Welcome to Environment in Focus, Bell Gully's regular update of resource management legal issues, designed to keep you informed on regulatory developments, legislation and cases of interest.
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Items in this issue include:
 Variation 6 to the Waikato Regional Plan became operative on 10 April 2012. It manages water allocation within the Waikato region. The Environment Court determined that to effectively lockup the entire variable flow above 3.6% of Low Flow in the Waikato River between the Taupo control gates and Lake Karapiro for electricity generation would not give effect to Section 5 of the RMA. The Court noted that agriculture, particularly dairying, is an important industry and providing for its future growth can only be of benefit to the social and economic well-being of the region and to New Zealand. The Court held that more water should be made available for consumptive use in the upper Waikato catchment and increased the flow limit to 5% of Low Flow.
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The “Better Local Government” reforms have recently been released by the Government. The recommendations made by the report provide an eight-point reform programme to improve the functioning of New Zealand’s 78 councils.
The key aim of the report is to counter the large rate increases of the last decade. Rates since 2002 have increased by an average of 6.8% per annum, which equates to more than double the rate of inflation. Further, concerns have been expressed over the substantial borrowing of some local authorities. The reforms presented in the government report aim to curb rate increases and reduce currently high debt levels.
The first recommendation centres on refocusing the purpose of local government. It labels the current broad purpose of the Local Government Act 2002 (which encapsulates social, economic, cultural, and environmental well-being) as being “unrealistic”. The reforms focus on narrowing the role of councils while still allowing for sufficient flexibility to cater to the diverse needs of local New Zealand communities. Under the proposed legislation, the role of councils will be redefined as being to provide “good quality local infrastructure, public services and regulatory functions at the least possible cost to households and business”.
This redefinition has been met with some criticism in relation to the council’s role in social and cultural activities, and there has been suggestion that the reforms may harm New Zealand’s economic development as there may be a perceived decrease in quality of life. In response to such concerns the then Minister of Local Government, Nick Smith, claimed that such events could still fall within the ambit of the local council as “public services”. Ultimately he stated that “the key legal test for the councils to meet in terms of spending ratepayer’s money is that there is a public good”.
In addition to decreasing the scope of the council’s role, reforms are suggested to “strengthen council governance provisions”. These reforms include requiring disclosure of both the number of staff employed and salary information. In particular, the Prime Minister highlighted the dramatic drop in costs which had resulted from the increased transparency required in relation to MP expenditure, and expressed a desire to see a similar change in behaviour in the local government sector.
Under the proposed new provisions, mayors are to be given increased powers. These include powers to appoint deputy mayors, establish committees and approve committee chairpersons. They will also be required to take a greater role in the development of plans, policies and budgets. The Minister of Local Government is also given increased powers to “assist” and “intervene” in the affairs of a council. These powers exist on a graduated scale of intervention ranging from a request to provide information to the calling of an early election.
The Government plans to decrease expenditure by amending the Local Government Act to provide fiscal responsibility requirements on councils in respect of income and expenditure.
It is also proposed that the process to consider reorganisation proposals be streamlined. This will have the effect of making it easier for council’s to amalgamate. In making these changes the Government is clearly indicating a preference for unitary councils similar to the current Auckland Council structure.
The first four reforms are expected to be introduced to Parliament in May and passed into law by September. The final four reforms include establishing a local government efficiency taskforce, developing a framework for central/local government regulatory roles, investigating the efficiency of local government infrastructure provisions and reviewing the use of development contributions. These are planned to be addressed in a second Local Government Reform Bill proposed for 2013.
Improving Housing Affordability
The Productivity Commission of New Zealand (the Commission) has justreleased its final report on Housing Affordability. The Commission identified a number of factors that contribute to housing affordability issues, including containment policies and development contributions. The Commission highlighted containment policies such as ‘Smart Growth’ and Auckland’s Metropolitan Urban Limit (MUL) as having adverse effects on housing affordability by limiting the availability of land for housing. The Commission considered that pressure on land prices needs to be reduced and recommended that there be an immediate release of new land for residential development in high demand areas such as Auckland and Christchurch. It was also recommended that councils should ensure that they are not putting up barriers to development and should take a less constrained approach to urban planning, and review regulatory processes with the aim of speeding up and simplifying the consent process. The Commission also suggested reconsideration of the current social housing reforms, noting that community housing has a unique and valuable role by providing below market rents and security of tenure.
In the Auckland context, the containment policy in the Draft Auckland Plan has been a matter of key debate. The Draft Auckland Plan proposed a target split of 75% new residential dwellings to be provided for within the Rural Urban Boundary (RUB) (the new name for the MUL) and 25% of new residential dwellings to be provided for in greenfield development outside of the RUB. However, after hearing submitters, the Council moved a bit and revised the target down to a 60-70:40-30 split. Whether the Unitary Plan can enable redevelopment and infill through upzoning to deliver on this target is a critical question. If in practice the 60%-70% intensification target within the RUB cannot be met, the cost of housing in Auckland will continue to increase as the capacity for greenfield development outside of the RUB is constrained and Auckland’s population continues to grow. This residential housing squeeze is also on the back of the global recession which has seen a significant slow down in residential construction over the last 4 years. Auckland house prices are already on the rise again, and out of step with the rest of the country. However the affordability debate, and how containment policies contribute to this, also needs to take into account the provision and ongoing costs of infrastructure (roads, utilities, public transport, amenities, community and commercial facilities) to service a sprawling city, and the loss of productive rural land and open spaces. It is clear that this debate will continue in Auckland through the Unitary Plan process. Auckland Council’s initial response to the recommendations is that they are out of touch with the situation in Auckland.
The Commission identified development contributions as an area that could be streamlined to improve Council performance across the country. It found that it was difficult to draw a general conclusion about how much development contributions increase housing prices and reduce affordability but recognised that the cost of development contributions is generally passed on to purchasers. In an effort to streamline the way in which Council’s formulate development contribution policies, the Commission recommended that the Best Practice Guidelines to Development Contributions (2003) (Best Practice Guidelines)be updated in a collaborative way between Councils and industry to cover matters such as when contributions should be applied, how they should be calculated, and how costs should be recovered. Once the Best Practice Guidelines have been amended, the Commission recommends that the Local Government Act 2002 be amended to include a statutory obligation on Councils to have regard to the Best Practice Guidelines. As Councils continue to increase their revenue from development contributions and are employing more complicated formulae to calculate contributions owing, a review of the Best Practice Guidelines is long overdue.
To view the Commission’s final report click on the following link: http://www.productivity.govt.nz/final-report/1468
Green Growth Report advocates nationally consistent biodiversity offsetting regime and has renewed debate surrounding whether petroleum and mineral resources should be extracted
Green growth means a shift to more sustainable, or greener, ways of operating and developing modern economies. The Government appointed the Green Growth Advisory Group to explore, and report on:
- how New Zealand, and in particular Government agencies, can help exporters leverage greater value in international markets from our clean, green brand;
- opportunities for smarter use of existing technologies and innovation, as well as greater development and adoption of new technologies (including clean technology) in our productive sectors; and
- the options for our small and medium-sized businesses to move to a lower carbon economy while sustaining the desired level of productive growth.
The Green Growth Report was published in December and makes a series of 26 recommendations to the Government consistent with the OECD policy framework for the “greening of growth”.
The report emphasises the pivotal role played by small to medium sized enterprises in New Zealand and encourages the Government to facilitate businesses’ practical understanding of how to improve environmental performance, both through the use of up to date technologies and by making it easier and simpler to access support. In order to achieve the desired changes in the business sector, more effective links are encouraged between businesses and research institutes such as universities. As a part of this process the Government is encouraged to provide more support for the adoption of existing overseas knowledge and technology into New Zealand.
In addition to the focus on medium sized enterprises, the Green Growth Report also identifies the “New Zealand” brand as a “valuable asset” for companies operating in the international market. The strengthening of the “clean green” brand is therefore encouraged in order to enhance New Zealand’s international business reputation.
In the public sector, the Report encourages the Government to provide special attention to construction and healthcare. In particular, high priority is given to considering green factors when undertaking the rebuild of Christchurch. For these public sector agencies, the Report recommends the establishment of an “invest-to-save” fund in order to enable agencies to shift sooner to greener technologies and practices. This fund would provide interest free loans to assist agencies in meeting the higher up-front costs associated with purchasing environmentally-friendly products, services and technologies, in order to produce net financial gains in the longer term.
For companies planning economic development projects, the Report also advocates the creation of a nationally consistent biodiversity offsetting regime. This recommendation stems from the RMA’s requirement that applicants undertaking development projects avoid, remedy and mitigate the effects of their activities on the environment. Various RMA participants have introduced the concept of “offsets”, whereby applicants seek to quantify the effects of their projects and undertake other actions to “offset” the harm. The difficulty with the current system is that the practices of applicants in offering “offsets” or consent authorities imposing them, has been variable and ad hoc. The development of a nationally consistent regime would aid in producing greater consistency, however the application of this regime also needs to be carefully considered in the RMA context which is not a no effects statute, and in our view offsets should not be expressed as a bottom line requirement where effects can not be avoided, remedied or mitigated. The recent decision of the Board of Inquiry considering plan changes for Transmission Gully helped to clarify the position regarding offsets in the current regime. They are to be regarded as a subset of mitigation.
In addition to these more general recommendations, the Report also makes specific suggestions for the greening of growth across the four primary sectors which have been identified as the basis of New Zealand’s future economic growth: food and beverage production, tourism, high-value manufacturing services, and mineral and petroleum extraction. Most controversially, the report has renewed debate surrounding mining, suggesting that the Government should start public “discourse” towards achieving greater consensus amongst New Zealanders on whether petroleum and mineral resources should be extracted. The Government is also encouraged to investigate the ways in which New Zealand could secure economic, environmental and community benefits from the royalties derived from allowing mineral and petroleum extraction.
The report considers that New Zealand is well placed to move towards greener practices by adopting the suggested recommendations.
Upper North Island Ports Study
The publicity of Ports of Auckland Limited’s (POAL) future development plans caused concern amongst the general public of the adverse impacts of further reclamation for port activities extending out into the Waitemata Harbour. The alarm stemmed from the POAL’s submission on the Draft Auckland Plan and the plans for port development out to 2050 which following the completion of the consented Fergusson extension, progressively extended Bledisloe terminal, and then filled the water space between Bledisloe and Jellicoe wharf.
POAL maintained that its submission on the Draft Auckland Plan was not asking for extra development rights, but simply that the current zoning applicable to the port (and water space) be maintained so that the development outlined in its concept plans had a sense of security (subject to the RMA consent process). However, although the statutory status of the Auckland Plan in the RMA planning hierarchy is still up in the air, Auckland Council has clearly stated that the Auckland Plan is its guiding document and will inform the Unitary Plan (to be consulted on in late 2012 / early 2013) which will replace the Auckland Regional Plan : Coastal. Therefore POAL would clearly benefit from having its port development plans ratified by the Auckland Plan to assist its position for the Unitary Plan process.
On 6 March the Auckland Council voted on its position on the port development plans during deliberations on the Auckland Plan, and confirmed that:
- The Auckland Plan does not endorse any specific port expansion proposal;
- That in order to determine the long term (greater than 30 years) role of the Ports of Auckland in the Upper North Island freight network, and inform the long-term strategic choices for the Auckland waterfront (including the Unitary Plan), Auckland Council in conjunction with key stakeholders will lead and facilitate a study of port development options, which may confirm the status quo, identify different configuration alternatives at the current port locations, or identify as yet unexplored alternative locations for port infrastructure; and
- The RMA planning framework for the port area will be developed as part of Auckland Council’s Unitary Plan. That plan will take account of the Port of Auckland study.
This independent technical study into the current and future freight demand for ports and port related infrastructure in the Upper North Island was launched on 21 March. The study has been commissioned by the Upper North Island Strategic Alliance (UNISA) which comprises the Mayors and Chairs of Auckland Council, Bay of Plenty Regional Council, Northland Regional Council, Waikato Regional Council, Hamilton City Council, Tauranga City Council and Whangarei District Council. The terms of reference for the study are still being developed and will require signoff from the UNISA members. The overall objective by UNISA is to work together to maximise sustainable development opportunities for all of the Upper North Island and its contribution to New Zealand.
Auckland's Tree Protection Rules
Although from 1 January this year you may have noticed the loss of a few trees around your neighborhood as the provision in the Resource Management (Simplifying and Streamlining) Amendment Act 2009 revoking general tree protection rules came into effect, in many cases the Auckland Council has determined that the general tree protection rules still apply.
This is on the basis of an Environment Court declaration in 2011, which held that the general tree protection rules in the Auckland Plan will continue to apply in certain zones, where a tree or group of trees could be ‘specifically identified’ by location, reference to a named species in a defined area or zone, by reference to a class of trees with defined characteristics in a defined area or zone, or by reference to all trees in a named ecosystem, habitat or landscape. For example, in the Auckland City District Plan: Isthmus, the Auckland Council has confirmed that the trees in the Residential zones 1 to 4, open space or recreation zone, or within a coastal conservation area or significant ecological area, and where the tree is above specified height and girth measurements, form part of an identified ‘group’ and cannot be cut down without a resource consent.
In addition to upholding these general tree protection rules, Auckland Council is also progressing plan changes to schedule individual trees and groups of trees. A further 1,800 trees are proposed to be added to the 3,960 trees currently identified in the tree schedules across the region.
The purpose of the amendment to the RMA to delete the general tree protection rules was to avoid the large number of resource consent applications that were being made to prune or remove trees in urban areas. The effect of the 2011 Environment Court declaration and the position taken by Auckland Council is that many trees are still protected even if they are not specifically identified in the District Plan. This caused some confusion with property owners in January and uncertainty if they could lawfully cut down trees on their property. Auckland Council is now advising property owners to contact the Council and ‘check before you chop’.
However, further certainty and the ability to cut down your trees may be at hand. The Property Council of New Zealand has recently launched a further challenge in the Environment Court to Auckland Council's tree protection rules. The declaration proceedings seek an order that Auckland Council revoke the general tree protection rules on the grounds that they do not specifically identify any tree or group of trees, and do not fall within the specified exemptions (located within a reserve or subject to a conservation management plan or strategy). The declaration proceedings have been publicly notified to ensure members of the public who wish to become involved have the right to be heard. The period for s274 notices of interest closes on 18 April, and the hearing is likely to be held in June or July this year.
International Standard on Biodiversity Offsets
On 5 March 2012 an international paper was published by the Business and Biodiversity Offsets Programme ( BBOP , a partnership between companies, governments and conservation experts to explore biodiversity offsets) outlining a ‘Standard on Biodiversity Offsets’ ( the Standard ).
The Standard and the accompanying supporting materials were developed by members of the BBOP Secretariat and Advisory Group during the second phase of the programme’s work (2009 – 2012). It aims to provide a source of guidance, or best practice, when considering, designing and implementing biodiversity offsets, in the context of the mitigation hierarchy.
BBOP agreed its ten Principles in 2009, and the Standard is presented as a hierarchy of Principles, Criteria and Indicators ( PCI ) that need to be satisfied in order to comply with the Standard. Although the PCI focus on the ecological aspect (i.e. intrinsic values) of biodiversity, the principles also embrace its socioeconomic and cultural values, since these must be taken into consideration in following the mitigation hierarchy (of avoidance, minimisation, rehabilitation/restoration, and offset) and demonstrating no net loss or a net gain of biodiversity. The Standard also recognises that as it represents new and emerging best practice, many projects are either not designed to meet all of the PCI, or for a variety of reasons, will be unable to do so.
In the New Zealand context, the Proposed National Policy Statement on Indigenous Biodiversity ( the NPS ) has been drafted which sets out the Government's expectations for managing New Zealand's indigenous biodiversity under the RMA. Submissions on the NPS have been received, and the Ministry for the Environment is currently preparing a report and recommendations for the Minister for the Environment to consider. The NPS also details the principles to be applied when considering a biodiversity offset, which replicate those agreed through the BBOP.
A number of recent decisions (see Upper Clutha Tracks Trust v Queenstown-Lakes District Council and the Turitea Board of Inquiry Draft Decision) reflect the increasing use of environmental compensation to justify the grant of consent to developments that would otherwise be considered to be inappropriate.
In the Draft Decision of the Board of Inquiry into the Hauāuru mā Raki Wind Farm and Infrastructure Connection to Grid (the HMR Draft Decision), Contact Wind’s objective to achieve a no-net-loss had implications for how the Board evaluated the adequacy of the proposed conditions of consent, and meant that several conditions were recommended to be more onerous than what would otherwise be expected to ensure the stated ‘no net loss’ objective was achieved.
More recently, the Board of Inquiry, when approving the plan changes for Transmission Gully (October 2011), regarded offsetting effects as a subset of remedying or mitigating effects. The provision of a positive effect in one location could offset adverse effects of the same or similar type caused by the Transmission Gully works at another location with the result that the overall adverse effects of the values of the waterbodies are remedied or mitigated. Guiding principles included: there should be a clear connection with the effect and the offsetting measure, and that offsetting should maintain and enhance the particular natural values affected by the project (see Policy 4.2.33A of the Regional Freshwater Plan for the Wellington Region).
Although the Standard provides a methodology for achieving no net loss or a net gain of biodiversity, in our view it is essential that the NPS clearly states that environmental compensation may be considered to be a positive effect of a proposed development, or as an offset for an adverse effect, but also confirms that applicants are not required to offer environmental compensation under the RMA.
To learn more about the Standard on Biodiversity Offsets and its Principles, Criteria and Indicators, please see http://bbop.forest-trends.org/guidelines/Standard.pdf.
Parliamentary Commissioner to report on Fracking
Initial scoping work being done on hydraulic fracturing (“fracking”) has been stepped up. The Parliamentary Commissioner is to undertake an investigation into the controversial practice of fracking following a high profile campaign spearheaded by the Greens. Meanwhile various reports including one commissioned by the Taranaki Regional Council indicate that as long as the practice is carried out with care, risks are minimal. See http://www.trc.govt.nz/hydraulic-fracturing/ Parliamentary Commissioner for the Environment, Dr Jan Wright, says there is a need to examine the issue more closely and Dr Wright hopes to have a report tabled in the House before the end of this year.” See http://www.pce.parliament.nz/media/media-releases/pce-to-investigate-fracking/.
Have your say on the proposed overhaul of the Crown Minerals Act 1991, expected this year
The Government is undertaking a review of the Crown Minerals Act 1991 regime. The review has three main objectives:
- to encourage the development of Crown-owned minerals so that they contribute more to New Zealand’s economic development;
- to streamline and simplify the regime where appropriate, ensuring it is in line with the regulatory reform agenda, and make it better able to deal with future developments;
- to ensure that better coordination of regulatory agencies can contribute to stringent health, safety and environmental standards in exploration and production activities.
Public feedback on proposed changes to the regime is now being sought. See the discussion paper 'Reviewing the Crown Minerals Act 1991 Regime': http://www.med.govt.nz/sectors-industries/natural-resources/oil-and-gas/review-of-the-crown-minerals-act-regime/discussion-paper.
Submissions are due by Friday 20 April 2012 and will be taken into account in the development of a bill to amend the Crown Minerals Act, and new minerals programmes and regulations. An amendment bill is expected to be introduced into Parliament in 2012.
| In the Courts | Top |
Variation 6 – Water Allocation
Variation 6 to the Waikato Regional Plan, as decided by the Environment Court, became operative on 10 April 2012.
The purpose of Variation 6 is to set out how the Regional Council will manage water allocation within the Waikato region. It is in response to increased demand, which has led to direct competition between those wanting water for domestic and municipal water supply, electricity generation, agricultural development and other uses. The Environment Court confirmed the Council decision, apart from some amendments.
Of interest is the issue of protection of water for electricity generation and allocation preference. The degree of protection afforded in the Variation was disputed by the agricultural users at it effectively limits any future additional abstraction for agricultural uses. While the debate seemed to focus on dairy versus electricity, the Court commented that the real issue is whether the water in the Waikato River above Karapiro should be more liberally freed up to enable uses other than for electricity generation – rather than effectively locking up all of the available water above 3.6% of the 1 in 5 year day low flow Q 5 (Low Flow) exclusively for electricity generation.
The importance of electricity to New Zealand was acknowledged in the Decision, as was the strong statutory directions that emphasise the importance of renewable energy and the effects of climate change. The Court acknowledged the strong directions contained in the relevant statutory instruments, particularly the National Policy Statement on Renewable Energy. However, the Court considered that to effectively lockup the entire variable flow above 3.6% of Low Flow in the Waikato River between the Taupo control gates and Lake Karapiro for electricity generation would not give effect to Section 5 of the RMA. The 3.6% is close to being fully allocated. Once it is allocated, no water would be effectively available for any consumptive use. The Court did not consider this to be an efficient use of the resource.
The Court noted that agriculture, particularly dairying, is an important industry and providing for its future growth can only be of benefit to the social and economic well-being of the region and to New Zealand. Such uses should not have to go through a contested non-complying activity process that would have to overcome a high bar created by protectionist policies designed to protect electricity generation. The Court found that overall some more water should be made available for consumptive use in the upper Waikato catchment. The Court amended the primary allocable flow at Karapiro Dam from 3.6% to be set at 5% of the Low Flow.
The Environment Court’s decision may be of interest to other regions also struggling with competing users for water resources.
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If you would like further information about any of the items in Environment in Focus, please contact:
Andrew Beatson
Partner
Marija Batistich
Senior Associate
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