National's proposed reform of the RMA

On Saturday, the National Party claimed the biggest victory since MMP was introduced in 1996, and looks set to introduce a number of legislative reforms within the coming months. Specifically, National intends to amend the RMA within 100 days of forming a new government and aims to pass these amendments into law within six months.

The National Party's proposed reforms of the RMA are to be implemented through a two-phase process.

Phase One
Phase One of the proposed reform is aimed at streamlining and simplifying the RMA. This proposed Bill would include numerous amendments to the RMA including:

Improving resource consent decision-making and processing by:

improving the processing of smaller consents by providing an independent complaints mechanism for addressing issues such as: breaches in the statutory processing times, excessive fees and/or unreasonable requests for further information by authorities. Accordingly, there will be a power to discount or waive the consent-processing fees where statutory processing times are breached;
reducing the number of existing resource consent categories; and
limiting vexatious and frivolous objections to resource consent applications by creating new powers to reject such objections and by reinstating the Environment Court's power to award security for costs where the Environment Court considers the merits of an appeal are weak.

Creating an Environmental Protection Authority ("EPA") out of an expanded Environmental Risk Management Authority. The EPA will be given responsibility for developing National Environmental Standards, National Policy Statements, a new "Priority Consenting" process and specific functions under the Hazardous Substances and New Organisms Act 1996.
Introducing Priority Consenting which would apply to the consenting process for major infrastructure projects. These consents will have to be processed by the EPA within nine months.
Removing the Ministerial veto on coastal consents as National considers that the Minister has enough influence over coastal consents given that the Minister approves the National Coastal Policy Statement and has to approve Regional Coastal Plans. This reform is designed to avoid the type of Ministerial interference that occurred in the Whangamata Marina decision.
Simplifying Council Plans by encouraging regional and district councils to develop a single plan and provide a system of approved contractors (eg. for tree trimming) to reduce the number of minor consents required.
Replacing references to Treaty principles with specific requirements for iwi consultation.
Amending the definition of "environment" to specifically include natural and physical resources, and prohibit objections with respect to trade competition.

Phase Two
National proposes that Phase Two of the reforms will look at policy issues in more detail. These reforms may include:

a revision of the interaction between the RMA and the Public Works Act 1981 so as to reduce timeframes and more generously compensate landowners. National's reasoning is that the increased compensation is worth the economic benefits from faster approval of critical infrastructure;
holding the draft National Policy Statement on Freshwater Management so that further engagement with key stakeholders can occur and a better framework can be developed; and
exploring new approaches to city development with a review around urban design and encouraging more collaboration between planners and developers.

As National intends to introduce the proposed amendments into Parliament within 100 days of forming a government, we encourage you to be proactive about identifying any issues that may be raised as a result of the proposed reforms, including areas that have not been addressed and should be. If you would like to discuss further the possible effects, impacts or any concerns that the proposed reform raises please contact us.

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National's proposed reform of the climate change legislation

In September, the Climate Change Response Act 2002 was amended by the Climate Change Response (Emissions Trading) Amendment Act 2008 ("2008 Act"). National considers that the legislation process around the 2008 Act was rushed, and that inadequate consideration was given to a number of key issues. Accordingly, National has confirmed that it will introduce further amendments within nine months of taking office.

The Act Party, with 3.7% of the party vote at the election on Saturday bolstering it's MPs from two to five, has campaigned strongly on scrapping the ETS. It will be worth monitoring how National's proposed reforms are affected by Act's support (whatever form of support it takes) of the National-led government.

National's proposed amendments would:

aim for a 50% reduction in New Zealand's 1990 greenhouse gas emissions by 2050 in contrast to the Government's goal of carbon neutrality;
be fiscally neutral so that any indirect 'gains' to the Government from its State Owned Enterprises will counter other ETS liabilities encountered by ETS consumers and taxpayer;
introduce an ETS by 1 January 2010 after further research and be closely aligned to the planned Australian Carbon Pollution Reduction Scheme to facilitate common compliance regimes and tradability;
encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encouraging major industries like cement, steel, aluminium and agricultural products to progressively relocate offshore:

National argue the incentives should be for industries to be located globally where they will be most efficient to drive investment in new technologies that will minimise emissions. For example, New Zealand produces aluminium and dairy products that have fewer emissions than those from competitor countries, and to inadvertently shift new or existing production offshore is doing nothing for the global climate;

recognise the importance of small and medium enterprise to New Zealand and not discriminate against them in allocating emissions permits. For example, National would allow small and medium-sized businesses to get involved in the ETS (if they choose to do so) by lowering, or removing, the 50,000 tonne threshold currently proposed; and
have a more flexible plan for the phasing out of free allocation of emission units to business sectors so that it reduces the allocations to industry in line with New Zealand's major trading partners.

Major Sector Issues

National considers that the legislation will have a major impact on a number of sectors and it proposes the following amendments:

Agriculture

National does not believe the agricultural sector can or should be excluded from the legislation, as it is such a large contributor to New Zealand's emissions. However, the ETS must provide incentives to lower emissions.
The most important priority for addressing methane emissions is in boosting the research and development effort in respect of these emissions from farm animals.
The second priority must be in providing incentives for farmers to reduce nitrous oxide, which accounts for 20% of farm emissions. National aims to work with the agricultural sector to explore options, including the earlier entry of nitrous oxide to the scheme, so as to encourage better use of modern fertiliser technologies that are available and would reduce emissions.

Forestry

The current scheme is the first internationally that attempts to include forestry which is one of New Zealand's critical exporting industries and has enormous potential to contribute positively to New Zealand's carbon balance. National considers there is an urgent need for a fresh process of engagement with the forestry sector to develop a far more sound and practical approach to greenhouse gas emissions and plantation forestry.
National has concerns over the artificial distinction between pre-1990 and post-1990 forests which have different financial implications for landowners.
National proposes to introduce a forestry offset scheme for forest owners so that they can change land use to more profitable uses such as dairy farming or urbanisation without paying significant penalties. An offset scheme would enable forest owners to deforest existing forest land, but then plant the same number of trees, or more, on another block of land more suitable for forestry.
National considers that there is also a problem in selling the large numbers of forestry units internationally in respect of the Kyoto Protocol's Commitment Period Reserve that requires New Zealand to hold a minimum of 90% of our Assigned Amount Units in our registry.

Fishing

National is concerned about the fishing industry's exposure under the ETS as no other country is currently imposing ETS costs on their fishing industry. For example, New Zealand's fishing industry exports 92% of its output, earning $1.3 billion per annum. It is an energy intensive sector with fuel making up around 40% of the operating costs of vessels.

National aims to provide assistance to the fishing industry by grand-parenting emissions at 90% of 2005 emission levels (similar to other commercial sectors receiving assistance).

Refrigeration and Air Conditioning Industry

National is concerned about the implications on New Zealand's refrigeration and air conditioning industry through the provisions that include the refrigeration chemicals HFCs and PFCs. These gases make up 1% of New Zealand's greenhouse gas emissions.
The "all gases, all sectors" approach should not be a mantra that overrides a focus on outcomes. This sector has proved that the collection approach can work successfully with its responsible approach to ozone depleting chemicals. National believes that if this small sector can show it can better manage emissions of these gases at less cost through its alternative approach, they should be given the opportunity to do so before being included in the ETS in 2013.

Thermal Generation

National would remove the 10 year thermal electricity generation restriction and amend the distinction between new power stations being either base load or peak load.
Amendments would incentivise renewable energy over thermal generation through a price signal in the ETS. National advocates that the electricity sector should be the first sector to be introduced to an ETS as it would provide a signal every day to favour renewable energy over thermal generation, and not just when building. It avoids the artificial distinctions between peak and base load stations. Therefore, the ETS will encourage substitution for more efficient thermal generation where possible, and for the earlier retirement of old technology.
Finally, National supports the 90% renewable energy target.

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Top-up contributions not allowed

The High Court in Domain Nominee Limited v Auckland City Council recently confirmed that development contributions under the Local Government Act 1974 ("LGA") cannot be levied on top of financial contributions under the Resource Management Act 1991 for the same works. While the case arose in the context of the Auckland City transitional provisions for development contributions, the principles apply to any development contribution policy.

In 2004, Domain Nominee was granted resource consent for a residential development in Parnell, Auckland. The consent imposed conditions requiring a financial contribution of land and cash for open space in accordance with the rules of the district plan. Later, Domain Nominee sought a subdivision consent related to the same development. By then, the Council had adopted a Development Contributions Policy which included provision for development contributions for open space. Perhaps unsurprisingly, the development contribution for open space was higher than the financial contribution for open space and the Council sought payment of the difference of almost $250,000.

The High Court was required to interpret s200 of the LGA, which provides that development contributions cannot be levied "if, and to the extent that" a financial contribution has been levied on the same development for the same purpose. The Council argued that s200 does not prevent "top up" development contributions being levied, provided that any top up amount went beyond "the extent" of the financial contributions levy. In contrast, Domain Nominee argued that s200 prevents such top up contributions as the financial and development contributions were for the same purpose, and Councils may only levy development contributions on the same development for a different purpose.

The Court summarised the legislative background, quoting passages from an earlier case on development contributions, Neil Construction Limited v North Shore City Council. The Court confirmed that for financial contribution to be imposed:

the contribution must relate to the effects of a particular development;
there must be a clear causal nexus between that development and demand generated for infrastructure to be funded; and
consent conditions can be subject of objection or appeal to the Environment Court.

The High Court observed that the development contribution provisions in the LGA were included to provide for funding on a more "district-wide" basis, and to give greater certainty to Councils over quantum and timing once policies are adopted. An important part of this is that there are no rights of appeal over individual development contributions levied (only judicial review is available).

The High Court identified a number of difficulties with the Council's interpretation of s200:

If part of the financial contribution was in the form of land, how and at what date was the land to be valued for the purposes of calculating the top up development contribution?
There are different statutory processes for development contributions and financial contributions, and different procedures involved in challenging them. If a developer was successful in reducing a financial contribution on appeal, it might simply face the imposition of a top up development contribution.
The Council's argument that inequity might arise between developers based on when consent was sought, fails to take into account the fact that it had the benefit of those funds for the intervening period.

Ultimately, while recognising "ambiguity" in the language of the LGA, the High Court supported Domain Nominee's contention that the words "if, and to the extent that" in s200 do not enable Councils to impose development contributions to top up previously levied financial contributions - if s200 was intended to impose both a financial contribution and development contribution on the same development and for the same purpose, the section should have clearly expressed that intention.

The High Court's decision will be welcomed by developers seeking certainty over the level of contribution expected in respect of their developments. It is also a further reminder to Councils of the need to be robust in the setting and application of its development contribution policies.

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Taking care of business

The Court of Appeal in Bella Vista Resort Limited v Western Bay of Plenty District Council [2007] 3 NZLR 429 has recently confirmed the Council's responsibilities to applicants for resource consents. The case is a warning for applicants to take their own professional advice and form their own views on matters, even where Council officers offer advice as to an appropriate course of action.

The Hofmanns, shareholders of a company called Bella Vista Resort Limited, sought and were granted resource consent on a non-notified basis and obtained approval from their neighbours to construct and operate a lodge and restaurant. The Hofmanns subsequently sought permission to vary the consent and construct a separate conference facility. On the advice of a Council officer they were granted a variation to the resource consent to construct a separate conference facility building without being required to obtain further neighbour approvals. Bella Vista then purchased the property and business from the Hoffmans.

The neighbours successfully judicially reviewed the granting of the consent and variation, as their written approvals had been for an exclusive home stay and restaurant and not for a fully fledged conference centre. Works were stopped and Bella Vista commenced proceedings in negligence against the Council, on the basis that the Council owed a duty of care to all persons who relied on either the consent or the variation or both. The claim addressed only the decision making of the Council in relation to its statutory functions associated with the issuing of the consent and variation.

The Court of Appeal was required to examine the basic requirements for negligence, being the existence of a "duty of care". For a duty of care to exist there must be a necessary degree of proximity between the parties, and the Court examined a number of old authorities addressing the question of proximity between a Council and third parties. The Court of Appeal confirmed the case of Morrison as the "controlling authority", which found the necessary degree of proximity between a Council and an applicant but that due to overwhelming policy considerations a duty of care could not be established.

The majority of the Court of Appeal confirmed that the question of whether Councils making decisions on resource management issues owed landowners a duty of care was fundamentally a question of policy. The Court found that Councils, as statutory bodies administering district plans, are constantly exercising judgement - and there is a heavy overlay of policy considerations which require evaluation and determination. It would be unduly restrictive and create unnecessary delays if Council officers felt that they had to look behind information that was provided to them by applicants when acting in their quasi-judicial role. The Court believed that if Councils were found to owe a duty of care to applicants it would reduce the amount of non-notified applications that were accepted and informal dialogue between Council officers and applicants to rework applications would become impossible. If a duty of care was imposed the majority feared that Council officers would become defensive in their role, which would not be in the public interest.

The Court also recognised a potential "floodgates" problem and that it would be difficult to justify not extending the duty of care to decisions made by officials under other legislation. (Although, William Young P expressed doubt about the validity of the concerns of local authorities becoming inappropriately cautious in their decision making without evidence.) The availability of alternative remedies to Bella Vista was also a factor in dismissing the appeal. Bella Vista could have appealed the judicial review decision overturning its consent, reapplied for resource consent on a notified basis, or potentially taken action against their advisors.

Applicants for resource consent should ensure that they get sound expert advice from lawyers or other professionals when preparing applications and making decisions on strategy (such as to seek non-notification). It is unlikely that a Council will be found negligent for giving poor advice in respect of such decisions.

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National Environmental Standard for Telecommunication Facilities

On 9 October 2008, the National Environmental Standard ("NES") for Telecommunication Facilities came into force. NES enable central government to nationally prescribe environmental standards.

Essentially, the NES for Telecommunication Facilities states that:

an activity (e.g. mobile phone transmitter) that emits radio-frequency fields is a permitted activity provided it complies with the existing New Zealand Standard (NZS2772.1:1999 Radio-frequency Fields Part 1: Maximum Exposure Levels 3kHz-300GHz);
the installation of telecommunications equipment cabinets along roads or in the road reserve is a permitted activity, subject to specified limitations on the size and location of the cabinets;
noise from telecommunications equipment cabinets located alongside roads or in the road reserve is a permitted activity, subject to specified noise limits;
the installation of masts and antennaes on existing structures alongside roads or in the road reserve is a permitted activity, subject to specified limitations to height and size.

The NES are regulations made under the RMA. Activities that do not qualify as permitted activities under the Resource Management (National Environmental Standards for Telecommunication Facilities) Regulations 2008will continue to be managed by local councils through the existing rules in their district plans under the RMA. However, these regulations will substitute existing district plan rules that address the same subject material.

The Telecommunication Facilities NES joins existing NES for Air Quality and Human Drinking Water. Also in the pipeline are NES relating to water takes, electricity transmission, on-site wastewater systems and contaminated land.

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Walking Access Act 2008

The Walking Access Act 2008 ("Act") came into effect on 30 September 2008. The purpose of the Act is:

to provide the New Zealand public with free, certain, enduring, and practical walking access to the outdoors (including around the coast and lakes, along rivers, and to public resources) so that the public can enjoy the outdoors; and
to establish the New Zealand Walking Access Commission ("Commission"), which will provide a central point for the coordination of all walking access in New Zealand.

Under the Act, the Commission will:

lead and support the negotiation, establishment, maintenance, and improvement of walking access over public and private land;
provide information and advice on walking access routes;
develop a national strategy;
develop a code of responsible conduct;
negotiate new walking access across private land; and
facilitate the resolution of disputes relating to walking access.

Further, if the Commission considers that all or part of any public land should be made available for use as a walkway, it may propose to declare it such. In doing so, it must obtain the written consent of the administering authority of the land. Conversely, if the Commission considers that private land should be made available for use as a walkway, it may negotiate an agreement with the landowner for an easement or lease over the land, or purchase of the land. Any easement, lease or transfer of land must then be registered.

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In this edition:

National's proposed reform of the RMA

National's proposed reform of the climate change legislation

Major Sector Issues

Top-up contributions not allowed

Taking care of business

National Environmental Standard for Telecommunication Facilities

Walking Access Act 2008