20 March 2006

Investors considering New Zealand business opportunities should be aware of significant amendments passed to its environmental legislation – designed to streamline the approval process for activities utilising natural resources.

New Zealand’s Resource Management Act 1991 (RMA), the purpose of which is to promote the sustainable management of natural and physical resources, governs those responsible for managing the use, development and protection of land, air, freshwater resources (rivers, lakes, groundwater) and the coastal marine area and the impact of human activities on the environment.

Consents under the Act are often required before the start of the construction and operation of a new industry. This means potential investors in New Zealand should consider possible consent requirements as part of their due diligence processes.

Since the passage of the Act, a number of amendments have been passed, the most recent of which was in August 2005, when the Resource Management Amendment Act 2005 came into force. The Amendment Act is the most fundamental reform to the RMA since its enactment, and was the culmination of extensive consultation with key stakeholders including the courts, local government, the planning community and non-government organisations.

Consultation leading to the Amendment Bill identified as key priorities:

• Uneven quality assurance in how councils are performing;
• The costs, delays and uncertainties of RMA consenting processes; and
• The abuse of participation rights.

The Amendment focuses on the mechanics of the RMA, addressing application processing time, costs and inconsistencies in processes and decision-making.  Significant operational differences include:

• The Amendment requires upskilling for those who conduct consent hearings, entailing training and accreditation; 
• Major changes are required to the operation of local council consent hearings, with councils having new powers to force pre-hearing meetings, formalise consent hearings and sanction those who do not cooperate. These reforms, together with compulsory accreditation, should help raise the bar on the quality of hearings before councils; and 
• The Amendment clarifies that there is no obligation on an applicant or consent authority to consult iwi or hapu. These changes should help address incidents of abuse, whereby groups not having the support of iwi or hapu leaders have claimed tangata whenua status in order to secure leverage in RMA processes.

Among the most significant changes is the removal of ‘de novo’ hearings at the appeal stage – which in essence see the whole case being re-litigated from the beginning – to a more focused appeal on the issues of contention. The Environment Court must now have regard to the decision that is being appealed, and is given explicit powers to accept evidence that was submitted at the consent authority hearing and to direct how evidence is to be given to the Court. This enables the Court to take evidence as read. Having regard to the primary decision and taking evidence as read should help shorten hearing times. 

Initiatives such as the compulsory accreditation of those who conduct council hearings, together with the reforms to ensure more robust first-instance hearings, will hopefully lead to better-quality decisions – which in turn will reduce the need for appeals and consequently reduce the delays of consenting processes.

The Amendment represents a considerable development of the RMA. For consenting and planning processes, the reform significantly raises the bar on how council consenting and planning processes are expected to operate.

Investment New Zealand has produced a six-page guide to resource consents for investors. To obtain a copy of this free information booklet, please contact louella.pasquill@investmentnz.govt.nz.

Additional information on the Act, including links to copies of the legislation, is available on the Ministry for the Environment website at www.mfe.govt.nz/laws/rma/.