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4 Details of the proposed option

Scope

4.1 The proposed option focuses on filling gaps in existing legislation and promoting a consistent approach to environmental regulation across different statutes. It is proposed that this regime focus on environmental effects rather than prescribing the activities it will apply to. This will allow flexibility to deal with future activities in the EEZ.

4.2 The aim is to allow for the beneficial use of the EEZ and its resources and to regulate the environmental effects of this use. Authorisation of activities involves limited allocation of the space or resources required to undertake the activity. The government intends that this allocation only be that necessary for the duration of the project, and only if environmental criteria are met. At the end of the term of the authorisation the space and resources could be available for other uses, or be protected.

4.3 For example, an offshore installation may be authorised to occupy space in the EEZ for a defined time and purpose, but this space would not be owned by the occupier, nor would they have rights beyond what is reasonably required to exercise the terms of their approval. Applicants wishing to use a marine disposal site to dump dredge spoil could use sites specified as environmentally acceptable, but they would not have dumping rights in perpetuity or be able to deviate from the terms and conditions of their approval.

4.4 Other allocation regimes already exist for some EEZ resources (e.g. fisheries and minerals). These would remain unchanged.

4.5 There is no intention to amend the RMA or extend its coverage. The proposals in this paper do draw on some concepts used in the RMA, however; for example:

  • a statutory purpose of “sustainable management”
  • assessment of the environmental effects of activities on a case-by-case basis scaled to their size and significance
  • the power to make environmental rules.

Statutory purpose

4.6 It is proposed that the new legislation have the purpose of “sustainable management”. Sustainable management involves environmental, economic, social and cultural dimensions.

4.7 The statutory purpose of sustainable management would fit well with existing environmental legislation and bring some level of consistency with other management regimes. Sustainability is reflected in existing legislation such as the RMA (which does not apply in the EEZ but does in the territorial sea) and the Fisheries Act (which applies in the EEZ but is restricted to the sustainable utilisation of fisheries). It would also allow managers to draw on experience and case law from implementing sustainable management regimes.

4.8 It is proposed that the purpose be modelled on the RMA and be defined as:

Promotion of the sustainable management of natural and physical resources in the EEZ and the Extended Continental Shelf.

Where sustainable management means managing the use, development, and protection of natural and physical resources in a way, or at a rate, that provides for social, economic, and cultural wellbeing:

(a) sustaining the potential of the EEZ and Extended Continental Shelf’s natural and physical resources to meet the reasonably foreseeable needs of future generations; and

(b) safeguarding the life-supporting capacity of the ocean, air, soil and seabed, and ecosystems; and

(c) avoiding, remedying, or mitigating any adverse effects of activities on the environme nt.

Question 5: Do you have any comments on this proposed purpose?

Rules framework

4.9 Two types of rules are proposed.

Mandatory rules to determine assessment thresholds

4.10 When the legislation first comes into force, rules would be required to define the thresholds for when approval is required for an activity. These rules will be the default mechanism to determine whether an application for an EEZ consent is required. For example, rules could define the level of seabed disturbance or exclusive occupation of space that triggers the need to obtain an EEZ consent. They also could allow activities to occur without the need for approval so long as they comply with certain conditions.

Discretionary rules for specific areas or activities

4.11 It is proposed the legislation would also enable more detailed rules to be developed where required. They could be used to actively manage the effects of new activities, or to close areas to new applications for particular activities, or to specify areas where the environmental effects of particular activities would be acceptable.

4.12 This discretionary rule-making power enables a more proactive and strategic approach to regulation and would assist in regulating cumulative effects.

4.13 Examples of rules would be for the protection of benthic habitats across currently unregulated activities (see further comment below about rules to cover all activities), or rules for the protection of specific areas such as active seamounts. These rules would guide decisions on individual applications and would be a way to address cumulative effects by applying to an area or multiple activities.

4.14 Preparation of rules would include consultation with stakeholders.

Common environmental rules for all activities in the EEZ

4.15 Rules could be applied only to the environmental effects of activities that are currently unregulated.

4.16 Alternatively, rules could apply to all environmental effects in the EEZ across the different statutes. For example, common environmental rules could be used to regulate the effects of activities on seafloor habitats, regardless of whether the activity is fisheries bottom-trawling, seabed mining or scientific research, which are all regulated under different laws. Although this approach would be a more robust way to achieve consistency across different laws and to address cumulative effects, it would be more complex to design and implement compared to restricting rules to effects that are currently unregulated. It would involve making changes to existing laws.

Question 6: Do you feel the proposal for rules here is suitable? What changes to it, if any, would you like to see?

Question 7: Do you think rules should apply to all activities and their effects, or only to currently unregulated effects?

Question 8: What are the likely regulatory costs of a rules framework?

Assessment of effects and consideration of applications for EEZ consent

4.17 When a proposed activity is not permitted under mandatory rules, an EEZ consent would be required. A person wanting to do something in the EEZ in this situation would need to put in an application for an EEZ consent so the likely effects of the activity could be assessed. An approval by the decision-maker would be required before the activity could proceed. The assessment should enable informed decisions with sufficient understanding of the likely effects. The applicant would be responsible for providing information, or funding its collection where new environmental information is required.

4.18 The effects of a proposal include both adverse and beneficial effects, as well as cumulative effects arising from multiple activities in the same ecosystem. The effects of a proposal on other activities will also be considered. The effects of most interest are those where there is a high probability that they will occur and/or the impacts have the potential to be high.

4.19 Matters relevant to an evaluation include the:

  • size of the proposal
  • geographic area affected
  • time required for the activity
  • nature of the area being affected and whether this has any significant or sensitive features
  • nature of the proposal and its potential for causing damage
  • methods or alternatives available to avoid or reduce adverse effects
  • need for servicing by vessels and aircraft
  • biosecurity concerns
  • duration of any effects
  • possible cumulative effects.

4.20 The level of evaluation will be a continuum, from very brief assessment (for small proposals in areas that are not sensitive and where effects are well understood) to a higher threshold of assessment where the project is large, involves high-impact activities and potentially affects sensitive areas, biodiversity or resources.

4.21 The information required for assessment should be scaled to the size of the proposal’s effects. For example, large-scale minerals extraction or carbon sequestration would require more information from the applicant than a decision on minerals exploration or low-impact research sampling. It may also be necessary to provide a mechanism to escalate assessment requirements in individual circumstances. Thus an activity may have low environmental effects in one situation, but much higher effects in another area or when combined cumulatively with other activities.

4.22 The level of detail required in an assessment should be specified clearly to applicants, and should be proportionate to the effects of the proposal. This approach of matching evaluation requirements to the proposal is already used in the RMA. The decision-making body should have the ability to request further information to allow feedback on how much detail is needed.

Question 9: Is this approach to considering applications appropriate for regulating the environmental effects of activities in the EEZ?

Question 10: Are there any changes you would make?

Question 11: How should thresholds for the level of evaluation be set?

Biosecurity

4.23 It is expected that the biosecurity impacts of any project would be included in the evaluation of environmental effects. This would mean, for example, that the risk posed by the release of new organisms introduced on a structure would be considered when approval is sought, and the approval could contain conditions to help manage the risk. The full scope of the activity would be considered, including cleaning and maintenance procedures, and the use of support vessels.

4.24 It is not expected that the regime would deal with deliberate releases of organisms into the ocean. A new organism approval regime (as provided in the Hazardous Substances and New Organisms Act 1996 on land and in territorial waters) is not planned.

Question 12: Are biosecurity issues adequately managed by the proposal?

Coordination with other environmental regulation

4.25 Any new environmental regulation needs to be coordinated with other regimes. For example, protection of a seamount from fishing disturbance under the Fisheries Act should mean that similar controls are considered for other activities with similar effects.

4.26 The impacts of proposed activities on existing activities will be included as an “effect” of the proposal and will be considered along with effects on the natural and physical environment. For example, a proposed offshore platform’s exclusion zone would be assessed for effects on fishing activities in that space.

4.27 Any use of rules would need to have regard to rules and area controls imposed under the other regimes in the EEZ. Fisheries benthic protection areas, for example, may be relevant to the preparation of rules about the environmental effects of seabed mining.

4.28 It is proposed that Ministers or agencies with decision-making powers in the EEZ be consulted when applications are being considered and when rules are developed. The aim is consistency of decision-making across statutes and to address cumulative impacts. Shared information and understanding will also help to ensure consistent decisions. As discussed earlier, rules could be developed that apply across different statutory regimes.

4.29 Regional councils should also be consulted on activities that cross (or go close to) the boundary between the territorial sea and the EEZ. The RMA does not apply in the EEZ, but regional councils will have an interest in how activities may have an impact on their jurisdiction, and in promoting environmental management that is consistent with their regional coastal plan.

Question 13: Do you agree that consultation between EEZ decision-makers is a practical way to achieve consistency and address cumulative effects? If not, what else would you like to see?

Question 14: What kind of mechanisms are appropriate to coordinate environmental management under different regimes?

Nature of EEZ consents

4.30 It is proposed that an approval under the new legislation be called an “EEZ consent”. An EEZ consent is permission to undertake a specified activity within set parameters, akin to an RMA resource consent.

4.31 EEZ consents will not be real or personal property. They do not give ownership of the resources or space involved in the activity, nor do they create rights beyond those specified under the legislation. It is crucial, however, to provide certainty and stability about the parameters of an EEZ consent for anyone proposing activities in the EEZ. Investment - particularly in high-risk and technologically challenging activities - requires certainty about the “rules of the game”.

4.32 It is proposed that an EEZ consent cover:

  • who the authorisation applies to - it is proposed that consents be transferred with the approval of the EEZ consent decision-maker, so long as the effects of the activity remain unchanged (similar to the rules on transferring RMA resource consents)
  • a definition of the activity and authorised effects
  • conditions to avoid, mitigate or remedy environmental effects and effects on other activities and interests
  • the allowable effects on other activities and interests
  • the location and geographical boundaries, which provide the location of the activity - any occupation of the site would only be to the level needed for the activity and would exclude others only in so far as their use of the site precluded the authorised activity from taking place
  • the duration of the consent, up to a maximum statutory term (e.g. the RMA has a 35-year maximum); the term given will relate to the nature of the activity
  • “use it or lose it” provisions to prevent speculative or anti-competitive applications
  • monitoring and enforcement requirements
  • cost recovery provisions to cover ongoing administration, and any necessary research, monitoring and enforcement requirements
  • decommissioning/end-of-life considerations (including cost, indemnity or bond provisions for removal in the case of insolvency)
  • liability insurance and any bonds.

4.33 There would also need to be enforcement by the administering agency of any conditions on an EEZ consent.

4.34 Any continuation of the activity beyond the consent duration would be subject to a new consent. A new application for an EEZ consent could be declined if, for example, the environmental effects, or effects on other activities, were now considered to be unacceptable. Where the activity remains acceptable the existing user could apply and be considered before others for the same activity provided they have been responsible users in the past and their application involves the efficient use of resources.

Question 15: What are your views on the proposed scope of approvals?

Question 16: What matters should be covered to give certainty for sustainable commercial investment in EEZ activities?

Question 17: Are there other matters that should be covered by approvals?

Precautionary decision-making

4.35 Decisions should recognise uncertainty in any risks to the environment and incorporate a precautionary approach, 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.

4.36 The first point above is most relevant to protection measures and it should form part of the rule provisions. The second applies especially at the approval stage and underpins the requirement for good information. Where information is lacking and an approval is given, the approval needs to reflect the fact that unknown adverse effects may occur. In this case, conditions may be imposed to monitor effects and to enable the decision-maker to review conditions when further information is available. Decisions with little information should therefore be more conservative.

4.37 It is proposed the regime recognise uncertainty and incorporate precaution in decision-making on proposed activities. There are models for managing risk and precaution. For example, the RMA includes in its definition of “effect” any potential effect of high probability, and any potential effect of low probability which has a high potential impact. This means high potential impacts are considered even where they are considered to be of low probability. The information rules in the Fisheries Act also provide for decisions to be made to ensure sustainability where there is uncertainty.

Question 18: Do you have any comment on how precaution should be incorporated into decision-making?

Question 19: What do you think is an appropriate balance between precaution and encouraging investment in new activities in the EEZ, given it is a relatively low information environment?

Existing activities and interests

4.38 An assessment is required of the effects of a proposed activity on existing activities and interests. These could either be existing activities regulated under other legislation (e.g. fishing), public interests in the EEZ (e.g. the effects of a proposal on marine cultural heritage values), or two or more applications under this new regime covering the same space or resource.

4.39 It is proposed that the effects of a proposed activity on existing activities such as fishing be considered as part of the application process. Conditions on the approval could be used to avoid or mitigate the effects of one activity on others. After these effects have been considered, decisions to approve one activity over another would include consideration of economic and cultural factors to determine which activity best provides for the greatest national benefit and the statutory purpose of sustainable management.

4.40 Those potentially affected by a proposal would need to be informed of the proposal and able to raise any concerns during the consideration of the application. It needs to be recognised that if the overarching criteria are net national benefit and achieving the purpose of sustainable management, then there could be some negative effects of new activities on existing ones. Alternatively, a proposed activity may not go ahead if the negative effects on the environment and existing uses and interests are greater than the benefits.

4.41 Conditions could be imposed on an application for EEZ consent to avoid, remedy or mitigate adverse effects of one activity on another when the application is considered. We are seeking feedback on whether redress should also be considered when one activity displaces or negatively affects another through the granting of an EEZ consent.

Question 20: What are your views on the adequacy of the proposals for managing effects on other activities and interests?

Question 21: Do you think redress should be considered when an existing activity is affected by a new activity?

Consultation on applications for EEZ consent

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

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

4.44 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. While an intensive RMA-scale public consultation process is not considered appropriate for the everyday operation of an environmental effects regime in the EEZ, some consultation with affected stakeholders is necessary.

4.45 The process and costs of consultation should be shared by applicants and the government, depending on the nature of the activity and stakeholders. For example, the government is best placed to consult internally between agencies, but it may be appropriate for the applicant to consult with industry or other groups or persons interested in their proposal.

Question 22: What consultation provisions would you like to see?

Question 23: What interests do you or your group have in the EEZ which should be taken into account through consultation?

Question 24: How do you think the process and costs of consultation should be shared between applicants and the government?

Cost recovery

4.46 It is proposed the legislation provide for a cost recovery regime. This 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. It would also include the costs of any additional research required to assess environmental effects.

Question 25: Do you agree that a cost recovery regime is necessary?

Question 26: On what basis should cost recovery be charged, and what level of charging is appropriate?

Rentals, royalties and other benefits

4.47 We are seeking 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.

4.48 To capture benefits, clear justification would be needed (e.g. to reduce the pace of resource depletion or capture otherwise unrealised benefits to New Zealand). Charging would also need to be considered in the legal context of New Zealand’s international rights and obligations in the EEZ.

Question 27: Do you think rentals and royalties should be charged for use of EEZ resources, and why?

The decision-maker – Minister or separate body?

4.49 Decisions on applications and any rules could be made by a Minister, or kept at arm’s length by an independent decision-making body. Both models are used in New Zealand.

4.50 Direct decision-making by the Minister of Fisheries is used in the Fisheries Act, whereby decisions are either made by the Minister following advice, or by the Chief Executive of the Ministry of Fisheries under delegation in the Act. Criteria and process guidance (e.g. covering consultation) are given in the Act.

4.51 Under other legislation, decisions are delegated to a specific body. Examples include the Environmental Risk Management Authority’s decision-making role under the Hazardous Substances and New Organisms Act. The Act and the regulations under the Act provide detailed process rules and set criteria for decisions made by the Authority.

4.52 Some other Acts, such as the RMA, have a mixture. Under the RMA, regional councils make decisions in relation to coastal permits and the Minister of Conservation makes decisions on restricted coastal activities following consideration by the relevant regional council. Regional coastal plans are prepared by regional councils but approved by the Minister of Conservation. The Minister for the Environment (and the Minister of Conservation in relation to the coastal marine area) has the power to call-in an application for resource consent. The Minister for the Environment also has the power to recommend to the Governor-General that a national environmental standard be made.

4.53 It is common for legislation to specifically delegate some decisions to officials. The Maritime Transport Act, Biosecurity Act 1993 and Conservation Act 1986 do this for particular decisions.

4.54 The decision-maker on the environmental effects of activities in the EEZ could be supported by an independent board or a cross-agency stakeholder group. For example, the Oil Pollution Advisory Committee appointed by the Minister of Transport under the Maritime Transport Act to advise Maritime New Zealand comprises both government and industry representatives. Its advice is non-binding.

Question 28: Who should make the final decisions on:

1. rules

2. applications?

The Minister, the administering department, or an independent agency?

Question 29: Should rights of appeal to these decisions (other than judicial review) be provided? If so, what should they be?

Administering agency

4.55 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.

4.56 The administering agency could be responsible for some or all of the following roles, depending on who the decision-maker is:

  • administering and monitoring the effectiveness of the legislation to give effect to the proposals in this paper
  • receiving and assessing applications for EEZ consent, and recommending what course of action the decision-maker should take
  • developing rules for approval by the decision-maker
  • advising the decision-maker on other matters relating to the regulation of environmental effects
  • consulting with stakeholders and the agencies administering other related environmental management legislation (such as the Fisheries Act and Maritime Transport Act)
  • monitoring and enforcement.

4.57 Possible agencies (in no order of preference) include:

  • Department of Conservation
  • Maritime New Zealand
  • Ministry for the Environment
  • Ministry of Fisheries
  • Ministry of Economic Development.

4.58 There are several principles that are relevant when selecting an appropriate agency.

  • There should be no conflict of interest with any existing functions or statutory purpose.
  • The agency has the required resources and expertise to fulfil its functions.
  • Organisational arrangements should be proportionate to the size of the functions and should not create unnecessary expense or organisational complexity.

4.59 It is possible for the resources of outside agencies to be used to assist the administering agency with its functions (e.g. the current use of the National Maritime Coordination Centre and New Zealand Defence Force vessels and aircraft for monitoring and enforcement in New Zealand’s territorial sea and EEZ).

Question 30: Do you have a preferred administering agency, and why?