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7. Issues relating to the existing governance structure

7.1 Introduction

In the New Zealand resource management system, elected political governance is provided at three levels: national, regional and district/city. While district and city councils have land use planning responsibilities under the RMA, the main burden of environmental management, including the management of water, air, soil, the coastal marine area, and land uses which impact on water bodies, falls to the regional councils. This level of government comprises twelve regional councils and four unitary authorities.

The Government has signalled its intention to strengthen the technical underpinning of governance at the national level by establishing an Environmental Protection Authority (EPA). This leaves open the question of how the boundary between the powers and responsibilities of the EPA and those of regional government will be drawn.

At the same time, research just completed at Massey University7 has provided a strong critique of regional government’s performance of its primary environmental management function, suggesting it is adding little public value. Public value was broadly assessed, considering substantive value, authorising agency and operational feasibility, and drawing on published data and a survey of perceptions held by resource management practitioners and stakeholders. Usefully this research also provides an analytical framework for considering alternative governance arrangements.

In 2009, regional councils will have operated for twenty years. The TAG believes this is an appropriate time for a reappraisal of their performance. This should be carried out in the context of a larger question: whether New Zealand’s three-tier political governance arrangements for resource management represent an efficient and effective framework for managing the environment, or whether a two-tier system might serve the country better.

While it is beyond the TAG’s terms of reference to consider all the issues that would need to be considered in reviewing and forming recommendations on the future of the regional level of government, we recommend that there should be such a review. One of the options that should be considered is to move toward a two-tier resource management system, in which the functions and activities currently performed at the regional level are split between the new EPA, which would need to have a regional presence, and territorial local authorities. We have set out below some of the matters which we consider should be taken into account in such a review.

7.2 Legitimacy and democratic effectiveness of regional government

The turnout in voting for regional councils 1989-2004 averaged 50.5%8. This is low compared with national elections, but is about the same as turnout for city councils, suggesting a similar level of public interest. However, these turnout figures may reflect the fact that voting for regional councils is carried out at the same time as voting for local government, rather than being a reflection of significant voter awareness of and support for regional government. A series of public awareness surveys conducted by Environment Canterbury (Ecan) every two years since its formation shows a fairly consistent pattern: only about two percent of Canterbury residents can name their local, elected ECan councillor, and only about ten percent can name the chairman of the council. It is likely that a similar pattern holds for other regional councils. The lack of a strong political mandate appears to hamper many regional councils in their dealings with other councils and with sector groups. This creates a risk of sector capture, and contributes to an evident difficulty in resolving contentious issues.

In some countries, regional government attracts a high political profile through playing a broad and important governmental role covering sectors like health and education, and by raising substantial taxes at the regional level to finance these activities. This creates strong accountability and legitimacy, and an ability to establish strong public mandates for policies. However, we detect no appetite for establishing a broad, multi-functional and powerful level of regional government in this country. It is possible that current consideration of a regional governance structure for Auckland will lead to the creation of a high-profile, multi-function regional authority in that city. Something similar might evolve in the other large metropolitan areas, where the provision of public transport services and/or infrastructure is already a major function of regional councils.

Elsewhere, it seems likely that a continuation of the regional council model would involve governance entities of weak legitimacy having key responsibility for resource management. This can be expected to mean a continuance of long delays in dealing with issues, and weak capacity for conflict resolution.

7.3 Effectiveness of regional government in achieving environmental objectives

The Massey University study, while noting some data deficiencies, nonetheless concludes that “despite some improvements, and some regional variation, overall environmental conditions have deteriorated nationally since 1989 [when regional councils were established]… Councils collectively appear to be unable to manage the difficult and important environmental challenges, such as non-point agricultural discharges that have arisen from agricultural intensification, so that the environment is worse than when they took responsibility.”9

Freshwater management provides an interesting case study. A number of public opinion surveys have recorded that water pollution is the single most important environmental priority for the public,10 and regional councils, following public consultation in the early 1990s, set water quality improvement objectives in their regional policy statements. In general, these objectives have not been realised; indeed aspects of water quality are getting worse in areas that are dominated by intensive land use.11

Prior to 1989, water-related issues were dealt with by catchment boards and regional water boards, which had made considerable progress in controlling water pollution from point sources using a consent system. In the meantime, the focus of water management in Europe and the United States had moved onward, to address the more intractable problem of pollution from non-point sources, comprising run-off or seepage of contaminated water from the land surface.

Regional councils in New Zealand have not been effective in addressing this issue. Following Olsen’s analysis of collective action problems,12 this may be attributable in part to capture by a particular sector with strong interests at stake: in 2006, farmers comprised 38% of all regional councillors, and formed a majority on five of the twelve regional councils.13 Most councils produced regional plans which established unlimited fertiliser applications and livestock access to waterways as “permitted activities” or provided for the use of education rather than rules to address these issues.

On the other hand, Environment Canterbury, which did strive to produce some more sophisticated planning to address the interface between agriculture and water, has had great difficulty in progressing the water chapters of its regional plan. Following consultation, objectives for water were put forward in a draft regional policy statement by 1994. Planning then moved to how to implement these objectives. Following two further rounds of public consultation, the proposed regional plan water chapters were notified in 2004. There were more than eight thousand submissions; analysis and hearing of these is unlikely to be completed until the end of 2009, after which a multi-year process of appeals to the Environment Court, including a period of mediation, is expected to follow.

In the meantime, public concern about inadequate environmental protection of freshwater resources in the face of major new projects for irrigation and land use intensification has led councillors to agree in principle to introduce a variation to the not-yet-operative plan. The likely earliest time that the revised plan could be made operative is 2013 – more than twenty years after the planning process began. Meanwhile, irrigation consent applications already in the approval process mean that most of the expected land use intensification is likely to be committed before the regional plan is finalised.

It is not clear that elected regional governance, and the associated cumbersome processes of public participation, has been particularly useful in protecting the people of Canterbury from poor management of their water resources. Nor is this problem confined to Canterbury.

Between 1990 and 2002, the number of dairy cows in the South Island increased six-fold, with a large impact on the quality of lowland streams. During this time, not a single council successfully introduced a rule to control livestock access to such streams. In the light of this failure, the initiative had to be taken by central government, which in 2002 negotiated the Clean Streams Accord with Fonterra. This provided targets for stream fencing, nutrient budgeting to limit fertiliser use, and wetland preservation. The wetland preservation aspect of the Accord has not been successful because, in the years since 2002, most regional councils have failed in their responsibility to identify the “regionally significant wetlands” which the Accord commits to preserve.

7.4 Potential for national instruments to improve regional council performance

Policy failures of the sort described in the freshwater case study above are often attributed to the failure of central government to produce the national policy statements and national environmental standards which were originally envisaged to be part of the three-layered governance system of the RMA. However the TAG considers there are significant questions concerning whether such instruments can be effective, and whether they can be made operative without unacceptable delay and cost.

The review of the effectiveness of the New Zealand Coastal Policy statement was not encouraging.14 The recently published national policy statement for freshwater management15 also raises many concerns about its likely effectiveness, not least because of the cumbersome way in which it has to be implemented through the multi-layered governance system.

In order to avoid fettering regional decision-makers, the proposed freshwater national policy statement provides only the most general guidance, and mostly by prescribing processes that must be followed. After a lengthy Board of Inquiry process at the national level it is to be implemented at the regional and local level through triggering three layers of policy and plan changes, respectively to regional policy statements, regional plans, and district plans, each involving years of hearing public submissions, making political decisions, and then dealing with appeals to the Environment Court. The delay, uncertainty and cost involved in this cumbersome process is considerable.

The second type of national instrument, the national environmental standard is inherently less ambiguous as to its meaning, but the recent national environmental standard for ambient particulate air pollution has highlighted that central government lacks an effective and fair way to ensure it is actually implemented and enforced by regional government. Failure to clean up a regional airshed to meet the standard by 2013 leads only to an inability to issue new resource consents. This shifts the penalty for regional council failure to those applying for consents. In practice, those regional councils which have taken no little or action on air pollution over recent decades now appear to be in a position to insist on the application of the standard simply being deferred, possibly indefinitely.

7.5 Regional government’s compliance enforcement activities

Most OECD countries have national level environmental enforcement agencies, and the OECD recommends centralised national accountability for enforcement activities. This is in order to maintain institutional integrity when subject to pressure from interest groups. However, in New Zealand, RMA compliance enforcement responsibilities are devolved to local and regional government.

A recent study of RMA compliance and enforcement in New Zealand highlighted the divided and scattered nature of enforcement practice in this country, the lack of funding for compliance activities and the inadequate separation of compliance activities from political influence.16

Prosecution policies for offences under the RMA appear to vary greatly between regions. During 1991-2001 almost half of all RMA prosecutions were brought by just three regional councils: Auckland, Waikato and Southland. During 2005-2008, five councils accounted for 68% of the 180 prosecutions brought by regional councils and unitary authorities, while two councils have brought no prosecutions during the last seven years.17

Even making allowance for population differences between regions, the devolution of compliance enforcement responsibilities in New Zealand appears to have led to a situation in which justice is not being even-handedly applied, but instead depends on local political considerations. This does not necessarily imply political interference in individual decisions to prosecute (although this may occur), but it is clear that there is wide variation between regions in the extent to which elected councils decide to provide resources for monitoring and compliance enforcement.

While Taranaki Regional Council has maintained an active compliance monitoring programme since its inception (and accounted in the late 1990s for almost 90 percent of abatement notices issued in New Zealand), Environment Waikato only established a significant programme in 2006-7, and some other councils continue to do very little compliance monitoring, especially of conditions attached to the generally permitted farming activities.

7.6 Use of technical and financial resources

The TAG accepts there are sound reasons for conducting integrated planning and management functions for major environmental resources (especially water) on a regional basis, with catchment-based boundaries for regions. This implies the need for regionally-based technical staff and public consultation activities; the issue is whether there also needs to be regionally-based governance and resourcing of those activities.

A disadvantage of the existing governance system is that it produces a tendency to reinvent the policy wheel in each area, with an additional cost which is not easy to justify by reference to differing conditions in each area. A further disadvantage is that resources available to regional authorities to implement regional activities are highly variable, reflecting mainly whether or not the regional authority has a large rating base, and whether or not it owns port company shares. This often leads to a mismatch between needs and resources. Some regions with large and potentially costly environmental issues are among the least well-resourced to tackle them, and some regional councils and unitary authorities struggle to employ specialist technical staff that are required, for example to obtain adequate knowledge of groundwater resources or to manage air quality.

The review we recommend should consider whether a nationally-accountable EPA working directly with territorial authorities would offer a more promising configuration for effective, efficient and equitable use of the financial and technical resources available for regional planning and resource management.

A minority view on the TAG holds that any review of regional government with a view to nationalising some or all of the functions currently exercised needs to be based on more than selective 'public' surveys and ad hoc student research. Similarly, any qualitative criticisms of environmental outcomes needs to be more sophisticated than observing how many regional councils comprise farmers. Thus, for example, regional councils such as Environment Waikato could note the following achievements in securing qualitative and quantitative environmental outcomes: the Lake Taupo catchment nitrogen restrictions; the water allocation regime under Variation 6; the provision for aquaculture in limited areas; and a geothermal allocation regime largely upheld by the Environment Court. Another option that should be considered in any review is for the fusion of regional and district councils.

Given the time constraints there was but limited opportunity to consider this matter. At the end of the day New Zealanders want good quality governance. But this matter of governance structures is a very big issue – it cannot be addressed except as part of a major review exercise, and only then if the Government is prepared to support investigating the issue. Certainly the expected Royal Commission on Auckland Governance Report may provide this opportunity.

 


7 J. K. McNeill 2008, The Public Value of Regional Government: how New Zealand’s regional councils manage the environment. Ph D dissertation, Massey University.

8 Department of Internal Affairs data compiled in McNeill 2008 op cit page 142

9 McNeill 2008 op cit pp i & 248

10 See for example K F D Hughey, G N Kerr and R Cullen 2006, Public Perceptions of New Zealand’s Environment 2006 Lincoln University; Gravitas Research and Strategy Ltd 2007, Environmental Awareness, Attitudes and Actions 2006: A Survey of Residents of the Waikato Region. Environment Waikato Technical Report No. 2007/06; A Masilamani 2007, Public Awareness Survey 2007 Environment Canterbury.

11 Ministry for the Environment 2008, Environment New Zealand 2007 chapter 10.

12 M Olsen, 1971, The Logic of Collective Action: Public Goods and the Theory of Groups. Rev ed. Harvard University Press.

13 McNeill op cit page 143

14 J Rosier 2004, Independent Review of the New Zealand Coastal Policy Statement. Report prepared for the Minister of Conservation.

15 The draft statement is available at:
National Policy Statement for Freshwater Management

16 W Adler 2008, The state of the compliance and enforcement regime under the Resource Management Act 1991. Strategik Group for the Ministry for the Environment.

17 Ministry for the Environment data.