Skip to main content.

Regulatory Impact Statement for draft National Environmental Standard on Measuring Water Takes

To accompany Cabinet paper POL (08) 16, considered by Cabinet Policy Committee on 20 February 2008.

Executive Summary

Improving the efficiency of water use is a key outcome sought by government’s Sustainable Water Programme of Action. Access to accurate information on the amount of water being taken from waterbodies is a necessary step in achieving this outcome. The current regulatory framework often results in inconsistent, inaccurate and incomplete information. Options for resolving this were evaluated and the preferred option is a national environmental standard for measuring of water takes (NES). The main impacts of the NES include improved knowledge of water resources, increases in efficiency, improved compliance monitoring and enforcement, improved confidence in water resource management and improved water use reporting, which all contribute to better freshwater management. The main costs are the capital and ongoing operating costs of the water measuring devices; reviewing, reporting and enforcement costs by councils; and implementation, development and monitoring costs for central government.

Adequacy Statement

This Regulatory Impact Analysis Unit has reviewed this Regulatory Impact Statement and considers the Regulatory Impact Statement is adequate according to the adequacy criteria.

Status Quo and Problem

Freshwater defines New Zealand’s landscape, sustains valuable ecosystems, and is a vital input for the primary sectors and electricity generation. Effective water management is important to the health, livelihood and culture of all New Zealanders. The Resource Management Act 1991 (RMA) has as its purpose “to promote the sustainable management of natural and physical resources,” including water. The RMA sets out the management framework for freshwater.

The Government’s Sustainable Water Programme of Action sets out a strategy to improve the management of freshwater, protect our freshwater resources into the future, and acknowledge the fundamental importance of water to all New Zealanders. Outcomes of the strategy include providing for growing demands on water resources and encouraging efficient water management. Accurate, complete and current knowledge of our water resources is important in achieving these outcomes, but is currently incomplete. Key to this knowledge is information on the actual amounts of water taken, rather than the on-paper amounts allowed by resource consents.

Submitters on the proposed National Environmental Standard almost all agree that better information contributes to better management and support the need for water measurement. This information is also needed to fulfil reporting expectations for member countries of the United Nations and Organisation for Economic Cooperation and Development, an expectation that we are currently failing to adequately meet in relation to reporting water use. It will assist in the national water accounts prepared by Statistics New Zealand.

None of the national policy instruments provided by the RMA are currently used to set requirements for measuring water takes, with water measuring devices currently not covered by any standards and exempt from the Weights and Measures Act 1987.

Despite the absence of specific regulations requiring the measurement of water takes, policies and rules in regional plans and conditions on resource consents granted under the RMA can require such measurement. All 16 regional councils and unitary authorities have operative or proposed regional plans addressing the taking of water. While these plans articulate objectives, policies and rules for considering and issuing resource consents to take, dam, divert or use water, only three councils have implemented universal measurement of consented water takes. This lack of universal measurement is the root cause of the problem, resulting in 66% of consented water takes nationally unmeasured, accounting for an estimated 69% of the allocated volume. It is clear that New Zealand does not have the accurate information required at the regional, catchment and individual levels to make the best resource use decisions around water and promote its sustainable management. Increased water measurement is the only mechanism to acquire this information, with government action the only way to ensure this occurs.

The current situation includes significant variation in the detail and extent to which the required accuracy, ongoing reliability and reporting standards for water measurement are prescribed. The technical requirements for water measuring devices do not need to differ from region to region. Without national consistency in the technical requirements for measurement, which is likely to come only from government, there is increased uncertainty to users and hardware suppliers.

The status quo’s two key components are

  • implementation of regional council’s current and planned future policies on water measurement, including obligations in place on consent holders, and
  • consent holders’ current and future voluntary installation of meters and measurement of their water use for their own information.

Maintaining the status quo will be simple and add no additional cost.

The status quo will see variation, and some substantial delays, in the uptake of measuring devices, and there is no guarantee that measuring devices will be required. The status quo cannot ensure uniform and accurate measurement of water use. Without such measurement, it will be difficult to understand and improve the efficiency of water use, and to realise the potential benefits of increased allocative efficiency and understanding of water resources. Even if all regions do implement full water measurement, it may take 10 to 15 years to achieve, and a further five years to realise the benefits.

There is an element of inefficiency at the national level inherent in the status quo in that many regions will have their own discussions about matters such as device accuracy and installation requirements. These types of issues are as much about what hardware can achieve, rather than catchment- or region- specific requirements. Device suppliers and installers usually work across multiple regions. The status quo would likely see varying requirements in each region.

Objectives

The overarching policy objective, as set out in the national outcomes of the Sustainable Water Programme of Action is to “provide for increasing demands on water resources and encourage efficient water management”.

The objectives for the proposal were outlined in the public discussion document and are:

  1. to ensure consistency at national, regional and catchment levels for the measuring and reporting of actual water taken;
  2. to enable water users and regulators to easily determine compliance with water take consents;
  3. to provide accurate information about actual water taken in any catchment; and
  4. to ensure the comprehensive uptake of water measuring devices in a cost effective and timely way.

Alternative Options

Legislative Change - RMA Amendment

The RMA could be amended to ensure the universal measurement of consented water use. This approach would elevate the need to measure consented water use to a special status which would be somewhat anomalous when compared to RMA requirements for measurement of any other environmental service. The same outcomes can be achieved using the regulation powers of the Resource Management Act, which include the power to make a National Environmental Standard.

While it is possible that an RMA amendment could have reduced compliance costs compared to the preferred option via a smaller administrative burden on regional government by avoiding the s. 128 consent condition review, doing so would reduce the opportunity for consent holders to question how the standard should apply to existing consents. This would reduce the opportunity for local and regional conditions to be taken into account, an important issue raised by submitters.

While an amendment could achieve the first three objectives, it is unlikely to meet the “timely” requirement in the fourth objective.

Voluntary Guidelines and Codes of Practice

The Ministry for the Environment could work alongside regional councils and user groups, offering technical assistance in drafting voluntary guidelines and codes of practice for water measuring. While this option would keep regulatory complexity to a minimum, implementation would be inconsistent throughout the country with no clear direction given to Regional Councils. It would be unlikely to meet any of the objectives, with user uptake voluntary.

An alternative National Environmental Standard

The preferred option applies to consented water takes regardless of size. Another option is a variation of the proposal that applies the same requirements but only to consents above a certain size. This approach does not cater for catchments where a collective of small takes constitutes the majority of the allocation, which makes the measurement of these takes important. In addition, the need to demonstrate compliance with resource consent conditions applies to all consents regardless of size. It is difficult to demonstrate compliance through any means other than measuring water take. This option would fail to fully achieve any of the objectives.

Preferred Option

The preferred option is a National Environmental Standard for measuring water takes (NES), ensuring that consented water takes are the subject of continuous measurement. It states requirements for installation, maintenance, data recording and data transfer to regional councils.

By concentrating on consented water takes, the NES would not apply to the following types of takes:

  • takes for an individual’s domestic purposes and for animals’ drinking water as allowed under RMA section 14(3) (b, c,) of the RMA provided there are no adverse effects on the environment;
  • takes for fire-fighting purposes as allowed under RMA section 14(3) (e);
  • permitted activity takes that are allowed for in a regional plan; and
  • individual connections to a community/urban reticulated water supply.

It is proposed that new consents be immediately subject to the NES regulation and that the measurement of existing consents be achieved within five years of gazetting the regulation. It provides a relatively simple and effective way of introducing requirements for councils to add conditions to existing and new consents to ensure the universal and uniform measurement of water use within five years.

Some smaller resource consents may be exempt from the standard. Any exemptions must be justified on the basis that there is no or little benefit to be gained from measuring the takes in terms of improving efficiency of use, understanding of the resource, providing information useful in strategic planning or implementing environmental flows and/or water levels. Discussion to finalise any exemptions will occur with a pan-regional council forum prior to finalisation of the regulation. The regulation will specify the exemptions applied in each region. The benefit-cost assessment is based on measurement of all consented takes.

The NES is within the existing RMA framework and legislation. The NES will take precedence over existing rules within regional plans and existing resource consent conditions (within five years) where it is more stringent than existing provisions. Existing rules within regional plans and existing resource consent conditions will automatically be made redundant, with no additional cost necessary as these do not need to be removed can be removed during the next regular regional plan review process. The NES allows that regional councils can impose stricter conditions when specific circumstances require more detailed information. An example is a requirement for more frequent measurement during water short times as a means to manage restrictions.

Benefits and costs of preferred option

There is almost universal agreement among stakeholders that the measurement of consented water use and resulting improved resource understanding will assist in the management of New Zealand’s freshwater resource.

A benefit- cost assessment (Harris and Skilton 2007) has shown that the main benefits The benefits associated with the proposal are to bring forward improvements in

  • the management of freshwater resources and environmental flows;
  • compliance monitoring and enforcement;
  • the ease of reporting at catchment, regional and national scale; and
  • the level of confidence in water resource management.

The standard will assist in measuring and demonstrating improved efficiency at individual, industry, regional and national levels and greater ability to assess the effects of environmental policy on the economy, and economic policy on the environment. Additionally, the risk of water resources being overallocated is likely to reduce, as are challenges to consents and consent conditions at council and Environmental Court levels It will also assist the nation in meeting its international obligations to report the status of and changes to its natural environment.

Many of the benefits are intangible but the allocative efficiency gains have been estimated. An allocative efficiency gain of 3.4% would outweigh the costs of the proposal. The gain in allocative efficiency is likely to be greater than 3.4%, with experts estimating gains of between 5 and 10% in constrained catchments in Canterbury, Otago, Tasman, Marlborough and Waikato. On the basis of 5% increase in allocative efficiency in those catchments, the present value of allocative efficiency gains are estimated to be $63.6 million for a 35 year period at a 10% discount rate.

The main costs are the capital and ongoing operating costs of the water measuring devices; reviewing, reporting and enforcement costs by councils; and implementation, development and monitoring costs for central government. The present value of the costs relative to the status quo is $43.5 million for a 35 year period, at a 10% discount rate, with 96% of the cost incurred by consent holders. These costs to consent holders include:

  • initial capital costs of, on average, $2,650 to $9,450 depending on the size of water take,
  • per annum costs of $175 for data download, processing, and provision to council for the first device and $25 per additional device, and
  • calibration costs every five years of between $350 and $2500.

Implementation and Review

Once finalised, the regulation will become effective 28 days after being gazetted; this is likely to be within six months (depending on Parliamentary Council Office priorities) of Cabinet approval of the proposal.

An implementation task force is to be formed with local government, key stakeholders and manufacturer representatives. The likely scope will include advice and planning around: key dates for monitoring the implementation process, education, publicity, industry accreditation, assessment of options for consent reviews, databases, and assessing methods to monitor accuracy over time.

Minimisation of costs, through mechanisms such as bulk purchase deals by regional councils, will be explored in discussions with regional councils, suppliers and relevant industry groups.

Risks surrounding potential lack of contractor capacity to install, repair and calibrate devices and around potential lack of complying device availability are to be dealt with through discussions with relevant industry groups and suppliers. Management of that risk will be one of the tasks of the implementation task force. The industry has been aware of this proposal since December 2006.

Guidance material will be produced, provided to all local authorities and posted on the Quality Planning website. The information will also be made available to all submitters and potentially affected parties (via industry groups).

Enforcement of the NES will be undertaken by regional councils. The implementation task force will work closely with regional councils to monitor and evaluate the NES.

Consultation

Open consultation was undertaken through a public discussion document, prepared by a technical working group which included industry, utility and local and central government representatives. The major issues which were discussed by the technical working group were included in the discussion document, and included the reasons for measuring water takes, the merits of water measurement, potential content for a standard and a discussion of costs and benefits of the proposed NES.

The discussion document was released on 1 December 2006 and submissions closed on 16 February 2007. The discussion document received 73 submissions. In addition to the discussion document, seven workshops on the proposal were held throughout the country during December 2006 and January 2007, with approximately 160 people in attendance.

Most submitters, regardless of their position on the content of the NES, supported the general aim of measuring water takes. Many acknowledged the importance of obtaining this data in order to improve the efficiency of water use. Water was recognised as a significant public resource and one that needs to be carefully managed. Only 27% of submitters opposed the need for an NES. A main reason these submitters opposed the NES is a belief it would not allow for local or regional flexibility. The issue of regional flexibility will be dealt with through the implementation group. Many of those that opposed the need for the NES supported the status quo, while no submitters supported the legislative change alternative.

This RIS was circulated with the Cabinet paper for consultation with the Ministry of Economic Development, Te Puni Kokiri, Treasury, the Department of Conservations, and the Ministry of Education. Additionally, the Ministry for Agriculture and Forestry was involved in the drafting of the discussion document. No significant concerns were raised.

Last updated: 6 January 2009