Regulatory impact and compliance cost statement: The Waitaki Catchment - water allocation
November 2003
For the latest information on the Waitaki Catchment water allocation process, see the Waitaki catchment webpage.
Background
The Waitaki catchment (within the Canterbury Region) is important for its renewable energy resource, irrigation potential, natural and fishery values. The Waitaki River is important to Ngai Tahu and is acknowledged in the Ngai Tahu Claims Settlement Act (1998).
Statement of the nature and magnitude of the problem and the need for government action
There are 40 resource consent applications under the Resource Management Act 1991 (RMA) for use of water from the Waitaki catchment currently being processed. Environment Canterbury (the Canterbury Regional Council) is the lead agency. Otago Regional Council and Waitaki, Waimate, McKenzie and Timaru District Councils are also involved.
The current significant applications are: Meridian Energy’s Project Aqua (seeking diversion of 340 m3/second), and two irrigation proposals - Aoraki Water Trust (seeking extraction of 15 m3/s from the top of the catchment ) and Irrigation North Otago (25 m3/s from the bottom of the catchment). Another 37 other applications seek a total 4.6 m3/s, primarily for irrigation. Proposals that have not reached the stage of having applications lodged include: a group intending to seek 25 m3/s water from Lake Pukaki for irrigation and another proposal of 27.7 m3/s for irrigation in association with Project Aqua.
The resource consent processes under the RMA do not allow for the applications to be considered together, or for strategic allocations to be made between competing applications, and significant time and resources will be expended on reaching decisions on each.
The lack of a decision-making framework, for prioritising water uses, compounds the problem: Environment Canterbury does not have a regional water plan, but such plans are not mandatory under the RMA.
If the existing consent processes continue without government intervention then decisions on allocation of water use will be made in the order in which they were notified. The assessment of the applications will be based on their individual environmental effects. There is no guarantee that the national, regional or local benefits of using the water will be optimised. Although the economic value for the different uses has not been fully quantified, each would have significant economic effects: Meridian Energy’s preliminary assessment suggests potential net benefits of Project Aqua to the economy of around $600m. Irrigation also has the potential to be of “tremendous economic benefit to the region” (Submission by Irrigation North Otago Ltd August 2003).
The problem is compounded by conflicts of interest. Six local councils are involved (including two regional councils) and the district councils are both decision-makers and affected parties (as owners of infrastructure), in addition to representing their communities.
Statement of the public policy objective
The public policy objective is to create a decision-making process that results in equitable, efficient, and transparent solutions for competing water uses in the Waitaki catchment for both existing and future uses, while delivering a decision consistent with the RMA principle of promoting sustainable management.
Statement of feasible options (regulatory and/or non regulatory) that may constitute viable means for achieving the desired objectives.
Option A: status quo
- Under the RMA, applicants apply to the relevant councils for consent to use or take water and any associated land uses that require consent.
- The council makes a decision on each application in turn (first in, first considered) and assesses acceptable environment effects and effects on existing water users.
- The decision can be appealed to the Environment Court - where the matter would be considered afresh with all of the evidence as if for the first time.
In the Waitaki situation there is no planning framework that provides priorities for water use, nor can the process address the most efficient or beneficial use of water. Accordingly, it is not considered appropriate to maintain the status quo option.
Option B: Give the councils involved the ability to consider the comparative merits of the different water uses.
This option would require an amendment to the RMA to allow the councils to consider the competing water use applications together.
Characteristics of this option are:
- The legislation would put a short-term stop on the known significant applications (including Project Aqua and two known irrigation applications) to bring them all to the same stage in the consent process. These would then be considered together by the councils.
- The other 37 applications (and any others) would maintain their place in the queue and be heard under normal RMA processes.
- Decision-making would occur at the local level, probably using independent decision-makers rather than councillors. There would likely be one hearing after which the councils would make decisions on the significant consents.
- Normal rights of appeal to the Environment Court would apply.
Councils do not support this option and there are difficulties in bringing together the responsibilities of the six councils involved. The process would not give certainty to instream users (e.g. fishers, recreational users) nor to future applications for water use. This option is rejected.
Option C: Develop a water allocation framework that councils can apply to existing and future consent applications.
This option would require an amendment to the RMA. Stage one would involve setting up a statutory body to develop and confirm a water allocation framework for Waitaki water. The framework would provide an appropriate sharing of water between instream values and essential uses (public water supply, stock drinking, etc), irrigation and hydro-electricity. Under stage two, councils would hear all resource consent applications.
Stage 1: Development of a water allocation framework
- A short-term stop (by legislation) on all but minor current (40) and future applications while the allocation framework is developed.
- A statutory body set up to hear matters related to water allocation and determine the allocation framework, in consultation with applicants and interested parties.
- Councils would be involved, including use of council information and officers.
- Government would fund the statutory body, which could take a year to reach conclusions and it would also help fund participation.
- The allocation framework would be given statutory weight (for example equivalent to a regional plan) so that it can guide decisions on resource consents.
Stage 2: Councils hearing consent applications
- Councils would decide applications, consistent with the allocation framework.
- Normal rights of appeal to the Environment Court would apply to the decisions.
The councils favour this option. It addresses uncertainty with allocations and provides a forum for discussing the competing uses: irrigation, hydro and instream. It also confirms councils as the primary decision-makers and has minimal effect on RMA processes.
This option is rejected because of unavoidable time delays, and associated costs for applicants and interested parties.
Option D: A statutory body will develop an allocation framework and also make resource consent decisions on the water take and use consents for the significant applications (preferred option)
This option requires legislation to amend the RMA and would include all the features of stage one of option C. Stage two, however, has the statutory body deciding on the significant competing applications (possibly taking between one and two years in total).
Stage two: statutory body decides on significant applications:
- The statutory body would make decisions on the significant applications.
- Parties can apply for financial assistance to aid involvement.
- A proportion (as yet undecided) of the costs to government would be recovered from the applicants.
- Councils would be involved, including use of council information and officers.
- The scope of appeal hearings, on the significant resource consent decisions to the Environment Court could be limited by the legislation. (This is yet to be decided.)
Statement of the net benefit of the proposal, including the total regulatory costs (administrative, compliance, and economic costs) and benefits (including non-quantifiable benefits) of the proposal, and other feasible options.
Government
The set up and ongoing costs of the statutory body are estimated to be in the order of $2 million over two years (including the cost of providing for adequate participation of third parties).
Intervention could lead to delays in decisions on applications currently being processed and so affect the confidence that investors have in RMA processes. But, in this instance the government is being seen to be acting decisively in response to an existing problem and this should assist confidence in New Zealand and its decision-making processes.
Local government
The local councils will vary in their involvement with the consent applications, their ability to resource investigations and also in the extent to which they are affected parties (as infrastructure owners or as advocates for community well-being). For the small district councils the difficulties they would encounter dealing with extensive community interest and large numbers of submissions in deciding the significant applications could be reduced. Their potentially conflicting roles of regulator, community advocate and affected party and infrastructure owner will be more clearly separated.
Applicants
Significant applications: The time taken to make a decision on the significant applications (of which three are known) is potentially no longer than under the existing process. Environment Canterbury has estimated that it would take two years for it to process the Project Aqua consents. The time taken for any appeals to the Environment Court would be in addition to the two years estimated.
Smaller applications: A process that takes a strategic approach and considers cumulative effects of water use should lead to a positive net benefit for applicants such as reducing the present cost of ongoing uncertainty about water allocation.
All applications: Costs of delay are likely to be the biggest concern to applicants, however, the development of an allocation framework will provide more long-term certainty.
Community interests: (e.g. local business, residents, and users of the river) and the economy
There are benefits to the community of having greater involvement and participation in decisions on water use. A process that brings together all the catchment issues is beneficial because it takes a strategic rather than a piece meal approach and should result in more efficient use of water.
A process that was viewed as fair and not protracted would also be a positive outcome. This proposal will allow for discussion of both local and regional development and discussion of regional benefit as a component of national benefit.
Under the proposal the process of decision-making could be more equitable and the outcome better recognise all available information and future options for water use. This would better meet future community needs (locally, regionally and nationally).
Statement of the consultative programme undertaken
The Ministry for the Environment has consulted with officials from the Ministry of Economic Development, Department of Justice, Ministry of Agriculture and Forestry, Department of Conservation, Department of Internal Affairs, Te Puni Kokiri, Land Information New Zealand, the Treasury and the Department of the Prime Minister and Cabinet; and agree with the proposal.
Discussion has occurred with Chief Executives and Mayors and Chairs of the six local authorities, officers at Local Government New Zealand, Te Runanga o Ngai Tahu, New Zealand Fish and Game and Federated Farmers. Comment has also been sought from applicants (Meridian Energy, Aoraki Water Trust and Irrigation North Otago) and community groups (Kurow Action Liaison Committee and Waitaki First).
The councils are supportive of a process which provides the allocation framework for the Waitaki catchment. They would prefer to retain the resource consent decisions, although the smaller district councils are concerned about the scale of the Project Aqua consents. They seek a mechanism developed in partnership with them. They will be involved in the development of the water allocation framework.
The applicants for water generally see it as an opportunity to take a comprehensive view of the catchment. If the proposed intervention will assist them to compete with other applications, that is also attractive. There are, however, applicants, particularly Meridian Energy, that are very concerned about the potential for time delays. Applicants at the “front of the queue” are also wary about the implications of the intervention. The effect of any government intervention on existing rights (including for water take and use) is of concern. This will require clarification through a communications strategy.
Both applicants and community representatives emphasised that they would need assistance to effectively participate in a new process. It is proposed that the government provide some funding to help participation.
Te Runanga o Ngai Tahu seeks recognition of the importance of the catchment and would seek representation on the statutory body. They would be consulted on membership.
Business compliance cost statement
For the significant applications there could be higher costs because of needing to provide additional information on the comparative merits of the different applications. Alternatively, costs could be lower because the applicant would only have to be involved in one hearing (albeit a comprehensive and large one). ). Uncertainty, in the interim, about the details of the proposed intervention by government can lead to costs to applicants and expenses in regard to legal advice etc. But, increased certainty for water allocation in the future will reduce compliance costs.
The other businesses affected are those that are opposing one or more of the applications (for example businesses within Kurow are concerned about the impact of large scale construction work on their businesses). For these organisations the proposed legislative intervention is likely to decrease costs because of concentrating discussion in one forum.
The number of applications currently being processed is 40. The largest organisation is Meridian Energy. At the other end of the scale are a large number of farm operations seeking water rights for irrigation and other uses.
It is not possible to quantify the impact of compliance costs on businesses.
Business compliance costs will be minimised through involving affected parties (including applicants) in the design of the process. This might include practicalities of when and where hearings are held. The Ministry for the Environment will work with local councils to make businesses aware of the process and their rights, using press releases, distributing fact sheets, providing information to existing council “help desks” and using council and government web sites.
Last updated: 17 September 2007
