Hon Dr Nick Smith

Minister for the Environment

30 August 2016

Improving freshwater management

Thank you for the privilege of giving this 2016 Lincoln Environment lecture. I’d like to acknowledge Lincoln University Chancellor Tony Hall distinguished guests, fellow MPs, and the Centre for Nature Conservation staff who are hosting us tonight.

Most of my communications are in 30 second soundbites or one page press releases, so it is invaluable to have the opportunity to set out our comprehensive plan for improving New Zealand’s management of freshwater.

I had a beaut entree for this presentation when renowned British Science Communicator and Analyst, Alok Jha, gave the 2016 Cawthron lecture in Nelson on water last Wednesday His book, the extraordinary story of our most ordinary substance, tells the origins of water from the Big Bang, and the shaping of our planet during the past 4000 million years. Three points from this presentation stand out.

First, water has been pivotal to the creation of life, is more than 60 per cent of what we are made from and is the key marker in our search for life in our solar system and beyond.

Secondly, water has shaped civilisation for the past 10,000 years. It is the presence or absence of freshwater across the globe that is the best predictor of human populations - more than any other substance or geographical feature.

Thirdly, 97 per cent of the water is in the oceans, 2 per cent is ice in places such as Greenland and Antarctica, and the real issues are about the 1 per cent of freshwater.

It is this freshwater that is the focus of this lecture.

New Zealand has plentiful freshwater

In this regard, New Zealand is richly blessed. We have more freshwater per capita than pretty much any nation. The average 2.3m of rain falling nationwide each year equates to 145 million litres per person per year. That’s enough for every one of us to have a bath every 30 seconds, for every minute of every hour of every day. It is seven times as much as Australia, 16 times as much as the United States and 70 times as much per person as the UK or China.

This abundance can have the downside of us not appreciating how important it is to our economy, our lifestyle and our health, albeit we have just had a harsh reminder in Havelock North of why we must not take it for granted.

So many of our major export industries depend on freshwater.

It takes about 800 litres of water to produce a litre of milk. A kilogram of beef takes about 400 litres of water to produce. A litre of wine takes about 200 litres of water. These industries are effectively exporting virtual water with a good dose of kiwi ingenuity. This same freshwater is the source of 60 per cent of our renewable electricity and the only reason we earn more than $1 billion a year from manufacturing aluminium.

Our rivers and lakes are equally pivotal to our tourism industry – think Huka Falls; Mt Cook reflecting in Lake Pukaki, jet boating the Shotover or trout fishing on Lake Taupo.

You can connect over 60 per cent of our external earnings as a country to this abundance of freshwater. It is core to New Zealand’s competitive advantage and quality of life.

Let me give some context to the major issues over allocation and water quality.

On allocation, our water shortage problems are in quite distinct areas and only for specific times of the year.

The total New Zealand freshwater resource is 600 trillion litres and we use 11 trillion - or only 1.8 per cent. Six trillion of that, or more than half, is for irrigation. Two and a half trillion litres a year is used by industry. Two trillion litres is used each year by town municipal supplies and about half a trillion is used for stock water.

Some communities have been getting in a lather about bottled drinking water. Numbers such as 100 million litres of water being consented sounds big. Some parties have been calling for a moratorium of such consents for fear bottled water exports will have our rivers and aquifers run dry. But these consents are minute. This is about as logical as suggesting we solve Auckland’s traffic problems by banning bikes!

The main game is agriculture. It is not only the biggest user by far, but where the use is growing. It is significant that during the past 25 years, the area of irrigated land in New Zealand has more than trebled from 250,000 hectares to 800,000 hectares. This is by far the fastest rate of growth in irrigation of any OECD country.
This growth reflects our abundance of water, the strength of our agriculture sector and the huge productivity gains available in New Zealand from adding a reliable water supply to fertile soils and our temperate climate. The problem, though, is that our systems for allocating freshwater are blunt and unsophisticated.

New Zealand river condition trends

We have challenges, too, with water quality but I caution those who exaggerate the problem at the expense of New Zealand’s reputation.

Our water quality is generally good by international standards. If you compare our biggest river in the South Island, the Clutha, and the biggest in the North Island, the Waikato, both would compare significantly better than waterways such as the Murray/Darling in Australia, the Thames in the UK, the Seine in France, the Rhine in Germany or the Mississippi in the United States.

It is difficult from the hard data to draw simple overall conclusions on freshwater quality. The first problem is that the trends vary significantly from one river to the next.

The second problem is you need several years of data to make comparisons meaningful because water quality varies dramatically seasonally and from a dry year to a wet one.

The third problem is that it depends on what you are measuring. The best summary I would give of the data on overall fresh water quality throughout New Zealand is that bacterial contamination and macroinvertebrates are unchanged during the past 25 years, dissolved phosphorus is improving and nitrate levels are generally deteriorating.

The broad conclusions I draw are this. The worst water quality is in urban areas but these are comparatively small in total area. The most significant declines are in more intensively farmed areas and are caused by minimum flows being too low and levels of nutrients or sediment being too high.

The good news on water quality is that our systems for dealing with point sources of pollution under the Resource Management Act (RMA) are generally working well. There has been a huge reduction in pollution entering our lakes and rivers from dairy sheds, factories and town effluent systems, and billions has been spent on upgrades. These are easier to regulate because they require a consent, they come up regularly for review and councils are able to set standards and monitor performance.

The bad news is that our systems have not been working in addressing diffuse pollution. In some catchments the growth in diffuse pollution has exceeded the gains from dealing to point source discharges to the degree that water quality is going backwards.

Diffuse pollution is much more challenging to regulate. It is difficult to measure as it is small amounts of runoff over large areas that just seeps into the drains and aquifers and which gradually accumulate. The activities that cause diffuse pollution - increased stock numbers and fertiliser application in rural areas or leaking pipes, road runoff and pet poo in urban areas - are not activities anybody expects to require a consent for.

The biggest policy challenge in improving freshwater quality is finding credible and workable ways of reducing this diffuse pollution.

Government’s freshwater objectives

So that is the context of New Zealand’s freshwater environment. What are the Government’s objectives?

The number one priority is improving freshwater quality. It is just too important to our quality of life, our national identity and our economic wellbeing to allow the standard of our water to go backwards.

The second objective is maximising the economic opportunity for jobs and wealth creation from our freshwater resources.

The third is we want to improve the involvement of Maori in freshwater decision making, consistent with our Treaty settlements and obligations.

There are those who question the objective of improved Maori participation in freshwater management. It is not just that the obligation arises from Treaty settlements.

My practical experience here in Canterbury with Ngai Tahu, in the Waikato with Tainui, in Lake Taupo with Tuwharetoa and in the Rotorua Lakes with Te Arawa is that iwi bring a constructive and helpful dimension enabling real momentum to improve our freshwater.

Water issues often come down to a clash of values between environmentalists and land owners. Maori have a foot in both camps and are proving to be valuable bridge builders over these troubled waters.

I also want to drive home the fact that we can achieve both these first and second objectives. There are some who believe our nation’s water choices are binary – it is either water quality or growing the economy. We disagree. We clearly need limits and not all irrigation projects, for example, will pass sustainability tests. But there are many water projects that can deliver both environmental and economic dividends.

Let me reinforce this point with three examples.

Few people appreciate that water storage and irrigation can enable land use changes that actually reduce nutrient run-off. The Lee Valley Dam in Nelson will enable about 2000 hectares of dry land farming to be converted into horticultural crops. Irrigated apple orchards leach substantially less nitrate than the existing farming.

Water storage projects can also enable higher minimum flows in summer, as has become obvious in the Opihi River in South Canterbury with the Opuha scheme. Enhanced minimum flows improve the ecological health of rivers, enhances recreation and can reduce nutrient concentrations and the risk of algal build up. A further benefit is water storage schemes can be used to stop the build-up of harmful algae with high freshening flows.

The final big opportunity for water storage projects to contribute positively to water quality is particularly pertinent to Canterbury. Ninety per cent of the water here is in the big alpine rivers but the bulk of the huge water takes for irrigation are from the groundwater and vulnerable lowland rivers. The infrastructure costs to farms of storing and using the alpine river flows is much greater, but the environmental impacts and ongoing energy costs can be much less. One of the difficult public policy challenges is to engineer this switch from groundwater to stored alpine river water.

Stronger national direction

We have six clear policy views on how we can best deliver on these improvements in freshwater management.

The first is that stronger national direction is required. My first job as an undergraduate civil engineer was with the National Water and Soil Conservation Authority here in Canterbury, just before its abolition in 1987. The view then, which dominated public policy for 20 years, was that the regional authorities could do the job.

The problem with this approach was it ignored the broader national interest, it wasn’t particularly efficient to re-litigate the same issues 16 times over and regional councils have struggled to confront the hard political choices over water.

We have sought to step central government involvement up a few notches. We have expanded the water directorate from 10 to 50 in the Ministry for the Environment. We supported and funded the Land and Water Forum to enable a national conversation on freshwater management. And we have made greater use of national direction under the RMA than any previous Government.

There is a balance to be found. The very nature of water problems varies significantly nationwide, and local knowledge and solutions are needed. On issues such as nutrient limits, what constitutes good management practice, stock exclusion and swimmability, we need to find the right mix of national consistency and local flexibility to get the best outcome for New Zealand.

The second driver to our reform programme is a strong belief in a more collaborative approach to resolving water policy problems.

We have a bad habit in New Zealand of turning environmental issues into polarised battlegrounds of winners and losers, and the litigious architecture of the RMA does not help.

I do not buy the rhetoric that farmers are environmental vandals and environmentalists and recreationists are economic imbeciles.

I have been trying to lead a culture change at both a national and local level where different water users and interests work together on finding solutions that will work for the environment and the economy. I am indebted to the commitment and work of all the participants in the Land and Water Forum and I acknowledge their new Chair, Hugh Logan, here tonight. They have broken down barriers and navigated a pathway in which substantive reform has become possible.

I remember being told by a stroppy southern farmer shortly after my appointment as Minister that the day a landowner needed a consent to change to dairying would be the same day hell froze over. In Southland, and now in many parts of New Zealand, a consent is required and, significantly, consents have been declined without a riot over property rights.

This national collaborative approach pioneered by the Land and Water Forum is being replicated at a local level throughout the country, with Canterbury in the vanguard.

An important part of the Government’s RMA reform this year is supporting this new approach. This does take longer at the front end. The problem is that even when a consensus is found, this can easily be unstitched through the drawn out appeals process and there is a risk of groups gaming the system.

The RMA Bill currently before Parliament formally recognises these collaborative processes and limits appeals where a consensus is agreed. This provides an added incentive for Councils and water stakeholders to find solutions.

Consistent reporting

A third important dimension to our reform is more consistent and open reporting.

This sounds a bit nerdy, but reporting regimes can change outcomes for the better. I would rate the best Bill of hundreds passed during my 26 years as an MP as the Fiscal Responsibility Act that requires independent reports by Treasury on the state of our public finances. It was preceded by 20 years of New Zealand having some of the worst public books in the OECD, but the disclosure requirements under Governments of various political persuasions now has us amongst the best.

My objective in advancing the Environmental Reporting Act with the independent auditing role of the Parliamentary Commissioner for the Environment is to achieve a similar outcome for the environment.

A real problem with water management is the lack of consistent data to make meaningful comparisons.

Only 20 per cent of water takes were measured in 2008. The national water metering regulations I introduced in 2009 phase in a requirement to meter and report, starting with large takes. We are at 80 per cent of water taken and on target to get to 98 per cent by next year, with the last tranche of water takes required to report from November this year.

We also have a real problem with the consistency of measurement of water quality. We are proposing a national requirement to measure the ecological health of rivers with the macroinvertebrate community index.

I also am working with regional councils on assembling national maps on swimmability. These will show which rivers and lakes have water quality suitable for swimming, under what conditions. This information will complement the open data of LAWA, a website launched in March 2014, run by my Ministry with the support of Regional Councils and the Cawthron Institute.

Not only will it let people know where and when they can safely swim in our rivers, lakes and beaches, but it will also put a real focus on improving water quality.

We are also exploring additional regulations to achieve consistency in the way we measure and report water quality. This work will support the publication next autumn of the first report on freshwater under the Environmental Reporting Act.

Tighter regulation and compliance

A fourth dimension is tighter regulation, compliance and enforcement.
The strongest and loudest message from the Land and Water Forum is that we must set limits. Limits on water takes are meaningless without measurement, and that is why the water metering requirements are so important.

Here in Canterbury, critics have been keen to highlight the fact that some water takes have exceeded consent conditions. I welcome the fact that the information is now there to give some meaning to these much needed limits.
Limits on nutrients are also rolling out nationwide. There was not a single catchment a decade ago that had caps on the amount of nutrients allowed.
They are now in place in Taupo, in four of the 10 catchments in Canterbury, two in Southland and in the Manawatu. There are a further 15 in the pipeline.
The national regulations on stock exclusion is a further example of where the work of the Forum has been pivotal.

The adverse effects of stock in waterways has been known for decades, but only four of our 16 regional councils have been able to advance rules to address the problem. I have spoken to a dozen regional councillors who have tried in good faith to make progress but the local backlash has made it too hard. That the 64 member organisations of the Land and Water Forum has reached a consensus on definitions and a timetable for progress is a tribute to their work that we are translating into national regulations over the next year.

Noting this requirement comes with a $500 million cost to the farming sector during the next 14 years, and that this is being achieved with farmers’ support, shows a genuine commitment from the sector to water quality improvements.

These limits on water takes, nutrients and requirements for stock exclusion are backed up by our changes to the RMA that upped the fines for serious non-compliance and which enable instant fines for lesser offences. There is a cost to farmers, industry and communities from these greater requirements to protect water quality but the Government is also sharing the cost burden through increased investment.

The investment in water quality initiatives in our first two terms of Government has been a seven-fold increase on our predecessors. We are getting earlier positive improvements in water quality than I expected given the long hydrological cycles on these water bodies. Lakes Brunner and Rotoiti are just two examples of real success.

During the next 10 years we have $250 million in initiatives already committed on rivers like the Waikato, Manawatu, Whanganui, Buller and Maraetotara. Budget 2016 committed another $100 million, for which we will be calling for proposals for later this year.

Science and innovation

The last but critical part of our water management programme is the focus on science and innovation to deliver new tools for limiting pollution and improving efficiency in water use.

The work that has gone into developing Overseer is world leading. It is an imperfect model that is going to require ongoing investment and innovation, but is an essential tool if we are to get on top of diffuse nutrient pollution. We also have a power of work to do on developing the tools for Good Management Practice and Technical Efficiency Standards.

It is also entirely appropriate that one of MBIE’s 10 National Science Challenges is focussed on land and water management.

Havelock North

I want to conclude on four topical and current issues. The Havelock North drinking water failure, the debate on swimmability, the work on allocation and the upcoming governance transition at Environment Canterbury.

The Campylobacter outbreak in Havelock North’s water supply affecting more than 4000 residents was a serious failure on which there are many tough questions that will need to be answered. The GNS data showing the infected water was less than a year old in an aquifer source where it should be more than 50 suggests a localised surface water breach of the well’s integrity, but we should be cautious of drawing conclusions ahead of the independent inquiry.

I am reminded of the long debate in Nelson on E. coli contamination of the lower reaches of the Maitai River. The finger was first pointed to the few upstream farmers, then it was assumed the problem was from birds and waterfowl. When microbial source tracking confirmed the human source we pointed the finger at seepage from old sewer pipes. It was embarrassingly found that most of the problem was toilets from the Council’s library having been wrongly plumbed into the stormwater rather than the sewerage system.
The lesson is to be cautious of jumping to a conclusion too soon, and sometimes it is the most basic of failures that are the cause of the problem.

Swimmability

The second topical issue has been the strong public submissions on the Government’s proposals to improve the National Policy Statement on Freshwater Management to strengthen the swimming requirements.
I’m working on options to address this.

The Government is totally committed to improving freshwater quality and swimmability but is cautious of regulatory requirements that are unworkable.
A national requirement for all water bodies to be swimmable all of the time is impractical. Most of our rivers breach the 540 E. coli count required for swimming during heavy rainfall.

We’ve got water bodies like the Washdyke Lagoon here in Canterbury and Lake Papaitonga in the Manawatu which are home to many birds whose E. coli make it impossible to meet the swimming standard without a massive bird cull.

There are also rivers associated with geothermal activity that makes water quality unsuitable for swimming.

We also need to be open about the cost of our regulatory requirements on communities and the fact that many water bodies have long hydrological cycles that mean it is a long time before we see improvement.

The Government is open to strengthening the national requirements on swimmability and has the Land and Water Forum working on options. A lot of work is going into understanding the proportion of time our waterbodies meet the E. coli standards for swimming and how we can ensure it is improved.

Allocation

One of the most challenging issues in our freshwater programme is improving our systems for allocation.

The current system of ‘first in, first served’ is fine when the resource is plentiful, but provides the wrong incentives when we start to approach natural limits.

This is an issue that the Land and Water Forum struggled to reach consensus on, and which requires a great deal of care and caution.

The next step in this process has been establishing the Technical Advisory Group, which is reviewing international best practice. I look forward to its first thoughts later this year.

Environment Canterbury

This brings me to my thoughts on Environment Canterbury. I acknowledge the decision in 2010 to replace the elected Councillors with Commissioners was a big call.
It reflected that Canterbury is the fulcrum of water management issues in New Zealand having more water used than the rest of the country combined and more than half the country’s hydro-electric storage.

The decision was motivated by an ambition to get progress on water reform and a lack of confidence by Government and the 10 territorial councils across Canterbury that the status quo could address the size of the challenge.

The decision proved futuristic in that only four months later the Canterbury Earthquakes started. The dysfunctional relationship between ECan and the City and District Councils would have made the emergency and recovery phases since much more challenging.

I have been hugely encouraged by the progress achieved by the Commissioners. Canterbury now has an operative Natural Resources plan and it is no long possible to apply for water consents in over-allocated areas. The number of new consents for water has halved from about 200 a year to about 100.

The work on limits for water quality outcomes in Canterbury is now further advanced than any other part of New Zealand. They are operative in five of the 10 zones, and at the proposed stage in a further four.
Only 9 per cent of the surface water taken was metered then as compared with 78 per cent today. And the lift in groundwater consents metered has increased from 27 per cent to 86 per cent.

And I also have to acknowledge Canterbury’s leadership in developing Good Management Practice and leading the way with Farm Environmental Plans, with more than 2000 now completed compared with none when their work began in 2010.

I cannot pay tribute loudly enough to the Commissioners led by Dame Margaret Bazley for the progress they have achieved.

Water remains one of the most important strategic issues for the future of this region. I urge Canterbury-wide voters to take a strong interest in the election of the seven councillors in October. I am encouraged by the strong calibre of candidates who have put their names forward. An important ingredient for the ongoing success of ECan will be Councillors who recognise both the environment and economic importance of water to the region; and the collective will to ensure the momentum of reform is maintained.

Conclusions

So can I conclude by saying what success for me from these freshwater reforms would look like in 2030:
· Consistent data showing our rivers, lakes and aquifers are cleaner and healthier.

· A vibrant agricultural sector using smart technology to use water and nutrients more efficiently, and where farmers take as much pride in the quality of their local waterways as they do in the success of their NPC teams.

· A community that better understands the value of its rivers and lakes, is more cautious about what they put down their drains and where iwi involvement is not a novelty but the norm.

· And a country where we are not just admired for our abundance of freshwater, but for how well we manage it.

ends

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