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6 The Current Allocation and Use System

The main responsibility for allocating water under the Resource Management Act 1991 (RMA) is exercised by regional councils (and unitary authorities). The boundaries of councils are largely consistent with major water body catchment boundaries. The RMA provides for councils to make plans and policy statements with respect to allocation decisions. The plans specify environmental baselines, and how water will be shared between users (eg, priority users, rostering regimes). Currently plans are not compulsory but the majority of regional councils either have an operative plan or are in the process of developing one. [Canterbury and Gisborne are the only two regions without a plan. Environment Canterbury intend to notify the water component of its proposed Natural Resources Regional Plan on 3 July.]

In certain circumstances abstraction of water can also be limited by water conservation orders. The RMA provides for water conservation orders as an instrument to protect the outstanding amenity or intrinsic values of a water body. This purpose is not subject to Part II of the RMA as once a water body is determined as having outstanding values, other uses can only be provided for to the extent that they are clearly compatible with protection of those values. [See An application for a water conservation order for the Buller River C032/96.] The court has interpreted 'outstanding' to require a national level of significance. [See An application by the Minister of Conservation for the Kawarau River C033/96, following decisions on Buller River (C032/96), Mohaka River (W020/92) and Mataura River (C032/90).]

Anyone may apply for a water conservation order, which is made by Order in Council (on the recommendation of the Minister for the Environment) following a hearing and appeal process. [There are currently 13 water conservation orders in place and one draft order before the Environment Court. A further application (for the Whanganui River) has been deferred while Treaty issues are resolved.] The details of the water conservation order are defined by a special tribunal rather than by a regional council. Environmental baselines are specified and allocation limits may be set, although these do not affect existing lawful uses. The process can be lengthy, with some water conservation orders taking more than ten years to put in place because of appeals and other factors. There is uncertainty as to how regional councils should deal with new applicants for water abstraction during that time.

Water is allocated between uses (beyond environmental baselines) under the resource consent process. The process operates under a first-in first-served system. In granting an allocation (ie, a water permit) the focus is on avoiding, remedying or mitigating adverse environmental effects and the potential impact on existing permit holders.

Councils have varying approaches for dealing with an over or fully allocated resource. Some councils are identifying minimum flows and specifying the amount of water that can be taken from some rivers and groundwater aquifers. For example, the Greater Wellington Regional Council has minimum flows and allocation limits for 15 rivers in its region that are fully allocated. A method used is not to grant any further consents until water becomes available with some councils operating a waiting list approach, where the applicant will wait to gain an allocation to water if it becomes available. For example, Tasman District Council (a unitary authority) operates an informal unadvertised waiting list. [Ministry for the Environment (2000): Information on water allocation in New Zealand, report prepared by Lincoln Environmental for the Ministry for the Environment.] If a water resource is over allocated a council may use a rationing scheme where existing consents are reviewed and adjusted to reduce allocations. Some councils use similar rationing schemes to reduce takes during water short periods.

A water permit confers a right to take, use, dam and/or divert water subject to the availability of water. It does not constitute ownership of or property rights in the resource and does not provide a guarantee that water is available. There is legal uncertainty about the extent to which regional councils have to take into account possible adverse impacts on the availability of water to existing permit holders when issuing new water permits. [Aoraki Water Trust is seeking a High Court declaration on this issue.]

Permits can be granted for up to 35 years, or for five years if no period is specified. [RMA Section 123(d).] They may be cancelled by a regional council if not exercised for a continuous period of two or more years. [RMA Section 126.] Permits 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. [RMA Section 125.] While there is no explicit guarantee of the renewal of a water permit, to date the custom has been for this to occur, although conditions to address environmental effects or efficiency requirements may be modified or added.

Water permits do not run with the land but are personal to the consent holder at the site specified. [From Simpson Grierson opinion 'Water Allocation and Sustainability'.] They can also be acted upon by any other person with the permission of the consent holder (unless there are conditions to the contrary), [RMA Section 3A.] and can be transferred to a new owner or occupier of the site on application by the consent holder.

The RMA also provides for the transfer of water permits to another site within the same catchment/aquifer in either of the following circumstances:

  • where the transfer is expressly allowed by a regional plan, or
  • where the regional council specifically authorises the transfer following a joint application by the parties involved, having considered the environmental effects of the transfer and the other matters set out in s.104 of the RMA. [RMA Section 136(2)(b)(ii).]

The provision to expressly allow the off-site transfer of water permits has not been included in the vast majority of plans to date, and where transfers have been allowed it has only been in limited circumstances. Transfers on application by the parties do occur; for example, there have been about 15 on the Ngaruroro River (in Hawkes Bay) over the last eight years. However generally speaking such transfers occur infrequently. The general absence of re-allocation by transfer (trading) is not surprising given the incentive to trade would be expected to emerge only once water resources are fully allocated under the current system.

Most councils charge consent holders for processing resource consent applications. Once a consent has been issued many councils charge for monitoring the consent and some charge for monitoring the resource. Normally such charges are of a fixed nature, with volumetric charging only occurring in a few regions.


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