The Aquaculture Legislation Amendment Bill (No. 3) (Bill) was introduced to Parliament on 9 November 2010, and follows various government announcements on the proposed changes. The Bill proposes significant changes to the current legislative regime for aquaculture in an attempt to streamline planning and consenting processes, improve investment certainty and facilitate the development of aquaculture in the coastal marine area.
By way of background, the Bill is the latest in a series of initiatives affecting the planning and management of aquaculture activities. Proposals to change the way in which aquaculture is managed were discussed as far back as 2000. A moratorium on new applications for aquaculture resource consents began in November 2001, pending the new regime. However, it was not until August 2004 that the government introduced an omnibus aquaculture Reform Bill amending five existing acts and creating two new ones. Key aspects of the 2004 reforms were: a single process for aquaculture planning and resource consents through the RMA, and a requirement that aquaculture only occur in special zoned areas known as aquaculture management areas (AMAs). However, aquaculture development stalled as a result of the 2004 reforms and in 2009 the government appointed an aquaculture Technical Advisory Group to provide independent and strategic advice on further reform of aquaculture legislation with the aim of 're-starting' aquaculture.
Broadly, the government's reforms are intended to:
- streamline planning and consenting processes;
- streamline the application and decision-making process for the 'undue adverse effects' on fishing test;
- enable the government to take a more active role in aquaculture planning;
- provide a new mechanism to deliver on the Crown's obligations relating to Maori claims to commercial aquaculture space; and
- bring existing marine farms into the new regime.
Now that the Bill has been released, the mechanisms for achieving the goals of the reforms are known. The next step is for submissions to be heard by the Primary Production Committee which is required to report back to Parliament on or before 27 April 2011. The closing date for submissions is 11 February 2011.
The key reforms and their implications are set out in this update.
Plan and application processes
A major plank of the reform legislation is to streamline consent and planning processes relating to aquaculture. Key changes proposed include:
- removing the requirement for AMAs;
- introducing a default minimum 20 year term for aquaculture resource consents;
- introducing a default lapse period of three years for aquaculture resource consents; and
- streamlining the consenting process for the continuation of an existing aquaculture activity by limiting the information applicants must provide to councils.
The government's aim is to 'normalise' aquaculture as an activity within the RMA framework. Consequently, applicants will be able to undertake aquaculture activities in any part of the coastal marine area, subject to the provisions of the relevant regional coastal plan.
However, there is still one important difference between aquaculture and other activities in the coastal marine area. The Bill proposes that no aquaculture activity may be classified as a permitted activity. The reason is that the resource consent process for aquaculture activities is now linked with the Fisheries Act requirement for the undue adverse effects on fishing (UAE) test (see below). As the Ministry of Fisheries is required to assess whether a proposed aquaculture activity will have an undue adverse effect on commercial, customary or recreational fishing, a resource consent application for aquaculture is required to trigger the process.
The government's aim is to increase investment certainty by providing a minimum 20 year term for aquaculture consents, except in limited circumstances. The main concern associated with the proposal is that the proposed minimum term will actually become the default maximum term used by consent authorities, rather than the maximum 35 year term available under the RMA.
The default short lapse period also runs counter to the aim to 'normalise' aquaculture. Although its aim may be to avoid speculative applications which tie up water space, a concern is that aquaculture proponents may be unfairly penalised by its application.
Decision making for UAE test
The Fisheries Act requires the Chief Executive of the Ministry of Fisheries to make an 'aquaculture decision' on the effect of a proposed aquaculture activity on recreational, customary or commercial fishing. That test is known as the UAE test. If the Ministry determines that there would be an undue adverse effect on commercial fishing for species within the quota management system, aquaculture can only proceed if the applicant is able to enter into an agreement with affected quota holders to compensate them for the impact of the marine farm.
The existing test is to be retained, although some changes are proposed to reduce delays and better integrate the UAE test with consent processes under the RMA by:
- ensuring that a resource consent application to undertake aquaculture activities is forwarded to the Ministry of Fisheries to make an early assessment of the information that will be required for the test;
- proposing that a time limit may be set for receipt of information relevant to a UAE assessment and requiring the Ministry of Fisheries to make a UAE decision within 20 working days of receiving a request from a Regional Council about a specific coastal permit; and
- enabling applicants to reach agreement with quota holders before a UAE test is undertaken.
It is proposed that the UAE decision will be made at the end of the consent process, after all RMA processes, including appeals, have been completed. The proposals relating to time limits for information requirements and for the UAE test itself should ensure more timely decision making. Although there is no right of appeal from the UAE decision, the decision will still be subject to judicial review in the High Court, and an application for review must be made within 15 working days of the notification of the decision.
The main issue associated with the proposal to enable applicants to reach agreements with quota holders outside the UAE process, is that aquaculture applicants may find themselves compensating quota holders, even in the absence of an undue adverse effect on fishing. Of further concern is that there is no provision anywhere in the aquaculture agreement process for an independent review of the amount of fair compensation which should be paid to quota holders, for example through some sort of independent arbitral process.
The government's role in planning for aquaculture
The Bill proposes making direct changes to the aquaculture provisions of the Waikato and Tasman regional coastal plans. The amendments are aimed at enabling a wider range of species, including fin fish, to be farmed in the regions. Proposed amendments to the Waikato regional coastal plan would also enable small extensions to existing farms.
The inclusion of the proposed amendments in the Bill means that the Councils in question do not need to follow the normal RMA plan development processes. The relevant Councils may welcome the move due to the significant cost savings involved. However, the main issue for potential applicants is the impact on public participation in the plan development process.
The Bill proposes further increasing the government's role in planning for aquaculture by:
- providing the Minister responsible for aquaculture with the power to recommend the making of regulations to amend regional coastal plans; and
- enabling the Minister of Conservation to approve the use of alternative allocation tools for managing high or competing demand for coastal space.
The Bill proposes to give the Minister of Fisheries & Aquaculture significant powers to act in respect of planning for aquaculture, although the Minister's recommendatory powers are restricted to changes which are considered to be of regional or national significance. The Ministry of Fisheries has also signalled that the Bill may incorporate changes to regional coastal plans other than the two plans already included. Again, the main issue with such proposals is the impact on public participation in the plan development process, particularly the ability to test the merits of any provisions in the Environment Court.
The proposals regarding the use of alternative allocation tools have wide-ranging implications as they will affect all applicants in the coastal marine area.
The aquaculture settlement
Under the present regime, 20% of all marine farming space created after 31 December 2004 must be provided to iwi to meet the Crown's obligations under the 1992 Fisheries Settlement. It was intended that the 20% allocation be made during the AMA approval process, effectively passing the Crown's settlement liability onto aquaculture proponents.
In the latest round of reforms, the government has signalled its intention to provide a new mechanism to deliver on the Crown's settlement obligations and to ensure that liability for water space is met by the Crown, rather than individual applicants. This is a positive step for the industry. However, there is one anomaly. The Bill currently proposes that the two interim AMAs in Waikato and Tasman, which are to be formally approved under the existing regime, will be subject to the requirements of the existing settlement allocation mechanism. This means that applicants in the two interim AMAs will be the only ones in the country to lose 20% of their water space to iwi.
The government is now engaging with iwi leaders to develop an alternative delivery mechanism, intended to be incorporated into the Bill through a Supplementary Order Paper in 2011.
The Bill includes a number of transitional measures to:
- Bring existing farms into the new regime as smoothly as possible.
- Extend the period for consent holders to apply to a Council for an off site farm review (to amend the permit to reflect the actual space being farmed).
- Provide a process for interim AMAs to become Gazetted aquaculture areas (in which applications will not be subject to a further UAE test).
- Enable decisions to be made on outstanding or 'frozen' applications.
The Bill proposes to preserve the rights of existing marine farmers. Although existing farms will no longer be 'deemed' AMAs, existing consent holders who wish to make a new resource consent application for the same activity will continue to be given priority over other applicants seeking to use that space and a UAE test will not be required where the area being farmed remains the same.
The Bill will also enable the processing of outstanding applications, including those 'frozen' under the current regime. The government's intention is to allow processing the applications to proceed on commencement of the new regime which is likely to be in mid 2011.
The two interim AMAs in Tasman and Waikato which are a significant way through the approval process under the current regime will be completed under the current law and, on completion, will be declared to be 'Gazetted aquaculture areas' where aquaculture can be undertaken.
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