Technical Advice Note: National Policy Statement for Freshwater

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Technical Advice Note: National Policy Statement for

Freshwater Management 2020 – What is a Functional Need?

Disclaimer: This memo does not constitute legal advice and should not be relied on as

such.

Executive Summary

The Government’s Essential Freshwater package aims to arrest the ongoing loss of river

and wetland habitats and values by avoiding activities that may result in these losses except:

• For rivers, where there is a functional need for the activity to occur at that location

and the effects are managed via the Effects Management Hierarchy

; and

• For wetlands, where the loss is related to specific activities

, or where the loss is

related to construction of specified infrastructure, there is also a functional need for

the activity to occur at that location

This Technical Advice Note addresses the difference between functional and operational

needs and provides some hypothetical examples to assist those trying to determine whether

there is a functional need for their activity at a location.

ntroduction

The Government’s Essential Freshwater (Action for Healthy Waterways) package came into

effect on 3 September 2020. As part of that package, the Government recognised that the

cumulative loss of river and natural inland wetland habitats is an ongoing issue. The National

Policy Statement for Freshwater Management 2020 (NPS-FM 2020) therefore includes

policies to address these issues.

The implications of these policies and the associated definitions of the terms has already

been addressed in two Otago Regional Council Technical Advisory Notes

. One aspect of

these policies, however, continues to cause some confusion, specifically where a proposal

will result in a loss of extent and/or values of a natural inland wetland

or river, whether there

is a “functional need” for the activity in that location.

This Technical Advice Note revisits this question and provides hypothetical examples of

functional versus operational need to help those proposing work in and around wetlands and

rivers to determine whether their proposal meets the policy criteria regarding functional

need.

National Policy Statement for Freshwater Management 2020, policy 3.24. The Effects Management Hierarchy

is defined in Section 3.21 of the National Policy Statement for Freshwater Management 2020

National Policy Statement for Freshwater Management 2020, policy 3.22(1)(a)

National Policy Statement for Freshwater Management 2020, policy 3.22 (1)(b).

Rivers and Essential Freshwater 2020 ( https://www.orc.govt.nz/media/9391/rivers-and-efw-orc.pdf) and

Wetlands and Essential Freshwater 2020 https://www.orc.govt.nz/media/9381/wetlands-and-efw-orc.pdf).

Where the activity is also necessary for the construction or upgrade of specified infrastructure.

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Functional Need versus Operational Need

Functional need is defined in the NPSFM 2020 as:

“the need for a proposal or activity to traverse, locate or operate in a particular

environment because the activity can only occur in that environment.”

The important part of this definition is underlined above, notably that the activity can only

occur in a wetland or river environment.

Where it is technically possible that an activity can occur elsewhere, but where there are

technical, logistic or operational reasons why it is preferred for the activity to occur at the

location (e.g. issues of cost, land ownership), there is no functional need. Rather, these are

operational needs.

As recognised by the Environment Court in Te Rūnanga o Ngāti Awa v Bay of Plenty

Regional Council

, while a functional need is often obvious for infrastructure, it can be

complex when dealing with other activities where there is a less sharply defined functional

versus operational requirement.

In practice, whether there is a functional or operational need for an activity will depend on

the specifics of the proposal including why the project is being undertaken at that location.

To assist consent applicants in preparing their applications, some examples are provided

below.

Example 1: Construction of a new bridge on an existing road

Following a large flood event, a bridge on an existing road has been severely damaged and

needs to be replaced. The works to replace the new bridge will require activities within a

wetland adjacent to the road and these works will have adverse effects on the values of that

wetland.

In this instance, the bridge is considered specified infrastructure under the NPS-FM 2020

and therefore avoidance of effects on the wetland is not required under the relevant policy in

section 3.22 of the NPS-FM 2020 where the regional council is satisfied that:

“(i) the activity is necessary for the construction or upgrade of specified infrastructure;

and

(ii) the specified infrastructure will provide significant national or regional benefits;

and

(iii) there is a functional need for the infrastructure in this location; and

(iv) the effects of the activity are managed through applying the effects management

hierarchy.”

Te Rūnanga o Ngāti Awa v Bay of Plenty Regional Council [2019] NZEnvC 196

Specified infrastructure means any of the following:

(a) infrastructure that delivers a service operated by a lifeline utility (as defined in the Civil Defence Emergency

Management Act 2002)

(b) regionally significant infrastructure identified as such in a regional policy statement or regional plan

(i) by or on behalf of a local authority, including works carried out for the purposes set out in section 133 of the

Soil Conservation and Rivers Control Act 1941; or

(ii) for the purpose of drainage by drainage districts under the Land Drainage Act 1908

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In this instance, the bridge must be repaired or replaced as the road is a vital transport link to

rural properties. Given the terrain and existing roading infrastructure that the bridge connects

to, it is impossible to relocate the bridge elsewhere. Given this, there is a functional need to

undertake the works subject to managing the effects via the Effects Management Hierarchy

specified in the NPS-FM 2020.

Example 2: Construction of a new public highway through a wetland.

There is a proposal to construct a new public highway through a wetland as this is the

shortest and most efficient route to connect two townships. In the alternative, there is no

reason (e.g. terrain constraints), other than increased cost

, why the road could not be

routed around the wetland.

In this instance, the highway is likely to be considered specified infrastructure under the

NPS-FM 2020 as it would deliver a service operated by a lifeline utility (it may also be noted

as regionally significant infrastructure in a regional policy statement). However, while the

wetland option is cheaper, and therefore operationally desirable, given the alternative route

is possible (in this instance), there is not a functional need to construct the road in that

location.

Example 3: Construction of a new private road through a wetland.

There is a proposal to construct a new private road through a wetland as this is the shortest

route to someone’s new house. There is already an existing road to the property, but it is

longer and more time-consuming to traverse.

In this instance, the road is not considered specified infrastructure under the NPS-FM

2020 as it is not a service operated by a lifeline utility (there is an existing road that serves

that function), and is not noted as regionally significant infrastructure in a regional policy

statement. As the activity does not meet any of the exception criteria, the NPS-FM 2020

directs that the activity should be avoided and there is no requirement to consider functional

need.

Example 4: Gravel extraction

Build-up of aggregate in a riverbed can increase flood risk to neighbouring properties and

infrastructure. A primary mechanism to address this is to remove the aggregate from the

affected reach. In this instance, where the purpose of extraction is to restore or improve

flood-carrying capacity, there is a functional need to extract gravel from the location, as

extracting it elsewhere would not achieve the alleviation of flood risk.

In the alternative, where an applicant seeks to extract gravel from a riverbed solely for

commercial purposes

(e.g. to fulfil a roading contract), alternative sources of aggregate

(e.g. from a land-based quarry) may be available, albeit from a greater distance and/or at

greater cost. In these cases, there is no functional need for the activity to occur at that

location, as the material could be sourced elsewhere, and the desire to extract from that

location is operational.

Assessment of costs should include a consideration of the potential costs of mitigations and/or offsetting that

may be required to make up for any loss of wetland or river extent and values.

Gravel extraction from rivers can often both improve flood-carrying capacity and provide aggregate

for commercial operations so there may be times when both outcomes are being met.

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Example 5: Fish screening and bypass discharge affecting an existing wetland

A fish screen for a private irrigation intake has been unlawfully installed with a bypass

channel that discharges into a wetland, and therefore a retrospective resource consent is

required. While the fish screen structure itself is unlikely to have adverse effects on the

wetland, technical advice is that the sediment and increased water flow from the bypass will

have adverse effects on the ecology and hydrology of the wetland.

In this instance, the intake and bypass channels are not considered specified

infrastructure under the NPS-FM 2020 as they are not a service operated by a lifeline

utility. As the activity does not meet any of the exception criteria, the NPS-FM 2020 directs

that the activity should be avoided and there is no requirement to consider functional need

If however, the intake, fish screen and bypass channel had been for a community drinking

and stockwater supply, the intake would be considered specified infrastructure. In that

instance, consideration would need to be made of whether there is a functional need to have

the bypass discharge into the wetland. If an alternative option existed to discharge the

bypass channel to avoid the loss of wetland values, even at increased cost, there is not a

functional need to adversely affect the wetland because an option exists to regularise the

activity without the same loss of wetland values.

Example 6: Subdivision of land containing a stream

A developer has lodged an application to subdivide an area for residential properties, but the

area contains a modified (and degraded) natural stream, which is considered a river under

the Resource Management Act 1991 and the NPS-FM 2020. To maximise the number of

sections that can be developed, the current proposal intends to reclaim part of the stream,

resulting in a loss of extent.

In the alternative, a different area could be subdivided, or the proposed subdivision could be

re-designed to preserve the existing stream. Given this, while there is clearly an operational

desire to infill the stream in order to maximise the number of sections in the subdivision,

there is no functional need to do so.

Conclusion

This Technical Advice Note provides Otago Regional Council’s interpretation of the

difference between functional and operational need and the application of the NPS-FM

2020.

Assessment of functional need will always depend on the context of an activity and there are

likely to be specific questions when applying this guidance. We offer 30 minutes of free pre-

application advice to help applicants and this can be arranged through a phone call to our

Customer Services team (0800 474 082). This guidance does not constitute legal advice

and should not be relied on as such.