The Bill provides us with a framework to establish objectives with a biophysical bottom line that must not be compromised. Provided that those objectives are met, what people get up to is their affair. As such, the Bill provides a more liberal regime for developers. On the other hand, activities will have to be compatible with hard environmental standards and society will set those standards. Clause 4 sets out the biophysical bottom line. Clauses 5 and 6 set out further specific matters that expand on the issues. The Bill has a clear and rigorous procedure for the setting of environmental standards – and the debate will be concentrating on just where we set those standards.

Despite this clear statement of legislative intent, the courts have, until recently (see commentary on the Supreme Court decision in King Salmon below), preferred an 'overall broad judgement approach' in interpreting and applying the definition of sustainable management in the RMA. This approach involves making a broad overall judgement as to whether a proposal represents sustainable management taking into account all relevant considerations, their scale and degree, and their relative significance. It places a broad discretion in the hands of the decision-maker. Therefore, even if a proposed development fails to meet one or more of the requirements of subsections (a) to (c) above, it may still have be deemed to constitute sustainable management, particularly if it generates substantial positive social and economic benefits.

The genesis of the overall broad judgment approach traces back to observations of the High Court in NZ Rail Ltd v Marlborough DC [1994] NZRMA 70 (HC) that Part 2 should not:

be subjected to strict rules and principles of statutory construction which aim to extract a precise and unique meaning from the words used. There is a deliberate openness about the language, its meanings, and its connotations which I think is intended to allow the application of policy in a general and broad way.

The Environment Court in North Shore CC v Auckland RC [1997] NZRMA 59 introduced the term “overall broad judgment approach” and observed that:

We have considered … the method to be used in applying section 5 to a case where on some issues a proposal is found to promote one or more of the aspects of sustainable management, and on others is found not to attain, or to attain fully, one or more of the aspects described in paragraphs (a), (b) and (c). To conclude that the latter necessarily overrides the former, with no judgment of scale or proportion, would be to subject section 5(2) to the strict rules and [principles]  of statutory construction which are not applicable to the broad description of the statutory purpose. To do so would not allow room for exercise of the kind of judgment by decision-makers … alluded to in the NZ Rail case.

The overall broad judgment approach allows for comparison of conflicting considerations and the scale or degree of them, and their relative significance or proportion in the final outcome.

It has been confirmed and applied in a number of Environment Court and High Court decisions over a twenty year period. Not until the recent decision of the Supreme Court in Environmental Defence Society Inc v The New Zealand King Salmon Company Ltd [2014] NZKS 38 (“EDS v King Salmon”) has reliance on this approach been substantially challenged.

The EDS v King Salmon decision

EDS v King Salmon concerned applications for plan changes to change salmon farming from a prohibited activity to a discretionary activity at eight sites in the Marlborough Sounds. A Board of Inquiry heard the applications and, in relation to the Papatua site, it concluded that the plan change would not give effect to policies 13 and 15 of the New Zealand Coastal Policy Statement (which require adverse effects on outstanding natural character areas and outstanding natural landscapes to be avoided). Nevertheless, the Board of Inquiry allowed the plan change. The Supreme Court considered whether this decision was correct.

The Supreme Court considered the definition of “sustainable management”  and the “controversy” concerning the word “while” and stated that the definition does not have “two distinct parts linked by the word ‘while’” but rather it should be read “as an integrated whole”. “While” means “at the same time as” and its use before subparagraphs (a) to (c) means “those paragraphs must be observed in the course of the management referred to in the opening part of the definition”. ⁴⁶¹

The Supreme Court agreed that sustainable management is “general in nature” and “its application in particular contexts will often … be uncertain and difficult”. ⁴⁶²  In that regard, the decision repeatedly emphasised that section 5 is not intended to be “the primary operative decision-making provision”. ⁴⁶³

The Supreme Court observed that the definition of “sustainable management” (specifically the use of “protection” and “avoiding”) contemplates that particular environments may need to be protected from the adverse effect of activities and “environmental protection is a core element of sustainable management”. ⁴⁶⁴  It determined that, although section 5 does not give primacy to environmental protection, a particular planning document may give primacy to environmental protection in particular circumstances. ⁴⁶⁵

On this basis, the Supreme Court seems to agree that section 5 itself does not set environmental bottom lines in the sense envisioned in 1990 but that the Resource Management Act framework as a whole provides for a hierarchy of planning instruments that may set strict environmental bottom lines. In light of that, the Supreme Court was critical of overreliance on the overall broad judgment approach applied by the Environment Court to date. The Court noted that this approach does not recognise any environmental bottom lines, creates uncertainty, and can undermine strategic planning. ⁴⁶⁶  The EDS v King Salmon decision the Supreme Court found that policies 13 and 15 of the New Zealand Coastal Policy Statement set strict environmental bottom lines.

The Supreme Court decision suggests that a new approach should be applied to planning decision-making. The focus of decision makers should be on the operative decision-making provisions. ⁴⁶⁷  In many circumstances, this will mean that the focus will be on the NZCPS, national policy statements, and/or a regional policy statement, where a relevant document exists. These policy documents may provide strict environmental bottom lines. Where provisions in higher order documents are sufficiently directive that they in effect set environmental bottom lines  (such as in policies 13 and 15 of the NZCPS) they must be complied with by decision-makers and resort back to Part 2 will only be justified where the policy documents are invalid, do not cover the field or have uncertain meaning. ⁴⁶⁸  Where planning documents do not “cover the field” clear and directive requirements may nevertheless be contained in the RMA (such as those contained in sections 6, 30 and 31).

The EDS v King Salmon decision has also had some impact on resource consent decision-making.

The EDS v King Salmon decision is also significant for its discussion of the permissible scope of policy instruments and how a decision-maker ‘gives effect to’ policy statements. This is discussed in the section on National Policy Statements.

Social, economic and cultural wellbeing

The role of local authorities under the Resource Management Act in relation to social, economic and cultural wellbeing is to enable people and communities to provide for their wellbeing. It is not for local authorities to direct how that is to be achieved or to provide for that outcome. The Resource Management Act leaves such direction to other drivers, such as the marketplace. ⁴⁶⁹

The reference to ‘economic wellbeing’ in the definition of sustainable management does not mean that the narrow considerations of the applicant’s financial wellbeing are relevant. The Courts have made it clear that these are “matters for the board room”. ⁴⁷⁰  The economic effects of a proposal are to be considered only to the extent they affect the community at large, not the expectations of individuals. ⁴⁷¹  For example, the viability of existing retail centres and their positive contribution to the social and economic wellbeing of the community is a relevant consideration. ⁴⁷²

Paragraphs (a), (b) and (c)

Paragraphs (a), (b) and (c) address environmental and inter-generational aspect of sustainable management:

a)  Sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations
b)  Safeguarding the life-supporting capacity of air, water, soil, and ecosystems
c)  Avoiding, remedying, or mitigating any adverse effects of activities on the environment.

Paragraph (a) excludes minerals from the requirement to management natural and physical resources to ensure their potential to meet the reasonably foreseeable needs of future generations. This recognises the non-renewable nature of mineral resources. However, minerals are not excluded from the scope of the RMA and the use or means of extraction of minerals is to be managed sustainably in every way except by controlling the rate at which mineral supplies are exhausted. ⁴⁷³  A scarce resource may need to be protected from present use in order to meet the reasonably foreseeable needs of future generations. The Crown Minerals Act 1991 regulates the allocation of access to minerals. Allocation is discussed in the minerals section of this website.

Paragraph (b) does not prohibit the use of air, soil, water and ecosystems. However, their “life-supporting capacity” must be “safeguarded”. This means that ecosystem health must be retained.

Paragraph (c) requires adverse effects to be avoided, remedied, or mitigated. The word “avoid” means “not allow” or “prevent the occurrence of”. ⁴⁷⁴  The reference to ‘mitigation’ contemplates that some adverse effects may be acceptable, but the extent to which those effects are acceptable is one of fact and degree. ⁴⁷⁵  While paragraph (c) does not impose a strict hierarchy, in general, an applicant should first try to avoid the adverse effects of an activity on the environment before considering potential for mitigation and then considering remediation. 

Environmental offsetting and compensation