Resource Management Act Reform – death by a thousand cuts

The first months of 2016 have seen a deluge of environmental proposals from the government, some good some bad. But the Resource Management Act (RMA) is the granddaddy of all environmental legislation. In 2013 National and ACT tried to kill it off for good and failed to get the approval of the Maori Party and United Future. This time the government is proposing a much more nuanced reform but it still looks like death by a thousand cuts. Submissions close on March 14.

Taking care of NIMBYs
The thorns in the side of development are the NIMBYs (Not In My Back Yard) – people resistant to change in their areas, even when it’s in the public interest. The processes of public notification and appeal under the Resource Management Act have at times left developers in a quagmire of red tape. At their best councils tend to be risk averse, and the threat of litigious NIMBYs only makes them more introverted.

We have seen this issue play out this month over Auckland’s Unitary Plan. Lack of supply is one contributor to Auckland’s housing problem, but NIMBYs have prevented the council responding to the demand by rezoning areas for increased density. The result will be that Auckland continues to sprawl in a search for cheap housing but this will be a false economy as transport costs to commuters and ratepayers will balloon.

The proposals being put forward by the government will reduce the power of NIMBYs to quash development. This idea will no doubt be applauded by the National and ACT voters of central Auckland – until it is applied to housing developments in their backyard.

Removing checks and balances
Reducing the power of NIMBYs is a good step. However, the same public notification and appeals processes abused by NIMBYs are also used by groups to advocate on behalf of the environment. Sometimes it can be hard to tell a NIMBY from a Greenie.

That is why public interest groups are worried about this RMA reform. It is being presented as a proposal to reduce red tape, which is no doubt a good thing, but what checks and balances remain to ensure the environment is protected? It may not be the massive culling of environmental provisions that was proposed last time around; instead this RMA reform looks like death by a thousand cuts.

Crooked process
Why do we need checks and balances at all? Why doesn’t the process deliver the right outcome?

For big developments, applicants have to get an assessment of environmental effects (AEE) done, and to do this they usually engage a consultant. However, because the consultant is engaged by the developer, of course the consultant is under pressure to provide a certain answer. Not that we are questioning their integrity, of course, just that the process gives rise to certain incentives.

As we saw in the movie ‘The Big Short’ this was the same issue faced by ratings agencies in the lead up to the Global Financial Crisis. Banks got their junk bonds rated ‘A’ by the ratings agencies, because if they didn’t give that rating they would go to the competitor.

Back to the RMA. Under the current process, to balance out any bias in the initial assessment, other assessments are often done. Opponents often end up undertaking their own assessments, even Councils that lack the necessary expertise themselves often end up engaging consultants so that they can check the assessments they have received. It is certainly a wasteful process.

No matter your perspective – developer, NIMBY or greenie, we can all agree that we want a simple, effective process that delivers the right result. We should all want development that leaves society better off overall and doesn’t compromise future generations.

What could be done? 
If the government is going to proceed with reducing the opportunity for appeals to blunt the influence of NIMBYs, they need to install new, simple checks and balances to ensure that the right decision is made for the environment. Here are some ideas (with thanks to EDS’ latest report):

1. Environmental assessments need to be independent. For example councils could undertake assessments or engage consultants to do them. Of course, some will argue that councils themselves are not always independent. One issue is whether councils have the skills inhouse to engage appropriate consultants and interpret the results. Perhaps smaller councils need to band together to ensure they have the scale and specialist skills to make the right decision. Larger developments could be overseen by the Environment Protection Agency.

2. The principle guiding development should be ‘no net environmental loss’ –  that is, any development leaves the environment better off overall. Where developments will have a negative impact on the environment, there has to be a simple way of assessing the damage. As long as it’s not rare or unique environment that’s been damaged, the developer should be able to “offset” that damage by improving the environment in other ways. That way the development can proceed if it still stacks up with the true environmental costs included. Many councils already do this but we need to do it in a much better way. This requires having some clear national guidance on damage and how to offset it, and having a ready market of quality assured offsets that the developer can purchase.

3. Finally, we need some fundamental changes to support these ideas. We need much better environmental monitoring so that we can see what impact developments are having on the environment. Often the impacts of developments and conditions of consents are not checked after the fact. We need to make sure that the conditions of consents are being met. This particularly applies for offsets, as these have traditionally been abused in New Zealand and around the world to "greenwash" a development rather than deliver real environmental benefits. Part of this will probably require a central auditing or appeals function to make sure that councils and developers are actually fulfilling on their deals.

The final question we must ask ourselves is how many times we should tinker with the RMA before we need to take fresh look and start again at the way we do development while protecting our environment.

Geoff Simmons is an economist working for the Morgan Foundation. This post first appeared on Gareth's World.

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