In this FYI we consider the report of the Infrastructure Technical Advisory Group (ITAG) released in August 2010, forming part of Phase 2 of the Government's RMA reform.

We refer also to our FYI of 3 November 2010 on the companion report by the Urban Technical Advisory Group "Building Better Cities - Proposed Reform of the Urban and Infrastructure Planning System".

The objectives of these reforms include achieving least-cost delivery of good environmental outcomes, providing greater government direction, and avoiding duplication of processes. The starting point is that public participatory principles contained in the RMA are considered sound, but there is the need for "efficiency enhancements" in the process for consenting of major infrastructure.

The report identifies a number of consenting issues under the RMA and the Public Works Act (PWA) relating to infrastructure, and provides a list of 49 specific recommendations, with a view to improving the designation mechanism, including alternatives to designations in relation to network infrastructure, and streamlining and integrating processes under the PWA.

We summarise the key recommendations, which the report states are "deliberately innovative and evolutionary".

Designations and other RMA issues

Concept Designation for Major Infrastructure Projects

The report identifies a number of overseas jurisdictions including Ireland, Australia and the United Kingdom that use the concept-based consenting method for major projects:

"In contrast to New Zealand, key features of overseas practice are that major projects almost always go through a dedicated independent approval or recommendation process and are not considered by local authorities. The regional and national economic, social and environmental benefits are considered in substance, as well as the environmental effects. Public participation is focussed at the front end of the process on the overall merits of the projects, rather than being involved in the detail of environmental regulation. Concept approval processes are the norm, rather than the exception and innovation in project design and delivery is incentivised."

The current major project consenting path, being a direct application to the Environmental Protection Authority (EPA) or Ministerial call-in, is considered in the report to be essentially a "one-stop last-chance shop", such that if the application fails to identify minor resource consents, or if as a result of submissions and consultation the project route, site footprint or design is altered, the notification and hearing process may have to be recommenced.

This makes it impracticable for use with more innovative project delivery methods that are now used by NZ Transport Agency, for example, "project alliance", "design and construct" and "public private partnerships". These options all involve, to some extent, incentives for value adding innovation and risk refinement, to achieve changes in design and construction methodology.

The report promotes the option of a "concept designation" for near term (under 10 years) major infrastructure projects, where detailed design is not available, but is instead to be addressed at the outline plan stage.

The concept designation would provide for the assessment of effects to be appropriate to the stage of preliminary design only, allowing flexibility for detailed design to be reserved to the outline plan stage, but would:

  • Have a maximum lapse period of 10 years;
  • Require comprehensive performance standards for mitigation of any adverse effects (eg noise, discharges, and traffic) that would not change if the project delivery mechanism or construction is altered post-approval;
  • Stipulate that any subsequent resource consents to give effect to the designation would be deemed to be "controlled activities".

"Project Consent" Option

The report proposes another new streamlined consenting path for major infrastructure projects, termed a "project consent". Such a consenting path would be available for infrastructure that satisfies the "national significance" test in section 6AA of the RMA. The decision as to whether the project consent path was available would be for the Minister, on the recommendation of the EPA.

Such a consent would be "a single comprehensive authorisation to conduct the development", and adopt an "envelope of effects" approach to allow greater innovation and flexibility of project delivery.

The consent, to be administered by a single centralised agency, housed in the EPA, would involve two key stages:

  1. A concept design approval through a Board of Enquiry process that determines the permissible envelope of effects; and
  2. Design approval through the EPA or other agency as directed by the Board of Enquiry to rigorously evaluate whether the detailed design falls within the envelope of effects.

This streamlined process would replace the multiple decision makers (including separate agencies such as the Historic Places Trust and Minister of Conservation under the Reserves Act) with one decision maker. Other aspects of this proposed project consent path are:

  • Applicants would be required to carry out extensive public consultation pre-application, identifying affected parties and all approvals required, consulting on options with all relevant authorities.
  • A detailed Assessment of Environmental Effects would need to be prepared and discussed with the EPA pre-application. When complete, the application would be publicly notified by the EPA.
  • A hearing would be conducted by the Board of Enquiry, which would decide on the application. This decision could be appealed on points of law only.
  • Once the application is granted, the detailed design would then be lodged with the EPA, which would publicly notify it and receive submissions and reports from statutory and iwi authorities.
  • The EPA would then make its decision based on whether it complied with the project consent. There would be no right of appeal against this decision.

The report stresses that the RMA's participatory processes are fundamental and should not be diminished. However, in our view public participation often drives the need to provide more "up front" detail as to how a project will be built.

In summary, the report notes that "current statutory processes inhibit efficient, innovative infrastructure development that has been well scrutinised by the public". The project consent process would be intended to address those perceived deficiencies.

Other RMA recommendations

Among other recommended changes to the RMA are:

  • Introducing "the development and operation of...significant infrastructure" as a new "matter of national importance".
  • Including port companies and electricity generators in the definition of "network utility operator".
  • Allowing requiring authority status to be given to network utility operators only for a specific project or projects.
  • That the final decision maker on all designations be the local authority (or the Board of Enquiry where an application is called in).
  • Allow for the co-location of infrastructure within a designation.
  • Introducing a new process for renewing regional consents for existing infrastructure.
  • Amendments to clarify the scope of outline plan approvals.
  • Expressly recognising the notion of "reverse sensitivity" in the RMA.  

Public Works Act

Compensation issues

The report highlights that disputes over compensation frequently cause delays in the acquisition of land, and the perception that levels of compensation are inadequate. The recommendations to amend the PWA include:

  • That the PWA include a provision enabling the acquisition of the required land on payment of the amount recommended in the authority's valuation, to secure early acquisition, with the balance to be determined by the Land Valuation Tribunal (LVT).
  • That the solatium, payable to owners of owner-occupied residential properties, that has not been increased since it was set in 1981 at $2,000, be modified as follows:
    • The $2000 base figure should be increased by indexation from 1981;
    • An additional amount of $5,000 should be payable where a property has been in the same ownership for the last 5 years, $10,000 if in the same ownership for 10 years, $15,000 after 15 years and $20,000 for 20 years or more.
  • That the acquiring authority be permitted to pay a premium above the market valuation. In particular, it recommends that the authority be entitled to pay a 5% premium as a matter of course, with a further discretionary premium of up to 10% "where there is demonstrable benefit to the requiring authority in securing early settlement".
  • To discourage landowners from pursuing objections to the taking with the apparent purpose of maximising the compensation figure, it recommends that if the landowner continues to object to the taking after 4 months, the landowner's legal and other fees on the objection would not be payable after that date.
  • In recognition of the need to deal differently with collectively owned Maori land and Treaty Settlement assets, it recommends that other options and approaches be developed in those cases, such as non-alienable perpetual leases, replacement with like for like, and partnership opportunities associated with long term/permanent occupation.
  • That the RMA and PWA be amended to allow for the Court or Board of Enquiry to hear appeals against a proposed designation and compulsory acquisition together, given that the statutory tests for designation and for compulsory acquisition are very similar.

Offer Back

The report considers that processes for the offer back obligation for former public works land under section 40 of the PWA are time consuming and could be rationalised. Possible options for reducing the scope and incidence of the offer back obligation are mentioned, however these are not developed.

One recommendation is to allow the authority to pay an additional 5% above market value at the time of acquisition in return for the landowner relinquishing the section 40 offer back obligations. This would of course only apply to future acquisitions and would not deal with existing public works land.

Feedback sought on discussion document

In our view, while some of the recommendations in the ITAG report would not alter the status quo (ie they are matters already addressed in the legislation), a number of those recommendations raise potentially significant implications for local authorities, for infrastructure providers and for landowners. They are to a large degree "high level", and their actual impact will depend upon the detail of how they are implemented in legislative terms.

Feedback is sought before recommendations are made to Government on the subject matter of this report and the companion report "Building Better Cities" - see our FYI on that report of 3 November 2010. There is an online submission form, also covering the "Building Competitive Cities" report, on the Ministry for the Environment's website, at Resource Management Reform Phase II.

Submissions must be lodged by 5pm 17 December 2010.