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Fonterra Co-operative Group Limited
Page 1
4 February 2014
Ministry for the Environment PO Box 10362 Wellington
Dear Sir / Madam
Re: Submission on the discussion document “Proposed amendments to the National Policy Statement for Freshwater Management 2011”
Please find attached Fonterra’s submission on the discussion document “Proposed amendments to the National Policy Statement for Freshwater Management 2011”.
Fonterra supports the Government’s objective of ensuring that New Zealand’s resource management system enables growth, is adaptable to changing values, pressures and technology, and provides good environmental outcomes. We see the proposals in this discussion document as another positive step towards achieving this goal.
If you have any queries with the content of this submission, or would like to discuss the proposed changes to the NPS further with Fonterra, please feel free to contact the undersigned.
Yours sincerely
Environmental Policy, Manager
[ withheld ]
[ withheld ]
[ withheld ]
Fonterra Co-operative Group Limited
Page 2
SUBMISSION ON DISCUSSION DOCUMENT
“PROPOSED AMENDMENTS TO THE NATIONAL POLICY STATEMENT FOR FRESHWATER MANAGEMENT
2011”
To Ministry for the Environment (the Ministry)
1. Name of submitter
Fonterra Co-operative Group Limited (background on the submitter is provided in
Attachment 1)
2. This is a submission on the following
The discussion document titled “Proposed amendments to the National Policy Statement for
Freshwater Management 2011”
3. Fonterra’s water policy position
3.1 Fonterra Co-operative Group is the world’s largest milk processor and dairy exporting
company. Our contribution to New Zealand’s GDP is in the order of 2.8% (see Attachment 1
for further details on the Co-operative).
3.2 To maintain and grow our supply of dairy products, our farmer shareholders and our
processing plants need to be adopting sustainable practices. Sustainable practices involve
using resources responsibly and managing within limits; being a respected and trusted part
of the community; and ensuring long term farmer profitability.
3.3 Accordingly when considering water policy we focus on the following objectives (with no
implied hierarchy):
healthy and resilient ecosystems
sustainable milk and dairy manufacturing growth
farmer and dairy industry profitability.
3.4 We support evidence-based policy development and collaborative decision making
processes; and we promote catchment wide solutions and adoption of good management
practices.
3.5 We support policies that allow returns on existing investments to be achieved; enable
existing dairy farmers and processing plants to continue to operate profitably; enable
growth in the supply of dairy products (while accepting that this should not equate to
increased nutrient discharges in over allocated catchments); provide clarity, certainty,
simplicity, and appropriate transition times for farmers and processors; and maintain or
improve ecosystem resilience.
[ withheld ]
Fonterra Co-operative Group
Page 3
3.6 These policy objectives and principles underpin our comments in the following sections.
4. Overall support for water reform package
4.1 Fonterra supports the Government’s approach of requiring regional councils to manage
water in an integrated and sustainable way while providing for economic growth within set
water quantity and quality limits. The discussion document acknowledges that “As a nation,
the aspirations we have for our water – both in terms of its quality, and how it supports the
economy – are high”. We agree, and we respect the need to meet both of these
expectations.
4.2 The discussion document identifies a number of outstanding issues with implementation of
the 2011 National Policy Statement for Freshwater Management and broader management
of freshwater resources in New Zealand.
4.3 We concur with the issues identified, particularly those relating to:
recommendations/decisions being made without sound information/evidence being
considered
lack of analysis and understanding of implications of limits and methods (rules etc)
adopted
sizable variation across small geographic areas of planning processes, limits and
methods adopted.
4.4 These issues lead to a large potential for economic and environmental aspirations failing to
be achieved – at both the local and national levels. We are able to provide specific evidence
of the above issues and welcome the opportunity to discuss such issues and solutions
further with the Ministry.
4.5 Development of water accounting systems, a national objectives setting framework, and a
monitoring system will undoubtedly help address these issues.
4.6 Our submission therefore focuses on advancing the robustness, workability, and credibility
of the freshwater management proposals in the discussion document.
5. Accounting for freshwater takes and contaminant loads
Comment
5.1 The discussion document proposes to amend the National Policy Statement for Freshwater
Management 2011 (NPS) to require regional councils to establish and operate a water
quality and quantity accounting system that adopts measurements, modeled results or
estimates. The accounting information is to be available when setting or reviewing limits,
and is to include at least five yearly data for water quality information and annual data for
water quantity information.
5.2 Fonterra supports the intent of the proposal since good information on what is going into or
being taken out of our water bodies is essential for communities setting value expectations
and understanding the implications of those expectations. It is also necessary to monitor
progress towards expectations.
Fonterra Co-operative Group
Page 4
5.3 We note that there is discrepancy in the matters discussed in the discussion document and
the drafting of the changes to the NPS. In the early parts of the document reference is
made to accounting for “all sources of contaminants” but this expectation of the accounting
system being comprehensive in nature is absent in the drafting of section CC. We note our
support for the wording within the changes to the NPS (i.e. without reference to “all
sources”) as it may be unnecessarily onerous on the community to monitor all. Accordingly
a targeted focus on contaminants where there are specific issues is considered appropriate.
5.4 We encourage the government to provide further guidance and support to regional councils
about best practice in the development and implementation of water quality and quantity
accounting systems – particularly the location, form and regularity of data collection and
reporting. Some consistency of approach across the country is encouraged to support
national state of the environment reporting.
Changes sought – availability of information
5.5 Policy CC2, as written, requires regional councils to take reasonable steps to ensure that
gathered information is available only “where freshwater objectives and limits have been
set”. We seek that this be amended to read “where freshwater objectives and limits have
been set, or are to be set”. Our rationale is that communities need access to such
information during the limit setting process, as recognised in bullet 3 on page 14 of the
discussion document i.e. “ensure that accounting information is available when setting (or
reviewing) limits”.
5.6 Policy CC2 requires that the information gathered “is available” but does not go so far as
stating who it must be made available to. We seek that the policy be amended to require
that the information gathered is made available to the public.
5.7 Policy CC2 requires that the freshwater quality information “shall relate to at least five
yearly intervals” (CC2(a)) and the freshwater quantity information “shall relate to at least
one year intervals” (CC2(b)). It is unclear what is meant by these terms, for example would
one sample every five years comply with CC2(a)? We appreciate that various components
of water quality may be best monitored over different timeframes and that this is difficult to
reflect in the NPS. We recommend improving the drafting of CC2(a) and (b) by referring to
“the information shall cover at least the preceding five years” and “the information shall
cover at least the preceding twelve months”, and at the same time providing clear guidance
material on best practice in the development and implementation of water quality and
quantity accounting systems (as noted above).
6. National Objectives Framework (NOF) - Overview
6.1 Fonterra supports the establishment of a National Objectives Framework. We consider that
a bounded set of values (both compulsory and optional) and associated attribute bands
from which a community can select water quality and quantity objectives/limits offer
significant benefits for managing freshwater within New Zealand. It avoids duplicated
efforts and costs in identifying bottom lines at a regional level; provides focus while also
providing local communities the flexibility to adopt the values and associated aspirations
relevant to them; and reduces the potential for repetitive litigation around the country.
Fonterra Co-operative Group
Page 5
6.2 By providing such focus nationally, communities can then direct their attention and analysis
to the implications of the options for their communities.
7. NOF - Interim and unbounded nature of the NOF
Comment
7.1 The discussion document notes that the first version of the NOF will not be complete, but
will be further populated in later versions as the science is progressed. It also leaves room
for local communities to continue to add to the list of values and attributes that can be
adopted.
7.2 We accept the need to push forward with an incomplete NOF at this point in time. The
decision making framework and the components that are currently populated are a helpful
starting point for local communities to work within as they set their water quality and
quantity limits.
7.3 We consider that, in the long term, a predominantly bounded set of values and attributes
that can then be selected from will provide the greatest opportunity for improved certainty
while retaining local autonomy, reduced local costs and potential for ongoing litigation, and
sound environmental bottoms lines being achieved. We consider that the open construct of
the NOF as proposed (i.e. local selection of values and attributes outside the NOF defined
bundle, and local selection of attributes for the national compulsory values) does not go far
enough in achieving these benefits.
7.4 We consider that it is achievable to develop a near full array of NOF values and attributes
that have undeniable validity for potential selection in any region in the country. We accept
that there may be some exceptional circumstances that lead to the need for a unique value
or attribute to apply in a particular region and consider that this should be provided for, but
by exception and with a ‘reasonableness’ test being undertaken centrally.
Change sought
7.5 We seek a commitment to a programme of work that transitions the NOF to being a
predominantly bounded set of values and attributes over time. Once the transition is
completed it should provide for adoption of values outside the bounded set but only by
exception and with approval from the Minister for the Environment.
8. NOF - Maintain or improve overall water quality over time
Comment
8.1 The discussion document proposes to retain the existing requirement to maintain or
improve overall water quality within a region, and the discretion for councils to apply
flexibility in how they achieve this. Fonterra supports this proposal and seeks that it be
retained. This approach provides communities with the flexibility to make decisions about
how and where to best meet environmental, social, cultural and economic expectations.
8.2 Having said this, it is important that the maintenance or improvement relate to the
achievement of sought after values - maintaining or improving attributes that do not relate
Fonterra Co-operative Group
Page 6
to the values sought by the community, or to the compulsory national values, could impose
costs for little benefit.
Change sought
8.3 We seek that Objective A2 be amended to reflect that ‘maintaining or improving overall
water quality’ is focused on attributes that help achieve the compulsory or additional
sought-after values e.g. “The overall quality of value gained from freshwater within a region
is maintained or improved”
9. NOF – Objective A1
9.1 Further to the above, we concur with the concerns raised in the LAWF submission regarding
inclusion of Objective A1(b) that provides for the safeguarding of human health during
secondary contact with freshwater. In addition to safe secondary contact LAWF are seeking
provision for safeguarding the health of people and communities when undertaking primary
freshwater contact where communities value water bodies for swimming or drinking. There
is likely to be a number of possible drafting solutions available to address this concern. In
considering solutions we note the following and recommend a conversation between LAWF
members and officials to discuss possible solutions.
We see Objective A1 as providing for the compulsory fundamentals of ‘life supporting
capacity’, ‘ecosystem processes’ and ‘indigenous species’, and accordingly the two
compulsory national values. We see Objective A2 as providing for achievement of
other broader values that are to be determined by communities. We consider this
hierarchy helpful to prioritization and decision making when implementing the NPS.
We consider that any value to be gained from freshwater must inherently be
achievable without adversely impacting the health of people and communities.
We consider that if swimming was to be added to Objective A1, then arguably so
should many other values – this dilutes the priority that rightly needs to be provided
to the compulsory fundamentals.
9.2 With the above in mind, we consider that Te Mana o te Wai should only be included in
Objective A1 where it is explicitly part of the compulsory values. Other aspects of Te Mana
o te Wai should be achieved through the values provided for in Objective A2.
10. NOF – Ability to set local transition timeframes
10.1 It is proposed that where a freshwater management unit is currently below a bottom line, or
is not meeting identified higher expectations, then the council can set their own timeframes
in their plans by which certain attributes are to be met. Fonterra supports this proposal and
seeks that it be retained. This approach provides communities the ability to balance pace of
change with the implications of change – quick achievement of attribute results may detract
from the value sought actually being realised or from other selected values being realised.
Fonterra Co-operative Group
Page 7
11. NOF - Compulsory national values
Comment
11.1 The proposal adopts “ecosystem health” and “human health (secondary contact
recreation)” as compulsory values that need to be adopted by regional councils. These
relate to managing water quality and quantity for ecosystem resilience and secondary
contact recreation (i.e. where immersion is not likely). Fonterra supports these compulsory
values recognising the undeniable importance of both in all parts of the country.
Change sought
11.2 Currently the proposals provide room for regional councils to add to the attributes that
need to be achieved with respect to these values. As noted earlier we seek a commitment
to a programme of work that transitions the NOF to being a bounded set of values and
attributes over time, with provision for adopting values outside the bounded set but only by
exception and with approval from the Minister for the Environment. This would mean that
the compulsory values would have a bounded set of attributes to be met (with bottom lines
and higher banded expectations defined).
12. NOF - Mahinga Kai value, kai are safe to harvest and eat
Comment
12.1 The description of the mahinga kai value “kai are safe to harvest and eat” includes an
expectation that “knowledge transfer is present”. We consider that this is not something
that the provision of a certain water quality or quantity can in itself achieve. Rather it
requires that a community of interested people is present and willing to share and receive
knowledge – this is not something that the Resource Management Act is able to require.
Change sought
12.2 We seek that the value “Mahinga kai – kai are safe to harvest and eat” be amended to
reflect the importance of the intergenerational presence of certain kai thus ensuring that
intergenerational knowledge transfer is possible.
13. NOF - Mahinga Kai value, fishing
Comment
13.1 The description of the mahinga kai value “fishing” includes an expectation that “the
numbers of fish would be sufficient and suitable for human consumption…”. The presence
and abundance of fish in any particular area will be dependent on a number of factors,
including but not limited to the health of the freshwater environment itself. Management
of fish numbers and whether they are sufficient to support the demand for fishing is outside
the scope of the Resource Management Act.
Fonterra Co-operative Group
Page 8
Change sought
13.2 We seek that the value “Mahinga kai – fishing” be amended to remove reference to “the
numbers of fish would be sufficient and suitable for human consumption” or similar
references.
14. NOF - Other national values
14.1 The proposal includes the value “cultivation” in the set of National Values to be considered
for adoption by regional councils. It is described as relating to “food security” and support
for “rural communities to grow food and fibre”. It acknowledges the essential nature of
such activities and the importance of having access to sufficient and suitable water to
produce a range of foods and fibre.
14.2 We support this proposal and seek that it be retained. We consider security of access to
food, both nationally and internationally, and the ability for our rural communities to meet
these essential needs is a critical consideration in any planning process.
14.3 The proposal includes the value “economic or commercial development” in the set of
National Values to be considered for adoption by regional councils. This includes
recognition of the importance of irrigation in the production of pasture and crops (amongst
other uses). We support this proposal and seek that it be retained. Given New Zealand’s
geography and climate, irrigation is essential to efficient capture, dissemination and use of
water in the production of food and fibre.
14.4 The value “economic or commercial development” also recognises the importance of water
to commercial and industrial activities. We support this proposal and seek that it be
retained. The ability to provide safe food sources and add value to our primary products
through processing is essential to realizing full market potential, both domestically and
internationally. In providing for this value consideration needs to be given to security of
water supply given the perishable nature of agricultural and horticultural products and the
long term investment that is needed to support development of processing facilities.
15. NOF - Attribute states and bottom lines
15.1 Fonterra supports the adoption of bottom lines for each of the attributes associated with a
value. Without this unnecessary uncertainty, technical costs and litigation will continue
across the country.
15.2 We consider that the bottom lines do not need to be single quantifiable attributes but
rather they could be descriptive in nature and have situational context.
15.3 We share some of the concerns raised amongst the primary sector during consultation with
respect to the robustness of the science and economic analysis underpinning the selection
of attributes and attribute states, including the bottom lines. We continue to encourage
sound scientific and economic analysis that involves industry and the broader community,
when identifying attribute states and bottom lines.
15.4 We support Dairy NZ’s “Outcomes sought” in their submission to the discussion document
that relate to attributes and attribute states.
Fonterra Co-operative Group
Page 9
16. NOF - Exceptions to bottom lines
Comment
16.1 The discussion document proposes that regional councils have the discretion to provide for
exceptions to the compulsory bottom lines where:
the existing freshwater quality is already below a national bottom line due to
naturally occurring processes (e.g. the makeup of naturally occurring geothermal
water)
historical activities have caused today’s freshwater quality to be below a national
bottom line and the reversal of these impacts is not reasonably practical either
physically or ecologically.
16.2 Fonterra supports a very narrow exceptions framework and requests that no further
exceptions to the compulsory bottom lines be added. A larger list of exceptions will dilute
the benefits of improved certainty and reduced costs.
16.3 We encourage the government to provide guidance to regional councils about
interpretation of the term “reasonably practical either physically or ecologically” and that
this interpretation be read narrowly rather than widely. With respect to ecological
reasonableness, it is important to ensure that any reversal of a water quality issue does not
result in a new adverse ecological effect.
16.4 In addition to the above, the Government intends to provide for exceptions to bottom lines
to allow for significant existing infrastructure (such as hydroelectricity or drinking water
dams). They intend to do this by populating Appendix 3 to the NPS. Criteria for selecting
such exceptions are defined within the discussion document, and focus on their economic
importance and limited options for efficient or effective management of the infrastructure.
We support these criteria but cannot see them provided for in the drafted Annex 3
Proposed Amendments.
Change sought
16.5 We seek specific inclusion within the NPS of the criteria for significant existing infrastructure
being exempt from bottom lines. Without this there is potential for significant future scope
creep in terms of what may be sought from Annex 3.
16.6 We also seek that any exceptions developed by Regional Councils under Policy CA2(a) and
(b) are listed in an Appendix to the NPS and that the appropriate NPS cost/benefit analysis
and consultation process is applied. We consider that without this rigor there is potential
for loose local decision making.
17. Monitoring plans
Comment
17.1 The discussion document proposes to amend the NPS to require regional councils to
develop a plan to monitor progress towards, and achievement of, freshwater objectives
Fonterra Co-operative Group
Page 10
established under the NPS. The plan must identify monitoring sites and be able to measure
long-term trends.
17.2 Fonterra supports this amendment since it is consistent with taking an evidenced based
approach to policy setting. Good state of the environment reporting is essential to good
decision making, including iterative decisions to adjust policies if objectives are not being
met within acceptable timeframes, or unintended consequences are occurring.
17.3 We encourage the government to provide further support to regional councils about best
practice in the development and implementation of monitoring plans.
18. Interpretation
Changes sought
18.1 The changes made to the definition of “Environmental flows and/or levels” (i.e. using
“freshwater management unit” in place of “body of fresh water”) imply that a freshwater
management unit may have a single environmental flow or level assigned to it. It fails to
reflect that there may be multiple water bodies within a freshwater management unit and
that a single flow may not be appropriate across the various water bodies in the single
management unit. We seek refinement of the definition to provide for the possibility of
multiple water bodies within any one freshwater management unit.
18.2 Within the definition of “Freshwater management unit” the spatial scale for setting
freshwater objectives and limits is rightly identified as being determined by the regional
council. However, we seek some reference to a community collaborative planning process
informing the council’s determination. Community involvement in limiting setting
conversations will be significantly compromised if they have not been involved in the setting
of the freshwater management units.
18.3 With respect to the definition of “Freshwater management unit” we also seek some
reference to the need for the freshwater management unit to be hydrologically or
morphologically coherent. It is not considered appropriate to identify a water management
unit as a group of water bodies that are unconnected in any way.
19. Other changes sought – artificial water courses
19.1 It is our experience that there is still mixed understanding about the implications of the NPS
to artificial watercourses (including an irrigation canal, water supply race, canal for the
supply of water for electricity power generation, and farm drainage canal). This leads to
repeated conversations and investment in legal opinions to resolve disagreements. We seek
that the NPS provide clarification of the relationship of the NPS to artificial water courses.
We seek that this relationship clarifies a default position of artificial water courses not being
subject to the NPS and NOF (except the direct impact of point source discharges from
artificial water courses) unless, by exception, a special value is identified within the artificial
water course that warrants particular regulatory management.
Fonterra Co-operative Group
Page 11
20. Estuaries
20.1 We appreciate the difficulties associated with extending the NOF to address estuary values.
In the absence of this we seek that priority be given to provision of guidance material to
regional councils to assist them in their management of estuaries. Our reasoning is that the
same potential for uncertainties and costs play out in management of estuaries as they do in
rivers and lakes. Many councils are facing significant costs and management challenges with
respect to estuaries.
21. Guidance material
21.1 When discussing the proposed changes to the NPS with various parts of the primary sector
and beyond, it is apparent that there is significant confusion in terminology adopted within
the changes and the interaction between components of the changes.
21.2 Key areas of confusion amongst parties appear to be:
the relationship between and application of values, attributes, objectives and limits
the types of monitoring regimes needed to monitor the various attribute states
the relationship between groups of attributes, when one may deteriorate and others
improve and the resulting assessment of maintaining or improving overall water
quality.
21.3 We recommend full and comprehensive guidance material be developed both for Resource
Management Act professionals and individuals within the community who are trying to
participate in planning or consenting processes.
22. Contact for queries
22.1 If you have any queries with the content of this submission, or would like to discuss the
proposed changes to the NPS further with Fonterra, please feel free to contact the
undersigned.
Environmental Policy, Manager
[ withheld ]
[ withheld ]
[ withheld ]
Fonterra Co-operative Group
Page 12
ATTACHMENT 1: Background on Fonterra Co-operative Group
Fonterra Co-operative Group
Fonterra Co-operative Group is the world’s largest milk processor and dairy exporting company
and is 100% owned by 10,668 New Zealand dairy farmers.
Fonterra’s 17,500 staff work across the dairy spectrum, from advising farmers on sustainable
farming and milk production, to unlocking the natural goodness of high quality milk in ways that
add real value to our customers and consumers around the world.
Within New Zealand Fonterra collects around 17 billion litres of milk and sells more than 2.8
million tones of dairy product annually. Globally Fonterra processes more than 22 billion litres of
milk and owns leading dairy brands in Australasia, Asia, the Middle East and Latin America. In the
2013 financial year, Fonterra’s global revenue was just under $18.6 billion.
The dairy sector’s contribution to New Zealand’s economic and social wellbeing
The dairy sector provides 25% of New Zealand’s export returns and directly accounts for 2.8% of
New Zealand’s GDP (a contribution to the economy 40% larger than the combined electricity, gas
and water sectors).
In 2012/13 the dairy sector directly employed 25,717 people on farms, 10,441 in processing and a
further 1,212 in wholesaling. In addition, the dairy sector indirectly supports many more jobs in
supply industries. The average dairy farmer spends well over half of their income on goods and
services to support on-farm operations. Many of these goods and services come from urban
areas.
The dairy sector is a key driver for high quality scientific research and academic institutions, such
as Lincoln University, with Fonterra being the largest investor in food research and development in
New Zealand, contributing around $100 million per annum.
Fonterra is strongly committed to the success of New Zealand dairy farmers and the broader New
Zealand community. An illustration of this was Fonterra tankers transporting water to the
residents of Christchurch following the February 2011 earthquake and Fonterra’s search and
rescue personnel contributing to the emergency efforts. The dairy industry will play a key part in
the Canterbury region’s recovery, supporting economic growth and infrastructure development.
Fonterra’s focus on the environment
Land and water are essential resources to Fonterra and its farmers, and we recognise that
maintaining a healthy and functioning environment, including healthy waterways and water flow,
is important for an enduring and successful dairy industry.
Fonterra also recognises the importance of healthy waterways to all New Zealanders for their
ability to sustain life, ecosystems, communities and livelihoods, and recreational and cultural
values.
Fonterra’s “Supply Fonterra” programme ensures our farmers meet regulatory and market
requirements and continuously improve their practices. Supply Fonterra states minimum
Fonterra Co-operative Group
Page 13
standards and recommended good practices, and accelerates knowledge transfer through on-farm
one-to-one support and access to education and resources.
The ‘environment’ component of Supply Fonterra currently has four parts to it:
a) Effluent management – assisting farmers to have effluent management systems
capable of 365 day compliance with regulatory requirements;
b) Waterway management – establishing the Fonterra requirement for all waterways to
be fenced, together with advice on fencing options, riparian margin management and
reducing overland flow to water - and for stock crossings to be bridged or culverted;
c) Nitrogen management - recording and modeling nutrient management information to
help farmers understand their farm’s nitrogen losses relative to other farms with
similar geographical and climatic conditions; and
d) Water use management - promoting responsible, effective and efficient water use on
farm – requiring all farms to be measuring water use by 2018/19, setting an industry
water use benchmark, irrigation systems being designed and operated to ensure
efficient water use.
In 2003 Fonterra signed the Dairying and Clean Streams Accord along with the Ministry for the
Environment, Ministry of Agriculture and Forestry and regional councils. This was one of the first
major industry efforts to extend practice beyond regulatory bottom lines, engage with
stakeholders and take responsibility for improving practices. In response to this Accord significant
improvements were achieved across the country.
In July 2013 the new Sustainable Dairy: Water Accord (SDWA) was signed by all dairy companies in
New Zealand, along with the industry-good body DairyNZ and other interested organisations.
Fonterra farmers are already working towards the SDWA’s stock exclusion, effluent management
and nitrogen management requirements as part of their everyday farming practices under the
Supply Fonterra programme.