From Red Tape to Green Gold – the RMA Reform Debate Continues
On 23 March, 2015, the New Zealand Initiative, an independent business think-tank, published a report titled ‘From Red tape to Green Gold’. The report is the second in a two-part series on the country’s mineral resources and the regulatory barriers which prevent or slow access to those minerals.
In addition to making a number of recommendations about the increased use of government direction, identification of outstanding landscapes, and process improvements, the report argues that the Resource Management Act’s ‘hazards based’ or ‘effects based’ approach’ is “severely outdated”. It notes that when the RMA was introduced in 1991 a hazards-based regulatory framework was seen as the best means to promote sustainable management. Hazards-based regulation is the process whereby an applicant has to identify every potential effect or harm that may occur from an 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.
The report states that 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. This approach is demonstrated by regulation of the pharmaceuticals sector where regulators assess the negative side effects of a drug weighed against the chance of these effects occurring, as well as the severity of the effects.
In the mining sector, the report notes that 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”. The report goes on to argue that “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”.
The report concludes that “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”.
While the report is a useful contribution to the ongoing debate about RMA amendment and reform, we consider that when it discusses the ‘hazards’ versus ‘risk’ approach, it does so in the absence of a proper and fair consideration of what is now a substantial body of case law from the Environment and High Courts about how the RMA does in fact deal with risk. The report gives the example of acid mine drainage (AMD) from the proposed Bathurst Escarpment mine and suggests that issue, rather than others, should have been the focus of attention. Yet, AMD was considered by the regional council and the risk (effect) of that was found to be acceptable with the safeguards proposed by Bathurst. It was other issues that were seen to be of greater actual and potential effect (risk). What is incorrect, in the way that councils and the courts deal with risk and effects under the RMA? Is the RMA fatally flawed in this regard or are we just not applying the Act as well as we could? What can practitioners within the RMA process learn from the way the Environmental Protection Agency deals with risks in the hazardous substances and new organisms areas? Are there any lessons from the Exclusive Economic Zone legislation about dealing with risk that could usefully be applied in the RMA context? Rather than wholesale reform of the RMA to become a ‘risk based’ law, can the concerns raised in this paper best be addressed by changes to practice and implementation?
A copy of the report can be found HERE.
Anderson Lloyd is a leading natural resource development legal practice, actively engaged with the minerals industry at both the policy and consenting levels.