Water bottling - what's the story?

Environment Canterbury has decided it will not seek leave to appeal the recent decision of the Court of Appeal on its grant of consents for Cloud Ocean Water Limited and Rapaki Natural Resources Limited to carry out water bottling activities at plants previously used for other industrial activities.

In 2020, the High Court upheld the grant of the consents, but Aotearoa Water Action Inc appealed that Court’s decision to the Court of Appeal.

In July of this year the Court of Appeal found that Environment Canterbury could not grant a resource consent that was limited to the use of the water for bottling purposes separately from the authorisation to take the water to be used for that purpose.

This meant the consents granted to the two water bottling companies were not lawfully granted and resulted in the consents being set aside.

Chief Executive Dr Stefanie Rixecker said the outcome from the Court of Appeal decision was certainty about how the rules around water “take” and “use” should be applied.

“This allows us to proceed confidently when considering future consent applications,” she said.

A “take” authorises how much water can be removed from any water body (surface water bodies like rivers, or from groundwater / aquifers), while a “use” authorises the purpose for which water is used, such as irrigation, water bottling or hydro-electricity generation.

“While the Resource Management Act allows take and use to be separated, the Canterbury Land and Water Regional Plan does not, so further litigation is unnecessary,” Dr Rixecker said.

“We are considering how we deal with consents granted under the former (at that time, lawful) approach. We are also assessing how many granted consents are affected, but those consents remain valid unless a Court issues a decision to set them aside. Environment Canterbury can’t revoke any of these consents because the law doesn’t allow us to do that.”

Environment Canterbury received the decision of the Court of Appeal on its grant of consents for Cloud Ocean Water Limited and Rapaki Natural Resources Limited to carry out water bottling activities at plants previously used for other industrial activities.

Find out more about why we decided not to appeal the Court of Appeal’s water bottling decision.

Environment Canterbury is pleased with a High Court decision (PDF file 1.33 MB) that it correctly applied the law and did not exceed its jurisdiction in approving consents to take water used for water bottling. It also welcomes the clarity the decision provides for those concerned about water bottling and the wider management of water in Canterbury.

Environment Canterbury’s role is to protect water at its source, and it’s a responsibility we take seriously to ensure water is available now and in the future. We’ve most certainly heard the community’s concern about water and water bottling in particular, but we have to apply the law as it stands, which this decision confirms we have done,” Environment Canterbury Acting Chief Executive Stefanie Rixecker said.

Aotearoa Water Action (AWA) sought a judicial review after Environment Canterbury granted non-notified consents to Cloud Ocean and Rapaki Natural Resources allowing existing consents to take water to be used for water bottling instead of at a meat works and woolscour.

An independent commissioner acting for Environment Canterbury later granted Cloud Ocean consent to take water from a deeper bore, within its existing allocation. AWA argued that the applications were for new water – effectively for a prohibited activity in the fully-allocated Christchurch-West Melton zone, and that the applications should have been declined.

No error found in consent decision process

The High Court decision found no reviewable error in the way the Council dealt with the applications. It confirmed that Environment Canterbury was correct in considering the existing consents to take water as separate from authorisations to use that water, and that a standalone "use" consent for water bottling could be relied on to authorise the use of water taken under another water permit.

The decision noted: “It is not the function of the Court on an application for review to substitute its own decision for that of the consent authority. Nor will the Court assess the merits of the resource consent application or the decision on notification. The inquiry the Court undertakes on an application for review is confined to whether or not the consent authority exceeded its limited jurisdiction conferred by the Act. In practice, the Court generally restricts its review to whether the Council as decision maker followed proper procedures, whether all relevant and no irrelevant considerations were taken into account, and whether the decision was manifestly reasonable.”

The administrative transfer of consents was also not contested, and the Court confirmed that Environment Canterbury was correct to not revisit the effects of the existing consents to take water, and that the plastic bottles resulting from a water-bottling plant were beyond what could be considered as part of a consent to use water for bottling.

Water bottling and Christchurch aquifers

The Court noted scientific evidence given by Environment Canterbury relating to the volume of water in the Christchurch aquifers and that its use was uncontested.

That evidence stated that the water flowing through the aquifers was assessed at 369 million cubic metres per year. Of that, 152 million cubic metres per year is allocated for use by people living and industries based in Christchurch. Of that, 82 million cubic metres per year is allocated to the Christchurch City Council for distribution to households and small businesses – of which about 70 percent was used.

Based on average water usage figures, without allocating any more water, Christchurch could accommodate 17 percent population rise. If average water use were 300 litres per person per day, little more than the current average use of water by Auckland residents, the Christchurch population could rise by 76 percent without requiring any further allocation. The 10 million cubic metres allocated per year for water bottling was about 2.7 percent of the water in the Christchurch aquifers.

Environment Canterbury has today issued Cloud Ocean Water two abatement notices to stop the discharge of contaminants – wash water and plastic beads – and an infringement notice relating to sediment discharge.

Environment Canterbury manager zone delivery Paul Hulse said a resource management officer visited the Belfast site on 14 May.

“During the visit, the officer noticed there had been an overflow of wash water from storage tanks which may have gone into the nearby Kaputahi Creek.

” The abatement notice means Cloud Ocean Water must stop discharging this wash water in a manner where it could enter a waterway, and only discharge it in an approved manner – in this case to Council trade waste.

“As well, the officer also observed loose plastic beads which are melted down to create bottles. If the beads entered the stormwater network they would also be considered a contaminant and could smother the bed of a waterway.

“A second abatement notice therefore requires Cloud Ocean Water to cease discharging plastic beads to land, clean up the site and document how it will manage the issue in the future. This abatement notice also relates to the discharge of sediment on site, which Cloud Ocean has been told it needs to cease.

The company was issued a $750 infringement notice due to the discharge of sediment to land where it may enter water.

Cloud Ocean has lodged applications for consent activities at 18 Station Road for:

• Earthworks
• Taking and discharging of dewatering water

The existing site at 20 Station Road will be used as the water bottling plant. These new consent applications for 18 Station road are proposed to contain warehousing and storage facilities to be used by the bottling plant. Consents are sought for construction phase activities relating to proposed loading pads and manoeuvring and parking areas at the 18 Station road site.

The applications are currently in process.

An independent hearing commissioner has granted a consent to Cloud Ocean Water to allow it to take water from a deeper bore.

Richard Fowler QC today released a decision which was not to seek the public's views on an application by Cloud Ocean Water Limited and also to grant it. 

The decision relied on expert evidence which found that the effects on the environment would be no more than minor.

Cloud Ocean applied to change the conditions of an existing consent (CRC182183) to take from a deeper bore within its existing allocation.

Environment Canterbury general counsel Catherine Schache said the consent didn't change the volume, rate or timing of the take Cloud Ocean already holds a consent for.

"We know this will be a frustrating decision for members of the public who wanted to have their say on this application. The Resource Management Act allows for consents to be publicly notified so people can present their views but only in certain circumstances, and this wasn't the case with this application."

Mr Fowler found that there were no special circumstances that triggered either public or limited notification.

Schache said "This application has nothing to do with the Christchurch City Council's calls for people to conserve water, the chlorination of water or the Council's ability to secure future drinking water supply."

In addressing the concerns around Christchurch's water supply, Mr Fowler stated that experts for Christchurch City Council and Environment Canterbury agreed that modelling showed that there would be adequate available draw down for existing and future Christchurch City Council bores.

Under Environment Canterbury’s Land and Water Regional Plan, the Christchurch City Council are the only party who can apply for more water in Christchurch.

From here, it is only the applicant that can object or appeal the decision, and the way the decision was made could be the subject of a judicial review.

Independent Hearing Commissioner decision

You can read the decision.

Further documents relating to the consent or read the Section42A report.

Earlier this year, Aotearoa Water Action challenged in the High Court Environment Canterbury's decisions relating to resource consents sought by two water bottling companies, Rapaki Natural Resources and Cloud Ocean.

There are two parts to this challenge. The first being whether water bottling falls within the category of industrial uses, and the second relates to whether our processes in granting the consent were in accordance with the Resource Management Act 1991.

Yesterday the court released a decision on the first of these that was related only to a preliminary point of law. The decision clarified that previous consents for industrial use could not automatically be used for water bottling.

The Court is still to consider the second part, relating to Environment Canterbury's consent processes for when we granted a new consent to Rapaki Natural Resources and Cloud Ocean last year for water bottling.

We stand by our decision to grant the consents.

Yesterday's decision has no bearing on whether Cloud Ocean and Rapaki Natural Resources can continue to use their consents.

The implications of this whole court proceeding won't be known until after the hearing on our processes, which will be next year.

The Regulation Hearing Committee appointed independent hearing commissioner Richard Fowler QC, to determine the application by Cloud Ocean Water Limited, under s34a of Resource Management Act 1991.

Cloud Ocean’s current application is to change the conditions of an existing consent (CRC182813), which is subject to a judicial review proceeding currently before the Court, relating to alleged issues with the processes undertaken and decisions previously made by Environment Canterbury staff.

It is unusual to have an application to change the conditions of a consent which is the subject of an unresolved judicial review, and it is for this reason staff recommended the appointment of an independent commissioner to make the determination on the notification or otherwise of Cloud Ocean’s application.

Mr Fowler will consider and decide the non-notification, limited notification or public notification of the consent application. If the decision is not to notify the consent application, Mr Fowler will then consider and decide the consent application. If the decision is to limited notify or to publicly notify the consent application, Mr Fowler will be the Chair of a hearing panel to consider and decide the consent application, in conjunction with other hearing commissioners, who would be appointed at a later date.

Recent media coverage has highlighted concerns from the Christchurch City Council and the broader community regarding water bottling in general and specifically the new consent application from Cloud Ocean Water Ltd.

Environment Canterbury wishes to provide assurance that due process will be followed for Cloud Ocean’s consent application - and the Christchurch City Council’s evidence regarding any potential impact on the aquifers and future drinking water supplies will be thoroughly reviewed as part of this process.

Christchurch City Council was invited as an interested party to provide us with information, and we welcome the formal comment today from Christchurch City Council on behalf of Christchurch residents. We share the commitment to ensuring a safe supply of drinking water for Christchurch.

Consent applications & water quantity

For clarity, the Cloud Ocean recent consent application does not change the volume, rate or timing of the take it already holds consent for. Cloud Ocean obtained the existing water take consent previously held by Kaputone Wool Scour due to its purchase of the old wool scour property.

Cloud Ocean’s current take (the old wool scour take) has been in existence for a number of years.

The new application is to take some of this allocation from a different bore.

There is no opportunity for Cloud Ocean (or any other non-community user) to obtain new water in the future, they must all work within the existing allocation.

Under Environment Canterbury’s Land and Water Regional Plan, the Christchurch City Council can however continue to apply for more water to supply Christchurch’s drinking water needs.

Water quality

The impact on water quality in the aquifer is also of concern to many. The Cloud Ocean headworks are appropriately sealed to address this, something that has been checked by Environment Canterbury’s compliance team.

Contamination risk for any take does exist if there are unsecured well heads. For example, temporary chlorination of a water supply may be necessary as a precautionary approach due to the risk of contamination from the supply infrastructure (specifically well head protection) – as is the current case in Christchurch. This contamination risk is not due to the quality of the water in the aquifer.

Cloud Ocean Water Ltd

The legislation that we operate under, the Resource Management Act, doesn’t differentiate between nationalities, and any person is legitimately able to make an application.

The issue of Christchurch water ‘going offshore’ or being ‘given to outsiders’ is therefore not one we can consider as part of our regulatory role. We will consider Cloud Ocean’s consent application as we would any other consent application. It is the environmental impact of any consented activity that we must consider under the Resource Management Act.

Public sentiment

As a council, we understand that water bottling is an issue of intense interest to some members of the community. It is also complicated in terms of what each regulatory body can and can’t do within the rules (and even who sets which rules).

The Resource Management Act framework determines what Environment Canterbury needs to consider and if/when public consultation occurs. We will need to follow due process, including whether notification is required as per the requirements of the Resource Management Act.

More information

In the meantime, we are endeavouring to keep the community up-to-date with what is happening and with the regulatory framework that we are obliged to work within. The below links will take you to other useful background information:

• Information about the Resource Management Act 1991
• Quality Planning website (QP)

Environment Canterbury has today accepted a complete application under Section 88 of the Resource Management Act (RMA) from Cloud Ocean Water Ltd and will begin processing it.

Cloud Ocean is applying for a change in its consent conditions to take water from a second (deeper) bore, within existing limits. It is not applying for an increase in the quantity of water it is able to extract under its existing consents.

Cloud Ocean currently has a shallow bore that it is exercising its consent to take water from. The application accepted today is for a water take from a second bore. As noted above, the total water take limit has not been increased.

Now that the application has been accepted, Environment Canterbury will begin to process that application within the legal framework it must operate under.

Water bottling as an activity can attract negative sentiment from the community, with calls for Environment Canterbury to stop the activity. In particular, the Cloud Ocean plant has attracted interest from some Christchurch City Councillors.

Environment Canterbury chief operations officer Nadeine Dommisse said, “We are very aware of the Christchurch City Council’s concerns around the potential effects of this new proposal which have been raised as part of our regular conversations with them, however until now we have not had an application to consider, so we have not been able to formally address those concerns.”

“We are also aware of the broader community’s concerns regarding water bottling in general and that the legal framework that we (and all other councils) must follow under the RMA can appear complicated. We take consenting processes for these matters very seriously, and we will be ensuring there is a robust and stringent process in place for Cloud Ocean Water, as for any other consent applicant,” she said.

“We will continue to work to promote public understanding of decision making within the RMA.”

Will the public be able to have a say on this consent application?

Before an application is received and formally accepted by Environment Canterbury, it is the applicant’s choice as to whether they consult with the community or request public notification.

Once an application is received, the RMA has a strict set of steps that must be worked through in deciding whether to publicly notify a consent application or not. Cloud Ocean, like any other consent applicant, can apply to us for resource consent at any time.

“When we receive an application, the first step is for us to assess the sufficiency of the information that has been provided before it can be formally accepted. We then must consider the application against the statutory tests in the RMA, including assessing the significance of the environmental effects,” said Dommisse.

If the technical information around environmental effects indicates those effects are above the thresholds specified in the RMA, an application is publicly notified. If an application is not publicly notified, Environment Canterbury must still consider whether there are any individual parties who may be affected (above the RMA thresholds), and if so they will be served notice specifically – this is limited notification.

Dommisse said, “As the application from Cloud Ocean Water Ltd has only been accepted today, we have not yet started our auditing of the assessment of effects and the Section 95E affected party assessment – that is the next stage in the process.

“We are aware of Christchurch City Council’s concerns regarding water take from the deeper bore and the Council has been assured that we will consider those effects as part of the assessment process now that an application has been received.”

Any application for a new take, or a change to an existing take (as is the case with the current application from Cloud Ocean), must assess the effects of that take. This includes considering the effects on surrounding wells which, in this instance, would include the CCC wells. That assessment will be audited as part of the consenting process.

More information

• Ministry for the Environment’s Information about the Resource Management Act 1991
• The Quality Planning website (QP) was launched in 2001 to ‘promote good practice by sharing knowledge about all aspects of practice under the RMA’ among resource management practitioners, council planners, private practitioners, consultants and environmental managers among others.

There has been increased interest in water bottling consents recently so we thought we’d clear up a few things.

When someone, or a business, applies for a water take consent, Environment Canterbury's role is to look at the volume of water being taken and the environmental effect of taking and using that water. It’s not our role to make a judgment on the merits of the purpose for which the water is sought.

Water bottling consents make up less than 0.1% of all water take consents in Canterbury. The remainder are a mixture of several things including, irrigation, stockwater, public supply, wildlife/fisheries management, flood control and hydroelectric power generation.

In Christchurch, there are 484 current groundwater permits. Of those 436 are consumptive (i.e. the water doesn’t go back into the aquifer). It is worth noting that demand for water varies over a year, for example, irrigation is seasonal and rarely occurs during winter.

Groundwater is therefore typically allocated to users on an annual basis (i.e. an amount to be used over a 12-month period), however if averaged out over a year, all these consents could take up to 435,643 cubic metres per day (about 436 million litres). Of these Christchurch consents, 25 are Christchurch City Council consents. These make up 56% of the total water allocated in Christchurch.

The remaining 44% is used for a variety of uses, including water bottling. The consents for water bottling in Christchurch make up about 5% of the total consented water takes. Cloud Ocean Water is about 1% of the total allocation in Christchurch.

The following consents specify water bottling as an option and are active:

* Consent CRC183761 - This consent is the result of an administrative split of a previous Rapaki Natural Resources Ltd consent (CRC180311). In combination with CRC183763, there has been no change in the amount of water able to be taken.

** Consent CRC183763 - This consent is the result of an administrative split of a previous Rapaki Natural Resources Ltd consent (CRC180311). In combination with CRC183761, there has been no change in the amount of water able to be taken.

*** Consent CRC211513 - This consent is the result of an administrative split of a previous Waikirikiri Partnership consent (CRC210098). In combination with CRC211514, there has been no change in the amount of water able to be taken.

**** Consent CRC211514 - This consent is the result of an administrative split of a previous Waikirikiri Partnership consent (CRC210098). In combination with CRC211513, there has been no change in the amount of water able to be taken.

How are water consents transferred when the farm/company they were granted to is sold?

Water permits can be transferred to the new owner of a site by providing written notice of the transfer to the Council. Effectively this is simply a change in the name of the consent holder and does not require an application to the Council because there are no other changes in the consent.

Can water consents be sold separately from land?

Environment Canterbury is not involved in any commercial arrangements between the holders of water permits so we don’t know the arrangements they have around selling water consents. The RMA enables water permits to be transferred between sites but in these situations an application must be made to the relevant regional council, and the potential effects of the proposed take and use of water on the environment must be considered. In some parts of Canterbury, Environment Canterbury will grant a transfer between sites only if the new owner relinquishes some of the consented volume. In Selwyn Te Waihora and Hinds (both of which are in mid-Canterbury), for example, this amount is 50% of the transferred volume. This means that if a seller is transferring a water consent that allows a take of an annual volume of 100,000 m3, the buyer will only receive 50,000 m3.

What happens when the land use changes?

This depends on the conditions of consent. If the use of water is tightly restricted via those conditions, a consent holder may be required to make a consent application to allow this.

Can Environment Canterbury revoke a water consent based on what the water is being used for?

Environment Canterbury cannot revoke a water consent based on the use of the water. However, if the consent was granted for one specific purpose (for example, irrigation) but was intended to be used for another purpose, we would expect the consent holder to make a consent application to allow this. If they didn’t, that would be a matter for investigation and possible enforcement action.

Environment Canterbury can review water permits to address adverse environmental effects that were unforeseen when the consent was originally granted, but cannot cancel those consents outright.

Consent may be revoked when the Council has been materially misled in the application, although this is an extremely high bar to meet.

Water consents can also be cancelled by a regional council where the council can prove they haven’t been exercised for the previous five years.

If there are water restrictions for residents, does this also apply to consents such as this?

No. Restrictions and limitations on water takes are specified case-by-case in consent conditions. A particular consent might have to go on restriction of it is hydraulically connected to a waterway or if the groundwater is adaptively managed. Domestic water supplies might go on restriction when the provider initiates their management plan, but they are a separate water take so does not affect other consents.

What does Environment Canterbury take into account when looking into this sort of consent?

If there was an application for a new water take, we would check whether water is available from the allocation in the groundwater zone as set out in our regional plans, whether the take affected the ability of other users nearby to take water, whether the water take is reasonable and an efficient use of water, and whether the take is close to the coast and might result in salt water intrusion to the aquifer.

Must the Council approve the transfer?

The Council has no choice about a transfer to another owner on the same site – this is only a change of name (s136(2)(a) RMA).

When do you have to publicly notify a consent?

When we are determining whether an application should be notified, we must consider the application against the statutory tests in the RMA.  This includes considering the significance of the environmental effects.

If the environmental effects are more than minor then it is publicly notified.  If not publicly notified, we have to consider whether there are any individual persons that may be affected to a minor level, and if so they will be served notice specifically.

If none of the statutory tests in the RMA are met, the applications are not notified.

Is a consent to drill a bore the same as a consent to take water?

A consent to drill a bore is different to a consent to take water from that bore. Drilling a bore is a necessary step before applying for consent to take water because bores must be tested to determine how taking water from it will affect other bores in the area.