Mike Yardley: Who benefits from bottling New Zealand's pristine water?

The commercial extraction and export of New Zealand-sourced pristine drinking water is a political hot potato.
STEVE DIPAOLA

The commercial extraction and export of New Zealand-sourced pristine drinking water is a political hot potato.

OPINION: In a city with world-beating and untreated artesian drinking water, it constantly astounds me how much premium retail shelf space is devoted to bottled water.

Why pay for a plastic fantastic when Christchurch Tap is, well, on-tap?

Branded water is a marvel of marketing guile – proof positive that consumers are suckers for craftily packaged products.

One proposal is to pipe water from the Southern Alps out to Jacksons Bay, on the West Coast, and out to tanker ships ...
DAVID ALEXANDER/FAIRFAX NZ

One proposal is to pipe water from the Southern Alps out to Jacksons Bay, on the West Coast, and out to tanker ships anchored about 5.5km offshore for export.

Of course beyond the domestic market, it's a very different story for cities and countries that would never dream of quenching their thirst or brushing their teeth from the town supply.

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Which is why the commercial extraction and export of New Zealand sourced pristine drinking water, without any payment of royalties, has become such a hot potato.

The latest local flashpoint appears to be the former Kaputone wool scouring plant in Belfast, which Cavalier Carpets is in the process of selling.

With it will go a lucrative water consent allowing over 120 million litres of water a month to be bottled. That's 50 one-litre bottles a second. The consent doesn't expire until 2032 and the only cost is an occasional $100 administration fee from the local council, should they bother to inspect the operation.

Then there is Okuru Enterprises and its grand plans to pipe 800 million litres a month of glacial water in South Westland directly onto tanker ships off Jackson Bay, for export.

Environment Minister Nick Smith continues to characterise the growing public din over bottled water as a triviality, defiantly tone deaf to the fact that the disquiet is transcending political party lines.

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And he rolls out some seriously big numbers to try and silence the squealers. According to his office, our annual freshwater resource is 500 trillion litres, of which 10 trillion litres is extracted. Six trillion is harvested for irrigation, over two trillion by industry, two trillion for town water supplies and half a trillion for stock water.

Bottled water in 2016 accounted for 8.7 million litres. Nick Smith would argue it's the proverbial drop in the bucket, but it also underscores the enormity of the planned bulk-water extractions in Belfast and South Westland.

Nick Smith has also challenged Kiwis to "appreciate that our major export earners like horticulture and dairying are water intensive. A kilogram of beef takes about 400 litres of water to produce. A litre of wine, about 200". 

In recent speeches, his estimates for the production of a litre of milk have wildly varied from 250 to 400 to 800 litres of water.

But why should the commercial extraction of water be viewed any differently than other extraction industries, like gold, oil or natural gas?

Implementing the requirement for a royalty to be paid, volumetrically, not only would incentivise greater efficiency measures by commercial users, but it would advance our economic interests, providing a direct, on-going return to the public coffers.

Labour and the Greens want a price placed on freshwater when it's extracted for commercial purposes, whether you're irrigating land, producing beer or flogging off pristine water to the Middle East in a bottle with a fancy label.

Unlike the Environment Minister's flinty resistance to the notion of water extraction royalties, the Prime Minister has signalled he's open to it.

John Key famously cultivated a keen political antennae and Bill English is clearly eager to maintain those frequencies. Bottled water is the classic kind of slippery eel no government wants to lose control of, in election year. A sleeper issue with explosive capability.

Many commentators have already likened it to Helen Clark's aloofness on light bulbs.

But if the government was to embark on a clip-the-ticket regime for commercial bulk-extraction, the detail will be devilish. First, there is the thorny matter of the Treaty gravy-train.

John Key repeatedly stated "no one owns the water" to diffuse the litigation dreams of grasping iwi interests.

Would a royalty regime embolden renewed legal attempts by Maori to claim water ownership rights and the financial gusher?

Secondly, volumetric royalty payments would have to be calibrated so as not to spike consumer prices whether it be a bottle of pinot noir, lamb chop or bag of apples.

Real policy details on the pricing regime and its ripple effects, good or bad, is where this debate needs fleshing out.

 - Stuff

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