Forum proposes big changes in water controls

The Land and Water Forum wants water use rights "easily transferable between users, to allow it to move to its highest-valued use". So "barriers to transfer and trading" should be removed.

This is the major finding in the forum's third report. It stops short of recommending a resource rental -- Federated Farmers blocked that. But, if its recommendations are adopted, it would set up a regime that could be adapted (for example, by a Labour-Green government) to include resource rentals.

How far the present government will go down the forum's track is not known. The report is to be launched by Primary Industries Minister David Carter at 5.30pm today.

In its second report the forum recommended limits be set for all waterbodies. This should be done, it said, through a "collaborative" mechanism, similar to the way the forum itself, with its 58 interest group members, has operated.

The third report sets out ways to allocate water use rights within those limits.

It states five principles: water is "a common pool resource", so should meet community needs; there is a "basic human right" to water for drinking and sanitation; availability and use vary across the country; commercial investments based on water are "strategically significant for long-term economic welfare" and iwi rights have to be resolved and provided for (by negotiation between the Crown and iwi).

For this there need to be catchment-based allocation regimes which protect the limits, minimise transaction costs and give users more certainty.

The model the forum proposes achieves that by "setting a scarcity threshold" and "clarifying and firming access rights"; "enabling more efficient transfer of allocations between users"; providing "avenues for new users to enter the water economy" and protecting users' existing investments but correcting inefficiencies.

One big shift would be from an absolute right to take water up to an allocated amount, as under current consents, to an adjustable take when a catchment is under pressure: "All users bear the risk of change in the availability from the allocable quantum in accordance with the reliability specified in their consents and according to rules in the plan in relation to dry years unless it is agreed otherwise in a plan."

Existing unauthorised takes would have to come under the new allocation regime but must be "treated fairly" in the transition, though not on the same basis as authorised takes.

The proposed model shifts the management of impacts of water use from the consents to the community-collaborative plans. These plans would need to consider "activities other than water takes that nevertheless affect catchment flows" -- one such activity is hydro-electric generation. Generators also opposed resource consents.

Shifting the focus from consents to plans would require changing consent conditions. This can be done under a "statutory review process" which "already exists" and should be "as soon as practicable".

To get consistency across the country in this process and in setting thresholds, the government should give regional councils a national direction.

The forum says that when a scarcity threshold is reached all existing permitted water takes should be given a consent and any applications to take water should be in accordance with the regional plan.

The new consents should not be tied to a specific land use activity, so that they can be transferred readily: "Consents should have standard core elements that are designed to enable transfer with minimal transaction costs and regulator involvement. All consents granted by regional councils should conform to requirements in a national instrument."

Investor certainty is a factor in the proposals. Some regional councils have been granting consents for short timeframes because under existing law it is easier to alter conditions when a consent expires than during its time.

So the forum says consents should not be for 20 to 35 years and, "where infrastructure has been provided for through a collaborative planning process involving communities and iwi, there is a case for consents to run long than 35 years". But consents should be alterable during their lifetime "within accepted and pre-agreed parameters".

- Colin James