2. Today’s challenges

The Government’s reforms address these challenges.

Water quality is declining in some catchments across a range of indicators

Overall, New Zealand’s water quality is still good by international standards, but this varies a great deal around the country depending on local land use, climate and geology. There are increasing signs of potential risks for New Zealand’s ecosystems, for the economy, for tourism and recreation, for food gathering and mahinga kai, and for our international reputation. For instance, 44 per cent of monitored freshwater bathing sites were recently reported as ‘poor’ or ‘very poor’. It is important to recognise that sites monitored are not a representative sample and monitoring focuses on sites of concern. Between 1989 and 2007, there have been strong increasing trends in phosphorus and nitrogen, particularly in catchments predominantly in pasture. The health of lowland streams, wetlands and several lakes is under pressure from declining water quality.

Adequate knowledge and information about the state and potential degradation of freshwater resources has not been readily available, particularly to decision-makers and those using the resource. On one hand this has led to some exaggerated claims and public disputes: on the other hand, it has discouraged early action to protect water quality.

Degraded freshwater quality has negative consequences for activities downstream from the pollution source, such as food processors, aquaculture farms, and urban water supplies. Taxpayers and ratepayers bear the cost of the poor management decisions that allow degradation to happen. Approximately $500 million of government and community money is currently committed to the clean up of just eight lakes and rivers.

Figure 1 shows modelled nitrate levels in fresh water around New Zealand, based on work by the National Institute of Water and Atmospheric Research (NIWA). Nitrate is the most common form of nitrogen that is available for plant growth in water. Nitrate is highly soluble, so it is readily leached from land use that has nitrogen inputs.

Plant growth in fresh water is stimulated by the nutrients nitrogen and phosphorus. While both are essential to all life, excessive levels can stimulate excessive growth of nuisance plants and algae like periphyton and cyanobacteria. These can block waterways, interfere with fish and insect species and release toxins into the water, making it unfit for consumption or recreation. Elevated levels of nitrate are therefore likely to have adverse effects on ecosystem health. At even higher concentrations, nitrate can directly impact on freshwater life, for example, contributing to reduced growth and death of fish.

Figure 1: Modelled nitrate and surface water concentration

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This map illustrates modelled nitrate levels in fresh water around New Zealand, based on work by the National Institute of Water and Atmospheric Research.

Source: Modelled from NIWA (2010).Footnote 1

Water is over-allocated in some places

In some places, too much fresh water is allowed to be taken causing damage to the natural environment. This over-allocation also puts existing rights to take fresh water at risk, and means there is none available for new activities. This creates uncertainty about whether supplies are reliable which creates a significant barrier to investment. Over-allocation also runs the risk of expensive adjustments to try and bring freshwater quality and flows back to acceptable levels.

Even in catchments that are not yet fully allocated, there is concern that future freshwater supplies may not be reliable, especially in the context of climate uncertainties.

Figure 2 shows a NIWA model of where water might be over-allocated during the driest part of the year, if people take what has been allocated to them. The map shows a ‘worst case’ scenario by assuming all allocated water is actually taken. While this is unlikely, in reality the actual use of consented allocations is estimated to average 65 per cent of consented volume, the map shows where there is real pressure on our freshwater resources.

In figure 2, water availability is based on mean annual low flow. The map relates to consumptive takes from surface water – that is, it excludes storage, groundwater and non-consumptive takes (such as water used to generate hydro-electricity). Figure 2 captures 60 per cent of all consented consumptive allocation in New Zealand.

Figure 2: Potential allocation pressure for surface fresh water

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This map illustrates where water might be over-allocated during the driest part of the year, if people take what has been allocated to them. It shows a ‘worst case’ scenario by assuming all allocated water is actually taken.

Source: Ministry for the Environment.

Decision-making processes are litigious, resource-consuming and create uncertainty

New Zealand’s freshwater management system is characterised by decision-making processes which are often divisive, slow and resource-consuming. This happens for a number of reasons – including the design of the planning process under the RMA, the relative absence of national direction, and emerging new challenges or competition in some catchments. The system encourages confrontation, where time and resources are invested in the back-end of the decision-making process (in particular Environment Court appeals) rather than in collaborating and engaging at the front-end.

A lack of clarity and certainty in some regional plans (eg, a lack of enforceable limits) has led to issues being decided consent by consent and often re-litigated.

This creates high costs and long delays for councils and users, and uncertainty for investors. Recent freshwater plans have taken between five and 10 years to finalise. Horizons Regional Council estimates the costs of its One Plan at approximately $9.4 million, not including costs to the courts, submitters and appellants, or council costs before plan notification.

As a result of the system’s flaws and a general lack of confidence within communities, the development of new infrastructure, whether for irrigation or generating hydro-electricity, has been slow and reliant on legal action to settle disputes.

There is a lack of robust information on impacts and outcomes of management decisions

Management decisions about fresh water need to be fit for purpose. They should not constrain economic growth for insufficient environmental outcomes, nor allow environmental degradation.

However, there are concerns that some regions set freshwater objectives, rules and timelines for freshwater management without drawing on sufficiently robust information about their impact (particularly economic analysis), without being transparent about why and how decisions are made, and/or proper stakeholder engagement.

In addition, there are too few adequate mechanisms to monitor, re-assess and adjust management decisions in the light of new information.

Water is not always used efficiently or for its highest value use

Generally, decisions about allocating fresh water are made through decisions on resource consents under the RMA and often on a first-in-first-served basis, rather than considering what is best overall for the economy and/or the environment. There is no guarantee that the first application to take fresh water is going to get the best overall outcome. In general, there have been very few incentives in the system for efficient freshwater use or for rewarding innovators and the best performing freshwater users.

Furthermore, the current consenting system ‘locks-up’ water, preventing others from using it, even when it is not used by the consent holder – as much as 35 per cent of consented freshwater takes is currently unused. The system also does not allow for easy transfer of water rights between users. The result is that opportunities are being missed. In some places, businesses that want to expand may not be able to get consents to use water even though there are no guarantees that those with consents are using them efficiently.

Iwi/Māori interests and values are not always fully considered in planning and resource management decision-making

Iwi/Māori rights and interests are sometimes not addressed and provided for, or not in a consistent way. Current arrangements do not always reflect their role and status as Treaty partners.

As a result, some iwi/Māori concerns which could be addressed through a better freshwater management system are dealt with through Treaty settlements, while other iwi continue to feel excluded from management processes.

Our freshwater management system is insufficiently adaptive and dynamic

The costs and delays in writing freshwater plans and in the decision-making processes make it difficult to apply new knowledge or adapt to new risks, expectations and opportunities in a timely way. This lack of agility makes it all the more difficult to reach agreement on aspirations and actions among stakeholders and resource users.

The way fresh water is allocated is also not dynamic enough to enable users to adapt to changing circumstances. This can also lead to lost opportunities.