Government confirms Action for Healthy Waterways - with some key changes

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The Government has now released its decisions on a number of freshwater policy initiatives that were first revealed in September 2019 under the banner ‘Essential Freshwater – Action for Healthy Waterways’.

The announcements see the new National Policy Statement, National Environmental Standards and Stock Regulations proceed largely unchanged, but with notable tweaks to the time frames, nutrient limits, and regulatory mechanisms. Most notably, dissolved organic nitrogen and dissolved reactive phosphorous will no longer have ‘national bottom lines’, restrictions on farm intensification and stock exclusion requirements will both be relaxed slightly in response to submissions, and the Resource Management Act (RMA) will be amended to include a new regime for farm management plans.

Background

The Action For Healthy Waterways package was first announced in September 2020, and was fairly described at the time as the biggest set of freshwater reforms since the RMA was passed in 1991. Our summary of the proposals as first announced is available here; this Newsflash focuses on the recent changes. The main proposals were:

  • Amendments to the RMA to establish a new freshwater planning process, whereby regional freshwater plans would be determined by expert panels chaired by freshwater commissioners;
  • A draft replacement National Policy Statement for Freshwater Management (New NPS-FM);
  • Proposed National Environmental Standards for Freshwater (NES-Freshwater);
  • Draft Stock Exclusion Regulations under the RMA;
  • Proposed National Environmental Standards for Wastewater; and
  • An updated National Environmental Standard for Sources of Human Drinking Water.

The thrust of last Thursday’s announcements was to confirm that the Government will proceed with the New NPS-FM, NES-Freshwater, and Stock Exclusion Regulations. While final drafting is not yet available (it will now be developed and then put to Cabinet for decisions by 20 July 2020), it appears that there will be refinements rather than wholesale changes to the exposure drafts of these three documents released last year. However, the Cabinet Paper and supporting materials do outline a number of notable changes, which are summarised below. No firm date is provided in terms of when these instruments will be passed into law (beyond ‘later this year’), but we can anticipate that it is likely to be late July or early August, before Government enters the pre-election ‘caretaker period’.

The RMA changes to introduce the new planning process were already well advanced through the Resource Management Amendment Bill 2019, which is now at the Second Reading stage. As introduced, the Bill had included a rather ambitious deadline of December 2023 for councils to notify the next wave of regional plans to reflect the new national policy instruments, but that date will now be pushed out (slightly) to December 2024 (with decisions due December 2026) as a result of COVID-19.

Another key change proposed to the Bill (via a supplementary order paper) is for it to introduce a new regime for farm plans (originally proposed as part of the draft NES-Freshwater) into the RMA itself.

To date there have not been any further public announcements in relation to the NES for Wastewater or the NES for Sources of Human Drinking Water.

New (replacement) NPS-FM

It is intended that the New NPS-FM 2020 will entirely replace the existing NPS-FM 2014, although it retains and builds on many of the same concepts.

Many of the core features of the draft version released in September will be retained (with refinements), including (as detailed previously): a central focus on Te Mana o te Wai (the mana of the water), an expanded national objectives framework including new ‘attributes’ to focus on broader components of ecosystem health, new requirements for primary contact sites (‘swimmability’), and a suite of new requirements to protect streams and wetlands, and provide for fish passage.

Key changes announced from the draft version released in September last year include that:

  • The proposed new ‘national bottom line’ for Dissolved Inorganic Nitrogen (DIN) (which was to be 1.0mg/L) will no longer be included in the New NPS-FM – at least initially. Due to a lack of consensus among the Science and Technical Advisory Group (STAG), consideration of such a limit has been delayed by 12 months, although it appears the New NPS-FM will still require councils to maintain existing DIN levels.
  • The new dissolved reactive phosphorus attribute (DRP) will also be shifted from a ‘limit setting’ attribute to an ‘action plan’ attribute, meaning that the New NPS-FM will no longer prescribe a ‘national bottom line’ limit to be met.
  • The national bottom line for Nitrate (currently 6.9mg/L in the NPS-FM 2014) will be reduced (i.e. made more stringent), so as to provide protection for 95% of species (up from 80%).
  • The New NPS-FM may (subject to further consultation with iwi) make allowances for horticultural activities – specifically, councils will be allowed to maintain some water quality attributes (ammonia and nitrate toxicity for rivers, and total nitrogen for lakes) below national bottom lines ‘if it is necessary to preserve the viability of fresh vegetable production within specific areas of the Pukekohe and Lake Horowhenua catchments’.
  • Mahinga Kai, which was tentatively proposed as a new ‘compulsory value’, has been confirmed for the New NPS-FM.This means that regional plans will need to set objectives for each freshwater catchment to provide for Mahinga Kai, as well as the existing compulsory values of Ecosystem Health and Human Contact.

As noted above, the deadline for notifying plan changes to give effect to the New NPS-FM will be shifted to December 2024.

New NES-Freshwater

The new NES will directly regulate a number of activities that have the potential to impact on freshwater, by setting out standards to be met and when resource consents will be required under the RMA.

Specifically, the draft released last year included standards for activities in wetlands and streams, requirements to provide for fish passage, restrictions on ‘high risk farming activities’ (e.g. feedlots, sacrifice paddocks, and intensive winter grazing), restrictions on further intensification of farming and horticulture activities, and requirements to prepare farm plans.

Key changes to these proposals include:

  • A new national cap on synthetic nitrogen-fertiliser of (initially) 190kg N/ha/year for all pastoral farms (i.e. excluding horticulture), which would apply from 1 July 2021; resource consent would be needed as a non-complying activity to exceed this limit.
  • The restrictions on farming intensification are mostly retained, with a sunset clause brought forward to 2024 (from 2025), and have been relaxed in some respects. For example the exposure draft made it a requirement to show ‘no increase’ in contaminant discharges compared with reference years, but it now appears that such activities could be granted consent where they are consistent with the NPS-FM or do not lead to over-allocation in the catchment. Most notably, it is no longer intended that these restrictions will apply to new commercial vegetable production (horticulture), as was proposed in the draft released last year.
  • The clauses of the draft NES-Freshwater in relation to farm plans will be removed, given these will now be advanced through amendments to the RMA and subsequent regulations.

Farm Plans as a new RMA instrument

In the exposure draft released in September last year it was proposed that the NES-Freshwater would include a requirement for freshwater modules of Farm Plans (FW-FPs).While the policy intent has not substantially changed, it is now proposed to instead provide for FW-FPs through a legislative change to the RMA itself.

That amendment is being progressed through supplementary order paper (SOP) to the RM Bill, to enable the development of an enforceable FW-FP regime through subsequent regulations under a new Part 6AAA of the RMA. The requirement to have a FW-FP will apply to almost all farms over a minimum size (e.g. 20 ha for pastoral farming and arable farming, 5 ha for horticulture), or otherwise as described in the regulations (yet to be prepared).

Farmers will be required to prepare a FW-FP in accordance with regulations, have it certified as appropriate by an independent certifier, and have their farm audited for compliance.Regional Councils in turn will be responsible for ensuring compliance. It is intended that regulations will initially prioritise the roll-out of FW-FPs in highly nitrogen-impacted catchments, being those within the top 10% of in-stream nitrate levels, once the new regime is in place.

Stock Exclusion Regulations

The Stock Exclusion regulations (released in draft last September) will be phased in more or less as proposed, but relaxed in some respects in response to submissions.Key changes will be that:

  • The regulations will no longer require permanent fences to be moved (although this could occur later through freshwater farm plans).
  • The setback requirement will now be a minimum of 3m rather than the 5m first proposed.
  • Hill country exclusion requirements have been reduced for beef cattle and deer, but will be addressed instead through farm plans.

The restrictions will now apply to grazing dairy cattle and pigs on all terrain, intensive stock activities on all terrain, and beef cattle and deer on low slope land only.

Comment

Overall, these announcements largely stay the course in terms of the policy direction signalled last year. While some may have hoped or feared (depending on their perspective) that the Government would delay or significantly ‘water down’ the proposed changes given the economic situation following COVID-19, that has not really been the case (and Minister Parker was quick to clarify that the decisions to ease limits for DIN and DRP were made in advance of the pandemic).

When pressed on the economic implications of the new requirements on Thursday, Minister Parker’s response was to the effect that ‘we can’t make things better by letting them get worse’, and that delaying action now would only make it more expensive in the long run.Similarly, Minister Shaw acknowledged that there may have been some additional measures that the Green Party might have wanted, but emphasised that the package was nonetheless the strongest protection any government has ever put in place for waterways in New Zealand.

While these sorts of announcements tend to attract equal and opposite criticism from both environmental groups and the primary sector, to date the complaints from the environmental side have been slightly louder, principally in relation to what might be seen as a ‘backdown’ on the proposed DIN and PRP limits. Of course, in the current economic climate and heading into the national election it can be expected that there will be further debate to come. That said, it is clear that the proposals have been relaxed in response to submissions (or advice) in a few key areas, such as those DIN and PRP limits and the detail of the stock exclusion regulations.Horticulture has also faired relatively well, being taken back out of the new restrictions on intensification (despite being one of the most nitrogen-intensive land uses), and potentially also being exempted from certain NPS-FM requirements in the key vegetable growing areas of Pukekohe and Lake Horowhenua.

At a more technical level, shifting farm plans from an NES requirement to a standalone RMA instrument (perhaps somewhere between a resource consent and a certificate of compliance in nature) is an interesting development.The regulatory (and political) challenge in this space has always been to develop a system that is flexible and responsive to on the ground circumstances, while also enforceable and effective in improving water quality. In this regard the policy explanation (at Appendix 1 to the Cabinet paper) states that, while industry involvement in the setup of the FW-FP regime is ‘desirable’, ‘this is not a non-regulatory partnership with industry, and the future FW-FP regime will incorporate strong regulatory oversight’.One of the future challenges will now be in resourcing, as it may take some time to get suitably trained and qualified farm plan ‘certifiers’ and ‘auditors’ up and running.

The new 190kg nitrogen limit is also notable because it is an ‘input control’ in relation to water quality, whereas Government has to date preferred an ‘output-based' approach to regulation.However, Minister Parker signalled that further input controls may be necessary in the future, if the present suite of output controls proved ineffective (and nitrogen management settings are to be revised in 2023).Similarly, the Cabinet paper describes the current freshwater package as the “last chance saloon” for output controls, and signals an openness to other blunter input measures (like stocking rates per hectare or limits on supplementary feed) if we do not see rapid progress on freshwater quality.

Beyond their immediate implications for primary production activities, the reforms will also be of interest to infrastructure providers, particularly in terms of the of the provisions in the NES-Freshwater and New NPS-FM around streams and wetlands, and the extent to which these will allow necessary maintenance and upgrades to significant infrastructure assets.There will also be more direct implications for providers of ‘three waters’ infrastructure, as the increased focus on urban water quality will raise the bar for stormwater and wastewater operations in particular.

Overall, while there were few big shocks in the announcements on Thursday, the challenge of making meaningful progress on freshwater quality (without drastically reducing production levels) is as big as it ever was.The time frame for notifying new plans (or plan changes) to give effect to it all has only been slightly deferred to 2024, and the technical work, community consultation, and plan drafting remains a mammoth task for regional councils. Last week’s announcements provide useful certainty going forward, but the devil as always will be in the drafting detail, and we will be reviewing this with interest when the final wording of these new instruments is released in July.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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