Naturally Resourceful

11 Feb 2009

Further information about the proposed reform of the Resource Management Act 1991 was released by the Government last week. While the proposals that will be in the Resource Management Act (Simplify and Streamline) Amendment Bill 2009 are summarised, the detail will not be known until the Bill is released in late-February. 

In the interim, the proposals have been greeted with almost universal support from business and by concern from environmental groups. We will outline some of the key proposals and comment on their merits and issues that may arise. 

Deterring non-meritorious objections and appeals 

Proposal: Deterring frivolous, vexatious and anti-competitive objections and appeals by reinstating of the Environment Court's ability to award security for costs and increasing the filing fees for the lodgement of appeals to the Environment Court to $500 (from $55). There is also a proposal to broaden the ability of Councils to dispense with full public notification.

Comment: These measures are desirable and should discourage unmeritorious appeals by individuals and groups of individuals. Further strengthening the notification provisions (by removing the presumption in favour of notification) may be of assistance, but the details are unknown at this stage. However, there appears to be no appetite to limit the ability of all and sundry to submit on applications and potentially appeal irrespective of whether they genuinely represent a public interest. 

Removing trade competition

Proposal: If an appeal is brought, financed or encouraged for trade competitive motives, then the party whose position was adversely affected by the appeal may seek to recover all the "damages associated with the appeal".

Comment: It is not clear what "damages associated with the appeal" is intended to include. Is it lost profit/economic losses or limited to the direct costs of the appeal? To be a deterrent, any costs award would need to outweigh the commercial advantages of delaying a competitor's project. The Court would need to firstly decide whether the appeal was being motivated by trade competition and the amount of any such damages. Both decisions are likely to be contentious, and require findings of fact on an evidential basis. In summary, while the objective is laudable, it is likely that the Court will be very cautious before making such awards. There needs to be clear statutory guidance as to how this mechanism will apply.

Streamlining processes for projects of national significance

Proposal: Broadening the criteria for Ministerial intervention to recognise the operational infrastructure needs of nationwide network utility operators. This additional criterion would allow Ministerial intervention for projects which may not individually be of national importance, but which play a significant role in improving or maintaining the functioning and integrity of nationally significant networks.

Comment: This proposal is sensible and should not give rise to significant debate or uncertainty.

Proposal: The ability to make applications for Ministerial Intervention direct to the Environmental Protection Agency (EPA).

Comment: This amendment could potentially streamline the process, as currently applicants need to first lodge an application with a local authority, and then make a request to the Minister to intervene. Time and cost savings could also be made, as the risk of public notification needing to be repeated would be avoided (ie. first by the local authority prior to Ministerial intervention, and then by the Minister). Depending upon the capability and resourcing of the EPA, it could result in clearer processes, time and cost savings, and a reduced level of uncertainty than currently exists in the Ministerial intervention provisions.

Proposal: The EPA can decide whether the criteria for Ministerial intervention are met, and refer a matter to a Board of Inquiry (BOI).

Comment: This is sensible. It is not clear from the overview documentation whether the EPA will also have the power to decide to directly refer applications to the Environment Court, or recommend other forms of intervention (such as all-of-Government submissions).

Proposal: A requirement for there to be nominations for membership of a Board of Inquiry from local authorities within the area where the application occurs and a requirement to appoint people with local knowledge.

Comment: Difficulties could arise in relation to linear projects which cover many districts/regions. There is also a risk that a requirement for local knowledge could result in the appointment of a local resident/local expert at the expense of an appointee with specialist expertise, who may be in a better position to contribute to the decision making process. The broadening of the scope for Boards of Inquiry along with maintaining the existing requirement that they be chaired by a current  former or retired Environment Court Judge will put pressure on judicial resources (particularly given the proposals for direct referral of some applications).

Proposal: A final decision within nine months of the date of notification - with a Ministerial power to extend this timeframe if he or she is satisfied by a report of the BOI that there is a necessary justification for doing so.

Comment: There would be benefits in terms of streamlining the process, although the presumption that the process will be complete within nine months may introduce unrealistic time pressures for complex or large projects resulting in risks to quality of evidence and decision making.

Omissions in relation to projects of national significance: There is no discussion about the role of local authorities in relation to Boards of Inquiry or direct referral to the Environment Court. A mandatory officer's report could provide the decision maker with the same level of information as would be available at a first instance hearing. It would also go some way to protecting the interests of the public and introduce a degree of objectivity to the process. Councils may however resist mandatory participation if they are required to bear all of their costs, including the need to engage counsel.

Creating an Environmental Protection Agency

Proposal: The EPA will be established as a statutory authority as part of the Stage II reforms. For the time being, the roles, functions and powers of the EPA will be exercised by the Secretary for the Environment. The Secretary will be able to delegate these functions to employees within the Ministry for the Environment. One of the functions of the EPA would be to centralise some regulatory roles on a nationwide basis.

Comment: The creation of the EPA as a separate statutory office is preferable to the expansion of the role of the Environmental Risk Management Authority (ERMA), as was originally proposed by the Government. The proposed nationwide regulatory function will impact on some of the functions of regional councils. It remains to be seen as to whether this may be the forerunner of another round of local government reorganisation.

Improving plan development and plan change processes

Proposal: Removing the ability of appellants to make general challenges or seeking the withdrawal of entire proposed policy statements and plans.

Comment: While this proposal is sensible and will result in more focussed and meaningful submissions, removing the ability to make general challenges on plans is likely to have little impact on the quality of second generation plans. There have been rolling reviews of many first generation plans.

Proposal: Modifying the requirement for local authorities to summarise submissions and call for further submissions on proposed plans.

Comment: It is unclear what modification is proposed to this process, and to what extent further submissions would be allowed. There is little, if any, benefit in summarising submissions, provided that submissions are available on the Council website and in hard copy. On the other hand, the ability to make further submissions is in our view essential. Submitters should be able to comment on other submitter's proposals, and if necessary challenge by way of appeal changes made in response to other submissions.

Proposal: Removing the need for local authorities to make decisions on each individual submission, but requiring decisions to be made on issues raised.

Comment: The current decision process is cumbersome and provides little benefit, due to the limited comment or analysis of each submission. The change reflects a common practice amongst many local authorities.

Proposal: Removing the "non-complying" category of activities - with a three year transitional period, after which they would be deemed to be fully discretionary activities.

Comment: This will be a contentious proposal. Non-complying activity status is a primary tool for managing activities which are regarded as generally inappropriate and/or which do not meet specific standards (eg. height limits, water quality standards, minimum flows etc). Removal of the non-complying category of activities, and therefore the threshold tests in section 104D of the RMA could potentially result in the proliferation of inappropriate activities. Local authorities would need to have strong targeted policies in their plans to provide clear guidance about undesirable activities, effects, or environmental outcomes. The three year transition period would allow time for developing such policies. However, in our view there is room to debate the merits of this proposal.

Proposal: Enabling the regional council and all territorial authorities of a region to combine to produce a single RMA planning document. The Government documentation specifically refers to combining a regional policy statement with relevant district plans.

Comment: There is a benefit of combining district plans (as the RMA currently allows). While regional policy statements set the policy direction for the region, the ability to combine the regional policy statement, regional plans and district plans may reinforce the requirement of section 75(3) of the RMA for district plans to "give effect to" regional policy statements. This proposal may also result in greater coordination with regard to issues such as urban growth and the strategic integration of infrastructure with land use as required by section 30(1)(gb) of the RMA. In practice however, local interests may make it difficult for regional councils and territorial local authorities to unify in this way.

Proposal: Rules in proposed plans to have no effect until decisions made on submissions have been notified, except where such rules are required to protect a natural resource, historic heritage or apply to an aquaculture management area. There would be the ability to apply to the Environment Court to have particular rules take effect earlier.

Comment: These amendments would avoid situations where particular members of the community have existing activities or particular areas of land affected by ill-considered or poorly justified proposed plan changes. Such a delay would enable the plan change provisions to be tested before affecting activities. (An example could be hazard overlays on plans, which could have an impact on property values, ability to sell properties etc without being fully tested through the plan change process.) On the other hand, it may result in applications for inappropriate development being made to avoid the effect of the proposed pan changes.

Proposal: Limiting appeals on proposed policy statements and plans to questions of law, with the ability to seek the leave of the Court to appeal generally.

Comment: The proposed changes place more emphasis on the role of local authorities in setting policy, rather than the Environment Court. More care and effort would need to be taken by all involved in making submissions on plans at the first instance, instead of the common approach of lodging a broad submission and then presenting a full case at the appeal stage. Strong, sound decision making would be needed to avoid (or limit) applications for leave to appeal to the Environment Court on the merits. This proposal places a lot of reliance on high quality, objective, local decision making. It will inevitably be a very contentious proposal. It is doubtful whether this proposal will achieve quality policy statement and plan provisions. The Environment Court plays a critical role in considering the merits of these provisions.

Proposal: Removing the requirement for territorial authorities to review their plans every 10 years.

Comment: Provided rolling reviews are taking place, this provision is not needed and was ineffective in any event due to the lack of sanctions, and the vagueness of what a review required. However, there have been instances where the Environment Court has criticised plan provisions and they have subsequently not been reviewed. A mechanism is needed to ensure that inadequate, poorly drafted provisions are amended in a timely manner.

Improving resource consent processes

Proposal: Removing the presumption in favour of notification of resource consents, and amending the criteria for when public notification is required on projects with more than minor effects on the wider environment.

Comment: Further information is needed about these criteria to see the benefits for applicants and the impact on public participation. The introduction of limited notification in the Resource Management Amendment Act 2005 has already gone a considerable way to reducing full public notification and limiting the ability of non-affected public to be involved in hearings. The current proposals could have an impact on the number of submitters and appeals (at least for small scale, largely compliant developments). This proposal will be contentious since it will be seen as limiting the influence of public interest groups.

Proposal: Simplifying the reporting requirements for council decisions and removing the need for material to be repeated or restated in subsequent hearing reports or decision reports.

Comment: These proposals are sensible. The current need to summarise all evidence considered is time consuming and of little benefit in terms of quality decision making and hopefully these changes will address that problem.

Proposal: Limiting the ability of local authorities to "stop the processing clock" during requests for further information from applicants, other than for the first request.

Comment: This amendment is supported. If good quality documentation is lodged with Councils, reasonable requests for further information should be limited, rather than the use of tactical or multiple requests for further information as a means of "buying time". Requests could still be made for information to be provided in evidence at hearings, rather than delaying the notification or the hearing.

Proposal: All Councils being required to develop a discount policy in respect of late consent processing, within 12 months of enactment of the Bill.

Comment: This policy is to incorporate a complaints process, including a discount on processing fees where the Council is at fault. Whether this amendment would streamline the consent process would depend on the extent of any discount in fees and the implementation of such a policy. At least for smaller Councils, with limited planning resources (and income) such a punitive approach could detract from the quality of planning reports. Statutory guidance or direction is likely to be required as to the contents of policies and perhaps minimum levels of discount, in order for this proposal to be meaningful.

Proposal: New provisions requiring resource consent hearings to close no later than 10 working days following completion of the last party's presentation at the hearing.

Comment: This is intended to put a limit on the process of hearings being adjourned to enable decision makers a longer period to deliberate thereby extending the decision making period. A more certain approach would be to require a decision by a set date after the close of the hearing. At least with complex hearings, there is often a need to leave the hearing open to allow further information to be provided.

Streamlining decision making

Proposal: Applicants and submitters being able to choose whether they have an application considered by elected representatives of the local authority or by one or more independent commissioners, with the requestor bearing the cost.

Comment: This proposal formalises the current process whereby applicants often make such requests of Council. It is not certain whether an applicant could insist upon a Commissioner hearing, as the information publicly available refers to both the ability to "choose" and being a "requestor". Arguably applicants should always be able to insist on an independent panel. The proposal to charge submitters who secure an independent panel against an applicant's wish will be contentious and is potentially problematic.

Proposal: Applicants for resource consents and notices of requirement having the ability to request that their application be directly referred to the Environment Court, provided the local authority agrees.

Comment: It is not clear what criteria the Council would use in deciding whether to agree to direct referral. It is also not clear who the applicant would apply to. This process is to be "complementary" to the "proposals of national significance" process and could presumably be used as an alternative to the call in process. Process issues also arise. What is the role of the local authority during any hearing? Who decides notification issues? Will individuals be able to fully participate given the Environment Court process is an adversarial process? This proposal in conjunction with broadening the Board of Inquiry role will if implemented put considerable pressure on judicial resources.

Proposal: Removing the Minister of Conservation's powers in relation to decisions on restricted coastal activities, and the local authority decision being final.

Comment: This amendment is long overdue and should streamline decision making for relevant consents and would remove the current confusion as to the Minister of Conservation and the Department of Conservation's multiple roles (decision maker, advocate, conservation manager/landowner).

Proposal: Amending the RMA to remove the ability of a requiring authority to make decisions on notices of requirement, with the local authority having decision making power.

Comment: Other than ensuring greater consistency with other decision making processes under the RMA, the justification for this proposal is not clear. However, the ability for a requiring authority to choose a commissioner hearing and increased call-in provisions should reduce concern about this amendment.

Improving national instruments

Proposal:  Providing the Minister for the Environment (and Minister of Conservation in relation to the New Zealand Coastal Policy Statement) with powers to cancel, postpone and restart a national policy statement (NPS) once it has commenced at any time prior to being gazetted.

Comment: This proposal clarifies that the Minister can halt the decision making process once it has commenced. This proposal  could potentially be beneficial, particularly as the Minister's role is limited throughout the hearing process (which is before a Board of Inquiry). If a hearing or the submission process had commenced, and the Minister decided that the NPS was no longer required, unnecessary time and expense could be avoided.

Proposal: Enabling NPSs to direct that a local authority must change the objectives and policies of policy statements and plans without the need for further local planning processes. The reason given for this approach is that a robust process would have been followed when developing the NPS.

Comment: This proposal is a cause for concern. Unless a NPS can dictate the wording of relevant objectives and policies that are to be placed into a plan (which is unlikely given the wide variation in how plans are drafted) this approach could result in poorly drafted objectives and policies being placed in plans that have not been tested through a submission process, and which may not in fact be in accordance with the NPS. It also assumes that there is universal agreement on the interpretation of the provisions of the NPS which, given the lack of specific or directive language used in such documents, is unrealistic. In our view this proposal confuses the role of a NPS with that of a NES which can be directive.

Proposal: Establishing that appeals on changes to plans and regional policy statements that are implementing objectives and policies of a NPS are limited to points of law.

Comment: The ability to appeal on points of law implies that there has been some form of submission from the public. However, as noted above, one proposed amendment is the ability to dispense with "local planning processes". Clarification of these processes is needed. The Courts would need to retain the ability to assess whether plan changes do implement the NPS which is a matter of mixed fact and law.

Proposal: Clarifying:

• that consent authorities must have regard to relevant provisions on NESs when making decisions on resource consents;
• the effect of a NES on existing resource consent applications; and
• that consent authorities be given an explicit ability to issue certificates of compliance where activities comply with a NES.

Comment: These proposed amendments would correct an omission in the RMA in relation to resource consent decision making and are desirable. Other proposed amendments in relation to NES generally seem positive.

Improving workability and compliance

Proposal: Proposed amendments in relation to compliance include an increase in the maximum fine for committing an offence under the RMA, from $200,000 to $600,000 for corporate offenders and $300,000 for individuals. A further proposal would give the Court the power to require a review of a resource consent held by an offender. It is also proposed that enforcement action be allowed against the Crown.

Comment: Increasing the fines will have little deterrent effect unless overall levels of fines are increased by the Court - few fines come close to the maximum at present. An ability to review a resource consent would have no impact on offenders who fail to hold a resource consent at all. It makes sense to remove Crown immunity.

Clarifications

The Government has clarified that it is no longer seeking to amend section 8 relating to the principles of the Treaty of Waitangi (due to settled case law) or the definition of "environment" (due to unintended consequences). This approach is reasonable.

Relevant dates for further detail of the proposed Phase I reforms:

The Bill should be before Parliament by mid-February, with the Government anticipating it will receive assent some time in September 2009.

Phase 2 reforms:

The Bill will not set up the EPA, or address reforms relating to aquaculture, fresh water, urban design and infrastructure/Public Works Act. These matters will be addressed in Phase II reforms, with the aim being to have them concluded by 1 July 2010.