2.1 This section discusses proposed policy outcomes for EEZ management, summarises the existing laws, and identifies problems and opportunities requiring government action.
2.2 We want to manage the EEZ and its resources sustainably. This means promoting environmentally responsible access to EEZ resources and ensuring human impacts do not threaten the integrity of marine ecosystems.
2.3 The specific outcomes proposed for managing our EEZ are as follows.
- Safeguard the integrity of EEZ ecosystems. We need to ensure the EEZ has healthy and productive ecosystems. A certain level of environmental impact from human activities is inevitable, but we should ensure that environmental “bottom lines” are not breached, and that marine ecosystems can maintain biological diversity, regenerative capacity and healthy ecological functioning.
- Promote sustainable management of EEZ resources. Sustainable management requires considering economic, environmental, social and cultural issues under one framework. This means encouraging the development of marine economic resources and carefully regulating the resulting environmental impacts.
- Encourage the development of sustainable marine industries in the EEZ. Investment is encouraged by clear and fair rules for the approval and ongoing regulation of activities.
- Enable EEZ resources to be used or protected in a way that provides for the greatest national benefit. National benefit includes considering economic, environmental, social and cultural factors. A robust and comprehensive management regime allows us to make better choices between different activities and uses. For example, national benefit may sometimes dictate that one activity prevail over another in the same space, or that conservation of an area is a higher priority than its development.
2.4 These outcomes are interdependent. For example, clear and effective regulation both safeguards the environment and gives investors certainty about the legislative controls on their activities.
Question 1: Do you think these outcomes are appropriate? Can you suggest others?
Current environmental regulation
2.5 Environmental effects in the EEZ are managed by sector-specific legislation. Fisheries and the environmental impacts of fishing are regulated by the Fisheries Act 1996; marine pollution (such as discharges from ships and offshore installations, oil spills and dumping of waste such as dredged material) is covered by rules under the Maritime Transport Act 1994; and biological prospecting is regulated under the special permits regime of the Fisheries Act. Voluntary and non-enforceable guidelines exist for the environmental impacts of petroleum and seismic activities.2 The Annex to this paper summarises environmental legislation in the EEZ.
2.6 There is no dedicated protection tool in the EEZ. The Marine Reserves Bill (currently before select committee) would provide for comprehensive protection of biodiversity by enabling marine reserves in the EEZ. If the Bill is enacted and new marine reserves are established, there would still need to be regulation of environmental effects outside these protected areas. This paper focuses on regulating such effects and does not duplicate the issues being considered under the Marine Reserves Bill.
2.7 In the territorial sea, the environmental effects of fishing are managed under the Fisheries Act and the environmental effects of most other activities are managed under the Resource Management Act 1991 (RMA).
2.8 The sectoral management system means that while some environmental effects in the EEZ are managed well, there are some gaps and inconsistencies. The problem is not a complete absence of environmental controls, but rather that some activities and some effects fall outside current controls, and current controls are neither well integrated nor able to manage cumulative effects across a range of activities and regimes.
2.9 The key challenges to address are as follows.
1: Gaps and inconsistencies in the operational control of environmental effects
2.10 The key gaps are in providing consistent and full coverage of the effects on:
- the seafloor and seafloor habitats
- habitats and biodiversity in the water and air.
2.11 In addressing these gaps we should aim for consistency with existing laws that regulate environmental effects. For example, seabed disturbance through fishing can be addressed under the Fisheries Act, but there are no provisions in the Continental Shelf Act 1964 to address seabed disturbance through mining. Direct effects on biodiversity through fishing can be addressed under fisheries or conservation legislation, but there are no legislative provisions to consider the effects of the installation and presence of an offshore structure, or the effects of seismic survey activities on marine mammals.
2.12 Because of these gaps there are inconsistencies between how the territorial sea and the EEZ are regulated. Key statutes covering the territorial sea, such as the RMA and Marine Reserves Act 1971, do not apply in the EEZ.
2.13 Inconsistency is not a problem in itself. It reflects the fact that New Zealand has a more limited set of international rights and therefore cannot extend all domestic legislation to the EEZ. However, subject to those limitations and consistent with international rights and obligations, we should as far as possible attempt to consistently manage activities that span the territorial sea and EEZ, or similar activities that occur in both zones.
2: Defining the environmental outcomes so activities and their effects can be assessed consistently
2.14 There is a wide range of existing environmental controls, and new controls may be established through this project. It is therefore important to promote a consistent and principled approach to environmental management across the different statutes. For example, controls under fisheries legislation on activities that affect the sea floor should ideally be aligned with controls on other activities with similar effects (e.g. mining). This provides consistent approaches to regulating environmental effects and equity between different industries.
2.15 There is currently no legal or policy mechanism to promote such an integrated and consistent approach. There are no statutory links between existing regulatory regimes that apply over the EEZ, and no policy instruments to guide consistent implementation across government agencies. Better integration will ensure that the cumulative effects of different activities can be managed.
2.16 Links can be achieved through legislative references, or non-legislative strategic planning tools. The Marine Protected Areas Policy and Implementation Plan is an example of a non-legislative strategic planning tool.3
3: Effects on investment certainty
2.17 Lack of clarity about the environmental regulatory requirements in the EEZ creates uncertainty for investors and has the potential to hamper the development of a number of activities, including mining, electricity generation, aquaculture, carbon capture and storage, and bioprospecting.
2.18 Many operators in the EEZ are large international companies with well-established environmental procedures. If they are complying with best international environmental practice, they will want this practice confirmed by the domestic legal standards of the responsible state. They could also reasonably expect that similar standards would be required of any competitors.
2.19 Many future EEZ projects will be large-scale and expensive. Many will face investment risks associated with the application of new technologies in a “frontier” environment. Any uncertainties about the regulatory environment will increase these investment risks.
4: Managing effects on other activities
2.20 Activities managed under one regime may be affected or undermined by the effects of activities managed under another. There are no procedures to manage the interactions of proposed and existing activities. For example, a mining proposal may adversely affect fishing in an area of the EEZ, and vice-versa, but there are no formal mechanisms to consider and address these effects.
Question 2: Do you agree that these are the main problems for regulating environmental effects in the EEZ? Are there others?
Size and urgency of challenges
2.21 The greatest environmental pressures in the EEZ currently come from fishing, which can be adequately addressed through fisheries legislation and current policy initiatives such as the Strategy for Managing the Environmental Effects of Fishing.
2.22 An incomplete regulatory regime for managing other environmental effects in the EEZ is a problem that needs to be addressed. Environmental pressure from unregulated activities has been low in the past, but will increase in the future with greater economic activity in the EEZ and new and more intensive uses of ocean resources.
2.23 A lack of mechanisms to improve consistency, coordination and integration between regulatory regimes may mean that cumulative effects will over time degrade the environment or create inequities in the regulation of different activities.
2.24 Uncertainty about the regulatory regime may also inhibit the development of future economic opportunities, and will become more of an issue as interest in EEZ resources increases. There is a window of opportunity now to improve the regulatory regime before the need becomes urgent.
Examples of current and future management challenges
Case study 1: Neptune Resources prospecting licence application
In 2002 Neptune Resources was granted a licence under the Continental Shelf Act to prospect for minerals over several seamounts in the EEZ. The seafloor massive sulphides (SMS) deposits targeted are a potential new mining class that have not been commercially developed anywhere in the world.
At the time of application there was no formal legislative process for considering the environmental effects of prospecting activities. The Continental Shelf Act enables the Minister of Energy to grant minerals licences. The Act does not specify what, if any, environmental assessment is required on an application. The RMA did not apply because the application was outside the territorial sea.
The Ministry of Economic Development (MED) consulted with relevant departments to work out the best way forward. This was the most sensible process for good governance in the absence of any formal decision-making framework. The licence was granted approximately two years after application. It enables the MED to approve Neptune’s prospecting activities on a case-by-case basis.
Around the same time as Neptune was granted prospecting permits, the Minister of Fisheries closed to fishing 19 seamounts on the Kermadec ridge. This was criticised as an inconsistent approach to environmental management by protecting the environment from fishing but allowing (albeit small-scale) prospecting activities to occur.
Case study 2: Sea disposal of wastes in the EEZ
The Ports of Auckland and marinas of the Hauraki Gulf region dispose of dredging at the Auckland Explosives Dumping Ground, east of Cuvier Island. Current national policy on the sea disposal of wastes in the EEZ stipulates an annual limit of 50,000 cubic metres of sediments at any one site in the absence of a management plan. Potential applications for use of the site could easily exceed 150,000 cubic metres per year, and the current legislative arrangement does not enable the agreed national policy to be implemented effectively.
Applicants are required to demonstrate that their material is of acceptable quality for sea disposal, that the amounts to be dumped will not have adverse effects on the marine environment, and that effects are contained within the site. Research and monitoring on the impacts of dumping are difficult and expensive.
The current legislation does not provide a clear framework for determining access to the site, and for equitable funding of this research. As a result there is potential for applicants to “free-ride” on research funded by previous users.
Hypothetical scenario 1: A seamount “hotspot”
A mining company has a licence, issued under the Continental Shelf Act, to prospect for minerals on the surface of a seamount. There is no guidance in this Act as to how environmental effects should be assessed.
A Crown Research Institute (CRI) is interested in sampling biota off the same seamount, using similar dredging techniques to the minerals prospecting. The CRI receives permission through the Fisheries Act special permits regime. Another CRI wants to sample the seamount to determine its geological composition. It uses the same technique as, and has similar impacts to, the two examples above, but does not require a special permit or mining licence.
The Minister of Fisheries then decides to close the seamounts to fishing techniques that may disturb the seamount habitat. A fishing company fishes the water column over the seamount. Use of this space is a key component in catching their quota entitlement. The closure prevents fishing but not other activities directly affecting the seamount.
This is a deliberately exaggerated example, because it is highly unlikely so many activities would concentrate in one hotspot, but it does demonstrate that activities with like effects would be treated differently.
Hypothetical scenario 2: Deep-sea aquaculture
A marine farming company proposes a large aquaculture development. The nearest point to land is 13 nautical miles offshore, outside the territorial sea and the jurisdiction of the RMA. There is uncertainty over whether the Continental Shelf Act applies to the proposal. “Natural resources” regulated by the Act are confined to those on the seabed. The Act allows regulation of structures created above the shelf, but only when such structures are in connection with exploration of the shelf or exploitation of it natural resources. By definition the marine farm does neither.
It is uncertain if or how the Fisheries Act should apply, as current aquaculture legislation applies only in the territorial sea. There is potential for regulations under the Territorial Sea, Contiguous Zone and Exclusive Economic Zone Act 1977, but none have been made due to uncertainty about their scope and the lack of legislative guidance. Some controls on discharges and safety will apply under the Maritime Transport Act but there is no formal and comprehensive way to approve the proposal and regulate its potential effects.
2 Ministry for the Environment and Maritime New Zealand 2006, Environmental Best Practice Guidelines for the Offshore Petroleum Industry; Department of Conservation, 2006, Guidelines for Minimising Acoustic Disturbance to Marine Mammals from Seismic Survey Operations.
3 The Marine Protected Areas Policy and Implementation Plan was released by the Department of Conservation and Ministry of Fisheries in January 2006. It can be viewed at http://www.biodiversity.govt.nz/seas/biodiversity/protected/mpa_policy.html