Oceana Gold (New Zealand) Limited v Otago Regional Council
[2020] NZHC 436
•9 March 2020
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2019-412-000026
[2020] NZHC 436
UNDER the Resource Management Act 1991 IN THE MATTER
of an appeal under s 299 of the Act
BETWEEN
OCEANA GOLD (NEW ZEALAND) LIMITED
Appellant
AND
OTAGO REGIONAL COUNCIL
Respondent
Hearing: 19 – 20 November 2019 Appearances:
S Christensen and P Walker for Appellant A J Logan and T M Sefton for Respondent
S R Gepp for The Royal Forest and Bird Protection Society of New Zealand Inc.
R J Wilson for Queenstown Lakes District Council (attendance excused)
R Dixon for Attorney-General (attendance excused)Judgment:
9 March 2020
JUDGMENT OF OSBORNE J
This judgment was delivered by me on 9 March 2020 at 11.30 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
OCEANA GOLD (NEW ZEALAND) LIMITED v OTAGO REGIONAL COUNCIL [2020] NZHC 436 [9
March 2020]
Introduction
[1] This appeal is from a decision of the Environment Court (“the Judgment”).1 That Court had in turn heard appeals in relation to the proposed Otago Regional Policy Statement (“PORPS”).2 The PORPS was put forward by the Otago Regional Council (“the Council”) pursuant to ss 59–60 Resource Management Act 1991 (“the Act”).
The context
[2] The purpose of a regional policy statement (“RPS”) is identified in s 59 of the Act which provides:
59 Purpose of regional policy statements
The purpose of a regional policy statement is to achieve the purpose of the Act by providing an overview of the resource management issues of the region and policies and methods to achieve integrated management of the natural and physical resources of the whole region.
[3] The appellant, Oceana Gold (New Zealand) Ltd (“Oceana”), is the current operator of Macraes Mine, a gold mine situated approximately 80 km north of Dunedin.
[4] One of the natural and physical resources of Otago is gold. In the decision under appeal, the Environment Court summarised the significance (including economic significance) of gold to Otago.3
[5] The Environment Court noted that mining potentially has adverse effects on other natural resources, including New Zealand’s indigenous flora and fauna and other living organisms, which the Court described as “the key background issue for these proceedings”.4
[6] The identification of that key background issue had led the Environment Court to identify at the start of the Judgment a more specific question (and subordinate issues):
1 Oceana Gold (New Zealand) Ltd v Otago Regional Council [2019] NZEnvC 41 (“Judgment”).
2 Decision of the Otago Regional Council dated 1 October 2016.
3 Judgment, above n 1, at [5]–[8].
4 At [8].
[1] The main question in these proceedings is quite specific: it is “whether, if the adverse effects of mining on indigenous biodiversity cannot be avoided, remedied, mitigated or offset, then should there be a policy enabling the miner to compensate for those effects and if so to what extent”? There are also subordinate issues as to the wording of the offsetting policy which would apply before compensation is even considered.
The appeals to the Environment Court
[7] The appeals to the Environment Court by Oceana, the Royal Forest and Bird Protection Society of New Zealand Inc (“Forest and Bird”) and by the Environmental Defence Society Inc (“EDS”) (the latter two together “the Societies”) proceeded under the Act as de novo appeals. Section 290(1) of the Act provides:
290 Powers of court in regard to appeals and inquiries
(1)The Environment Court has the same power, duty, and discretion in respect of a decision appealed against, or to which an inquiry relates, as the person against whose decision the appeal or inquiry is brought.
(2)The Environment Court may confirm, amend, or cancel a decision to which an appeal relates.
…
[8] By s 293 of the Act, the Environment Court may order changes to proposed policy statements.
[9] By cl 16 of sch 1 to the Act, a local authority must, without using the otherwise applicable processes, make an amendment to its proposed policy statement if required by a direction of the Environment Court under s 293 of the Act.
The Environment Court’s confirmations and directions
The Environment Court’s decision
[10] Mr Christensen, for Oceana as appellant, summarised the focus of Oceana’s appeal thus:
The [Environment Court’s] Decision, and this appeal, centre on two policies that address the way in which the tension arising from the co-location of important mineral and biodiversity values is most appropriately managed: policy 5.4.6 “offsetting for indigenous biological diversity”; and policy 5.4.6A “biological diversity compensation”.
[11] The Environment Court recorded its decision at the start of the Judgment in these terms:
A:Under clause 16 of Schedule 1 and under section 290 of the Resource Management Act 1991 the Environment Court:
(1)confirms policy 5.4.6 of the proposed Otago Regional Policy Statement as follows:
“Policy 5.4.6 Offsetting for indigenous biological diversity
Consider the offsetting of indigenous biological diversity offsetting, when:
(a)Adverse residual effects of activities cannot be avoided, remedied or mitigated;
(b)The offset achieves no net loss and preferably a net gain in indigenous biological diversity;
(c)The offset ensures there is no loss of individuals of rare or vulnerable species as defined in reports published prior to 14 January 2019 under the New Zealand Threat Classification System (‘NZTCS’);
(d)The offset is undertaken where it will result in the best ecological outcome, preferably:
(i)Close to the location of development; or
(ii)Within the same ecological district or coastal marine biogeographic region.
(e)The offset is applied so that the ecological values being achieved are the same or similar to those being lost;
(f)The positive ecological outcomes of the offset last at least as long as the impact of the activity, preferably in perpetuity;
(g)The offset will achieve biological diversity outcomes beyond results that would have occurred if the offset was not proposed;
(h)The delay between the loss of biological diversity through the proposal and the gain or maturation of the offset’s biological diversity outcomes is minimised.”
(2) directs that the Otago Regional Council amends its proposed Otago Regional Policy Statement by adding the following policy 5.4.6A (Limits to compensation):
“5.4.6A Biological Diversity Compensation
Consider the use of biological diversity compensation:
(a)When:
(i)Adverse effects of activities cannot be avoided, remedied, mitigated or offset; and
The residual adverse effects will not result in:
(1)The loss of an indigenous taxon (excluding freshwater fauna and flora) or of any ecosystem type from an ecological district or coastal marine biogeographic region;
(2)Removal or loss of viability of habitat of a threatened or at risk indigenous species of fauna or flora under the New Zealand Threat Classification System (NZCTS);
(3)Removal or loss of viability of an originally rare or uncommon ecosystem type that is associated with indigenous vegetation or habitat of indigenous fauna;
(4)Worsening of the NZTCS conservation status of any threatened or at risk indigenous freshwater fauna.
(b)By applying the following criteria:
(i)the compensation is proportionate to the adverse effect;
(ii)the compensation is undertaken where it will result in the best practicable ecological outcome, preferably:
close to the location of development;
(2)within the same ecological district or coastal marine biogeographic region;
(iii)the compensation will achieve positive biological diversity outcomes that would not have occurred without that compensation;
(iv)the positive ecological outcomes of the compensation last for at least as long as the adverse effects of the activity; and
(v)the delay between the loss of biological diversity through the proposal and the gain or maturation of the compensation’s biological diversity outcomes is minimised.”
(3) directs that the Otago Regional Council amends its proposed Otago Regional Policy Statement policy 5.4.8(d) by adding the underlined words as follows:
(d)... avoiding, remedying, or mitigating adverse effects on other values including highly valued natural
features, landscapes and seascapes in order to
maintain their high values ...
B:Leave is reserved for any party to raise any inconsistency or error in Order A provided they do so by 29 March 2019.
C: Costs are reserved. Any application should be made by 12 April 2019
(unless an application is made under B).
Appeals to High Court
Appeals on questions of law only
[12] Oceana, as a party to the proceeding before the Environment Court, was entitled to appeal on a question of law to this Court.5 Insofar as an Environment Court decision is on the merits (not involving a question of law), the decision is final.6
[13] In Countdown Properties (Northlands) Ltd v Dunedin City Council, this Court identified the principles on which its appellate powers are exercised under the Act, recording:7
… we note that this Court will interfere with decisions of the Tribunal only if it considers that the Tribunal –
(a)Applied a wrong legal test; or
(b)Came to a conclusion without evidence or one to which on evidence, it could not reasonably have come; or
(c)Took into account matters which it should not have taken into account; or
(d)Failed to take into account matters which it should have taken into account.
5 Resource Management Act 1991, s 299(1).
6 Resource Management Act 1991, s 295.
7 Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC) at 153. See also Transpower New Zealand Ltd v Auckland Council [2017] NZHC 281 at [52].
[14] It has also been recognised by this Court that, as the Environment Court acts within its jurisdiction so long as it observes the principles of natural justice, the High Court may set aside a decision as a matter of law if the Environment Court has not relevantly applied principles of natural justice.8
[15] The High Court recognises and respects the specialist nature of the Environment Court. Thus, in Countdown Properties (Northlands) Ltd v Dunedin City Council, this Court observed:9
… the Tribunal should be given some latitude in reaching findings of fact within its areas of expertise …
[16] In Guardians of Paku Bay Association Inc v Waikato Regional Council, Wylie J expanded upon the respective roles of the Environment Court and the High Court in relation to their decision-making:10
[31] Relief ought not to be granted unless an identified error of law has materially affected the Environment Court’s decision. The Environment Court is the sole decision maker responsible for the balancing process required under the Act, and that process is an integral part of the consideration of resource management consents under s 104. The weight to be given to the assessment of relevant considerations is for the Environment Court and is not for reconsideration by this Court as a point of law.
[32] It was also common ground that the Court must be vigilant in resisting attempts by litigants disappointed by Environment Court decisions to use appeals to the High Court in an endeavour to re-litigate factual findings made by the Environment Court. This Court can only intervene in such situations where the Environment Court has come to a decision to which, on the evidence, it could not reasonably have come. This can be described as a situation in which there is no evidence to support the determination, or as one in which the evidence is inconsistent with and contradictory to the determination, or as one in which the true and only reasonable conclusion contradicts the determination. It is trite law however that the sufficiency of evidence, rather than the want of it, cannot amount to a point of law.
8 Meridian Energy Ltd v Central Otago District Court [2011] 1 NZLR 482 (HC) at [132]–[133],
[148] and [166]. See also Saddle Views Estate Ltd v Dunedin City Council [2017] NZHC 1727 [2017] NZRMA 505, at [43].
9 Countdown Properties (Northlands) Ltd v Dunedin City Council, above n 7, at 153.
10 Guardians of Paku Bay Association Inc v Waikato Regional Council [2012] NZRMA 61 (HC) (footnotes omitted).
[17] Consistently with that approach, this Court had previously in Contact Energy Ltd v Waikato Regional Council identified limits to what the (former) Planning Tribunal might be expected to record in relation to factual and legal issues.11 There, Woodhouse J observed:
Recording factual findings and other decision making processes
[64] Appeals purportedly on points of law not infrequently turn into a contention that the Tribunal did not refer in its decision to a matter of fact or of law in issue in the hearing. That, of itself, is not an error of law. This includes, for example, an absence of reference in the decision to evidence which may be in direct conflict with a conclusion expressly recorded, or evidence given at the hearing which might arguably indicate a conclusion different from that recorded by the Tribunal.
[65] There is no obligation to record every finding on every piece of evidence. There is no obligation to make a finding of fact on every fact in issue, and generally speaking there is no obligation to make a finding of fact at all: see Rodney District Council v Gould and Anor (2006) NZRMA 217; Auckland City Council v Wotherspoon [1990] 1 NZLR 76 at 82-89. There is also no obligation on a Tribunal to record every part of its reasoning process on the facts or on the law, and notwithstanding the fact that the conclusions reached may involve unarticulated rejections of contentions of witnesses or submissions for parties on the law.
[18] These observations, in relation to the former Planning Tribunal, apply equally to the Environment Court.
[19] Finally, on appeals from the Environment Court to this Court, the appellant bears the onus of establishing an error of law.12
Appeal ground 1 – wording of policy 5.4.6(c)
[20] Oceana appeals against that part of the Environment Court’s decision which dealt with the wording of policy 5.4.6(c) (set out in full at [11] above). The focus here is on the Court’s requirement that the New Zealand Threat Classification System (“NZTCS”) be used as the definition source for “rare or vulnerable species”.
[21] By policy 5.4.6(c) a decision-maker would be required to consider the offsetting of indigenous biological diversity offsetting when the offset ensures that
11 Contact Energy Ltd v Waikato Regional Council (2007) 14 ELRNZ 128 (HC).
12 Smith v Takapuna City Council (1988) 13 NZTPA 156 (HC).
there is no loss of individuals of rare or vulnerable species as defined in reports published prior to 14 January 2019 under the NZTCS.
[22] The difficulty identified by counsel for Oceana, and accepted by Mr Logan for the Council, is that the NZTCS does not contain a definition of “rare or vulnerable species”. The categorisations adopted in the NZTCS may be seen in the diagram from the NZTCS as set out in figure 1 in the Judgment.13
[23] Counsel accept that the Court made an error of law in the amendment to policy 5.4.6(c) wherein the definition of the categories of “rare or vulnerable species” were linked to the NZTCS. I agree. The requirement under policy 5.4.6(c) to have reference to a definition in the NZTCS is not reasonably workable. It is an error of wording which requires amendment to render it workable.
[24]The appeal will be allowed in that regard and appropriate directions made.
Appeal ground 2 – failing to consider the relationship between offsetting in the PORPS and s 104(1)(ab) of the Act
[25] A further ground of appeal of Oceana may be dealt with briefly as Oceana sought leave to withdraw this ground, which I granted.
[26] Oceana had asserted that the Environment Court erred by failing to have regard to a relevant consideration because it had not addressed the relationship between:
(a)policies in the PORPS that limit the ability to consider offsetting; and
(b)the application of s 104(1)(ab) of the Act.
[27] In advancing this ground of appeal, Oceana’s counsel had overlooked the transitional provisions of the Resource Legislation Amendment Act 2017 (“the Amendment Act”). The Amendment Act (which post-dated the notification of the PORPS) had introduced a new s 104(1)(ab) to the parent Act. But the relevant transitional provision stated that where a policy statement or plan had been notified,
13 Judgment, above n 1, at [19].
but had not reached the stage at which no further appeal was possible before the commencement of an amendment:14
The proposed policy statement, plan, change, or variation must be determined as if the amendments by the amendment Act had not been enacted.
[28] Ms Gepp for Forest and Bird correctly identified these applicable statutory provisions in her written submissions. Mr Christensen at the hearing of the appeal appropriately conceded that it was not possible to establish an error of law in this regard and sought leave to withdraw this ground of appeal, which I granted.
Appeal ground 3 – breach of natural justice
The issue
[29] This appeal ground concerns two articles or discussion papers. First, the Business and Biodiversity Offsets Programme (“BBOP”) on 20 March 2012 published its Resource Paper: Limits to What Can Be Offset (“the BBOP paper”).15
[30] Secondly, there was a paper presented for the Resource Management Legal Association conference in September 2008, prepared by Mark Christensen, entitled “Biodiversity Offsets – A Suggested Way Forward” (“the RMLA article”).16
[31]I will refer to these two publications collectively as “the papers”.
[32] As their titles indicate, the papers were concerned with the concept of offsetting in a resource management context. Within the PORPS, it is policy 5.4.6 which addresses “offsetting for indigenous biological diversity”.
[33] The Environment Court dealt with offsetting under the PORPS in section 4 (paras [79]–[95]) of the Judgment.
14 Resource Management Act 1991, Sch 12, cl 13(2), as inserted by Resource Legislation Amendment Act 2017, s 122.
15 Resource Paper: Limits to What Can Be Offset (Business and Biodiversity Offsets Programme, March 2012.
16 Mark Christensen “Biodiversity Offsets – A Suggested Way Forward” (2010) RMJ 8.
[34] By its notice of appeal to the Environment Court, Oceana asserted that, while policy 5.4.6 of the PORPS provided for consideration of biological diversity offsetting in limited circumstances, the policy was weak and inefficient, and the six listed qualifying criteria were not likely to all be met. Oceana further asserted that by reason of the wording of policy 5.4.8 (proposed mining effects), policy 5.4.6 was not going to apply in the circumstances where offsetting is likely to be most relevant in the mining context (namely where there are unavoidable adverse effects on significant indigenous vegetation and significant habitats of indigenous fauna). Oceana sought as relief on this aspect of the PORPS the deletion of policy 5.4.6.
[35] At the hearing of the appeal before the Environment Court, Oceana’s brief opening submissions in relation to the offsetting policy outlined a modified approach focused on policy 5.4.6(c) specifically. Mr Christensen, for Oceana, said in opening:
Are ‘like for like, no net loss’ actions that involve addressing the loss of a rare or vulnerable species able to be called an offset in accordance with Policy 5.4.6, or does Policy 5.4.6(c) operate as a bar? I submit the policy needs to be clear about this one way or the other and needs to be clear as to whether partial offsets are included as offsets (i.e. where residual effects on other taxa or ecosystems are being offset and residual adverse effects on other taxa or ecosystems are not being offset). I submit that intuitively, if we were going to want to encourage well-designed and implemented offsets anywhere, it is surely in relation to rare and vulnerable species.
[36] At the hearing, the Council submitted that policy 5.4.6(c) operated as a limit on the availability of offsetting for losses of indigenous biodiversity. The Societies supported policy 5.4.6(c).17
Discussion of offsetting under the PORPS in the Judgment
[37] The Environment Court began its discussion of “offsetting under the PORPS” (in section 4 of the Judgment, paras [79]–[95]) with a discussion of the concepts of both “offset” and “compensation” under the Act.
[38] The Court turned in its section 4.2 (paras [87]–[95]) of the Judgment to a discussion under the heading “The Effectiveness of Policy 5.4.6 (offsets)”, in evident
17 See further below at [67].
response to Oceana’s appeal ground by which it asserted that the policy was “weak and inefficient”.
[39]I now set out the Environment Court’s discussion on the effectiveness of policy
5.4.6 leading to its conclusions (at [93]–[95]) as to the confirmation of policy 5.4.6 (with amendments):
4.Offsetting under the PORPS
4.1 The concepts of “offsets” and “compensation” under the RMA.
[79] We held earlier that the RLAA does not apply to these proceedings. That is of some importance because its amendments to the RMA expressly introduced a (further) concept of “compensation” and expanded that of “offsets” in the context of adverse effects on the environment. For example, section 104(1)(ab) now states:
104 Consideration of applications
(1)When considering an application for a resource consent and any submissions received, the consent authority must, subject to Part 2, have regard to –
(a)any actual and potential effects on the environment of allowing the activity; and
(ab) any measure proposed or agreed to by the applicant for the purpose of ensuring positive effects on the environment to offset or compensate for any adverse effects on the environment that will or may result from allowing the activity; and
…
[80] Prior to the RLAA the role of offsets and environmental compensation under the RMA was unclear. A number of decisions of the Environment Court have regarded offsetting as part of mitigation. A Board of Inquiry adopted that approach in its report on Transmission Gully, and that was subsequently applied in Mainpower New Zealand Limited v Hurunui District Council and in West Coast Environmental Network Incorporated v West Coast Regional Council.
[81] The concept of “compensation” under the RMA was explained in J F Investments Limited v Queenstown Lakes District Council where the Environment Court wrote:
Since the term ‘environmental compensation’ is not used in the Act we should first define what we mean by it. The concept arises in this way: an applicant for a resource consent may choose or be required to avoid or mitigate or, occasionally, to remedy the adverse effects of a proposal. Or the applicant may volunteer to remedy or mitigate adverse effects of other activities. The
offer may be fungible, that is of the same kind as the values or resources being lost, or different; it may be to remedy or mitigate adverse effects on- site or off-site. We define as ‘environmental compensation’ any action (work, services or restrictive covenants) to avoid, remedy or mitigate adverse effects of activities on the relevant area, landscape or environment as compensation for the unavoided and unmitigated adverse effects of the activity for which consent is being sought. We also note that land may be offered by the applicant to ensure that the work is carried out, services performed or restrictions complied with. The corollary of the definition is that normal conditions to avoid, remedy or mitigate the adverse effects of the activity for which consent is sought do not supply environmental compensation.
[82] Unfortunately the Environment Court then muddied the distinction between compensation and offsetting when it referred to the proffered compensation as an offset:
[27] We conclude that, since activities which meet other agendas of national importance are allowable under the RMA even though they create permanent adverse effects on nationally important natural resources, it is inconsistent to suggest that environmental compensation is outside the scope of the Act. If adverse effects on the environment can be justified as providing a net benefit because they are in the national interest, then adverse effects
offset by a net conservation benefit allowed by enhancement or the remedying of other adverse effects on the relevant environment, landscape or area must logically be justifiable also. They are certainly relevant under both s 5(2)(c) and s 7 of the RMA.
[underlining added]
[83] In Royal Forest and Bird Protection Society of New Zealand Incorporated v Buller District Council (“Buller”) the High Court seized on that paragraph and stated that the concepts of “compensation” and “offset” had been used interchangeably. Further, Fogarty J had previously stated “... I do not find it possible to use the word “compensation”. His reasons were:
The RMA has numerous provisions which use the word compensation. But no provisions which provide for compensation if adverse effects are not completely avoided, remedied or mitigated. The compensation provisions are directed, as one would expect for constitutional reasons, to addressing the extent of compensation payable if property rights are taken. To compensate can be limited to counterbalancing, but it frequently is used in a way which carries the value that there ought to be the making of amends. That value has been addressed in the RMA but given limited functionality in the provisions that have just been footnoted. It is not deployed in Part 2 or in s 104.
That passage is obiter because the High Court continued: “However, I am satisfied that it is sufficient in this case to resolve whether or not offsets can be regarded as a form of mitigation, sometimes called “offset mitigation”.”
[84] A different approach was taken in Day v Manawatu-Wanganui Regional Council (“Day”) which expressly disagreed with the Board of Inquiry in the Transmission Gully report, stating:
[3-63] With respect to the Board of Inquiry, we do not consider that offsetting is a response that should be subsumed under the terms remediation or mitigation in the [Proposed One Plan] in such a way. We agree with the Minister that in developing a planning framework, there is the opportunity to
clarify that offsetting is a possible response following minimisation - or mitigation - at the point of impact.
[85] We consider that the Day approach to offsets comes closest to the principles of Part 2 of the RMA (and - as we shall show - international practice) in relation to offsets; although the J F Investments understanding of (environmental) compensation may remain useful. Further, the latter is consistent with the economic themes of the RMA especially the idea introduced by section 7(b) RMA that particular regard should be had to the efficient use of resources, i.e. there should be a net (social) benefit in any exercise of a resource consent. The idea of compensation is to ensure that in appropriate cases the net social benefit is also a net conservation benefit: Baker Boys Limited v Canterbury City Council. Consequently we respectfully decline to follow the obiter remarks of the High Court in Buller.
[86] As we have stated, the PORPS elaborates on the offsetting idea in policy 5.4.6 and the related definition. It provides that “offsetting must achieve no net loss (of species abundance, habitat structure and ecosystem function)”. Conversely “biodiversity compensation” is not required to maintain the specific species or ecosystems being impacted. Therefore it may not “maintain biodiversity” if impacts on the species affected or ecosystems are severe. Ms Gepp for the Societies submitted that:
Impacts that would not maintain biodiversity despite the best conceivable compensation proposal are those that cause the extinction of a species or loss of an ecosystem type (locally or nationally), or which so degrade a rare species' habitat that it increases extinction risk, or which result in loss or modification of a naturally uncommon ecosystem type.
Clearly the circumstances in which biodiversity compensation should be permissible (or not permissible) need to be identified. That is what the [Otago Regional Council’s] proposed policy 5.4.X attempts. First, however we need to consider the controversial part(s) of the offsetting policy 5.4.6.
4.2 The effectiveness of policy 5.4.6 (offsets)
[87] The full text of policy 5.4.6 is set out above. Oceana’s appeal sought the deletion of policy 5.4.6(c) which requires that offsetting can be considered when “the offset ensures there is no loss of rare or vulnerable species”. That is a clear reference to the NZTCS. However there is some ambiguity in this. Does the loss refer to:
•loss of individual animals or plants?
•loss of rare or vulnerable species from an ecological district?
•loss of the rare or vulnerable species from New Zealand?
[88] In conferencing the ecologists considered policy 5.4.6 referred to individual specimens of a species. In supplementary evidence-in-chief or in cross-examination the ecologists and planners were less certain. Several said that it meant loss of “species”, but that the scale was not clear. No witness suggested that the scale (threshold) should be national extinction only:
•Mr McRae said it is aimed at loss of species from an ecological district, not at a loss of individuals;
•Dr Lloyd agreed it meant species not specimens, but noted that the scale is not clear;
•Dr Ryder said:
Well, I believe it means the loss of a species in total, either from a particular geographic location or an ecological district or a region or the country, in fact, pretty much along the lines of what Dr Lloyd’s view of it was. There is no scale specified as to where that loss is confined to.
•Ms Myers said:
... you are trying to make sure that there isn’t a loss or extinction of a species from a particular area or an ecological district.
[89] Mr Christensen submitted for Oceana that if policy 5.4.6(c) refers to loss of rare or vulnerable species from an ecological district (within the region) then:
... it is unclear in our submission what purpose policy 5.4.6(c) serves. Policy 5.4.6(b) requires no net loss and preferably a net gain in biodiversity. Policy 5.4.6(e) requires the offset to be like-for-like or similar. If policy 5.4.6(c) is intended to require that after the offset has been applied there should be no net loss of rare or vulnerable species then it should either say that (by adding “net”), or perhaps more correctly it should be deleted since it adds nothing to policies 5.4.6(b) and (e).
[90] The Societies say that policy 5.4.6(c) is not a redundant criterion because it does not merely replicate the “no net loss” criterion . The policy is concerned with limits to what can be offset. Counsel observed that the principle behind policy 5.4.6(c) derives from the International Business and Biodiversity Offsetting Programme (BBOP) principle of “limits to offsetting”. The BPOP [sic] is ultimately concerned with risk: that some elements of biodiversity are so irreplaceable or vulnerable that the risk of their not being successfully offset (no net loss, like-for-like outcome) are too high. The BBOP has produced specific guidance on the “limits to offsetting” concept in its Resource Paper: Limits to What Can be Offset (“Resource Paper”).
[91]The Resource Paper provides that:
In general, the risk is high that impacts will not be successfully offset where:
•affected biodiversity is specialised and restricted in its distribution; uniquely adapted to one or a few locations; slow to regenerate and relatively immobile; or already highly vulnerable; and/or where;
•no tried-and-tested conservation techniques are available to achieve the offset outcomes required; or no sites or legal mechanisms are available to secure the use of land for the offset.
These factors indicate that on-site conservation through avoidance, rather than an offset elsewhere, may be necessary to enable the persistence of affected biodiversity (see Principle 1, BBOP, 2011a).
It also states that “there are currently no globally accepted numerical thresholds that explicitly define when impacts are to be regarded as non- offsettable”. This principle is expressed in the policy 5.4.6 as “the offset
ensures there is no loss of rare or vulnerable species”. In other words, the threshold for non-offsettable impact has been set at “no loss of rare or vulnerable species”.
[92] In the New Zealand context, a useful and illuminating paper by M Christensen Biodiversity offsets - a suggested way forward states:
Perhaps the strongest concern about biodiversity offsets is that they could make it easier for developments to proceed that have a very significant impact on biodiversity that in many cases would be judged unacceptable, on the back of claims that the damage to biodiversity will be offset. There is also a concern that biodiversity offsets could be used as a form of ‘green washing’.
In relation to the “limits to offsetting” principle he continues:
Biodiversity offsets are inappropriate for certain ecosystem (or habitat) types because their rarity or the presence of particular species within them makes the clearance of these ecosystems inappropriate under any circumstances. Notwithstanding the hierarchy in principle one, it seems clear that there are some ecosystems or habitat types for which offsets are never going to be possible. These may be ecosystems that have already been diminished to such an extent that any further loss is unacceptable, or habitats of species whose loss would most likely lead to the extinction of the species as well.
[93] With that background understanding, we accept the Societies’ submissions that the documents which policy 5.4.6 is derived from show that “limits to offsetting” are:
... not merely concerned with whether a no net loss, like-for-like offset is technically achievable, but rather about unacceptable impacts that should not be provided for even where an offset is considered technically achievable (based on the evidence available at the time that the impact and offset are being designed or assessed).
[94] That acceptance is qualified by our judgment that the reference to “rare or vulnerable” species in the offset policy should include individual plants or animals of rare or vulnerable species as identified in the reports under the NZTCS if those reports had been published by the date of notification of the PORPS. There probably needs to be a biennial or triennial review by the ORC of the latest reports under the NZTCS and a variation to the PORPS updating the date in the policy.
[95] The reason we hold that individual plants or animals should not be lost is that while the ‘no net loss’ policy 5.4.6(b) is generally adequate for indigenous biological diversity (noting that it allows for loss of individual plants or animals on one site provided others are established elsewhere in the region) it is too risky to extend that method of management to threatened species. Accordingly we consider that proposed policy 5.4.6(c) is likely to be effective in achieving objectives 3.1 and 3.2 of the PORPS provided its reference to the NZTCS is made express. Similarly we consider 5.4.6(a) should be amended in a minor way by the addition of the word ‘residual’ to emphasise the place of offsetting in the mitigation hierarchy.
(footnotes omitted)
[40] As set out in section 4.2 of the Judgment (reproduced in full in the preceding paragraph), the Environment Court first focused on an ambiguity in the wording of policy 5.4.6, identifying differences between the witnesses as to the scale (threshold) of loss which was covered by the wording of the policy as drafted.18
[41] The Court next turned to a consideration of the effectiveness of the policy, referring to the submissions for Oceana in relation to the intended purpose of the policy and the submissions for the Societies (including Forest and Bird) as to policy 5.4.6(c) having an effective purpose.19
[42] This led the Court to record the Societies’ submission that the principle behind policy 5.4.6(c) derived from the BBOP’s principle of “limits to offsetting”, which the Court noted had been referenced in the evidence-in-chief of Dr Lloyd (the terrestrial ecologist called by the Council).20 Dr Lloyd, referring to BBOP principles, had stated that limits to what can be offset are expressed in policy 5.4.6 where there is a criterion to ensure that there is no loss of rare or vulnerable species.21 The Court identified the particular concern of the BBOP as being that some elements of biodiversity are so irreplaceable or vulnerable that the risk of their not being successfully offset (no net loss, like-for-like outcome) are too high. At that point, the Court referred to the BBOP paper and quoted from its discussion as to situations in which there is a high risk that impacts will not be successfully offset.22 The Court concluded that the threshold non- offsettable impact had been set in policy 5.4.6 at “no loss of rare or vulnerable species”. The Court then referred to the RMLA paper, quoting passages from it. The
18 Judgment, above n 1, at [87] – [88].
19 At [89] – [90].
20 At n 142. Dr Lloyd had stated in his evidence-in-chief:
The requirements for offsetting in Policy 5.4.6 are generally consistent with international biodiversity offsetting principles developed under the Business and Biodiversity Offsets Programme (BBOP) that are also typically used in New Zealand (for example in the recent consent applications for the proposed Escarpment Mine (Buller District) and Lee Dam (Tasman District). The ten BBOP principles, which remain current, are as follows:
…
4. Limits to what can be offset: There are situations where residual impacts cannot be fully compensated for by a biodiversity offset because of the irreplaceability or vulnerability of the biodiversity affected.
21 Dr Ryder, the Council’s aquatic ecology witness, also gave evidence that policy 5.4.6 was generally consistent with BBOP principles. Ms Myers, the Societies’ ecology witness, referred to a 2012 BBOP publication (“Standard on Biodiversity Offsets”) in stating that such offsets are defined by internationally agreed principles.
22 Judgment, above n 1, at [90]–[91].
passages cited refer to situations in which the author considers biodiversity offsets to be inappropriate or “never possible”.
[43] The Court then identified those discussions as “background understanding” against which the Court accepted the Societies’ submissions as to the concern lying behind the documents from which policy 5.4.6 is derived.23 Thus the Court accepted that “limits to offsetting” are not merely concerned with whether a no net loss, like- for-like offset is technically achievable but also deal with unacceptable impacts that should not be provided for (that is permitted) even where an offset is considered technically achievable.24
[44] The Court then addressed the question of scale or threshold.25 It contrasted two situations. For indigenous biological diversity (under policy 5.4.6(b)) it found the “no net loss” policy generally adequate (allowing for loss of individual plants or animals on one site provided others are established elsewhere in the region). But for the management of threatened species, it found the “no net loss” policy too risky.26 Individual plants or animals were therefore not to be permitted to be lost under policy 5.4.6(c).
Oceana’s submissions
[45] For Oceana, Mr Christensen noted that, in the express terms of the Judgment (at [93]), the quoted discussions in the BBOP paper (at [91]) and the RMLA paper (at [92]) formed the “background understanding” upon which the Court accepted the Societies’ submissions as to the “limits to offsetting”.
[46] Mr Christensen submitted that the Court’s setting out of “that background understanding” indicates that the papers were both influential and material to the Court in reaching its decision on the offsetting policy.
23 At [93].
24 At [93].
25 At [94].
26 At [95].
[47] Mr Christensen submitted that such reliance in turn led the Court to reach its decision in breach of the principles of natural justice:
By accepting and being influenced by these documents without affording the Appellant any opportunity to respond to them or the way they were characterised in the Societies’ closing submissions …
[48] An example of the difficulty for Oceana, in Mr Christensen’s submission, was that Oceana did not have an opportunity to address whether the extracts referred to by the Court were taken in their correct context or to submit on the extent to which the various formulations of the policies in question did or did not sit alongside the views expressed by the papers’ authors.
[49] The framing of Oceana’s appeal to the Environment Court in relation to policy 5.4.6(c) and the terms in which counsel for Oceana opened his appeal submissions raised directly for the Court’s consideration the appropriateness of having an offsetting policy at all and led also to the need for the Court to consider the meaning of policy
5.4.6 as notified by the Council. It is clear from the Court’s discussion (for instance at [89]) that it understood (correctly) that Oceana’s submissions in relation to policy
5.4.6 were addressed to both the wording and interpretation of policy 5.4.6 and to its efficacy (or otherwise) in serving a particular purpose.
[50] Mr Christensen noted that the papers were put forward by the Societies in conjunction with their closing submissions dated 23 March 2018 (filed after the 20 February 2018 hearing). Those submissions, in accordance with the Environment Court’s timetable, had been filed after Oceana’s submissions.
[51] In his submissions, Mr Christensen characterised the Societies’ reliance on the papers in the following terms:
It is submitted that the Societies put forward the BBOP Paper as evidence to support the submission that policy 5.4.6(c) was not a redundant criterion, and put forward the RMLA article as evidence to support the submission that limits to offsetting are about unacceptable impacts to be avoided even where an offset is technically achievable.
(footnotes omitted)
[52] Mr Christensen observed that the papers were not part of the evidence of experts and were not introduced into evidence as exhibits (with the ability for cross- examination) during the course of the hearing.
[53] Mr Christensen concluded that Oceana had not had the opportunity to address or comment on the papers.
The Council’s submissions
[54] For the Council, Mr Logan tracked through the course of the appeal hearing in the Environment Court. He referred to the alteration in Oceana’s position concerning policy 5.4.6(c).27 He referred to the position of the Council and of the Societies as to the need for limits on the availability of offsetting and to the evidence of numerous witnesses in that regard, including in relation to principles identified by the BBOP.
[55] Mr Logan observed, in contra-distinction, that Dr Thorsen (Oceana’s ecology witness) had been silent on policy 5.4.6(c). Mr Logan noted that Oceana’s planning witness, Ms Dawson, agreed with the description of the policy as “setting criteria for offsetting”. He further noted that Ms Dawson had observed that there is government guidance available on offsetting, which “draws from the Business and Biodiversity Offsets Programme (BBOP)”.
[56] Mr Logan then turned to the closing submissions which had been made in the Environment Court.
[57]Oceana identified three options in relation to policy 5.4.6(c):
(a)amending the policy to read “no net loss of rare or vulnerable species”;
(b)deleting policy 5.4.6(c) on the basis it added nothing to policies 5.4.6(b) and (e) and because (c) (to the extent it operated as a limit to offsetting) was wrong in principle as the RPS should encourage the use of offsets for residual adverse effects on rare and vulnerable species; and
27 See the opening submissions for Oceana as quoted above at [35].
(c)if there were to be a limit on offsetting, then it needed to provide sufficient flexibility to accommodate the kinds of offset-like outcomes and other forms of compensation that ecologists recommend to maintain biodiversity.
[58] In their closing submissions, the Societies maintained the position that policy 5.4.6(c) was required as “the threshold for non-offsettable impact”. The Societies attached and discussed the BBOP and RMLA papers in that context.
[59] The Council, in its closing submissions, made submissions both as to the lack of ambiguity in policy 5.4.6(c) and that the paragraph (c) was a criterion distinct from others in the policy, in that it stipulated when offsetting will not be available. (In other words, paragraph (c) functioned as “a limit”).
[60] Mr Logan noted that the BBOP and RMLA papers are written at a very high level of generality. To the extent that the Societies relied upon them, they relate to the issue which was live in the Environment Court appeal, namely whether limits should be imposed on the availability of offsetting.
[61] Mr Logan submitted that the approaches identified in the BBOP and the RMLA papers, as cited by the Environment Court in the Judgment, were consistent with the evidence and submissions of both the Council and the Societies. He submitted that the discussion in neither paper added substantially to the material already before that Court. The papers could not be said to have driven the Court inexorably to an unanticipated conclusion to retain policy 5.4.6(c).
[62] In conclusion Mr Logan submitted that the parties had not been wrong-footed by the introduction of the papers, the hearing had not miscarried and there had been no material error of law in the Court’s consideration of the papers.
Forest and Bird’s submissions
[63] For Forest and Bird, Ms Gepp submitted that it was clear from the start of the hearing that Oceana (through its counsel) recognised that one outcome of the appeal
was that policy 5.4.6(c) might stand so as to bar a proposal involving adverse effects on rare or vulnerable species and actions designed to offset those adverse effects.
[64] As had Mr Logan, Ms Gepp addressed the extent to which the Council’s and Societies’ expert witnesses had addressed the question of limits to what may be offset, including by reference to the BBOP principles.
[65] Ms Gepp then turned to the parties’ closing submissions. She referred particularly to a passage in Oceana’s closing submissions relating to the principle underlying limits to offsetting, in which Mr Christensen had submitted:
We speculate the problem may have its genesis in a misunderstanding of the principle that there are limits to what can be offset [a footnote says: Dr Lloyd EIC, para 44(4) on page 11 sets out the relevant BBOP principle]. That principle recognises that there will be situations where the nature of the biodiversity being affected means that a ‘no net loss’ outcome cannot technically be achieved. It is not an invitation to set policy that precludes no net loss outcomes in circumstances where such outcomes can be achieved.
[66] Ms Gepp submitted that this aspect of Oceana’s submissions was not supported by evidence given in the Environment Court and amounted to evidence from the bar as to what the “limits to offsetting” principle and policy 5.4.6(c) meant.
[67] Ms Gepp contrasted Oceana’s stated view of the underlying principle with that adopted by the Societies. The Societies’ position was that the principle meant that offsetting should not be used to enable a project to proceed where adverse effects should really be avoided or, as stated in the Southland RPS, that offsetting should not be applied to justify impacts on vulnerable or irreplaceable biodiversity. That approach in turn stemmed from a rationale that offsetting carries inherent risks (that a predicted “no net loss” outcome will not be achieved) and that some species and ecosystems are too irreplaceable for that risk to be countenanced. The Societies therefore took the position that the “limits to offsetting” principle was separate from, and complementary to, the “no net loss principle”.
[68] Those matters were traversed in the Societies’ submissions in response to Oceana’s. Ms Gepp explained that, as the BBOP principles had been referred to and supported by all parties in the course of the Environment Court appeal, the Societies
cited the relevant BBOP technical paper and also the RMLA paper. She observed that the material in the papers could be viewed as complementing an article, published by Policy Quarterly, entitled “Biodiversity offsets in New Zealand: addressing the risks and maximising the benefits”.28 That had been provided to the Court by counsel for the Crown in the course of the appeal hearing.
[69] Ms Gepp then identified the Environment Court’s discussion of “offsetting under the PORPS” in section 4 of the Judgment (set out at [39] above). Ms Gepp identified the Court’s specific discussion of “the effectiveness of policy 5.4.6” in paras [87]–[95] of the Judgment. She then identified the three stages of the Court’s analysis:
(a)The Court identified that Oceana (by its notice of appeal) sought the deletion of policy of 5.4.6(c).29
(b)The Court identified an ambiguity in policy 5.4.6(c) as to whether “loss” referred to loss of individual specimens or species, and (if the latter) at what scale. The Court contrasted the submissions for Oceana and for the Societies, including the Societies’ reliance upon the BBOP principle of “limits to offsetting”. It was in that context that the Court referred to the BBOP and RMLA papers as having “produced specific guidance” and “useful and illuminating” information.30
(c)The Court recorded that “with that background understanding” the Societies’ submissions as to the meaning of the “limits to offsetting” principle were accepted.
[70] Ms Gepp submitted for six reasons that there had not been a breach of natural justice:
(a)natural justice is context-dependent. In this case, the new papers could at most contribute to the Court’s understanding of an issue that it had
28 Marie A Brown and Jemma Penelope “Biodiversity offsets in New Zealand: addressing the risks and maximising the benefits” (2016) 12(l) Policy Quarterly 35.
29 At [87].
30 At [87]–[92].
already received information about. The Judgment indicates that the papers aided “background understanding” only;
(b)Oceana had a fair opportunity to put its case regarding the limits to the offsetting principle which had been identified as a consideration and was the subject of evidence;
(c)the Court, instead of referring to the papers for “background understanding”, could equally have referred to evidence already before it as to the manner in which the limits to the offsetting principle had been codified in the Waikato and Southland RPSs and by the Policy Quarterly Paper already produced (making the same point as the papers in relation to the limits of offsetting);
(d)the RMLA paper, when properly read, does not constitute evidence but rather legal commentary;
(e)while the BBOP paper is properly seen as containing material in the nature of evidence, it was a document publicly available on the internet and a background paper to BBOP publications which were in evidence; and
(f)if any issues of natural justice had arisen through the introduction of the papers, Oceana had not taken any steps such as requesting the opportunity to respond to the papers, and that failure to act to remedy any perceived prejudice counts against the Court holding that there had been a breach of natural justice.31
Oceana’s reply submissions
[71] In reply, Mr Christensen submitted again that the papers contained opinion evidence which other parties (including Oceana) had not been given the opportunity to test or address. He rejected any proposition that a party should be able to add to the
31 Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council [2015] NZHC 2343 at [73]–[74].
evidence after a hearing simply because the subject-matter of the new evidence was in issue at the hearing itself.
[72] He rejected Ms Gepp’s proposition that the two papers “added nothing of substance”, noting the influence upon the Environment Court as indicated by the references in the Judgment.
[73] Mr Christensen noted that the Societies had submitted the papers with their closing submissions to counter Oceana’s submission that policy 5.4.6(c) was essentially redundant (as replicating the no net loss criterion).
[74] Mr Christensen rejected as irrelevant Ms Gepp’s observation that Oceana had not requested from the Environment Court the opportunity to respond to the paper. Mr Christensen submitted that the key point is that the Environment Court relied on the papers as material to its decision.
Discussion – the RMLA article
[75] The Societies’ reference to the RMLA article in its closing submissions does not raise issues of breach of natural justice. It is the article of a legal practitioner working in the resource management area, written from a legal practitioner’s perspective. Reference to the article was properly made in the course of submissions in precisely the same way as such commentaries are referred to regularly in all the courts. Such papers assist with an understanding of the issues and may (as this paper did) discuss those issues by reference to the expressed concerns and views of relevant experts. But they do not replace the underlying need for the parties to adduce evidence (be it the reports and oral evidence of experts or documentary exhibits produced and spoken to by the experts). In this case, the Environment Court had before it evidence both as to the experts’ understanding of the meaning of policy 5.4.6(c) and also its likely effectiveness in relation to preservation of rare or vulnerable species, particularly in regard to the scale or threshold that the policy should adopt.
[76] As the title to the RMLA paper records, the author was suggesting “a way forward”.
[77] It was then for the Environment Court, having heard the evidence and in light of its own expertise, to make its decision in relation to the appropriateness of policy 5.4.6(c).
[78] Neither the Societies’ reference to the RMLA paper in its closing submissions nor the Environment Court’s regard to it in the Judgment constituted a breach of natural justice.
Discussion – BBOP paper
[79] It was common ground on this appeal that the BBOP paper contains matters of evidence. It, for instance, outlines a set of ecological and other factors that can help to determine whether impacts are likely to be easy or difficult to offset. As the introduction to the BBOP paper itself explains, the paper specifically addresses Principle 2 in the BBOP Standard on Biodiversity Offsets. The BBOP paper is specifically focused, as its title indicates, on limits to what can be offset. A separate BBOP Resource Paper deals with the concept of “no net loss”.
[80] It was clear in the evidence called by the Societies, particularly that of Dr Lloyd (as referred to at [42] above), that the Societies invoked the BBOP principle “limits to offsetting” in rejecting Oceana’s proposition that 5.4.6(c) was not a redundant criterion. The BBOP paper identifying international biodiversity offsetting principles was directly referred to by Dr Lloyd, in some detail, in his evidence-in-chief.32 Other witnesses, Dr Ryder and Ms Myers, also referred to the BBOP principles. The evidence was that the principle behind policy 5.4.6(c) derived from the BBOP’s principle of “limits to offsetting”.
[81] As the Environment Court recognised, the BBOP (in its “Resource Paper: Limits to What Can Be Offset”) is ultimately concerned with risk, namely that some elements of biodiversity are so irreplaceable or vulnerable that the risk of their not being successfully offset (no net loss, like-for-like outcome) are too high.33
32 See above at [42] and n 20.
33 See [90] and [95] of the Judgment.
[82] The 2012 BBOP paper is in no sense a departure from the international diversity offsetting principles which had been developed by the BBOP in 2009. Rather, as the “Contents” page in the BBOP paper indicates, its purpose is to identify ecological and other factors that may help to determine whether impacts are likely to be easy or difficult to offset. In other words, it points towards considerations relevant to the likelihood (in risk) that residual impacts on biodiversity will be offsettable or non-offsettable.
[83] The Environment Court had heard evidence in relation to the risk (addressed by the BBOP principles and by policy 5.4.6) as in the evidence of Ms Myers (referred to at [88] of the Judgment) – the risk exists that there is the loss or extinction of a species from a particular area or an ecological district.
[84] What the BBOP paper identified (as quoted at [91] of the Judgment) are specific situations in which the risk is generally high that impacts will not be successfully offset.
[85] Those observations serve to illustrate particular situations in which the risk is high but they do not stand alone or depart from the principles previously identified by the BBOP in 2009 in relation to “limits to offsetting”, ultimately based on risk.
[86] I accordingly accept the thrust of submissions for both the Council and Forest and Bird, namely that the BBOP paper (and the RMLA paper) were consistent with the evidence and submissions of both the Council and the Societies. While providing amplification of the underlying drivers, and serving as concise articulations of those drivers, they did not substantially alter or add to the material placed in court at the hearing itself. The principles identified by the BBOP (and the underlying drivers) were matters arising from the evidence on which all the parties to the Environment Court appeal hearing were entitled to make their submissions. Reference to related BBOP papers referring to the risk assessment involved in deciding upon any limits to offsetting was within the appropriate parameters of submissions in the circumstances of this case. If Oceana had referred to such papers in its closing submissions, it would have been for any other party to respond by way of submission. If, as occurred, it was other parties (the Societies) who first referred to other papers in their submissions, it
The weight to be given to the analysis is not stated in section 32 or section 32AA of the Act. It appears that is determined under section 7(b) RMA which requires the decision-maker to have particular regard to the result of the efficiency analysis.
[164] The position was summarised in an earlier decision (cited in Self Family Trust) – Federated Farmers of New Zealand Inc (Mackenzie Branch) v Mackenzie District Council as follows:
Section 32 approaches the question of efficiency by requiring analysis of three components of efficiency:
(a)the benefits and costs of the proposed provisions;
(b)the benefits and costs of the alternative (in this case the status quo);
(c)the risks of acting or not acting.
The Environment Court added in Self Family Trust that (c) “ ... is perhaps controversial as a component of efficiency: it is really a backstop where there is insufficient information on (a) and (b)”.
(footnotes omitted)
50 Port Otago Ltd v Otago Regional Council, above n 48, at [49]–[55].
[160] At that point, the Court then turned to consider in particular the benefits of gold mining in the region. The Court found:
[165] We described earlier the benefits of gold mining in the region. The witnesses for Oceana and for the Crown implied that limits on compensation could prevent mining and thereby curtail jobs, exports, incomes and revenue streams to the Crown through royalties and taxation. There will be social and economic costs if mining is constrained. Consequently in Oceana’s and the Crown’s views the preferable course is that compensation and other benefits proposed are weighed up on a case-by-case basis against the costs of effects of the proposed project on the environment. However, the evidence as to the net social cost is very limited because we find that the economic evidence from Mr Ballingall is of little assistance to the court for the reasons given by the Societies:
(a)Mr Ballingall was not asked to, and did not, consider particular policy options and what those different options might mean in terms of economic outcomes;
(b)his evidence in terms of net losses to the economy if any curtailing of mining occurs is around a single scenario where mining does not occur. His evidence does not take into account that mining might occur but be subject to limits;
(c)he had not considered the costs and benefits, both to the applicant and to the consent authority, of proposals being put forward that would not be acceptable because of their ecological impacts;
(d)he had not attempted to put a value on the ecosystem services and intrinsic values of significant indigenous vegetation and habitat lost as part of mining proposals going ahead.
[166] The Societies acknowledge that the benefits of mining to the region and to New Zealand are “a weighty consideration”. They then submit that:
... it would not be appropriate to balance the economic benefits of mining with the cost of ensuring indigenous biodiversity is maintained. The latter is a mandatory function which cannot be abrogated based on economic considerations. The costs benefit decision has already been made at a national level by the legislature.
We hold that is not correct. Parliament has not made any final cost benefit decision as to the use of resources in Part 2 of the RMA. However, the legislation has given ‘strong directions’ about what to do in the absence of (and perhaps even in the presence of) a comprehensive social cost benefit analysis under section 7(b) RMA.
[167] The Societies took a more conciliating approach in counsel’s next paragraph:
The costs of imposing the particular limits proposed should be compared to the cost of not providing for compensation at all. Given the locational constraints of mining and its importance to the Otago
economy, it may be considered appropriate to provide for mining even where it would not protect significant and highly valued natural resources. However, the costs of not providing for offsetting and compensation (ie. requiring all adverse effects to be avoided, remedied or mitigated) are likely to be significantly higher than the cost of providing for offsetting and compensation within environmentally appropriate parameters.
The costs of biodiversity functions and values that would be lost if residual adverse effects were able to be compensated for in all cases should also be considered. If a proposal would result in the type of impact described in the proposed limits to compensation, this has a cost in terms of loss of ecosystem services and intrinsic value. That cost is unlikely to be quantifiable, but that does not mean it should be disregarded.
We consider that is a fairer summary of the efficiency issue and we adopt it.
[168] The difficulty is that no attempt was made to analyse either the indirect use or option values of the indigenous biodiversity, let alone the non- use values. We have far too little information to even make a back of the envelope assessment of the social costs and benefits of the two options. There is a similar lack of information for assessing the efficiency of the options for the offsetting policy.
(footnotes omitted)
[161] Under a heading “6.2 What is the risk of acting or not acting?”, the Court then observed:51
As a consequence of the lack of information referred to in the previous paragraph the risk assessment is of greater importance in this case.
[162]The Court then undertook its risk assessment before concluding:52
Accordingly we find that the limits are necessary to ensure that indigenous biological diversity is protected. We accept the assessments by the ORC and the Societies of the risks of acting or not acting to supply limits to compensation, i.e. that the limits are necessary.
Failure to engage with s 32 at all?
[163] Responsibly, Mr Christensen did not submit that the Court had failed to engage with s 32 of the Act. As Mr Logan submitted, the Judgment shows that the Court clearly understood the obligation under s 32 to examine whether the provisions in the proposal were the most appropriate way of achieving the relevant objectives by
51 Judgment, above n 1, at [169].
52 At [184].
identifying and assessing other reasonably practicable options for achieving the objectives.53
Did the Court err by not making an assessment in relation to the Council’s (two limit) proposal?
[164] For Oceana, Mr Christensen emphasised that the Court had been presented with three alternative formulations of a compensation policy in the form of Oceana’s (no limits), the Council’s (two limits) and the Societies’ (four limits). Mr Christensen concluded that the Court had failed to appropriately consider both Oceana’s and the Council’s proposed options.
[165] For the Council, Mr Logan observed that by the point of the Judgment (part 6) at which the Court turned to its s 32 assessment, the Court had provisionally concluded that there were two options being the Societies’ proposed limits or the Oceana proposal for no limits (and instead “considerations”).54
[166] The reasoning leading the Court to this conclusion – eliminating consideration of the Council’s two limit proposal did not fall into a category which could be identified as a “reasonably practicable option” for achieving the objectives (of the proposal).55
[167] It was not an error on the part of the Court, in these circumstances, to carry out its analysis of alternatives in relation to the two remaining proposals being Oceana’s and the Societies’. In other words, the Court appropriately came to the conclusion that the fairer summary of the efficiency issue (under s 32 of the Act) was as stated by counsel for the Societies in submissions, and adopted by the Court:56
The costs of imposing the particular limits proposed [by the Societies] should be compared to the cost of not providing for compensation at all [as proposed by Oceana].
53 Referring in particular to paras [163]–[164] of the Judgment, above n 1.
54 Judgment, above n 1, at [161]–[162].
55 In terms of s 32(1)(b)(i) of the Act.
56 Judgment, above n 1, at [167].
Did the Court have sufficient evidence of economic and social well-being benefits to compare and quantify the benefits and costs of alternative proposals?
[168] The submissions for Oceana in regard to the economic and social benefits of the Oceana proposal were closely followed upon the Coronation North example. Mr Christensen submitted that the Coronation North example (while “historical”) provided the relevant evidence required of economic and social well-being benefits.
[169] Ms Gepp, for Forest and Bird, submitted that Coronation North could not be taken as providing the evidence contended for by Oceana. The Court’s discussion of Coronation North indicates difficulties which lay in drawing conclusions from the “Coronation North example”. Ms Gepp described the Court as having been “rightly reluctant to turn a planning appeal into a quasi-consent hearing”.
[170] For the Council, Mr Logan observed that while Oceana (and the Crown) had adduced evidence of social and economic benefits of the existing mine, their evidence had been lacking in relation to any cost/benefit analysis of the impacts of mining (or biodiversity) of any of the options before the Court. Mr Logan referred to the Court’s recognition that it had:57
… far too little information to even make a back of the envelope assessment of the social costs and benefits of the two options.
[171] Parliament provided for precisely that contingency through s 32(2)(c) which permits the Court to assess the risk of acting or not acting if there is uncertain or insufficient information about the subject-matter of the provisions.
[172] I accept the submissions for the Council and Forest and Bird that the Court did not err (in law) in reaching its conclusion as to the insufficiency of information to quantity benefits and costs and therefore proceeding to assess risk under s 32(2)(c) of the Act.
57 At [168] (footnotes omitted).
[173] The second aspect of Oceana’s appeal in relation to the Court’s assessment under s 32 of the Act related to the Court’s assessment of risk under s 32(c), in particular of acting or not acting.58
[174] This aspect of the appeal is closely related to Oceana’s complaint as to a failure to consider alternatives under s 32(b) of the Act. In the notice of appeal, the complaint is that the Court failed to appropriately assess the range of options presented to it in the context of the risk assessment required under s 32(2)(c).
[175] To the extent that the Court did not assess risks in relation to the Council’s two limit proposal, I reiterate my earlier conclusion – the Court was entitled to focus its consideration on Oceana and the Societies’ proposals.59
[176]In Oceana’s more specific grounds of appeal, it asserted that:
(a)the Court failed to appropriately consider Oceana’s and the Council’s proposal that considerations should be for assessment by a consent authority (and not imposed through absolute limits);
(b)the Court failed to assess the impact of different biodiversity policy formulations on the enabling objectives and policies in chapter 5 and elsewhere in PORPS as they relate to mineral development; and
(c)the Court failed to assess how the proposed policy wording could prevent biodiversity being maintained or improved through foregoing opportunities presented through compensation proposals that did not conform to the limits it decided upon (such as by failing to consider Dr Thorsen’s evidence that there are potential biodiversity gains from biological diversity compensation).
[177] In his opening written submissions for Oceana, Mr Christensen addressed the specific grounds in one paragraph:
58 Contained in part 6.2 of the Judgment, at [169]–[184]
59 Above at [167].
The Court identifies one risk of imposing limits to compensation is a potential lack of information, however after discussing that risk the Court concludes that is not a problem. The Court then goes on to discuss the risks of not acting to impose limits as being both procedural and substantive risks. However, there is no discussion of other risks of acting. A clear and obvious risk is that imposing directive limits could result in appropriate biological diversity compensation (like Coronation North) being excluded. In that case there would be no benefits to biodiversity (i.e. the status quo would remain with no opportunity for benefits to the species impacted by the proposal) and the mineral development benefits would be foregone. The benefits of compensation proposals to biodiversity have been acknowledged in the literature, it is not the case that the status quo automatically achieves the maintenance of biodiversity.
[178] Ms Gepp correctly summarised this second part of Oceana’s argument as being that the Court failed to assess how the proposed policy wording could prevent biodiversity being maintained or improved through forgoing opportunities for compensation.
[179] Ms Gepp noted that biodiversity offsetting and compensation are responses to unavoidable loss of biota through impacts of development proposals. She submitted that such responses do not benefit or enhance biodiversity, noting that while biodiversity offset or compensation actions enhance the biota that they target, there is corresponding loss for the impacted biota. In her submission, that is not a benefit to biodiversity. Ms Gepp referred to the evidence of Dr Thorsen (called as Oceana’s ecologist) that from an ecological perspective it is better to avoid impacts than to try to recreate or enhance biota elsewhere.
[180] Ms Gepp noted Mr Christensen’s formulation of an error of law as lying in the Court’s failure to consider Dr Thorsen’s evidence that there are potential biodiversity gains from biodiversity compensation. Ms Gepp submitted that Mr Christensen’s submissions in relation to Dr Thorsen’s evidence failed to have adequate regard to the Court’s significant rejection of Dr Thorsen’s evidence:60
… the evidence of Dr Thorsen has to be read with caution.
60 Referring in particular to the Judgment, above n 1, at [103].
[181] Ms Gepp noted that on the evidence adduced in relation to appropriate limits on compensation from an ecological perspective, it was open to the Court to accept as it did the evidence of Ms Myers and Dr Lloyd.
[182] I find no error of law in the Court’s risk assessment under s 32(2)(c). The Court reviewed the evidence, such as it was, preferring the evidence of certain witnesses to that of another, and made its (factual) assessment of risk.
Appeal ground 7 – failing to apply the correct legal test
[183] As a final point of appeal, Oceana asserted that the Court had failed to apply the correct legal test by not assessing what formulation of the offset and compensation policies is the most appropriate way to achieve the purpose of the Act.
[184] While Mr Christensen in his written synopsis addressed some submissions to this point on appeal, he conceded in his oral submissions that this does not constitute a stand-alone ground but was in the nature of a “catch-all”. He conceded that for Oceana’s appeal to succeed, it would have to establish one of its earlier, more specific grounds of appeal (which have previously been determined in this judgment).
[185]This point on appeal is therefore discussed no further.
Outcome
[186] Oceana’s appeal will be allowed to the extent identified at [20]–[24] in relation to the wording of policy 5.4.6(c). The appeal will otherwise be dismissed.
[187] The Otago Regional Council and the Royal Forest and Bird Protection Society of New Zealand Inc, for costs purposes, are to be regarded as the successful parties in this proceeding. There will be an order that the appellant pay their costs and disbursements, but with quantum reserved.
Orders
[188]I order:
(a)The Environment Court’s confirmation of policy 5.4.6(c) in the proposed Otago Regional Policy Statement is quashed by reason of its reference to “rare or vulnerable species as defined in reports published prior to 14 January 2019 under the New Zealand threat classification system”.
(b)The consideration of the proposed Otago Regional Policy Statement is remitted to the Environment Court for amendment so as to provide a workable definition in relation to affected species.
(c)Except to the extent identified in orders (a)–(b), the appeal of Oceana Gold (New Zealand) Ltd is dismissed.
(d)Oceana Gold (New Zealand) Ltd is to pay each of the Otago Regional Council and the Royal Forest and Bird Protection Society of New Zealand Inc their costs and disbursements of the appeal. The quantum of such costs and disbursements, if not resolved between the parties, are to be determined on the papers. Any applicant for the fixing of costs is to file and serve any memorandum (10 page limit) with schedules of calculations of costs and disbursements within 10 working days from the date of this judgment. The appellant is to file and serve any memorandum in response (10 page limit), with schedules of calculations of costs and disbursements within 10 working days after service of the application for costs.
Osborne J
Solicitors:
Anderson Lloyd, Dunedin
Ross Dowling Marquet Griffin, Dunedin S Christensen, Barrister, Dunedin
S Gepp, Barrister, Nelson Meredith Connell, Auckland Crown Law, Wellington
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