For Sale: Tukituki water

Unbeknown to most of the public, water rights are now commonly sold in Hawke’s Bay, in effect putting a price tag on the region’s water.

What’s the water worth? Only the parties involved in these commercial transactions know … no public reporting of prices paid is required. In fact, there’s no regulatory oversight of the commercial aspects of these transactions whatsoever.

In effect, a private market for water rights is slowly taking shape in Hawke’s Bay. Typical of the deals is the recent soliciting of tenders for water rights now held by the Skagen Trust. This Trust holds a resource consent entitling it to take up to a maximum of 1,300 cubic metres in any seven-day period from the Makaretu Stream, which feeds into the Tukituki well up the river.

Lawyers for the Trust sent solicitations for tenders for these rights to existing water rights holders within the Tukituki catchment. For example, a rights holder far downstream along the Tukituki received the overture.

The Regional Council only becomes aware of completed deals because the new rights holder must seek a fresh consent to make appropriate use of the water. At that point, the Council must review the new use and can place conditions in granting the new consent. No public notification of such transactions — neither the sale nor the issuance of the new consent — is required.

The Regional Council says that about ten water rights transfers have occurred in each of the last two years, and the number seems to be rising.

It seems to me that a variety of public interests are affected by these hidden — but, I stress, perfectly legal — transactions.

First is the very notion of “pricing” water, which some oppose on philosophical grounds. In effect, a private party, the rights holder, is reaping financial gain from a “commodity” (and even use of that term is controversial) of high public value for which the rights holder is, arguably, a temporary custodian. It might be more appropriate for unwanted rights to revert to the public (i.e., the Regional Council), just as unused rights currently can be reclaimed.

Second, who should be entitled to participate in water transfer transactions? Right now, that decision is left entirely to the seller. But what if someone — not a rights holder — had an interest in securing rights specifically to conserve or “bank” the water? What if there was some public interest to be served by encouraging one new use/user over another? And how, if not notified, are Maori consultative and substantive rights met before these transactions occur?

Third, what does the Council really know about the actual water use of the seller or buyer? A recent independent report on the Regional Council’s water stewardship, prepared by the National Institute of Water & Atmospheric Research (Niwa, see footnote), criticised the HBRC for, among other things, knowing too little about the amount of water actually withdrawn in the Tukituki catchment.

New consent holders must install meters to measure and report actual water extractions to the HBRC; however, the current rights holder might or might not have metering. In a policy initiated about eighteen months ago, meters are only beginning to be required as consents are renewed. In any commercial transaction, rights could be transferring from a low (or non-) user to a high actual user, with a different and significant impact on river ecology. Or, rights could be sold to an up-stream water buyer, where the right to extract was based upon lower river flows than those required at the current rights holder’s location — here again, the HBRC could be flying blind, not knowing actual usage by either buyer or seller.

All in all, with prudent stewardship of our most precious natural asset at stake, it seems reasonable for water transfers in Hawke’s Bay be conducted in full public view, as they are in Australia. There, water rights are sold like corporate shares or other traded commodities, with immediate online reporting.

Why not complete transparency here in Hawke’s Bay?

Tom Belford

P.S. As reported here by Marty Sharpe in the Dom Post (31/3/09), Niwa’s report chastised the Regional Council’s management of the Tukituki, commenting on HBRC’s lack of action on high nutrient levels in the river, its information gaps re actual water takes, and the need for more monitoring sites and more data on recreational use between the Waipukurau/Waipawa oxidation ponds and Haumoana.