In the early 1990s, the Minister of Lands and Conservation began a quiet process called tenure review, to reform the tenure of the Crown pastoral estate.
This process was so quiet that Parliament took over half a decade to authorise it, by passing the Crown Pastoral Land Act in 1998 (‘CPLA’). Tenure review aims to free the productive lands from the pastoral-only constraints of the Crown. Simultaneously, it aims to free lands with conservation and recreational values from the pastoral grazing of the sheep and the occupation rights of the leaseholder. Tenure reviews are voluntary; but over time, pastoral leaseholders accepted the Crown’s invitation.
One by one, the pastoral leases of the South Island high country carved up the tenure. Between 1991 and 2017, 436,652 hectares of the South Island high country were freeholded; 371,842 hectares shifted to public conservation land. Of the over 800,000 hectares whose tenure had been reviewed by 2017, 180,000 hectares underwent tenure review before Parliament authorised the process in 1998.
This disposal of freehold has come at a cost to the New Zealand taxpayer. In tenure review, the leaseholder and the Crown each buys out the other’s interest in the land. For the runholders’ leasehold interest in the 372,000 hectares conserved by 2017, the Crown paid runholders $191 million. For the Crown’s residual interest in the 437,000 hectares freeholded, the runholders paid the Crown $134 million.
On net, the Crown paid runholders $57 million (as of 2017), while disposing of more land than it conserved.
In short, what the Crown sold (freehold rights to 437,000 hectares of lower altitude and higher development potential) is more valuable than what the Crown bought (conservation and grazing rights to 372,000 hectares of higher altitude altitude and lower development potential). Yet the Crown lost money on the deal, including on the shores of Lakes Wanaka, Wakatipu, Tekapo, and Pukaki.
Further still, once freehold, the land takes on a life of its own. Land previously managed as 110 pastoral leases is now over 3000 freehold parcels. Nearly a third of the new freehold owners have sold some, or all, of their land. In total, about 20 percent (74,000 ha) of the new freehold has been onsold.
As of 2015, one-fifth of the ex-pastoral land that the Crown had freeholded for $65 million had been onsold for $275 million. The median onselling price was 693 times the Crown selling price. That is a capital gain 69,200 percent. The Crown realised none of that gain.
Ecological outcomes fail to meet statutory goals
A primary goal of the CPLA 1998 (s. 2) is to “enable the protection of significant inherent values [SIVs] of reviewable land”. CPLA defines SIVs in land, as the “inherent value of such importance, nature, quality, or rarity that the land deserves the protection of management under the Reserves Act 1977 or the Conservation Act 1987”.
Yet spatial analysis shows that, under tenure review, the more rare and threatened the values, the more likely it was to be freeholded under tenure review. And the more common and already protected a value is, the more likely it was to shift into conservation.
In other words, the process has freeholded the most rare values, and protected those that least need it.
Tenure review outcomes defy legal expectations
In 2017, Judge Jackson wrote an Environment Court decision: “Without a covenant it is difficult to see how the [Commissioner of Crown Lands] can justify freeholding as consistent with the purpose of tenure review under the CPLA.”
Yet during nearly 30 years of tenure review, freeholding without a covenant is the norm. Covenants cover only 14 percent of lands freeholded under tenure review.
In sum, both ecological and financial outcomes of tenure review make it clear that tenure review must end. Better late than never.
The new bill must pay close attention to ‘discretionary consents’
Stopping tenure review without tightening discretionary consents under the new CPLRA will allow landscape and biodiversity loss to continue unabated.
The ecosystem changes to the Mackenzie Basin since the 1998 passage of the Crown Pastoral Land Act are visible from space.
Analysis of satellite imagery shows that Crown decisions allowed about two-thirds of the intensification of the Mackenzie. The remaining one-third of the change took place on private land, governed by local council decisions.
There was a big growth in the landscape changes allowed by discretionary consents on existing Crown land between 2014 and 2017. In other words, discretionary consenting is accelerating. Failing to address it in the CPLRA will fail to address the landscape changes that necessitated the changes.
In sum, the Crown itself is the leading driver of landscape change in the Mackenzie. The Commissioner of Crown Lands has a lot of power over a lot of land.
This is not a response that inspires confidence that high country decisions operate under a system of strong public accountability.
Now I will give a few examples of closed-doors and unaccountable Commissioner-led decisions that made room for decisions that failed to serve the public interest. I am aware of the submission from Susan Walker, Nick Head, and Mike Harding, and refer you to their evidence of this phenomenon.
One example not referred to by Walker, Head, and Harding is one my students uncovered in their second-year field trip. In 2018, a green patch of developed pasture appeared in the middle of Riversdale Flats on Mount White Station just next to Arthur’s Pass National Park. Somewhat surprisingly, the leaseholder seems to have cleared and cultivated the wrong patch of land – not the land for which they had consent. In response, the Commissioner of Crown Lands does not seem to have prosecuted or fined the runholder.
Instead the Commissioner granted retrospective consent, and then a further large bundle of discretionary consents to clear and develop land on the doorstep of the Arthur’s Pass National Park, some of which is a designated reserve and even gazetted to go into the park. At the briefing hosted by the former Minister of Land Information in Christchurch on March 28, 2019, the deputy director of Land Information New Zealand (LINZ) responded to my student’s question about the legality of that series of decisions on Mount White Station with the words “mea culpa”. This is not a response that inspires confidence that high country decisions operate under a system of strong public accountability.
Indeed it is difficult to avoid the conclusion that the underlying cause of these extra-legal ecological, financial, and landscape outcomes within tenure review and the discretionary consenting process is too much agency discretion in the absence of public accountability. The problems illustrated above were allowed because the decisions took place behind the closed doors of the bureaucracy. It wasn’t any section of any law that explicitly allowed these outcomes. It was the information asymmetry and organisational slack that lulled the public to sleep and allowed an unconsented green patch in the shadow of Arthur’s Pass National Park.
We need a new cat – public accountability in the high country
Crown decisions on Crown land have operated in an environment with limited public accountability since the outset of tenure review in the early 1990s. Case in point is the fact that tenure review started years before Parliament authorised it in 1998.
Anyone who has studied the politics of bureaucracy, or watched Yes, Minister, can relate to the saying, ‘When the cat is away, the mice will play’. The cat of public accountability has been all but absent in the high country for three decades. The high country needs a new cat.
I say this for several reasons:
1) Indecipherable decisions
2) No public rights of appeal
3) 1+2 = poor outcomes
It is really difficult for the public to know what the Commissioner of Crown Lands is doing, and the public cannot appeal his or her decisions once made. This creates slack, agency discretion, bureaucratic wiggle-room, or “a zone of freedom of action for regulators … in which they can operate with lessened fear of punishment by the polity for decisions that deviate from those the polity would adopt on its own”.
In other words, without public accountability, it is easy to end up with poor outcomes. In still other words, when the cat is away the mice can play.
I am concerned the present proposal does not create enough public accountability; this leaves the bureaucratic wiggle-room intact. This risks perpetuating many of the ecological and landscape-level mistakes we have witnessed over the past several decades. The current proposal neither addresses, nor fixes, the cause of the problem because it fails to introduce a new cat.
Extend environmental democracy to the high country
One form the new cat could take is an extension of the infrastructure of environmental democracy onto Crown land. The sunlight of public accountability is the best, and only, solution to the information asymmetry and organisational slack that are built into the office of the Commissioner of Crown Lands.
There are at least two ways to do this:
1) do away with the office of the Commissioner, or
2) create at least as much public notice, accountability, and rights of appeal for the Commissioner’s decisions on Crown land as the public has on freehold land.
Unless we do one of these, I fear little will change in the high country.
The most important principle for governance of Crown land in the future is that there should be no discretion without accountability. By accountability I mean public openness, participation, transparency. New Zealand already has the tools to do so.
We could treat the Land Act 1948 as the equivalent of a Crown plan for Crown land. The Land Act says the pastoral estate is ‘suitable for pastoral purposes only’. So any proposed intensification of Crown land that is more intensive than the extensive pastoralism envisioned in the Land Act would be the equivalent of a notified consent application under the Resource Management Act.
In other words, we should extend New Zealand’s environmental democracy into Crown lands. I suggest:
i) The Commissioner should be required to consider cumulative effects in all decisions;
ii) Public notification of cumulative effects on surrounding ecosystems of any and all proposed changes on Crown lands, including downstream watershed effects. By changes in Crown lands, I include: Crown purchases of lease rights, or Crown alienation of Crown lands, discretionary consents on pastoral leases, or changes in the lease arrangements;
iii) Opportunity for public submissions and consent hearings, on the proposed land use changes;
iv) Rights of appeal to the Environment Court;
v) Ministerial call-in powers on any actions proposed or approved by the Commissioner of Crown Lands, similar to the call-in powers under the RMA 1991.
All of the necessary democratic infrastructure to do the above exists in New Zealand. Let’s extend it onto land owned by the Crown. If this requires amendments to the Land Act, then I suggest changing the Land Act 1948.
If and when the RMA changes, the environmental democracy infrastructure of the high country in the CPLRA 2021 should change to match.
Outcomes statement too vague, allowing too much wiggle-room
Section 4 of the new CPLRA describes ‘outcomes’ under the new legislation as:
“(a) maintaining or enhancing inherent values across the Crown pastoral estate for present and future generations, while providing for ongoing pastoral farming of pastoral land; and
(b) supporting the Crown in its relationships with Māori under te Tiriti o Waitangi; and
(c) enabling the Crown to get a fair return on its ownership interest in pastoral land.”
While noble, these outcomes strike me as allowing just as much wiggle room as the hierarchy of goals under the old CPLA. I think what we need is more about accountability than outcomes.
What do I think might help to avoid future extra-legal outcomes?
1) Change the Land Act to modify or abolish the role of the Commissioner of Crown Lands; or if not that,
2) Change the CPLA and possibly the Land Act to create clear lines of accountability between the Commissioner and the public. This should include public notification and rights to appeal Commissioner’s decisions and their cumulative effects to the Environment Court, at the very least.
3) Instil New Zealand’s environmental democracy into the Crown pastoral estate.
Crown lands should be governed in a way that respects and advances the ideals of our environmental democracy. This democratic infrastructure exists, and should extend onto Crown land.
These ideals of environmental democracy (as I read the RMA 1991) should extend the following to all decisions about Crown lands:
a. Prediction and consideration of cumulative effects
b. Public notification, submissions, and public participation
c. Rights of appeal
d. Ministerial call-in powers
In short, there should be no discretion (of the Commissioner, or any Department of Conservation or LINZ official) without public notification of proposals and their cumulative effects, accountability, and appeal rights.
Submissions to the Crown Pastoral Land Reform Bill close on Monday, February 22