NZ Initiative's Jason Krupp says the 'what’s yours is mine' rules stymie economic development in the places that need it most

NZ Initiative's Jason Krupp says the 'what’s yours is mine' rules stymie economic development in the places that need it most

By Jason Krupp*

If you wanted to sum up the madness of mining regulation in New Zealand the tongue-in-cheek phrase “what’s yours is mine and mine’s my own” is a great fit, as judged by a situation playing out in Northland right now.

Minewatch Northland, an anti-mining group, is urging local residents to resist any attempt by Evolution Mining to conduct exploration work near Whangarei over concerns it could introduce heavy metals and other chemicals into the waterways.

The concerns themselves are fair enough. Residents must have a say in the development that happens in their regions. New Zealand is a democracy after all, and one with a high regard for the quality of the natural environment. Long-term environmental and health considerations also need to be factored. 

But before these issues get thrashed, let me make a prediction. I foresee that it is only a matter of time until Minewatch Northland challenge the permits, process, or land use consents in court in a bid to prevent the project from going ahead.

Once it hits the justice system the firm, and most likely the Whangarei District Council too, will be tied up in red tape for months, adding to the operating and regulatory costs for both parties. Should these costs prove high enough, Evolution Mining will walk away to seek easier projects elsewhere.

If the court sides with the mining firm, Minewatch is still likely to consider it a win to some degree, because it will have served as a warning to other prospective miners that Northland is not an easy place to do business.

Either way, there is very little cost to the anti-mining group, since courts rarely award costs on these kinds of appeals. If the court does award costs, as an asset-less incorporated society the group will simply dissolve when the bill falls due.

In short, the anti-mining group want to tell the property owner what to do with their property without actually owning the property.

More critical readers will of course take any prediction with a good pinch of scepticism. But this prediction is based on the experience of New Talisman Gold Mines, which recently staved off a similar environmental challenge from Project Karangahake Society Inc.

The firm was granted consents by the Hauraki District Council to begin bulk sampling in the Karangahake Gorge, an area that has already been mined out extensively in the 1900s, on condition the firm meet strict environmental standards.

Those consents were challenged by the anti-mining group, who skipped the Environment Court, instead filing a judicial review at the High Court. The group alleged the activity would damage a recreational area. These matters were considered in the original consent application, but Hauraki District Council hired two independent consultants to assess the process again. Further lobbying by Project Karangahake also prompted Environment Waikato to hire another consultant to assess whether sufficient consideration had been given to the potential for surface and underground water pollution.

After months of delay and significant costs, all the consultants agreed that the consents had been correctly granted, and that the firm’s activities were unlikely to have a significant or lasting effect on the area of the environment.

In the face of this evidence, Project Karangahake withdrew their application for judicial review. But in his addresses to shareholders at the firm’s annual meeting, New Talisman Chairman Murray McKee noted the group continues to protest the firm’s operations.

What happened in the New Talisman case is not so much a one-off, but standard tactic used by anti-mining groups to stymie developments they object to.

Mining legislation, particularly the Resource Management Act, allows anti-development groups to do so because it does not confront objectors with the costs of their actions. There is the obvious cost of the additional assessments, which some might be seen as appropriate to ensure the quality of the outcome. But in the presence of a robust consenting regime, these can prove to be an additional burden that objectors place on the applicant.

There are also the wider opportunity costs that are often ignored, such as the foregone jobs if the project does not proceed. It should be noted Northland’s unemployment rate stood at 8.9% as of June 2015, 3.2 percentage points higher than the national unemployment rate. Of course it is problematic to link the region’s wider employment malaise with a single project. Yet it is clear that too many objections to development, be it housing or mining, can collectively drag on the wider economy.

The remedy is a robust property rights regime that prevents situations like this from occurring. Or at the very least a user pays regime so that objectors face some of the costs they impose on firms and ratepayers.

If politicians are unwilling do so, as they have been up until now, they can expect New Zealand’s international standing as a destination for mining investment to deteriorate. Currently the country’s Policy Perception Index, a ranking of how mining companies rate regulatory regimes, fell 21 places to 35th according the Fraser Institute’s 2014 Survey of Mining Companies.

In the 2013 report New Zealand is described as “just about close to the hardest jurisdiction [in which to work] anywhere”. That’s a damning indictment for a country that by World Bank measures has a higher natural resource endowment than Australia on a per capita basis, and where the wealth produced from mining could improve the lives of people living in some of the country’s poorest regions.

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*Jason Krupp is a Research Fellow at The New Zealand Initiative, which provides a weekly column for interest.co.nz.

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"New Zealand is a democracy after all, and one with a high regard for the quality of the natural environment."

Correct, however these lobby / "awareness" groups / societies (and I include "Residents Associations" here) are NOT democratically elected bodies.

Regulations are set through processes that are ultimately governed by our democratically elected bodies. Currently these bodies are elected and then subsequently hamstrung in the courts by vexatious unelected persons / bodies that have strong but differing ideological views.

If a person / entity gains resource consent through following processes set by our elected bodies then I find it baffling that undemocratic lobby groups are able to subvert these rights.

By all means, these groups have the right to publicly lobby local and central government to change regulations - but don't allow these groups to retrospectively challenge consents granted, add costs / time, and undermine the rights of those who act in good faith and entirely within regulatory and legal frameworks.

The distillation of your argument is - unelected covert lobby groups are OK, but unelected overt lobby groups are not OK

No... read my unedited post again - my quote was " these groups have the right to publicly lobby local and central government to change regulations"

Emphasis on 'publicly' - i.e. the opposite of covert.

The current methods of engagement for these groups undermine the democratic system.
Their ideological proxies fail to convince the electorate but they still have their way through vexatious claims in the courts.

I have read it again - would it help if I had said the "subtext" of your comment is ... etc

Do you believe the NZ Bankers Association and Federated Farmers do their lobbying in the public domain, whereas, by way of contrast, activist awareness groups have little choice ... ie the difference between overt and covert

Sorry - failing to see where, at any point, there was 'subtext' (implied or otherwise) that I support / condone back-room lobbying a.l.a. Fed Farmers or NZ Bankers Association. Maybe you could point it out for me rather than putting words (or sentiment) in my mouth.

My opening point, which was reiterated, is that our democratic process and rights shouldn't be subverted by any unelected bodies.
That's a pretty consistent position - whereas your 'subtext', if I may, appears to make the following distinction:
Environmental Groups / Residents Associations / Rent-a-mob concerns = GOOD;
Fed Farmers / Co-ops / Business Groups = BAD

Subtext? it's right there at the outset
Your very first sentence sets your criticism in concrete - you criticize only (a select few) publicly visible collectives - but remain silent about highly funded powerful lobby groups who remain in the shadows and do their high-powered dealing out of the public gaze

Seriously, what are you smoking.

Is "lobby / "awareness" groups / societies (and I include "Residents Associations" here)" not a wide enough catch-all? What "select few" groups have I singled out?

All are equally bad and open to criticism - instead of engaging in debate on the actual point I've made you're both attempting to discredit the argument.

Presumably you don't agree with me including awareness groups / societies and residents associations but business lobbies are OK? Are awareness groups and RA's protected species when it comes to undermining democracy? No, they are not.

It was you guys who made the distinction - I think they are all equally bad - just because someone makes entirely unsubstantiated and baseless claims of acting on behalf of the "community" / "all New Zealanders" / "concerned residents" does not make it any less self-serving or more palatable than a naked business interest.

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You seem to either have a misunderstanding of the law - or you are attempting to 'spin' your reporting in favour of a prejudice towards civil society exercising its right to participate in environmental issues and considerations.

For instance, where the Karangahake consents were concerned you stated:

Those consents were challenged by the anti-mining group, who skipped the Environment Court, instead filing a judicial review at the High Court.

The group did not "skip" the Environment Court, rather the consents were granted by the local council under a non-notified resource consent. Had the consents been notified, the group would have had the option to voice their concerns via the RMA process (a local hearings committee first, and an Environment Court appeal following, if decisions made by the hearings committee did not suit either the applicants themselves or those opposed to the applications). But because the consents were granted without such public notification, the public had no chance to receive any information and/.or provide any input on receipt of that information. In a nutshell, there was no public consultation prior to granting the consents - something you suggest must happen in our democracy. So effectively, you contradict yourself there. In the absence of an RMA process, the only recourse for concerned citizens (if they wanted their voice heard) was the High Court via a judicial review.

http://www.stuff.co.nz/business/industries/65272895/High-Court-bid-to-st...

I'm not surprised they didn't go ahead with that case - they are costly (get Bryce to tell you about the HC action costs associated with the Kapiti case recently) and legal advice suggested the 'test' in terms of judicial review was too high (bearing mind mind the HC isn't considering the effects on the environment, rather it is simply able to consider whether the council made the right or wrong call in terms of granting the consents without public notification).

Also of import in the Karangahake case - this is public land that the mining exploration is to be carried out on - so no private land/private right holder issues there. Surely you would agree the public has a right to represent themselves in the interest of land that is in the public domain, don't you?

The Puhipuhi case is quite different - some of the land is publicly owned, some private owned - but even for some of the privately owned land - an exploration permit holder need not get the private land owners approval to access their land (I bet you didn't realise that :-)! See here for the explanation;

http://puhipuhi.co.nz/access-to-land-nzpam-website/

But more importantly with respect to this area of land - the geological features are high in mercury content and it is quite understandable that locals are worried about future mining there;

http://puhipuhi.co.nz/mercury-in-puhipuhi/

And as you say, "Residents must have a say in the development that happens in their regions. New Zealand is a democracy after all, and one with a high regard for the quality of the natural environment. Long-term environmental and health considerations also need to be factored."

So what's your problem then with the residents using the existing legal framework for the discovery of evidence and then the consideration of it? That's the RMA process - are you suggesting perhaps we should use a collaborative model (instead of an adversarial one, which is what the RMA is) - maybe a citizen's jury or something similar?

I am in favour of each mining proposal standing or falling on its own merits - as every environment that might be mined has extremely unique characteristics, as does every mining type/technique. Does that make me anti-mining in your mind, Jason?

Overall I think the RMA and the Environment Court get it pretty right on most decisions on mining that I've read. Mining will never be a risk free or environmental damage neutral activity - and neither does the RMA expect it to be. Where court costs and awards are concerned, again, the EC gets it pretty right to my mind. And let's not forget that although you bemoan a citizen group trust using such a mechanism to avoid payng costs even if they are awarded (and I'd be interested in you providing an example where that happened) - might I remind you of Pike River, a company which did basically that and hence avoided all the costs associated with the legacy issues it created (in fact, you as a taxpayer took them over).

In other words, the old saying goes about people who live in glass houses.

"And let's not forget that although you bemoan a citizen group trust using such a mechanism to avoid payng costs even if they are awarded (and I'd be interested in you providing an example where that happened)"

Didnt something like this happen whereby an "educational" climate denial group challenged NIWA? lost but had no assets to pay NIWA's costs? Interesting of course as such ppl tend to be of the right / neo-liberals just like Jason here.

yes, here you go,

http://thinkprogress.org/climate/2013/11/13/2934861/climate-deniers-pay-...

and,

http://www.radionz.co.nz/news/national/247514/climate-sceptic-action-to-...

What's good for the goose should be good for the gander.

Thanks, well yes that's an example. But I was looking for an RMA/Environment Court example, as the Act has been amended since by National to strengthen the ability for the EC to award costs. I think that was mainly in relation to vexatious claims being taken in terms of the 'supermarket wars' (i.e., commercial competitors trying to hold up one another from establishing new sites). Again ironic that these vexatious claims were mainly to do with commercial (as opposed to public) entities.

Yes, however I find it ironic that a neo-liberal thinktank is bemoaning this behaviour yet its very own political spectrum did just that. Reading the anti-NIWA case it is pretty clear it was a "vexatious claim" especially considering how Exxon's cover up is presently being exposed,

http://www.nytimes.com/2015/10/10/opinion/exxons-climate-concealment.htm...

http://graphics.latimes.com/exxon-arctic/

cigarette anyone?