2017.3.31
Luke Hung
As a result of climate change and water usage demands, Taiwan has suffered from frequent droughts and has even taken water-rationing measures during the transition between winter and spring in recent years. Since 2012, the Water Resources Agency has planned not to discharge into rivers and seas the system reclaimed water from the Kaohsiung Fengshan River Wastewater Treatment Plant, the Taichung Futien Water Resources Recycling Center and the Tainan Anping Water Resources Recycling Center, which are currently in operation, as well as the Kaohsiung Linhai Wastewater Treatment Plant, the Tainan Yungkang Water Resources Recycling Center and the Taichung Fengyuan Wastewater Treatment Plant, which are currently under construction, after domestic sewage is purified. Instead, the reclaimed water will be used as industrial water supplied to neighboring areas to achieve the objective of effective utilization of water resources by utilizing each drop of water twice. On November 30, 2013, the Ministry of Economic Affairs, the Ministry of the Interior and Kaohsiung City Government executed a letter of intent on the Fengshan River Wastewater Treatment Plant. On August 17, 2016, CTCI and Continental Holdings Corp. were awarded a contract for the BOT (Build-Operate-Transfer) Project for the Encouragement of Private Participation in the Recycling and Reuse of Effluents Discharged by the Kaohsiung Fenghsan Wastewater Treatment Plant and 17-year operation concession. With respect to the Futien Water Resources Recycling Center, Taichung City Government planned to use reclaimed water to satisfy the water needs of the Taichung Harbor Industrial Park by entering into a letter of intent with the Ministry of Economic Affairs, the Ministry of the Interior and the Ministry of Transportation and Communications on March 30, 2015.
Since the competent authority for the mobilization of water resources, which involves the Water Resources Law, is the Water Resources Agency under the Ministry of Economic Affairs; the competent authority for sources of reclaimed water, which involve the Sewerage Law, is the Construction and Planning Agency under the Ministry of the Interior; and the competent authority for wastewater treatment and discharge, which involve the Water Pollution Control Law, is the Environmental Protection Administration, the development of reclaimed water will involve multiple agencies and interfaces at water supply and usage ends. Therefore, to provide more incentives for the development of reclaimed water, integrate the development and utilization of reclaimed water, and promote sustainable utilization of water resources, the Water Resources Agency started to promote the draft Reclaimed Water Resources Development Statute in 2013.
During January through June 2015, Taiwan experienced a water shortage crisis not seen for decades. Some areas even entered the third phase of water rationing, which involves rotational rationing by area or suspended water supply at fixed times in the entire areas. Finally, the Reclaimed Water Resources Development Statute (hereinafter, the “Statute”) was promulgated on December 30, 2015 to promote and regulate matters concerning the development, supply, use and administration of reclaimed water.
However, since ancillary laws were still required with respect to compulsory use of reclaimed water, operation and development of reclaimed water, self-use of reclaimed water and relevant technical issues after the Statute came into effect, competent authorities completed relevant ancillary laws during August through November 2016. Since reclaimed water resources are critical to sustainable operation in the future, it is necessary to understand the structure of the Reclaimed Water Resources Development Statute and its ancillary laws in Taiwan.
I. Competent authorities
Since wastewater and reclaimed water involve the authority and responsibility of several agencies, regulatory integration is certainly required. Article 2 of the Reclaimed Water Resources Statute provides: “The competent authorities referred to in this Statute shall be the Ministry of Economic Affairs on the central level, governments of municipalities under the direct jurisdiction of the Executive Yuan on the level of such municipality, and county (city) governments on the county (city) level.”
II. Compulsory use of a certain percentage of reclaimed water
Since tap water prices in Taiwan are always low, reclaimed water is not relied on as a major water resource under ordinary circumstances except for droughts or circumstances where large quantities of water are urgently needed. To enhance the use of reclaimed water, Article 4 of the Statute provides: “For a development organization required to submit a water usage plan, if a development act initiated or modified by it is located in an area with potential water supply shortages according to the basic plan for regional water resources administration (hereinafter, a “Potential Water Shortage Area”), a certain percentage of system reclaimed water shall be used according to the water usage plan approved by the central competent authority. For a development organization whose water usage plan has been approved, if a development act initiated or modified by it is located in a Potential Water Shortage Area and the situation concerning its actual water usage in various periods as audited shows a discrepancy with its water usage plan by a certain percentage or scale, a discrepancy analytical report shall be submitted to the central competent authority for review and its water usage plan shall be adjusted and a certain percentage of system reclaimed water shall be used according to the results of the review. Where a certain percentage of system reclaimed water shall be used pursuant to the preceding two paragraphs, if no sewerage system wastewater or effluent is involved, non-system reclaimed water or another approach shall be used in lieu thereof according to the water usage plan as approved or the review results of the discrepancy analytical report.
The scope of application, the certain percentage, the certain scale and substitutive approaches of the reclaimed water used by a development organization pursuant to the preceding three paragraphs and the rules for other matters that shall be complied shall be set by the central competent authority in consultation with relevant competent authorities for specified business.” To wit, the use of a certain percentage of reclaimed water should be compelled in areas with potential water shortages to promote the use of reclaimed water and reduce the pressure for water resources.
Pursuant to the ancillary laws, if the central competent authority believes that the available quantity of tap water supply in a target year cannot meet water demands after reviewing the status of water resources, such area shall be deemed a Potential Water Shortage Area. Currently, the development of a daily quantity of 3,000 cubic meters of water is stipulated as the threshold for the use of reclaimed water. It is stipulated that for “the new development of a daily quantity of 3,000 cubic meters of water” or for “the additional daily quantity of 3,000 cubic meters of water which is cumulatively reached by an approved development act as a result of its modification,” if this is domestic or other water usage, 10% reclaimed water shall be used; and if this is industrial water usage, 50% reclaimed water shall be used (Article 4, Paragraph 1 of the Statute and Articles 4 and 6 of the Rules for Using Reclaimed Water in Potential Water Shortage Areas).
In addition, if the actual water usage and the water usage plan fall short of the approved quantity of water usage by 70% with an average discrepancy reaching 3,000 cubic meters per day, the competent authority may also request the water using organization to adjust the originally approved water usage quantity for each year until the end of the plan or may reduce such approved quantity, or a certain percentage (which shall be lower than the percentage set forth in Article 4 of the rules) within the scope of the discrepancy may be adjusted with system reclaimed water used as substitute (Article 4, Paragraph 2 of the Statute and Article 5 of the rules) to effectively regulate the utilization of water resources.
III. Incentives for developing reclaimed water
Since the construction for the development of reclaimed water requires preliminary investment, the Statute also provides the legal basis for relevant encouragements to encourage reclaimed water operators, self-use of reclaimed water and to incentivize local governments to develop reclaimed water. The encouragements are generally summarized as follows:
(1) Free usage of wastewater or effluents from public sewerage systems:
In addition to providing additional construction, operation or other necessary costs for reclaimed water sources, the government will provide wastewater or effluents from public sewerage systems free of charge in ten years after August 16, 2016 to reclaimed water operators or as self-use water sources. It was hoped that this would serve as an additional incentive for using wastewater and effluents from sewerage systems to develop reclaimed water.
(2) For a Potential Water Shortage Area, the central competent authority for sewerage systems will approve the construction of, and construction subsidy for, public sewerage systems in such area on a prioritized basis.
Since reclaimed water is derived from public sewerage systems, the reclaimed water that can be provided will be quite limited in the absence of comprehensive sewerage development in an area where reclaimed water resources are needed. Therefore, Article 5, Paragraph 2 of the Statute, which provides: “Competent authorities in municipalities under the direct jurisdiction of the Executive Yuan or counties (cities) in Potential Water Shortage Areas shall actively pursue reclaimed water development projects or provide wastewater or effluents pursuant to the preceding paragraph and may request the central competent authority for sewerage systems to approve the development of public sewerage systems in such areas on a prioritized basis,” ensures abundant sources of reclaimed water.
This Statute further provides the legal basis for subsidizing part of the development cost of local governments by the central competent authority or competent authorities for specified business. The central competent authority and competent authorities for specified business are required to subsidize the development cost in connection with the construction of water extraction structures, water treatment facilities, water supply facilities and operation and management facilities. In case of support to the development of reclaimed water resources and in consideration of the water resource status of the area, the central competent authority and the central competent authority for sewerage systems may apply to the Executive Yuan for project subsidies, depending on the necessity of individual cases (Articles 6 of the Statute and Articles 3 and 4 of the Rules for Subsidizing the Development Cost of Reclaimed Water Development Projects of Governments of Municipalities under the Direct Jurisdiction of the Executive Yuan and of Counties and Cities by the Central Government).
IV. Safety of reclaimed water
To ensure the safety of reclaimed water and address the people’s concern about reclaimed water, the Statute and its relevant ancillary laws also set standards for the use and quality of reclaimed water to ensure the safety of reclaimed water.
(1) Usage restriction
Article 7, Paragraph 1 of the Statute specifically provides that reclaimed water shall not be provided “as water for direct consumption and for the food and pharmaceutical industries” to ensure that reclaimed water is not consumed by human bodies to avoid potential safety issues.
(2) Water quality
Considering the requirement that the quality standard for reclaimed water should be higher than that for effluents, usage perception and the health risk factor involving human body exposure, the competent authority for the Statute further prescribed the Quality Standard for Reclaimed Water and Rules for Its Usage and stipulates the tolerable value of the hydrogenion concentration, turbidity, total organic carbon and ammonia nitrogen of reclaimed water.
In addition to prohibiting reclaimed water from direct consumption and usage by the food and pharmaceutical industries, for reclaimed water used as domestic water or for secondary domestic applications such as landscaping, irrigation, cleaning, sprinkling to suppress dust, or toilet flushing, the minimum threshold for residual chlorine and the maximum tolerable threshold of the coliform group are also added on top of the above reclaimed water standard.
(3) Dual pipelines
Given that the water quality standard for reclaimed water is still different from that for general tap water, Article 4 of the Quality Standard for Reclaimed Water and Rules for Its Usage specifically provides that when reclaimed water is used for domestic applications or for other purposes, a sign shall be set up, reclaimed water pipelines shall not be connected with pipelines for potable water sources, and reclaimed water pipelines shall be purple in color with wording in white that indicates the name and direction of the fluid in order to avoid inadvertent consumption and usage.
V. Integration of development project administration and water usage
The difficulties facing the use of reclaimed water lie in the integration of water supply and usage. The Statute specifically provides that the “water supply side” shall be handled by the competent authorities of the municipalities under the direct jurisdiction of the Executive Yuan and counties (cities) for such public sewerage systems, which shall be in charge of the following matters: 1. The review, approval, revocation and modification of reclaimed water development projects and the use of wastewater or effluents. 2. The supervision and audit of the construction and operation of reclaimed water development projects. 3. The approval of water prices charged by reclaimed water operators (Article 8, Paragraph 1 of the Statute).
As for the “water usage side,” the competent authorities for specified business such as industrial zones, export processing zones, science-based industrial parks, agricultural biotechnology parks, and industrial parks will handle the following matters: 1. Integration, distribution and other relevant matters concerning water needs within the zones. 2. Review of the deployment of relevant facilities within the zones (Article 8, Paragraph 2 of the Statute).
For a reclaimed water development project drawing wastewater or effluents from a dedicated sewerage system of a specific park, since the supply side and water usage side are identical, the competent authority for such specific park will handle such matter (Article 8, Paragraph 3 of the Statute).
VI. Reclaimed water operators
The Statute and its relevant ancillary laws provide for the restrictions on the establishment of a reclaimed water operator and the required approval (Article 9 of the Statute and the Rules for Approving the Establishment of Reclaimed Water Operators and the Initiation of Reclaimed Water Projects) and regulate the organization, capital and approval procedure for reclaimed water operators as follows:
The Statute and its ancillary laws provide that a reclaimed water operator shall be a company in organization, whereas a government agency may operate as a fund. In addition, since a reclaimed water operator is an enterprise involving long-term amortization of funds and thus should have solid financial strength, it is stipulated that a reclaimed water operator structured as a company limited by shares shall have a paid-in capital of no less than NT$100 million. If it is structured as another type of company, the total capital shall not be lower than NT$100 million.
Application for reclaimed water operation requires submission of a reclaimed water construction and operation plan and company supporting documentation to the local government or the competent authority for specific industrial parks in order to apply for an establishment permit. After a public solicitation procedure (which is exempt for government procurement projects or projects involving encouragement of private participation), a construction permit and a waste or effluent usage permit are obtained. Construction may commence only after a construction permit is obtained, and application for inspection should be filed after the construction is completed. If a license, permit or approval is obtained pursuant to construction, fire-fighting or environmental laws and regulations after the inspection, the reclaimed water operator can then obtain an operating license.
VII. Reclaimed water for self-use
In addition to reclaimed water operators, the Statute also allows “obtaining a certain quantity of wastewater or effluent from a sewerage system for self-use reclaimed water” (Article 11 of the Statute and the Rules for Applying for Wastewater or Effluents from Sewerage Systems for Self-use) to expand the scope of reclaimed water development and applications.
A person seeking to obtain reclaimed water is required to submit to the competent authority in a municipality under the direct jurisdiction of the Executive Yuan or in a county (city) or the competent authority for a specific park a reclaimed water usage plan in which information such as the quantity of water to be obtained, the term of use, detailed drawings and explanation about the water extraction structure is provided in order to apply for a permit for using wastewater or effluents. After the construction of a water extraction structure is completed, the person extracting the water is required to apply to the competent authority in a municipality under the direct jurisdiction of the Executive Yuan or in a county (city) or the competent authority for a specific park for inspection, and such extraction may commence only when such inspection is passed.
However, since the use of a small quantity of water is relatively insignificant to the effective use of a sewerage system as a water source, the Statute only requires a person seeking to obtain at least 300 cubic meters of wastewater or effluents on average each day to apply. However, for persons whose extraction amount is lower than 300 cubic meters on average each day, competent authorities may still impose restrictions or require them to apply for a permit.
VIII. Administration of reclaimed water operators and extraction for self-use
To ensure that competent authorities may conduct effective administration over reclaimed water operators and extraction of reclaimed water for self-use, the Statute not only provides that the operation and self-use extraction of reclaimed water are not governed by relevant provisions on the initiation of water resources enterprises under the Water Resources Law (Article 12 of the Statute) but also stipulates matters such as the design and supervision of the water extraction structure, water treatment facilities, the water supply facilities (Article 13 of the Statute), the recordation of facility inspection records and reporting of water quantities (Article 15 of the Statute), entry of officials sent by competent authorities for inspection (Article 16 of the Statute), price calculation of reclaimed water (Article 14 of the Statute and the Standard and Calculation Formula for Prices of Reclaimed Water Charged by Reclaimed Water Operators) to regulate the structures, facilities, water quantities and charges of reclaimed water operators and in water extraction cases.
Conclusions:
In view of future climate change and water demands, the development of reclaimed water resources is an indispensable element of Taiwan’s sustainable development. It is hoped that the enactment of the Statute and its ancillary laws can secure the stable development of reclaimed water in Taiwan.