NOF and section 32 of the RMA

Section 32 of the RMA is integral to transparent, robust decision-making on RMA plans and policy statements.

It requires councils to:

• examine the objectives of plans and policy statements (and changes to them), to understand the extent to which they are the most appropriate way to achieve the purpose of the RMA
• examine the other provisions (policies, rules and methods), to understand the extent to which they are the most appropriate way to achieve the objectives
• examine different ‘reasonably practicable’ options for achieving the objectives of the plan or policy statement
• assess the efficiency and effectiveness of the provisions in achieving the objectives
• for efficiency, identify and assess the benefits and costs of new policies and rules, for the community, the economy and the environment
• document the analysis, so stakeholders and decision-makers can understand the rationale and evidential basis for policy choices
• assess the risk of acting or not acting if there is uncertain or insufficient information
• fully integrate section 32 evaluations into decision-making throughout the planning process, and not view it as merely a reporting requirement to complete at the end of the process
• carry out evaluations under section 32 throughout plan development
• ensure that the plan gives effect to the NPS-FM, including:
  • the objective: to align management of natural and physical resources with Te Mana o te Wai
  • the policies: including Policy 15, which specify communities are enabled to provide for their social, economic and cultural well-being in a way that is consistent with this National Policy Statement
• understand the likely benefits and costs of options to give effect to the NPS-FM, and determine the most appropriate methods to achieve the objectives of the plan
• understand the economic and employment consequences of different choices and when to ‘trade off’ values in the same NPS-FM objective priority
• document decision-making, to show compliance with the NPS-FM and transparently communicate the rationale behind decisions.

How does Te Mana o te Wai relate to section 32?

Te Mana o te Wai is the fundamental concept at the heart of the NPS-FM. All decisions about freshwater should give effect to Te Mana o te Wai. This includes decisions during analyses under section 32. This means:

• decisions about the appropriateness of options must prioritise the health and well-being of the water body and freshwater ecosystems, over other uses
• assessments of risk should follow the direction in clause 1.6 about best information (see the section Clause 1.6: Best available information and the NOF)
• assessments should not include options (eg, for TASs, limits, rules or policies) that do not give effect to Te Mana o te Wai (because these would not give effect to the NPS-FM and achieve sustainable management)
• outcomes that give effect to Te Mana o te Wai cannot be ‘traded off’ against those that do not, even if these have lower costs.

It is not consistent with the NPS-FM to lessen the economic impact of an action rather than maintain or restore the mauri of a water body. It is consistent with the NPS-FM to choose the option with the least economic impact to give effect to Te Mana o te Wai.

How does the ‘best information’ requirement relate to section 32?

The section 32 evaluation must take into account the risk of acting or not acting where there is uncertain or insufficient information.

Clause 1.6 of the NPS-FM, ‘Best information’, contains direction on what decisions to make when there is uncertain or insufficient information (see the section Clause 1.6: Best available information and the NOF).

There may not be enough information to assess, for example, the current or baseline state of water quality for a particular attribute, if little or no monitoring has been undertaken. This will be common for relatively new or newly applied attributes (such as ecosystem metabolism, deposited sediment, or novel mātauranga Māori attributes) where these have not been routinely observed in the past.

Uncertainty may arise when there is no information, imperfect information (eg, about cause–effect pathways), or uncertainty from measurement errors or inherent randomness, or the information is ambiguous or could be interpreted in different ways.

The NPS-FM makes it clear that:

• local authorities should base decisions on the best available information and not delay decisions because of imperfect information. A decision to do nothing because there is a lack of information is not an acceptable option
• the risk assessment required by section 32 must assess that risk in the way that will best give effect to the NPS-FM. The fundamental concept, objective and overall policy direction of the NPS-FM is to give effect to Te Mana o te Wai. Information must be interpreted in a way that provides first for the health and well-being of the water body.

Robust section 32 analysis is essential for making informed decisions about different options in regional plans and policy statements.

Regional plans and policy statements must give effect to the NPS-FM (ie, give effect to Te Mana o te Wai). A plan or policy statement cannot have plan provisions that, together, do not achieve this.

This does not mean that water must be pristine and that communities do not have choices. Any choices and analysis should focus on:

• the most appropriate objectives to give effect to Te Mana o te Wai and the purpose of the RMA
• how to achieve the objectives of the plan
• how long it will take to achieve them.

Analysing what objectives to set

The objectives of the plan or regional policy statement must achieve the purpose of the RMA. The NPS-FM sets out objectives and policies for doing this. It is clear and directive that councils must give effect to Te Mana o te Wai, and that the health and well-being of water bodies and freshwater ecosystems have first priority in any decisions.

Options for objectives should not include those that are not consistent with Te Mana o te Wai or that do not give the water first priority. This means that options in the analysis that trade off Te Mana o te Wai for other outcomes need to be eliminated early in the process.

For example, setting a TAS at the current state (rather than above the current state) may provide for existing economic values, while setting them at or above the current level could ‘lose’ a potential economic opportunity. It is not consistent with Policy 5 (requiring councils to at least maintain water quality) to choose the first option – declining water quality but more economic activity – as it would not give effect to the NPS-FM.

Some traditional economic tools for analysing options can focus on optimising social benefits, and may involve trading off, for example, a healthy environment against economic growth. This will not give effect to the NPS-FM, so take care when choosing economic analysis tools for section 32 analyses.

Analysing how to achieve objectives

Section 32 analysis is essential for making good, informed decisions about the costs and benefits of different options.

All options must achieve the objectives of the plan or policy statement and, give effect to Te Mana o te Wai. Eliminate options that do not early in the analysis.

The ‘status quo’ option

The exception is to include the status quo option, to compare the costs of different options with the current situation. This can highlight the amount of change required. For example, comparing the cost of improved sediment control with that of current measures will clarify the change in expected costs to reduce sediment to give effect to Te Mana o te Wai. The analysis should make clear when the status quo is not a viable option (eg, when it is not consistent with Policy 5 because the current state is below the national bottom line).

Costs and benefits

Not all costs and benefits are quantifiable, and those that are, cannot necessarily be monetised. The analysis should use a broad definition of costs and benefits, even if they cannot be directly compared.

The analysis can also compare where costs and benefits will fall. Different methods may place costs on different parts of the community. Clear analysis will allow discussion about who should bear the costs. For example, reductions in contaminants entering a river could come from changes to the source (eg, factories, sewage treatment, stormwater pipes, land use) or by building treatment wetlands to remove contaminants after they have been discharged. These different methods will come at different costs for each type of discharge. Understanding and analysing the costs will inform the decision about the efficiency of the different options and who will bear that cost (the discharger or the wider community).

How long?

Section 32 analysis can inform discussion about timeframes, for example, how long it will take to achieve goals consistent with Te Mana o te Wai. A good understanding of costs can aid the discussion about aspirational goals, such as how long it should take to improve water quality. An improvement in five years may be expensive, but spreading the costs over 30 years may affect how, and on whom, those costs fall.

A point to consider is the cost of delaying action. If a water body is nearing an ecological tipping point, avoiding possibly irreversible degradation may require faster change.

For longer-term goals, consider the impacts of climate change. Weather patterns are likely to change in future, and the impact of higher rainfall or more frequent droughts should be part of decisions about delaying action.

Care should be taken when using economic tools to assess the impact of taking time to implement an action. High discount rates for understanding economic activity over time may undervalue the current environmental quality in favour of investing money elsewhere.

The section 32 analysis should include qualitative costs or costs that are difficult to monetise, for example, the cost to the environment of delaying change, if a persistent degraded state leads to the extinction of local species.