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Resource Management Act

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Improving and implementing the RMA

Administration of the RMA

Regulatory impact and compliance cost statement: Proposed National Policy Statement on Freshwater Management

Executive Summary

Fresh water is a driver of the New Zealand economy and of vital importance to the identity of New Zealanders.  Current freshwater management in New Zealand occurs predominantly at a regional level.  The management of fresh water-related issues facing communities and the nation has been observed to occur in an inconsistent, and in some circumstances, inadequate manner.  The key issues relating to New Zealand’s freshwater resources include increasing demands, reduced or declining quality, and uncertainties regarding possible impacts of climate change. The preferred option for improving freshwater management, and addressing these issues, is a proposed National Policy Statement for Freshwater Management (NPS) under the Resource Management Act 1991 (RMA). 

The proposed NPS will, unlike alternative options, provide a consistent national policy framework for decision-makers to enable the improved freshwater management being called for by New Zealanders.  It will result in benefits to the environment, in safeguarding New Zealand’s green image (of great importance to the economy), maintaining and enhancing cultural, intrinsic, amenity, and other values related to fresh water, and ensure sustainable economic development.  The NPS will incur costs to central and local government for staff in order to give effect to the NPS, and land users through compliance costs and requirements to follow industry good practice.

Adequacy Statement

This is a draft Regulatory Impact Statement (RIS) for the purpose of consultation.  A later RIS will be circulated for comment and reviewed for adequacy by the Regulatory Impact Analysis Unit before final policy decisions are sought.

Status Quo and Problem

The current management of New Zealand’s freshwater resources is primarily through statutory controls, principally under the Resource Management Act 1991 (RMA). There are also a number of non-statutory measures in place relating to the management of fresh water resources.

Regulatory Framework

The RMA sets the framework for freshwater management, and is administered by the Ministry for the Environment.  Freshwater management is subject to the general planning provisions of the RMA through a hierarchy of documents, from the national to regional to district level. These documents must reflect the purpose and principles outlined in Part II of the RMA, which lists a range of matters to be considered in resource management processes.

Under the RMA, central government can be involved in water management by issuing national policy statements and environmental standards, making submissions on regional councils’ plans, call-ins, and Water Conservation Orders.

In the absence of national policy guidance on freshwater, regional level documents have provided the main freshwater management framework. The main planning instruments have been mandatory Regional Policy Statements (RPSs) and optional Regional Plans.  All but two Regional Councils have operative regional plans (with these two having proposed regional plans) on water management and it is through these plans that rules relating to the abstraction, use and discharge to water bodies are given statutory effect.  Through these, Regional Councils are able to set minimum or maximum flow levels and establish minimum standards for water quality.

Most regional councils undertake a wide range of monitoring activities of freshwater resources.  This suggests that there is a reasonable level of base information available to make increasingly informed decisions about fresh water management.

District Plans, prepared by territorial authorities, are predominantly concerned with land-use planning, which influences fresh water in many cases. District Plans are required to give effect to regional policy statements and not be inconsistent with regional plans and any Water Conservation Orders in place in the district.

Water Conservation Orders (WCOs) can be placed on water bodies in order to sustain their ‘outstanding amenity or intrinsic values’. A WCO can be obtained by the Minister for the Environment convening a special tribunal to hear the application or through the Court system. There are currently 14 WCOs in place. Under a WCO, controls can be placed on the quantity of water abstracted and minimum standards for water quality can be prescribed which regional councils are bound to uphold.

National environmental standards (NESs) are prepared under section 43 of the RMA and may prescribe technical standards, methods or requirements.  There are currently two NES's in relation to fresh water – one relating to drinking water sources (coming into force 20 June 2008) and one relating to the measurement of water takes (currently in legal drafting).  A third NES, on methodology for setting ecological flows and water levels, is currently out for consultation.  A further NES proposal addressing on-site wastewater systems will shortly be out for public consultation.

Non-statutory Measures

There are numerous programmes and activities carried out by central Government, Regional and District Councils, community organisations, industry groups and NGOs that aim to improve fresh water management, and/or the interface with land management.

There are a number of primary sector initiatives in place and under development.  One is the Dairying and Clean Streams Accord, developed in 2003 to address increasing concerns about the negative environmental impacts of dairying on stream water quality through setting five performance targets.

Domestic water metering, contentious in some areas, is a further technique used in some parts of the country. It can encourage greater awareness of water use, delivering immediate benefits in terms of managing demand for water.

Problem Statement

The existing tools for fresh water management have had mixed success at delivering improved environmental results.  There are a number of gaps in the current policy framework, creating inadequacies and inefficiencies in the management of fresh water in New Zealand:

1. Decline in a wide range of fresh water quality indicators
2. Lack of integrated management
3. Lack of focus on the uses of freshwater resources
4. Freshwater demand management is not presently sustainable
5. Insufficient information and reporting

In part these arise because the cumulative effects of land use on water are difficult to manage.  The lack of national guidance on fresh water policy, with regional councils developing policies and plans, further creates a lack of consistency.

Other inadequacies arising from the current freshwater management regime include:

• Poor strategic planning, resulting in uncertainty;
• Demand for infrastructure development exceeding available water supply;
• Poor management of diffuse discharges in some regions;
• Over-allocation of water resource, and poor management of water demand;
• Inadequate promotion of water usage efficiency measures at the national level; and

• A continuing mental disconnect at the national level between the effects of land use intensification on water quality and quantity.

New Zealanders have an expectation that their waters will be clean, abundant, and ensure the economic, social, cultural, and environmental sustainability of their communities and nation.  Whilst fresh water in New Zealand is relatively abundant in a global sense, many regions in New Zealand do have significant fresh water management issues regarding quality, quantity, and allocation. 

The current framework has seen:

• Demand for fresh water increased 50% from 1999 to 2006;
• Water shortages, in urban and rural areas, of increasing frequency and severity;
• Diffuse discharges in urban and rural areas leading to the continued decline of water quality;
• Water quality in most urban waterways not meeting standards for recreation;
• 10-40% of the country’s lowland lakes eutrophic (having high nutrient content leading to excessive algal blooms and poor water quality);
• Nitrogen and phosphorus levels increasing in many rivers, including our most polluted, with 75 of 134 monitored lakes in New Zealand have high to very high levels of nutrients;

• 20% of monitored groundwater aquifers with bacteria levels that make the water unsafe to drink. Shallow aquifers with high nitrate and bacteria levels have been heavily affected by agriculture and urban development.

Problem Summary

The existing freshwater management framework does not appear to be achieving the sustainable management of freshwater resources.  Increasing demands on freshwater resources, declining water quality, the effects of land use and intensification, and the likely effects of climate change may exacerbate issues.  This is exacerbated by the lack of a clear national policy framework for fresh water. Government action is needed to address the key issues facing New Zealand’s fresh water resources, so that our future approach to resource management will achieve the sustainable management of this important resource on a nationally-consistent basis.

Objectives

The outcomes, agreed by Cabinet [CAB Min (06) 11/11], for the Sustainable Water Programme of Action (SWPoA) are:

• To improve the quality and efficient use of fresh water.
• To improve the management of the undesirable effects of land use on water quality.
• To provide for increasing demands on water resources and encourage efficient water management.

There are a variety of tools being explored and implemented by Government to achieve these outcomes.  Further tools are likely to be developed to assist in giving full effect to the NPS, and in turn achieve the outcomes of the SWPoA.

• The objective of this proposal is to give effect to the above outcomes being sought by the SWPoA through providing a nationally-consistent policy framework for the integrated management of fresh water which enables local government to successfully manage this important resource.
• It is important that the option chosen is able to meet these outcomes in a timely and cost effective method, in order for it to be both successful and feasible.  Therefore, options with prohibitively high costs or lengthy timeframes will not be preferred.

Alternative Options

Six alternatives to the status quo and preferred option of an NPS have been considered.  Most of the alternatives considered are not mutually exclusive.  The alternatives considered are:

• Enhancement of the Status Quo
• Amendments to the RMA.
• Ministerial Call-In
• National Environmental Standards.
• Economic instruments.

These alternatives have been assessed against the performance criteria of meeting the three SWPoA outcomes (improve the quality and efficient use of fresh water, improve the management of the undesirable effects of land use on water quality, and provide for increasing demands on water resources and encourage efficient water management), providing for national consistency, and being cost effective.

Table 1 summarises the six options evaluated against the three outcomes sought.

Table 1: Evaluation of the Alternatives

Alternative	Outcome 1	Outcome 2	Outcome 3	Nationally Consistent framework	Cost effective	Timely
Incremental enhancement of the status quo	~
Amendments to the RMA		~		~
Ministerial Call-In
National Environmental Standards	~		~	~	~
Economic Instruments	~	~			~	~
Outcome 1: To improve the quality and efficient use of fresh water.
Outcome 2: To improve the management of the undesirable effects of land use on water quality.
Outcome 3: To provide for increasing demands on water resources and encourage efficient water management.
effective      not effective     ~  partially effective

Enhancement of the Status Quo

At the local government level, enhancement of the status quo may include improved methods and rules addressing fresh water resource issues in second generation regional policy statements and regional and district plans. The timeframe for this improvement would be variable.  In the absence of national policy direction, the wide diversity of current approaches to management across the country is likely to continue, and there is no guarantee that management would be substantially improved.

Central government enhancement of the status quo would include the use of all instruments currently allowed for under the RMA. One significant instrument would be ‘whole of Government’ submissions on matters as they arise. Whilst this would allow for government input on matters of national interest, addressing individual resource consents as they appear is a piece meal and reactionary approach, with high costs to be met by central government.  In the absence of a national policy framework, the outcomes would be uncertain.

Water Conservation Orders (WCOs) are another central government tool under the RMA.  The process for attaining a WCO can be lengthy, costly, and they do not necessary apply to an entire system. This has implications for the ability of WCOs to be used as a tool to manage fresh water systems.

Best practice guidance could be provided as part of the enhanced status quo.  It generally involves the presentation of case studies that show examples of effective and innovative approaches to resource management issues.

Guidance on aspects of freshwater management could be developed, showcasing examples of good practice by regional and local authorities. This could include examples of model rules and methods.  While guidance would be important in supporting a national policy framework, it carries no statutory weight and is of limited value on its own.

Whilst enhancement of the status quo might result in localised improvements in processes and outcomes it is unlikely that enhancing the status quo will result in significant nationwide improvements in the quality and efficient use of fresh water, or the management of undesirable effects of land use on water quality. This option may not adequately provide for increasing demands on water resources. Variability between regions will remain without a national framework.  This option is unlikely to be either cost effective or efficient in terms of timeframes, and will not result in a nationally consistent approach to freshwater management.  It is therefore not the preferred option.

Amendments to the RMA

Amending the RMA could involve the strengthening of fresh water provisions in Part II of the RMA.  However, the life-supporting-capacity of water is already expressly referred to in the definition of sustainable management. It is doubtful that further strengthening of fresh water considerations under Part II would facilitate a substantial improvement in fresh water management.

Another possible amendment to the RMA is making the preparation of regional plans for water mandatory, however most regional councils already have such plans in place.  The lack of national guidance for their development would perpetuate variability in the management of freshwater across the country.  Neither strengthening Part II nor making the preparation of plans mandatory would provide a link between the high-level Part II RMA provisions and regional policy statements and regional and district plans. The RMA already provides for the development of such detailed policy and direction through the development of NPSs and NESs.

Amending the RMA would require implementation of changes at a local level, which could take several years.  The cost (hundreds of thousands of dollars) would be borne by central and local government.  This option is inefficient in terms of time and cost. Amendments to the RMA are unlikely to ensure improvements in water quality and efficient use of fresh water, and would fail to provide for increasing demands on water resources and encourage efficient water management, as the detail required to meet these outcomes would not suit the high level policy nature of a statute.  It is therefore not the preferred option.

Ministerial Call-In

Under sections 140 – 150AA of the RMA the Minister for the Environment may ‘call-in’ matters of national significance including resource consent applications, requested plan changes, requested preparation of regional plans, and notices of requirement.  In terms of freshwater management, the call-in provisions are a relatively limited instrument as they can only be used in cases where the project is of national significance (as set out under s141B).

While a call-in may be appropriate for larger projects or plan changes with significant potential impacts on water availability and quality, they are of limited value in addressing the wider issues associated with fresh water management.  Issues such as diffuse water pollution and water allocation do not usually pertain to any single project.  Rather, the environmental outcomes for fresh water are a product of multiple activities and takes in a catchment.  Thus, call-ins are unlikely to result in wholesale improvement to the resource management processes relating to fresh water management.

This alternative would not establish a consistent national policy framework.  At $100,000 to $1,000,000 plus for each call-in, it is costly.  This option may provide for increasing demands on water resources and encourage efficient water management in individual fresh water resources, but is unlikely to improve the quality and efficient use of fresh water, or to improve the management of the undesirable effects of land use on water quality, on a nationwide scale.  It is therefore not the preferred option.

National Environmental Standards

National Environmental Standards (NESs) in force and in preparation are described above (see “Status Quo”).  Additional NESs could be proposed to tackle specific issues, such as establishing minimum flows, specific water quality standards, intensification or land management practices to minimise impacts on water quality. This approach would be ad hoc in the absence of national guidance.

The use of NESs alone would not provide a consistent national policy framework. While an NES may provide national direction on specific issues, it cannot provide policies and objectives, and cannot address the wider issues. Development of an NES without an overarching framework is difficult, with NESs working best in the context of national policy framework.

NESs would fail to comprehensively improve the quality and efficient use of freshwater, as they can only focus on specific aspects, and it would be inefficient to produce numerous NESs covering all possible aspects of freshwater management.  It is therefore not the preferred option.

Economic Instruments

Economic instruments could include:

• water pricing (for agricultural, horticultural, industrial, commercial and domestic use);
• nutrient trading schemes;
• charging for discharges;
• tradeable discharge permits; and/or
• tradable water take permits.

Economic instruments are likely to form an important part of the implementation of the Sustainable Water Programme of Action and support implementation of a possible NPS.  However, without a national policy framework in place, these instruments are not sufficiently holistic to meet the wide ranging outcomes sought. They can assist in specific areas, for example where pricing of water can lead to more efficient local allocation or reducing demand. Their implementation will be reliant on the collection of information and data, consultation and target setting and would be more effective in the context of a regulatory framework to provide a common set of rules (or property rights). Also economic instruments will not be appropriate for implementation in all circumstances.  Operating in an ad-hoc basis with no overarching policy to provide an integrated outcome, economic instruments will be ineffective in achieving the desired results, while likely to incur high costs.

Economic instruments are likely to succeed in improving the management of the undesirable effects of land use on water quality, and succeed in providing for increasing demands on water resources and encouraging efficient water management.  However, economic instruments would fail to universally improve the quality and efficient use of freshwater in a nationally consistent manner, as they will be issue and region specific.  It is therefore not the preferred option.

Preferred Option

The preferred option is a National Policy Statement for Freshwater Management, under the Resource Management Act 1991 (RMA).  The purpose of national policy statements under Section 45 of the RMA is to “state objectives and policies for matters of national significance that are relevant to achieving the purpose of this Act”. The purpose of the RMA is “to promote the sustainable management of natural and physical resources”.

The proposed NPS sets an overarching framework for freshwater management in New Zealand, providing a nationally consistent approach.  The proposed NPS addresses the key issues facing New Zealand’s fresh water resources, so that the future approach to resource management will achieve the sustainable management of this important resource. 

The NPS objectives and policies are outlined below, and the full text of the proposed NPS is attached and will be available on the Ministry for the Environment website once notified. The NPS will provide a framework for integrated management of multiple land uses and contaminant discharges, to improve the quality all New Zealand’s fresh water resources, manage competing demands for fresh water, and improve usage efficiency.  The NPS will also provide for improved Māori involvement in fresh water decision making, as well as a wider range of stakeholders.

The NPS will provide guidance for a consistent and integrated approach to fresh water management, and will provide greater certainty regarding water allocation for users. The expected environmental, social, cultural and economic benefits are detailed in the table below.
The NPS is seen as more appropriate than any of the other alternatives discussed above as it will provide a national framework for freshwater management, and in a timely and cost effective manner.

The NPS provides a link between Part II of the RMA and regional policy statements, regional plans, and district plans.  The NPS will compel changes in behaviour by water users by changes to individual consent and Court decisions, and strategic planning.  This is already happening in the case of the NPS on Electricity Transmission.  The NPS will result in on the ground changes for land and water users, with land and water planned for and used in a manner which ensures the Government’s freshwater outcomes are met. 

The NPS will also encourage integrated management of land uses and fresh water, such that the effects of all land uses which may affect fresh water are considered under resource consent applications, and not just those that have a direct impact on fresh water – such as water takes, damning, diversion, and structures in the water.  This will fill the current gap whereby diffuse discharges to fresh water are often missed with activities that do not directly discharge to water.

There will be costs associated with the implementation of an NPS, most of which will be borne by central and local government.  The costs for local authorities will be variable, depending on the level of change required to existing planning documents, and the size of their districts or regions.  Overall, it is considered that the benefits of the NPS, and the risks associated with not acting, outweigh these costs as discussed below.

An NPS is the single most appropriate mechanism to address the issues for fresh water management identified, and to progress the sustainable management of fresh water resources at a national level.  It succeeds in meeting the objectives of improving the quality and efficient use of fresh water, improving the management of the undesirable effects of land use on water quality, and providing for better management of the increasing demands on water resources and encouraging efficient water management.  The NPS provides a national framework to achieve the desired outcomes, and does so in a cost-effective and timely manner.  It is therefore the preferred option.

Proposed NPS Contents

A complete evaluation of the proposed NPS is found in the section 32 report, which includes exploration of whether the objectives and policies meet the purpose of the RMA and are cost effective.  The proposed NPS contains nine objectives and nine Policies.  The nine objectives are:

1. Enabling wellbeing of people and communities.
2. Ensuring integrated management of effects on fresh water.
3. Improving the quality of fresh water.
4. Recognising and protecting life supporting capacity and ecological values.
5. Addressing fresh water degradation.
6. Managing demand for fresh water.
7. Efficient use of fresh water.
8. Iwi and hapu roles and tangata whenua values and interests.
9. Ensuring effective monitoring and reporting.

Policies 1 to 3 will ensure consistency between national, regional, and local freshwater management. Policy 1 requires that as soon as practicable, and by the second anniversary of the NPS coming into effect, every regional council must notify a regional policy statement, variation or change so it specifies objectives, policies and methods which address identified freshwater management issues.

Policy 2 requires every regional council to give effect to Policy 1 by developing or amending the regional plan in line with their regional policy statement, no later than 40 days after it has been amended in accordance with Policy 1.  They are also to include rules requiring all water permits granted after commencement of the NPS to include certain conditions for the sustainable management of freshwater, and monitoring and reporting.

Policy 3 requires every territorial authority to give effect to the relevant regional plans and policy statements consistent with Policy 1, through any required amendments to their district plans.  The district plans are to include rules requiring conditions on all relevant resource consents for the sustainable management of freshwater.

Policy 4 sets out the matters that regional councils must consider in preparing or varying regional policy statements and plans to give effect to Policies 1 and 2. Policy 5 sets out the matters that territorial authorities must consider when developing new objectives and policies for plans to give effect to Policy 3.

Under Policy 6 the NPS is also to be given effect through the inclusion of consent conditions and recommendations on designations specifying requirements for industry good practice for sustainable freshwater management.

Policy 7 provides for regional and territorial authorities to give effect to the NPS through non-regulatory methods.  Under Policy 8 local authorities will need to make publicly available a record of the process used to identify tangata whenua values, and a register of their programmes that work towards giving effect to the NPS. 

Policy 9 calls for the Minister for the Environment to review the implementation and effectiveness of the NPS within 10 years of it coming into force.

Each policy has been assessed in the section 32 report in terms of its ability to implement the objectives of the proposed NPS.  These are summarised below:

Policy	Objective
	1	2	3	4	5	6	7	8	9
1: Policies as to Regional Policy Statements	-					-	-	-	-
2 & 3: Policies as to regional and district plans	-					-	-	-	-
4 & 5: Policies as to the preparation of policy statements and plans						-	-
6: Policy as to certain consents and designations	-							-	-
7: Policy as to non-regulatory methods								-	-
8: Policy as to information concerning iwi and hapu registers and other matters		-	-	-	-		-		-
9: Review of this NPS	-	-	-	-	-	-	-	-

Benefits and Costs

In general, it was found costs of the NPS will be borne by users of land and water, and those who discharge contaminants into water.  The benefits resulting from achieving the objectives are felt by society at large, including water and land users.

A summary of benefits and costs of the proposed NPS are summarised below:

Quantification of the benefits and costs, and especially the benefits, of the proposed NPS in dollar terms is difficult. However, it is estimated that the NPS is likely to cost central and local government $101.25 million to implement over a 25 year timeframe. $1.15 million of this is on central government for planning guidance and review of the NPS.  $35.9 million is likely to fall on regional and unitary councils for additional staff to ensure the: identification of Fresh Water Resources as Outstanding and as Degraded, revision of planning provisions, monitoring and reporting, and iwi and hapu registers and consultation.  The remaining $64.2 million will be with territorial authorities for revision of planning provisions, monitoring and reporting, and iwi and hapu registers and consultation.  While much of what is being required of local government in policies should be part of their existing work programme, increases in staffing are likely to be required. 

Costs will also be borne by water and land users and those who discharge contaminants into water.  Costs of achieving industry good practice will depend on how this is defined, and are most likely to effect sheep and beef properties.  Costs resulting from environmental flows being set are costs that are likely to have come at some point, but are being brought forward.  Fresh water quality standards are likely to have the greatest impact on the primary sector, with standards for outstanding water bodies likely to have significant effects on farming properties.  It is also likely that certain land use intensification will be constrained by the NPS.  The consultation phase will further inform the assessment of potential impacts for business and consumers, including compliance costs, to be undertaken as part of the section 32 analysis on the final NPS.

It is more difficult to quantify the benefits of the proposed NPS as water is important to many facets of the economy and communities.  It is estimated that the total economic value of water (excluding electricity generation, as the water is not consumed) to New Zealand, is $34.85 billion per year.

The greatest benefits arising from the NPS will be to increases in efficiency, improved water quality, and maintaining and enhancing the economic value of New Zealand’s clean green image.  If the NPS was to result in a 1% increase in the availability of water (through improved efficiency) this would result in an economic benefit to New Zealand of $389 million per annum.

The economic value of a clean green image, in terms of a marketing advantage for New Zealand exports and tourism, is estimated to currently be $1 billion per annum. With an increased awareness and demand for ‘green’ products, with water quality maintained and enhanced, this value is likely to increase.

Other benefits, including in terms of amenity and recreation value, exist.  Some examples estimating other benefits of improved water quality include:

• $1.75 billion per annum for improving unsuitable water to swimmable quality
• $564 million per annum for improving fishable water to swimmable quality
• $190 million per annum for water quality improvements in Waikato
• $730 million per annum for water quality improvements in the lower Waimakarere.

Health benefits may also result from improved water quality preventing outbreak(s) of disease or infection, which currently cost New Zealand around $25 million per annum.

If the status quo is maintained and fresh water quality degrades, this could adversely affect the perception of New Zealand being ‘clean and green’, which could result in a $241-569 million dollar loss per annum to the dairy industry and a $530-938 million dollar loss per annum to the tourism industry.

Thus, benefits arising from improved water quality and efficacy are likely to be significant, equally avoiding further degradation of the quality of fresh water is important in maintaining New Zealand’s ‘clean green’ image.

Risks

There are risks both in not acting, and in implementing the NPS. Risks associated with not acting include further degradation of water quality with increasing intensification of land uses, lost opportunities in improving water quality across the board, a lack of co-ordination and integration between fresh water and land use management, increased conflict over water demands and allocation, and risks of water flows and levels falling too low and affecting fresh water’s ecological function.

Whilst the NPS has been identified as the best option for reaching national goals for fresh water, there are still risks associated with it.  One risk is that the timeframes specified in the proposed NPS are not sufficient given the significance of the resource management issues.  A related risk is that timeframes are impossible to be met.  While timeframes are assessed to be challenging yet possible and not overly-costly, this will likely be an issue for the Board of Inquiry to consider.  The largest risk is that regional council and territorial authorities will have insufficient resources, both in capital and labour, to address additional work resulting from NPS requirements, with the possibility that NPS requirements will result in the diversion of resources from other programmes.  The relevant expertise may not exist in some local governments.

Another potential risk is that some regional councils and territorial local authorities will interpret their existing regional policy statements and plans to be satisfactory, even in the case where they are not, leading to little change at the regional/local level. Others may not develop objectives and policies that make the most of NPS provisions.  Mechanisms to audit so that this is not the case are to be explored.

Although there are uncertainties, there is general agreement around the need to reverse trends of degrading water quality, over allocation, and conflicts over water uses and demand.

Compliance Costs

Steps to minimise compliance costs for regional councils and territorial authorities giving effect to the proposed NPS will be explored, likely through the Board of Inquiry process.  This is likely to include non-statutory guidance.  Means of simplifying RMA processes (for putting elements of the NPS into regional policy statements, for example) be repeated throughout the country is being explored and is a matter for implementation.

Impact on Stock of Existing Regulation

The proposed NPS is an instrument within the existing RMA framework.  The proposed NPS will clarify roles, responsibilities and relationships in relation to the existing stock of regulation, and as such will not increase the stock of regulation beyond the status quo.  The proposed NPS is unlikely to make any existing rules redundant, although a few regional councils are likely to have plans in place which give effect to the proposed NPS.  These rules will not need to be removed or altered as part of this proposal.

Implementation and Review

The proposed NPS is the initial stage of the NPS development.  Before it is finalised it will have undergone a public Board of Inquiry, a second section 32 evaluation of alternatives and benefits and costs, and be subject to a second Regulatory Impact assessment.  The information and findings coming out of the Board of Inquiry, and submissions to it, will inform implementation. Figure 1 below outlines the process for implementing the NPS.

Figure 1. Implementation of NPS

It is acknowledged that implementation will require a suite of actions, including non-statutory guidance, best practice, development of new management tools, and research.
Monitoring will be in part enabled through Policy 8, which requires local authorities to make publicly available a record of the process used to identify Tangata Whenua Values and Interests in Fresh Water Resources and an up-to-date register of the regulatory and non-regulatory methods to give full effect to the NPS.

Included within the proposed NPS, as Policy 9, is an independent review of the implementation and effectiveness of the NPS at achieving all of its objectives and policies no later than 10 years after it comes into force.  To enable effective review, Policy 9 calls for the collection of data required to inform the review to occur at least two years prior to the review. 

Consultation

Stakeholder Consultation

Previous consultation on the Sustainable Water Programme of Action has influenced the proposed NPS.  This includes 292 written submissions received from December 2004 to March 2005 received on the high-level discussion document “Freshwater for a Sustainable Future: Issues and Option”, and 19 public meetings, 14 meeting with local government, and 17 hui throughout the country in early 2005.  Conclusions are found in “Reflections: Your Views on the Sustainable Water Programme of Action”, while key feedback from hui are summarised in the “Wai Ora” report.

Section 46(a) of the Resource Management Act 1991 requires that before deciding to prepare a national policy statement, the Minister for the Environment seek comments from iwi authorities and relevant stakeholders on the desirability of the national policy statement and suggested content for the national policy statement.

This occurred from December 2007 to February 2008.  Comments were sought from approximately 300 iwi authorities and stakeholder organisations.  The 35 responses received have informed the drafting of the proposed national policy statement.  All commentors supported or conditionally supported the development of the proposed NPS.

Key feedback received from iwi authorities was that Māori input and involvement in the process of developing a NPS is of vital importance.  With regard to Māori consultation, the series of hui in 2005 had emphasised the strong desire of Māori to have a more active role in local decision-making.  Māori strongly expressed the view that the Treaty relationship with the Crown should be more explicit in the area of water management, as was the belief that kaitiaki knowledge could make a significant and positive contribution to the quality of decision-making around freshwater.  Clarification of property rights associated with freshwater, in particular the matter of “ownership” of freshwater was also raised as an issue.

Local government comments on what should be included in the proposed NPS included the following:

• integration of water quality and quantity issues; integrated land use and water management and cumulative effects; address land use intensification; promotion of mitigation;
• addressing diffuse contamination from land use;
• alternative means of water allocation; including enhanced ability to transfer water permits;
• encouraged demand management; efficient use, water storage, harvesting and augmentation;
• criteria to allow decision makers to weigh national interests against community aspirations;
• allowance for variability between regions and catchments; water quality targets set by communities; encouragement of partnership;
• strategic planning; address issues of prioritisation; a framework to identify nationally significant water bodies and how to deal with them; improved criteria and management of ‘at risk’ catchments;
• reduced plan and policy statement costs by reducing litigation; clarity to water management to avoid litigation;
• early and meaningful engagement with Māori as a priority; inclusion of iwi cultural interests in local decision making processes; and
• encouragement of economic instruments.

One key point from regional councils which was not anticipated was the desire that relevant NPS provisions be deemed as provisions of regional policy statements or regional plans to avoid unnecessary RMA processes needing to be repeated throughout the country.  This is an issue which has been looked at and is likely to be explored by the Board of Inquiry as a means to reduce implementation costs by making implementation simpler, and increase effectiveness.

Industry comments included the need for the proposed NPS to include and allow for:

• equity, including inter-generational equity; focus on managing future capacity and demand;
• certainty, clarity; use rights;
• clear tenure, enhanced water trading, compensation for loss of rights,
• balance of benefits and costs; balance of desired outcomes;
• flexibility; take into account economic and environmental differences within and between regions; primary responsibility for decisions at the regional level; catchment-based solutions;
• priority for renewable electricity generators;
• effects-based; science-based policies and plans;
• promotes sustainable development;
• promotes storage;
• a collaborative approach to management; allows for voluntary initiatives;
• allocative equity; economic efficiency; polluter-pays;
• water quality standards; nationally-consistent water quality classification system; uniform regulation;
• identifies tools to manage water in an integrated way;
• how NESs and NPSs and other tools fit; a clear recognition of interdependencies between water and other policies and initiatives; and
• no time for delay.

Non-governmental organisations commented on the need for the proposed NPS to include aspirational goals, facilitate restoration and recognise the linkage between land and water.
Various groups have continued to be consulted on with respect to the possible content of the NPS during its development, including the Ministerial Advisory Group and Resource Managers Group.

The Acting Minister for the Environment decided in September 2007 to use the process set out in sections 47-52 of the Act, which allows for the Minister to establish a Board of Inquiry with a specific terms of reference, public notification, submissions, and a hearing process, and finally a recommendation from the Board of Inquiry to the Minister. 

The Board of Inquiry on the proposed NPS and subsequent consultation will begin after the proposed NPS is approved. 

Government Departments/Agencies Consultation

Various government departments/agencies have been involved in and influenced the development of the Sustainable Water Programme of Action.  The Sustainable Water Programme of Action is a joint Ministry of Agriculture and Forestry and Ministry for the Environment programme.  It is governed by a Deputy Secretaries group with members from the Ministry for the Environment, Ministry of Agriculture and Forestry, Department of Conservation, Ministry of Economic Development, Te Puni Kokiri, Treasury, and Department of the Prime Minister and Cabinet.

These Departments and the Ministry of Justice were involved in drafting of the proposed NPS, led by the Ministry for the Environment.

Last updated: 22 September 2008