Part 9: Approaches to regulating land use

Managing Freshwater quality: Challenges and opportunities.

In this Part, we discuss:

We did a high-level review of the councils' consenting, compliance monitoring, and enforcement functions. We informed our review in different ways, including considering each council's policies, processes, and reporting. We also looked at the results of recent independent reviews, and how the councils had approached implementing improvements from recommendations.

We interviewed council consent and compliance staff, and sought the views of consent holders and stakeholders.

Summary of findings

Effective compliance monitoring and enforcement are important for freshwater quality management. The four regional councils varied in how effectively they carried out these duties. In particular, Horizons Regional Council needs to urgently resolve a specific and difficult challenge affecting its consenting processes.

The effectiveness of the four regional councils' regulatory consenting and compliance monitoring programmes was variable. Taranaki Regional Council has a strong regulatory approach. The other councils have been less effective in detecting non-compliance.

To support effective compliance, good information and effective support are needed. Three of the four regional councils helped land users understand the Resource Management Act, plan rules, and resource consent conditions.

Since 2011, the four regional councils have made significant procedural improvements to ensure that elected members are not involved in decision-making processes for prosecuting non-compliance. Despite these improvements, there are still opportunities for elected members to exert inappropriate influence. Councils must remain alert to this issue.

Regional councils lack the tools needed to tackle farm nutrient losses. As the Parliamentary Commissioner for the Environment has noted, the Government needs to take the lead on this issue for it to be satisfactorily resolved.

Communicating land-use regulations

The Resource Management Act has restrictions on how land and water can be used and what can be discharged to land and water. Regional councils give effect to their land-use functions and responsibilities through regional policy statements and regional plans.

Generally, councils include rules in their regional plans that classify activities into five different types. These types reflect the degree of control a council has over the activity. A "permitted" activity is an activity that can be carried out without a resource consent, provided it complies with the standards and terms of conditions in the regional plan. A "prohibited" activity means no resource consent can be granted for this activity. The other types of activities are "controlled", "restricted discretionary", "discretionary", and "non-complying". For these activities, a land user must have a resource consent.

These rules are different in different regions. For example, Environment Southland requires a land-use consent for all new dairy conversions and consents to discharge effluent. The Taranaki and Horizons Regional Councils require a resource consent for new dairy conversions seeking effluent discharge to land.

In the Waikato region, irrigation of dairy effluent to land (outside of Lake Taupō catchment) remains a permitted activity subject to conditions. A resource consent is required in the Waikato-Waipa catchment for dairy conversions from certain land uses (such as dry stock farming or forestry) for areas of more than 4.1 hectares.

Resource consents include conditions that land users must follow. These conditions are intended to reduce the adverse effects of land-use activity. Resource consents are an important regulatory tool for regional councils to manage the effects of land use on freshwater quality.

Advice to land users about how to comply with regulation

Generally, we were satisfied that three of the four regional councils provide good support and useful information to help users understand their obligations under the Resource Management Act, plan rules, and resource consents (including how to apply for resource consents). Taranaki Regional Council was particularly active. It worked with consent holders throughout the duration of their consents and ran forums to gather feedback.

Waikato Regional Council created a Farmer's guide to permitted activities. This sets out the conditions of the Waikato Regional Plan that apply to activities that can be carried out by farmers without a resource consent, including effluent discharge to land (outside of the Waikato-Waipa catchment). It also includes guidance for farmers on the types of actions required to meet the conditions of the plan. The Council's website also contains substantial information about the effect of the Wai Ora Plan for landowners.

Environment Southland acknowledged that operating "between two plans" can cause uncertainty for consent holders and that it had to commit considerable effort to assure those concerned about the consent requirements.

Horizons Regional Council is having considerable difficulties that it is yet to fully work through. An Environment Court declaration in 2017 found that Horizons Regional Council continued to process and approve new and existing intensive land-use consents without being able to properly assess whether those consents would meet the Council's nutrient allocation limit rules.

The Council had not, to that point, required an Assessment of Environmental Effects (a written statement that describes how a land user's activities would affect the environment) to accompany those consent applications. The Environment Court declaration deemed the consenting approach and resulting approval decisions to be flawed.

Horizons Regional Council now has a large number of farms operating with consents that, although deemed valid, are open to legal challenge and scrutiny and that could be overturned. Although an Assessment of Environmental Effects is now required for intensive land-use consent applications, the current nutrient allocation limits are not considered implementable. There is no fully effective way for many new or outstanding intensive land-use applications to gain consent.

Horizons Regional Council has proposed Plan Change 2 to resolve the issue and to provide more certainty to its farming community. Plan Change 2 aims to ensure that nutrient limits are reset to achieve the original intent of the One Plan. It will reflect current science developments and enable the implementation of resource consent applications for intensive farming activities. Plan Change 2 was notified on 22 July 2019.

Horizons Regional Council is also proposing Plan Change 3, a more comprehensive plan that also focuses on the One Plan's nutrient management provisions. When this report was written, the Council was aiming to notify Plan Change 3 by the end of 2019.

The issues faced by Horizons Regional Council highlights the challenge regional councils have in quantifying nutrient losses from diffuse sources. The Parliamentary Commissioner for the Environment recently reported on this challenge.39

The Commissioner noted that regional councils are required to do something about farm nutrient losses that seriously compromise water quality. To achieve this, regional councils need a tool capable of quantifying nutrients lost from farms. The best tool currently available is not up to the task in its current form. Although the tool could be improved, what is really needed is a decision from the Government about whether the tool should be used to help manage water quality. The Commissioner called on the Government take the lead on this issue. We endorse this call for action.

Compliance monitoring can be improved

Regional councils are responsible for monitoring land-use activities to ensure that those activities meet the requirements of the Resource Management Act, regional plan rules, and individual resource consents. Compliance monitoring also includes responding to complaints from the community about incidents.

Effective compliance monitoring is an important part of managing freshwater quality because it supports better environmental outcomes. In particular, it:

  • raises awareness among consent holders and land users about environmental management;
  • helps regional councils detect environmentally adverse activities so they can take action to see that these effects are avoided, remedied, or mitigated;
  • assures communities that the management framework they consulted on is upheld; and
  • provides motivation for land users to follow the Resource Management Act, plan rules, and resource consents, helping to ensure that all land users follow the rules, not just those who voluntarily comply.

Regional councils can choose how to carry out their monitoring function. However, they have made a collective effort to bring consistency to compliance monitoring and enforcement approaches. As we noted in our 2011 report, they formed the Compliance and Enforcement Special Interest Group (CESIG), which brings together compliance and enforcement staff from across councils.

CESIG's work has included developing a Regional Sector Strategic Compliance Framework to help councils develop strategic compliance programmes and a range of interventions. CESIG also reviews and reports on individual councils' monitoring and enforcement programmes.

General overview of the four regional councils' approaches

Given the adverse effect that dairying can have on freshwater quality, this section is mainly concerned with how regional councils monitor dairy farms – in particular, dairy effluent discharges. The four regional councils varied in how effectively they did this.

Taranaki Regional Council and Environment Southland's risk-based approaches consider the scale and potential environmental effects of the activity being monitored. Both councils have comprehensive dairy compliance monitoring programmes and monitor all dairy farm consents annually. Taranaki Regional Council refers to this as its "every farm, every year" approach. Taranaki Regional Council includes how much contact staff have with consent holders in staff performance measures. This helps to ensure regular contact.

Horizons Regional Council has a risk-based approach to compliance monitoring that considers the location of activities and past performance. This means that, rather than monitoring all dairy farm consents each year, the Council prioritises inspecting sites that have higher environmental risks or where there are reasons for concern, including where there has been material non-compliance.

For 2016/17, Horizons Regional Council inspected effluent discharge resource consents at 543 out of 934 farms in its region. Of those, 59 farms (9%) were found to be non-compliant or significantly non-compliant.

Waikato Regional Council has a high percentage of dairy farms operating under permitted activity rules, which means that they can operate without a resource consent. Because the Council is unable to charge for monitoring where there is no resource consent, this presents a significant resourcing challenge in terms of costs and staff.

To direct its resources to where they are most needed, the Council uses a risk-based approach to prioritise and direct consent and permitted activity monitoring. Waikato Regional Council's 2017/18 Annual Report noted that the Council administers more than 10,000 resource consents at 4600 sites.

The Council monitored more than 1000 farms for compliance with dairy effluent rules. About 8% were found to be significantly non-compliant with consent conditions. The Council also monitored 46 dairy farms for compliance with resource consents for effluent discharge.

Best practice for monitoring dairy effluent compliance

The Ministry has produced best practice guidelines for compliance, monitoring, and enforcement under the Resource Management Act.40 The guidelines, which draw on CESIG's strategic compliance framework, note "the frequency of monitoring should be determined based on the nature of an activity or consent type and by using a risk-based approach".

For example, an activity with minor effects on the environment might need only one-off monitoring, but activities of an ongoing nature such as the disposal of dairy effluent might need regular inspections.41

One way to monitor activity is to make unannounced visits to farms. The guidelines state that, under the Resource Management Act, an enforcement officer may enter a property "at any reasonable time" to inspect it. The Act does not require councils to give the land user notice before inspection.

The good practice guidelines explain that "unexpected inspections decrease the likelihood of consent holders hiding non-compliance, and help in establishing what is really happening on the site".42 We consider that unannounced visits should be the default option for all councils.

Compliance monitoring and enforcement staff at the four regional councils can make unannounced visits to farms in certain situations. Some councils use the method more effectively than others.

We were satisfied with Taranaki Regional Council's approach. Its rigorous approach helps maintain the integrity of its overall environmental management model. It also shows that being a strong and effective environmental regulator does not preclude having healthy and co-operative relationships with land users.

Taranaki Regional Council's healthy relationships with farmers enables it to maintain a strong approach to compliance while working alongside them to implement its voluntary riparian management programme.

Environment Southland has improved its approach to compliance monitoring since our 2011 report, including having its risk-based monitoring programme in line with frameworks adopted by regional councils.

Some stakeholders told us that Environment Southland could further strengthen its approach. Some environmental groups have concerns about Environment Southland's ability to identify material non-compliance. Farmers that we spoke to did not want non-compliant land users to tarnish the efforts the wider farming sector has made in improving compliance.

Staff and management at Environment Southland are proud of the improvements made since 2011 and are confident in their ability to detect and address instances of non-compliance. They acknowledged that they can continue to improve their approach by learning from other councils.

In that regard, they noted that council staff are involved in CESIG and attend forums discussing challenges and opportunities. They also noted that a December 2018 report for CESIG concluded that Environment Southland's compliance, monitoring, and enforcement approaches were performing well.

We had concerns about the effectiveness of compliance monitoring at Waikato Regional Council and Horizons Regional Council.

Waikato Regional Council's compliance monitoring programme did not detect non-compliance as effectively as others. However, when we visited, the Council was working to improve its overall approach and preparing a new compliance strategy that it expects will provide more clarity for compliance staff.

Figure 7 highlights the importance of council staff being able to use a full range of appropriate compliance, monitoring, and enforcement tools.

Figure 7
The importance of being able to detect non-compliance

In 2014, Waikato Regional Council heard concerns from some farmers that its approach to monitoring farm dairy effluent rules (namely its use of helicopter monitoring) was causing unnecessary stress in the rural community.

A working group of farming industry representatives and elected members was formed and made seven recommendations. These recommendations resulted in several changes to the Council's compliance monitoring approach. In particular, the Council stopped using helicopters to monitor compliance and made appointments with farmers when it wished to do inspections in person.

Council staff put in place the new approach and reported back in 2016 and 2017 on non-compliance detection results. It found a decrease in the rates of non-compliance. However, this did not necessarily reflect increased compliance. A wider range of monitoring tools was made available to staff in a trialled approach, including unannounced visits to farms suspected of non-compliance or with a history of non-compliance.

After these tools were introduced, the number of significantly non-compliant sites increased. Council staff attributed this to their ability to conduct unannounced visits.

In 2018, Waikato Regional Council adopted a risk-based compliance strategy particular to dairy farms with inadequate effluent storage (less than seven days storage), which make up 19% of all dairy farms. The Council uses unannounced farm visits and aerial monitoring to detect instances of non-compliance.

This new approach has resulted in a significant number of cases of non-compliance being detected and significantly higher numbers of prosecutions being pursued. The Council has sought enforcement orders from the courts to ensure that adequate infrastructure is installed on those farms it seeks to prosecute.

It is important that non-compliance is appropriately identified and dealt with. In our view, regional council staff should be fully empowered to make unannounced calls if needed. Any risks to staff personal safety in what could be confronting situations would need to be managed.

We also had some concerns about the capacity of Horizons Regional Council to adequately cover all the farming operations in its region. The Council expects to add four full-time staff to its regulatory team to complement its risk-based monitoring approach. Horizons Regional Council is confident that this will allow it to better optimise that approach to ensure broader and more-effective coverage.

We were satisfied that the four regional councils regularly monitor their regulatory compliance programmes and approaches, commit to reviews and involvement with sector-wide compliance special interest groups, and are open to making improvements. We urge the four regional councils to continue these regular reviews and remain open to improvement, including learning from other regional councils and unitary authorities.

How the four regional councils take enforcement action

If a land user is not complying with the Resource Management Act or fails to comply with resource consent conditions, regional councils have a range of enforcement options (see Figure 8). Enforcement options include educating land users about compliance, informal warnings, abatement notices, infringement notices, and legal proceedings.

We were satisfied that the four regional councils used, or were increasingly using, these enforcement options to good effect. For example, Taranaki Regional Council has a strong approach to regulatory enforcement that includes warranting its compliance team and empowering it to issue abatement notices on-site.

Figure 8
Enforcement actions available to regional councils

Enforcement actions

Informal options include issuing a warning or educating the land user so as to encourage compliance in the future.

More formal enforcement options include:
  • Abatement notices – Regional councils can direct a person to cease an activity that is adversely affecting the environment. Failure to comply can result in fines or imprisonment.
  • Infringement notices – Council enforcement officers can issue infringement notices if they have reason to believe a person is committing an infringement offence.
  • Enforcement orders – Enforcement orders are issued by the Environment Court, rather than regional councils. Anybody can apply for an enforcement order against anyone else. These orders can allow regional councils to recover clean-up costs from a polluter.
  • Prosecution – Regional councils may consider criminal proceedings against an alleged offender if they have appropriate evidence. Because the standard of proof needed is high, prosecutions take a lot of resources. Penalties for a person can include restorative justice, a fine of up to $300,000, or a term of imprisonment for up to two years. A company can be fined up to $600,000.

During our audit, we noted that Horizons Regional Council had made significantly fewer prosecutions in the previous three years. When we asked Horizons Regional Council staff about this low number of prosecutions, they told us that there simply were not more prosecutions during that period but that they were preparing five more cases for prosecution. Those five cases have since been successfully concluded.

Recommendation 5

We recommend that Waikato Regional Council, Taranaki Regional Council, Horizons Regional Council, and Environment Southland use a full range of appropriate compliance, monitoring, and enforcement tools to effectively identify and act on material non-compliance with the Resource Management Act 1991 or resource consent conditions.

Political interference and compliance, monitoring, and enforcement decisions

Compliance, monitoring, and enforcement decisions need to be made impartially and without political interference. Any threat to the integrity of a council's compliance monitoring and enforcement programme cannot be tolerated.

In 2011, we were concerned that elected members at the four regional councils were involved in enforcement decision-making. We noted that, in central government, enforcement decisions are made by staff rather than elected members so that they are independent of political influence.

We also noted that the Crown Law Office's Prosecution guidelines applied to all public prosecution activity. As such, we recommended that regional councils review their delegations and procedures for prosecuting, to ensure that any decision about prosecution would be free from actual or perceived political bias.

The four regional councils have made procedural improvements since our 2011 report. Elected members are no longer involved in enforcement decisions. Enforcement panels made up of compliance, monitoring, and enforcement staff now determine the best course of action.

Councils have the option of nominating staff who will answer any queries from elected members about constituent enquiries. At Environment Southland, this liaison person is a senior member of staff and acts to minimise the interaction that elected members have with compliance, monitoring, and enforcement staff.

We found no evidence of direct interference from elected members. However, in our view, regional councils must remain alert to this issue. No process can be completely effective, and elected members may still be able to exert inappropriate influence on compliance operations through interactions with staff.

Any attempt by elected members to inappropriately influence compliance staff or interfere with their processes, knowingly or not, is unacceptable. It compromises the integrity of monitoring activities and undermines the efforts of those who perform them.

Implementing effective processes to prevent inappropriate political influence or interference in compliance monitoring decisions has been a positive development. These need to be backed by an organisation-wide culture that does not tolerate interference and empowers staff to raise concerns if it occurs.

Some stakeholders and council staff expressed concerns and unease where elected members held or required consents for personal and business land use. Some perceived that those elected members had a conflict of interest when setting direction on regulatory and non-regulatory approaches, including approaches to compliance, monitoring, and enforcement.

To prevent undermining public trust and confidence in the elected member or the council, it is critical to declare a conflict of interest and effectively and transparently manage it. The conflict, or the perception of a conflict, needs to be dealt with so that the personal views or interests of the elected member do not unduly influence, or are not seen to unduly influence, the decisions and deliberations needed to meet their official responsibilities.

39: Parliamentary Commissioner for the Environment (2018), Overseer and regulatory oversight: Models, uncertainty and cleaning up our waterways, at

40: Ministry for the Environment (2018), Best practice guidelines for compliance, monitoring and enforcement under the Resource Management Act 1991, ME 1376.

41: Ministry for the Environment (2018), Best practice guidelines for compliance, monitoring and enforcement under the Resource Management Act 1991, ME 1376, page 45.

42: Ministry for the Environment (2018), Best practice guidelines for compliance, monitoring and enforcement under the Resource Management Act 1991, ME 1376, page 60.