New Zealand Law Society

SUBMISSION ON THE AQUACULTURE REFORM BILL

 

INTRODUCTION

There are some issues of general importance upon which the Society comments.

The balance of this submission focuses on technical aspects of the Bill.

The Society wishes to appear before the Select Committee in support of this submission.


NATURE OF THE BILL

It is a complex piece of legislation. The complexity is compounded by the need to integrate the Bill with other legislation. Very limited time has been afforded for analysis and comment.

There is accordingly a real risk the Bill will have unforeseen consequences. While that might provide a fertile source of revenue for the legal profession, costs will be imposed on the balance of the community.


SCOPE OF THE BILL

The Bill is headed Aquaculture Reform Bill.

The general policy statement reads:

"The purpose of the Bill is to enable the sustainable growth of aquaculture and ensure the cumulative environmental effects are properly managed while not undermining the fisheries regime or Treaty of Waitangi settlements"

Clause 3 states the purpose of the Act.

The purpose statement relates almost entirely to aquaculture.

In fact, the Bill in its present form goes much further and contains significant changes to the Resource Management Act provisions governing coastal occupation generally, not just for aquaculture activities.

For example Sections 165F, 165H and 165K, enable Regional Councils to allocate coastal space, through Regional Coastal Plans, by a system of authorisations, as opposed to the current "first in, first served" basis.

The Society is concerned, that the intituling of the Bill, the introductory material, the purpose statement, and publicity concerning the Bill, all of which focus on aquaculture, have not alerted stakeholders, nor the public generally, to broader changes in the RMA regime of coastal occupation.

Because significant changes have not been adequately publicised, neither this Committee, nor Parliament, will have the benefit of the full range of views of affected persons, or the public generally. Should not these wider, non-aquaculture provisions be inserted into the forthcoming RMA Amendment Bill instead?

 


CLAUSE BY CLAUSE ANALYSIS

Clause 5(3) definition of "occupy".

This definition is identical to that in Section 12(4) RMA, except that the last line :

"…and "occupation" has a corresponding meaning."

has been omitted from the definition. It is suggested that there is no reason to omit this line as it would assist the administration of the Act if the two definitions were identical, and the word "occupation" is used in the Bill, (see for example the new Section 12A(2) inserted by Clause 7).


Recommendation

Addition of the last line of the definition in Section 12(4) RMA to the definition of "occupy" in the Bill, ie "and "occupation" has a corresponding meaning"


Clause 7, new Section 12A

The new provision will limit aquacultural activities to aquacultural management areas and restrict non aquacultural activities in aquacultural management areas.

The new Section 12A(3), in its present form, states:

"An activity that is not an aquacultural activity is prohibited in an aquacultural management area except …"

The word "prohibited" suggests that such activities are prohibited activities for which no resource consent can be granted.

However, it is clear that a resource consent may be granted to a non aquacultural activity as either a restricted or full discretionary activity or a non complying activity: 12A(2) and, by virtue of the qualification in 12A(3) itself:

"Except to the extent that the activity is compatible with aquaculture activities"

New section 12A(3) could be better expressed.

The potentially misleading word "prohibited" should be removed.


Recommendation

Amend new section 12A(3) to read:

"A consent authority must not grant a resource consent to any activity under subsection (2), except to the extent that the activity is compatible with aquaculture activities".


Clause 21, Section 165A interpretation, definition of "available space".

In the definition of "available space" , Clause (a)(iv) the wording should be

"an application for a Coastal Permit to occupy space in a Coastal Marine Area for aquaculture activities; or"


Recommendation

Addition of the phrase "space in".


Section 165A, definition of "available space"

Clause (b) of the definition of "available space" should be removed because it refers to the definition of "actual space" in Clause 159(12), which in turn refers to "the space in relation to which the deemed coastal permit is being exercised" (emphasis added), whilst the definition of "available space" in (b) refers to an application being determined. There is a large time lag between the definition of "actual space" where the permit is being exercised, and the exclusion in the definition of "available space" which talks about "actual space" being "determined". This leads to some confusion as to when the definition of "available space" in Clause (b) applies, because it implies actual space can be considered once the application is determined, whereas the definition of actual space makes it clear it only applies when the Coastal Permit is being exercised. "Available space" should be "space" that is not authorised for use for aquacultural activities, whether in fact used or not. Aquaculture facilities are often established in stages.


Recommendation

Omit paragraph (b).


Clause 21, new Section 165B

This clause enables a consent authority to, among other things:

"(b) Specify the maximum term of the coastal permit in respect of which an authorisation may be granted.

(c) Specify criteria applicable to the allocation of authorisation".

Nothing in the new Section 165B:


Recommendation

Include provisions directing how the consent authorities are to develop the policies authorised by paragraphs (b) and (c) and state the manner in which the consent authority must specify its decisions on the matters set out in paragraphs (b) and (c).


Section 165C(3).

This subsection states the matters to which a Regional Council must have regard before including aquaculture management areas in a Regional Coastal Plan.


Recommendation

For the avoidance of doubt, subsection (3) should be subject to Part II of the RMA.


Section 165C(5).

This proposed section specifies that a Regional Coastal Plan or Proposed Regional Coastal Plan that provides for Aquaculture Management Areas must be prepared in the manner set out in Schedule 1A. However the Proposed Tasman Resource Management Plan, has provided for Aquaculture Management Areas, through a long drawn out Environment Court process running for over four years. Those provisions have not been prepared in the manner set out in Schedule 1A, yet there is no saving provision for that Plan. Subsection (4) specifies that subsections (2) and (3) do not apply to a Proposed Regional Coastal Plan notified before 26 March 2002, but Section 165C(5) has no such clause. The result is that plans currently under development, such as Tasman, which have not provided for aquaculture in the manner referred by Schedule 1A, will lapse.


Recommendation

Include a savings and transitional process for proposed plans that provide for aquaculture and are currently being developed and finalised through First Schedule processes.


Section 165J(3)

This subsection specifies that no person may apply for or be granted a Coastal Permit in an AMA except a person identified by the Chief Executive as the holder of an aquaculture agreement. The Bill does not address whether this subsection applies to successors, or whether it is anticipated that aquaculture agreements can be transferred to other persons or individuals.

The Bill does make it clear by Section 165M that an authorisation is transferable. If an authorisation is intended to be transferable, there seems to be no reason why an aquaculture agreement could not also be equally transferable, merely requiring written notice to the Chief Executive of the Ministry of Fisheries that the transfer has occurred (identical to Section 165M with regard to authorisations being transferable).


Recommendation

Make it clear whether or not an aquaculture agreement can be transferred.


Clause 21, new Section 165O(1)(a)

This provision enables an Order in Council to be made directing a Regional Council not to proceed with "a proposed allocation of space in a coastal marine area".

Subsection (1)(b) also uses the phrase "proposed allocation of space".

More accurately, the phrase should be "offer of authorisations" for available space.


Recommendation

Amend 165O(1)(a) and (b) by replacing "proposed allocation of space" with "offer of authorisations for available space".


Section 165O(2)(a)

This provision enables the Minister of Conservation to recommend an Order in Council "to give effect to Government policy in the coastal marine area".

This is a very broad power.

It enables the Minister, through an Order in Council, to cut across provisions of a Regional Coastal Plan.

The width of the power is unacceptable.

There is no accountability for the exercise of the power, and such Orders in Council are not subject to the Regulations Disallowance Act.


Recommendation

Delete Section 165O(2)(a).


Section 165O(3)

Subparagraph (b) specifies that the Minister of Conservation can set the maximum term of a coastal permit available for allocation. However section 165L(2) states that a coastal permit must not be granted for a period greater than the period specified in an authorisation. Hence, the addition of another subparagraph in Section 165O(3) referring to "the maximum term of an authorisation" would ensure that the Regional Council is given direction on both authorisations and coastal permits. This is particularly important where the term of an authorisation set by a Regional Council can effectively override any maximum term of a coastal permit which the Minister may set under Section 165O.


Recommendation

Amend section 165O(3) by adding a new paragraph providing that the Minister may include the maximum term of an authorisation. Consequential amendments would then need to be made to Section 165O(5).


Section 165O(4)

This subsection enables an Order in Council to specify the allocation method to be used. The Order in Council may be made before the proposed plan is notified, or before the proposed plan is finally approved.

As the Order in Council can be made at any time up to the Minister’s final approval of the Regional Coastal Plan, paragraph (a) is redundant.

It would be best practice for the direction to the Regional Council of the allocation method to be given before the plan is publicly notified.

That would enable persons affected an opportunity of making representations to the Minister on the method, before the plan became operative.


Recommendation

Delete paragraph (b) of Section 165O(4).


Section 165O(6)

This subsection has in all material respects a similar function to Section 165G.

As such, it warrants being a section. It is also out of sequence in its present position.


Recommendation

That subsection (6) be a separate section, following immediately after Section 165N.


Section 165P

If Section 165O(3) is amended by adding a reference to the maximum term of an authorisation, the corresponding amendment should be made to Section 165P(1) after subparagraph (c).


Recommendation

Add a new subparagraph in between Section 165P(1)(c) and (d) stating "specify the maximum term of the authorisation; and"


Section 165P(1)(g)

This provision states that a notice of authorisation must specify the criteria the Regional Council will apply in selecting the successful offer.

The Bill contains no guidelines for criteria.

The Bill itself does not require the criteria to be included in the Regional Coastal Plan.

It does not prescribe how the Regional Council is to develop such criteria.


Recommendation

The criteria which the Regional Council will apply shall be in the Regional Coastal Plan.

Section 165H should make it quite clear that the method, if not public tender, must be identified in the Plan, and that the criteria for the processes to be followed by the Regional Council must also be specified in the Regional Coastal Plan.

In that way, the method and its implementation will be developed through the public processes required by the First Schedule of the RMA.


Section 165U(3)

If an authorisation has lapsed and a successful tenderer has not obtained a resource consent, the subsection specifies the Regional Council must refund the remuneration to the tenderer. It is unclear from the wording of this subsection whether this is the entire amount, or solely the 50% of the remuneration which the Regional Council holds.


Recommendation

Clarify whether the Regional Council is refunding the full remuneration to the tenderer or only 50% of that remuneration.


New Section 165Y

This section authorises the Regional Council to seek a plan change which is to establish new aquaculture management areas.

There are three deficiencies in this provision:


Recommendation

Amend Section 165Y(2)(A) and make it subject to 165X. Include criteria for a Regional Council to apply in determining whether to accept any plan change proposal. Specify the procedures which the Regional Council must follow.


Section 165ZA – Private Requests for Plan Changes to establish AMA’s

Subsection (3) states that if a Plan Change proposal is accepted from more than one person for the same space only one request for a Plan Change may be made on behalf of those persons. This would seem to be a contradiction, as there are two Plan Change proposals being accepted yet only one request may be made. Subsection 165Y(3) makes it clear that the Council can accept more than one Plan Change proposal if the proposals relate to separate spaces. It seems that a Council may not accept more than one Plan Change proposal if the proposals relate to the same space.


Recommendation

Clarify sections 165Y(3) and 165ZA(3) as to whether a Council can accept more than one Plan Change proposal for the same space, and if so how that would work in reality (does the Council amalgamate any 2 or more requests?)


New Sections 165 ZC-ZF

These provisions give priority to existing consent holders to plan new consents on expiry.


Recommendation

Because of the significant investment involved, these provisions are supported.


Section 165 ZD(1)(b)(i)

The cross-reference here should be to subsection (2), not to subsection (3) (which does not exist).


Recommendation

Amend the reference to subsection (3) to refer to subsection (2).


PART 9A - AQUACULTURE, INSERTED BY CLAUSE 41

Section 186D request for Aquaculture Decision

Subsection 2 refers to a Regional Council consulting persons and organisations that it considers "represents the classes of persons who have customary, commercial or recreational fishing interests in the Coastal Marine Area concerned". This is essentially an undefined class of interest and is an onerous obligation in regard to consultation. It is potentially unworkable. In addition, it would seem to be unnecessary because, before making an aquaculture decision, the Chief Executive is himself/herself required to consult exactly the same classes of persons, pursuant to Section 186E(3). The procedure in Sections 186D and 186 E would therefore seem to be circular and duplicative.

In addition to the above comments, subsection (2) requires that the Council must consider any submissions made by the Chief Executive and those persons and organisations consulted. This does not give any right of submission to the applicants or potential applicants for authorisations for a proposed AMA. Nor does it set out any submission process or provide any transparency as to how the Regional Council is to take matters into consideration before making a request for an aquaculture decision.


Recommendation

Removal of Section 186D(2)(a)(ii); and specification of the submission process which the Regional Council is required to follow in addition to any consultation which it is undertaking.

 
Section 186E – Chief Executive to make Aquaculture Decision

Subparagraph 2 states that a Chief Executive must decline a request if he/she considers the Regional Council has not complied with Section 186D(2). However, that is circular, in that the Chief Executive is undertaking the same consultation under Section 186E(3) and is himself/herself being consulted under Section 186D(2)(a)(i) and making a submission under Section 186D(2)(b). Therefore, it is hard to see why Section 186E(2) is required at all.

The procedure set out under Sections 186D and 186E at present requires a complete repeat of the activities undertaken by the Regional Council, which seem an unnecessary step. If the decision is ultimately to be made by the Chief Executive as set out in Section 186E, it would seem unnecessary for the Regional Council to undertake the duties which the Chief Executive is undertaking under Section 186E. Conversely, if the Chief Executive is making the decision based on the case put forward by the Regional Council, then it is a review of material not a repeat of the enquiries undertaken by the Regional Councils.


Recommendation

Deletion of Section 186E(2) and (3).


Section 186G – Matters to be considered before Aquaculture Decision made.

The explanatory note to the Bill on page 29 states that the reform will maintain the protections of the existing Fisheries Management System. It also states that it will enable a change in use where the new use has a higher value than the existing fishery, and that the new proposed regimes ensure coastal space is allocated to its economically highest value use over time. However, the criteria set out in Section 186G do not achieve those aims as they are all fisheries matters. There is no balancing required under this these matters, such as to oblige the Chief Executive to consider other effects such as :

 Experience is that, notwithstanding provisions such as paragraph (g), the Chief Executive will have regard to fisheries matters to the exclusion of any other consideration unless the Act specifically requires other matters to be taken into account.


Recommendation

Explain criteria.


Section 186H – Requirements for Aquaculture Decision

The ability of a Rule to be "frozen" due to an aquaculture decision under Section 186H(1)(d)(ii) is against the public process envisaged for Plan Changes in the Resource Management Act, and against the inherent control of Regional Councils over their own Plans. It is possible with the way the subparagraph is drafted at present that a Rule will be frozen when it may well need to be changed for reasons which arise subsequent to the particular Aquaculture Decision which "froze" the Rule. There is no power specified in the Bill to overcome this aspect and in effect it removes the power of the Environment Court and/or the Council to amend the Rule.


Recommendation

Remove section 186H(1)(d); or include provisions providing for review, revocation and amendment of aquaculture decisions.


New Section 186I

This section will place a limitation period of three months on judicial review proceedings for an aquacultural decision.

Three months is an extremely short period of time.

Generally, rights of judicial review are not limited by time, but the Court has a discretion to decline relief, even though the grounds for review are established, because of delay.


Recommendation

As this is a serious restriction on access to the Courts, delete clause 186I.


New Section 186P

This provision enables the Chief Executive to grant exemptions from restrictions on fish farming.

The Chief Executive has an unfettered discretion. No criteria are specified. This is unsatisfactory.


Recommendation

Insert criteria which control the way in which the Chief Executive exercises his or her discretion to grant an exemption.


Section 186R – Decision on Application

Subsection 3 provides the Chief Executive with the power to decline an application to register a fish farmer if "any other person who is likely to be involved in the operations of the fish farm has been convicted of an offence involving fish, aquatic life, or seaweed". This is an extremely broad ambit, with issues relating to company ownership (refer subsection (4) also) and employee accountability. There is no right of appeal of a decline of an application to register a fish farmer. Given that there is no right of appeal, it would seem appropriate to limit the decline of an application to where solely the applicant has been convicted of an offence involving fish, aquatic life, or seaweed, rather than extending the grounds of refusal to include those who are likely to be involved in the operations of a fish farm.

It would also seem unnecessary given that the Chief Executive has specific powers under Section 186R(4) and (5) to impose conditions to ensure that the requirements of the Act are complied with, and specifically in relation to the involvement in the operations of the fish farm of any person convicted of a fisheries offence.


Recommendation

Remove in Section 186R(3)(a) and (b) the phrase "or any other person who is likely to be involved in the operation/s of the fish farm" and delete subparagraph (c).


Section 186R(6)

The Chief Executive by notice in writing to a fish farmer can amend, add to or revoke any condition of the fish farmer’s registration.

No procedure is specified. Three is no right of appeal or review.

Fairness requires that a fish farmer should be given notice of any intended change and have an opportunity of being heard before the Chief Executive in relation to changes of conditions.


Recommendation

Include procedural safeguards.


Section 186ZB

The term "aquaculture agreement" is not helpfully defined. It is unclear in this provision, and others, exactly what an aquaculture agreement must contain and the purpose it serves.


Recommendation

Include a concise statement of the nature and effect of an aquaculture agreement.


Section 186ZD

An aquaculture agreement must contain the consent of "every person" specified in Section 186ZD(2). This includes "every registered quota owner of stocks". However, if the Chief Executive makes a reservation under Section 186H(2)(d) that reservation is stock and area limited. There is no recognition in Section 186ZD that the reservation is area limited and this need to be carried through.

The concern with Section 186ZD is that it is unworkable. For example, the number of quota owners in a Fisheries Management Area is at least 300 (with one significant exception), with a maximum of 591 quota owners in Fisheries Management Area 1. Although not all quota owners in an area will hold quota for a particular stock, the likelihood of obtaining literally hundreds of consents is nil. The process set out in Section 186ZD seems to be unworkable and unwieldy. There is no provision for an arbitration process or even a majority decision. In contrast, the Bill already contains a significant mediation provision (albeit in relation to the Maori Land Court) set out on pages 80-82 of the Bill (Section 26G – 26K). These provide a model which could be followed to ensure that a workable method of obtaining quota holder consent is established.

Under Section 186ZD(4) the timeframe in which persons whose consent is identified is set is specified under Section 165G. A Regional Council gives the Chief Executive not less than six months notice of an offer of authorisations. A minimum of six months notice again makes the process unworkable, because quota changes hands regularly, and therefore a minimum of six months notice essentially requires anyone seeking an aquaculture agreement to seek the consent of persons no longer interested or involved in the industry and with no authority to give consent.


Recommendation


Section 186ZE – Lodging Aquaculture Agreements with Chief Executive for Registration.

This section has no provision for transfer of aquaculture agreements and notification to the Chief Executive of the transferral, along the lines of Section 165M, Transfer of Authorisations.


Recommendation

An equivalent to Section 165M inserted as a subsection of Section 186ZE.


Section 186ZH – Chief Executive must notify Regional Council of certain matters.

If aquaculture agreements are to be transferable then a new subsection needs to be added to section 186ZH(2) with a new subsection requiring that the Chief Executive notifies the Regional Council concerned of any transfer of a registered aquaculture agreement.


Recommendation

Insertion of a new Section 186ZH(2)(e), "the transfer of an aquaculture agreement in the name of the new holder of the aquaculture agreement as registered by the Chief Executive".


Clause 43, New Section 192A(2)

The Chief Executive is authorised to grant exemptions. No criteria is specified. The Chief Executive’s discretion appears unlimited.


Recommendation

Include criteria which control the way in which the Chief Executive can exercise his or her discretion.


MAORI COMMERCIAL AQUACULTURE CLAIMS SETTLEMENT

Clause 63(9)

An application made prior to the Moratorium but not notified, and thus covered by Section 150B(2) Resource Management Act 1991, is cancelled pursuant to Clause 63(9), to the extent that the space to which it applies is the subject of an authorisation to be allocated to Iwi.


Recommendation

Note that applicants, who have incurred costs in preparing and lodging applications, are not compensated for being out of pocket if the legislation has deprived them of the ability to prosecute their applications to a conclusion.


Clause 69

This is an unusual clause.

Clause 69 specifies that if a Coastal Permit expires, lapses or is cancelled, the holder of the Coastal Permit is to be treated as if holding an authorisation allocated under Section 63 in relation to the space that was subject to the Coastal Permit. This essentially takes the consent out of the Resource Management Act regime and removes the power of a Regional Council to cancel a consent (for example). It would seem to treat Iwi differently from other consent holders who are required to undertake works to ensure that the consent does not lapse, and to comply with conditions of consent so that a Coastal Permit is not cancelled pursuant to the relevant provision in the Resource Management Act. It is unclear why Clause 69 exists.


AQUACULTURE Reform (Repeals And Transitional Provisions)

Clause 123An application to extend the period of a lease or licence which has been made but not granted before the commencement of Part 7 is cancelled.


Recommendation

Note no compensation is payable for the statutory removal of the right of the lessee or licensee to renew a lease or licence granted under the Marine Farming Act.


Clause 143 – Interim Aquaculture Management Areas Declared by Order in Council

Existing provisions for aquaculture need to be carried forward. The problem in not doing so is highlighted by the Tasman District’s experience.

Although the clause provides an ability to declare a portion of a Coastal Marine Area to be an Interim Aquaculture Management Area, the clause does not address the situation in the Tasman/Golden Bay areas where Aquaculture Management Areas have been set by a series of Environment Court decisions, and the Aquaculture Chapter in the Proposed Tasman Resource Management Plan is almost complete, in that it has not yet received a final report and recommendation of the Environment Court to the Minister of Conservation, and thus has not yet received the Minister’s sign off.

It is potentially unclear as to whether the Proposed Tasman Resource Management Plan would come within Clause 143 of the Bill, because the Regional Coastal Plan notified under Clause 5 of the First Schedule of the Principal Act was notified in 1996, and has undergone significant change through the Court process. Thus, the Interim Aquaculture Management Areas which would be identified from the Plan as notified are quite different from the specific and limited Aquaculture Management Areas now identified by the Court. Therefore as a transitional provision Clause 143 is not seen as a savings provision for the almost 20 weeks of hearing time which have resulted in the Plan in its present form.


Recommendation

Ensure existing provisions in plans and proposed plans for aquaculture are preserved by transitional and savings provisions.


Clause 145 – Chief executive to make Aquaculture Decision

Clause 145 specifies a procedure for making an aquaculture decision, but there is no appeal right from that decision. Nor does the process specified in Clause 145 allow for a submission or representations from those seeking to establish aquaculture activities in the area to which the aquaculture decision relates.

In addition to the above, the concerns expressed in relation to Section 186D(2) are repeated here, because again there are undefined classes of interest which represent potentially an onerous obligation to consult, this time placed on the Chief Executive rather than the Regional Council.


Recommendation


Clause 148 – Requirement for Aquaculture Decision

The submission made in Clause 186H above is repeated in respect of Clause 148(1)(d).


Clause 153 – Pending applications when moratorium ends on close of 31 December 2004

This clause requires a consent authority to resume processing applications, but only if the application relates to a Regional Coastal Plan. By definition, a Regional Coastal Plan must be an Operative Regional Coastal Plan, and therefore if there is a Proposed Regional Coastal Plan, that is not to be considered. This creates the potential situation of Clause 152 covering applications made pre-moratorium, and where the moratorium ends before the 31st December 2004, and Clause 153 covering applications made pre-moratorium where the moratorium ends on the close of 31 December 2004, but the key difference between the two clauses is that while Clause 152 requires an application to be processed and determined under both the rules in the Regional Coastal Plan and the rules in any Proposed Regional Coastal Plan, Clause 153 is much more circumscribed, referring only to the rules in the operative Regional Coastal Plan. In the Tasman area this will mean that, should the moratorium not be uplifted before 31 December 2004 the work that has been undertaken on the Proposed Regional Coastal Plan must not be considered by a Regional Council when it considers all of the applications made pre-moratorium which it has not yet notified. Potentially, four years of Environment Court hearings and negotiations subsequent to those hearings will have been a waste of time.


Recommendation

Add the phrase "and in any proposed Regional Coastal Plan" in Clause 153 where a Regional Coastal Plan is referred to.


Schedule 2 - Consequential Amendments To Fisheries (Cost Recovery Levies For Fisheries Services) Order 2004

The heading to this Schedule refers to the levies as being cost recovery. However, Part 3 of this Schedule, which revokes and substitutes the existing Part 3 Aquaculture Levies for Fisheries Services, sets an annual levy of $36.30 plus GST per hectare or part hectare of any area covered by a permit. For larger farms (covering hundreds or thousands of hectares) it is unclear how the annual levy per hectare could be a cost recovery.


Recommendation

Reconsider of whether the levy set per hectare is in fact necessary as a cost recovery mechanism.

 

Alan Ritchie

Executive Director

1 October 2004