Responsibility without regulation: a dilemma for the dairy industry (B)

Transcription

1 CASE PROGRAM Responsibility without regulation: a dilemma for the dairy industry (B) As the ten-year term of the Clean Streams Accord came to an end, work accelerated to complete its successor. The Dairy Environmental Leadership Group (DELG) was at the hub of a series of discussions with stakeholders and potential partners in a new accord. In mid-2012 the industry good body Dairy NZ set up a project group to finalise the new accord and the new industry strategy within which it would be embedded. The remainder of the year was a round of intense consultations at every level from company chief executive to individual dairy farmer. Some of those farmers were asking why, with a National Policy Statement for Fresh Water in place, and prescribed limits to be established, there was any need for a new accord. The Land and Water Forum (LAWF) had by now published its second report, which provided a framework and process for regional councils to work with their communities to set freshwater objectives and develop limits for their use. DELG saw it as extremely important that the discerning consumers of its export markets should see it to be taking a proactive stance on environmental issues, as well as milk quality, food safety and animal health and welfare. 1 But some smaller dairy companies, without the resources or the image of Fonterra, were asking what s in it for us? This case was written by Janet Tyson for Professor John Alford, Australia and New Zealand School of Government. It has been designed to prompt class discussion not to pass judgement on any management decisions or direction. The case updates information detailed in the ANZSOG case study A voluntary environmental accord for the dairy industry , available from The assistance of Neil Deans, Kim Drummond, John Hutchings, Mike Scarsbrook and Bernie Walsh is appreciated, but responsibility for the final content rests with the author. Cases are not necessarily intended as a complete account of the events described. While every reasonable effort has been made to ensure accuracy at the time of publication, subsequent developments may mean that certain details have since changed. This work is licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence, except for logos, trademarks, photographs and other content marked as supplied by third parties. No licence is given in relation to third party material. Version Distributed by the Case Program, The Australia and New Zealand School of Government, 1 Despite producing only seven percent of world milk products, Fonterra is a dominant player in dairy exports.

2 Questions were also being asked in local government circles. The chief executives of the Canterbury and Waikato Regional Councils had been part of DELG discussions. Environment Canterbury (ECan) agreed to support the collective effort of the new accord, despite the fact that it was already meeting or bettering the requirements of the National Policy Statement. Environment Waikato, which by this time was spending $1 million a year on helicopter surveillance of farms, was not easily convinced of the value of joining a new accord. The chair of its regulatory committee was on record as frustrated that ratepayers were footing the majority of enforcement costs, while Fonterra was getting off lightly and implicitly endorsing serial polluters, never following through on the threat not to collect milk from offenders. In some US states a breach of effluent rules which are much tougher than here would result in the consent to farm being withdrawn, Ian Balme said. 2 A backdrop to the negotiations was the Ministry for the Environment s annual benchmark report on water quality which, in 2012, warned that 52 percent of New Zealand rivers were too polluted to swim in. Earlier in the year, the Parliamentary Commissioner for the Environment had said the evidence was accumulating that the greatest impact on water quality was associated with pastoral farming, and the most insidious problem nutrients, particularly nitrogen from fertiliser and animal urine, which leached into rivers and lakes. 3 In a new report on four of the regional councils, which had the frontline responsibility for implementing environmental standards under the Resource Management Act, the Auditor-General expressed dismay at the undue influence of elected councillors (many of them farmers themselves) were having on decisions about prosecution for breaches of consent. We have the people who set the rules making decisions about whether or not prosecutions will proceed, a complete blurring of the normal separation that exists in central government, said Neil Deans from the environmental group Fish and Game. I ve had dairy farmers ringing me up saying you ve got to deal with [some hard core repeat offenders], they do some awful stuff. But Fish and Game is not the policeman of the dairy sector, it s not our job at all. I have no difficulty with an industry defining itself by its environmental standards. The horticulture sector and the forestry sector for example do that, but they don t do it in an effort to avoid regulation, which is what the dairy industry has given the lead to do. He saw it as frustrating for the increasing number of extremely diligent and responsible farmers who saw the focus on bad news about dairying, and the difficulties for Fonterra, as a co-operative, in dealing with members determined to be un-co-operative. Fairfax journalist, Marty Sharpe, was giving prominence to yearly reports on infringements by the dairy industry, and front page coverage to Massey University scientist Mike Joy s claim that the Manawatu River ranked amongst the world s most polluted. Ministry for the Environment figures would show that, from July 2008 to September 2012, the agriculture sector had accounted for the highest number of prosecutions and highest fines for offences under the Resource Management Act 1991, principally relating to discharges to water, or onto land where it may enter water. Agriculture as a whole accounted for 62 percent of the Ian Balme, NZ Herald, Fonterra s approach tardy on dairy-farm pollution accessed July Parliamentary Commissioner for the Environment, The Science behind Water Quality, April

3 prosecutions over the period, and 73 percent of the highest fines. (Exhibit 1). The report also noted a welcome reduction in deliberate offences and more culpable offences. 4 Debating the limits While there was general agreement at the DELG negotiations over the direction in which the industry should be heading, there was still fierce debate, especially over the extent to which particular limits would apply, and the timeframe with which they would be implemented: As a general rule, the councils wanted more, sooner, and we wanted them to understand that it wasn t as simple as that, according to John Hutchings, then with Fonterra. Neil Deans from Fish and Game was impressed that farmer representatives put the strongest case for the need to avoid loopholes and exceptions to, for example, stock exclusion from waterways. They could see the political consequences of there being wriggle room. Neither the public nor the majority of farmers are very tolerant of that anymore. It was the regional councils that insisted that from the start of the season, any new farm should be at the standards others had to meet by They negotiated hard, but that s their business, so did we. They wanted more on water use management and water use efficiency, faster, John Hutchings recalled. Dairy NZ s argument about the need for planting advice for individual catchments, and the complexities of preventing all types of nutrient from entering waterways, countered a push from the councils and environmental groups, for all farms to have riparian 5 planting before One of the lengthiest debates came around the definition of a dairy farm (Exhibit 2) and when properties used for off-season support would be brought into the accord. One of the most difficult things was coming up with something that applied nationally but made provisions for the wide range of differences in regional soils, landforms, and climate for instance the issues with permanent fencing in some flood-prone areas, Dairy NZ s Mike Scarsbrook said. However, thanks in large part to the LAWF, there was a greater level of trust. Four or five years ago, going to a regional council they would say, you guys have got to step up, got to get involved. Now I think there is a more equal partnership between Dairy NZ and the dairy companies, and the regional councils [feel] able to take a back seat. Kim Drummond from Canterbury, Chris McLay from Waikato and Eddie Grogan from the Bay of Plenty, were the three second-tier managers charged with negotiating something that regional councils could agree to. Each side saw fault in the other, Kim Drummond recalled. The industry was saying, we have got farmers telling us that they are not going to play this game because they are seeing poor performance in some of the regional councils people wave the stick too hard, some of the rules are pedantic from an industry perspective they needed to get something out of the regional councils to bring the farmers on board. And from the regional councils perspective some were saying well, why should we be part of this? We have got our own rules, the RMA is the dominant framework here, it doesn t matter what the industry come up with. 4 Three of the top four fines were for discharge of dairy effluent, and 18 out of the following 30. Ministry for the Environment, a Study into the Use of Prosecutions under the Resource Management Act 1991, 1 July September 2012, available from 5 Planting along the banks of natural waterways. 3

4 Three levels of responsibility A significant breakthrough was the decision to allocate different levels of responsibility for implementing the accord; accountable partners, supporting partners, and friends (Exhibit 3). Dairy NZ, the Dairy Companies Association of New Zealand, and individual dairy companies were Accountable Partners with specific responsibilities and accountable for delivering the commitments and monitoring and reporting as specified. They undertake to carry out those responsibilities in good faith and to the best of their abilities. Supporting Partners make commitments to the outcomes of this Accord in support of the Accountable Partners. Of the four signatories to the 2003 Clean Streams Accord, only Fonterra as a dairy company was an Accountable partner. The two government departments, the Ministry for Primary Industry and the Ministry for the Environment, were Friends. Local Government New Zealand had signed the first accord on behalf of all regional councils. This time, individual regional councils would make the decision whether to sign up as Friends of the Accord: supportive of the purpose of this Accord and commit[ted] to contribute to its success in the spirit of collaboration. All but one council became a Friend. As a Friend, we were still able to negotiate not only whether we would be a Friend of the accord, but also about the wording and the content, Kim Drummond said. So what we had was quite a joined-up approach with everyone who had skin in the game making sure their key issues were represented. Every word in the glossary published as part of the accord (Exhibit 2) was chosen with extreme care, John Hutchings said. The language of the whole document was rich and carefully crafted and in things like the Māori references, and the goal that our waterways continue to provide for the full range of our values and interests of New Zealand.a quantum shift from what you had in Fonterra, which by now was ready to release its Supply Fonterra improvement programme, and had just announced a $20 million partnership with the Department of Conservation to restore damaged wetlands, was relatively relaxed about meeting the conditions of the Accord. Canterbury-based Synlait was on board from the word go. It had developed Lead with Pride, its own certification system, categorising its suppliers as gold when meeting company standards for good practice, gold plus for achieving the additional standards for ISO65 certification, and gold elite for leading practice, maintaining top standards for 12 months or more. Gold plus and gold elite suppliers were to be paid more for their milk. Most of the serious negotiation was over by February 2013, when the draft Sustainable Dairying: Water Accord was publicly released for wider discussion with farmers and other stakeholders. Fonterra held 50 farmer meetings, attended by a total of 2500 farmers. Dairy NZ s communications manager Bernie Walsh had been unsure how the wider farming community would respond but found that: Farmers had told us they wanted standards and benchmarks across the industry. They were happy to have a set of very clear expectations. Fonterra had already released Supply Fonterra and they knew what would be expected of them and they knew what time and support they would get to meet the expectations. The most significant change from the February draft to the version launched in July 2013 version was in the names of those responsible for developing the Accord. There was no longer any mention of environmental groups. It now read: The Sustainable Dairying Water 4

5 Accord has been developed under the oversight of the Dairy Environmental Leadership Group (DELG). DELG includes representatives from farmers, dairy companies, central government, regional councils and the Federation of Māori Authorities. In earlier drafts, Fish and Game or environmental groups had also been listed. Neil Deans had worked with DELG and had input to the development of the Accord. He was however there on an individual basis, he said. Clearing up this misunderstanding led to some scathing comments from Federated Farmers about eleventh hour changes of mind. In a feisty speech to Federated Farmers 2013 Dairy Annual General Meeting, chairperson Willy Leferink also asked why only farmers were being pilloried for polluting when councils were doing it daily. Regional Councils are rushing to control our industry and all the while forget we are farming on less land than ever before while having to meet tougher and tougher resource conditions. Councils got the NPS freshwater management message loud and clear but somehow missed the memo about doubling our exports. This baffles me. Doubling our exports would give these roosters heaps of money to work on decent outcomes for freshwater management Policy makers have an unhealthy obsession with nitrates, lawyers and the Environment Court. 6 A few days later, at the parliamentary launch, Willy Leferink was one of those welcoming the new Accord, confident it would do a better job in lifting environmental performance. Primary Industries Minister Nathan Guy praised the Accord (Exhibit 4) as a new, broader and more comprehensive commitment than the previous Clean Streams Accord that ended in It includes commitments to targeted riparian planting plans, effluent management, comprehensive standards for new dairy farms, and measures to improve the efficiency of water and nutrient use on farms. He said: Underpinning the Accord is a common desire of the signatories to recognise, protect, and where opportunities exist, enhance the many benefits and experiences New Zealanders enjoy in freshwater. These include fishing, swimming, recreating, gathering mahinga kai 7 and the provision of habitat for aquatic species as well as the ability to use water for social, cultural and economic betterment. 8 Not spelled out in the new Accord was the fact that, unlike the CSA, there was no end point. Achieving environmental sustainability will be a process of continuous improvement, Mike Scarsbrook, now Dairy NZ s Environmental Policy Manager said. We have given them a lot more tools to address the issues, and hopefully there is more and more capability out there, good advice that can be given and some credible suppliers. Can we trust what you say? One of the key things about this accord is that it will be reported on annually, whether we meet our targets or not, and that report will be independently audited, Bernie Walsh said. People were saying, can we trust what you say?. The industry knows the accord must work in the eyes of the public of New Zealand as well as the industry. 6 How are we going to turn the regulation boat around? Speech by Willy Leferink, Federated Farmers Dairy chairperson, / accessed from 7 Fish and other freshwater foods. 8 Environment Sustainable Dairying:Water Accord downloaded from downloaded

6 The companies have made these commitments and so the onus is very much on them as drivers of the accord. There is a whole range of levers that the industry could pull to get farmers on board with this, it could be anything from something like mandatory conditions of supply, so farmers must do this to ensure their milk is picked up, through to systems where companies might provide positive incentives to farmers to meet certain standards. How that is actually done will likely vary from company to company we don t want to constrain, we don t want to be overly prescriptive about how these companies get their farmers to meet these commitments. The key thing is that companies are right behind driving the achievement of these. Neil Deans applauded the idea of incentives but commented that environmental groups like Fish and Game would also like to see effective sanctions for non-performance. The regional councils, meanwhile, would be maintaining their own monitoring, Kim Drummond said. If this was to lead into audited self-management we have to get proof. There is no intention of our regional council to back off without it. We already inspect every dairy farm every year, and we keep inspecting until [a farm] becomes compliant. We will do that until such time as the public says, that monitoring resource you are deploying over there, would be better off over here instead. That would tell us that the risk of environmental damage was being appropriately managed. We can then design a system that would reward full compliance with a visit every other year. But those stripes will need to be earned. Our community is unlikely to support an extension of any olive branches in the absence of evidence that demonstrates compliance. Promises and undertakings won t wash, so that is why it is in all our interests to try and get this to work, because that will bring the public on board. That is our litmus test. Postscript In early November 2013, the Ministry for the Environment released for public comment and submission a National Objectives Framework designed to establish bottom line standards for water quality. Regional councils would monitor these, as well as working with local communities to establish what might well be (and in many cases, for instance in Canterbury, already were) much stricter limits on pollution. With submissions to close in February 2014, a number of critics had spoken out about the lack of any timeframes, the failure to include some important indices such as the wellbeing of freshwater wildlife, and the most common criticism, that bottom line levels for nitrates were set so high that rivers could be irreparably damaged before they were reached. Environment Minister, Amy Adams, acknowledging these as valid points, said the limits, agreed by a science reference panel, represented a sensible place to start. Later in November 2013, the Parliamentary Commissioner for the Environment, Dr Jan Wright, published Water Quality in New Zealand: land use and nutrient pollution, 9 an update to her 2012 report on the science behind water quality. In much of my work I actively seek out win-wins for the economy and the environment, she said. But in this case, New Zealand does face a classic economy versus environment dilemma. Unfortunately, this investigation has shown the clear link between expanding dairy farming and increasing stress on water quality. Even with best practice mitigation, the large-scale conversion of more land to dairy farming will generally result in more degraded fresh water. 9 Parliamentary Commissioner for the Environment, Water Quality in New Zealand: Land use and nutrient pollution, November 2013, available from 6

7 The government s laudable goal of reforming the management of fresh water, through means such as the National Policy Statement, would not be achievable unless decision-makers more actively address the link between land use change and water quality Ibid, p 6 and 7. 7

8 Exhibit 1: Top 30 prosecutions for discharges under the Resource Management Act 1991 Case 1 West Coast Regional Council v Potae and Van der Poel Ltd 2 Manawatu Wanganui Regional Council v KW Thurston 3 Southland Regional Council v Talisker Farms Co Ltd and Loveridge 4 Otago Regional Council v Crichton Dairy Farms Ltd and G Norris 5 Waikato Regional Council v Hillside Farms Ltd, Allan Crafar, Frank Crafar and Elizabeth Crafar 6 Otago Regional Council v Summit Dairying Ltd, BD De La Rue and SM Smit 7 Canterbury Regional Council v White Gold Ltd 8 Bay of Plenty Regional Council v PF Olsen Ltd 9 Bay of Plenty Regional Council v Armer Farms (N.I) Ltd 10 Manawatu-Wanganui Regional Council v DB and AE Cheetham Ltd and Duncan Bruce Cheetham 11 Otago Regional Council v Megaw Farms Ltd and AW Megaw 12 Taranaki Regional Council v Ravendown Fertiliser Co- Operative Ltd and AA Contracting Ltd and GA Blackstock 13 Northland Regional Council v Mark Allen Stanaway and Kylie Wendy Stanaway 14 Northland Regional Council v Pendre Farms Ltd, MJ Griffiths and GL Dassler 15 Waikato Regional Council v Hillside Farms Ltd 16 Taranaki Regional Council v Terrence Edwards Yates Total fine Sector Sub- Sector $120,000 Agriculture Eight charges for discharge of dairy effluent $117,500 Commercial The total fine was imposed for discharge $110,000 Agriculture Discharge of dairy $ 94,000 Agriculture Three charges of discharges of dairy $ 90,000 Agriculture Dairy Discharge of dairy $ 88,000 Agriculture Dairy Discharge of dairy $ 85,000 Agriculture Dairy Discharge of dairy $ 72,800 Commercial Forestry Contractor Clearance work in forest. $ 72,200 Agriculture Dairy Discharge of dairy $ 72,000 Agriculture Dairy Breach of abatement notice. Discharge of dairy $ 68,000 Agriculture Dairy Discharge of dairy $ 67,500 Industrial Fertiliser Plant Discharge of hydrolysed urea. $ 67,000 Agriculture Dairy Discharges of dairy effluent, a discharge of silage leachate and one breach of an abatement notice. $ 65,000 Agriculture Dairy Discharge of dairy $ 65,000 Agriculture Dairy Discharge of dairy effluent and breach of abatement notice. $ 62,000 Agriculture Dairy Discharge from holding pond. 8

9 17 Taranaki Regional Council v PJ Sullivan 18 Taranaki Regional Council v Trevor Rex Jane 19 Taranaki Regional Council v MR Andrews and Tony Van Kerssen $ 60,000 Agriculture Dairy Not guilty plea to discharge of dairy effluent on one date from two sources. $ 60,000 Agriculture Dairy Discharge of dairy effluent from four sources. $ 60,000 Agriculture Dairy Discharge of dairy effluent and silage leachate. 20 Wellington Regional Council v Patrick Roil and Roil Contracting Ltd 21 Southland Regional Council v Niagara Sawnmilling Ltd 22 Southland Regional Council v Belling and R Raymond-Williams 23 Waikato Regional Council v Bayview Raglan Ltd 24 Auckland Council v URS New Zealand Ltd, Brown Bros (NZ) Ltd and Fuelquip (NZ) Ltd 25 Northland Regional Council v MJ Pinny 26 Northland Regional Council v PT Flood 27 Bay of Plenty Regional Council v Glenholme Farms Ltd and AP Atkinson 28 Taranaki Regional Council v AV Mouland, C Archibald, BC Cudby, Ingrmas Contracting Ltd, RE Ford Ltd and Wallis Developments Ltd 29 Taranaki Regional Council v BA Lilley and Duffy 30 Hawkes bay Regional Council v Morton Estate Wines Ltd $ 60,000 Commercial Clean fill operation Deposit of substance on river bed. $ 60,000 Industrial Sawmill Discharge of dust from sawing and processing of timber. $ 60,000 Agriculture Dairy Discharge of dairy effluent and dumping $ 59,500 Commercial Subdivision stock. Failure to install erosion and sediment controls. $ 55,000 Commercial Engineer Discharge of petrol into ground. $ 54,000 Agriculture Dairy Discharge of dairy effluent from irrigator and cow standing pad. $ 53,000 Agriculture Dairy Discharge of dairy effluent from two feed pads. $ 53,000 Agriculture Dairy Discharge of diary effluent from irrigator. $ 50,000 Commercial Landfill Operation of an illegal rubbish tip. $ 50,000 Agriculture Dairy Discharge of dairy $ 50,000 Agriculture Vineyard Taking water during a ban. Source: Ministry for the Environment: A study into the Prosecutions under the Resource Management Act 1 July September

10 Exhibit 2: Glossary from Sustainable Dairying: Water Accord Agreed protocols and data collection systems The protocols and systems agreed as part of DairyNZ s audited nitrogen management system developed in accordance with DairyNZ s commitment to nutrient management under this Accord. These may include protocols for measuring nitrogen management performance in areas where Overseer is not a reliable tool. Conversion The development of a new dairy farm on land previously used for another form of pastoral farming, cropping or forestry. Dairy Farm A property engaged in the farming of dairy cattle for milk production. From 1 June 2012 to 31 May 2017 the property shall be limited to the milking platform (that area devoted to feeding cows on a daily basis during the milking season) but excluding any dairy grazing land (whether or not contiguous with the milking platform) that is owned by the same person or entity as the milking platform and/or famed in association with the milking platform. From 1 June 2017 the property shall include, in addition to the milking platform, any land regularly used for dairy grazing* (whether or not contiguous with the milking platform) that is owned or leased by the same person or entity as the milking platform and/or farmed in association with the milking platform. The definition excludes: land used under a third party grazing arrangement between the owner or dairy cattle and another landowner for the purpose of temporary grazing; and land that is owned or leased by the same person or entity as the milking platform but which is not regularly used for dairy grazing. Dispensation crossing obligations. Such dispensations will relate to exceptional situations where permanent fencing and/or bridging/culverting is impractical or cannot be feasibly achieved in the timeframes indicated in the riparian management commitment. Where such dispensations are made, dairy farms will be subject to farm-specific management plans that detail practices to mitigate effects (including use of temporary fencing) and/or timeframes by which full compliance with obligations of this Accord is to be achieved. Drain An artificially created channel designed to lower the water table and/or reduce surface flood risk and which has permanently flowing water but does not include any modified (e.g. straightened) natural watercourse. Exclusion In the context of stock, excluded means effectively barred from access to water and to the banks of a waterway either through a natural barrier (such as a cliff) or a permanent fence, except for any regular stream crossing point. Land regularly used for dairy grazing Land used each year for grazing dairy cattle throughout the off-season (ie that part of the year when cows are not being milked). Nutrient management plan A plan prepared in accordance with the Code of Practice for Nutrient Management (NZ Fertiliser Manufacturers Research Association 2007) which records and takes into account all sources and nutrients in the farming system and all relevant nutrient management practices and mitigations. Regional councils Has the same meaning as given in Section 2 of the Resource Management Act Regional Policy statement and regional plan Have the same meaning as Section 2 of the Resource Management Act

11 Dispensations for individual dairy farms may be granted by dairy companies in respect of compliance with stock exclusion and stock Regular stock crossing point A point on a waterway or drain where dairy cattle cross to access the milking shed, then return following milking, more than once a month. Riparian management plan A plan that records, in narrative and/or map form, what riparian margin is to be planted and with what species in order to promote the water quality and/or any biodiversity or landscape objectives sought by the landowner. Riparian management plans are to be developed consistent with riparian management guidelines developed by DairyNZ. For the avoidance of doubt, riparian management plans need not propose riparian planting on all riparian areas from which stock are excluded if there would be no significant water quality benefit from such planting Significant non-compliance In the context of effluent management means those incidents of non-compliance with rules or consent conditions that result in, or present a risk of, untreated farm dairy effluent discharging to a waterway. Significant wetland An area which has a vegetative cover dominated by indigenous wetland plant species and which is identified as significant in an operative regional policy statement or regional plan. Waterway A lake, spring, river or stream (including streams that have been artificially straightened but excluding drains) that permanently contains water and any significant wetland. For the avoidance of doubt, this definition does not include ephemeral watercourses that flow during or immediately following extreme weather events. 11

12 Source: Sustainable Dairying; Water Accord, pages 14 and 15. Exhibit 3: Sustainable Dairying: Water Accord: roles and commitments Dairy NZ Accountable partner Support the sector to meet commitments Dairy Companies Association of NZ (DCANZ) Fonterra, Miraka, Open Country, Tatua, Synlait,: all dairy companies except Westland Fertiliser Association of New Zealand; Ballance Agri-Nutrients; Ravensdown Fertiliser Co-operative Accountable partner Accountable partner Supporting partners Administer the Accord, reporting to DELG (see below) Support supplier farms to meet targets Support good nutrient practice and gather farm data Federated Farmers Dairy Section Supporting partner Provide strong farmer voice, eyes and ears feedback to DELG on implementation issues Irrigation New Zealand Supporting partner Build capacity, develop good management practice in water use. NZ Institute of Primary Industry Management Westland Milk Products Northland Regional Council: Auckland Council; Waikato Regional Council; Bay of Plenty Regional Council; Hawke s Bay Regional Council; Gisborne District Council; Taranaki Regional Council; Horizons Regional Council; Greater Wellington Regional Council; Environment Canterbury; West Coast Regional Council; Marlborough District Council; Tasman District Council; Otago Regional Council; Environment Southland. Supporting partner Friend of the Accord Friends of the Accord Promote the accord through professional development Engage with dairy sector to develop mutually beneficial regional programmes of action. The Federation of Māori Authorities Friend of the Accord A voice and leadership for Māori; develop new partnerships with dairy sector Ministry for Primary Industries Friend of the Accord Recognise economic importance of dairy sector, support policy and research into economic development, managing impacts. Ministry for the Environment Friend of the Accord As above 12

13 Dairy Environment Leadership Group (DELG) Independent third party Exhibit 4: Oversight of Accord Audit of annual report to DELG Dairy NZ and DCANZ will report to DELG annually on progress against Accord commitments To be appointed Sustainable Dairying: Water Accord. Timeline of commitments Date Commitment (Note: applies to dairy support properties from 2017) Responsible entity 31 November 2012 Develop and promote design and construction code of practice for effluent facilities Develop and promote training and accreditation scheme for the effluent industry Develop and promote training in pond design/construction 31 May 2013 Develop audited nitrogen management system for dairy companies to model nitrogen loss on supplier farms; collate benchmarking information on nutrient use. Promote nutrient management advisor certification programme Dairy NZ Dairy NZ Dairy NZ and fertiliser industry 10% of nutrient management advisers certified Fertiliser companies 85% of farms assessed for 3-yearly review of effluent management compliance (farm-specific plans developed for serious non- compliance) New dairy farms must meet all stock exclusion, effluent and nutrient management plans before milk collection commences 31 May percent exclusion of cattle from waterways 100 percent exclusion of cattle from wetlands identified as significant (and within three years for any newly identified) Nutrient management data collected from 85 % of farms for action as necessary 100% of farms assessed for 3-yearly review of effluent management compliance Introduce programmes to reduce reliance on two-point Farm Dairy Effluent (FDE) treatment systems.85% of all dairy farms advised will need water meters by 2020 Tailored riparian management plans for 3 regions Warrant-of-fitness scheme for FDE systems Develop and publish industry good practice obligations for dairy conversions Dairy companies Dairy farmers, dairy companies Dairy companies Dairy NZ 13

14 50 % of nutrient management advisers certified Fertiliser companies 1 August 2014 Start of season. Prepare report on Dairy companies targets for for independent auditor 30 November 2014 Nutrient management information reported back Dairy companies to farmers for action if necessary December 2014 Report on targets for published Independent auditor 31 May 2015 Tailored riparian management plans for 9 regions On-farm trials to improve water use management Nutrient management data collected from 100% of farms for action as necessary All new dairy conversions must have riparian management plan 30 November 2015 Nutrient management data reported back for action. 31 May % of dairy farms with waterways to have riparian management plan Tailored riparian management plans for all regions 31 May percent exclusion of cattle from waterways Apply the stock exclusion commitment to third party (eg farm support properties) 31 December 2017 First review of adequacy and appropriateness of Accord commitments 31 May % of regular stock crossing points bridged or culverted 31 May percent of first group with riparian management commitments completed 100 percent of all dairy farms with waterways to have a riparian management plan Dairy NZ Dairy farmers, dairy companies Dairy companies Dairy companies Dairy farmers, dairy companies Dairy NZ Dairy farmers, dairy companies Dairy Environment Leadership Group Dairy farmers, dairy companies Dairy farmers, dairy companies 85 % of dairy farms including heaviest users to have water meters 31 May 2030 Full implementation of first group riparian management plans Dairy companies Dairy farmers, dairy companies 14

15 Exhibit 5: 15