RRI Green Planning Archives: New Zealand

The Sweeping Change of the Resource Management Act

Dr. Roger Blakeley

Dr. Roger Blakeley is Secretary for the Environment in New Zealand. He was the first permanent head of the new Ministry for the Environment and is now its Chief Executive. With a background in engineering and management, he has held posts in various national ministries, including District Civil Engineer with the Ministry of Works and Development and General Manager of the State Coal Mines with the Ministry of Energy. Dr. Blakeley was also the chair of the OECD Environmental Committee for three years and was with the New Zealand delegation in Rio.

The spiritual philosophy of the Maori, the indigenous people of New Zealand, is based on the holistic view of the earth and the sky, between Raingi, who is the Sky Father, and Papatuinuku, the Earth Mother-- from the center of the earth to the outermost parts of the universe. The Maori believe that it is essential for the life force of the planet that people live in harmony with the environment. The English translation of a Maori proverb is: Cut away the center shoot of the flax bush, and where will the billbird sing?

New Zealand has a vast array of different landscapes of great beauty ranging from the coastal lowlands right up to the mountain range which goes up and down the South Island. We are a land of 3 million people and 63 million sheep (and they have not yet chosen to organize a revolution, in which case they would outnumber us). Unfortunately, three quarters of the original vegetation in New Zealand was cleared during the 1840s, largely for agricultural development. So we do have a lot of lush green fields covered by grazing sheep, cattle and other stock, but the downside of that is that we have quite a large number of endangered species.

To put into context what I am about to tell you about our Green Plan, I think I should make clear that we have one or two minor advantages in our system. We have a unicameral system of government--we have one house of parliament; we are not encumbered by a senate; and we have no states. We have regional councils, but they are not in the federal structure. The majority party forms the government; the executive, including the prime minister, come from the majority party. That is an advantage if you have some great ideas about reform and you want them pushed through.

The History of the Act

What I've been asked to talk about is the Resource Management Act. This goes back to when we first established the Ministry, initially with just myself, then built up to a Policy Ministry of 110 people. At the time, there were a lot of disjointed reviews going on for about 14 different pieces of our major resource law, covering all of our natural and physical resources. These laws had been developed in different times, with different philosophies. They didn't connect; they overlapped. There were conflicts and confusion, and all that created costs and caused damage to the environment.

So, we asked, Why not have a law reform process by which we try to bring all these laws together into one integrated, comprehensive piece of legislation that will cover the management of all natural and physical resources? So we set out on that track in 1987. What resulted in 1991 was the repeal and replacement of 59 acts of Parliament-- all of our resource laws covering town and country planning, minerals, land, water, air, pollution, and so on. All were brought together under this one act, the Resource Management Act, with a single overriding purpose of sustainable management of natural and physical resources. Everything that is done under the Act is required to be consistent with that purpose.

In his opening address, Huey Johnson mentioned the number of definitions of sustainable development. Our definition of sustainable management is defined in the Resource Management Act and, therefore, is enshrined in law and being acted on now. We define sustainable management as the management, use, development, and protection of natural and physical resources in a way or at a rate that enables people and communities to provide for their social, economic, and cultural well-being, and their health and safety, while satisfying three ecological conditions.

Firstly, to sustain the potential of natural and physical resources--excluding minerals because it is difficult to think of them as sustainable in human lifetimes-- to meet the foreseeable needs of future generations. Second, to safeguard the life-supporting capacity of air, water, soil and ecosystems, defining the ecological bottom lines beyond which we will not go. Otherwise, we get irreversible changes in the environment. Third, to avoid remedying or mitigating any adverse effects of activities on the environment. We're saying that people who use the environment-- developers, for instance -- should try to internalize the social and environmental costs of what they are doing. So essentially, we're establishing sustainable environmental limits on what we care about as a community and, within those limits, we'll allow freedom of economic and social choice to achieve these objectives of economic, social and cultural well-being.

It was much more than just repealing and bringing together 59 different acts. We radically changed the philosophy that previously existed in all the resource law that we had in New Zealand in order to make integrated, comprehensive, and coherent decision-making. Previously, we had different agencies that were organized on a resource basis. We had one central government agency called the Forest Service that did all things connected with forests: conservation, commercial production, regulation, and policy. There were internal conflicts of interest between conservation and commercial production. Often, there were confused issues between those different functions, and the trade-offs got resolved within the bureaucracy. Ministers said, "We don't like it. We're not getting good conservation outcomes and we're not getting good return on Crown-owned assets. The system's not transparent. We're going to change it."

Likewise, there were other agencies which dealt solely with land, other agencies dealing with minerals, and energy, and so on. Everything was vertically divided by different resources. But nature doesn't observe these arbitrary compartments that we tend to stuff our laws and our administrative agencies into. In nature, everything is connected to everything else. So we said, Let's cut the cake the other way and develop small policy agencies, which have a broadly integrated function of giving policy advice on how those resources interact. The commercial functions of resource management were spun off into state-owned enterprises and corporations, which are subject to the same laws of the land as any other private operation. The conservation functions for managing our national parks, etc., were all grouped together in one agency with clear conservation values.

This idea of bringing together comprehensive and integrated decision-making was absolutely fundamental to the new approach. Also fundamental was a de-evolution of responsibility down to the lowest level possible in terms of the community of interest. At the time that we were reforming the Resource Management Act, we also ended up reforming all of our local government. We had about 1,000 units of local government, right down to the local dog catcher, and it was pretty inefficient. Our reform brought all that together into 100 units.

We established 14 regional councils--on the basis of ecological boundaries. That is, natural river catchment boundaries. It seemed entirely logical and sensible to us for every regional council to have its boundaries based on one or more natural river catchments, because their fundamental functions were resource management under the Act. It took some persuasion to achieve that, but our experience has confirmed that it was the right decision.

Another radical change is that our previous laws, such as our Town and Country Act, were prescriptive legislation--prescriptive in the sense that a centralized bureaucrat could dictate that one activity goes here and another activity goes there. Farming here, let's say, forestry there. But we're saying that what is really important is to try to identify the sustainable environmental limits that we care about as a community. Let people have the freedom of social and economic choice within those limits, because that is going to be good for the environment and good for business as well. And it's going to ensure that the sustainability criteria is achieved. For business, it provides incentives for innovation and efficiency because it's based on the performance standard approach rather than prescribed technology.

Another feature of the Act is that any regulation, by law, must be shown to be necessary and to be the most effective. So there is a provision that says that you have to do a test on what is the most cost-effective form of regulation -- be it direct regulation or economic incentives or economic instruments like taxes or charges or market mechanisms. Or it might be an information provision. Or it might be based on voluntary action. This provision really changes the mindset of the planners at the various levels from following the rule book to essentially being policy analysts, deciding what's the best solution to a problem. And the idea behind it was to try to get the best outcome at the least cost so that it would reduce the overall costs of regulatory compliance.

Also, the Act requires regional policy statements to be prepared at a regional council level. There is a statutory requirement for consultation with the communities so that there can be community involvement in developing these policies and plans. That also provides greater certainty for the business community. Much stronger enforcement measures were put into the Act so that now board members of companies or managing directors and chief executives carry personal liability for their actions under the Act. Anny breach of the Act could, in the extreme, result in fines of up to $200,000 and imprisonment of up to two years. I have to say that this seems to have changed the incentive structures a little. My business colleagues say, "You'd just be amazed at how many more memos have gone out from chief executives and managing directors and boards to all their staff about environmental aspects of management since the Act came into effect."

We have a Treaty of Waitangi that was signed in 1840 between the British Crown and the chiefs and tribes of the Maori people. It is, in a way, a founding document for New Zealand. It establishes certain rights and entitlements of the Maori and obligations of the Crown. Our Resource Management Act requires that issues of Maori and their culture and traditions, ancestral lands, water sites, sacred burial sites, and many other treasures have to be taken into account as part of any action under the Act. It's a matter of national importance. Section 8 requires that decision-makers must take into account the principles of the Treaty of Waitangi, so it is legislated that the rights of the indigenous people are respected.

The Scope of the RMA

Let's go now into the wider context of our Green Plan. The Resource Management Act is the linchpin of our Green Plan. And it's not something that is just words on paper. It is law; it is a requirement; it is being implemented now. It has, along with the taxation law and the Companies Act, the greatest influence on investment that involves any form of natural and physical resources in New Zealand.

But it is important to see the Resource Management Act in the context of government policies. For example, we try to visualize the Act as an essential linkage between economic, social and environmental policy. For our Ministry, we've defined environmental policies as having the objective of sustainable management of the environment. There must be linkages to economic policy, which can have objectives such as efficiency and prosperity and includes macroeconomics, fiscal, and microeconomic policy. There must be linkages to social policy, which has objectives such as equity and social justice and includes functions of government like redistribution, health, and education. What has too often happened in the past is that governments have single-mindedly driven down one of these segments -- usually the economic and fiscal policy because that happened to be the crisis of the day-- without taking into account the linkages and impacts on social or environmental policy. It would be folly to drive down an economic policy route without thinking about the social and environmental implications and designing policy for them; it would be just as wrong to drive down the environmental policy route without thinking about how to integrate it with economic and social policy. Sustainable development, you could say, is the strategy of government as a whole-- it's the national strategy. It is important how we see the linkages of all the activities of government as an overall, coherent strategy for the nation.

So, in terms of this interrelationship between the environment and the economy, we have been working very hard to understand that the two are not mutually incompatible and that good environmental policy is, in fact, an integral part of a successful economic development strategy. Some people still seem to think that high environmental standards are just the costs of the bottom lines of firms and that they inhibit our economic growth. We say, "Not so." There are plenty of examples where there are "win-wins" for the environment and the economy. For example, these days we're increasingly seeing high environmental policy demands from consumers.

Seventy-five percent of New Zealand exports are from agriculture, fishing, forestry, and horticulture. We depend on our international clean, green image as an important part of marketing our products. In his study in New Zealand, Michael Porter of Harvard University concluded that high environmental standards in fact trigger innovation and encourage industry to find better and more efficient ways of achieving desired environmental standards. Energy efficiency and waste management, through waste minimization at the source, are great examples of not only improving the bottom line costs of the firm, but also putting less waste in the environment. Companies like 3M in America have had spectacular success by aiming for 100% reduction of waste volumes. In the process, they have saved themselves $100 million in the last 15 years.

The growth of farming, horticulture, forestry, and fishing requires clean water, sustainable land use, and low contamination from industrial pollutants. And these days, I'm pleased to say, people in our businesses are seeing environmental policy as integral to quality management. Environment and economy are coming together in a way that we have not seen before, and in New Zealand we are certainly pushing it very hard with our business colleagues.

Long-Term Strategy

New Zealand's government has, in the last few months, released a long-term strategic plan for the country. It's called Path 2010, and it takes a view of the next 17 years and where the country should be going in terms of the economy, social and environmental policy. This plan sets out the values that we as a nation have and how we intend to put those into place. We are in the process of developing the Environment 2010 strategy, which elaborates on how the environmental strategy hooks into the overall strategy of government. Of course, the Resource Management Act is the linchpin of this.

We have tried to take a holistic view, not just in the management of resources, but in terms of the whole economy. Our plan is essentially based on a model which the World Bank produced in the 1991 World Development Report. At that stage, it was really a two-dimensional model based only on economic growth. We've developed it out into other dimensions. Economic growth may be important, but it's not an end in itself. It's there for a purpose--quality of life for people.

We've developed a model with four conditions for achieving overall quality of life for New Zealanders. These conditions are economic growth, environmental quality, social well-being, and international security. There are a whole lot of complex interrelationships between each of these conditions that need to be considered to achieve an overall outcome of quality of life for New Zealanders. This can be expressed by simple terms such as income, jobs, health, education, housing, security of personal property, environmental quality, and so on.

In this model, we've also focused just on the environmental quality condition and tried to look at the conditions that have to exist in society if we are to achieve this goal of environmentally sustainable management. The model recognizes that there is a competitive enterprise economy and that we need effective governments. This includes an effective system of laws and administrative agencies, central government, local government, community and business, and indigenous people. Social participation is very important in terms of achieving that overall goal. And access to environmental information is key to achieving this goal.

You can develop all sorts of interactions. For example, environmental information that includes just how good or degraded our environment actually is is important. People need this information to activate social participation, which creates consumer pressure on business to produce environmentally high quality products and to minimize waste. It also puts pressure on governments to establish laws and institutions that will ensure that we look after our environment. A whole range of relationships can be drawn out of that model, but the idea is to establish clearly what the relationships are and then to make sure that we have policies and practices that continually reinforce those.

I'll finish by giving you an idea of what the key environmental issues are in New Zealand in terms of our strategic planning. We've looked at risk assessment to identify what the priority issues are for environmental action. In our case, they include the land, forests, fisheries, biodiversity, energy, climate change, and hazardous substances. We've developed policies in each of these areas that are based on sustainable management. We are developing a sustainable land management policy that has a subset of low-input sustainable agriculture policy. We've got a new law that requires sustainable management of indigenous forests. We have an individual, transferable quota system for our offshore fisheries, based on establishing a total allowable catch on a sustainable basis. That limits the amount of catch, but the quota within that system can be traded to get both economic efficiency and environmental sustainability. There are a number of key pieces of legislation, of which the Resource Management Act is really the linchpin, that deal with other aspects of management.

Within the context of the legislation, we're working on developing the policy tools that will improve the quality of our management. These tools include things like voluntary codes of practice by industry; for example, clarifying property rights where parts of the environment are not owned, or do not seem to be owned by anyone. We often have this tragedy of the commons, even in communal ownership, so a better definition of property rights has seemed an important way to progress.

Other tools are using market forces as incentives or disincentives, particularly the pricing mechanism--trying to assure that environmental costs are built into prices, which influences consumer behavior-- and encouraging firms to use full cost pricing in their accounting systems. Formulating standards and environmental bottom lines is important; for example, internalizing the costs of pollution. Including these costs in prices allows people to really respond to the pricing which, in turn, can be a very powerful signal for achieving good environmental outcomes. Removing impediments to better market outcomes is important, too. For example, energy efficiency can be improved in our country with better information and better competition in energy markets, ensuring that those who benefit also pay.

We also need to inform consumers, implement an effective study of the environment reporting system, develop and implement environmental accounting systems. We need to ask: If you cut down all the forests, if you fished out all your fish, if you've polluted all your rivers, would you be better off? Well, if you take GNP as your indicator, the answer is yes--you would be. If you take common sense as your indicator, you would say--of course not. And the problem is that we do not recognize in our system of national accounts the depletion of natural capital or environmental costs. We're working towards a very powerful policy tool for taking the environment into account when undertaking research.

Conclusion

To summarize: the New Zealand Green Plan for the 21st Century is based on the Resource Management Act. It establishes the requirement of sustainable management of natural and physical resources, and is made consistent with all other government policies that are relevant to the management of natural and physical resources. We are looking at how we can achieve integration of economic, social, and environmental strategy in the long and short term. We are looking at implementation of Agenda 21 through central and local government through empowerment of communities, young people, women, and indigenous people.

I would like to conclude by reading a quote that, for me, was one of the most poignant moments at the Rio summit. I think it's very relevant to the topic of our conference. A group of children came to the summit from all continents, to give the message to us hardened bureaucrats and politicians of how future generations view what we are up to. The spokesperson was a 14-year- old Canadian girl called Severn Suzuki. She said:

Parents used to be able to comfort their children by saying that everything is going to be all right. 'We are doing the best we can, and it's not the end of the world.' But you can't say that anymore. Our planet is becoming worse and worse for future generations of children. Yet we only hear adults talking about local interests and national priorities. You grown-ups, you say you love us, but we challenge you to make your actions reflect your words.

As we're all involved in the follow-up to Rio as agents in a partnership for change to enhance the well-being of people and the planet we live on, I think Green Plans can be an essential catalyst for change in that process. I think we are all challenged to make our actions reflect our words.