Key Points:

New Zealand's increasing water pollution has been criticised in an international report.

The OECD Environmental Performance Review of New Zealand said better protection of surface and ground waters was needed because pollution was affecting rivers, streams and lakes. Irrigation was also taking a toll.

It said regulations on water quality or economic measures would avoid problems.

Environment Minister David Benson-Pope said last month that the Government was very clear that water was a public resource which the Government and local authorities continued to manage on behalf of all New Zealanders.

The Government had no intention of privatising water, or establishing water markets for trading water rights.

The report said climate protection policy needed to be strengthened. It criticised the dropping on carbon tax plans in 2005 -- a decision Labour made because of political opposition.

The report said the decision had impacted on New Zealand's ability to meet its Kyoto target. The report also recommended other measures like emission trading.

Another area of concern was waste management and the report said landfills should charge the full cost of disposing of waste and systematic tracking and treatment of hazardous waste was needed.

National environmental reporting needed to be better and coordination of regional level monitoring was needed so the national situation was known and so goals could be set.

New Zealand was praised for its low level of environmentally harmful subsidies, improved drinking water quality, improved balance of environmental and social concerns through the Resource Management Act and expanded protected areas.

At a press conference on the report, OECD official Lorents Lorentsen said voluntary accords on water were good but more "teeth" were needed.

He also said there were few incentives to reduce carbon and the agricultural and other sectors such as electricity production needed "greening".

Regulations were needed to reduce pesticides and fertilisers in waterways.

Mr Lorentsen hoped the Government would follow the report's 38 recommendations.

"It's now up to you and your colleagues Minister to improve."

Mr Benson-Pope said the report was timely and many of the recommendations were already under way.

"The review is very encouraging but Government acknowledges that much more needs to be done before we can lay claim to being the first country to be sustainable across the four pillars of environment, economy, society and nationhood."

He said the Government was focusing on reducing greenhouse gas emissions, improving recycling and cutting waste and strengthening monitoring. A state of the environment report was to be released later in the year.