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Improving Regulation of Environmental Effects in New Zealand’s Exclusive Economic Zone: Summary of Submissions

1 Introduction

2 Overview of Submissions

3 Issues for EEZ Management

4 Policy Options

5 Details of the Proposed Option

6 Legislative Options

7 Other Relevant Comments made by Submitters

Appendix 1: List of Those Sent a Hard Copy of the Discussion Paper

Appendix 2: Newspaper Notifications

Appendix 3: Workshop Attendees

Appendix 4: List of Submitters

Appendix 5: List of Abbreviations

5 Details of the Proposed Option

5.1 Statutory purpose

The proposed option focuses on filling gaps in existing regulation and promoting a consistent approach to environmental regulation across different statutes. It is proposed that the regime focus on environmental effects rather than prescribing the activities it will apply to.

The purpose of the proposed new legislation is “sustainable management”, with environmental, economic, social and cultural dimensions. It is proposed that the purpose be modelled on the RMA.

Thirty-four submitters commented on the proposed scope and purpose. Submissions were received from each of the stakeholder groups.

Modelling the proposed purpose on the RMA had a mixed response from the nine submitters that referred to it. WWF, Todd Energy, Telecom New Zealand and Tourism Industry Association New Zealand (TIA) were unsure about this approach. These submitters seemed to be uncomfortable about how it would be implemented and whether it would incorporate aspects unique to the EEZ environment, rather than disagreeing with the RMA itself. The remaining five submitters were happy with the RMA model, especially as it would provide some consistency between the management of the territorial sea and the EEZ. The fishing industry commented that the proposed purpose was too passive, and that it should actively enable people to provide for their own wellbeing.

Most submitters that commented on the proposed scope and purpose supported the legislation having the purpose of “sustainable management”, although JM Beggs pointed out that this could be open to interpretation. OMV New Zealand submitted that although it agreed with the purpose of sustainable management, there was a risk that this could lead to environmental rules that deliver limited benefit and deter investment.

Five (two representing the minerals industry, two representing the fishing industry, and one individual) submitted that the purpose should be “sustainable development” rather than “sustainable management”. Nautilus Minerals suggested the purpose be “responsible management”. Neptune Resources commented that the proposed purpose could be expanded to reference the promotion of sustainable development “through utilising adaptive management practices, applying to all activities and based upon the best available scientific knowledge”.

Most environmental NGOs and the Auckland Conservation Board suggested that the purpose needs more emphasis on the protection and preservation of the marine environment and its biodiversity, in line with international law, specifically the United Nations Convention on the Law of the Sea (UNCLOS). Greenpeace New Zealand commented that the proposed purpose should include the restoration of seriously degraded ecosystems.

Submitters representing iwi interests pointed out that statutory recognition in the proposals for the active protection of Treaty of Waitangi claim settlements was needed. Te Runanga o Ngai Tahu recommended that “national benefits” should include the maintenance of full and final Treaty settlements.

A number of submitters recommended that clarification on whose wellbeing was being provided for in the purpose was needed; for example, “all New Zealanders”.

5.2 Rules framework

Two types of rules are proposed: mandatory rules to determine thresholds, and discretionary rules for specific areas or activities. Rules could be applied to all activities and their effects, or only those activities that are currently unregulated.

Thirty-six submitters commented on the rules framework. Submissions were received from each of the stakeholder groups.

There was general agreement among the petroleum and minerals industries that some activities should be automatically “permitted” as they were either regulated already or did not have an impact on the environment. These activities include seismic surveys and passage. The New Zealand Defence Force also submitted that they have a number of operations that need to be permitted activities in the interests of national safety. Most environmental NGOs and others, some local authorities and the University of Otago, however, said that all activities should be assessed. WWF suggested that a marine spatial plan could be used to close sensitive areas and identify appropriate areas for specific activities to take place.

Comments from submitters on thresholds for when approval is required for an activity varied. As already mentioned, environmental NGOs submitted that consent and rules are needed for all activities, and so thresholds are not applicable. On the other hand, PEPANZ suggested that thresholds should be set so that only significant effects are addressed. Te Ohu Kai Moana Trustee Ltd submitted that thresholds are useful to avoid unnecessary costs for developers.

The problem of making rules when there is a lack of knowledge about the marine environment was highlighted by a number of submitters. Environment Canterbury suggested there should be a provision to review rules as new information becomes available. Nautilus Minerals and Neptune Resources both emphasised that it is important that rules be clearly defined and like effects treated with like rules. There was agreement among stakeholder groups that consultation is necessary in defining the rules. Environmental NGOs recommended that this should include full public participation.

Twenty-one submitters expressed views on whether rules should apply to all activities or only those that are currently unregulated. Of these submitters, 16 submitted that rules should apply to all activities. These submitters included local government, the minerals industry, the petroleum industry, environmental NGOs, others and the science, academic and research sector. In addition to these 16, Gecko, Greenpeace New Zealand and Aaron Packard, specifically noted that fishing should be included. New Zealand Seafood Industry Council, Todd Energy, Te Runanga o Ngai Tahu, and Te Ohu Kai Moana Trustee Ltd noted that fishing should not be included because it is regulated under the Fisheries Act 1996 and does not permanently occupy space.

Seventeen submitters commented on the likely regulatory costs of a rules framework. Most were unclear on the exact costs. OMV New Zealand identified that it could cost up to $500,000 for a long-term activity in a highly sensitive environment. WWF and Forest and Bird suggested that the costs of the unsustainable management of resources would exceed the costs of developing a strategic system that sets the framework for current and future activities. JM Beggs commented that a sound regulatory framework should reduce rather than increase costs by establishing thresholds beneath which effects are recognised as sufficiently trivial (or perhaps customary), and so would not require any compliance cost. Telecom New Zealand expressed concern at the cost of the process and possible delays, as there could be penalties incurred if the installation of marine infrastructure is delayed.

5.3 Assessment of effects and consideration of applications for EEZ consent

When an activity is not permitted under mandatory rules, it is proposed that an EEZ consent would be required. A decision-maker would need to approve an application for an EEZ consent. This decision-maker would evaluate the proposal based on the adverse and beneficial effects of the proposed activity, as well as cumulative effects and effects on other activities.

Thirty-three submitters commented on this section, discussing the assessment of effects and consideration of applications for EEZ consent. Comments were received from all stakeholder groups but not from iwi.

Of the 30 submitters that commented on the approach to considering applications, six (Taranaki Regional Council, Environment Canterbury, OMV New Zealand, University of Otago, Telecom New Zealand and Kathryn Scarlet) specifically submitted that the approach for considering applications was generally appropriate. Greenpeace New Zealand did not agree with the approach, stating that it should be ecosystem-based and incorporate the precautionary principle.

Nine submitters (2, 6, 9, 15, 16, 26, 27, 29, 31) commented on the lack of knowledge of the marine environment and the fact that this could be an issue when considering applications. MIA and Mike Patrick suggested that there should be a staged approach to gathering knowledge to begin addressing this knowledge gap.

Seventeen submitters commented on the process of evaluating an application for an EEZ consent, including the assessment of effects. Neptune Resources submitted that the criteria for evaluation should match those of the Crown Minerals permitting regime. Some environmental NGOs commented that the impacts on biodiversity and values should also be considered. The Green Party recommended that climate change must be a core element of all decisions.

Seven of these 17 submitters (including three environmental NGOs, a petroleum company and a university) supported the use of some form of environmental assessment for assessing effects of activities. This could be an environmental impact assessment, a strategic environmental assessment, or an assessment of environmental effects. WWF submitted that a marine spatial plan, based on a strategic environmental assessment, would be useful. Telecom New Zealand, WWF and Todd Energy commented that any environmental assessment should be scaled to the significance of the potential effects of the proposal. Forest and Bird and the University of Otago supported the use of an independent review panel to review the evaluation process.

Gecko, SANE, Aaron Packard and Kathryn Scarlet commented that information relating to the evaluation of an application for an EEZ consent should be publicly disclosed. Auckland Regional Council suggested that only those possibly affected by the activity should be notified of an application, and that public notification should be for when an application is over a certain scale.

The New Zealand Historic Places Trust suggested that the definition of historic heritage contained in the RMA could be adopted for the EEZ consent regime. The submitter said that the current identification and archaeological site regulatory regime (under the Historic Places Act 1993) could be adopted in the EEZ, so that EEZ consents could apply to general historic heritage matters.

Fourteen submitters commented on how thresholds for the level of evaluation should be set. Gecko, Aaron Packard and Kathryn Scarlet submitted that thresholds could not be set until there is more information on the marine environment. ECO and SANE suggested that thresholds should be set with public consultation. The University of Otago and Forest and Bird said that thresholds should depend on the scale and nature of the proposed activity. MIA and Mike Patrick (in support of MIA) commented that there should be a “learn as you go approach” to setting threshold levels, identifying short, medium and long-term phases of the process. Nautilus Minerals agreed with this idea, stating that thresholds should be founded on the current knowledge base.

WWF and Neptune Resources submitted that thresholds should not be set. WWF disagreed with thresholds as a large number of small-scale activities could have as much impact on the environment as a single large-scale activity. Neptune Resources suggested that thresholds are not necessary if there is an obligation on the proposer to undertake monitoring.

5.4 Biosecurity

It is expected that the biosecurity impacts of a project would be included in the evaluation of environmental effects. This would include, for example, the risk posed by the release of new organisms introduced on a new structure. The full scope of the project would be considered, including cleaning and maintenance.

It is not expected that the regime would deal with the deliberate release of organisms into the ocean. A new organism approval regime is not planned.

Twenty-one submitters commented on whether biosecurity issues are adequately managed by the proposals. Of these, nine (including environmental NGOs, individuals and local government) submitted that biosecurity issues are not adequately managed. These submitters generally noted that the issue needs to be more carefully considered. Greenpeace New Zealand suggested that risks should not be controlled by conditions, and that a precautionary and preventative strategy is best.

PEPANZ, OMV New Zealand and Todd Energy commented that biosecurity issues are already adequately addressed by the Biosecurity Act 1993. Todd Energy did suggest, however, that biosecurity could still be addressed in an application for an EEZ consent. Mike Patrick was concerned at including biosecurity in the proposed regime unless it dovetails with the Biosecurity Act 1993. ECO highlighted that UNCLOS limits biosecurity controls to within 24 nautical miles of the coastal baseline. Neptune Resources submitted that biosecurity issues could be dealt with either through this or existing legislation.

WWF and Forest and Bird suggested that biosecurity issues within the proposed regime should be addressed and managed through strategic environmental assessments. These organisations said that the scale, intensity and national importance of any risks need to be considered. Neptune Resources said the biosecurity impacts should be addressed when approval for consent is sought. The Auckland Conservation Board commented that concerns could arise after an EEZ consent is granted, which may then require managing.

5.5 Co-ordination with other environmental regulation

New environmental regulation needs to be co-ordinated with other regimes. Any use of rules will need to have regard to rules and area controls imposed under these other regimes.

It is proposed that Ministers or agencies with decision-making powers be consulted when applications are being considered and when rules are being developed. Regional councils should also be consulted on activities that cross (or go close to) the boundary between the territorial sea and the EEZ.

Twenty-nine submitters commented on co-ordination with other environmental regulation. There was general agreement that consultation between decision-makers is a practical way to achieve consistency and address cumulative effects. However, ECO submitted that this approach was not appropriate as decisions could be dominated by short-term financial benefits rather than consideration of the environment.

Nine (7, 10, 23, 29, 31, 33, 34, 44, 45) submitted that it would be best for a single agency to co-ordinate consultation with other relevant agencies, which would provide a more consistent approach. WWF suggested that this independent agency could administer a marine spatial plan, and that this plan, in addition to consultation, could ensure consistency, address cumulative effects, and reconcile national interests.

Taranaki Regional Council, Gisborne District Council and the Auckland Conservation Board suggested that it is critical to consult with regional councils, particularly for activities that cross or are close to the boundary between the territorial sea and the EEZ. The Auckland Conservation Board submitted that this consultation is vital so that local government can see applications for consents at the earliest stage. This consultation would also provide an opportunity for the pubic to comment on activities that might have direct benefit to them.

Neptune Resources, the University of Otago, Forest and Bird, and Telecom New Zealand submitted that there should be an independent panel or independent assessment for co-ordinating environmental management in the EEZ under the different regimes. Neptune Resources suggested this would be useful for quantifying effects. Forest and Bird commented that an independent scientific review panel would ensure the integrity of decision-making.

Te Ohu Kai Moana Trustee Ltd highlighted that the Minister of Fisheries should grant concurrence to any approvals because they have responsibility for the Fisheries Treaty Settlement. Te Ohu Kai Moana Trustee Ltd also noted that it is important to ensure Treaty of Waitangi settlements are protected at the highest level, and that there should be no discretionary powers for a Minister to overwrite them.

5.6 Nature of EEZ consents

It is proposed that an approval under the new legislation would be called an “EEZ consent”. This EEZ consent is permission to undertake a specific activity within set parameters. It is proposed that a consent would cover a number of issues, including the location of the activity, the duration of the consent, and monitoring and enforcement requirements. The administering agency would enforce the conditions of a consent.

Twenty-four submitters commented on the nature of EEZ consents. There was overall agreement with the proposed scope of approvals. Submitters from the fishing, minerals, science, academic and research and local government sectors specifically stated they agreed with the proposed scope.

ECO, Nautilus Minerals, the New Zealand Conservation Authority and Mike Patrick commented on “use it or lose it” provisions that could be included in an EEZ consent. The New Zealand Conservation Authority and Nautilus Minerals supported the provision, while ECO and Mike Patrick were against it. ECO submitted that this provision could push companies into carrying out activities when they are not ready, resulting in what they called the squandering of scarce resources, with significant economic losses.

Neptune Resources and Mike Patrick commented on the relationship between the requirements for consents under this regime and the Crown Minerals regime. Neptune Resources suggested that the areas an EEZ consent should cover include those that are covered in the Crown Minerals Act 1991 permitting process. Mike Patrick suggested that the term of an EEZ consent should tie in with the term for a Crown Minerals Act 1991 permit for the petroleum or minerals industries.

Te Runanga o Ngai Tahu and the Auckland Conservation Board said that the 35-year timeframe from the RMA for a consent is too long, particularly given the uncertainty of effects in the EEZ. They also mentioned that the RMA offers few opportunities to review consents, which could be an issue given the rapid development of new technologies that may have a lesser environmental impact. ECO recommended the 35-year timeframe for a consent be an exception, subject to periodic review.

Matters submitters considered should be covered by approvals in order to give certainty for sustainable commercial investment included:

• certainty of requirements for the consent process

• certainty of occupation

• security of tenure

• transferability

• minimising the effects of overlapping activities in space/time

• a transparent, fair and low-cost consenting regime

• how competition between space and resources will be dealt with

• what rents and royalties will be required

• whether there will be bonds for post-completion clean-up costs

• whether adaptive management will be applied

• who will monitor consents

• the possibility of renewal of consent if the activity continues beyond initial consent duration

• adequate consultation in the development of rules

• the term of consent should be commensurate with the life of the project.

ECO commented that investors should not expect certainty in an uncertain world, and that it is unreasonable for them to expect this, especially in a rapidly changing biophysical world. However, ECO also noted that investors should be given certainty that there will not be capricious changes, and that the Government should be able to adjust - and policies and permits designed to permit the adjustability of - entitlements as more information and knowledge are gained.

Additional matters suggested by submitters that should be covered by approvals included:

• provision to cancel a consent if adverse effects are more significant than anticipated

• values

• biodiversity

• action in event of accidents

• the inclusion of remediation in de-commissioning/end-of-life provisions

• impacts on marine mammals, seabirds and fish

• adaptive management

• the scale, intensity and longevity of the activity

• social and economic benefits

• periodic review of the consent

• the precautionary principle

• ecosystem management.

5.7 Precautionary decision-making

Decisions made under the EEZ regime should recognise uncertainty in any risks to the environment and incorporate a precautionary approach. The precautionary approach suggested in the discussion paper is as follows.

• Decisions to approve or not approve activities, or to mitigate or avoid damage, should be made even when there is a lack of information or when information is poor or uncertain.

• Uncertainty about the effects of proposed activities needs to be recognised and built into decision-making. There needs to be good information about possible effects, and any approvals with adverse effects need to be within the range where the information provides confidence that the effects are understood and can be managed.

Thirty-two submitters commented on precautionary decision-making. Of these, 16 submitted in support for the incorporation of precaution. These 16 included the fishing industry, environmental NGOs, others, universities and a regional council. Environmental NGOs, in particular, wanted the precautionary principle to be applied. ECO stated that:

Precaution should be incorporated through: 1. information sufficiency and scrutiny provisions; 2. formal inclusion of the Precautionary Principle, which is now required in international law; 3. open and accountable government including public disclosure, public input and participation; 4. precaution in favour of the avoidance of environmental harm, not for the status quo; 5. no requirement for compensation when measures are taken to preserve or protect the environment.

OMV New Zealand, ExxonMobil New Zealand (Exploration) Limited (ExxonMobil New Zealand) and Todd Energy submitted that a precautionary approach is not appropriate. OMV New Zealand said that this approach is not appropriate for the offshore oil and gas industry as they have known effects, and went on to say that these effects are easily identifiable and easy to control. ExxonMobil New Zealand was concerned that a precautionary approach could be open to a wide range of definitions and interpretations, leading to a situation where an applicant needs to prove a negative.

Five submitters (9, 10, 28, 29, 31) talked about adaptive management in their submission. Four of these (Todd Energy, Neptune Resources, MWH New Zealand Ltd and Mike Patrick) submitted that this approach was preferable to a precautionary approach. Neptune Resources stated that:

Sustainable development of the EEZ requires a regulatory regime that encourages an exploratory, experimental approach to environment protection and management issues, and emphasises the value of continuous monitoring and periodic adjustment of management regimes and perhaps consent conditions.

Opinion was split on the balance between precaution and encouraging investment. Thirteen submitters specifically commented on this issue. Seven of these submitters (three environmental NGOs, one local authority, one university and two individuals) supported precaution over investment. WWF noted that further research, alongside pilots, should be undertaken before consents are granted. Six of the 13 (submitters from the petroleum industry, fishing industry and two individuals) submitted that development should be allowed, albeit with acknowledgement of a degree of uncertainty. An individual in support of the latter approach noted that a risk management framework could be applied that stimulated government and industry investment in marine research. In addition, Telecom New Zealand commented that a regulatory regime that imposes the precautionary principle on international cables outside the territorial sea would lack a legal basis.

5.8 Existing activities and interests

The legislation should give guidance about when and whom to consult in the preparation of an application for EEZ consent. Iwi, stakeholders (such as industry with operations in the EEZ and non-government organisations with expertise in the EEZ) and some members of the public will have an interest in a proposed activity in the EEZ.

Twenty-two submitters commented on the proposals for managing effects on existing activities and interests. There was a clear distinction between submitters from environmental NGOs and industry. Environmental NGOs (and the Green Party) favoured giving greater weight to environmental concerns and even the introduction of payments from resource users for the use of “public goods”. Submitters from all industry sectors favoured a more market-based approach, with arbitration guided by a government regime being used to resolve disputes. A common thread was the problem involved in defining the effects of resource use when there is so little knowledge about the EEZ environment.

Commenting on the adequacy of proposals for managing effects on other activities and interests, submitters from the petroleum and minerals sector noted, given the high costs of some activities, that it is important to ensure affected and interested parties are clearly defined. PEPANZ, for example, expressed concern that the rights of interested and affected parties should be clearly defined because the costs of any delays to a project can run into hundreds of thousands of dollars a day. Industry submitters noted that the proposed system should focus on fixing existing gaps in the legislation and regulations in the EEZ.

Greater Wellington Regional Council noted that managing effects would require a properly constructed oceans policy rather than a specific piece of legislation for the EEZ. The Council also believes that the proposals should be explicit about the difference between effects on existing activities and competition for the same space or resource.

The New Zealand Seafood Industry Council submitted that the role for the Government should be to establish a regime that will provide resource users with appropriate incentives to make trade-offs between themselves.

Several submitters commented on the need for clear guidance about national benefit for deciding between competing applications for an area of the EEZ. Te Ohu Kai Moana Trustee Ltd, for example, did not agree with an approach that could result in an attenuation of the fisheries settlement rights without direct agreement between the applicant and iwi.

Greenpeace New Zealand suggested that the proposals did not make proper provision for the future establishment of marine protected areas and marine reserves. It recommended that a moratorium be imposed on consents for any new activities in the EEZ until future plans for marine protected areas are developed and candidate areas identified. Several environmental NGOs submitted that activities that provide the greatest national benefit should not be limited to economic and cultural factors but must also include environmental factors.

Of those who commented on the adequacy of the proposals for managing effects on other activities and interests, 15 generally supported redress for an existing activity when it is affected by a new activity. Environment Canterbury, MIA, and Nautilus Minerals pointed to the need for detailed information about the area in question to allow accurate assessment of the effect of the new activity on the existing activity.

Many submitters noted the difficulty in quantifying costs to existing users of new developments when so little is known about the EEZ environment, and see a need for more detailed information. An example of the need for detailed information about the area was given by Nautilus Minerals, who noted that “fisheries could argue mineral exploration diminishes fish stocks, while mineral exploration companies would argue it is in fact fishing that diminishes fish stocks”. The minerals industry submitted that it is important to be able to correctly identify which activity, if any, is responsible for effects on the environment or others using the area.

There was wide support for the use of arbitration as part of the redress process for resolving issues that arise from the introduction of new activities into an area. Some submitters preferred the use of privately agreed arbitration instead of government-mandated redress to resolve resource-use issues. The Auckland Conservation Board believed that it is essential that avenues for redress be built into all permit reviews and consents issued.

Several submitters were also concerned about the cumulative effects of activities in the marine environment. Several of the environmental NGOs considered that redress for the environmental impact of activities should be paid by those using the resource. The environmental NGOs noted that there should be no redress for activities to protect or preserve the marine environment or for other sustainability measures.

ECO noted that where rival commercial benefits are in conflict, both should pay society (or Maori) resource rents for the benefits they gain. ECO commented that these resources are public, and permission to use them should always be subject to the sovereignty of the Crown (or Maori).

5.9 Consultation on applications for EEZ consent

The legislation should give guidance about when and who to consult in the preparation of an application for EEZ consent.

The discussion paper proposed that the EEZ be managed at the national scale by central government. This is appropriate because there is a strong national and international community of interest in the EEZ. The level and nature of the interest from the public is different to that for activities on land and in nearshore coastal environments, where people are directly or proximately affected by activities.

There was wide support from submitters for consultation provisions, not just on EEZ consents but also in the development of EEZ environmental rules. Since the rules will set the general management framework, and will define when activities need consent, they were seen as being as important as the consent procedures. WWF considered that rules should form part of a marine spatial plan, to be developed in consultation with stakeholders.

Local government submitters pointed out the need for consultation on applications with all local authorities. This consultation would ensure consistent management, and the ability to draw on local government marine management experience.

There was some debate about how wide the opportunity for consultation should be. Industry submitters tended to favour consultation focused more on stakeholders with a particular interest in proposals. Neptune Resources, for example, mentioned “stakeholders of merit”. Todd Energy submitted that intensive RMA-style consultation would not be appropriate. MIA noted the importance of the Government working closely with EEZ operators. Industry submitters noted the desirability of a centralised consenting agency to manage consultation.

Some other submitters, such as environmental NGOs and the Green Party, supported more general public consultation on rules and applications, based on a wider public interest in biodiversity and intrinsic values. ECO, for example, noted that “values are at stake”, not just matters of expertise.

Te Ohu Kai Moana Trustee Ltd, Te Runanga o Ngai Tahu and the Green Party noted the importance of honouring kaitiakitanga (or guardianship) and shared decision-making. These submitters also noted the importance of actively protecting the interests of iwi in the fisheries settlement, along with other interests in the EEZ.

When commenting on interests that should be taken into account via consultation, industry submitters noted the value of EEZ resources and activities, not just to individual developers but to the country as a whole. Telecom New Zealand, for example, noted “the critical impact of international submarine communication cabling infrastructure for New Zealand and for its own business”, and the need to “maintain submarine cable connectivity to meet the Government’s policy objectives in numerous sectors”.

MIA stated that:

... minerals exploration and prospecting are low-impact, knowledge-generating activities, with high public value and therefore all encouragement ought to be given for the generation of that knowledge, increasing the value of the Crown’s mineral estate.

Neptune Resources noted that appropriate government bodies are currently in place to represent public interest. This submitter suggested that decision-making rests with the Government, and due process should not be undermined by groups with the potential to cause delays. They went on to say that iwi and environmental NGOs with expertise in the EEZ would need to define their cultural attachment or expertise. Neptune Resources also noted the value of educating the public to understand company objectives and operations to avoid misunderstandings.

Local government noted an interest in cross-boundary issues between the territorial sea and the EEZ. These issues include where offshore facilities require onshore facilities.

Environmental NGOs and some individuals noted their interest in biodiversity and ecosystems-based management, and sustainable management for future generations. For example, Greenpeace New Zealand stated its interest in “the promotion and perpetuation of non-use values and the protection of biodiversity, preservation of the natural marine environment, and restoration of degraded marine ecosystems in the EEZ”. In many cases, these submitters’ interests went beyond environmental assessment of individual activities; for example, WWF proposed marine spatial plans and strategic environmental assessment.

Some submitters noted issues of particular importance to Maori. The Green Party pointed to a need for recognition of kaitiakitanga and shared decision-making. Te Runanga o Ngai Tahu submitted that the proposals failed to recognise the role of iwi as a Treaty partner and the special rights associated with this. This submitter referred to the exclusive Treaty development right fisheries claim and the outcome of the Ngai Tahu Maori Trust Board v Director-General of Conservation [1995] Court of Appeal case. Te Runanga o Ngai Tahu noted that in this case it was made clear that to adhere to the Treaty principles, consultation needs to be given real consideration, and in some circumstances actual preference to be given to the substantive interests of Ngai Tahu. Te Ohu Kai Moana Trustee Ltd submitted that its over-riding concern was protection of the Treaty fisheries settlement, and to advance the interests of iwi individually and collectively, primarily in the development of fisheries, fishing and fisheries-related activities.

In terms of the process and costs of consultation, environmental NGOs and some other groups favoured applicants meeting the costs of consultation. Other submitters noted, however, that this position is not justified in all cases. Those supporting the applicant meeting the costs suggested that since activities would provide economic benefits to the applicants, it was appropriate for them to meet consultation costs. Greater Wellington Council, for example, submitted that the tax payer should not pay for the private exploitation of the nation’s resources.

WWF suggested a levy to facilitate public engagement in an EEZ management framework. ECO similarly suggested that applicants should pay a percentage of the value of their proposal into a fund for public consultation and public expert reports, support for environmental legal aid and participation costs. Other submitters noted that developments in the EEZ have a public good element (e.g., economic benefits to New Zealand as a whole), and greater information about the EEZ will support the management of environmental effects responsibly in the future.

In general, industry submitters supported costs either lying where they fall, or being supported by the Crown. Telecom New Zealand submitted that consultation costs should lie where they fall, stating that this would reflect the real value of the competing stakeholder interests.

MIA submitted that while minerals exploration is in the public good arena, full-scale mining may be more of a private good. This, it suggested, would mean the costs of establishing an EEZ process and consultation focused on minerals exploration should be borne by the Crown. Nautilus Minerals submitted that all those involved in consultation should cover their own costs, and that ultimately the Government will generate rent from the economic activity.

5.10 Cost recovery

It is proposed that new legislation provide for a cost-recovery regime. This regime would include the recovery of the costs of receiving and processing applications, and ongoing administration and other costs (such as monitoring and enforcement) of an EEZ consent. The regime would also include the costs of any additional research required to assess environmental effects.

Twenty-five submissions explicitly answered yes or no to the need for a cost recovery regime. Of these, 19 agreed and three disagreed with cost recovery, and three agreed to limited cost recovery. The latter three commented that it should be recognised there are industries already having costs recovered under other legislation. These submitters also suggested the contribution some activities make to the knowledge base should be recognised. All submitters that responded to this question from local government, environmental NGOs, iwi, the telecommunications industry, others and the petroleum industry, generally supported the need for a cost recovery regime. Submitters from the minerals and fishing sectors were split in their support.

Twenty-one submissions discussed how to recover costs and which costs could be recovered. Te Ohu Kai Moana Trustee Ltd identified two broad options for cost recovery: a fisheries approach or an RMA approach. This submitter identified that a fisheries approach recovers costs where government services benefit a harvester, but it does not recover costs for public good and service. An RMA approach recognises that private and public services may be bundled together, and low levels of cost recovery are set across all activities. Taranaki Regional Council proposed that the principles set out in the RMA and Local Government Act 2002 be followed. Greater Wellington Regional Council proposed that charging regimes should be worked out for renewable and non-renewable resources, recognising their inherently different nature in terms of sustainability. TIA supported a cost recovery regime that would fund research into environmental effects, to ensure the right decisions are made to balance commercial activity and the protection of marine biodiversity.

A common concern among submitters from the fishing, petroleum, minerals and telecommunications industries was that other fees being recovered by ministries already regulating these activities needed to be acknowledged. These submitters also highlighted that their obligations under international law need to be recognised. They commented that the cost recovery regime should be the simple recovery of actual and reasonable costs to cover the permitting application process, possibly with rates independently determined in relation to the work undertaken. These submitters also noted that information on the EEZ environment can be gained through some of the activities of these sectors (e.g., minerals exploration), which should be encouraged and actively supported, and therefore the costs of services provided in the public interest should not be included.

Many other submissions supported the above view. These submitters added that the rate of cost recovery should depend on the degree of public good, national interest and the environment (i.e., it should be broken down into areas of responsibility), and that cost recovery may be appropriate when a stream of benefit flows from an activity derived from a Crown-owned natural resource in the EEZ. JM Beggs noted that cost recovery should not reach levels that are burdensome on environmentally responsible commercial activities. This submitter also commented that applicants would expect to fund research, but should have full control over the conduct of the research.

Environmental NGOs that responded to this question and the Auckland Conservation Board supported the recovery of costs from using natural resources and for these to be borne by the applicant. Costs these submitters suggested should be included were for: administration, monitoring, assessing effects, regulation and enforcement of activities, public participation, and when a consent is appealed or reviewed. Greenpeace New Zealand proposed that all costs be recovered and that a liability regime could ensure the appropriate level of bond and/or insurance is paid by resource developers prior to development. WWF suggested it is important that the proposed outcomes remain focal to an EEZ management framework, and that the interests of the public (not individual companies) be central to the process. Te Runanga o Ngai Tahu proposed that costs recovered from private companies profiting from the use of “commons” be used for further research and monitoring.

5.11 Rentals, royalties and other benefits

The discussion paper sought feedback on whether it would be appropriate to charge rentals or royalties, or to capture other kinds of benefits, such as those discovered through biological prospecting activities. To capture benefits, clear justification would be needed. Charging would also need to be considered in the legal context of New Zealand’s international rights and obligations in the EEZ.

Twenty-five submissions responded to this question. Seventeen expressed support for some form of rental and royalty charge, six disagreed, and two considered there was not enough detail or that it was too early in the process to comment on the appropriateness of these charges.

Six (including local government, environmental NGOs, others and an individual) submitted their support for charging rentals and royalties when the profits from activities end up overseas or when the resource use is exclusive. These submitters suggested the charging of rentals and royalties would ensure the greatest national benefit for New Zealand. Environment Canterbury and KASM commented that these charges should not be seen as compensation for effects, and should not be set at “token” levels.

Nautilus Minerals suggested rents should be in place to ensure companies perform against exploration title requirements. This submitter highlighted that there is a royalties regime in place for land-based minerals, so in principle the EEZ regime should be the same as that used onshore. SANE added that sustainability is strengthened by using pricing regimes. Local Government New Zealand also suggested that local government development levies be applied as part of the consent process when development in the EEZ also has significant impacts on land use and infrastructure onshore.

Greater Wellington Regional Council submitted that a charging regime for renewable resources should benefit the people of New Zealand in a way that ensures the resource remains sustainable. This Council also questioned whether exploitation of finite assets for no benefit to the people of New Zealand should be allowed. In terms of non-renewable resources, Wellington Recreational Marine Fishers Association suggested an area should be leased and royalties charged at a very high rate in recognition that the resources are non-renewable. ECO recommended there be different resource rental and royalty charges for the extraction of resources, and externality payments for environmental harm and for the occupation of public space. Auckland Conservation Board noted that aquaculture installations could require a different regime (e.g., rentals on space), because this activity bears additional costs in feeding their resource before benefiting from the product. This submitter recommended that a proportion of these monies needs to be tagged for research and conservation purposes in the offshore marine area.

Te Runanga o Ngai Tahu noted that, given Ngai Tahu’s rights under the Treaty of Waitangi, there should be some entitlement for that iwi to rentals, royalties and other benefits, particularly as the Foreshore and Seabed Act 2004 only operates to 12 nautical miles.

Among those submitters that did not support rental and royalty charges, the main reason given was that many of the activities that are likely to occur in the EEZ are already charged rentals and royalties under existing legislation. Some submitters suggested that such charges under the EEZ regime would be viewed as duplication. The University of Otago added that rental or royalties should not be charged for activities that give rise to zero resource depletion. Telecom New Zealand commented that under UNCLOS they have express freedom to lay, operate and repair international cables, and that therefore no royalties or rentals should be charged for these activities.

New Zealand Seafood Industry Council suggested the proposals contained no context or analysis in terms of which rentals, royalties or other benefit payments could be appropriately considered. Te Ohu Kai Moana Trustee Ltd suggested the question of ownership of mineral resources had not been satisfactorily resolved between the Treaty partners, and that extending any regime beyond these could not be agreed to. This submitter suggested that predetermining issues of ownership would be unacceptable. Todd Energy also noted that while they supported having rental and royalty charges set at reasonable levels, it should be remembered that New Zealand benefits from the exploration and development of the EEZ’s economic resources.

5.12 The decision-maker

The discussion paper proposed that decisions on applications and any rules be made by a Minister, or kept at arm’s length by an independent decision-making body. Both models are used in New Zealand.

Thirty-six submitters commented on the decision-maker. Although the discussion paper gave the option of selecting a different decision-maker for rules than for applications, generally all those who responded to this question selected the same decision-maker for both rules and applications.

Nine submitters supported an independent agency to make final decisions on the rules and applications for EEZ consents (1, 8, 21, 23, 28, 30, 32, 35, 38), with some noting support for the escalation of decision-making to a Minister if the application is contentious or of significant risk. Eleven submitters supported having a Minister as the preferred final decision-maker (10, 19, 27, 28, 29, 31, 33, 37, 44, 45, 46). Greenpeace New Zealand supported the Minister as the final decision-maker on just the applications.

Other options for the final decision-maker put forward were Cabinet to make decisions on rules (Greenpeace New Zealand), or an inter-departmental agency to make decisions on both rules and applications (Environment Canterbury). PEPANZ recommended having one agency to handle cross-boundary applications across the territorial sea and EEZ, which was supported by Northland Regional Council. Chatham Islands Council also supported this, submitting that local and central government should be partners in the decision-making process. Four submitters (6, 9, 36, 43) recommended that collaboration with stakeholders (including iwi) needs to be part of the decision-making process.

Thirteen submitters suggested that rights of appeal should be provided other than judicial review (1, 2, 6, 9, 13, 17, 21, 27, 31, 34, 37, 45, 46), with three (31, 34, 45) recommending the involvement of the Environment Court. Reasons given for when appeals could be made were if:

• the decision is not aligned with the purpose of the legislation

• the decision was made with inadequate information

• there are competing rights to a resource or space

• the decision relates to whether a new activity could cause undue adverse effects on iwi fisheries settlement.

Greenpeace New Zealand also recommended that the cost of appeal be covered by the applicant. OMV New Zealand suggested that to avoid delays or postponements, appeals could be dealt with at official/ministerial level.

Neptune Resources did not agree with there being the right of appeal, unless the decision was based on inadequate information. Auckland Conservation Board did not agree to the right of appeal other than by judicial review, to ensure consistency and clarity of decisions, and to confer a status to those decisions. This submitter suggested that this process would signal the importance of decisions based on sound criteria, rather than give an impression that decisions could be made lightly and easily overturned.

Tasman District Council commented that the paper had no discussion about why some existing legislation includes appeal rights but other legislation does not.

5.13 Administering agency

Responsibility for a new regime could lie with an existing agency or a new agency. Determining the best agency includes consideration of capability, cost effectiveness and conflict of interest with other functions and powers. An agency will also require appropriate resourcing.

The discussion paper proposes the roles and possible agencies for the administering agency.

Thirty-three submitters commented on a preferred administering agency. A number of submissions commented on the appropriateness of several agencies, as indicated in Table 1.

Table 1: Support for or against the possible agencies listed in the discussion document*

* Included is support for the agency as an independent lead or as part of a joint administering agency.

Other suggestions by submitters for the administering agency, outside the list provided in the discussion paper, were:

• a new agency, or “one stop shop” (seven submissions supported)

• a joint agency comprising of Department of Conservation, Ministry of Fisheries and Ministry of Economic Development (one submission supported)

• the Ministry of Transport (one submission against)

• the National Institute of Water and Atmospheric Research Ltd (one submission supported)

• a joint government/industry board (one submission supported)

• a joint/interdepartmental agency to consider cross-boundary issues (three submissions supported)

• the agency for which the legislative gap has been identified (one submission supported).

The requirements of the administering agency were discussed by a number of submitters. Suggestions were that the agency:

• have an independent mandate

• create a new institutional framework, as well as co-ordinating and collaborating with relevant sectors and between government departments in order to take an ecosystem approach

• not assign its responsibility to any existing agency if it does not fit with the core business or purpose of that agency

• involve the New Zealand Defence Force, to assist with the monitoring and enforcement of regulations

• establish an independent scientific advisory board to provide impartial advice to the administering agency, decision-maker, stakeholders and public.

Reasons for supporting the Ministry for the Environment as administering agency included its perceived neutrality, minimal conflicts of interest, and experience in leading oceans policy. Environment Canterbury, Local Government New Zealand and Tasman District Council noted that in order to fulfil this function, the Ministry for the Environment must be adequately resourced.

Reasons for supporting Maritime New Zealand as administering agency included familiarity with environmental administration and that its operational role is well aligned with the proposed EEZ regime. It was also suggested that Maritime New Zealand is experienced in the promulgation and administration of environmental rules. ECO suggested the formation of a new oceans agency which might be a division of Maritime New Zealand with new powers.

Auckland Conservation Board suggested the Department of Conservation should be the administering agency, because it has an environmental, not economic, focus. MIA suggested that the Ministry of Economic Development would be the best body to co-ordinate a whole-of-government approach. Nautilus Minerals suggested that some form of environmental council could be established.

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