In just over a week’s time we will find out whether all the work that Environment Minister Nick Smith and his team have put into the latest round of Resource Management Act (RMA) reforms will ever see the light of day.
That is when voters in Northland will decide whether to let the National Party maintain its effective majority in Parliament or opt for a bit of something different in the form of Winston Peters and New Zealand First.
The event matters because, without Northland, Prime Minister John Key will have to turn to United Future and the Maori Party to form a government; the same minority partners who scuttled National’s last attempt to reform the RMA in 2013 and whose entrenched positions are unlikely to have changed.
The by-election puts at risk some of the most substantive reforms in the history of the RMA, with Mr Smith having hinted the changes will provide for greater recognition of property rights, introduce planning templates and strengthen national policy tools.
At this stage, the details of the reform package are unknown but hints in Wellington suggest sections 6 and 7 are likely to be merged and Mr Smith’s team is putting excessive red tape in its crosshairs.
And just to make the whole thing even more dramatic, the polls are so close that some political insiders are calling the by-election a de facto referendum on the RMA.
It makes for exciting politics but unfortunately the outcome is probably not going to matter one way or the other when it comes to real reform of the RMA.
That’s one of the main conclusions of The New Zealand Initiative’s latest report, From Red Tape to Green Gold, which will be launched on Monday.
The report is the second in a two-part series on the country’s extensive resource estate and, more importantly, the regulatory barriers that prevent businesses from tapping this mineral wealth.
The significant problem with the RMA, as we see it, is that it is severely dated. At the time the legislation was drafted (1991), a hazards-based regulatory framework was seen as the best means to promote sustainable management of natural and physical resources. Those familiar with the legislation probably know it as “effects-based.”
Hazards-based regulation is the process whereby an applicant – in this case a mining company – has to identify every potential damage or harm that may occur from a development activity, and then show how they will avoid, remedy or mitigate these effects.
Critics of the hazards approach see it as over-regulation, characterised by reliance on the courts to resolve disputes and inflexible rules, with little consideration given to the costs imposed by red tape. Those who have applied for consents through the RMA will be familiar with all of the above.
For this reason, Australia, Canada, parts of Europe and the US have since moved to a risk-based regulatory framework. This looks at all the aspects that the hazards approach does but also considers the likelihood of the harm occurring, as well as the severity of the harm.
Pharmaceuticals are probably the most common sector where a risk-based approach is used, with regulators assessing the negative side effects of a drug weighted against the chance of these effects occurring, as well as the severity of the effects.
Severe nausea, hair loss and a chance of dying are all hazards that might stop us from taking a particular drug. But where the drug is used to treat terminal cancer, we might be willing to accept these risks and consequences.
The same risk assessment techniques can be used in mining and indeed are. Across the ditch, South Australia has been using this risk-based mining regulation for close to 10 years and the state is widely considered to have one of the best resource regulatory regimes in Australasia.
There, risk-based mining legislation has resulted in more projects getting consented, and in a shorter timeframe, than most other Australasian jurisdictions, especially New Zealand. In fact, it is being used as a template for other parts of Australia.
More importantly, South Australia’s track record on the environment and mining is also superior to New Zealand’s, with the state ranked higher on measures of environmental assessment processes, native vegetation management, biodiversity offsets, noise pollution and fauna management.
In effect, where mining is concerned, the RMA delivers neither the environmental protections that many New Zealanders expect from the legislation nor the economic benefits. That’s not a zero-sum gain but a net loss to the country.
The practical limits of the RMA’s hazards framework can be seen in the Trans-Tasman Resources and Chatham Rise Phosphates decisions.
In both cases, the Environment Protection Authority was effectively forced to decline the undersea mining applications because of the cautionary hazards-based approach to environmental management enshrined in the RMA that was carried over into the Exclusive Economic Zone and Continental Shelf Act (2012).
Even where the EEZ legislation allows for adaptive management to be used (small scale versions of a project to answer environmental uncertainties), the risks still seem to be too great to take on in light of the precautionary principles, regardless of the likelihood or the consequences of those harms.
This is why Northland doesn’t matter for the RMA, at least in a big picture context. Whether National holds on to power and Mr Smith’s reforms come to pass, or voters hand Winston Peters an electoral seat, we will still be stuck with a piece of legislation that is in dire need of modernisation.
This is not to say the next round of RMA tweaks won’t improve resource use processes in New Zealand, especially where it comes to urban issues. However, it does feel a little like rearranging the deckchairs on the Titanic, when what is really needed is a dramatic course change, or maybe a new vessel altogether.
New Zealand needs real reform of the RMA, changes that modernise the legislation and bring us up to international best practice. That means adding a risk as economists and statisticians understand it to the resource use equation, not just hazards.