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Northern Hawke’s Bay Sustainable Land Management Strategy

Options Paper

Report prepared by Sean Weaver, Ekos, for the Hawkes Bay Regional Council and the

Ministry for Primary Industries

July 2016

About the Author

SeanWeaver is ExecutiveDirector of Ekos – a consulting social enterprise focusing on environmentalfinancingandsustainablelandmanagementsolutions.Seanisaspecialist inthetechnicalandbusinessdimensions of sustainable land management, and performance-based 'payment for environmentalservices' (PES). He has a PhD in Forestry and over 25 years experience in environmental financingincludingproject&national level indigenous forest carbonand conservationmanagement.He lives inTakaka,NewZealand.Ekos29CentralTakakaRdRD1Takaka,[email protected]

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CONTENTS TERMSOFREFERENCE ..............................................................................................................3EXECUTIVESUMMARY .............................................................................................................41.PROBLEM:EROSION&WATERQUALITY...............................................................................91.1TheStateOfErosionInTheWairoaDistrict ........................................................................... 91.2LocalContext ........................................................................................................................ 10

2.SOLUTIONFRAMEWORK ....................................................................................................122.1EcologicalInfrastructureInvestment ................................................................................... 122.2AnIntegratedApproach ....................................................................................................... 122.3IntegratedProgrammeOfActivities..................................................................................... 13

3.SPECIFICRECOMMENDATIONS ...........................................................................................143.1PartnershipwithIwi ............................................................................................................. 143.1.1RecommendedNear-TermAction .................................................................................. 14

3.2UpgradeCatchmentGroups................................................................................................. 143.2.1RecommendedNear-TermAction .................................................................................. 16

3.3WairoaWorkReadinessProgramme ................................................................................... 163.3.1PlantationForestryCase-Study....................................................................................... 173.3.2RecommendedNear-TermAction .................................................................................. 17

3.4PlantationForestryControls ................................................................................................ 183.4.1PhysicalGeographicContext .......................................................................................... 183.4.2FireControl ..................................................................................................................... 193.4.3PublicLiability ................................................................................................................. 193.4.4RecommendedNear-TermAction .................................................................................. 20

3.5HBRCPolicyReview .............................................................................................................. 203.5.1RecommendedNear-TermAction .................................................................................. 21

3.6ErosionControlAfforestationScheme ................................................................................. 223.6.1ECASDesignFeatureRecommendations........................................................................ 233.6.2RecommendedNear-TermAction .................................................................................. 25

3.7ComplementaryMeasures ................................................................................................... 253.7.1ManukaHoney................................................................................................................ 263.7.2CarbonMarket................................................................................................................ 273.7.3RecommendedNear-TermAction .................................................................................. 27

3.8SustainableFarming ............................................................................................................. 283.8.1RecommendedNear-TermActions................................................................................. 28

3.9WhakakiEcologicalInfrastructureProject ........................................................................... 293.9.1AMulti-StakeholderApproach ....................................................................................... 313.9.2Measurement,ReportingandVerification(MRV) .......................................................... 323.9.3EvaluatingEcologicalInfrastructureInvestment ............................................................ 323.9.4RecommendedNear-TermAction .................................................................................. 33

APPENDICES ...........................................................................................................................34Appendix1.ConsultationRecord ............................................................................................... 34Appendix2.KeyStakeholders .................................................................................................... 35

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Terms Of Reference Theconsultantwascontractedtoundertakethefollowing:

Consultwithlocal,regionalandnationalstakeholderstoexploreoptionstoaddressacutesoilerosioninboth a forestry and pastoral context for Northern Hawke’s Bay. This will include scoping potentialpiloting approaches for broader application. The chronic and pervasive sustainable landmanagementissuesintheWairoaDistrictwillrequiredeeper,longer-termthinking,whichtheHBRCisworkingoninparallelandwillhaveanemphasisonsocialprocesstoinfluencelandusedecisionmakingovertime.

The consultant’s role is to indentify options and recommended priority actions for HBRC andMPI, inworkingwithlocalstakeholders,toaddressthemostseriousneartermcontributiontodegradedwaterquality.Thiswillbeexecutedbyacloseexaminationof immediatepressuresandcatchmenthotspotsthat requireaction in theverynear term,whichcanbeseenas indicatorsofproblems thatabroaderstrategywillneedtoaddress.

The consulting report will focus on these immediate priorities, with a view to addressing them in amannerthatwillfitwithinabroaderstrategyformatchinglandusewithlandusecapabilityovertime.

TheconsultantisrequiredtoidentifyprioritiesforHBRCandMPItofocusitseffortsinthenearterm,ifmoreresourcesweretobemadeavailable,andidentifypotentialbenefits,costs,risksandopportunitiesthatwouldbealignedwithsuchanapproach.Thiswill includeexploringhowapilot initiativecouldbedesigned to deliver a proof-of-concept and demonstration activity for potentially scaling up in theimplementationofabroaderstrategytoaddressthisregionalproblem.

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Executive Summary AcutesoilerosionandnutrientloadsinriversareseriouslydegradingwaterqualityinNorthernHawke’s

Bay and is resulting from land use that is incompatible with land use capability. This Options Paper

presentsaconceptnoteonasustainablelandmanagementstrategyforNorthernHawke’sBay.

Conceptual Framework: Ecological Infrastructure

Human wellbeing depends on a combination of economic and natural capital in any given area. Theerodingsteep-landsoftheWairoaDistrictareerodingthenaturalcapitalofnorthernHawke’sBay,asaresultoflandusethatisnotcompatiblewithlandusecapability.

Accordingly, there is a compelling need to reduce erosion and water quality degradation risk in theWairoa District through targeted investments in “ecological infrastructure” capable of delivering thedesired sustainable land management outcomes. Like engineering infrastructure, ecologicalinfrastructure delivers beneficial services to human wellbeing (“ecosystem services”) such as waterquality and reduced flood risk (and associated cost). Like engineering infrastructure, ecologicalinfrastructure can continue to deliver its services only when there has been sufficient investment inmaintenance.

Integrated Approach

Effectivelydeliveringthisupgraderequiresan integratedapproachtoamultifacetedproblem-akintoathree-leggedstool.Thelegs:

1. FinancialIncentives(carrot)2. RegulatoryRefinement(stick)3. CommunityEngagement(modality)

Thegoalistocreateadynamicsynergybetweenincentives(carrots)andregulation(sticks)togenerateanefficientoutcomethatposeslowpoliticalrisktocentralandlocalgovernmentactors,andyet iscapable of driving real behavior change at scale, to measurablyreduceriskandenhancehumanwell-beinginnorthernHawke’sBayandbeyond.

An integratedapproachwilldelivermoredurableoutcomesthancherry-pickingcertaincomponents inisolation. It is strongly recommended to preserve the integrity of integration by means of a fullyintegratedpilotproject,followedbyrefinementandscalinguptoawiderareainthefollowingstages:

Stage1:Detaileddesignandconsultation(6-months)Stage2:PilotProject(1-2years)Stage3:ScaleUp(multi-yearroll-out)

Financial Incentives(carrot)

Regulatory Refinement

(stick)Community Engagement(modality)

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Figure1.Conceptdiagramofstrategicapproach

Priorities For Action

Priorities for Hawke’s Bay Regional Council (HBRC) and the Ministry for Primary Industries (MPI) toconsiderinthenearterminclude:

CommunityEngagement

1. Partnershipwith Iwi:MPI, HBRC, and theWairoa District Council to continue to consultwith iwigroups as an integral component of a sub-regional erosion control programme, with a view toexploringtheleadershiprolethatiwicanplayinsuchaprogrammeinpartnershipwithcentralandlocalgovernment.

Sustainable Land Management Practices

Land

owne

r Po

pula

tion

Willing but not able (will respond to carrots and prospect of future sticks)

Low High

Land

owne

r Po

pula

tion

Our Goal

Sustainable Land Management PracticesLow High

Early movers (move without incentives)

Reserve regulatory sticks for these, after

rest of population demonstrates economic

viability of moving

Str

eam

Wat

er Q

ualit

y

Time

Cos

t of

ext

rem

e w

eath

er

even

ts

Our KPIs

Our Strategy

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2. UpgradeCatchmentGroups:Hawke’sBayRegionalCouncilandMPIcollaborateondefiningtargeted

outcomes to be allocated/devolved to the catchment group sector in the Wairoa District as acomponentofawidererosioncontrolprogramme.Consultwiththosewithexperienceinthissectortoscopebudgetsfora)paidcoordinators,b)contractors,c)volunteers,d)communityconsultation,ande)operationalexpenses(e.g.nurseries).Pricebudgetlinessufficientlytocovertherealcosttodeliver targeted outcomes. Concurrently explore a co-financingmodel that engages funding fromHBRC,MPI,philanthropy,andlandownerswithMPI/HBRCfundingdisbursedviaacontestablegrant.Then recruit catchment group/s to implement funded project/s. MPI and/or HBRC to allocatefunding for the development of catchment groupmanagement tools (e.g. businessmanagement;performance measurement & reporting) to enable recruited catchment group/s to perform at aprofessionallevelofshort,mediumandlongtermoutcomedelivery.

3. Wairoa Work Readiness Programme: HBRC and MPI to coordinate the development of a WorkReadinessProgrammeaimedatsupplyingalocal(i.e.Wairoa)labourforceforanintegratederosioncontrol programme. HBRC and MPI to consult with the plantation forest sector, manuka honeysector,horticulture,agriculture,andcatchmentgroupsectors,theMinistryforSocialDevelopment,MinistryofEducation,andtheWairoaDistrictCouncil.

RegulatoryRefinement

4. PlantationForestryControls:TheNationalEnvironmentalStandardforPlantationForestryisyettobe released and may contain provisions that cover this section – so replication is a possibility.Nonetheless, it is recommendedthatHBRCdevelop/refine regulations requiring forestryoperatorsinNorthernHawke’sBaytoberequiredtodemonstrate:• Forestryroadandrivercrossingengineeringpracticesthatminimizesoilerosionrisk.• Harvesting and re-planting design schedules (combined with road construction/maintenance

plans) to enable a significant proportion of large plantation forestry catchments to be underforest cover at anyone time. Thedetails should bedeveloped in close consultationwith bestpracticeplayersintheforestryindustry.

• Participationinpublicliabilityinsurance(orequivalent)programmeforrapidremovalofforestryslashfollowinghighrainfallevents.

HBRCtoconsultwiththeplantationforestindustryinHawke’sBaytodeterminethemostpublicallybeneficial model for a public liability financing programme for rapid removal of forestry slashfollowinghighrainfallevents.Optionsincludearequirementforplantationforestrycompaniestoa)self-insureforthisformofpublicliabilityrisk,b)takeonpublicliabilityinsuranceeitherindividuallyorasasub-regional(i.e.NorthernHawke’sBay)syndicatethroughasuitableinsurancebroker,orc)contributetoapublicliabilityfinancingprogrammeoperatedbytheHawke’sBayRegionalCouncilorsubcontractedentitythatgeneratesfinancingco-benefitsforsocialforestryintheWairoaDistrict.

5. HBRCPolicyReview:HBRCtoundertakeapolicyreviewofpotentialregulatorymeasuresavailablefor local implementation of the National Policy Statement on Freshwater Management 2014combinedwithavoluntaryincentiveprogrammeforstrategicerosioncontrolforNorthernHawke’sBay.Thepurposeofsuchforthcomingregulation1istoa)sendabehaviourchangesignaltoprivate

1 E.g. Coming into force8 years after launching incentivemechanisms.Why8 years? Longenough tonot causepanic, but short enough tomotivatefarmerstogetonwithaccessingincentivestoavoidfutureregulation.

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land managers to respond to opportunities to change behaviour through access to incentivemechanisms during a regulatory holiday window, and b) to implement command-and-controlmeasures after a regulatoryholidaywindow to cause requiredbehaviour change that has not yethappened (e.g. compulsory retirement from grazing of lands classified as ‘High Landslide risk –deliverytostreams’).

FinancialIncentives

6. ErosionControlAfforestationScheme:EstablishapilotErosionControlAfforestationScheme(ECAS)initially limited to the Whakaki Catchment, to test and refine an incentive mechanism for theretirementandafforestationoflandsclassifiedas“HighLandslideRisk–deliverytostream”.FinancetheECASbyestablishingaring-fencedportionoftheAfforestationGrantScheme,combinedwitharing-fencedportionoftheEastCoastForestryProject(ECPF)fundingandallocatetoaspecialECASFund.TheECASFundtobejustified(i.e.defendedagainstcriticismfromotherregions)onthebasisofa)thespecial (longrunning)erosionandwaterqualitydegradationcircumstances intheWairoaDistrictingeneralandtheWhakakicatchmentinparticular,andb)theneedforapilotprojecttotestthis particular fundingmechanismwithout having to change the entire AGS and the ECFP, and c)where theoutcomeof thispilotprojectcould lead to redesigning theAGSandECFP inaway thatcouldbenefit other regions. TheECAS to adoptdisbursement rules specified in Section3.6of thisOptions Paper. If proven effective, the ECAS could be scaled up to target high erosion risk landsacrossawiderareainHawke’sBayandpotentiallynation-wide.

7. Complementary Measures: Establish a consultation process with farmers and iwi in the WairoaDistrict, Business Hawke’s Bay, manuka honey operators, horticultural operators, sheep dairyoperators,MPI, and HBRC to scope out realistic support that the Crown could provide in a RuralProductivityInnovationProgramme.Suchaprogrammecouldfunctionthrougha)Crowninvestmentsupport for key enabling infrastructure, to stimulate private sector investment, and b) advisorysupport for farmers seeking to transition tomore sustainable farmproductivity innovations. HereaccesstoadvisorysupportisreservedforfarmerswhohavealreadyparticipatedintheECASandthesupport for farmers functionsasarewardformoving inastrategicallydesirabledirection.ScopingtheformofadvisorysupportcouldbeundertakenbymeansofaWairoaDistrictSustainableFarmingInnovation Workshop to bring together stakeholders in pastoral farming, manuka honey,horticulture,sheepdairyoperators,biologicalfarming,andiwi.ClimateChangePolicy:HBRC,andtheWairoaDistrictCouncilmakeajointrecommendationtotheMinisterforClimateChangeonhowthenextversionoftheNewZealandEmissionsTradingSchemecould function as an effective supporting infrastructure for erosion control. These entities couldrecommendthatmechanismsbe investigatedtoensure that thecarbonprice for targetederosioncontrol afforestation is sufficient to stimulate such afforestation (e.g. $20-$25/tCO2e in the nearterm).ThiscouldincludeanunderwritingmechanismforafforestationactivitiesundertheECAS.

8. SustainableFarming:HBRCtofundaWairoaDistrictSustainableFarmingProgrammethatincludesadesktop review of sustainable farming science and economics, a multi-stakeholder WairoaSustainableFarmingInnovationWorkshoptoidentifywaystosupportlocalfarmersinatransitiontomoresustainablefarmingpractices.

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IntegratedPilotProject

9. WhakakiEcologicalInfrastructureProject:MPIandHBRCtofundtheestablishmentoftheWhakakiEcological Infrastructure Project. This could involve funding the development of a Project DesignFrameworkforpresentationataMulti-StakeholderProjectDesignWorkshop.MPIandHBRCtoalsofundthesubsequentdevelopmentofFinalProjectDesignforpresentationofanMPI-fundedProjectLaunch event. The Final Project Design would contain a budget and funding requirements fromdifferentfundingsources, includingco-financingbyarangeofgovernmententitiesandtheprivatesector.

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1. Problem: Erosion & Water Quality

1.1 THE STATE OF EROSION IN THE WAIROA DISTRICT

Soil erosion has contributed to declining water quality in Northern Hawke’s Bay for decades, withunderperformanceoferosioncontrolandwaterquality improvementoutcomes.AccordingtoHawke’sBay Regional Council, approximately 34% (47,000 ha) of farmland in Northern Hawke’s Bay (Mahia,NuhakaandWairoacatchments)isclassifiedas‘highlandsliderisk’.

Figure1.Soilerosionriskmap,NorthernHawke’sBay.

Actions to improvewaterqualityneedanupgrade in scale and scope ifwaterqualitydecline is tobereversed for thebenefit of the regional economy. Steeppastoral farmland contributes to anon-goingsuspended stream sediment yield that is typically 3-4 times higher than equivalent streams flowingthroughplantationforests.Sedimentyieldsfromplantationforestmaybelowerthanpastoralfarmlandformostofthetimberrotation,butspikestoaround3timesthesedimentyieldsfrompastoralfarming

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during harvesting, even under best practice. Furthermore, there is a “wall of wood” projected to beharvested fromplantation forestry lands in thissub-region incomingyears.Thissignificantly increasesthe potential risk of harvest-linked soil erosion, associated stream sediment loads and downstreamdamagefromforestryslashifappropriatemitigationmeasuresarenotputinplaceaheadoftime.

Stream water quality is also detrimentally affected by chemical degradation resulting from fertilizerrunoff intostreams(e.g.phosphorus).Resultinghighnutrientcontent infreshwatercausesrapidalgalgrowth, then leading toalgaldeathanddecomposition, starvingawaterway fromoxygen.Thiscausesthe freshwater habitat to degrade, leading to reduction in macro-invertebrate food sources for fish,leadingtoslowerfishgrowth,andreductionintherecreationalfishingandamenityvalueofstreamsandrivers.

Degradation of stream water quality has a knock-on effect on estuarine and inshore marineenvironments. A recent review of the Hawke’s Bay coastal environment showed a decline in theconditionof riversandestuaries in the regionwith40%of river-mouthandestuaryareasclassifiedasModeratelyPollutedandinaworseconditionthanin1965.Thisiscoupledbyincreasedsedimentationthroughoutriversandestuarinesystemsintheregion.

Clearly, reducing soil erosion and improvingwater quality inNorthernHawke’s Bay is a task for bothpastoral farmers and plantation foresters. Water quality decline is also a symptom of lost economicopportunities for sustainable land management to drive sub-regional economic performance.Impedimentstosub-regionalruraleconomicperformanceinclude:

• Misalignmentof landusewith landuse capability,withparticular regard to erosion-pronehillcountrypastoralfarming.

• Under-developedhumanresourcesinthelocallabourforce,particularlyinWairoa.• Lackofsupply,andshortageofdemandsideinfrastructurecomponentscapableofunlockingthe

potential for complementary industries (e.g. manuka honey, horticulture, aquaculture, sheepdairy,farmforestry),aswellasmoresustainableformsofexistingbeefandlambfarming.

• Insufficientriskmanagementandriskmitigationprotocolsforforestryslash.

Inshort,solvingthesub-regionalerosionproblem is linkedtosolvingtheruraleconomicdevelopmentchallengeinawaythatiscompatiblewiththephysicallandscapeandwaterways.

1.2 LOCAL CONTEXT

TheHawke’s BayRegional Council (HBRC) seeks to reduce the sediment (including forestry slash) andnutrient loads inNorthernHawke’sBaywaterways in linewith localapplicationof theNationalPolicyStatement on Freshwater Management, and the National Environmental Standard for PlantationForestry.

Business-as-usuallandmanagementonerosion-pronehillcountryinNorthernHawke’sBayhasthusfarfailed to adequately address the water quality problem, due primarily to land use practices that areincompatiblewith landusecapability formanysteep landsites.TheHawke’sBayRegionalCouncilhasconcludedthatamorecomprehensiveapproachtostrategicallyaddressingthisproblemisnowneeded–hence this “OptionsPaper”. Thismulti-facetedproblem requiresan integrated solution thathas theneteffectofmeasurablyenhancingwaterqualityinlinewithlocalimplementationoftheNationalPolicyStatement on Freshwater Management. Other key performance indicators in an integrated solution

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includedirectmeasurableeconomicgrowthandsocial improvement, inamannerdirectlyalignedwithactivitiesthatimprovewaterqualityandreducefloodrisk.

Strategicrealignmentoflandusewithlandusecapabilitywillneedtoincludeacombinationoftargetedlandusechange (non-forest to forest landuse)and landuse improvements focusingonhigh risk landclasses.

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2. Solution Framework

2.1 ECOLOGICAL INFRASTRUCTURE INVESTMENT

Humanwellbeingdependsonacombinationofeconomicandnatural capital inanygivenarea.Wheneithererodes,sotoodoestheprospectforhumanwellbeinginthatarea.Theerodingsteep-landsoftheWairoaDistrictareerodingthenaturalcapitalofnorthernHawke’sBay,asaresultoflandusethatisnotcompatible with land use capability. This is increasing the risk of flood damage and water qualitydegradation, that in turnposesa threat to the region’sprosperity.When thephysical impactof floodevents increases, the cost to the regional economy also increases in the form of flood damage todownstream property and infrastructure, and loss of productivity both upstream and downstream.Whenfreshwaterandinshoremarinewaterqualitydeclines,theprosperityofindustriesdependentonsuchwaterresourcesalsodeclines–e.g.fisheriesandtourism.

Accordingly, there is a compelling need to reduce erosion and water quality degradation risk in theWairoa District through targeted investments in “ecological infrastructure” capable of delivering thedesiredsustainablelandmanagementoutcomes.Examplesofbeneficialecological infrastructureintheWairoaDistrict include a) steephill country covered in permanent forest; b) rivers, lakes and lagoonsthathave fencedpermanent foreston theirmargins, c)pasture thatdoesnotdeliverhighvolumesofnutrientandsedimenttostreams.

Likeengineeringinfrastructure,ecologicalinfrastructuredeliversbeneficialservicestohumanwellbeing.These services are called “ecosystem services” and includewater quality and reduced flood risk (andassociated cost). Like engineering infrastructure, ecological infrastructure can continue to deliver itsservices only when there has been sufficient investment in maintenance. From an ecologicalinfrastructurepointofview,thehillcountryofthenorthernHawke’sBayissomethinglikeadilapidatedbridgeandisindireneedofanupgrade.

2.2 AN INTEGRATED APPROACH

Effectivelydeliveringthisupgraderequiresanintegratedapproachtoamultifaceted problem. If the problem were not multifaceted, effortsover the last few decades would have resolved it by now. Lessonslearnedduringthattimeinformthecurrentintegratedapproach-akintoathree-leggedstool.Thelegs:

1. FinancialIncentives(carrot)2. RegulatoryRefinement(stick)3. CommunityEngagement(modality)

Removealeganditloseseffectiveness.

The core strategic message is that an integrated approach will deliver more durable outcomes thancherry-pickingcertaincomponents in isolation. Inordertoreducefinancialrisktofundingentities, it isstrongly recommended to preserve the integrity of integration by means of a fully integrated pilotproject,followedbyrefinementandscalinguptoawiderareainthefollowingstages:

Financial Incentives(carrot)

Regulatory Refinement

(stick)Community Engagement(modality)

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Stage1:Detaileddesignandconsultation(6-months)Stage2:PilotProject(1-2years)Stage3:ScaleUp(multi-yearroll-out)

Some components of a pilot project (e.g. regulatory refinement)will have near-term impact across awidergeographical area inano-regretsmanner.Concurrently, specific actions inadefinedcatchment(e.g.WhakakicatchmenteastofWairoa)willenablethemethodologyofan integratedapproachtoberefinedpriortowiderapplication,whilstmakingrealprogressonthegroundfromtheoutset.

2.3 INTEGRATED PROGRAMME OF ACTIVITIES

ThisintegratedapproachbringstogetherarangeofcomponentsthatinaggregatearecapableofcausingmeasurablebeneficialchangetolandmanagementintheWairoaDistrict.Thecomponentsare:

CommunityEngagement

1. Partnershipwithiwi.2. Upgradecatchmentgroups.3. WairoaWorkReadinessProgramme.

RegulatoryRefinement

4. Plantationforestrycontrolsrelatingtoerosioncontrol.5. HBRCPolicyReview.

FinancialIncentives

6. ErosionControlAfforestationScheme.7. Complementarymeasures.8. Sustainablefarming.

IntegratedPilotProject

9. WhakakiEcologicalInfrastructureProject

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3. Specific Recommendations

3.1 PARTNERSHIP WITH IWI

InMay2016TeTiraWhakaemioTeWairoasigned itsdeedofsettlement fora$100millionTreatyofWaitangi claim, which now proceeds through ratification by local iwi and hapū. Iwi and hapū in theWairoa District will accordingly play a central role in sustainable land management in the NorthernHawke’sBay.Thisincludesexistingandpotentialrolespastoralfarming,plantationforestry,horticulture,honey,aquiculture,agribusiness,erosioncontrol,aswellasanupgradedcatchmentgroupsector.

The long-term economic development horizon of many iwi land management groups is deeplycompatiblewithasustainablelandmanagementagendafortheregion,andMāoriwillverylikelyplayastrong leadership role in partnership with the Crown and local government. It is important that astrategic approach to erosion control and water quality improvement in Northern Hawke’s Bay isdevelopedinclosecollaborationwithiwigroups.Suchpartnershipandco-managementhasshowntobesuccessful with the Whangawehi Catchment project, which will have many insights to share with abroadersub-regionalprogramme.

The particular way in which local iwi and hapū will be involved will need to be determined throughtransparent consultative processes that are ideally co-designed by those groups and other keystakeholders.

3.1.1RecommendedNear-TermAction

MPI, HBRC, and the Wairoa District Council to continue to partner with iwi groups as an integralcomponentofa sub-regionalerosioncontrolprogramme,withaview toexploring the leadership rolethatiwicanplayinsuchaprogrammeinpartnershipwithlocalgovernmentandtheCrown.

3.2 UPGRADE CATCHMENT GROUPS

National and local governingentities that are seriousabout solving theproblemoferosionandwaterqualityintheWairoaDistrictwillneedtofindthenecessaryresourcestodeliveraserious(professional)solution.Waterwaysareacommonresource impacteduponby landmanagementonadjacentprivateproperty. Waterways management therefore, requires coordination of direct and indirect activitiesassociated with waterways (e.g. riparian plantings, pest and weed control, promoting sustainablefarmingpractices).

Recruitingconsultingfirmstoundertaketheseactivitieswouldlikelybeprohibitivelyexpensive.Suchanapproachwouldalsoincreasetheriskofinsufficientlyengaginglocalcommunitiesbecauseofthelikelycostofsuchconsultation/engagementwhenundertakensolelybytheprivatesector.Catchmentgroups,on the other hand, present a least-cost approach through low-cost human resources (i.e. significantvoluntaryeffort)combinedwithpotentiallyhighlevelsoflocalcommunitybuy-in(whenwellmanaged)thatcanenable(andisnecessaryfor)sustainingsuchprogrammesbeyondseed-fundingwindows.

While catchment groups are often very good at mobilizing local voluntary labour, they are typicallyinsufficiently resourced to deliver their full potential. They tend to cobble together funding from avarietyofsourcesandoperateonashoestring.Thiscansometimes leadtopoorgovernanceandpoor

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financialdiscipline (i.e.notapplying soundbusinesspractices), and reportingbasedonactivity2 ratherthanoutputandoutcomedelivery.

Amiddlepathoptionpresentsitselffora(serious)Wairoaerosioncontrolprogramme:professionalizingcatchment groups by supplying additional resources to enable them to deliver a higher volume ofmeasuredoutcomesinadisciplinedmannerandpricedtocovertherealcostsofaleast-costapproach.“Realcost”herereferstoconservativebudgetsthatadequatelyaccountforallnecessaryactivities.Thisapproach issomewhatcounterintuitiveforthecommunityfundraisingsector,whichhasatendencytoover-promise(“aimforthestars”)infundingapplications,butunder-deliver(“onlylandonthemoon”)inoutcomereporting(ifoutcomesarereported).

Professionalizingcatchmentgroupsthroughrealisticfundingcanbeaccompaniedbyatransitiontothekind of performance measurement promoted by the State Services Commission for governmentagencies.Thiscouldincludetheapplicationofdisciplinedinterventionlogicmodels(examplebelow)thatclearlyidentifylong-term,medium-term,andshort-termoutcomes(thelatterpurchasedbyfunders).

Key performance indicators (KPIs) of progress towards (or delivery of) these outcomes can then bemeasuredusingbestpracticemeasurementmethodsincollaborationwithcentralandlocalgovernmententities (see example below). KPIs for short-term outcomes can then be used as the basis for thedeterminationofoutputs,activitiesandassociatedprojectbudgetsinfundingproposals.

2Forexample,weedcontrolperformancemeasurement that is activity-basedcanenableaweedcontroloperation toappear cost-effectivewhereby it targets high weed density areas, where the marginal cost of weeds-killed-per-unit-effort are low. But when the marginal costincreases(astheweeddensitydecreasesinresponsetoweedingeffort),theremaybeatendencytorelocatetootherhighweeddensityareasrather thaneradicatingweeds fromthe firstarea.Thiscan leadtosituationswhereactivityperformance ishighbutwherestrategicvalue isrelatively low. Conversely, the prima facie cost-benefit of effective weed eradication can have the appearance (to non-experts on fundingpanels)ofbeingcomparativelyinefficientbecauseofthis(commonlyhidden)marginalcostelement.Butwhenmeasuredagainsttheavoidedfuturecostofweedcontrol,astrategicallyeffectivemodelcanshowafavourablecost-benefit.

PHASE 1: PROJECT X (INTERVENTION LOGIC MODEL)

Ac#vi#es Outputs Short-TermOutcomes

1.1:Ac'vityCluster1

1.1.1Ac#vity1

1.1.3Ac#vity3

1.1.2Ac#vity2

1.1aOutput1

1.1cOutput3

1.1bOutput2

1.2Ac'vityCluster2

1.2.1Ac#vity1

1.2.3Ac#vity3

1.2.2Ac#vity2

1.2aOutput1

1.2cOutput3

1.2bOutput2

Medium-TermOutcomes

1.1Short-TermOutcome1

1.Medium-TermOutcome1

Thefunderisbuyingthese

withtheinten#onofcausingthis


Projectbudgetisbasedonthese

Ac#vityrepor#ngisbasedonthese

Milestonerepor#ngisbasedonindicatorsofprogresstowardthese

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Professionalizingcatchmentgroupspresentsanopportunity forefficient centraland local governmentspendingoncommunity-basedpartnerorganisationsthatareupgradedtooperateasefficient,effectiveandtransparentcommunityenterprises.Inturn,enablingcatchmentgroupstobecomereadytooperateasefficientcommunitybusinesseswillestablishfoundationsforsuchentitiestopotentiallybecomeself-financing.This isbecauseanefficientcommunitybusinesswillhavegreatervalueasaprofessionalbutleast-costserviceproviderinthesustainablelandmanagementsector.


HBRC, MPI and MFE collaborate on defining targeted outcomes to be allocated/devolved to thecatchmentgroupsector in theWairoaDistrictasacomponentofawidererosioncontrolprogramme.Consult with those with experience in this sector to scope budgets for a) paid coordinators, b)contractors,c)volunteers,d)communityconsultation,ande)operationalexpenses(e.g.nurseries).Pricebudgetlinessufficientlytocovertherealcosttodelivertargetedoutcomes.Concurrentlyexploreaco-financingmodel that engages funding fromHBRC,MPI, philanthropy, and landownerswithMPI/HBRCfunding disbursed via a contestable grant. Then recruit catchment group/s to implement fundedproject/s.MPIand/orHBRCtoallocatefundingforthedevelopmentofcatchmentgroupmanagementtools (e.g. business management; performance measurement & reporting) to enable recruitedcatchmentgroup/stoperformataprofessionallevelofshort,mediumandlongtermoutcomedelivery.

3.3 WAIROA WORK READINESS PROGRAMME

An integratederosion controlprogramme in theWairoaDistrictwill need (andbenefit from)a labourpool capable of supportingmanagement activities on the land. Such activities (elaborated somewhatbelow) includehill countryafforestation,nurserymanagement,pestandweedcontrol,manukahoneyproduction,andcontributionstoabetter-managedplantationforestrysectorandotherpotentialgrowthsectors(e.g.horticulture,aquaculture).

PHASE 1: PROJECT X (PERFORMANCE MEASUREMENT MODEL)

Impacts MeasuredBy...Short-TermOutcomes

1.1Ac&vityCluster1

1.2Ac&vityCluster2

1.1Short-termOutcome1


Thishasresultedfromoureffortandyourmoney




KPIsweremeasuredusingthismethod




Funderisbuyingthese

Measurablechangeisdefinedhere

Evidencethatoutcomewascausedbyproject

intervenHon

17

Oneof the challenges facedbyentities seekinga local labour force (e.g. asalreadyexperienceby theplantation forestry sector) is the lack of a sufficientlywork-ready labour pool fromwithin theWairoaDistrict. This has led the plantation forestry sector to recruit employees fromoutside this sub-region.Thisisindicativeofabroaderproblemthatanintegratederosioncontrolprogrammecouldhelpaddress:enhancinglocalemploymentandassociatedmultipliers.

3.3.1PlantationForestryCase-Study

ThereisacertainresistancetothecurrentmodelofplantationforestryamongasignificantproportionofthelocalpopulationintheWairoaDistrict,anditappearstorelatetothefollowingissues:

• Forestryisperceivedasanabsenteelandmanagementpracticethatremoveslandfromfarmingemploymentopportunities.

• Plantation forestry is seen locally as the main cause of waterways disruption throughdownstreammovementofforestryslash(logsandwoodydebris)ontolowlandareasincluding,farms,bridgesandbeaches.

• ForestrycurrentlyrecruitsmostofitslabourforcefromoutsideNorthernHawke’sBay.• Forestryisnotparticularlyvisibleinthelocalcommunityintermsofcommunityengagement.

Concurrently the plantation forest industry has an aging staff populationwith the average age in theharvesting segment of the industry of around 35-37 years and older for roading. The forest industryneeds future recruitment, not just as a function of demographics, but also because a large area ofplantationforestiscomingon-streamforharvestingincomingyears.

The experience of the plantation forest industry in seeking to employ local people from theWairoaDistrict is the lack of a labour force that is “work-ready” combinedwith a “work culture” that posesbarrierstoemploymentuptake.Anexampleofa“workculture”barrieronthedemandistheveryearlystart time for forestry workers (e.g. 6am). If the plantation forest industry wants to attract youngerworkers, itmayneedtoconsider laterdailystartand finishing times–especially fornewrecruits thathaveyettoexperiencethelifestylebenefitsofemployment.

Anexampleof a “work-readiness”barrieron the supply side is apotential labour force in theWairoaDistrictthatcurrentlylacksasuitableworkethicandwork-relatedhabits.Work-readinessamongstthisdemographic could be enhanced from the implementation of a work-readiness programme targetingsenior school students and school leavers. The purpose could be to build a work ethic, positiveworkplace habits, vocational training, and entrepreneurship skills to enable participation in theplantationforest,manukahoney,horticulture,andpestandweedcontrolsectors.

Such a work-readiness programme could potentially be co-financed by a public liability financingprogramme as mentioned below (3.4.3), combined with co-financing from the relevant employersectors, and government agencies such as the Ministry for the Environment, Ministry for SocialDevelopment,MinistryofEducation,MinistryforPrimaryIndustries,Hawke’sBayRegionalCouncil,andtheWairoaDistrictCouncil.


MPI and HBRC to consult with the plantation forest,manuka honey, horticulture, and environmentalmanagement sectors, the Ministry for Social Development, Ministry of Education, and the WairoaDistrict Council to develop aWairoa Social Forestry Programme that targets community engagement

18

througha)a“workreadiness”programmeforrecruitment intothesesectors,b)other industry-fundedcommunityengagementactionsarisingfromconsultationwithWairoaDistrictCouncil.

3.4 PLANTATION FORESTRY CONTROLS

3.4.1PhysicalGeographicContext

Duringcertainhighrainfallevents(andearthquakes)somelargerlandslidetypeswillhappenregardlessof thevegetationonthat land,andregardlessofhumanactivity.Here localisedsoil liquifactionoccursdown to bedrock and the slope fails, taking everything above with it. Such events will happen in aplantationforest,naturalforestoronpasture–theyhavebeenhappeningformanythousandsofyearsas evidencedby sedimentprofiles in thebedof LakeTutira. In the same rainfall events, smaller scaleerosioncanbelowerunderforestcoverthanunderpasturewhere(inthelatter)surfaceandrillerosionratescanbehigher.

Intheabsenceofextremerainfallevents,plantationforestryandpastoralagriculturebothcontributetosoil erosion but at different rates at different times. Suspended sediment in streams flowing throughpastoral farmland can be 4 times higher than in streams flowing through a well-managed plantationforest.Thishigherpastoralsedimentationratecontinuesannuallyfordecades.

Suspended sediment concentrations in streams flowing through plantation forest will spike duringactivities associated with harvesting (road building and harvesting) to around 3 times the rate ofsedimentationunderpastoralfarming.Butthisincreaseinthesedimentationrateinplantationslastsforthe2-3yearsoftheharvestwindow,afterwhichtimesedimentationratesreturntopre-harvest levelsandcorrespondinglyhigherwaterquality.

When high rainfall events coincide with timber harvesting, there is an increased risk of downstreammovementofforestryslash(logsandwoodydebris).Suchrainfalleventswillalsomovelogsandwoodydebrisfrompastorallandstreammargins.

Reducingstreamsedimentoverall,willbenefitfrom:

a. Afforestationoferosion-pronepastoralhillslopes.b. Plantationforestrymanagementpracticesthatreduceerosionriskassociatedwith:

i. Forestryroadengineeringincludingrivercrossings.ii. Retainingriparianmarginsofprotectedforestvegetation.iii. Theuseofbestpracticetimber-harvestingtechnologiesthatreducesoildisturbance.iv. Rapidreplantingfollowingharvesting.v. Catchment-based harvest planning to enable a significant proportion of a plantation

catchmenttoremainundervegetationatanyonetime.

These actionswill also reduce but not eliminate the risk of downstreammovement of forestry slash,whichposea significantpublic liability todownstreamproperty, infrastructure,andamenities. In fact,themovementofforestryslashwasakeyfactortriggeringthisOptionsPaper.

TheNationalEnvironmentalStandardforPlantationForestry(NES-PF)wasnotpubliclyavailableatthetimeofwritingandwilllikelyaddressseveral(ifnotall)oftheseissuesinonewayoranother.Thismakesitdifficult tomakerecommendationsthatwillnotbesupersededbytheNES-PF. Inparticular, it isnotyetclearhowforestryoperatorswillefficientlydemonstratecompliancetotheNES-PForwherelocallyspecificconditionscanbeimposedbytheHBRC.

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3.4.2FireControl

A warming climate is projected to bring more intense drought conditions to eastern New Zealandincreasingfirerisk intheplantationforestsector incomingrotations. Itwouldbeuseful toreviewfirecontrolplansintheplantationforestindustryandcomparewiththeNES-PFandexistingregulations.Iffire control infrastructure is inadequate there may be merit in exploring the potential foradding/requiring water reservoirs in plantation forestry catchments as a consent condition or as aconditionforforestrytooperateasapermittedactivity.Ifreservoirsareaddedtotheforestrylandscapetheremaybeopportunitiestodevelopkouraaquacultureinthesereservoirs.

3.4.3PublicLiability

Downstream movement of forestry slash in high rainfall events, represents a public liability risk todownstream property, infrastructure and amenities. This can be seen as a form of debris trespass todownstream property owners. A sustainable land management programme needs to include amechanismtofinancetherapidremovalofforestryslashfromdownstreamareasinawaythatdoesnotpose additional costs to ratepayers. Options for a financingmechanism for rapid removal of forestryslashfromdownstreampropertyinclude:

a. Forestrycompanyself-insurancethroughdemonstratedcashreserves,b. Requirement for forestry companies to hold public liability insurance with a commercial

insuranceprovider–potentiallyasasyndicate,orc. Requirement for forestry companies to participate in a public liability financing programme

operatedbyHawke’sBayRegionalCouncil.

Some larger forestry companieswillbemore likely toafford tocarry self-insurancecash reserves,butsome may not have factored this kind of cost into investment portfolio budgets. Smaller plantationoperatorsmaybeunable toafford sufficientcash reserves tocover thecostsofany singleevent (e.g.~$100,000), but could be required to contribute to either a public liability insurance policy with acommercial insuranceprovider,orapublic liability financingprogrammeoperatedbytheHawke’sBayRegionalCouncilorasubcontractedentity.

If considering a requirement for forestry companies to take out public liability insurance with acommercialinsuranceprovider(includingasasyndicate),itwouldbesensibletoscopeaproposalwithan insurance broker with international experience and capable of providing an international insurergiven the specialised insurance product required. Examples of New Zealand brokerswith this kind ofexperience include AON, Crombie Lockwood, Marsh, Willis, or Rothburys. The upside of commercialinsuranceprovidersisthattheywilladministertheinsuranceprogramme.Thedownsideisthattheywilllikely chargeup to30%commissionandpremiumdepositswill notbe available for reinvestment in asustainablelandmanagementprogramme.

ThisiswhereapublicliabilityfinancingprogrammecouldbeestablishedlocallyandoperatedperhapsbyHBRCorasubcontractedentity.ThiscouldtaketheformofaCrowngrantandanannualpremiumfromallforestrycompaniesatarateinproportiontotheirsize,andthefinancialscaleoftheriskburden.Thentherapidremovalofforestryslash(e.g.immediatelyfollowingaflood)becomestheresponsibilityoftheHBRCinpartnershipwithasuitablecontractor.Anadvantagewiththisapproachworthconsideringisthelackofupto30%commissionchargedbyaninsurancebrokerage,andanopportunitytouseinterestonpremiumstoco-financeanaspectofsocialforestry(e.g.aforestrywork-readinessprogrammeinschoolsandforschool leavers inWairoa).Forexample,adepositof$1million investedat3.36%willgenerate$37,000ininterestannuallythatcouldbeusedtoco-financeawork-readinessprogramme(seebelow).

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HBRCdevelop/refineregulationsrequiringforestryoperatorsinNorthernHawke’sBaytoberequiredtodemonstrate:

• Forestryroadandrivercrossingengineeringpracticesthatminimizesoilerosionrisk.• Harvestingandre-plantingdesignschedules(combinedwithroadplans)toenableasignificant

proportionoflargeplantationforestrycatchmentstobeunderforestcoveratanyonetime.Thedetails should be developed in close consultation with best practice players in the forestryindustry.

• Participationinpublicliabilityinsurance(orequivalent)programmeforrapidremovalofforestryslashfollowinghighrainfallevents.

HBRC to consult with the plantation forest industry in Hawke’s Bay to determine themost publicallybeneficialmodelforapublic liabilityfinancingprogrammeforrapidremovalofforestryslashfollowinghighrainfallevents.Optionsincludearequirementforplantationforestrycompaniestoa)self-insureforthisformofpublicliabilityrisk,b)takeonpublicliabilityinsuranceeitherindividuallyorasasub-regional(i.e.NorthernHawke’sBay) syndicate throughasuitable insurancebroker,orc) contribute toapublicliabilityfinancingprogrammeoperatedbytheHawke’sBayRegionalCouncilorsubcontractedentitythatgeneratesfinancingco-benefitsforsocialforestryintheWairoaDistrict.

3.5 HBRC POLICY REVIEW

Resourcemanagementbehaviour change canbeefficiently andeffectivelybroughtabout through theadministrationofacombinationof“carrotsandsticks”workinginunison.Thethreatoffutureregulationcanworktostimulatevoluntaryuptakeof incentivemechanismsonoffer,andwhenco-designedwithincentivemechanisms, can help tomake incentivemechanismsmore efficient and effective. This canhavetheneteffectofminimizingthenumberoflandowners/landmanagersfacedwithcommand-and-control measures. In turn, this reduces the electoral risk of strategic sustainable land managementprogrammes locally and nationally. The concept diagrams below (Figure 3.5) depict an overview ofstrategicoutcomessoughtfromasustainablelandmanagementprogramme.

Regulatory instruments available to central and local government would ideally be integrated into asustainable land management programme to maximise the synergy with incentive mechanisms. Thedetailsof such regulatory instrumentswould ideallybedeterminedduring thedesignphaseof apilotinitiative(seebelow).

Such regulatorymeasures could be based upon a requirement for Farm EnvironmentalManagementPlansforallpropertiesintheWairoaDistricttobecompletedbyacertaindeadline,andthenuseFarmEnvironmentalManagementplansasthebasisforrequiredretirementfromgrazingoflandsclassifiedas‘HighLandsliderisk–deliverytostreams’byacertaindate.Duringtheinterveningperiod(e.g.an8yearwindow) land managers will have an opportunity to voluntarily respond to incentive mechanisms tochangelandusetomoresustainableforms.

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Figure3.5.ConceptDiagramsdepictingthegoalandstrategyforsustainablelandmanagementand

waterqualityimprovementforNorthernHawke’sBay.


HBRCtoundertakeapolicyreviewofpotentialregulatorymeasuresavailablefor local implementationoftheNationalPolicyStatementonFreshwaterManagement2014combinedwithavoluntaryincentiveprogramme for strategic erosion control forNorthernHawke’s Bay. The purpose of such forthcomingregulation3istoa)sendabehaviourchangesignaltoprivatelandmanagerstorespondtoopportunitiestochangebehaviourthroughaccesstoincentivemechanismsduringaregulatoryholidaywindow,andb)

3E.g.comingintoforce8yearsafterlaunchingincentivemechanisms.

Sustainable Land Management Practices

Land

owne

r Po

pula

tion

Willing but not able (will respond to carrots and prospect of future sticks)

Low High

Land

owne

r Po

pula

tion

Our Goal

Sustainable Land Management PracticesLow High

Early movers (move without incentives)

Reserve regulatory sticks for these, after

rest of population demonstrates economic

viability of moving

Str

eam

Wat

er Q

ualit

y

Time

Cos

t of

ext

rem

e w

eath

er

even

ts

Our KPIs

Our Strategy

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to implement command-and-control measures after a regulatory holiday window to cause requiredbehaviourchangethathasnotyethappened(e.g.compulsoryretirementfromgrazingoflandsclassifiedas‘HighLandsliderisk–deliverytostreams’).

3.6 EROSION CONTROL AFFORESTATION SCHEME

AdirectfinancialincentivemechanismcouldbedevelopedforafforestationoflandintheWairoaDistrictclassifiedas“HighLandslideRisk–deliverytostream”.Thiscouldbedeveloped,testedinapilotproject(see Section 3.9 below) as a second-generation financing instrument for erosion control called theErosionControlAfforestationScheme(ECAS).TheECAScouldthenberefinedandrolledoutasanation-wide erosion control funding mechanism targeting high erosion-risk lands. The ECAS could have thefollowingattributes:

• A single purpose of incentivising new permanent forest establishment on erosion-prone land(ClassVIe,VIIe,VIIIe)andclassifiedbytheHawke’sBayRegionalCouncilas“HighLandslideRisk–deliverytostream”,withanationalcarbonco-benefit.

• Ring-fenceaportionoftheAfforestationGrantSchemeandcombinewitharing-fencedportionoftheEastCoastForestryProject(ECPF)fundingandallocatetoaspecialECASfundspecifictoanationally significant pilot project in theWhakaki catchment (see Section 3.9 below). ChangedisbursementrulesoftheAGStoovercometheexistingbarrierstouptakerelatingtocashflowriskof landowners in theWairoaDistrict.Currently theAGSsupplies fundsexpost inorder toreducenon-deliveryrisktotheCrown.ButthisreducesfundingaccessibilitytolandownersintheWairoaDistrict that tend to face cash flow challenges. The ECAS should have a performance-basedfundingmodeldesignedtokeepnon-deliveryrisklow,butshouldalsohavedisbursementrulesthat lowerthebartoaccess.Thiscouldbedelivered intheformofanexante(upfront)interest free loan that matures into a grant when the applicant provides evidence ofperformance.Moredetailsonthisarepresentedbelowunder‘ECASDesignFeatures’.

• The NZUs sourced from land registered in the ECAS (but only after a 5 year afforestationestablishmentwindow) would have a specific erosionmitigation andwater quality co-benefitvalueandcouldbemarketedaccordinglyintheETS(carbon+erosioncontrolvalue).

• HBRCandMPI could assign a suitable entity to play a “match-making” rolewith forestry landoffsetting, matching a party (potentially from another region) seeking land for afforestation(demand)withthesupplyoferosion-pronelandsintheWairoaDistrict.Bothdemandandsupplysidesofthis“market”couldapplytotheCrown(ordesignatedentity)foraccesstoeachotherthroughaspecialprovisionintheErosionControlAfforestationScheme.

• Land registered in the ECAS becomes ineligible for any future timber harvesting due to itserosion-prone status targeting land classified by the Hawke’s Bay Regional Council as “HighLandslideRisk–deliverytostream”.

• LandregisteredintheECASbecomeseligibleforadditionalfundingforfencingifretiredpastureforinclusionintheECASdoesnotcoincidewithexistingfencingboundaries.

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3.6.1ECASDesignFeatureRecommendations

TheECASshouldapplyto landcurrentlyclassifiedas ‘non-forest land’butwhichhashadplantationorindigenous forestprior to1990 (landsclassifiedunderArticle3.4of theKyotoProtocolorequivalent).This would avoid perversely excluding high priority erosion-prone land that happened to have beenclassified as “forest land” as of 31 December 1989. This particular land could remain ineligible forcrediting under the ETS (unless and until the Crown brings Kyoto Protocol Article 3.4 forestry (forestcarbonstockchangeonpre-1990forestland)intotheETScarbonaccountingboundary).

Includelandwithouta“sufficientnaturalseedsource”providedthelandistobeplantedinindigenoustrees (e.g. manuka). Include rules requiring manuka plantations to meet per hectare planting ratescompatiblewitherosioncontrolecosystemservicepriorities.Thisistoavoidmanukaplantationstakingadvantage of erosion control afforestation funding without providing the level of erosion controlrequiredtoreducestreamsedimentloadsinthetargetarea.

Includearequirementforapplicanttofurnishacovenant(e.g.a‘MemorandumofEncumbrance’)ontheland title preventing grazing for a 50-year period and requiring that the target land is fenced fromgrazing stock. AMemorandumof Encumbrance is a formofmortgage recognised under the PropertyLawAct2007andtheLandTransferAct1952andcanfunctionasan“administrativelylight”versionofacovenant. A covenant of this form will reduce non-delivery risk to the Crown on ECAS funding. The“Beneficiary”oftheMemorandumofEncumbrancecouldbetheMinisterforPrimaryIndustriesortheMinister for theEnvironment (orboth).Oneof theconditions in theMemorandumofEncumbrance isthatthelandownerrelinquishesanycarbonrightsduringyears1-5ofparticipationintheECASfundingcycle(reasongivenbelow).

An ECAS ReversionGrant of $2,000/ha could be awarded if the land is afforested by allowing retiredpasture to revertnaturally tonativewoodyvegetation.AnECASPlantingGrantof$2,500/hacouldbeawarded if afforested with indigenous plantings. An ECAS Fencing Grant could be awarded if retiredpasturedoesnotcoincidewithexistingfencelines,oriscontainedinthesamepaddockasasignificantareaofnon-erosion-pronepasturenecessaryforpastoralfarmingorhorticulture.

TheECASReversionGrantcouldbedisbursedintwoinstalmentswiththefollowingdetails:

Instalment 1: 70% of the total grant (i.e. $1,400/ha) disbursed as an interest-free loan uponregistrationofthelandwiththeECASandexecutionoftheMemorandumofEncumbrance.Thepurposeof Instalment1 is toco-financepestandweedcontrolon the retiredpasture for twoyearsfollowingpastureretirement.

Instalment2:30%ofthetotalgrant(i.e.$600/ha)disbursedasaninterestfreeloantwoyearsafterexecutionoftheMemorandumofEncumbrance,andaftertheapplicanthassubmittedthefirst Pest andWeedControlReport. The first Pest andWeedControlReportneeds toprovideevidence that pest and weed control activities have been undertaken, and evidence of theoutcomeofthoseactivitiesforafulltwoyearperiodfollowingexecutionoftheMemorandumofEncumbrance.Thistwo-yearperiodisthefirstPestandWeedControlPeriod.

LoanBecomesGrant:TheapplicantsubmitsthesecondPestandWeedControlReportprovidingevidenceofpestandweedcontrolactivityandevidenceoftheoutcomeofthoseactivitiesforafulltwo-yearperiodfollowingthefirstPestandWeedControlperiod.Thistwo-yearperiodisthesecondPestandWeedControlPeriod.

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ApprovalofthesecondPestandWeedControlReporttriggersthetransformationoftheinterestfreeloanof$2,000/haintoagrant.

Theendof thesecondPestandWeedControlPeriodmarks thebeginningofeligibility for theAfforestation Area to be registered under the ETS. Applicants can then issue NZUs, the firstvintageofwhichcorresponds to the firstyear following theendof thesecondPestandWeedControlPeriod.

The ECAS Planting Grant of $2,500/ha could be disbursed in three instalments. Instalments 1 & 2comprise a Forest Establishment Loan (80% of the total grant); Instalment 3 targets Pest andWeedControl(20%ofthetotalgrant).Disbursementscouldbemadewiththefollowingpossibledetails:

Instalment1:Performance-basedinterest-freeloanof70%oftheForestEstablishmentLoan(i.e.70% of $2,000/ha = $1,400/ha) after registration with the ECAS and execution of theMemorandum of Encumbrance. This loan becomes a grant when the recipient completes allthreestagesofthegrantcycle,butremainsaloanifthethreestagesarenotcompleted.Thefirstinstalmentisanexante(upfront)paymenttoprovidecashflowtoenablelandownerstogettheplantingdoneatminimaladditionalcashflowrisk.

Instalment 2: The landowner completes the planting activity and prepares a ForestEstablishment Report containing a) the start and end date of planting activity (ForestEstablishmentPeriod),andevidencethattheplantingshavebeencompletedasspecifiedintheoriginal grantapplication. Failure to submita ForestEstablishmentReportwithin twoyearsofreceivingtheForestEstablishmentLoantriggerstheCrowntoexecuteloanrecoveryproceedingsand issue penalties if penalties are included in funding conditions. The Forest EstablishmentReport contains evidence of the number of hectares actually planted. On acceptance of theForestEstablishmentReportthestatusofthefirstinstalmentshiftsfromaloantoagrant,andtheapplicantreceivesInstalment2–i.e.30%ofthe$2,000/ha(i.e.$600/ha)asaninterest-freeloan.

Instalment 3: Once the applicant has become fully registered in the ECAS (i.e. fulfilled therequirements of Instalments 1 & 2), they become eligible for Instalment 3 in the form of aninterest-free loan of $500/ha for Pest andWeed control. A “Pest andWeed Control SupportPeriod”offouryearsisdefinedaftertheForestEstablishmentPeriod.AfterthePestandWeedControl Support Period has ended, the applicant submits a Pest and Weed Control Report,providing evidence of pest andweed control activity and theoutcomes of that activity in theAfforestationArea.UponapprovalofthePestandWeedControlReportthestatusoftheentireinterest free loan of $2,500/ha changes to a grant and the applicant receives a VerificationReportstatingthatallobligationsundertheECASgranthavebeenfulfilled.

TheendofthePestandWeedControlSupportPeriodmarksthebeginningofeligibilityfortheAfforestation Area to be registered under the ETS. Once registered under the ETS ECASregistrantscouldbecomeeligibletobeissuedNZUs,thefirstvintageofwhichcorrespondstothefirstyearfollowingtheendofthePestandWeedControlSupportPeriod.

Non-performance risk could be addressed by litigation against the Memorandum ofEncumbranceandappropriatepenaltiesfornon-delivery.

TheECASFencingGrantcouldbeawardedonacase-by-casebasisatarateyettobedetermined.

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EstablishapilotErosionControlAfforestationScheme(ECAS)initiallylimitedtotheWhakakiCatchment,to test and refine an incentivemechanism for the retirement and afforestation of lands classified as“HighLandslideRisk–deliverytostream”.FinancetheECASbyestablishingaring-fencedportionoftheAfforestation Grant Scheme, combined with a ring-fenced portion of the East Coast Forestry Project(ECPF)fundingandallocatetoaspecialECASFund.TheECASFundtobejustified(i.e.defendedagainstcriticism from other regions) on the basis of a) the special (long running) erosion and water qualitydegradation circumstances in theWairoaDistrict in general and theWhakaki catchment in particular,andb)theneedforapilotprojecttotestthisparticular fundingmechanismwithouthavingtochangetheentireAGSandtheECFP,andc)wheretheoutcomeofthispilotprojectcouldleadtoredesigningtheAGSandECFPinawaythatcouldbenefitotherregions.TheECAStoadoptdisbursementrulesspecifiedin Section 3.6 of this Options Paper. If proven effective, the ECAS could be scaled up to target higherosionrisklandsacrossawiderareainHawke’sBayandpotentiallynation-wide.

3.7 COMPLEMENTARY MEASURES

In practical terms, direct land use change on high-risk land classes will be more enabled whenundertakeninconjunctionwithcomplementarymeasurestohelpaddressopportunitycostsand(realorperceived)riskstofarmcashflows.Suchcomplementarymeasurescan includeinnovativeactivitiesonlower-erosion-risk land classes that add value and cash flow to the farm business, and enhanceopportunitiesforlocaleconomicgrowth.Complementaryactivitiespotentiallyinclude:

• Conversionoflowlandpastoralfarmland(flats)tointensivehorticulturallandusessuchasoliveoil,avocadooil,andcitrus(e.g.lime)production.

• Sheepdairying(forinfantformula)onlowriskhillcountrypasture.• Manukahoneyprocessinginfrastructuresupport.• EmissionsTradingSchemedesignthatsupportsafforestationoferosion-pronepasture.• Integrationofplantationforestrycatchmentfirecontrolwaterreservoirswithkoura(freshwater

crayfish)aquacultureforexport(relevanttoplantationforestindustryratherthanfarmers).• EelproductioncoastalwetlandareaslikeWhakakilagoon.

Suchactivitiescanbejustifiedunderaframeworkofstimulatingruraleconomicgrowthinasub-regionthatsuffersfromloweconomicperformanceandrelatedsocialindicators.Thereisalsopotentialtolinkeconomic growth stimuluswith erosion control if offered as a combined package,where eligibility toaccess support for new industries and enhancement of existing farming practices (including beef andlamb production) is linked to erosion control performance under a Rural Productivity InnovationProgramme.

For example, each of the potential rural growth sectorsmentioned above, and the existing beef andlamb sectorwouldbenefit from some level of Crown support to stimulateuptakeon the supply side,facilitate access to markets on the demand side, and provide support for strategic infrastructure toenableeachtorealisetheirfullpotential.Intheoliveoil,avocadooil,andlimesectorsthereisplentyofdemandbutcurrentproblemswithsupply.Favourablesupplycontractswillboostthelevelofoperationand potentially add considerable value to flat land in the region. With sheep dairy there is a bigopportunity to access value added export nichemarkets that have significant growth potential, but itrequires processing plant investment that would benefit from keystone investment from the Crown.Withbeef and lamb there areopportunities tomigratemost if not all farms in theWairoaDistrict to

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industrybestpracticeforsustainabilityandmaximisingreturnsperuniteffortwiththeaidofappropriateenhancedadviceandsupport.

Iwihaveshownstrongsupport forkourafarming in forestry firecontroldams intheSouth Island,andthesamecouldbetrueforNorthernHawke’sBay.ProvidingsupportforHawke’sBayIwitolearnfromIwiexperiencesintheSouthIslandandpotentiallyformalargersupplypartnershipmayhelptoprovideabettersecurityofsupplyarrangementtosatisfyexportbuyersinChina.

3.7.1ManukaHoney

The ErosionControlAfforestation Schemeas described above could function as the co-financing seedcapitalcoveringtheestablishmentcostsofcarbonandmanukahoneyproductiononerosioncontrolledlandthatisretiredfrombeefandlambproduction.Theestablishmentperiodofafforestationinmanukaforexample,wouldhaveaccesstoatotalof$2,500/haduringmanukaestablishment,andthenaccesstoannual carbon andmanuka production that in aggregate can potentially compete with a baseline ofbeef/lambproductiononthesamelands.

Table 3.7.1 provides an indication of the comparative annual per hectare revenue potential under anECASapproach.

Table3.7.1.Approximatecomparativeeconomicproductivityofmanukahoney+carbon incomparison

withbeefandlambonsteeplands.

Activity Detail ~$/ha/yr yrForestEstablishment Years1-5@$2,500/ha $500 1-5Carbon* NorthandSouth-facingslopes $100 6+Carbon+Manuka** North-facingslopes $400 6+Beef/Lamb*** North&Southfacingslopes $250-$350 Baseline

*Basedonassumptionof6tCO2e/ha/yrexcludingadministrativecosts.**Estimatebasedonacombinationofyield,UMF,%ofrevenuetofarmer,andcarbon.***EstimatebasedonEBITRusingdatafromtheBeef&Lamb.

Figure3.7.1Beefandlambproductivityperhafor‘HardHillCountryEastCoast’–Source:Beef+Lamb

NZ.EBITR=Earningsbeforeinterest,taxandrents;GFR=GrossFarmRevenue.

Beef + Lamb New Zealand Economic Service: Sheep and Beef Farm Survey AnalysisBased on 2013-14 Survey, Class 3 N.I. Hard Hill Country East CoastQuintile Analysis Ranked by EBITR per hectare

0 100 200 300 400 500

Q1 low 2013-14

Q2 2013-14

Q3 2013-14

Q4 2013-14

Q5 high 2013-14

Mean 2013-14

Prov. 2014-15

Forecast 2015-16

EBITR $/ha

-100 0 100 200 300 400

EFS $/ha

70 80 90 100 110 120 130

Q1 low 2013-14

Q2 2013-14

Q3 2013-14

Q4 2013-14

Q5 high 2013-14

Mean 2013-14

Prov. 2014-15

Forecast 2015-16

Lambing %

3 4 5 6 7 8 9 10

Stocking Rate SU/ha

0 200 400 600 800 1,000

GFR $/ha

0 20 40 60 80 100

Q1 low 2013-14

Q2 2013-14

Q3 2013-14

Q4 2013-14

Q5 high 2013-14

Mean 2013-14

Prov. 2014-15

Forecast 2015-16

Fertiliser (on ground) $/ha

0 20 40 60 80

R&M $/ha

0 50 100 150

Interest $/ha

0 200 400 600

Total Expenditure $/ha

0 50 100 150

Total Meat Production kg/ha

Sheep Beef Deer

P

P

P

P

P

P

P

P

0 20 40 60 80 100

Sales All Lamb Prime [P] v Store %

50 70 90 110

Q1 low 2013-14

Q2 2013-14

Q3 2013-14

Q4 2013-14

Q5 high 2013-14

Mean 2013-14

Prov. 2014-15

Forecast 2015-16

Sales All Lambs $/head

0 500 1,000 1,500 2,000

Q1 low 2013-14

Q2 2013-14

Q3 2013-14

Q4 2013-14

Q5 high 2013-14

Mean 2013-14

Prov. 2014-15

Forecast 2015-16

Term Liabilities $/ha

-1 0 1 2 3 4 5 6

RoR on TFC at open %

0 20 40 60 80 100

Equity at close %

© B+LNZ Economic Service | P16007

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Themanukahoney industryalsohassignificantpotential forgrowth.TheECASproposedabovewouldstimulate supply, but for this industry to grow to its potential and sustain cash flow benefits tolandowners,thereisaneedforinvestmentininfrastructuretostrategicallyunlockopportunitiesonthedemand side. One example is the need for a high quality toll processing plant to open the industry,wheremanydifferentsupplierscaneitherselltotheprocessororon-sellprocessedproducttoarangeofpotential demand channels. Crown investment on the supply side through an ECAS withoutcomplementaryinvestmentontheprocessinganddemandsidewouldriskanover-supplysituationandallof theassociatedproblems.TheCrowncouldactasakeystone investor tostimulateprivatesectorinvestmentinahighqualitytollprocessingplantintheHawke’sBayregion(e.g.Hastings).

3.7.2CarbonMarket

The Crown is currently reviewing the New Zealand Emissions Trading Scheme, and now has theopportunity to redesign it to create conditions that are favourable to private sector investment inerosion control. Such investment can take the form of buyers in the carbonmarket seeking to alignthemselveswitherosioncontrol,andprivateinvestorsseekingtosupportthescale-upoferosioncontrolactivitieswhen combinedwith complementary production such asmanukahoney. The ideal outcomefromanerosion controlperspective is anEmissionsTradingScheme thatgenerates sufficientdemandandpricestabilityatalevelsufficienttostimulatewide-scaleafforestationoferosion-pronelands.Thiswouldalso serve toassist theCrown inaccessinga sufficientdomestic supply volumeof carbonunitsrequired for intergovernmental emissions trading obligations in the current and forthcomingcommitment period/s. The benefits of afforestation to the New Zealand net position in itsintergovernmental commitments would complement the sustainable land management benefits of awell-functioning ETS. In this way, the NZETS could deliver substantial water quality co-benefits andprovideanenablinginfrastructureforlocalgovernmenttomoreefficientlydeliveroutcomesconsistentwiththeNationalPolicyStatementforFreshwaterManagement.


RuralProductivityInnovationProgramme

Establishaconsultationprocesswithbeef&lambfarmersintheWairoaDistrict,BusinessHawke’sBay,iwi,manukahoneyoperators, horticultural operators, sheepdairyoperators,MPI, andHBRC to scopeout realistic support that the Crown and HBRC could provide in a Rural Productivity InnovationProgramme. Such a programme could function through a) Crown keystone investment in enablinginfrastructuretostimulateprivatesectorinvestment,andb)advisorysupport(fromHBRC,MPI,BusinessHawke’s Bay and other suitable agencies) for farmers seeking to transition tomore sustainable farmproductivity innovations. Scoping the form of advisory support could be undertaken by means of aWairoa District Sustainable Farming Innovation Workshop to bring together stakeholders in pastoralfarming,manukahoney,horticulture,sheepdairyoperators,sustainablefarming,andiwi.

Access to advisory support could be reserved for farmerswho have already participated in the ECASbeyondacertaintriggerpoint(e.g.executedaMemorandumofEncumbranceonretiredpasture).Suchfarmers could then become eligible for government support in the Rural Productivity InnovationProgrammeonaperformance-basisandasacomplementarymeasuretotheerosioncontroleffortstheyhave already undertaken and as a reward for moving in a desirable strategic direction. The RuralProductivity Innovation Programme could provide advice to farmers seeking to transition to moresustainablefarmingpracticesincludingotherproductiontypes(e.g.movingfrombeeftosheepdairying)and/ormoresustainableapproachestoexistingproduction.Thepointistorewardgoodbehaviourina

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waythatreducestransitionrisk for theparticipating farmerandcreatessustainable landmanagementfarmbusiness success stories.Anadditional condition forgainingaccess togovernment support couldincludethefarmeragreeingtoeventuallyparticipateinmentoringotherfarmersthatarenewentrantstothesesupportprogrammes.

CarbonMarket

HBRC,andtheWairoaDistrictCouncilmakeajointrecommendationtotheMinisterforClimateChangeonhowthenextversionof theNewZealandEmissionsTradingSchemecould functionasaneffectivesupporting infrastructure for erosion control. These entities could recommend that mechanisms beinvestigated to ensure that the carbon price for targeted erosion control afforestation is sufficient tostimulatesuchafforestation(e.g.$20-$25/tCO2e in thenear term).Thiscould includeanunderwritingmechanismforafforestationactivitiesundertheECAS.

3.8 SUSTAINABLE FARMING

Farmlanderosioncontrol,riparianplantings,moresustainablepasturemanagementpractices,andstockexclusionfromstreamswillmakeacontributiontowaterqualitybyreducingstreamsedimentloads.Butthese actions are not sufficient to reduce stream nutrient levels necessary for water qualityimprovement.Solublefertilizerapplicationsontopasturecanbeasignificantsourceofincreasedstreamnutrientlevelsthatcandegradewaterquality.Forthisreason,reducingthevolumeofsolublefertilizerdischarge into streams is an important part of the equation for reversing chemical degradation ofwaterways.

Sustainable farming practices have received much attention in recent decades with research anddevelopmentoffarmingpracticesthatreducedetrimentalimpactontheenvironment(includingstreamwaterquality).ItwouldbeusefultocapitalizeonsuchresearchanddevelopmentbymeansofaWairoaSustainable Farming Programme. This could include a desktop review the available science andeconomicsoftherangeofsustainablefarmingpracticesinNewZealandtoidentifydifferentoptionsforsupporting an upgrade of existing farming types (e.g. beef and lamb production) to lower theirenvironmental impact. The results of such a review could then be presented at aWairoa SustainableFarming InnovationWorkshop thatbrings together local farmersand iwigroups, farmersand industryleadershipgroupsfromaroundthecountrywithexperienceinsustainablefarming,sustainablefarmingscientistsandeconomists,andorganisationssupportingsustainablefarming,MPI,HBRC,andMFE.Thepurpose of the workshop could be to identify ways to support local farmers in a transition to moresustainablefarmingpractices,toidentifyrealandperceivedrisksofsuchtransitionsandwaystomitigatetheserisks.

3.8.1RecommendedNear-TermActions

HBRC to fund a Wairoa District Sustainable Farming Programme that includes a desktop review ofsustainable farming science and economics, and a multi-stakeholder Wairoa Sustainable FarmingInnovation Workshop to identify ways to support local farmers in a transition to more sustainablefarmingpractices.

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3.9 WHAKAKI ECOLOGICAL INFRASTRUCTURE PROJECT

This Options Paper recommends an integrated approach to erosion control and water quality in theWairoa District. Preserving the integrity (and internal synergies) of an integrated approach can beenabled whilst reducing financial risk to funding agencies by reducing the scale of activity to a pilotprojectinadefinedgeographicallocation.

Consultationswith local stakeholders includingHawke’s Bay Regional Council,WairoaDistrict Council,and localMāorihavesettledupontheWhakakiCatchmentasasuitablepilotprojectarea.ThereasonWhakaki presents an ideal opportunity for a geographically defined pilot project relates to it being arelativelysmallcatchmentwitharelativelysmallnumberoflandowners,supportingplantationforestryandpastoralfarming,locatedincloseproximitytoStateHighway2,andwithalargelagoonareainmuchneedofwaterquality improvement. ThiscatchmenthasalsobenefitedfrompreviousworkundertheSLMHCE Project –Wairoa Sediment Reduction Initiative and Catchment Facilitation Programme. Thispilot project area is also located relatively close to theWhangawehi Catchment project on theMahiaPeninsulafromwhichvaluablelessonscanbelearned.

Figure3.9a.WhakakiCatchmentlocation.

Wairoa

Gisborne

Mahia

Whakaki Catchment

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Figure3.9b.WhakakiCatchmentlanduse.

The“WhakakiEcological InfrastructureProject” couldapplyall componentsofan integratedapproach(outlinedinthisreport)tothisareainanintensive“test-drive”ofthesetools.Thereasontofocusonthelanguage of ‘ecological infrastructure’ is to get this concept onto the regional policy and economicdevelopment radar, and use it as a lens for viewing sustainable land management as a strategicmechanismforruraleconomicgrowthandhumanwellbeing.Thiskindofframeworkmakesiteasiertohighlight the linkages between a) beneficial ecosystem services (delivered by ecological infrastructuresuch as indigenous vegetation on erosion-prone land) and b) economic performance and humanwellbeing. It also provides a logical framework for pricing the value of ecological infrastructureinvestment(e.g.publiclyfundedincentivesforafforestation).Thiscanbedonebycalculatingthecoststothe economy of not investing in such infrastructure (e.g. the cost/risk/exposure to extreme weatherevents),andcomparingthiswiththenetcostofmitigationactions.

Plantation Forestry

Steep Farmland

Whakaki Lagoon

Farm Flats

Coastline

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AsidefromtheChristchurchearthquake,NewZealand’smostexpensivecivilcalamitieshavetendedtobeandwilllikelycontinuetobefloodevents.Pricingthebenefitsofreducingtheimpactoffuturefloodsisonecomponentofpricingthebenefitofecologicalinfrastructureinvestmentcapableofreducingflooddamage (e.g. reducing hill slope and streamside erosion and forestry slash risk). In turn, this helps todetermineanefficientscaleofecological infrastructureinvestment,particularlywhentheformofsuchinvestmentgeneratesco-benefitssuchaspositivenear-termcashflows(e.g.carbonandmanukahoneyturnover), anda strategic realignmentof the rural economy towardsamoredurablemodel given thephysicalenvironmentitmustoperatewithin.

Notealsothatclimateprojectionssignalalikelyincreaseintheintensityofdroughtsandstormeventsincomingdecades.Buildingresiliencetotheseriskscanbeseenasaprudentinvestmentbyconservativeplanners.Future-proofinglandscapeinfrastructureforenduringeconomicprosperityinthefaceofglobalchallenges,canalsohavegreaterelectoralappealbothlocallyandnationallycomparedwithanarrativeof “looking after nature”.Under this approach, nature also gets “looked after,” but delivering humanwellbeing is thepoliticallyandeconomicallyenabling framework.Thisapproach isalso in linewiththeMillenniumEcosystemAssessment, the Economics of Ecosystems andBiodiversity (TEEB), and theUNSustainableDevelopmentGoals.

3.9.1AMulti-StakeholderApproach

TheWhakaki Ecological Infrastructure Project could be used to design, test and refine the combinedefficiencyofthefollowing:

• Direct financial incentives in the form of an Erosion Control Afforestation Scheme, that couldthereafterbescaledup.

• TheexistingNZETS(withthehopethattheCrownprotectsthecarbonpricetoenablecarbontobearealisticcash-flowpropositionforerosioncontrolactivities).

• Indirect complementary measures (e.g. to support sustainable beef and lamb farming, themanukahoney,sheepdairy,oliveoil,avocadooilandlimehorticulturesectors).

• Allocatingkeyresponsibilitiestoanupgradedcatchmentgroupmodel.• Stronger plantation forest industry performance rules as a best practicedemonstrationof the

NationalEnvironmentalStandardforPlantationForestry(includingpublicliabilitymeasures).• Measurement, reporting and verification of key performance indicators for catchment water

quality to test the efficacy of interventions. This should involve quantitatively comparingbaseline (before intervention)waterqualityKPIs (e.g. streamsedimentandphosphorusyields)withproject(afterintervention)KPIs.

• Usethiscatchmentasatraininglocationfora“work-readiness”programme.• Close collaboration overall and in certain areas co-management with iwi, non-Maori private

landowners,theplantationforestryindustry,localgovernment,andcommunityorganisations.

TheWakakiEcologicalInfrastructureProjectcouldbedesignedandimplementedbymeansofastaged,multi-stakeholder consultation process led by a facilitation team with HBRC functioning as thesecretariat.Thiscouldberolledoutthroughstagessimilartothefollowing:

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Event Purpose Strategy TimingProjectSigning Symbolicpartnershipannouncementto

raiseawarenessinthewidercommunityandreceiveinitialstakeholderfeedback

Highprofileeventwithkeypartnerstakeholdersandthepublic.

Q42016

Multi-stakeholderProjectDesignWorkshop

Determineprojectdesignfeatures PresentationofaProjectDesignFrameworkpreparedprior.Breakoutgroupconsultationtorefinekeycomponents.Result:multi-stakeholdermandate&rawmaterialforfinalProjectDesign.

Q12017

ProjectLaunch Showcasefinaldesignandlaunchimplementationactions

PresentationofFinalProjectDesignandassignrolesandresponsibilities(allpreparedprior).

Q22017

6-monthlyProjectReportingWorkshops

Projectmilestonereporting,highlightinglessonslearned,results,andanymodificationsforfollowingperiod

Keeptheprojectstakeholdersinteractingregularlyandsharingexperience.Provideacontextformonitoringresultstobepresented,andadaptivemanagementtobeapplied.

Q42017Q22018Q42018Q22019Q42019

3.9.2Measurement,ReportingandVerification(MRV)

Theeffectivenessofstrategic interventions insustainable landmanagementcanonlybeunequivocallyestablished if such interventions directly and indirectly cause/enable outcomes that are real,measurable, and additional (i.e. would not have happened anyway). Measurement, reporting andverification(MRV)ofkeyperformanceindicatorsarecentraltothedemonstrationofthevalueofsuchinterventions and associated investments. This safeguards against inefficient investment in poorlytargetedactionsandcanhelpdisciplinethedesignandimplementationof interventions.MRVcanalsoenable adaptive management by helping to identify interventions that make the largest measurabledifferenceatleastcost.

It is recommended that the Whakaki Ecological Infrastructure Project include the development andrefinement of an MRV system that is compatible with and complementary to the National PolicyStatementforFreshWaterManagement,theNationalEnvironmentalStandardforPlantationForestry,andexistingmonitoringregimesundertakenbylocalgovernmentandotherresearchagencies.

3.9.3EvaluatingEcologicalInfrastructureInvestment

AnEcological Infrastructure investment lensprovidesaconceptual framework forbenefit-costanalysisthattakesintoaccountthestrategiceconomiccontributionofsuchinvestmentagainstfactorssuchasa)avoidedfuturecostofextremeweatherevents,andb)engineeringinvestmentsrequiredtoprovidetheequivalenteventmitigationservices.Suchanalysiscanprovidevaluableinformationforpolicy,business,andprivatesectorinvestmentstakeholderswithinandbeyondthebordersofapilotproject.

It isrecommendedthattheWhakakiEcological InfrastructureProject includeaninvestmentanalysisofpilot project interventions applying an ‘Ecological Infrastructure Investment’ and ‘The Economics ofEcosystemsandBiodiversity’ (TEEB) lens.Suchananalysis shouldbestructured tomaximize relevanceforlocal,regional,andnationalpolicyonsustainablelandmanagement.

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MPI andHBRC to fund the establishment of theWhakaki Ecological Infrastructure Project. This couldinvolvefundingthedevelopmentofaProjectDesignFrameworkforpresentationataMulti-StakeholderProject Design Workshop. MPI and HBRC to also fund the subsequent development of Final ProjectDesignforpresentationofanMPI-fundedProjectLaunchevent.TheFinalProjectDesignwouldcontainabudget and funding requirements fromdifferent funding sources, including co-financingbya rangeofgovernmententitiesandtheprivatesector.

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Appendices

APPENDIX 1. CONSULTATION RECORD

ThoseconsultedduringthepreparationofthisOptionsPaperincludethefollowing:

Name OrganisationJamesPalmer Hawke’sBayRegionalCouncilJamesPowrie Hawke’sBayRegionalCouncilNathanHeath Hawke’sBayRegionalCouncilBrendanPowell Hawke’sBayRegionalCouncilBarryLynch Hawke’sBayRegionalCouncilCraigLittle WairoaDistrictCouncil(Mayor)JamieCox WairoaDistrictCouncilHelenMontgomery WairoaDistrictCouncilAllenSmith WaiConsultantsChristineSmith WaiConsultantsKatarinaKawana WaiConsultantsBrettGilmore PanPacKeithDolman HawkesBayForestryGroupNickCaviale-Delzescaux WhangawehiCatchmentManagementGroupOliverHendrickson MinistryforPrimaryIndustriesKevinSteel MinistryforPrimaryIndustriesElizabethHeeg MinistryforPrimaryIndustriesRebeccaLyon MinistryforPrimaryIndustriesGillianMangin MinistryforPrimaryIndustriesAnnetteCarey MinistryforPrimaryIndustriesPeterLough MinistryforPrimaryIndustriesMayaHunt MinistryforPrimaryIndustriesTimGrafton InsuranceCouncilofNewZealandKayHarrison MinistryfortheEnvironmentCatherineRusby BusinessHawke’sBayRichardBarley MelitaHoneyAllanMcPherson ManukaFarmingNZ

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APPENDIX 2. KEY STAKEHOLDERS

KeystakeholdersforasustainablelandmanagementprogrammeinNorthernHawke’sBaycouldincludebutnotbelimitedtothefollowing:

• Farmers• Iwi• PlantationForestryIndustry• ManukaHoneyIndustry• CatchmentGroups• Horticulturalists• MPI• WairoaDistrictCouncil

• Hawke’sBayRegionalCouncil• MFE• LandcareResearch• Scion• BusinessHawke’sBay• NZLandcareTrust• Beef+LambNZ

northern hawke’s bay sustainable land management strategy · northern hawke’s bay sustainable...

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