Bryce Edwards: The Government’s new fast-track invitation to corruption

Bryce Edwards: The Government’s new fast-track invitation to corruption

The ability of the private sector to quickly establish major new projects making use of the urban and natural environment is to be supercharged by the new National-led Government. Yesterday it introduced to Parliament one of its most significant reforms, the Fast Track Approvals Bill. The Government says this will cut “red and green tape”, allowing businesses to bypass the Resource Management Act in order to speed up economic growth and infrastructure development.

The legislation is extremely contentious, setting up a very politicised resource consent procedure in which the Beehive will unilaterally be able to greenlight business proposals, with little accountability or scrutiny. Critics say that this will lead to the prioritisation of economic growth over social or environmental considerations. The Government is hardly disagreeing with this, stressing that they are simply willing to make the “tough decisions” to turn around the economic and infrastructure deficits.

There are huge political and constitutional concerns. In particular, the new consenting rules will incentivise increased political donations and lobbying to grease the wheels of the new Beehive consenting mechanisms. Critics say that vested interests will, like never before, have every reason to find ways to influence whoever is in the Beehive. This is because the absolute power to give development consents will lie with just three ministers – those responsible for Regional Development, Infrastructure, and Transport, currently Shane Jones, Chris Bishop, and Simeon Brown.

Greenlighting pork-barrelling and corruption

The argument that greater political corruption will result is being voiced strongly by the Labour Party. Environment spokesperson Rachel Brooking says that the bill itself shows that the Government has been captured by lobbyists, and the power of such lobbyists will be worse under the new rules: “This will make New Zealand a banana republic where a Minister can be lobbied to make a decision and can disregard the interests of the public. We should not decide what happens in New Zealand via lobbyists with fat wallets” – see her press release, Lobbyists riding shotgun with Coalition Government

MP Willie Jackson also went on the AM Show today about the issue, casting doubt on whether Government ministers might be bribed: “I mean would you trust Shane Jones, Paul Goldsmith, Chris Bishop? Would you trust these guys to make balanced judgements?… We’re saying they are in the hands of donors” – see Newshub’s Willie Jackson says Government’s new fast-track bill will lead to corruption

Similarly, Green Party co-leader James Shaw said yesterday that the Fast Track would be “putting the future of our natural world at the mercy of party donors and powerful industry lobbyists” – see Ireland Hendry-Tennent’s Cabinet approves bill to fast-track consenting of projects of national significance

This article also quotes WWF New Zealand’s CEO Kayla Kingdon-Bebb saying the new rules would “prioritise lining the pockets of private developers at the expense of the environment”, and rather than looking after social and environmental considerations, the new regime “will instead pave the way for Ministers to approve pet projects without proper scrutiny or environmental checks and balances, and open them up to opportunities for corruption.”

Although we can expect partisan opposition towards such a major blitzkrieg from the incoming government, such analysis seems entirely apt. And it’s not just Government opponents, environmentalists, and leftists that are warning about the potential for corruption. Today, National Party pollster and analyst David Farrar has written about his concerns, saying that a “legitimate concern is the potential for corruption” flowing from the new rules, and he worries that there are no safeguards to prevent bribery being used by the wealthy to get consents from whichever politicians are in charge of the Beehive – see: Is RMA fast track a necessary evil? (paywalled)

He argues that although there is a need for much better resource management rules, “having Ministers as final decision makers is not a great idea in principle. You might trust the current group of Ministers, but would you have wanted Rob Muldoon in charge of consenting major projects, or Helen Clark?”

Farrar says the potential for corruption under the new legislation is so significant that he wants to see much greater regulation of lobbying and transparency of political donations as a result. For example, he proposes that “a condition of consent applications should be applicants have to detail (at risk of criminal penalty) all dealings they have had with Ministers, MPs, staff in the last x years, and if there have been any donations by them or associated parties.”

It might be expected that the Auditor General’s Office will be watching the process carefully and with great concern. The current Auditor-General John Ryan appeared at a select committee this week to talk about the scathing report he released in December, “Making infrastructure investment decisions quickly”, in which he cautioned about the need for politicians not to trade off good decision-making processes for fast results, because this has previously led to very poor outcomes – see Brent Edwards’ 100-day fast-track; promises, promises; a grounding; outrage

Edwards asks whether the Auditor-General may have to return in subsequent years to pass a similar judgment about the new Government’s fast-track resource consents.

Politicisation of the resource consents process

Traditionally, under the Resource Management Act (RMA), consenting decisions were entirely removed from politics, and were the preserve of a substantive process involving courts, experts, and public consultation. The Fast Track allows applicants to bypass this, going straight to the ministers, who will have a procedure for considering whether to greenlight major developments.

The process also involves expert panels, but these will be without much power. The public, too, will have very little ability to influence the process. There will be no right to appeal any of the decisions, except on points of law.

This is covered well by Thomas Coughlan, writing in the Herald, who sums up the process as: “Ministers will now have the ability to effectively consent proposals themselves” and that they will have the power to “override the already rather weak panels” if they make recommendations that ministers don’t agree with – see: Consents: Officials warned Government new fast-track bill will have huge environmental consequences

Coughlan says the politicisation of the consents process takes New Zealand into new territory: “By allowing political sign-off of consents, the Government may have opened the door to political cancellation of those consents. While New Zealand’s consenting process is flawed, the regime kept it out of the hands of politicians. Both sides seem concerned that altering this could see consent by courtroom replaced by consent by election.”

This article also reports that opposition politicians are warning that businesses that take advantage of the Fast Track processes might find new political scrutiny when there is a change of government, and “this could include the loss of a consent without compensation.”

Coughlan has also raised questions about how the process works when governments want to apply to fast-track their own developments, reporting that Chris Bishop has been asked “what happens when a Government wanted to get one of its own projects consented”, with the minister just saying that “he didn’t anticipate the regime would provide conflicts in this instance” – see: Christopher Luxon unveils fast track bill

This article also reports that “Luxon had every confidence conflicts of interest would be managed well by ministers.” And already the Attorney General, Judith Collins, has recused herself from involvement in the whole process, raising eyebrows because she won’t detail why – see Thomas Manch’s Collins hands over attorney-general powers for undisclosed conflict of interest in RMA fast-track (paywalled)

According to this, Collins made a statement to the newspaper to say she had “identified a potential conflict of interest and therefore [Paul] Goldsmith had been appointed acting attorney-general for the purposes of the fast-track legislation. But details of the conflict would not be disclosed”.

Such recusals are entirely necessary and might become more commonly argued over – with ministers being open to accusations of being in the pocket of developers. So why has the Government decided to centralise so much power in the Beehive, opening themselves up to greater allegations about conflicts of interest and favouritism?

Journalist Richard Harman writes today on his Politik website that it was the New Zealand First party that insisted on the centralisation of power in the legislation: “The Bill was introduced as part of New Zealand First’s coalition agreement, and Resources Minister Shane Jones might well be regarded as its godfather with RMA Minister Christopher Bishop playing a key role.

Politik understands that the legislation was drafted for New Zealand First before it returned to Parliament, though it is not known what changes have subsequently been made to that draft” – see: The big Beehive power grab (paywalled)

A Muldoonist concentration of power with the Beehive

Many commentators are drawing parallels between the new Fast Track legislation and the National Development Act 1979, which then Prime Minister Robert Muldoon used to push through the creation of the Clyde Dam.

The parallels with the Muldoon era are explained today by Richard Harman: “Muldoon sought to limit the role of the courts and have the Beehive play a bigger role in issuing resource consents but the coalition government Bill seeks to concentrate all of the power in the Beehive and virtually remove any role for the Courts. Muldoon’s legislation led to a split in the National caucus, with three MPs voting against it, and was a factor leading to an abortive leadership challenge against him in 1980.”

Harman raised this with the new prime minister yesterday at the press conference announcing the Fast Track rules, but Christopher Luxon was apparently “unconcerned about what had happened to Muldoon”, merely pointed out “I was eight… I’ll just say to you that is a complete irrelevance.”

Harman also suggests that Luxon’s new legislation is even more severe than Muldoon’s, as “even Muldoon allowed affected parties to go to the Appeal Court for a review of a consent decision.”

Luxon has also deflected any questions about constitutional integrity, emphasizing that his government is simply trying to get things done, for instance saying: “We want more roads, we want more windfarms, we want more homes, more solar, more geothermal, more mines, more commerce and more opportunity for New Zealanders to get building.” Asked if there was too much concentration of power in the new rules, he replied: “No, we are determined in this country to get things going.”

Similarly, on The AM Show this morning, Paul Goldsmith replied to criticism with lines such as “We’ve got to get this stuff done” and “We’re not here to muck around.”

The Muldoonist nature of all this has been picked up by various political opponents. James Shaw said yesterday: “Muldoon is back frankly. This is a disaster for the environment.” The Green co-leader has also riffed on the title of Geoffrey Palmer’s 1979 book criticising the centralisation of power, “Unbridled Power”, saying the new legislation is “not just unbridled power, it’s unhinged power”.

The Case of the missing schedule

One of the most contentious parts of the new legislation is the Government’s intention to include about 100 existing projects, automatically greenlighting them, just as Muldoon did with the Clyde Dam. However, the Government is refusing to add the list of projects to the legislation until after the select committee process, suggesting that the projects will be added via an amendment to the bill. This goes against constitutional norms to include such vital detail from the start of the legislative process. It means that the public will not be able to scrutinise the inclusions.

As to what type of developments will get automatically fast-tracked by inclusion in the legislation, Ireland Hendry-Tennent has reported: “Ministers have previously hinted at new coal mines on public conservation land, seabed mining projects, and irrigation dams as among those being considered.”

BusinessDesk’s Dileepa Fonseka also reports today on likely fast-tracked projects: “Projects that have been discussed as potentially on the list include an aquaculture project off Rakiura (Stewart Island), proposed sea-bed mining of iron ore off the South Taranaki coast, the open cast coal mine at Te Kuha, and the Santana minerals gold find in Central Otago” – see: From green tape to fast-tracks (paywalled)

Business interests welcome fast-tracking

Not everyone is complaining about the coalition government’s resource management plans. Several lobby groups and businesses have responded very positively to it. As Newsroom’s editor Tim Murphy tweeted yesterday, “This Govt is certainly making some people happy. The mining, marine aquaculture, roading, energy and land developer industries must be wondering whether they’ve died and gone to heaven with the new fast-tracking law. From Labour-Green-environmental hell to heaven in 100 days”.

Press statements expressing that happiness were released yesterday, including from the mining, oil, and gas sectors. The NBR’s Brent Edwards reported that “industry group Infrastructure New Zealand has welcomed the legislation, saying it sets the country up for a more sure-footed future.” And its lobbyist spokesperson Nick Leggett even celebrated that “this legislation steers us away from undue political interference”.

Other groups to praise the new rules included: Transporting New Zealand, mining lobby group Straterra, Energy Resources Aotearoa, and Civil Contractors NZ.

Interestingly, some iwi have expressed positivity about the fast track. Newsroom’s Jonathan Milne reports today that Ngāi Tahu hopes that its proposed massive Hananui salmon farm, to be positioned just off Rakiura/Stewart Island might now get the green light, after failing on environmental grounds previously – see: New fast-tracking regime is both conflicting and conflicted (paywalled)

Milne reports that under the new rules, “the only bar will be the agreement of Infrastructure Minister Chris Bishop and Fisheries Minister Shane Jones. And Jones has already made it very clear, very publicly, that he supports it. It will be a low bar.”

He also reports that the rules will have particularly big ramifications for the fishing industry, but government officials haven’t been able to properly consider and advise on these yet: “the officials reveal in their supplementary analysis report that they haven’t even had a chance to consider the impact of fast-tracking fisheries approvals, as these were a late ministerial addition to the fast-track bill. The bill emphasises that, in fisheries decisions, the ministers can reverse any decisions by the expert panel or the Ministry for Primary Industries chief executive.”

There will also be some big battles over both the legislation and the consent decisions that ministers end up making. Richard Harman writes today that because the new system doesn’t have any capacity for public input, there will be protests: “the extraordinary aggregation of power to the Beehive is likely to attract the level of opposition we saw against the Muldoon Bill in 1979. Each decision made under the Bill will, in turn, provoke local opposition, which will be without an outlet for expression.”

Will such protests matter? Maybe not. Certainly, the Government will be hoping that the public won’t care about complaints about what might be seen as esoteric constitutional niceties. And the Government understands there’s a strong public mood about the economy and infrastructure to “just fix it”. Yet, in a time of growing distrust of politicians and suspicions about vested interests, the Government is going to have to be very careful not to allow themselves to be tainted with allegations of pork-barrelling, favouritism, and corruption. No one really wants the National-led administration to take New Zealand back to the 1970s.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington

This article can be republished for free under a Creative Commons copyright-free license. Attributions should include a link to the Democracy Project (https://democracyproject.nz)