New government and a new round of RMA reforms to go with it

The fast-track consenting regime proposed by the National/ACT/NZ First coalition government was introduced to Parliament on 7 March 2024. The most awaited aspect of the Fast-track Approvals Bill – the list of projects to be fast-tracked – is blank at this stage. A Fast-track Advisory Group of experts is to be established in the coming weeks to advise Ministers on what projects should be included in the legislation, following which the projects will be inserted into the schedules. The key aspects of the Fast-track Approvals Bill are as follows. Purpose The Bill’s purpose is to provide a fast-track decision-making process that facilitates the delivery of infrastructure and development projects with significant regional or national benefits. The Bill’s purpose has no reference to continuing to promote the sustainable management of natural and physical resources, unlike the COVID-19 Recovery (Fast-track Consenting) Act 2020 (FTA). Processes covered The Bill covers a much greater range of consents/approvals. In addition to resource consents and notices of requirement for designations under the RMA it includes consents/approvals under the Conservation Act 1987, Wildlife Act 1953, Freshwater Fisheries Regulations 1983, Reserves Act 1977, Heritage New Zealand Pouhere Taonga Act 2014, Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, Crown Minerals Act 1991, and Fisheries Act 1996. The Bill also makes a change to Environment Court processes under the Public Works Act 1981 for projects dealt with under the Bill. The FTA only dealt with resource consents and notices of requirement for designations under the RMA. Treaty of Waitangi The Bill requires persons exercising functions under it to act in accordance with Treaty settlements and recognised customary rights. The Bill does not contain a requirement to act in a manner that is consistent with the principles of the Treaty of Waitangi, unlike the FTA. Projects The Bill provides for two types of listed projects, and referred projects. The two types of listed projects will be: Part A – listed projects that can be referred straight to an Expert Panel. Part B – listed projects that may be considered by the joint Ministers for referral to an Expert Panel. The Bill contains criteria for being a referred project including whether the project will have significant regional or national benefits. An example of projects that may qualify include projects that will increase the supply of housing, address housing needs, or contribute to a well-functioning urban environment. Projects are referred to Expert Panels for consideration. Expert Panel The Expert Panel will be set up in a similar way to Expert Consenting Panels under the FTA. However, Expert Panels will only be making recommendations to the ‘joint Ministers’ who will make the decisions. The joint Ministers For the most part, the responsible ‘joint Ministers’ under the Bill are the Ministers for Infrastructure, Regional Development and Transport. This is a move away from the Ministers for the Environment and Conservation under the FTA, although the latter will join the others for Wildlife Act matters. Appeal rights Appeal rights are available to the High Court on a point of law only. Rights of judicial review are not affected by the Bill. Select committee process The Bill has a strong focus on infrastructure and development and will be controversial. It has been referred to the Environment Committee for a select committee process and is open for submissions until 19 April 2024. Please get in touch if you would like to make a submission or discuss things further.

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 coalition government has followed through on its promise to repeal the Natural and Built Environment Act 2023 (NBA) and the Spatial Planning Act 2023 (SPA) before Christmas. On 19 December 2023 the Resource Management (Natural and Built Environment and Spatial Planning Repeal and Interim Fast-track Consenting) Bill (Repeal Bill) was introduced to Parliament under urgency and has simultaneously passed through its first, second and third readings. It is anticipated that royal assent will be given before Christmas. There has been criticism regarding the urgency of the Repeal Bill as there has been no opportunity to comment on it before it has been given royal assent. The Repeal Bill repeals both the NBA and the SPA and will see a return to the Resource Management Act 1991 (RMA). However, to avoid unnecessary disruption through the repeal process a limited number of functions in the NBA are being retained, notably the NBA’s fast-track consenting process. Whilst the Repeal Bill is retaining the fast track consenting process, the government has indicated that it will work to develop and introduce its own fast-track consenting regime as part of its “100 day plan”. What shape and form this regime is to take is yet to be determined. Existing and new fast-track applications are able to be processed in accordance with the fast-track provisions (Part 2 of Schedule 10) in the NBA throughout this transition period. However, these provisions will need to be treated as if they were subject to the purpose and principles contained in Part 2 of the RMA. Treaty settlement arrangements reached between iwi and the Crown are also be protected through the repeal and any future resource management reform processes. The government has indicated that repealing the NBA and the SPA is the first step towards its commitment to reforming Aotearoa’s resource management towards a more efficient and streamlined system.