6. Managing within quantity and quality limits

This illustration shows how councils could implement the agreed planning and management regime, including discharge limits and water take limits. It also presents the time element required to adjust from the present state to the future state.

How councils and communities manage within the limits they set to achieve their freshwater objectives is critical. Limits will help make freshwater management more results-based for both the environment and economy. Limits will also make it possible for communities to identify where there are opportunities for enhanced water use – that is, where a water body is in a state where it is sustainable to take or discharge more – or where being more efficient in using water can create more opportunities. Good management will lead to identifying and creating these opportunities, and that means communities can maximise opportunities for investment and economic growth.

Managing within limits will take place at the local level, in regions and catchments. Councils, communities and resource users will have the central role when setting freshwater objectives and limits. They will consider the range of actions and measures that are available to them to achieve those. In its third report (in 2012), the Land and Water Forum highlighted the key role of industry good management practice (GMP) schemes:

“GMP schemes are essential methods for achieving limits and freshwater objectives... [They] should be defined and adopted in all catchments.”

Central government also has a key role in providing direction, guidance and support to ensure the proper infrastructure, processes, techniques and tools are in place so councils, communities, iwi and businesses can manage their freshwater bodies effectively and efficiently. A key condition for this is to have adequate information and accounting systems in place for takes and discharges, which is not the case in all regions at the moment and should be addressed as a priority.

This chapter first discusses improvements to how we manage within quantity limits and then discusses improvements to freshwater quality. Specific reforms the Government proposes and issues needing consideration in the next steps are identified and discussed.

Managing quantity

Overall, it is important to ensure the system for managing within quantity limits maximises the value to society of the fresh water available for use, both now and in the future, while ensuring iwi/Māori rights and interests are considered.

Reforms to support managing within quantity limits have the following objectives:

• Fresh water will be allocated and used efficiently within limits.
• Fresh water will move easily to higher value uses over time.
• Competing uses for available fresh water will be dealt with effectively, transparently and equitably.
• Users will have clarity and certainty about their freshwater allowances.
• The allocation regime must be easy and cost-effective to access and manage, and able to adapt to differences between catchments and changes to limits over time.
• Any areas of over-allocation need to be identified, and a feasible and acceptable path to resolution put in place.

These objectives are consistent with the Land and Water Forum’s advice. In its third report, the Forum made specific recommendations about improving the freshwater accounting and authorisation regimes. It considered the introduction of new allocation tools and approaches and agreed that facilitating transfer and trading had the potential to play a key role in some catchments.

Over the next decade New Zealand needs to build a more effective regime for managing freshwater takes within the limits councils are required to set for water quantity. However, to build a system and have it all in place at once on a specific date is unrealistic. A complex system must be built in a step-wise fashion, beginning with the necessary foundations and building on them over time.

The reforms are therefore designed to:

• strengthen the foundations of the freshwater quantity management system:
  • immediately (over the next two years) address freshwater accounting systems, addressing management practice to improve water use efficiency and specification of water permits
  • in the next two to five years, address enforcement and compliance, and transition issues
• address longer-term issues of permit duration, alternative allocation tools, alternative mechanisms for facilitating permit transfers and trade, and tools for ensuring efficient freshwater use.

Managing quantity: Strengthening the foundations

Reform 6: Freshwater accounting systems

An accounting system identifies and records all water takes. As demand and scarcity increase, it is vital to account for all different types of freshwater takes (both those that do and do not require water permits) to allow for the best decisions to be made about how fresh water is used.

Freshwater accounting will help councils identify areas where over-allocation needs to be managed and help provide users with clarity and certainty about their freshwater allowances.

The National Policy Statement for Freshwater Management 2011 will be amended to make it clear that councils are required to set allocation limits covering all takes, which will identify the amount of water available for allocation. The Government will provide guidance to councils on how to do this.

During 2013–2014 the Government will develop a freshwater accounting system that:

• requires all types of freshwater takes to be included, such as consented, permitted, domestic and stock water takes
• provides guidance on how unmeasured takes will be estimated and included in the system
• provides guidance on when the impact of changes in land use must be estimated and accounted for, eg, in catchments close to full allocation changing to some types of land use may have an impact on the fresh water available to existing users.

These would not require any additional measuring beyond that required by the National Environmental Standard on water measuring.

Some regional councils are already doing good work in this area. This reform builds on this and will develop best practice guidelines in consultation with councils. If necessary, in the longer term, the Government may develop standard approaches and require councils to use them.

It will be necessary to amend the Resource Management Act (RMA) to ensure councils have the powers to obtain relevant information. In addition, the RMA will be amended to ensure the Government can require councils to collect data from all water users, share data with central government, use any standard accounting system developed, and adopt defined methods for estimating water takes.

Requiring councils to include all types of take will impose some additional costs to develop the systems, collect information, estimate takes that are not measured and develop models. These costs can be minimised by ensuring that requirements imposed on councils reflect the level of freshwater scarcity in different catchments. For example, where a catchment is close to being fully allocated, councils need to have much more accurate information, which is more expensive. Costs might also be reduced for councils if a standard approach is developed to estimate the takes that are not measured.

There may also be small costs for freshwater users who have to provide additional information to councils.

Reform 7: Improving the efficiency of water use

Many tools that are likely to have the most impact on improving the (technical) efficiency of water use, such as tradability, will be addressed in the longer-term measures. However, there are actions that can be taken immediately to help encourage people to use their fresh water more efficiently.

Many water users already have information on or have adopted good management practices that enhance freshwater use efficiency. The work done by Irrigation New Zealand on improving water efficiency through an accreditation programme is one example. Many local councils have guidance on reducing water usage in urban areas. However, it would be useful to have sector-specific information on what these are, how effective they are in different circumstances, how much they cost, and how much freshwater use could be reduced.

Information needs to be compiled into ‘toolkits’ that are user-friendly, readily available and sector-specific. They can be made accessible through a centralised database or portal, and through sector organisations’ existing networks. Sector organisations could also provide follow-up advice to their members.

Toolkits will help improve the efficiency of freshwater use in a number of ways:

• Resource users can use the toolkits to identify the least-cost ways to use their fresh water more efficiently. For example, farmers could use them to help decide whether to invest in a particular type of irrigation system.
• Sectors may select particular good management practices (GMPs) for industry or irrigation scheme self-regulation. For example, the North Otago Irrigation Company requires its members to have environmental farm plans.
• GMPs that prove to be widely applicable and cost-effective at improving the efficiency of water use could be included in regional council rules, or potentially in central government regulation.

These toolkits need to be consistent in quality, fit for purpose across a range of users and delivered in a timely way. To achieve this, over the next two years, central government will work with priority sectors and key stakeholders (including research agencies) to identify any gaps in the information available on good management practice, and develop and roll out sector specific toolkits where necessary.

The toolkits will cover good management practices for both efficient use and freshwater quality, as the two are closely related. For example, applying the right amount of irrigation water so that none is lost from the soil profile reduces both wastage of water and nutrient leaching.

The National Policy Statement for Freshwater Management 2011 (objective B3 and policy B4) requires councils to identify methods in regional plans to encourage the efficient use of fresh water. The Government will work with councils to develop best practice guidance on how to implement these provisions.

Reform 8: Specification of permits

a. Specifying water permits

Freshwater permits set out what the permit holder is allowed to do, including how much fresh water can be taken and what conditions apply. At present, councils can specify water permits in different ways, such as using different types of measurement to say what fresh water can
be taken.

For accounting to work well and be cost effective, freshwater permits need to be specified in a consistent way both within and across regions. The permits also need to be specified in a way that allows enough flexibility for councils to respond to changes in the amount of water available.

The Government will provide best practice guidance on specifying permits, that may include a standard template for councils to use. There are other aspects of specifying permits that will be addressed in the longer-term measures. Any changes to how permits are specified will not change what is allowed under existing permits.

b. Ensuring permit durations are not unnecessarily short

Some freshwater permits are issued for short terms, such as five years, which reduces the incentives for freshwater users to invest – for example, in more efficient systems. This may be because councils are using permit duration as a way of managing risk and uncertainty: when a council thinks a catchment is close to fully allocated, it may issue short-term permits to manage any risk of over-allocation.

The water reform package as a whole provides councils with alternative ways to deal with such risks, reducing the case for short permits. However, if there is not a reduction in the number of unnecessarily short permits as other management tools are introduced the Government will consider whether further action is needed.

Managing quantity: Building on the foundations

There are a number of elements that were seriously considered by the Land and Water Forum. These are under active consideration and will continue to be so over the next 5-10 years.

In this section, for all the elements discussed, options will be investigated and changes implemented over the next 2-4 years. There will be future consultation on the details of any proposed changes.

Dealing with over-allocation

a. Addressing over-allocation of fresh water

Where a limit has been set and a catchment is over-allocated (that is, the amount of fresh water currently being taken exceeds the limit), councils need to be able to bring fresh water use within the limit. This will take time and involve costs. A number of things can be done to manage costs and ensure a smooth transition.

There are a number of ways use can be brought within a limit, such as:

• seeking voluntary reductions
• reviewing water permits – for example, where not all of the fresh water a permit allows to be taken is being used, permits could be reduced to a level closer to the actual level being used
• reducing all permits by the same amount (for example, by a certain percentage) or on a pro rata basis
• buying back freshwater permits
• improving efficiency of use across all users could reduce the amount of fresh water that needs to be recovered
• recovering a proportion of any fresh water transferred.

b. Considering restricting permit transfer in over-allocated catchments

There is evidence that in many regions a significant amount of fresh water covered by permits is not being used. This means that there is a difference between actual over-allocation (the amount of fresh water that is actually used beyond the limit) and over-allocation on paper (where the amounts allowed in permits breaches the limit but is not actually taken).

In regions where there is only paper over-allocation, there is a risk that allowing transfers would lead to actual over-allocation.

To support councils in managing this risk, the Government may:

• provide councils with guidance on making decisions on transfers in over-allocated catchments
• require transfer to be subject to conditions – for example, there being a plan in place for dealing with over-allocation and managing the risks of increasing actual over-allocation associated with transfer
• require councils to address over-allocation before approving transfers. This would mean prohibiting transfers in over-allocated catchments, and potentially in catchments where over-allocation is suspected but has not been confirmed.

Dealing with unauthorised takes

Some takes are not formally authorised through permits, regional plans or the RMA. These unauthorised takes have the same impacts – for example, on over-allocation – as other takes that are authorised and therefore monitored. Any system for managing within freshwater quantity limits needs to address these takes in some way.

Increasing monitoring and enforcement to prevent these types of take is one option for addressing them. But this does not provide any incentive for unauthorised freshwater users to come forward and be part of the new system. It also risks cutting off supply to people who, for one reason or another, genuinely believe they are entitled to use the fresh water.

An alternative is for the Government or councils to establish a process that encourages people to come forward and get the appropriate authorisation, such as a permit. Options include providing:

• information, so people can identify when they fall into this category
• an amnesty for coming forward
• a simplified process for applying for a water permit.

Managing takes that do not require water permits

As mentioned above, not all types of take need resource consent. Councils can include provisions in their regional plans that allow people to use fresh water without a permit
(a ‘permitted take’) under certain circumstances. For example, if they take less than a
specified amount.

There is also provision in the RMA (section 14(3)(b)) for people to take fresh water for domestic use, or for drinking water for their animals, including stock. The only restriction is that taking the water does not, or is unlikely to have, an adverse impact on the environment.

In some regions, these two types of take can be as high, or higher, than the consented takes. For councils to be able to manage freshwater take within the limits they set, they may need to be able to restrict the amount of these takes that occur.

The options for addressing this issue include:

• requiring councils to have rules in their plans for managing all types of take during droughts
• imposing water conservation measures
• more stringent controls on activities (eg, subdivision, some types of land-use change) that increase demand for these types of take. This may involve requiring water permits for activities that do not currently require them in some places where demand is high (eg, taking water for stock or domestic use)
• amending section 14(3)(b) of the RMA to require councils to manage these takes through rules in their regional plans, and/or allowing councils to set a limit on the amount of fresh water that can be taken for these uses in certain circumstances. For example, if a catchment is over-allocated.

Any changes would have to take into account other important considerations, such as the need to provide water for human and animal health.

Compliance and enforcement

While improved accounting will increase the information available on freshwater take and use, it will not ensure that all takes are within the rules.

There has been some criticism of inadequate compliance and enforcement, and inconsistency between regions. The Land and Water Forum recommended that the Government enhance its auditing programme for monitoring and reporting against council performance, including councils’ compliance role.

The proposed accounting (and existing water metering) requirements is expected to make it easier for councils to monitor compliance with water permits and, potentially, with rules for other types of freshwater takes.

A number of opportunities exist to improve current practices including:

• the Government providing advice on best practice
• requiring councils to develop monitoring and compliance plans and report on progress against those plans
• requiring regular audits by an independent agency of councils’ effectiveness in enforcing compliance with the freshwater management system
• establishing an independent body to investigate concerns about councils’ performance in their compliance and enforcement responsibilities.

There would be additional costs to councils to develop plans, and potentially for increased enforcement activity, if necessary. There would be additional costs to both the Government and councils if regular audits were done or a new body established.

Managing quantity: Longer-term issues

A number of areas, if addressed, could bring significant economic benefits, and also ensure an efficient and effective regime for managing within quantity limits. However, they are complex and their successful implementation requires the foundation measures to be in place.

Providing a longer timeframe allows us to learn more about the potential economic and other impacts of different approaches. It also allows the Government to work alongside councils to develop proposals in each area and ensure we have a fit-for-purpose system that does not impose unnecessary costs on councils or freshwater users.

Options for addressing the following issues need to be investigated and any changes implemented over the next 5-10 years. There will be future consultation on the details of proposals to address these issues.

a. Permit duration

The RMA currently limits all resource consents to a maximum of 35 years. Work in this area will look at issues, such as whether permits for large-scale long-term infrastructure should be given for more than 35 years and whether there should be a minimum term for water permits – for example, 20 years.

b. Alternative tools for initial allocation

Councils need to be able to make decisions on freshwater permit applications in a way that reflects the level of freshwater scarcity in their region. In some cases this means making sure they can use approaches other than first-in-first-served.

The alternatives to be considered include:

• Administrative-based approaches – where decisions about who gets fresh water and how much they get are made by councils. Examples include: ballot, where permits are allocated to applicants in the order they are drawn from a ballot; and merit based, where a set of criteria are used to assess competing applications for permits.
• Market-based approaches – where applicants for fresh water compete with each other to purchase an initial allocation from the councils. Examples include: direct sale, where applicants purchase permits at a set price; tender, where applicants offer to buy water permits and the offers are considered against a set of criteria – such as the applicant’s ability to meet efficiency standards; and auction, where applicants publicly bid against one another to determine who is willing to pay the highest price for a permit.

c. Allocating permits on expiry

Currently there is no automatic right of permit renewal. However, existing permit holders are given priority over any new applications in that an existing permit holder’s application for a further permit is considered first. In making its decision, the council must have regard to the value of the existing permit holder’s investment, and the RMA criteria relating to efficiency, use of good industry practice and compliance.

Options that will be assessed for allocating expired permits include: rollover to the incumbent, rollover to the incumbent subject to conditions, first-in-first-served, merit based, tender, and auction. The Government will also look at whether or not all permits in a catchment should expire at the same time.

The work will also consider what other issues should be taken into account in making decisions. For example, should priority be given to fresh water going to its highest value use, or to protecting existing investment or to providing for new users.

d. Facilitating permit transfer and trade

The RMA currently provides for the transfer of freshwater permits when the ownership of land changes. It is also allowed if both sites are in the same catchment and it is either allowed under a plan, or the council has approved the transfer, which effectively involves going through the full consent process.

The Government will look at options for making transfer and trades of fresh water simpler and less costly. For example, through unbundling permits for freshwater take and use, reducing transaction costs and developing standard trading platforms.

e. Further incentives for efficient freshwater use

There are currently few incentives for people to use fresh water in the most efficient way. The Government will look at ways to provide incentives for efficient freshwater use, including pricing tools, national efficiency standards, increased water metering, and ensuring applicants only apply for the fresh water they need for the activity they want to do.

Benefits from these reforms

In the short term, having appropriate accounting systems will improve the reliability of freshwater supply and reduce over-allocation of permits to take fresh water. This will improve certainty and reduce conflict and legal disputes. Monitoring and reporting will also be easier.

The reforms will reduce the need for water permit holders to protect their security of supply by challenging new applications. They are also likely to reduce the risk of applicants having permits declined because there is insufficient fresh water available. Changes to permit specifications (how the amount of fresh water allowed to be taken is defined and what conditions are on the permit) and the duration of water permits will provide users with certainty and confidence to invest and innovate.

Transferring freshwater permits from one permit holder to another is allowed for under the RMA, but it could be easier and less expensive. Reforms may reduce transaction costs for transferring permits.

In the long term, improving the freshwater management system for freshwater quantity will provide significant economic benefits. There is the potential to increase the overall efficiency of New Zealand’s freshwater use and to free-up unused fresh water, which could generate significant economic benefits in freshwater-constrained catchments.

The reforms need to be developed into detailed policy so they can be implemented. Flexibility will be built in to reflect the different levels of freshwater scarcity in different catchments.

Challenges of these reforms

An improved system for managing water quantity will require councils and resource users to adjust and adapt to new ways of working.

Councils will be required to set allocation limits and develop accounting systems identifying all water takes. In many catchments there is a lack of information on the amount of water taken. This means councils will need to make decisions on the basis of limited and, in some cases, imprecise information. However, the reforms should ensure that the quality and quantity of data available to councils will improve over time, which will improve the quality of decision-making.

Over time councils will have to develop new approaches to address over-allocation of water and to improve the efficient use of water in their regions. In addition, councils may have to change the way they allocate water consents, both at the outset and upon expiry, and the way consents are transferred between users once they have been allocated.

Resource users will also have to adjust to new responsibilities and requirements. They may be required to measure and report their water use to councils. In catchments where water is over allocated, water users may have to reduce their use over time or face new incentives to use water more efficiently. Users may also have to adapt to changes in the way councils allocate water consents or the way consents are transferred between users.

Reform phasing

Managing quality

The reality of freshwater quality in New Zealand today is the result of a long history of how our land and freshwater bodies have been used and managed. To date, management approaches have not been sufficiently effective to meet community expectations and environmental needs in many catchments.

This is in part because managing freshwater quality is complex. There are multiple contaminants, multiple contaminating sources, limited information on many freshwater bodies and catchments, and getting that information is costly. It is hard to measure or estimate the levels of contaminants discharged from land, and there are potential costs for stakeholders and/or ratepayers to reduce discharge levels. Added to this is the time lag between any changes in land use or management practice and how long it takes to show up in the freshwater body. In some catchments it will take many years before improvements are seen in water quality, even if changes are made to management practices right away.

It is also important to ensure the system for managing within quality limits maximises the value to society of fresh water’s assimilative capacity, that is, its ability to absorb what is discharged into it, without breaching quality limits, today or in the future, while ensuring iwi/Māori rights and interests are considered.

In its October 2012 report, the Land and Water Forum developed a framework for freshwater quality management approaches at catchment level. This built on freshwater objectives and limits set in regional plans. The framework includes a set of principles and a toolbox with regulatory, non-regulatory, mitigation and economic instruments.

As already discussed, the Land and Water Forum emphasised the key role of good management practices (GMPs) to achieve freshwater objectives in a way that is helpful to economic activities. The Forum agreed that which tools are appropriate should be decided at the local level, but that central government has a key role in providing guidance on using them, and in developing the knowledge and expertise base for effective freshwater quality management.

Reforms to support managing within quality limits have the following objectives:

• Land and freshwater decision-making and implementation by councils and land users will be effective, well-informed (drawing on readily understood good quality scientific and economic data), well-integrated and adaptive.
• Stakeholders need to have good levels of buy-in to their catchment’s freshwater quality objectives and approaches to managing to them.
• Stakeholders have clarity and certainty on what they are entitled to, and their responsibilities and roles in freshwater quality management.
• Growth and development in catchments will occur through efficient resource use, and through innovative approaches to managing freshwater quality within limits, at individual, business and catchment levels.
• Techniques and approaches to reduce the environmental impact of businesses while maintaining and enhancing profitability will be developed, shared and continually improved through partnerships between industries, scientific institutions, councils and the Government.
• Implementation and monitoring will be efficient and cost-effective for stakeholders and those enforcing the regime.
• Transition/adjustment methods must minimise economic and social costs, and be equitable.

Specifically, the reforms are designed to:

• Strengthen the freshwater quality management system in the following key areas:
  • the science, research, knowledge and information needed for water quality management
  • stronger central government guidance or direction to address issues related to accounting for all sources of contaminants and freshwater quality management planning
  • sector-specific good management practice toolkits.
• Consider longer-term measures that will encourage more efficient resource use and enable economic growth while achieving freshwater quality targets and objectives.

A staged approach will ensure the right foundational measures are successfully implemented before building on them with further measures in the longer term.

Managing quality: Strengthening the foundations

Reform 9: Science, research, knowledge and information

Good information is necessary if the right decisions are to be made on freshwater quality management, whether by central government, councils or resource users. New research and information needs are emerging as limits are set. Initially there will be a review of the research and information system, including the Water Research Strategy^{ootnote 2} . This Strategy helps determine where central government invests its research funding. A refocused Water Research Strategy will ensure that money continues to be spent on the most important research needs. It is crucial to continue to develop, improve and share techniques and practices that enhance environmental outcomes and business profitability.

The review will focus on:

• priorities for scientific research including but not limited to the role of mātauranga Māori, and the computer modelling tools used for freshwater quality management
• improving the availability of the wider information needed for decision-making, including land use and economic data
• improving coordination across research providers
• improving how information, efficient techniques and research findings are communicated to end users.

Reform 10: Stronger government leadership to ensure effective water quality management

Regional councils and unitary authorities are taking various approaches to managing within freshwater quality limits. Central government will identify examples of good practice amongst New Zealand councils and overseas, and use this to provide good practice guidance to councils on freshwater management – for example through the Quality Planning website. Where it is important that councils take a consistent approach, the Government will regulate for good practice.

Regional councils and unitary authorities will be required or encouraged to adopt good practice in the following areas:

1. Identifying and accounting for all sources of the contaminants to be managed: The best methods and models will be identified to work out and quantify where the problems are coming from in a catchment, including native bush, forests, scrub, urban areas (eg, stormwater or sewage), factories and farm sources. This will mean actions to improve water quality can be adequately targeted. This is an area where consistent practice across regional councils may be needed, to ensure water quality management decisions are both fair and efficient.
2. Monitoring and reporting: The best methods will be identified for keeping track of changes in the levels of discharges, and for reporting back regularly to individuals, catchment groups, and regional and central government. This will reinforce good progress, or be used to initiate change where necessary.
3. Regional council and unitary authority approaches: The best approaches and strategies to match council actions to the unique circumstances and critical contaminants of each catchment would be identified – these may include regional plans, consent requirements, and community education. This action will include identifying the best ways to support communities in catchments where discharges must be reduced.
4. The use of computer models: The reforms will identify how models can be best used – for example, for making informed and transparent decisions on how to manage within quality limits, or to help monitor discharge levels from individual sites where this is necessary. Further detail is in the information box below.

Reform 11: Development of good management practice toolkits

Developing sector-based user-friendly good management practice toolkits is discussed earlier in this paper. These toolkits will include both quantity and quality aspects, and cover the range of practical things that a resource user can do to reduce their discharges of contaminants (such as techniques, investments, improved practices), how much they cost, and how much they reduce discharges. For example, for dairy farming, practices could include upgrading effluent treatment facilities, changing wintering practices, and completing stream fencing. For stormwater management they could include treatment ponds, grass filter strips, and improved roading design.

As for managing within quantity limits, good management toolkits can help resource users, industries and councils:

• Resource users will be able to use the toolkits to identify least-cost ways to meet their freshwater quality responsibilities. For example, farmers could use them to help decide how to comply with resource consent requirements or permitted activity conditions that require diffuse discharges to be kept below a particular threshold.
• Sectors may select particular good management practices (GMPs) for industry self-regulation. For example, riparian fencing is a condition of supply to Fonterra, and some industries have accredited environmental management systems in place that include water quality management.
• GMPs that prove to be widely applicable and cost-effective at reducing discharges may be included in regional council and unitary authority rules, or potentially in central government regulation.

Managing quality: Ongoing improvements

Once the foundations for good freshwater quality management are in place, they will need to be monitored, assessed and improved. Further measures will be considered, informed by robust information, and an evaluation of the impacts of different approaches, including economic impacts. For example, stronger support measures or regulation may be needed to achieve sufficient uptake of good practice by councils, unitary authorities or resource users. In addition, as freshwater quality limits are progressively set in place, there will be a need to ensure economic growth can continue while freshwater quality targets or objectives are achieved. Māori rights and interests in water quality management will be addressed as an integral part of these ongoing improvements.

The reforms considered over a longer timeframe include:

1. New or improved ways to encourage more efficient resource use so that room for new development is created. For example, recognition of good management practice by permitted activity status, national standards for good management practice, and pricing tools.
2. Improved consent transfer and/or offsetting mechanisms that enable new higher-value activities to establish while maintaining or reducing catchment-wide discharges.
3. Ways to provide investment certainty for resource users – for example, the nature and duration of consents.
4. Further consideration of how to address iwi/ Māori rights and interests in this area.

It will be important to progress these areas by working alongside regional councils, unitary authorities, sector groups, and resource users to develop proposals. It is important to make sure that a future freshwater quality management system is fit for purpose and does not impose unnecessary costs or burdens on councils or resource users.

Benefits from these reforms

As a result of the foundational reforms, regional councils, unitary authorities and resource users will have the information and research findings needed for making good decisions on managing freshwater quality.

At the catchment level, sources of contaminants will be identified and quantified with sufficient precision. This will mean that regional council and unitary authority management actions can deliver the best value for money and be targeted fairly (for both point and diffuse sources and owners of both more and less developed land, eg, some Māori land). Capacity, knowledge and experience with quality management approaches and the use computer models will build up, allowing council management to be well-matched to the catchment and the contaminant, and would enable communities to adjust and adapt when discharges have to be reduced.

Resource users will be able to access the information on good management practices needed to help manage businesses, forests and farms so that water quality limits are not breached. Regional councils and unitary authorities will use good management practice information as part of their approach to managing within limits.

In the long term, improving the water quality management system will enable community-agreed aspirations for freshwater quality, including iwi aspirations, to be achieved efficiently and equitably, while also providing for economic growth. Resource users will have sufficient certainty to invest in developing their businesses. There will be opportunities for new higher returning activities to be established, even when catchments are at, or reaching limits.

Challenges of these reforms

An improved system for managing water quality will require councils, communities and resource users to adjust and adapt to new ways of working.

Councils will need to identify all sources of the contaminants to be managed. In many catchments there is a lack of information on the contaminants of concern, including where they are coming from and the quantities from each source. In the meantime, councils will need to make decisions on the basis of limited and in some cases imprecise information. This will prove challenging in setting freshwater quality objectives and limits, and deciding on the actions to address them; councils will have to take account of uncertainty and provide for adaptive management.

Councils will also have to design new approaches and rules for managing within quality limits, especially for diffuse discharges. In many cases, councils will need to use business-scale models to monitor individual nutrient discharge levels. All models have their limitations, and the approaches and rules developed by councils will need to take careful account of the capabilities and the limitations of the models used. It may be some years before systems like OVERSEER® are precise enough to be used as the basis for enforcing quantitative conditions on land use.

Resource users will also have to adjust to new responsibilities and requirements to manage discharges, including diffuse discharges. Annual reporting on discharge levels will be required in some catchments, especially those that are approaching or over the catchment quality limit. For diffuse nutrient discharges, models will be needed to estimate annual discharge levels. Over time, changes in management practices will be needed in some catchments to reduce discharges from an individual’s land or business.

Improving the availability and uptake of science and information, including good management practices and improved models, will be important to help everyone adjust to a new system and new requirements. Greater guidance and direction from the Government will support councils over the next few years and assist end users in having the right information to make decisions, particularly in adopting new technologies and practices.

Reform phasing