Office of the Minister of Agriculture and
of Forestry
Office of the Minister for the Environment
Cabinet Policy Committee
- 20 February 2008
Proposal
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.
Executive summary
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.
Background
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.
Policy objectives
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.
Legislative framework
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.
Cost-benefit analysis
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.
Consultation
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.
Financial implications
This paper does not
contain specific recommendations on expenditure
or revenue.
Human rights
There are no inconsistencies
between the proposal and the Human Rights
Act 1993 or the New Zealand Bill of Rights
Act 11000.
Legislative implications
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.
Recommendations
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
