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Proposed draft National Environmental Standards for Freshwater (NES-FW) were among the many components of the New Zealand Government¡¯s September 2019 announcements regarding Three Waters policy reforms. Along with the new National Policy Statement for Freshwater Management (NPS-FM),?which we profiled in our previous blog post, the NES-FW are scheduled to be finalised in late 2019/early 2020, with implementation beginning as early as June 2020. The current consultation process¡ªwhich closes on 31 October 2019¡ªrepresents the best opportunity to have your say on these significant regulatory changes.

The proposed NES-FW will be an addition to the six existing National Environmental Standards issued under the Resource Management Act 1991, none of which currently focus on the protection of aquatic ecosystems or the reduction of risks to human health associated with food gathering and contact recreation in contaminated freshwater bodies. In New Zealand, National Environmental Standards are used as regulatory instruments to control specific land use activities that may have an adverse effect on the natural environment. They are used to determine whether activities might require consent (approval from local or regional councils) to proceed, and the level of restriction facilitated by that consent when issued. The NES-FW will provide a nationally consistent set of rules to facilitate the implementation of some parts of the NPS-FM.

Concerned citizens and professionals alike have been advocating for decades to establish targeted controls that protect New Zealand¡¯s abundant freshwater resources for future generations. The implementation of the NES-FW will be a significant milestone.

The proposed NES-FW have a strong focus on the management of wetlands and watercourses, as well as reducing the impacts of agricultural activities on New Zealand's lakes, rivers, and streams. Aspects focusing on the impacts of urban activities on freshwater resources are present, but limited. We would expect to see further refinement of the draft NES-FW once the current public consultation process is completed.

Wetlands

The NES-FW would establish controls on a number of activities in the proximity of ¡®natural¡¯ wetlands and require consents for the destruction of indigenous vegetation and earthworks within 10 metres of a natural wetland. This would also apply for drainage activities within 100 metres of a natural wetland, and the taking of water from a natural wetland. Direct drainage of natural wetlands would become a prohibited activity.

Natural wetlands are already defined by the RMA and the NES-FW reflect that definition (including coastal wetlands), but specifically exclude constructed wetlands, geothermal wetlands, wet pasture, paddocks prone to temporary ponding, or where exotic wetland vegetation such as sedges or rushes are present in paddocks. It is proposed that constructed wetlands will be defined as wetlands constructed artificially for a specific purpose (where a wetland would not naturally exist). They support ecosystems of plants that are suited to wet conditions.

The NES-FW outline standard consent conditions in relation to wetlands, as well as for nationally significant infrastructure projects offsetting to achieve net gain for residual adverse effects on wetlands arising from the activity.

Standard wetland monitoring obligations are to be included in any consents granted under the NES-FW, including a requirement to report annually on wetland condition to the consent authority. Notably, the NES-FW places responsibility for fulfilling these obligations on ¡®the person undertaking the activity¡¯ (i.e. a person with designated responsibility for an activity and any effects that may occur as a result of that activity).

The consenting requirements of the NES-FW are targeted at activities that would degrade natural wetlands, such as development of infrastructure within (or partially within) wetlands, and any discharges to wetlands which may have adverse effects on its ecosystem. For example, a water take would be a discretionary activity if it is for the purpose of restoring the natural wetland to its natural hydrological state.

River-bed infilling

Filling in the bed of a river (Note: The definition of a ¡®river¡¯ in the Resource Management Act 1991 includes streams) will require a resource consent. Generally, the activity will be classified as non-complying unless :

• It is for the purpose of restoring natural values
• Filling in the river-bed absolutely cannot be avoided for the activity to take place
• The activity is for certain specified public works

Fish passage

The recently released New Zealand Fish Passage Guidelines (2018) will be used to regulate all new structures potentially impacting on fish passage, such as culverts and weirs. Regional councils will be required to develop work programmes to demonstrate the extent to which existing structures will be improved, in order to meet regional objectives. The guidelines have already been released by the Department of Conservation so it is unlikely these requirements will be changed as part of the current consultation process. We would suggest familiarising with both the guidelines and NES-FW as these will apply going forward.

Farming

Restricting the intensification of ¡®high-risk activities¡¯, such as dairy support or intensive dairy farming, are a major focus of the NES-FW. The 2019 State of the Environment report issued by the Ministry for the Environment highlighted how the proportion of irrigated agricultural land had increased by 94% between 2002 and 2017. Most of this expansion was focused in Canterbury and Otago, where several large irrigation schemes have been established. Likewise, the conversion of arable farming systems (e.g. sheep and beef) to dairy has seen a 70% increase in the number of dairy cattle nationally between 1994 and 2017 while the sheep population (for which New Zealand has infamously been known) decreased by 44% during the same period.

The NES-FW focus on changes in land use on pastoral and arable farms larger than 20 hectares, and horticultural farms larger than 5 hectares. Land use changes (such as increasing the area of land used for vegetable production) will be assessed in the context of land use across a freshwater management unit (FMU). In essence, decisions regarding whether consent is required (and the level of restriction to be imposed via any consent) will be determined by cumulative impacts rather than assessing individual applications in isolation.

The intensification requirements (mainly contained in Part 3 Subpart 2 of the NES-FW) would only apply in FMUs where the NPS-FM has not been fully implemented (includes definitions for the requirements for ¡°fully implemented¡±). At this point it has not been confirmed whether these rules would apply across entire FMUs or only within certain sub-catchments.

Any consents issued for the purposes of Subpart 2 would be issued with an expiry on 31 December 2030 (maximum 10-year term, from 2020). After that, any consents issued under this subpart will have a maximum term of one year. We assume that then, once councils have fully implemented the NPSFM, there will no longer be a need for consents to restrict intensification.

Subpart 2 could potentially constrain the application of treated municipal wastewater to productive land, should such activities become more prevalent in the future. This would be an unintended consequence of the NES-FW. As an example, if a farmer wanted to increase the area of land used for irrigation production, under Subpart 2 they would first have to establish an OVERSEER? model for the 2017/18 farming year (if not already available). Then they would need to look at whether the proposed change would cause nutrients, sediment, or microbial pathogen discharges from their farming activity to be elevated above what was recorded in their OVERSEER? model output for the 2017/18 farming year. If contaminants would be increased, then the activity would likely be assessed as discretionary under the proposed Subpart 2 rules. A consent would be required.

We anticipate that farms that irrigate with treated municipal wastewater (plus farm effluent application or other nutrient losses on the property) may not be able to comply with this requirement. We note that many regional plans already include policies with clear preferences for discharging to land rather than freshwater environments. If a National Policy Statement for managing highly productive land is developed in the future¡ªalong with the implementation of the proposed NESFW in its current form¡ªthis could also further compound the situation.

Part 3 Subpart 3¡ªrequirements for a freshwater module of farm plans (FW-FP).

Every farm (to which the NES-FW applies) must have a freshwater module within their certified Farm Plans (FW-FP) by 31 December 2025. The timeframe will be shorter (within two years of gazettal of the NES-FW) for farms within catchments listed in Schedule 1, or on highly erodible land within the Kaipara catchment. Schedule 1 catchments are located within regions with dominant agricultural land use, including Northland, Waikato, Hawke¡¯s Bay, Bay of Plenty, Taranaki, Wellington, Tasman and Southland.

FW-FPs will need to be certified by a farm environment planner approved by the Minister for the Environment and the Minister of Agriculture. They will also need to be audited every two years. The introduction of these requirements suggests that the government intends to regulate the farm advisory industry more tightly and keep a register of approved providers. However, the details of such a regulatory system have not yet been published. As part of the current consultation process, they are seeking feedback on how the costs of preparing farm plans could best be met.

The NES-FW builds upon the solid foundation established by the Land and Water Forum engagement and evidence-building leading up to the 2017 NPSFM amendments. As in the past, the proposed regulations for livestock management (such as fencing, stock rotation, and intensification) are focused on bringing the very small proportion of remaining dairy farms with unfenced watercourses up to the standard set by the majority of that industry, and beginning to regulate other farming systems such as sheep, beef, deer, and pig farms. For dairy farmers who have been signed up to policies implemented by agricultural sector groups like Dairy New Zealand over the past 20 years, these changes will not likely represent a major shift in farming practice. However, those farmers who had been considering conversion to more intensive land uses identified as ¡®high risk¡¯ under the proposed NES-FW may now be facing significant restrictions.

Proposed national regulations for the exclusion of livestock from freshwater bodies

In alignment with the NES-FW, the government has also??governing the exclusion of livestock from freshwater bodies, under Section 360 of the RMA. These regulations would target larger waterbodies at a national scale and tie-in with actions to be implemented via farm plans (FW-FPs) for smaller streams.

• All cattle, deer, and pigs (non-housed) on farms with watercourses wider than one metre shall be excluded from those watercourses by fencing, with a minimum five-metre setback from stream banks, by 2035. This includes a requirement for existing fences to be moved within this timeframe.
• Fencing requirements have been proposed for both ¡®low-slope¡¯ and ¡®non-low slope¡¯ farms (slopes are quantitatively defined in the draft regulations, and land managers will be able to check their slope class using an online NES-FW mapping tool), and will apply to both natural wetlands and any rivers wider than one metre.
• Any new farm systems (all cattle, non-housed pigs, and deer) will be required to fence water bodies immediately, if established after gazettal of the regulations.
• The highest priority for existing farm systems is for dairy cattle (not dairy support) and non-housed pigs to be excluded from these water bodies by 01 July 2021.
• Other livestock (dairy support, beef cattle, deer) will be excluded by 2023.

The work required to prepare for and implement the NES-FW will be most significant at farm or catchment scale, such as fencing, setting a baseline model in Overseer (using the 2017/18 year, which many farmers may not have established yet), creating or updating farm environment plans, and monitoring nutrient losses. When the outputs from this work are aggregated, regional council monitoring and compliance teams can expect to face a significant additional workload. This will be particularly noticeable in those regions dominated by intensive agricultural activities such as Canterbury, Waikato, and Southland.

The impact of these policies on existing water quantity, quality allocations, and nutrient allocation schemes is not detailed in the government proposals. However, we expect that this is one topic which will receive a high degree of scrutiny over the next few months as the government moves to reach agreement with key stakeholders on the NES-FW before mid-2020.