3 Property Rights Framework
Legal definitions of water property rights
Property rights can arise through law, custom/tradition and use. However the State defined and enforced property rights represent a useful starting point for an analysis of rights in water. In legal terms [This section largely summarises the property rights aspects of the Milne and Mooar (2002) report. This report should be read for more detail of water allocation and property rights.] regional councils are empowered under the RMA to grant water permits which allow the holder to take, use, dam or divert water subject to availability. Consents are not required for water takes in some limited circumstances (e.g. domestic use, stock water, fire fighting), and consents cannot be granted for in stream use.
Water permits:
- do not constitute ownership of the resource
- may be granted for up to 35 years, but if no period is specified, are granted for five years (section 123(d)) of the RMA
- may be cancelled by the Regional Council if not exercised for a continuous period of five or more years (section 126) although a different period may be specified in the consent
- may lapse if not given effect to within five years of the grant, unless the consent specifies a different period or an extension is granted (section 125)
- do not run with the land, but are personal to the consent holder (section 122)
- are transferable in some circumstances (section 136), and may be sold, gifted or 'leased'
- can be acted on by other persons with the permission of the consent holder (unless there are conditions to the contrary) (section 3A)
- do not provide ownership of the water (section 354)
- do not provide a guarantee of its availability
- do not prevent 'upstream' consents being granted which may derogate from permitted grants.
The rules under which consents operate affect the nature of the property rights. The regional council has the capacity to use:
- minimum flows
- staged flow regimes (reduction in allocation with decreasing flows)
- maximum (or sliding maximum) rate of takes
- allocatable volumes
- sharing regimes
- rostering regimes.
The council has the capacity to define these flow management tools in a plan for the resource, but these plans have not been established in all regions. Consent conditions can be reviewed under a number of circumstances. Of particular note is the introduction of a rule in a regional plan, at which time all consents may be reviewed to ensure compliance with the rule. Some consents also contain review conditions, which allow the consent to be reviewed in particular circumstances for specific purposes even in the absence of new rules in a regional plan. These are particularly common in longer term consents.
There appears to be no right of renewal of consents, and there is no discussion in the act on renewals, so in theory renewals should be treated as for new applications unless a condition of a plan says otherwise.
While the consents are not ownership, they do constitute a valuable commodity, and importantly they are granted to the individual rather than to the land. Transfer is allowed if expressly allowed for in a regional plan, and/or it requires the approval of the regional council. The RMA does not appear to exclude transfer on a partial or temporary basis, and sharing the water in a consent also appears to be allowed subject to conditions to the contrary.
The use of the water appears to be a relevant consideration in the granting of a consent, and it also appears that efficiency of use may be grounds for a review of a consent if this condition is allowed for in the plan or consent.
Custom and tradition in water rights
The role of custom and tradition has not been well explored in water rights. However it is an important factor in defining the property rights for water. The concept of customary use is enshrined in existing use rights, although these are largely extinguished [Or in the case of mining privileges will be extinguished.] in respect of water takes by the RMA. Importantly however the status of existing users is established partly by custom, since this is an aspect which is taken into account by the courts in deciding on the appropriateness of any attenuation of a property right. Coase (1960), in discussing the application by courts of the common law of tort, notes the use of concepts of what is fair and reasonable as important determinants of court judgements. Similarly Milne and Mooar (2002) note the difficulties that the courts would have in granting an upstream right which would undermine the viability of downstream uses, even in the absence of a statutory priority in favour of the existing users.
Renewals are another area where custom extends on the act. In theory these could be treated as new consent applications, but in practice to date they appear to have been treated as renewals. Consent conditions have been altered at renewal, but we are not aware of any consents for water having been turned down on renewal.
Therefore while many of the property rights established in the water are not expressly covered by the statutory framework, custom is likely to tend to favour the rights of existing users over new users both in the courts and at the council planning and consent issuing level. Property rights established through this means are necessarily not as strong nor as well defined as those which are embodied in statute. As such they are not a simple extension of the common law approach to managing water, but are more loosely defined, and more likely to change with society's changing understanding of what is right in respect of managing the resource.
MAF's view of the legal position surrounding Maori rights to use water as a physical resource is that the rights guaranteed to Maori under the Treaty of Waitangi roughly equate to those that may be held by Maori under the common law doctrine of aboriginal title. Generally speaking, the doctrine of aboriginal title may recognise the right to use water, although it is not clear in the water context whether this extends to the right to use water in ways in which it was not historically or traditionally used. The right of use recognised under the general doctrine appears to be consistent with the general common law position that natural water is not 'owned' as such. That is, it preserves a right of use rather than the right of ownership.
However, it is difficult to predict the nature of relevant interests or rights in water that may be found to survive in New Zealand by virtue of the doctrine of aboriginal title and/or the Treaty of Waitangi. To a large degree, it will depend on the nature of the historical practices and customs that it is sought to protect, and the evidence that can be produced in support of any claim. Basically, any claim or claims to rights or interest in water itself must be considered as they arise and on the information presented in support of that claim. [The Waitangi Tribunal has commented on the potential existence of such rights and has suggested in the case of the Whanganui River that Maori may 'own' water in the river by virtue of the fact that Maori were recognised as the possessors of the Whanganui River as a whole. The Tribunal reasoned that, without ownership of the water within a river, ownership of that river is meaningless. Accordingly, at least for as long as the water remained in the river, it may be considered as 'owned' by the relevant hapu. However the 'ownership' recognised by the Tribunal in this instance differs from the English legal understanding of that term, and is based on an ownership which stems from use rather than use which stems from ownership.]
Framework
The granting of rights in water are undertaken by the State. Some of these rights are granted or alienated to private interests, and others are retained by the State. Common ownership of water rights in New Zealand arises as a result of granting of rights to private interests, and in practice the management of common ownership is structured so that interests are managed as if they were privately held. [For example the Rangitata Diversion Race Company structures itself as a water supply company which delivers water to three irrigation schemes and a power company, and each irrigation scheme grants shares to its members which represent entitlement to a specific volume of water.] In practice we are primarily concerned with only public and privately held property rights in the water.
Private property rights
Private property rights relate to property from which others are excludable. In New Zealand this typically requires a resource consent, although some of these rights are established by existing use and some through mining privileges. All existing uses requiring a resource consent should have been converted to consents by now (within 10 years of enactment of the RMA) and the last of the mining privileges will expire in 18 years. Existing use and mining privileges where they exist are accorded the highest security as property rights because in theory they were not subject to regional plans and in the case of mining privileges represent a completely flexible and transferable property. Mining privileges are confined to Otago however, and their specific case does not represent a universal issue in respect of property rights.
The majority of private property rights in water are therefore represented by consents. These are subject to rules in regional plans and are limited in duration.
Non-consented takes represent a special class of takes, since these are allowed specifically under the RMA or are permitted by a rule in a plan. Those permitted under the RMA are small scale domestic and stockwater takes, fire fighting, and customary Maori usage of geothermal waters. These are limited in scale, and must still meet the requirements that the takes do not have an adverse impact on the environment. It is unclear what status these have in respect of priority in the RMA - for example it is not clear whether a domestic take would be allowed from a resource where consented takes were allocated to the point where further takes had adverse environmental effects. In practice most councils make an allowance for domestic water takes in their allocation planning, and also accord domestic takes higher priority than other takes in any competitive applications.
Public property rights
Water is not owned, but the rights to use the water in various ways are owned. Some of these rights the State alienates to individuals, and others it effectively retains in its ownership. In practice the retained rights to water represent those which various other stakeholders in society have an interest - such as the ecological values, the fishery, amenity values etc. These are generally allowed for in the RMA as effects which need to be taken into account in the management of the water resource. Some of these effects have a higher status, such as those in section 5 (environmental and sustainability issues) and section 6 (matters of national importance). Other matters in Section 7 such as kaitiakitanga, amenity, intrinsic ecosystem values, environmental quality, and the trout and salmon habitat have lower status under the act as matters to which the consenting authorities should have "particular regard" rather than matters which must be provided for.
The stakeholder rights are therefore strongly related to the effects based regime. Some values such as natural ecosystem related values appear in all sections, and therefore can probably be seen to have the strongest property right. Others, such as recreational and fishery interests, are only catered for in section 7, which would give them approximately equal status to "efficient use and development of natural and physical resources" which is also mentioned in that section. As is discussed below, the fact that non extractive stakeholders are not seen as having existing property rights in the water resource with the same level of protection as other existing use rights was a significant bugbear of stakeholders spoken to. These rights are generally exercised through the planning and consent hearing framework.
Property rights of Maori are less clear. As noted above they would appear to have aboriginal title to water under customary use, but how this translates in practice is not well established. Kaitiakitanga is protected as a section 7 matter, giving it equal status to a number of other matters including development.
