FRESHWATER MANAGEMENT GUIDANCE

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This document may be cited asMinistry for the Environment.2018. A Draft Guide to Limits under the National Policy Statement for Freshwater Management 2014 (as amended in 2017). Wellington: Ministry for the Environment.

Published in March 2018 by theMinistry for the Environment Manatū Mō Te TaiaoPO Box 10362, Wellington 6143, New Zealand

ISBN: 978-1-98-852539-6Publication number: ME 1345

© Crown copyright New Zealand 2018

This document is available on the Ministry for the Environment’s website: www.mfe.govt.nz.

Contents1 Introduction 4

What this document covers 4Give us your feedback 4

2 How limits fit into the Freshwater NPS framework 5Principles for setting limits 6Relationship between freshwater objectives and limits 6Relationship between limits and methods 7Allocation and avoiding over-allocation 7

3 The NPS definition of a limit 11‘Maximum amount’ 11‘Resource use available’ 11‘Allows a freshwater objective to be met’ 12

4 NPS provisions on setting limits 13Other Freshwater NPS terms relating to limits 14

5 What limits could look like 16

6 Limits in the regional plan 17

7 Considerations in limit-setting 18How to determine the appropriate limit 18Final decision-making on limits 19

A draft guide to limits 3

1 IntroductionThe National Policy Statement for Freshwater Management 2014 (NPS or Freshwater NPS) provides direction to local authorities about managing fresh water under the Resource Management Act 1991 (RMA).1 The preamble of the Freshwater NPS states that “setting enforceable quality and quantity limits is a key purpose of this national policy statement”.

This document provides guidance to help regional councils, iwi/hapū, and other practitioners involved in the freshwater planning process give effect to the limit-setting requirements of the NPS.

Further guidance on the Freshwater NPS is available on the Ministry for the Environment website. Any future changes to the NPS will be reflected in updated guidance.

What this document coversThis guide explains the policy intent of limit setting, including:

• an explanation about the concept of limits, their definitions, what the NPS requires, and how limits relate to other elements of the NPS framework

• a discussion on allocation and over-allocation

• an understanding of what limits are intended to achieve

• key considerations in setting limits.

The NPS provides strong direction to regional councils, for example through use of the term ‘avoid’. This guide uses terms like ‘require’ (or related words) when explaining what the text of the NPS actually says. It uses ‘intend’ (or related words) when attempting to provide more insight into the policy intent of the NPS.

This document does not provide prescriptive instructions for how limits must be set. Further guidance on the limit setting requirements articulated in the ‘Note’ attached to the periphyton attribute table is being developed and will be available in 2018.

Give us your feedbackThis guide is being released as a draft. We welcome your feedback or suggestions on the content. If you would like to provide feedback, please email freshwater@mfe.govt.nz. A final guide will be published in August 2018.

1 The NPS was amended in August 2017. These amendments did not fundamentally alter the role of limits in the Freshwater NPS.

4 A draft guide to limits

2 How limits fit into the Freshwater NPS frameworkTo manage fresh water the Freshwater NPS introduced a national objectives framework which can broadly be thought of as a Values – Freshwater Objectives – Limit setting – methods cascade.

The framework firstly requires councils to establish what values apply to the freshwater bodies in their region. This must include the two compulsory national values of ecosystem and human health, plus any other national or local values the community identifies.2 Councils must then establish freshwater objectives for those values. Freshwater objectives should ensure that those aspects (attributes) of water quality relevant to the values are maintained or improved.

Freshwater objectives must be set using every attribute in Appendix 2 of the NPS (as they are all linked to the two compulsory values), and any other attributes which are appropriate for supporting the full range of values the community holds for water bodies in their region3. Freshwater objectives describe the intended environmental state of fresh water that would provide for a value, conveyed by the attribute states A–D.

Limits must then be established that will achieve the freshwater objective. A limit is the maximum amount of ‘resource use’ that is possible, while still meeting the freshwater objective over time.

Methods (including rules) must also be established in the plan. Methods are the actions that will need to be taken to constrain resource use to the specified limits. Figure 1 summarises the framework concept and how limits fit in to it.

Figure 1: The Freshwater NPS framework from values to methods

FRESHWATER OBJECTIVES

ATTRIBUTESVALUES

The state you want for the water in the future

The characteristics of the water that need to

be managed

The things people think are important

about the water

Help you identify Help you choose

Help you provide for

METHODSLIMITS

The maximum amount of resource use that

will enable freshwater objectives to be met

The measures you put in place to ensure

freshwater objectives and limits are met

Help you set Help you determine

Help you achieve Help you meet

2 This includes the ‘national values’ in Appendix 1 and any others identified by the community3 See the Draft Attribute Guidance on the Ministry for the Environment website for detail on attributes and setting

freshwater objectives.

A draft guide to limits 5

Principles for setting limitsAlthough the Freshwater NPS provides flexibility to councils in how they approach limit-setting, the framework within the NPS for limit setting provides some principles that should inform decisions about the types of limits that would best meet the policy intent of the NPS.

• A limit is about the amount of resource use, rather than the state of the water (ie, the role of the freshwater objective).

• A limit should be a quantifiable amount that expresses the maximum available for use.

• A limit is only effective if it is articulated in a way which will manage the cumulative effects of resource users.

• A limit should be underpinned by information obtained through freshwater accounting.

• The limit must be clearly articulated in the plan, including the point at which further allocation will stop so that over allocation is avoided, using methods, including rules.

• A limit can be on any type of resource use – quantity is relatively self-explanatory, quality is more difficult, and different ways of thinking about resource use and how it is allocated may be needed.

Relationship between freshwater objectives and limitsFreshwater objectives and limits are two essential components of the Freshwater NPS. They are sometimes thought of as being interchangeable terms; however, the intent of the NPS is that they are about very different things. A freshwater objective is a description of the intended state of the water and is expressed in relation to specified attribute states (A-C). A limit is a description of the amount of resource use that will allow that state to be achieved; and which ideally can be defined for individual resource users or at a catchment/freshwater management unit (FMU) scale (see discussion below on allocation).

In the NPS, freshwater objectives must be set using the attributes in Appendix 2 plus any other attributes a council considers appropriate to ensure values are maintained or improved over time.

In setting a limit to achieve freshwater objectives the key question is, ‘if my attribute is x and I want it to remain in B-state, what is needed to maintain it’? Periphyton is a useful example to illustrate the difference between limits and objectives as the ‘limit’ is not on the attribute itself but on water quality aspects which contribute to the attribute state (i.e. the abundance or biomass of periphyton. There are many aspects that influence the abundance of periphyton (shade, temperature, flushing flows etc) but the nutrients nitrogen and phosphorus are usually involved. In order to control periphyton abundance, these nutrients will need to managed and this generally requires limits on the intensity of nutrient emitting land uses.

Recent changes to the freshwater NPS have made this explicit through a ‘Note’ attached to the periphyton attribute table. Specific guidance on this Note and how to give effect to it is in the process of being developed and will be available on the Ministry for the Environment website in the latter half of 2018.

6 A draft guide to limits

The process of setting freshwater objectives and limits is not linear; a decision about one will affect the other. To set a limit you need to know what freshwater objective a community wants to aim for (current state or better). However, for the community to be able to make an informed decision about whether an aspirational freshwater objective is acceptable, they will need to know what limit(s) will be needed to achieve it, and the implications of those limits.

It follows that the process of setting freshwater objectives and limits will be an iterative one. This is recognised through Policy CA2(f)(iii) which requires councils, when identifying freshwater objectives, to consider the limits that would be required to meet them. Final decisions on the limits (plus the methods to achieve them) will involve consideration of whether they are the most appropriate and efficient way to meet freshwater objectives (see section 7 of this guide for a further discussion on limit decision making).

Relationship between limits and methodsPolicy A1 requires councils to (a) set freshwater objectives and limits and then (b) establish methods to avoid over-allocation, or in other words, restrict resource use to that specified by the limits. Methods and limits are therefore different but part of a complementary package.

The limit itself is of critical interest as it defines how much of the resource is available in total. Methods describe how that limit will be met. Methods can be regulatory (such as rules or consent conditions) or non-regulatory (such as flow augmentation, or significant catchment-level environmental enhancement initiatives such as major new wetlands or sediment basins).

Once the limit is set, the regulatory method which describes how that is to be allocated to users will quantify the impact on individual resource users. For example, to meet a total catchment load limit a council might allocate discharge allowances to individual users. It is this individual allocation, rather than the total catchment limit, that will have the most direct impact on land users.

Allocation and avoiding over-allocation

A different way of thinking about allocationTo date the term ‘allocation’ has been used in a very specific way in water quantity management however, this guidance suggests a broader use of the term. In water quantity management allocation has meant a quantity of ‘resource use’ (a water take) that is, in principle, able to be exchanged. This idea has been extended into nitrogen limits, so a nutrient discharge allowance is an individual allocation that is a quantity which, in principle, is also able to be exchanged. In short, allocation has been used to describe the quantum given to a consent holder which is often an exchangeable (or transferable) amount. The intent of the NPS is that this broader meaning of allocation is used. The following explains the rationale for this.

Broadening the way we think about, and apply the term ‘allocation’ will help to set effective limits. A broad interpretation of allocation provides for/allows:

a. different options for what a limit can be (particularly for attributes such as E. coli and sediment)

A draft guide to limits 7

b. different ways of measuring/quantifying resource use so that it can be tracked over time thereby avoiding over-allocation (see below for a discussion on over-allocation)

The idea that all limits need to be allocable in some way is a key requirement of a limit under the Freshwater NPS. This is because the Freshwater NPS requires councils to avoid over-allocation by restricting resource use to that specified by the limits (see below). To do this it will be necessary to:

a. firstly establish the maximum amount of resource use that is possible while still meeting a freshwater objective (Freshwater NPS definition of a limit)

b. then quantify the current amount of resource use

c. establish whether current resource use exceeds the limit (and requires claw-back) or, whether additional resource use is possible

d. if additional resource use is possible – at what point will the cumulative impact of that additional use mean the limit threshold has been reached and any extra use will result in over-allocation and should be prohibited

e. include in the plan rules and methods which provide resource users with the information and consenting officers with the means to issue/decline consents accordingly.

It is important to note that under the broader use of the term ‘allocation’, a limit must be quantified but this does not necessarily mean it is able to be traded or allocated to individual users. Not all limits can be set up as exchangeable quanta, but they all need to be quantifiable in some way to be effective.

Examples of limits that are able to be allocated

A stock exclusion rule is a limit as it restricts the ‘resource use’ which is stock access to water bodies for drinking/grazing. Stock exclusion rules allocate property owners the right to use land for grazing only outside the stream bed and/or maybe up to 3m from it. It is not an exchangeable allocation – it sits with the owner of that property – but it is quantifiable. If a stock exclusion rule is a constraint on stock access to water, and limiting that access will help achieve a E. coli objective, then it is a limit under the Freshwater NPS definition.

Another example would be a rule that prevents grazing on steep erodible gully heads and which even defines these areas on maps and requires them to be retired and planted (methods). This rule places a constraint on the amount of the resource (grazing land) that can be used – which has been allocated to individual property owners – to meet a freshwater objective for sediment. This is therefore, a limit under the NPS definition.

These examples fit with the two-limbed definition of ‘over-allocation’ discussed in the section to follow.

8 A draft guide to limits

Over-allocationAfter limit setting the NPS requires councils to establish methods, including rules4, to avoid over-allocation.5 The direction to ‘avoid’ in this context is very strong. Over-allocation is defined in the NPS as the situation where the resource:

a) has been allocated to users beyond a limit; or

b) is being used to a point where a freshwater objective is no longer being met.

The first part of the definition refers to a situation where the combined effect of permitted activities, water permits and discharge permits is more than an established limit. If these permits continue to be exercised, and activities continue to be allowed through the permitted activities, the total use will exceed the limit, and the resource would be over-allocated.

For example, the allocation limit might be expressed as a proportion of a hydrological index such as 7-day mean annual low flow (MALF) or the flow exceeded 95 per cent of the time. So for locations within the catchment where the total upstream allocation exceeds the allocation limit (eg, 50 per cent of MALF) the catchment would be considered over-allocated. Modelling has shown that ‘over-allocation’ is influenced by where in the catchment water is taken from. The Ministry for the Environment has published a NIWA study titled Definition and calculation of freshwater quantity over-allocation (Booker 2016) which addresses this in detail.

The second part of the definition describes a situation where overuse of the resource prevents the achievement of water quality outcomes, regardless of whether a limit has been fully exercised. For example, an freshwater management unit (FMU) may be at 80 per cent of the full allocation quantum but monitoring shows the freshwater objective is not being met. In this case the limit should be reviewed and adjusted (allocation quantum reduced) so the objective can be met and over-allocation avoided.

Another example of the part b) of the definition is a situation where a clarity or ecological health objective is not being met in a river because there is too much sediment load going in. Essentially in this case land uses and activities that produce sediment are insufficiently constrained. This would be considered a situation where over-allocation is occurring; not because a sediment load was set and then accounting shows that too many sediment discharge rights were issued, but purely because the objective is not being achieved. The limits that might be allocated to fix this problem could include stock exclusion and retirement/replanting constraints on land use in certain areas.

Setting limits, therefore, is also about avoiding over-allocation by identifying and managing the cumulative effects that people’s resource use has on the state of fresh water. When the limit is reached, full allocation is said to have been reached and the plan must direct (through policies and rules) that resource consents for further allocation (resource use) will not be granted.

A key requirement for setting limits then is that they are quantifiable in some way, so it is possible to know when the limit threshold has been reached and no additional allocation (eg, consents) or use can occur (thereby avoiding over-allocation). Without a limit clearly set out in a plan, with methods (including rules) to achieve it, there is no clear signal or threshold which directs a consenting officer to decline an application for a consent and avoid over allocating the resource.

4 See section 4 and 6 for a discussion on the distinction between rules and methods5 In terms of both water quality (Objective A2(c), and Policy A1) and water quantity (Policies B5, and B6).

A draft guide to limits 9

Defining the ‘allocable quantum’ is a challenging aspect of limit setting. Nevertheless, if a way to ‘allocate’ (in a broad sense) is not established – it will not be possible to know when the maximum amount of resource use possible (limit) has been reached and so avoid over-allocation. Without the aspect of ‘allocation’ being addressed, in some way, the limit cannot be effective. (See also section 5: What limits could look like).

10 A draft guide to limits

3 The NPS definition of a limitWhile the word ‘limit’ is used in freshwater science and other disciplines, it has its own specific definition in the Freshwater NPS.

A limit is defined as “the maximum amount of resource use available, which allows a freshwater objective to be met.”6 There are three important elements of the definition which provide direction about what a limit should be. These are outlined below.

‘Maximum amount’A limit is intended to be a quantifiable, measurable amount. This allows it to be ‘allocated’ among users (at various scales). In that way, it is possible to know when the maximum allowable resource use has been reached, so additional use and further allocation should cease, thereby avoiding over-allocation.

That means the key part of the initial limit-setting process is establishing how much resource use already occurs (see guidance on freshwater accounting) and what more (if any) can occur while still meeting the freshwater objective.

Working out how to ensure that resource use stays within that limit (eg, through allocating to individual permits, or setting rules to control activities) is a separate step (see discussion below on methods).

‘Resource use available’A limit is intended to be directly about people’s use of resources, and specifically, restricting the amount of that resource use such that a particular environmental outcome or state is achieved or maintained.

‘Resource use’ can encompass different types of ‘use’. In the case of water quantity, the concept of resource use is relatively simple (ie, water takes (abstractions), dams, or diversions). In the case of water quality, the concept of resource use is potentially broader. Examples could include:

• the discharge of a contaminant (ie, the use of a water body’s assimilative capacity to absorb that contaminant)

• land use

• stocking rates

• restricting access to water for stock (ie, kilometres fenced or length of riparian margin planted).

6 Freshwater NPS interpretation section.

A draft guide to limits 11

A “limit is the maximum amount of resource use available, which allows a freshwater objective to be met.”

- NPS-FM definition

‘Allows a freshwater objective to be met’The key purpose of a limit is to make sure a freshwater objective is met (whether that freshwater objective is to maintain the current state or improve water quality over time). Therefore, for a limit to be successful there needs to be a relationship between the limit and the freshwater objective (ie, a relationship between the resource use being limited, and its effect on the state of the water).

Setting a freshwater objective involves identifying the current state of the attribute and deciding on the desired state for that attribute in the future. Establishing a limit involves identifying the resource use(s) that affects each attribute, quantifying that use and allocating it (through appropriate planning provisions) so the freshwater objective is met over time.

12 A draft guide to limits

4 NPS provisions on setting limitsThe objectives and policies which direct the setting of limits are; Policy A1, A2, A3 (quality) and Policy B1 (quantity).

Policy A1(a) – setting limits for water qualityPolicy A1(a) requires councils to establish freshwater objectives and then set limits for water quality in their regional plans. Then:

Policy A1(b) – Methods to avoid over allocationPolicy A1(b) requires councils to establish methods (including rules) to avoid over allocation. There has been some discussion amongst practitioners as to whether a limit is a method. The following may clarify the Freshwater NPS policy intent.

The NPS requires councils to set freshwater objectives and limits (Policy A1(a)), and then establish methods (including rules) to avoid over allocation (Policy A1 (b)). The NPS therefore considers these are two separate steps, and that there will be rules (which are methods) as well as other methods to achieve limits.

Policy A3 – conditions on discharge consentsPolicy A3 requires councils to impose conditions on discharge permits to ensure limits and targets specified in Policy A1 and A2 can be met.

Policy B1 – setting environmental flows/levelsPolicy B1 of the NPS requires councils to set environmental flows and/or levels for all freshwater management units. The NPS defines environmental flows and/or levels as a type of limit which describes the amount of water required to meet freshwater objectives, and must include an ‘allocation limit’ and a minimum flow/water level.

Avoiding over allocationThe objectives and policies in the NPS which refer to over-allocation are Objective A2 and Policy A1 for quality with Objective B2 and Policies B5, and B6 for quantity.

Quality

• The NPS Objective A2 relates to maintaining or improving water quality. It clarifies that where water bodies have been degraded by human activities to the point of being over- allocated they must be improved.

• Policy A1 contains the direction to establish freshwater objectives and limits, then establish methods (including rules) to avoid over-allocation.

A draft guide to limits 13

• Policy A2 requires targets (limits) to be established where freshwater objectives are not being met.

Quantity

• The NPS Objective B2 is to avoid any further over-allocation of fresh water and phase out existing over-allocation.

• Policy B5 requires councils to ensure that future decisions are not likely to lead to over-allocation through the ‘aggregate’ of all amounts of water authorised to be taken.

• Policy B6 directs councils to phase out over-allocation when it has occurred over a set timeframe and methods in a plan.

The use of the word ‘avoid’ in terms of over allocation for both water quality and quantity is a very strong directive and is used with the intent that there is no flexibility in regard to this.

Other Freshwater NPS terms relating to limitsA number of other terms in the Freshwater NPS are of specific relevance to limits, either because they are types of limits, or because they depend on limits having been set. These are explained below. In addition, a full range of definitions associated with the Freshwater NPS can be found in the main freshwater guide on the Ministry for the Environment websiteGuide to the National Policy Statement for Freshwater Management 2014.

Environmental flows/levelsThe NPS defines environmental flows and /or levels as a type of limit. Policy B1 of the NPS requires councils to set environmental flows and/or levels for all freshwater management units.

Establishing an environmental flow/level involves determining:

• the minimum flow/level and/or other flows/levels at which the taking of water will be restricted (partially) or prohibited (fully)

• an allocation limit – a limit on how much water can be taken.

This could be thought of as setting aside the volume of water needed to maintain environmental integrity and the compulsory value Ecosystem Health. In practice, an environmental flow/level regime is likely to involve a range of flows/levels and allocation limits. It could involve a series of flows/levels where different levels of restriction start to apply; for example, a minimum flow at which all taking must cease, and a series of additional flows at which taking is restricted by a certain percentage (becoming more stringent as they get closer to the minimum flow) or where taking is restricted to specified permit holders and eventually prohibited – both in terms of exercising an existing consent and the issuing of any new consents.

Further guidance on environmental flows can be found in the proposed NES on Ecological flows available on the Ministry website.

14 A draft guide to limits

TargetsPolicy A2 of the Freshwater NPS requires that where a freshwater objective is not being met, councils must specify targets in for water quality. A target is defined in the NPS as “a limit which must be met at a defined time in the future”, applying only “in the context of over-allocation” in relation to water quality.

This could mean setting a:

• single target in relation to resource use (ie, a single future date by when current resource use must be reduced down to the acceptable amount), or

• series of targets that become progressively more stringent (ie, a ‘sinking lid’) which provides for stepped reductions in resource use over time.

Freshwater accounting Setting limits is underpinned by the accounting provisions in the NPS. To set a limit, councils must first identify the current state of the water body and current resource use, and then determine how much more (or less) of that resource use can occur to achieve the freshwater objective. Once the limit is set, accounting should again be used to track how much of the resource is being used (paper allocation vs actual use), including how the allocated quantum increases over time through the continued issuing of consents/or resource use. Tracking resource use enables you to know when the threshold of the limit is reached and further allocation should cease (eg, when a stocking rate is reached) or current resource use should be reduced.

Accounting supports the management of fresh water by providing an understanding of how much resource there is to go around, and therefore:

• how much ‘headroom’ (if any) there is for further resource use, or

• where a resource is over-allocated, by how much to reduce use (ie, the limit).

A freshwater accounting system should collate information (from multiple sources) to:

• first establish the current state of water quality/quantity

• determine the current extent of resource use, and (once limits are set)

• establish what additional use is possible (headroom) or what reduction is required (ie, claw back in over allocated catchments)

• show (over time) when the limit threshold is being approached and then met, so further allocation can stop.

Accounting is intended to help councils work out the resource use capacity; followed by what resource use is already happening, and what further resource use could potentially occur (ie, new users) or reduced by how much (claw back).

It should also provide information over time on when to stop allocating to avoid over allocation. It can be thought of as a balance sheet.

Further guidance about freshwater accounting requirements can be found in A Guide to freshwater Accounting under the National Policy Statement for Freshwater Management 2014.

A draft guide to limits 15

5 What limits could look likeLimits must be established to achieve freshwater objectives. A limit is defined as the maximum amount of ‘resource use’ that is possible, while still achieving the freshwater objective over time.

Resource use is commonly discussed in terms of water takes and discharge of contaminants (assimilative capacity). However, a broader view of ‘resource use’ may be required to set limits for some attributes (and ‘allocate’ that use as discussed above).

Using the example of a periphyton freshwater objective, there are likely to be many factors which influence the presence of periphyton and whether the periphyton objective is met, including (but not limited to) nutrients, shading, flushing flows, and temperature. It may be possible to establish limits for some but not all of those factors on the basis of them being a result of resource use. Nutrient discharges are an obvious candidate for limit setting7, while flushing flows are not (unless perhaps the flow is controlled). But conceivably shading and temperature could be captured by a limit, if riparian margins and what is done with them is considered ‘use of a resource’.

A limit could potentially be a total allowable length of unfenced riparian margin, or a maximum stocking rate to meet an E. coli freshwater objective. For the fencing example, if stock access to water is thought of as a ‘use of the resource’, then by restricting that access we are imposing a ‘limit’ on stock access to rivers for drinking (to reduce faecal contamination). The limit might be expressed as ‘50 per cent of stream length in a catchment must be fenced’. Potentially, individual farmers could ‘trade’ fencing extents. Conversely a limit might be expressed as a prohibited activity with a zero allocation. For the stocking rate example, if grazing is the ‘resource use’ and a maximum stocking rate for the catchment is stipulated, that is a ‘limit’.

7 These are now expressly required to be managed by the ‘Note’ attached to the periphyton attribute.

16 A draft guide to limits

6 Limits in the regional planThe Resource Management Act 1991 (section 67) prescribes the content of regional plans. A regional plan must state:

• objectives

• polices to implement the objectives

• rules (if any) to implement the polices.

A regional plan may also state, methods (other than rules) for implementing the policies. Thus there may be additional methods (which are not rules) to implement policies.

When inserting the NPS values-freshwater objectives–limits-methods cascade into plan provisions it may be helpful to align it with RMA plan content as follows:

• Regional policy statement = values (ecosystem health/human health for recreation plus other values from Appendix 1 and any identified by the community).

• Plan objectives = freshwater objectives (expressed either as a range ie, Nitrate Toxicity annual median between >1.0 and ≤ 2.4 mg NO3-N/L; or a point ie, 1.5 mg NO3-N/L and often supported by a narrative).

• Policies = limits (expressed in numeric terms where possible) for both quantity and quality. For quantity this could be expressed through a policy allowing for takes of water up to 2.5L/s, with a maximum volume per day depending on property size. For quality the limit could be expressed as a series or sequence spanning, concentration (mg/m3) – load (t/yr) – (individual) nitrogen discharge allowance (eg, kg/ha/yr). Note that the nitrogen limit set in the plan for an FMU will be set at a point so all the attributes that require a limit on nitrogen would be met. Of all the nine attributes in Appendix 2, six are potentially affected by nitrogen (in some form). A limit should be set at the most stringent point required to collectively meet all the freshwater objectives which require limits for nitrogen. For example, the periphyton freshwater objective may well be the driver of the eventual limit on nutrient discharges in the plan as it will likely be much more stringent than that required to meet the Nitrate Toxicity and other freshwater objectives (Policy CA2(e)(iii)).

• Rules = rules (being a type of method), for example, might set the nitrogen discharge cap per catchment/property and clarify the point at which the activity status for a particular resource use (limit) would move from (eg, permitted/discretionary to restricted discretionary/non-complying/prohibited), to avoid over allocation.

• Methods = other methods (which are not rules) to manage to those limits ie, to avoid over allocation, such as good management practice, how initial allocation will be done (grand-fathering etc) and how claw back will be achieved over what time.

In practice, where the limit is expressed in the plan (ie, whether as a policy or a rule), is not important as long as it is accompanied by methods (and it will likely be a suite of methods) which make clear how much resource use is possible by a user, and at what point further allocation (additional consents), and use (current consents) should stop. It may be helpful to think of the limit as describing a quantum and methods as how resource use will stay within the quantum.

A draft guide to limits 17

7 Considerations in limit-setting

How to determine the appropriate limitLimits must be set so the freshwater objectives in the freshwater management unit are met, both for quality and quantity. This does not necessarily equate to one limit for each freshwater objective. There may be situations where a freshwater objective requires a range of limits to meet it, or one limit might meet several freshwater objectives (in this case, the most stringent limit would be selected to go in the plan, thereby achieving several objectives).

Generally speaking, each freshwater objective would likely to be met by a combination of a limit, rules (being a type of method) and other methods (which are not rules). In other words it may be a suite of both regulatory and non-regulatory methods which are needed to meet the limit.

Questions to consider when determining what the appropriate limit should be are:

• Do you have sufficient information on the current state for both quality and quantity?

• Have you already got freshwater objectives and limits in your plan? If so, are the freshwater objectives being met – how do you know? Are the limits expressed in such a way that allows them to be allocated to users and consents cease to be issued when the limit threshold is reached?

• Is it possible to quantify the maximum amount of resource available, the resource use that is currently taking place, and that could take place in the future?

• Is it possible to identify and quantify the many type(s) of resource use (eg, water abstraction, discharges, land use), including permitted, that would cumulatively effect whether or not the freshwater objective would be achieved?

• How will the resource be allocated (eg, through a formal allocation system, rules on activity status, or by some other method of determining how to spread the reduction in resource use between multiple users)?

• Is there a sufficient scientific basis to enable a maximum quantity to be calculated with evidence to link it to the objective being set? Or, is a precautionary approach being taken instead and the data gaps acknowledged?

• How will information gaps, uncertainty and imperfect information be acknowledged and dealt with (see also the guide to communicating and managing uncertainty when implementing the NPS.

• Has the community been made aware of the resulting effects of the limit? Is this something that the community is able and willing to accept?

• In setting the limit, how will provision for the environmental flow/level, security of supply for existing users, and allowing for new users be balanced?

• Is there a sufficient scientific basis for determining what effect a change in ‘levers’ would have on reducing the total amount of resource use?

• Is a limit the only incentive (or disincentive) to drive the type of behaviour change necessary to meet the freshwater objective?

18 A draft guide to monitoring

Limit setting is the step in the national objectives framework where planning decisions begin to directly impact resource users. It is therefore the most challenging and potentially controversial step in the values–freshwater objective–limits setting cascade.

In limit setting there will be a relationship between the freshwater objective (eg, the attribute E. coli) and the ‘limit’ (available resource use while still meeting the freshwater objective eg, stocking rate). This may be more direct for some attribute/limit combinations than others. For example, the nitrogen toxicity attribute will require a limit on nitrogen inputs. For other attributes, establishing what resource use to ‘limit’ to achieve the freshwater objective might not be so direct. The example of using stocking rates to address E. coli illustrates this.

Once the limit is set, resource users may also demand a verifiable correlation between where the freshwater objective is set (eg, B-state) and the likelihood of the set limit to achieve that outcome. However, the efficacy of the limit imposed to achieve the freshwater objective will often be unknown. For example, the amount of E. coli discharged can only be assessed in very approximate terms at the catchment scale. Changes in that loading in response to mitigations or changes in land management cannot currently be accurately predicted nor is it possible to accurately determine the proportion of E. coli contributed by individual properties. Meeting an E. coli freshwater objective by setting a limit which deals with the length of fenced stream in a catchment is therefore unlikely to be supported by verifiable evidence. This means the degree of confidence in the prescribed limits to meet the objective may be low and the concept of ‘precaution’ and adaptive management may need to be employed to justify the limit (and where it is set) if challenged.

To a greater or lesser extent this will be the case for all limit setting. The model OVERSEER® is used to set nutrient limits but has its critics as to the efficacy of its outputs and the use of those in regulatory settings. At present however, it is generally accepted as the best tool available.

It is acknowledged that there will be a degree of uncertainty in limit setting but this should not be used a reason not to proceed. It is expected that limit setting will be an iterative process and will necessarily proceed on an adaptive management basis.

Similarly, it is likely that there will be multiple factors affecting whether or not the freshwater objective can be achieved; limits will address some factors while others may require additional methods (ie, non-regulatory such as good management practice).

Final decision-making on limitsLimit setting is highly technical, and the information needed to inform this decision will involve analysis provided by experts – including; scientists, planners and consenting officers. However, the limit that eventually goes into the plan is one that, following community input, will be chosen by people with a mandate to make planning decisions (eg, collaborative groups and hearing panels, councillors or co-governance boards). Figure 4 illustrates this concept and the roles each actor has.

Figure 4: Iterative decision-making process of limit setting

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The questions highlighted in figure 4 are likely to be iterative. There may be a single freshwater objective that is largely agreed upon, or a community may want to explore the impact of an aspirational freshwater objective (eg, to see what limits would be required to reach the ‘A’ state versus the ‘B’ state). These questions may arise in relation to multiple freshwater objectives. As such there may be multiple types of limits or methods being considered.

There will also need to be consideration of the different ‘levers’ to achieve desired economic and environmental outcomes. At a very general level, there are three basic settings that will need to be balanced, depending on the desired outcome. These are:

• environmental flow or aquifer level(s)

• an allocation limit (quantum)

• flow level restrictions regime (ie, what level of security of supply is provided for users).

These settings will influence each other. For instance, flow restrictions and the allocation limit should protect the environmental flow. Where that environmental flow is set determines the availability of the other levers. It follows that for a given environmental flow, a council could trade off additional allocation to new users for security of supply for existing users or vice versa.

Therefore, while limits will be based on and underpinned by science, the final decision on the limit that goes in the plan will also involve a value judgement. This decision-making should be transparent and explored with the community.

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