Economic vs environmental interests

Much of Aotearoa New Zealand’s Nature exists on private land, including unique ecosystems that are not present on public land. But development on private land has led to a very high rate of biodiversity loss, including of species rarely found on public land. An alarming number of Aotearoa New Zealand’s environmental crimes are being committed on private land with impunity.

The RMA is Aotearoa New Zealand’s key legislation for regulation of environmental crimes. It was enacted as a textbook way to address market failure. The RMA tries to force market players to pick up the tab for exploiting Nature when producing goods and services instead of leaving it to the public to pay for the costs, either now or in the future. It was designed to protect the public interest from the private interests of a relative few who exploit Nature for their own benefit. 

However, the RMA’s public interest goals to protect Nature have mainly failed. This is because regulation is extremely vulnerable to “agency capture”, in which private interests capture the regulatory processes meant to protect the public interest for their own benefit. 

Agency capture can easily happen because powerful development interests are well-resourced, well-organised, concentrated, and intensely incentivised to keep exploiting Nature for their immediate gains. The public interest to protect Nature is no match, being under-resourced, poorly organised, and thin on the ground. Politically, private interests to exploit Nature almost always trump public interests to protect Nature.  

That the public interest is so much weaker and diluted than private interests is a symptom of modern societies that suffer from short-termism. The long-term interests of Nature and humanity are being lost to the short-term profits of a relative few. Environmental offending generally does not affect anyone or their pockets directly in the short term. Those costs will come to the public later on, potentially future generations. Due to modern societies’ disconnection from Nature, most people only feel the benefits of Nature faintly, if at all. And the law does not consider Nature to be a direct victim, nor to have a voice. As a result, agencies feel little public pressure to prosecute environmental crimes in comparison to other crimes that affect people personally and directly. Meanwhile, environmental offenders reap direct and almost immediate financial benefits from the exploitation of Nature. It flows from this that the greatest threat to environmental law is opposition from the economic sector.

Worldwide, environmental laws are cursed by this clash between the public interest to protect Nature and vested interests to exploit Nature. In order to “survive”, regulatory agencies often align with more powerful private interests rather than the weaker public interest. They enact grandiose yet purposefully vague legislation that ends up serving economic interests due to its ineffectiveness and unworkability. 

Prosecution of environmental crimes

The drafters of the RMA put the idea of prosecution of environmental crimes into the Act, but gave little real thought as to how this would be achieved. They delegated the main role of prosecution to councils, including the discretionary power to prosecute (or usually not to prosecute) as they pleased. Government does not get involved or offer oversight, the Environment Court defers to what Council thinks is best, and there is no environmental “victim” to hold Council to account over its actions or inactions. Council is therefore accountable to noone as RMA enforcer (or non-enforcer). Often, this means no prosecution at all, or, on the rare occasion that prosecution is initiated, wriggle room to get out of or around it.

Council as the RMA enforcer

In Aotearoa New Zealand, another layer is added to the conflict between the environment and economic growth. Council (as the main enforcer of the RMA) has these conflicting economic and environmental mandates baked into its institutional structure. Even though it is tasked with dealing with RMA crimes, it also has a potent agenda to support local economic growth. It wants to appear business-friendly, and Council staff have even admitted to turning a blind eye to environmental offending. In the specific case of illegal dumping of development waste, it appears that Councils don’t want to discourage the development sector by publicly enforcing the full environmental costs of development and its waste. This massive conflict of interest has led to decades of Council failure to treat serious RMA breaches as environmental crimes.

Councils also lacks the resources to stop environmental crimes. But this lack of resources is a political choice. Prosecution under the RMA is undesirable to powerful and electorally significant sectors and therefore politically unpopular, and since Council wants to encourage certain industry activity, such as the housing development sector in Auckland, it is not exactly going to be enthusiastic about funding their prosecution. Agency capture further drives councils towards under-resourcing CME and frowning upon enforcement generally. Some councillors have even run for Council on the basis that, if elected, they will change the Council’s enforcement practices. Because of anti-enforcement messages from elected officials above, compliance staff feel pressure to only use compliance tools, and can sometimes take a lenient, more relaxed approach to offenders for longer than is appropriate, during which time the offending continues. Informal, off-the-books political meddling in CME decisions is also an issue. Such political interference by elected officials in enforcement processes appears to be common amongst councils.

Before an environmental offence is even considered for prosecution, it needs to go before an enforcement panel in many councils, which are often stacked with business-friendly councillors. Then, if the case clears the enforcement panel hurdle, many councils’ chief executives have final say on whether to prosecute an RMA breach. They are, again, subject to political, especially business, pressures. And alongside this lengthy process, once again, environmental offending can continue apace.

Enforcement costs money

Successive governments have favoured the “compliance family” of tools for dealing with breaches of the RMA. Abatement and infringement notices are cheap and easy. They don’t take up a lot of staff time and can be issued on the spot. Staff don’t have to run the notices by the legal team first (which would cost more money), since they just sign a standard form.

Abatement notices requiring compliance with the RMA are the favoured primary “cost effective” tool. Whether they actually work to deter environmental crimes is another matter. Meanwhile, infringement fines range from $300 to $1000. Even the most serious cases that should have gone to court have been dealt with using infringement fines (that also don’t work as a deterrent) instead as a result.

On top of this, Council’s enforcement budget is capped. Compared to the compliance family of tools, enforcement is expensive and time-consuming, tying up Council staff’s time. It also costs time and money to investigate RMA breaches in order to bring a case to court. Therefore, Councils are very picky about which cases make it to court at all.

Being risk averse, even though the standard of proof required is lower, Councils will only take a case where there is “no chance of failure”. If, on the rare occasion, Council decides to prosecute, it will spend more time and money ensuring that the case is “watertight”, meaning that there is less money left in the enforcement kitty for other cases. The main reason that Council is so risk averse is that it only wants to prosecute successful cases for its reputation.

Laser focus on recovery of costs

After clearing all of these hurdles, even in the rare case where environmental criminals do face court action, penalties are moderate and not much of a deterrent. This is because a main focus for councils is to recoup their investigation and prosecution costs rather than to punish offenders or deter future environmental crimes. 

Councils have inappropriately captured the Environment Court process to recover their costs. They will almost always suggest to the court that the penalty be a fine, and the Environment Court will go along with this, thinking that council knows best. The fine is typically modest because councils are only focussed on recovery costs, not on deterring future offending. Therefore, even serious breaches have only attracted low sentences. It is improper to set the level of fine based on councils’ costs rather than on the offending. Councils have been allowed to act this way for years due to a lack of checks on their actions.

Councils will also do deals with offenders for the main purpose of maximum recovery of their costs, either in court or out of court. 

Doing deals in court

Councils will often do a deal with environmental offenders within the court process in order to recover their costs. “Not guilty” pleas are much more expensive for councils, as an Environment Court trial will create ballooning costs to do with increased administrative and pretrial hearings, preparation of evidence, engagement of experts, and the trial itself. Therefore, there are often vigorous negotiations between Councils and offenders before sentencing, with councils giving away “bargaining chips”, whittling away at the offender’s wrongdoing, sometimes until it almost equates to nothing, until a bargain is struck where the offender pleads guilty in exchange for a discounted sentence. Defendants can receive a discount of up to 25% for entering a guilty plea.

Doing deals out of court

Councils and offenders both like a good RMA diversion away from the court process. Council gets a guaranteed return of its costs, and the offender can stay outside of the court system as well as keep its legal bill down. The deal usually involves the offender doing certain things in exchange for the council making the court case go away. Sometimes, the case is dropped after the offender agrees to pay a sum of money that will include guaranteed recovery of council costs. If the case is diverted away from the courts, then it will remain private, confidential and out of the public eye, which is highly desirous to the offender. This amounts to the offender buying its way out of conviction and the case being made public.

Public prosecutions of serious RMA breaches are then replaced by private confidential settlements involving chequebook justice between councils and offenders, outside of proper procedure. Under the RMA, less serious breaches are punished with infringement fines, and more serious breaches are punished with prosecution. There is no legal basis for this in-between measure that councils have invented for their own benefit. 

Doing diversionary deals outside of the law could be seen as a way for councils to bypass the rule of law, usurp the role of the courts, and become the law and sentencer themselves. Councils can then behave however they want without public scrutiny and have total control of the outcome without the unpredictability of case law and the courts. 

Council gets frustrated by how the law and courts operate, and so it creates its own laws and mechanisms in order to guarantee recovery of costs. This may be great for ratepayers, but not for the rule of law. For the law to work, it must be consistent, reliably enforced, and operating in public. The rule of law is not there to help save Council money and to recover its costs. It is there to deter environmental criminals from offending. If we want the existence of a consistent, reliable rule of law that deters criminals from offending, then it is going to cost us money to enforce it.

Picking and choosing cases

Councils also pick and choose which cases they will prosecute partly based on how easily they can recover its costs from them. It chooses mainly to prosecute section 15 (discharge of contaminants into water) cases because it is easier to prove harm and recover costs in these cases. Council rarely prosecutes section 9 (restrictions on use of land) cases because it is hard to prove “identifiable damage”, and the starting point for these cases is that you can use the land how you like. It requires a lot of legal and expert advice to determine if there has been a section 9 breach, and the defendant is more likely to challenge it. This means that section 9 breaches are often “dealt with” by lower level compliance measures, unless the media brings attention to their non-prosecution. The law is meant to be consistent and predictable, yet these kinds of machinations show that each case is treated differently (and unequally) and do not send a clear message to offenders, contributing to Aotearoa New Zealand’s descent into environmental lawlessness.

Treating serious RMA breaches as environmental crimes

It was intended that serious breaches of the RMA would be treated as crimes when the RMA was drafted.

Criminal law begins from the starting point of prosecution for breaches of criminal law. Councils, on the other hand, even though they are meant to be dealing with serious RMA breaches as criminal offences, will only use prosecutions as a last resort. 

Criminal sentencing focuses on the victims of offending. RMA sentencing, however, focuses on Council recovering its costs. The penalties that Council is aiming for at the Environment Court are not commensurate to the crime, but to Council’s recovery costs. Yet the focus should be on punishing the environmental wrongdoer, not on compensating Council’s costs. Council should not be undertaking a cost-benefit analysis when deciding whether to prosecute. It is not cheap to uphold the rule of law. It should be using the criminal offence provisions of the RMA appropriately. Furthermore, the Crown and Police handle prosecution of criminal cases, so why not also RMA cases (which are meant to be criminal)? 

Environmental law will only work to deter current and future offending if it is consistently and firmly enforced, as well as a matter of public record. Instead, government and council failure to uphold the environmental rule of law has encouraged widespread environmental lawlessness throughout Aotearoa New Zealand.