The AQA is concerned with new National Environmental Standards for Freshwater Regulations 2020 as it relates to the minerals and aggregate sector (and earthworks generally). This is a precis of a document the association wrote in conjunction with Straterra, that provides the background to those concerns and some proposed solutions.
The regulations were consulted on last year and they came into force just prior to the election in September. The industry was largely taken by surprise as the outcome was not one which was considered as part of the consultation and nor was it foreshadowed in the May 2020 Cabinet paper.
The country’s natural wetlands have been significantly reduced since pre-European times and now the current Government objective is to preserve the remaining wetlands.
This needs to be done without prohibiting extensions to existing quarrying operations and/or the ability for future quarries to be considered on their merits.
At the moment under the new regulations “mineral and aggregate extraction” along with earthworks generally (Reg 53), will be prohibited on land deemed to be natural wetlands.
The definition of natural wetlands itself has created uncertainty due to its breadth; unintentionally capturing many small patches of wet grass and wetland areas dotted throughout New Zealand.
All wetlands are treated the same under the regulation. In reality, wetlands can vary from a damp patch of grass to a wet area with common indigenous vegetation right through to a lake and its margins supporting significant flora and fauna, and so have a range of ecological values and sizes.
Under “prohibited” activity there will be no opportunity to assess the merits of proposed quarrying projects relative to the conservation/environmental value of the land where it is to occur.
And no opportunity to consider offsets or compensation for disturbance to wetlands.
Areas impacted in the short term include expansion at Flat Top Quarry and a new pit at Drury Quarry, both in Auckland. And there are potentially many quarries across the country affected directly because of the National Policy Statement – Freshwater Regulations (NPS FM).
Unchanged, the new wetland regulations will mean New Zealand will need to, over time, import aggregates and limestone, foregoing opportunities including for the net zero carbon economy.
The new regulations have already impacted the industry. The Auckland Council had to return to Flat Top Quarry’s extension application back in September last year because an ecologist advised it of a small wet area in the middle of the site that was deemed “wetland”.
Backroom process leads to changed wording
The Government consultation on the new regulations started with the release of a discussion document and a proposed NPS and National Environmental Standard (NES) in September 2019. Under the consultation draft of the NES, earthworks activities in wetlands and their margins were to have discretionary or non- complying status (unless they were expressly for drainage where they were to be prohibited).
In the final document (released on 3 August 2020 for promulgation on 3 September 2020), the definition of natural wetlands was amended and the activity status for all earthworks was changed to ‘prohibited’. At some point between the release of the proposed and final NES, and post Environment Minister David Parker’s Cabinet paper there appears to have been a change
to the NES provisions with no consultation with those who are materially affected by it. Information released by the Government under the OIA suggests that these changes occurred without adequate evaluation or consultation.
If this change had been properly evaluated and put to the industry for comment then the unintended consequence would have become apparent.
Regulatory Impact Analysis
The Regulatory Impact Analysis (RIA) included a cost-benefit analysis of how the proposals would impact on extraction activities. It would seem this analysis led to decisions to change the activity status to ‘prohibited’. But, the cost-benefit was inadequate for the following reasons.
The appropriateness of the data set of locations and sizes of wetlands used in the analysis has been questioned as the definition of wetlands used may not have corresponded with the RMA definition. It relied on an overseas study of the value of ecosystem services provided by wetlands. There was no evaluation of whether that valuation was appropriate to all wetlands within the RMA definition.
It used as a value of minerals, a figure of around $600 million based only on existing mining permits for coal reserves that would be affected by the proposals.
Not only did this overlook those reserves not currently subject to a mining permit, it also ignored all other minerals i.e. gold, aggregate, iron sands etc. Data provided by OceanaGold showed that the proposals would prevent access to around $1 billion of gold at Macraes alone yet this was not incorporated in the analysis.
The RIA also understated the area of land affected by the regulation. It estimated this to be only three percent of the total area of natural wetland but this estimate included only land under coal mining permits.
Also, most importantly, the way quarry developments are configured on available land parcels means small areas of wetland can disrupt much larger areas of development. Wetland areas are dotted in their millions around the landscape. A single wet area (which would meet the definition of a natural wetland) could sterilise 150 million tonnes of aggregate resource, as is the case at Drury Quarry, for example.
Definition of natural wetlands
The association says there is merit in clarifying the definition of a natural wetland (including, perhaps, a clarification of ‘improved pasture’, to remove ambiguity and reduce uncertainty.
There may also be scope for reducing uncertainty by amending the published implementation guidelines, though this is not a statutory instrument.
However, changing the definition is only part of the solution needed. The issue of sterilising current and future quarries on non-urban land must be addressed. These projects should be able to be assessed on their merits; and by applying the effects management hierarchy which would enable a net overall improvement in wetland values through offsetting and compensation etc.
“The ‘effects management hierarchy’ that enables offsetting and compensation to occur, is an important part of the resource management regime. Aggregate extraction projects need to be considered case-by-case with access to the ‘effects management hierarchy’ allowed if rational and efficient development is to occur. Economic mineral deposits are locationally constrained. Extraction can only happen where the minerals and aggregate are physically located and where the industry is able to access them cost-effectively.
Because of their scarcity and the cost of extraction, quarrying activities have a relatively small footprint across the country. It is also important to note they are a temporary use of land, with the land either returned to its pre-quarrying state, or used for other commercial or community activities once rehabilitation is completed.
Not all wetlands are pristine and of high value. A case-by-case approach that enables a consideration of the value of a wetland when assessing proposed industrial activity with adverse effects on them is needed.
Offering a solution
By changing the activity status for earthworks to ‘discretionary’, applications can be considered on a case-by-case basis and the effects management hierarchy can be applied to produce the best possible outcome.
A discretionary activity status would require resource consents to be applied for, and this sets a high bar for applicants who would have to show they are able to avoid, remedy, mitigate, and/or offset, and/or compensate adequately for the environmental effects of earthworks on natural wetlands.
This way our highest value wetland areas would not be put at risk under these safeguards because in practice no proposed off-setting or compensation would be adequate to meet the purpose of the RMA.
In addition to the change in activity status, we need to clarify the definition of a natural wetland so that it doesn’t capture exotic dominated wet areas (i.e. common rush, buttercup etc) including, perhaps, a clarification of improved pasture to remove ambiguity and reduce uncertainty.