AOTEAROA WATER ACTION UPDATE
Public Water, Private Choices? Plan Change 8 And The Future Of Freshwater Allocation
Watchdog no. 172 (August 2026)
Looking at the wider context within which freshwater allocation sits, Aotearoa New Zealand is entering a period of significant institutional change: resource management legislation is being rewritten; the future of regional councils remains uncertain; and council-controlled companies (CCOs) are being incorporated to manage wastewater, water supplies, and stormwater.
At the same time, new industries are emerging and freshwater is becoming increasingly scarce. Despite having the power to allocate water amongst competing activities2, most regional councils have failed to do so at all—let alone in a comprehensive way. Consequently, where water is fully allocated, what we see is water trading between private interests rather than greater public control.
The longer this continues, the greater the risk that private investment in increasingly valuable water will limit system change and our ability to shape the outcomes our communities expect and deserve—whether those be jobs and career paths, the ability to swim in our rivers and lakes, or access to potable water at affordable prices. Put another way, if we don’t determine now how democratic authority over one of New Zealand’s most strategic public resources will be exercised in the decades ahead, freshwater allocation may continue to evolve through administrative practice, historical allocation and market forces rather than through deliberate democratic decision-making and publicly agreed principles. The opportunity cost for communities could be significant.
This raises questions about the direction of resource management reform, the changes that might be required to the Overseas Investment Act to regulate overseas interests in water, and the powers of the Commerce Commission to regulate water markets. But for Aotearoa Water Action (AWA), the immediate question is does Environment Canterbury’s Plan Change 8, take us towards stronger democratic governance of water allocation? Or does it do the opposite and limit the pathways available to us?
Plan Change 8 (PC8) to the Canterbury Land and Water Regional Plan is Environment Canterbury’s (ECan) response to the Supreme Court’s decision in Cloud Ocean3 (The AWA decision), which quashed two high-profile water bottling consents in north Christchurch. These consents were essentially the product of historical allocation, a development opportunity, and incorrect advice. Consenting planners at ECan, having advised that water bottling could proceed under the existing permits, created a process “workaround” to allow the changes of use from wool scouring and meat works processing to water bottling. And that creative pathway was ultimately deemed unlawful.
One of PC8’s key changes is to provide a new and lawful consent pathway to allow an existing water permit to support a new “use” of water—through consent substitution. The intention is to provide consent flexibility so that water can be used for new activities as economic circumstances change—without having to surrender a permit and reapply. Interestingly, this does not apply to water bottling, which PC8 seeks to prohibit due to its cultural effects. That’s a win if the rule survives the Freshwater Planning Process. But its inclusion at this stage begs the question: why not prohibit or limit other activities?
ECan has argued that “flexibility of use” will deliver better outcomes—that water use may shift to activities that are more productive, more resilient, or that will deliver greater public benefit than those contemplated when the original permits were granted. One of its officers suggested it could prompt a shift from dairy irrigation to watering your orchard—and perhaps it might. Our concern is that “use” of water could equally shift to activities that deliver none of these positive outcomes.
“New” uses that currently can’t proceed will be enabled by PC8. Things like managed aquifer recharge and water storage (to support intensive dairying), artificial intelligence (AI) data centres, hydrogen production, waste to energy plants, and conversion from arable farming to dairy. And, by virtue of being relatively new activities in the landscape, it’s likely the effects of some of these activities will be difficult to manage via the District Councils’ land-use planning frameworks.
Regardless, the question is not whether water use should evolve (it should), but what should determine the direction of that evolution: commercial opportunity, or commercial opportunity constrained, or even incentivised, by democratically-determined community outcomes? AWA supports the latter. But unfortunately, PC8 doesn’t propose a framework for deciding whether potential new uses represent acceptable outcomes or will result in sufficiently positive effects. Instead, the proposed rule and policy framework allows the evolution of water use to continue to be driven primarily by the choices of existing consent holders responding to changing commercial opportunities.
In that sense, PC8’s approach to “change of use” reflects past practice and protects the status quo. Perhaps this indicates ECan’s preference—perhaps because it reduces the likelihood of judicial review of consents granted unlawfully in the past. Or perhaps it indicates that change is difficult once systems are embedded. It’s worth exploring the latter. Water trading in fully allocated catchments began in the early 2000s, so it’s fair to assume Cloud Ocean was not the first consent to experience a “change of use.” For decades, historical allocation, administrative practice (whether lawful or not), planning decisions, and private investment have evolved together.
Whether or not consent flexibility was ever legally certain under the regional plan, businesses, lenders, and investors appear to have come to rely on the way the system has operated in practice. That reliance will have influenced land values, investment decisions, and commercial behaviour. Any move away from that embedded operating model would inevitably change the investment landscape. And it would likely face resistance—with a war chest.
Viewed in that light, PC8 is both a product of Canterbury’s past allocation practices and a regulatory shift that may further reinforce private and corporate control of what water is, and could be, used for. This illustrates that the hardest part of freshwater reform is unlikely to be designing a new allocation framework. It will be transitioning from the one we already have.
The framework we have in Canterbury is set out in the Canterbury Land and Water Regional Plan (CLWRP)4 and it reads like a plan written for another era. First notified in 2015, it has aged quickly. It is full of rules regulating irrigation and hydro electricity generation, but it fails to manage other large users of water. And it acknowledges but fails to address competing demands in overallocated catchments. Perhaps that’s understandable. At the time it was developed, irrigation dominated Canterbury’s allocation debates, and few could have anticipated water bottling, AI data centres, hydrogen production, carbon removal technologies, or whatever industries may emerge over the next 30 years.
Planning frameworks can’t be expected to predict future technologies. But that’s precisely why we need to establish principles capable of evaluating them and embed those principles in strong rules and policy. Obviously, these should be applied to evaluating any new use of water—especially in catchments that are likely to become fully allocated. Unfortunately, any planner looking to assess a new use of water (other than irrigation or electricity generation) against the current CLWRP is left asking just one question: is it an efficient use of water considering the volume that can be taken? That – is - it!
The plan behaves as though the effects of the use of water don’t matter and that needs to change. Its definition of “efficiency” needs to change too. The Plan also fails to address what happens when there is no more water to allocate. PC8 is the very blunt answer to that problem. Of course, the CLWRP and its sub-plans are about to be reformed by the Natural Environment Bill. Decision-makers should be asking whether the decisions, and subsequent investments, made under the CLWRP post-PC8 will affect the transition to a new system.
At the same time PC8 is being notified, Parliament is considering the Natural Environment Bill5. The Bill begins to recognise that freshwater allocation requires more sophisticated mechanisms than those developed under the Resource Management Act (RMA). It contemplates comparative allocation methods, tenders and auctions, and acknowledges that scarcity requires deliberate choices.
But it leaves two critical questions largely unanswered. The first concerns allocation principles: What public outcomes should freshwater allocation seek to achieve? The second concerns the transition: How do regions like Canterbury move from today’s allocation system to tomorrow’s? The second may prove the harder to resolve. It’s worth noting that both the RMA and the Natural Environment Bill recognise the need to give certainty to investors by ensuring that when a permit expires and comes up for renewal, the decision-maker must have regard to the value of the investment to the existing consent or permit holder6.
Although water permits are not property rights,7 they underpin billions of dollars of investment. As discussed earlier, they influence land values, lending decisions, and business investment—all of which will be underpinned by assumptions about the regulatory system. Every regulation that increases confidence in the longevity and future flexibility of existing permits will create expectations. And every investment made based on those expectations increases reliance on those regulations.
Some investment will come from local businesses. Other investment may come from banks, institutional investors or transnational corporations with access to substantially greater financial and legal resources. That matters when the public or Governments later seek to change the regulatory framework—it shouldn’t, but it does. Therefore, there remains a risk that PC8, even if only in force for three to five years, will free up underutilised allocation, encourage significant investment in industrial infrastructure, and limit future regulatory options. Or at least the outcomes any new allocation framework seeks to achieve.
Plan Change 8 may prove to be one of the most important freshwater planning proposals Canterbury has considered for many years because it sits at the intersection of the allocation system we have inherited and whatever comes next. And also, because how industries and permit holders respond to “flexibility of use” will have consequences for future generations.
Imagine a currently underutilised irrigation consent being transferred to support a large new industrial activity that could not presently proceed. Significant investment follows. Years later, when the permit comes up for renewal, decision-makers are required to consider the value of that investment. Whether the industry is a data centre, hydrogen production or something not yet imagined is almost beside the point. The broader question is how those investments influence the choices available to future generations.
Analysis of PC8 shows the need for detailed changes to the plan change and also poses some big questions that are just as relevant to Resource Management Reform:
Does Canterbury need an explicit allocation framework rather than continuing to rely primarily on historical allocation and an increasingly active transfer market?
Should the long-term effects of planning decisions on future allocation options be considered?
Will greater flexibility further over-allocate catchments—in practice or on paper?
What does permit flexibility mean for water quality and the cost of water supplies if dairy expansion is enabled?
Should Parliament establish transition principles before regions further embed flexibility into fully allocated catchments?
If regulations support market allocation, should water be a sensitive asset under the Overseas Investment Act?
Ultimately, the question raised by both PC8 and the Natural Environment Bill is not simply how water should be used. It is who should determine how the use of scarce freshwater evolves: existing consent holders responding to commercial opportunity, or democratic institutions applying publicly agreed allocation principles. We think the latter because, in AWA’s view, public water requires public choices.
Resource Management Act 1991 (New Zealand Legislation): https://www.legislation.govt.nz/act/public/1991/69/en/latest/#DLM232560. See s30(1)(fa)(i) and s30(4)(e).↩︎
The Cloud Ocean decision: https://www.courtsofnz.govt.nz/assets/cases/2023/2023-NZSC-153.pdf↩︎
https://www.ecan.govt.nz/your-region/plans-strategies-and-bylaws/canterbury-land-and-water-regional-plan/canterbury-land-and-water-regional-plan↩︎
https://environment.govt.nz/acts-and-regulations/acts/natural-environment-bill/↩︎
Section 104(2A) of the RMA and s156(g) of the Natural Environment Bill.↩︎
See s122(1) RMA: “A Resource Consent Is Neither Real Nor Personal Property”.↩︎
Watchdog 172 -- August 2026
Non-Members:
It takes a lot of work to compile and write the material presented on these pages. If you value the information, please send a donation to the address below to help us continue the work.
Foreign Control Watchdog, PO Box 2258, Christchurch, New Zealand/Aotearoa.
Email