6 Effects on Investment and Management Behaviour
This section discusses the influence of perceptions of the property right on the behaviour of the consent holders. It should be noted that this section is based both on actual actions and on reported behaviour.
The major feature of the behaviour of consent holders is the almost universal investment and management behaviour as if the consent confers very high security of property right. This was despite the consent holders generally having a very good understanding of the actual nature of their right - that its duration is restricted, the potential for changes to be made, and the lack of automatic rights of renewal. It appears that by and large the consent holders are rationalising the risks that they face. They regard them as risks their business faces, and while important, are by and large not on their own constraints on investment and management. One interviewee described them as "watching brief risks" rather than constraining risks. This process of rationalisation is interesting, but not one into which we have gone in great detail since it would be a major project in its own right. However we do offer the following observations:
- The consent holders appear to have a strong belief in custom and practice heavily favouring existing consents in respect of water rights. It approached a belief that they had a type of existing use right in the resource. This leads them to believe that the regulatory authorities will be careful in respect of further actions which adversely affect their rights, and will tend to favour existing consent holders at renewal time. They believe that changes to their consent will occur, but that they will not be of such a radical nature that they cannot be managed through. Even casual perusal of regulatory authority behaviour to date tends to support this view.
- The consent holders appear to have a strong belief in their own ability to influence the consent granting and regulatory planning process. A number of times we heard from consent holders that while there were issues with the regulatory process, with the application of time and money, hiring of legal representation and experts, and a scientific case made, the regulatory agencies were generally amenable and a satisfactory outcome, with suitable mitigation measures, could be gained.
- While their behaviour was generally in line with holding a strong security, most did feel that they were exposed to some risk in the longer term with changes to planning documents and conditions in their consents. Council policy, such as claw-back had significant influence on their perception of the security of the right and influenced their behaviour. This appeared to lead to changes in behaviour with a view to protecting their existing right, such as consistently using all water consented, and an unwillingness to trade water or change land use.
- There were a small number of people (fewer than five overall) who dissented from this view of security in the consent, with some expressing extreme dissatisfaction with the process. One individual said he would not undertake another irrigation development in New Zealand because of the consent process and insecurities associated with the right.
- There was possibly an element of group thinking in respect of behaviour relating to consents. This has two aspects - managers gaining reassurance from neighbours and others in the peer group who are acting as if there were full security in the property right; and an element of gold rush mentality, where those who aren't in miss out on the right. The latter case, which we observed in resources which are not fully allocated, is exacerbated by lack of transfers occurring, a "first come first served" allocation regime, and a "use it or lose it" regime which requires irrigation development to occur when the consent is granted or it is lost. It would not be fair to state that this type of thinking was prevalent, nor is it possible to prove that it is the driving force behind perceptions and actions of consent holders. However we do suspect that this is an element of the cognitive and behavioural mix.
