Infrastructure, development and primary sector national direction

Aotearoa New Zealand needs to invest in more infrastructure to grow the economy, support new housing development, increase energy efficiency, improve resilience and achieve better environmental outcomes.⁶ We need to develop our infrastructure more efficiently. Although we spend a lot on infrastructure, it is insufficient in quality and quantity. For the last few decades, central and local government has spent approximately 5.5 per cent of GDP on infrastructure. This is about the same as other high-income countries, but New Zealand is among the bottom 10 per cent of such countries in delivering infrastructure.⁷ This ‘efficiency gap’ means some community infrastructure needs remain unmet, and we are not sufficiently maintaining some existing infrastructure.

The current resource management system contributes to this infrastructure shortfall and efficiency gap. The system has neither sufficiently protected the natural environment nor sufficiently enabled development and infrastructure to meet people’s needs.⁸

^{6 New Zealand Infrastructure Commission. 2021. New Zealand’s infrastructure challenge: Quantifying the gap and path to close it (PDF, 704KB). Wellington: New Zealand Infrastructure Commission | Te Waihanga.}

^{7 New Zealand Infrastructure Commission. 2021. Investment gap or efficiency gap? Benchmarking New Zealand’s investment in infrastructure (PDF, 1.6MB). Wellington: New Zealand Infrastructure Commission | Te Waihanga.}

^{8 Ministry for the Environment. 2023. Briefing for Incoming Ministers – Environment, Climate Change and RMA Reform (PDF, 2.8MB). Wellington: Ministry for the Environment.}

The current resource management system and national direction does not sufficiently recognise the benefits of infrastructure, or the role of infrastructure services in supporting the wellbeing, health and safety of people and communities, now and in the future. This means New Zealand’s infrastructure expenditure is inefficient, and community needs for infrastructure services are unmet.

The existing resource management plans and other documents that guide decision-making often underplay the benefits of infrastructure, relative to its local adverse environmental effects. In addition, decision-making on infrastructure across the country is inconsistent.

Long-term planning for infrastructure is limited and not well coordinated with land-use planning. Current infrastructure consenting processes and conditions are increasingly costly, with disproportionate requirements for assessing the environmental effects of proposals. This adds considerable costs and delays to infrastructure projects.

Management of the interface between infrastructure and other types of development is inconsistent, which creates uncertainty and increases costs and litigation for infrastructure providers. Consent decisions may constrain hours of operation or prevent the development of infrastructure, in response to sensitive activities located nearby.

Further uncertainties and costs result from inconsistent treatment of infrastructure across local authority boundaries, and between different national direction instruments. This is a particular issue for national or linear infrastructure, which must traverse several locations and could impact on a range of environmental values.

The problems are compounded because the resource management system for infrastructure lacks specific national direction. The existing national direction does not include all forms of infrastructure provided by central and local government or by other providers, or environmental resilience infrastructure. No national-level policy direction exists for transport, ports, water, wastewater and stormwater, health, education, defence or corrections infrastructure. This has resulted in a fragmented, ad hoc approach that is not aligned with how infrastructure is planned, developed or operated.

Recent years have seen a shift in the understanding of infrastructure, away from being discrete physical assets that are defined and categorised into separate sectors (eg, transport, energy or water). Instead, infrastructure is now recognised as a complex network of interconnected elements with a public-good purpose – for example, a hospital cannot function without electricity, water or a transport network.

Nationally consistent policy direction is required, to provide more certainty and better enable infrastructure development.

The proposal is for a new National Policy Statement for Infrastructure (NPS-I) to address the problems identified above and better enable and protect infrastructure, by providing:

• consistent definitions to support the proposed policies
• an objective setting out a range of infrastructure outcomes expected from the resource management system
• general policies to better enable and protect infrastructure, while managing its effects on various environments, and recognising and providing for Māori rights and interests
• policies on managing the interface between infrastructure and other activities
• policies to enable infrastructure while managing its effects on the environment.

More detail on the proposed provisions is included in attachment 1.1 of this document.

The proposed NPS-I covers a broad range of infrastructure as defined by the RMA, including:

• energy (except renewable electricity generation, and electricity transmission and distribution covered by other national policy statements)
• three waters (eg, wastewater, stormwater and drinking water)
• transport networks and assets.

It also covers social infrastructure (hospitals, emergency services, educational, defence and corrections facilities), parks, district or regional resource recovery or waste disposal facilities, and ‘green’ infrastructure that delivers flood management services.⁹

The proposed NPS-I is intended to apply to all RMA decisions affecting the operation, maintenance, renewal and upgrade of existing infrastructure, and to development of new infrastructure. This includes decisions on infrastructure itself, as well as activities that interface with, and are affected by, infrastructure (eg, wastewater treatment plants).

To assist interpretation, the proposed NPS-I includes a set of definitions for infrastructure and related activities, with the definition of infrastructure being broader than the RMA definition.

The NPS-I also proposes to define ‘infrastructure-supporting activities’ not undertaken by the infrastructure provider, including quarrying activities (as defined in the National Planning Standards).¹⁰ Attachment 1.1 of this document contains a full list of proposed definitions.

^{9 For example, infrastructure forming part of overland flow paths, watercourses and streams, with infrastructure activities including regeneration and restoration.}

^{10 Ministry for the Environment. 2019. National Planning Standards (PDF, 933KB). Wellington: Ministry for the Environment. p 62.}

The proposed objective for the NPS-I is to identify infrastructure outcomes that planning decisions would contribute to. Outcomes include that infrastructure:

1. supports the wellbeing of people and communities and their health and safety
2. provides national, regional or local benefits
3. supports the development and change of urban and rural environments to meet the diverse and changing needs of present and future generations
4. is well functioning and resilient
5. provides value for money to people and communities
6. is delivered in a timely, efficient and ongoing manner while managing adverse effects on the environment
7. is protected from the adverse effects of other activities.

The proposed NPS-I requires decision-makers to recognise and provide for the benefits of infrastructure. The proposed provisions detailed in attachment 1.1 of this document show the full list of benefits decision-makers must consider, which cover:

• the wellbeing of future generations
• well-functioning urban and rural environments, including sufficient development capacity
• supporting development and growth
• protecting the natural environment
• mitigating effects of climate change
• resilience to natural hazards.

The NPS-I proposes to require decision-makers to recognise and provide for the functional need¹¹ or operational need¹² of infrastructure to locate in particular environments. The particular infrastructure-related needs are specified in the proposed provisions detailed in attachment 1.1 of this document.

The operational need part of the policy is intended to recognise the technical and financial constraints for infrastructure providers in managing adverse effects of infrastructure on the environment. A corresponding policy proposal is intended to:

• recognise the operational or functional need of ‘infrastructure-supporting activities’ (including quarrying) to locate in particular places
• enable timely delivery of infrastructure activities.

^{11 Defined as “the need for a proposal or activity to traverse, locate or operate in a particular environment because the activity can only occur in that environment”. Ministry for the Environment. 2019. National Planning Standards (PDF, 933KB). Wellington: Ministry for the Environment. p 58.}

^{12 Defined as “the need for a proposal or activity to traverse, locate or operate in a particular environment because of technical, logistical or operational characteristics or constraints”. Ministry for the Environment. 2019. National Planning Standards (PDF, 933KB). Wellington: Ministry for the Environment. p 62.}

The proposed policy is to require decision-makers to have regard to spatial plans – including future development strategies¹³ and other strategic plans for infrastructure – in protecting and enabling new infrastructure required to meet changing community needs.

^{13 Required under the National Policy Statement on Urban Development 2020 (PDF, 509KB).}

The proposed NPS-I includes requirements for addressing the long timeframes and costs of consenting infrastructure projects. It requires efficient and timely processes for consenting and re-consenting infrastructure, including using information gathered for investment processes and nationally recognised standards in assessing and managing effects. These requirements aim to avoid duplication of assessments and information requirements, as well as avoiding the re-litigation of options in different regulatory processes.

The proposal aims to enable more effective use of existing infrastructure, including maintenance, upgrades and re-consenting. It provides flexibility to use new technology to improve infrastructure services, environmental outcomes or resilience to natural hazards and climate change.

The proposed NPS-I also provides direction on supporting infrastructure activities such as quarrying, given their importance for the timely delivery of infrastructure projects.

A policy in the proposed NPS-I sets national requirements for:

• engaging with Māori
• considering Māori values and aspirations
• involving Māori in infrastructure projects, including those affecting sites of significance to Māori.

The proposed policy is based on existing policies in the National Policy Statement on Urban Development (NPS-UD). The intent is to apply a consistent approach across the proposed NPS-I, proposed amendments to the National Policy Statement for Renewable Electricity Generation (NPS-REG) and the National Policy Statement on Electricity Transmission (NPSET) (to be renamed the National Policy Statement for Electricity Networks (NPS-EN)). Nothing in these policies is intended to override any Treaty settlement requirement or other relevant arrangement.

The policy proposes that decision-makers must recognise and provide for Māori interests in relation to infrastructure, including by:

1. taking into account the outcome of any engagement with tangata whenua on a resource consent, notice of requirement or request for a private plan change
2. recognising the opportunities tangata whenua may have in developing and operating their own infrastructure at any scale or in partnership
3. providing opportunities in appropriate circumstances for tangata whenua involvement in relation to sites of significance to Māori and issues of cultural significance
4. operating in a way that is consistent with iwi participation legislation.¹⁴

^{14 Iwi participation legislation is defined in section 58L of the RMA to mean any legislation, including legislation listed in Schedule 3 of the Treaty of Waitangi Act 1975, that provides a role for iwi or hapū in processes under the RMA. Note that item (d) does not exclude participation provided under the Marine and Coastal Area (Takutai Moana) Act 2011 or under Mana Whakahono ā Rohe.}

Three policies are proposed to provide nationally consistent direction for assessing and managing adverse effects of infrastructure on the environment.

The first is intended to address the costly and time-consuming provisions and processes for infrastructure providers. The proposal provides guidance for decision-makers, specifying that they should consider:

• the extent to which effects have been managed through route or site selection and design
• the technical operational requirements of infrastructure
• only the change or increase in effects for re-consenting or infrastructure upgrades
• adopting best practice standards
• ensuring that measures and consent conditions are proportionate and cost effective.

The second proposed policy enables the creation of new infrastructure and upgrades to existing infrastructure with adverse effects on environmental values not included in section 6 of the RMA or covered by national direction, so long as these effects are avoided, remedied or mitigated where practicable.

Previous policy work had developed a draft ‘effects management hierarchy’ to address adverse effects on values in section 6 of the RMA and other national direction. The Government has now decided to focus on resolving these major tensions between infrastructure and natural environmental values in the replacement of the RMA, rather than through the current proposed changes to national direction.

A further proposed policy is to enable the efficient operation, maintenance and minor upgrade of existing infrastructure, provided that adverse effects are avoided, remedied or mitigated where practicable.

The proposed policies aim to manage the tensions between providing long-term certainty for infrastructure services and providing for compatible housing and other development. They aim to protect existing and consented infrastructure from the effects of nearby development, including from reverse sensitivity (impacts of new activities on existing activities). The policies provide details on what local authorities must do, including:

• engaging with infrastructure providers
• identifying activities that are compatible with or sensitive to infrastructure
• adopting a range of methods to manage interfaces with sensitive uses.

A further proposed policy provides direction on managing the interface between infrastructure and other activities. For example, it recognises that:

• some typical effects cannot be completely avoided (eg, dust, vibration, noise)
• amenity changes are necessary to achieve well-functioning environments
• new activities are primarily responsible for managing adverse effects.

Table 2 outlines anticipated impacts of the proposed NPS-I on various parties, with more detailed information available in the Interim Regulatory Impact Statement: National Policy Statement for Infrastructure available on the Ministry for the Environment’s website. Table 2 outlines anticipated impacts of the proposed NPS-I on various parties, with more detailed information available in the Interim Regulatory Impact Statement: National Policy Statement for Infrastructure available on the Ministry for the Environment’s website.

The Minister Responsible for RMA Reform considers the proposals to be consistent with the purpose of the RMA because they:

• enable the use and development of natural and physical resources to develop, operate, protect, maintain and upgrade infrastructure while managing effects on the environment by providing clear and directive objectives and policies to decision-makers
• support people and communities to provide for their social, economic and cultural wellbeing, and for their health and safety, by contributing to maintaining and improving the services that infrastructure provides
• further enable development, while protecting natural environmental values in accordance with relevant national direction (ie, river/lakes/wetlands continue to be managed under the National Policy Statement for Freshwater Management (NPS-FM)). The provisions of district and regional plans will continue to protect values under section 6 of the RMA that do not have national direction.

Infrastructure activities can have both positive and adverse effects for tangata whenua and for land, water and other taonga. Although the proposals may have impacts on taonga, decision-makers will be required to consider the national significance and benefits of infrastructure alongside other national direction (eg, the New Zealand Coastal Policy Statement (NZCPS) and the NPS-FM), regional policy statements, and regional and district plans. This helps decision-makers to effectively weigh up the effects of infrastructure activities when considering a consent application.

The proposals provide for recognition of Māori values, aspirations and engagement.¹⁵ The proposals will not directly impact the decision-making process requirements under the RMA, Treaty settlements or other legislative arrangements, including the Marine and Coastal Area (Takutai Moana) Act 2011 and the Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Act 2019.

Treaty settlement agreements and related legislation continue to apply. Some Treaty settlements place obligations on councils, including involving iwi/Māori in plan development and decision-making and inclusion of policies in plans. The proposals do not present a risk to the operation of these Treaty settlement commitments.

Consultation will be necessary to test whether iwi, hapū and other Māori groups have concerns about the proposal or any perceived impacts on sites of significance to Māori, marae, Māori land, land returned under Treaty settlements, or other matters of significance to Māori groups.

Infrastructure activities can have both positive and adverse effects for tangata whenua and for land, water and other taonga. Although the proposals may have impacts on taonga, decision-makers will be required to consider the national significance and benefits of infrastructure alongside other national direction (eg, the New Zealand Coastal Policy Statement (NZCPS) and the NPS-FM), regional policy statements, and regional and district plans. This helps decision-makers to effectively weigh up the effects of infrastructure activities when considering a consent application.

The proposals provide for recognition of Māori values, aspirations and engagement.¹⁵ The proposals will not directly impact the decision-making process requirements under the RMA, Treaty settlements or other legislative arrangements, including the Marine and Coastal Area (Takutai Moana) Act 2011 and the Ngā Rohe Moana o Ngā Hapū o Ngāti Porou Act 2019.

Treaty settlement agreements and related legislation continue to apply. Some Treaty settlements place obligations on councils, including involving iwi/Māori in plan development and decision-making and inclusion of policies in plans. The proposals do not present a risk to the operation of these Treaty settlement commitments.

Consultation will be necessary to test whether iwi, hapū and other Māori groups have concerns about the proposal or any perceived impacts on sites of significance to Māori, marae, Māori land, land returned under Treaty settlements, or other matters of significance to Māori groups.

General material on implementation supporting the proposed NPS-I, including the statutory requirements, is provided in section 4 of this document. Specific implementation provisions proposed for this national policy statement are as follows:

• the provisions in the NPS-I would affect decisions on policy statements and plans, notice of requirements, and decisions by consent authorities. The recent Gibbston Vines¹⁶ case has shown that each part of the instrument should be clear about what decisions are being made and by whom
• no provisions in the proposed NPS-I provide further direction on implementation beyond what is provided by the RMA (as described in section 4 of this document).

^{16 Gibbston Vines Limited v Queenstown Lakes District Council [2023] NZEnvC 265.}