Ground Cover August 2020

Ground Cover is a quarterly publication tracking legislative and regulatory reform in resource management, local government, planning and construction law. This issue has been slightly delayed in order to capture the pre-election legislative rush and the Randerson Panel’s recommendations, which we have made our lead item.

Resource management

RMA’s days numbered

The biggest environmental law shake up in a generation has been recommended by the Randerson Panel in New Directions for Resource Management in New Zealand. Environment Minister David Parker says it is for the next government to consider but that he expects political parties to develop their election policies in light of the report’s findings.

Reaction has been predominantly positive across the political establishment (including Labour, National and the Greens) and from most environmental and business groups. We therefore anticipate that the overhaul and replacement of the Resource Management Act (RMA) will be a key policy of whichever parties make up the incoming government.

The Report’s analysis of why the RMA is viewed as having failed is comprehensive and includes: a lack of clarity over how it should be applied which persisted over more than two decades (including around issues addressed in EDS v New Zealand King Salmon); a lack of recognition of the benefits of urban development; a focus on managing resource use rather than on planning to achieve outcomes; a bias toward the maintenance of the status quo; excessive complexity, uncertainty and cost; weak compliance, monitoring and enforcement; and capability and capacity challenges within local government.

It agrees with EDS’s assessment that the issues with the RMA are beyond what a makeover could achieve and that it should be scrapped. The Panel wants it replaced by two main Acts – a Natural and Built Environments Act (NBEA) and a Strategic Planning Act. A third statute would address issues related to climate change adaptation and managed retreat from areas threatened with inundation from sea level rise. See our climate change section below.

NBEA

The purpose of the NBEA would be in enhancing the quality of the environment to support the wellbeing of current and future generations. It would retain and build on many of the RMA’s principles but would have a positive focus on achieving high quality outcomes – specified in relation to the quality of natural and built environments, rural areas, tikanga Māori, historic heritage, natural hazards and climate change.

Mandatory national direction would guide how these matters must be reflected in plans, including through the use of targets. There would also be a requirement to establish environmental limits or minimum environmental standards for certain resources (air, water, soil, biodiversity).

The role of Māori in resource management decision making would be strengthened and expanded. Decision-makers would be required to give effect to the principles of the Treaty (rather than just to take account of them, as now) and the concept of ‘Te Mana o te Taiao’ ¹ would have a prominent role as part of the purpose of the NBEA.

Regional councils and territorial authorities would be required to produce one combined regulatory plan for each region – a provision which would telescope the more than 100 RMA policy statements and plans that New Zealand currently has down to just 14, while avoiding the parochial politics attached to trying to force council amalgamation.

The higher level content for these plans would be set through national direction and regional spatial strategies, and the structure and format would be prescribed through national planning standards. The process to develop them is modelled on the approach used for the Auckland Unitary Plan and would involve an Independent Hearing Panel (IHP), a joint committee of delegates from each local authority in the region, a representative from the Department of Conservation, and representatives from mana whenua.

The joint committee would determine the form of the combined plan for notification and decide whether to accept the IHP’s recommendations.

Plans would be independently audited pre-notification to ensure quality and adherence to the requirements of the Act and national direction. Submissions would be heard by the IHP, with appeal rights to the Environment Court.

The Report also proposes better differentiation between consent applications for complicated activities requiring a robust environmental impact assessment and those with only localised effects that could be determined by a simpler alternative dispute resolution process.

The direct referral and nationally significant project tracks would be retained but with some modifications, including the removal of the board of inquiry process in relation to the latter.

The present focus of notification decisions on applications with effects that are ‘no more than minor’ would be removed. Although the devil will be in the detail, the Report suggests information requirements should be proportionate to the nature and complexity of the activity.

Other recommendations include the removal of the non-complying activity status, and removal of the statutory recognition of the permitted baseline concept.

Compliance, enforcement and monitoring functions would be better resourced, consolidated into regional hubs with national oversight, and supported by higher penalties.

The Strategic Planning Act

The Strategic Planning Act would promote the strategic integration of legislative functions across the resource management system, including the proposed NBEA, the Local Government Act, the Land Transport Management Act and the Climate Change Response Act.

It would require the development of long-term regional spatial strategies, jointly developed and agreed by central government, councils and mana whenua (with a Ministerial decision-making power to resolve disputes).

Parker statement

New Directions for Resource Management in New Zealand

EDS statement

COVID-19 RMA fast track Act

The COVID-19 Recovery (Fast-track Consenting) Act 2020 came into force on 9 July 2020. Its purpose is to boost employment and economic recovery by providing a faster alternative process to RMA consenting and designations. The 17 projects listed in the Act are automatically eligible for the fast track process.

Otherwise applications can be made to the Minister, who will have to decide whether the project meets the eligibility criteria, taking into consideration a range of matters. These include: economic benefits, the social and cultural well-being of current and future generations, and whether there will be a public benefit – for example job creation and impact on greenhouse gas emissions.

If satisfied these criteria are met, the Minister may choose to refer the proposed project to an Expert Consenting Panel – which will be chaired by a sitting or retired Environment Court Judge, or senior RMA lawyer and will include nominees from relevant local government and iwi authorities.

Decisions on applications are required within 25 working days – extendable to 50 for large scale projects. No public notification is required and there are limited rights of appeal to the High Court on points of law only, and/or judicial review with one further right to the Court of Appeal.

The Act also includes powers for certain infrastructure providers, other agencies, and local government to undertake small-scale repair, maintenance and upgrade works without a resource consent.

Environment Minister David Parker has woven a strong environmental emphasis into the legislation, which he envisages will be used to promote low emission transport modes, housing, sediment removal from rivers and estuaries, new wetland construction, flood management and works to prevent landfill erosion.

But it was not enough to win over the Greens who voted against the Bill – The National Party gave it majority. The Act has a sunset clause, meaning it will be automatically repealed after two years.

Statement

Urban Development Act

The Urban Development Act is now law. It seeks to expedite complex urban development projects by providing Kāinga Ora with powers of compulsory acquisition and by creating a fast track specified development project (SDP) process.

The National Party does not think the Act strikes the right balance between urban development goals and property rights because, while it largely reflects the provisions of the Public Works Act, it allows Kāinga Ora to continue to hold onto compulsorily acquired land, even if it is not being used for its original purpose.

Statement

NPS on Urban Development

The NPS on Urban Development 2020 (NPSUD) will come into force on 20 August 2020. It requires all councils to provide sufficient development capacity to meet expected demand for urban development (including housing) over the short, medium and long term.

Short term is considered to be three years, medium term between three and 10 years and long term between 10 and 30 years.

The NPSUD creates three “tiers” of local authorities. The most directive policies apply only to Tier 1 local authorities, being Auckland, Hamilton, Tauranga, Wellington and Christchurch. They will be required to ensure their plans enable urban intensification, including building heights and density of urban form:

to realise as much development as possible in the inner city, and
to allow building to at least six-storeys in metropolitan centre zones, and within a walkable catchment of city centre zones, metropolitan centre zones and rapid transit stops.

In all other locations, building height and density is to be commensurate to the level of accessibility by active or public transport to commercial activities and community services, and the relative demand for housing and business use.

Releasing the NPSUD, Urban Development Minister Phil Twyford said:

When overly restrictive planning creates an artificial scarcity of land on the outskirts of our cities, or floor space because of density limits in our city centres, house prices are driven up and people are denied housing options.Urban Development Minister Phil Twyford

NPS

Statement

Freshwater reform package

The Government’s freshwater package, designed with the intent of stopping and then beginning to reverse degradation of our waterways over the next five years, is now almost entirely enacted.

The mechanisms of implementation were the Resource Management Amendment Act 2020; the new National Policy Statement on Freshwater Management (NPS-FM), National Environmental Standards for Freshwater (NES-FW), and regulations covering the measurement and the exclusion of stock from waterways. Links to these are provided below.

The RMA amendments are already in effect. The other changes were passed on 5 August and will come into force beginning from 3 September this year (subject to some transitional provisions in the NES-FW).

The only outstanding item is a national bottom line for dissolved inorganic nitrogen (DIN) which has been referred back to the Scientific and Technical Advisory Group (STAG) for decision within the next 12 months.

The Government came under huge pressure from the agricultural sector over the DIN issue and was on the back foot due to a lack of consensus within STAG on an appropriate approach. Meanwhile councils must ensure that current DIN levels are either held or reduced, and not increased.

New requirements include:

controls on intensive winter grazing
minimum standards for feedlots
interim intensification controls, until regional councils have completed their new long-term plans
a cap of 190 kg per hectare on synthetic nitrogen fertiliser (the use of which increased 772% between 1990 and 2018)
the exclusion from July 2023 of all dairy cattle and pigs from waterways more than a metre wide and, from July 2025, of beef cattle and deer in low slope areas
the introduction of mandatory and enforceable freshwater farm plans across most of the country, beginning in catchments most at risk, and
a requirement on regional councils to develop freshwater planning instruments to give effect to the NPS-FM as soon as reasonably practicable (noting that the Resource Management Amendment Act 2020 requires notification of such plans by the end of 2024).

When fully implemented, these rules are expected to trigger land use change of 6,600 hectares. This would comprise:

a transition from dairy to less intensive land uses
some afforestation of hill country pasture to reduce erosion and sedimentation of waterways, and
riparian setbacks to meet stock exclusion requirements.

The initial Cabinet Paper on the reforms noted that 74% of urban streams and 82% of streams in pastoral farming areas are not suitable for swimming at least some of the time, that 76% of our native fish species are threatened and that we have lost more than 90% of our wetlands.

Minister's press statement

RMA changes

NPS-FM

NES-FW

Water take regulations

Stock exclusion regulations

Freshwater Commissioners

Professor Peter Skelton CNZM has been appointed Chief Freshwater Commissioner, with Alternate Environment Court Judge Craig James Thompson as his deputy.

They will be responsible for overseeing the implementation of the new Freshwater Planning Process provided for in the RMA Amendment Act 2020. Announcing their appointment, Parker said they brought to the role “a wealth of experience in environmental planning processes”.

Statement

Waste reduction plan

The Government has announced a range of initiatives to reduce landfill waste and encourage recycling. Elements include:

$124m toward new recycling infrastructure
expanding the waste levy to additional landfill types, including construction and demolition fill, progressively from 1 July 2022, and
increasing the levy rate for landfills that take household waste from $10 per tonne to $60 in four equal installments (the first increase was timed for 1 July 2021 but the timeframe may be pushed out to avoid adding costs during the COVID-induced economic recession).

Announcement

Mandatory product stewardship schemes

Six new waste products have been identified for compulsory product stewardship schemes – plastic packaging, tyres, e-waste, agricultural chemicals and their containers, refrigerants and farm plastics.

The Ministry for the Environment (MfE) will work with the manufacturers and retailers, and with stakeholders, to co-design the waste minimisation strategies and the regulations to support them.

Statement

Embracing a Māori perspective

The Environmental Protection Authority (EPA) has produced a Mātauranga Framework to help decision-makers and EPA staff to incorporate Māori perspectives and mātauranga evidence into their decision-making.

Framework

Climate change

ETS reforms now law

The Climate Change Response (Emissions Trading Reform) Amendment Act will be implemented in stages, with some provisions coming into effect immediately and others at 1 January 2021, 2022 or 2023.

The Act:

provides the mechanics for an overall emissions cap, which limits the number of emission units that are made available via the Emissions Trading Scheme (ETS)
replaces the fixed price option (FPO) with a cost containment reserve, which establishes a price floor of $20 per unit and an effective price ceiling of $50 (each to be increased by 2% a year to provide for inflation)
provides additional details regarding the emission unit auctioning system (regulations in respect of which come into force on 7 November, with the first of quarterly auctions expected to commence in March 2021), and
gives effect to decisions to price livestock emissions at farm level and fertiliser emissions at processor level from 2025, with a fall-back option if farmers fail to achieve sufficient progress on an alternative pricing mechanism by 2022.

Following the passage of the Act, MfE set a provisional emissions budget of 354 million tonnes. Of this, 160 million will be within the ETS, of which 43 million will be freely allocated to emission intensive, trade exposed industries and 27 million will be withheld by the Government to encourage trading of banked units held in private accounts. The remaining 90 million tonnes will be auctioned.

This budget ostensibly runs from 2021 to 2025 but will in fact be overtaken by the budget currently being prepared by the Climate Change Commission for release on 31 May next year (publication was originally set for 1 February but the disruption created by COVID-19 has forced an extension).

Most of the 194 million emissions outside the ETS come from agriculture which won’t fully enter the ETS until 2025, but which may still be the subject of its own specific emissions levy/rebate (or similar) scheme.

Concessions to business introduced as the Amendment Act made its way through the House include:

extending the FPO (albeit at a higher price of $35 per tonne) to cover 2020 emissions in order to provide more certainty around compliance costs
giving the Government more flexibility to slow the phase-down of free allocations (set to begin in 2021 and gather speed from 2030) to a specific high emissions activity where the Climate Change Commission considers there is “a substantial risk of emissions leakage”, and
deferring many of the changes relating to forestry for 12 months to recognise the economic disruption created by COVID-19.

National was opposed to progressing the Bill during the pandemic on the grounds that it would “add further cost, uncertainty and inhibitors to economic recovery at a time when we are facing the greatest economic challenge of our lifetime”. It wanted passage deferred for 12 months.

Bill

Review of NZ’s Paris Agreement commitments

Climate Change Minister James Shaw has asked the Climate Change Commission (CCC) to review New Zealand’s Nationally Determined Contribution (NDC) under the Paris Agreement to determine whether it is “ambitious enough to help create a better, cleaner and more prosperous future”.

Statement

Managed Retreat and Climate Change Adaptation Act?

The Randerson Panel on the reform of the resource management system has recommended specific legislation to deal with issues relating to climate change adaptation and the managed retreat from inundation prone areas.

The Act would include a power to acquire land, with potential compensation determined by specified principles – given that market value, as required by the Public Works Act, would be “significantly diminished” and unlikely to yield an amount “to enable affected people to move on with their lives by re-establishing themselves elsewhere”.

The Panel also recommends that other economic levers be provided, including taxes, subsidies and other incentives to change land and resource use.

Panel report

National Climate Change Risk Assessment

The first National Climate Change Risk Assessment, led by the Ministry for the Environment (MfE), has now been released. It is required under the Zero Carbon Act and will be used to develop a National Adaptation Plan over the next two years. The report identifies 43 risks that could have a major or extreme impact on New Zealand, of which the 10 most significant, requiring urgent action over the next six years. Those risks are:

to coastal areas from sea level rise and extreme weather events
to indigenous ecosystems and species from the greater spread of invasive species
to social cohesion from displacement
increased social inequity arising from the uneven distribution of climate change effects
to the Government’s fiscal position from the economic costs associated with lost productivity, disaster relief expenditure and unfunded contingent liabilities
to the financial system from economic instability
to the availability and quality of potable water
to buildings from storms, drought, increased fire risk and ongoing sea level rise
of maladaptation due to a failure to account for uncertainty and change over long timeframes, and
that climate change damage will be exacerbated because current institutional arrangements are not fit for climate change adaptation.

Report

Statement

CCC marks budget a failure

The CCC considers that, while Budget 2020 contains a number of initiatives likely to promote the transition to a low carbon economy, it does not go far enough.

“We need to do more” Climate Change Commissioner Rod Carr told Climate Change Minister James Shaw in a letter which, consistent with the Commission’s role as an independent adviser, was released publicly.

The Commission is now vesting its hopes in the $20b as yet unallocated from the Response and Recovery Fund, saying:

There is an opportunity to invest in large transformative projects that address emissions reduction and adaptation.Climate Change Commission

Letter

CCC advises on the path to recovery

The Climate Change Commission has written to Minister James Shaw outlining six principles which the Government should have regard to in reviving the economy:

consider how stimulus investment can deliver long-term climate benefits
bring forward transformational climate change investments that need to happen anyway
prepare the workforce for the jobs of tomorrow
work in partnership with iwi in the spirit of the Treaty, with businesses to leverage private sector action and finance, and with the research community to identify new opportunities and tools
maintain incentives to reduce emissions and adapt to climate change
use a broad range of indicators, including wellbeing, to measure the success of the recovery.

Letter

Greenhouse Gas Inventory 1990 to 2018

The Greenhouse Gas Inventory for 1990 to 2018 has been released. Findings include:

gross emissions increased by 24% to 78.9 million tonnes of carbon dioxide equivalent over the period, of which land use change (principally forestry) offset almost one third
the two largest contributors were agriculture (48%) and energy (41%), and
net emissions rose 57% (reflecting a sharp increase in the volumes of timber harvested in 2018).

Inventory

Local government

LGFA raises debt limit

The Local Government Funding Authority, which borrows on behalf of councils, has temporarily increased council debt caps to 300% of revenue. This will apply through 2021 and 2022 and then will begin winding back at 5% a year to 280% by 2026. The relaxation is part of a general post-lockdown fiscal stimulus, through central government, the Reserve Bank and – now – local government.

Announcement

Three waters assistance – with a catch

The $761m fund created by the Government to assist councils to bring their drinking, waste and storm water infrastructure up to scratch has now been allocated across the regions.

The price for participation is that local authorities buy into the Government’s wider water reform programme by ceding their water functions to multi-regional water entities. The allocations are intended to incentivise this collaboration.

Councils must sign up to a Memorandum of Understanding by 31 August to access their allocation and have until 30 September to agree on how best to apportion the funding within their region.

Ministers are still determining the approach to be taken in Auckland to best leverage the respective balance sheets of Auckland Council and Watercare.

Statement

New drinking water regime

The Water Services Regulator Act, establishing Taumata Arowai as the new regulatory body to manage the country’s drinking water, was passed in the last few weeks before the House rose, and the Water Services Bill was introduced, although no further progress will be made until after the election. The Bill gives Taumata Arowai the legislative tools it needs to do its job.

Statement

RMA implementation trends

The 2018/19 report by the National Monitoring System on RMA implementation shows that the proportion of consent applications processed within time limits has fallen for the fourth consecutive year and now sits at 82%.

Other findings are:

consent processing times and application fees are increasing
section 37 time extensions are applied to almost one application in three, and
monitoring and enforcement staffing levels have risen 60% over the past two years.

MfE statement

1 As proposed, ‘Te Mana o te Taiao’ refers to the importance of maintaining the health of air, water, soil and ecosystems and their life sustaining capacity.