Operation Minotaur – Options for Legislative Reform

29 Aug 13

The present system in New Zealand of regulatory approvals for mining activities has been described as a legislative and administrative labyrinth. This paper overviews some options for reforming the system. Dubbed ‘project ‘Minotaur’, the drive for improving the efficiency and cost effectiveness of the system while retaining strict environmental controls is gathering momentum.

In Greek mythology, the Minotaur was a creature with the head of a bull on the body of a man. The creature resided in the twisting maze of the labyrinth, where he was offered a regular sacrifice of youths and maids to satisfy his cannibalistic hunger.

The task of reforming the mining regulatory system is to achieve positive outcomes without unnecessary sacrifices.

The mining industry currently faces compliance with at least five separate pieces of legislation covering environmental and heritage issues in order to access and operate on public conservation land. This situation is onerous, contains unnecessary duplication and confusion, and leads to increased costs and delays for developers, stakeholders, and regulatory agencies. From an industry perspective it is a legislative and administrative labyrinth.

There are a range of options for legislative reform to streamline consenting requirements for mining (and other) activities on public conservation land, ranging from major reforms involving Environmental Protection Agency (EPA) or Board of Inquiry (BOI) involvement, to a low key streamlining of the Crown Minerals Act (CMA) and Conservation Act (CA) to introduce more efficient processing of applications. This paper identifies the primary reform options and their associated benefits and disadvantages.

Option One – streamlining existing processes
Option one is suitable if there is no appetite for more significant legislative reform. It simply streamlines processing timeframes in the CA and CMA, similar to the stricter timeframes provided for in the RMA, for instance, by requiring the Minister(s) to make a decision on access arrangement or concession applications within 20 working days of receiving a recommendation. There would be no change to the legislative tests.

The processes for obtaining resource consent, access arrangements and concessions would remain separate. The existing legal tests under each Act (the CA legal tests are different from the CMA legal tests) would also be retained.

A refined version of this option could provide for an appeal to the Environment Court for concessions under the CA and possibly for access arrangements under the CMA. The appeal could either be by way of a rehearing (where the evidence provided at the first hearing is reconsidered on appeal) or ‘de novo’ (where there is completely new evidence considered completely afresh in a new hearing). The Environment Court would be empowered to make decisions on concession applications, and perhaps for access arrangement applications, or alternatively, to make recommendations to the relevant Minister(s).

Option Two – Crown Minerals Act rather than Conservation Act for mining related activities
Option two involves amending the CMA to provide a ‘one stop shop’ for mining and mining related activities, so that there is no need for concessions under the CA for mining activities.

Activities which are ancillary to mining (e.g. formation, use and maintenance of roads, stockpiles, processing plants, power, water treatment plants, bridges, plant nurseries, explosives storage, workshops/machinery storage and such like) often occur outside mining permit areas because space within a MP area is at a premium, or the area does not have suitable topography for infrastructure, or the activities would overlie the mineral and sterilise the resource. Currently, it is the Department of Conservation’s position that any mineral related activities on DOC land which are outside a mining permit area require a concession rather than an access arrangement.

The reform would amend the CMA to return to the pre-CMA concept of ancillary mining activities or ‘mining operations’, so that all mining related activities which are part of a project require an access arrangement, not a concession.

There need be no changes made to the legislative tests or the relevant decision makers.

Option Three – basic amendments to Crown Minerals Act and the RMA
This option involves:

a. Making mining related activities subject to the CMA and not the CA as per option two;

b. Amending s61 CMA to remove reference to environmental/conservation effects so that an access arrangement becomes a simple mechanism to provide for rental; and

c. Amending s104 RMA so that where applications were made for resource consents for mining activities on Crown land additional matters would be taken into account. This could be done by transferring the matters from s61(2)(a), (b), (c) and (da) CMA. The benefit of this is that the overall test remains sustainable management under the RMA, a concept that is well understood.

d. For access arrangements in relation to private land it would delete s60(1)(e) CMA – which states an access arrangement may make provision for the things a permit holder must do in order to protect the environment. The proposed change in the RMA that requires property rights to be taken into account will address concerns about taking the matter out of the hands of landowners.

e. Extending the compulsory arbitration process under ss 63-75 CMA to all ‘significant’ mining proposals.

Option Four – combined consent, concession and access arrangement processes
This option requires a substantial legislative reform and involves a new class of environmental approval for activities on public conservation land that would combine resource consent, concession and access arrangement requirements into one aligned process (reform of the Historic Places Act and Wildlife Act processes could also be included). The reform is premised on the fact that there is potential for more businesses to operate sustainably on public conservation land, but this growth potential needs a fit-for-purpose, legislative and regulatory framework. Under this reform option businesses would manage, as an integrated package, the effects of their activities on the environment and on conservation values.

A new Part would be introduced into the RMA, providing for a new class of regulatory approval, say a “conservation permit”, for all commercial activities on public conservation land. “Conservation permit” applications would be assessed against sustainable management criteria, as for resource consents, and relevant conservation-related tests, e.g. consistency with statutory land management plans under the CA, and the purpose for which the land is held.

The EPA would receive all applications above a specified threshold. Setting the threshold would require careful consideration. For the purpose of this paper we have simply proposed that the threshold would be ‘significant’ minerals exploration and mining, electricity generation and transmission, and tourism and other infrastructure. However we recognise that there are often medium to large projects that are low impact activities and are not ‘significant’, and smaller projects that are ‘significant’, so further thought regarding an appropriate threshold is required. An appropriate test may be set out in the recently amended s 61(1AAB) CMA about ‘significant’.

‘Significant’ projects would be referred directly to a BOI or hearings panel serviced by the EPA. The Department of Conservation would nominate one person onto that BOI or panel, which otherwise would be configured and managed like other BOIs or panels, with appeals available on points of law to the High Court. Under the recently amended CMA the Minister(s) deciding on access arrangements on Crown land must have regard to “the direct net economic and other benefits of the proposed activity in relation to which the access arrangement is sought” (s61(2)(da)). This makes the decision more akin to the sustainable management test in the RMA, so it seems appropriate for a specially appointed BOI to make a decision, or a recommendation to the Minister(s), on an access arrangement.

Projects below the threshold would be processed by local authorities.

The concessions provisions (Part 3B of the CA) would be repealed.

The functions of DOC are set out in section 6 of the CA. Section 6(e), which currently states:

“To the extent that the use of any natural or historic resource for recreation or tourism is not inconsistent with its conservation, to foster the use of natural and historic resources for recreation, and to allow their use for tourism”, could be amended to replace “allow their use for tourism”, with “enable their commercial use and development”.

The “conservation permit” provisions would also provide for landowner approval, i.e., from the Minister of Conservation, in the form of rent related to the value of the land. Guidance for assessing the value of the land could be set out in a schedule to the RMA, or a regulation. This would provide transparency and certainty for developers and the Minister.

Section 61 of the CMA and associated provisions relating to access to public conservation land would be repealed.

To read the full article including  the advantages and disadvantages of these four options in further detail click on the PDF version below.

Prepared by Mark Christensen and Jackie St John.

PDF version : Operation Minotaur – Options for Legislative Reform