Part 2: The effectiveness of clean-up funding

Crown investment in freshwater clean-up.

2.1
In this Part, we discuss:

the effectiveness of the four freshwater clean-up funds; and
improving the integration and engagement in freshwater clean-up efforts.

Summary of findings

2.2
We saw examples of freshwater clean-up projects funded under the four freshwater clean-up funds meeting planned milestones and outputs during their funding periods. Although each fund was able to demonstrate some progress towards their intended outcomes, the Ministry cannot yet demonstrate the overall effectiveness of its freshwater clean-up funding. This is partly because the science available to support decisions about improving freshwater quality is complex and continues to evolve.

2.3
We consider that a more complementary and integrated national approach (for example, across organisations responsible for freshwater clean-up and land-based initiatives) would help support long-term outcomes. This would allow funding to be directed and prioritised more strategically and ensure that projects complement each other and build towards achieving long-term and integrated environmental goals.

2.4
In our view, implementing a formative evaluation process during a freshwater clean-up fund's funding period (as well as for individual projects) would further support the Ministry to monitor effectiveness. This could inform the Ministry on what is going well, as well as matters that might require improvement.

How effective are freshwater clean-up funds?

The challenge of improving freshwater quality

2.5
Restoring freshwater quality is challenging. It is widely accepted that there is no "one-size-fits-all" solution. Improving the quality of freshwater requires a range of stakeholders to work together. Speaking at a Freshwater Symposium hosted by Local Government New Zealand, Professor Sir Peter Gluckman in his previous role as Chief Science Advisor, stated that "multiple actions are needed, requiring partnerships between central and local authorities, iwi, citizens and businesses including farmers" to improve freshwater quality.

2.6
The Ministry cannot yet demonstrate the overall effectiveness of its freshwater clean-up funds. This is partly because the science available to support decisions to improve freshwater quality is complex and still evolving. Freshwater environments are made up of complex systems that are affected by land, air, and marine environments. Catchments also vary in size and degrees of complexity. This means that it is difficult to attribute improvements in freshwater quality to specific projects.

2.7
We describe our findings on each of the four freshwater clean-up funds we looked at.

The Rotorua Te Arawa Lakes Programme (2008-32)

2.8
In 2008, the Crown committed $72.1 million to implement the Rotorua Te Arawa Lakes Programme. The Programme's purpose is to restore the water quality of four Te Arawa lakes – Rotorua, Rotoiti, Ōkāreka, and Rotoehu (the four lakes). It is a partnership arrangement between The Crown, Rotorua Lakes Council, Te Arawa Lakes Trust, and Bay of Plenty Regional Council. The Crown's contribution was 50% of the total cost of the Rotorua Te Arawa Lakes Programme for the four lakes over 10 years (which was increased to a 24-year period after a deed variation).

2.9
Projects funded by the Rotorua Te Arawa Lakes Programme used a combination of innovative and traditional methods. These included:

phosphorus-locking through aluminium sulphate dosing (alum-dosing) in Lake Rotorua (see Figure 1);
the Ohau diversion wall and sewage system upgrades in Lake Rotoiti (see Figure 2); and
lake weed harvesting and phosphorus-locking through alum-dosing in Lake Rotoehu.

2.10
In April 2012, Independent Quality Assurance New Zealand (IQANZ) carried out the first audit of the Rotorua Te Arawa Lakes Programme. The audit report confirmed that, although improved governance and project management arrangements were needed, "strong progress was being made towards achieving Trophic Level Index (TLI) targets"². IQANZ also reported the Rotorua Te Arawa Lakes Programme achieved some success in meeting its objective to address nutrient run-off into the four lakes.

2.11
In 2017, the Ministry's Approval Briefing Note of the 2017/2018 Annual Work Plan outlined the long-term trend in improving freshwater quality as a result of funded interventions in Lakes Rotorua, Rotoiti, and Rotoehu and described the next steps for each lake. Lake Ōkāreka remains below freshwater quality targets, but it was reported that this lake did not show further deterioration in 2017.

Figure 1
Alum-dosing in Lake Rotorua

Treating Lake Rotorua's incoming streams with low levels of aluminium sulphate has effectively reduced the amount of phosphorus entering the lake and reduced algal blooms. One of the people we interviewed told us: [Before the dosing] I didn't take my kids out to the lake, but now I do. When I was a child, we would swim in Lake Rotorua, but we started to notice the smell that the water would leave on us and we stopped. In some of the lakes, you would notice the weed and the gross feeling – but now that has changed.

Photo of Lake Rotorua courtesy of Bay of Plenty Regional Council.

Figure 2
Ohau diversion wall

The Ohau diversion wall was constructed on Lake Rotoiti with $4 million of funding from the Crown. It was completed in 2008. The wall was designed to divert nutrients flowing from Lake Rotorua through the Ohau Channel away from Lake Rotoiti. This is part of a programme to improve Lake Rotoiti's freshwater quality.

Photo of the Ohau diversion wall courtesy of Rotorua District Council.

2.12
Although the Rotorua Te Arawa Lakes Programme primarily addressed the four lakes, some effort was also made to address land-based issues. This is evident in the Ministry's efforts to address nutrient run-off from land through a programme that would convert gorse to trees, shrub, or native bush. The gorse programme also imposes a 999-year encumbrance on land that converted gorse to trees. This demonstrates the Ministry's efforts to ensure that project benefits are retained and results are enduring for Crown-funded clean-up initiatives. However, when we spoke to the Ministry about this, it said that, for small projects and relatively small project values, land owners were reluctant to commit to a 999-year encumbrance on their land. This has led to slower uptake on the gorse programme (particularly for smaller projects).

2.13
Efforts were also made to co-ordinate with a range of stakeholders (including communities and iwi), as evidenced through the Rotorua Lakes Strategy Group, a partnership arrangement between Rotorua District Council, Te Arawa Lakes Trust, and Bay of Plenty Regional Council, which reflects accepted good practice.

Fresh Start for Fresh Water Clean-up Fund

2.14
The Fresh Start for Fresh Water Clean-up Fund provided funding to regional councils and their project partners to help clean up nationally significant freshwater bodies affected by pollution. The Ministry allocated $14.5 million to seven projects between 2011 and 2014.

2.15
This fund was part of a first tranche of reforms to freshwater management announced on 9 May 2011, under the Fresh Start for Fresh Water programme in collaboration with the Irrigation Acceleration Fund (managed by MPI) and the National Policy Statement for Freshwater Management 2011.

2.16
In considering the overall effectiveness of the Fund, a 2013 Cabinet paper on the performance of the Fresh Start for Fresh Water Clean-up Fund noted that most of the Fund's projects focused on reducing contaminant inflows at the source (see Figure 3). A 2013 AgResearch report (produced for the Ministry) concluded that this is more cost effective than reducing contaminants further downstream, although it also stated that "there is ‘no silver bullet'". This confirms our understanding of freshwater clean-up strategies.

2.17
However, the 2013 Cabinet paper was less certain on cost effectiveness for individual projects because of the differences between catchments, which can increase or decrease costs. This is consistent with our understanding of the complexities of freshwater clean-up.

Figure 3
Wainono Coastal Lagoon Project, as part of the Fresh Start for Fresh Water Clean-up and Te Mana o Te Wai Funds

The Wainono Coastal Lagoon Project received $800,000 from the Fresh Start for Fresh Water Clean-up Fund from 2012 to 2015. The funding was used to fence streams flowing into the lagoon, build culverts, bridges, and alternative stock water sources at important sites, plant native vegetation, and complete some erosion and sediment control works. The Wainono Coastal Lagoon Project received more than $500,000 of increased funding through the Te Mana o Te Wai Fund, awarded to Te Rūnanga o Waihao Incorporated. As well as fulfilling the Te Mana o Te Wai Fund's objective of improving iwi environmental capacity, the Project also allowed iwi and hapū to influence freshwater management of the lagoon, which is an important mahinga kai and cultural site for rūnanga.

Photo of Wainono Lagoon courtesy of Environment Canterbury.

2.18
In terms of adopting good practice, the Fresh Start for Freshwater Clean-up Fund resulted in seven separate projects nationally, which were in different catchments. However, within the individual projects we looked at, we saw evidence of efforts being made to integrate stream and river tributaries that flowed into the source being funded. For example, in the Lake Horowhenua and Wainono Coastal Lagoon Projects, funding was used to treat tributaries and connecting water sources (see Figure 3).

2.19
The Fresh Start for Fresh Water Clean-up projects provided an opportunity for local government and iwi to work together. Although this required both parties to accommodate differences in each other's operating practices, these projects achieved positive results. Volunteer contributions (such as riparian planting and other operational clean-up tasks) also significantly reduced labour costs and increased local community capability, engagement, and collaboration.

2.20
The Fresh Start for Fresh Water Clean-up Fund's original investment of $14.5 million to clean up six freshwater bodies was increased to a total of $48 million. Through attracting additional funding from regional and district councils, industry, and private land-owners, this represented a considerable increase in the Crown's initial investment.

2.21
In our view, the Fresh Start for Fresh Water Clean-up Fund successfully supported regional councils and their partners in targeting the freshwater clean-up of seven nationally significant freshwater bodies affected by pollution. However, because the Fund addressed individual contestable applications received, rather than a more holistic targeted approach, it was not as effective as it could have been. Current developments in freshwater clean-up suggest that a more effective way of using funding is to focus on vulnerable catchments (see paragraph 2.37).

Te Mana o Te Wai Fund

2.22
The Te Mana o Te Wai Fund was established in 2014 and provided up to $5 million to "help Māori improve the water quality of freshwater bodies (including lakes, rivers, streams, estuaries and lagoons)". A single contestable funding round in 2015 allocated $4.6 million to nine projects.

2.23
The Te Mana o Te Wai Fund aimed to:

support iwi and hapū to take an active role in improving the quality of their local freshwater sources;
enable iwi and hapū to actively participate in managing their local freshwater sources;
develop partnerships and encourage project staff to work collaboratively with others; and
assist iwi and hapū and the wider community to recognise the importance of freshwater in supporting a healthy ecosystem, including supporting human health.

2.24
This was the first fund that had a primary focus on targeting Māori partnerships and collaboration. For freshwater clean-up projects led by regional councils to succeed, it is important to actively involve iwi and hapū as partners.

2.25
With regard to following good practice, and as part of the contestable application process, an independent assessment panel considered whether applications had identified next steps after project completion. This demonstrates the Ministry's efforts to try to encourage long-term benefits of Crown investment. This was supported by the requirement for comprehensive project reporting, including analysis of project benefits throughout the project funding period.

2.26
Through recognising the importance of iwi and hapū being central to effective freshwater clean-up projects, the Te Mana o Te Wai fund successfully promoted forging positive relationships between iwi and hapū and their respective regional councils (see Figure 4). Some of the innovative projects that were funded will benefit current and future generations and encourage them to maintain relationships with their local awa.

Figure 4
Tu te Manawa Project, as part of the Te Mana o Te Wai Fund

The Tu te Manawa Project was managed by Rangitāne o Tamaki nui a Rua Incorporated and involved constructing eight whare at cultural and historic points along the Manawatu River. Representatives of Rangitāne o Tamaki nui a Rua Incorporated told us that the project was: "… amazing for iwi and the wider community and has drawn together the iwi of the Manawatu River. People are connecting more with the river through planting days and school trips to the completed whare and people can see the work needed to clean it up."

Photo taken by Jo Sheffield, Office of the Auditor-General.

Freshwater Improvement Fund

2.27
The Freshwater Improvement Fund aims to improve the management of New Zealand's freshwater bodies by supporting users to move towards managing within environmental limits. The Ministry advocated targeting freshwater bodies in catchments judged "at risk" or "vulnerable". Ministers were advised that domestic and international experience indicates that the most effective way to maximise return on investment is to focus on intervening where freshwater shows early signs of stress.

2.28
The Freshwater Improvement Fund committed $100 million for 10 years to projects that improve freshwater management. The first funding round focused on freshwater lakes, rivers, streams, wetlands, and groundwater in "vulnerable catchments".³

2.29
The Freshwater Improvement Fund aims to support a range of projects of different costs and time frames. This includes one-off short-term projects as well as longer-term projects taking up to five years (see Figure 5).

2.30
The Ministry initially planned to allocate about $24.5 million in the first funding round. However, the Minister for the Environment ended up approving $47 million to 34 projects based on the quality of applications received. Figure 5 provides an example of one of the projects. The first funding round was completed in 2017, and time frames for the funded projects range from two to five years.

Figure 5
Lake Horowhenua Project, as part of the Freshwater Improvement Fund

The Lake Horowhenua Project was granted up to $842,750 to support a range of projects, including shallow groundwater monitoring and implementing two cultural monitoring programme efforts. The focus for the funding is on stormwater management and to increase cultural and scientific information to assess the movement and quality of groundwater within the catchment. The funding will also contribute towards establishing a silt interceptor and complement the Lake Horowhenua Accord's main aims of addressing toxic algal blooms, sedimentation, reducing nutrients entering the lake, and improving native fish habitat.

Photo of Lake Horowhenua courtesy of Horizons Regional Council.

2.31
Because these projects are still in progress, we were not able to assess whether the Freshwater Improvement Fund has achieved its objectives. However, in our view, the Ministry's approach to its latest fund indicates not only a willingness to learn from previous experience and international good practice, but also its efforts to move towards a more strategic and integrated approach to freshwater management.

2.32
Part 3 discusses how the Ministry administers funds.

Improving integration and engagement in freshwater clean-up efforts

A national framework would improve the effectiveness of freshwater clean-up

2.33
There is currently no national framework to guide or inform freshwater clean-up funding. This results in a range of projects that:

are assessed individually (against specific qualifying criteria for each fund) and that have individual project objectives and deliverables;
lack integration and collaboration, creating potentially conflicting objectives for different projects; and
miss the opportunity to maximise support and improve engagement through a national approach to communicating freshwater clean-up efforts and updates.

2.34
In our view, overall Crown investment in freshwater clean-up funds would have been more effective if a more co-ordinated approach had been taken.

2.35
The Ministry has taken a more strategic approach to managing the Freshwater Improvement Fund. This fund follows international good practice by considering a co-ordinated and catchment-based approach when selecting projects to fund. However, the time frames for the projects under this fund remain relatively short (five years is the longest funding period).

2.36
Preparing a national freshwater clean-up framework would support the Organisation for Economic Co-operation and Development's 12 principles on water governance.⁴ New Zealand's current contestable funding approach goes only some way to achieving them.

2.37
Of the 12 principles on water governance, principle 8 recommends promoting "the adoption and implementation of innovative water governance practices across responsible authorities, levels of government and relevant stakeholders". Principle 11 promotes "water governance frameworks that help manage trade-offs across water users, rural and urban areas, and generations".

The Waikato River Authority's vision and strategy The Authority's vision and strategy provides guidance and a plan to ensure that funding decisions are informed and complemented by a five to 15-year clean-up Restoration Strategy. In our view, this supports freshwater clean-up projects to be integrated, prioritised, co-ordinated, and likely to have a long-term and cumulative effect on freshwater quality. We believe that this will ultimately increase overall funding effectiveness for the Waikato region.

2.38
We agree with the Ministry and MPI's October 2018 report, Essential Freshwater: Healthy Water, Fairly Allocated (the Essential Freshwater report). The report states that "to achieve the Government's goal of healthier waterways and freshwater ecosystems, New Zealand needs a coherent policy framework that will lead and drive widespread change in behaviour".⁵ We look forward to this framework being developed as a foundation for future freshwater clean-up objectives.

A more integrated approach is important

2.39
During our fieldwork, the Ministry recognised a need to improve co-ordination with other freshwater grant managers. There are currently different ways of managing funds between different funders. For example, the Ministry accepts co-funding arrangements with other agencies, but other funders do not. This means that applicants cannot always apply for funding from more than one fund, which could limit the benefits of applying additional funding to broaden project objectives.

2.40
In our view, improving collaboration between local and central government and non-government funders would lead to better co-ordination of funded projects. This means that funders need to align national and regional priorities and synchronise individual project timings with funding availability. This could help increase the effective and efficient use of available funds.

2.41
A more co-ordinated approach should lead to improved effectiveness in achieving freshwater clean-up goals. This includes improving co-ordination between land and freshwater funding projects, and can support a national framework for guiding freshwater clean-up.

2.42
The Essential Freshwater report recognises the importance of Parliament, central and local government, iwi and other stakeholders working together to get greater engagement with the new freshwater work programme so it is more effective. A "freshwater taskforce", which includes a broad range of stakeholders, has been established for the essential freshwater work programme.⁶

2.43
In our view, efforts to improve cross-agency co-ordination and integration would improve funds' effectiveness and transparency. It would increase opportunities in national catchments, local communities, and central government to share information, learn from each other, and work in partnership to maximise the effectiveness of Crown funding.

Recommendation 1

We recommend that the Ministry for the Environment improves collaboration and co-ordination with other organisations involved in freshwater clean-up to increase information sharing and ensure that freshwater clean-up projects are complementary and integrated.

The Waikato River Authority's funding strategy

The Authority publishes an annual funding strategy that describes the priority projects for the Waikato River Clean-up Trust and the Authority each year. It publishes this funding strategy before the funding round for that year.

The funding strategy aims to provide clarity and transparency about clean-up priorities. It also demonstrates the importance of a regulatory framework to support the Authority's vision and strategy, and promotes a cohesive, prioritised, and co-ordinated approach to freshwater clean-up.

Keeping everyone informed about freshwater will help increase engagement

2.44
Communication and sharing success stories and lessons learned are regarded internationally as positive strategies to increase engagement in freshwater clean-up work.

2.45
Several funding recipients told us that a hui organised in the first year of the Te Mana o Te Wai Fund was a useful way to share lessons from other funding recipients. Despite seeing value in this event, it was not repeated during the remainder of the Te Mana o Te Wai Fund.

The Waikato River Authority's communication approach The Authority's approach is consistent with its vision and strategy and demonstrates a good understanding of the importance of communicating its approach and building its reputation. The Authority uses newsletters, media releases, local events, and face-to-face interaction to provide updates. The newsletter (see Figure 6) and news section on the Authority's website demonstrate a proactive approach to sharing news with a wide audience and promotes itself as an approachable and collaborative organisation. The Authority provides details of upcoming funding rounds, reminds potential applicants of important time frames for applications, and requests feedback on its policies and approaches.

2.46
In our view, the Ministry has an opportunity to increase engagement and support for freshwater clean-up efforts. This would improve awareness and understanding of the freshwater clean-up efforts it funds and help share lessons between organisations involved in freshwater clean-up. There might also be opportunities to work with other freshwater clean-up funders to reach a wider audience.

Recommendation 2

We recommend that the Ministry for the Environment promotes greater public visibility and understanding of freshwater clean-up efforts and shares lessons from freshwater clean-up projects nationally.

Improving the evaluation of funds

2.47
The Ministry has recently contracted an organisation to evaluate the effect and outcomes of the Fresh Start for Fresh Water Clean-up Fund. It also plans to evaluate the Te Mana o Te Wai Fund when all projects are complete. It will use the results to inform the development of future freshwater clean-up funds and secure improved environmental outcomes.

2.48
The Ministry said that it is also working towards implementing an evaluation framework for the Freshwater Improvement Fund to establish outcomes achieved and possibly carry out follow-up surveys to help measure progress.

2.49
Until the latest Freshwater Improvement Fund, the Ministry generally evaluated freshwater clean-up funds by assessing whether they achieved planned outputs, as opposed to taking a more integrated and overall approach.

2.50
The Ministry's upcoming evaluation reports are a positive step towards improving the effectiveness of freshwater clean-up and establishing the success of current and previous clean-up funds. We acknowledge that this is a challenging issue but encourage the Ministry to establish a manageable strategy to effectively minimise this potential risk to the long-term effectiveness of Crown funding.

Figure 6
Excerpts from the Waikato River Authority's Maunga Ki Tai newsletter, December 2018

The largest project to be funded this year is a continuation of the Waipā Catchment Plan implementation which will involve working with approximately 70 farmers and landowners within identified priority catchments. The $1.6 million of funding will work towards reducing sediment levels going into the Waipā River and its tributaries. Sediment from the Waipā River is a major factor in reducing the water quality in the lower Waikato River.

Other activity highlighted in this issue of the newsletter included:

Landmark hui

A large representation of River Iwi, together with the Crown and the Waikato River Authority, took part in a landmark hui on the future of the Waikato and Waipā rivers last month.

The hui took place in Hamilton on November 7.

The hui looked at ways in which river iwi, the Crown and the Authority can work more closely together on a range of issues for the benefit of the Waikato River and its catchment.

The facilitated workshop discussion was attended by staff and governance representatives.

Staff and governance representatives who attended the hui in Hamilton on November 7

2: The Trophic Level Index is a measure used to indicate lake water quality. These were set by Bay of Plenty Regional Council for the Rotorua Te Arawa Lakes Programme. For more information see www.rotorualakes.co.nz.

3: Vulnerable catchments are those that are "showing signs of stress" but that are not yet at the point where cleaning up the water body would involve significant investment and time.

4: Organisation for Economic Co-operation and Development (2015), OECD Principles on Water Governance, at oecd.org.

5: Ministry for the Environment and Ministry for Primary Industries (2018), Essential Freshwater: Healthy Water, Fairly Allocated, Wellington, page 21.

6: The freshwater taskforce includes representatives from the Ministry for the Environment, the Ministry for Primary Industries, the Treasury, Te Puni Kōkiri, the Māori Crown Relations Unit, the Department of Internal Affairs, the Department of Conservation, and the Ministry of Business, Innovation and Employment, and expertise from local government.