Environment Minister Nick Smith has been asked by the Canterbury regional council if he wants to call in the resource consents for factory dairy farming operations in the Mackenzie Basin.
Call-ins enable central government to make a decision, bypassing some potentially lengthy passages through council hearings and the lengthy Environment Court.
The council's chief executive, Bryan Jenkins, told Smith on December 23 that commissioners are hearing resource consents for three corporate dairy farm operations involving up to 8,000 hectares of land housing 17,000 cows, and there had been claims such consents would hurt New Zealand's reputation as a source of pastoral free-range dairy products.
Jenkins said there had been separate media debate about factory farming with Agriculture Minister David Carter warning publicity over alleged cruelty on a big chain of farms could harm overseas perceptions of meat and milk exports.
The council has received more than 3,000 submissions from around the world on two of the companies' consent applications to store and discharge effluent, excavate land and discharge contaminants to air, and a sample of the submissions indicated 75% of them raised animal welfare issues.
But Labour MP Brendon Burns, who is his party's spokesman on water, said on Thursday that the regional council has been given legal advice that animal welfare issues are not an "effect" of dairy farming, and cannot be included in consideration, and nor could they provide the basis for a ministerial call-in of the applications.
"Dr Jenkins says there is a stronger argument for considering the detrimental effect on New Zealand's image abroad from factory farming, but it is unlikely a regional council could place significant weight on this issue," Burns said.
"He has asked Dr Smith if he is considering a call-in under Section 142 of the Resource Management Act, which allows Smith to use the powers if a resource consent is causing widespread public concern about likely impacts on the environment".
The potential harm the massive dairy operations could do was not limited to the Mackenzie Basin and its pristine lakes and rivers, Burns said. Fonterra, the tourism industry, scientists, politicians across both major and some minor parties, have all expressed fears about impacts on water quality, on animals and on New Zealand's reputation as a tourism destination and pasture-fed exporter.
The government will need to make decisions on two call-ins by January 15 and on a third a week later.
Three companies - Southdown Holdings, Five Rivers and Williamson Holdings - want to build 16 dairy farms where cows would live in "cubicle" stables most of the time.
The Green Party has said the plan would tarnish New Zealand's environmental reputation, and Prime Minister John Key late last year told parliament that the government had sought urgent advice on factory dairy farming.
Under the plans, cows will be kept indoors 24 hours a day from March to October, and allowed outside for 12 hours a day from November to February.
Jenkins said legal advice was that animal welfare was more appropriately addressed under the Animal Welfare Act but the potential impact on the country's overseas image could fall within the definition of "effect" in the Resource Management Act.
Landcare research ecologist Susan Walker, of Dunedin, told the Upper Waitaki River Catchment hearings into water use more damage had been done to Mackenzie Basin ecosystems than anywhere else in the country.
About 35,200 hectares of the basin's 301,000ha had been converted for urban, forestry, irrigation, oversowing and topdressing purposes since 1990.
"This recent conversion probably represents the most rapid rate of indigenous ecosystem loss and landscape transformation within any single ecological region in New Zealand in recent times".