Nick Smith has a message from China where he has recently been. China has 20 per cent of the global population, eight per cent of the arable land and 2 per cent of the water. New Zealand is No 2 for water quality and No 3 in water per person after land-poor Iceland and Norway.
Add to those statistics a recent study by the Asia Society which suggests China is set to make $US1000 billion of direct investments in foreign productive assets this decade.
So expect intense Chinese interest in our water — and for the product of that water and the producers of those products. Crafar Farms and PGG Wrightson are just the beginning.
That adds an international dimension to the government’s revision of water policy. Smith is due to announce some first steps today.
Water is a serious problem in China. Illegal wells are sucking the aquifers dry in the north and rivers run nearly dry and polluted. Because water is a major ingredient not just in food production but in industrial goods, that has implications for China’s breakneck industrialisation.
International competition for water could cause tensions. China is diverting for its own use the flows of rivers running south across its borders into India and south-east Asia.
Smith looks on the bright side: abundant water here opens export opportunities, especially in China.
Others see threat, that China will want not just the goods but the supply chains and will have investment muscle and bilateral political leverage.
Future governments may find themselves perched on delicate, perhaps teetering, balancing acts between preserving some economic sovereignty (whatever that is in today’s global economy of complex interdependencies) and keeping the northern trading giant sweet.
China’s interest is one element of this country’s likely growing attraction generally to foreigners as a fresh/safe/natural haven in a crowded, edgy and polluted world.
That adds piquancy to two policy and trading imperatives.
One is to live up to the fresh/safe/natural image. Smith’s numbers: one-third of our lakes and one-fifth of rivers are in trouble, some seriously, and the government is spending more than $300 million cleaning them up. A positive spinoff is the potential to export the clean-up techniques learned from dealing with the Rotorua lakes. China is interested.
The second is inefficient management. Even though water is abundant, the limits have been reached in some areas and underground aquifers are being plundered. Some regional councils, the water regulators, are tangled in the law and/or town-country standoffs and/or capture by the users.
Hence Smith’s experiment in mandating the Land and Water Forum of 58 interest groups ranging from Federated Farmers to the Environmental Defence Society to agree foundations for policy reform. The forum reported last September, took its report round the country and reported on that last month with a rider that action is urgently needed.
It ducked the two hardest issues, putting up a range of options for allocation and pricing of water — regional councils issue water rights on a first-in-first-served basis — and transfer or trading of water rights.
Smith is likely to send these issues back to the forum for resolution post-election, with legislation to follow. If the forum falls at that hurdle, it will be back to political decision-making, at risk of reversal when governments change.
One positive pointer is that the “collaborative” process the forum developed has been adapted to resolve stubborn standoffs over the Manawatu river, the Rotorua lakes and the proposal to fill the arid high-country Mackenzie basin with cows.
Meantime, Smith does want stronger national rules on and input into decisions on water. Today he is likely to issue a national policy statement which will give regional councils much firmer guidance. The forum put up amendments and said it needs to be backed with mandatory environmental standards, with limits and targets.
The forum also wanted a national land and water commission to develop and oversee a national strategy. Smith seems unwilling to go that far yet. But he is sympathetic to a separate authority to manage Canterbury’s water. His Environmental Protection Authority will inject a national overview into the environmental effects side. He called in the Mackenzie dairy proposal. The Waikato River is governed by a special Crown-iwi authority.
Smith is also likely today to push on with a clean-up fund and action on water storage.
Storage is about using available river flows more effectively and that way preserving underground aquifers which, once plundered, take many years and in some cases decades to replenish.
The government’s likely solution: a Crown company like that for ultra-fast broadband fibre-laying, capitalised from the proceeds of selldowns of state-owned enterprises and operating in public-private partnerships to get projects under way and then sell them on to farmers.
Now where does China fit in that?