Opinion by Tony Orman
Late 2019 when visiting Tasmania I bought a newspaper “The Australian” and read an article about the impact of tradable water rights on Australian farmers. The headline was “Plea to Rein in Water Barons to Help Suicidal Irrigators”.
The article reported that top Australian “farm groups have privately begged state and federal governments to take immediate action to curb alleged speculation by ‘water barons’, to defend suicidal irrigators” – i.e. growers and farmers.
In 2014 the Australian government had removed all restrictions as to who could trade water, allowing non-farming individuals and companies that did not use water, to enter the market and speculate.
The corporates moved in and prices climbed steeply from a long term average of $135 a mega-litre to virtually $1000 – a 750% increase. The additional price pressure would be the difference between surviving the drought or going bankrupt, said the Australian Grape and Wine Association. Then came the dark stark reality of bankrupted farmers committing suicide.
“It’s not just the potential for economic damage, but the human cost with many accounts emerging of suicidal irrigators,” said “The Australian”.
One of the speculator corporates was Duxton Water, a publicly listed company, established by former high-flying international Deutsche Bank traders.
“Duxton Water has no land and uses no water, have bought and hoarded water rights in vast quantities and cornered the market, creating a price squeeze.”
Money and profits were of course Duxton’s sole motivation.
Over the three or so years since it listed on the stock exchange, Duxton Water amassed water rights worth $256 million, controlling 74 billion litres of water. Shareholders reportedly enjoyed a return of almost 30 percent to June 2019.
Warning for NZ
It’s a strong warning to New Zealand. In the turbulent 1980s tradable water rights surfaced with the advent of the free market “Rogernomics” doctrine. Basically free marketeers put an economic value on natural resources, the theory being that people valued things most when they have to pay for them. The more they paid, the more they valued them, so the edict goes.
The idea of charging for water was not confined to fleecing farmers and growers. The public’s outdoor recreation was in line for impact. Electricorp in 1987 tried to charge the New Zealand Canoe Association $10,000 one weekend for use of water in the Mangahao River from its dams in the Tararua Ranges.
In recent years the water issue and ownership has became muddied,. In 2012, Prime Minister John Key shrugged off a question about it and blithely and carelessly uttered “nobody owns water”.
Since then controversy has largely ensued around bottled water as the then National-led government allowed overseas speculators, such as Chinese, to move in on the resource. New Zealand’s bottled water exports skyrocketed in 2019, up more than 270 per cent and most of it headed to China.
Reports indicated water could be a very valuable commercial resource if trading was allowed. There was a growing fear from some quarters that corporates like Amatil (Coca-Cola) and Nestle were eyeing water use rights in order to create and control a highly profitable global freshwater supply market.
The increasing scarcity of available freshwater aggravated by climate change, is making water increasingly valuable in monetary terms. Intensive lucrative horticulture such as grape growing for the wine industry is demanding more and more water. So is intensive dairying increasingly developed on the corporate model. Both the wine and dairying sectors are being bought up by foreign based corporates. Powerful business interests could lobby increasingly cash-strapped councils and governments to set water takes and pollution discharge at levels which would compromise the life supporting capacity of rivers and lakes.
The New Gold
The corporates and foreign ownership had moved in on the new found “gold”. Aotearoa Water Action’s Nikki Glading said “We’re no longer seeing little small plants operating locally, we’re seeing large plants that have massive investment from overseas.”
Maori are watching with a keen interest.
Matthew Tukaki, Executive Director of the New Zealand Maori Council told the National Freshwater Conference in Wellington in February, that Maori had a guardianship over water.
“Let me be clear, Maori have a guardianship, ownership and protection role when it comes to the nation’s freshwater ways and let me be even clearer – if what has been happening to our freshwater eco-systems and ecology over the last hundred years was working then we would not be a position where we have hundreds of at-risk waterways up and down and all around the country.”
“The truth is we now have deepening problems not just with the state and cleanliness of our waterways but also the allocations granted through local government, the extracting of water by foreign companies, the degradation of our aquifers and more,” said Matthew Tukaki.
He called for action instead of just talking about the problem.
“We need to cut this talk —- the work needs to start now, we need to set much more ambitious targets and it must be led on partnership with Maori,” he said.
A Water Act?
Then there’s outdoor recreation groups, particularly the trout fishing public, which want to be involved in the debate and decision-making. Perhaps immediate steps should be taken to pass a Water Act to put ownership of water firmly and clearly into public ownership with strong safeguards written in to ensure its future.
A Public Ownership Water Act could:-
(a) put water into public ownership
(b) Ban tradable water rights
(c) Ban private profiteering of water for export
(d) Ban foreign involvement
There’s nothing xenophobic about this. Water firmly and foremost should belong to all New Zealanders. Government should urgently move to enshrine in law, public ownership of water.
The Australian experience is a strong warning to New Zealand to get its act together over water.
Witness overseas and the dangers Aussie farmers and growers have faced over recent months with extortionate prices being charged for water at a time of severe shortage – with water barons cashing in on their predicament. This is not to mention the wildfires that raged over there.”
The parallel is with tradable fish quotas of the Quota Management System (QMS) where in a few short decades, the fishery resource has become dominated by corporate fishing companies aggregating quota. Reports indicate the fishery resource s now 80% owned by corporates.
The freshwater trout and salmon licence public, Fish and Game and conservationists need to be exceedingly vigilant over water and secure its future in public ownership.
Footnote: Tony Orman s a former town and country planner, and former president NZ Federation of Freshwater Anglers
<c> Public ownership of rivers is surely part of our egalitarian society, but beware corporates and self interest groups don’t think so.