By: Kirstie Wyss
Published: 27/04/2017

1.      This decision of the Environment Court concerns an application for various declarations made by Wellington Fish and Game Council (Fish and Game) and the Environmental Defence Society Inc (EDS) that the Manawatu-Wanganui Regional Council (MWRC) has been failing to correctly implement the Manawatu-Wanganui Regional Plan (One Plan).[1] 
2.       The declarations ultimately made by the Environment Court provide a timely reminder about the obligations on and the legal requirements for consent authorities when considering applications for resource consents, particularly for restricted discretionary activities.  It also reinforces the importance of managing within freshwater limits, despite the sometimes difficult nature of this task.  A broad overview of the decision is set out below.  The declarations made by the Court are set out in Appendix A.
3.       The Applicants sought declarations that the provisions relating to restricted discretionary activities under Rules 14.2 and 14.4 of the One Plan had not been properly applied, and that various provisions of the National Policy Statement for Freshwater Management (NPSFM) and the RMA had not been properly considered in respect of applications for restricted discretionary activities. 
4.       Rules 14.2 and 14.4 of the One Plan provide for specified existing intensive farming activities and new intensive farming activities, respectively, as restricted discretionary activities (covering both the use of land and particular associated discharges, e.g. fertiliser).
5.       The One Plan contains a table of "cumulative nitrogen leaching maximum values" (being the total kilograms of nitrogen leached per hectare per year for the total area of a farm), which were calculated using OVERSEER version 5.4.  Existing intensive farming activities that meet these leaching limits can obtain consent as a controlled activity (subject to compliance with other conditions).  Non-compliance with the limits, or new intensive farming activities, requires resource consent as a restricted discretionary activity under Rules 14.2 and 14.4.  A key issue at the hearing was what was required and allowed in terms of the law in assessing the restricted discretionary activity applications. 
6.       The release of a new version of OVERSEER (version 6) significantly changed the estimates of nitrogen loss to water and also meant that more farmers required a restricted discretionary activity consent.  One of the matters of discretion under Rule 14.2 and 14.4 is "the extent of non-compliance with the cumulative nitrogen leaching maximum specified in Table 14.2".
7.       Under both Rule 14.2 and 14.4, another matter of discretion was the "preparation and compliance with a Nutrient Management Plan for the land".  The One Plan defines the Nutrient Management Plan, including the methodology as to how it is prepared and what it is to contain.
8.       MWRC had a practice of granting resource consents under Rules 14.2 and 14.4 with a condition or an advice note allowing for adjustments to the leaching limits to be made, as follows:
a.       When granting resource consents, there is a condition requiring compliance with a Sustainable Milk Plan (SMP).
b.       The SMP is included with the consent at the time consent is granted.
c.       There is an advice note in the SMP making it clear the SMP will be updated to reflect new versions of OVERSEER.
d.       Council officers carry out that exercise in accordance with that advice note.
9.       MWRC rely on a consent condition and the note embedded in the SMP itself to carry out updates to the SMP based on the latest version of OVERSEER.  However, the SMP itself was different to the requirements of a Nutrient Management Plan required under the One Plan provisions.
10.     MWRC had also adopted a resolution that purported to confirm the resource consent process for nutrient management activities, including a statement that for restricted discretionary activities a consent term of 15-20 years "will be given" where an existing intensive farming activity met specified criteria (e.g. the farm operating system is economically and environmentally efficient and no low cost options are available).  MWRC had been relying on the resolution when making decisions on resource consents, including using the resolution as justification to effectively circumvent the policy framework and grant resource consents that did not comply with the nutrient limits set out in the One Plan (no application for such activities had been declined by the MWRC). 
11.     In respect of the resolution, MWRC revoked the resolution before the Court could determine the issue.  However, the Court considered that the issue was sufficiently important to issue a more general declaration.  The Court considered that it was unlawful, invalid and a contravention of the RMA to have regard to the factors set out in the resolution.  The Court also noted that it would not have agreed that the resolution would have been able to be considered as an "other matter" under section 104 of the RMA. 
12.     The Court also issued a declaration in respect of the Council's duties when considering an application for a restricted discretionary activity.  Although the declaration ultimately turns on the particular matters to which MWRC's discretion was restricted under Rule 14.2 and 14.4 of the One Plan, there are some general principles that can be taken from the declaration, as follows:
a.       It is important that councils have regard to all the matters over which discretion is restricted in the relevant rule/s.
b.       For matters to which its discretion has been restricted, councils must consider the actual and potential effects on the environment, which in accordance with the definition of "effects" in section 3 of the RMA, includes both positive and adverse effects, effects that are past, present and future, and also any cumulative effect which arises over time or in combination with other effects. 
c.       Sections 104 and 104C provide that the provisions of higher order documents, including the National Environmental Standard for Drinking Water, the NPSFM, the regional policy statement (and any proposed regional policy statement) are relevant and require consideration on an application for resource consent for a restricted discretionary activity, insofar as the provisions relate to matters over which discretion has been restricted (and subject to the provisos in King Salmon[2]).
d.       Section 105 adds to the matters in section 104(1) which the consent authority must have regard to when considering applications for a discharge permit, again to the extent that it is relevant.
13.     The Court also found that there were deficiencies in many of the applications for resource consent, including in MWRC's template application forms.  The Court considered that an application for resource consent must contain an assessment of the environmental effects that meets the requirements of Schedule 4 of the RMA, along with an assessment against the objectives and policies of the relevant regional plan, and an assessment against section 105 of the RMA (insofar as it is relevant).  However, the applicant does not have an obligation to include an assessment against section 107, which is instead an obligation imposed on councils. 
14.     The Court concluded that it was not acceptable for MWRC to "fill the gap" by resorting to requesting further information under section 92 of the RMA for fundamental elements of a consent application, such as those matters that should be addressed in an AEE.  The Court noted that guidance material prepared by the MWRC (including template application forms, supporting information) should be accurate and complete, as applicants, their advisors and council officers, processing consent applications, often rely on such material. 
15.     There was also evidence before the Court that many of the consents granted by MWRC were unclear as to the extent of the activities authorised by the consent, particularly in respect of ancillary discharges.  Many of the resource consents also included advice notes purporting to fetter enforcement action that can be taken by the Council in respect of farming practices, or specifying that annual records showing compliance with Nutrient Management Plans will only be required if there are discrepancies with the Nutrient Budget. 
16.     In respect of the resource consents granted by MWRC, the Court considered that:
a.       A resource consent should adequately define the ambit and scope of the activity authorised, including to explicitly specify which discharges of contaminants are authorised under the consent.
b.       Advice notes or consent conditions purporting to fetter enforcement are unlawful under the RMA.
c.       Advice notes are also an unsuitable approach to dealing with nutrient budgets and are uncertain in nature and effect and likely to present compliance and enforcement problems.

17.     The Court also considered that discharges associated with intensive farming activities under Rules 14.2 and 14.4 did not extend to the diffuse excretion of effluent onto pasture by farm animals.  However, this was due to the specific discharges listed in those rules.  The Court noted that discharges under section 15(1) require a resource consent unless the discharge is expressly allowed.  It seems that the Court is suggesting that diffuse discharges from animals are regulated by the RMA, without conclusively deciding the point.  As this issue remains unsettled, and has plagued regional councils, industry and environmental groups alike, there is likely to be further litigation on this point in the future.
18.     The Court was also critical of MWRC's practice of including nitrogen leaching limits in the SMP, instead of in a condition of consent and including advice notes (or conditions) allowing for the nitrogen leaching limit to be updated by the Regulatory Manager at any time and by an undefined methodology.  The Court also considered that in respect of the SMP: 
a.       Although a management plan can provide information as to how the parameters can and will be met, it is inappropriate for the parameters themselves to be left to the management plan. 
b.       The consent (through conditions) must set the maximum leaching allowed on the face of the consent document - it is inappropriate to leave that matter to a management plan.  The maximum nitrogen leaching (over time) is a fundamental parameter and as such it should be imposed on the face of the consent, and not left to a management plan. 
c.       It is acceptable for a management plan to be used to set out how the maximum leaching allowance is to be achieved, but if this approach is taken the management plan used should be that provided for in the One Plan in the definition of the Nutrient Management Plan. 
19.     The Court also considered that the wording of either the conditions or any advice note should not imply that the nitrogen leaching limit could be updated for any purpose and by an undefined methodology.  This would result in leaving a key decision to a later date and allow for the delegation of the Council's decision making powers (offending against the legal principles for valid consent conditions).  The Court noted that updating the leaching limits on an ad hoc basis under individual consents may have significant implications, across a catchment, in terms of the cumulative effects on water quality and allocation between consent holders.

[1] Wynn Williams acted as instructing solicitors for DairyNZ Ltd in respect of this decision.
[2] Environmental Defence Society v NZ King Salmon Ltd [2014] NZSC 38, [2014] 1 NZLR 593, as applied in R J Davidson Family Trust v Marlborough District Council [2017] NZHC 52.  Following King Salmon, there is only a need to separately refer back to Part 2 when assessing an application for resource consent, where there is an allegation of invalidity, incomplete coverage, or uncertainty of meaning in the higher order documents.

Appendix A
Declarations made by the Environment Court
1.       That to have regard to any purported fettering of the council's ability to freely consider the objectives, policies, rules and other requirements of any planning document set out in s104(1)(b) of the Act; or of the council's ability to decline an application for resource consent and to freely consider the appropriate duration and conditions of a consent, would be unlawful.
2.       That in considering applications for resource consents for restricted discretionary activities under Rules 14-2 and 14-4 of the One Plan (existing and future intensive land use activities), pursuant to sections 104 and 104C of the Act, the Council has a duty to have regard to each of the following matters:
a.       all the matters over which discretion is restricted under Rules 14-2 and 14-4, including:
i.        the extent of non-compliance with the cumulative nitrogen leaching maximum values set out in Table 14.2; and
ii.       the environmental effects of that non-compliance including cumulative effects and a consideration of the required reductions of nitrogen in the relevant water management zone or subzone in order to provide for the Schedule B values (for zones or subzones that are over-allocated).
b.       the objectives and policies of the One Plan in so far as they relate to matters over which discretion is restricted under Rules 14-2 and 14-4.
c.       the objectives and policies of the National Policy Statement for Freshwater Management 2014 (NPSFM) in so far as they relate to matters over which discretion is restricted under Rules 14-2 and 14-4.
d.       in relation to the discharge consent required under section 15 of the Act and under Rules 14-2 and 14-4:
i.        the nature of the discharge and the sensitivity of the receiving environment under section 105 of the Act; and
ii.       the requirements of section 107 of the Act.
3.       That in considering and granting applications for resource consents under Rules 14-1 to 14-4 of the One Plan, the Council must not grant consents contrary to the Resource Management (National Environmental Standards for Sources of Human Drinking Water) Regulations 2007.
4.       That, when considering and granting resource consents under Rules 14-2 and 14-4 of the One Plan, the Council has a duty to give reasons for its decisions including reasons that address the matters in Policy 14-6(a) - (c) of the One Plan and Declarations 2(a)(i) and 2(a)(ii).
5.       In accordance with section 88 and the Fourth Schedule of the Act, and the Resource Management (Forms, Fees, and Procedure) Regulations 2003, applications for resource consent under Rules 14-2 and 14-4 of the One Plan, must include:
a.       An application form complying with Form 9 of the Resource Management Act (Forms, Fees and Procedure) Regulations 2003;
b.       Application for all discharges associated with the intensive land use activity;
c.       Assessment of compliance against the Resource Management (National Environmental Standards for Sources of Human Drinking Water) Regulations 2007;
d.       An AEE that meets the requirements of Schedule 4 of the RMA;

e.       An AEE that assesses the activity against the relevant Objectives and Policies of the One Plan for existing intensive land uses if there is non-compliance with the requirements of Table 14.2 of the One Plan - that is to include assessment against Policy 14- 6(b) and (c).
f.       Assessment against the provisions of s105 RMA, to the extent they relate to the matters over which discretion is restricted.
6.       That, in granting resource consents under Rules 14.2 and 14.4 of the One Plan the Council must adequately define the ambit and scope of the activity authorised, including through consents and consent conditions that:
a.       expressly authorise the activity of the associated discharge of contaminants to land in circumstances where those contaminants may enter water, as well as the use of land for intensive farming, for activities expressly requiring consent under Rules 14-2 and 14-4;
b.       set the maximum nitrogen leaching allowed over the term of the consents;
c.       require the activity to be operated in compliance with a Nutrient Management Plan to be prepared by a person who has both a Certificate of Completion in Sustainable Nutrient Management in NZ Agriculture and a Certificate of Completion in Advanced Sustainable Nutrient Management from Massey University, showing that the activity is complying with the nitrogen leaching maximums allowed by the consent; and
d.       require environmental or performance standards for phosphorus or sediment loss, or for the matters listed in Rules 14-5, 14-6, 14-7, 14-9 and 14-11 of the One Plan where they are applicable.
7.       That Conditions or Advice Notes stating, or to the effect, that:
a.       it is not intended that there will be enforcement of any specific management practices;
b.       "updates" to targeted nitrogen leaching or a Sustainable Management Plan or associated OVERSEER files may be approved by the Regulatory Manager from time to time; and
c.       annual records showing compliance with Nutrient Management Plans will only be required if there are "discrepancies with the Nutrient Budget"
are unlawful, invalid and in contravention of the Act.
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