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Executive Summary

  1. Property rights have been broadly defined as the social pattern of rights and duties established through custom, convention and law. In this study, the term "property right" is used in its broader social and economic context, rather than as a pure legal term conferring ownership.
  2. The key issue with a property rights framework is that it is not the property which is owned, it is the rights to use the property which are owned. The nature of the rights affects the behaviour of people managing and using a resource. Importantly because property rights distinguish the rights of an individual from the rest of society, they have scarcity and therefore value. Rights are typically defined and enforced by the State, and in the case of water we are interested in the set of private property rights which have been created in public property (the water resource). Property rights are an integral element in the management and use of these resources.
  3. The government's Sustainable Development Programme of Action has identified problems with water quality in New Zealand associated with non point source (NPS) discharges. NPS discharges contaminants arise across a more diffuse area, and it is not possible to point to a single location from which the discharge is derived. Agriculture is considered to be the primary source of NPS discharges because materials used in agricultural production, such as fertiliser and pesticides, as well as discharges from the soil and animals, move into both surface and groundwater systems at higher rates than would be observed under a natural system.
  4. Management of water quality occurs through the RMA (1989), where contaminants can be managed through discharge permits (S15) or potentially through land use controls (S9), and it allows for regional councils to develop plans to manage water quality. Government also has the option of using subsidies to achieve water quality aims, such as is observed in catchment control schemes which subsidise plantings and fencing in order to protect water quality. Property rights to NPS discharges are not well defined in the NZ context, and the approach which is chosen to manage NPS discharges will determine the nature of the property rights which are assigned to different groups.
  5. This study was commissioned as part of that programme to address the practice and perceptions of property rights in water quality as it relates to NPS discharges. The study involved focus group meetings and individual interviews. Three focus group meetings were undertaken for landholders, in Waikato (Matamata), Bay of Plenty (Edgecumbe) and Canterbury (Irwell). Regional council staff in each of these areas were interviewed regarding plan status. Individual interviews were undertaken with other stakeholders with an interest in water. The results discuss the nature of the landholder's beliefs about their impacts, their perceptions of responsibilities and rights, and the impact of their perceptions on behaviour.
  6. The results showed that landholders generally understood and accepted that land use activities have an impact on the environment. However this understanding is probably limited in respect of NPS discharges, and the participant's appeared to have a greater consciousness of impacts on the near environment than on more distant environments and communities. There was a general theme that it was a small proportion of other landholders who were creating most of the problems. This largely tallied with other stakeholders' view of landholders' understanding.
  7. The landholders do not see themselves as having an unconstrained right to pollute - the groups were all open to the concept that they had a responsibility to minimise their impact on the environment, and accepted the need for constraints on their rights based on regulation. By many this was simply seen as enforcing the responsible approach to management, which embodies concepts of stewardship and sustainability. There was a strong view that any constraint had to be scientifically proven.
  8. The landholders see their key right as an ability to making a living off the land. They were largely reasonably accepting of the need to constrain their rights to mitigate scientifically proven affects, and they did not see a specific right to continue a particular land use, nor to be able to discharge at a particular level. However the limits of acceptable regulation were the envelope of an ability to make an income, provide for their families, and provide opportunities for growth off the property. This was the basic right they believed they gained with the decision to purchase the land and live in the area.
  9. The other stakeholders spoken tended to regard the community's values as paramount. However the differences between the landholder view and the other stakeholders' view was more about where in the scale of a continuum the rights should be constrained. Even among the other stakeholders there was a considerable spread of views about the level of rights that landholders have. We feel positive therefore about the potential for a consensus view to emerge about the nature of those rights.
  10. Our overall impression is that there is no significant impact from the current situation on firm management and behaviour, despite the lack of certainty as to their current rights. Participants appear to regard the potential for changes to their rights as a risk that is understood, but too remote at present to be worth considering. This attitude also led to a strong desire to avoid changes which involved further regulation, even where they increased certainty.
  11. The study gave some important pointers in the development of tools for developing management regimes for NPS. The discussion pointed to the need for flexibility in the development of regulatory tools, with participants valuing the ability to innovate and develop their operations within the context of responsible or sustainable impacts. A number of factors such as the high regard for stewardship of the land held by participants, and low awareness of NPS discharges points to the potential for approaches which raise awareness of NPS issues and the impacts of discharges at a distance from their property, expand the concept of responsibility and stewardship to a wider social and geographic landscape, and use the peer group concept to assist management of NPS discharges through community based solutions.
  12. Government needs to be aware of the precedents it is setting in the Lake Taupo and Rotorua Lakes approaches to managing NPS discharges. These situations will act as important test beds for approaches to regulation and will also establish precedents in terms of property rights. In particular payment of compensation implies existing use rights for established landholders. The wider implications of any actions in these cases needs to be explored before programmes are implemented, and incentives to change could be packaged as transitional measures to assist with rapid change rather than compensation.
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