Reports of continuing "dirty dairying" by farmers have triggered calls for the nation's biggest company, Fonterra, to use its commercial clout against the defaulters among its own shareholders.
Southland's regional council wants Fonterra to stop accepting milk from four big dairy farms that are polluting the region's streams.
The farms have been fined up to $20,000 for allowing effluent to flow straight into waterways.
Council compliance manager Mark Hunter said it was not the first time the council had taken action against some of the farms, and it had forwarded information about the discharges to Fonterra.
Green Party co-leader Russel Norman, claimed recently the "clean streams accord" between Fonterra and councils was ineffective.
It was time for Fonterra to "show some spine" and tell their milk tankers not to stop at farms which illegally-polluted rivers and streams, he said.
Dr Norman also questioned whether an apparent reluctance of judges to impose maximum fines in cases of dirty dairying meant the law might need changing.
He said current fines were insufficient and should be heavier.
He was speaking after a $37,500 fine, the largest ever for a single dairy effluent discharge, was imposed in the Environment Court at Napier earlier this month on Crafar Group's Taharua Farm, 40km southeast of Taupo.
The property, part of the Crafer Group, owned by multi-millionaire Reporoa brothers Alan and Frank Crafer, is one of the nation's most profitable, producing 1.1 million kilograms of milksolids a year.
This would have produced a dairy payout of roughly $5m from a herd with a value of about $8m.
"A fine of $37,000 is not going to make a big dent in their profit margin," Dr Norman said. The maximum possible fine was $200,000 but judges did not seem to be using it.
Dr Norman also called for the names of the worst polluters to be listed on regional council websites.
Otago Regional Council land resource officer Bruce Monaghan said 18 dairy farmers or companies were prosecuted last month and fined a total of more than $100,000 in the Balclutha District Court.
Inadequate effluent storage systems had been a major factor in the prosecutions. Application methods using travelling irrigators "known to be inherently unreliable" had made the problem worse.
Fonterra's director of milk supply, Barry Harris said today most resource consent issues were minor, but in cases where farmers refused to lift their game, the cooperative could "fine" them or even refuse to take their milk.
"In a situation where we (believe) their continued non-compliance and the impact on the environment is sufficiently severe, we will take action," he told Radio New Zealand.
In the North Island, the Wellington regional council says an audit of dairying in the region shows less than half the farmers are complying with all their resource consent conditions.
Of the 146 farms audited in the summer and autumn about 30 percent were non compliant in some way.
The seven infringement notices issued carried a maximum penalty of only $750.
"We haven't seen any decrease in the level of non-compliance and that is a major concern," council regulation manager Al Cross said.
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