THE regulatory and enforcement powers available under the Pulp Mill Assessment Act (the Act) are similar in most respects to those which are available against other industrial sites, in that all powers available under the Environmental Management and Pollution Control Act (EMPCA) probably apply. Basically, under the Act, regulators are able to enforce the conditions which the permit imposes on the mill. It is probable that if the mill pollutes or causes an environmental nuisance, that they will be able to take enforcement measures and to prosecute under EMPCA. They also, in my opinion, have the power to issue environment protection notices under EMPCA, enabling them to take action to prevent or remediate environmental harm or to alter or vary any permit conditions where that is necessary.

The powers regulators do have are weakened by conditions 8 and 9, which I shall return to later.

The effect of the Act on regulatory powers.
The Act exempts the mill from all provisions of Acts requiring consent for or regulating development, including those in EMPCA and LUPAA. It does not exempt the mill from other provisions of these Acts. It then provides for conditions to be imposed on the mill and gives regulators the power to enforce the conditions as if they were made under another Act, such as the Land Use Planning and Approvals Act (LUPAA). However, it does not specifically grant any regulatory power other than that to enforce the conditions. Hence, its overall impact is to take away all regulatory powers over use or development and only restore those which relate to the enforcement of conditions. However, this does not affect the powers over pollution given to regulators under EMPCA as these are not, in my opinion regulatory powers over use and development, but are powers over pollution, whether connected to use or development or not.

The exemption from Acts regulating development.
Section 9(1) exempts the mill from Acts requiring consent or regulating development. It reads:

9. Provisions of Acts, planning schemes, &c., not to apply to project
    (1) The provisions of any Act, planning scheme, special planning order or interim order –
  (a) requiring the approval, consent or permission of any person in connection with any use or development in relation to the project; or
  (b) empowering any body to grant or refuse its consent to any such use or development; or
  (c) prohibiting any such use or development; or
  (d) permitting any such use or development only upon specified terms or conditions; or
  (e) regulating or permitting the regulation of any such use or development –
do not apply to the project.

Clause (e) in particular is very broad, going beyond exempting the mill from the need for approvals under legislation such as EMPCA or LUPAA and exempting it from provisions allowing the regulation of development.

The enforcement of conditions in the permit.

Section 8 of the Act, which deals with the effects of the approval of the permit under the Act, states:

8. Effect of approval
    (1) If the project is approved under section 7 –
(a) the Pulp Mill Permit comes into effect; and
  (b) notwithstanding any other Act, the project may proceed on the conditions specified in the Pulp Mill Permit; and
  (c) a permit, licence or other approval is taken to have been issued under the Act specified in the Pulp Mill Permit in relation to each condition and that Act applies as if such a permit, licence or other approval had been issued on the conditions set out in the Pulp Mill Permit in relation to that Act; and
  (d) the person, body or State Service Agency responsible for the enforcement of each condition must enforce the condition to the extent of its powers.

    (2) If the conditions require the person proposing the project to apply for such other permits, licences or other approvals as may be necessary for the project, the person proposing the project must comply with that requirement.

    (3) If the person proposing the project does not comply with a condition contained in the Pulp Mill Permit, the Pulp Mill Permit is suspended until such time as the condition is complied with.

Section 8(1)(c) ensures that permit conditions are enforceable. Under s 6(7) of the Act, regulatory agencies were given the power to recommend permit conditions. If they recommended a condition, they had to specify the Act under which a condition of that type would normally be applied and the regulatory agency normally responsible for enforcing conditions of that type. The Minister had the power under section 6(8) to incorporate the recommended condition including the name of the relevant Act and of the relevant agency in the permit. Under section 8(1)(c), the condition takes effect as if it had been issued under the relevant Act and may be enforced by means of the enforcement powers in that Act. Hence, if a condition takes affect as if it were imposed under LUPAA, the enforcement powers available under LUPAA may be used to enforce it.

Under s 8(1)(d) the regulatory agency responsible for the enforcement of each condition has a duty to enforce the condition to the extent of its powers. This duty is an important guarantee for people whose interests may be affected by the pulp mill, as it not only gives regulators the power to enforce the permit conditions, but requires that they do so. They are in breach of the law if they fail to do so, and a person with an interest greater than an ordinary member of the public, including a person who suffers loss or damage as the result of a breach of condition, can probably enforce the duty in the courts. However, the duty is substantially watered down by conditions 8 and 9 of the Pulp Mill Permit.

Permit Conditions 8 and 9 and the duty to enforce
Conditions 8 and 9 appear to define what amounts to a breach of a condition. Condition 8 suggests that there is no breach of a permit as long as there is substantial compliance to the satisfaction of the regulatory authority charged with the enforcement of that condition, while condition 9 deems that there is substantial compliance to the satisfaction of the regulatory authority unless that authority informs Gunns in writing that the condition is not being complied with to its satisfaction. Combined, they substantially weaken the regime for enforcing permit conditions established by the Pulp Mill Assessment Act.

The Act, section 8(1)(d), as noted above, imposes a duty on relevant agencies to enforce, to the extent of their powers, conditions for which they are responsible. Clauses 8 and 9 effectively water down that duty, first, by only requiring substantial compliance rather than strict compliance with the conditions and second, by deeming that there is substantial compliance until the relevant agency informs Gunns by written notice that there is a breach. The effect of condition 8 is that an agency’s duty to enforce is not triggered by every breach of the conditions but only by substantial breaches. Condition 9 entails that a breach does not occur and hence there is no duty to enforce until the agency issues a notice that there has been a breach. As a result, the conditions convert the regulatory agencies’ duty to enforce into a discretion to enforce or not as they see fit. If an agency comes to the opinion that it is not appropriate to enforce a condition it can avoid any duty to enforce by not issuing a notice. Because they effectively negate the duty to enforce, the two conditions may be invalid on the grounds that they are inconsistent with section 8(1) (d) of the Act.

Regulatory offences under EMPCA
It is probable that most regulatory offences under EMPCA, such as causing material or serious environmental harm by polluting the environment, or depositing a pollutant in a place where it could be expected to cause serous or material environmental harm, or causing an environmental nuisance, do apply under the Act, as they fall outside the exemption, not being ‘provisions regulating development’ for the purposes of section 9(e) of the Act. Although these offences and associated enforcement mechanisms will often be used to regulate development, they are not in my opinion, ‘provisions regulating development’ because they apply to all actions causing environmental harm or an environmental nuisance, whether resulting from development or not.

The Act, section 3(2) adopts the definition of development in LUPAA:
“development” includes –
  (a) the construction, exterior alteration or exterior decoration of a building; and
  (b) the demolition or removal of a building or works; and
  (c) the construction or carrying out of works; and
  (d) the subdivision or consolidation of land, including buildings or airspace; and
  (e) the placing or relocation of a building or works on land; and
  (f) the construction or putting up for display of signs or hoardings.

It is clear that the EMPCA offences referred to above apply to actions which are not development in the terms of this or any other definition of the term. For example, one could cause environmental harm or an environmental nuisance by dumping pollutants from an aircraft or a vehicle, actions which are not associated with development. Because they apply whether or not the offence is associated with development, they are not excluded under section 9(e).

Because the EMPCA environmental offences apply, other EMPCA enforcement mechanisms such as Environmental Infringement Notices under section 67 of EMPCA also apply.

Offences under LUPAA
The main offence under LUPAA is s 63, which allows a local council to prosecute a person who uses land or undertakes development in breach of a planning scheme or in breach of a condition in a permit. These offences have two advantages over the offences in EMPCA:
1. it is only necessary to prove a breach of a permit, not that the breach has caused an environmental nuisance or any environmental harm;
2. Councils have duty to enforce their planning conditions and to prosecute breaches of permits under section 48 of LUPAA and may be prosecuted for failure to take all reasonable steps to ensure compliance with their planning schemes; LUPAA s 63A. There is no similar duty to enforce under EMPCA.

The bulk of the permit conditions are taken to have been issued under LUPAA in accordance with section 8(d) of the Act. It seems clear that a breach of these conditions amounts to a breach of a permit under LUPAA, because under section 8(d) of the Act, LUPAA applies to these conditions as if the permit were issued under its provisions. Because section 8(c) of the Act is poorly drafted, it may be possible that section 63 of LUPAA does not apply. However it is unlikely that the courts would accept such an interpretation as it would mean that there is no penalty for breach of the conditions in the pulp mill permit.


Civil Enforcement under EMPCA and LUPAA
EMPCA
Section 48 of EMPCA empowers the Director of Environmental Control, a local council or a person who has a proper interest in the subject matter to seek a civil enforcement order in the Resource Management and Planning Appeals Tribunal against a person in breach of EMPCA or who is causing environmental harm by a contravention of another Act. It is a very important provision as it allows affected individuals as well as regulatory agencies to take action where there has been a breach of the Act.

The Tribunal has power to make a wide range of orders including the prohibition of any use or development of land and the making good of any contravention; EMPCA section 48(5):
(5) The Appeal Tribunal may do all or any of the following:
  (a) require the respondent to refrain, either temporarily or permanently, from the act or course of action that constitutes the contravention of, the potential contravention of, or the failure to comply with, this Act;
  (b) preclude, for a period specified by the Appeal Tribunal, the respondent from carrying out any use or development in relation to the land in respect of which the contravention relates;
  (c) require the respondent to make good the contravention or default in a manner, and within a period, specified by the Appeal Tribunal;
  (d) require compliance with any environmental agreement, environmental improvement programme or environment protection notice; ….

In my opinion, the Act does not exempt the mill from section 48, because it is a provision which regulates pollution rather than use or development. Section 48 is available at the suit of the Director, the relevant local council or an individual with a proper interest, which would include an individual whose person or property was adversely affected by pollution from the mill. The complainant has to show a breach of EMPCA, for example that one of the environmental offences listed above has been committed or that the mill is causing environmental harm by the breach of another Act. If the complainant shows a breach of EMPCA or other relevant legislation, the Tribunal has a broad discretion as to the remedy it grants and is more likely to order that the mill remedy the problem than that it close.

LUPAA
It is probable that civil enforcement orders under LUPAA are available against the pulp mill. Section 64 of LUPAA allows a council and a person with a proper interest to seek a civil enforcement order against a person in breach of Part 3 of LUPAA. It is clear that breach of the conditions in a planning permit issued under LUPAA is such a breach. It seems clear that a breach of the permit under the Act amounts to a breach of a permit under LUPAA, because under section 8(d) of the Act, if, as is the case, much of the permit is taken to be issued under LUPAA, then LUPAA applies as if the permit were issued under its provisions.

Under LUPAA section 64, as under EMPCA section 48, individuals with proper interests, including an individual who suffers loss or damage as the result of a breach of condition, can bring civil enforcement actions. The advantage of section 64 is that under it the individual need only show a breach of a permit condition and does not need to show environmental harm or an environmental nuisance. As with section 48, the Tribunal has a broad discretion and is more likely to order remedial action than to close the mill.

As noted above, permit conditions 8 and 9 substantially water down the duty to enforce permit conditions. The two conditions also effect the right of an individual who has an interest in the enforcement of a condition, to bring an action for a civil enforcement order under section 64 of LUPAA.

Section 8 will make it very difficult for an individual to bring a civil enforcement action without the support of the relevant regulatory authority. On its face, it merely imposes additional evidentiary requirements in that the complainant, to show a breach, would have to show that the condition had not been performed to the satisfaction of the authority with the responsibility of enforcing that condition. Normally, under LUPAA, that is the relevant municipal council. However, it is difficult to see in practice how an individual would prove that there had not been substantial performance to the satisfaction of the council unless the council were a party to the proceedings.

Section 9 may place additional hurdles in the way of a private person seeking a civil enforcement order. It provides that a permit condition is taken to have been performed to the satisfaction of the responsible regulatory authority unless the regulatory authority provides Gunns with notice in writing that the condition is not being substantially performed to its satisfaction. There are two possible interpretations of this condition. The first is that there is no breach of a condition unless and until the relevant regulatory authority informs Gunns that it is in breach. On this interpretation, a private individual could not bring a civil enforcement action under LUPAA s 64 for a breach of condition until the relevant regulatory authority had issued a notice to Gunns that it was in breach. That almost completely rules out the possibility of civil enforcement actions by private individuals.

The other interpretation is that condition 9 creates a rebuttable presumption that the condition is being substantially performed until the regulator issues a notice. On this interpretation, a person bringing an action under LUPAA section 64 would have the onus of rebutting the presumption that there was substantial performance by evidence of substantial non-compliance. If they were able to do that, they would be able to bring the action.

It is not clear which interpretation the courts would prefer, but it is to be hoped that they would prefer the second, as that is more consistent with the enforcement provisions of the Act and goes some way to enabling individuals to exercise their right to enforce. But there is no guarantee that they would do so. Even if the courts adopt the second interpretation of condition 9, condition 8 places major obstacles in the way of civil enforcement by individuals.

 


   

 

Michael Stokes

It is not clear which interpretation the courts would prefer, but it is to be hoped that they would prefer the second, as that is more consistent with the enforcement provisions of the Act and goes some way to enabling individuals to exercise their right to enforce. But there is no guarantee that they would do so. Even if the courts adopt the second interpretation of condition 9, condition 8 places major obstacles in the way of civil enforcement by individuals.