Inquiry into the Mangawhai community wastewater scheme

Inquiry into the Mangawhai community wastewater sc...
01 Nov 2013

This report describes how Kaipara District Council (KDC) managed the Mangawhai community wastewater scheme between 1996 and 2012, as well as the role played by other agencies, including my Office.

The matters this report covers are long and often complex, but the overall picture is simple. I summarise it as a woeful saga. Overall, the inquiry found that:

  • KDC failed to attend to its fundamental legal and accountability obligations.
  • KDC effectively lost control of a major infrastructure project.
  • Some of the work done on behalf of the Auditor-General has fallen short of the standards I expect.


The Commissioners and staff at KDC, together with the community they serve, have to find a way forward on the challenges facing them. No inquiry by this or any other office can do that for them. What this report can do is:

  • tell the story of what happened; and
  • draw out lessons for the sector, so other communities can avoid facing similar challenges.

When KDC asked me to carry out this inquiry, it told me that it did not think it and the community could move forward effectively without an objective account of what happened. It was also clear to me that my Office could identify important lessons for the sector. These were the two public-facing purposes of our work.

However, there was a third purpose. Questions had been raised about the quality of the work done by KDC's auditors. That work is done in my name by people I appoint. The role of Auditor-General is an important and long-established constitutional safeguard. As the current holder of that office, I have an obligation to maintain the health, capability, and reputation of the organisation. If there were problems, I wanted to understand and fix them. I therefore wanted to put the spotlight on my own organisation and scrutinise the work being done in the name of the Auditor-General. I considered that I needed to do that formally and publicly.

Key Results

The consequences for the entity and the community

Although the wastewater project has provided Mangawhai with a reticulated sewerage system, the achievement of this goal has been accompanied by big financial, political, personal, and social costs. Effectively, much of the community in Mangawhai, and some of the broader Kaipara region, has lost trust in the Council. It is hard to remedy this kind of reputational damage.

In another inquiry report, we said:

There is a great deal of writing on the importance of voluntary compliance in regulatory systems. In any regulatory context, it is too hard to achieve high levels of compliance through force or coercion – effective systems depend on people choosing to participate and follow the rules. For people to want to comply, they have to trust the system and see it as providing an overall benefit. The evidence this inquiry gathered showed that many … do not have this view … at present…

In our view, the [entity] needs to maintain a clear overall focus on the need to build and maintain trust in the [entity]. To build trust, it needs to behave fairly and reasonably at all times, and make sure that this is apparent to all those interacting with it. It needs to build the values of openness, accountability, integrity, and fairness into all aspects of its work. It is important that the people the [entity] regulates, and who fund its work, are able to see and understand what it is doing and why.2

Those words apply equally to the relationship between this Council and the community it serves. Parliament has given the Council substantial powers and responsibilities – to regulate, govern, tax, and enforce. Its ability to operate effectively depends on the community's voluntary compliance with its requirements, which in turn depends on trust. The basic social contract of government breaks down when that trust disappears, as the Mangawhai rates strike has made apparent.

We encounter this situation, when a public entity appears to act without proper regard to its own legal obligations, from time to time in our work in the public sector. Many of the people we met in Mangawhai basically told that us that they would be happy to meet their legal obligations to pay rates again – once it was clear that the Council understood that it had to obey the law when it imposed those obligations on them. We emphasise to public entities that there can be significant consequences when they fail to take their legal responsibilities seriously enough.

Page last modified: 15 Mar 2018