New Zealand: Muscle beyond mussels – new Aquaculture Bill has long reach

Last Updated: 15 November 2010
Article by John Hassan

The Aquaculture Legislation Amendment Bill (the Bill) contains measures which will have reach beyond aquaculture – particularly in relation to managing allocation where there is high demand for, or high pressure on, resources.

This Brief Council examines these wider provisions and considers whether they provide a guide to the reforms which will emerge through the Government's Freshwater Strategy.

Allocation methods, including review of "first in, first served" for consent applications and enhanced use of "economic instruments", have been flagged as likely themes in the Government's Phase 2 Resource Management Act reforms. 

These are topics of interest not only to coastal occupation, but also for water where catchments face over-allocation pressures, and for the management of contamination of lakes and rivers.

It is significant, therefore, that the Bill overcomes the limitations of its name to stray into areas beyond aquaculture. 

New tools the Bill contemplates to manage competition for coastal space include:

  • allowing coastal plans to impose moratoria on applications and to require competing coastal space applications to be processed and heard together, putting an end to "first in, first served", and
  • allowing for the offer of "authorisations" - including by tender, ballot or other market mechanism - where there is anticipated competition for space.  The authorisation would confer on the successful bidder or purchaser a two-year exclusive right to apply for a consent.  These rights could be transferred or sold to another prospective applicant within the two year term.

Alongside these reforms, the Bill includes direct changes to the Tasman and Waikato regional coastal plans.  For Waikato, this includes a policy for the use of tendering to allocate the right to discharge nitrogen from fed aquaculture into the Firth of Thames. 

Hearing competing applications together

Section 165D in the Bill provides that regional coastal plans can seek to manage competition for space by:

  • specifying that no applications for coastal permits can be made before a certain date (this would not apply to authorisations, discussed below)
  • authorising the council to process and hear together applications for the same space or for different spaces that are in close proximity to each other, and
  • placing limits on the amount of space that can be allocated under a single permit and on the character, intensity or scale of activities.

The full scale of this change is not entirely clear.  The Bill does not, for example, spell out whether this will authorise applications to be compared on their merits in order to "pick the winner".  However, that would appear an obvious intention, and we may be seeing here a sign of things to come for other contexts, in particular access to water in over-allocated catchments, and pollution management. 

Authorisations

The provisions relating to authorisations are contained in sections 165E to 165Z.  Key features are:

  • once an authorisation system is in place, permits can only be allocated to the holder of the authorisation
  • authorisations are transferable by the holder to another party
  • authorisations apply for two years during which time the holder has an exclusive right to apply for a consent
  • the Minister may direct that a Council not proceed with a proposed allocation of authorisations, or proceed subject to certain conditions, in order to give effect to the government's marine coastal policy or to preserve the Crown's ability to honour its obligations to Māori
  • where the regional plan does not provide for authorisations, or where the Council does not consider that the allocative method in the plan will enable it to manage demand, the Council can seek the Minister's approval to go to public tender or to use an alternative allocation method, and
  • Councils may accept any offer in the tender process, reject all offers and/or call for new offers, or enter negotiations with an applicant.

The authorisation mechanism is not limited in the Bill and could apply to all occupation activities in the coastal marine area, not just aquaculture.  Again, too, it is easy to anticipate it as a prototype for the use of market mechanisms for other resources which are in high demand.

Tendering contaminant discharge rights?

An unusual feature of this Bill is that it would retrofit immediate changes to the Tasman and Waikato regional coastal plans.  The changes are set out in Schedules 2 and 3.  For the Waikato plan, this would include a change to its policies to refer to the use of "tendering to allocate the right to apply for the discharge of nitrogen fed aquaculture in the Firth of Thames".

Economic instruments have long been signalled as a possible alternative to regulation for the management of adverse effects under the RMA.  To some extent, they are in use in the form of "financial contribution" rules in various plans.  However, while the RMA also provides for "coastal tendering", this regime has never been used.  The Bill signals that this is about to change.

The Bill notes that a new mechanism is needed to deliver to Treaty and Māori resource access aspirations in respect of new space but does not provide any detail as to what shape this might take

Finally the Bill is another strand of what is becoming a very busy tapestry of issues in coastal policy and reform.  Other strands include the recently promulgated NZ Coastal Policy Statement 2010 and the Marine and Coastal Areas Bill now before the Māori Affairs Select Committee.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

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