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Resource Management Reform 2013
Contact Energy Limited
Improving our resource
2 This submission by Contact Energy Limited (Contact) is in response to the Discussion Document: Improving our resource management system (Discussion Document).
Contact wishes to be involved in further discussions on the proposals contained in this Discussion Document.
For any questions relating to this submission please contact:
Rosemary Dixon, Special Counsel – Environment Contact Energy Limited
DDI: 04 462 1284; Mobile: 021 222 1181
Level 1, Harbour City Tower, 29 Brandon Street, PO Box 10742, Wellington 6143 [email protected]
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Introduction and Summary of Submission
About Contact
Contact is one of New Zealand’s leading energy generators and retailers, providing electricity, natural gas and LPG to around 570,000 customers nationwide. Contact’s 11 geothermal, thermal and hydro power stations generate approximately 23 per cent of New Zealand’s electricity. The company is one of the country’s largest wholesalers and retailers of natural gas, and has around 46 per cent of the LPG market in New Zealand.
Contact is one of New Zealand’s largest listed companies and most widely held stocks with around 75,000 shareholders. It employs approximately 1,100 people throughout New Zealand, making Contact an integral part of the national economy, our diverse society and local communities.
Contact works with the Resource Management Act (RMA, the Act) on a daily basis. In particular, in the last 10 years Contact has:
• re-consented the Clutha Scheme (Clyde and Roxburgh power stations with a capacity of 752 megawatts (MW)), a process that took six years;
• re-consented the Wairakei geothermal plant (a similar timeframe to the Clutha);
• consented two new wind farms, one through a conventional Council/appeal process and the other (504MW) through a called-in Board of Inquiry process;
• consented two new geothermal plants, both under call-in, one of which was the first project to be processed and heard under the EPA 9 month time frame;
• consented a base load thermal plant and thermal peaker plants.
Contact also has a major geothermal plant under construction and close to completion.
Alongside this consenting experience, Contact is involved on a daily basis with Regional Policy Statements, Regional Plan and District Plan development and variations to those documents throughout New Zealand. In particular, Contact was a major participant in:
• the development of the geothermal planning framework in the central North Island (Regional Policy Statement, Regional Plan and District Plan);
• the water allocation plan for the Waikato River; • planning changes in Central Otago; and
• the National Policy Statements on Renewable Electricity Generation and Freshwater Management.
Currently Contact is involved in the development of a geothermal planning framework for the Bay of Plenty region and the 10 year review of the Waikato Regional Policy Statement.
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Summary of Submission
Contact supports many of the proposals. In general Contact supports the objective of continuing to streamline the resource management regime which is frequently slow and cumbersome in return for limited improved environmental outcomes. Specific comments in relation to particular proposals, and suggestions for further refinement, are made below.
This submission is structured so that the discussion under each heading answers the question at the end of the corresponding section in the Discussion Document.
Submission
Chapter 1 – identification of key issues and opportunities with New Zealand’s resource management system
Contact agrees with the analysis that resource management processes are often cumbersome,
Submission
Chapter 1 – identification of key issues and opportunities with New Zealand’s resource management system
Contact agrees with the analysis that resource management processes are often cumbersome, costly and time consuming. However, Contact does not consider that, in the main, the outcomes are uncertain, difficult to predict and highly litigious.
Environment Court
In particular, Contact considers that the Discussion Document underestimates the importance of the Environment Court in providing quality outcomes in both planning and consenting processes. While the proposals acknowledge the quality of the outcome is important, and that the Courts have a role to play in achieving this, they clearly also consider that the ability to appeal to the Environment Court has caused delay. In particular the Discussion Document seems to suggest the Court is making value decisions that are more appropriately made by elected officials (in planning) and that
Contact wishes to see:
• Retention of full appeal rights to the Environment Court for both planning and
consenting;
• If appeal rights are limited, decision panels of independent expert commissioners,
making the final decision rather than recommending to Council;
• Greater guidance and direction from central government to local government on
recognising the national interest;
• Introduction of the new section 6 as proposed in the Discussion Document;
• A cost/benefit analysis of the proposed planning regime (template plans, combined
plans) that takes into account the cost to the community (including business) as well as to Councils and Central Government to be sure that the planning upheaval is justified.
5 the quality of the outcomes to date provided by the Court can be achieved by other means. Contact doubts this.
Contact considers it appropriate that important planning decisions can be challenged through the Environment Court, including when proactive plans have been developed by the community. In Contact’s experience Councils are not good at making planning decisions in two circumstances:
1. When there are competing value judgments, particularly where those are linked to complex technical matters;
2. When the national interest competes with local interest.
Both were at issue in the development of the central North Island geothermal planning framework. In this case the protection of the Wairakei-Tauhara Geothermal System for the future development of renewable electricity generation (national interest and one value) competed with the incompatible
expansion (technical issue) of the township of Taupo across the geothermal system (local interest and a different value).
This submission will discuss below the proposals re Council level decision making but in Contact’s experience the Court is needed to apply the necessary objectivity to complex and competing issues that elected officials, simply because they are elected and inevitably mindful of local priorities, cannot achieve.
Contact therefore does not see the Court as a time taking roadblock but rather as a necessary backstop to ensure quality outcomes.
There is much discussion in the proposals of the length of time that first generation plans have taken to develop and the cost to Councils of these plans. It is agreed that they are costly and in many instances have taken too long. But the important point to note is that these were first
generation documents. Councils are now moving to second or third generation documents and the process is much quicker. Contact considers the time factor is overstated. Improvements in
Environment Court processes including tighter case management and timeframes and closely monitored mediation are all contributing to tighter timeframes so there is no need to trade off time against quality. For example, Contact is currently a party to appeals on the latest Bay of Plenty and Waikato Regional Councils’ Regional Policy Statements. Both processes are being efficiently handled by Council officers working alongside the Court. On the basis of progress to date, it is entirely possible that appeals will be resolved within a year of their being filed for both the Waikato and Bay of Plenty documents.
National guidance and direction
Contact agrees that there is a need for greater national consistency and guidance, particularly where decisions involve nationally significant issues. The proposals seem to accept that this is an issue in terms of the highly devolved decision-making under the RMA (a point with which Contact concurs) but somewhat inconsistently the proposals want to reinforce that devolved decision making (by limiting Environment Court appeals) and to provide the national perspective through national guidance on matters of national importance. Contact is dubious that “guidance” will be sufficient and it will need to be very robust in order to effectively influence. In its experience, even
6 when contemplating a National Policy Statement to which they are required to give effect, Councils are inclined to review their documents through the prism of local interest and consider the national interest has been sufficiently realised. As an example, it is comparatively easy to include
statements in regional planning documents about developing renewable generation in a region and to classify some geothermal systems for development. However if the planning framework then prioritises protecting geothermal features, which is in itself incompatible with geothermal
development, the National Policy Statement has not been given effect.
In order to ensure that the national interest is protected Contact also agrees that it is appropriate that central government has a greater role to play in providing direction.1
Multiplicity of Plans
The proposals identify multiplicity of plans in New Zealand as an issue, comparing us unfavourably with Scotland. Contact accepts that for laypersons, knowing how to use a Regional Policy
Statement and/or regional and district plan can be problematic. Contact has some concern
(discussed below) that the solution does not result in more New Zealand wide planning reviews that involve yet more expense and time than the outcome warrants.
Contact agrees that RMA practice sometimes uses consent decisions to deliver planning outcomes. That is in part because discretionary activity status (which is a planning decision in itself) provides for a number of outcomes. The grant of a significant consent (which has been anticipated in the Plan) may have the effect of changing land use.
Sections 6 and 7 RMA
Contact agrees that today’s values and priorities are not well enough reflected in the RMA and that amendments are necessary to ss6 and 7 to provide one set of “matters of national importance”, equally weighted, to guide decision making.
Chapter 3 - The Proposed Reform Package
3.1.1 Sections 6 and 7 RMA
Contact supports the proposed new section 6 set out in section 3.1.1 of the Discussion Document. Contact agrees with the Technical Advisory Group (TAG) report that the Courts have exercised an “overall broad judgement” rather than an environmental bottom line in interpreting this section. As a consequence, all the factors that should be considered by the decision maker should be in one section and should include nationally important principles drawn from the full range of wellbeings (social, economic and cultural as well as environmental) that constitute sustainable management in section 5.
In relation to proposed 6(j), Contact supports the reframing of this principle from the existing section 7(j) but notes that the reference should be to renewable electricity (rather than energy) generation.
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Given that the central government direction is not intended to be as direct as the Canadian and Scottish examples cited, Contact considers it is appropriate that the oversight of the Environment Court is maintained.
7 Energy may be used efficiently (as noted in the first part of 6(j)) but it cannot be generated. It is harnessed (from the wind, water, geothermal heat) to create/generate electricity.
Contact is less certain as to the necessity or helpfulness of the Methods identified in the new section 7. However, Contact supports the inclusion of environmental compensation and off setting as voluntary measures and the distinction of such measures from mitigation required under section 5(2)(c).
3.1.3.Central Government power to direct plan changes
Contact supports the expansion of the Minister’s powers, including to direct plan changes as
outlined in 3.1.3. However, to be effective the direct amendment to an existing operative plan option would need to be utilised. In reality, this is likely to be rare, if ever. Neither will it be a quick process as presumably the first two steps would be explored first. Those involve a plan change process. As Contact has already noted, the national interest is frequently well protected in such processes through full merit appeal to the Environment Court which may be less contentious than Ministerial intervention. Accordingly, while Contact considers there is sense in giving the Minister the ability to direct a plan change it does not see this as a substitute for Environment Court appeal.
3.2.1. Single resource management plan – national template
As noted above, Contact accepts that multiplicity of planning documents can be an issue for lay users of these documents. In principle, a single resource management plan for an area (nominally a district) is sound. If this exercise is essentially a formatting and collating job to produce the single plan, Contact can see its value. However, the proposal of a single plan fitting a national template suggests a much larger review of regional policy statements, regional and district plans would be required. Contact is very doubtful that the benefits outweigh the costs (in terms of time and money) of the exercise.
If the proposal to develop a template is proceeded with, Contact seeks that MFE consults widely on its development (that is, consults stakeholders as well as councils) and recognises the need for some variation to address issues specific to regions/districts.
The difficulty in devising a template will be to set the appropriate level of detail. A template that simply sets out the planning cascade (Issue, Objective, Policy, Method, Outcome) will be too general to be helpful; but equally one that is too detailed will not meet specific needs. For example, Contact is wary of the proposal (3.2.1.) to include content for specific standardised zones and rules for particular activities. An obvious such example would be residential subdivision. But residential subdivision on a geothermal field is a very different situation from residential subdivision in a more general urban environment. It requires a different planning response.
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3.2.3 Single resource management plan via a joint process – narrowed appeals
Contact is not opposed to the forming of a plan partnership by respective councils in an area to develop a single plan including regional and district rules. Contact considers that including the Regional Policy Statement would unnecessarily complicate the unified document and this should remain a standalone document. Contact also supports the expectation that there will be greater emphasis on pre-notification and collaboration through regions and districts working with their communities though notes that this will be a very demanding process for councils and communities. Contact is in the process of reviewing the changes proposed to water management in New Zealand in the document “Freshwater reform 2013 and beyond”. It seems that a different scale of community planning is proposed for water. That is, the nominal area for planning in the Resource Management reforms is the district. The freshwater reforms propose the catchment. This potential inconsistency needs to be addressed.
Contact does not support the narrowing of appeals to the Environment Court but if that were to occur Contact considers it is imperative that the hearing panel is fully independent. For the panel to be independent all commissioners sitting on it must be independent, that is, not be councillors2. The proposals refer to the hearing panel as being “independent” but it is not clear what this means. The proposals require only that the commissioners are “qualified”. Any councillor who has completed the Making Good Decisions course is so qualified. That is not sufficient and they are not independent. Contact also considers that if appeals are narrowed the independent hearing panel should be the final decision maker, not Council. It is not good process if:
• The ultimate decision maker (Council) has not heard the evidence;
• Council may reject the recommendations of the expert hearing panel despite not having
heard the evidence.
Contact would then recommend that a right of appeal be retained as recommended by the Land and Water Forum considering this point. That is, where the appeal concerns a matter of national importance.
Contact does not support the narrowing of appeals to the Environment Court to where the Council deviates from the recommendations of the hearing panel. That assumes the hearing panel can be relied upon not to err (for example, in recognising the national interest). Collaboration is an untried process in plan formulation and this single plan is an untried concept. It is important to the
community to retain the backstop of the Environment Court for the complex or competing values that this new process fails adequately to resolve.
Contact has no particular objection to appeal by rehearing of evidence as opposed to de novo. However, it notes that such a restriction is likely to lead to overkill in the presentation of evidence at the Council hearing. Submitters will present more evidence and on a wider number of issues than is necessary to ensure that they have material on which they may wish to rely should an issue end up on appeal. In reality, while hearings de novo are currently possible, most planning matters that
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Council has shaped the Plan through collaboration and consultation to notification and subsequent discussion including caucusing and mediation up to the hearing.
9 reach an Environment Court hearing (as opposed to being settled in mediation) are very specific matters and the calling of additional evidence on those matters is not a difficulty for the Court.
3.2.4 Empowering faster resolution of Environment Court proceedings
Contact supports strengthening the ability of the Court to resolve appeals efficiently. In particular, Contact supports electronic case management, increasing the Court’s ability to enforce timeframes and changes that would strengthen the role of mediation including requiring participation.
3.3.1 – 3.3.3 Proposals to increase efficiency of consenting
In principle Contact supports a 10 working day processing limit for straightforward consents. Similarly Contact does not object to the “approved exemption” approach and the direction as to non-notification. These are all potentially efficient changes. The difficulty will be in framing the appropriate criteria.
3.3.4 Limiting the scope of consent conditions
Contact appreciates the issue the suggested change is attempting to address. The sheer number and detail of consent conditions on a large project may seem to be out of hand. However, the proposed limitation on consent conditions proposed in 3.3.4 may not in fact limit conditions. For example, conditions now are required to be directly related to “the adverse environmental effects of the proposed activity”. If the real issue is the over analysis of adverse environmental effects which creates a need for mitigation where common sense would not, a better test than “directly related” conditions needs to be developed. Contact would be happy to assist with this.
3.3.5 Limiting the scope of participation in consent submissions and appeals
Contact supports this provision in principle.
3.3.6 Changing consent appeals from de novo to rehearing
Contact does not support the narrowing of appeals to the Environment Court on consent decisions. As noted above, councillors are always conflicted when the national interest and the local interest are at odds and many projects involve complex scientific information that even experienced commissioners may have difficulty adjudging. To some extent these issues are addressed by appointing commissioners with particular expertise and ensuring panels are truly independent as discussed above, but Contact is very aware of the risks of having a one stop decision process. It was declined consent outright for a windfarm project in the southern Hawke’s Bay (Waitahora) that was subsequently granted consent by the Environment Court (with appropriate conditions). The hearing panel for Council were qualified commissioners, one (of the three) was independent and they would no doubt consider they had the necessary technical expertise. Further, both the continued operation of the Wairakei power station and the Clutha scheme required the Court to ensure workable conditions on appeal.
Hearings of resource consents on appeal tend to be limited in scope. Usually the issues are well narrowed and the hearings focused and short. (The hearing of appeals into Contact’s Waitahora wind farm took less than two weeks of Court time.) That is in part because the Court provides opportunities for mediation, with the assistance of an expert mediator. That is a valuable service. If
10 the matters on which submissions may be filed are narrowed as proposed in 3.3.5, this will reduce any subsequent appeals still further. Only the most relevant and intractable issues will ultimately be heard in Court. In Contact’s view, that is appropriate and valuable.
Given that appeals tend to be self limiting Contact does not consider it necessary to move from de novo to rehearing of already filed evidence on consent appeals. The Court may benefit from
additional evidence on a particular matter, the subject of appeal. To limit the Court to material which may have become out of date or which was only one small part of the original case (and therefore lightly covered) may produce a skewed result. As noted above in relation to plan appeals, if no new evidence can be produced on appeal (or there is not confidence that it may be), the temptation will be to flood the first instance hearing with unnecessary evidence as insurance against needing to use it on appeal.
Contact is interested in the proposal to develop a “lower cost tribunal style resolution process for minor matters” effectively as a check on consenting authorities. While further detail on this proposal may clarify matters, it seems odd to create an independent body to make decisions on minor matters but continue to have Council make decisions on more important matters that then have limited appeal rights. On the other hand, if what is intended is a quasi judicial body that sits between the Council decision-making panel and the Environment Court to resolve appeals of comparatively minor matters Contact can see the potential merit. However, Contact also comments that such appeals are generally sorted in mediation anyway and, as already noted, the Environment Court mediation service does an expert job in this area.
3.8.1. What the proposed package could cost
Contact appreciates that the high level nature of the proposals makes it hard to assess cost. However, the discussion of cost takes into account only the cost to central government and local government of what is being proposed. The Discussion Document notes that “even if only some of the package was adopted, any substantial change to either the RMA’s principles or the planning system would probably require new plans.”3 That is a cost that will fall on participants in the planning process also. Contact, along with many others in the community and business, invests huge time in consulting with local government and submitting on policy and planning documents and participating in hearings. Many districts and regions have sound, well developed existing planning frameworks. Many are part way through multiple variations/changes to different plan issues that would have to be recommenced. While there may be long term benefits in the proposals, the short term costs and risk of planning fatigue in the community are very real and should not be underestimated.
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Final comments
Contact appreciates that many of the changes promoted in the Discussion Document are intended to assist business to do business while also safeguarding the environment. In Contact’s view the proposed changes to existing sections 6 and 7 will achieve this as they reflect the TAG Group’s wide experience.
While other proposals are still fairly high level and therefore hard to cost as noted above, the Ministry needs to undertake a robust cost benefit analysis of the proposals before proceeding; in particular, of those proposals that will require combined plans (via template) or jointly developed plans and recommencement of planning processes already underway. Contact is also aware that in parallel to this work, changes to the RMA are being developed to address revised water
management. There needs to be greater coordination between these two work streams given the overlap as far as water users are concerned.
Contact has extensive consenting and planning experience as outlined at the beginning of this submission. Contact would be very happy to meet with the policy team to assist in road testing the proposals as the detail is developed.
