Environmental due diligence is recommended for mergers or acquisitions of certain businesses as well as purchases or occupation of certain land which might give rise to potential environmental risks. This article looks at some of the key environmental risks parties should be aware of.
It is important to consider what it is you wish to do with or on land (or in the coastal marine area) and whether this is provided for in the relevant regional and district plans.
Kahlia Goss
If you are wanting to carry out a different activity to that currently undertaken, identifying and understanding the relevant plan rules is key. Plan rules regulate what you can and cannot do in terms of the use or development of land, water and the coastal marine area as well as discharges into the environment. Resource consent may be required if an activity is not otherwise identified as a permitted activity.
If you wish to expand or intensify an existing activity, you will first need to check the scope of any existing resource consents.
Depending on the scope, you may need to apply to vary the conditions of an existing resource consent authorising that activity under the district or regional plan or obtain a new resource consent.
Failure to check the district and regional plan rules first, as well as the conditions of a relevant existing resource consent, may result in a subsequent breach of those rules or existing consent conditions.
When acquiring a business or land subject to existing resource consents, it is also important to check whether these consents need to be transferred.
While land use consents attach to, and run with the land, and can be exercised by both landowner and occupier, resource consents granted under regional plans (discharge, water and coastal permits) are typically issued to a person or entity and will need to be transferred to a new business or landowner wanting to continue the consented activity.
Transferring a resource consent to a new consent holder is largely an administrative exercise, with both parties signing a transfer form and sending this to the relevant council to complete. A fee is usually payable for this service.
Once a resource consent is transferred to another party, that party becomes the consent holder and, as such, is liable for all charges associated with the resource consent (e.g. ongoing administration fees and monitoring charges).
Ensuring that there are no outstanding charges prior to transfer will avoid any costly surprises for a new consent holder.
Another important matter to look at, preferably before transfer, is the previous consent holder’s compliance history. Councils are required by law to monitor compliance with resource consent conditions. Non-compliance may give rise to enforcement action by council which, in some circumstances, can involve new consent holders.
Parliament is currently considering a Bill which would allow councils to consider compliance history when considering new resource consent applications.
Completing environmental due diligence before finalising a transaction ensures fully informed decisions are made, avoiding or reducing the risk of subsequent, costly surprises.
While this article draws attention to a number of key issues arising in environmental due diligence, there are many other environmental considerations which may need to be considered.
If you have any questions regarding this article or any other matters, please contact the Environment team at Tompkins Wake.
- Kahlia Goss is an Associate at Tompkins Wake, Rotorua. She can be reached on 07 929 9992 or kahlia.goss@tompkinswake.co.nz
Building activity and construction industry with General Urban Plan
