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Part F - Improving natural resource allocation

Background

162. The RMA establishes a regime where natural resources (freshwater, geothermal, coastal space and assimilative capacity of air) are allocated on a "first- in first-served" basis. First in first served gives preference to current rather than potential users, and avoids having to address the most economic allocation of the natural resource.

163. The RMA does not identify specifically that it is the role of regional councils to undertake natural resource allocation in their function. Nor does it provide any certainty for current resource users beyond the term of the consent that has been granted.

What is the problem?

164. Problems in the allocation of natural resources in New Zealand are caused by a mix of changing demand and supply, legislative constraints, capability, council conservatism and lack of guidance. Resources are scarce in some regions with growing environmental pressures. Users have concerns about security of rights which affect investment. The problems are often, though not always, specific to resources and regions.

165. The legislative issues concern competing demand for resources and managing pollution. Managing discharges becomes an allocation issue when a cap or standard is set and reached, and allowing new discharges requires reductions by existing users because an acceptable level of pollution has already been reached.

166. Some of these issues are already being addressed through work such as the aquaculture reforms (for which legislation is to be passed this year) and the Sustainable Development Water Programme of Action (half-way through a two year schedule) [The Water Programme of Action seeks to achieve the following outcomes: freshwater is allocated and used in a sustainable, efficient and equitable way; freshwater quality is maintained to meet all appropriate needs; and water bodies with nationally significant natural, social or cultural heritage values are protected. It is looking at a range of new allocation tools and methods that can provide greater flexibility.].

What is the outcome sought?

167. In the short term the focus will be on:

  • [Information from the paper has been withheld under s 9(2)(h) of the Official Information Act (1982).]
  • clarifying for business that existing investment can be considered when consents are 'renewed' (common practice but no explicit policy)
  • providing abilities for plans to transfer discharge permits within catchments/airsheds, eg.when this may be the most efficient means of allocating air shed emissions
  • addressing natural justice issues (recently emerged) where an existing permit holder can be 'gazumped' (prevented from applying) by someone applying for their current activities ahead of them.

What is proposed?

168. There are some simple amendments considered necessary to proceed with now to address resource allocation issues:

(a) Explicit recognition of natural resource allocation as a role and responsibility of regional councils.

(b) Allow for the Minister for the Environment to require a natural resource allocation plan.

(c) Require consent authorities, when considering applications to allocate resources following the expiry of consents for the use of resources, to recognise existing investment as a factor in their decision making.

(d) Allow plans to specify that discharge permits can be transferred in a similar manner to water permits and coastal permits, and that discharge and water permits can be transferred temporarily or in part within a catchment or airshed (subject to limitations in national environmental standards).

(e) Establish a default rule (as per the aquaculture reform), except where a plan or policy statement provides otherwise, that where a consent for use and take of a resource is about to expire, the current consent holder shall have an opportunity to have an application for a new consent considered before a competing application, based on the following criteria (in addition to meeting the requirements of the Act):

  • compliance with any plan;
  • compliance with consent conditions (including consideration of track record for enforcement action); and
  • whether the applicant operates under current industry good practice.

If these criteria are met, other applications will not be considered. If the incumbent fails to meet the criteria, then the next application in the queue will be considered.

This proposal will not create a right in perpetuity for the incumbent consent holder.

169. To complement work programmes for water under the Sustainable Development Programme of Action, it is considered that new additional and parallel work programmes be initiated on geothermal energy allocation (Ministry of Economic Development lead) and air shed allocation (Ministry for the Environment lead).

What are the risks, costs and benefits?

170. The matters dealt with in terms of natural resource allocation have been limited to those more pressing and amenable to a solution. Pursuit of these matters is being done in a manner that codifies best practice to provide more legal certainty. However, it does not preclude effective consultation or more innovative solutions that may emerge from the Sustainable Development Programme of Action on Water.

171. The RMA review presents an opportunity to reinforce the importance of longer term issues being addressed in Sustainable Development Programme of Action on Water. These proposed amendments will be seen by business and local authorities as a first step, but may (mistakenly) be viewed as cementing a bias in the RMA toward existing users.

172. The default rule allows regional councils to exclude water (or any other resource) themselves from this rule if that is necessary in their region. There is no intention to create a right in perpetuity and guarantee future allocation, only that the default position for an existing consent holder will be an opportunity for their application to be considered ahead of other competing applications (assuming "first in first served" remains). A generic legislative approach across all resources, subject to local authority amendment as and where appropriate, is a more balanced solution.

 

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Last updated: 6 May 2008