EU rules did not compel Ireland to bring in water charges - our politicians chose to do it
Published 04/08/2015 | 02:30
At the weekend, it was claimed future governments would be unable to scrap water charges without breaching an EU water directive - but this is more spin designed to force people to cough up.
In 2000, after 10 years of negotiations, the Water Framework Directive was finally agreed by EU member states. It was reported at the time that: "A compromise package on the legislation was agreed giving Ireland a derogation from a requirement to meter water. The directive allows member states to opt out of this obligation if it conflicts with national practice."
The European Commission wasn't happy about it, but the derogation was included in the text of the Directive as Article 9(4). Despite this, we are now being told the derogation is worthless and the previous government effectively rendered it null and void.
Speaking in December, Environment Minister Alan Kelly said there was no longer any way for the country to evade water charges due to "the manner in which the agreement with the troika was signed up to by the previous government.
"We do not have a derogation because we now have committed to the model that we have," Mr Kelly said, rather bluntly.
Is he right? No. According to a spokesperson for Mr Kelly's department yesterday, Article 9(4) is still in place. Ireland has just agreed not to use it any longer.
"A key aspect of the Water Framework Directive is the development of River Basin Management Plans (RBMP), which set out the manner in which the water environment will be improved to meet the Directive requirements. Article 9(2) required Member States to report in their RBMP how they propose to take steps to implement the principle of the recovery of costs of water services. In compliance with this article, Ireland confirmed the intention to charge for domestic water charges. The plans were adopted in 2010.
"This intention was recognised in the Commission's 2012 report to the European Parliament and the European Council on the implementation of the Water Framework Directive in Ireland. Any alternative proposition would need to be carefully legally considered in this context," she said.
These dates are significant because the previous government has always insisted it was forced to agree to the introduction of water charges by the troika. However, the first RBMP plan was adopted in July 2010 - four months before the memo of understanding with the troika was published.
Meanwhile, the 2012 Commission report into Ireland's implementation of the Directive notes, on page three, that the lack of domestic charges is a "major gap".
Skip forward to page 43 and the Commission states this policy, to pay for water services from central taxation, has changed.
"The Government has decided that domestic water charges will be introduced and that the charging system will be based on metered consumption. A programme of domestic metering is to commence (in) 2012. The provisions of Article 9(4) on flexibility have not been used."
So, contrary to what Mr Kelly claimed, the derogation remains in place, the previous government just failed to use it. The report also suggests the current Government's flat-rate charge will not satisfy the Commission that it is meeting its obligations under the Directive.
In response to a question from Irish MEPs in December, EU Environment Commissioner Karmenu Vella confirmed there was no specific obligation anywhere in the Directive to introduce domestic water charges. However, he said that it was the Commission's view that "adequate implementation of the principle of incentive water pricing" coupled with "the polluter-pays principle" meant "water metering seems to be a basic precondition for proper implementation of the Directive".
The irony is that having abandoned the derogation and introduced water charges, the Government will still likely be found to be in breach of the Directive - because flat charges provide no incentive for households to conserve water. Meanwhile, the devastating Eurostat report, which tore Irish Water's business model to shreds last week, repeatedly states that current charges are not "economically significant" and criticises the €100 conservation grant as a sop to placate protesters. The implication of all of this is that water charges are going to have to be increased significantly and the flat rate abandoned if the twin aims of Irish Water, compliance with the Directive and an off-balance-sheet business model, are ever to be achieved. It has been estimated that the real economic cost of supplying households with water is approximately €600 per annum.
The European Commission would like to see charges set closer to this rate, with metering then being used as an incentive for customers to reduce their consumption and lower bills.
Yesterday, Minister of State Simon Harris accused the opposition of not being honest about Irish Water, but it is his Government that is not presenting the full truth. Irish Water is unviable as a commercial semi-state utility unless its charges are dramatically increased.
And while Mr Kelly has suggested the Water Directive has tied the Government's hands, it is clear that the derogation still remains - abandoning charges simply means the Government needs to devise an alternative way of meeting its obligations.
The Commission would object, but it has been doing that since the Directive was first adopted. If an alternative is to be found, it will have to done soon.
Mr Kelly is in the final stages of preparing a second River Basin Management Plan, which will run from 2016 to 2021. If that plan makes specific promises in relation to water charges, it will be much harder for any future administration to unwind those commitments.