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Protecting productive land

Property, Rural
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New policy statement: NPS-HPL

Following the Our Land 2018 joint report from the Ministry for the Environment and Stats NZ, as well as a certain amount of political pressure, the government gazetted the National Policy Statement for Highly Productive Land (NPS-HPL) on 19 September 2022.

The NPS-HPL came into effect on 17 October 2022 (the commencement date) and requires every regional council to map as highly productive land any land in its region that is:

  • In a general rural zone or rural production zone
  • Predominantly Land Use Capability (LUC) 1, 2 or 3 land, and
  • Forms a large and geographically cohesive area.

This mapping must take place within three years from the commencement date.

Protection of urban expansion on highly productive land

The Our Land 2018 report found that, amongst other things:

‘Urban expansion is reducing the availability of some of our most versatile productive land.  Studies based on changes in land cover indicate that between 1990 and 2008, 29 percent of new urban areas were on some of our most versatile land. Fragmentation can also be a pressure on urban fringes: in 2013, lifestyle blocks occupied 10 percent of New Zealand’s most versatile land. This may block future options for agricultural production.’

Accordingly, the intent of the NPS-HPL is to protect highly productive land for use in land-based primary production, both now and for future generations.

It does this by requiring the mapping of highly productive land and putting significant restrictions on the ability of local authorities to zone this land for subdivision, urban development or rural lifestyle purposes.

LUC 1, 2 or 3 land is arable land that is suitable for cropping, viticulture, berry fruit, pastoralism, tree crops and forestry. LUC class 1 has minimal limitations and is highly suitable for those uses whereas LUC class 3 has moderate limitations for those uses.

Regional councils may also map land that is not LUC 1, 2 or 3 land as highly productive if the land is, or has, the potential to be highly productive for land-based primary production in that region having regard to a variety of factors.

Exceptions

There are, as always, some exceptions: to the NPS-HPL. These are:

  • Land that, if already identified for future urban development, must not be mapped as highly productive land
  • Certain territorial authorities may allow urban rezoning of highly productive land if:
  • Urban rezoning is required to provide sufficient development capacity to meet demand for housing or business to give effect to a National Policy Statement on Urban Development 2020
  • There are no other reasonable, practical or feasible options providing at least sufficient development capacity within the same locality and market while achieving a well-functioning urban environment, and
  • The environmental, social, cultural and economic effects of benefits of rezoning outweigh the long term environmental, social, cultural and any economic costs associated with the loss of highly productive land for land-based primary production, taking into account both tangible and intangible values.

There are further prescribed matters that the territorial authority must consider when making its decisions on whether or not to rezone highly productive land. There are also similar restrictions in relation to the subdivision of highly productive land and zoning highly productive land for rural lifestyle purposes. Territorial authorities are required to avoid ‘inappropriate use or development of highly productive land that is not land based primary production.’ 

On a practical level

It will be interesting to see the practical effect of the NPS-HPL around the country. Many of our urban areas are built on highly productive land, for obvious historical reasons. Those areas that spring to mind are the productive vegetable growing areas of Pukekohe and the Horowhenua, and the apple and wine growing regions of Hawke’s Bay, Marlborough and Nelson. Some urban areas in this country have little room for expansion other than on highly productive land.

The rural community will welcome the NPS-NPL but it will present difficulties for town planners to figure out how to deal with the much-publicised need for further housing. Allowing higher destiny development in district plans may be one solution to these problems.

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Over the fence

Rural
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Recognised Seasonal Employer visas

In September, the government announced an increase to the Recognised Seasonal Employer visa cap to meet the increasing demand for horticultural sector employees. An additional 3,000 RSE visas can now be granted for the 2022–23 year, making a total of 19,000 available RSE visas.

An RSE visa applicant must meet the following requirements:

  • Be 18 years of age or older
  • Live in an eligible Pacific country at the date of their application, these include the Federated States of Micronesia, Fiji, Kiribati, Nauru, Palau, Papua New Guinea, the Republic of Marshall Islands, Samoa, the Solomon Islands, Tonga, Tuvalu and Vanuatu
  • Work in recognised areas such as the fruit, vegetable or wine sectors, and
  • Work a minimum of 30 hours/week, and
  • Be paid a minimum of $22.10/hour.

A successful RSE visa holder cannot enter New Zealand until 14 days before the start date of their visa and must leave New Zealand before their visa expires. An RSE visa holder may, however, apply for a further RSE Limited visa where they are to continue working for a recognised employer and have not already stayed in New Zealand for the maximum time allowed, which is seven months in an 11-month period. It is worth noting that RSE Limited visas are only granted in exceptional circumstances.

It is important to understand your legal responsibilities when employing an RSE visa holder. If you are unsure about your obligations, please don’t hesitate to contact us.

Updates to intensive winter grazing requirements

In September 2020, the government introduced the Resource Management (National Environment Standards for Freshwater) Regulations 2020 in an attempt to regulate certain activities which pose a potential risk to freshwater and the environment.

One activity covered by these Regulations is intensive winter grazing (the grazing of livestock on an annual forage crop at any time from 1 May to 30 September of the same year). On 1 November 2022, new regulations came into force in respect of intensive winter grazing (the Updated Regulations); these will impact farmers across New Zealand.

The first change is the requirement to have an intensive winter grazing management plan in place. The purpose of the plan is to identify the potential risks of intensive winter grazing, how you will mitigate those risks on your farm and to identify whether your current intensive winter grazing practices will still be considered a permitted activity (an activity that does not require a resource consent) under the Updated Regulations.

The Updated Regulations have changed which activities are considered a permitted activity.

More restrictions include, for example, the total area on which you can implement intensive winter grazing, the slope of land and stock distance from waterways. If you are unable to comply with the Updated Regulations, you must apply for a resource consent by 1 May 2023.

It is important to understand your legal responsibilities about intensive winter grazing. If you are unsure about your obligations, please don’t hesitate to contact us, or your local council.

Proposed changes to the dairy and cattle code of welfare

The National Animal Welfare Advisory Committee has recently reviewed and consulted on the minimum standards and best practice for the Code of Welfare for Dairy Cattle.

The Code was last reviewed in 2008, before the Animal Welfare Act 2015 came into force. This Act records that animals are capable of experiencing emotions; negative experiences for animals should be reduced and exposure to good experiences should be increased. As a result, a review of the Code is needed to bring the standards and regulations in line with the Act.

The proposed changes to the Code include:

  • Changes to the body condition score requirements. This score provides an indication of a cow’s body fat reserve, which can be useful in respect of assessing the health of the cow
  • Provision of shade and shelter (previously the requirements were that animals must be provided with means to minimise the effects of adverse weather)
  • Restrictions on the use of hip clamps
  • Banning the use of electrified backing and top gates
  • Banning the use of electro-immobilisation devices
  • Transport restrictions relating to travel time, time from the cows last being milked and water being provided at collection areas, and
  • Requirements around lying areas for cattle especially within intensive winter grazing systems.

Submissions on the proposed changes closed in June of this year. The National Animal Welfare Advisory Committee is now reviewing submissions.

If you have any queries in relation to the proposed changes, or what this means for you, please don’t hesitate to contact us.

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Over the fence

First Job, Rural, Your Own Business
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Health and safety on farms

Between June 2020 and May 2021, WorkSafe New Zealand recorded 12 workplace fatalities in the agricultural sector, while 2,517 workers in the sector had work-related injuries requiring them to have more than a week off work. Any fatality or serious injury which occurs at a workplace is a tragedy and it is therefore important to have health and policies in place which are fit for purpose and protect both employers and employees.

Although it is not a formal duty, it is the responsibility of all individuals in a workplace to identify any hazards, assess their risk, actively take steps to control that risk and to report any hazards they have identified. There are also specific formal obligations owed by both employers and employees which are summarised as follows:

  • Employers: you have a primary duty of care to your employees. There must be a health and safety policy in place that should be regularly reviewed to ensure that the policy takes into account the constantly evolving risks that your employees face. You must also ensure that the policy is being complied with by, for example, checking that your staff wear the correct safety equipment and that the correct safety measures have been taken with machinery, chemicals and animals.
  • Employees: you must adhere to your workplace’s health and safety policy. You must take reasonable care of your own health and safety, and ensure that you do not cause harm to others in your workplace.

Health and safety on the farm is hugely important. Failing to have proper policies in place and/or failing to comply with these policies can lead to serious fines and/or imprisonment.

If you need help with your farm’s health and safety policy and/or have queries around employment or health and safety laws, please don’t hesitate to be in touch.

Stock control bylaw changes

The Tasman District Council (TDC) has recently proposed changes to its stock control bylaws. If these changes are adopted, there will be major implications for the Tasman rural community.

Some of these proposals align with other districts that have already implemented similar bylaws, however some proposals by the TDC go even further.

The TDC proposes introducing further signage requirements to stock warning signs. If the bylaws are passed, all stock warning signs in the Tasman district must be placed in front of the crossing by a distance equivalent to three times the speed limit of the area. A crossing is any part of the road used for the purpose of driving stock across the road. This aligns with Waka Kotahi NZ Transport Agency’s guidelines for best sign locations. There are a number of district councils across New Zealand that have implemented similar bylaws.

Perhaps the most controversial proposed bylaw, however, is the obligation that farmers would have to hold livestock 50 metres back from the road’s exit point until all traffic has passed. There are understandably concerns as to the practicality of this proposal.

Public consultation on the proposed stock bylaws remained open until 1 August 2022. The proposed changes will not only affect the Tasman district rural community, but could also influence other councils to update their stock control bylaws.

It is important to understand your legal responsibilities when moving livestock on roads. To learn more about stock bylaws, contact your local council or look at its website for useful summaries on your obligations.

Live export contracts and force majeure clauses

The live export of cattle often means that farmers receive higher prices for their cattle than they would in the domestic market. Despite this, farmers run the risk of incurring significant loss when livestock exporters cannot meet their obligations under a live export contract (contract entered into by a farmer/s and a livestock exporter that records the terms of selling and shipping livestock overseas).

A livestock exporter may be unable to ship cattle overseas if, for example, they are unable to arrange a ship to transport the livestock. This occurred in May 2022 when livestock exporter Genetic Development (NZ) Limited (GDNZ) was unable to arrange a ship to collect 12,000 or so cattle from New Zealand. GDNZ was forced to abandon the contracts it had signed with farmers across New Zealand and relied on a force majeure clause in the respective contracts to do so.

A force majeure clause allows a party to be released from its obligations under a contract when that party is unable to fulfil their obligations due to unforeseeable circumstances. In the GDNZ situation, some farmers had to sell their cattle on the local market at a lower price than they would have received if the cattle had been shipped overseas.

The GDNZ example shows that farmers should carefully review contracts to understand the implications of force majeure clauses and their ability to receive compensation for loss suffered in the event such a clause is invoked.

If you are involved in live export contracts and are unsure about the wording or implications of a force majeure clause, please don’t hesitate to contact us.

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Crown Pastoral Land Reform Act 2022

Rural
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Tenure review has ended

In the Autumn 2019 (No 29) issue of Rural eSpeaking, we reported that the Land Information Minister had announced that tenure review of Crown pastoral land under the Crown Pastoral Land Act 1998 (CPLA) would end. On 17 May 2022, the Crown Pastoral Land Reform Act 2022 (CPLRA) became law. In this article, we outline what is included in the new legislation, what will continue to be dealt with under the old Act, and how the Crown proposes managing this land.

In February 2019, the then Minister of Land Information, the Hon Eugenie Sage, introduced a discussion document setting out proposals as to how Crown pastoral land could be managed following the end of tenure review. Feedback was sought on the implications of ending the tenure review, the outcomes the Crown was seeking for Crown pastoral land and what changes could be made to the Crown Pastoral Land Regulatory System to achieve those outcomes.

The passing of the CPLRA on 17 May 2022 (the Commencement Date) is a result of both the resolution to end tenure review, and the decisions made following the circulation of the discussion document and the feedback received. Tenure review ended on the Commencement Date (except for some exemptions as set out in column 2) with most of the rest of the CPLRA coming into effect on 17 November 2022.

Aspects continuing under the old legislation

Tenure review ended on the date the bill became law (17 May 2022) except where[1]:

  • A substantive proposal had been accepted under Section 60 of the CPLA before the Commencement Date notwithstanding that that proposal is still being processed by the Commissioner, and
  • A substantive proposal had been put to a holder before the Commencement Date and where the holder had not accepted it before the Commencement Date but the three-month period during which they had to accept the proposal had not expired before the Commencement Date.

All other tenure reviews are discontinued, and the Commissioner of Crown Lands is not to take any further actions to progress any of those reviews.

Other exceptions

There were certain other matters that, if they were in progress under the CPLA or the Land Act 1948, will continue to be dealt with notwithstanding the passing of the CPLRA. These are[2]:

  • Consents to undertake pastoral activities
  • Consents to transfer leases
  • Exemptions from stock limitations or their variation or revocation
  • Recreation permits under Section 66A of the Land Act 1948, and
  • Easements.

These matters must be dealt with by the Commissioner as if the CPLRA had not been enacted.

How will the Crown manage this land?

With the ending of tenure review, how does the Crown propose to manage this land?

Tenure review was based on the proposition that it was better to end the leasehold regime with the Crown taking full and unencumbered ownership of this alpine land in exchange for allowing the leaseholder to purchase the freehold of parts of it.

The situation now is that the land will continue to be leasehold, that is, the Crown continues to own it; the leaseholders’ perpetually renewable leases will continue and therefore the leaseholders will have a legal estate akin to ownership. This situation does not, however, give leaseholders complete freedom as to how they use or deal with the land (subject to the usual Resource Management Act 1991 restraints) that freehold ownership would give them.

How does the Crown propose to fulfil the objectives of the CPLRA? These are[3]:

To provide for the administration of pastoral land in a way that seeks to achieve the following outcomes:

(a) Maintaining or enhancing inherent values across the Crown pastoral estate for present and future generations, while providing for ongoing pastoral faming of pastoral land:

(b) Supporting the Crown in its relationships with Māori under Te Tiriti o Waitangi/the Treaty of Waitangi:

(c) Enabling the Crown to get a fair return on its ownership interest in pastoral land.

Crown will be a more active landlord

The CPLRA intends to achieve these objectives in the ways that were foreshadowed in the discussion document. Basically, the existing regulatory regime is to be beefed up so that the Crown is a more active landlord in promoting the ecological, landscape, cultural heritage and scientific values of the land. Exactly what form that will take, however, is still uncertain. Much of the Act will not come into force until 17 November 2022, by which time the regulations and various standards should be enacted.

What is certain, however, is that farmers on Crown pastoral land are going to be more restricted in what they can do without needing to apply for consent. As always, when consents are required, the process is slow and costly, so there will be an economic impact on farmers.

[1] Crown Pastoral Land Reform Act 2022, Schedule 1, s2

[2]  Ibid, Schedule 1, s4

[3]  Ibid, s5

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

He Waka Eke Noa

Rural
0

Recommendations with the government

In the Autumn 2022 issue of Rural eSpeaking we wrote that, following a period of public consultation, the He Waka Eke Noa (HWEN) Partnership was about to provide its recommendations to the government on how best to equip farmers to measure, manage and reduce on-farm agricultural greenhouse emissions.

Recommendations

In its report to the government, HWEN has recommended a farm-level split-gas levy pricing system. The key features are:

  • Farms calculate their short and long-lived gas emissions using a single centralised calculator (or farmers can use existing tools and software that are linked to a centralised calculator)
  • The system will be calculated by on-farm emissions determining levy costs, rather than the use of national averages
  • A recognition of reduced emissions from on-farm efficiencies and mitigations as they become available
  • Incentives are provided for the uptake of actions to reduce emissions
  • A split-gas approach applies different levy rates to short and long-lived gas emissions
  • On-farm sequestration is recognised that could offset the cost of the emissions levy
  • Levy revenue is invested in research, development and extension (providing technical advice and information) including a dedicated fund for Māori landowners, and
  • A System Oversight Board is established with expertise and representation from the primary sector. The board will work closely with an independent Māori board to provide recommendations on levy rates and prices, and set a strategy for the use of levy revenue.

Levy rates yet to be set

At this stage, levy rates have yet to be set. The modelling has, however, estimated that if a farm-level split-gas levy was applied to agricultural emissions, along with incentives for actions to reduce emissions, then an additional 4% to 5.5% reduction in gross methane emissions and 2.9% to 3.2% in gross nitrous oxide emissions between now and 2030 is achievable (over and above the baseline achieved by other environmental policies).

These reductions would come from a combination of within farmland use change, change in farming practices and the uptake of new technologies.

If this model is adopted, HWEN would be placing responsibility squarely on the heads of individual farmers, making them (to a certain extent) in control of their own destiny, by making decisions and adopting practices based on their emissions from their farm. This will almost certainly lead to changed farming practices and, in some cases, the current farming set up may well become economically unviable.

Government has not yet agreed to proposal

It is important to note that the HWEN recommendations are just that; the government will consider those recommendations (with advice from the Climate Change Commission) and make its final decision in December 2022.

If the government accepts the HWEN recommendations, the relevant legislation is likely to be drafted in 2023.

The intention is that by 1 January 2025, all farms should have a written plan to measure and manage their greenhouse gas emissions. The recommendations noted that 61% of farmers and growers already know their numbers (ie: they are calculating their emissions at farm level) with 21% already having a written plan. HWEN hopes to have 100% of farmers knowing their numbers by the end of 2022 to enable the written plans to be ready by 1 January 2025.

Adding to on-farm costs

Obviously, any levy system will add to on-farm costs which are already under pressure. During the consultation period, farmers raised concerns for the future of the primary sector and they expressed the importance of remaining internationally competitive.

HWEN noted that deer, sheep and beef operations will probably face a greater impact on their bottom line than dairy operations. Modelling showed that, in general, the impact on average farm profit varied from zero up to 7.2% (with a significant variation across farm systems with some farms being impacted more significantly than others).

There is a challenge ahead for the primary sector. Nothing is certain, however, until the government makes its final decision with more critical decisions to follow, most noticeably in the pricing area.

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Over the fence

First Job, News, Rural, Your Own Business
0

New minimum wage

From 1 April 2022, the minimum wage increased from $20.00 to $21.20/hour. If you haven’t already, you should review your employees’ pay rates to ensure you are compliant with the new minimum wage. For employees on a wage, this is a straightforward process as you only need to ensure that your employees’ wages are at least $21.20/hour. This is not the case for all employees, however, including those on a salary, as it makes it more difficult to calculate if their current pay rate is sufficient when they work overtime.

During busy times, such as the harvest and calving, salaried employees often work hours over and above their regular contract hours. You should check the pay of these employees every pay period to ensure their pay divided by the actual hours they worked meets minimum wage requirements. If not, your employee’s pay must be topped up to at least the minimum wage, regardless of whether any term in their employment agreement says otherwise.

Failing to keep accurate time records could lead to a penalty under the Employment Relations Act 2000 or Holidays Act 2003. You should also take this opportunity to ensure your time recording systems are accurate.

Vaccine mandate ends: how this will affect the rural sector

People employed in education, police, defence and hospitality are no longer required to be vaccinated to carry out their work. Employees in the health, aged care, corrections and border sectors, however, must still comply with vaccine mandates. Any terminations based on vaccination status made before these mandates were dropped are not unlawful, nor are there requirements to reinstate these past employees.

The rural sector is not directly impacted by these mandate changes. However, with many businesses having imposed mandates, they can still choose to implement their own vaccine mandates, but it must be implemented in accordance with a risk assessment.

It is important to be cautious when implementing a vaccine mandate as the case of Yardley v Minister for Workplace Relations[1] found that vaccine requirements for the police and defence force were unlawful and imposed on their right to refuse medical treatment. There is a risk that similar cases could be brought in other employment sectors. Therefore, it’s necessary to undertake a comprehensive risk assessment to determine if a vaccine mandate is required at your farm or rural business.

Vaccine passes are also no longer required for those entering a business. People coming on to farms are no longer required to prove their vaccination status. However, businesses can choose to keep this mandate in place.

Russia Sanctions Act: impact on the rural sector

The Russia Sanctions Act 2022 was recently passed to help combat Russia’s breach of international law and aggressive acts towards Ukraine. The Act came into force on 12 March 2022 and imposes sanctions on individuals and entities involved in the attacks on Ukraine. Sanctions may also be imposed for strategic purposes or to undermine Russia’s economy. The sanctions have extraterritorial application and target travel to and from New Zealand, and impose certain controls over assets and services connected to sanctioned entities. There is further detail in the Act’s accompanying Sanctioned Persons Schedule.

These sanctions are expected to have implications on both imports and exports. Russia’s top imports to New Zealand include crude petroleum oils and potassium fertilisers that are key resources used in the rural sector. It is anticipated that supply chain disruption, shortages in raw materials and fluctuations in prices will result.

Some corporates are also choosing to impose sanctions on Russia. Fonterra has announced it will exit its businesses in Russia and suspend all its exports to Russia. This may have implications for dairy farmers, but Fonterra has stated its exports to Russia total only about 1% of its annual exports (primarily butter).

[1] Yardley v Minister for Workplace Relations [2022] NZHC 291

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Forestry update

News, Rural, Your Own Business
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Challenges ahead

Forestry is attracting a great deal of interest and opportunity right now. This rapidly growing area faces challenges in terms of public opinion, regulation and general understanding. With all that is going on, where does this leave the agricultural sector in terms of sequestering carbon and the Emissions Trading Scheme (ETS)? We update you on some current issues.

‘Forest land’ and the farm

Forestry is a big player in sequestering carbon, however, not all forestry on a property can be registered in the ETS. The ETS defines ‘forest land’ as an area that is at least one hectare in size and has (or will have) tree crown cover of more than 30% in each hectare of forest species, at least 5m in height at maturity and an average width of at least 30m.

This set of rules restricts the parameters of registerable areas for carbon sequestration and, in particular, discounts some current developments and areas on farms. The scheme, for example, rules out smaller areas of riparian planting that many farmers have invested in to improve the ecology and environment on their land. However, if He Waka Eke Noa achieves its alternative emissions goal, this could change and, while these areas would not generate the same economic gain as ‘forest land’ under the ETS, they could create reward for existing on-farm sequestration.

Carbon accounting

Carbon accounting is the method by which an ETS participant calculates and reports changes in the carbon stored in a forest. To determine how many units a participant is entitled to earn (or must surrender), an emissions return must be completed and filed with the Ministry for Primary Industries. An emissions return must be made at least once during an emission return period; the current period runs from 1 January 2018 to 31 December 2022.

The 2023 ‘rush’

If an eligible area is ETS-registered before the end of the current emission period (see above), significant returns could be leveraged by a participant claiming carbon units back to the start of the return period – 1 January 2018. This opportunity will, however, lapse by the end of 2022 when the next emissions period begins, thus creating an incentive (or ‘rush’) for landowners to consider the ETS in a more serious light in order to reap this financial reward.

2023 also introduces a change to carbon accounting. All post-1989 forests currently registered in the ETS use the stock change accounting method for carbon units and will continue to do so until 2023, at which point a landowner can decide whether to move to averaging accounting or remain in stock change accounting. From 1 January 2023, however, if a post-1989 forest is registered in the ETS the participant can only use the averaging accounting method unless the forest land is registered in the permanent forest category. The permanent forest category (see below) will continue to use the stock change accounting method despite this change.

Stock change accounting: as a forest grows it stores carbon and the participant earns units; however, if the carbon stock decreases then carbon units must be surrendered, that is, harvested. In other words, stock change accounting focuses on short-term increases and decreases in carbon storage in a forest.

Averaging accounting: the participant will earn units for the first rotation growth, until the forest reaches its ‘average age.’ Averaging accounting means that if an area is replanted within a reasonable time period, the landowner is entitled to keep harvesting and not surrender credits.

While a participant can earn more carbon units under stock change accounting compared with average accounting, a participant will earn fewer ‘low risk’ units under stock change accounting. Low risk units are less likely to need to be repaid or surrendered.

Permanent forest category

2023 will bring about an additional category in the ETS called the ‘permanent post-1989 forest’; it replaces the current ‘permanent forest sink initiative.’

The new category is for forests that will not be clear-felled for at least 50 years. This option has generated much interest as an attractive investment opportunity for forestry owners and, more particularly, landowners seeking to turn farmland into economic gain. With the carbon price at upwards of $80/tonne, it is unsurprising the permanent forest category, and ETS generally, is pushing many farmers to consider forestry as a more viable practice in the future.

But is this set to change with the government’s recent proposal?

Proposal to exclude exotics

Under the current rules, a permanent forest category allows both exotic and indigenous forests to be registered in the ETS and earn New Zealand units (NZUs). The government has now, however, proposed excluding exotic species (such as pinus radiata) from the permanent forest category in a bid to better manage carbon farming in New Zealand.

The government’s proposed change (click here) has been generated from significant feedback and concern from scientists, primary industry and community groups, and local government with the increased rate of planting of exotic carbon forests on productive farmland.

Carbon farming is a hot topic not only in the rural sector, but also in environmental circles. Hopefully, the government’s proposal is the first step to a more strategic and managed process for the ETS in New Zealand.

In an ideal world we will have balanced opportunities for farmers to harness an income stream from their less productive land, while cultivating more valuable and sustainable areas of farmland for food production.

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

He Waka Eke Noa

News, Rural, Your Own Business
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Options out of the ETS for the primary sector

He Waka Eke Noa (HWEN) is a partnership established to reduce the emissions generated by the primary sector. It works to equip farmers to measure, manage and reduce on-farm agriculture greenhouse emissions and to provide sustainable farming practices for future generations.

More importantly, HWEN is developing a suitable emissions pricing scheme as the entire primary sector is not currently covered by the Emissions Trading Scheme (ETS). The government’s approval to this industry-led approach, however, comes with a large caveat – the ETS is the backstop for pricing agricultural emissions if HWEN does not deliver an effective and workable alternative.

HWEN has put forward two options to the ETS:

  1. A farm-level levy: this will calculate emissions using farm-specific data and the farm will pay a price for its net emissions, or
  2. A processer-hybrid levy: this will calculate emissions at the meat, milk, and fertiliser processor level, based on the quantity of produce received from farms or, the amount of product sold to farms. It will be paid at a processor level. This levy is likely be charged through to the farmer based on the quantity of product processed or supplied.

These options went out for public consultation earlier this year; HWEN will provide its recommendations to the government in late May.

These options aim to provide farmers with a practical and credible emissions pricing framework enabling them to control how their farm is operated. Crucially, the alternative mechanisms delink the methane price from the carbon price and give greater recognition of the sequestration on a farm, that is, a split gas approach.

Both the farm level levy and the processer-hybrid level acknowledge on-farm sequestration. For example, it would recognise native regeneration, riparian planting, shelter belts and other non-ETS eligible tree lots. This would be a significant win for many farmers who have invested heavily in improving the ecology and wellbeing of their land over the last few years.

What if either option is rejected?

If these two options are rejected, the sector will be subject to the ETS and the split gas approach will not be available; this means that the methane price will be linked to a rapidly increasing carbon price.

While agricultural emissions would be calculated at a processor level initially to create a ‘financial incentive’ for farmers to reduce emissions, it is likely that this would be passed on to farms based on the quantity of produce processed or product purchased. There is no doubt that costs for farmers would continue to increase annually, together with the ever-growing carbon price, despite continued work to reduce emissions.

‘Know your number’

Another milestone for HWEN is to ensure that all farmers and growers in New Zealand will know the annual methane and nitrous oxide emissions for their farms by December 2022. This has been dubbed ‘know your number’ by many in the primary sector. By 2025, each farm must have a written plan in place to measure and manage these emissions.

HWEN has defined a ‘farm’ as any farm over 80 hectares, or a dairy farm with a milk supply number or a cattle feedlot as defined in the National Environmental Standard for Freshwater. HWEN is supporting and assisting farmers in this process of knowing their numbers. While this space is still evolving and subject to change, the sooner farmers determine their numbers, the sooner they can understand where the emissions are being generated, and what actions may be taken to manage, mitigate or reduce them on farm.

Looking ahead

Regardless of the outcome that HWEN generates, the ETS and New Zealand’s international obligations create a need for better integration between forestry, emissions and the farming landscape. Farmers need to know their numbers so they can begin leveraging opportunities, and ensure they are in a good position for meeting legislative requirements.

To know more about HWEN and how it is working with the primary sector, click here. For advice relating directly to your farm or forestry situation, please don’t hesitate to contact us.

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2021.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Water Services Act 2021

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How does this affect the rural sector?

Water has been very much in the news lately, particularly with the government’s proposed Three Waters Reform Programme. The Three Waters Reform generally deals with the transfer of water infrastructure (drinking water, wastewater and stormwater) to four new water service delivery entities.

What hasn’t been in the news as much is a very important piece of legislation with regard to water that will impact on the rural community: the Water Services Act 2021. This came into force on 15 November 2021. The purpose of this legislation is to ensure that ‘drinking water suppliers’ provide safe drinking water to consumers. Previously, responsibility for drinking water was dealt with under the Health Act 1956 but, as a result of the water contamination issues in Havelock North in 2016 and the subsequent inquiries that resulted from that, it was determined that the supply of safe drinking water was so critical that it needed its own legislation and regulator — Taumata Arowai.

What is a ’drinking water supply’?

A ‘drinking water supply’ means the infrastructure and processes used to abstract, store, treat or transport drinking water for supply to consumers or to another drinking water supply. It includes the point of supply, any endpoint treatment device and any backflow prevention device, but does not include a temporary drinking water supply or a domestic self-supply.

Who is a ‘drinking water supplier’?

The Act defines a supplier as a person who supplies drinking water through a drinking water supply but does not include a ‘domestic self-supplier’. Therefore, the legislation applies to private water schemes as well as any public water supply.

A ‘domestic self-supplier’ means ‘a stand-alone domestic dwelling that has its own supply of drinking water’. So a single farm house with its own water supply will be exempt from complying with the legislation. A large farm, however, that might supply several houses and other buildings such as woolsheds or milking sheds that have staff rooms with kitchens from the same source through a private water system, would be subject to the provisions of the Act.

Similarly there are a significant number of rural water schemes where one water source supplies several properties (particularly where there have been lifestyle-type subdivisions). Sometimes these schemes are administered by virtue of the easements that were created in the subdivision. Occasionally, however, they are administered by companies that own the water infrastructure with all the landowners being shareholders in the company and shares being transferred at the same time as the land.

Drinking water suppliers must have a plan

If the Act applies to your situation, you are required to have a multi-barrier approach to water safety including:

  • Preventing hazards from entering the water
  • Removing particles and hazardous chemicals
  • Killing or inactivating pathogens by disinfection, and
  • Maintaining the quality of water distribution systems.

Each supplier must have a water safety plan that must include elements of international best practice, be proportionate to the scale of the water supply, and be subject to risk-based auditing and monitoring by Taumata Arowai.

What to do next?

The legislation requires a drinking water supplier to register its water supply. The registration must include certain information such as the legal name and contact details of the owner, the location of the supply, the area the drinking water supplies, the estimated number of consumers, a description of the water supply and any other information required by Taumata Arowai. As usual, the application must be accompanied by the fee or levy prescribed by regulations made under the Act.

Water suppliers registered with the Ministry of Health prior to 15 November 2021 will automatically have their registration migrated to the Taumata Arowai register.

Next you must prepare a drinking water safety plan to be lodged with Taumata Arowai. You also must implement the plan and ensure that the drinking water supply is operated in accordance with the plan. You can comply with your operational obligations by employing or engaging a third party to do this for you.

If you are already registered as a drinking water supplier, you must have your plan registered before 15 November 2022.

If you are an existing supplier and not currently registered, you have until 15 November 2025 to register and until 15 November 2028 to submit your plan.

If you are a new supplier, supplying water for the first time after 15 November 2021, you must register as a drinking water supplier and register your plan before you operate your supply.

For more detailed information, Taumata Arowai has what you need here.

The Act has teeth

What all this means in practical terms is more compliance, more cost and more responsibility in relation to water supply. There are penalties for failing to comply with the Act, including some criminal offences such as recklessness or negligence in the supply of unsafe drinking water or allowing contamination of the drinking water.

As you can see, the Act has teeth and it is now incumbent on both public and private suppliers to comply with the new regime — or face the consequences.

If you need help in working your way through this new legislation, please don’t hesitate to contact us.

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2021.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

‘Nuisance’ is still relevant in court

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No fault is necessary

Many of us are familiar with the tort of negligence — an act or omission by one party that causes loss to another party. Inherent in a negligence claim is the concept of ‘fault’. A recent case[1] illustrates why nuisance, a tort similar to negligence except that fault is not necessary, is still relevant.

Forest trees causing nuisance

Nottingham Forest Trustee Limited (NFT) owned land on which it had planted a commercial forest. Over a period from December 2010 to August 2016 pinus radiata trees growing in the forest, which had been planted many years earlier, fell onto two electricity lines owned and operated by Unison Networks. Unison’s customers experienced power outages while repairs were carried out, and Unison incurred costs as it repaired the damage.

Unison sued NFT both in negligence and in nuisance and sought damages to cover the cost of repairs and also an injunction to prevent future falls of trees.

Background

Unison’s electricity lines crossed over the land while it was a sheep and beef farm, and the power lines were present when NFT acquired the land and planted the forest. In planting the forest, NFT left a corridor under each of the lines approximately 30 metres wide where it didn’t plant trees. The nearest tree to the power line at any point was about 15 metres away.

Over time, however, the trees on the edge of the corridor grew to a height that was greater than the distance from the line. Pinus radiata can grow to 30 metres high. In the High Court proceedings the judge found that by 2010 the trees planted on the edge of the corridor had grown taller than the full distance between those trees and the lines. In those circumstances, there was what the High Court judge described as “a very good chance” that the lines would be hit and damage caused if a tree fell; that started to happen from about December 2010 and again in July 2011. In 2013, a tree fell in a storm causing $20,000 worth of damage to a structure on the line and there were further outages as a result of tree falls in April 2012 and November 2014. In Unison’s view, NFT was liable for the recurring damage (this was in 2015) and wrote to NFT asking that the trees be cleared to prevent further damage. This was resisted by NFT, unless Unison agreed to pay compensation for the loss of the trees.

More tree falls in September 2015 and August 2016 resulted in further damage, with Unison writing to NFT again claiming significant repair costs. This was once again resisted by NFT. NFT’s response was basically that growing trees was a natural use of land; liability for tree falls required fault in tree management and as NFT had complied with the regulatory regime and conducted regular inspections and so on, NFT was not at fault.

Indeed the negligence claim was quickly dismissed by the High Court as Unison  was unable to prove any particular fault on the part of NFT. Unison was, however, successful in its nuisance claim which in essence means if proven ‘strict liability’ follows, there is no need to establish fault. Both parties appealed the findings against them. The Court of Appeal upheld the High Court’s original decision.

About nuisance

A nuisance is defined as ‘any ongoing or current activity or state of affairs that causes a substantial and unreasonable interference with a plaintiff’s land or their use or enjoyment of that land.’ Unison obviously didn’t own any land in the vicinity. It simply owned the power lines that ran over the land. The court, however, held that since a statutory right constituted an interest in land and as the owner of utility works it has the exclusive right to occupy the portion of the soil where the works lie to the exclusion of all others and as such the right was greater than a right given by virtue of easement or licence.

Further, the court said, even if an interest in the land couldn’t be proven, as a matter of policy the existence and importance of works must mean that Unison had sufficient interest to found an action in nuisance. In particular, the court found that NFT created a state of affairs that caused unreasonable and continuing interference with the lines, and was therefore strictly liable even if NFT took reasonable precautions.

What is important to establish in nuisance is to show that a landowner has changed the state of affairs on their land which then causes a loss or damage to either other land or someone with an interest in other land. In this particular case, the change was the planting of the forest where lines already existed on a sheep and beef farm.

A similar case would be, for example, where a landowner interfered with a waterway that resulted in flooding downstream. If the landowner hadn’t interfered or changed the path of the waterway and flooding occurred downstream, there could be no liability under nuisance because that was a natural state of affairs, but by interfering with that natural state of affairs, a nuisance is created.

This case serves as a warning that even where you are not at fault, if you do something on your land that alters its natural state and somebody else’s land (or operation) is affected, you could be liable.

[1] Nottingham Forest Trustee Limited (NFT) v Unison Networks Limited (Unison) [2021] NZCA 227

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2021.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

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