Following a flurry of public criticism of the National Policy Statement on Freshwater Management (‘NPS-FM’) since it was introduced, the Ministry for the Environment (‘MfE’) has released an exposure draft outlining proposed changes to the NPS and the Freshwater National Environmental Standard (‘NES’). 

In effect, the NPS-FM and NES policies make development within or affecting a wetland a prohibited activity, except in certain situations such as constructing ‘specified infrastructure’. ‘Specified infrastructure’ includes infrastructure that delivers a service operated by a lifeline utility, regionally significant infrastructure, or flooding and drainage related works. 

The proposed changes aim to clarify drafting ambiguities that have resulted in interpretation issues both at the council level, and in the Environment Court, in terms of what even qualifies as a 'natural wetland.' The proposed changes also introduce new consenting pathways for water storage activities, quarries, fills, mining and urban development, where none previously existed. The key changes are outlined in the table at the end of this article.

What are the impacts for your development?

Overall, the changes are a mixed bag and it will depend on the specific project as to whether the changes will make it easier or more difficult to construct your development. In terms of whether the wetland is a ‘natural wetland’:

• The changes do not impose a quality threshold for wetlands. Some very degraded wetlands with low ecological values will continue to be caught by the definition of  ‘natural wetland’.
• The exclusion for wetlands constructed by artificial means will be narrowed. The reference to ‘deliberately constructed’ closes down any argument that wetlands that have formed as a natural consequence or incidental to previous earthworks fall within the exemption. 
• The exclusion from the definition of ‘natural wetlands’ for pasture is clearer and the ambiguous reference to temporary pooling has been removed. However, the exotic species must be those included on the new list. 

In terms of the discretionary activity consenting pathway for specified infrastructure, the NPS policy requiring activities to ‘avoid’ the loss of extent of natural wetlands continues to apply unless it can be shown that (amongst other things) there is a ‘functional need’ for the infrastructure. As such there is no real improvement in the settings for ‘specified infrastructure’ (aside from potentially clarifying what is and isn’t a wetland).

On the other hand, new consenting pathways (water storage activities, quarries, fills, mining and urban development), will be a significant benefit for those projects. Nonetheless, there are still some hurdles to overcome. In particular, these activities are required to ‘avoid’ the loss of the extent of a wetland unless:

• For quarrying and mining activities, there are significant national or regional benefits, there is a functional need for the activity in that location, and effects are managed through the effects management hierarchy.
• For landfills, there are significant national or regional benefits, there are ‘no practicable alternatives’ and effects are managed through the effects management hierarchy.
• For urban development, the development contributes to a well-functioning environment, is not on rural land, there are ‘no practicable alternatives’, and effects are managed through the effect management hierarchy (including specific reference to managing effects over time if offsetting/compensation is applied). The new consenting pathway for urban development is significant, as it signals the reconciliation of the conflict between the NPS-UD and the NPS-FM in respect of wetlands in favour of urban development

Applicants that apply the effects management hierarchy and require offsetting or compensation must now have regard to the new offsetting and compensation principles in the NPS-FM. The principles include a requirement for both offsetting and compensation to provide long-term outcomes, preferably in perpetuity.

We have extensive experience dealing with development within wetlands for clients. If you are concerned about the impact of wetlands on your property, please get in touch. Submissions on the proposed changes close on 10 July 2022.

The table below contains a summary of the key changes proposed by MfE.