Office of the Minister of Agriculture and of Forestry
Office of the Minister for the Environment
Cabinet Policy Committee - 20 February 2008
- This paper seeks policy approval for a national environmental standard for measurement of water takes under the Resource Management Act 1991 (RMA). The paper outlines the proposed policy and also presents a Regulatory Impact Statement.
- In November 2006, Cabinet agreed to the Ministry for the Environment undertaking consultation on a proposed national environmental standard for water measuring devices [POL Min (06) 24/8 refers]. The standard is intended to ensure the accurate and comprehensive measurement of the water extracted from New Zealand’s freshwater resources.
- The proposed standard was developed in close consultation with stakeholders, particularly local government, the productive sector and urban water suppliers. Public submissions on the proposal have informed the recommendations in this paper.
- The proposed standard sets minimum requirements for the installation and operation of water measuring and recording devices, including the transfer of data to regional authorities. It imposes requirements on consent holders to install and operate water measuring devices. The aim is to measure the amount of water taken from rivers, lakes or aquifers at the point where it is first taken out of the source waterbody. It does not apply to individual households or businesses using water from reticulated supplies, nor to small abstractions for an individual’s drinking or stock-drinking needs.
- If this paper is approved, we will instruct the Parliamentary Counsel Office to draft a national environmental standard to give effect to these policy decisions.
- In April 2006, Cabinet agreed to a staged package of actions to improve the sustainable management of New Zealand’s freshwater resources, referred to as the Sustainable Water Programme of Action [CAB Min (06) 11/11 refers]. We were invited to confirm the need for and likely content of a national environmental standard for methods and devices for measuring water use. The standard aligns with the national outcomes of improved efficiency and managing increasing demands for water.
- Cabinet was updated on progress in November 2006 and gave approval for the public release of a discussion document on the proposed standard [POL Min (06) 24/8 refers]. A working group of water users, urban water authorities and local government, chaired by Irrigation New Zealand, provided advice during the drafting of the discussion document. Following public notification, submissions were received from a range of stakeholders. Aspects of policy were revised in response to consultation as outlined in paragraphs 41 to 43 of this paper.
The need for a national environmental standard
- The need to measure actual amounts of water taken is widely recognised and generally accepted as an important component of freshwater management. Information on actual use is critical to understanding and improving the efficiency of water use. Most importantly, it is a key requirement in understanding water resources and how they respond to the removal of water. Many elements of the Sustainable Water Programme of Action’s implementation package – for example, transfer of take consents, establishment of water-user groups, the management of environmental flows and resolution of over-allocated catchments – require users and regional councils to know how much water is actually taken and over time build up a better appreciation of the variations in volumes taken.
- The recent review by the OECD on New Zealand’s environmental performance recommended “strengthening and expanding the use of water demand management measures (e.g. volumetric metering, pricing for full recovery of water management costs, water efficiency standards”. The proposed standard relates to volumetric metering.
- Despite its recognised importance water measuring is not yet widespread in New Zealand. At the end of 2006, there were a total of 19,527 consented water takes nationally, of which 66 percent or 12,850 takes are not measured. Based on an analysis of the size of each take, only 31 percent of the volume of water granted to consent holders is currently measured.
- Regional councils are moving to increase the measurement of water takes, and, in most cases, add a measuring requirement to new and replacement consents. The transition from the current situation to full measurement is hampered by the fact that just over a third of existing consents have a replacement date more than 20 years away. The majority (85 percent) of these long-term consents are in the Canterbury region. There are programmes in place to require water measurement on existing consents that would be assisted by a national emphasis on the importance of measurement.
- There is currently significant variation in the detail and extent to which the required accuracy, ongoing reliability and reporting standards for water measurement are prescribed. Issues such as device accuracy are as much about what is achievable with current hardware, rather than catchment specific requirements for accuracy. The technical requirements for water measuring devices do not need to differ from region to region. Providing national consistency in the technical requirements for measurement will provide more certainty to users and hardware suppliers.
- A national environmental standard provides a relatively simple and effective way of preventing councils from granting consents without appropriate conditions to enable the consistent, accurate and comprehensive measurement of water take. A national environmental standard can also require regional councils to review the conditions of existing consent to achieve compliance with its requirements.
- The policy objectives for the proposed national environmental standard are to:
- ensure consistency at national, regional and catchment levels for the measuring and reporting of actual water taken;
- enable water users and regulators to easily determine compliance with water take consents;
- provide accurate information about actual water taken in any catchment (including the catchments of groundwater resources); and
- ensure the comprehensive uptake of water measuring devices in a cost effective and timely way.
- Regional council functions under the RMA include control of the take and use of water.
- Section 43 of the RMA provides for the making of national environment standards, which are regulations made by the Governor-General, by Order in Council. The purposes for which a national environmental standard can be made include standards, methods or requirements for monitoring.
- A national environmental standard can require regional councils to review the conditions of water permits (resource consents to take, use, dam or divert water) under s.128 (1) ba of the RMA to give effect to the requirements of a national environmental standard. A national environmental standard can set a timeframe for local authorities to review permits.
- Resource consent conditions or a rule in a plan can be more stringent than a national environmental standard provided the standard expressly identifies that more stringency is allowed.
The proposed national environmental standard
- The proposed standard has three parts specifying the technical requirements:
- Part 1: Requirements for water measuring devices or systems;
- Part 2: Requirements for installation and operation; and
- Part 3: Requirements for reporting and data transfer.
- A further key part of the standard is the specification of which consents it applies to in each region, and the timing of the requirement for a review of existing consents. These matters have been the most contentious part of developing the standard. The paragraphs below set out the policy intent of the technical parts of the standard, followed by the recommendations for scope and application.
Part 1: Requirements for water measuring devices or systems
- The proposed standard will establish minimum requirements for water measurement devices or systems. It does not specify the types of devices to be used. Nor does it specifically require a meter - it allows for measuring “systems” (for example calculation of actual take based on power ratings and change in water level) provided the system can be demonstrated in an auditable way to meet the minimum requirements. This approach allows for new technologies and types of devices to be used without requiring a change to the regulation.
- The minimum requirements are that the measuring device or system is:
- able to continuously measure the amount of water taken;
- be capable of recording daily volume in cubic metres to an accuracy standard of ± 5 percent for pipes, and ± 10 percent for channels;
- be capable of providing output in a form suitable for electronic data storage;
- be appropriate to the qualities of the water it is measuring (including temperature and sediment content); and
- be sealed and as tamper proof as practicable.
- The requirement for continuous measurement allows regional councils to require a recording period shorter than a day if that information is needed for management purposes, such as real time management of restrictions during water shortages.
- The accuracy requirements are consistent with the accuracy required by regional councils. Submissions from the industry indicated the proposed accuracies are achievable. They are also consistent with the accuracy requirements for the equivalent Australian initiative.
- The requirement for datalogger-capable output provides a capacity for use (which regional councils may require) of electronic transfer and safe storing of data for larger takes. Some smaller consents will be exempt from this requirement. The definition of smaller resource consents has still to be worked through with regional councils.
Part 2: Requirements for installation and operation
- This part of the standard recognises that the installation and ongoing operation of a water measuring device is as important as the selection of the device.
- The minimum requirements for installation are that:
- installation comply with the manufacturers’ installation instructions;
- measuring devices measure all water taken (e.g. be installed before the first outlet point downstream of the point of take); and
- the accuracy of all measuring devices is independently verified every five years or more frequently if recommended by the manufacturer/installer.
Part 3: Requirements for reporting and data transfer
- This part of the standard sets out the consent holders responsibilities to provide the regional council with data. It does not specify the method of transfer. Many councils are moving to electronic or cellular phone transfer of data but it was considered too onerous to make electronic transfer a mandatory requirement for all takes. Regional councils can require electronic transfer if they wish, and can develop approaches that best suit the catchment and its water users.
- We expect this part of the standard is where some regional councils will impose more stringent requirements on consent holders. Reporting is one aspect of water measurement that needs to be adaptable to local situations and reflect a range of management timescales. Some groundwater systems are managed on an annual basis, and some rivers are managed on a daily basis.
- The requirements for recording data, and data transfer are that
- responsibility for recording and transferring the data to the regional council rests with the consent holder;
- daily volumes (or weekly volumes for some takes) in cubic metres are recorded in an auditable manner; and
- data is transferred to the regional council on at least an annual basis.
- The recording and transfer intervals are a minimum requirement. There are two recommended reporting intervals – daily and weekly. They will help ensure compatibility in recording across the country and ease national reporting of water use. We are still discussing with regional councils which consents will fall in each group based on whether they need daily information to manage the resource. It is likely that the weekly requirement will apply to some groundwater takes and to smaller consents.
Which consents would the standard apply to?
- Throughout the Sustainable Water Programme of Action, a key theme in feedback from most regional councils and some other stakeholders is the ability to develop local solutions within the boundaries of national direction. Within the submission and consultation process on water measurement, there was a relative level of comfort with the technical provisions but diverse views on whether the proposed standard should apply to all resource consents across New Zealand. Notably the West Coast Regional Council would like all takes in its region to be exempt.
- We are sympathetic with the argument that there is little to gain from measuring takes that are very small relative to the size of the source waterbody. On a national basis, 44 percent of the cost relates to consents less than 10 litres per second and those consents cumulatively constitute less than 4 percent of the national total on a volumetric basis. One option would be to apply a single size cut-off on a national basis. That coarse approach does not cater for catchments where, collectively small takes constitute the majority of the allocation. Nor does it recognise that demonstrating compliance with consent conditions is a requirement for all consent holders (and for regional councils to monitor). One of the objectives of the proposal is to make it easier to determine compliance with consent conditions.
- We intend to address the matter through discussion with a pan-regional council forum and by requiring each region to identify the size of consents it would like to exempt from the standard or from some parts of it. Any exemptions must be justified on the basis that there is no or little benefit to be gained from measuring the takes in terms of improving efficiency of use, understanding of the resource, providing information useful in strategic planning, ensuring compliance with consent conditions or implementing environmental flows and/or water levels. That discussion will occur in the next few months prior to finalisation of the regulation. The criteria are strict and only a few exemptions are anticipated. The regulation will specify the exemptions applied in each region.
- The cost-benefit analysis and the Regulatory Impact Statement have been based on all consents being included.
Application of the standard to new and existing resource consents
- The standard will come into force 28 days after it is gazetted and will apply to all applications for new or replacement consents. Regional councils will be required to review existing consents to comply with the standard within 5 years.
- The proposed standard would not apply to water takes for which no resource consent is required. These takes cover those for an individual’s domestic purposes and for animals’ drinking water, and takes for firefighting as allowed under s14(3) of the RMA. The intention is to exclude small takes which regional plans allow without resource consent. Because the standard would apply at the point at which water is taken from a river, lake or groundwater system the standard would not apply to individual households or businesses that source water from a reticulated supply.
Public consultation on the proposal
- Section 44 of the RMA requires that the Minister for the Environment notify the public and iwi authorities of the proposal and provide adequate time and opportunity to comment on the subject matter.
- The proposed national environmental standard for water measuring devices was notified on 2 December 2006. Submissions were invited over an 11-week period ending on 16 February 2007. Seventy three submissions were received. These came from local government, individual water users, professional bodies, irrigation companies, hydro-electricity generators, hardware providers, non-governmental organisations and members of the public.
- During the submission period, seven public meetings on the proposed national environmental standard were held throughout the country. A separate meeting was held with senior managers of the regional councils. A summary of submissions was produced and sent to all submitters. It was also published on the Ministry for the Environment’s internet site.
- Submitters’ positions on the national environmental standard were split: 56 percent supported or conditionally supported the proposal: 27 percent opposed it. The remaining 17 percent did not state their position. Most submitters supported the measurement of water takes and acknowledged the importance of data for improving efficiency even if they did not agree that the proposed national environmental standard was the best tool to achieve the objective.
- Key points raised by submitters were:
- whether there is a need for the national environmental standard;
- whether the standard should apply to all consents;
- the structure of the accuracy requirements for pipes and channels;
- the need for and practicality of the requirement to verify accuracy every five years;
- whether the standard should apply to all takes requiring resource consents; and
- potential costs of implementation and capacity issues.
- Some aspects of the proposal were modified in response to submissions and as a result of subsequent discussions with stakeholders. In particular:
- the way of describing accuracy in channels was altered;
- the requirements for data loggers was adjusted; and
- differentiation of requirements for device output and recording intervals for takes less than 10 l/s were added.
- Information provided by submitters on costs was incorporated into the cost- benefit assessment, and further contact was made with some submitters to provide further information on costs. Some matters raised by submitters were very detailed and relate more to the drafting of the standard and the definition of terms. These submissions will be used to inform drafting instructions.
- An economic analysis of the potential impacts of the national environmental standard has been undertaken. Results are summarised in the attached Regulatory Impact Statement and Business Compliance Cost Statement.
- Total costs associated with the national environmental standard were estimated at $43.5 million over 20 years, with the majority of costs being borne by consent holders. The main effect of the standard is to bring forward costs that would otherwise not occur until, and if, each resource consent was replaced and new conditions added. The cost estimate assumes the proposed standard applies to all resource consents.
- The benefits associated with the proposal are to bring forward improvements in:
- the management of freshwater resources and environmental flows;
- compliance monitoring and enforcement;
- the ease of reporting at catchment, regional and national scale; and
- the level of confidence in water resource management.
- The standard will assist in measuring and demonstrating improved efficiency at individual, industry, regional and national levels. It will provide greater ability to assess the effects of environmental policy on the economy, and economic policy on the environment. It will also assist New Zealand in meeting the international expectation that we will report the status of and changes to our natural environment.
- Existing consent holders will, in some cases, gain knowledge that will enable enhanced performance of their water systems. Knowledge of actual amounts of water taken will help identify where allocative efficiency gains can be made – a benefit that arises where water is scarce through identification of unused allocation - and will enable more accurate and less conservative assessment of allocated volumes.
- Nationally 30 percent of resource consents to take water are in Canterbury and 78 percent of consents are for irrigation. That distribution results in the Canterbury region and the irrigation sector being most affected by the proposal in terms of both costs and benefits.
- The quantification of benefits directly attributable to the national environmental standard is difficult. However, calculations show that if the national environmental standard resulted in a 3.4 percent increase in allocative efficiency and that water was used for irrigation, the benefits would outweigh the costs. In practice, the regulation will deliver much broader benefits which make the national environmental standard highly efficient.
Implementation with local government and other stakeholders
- The Ministry for the Environment intends to establish an implementation taskforce with local government and other stakeholders to ease the implementation of this standard. The taskforce will oversee communication strategies, industry and device accreditation, regional council storing and reporting of data, national reporting of data, examination of options to reduce costs to consent holders, and other initiatives. This taskforce approach has been adopted in Australia for development of their equivalent metering standard.
- Regional councils have expressed concern over the legislative requirement for them to review existing consents, rather than have the standard automatically apply. The costs of the review fall on regional councils, not consent holders. The cost-benefit analysis identified a cost of $1.1 million for regional councils to implement the standard. The implementation taskforce will explore ways to ease the cost burden on regional councils. We will explore a possibility to make the regulation through an alternative process to a National Environmental Standard. The regulation would be unchanged but the transition costs could be eased by having it apply directly to existing consents after five years. Some significant reduction may be possible through addressing specific regional water issues and needs. We may need to consider a budget request.
- The following departments have been consulted in the preparation of this paper and concur with the contents of the paper: Ministry of Economic Development, Te Puni Kokiri, Treasury, and the Department of Conservation. The Ministry of Education and Department of the Prime Minister and Cabinet were also consulted in the preparation of this paper.
- The Ministry of Education has identified that 42 schools may be required to install water meters and provide regional councils with water flow data. Most of these schools are small with a low volume of water use and the cost of installing water meters for those 42 schools would be a burden on school budgets. The five-year transition period for existing consent holders to comply with the standard will allow enough time for these schools to budget for the cost of new meters. A requirement for annual reporting to regional councils is considered acceptable by the Ministry of Education.
- This paper does not contain specific recommendations on expenditure or revenue.
- There are no inconsistencies between the proposal and the Human Rights Act 1993 or the New Zealand Bill of Rights Act 1990.
- The proposed standard will be developed as a regulation to be made by the Governor-General, by Order in Council. The final regulation must be approved by Cabinet Legislation Committee.
Regulatory impact analysis
- A Regulatory Impact Statement has been prepared and the Regulatory Impact Analysis Unit considers the analysis and the Regulatory Impact Statement to be adequate.
- The Ministry for the Environment confirms that the principles of the Code of Good Regulatory Practice and the requirements set out in Cabinet Office Circular CO (O7) 3 have been complied with. The statement includes an analysis of alternatives to the national environmental standard, and the basis for deciding that a national environmental standard is the most appropriate option.
- The final Regulatory Impact Statement was circulated with the Cabinet paper for departmental consultation.
- The regulations will not come into force until at least 28 days after they have been notified in the New Zealand Gazette. We will release press statements prior to the regulations being completed, and the Ministry for the Environment will develop an implementation package with regional councils.
- If the proposed standard is approved, we propose that this submission, including Cabinet decisions, and the Regulatory Impact Statement, be publicly released, including by publication on the Ministry for the Environment and Ministry of Agriculture and Forestry websites.
The Minister of Agriculture and Forestry and the Minister for the Environment recommend that the Committee:
- Note that the proposed national environmental standard for measurement of water takes is part of the Sustainable Water Programme of Action
- Note that consultation has been undertaken on the proposed standard in accordance with the requirements of the Resource Management Act
- Note that analysis (presented in the Regulatory Impact Statement) has demonstrated that a national environmental standard for the measurement of water takes is the most effective and efficient national planning instrument to achieve the following objectives:
- consistency at national, regional and catchment levels for the measuring and reporting of actual water taken
- enabling water users and regulators to easily determine compliance with water take consents
- ensuring accurate information about actual water taken is available in any catchment
- ensuring that the comprehensive uptake of water measuring devices occurs in a cost effective and timely way
- Agree that regulations be developed for the measurement of water takes to require water measuring devices or systems are placed on all resource consents to take water and require, as a minimum, that each device or system:
- is able to continuously measure the amount of water taken
- records daily volumes (or weekly volumes for some takes) in cubic metres in an auditable manner
- is capable of recording daily volume in cubic metres to an accuracy standard of ± 5 percent for pipes, and ± 10 percent for channels
- is capable of providing output in a form suitable for electronic data storage
- is appropriate to the qualities of the water it is measuring (including temperature and sediment content)
- is sealed and as tamper proof as practicable
- is installed to comply with the manufacturers’ installation instruction
- is installed in a location that measures all water taken (e.g. be installed before the first outlet point downstream of the point of take)
- is independently verified for accuracy every five years or more frequently if recommended by the manufacturer/installer
- Agree that the regulations establish that the responsibility for recording and transferring the data to the regional council rests with the consent holder, and that data is transferred to the regional council on at least an annual basis
- Invite the Minister for the Environment to instruct Parliamentary Counsel to draft a national environmental standard to give effect to these requirements
- Direct officials from the Ministry for the Environment to work with a pan-regional council group to assess any exemptions from the standard on the basis of little or no benefit and that these exemptions are approved by the Minister for the Environment prior to finalisation of the regulation
- Agree that the Minister for the Environment may publicly release this paper, including the Regulatory Impact Statement
Hon Jim Anderton
Minister of Agriculture and of Forestry
Hon Trevor Mallard
Minister for the Environment