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Conclusions

Environmental management in New Zealand's EEZ (from 12 to 200 miles offshore) is currently inconsistent and fragmented. Some activities have controls to protect the environment, while others do not. What is needed is a regime that delivers consistent outcomes, is comprehensive, provides for future activities, and does not place undue compliance costs on industry.

Lessons can be learnt from how other countries manage environmental effects in the EEZ. Australia and the UK, in particular, have comprehensive regimes to assess and manage environmental effects: Australia uses an overarching 'umbrella' act and the UK does a strategic assessment of each region within its seas.

Four possible approaches for managing environmental effects in New Zealand's EEZ have been identified.

  • Option 1 - the voluntary approach: government would work with industries operating in the EEZ to develop appropriate environmental management procedures. Compliance with these procedures would be voluntary (at least initially).
  • Option 2 - filling the gaps in current legislation: this would involve putting in place new legislation to cover activities not already covered, and improving the environmental management provisions of existing legislation as necessary.
  • Option 3 - one Act to manage resources in the EEZ: all of the current legislation applying in the EEZ would be replaced by one Act controlling resource management (including allocation of resources and/or management of their effects) in the EEZ across the board (ie, in relation to all activities).
  • Option 4 - an umbrella Act: this would involve creating a new piece of legislation requiring environmental assessments to be carried out for all activities with the potential to have significant environmental effects (ie, assessments would be required for all activities with effects above a defined threshold of acceptable impact, similar to the approach taken under Australia's Environmental Protection and Biodiversity Conservation Act 1999). Detailed regulation for specific activities would continue to apply through existing legislation.

Table 3 summarises the benefits and disadvantages of each option.

Table 3: Summary of the benefits and disadvantages of four options to improve environmental management in the EEZ

Option 1: The voluntary approach

Benefits

  • It allows for incremental change to the management regime.
  • Industry have more involvement in the changes.
  • It is relatively inexpensive.
  • Industry are able to utilise their knowledge.
  • Environmental management would be flexible and adaptive.

Disadvantages

  • There are limited incentives for businesses to raise environmental standards.
  • A voluntary approach would have no legal standing. Government cannot enforce compliance with voluntary operating procedures.
  • Businesses could not be certain that the rules would not change.
  • Assessing the cumulative effects of activities would be difficult.
  • Not all businesses would take part, with patchy environmental results.

Option 2: Filling the gaps in current legislation

Benefits

  • Management can be tailored to each activity.
  • It utilises existing legislation.
  • This option provides certainty to business.

Disadvantages

  • It would be resource intensive to implement this option.
  • The management regime would not be adaptive to changing circumstances.
  • It would be difficult to ensure that the environmental effects of future activities are covered.
  • Assessing the cumulative effects of activities would be difficult.

Option 3: One act managing resources in the EEZ

Benefits

  • It would be easy for businesses to only have to interact with one agency.
  • The management regime would take a consistent approach to managing activities.
  • The rules would be clear, which would provide certainty to business.
  • Future activities are covered.
  • It would be easier to assess the cumulative effects of activities.

Disadvantages

  • It would be very resource intensive to implement this option.
  • The compliance costs for activities would be high, because there is no threshold below which activities do not have to go through an assessment of environmental effects. Management would not be flexible.
  • Environmental management cannot be tailored to each activity.
  • The institutional arrangements would be difficult to implement.

Option 4: An umbrella act: one assessment of environmental effects

Benefits

  • The management regime would be flexible, because there would be a threshold before the activities are assessed.
  • The management regime would take a consistent approach.
  • It would be easier to assess the cumulative effects of activities.
  • Current legislation is utilised.
  • The umbrella act would cover new activities that will come up in the future.

Disadvantages

  • There would be a two-stage process: an assessment of environmental effects as well as rules and regulations that are already in place.
  • The institutional arrangements to implement this option could be difficult.

Both Options 2 and 3 have been rejected by the Ministry for the Environment because the disadvantages of both options outweigh the benefits. Option 2 (amending current legislation) would not cover future activities and would not ensure a consistent approach. Option 3 (one act managing resources in the EEZ) could cover all activities effectively, but would not be practical to implement.

The preferred approach is to create a two-step process: Option 1 to be implemented in the short term (one to two years) and Option 4 to be developed over the medium term (two to three years). Option 1, the voluntary approach, allows industry to be involved in the creation of voluntary standards (which will more likely result in greater buy in), and enables systems to be put in place that are specific to different activities. However, this option is only likely to be successful in the short term, with long-term benefits being eroded by increasing numbers of operators and activities in the EEZ requiring a more regulatory approach.

Option 4, the umbrella act approach, is the most flexible and adaptive in terms of the range of existing and future activities in the EEZ, and it allows for a consistent approach to the assessment of environmental effects in the EEZ. The umbrella act allows government to cover any gaps in existing legislation without having to amend activity-specific legislation.

Combining these two approaches means that industries that take advantage of the voluntary approach are able to engage with government and help develop the umbrella legislation to be put in place over the medium term.

Next steps

This paper recommends that the best approach to environmental management in the EEZ is to develop umbrella legislation over the next two to three years. In the short term a voluntary approach should be developed for key industries currently operating in the EEZ. Industries that took part in a voluntary approach would be recognised in any future legislation.

In the first instance, we propose that priority be given to developing an industry-wide agreement with the oil and gas industry (subject to their agreement), which is the key industry that is currently expanding into the EEZ. This agreement could be developed on the basis of work done with OMV to date and modelled on the packaging accord. Voluntary agreements could then be progressively sought with other industries operating in the EEZ over time.

Work on developing any legislation can begin once Oceans Policy resumes and Cabinet approval has been sought.

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