Section 70 update

The Court of Appeal has recently confirmed the High Court and Environment Court's decision that section 70 of the Resource Management Act 1991 could still be contravened where a discharge rule expressly precludes the effects found in that section. In addition, the Government has announced changes to section 70 to "unlock the double dividend of higher growth and productivity alongside positive environmental outcomes".

Southland Regional Council v Southland Fish and Game Council [2024] NZCA 499

On 3 October 2024, the Court of Appeal declined Southland Regional Council's (Council) appeal against the High Court's decision that section 70 of the Resource Management Act 1991 (RMA) could still be contravened where a discharge rule expressly precludes the effects found in that section.

In brief, the Environment Court, in hearing appeals on the proposed Southland Land and Water Plan, had determined it was insufficient for a permitted activity rule relating to a discharge to simply prohibit the effects found in section 70 in order to comply with that section. The High Court agreed, and the Council appealed this decision to the Court of Appeal.

The Court of Appeal, in declining the Council's appeal, observed that:

…the central issue is whether the s 70 threshold criteria for a permitted activity rule have been met. In this case, [Council] (and now the Environment Court on appeal) must be satisfied “before” a rule is included that the specified effects are not likely to occur. Both parties accept that to be “satisfied” is the strongest decisional verb in the RMA. As stated by the Supreme Court, this means “to furnish with sufficient proof or information; to assure or set free from doubt or uncertainty; and to convince; or solve a doubt, difficulty”.

The Court then went on to detail the statutory context for section 70, including a regional council's obligations when creating rules relating to discharges. Given this context, the Court held that:

…it seems to us beyond serious dispute that [Council] had to be satisfied that proposed Rule 24 would operationally ensure the permitted activities would not likely give rise to the specified effects on receiving waters after reasonable mixing. Section 70 mandates an outcome and that outcome must be assured by the proposed rule before it is included in the regional plan. Plainly, whether that outcome is achieved by the rule, whatever its precise terms, is an evaluative matter upon which [Council] must be satisfied, before the rule’s inclusion. There may be cases where a rule of this type will be self-evidently effective. Nothing in this judgment should be taken to presume that a particular form or type of evaluation is needed. But in the present case the Environment Court is not presently satisfied that the mandated outcome will be achieved and considers that further evidence is needed. We can see no basis for reaching a different view.

This case reinforces that regional councils must be satisfied none of the section 70 effects will arise before including a permitted activity rule for a discharge to water. Furthermore, the same obligation applies to the Environment Court on appeal when considering changes to permitted discharge rules.

Announcements by Minister for Agriculture on section 70 reform

On 21 October 2024, the Honourable Todd McClay, Minister for Agriculture, announced that changes will be made to section 70 to "enable permitted discharge activities to be managed in a practical way". This will be done as part of the second Resource Management Amendment Bill.

It is unclear exactly what those reforms will entail. The stated goal is to "produce clear rules that unlock the double dividend of higher growth and productivity alongside positive environmental outcomes". In the context of section 70, this could take many forms.

The reform of section 70 is in response to a "recent High Court decision", although it is also unclear which decision is being referred to. The most likely decision is the High Court decision discussed above (Federated Farmers Southland Inc v Southland Regional Council [2024] NZHC 726), although there are many facets to this decision which the Government may seek to address.

For now, we await further details on the reform of section 70 alongside other changes to the RMA under the second Resource Management Amendment Bill.