This is the third update in a series on the recently introduced Natural and Built Environment Bill (NBE Bill) and the Spatial Planning Bill (SP Bill).

The Bills have been referred to the Environment Select Committee for further consideration, with the submission period closing on 5 February 2023 (extended from the original date of 30 January 2023).

This update focuses on the future consenting regime. For our other updates on the proposed new legislation, click the 'Beyond the RMA series' tag above. 

Consenting under the RMA a key driver of inefficiencies

Across the political spectrum, consenting under the RMA has been viewed as a barrier to realising sustainable management because it is complex, costly and slow. To rectify this, the Bills aim to deliver a “cheaper, faster and better” resource management system.[1] There are several proposals for how to achieve this, including reducing consent categories, streamlining notification, removing the need for hearings, and reframing what can/cannot be considered by consent authorities. Whether these changes will assist will remain up for debate, at least until the new plans, processes and concepts are embedded. Litigation is likely.

There will be fewer activity categories

Four activity categories will apply: permitted, controlled, discretionary and prohibited. There will no longer be restricted discretionary or non-complying activities.

The NPF and Natural and Built Environment Plans (NBE Plan) will determine the status of activities, with a focus on whether an activity will achieve the system outcomes listed in the NBE Bill (rather than the effects of the activity). Direction is provided on the types of activities that should fall within each category:

• Permitted and controlled activities will have known (or generally known) effects that can be managed in a way that meets relevant outcomes.

• If it is unclear or unknown whether an activity can meet a limit or contribute to an outcome, it will fall within the discretionary category.

• An activity will be prohibited if it would breach a limit or compromise an outcome (hence the importance of the NPF and NBE Plan content).

The NBE Bill provides for a wider scope of permitted activities by enabling NBE Plans to permit certain activities in reliance on written approval or certification. The NBE Bill also introduces an ability for NBE Plans to require a person to obtain a permitted activity notice (PAN) prior to commencing a (otherwise permitted) use or activity. A PAN may impose pre-conditions relating to monitoring, cost-recovery or third party approvals/certification. An application for a PAN must be determined within 10 working days, and a consent authority cannot request further information. The NBE Bill does not specify what happens if a consent authority declines an application for a PAN. There is no specific right of objection or appeal so at this point the options for unsuccessful applicants will be to adjust the proposal and reapply, or bring judicial review proceedings.  

The NBE Bill also provides a new mechanism to allow activities that technically infringe any permitted activity standards to proceed without a consent. Councils will be able to (at their discretion) waive the need for compliance with permitted activity standards if an activity will result in a “marginal or temporary” infringement; negligible adverse effects; and if written approvals have been obtained. Under the RMA, technical infringements can be costly, triggering requirements for restricted discretionary consents. The waiver option could provide considerable benefits if it is used appropriately.

Resource consent will be required for controlled and discretionary activities. The new controlled activity category effectively replaces the RMA restricted discretionary category. A consent authority may grant or refuse an application, but it can only consider aspects over which it has reserved control. The matters of control will be determined by the NPF and NBE Plan (as applicable).

Notification is refocused on information rather than participation

Under the NBE Bill, the focus will be on whether notification will provide the decision maker with more information (rather than providing for public involvement where potential effects reach a certain level). The reason for this change is to reduce discretion and uncertainty through consenting (and therefore improve efficiencies).

Notification decisions under the RMA have been the subject of considerable debate before the courts. There is a large body of case-law on the meaning of terms such as “minor”, “affected” and “special circumstances”. The proposed new regime will depart from the established RMA principles entirely.

The intention is that the NPF or NBE Plans will specify whether public or limited notification is required for a particular activity, rather than this being assessed on a consent by consent basis. Under these requirements, the NPF and NBE Plans must require public notification if:

• there is uncertainty as to whether an activity would meet outcomes or breach limits;
• there are clear risks or impacts that cannot be mitigated by the proposal;
• there are relevant concerns from the community; or
• the scale or significance (or both) of the proposed activity warrants it.

Limited notification will be required if:

• it is appropriate to notify any person who may represent the public interest;
• there is an affected person; or
• the scale or significance (or both) of the proposed activity warrants it.

The NBE Bill provides a list of matters to be taken into account when deciding whether a person is an affected person for the purposes of limited notification. This includes: weighing the positive effects of a proposal against the adverse effects on that person, and whether additional information is necessary for assessing the activity against relevant limits, targets and outcomes.

Notification will be prohibited where an activity clearly aligns with relevant outcomes or targets or there is no “affected person”.

Despite the apparent intention that the planning documents will determine the notification status of activities, the NBE Bill specifically allows NPF and NBE Plans to defer notification decisions to consent authorities. Unless the NPF or NBE Plans provide to the contrary, consent authorities must process controlled activities without public notification and discretionary activities with public notification. Where a notification decision is deferred to the consent authority, it will be possible to challenge those decisions in the Environment Court by way of declaration, instead of by judicial review in the High Court as is the case currently.

Decisions require new matters to be considered or disregarded

Decision-makers will be required to take into account new matters when considering consent applications including:

• whether a proposal will contribute to any relevant outcomes, limits, and targets in planning documents and/or the NPF;
• the likely state of the future environment (as informed by planning documents); and
• the applicant’s enforcement history.

Additionally, and in an apparent attempt to combat so-called “Nimbys”, a decision-maker will be required to disregard adverse effects on scenic views from private properties, and those arising from the use of land by people on low incomes or with special housing needs. This is likely to be very controversial given recent experiences in Rotorua.

All of the above applies to subdivision. In addition, consent authorities will have wider powers to refuse, or impose conditions on, a subdivision consent on the basis that it is necessary to “reduce risks” from current or future natural hazards. This contrasts with the current system, where a consent authority may only refuse subdivision consent if it considers there is a “significant risk” from natural hazards.

The NBE Bill also provides for a wider range of consent conditions to be imposed for adaptive management and other purposes.

As is the case under the RMA, applicants and submitters can appeal the decision to grant consent (or not) to the Environment Court.

New consenting pathways are introduced

In addition to direct referrals and consent processes for proposals of national significance (which are retained as in the RMA), two new consenting pathways are introduced.

The first is the ‘affected application’ pathway. The NBE Bill enables the NPF and NBE Plans to require councils to allocate scarce resources (such as freshwater and geothermal water) using this pathway. Councils will be required to publicly notify a timeframe for ‘affected applications’ to be received; and then determine all ‘affected applications’ at the same time in accordance with the standard consent process. An applicant cannot request to have their affected application determined under the direct referral process or called in as proposal of national significance unless every other “affected applicant” agrees. Consent authorities can also request that the Environment Court determine affected applications. Standard appeal rights will apply to the affected application process.

The second is a new fast track pathway for both consents and designations for specified housing and infrastructure projects, based on the process under the COVID-19 Recovery (Fast-track Consenting) Act 2020. It is a two-step process, with an application to the Minister first, followed by a consent application that will be determined by an expert consenting panel. The process does not require notification (unless specified in the NPF or NBE Plan) or hearings. A two-year lapse period applies, which means the process is only appropriate for projects that are construction ready. Limited appeal rights apply - a decision may only be appealed to the High Court on a point of law.

Other notable changes

Existing use rights are no longer guaranteed, with NBE plans allowing existing rights and land use consents to be reviewed when there is harm to the natural environment or risk associated with natural hazards, climate change or contaminated land. Importantly, consent authorities will also be empowered to cancel land use consents that cannot comply with the plan rules.

Consistent with a shift towards ‘information’ and away from ‘participation’, a consent authority may decide not to hold a hearing on a resource consent application if it considers that it has sufficient information to make a decision on the application without a hearing, regardless of whether the applicant or a submitter wishes to be heard.The ability for councils to exercise discretion in this way (which we assume will be reviewable) could lead to significant debate and litigation.

Our comments

Overall, the NBE Bill aims to distinguish activities based on certainty of effects and outcomes. As these can be highly contentious questions, we anticipate there will be considerable debate about how an activity should be classified through both the NPF and NBE Plan development processes. There is a risk that the inherent complexity in natural systems, combined with reduced activity categories and the need to favour “caution” and proportionate environmental protection (the new decision making principle in clause 6(2)), could result in an overreliance on the discretionary category.

Similarly, any uncertainty regarding whether a controlled activity application will meet outcomes or breach limits may result in those applications being publicly notified.

If this cautious and protection-focused approach to risk and effects is taken, it is unlikely the efficiencies sought by the Government would be realised. To avoid this situation, clear limits, targets and a proper description of the outcomes and how to achieve them will need to be formulated and implemented through the NPF and NBE Plans.

Uncertainty and delay are also very likely to result from the new (and untested) processes and concepts that are introduced by the NBE Bill. Notification is a good example of this. The new notification tests are expressed in vague terms - with subjective concepts such as “sufficient”, “clear” and “warrants” involved. We expect this ambiguity will take a while to work through, and litigation is likely.