Up to 30,000 litres of Hawke's Bay drinking water will be bottled every hour and shipped overseas when the region's latest bottling plant opens this month. One Pure International Group has resource consent to take 405,000 cubic metres a year from a bore at its waterfront site at Awatoto, Napier.

Recently there have been further calls for a charging regime to be levied on those abstracting water for gain, particularly for businesses such as bottled water companies abstracting water for sale overseas.

NZ First leader Winston Peters has said that water is common property and exporters need to pay for every drop that goes offshore.  He said 'Clean air and water are the country's most valuable resource, as a consequence, how it is managed and used and who benefits from it is a serious decision that should be decided in this country's interest and not in the interest of other economies.'

In some areas river water available for abstraction is already limited.

So who actually owns fresh water? It’s free, right?

Most people agree that no one owns the freshwater in our lakes, groundwater and rivers. We currently have a system where regional councils manage applications for freshwater abstraction from groundwater, rivers and lakes on behalf of the wider community. The aim is to maintain a healthy river environment with good water quality and associated sustainable river ecosystem. It follows that anyone currently abstracting freshwater has a social, cultural and environmental responsibility to ensure that they comply with their consent.

Commercial gain

One view is that a charge should be introduced for abstraction of freshwater where there is a commercial gain. If a charging system was introduced, natural market forces would provide a balance as the commodity (fresh water in this case) would respond to natural supply and demand forces. The evolution of this approach in the future could be tradeable water rights.

Applying a charge or levy seems a reasonable approach but who will decide who the levy applies to and how much they should be charged - the regional councils?

And if people abstracting water for gain have a social, cultural and environmental responsibility to ensure that river and lake systems are managed successfully, a charging regime shaped around the amount of freshwater abstracted versus the amount of water returned healthily back to the environment may have some merit.

For instance, a water bottling company which abstracts water for production may return zero water to the environment and attract 100% of any charges that apply. But a local authority that abstracts water for public consumption and that returns 100%+ treated water (treated wastewater plus rainfall) to the environment would pay zero. Somewhere in between are organisations and industries whose processes consume water such as agriculture, dairy farming and electricity generating companies. Return say 40% of water abstracted by volume back to the environment and a company could pay 60% of charges due. A simple idea based on the user pays approach which takes into account and charges for the net volume of water abstracted, simple, yes. Perfect? Perhaps not.

What’s the bigger picture?

Before deciding to place a financial burden on our largest industries, agriculture and dairy, shouldn’t we understand the possible economic, cultural and social impact across New Zealand first?

Global research has shown for instance that the quantity of water needed to produce a litre of milk has been calculated to be as much as 1020 litres of water (a mixture of rainfall, river water and recycled water). In 2013-14 the payout for milk solids was $8.30/kg, Fonterra’s forecast payout in March 2016 was $3.90/kg a situation placing economic pressure on the dairy servicing sector and the wider New Zealand economy. Adding another financial burden at the production end of the process for dairy and agriculture will likely compound economic issues.

Socially more than 45,000 people are employed in the dairy industry alone according to Statistics New Zealand (2013) and culturally the issues associated with the freshwater rights and interests of Maori are complex and unresolved.

The overriding priority must be protecting the quality of New Zealand’s freshwater river, groundwater and lake systems now.  This is inherently linked to managing the remaining quantity of freshwater in our river systems. I believe this should be measured based on the performance of its eco system not whether a river is described vaguely as wadeable or swimmable.

Creating a commercial environment where the right to abstract freshwater is based on those that can afford to pay the most and could eventually lead to water rights being placed in the hands of a few large organisations doesn’t sit comfortably with our cultural heritage or our social values. Eventually though this approach may also lead to reduced diversity of use and potentially lead to exposure of NZ PLC to industry or wider economic cycles.

Action is needed to ensure current water use rights are used efficiently, particularly where rights are not fully utilised. Assigning a monetary value to freshwater use may introduce a change in behaviour. It’s certainly unlikely water users would wish to pay the full price for an allowance they were not fully utilising but at what wider community cost?

Currently no one owns freshwater, shouldn’t we leave it that way?

Let’s concentrate our efforts on ensuring effective governance and management of our most precious life giving resource.

The National Policy Statement of Freshwater Management 2014 is a good start providing a framework to properly assess how to set objectives and limits to ensure the future of our freshwater resources.

This thought leadership article by Simon Warren, our water resources and networks manager, is intended to provide you with insights and relevant information on who owns our water, and whether a charge should be introduced for abstraction of freshwater. Our thought leadership articles on topical and specialist issues are designed to present the key points in an easy to digest and interesting manner.