Politics

Bottled water royalty plans on ice

A formal government pledge to charge for bottled water exports has fallen short - but one group says it was never going to address the real problems related to water use in New Zealand, Sam Sachdeva reports

A coalition commitment to implement a royalty on bottled water exports is officially dead in the water, with complexities around ownership rights and free trade agreements blamed for the failure.

The Labour-New Zealand First coalition agreement included a promise to “introduce a royalty on exports of bottled water”, sparked in part by nationwide protests about the issue in the run-up to the 2017 election.

The Government’s plans hit an early roadblock, with senior trade official Vangelis Vitalis warning in November 2017 that such an export charge would fall foul of New Zealand’s existing free trade commitments.

Work on the policy continued, albeit with slow progress - although New Zealand First leader Winston Peters said in mid-2018, when asked whether an export royalty would still be imposed in the parliamentary term: “I think I can confidently say, this year.”

Two years later, Peters’ confidence has proved misplaced, with the Government conceding the policy will not go ahead before the election.

Speaking to Parliament’s environment committee recently, Environment Minister David Parker said the royalty proposal had been “complicated by wider issues of water pricing”.

“Do you proceed with that in the absence of a wider vision for water pricing? If you do, do you create a precedent that’s wrong? Do you trigger the difficulties in the Crown-Māori relationship in relation to claimed Māori rights and interests in water?”

Parker said the Government had approached the issue “somewhat more indirectly” through changes to the Overseas Investment Act, allowing water bottling to be taken into account as a relevant factor for the acquisition of sensitive land by overseas buyers.

Environment Minister David Parker says broader complications around water pricing have put paid to plans of a royalty on bottled water exports. Photo: Lynn Grieveson

However, the new criteria only apply to future water bottling operations, and only for land that is already designated as sensitive.

The Ministry for the Environment told Newsroom Parker had taken a paper to Cabinet on the matter of bottled water exports, and "while no decision was made on the royalty at the time, Cabinet noted related work on the review of the Overseas Investment Act 2005".

National Party environment spokesman Scott Simpson said his party opposed the concept of an export royalty, and was not surprised the Government had failed to deliver on its promise.

“It was always going to be a very big hurdle for them to get over, not so much because of the complicated coalition politics, but simply because the whole concept of putting a price on water opens up a hornet's nest of other issues that I don't think they fully considered when they made the election promise three years ago.”

Simpson said new National leader Todd Muller ranked environmental issues highly and saw water as a “strategic asset” which had to be protected, a topic which he would discuss further in the coming weeks.

One possible approach to bottled water exports, raised by senior MP Gerry Brownlee but which had not yet gone through National’s formal caucus processes, was to require the purchase of a state-approved sticker to export a product, as was required for Cuban cigars.

But Aotearoa Water Action co-convenor Niki Gladding, whose group has challenged water bottling consents through the courts, said the coalition policy had been more about addressing public outrage at the time than getting to the root of the problem. 

“Land’s private property, water is a common, so it should be much easier to do it for water, but it all comes down to the issue around Māori rights, and they do not want to address that, and because they're not addressing it, our water is suffering.”

“It sounds great to get money for your water, but that doesn't help when you can't take water or you can't get clean water or when your community water supplier has got to treat it to the nth degree so that you can drink it and it's costing you in the pocket.”

Gladding said the group was not upset that the plans had fallen over, as they could have created a perverse incentive for authorities to grant the water bottling consents through associated revenue streams.

She believed local councils should be “zoning” water for different uses as they did for land, protecting particular sources for domestic use where necessary.

“Land’s private property, water is a common, so it should be much easier to do it for water, but it all comes down to the issue around Māori rights, and they do not want to address that, and because they're not addressing it, our water is suffering.”

Gladding, a Queenstown Lakes District councillor, said her council had put forward a remit for Local Government NZ’s AGM in August which would require the organisation to work with central government on a moratorium on bottled water consents while an assessment of the potential effects of the current industry, its future growth, and any necessary legislative changes took place.

Regional councils would also be asked to review inactive water bottling consents, with a view to withdrawing them.

New Zealand First deputy leader Fletcher Tabuteau says his party remains committed to tackling bottled water exports. Photo: Lynn Grieveson

New Zealand First deputy leader Fletcher Tabuteau said the policy was “certainly not off the books” and would be revisited if the current coalition was returned to power after the election.

“It’s disappointing in terms of timing, but it's still a commitment - we still see this is a kind of a basic issue from New Zealand First that needs to be addressed.”

While he had some sympathy for Parker’s concerns about free trade agreements, Tabuteau said a large proportion of bottled water exports went to nations with which New Zealand did not have an FTA (such as the United States).

“Also, our FTAs have these exclusions on export duties, so that brings us to the fundamental question of well, what about all bottled water for domestic consumption as well? So there's still ways forward.”

He did not believe that the issue of Māori ownership rights would need to be resolved before any royalty scheme could be implemented, but acknowledged the complexities of the area.

“How do we send the signal to the rest of the world that actually, we don't want you to just come in and tap into our reservoirs, our beautiful pure water and take it away and make lots of money on it?”

Tabuteau defended the coalition’s progress on water allocation and use more generally, saying it had developed greater clarity around priority usage.

As under-secretary to the Regional Economic Development Minister Shane Jones, he had overseen work to map aquifers in areas like Hawke’s Bay so councils and local authorities could better understand the resources at their disposal.

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