An aquaculture Bill, property rights, and cans of worms
Making a practice of writing each week is proving not to be easy. Not if you want to keep it at least passably earnest, stay away from hot takes, or stray into areas where you’ll need to do significant research and thinking. I’ve also been unwell for a while, which doesn’t help.
All this sense has had me meditating on the properties of specialisation and everything that goes around it. The good and the bad. Readers will no doubt breathe a sigh of relief to be spared those thoughts for now.
The Aquaculture Bill
For this week I’ll just make a short note on the Resource Management (Extended Duration of Coastal Permits for Marine Farms) Amendment Bill, or Bill for short. It has been in the Parliament’s Primary Production Select Committee this week.
The Bill is the latest in a series of aquaculture amendments to the Resource Management Act 1991, or RMA. These amendments go back to late 2004 and 2011 among many other changes. All aim at making better provision for a New Zealand aquaculture industry.
The background to the latest Bill is slightly murky. Undoubtedly the trend worldwide is that seafood industry growth is located primarily in the aquaculture sector rather than with harvesting wild-caught fish. It is unsurprising that this trend has found a local political champion, or that the Bill has its origins in the National – New Zealand First Coalition Agreement (see page 5). Of course, the Bill also has something of a taint through Minister of Oceans and Fisheries Shane Jones’ well-known friendships with the seafood industry and the unfortunate coincidence of seafood industry donors.
So what will the Bill do?
In brief, if it becomes law – which it will – the Bill would automatically extend the duration of all coastal permits currently issued under the RMA that authorise aquaculture activities. It will extend this duration by 20 years, but not beyond 2050. This changes the default position that a marine farm consent can be granted for up to a maximum of 35 years.
There will be very limited consent review powers added over and above the RMA’s standard review powers, which are themselves quite limited.
It is worth a brief interlude to say that these new review provisions start with the amusing numbering of section 165ZFHI. Such has been the level of tinkering in resource management law since 1991. And such is MPs’ faith in the power of changing law to solve problems, rather than better using or implementing what law we have.
But back to the Bill. What is the character and size of what it will do?
In short: quite basic and quite big. It is an attempt, in one fell swoop, to “lock in” all presently consented aquaculture – an entire industry – in its present form until 2050. That’s got to be an extraordinary attempt in anyone’s books, whether they like what it’s about or not.
The original consultation phase on the Bill matched this extraordinary character. It was run by Ministry for Primary Industry, or MPI, officials and was – to put it mildly – compressed. Community and environmental submitters were given a 60 minute session at which to air their views. Officials spoke for about 35 of those minutes, then stalled for time on responses to questions. Submitters were given a few days to respond in writing to a single page proposal. Those days were over a weekend. Stakeholder groups were separated out, so that there was no ability to hear what others were suggesting, or what officials’ reactions to those suggestions were. For this MPI officials gave the improbable reason of “privacy”, indicating little familiarity with the Privacy Act. To be fair, though, officials ultimately appeared uncomfortable running such a poor process, and were clearly put up to do so by Ministerial or high official directive.
I got a bit of stick for being too harsh on Fisheries New Zealand officials last week, and I’m doing the same again here. I hope readers can see I am being hard on the issues and not the people, and that the examples warrant it.
The Bill’s origin and surrounding processes could all form rich veins of enquiry, but today let’s stay with the substance of the Bill, the extension of aquaculture permits.
What did others think of it and what do I think of it?
Submissions on the Aquaculture Bill
Others have made good (and relatively boilerplate) points about the substance of the Bill. For example, the aquaculture industry supports the Bill for reasons of investment certainty and the like. Many environmentalists, for example EDS and Forest and Bird, oppose the Bill for reasons of uncertainty about long run environmental effects among other reasons.
In Marlborough, the region had long been working through its process to finalise the Proposed Marlborough Environment Plan, or PMEP. There had been two (or three) major “variations” in the PMEP process dealing with aquaculture – one for “marine farming”, another for “finfish farming” and another still for “ecologically significant marine sites”. All of these PMEP processes took a number of years. As such, Marlborough submitters on the Bill have often expressed frustration and more about the Bill. They say the integrity of PMEP work, and the effort they have put into it, has been undermined.
The Bill/Marlborough situation is a very good example of how making high-level and long-term changes to consent settings can undermine confidence in planning processes – as I discussed on the Fast Track the question becomes “why plan at all”?
Brenty’s Two Cents
I was involved in an ELI submission on policy work underpinning the Bill and commented on some others’ work in the same process. But I was not involved in any submission on the Bill itself. Unfortunately at the time of writing the Parliament website is not displaying submissions, so I’m in a limited position to think more about others’ views on the Bill either.
So my personal view is pretty prosaic. No matter how desperately someone might want investment certainty for some industry, or want to give it to that industry, such certainty cannot be had by the stroke of a pen.
In that sense the Bill represents a wishful reach on Jones’ part. It perhaps also indicates an aquaculture industry out of real ideas for innovation, or any idea whatsoever of its place in the national economy beyond “at least as big as now”.
Property rights, 35 year consents and Cans of Worms
Wishfully reaching is often pretty benign. And I feel quite sure the Bill’s reaching will prove largely to be – at least as far as physical world consequences go. If there are any significant possibilities of unintended environmental consequence from the Bill, there is simply no way extended consents will be allowed to last for 20 more years, or out to 2050. Why not? Well, Hon Rachel Brooking unambiguously said a future Labour government would review Fast Track consents case by case. That seems almost certain here too.
As the Sufi proverb goes, and with respect to common environmental or even progressive industry concerns about the Bill: “this too will pass”.
Unfortunately though, the Bill may have big non-physical consequences, which few seem to have noticed. The undermining of confidence in public processes in Marlborough – the “why bother planning?” uncertainty there – gestures at the shape of these consequences.
From here I’ll just talk about one such consequence: that the Bill could help upset relatively stable New Zealand concepts of property law, right down to their foundations.
“Wow,” some might say, “that sounds bad. How is that?” Let’s go back to basics to see why.
This idea starts by noticing that the Bill makes an ad-hoc change to the maximum 35 year consent durations available under the RMA, for a single set of activities. I am not aware of any analysis on the Bill into the implications of this (literally) once in a generation change. This is a startling analysis to be lacking, because previously a maximum 35 year duration across all activities was never in question. The position had not been altered at all since 1991, and the RMA even went so far as to convert water rights with other durations into 35 year rights (albeit that issue, mostly affecting Otago, has not been satisfactorily resolved).
The RMA is structured around property rights. Ultimately it is only through misunderstanding or political motivation that you will hear otherwise. The Bill will make a change to a core tenet of this structure.
To explain this, section 9 of Act allows anyone to use land as they wish unless various RMA documents say you can’t. (Of course, many documents like city, district or regional plans do restrict the use of land in various ways – and many say much too much. That’s a feature or fault of the documents and not of the structure of the RMA. In an earlier post I explored some reasons why RMA implementation – and this includes making plans – has gone awry).
Rightly, wrongly, whatever one thinks, section 9 does reflect exactly where the English law tradition about property rights in land had reached when New Zealand inherited and continued it.
That same English law tradition has always had different property laws for other “resources”, the more different from land law the more difficult those resources are to “enclose”. While there are of course complexities aplenty, and while the RMA and predecessors certainly changed much of this English common law, the old arrangements are reflected in the RMA’s basic structure for common pool resources too. For these, we find the opposite position to section 9’s arrangement for land. For example, on the take and use of water, discharge to air or occupation of the ocean.
With these common pool resources you cannot do anything unless one various RMA documents – plans and such – say “you can”.
Again allowing for complexities aplenty, this English law tradition has the basic view that a person cannot “own” natural running water as in a river, the atmosphere or ocean in the same way one can “own” land. And of course, if we can’t own these things, the most we can expect is some temporary right to do something with them.
Which is exactly why the RMA provides that consents to use these common pool resources are not real or personal property, and that consents to use them are not indefinite. Consents for taking and using water from a river, discharging a smokestack into the air, or occupying the ocean with a marine farm last for a maximum of 35 years.
But where did 35 years come from, specifically? Why not 10 or 50 years?
Of course it is intuitive that this maximum duration couldn’t be too small. If it was, no one would invest in anything needing access to those resources. Similarly it couldn’t be too long, or else there would be too much strain against the “not property” notion. And when these resources become heavily “allocated”, as in today’s world, there is too much potential for unforeseen and adverse environmental and other effects.
But that’s not all there is to the 35 year length. On the specific duration, we find that we get into deep water very fast. It turns out that the maximum 35 year consent duration came as an agreed settlement between the Crown and Māori following famed “Lands” case: the same court decision that began to articulate Treaty Principles in earnest.[1]
By way of brief explanation of how this agreement came to be, the situation surrounding the Lands case was that a group of Māori had established or could establish customary interests in various resources including land and freshwater. If these customary interests were recognised by the English, and now New Zealand, common law, and they had not bee “extinguished” by statutes made in Parliament (which extinguishment faces a high test[2]) they continued to exist. If these customary interests were not freely sold or alienated, and if Māori could satisfy various evidential tests about their ongoing use of the resources, the resources also would be protected by the Treaty of Waitangi. Any Treaty breach might be remedied in part by the return of Crown assets.
But in the late 1980s, some Crown assets were given to the State-Owned Enterprises, or SOEs, being set up at the time. Those SOE assets might be irretrievably lost because SOEs have to operate like companies, and might sell them on. They would then be unavailable to help remedy Treaty breaches, and the claimants in the Lands case said this was not lawful.
The Lands case was not really “decided” but instead settled out of Court. Its “land” aspects were resolved by the development of the “clawback” regime in the SOE Act (see sections 27-27D and Schedule 2A). Its water aspects were resolved by limiting the Crown ability to grant water rights – through the Water and Soil Conservation Act at the time, and later the RMA – to 35 years.
Through that episode it ought to have become clear that Māori would not readily cede customary interests in the resources remaining to them other than freely. And for a while it may have been that the Crown had seriously absorbed that lesson. For example, the opportunity to resolve issues surrounding Māori customary fishing interests was taken in the “Sealord’s Deal” of 1992, as explained here. But this is about the extent of “successful resolution” of customary interests “issues”. The record in other areas in the 30+ years since then is not encouraging (I recoginse that every word in inverted commas above is pretty contentious).
Similar issues would come up when the Court of Appeal ruled in 2003 that Māori might establish customary interests in the foreshore and seabed on satisfaction of various evidential tests.
Of course, the political consequences of that ruling included Clark Ministry legislation in which “the Crown owned” that land: the Foreshore and Seabed Act 2004. Then there were large hikoi on Wellington, the “Orewa speech”, the near toppling of the government at the 2005 general election, the formation of the Māori Party, and hence the wholesale change in the entire electoral landscape. In 2011 came Key Ministry Legislation in which neither the Crown nor any other person owns, or is capable of owning, the same land – but through which Māori can establish customary interests through various processes involving satisfaction of evidential tests. This is the Takutai Moana Act. The practical consequences of this Act continue to play out today – causing both a burden for applicants and Courts alike, and uncertainty for everyone else. The latest litigation in this saga has attracted significant interest.
A parallel saga has played out in relation to Māori customary interests in freshwater, and it remains unresolved today. This issue started with the Lands case itself, continuing though the decisions to partially privatise Mighty River Power in 2012 and 2013 (with associated litigation). This issue animates Ngai Tahu’s High Court proceedings seeking recognition of customary interests in South Island / Te Waipounamu freshwater. In my view there is also a good case that politicians recognise this issue as potentially politically explosive, and that it will be politically almost untenable to entertain a Sealord-style deal for freshwater. This will be impossible because money will become involved. They have therefore attempted to resolve it among other initiatives though “co-governance” in “Three Waters” – even though reticulated water is regarded separate to water outside tanks and pipes etc (see here, and ctrl-f “water”). So it has been that Key said “no one owned the water”; Mahuta couldn’t really explain her rationale convincingly at all; and now even Judith Collins appears to be struggling.
Readers will have noticed that we appear to have strayed a long way from the maximum 35 year duration for consents to use common pool resources.
The point of the lengthy digression, of course, is to illustrate that the consent duration issue goes to the very heart of issues of Māori customary interests. Even if no one really knew it or would admit to it, it seems that there has been a very good reason no one has altered this maximum duration in the years since the RMA’s passage in 1991, and why it has been left constant across consents for all resources.
In making an ad-hoc change to the provisions for marine farm consent durations, is the government tacitly or even unwittingly opening the possibility that maximum durations for other resources might also be lengthened?
Is it plausible that the agricultural industry – much larger than the marine farming one – might indicate similar concerns about certainty for irrigation investment?
What then if agricultural industry interests suggested lengthening maximum durations for water consents?
What good response would the government have, having abandoned the long-held blanket position?
Of course, issues of Māori customary interests will continue to play out whether or not the Bill makes its change to marine farm consent durations. But the linkages between the issues are close and undeniable.
The question is whether and how the Aquaculture Bill, for which functional alternatives are available but appear not to have been considered, fits into responsible Crown stewardship of Māori customary interests issues. Those issues ultimately go to the foundations of New Zealand property law, and to the general certainty we enjoy as a result of that law.
And just as in Marlborough, without solid foundations in this area we might indeed ask “why plan at all?”
[1] See New Zealand Māori Council v Attorney-General [2013] NZSC 6 at [18], discussing New Zealand Maori Council v Attorney-General [1987] 1 NZLR 641 (CA).
[2] See for example Attorney-General v Ngati Apa [2003] 3 NZLR 643 (CA).