Phil O'Reilly: Take resource act back to its basics

Government's use of the environment law has taken it far beyond its original purpose, says Phil O'Reilly

The Resource Management Act has had so many amendments it could now cover everything from letterbox design to where your lounge is situated in your house. Photo / Doug Sherring
The Resource Management Act has had so many amendments it could now cover everything from letterbox design to where your lounge is situated in your house. Photo / Doug Sherring

In the coming weeks, the Government will be making its decision on the future of the Resource Management Act. This will be the act's 21st amendment, and going by the amount of misunderstanding and disagreement surrounding it, now seems a good time to step back and look at what it's really trying to achieve and why.

The act was introduced in 1991 to cover the use, management and protection of the environment where it is in the public interest to be regulated. It has never been only about the protection of the environment - and it is this misunderstanding that lies at the heart of the problem.

There has also been a blurring of what lies in the public interest and what is private.

It is not uncommon to hear businesses complain that the act has become a bureaucratic and costly nightmare that hinders economic development. Some see these complaints as evidence that the act is working, with consents being declined or heavily qualified to adequately protect the environment.

This perspective proves how much ignorance exists about the purpose of the act. It is meant to help manage and sustain the environment in harmony with economic development.

New Zealand needs businesses and the environment to prosper for us to have a future.
Over the years, and 20 amendments later, the act has grown to the point where it could cover everything from the colour of letterboxes to whether your lounge is in the front of your house. Its scope is out of control.

The way it was meant to work was that the Government was to determine environmental priorities in areas such as water and air quality, within the public interest, to be covered by the act.

Everything else was to stay outside of the act's legislative reach, to be dealt with by people on a day-to-day basis.

The expectation was that in some cases, private arrangements - neighbours negotiating over the exercise of their property rights - would be relied upon to ensure that optimal environmental outcomes were reached.

But instead, the act has become an all-encompassing tool to extend the ambit of government regulation of private arrangements in the name of the public interest. Its implementation has become almost completely disconnected from its legislative origins.

But governments have found it hard to draw this distinction, especially when trying to fix a national bottom line for things such as water and air quality or noise standards. So implementation of the act was handed over to local authorities and courts to decide what was captured under the act and what wasn't.

But the act wasn't designed for this and contains no real disciplines on local authorities to justify their decisions, including those which infringe property owners' rights.

The progressive blurring of the boundary between the public and private interest is central to the business community's dissatisfaction with the act. This blurring, and the seemingly free-wielding application of the act, undermine business confidence and dampen the desire to invest.

The fact that 95 per cent of consent applications are approved doesn't show its success. It shows that for most people, going through the consent process is unnecessary bureaucracy.

It creates a drag on economic activity, making people jump through hoops that should not be required.

With a review in progress, now is the time for the Government to try to re-establish what needs to be sustainably managed in the public interest, and what should not.

Core to this must be respect for private property rights. While an effects-based act will to some extent diminish property rights, any such diminution needs to be undertaken within a coherent and robust framework.

It is encouraging to see a reference to property rights in the Government's consultation document. This is a step in the right direction.

For this next amendment to deliver on this, it needs to presume that property owners can use their own property as they see fit. An exception to this rule would be when this use is proven to be harmful to the environment, and therefore would need to be regulated in the interests of the wider public.

If this change were made, combined with a new consideration of compensation for the taking of private property rights and improved consideration of costs and benefits, the incentive for business to invest would be improved.

As well as this economic benefit, these changes would help facilitate mutually beneficial outcomes for property rights holders and local communities in the sustainable management of the environment, and move us beyond the arid debate of the economy versus the environment.

Phil O'Reilly is chief executive of Business New Zealand.

Dialogue: Contributions are welcome and should be 600-800 words. Send your submission to Text may be edited and used in digital formats as well as on paper.

- NZ Herald

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