OCEANA GOLD (NEW ZEALAND) LIMITED v OTAGO REGIONAL COUNCIL [2020] NZHC 436

OCEANA GOLD (NEW ZEALAND) LIMITED v OTAGO REGIONAL COUNCIL [2020] NZHC 436 [9March 2020]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2019-412-000026[2020] NZHC 436UNDER the Resource Management Act 1991IN THE MATTER of an appeal under s 299 of the ActBETWEEN OCEANA GOLD (NEW ZEALAND)LIMITEDAppellantAND OTAGO REGIONAL COUNCILRespondentHearing: 19 – 20 November 2019Appearances: S Christensen and P Walker for AppellantA J Logan and T M Sefton for RespondentS R Gepp for The Royal Forest and Bird Protection Society ofNew Zealand Inc.R J Wilson for Queenstown Lakes District Council (attendanceexcused)R Dixon for Attorney-General (attendance excused)Judgment: 9 March 2020JUDGMENT OF OSBORNE JThis judgment was delivered by me on 9 March 2020 at 11.30 am pursuant toRule 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Introduction[1] This appeal is from a decision of the Environment Court ("the Judgment").1That Court had in turn heard appeals in relation to the proposed Otago Regional PolicyStatement ("PORPS").2 The PORPS was put forward by the Otago Regional Council("the Council") pursuant to ss 59–60 Resource Management Act 1991 ("the Act").The context[2] The purpose of a regional policy statement ("RPS") is identified in s 59 of theAct which provides:59 Purpose of regional policy statementsThe purpose of a regional policy statement is to achieve the purposeof the Act by providing an overview of the resource managementissues of the region and policies and methods to achieve integratedmanagement of the natural and physical resources of the whole region.[3] The appellant, Oceana Gold (New Zealand) Ltd ("Oceana"), is the currentoperator of Macraes Mine, a gold mine situated approximately 80 km north ofDunedin.[4] One of the natural and physical resources of Otago is gold. In the decisionunder appeal, the Environment Court summarised the significance (includingeconomic significance) of gold to Otago.3[5] The Environment Court noted that mining potentially has adverse effects onother natural resources, including New Zealand's indigenous flora and fauna and otherliving organisms, which the Court described as "the key background issue for theseproceedings".4[6] The identification of that key background issue had led the Environment Courtto identify at the start of the Judgment a more specific question (and subordinateissues):1 Oceana Gold (New Zealand) Ltd v Otago Regional Council [2019] NZEnvC 41 ("Judgment").2 Decision of the Otago Regional Council dated 1 October 2016.3 Judgment, above n 1, at [5]–[8].4 At [8].[1] The main question in these proceedings is quite specific: it is"whether, if the adverse effects of mining on indigenous biodiversity cannotbe avoided, remedied, mitigated or offset, then should there be a policyenabling the miner to compensate for those effects and if so to what extent"?There are also subordinate issues as to the wording of the offsetting policywhich would apply before compensation is even considered.The appeals to the Environment Court[7] The appeals to the Environment Court by Oceana, the Royal Forest and BirdProtection Society of New Zealand Inc ("Forest and Bird") and by the EnvironmentalDefence Society Inc ("EDS") (the latter two together "the Societies") proceeded underthe Act as de novo appeals. Section 290(1) of the Act provides:290 Powers of court in regard to appeals and inquiries(1) The Environment Court has the same power, duty, and discretion inrespect of a decision appealed against, or to which an inquiry relates,as the person against whose decision the appeal or inquiry is brought.(2) The Environment Court may confirm, amend, or cancel a decision towhich an appeal relates.[8] By s 293 of the Act, the Environment Court may order changes to proposedpolicy statements.[9] By cl 16 of sch 1 to the Act, a local authority must, without using the otherwiseapplicable processes, make an amendment to its proposed policy statement if requiredby a direction of the Environment Court under s 293 of the Act.The Environment Court's confirmations and directionsThe Environment Court's decision[10] Mr Christensen, for Oceana as appellant, summarised the focus of Oceana'sappeal thus:The [Environment Court's] Decision, and this appeal, centre on two policiesthat address the way in which the tension arising from the co-location ofimportant mineral and biodiversity values is most appropriately managed:policy 5.4.6 "offsetting for indigenous biological diversity"; and policy 5.4.6A"biological diversity compensation".[11] The Environment Court recorded its decision at the start of the Judgment inthese terms:A: Under clause 16 of Schedule 1 and under section 290 of the ResourceManagement Act 1991 the Environment Court:(1) confirms policy 5.4.6 of the proposed Otago Regional PolicyStatement as follows:"Policy 5.4.6 Offsetting for indigenous biological diversityConsider the offsetting of indigenous biological diversityoffsetting, when:(a) Adverse residual effects of activities cannot beavoided, remedied or mitigated;(b) The offset achieves no net loss and preferably a netgain in indigenous biological diversity;(c) The offset ensures there is no loss of individuals ofrare or vulnerable species as defined in reportspublished prior to 14 January 2019 under the NewZealand Threat Classification System ('NZTCS');(d) The offset is undertaken where it will result in the bestecological outcome, preferably:(i) Close to the location of development; or(ii) Within the same ecological district or coastalmarine biogeographic region.(e) The offset is applied so that the ecological valuesbeing achieved are the same or similar to those beinglost;(f) The positive ecological outcomes of the offset last atleast as long as the impact of the activity, preferablyin perpetuity;(g) The offset will achieve biological diversity outcomesbeyond results that would have occurred if the offsetwas not proposed;(h) The delay between the loss of biological diversitythrough the proposal and the gain or maturation of theoffset's biological diversity outcomes is minimised."(2) directs that the Otago Regional Council amends its proposedOtago Regional Policy Statement by adding the followingpolicy 5.4.6A (Limits to compensation):"5.4.6A Biological Diversity CompensationConsider the use of biological diversity compensation:(a) When:(i) Adverse effects of activities cannot beavoided, remedied, mitigated or offset; and(ii) The residual adverse effects will not result in:(1) The loss of an indigenous taxon(excluding freshwater fauna andflora) or of any ecosystem type froman ecological district or coastalmarine biogeographic region;(2) Removal or loss of viability ofhabitat of a threatened or at riskindigenous species of fauna or floraunder the New Zealand ThreatClassification System (NZCTS);(3) Removal or loss of viability of anoriginally rare or uncommonecosystem type that is associatedwith indigenous vegetation or habitatof indigenous fauna;(4) Worsening of the NZTCSconservation status of any threatenedor at risk indigenous freshwaterfauna.(b) By applying the following criteria:(i) the compensation is proportionate to theadverse effect;(ii) the compensation is undertaken where it willresult in the best practicable ecologicaloutcome, preferably:(1) close to the location of development;(2) within the same ecological district orcoastal marine biogeographic region;(iii) the compensation will achieve positivebiological diversity outcomes that would nothave occurred without that compensation;(iv) the positive ecological outcomes of thecompensation last for at least as long as theadverse effects of the activity; and(v) the delay between the loss of biologicaldiversity through the proposal and the gain ormaturation of the compensation's biologicaldiversity outcomes is minimised."(3) directs that the Otago Regional Council amends its proposedOtago Regional Policy Statement policy 5.4.8(d) by addingthe underlined words as follows:(d) ... avoiding, remedying, or mitigating adverse effectson other values including highly valued naturalfeatures, landscapes and seascapes in order tomaintain their high values ...B: Leave is reserved for any party to raise any inconsistency or error inOrder A provided they do so by 29 March 2019.C: Costs are reserved. Any application should be made by 12 April 2019(unless an application is made under B).Appeals to High CourtAppeals on questions of law only[12] Oceana, as a party to the proceeding before the Environment Court, wasentitled to appeal on a question of law to this Court.5 Insofar as an Environment Courtdecision is on the merits (not involving a question of law), the decision is final.6[13] In Countdown Properties (Northlands) Ltd v Dunedin City Council, this Courtidentified the principles on which its appellate powers are exercised under the Act,recording:7 we note that this Court will interfere with decisions of the Tribunal only ifit considers that the Tribunal –(a) Applied a wrong legal test; or(b) Came to a conclusion without evidence or one to which on evidence,it could not reasonably have come; or(c) Took into account matters which it should not have taken into account;or(d) Failed to take into account matters which it should have taken intoaccount.5 Resource Management Act 1991, s 299(1).6 Resource Management Act 1991, s 295.7 Countdown Properties (Northlands) Ltd v Dunedin City Council [1994] NZRMA 145 (HC) at 153.See also Transpower New Zealand Ltd v Auckland Council [2017] NZHC 281 at [52].[14] It has also been recognised by this Court that, as the Environment Court actswithin its jurisdiction so long as it observes the principles of natural justice, the HighCourt may set aside a decision as a matter of law if the Environment Court has notrelevantly applied principles of natural justice.8[15] The High Court recognises and respects the specialist nature of theEnvironment Court. Thus, in Countdown Properties (Northlands) Ltd v Dunedin CityCouncil, this Court observed:9 the Tribunal should be given some latitude in reaching findings of factwithin its areas of expertise [16] In Guardians of Paku Bay Association Inc v Waikato Regional Council, WylieJ expanded upon the respective roles of the Environment Court and the High Court inrelation to their decision-making:10[31] Relief ought not to be granted unless an identified error of law hasmaterially affected the Environment Court's decision. The Environment Courtis the sole decision maker responsible for the balancing process required underthe Act, and that process is an integral part of the consideration of resourcemanagement consents under s 104. The weight to be given to the assessmentof relevant considerations is for the Environment Court and is not forreconsideration by this Court as a point of law.[32] It was also common ground that the Court must be vigilant in resistingattempts by litigants disappointed by Environment Court decisions to useappeals to the High Court in an endeavour to re-litigate factual findings madeby the Environment Court. This Court can only intervene in such situationswhere the Environment Court has come to a decision to which, on theevidence, it could not reasonably have come. This can be described as asituation in which there is no evidence to support the determination, or as onein which the evidence is inconsistent with and contradictory to thedetermination, or as one in which the true and only reasonable conclusioncontradicts the determination. It is trite law however that the sufficiency ofevidence, rather than the want of it, cannot amount to a point of law.8 Meridian Energy Ltd v Central Otago District Court [2011] 1 NZLR 482 (HC) at [132]–[133],[148] and [166]. See also Saddle Views Estate Ltd v Dunedin City Council [2017] NZHC 1727[2017] NZRMA 505, at [43].9 Countdown Properties (Northlands) Ltd v Dunedin City Council, above n 7, at 153.10 Guardians of Paku Bay Association Inc v Waikato Regional Council [2012] NZRMA 61 (HC)(footnotes omitted).[17] Consistently with that approach, this Court had previously in Contact EnergyLtd v Waikato Regional Council identified limits to what the (former) PlanningTribunal might be expected to record in relation to factual and legal issues.11 There,Woodhouse J observed:Recording factual findings and other decision making processes[64] Appeals purportedly on points of law not infrequently turn into acontention that the Tribunal did not refer in its decision to a matter of fact orof law in issue in the hearing. That, of itself, is not an error of law. Thisincludes, for example, an absence of reference in the decision to evidencewhich may be in direct conflict with a conclusion expressly recorded, orevidence given at the hearing which might arguably indicate a conclusiondifferent from that recorded by the Tribunal.[65] There is no obligation to record every finding on every piece ofevidence. There is no obligation to make a finding of fact on every fact inissue, and generally speaking there is no obligation to make a finding of factat all: see Rodney District Council v Gould and Anor (2006) NZRMA 217;Auckland City Council v Wotherspoon [1990] 1 NZLR 76 at 82-89. There isalso no obligation on a Tribunal to record every part of its reasoning processon the facts or on the law, and notwithstanding the fact that the conclusionsreached may involve unarticulated rejections of contentions of witnesses orsubmissions for parties on the law.[18] These observations, in relation to the former Planning Tribunal, apply equallyto the Environment Court.[19] Finally, on appeals from the Environment Court to this Court, the appellantbears the onus of establishing an error of law.12Appeal ground 1 – wording of policy 5.4.6(c)[20] Oceana appeals against that part of the Environment Court's decision whichdealt with the wording of policy 5.4.6(c) (set out in full at [11] above). The focus hereis on the Court's requirement that the New Zealand Threat Classification System("NZTCS") be used as the definition source for "rare or vulnerable species".[21] By policy 5.4.6(c) a decision-maker would be required to consider theoffsetting of indigenous biological diversity offsetting when the offset ensures that11 Contact Energy Ltd v Waikato Regional Council (2007) 14 ELRNZ 128 (HC).12 Smith v Takapuna City Council (1988) 13 NZTPA 156 (HC).there is no loss of individuals of rare or vulnerable species as defined in reportspublished prior to 14 January 2019 under the NZTCS.[22] The difficulty identified by counsel for Oceana, and accepted by Mr Logan forthe Council, is that the NZTCS does not contain a definition of "rare or vulnerablespecies". The categorisations adopted in the NZTCS may be seen in the diagram fromthe NZTCS as set out in figure 1 in the Judgment.13[23] Counsel accept that the Court made an error of law in the amendment to policy5.4.6(c) wherein the definition of the categories of "rare or vulnerable species" werelinked to the NZTCS. I agree. The requirement under policy 5.4.6(c) to have referenceto a definition in the NZTCS is not reasonably workable. It is an error of wordingwhich requires amendment to render it workable.[24] The appeal will be allowed in that regard and appropriate directions made.Appeal ground 2 – failing to consider the relationship between offsetting in thePORPS and s 104(1)(ab) of the Act[25] A further ground of appeal of Oceana may be dealt with briefly as Oceanasought leave to withdraw this ground, which I granted.[26] Oceana had asserted that the Environment Court erred by failing to have regardto a relevant consideration because it had not addressed the relationship between:(a) policies in the PORPS that limit the ability to consider offsetting; and(b) the application of s 104(1)(ab) of the Act.[27] In advancing this ground of appeal, Oceana's counsel had overlooked thetransitional provisions of the Resource Legislation Amendment Act 2017 ("theAmendment Act"). The Amendment Act (which post-dated the notification of thePORPS) had introduced a new s 104(1)(ab) to the parent Act. But the relevanttransitional provision stated that where a policy statement or plan had been notified,13 Judgment, above n 1, at [19].but had not reached the stage at which no further appeal was possible before thecommencement of an amendment:14The proposed policy statement, plan, change, or variation must be determinedas if the amendments by the amendment Act had not been enacted.[28] Ms Gepp for Forest and Bird correctly identified these applicable statutoryprovisions in her written submissions. Mr Christensen at the hearing of the appealappropriately conceded that it was not possible to establish an error of law in thisregard and sought leave to withdraw this ground of appeal, which I granted.Appeal ground 3 – breach of natural justiceThe issue[29] This appeal ground concerns two articles or discussion papers. First, theBusiness and Biodiversity Offsets Programme ("BBOP") on 20 March 2012 publishedits Resource Paper: Limits to What Can Be Offset ("the BBOP paper").15[30] Secondly, there was a paper presented for the Resource Management LegalAssociation conference in September 2008, prepared by Mark Christensen, entitled"Biodiversity Offsets – A Suggested Way Forward" ("the RMLA article").16[31] I will refer to these two publications collectively as "the papers".[32] As their titles indicate, the papers were concerned with the concept of offsettingin a resource management context. Within the PORPS, it is policy 5.4.6 whichaddresses "offsetting for indigenous biological diversity".[33] The Environment Court dealt with offsetting under the PORPS in section 4(paras [79]–[95]) of the Judgment.14 Resource Management Act 1991, Sch 12, cl 13(2), as inserted by Resource LegislationAmendment Act 2017, s 122.15 Resource Paper: Limits to What Can Be Offset (Business and Biodiversity Offsets Programme,March 2012.16 Mark Christensen "Biodiversity Offsets – A Suggested Way Forward" (2010) RMJ 8.[34] By its notice of appeal to the Environment Court, Oceana asserted that, whilepolicy 5.4.6 of the PORPS provided for consideration of biological diversity offsettingin limited circumstances, the policy was weak and inefficient, and the six listedqualifying criteria were not likely to all be met. Oceana further asserted that by reasonof the wording of policy 5.4.8 (proposed mining effects), policy 5.4.6 was not goingto apply in the circumstances where offsetting is likely to be most relevant in themining context (namely where there are unavoidable adverse effects on significantindigenous vegetation and significant habitats of indigenous fauna). Oceana soughtas relief on this aspect of the PORPS the deletion of policy 5.4.6.[35] At the hearing of the appeal before the Environment Court, Oceana's briefopening submissions in relation to the offsetting policy outlined a modified approachfocused on policy 5.4.6(c) specifically. Mr Christensen, for Oceana, said in opening:Are 'like for like, no net loss' actions that involve addressing the lossof a rare or vulnerable species able to be called an offset in accordancewith Policy 5.4.6, or does Policy 5.4.6(c) operate as a bar? I submitthe policy needs to be clear about this one way or the other and needsto be clear as to whether partial offsets are included as offsets (i.e.where residual effects on other taxa or ecosystems are being offset andresidual adverse effects on other taxa or ecosystems are not beingoffset). I submit that intuitively, if we were going to want toencourage well-designed and implemented offsets anywhere, it issurely in relation to rare and vulnerable species.[36] At the hearing, the Council submitted that policy 5.4.6(c) operated as a limiton the availability of offsetting for losses of indigenous biodiversity. The Societiessupported policy 5.4.6(c).17Discussion of offsetting under the PORPS in the Judgment[37] The Environment Court began its discussion of "offsetting under the PORPS"(in section 4 of the Judgment, paras [79]–[95]) with a discussion of the concepts ofboth "offset" and "compensation" under the Act.[38] The Court turned in its section 4.2 (paras [87]–[95]) of the Judgment to adiscussion under the heading "The Effectiveness of Policy 5.4.6 (offsets)", in evident17 See further below at [67].response to Oceana's appeal ground by which it asserted that the policy was "weakand inefficient".[39] I now set out the Environment Court's discussion on the effectiveness of policy5.4.6 leading to its conclusions (at [93]–[95]) as to the confirmation of policy 5.4.6(with amendments):4. Offsetting under the PORPS4.1 The concepts of "offsets" and "compensation" under the RMA.[79] We held earlier that the RLAA does not apply to these proceedings.That is of some importance because its amendments to the RMA expresslyintroduced a (further) concept of "compensation" and expanded that of"offsets" in the context of adverse effects on the environment. For example,section 104(1)(ab) now states:104 Consideration of applications(1) When considering an application for a resource consent and anysubmissions received, the consent authority must, subject to Part 2,have regard to –(a) any actual and potential effects on the environment ofallowing the activity; and(ab) any measure proposed or agreed to by the applicant for thepurpose of ensuring positive effects on the environment tooffset or compensate for any adverse effects on theenvironment that will or may result from allowing theactivity; and[80] Prior to the RLAA the role of offsets and environmental compensationunder the RMA was unclear. A number of decisions of the Environment Courthave regarded offsetting as part of mitigation. A Board of Inquiry adopted thatapproach in its report on Transmission Gully, and that was subsequentlyapplied in Mainpower New Zealand Limited v Hurunui District Council andin West Coast Environmental Network Incorporated v West Coast RegionalCouncil.[81] The concept of "compensation" under the RMA was explained in J FInvestments Limited v Queenstown Lakes District Council where theEnvironment Court wrote:Since the term 'environmental compensation' is not used in the Act we shouldfirst define what we mean by it. The concept arises in this way: an applicantfor a resource consent may choose or be required to avoid or mitigate or,occasionally, to remedy the adverse effects of a proposal. Or the applicantmay volunteer to remedy or mitigate adverse effects of other activities. Theoffer may be fungible, that is of the same kind as the values or resourcesbeing lost, or different; it may be to remedy or mitigate adverse effects on-site or off-site. We define as 'environmental compensation' any action (work,services or restrictive covenants) to avoid, remedy or mitigate adverse effectsof activities on the relevant area, landscape or environment as compensationfor the unavoided and unmitigated adverse effects of the activity for whichconsent is being sought. We also note that land may be offered by theapplicant to ensure that the work is carried out, services performed orrestrictions complied with. The corollary of the definition is that normalconditions to avoid, remedy or mitigate the adverse effects of the activity forwhich consent is sought do not supply environmental compensation.[82] Unfortunately the Environment Court then muddied the distinctionbetween compensation and offsetting when it referred to the profferedcompensation as an offset:[27] We conclude that, since activities which meet other agendas ofnational importance are allowable under the RMA even though they createpermanent adverse effects on nationally important natural resources, it isinconsistent to suggest that environmental compensation is outside the scopeof the Act. If adverse effects on the environment can be justified as providinga net benefit because they are in the national interest, then adverse effectsoffset by a net conservation benefit allowed by enhancement or theremedying of other adverse effects on the relevant environment, landscapeor area must logically be justifiable also. They are certainly relevant underboth s 5(2)(c) and s 7 of the RMA.[underlining added][83] In Royal Forest and Bird Protection Society of New ZealandIncorporated v Buller District Council ("Buller") the High Court seized onthat paragraph and stated that the concepts of "compensation" and "offset"had been used interchangeably. Further, Fogarty J had previously stated "... Ido not find it possible to use the word "compensation". His reasons were:The RMA has numerous provisions which use the word compensation. Butno provisions which provide for compensation if adverse effects are notcompletely avoided, remedied or mitigated. The compensation provisions aredirected, as one would expect for constitutional reasons, to addressing theextent of compensation payable if property rights are taken. To compensatecan be limited to counterbalancing, but it frequently is used in a way whichcarries the value that there ought to be the making of amends. That value hasbeen addressed in the RMA but given limited functionality in the provisionsthat have just been footnoted. It is not deployed in Part 2 or in s 104.That passage is obiter because the High Court continued: "However, I amsatisfied that it is sufficient in this case to resolve whether or not offsets canbe regarded as a form of mitigation, sometimes called "offset mitigation"."[84] A different approach was taken in Day v Manawatu-WanganuiRegional Council ("Day") which expressly disagreed with the Board ofInquiry in the Transmission Gully report, stating:[3-63] With respect to the Board of Inquiry, we do not consider that offsettingis a response that should be subsumed under the terms remediation ormitigation in the [Proposed One Plan] in such a way. We agree with theMinister that in developing a planning framework, there is the opportunity toclarify that offsetting is a possible response following minimisation - ormitigation - at the point of impact.[85] We consider that the Day approach to offsets comes closest to theprinciples of Part 2 of the RMA (and - as we shall show - internationalpractice) in relation to offsets; although the J F Investments understanding of(environmental) compensation may remain useful. Further, the latter isconsistent with the economic themes of the RMA especially the ideaintroduced by section 7(b) RMA that particular regard should be had to theefficient use of resources, i.e. there should be a net (social) benefit in anyexercise of a resource consent. The idea of compensation is to ensure that inappropriate cases the net social benefit is also a net conservation benefit:Baker Boys Limited v Canterbury City Council. Consequently we respectfullydecline to follow the obiter remarks of the High Court in Buller.[86] As we have stated, the PORPS elaborates on the offsetting idea inpolicy 5.4.6 and the related definition. It provides that "offsetting must achieveno net loss (of species abundance, habitat structure and ecosystem function)".Conversely "biodiversity compensation" is not required to maintain thespecific species or ecosystems being impacted. Therefore it may not "maintainbiodiversity" if impacts on the species affected or ecosystems are severe. MsGepp for the Societies submitted that:Impacts that would not maintain biodiversity despite the best conceivablecompensation proposal are those that cause the extinction of a species or lossof an ecosystem type (locally or nationally), or which so degrade a rarespecies' habitat that it increases extinction risk, or which result in loss ormodification of a naturally uncommon ecosystem type.Clearly the circumstances in which biodiversity compensation should bepermissible (or not permissible) need to be identified. That is what the [OtagoRegional Council's] proposed policy 5.4.X attempts. First, however we needto consider the controversial part(s) of the offsetting policy 5.4.6.4.2 The effectiveness of policy 5.4.6 (offsets)[87] The full text of policy 5.4.6 is set out above. Oceana's appeal soughtthe deletion of policy 5.4.6(c) which requires that offsetting can be consideredwhen "the offset ensures there is no loss of rare or vulnerable species". Thatis a clear reference to the NZTCS. However there is some ambiguity in this.Does the loss refer to:• loss of individual animals or plants?• loss of rare or vulnerable species from an ecological district?• loss of the rare or vulnerable species from New Zealand?[88] In conferencing the ecologists considered policy 5.4.6 referred toindividual specimens of a species. In supplementary evidence-in-chief or incross-examination the ecologists and planners were less certain. Several saidthat it meant loss of "species", but that the scale was not clear. No witnesssuggested that the scale (threshold) should be national extinction only:• Mr McRae said it is aimed at loss of species from anecological district, not at a loss of individuals;• Dr Lloyd agreed it meant species not specimens, but notedthat the scale is not clear;• Dr Ryder said:Well, I believe it means the loss of a species in total, either from aparticular geographic location or an ecological district or a regionor the country, in fact, pretty much along the lines of what DrLloyd's view of it was. There is no scale specified as to where thatloss is confined to.• Ms Myers said:... you are trying to make sure that there isn't a loss or extinction ofa species from a particular area or an ecological district.[89] Mr Christensen submitted for Oceana that if policy 5.4.6(c) refers toloss of rare or vulnerable species from an ecological district (within the region)then:... it is unclear in our submission what purpose policy 5.4.6(c) serves. Policy5.4.6(b) requires no net loss and preferably a net gain in biodiversity. Policy5.4.6(e) requires the offset to be like-for-like or similar. If policy 5.4.6(c) isintended to require that after the offset has been applied there should be nonet loss of rare or vulnerable species then it should either say that (by adding"net"), or perhaps more correctly it should be deleted since it adds nothing topolicies 5.4.6(b) and (e).[90] The Societies say that policy 5.4.6(c) is not a redundant criterionbecause it does not merely replicate the "no net loss" criterion . The policy isconcerned with limits to what can be offset. Counsel observed that theprinciple behind policy 5.4.6(c) derives from the International Business andBiodiversity Offsetting Programme (BBOP) principle of "limits to offsetting".The BPOP [sic] is ultimately concerned with risk: that some elements ofbiodiversity are so irreplaceable or vulnerable that the risk of their not beingsuccessfully offset (no net loss, like-for-like outcome) are too high. The BBOPhas produced specific guidance on the "limits to offsetting" concept in itsResource Paper: Limits to What Can be Offset ("Resource Paper").[91] The Resource Paper provides that:In general, the risk is high that impacts will not be successfully offset where:• affected biodiversity is specialised and restricted in its distribution;uniquely adapted to one or a few locations; slow to regenerate andrelatively immobile; or already highly vulnerable; and/or where;• no tried-and-tested conservation techniques are available to achievethe offset outcomes required; or no sites or legal mechanisms areavailable to secure the use of land for the offset.These factors indicate that on-site conservation through avoidance, ratherthan an offset elsewhere, may be necessary to enable the persistence ofaffected biodiversity (see Principle 1, BBOP, 2011a).It also states that "there are currently no globally accepted numericalthresholds that explicitly define when impacts are to be regarded as non-offsettable". This principle is expressed in the policy 5.4.6 as "the offsetensures there is no loss of rare or vulnerable species". In other words, thethreshold for non-offsettable impact has been set at "no loss of rare orvulnerable species".[92] In the New Zealand context, a useful and illuminating paper by MChristensen Biodiversity offsets - a suggested way forward states:Perhaps the strongest concern about biodiversity offsets is that they couldmake it easier for developments to proceed that have a very significantimpact on biodiversity that in many cases would be judged unacceptable, onthe back of claims that the damage to biodiversity will be offset. There is alsoa concern that biodiversity offsets could be used as a form of 'greenwashing'.In relation to the "limits to offsetting" principle he continues:Biodiversity offsets are inappropriate for certain ecosystem (or habitat) typesbecause their rarity or the presence of particular species within them makesthe clearance of these ecosystems inappropriate under any circumstances.Notwithstanding the hierarchy in principle one, it seems clear that there aresome ecosystems or habitat types for which offsets are never going to bepossible. These may be ecosystems that have already been diminished to suchan extent that any further loss is unacceptable, or habitats of species whoseloss would most likely lead to the extinction of the species as well.[93] With that background understanding, we accept the Societies'submissions that the documents which policy 5.4.6 is derived from show that"limits to offsetting" are:... not merely concerned with whether a no net loss, like-for-like offset istechnically achievable, but rather about unacceptable impacts that should notbe provided for even where an offset is considered technically achievable(based on the evidence available at the time that the impact and offset arebeing designed or assessed).[94] That acceptance is qualified by our judgment that the reference to"rare or vulnerable" species in the offset policy should include individualplants or animals of rare or vulnerable species as identified in the reports underthe NZTCS if those reports had been published by the date of notification ofthe PORPS. There probably needs to be a biennial or triennial review by theORC of the latest reports under the NZTCS and a variation to the PORPSupdating the date in the policy.[95] The reason we hold that individual plants or animals should not belost is that while the 'no net loss' policy 5.4.6(b) is generally adequate forindigenous biological diversity (noting that it allows for loss of individualplants or animals on one site provided others are established elsewhere in theregion) it is too risky to extend that method of management to threatenedspecies. Accordingly we consider that proposed policy 5.4.6(c) is likely to beeffective in achieving objectives 3.1 and 3.2 of the PORPS provided itsreference to the NZTCS is made express. Similarly we consider 5.4.6(a)should be amended in a minor way by the addition of the word 'residual' toemphasise the place of offsetting in the mitigation hierarchy.(footnotes omitted)[40] As set out in section 4.2 of the Judgment (reproduced in full in the precedingparagraph), the Environment Court first focused on an ambiguity in the wording ofpolicy 5.4.6, identifying differences between the witnesses as to the scale (threshold)of loss which was covered by the wording of the policy as drafted.18[41] The Court next turned to a consideration of the effectiveness of the policy,referring to the submissions for Oceana in relation to the intended purpose of thepolicy and the submissions for the Societies (including Forest and Bird) as to policy5.4.6(c) having an effective purpose.19[42] This led the Court to record the Societies' submission that the principle behindpolicy 5.4.6(c) derived from the BBOP's principle of "limits to offsetting", which theCourt noted had been referenced in the evidence-in-chief of Dr Lloyd (the terrestrialecologist called by the Council).20 Dr Lloyd, referring to BBOP principles, had statedthat limits to what can be offset are expressed in policy 5.4.6 where there is a criterionto ensure that there is no loss of rare or vulnerable species.21 The Court identified theparticular concern of the BBOP as being that some elements of biodiversity are soirreplaceable or vulnerable that the risk of their not being successfully offset (no netloss, like-for-like outcome) are too high. At that point, the Court referred to the BBOPpaper and quoted from its discussion as to situations in which there is a high risk thatimpacts will not be successfully offset.22 The Court concluded that the threshold non-offsettable impact had been set in policy 5.4.6 at "no loss of rare or vulnerablespecies". The Court then referred to the RMLA paper, quoting passages from it. The18 Judgment, above n 1, at [87] – [88].19 At [89] – [90].20 At n 142. Dr Lloyd had stated in his evidence-in-chief:The requirements for offsetting in Policy 5.4.6 are generally consistent with internationalbiodiversity offsetting principles developed under the Business and Biodiversity OffsetsProgramme (BBOP) that are also typically used in New Zealand (for example in the recentconsent applications for the proposed Escarpment Mine (Buller District) and Lee Dam(Tasman District). The ten BBOP principles, which remain current, are as follows:4. Limits to what can be offset: There are situations where residual impacts cannot be fullycompensated for by a biodiversity offset because of the irreplaceability or vulnerability of thebiodiversity affected.21 Dr Ryder, the Council's aquatic ecology witness, also gave evidence that policy 5.4.6 wasgenerally consistent with BBOP principles. Ms Myers, the Societies' ecology witness, referred toa 2012 BBOP publication ("Standard on Biodiversity Offsets") in stating that such offsets aredefined by internationally agreed principles.22 Judgment, above n 1, at [90]–[91].passages cited refer to situations in which the author considers biodiversity offsets tobe inappropriate or "never possible".[43] The Court then identified those discussions as "background understanding"against which the Court accepted the Societies' submissions as to the concern lyingbehind the documents from which policy 5.4.6 is derived.23 Thus the Court acceptedthat "limits to offsetting" are not merely concerned with whether a no net loss, like-for-like offset is technically achievable but also deal with unacceptable impacts thatshould not be provided for (that is permitted) even where an offset is consideredtechnically achievable.24[44] The Court then addressed the question of scale or threshold.25 It contrastedtwo situations. For indigenous biological diversity (under policy 5.4.6(b)) it found the"no net loss" policy generally adequate (allowing for loss of individual plants oranimals on one site provided others are established elsewhere in the region). But forthe management of threatened species, it found the "no net loss" policy too risky.26Individual plants or animals were therefore not to be permitted to be lost under policy5.4.6(c).Oceana's submissions[45] For Oceana, Mr Christensen noted that, in the express terms of the Judgment(at [93]), the quoted discussions in the BBOP paper (at [91]) and the RMLA paper (at[92]) formed the "background understanding" upon which the Court accepted theSocieties' submissions as to the "limits to offsetting".[46] Mr Christensen submitted that the Court's setting out of "that backgroundunderstanding" indicates that the papers were both influential and material to the Courtin reaching its decision on the offsetting policy.23 At [93].24 At [93].25 At [94].26 At [95].[47] Mr Christensen submitted that such reliance in turn led the Court to reach itsdecision in breach of the principles of natural justice:By accepting and being influenced by these documents without affording theAppellant any opportunity to respond to them or the way they werecharacterised in the Societies' closing submissions [48] An example of the difficulty for Oceana, in Mr Christensen's submission, wasthat Oceana did not have an opportunity to address whether the extracts referred to bythe Court were taken in their correct context or to submit on the extent to which thevarious formulations of the policies in question did or did not sit alongside the viewsexpressed by the papers' authors.[49] The framing of Oceana's appeal to the Environment Court in relation to policy5.4.6(c) and the terms in which counsel for Oceana opened his appeal submissionsraised directly for the Court's consideration the appropriateness of having an offsettingpolicy at all and led also to the need for the Court to consider the meaning of policy5.4.6 as notified by the Council. It is clear from the Court's discussion (for instanceat [89]) that it understood (correctly) that Oceana's submissions in relation to policy5.4.6 were addressed to both the wording and interpretation of policy 5.4.6 and to itsefficacy (or otherwise) in serving a particular purpose.[50] Mr Christensen noted that the papers were put forward by the Societies inconjunction with their closing submissions dated 23 March 2018 (filed after the 20February 2018 hearing). Those submissions, in accordance with the EnvironmentCourt's timetable, had been filed after Oceana's submissions.[51] In his submissions, Mr Christensen characterised the Societies' reliance on thepapers in the following terms:It is submitted that the Societies put forward the BBOP Paper as evidence tosupport the submission that policy 5.4.6(c) was not a redundant criterion, andput forward the RMLA article as evidence to support the submission that limitsto offsetting are about unacceptable impacts to be avoided even where anoffset is technically achievable.(footnotes omitted)[52] Mr Christensen observed that the papers were not part of the evidence ofexperts and were not introduced into evidence as exhibits (with the ability for cross-examination) during the course of the hearing.[53] Mr Christensen concluded that Oceana had not had the opportunity to addressor comment on the papers.The Council's submissions[54] For the Council, Mr Logan tracked through the course of the appeal hearing inthe Environment Court. He referred to the alteration in Oceana's position concerningpolicy 5.4.6(c).27 He referred to the position of the Council and of the Societies as tothe need for limits on the availability of offsetting and to the evidence of numerouswitnesses in that regard, including in relation to principles identified by the BBOP.[55] Mr Logan observed, in contra-distinction, that Dr Thorsen (Oceana's ecologywitness) had been silent on policy 5.4.6(c). Mr Logan noted that Oceana's planningwitness, Ms Dawson, agreed with the description of the policy as "setting criteria foroffsetting". He further noted that Ms Dawson had observed that there is governmentguidance available on offsetting, which "draws from the Business and BiodiversityOffsets Programme (BBOP)".[56] Mr Logan then turned to the closing submissions which had been made in theEnvironment Court.[57] Oceana identified three options in relation to policy 5.4.6(c):(a) amending the policy to read "no net loss of rare or vulnerable species";(b) deleting policy 5.4.6(c) on the basis it added nothing to policies 5.4.6(b)and (e) and because (c) (to the extent it operated as a limit to offsetting)was wrong in principle as the RPS should encourage the use of offsetsfor residual adverse effects on rare and vulnerable species; and27 See the opening submissions for Oceana as quoted above at [35].(c) if there were to be a limit on offsetting, then it needed to providesufficient flexibility to accommodate the kinds of offset-like outcomesand other forms of compensation that ecologists recommend tomaintain biodiversity.[58] In their closing submissions, the Societies maintained the position that policy5.4.6(c) was required as "the threshold for non-offsettable impact". The Societiesattached and discussed the BBOP and RMLA papers in that context.[59] The Council, in its closing submissions, made submissions both as to the lackof ambiguity in policy 5.4.6(c) and that the paragraph (c) was a criterion distinct fromothers in the policy, in that it stipulated when offsetting will not be available. (In otherwords, paragraph (c) functioned as "a limit").[60] Mr Logan noted that the BBOP and RMLA papers are written at a very highlevel of generality. To the extent that the Societies relied upon them, they relate to theissue which was live in the Environment Court appeal, namely whether limits shouldbe imposed on the availability of offsetting.[61] Mr Logan submitted that the approaches identified in the BBOP and the RMLApapers, as cited by the Environment Court in the Judgment, were consistent with theevidence and submissions of both the Council and the Societies. He submitted thatthe discussion in neither paper added substantially to the material already before thatCourt. The papers could not be said to have driven the Court inexorably to anunanticipated conclusion to retain policy 5.4.6(c).[62] In conclusion Mr Logan submitted that the parties had not been wrong-footedby the introduction of the papers, the hearing had not miscarried and there had beenno material error of law in the Court's consideration of the papers.Forest and Bird's submissions[63] For Forest and Bird, Ms Gepp submitted that it was clear from the start of thehearing that Oceana (through its counsel) recognised that one outcome of the appealwas that policy 5.4.6(c) might stand so as to bar a proposal involving adverse effectson rare or vulnerable species and actions designed to offset those adverse effects.[64] As had Mr Logan, Ms Gepp addressed the extent to which the Council's andSocieties' expert witnesses had addressed the question of limits to what may be offset,including by reference to the BBOP principles.[65] Ms Gepp then turned to the parties' closing submissions. She referredparticularly to a passage in Oceana's closing submissions relating to the principleunderlying limits to offsetting, in which Mr Christensen had submitted:We speculate the problem may have its genesis in a misunderstanding of theprinciple that there are limits to what can be offset [a footnote says: Dr LloydEIC, para 44(4) on page 11 sets out the relevant BBOP principle]. Thatprinciple recognises that there will be situations where the nature of thebiodiversity being affected means that a 'no net loss' outcome cannottechnically be achieved. It is not an invitation to set policy that precludes nonet loss outcomes in circumstances where such outcomes can be achieved.[66] Ms Gepp submitted that this aspect of Oceana's submissions was not supportedby evidence given in the Environment Court and amounted to evidence from the baras to what the "limits to offsetting" principle and policy 5.4.6(c) meant.[67] Ms Gepp contrasted Oceana's stated view of the underlying principle with thatadopted by the Societies. The Societies' position was that the principle meant thatoffsetting should not be used to enable a project to proceed where adverse effectsshould really be avoided or, as stated in the Southland RPS, that offsetting should notbe applied to justify impacts on vulnerable or irreplaceable biodiversity. Thatapproach in turn stemmed from a rationale that offsetting carries inherent risks (that apredicted "no net loss" outcome will not be achieved) and that some species andecosystems are too irreplaceable for that risk to be countenanced. The Societiestherefore took the position that the "limits to offsetting" principle was separate from,and complementary to, the "no net loss principle".[68] Those matters were traversed in the Societies' submissions in response toOceana's. Ms Gepp explained that, as the BBOP principles had been referred to andsupported by all parties in the course of the Environment Court appeal, the Societiescited the relevant BBOP technical paper and also the RMLA paper. She observed thatthe material in the papers could be viewed as complementing an article, published byPolicy Quarterly, entitled "Biodiversity offsets in New Zealand: addressing the risksand maximising the benefits".28 That had been provided to the Court by counsel forthe Crown in the course of the appeal hearing.[69] Ms Gepp then identified the Environment Court's discussion of "offsettingunder the PORPS" in section 4 of the Judgment (set out at [39] above). Ms Geppidentified the Court's specific discussion of "the effectiveness of policy 5.4.6" in paras[87]–[95] of the Judgment. She then identified the three stages of the Court's analysis:(a) The Court identified that Oceana (by its notice of appeal) sought thedeletion of policy of 5.4.6(c).29(b) The Court identified an ambiguity in policy 5.4.6(c) as to whether"loss" referred to loss of individual specimens or species, and (if thelatter) at what scale. The Court contrasted the submissions for Oceanaand for the Societies, including the Societies' reliance upon the BBOPprinciple of "limits to offsetting". It was in that context that the Courtreferred to the BBOP and RMLA papers as having "produced specificguidance" and "useful and illuminating" information.30(c) The Court recorded that "with that background understanding" theSocieties' submissions as to the meaning of the "limits to offsetting"principle were accepted.[70] Ms Gepp submitted for six reasons that there had not been a breach of naturaljustice:(a) natural justice is context-dependent. In this case, the new papers couldat most contribute to the Court's understanding of an issue that it had28 Marie A Brown and Jemma Penelope "Biodiversity offsets in New Zealand: addressing the risksand maximising the benefits" (2016) 12(l) Policy Quarterly 35.29 At [87].30 At [87]–[92].already received information about. The Judgment indicates that thepapers aided "background understanding" only;(b) Oceana had a fair opportunity to put its case regarding the limits to theoffsetting principle which had been identified as a consideration andwas the subject of evidence;(c) the Court, instead of referring to the papers for "backgroundunderstanding", could equally have referred to evidence already beforeit as to the manner in which the limits to the offsetting principle hadbeen codified in the Waikato and Southland RPSs and by the PolicyQuarterly Paper already produced (making the same point as the papersin relation to the limits of offsetting);(d) the RMLA paper, when properly read, does not constitute evidence butrather legal commentary;(e) while the BBOP paper is properly seen as containing material in thenature of evidence, it was a document publicly available on the internetand a background paper to BBOP publications which were in evidence;and(f) if any issues of natural justice had arisen through the introduction ofthe papers, Oceana had not taken any steps such as requesting theopportunity to respond to the papers, and that failure to act to remedyany perceived prejudice counts against the Court holding that there hadbeen a breach of natural justice.31Oceana's reply submissions[71] In reply, Mr Christensen submitted again that the papers contained opinionevidence which other parties (including Oceana) had not been given the opportunityto test or address. He rejected any proposition that a party should be able to add to the31 Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council [2015] NZHC 2343 at[73]–[74].evidence after a hearing simply because the subject-matter of the new evidence was inissue at the hearing itself.[72] He rejected Ms Gepp's proposition that the two papers "added nothing ofsubstance", noting the influence upon the Environment Court as indicated by thereferences in the Judgment.[73] Mr Christensen noted that the Societies had submitted the papers with theirclosing submissions to counter Oceana's submission that policy 5.4.6(c) wasessentially redundant (as replicating the no net loss criterion).[74] Mr Christensen rejected as irrelevant Ms Gepp's observation that Oceana hadnot requested from the Environment Court the opportunity to respond to the paper. MrChristensen submitted that the key point is that the Environment Court relied on thepapers as material to its decision.Discussion – the RMLA article[75] The Societies' reference to the RMLA article in its closing submissions doesnot raise issues of breach of natural justice. It is the article of a legal practitionerworking in the resource management area, written from a legal practitioner'sperspective. Reference to the article was properly made in the course of submissionsin precisely the same way as such commentaries are referred to regularly in all thecourts. Such papers assist with an understanding of the issues and may (as this paperdid) discuss those issues by reference to the expressed concerns and views of relevantexperts. But they do not replace the underlying need for the parties to adduce evidence(be it the reports and oral evidence of experts or documentary exhibits produced andspoken to by the experts). In this case, the Environment Court had before it evidenceboth as to the experts' understanding of the meaning of policy 5.4.6(c) and also itslikely effectiveness in relation to preservation of rare or vulnerable species,particularly in regard to the scale or threshold that the policy should adopt.[76] As the title to the RMLA paper records, the author was suggesting "a wayforward".[77] It was then for the Environment Court, having heard the evidence and in lightof its own expertise, to make its decision in relation to the appropriateness of policy5.4.6(c).[78] Neither the Societies' reference to the RMLA paper in its closing submissionsnor the Environment Court's regard to it in the Judgment constituted a breach ofnatural justice.Discussion – BBOP paper[79] It was common ground on this appeal that the BBOP paper contains matters ofevidence. It, for instance, outlines a set of ecological and other factors that can helpto determine whether impacts are likely to be easy or difficult to offset. As theintroduction to the BBOP paper itself explains, the paper specifically addressesPrinciple 2 in the BBOP Standard on Biodiversity Offsets. The BBOP paper isspecifically focused, as its title indicates, on limits to what can be offset. A separateBBOP Resource Paper deals with the concept of "no net loss".[80] It was clear in the evidence called by the Societies, particularly that of Dr Lloyd(as referred to at [42] above), that the Societies invoked the BBOP principle "limits tooffsetting" in rejecting Oceana's proposition that 5.4.6(c) was not a redundantcriterion. The BBOP paper identifying international biodiversity offsetting principleswas directly referred to by Dr Lloyd, in some detail, in his evidence-in-chief.32 Otherwitnesses, Dr Ryder and Ms Myers, also referred to the BBOP principles. Theevidence was that the principle behind policy 5.4.6(c) derived from the BBOP'sprinciple of "limits to offsetting".[81] As the Environment Court recognised, the BBOP (in its "Resource Paper:Limits to What Can Be Offset") is ultimately concerned with risk, namely that someelements of biodiversity are so irreplaceable or vulnerable that the risk of their notbeing successfully offset (no net loss, like-for-like outcome) are too high.3332 See above at [42] and n 20.33 See [90] and [95] of the Judgment.[82] The 2012 BBOP paper is in no sense a departure from the internationaldiversity offsetting principles which had been developed by the BBOP in 2009.Rather, as the "Contents" page in the BBOP paper indicates, its purpose is to identifyecological and other factors that may help to determine whether impacts are likely tobe easy or difficult to offset. In other words, it points towards considerations relevantto the likelihood (in risk) that residual impacts on biodiversity will be offsettable ornon-offsettable.[83] The Environment Court had heard evidence in relation to the risk (addressedby the BBOP principles and by policy 5.4.6) as in the evidence of Ms Myers (referredto at [88] of the Judgment) – the risk exists that there is the loss or extinction of aspecies from a particular area or an ecological district.[84] What the BBOP paper identified (as quoted at [91] of the Judgment) arespecific situations in which the risk is generally high that impacts will not besuccessfully offset.[85] Those observations serve to illustrate particular situations in which the risk ishigh but they do not stand alone or depart from the principles previously identified bythe BBOP in 2009 in relation to "limits to offsetting", ultimately based on risk.[86] I accordingly accept the thrust of submissions for both the Council and Forestand Bird, namely that the BBOP paper (and the RMLA paper) were consistent withthe evidence and submissions of both the Council and the Societies. While providingamplification of the underlying drivers, and serving as concise articulations of thosedrivers, they did not substantially alter or add to the material placed in court at thehearing itself. The principles identified by the BBOP (and the underlying drivers)were matters arising from the evidence on which all the parties to the EnvironmentCourt appeal hearing were entitled to make their submissions. Reference to relatedBBOP papers referring to the risk assessment involved in deciding upon any limits tooffsetting was within the appropriate parameters of submissions in the circumstancesof this case. If Oceana had referred to such papers in its closing submissions, it wouldhave been for any other party to respond by way of submission. If, as occurred, it wasother parties (the Societies) who first referred to other papers in their submissions, itwas open to Oceana to obtain leave to respond. Significantly, Oceana has notidentified what evidence might relevantly have been called in response. Theimpression left with this Court (as an appeal court not taken through the full detail ofthe proceeding) is that the relevance of the two papers, as made the subject of theSocieties' submissions, was most appropriately dealt with by Oceana seeking andobtaining leave to file supplementary submissions if it wished to do so. Oceana hasnot satisfied the onus of establishing that the Environment Court erred as a matter ofprocedural fairness or natural justice in the way asserted by Oceana – "by not affordingall other parties an opportunity to respond".Appeal ground 4 – conclusion unsupported by evidence (reference to"individuals" in policy 5.4.6(c)The issue[87] By its Notice of Appeal, Oceana asserted that the Environment Court had erredin law because it came to a conclusion on the wording of policy 5.4.6(c) that it couldnot reasonably have come to on the evidence. In particular, Oceana submits that thereis no evidence to support the Environment Court's inclusion of the word "individuals"in policy 5.4.6(c).[88] Specifically, the point arises in this way. The wording of policy 5.4.6(c), asamended by the Environment Court, now reads:Consider the offsetting of indigenous biological diversity offsetting, when:(c) The offset ensures there is no loss of individuals of rare or vulnerablespecies as defined in reports published prior to 14 January 2019 underthe New Zealand Threat Classification System ("NZTCS");[89] The version of policy 5.4.6(c) which the Council had put to the Court did notrefer to "individuals" but instead referred to the offset ensuring there is no loss of rareor vulnerable species.Oceana's submissions[90] For Oceana, Mr Christensen submitted that it became clear in the course of thehearing in the Environment Court (through cross-examination, questions from theCourt and re-examination) that policy 5.4.6(c) did not and should not refer to loss ofindividuals.[91] Mr Christensen noted the observation of the Environment Court (at [88] of theJudgment, above at [39]) that in conferencing the ecologists had considered policy5.4.6 referred to individual specimens of a species. That was what the ecologists hadappeared to agree in their Joint Witness Statement.[92] However, as Mr Christensen submitted, there was then cross-examination ofexperts in relation to whether the policy as put forward by the Council was in facttalking about the extinction of a species rather than individuals of a species. BothDr Lloyd and Dr Ryder were questioned in that regard and opined that the policy didnot relate to individuals of a species but rather to the species as a whole.Mr Christensen referred also to observations of the Court in the course of the hearingwhich similarly appear to indicate an interpretation of the policy as relating to thespecies as a whole and not to individual specimens. Finally, Mr Christensen submittedto his own closing submissions in which he reiterated that the policy was meant toapply to a species, not individuals, and that this was consistent with Judge Jackson'sown understanding as conveyed in the course of the hearing.[93] Mr Christensen concluded this part of his submission:It is submitted that the evidence before the Court, clarification through cross-examination and questions from the Court means that there was no evidenceupon which the Court could conclude that policy 5.4.6(c) should refer to"individuals" of a species. Therefore this is a conclusion to which the Courtcould not reasonably have come.[94] Mr Christensen then referred to the Environment Court's discussion of theBBOP paper (at [91] of the Judgment). He submitted that the Court, based on thediscussion in the BBOP and the RMLA papers, had held that the reference to rare orvulnerable species should include "individual plants or animals" (referring to para [95]of the Judgment). Mr Christensen submitted that, in order to justify that conclusion,the Court then stated that it was too risky to adopt the approach taken to indigenousspecies generally when one is concerned with the management of certain species.[95] Mr Christensen concluded that the Court's finding on this point was notsupportable on the basis of the expert evidence of the ecologists but appears instead tobe grounded on the Court's interpretation of the BBOP and RMLA papers.The Council's submissions[96] For the Council, Mr Logan noted that the Council's position before theEnvironment Court was that policy 5.4.6(c) was correctly interpreted so as to apply tospecies, not individuals of a species. He noted that the witnesses for the Council andMs Myers (called by the Societies) also agreed on that interpretation. But all thosewitnesses (Dr Lloyd, Dr Ryder, Mr McRae and Ms Myers) expressed concern thatthere was no scale specified. Witnesses for Oceana did not address the issue in theirwritten or oral evidence.[97] On the matter of the interpretation of policy 5.4.6(c), Mr Logan noted thatalthough the presiding Judge had in the course of the hearing identified aninterpretation based on the species rather than individuals of a species, theEnvironment Court (at [87]) came to view policy 5.4.6(c) as containing "someambiguity".[98] Turning to the question of the scale to be addressed by policy 5.4.6(c),Mr Logan observed that the evidence and submissions before the Environment Courtrelating to policy 5.4.6(c) raised its scope as an issue for the Court to resolve. Inparticular, there was a question before the Court as to whether the policy should applyto rare and vulnerable species as a whole or to individual specimens of a rare andvulnerable species. Witnesses had criticised the limit (imposed by policy 5.4.6(c)) as"lacking any scale". Mr Logan identified two ways in which that problem could beaddressed, namely:(a) by adding a spatial dimension to the proviso, such as loss within anecological district; and(b) by adding a narrative description of the extent, if any, to which any lossis tolerable.[99] Mr Logan noted that the Court had preferred the latter approach (of narrativedescription). He submitted in the way in which the issue was contested in front of theCourt, that outcome was fairly open to the Court.[100] Mr Logan rejected Oceana's extended argument for Oceana that the Court'sconclusion (as to scale) was grounded on the Court's interpretation of the BBOP andRMLA papers. Mr Logan submitted that that does not follow.[101] Mr Logan contrasted the way in which Mr Christensen characterised the basisof the Environment Court's decision with what the Court actually said (at [91] of theJudgment). Mr Christensen had submitted the decision refers to the BBOP paper thatthe threshold for non-offsettable impact has been set as "no loss of rare or vulnerablespecies". Mr Logan contrasted this with the Court's actual finding:34It [the BBOP paper] also states that "there are currently no globally acceptednumerical thresholds that explicitly define when impacts are to be regarded asnon-offsettable". This principle is expressed in the policy 5.4.6 as "the offsetensures there is no loss of rare or vulnerable species".[102] Mr Logan submitted that Oceana misconstrued what the Court said at [91] ofthe Judgment. Mr Logan submitted that the Court was describing the function ofpolicy 5.4.6(c) (as the Council and the Societies contended) as a limit on theavailability of offsetting the losses of indigenous biodiversity. The limit itself was notlifted by the Court from the BBOP paper but was the limit to be found in the policypresented to the Court by the Council.[103] In relation to evidence as to the loss of biodiversity and the risks of furtherlosses, Mr Logan referred to the evidence summarised by the Environment Court at[9]–[24] of the Judgment. In Mr Logan's submission, the need to protect or improvethe situation of rare and vulnerable species was not in fact in contention during thehearing.34 Judgment, above n 1, at [91] (footnotes omitted).[104] Mr Logan submitted that by the conclusion of the hearing, the Court had tomake an evaluative judgement on planning policy based not only on the materialbefore it but also using its expertise and experience as a specialist court. The Courtwas required to decide whether the provisions of the PORPS promoted the purpose ofthe Act. Mr Logan submitted that the Court's decision on policy 5.4.6(c) was one itwas entitled to reach in accordance with the Act and on the issues within itsjurisdiction. Mr Logan characterised the decision as ultimately a planning policydecision for the Court to make.[105] Accordingly, Mr Logan submitted that no question of law arose from theconclusion reached by the specialist Court applying its expertise and experience to theissues before it in order to promote the purpose of the Act.Forest and Bird's submissions[106] Ms Gepp similarly submitted that Oceana could not demonstrate an error oflaw in relation to the "individuals" or "species" decision.[107] Ms Gepp noted that the hearing had been preceded by the filing of the "JointWitness Statement – Ecology" in which the witnesses, including Oceana's witness,had agreed that the loss of individual specimens of a rare or vulnerable species wouldbe constrained by policy 5.4.6(c). Ms Gepp noted that Oceana's witness had notaltered his evidence on that point at the hearing. On the other hand, other ecologists(Dr Lloyd, Dr Ryder and Ms Myers) had each expressly observed that if policy5.4.6(c) were to be applied at entire species level, the policy would need to specify thescale at which "no loss" would be assessed. None expressed support for a limit tooffsetting that would only preclude nationwide extinction of a rare or vulnerablespecies.[108] Ms Gepp referred also to the "Joint Witness Statement – Planning", where oneexpert noted that there was a lack of clarity if the scale at which the loss/lack of lossof a species were to be considered.[109] Ms Gepp noted that the parties' submissions ranged from Oceana's positionthat the "limits to offsetting" clause was redundant as it meant the same thing as nonet loss of rare or vulnerable species, to the Council's middle ground position that itmeant no loss of a rare or vulnerable species, through to the Societies' position that itmeant no loss of individuals of a rare or vulnerable species. Ms Gepp's submissionis that the Court was required to reach a view in relation to that continuum based onthe evidence and legal submissions.[110] Ms Gepp emphasised the range of possible options for policy 5.4.6(c) that wereopen to the Court on the evidence. In parallel to Mr Logan, she noted that the Court,rather than applying a spatial dimension to the proviso (such as loss within anecological district), decided to refer to individual specimens.[111] Turning to the BBOP and RMLA papers, Ms Gepp rejected the proposition thatit was those papers which led to the Court's determination of the decision to place thelimits of offsetting at either species or specimen level. Ms Gepp submitted that theCourt's discussion makes it clear that the Court relied on the papers to understand themeaning of limits to offsetting rather than the point at which the limit should apply.Ms Gepp noted in particular the structure of the Court's reasoning. The Court firstaccepted the Societies' submission that limits to offsetting are about unacceptableimpacts rather than technically unachievable offsets, the papers providing backgroundunderstanding for that conclusion (as recorded at [93] of the Judgment).[112] In the following paragraph ([94] of the Judgment), the Court then qualified thatacceptance of the Societies' submissions by the Court's judgement that the limit shouldthen apply to specimens rather than species.Oceana's reply submissions[113] Mr Christensen drew a distinction between matters which are in issue in theproceedings and matters on which there is evidence upon which the Court mayreasonably reach a conclusion. In his submission, the evidence was lacking. Hereferred again to the view reached by the witnesses in the course of the hearing thatpolicy 5.4.6(c) did not refer to the loss of an individual.[114] In Mr Christensen's submissions, the only reservation by experts was that thepolicy did not contain a scale, meaning a spatial scale (for example, within anecological district). Mr Christensen referred to passages in the evidence of Dr Lloyd,Dr Ryder and Mr McRae in which references to spatial scale (such as an ecologicaldistrict) were made.[115] Mr Christensen rejected the suggestion that the Court effectively had availableto it, on the issue of scale, a choice between a spatial dimension (such as an ecologicaldistrict) or a narrative description of the extent to which loss is tolerable.Mr Christensen submitted that there was simply no evidence to support a conclusionthat policy 5.4.6(c) should refer to the loss of an individual. He submitted that casesin which this Court has recognised the expertise of the Environment Court aredistinguishable because here the Environment Court must always base its decision onthe evidence before it. He submitted that this Court must draw a distinction betweenissues arising on legal submissions made and those arising on the basis of evidence(or in the absence of it).[116] Mr Christensen submitted that there was no evidential foundation for the Courtto reach the conclusion the policy should apply to individual specimens in this case –he submitted that the consistent evidence of the experts, as clarified in the course ofthe hearing, identified the lack of a spatial scale as an issue but that it was consistentthat the policy should not apply to the loss of individual specimens.[117] He submitted that even were there some evidential basis for the conclusionwhich the Environment Court reached in relation to the species/individual issue, theresult reached was still one which no reasonable decision-maker could have reached.This was because in his submission potentially perverse outcomes would result fromthe Environment Court's decision.[118] Mr Christensen submitted that one example illustrates his point:Where a healthy specimen of a rare or vulnerable species is located in an areato be developed and that specimen is salvaged and relocated nearby, we call itmitigation, and it is able to be considered. If however the specimen ismoribund and relocation will simply hasten its demise, policy 5.4.6(c) will bein play. Regardless of what else can be proposed by way of offset to maintainand protect that species (such as propagation of seeds from the individual andplanting out of multiple specimens) it cannot be considered because theindividual would be lost and the limit in policy 5.4.6(c) is invoked.One would then expect to be able to default to the compensation policy 5.4.6Abecause the limit to offset has operated as a technical knockout. But hereagain there is a problem. The limit in policy 5.4.6A(a)(ii)(2) will be invokedbecause the habitat of the moribund plant is to be removed. Compensationcannot be considered either.[119] Mr Christensen submitted that this "very simple example" makes clear theunreasonableness of the outcome that results from the Court's determination that"loss" in policy 5.4.6(c) applies to individual specimens rather than at some ecologicalmeaningful scale.Discussion – evidence in relation to offsetting policy[120] In considering whether the decision of the Environment Court in relation topolicy 5.4.6(c) (and in particular in relation to the reference to "individuals") wasevidence-based, the context is important. As the various parties took their position onthe appeal, the competing positions ranged from Oceana's proposition that the policyshould be deleted (as superfluous) to the Societies' position that policy 5.4.6(c) shouldbe retained but amended to include reference to "individuals".[121] The Environment Court had to deal with two issues. The first lay in thewording of policy 5.4.6(c) as put forward by the Council. The Court heard from anumber of witnesses as to the meaning of policy 5.4.6(c) before recognising that therewas "some ambiguity" in policy 5.4.6(c), and in particular ambiguity as to whether itreferred to loss of individual animals or plants, loss of rare or vulnerable species froman ecological district, or loss of rare or vulnerable species from New Zealand.35[122] Beyond that issue of interpretation, the Court also had to consider the substanceof the policy. The discussion during the appeal hearing before the Environment Courttherefore focused not only on what the policy as drafted meant but also on what thepolicy was intended to require. Dr Lloyd's evidence addressed not only theinterpretation issue but also the fact that the requirements for offsetting in policy 5.4.6are generally consistent with the international biodiversity offsetting principlesdeveloped by the BBOP. As Ms Gepp submitted, the BBOP is ultimately concerned35 Judgment, above n 1, at [87]–[88].with risk, namely that some elements of biodiversity are so irreplaceable or vulnerablethat the risk of their not being successfully offset are too high to be allowed to occur.[123] I accept Ms Gepp's submission that the Environment Court referred to BBOPmaterials (and to the RMLA article) for an understanding of the meaning of limits tooffsetting rather than the point at which the limit should apply. Hence the manner inwhich the discussion at [90]–[93] as to "limits to offsetting", involving an acceptanceof the Societies' submissions, was in turn qualified (at [94]) by the Court'sdetermination that there should be a reference to individual species. The Court in turnexplains that (at [95]) by reference to the Court's assessment that a "no loss" policy(while generally adequate for indigenous biological diversity) is too risky in relationto the management of threatened species.[124] For that assessment of risk the Court, against the background of the range ofpositions taken by the parties (including the Societies' position that policy 5.4.6(c)should apply to loss of individual specimens), had the task of assessing on the modestamount of evidence adduced by the parties in that regard but by reference also to itsown specialist expertise and experience.[125] Mr Christensen, on appeal, invites this Court to regard such authorities asGuardians of Paku Bay as distinguishable upon the basis that, on any appeal, theEnvironment Court must base its decision on evidence before it.36 Mr Christensen ineffect invites this Court to find that the Environment Court's decision was based onlegal submissions alone. I do not find that to be a correct characterisation of what theEnvironment Court did in relation to policy 5.4.6(c). The Court did have evidence inrelation to the risk involved and it came to a conclusion, on the evidence, that policy5.4.6(c) was required to address a risk that factually existed. On the basis of theevidence as presented, and upon the basis of the Court's experience as a specialisttribunal, it then needed to define the point at which, under an amended policy, 5.4.6(c)offsetting would be barred.36 Guardians of Paku Bay Association Inc v Waikato Regional Council, above n 10.[126] In these circumstances, Oceana has not established that there was an error oflaw when the Environment Court determined that policy 5.4.6(c) should refer to"individuals" by reason of there being no evidence to support that reference.Appeal ground 5 – error of law – Coronation North example ignoredThe issue[127] This appeal ground concerns what Mr Christensen has referred to as the"Coronation North example". It is asserted by Oceana that, having regard to theevidence on the Coronation North example, the Court reached a conclusion it couldnot reasonably have reached. Oceana led evidence in the Environment Court hearingas to the then-recently consented Coronation North project at Macraes Mine. GavinLee, a manager at Macraes Mine, who gave evidence for Oceana described CoronationNorth as: a good case study against which the implications of the pORPS's miningpolicies can be assessed.Mr Christensen described Coronation North in his submissions as: a real-life example of a complex and comprehensive mining developmentwith unavoidable impacts on significant biodiversity values requiring carefuluse of offset and compensation techniques in order to arrive at an outcomethat the ecologists for the parties were generally able to support as providingfor the protection and maintenance of biodiversity values while enabling thevaluable mineral resource to be mined.[128] Mr Christensen put forward Coronation North as a "good" project againstwhich the appropriateness of the various policy options available to the Court couldbe considered.[129] Mr Christensen described the "logic" in these terms:(a) if Coronation North were found to be an example where unavoidableresidual effects on biodiversity values were managed in a way whichachieved the purpose of the Act (which is the case as proven by theopinions of the ecologists and the granting of the necessary resourceconsents); and(b) if the intent of the contested policy provisions in the PORPS is toprovide guidance toward delivering outcomes that achieve the purposeof the Act in the area of tension between developing mineral resourcesand protecting and maintaining important biodiversity values; then(c) if the wording of the policy provisions were to operate in a way thatwould preclude outcomes like Coronation North being delivered in thefuture, those provisions would be inappropriate, and alternativeprovisions should be preferred.[130] In other words, Oceana contends that there was an illogicality in the Court'sreasoning process which amounts to an error of law.37[131] Mr Christensen identified the single passage in the Judgment in which theCoronation North example, as cited by Oceana's ecology witness, Dr Thorsen, isreferred to:38Dr Thorsen was also of the view that limits restrict the use of compensation inmanaging the ecological effects of mining projects; he suggested that theCoronation North extension to Oceana's mine at Macraes Flat would not havebeen consented under the new regime proposed by the Regional Council. Wesee no need to discuss the Coronation North situation in detail. To aconsiderable extent Dr Thorsen's evidence was speculation, and in any eventDr Lloyd and Dr Ryder both considered appropriate compensation was in factgiven and that was broadly consistent with the Otago Regional Council'sproposed policies.(footnotes omitted)Forest and Bird's submissions[132] For Forest and Bird, Ms Gepp noted that Dr Thorsen's evidence related to theprobable effects of policy 5.4.X on future mine developments, illustrated by examplesfrom past mine developments and particularly from Coronation North. Dr Thorsenhad concluded that Coronation North could not have proceeded under the37 Mr Christensen invoking observations in Saddle Views Estate Ltd v Dunedin City Council, aboven 8, at [94] in which the Court recognised that a question of law may be engaged where the relevantdetermination was tainted by some error in the reasoning process.38 Judgment, above n 1, at [122].compensation policy wording proposed by the Council or the alternative proposed bythe Societies.[133] Ms Gepp quoted the passage at [122] in the Judgment. She noted that the Courthad heard a range of evidence on whether the Coronation North project could haveproceeded under the Council's proposed offsetting policy (Dr Thorsen opined that itcould not whereas Dr Lloyd opined that it could).[134] Ms Gepp submitted that the Court ultimately was entitled not to pay significantattention to this issue because the Court was not required to assess the compensationpolicy under the PORPS in terms of whether it would enable a hypothetical CoronationNorth proposal to proceed. That the Court considered itself so entitled may be seen asreflected in the Court's observation:39We see no need to discuss the Coronation North situation in detail.[135] Ms Gepp observed that there may have been an error of reasoning in theJudgment if the Court had:(a) made a finding that the RPS policies must be written in a way thatensures a future Coronation North project would obtain consent; andthen(b) approved a policy that would not achieve that outcome.[136] Ms Gepp submitted that the Court's reference in the concluding sentence ofpara [122] to "appropriate compensation" must mean compensation that wasappropriate under the policy framework that applied when Coronation North wasgranted consent, not compensation that is appropriate in all situations. The Court hadnot been tasked with assessing the appropriateness (in a generic sense) of theCoronation North compensation package.[137] Ms Gepp then referred to the evidence given by Ms Myers (for the Societies)in relation to the policy wording. Ms Myers had given evidence that Coronation North39 At [122].was altered in the loss of a complex of nationally recognised, naturally uncommonecosystem types and the loss of threatened and at risk plant species, with the loss ofthose values being irreversible, leading to cumulative loss, and not maintainingbiodiversity. Ms Myers considered the Societies' proposed policy wording as morerobust in ensuring that impacts that lead to the loss of a complex of rare ecosystemtypes and species do not occur.[138] Ms Gepp observed that the Court was entitled (on the evidence) to prefer amore robust policy framework. The Court would have been engaging in "purespeculation" if it had attempted to anticipate how a mining company might frame upa mining proposal in the light of the policy framework.[139] Ms Gepp submitted that Oceana's appeal submissions in relation to theCoronation North example effectively invite this Court to regard the EnvironmentCourt's failure to take a previous decision into account as an error of law. She notedthat one division of the Environment Court considering a plan appeal is not bound toapply similar reasoning and conclusions from another division of the EnvironmentCourt considering a resource consent, even where both sets of appeals deal with thesame land and the same subject-matter. The plan appeals and resource consent appealsask different questions and involve different statutory considerations.40[140] In conclusion, Ms Gepp submitted that the Environment Court was notconstrained to approve a version of policy 5.4.6(c) that would enable a hypotheticalnew Coronation North mine to be consented. That is not one of the statutoryrequirements for plan policies. Rather, in Ms Gepp's submission, the Court wasrequired (in summary) to focus on the policies' effectiveness in achieving the planobjectives, their consistency with the Council's functions, and whether theyimplemented higher order planning instruments and the Act's sustainable managementpurpose. Ms Gepp submitted that, through the Judgment, the Environment Courtdischarged that obligation.40 Relying on Raceway Motors Ltd v Canterbury Regional Planning Authority [1976] 2 NZLR 605(SC) at 607; Shotover Park Ltd v Queenstown Lakes District Council [2013] NZHC 1712 at [90]and [97].The Council's submissions[141] For the Council, Mr Logan's submissions were similar to those of Ms Gepp.[142] Mr Logan identified the additional limits which the Societies had sought (asadditions to the compensation policy), being:(a) removal or modification of habitat essential to the survival of athreatened or an at risk indigenous fauna species because of itsimportance for breeding, feeding or migration (or which is importantfor the survival of threatened flora); or(b) removal or modification of a significant portion (to the extent that itsecosystem functioning is lost) of a rare ecosystem type or ecosystemtype unique to the ecological district or region, where that ecosystem'sfunctioning cannot be remedied.[143] Mr Logan noted that Ms Myers had acknowledged in her evidence thatbiodiversity compensation for Coronation North was unlikely to have met thoserequirements because mining would have resulted in a loss of a complex or nationallyrecognised, naturally uncommon, ecosystem types (if ephemeral wetlands, seepagesand flushes) and would also have resulted in the loss of threatened and at risk plantspecies within the footprint of the mine.[144] Mr Logan noted that Ms Myers' evidence was the only evidence whichaddressed that issue.[145] Mr Logan identified in the submissions that counsel for Oceana had made tothe Environment Court as to the likelihood that the additional limits proposed by theSocieties could mean that a major project such as Coronation North would beprevented by the adoption of limits and policy 5.4.X. Oceana argued that the Courtshould reject the case for limits.[146] Mr Logan submitted that it is clear from the Judgment that the EnvironmentCourt made its own assessment of the issues against the key statutory provisions,concluding that limits were necessary and preferring the limits proposed by theSocieties. The Court adopted that position because of the importance of thebiodiversity values at stake and the statutory obligations to safeguard the life-supporting capacity of ecosystems in s 5(2)(b) of the Act, the obligation (as a matterof national importance) to recognise and provide for areas of significant indigenousvegetation and significant habitats for indigenous fauna in s 6(c) of the Act, and theduty to maintain indigenous biological diversity in s 30(1)(ga) of the Act.41[147] Mr Logan further noted:(a) Coronation North was the consent decision of a panel ofCommissioners appointed by the relevant local authorities, the meritsof the decision by the Commissioners not being in issue in the appeal;(b) the Court was not bound to accept the outcome of the Coronation Northapplication;(c) the task of the Court was different from the function of theCommissioners, being to determine region-wide policies and not todecide a site-specific proposal;42(d) consent decisions (as in relation to Coronation North) do not determinefuture policy settings; and(e) Coronation North preceded policies adopted by the Court – the consentapplication for Coronation North was not designed with the policiesapproved by the Court in mind.[148] In conclusion, Mr Logan submitted that there had been no material error oflaw.41 Judgment, above n 1, at [96]–[162] and [199]–[200].42 Mr Logan also referring to Shotover Park Ltd v Queenstown Lakes District Council, above n 40.Discussion[149] The fact that the Environment Court (at [122] of the Judgment) expresslyrecorded that they saw no need to discuss the Coronation North situation in detailclearly indicates that any view reached in relation to Coronation North was notaccepted as having direct relevance or application on the appeal in relation to thePORPS. The Court was not required to and did not reach a view either that theCoronation North consent had been correctly granted or that a project such asCoronation North would definitely have been precluded under the policies as amendedby the Judgment.[150] The Court's description (at [122] of the Judgment) to Dr Thorsen's evidenceas being "[t]o a considerable extent speculation" reflects the fact that the Court wasengaged with a plan appeal and not with a resource consent appeal.[151] The final observations of the Court in the concluding lines of para [122] of theJudgment (as to the views of Dr Lloyd and Dr Rider in relation to the appropriatenessof compensation in the Coronation North example and the consistency of that with theCouncil's proposed policies) do not form part of the Court's reasoning in reaching itsdecision. I recognise that the concluding lines of para [122] introduce an element ofconfusion. The Court there makes direct mention of the policies proposed by theCouncil and the evidence of witnesses in relation to those proposals. The Court doesnot refer to the Societies' proposed policies or the evidence of Ms Myers, although thelimits proposed by the Societies were adopted. But those concluding lines in para[122] do not form a material part of the Court's reasoning in relation to the need forlimits. The Court does not make a finding on whether the Societies' limits would havemade impossible the consenting of a Coronation North-type project. Nor was itrequired to do so, given that the context was an appeal in relation to the plan.Appeal ground 6 – error of law – failing to consider alternatives and makeassessments under s 32(2)(c) of the ActThe issue[152] Oceana asserts that the Court failed to appropriately consider alternatives unders 32 of the Act and failed to appropriately assess the range of options presented to itin the context of the risk assessment required under s 32(2)(c) of the Act.[153] Mr Christensen refers to the Environment Court's explanation of s 32 inFederated Farmers of New Zealand (Inc) v Mackenzie District Council (No 11).43There, the Court observed:44Section 32 approaches the question of efficiency by requiring analysis of threecomponents of efficiency:(a) the benefits and costs of the proposed provisions;(b) the benefits and costs of the alternative (in this case the status quo);(c) the risks of acting or not acting.[154] For the need to assess alternatives, Mr Christensen referred to Self Family Trustv Auckland Council.45 In that case, the Environment Court, after referring to therequirement for an assessment to have regards to community values by reason of theprovisions of both s 7(b) and s 32 of the Act, continued:46We reiterate, because of its importance, that then it needs to cover all the socialbenefits and costs of achieving the relevant objectives. If they cannot bequantified then they should at least be identified so that a qualitativeassessment can be made. Of course merely qualitative evidence reduces theutility of "efficiency" analysis because it then tends toward simply being aneffectiveness evaluation (which needs to be carried out anyway). The greatvirtue of quantitative analysis, where it can be comprehensively (even if onlyapproximately) carried out, is that it gives an independent and objectiveassessment of the alternatives being examined.43 Federated Farmers of New Zealand (Inc) v Mackenzie District Council (No 11) [2017] NZEnvC53.44 At [457] (footnotes omitted). See also Self Family Trust v Auckland Council [2018] NZEnvC 49at [311]–[312].45 Self Family Trust v Auckland Council, above n 44.46 At [357] (footnotes omitted).[155] Mr Christensen referred also to the observations of the Environment Court inFederated Farmers in relation to consideration of alternatives where the Courtexplained in relation to "the benefits and costs of the alternative" under s 32:47[458] As for the second bullet point we should explain why alternatives arestill relevant since in its pre-2009 version express reference to alternatives hasnow been largely omitted from section 32. The exception is the heading whichstill refers to Consideration of benefits, alternatives and costs. In addition tothat we hold that consideration of alternatives is implicit for three reasons.First, section 32 RMA requires the local authority to assess whether eachobjective, policy or method provision is the most appropriate. "Most" is acomparative term: it requires that the provision in contention be evaluatedagainst at least one alternative. Second, section 32(4)(b) requires the localauthority to take into account the risk of acting (i.e. introducing PC13(pc)) ornot acting (e.g. reverting to the status quo). That requires comparing (at least)those alternatives. Third, section 32 is a procedural provision. It must beapplied in accordance with the purpose and principles of Part 2 of the RMA.The principles include the requirement in section 7(b) RMA to have particularregard to the efficient use of the relevant natural and physical resources. Wewill discuss the efficient use of the resources of the Mackenzie Basin next. Itis sufficient to record at this point that economic efficiency involves acomparison of the net social benefits of the objective in question with thesocial benefits of the best alternative (often but by no means necessarily, thestatus quo).[156] Mr Christensen referred also to the observation of the Environment Court inPort Otago Ltd v Otago Regional Council that:48Indeed the whole point of section 32(2)(a) and (b) and of section 32AA is thatcosts and benefits should be quantified if practicable.The approach of the Environment Court[157] The Environment Court in the Judgment set out its approach to the question ofthe efficient use of resources at two particular points.[158] First, the Court referred to the provisions of s 61 of the Act, being a list ofmatters in accordance with which an RPS must be prepared. Those include theobligation to have particular regard to an evaluation report prepared in accordancewith s 32 of the Act. The Court added:4947 Federated Farmers of New Zealand (Inc) v Mackenzie District Council (No 11), above n 43(footnotes omitted).48 Port Otago Ltd v Otago Regional Council [2018] NZEnvC 183 at [100].49 Judgment, above n 1, at [58].We will elaborate on the most relevant of those below. We record here thatthere are no relevant regulations: and as for our obligations under section 32and 32AA we adopt what the Environment Court said in Port Otago Limitedv Otago Regional Council50 and apply those tests later.[159] And later in the Judgment under the headings "Other considerations" and "Arethe limits to offsetting and compensation more efficient than no limits?" the Courtrecorded:[163] On the question of the efficient use of resources, in another appeal onthe PORPS - Port Otago Limited v Otago Regional Council - we wrote:Section 32AA makes explicit what is implicit in section 7(b) RMA,that not only does an analysis of the costs and benefits of a proposedpolicy have to be carried out but so does an analysis of the costs andbenefits of any relevant alternative. Because all efficiency is relative,that has been the practice of some local authorities and theEnvironment Court since Memon v Christchurch City Council aselaborated on in Port Gore Marine Farms v Marlborough DistrictCouncil and subsequent cases. A recent example is Self F[amily]T[rust] cited earlier. The new section 32 and 32AA RMA in 2013appear both to adopt what was developing in practice anyway and toapply conventional social cost benefit analysis as explained in theTreasury Guide to Social Cost Benefit Analysis applied in SelfF[amily] T[rust].The weight to be given to the analysis is not stated in section 32 orsection 32AA of the Act. It appears that is determined under section7(b) RMA which requires the decision-maker to have particular regardto the result of the efficiency analysis.[164] The position was summarised in an earlier decision (cited in SelfFamily Trust) – Federated Farmers of New Zealand Inc (Mackenzie Branch)v Mackenzie District Council as follows:Section 32 approaches the question of efficiency by requiring analysisof three components of efficiency:(a) the benefits and costs of the proposed provisions;(b) the benefits and costs of the alternative (in this case the statusquo);(c) the risks of acting or not acting.The Environment Court added in Self Family Trust that (c) " ... is perhapscontroversial as a component of efficiency: it is really a backstop where thereis insufficient information on (a) and (b)".(footnotes omitted)50 Port Otago Ltd v Otago Regional Council, above n 48, at [49]–[55].[160] At that point, the Court then turned to consider in particular the benefits ofgold mining in the region. The Court found:[165] We described earlier the benefits of gold mining in the region. Thewitnesses for Oceana and for the Crown implied that limits on compensationcould prevent mining and thereby curtail jobs, exports, incomes and revenuestreams to the Crown through royalties and taxation. There will be social andeconomic costs if mining is constrained. Consequently in Oceana's and theCrown's views the preferable course is that compensation and other benefitsproposed are weighed up on a case-by-case basis against the costs of effectsof the proposed project on the environment. However, the evidence as to thenet social cost is very limited because we find that the economic evidencefrom Mr Ballingall is of little assistance to the court for the reasons given bythe Societies:(a) Mr Ballingall was not asked to, and did not, considerparticular policy options and what those different optionsmight mean in terms of economic outcomes;(b) his evidence in terms of net losses to the economy if anycurtailing of mining occurs is around a single scenario wheremining does not occur. His evidence does not take intoaccount that mining might occur but be subject to limits;(c) he had not considered the costs and benefits, both to theapplicant and to the consent authority, of proposals being putforward that would not be acceptable because of theirecological impacts;(d) he had not attempted to put a value on the ecosystem servicesand intrinsic values of significant indigenous vegetation andhabitat lost as part of mining proposals going ahead.[166] The Societies acknowledge that the benefits of mining to the regionand to New Zealand are "a weighty consideration". They then submit that:... it would not be appropriate to balance the economic benefits ofmining with the cost of ensuring indigenous biodiversity ismaintained. The latter is a mandatory function which cannot beabrogated based on economic considerations. The costs benefitdecision has already been made at a national level by the legislature.We hold that is not correct. Parliament has not made any final cost benefitdecision as to the use of resources in Part 2 of the RMA. However, thelegislation has given 'strong directions' about what to do in the absence of(and perhaps even in the presence of) a comprehensive social cost benefitanalysis under section 7(b) RMA.[167] The Societies took a more conciliating approach in counsel's nextparagraph:The costs of imposing the particular limits proposed should becompared to the cost of not providing for compensation at all. Giventhe locational constraints of mining and its importance to the Otagoeconomy, it may be considered appropriate to provide for mining evenwhere it would not protect significant and highly valued naturalresources. However, the costs of not providing for offsetting andcompensation (ie. requiring all adverse effects to be avoided,remedied or mitigated) are likely to be significantly higher than thecost of providing for offsetting and compensation withinenvironmentally appropriate parameters.The costs of biodiversity functions and values that would be lost ifresidual adverse effects were able to be compensated for in all casesshould also be considered. If a proposal would result in the type ofimpact described in the proposed limits to compensation, this has acost in terms of loss of ecosystem services and intrinsic value. Thatcost is unlikely to be quantifiable, but that does not mean it should bedisregarded.We consider that is a fairer summary of the efficiency issue and we adopt it.[168] The difficulty is that no attempt was made to analyse either theindirect use or option values of the indigenous biodiversity, let alone the non-use values. We have far too little information to even make a back of theenvelope assessment of the social costs and benefits of the two options. Thereis a similar lack of information for assessing the efficiency of the options forthe offsetting policy.(footnotes omitted)[161] Under a heading "6.2 What is the risk of acting or not acting?", the Court thenobserved:51As a consequence of the lack of information referred to in the previousparagraph the risk assessment is of greater importance in this case.[162] The Court then undertook its risk assessment before concluding:52Accordingly we find that the limits are necessary to ensure that indigenousbiological diversity is protected. We accept the assessments by the ORC andthe Societies of the risks of acting or not acting to supply limits tocompensation, i.e. that the limits are necessary.Failure to engage with s 32 at all?[163] Responsibly, Mr Christensen did not submit that the Court had failed to engagewith s 32 of the Act. As Mr Logan submitted, the Judgment shows that the Courtclearly understood the obligation under s 32 to examine whether the provisions in theproposal were the most appropriate way of achieving the relevant objectives by51 Judgment, above n 1, at [169].52 At [184].identifying and assessing other reasonably practicable options for achieving theobjectives.53Did the Court err by not making an assessment in relation to the Council's (two limit)proposal?[164] For Oceana, Mr Christensen emphasised that the Court had been presentedwith three alternative formulations of a compensation policy in the form of Oceana's(no limits), the Council's (two limits) and the Societies' (four limits). Mr Christensenconcluded that the Court had failed to appropriately consider both Oceana's and theCouncil's proposed options.[165] For the Council, Mr Logan observed that by the point of the Judgment (part 6)at which the Court turned to its s 32 assessment, the Court had provisionally concludedthat there were two options being the Societies' proposed limits or the Oceana proposalfor no limits (and instead "considerations").54[166] The reasoning leading the Court to this conclusion – eliminating considerationof the Council's two limit proposal did not fall into a category which could beidentified as a "reasonably practicable option" for achieving the objectives (of theproposal).55[167] It was not an error on the part of the Court, in these circumstances, to carry outits analysis of alternatives in relation to the two remaining proposals being Oceana'sand the Societies'. In other words, the Court appropriately came to the conclusion thatthe fairer summary of the efficiency issue (under s 32 of the Act) was as stated bycounsel for the Societies in submissions, and adopted by the Court:56The costs of imposing the particular limits proposed [by the Societies] shouldbe compared to the cost of not providing for compensation at all [as proposedby Oceana].53 Referring in particular to paras [163]–[164] of the Judgment, above n 1.54 Judgment, above n 1, at [161]–[162].55 In terms of s 32(1)(b)(i) of the Act.56 Judgment, above n 1, at [167].Did the Court have sufficient evidence of economic and social well-being benefits tocompare and quantify the benefits and costs of alternative proposals?[168] The submissions for Oceana in regard to the economic and social benefits ofthe Oceana proposal were closely followed upon the Coronation North example. MrChristensen submitted that the Coronation North example (while "historical")provided the relevant evidence required of economic and social well-being benefits.[169] Ms Gepp, for Forest and Bird, submitted that Coronation North could not betaken as providing the evidence contended for by Oceana. The Court's discussion ofCoronation North indicates difficulties which lay in drawing conclusions from the"Coronation North example". Ms Gepp described the Court as having been "rightlyreluctant to turn a planning appeal into a quasi-consent hearing".[170] For the Council, Mr Logan observed that while Oceana (and the Crown) hadadduced evidence of social and economic benefits of the existing mine, their evidencehad been lacking in relation to any cost/benefit analysis of the impacts of mining (orbiodiversity) of any of the options before the Court. Mr Logan referred to the Court'srecognition that it had:57 far too little information to even make a back of the envelope assessmentof the social costs and benefits of the two options.[171] Parliament provided for precisely that contingency through s 32(2)(c) whichpermits the Court to assess the risk of acting or not acting if there is uncertain orinsufficient information about the subject-matter of the provisions.[172] I accept the submissions for the Council and Forest and Bird that the Court didnot err (in law) in reaching its conclusion as to the insufficiency of information toquantity benefits and costs and therefore proceeding to assess risk under s 32(2)(c) ofthe Act.57 At [168] (footnotes omitted).[173] The second aspect of Oceana's appeal in relation to the Court's assessmentunder s 32 of the Act related to the Court's assessment of risk under s 32(c), inparticular of acting or not acting.58[174] This aspect of the appeal is closely related to Oceana's complaint as to a failureto consider alternatives under s 32(b) of the Act. In the notice of appeal, the complaintis that the Court failed to appropriately assess the range of options presented to it inthe context of the risk assessment required under s 32(2)(c).[175] To the extent that the Court did not assess risks in relation to the Council's twolimit proposal, I reiterate my earlier conclusion – the Court was entitled to focus itsconsideration on Oceana and the Societies' proposals.59[176] In Oceana's more specific grounds of appeal, it asserted that:(a) the Court failed to appropriately consider Oceana's and the Council'sproposal that considerations should be for assessment by a consentauthority (and not imposed through absolute limits);(b) the Court failed to assess the impact of different biodiversity policyformulations on the enabling objectives and policies in chapter 5 andelsewhere in PORPS as they relate to mineral development; and(c) the Court failed to assess how the proposed policy wording couldprevent biodiversity being maintained or improved through foregoingopportunities presented through compensation proposals that did notconform to the limits it decided upon (such as by failing to consider DrThorsen's evidence that there are potential biodiversity gains frombiological diversity compensation).[177] In his opening written submissions for Oceana, Mr Christensen addressed thespecific grounds in one paragraph:58 Contained in part 6.2 of the Judgment, at [169]–[184]59 Above at [167].The Court identifies one risk of imposing limits to compensation is a potentiallack of information, however after discussing that risk the Court concludesthat is not a problem. The Court then goes on to discuss the risks of not actingto impose limits as being both procedural and substantive risks. However,there is no discussion of other risks of acting. A clear and obvious risk is thatimposing directive limits could result in appropriate biological diversitycompensation (like Coronation North) being excluded. In that case therewould be no benefits to biodiversity (i.e. the status quo would remain with noopportunity for benefits to the species impacted by the proposal) and themineral development benefits would be foregone. The benefits ofcompensation proposals to biodiversity have been acknowledged in theliterature, it is not the case that the status quo automatically achieves themaintenance of biodiversity.[178] Ms Gepp correctly summarised this second part of Oceana's argument as beingthat the Court failed to assess how the proposed policy wording could preventbiodiversity being maintained or improved through forgoing opportunities forcompensation.[179] Ms Gepp noted that biodiversity offsetting and compensation are responses tounavoidable loss of biota through impacts of development proposals. She submittedthat such responses do not benefit or enhance biodiversity, noting that whilebiodiversity offset or compensation actions enhance the biota that they target, there iscorresponding loss for the impacted biota. In her submission, that is not a benefit tobiodiversity. Ms Gepp referred to the evidence of Dr Thorsen (called as Oceana'secologist) that from an ecological perspective it is better to avoid impacts than to tryto recreate or enhance biota elsewhere.[180] Ms Gepp noted Mr Christensen's formulation of an error of law as lying in theCourt's failure to consider Dr Thorsen's evidence that there are potential biodiversitygains from biodiversity compensation. Ms Gepp submitted that Mr Christensen'ssubmissions in relation to Dr Thorsen's evidence failed to have adequate regard to theCourt's significant rejection of Dr Thorsen's evidence:60 the evidence of Dr Thorsen has to be read with caution.60 Referring in particular to the Judgment, above n 1, at [103].[181] Ms Gepp noted that on the evidence adduced in relation to appropriate limitson compensation from an ecological perspective, it was open to the Court to accept asit did the evidence of Ms Myers and Dr Lloyd.[182] I find no error of law in the Court's risk assessment under s 32(2)(c). The Courtreviewed the evidence, such as it was, preferring the evidence of certain witnesses tothat of another, and made its (factual) assessment of risk.Appeal ground 7 – failing to apply the correct legal test[183] As a final point of appeal, Oceana asserted that the Court had failed to applythe correct legal test by not assessing what formulation of the offset and compensationpolicies is the most appropriate way to achieve the purpose of the Act.[184] While Mr Christensen in his written synopsis addressed some submissions tothis point on appeal, he conceded in his oral submissions that this does not constitutea stand-alone ground but was in the nature of a "catch-all". He conceded that forOceana's appeal to succeed, it would have to establish one of its earlier, more specificgrounds of appeal (which have previously been determined in this judgment).[185] This point on appeal is therefore discussed no further.Outcome[186] Oceana's appeal will be allowed to the extent identified at [20]–[24] in relationto the wording of policy 5.4.6(c). The appeal will otherwise be dismissed.[187] The Otago Regional Council and the Royal Forest and Bird Protection Societyof New Zealand Inc, for costs purposes, are to be regarded as the successful parties inthis proceeding. There will be an order that the appellant pay their costs anddisbursements, but with quantum reserved.Orders[188] I order:(a) The Environment Court's confirmation of policy 5.4.6(c) in theproposed Otago Regional Policy Statement is quashed by reason of itsreference to "rare or vulnerable species as defined in reports publishedprior to 14 January 2019 under the New Zealand threat classificationsystem".(b) The consideration of the proposed Otago Regional Policy Statement isremitted to the Environment Court for amendment so as to provide aworkable definition in relation to affected species.(c) Except to the extent identified in orders (a)–(b), the appeal of OceanaGold (New Zealand) Ltd is dismissed.(d) Oceana Gold (New Zealand) Ltd is to pay each of the Otago RegionalCouncil and the Royal Forest and Bird Protection Society of NewZealand Inc their costs and disbursements of the appeal. The quantumof such costs and disbursements, if not resolved between the parties,are to be determined on the papers. Any applicant for the fixing of costsis to file and serve any memorandum (10 page limit) with schedules ofcalculations of costs and disbursements within 10 working days fromthe date of this judgment. The appellant is to file and serve anymemorandum in response (10 page limit), with schedules ofcalculations of costs and disbursements within 10 working days afterservice of the application for costs.Osborne JSolicitors:Anderson Lloyd, DunedinRoss Dowling Marquet Griffin, DunedinS Christensen, Barrister, DunedinS Gepp, Barrister, NelsonMeredith Connell, AucklandCrown Law, Wellington