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Upton Speech to Resource Management Law Assn.

1 OCTOBER 1999

National direction or national interference?

The review of the Resource Management Act, which has led us to the Amendment currently before Parliament, has been marked by regular calls for more national direction.

Business bemoans the fact that requirements can vary from region to region, that there is no certainty. Even local government has defended itself against the mounting criticism by complaining that central government has provided no national guidance.

Now that the likelihood – the certainty – of greater national direction is on the horizon we are starting to hear cries about loss of flexibility. We've even heard – believe it or not – that National Policy Statements and National Environmental Standards are contrary to the principles of the RMA.

It is something of an urban myth that the RMA devolved the major responsibility for environmental management to local government. The truth is that many of the functions had been devolved for decades. The RMA simply completed the picture that had been emerging over a lengthy period - since 1941 in fact for the soil conservation and flood control functions.

The principle that decisions are best taken closest to the community of interest is as valid today as it was in 1991. But that is not to say that there will not be, in some circumstances, a need for central government involvement.

The RMA deliberately set up processes for central government involvement through National Policy Statements, call-ins, and National Environmental Standards.

We've had one call-in so far. Though we have looked closely at the need for others, we have concluded that the national interest did not require it. We have started on the process of developing the first National Policy Statement – (aside from the NZ Coastal Policy Statement that was required by law). And we are talking seriously about not one, but a number of National Environmental Standards.

This is not some latter day attempt to wrestle back control of environmental management. The use of these instruments was envisaged from the day that the RMA was passed. For various reasons, we have not used them till now.

It has never been, in my view, a question of whether central government should be involved in environmental management but rather how and in what circumstances. Central government has the power to require local government to act consistently when it is in the national interest that it should do so.

Central government should intervene where it is adding value. Clearly central government does not always have all of the answers. But neither does local government.

The Government has, over the last few years, provided significant amounts of guidance on RMA processes. In fact, tomorrow the latest in a series of Excellence in RMA Practice documents will be released on NIMBY. This has drawn on best practice at both central government level as well as at the local level. There are lessons for all in the siting of contentious facilities within communities.

New Zealand is a small country – maybe not in land area when compared with many others, but certainly in terms of our population and economy. Our total population doesn't add up to much more than a reasonably sized city overseas. While management of a very diverse environment is more complicated than for the average international city, the size of our market means that many businesses operate all round the country and across the Tasman as well. It doesn't make sense, in my view, to complicate every activity and initiative with endless unnecessary variations on local rules.

That's not to say that we don't need local rules and local decision making to get the best results for the local environment and the wishes of the community. But we do need to think about where local variation is sensible and where national consistency is important.

The RMA provides two means for formal central government guidance – National Policy Statements and National Environmental Standards.

A National Policy Statement sets out policies and objectives to guide regional and territorial planning. It cannot set controls. National Standards, on the other hand, clearly impose controls

Looking first at National Environmental Standards, they are regulations under the RMA. They have the force of law so they can over-ride regional rules. By doing that, they ensure an element of consistency around the country. Designed to protect human health or the environment, they can be used to place limits on discharges to air, water and land.

Not all National Standards will need to specify the same things. A standard may set maximum pollution limits or discharge standards. It may specify prohibited and controlled activities in the same way as a regional plan. It may provide for unified national classification systems, such as for grading landfills.

With the proposed amendments a National Standard will be able to prescribe technical methods to be used for monitoring or data measurement. It will be able to set information and record-keeping requirements.

National Standards cannot be introduced overnight. They require an extensive development process and we must show that the issue is sufficiently serious to require national regulation. For that reason, they will be used only for environmental problems that are considered irreversible or high risk, or where controls at the local and regional level either have not been used or are considered inadequate.

Let us be clear about one thing. National Environmental Standards are not regulations used in isolation. They are just one tool that can be used to achieve consistency in environmental management. You will invariably find them as part of a package of measures designed to work together to achieve the environmental outcomes we are seeking.

For that reason, you may find that sometimes we will consider National Standards but not, in the end, decide to adopt them. If on analysis, they won't add value, we shouldn't use them.

Why have there been so few National Standards so far (none, in fact, except the marine pollution regulations)? Well, they are legally enforceable. There's no if, but or maybe. On the other hand guidelines – which we have used extensively to manage water and air quality and contaminated sites – have some advantages. They are non-statutory documents that can be used to specify recommended but not legally enforceable standards. Guidelines leave room for testing and feedback and modification.

Take the Bacteriological Water Quality Guidelines for Marine and Fresh Water published in late 1998. Ignore the dreadful name – we are talking about the quality of the water that you swim in at your favourite beach. Do you know if that water is fit to swim in? Can your children catch some nasty bug from paddling in the waves? In some parts of New Zealand, I have to tell you, the answer to the last question is "yes, they certainly can".

But back to the guidelines: they were developed by the Ministry for the Environment working with health authorities and a number of interested councils. They were trialed by councils last summer. They found out what worked and what did not, where the gaps were, and what should be changed. Mostly they found that they needed a supporting manual to provide guidance on sampling and in communicating with their community.

That refinement process is one of the major advantages of guidelines. To promulgate them as standards requires further extensive consultation so that we can be assured that a legally binding standard is the best way to achieve the environmental outcomes we are seeking. The same rules apply here as apply to councils under section 32 of the RMA – if we are going to regulate, we must demonstrate that the benefits outweigh the costs.

So why are we now considering National Environmental Standards instead of guidelines? Let me give you an example.

Remember your favourite beach? We know that New Zealand has one of the highest rates of water-borne diseases in the developed world. We know that you can get sick from swimming or playing around in polluted water. And we know that the water at many of our popular beaches – which, of course, are popular because they are near urban areas – is often not of high quality. This is especially so after heavy rains when stormwater or sewage overflows cause pollution.

Inevitably, councils monitoring the water will be under pressure to judge that the risks of losing income from visitors are greater than the risks to people swimming in that water. The trouble is, what you don't know may hurt you. People have a right to know what risks regulatory authorities have decided they will be exposed to.

Why is this example relevant? The guidelines covering marine bathing water may well become National Standards. That way, when you take your family to the beach you can be assured that the water will be fit to swim in or you will be warned that it is not. I expect to receive advice from the Ministry later this year as to whether these guidelines should be developed into standards.

National Standards are also being considered to limit discharges of toxic contaminants to air or water. This is part of a wider work programme to improve management of air and water, which includes review of the Ambient Air Quality Guidelines and the proposed National Agenda on Sustainable Water Management.

But first off the blocks are likely to be standards dealing with hazardous waste, particularly two special cases: used oil and organochlorines.

Used oil is to some people a waste to be disposed of. To others it's a resource they can use – for fueling low-temperature incinerators, or keeping the dust down on rural roads, for example. Neither of those uses is an appropriate way to get rid of used oil – it is contaminated with chemicals that may be carcinogenic and with heavy metals.

Dealing with used oil is one of the big waste issues in New Zealand. We have tried voluntary standards and guides but so far these have proved ineffective. Currently 20 million litres of oil each year is unaccounted for – it disappears somewhere in our environment. If we are going to deal with it effectively, we need an integrated collection system and uniform standards across the country.

With organochlorines, on the other hand, the reverse is true. Here we are recognising that prevention is better than cure. An extensive programme of research into background levels of these contaminants in our air, soil, freshwater, estuaries, food and human bodies has shown that we are in a very favourable position compared with most developed countries. Our background levels of organochlorines are very low.

Organochlorines like dioxins and PCBs belong to a particularly nasty group of chemicals which are now of international concern. Once you ingest them, you never get rid of them. They gradually build up in the body, and they have been linked to cancer and other serious health problems.

So we are planning a broad strategy to reduce risks to human health, the environment, and our international trade. Part of this will be a National Environmental Standard to set emission limits for dioxins and PCBs.

The hazardous waste programme is also looking at National Environmental Standards. One of my advisers commented recently that compared with the way hazardous waste is managed in US landfills, New Zealand is like a developing country. So the Ministry for the Environment is in the process of developing a national definition of hazardous waste and a framework for management.

Landfill management as a whole is not improving as rapidly as we would like, judging by the two surveys carried out since 1995. And the criteria used for making decisions about disposal of hazardous waste at landfills are one of the biggest concerns. Sometimes there are none. So landfill acceptance criteria are one of the prime targets for National Standards.

The Ministry will certainly be seeking your views, and the view of the wider community, before we go much further down this track. You can expect to see discussion documents on a number of these proposals early next year.

The key point with things like used oil, dioxins and land-fill acceptance criteria is that our performance matters at a national level. As a major food producer and exporter, a generally clean environment and the marketing opportunities that spring from that can be undermined overnight by non-performers.

We all saw what happened to Belgian international markets recently when dioxins were found in some of their foodstuffs. The New Zealand economy simply can't take that risk because some councils or some industries can't be bothered. A regulated minimum level of performance provides a solid, verifiable basis on which exporters can market their products. We want to sell our food to rich consumers. Rich consumers want to know what they're eating. It's no longer enough to rely on a clean, green image that can't be verified. National standards are a way of helping to validate the claims we want to make.

As you can see, there are a number of environmental problems that we consider could be improved by the use of National Standards.

If we listed all the various calls for National Policy Statements you would find the list was even longer. In fact, in the submissions on the proposed amendments to the RMA there were calls for 18 different NPSs. Apparently some people think that an NPS is a panacea for almost any environmental or planning problem, from noise to landscape character to community services such as libraries.

Right now we are working towards only one – a National Policy Statement covering biodiversity and related matters. I am sure that you do not need reminding that loss of our inheritance of unique plant and animal species is New Zealand's most pervasive environmental problem.

As a nation we face enormous difficulties managing biodiversity. Severe information gaps and uncertainties about roles and responsibilities have compounded these difficulties. We need a concerted effort by all sectors of society if "turning the tide" is to be more than a catchy title.

Loss of our biodiversity is a national problem. More than 8,000 submissions have told us New Zealanders want to turn the tide of loss. We are not just talking of holding the line where we are today – turning the tide means action effective enough to bring a halt to biodiversity loss.

If we are going to do that, we need to be thinking about more than the Crown estate. We have to work with private landowners to better manage biodiversity on private land.

A National Policy Statement under the RMA is likely to be one part of responding to that challenge. It is not the only part. We recognise that a broad programme of education, incentives and other tools will also be necessary.

An independent Ministerial Advisory Committee, supported by the Ministry for the Environment, has already spent many hours exploring the issues. I will be considering a report from the committee over the next few weeks and expect to release a document for public consultation sometime afterwards.

This document will deal with our general approach to the issues. Next year there will be a further round of consultation on the NPS following the process required by the RMA. This includes a board of inquiry appointed to investigate and report on the proposal and make recommendations to the Minister.

Finally, let me remind you that the RMA is all about environmental outcomes. It is because we want to improve the outcomes that we are looking at the need for national direction. Over the past few years we have spent so much time gazing at the process and telling each other what was wrong with it, that one might be forgiven for wondering if we'd forgotten why we have this law.

If national instruments can achieve better results on issues that are nationally significant, then that is what we will use. Where regional and local rules and standards can achieve the desired results, then that is what should be used. I see no chance of central government wanting to make all the decisions. We simply haven't the staff or resources to do this. But at the end of the day the buck stops with the Minister. So when it is in the national interest to do so, central government will provide direction.

[ Provocative bullet points]


 So far I've talked about what instruments might be used to set the regulatory environment. Underlying all this analysis about whether a NPS or a NES is a good idea - ably supported of course by a rigorous section 32 analysis - is a bigger question that needs to be addressed.

 Fundamentally, is the RMA implementable? And by this I mean - do we as a nation have the right skills in the right place to really make a go of sustainable management?

 Are the institutions tuned and ready to deliver? 86 units of local government and, more particularly, 70 territorial authorities? Many are anorexic rural entities. Some of our larger companies must have more employees than these small communities have ratepayers. Can they really finance quality environmental management? It's very easy for a community to specify through rules what the desired outcomes might be. The question is can they monitor and ensure that those environmental outcomes are achieved. Clearly, in the absence of good information and good funding the default option is to regulate, and stringently, for desired environmental outcomes - often meaning little or no change is allowed.

 The 16 regional councils? And I include here the four unitaries. Is the West Coast a viable institution? Are Otago and Southland Regional Councils sufficiently different that they couldn't be amalgamated into a large organisation with a greater level of horsepower? Tasman with its 10,000 ratepayers and Nelson city could easily share skills and services. I note the Parliamentary Commissioner in his latest report has advocated a greater sharing of expertise amongst councils. I feel there is certainly some opportunities here that should be seized upon.

 Are we too precious about the 1989 local government reforms and the institutional structures that they created? The 1989 reforms moved from an era of over 800 units of local government to 86. That was 10 years ago. With the implementation of corporatisation and outsourcing of service delivery, should be focus more closely on what communities really want and what the most cost effective means of delivery of regulatory services is? Are we facing another round of amalgamations etc? Take, for example Hawke's Bay where the proposed merger of the councils into one Hawke's Bay "super-council" that carries out the district functions is likely to contribute a much higher level of efficiency. Admittedly, there is a potential loss of representation for communities. And that leads me on to the next question - the quality of representation.

 Where are the politicians coming from? Let alone quality politicians. Every three years there must be around a thousand local government politicians press-ganged into the service of the Resource Management Act. These quasi-judicial roles in granting resource consents and setting policies through plans are a significant challenge. Are the skills there? The nation struggles to find 120 skilled MPs for national government.

 Equally, there must literally be thousands of local government staff involved in resource management. Do we have the best and brightest driving innovation in RMA implementation? Or are the good ideas constrained by the small canvas that many of the agencies work with?

 Knowledge transfer is one aspect of RMA implementation that the Ministry is focusing on the coming year with a particular emphasis on plan development. Much of this material will be on the web as well as produced through published reports. The challenge is to marshal the innovation that has already happened in RMA management and then communicate it to receptive people and institutions nationally.

 This does of course lead to the question of an EPA at central government level. You might get asked about whether that is the ultimate result of questioning the performance of local government.

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