) the proposed registered operator of the infrastructure has the capacity to comply with the conditions of its operator licence, having regard to all the infrastructure it operates or will operate under the licence, or (b) for a regulated scheme—the proposed licensed retailer of water or sewerage services provided by means of the scheme has the capacity to comply with conditions of its retailer licence, having regard to all the water and sewerage services it sells or will sell under its licence, or (c) about other matters IPART considers relevant, having regard to the public interest. (2) Before determining an application, IPART may require an application audit to be undertaken. 7F Approval to specify certain matters (1) A scheme approval must specify the following— (a) the area (the area of operations) within which the water industry infrastructure, including a reticulation network connected to the infrastructure, is authorised to be constructed, (b) the location that the water industry infrastructure, other than pipelines within the reticulation network connected to the infrastructure, is authorised to be constructed, (c) the class or classes of water industry infrastructure authorised by the approval, (d) the design capacity of the water industry infrastructure, as expressed in kilolitres per day, authorised by the approval, (e) the purposes for which the water industry infrastructure is intended to be operated after its construction, (f) for a scheme to be constructed in stages— (i) the water industry infrastructure authorised to be constructed in each stage, and (ii) the part of the area of operations within which the infrastructure is authorised to be constructed in each stage. (2) An operational approval must specify the following— (a) the scheme and scheme approval to which it applies, (b) the purposes for which the water industry infrastructure is authorised to be operated, (c) for a scheme that is to be constructed in stages, the stage or stages to which the operational approval applies. (3) The same land may be within the area of operations of more than one approval. 7G Conditions of approval—imposition, variation and revocation (1) The authority conferred by an approval is subject to the following— (a) conditions imposed by this Act, (b) conditions imposed by the regulations, (c) conditions imposed by IPART on the grant of an approval or subsequently under this Act. (2) IPART may, on the application of the registered operator of water industry infrastructure to which an approval applies or on its own initiative, impose further conditions on the approval or vary or revoke conditions of the approval, other than conditions imposed by this Act or the regulations. (3) If IPART proposes to impose further conditions on, or vary or revoke conditions of, an approval on its own initiative, IPART must— (a) give written notice of the proposal to the registered operator of the infrastructure concerned specifying the reasons for it, and (b) allow the registered operator at least 14 days within which to make submissions to IPART about the proposal. (4) If IPART considers it appropriate to invite submissions on a proposal or application to impose further conditions on or vary or revoke conditions of an approval because of the importance or effect of the conditions, IPART may invite submissions on the proposal or application as if it were an application for an approval. (5) Before determining an application to impose further conditions on, or vary or revoke conditions of, an approval, IPART may require an application audit to be undertaken. (6) Subject to the expression of a contrary intention, the following regulations apply to approvals whether granted before or after the regulations are made— (a) regulations imposing conditions on an approval, (b) regulations varying or revoking conditions of an approval imposed by the regulations. Note— Section 5A also requires that the decision-maker have regard to the objects of this Act and other additional objects when considering whether or not an approval is to be granted or varied under this Part and what conditions are to be imposed on an approval. 7H Conditions of scheme approval (1) Without limiting section 7G, conditions of a scheme approval imposed by the regulations or by IPART may require the following— (a) completion of the construction of the infrastructure in accordance with specified plans and specifications, (b) the giving and maintaining of security, in an amount and form determined by IPART, for compliance with the conditions of approval and the completion of the construction of the infrastructure, (c) the maintaining of insurance of a type and at a level specified in the condition, (d) the completed infrastructure to meet specified criteria for safe and reliable operation and the protection of the environment and public health, (e) the installation of individual meters for each household or business, (f) the testing, certification or auditing of the infrastructure, (g) the submission to IPART of notifications relating to the infrastructure, (h) the preparation of plans or systems for operation of the scheme. (2) A registered operator constructing water industry infrastructure to which this Part applies must— (a) comply with the conditions of the relevant scheme approval, and (b) ensure compliance with the conditions by other persons who are engaged by or act on behalf of the registered operator or for whom the registered operator is otherwise responsible in connection with the construction of the infrastructure. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. 7I Conditions of operational approval (1) Without limiting section 7G, conditions of an operational approval imposed by the regulations or by IPART may require the following— (a) the operation of the infrastructure in accordance with specified plans and systems and other requirements, (b) the infrastructure to meet specified criteria for safe and reliable operation and the protection of the environment and public health. (2) A registered operator operating water industry infrastructure to which this Part applies must— (a) comply with the conditions of the relevant operational approval and the relevant scheme approval, and (b) ensure compliance with the conditions by other persons who are engaged by or act on behalf of the registered operator or for whom the registered operator is otherwise responsible in connection with the operation of the infrastructure. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. 7J Duration of approval An approval remains in force until it is cancelled or surrendered. 7K Variation of approval (1) An application may be made to IPART for the variation of an approval. Note— Section 12 imposes requirements for an application and allows an application to be rejected if the requirements are not complied with. (2) An application for the variation of an approval may be made only by the applicant for the approval or the registered operator of the scheme. (3) An application for the variation of an approval may relate to an aspect of the approval, including a matter required to be specified under section 7F. (4) IPART must invite submissions on a proposed variation from the registered operator of the infrastructure if the registered operator is not the applicant and may invite submissions from persons IPART considers appropriate. (5) An invitation to make submissions must allow at least 14 days for submissions to be made and must be accompanied by a copy of the application or indicate how a copy of the application may be obtained. (6) IPART is to determine an application for variation by approving the variation, either as applied for or with modifications IPART considers appropriate, or by refusing to approve the variation. (7) IPART must refuse to approve a variation of an approval if an application for the approval as proposed to be varied would be required to be refused under section 7C(1)(a) or 7D(1)(a)–(d). Note— Section 5A also requires that the decision-maker have regard to the objects of this Act and other additional objects when considering whether or not an approval is to be granted or varied under this Part and what conditions are to be imposed on an approval. (8) IPART may refuse to approve a variation on 1 or more grounds on which an application for the approval as proposed to be varied would be permitted to be refused. (9) IPART is not to approve a variation of an approval if in its opinion the proposed variation is so significant as to be better dealt with by a fresh application for the approval. Note— If IPART refuses to vary an approval, a new approval can be applied for. (10) If IPART proposes to refuse to approve the variation of an approval, IPART must— (a) give written notice of the proposed refusal to the applicant and, if the registered operator was not the applicant, to the registered operator of the infrastructure, specifying the reasons for the proposed refusal, and (b) allow each person given notice of the proposed refusal at least 14 days to make submissions to IPART about the proposed refusal. (11) If IPART approves a variation of an approval— (a) IPART is to give notice of the variation to the applicant and, if the registered operator was not the applicant, to the registered operator of the infrastructure, for the variation, and (b) the varied approval replaces the original approval as from the date determined by IPART to be the registration date of the variation. (12) Before determining an application to vary an approval, IPART may require an application audit to be undertaken. (13) To avoid doubt, a variation of an approval is not required for additional pipeline reticulation within a scheme's area of operations. (14) If IPART is satisfied an approval contains an obvious error or mis-description, IPART may grant a replacement approval to correct the error or mis-description. (15) On granting a replacement approval, IPART must ensure notice of the grant of the replacement approval is given to the applicant and published on IPART's website. 7L Staged approval (1) An approval may be granted— (a) for the activity or one or more of the activities for which the approval is sought, or (b) for an activity, except for a specified part or aspect of the activity, or (c) for a specified part or aspect of an activity. (2) An approval may be granted subject to a condition that an activity or a specified part or aspect of an activity, or a thing associated with the activity or the carrying out of the activity, must be the subject of either one or both of the following— (a) a further approval, (b) a variation of an existing approval. (3) In this section, activity means— (a) in relation to a scheme approval—the construction of water industry infrastructure to which this Part applies, and (b) in relation to an operational approval—the operation of water industry infrastructure to which this Part applies. Division 4 Licences 8 Operator licence An operator licence authorises the construction and operation of water industry infrastructure of the class specified in the licence for which the licensee is the registered operator. Note— Operator licences are granted by the Minister. 8A Retailer licence A retailer licence authorises the sale of water or sewerage services provided by means of water industry infrastructure for which the licensee is the registered retailer. Note— Retailer licences are granted by the Minister. 8B Applying for a licence (1) An application for a licence is to be made to IPART and determined by the Minister. (2) On receiving an application for a licence, IPART must— (a) give a copy of the application to the Minister, and (b) invite submissions on the application from persons as required by the regulations, and (c) invite submissions on the application from the public by notice published on IPART's website and otherwise as considered appropriate by IPART. Note— Section 12 imposes requirements for an application and allows an application to be rejected if the requirements are not complied with. (3) An invitation to make submissions on an application must allow at least 28 days for submissions to be made and must be accompanied by a copy of the application, other than material IPART considers to be confidential, or set out how a copy of the application may be obtained. (4) After considering an application for a licence and the submissions on the application, IPART is to provide a report on the application to the Minister. (5) The report must include recommendations regarding the following— (a) whether or not a licence should be granted, (b) the licence conditions, if any, that should be imposed on the licence. (6) IPART is not required to notify the applicant about, or give the applicant an opportunity to make submissions about, a report or proposed report to the Minister on an application despite a requirement of the rules of procedural fairness. (7) Before providing a report on an application to the Minister, IPART may require an application audit to be undertaken. (8) The Minister must consider, but is not bound to accept, IPART's report and recommendations and may seek further advice from IPART on an application. 8C Determining an application for a licence (1) The Minister is to determine an application for a licence by granting the licence, either as applied for or with modifications the Minister considers appropriate, or by refusing to grant the licence. Note— Section 5A also requires the decision-maker to have regard to the objects of this Act and other additional objects when considering whether or not a licence is to be granted or varied under this Part and what conditions are to be imposed on a licence. (2) A licence must be granted only to a corporation or council. (3) A licence must not be granted unless the Minister is satisfied as to each of the following— (a) that the applicant is a suitable corporation to be granted the licence, (b) other matters specified by the regulations. (4) The Minister may refuse to grant the licence for another reason the Minister considers relevant, having regard to the public interest. (5) If the Minister proposes to refuse to grant a licence or to grant a licence with modifications, the Minister must— (a) give written notice of the proposed refusal or modifications to the applicant specifying the reasons for the refusal or modifications, and (b) allow the applicant at least 14 days within which to make submissions to the Minister about the proposed refusal or modifications. (6) On making a decision on an application, the Minister must ensure notice of the Minister's decision is given to the applicant and published on IPART's website. 8D Meaning of "suitable corporation" (1) A corporation is a suitable corporation to be granted a licence under this Part only if the Minister has determined that— (a) the corporation has the capacity, including technical, financial and organisational capacity, to comply with obligations under this Act and to carry out the activities to be authorised by the licence, and (b) the corporation is otherwise suitable to be granted the licence, taking into account the mandatory considerations under this section and the non-mandatory considerations under this section that the Minister thinks appropriate. (2) For the purpose of determining whether a council is a suitable corporation, the only relevant capacity for determination is technical capacity and none of the mandatory or non-mandatory considerations are to be taken into account. (3) A council is a suitable corporation if the Minister has determined that the council has the technical capacity to comply with obligations under this Act and to carry out the activities to be authorised by the licence. (4) A corporation is not a suitable corporation to be granted a licence if the corporation is a disqualified corporation. (5) The following considerations are the mandatory considerations to be taken into account in determining whether a corporation is a suitable corporation to be granted a licence— (a) whether an insolvency official has been appointed for the corporation or the whole or part of the property of the corporation, an order has been made for the winding-up of the corporation or a resolution has been passed for the winding-up of the corporation, (b) whether the corporation or a director of the corporation has committed an offence against this Act or another law of this State, the Commonwealth, another State or a Territory relating to the water industry, public health, environment protection, development control or consumer protection, (c) whether the corporation or a director of the corporation has held a statutory authorisation that has been cancelled or suspended or has been disqualified from obtaining a statutory authorisation, (d) whether a director of the corporation is of good repute and character, having particular regard to honesty and integrity, (e) whether a director of the corporation has become, within the previous 3 years, an insolvent under administration within the meaning of the Corporations Act 2001 of the Commonwealth, (f) whether a director of the corporation has been, within the previous 3 years, the director of a body corporate when an insolvency official has been appointed for the corporation or the whole or part of the property of the corporation, an order has been made for the winding-up of the corporation or a resolution has been passed for the winding-up of the corporation, (g) other matters prescribed by the regulations. (6) The following considerations are the non-mandatory considerations that may be taken into account in determining whether a corporation is a suitable corporation to be granted a licence— (a) each of the mandatory considerations for a related corporation of the corporation under consideration as if a reference in the mandatory considerations to the corporation were a reference to a related corporation of that corporation, (b) each of the mandatory considerations for a person concerned in the management of the corporation under consideration as if a reference in the mandatory considerations to a director of the corporation were a reference to a person concerned in the management of the corporation, (c) whether the corporation is a related corporation of a disqualified corporation, (d) other considerations the Minister considers relevant. (7) For the purposes of determining whether a corporation has the relevant capacity to be a suitable corporation to be granted a licence, the following must be taken into account— (a) the extent to which the corporation relies on arrangements with contractors or subcontractors, including related corporations, for the necessary capacity, (b) the suitability of the arrangements, (c) proposed licence conditions relating to the arrangements. (8) In this section, statutory authorisation means a licence, approval or other authorisation whether under the law of this State, the Commonwealth, another State or a Territory. 8E Operator licences to specify certain matters An operator licence must specify the following— (a) the activities authorised by the licence, (b) the class or classes of water industry infrastructure authorised by the licence, (c) the maximum number of schemes the licensee is authorised to construct or operate, (d) the maximum scale of the schemes the licensee is authorised to construct or operate, whether determined by reference to the number of customers, connections, volumetric limits or otherwise. 8F Retailer licences to specify certain matters A retailer licence must specify the following— (a) the activities authorised by the licence, (b) the maximum scale of the schemes for which the licensee is authorised to act as retailer, whether determined by reference to the number of customers, connections or otherwise. 8G Licence conditions—imposition, variation and revocation (1) A licence is subject to the following conditions— (a) conditions imposed by this Act, (b) conditions imposed by the regulations, (c) conditions imposed by the Minister on the grant of the licence or subsequently under this Act. Note— Section 12 imposes requirements for an application and allows an application to be rejected if the requirements are not complied with. (2) The Minister may, by written notice to a licensee, impose further conditions on, or vary or revoke conditions of, the licence, other than conditions imposed by this Act or the regulations— (a) on the application of the licensee, or (b) on the recommendation of IPART, or (c) on the Minister's own initiative. Note— Section 5A also requires the decision-maker to have regard to the objects of this Act and other additional objects when considering whether or not a licence is to be granted or varied under this Part and what conditions are to be imposed on a licence. (3) Nothing in Part 3 limits the power of the Minister to impose licence conditions. (4) If the Minister proposes to impose further conditions on, or vary or revoke conditions of, a licence on the recommendation of IPART or on the Minister's own initiative, the Minister must— (a) give written notice of the proposal to the licensee specifying the reasons for it, and (b) allow the licensee at least 14 days within which to make submissions to the Minister about the proposal. (5) If the Minister considers it is appropriate to invite submissions on a proposal or application to impose further licence conditions or vary or revoke licence conditions because of the importance or effect of the conditions, IPART must, at the request of the Minister, invite submissions on the proposal or application as if it were an application for a licence. (6) An application by a licensee to impose further licence conditions or vary or revoke licence conditions is to be made to IPART and determined by the Minister. (7) After considering an application by a licensee to impose further licence conditions or vary or revoke licence conditions, IPART is to provide a report on the application to the Minister. (8) Before providing a report to the Minister on an application by the licensee to impose further licence conditions or vary or revoke licence conditions, IPART may require an application audit to be undertaken. (9) Regulations that impose licence conditions or vary or revoke licence conditions imposed by the regulations apply, subject to the expression of a contrary intention, to licences whether granted before or after the regulations are made. 8H Operator licence conditions (1) The following conditions are conditions of an operator licence— (a) the licensee must comply with the conditions of each approval that applies to water industry infrastructure for which the licensee is the registered operator, (b) the licensee must ensure the water industry infrastructure for which the licensee is the registered operator is operated only for the purposes authorised by the relevant approval, (c) the licensee must operate water industry infrastructure for which the licensee is the registered operator— (i) safely and reliably, and (ii) in a way consistent with the national safety guidelines for the control of public health risks, and (iii) in a way that does not present an significant risk of harm to the environment, (d) the licensee must have and maintain the capacity, including technical, financial and organisational capacity, to operate all the infrastructure for which the licensee is the registered operator, (e) the licensee must give written notice to IPART of a failure by the licensee to maintain technical, financial or organisational capacity as soon as practicable after the failure occurs, (f) if the licensee proposes to cease or ceases to operate water industry infrastructure for which the licensee is the registered operator, the licensee must give written notice to IPART of that fact within the period required by the regulations, (g) the licensee must establish and maintain privacy policies and practices that lawfully enable customer information to be provided to and used by the following— (i) a last resort provider in connection with a declared failure or last resort contingency planning, (ii) another licensee who is substituted as the registered operator for the scheme. (h) if the licensee is the registered operator of a regulated scheme, but is not the registered retailer for the scheme, the licensee must— (i) ensure a water or sewerage service provided by means of the scheme is not sold except by the registered retailer for the scheme or a public water utility, and (ii) if the water or sewerage service provided by means of the scheme is sold by a registered retailer—maintain and give effect to an agreement with the registered retailer, being an agreement that complies with the requirements of the regulations, if any, for the sale by the registered retailer of the water or sewerage services, (i) if the licensee is the registered operator of a scheme, the licensee must, for essential infrastructure, take all reasonable steps to prevent circumstances arising that permit a declaration of a failure of an essential service provider under Part 5, Division 3. (2) Without limiting section 8G, conditions imposed on an operator licence by the regulations or the Minister may require the following— (a) the licensee to give and maintain security, in an amount and form determined by the Minister, for compliance with licence conditions, (b) the licensee to maintain an appropriate level of insurance, taking into account all the water industry infrastructure operated by the licensee under the licence, (c) the licensee to supply to IPART statements that detail the following— (i) the extent to which the licence, or the provisions of this Act or the regulations, have or have not been complied with, (ii) the particulars of failures to comply with the licence or provisions, (iii) the reasons for failures to comply with the licence or provisions, (iv) actions taken, or to be taken, to prevent a recurrence of the failures or to mitigate the effects of the failures. 8I Retailer licence conditions (1) The following conditions are conditions of a retailer licence— (a) if the licensee proposes to cease, or ceases, to provide retail services under the licence for a particular regulated scheme, the licensee must give written notice to IPART of that fact within the period required by the regulations, (b) the licensee must have and maintain the capacity, including financial and organisational capacity, to provide all the retail services provided by the licensed retailer under the licence, (c) the licensee must give IPART written notice of a failure by the licensee to maintain technical, financial or organisational capacity as soon as practicable after the failure occurs, (d) the licensee must establish and maintain privacy policies and practices that lawfully enable customer information to be provided to and used by the following— (i) a last resort provider in connection with a declared failure or last resort contingency planning, (ii) another licensee who is substituted as the registered retailer for the scheme. (2) Without limiting section 8G, conditions imposed on a retailer licence by the regulations or the Minister may require the following— (a) the licensee to give and maintain security, in an amount and form determined by the Minister, for compliance with licence conditions, (b) the licensee to maintain an appropriate level of insurance, taking into account all the retail services provided by the licensee under the licence, (c) the licensee to obtain the approval of the Minister or IPART before entering into an agreement with the registered operator for a regulated scheme for the sale of further water or sewerage services provided by means of the regulated scheme, (d) if the licence authorises the sale of drinking water—for the purpose of promoting the equitable sharing of the costs of State water security among public water utilities and licensed retailers of drinking water, the following— (i) the licensee to obtain a specified proportion of the water that it supplies under the authority of its licence by means of specified water industry infrastructure, (ii) the licensee to contribute to the costs of specified water industry infrastructure, whether or not it is supplied with water from that infrastructure, calculated in a way specified in the regulations or by condition and payable to a person or persons specified in the regulations or by condition, (e) the licensee to supply to IPART statements that detail the following— (i) the extent to which the licence, or the provisions of this Act or the regulations, have or have not been complied with, (ii) the particulars of failures to comply with the licence or provisions, (iii) the reasons for failures to comply with the licence or provisions, (iv) actions taken, or to be taken, to prevent a recurrence of the failures or to mitigate the effects of the failures. 8J Offence—failure to comply with licence conditions A licensee must comply with the conditions of the licence. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. 8K Composite operator and retailer licences (1) An operator licence and retailer licence may be applied for and granted together as the component licences of a composite licence. (2) An application for a composite licence is to be dealt with and determined as if it were an application for each of the component licences of the composite licence. (3) A composite licence operates as both the operator licence and retailer licence that are its component licences and each of the licences is, as a component licence, subject to the conditions to which it would be subject as a separate licence. (4) The regulations may make provision for the following— (a) the circumstances in which an operator licence and retailer licence may or must be applied for as a composite licence, (b) the splitting of a composite licence into its component licences. 8L Duration of licence (1) A licence remains in force until it is cancelled or it is surrendered by the licensee with the consent of the Minister. (2) A licence that is suspended does not authorise the following while suspended but otherwise remains in force for the purposes of this Act— (a) for an operator licence—the operation of water industry infrastructure, or (b) for a retailer licence—the sale of water or sewerage services provided by means of water industry infrastructure. 8M Variation of licence (1) An application for the variation of a licence may be made to IPART for determination by the Minister. Note— Section 12 imposes requirements for an application and allows an application to be rejected if the requirements are not complied with. (2) An application for the variation of a licence may be made only by the licensee. (3) An application for the variation of a licence can relate to an aspect of the licence, including to a matter required to be specified in sections 8E and 8F, as applicable. (4) Before determining an application to vary a licence, IPART may require an application audit to be undertaken. (5) If the Minister is satisfied that a licence contains an obvious error or mis-description, the Minister may grant a replacement licence to correct the error or mis-description. (6) On granting a replacement licence, the Minister must ensure notice of the grant of the replacement licence is given to the applicant and published on IPART's website. 8N Annual fees and returns (1) A licensee must, in each year before the date fixed for that purpose by the Minister by written notice— (a) pay to the Minister the annual licence fee determined by the Minister, and (b) lodge with IPART an annual return containing the information required by— (i) the Minister, or (ii) IPART. (2) The Minister may, by written notice, require information in an annual return be verified in a specified way. (3) IPART may, by written notice, require specified information in an annual return be verified in a specified way. (4) If a licensee fails to pay a fee or lodge a return as required, the Minister may, by written notice, require the licensee to make good the default and, in addition, pay the Minister the amount fixed by the regulations as a penalty for default. (5) A matter specified in a written notice under this section may be varied by a further written notice. 8O Surrender of licence (1) A licence may be surrendered with the consent of the Minister. (2) The Minister must consent to the surrender of a licence unless otherwise required under this section. (3) If, on application for consent to the surrender of a licence, the Minister is satisfied further steps are necessary for the protection of public health or safety, the environment or small retail customers, the Minister— (a) must not consent to the surrender of the licence, and (b) must impose further licence conditions the Minister considers appropriate for the protection of public health or safety, the environment or small retail customers, as applicable (protection conditions). (4) The Minister may consent to the surrender of the licence referred to in subsection (3) on the licensee satisfying the Minister that the protection conditions have been fulfilled or satisfactory arrangements have been made for their fulfilment. (5) If the licensee provides an essential service under the licence, the Minister must not consent to the surrender of the licence unless the Minister is satisfied satisfactory arrangements are in place for the continued provision of the service. 8P Transfer of licence A licence is not transferable. Division 5 Special provisions addressing risk to public health or safety 9 Public health and safety directions (1) A regulatory authority may, if of the reasonable opinion it is necessary to deal with a risk to public health or safety arising from the construction or operation of water industry infrastructure to which this Part applies, give a direction (public health and safety direction) to a person requiring specified action to be taken to manage, reduce or eliminate the risk. (2) A public health and safety direction may be given orally or in writing. (3) Without limiting the public health and safety directions that may be given, if in the opinion of the regulatory authority the risk is sufficiently serious to warrant it, the directions may require cessation of operation of the infrastructure. (4) Before giving a public health and safety direction, the regulatory authority must, unless the urgency of the circumstances preclude it, consult with the Minister responsible for the administration of the Public Health Act 2010, or that Minister's nominee, and SafeWork NSW. (5) If a person contravenes a public health and safety direction, the regulatory authority concerned may arrange for the required action to be taken by a person authorised by IPART to take the action. (6) A person who contravenes a public health and safety direction must pay the regulatory authority concerned an amount equal to the reasonable cost of action taken under subsection (5). (7) A person who contravenes a public health and safety direction is guilty of an offence. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. Division 6 Enforcement and cancellation of approvals and licences 10 Statutory default (1) A statutory default occurs if— (a) a person contravenes a requirement of this Act to hold a licence or obtain an approval, or (b) a licensee contravenes this Act or the regulations, including a condition of a licence or approval, or (c) a licence is improperly obtained, or (d) an event occurs or circumstances come to light that mean the licensee would not be granted the licence if an application for the licence were now to be made. (2) Action may be taken against a person under this Division for a statutory default even though the person has since ceased to hold a licence. 10A Effect of criminal proceedings (1) A regulatory authority may exercise its powers under this Division in relation to a statutory default whether or not criminal proceedings have been, or are to be, taken for the default and even though a penalty may have already been imposed for the default. (2) However, the regulatory authority must, in imposing a monetary penalty, take into account a fine that has already been imposed in criminal proceedings. 10B Compliance notice (1) If a statutory default occurs, IPART may give written notice (a compliance notice) to the alleged defaulter specifying the default and requiring the alleged defaulter to take specified action, within a period specified in the notice, to remedy or mitigate the consequences of the default or to prevent the continuance or recurrence of the default. (2) Without limiting the action that may be specified, a compliance notice may— (a) require a notice to be given to customers or to be published, or (b) require an audit and compliance program to be undertaken, or (c) require a training program to be undertaken. (3) If the alleged defaulter fails to take the specified action within the time allowed in the notice, the alleged defaulter is guilty of an offence. Maximum penalty— (a) for a corporation—18,000 penalty units, or (b) for an individual—3,500 penalty units. (4) IPART is not required to give an alleged defaulter an opportunity to make submissions on a compliance notice or proposed compliance notice before it is given despite a requirement of the rules of procedural fairness. 10C Injunctive remedies (1) If a statutory default occurs or there are reasonable grounds to suspect that a statutory default may occur or be attempted, the Supreme Court may, on application by IPART, grant an injunction to prevent the statutory default or to prevent recurrence of the statutory default. (2) The injunction may be granted on terms the Court considers appropriate. (3) An injunction may be granted under this section whether or not— (a) there has been some previous statutory default of the same or a similar nature, or (b) there is imminent danger of substantial damage to a person. (4) No undertaking as to damages can be required of IPART in proceedings under this section. 10D Disciplinary action by IPART (1) If a statutory default occurs, IPART may give written notice to the alleged defaulter specifying the default and requiring the alleged defaulter to show cause, within a period specified in the notice, why disciplinary action should not be taken against the alleged defaulter. (2) IPART must allow at least 14 days for written submissions to be made, or provide for a hearing at which oral submissions may be made, to IPART by— (a) the alleged defaulter, and (b) a related corporation or person—if an allegation in relation to the statutory default is made against— (i) the related corporation of the alleged defaulter, or (ii) a person who is a director or person concerned in the management of the alleged defaulter or the related corporation of the alleged defaulter. (3) After considering submissions made by the alleged defaulter, IPART may, by order, do 1 or more of the following (a disciplinary action)— (a) censure the alleged defaulter, (b) impose a fine on the alleged defaulter of up to— (i) for a corporation—4,500 penalty units, or (ii) for an individual—1,000 penalty units, (c) order the forfeiture to the Crown of the whole or part of security given under this Act by the alleged defaulter, (d) for an approval— (i) impose further conditions or vary conditions of the approval, or (ii) suspend the approval for a specified period, until the fulfilment of specified conditions or until further order of the authority, or (iii) with the written concurrence of the Minister—cancel the approval, (e) for a licence, with the written concurrence of the Minister— (i) impose further licence conditions or vary the licence conditions, including by imposing a condition that prohibits the licensee from providing a particular service under the licence, or (ii) suspend the licence for a specified period, until the fulfilment of specified conditions or until further order of the authority, or (iii) prohibit the licensee being registered as the registered operator under a further scheme approval for a specified period, until the fulfilment of specified conditions or until further order of the authority, or (iv) cancel the licence, (f) declare that the alleged defaulter, or a related corporation of the alleged defaulter, is a disqualified corporation for a specified period, or until the fulfilment of specified conditions or until further order of the authority, (g) declare that a person who is a director or concerned in the management of the alleged defaulter or a related corporation of the alleged defaulter is a disqualified indiv