Resource management reform: Proposals for greater enforcement and transparency

Many are aware that in July the Resource Management Review Panel (Panel) suggested a suite of reforms that include repealing the Resource Management Act 1991 (RMA) and replacing it with a new Natural and Built Environments Act (NBEA), a new Strategic Planning Act (with spatial plans) and new Managed Retreat and Climate Change Adaptation Act. Our summary of the reforms is available online.

We have identified three things you may not know about this upcoming reform programme that are likely to be of interest to organisations interfacing with the resource management system in future. They are:

  1. Economic tools are more likely to be used to incentivise environmental outcomes.
  2. Proposals for greater enforcement and transparency will lead to greater public knowledge of environmental non-compliance.
  3. Māori perspectives will be more integrated into New Zealand’s resource management system.

This article is focused on the second point.

Proposals for greater enforcement and transparency will lead to greater public knowledge of environmental non-compliance

Integration is an underlying theme of the recommendations of the Resource Management Review Panel. The Panel recommends the integration of district plans into combined plans, integration of existing and new legislation, as well as the integration of compliance, monitoring and enforcement (CME) functions.

The Panel recommends creating new independent, regional hubs to focus on CME, passing on costs associated with CME and increasing transparency about environmental non-compliance.

A new sheriff in town: independent, regional hubs will be created and funded to focus on CME

The Panel has recommended establishing regional hubs with specialist resource management expertise to undertake all resource management CME functions on behalf of all local authorities in the region. Sharing resources is intended to address concerns related to regulatory and jurisdictional fragmentation and confusion, operational overlaps, conflicts and biases of local authorities and to strengthen focus in this area so it is not undermined by competing functions and priorities.

The Panel recommends that the regional CME hubs would have a combination of personnel and resources from all local authorities in the region and be supported by the Environmental Protection Authority (EPA). Each regional hub would be created with independence, enforcement discretion and structural separation from local authorities in the region to mitigate against potential bias and conflicts of interest (actual and perceived).

The Panel has recommended that these regional hubs have national oversight and coordination, managed by the Ministry for the Environment (not the EPA). Consistency and information sharing will also be built into planning processes at a regional level between regional hubs and through a new regional joint planning committee that has mana whenua involvement. Provision may be made to involve mana whenua in provision of CME services and whenever that happens those costs should be reimbursed. The aim is to have greater integration with cost efficiencies that will also improve capability and capacity in skills, while remaining at arm’s length from undue influence from elected officials and retaining local knowledge.

Comparison of these regional hubs with WorkSafe’s model are inevitable. For example, the Panel recommends that regulators be able to accept enforceable undertaking agreements (a tool introduced in New Zealand with the Health and Safety at Work Act 2015); that legislation enables revocation of resource consents for serious or repeated behaviour; and new approaches to minor breaches are introduced through reparation and the like as well as creative sentencing models.

The Panel does not prescribe the form the hubs should take, such as a shared services model or council-controlled organisation. They may vary from region to region. However, it is clear there will be a new ‘sheriff’ in each region, tasked with improving CME and lifting environmental outcomes.

New CME measures will increase costs for resource consent holders and others impacting the environment

The Panel has a range of recommendations to support CME regulators in penalising those who are breaching environmental requirements. Briefly they include increasing maximum financial penalties, prohibiting insurance for fines and infringement fees. All of these will increase costs for those unlawfully impacting the environment.

The creation of regional hubs will also have a cost. The Panel recommends that funding is essential to their operation. Funding is suggested to come partly from local authorities (on a proportional and equitable basis) and partly from cost recovery mechanisms. This means that it is likely that resource consent holders will face new or increasing annual fees to support CME activities.

Costs are also likely to increase for those who don’t need resource consents, where local authorities are focused on monitoring permitted activities of interest, as the Panel has recommended recovering these costs too. This is a tenuous regulatory cost – the activity is allowed yet the person undertaking the activity is still regulated through paying costs to check that the activity remains acceptable. The Panel has also recommended that some costs for investigating unauthorised activities be recovered where they relate to pollution.

Public access to a CME national database will lead to greater attention on the track record of companies in particular

Under the RMA, anyone can face environmental liability. It is well-established that environmental liability is strict liability, intention is irrelevant, and this is unlikely to change. Transferring this aspect of the RMA into new legislation will have a greater impact for companies if the Panel’s focus on a high degree of transparency is introduced.

The Panel recommends that as part of a broader national oversight system, a publicly available CME national database should be established to record the outcome of all enforcement action. Administered by the Ministry for the Environment this register will include court judgments, abatement notices, infringement notices, enforceable undertakings and warning letters. This could be comparable to Worksafe’s online register, and fits into the Panel’s broader theme of increasing deterrence for environmental offending and bringing penalties in line with overseas environmental offences and national offences under other regimes. It also reflects the approach in recent amendments to the Climate Change Response Act which enables the publication of individual participants’ emissions information.

As a result, previous convictions and non-compliances will play a greater role in sentencing decisions as it will be easier to locate this information.

Greater access to information about environmental compliance will inevitably incentivise actions aligned with better environmental outcomes. The Panel recognises that transparency is likely to impact central and local government procurement decisions. It is also likely to impact broader decision-making and empower NGO and shareholder activists seeking environmental improvement through media and direct engagement. So, organisations should start preparing now for that level of transparency.

Overall, the Panel’s recommendations reflect a strong message that compliance should be prioritised because the costs for failing to comply will be high.

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