Environmental litigation predictions

2018 Litigation Forecast

Environmental litigation has continued to rise over the last few years, keeping pace with major plan reviews and development activity. The environmental area continues to become more complex and litigious as new statutory provisions and regulations are tested, and New Zealand’s natural and physical resources come under greater pressure.

In 2018 we see these trends continuing, with litigation related to the consenting of infrastructure and housing being two areas of dominance, together with a continued increase in environmental prosecutions.

Infrastructure

A number of infrastructure projects are progressing through the business case and consenting process, and will continue in 2018 and beyond.

Public infrastructure projects, such as roads, rail, telecommunications, schools, hospitals and prisons typically require designations and the public acquisition of land. A requiring authority can proceed with an application for a designation (called a notice of requirement (NOR)) to the relevant local authority.  Or, if it is a project of national significance, the NOR can be heard in a ‘fast track’ process by an independent Board of Inquiry.

Where private land is required for a public infrastructure project, we foresee an increase in litigation to determine the compensation payable under the Public Works Act 1981 (PWA) as land prices and the amount at stake becomes higher.

Given the number of projects and interests of landowners and occupiers affected, litigation is inevitable.

The Labour-led Government may make changes to the infrastructure project pipeline. For example, it has signalled it will place less emphasis on roading projects, and more focus on non-road transport, such as rail, shipping and public transportation. However, greater expenditure on infrastructure is expected. The increase in funding available for transport projects of regional importance alone will be doubled from $70-$140m to $140-$280m.

Housing

There are large housing developments underway across the country to address New Zealand’s housing shortfall . Residential development is occurring in greenfield areas, and through intensive development in established neighbourhoods.

In the year ended June 2017, there was potentially a shortfall of about 9,000 new homes consented compared to what was needed to meet increased demand from a larger population in the same period.

For greenfield areas needing a plan change to get a live zoning to allow development, there will be litigation relating to zone boundaries and controls placed on the land.

Where intensification is in existing neighbourhoods, the ‘not in my backyard’ mentality will inevitably see some developments proceed to court over issues to do with notification to neighbours and potential adverse effects.

The Government has also announced it will legislate this year to establish an urban development authority that “will cut through red tape and drive forward at-scale, master-planned, new communities”.  While this may not have much impact in 2018, it may significantly change the consenting landscape for some residential development projects in the future.

Enforcement

Promises of greater enforcement of the Resource Management Act resonated with some voters during the general election. The Government has said it will back this promise with funding. Traditionally funding for enforcement is woefully inadequate. It would take both strong leadership within councils and a lot of money to see a large change of direction. We expect a slow but steady increase in enforcement. This could come in the form of a broad role for a greater number of ‘labour inspectors’ to cover health, safety and environmental laws.

In the last 18 months we have seen councils toughen their stance on breaches of environmental law, especially around spills and water. However prosecutions tend to be limited to significant breaches.

Although fines can range up to $600,000 for a corporation (or up to $300,000 or two years imprisonment for an individual) per instance, plus $10,000 per offence per day, penalties have remained fairly low in recent years. Costs associated with mitigation and defence can be exponentially greater than the fines themselves. With a focus on increased enforcement there is potential for an upward trend in penalties.

Typically, environmental compliance is not high on businesses’ agendas until there is enforcement scrutiny. Businesses tend to focus on taking steps to ensure good compliance systems are in place to avoid or reduce prosecution risk. However, a lot of management time and effort can be saved if that happens before the inspector turns up.

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