TUWHARETOA MAORl TRUST BOARD

To the Chair and Members: Local Government and Environment Select Committee This is a supplementary submission on the RMA Simplifying and Streamlining Amendment Bill 18-1, 2009, From: Tuwharetoa Maori Trust Board And Lake Taupo Forest Trust And Lake Rotoaira Forest Trust

Contact Address: P.O. Box 126 Taupo 3330. Contact person: Matthew Lark (Manager: Policy and Planning) Ph: 07 377 1438. The Tuwharetoa Maori Trust-Board, and the above-named trusts, hereafter referred to collectively as the board, will be pleased to speak to this supplementary submission, if the chair desires further oral clarification of matters discussed herein. Introduction. 1. This supplementary submission is provided by invitation of the chair of the Local government and environment Select Committee, in relation to a specific matter alluded to in the board's initial submission . The submission attempts to clarify a problem with the proposed RMA amendment bill no 18-1, outlined in sections 14, 15 and 17 of our original submission. 2. IN the time between the completion of our initial submission and our hearing by the committee, we have developed a proposed solution to the problem we highlighted in sections 14, 15, and 17, of the initial submission . This is discussed in full and recommendations are provided, which may assist the committee's further deliber' before it reports back to the house.

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The sources of the problem and our objections to that problem. 3. Sections 14 and 17 of our submission, addressed objections to the intent and potential effect of parts, and clauses in the amendment bill. These are amendment clauses 31 , 49-51, 69, 72, 77, 131 and 139. Taken together, these would in our view, de-legitimise and de-emphasise trade competition and the effects of trade competition, as matters requiring consideration by consenting authorities, and the environment court, and court of appeal, in respect of applications for hearings.

4. Such a proposed intention of the bill, is at variance with the board's view of the importance of these matters, to the welfare, of our beneficiaries, (the people of Ngati Tuwharetoa), and the viability of business and freedom of enterprise generally. The board will not re-iterate arguments already contained in the initial submission, but seeks to expand on its principled objection to these clauses, and then to provide a solution which would involve substantial amendment of the Rma. 5. In respect of trade competition as a legally supported institution of New Zealand society, the board observes that: A. Trade competition is protected and moderated by the Commerce Act 1986. It is also indirectly supported by various laws controlling companies, body corporates, and also those controlling representation of trade, (Fair trading Act 1986) and contracts, (for example the Contractual Remedies Act and the Contractual Mistakes Act) . B. The Commerce Act is the primary reference-point for all persons and entities whose activities whose business requires authentication as commercially competitive, or anti-competitive. The Commerce Commission is empowered by parts I, IV and V, to moderate, authorise and even regulate, such behaviours and therefore is distinguishable as the one body expressly responsible for ensuring societal adoption and adaptation of trading behaviour of various kinds in the country. C. No part of the current Resource Management Act 1991, treats specifically with matters internal to , or externally impingent on, trade competition or its effects, except arguably, clauses of part V, on standards, policies and plans. Even where this part specifies matters of trade within its sections, it only specifies trade competition, and not its effects, as a generic matter, which regional councils or TLA's should disregard; (sections 66(3) and 74(3». This subtlety of the present act, allows competition itself to be circumscribed by such local authorities, where effects are not even legally permissible ~or consideration. Such may be fair enough philosophically, but the addition of "effect of' trade competition would cloud the construction of competition itself, and would make the act an unsafe platform in its current state, owing to its silence on the dimension and potential measurement of "effects of' trade competition. D. The RMA is as yet, in no way related by reference or cross-reference to provisions of the Commerce Act, nor is any of its schedules referential to that act. This makes its claim to be an authoritative benchmark for the moderation of

matters of the effects of trade, virtually untenable, except where matters of trade affect the environment or the use of the environment.

E. The definition of "environment" currently available in the RMA, has no authentic relationship to socio-cultural or commercial notions of trade competition or the imposition of markets, as are promoted by the Commerce Act (section 1A). The current definition focuses on natural, physical and aesthetic elements of environment, without overtly admitting constructs unique to mankind, such as culture and society, or economic domains which would ordinarily include trade competition. An argument for paragraph 0 of the section 2 definition of environment, is shaky in our view. This paragraph states that environment includes: (d) The social, economic, aesthetic, and cultural conditions which affect the matters stated in paragraphs (a) to (c) of this definition or which are affected by those matters:" The terms "which affect" and "are affected by" and the notion of "conditions", make it implausible to suggest that trade, of itself, is admitted as a legitimate aspect of environment, especially the environment populated by human kind. Trade competition and consequently its effects, are only potential products and possibly drivers of "conditions" in this definition and are contingent for their importance, on paras A to C, not on their own merits. Therefore we submit that the linguistic and contextual case for allowing the RMA definition of environment, to be used to arbitrate on matters of trade in any instance, is at best sparse, and at worst, untraceable. F. The inter-legal tension is further accentuated when we consider how the Commerce Act treats with undesirable or potential harmful effects of competition . The act contains numerous sections, (27 to 29, 36 to 36B, 37,47), which specifically prohibit behaviours which would lessen competition. It also has two complementary groups of enabling clauses, which allow individuals or businesses to apply for authorisation by the Commerce Commission, of behaviours or plans which might otherwise be deemed "anti-competitive"; (sections 58 to 65, and 66 to 69B respectively). G. The emphasis here, is on mitigation, and it may be argued that sections such as 58 and following, are tools for prevention and avoidance of harmful effects, by the use of top-down authorisation, for practices which might otherwise lessen competition. The fact that the Commerce Act takes such pains to delineate permissible and potentially non-permissible effects of trade competition in particular is laudable. To amend the RMA to de-emphasise such harmful effects or their perception as such by submitters, consent-holders and consenting authorities, would be to create a wholly counter-intuitive and irreconcilable group of contradictions in New Zealand law, which would be resistent to successful interpretation or clarification, for lay people and lawyers alike.

H. The board further submits that proposed amendment clause 69(2), which amends clause 94A, appears counter-intuitive to the intent of sections 88, 91, 92, 92A and 928 and impedes the force of 93, as these currently stand. Paragraph D of the amendment clause, directs consenting authorities that they "must" disregard, trade competition and its effects. This is contrary to the subjunctive and more permissive "may" of para A of the same section, and also to the responsibility imposed on applicants in section 88, on assessments of environmental effects. It also derogates from and compromises the legal force of consenting authorities' powers to seek further information as prescribed in sections 92 and following . The hortatory verbal form "must" in the phrase "must disregard" gives councils no option, to admit effects of trade competition as implied, stated or forecast by an applicant, or in any report commissioned by a council under section 92(2). This contradicts the fact that councils may admit similar projections of effects, in any other domain or sphere of the environment. This seems incongruous and inconsistent, and highlights the certainty that the whole concept of "environment" in section 2, is now due for wholesale overhaul. Such would make it possible to argue clearly that section 88 assessments, and section 92 requests for further information, could and should, include reference to assessments of effects of trade competition . WE also submit such amendment of the definition of "environment", if precise enough, would work against the proposed para D of 94A, by compelling councils to take more, not less, notice of effects of trade competition, if not of trade competition itself. 6. . The board acknowledged in section 14 of its initial submission, the "worst case" flagship scenario, alluded to in the TAG report, in respect of historic issues of trade competition; a situation which specifically involves supermarkets. However, the TAG report failed to observe that this situation, (where one supermarket chain obstructs another at the submissions and appeal stages), is only one variety of competition, specific to an industry with a distinct trading profile, and generating only one subset of effects. The authors of the TAG report failed to analyse the matter according to different magnitudes, impacts, and economic and social imprints of trade in various forms. They also failed to provide adequate parsing of the problem to allow admission of different trade behaviours in different industries, in a diverse array of regional and local trading contexts. Also, their analysis failed to acknowledge that different trading profiles, or "foot-prints" of individual businesses, or industries, will generate widely variant competition effects, which cannot be homogenised even where historic patterns of behaviour are used to inform interpreters' views of likely or actual effects, arising from new resource consent applications. WE don't think it was too much to ask a group with the expertise this one had, to do this kind of analy.sis. 7. The board believes the "supermarket" example, taken on its own, is unhelpful because it admits only one historically documented predatory behaviour in one sector, and focuses on only one trrade profile of one specific industry. WE would liken inspecting the problem in this light, to examining bacteria through a microscope with an opaque lens; i.e. one example is not the whole of the problem, and can determine only a small percentage of the possible solutions.

8. Another failure of the analysis provided by the TAG report, and inherent in the bill itself, is a failure to consider the importance of effecs of trade competition on the social and cultural feedback loops operable between a community and its consenting authorities. The dynamics of these loops are sociological, not legalistic, and their presence may make communities and individual citizens resistent to reduction of trade competition and its effects, and their contribution to wider environmental discourse, by legislative means alone. The amendment clauses 69(2), and 131 and 139 in particular, assume the notion that communities would or should place trust in councils and courts, to handle matters relating to trade competition, by internalising them and judgments upon them. Such an assumption ignores the subtleties presented by individual cases of social resistence to change, and also ignores the newance of cultural shift or behavioural antipathy and/or empathy for trade, and competition. Such trends may be clear ina community only over time, not through one concentrated reaction to the imposition of a legal instrument such as these clauses constitute. The board asks why the public of New Zealand should be expected to have such faith in councils in particular, to self-moderate effects of trade competition in local communities, by disregarding them, when they cannot easily disregard any other effect on the wider environment of any other phenomenon. This separation of trade competition and its effects, is entirely counter-intuitive to democratic process and the four well-beings as outlined in the Local Government Act 2002; a point which seems to have escaped those drafting the bill. Exploration of possible solutions. 9. The board strongly believes that the preceding arguments highlight a range of infra and inter-legal incongruities which need careful analysis and criticism. Such may form part of an effort to find a better means of accounting for trade competition and its effects, within the RMA. The board wishes to contribute some exploratory ideas to this debate.

10. A clear analytical premise for finding solutions, seems to be that trade and trader profiles, of companies and industries, must be classified, along with effects of competition which would result from the interaction of different traders. WE have attempted to reduce the term "competition" to a transparent group of "states" and "characters", which might be interpreted as "classes" of competition. WE find such analysis is illusory at best, and fails to assist in the fashioning of a simple class-based tool which any consenting authority could use daily. The classification of profiles of trade sectors and traders is much easier, and some steps towards parametric and thematic approaches to doing this are discussed below. 11. The Board has identified premises and prescriptions in the Commerce Act in particular which make it impossible to ignore legal oversight of trade competition. Having highlighted these, we wish to suggest that an amended RMA must take account of the intent of the Commerce Act and what it protects, better than the current proposed amendments do.

WE suggest that one or more of the following could serve to act as a bridge for operational clarity, for councils where such is necessary to assess all types of effects. A. An amendment to the RMA by section, directing councils to take account of, and make determinations on, different classes of trade and trader profiles" and classes of effects of trade competition. This amendment could be in part V, and may direct councils to have regard to such new classes, in the design of their regional and district plans. Or, it could be a nationally-oriented directive, requiring all consenting authorities to observe and manipulate a "blanket" schedule or regulation, which describes such classes and a methodology for using them to make decisions about any application. B. An amendment by schedule which erects the classes of trade and trader profile, and classes of effects of trade competition. Such a schedule would define them parametrically, or against a standardised set of indicators, numerical measures or operating ranges, , or a combination of these, such that a unique combination of parameters can be used to describe each class. Schedule 3 of the RMA on water quality standards is the closest internal parallel to our proposal. The committee could examine schedules and regulations of the HSNO and ACVM Acts, to see other examples of how classes are defined with the specificity we envisage. C. A supplementary amendment by section, which directs consenting authorities to quantify and qualify an effect of trade competition as major or minor, by applying a series of thresholds or admission tests, to the classes of profiles, and effects in B. D. A supplementary amendment by schedule, providing a step by step methodology for determining such thresholds, .across one or more classes of trade profiles, and effects of trade competition, which will provide a basis for assessment as major or minor. Importantly this methodology schedule should provide clear formulae, and offer examples of likely thresholds, within and between classes of profiles and effects, which consenting authorities can use as models for their determinations when processing consents.

This schedule should provide guidance on a cumulative ranking system, or other statistical ranking tool, which councils can use to measure several classes of effects and/or trading profiles together. The aim is to reach easily communicable thresholds, beneath which an effect is minor, and above which it is major. The law should not permit consenting authorities to adopt their own novel systems but should prescribe one workable system with several methods housed within it. It is likely such a system will adopt statistical methods which are widely available, rather than a custom-built suite of solutions. E. An amendment by insertion of a new paragraph in section 92, requiring councils to seek further information from applicants or through commissioned reports, on likely effects of trade competition, before fully processing applications to the point of notification, or where that is not applicable, to the point of approval.

12. During our hearing, the question of what parameters might effectively describe classes of trade profiles and effects, was rightly asked by a committee member. The board believes this question may have a multitude of answers, which may only be revealed fully after lengthy and formalised policy analysis has taken place. WE note that a full matrix-based criteria-driven analysis probably won't give the fullest appreciation of possible parameters which may define classes. Far simpler approaches such as multi-centric mind-maps or influence diagramming which seeks clarity by the use of loops and branches for feedback, may be all that is required by analysts, to produce firm unbreakable characters or properties which can be used to describe a class of trader, or trade profile. WE can offer more insight if the committee requires it. 13. The board offers the following potential parametric descriptors for the definition of classes, but urges the committee to seek further insights from other analysts it can call on. WE divide our suggested parameter or property names, as follows. I. Properties which may be used to describe and define classes of trade and trader profile.

A.

acquisition and take-over profile; B. Capital asset profile; C. Cash asset profile; D. supply-chain profile or magnitude (i.e how long and wide are the supply lines which sustain a given company within a market); E. geographic profile (i.e. where does a company trade and what is its usual, rather than optimal reach in terms of market share and penetration?); F. Market diversification (a component of but not all of market reach); G. Structural diversification (is it one big company or one flagship with several subsidiaries, joint ventures, etc); H. Number of employees/contractors; I. Comparable market share, (i.e. what part of a market does the trader have in regions or districts of comparable size to the one under consideration in a consent application); J. Environmental foot-print. This could be broken down to readily analysable descriptors such as volumes of land-based resources used, types of resource use, volume and type of discharges permitted or actual, number of activities undertaken by a trader or trade, where activities are those specified in section 77B of the act. II. Properties which may be used to describe and define classes of effects of trade competition. Note: the current RMA definition of "effects", in section 3, is adopted in suggesting these properties, hence the absence of reference to time, likelyhood and probability, which are all constituents of that definition. A. Change in local market diversity; B. B. Change in local pricing or change in determinants which guide pricing practice, arising from an applicant's entry into the market;

C. C. Change in visibility of all existing market players. (This may be one of those parameters informed by historic data and actual data in comparable localities to the one in which a trader is applying for consent to do business). D. Distribution of employment opportunities (vacancies and filled D. positions), within the trader's or trade's specific sector; E. E. Displacement or exclusion of existing business within a trader's or trade's specific sector; F. Distribution of effect on supply of goods or service in a trader's or F. trade's specific sector; G. Distribution of effect on demand in the same; G. H. H. Change in local and regional behaviours of suppliers to the sector of any trader or trade; I. I. Fragmentation or disjunction in local/regional markets of any sector; (this includes markets that sector supplies, and those supplying or servicing it). It is noteworthy here that the descriptors are only fully analysable when plugged into contexts with modifiers of time, likelyhood, or probability. So one would use a mixture of the descriptor, with terms like historic, present, future, probable, or likely, to develop the basis of thresholds, which would determine whether an effect is major or minor. 14. The board notes that the use of classes of effects is already well supported in part V of the RMA in respect of activities. It is specifically supported in section 68(5)(b)1I in respect of regional rules, and 76(4)(b)1I for district rules. Such precedent seems to us, to allow a new construction of classes of effects, to be admitted into the RMA as promoted in section 11 of this submission. 15. The board admits that adoption of this approach would require consequential re-drafting of the proposed part 11A (amendment clause 139). Such amendment would only have to admit the notion that some appeals may be heard on trade competition and its effects, where a council has deemed them to be major through the methodology proposed in sections 11-13 of this submission. Any appeal contesting only minor matters of trade competition and its effects, as determined by that methodology, could be dismissed. This would achieve the end of decreasing the volume of vexatious appeals, made on the basis of trade, without eroding the value of legitimate ones on major matters. Possible Outcomes. 16. The board believes some likely outcomes of adopting this novel process by way of amendment could include: A More public confidence in consenting authorities' decisions on matters of trade competition and its effects; B. More transparency and clarity of decision support tools used within consenting authorities to make determinations of this kind; C. Greater attention paid by consenting authorities to socio-cultural and economic variables in their local environment, through more careful assessment of trade competition impacts; D. Higher values placed by applicants, and authorities on social values inherent in the consenting process;

E. A higher expecttation by consenting authorities of applicants and submitters, resulting in more serious attention within applications and submissions, to precise and relevant matters, over emotive ones; (This bar-raising wi" doubtless unnerve some submitters in particular, where councils have their own ways available of determining the impact of trade, which they didn't have before). F. Greater surety within the environment court and appeal court, of robust decision-supporting tools whose use can assist judges and applicants when they address the perceived, and actual importance of trade and its effects; G. Decrease in potentially vexatious submissions and appeals on the basis of trade, owing to confident application of threshold-based tools for determining impact of trade. Recommendations. 17. The board wishes to make the following recommendations on the further use and analysis of the contents of this submission.

A. That the committee receives this submission as part of the full submission of Ngati Tuwharetoa Maori Trust-board, and that it be admitted as a members' paper for internal scrutiny by the committee, before the reporting deadline for this bill.

B. That the committee contacts the board to clarify any points in this submission, or that it authorises its own advisors in the Clerk's office, or analysts outside of Parliament, to do so, in the event it finds this submission is worth taking further. C. C. That the committee seeks the opinions of analysts and drafting specialists within the Ministry of Economic Development, the Ministry for the Environment, the Commerce Commission, the Crown Law Office, and the Parliamentary Council Office, on this paper. Such opinions may inform the committee's view more clearly and more fruitfully than the foundation material provided here. D. That in the event the committee accepts this submission's content as worthy of incorporation into new amendments, it ensures careful analysis of options for adoption is prepared by officials, before any ideas herein are used to form the basis of statutory amendments. Such analysis will necessarily include examination of how these ideas impinge upon other sections of the amendment bill, than those we have discussed. WE note that time has prevented full and detailed "team-based" analysis of some latent matters arising from the solution suggested in sections 11 to 13. Such would need to happen to filter and discount anomalies, before the proposed solution could go before a drafting team to turn into a series of amendments. 18. The board infers a real privilege from the invitation to provide this supplementary submission. WE hope the work done here goes some way to

solving an extremely complex public law and policy matter, which we've found resists many of the conventional tools available to a trained analyst. We sincerely hope this submission at least informs further amendment of the act on this matter, and at most, assists in adding value to the nature and style of that amendment. WE look forward to any further engagement the committee may request of us.