Renewable Energy & Climate Change

The market for solar farms is continuing to grow in New Zealand with an increasing number of landowners being approached by solar developers. It is interesting to see the various approaches being taken by solar developers when it comes to documenting land rights with landowners (i.e. option agreement, lease and/or easement). The process for documenting a solar development stems from a Letter of Intent / Heads of Terms, to more formal binding agreements such as an Investigation License, Option to Lease and ends with a Lease or Easement. We have provided a brief summary for each document as follows: Letter of Intent (“LOI”) / Heads of Terms (“HOT”) This document sets out the key commercial terms that will form the basis of the Investigation Licence/ Option to Lease and the Lease or Easement. Generally the only binding terms of this document are terms regarding exclusivity and confidentiality. This means that the landowner cannot disclose the proposed commercial terms of the project to a third party (except for your professional advisors). The Landowner will also be prohibited to deal with any other solar developer named on the LOI / HOT for the term of the exclusivity.  Investigation Licence / Option to Lease The Investigation Licence (also referred to as an Option to Lease) grants the developer a timeframe to investigate the land, carry out their due diligence, secure finance to fund the solar project, obtain resource consent and any other required consents and obtain Overseas Investment Office approval (if applicable). Typically the Investigation Licence is granted for 3 - 4 years and the developer will pay the landowner an upfront compensation payment (in the form of a licence fee, signing bonus or other) for the right to tie up the landowners land for this period of time. The Investigation Licence will annex the form of lease which the parties will be bound by should the developer exercise an Option Notice. If the developer exercises their right to lease the land the developer will issue an ‘Option Notice’. The parties will then enter into a Lease to govern the relationship from the Lease commencement date onwards, with the developer being the tenant and the landowner being the landlord. Careful consideration needs to be taken by landowners to ensure not only legal aspects are covered but also just as important, the practical factors (ie. crop / stock compensation, access to land during calving etc).  Lease The terms for the Lease are substantially, if not completely, agreed to at the time that the Investigation Licence is entered into by the parties. The Lease will not only set out the rights and obligations of the parties relating to the land which the developer exercises its Option Notice over but it should also address the rights and obligations of the parties over the balance of the landowner’s land not subject to the Lease. These rights include whether any easements for electricity and access are required to be granted over the balance of the land for the operation of the solar development. The Lease will also likely include a clause for requiring the landowner to enter into a Tripartite Agreement (discussed further below), a CPI rent review mechanism, whether any grazing licences are to be granted over the leased area, decommission of the project, assignment and many more important provisions. Any reinstatement obligations that the developer (as tenant) is required to comply with once the Lease has ended should also be addressed within the Lease. Contrary to the above, we have seen some solar developers in New Zealand document the rights and obligations of the parties within an easement. These interests are exempt under the Overseas Investment Act 2005 if they meet the Overseas Investment Office’s (“OIO”) criteria of an easement arrangement. However the OIO has indicated that easements are not an appropriate arrangement to be used for solar farms. Tripartite Agreement One notable feature that we are increasingly seeing in solar farm leases (and sometimes even in the Investigation Licences) is the requirement for the landowner to enter into a Tripartite Agreement, also known as a Direct Agreement. These agreements involve three parties in the context of a solar farm lease, being the landowner, the developer and the developer\'s financier. The purpose of a Tripartite Agreement is to regulate the three parties in respect of the solar farm lease and record certain arrangements between them, including but not limited to the process in the event of a default under the Lease. Generally a Tripartite Agreement is a developer financier driven agreement which grants the developer\'s financier the right to step into the shoes of the developer (as tenant) and become a party to the Lease in place of the developer (as tenant). Usually this would only be in a situation when the tenant is in financial trouble or has failed to remedy a breach. The developer’s financier thereby assumes some or all of the rights and obligations under the Lease as if it were the developer. This provides security to both the landlord and the financier to the extent that in the event of a developer (as tenant) default (i.e. does not pay rent), the financier has the right to step in and remedy the breach (i.e. pay the rent) to ensure the landlord does not terminate the Lease resulting in the financier losing its significant investment in the solar development. However, the Tripartite Agreement also includes additional onerous provisions which often supersede existing Lease terms which a landlord needs to be aware of. For example the Tripartite Agreement may extend the period of time which a tenant has to remedy any breach (cure period) or prohibit the landlord from being able to terminate the Lease or suspend the performance of any of the landowner’s obligations (as landlord) unless the notice periods and obligations under the Tripartite Agreement are first complied with. If you would like to discuss any solar matters or have been approached by a solar developer please contact our Renewable Energy team.

The Government intends to introduce its second RMA amendment bill and a suite of changes to national direction to “drive economic growth and productivity”, RMA Reform Minister Chris Bishop says. Following the first RMA amendment Bill introduced to Parliament earlier this year, the next stage of the Government’s RMA reform, prior to full replacement, is aimed to be achieved by a second RMA amendment bill (RM Bill 2) and a suite of national policy changes through introduction of a ‘national direction package’. The intention is for the RM Bill 2 to be introduced to Parliament before the end of this year, and then passed into law by mid-2025.  The national direction package will follow the same timeline and this bill. The Government has divided the RM Bill 2 and the national direction package into four categories: infrastructure and energy, housing, farming and the primary sector, and emergencies and natural hazards. The reforms proposed under each topic are as follows: Infrastructure and Energy Improved delivery of renewable energy development by giving effect to National’s Electrify NZ. The Electrify NZ policy can be found here, which intends to “cut red tape to drive investment in renewable electricity generation.” A new NPS for Infrastructure which intends to ensure that resource management decisions consistently enable infrastructure to be development, operated, and maintained whilst also managing its effects on the natural environment. Amendments to the NES for Telecommunications to keep it up to date with developments and give telcos greater certainty and reduced consenting costs as they upgrade their infrastructure. Changes to the resource management system to ensure a consistent approach to quarrying. Inclusion of port operators and emergency service providers as requiring authorities. Extension of the default designation lapse period from 5 years to 10 years. Extension of the duration of port coastal permits by 20 years. Housing Delivery of the ‘first pillar’ of the Government’s Going for Housing Growth policy. We discussed this policy, and the objectives of the first pillar, in our previous article here. Development of a new NES for Minor Residential Units (i.e. granny flats). Development of a new national direction for papakāinga housing, that will require each district plan to contain provisions to enable more papakāinga housing.  Simplifying the way that heritage is managed. Farming and the Primary Sector Immediate national direction changes will be made to enable development of renewable energy, indoor primary production and greenhouses on highly productive land. We discussed the changes to the NPS on Highly Productive Land in our earlier article here. Further announcements are expected from the Government’s Agriculture and Primary Sector team on what changes will be made to this sector under this second tranche of reforms.  Minister Bishop has indicated that these will largely give effect to a collection of promises made in the National Party’s manifesto and coalition agreements. Emergencies and Natural Hazards To further develop the NPS for Natural Hazards so that it will provide a comprehensive, nationally consistent framework for addressing the risks posed by natural hazards, including increased risk from climate change. The NPS for Natural Hazards will provide direction to councils on how to identify natural hazards, assess the risk they pose and respond to that risk through planning controls. The RM Bill 2 proposes to better enable rapid responses to disasters by improving emergency provisions including a new regulation making power for emergency responses. Alongside these four packages, a range of technical changes are proposed to improve the resource management system’s coherence.  Whilst the precise form of these changes is yet to be released, what is apparent is that the coalition Government is being consistent with its position to undertake vast and quick reforms of our resource management system. Holland Beckett is experienced in providing advice to clients on the current reforms to New Zealand’s resource management system.  If you have any questions about these reforms, please feel free to contact us.

Holland Beckett is pleased to have assisted Lightsource BP and Contact Energy on the development of the Kōwhai Park solar project and reaching financial close, including property, connection agreement and construction matters. Kōwhai Park Solar Farm is located on the Christchurch International Airport Limited campus and is the first phase of the airport’s renewable energy precinct. The 168MWp solar farm will have around 300,000 panels spanning 230 hectares and will be one of New Zealand’s largest solar farms. Once operational, it will generate enough electricity to power the equivalent of approximately 36,000 homes. The Holland Beckett team was led by partners Joel Murphy and Ken Hawkes.  Other Holland Beckett team members included Montie Baskett, Emily Merrill and Giorgia Robertson.

Recent amendments to the NPS-HPL include clearing the pathway for consenting specified infrastructure, greenhouses and indoor primary production on highly productive land. There is now a clear consenting pathway for development of specified infrastructure (e.g. renewable energy), greenhouses and intensive indoor primary production on highly productive land (HPL) following recent amendments to the National Policy Statement for Highly Productive Land (NPS-HPL). We had previously discussed the issues and proposed amendments to the NPS-HPL identified by the Ministry and Minister for the Environment in a previous article from October last year (linked here). Following consultation and submitter feedback, the Minister for the Environment has this month made changes to the NPS-HPL that we anticipate will better enable development of intensive primary production, greenhouse activities, and specified infrastructure on HPL. The NPS-HPL sets strict standards for how HPL can be used and essentially provides that any use or development of HPL must be avoided unless such use or activity falls within one of the limited exceptions. After the NPS-HPL came into effect some renewable electricity generators and representatives from the food production sector raised concerns that it placed undue restrictions on development of activities that may have a need to be located on HPL. The two key issues identified by these parties were: The lack of clarity in the consenting pathway for new specified infrastructure on HPL, as notably no express provision for the construction of this type of infrastructure was provided for in the NPS-HPL. Specified infrastructure includes (but is not limited to) renewable electricity infrastructure; and The absence of a clear consenting pathway for developing and relocating intensive indoor primary production and greenhouses on HPL. The following changes have been made to the NPS-HPL to address these concerns: Amendments to cl 3.9(2)(j)(i) NPS-HPL that will better enable the development of new specified infrastructure on HPL. Clause 3.9(2)(j)(i) NPS-HPL has been varied to now provide that the development, operation or decommissioning of specified infrastructure, including (but not limited to) construction, maintenance, upgrade, expansion, replacement or removal may be undertaken on HPL if certain requirements set out in the NPS-HPL are met. Inclusion of a subclause that better enables development on HPL where such development provides for either ‘intensive indoor primary production’ or ‘greenhouse activities’ (cl 3.9(2)(aa)). Definitions for ‘intensive indoor primary production’ and ‘greenhouse activities’ are now also included in cl 1.3 NPS-HPL. These amendments provide a clear consenting pathway for development of specified infrastructure, greenhouses and intensive indoor primary production on HPL. If you have any questions regarding the NPS-HPL, or what these recent changes may mean for your or your business, please feel free to contact us.

On 7 February 2024 the Supreme Court released its decision in Smith v Fonterra and unanimously agreed to not strike out Mr Smith’s claims against seven of New Zealand’s largest green house gas (GHG) emitting companies. The threshold to strike out a claim is high and requires that there be no reasonably arguable claim.  Like any other plaintiff with a tenable claim, Mr Smith will be entitled to have his case heard. Background The case concerned claims by Mr Smith, an iwi leader and elder of Ngāpuhi and Ngāti Kahu and a climate change spokesperson for the Iwi Chairs Forum, against Fonterra, Genesis Energy, Dairy Holdings Ltd, NZ Steel Ltd, Z Energy, Channel Infrastructure and BT Mining (Respondents).  The claims asserted that the Respondents’ GHG emissions have contributed and will continue to contribute to global warming.  This has caused and will cause harm to Mr Smith, his whānau, his descendants and others. Mr Smith’s claim comprised of three causes of action: Public nuisance; Negligence; and A proposed new tort involving a duty to cease contributing to damage to the climate system. The Respondents applied to strike out Mr Smith’s proceeding on the basis that it raises no reasonably arguable cause of action. The High Court struck out Mr Smith’s claims in public nuisance and negligence in 2020, but declined to strike out his claim based on the proposed new tort.  The Court of Appeal went further and struck out all three causes of action. The Supreme Court’s decision The Supreme Court found that it was in no position to find that Mr Smith’s causes of action were untenable.  It emphasised the high threshold for a strike out application noting that “pre-emptive elimination of proceedings is only appropriate where it can be said that whatever the facts proved, or arguments and policy considerations advanced at trial, a case is bound to fail”. The common law has not previously grappled with a crisis as all-embracing as climate change.  However, the Supreme Court stated that this area of common law must develop “in the fertile field of trial, not on the barren rocks of a strike out application”. Can Tikanga inform the formulation of tort claims? Mr Smith claims, in accordance with tikanga, a whakapapa (genealogical) and whanaungatanga (kinship) relationship to the whenua (land), wai (fresh water) and moana (sea) around his land.  His claim is that the respondents contributed to climate change effects that caused and will cause ongoing injury to the customary, cultural, historical, spiritual and nutritional values associated with these places.  His tikanga based connection with these places provides the foundation for the claim that an injury to place is also an injury to himself, his whānau and descendants. The Supreme Court stated that whatever the cause of action, the trial court will need to grapple with the fact that Mr Smith purports to bring proceedings not merely as an alleged proprietor who has suffered loss, but also as a kaitiaki acting on behalf of the whenua, wai and moana.  It must consider some tikanga concepts of loss that are neither physical nor economic. Addressing and assessing matters of tikanga simply cannot be avoided. Mr Smith’s case can now proceed to a full trial in the High Court.

Last year, the New Zealand Emissions Trading Scheme (ETS) was brought under the spotlight after a High Court hearing and Labour government led review. We have previously explained the ETS here.  The ETS is governed by the Climate Change Response Act 2002 (the Act), putting a price on carbon emissions which certain industries must participate in.  Every tonne of carbon emissions costs a credit, called a New Zealand unit (NZU).  Participants who are emitters need to buy and surrender NZUs to the government to account for their emissions.  NZUs can be invested or traded on the NZ ETS market.  In 2021, auctioning was introduced where the Government sells NZUs to successful bidders. Auctioning allows the government to control the supply of NZUs, and therefore the emissions of participants, to meet its emissions reductions plan. The plan outlines the strategies and policies intended to achieve the emissions budget for 2022-2025.  Five year emissions budgets are mandated by the Act to assist New Zealand’s overall goal of net-zero greenhouse gas emissions by 2025. The Climate Change Commission’s advice regarding Amendment Regulations to the Act in July 2022 recommended allowing NZU prices to increase, and to maintain consistency with the emissions reductions plan. The Labour government declined to follow this advice in the Climate Change (Auction, Limits, and Price Control for Units) Amendment Regulations 2022, instead depressing the market, by artificially reducing the price of NZUs in the emissions reduction plan, leading to plummeting NZU prices and a judicial review. On 13 July 2023, the High Court found that Minister for Climate Change James Shaw made an error with his recommendations concerning the unit level and price control settings for 2023-2027 adopted in the Amendment Regulations.  The Minister admitted not complying with the relevant requirements.  The settings favoured by Cabinet did not accord with the 2025 target, and did not accord with or justifiably deviate from the emissions budgets and New Zealand’s contribution under the Paris Agreement.  The Minister was directed to reconsider the decision. Around this time, the Labour government launched a review of the ETS on 19 June 2023.  A summary of that review can be found here.  There was consideration given to forestry restrictions, to drive up the price of NZUs, creating uncertainty in the future of the forestry market. The Government failed to sell the 15 million NZUs it made available during the four ETS auctions in 2023, as the clearing price was not reached.  The units were consequently removed from the market.  The failure to clear was largely due to the significant excess of units currently in circulation. On 6 December 2023, the day of the final auction of 2023, the honourable Minister Simon Watts put out a press release.  He said that the  new coalition government is scrapping Labour’s ETS Review. They want a “strong and stable” ETS that gives “businesses certainty and confidence”. The Minister held these as the reasons of the NZU auction failure.  There was no suggestion of another review. On 12 December 2023, the Minister put out a second press release.  The Government is considering a report from the Climate Change Commission as they prepare a second emissions reduction plan and have started “work on doubling renewable energy production”. What does that mean for forestry? Our current Government’s focus on “certainty” and “business” implies no significant changes will be made to the ETS in relation to forestry for the foreseeable future (presumably, within the next three years at least).  Renewable energy seems to be the new government’s vehicle on the path to solving issues with the ETS. Forestry investors, and relevant stakeholders, can put to rest any concerns related to Labour’s review.  It appears as though forestry is not a key focus that the current Government has in relation to the ETS.  For now, all obligations and legal implications around carbon credits and offsetting remain unchanged.  If you have any questions around these obligations, please contact our expert team here.

The Emissions Trading Scheme (ETS) is an extensive and complicated system with an increasing media presence in climate change related topics. The most recent example being a judicial review filed 9 May 2023 by Lawyers for Climate Action against the cabinet decision made by Minister for Climate Change James Shaw on the ETS. But what is the ETS? Below we provide a breakdown of what the ETS is. The ETS framework The ETS was implemented under the Climate Change Response Act 2002 as a key tool for ensuring that New Zealand meets its domestic and international climate change targets set by the United Nations Convention on Climate Change via the Paris Agreement. The ETS is used as a tool in New Zealand’s emissions reduction plan and its related emissions budget to help NZ meet its net zero greenhouse gas emissions by 2050 (other than for biogenic methane ie. livestock emissions). The ETS regulates the following greenhouse gases: carbon dioxide, methane, nitrous oxide, any hydrofluorocarbon, any perfluorocarbon, and sulphur hexafluoride. The sectors involved in the ETS include forestry, waste, agriculture, synthetic gases, industrial processes, liquid fossil fuel (this includes transport), and stationary energy. It is mandatory or voluntary to join the ETS depending on whether or not an owner or operator satisfies the criteria set out in the Climate Change Response Act 2002. Those who join the ETS are called a “participant”. The functions of the ETS are controlled by the Environmental Protection Authority (EPA). This includes maintaining the ETS Registry, which is publicly available and can be found here. Changes to the ETS can be made by the Ministry for the Environment or the Minister of Climate Change. This depends on what amendments are to be made eg. the Minister of Climate Change updates the price controls of the ETS based on advice provided by the Climate Change Commission. New Zealand Units New Zealand Units (NZUs) are an NZ currency created by the ETS to charge participants for emitting carbon dioxide or greenhouse gases. One NZU is equivalent to one metric tonne of carbon dioxide (or equivalent greenhouse gas) emitted. NZUs can be auctioned, purchased directly from the Government, allocated by the Government (this helps participants meet their obligations) or gifted by the Government for performing activities that remove greenhouse gases from the atmosphere. The NZU market is like a stock market in the sense that the price of an NZU varies depending on how many units are available in the market and current events such as weather events. However, there is an upper and lower limit on the price of an NZU. If one of these limits is reached then either more NZUs are released into the market, or NZUs are removed from the market to stabilise the price. As of publication, the price of one NZU is $52.00. ETS Registry The ETS Registry is like a bank account for holding NZUs. Participants must register with the Registry in order to report and surrender NZUs as part of their ETS obligations. Participants can also trade NZUs between participants through the Registry. However the Registry does not provide a mechanism to cash out NZUs. As part of a participants surrendering obligations, a participant will need to earn or buy NZUs throughout their industries reporting period. Then when it is time for a participant to meet their surrendering obligations, the participant will surrender NZU’s to the EPA that is equivalent to the emissions that the participant released in that reporting period. For example, if a participant released 20 tonnes of greenhouse gas in a reporting period, they will be required to pay 20 NZUs. All sectors have surrendering obligations except for the agriculture industry but, a pricing mechanism is under development for the agriculture industry through He Waka Eke Noa. The Registry used to hold international units from offshore initiatives called ‘Kyoto units’ but as of 2015 these units are no longer permitted in the NZ ETS. Please get in touch if you would like to discuss more about the ETS and how it could affect your business.

New Zealand is currently seeing another boom in the renewable energy sector but this time in the form of large scale solar farms. There is currently a land grab of existing dairy and grazing farms by national and international solar developers. This is partly due to the high New Zealand wholesale price of electricity and the New Zealand government setting a target of 100% renewable power generation by 2030. This is further compounded by the push for electrification of historical technology and the demand for EV vehicles. There are some significant benefits to landowners converting from existing farm activities to solar, including the security of long term leases with lucrative rentals. In addition to the lucrative leases, there is an opportunity for the landowners to graze sheep on the solar farm and receive an additional return. Conversely, there are some significant risks involved which landowners need to be made aware of, including the likeliness of the landowner not being able to return the land back to dairy farming at the expiry of the lease. We are seeing various approaches by developers in the documentation of solar farms in New Zealand. Generally, the solar project will initially be documented with a letter of intent / memorandum of understanding between the developer and landowner. This is then progressed to an investigation licence and option to lease (Option) or agreement to lease. The Option will usually include a payment for signing and a per hectare rate during the Option term. It will also include the developers conditions which would typically include due diligence, Overseas Investment Office (OIO) consent and sometimes a subdivision consent to enable a longer lease than permitted under the Resource Management Act (depending on the developer). The Option is negotiated side by side with the lease itself. We are also seeing some developers proposing easements in substitution of the more commonly used lease. When acting for a landowner, there are some really important questions / points which need to be addressed, including: Is the structure of the documentation fit for purpose? The lease and timing of existing leases in place; Rental (per hectare rate or linked to a percent of electricity generation). Rent reviews, which will generally be annual CPI / PPI increases and ratcheted. Understanding whether the permitted use is adequate for all intended purposes. The developer’s obligations (including maintenance). Whether a security bond for decommissioning the solar farm is being provided. Assignment and whether the developer can assign to a third party (ie. an investor / purchaser of the project ) with or without the landowners consent. Whether a Tripartite Agreement is required to be entered by the landowner, developer and the developer’s financier. Reinstatement obligations. Health and safety obligations. Landowner grazing rights. Termination rights (including early termination rights of the developer). Force majeure (unforeseen circumstances that prevent a party from fulfilling its obligations). If you have been approached by a developer or would like to understand more about large scale solar farming, Joel Murphy has first-hand solar development experience working in London for one of the world\'s largest solar developers and has negotiated multiple large scale solar farms throughout New Zealand for landowners. Please get in touch to discuss any solar matters.

The Spatial Planning Bill (SPB) is New Zealand’s first formal framework for spatial planning and requires central government, local government and Māori to work together as a regional planning committee (RPC) to develop a regional spatial strategy (RSS). As an overview, the SPB works in tandem with the Natural and Built Environment Bill (NBE Bill) to create a single integrated system with shared definitions, outcomes, functions, and processes. The SPB integrates the functions of the NBE Bill, Land Transport Management Act 2003, and the Local Government Act 2002 to develop long-term RSS that set out a vision and objectives for regional development to occur over at least a 30-year-plus time frame across New Zealand. Regional Spatial Strategy A RSS is the integration of multiple local government planning documents into one planning document that provides a vision and objectives for regional development over a 30 year time-frame, sets out priority actions to achieve those visions and objectives, and provides strategic direction to the RPC on various matters including what areas are suitable for a range of purposes. Accompanying the RSS will be an implementation plan and possibly an implementation agreement which will all primarily be developed by the RPC. The RSS must be consistent with, or give effect to the National Planning Framework under the NBE Bill. Each geographic region will have one RSS, eg. Bay of Plenty, which will be reviewed by the RPC every nine years or in certain circumstances such as significant change in the region. Accompanying the RSS will be an implementation plan which sets out how priority actions in the RSS will be undertaken and monitored. The implementation plan must be adopted within six months after adopting a RSS and must be reviewed every three years, or when there is a significant change to the RSS. An implementation agreement may accompany the RSS and implementation plan by setting out a programme of activities that parties such as central or local government intend to carry out to deliver or regulate a priority action from the RSS. An implementation agreement is not enforceable, and must be entered into by two or more people who have a role in the delivery or regulation of a priority action. Regional Planning Committee The RPC’s role is to develop their region’s RSS and will consist of a minimum of six members from; local government, local hapū, iwi and Māori (minimum of two), and central government. Community and key sector group involvement and engagement will be developed by each RPC. The SPB sets out a step by step process for the development of an RSS with an emphasis on transparency between the RPC and the RSS eg. the RPC must publicly release how they reached their decision and what information they relied on. There is also the introduction of early engagement with interested parties (ie. private infrastructure providers and operators, non-government organisations, government organisation etc.) and the public on what the RSS should cover and what key issues and opportunities the RSS should focus on. The RPC must follow various conditions when developing the RSS such as producing draft reports which are released to the public to show what has gone into developing the RSS. What the RPC must have regard to, or particular regard to is similar to what is currently required to develop current local planning documents, eg. relevant Government policy statements, but there are new matters that the RPC must not have regard to including effects on scenic views from private properties or land transport assets that are not stopping places, or effects on the visibility of commercial signage or advertising. Once the drafting of the RSS is completed, the RSS will be notified for public submissions and amendments will subsequently be made based on feedback. Submissions on the SPB are open until 5 February 2023. Please get in touch if you would like to discuss the SPB or make a submission.

The Natural and Built Environment Bill (NBE Bill) has introduced provisions into the NBE Bill to clarify and improve the management of contaminated land, and introduces a framework for the polluter pays principle. In the Resource Management Act 1991 (RMA) there are no sections that regulate contaminated land. Instead regulations for contaminated land are located in the Resource Management (National Environmental Standard for Assessing and Managing Contaminants in Soil to Protect Human Health) Regulations 2011 (NES). The NES works in conjunction with the Hazardous Activities and Industries List (HAIL) to identify and manage the use of contaminated land. HAIL is used by local authorities to identify potentially contaminated sites via a list that identifies industries and activities that typically cause contamination. HAIL will be retained and the NES is likely to be retained. Contaminated Land The NBE Bill defines contaminated land as land where a contaminant is present in any physical state in, on, or under the land, and in concentrations that exceeds an environmental limit (which have not yet been set), or pose an unacceptable risk to human health or the environment. This is significantly different to the RMA definition of contaminated land. The RMA defines contaminated land as land that has hazardous substances in or on it that has significant adverse effects on the environment, or is reasonably likely to have significant adverse effects on the environment. The three key differences between the two definitions are: The NBE Bill definition includes contaminants that are under the land; The NBE Bill definition uses standards that could lead to a broader identification of contaminated land; and The use of ‘contaminants’ instead of ‘hazardous substances’ could also broaden what substances could be identified as contaminating/having contaminated the land. Landowner Duties Under the NBE Bill landowners will be required to notify the relevant regional council of their activity or industry listed HAIL activity, notify and provide the relevant regional council with any reports of environmental investigation, and comply with regulations e.g. regional plans. If contamination occurs on the land it is to be managed, investigated and monitored to ensure it does not exceed environmental limits, and does not pose an unacceptable risk to human health or the environment. These new duties on landowners will likely mean that landowners will need to exercise greater due diligence when buying land, and when owning land. Council Duties Regional councils’ duties under the NBE Bill are the same as per the NES (eg. identify HAIL land), but the NBE Bill does require that the HAIL register is to be publicly available and is to include information on the nature, extent and severity of contamination found on the contaminated land. Regional councils are to help landowners and inform them of their duties. Territorial authorities’ duties have been altered to require that the territorial authority consider the effects (environmental effects and if the proposal will benefit the environment) that a proposed development or other activities could have on contaminated land. Territorial authorities must also control the use and development of contaminated land to prevent any adverse effects or likely adverse effects to human health or the environment that result from the proposed development, subdivision, or land use; and mitigate those adverse effects. Polluter Pays Principle The polluter pays principle means that those who produce pollution should bear the costs of managing it to prevent damage to human health and the environment. A polluter means a person who has directly or indirectly, or through neglect or wilful inactivity, caused or allowed a discharge of a contaminant into the environment. The EPA will enforce this principle in consultation with the local authority. The EPA can require that a polluter’s actions are to be prevented, or that the polluter remedy the pollution that causes adverse effects to the environment, or harms human health and the environment. Local authorities will execute enforcement orders as per the compliance and enforcement sections of the NBE Bill. Costs are to be determined as the actual and reasonable costs that the authority or EPA has incurred in taking action. If the EPA is unable to recover costs from the polluter, then the EPA can recover costs from the local authority. It is currently unclear how the polluter pays principle will work in practice. Issues are likely to arise when it comes to establishing the polluter, or when payment is required for polluting. Submissions on the NBE Bill are open until 5 February 2023. Please get in touch if you would like to discuss the NBE Bill or make a submission.

It’s just on two weeks since the new RMA was revealed with the introduction of the Natural and Built Environment Bill (NBA). An early look at consenting regimes under the NBA indicates that while some aspects are similar to the RMA, some aspects are very different. We highlight some of these differences below. Activity status – reduced from 6 to 4 The categories of resource consent activity status are reduced from 6 to 4 (to permitted, controlled, discretionary, and prohibited) which sees the removal of restricted discretionary and non-complying activities. However, there is a change to controlled activities, as there is a limited discretion to decline resource consent for controlled activities in accordance with the relevant provisions of the National Planning Framework (NPF) or Natural and Built Environment Plans (NBE Plans) (whichever applies) and the limited discretion conferred by those provisions. Notification Questions of notification will only fall to the consent authority if the NPF or NBE Plan do not cover notification. The presumptions are that For discretionary activities, there will be public notification unless the NPF or NBE Plan state that no public/limited notification is required. For controlled activities, there will be no public notification unless the NPF or NBE Plan state otherwise. That said, the notification tests appear on their face to remain complex and open to litigation. Under the NBA however, notification challenges can be heard by the Environment Court rather than having to go to the High Court as is currently the case. Decision making Proposed s223 of the NBA is similar in structure to s104 of the RMA but there are some key differences. For example, the NBA section is not subject to the purpose of the NBA, which is no doubt designed to avoid the interpretive issues caused by making s 104 of the RMA “subject to Part 2”. In terms of new considerations, the NBA brings in: The likely state of the future environment as specified in an NBE Plan, a RSS, or the NPF; Any prior non-compliance by the applicant and for which enforcement action has been taken under the NBA. The NBA specifically provides that decision makers must not have regard to: Any effect on scenic views from private properties or land transport assets that are not stopping places; Any adverse effect arising from the use of the land by people on low incomes, people with special housing needs, or people whose disabilities mean they need support or supervision in their housing. It looks like the latter clause would have ruled out the ability of the Rotorua community to oppose the emergency housing resource consent applications by the Ministry of Housing and Urban Development which has featured heavily in the news in recent weeks and is awaiting a decision before the end of 2023. Consent duration The standard consent duration provision in the NBA is similar to the status quo – providing for a maximum term of 35 years. However there are some very notable exceptions to this. There is a maximum 10 year duration for water related activities (water permits, discharge permits). There are two ways around this: This presumption can be amended through an NBE Plan update; or If certain provisos are met, some activities can access longer consent terms. The applicant must seek a longer term in its resource consent application, and qualify as an activity which can access the longer consent term. An example of an activity listed for this is the construction, upgrading or maintenance of state highways. Other consent processes The NBA carries over consent processes for direct referral and proposals for national significance. It also carries fast-track consenting into the NBA, but provides a list of what projects can access fast-track consenting. Those projects must still apply for approval for fast tracking so access to a fast-tracked process is not automatic. Transitional provisions Unfortunately, it looks as though not all relevant provisions are included in the NBA. The Ministry for the Environment’s ‘Overview’ document released with the NBA states that shorter-term consents will be issued under the RMA for freshwater takes and discharges during transition to the NBA - these consents must expire within three years of the relevant NBE Plan being notified. It also states that many detailed commencement, savings and transitional provisions are not included in the NBA. It remains to be seen how those provisions will be articulated so that the public can comment on them, particularly given the short timeframe for submissions which has now been set – these close on 5 February 2023. Please get in touch if you would like to discuss the NBA or make a submission.

The Natural and Built Environment Bill (NBA) heralds the end of a traditional first-in first-served approach to resource allocation, particularly in respect of freshwater. The NBA introduces three resource allocation ‘principles’ – which are sustainability, equity, and efficiency. The National Planning Framework (NPF) can give further detail on the meaning of these principles, and they are a consideration when making directions concerning allocation in the NPF. Regional planning committees must also have regard to the resource allocation principles when making allocation rules in the Natural and Built Environment Plans (NBE Plans). In general terms, the NPF can give direction on allocation matters, including methods for allocating natural resources such as by consensus, the standard consenting process, the affected application process, auction or tender. Of these, most are self-explanatory in meaning, although consensus is not explained (as between whom), and the “affected applications process” sounds like a reference to ‘affected persons’. The affected applications process is in fact a process which enables a comparative merits based assessment of competing applications. In these cases, the value of the investment of the existing consent holder is not a consideration for decision makers when considering applications to renew resource consents, and the priority renewal provisions will not apply. Freshwater specifically With respect to freshwater specifically there are further provisions to be aware of: A Freshwater Working Group is to be established to make recommendations on freshwater allocation (including engagement between the Crown and iwi/hapū). It is to report to the Minister for the Environment by 31 October 2024 who must then present a response to the House of Representatives within 6 months. This process may lead to an allocation statement on issues relevant to the allocation of freshwater if agreed between the Minister and relevant iwi/hapū. This can happen at varying spatial levels, and will inform the relevant NBE Plan. The NPF must not use a market-based allocation method for the taking, diversion or use of freshwater. The NBE Plan must include 1 or more allocation methods for the taking, diversion or use of freshwater (and anything else the NPF directs). Provision is made for shorter term freshwater consents so as to create greater opportunity for NBE Plans to effect change. The allocation provisions are designed to assist Māori and others with underdeveloped land to access water. Issues regarding Māori rights and interests in freshwater remain live and are not affected. In what seems a novel statutory drafting technique, the NBA states that “any rights or interests in freshwater or geothermal resources are preserved, consistent with assurances given by the Crown to the High Court in 2012, and recorded in New Zealand Māori Council v Attorney-General [2013] NZSC 6, [2013] 3 NZLR 31 at [145]”. The Ministry for the Environment’s ‘Overview’ document released with the NBA states that shorter-term consents will be issued under the RMA for freshwater takes and discharges during transition to the NBA - these consents must expire within three years of the relevant NBE Plan being notified. These transitional provisions are presumably designed to integrate with the above allocation matters relating to freshwater. The Overview also states that many detailed commencement, savings and transitional provisions are not included in the NBA, so those with freshwater takes will need to stay abreast of developments affecting freshwater consents and allocation. Submissions on the NBA are open until 5 February 2023. Please get in touch if you would like to discuss the NBA or make a submission.

After much anticipation, the Government has now unveiled two of the three new replacements to the Resource Management Act 1991 (RMA)- the Spatial Planning Act (currently the Spatial Planning Bill) (SPA); and - the Natural and Built Environment Act (currently the Natural and Built Environment Bill) (NBA)). The third bill is the Climate Adaptation Act which will be introduced to Parliament at a later date and is expected to become law in 2024. The NBA is the core piece of legislation and will work in tandem with the SPA as a single integrated system with shared definitions, outcomes, functions, and processes. We set out some of the key system changes below. Natural and Built Environment Act The NBA bill updates the RMA’s sustainable management purpose by replacing it with two limbs – the first is about the way that use, development and protection of the environment is enabled (including in a way that complies with environmental limits and targets), and the second is to recognise and uphold te Oranga o te Taiao. Te Oranga o te Taiao is a te ao Māori concept that is defined as: the health of the natural environment; and the essential relationship between the health of the natural environment and its capacity to sustain life; and the interconnectedness of all parts of the environment; and the intrinsic relationship between iwi and hapū and te Taia. The lists of matters in ss 6 and 7 of the RMA are gone and replaced with a list of decision-making principles and system outcomes, which are intended to shift the focus from managing adverse effects to promoting positive outcomes. As there is no hierarchy between outcomes, this leaves decision-makers to determine how they are to be implemented and could lead to the familiar dilemma in how to balance competing priorities. The avoid, remedy, mitigate direction has been replaced with a direction to avoid, minimise, remedy, offset, or provide redress, along with introducing an effects management framework in the legislation for some situations. The concept of “trivial” effects has also been introduced – adverse effects are defined to exclude trivial effects, and activities creating more than trivial adverse effects on specified nationally important places or highly vulnerable biodiversity areas can only be considered for approval if an exemption applies. The NBA Bill elevates the importance of te Tiriti o Waitangi by replacing the “take into account” direction in the RMA with a “give effect to” direction. It introduces a National Planning Framework (NPF), which will consolidate existing national direction, as well as some new functions. It is intended to provide directions on the integrated management of the environment, and will be rolled out in stages. The first stage will be to transition the policy intent of existing national direction (including the national policy statements for freshwater management and highly productive land), along with the medium density residential standards introduced in 2021. It will also introduce new content on infrastructure and natural hazards. Regional planning committees will be established for each region to prepare a regional spatial strategy and a natural and built environment plan – reducing the number of plans from over 100 under the RMA to 15 under the NBA. These committees will have Māori and local authority representatives, along with central government representatives in relation to regional spatial strategies. Local authorities will still implement and administer the plans, which will have a similar function to regional policy statements and regional and district plans. Local authorities will continue their role as consent authorities but the activity statuses have been reduced to permitted, controlled, discretionary and prohibited. Spatial Planning Act Regional spatial strategies will provide long-term, high level, and strategic direction for integrated spatial planning. The SPA provides for this mandatory spatial planning, along with promoting the integration of various pieces of legislation including the NBA, Local Government Act 2002 and the Land Transport Amendment Act 2003. The relationship between the NBA and SPA, along with their planning instruments, is shown as:   Transition Many detailed transitional provisions have not been included in the bills but policy decisions have been made by the Government. There will be an approximate ten year transition period until all new regional spatial strategies and natural and built environment plans are in force. During this period, new national direction under the RMA can continue to be developed, with a requirement to consider the desirability of consistency with the NBA. The RMA national direction will continue to direct RMA plans and policy statements, and transitional decision making – meaning that the freshwater planning process will continue. However, during this period shorter-term consents will be issued for freshwater takes and discharges under the RMA, which will expire within three years of the relevant NBE plan being notified. There will be some exemptions to this, including for some renewable electricity generation activities. Parts of the NBA will come on line at different times, to replace the RMA using a staged approach. A staged approach to planning is anticipated, with three regions going first to regional spatial plans followed by another group 12 months later, which will be followed by the development of natural and built environment plans. The RMA system will start dropping off as the new plans come on line. Some provisions will have immediate effect. Next Steps Once the House has debated the bills, it will decide if the bills should progress to the Select Committee stage and the public will then have an opportunity to make submissions. The Government aims to pass the bills before the end of this parliamentary term. Please get in touch to learn more about the new bills and how it could affect you or your business.

New Zealand’s first National Adaptation Plan (the Plan) has now been published. This Plan is required under the Climate Change Response Act 2002 and responds to the risks identified in the National Climate Change Risk Assessment 2020, which included risks relating to indigenous and coastal ecosystems, communities, the economy, and the built environment. At a broad level, the Plan outlines New Zealand’s long-term strategy for adapting to the effects of climate change for the 2022-2028 period. The Plan will work alongside the Emissions Reduction Plan, and together these plans manage New Zealand’s response to climate change. The Plan includes a series of objectives for addressing climate change risks, and action points to achieve those objectives. These action points are described as “critical actions”, less urgent “supporting actions”, or future work programmes and are grouped into the following broad topics: enabling better risk-informed decisions; driving climate-resilient development; adaptation options; natural environment; homes, buildings and places; infrastructure; communities; and the economy and financial systems. There are many action points contained in the Plan however some examples of the critical actions are: Develop guidance for assessing risk and impact on physical assets and the services they provide; Establish an initiative for resilient public housing; Reduce and manage the impacts of climate hazards on homes and buildings; Develop and implement the Waka Kotahi Climate Adaptation Plan; Strengthen the fisheries management system and support the aquaculture sector to sustainably grow; Deliver biosecurity actions to protect our indigenous ecosystems and economy from invasive species; and Modernise the emergency management system. Different groups have different roles to play in adapting to the effects of climate change, and the roles of central government, local government, the private sector, and individuals are discussed below. Role of central government The central government will adopt a leadership role and act in partnership with the local government. This role will include establishing regulatory and institutional settings that support adaptation, increasing the accessibility of information and data to allow others to make informed decisions on preparing for climate change effects, and managing investments and risks to its own assets such as roading, schools and hospitals. Role of local government Local government will be at the heart of risk management due to the valuable knowledge that they hold on the occurrence and effect that hazardous events have on their local area. Local government’s role will include helping their communities understand climate change and responding to issues with their community. They will need to be aware of inequity to ensure that no one particular community or demographic is at a higher risk of displacement or poor wellbeing. They also have responsibilities relating to natural hazards, civil defence and emergency management, and local planning, and will need to improve the resilience of their own infrastructure. Role of Private Sector The private sector, particularly those that own lifeline utilities or are based in the financial sector, will need to be aware of risks to their assets, portfolios and liabilities, and whether they have invested enough in resilience and adaptation to combat climate change effects. Such investment can both reduce risks, and also create new opportunities such as by benefitting from new markets and innovation. Role of individuals Individuals’ daily lives are increasingly being affected by climate change effects, such as through supply chain issues, power cuts, and evacuations. Individuals will require information to be available that outlines how climate change risks could impact them, to allow them to make informed decisions. Such decisions include creating evacuation plans and protecting their assets. In relation to protecting their homes this could mean building a seawall, placing a house on stilts, re-locating the home, or avoiding at-risk areas all together. Conclusion Climate change is a continuous process and therefore the National Adaptation Plan will be updated every six years to ensure climate change risks are being addressed. The Plan can be found here: Aotearoa New Zealand\'s first national adaptation plan | Ministry for the Environment. Please feel free to contact us if you would like to know more about the Plan and how it could affect you or your business.

The Government has recently released New Zealand’s first emissions reduction plan (the Plan), which sets out policies and strategies to meet the first emissions budget (the Budget). The Budget sets the permitted greenhouse gas emissions over a multi-year period. Each Budget will permit less annual emissions than the previous Budget, to transition towards net zero greenhouse gas emissions by 2050 (note biogenic methane is not part of that goal) and contribute to limiting global warming to 1.5°C above pre-industrial levels. The first three Budgets are: Budget 1 (2022–2025): 290 megatonnes of carbon dioxide equivalent greenhouse gasses (averages 72.5 megatonnes per year) Budget 2 (2026–2030): 305 megatonnes (averages 61 megatonnes per year) Budget 3 (2031–2035): 240 megatonnes (averages 48 megatonnes per year) Each of the transport, energy and industry, agriculture, waste, fluorinated gases, and forestry sectors will have a sub-target for emissions to ensure that the economy as a whole is on track to meet the Budget. The Plan sets policies and strategies for New Zealand’s sectors to meet the first Budget, and will be updated when each new Budget is released. The Plan contains a series of actions that span the whole economy, including: Setting emissions prices for agriculture by 2025. Reforming the resource management system. Support businesses moving to circular practices. Improving the charging infrastructure for electric vehicles. Implementing a mandate for sustainable aviation fuel. Reducing the reliance on fossil fuels. Amending the Building Code to improve building energy efficiency. Supporting afforestation. Exploring bans or limits to divert more organic waste from landfill. Requiring refrigerants to be captured and destroyed when heating and cooling systems reach the end of their life. The Government also established the Climate Emergency Response Fund (CERF) in 2021, which is funded through the Emissions Trading Scheme and used to fund projects that support climate change objectives. CERF has allocated $2.9b of spending to aid in setting up schemes that achieve the objectives of the Plan, and the transport, agriculture, forestry and energy sectors will receive the majority of the funds. $650m from the CERF will go towards the Government Investment in Decarbonising Industry (GIDI) fund, which is controlled by the Energy Efficiency and Conservation Authority and will be used to help New Zealand businesses reduce emissions. To receive GIDI funding a project must be larger than $300k, decarbonise process heat, achieve carbon emission savings and be operational by the end of 2025. One of the actions in the emissions reduction plan is to reduce emissions from the energy and industry sector, and reducing emissions at the Whakatāne Mill using the GIDI fund is included in the plan as an example. The GIDI fund was used for a new filter system in the paperboard mill, resulting in a significant reduction in emissions and waste water. The Plan can be found here: https://environment.govt.nz/publications/aotearoa-new-zealands-first-emissions-reduction-plan/. If you have any queries regarding the emission reduction plan do not hesitate to contact us.

Over the last few years, climate change events such as flooding and droughts have become more severe and impactful on New Zealander’s lives. As a response, the Government has proposed a draft national adaption plan that aims to build climate resilience over the next six years to the irreversible effects of climate change. This plan will work alongside the first emissions reduction plan set to be released on 16 May, which is less about resilience and more about reducing emissions. The national adaptation plan has three system-wide focus areas, described below. It also proposes critical actions for the natural environment (including implementing the proposed national policy statement for indigenous biodiversity); homes, buildings and places; infrastructure; communities; and the economy and financial system. Reforming institutes to be fit for a changing climate New Zealand’s systems and institutions (including legislation) were designed for a more stable climate than we are now seeing. The draft national adaptation plan identifies a series of critical actions to address this, which includes reforming the resource management system, reforming institutional arrangements for water services, and modernising the emergency management system. The reforms to make systematic changes to these areas have already begun, which aim to clarify the roles and responsibilities of local governments and communities whilst planning for climate impact and risks. Supplying data, information, tools and guidance to enable everyone to asses and reduce their own climate risks There is already extensive information on New Zealand’s changing climate. However, the current system for collecting and managing data is inconsistent, can be difficult to navigate, and needs datasets that are more specific to the information requirements of iwi, hapū and Māori. The right tools and guidance are also needed to allow this (what is often uncertain) information to be used in managing climate risks, and in investing in climate resilience. The draft national adaptation plan identifies a series of critical actions to address this, including designing and developing an Adaptation Information Portal, delivering targeted guidance, and exploring co-investment for flood protection in Westport – which has been subject to severe flooding over the last couple of years. Embed climate resilience across government strategies and policies To ensure the above changes and other future climate change solutions are implemented, they will need to be included into the Government’s work programme, including through Government investment into initiatives like the Climate Emergency Response Fund. Consultation Alongside the national adaption plan, the Ministry for the Environment is seeking feedback on its related work around managed retreat and flood insurance, which will inform the initial policy development for the Climate Adaptation Act. Consultation on the draft national adaption plan, managed retreat and flood insurance is currently open and submissions can be submitted online until 11:59pm on Friday 3 June 2022. For more information visit: https://consult.environment.govt.nz/climate/national-adaptation-plan/.

The Ministry for the Environment is consulting on four amendments to regulations that support the Emissions Trading Scheme (ETS). Climate Change (Unit Register) Regulations 2008 The current regulations allow ETS participants to exchange NZ Units (NZU) for Crown-held New Zealand Assigned Amount Units (AAU). Both NZU and AAU are carbon credits that represent one metric tonne of carbon dioxide equivalent. However, NZU are domestic carbon credits used in the NZ ETS whereas AAU are international carbon credits issued by industrialised countries to meet their emissions reduction targets under the Kyoto Protocol. Participants would exchange NZU for AAU and then cancel them, as a way to demonstrate a voluntary carbon offset. While this cancellation process is still in place in the regulations, it was never recommended for post-2020 emissions and data from the Environmental Protection Agency suggests participants are no longer using this mechanism. This is because it is no longer credible under the Paris Agreement following the introduction of new emission reduction targets. The Government therefore proposes to officially remove the cancellation process from 1 January 2023. Climate Change (Other Removal Activities) Regulations 2009 The Government is proposing to remove the eligibility criteria to receive NZU (domestic carbon credits) for destroying or exporting hydrofluorocarbons and perfluorocarbons, which are potent synthetic greenhouse gases. Hydrofluorocarbons are found in refrigerators, air conditioning units, aerosols, fire protection and foam blowing equipment, and perfluorocarbons are found in refrigeration manufacturing and aluminium smelting. Removing the eligibility criteria will encourage more participants to destroy or export these greenhouse gases, which will help New Zealand meet its international climate change obligations. Climate Change (Stationary Energy and Industrial Processes) Regulations 2009 The third proposed change is a routine (usually annual) update to the schedule of default emissions factors for natural gas fields. These emissions factors are used by ETS opt-in participants to calculate their emissions without seeking information from the gas miners. The emission factors are based on gas composition so need to be regularly updated to reflect changes in the chemistry of natural gas, and the opening of new fields. Climate Change (Liquid Fossil Fuels) Regulations 2008 ETS participants that supply or use liquid fossil fuels (such as jet fuel) are able to deduct the supply or use of biofuels (such as sustainable aviation fuel) from their emissions calculations. This is because using biofuels does not increase atmospheric greenhouse gas concentrations. However, the current regulations do not allow opt-in airline participants that purchase and supply biofuels to deduct the supply of biofuels from their emission calculations, due to the mixing and sharing of fuel at airports. The Government has proposed changes to remedy this, which would promote the use and supply of biofuels like sustainable aviation fuel. Submissions Consultation on these proposals is currently open and submissions can be submitted online until 5pm on Thursday 28 April 2022. For more information visit: https://environment.govt.nz/news/consultation-on-proposed-regulation-changes-to-maintain-accuracy-of-the-new-zealand-emissions-trading-scheme/.

The Government has released an ‘exposure draft’ of the National Built Environments Act (NBA), intended to replace the Resource Management Act 1991 (RMA) which has, for many years, been held responsible by developers and environmentalists alike for failing to adequately and effectively manage our natural resources. The release of the exposure draft is a novel process, with the draft being released for initial consultation before it is introduced to parliament. In reality, what has been released is only 20 pages of the NBA which, when final, will be much longer (the RMA is 835 pages long). There are also still many details missing from the draft, including what changes will occur to consenting, but it does include some key provisions including the equivalent ‘part 2’ provisions. The draft largely follows the recommendations set out in the Randerson Report, released in August last year. In terms of key changes, we examine three in this article: 1. Change in purposeThe purpose of the RMA is sustainable management of natural and physical resources. That changes in the NBA, with the new purpose focused on enabling Te Oranga o te Taiao to be upheld and enabling people and communities to use the environment in a way that supports the well-being of present generations without compromising the well-being of future generations. Te Oranga o Te Taiao incorporates: the health of the natural environment; the relationship between iwi and hapū and te taiao (the environment); the interconnectedness of all parts of the natural environment; the essential relationship between the health of the natural environment and its capacity to sustain all life. Many of the aspects of the ‘purpose’ of the NBA are similar to those of the RMA, but the relationship between Māori and the environment is elevated to become part of the purpose of the NBA. The new purpose also emphasises the interconnectedness of the environment and it will be interesting to see how this influences future policy direction from the government. Section 6 of the NBA also elevates the Treaty of Waitangi, both in its position within the legislation and in the substantive requirement. The NBA will require all persons to give effect to the principles of te Tiriti o Waitangi, rather than take them into account. 2. Environmental outcomes and limits The matters of national importance and other matters contained in Section 6 and 7 of the RMA have been replaced with the concepts of environmental limits and outcomes. Limits can be set to protect both the ecological integrity of the natural environment and human health, and can be formulated as a minimum biophysical state or a maximum amount of harm permitted to the natural environment or a specified part of it. Limits must be prescribed for certain matters, in the National Planning Framework and in plans where that is the direction of the national planning framework. Environmental outcomes must also be included to assist in achieving the purpose of the Act, and all plans must promote the environmental outcomes listed which include protecting, restoring and improving a number of specified parts of the environment. The inclusion of ‘improvement’ in many of the outcomes is a development, with the RMA instead focused on protecting, preserving and maintaining. This is likely to have a significant flow on effect to plan provisions and ultimately what is able to be consented and conditioned as part of a consent. The National Planning Framework (the Framework) is a new requirement of the NBA. The process for preparing the Framework is not included in the exposure draft but the Act states that there must at all times be a Framework, for the purpose of providing integrated direction on matters of national significance and matters where consistency across the country or parts of it is desirable. The Framework will be in the form of regulations and must cover a number of topics including housing supply and greenhouse gas emissions. Interestingly, the Framework must also include provisions to assist with resolving conflicts between the environmental outcomes included in the NBA. The NBA places significant emphasis on the Framework, both to set much of the policy direction for New Zealand and resolve conflicts between the various priorities of the NBA. The result is that the various parts of the Framework are likely to be more powerful than current national policy statements, and as such are likely to take a long time to formulate and will inevitably be highly controversial. 3. Regional PlansAs was signalled by the Randerson Report, the exposure draft includes reference to a new process for plan making, with one plan required for each region. Each plan will be made by a regional planning committee which will approve or reject recommendations made by an independent hearings panel after the panel considers submissions on the plan. Although not confirmed by the exposure draft, it is likely that the Randerson report’s recommendation that appeals on this process are limited to points of law will be followed. Each planning committee will be made up of one person to represent the Minister of Conservation, mana whenua representatives and one person nominated by each local authority within the region. While the exposure draft will be heavily scrutinized, submitted on and likely subject to some substantial changes in the coming months, it is fascinating to finally see the base of what will form the next phase of New Zealand’s resource management system. Submissions on the draft are expected to open shortly, and there will be an initial Select Committee Inquiry before findings are reported back to the House and this will inform further policy development. If you have any questions on the draft, or would like any advice please do not hesitate to contact our Resource Management (or should we say NBA) team.

On 10 February 2021, Minister for the Environment, David Parker, announced that the Resource Management Act 1991 (“RMA”) will be repealed and replaced with three new Acts by the end of 2022. These are the: Natural and Built Environments Act; Strategic Planning Act; and Climate Change Adaptation Act. These new acts seek to improve the natural environment, whilst allowing more development within environmental limits, improve housing supply and affordability, provide for greater recognition of te ao Māori and give effect to the principles of Te Tiriti o Waitangi. Natural and Built Environments Act (“NBEA”)David Parker announced the NBEA as being the primary act replacing the RMA, and that it will provide for land use and environmental regulation. Its purpose will be to enhance the quality of the environment in order to support present and future generations’ wellbeing. Mandatory national policies and standards will be introduced which aim to support natural environmental limits, outcomes and targets as prescribed by the NBEA. These policies and standards will be incorporated into combined regional plans, which involves a consolidation of over 100 existing regional and planning documents into 14 region wide “Natural and Built Environment Plans”. Strategic Planning Act (“SPA”)The SPA will integrate the RMA, Local Government Act 2002, Land Transport Management Act 2003 and the Climate Change Response Act 2002 in order to achieve more clear and efficient decision making and investment. This will give effect to the long term regional spatial strategies around development and infrastructure, consistent with the Government’s aim to strengthen national strategies and move to a single combined plan per region. This will enable the identification of areas that: Need to be improved or protected; Will be suitable for development; Need infrastructure; and/or Are vulnerable to climate change effects and natural hazards. This act is seen as having the potential to improve housing supply, affordability and choice, and to mitigate emissions contributing to climate change. Climate Change Adaptation Act (“CAA”)The CAA seeks to address complex issues associated with how to plan and finance managed retreat from areas which will be significantly affected by climate change. This will be managed by the Minister for Climate Change, James Shaw. TimingDue to the NBEA being a significant and complex piece of legislation, the Government has planned to release an exposure draft which will be subject to a select committee inquiry and public consultation before the Bill is introduced to the House. The exposure draft will contain the main structure and indicative headings, and will reflect Cabinet decisions and any decisions to be made by a Ministerial Oversight Group. Only certain parts will be fully drafted, such as the purpose and any supporting provisions. The same will not occur for the SPA and CAA, but these will be developed alongside the NBEA. The timeline for these acts is as follows: February-April 2021: Policy decisions will be made, as well as consultation material produced. There will only be limited consultation and engagement with stakeholders directly. May 2021: Exposure draft presented to the House. This will then be referred to a special select committee inquiry. June-September 2021: Special select committee inquiry will consider the exposure draft. Most engagement and consultation will occur in this period. December 2021: Natural and Built Environments Bill and Strategic Planning Bill will all be introduced to Parliament with a standard select committee process to consider them. The Climate Change Adaptation Bill consultation will be separate. December 2022: All three Bills passed into legislation, with implementation expected to take a number of years. ConclusionDue to the quick turn around of this legislation, it is important to engage in its development. Interested parties and stakeholders are encouraged to take part in the select committee process. The Holland Beckett Law RMA team welcomes your enquiry as to what this reform might mean for you.

2020 certainly isn’t the year we thought it would be and the Covid-19 Recovery (Fast-track Consenting) Act 2020 (the Act) definitely wasn’t on the Government’s legislative agenda back in January. The Act was passed under urgency and is part of the government’s economic response to Covid-19, promoting development as a way to stimulate the economy. For developers, the Act offers an opportunity to fast track projects in the pipeline that would otherwise have had to go through lengthy consenting processes under the Resource Management Act 1991 (RMA). The Act sets out a two stage process for obtaining consent under its provisions. To get to the second stage, a project must either be listed in the Act, or become a ‘referred project’. As the projects listed in the Act are all either government-led or government-supported, developers wanting to make use of fast tracked consenting need to go through the process set out below to obtain ‘referred project’ status. Step 1 – become a referred project To become a referred project, an application must be made to the Minister for the Environment (the Minister). This application must include certain information about the project, although at this stage information only needs to be provided to a general level of detail, sufficient to inform the Minister’s decision. The Minister will consider in making their decision whether the project helps to achieve the purpose of the Act. The Act’s purpose is to urgently promote employment to support New Zealand’s recovery from the economic and social impacts of COVID-19 and to support the certainty of ongoing investment across New Zealand, while continuing to promote the sustainable management of natural and physical resources. There are also certain criteria set out in the Act that projects must meet. The Minister is required at this stage to obtain a report from the Office for Maori Crown Relations that identifies relevant Iwi and Treaty settlement matters. They must also invite written comments from the relevant local authorities, other relevant Ministers and anyone else they deem appropriate – comments must be provided within 10 days. This short time frame implies that referral decisions can be expected relatively promptly, although no specific time period is set. Step 2 – get approval from the expert consenting panel If the Minister makes the decision to refer the project (or part of it which they are also allowed to do), an Order in Council will be made for the referral. An application can then be made by the developer to the Environmental Protection Authority (EPA), which will be more akin to a standard resource consent application in terms of the level of documentation required. Once this application is made, an expert consenting panel will be appointed for the project with secretariat support from the EPA. This panel must be chaired by a judge or retired judge and include one person nominated by the relevant local authority and another nominated by relevant iwi authorities. The panel will decide whether or not the project receives consent, considering the documents provided to support the application,  the purposes of the RMA and the Act, relevant national directions, regional policy statements and plans. Public notification of applications is not permitted, although the panel is required to invite certain individuals and bodies to provide comments including ministers, iwi authorities and organisations such as Greenpeace and the New Zealand Fish and Game Council. Comments must be received within 10 days of the invitation being made and the panel must make its final decision and produce a written report no later than 25 days after the date for receiving comments. There are limited opportunities for this timescale to be extended, and a decision could be issued at minimum 45 days of an application being lodged. Appeal rights against decisions of the panel are limited to questions of law. All of the above results in a process which is significantly quicker than the standard resource consent process and with much less public involvement. It remains to be seen how challenging it will be to obtain approval at each stage of the process, but at face value the Act represents a great opportunity for developers to get pipeline projects breaking ground.

The Resource Management (get your) Amendment Act (together) 2020 (RMAA) is the latest in a never-ending series of amendments to the Resource Management Act 1991 (RMA). The RMAA came into force on 1 July 2020 and introduces some significant changes, particularly for the freshwater planning process. It also enhances public participation in the planning process, increases enforcement powers and removes barriers to regional council consideration of climate change mitigation in regional plans and consent decision making. 1. Freshwater Planning ProcessThe RMAA introduces a new freshwater plan development process to replace the previous collaborative approach. Regional councils will be required to use this planning process to publicly notify new regional plan provisions by 31 December 2024 to implement the changes required by the new National Policy Statement for Freshwater Management. Final decisions on the provisions will then be required two years after this date by 31 December 2026. We will also be publishing an article next week on this new national direction as part of our series. Key aspects of the new process include the appointment of a freshwater hearings panel which will receive submissions and hold hearings on all freshwater planning provisions notified by regional councils. Each panel must have one tangata whenua nominated representative. After holding hearings, the panel will issue a recommendations report in relation to the notified plan, which will not be required to be limited to the scope of submissions. The relevant regional council will then decide whether to accept the recommendations of the panel or reject any recommendations which will require them to provide reasons for doing so. Where the council accepts recommendations of the panel, submitters will be limited to appeals relevant to their submissions on points of law in the High Court. Where recommendations are rejected, submitters will be able to appeal to the Environment Court on matters relevant to their submissions. This represents a significant limiting of appeal rights for submitting parties in the plan development process and the intention is that this will result in plans becoming operative more quickly. 2. Other changes of note The RMAA increases the ability for the public to participate in the resource consent process. It removes preclusions on public notification of certain types of consent applications, including subdivisions and residential activities. Restrictions on public notification of these types of applications were introduced by the previous government in the Resource Legislation Amendment Act 2017 to reduce obstructions to development of this kind. Enforcement provisions are strengthened by the RMAA. The statutory limitation period for filing prosecution charges under the RMA is extended from six to twelve months. Further, the Environmental Protection Authority is given the mandate to take enforcement action under the RMA and intervene in enforcement matters being progressed by local authorities. This represents an increase in central government involvement in RMA enforcement. The RMAA also removes a provision of the RMA introduced in 2004 preventing the consideration of the effect of discharging greenhouse gases to air on climate change by regional councils in plan processes and consent decisions. The removal of this provision now gives way to consideration of climate change mitigation and reduction of emissions in RMA processes. This change does not come into effect until 31 December 2021 to ensure enough time is given to Councils to make the necessary policy arrangements. The RMAA is the first stage of the current government’s overhaul of the RMA with the second and more extensive stage anticipated post-election based on the recommendations of the Resource Management System: A Comprehensive Review report, otherwise known as the Randerson Report. We will be publishing an article in the coming weeks on the recommendations of the Randerson Report as part of a series of articles on RMA development so stay tuned for the next instalment of the RMA reform chronicles.

2020 has been a year of significant changes for the resource management framework in New Zealand, with important developments in both legislation and national direction. More substantial changes are also on the horizon, with the Resource Management Review Panel’s report on the Resource Management Act (RMA) reform now published and both major parties indicating that RMA reform is on the agenda post-election. Three new instruments represent the ‘Freshwater Package’ that the Government has enacted to protect and improve the state of New Zealand’s fresh water bodies: 1. Resource Management Amendment Act 2020 - now in force, the Act introduces a new freshwater planning process that all freshwater planning instruments are required to undergo. Amongst other things, the Act also aligns the RMA with the Climate Change Response (Zero Carbon) Amendment Act, requiring consideration of climate change mitigation in planning decisions. Until now regional councils were prohibited from having regard to the effect of greenhouse gas discharges on climate change in most circumstances. 2. National Policy Statement for Freshwater Management 2020 – the new NPSFM takes effect on 3 September 2020, and requires that water is managed in way that gives effect to Te Mana o te Wai, including involving tangata whenua in freshwater planning. This strengthens the previous NPSFM’s wording which required consideration and recognising of Te Mana o te Wai in the management of fresh water. It also refines the National Objectives Framework for Freshwater Planning. 3. Resource Management (National Environmental Standards for Freshwater) Regulations 2020 – these new standards for freshwater take effect on 3 September 2020 and are focused on certain activities posing risk to freshwater quality and quantity. The standards include provisions to protect wetlands, ensure connectivity of fish habitat and restrict agricultural intensification. Other significant developments include: 4. National Policy Statement on Urban Development – this new national direction is designed to ensure sustainable and well-managed urban growth. It will require Councils to plan for growth both up and out in urban areas and prevents unnecessary growth constraints. It will also require the development of an evidence base about demand, supply and prices of housing and land to inform planning decisions. 5. COVID-19 Recovery (Fast Track Consenting) Act 2020 – this new legislation came into effect on 9 July 2020 and is focused on fast tracking resource consenting and designation processes for eligible projects. Two types of projects can be progressed under the legislation, with the first being projects listed in the Act and the second being projects confirmed by Orders in Council, which follows an application and approval process conducted by the Ministry for the Environment. 6. Report of the Resource Management Review Panel (also known as the Randerson Report) - this long awaited report follows the issues and options paper released in November 2019. It sets out the panel’s recommendations for reform of the RMA, including for a new Strategic Planning Act alongside a Natural and Built Environments Act to replace the RMA, mandatory plans for each region combining regional policy statements, regional plans and district plans and a streamlined process for plan creation and amendment which will limit appeal rights. In addition to these developments National Policy Statements for Highly Productive Land and Indigenous Biodiversity are expected to come into force in the first half of 2021. Holland Beckett Law will be publishing a series of articles on the reforms listed above in the coming weeks.

Resource Management Amendment Bill – Environment Committee Report The Resource Management Amendment Bill was introduced to the House of Representatives on 23 September 2019, and the period for lodging written submissions closed on 7 November 2019.  Following the presentation of oral submissions, the Environment Committee has now provided its final report to the House and the Bill moves into the second reading stage. The Bill would amend the Resource Management Act 1991 and the Resource Legislation Amendment Act 2017, and its purpose is to reduce complexity, increase certainty, and reinstate public participation opportunities.  It also introduces a new freshwater planning process and seeks to improve existing resource management processes and enforcement functions.  It is the first stage of proposed changes to the resource management system. The Environment Committee’s report covers the main amendments recommended by the Committee and can be found at: https://www.parliament.nz/en/pb/sc/reports/document/SCR_96439/resource-management-amendment-bill.  This article summarises some of the key recommendations as they relate to the new freshwater planning process, the new enforcement functions accorded to the Environmental Protection Authority, and the Environment Committee’s proposals around climate change. Freshwater Planning Process The Bill introduces a new freshwater planning process into the RMA, which is intended to work in conjunction with the draft National Policy Statement for Freshwater Management.  Our article on the draft NPSFM can be found at: https://www.hobec.co.nz/news-resources/2019/september/take-four-draft-nps-for-freshwater-management. The Environment Committee recommends a series of changes to this process, including to: Clarify that where a regional council is satisfied that only part of a planning instrument relates to freshwater, the other parts of the planning instrument will not be subject to the freshwater planning process. Ensure that key RMA decision-making provisions are complied with (such as that regional plans must be prepared in accordance with Part 2 of the RMA). Allow regional councils to develop alternatives outside the scope of submissions when making decisions that reject hearing panel recommendations which go beyond the scope of submissions. Clarify that submitters can appeal to the Environment Court if regional councils reject recommendations of hearings panels which go beyond the scope of submissions (rather than restricting appeals to only matters raised in submissions). Overall, the Environment Committee does not recommend any changes to the core of the original Bill.  A new freshwater planning process is still proposed, merits-based appeal rights are still heavily curtailed, and freshwater hearings panels can make recommendations beyond the scope of submissions.  Environmental Protection Authority The Bill empowers the EPA to undertake investigation and enforcement functions under the RMA.  Amongst other things, this would allow the EPA to intervene and take over the investigation and enforcement functions of local authorities.  Alongside a technical amendment, the Environment Committee recommends amendments to clarify that if the EPA intervenes and then withdraws from the enforcement process, local authorities can resume any enforcement action that commenced prior to the EPA’s involvement. Climate Change The Environment Committee recommends that the Bill removes statutory barriers to considering climate change in decision-making under the RMA.  In 2004, the RMA was amended to prevent regional councils from considering the effects of greenhouse gas discharges on climate change in planning processes or resource consent applications (subject to some exceptions). Given the evolution of climate change policy, the Environment Committee proposes that the Bill should allow regional councils to consider emission reduction plans and national adaptation plans in planning processes.  It proposes that these changes take effect from 31 December 2021 to ensure there is sufficient time to make the necessary policy arrangements. Photo from: Ministry for the Environment 2019. Action for healthy waterways: A discussion document on national direction for our essential freshwater.

The Ministry for the Environment has released the Resource Management Review Panel’s issues and options paper entitled “Transforming the resource management system: Opportunities for Change”. The Panel has been tasked with undertaking a comprehensive review of the Resource Management system and other associated legislation. The Resource Management Act 1991 was a revolutionary planning document integrating the management of the natural and built environment. In the almost 30 years since its release it has nearly doubled in length and there is concern that it is incapable of adequately providing for the challenges facing New Zealand’s resources today. The issues and options paper represents the beginning of the formal discussion about the where the system is failing, what it should look like in the future and possible ways to achieve those outcomes. The Panel’s final report is due with the Minister for the Environment at the end of May 2020, after considering responses to the issues and options it identified. The challenges that the Panel identified include overarching problems affecting the resource management process broadly, such as the complexity of the legislative architecture, the lack of national direction on how to manage resource effectively and the focus on effects of activities rather than planning for outcomes. It also identified specific issues such as the non-use of RMA sections to provide for joint management of resources with iwi and whether climate change should be a greater focus of resource management legislation. The options considered were similarly varied in scope. The Panel proposed ideas such as splitting the legislation for the built and natural environment into two (i.e. the pre-1991 approach) and creating an overarching spatial planning statute to sit above the RMA and guide decisions makers. The Panel considered the “first in first served” principle that governs allocation, and whether it needs to be modified. The Panel also recommended institutional reform, for example, central government playing a greater role in the system. The Panel seeks comments on the paper and proposes 44 specific questions to answer. It welcomes submissions until Monday 3 February 2020.https://hobec.co.nz/wp-content/uploads/attachments/comprehensive-review-of-the-resource-management-system-opportunities-for-change-issues-and-options-paper.pdf

The Government launched yesterday its overhaul of the Resource Management Act 1991 (RMA) which, as described by Hon David Parker, “takes too long, costs too much and has not protected the environment”. The need had been highlighted by a reform project initiated by the Environmental Defence Society. Parker stressed that “if, with all our advantages, New Zealand can’t overcome its environmental problems, then the world won’t. Our Resource Management System is pivotal to achieving that”. The improvement of the RMA system will proceed in two stages, with a Stage 1 Bill (currently being drafted) to address relatively straightforward problems or issues that require action in advance of Stage 2, the comprehensive review. The aim of the review is to cut complexity and costs while improving protection of the environment. Currently, plan making processes often take longer than the three year term of the elected councils responsible for them. The RMA is close to twice its original length, making it difficult to interpret and slow to implement. The review will be led by a panel that will produce a proposal for reform, chaired by retired Appeal Court Judge Tony Randerson. The Draft Terms of Reference of the panel outline that it is ready to depart from the status quo in order to achieve its aims. It wants to prioritise setting the high level framework for an improved system rather than resolving issues with the current framework. It will consider possibilities such as separating statutory provisions for land use planning from that of environmental protection of air, water, soil and biodiversity, whether Part 2 of the RMA should be a separate piece of legislation and how the RMA should interact with the Local Government Act 2002, the Land Transport Management Act 2003 and the Climate Change Response (Zero Carbon) Amendment Act (once passed). The panel aims to produce an ‘issues and options’ paper by the end of October 2019 with the final report due mid-2020.

The first set of National Planning Standards came into force on Friday 3 May 2019. These standards were released by the Minister for the Environment to improve the consistency of council plans and policy statements. Specifically, the standards set nationally consistent structure, format, definitions, noise and vibration metrics, and electronic functionality and accessibility requirements for regional policy statements, regional plans, district plans and combined plans under the Resource Management Act 1991. The implementation timeframes differ depending on the standard. For example, the standards for regional policy statements must be implemented within three years, for regional plans within ten years, and for district plans within five years for the standards and seven years for the definitions. District councils which have recently undertaken a plan change must implement the planning standards within seven years, and the definitions within nine years. These district councils are listed in the standards and include Christchurch City Council, Dunedin City Council, Invercargill City Council and Queenstown-Lakes District Council. There are different timeframes for councils implementing combined plans. Despite these different timeframes, councils must implement the standards if they notify a new policy statement or plan after the standards come into effect. Councils must also comply with the mandatory directions for basic electronic accessibility and functionality within one year, and with the mandatory directions for online interactive policy statements and plans within five years. With respect to the latter, the standards set longer timeframes for district councils which have recently undertaken a plan change, and councils with under 15,000 ratepayers. The planning standards can be found on the Ministry for the Environment’s website at: http://www.mfe.govt.nz/national-planning-standards/first-set

The Court of Appeal has confirmed that Part 2 of the RMA is once again relevant to resource consent applications. On 21 August 2018 the Court of Appeal released its decision of RJ Davidson Family Trust v Marlborough District Council [2018] NZCA 316, which clarifies how Part 2 of the RMA should be considered in resource consent applications. By way of background, in 2014 the Supreme Court in Environmental Defence Society Inc v The New Zealand King Salmon Company Ltd [2014] NZSC 38 “King Salmon” determined that (contrary to existing caselaw) unless there are questions of invalidity, incomplete coverage or uncertainty of meaning in planning documents, there is no need to refer back to Part 2 when considering a plan change application. The High Court then concluded in RJ Davidson Family Trust v Marlborough District Council [2017] NZHC 52 that the reasoning of King Salmon applies to resource consent applications and decision makers are unable to refer back to Part 2 unless the King Salmon caveats apply because they are bound by its expression in planning documents. The Court of Appeal has now determined that the High Court’s conclusion was wrong. Given the factual and statutory context of King Salmon, the Court of Appeal does not consider that the Supreme Court intended to prohibit Part 2 being considered in resource consent applications. The Court listed the following additional three reasons to support that conclusion: • The Supreme Court made no reference to s 104 of the RMA or the phrase “subject to Part 2”;• There is no indication from the decision that the Supreme Court intended its reasoning to be generally applicable, including to resource consent applications; and• The statutory language of s 104 clearly contemplates direct consideration of Part 2 and there cannot be the same assurance outside the NZCPS that plans made by local authorities will reflect the provisions of Part 2. However the Court of Appeal did not entirely revert to the position before the High Court’s decision, that consent authorities would always consider Part 2 in considering resource consent applications. The Court of Appeal has now determined that in some situations recourse to Part 2 is not required: • Resource consent applications engaging the NZCPSThe Supreme Court in King Salmon concluded that the NZCPS complies with the RMA’s requirements and gives effect to Part 2. In light of this fact the Court of Appeal determined that if a resource consent application engages the NZCPS then considering Part 2 will unlikely provide any additional guidance. The Court of Appeal stated that Part 2 cannot be used to undermine a clearly relevant restriction in the NZCPS and doing so would expose the decision to being overturned on appeal. However the Court of Appeal noted that if the NZCPS does not provide a clear outcome then consent authorities can consider Part 2 for guidance. • Other plansThe Court of Appeal determined that relevant plan provisions are not properly had regard to if they are considered for the purpose of putting them to one side; consent authorities must conduct a “fair appraisal of the objectives and policies read as a whole”. It stated that if a plan was prepared having regard to Part 2 and has a coherent set of policies designed to achieve clear environmental outcomes then the policies should be implemented and recourse to Part 2 will not add anything, and cannot justify an outcome contrary to its policies. However consent authorities need to give emphasis to Part 2 if it appears the plan was not prepared in a manner that appropriately reflects Part 2. In summary, the Court of Appeal agreed with the High Court that allowing plans to be rendered ineffective by general recourse to Part 2 is inconsistent with the scheme of the RMA, provided that the plans have been properly prepared having regard to Part 2. However the High Court was incorrect to apply the reasoning in King Salmon with equal force to resource consent applications. Rather, the implications of King Salmon in resource consent applications are that proper application of relevant plans may leave little room for Part 2 to influence decisions. In terms of the present case, the Court of Appeal concluded that in the circumstances the thrust of the relevant NZCPS policies and the Marlborough Sounds Resource Management Plan could not have been put aside by recourse to Part 2 and the decision did not need to be overturned.

New fees and forms are introduced with small changes to service requirements due to recent amendments to the Resource Management (Forms, Fees, and Procedure) Regulations 2003. The changes are brought about because of recent amendments to the Resource Management Act 1991 (RMA) introduced by the Resource Legislation Amendment Act 2017 (RLAA). The change with the greatest implication is the new fee structure, with fees being introduced where previously none were payable. Scheduling and hearing fees are introduced and are to be prepaid; if they are not paid the registrar may vacate the hearing. If the hearing time is different to that estimated and the prepayment is insufficient the balance must be paid on the last day of the hearing, or alternatively a refund will be made. In the interests of justice, the registrar may waive fees if the applicant is unable to pay the fee, or the application is in relation to a matter that concerns the public interest and is unlikely to be brought if the fee is not waived. In these cases, the Registrar also has the power to postpone the fee until the application for waiver is determined, or if an application for waiver is not made the Registrar may refund the fee. Key changes to the fees include: Applications for most appeals $600 Commencing any other proceeding (except for applications for waiver or directions) $250 Interlocutory applications $200 Notices of a person’s wish to be a party to a proceeding (with limited exceptions) $100 Scheduling a hearing date (except for interlocutory applications) $350 Hearing fees (for interlocutory applications for each half-day or part half-day after the second day, or any other application for each half-day or part half-day after the first half-day) $350 New forms are introduced for the new collaborative and streamlined planning processes and the new permitted boundary activity. Existing forms are amended to make provision for fast-track resource consents. Changes to procedure include the service requirements for appeals against a decision on a proposed policy statement or plan, or a requirement in a plan or proposed plan now also apply to appeals by way of rehearing. Applications for resource consent or for review of consent conditions are now also to be served on persons with a relevant statutory authority. The move towards electronic filing and service is also apparent by amendments to the forms so that email is the default address for service. The amendments will be introduced in two stages; the first amendments come into effect on 14 September 2017, the second set come into effect on 18 October 2017 to coincide with other changes introduced by the RLAA. For more information on the amendments please contact Vanessa Hamm.

Section 122(1) of the Resource Management Act 1991 (RMA) states that a resource consent is neither real nor personal property.  However, resource consents are often treated as property given that a resource consent is inherently valuable to the consent holder.  This is commonly witnessed in the practice of resource consents being bought, sold and leased via the transfer provisions of the RMA, particularly in respect of water permits. Recent cases have considered the nature of a resource consent, notably in the high profile Government asset sales cases of New Zealand Māori Council v Attorney General [2012] NZHC 3338, New Zealand Māori Council v Attorney-General [2013] NZSC 6, [2013] 3 NZLR 31 (collectively referred to as the Assets Sale Cases).  The Supreme Court\'s description of a resource consent went further than the High Court\'s decision in Aoraki Water Trust v Meridian Energy Ltd [2005] 2 NZLR 268 (HC), where the Court had found that a resource consent conferred a right to use a resource. This article will focus on how the Courts have treated resource consents in recent case law and the implications of these decisions for a consent holder and the RMA. The purpose, applicability, and limits of s 122 RMA When is a resource consent treated as property? Under s 122(1), a resource consent is neither real nor personal property.  Unless expressly provided otherwise in the conditions of consent, the exceptions to s 122(1) relate to: (a)    Succession upon the death of a consent holder (s 122(2)(a))); (b)    Bankruptcy (s 122(2)(b))); (c)    The Protection of Personal and Property Rights Act 1988 (s 122(2)(c))); and (d)    A general exception allowing the consent holder to grant a charge over a consent as if it were personal property (s 122(3)). In those situations, a consent holder (or a third party) can treat a resource consent as personal property to the extent that the consent holder would have been able to do so. This is a common caveat throughout the exceptions.  For example, in a bankruptcy, the Official Assignee can \'sell\' the resource consent to pay creditors, but only if the resource consent can be transferred.  While resource consent conditions may restrict a transfer, practically it is rare for conditions to do this, and restrictions are more commonly set by the RMA and rules in a plan. In summary, the transfer provisions of the RMA provide: (a)    A coastal permit may be transferred (all or in part) only where allowed by a condition of consent (s 135); (b)    A permit to dam and divert water may be transferred to a person on the same site by giving written notice to the consent authority (s 136(1)); (c)    A permit to take and use water may be transferred (all or in part) to the owner or occupier on the same site by giving writtennoticeto the consent authority.  A water permit may be transferred to another site if the transfer is allowed by a regional plan and the necessary application has been approved by the consent authority (s 136(2)). (d)    A discharge permit may be transferred to a new owner by giving written notice to the consent holder, or to a new site if allowed by a rule in a regional plan and the necessary application is approved by the consent authority (s 137). Combined, s 122 and ss135 to 137 allow a consent holder to utilise the economic value of a resource consent and treat the consent as property, provided the consent allows for this.  This can be by way of lease or sale of a consent, or using a consent as leverage or collateral. Case law The facts of Aoraki Water Trust v Meridian Energy Ltd are well-known and involved applications for declarations by Aoraki Water Trust (Aoraki) about whether the Canterbury Regional Council was constrained in granting Aoraki\'s resource consent application to take water from Lake Tekapo in light of Meridian Energy Limited\'s (Meridian) resource consents. Meridian opposed the declarations on the grounds that as Lake Tekapo was fully allocated under its resource consents, it had the right of non-derogation and legitimate expectation. The High Court considered that resource consents were not real or personal property, but conferred a right to use a resource (ie. water from Lake Tekapo).  Granting a permit to Aoraki would reduce Meridian\'s ability to generate electricity and therefore devalue the permit (at [35]). The High Court found that the principle of non-derogation fromgrantwas applicable to all legal relationships which confer a right in property (at [36]).  Meridian enjoyed a legitimate expectation that the rights created by its resource consents would not be eroded by the consent authority.  Aoraki has been regarded as the leading case on the nature of a resource consent. In Armstrong v Public Trust [2007] 2 NZLR 859 (HC), the High Court considered whether the applicant was the sole holder of a coastal permit under the common law survivorship of a joint tenant.  The applicant, Alan Armstrong, and his father, John Armstrong, held coastal permits in the name of J &A Armstrong to erect whitebait stands in the coastal marine area at Moeraki River.  Following John\'s death, Alan applied for a declaration that he was the sole consent holder. The application was opposed by the Public Trust who represented the deceased\'s daughter. In considering the Public Trust\'s argument that s 122(1) was absolute, the Court held that it did not interpret s 122(1) as meaning that Parliament had set its face against the creation of property rights as incidental to holding consents under the RMA.  That proposition was confounded by clear exceptions to s 122(1).  Rather, the purpose of s 122(1) was to prevent the unfettered transfer of resource consents except where specifically provided (at [18]-[19]). The Court found that to the extent that the RMA allows property rights, the common law as to real and personal property will apply, subject to constraints in the specific provisions of the RMA (at [23]).  The Court declared that the applicant was the sole holder of the consent by virtue of joint tenancy. Armstrong v Public Trustis important as the High Court acknowledged that it was not the intent of Parliament to absolutely prohibit any property rights being conferred by the grant of a resource consent.  Rather, it is the consent holder’s ability to transfer theconsentthat was intended to be constrained. Recent developments in case law Two recent cases have considered the decision in Aoraki and s 122(1), being the Assets Sale Cases and a High Court taxation case involving resource consent expenditure. Crown Assets Sale Cases The Assets Sale Cases where the New Zealand Maori Council challenged the lawfulness of the government\'s proposed sale of up to 49% of its shares in Mighty River Power Limited (MRP) has provided interesting commentary on the nature of a resource consent. The claimants\' position was that MRP\'s resource consents were a form of property, and therefore the claimants had a direct claim to theconsentsunder the provisions of the State Owned Enterprise Act 1986 and s 64 of the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010 (which related to the Crown\'s consultation obligations). In the High Court, the claimants relied onAorakito say that the considerable economic value of resource consents could only be explained on the basis that such value derives from the use of property (ie. water) according to its permit. Justice Young noted that the High Court inAorakiwas careful not to say a resource consent was a form of property.  In dismissing the submission, the Court said that: I consider the meaning of s 122 is straightforward. ….. There are only two forms of property in New Zealand, real and personal.  A resource consent is neither.  The fact that in limited circumstances a resource consent holder may be able to act if the consent is property through specific statutoryauthorisationdoes not generally make a resource consent property. (at [216]) On appeal, the Supreme Court found: We accept that the water permits used by Mighty River Power are properly regarded as interests in the Waikato River (differing in this from the position taken in the High Court in reliance on the fact that s 122 of the Resource Management Act provides that resource consents, of which water permits are a kind, are not property).  …… For the purposes of the Settlement Act, they may well be “property” and are in our view certainly an “interest” caught by s 64. If excluded from the application of s 64, it is difficult to see what could be within the meaning of “certain assets” (in the heading to the part containing s 64) or an “interest” in the Waikato River (referred to in the text of s 64), of concern to the negotiating parties and able to be created by a statutory or other process. (at [81]) The Supreme Court went on to say that the issue was not whether water permits were property rights or interests, but whether the proposed share sale was a disposal of such rights or interests, and did not consider the nature of the water permits further. Trustpower Limited v The Commissioner of Inland Revenue Trustpower Limited v Commissioner of Inland Revenue[2013] NZHC 2970, (2013) 26 NZTC 21-047 involved a dispute over expenditure incurred by Trustpower Limited (Trustpower) in obtaining resource consents for four projects, being the Arnold and Wairau River hydroelectric power schemes and the Kaiwera Downs and Mahinerangi wind farms.  While the main issue in Trustpower was how resource consent expenditure is treated under the Income Tax Act 2004, the High Court made a number of comments on the nature of a resource consent. Trustpower claimed that approximately $17.7m of expenditure for the projects over the 2006 to 2008 tax years was deductible as feasibility expenditure as the projects remained in the development pipeline and were yet to be constructed. The Commissioner of Inland Revenue disagreed on the grounds that the cost incurred for obtaining the consents was capital expenditure incurred for the purpose of developing and acquiring an asset, and therefore not deductible. The High Court considered s 122(1), citingAoraki, Marlborough District Council v Valuer General[2008] 1 NZLR 690 (HC) (where the High Court found that mussel farms authorised by a coastal permit were not property and not rateable as land (at [41] – [59])) and the Assets Sale Cases.  In considering those cases, the High Court commented that the RMA established the legal arrangements into (eg. a resource consent applied for and obtained), but did not dominate in the tax context (at [73]). The High Court considered that Trustpower\'s resource consents were permissive as Trustpower could not legally construct any of the projects as without the consents (at [82]).  The High Court accepted that the resource consents were valuable to Trustpower, but only as part of a bundle, package or suite of rights.  The value of resource consents would be tenuous at best given that resource consents on a stand-alone basis would be of little interest in a sale and that any value could only be as part of an overall package (at [94]-[95]). The Court concluded that it would be artificial from a practical and business point of view to regard them as separate stand-alone assets in their own right (at [97]). Trustpower was ultimately successful. Implications of recent decisions In the Assets Sale Cases, the Supreme Court differed from the High Court and considered that MRP\'s water permits could well be property, which is a progression from the High Court\'s description in Aoraki.  Thissuggesta willingness to move further than Aoraki in describing the nature of a resource consent.  The High Court\'s view in Trustpower is more consistent with Aoraki as it considered that Trustpower\'s resource consents were permissive and not stand-alone assets.  It is important to note that both decisions were made in the context of specific legislation rather than from a purely RMA perspective. Does the Supreme Court\'s view that a resource consent may well be property have any implications for the consent holder? Solely within the framework of the RMA, describing a resource consent aspropertyis not likely to create any greater rights for a consent holder.  The RMA clearly contemplates that a consent holder is able to utilise the rights created by a resource consent, with the value of those rights determined by the benefit to the consent holder and the consent holder\'s ability to transfer or leverage the consent.  However, the description of the consent will not defeat or avoid constraints under the RMA. What can be drawn from the Supreme Court and Trustpower is that s 122(1) is not necessarily the start and end to how a resource consent is treated in other jurisdictions.  In those situations, it is likely that the Court will very much be guided by how a resource consent fits into the principles of any specific legislation, rather than relying solely on s 122(1). If s 122(1) is not a barrier to a resource consent being treated as property, the implications of the recent decisions may benefit parties in equitable or common law jurisdictions.  The use of alternative jurisdictions is not uncommon and has arisen where a party seeks to obtain a benefit not otherwise provided for under the RMA. This was seen in Aoraki where the common law right of non-derogation applied to Meridian\'sconsentsand in Armstrong where the High Court applied common law principles of joint tenancy. The benefit of alternative jurisdictions is demonstrated by comparingHampton v Hampton[2010] NZEnvC 9, [2010] NZRMA 412 withMain Farm Ltd (in Rec) v Otago Regional CouncilHC Dunedin, CIV-2010-412-000385, 21 November 2011. Hampton v Hamptoninvolved a water permit applied for by, and granted to, Simon Hampton to take 777,600 cubic metres of water annually for the purpose of irrigating two Canterbury farms, one owned by Simon and the other by Simon\'s cousin, Robert Hampton.  The dispute arose when Simon intended to transfer part of the water permit to a third party and further compounded by the fact that (at that time) Robert would be unlikely to obtain his own resource consent due to allocation issues.  Robert\'s ability to prevent the transfer was limited as he was not named as the consent holder. Robert initially commenced enforcement proceedings that he be named as the joint consent holder but the issue was ultimately considered in the context of declaration proceedings. The Court acknowledged that resource consents are not real or personal property, but were in a category of their own, finding that \"clearly a consent ispropertyin an economic sense but there is no necessary link to ownership of any other property\".  The Court also considered that resource consents conferred quasi-property rights (at [14]-[15]). The Court noted that Simon may hold the part of the water permit relating to Robert\'s land on a constructive trust for Robert but was unable to address this issue due to jurisdiction.  The Court held that it would be inappropriate to make the declaration that Robert should be named as the consent holder given Simon was the resource consent applicant and that this position would continue until the resource consent transfer process had been approved (at [34]).  Robert ultimately obtained his own resource consent and the issue of his ownership was not further considered by the Courts. Hampton v Hamptoncan be contrasted with Main Farm, which was considered in the context of equitable property rights. Main Farm involved a series of transactions for the purpose of gaining control of dairy farms in the Maniototo area to be managed under a joint venture entity.  A sale and purchase agreement required the vendor, Alnwick Limited, to assign a water permit authorising 400,000 litres of water per hour from the Taieri River to the purchaser, Main Farm.  The water permit was held in the name of Mr Carr, the sole director and shareholder of Alnwick Limited, and Mr Beattie, a neighbouring landowner.  Mr Carr alsobecomea part of the joint venture.  The parties were aware that the water permit identified in the sale and purchase agreement had expired and that a replacement permit had been applied for by Mr Carr and Mr Beattie. The relationship between the joint venture parties ultimately broke down, the joint venture was placed in receivership and numerous civil proceedings followed.  During the course of the civil proceedings, the resource consent was granted as separate water permits to Mr Carr and Mr Beattie. The receivers requested that the Council transfer the consent to Main Farm, which the Council refused to do for lack of jurisdiction.  Mr Carr also refused to transfer the consent voluntarily as he claimed it was worth $500,000-$600,000 and intended to sell or lease the permit.  Main Farm initiated proceedings against Mr Carr seeking that he transfer the water permit to Main Farm. Counsel agreed that the issue was whether Main Farm held equitable property rights to the renewed resource consent.  While not specified in the decision, this was likely due to the fact that the water permit was a new consent and the consent holder was not a party to the sale and purchase agreement.  The Court did not specifically consider s 122(1) and found that what was sold to Main Farm was a \"bundle of rights\" and that the vendor \"clearly holds the legal title to the water right on trust for Main Farm\" (at [54]) (though we note that the reference to \'legal title\' is incorrect). The Court ordered Mr Carr to transfer the water consent to Main Farm. Main Farm demonstrates the ability of a party to obtain relief where it has an equitable property right to a resource consent.  However, it is possible that the Supreme Court\'s view that a resource consent could be property, and the inference that s 122(1) is not necessarily determinative on the nature of a resource consent, may result in more parties turning to alternative jurisdictions where property rights are at issue given the limitations under the RMA. Conclusions The Courts have long recognised that the nature of a resource consent is not as straightforward as set out in s 122(1).  The Courts have considered that a resource consent confers a right to use a resource (Aoraki), gives quasi-property rights (Hampton v Hampton) and could be property (Assets Sale Cases). Regardless of how it is described, what is certain is that a resource consent creates rights.  In a narrow RMA context, the various descriptions will continue to provide little practical consequence as the ability of a consent holder to utilise the economic value of these rights remains constrained by the transfer provisions of the RMA, any rules in a plan andfeasibly, though rare, the conditions of a resource consent.  For the consent holder, the status quo remains. However, in a wider context, the Supreme Court\'s decision has progressed Aoraki by acknowledging that a resource consent could be property.  It can also be drawn from the Supreme Court and Trustpower that s 122(1) is not necessarily the final say in determining the nature of a resource consent.  This may benefit a party in jurisdictions outside the RMA.  Further, although the ability to obtain relief outside of the RMA is already available, it is possible the recent decisions may encourage parties to turn to other jurisdictions given the Courts\' willingness to look beyond s 122 in other contexts.