Variation 1 of the proposed Land & Water Regional Plan

On 22 February 2014 ECan notified it’s first variation (change) to the proposed Land and Water Regional Plan (pLWRP).

Variation 1 primarily applies to the Selwyn – Waihora Zone, the area between the Waimakariri and Rakaia Rivers, and the foothills and the sea.

Of interest to HydroTrader readers will be Rule 11.5.37 which, if made operative in it’s current form, will prohibit the following groundwater transfers in the Rakaia-Selwyn and Selwyn-Waimakariri Groundwater Zones:

  • transfers where 50% of the volume of water being transferred is not surrendered (even for temporary transfers!);
  • transfers from below State Highway 1 to above; and
  • transfers from shareholders within an irrigation scheme command area [such as Central Plains Water] outlined in the plan.

However this proposed plan is open to submissions, so the final version may change before it becomes operative, possibly by the end of this year, but more likely in early 2015. Until this time Rule 11.5.37 will be given some ‘weight’ (regard) when deciding transfer applications, while most weight will be given to Rule 5.133 in the pLWRP as amended by decisions and notified on 18 January 2014.

Readers may remember that when the pLWRP was originally notified back in August 2012 it had a rule requiring the surrender of fixed percentages of transferred water depending on where the water was being transferred from and to (such as 25% for a groundwater permit being transferred downplains). HydroTrader submitted against this rule, claiming that it was illegal to effectively take back some of the allocation originally granted to the permit holder, rather than simply imposing additional conditions to address any adverse effects, such as an annual volume.

The hearing panel (which included an Environment Court judge) used up five pages of their 91 page decision to refute the comprehensive argument put to them on behalf of HydroTrader by Hans van der Wal (Special Counsel at Duncan Cotterill). Nevertheless, they amended the draft rule (now Rule 5.133) to make the amount of transferred water to be surrendered a matter of discretion, to be considered on a case-by-case basis.

HydroTrader will refine this argument in a submission on Variation 1, although we accept that those seeking to transfer water permits in the interim will need to surrender at least some of their allocation in consultation with ECan, given that this is what Rule 5.133 in the nearly operative pLWRP requires.

Interestingly, when ECan notified Variation 1 they also just released a study that considers how long it would take Rule 11.5.37 to address the claimed over-allocation in the Rakaia-Selwyn and Selwyn-Waimakariri Groundwater Zones. The answer is 74 years in the former zone, and approximately 15 years in the latter.

However this assumes that transfers will continue at the same rate as before the pLWRP was notified in August 2012, introducing rules which largely prevent farmers from intensifying in much of the region (increasing the reliability of supply by buying in more annual volume is usually okay). Since this date the number of transfer deals brokered by HydroTrader has plummeted.

Clearly the new restrictions imposed by the pLWRP on intensification have put farmers off trading in a big way, significantly undermining the purported reasons for the rule.

It’s also worth remembering that one of the reasons that the Rakaia-Selwyn and Selwyn-Waimakariri Groundwater Zones are so ‘over-allocated’ is because ECan have consistently refused to increase the limits to include the groundwater permits with ‘adaptive management’ conditions, despite the fact that these takes will have less effect on groundwater levels and stream flows than takes without such conditions.

Despite our opposition to the proposed restrictions on permit transfers, HydroTrader does support the phasing out of over-allocation, which is a requirement of the National Policy Statement for Freshwater Management 2011. However clamping down on trading is the least effective way to do this, compared with:

  1. correcting errors in ECan’s Consents database;
  2. reviewing water permits and applying a reasonable annual volume; and
  3. reviewing and replacing water permits and revising the annual volume in line with at least 10 years of water use records.

Finally, here is our advice for prospective water permit traders:

  • don’t be put off, as trading can still occur;
  • commision an Overseer assessment (a computer programme for modelling nutrient use on farm) of any proposed changes to your current practice, and see if you can comply with ECan’s land use rules for farming; and
  • be willing to surrender some of the water being transferred.

If you have any questions about Variation 1, feel free to give us a call, even if you’re not planning to trade a water allocation, as it is likely to have a significant effect on your farming through the nutrient management rules.

If you would like to make your own submission on Variation 1 you can either do this on-line, or by downloading a copy of the submission form, from ECan’s website.

SUCCESS FEE REDUCTION

After reducing our success fee for January, HydroTrader will now extend this offer from the date this newsletter is released, until the end of July 2014.

So our fee will again drop from 4.95 to 3% of the value of the trade, except where this is less than $2,900 (+GST), which is the minimum charged.

ALLOCATIONS FOR SALE

There are still allocations for sale in most of the major groundwater zones in Canterbury. These are all listed under “Permits to Trade” on the home page of our website or simply contact us via phone (0508 HYDROTRADER) or e-mail ( ) to find out what we have available.

QUESTIONS?

If you have any questions about any of the news items above, make contact with us as follows:
Dr Anthony Davoren – Managing Director (027) 4336-552
Gus Walkden – Finance and Marketing Manager (021) 555-985
Warwick Pascoe – Technical Director (027) 358-6378

HydroTrader Ltd
PO Box 3132
Christchurch 8140
0508 HYDROTRADER (0508 493768)
www.hydrotrader.co.nz