Author:	Ken Palmer LLB, LLM(Hons), LLM (Harv), SJD (Virginia) Associate Professor, University of Auckland Faculty of Law
Subjects:	Natural Resources New Zealand Nature Conservation New Zealand Sustainable Development New Zealand
Issue:	Volume 9, Number 3 (September 2002)
Category:	Refereed Articles

Paper presented at the Australasian Law Teachers' Association annual conference hosted by Murdoch University School of Law, Perth, Western Australia September 29 - October 2 2002

Contents

• Introduction
• The permitted baseline concept
• Notification cases
• Permitted baseline applied to assessment of applications
• Lifestyle sub-divisions in rural areas
• Sustainable management and Maori cultural and spiritual objections
• Aquaculture farming provision and government moratorium
• Hazardous substances and new organisms
• Conclusion

Introduction

1. In this paper I will comment on five recent issues in the Environmental and Resource Management Law area. The issues cover -
   • The permitted baseline concept affecting notification and assessment of consents.

   • Lifestyle subdivisions (with restorative indigenous planting) in rural areas.

   • Sustainable management objectives and Maori cultural and spiritual objections.

   • Aquaculture farming provisions and the Government moratorium

   • Hazardous substances and new organisms - G M Royal Commission report and temporary moratorium

   The permitted baseline concept

2. The Resource Management Act 1991(NZ) directs Regional Councils and territorial authorities to prepare plans for the achievement of resource management objectives. Territorial authorities (City and District Councils) generally prepare plans based on a zoning system, with a category of "permitted activities", and other defined activities (controlled, discretionary, non-complying) which may require a resource consent.

3. The permitted activities may proceed as of right without any formal approval. Since 1998, through a series of Court decisions, the determination of the demarcation line between permitted activities and the effects of activities for which a consent is required, has become the focus of applicants seeking to minimise compliance costs and enhance the probability of approvals. The resulting Court decisions have established the "permitted baseline" concept, having relevance to both obligations to notify applications, and as to assessment issues.

   Notification cases

4. Under the Resource Management Act, an application is presumed to require public notification with submission and appeal rights following. However, the consent authority may dispense with notification where satisfied "the adverse effect on the environment of the activity for which consent is sought will be minor", and "written approval has been obtained from every person the consent authority is satisfied may be adversely affected by the granting of the resource consent" (s 94).

5. In Bayley v Manukau City Council [1998] NZRMA 513, the Court of Appeal held that in determining whether a development would have an adverse effect on the environment, the consent authority should disregard the effect on the environment from existing activities being lawfully done on the land or which could be done there as of right. This "permitted baseline" was extended in Barrett v Wellington City Council [2000] NZRMA 481 (HC) to the second test, as to whether a person might be adversely affected by the granting of resource consent.

6. If the affect came from the existing environment or could come from a hypothetical development permitted as of right (not yet in existence), those effects were to be disregarded in determining whether another person could be adversely affected. Following submissions as to the appropriate adjective to describe credible effects which might arise under the umbrella of a "permitted activity", the Court of Appeal in Smith Chilcott Ltd v Auckland City Council [2001] NZRMA 503 held that all hypothetical permitted developments were included provided they were not "fanciful" developments.

7. As a consequence, the number of consent applications likely to be notified represents, statistically, less than 2% of applications overall. In practice, it is not uncommon for neighbours of a significant development to complain that the proposal was consented to without any public notification, and the only remedy for challenge is by way of judicial review to the High Court. This procedure is costly and impracticable for a vast majority of persons affected.

8. A question remains whether this outcome was intended under the RMA in 1991. The Act was promoted as providing for full public participation in resource consent matters. The converse review is that participation remains available when a district (or regional) plan is being prepared, and at that point in time, concerned persons should object to the scope or permissive nature of the zoning rules, and should not be given a second opportunity to frustrate developments later in time. The Councils must now accept that effects on the environment within the "permitted baseline" concept are effects which the public cannot strictly question, and the public may be denied submission and appeal rights.

   Permitted baseline applied to assessment of applications

9. Whether or not an application is notified, the consent authority will be obliged to assess the effects of the activity of the environment. Under RMA s 104(1)(a) the consent authority shall have regard to "any actual and potential effects on the environment of allowing the activity".

10. In the Smith Chilcott decision, the Court of Appeal upheld the application of the doctrine within the context of assessing a resource consent application. In the particular case the issue concerned a proposed 8-unit development, which occupied the same spatial envelope as a permitted 3-unit development. On referral back to the Environment Court, it approved the proposal, finding the density increase to have no significant environmental effects, and the building envelopes to be identical (to that of a possible permitted development) and not being a fanciful development.

11. A consequence of these decisions has been a change from assessing in the round the actual and potential affects of a proposal, to require an analysis first and discounting of all existing and yet to be proposed developments on the site which could be permitted activities (not being fanciful). The baseline concept has become entrenched, and has limited the overall discretion of a consent authority to reject a proposal. Essentially, the incremental aspects of a development are the relevant considerations. The baseline approach has the strong support of property developers. Conversely, it has significantly reduced the ability of objectors to contest the total environmental effects of a proposal.

    Lifestyle sub-divisions in rural areas

12. Prior to the Resource Management Act 1991, provisions stated to be "matters of national importance," raised a strong presumption protecting rural land from unnecessary subdivision or development and also highlighted the need to preserve the natural character of the coastal environment and areas along lakes and rivers.

13. Under the RMA s 6, the former presumption of protection of rural land has been removed, unless the land comprises outstanding natural features and landscapes. Further, prior to 1991 the Government Ministry of Works consistently opposed small lot subdivisions in rural areas, and this opposition disappeared under the RMA. The Government appeared to take a neutral view on the value and future of landscapes, leaving the policy aspects to regional and local government.

14. The change in policy was highlighted in Becmead Investments Ltd v Christchurch City Council [1997] NZRMA 1, and in Canterbury Regional Council v Selwyn District Council [1997] NZRMA 25. The Environment Court found in both cases where developers sought rezoning of rural land for housing expansion, that the protection of versatile soils under the RMA was not an overriding objective and the rezoning of the land was approved on the basis of housing need. Other cases indicated, that in isolated rural areas, where sound reasons could support rezoning to allow large lot lifestyle blocks or the development of resources, approval would be given.

15. In Arrigato Investments Ltd v Auckland Regional Council [2001] NZRMA 481, CA, the approval of 14 lifestyle lots on an outstanding coastal beach head, brought the question before the Court of Appeal. The Environment Court had approved the subdivision, holding that the matters of national importance in RMA s 6(a) "the protection of the natural character of the coastal environment", (b) "the protection of outstanding natural features and landscapes" were not compromised by a subdivision which would have a positive aspect of restoration of the landscape through indigenous shrub and tree planting.

16. The application was strongly opposed by the Regional Council, which claimed its policies required protection of the wilderness aspect of the coastal area. The Environment Court agreed with the applicant that the "natural character" could be related to the bush clad areas that may have existed 100 years ago, and the development should be preferred as restoring that quality. The existence of a dwelling on each of the 14 life-style lots was not seen as inimical to this outcome.

17. The Court of Appeal held that the Environment Court was entitled, in its broad discretion, to come to the particular finding in favour of the development, and refused to intervene. The Court declined to find that a precedent could arise from this approval, stating that every property was unique as to its features. Applying the permitted baseline, the present existence of 9 allotments within the land area, each allowing for a house to be erected as a right, was seen as supportive of the proposal to increase the number of allotments to 14.

18. By way of comment, this decision (and the companion case of Dye v Auckland Regional Council [2001] NZRMA 513) has significantly endorsed lifestyle sub-division approvals in rural areas. In support of this change of policy will be the reintroduction of populations in rural areas and the maintenance of the rating base for local authorities. The downside will be more fragmentation of dwellings, the need to provide for services and facilities for occupants, and the general loss of wilderness character of the rural zones.

    Sustainable management and Maori cultural and spiritual objections

19. Since 1977, a matter of national importance in the administration of resource management applications has been the relationship of the Maori people and cultural traditions with their ancestral lands. In 1991, this relationship was expanded under RMA, s 6(e) to require recognition and provision for "the relationship of Maori and their culture and traditions with their ancestral lands, waters, sites, waahi tapu, and other taonga".

20. In a series of decisions, the relevant Maori cultural issues have been recognised and given appropriate weight, and have influenced the outcomes. In Mangakahia Maori Komiti v Northland Regional Council [1996] NZRMA 193, Maori opposed the grant of a water permit to local farmers to use water from a stream for irrigation purposes. Maori claimed the spirituality of the waterway would be adversely affected. The Court was prepared to grant the application on a limited quantity basis, to ensure that sufficient water remained to preserve the spirituality, and to require a review of the permit after a 6-year period.

21. By contrast, in Te Runanga o Taumarere v Northland Regional Council [1996] NZRMA 77, an application for a discharge consent for a sewerage outfall in the Bay of Islands was refused. Maori claimed that the outfall would affect traditional seafood gathering areas and the water. The Court was satisfied that alternative locations or systems should be investigated.

22. More recently, a proposal by the Minister of Corrections to establish a Regional Prison at Ngawha Springs, near Kaikohe in Northland, raised issues of Maori spirituality directly. A group of local Maori opposed the location of the prison near the springs, claiming that the spirituality of the site would be significantly affected, including a harmful effect on a taniwaha [spiritual being].

23. The Environment Court had approved the prison development, finding that controversy existed among Maori and a preferred tribal group [primary Kaitiaki] were not opposed to the prison. That group believed the prison would have a restorative aspect, and the spirituality would not be affected. The Environment Court ruled that it could not make a finding on the spiritual [metaphysical values] of the beliefs, and in any event considered the location sufficiently distant from the springs to avoid any significant compromise of the culture and beliefs.

24. On further appeal in the High Court, Friends and Community of Ngawha Inc. v Minister of Corrections, High Court, Wellington AP110/02 20 June 2002, Wild J found against the appellants. The High Court considered the Environment Court was entitled to come to its findings on the matters of fact, and no errors of law had been made in its assessment of the issues. In essence, one group of Maori did not have a veto right over the application. Of passing comment, the consideration of Maori issues was assessed by an Environment Court and the High Court, which did not contain any Maori members as such.

25. On the latter point above, Lord Cooke delivering the Privy Council decision in McGuire v Hastings District Council [2002] 2 NZLR 577, [2001] NZRMA 557, alluded to the question of justice for Maori and confidence in the system. In McGuire, a Judge in the separate Maori Land Court jurisdiction had purported to issue an interim injunction preventing the Council from designating a road across Maori land for an arterial route.

26. The successive Courts found against the judge of the Maori Land Court, determining that exclusive jurisdiction to contest the designation remained under the RMA. Having affirmed that outcome, Lord Cooke specifically referred to the recognition (i) under s 6 of the relationship of Maori and the culture and traditions with their ancestral lands, (ii) under s 7(a) to "kaitiakitanga" [stewardship], and (iii) s 8 which directed functionaries to take into account the principles of the Treaty of Waitangi. Finally Lord Cooke noted the RMA made provision for the Environment Court to include an alternative environment judge who could also be a judge of the Maori Land Court. He indicated support for this indigenous membership.

27. However, the latter option has never been utilised since commencement of the RMA. One distinction between the McGuire case and the Ngawha prison case was that at Ngawha, the Crown prison authorities had purchased the farm upon which the development was proposed, but earlier in history the land had been occupied by Maori. The question remains whether justice may be better seen to be done if cases involving substantial Maori issues include a Maori judge.

    Aquaculture farming provision and government moratorium

28. Under the RMA, control of the coastal marine area (up to the 12 mile territorial sea limit) comes within the jurisdiction of the Regional Councils. All development for aquaculture farming purposes is likely to require a resource consent. The application will have regard to the effect on the environment, the provisions and policies within the New Zealand Coastal Policy Statement, the matters of national importance, the regional policy statement and regional coastal plans.

29. In recent years, a plethora of applications have been made by the aquaculture industry for approval of consents to carry out mussel farming and other marine related farming ventures. For example, in Trio Holdings v Marlborough District Council [1997] NZRMA 97, the Court approved a sponge farm proposal but declined a mussel farm, having regard to the pollution and the visual environmental affects. Many subsequent cases have raised acutely the issues of sufficiency of the number of farms, and the detrimental affect on the coastal environment, compromising a matter of national importance. Encouraging the modern day "gold rush" have been the absence of rentals payable to the Crown, with limited monitoring charges payable to Regional Councils.

30. To provide a breathing space and to allow for more rational planning of the appropriate coastal regions to be made available for the aquaculture expansion, the Resource Management (Aquaculture Moratorium) Amendment Act 2002 has imposed a moratorium on the granting of coastal permits for a period of 2 years from 28th November 2001. Certain existing applications were exempted, where processed past the notification or non-notification stage. No compensation was to be payable to any person affected.

31. Regional Councils are directed to include in the coastal plan or proposed plan "aquaculture management areas" in which a controlled or discretionary activity consent would be required, and to also define other areas in which aquaculture would be prohibited. More specifically the identified "aquaculture management area" could only be prescribed where the Regional Council is satisfied the provisions "will avoid, remedy or mitigate the adverse effects (including the cumulative effects) of aquaculture activities on the environment, including fishing and other uses of the coastal marine area." This regulation of marine farming areas is separate from the independent quota management system to avoid stock depletion under the Fisheries Act 1996.

    Hazardous substances and new organisms

32. In New Zealand, the Hazardous Substances and New Organisms Act 1996 (HSNO) regulates the importation of the hazardous substances and new organisms, and releases in the environment, and also regulates the creation of new organisms through scientific activities. The HSNO procedures revolve around applications to the Environmental Risk Management Authority (ERMA), which is constituted under the Act.

33. In brief, the purpose of the Act is to protect the environment and the health and safety of people and communities, by preventing or managing the adverse affects of hazardous substances and new organisms. Principles are stated under s 5, which include a direction on all persons to recognise and provide for the principles of safeguarding of the life supporting capacity of air, water, soil and ecosystems, and the maintenance and enhancement of the capacity of people and communities to provide for their economic, social and cultural wellbeing and the reasonably foreseeable needs of future generations.

34. Section 6 prescribes other matters of relevance including (a) the sustainability of native and valued flora and fauna, (b) the intrinsic value of ecosystems (c) public health (d) the relationship with Maori and their culture with ancestral lands, water... and other taonga, (e) the economic and related benefits to be derived from the use of a particular hazardous substance or new organism and (f) New Zealand's international obligations.

35. In addition, there is a statement under s 7 on the precautionary approach, that all persons should take into account the need for caution in managing adverse effects where there is scientific and technical uncertainty about those effects. Under s 8, the principles of the Treaty of Waitangi are to be taken into account, and under s 9, a methodology may be established for the assessment by ERMA of applications.

36. The HSNO Act has been a subject of the High Court decision in Bleakley v Environmental Risk Management Authority [2001] 3 NZLR 213. In that case, the proposal was to develop through genetic modification a class of Friesian cow, which would produce milk containing a human protein, aimed to assist research into MS. Detailed consideration of the relevant procedures resulted in a finding that ERMA should reconsider the application.

37. Independently, in 2000 a Royal Commission on Genetic Modification was established to hear public submissions. The report is available at http://www.gmcommission.govt.nz The Commission considered more than 10,000 submissions, and essentially affirmed confidence with the existing regulatory systems under HSNO, but with further caveats as to the precautionary approach and the determination of risk factors.

38. The Green Party in New Zealand was not satisfied with the outcome, believing that a permanent moratorium should be imposed on the approval of field trials or releases of GM crops into the environment. Prior to the general election in July 2002, the Labour Government coalition agreed to impose a temporary moratorium. The Hazardous Substance and New Organisms (Genetically Modified Organisms) Amendment Act 2002 imposed a moratorium on the approval of releases or importation of new organisms between 29th October 2001 (backdated) to the close of 29 October 2003.

39. Following the election in July this year, the new Labour coalition affirmed its intention to allow the moratorium to lapse next year, but indicated the membership of ERMA and the guidelines would be reviewed before that date. As a consequence of this decision, the Greens declined to support the Government unreservedly, and remain outside the coalition. Having regard to the close relationship between New Zealand and Australia in trading and scientific matters, the harmonisation of environmental policies and regulatory procedures in respect of GM matters may need further consideration.

    Conclusion

40. The issues mentioned above are some of the many environmental matters that are presently before the Parliament or in the public arena in New Zealand. Other issues could be considered, including the reduction of compliance costs under the RMA, fast tracking or exemption of certain developments or procedures deemed to be in the national or public interest, increasing the efficiency of Environment Court fixtures, and an inquiry into building standards in light of widespread problems of leaks, dampness, and wood rot from untreated timber, in new dwellings and apartments.

41. Related to the environmental matters is the overlay of the Kyoto protocol, and the initiatives to be taken to achieve a reduction in harmful emissions. Recently, the Government has stated that the matters coming under the Kyoto umbrella should be excluded from consideration under the RMA procedures, although that proposition may require further consideration. Also, Kyoto compliance (following the recent Johannesburg summit) may affect the position of Australia in relation to trade advantages against New Zealand manufacturers. The law and practices in Australia at the Federal, State and Local Government level in all the areas noted in this paper are of direct comparative interest.