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Annual Report for the year ended 30 June 2013
Presented to the House of Representatives pursuant to section 44(1) of the Public Finance Act 1989 and section 23 of the Environment Act 1986 Parliamentary Commissioner for the Environment Te Kaitiaki Taiao a Te Whare Pˉaremata
The Rt Hon David Carter Speaker House of Representatives Parliament Buildings WELLINGTON
Mr Speaker In accordance with section 23 of the Environment Act 1986, I am pleased to submit my Annual Report for the year ended 30 June 2013.
Yours faithfully
Dr Jan Wright Parliamentary Commissioner for the Environment Contents
1 Overview 3
2 My Role 5 1
2.1 About us 5 2.2 Legal functions 6 2.2 Our mission statement and values 7
3 Reports, advice and other activities 9
3.1 Investigations 10 3.2 Advice 16 3.3 Other activities 19 3.4 Ongiong and future work 20
4 The office 23
4.1 Training and development 23 4.2 Organisational health 23
5 Financial statements and statement of service performance 25
5.1 Statement of responsibility 25 5.2 Independent Auditor’s Report 26 5.3 Statement of objectives and service performance 29 5.4 Statement of comprehensive income for the year ended 30 June 2013 33 5.5 Statement of financial position as at 30 June 2013 34 5.6 Statement of changes in taxpayers’ funds for the year ended 30 June 2013 34 5.7 Statement of cash flows for the year ended 30 June 2013 35 5.8 Statement of commitments 36 5.9 Statement of contingent liabilities and contingent assets 36 5.10 Statement of departmental expenses and capital expenditure against appropriations 37 5.11 Statement of departmental unappropriated expenditure and capital expenditure 38 5.12 Notes to the financial statements 39
Appendix - Update Reports 53 2 1 Commissioner'sOverview overview
This year has proved to be another busy one. As environment issues are becoming ever more complex, so the work of my office becomes increasingly complicated – there are no easy answers. Environmental problems are multifaceted, with many interconnected relationships. But it is a privilege to be able to provide independent advice and information on such difficult matters to Members of Parliament, as well as the general public.
Work during the past year has ranged across a wide variety of topics, with investigations completed on solar water heating, hydraulic fracturing (fracking) and the state of the longfin eel population. I found the solar water heating investigation particularly interesting as it drew on my previous experience in energy. The fracking investigation was undertaken in response to requests from a variety of people, and the subject proved so extensive that a second report became necessary. The longfin eel is found nowhere else in the world, and I was especially pleased with the rapid response to my concerns about this extraordinary creature from Ministers.
Looking forward, an investigation into the effects on water quality from land use change is nearing completion and work is progressing on the final report on fracking. The proposed amendments to the Resource Management Act will also continue to be a focus of work.
As this Annual Report was being prepared, a major step forward on an environmental reporting framework for New Zealand has been announced by the Minister for the Environment. The new proposal would involve the preparation of a national state of the environment report every three years by the Ministry for the Environment and the Government Statistician, with the Parliamentary Commissioner producing an independent commentary. It is good to see progress in this area, and I am currently seeking more detail. Chapter 1 – Overview
This annual report is a little different from usual. Annual reports do not usually make for gripping reading, so we thought we would experiment with writing one this year in a more personal, less formal style. Hopefully, that has made it more interesting and more readable.
4
Dr Jan Wright Parliamentary Commissioner for the Environment 2 ReportsAboutMy role the and Commissioner advice for the Environment
The position of the Parliamentary Commissioner for the Environment was established by the Environment Act 1986 to provide Members of Parliament with independent, high quality advice about environmental matters. When the role was established, words such as “watchdog”, “environmental auditor”, “Parliament’s person”, and “without fear or favour” were used by Members of Parliament to describe the role of the Commissioner. These terms are still relevant today.
As an independent Officer of Parliament, I report to Parliament as a whole, not to a government minister. This is very different from other environmental agencies such as the Ministry for the Environment and the Environmental Protection Authority who both report to, and have their budgets set by a government minister. I therefore have a unique opportunity to provide Parliament with independent advice on any matters that may have an impact on the quality of the environment.
Communicating that advice to the wider public is also important which is why I endeavour to ensure that my work is clear and concise, and easy to read. Many environmental issues are not straightforward. A wide range of environmental issues, some more contentious than others, are traversed in this Annual Report.
2.1 About us
My office is based in Wellington over the road from Parliament and I have about twenty staff who make carrying out my role possible. Between us, we have a wide range of skills and knowledge.
I grew up in Christchurch and studied physics at the University of Canterbury. After moving to Auckland, I taught high school students in Otara for several years. After the energy crisis in the 1970s, I became interested in energy. This led to a Masters degree in Energy & Resources at the University of California at Berkeley, and to research into the economics of energy efficiency at Lawrence Berkeley Laboratory. Chapter 2 – My role
After some years at the Centre for Resource Management at Canterbury and Lincoln, I returned to the United States to study for a doctorate in public policy at Harvard University. Back in New Zealand in 1998, I began working as an independent policy and economic consultant for a variety of government agencies. I also served on the boards of a number of Crown Entities before being appointed to the role of Parliamentary Commissioner for the Environment.
6 The office is truly multi-disciplinary which really helps us to see issues from different perspectives, and can lead to animated discussions. Staff are qualified in such varied subjects as chemistry, geography, physics, biology, forestry, economics, politics, geology, law, planning, and history. I am also fortunate to have excellent administrative staff who keep us well organised.
2.2 Legal functions
The Environment Act 1986 lays out my functions and powers as Commissioner. These form the basis of my ability to investigate environmental issues, processes, and public agencies. The functions are wide-ranging and are set out in section 16(1) of the Environment Act 1986 as follows:
a) review the system of agencies and processes established by the Government to manage the allocation, use, and preservation of natural and physical resources, and report to the House of Representatives
b) investigate the effectiveness of environmental planning and environmental management carried out by public authorities, and advise them on remedial action
c) investigate any matter where the environment may be or has been adversely affected, advise on preventive measures or remedial action, and report to the House of Representatives
d) at the request of the House of Representatives or any select committee, report on any petition, bill, or other matter which may have a significant effect on the environment
e) on the direction of the House of Representatives, inquire into any matter that has had or may have a substantial and damaging effect on the environment and report to the House
f) undertake and encourage the collection and dissemination of information relating to the environment
g) encourage preventive measures and remedial actions for the protection of the environment. 2.3 Our mission statement and values
In preparing, reporting and communicating advice to Parliament, my staff and I use the following shared mission and values to guide our work.
Our mission 7
To maintain or improve the quality of the New Zealand environment by providing robust independent advice that influences decisions
Our values
Excellence The questions we raise and the solutions we propose are based on sound science and reasoned argument. We are accountable to the people of New Zealand and deliver value for the funding we receive.
Determination We bravely and constructively question the status quo. We persist in communicating the results of our work in different ways to maximise its usefulness.
Generosity of spirit We work together in an open collegial way, sharing our expertise, listening carefully and not rushing to judgment. We actively acknowledge decisions and actions that benefit the environment.
Innovation Our independence empowers us to think freely and creatively. We strive to get beyond describing problems to proposing solutions.
Effectiveness Others trust and respond to our advice. Our work has a lasting and tangible impact on the New Zealand environment. 8 3 ReportsReports, and advice advice and other activities
We New Zealanders take great pride in our environment, in its beauty, its bountiful natural resources, and the lifestyle opportunities of the ‘great outdoors’. Our natural and physical environment is central to our way of life, identity, and economic prosperity. It is also precious in its own right.
Maintaining or improving the quality of New Zealand’s environment is therefore an important goal. The core work of our office is undertaking investigations and providing advice on environmental matters.
Investigations arise in a variety of ways. For instance, they may be prompted by letters from the public, or may flow from issues uncovered in earlier investigations. The result of an investigation is in the form of a report tabled in Parliament. Reports usually contain recommendations to Ministers. My staff and I work hard to ensure reports are accurate and readable, and that recommendations are both practical and effective.
While formal reporting is fundamental, we also use a variety of other ways of communicating our work to Parliamentarians and the public – from presentations and speeches to media comment and videos on our website. Two or three years after a report, a short update on the subject is prepared – this canvasses reactions and responses, and sometimes includes new developments. Three of these updates are appended to this Annual Report.
The provision of advice is generally done in two ways – either as advice on proposed law changes to select committees or on policy proposals to government agencies.
Opposite page: Bush trail in the Mokihinui Gorge
Source: Parliamentary Commissioner for the Environment archives Chapter 3 – Reports, advice and other activities
3.1 Investigations
Three investigation reports were tabled in Parliament this year. They were:
• Evaluating solar water heating: Sun, renewable energy and climate change, in July 2012
• Evaluating the environmental impacts of fracking in New Zealand: An interim 10 report, in November 2012
• On a pathway to extinction? An investigation into the status and management of longfin eel, in April 2013
During the year, an investigation on conservation land was undertaken (completed in August 2013), update reports on three earlier investigations were produced, and work on two other major investigations continued.
Evaluating solar water heating: Sun, renewable energy and climate change In July 2012, I released a report on solar water heating, based on asking how ‘good’ it is for the environment.
Evaluating solar water heating: Sun, renewable energy and climate change compares the environmental benefits of heating household water using the sun compared with standard electric water heating systems in New Zealand.
This investigation took us on a journey into the electricity sector that led to some unexpected outcomes. While solar water heaters do save electricity, they are least effective when savings are needed most – on the cold dark days in winter. It is at these times when the fossil fuel plants that produce carbon dioxide emissions are cranked up to meet the annual peak demand for electricity.
Moreover, there are more cost effective ways than solar water heaters to deliver greater environmental benefits. One of those is simply heating water at night when electricity demand is low and a greater proportion of electricity being generated is renewable. More broadly, the report promoted the need to flatten peak demand.
In the same week as the report was released, I welcomed a report from the Energy Networks Association on smart electricity networks, saying, “New Zealand’s peak electricity continues to grow which means we’re going to have to choose between building more environmentally damaging fossil fuel power plants, managing our demand better, or enduring power failures.”
In response to the report’s first recommendations, the Minister of Energy and Resources has said, “I do not consider it appropriate to make any policy change in order to emphasise renewables for the singular benefit of carbon reduction”.1
1 Letter from Hon Simon Bridges to the Parliamentary Commissioner for the Environment, 10 July 2013. However, in response to my second recommendation, the Energy Efficiency and Conservation Authority (EECA) are changing the information they provide on water heating.
The Green Party MP, Gareth Hughes, said that the report had done a disservice. However, he agreed that we need to take pressure off the electricity system and supported my third recommendation to investigate better load control and demand 11 management.2 My report was also disputed by some who felt that meeting peak demand was not a significant problem. I responded to this criticism directly in a newspaper opinion piece.3
Evaluating the environmental impacts of fracking in New Zealand: An interim report In November 2012, I released a report on the controversial practice known as fracking (hydraulic fracturing).
The investigation was announced in March 2012 in response to numerous requests. During the investigation, it became clear that due to the complexity of the issues, more time would be needed, so I decided to release a report outlining my interim findings before completing the investigation.
In the interim report, I concluded that fracking can be done safely if well managed, but raised concerns about the rules and safeguards surrounding the practice in New Zealand, stating:
“During the course of this investigation I have come to a similar conclusion to the Royal Society which is that fracking is safe if it is properly regulated and managed. However I have significant concerns about how fragmented and complicated the regulatory environment for fracking is and about how these rules are being applied.”
Fracking looks set to enable the expansion of oil and gas drilling into regions other than Taranaki, but it is likely that the local environmental impacts of other activities associated with the industry, such as waste disposal, are of greater significance than those directly attributable to fracking.
The big environmental issue that sits behind fracking is climate change, and whether or not fracking assists in fighting climate change is debated internationally.
I gave Members of Parliament the opportunity to attend a presentation of the report’s findings in Parliament on the day it was released. Nearly 50 MPs and Parliamentary staff attended this successful event hosted by Nicky Wagner MP.
2 Press release, 26 July 2013 3 ‘Reducing peak electricity demand vital’, Otago Daily Times, 9 August 2012. Chapter 3 – Reports, advice and other activities
The report was generally well received. The Minister of Energy and Resources stated in the House: “We also welcome the objective, not subjective, view that the evidence she has considered to date has revealed no basis to call for a nationwide moratorium on fracking.” 4
However, the Green Party renewed its call for a moratorium because the report “could not guarantee the safety of fracking in New Zealand”.5 And some expressed 12 concern that I may have come under pressure from the industry or the Government to rush out an interim report, but this was not the case.
The next stage of the investigation into fracking continues, with a particular focus on the regulatory system. I hope to release the final report soon.
On a pathway to extinction? An investigation into the status and management of longfin eel New Zealand’s longfin eels are extraordinary creatures. An iconic freshwater species found only in this country, they are the longest-lived and largest freshwater eel in the world. They spawn only once at the end of their lives after a 5,000 kilometre migration north to the tropics.
Source: Alton Perrie
The New Zealand longfin eel.
4 Minister of Energy and Resources, Hon Phil Heatley, Answer to a Question for Oral Answer, 28 November 2012. 5 Gareth Hughes MP, ‘Safety of fracking not guaranteed by PCE’, media release, 27 November 2012. This long and complex life cycle makes them especially vulnerable to over- exploitation, and for some time letters have come into the office expressing concern about their status and management. After a thorough investigation, On a pathway to extinction? An investigation into the status and management of the longfin eel was released in April 2013.
After considering the full range of scientific information available, I made the 13 judgement that, on the weight of evidence, longfin eels are in serious trouble. Of particular concern was the age structure of the longfin eel population, which shows a lack of juveniles and a lack of large breeding-sized eels.
The investigation also covered the management of the species by central and local government agencies. I found that the Ministry for Primary Industries used an overly narrow scientific basis for judging the sustainability of the species. I also recommended that the Department of Conservation (DOC) take active efforts to protect freshwater fish habitat and passage.
The report generated a lot of media interest upon its release, featuring on television news, many national and regional newspapers, and on radio. The Science Media Centre sought responses from freshwater scientists from around the country who, with one exception, were very supportive of the report’s scientific analysis.
The Government’s response to the recommendations was swift and proactive. In June 2013, the Minister for Primary Industries and the Minister of Conservation announced that an independent review panel would be set up, the process of separating the management of longfin and shortfin eels in the South Island would begin, and DOC would begin work aimed at protecting the habitat and passage of eels and other migratory native fish.6
I welcomed this prompt response and look forward to the results of the panel and following the progress of policy work.
Many others have also shown strong interest in the report including iwi and hapu. In May I presented my findings to Ngati Kahungunu and others at a public meeting in Wairarapa. And I have met with the Te Wai Maori Trust and representatives of other iwi to discuss the report. In June, I presented the report to the New Zealand Conservation Authority.
6 Minister for Primary Industries and Minister of Conservation, ‘Interim measures on longfin eels announced’, press release, 7 June 2013. Chapter 3 – Reports, advice and other activities
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Source: Parliamentary Commissioner for the Environment archives
St. Arnaud Range near Nelson Lakes National Park.
The future of conservation: the case of stewardship land My investigation into stewardship land was a major office project this year, although the report was completed in August 2013, and will therefore be covered in next year’s Annual Report.
Despite being created as a temporary holding pen during the Crown land reforms of the 1980s, this category of conservation land persists today and makes up nearly a third of the conservation estate. I am concerned that the process for swapping this land cannot be relied on to guarantee a net conservation benefit, and I recommended that the New Zealand Conservation Authority devise a framework for a new process. Some stewardship land merits greater legal protection, and I recommended that a national strategy be used to drive the identification and reclassification of high value areas. Update reports Update reports follow up on previous investigations by summarising reactions to the original report, considering new developments, and assessing responses to recommendations. Three update reports (which are appended in full to this Annual Report) were completed this year.
Evaluating the use of 1080: Predators, poisons and silent forests (August 15 2011) showed 1080 to be an effective, safe and well-regulated method for controlling the three main predators of our native birds - possums, rats and stoats. I called for more 1080 to be used because there is no control of these pests on most of our conservation estate.
Although there was a positive response to the original report, DOC spent more this year on research into 1080 and its alternatives than on actually using it. Recently, a vision for a predator-free New Zealand by 2050 has gained momentum and this is very encouraging. However, making progress towards realising this vision must involve using more 1080 because it is currently the only cost-effective way of killing all three pests over large areas.
Source: Nga Manu Images
Ship rats prey on insects and some birds, including kōkako, kākāriki and mōhua.
My update report on 1080 received strong support from government and environmental groups. Conservation Minister Hon. Nick Smith said “we’re going to follow up her report by having a fresh look at whether we can expand the area that we’re doing so we can ensure that more of our native species are surviving”.7 And Forest & Bird advocated that “DOC should move resources from the less effective ground-based control to the more effective use of aerial 1080. There’s no need for any more delay, we should be acting on the PCE’s recommendations now”.8
7 ‘Smith backs call for expanded 1080 use’, 3News, 18 July 2013. 8 ‘Forest & Bird Joins Call For More Aerial 1080’, press release by Forest & Bird, 17 July 2013. Chapter 3 – Reports, advice and other activities
Unsurprisingly, the update report was criticised by some opponents of 1080. For example, one opponent said, “If they do a drop we can’t go for a hunt there for a period, it’s killing insects, it’s killing birds, anything that lives and breathes”.9 All points raised in opposition were issues considered thoroughly in the original investigation. 16 The two other update reports released this year were much more quietly received.
In the update of my 2009 report on smart electricity meters, I was critical of the continued lack of leadership in the electricity sector. The opportunity to make new digital meters really smart has largely been missed. It is notable that thousands of Waikato households will soon have two digital meters installed – one installed by the retailer and one installed by the lines company. Much greater coordination is needed if New Zealand is to really ‘smarten’ its electricity grid.
In the update of my 2010 report on the science of water quality I was very pleased to report that it was being regularly used as a resource by Members of Parliament, Government agencies, journalists, schools and at least one university. Requests for copies continue to come into the office and it has been reprinted twice.
3.2 Advice
My advice this year focused on proposals for far-reaching changes to two critical and complex environmental management systems - the Emissions Trading Scheme, and the Resource Management Act.
Climate Change and the Emissions Trading Scheme Climate change policy has continued to change and this year I spoke out strongly against proposed amendments to the Emissions Trading Scheme (ETS). I also made a submission on consequent changes to ETS regulations.
In my September 2012 submission to the Finance and Expenditure Select Committee on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill, I said that the proposed changes would be a costly and environmentally damaging mistake and make a farce of New Zealand’s climate commitments.
The ETS is the Government’s main tool to combat climate change but it had already been weakened by previous amendments. The Bill muted the carbon price signal by shifting the burden of cost even more from the polluter to the taxpayer. By making this subsidy indefinite, the amendments all but remove the incentive to reduce emissions.
9 ‘Time is running out for native species – Environment Commissioner’, One News, 16 July 2013. I appeared before the Finance and Expenditure Committee to make my case that the Bill should be rejected, saying that: “For our environmental and economic good we need to be investing in a low carbon future, but instead we’re being locked into promoting old, dirty, technologies.”
In November I made a submission on proposed regulations restricting the use of certain international units in the ETS. The proposed changes missed an opportunity 17 to address a major weakness of the ETS.
Resource Management Act reform The Resource Management Act (RMA) was a major focus for work this year. I provided advice on two Bills and two discussion documents.
In November 2012, I submitted in support of a Member’s Bill, the Resource Management (Restricted Duration of Certain Discharge and Coastal Permits) Amendment Bill. The RMA allows for otherwise unlawful discharges of pollutants to freshwater in “exceptional circumstances”, and the Bill sought to constrain this exemption by reducing its time limit from 35 years to 5 years. This was a reasonable proposal and I supported the Bill. Unfortunately, the majority of the Select Committee did not, and the Bill did not proceed.
In March 2013, I submitted on the Government’s Resource Management Reform Bill 2012.
I focused on one aspect in particular – the proposed changes to section 32 of the RMA. I supported some of the proposed changes, but expressed concern about the effective elevation of economic values over environmental values by the requirement for quantification. Doing so, I argued, was inconsistent with the purpose of the Act: “The RMA’s fundamental purpose is to make sure that environmental effects are taken into consideration when decisions are being made about using our resources. It is not, and should not become, an economic development act.”
My third, and much more substantive, submission was to the Minister for the Environment in April. It was in response to a discussion document, Improving our resource management system, that proposed radical changes to the RMA – the primary law for protecting New Zealand’s environment.
I agree that there is much that can be done to improve the efficiency of RMA processes and reduce unnecessary cost, and acknowledged that some proposed changes were steps in the right direction. However, other proposals went much further and were far more radical than any previous amendments to the RMA.
I strongly rejected the proposed changes to the purpose and principles of the RMA because they would weaken environmental protections and undermine the role of the Act. Since its inception, the function of the RMA has been to provide an environmental balance to the economic imperatives of the marketplace. The proposals would instead tilt the Act toward promoting economic development. Chapter 3 – Reports, advice and other activities
The Government announced a set of revised proposals in August 2013. The changes addressed some of my concerns, but I remain very worried by the proposed amendments to the purpose and principles of the Act. I anticipate making a submission on the resulting Bill when it is before select committee.
18
Source: Parliamentary Commissioner for the Environment archives The Commissioner inspects nutrient runoff measurement in the Taupo catchment.
Fourth, and also in April, I submitted on the parallel discussion document Freshwater reform 2013 and beyond. I welcomed the thrust of this set of reforms, which built on the work of the Land and Water Forum. My submission focused on three aspects - allowing regional collaborative processes for managing water, setting national objectives and limits for water quality, and changing the process for establishing Water Conservation Orders.
I supported the first two of these aspects in principle, although the effect of these reforms will depend on detail that was absent from the document. The third aspect I opposed, and was pleased to learn in August that this change will no longer be pursued. Other advice In August, the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill was reported back from select committee. The committee had addressed some of the concerns raised in my December 2011 submission. However, I released a media statement pointing out that it had failed to fix the Bill’s primary short-coming – its purpose clause.
19 The proposed purpose remained inconsistent with international law and fundamentally different from its sister legislation, the Resource Management Act. I was therefore very pleased when the Minister for the Environment announced just a week later that the purpose would be rewritten to mirror the ‘sustainable management’ purpose of the RMA. I welcomed this change in a second media statement, and issued a third media statement the following week urging Parliament to pass the much-delayed law, which it did.
In November, I made a short submission on the Crown Minerals (Permitting and Crown Land) Bill. The Bill covered many issues that I have reported on extensively in my 2010 report Making difficult decisions: Mining the conservation estate. My submission reminded the Committee of that report and repeated its recommendations. An update report on Making difficult decisions will be prepared soon.
3.3 Other activities
Undertaking investigations and preparing advice take up most of my time and that of my staff. However, it is important to take opportunities to visit regions, learn about environmental issues from those on the ground, and communicate our work, although time prevents me from accepting many invitations that come into the office.
Presentations this year included speaking about impacts on freshwater quality to the Hauraki Gulf Forum annual gathering; this also provided an opportunity to learn more about marine conservation issues in the Auckland region. In December I presented the findings of my fracking investigation to the New Zealand Association of Impact Assessment conference. A new experience for me this year was describing my role via Skype video conferencing to a meeting organised by the Environmental Defenders Office, an independent, non-profit legal service in Australia.
Other interactions ranged from meeting with the Environmental Protection Authority and the New Zealand Conservation Authority to talking to a class of environmental law students and speaking to two Rotary Clubs. During the fracking investigation, I visited Taranaki (with a trip to a wellsite), and Hawkes Bay. I also discussed my fracking report and wider energy issues with the Executive Director of the International Energy Agency, Mrs Maria van der Hoeven, during her visit to New Zealand, and the Polish Ambassador, Her Excellency Mrs Beata Stoczynska. Chapter 3 – Reports, advice and other activities
More recently, in connection with the current investigation into water quality, two of my staff and I spent a very useful two days ‘on the ground’ around Taupo. A particular highlight in May was a trip to Fiordland at the invitation of the Department of Conservation. It was a great privilege to visit Dusky Sound and Doubtful Sound and to see the conservation work being done in this remote part of the country.
20 3.4 Ongoing and future work
There are numerous environmental issues that are worthy of investigation. However, mine is a relatively small office, and time and resources are limited. It is therefore important that future work is prioritised and planned, to ensure it is pertinent and ‘adds value’ for Parliamentarians and the public.
The first criterion for adding value is to avoid duplicating the work of others. Instead, I seek out areas where my independence can prompt progress on difficult or contested topics, and where I am likely to be able to make practical, effective recommendations.
Moreover, not all environmental problems are equally important, so I pay particular attention to environmental problems that are irreversible, cumulative, or accelerating. Climate change ticks all three boxes and therefore is, in my view, the greatest environmental challenge the world faces.
I also receive many complaints, information and suggestions from the public. While all the issues raised cannot be investigated, all are considered. Some of these letters and emails have led to investigations. This year, the investigations on fracking and on longfin eels were both undertaken in response to public concern.
As I finalise this annual report, we are mulling over topics for future work. However, the priority is the completion of current investigations. A report on the type of conservation land known as ‘stewardship land’ was released in August 2013, and two further investigations will be completed in the next few months. The first looks at the effect of land use change on water quality and what the future might hold. And the second is the final report on fracking with a focus on the regulatory system.
Climate change, as the greatest environmental challenge, is an ongoing focus. I have been considering whether to investigate New Zealand’s preparedness to adapt to climate change, although this is now such an active area of research that I would need to clearly identify an opportunity to add value before deciding to proceed. More broadly however, fracking is of course partly a climate change issue, and my staff have built up expertise in analysing the carbon dioxide emissions associated with energy.
Resource management, and freshwater in particular, remain top priorities and great challenges for New Zealand. I will report soon on water quality and land use change, and I expect to make a submission on proposed changes to the Resource Management Act. Conservation and biodiversity have also become a recurring theme. Two years ago I announced an investigation into the commercial use of conservation land. This has evolved into a series of conservation related reports. The most recent, stewardship land, explored an issue uncovered in a 2012 report “Hydroelectricity or wild rivers: Climate change versus natural heritage”. And both of these built on knowledge gained through earlier investigations into 1080 and into mining on conservation land. The stewardship land investigation, in turn, uncovered a number of further issues to explore, including the concept of ‘net conservation benefit’. 21
Oceans and marine conservation is deserving of more investigation. Building on past work on the Exclusive Economic Zone and on longfin eels, there are potential avenues for investigation of fisheries management and marine conservation.
Environmental agencies and processes are a significant area of work across many topics. While most reports have a scientific element, virtually all the reports and advice examine in some way the institutions, laws and policies that determine how the environment is managed. 22 4 ReportsAboutThe office the and Commissioner advice for the Environment
The capability and productivity of my staff is fundamental for the effectiveness of my office. The aim is to provide a supportive and rewarding environment where excellence is valued.
I try to operate a flexible, open office where everyone’s view is heard and recognised. We have a culture of continuous improvement, and continually look for ways to do things better by questioning the status quo.
4.1 Training and development
Staff are encouraged, with the support of their managers, to plan for their own professional and personal development. In 2012/13, 3% of the total salary budget was spent on training and development. This included management courses, on-going professional development, writing skills, attendance at conferences and seminars, and communications training.
4.2 Organisational health
My staff must have the right skills and experience in order to deliver high quality work. This means retaining top performing staff and attracting high calibre applicants. It also means ensuring that the office is recognised as a challenging workplace in which results are expected and delivered. Systems and process that support this work include:
• Regular meetings of the management team
• Weekly staff meetings
• Regular financial and operational reporting
• Ongoing corporate systems development. Chapter 4 – The office
Measures to promote a healthy workplace include:
• Flexible work arrangements to accommodate family needs
• Ability to use remote access to facilitate working from home in special circumstances
• Negotiable part-time working arrangements, where appropriate
24 • Participation in the office sports teams encouraged.
No health and safety incidents were recorded during the year.
As at 30 June 2013, there were 20 staff (17.7 FTEs) employed within the office (Table 1).
Table 1 Number and diversity of staff as at 30 June 2013
2011/12 2011/12 2012/13 2012/13 staff FTEs staff FTEs
Number of men employed 9 8.6 9 8.6
Number of women employed 9 8.1 11 9.1
Total employees 18 16.7 20 17.7
New Zealand European 12 14
New Zealand Māori 2 2
New Zealand Polynesian 1 1
Other nationalities 3 3
The office remuneration policy is aligned with those already operating across the state sector. Our Human Resources Manual and Code of Conduct guide staff on employment related matters. 5 Financial statements ReportsandAbout statement the and Commissioner advice of service performance for the Environment
5.1 Statement of responsibility
In my opinion, the statement of service performance and the financial information presented in these statements and notes fairly reflects the position and operations of the Parliamentary Commissioner for the Environment, for the year ended 30 June 2013.
A system of internal control has been established and maintained which provides reasonable assurance as to the integrity and reliability of financial reporting.
In terms of the Public Finance Act 1989, I accept responsibility, as Parliamentary Commissioner for the Environment, for the preparation of the financial statements and the associated judgements and the statement of service performance.
Dr Jan Wright Craig Le Vaillant Parliamentary Commissioner for Chief Financial Officer the Environment
27 September 2013 Chapter 5 – Financial statements and statement of service performance
5.2 Independent Auditor’s Report
To the readers of 26 Parliamentary Commissioner for the Environment’s financial statements and non-finacial performance information for the year ended 30 June 2013
The Auditor-General is the auditor of Parliamentary Commissioner for the Environment (the Commissioner). The Auditor-General has appointed me, Karen Young, using the staff and resources of Audit New Zealand, to carry out the audit of the financial statements and the non-financial performance information of the Commissioner on her behalf.
We have audited:
• the financial statements of the Commissioner on pages 33 to 51, that comprise the statement of financial position, statement of commitments, statement of contingent liabilities and contingent assets as at 30 June 2013, the statement of comprehensive income, statement of changes in taxpayers’ funds, statement of departmental expenses and capital expenditure against appropriations, statement of departmental unappropriated expenditure and capital expenditure and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information; and
• the non-financial performance information of the Commissioner that comprises the statement of objectives and service performance on pages 29 to 32.
Opinion In our opinion
• the financial statements of the Commissioner on pages 33 to 51:
• comply with generally accepted accounting practice in New Zealand; and
• fairly reflect the Commissioner’s:
• financial position as at 30 June 2013; and
• financial performance and cash flows for the year ended on that date;
• expenses and capital expenditure incurred against each appropriation administered by the the Commissioner and each class of outputs included in each output expense appropriation for the year ended 30 June 2013; and
• unappropriated expenses and capital expenditure for the year ended 30 June 2013.
• the non-financial performance information of the Commissioner on pages 29 to 32: • complies with generally accepted accounting practice in New Zealand; and
• fairly reflects the Commissioner ’s service performance and outcomes for the year ended 30 June 2013, including for each class of outputs:
• its service performance compared with the forecasts in the statement of forecast service performance at the start of the financial year; and 27
• its actual revenue and output expenses compared with the forecasts in the statement of forecast service performance at the start of the financial year.
Our audit was completed on 27 September 2013. This is the date at which our opinion is expressed.
The basis of our opinion is explained below. In addition, we outline the responsibilities of the Commissioner and our responsibilities, and we explain our independence.
Basis of opinion We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the financial statements and the non-financial performance information are free from material misstatement.
Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers’ overall understanding of the financial statements and the non-financial performance information. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.
An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the non-financial performance information. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the financial statements and the non-financial performance information, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Commissioner’s preparation of the financial statements and the non-financial performance information that fairly reflect the matters to which they relate. We consider internal control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Commissioner’s internal control.
An audit also involves evaluating:
• the appropriateness of accounting policies used and whether they have been consistently applied;
• the reasonableness of the significant accounting estimates and judgements made by the Commissioner;
• the appropriateness of the reported non-financial performance information within the Commissioner ’s framework for reporting performance; Chapter 5 – Financial statements and statement of service performance
• the adequacy of all disclosures in the financial statements and the non-financial performance information; and
• the overall presentation of the financial statements and the non-financial performance information.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and the non-financial performance information. Also 28 we did not evaluate the security and controls over the electronic publication of the financial statements and non-financial performance information.
We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of the Commissioner The Commissioner is responsible for preparing financial statements and non- financial performance information that:
• comply with generally accepted accounting practice in New Zealand;
• fairly reflect the Commissioner ’s financial position, financial performance, cash flows, expenses and capital expenditure incurred against each appropriation and its unappropriated expenses and capital expenditure; and
• fairly reflects its service performance and outcomes.
The Commissioner is also responsible for such internal control as is determined is necessary to enable the preparation of financial statements and non-financial performance information that are free from material misstatement, whether due to fraud or error. The Commissioner is also responsible for the publication of the financial statements and non-financial performance information, whether in printed or electronic form.
The Commissioner’s responsibilities arise from the Environment Act and the Public Finance Act 1989.
Responsibilities of the Auditor We are responsible for expressing an independent opinion on the financial statements and the non-financial performance information and reporting that opinion to you based on our audit. Our responsibility arises from section 15 of the Public Audit Act 2001, and the Public Finance Act 1989.
Independence When carrying out the audit, we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the External Reporting Board.
Other than the audit, we have no relationship with or interests in the Commissioner.
Karen Young Audit New Zealand On behalf of the Auditor-General Wellington, New Zealand 5.3 Statement of objectives and service performance
The primary impact that the Parliamentary Commissioner for the Environment seeks is to influence decisions in order to maintain and improvement the quality of the New Zealand environment. The measures below directly and indirectly indicate whether we have achieved our mission.
Output: Reports and advice 29 Reports and advice are the sole output class appropriated through Vote: Parliamentary Commissioner for the Environment, although there are a variety of other activities that result from our work. Outputs include:
• Reports of investigations.
• Presentations to select committees on investigations and other matters.
• Provision of advice and/or briefings to Members of Parliament (MPs) on investigations and other matters.
• Advice and submissions on Bills and Inquiries to select committees.
• Submissions on proposed regulations.
• Update reports on responses to recommendations made by the Commissioner.
• Support for inter-Parliamentary delegations.
• Presentations on environmental issues to a wide variety of groups.
• Responses to concerns and enquiries from members of the public.
• A regular email newsletter informing MPs of the work of the office.
Table 2 Resources Employed in 2012/13
30/06/2012 30/06/2013 Actual Actual Main Est Supp Est $ (000) $ (000) $ (000) $(000) 2,613 Revenue Crown10 2,623 2,613 2,623
10 Other revenue 0 3 3
2,623 Total revenue 2,623 2,616 2,626
2,623 Total expenses10 2,624 2,613 2,626
0 Net surplus/(Deficit) (1) 0 0
Impact One of the main functions of the Commissioner is to provide advice to Members of Parliament (MPs). The key indicator of the effectiveness of the Commissioners work is the proportion of recommendations made that are adopted by MPs. The level of performance this year was 61 percent, the same as last year’s result and slightly below the target of 65%.
10 This includes the Commissioner’s remuneration of $286,000 (2012: $276,000) Chapter 5 – Financial statements and statement of service performance
As the recommendations are live, in time the advice in submissions and reports may well be implemented or ignored. The Commissioner will continue to make these recommendations without fear or favour, nor make them so easy as to be worthless.
Raising levels of awareness and public debate is a priority for the Commissioner so ensuring work is accessible and accurate is important. Gaining coverage in the 30 media also allows topics to be more widely discussed. Table 3 shows other performance measures for assessing impact.
Table 3 Performance measures and targets for assessing impact and output performance measures and standards
Measure Target Performance
Proportion of recommendations: 11 • adopted or partially adopted 65% 61% • responded to 100% 100%
Evaluate outcomes from projects 100% for major Achieved: Chapter 3 of the projects12 Annual Report describes all major work undertaken this year in chronological order, along with subsequent reaction for all reports and advice on legislation. Appendix 1 of the Annual Report provides a detailed analysis of the results of three previous investigations.
External peer review for technical 100% for major 100% accuracy projects13
Content review and internal peer 100% of all 100% review reports and briefings
Complaints and inquiries resolved 90% 100% to completion within 9 months
All types of queries given initial 100% 86% response within 10 working days
Advice to Parliament delivered 100% 100% within agreed timeframes
11 As the responses of the Ministers or agencies targeted do not necessarily coincide with the annual reporting cycle, this figure reflects the recommendations made as part of environmental investigations during the tenure of the current Commissioner (since March 2007) 12 Major projects are those pieces of work under the output class “Reports and Advice”. These are Reports on investigations. Our major projects are available on our website: www.pce.parliament.nz 13 Major projects are those pieces of work under the output class “Reports and Advice”. These are Reports on investigations. Our major projects are available on our website. Quality assurance It is extremely important that the work produced by the office is well researched, well argued and well written. All work is internally reviewed. For major projects, a further step is taken by having work externally peer reviewed for technical accuracy. These quality assurance steps ensure investigations undertaken by the office are of a consistently high standard. 31 All complaints and inquiries received into the office are given an initial response with 10 working days. The office aims to resolve all complaints within 9 months.
We deliver value for money Value for money is a guiding principle that is incorporated into our daily operations. In recent years there have been many changes in the office aimed at achieving value for money. These have led to direct operational cost savings.
The office has a culture of actively pursuing continuous improvement. This means continually reviewing the way things are done and looking for ways to improve. Producing reports which are well presented and which communicate the issues clearly is an on-going priority. With this in mind, the office has the capability to lay out reports internally, reducing the costs associated with publishing and streamlining the production process. Similarly, illustrations such as figures and maps are now developed ‘in-house’, allowing greater fine tuning of the way in which material is presented.
Table 4 shows other performance measures regarding value for money.
Table 4 Performance measures and targets for assessing for value for money
Measure Target Performance
Remuneration increases consistent with 100% 100% public sector expectations
Percentage of supplier contracts 100% Achieved: 100% consistent with procurement policy
Cost per recommendation adopted $25,000 or less $27,500 Chapter 5 – Financial statements and statement of service performance
We value our staff We must have the right skills in order for the office to deliver high quality reports and advice to Parliament. That means retaining top performing staff and attracting high calibre applicants. It also means the office is recognised as a workplace which encourages achievement and challenge, and where results are expected and delivered. See Table 5 for performance measures representing organisational health.
32 Table 5 Performance measures and targets for assessing organisational health
Measure Target Performance
Performance management plans in 100% Achieved: 100% place and annual performance reviews undertaken
Personal development plans in place 100% Achieved: 100% and uptake of budgeted training and development activities
Annual unplanned staff turnover Equal or less Achieved: 0% than 11.4%14
14 Average core unplanned turnover for the public sector as reported by the State Services in their Human Resource Capability Survey of Public Service Departments, 2012 5.4 Statement of comprehensive income for the year ended 30 June 2013
Actual Note Actual Main Supp Estimates 2012 2013 Estimates 2013 $ (000) $ (000) 2013 $ (000) $ (000) Income 33 2,613 Revenue Crown 2,623 2,613 2,623
10 Revenue Other 0 3 3
2,623 Total Revenue 2,623 2,616 2,626
Expenditure
1,731 Personnel costs (2) 1,783 1,753 1,740
125 Depreciation and (7),(8) 135 120 134 amortisation
0 Loss on sale of property, (3) 1 0 0 plant and equipment
49 Capital charge (4) 49 49 49
718 Other operating expenses (5) 656 694 703
2,623 Total Expenditure 2,624 2,616 2,626
0 Net Surplus (1) 0 0
0 Other Comprehensive 0 0 0 Income
0 Total Comprehensive (1) 0 0 Income for the year
The accompanying notes form part of these financial statements.
Explanations of major variances against budget are detailed in note 19. Chapter 5 – Financial statements and statement of service performance
5.5 Statement of financial position as at 30 June 2013
Actual Note Actual Main Estimates Supp Estimates 2012 2013 2013 2013 $ (000) $ (000) $ (000) $ (000)
Assets Current Assets 34 661 Cash and cash equivalents 635 599 626
11 Debtors and other (6) 25 0 0 receivables
672 Total Current Assets 660 599 626
Non-Current Assets
255 Property, plant and (7) 202 240 209 equipment
2 Intangible assets (8) 3 0 0
257 Total Non-Current Assets 205 240 209
929 Total Assets 865 839 835
Liabilities Current Liabilities
243 Creditors and other payables (9) 158 159 155
0 Repayment of surplus (10) 0 0 0
72 Employee entitlements (11) 94 66 66
315 Total Current Liabilities 252 225 221
315 Total Liabilities 252 225 221
614 Net Assets 613 614 614
Taxpayers’ Funds
614 General funds 613 614 614
614 Total Taxpayers’ Funds 613 614 614
5.6 Statement of changes in taxpayers’ funds for the year ended 30 June 2013
Actual Actual Main Estimates Supp Estimates 2012 2013 2013 2013 $ (000) $ (000) $ (000) $ (000)
614 Balance at 1 July 614 614 614
0 Total comprehensive income (1) 0 0
0 Repayment of surplus to Crown 0 0 0
614 Balance at 30 June 613 614 614
The accompanying notes form part of these financial statements. 5.7 Statement of cash flows for the year ended 30 June 2013
Actual Actual Main Estimates Supp Estimates 2012 2013 2013 2013 $ (000) $ (000) $ (000) $ (000)
Cash flows from operating activities 35 2,613 Receipts from Crown 2,623 2,613 2,623
10 Receipts from revenue other 0 3 3
(784) Payments to suppliers (763) (691) (798)
(1,716) Payments to employees (1,761) (1,757) (1,746)
(49) Payments for capital charge (49) (49) (49)
18 Goods and services tax (net) 8 0 16
92 Net cash from operating 58 119 49 activities
Cash flows from investing activities
0 Receipts from sale of property, 0 0 0 plant and equipment
(34) Purchase of property, plant and (84) (72) (74) equipment
(34) Net cash from investing (84) (72) (74) activities
Cash flows from financing activities
(10) Payment of surplus to Crown 0 0 (10)
(10) Net cash from financing 0 0 (10) activities
48 Net (decrease)/increase in cash (26) 47 (35)
613 Cash at the beginning of the year 661 552 661
661 Cash at the end of the year 635 599 626
The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department. The GST component has been presented on a net basis, as the gross amounts do not provide meaningful information for financial statement purposes. The accompanying notes form part of these financial statements. Chapter 5 – Financial statements and statement of service performance
5.8 Statement of commitments
As at 30 June 2013, the Parliamentary Commissioner for the Environment had no capital commitments (2012: nil).
Non-cancellable operating lease commitments In 2011, the Parliamentary Commissioner for the Environment renewed its 36 office lease for a further three years. The amounts disclosed below for future commitments are based on the renewed rental.
Other non-cancellable commitments The Parliamentary Commissioner for the Environment has entered into a non- cancellable 4 year contract for a photocopier under the government’s All of Government contracts.
Actual Actual 2012 2013 $ (000) $ (000)
Non-cancellable operating lease commitments
212 No later than one year 176
176 Later than one year and no later than five years 0
388 Total operating lease commitments 176
Other non-cancellable commitments
2 No later than one year 2
3 Later than one year and no later than five years 1
5 Total other commitments 3
There are no restrictions placed on the Parliamentary Commissioner for the Environment by any of its leasing arrangements. The accompanying notes form part of these financial statements.
5.9 Statement of contingent liabilities and contingent assets
The Parliamentary Commissioner for the Environment had no known quantifiable or unquantifiable contingent liabilities as at 30 June 2013 (2012: nil).
The Parliamentary Commissioner for the Environment had no contingent assets as at 30 June 2013 (2012: nil).
The accompanying notes form part of these financial statements. 5.10 Statement of departmental expenses and capital expenditure against appropriations
Expenditure 2012 Expenditure 2013 Appropriation Voted 2013* $ (000) $ (000) $ (000)
Vote Parliamentary Commissioner for the Environment Appropriation for Output Expense 37
2,347 Reports and Advice 2,340 2,340
2,347 Sub-total 2,340 2,340
Appropriation for other expenses
276 Remuneration of the Parliamentary 286 286 Commissioner for the Environment (Permanent Legislative Authority)
276 Sub-total 286 286
2,623 Total 2,626 2,626
Departmental Capital Expenditure
34 Parliamentary Commissioner for the 84 72 Environment - Capital Expenditure (Permanent Legislative Authority)
2,657 Total 2,710 2,698
*This includes adjustments made in the Supplementary Estimates. Chapter 5 – Financial statements and statement of service performance
5.11 Statement of departmental unappropriated expenditure and capital expenditure
Unappropriated Expenditure Expenditure Appropriation Unappropriated 2012 2013 Voted 2013* Expenditure 2013 $ (000) $ (000 $ (000) $ (000)
Vote Parliamentary Commissioner for the Environment 38 Appropriation for Output Expense
7 Reports and Advice 2,340 2,340 0
7 Sub-total 2,340 2,340 0
*This includes adjustments made in the Supplementary Estimates. 5.12 Notes to the financial statements
1. Statement of accounting policies
Reporting Entity The Parliamentary Commissioner for the Environment was established under the Environmental Act 1986 and is designated as an Officer of Parliament by the Public 39 Finance Act 1989.
As the Commissioner’s primary objective is to investigate environmental concerns independent of government, the Parliamentary Commissioner for the Environment has designated itself as a public benefit entity for financial reporting under New Zealand equivalents to International Financing Reporting Standards (NZ IFRS).
The financial statements for the Parliamentary Commissioner for the Environment are prepared pursuant to the Public Finance Act 1989 and are for the year ended 30 June 2013. The financial statements were authorised for issue by the Parliamentary Commissioner for the Environment on 27 September 2013.
Basis of Preparation
Statement of compliance The financial statements have been prepared in accordance with the requirements of the Public Finance Act 1989, which include the requirement to comply with New Zealand generally accepted accounting practice (NZ GAAP), and Treasury Instructions.
Measurement basis The financial statements have been prepared on an historical cost basis.
Functional and presentational currency The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Parliamentary Commissioner for the Environment is New Zealand dollars.
Changes in accounting policies There have been no changes in accounting policies during the financial year.
Standards, amendments, and interpretations issued that are not yet effective and have not been early adopted There is one standard, amendment, or interpretation issued but not yet effective that has not been early adopted, and that is relevant to the Office. NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments: Recognition and Measurement. NZ IAS 39 is being replaced through the following three main phases: Phase 1 Classification and Measurement, Phase 2 Impairment Methodology, and Phase 3 Hedge Accounting. Phase 1 has been completed and has been published in the new financial instrument standard NZ IFRS 9. NZ IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in NZ IAS 39. The approach in NZ IFRS 9 is based on how an entity manages its financial assets (its business model) and the contractual cash flow characteristics of the financial assets. The financial liability requirements are the same as those of NZ IAS 39, except for Chapter 5 – Financial statements and statement of service performance
when an entity elects to designate a financial liability at fair value through the surplus/deficit. The new standard is required to be adopted for the year ended 30 June 2016. However, as a new Accounting Standards Framework will apply before this date, there is no certainty when an equivalent standard to NZ IFRS 9 will be applied by public benefit entities.
The Minister of Commerce has approved a new Accounting Standards Framework 40 (incorporating a Tier Strategy) developed by the External Reporting Board (XRB). Under this Accounting Standards Framework, the Parliamentary Commissioner for the Environment will be eligible to apply the reduced disclosure regime (Tier 2 reporting entity) of the public sector Public Benefit Entity Accounting Standards. The effective date for the new standards for public sector entities is for reporting periods beginning on or after 1 July 2014. Therefore, the Parliamentary Commissioner for the Environment will transition to the new standards in preparing its 30 June 2015 financial statements. The Office has not assessed the implications of the new Accounting Standards Framework at this time.
Due to the change in the Accounting Standards Framework for public benefit entities, it is expected that all new NZ IFRS and amendments to existing NZ IFRS will not be applicable to public benefit entities. Therefore, the XRB has effectively frozen the financial reporting requirements for public benefit entities up until the new Accounting Standard Framework is effective. Accordingly, no disclosure has been made about new or amended NZ IFRS that exclude public benefit entities from their scope.
The following significant accounting policies, which materially affect the measurement of financial results and financial position, have been applied consistently to all periods presented in these financial statements.
Significant Accounting Policies
Budget figures The budget figures are those included in the Information Supporting the Estimates of Appropriations for the Government of New Zealand for the year ended 30 June 2013, which are consistent with the financial information in the Main Estimates. In addition, the financial statements also present the updated budget information from the Supplementary Estimates. The budget figures have been prepared in accordance with the NZ GAAP, using accounting policies that are consistent with those adopted in preparing these financial statements.
Revenue Revenue is measured at the fair value of consideration received or receivable.
Revenue from the Crown The Parliamentary Commissioner for the Environment is primarily funded through revenue received from the Crown, which is restricted in its use for the purpose of the Parliamentary Commissioner for the Environment meeting its objectives as specified in the Statement of Intent. Revenue from the Crown is recognised as revenue when earned and is reported in the financial period to which it relates. Capital charge The capital charge is recognised as an expense in the period to which it relates.
Leases The Parliamentary Commissioner for the Environment leases office premises and office equipment. As substantially all the risks and benefits of ownership are retained by the lessor, these leases are classified as an operating lease. Lease 41 payments are recognised as an expense on a straight-line basis over the lease term.
Cash and cash equivalents Cash and cash equivalents include cash on hand and is measured at its face value.
Debtors and receivables Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment changes.
Impairment of a receivable is established when there is objective evidence that the Parliamentary Commissioner for the Environment will not be able to collect amounts due according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default in payments are considered indicators that the debtor is impaired. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted using the original effective interest rate. The carrying amount of the asset is reduced through the use of a provision for impairment account, and the amount of the loss is recognised in the surplus or deficit. Overdue receivables that are renegotiated are reclassified as current (that is, not past due).
Property, plant and equipment Property, plant and equipment consist of furniture, fittings and fixtures, computer hardware, and other office equipment. Assets are shown at cost less any accumulated depreciation and impairment losses.
Individual assets, or groups of assets, are capitalised if their cost is greater than $1,000. The value of an individual asset that is less than $1,000 and is part of a group of similar assets is capitalised.
The cost of an item of property, plant, and equipment is recognised as an asset if it is probable that future economic benefits or service potential associated with the item will flow to the Parliamentary Commissioner for the Environment and the cost of the item can be measured reliably.
Work in progress is recognised at cost less impairment and is not depreciated.
In most instances, an item of property, plant and equipment is recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost, it is recognised at fair value as at the date of acquisition.
Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the surplus or deficit. Chapter 5 – Financial statements and statement of service performance
Costs incurred subsequent to initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to the Ministry and the cost of the item can be measured reliably.
The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year.
Depreciation is calculated on a straight-line basis over the useful life of the asset as 42 follows:
Furniture, fittings and fixtures 10 years 10% Computer hardware 4 years 25% Other office equipment 3-5 years 20-33%
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful life of the improvement whichever is the shorter.
Realised gains and losses on the disposal of property, plant and equipment are recognised in the Statement of Comprehensive Income in the period in which the transaction occurs.
Intangible assets Intangible assets are recorded at their cost of acquisition less accumulated amortisation.
Amortisation is calculated on a straight-line basis over the useful life of the asset as follows:
Acquired computer software 3 years 33% Developed computer software 4 years 25%
Acquired computer software licenses are capitalised on the basis of the costs incurred to purchase the software.
Developed computer software relate to costs incurred to develop software for internal use.
Impairment of assets Property, plant and equipment and intangible assets that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an asset is impaired, its carrying amount is written down to the recoverable amount and the impairment loss recognised in the Statement of Comprehensive Income. The recoverable amount is the higher of an asset’s fair value less costs to see and value in use.
Creditors and other payables Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Employee entitlements
Current employee entitlements Employee entitlements that the Parliamentary Commissioner for the Environment expects to be settled within 12 months of balance date are measured at undiscounted nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date and annual leave 43 earned but not yet taken at balance date.
Non-current employee entitlements The Parliamentary Commissioner for the Environment does not have any employee entitlements that may be payable beyond 12 months of balance date.
Superannuation schemes
Defined contribution schemes Obligations for contributions to KiwiSaver are accounted for as defined contribution superannuation scheme and are recognised as an expense in the Statement of Comprehensive Income when incurred.
Provisions The Parliamentary Commissioner for the Environment recognises that a provision for future expenditure of uncertain amount or time when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that expenditures will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at present value of the expenditures expected to settle the obligation using a pre-tax discount that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as a finance cost.
Goods and Services Tax (GST) All items in the financial statements including appropriation statements are stated exclusive of Goods and Services Tax (GST), except:
• where GST incurred on goods or services is not recoverable from the taxation authority, it is recognised as part cost of acquisition of the asset or part of the expense items as applicable; and
• receivables and payables, which are stated with the amount of GST included.
The net amount of GST receivable or payable to the taxation authority is included in receivables or payables in the Statement of Financial Position.
Commitments and contingencies are disclosed exclusive of GST.
The net GST paid, or received, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows. Chapter 5 – Financial statements and statement of service performance
Income tax The Parliamentary Commissioner for the Environment is not liable for the payment of income tax in terms of the Income Tax Act 2007. Accordingly, no charge for income tax has been provided for.
Commitments Expenses yet to be incurred on non-cancellable contracts that have been entered 44 into on or before balance date are disclosed as commitments to the extent that there are equally unperformed obligations.
Cancellable commitments that have penalty or exit costs explicit in the agreement on exercising that option to cancel are included in the statement of commitments at the value of that penalty or exit cost.
Taxpayers’ funds This is the Crown’s net investment in the Parliamentary Commissioner for the Environment and is measured as the difference between total assets and total liabilities.
Statement of cost accounting policy The Parliamentary Commissioner for the Environment has one output only. All costs are allocated directly to that output.
Critical judgements in applying the Parliamentary Commissioner for the Environment’s accounting policies Management has exercised the following critical judgements in applying the Parliamentary Commissioner for the Environment’s accounting policies for the period ended 30 June 2013:
Lease classification Determining whether a lease agreement is a finance lease or an operating lease requires judgement as to whether the agreement transfers substantially all the risks and rewards of ownership to the Parliamentary Commissioner for the Environment. Judgement is required on various aspects that include, but are not limited to, the fair value of the leased asset, the economic life of the leased asset, whether or not to include renewal options in the lease term and determining an appropriate discount rate to calculate the present value of the minimum lease payments. Classification as a finance lease means the asset is recognised in the statement of financial position as property, plant and equipment, whereas with an operating lease, no such asset is recognised.
The Parliamentary Commissioner for the Environment has exercised her judgement on the appropriate classification of equipment leases and property and has determined none are finance leases. 2. Personnel costs
Actual Actual 2012 2013 $ (000) $ (000)
1,676 Salaries and wages 1,719 40 Employer contributions to defined contribution plans 43 15 Increase/(decrease) in employee entitlements 21 45 1,731 Total personnel costs 1,783
3. Gain/(Loss)
Actual Actual 2012 2013 $ (000) $ (000)
3 Net gain/(loss) on disposal of property, plant and equipment 1
3 Total gain/(loss) 1
4. Capital charge The Parliamentary Commissioner for the Environment pays a capital charge to the Crown on its taxpayers’ funds as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2013 was 8.0% (2012: 8.0%).
5. Other operating costs Included within other operating costs are:
Actual Actual 2012 2013 $ (000) $ (000)
21 Audit fees for the financial statement audit 21
217 Operating lease payments 217
0 Advertising and publicity 0
171 Consultancy 65
49 Maintenance 66
34 Accommodation 35
29 Communication 29
34 Travel 42
24 Consumables 8
33 Professional fees and development 51
29 Library acquisitions 45
77 General expenses 77
718 Total 656 Chapter 5 – Financial statements and statement of service performance
6. Debtors and other receivables
Actual Actual 2012 2013 $ (000) $ (000)
11 Prepayments 25
11 Total Debtors and other receivables 25 46 The Parliamentary Commissioner for the Environment has no other debtors or receivables.
7. Property, plant and equipment
Furniture, Computer Other Leasehold Total fittings & hardware office improvements fixtures equipment $ (000) $ (000) $ (000) $ (000) $ (000)
Cost
Balance at 1 July 2012 209 162 43 395 809
Additions 4 10 34 33 81
Disposals (5) (18) (28) 0 (51)
Balance at 30 June 2013 208 154 49 428 839
Depreciation
Balance at 1 July 2012 140 113 39 262 554
Depreciation expense 12 25 10 87 134
Disposal (4) (18) (29) 0 (51)
Balance at 30 June 2013 148 120 20 349 637
Carrying amounts
At 30 June 2012 69 49 4 133 255
At 30 June 2013 60 34 29 79 202 8. Intangible assets
Acquired Internally Total software generated software $ (000) $ (000) $ (000)
Cost
Balance at 1 July 2012 107 12 119 47 Additions 2 0 2
Disposals 0 0 0
Balance at 30 June 2013 109 12 121
Accumulated amortisation and impairment losses
Balance at 1 July 2012 105 12 117
Amortisation expense 1 0 1
Disposals 0 0 0
Balance at 30 June 2013 106 12 118
Carrying amounts
At 30 June 2012 2 0 2
At 30 June 2013 3 0 3
There are no restrictions over the title of the Parliamentary Commissioner for the Environment’s intangible assets, nor are any intangible assets pledged as security for liabilities.
9. Creditors and other payables
Actual Actual 2012 2013 $ (000) $ (000)
150 Creditors 47
69 Accrued expenses15 79
24 GST payable 32
243 Total creditors and other payables 158
Creditors and other payables are non-interest bearing and are normally settled on 30 day terms; therefore the carrying value of creditors and other payables approximates their fair value.
15 Accrued expenses includes an accrual for salaries and wage Chapter 5 – Financial statements and statement of service performance
10. Repayment of surplus
Actual Actual 2012 2013 $ (000) $ (000)
0 Net surplus 0
0 Total repayment of surplus 0 48 The repayment of surplus is required to be paid by 31 October of each year.
11. Employee entitlements
Actual Actual 2012 2013 $ (000) $ (000)
72 Annual leave 94
72 Total employee entitlements 94
The Parliamentary Commissioner for the Environment has no retirement leave or long service leave obligations. Annual leave obligations are calculated on the actual to be paid.
12. Taxpayers’ funds
Actual Actual 2012 2013 $ (000) $ (000)
614 General funds 614
0 Operating (deficit)/surplus (1)
0 Provision for repayment of surplus 0
614 General funds at 30 June 613
13. Reconciliation of net surplus to net cash from operating activities
Actual Actual 2012 2013 $ (000) $ (000)
0 Net surplus/(deficit) (1) Add/(less) non-cash items:
125 Depreciation and amortisation expense 135
125 Total non-cash items 134
Add/(less) items classified as investing or financial activities:
0 (Gains)/losses on disposal of property, plant and equipment 1
Add/(less) movements in working capital items:
(11) (Inc)/dec in prepayments (14)
(37) Inc/(dec) in creditors and other payables (85)
15 Inc/(dec) in employee entitlements 22
(33) Net movements in working capital items (76)
92 Net cash from operating activities 58 14. Related party transactions and key management personnel Related party transactions
All related party transactions have been entered into on an arm’s length basis.
The Parliamentary Commissioner for the Environment is a wholly owned entity of the Crown. Parliament significantly influences the work of the Parliamentary Commissioner for the Environment as well as being its major source of revenue. 49 Significant transactions with government-related entities
The Parliamentary Commissioner for the Environment has received funding from the Crown of $2.623m (2012: $2.613m) to provide reports and advice to the public for the year ended 30 June 2013.
Collectively, but not individually, significant transactions with government- related entities
In conducting its activities, the Parliamentary Commissioner for the Environment is required to pay various taxes and levies (such as GST, PAYE, and ACC levies) to the Crown and entities related to the Crown. The payment of these taxes and levies, other than income tax, is based on the standard terms and conditions that apply to all tax and levy payers. The office of the Parliamentary Commissioner for the Environment is exempt from paying income tax.
The Parliamentary Commissioner for the Environment also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases from these government-related entities for the year ended 30 June 2013 totalled $271,000 (2011 $293,000). These purchases included the purchase of electricity from Genesis Energy, air travel from Air New Zealand, and postal services from New Zealand Post.
There is a balance of $24,000 outstanding at year end (2012 $41,000).
There were no transactions carried out with other related parties.
No provision has been required, nor any expense recognised, for impairment of receivables from related parties.
Key management personnel compensation
Actual Actual 2012 2013 $ (000) $ (000)
772 Salaries and other short-term employee benefits 921
20 Post employment benefits 25
792 Total key management personnel compensation 946
Key management personnel are the management team, comprising the Commissioner, General Manager, Research Managers, Chief Financial Officer and Office Manager. There are 7 staff that comprise the senior management team (2012: 6).
15. Events after the balance date There have been no significant events after the balance sheet date. Chapter 5 – Financial statements and statement of service performance
16. Financial instrument risks The Parliamentary Commissioner for the Environment’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity risk. The Parliamentary Commissioner for the Environment seeks to minimise exposure from financial instruments and does not allow any transactions that are speculative in nature to be entered into.
50 Market risk
Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The number of foreign currency transactions entered into by the Parliamentary Commissioner for the Environment is very small and current practice for foreign exchange is to purchase the exact foreign currency amount at the time it is required.
At balance date there are no foreign currency transactions outstanding.
Interest rate risk Interest rate risk is the risk that the fair value of a financial instrument will fluctuate or, the cash flows from a financial instrument will fluctuate, due to changes in market interest areas.
The Parliamentary Commissioner for the Environment has no interest bearing financial instruments and, accordingly, has no exposure to interest rate risk.
Credit risk Credit risk is the risk that a third party will default on its obligation to the Parliamentary Commissioner for the Environment, causing them to incur a loss.
In the normal course of its business, credit risk arises from debtors, deposits with banks and derivative financial instrument assets.
The Parliamentary Commissioner for the Environment has no receivables from debtors outstanding and therefore no credit rate risk from this source.
The Parliamentary Commissioner for the Environment is only permitted to deposit funds with Westpac, a registered bank. This entity has high credit ratings.
The Parliamentary Commissioner for the Environment’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount. There is no collateral held as security against these financial instruments.
Liquidity risk Liquidity risk is the risk that the Parliamentary Commissioner for the Environment will encounter difficulty raising liquid funds to meet commitments as they fall due.
In meeting its liquidity requirements, the Parliamentary Commissioner for the Environment closely monitors its forecast cash requirements with expected cash drawdowns from the New Zealand Debt Management Office. The Parliamentary Commissioner for the Environment maintains a target level of available cash to meet liquidity requirements. The table below analyses the Parliamentary Commissioner for the Environment’s financial liabilities that will be settled based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
Less than 1 year $ (000) 51 2012
Creditors and other payables 243
2013
Creditors and other payables 158
17. Categories of financial instruments The carrying amounts of financial assets and financial liabilities in each of the NZ IAS 39 categories are as follows:
Actual Actual 2012 2013 $ (000) $ (000)
Loans and receivables
661 Cash and cash equivalents 635
661 Total loans and receivables 635
Financial liabilities measured at amortised cost
243 Creditors and other payables (note 9) 158
18. Capital management The Parliamentary Commissioner for the Environment’s capital is its equity (or taxpayers’ funds), which comprise general funds and capital contribution. Equity is represented by net assets.
The Parliamentary Commissioner for the Environment manages its revenues, expenses, assets, liabilities, and general financial dealings prudently. The Parliamentary Commissioner for the Environment’s equity is largely managed as a by-product of managing income, expenses, assets, liabilities, and compliance with the Government Budget processes and with Treasury instructions.
The objective of managing the Parliamentary Commissioner for the Environment’s equity is to ensure the Commissioner effectively achieves the goals and objectives for which it has been established, whilst remaining a going concern.
19. Explanations of major variances against budget Explanations of major variances from the Parliamentary Commissioner for the Environments budget figures are as follows:
Statement of financial position Other operating costs were lower than budget due to a lower anticipated spend on specialist consultant advice. 52 53
Appendix Update Reports
Contents
Evaluating the use of 1080: Predators, poisons and silent forests 55
Smart electricity meters: How households and the environment can benefit 67
Water quailty in New Zealand: Understanding the science 73
54 Evaluating the use of 1080: Predators, poisons and silent forests
Update Report June 2013 55
1. Introduction
In June 2011 the Parliamentary Commissioner for the Environment released a report entitled Evaluating the use of 1080: Predators, poisons and silent forests. The aim of the investigation was to undertake an independent and rigorous assessment of the controversial pesticide 1080.
2. Background
With the exception of two species of bats, New Zealand has no native land mammals. For 65 million years our plants, birds and other animals evolved in isolation, protected by the oceans from mammalian predators like rats. In such remoteness diversity flourished, and many of our 90,000 native species are found nowhere else. But they have evolved with few defences against some of the mammals that arrived with human settlement.
For instance, the enemy of kakapo was the now-extinct Haast eagle. To protect itself against this terrifying predator that would swoop down from above, a kakapo would freeze with its feathers acting as a perfect camouflage against the forest floor. Today a less effective defence mechanism against stoats is hard to imagine.
Today, New Zealand has one of the highest extinction rates in the world due largely to introduced pests, both plants and animals. Three animal pests are especially damaging – possums, rats and stoats devastate our forests and the creatures that live in them. It is not, as is often thought, enough just to kill possums. If the possum population falls, there is more food for rats. As rats increase in number, they provide more food for stoats, and stoats are devastatingly effective predators of our native birds.
Although it was originally introduced to kill rabbits and stop them destroying pasture, the pesticide 1080 is now mainly used to kill mammal pests for two reasons – to protect our native plants and animals and to protect dairy herds against bovine tuberculosis.1
Despite various reviews, a considerable body of research, and many regulatory controls on its application, the aerial use of 1080 remains contentious, especially in some parts of the country.
1 Possums are major carriers of bovine tuberculosis. 1080 is also sometimes used to kill rabbits, hares and wallabies. 3. Main findings of the investigation
The investigation was focused on the use of 1080 to protect native species by killing possums, rats and stoats. Because they are carnivorous, stoats do not eat 56 1080 baits but are killed by ‘secondary poisoning’ when they eat poisoned rats.
Both the effectiveness and the concerns about 1080 were assessed by responding to a series of questions.
Regarding the effectiveness of 1080, it was found that it:
• reduces populations of possums, rats, and stoats down to low levels; • leads to increases in the survival of native birds and trees; • knocks down the rapid growth in populations of rats and stoats in mast years when trees flower profusely and provide huge amounts of food for pests; • can be used on a large scale in remote rugged areas that comprise most conservation land; • is much more cost-effective than ground control when used aerially.
Regarding concerns about 1080, it was found that it:
• does not build up in the environment;2 • seldom causes by-kill when applied with modern controls; • does not endanger people provided it is used as prescribed in regulations; • is ‘moderately humane’ in the way it kills pests.
Alternative methods of killing possums, rats and stoats – trapping, other poisons and biological control – were also examined. While they have their place, none come close to replacing 1080.
2 There is one exception – 1080 can linger in carcasses of poisoned animals under very cold and dry conditions for some months. 4. Reaction to the report
The use of 1080 has long been controversial and consequently the report attracted 57 a great deal of media attention and commentary.
Government and political parties The report was welcomed by the Government. Minister of Conservation Hon. Kate Wilkinson said “Only the introduced predators will benefit from a moratorium, which I agree isn’t needed”.3
Labour Party Conservation spokesperson, Hon. Ruth Dyson, strongly supported the recommendations, saying “we now have an evidence base upon which to form our views”. And Environment spokesperson Charles Chauvel commented “We must not let our future be one of silent forests. We have the evidence provided in a robust and independent way. Now all that remains is for the Ministers to take action”.4
The Green Party welcomed the report, but said that 1080 should be used only “as a measure of last resort in hard-to-get places where it is the only cost-effective way to control pests”.5
Maori Party Environment spokesperson Rahui Katene welcomed the report saying “it is timely that we have an independent report which looks at all the arguments both for and against the use of 1080”. At the time, the Maori Party had a Member’s bill seeking to ban the import, manufacture and use of 1080 in New Zealand, but reviewed the bill after the release of the Commissioner’s report and withdrew it.6
In contrast, United Future leader Hon. Peter Dunne dismissed the report as a “kick in the guts for many of our provincial communities.”7 However, in late 2011, when questioned about 1080, he said “There is a lot of evidence about its destructiveness to habitats and species, but we have never been so irresponsible as to suggest it should be phased out in the absence of an alternative.”8
3 NZ Herald, “Government gives backing to 1080 report”, 8 June 2011. 4 Press Release, “Labour supports findings of Parliamentary Commissioner for the Environment”, 8 June 2011. 5 Press Release, “Dunne’s proposal to ban 1080 unworkable”, 8 June 2011. 6 Press Release, “Maori Party reviewing its bill to ban the import, manufacture and use of 1080 in Aotearoa”, 8 June 2011; Stuff Politics, “Election soapbox: 1080”, 16 November 2011. 7 Dominion Post, “1080 report ‘kick in the guts’ – Dunne”, 8 June 2011. 8 The Wellingtonian, “Peter Dunne looks ahead”, 1 December 2011. Commentators
Following the release of the report, supportive editorials and feature articles appeared in virtually every newspaper in the country. These included “Row far bigger than 1080’s few failings” in the NZ Herald, “We have no choice on using 1080” in The Press, and “But it feels so bad…” in the Southland Times.
58 Journalist and commentator Pattrick Smellie wrote that the report “… appears to have done what years of argument … has failed to achieve – a sharp shift in sentiment to favour the widely derided poison”.9
The report stood up to scrutiny from the scientific community. Professor Dave Kelly said that “the net effect of recent well-run (1080) operations is overwhelmingly positive”, and Professor Doug Armstrong said “most people seem to mistake the ongoing declines of native birds due to predation to effects of 1080.”10 Wildlife ecologist John Innes reported “reading every word of the report, punctuated by uncharacteristic out-loud whoops of delight”.11
Royal Forest & Bird Protection Society spokesperson Nicola Vallance said the report “showed clearly that 1080 was a lifeline for New Zealand’s endangered native birds and forests”.12
Federated Farmers president Don Nicolson described the report as “popping the 1080 mythology balloon” and the Animal Health Board released a statement saying “Hopefully such a comprehensive report will reassure the New Zealand public that the carefully-regulated use of biodegradable 1080 to control predatory pests, such as possums, is not only safe, but necessary.”13, 14
However, there was also strong criticism from some opponents. South Canterbury Deer Stalkers Association president Tim McCarthy said “the destruction [1080] does to the land, and to native plants and animals, is indiscriminate…The hunting fraternity simply does not want any poisons in our food chain”.15 And Poison Free New Zealand spokesperson Paul Cohen said “it’s just typical corporate science driven by people who want to drop 1080. It’s fabricated to look good. They have an agenda…to keep dropping 1080 but the true science shows it is dangerous for our environment and humans”.16
9 NZ Energy & Environment Business Week, “Tectonic shift in attitude to 1080?”, 15 June 2011. 10 3 News, “Scientists stick up for 1080”, 9 June 2011. 11 Email to PCE office, 25 June 2011. 12 Timaru Herald, “Backing for continued 1080 use”, 9 June 2011. 13 Sunday Star Times, “Wright’s plain-English report pops the 1080 balloon”, 12 June 2011.
14 Press Release, “Animal Health Board welcomes 1080 report”, 8 June 2011. The Animal Health Board is responsible for the control of bovine tuberculosis.
15 Timaru Herald, “Backing for continued 1080 use”, 9 June 2011.
16 Dominion Post, “Dismay and praise for 1080 report”, 9 June 2011. 5. Responses to the Commissioner’s recommendations
The report concluded with six recommendations from the Commissioner.
Recommendation 1: Parliament does not support a moratorium on 1080. 59
In the 2008 election, the Maori Party’s policies included a moratorium on 1080. As described above the Maori Party submitted a members bill to ban the import, manufacture and use of 1080.17 After the release of the report, the bill was withdrawn and a moratorium on 1080 was no longer a Party policy going into the 2011 election.
The United Future Party went into the 2008 election with a policy opposing the aerial use of 1080 unless successful ground-based operations were not possible.18 But in the 2011 election, the Party’s policy had changed to a complete ban on the use of 1080 while recognising that this would take time.19
The Mana Party’s environmental policy in the 2011 election also included a ban on 1080.20
No other parties currently support a moratorium on 1080.
Recommendation 2: The Minister for the Environment investigate ways to simplify and standardise the way 1080 and other poisons for pest mammal control are managed under the Resource Management Act and other relevant legislation.
The labyrinth of laws and regulations that govern the use of 1080 and other poisons used to control introduced pests creates unnecessary complexity and confusion. In particular, different councils control aerial 1080 use differently – in some regions it is a ‘permitted activity’ and in others it is not.21 This must add unnecessary cost and restrictions to operations, and potentially make it difficult to respond quickly enough to mast events. In some cases, the hurdle of obtaining resource consents may have stopped aerial 1080 operations from taking place at all.
17 Maori Party, “Policy Priorities: He Aha te Mea Nui”, October 2008, p. 6. 18 United Future, “Department of Conservation Reform”, 2008, p. 2.
19 United Future, “Outdoor Recreation and Conservation”, 2011; United Future, “United Future launches key policies for protecting our outdoor heritage”, 15 November 2011. 20 Stuff Politics, “Election soapbox: 1080”, 16 November 2011.
21 An aerial 1080 operation is currently planned for the Catlins, spanning both the Otago and Southland regions. Aerial 1080 is a permitted activity in Otago, but needs resource consent in Southland. Otago Regional Council, “Regional Plan: Water for Otago”, Rule 12.7.1.4, p. 206.; Environment Southland, “Regional Water Plan for Southland”, Rule 6, p. 11 In May 2013, the Commissioner wrote to the Minister for the Environment, Hon Amy Adams. In her response, the Minister said that the Ministry has recently provided updated guidance to councils encouraging them to avoid duplication on matters already covered under the Hazardous Substances and New Organisms (HSNO) Act.22 However, this guidance does not mention 1080 or indeed refer to any tangible examples of duplication. Moreover, HSNO regulations only deal with some aspects of the use of 1080 that would be considered in an application for a 60 resource consent.
The other aspect of enquiry was whether any work is being done to develop a National Environmental Standard (NES) to make aerial 1080 a permitted activity in all regions. The Commissioner also raised this question with the Minister of Conservation, Hon Nick Smith, after he took up the portfolio. The pros and cons of an NES on aerial 1080 are being explored by the Department of Conservation, Environment Waikato and the Animal Health Board, and a meeting with Ministry for the Environment officials is imminent.23
Recommendation 3: The Minister of Conservation establishes the Game Animal Council as an advisory body that works collaboratively with the Department of Conservation, but ensures that responsibility for all pest control remains with the department.
During the investigation, the concern arose that the desire of the proposed Game Animal Council to protect deer and other game animals might come into conflict with the Department of Conservation’s role in carrying out pest control.
The Game Animal Council does not yet exist. Its establishment bill had its first reading in March 2012. Subsequently, the Local Government and Environment Select Committee acknowledged the Commissioner’s recommendation, stating in its report back to the House:
“We recommend inserting new clause 34A to make it clear that ministerial powers relating to the authorisation of hunting could not limit the ability of the Minister or Director-General of Conservation to carry out the killing of wild animals or pests for control or management purposes”.24
22 Letter to the PCE from the Minister for the Environment, 17 June 2013
23 Letter to the PCE from the Minister of Conservation, 8 July 2013.
24 Local Government and Environment Committee, “Game Animal Council Bill”, 2012, p.7. Recommendation 4: The Minister of Justice introduces an amendment to the Ombudsmen Act 1975 to add the Animal Health Board to Part 2 of Schedule 1 of the Act, and thereby make the Animal Health Board also subject to the Official Information Act 1982.
61 At the time of the investigation, the Animal Health Board (AHB) was not subject to the Official Information Act (OIA). This meant that people concerned about 1080 could not be confident that the AHB would provide full information about 1080 operations. A lack of transparency in an agency with powers established in legislation can engender mistrust.
The Animal Health Board was made subject to the OIA in 2012 by adding the phrase “Management agencies under the Biosecurity Act 1993, if they are corporate bodies, in their role under pest management plans…” to Schedule 1 of the Ombudsmen Act 1975.25 However, this is so convoluted that many people would struggle to find out that the AHB is now subject to the OIA.
Accordingly, the Commissioner wrote to the Chief Executive of the AHB, suggesting that a statement that the AHB is subject to the OIA be placed in a prominent place on the AHB website. The Acting Chief Executive replied that OIA requests for information have been received and complied with, and that a re- design of the website will soon “ensure that OIA requests are facilitated through the Contact Us section”.26
Since the AHB has been accused of secrecy regarding its 1080 operations in the past, it would be helpful to see a more explicit acknowledgement on its website that it is now subject to the OIA – for example, “For a request for information under the OIA, please click here”.
Recommendation 5: The Minister of Conservation asks the Department of Conservation to prioritise the development of national policy and operational procedures on possum fur harvesting.
Well-organised large scale trapping and poisoning possums for fur may be economically viable, although it is unlikely to reduce possum populations enough to benefit native animals and plants. However, it could be used to complement other pest management, particularly in remote back country where there is no pest control.
The development of national policy and operational procedures on possum fur harvesting has not been made a priority by DOC, although the potential for this to happen remains as the new structure of the department is established.27
25 Biosecurity Law Reform Act 2012, s89. This also made the AHD subject to the Ombudsmen Act 1975. 26 Letter to the PCE from the Acting Chief Execuive, 10 June 2013. 27 Letter to the PCE from the Minister of Conservation, 1 November 2012. Recommendation 6: The Minister of Conservation improve information about pest control on the conservation estate by providing consistent and accessible information on the Department of Conservation website, including the purposes and results of different pest control operations.
62 It became clear during the investigation that the quality and nature of communication about 1080 operations needed improvement.
Standard operating procedures and guidelines have now been made publicly available on the DOC website, and there is greater consistency across conservancies.28 However, the two reports that are available on each 1080 operation are far from easily readable summaries that would lead to greater public understanding of important matters such as why the operation is being done and what its results are. These reports are technical in nature, and are required for compliance with regulations.
The Pesticide Summaries tell hunters and other people where pesticides are being used on conservation land so they know which areas to avoid. These meet the requirements of the NZ Food Safety Authority (now part of the Ministry for Primary Industries).
The Operation Reports are required for compliance with HSNO regulations, and are on the Environmental Protection Authority’s 1080 watch list (the EPA administers the HSNO Act). There appears to be no indication on the DOC website that the 1080 watch list exists and there is no direct link to it, as suggested in the Local Government and Environment Committee’s report on 1080.29
In May 2013, the Commissioner wrote to Hon Nick Smith, Minister of Conservation, asking if DOC has further plans to improve communication about 1080 operations.
He replied that some thought has gone into simplifying the Pesticide Summaries, although no resources have been allocated to producing comprehensive non- technical summaries of operations. The Minister has asked for the Pesticide Summaries to be linked to the 1080 watch list on the EPA website.30
28 Letter to the PCE from the Minister of Conservation, 1 November 2012. 29 Local Government and Environment Committee, “Report on the Parliamentary Commissioner for the Environment on Evaluating the use of 1080: Predators, poisons, and silent forests”, 2011, p.6. 30 Letter to the PCE from the Minister of Conservation, 8 July 2013 6. Some continuing issues
Very inadequate pest control
During the investigation it was found that only on one-eighth of conservation land are populations of possums, rats and stoats controlled to any extent.31 The corollary must be an ongoing decline in biodiversity over the great majority of conservation 63 land.
DOC is currently prioritising its biodiversity work by developing a Natural Heritage Management System (NHMS). This will lead to more targeted pest control focused on high priority ecosystems and species, although the majority of ecosystems and species on the NHMS rankings are not scheduled to receive any active management. It is also unclear whether the implementation of NHMS will lead to greater or less use of 1080.
However, the fact remains that aerial 1080 is the most cost-effective way of controlling the three key pests of possums, rats and stoats over large areas.
The balance between operations and research
In the 2012/13 year, DOC allocated more funding to research on 1080 and its alternatives than it did to pest control operations using 1080.32
Funding allocated in DOC's 2012/2013 budget Operations - ground & aerial 1080 $2 million
Research:
- Improving how 1080 is used $1 million
- Trials for self-resetting traps $1.9 million
- Alternative toxins $0.09 million
31 Possums, rats and stoats are not major problems everywhere on conservation land. For instance, these pests will be fewer and do less damages in mountainous areas, and stoats are (fortunately) not present on Stewart Island. But these three pests collectively do enormous damage to plants, birds and other animals on the great majority of conservation land. 32 Pers comm., Department of Conservation, 6 December 2012. The amount allocated to all animal pest control in the 2012/13 year was $18 million. Judgement on the value of the research would, of course, require an investigation of its own.33 Doubtless, individual research projects have great merit, but this (and other expenditure by DOC) should be compared with the known benefits that come from using a toxin that has been proven effective and cost-effective in knocking down populations of the three pests that are doing so much damage to our unique plants and animals.
64 In 2012/13, the AHB allocated $7 million for 1080 operations and $0.61 million for 1080 research.34 Much of this research funding is spent on reducing the cost of aerial 1080 operations.35
The relationship between AHB and DOC The AHB, DOC and, indeed, some regional councils, all carry out pest control using 1080 across New Zealand. Coordination of their efforts can achieve better results and reduce costs.
The AHB is generally able to be flexible with the timing of aerial 1080 operations, but does need time to plan and liaise with communities. DOC often has less flexibility because of the need to respond rapidly to the burgeoning populations of rats and stoats that follow mast events. Opportunities for coordination should always be pursued. It is good to see that the AHB and DOC have been coordinating on 1080 drops in Kahurangi National Park and in the Tararua ranges.36
Although the AHB is concerned with bovine TB not biodiversity, its 1080 operations do benefit conservation land. What are the implications for conservation when the AHB achieves its goal of eradicating bovine TB?
According to a DOC analysis, this will not become an issue for many years because the earliest the AHB could completely eradicate bovine TB is 2035.37 But this analysis considers the issue at a national level. Environment Waikato is looking at ways to prioritise and reduce pest control costs, in preparation for the possibility that the AHB might consider bovine TB is no longer a threat in certain places in Waikato.38
33 For a full list of research on 1080 and its alternatives, see Environmental Protection Authority, “Annual report on the aerial use of 1080 for the year ended 31 December 2011”, 29 November 2012. 34 Pers comm., Animal Health Board, 11 March 2013. 35 For instance, sowing the bait in different ways (randomly or in strips or clusters) could reduce how much bait is needed and could mean that fixed-wing aircraft can be used in place of more expensive helicopters. See Animal Health Board, “Annual research report 2011/12”, pp. 20-21.
36 There is no formal agreement between the AHB and DOC regarding coordination. The forthcoming Pest Management National Plan of Action intended to clarify the roles and responsibilities of different agencies involved in pest management in New Zealand may provide a more formal approach for coordination between agencies. MAF Biosecurity New Zealand, “Pest Management National Plan of Action”, February 2011. 37 Advice to the New Zealand Conservation Authority, “Implications for DOC and conservation if/when the AHB achieves its goal of eradicating TB from NZ”, 4 April 2013. 38 Waikato Regional Council, “Proposed Waikato Regional Pest Management Plan 2013- 2023”, p. 26. A predator-free New Zealand? The idea of a predator-free New Zealand achieved by eradicating rather than controlling pests was floated by the late Sir Paul Callaghan in his last public lecture in February 2012. This idea has gained much traction within the conservation and scientific communities, sparking much discussion over feasibility.
Sir Paul’s vision was inspired by the success of Zealandia – the predator-free sanctuary in the heart of Wellington. He proposed that we should start by making 65 both Stewart Island and Great Barrier Island predator-free and building more sanctuaries on the mainland.
It would be wonderful if this vision could be achieved, but it would involve overcoming many major challenges. Every New Zealander would have to be on board. Undoubtedly it would be expensive. And undoubtedly, 1080 would have to play a major role, unless there are scientitific breakthroughs in pest control that go well beyond what has been achieved so far.
It is time the ‘bad press’ about 1080 was put to rest. It has not always been used wisely and well, and there is always room for improvement. But it should not be viewed as a ‘necessary evil’. We are lucky to have it. 66 Smart electricity meters: How households and the environment can benefit
Update Report 67 June 2013
1. Introduction
In June 2009, the Parliamentary Commissioner for the Environment released a report titled Smart electricity meters: How households and the environment can benefit. The report focused on concerns that the new electronic meters being installed in households around New Zealand by electricity retailers were not as ‘smart’ as they should be, and thus not provide benefits for householders or the environment.
2. Background
When the report was released in 2009, a large-scale installation of electronic meters in New Zealand was just beginning, with the roll-out of meters to 1.3 million households due to be completed by 2013.
These new meters benefit electricity retailers because they allow remote meter reading, more accurate meter reading, and remote connection and disconnection. A range of add-on features can be included in meters that give householders more control over their electricity use, and thus potentially reduce their bills and consequently the environmental effects associated with the supply of electricity.
The New Zealand roll-out of electronic meters is unusual internationally, in that it has largely been left to the market. In other countries, regulatory bodies have been much more involved in specifying what these meters could do. In New Zealand, the retailers were left to decide on the features the meters contained. The opportunity for these meters to provide a wider range of benefits at little extra cost has been lost.
The Commissioner’s interest is in the potential environmental benefits enabled by really smart meters. Around a quarter of New Zealand’s greenhouse gas emissions from the energy sector come from burning coal and gas in power plants to generate electricity. In addition, as the demand for electricity grows, more power plants must be built, and all new power plants have environmental impacts. The use of electricity typically reaches an annual peak about 6 pm on the coldest day of winter, when people get home from work and switch on heaters, lights and appliances. Growing demand for peak power leads to the need to build more power plants and to invest more in power lines. And at peak times, the power plants that burn gas and coal are used at high capacity resulting in high carbon dioxide emissions. Consequently, peak electricity use is very expensive – both economically and environmentally. 68
3. Main findings of the investigation
International evidence examined during the investigation showed that smart meters - with the right features - have a real and long-lasting impact on household electricity use, both at peak times and over time. It was found that the electronic meters that were being rapidly rolled out across New Zealand are not particularly ‘smart’. They could have included a low cost component that would link the meter to a home area network – a network that connects the devices in the home that use electricity. This would have made it easy for householders to access real-time information on their electricity use using conveniently located displays, and enabled the introduction of smart appliances.
Regulatory intervention should not be done lightly and this is an area of rapid technological change. But the opportunity for delivering benefits to the householder and the environment at a small increase in the cost of the meters has been lost; retrofitting additional features is likely to be much more expensive.
4. Reaction to the report
Government and Political Parties The report was initially welcomed by the then Minister for Energy and Resources, Hon. Gerry Brownlee who stated that he personally believed “…the next generation in electricity innovation will revolve around smart meters, smart grids and smart appliances”, and that smart meters “have to be genuinely smart and not just revenue tools for the retailers.”1
However, in December 2009, the Electricity Commission presented a report to the Minister, recommending against regulation.2 This conclusion was based on a benefit-cost analysis, which unfortunately lacked transparency and adequate referencing of data sources.3 It was, however, evident that the estimated benefits were considerably lower than those in overseas studies and the costs much higher. For instance, the cost of a home area network silicon chip was taken to be between four and ten times higher than in Australia.4
1 Press Release, “Smart meters the smart way”, 25 June 2009. 2 Electricity Commission, 2009, “Advanced Metering Infrastructure in New Zealand: Roll-out and Requirements”. 3 NZIER, 2009, “Cost-benefit analysis of additional smart meter functionality: Home area networks and in-home devices”. 4 Department of Primary Industries, 2008, “Advanced Metering Infrastructure: Review of basis of selection of Zigbee Smart Energy profile for HAN functionality in Victoria”, p.4. In March 2010, the Minister announced that he had accepted the advice of the Electricity Commission.
In contrast, the Labour Party’s Energy Spokesperson said “The Government needs to set standards for smart meters, so that those meters can live up to their name …Smart meters need to be able to deliver two-way communication via a reliable network so that they can work for the benefit of consumers as well as retailers.”5
The Green Party proposed legislation to set minimum requirements for the provision 69 of smart meters and require providers of the meters to inform domestic consumers of their options. In February 2010, The Smart Meters (Consumer Choice) Bill was drawn from the member’s ballot, but did not proceed.
In August 2009, the Commissioner spoke on smart meters to the Commerce Select Committee for the first time. In December she returned to provide her response to comments from industry representatives and others who had been asked by the committee to provide their views on the subject.
The Commissioner appeared before the committee for a third time in August 2011, and the committee finally published their findings the following month.6 The committee did not reach consensus. While the main report recommended the House only take note of the Commissioner’s findings, it also included two ‘minority views’ from opposition parties. Both the Labour Party and the Green Party reiterated their support for the main findings of the report, with the former noting that the Electricity Authority had: “taken a hands off approach that appears to favour the electricity retailers above consumers.”7
International Commentators
In December 2009, the Commissioner met with a team from the International Energy Agency (IEA). Subsequently, the IEA recommended that the Government “Review the decision with regard to the regulation of the roll-out of advanced metering technology and take into greater consideration the needs of the future smart grid.”8
In December 2010, the Commissioner met with a team from the Organisation for Economic Cooperation and Development (OECD). The Economic Survey that followed the team’s visit contained support for the Commissioner’s views on smart meters.9
5 Press Release, “Government can make smart meters live up to their name”, 25 June, 2009. 6 A source of confusion that persisted throughout the Commerce Committee hearings was the use of the terms ‘HAN-functional’ and ‘HAN-capable’. A HAN is a home area network. The Commissioner said that smart meters should be HAN-functional. The Electricity Authority said that the meters were HAN-capable, leaving the impression that these were the same. A HAN-capable meter must be retrofitted with an additional device to become HAN-functional, requiring a visit from an electrician to the house. 7 Commerce Committee, “Report from the Parliamentary Commissioner for the Environment on Smart Electricity Meters”, 2011, p.9. On 1 November 2010, the Electricity Commission was replaced by the Electricity Authority as the major regulator of the electricity sector. 8 IEA, “Energy policies of IEA countries – New Zealand 2010 review”, p.114. 9 OECD, “OECD Economic Surveys: New Zealand 2011”, p.161. Industry and other commentators
Several major retailers rejected the report’s conclusion that the opportunity was being missed, claiming instead that retrofitting existing meters was a low-cost and straightforward solution. For example, in September 2009 Mighty River Power’s Regulatory Manager Robert Allen commented: “Mighty River Power’s smart meter deployment is capable of being upgraded to meet multiple standards in 70 the future”.10 It should be noted that thus far no significant upgrades have been undertaken.11
Mike Underhill, the chief executive of the Energy Efficiency and Conservation Authority (EECA), broadly agreed with the main findings of the report, but made the very good point that smart meters “need to be coupled with smart appliances, and electricity companies need to offer smart pricing so that this triangle can come together.”12
Sue Chetwin, Chief Executive of Consumer NZ, supported calls for more regulation of smart meters and the electricity system in general, saying that, “…a light- handed regulatory approach to electricity supply does not work. Despite that, the rollout of smart meters is being driven by the market. Electricity is too important a utility for that.”13
Ralph Matthes, the Executive Director of the Major Electricity Users Group welcomed the report, commenting that, “Increasing the elasticity of demand side response by effective use of smart meters will improve competition, lower relative prices and better use resources. The environment will also be a winner.”14
Neil Cheyne, General Manager of Electronics Design at Fisher and Paykel stated in an interview that smart appliances could be available in one to two years. He went on to say that “The technology is readily available if consensus is reached. The issue is not a technology one, the issue is that the electricity industry does not know what it wants.”15
10 Letter from Mighty River Power to the Commerce Select Committee, 14 September 2009. 11 About a million ‘advanced meters’ have now been installed in homes and businesses in New Zealand (Energy News, “Trust Power tests market for smart meter supply, services”, 20 December 2012). As of March 2013, none are HAN-functional with one small exception. About 350 homes that are taking part in Genesis Energy’s HomeiQ trials have HAN-functional smart meters (Genesis Energy, pers. comm. 8 March 2013). 12 Press Release, “Smart pricing, smart appliances needed alongside smart meters”, 25 June 2009. 13 Consumer, “Smart meters not so smart”, 2 Jul 2009. 14 Press Release, “MEUG welcomes PCE report on smart meters”, 25 June 2009. 15 Energy News, “Smart appliances ready if the industry wants them – F&P”, 11 March 2010. 5. Responses to the Commissioner’s recommendations
The report contained nine recommendations to Ministers dealing with a range of issues associated with smart meters. A letter detailing the responses to these was received from the then Minister of Energy and Resources, Hon Hekia Parata, on 5 July 2011.
However, since this is an area of rapid change, the Commissioner sent a letter 71 early this year to the current relevant Ministers, requesting updated responses to the recommendations. These updated responses are contained in two letters in the Appendix to this report – one from the Minister of Energy and Resources, Hon Simon Bridges, and one from the Minister for Climate Change Issues, Hon Tim Groser.
6. Some continuing issues
Since the roll-out of ‘smart meters’ by electricity retailers is nearly complete, some of the recommendations in the report have been superseded by events. The focus now should be broader – on the host of ways in which New Zealand’s electricity grid can be made smarter.
What is a smart grid? Often described as the energy internet, smart grids involve using modern digital communication technology to allow greater control of the whole electricity system, and make it more effective and efficient.16 This includes linking with end user area networks (through really smart meters), establishing better interconnection between distributed energy sources such as photovoltaic cells, and (ultimately) enabling the integration of electric vehicles into the system. The development of a much smarter grid will be a fundamental requirement for reaching the Government’s target for 90% of electricity to be generated from renewable sources by 2025.
The smart meters report stressed that both households and the environment benefit from reducing electricity consumption especially at peak times. Lines companies are also beneficiaries of reducing peak power because it avoids or delays the need for expensive upgrades in line capacity. But in the same way in which the retail companies rolling out the smart meters have failed to put in the functionality that would benefit householders and the environment, they have also not put in the functionality that would benefit lines companies.
This is clearly illustrated in Waikato where the lines company WEL Networks are currently installing ‘smart boxes’ in 45,000 homes and businesses in order to gain the ability to manage the network better. The smart boxes include the capacity for consumers to better control their electricity use in the future.17 In effect, thousands of Waikato households will soon have two digital electricity meters – one installed by the retailer, Genesis Energy, and another installed by the lines company WEL Networks.
16 A simple example is automated reporting of an area experiencing a power cut. 17 http://www.wel.co.nz/Smarter-Homes/Smartbox/ The Smartboxes contain a Zigbee Home Area Network radio system. The Chair of New Zealand’s first Smart Grid Summit has summed up the situation:
“Nobody is currently taking leadership in the country; and this is certainly not helped by the fact that the electricity industry structure in New Zealand is rather unique. While the line companies (distributors) would accrue the greatest benefits from a smart grid, the retail companies are the ones that have been put in charge of the so-called smart meters.”18
72 Currently, there is an expectation by some that New Zealand will have a surplus of electricity in the next few years, and this will certainly be the case should the aluminium smelter shut down. However, the country is clearly experiencing significant growth in peak power, as evidenced by the construction of new gas peakers in Taranaki.19 These power plants are, of course, adding to the country’s greenhouse gas emissions.
Some electricity retailers are experimenting with providing niche products that could give householders more control of their energy consumption. But inconsistency across retailers and across the country does not provide a basis for the development and marketing of smart appliances.
A research team at the University of Canterbury’s Electric Power Engineering Centre has been granted over six million dollars to find ways of making New Zealand’s national grid smarter.20 This is good news, but technology alone will not address the problem of our fragmented electricity system in which the investment decisions of different companies are driven by such different incentives.
18 Budde, Paul. 2010. New Zealand - Smart Grids Analysis 2010. Available online at www. budde.com.au/Research/New-Zealand-Smart-Grids-Analysis-2010.html 19 A 200 MW gas peaker near Stratford was commissioned in June 2011 and a 100 MW gas peaker near Waitara was commissioned in March 2013. 20 Press Release, “Researchers out to demystify smart grids”, 11 June 3013. Water quality in New Zealand: Understanding the science
Update Report June 2013 73
1. Introduction
In March 2012, the Parliamentary Commissioner for the Environment released a report on water quality titled: Water quality in New Zealand: Understanding the science. The report focused on the three main freshwater pollutants: pathogens, sediment, and nutrients.
The report differed from the Commissioner’s previous reports in that it contained no recommendations. Its purpose was to provide an accessible, educative guide to water quality science, to help inform public debate and assist decision making. This update report describes the response to the 2012 report, and explains how it has been used.
2. Background
Water quality has become a challenging and contentious environmental issue in New Zealand over the last decade. The science of water quality is very complex and much of the information required to fully understand it is highly technical.
The Government has begun a series of reforms aimed at improving the way in which fresh water is managed in New Zealand. One of these reforms would involve greater use of collaborative planning processes and it is vital that this be underpinned by a widespread understanding of the relevant science.
In 2010 the Commissioner delivered a presentation on water quality science to Members of Parliament. A request from several MPs for more led to the development of greater expertise on water quality within the office and eventually to the preparation of the 2012 report. 3. What the report covers
The report is focused on the three major freshwater pollutants in New Zealand – pathogens, sediment and nutrients, and covers the following:
The history of water quality in New Zealand is outlined and shows how its nature 74 has changed over time. Pathogens from town sewage caused disease and death, and deforestation caused erosion which continues to lead to sedimentation of waterways. Today the combination of two nutrients – phosphorus and nitrogen – can lead to algae and weeds growing in water.
The sources, impacts, and measurement of pathogens, sediment, and nutrients are described in turn.
The reasons why some water bodies are more vulnerable to pollution than others are explored. The greater the natural vulnerability of a body of fresh water is, the greater the impact that human activities have on it.
Some approaches to mitigation – ways of protecting and improving water quality – are described.
A case study of the Manawatu River is presented to illustrate how science aids understanding of the state of a particular water body.
The report concludes with a summary of the main points and presents a framework for examining particular water quality problems.
4. Reaction to the report Over recent years public concern about water quality has grown and the report generated wide media interest. It featured in news articles across many of the country’s major newspapers, and was discussed in editorials in The New Zealand Herald, The Press, Waikato Times, The Southland Times and the Taranaki Daily News. The Dominion Post also ran an opinion piece written by the Commissioner. Television New Zealand and TV3 both ran stories featuring the report.
Government and Political Parties The Minister for the Environment, the Hon Amy Adams, made the following comments on the report in a letter to the Commissioner:
“…the report was used as an exemplar for effectively explaining complex issues for a lay audience. The report has also been commended to external partners as an example of good, clear communication of science.”
“The report is routinely provided to policy staff as an introduction to water quality science” “We expect that your approach to thinking about water quality problems will be useful to councils as they practically consider what is needed to manage within limits.” 1
Green Party water spokesperson Eugenie Sage commented:
“It is great to have this resource which can support informed debate and decision- making about how to begin the long process of cleaning up our rivers and lakes”.2 75
Scientists The Science Media Centre contacted experts in water quality and freshwater science for reaction to the report. Dr Clive Howard-Williams (NIWA), Professor Jenny Webster-Brown (University of Canterbury & Lincoln University) and Professor David Hamilton (Waikato University and President of the NZ Freshwater Sciences Society) all responded.3
Professor Howard-Williams stated “This is a good report that covers the basics of the science and is admirably concise. I agree with the decision to focus on the big three contaminants.” In contrast, Professor Webster-Brown thought the report was too simple and should have covered urban contaminants.
Professor Hamilton’s view was that “The report by the Parliamentary Commissioner for the Environment (PCE) provides a wide ranging snapshot and history of water quality changes in New Zealand, suitable for educating and informing the public, water stakeholders, policy-makers and politicians.”
Others Bruce Wills, President of Federated Farmers wrote: “If you have an interest in water, a report by Jan Wright, the Parliamentary Commissioner for the Environment, “Water quality in New Zealand: Understanding the Science”, is a must read. … farmers hope it will spark a much needed discussion about some difficult decisions we all face.” 4
Beef + Lamb New Zealand Chairman, Mike Petersen commented that the report was written: “in a plain and easy to understand fashion” and “will provide an excellent resource for anyone with an interest in water quality issues.” 5 Ian Mackenzie, Federated Farmers National Board water spokesperson also welcomed the report.6
1 Letter from Hon Amy Adams, Minister for the Environment, 9 May 2013. 2 Press Release, “Green Party welcomes the PCE’s water report”, 20 March 2012. 3 Press Release, “Water quality report – scientists respond”, 20 March 2012. 4 Sunday Star Times, 25 March 2012. 5 Press Release, “Water quality report an excellent resource”, 21 March 2012. 6 Press Release, “Federation backs report to improve water science”, 20 March 2012. The report was commented on by Environment Southland in its Long Term Plan as follows:
“As the Parliamentary Commissioner for the Environment reported this year, the links between intensive land use and deteriorating water quality are strong, obvious and undeniable. Jan Wright’s report endorses the conclusion of our own State of the Environment Report on freshwater in Southland, which found that the 76 state of our lowland waterways was generally poor and getting worse because of intensified land use – principally dairy farming.” 7
In its decision on the Horizons Regional Proposed One Plan Appeals, the Environment Court quoted from the report to explain important differences between the two nutrient contaminants, nitrogen and phosphorus:
“The most concise explanation of the difference we saw is in the report of the Parliamentary Commissioner for the Environment…” 8
Massey University now use the report in training teachers and a number of schools have expressed an interest in using it as a teaching resource.9 Consequently, arrangements are being made to send a copy to every high school in the country.
5. Conclusion
The report continues to be one of the Commissioner’s most requested publications. Another report on water quality focused on nutrient contamination is currently in preparation.
7 Environment Southland, Long Term Plan 2012-2022 p.2. 8 Decision of the Environment Court. 31 August 2012. Manawatu-Whanganui Regional Council Proposed One Plan Appeals. Section 5-2. 9 Letter from Massey University August 2012.