As noted on our Bulletin page in July 2008 ("Lake Taupo Water Quality – Nitrogen Leaching Case"), Simon Berry and Craig Malone have been representing the Waikato Regional Council ("Environment Waikato") in relation to Regional Plan Variation 5 (RPV5) to the Waikato Regional Plan, the purpose of which is to regulate land uses in the Lake Taupo catchment to restore and maintain the long term water quality of the Lake, in the face of a gradual decline in water quality as a result of diffuse nitrogen discharges, predominantly from pastoral farming activities.

The interim decision of the Environment Court has just been released, containing the Court's rulings on the key substantive issues. Challenges by Carter Holt to some of the key planks of the variation, particularly in terms of whether it is appropriate to "grandparent" nitrogen leaching entitlements were withdrawn during the course of the hearing with the result that most of the major aspects of the variation had already been confirmed.

The Regional Council’s position was therefore upheld on all major contentious issues. Further caucusing of expert planning witnesses is to take place in relation to re-drafting of the rules to deal with the land use and discharge issue. Appeals to the High Court on questions of law are also possible.

The key elements of the regime established under RPV5 can be summarised as follows:

• It imposes a "cap" on nitrogen discharges associated with farming activities and restricts farmers from discharging beyond that level by reference to a "nitrogen discharge allowance" (or NDA) and compliance with a nitrogen management plan.
• Establishes the means for a nitrogen trading regime to be established.
• Establishes a Public Fund, administered by the Lake Taupo Protection Trust, to achieve a 20 percent reduction in the manageable amount of nitrogen being leached in the catchment.

The key contentious issues which had to be determined by the Environment Court related to

• Whether farming should be specifically identified as a land use to be managed to facilitate the restoration of the Lake's water quality. Farming interests argued strongly against this. The Court held that farming should be specifically recognised as the predominant source (92%) of nitrogen discharges to the lake.
• Whether consents should be needed for farming activities which leach high amounts of nitrogen to groundwater. Farming interests strongly argued that this should be a permitted activity. The Court held that high leaching farming activities should require consent as a controlled activity, as argued for by Environment Waikato, that being the most appropriate activity status to implement the objectives and policies of the variation and to assist Environment Waikato to carry out its functions.
• The activity status of departures from a NDA (restricted discretionary, discretionary or non-complying). Farming interests argued strongly for restricted discretionary/discretionary activity status. The Court held that departures from an existing NDA should be considered as a non-complying activity, as argued for by Environment Waikato, on the basis that that activity status sends a strong signal that departures are not generally condoned and a strong case needs to be made to support them.
• The leaching rate for pine forests planted on improved pasture and nitrogen fixing species such as gorse and broom. The Court held that the deemed leaching rate for pine forest planted on improved pasture is 3 kgN/ha/year and the deemed leaching rate for nitrogen fixing species is 2kgN/ha/year on the basis that these are the likely long term leaching rates.
• Whether the rules of the variation should be land use and discharge rules. The Court held that it is preferable if the rules in the variation relate to the land uses and expressly authorise discharges of nitrogen associated with those land uses.