Apples For Oranges? Biodiversity Offsetting In New Zealand

AuthorAnnabel Linterman
PositionRussell McVeagh, Auckland. Winner, Canterbury Law Review Prize 2012
A L*
I. I
e concept of biodiversity osetting is a relatively recent measure in
environmental and resource management law and planning that is enjoying
increasing popularity worldwide. It aims to address the long-standing and
inherent tension between the desire for development and economic well-being
and the need to conserve and protect the ecological health and biological
diversity of the environment. While it oers a unique range of benets, it is
not without criticism. Diculties arise over measurement, assessment and
enforcement of oset proposals. Deeper concerns relate to the vulnerability
and irreplaceability of biodiversity, and in this respect, critics contend that
the practice endeavours to compare apples with oranges. is paper seeks
to examine the development and eectiveness of biodiversity osett ing in
New Zealand within the country’s resource management regime. To date,
this appears to have been occurring in an ad hoc and somewhat uncertain
manner and arguably requires more robust direction. Guidance will be
drawn from international experience and commentar y in order to provide
recommendations for the future of the concept in New Zeala nd.
e nature and benets of biological diversity, or biodiversity as it is most
commonly referred to, will rst be introduced.1 e concept of biodiversity
osetting wil l then be explained, including a discussion of its place within
wider environmental compensation measures. Drawing from international
experience and guidance, t he positives and negatives of the practice will be
canvassed. Biodiversity oset ting in New Zealand will t hen be examined and
its various issues and uncertainties outlined. e concept in New Zealand
will be considered in the context of applications for resource consent under
the Resource Management Act 1991 (“RMA”), as this is arguably where
its use is most likely to arise. It is important to keep in mind the broader
scope and purpose of sustainable ma nagement under the RMA. e paper
will then turn to the more “market based ” New South Wales “BioBanking”
scheme provided for under the reatened Species Conservation Amendment
(Biodiversity Banking ) Act 2006 (NSW). e paper will nally attempt
* Russell McVeagh, Auck land. Winner, Canterbur y Law Review Pri ze 2012. e author
wishes to tha nk Liz Toomey, Derek Nolan and David Round for thei r help and assistance in
developing thi s essay.
1 In a strict sense, biodiver sity more narrowly refers t o species richness ba sed on the total
number of species pres ent. For the purposes of this di scussion, it will encompass t he broader
notion outlined below.
to make recommendations for the future of biodiversity osetting in New
Zealand, draw n from reections on the positives and negatives of the practice
and the strengths a nd weaknesses of the New South Wales regime.
e impetus for this paper is two-fold. e world is currently facing an
almost unprecedented biodiversity crisis. While biodiversity varies naturally
in cycles, it has been noted that nothing since t he extinction of dinosaurs 65
million years ago compares to the rate of decline of indigenous biodiversity
in the past century.2 In this context, it is important to consider whether the
“osetting” of biodiversity is an appropriate measure in New Zea land and,
if so, whether and how it may assist in addressing this decline. In 2010, the
Ministry for the Environment prepared a proposed National Policy Statement
on Indigenous Biodiversity (“NPS”), which was notied under the RM A in
January 2011. e NPS sets out policies and objectives for managing natural
and physical resources under the R MA in order to maintain indigenous
biodiversity. It specically addresses the use of biodiversity osett ing in
Policy Five and S chedule Two.3 Submissions on the NPS were highly critical,
particularly in relation to the biodiversity osetting principles included
in Schedule Two. erefore, it is important to consider whether the NPS
provides appropriate guidance for the future of the practice in New Zealand.
II. B
A. What is Biodiversity?
At its simplest, biodiversity describes “the variability among living
organisms and the ecologica l complexes of which they are a part, including
diversity within species, bet ween species and of ecosystems”.4 Subparts of
this broader notion include indigenous biodiversity, which occurs naturally
in a particular country; endemic biodiversity, which breeds exclusively in a
specic locality; a nd introduced biodiversity, which has been brought to a
particular plac e by intention or accident.
2 Ministr y for the Environment “New Ze aland Biodiversit y Strategy” (Febr uary 2012)
Ministr y for the Environment nz-biodiver sity-
strateg y-feb00.html> at 4.
3 Ministry for the Env ironment “Proposed National Polic y Statement on Indigenous
Biodiversity” ( January 2011) Ministry for t he Environment
4 Busine ss and Biodiversity Oset s Programme Glossary – 2n d ed (Forest Trends, Washington
DC, 2012) at 5; Ministr y for the Environment, above n 2, at 137; Resourc e Management Act
1991, s 2.
132 Canterbury L aw Review [Vol 19, 2014]
e benets obtained from functioning biodiversity are ma ny and varied.
Often referred to as ecosystem ser vices, they encompass four broad categories:
provisioning, regulating, supporting and social or cultural.5 More tangible,
direct benets include the provision of food and resources for domestic and
commercial use. Indirect benets include the regu lation of atmospheric carbon
levels and temperature, waste decomposition and nutrient recycling, nutrient
ltering by riparian and wetla nd vegetation, water storage, retention of soil
by catchment vegetation, provision of habitat for native species and provision
of resources for medicinal use. Furt her benets are passive, such as both the
value of biodiversity for potential future and unk nown uses and its continued
existence as a bequest to future generations.6 e provision of these services
illustrates that the huma n population is dependent on biodiversity and that
the protection of biodiversity is a vital aspect of sustainable management.
However, the value of biodiversity and ecosystem services is often
overlooked or poorly understood and the benets derived are consequently
often neglected or undervalued in environmental decision making.7 e
drive to continue to develop economically and corresponding destruction of
habitat, and the generally static amount of money available for conservation
programmes mean targets set for maintaining biodiversity are not being
reached. e world faces one of the biggest extinction crises in h istory.
Madsen, Carroll and Moore Brands believe that a “built infrastruct ure” is
being created at the expense of the earth’s “natural infrastructure”, and that
the costs of biodiversity loss will increasingly be felt through climate change,
water scarcity, ooding and disease.8
B. Biodiversity in New Zealand
New Zealand ’s isolated evolution and the diversity of its land and
coastlines have created remark ably high levels of endemic, indigenous
biodiversity. It has been described as “the closest scientists will get to studyin g
life on anot her planet”.9 Indeed, the country’s mammals, amphibians and
reptiles are not found elsewhere in the world.10 e uniqueness of much
of New Zealand’s biodiversity oers a substantia l range of benets. ese
include the provision of resources for agriculture, horticulture and scientic
5 Busi ness and Biodiversity O sets Programme Standard on Biodiversity Osets (Forest Trends,
Washington DC, 2 012) at 15.
6 V Froude “Ind igenous Biodiversity ” (2012) Quality Planning
plan-topics/indi genous-biodiversity.php>.
7 Marketing and C ommunications Group Biodive rsity Osets Prog ramme (Depart ment of
Conservat ion, January 2010) at 5.
8 B Mads en, N Carroll and K Moore Brands St ate of Biodiversity Markets R eport: Oset and
Compensation Progr ammes Worldwide (Ecosystem M arketplace, 2010) at viii, 1.
9 Mini stry for the Environment, ab ove n 2, at 1.
10 Conservat ion International “New Ze aland: Over view” (2012) Conservation Inter national /priority_areas/hot spots/asia-pacic /New-Zealand /Pages/
Apples for Oranges? Biodive rsity Osetting in New Zealand 133
research,11 opportunities for recreational activities, the “clean green” brand
and “backdrop and essence” of much of the country’s tourism industry, a
basis for many national emblems, such as the kiwi, silver fern and koru,
general natural cha racter and a sense of place and identity.12
However, New Zealand has been identied as one of 34 global terrestrial
biodiversity hotspots. Each hotspot faces extreme threats and has already
lost 70 per cent of its original vegetation.13 In fact, New Zeala nd has one
of the worst records of indigenous biodiversity loss, with both a reduction
in the area occupied by biodiversity and a reduced abundance of species in
communities and ecosystems.14 e Ministry for the Environment recognises
that this loss will continue unless intervention occurs to protect biodiversity
and ecosystems from the many threats they face.15 In addition to the impact
of development on ongoing habitat loss and modication, a major threat in
New Zealand is t he introduction of invasive species, which have become pests
and weeds.16
C. Protection of Biodiversity in New Zealand
Approximately 30 per cent of New Zealand’s land area is in public
ownership and protected for conservation purposes. However, much consists
of mountainous and unproductive land. e remaining 70 per cent of
private land includes many signicant and import ant areas of indigenous
bio di ve rs ity.17 e protection of such biodiversity is challenging. Protection
tends to oer “long-term, indirect and diuse” benets, wh ich are enjoyed
by the wider community while placing heavy costs on landowners in terms
11 See M inistry of Econom ic Development Bioprospecting : Harnessing Bene ts for New
Zealand ( Ministry of Economic De velopment, 2007).
12 Froude, above n 6 .
13 Conservation Internationa l “e Biodiversity Hotspots” (2012) Conservation International
Business and Biod iversity Osets Progr amme, above n 4, at 5.
14 Business and Biodiversit y Osets Programme, a bove n 4, at 6.
15 Ministry for the E nvironment, above n 3, at 1; Ministry for t he Environment, above n 2, at
16 M inistry for the Envi ronment, above n 2, at 6; Conservat ion International, above n 10.
17 Minist ry for the Environment “Que stions and Answ ers for the Proposed Nationa l Policy
Statement on Indigenous Bi odiversity” (Dece mber 2011) Ministr y for the Environment
iodiversity/questions-and- ml>; A Memon and P Skelton “e Practic e of Environmental Compe nsation
Under the Resource M anagement Act 1991” (2004) 8 New Zealand Jour nal of Environmental
Law 177 at 182-183.
134 Canterbu ry Law Review [Vol 19, 2014]
of maintena nce, enha ncement and foreg one economic opportunities.
Conversely, the benets, generally economic, of developments that destroy
or degrade biodiversity tend to be “immediate, direct a nd easily captured”.18
Biodiversity on private land is currently protected in New Zeala nd
through a range of legislative a nd other measures. e protection of “areas
of signicant indigenous vegetation and signi cant habitats of indigenous
fauna” is recognised as a matter of national importance under s 6(c) of the
RMA . e weight of importance attached to s 6(c), as against any other
matters of national importance listed in s 6, is a matter of discretion for the
consent authority or the Environment Court in any given case,19 and a ll are
subservient to the s 5 purpose of sustaina ble management.20 Regional counc ils
and territorial authorities are mandated by ss 30 and 31 of the RM A with the
specic function of maintai ning indigenous biodiversity.21 Section 62(1)(i)(iii)
of the Act requires any regional policy statement to state the local authority
responsible, in the whole or any part of the region, for specifying objectives,
policies and methods to control the use of land to maintain indigenous
biodiversity. However, again, this responsibility is to be undertaken within
the context of Part II of the Act and is subject to the overall purpose of
sustainable mana gement.
Under s 14(h) of the Local Government Act 2002, loca l authorities are
required to take a sustainable management approach to their roles which
takes into account the social, economic and cultural well-being of people
and communities, the need to maintain and enhance the quality of the
environment, and the reasonably foreseeable needs of future generations.
e planning processes specied under the Act deliver the non-regulatory
components of indigenous biodiversity maintenance, mainly through the
allocation of resources to programmes a nd protection and enhancement
initiatives.22 e Conservation Act 1987 promotes the conservation of New
Zealand’s natural and historic resources. e Biosecurity Act 1993 provides
for the exclusion, eradication and eective management of pests a nd unwanted
organisms. e Forests Act 1949, as amended in 1993, aims to bring an end
to unsustainable har vesting and felling of indigenous forests. Further statutes
oering protection include the Fisheries Act 1996, National Parks Act 1980,
Reserves Act 1977 and Wildlife Act 1953.
18 A t 183; A Rajvanshi a nd V Mathur “Biodiversity conser vation and development: challe nges
for impact asse ssment” in R Slootweg and ot hers (eds) Biodiversity in Env ironmental
Assessment: Enhancing Ecosystem Services for Human Well-Being (Cambridge, Cambridge
University Press, 2 010) 59 at 65.
19 Crater L akes Park Ltd v Rotorua Dist rict Council EnvC Auc kland A126/09, 2 December 200 9
at [1 76].
20 Meridian Energ y Ltd v Wellington City Counci l EnvC Wellington W031/07, 14 May 2007 at
21 Not ably, these are the only functions w ithin the Act that have a spe cic objective embedded
within them.
22 Froude, above n 6.
Apples for Oranges? Biodive rsity Osetting in New Zealand 135
New Zealand is a party to the Convention on Biological Diversity,
which was signed at the United Nations Conference on Environment and
Development in 1992 in Rio de Janeiro, Brazil, and ratied on 16 September
1993. e objectives of the Convention include the conservation of biological
diversity and the sustainable use of its components.23 In 2002, the parties
committed themselves to achieve a signi cant reduction in the current rate of
biodiversity loss at both the national and global level by 2010.24 ese targets
were not met and new aims were set for the 2011-2020 period at the tenth
meeting of the Convention in Aichi, Japan in 2010.25 At the eleventh meeting
in Hyderabad, India in October 2012, the parties agreed to double resources
for biodiversity protection by 2015.26
Prepared in February 200 0, the New Zealand Biodiversity Strategy reec ts
New Zealand ’s commitment to the Convention on Biological Diversity.
Its purpose is to establish a strategic framework for action to conserve and
sustainably use and ma nage New Zealand ’s biodiversity with a bottom line,
under Goal ree, of halting the decline in indigenous biodiversity.27 It
specically ai ms to strengthen the role of the RMA in biodiversity protection.
is has been challenging due to tensions between landowners’ desires for
use and development and the need to protect species and habitats on private
land, and due to the fact that ecos ystems are not always conned to denable
sites.28 e Ministry for the Environment recognises that t he Strategy’s overall
success is “reliant on the goodwill and s ympathetic management of the many
private landowners on whose properties indigenous species and ecosystems
re ma i n”. 29
In April 2007, Ministers for the Environment and of Conservation, David
Benson-Pope and Chris Carter, released the Statement of National Priorities
for Protecting Rare and reatened Indigenous Biodiversity on Private La nd
(“National Priorities”). ere are four priorities, each accompanied by useful
classic ation tools:30
1. To protect indigenous vegetation associated with la nd environments
that have
23 C onvention on Biological Diversit y 1760 UNTS 79 (opened for signature 5 June 1992,
entered into force 29 Decemb er 1993), art 1.
24 A Gillespie A Missing Piece of the C onservation Puzz le: Biodiversity O sets (Depart ment of
Conservat ion, March 2012) at 2.
25 Convention on Biological Divers ity “Strategic Plan for Bio diversity 2011-2020, including
Aichi Biodiver sity Targets” (2012) Convention on Biological Diversity .
26 C onvention on Biological Diversit y “COP 11” (2012) Convention on Biological Diversit y
27 Minis try for the Environment, above n 2 , at 1, 17.
28 Minist ry for the Environment, above n 3, at 1.
29 At 2.
30 Depa rtment of Conserv ation Protecting our Places: Information about the Statement of National
Priorities for Pr otecting Rare and  reatened Biodive rsity on Private Land (M inistry for the
Environment, Apri l 2007) at 2.
136 Canterbur y Law Review [Vol 19, 2014]
2. twenty per cent or less remaining in indigenous cover;
3. To protect indigenous vegetation associated with sand dunes and
4. ecosystem t ypes that have become uncommon due to human activity;
5. To protect indigenous vegetation associated with ‘originally ra re’
6. ecosystem t ypes not already covered by priorities 1 and 2;
7. To protect habitats of acutely and chronically threatened indigenous
A wider programme of biodiversity action involves a number of public
and private entities engaged in fundin g and managing protection, restoration
and recovery programmes, such as, the Biodiversity Advice Service Fund
and Biodiver sity Condition Fu nd.31 Despite the tensions outlined above, an
increasing number of private landowners are also register ing Queen Elizabeth
the Second National Trust (“QEII National Trust”) “open space covenants”
over their land. ese mechanisms a ssist in legally protecting signic ant
natural and cultural features on private land. From June 2011 to June 2012,
149 covenants covering 3,436 hectares were registered and a further 155
covenants covering 8,475 hectares approved for registration.32
e NPS, prepared by the Ministry for the Environment in 2010, was
notied for consultation under the RM A by the Minister for the Environment
in January 2011. e process for consulting on and developing the NPS was
determined by the Minister under s 46A(1)(b). e NPS’ stated objective is
… promote the maintenanc e of indigenous biological d iversity by protecting a reas of
signica nt indigenous vegetation a nd signicant habitat s of indigenous fauna, a nd
to encourage protect ion and enhancement of biodiver sity values more broadly wh ile
supporting best pr actice of local author ities; recognising t he positive contributions of
landowners as g uardians/ka itiaki of their land; a nd recognising that t he economic, social
and cultura l well-being of people and com munities depends on, amongs t other things,
making re asonable use of land.
In this sense, the NPS recogn ises the inherent conservation-development
tension and seeks to help decision makers appropriately balance the protection
of biodiversity with the rights and responsibilities of landowners and broader
national interests.34
31 Ministry for the Env ironment, above n 3, at 1.
32 Qu een Elizabet h the Second National Trust Ann ual Report 2012 (Queen Eliz abeth the
Second National Trust , 30 June 2012) at 4.
33 Min istry for the Environment, a bove n 3, at 5.
34 At 2.
Apples for Oranges? Biodive rsity Osetting in New Zealand 137
e NPS contains a list of criteria for identifying a reas of indigenous
vegetation and habitats of indigenous species that have been recognised as
rare and/or threatened at a national level, which is based on the National
Priorities.35 It seeks to bring more clarity to the role of local authorities in
biodiversity management under the RM A than may be apparent on the face
of the Act itself and encourage them to introduce a “bottom-line” category
of these rare and/or threatened sites and species.36 is is reected in Policy
ree, which provides that “any policy statement notied after the date on
which this NPS takes eect, shall… include criteria for the identication of
areas of signica nt vegetation and signicant habitats of indigenous fauna”,
and Policy Four, which provides that “district plans and a ny relevant regional
plans shall identif y, using (where practical) maps and/or schedules, areas
of signicant indigenous vegetation and signi cant habitats of indigenous
fa una”. 37 ese must be implemented within ve years of the NPS taking
eect. Local authorities are required to manage the eects of act ivities
through district a nd regional plans and resource consent decisions to ensure
no net loss of signicant indigenous biodiversity, as provided for in Policy
Nevertheless, the NPS explicitly is “not meant to be a substitute for, or prevail
over, the RMA’s statutory purpose or statutory tests already in existence”.38 It
is intended to be a relevant consideration, along with the various other relevant
considerations, in achieving the susta inable management purpose of the Act.
ere were 426 submissions received on the NPS and the Ministry for the
Environment is currently preparing a report and recommendations for the
Minister for the Environment. A number of submissions strongly expressed
a range of concerns over its wording and sought various amendments. e
Government intends to consider the Waitangi Tribunal’s report on Claim
262 before nalising the NPS, as pa rt of this claim relates to rights in respect
of indigenou s ora and fauna.39
III. B O
A. What is Biodiversity Osetting?
Biodiversity osetting is conser vation action intended to address the
unavoidable environmental eects caused by development. It is commonly
seen as a last resort measure applying only to signicant, residual eects
after all rea sonable measures have been taken rst to avoid and minimise the
35 At 2 .
36 At 2.
37 At 6.
38 At 2.
39 At 2.
138 Canterbur y Law Review [Vol 19, 2014]
impact of a development project and then to restore biodiversity on-site.40 It
endeavours to result in measurable conservation outcomes that are t ypically
required to be “like-for-like”, conserving the same type of biodiversity as
that aected by the development, or “like-for-like or better”, conserving
biodiversity components of a higher conservation priority.41 e practice aims
to achieve no net loss, and preferably a net gain, of overall biodiversity with
respect to species composition, habitat structure and ecosystem f unction, and
people’s use and cultural values associated with biodiversity.42
Biodiversity osetting can be implemented in a variety of ways which
may lead to dierent conservation outcomes.43 Maron and Hobbs helpfully
classify these as “averted loss” osetting, which includes the protection
and maintenance of sites that would otherwise be under threat of clearing
or degrading, and “restoration” osetting, which includes improving the
quality or extent of habitat or vegetation through improved management,
revegetation or creation of new habitat.44 Osetting can a lso be seen as direct
or indirect, direct being the creation of equal or greater biological diversity
than that lost, and indirect being measures such as in situ fees pa id by the
applicant, research, education and tradin g or banking osetting credits.45 e
concept may be utilised within schemes where there is sti ll a strong, regulatory
underpinning or as part of a n essentially unregulated, market-led approach.46
Nonetheless, biodiversity osetting is broadly seen as an alternative to state
control over the environment, allowing a much greater part to be played by
private initiatives or, as in the latter case, the market.47
e practice occurs internationally a nd is arguably one of the fastest
growing concepts in conservation policy.48 In some countries, “sophisticated
and mature systems” have developed, while other countries, such as New
Zealand, are in the early stages of investigation and adoption. e various
systems are very often dependent on the part icular country’s unique economic,
political, institutional and cultural conditions.49
40 Business a nd Biodiversity Oset s Programme Biodivers ity Oset Design Hand book – Updated
(Forest Trends, Washington D C, 2012) at 7.
41 Bu siness and Biodiversity O sets Programme, above n 4, at 27.
42 At 8, 30.
43 A Gordon and others “Assessin g the impacts of biodiver sity oset policies” (2011) 26
Environmental Modelling and Software 1481 at 1482.
44 M Maron a nd R Hobbs “e Reality of Bio diversity Oset s” (2012) 33(9) Australasian
Science 46 at 46.
45 J Quintero and A Mathur “Biod iversity Osets a nd Infrastruc ture” (2011) 25(6) Conservation
Biology 112 1 at 11 21-1122 .
46 C Reid “e Privat isation of Biodiversity? Possible New A pproaches to Nature Conserv ation
Law in the UK ” (2011) 23(2) Journal of Environmental Law 2 03 at 205.
47 At 205.
48 Maron and Hobbs , above n 46, at 46.
49 Mad sen, Carroll and Moore Brand s, above n 8, at vii.
Apples for Oranges? Biodive rsity Osetting in New Zealand 139
B. Biodiversity Osetting and Environmental Compensation
e terms “biodiversity osetting” a nd “environmental compensation”
are frequently used interchangeably, or the former described as a subset of
the latter.50 In Europe, for example, biodiversity osetting is de scribed as
compensation, while in North America, it is referred to as mitigation.51 Such
intermingling of terminology ca n make the concept and its proper application
confu sing.
e Business and Biodiversity Osets Progra mme (“BBOP”), an
international collaboration of companies, nancia l institutions, government
agencies and civil society orga nisations, and from which much guidance is
drawn worldwide, specically distinguishes the two terms. BBOP purports
that a biodiversity oset achieves no net loss, or a net gain, conservation
outcome, while compensation can involve reparation that falls short of
achieving no net loss, for a variety of rea sons.52
Various authors reinforce this distinction, albeit with slightly di erent
reasoning. In the recent RM A Principles Technical Advisor y Group Report,
Dormer and others state that osetting must relate directly to the values
aected by an activity, while any measure without this connection can
more properly be described as environmental compensation.53 Simi la rly,
Christensen sees osets a s addressing the residual eects of a proposal. He
believes they are a form of mitigation because they reduce the overall eects
of a proposal, and so can be considered under the “avoid, remedy or mitigate”
formula in s 5(2)(c) of the RMA and as an “actu al or potential eect” on
the environment under s 104(1)(a).54 Conversely, he believes environmental
compensation is not a form of mitigation that reduces adverse eects, rather
it is a method to counter-balance adverse eects, and as such can validly be
considered as an “other matter” under s 104(1)(c).55 ese distinctions in the
New Zealand context will be further discussed below.
C. Positives or Benets of Biodiversity O setting
e benets of biodiversity osetting are numerous and widely recogn ised.
Advantages are received by biodiversity itself, business a nd developers,
government and local author ities, and t he wider public.
50 M Chris tensen “Biodiversity Os ets” (presentation to Straterra S eminar, Wellington, March
2011) at 2.
51 D Norton “Biodiversit y Osets: Two New Zeala nd Case Studies a nd an Assessment
Framework” (20 08) 43 Environmental Management 698 at 698.
52 Bu siness and Biodiversity O sets Programme, above n 4, at 10.
53 A Dormer and othe rs Report of the Minister fo r the Environment’s Re source Management Act
1991 Principles Technical Advisor y Group (Ministr y for the Environment, Ref. CR 125,
February 2012) at 87-88.
54 M Christens en Biodiversity Ose ts – A Further Update on the Law (A nderson Lloyd Lawyers,
November 2012) at 16.
55 A t 16.
140 Canterbury Law Review [ Vol 19, 2014]
e starting point is that biodiversity osetting places a clear value on
biodiversity and its associated ecosystem ser vices. It is imperative that the
value of natural infrastructure and ecosystem services is no longer ignored.
e price of biodiversity is simply not zero.56 If positive and negative impacts
on biodiversity are measured and represented as credits and debits, they can
more easily be integrated as benets or costs in economic decision-making.57
Giving such value to biodiversity reects the reality of the economic basis
upon which modern society operates. Bringing biodiversity considerations
into the economic rubric of society is a means by which biodiversity can be
“embraced and eectively nurtured”.58
On a broader level, biodiversity osets have the potential to advance
overall, long-term conservation goals by bringing national or regiona l
conservation priorities into environmental regulation and planning.59
Osets place an emphasis on the way in which a choice should be made,
providing the chance to obtain greater benets t han would otherwise be
achieva ble.60 Indeed, if well designed and implemented, more conservation,
or conservation supplementary to existing attempts, may well be achieved
with osets than without them, which is a “win-win for both development
and long-term conserv ation”.61 e opportunity to meet the challenge of
retaining biodiversity, which is proving increasingly di cult, should not be
ta ken light ly.62
Furthermore, biodiversity osets allow such environmental goa ls and
priorities to be recognised without necessarily requiring absolute constraints
on development.63 ey oer developers and businesses a more certain, cost-
ecient means of managing the residua l eects of their projects. is allows
them to manage risks more comprehensively and demonstrate good practice
amongst local and wider communities. 64 ey inevitably become more engaged
in achieving long-term and sustainable biodiversity outcomes.65 Allowing
a greater part to be played by private initiative and the market encoura ges
a “stewardship approach” and “shared responsibility towards t he natural
56 Madsen, Ca rroll and Moore Brands, above n 8, at 1; J Willi ams “Balancing Act” For est and
Bird (Wellington, 17 May 2012).
57 Mad sen, Carroll and Moore Brand s, above n 8, at 1.
58 Reid, ab ove n 48, at 229.
59 Gille spie, above n 24, at 33; M Christense n “Biodiversity Ose ts – A Suggested Way
Forward” (p aper presented to Resource M anagement Law As sociation Conference, D unedin,
September 2008) at 3.
60 Gillespie, ab ove n 24, at 33.
61 At 2, 9.
62 Chri stensen, above n 52, at 2.
63 R Cowell “St retching the Lim its: Environmental Comp ensation, Habitat Creation a nd
Sustainable D evelopment” (1997) 22(3) Transactions of the Institute of British Geographers
292 at 297.
64 Christensen, a bove n 61, at 2.
65 A t 2.
Apples for Oranges? Biodive rsity Osetting in New Zealand 141
environment”.66 is links to the idea of the polluter pays principle, albeit
taking it one step furt her in requiring practical maintenance or restoration of
biodiversity rather than simply nancial compensation.67
For governments and local authorities, the biodiversity osetting process
oers an improved understanding of existing biodiversity before project
development.68 Additionally, it is attractive at a time of reductions in public
expenditure and where government funding appears to be “ insucient to stem
the loss of biodiversity”.69 Quintero and Mathur note that “even a fraction of
the revenues generated by large development projects may greatly exceed the
current annual operating budget for conser vation in most countries”.70 It can
be viewed as a strategic use of sca rce money, and the opportunity to pool
funding oers the potential for protection or restoration of more “contiguous”
areas of conservation.71
An ideal world would not be confronted with the current challenge of
reconciling the desire for economic expansion with the need to maintain
and protect biodiversity. For the environment’s sake, biodiversity osets
present pragmatic options in a “less than idea l world”.72 In fundamental
terms, biodiversity values are in sharp decline and the use of biodiversity
osetting in reconciling this tension may in fact stem this negative trend and
produce more desirable environmental outcomes. Its ability to avoid “lose-
lose” situations for both biodiversity and economic values is a critical positive
factor of biodiversity osetting.73
D. Negatives and Diculties of Biodiversity Osetting
e concept of biodiversity osetting is certa inly not without its
challenges. While proponents of the concept see it as necessary to place a
measurable value on biodiversity, others see its quantication as an impossible
task. Measurement is generally a process of nding a suitable metric or
currency, although there is little agreement on exactly which c omponents,
functions or values of biodiversity this encompasses.74 ere is no simple,
linear accounting process, it is rather an inherently subjective exercise based
66 Reid, above n 65, at 205.
67 Gil lespie, above n 24, at 2.
68 Willia ms, above n 58.
69 Chri stensen, above n 61, at 2; Reid, above n 48, at 205.
70 Qui ntero and Mathur, above n 47, at 1122.
71 M Brown “Making it work: challen ges and opportunit ies in the implementation of
biodiversity os etting” (presentat ion to Forest and Bird National C onference, Wellington,
June 2012) at 12-13.
72 Gille spie, above n 24, at 33.
73 D Norton “Using biodiversity o sets to obtain “win-w in” outcomes for biodiversity
conservation a nd economic production” [2007] New Zealand Jou rnal of Forestry 36 at 39.
74 R Cowell “Environme ntal Compensation and t he Mediation of Environme ntal Change:
Making C apital out of Cardi Bay ” (2000) 43(5) Journal of Enviro nmental Planning and
Management 689 at 691.
142 Canterbury Law Revie w [Vol 19, 2014]
on competing views and interests.75 is uncer tainty is compounded by
incomplete knowledge of biodiversity and ecosystem functions and services.
Ecological processes a nd habitat areas are constantly natura lly changing and
evolving and many species are yet to be discovered. In addition, there may be
cumulative impacts from other developments on aected biodiversity.76
Critics contend it is “over-simplistic” to apply the concept of osetting
to biodiversity because it is impossible to guarantee equity in t he exchange
of biodiversity losses and gains.77 No two sites are genuinely identical in
biodiversity terms and biodiversity condition is typical ly generated by system-
wide and long-term ecological dynamics. Ma ny species are specically
adapted to the spatiotemporal heterogeneity of their habitat, and some species
and habitats may be especially vulnerable or truly irreplaceable.78 Opponents
of the concept see biodiversity osetting as oering only poor or incomplete
replacement for biodiversity loss, particularly as there is a great deal of
guesswork involved.79 McGillivray contends that developers are favoured as
impacts are generally underestimated and positive eects of oset measures
Aside from the quantication issues, it is arguably inappropriate to
commodify something that has so far been viewed as “common heritage”.
e elevation of economic eciency over communal, long-term aesthetic and
spiritual values is seen as a n impediment to “holistic human development”
and achieving a tru ly sustainable future.81 Cowell describes this a s “enclosing
nature by in strumental, commercial rationalities”,82 which risks promoting
75 L Hinchey and A Hogg “Envir onmental compensation u nder the RMA : An appropriate
tool to ‘avoid, remedy or mitigate ’ adverse eects on the envir onment” (2009) 8 Butterworths
Resource Manage ment Bulletin 45 at 47; S Shmelev Ecological Economics: Sustainability in
Practice (Dordrecht, Spring er, 2012) at 155.
76 F Bossel man “Swamp Swaps: e “Second Nature” of Wetla nds” (2009) 39 Environmental
Law 577 at 581; F Putz and others Biodiver sity Conservation in the Conte xt of Tropical Forest
Management (e World Bank, Biodiversity Ser ies Paper No. 75, September 2000) at 3; A
Rajvansh i and V Mathur “Reconcil ing conservation a nd development: the role of biodiversit y
osets” in R Sloot weg and others (eds) Biodive rsity in Environmenta l Assessment: Enhan cing
Ecosystem Services for Human Well-Being (Cambridge, Cambridg e University Press, 2010) 255
at 255.
77 A Von Hase and T G ardner Key Ingred ients for Biodiversit y Osets to Achie ve No Net Loss
(Forest Trends, Washington D C, June 2012) at 2.
78 K Johst and others “Biodiversit y conservation in d ynamic landsc apes: trade-o s between
number, connectivit y and turnover of habitat patches” (2011) 48 Journal of Applied Ecolog y
1227 at 1228; Reid, above n 48, at 218.
79 F Quét ier and S Lavorel “Assessing ecolog ical equivalence i n biodiversity oset scheme s: Key
issues and solution s” (2011) 144 Biological Conservation 2991 at 2991; Hinchey and Hogg,
above n 77, at 47.
80 D McGill ivray “Compensating Bio diversity Loss: e EU C ommission’s Approach
to Compensation unde r Article 6 of the Habitat s Directive” (2012) 24(3) Journal of
Environmental L aw 417 at 428.
81 R eid, above n 48, at 229.
82 Cowell, a bove n 65, at 297.
Apples for Oranges? Biodive rsity Osetting in New Zealand 143
the view that all nat ural assets are tradable.83 ere are concerns that
commodication may inuence the value that society places on nature and
biodiversity by obscuring the sense of “loss” and imposing a “calcu lative
rationality” on the evaluation of natural systems.84
Von Hase and Gardner note the potential for osets to undermine
the importance of prior impact avoidance, minimisation and restoration
measures.85 ere are ostensibly incentives for developers to downplay or
ignore these important requirements under the “false impression” that
any, not only residual, eects can be addressed through osetting.86 In this
sense, there is a danger that osets may become more than a measure of
last resort.87 In a simila r vein, harsher critics see biodiversity osetting as a
means of “buying” a resource consent or “green washing”, making it easier
for developments with signicant impacts on biodiversity to proceed that
in many cases would be seen as inappropriate.88 ey see the concept as
inherently favouring developers in the consent process and are concerned th at
the maintenance of environmental standa rds may become open to “bargain”.
Put directly, osets should not be seen as a way to resolve contentious land
use conicts.89
Additionally, there are various uncertainties i n the implementation
of osets. Environmental restoration and creation is a “young science”
and yet to be veried other than in the short term. ere is considerable
scepticism in the scientic community, and little evidence to disprove it,
that the practice of restoration is advanced enough to ensure t he delivery of
sucient biodiversity gains in most circumstances.90 ere are instead strong
possibilities that osetting activities will underperform or fail, either because
of design or management failure, or due to an externa l threat, such as further
development, weeds and pests or climate change.91 is is compounded by
the issue of time delays in oset recovery, which may lead to “ecological
bottlenecks that threaten long-term biodiversity persistence”.92
Osets are long-term commitments, which often do not t well with
the nite time frames, budgets and planning of consent-requiring activities
such as mining or oil dril ling. ere are diculties for both developers and
local authorities establishing management and legal frameworks for long-
83 Memon and Ske lton, above n 17, at 181.
84 Cowell, above n 76, at 690.
85 Von Hase and Ga rdner, above n 79, at 2.
86 Quétier and L avorel, above n 81, at 2991.
87 Gillespie, a bove n 24, at 28.
88 Christen sen, above n 61, at 3.
89 C owell, above n 65, at 293; Memon and Skelton, above n 17, at 178; S Turner “Coastal
Management a nd the Environmental C ompensation Challen ge” (2000) 4 New Zealand
Journal of Environ mental Law 181 at 192.
90 Memon and Skelton, above n 17, at 197; Maron and Hobbs, above n 46, at 46; Von Hase and
Gardner, above n 79, at 5.
91 Von Hase a nd Gardner, above n 79, at 6.
92 At 6.
144 Canterbury Law Revi ew [Vol 19, 2014]
term implementat ion.93Completion” is an ambiguous term when applied to
constantly evolving restoration projects, and it is arguable that since the loss
or degradation of the environment is often likely to be permanent, osetting
measure s should operate in perp etuity.94 However, this in itself is not straight
forward given constraints on the fairness and reasonableness of consent
conditions and the fact the companies carrying out such activities may cease
to operate for various reasons.95
Compliance rates are reportedly low worldwide and many approved oset
programmes fail to meet their objectives.96 Multiple studies of biodiversity
osetting in relation to North American wetlands have revealed that long-
term results and “success” are questionable. William s cites evidence of a study
that found 40 per cent of proposed oset projects did not even exist, and only
a third of those that did actually protected the agreed values.97 McGillivray
notes that such ndings could arg uably be worse for habitats and ecosystems
more complex th an wetla nds.98
Osetting practice requires robust monitoring and enforcement, which
in turn entails resource s and expertise. Applicants and local authority
assessors may not have specic skills in the emerging and detailed scientic
and technical aspects of biodiversity oset design and implementation. ey
may well not have the time to undertake detailed research as to whether the
selection of a particular approach or methodology is appropriate, and whether
it is being correctly and adequately implemented.99 Even if non-complia nce
is identied, research has shown that non-compliance is often not pursued,
largely because enforcement can be expensive and time consuming.100
IV. B  O  N Z 
Biodiversity osetting has been evident in New Zealand as a voluntary
measure by landowners and developers for some time. In 2007, for example,
Solid Energy New Zeala nd Limited established a BBOP pilot project to
address “signicant habitat degradation” following mining activities from
1939 to 2003 at the Greymouth Coalelds.101 However, biodiversity osetting
proposals arise most often in the context of applications for resource consent
under the RMA .
93 Chri stensen, above n 61, at 3.
94 Cowell, above n 76, at 704 .
95 Hinchey a nd Hogg, above n 77, at 47.
96 Brown, above n 73, at 17; Quintero and Mat hur, above n 47, at 1122.
97 Willia ms, above n 58.
98 McGill ivray, above n 82, at 427.
99 Business a nd Biodiversity Osets Pro gramme, above n 5, at 12-13.
100 Brown, a bove n 73, at 18.
101 Business and Biodi versity Osets Prog ramme, above n 42, at 2; R oy, G “Solid Energy
New Zeala nd and the Business a nd Biodiversity Ose ts Programme” (200 9) Environment
Institute of Aust ralia and New Ze aland
zealand- and-business.htm l>.
Apples for Oranges? Biodive rsity Osetting in New Zealand 145
A. Resource Management Act 1991
Coming into force on 1 October 1991, the RMA brought together
nine existing statutes dealing with town and country pla nning, water
rights and regulation, clean a ir control, mining licences, noise control and
geothermal energy utilisation. Extensive reform established an integrated
system of resource management encompassing “legislation, administrative
responsibilities and operational management to reect the complexity a nd
inter-relatedness of the many elements of the biosphere”.102 Provided for in s
5(1), the overarching purpose of the Act is sustaina ble management, a concept
drawn largely from the 1987 Brundtland Report.103 A key theme of the Act
is the control of adverse eects of activities on the environment and to this
end it provides for a resource management regime markedly dierent to that
which existed previously. e Act moved “towards a more permissive system
of management of resources, focused on control of the adverse eects of land
use activities on the environment”.104
Section 5(2) outlines the concept of sustainable management:
[M]anaging the use, development, and protection of natural and physical
resources in a way, or at a rate, which enables people and communities to
provide for their social, economic and cultural well-being a nd for their
health and safety, while –
a. sustaining t he potential of natural and physical resources
(excluding minerals)
b. to meet the reasonably foreseeable needs of future generations; and
safeguarding the life-supporting capacity of air, water, soil and
ecosystems; and avoiding, remedying, or mitigating any adverse
eects of activities on the environment.
While subsections 5(2)(a), (b) and (c) are sometimes viewed as
“environmental bottom lines”, the application of s 5 ultimately involves an
overall broad judgment as to whether a proposal will promote the sustainable
management of natural and physica l resources.105 Section 6 lists eight matters
of national importance to be recognised and provided for by all persons
exercising functions and powers under the Act, a lthough these are subject
to the overall purpose of sustainable management.106 Section 7 lists fur ther
matters to be taken into account in the decision mak ing process that are
102 K Palmer “Resource Mana gement Act 1991” in D Nolan (ed) Environmental and Re source
Management Law (4th e d, Wellington, LexisNe xis New Zeala nd Limited, 2011) 93 at 93, 96.
103 World Commission on Env ironment and Development Our Common Future (Oxf ord
University Press, 1987).
104 Pal mer, above n 104, at 103.
105 New Zeal and Rail v Marlborough Dist rict Council [1994] NZRMA 70 (HC) at 86.
106 At 85.
146 Canterbury Law Revie w [Vol 19, 2014]
similarly subject to s 5, and s 8 recognises that the principles of the Treaty
of Waitangi are to be taken into account as an integra l part of achieving the
statutor y purpose.107
B. Resource Consent Process
A resource consent is required when an activity breaches either the Act
itself or a rule in a regional or district pla n.108 Under s 77A(2), activities may be
classied as permitted, for wh ich resource consent is not required; controlled,
restricted discretionar y, discretionary and non-complying, for which
resource consent is needed; and prohibited, for which consent is impossible.
Applications must be made in the prescribed form and manner and include,
in accordance with Schedule Four, an assessment of environmental eects
(“AEE”) in such detail as corresponds with the scale and signicance of
eects the activity may have on the environment.109
When making its decision on an application, a consent authority must,
subject to s 5, have regard to:110
a. any actual a nd potential eects on the environment of allowing the
activity; and
b. any relevant provisions of –
iii. a national environmental standard;
iv. other regulations;
v. a national policy statement;
vi. a New Zealand coastal polic y statement;
vii. a regional policy statement or proposed regional policy statement;
viii. a plan or proposed plan; and
c. any other matter the consent authority considers relevant and
reasonably necessary to determine the application.
ese are recognised as some of the most importa nt provisions in the
RMA.111 In particular, consent for non-complying activities may only be
granted if the consent authority is satised that the adverse eects on the
environment will be minor, or that granting the consent will not be contrar y
to the objectives and policies of the relevant plan or proposed plan.112
107 Pal mer, above n 104, at 147.
108 Re source Management Act 1991, ss 9, 11-15.
109 S ection 8 8(2).
110 Sec tion 104(1).
111 D Kirkpatrick “La nd Use and Subdivision” in D Nolan (ed) Env ironmental and Reso urce
Management Law (4th ed, Wellington, Lexi sNexis New Zeala nd Limited, 2011) 241 at 294.
112 Resource Mana gement Act 1991, s 104D.
Apples for Oranges? Biodive rsity Osetting in New Zealand 147
Consent may be granted subject to conditions, which are not limited
by the Act, but must essentially be fair and reasonable.113 Condition s may
require the making of na ncial contributions, although such conditions
may only be imposed in accordance with purposes specied in a plan or
proposed plan, which may include “the purpose of ensuring positive eects
on the environment to oset any adverse eect”.114 Conditions may also
require the provision of “services or works”, although such conditions are not
subject to the requirements of s 108(10)(a).115 Bonds may be required under
s 108(2)(b), in accordance with s 108A, to secure compliance with certain
conditions. ese may continue after the expiry of the consent to secure t he
ongoing performance of conditions relating to long-term eects and include,
in particular, a condition relating to “remedial, restoration or maintenance
wo rk ”. 116
Section 35(2)(d) requires councils to monitor resource consents that have
eect in their regions or districts, and take action in accordance with the
RMA to resolve non-compliance where necessa ry. e type and frequency of
monitoring depends on the scale and intensity of the activity and potential
environmental impacts. If specica lly provided for, consent holders may
undertake self-monitoring or retain the services of specialists, or councils
may use in-house sta or external consultants and charge consent holders for
such services.117 e Act provides for enforcement action to be taken against
consent holders who breach conditions of consent. is comprises written
warnings, inf ringement notices and nes, abatement notices and court action,
including prosecution and enforcement orders.
C. Environmental Compensation and Biodiversity O setting
under the RMA
e RMA does not explicitly provide for either environmental
compensation or biodiversity osetting. It is interesting to note that the
Review Group on the Resource Management Bill recommended that
the concept be included in amendments to clause 93 of the Bill, enabling
consent authorities to impose conditions to be attached to resource consents
permitting environmental compensation, although there was no direct link
with the requirement of avoiding, remedying or mitigating environmental
eects. However, the Supplementary Order Paper introduced on 7 May
1991 contained no reference to this. Similarly, in 1994, the “Environment
2010 Strategy” prepared by the Ministry for the Environment included
environmental compensation as one of the 12 principles underlying the
113 Newbu ry District Council v Secre tary of State for the Environmen t [1980] 1 All ER 731 (HL);
Housing NZ Limited v Waitake re District Council [2001] NZRM A 202 (CA).
114 Resource Mana gement Act 1991, s 108(2)(a) and (10)(a)
115 Sect ion 108(2)(c).
116 Section 108A(1)(b).
117 Section 36(1)(c).
148 C anterbury Law Review [Vol 19, 2014]
Government’s approach to integrating the environment and the economy.
is was the only principle removed from the Strategy, which was adopted in
1995 after an extensive process of public consultation.118
Proposals for measures of environmental compensation and biodiversity
osetting by applicants have been assessed on a case-by-case basis and as
a result have been accepted by local decision mak ing authorities and the
Environment Court through a number of channels. In Whangamata Maori
Committee v Waikato Regional Council,119 o-site osetting was accepted
as tting within t he wider denition of avoiding, remedying or mitigating
the adverse eects of development under s 5(2)(c). In J F Investments Ltd v
Queenstown Lakes District Council,120 t he Court accepted an oset proposal
as legally relevant under the “enabling and eciency provisions of Part
Two” and “relevant and reasonably necessary under [the now] s 104(1)(c)”. It
established “desiderata” to assist in determi ning the value and relevance of an
oset: the kind and sca le of the work, proximity to the site, eectiveness or
certainty, public consultation or participation in the process, and assessment
under a transparent, standa rd methodology, preferably through a planning
instrument such as a regional or dis trict plan or other public document. ese
were applied in Director-General of Conservation v Wairoa District Council,121
where the Court noted the potential for a better environmental outcome
with the oset proposal tha n that which would result if the application were
In Royal Forest and Bird Protection Society v Gisborne District Council,123
building on the J F Investments Ltd v Queenstown Lakes District Council
“desiderata”, the Court accepted six principles of biodiversity osets: the
proposal should rst seek to avoid and minimise impacts arising from the
activity, a guarantee must be provided, certa in ecosystems will never be
appropriate for biodiversity osets on the grounds of rarity or the presence of
particular species, osetting will often, but not always, involve the creation
of new habitat rather than the protection of existing habitat, a “currency”
is required to quantify the loss and gain of values to ensure ecological
equivalency, and the uncertainty of achieving the desired oset and the
time lag required must be considered in determining whether an oset is
118 Turner, above n 91, at 188-190.
119 Whangamata Maori Committee v Waikato Regional Council NZEnvC Auckland A173/05, 26
October 2005 at [56].
120 J F Investment s Ltd v Queenstown Lakes D istrict Council Env C Christchurch C48/0 6, 27 April
2006, at [42]. It should be noted th at the desiderata were ar ticulated in a context of l andscape
and amenity c onsiderations, and the issue in t hat context has been viewed broa dly as one of
environmental c ompensation and is not specica lly biodiversity related .
121 Directo r-General of Conser vation v Wairoa District Counc il NZEnvC Wellington W81/07, 19
September 2007.
122 Norton, above n 75, at 39.
123 Royal Forest a nd Bird Protection So ciety v Gisborne Di strict Council NZEnv C Wellington
W026/2009, 7 April 200 9 (interim decision).
Apples for Oranges? Biodive rsity Osetting in New Zealand 149
e Transmission Gully decision similarly recog nised osetting measures
as constituting “mitigation”, as per s 5(2)(c) of adverse eects.124 However, the
categorisation of osetting measu res was recently addressed as a central a spect
of the High Court appeal in Royal Forest and Bird Society of New Zealand
Inc v Buller District Council,125 with the appellants calling for a narrower
conception of mitigation, as was taken in Day v Manawatu-Wanganui Regional
Council,126 where the Court expressly declined to follow Transmission Gully.
Fogarty J in Royal Forest and Bird Society of New Zealand Inc v Buller District
Council agreed with counsel for the appellants. He saw the term “oset” as
carrying with it the assumption that what is being oset remains, whereas to
“mitigate” is to alleviate, abate or moderate the severity of something, a nd
agreed, in this case, that the proposed oset was not mitigation as per s 5(2)
(c). ere was no reason to go beyond the normal meaning of mitigation.127
While the decision certa inly goes a way to providing guidance in terms of
categorising oset measures, and indicates a tendency towards the view
that osets will not constitute mitigation under s 5(2)(c),128 it is clear this
remains very dependent on the specic proposal and the specic policy and
plan framework. ere is arguably a need for objective, national direction on
the appropriateness, scope and application of biodiversity osets, including
greater guidance on the weighting of measures under the RMA .129
D. Non-legislative Measures
In terms of non-legislative measures, the Department of Conservation
secured Cross Departmental Research Pool funding to investigate the
concept of biodiversity osetting in New Zea land through its “Biodiversity
Osets Program me”.130 e objective of this research was primarily to devise
objective measures for comparing biodiversity at impact and oset sites. e
Programme sought to identify places where biodiversity could be restored
to achieve a net gain, through re-creation or enhancement processes, and
dene biodiversity trade and exchange equity issues across time, location and
ecological similarity. More practically, it aimed to understand the utility of
dierent oset measures by testi ng their ability to achieve equity across a range
124 Final decision of the Board of Inqui ry into the New Zea land Transport A gency’s Transmission
Gully Plan Cha nge Request (5 October 2 011, EPA 0072). See also Mainpower NZ Ltd v
Hurunui District Council [2011] NZEnvC 384.
125 Royal Forest a nd Bird Society of New Ze aland Inc v Buller Dis trict Council [2013] NZ HC 1346.
126 Day v Manawatu-Wanganui Regional Council [2012] NZEnvC 182.
127 Royal Forest a nd Bird Society of New Zeal and Inc v Buller Distr ict Council [2013] NZHC 1346
at [54 ]-[72].
128 e importa nt implication for non-complying ac tivities should be considered he re. If osets
do not constitute mitig ation, they cannot be brought to bea r on the assessment of the level
of adverse eect s under the “threshold test” for juris diction in s 104D: Royal Forest and B ird
Society of New Zea land Inc v West Coast Regional Co uncil [2013] 178 at [8].
129 V Rive, “Update on Case Law” (pape r presented to New Zeal and Law Societ y: Environmental
Law Intensive, Apri l 2014) 1 at 31.
130 Market ing and Communications Group, a bove n 7, at 1.
150 Canterbury Law R eview [Vol 19, 2014]
of contrasting scenarios.131 It ultimately intended to provide more structure
and transparency in relation to biodiversity osetting in the resource consent
process, and consider whether there was a role for markets in the context.132
In August 2012, the Programme drew to a close and the Department will
soon release a report entitled Guidance on Best Practice Biodiversity Osetting
in New Zealand.133 e Programme aligned with and drew much guidance
fr om BB OP.134
e NPS similarly addresses biodiversity osetting in its objective of
promoting the “maintenance of i ndigenous biologica l diversity”. Mai ntenance
is described as “no net loss as achieved by the protection of existing a reas and
habitats and/or the restoration and enhancement of areas and habitats as may
be required through biodiversity osets or other initiatives”.135 Policy Five
elaborates on “no net loss” by setting out a hierarchy which provides for:
avoiding adverse eects; where adverse eects ca nnot be avoided, ensuring
remediation; where adverse eects cannot be remedied, ensuring mitigation;
where adverse eects cannot be adequately mitigated, ensu ring any residual
adverse eects that are more tha n minor are oset in accordance with the
principles set out in Schedule Two.136 As a safeg uard, the NPS explicitly
provides for “limits to what can be oset because some vegetation or habitat
and associated ecosystems is vulnerable or irreplaceable” to the extent that
“in such circumstances osetting will not be possible and loca l authorities
will need to take full account of residual adverse eects in decision-mak ing
processes”.137 Schedule Two comprises the BBOP principles: no net loss;
additional conservation outcomes; adherence to a mitigation hierarchy,
although slightly dierent in that it requires avoidance, minimisation,
rehabilitation or restoration, as far as is practica lly feasible, then osetting;
limits to what can be oset; a landscape context; long-term outcomes and
tr an sp ar enc y.13 8
131 A t 4.
132 At 4 -5.
133 Department of Conserv ation Biodiversit y Osets Prog ramme Update – Augu st 2012 (Department
of Conservat ion, August 2012) at 1.
134 At 3.
135 Min istry for the Environment, a bove n 3, at 4.
136 At 6.
137 Ministr y for the Environment Proposed National Policy Statement on Indigenous Biodiversity:
Evaluation und er section 32 of the Resour ce Management Act 1991 (Ministr y for the
Environment, Janua ry 2011) at 65.
138 Minis try for the Environment , above n 3, at 11-13; Business and Biod iversity Osets
Programme, ab ove n 42, at 10.
Apples for Oranges? Biodive rsity Osetting in New Zealand 151
E. Uncertainties and Diculties to be Addressed
e uncertainties of biodiversity osett ing in New Zealand revolve
mainly around the var ying approaches taken in the case law and a lack of
structured national g uidance. Submissions on the NPS recognised the need
for regulation of a tool that is already in use.139
At the outset, some argue that osetting is inappropriate in New Zealand
given its rich biodiversity and near pristine habitats, compared with other
countries where almost every habitat has been modied at some point in the
past.140 is is f urther compounded by a lack of information about overall
trends and conditions in natural habitats a nd ecosystems, making decisions
about managing biodiversity uncert ain.141 Information, namely through an
AEE, is genera lly tailored for wider RMA purposes and does not necessarily
consider biodiversity in depth. Without specic, consistent assessment of
adverse impacts on ecosystems, ecos ystem processes and services a nd wider
interconnections, it is often dicult to ensure biodiversity is adequately
quantied in osetting proposals.142
More confusion results from the fact that the case law leaves the issue of
where biodiversity osetting ts within t he RMA structure undetermined.
As indicated, a number of earlier cases classify it as a subset of remedying
or mitigating adverse eects.143 More recently, it has been classied as
falling outside s 5(2)(c) and some view it as a subset of wider environmental
compensation. e NPS imports a clear hierarchy under which osetting
is introduced as a fourth eects-management option following adequate
avoidance, remediation and mitigation. e wording of the BBOP hierarchy
in Policy Five has been altered to match s 5(2)(c) of the RMA. While this
aligns with recent ca se law, it should be noted that the s 5(2)(c) formula has
not been interpreted as requiring a sequential test and debate is ongoing as to
whether it is indeed a hierarchy or a set of optional approaches.144 A number
of submitters on the NPS raised concerns over the Policy Five hierarchy,
contending that it lends too much towards the use of osetting.145
139 Ministr y for the Environment Proposed National Policy Statement on Indigenous Biodiversity:
Summary of submissions (Ministr y for the Environment, December 2 011) at 61.
140 Williams, above n 58.
141 Ministry for the Env ironment, above n 2, at 7.
142 A Rajv anshi, V Mathur and R Slootweg “Bio diversity in environmental i mpact assessment”
in R Slootweg and ot hers (eds) Biodiversity in Environ mental Assessment: Enh ancing Ecosystem
Services for Huma n Well-Being (Cambrid ge, Cambridge University Press , 2010) 154 at 156-
158 .
143 Christensen, above n 56, at 16.
144 Memon and Ske lton, above n 17, at 188; Tonkin and Taylor Limited e Rol e of Monitoring
and Compliance in S ecuring Better Bi odiversity Outcom es through Ose tting Arrangement s
(Department of C onservation, Februar y 2012) at 21-26.
145 Ministry for the Env ironment, above n 139, at 59-60.
152 Canterbury Law Review [ Vol 19, 2014]
It must also be remembered that the purpose of sustainable management
under the RMA is paramount. e exible means of protection oered by
biodiversity osetting may allow s 6(c), which recognises the protection
of “areas of signicant indigenous vegetation and sign icant habitats of
indigenous fauna” as a matter of national importance, to be better reconciled
with s 5. When it is pursued “relentlessly and inexibly” s 6(c) may foreclose
development and consequently “well-being”.146 However, the RMA is
not a “no eects” statute and the test of no net loss must not be elevated
above the sustainable management purpose.147 e BBOP principles have
been developed in an international context for the purposes of providing
guidance to businesses, of ten in situations where there is no such applicable
environmental legislation.148 Conversely, it is well recognised that the R MA
does not require that activities have no adverse eects on the environment.
e Act allows the environment to be adversely aected so long as eects are
remedied or mitigated or the activity is not contradictory to the purpose and
principles of t he Act.149
Further guidance is needed a s to the safeguards or limits of biodiversity
osetting. ere are indications t hat certain habitats and species a re signicant,
irreplaceable and vulnerable, and thus t he limits of biodiversity osetting
should be determined solely on the basis of the “importance” of par ticular
aected biodiversity. is is a strict approach and does not take account of
the extent and nature of the disturba nce on the receiving environment. e
question should not be how rare the biodiversity is, but how much the project
will impact it.150 In the Transmission Gully decision, the Board rejected a “no
go up front” approach.151 Christensen succinctly summarises the issue: “one
has to consider the merits of a proposed oset before it is possible to decide
whether an oset is available or not, it is not an “a priori” decision based on
the biodiversity values themselves”. is leads to the issue of how to determine
what measures are appropriate osets and how to take ac count of risk and
uncertainty in t he outcome of proposals. A wide range of submitters on the
NPS requested additional guidance on procedures of assessing and attaching
values to dierent environmental features, the necessary degree or level of
osetting, and t he design and implementation of osets.152 Without such
guidance, the area remains subject to local interpretation and inconsistencies
across regions will continue. is means u ncertainty for both applicants and,
more import antly, for biodiver sity.153 Christensen, in particula r, notes the
146 Ministry for the Env ironment, above n 137, at 65.
147 Kirkpatrick, above n 113, at 304; Chr istensen, above n 56, at 17.
148 Christensen, above n 56, at 19.
149 Trio Holdings v Mar lborough District Counc il [1997] NZRMA 97 at 116; Turner, above n 91,
at 18 6.
150 Christen sen, above n 56, at 8.
151 At 8.
152 Ministr y for the Environment, above n 139, at 62.
153 At 6.
Apples for Oranges? Biodive rsity Osetting in New Zealand 153
importance of ensuring that there is no scope for local authorities to devise
their own methodologies for assessing oset s that are contrary to Schedule
Two of the NPS, as this would compound the uncertainties that already
Perhaps the biggest area of concern is the successful implementation,
monitoring and enforcement of oset proposals. Local authorities govern an
enormous range of activities and as such do not necessa rily possess the time,
expertise and resources to ensure these concerns are addressed.155 Va ri ou s
studies have revealed that, despite the requirements and tools provided for
in the RMA to support an “eective and ecient consent monitoring and
compliance process”, in the biodiversity context, local authorities generally
fail to meet statutory requirements or use the avai lable RMA machinery.156 A
Tonkin and Taylor report found that consent monitoring in the area is aorded
low priority, local authorities lack sta, resources and expertise, t here are no
national guidelines or standards, little training, a lack of general information
about ecological contexts, inadequate reporting, a need for exibility to
account for changes in design details post-application, a need for scalability
to manage cumulative eects, and various enforcement inconsistencies.157
Ultimately, there seems to be disparate regard for biodiversity values despite
the ambitions of the New Zealand Biodiversity Strateg y, the National
Priorities and the NPS. Consequently, a large proportion of osets proposals
are not adequately monitored and non-compliant, and enforcement of non-
compliance is generally low. Many proposed osets have not in fact been
carried out at all.158 is highlights an urgent need for formal requirements
to improve the system.159
e issue is compounded by the long-term nature of adverse environmental
eects and the need to somehow secure long-term benets through osett ing.
Resource consents are generally n ite and osetting proposals continue
only until the activity for which consent was g ranted comes to an end.160
For example, in Royal Forest and Bird Protection Societ y v Gisborne District
Council, the Court identied that, while the adverse eects would remain,
the oset proposal and corresponding benets would cease as soon as the
activity did. It commented that it hoped by this stage that the pest problems
the oset proposal sought to address would be under control and that the
landowner would have an incentive to keep it that way, although it did not see
t to impose an ongoing requirement. is is indicative of an unsatisfactory
position that needs to be addressed.
154 Christen sen, above n 52, at 26.
155 B Richa rdson “Economic Instr uments and Susta inable Management in Ne w Zealand
(1998) 10(1) Journal of Environ mental Law 21 at 23.
156 Tonkin and Taylor Limited, above n 144, at 3.
157 At 3.
158 J Williams “Un fair trade in nature” Fo rest and Bird (Wellington, 16 Aug ust 2012).
159 Rajvansh i, Mathur and Slootweg, above n 142, at 157.
160 Hi nchey and Hogg, above n 77, at 45.
154 Canterbury Law R eview [Vol 19, 2014]
V. N S W – B
e New South Wales “BioBanking” scheme is a good illustration of a
market based approach, established af ter specic recognition that biodiversity
osets were being negotiated on a case-by-case ba sis, which was leading to
considerable uncertai nty.161
In 2006, the New South Wales Department of Environment and Climate
Change established a biodiversity oset and land banking scheme throug h
the reatened Species Conservation Amendment (Biodiversity Banking)
Act 2006 (NSW ). As outlined, the Act provides a market based approach to
balancing the need for development with the longer-term aim of conserving
areas of high biodiversity value.162 Essentia lly, landowners may generate
credits by undertaking to improve or maintain biodiversity on their land,
by positive management and/or rehabilitation actions, through an agreement
with the Minister for the Environment. is places a statutory covenant on
the land title to ensure an ‘in perpetuity” improvement on the site.
A specied “Assessment Methodology” is used as a basis for ca lculating
the number and class of credits. e Methodology consists of a formula
based on a before and after comparison of three va lues: regional (an overall
limitation on the potential for cumulative loss within a vegetation type),
landscape (fragmentation, connectivity a nd adjacency of native vegetation)
and site (structural and oristic condition).163 Calculation of credits is based
on the extent of improvement expected to occur following the management
actions. ere is greater capacity to improve moderate condition biodiversity.
Improvement of sites in poor condition is limited due to the long ecological
timeframes required to improve the values. Improvement of sites in high
condition is obviously also more limited. However there is a ten per cent
bonus of site value score to reward vegetation that has been kept in good
condition in the past.164 Credits may be created in respect of past, current
and future management actions. e scheme is weighted towards restoring
biodiversity rather than, for example, planting new vegetation.
Developers may propose osets works to minimise biodiversity loss,
establish their own biobank sites to generate credits, or purchase credits from
a central register and use them to oset the negative impacts of development
on biodiversity. In such a case, a biobanking statement may be issued for
development and activities. e Assessment Methodology aga in applies, which
161 Christensen, above n 61, at 5.
162 L De an “DAs that seek nature’s approva l” (2008) 28(6) Government News 20 at 20.
163 D Farrier, A Kelly and A Lan gdon “Biodiversity oset a nd native vegetation cle arance in New
South Wales: e rura l/urban divide in the pur suit of ecologically sust ainable development”
(2007) 24 Environm ent and Planning Law Journal 4 27 at 431.
164 Department of Environment and Cl imate Change New S outh Wales Public Exhibition of
BioBanking Reg ulation, Assess ment Methodolog y and Compliance Assu rance Strateg y: Issues
raised and proposed changes (Depart ment of Environment and Clim ate Change New South
Wales, May 2008) at 16.
Apples for Oranges? Biodive rsity Osetting in New Zealand 155
means the oset rules are primarily based on ecological criteria. Osets may
take place in locations geographically removed from the development project
and are not subject to arbitrary regional bounda ries.165 e Act specically
recognises that biodiversity loss should be avoided and/or minimised before
the use of oset credits is considered. A biobankin g statement may be refused
if the developer has not demonstrated that all cost-eective on-site measures
to minimise the impact of development have or will be carried out.
e threshold for a biobanking statement is that the development will
“improve or maintain” biodiversity values. Interestingly, if such a statement is
issued, the development is taken to not signicantly a ect threatened species,
populations or ecological communities or their habitats, and a n assessment of
the development’s eects on biodiversity is not required in a general consent
application. In this sense, the scheme stream lines and provides an alternative,
albeit similar, approach to assessment under the Environmental Plannin g and
Assessment Act 1979 (NSW). ere must still be an asse ssment of the site and
a decision about whether the development meets the “improve or maintain”
test. However, the process is intended to make it easier for councils in their
role of asse ssing development s.
Certain biodiversity values are “red agged”, including over-cleared
vegetation types in moderate to good condition and threatened species that
cannot withstand further loss, for example, those that are rare, vulnerable
to threats, beyond management control, or where there are impediments to
the recruitment of individuals to that population.166 In addition, any aected
species must be able to sustain any short-term loss resulting from clearing
in the time lag before their predicted eventua l replacement in the area to be
managed as an oset. If this is not the case, then the loss cannot be oset.167
165 A t 32.
166 At 6 .
167 Fa rrier, Kelly and Langdon, above n 164, at 432 .
156 Canterbury Law R eview [Vol 19, 2014]
A. Benets of the Scheme
While the scheme is still in its infancy, it encompasses a range of positive
eects. e positives of the scheme lie primarily in t he value it gives to
biodiversity. From an ecological perspective, it provides an economic
incentive for landowners to protect, monitor and pursue species and habitat
conser vation.168 It encourages them to view biodiversity as an asset which
can be used to gain income in the form of biodiversity credits, and presents
conservation as an “economically rational land-use option in areas of high
biodiversity value”.169 Bosselman believes t hat this fosters “entrepreneurship
and imagination” rather than t he “mechanical check o of regulatory list s”.170 It
also enables the strategic direc tion of resources to areas of high environmental
quality and can create larger or contiguous protected areas. Nelson and
Sharman note that “la rger reserves are usual ly able to full species recovery
goals better than smaller patchworks of isolated reserves that may not be able
to ensure long-lasting conser vation resu lts”.171 From a business perspective,
it is cost eective in that it reduces the time for processing consents, it
oers certainty to ad hoc oset negotiations, thereby reducing the need for
resources, and allows companies to transfer their conservation obligation
to third parties, rat her than being “saddled with obligations for which they
have no expertise”.172 Administratively, it promotes eciency, again from the
bringing together of nancial resources, planning and scientic expertise
into one large project, rather than numerous smaller eorts.173 It also takes
the responsibility for biodiversity assessment away from local authorities, a
role for which they have been recognised to have limited time, resources and
expertise. Only accredited consultants are able to assess sites.174
e approach provides a means of overcoming some of the uncertainties
of biodiversity osetting. e existence of a more robust framework means
implementation and respective functions are generally performed more
reliably, which should lead to greater certainty of desired outcomes. e
time lag between the eects on biodiversity and their oset or replacement
is also reduced, as the latter is subject to prior agreements and may already
be “banked.175 Ultimately, there should be greater transparency with oset
banking than with one-o osets.176
168 Re id, above n 48, at 229.
169 Re id, above n 48, at 219; Marketing and Communic ations Group, above n 7, at 5.
170 Bosselman, above n 78, at 582.
171 R Nels on and B Sharman “More than ti lting at windmills: A bird ’s eye view of a bio-o sets
scheme under the EPBC Ac t” (2007) 24 Environment and Pl anning Law Journal 17 at 19-20.
172 Department of Environ ment and Climate Chan ge New South Wales, above n 165, at 67;
Nelson and Sharm an, above n 172, at 20.
173 Nelson and Sharman, ab ove n 172, at 21.
174 Department of Environment a nd Climate Change New Sout h Wales, above n 165, at 29.
175 Bosselman, above n 78, at 584; Nor ton, above n 53, at 704.
176 Madsen, Carroll and Mo ore Brands, above n 8, at 5.
Apples for Oranges? Biodive rsity Osetting in New Zealand 157
e approach also goes some way to addressing the concerns outlined
earlier as to enforcement and monitoring. e oset is, in eect, transferred
to a secure, independent third party to be ma naged.177 However, increased
exibility necessarily requires increased responsibility and enforcement for
success of the scheme. e Minister for the Environment holds the power to
order a landowner to carry out work at their own cost to rectif y any breach
of a biobanking agreement, or may obtain damages through proceedings in
the Land and Environment Court.178 e Minister may suspend, cancel or
order a landowner to retire credits for a breach, and may issue nes of up to
AUD 1.1 million. Where there is a serious risk to biodiversity arising from a
breach, the Minister may apply to the Land and Environment Court for an
order that the land be transferred to the Mi nister, with compensation payable
as if it were a land acquisition.
e particular scheme in New South Wales provides for a substantial
amount of public participation. A Ministerial Reference Group, comprising
leaders from key stakeholder groups, such as the New South Wales Farmers’
Association and New South Wales Minerals Council, was established to
assist in nalising the “Assessment Methodology” and continues to oversee
implementation and reviews of the scheme.179 A quarterly email, aptly na med
the “BioBanking Banter”, provides a regular update on the scheme, including
information about new biobanking agreements and statements, expressions
of interest, publications and changes to processes.18 0 A public list of wanted
credits allows prospective purchasers, such as developers or charitable
organisations, to inform future a nd current holders of the type and amount
of credits they desire.181 Additionally, the Department of Environment and
Climate Change directs information about establishing biobank sites to
landowners in areas identied as having high conservation value in regional
What is strik ing about the scheme is its seeming ability to deliver wider,
long-term con servation goals.183 It oers an alternative approach where
areas of high biodiversity value are involved, which the Department of
Environment and Climate Change describes a s “complementing natural
resource management” in New South Wales.184 Assigning an economic value
to biodiversity and its associated service s allows countries to use the “invisible
177 Christensen, above n 61, at 3.
178 O ce of Environment and Heritage “ e BioBanking Framework ” (May 2012) New South
Wales Government .
179 Oce of Env ironment and Heritage “Sche me development” (May 2011) New South Wales
Government .
180 Oce of Envi ronment and Heritage “Information for pa rticipants” (September 2012) New
South Wales Government .
181 Oce of Environment and Herit age “List of wanted cred its” (March 2012) New South Wales
Government .
182 D epartment of Environment and Cl imate Change New South Wales , above n 165, at 74.
183 B osselman, above n 78, at 584; Mad sen, Carroll and Moore Brand s, above n 8, at 5.
184 Fa rrier, Kelly and Langdon, above n 164, at 4 31.
158 Canterbury Law Re view [Vol 19, 2014]
hand of commerce” to protect biodiversity, habitats and water supplies.185 e
Department’s Manager of Private Land, Louis Momouney, succinctly states:
“for some time we have been dealing with the creeping loss of biodiversity
and we need a systematic method to build up areas of habitat that will ensure
into the future”.186
B. Negatives of the Scheme
e concerns outlined earlier in this paper relating to the quantication
and replaceability of biodiversity apply to the scheme. ese concerns have
been recognised by various authors in the context of a biodiversity banking
approach.187 Some critics believe making ecosystems tradable commodities
may in fact create danger for biodiversity by way of possible perverse incentives
to create threats where none existed before.188 e approach may also indicate
underlying governmental and local authority neglect of biodiversity at a time
when habitats are under increasing stress a nd the rapid decline of biodiversity
is widely recognised.189
ere are also apprehensions that such schemes act to “lock land up
forever”. However, this can be countered with the argu ment that the oset
provided by a biobanking site is supposed to counterbalance permanent eects
at the development site. Further, other later land uses may be permitted on the
oset site provided they are compatible with the conservation of biodiversity
on the site.190
More specically for landowners, early experience ha s shown that
signicant initial c osts may “dampen” speculative oset development on
private land.191 For developers, the alternative avenue of dealing with eects of
activities on biodiversity does not necessarily ensu re the granting of consent.
Consent may be refused for reasons unrelated to biodiversity conser vation
and the decision maker furt hermore retains the discretion to consider the
likely impact of the proposal on biodiversity and refuse a n application on
the grounds that the proposed on-site measures combined with the osets
are insucient, despite the Minister’s determination by way of a biobanking
statement.192 Applied to the New Zealand context, this could be all the more
relevant given the number of factors to be weighed under the RM A.
Block recognises a strong need for proper oversight and enforcement if
such combinations of markets and conservation eorts are to succeed.193
Nelson and Sharman conclude that the dangers are not “insurmountable”,
185 Blo ck “Ecosystem Market s Take O” (2009) 22(3) Worl d Watch 4 at 4.
186 S ee Dean, above n 163, at 20.
187 Blo ck, above n 186, at 4.
188 Ne lson and Sharman, above n 172, at 21.
189 Blo ck, above n 163, at 4.
190 Department of Environme nt and Climate Change New S outh Wales, above n 165, at 74.
191 Madsen, Carroll a nd Moore Brands, above n 8, at 52.
192 Farrier, Kelly and Lan gdon, above n 164, at 443.
193 Block, above n 186, at 4.
Apples for Oranges? Biodive rsity Osetting in New Zealand 159
but rather are grounds for a system to include careful ly crafted guidance
and features,194 a theme which rings true with the general application of
biodiversity osetting.
VI. R 
With the varying interpretations and implementation of the concept of
biodiversity osetting worldwide, providing concrete recommendations for
the future of the practice in New Ze aland is a challenging task. It is perhaps
best to do so by addressing the respective unc ertainties in the current practice
in New Zealand, reecting on the positives and negatives of biodiversity
osetting generally and the strengths and weak nesses of the New South
Wales regime. While the New South Wales approach certainly takes a strong
economic focus, much can be gained from the certainty of implementation
and enforcement that it oers.
Given the uniqueness and importance of New Zealand’s indigenous
biodiversity, placing a value on biodiversity and bringing it into the economic
rubric of modern society is sensible. In light of the acknowledged rapid state
of decline in biodiversity, there is potential for the practice of biodiversity
osetting to assist i n achieving long-term, wider conservation goals. Signic ant
business involvement and additional funding in biodiversity conservation is
not only rational but specically sought by the New Zea land Biodiversity
St rateg y.19 5 e Strategy also recognises the need for “clearly aligned and
coordinated actions”.196 A strong framework with practica l guidelines
for transparent decision making, against which the merits of individual
biodiversity oset proposals may be rigorously assessed, is critical.197
In establishing such a fra mework, amending the RMA to clarify the role
or function of biodiversity osetting, could address the existing confusion as
to where and how it applies within the resource management structu re. To
date, options appear to be to either include osetting as part of the s 5(2)(c)
requirements, regard it as “any actual or potential eects on the environment
of allowing the activity” under s 104(1)(a), or consider it as “any other matter
the consent authority considers relevant and reasonably necessar y to determine
the application” under s 104(1)(c). If the role and function of biodiversity
osetting was addressed in the RMA itself, this could oer clarication and
resolution of issues such as whether osets can be brought to bear on the
assessment of the level of adverse eects under s 104D and their inclusion in
AEEs. Without such uniformity, osets and oset proposals will continue to
be assessed dierently across the country.
194 Nelson and Sharman, a bove n 172, at 22.
195 Ministry for the E nvironment, above n 2, at 11.
196 At 11.
197 Reid, above n 48, at 217; Brown, above n 73, at 16; Norton, above n 53, at 702.
160 Ca nterbury Law Review [Vol 19, 2014]
e NPS includes mitigation hierarchies in Policy Five and Principle
ree of Schedule Two. Policy Five requires adverse eects to be avoided, then
remedied, then mitigated, then where this is not possible, oset in acc ordance
with the principles set out in Schedule Two. Principle ree of Schedule Two
requires all appropriate avoidance, minimisation and rehabilitation actions
to be taken to address direct and indirect eects on specic components of
biodiversity, then osetting can be used as a means of addressing residual
eects. Given the above discussion of the place of biodiversity osetting
within the RM A structure, it might be best to omit reference to these
hierarchies, which confu se clarication of the place of the concept in the
New Zealand regime.
ere must then be clearer guidelines for the design a nd implementation
of a biodiversity oset. Oset proposals have varied w idely in the case law. At
present, the NPS introduces seven principles in Schedule Two to be applied
when considering a biodiversity oset. However, the principles have been
directly imported from BBOP. e BBOP principles have been devised for
cases of voluntary biodiversity oset ting worldwide, and have been imported
with little “personalisation” for the New Zealand context. W hile some
are certainly essential for successful biodiversity osets, others need to be
better tailored to the New Zea land resource management regime and New
Zealand’s unique biodiversity.
Policy Five and Principles One of Schedule Two of the NPS introduce
the principle of “no net loss”. However, the RMA aims to control the adverse
eects of activities on the environment, not prevent them in their entirety,
which requires an overall broad judgment and weighing of a number of
considerations. ere is a clear mismatch between the international concept
and the wording of the NPS, and the approach of the RM A on this issue.
ere should perhaps be less emphasis on “no net loss”, particularly given the
diculties of completely accurate quantication. In this way, the desirable
environmental outcomes that may result from biodiversity osetting a re
not precluded, and there can be more emphasis on achieving appropriate
osetting in a par ticular case.
It follows that there must be greater guidance as to t he adequacy of
osetting measures in a given situation. While it is beyond the scope of this
paper to establish an extensive methodology, the vague principles comprised
in Schedule Two need to be replaced or at least complemented with a more
practical methodology simi lar to that which exists in New South Wales. In
an area of such national importa nce and contention, strong guidelines, with
consequences, are needed to ensure consistency and compliance. Matters
that should be more adequately addressed include exactly which biodiversity
components are to be accounted for, how people’s uses of ecosystem services
and cultural va lues associated with biodiversity are to be accounted for, the
appropriate baselines from which to measure eects a nd oset performance,
how external factors such as climate change and other developments are
brought into the equation, the extent of the connection required between
Apples for Oranges? Biodive rsity Osetting in New Zealand 161
the adversely aected biodiversity and the osetting measures, and exactly
how risk, uncertainty and time lags are to be accounted for.198 e New
South Wales “Assessment Methodology” addresses the majority of these
matters with the additional benet that it was formulated a nd continues to
be reviewed by various public stakeholders. is ensures the dierent values
attached to biodiversity components are taken into account.199 e accredited
assessors trained under the scheme also ensure greater certainty and this
places less pressure in terms of expert ise and resources on both applicants and
local authorities.
Principle Two of “additional conservation outcomes”, limitations on what
can be oset under Policy Four, and implementation in a “landscape context”,
as per Principle Five, are desirable principles. However, again they are vague
in application. Strategic biodiversity conservation goals are provided for in
New Zealand through the New Zealand Biodiversity Strateg y, the National
Priorities and the New Zealand reat Classication System. In addition,
signicant vegetation and signi cant habitats of indigenous fauna must be
identied in regional policy statements, as per Policy ree of the NPS.
However, these are often not referred to in the case law. ese strategic
goals need to be more easily accessible to and understood by applicants and
perhaps even become compulsory considerations in oset proposals. It is well
recognised that strategically planned approaches, including a consideration
of which species and habitats are most appropriate, eective and desirable for
the pract ice,200 provide much greater outcomes than traditional project-by-
project asse ssment.201
Accounting for “long-term outcomes” and the preparation of a “biodiversity
oset management plan” in Policy Six of Schedule Two are, again, well
intentioned strategies, but given the lack of success in this area worldwide,
there should be stricter requirements that are specica lly integrated with
RMA procedures as conditions for resource consents. It is essential that this
phase is not a “paper exercise to secure project approval, but rather a practical
exercise to achieve environmental, economic and biodiversity benets”.202
e lack of success worldwide is often attributed to a lack of resources and
198 F Putz and others Biodiversity C onservation in the Con text of Tropical Forest Manageme nt
(e World Bank, Biodivers ity Series Paper No. 75, September 200 0) at 3; Business and
Biodiversity O sets Programme, above n 42, a t 8; Gordon and others, above n 45, at 1486;
Quétier and Lavore l, above n 81, at 2995; Memon and Skelton, above n 17, at 179; Norton,
above n 53, at 70; C Hepburn “Environment al policy, government, and the marke t” (2010)
26(2) Oxford Review of Environmental Policy 117 at 123.
199 Christensen, above n 61, at 3.
200 Johst and others, above n 80, at 122 7, 1234.
201 J Underwoo d “Combining Landscape -Level Conservation Plan ning and Biodiversity O set
Programs: A Ca se Study” (2011) 47 Environmental Management 121 at 122; Gordon and
others, above n 45, at 1482.
202 Rajvansh i, Mathur and Slootweg, above n 142, a t 196.
162 Cante rbury Law Review [Vol 19, 2014]
technical expertise.203 is ha s been identied as an issue in New Zealand.204
A greater emphasis on the provision of such resources, skills and guidance to
local authorities, or the use of accredited asse ssors, as well as measures such as
national databases of oset action for monitoring, is essential.205
A nal key recommendation is the establishment of a system to better
facilitate and encourage osetting proposals. It is well recognised that ma ny
of the shortcomings of the practice are increasingly being addressed, as in
New South Wales, through biodiversity banki ng schemes. In particular, these
include the issues of time lag, compliance and en forcement. A full biodiversity
banking scheme wil l likely not be feasible given New Zealand’s size and
economy and the burden it might place on local authorities or those charged
with its administration. However, there are various mechanisms existing in
New Zealand to as sist in at least a partial scheme. Where land is able to be set
aside on a development site, this could be integrated within the framework of
the QEII National Trust “open space covenant” regime. e regime aims to
help landowners protect signicant natural a nd cultural features on their land
through the legal mechanism of an open space covenant. Once a covenant is
registered, ongoing management advice and support is oered to landowners
and regional representatives make regu lar visits to monitor the condition of
the land, identify and address any threats, and advise the owner on how to
meet their covenant objectives.2 06 QEII National Trust becomes a perpetua l
trustee to ensure that the va lues remain protected forever, or land may be
gifted to the Trust itself to do so. Where osetting need s to occur elsewhere,
as provided for in the New South Wales scheme, “credits” may need to be
purchased and this could be integrated into a fund or scheme administered
by the QEII National Trust or Department of Conservation, with the input
and assistance of landowners, to address specic concerns such as weed and
pest control, which along with development and habitat loss pose severe
threats to indigenous biodiversity.
While some would argue that protection and ma intenance of indigenous
biodiversity on private land is simply a “burden of common citizenship”,207 the
reality of modern human nature may requi re more incentives for such action.
is aligns with many of the submissions on the NPS. Submitters recognised
that the eective protection of biodiversity requires good local knowledge
of the environment and active management, and urged for incentives for
landowners to protect biodiversity on their land by way of compensation for
the considerable time and cost involved.208
203 Memon and Skelton, above n 17, at 182.
204 Tonkin and Taylor Limited, above n 144, at 15; Memon and Skelton, above n 17, at 198.
205 Quétier and Lavore l, above n 81, at 2995.
206 Queen Elizabeth the Sec ond National Trust “About Covenanting” (2011) Queen Elizabeth
the Second Nationa l Trust .
207 D Robi nson “Strategic plan ning for biodiversit y in New South Wales” (2009) 26 Environment
and Planning Law Jo urnal 213 at 231.
208 Ministry for t he Environment, above n 139, at 7, 89.
Apples for Oranges? Biodive rsity Osetting in New Zealand 163
VII. C
While it is clear that t here are a number of uncertainties, the active interest
taken in biodiversity osetti ng by the Environment Court and its inclusion
in the NPS indicates that it is here to stay in New Zea land. e particula r
complexities of the concept in the New Zealand context involve establish ing
its place within the wider resource management regime.
As a rst step, biodiversity osetting c ould arguably be addressed through
an amendment to the RMA. A suciently certain methodology for the
design and implementation of oset proposals must then be ascerta ined.
e international policy of “no net loss” may not be entirely appropriate for
the New Zealand context in t his respect, given that the R MA is not a “no
eects” statute. ere should be more emphasis on considering the amount
of osetting appropriate in a particula r situation. e resulting methodology
must cover the more practical matters outlined, which will mean it can be
more consistently applied. Once successfully implemented, provision for
monitoring, enforcement and long-term outcomes must similarly be ensured.
is is an area of par ticular concern at present that should be systematica lly
pursued in the future.
Despite the administrative and other di culties, the potential biodiversity
osetting oers for better and broader environmental outcomes cannot be
disregarded. is is consistent with the overall broad approach taken under
the RMA a nd particularly pertinent given the current declining state of
indigenous biodiversity in New Zeala nd. A system to better facilitate and
encourage osetting proposals is certainly needed. ere may be room in
the future for a more market based or trading approach, as in New South
Wales, in coordination with the QEII National Trust regime and various
Department of Conservation funds or initiatives.
In 2000, the scientist James Barone undertook a spectrogr aphic analysis of
the properties of ground, desiccated samples of apples and oranges. His st udy
revealed that apples and oranges a re scientically comparable and, in fact,
remarkably similar.209 In the environmental context, it is certain ly not safe
to go so far as to say that biodiversity and habitats are necessarily comparable
and similar. However, what Barone’s article may serve to illustrate is that, with
strict and strategic design, implementation, monitoring and enforcement -
what on its face seems an impossible task - may indeed be achievable. For the
benets biodiversity osetting may oer at a time of biodiversity crisis, t he
practice certain ly requires furt her legal and moral attention in New Zea land.
209 J Barone “Compa ring apples and orange s: a randomised prospec tive study” (2000) 321(7276)
British Medical Jo urnal 1569 .

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