Environmental / Resource Management

Ports Must Avoid Effects On Outstanding Coastal Environments

In the recent decision Environmental Defence Society Inc v Otago Regional Council [2019] NZHC 2278 the High Court has overturned an interim decision of the Environment Court concerning provision for ports in the Proposed Otago Regional Policy Statement (PORPS). This decision further reinforces the sea change in application of the Resource Management Act 1991 (RMA) since the Supreme Court’s 2014 decision in Environmental Defence Soc Inc v New Zealand King Salmon Co Ltd [2014] NZSC 38 concerning giving effect to directive avoidance policies in the New Zealand Coastal Policy Statement 2010 (NZCPS).

Environment Court decision

The Environment Court had adopted the view of Port Otago Ltd (POL) that the provisions of the PORPS should not require port activities in all cases to avoid effects on the matters addressed by policies 11(a), 13(1)(a), 15(a) and 16 of the NZCPS (the avoidance policies). In essence, the Environment Court found that NZCPS policy 9 was directive and required provision to be made for the safe and efficient operation of ports. This was found to create a conflict with the avoidance policies. The Environment Court therefore had recourse to the “procedural” NZCPS Policy 7(1)(b)(ii) (regarding strategic planning) and decided to provide a policy framework for the reconciliation of the conflict via resource consent processes.

Grounds of appeal

The Environmental Defence Society (EDS) appealed on the grounds that the Environment Court failed to give effect to, and materially misinterpreted, the NZCPS and that the PORPS policy for Ports formulated by the Court was unlawful. EDS submitted that the avoidance policies in the NZCPS formed a bottom line and PORPS provisions must conform to that bottom line. POL argued that the provisions of the PORPS and the NZCPS could be reconciled, and that the avoidance policies of the NZPCS could be interpreted so that the Port could avoid effects as far as practicable and otherwise remedy, mitigate or use adaptive management.

The EDS alleged that the Environment Court had made two errors of law:

  • First, that it erred in its interpretation of the NZCPS and as a consequence reached certain wrong conclusions.

  • Second, as a consequence of the first error, the EC failed to “give effect to” the NZCPS in the PORPS, as it was required to do under s 62(3) of the RMA.

High Court decision

Regarding the first alleged error, the High Court was satisfied that the Environment Court erred by concluding that there was a “conflict” between policy 9 and the avoidance policies. The High Court found policy 9, when carefully examined, was not so directive as to create a conflict. Further, the Environment Court’s proposed resolution of the alleged conflict, by recourse to Policy 7(1)(b)(ii) to circumvent the requirements of the avoidance policies, was an error.

Regarding the second alleged error, the High Court noted that the avoidance policies were prescriptive, which meant that the PORPS must require port activities, including activities associated with safety and efficiency, to “avoid adverse effects” on outstanding coastal sites. The High Court agreed with the EDS that the Environment Court’s finding that adverse effects were to be avoided in “almost all” circumstances was inconsistent with the NZCPS provisions. Similarly, the Environment Court’s findings that the PORPS might give some effect to the avoidance policies, without giving full effect, was an adoption of the overall broad judgment approach rejected by the Supreme Court in King Salmon. The consequence of these erroneous conclusions was that the Environment Court considered itself able to undertake a section 32 cost benefit analysis to determine the effects management framework for the Port: this was wrong in the High Court’s view.

The High Court set aside the decision and remitted the matter back to the Environment Court to reconsider.

Comments

Before the Environment Court, POL argued that giving strict effect to the avoidance policies would mean the following activities would be prohibited:

  1. relocating navigation beacons along the shipping channel when it is widened (pursuant to existing consents); and

  2. disposal of dredging spoil.

While noting that there were evidential difficulties before the Environment Court regarding the effects of these activities, this decision illustrates the potentially crippling effect on infrastructure of a strict requirement to avoid adverse effects. The minority judgment of Young J in King Salmon appears prescient:

[201] On the basis that the s 3 definition [of effect] applies, I consider that a corollary of the approach of the majority is that regional councils must promulgate rules which specify as prohibited any activities having any perceptible adverse effect, even temporary, on areas of outstanding natural character. I think that this would preclude some navigation aids and it would impose severe restrictions on privately-owned land in areas of outstanding natural character. It would also have the potential generally to be entirely disproportionate in its operation as any perceptible adverse effect would be controlling irrespective of whatever benefits, public or private, there might be if an activity were permitted. I see these consequences as being so broad as to render implausible the construction of policies 13 and 15 proposed by the majority.

The Otago decision confirms that there is no flexibility in King Salmon for important infrastructure such as ports and review of the NZCPS or statutory amendment may be necessary to avoid the problematic outcomes foreseen by Young J.

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