Guidance Note on Sec 32

Broadly, a s32 evaluation involves the following steps:

  1. identifying the resource management issue
  2. evaluating the extent to which any objective is the most appropriate way to achieve the purpose of the RMA
  3. identifying alternative policies and methods of achieving the objective
  4. assessing the effectiveness of alternative policies and methods
  5. assessing the benefits and costs of the proposed and alternative policies, rules, or other methods
  6. examining the risk of acting or not acting if there is uncertain or insufficient information about the subject matter of the policies, rules, or other methods (meaning the nature and extent of the issue and the appropriateness of the objective)
  7. deciding which method or methods are the most appropriate given their likely effectiveness and their likely cost, relative to the benefit that would likely deliver
  8. carrying out the evaluation outlined above before the provisions being adopted and summarising the evaluation in a report.

 

This guidance note provides guidance to RMA practitioners on undertaking these steps through an s32 evaluation process.

Key terms

The following are key terms in the application of s32 of the RMA:

Appropriateness - means the suitability of the plan provision to its proposed purpose. It has two related meanings:

  1. In the context of s32(3)(a) (evaluation of appropriateness of objectives) its meaning may (depending on the circumstances) include:

    1. relevancy
    2. usefulness
    3. achievability
    4. reasonableness
  2. In the context of s32(3)(b) (appropriateness of policies, rules or other methods) it includes the extent to which the provisions will be:

Effectiveness - means how successful a particular option is/will be in achieving the stated objective. How successful an option is can be measured in terms of not just whether an objective will be achieved outright; but it may alternatively relate to the extent to which progress will be made even if the objective won 't be met in full. The speed at which progress is made may also be a relevant consideration.

Efficiency - means where the benefits will outweigh the costs, either immediately or over time. The most efficient policy or method will achieve the stated objective with the greatest benefit and at the least cost (costs and benefits may be quantitative, semi-quantitative and/or qualitative). Efficiency is not to be confused with the terms 'net benefit ' or 'net present value ' (a measure that implies that all benefits and costs can be converted to a common 'currency ' and netted off against one another to generate a single measure).

The value of section 32 analysis

A transparent and well documented s32 evaluation will help to ensure that:

  • decision-makers have sound policy analysis on which to base their decisions about resource management issues
  • good resource management outcomes are achieved, at the lowest practicable cost to individuals and the community
  • plan provisions are targeted at achieving the purpose of the RMA by the most appropriate methods
  • a sound basis is provided for re-assessing (through subsequent evaluation) whether expectations and assumptions made during the policy development stage have proven to be correct. This will be apparent if the plan provisions are shown, on the basis of observed environmental outcomes (and other costs and benefits) to be effective and efficient.

Undertaking a thorough s32 evaluation may:

  • result in less opposition to proposed provisions, and fewer opposing submissions and appeals to the Environment Court
  • ensure greater success and less additional work in defending proposed provisions at the Environment Court
  • improve the chances of the council adopting or approving a private plan change request.

Documenting s32 considerations can assist in satisfying obligations under the Local Government Act 2002 (LGA). Acknowledging that the council has turned its mind to the requirements of s76 of the LGA in an s32 evaluation reduces scope for potential challenge under the LGA.

The section 32 evaluation process

1) Identify the resource management issue

An issue is an existing or potential problem that must be resolved to promote the purpose of the RMA. For guidance on how to identify RMA issues, see Writing Issues and Testing issues for RMA plans from the Writing Provisions for Regional and District Plans Guidance Note. This guidance is equally applicable for issues in regional policy statements.

2) Evaluate whether the objective is the most appropriate

An objective is a statement of what is to be achieved through the resolution of a particular issue. Objectives clearly state what is aimed for in overcoming the issue or promoting a positive outcome, or what the community has expressed as being desirable in resolving an issue. Objectives tend to be positively worded and need to be clear enough to provide targets that policies should seek to achieve. For guidance, see Writing Objectives from the Writing Provisions for Regional and District Plans Guidance Note.

The appropriateness of an objective has a number of dimensions. The relevancy and usefulness of an objective can, and should, be assessed before policies and methods are being identified. Other dimensions such as the reasonableness and achievability of the objective can only be assessed after policies and methods have been identified. If later analysis shows that the costs of pursuing the objective are too large in relation to the benefits, the appropriateness of the objective should be reviewed, and possibly revised or discarded.

Key questions when evaluating the appropriateness of objectives may include:

Is it relevant?

  • Will it address the issue in a way that achieves the purpose of the RMA?
  • Does it relate directly to the issue, and address a significant aspect of the issue?
  • Would achieving the objective make a substantial difference, in terms of addressing the issue and the purpose of the RMA?

Is it fit for purpose?

  • What would happen without it?
  • How will it guide decision-making?
  • How might it otherwise add value?
  • Does it comply with sound principles for writing objectives?
  • How will it impact on other issues and their objectives?

Is it achievable?

  • Does the council have the functions and powers and policy tools to ensure that this outcome can be achieved?
  • Can the council realistically expect to influence other parties to contribute sufficiently to this outcome?
  • What are the adverse consequences or inequities of setting an unachievable objective?

The checklist for issues, objectives, policies and methods and checklists for RMA plan writers provide tools for the assessment and analysis of proposed objectives.

3) Identify alternative policies and methods

Policies are the course of action to be pursued to achieve or implement the objective (ie, the path to be followed to achieve a certain, specified, environmental outcome). An objective will commonly have several associated policies. See Writing Good Policies from the Writing Provisions for Regional and District Plans Guidance Note for more information on policies.

Methods are the means by which policies are implemented. While methods may be seen to be similar to a specifically worded policy, the purpose of a method is explanatory. Methods can be regulatory or non regulatory.

Regulatory methods will normally include rules in plans and conditions on resource consents, heritage protection orders, NES, enforcement and similar tools provided for within the RMA. Regulatory tools provided for in other statutes (such as the Biosecurity Act 1993, LGA, etc) will also be relevant. A rule is the only method required to be identified in a district plan.

Non-regulatory methods to achieve each objective include: research, monitoring, education, information and training, council services, incentives, voluntary agreements, land purchase, levying charges, and rules. These are not required to be included in a plan.

See Writing effective and enforceable rules, Methods (other than Rules) from the Writing Provisions for Regional and District Plans Guidance Note for more information on methods.

Section 32 does not explicitly require the consideration of alternative means. However, it does require that the evaluation shows that, having regard to effectiveness and efficiency, the proposed policies, rules, or other methods are the 'most appropriate '. This implies that some consideration of the effectiveness and efficiency of alternative provisions is required.

The first step in determining whether the proposed provisions are the "most appropriate" is to review a range of realistic alternatives. While it will generally not be possible or reasonable for all possible alternatives be identified, a range of obvious alternatives should be given due consideration.

Typically, the best approach is to assess a package of policies and methods together rather than as individual provisions. Section 32 calls for an evaluation of viable alternative approaches, and does not require a consideration of alternative ways of expressing the same general policy direction.

As a minimum, alternatives should include:

  • the provisions that the proposed policies and methods are designed to replace
  • the provisions/approach that any neighbouring authorities have already adopted
  • alternatives identified through any public consultation or submission process
  • any other provisions seriously considered during the plan development process (eg, alternatives included in any issues and options discussion document).

When identifying and considering alternative policies and methods you should:

  • be open-minded about the range of policies/methods. While not explicitly required, consider a wide range of alternatives to demonstrate that you are thinking 'outside the square '
  • start by identifying different types of methods, rather than approaches within each method
  • consider non-RMA methods
  • ensure any associated consultation asks for alternatives and risks to be identified.

The checklist for issues, objectives, policies and methods and Checklists for RMA plan writers provides tools for the assessment and analysis of proposed policies and methods.

4) Assess the effectiveness of the alternative policies and methods

Determining the 'most appropriate ' policies and methods requires a comparison of the effectiveness of alternatives.

Evaluating the effectiveness of policies and methods means asking which approach will best achieve the objective; or if multiple approaches would achieve the outcome, would do so most quickly or with most certainty, and at least cost with most benefits.

This requires an understanding of:

  • how the policies/methods will take effect
  • what needs to be done by whom and when
  • what the risks are
  • what factors might intercede to mean that the objective is not achieved.

Intervention logic (also known as programme logic) can be used as a principal means of undertaking such analysis, particularly in planning and evaluating programmes or other interventions. It is often described as a policy 's 'theory of action ' and provides a step-by-step description of how a policy intervention is intended to work to deliver the policy objective. Using intervention logic ensures the explicit disclosure of all the assumptions that are being made and all the intermediary steps needed for the policy to be effective.

Assessing the relative effectiveness may be undertaken by a combination of:

  • setting out the intervention logic of each alternative
  • determining which logic chain is most likely to deliver as expected
  • determining which has the greatest number of assumptions, risks and uncertainties.

This regional council example demonstrates how intervention logic can be used.

Once this has been done, it is often clear which alternative is most likely to be effective and which alternative has the greatest risks associated with it. The following checklist should also assist in determining the relative effectiveness of alternatives:

  • ask which of the approaches:
    • has the most realistic assumptions
    • has the least significant risks
    • is likely to have the best level of compliance and enforceability (for regulatory methods)
    • best and most directly targets the ultimate outcome
  • reject policies and methods that are not appropriate or identify circumstances when they are not appropriate
  • review the objective if no policy or method is appropriate.

For further discussion on intervention logic, see the regional council and unitary authority publication Evaluating Regional Policy Statements and Plans.

5) Assess the costs and benefits of the alternative policies and methods - efficiency

The most efficient policy / method will achieve either of the following objectives:

  • the greatest benefit with the least cost
  • the greatest 'amount of benefit ' (eg, highest level of amenity) relative to the level of cost, where the objective is not expressed as a fixed amount.

Analysing efficiency means:

  • identifying the various environmental costs and benefits of each alternative
  • identify the various social and economic costs and benefits of each alternative
  • identifying who/what will face the cost, or experience the benefit of each alternative
  • assessing the relative size of the costs and benefits of each alternative
  • identifying all assumptions and uncertainties clearly. (If there is uncertainty, state how critical it is, what has caused it, and what further information might reduce it.)

This analysis can be undertaken for each policy and method or, more feasibly, for particular 'packages ' of policies and methods that relate to a single objective. The latter can assist to keep the scale of the evaluation manageable. However, it is important to ensure that the evaluation does go beyond the consideration of an overall approach (such as zoning) to examine specific rules - particularly where these rules have the potential for significant costs and benefits.

Understanding costs and benefits

The cost and benefit analysis required as part of a s32 evaluation needs to be broad. It should not be limited to just those that fall on councils, and should include resource users, the community and the environment, and any other relevant parties. Normally a combination of social, economic and environmental costs, include:

Benefits will normally include:

The characterisations of costs and benefits differ for regional and district plan rules:

  • A regional rule that provides for an activity that would not otherwise be permitted may provide an economic benefit of some description (and potentially some level of environmental cost).
  • A district plan rule that provides for an activity often does so with the express or implied consequence of excluding other activities not so permitted. Such a rule therefore imposes an economic cost when compared to having no such rule and consequently, that all activities would be permitted. (This may not be the case when the effect of the rule is compared with the existing plan rule.)

The presumptions of s10-15 of the RMA need to be considered when determining what costs flow from regulation. The baseline for determining whether a cost or benefit arises also needs to be clearly set. In most cases, an existing rule will be the appropriate baseline where a new provision is proposed to replace it.

Assessing costs and benefits and establishing efficiency

Section 32 requires that the appropriateness of policies and methods be assessed having regard to their efficiency, rather than a more formal and prescribed Cost and Benefit Analysis (CBA).

It is often difficult to establish a monetary value for many environmental and social costs and benefits (such as effects on amenity and intrinsic values, landscape and heritage). It is theoretically possible to determine a monetary value for difficult-to-measure costs and benefits (using a variety of valuation techniques); but in practical terms such an approach is likely to be feasible for only a small number of interventions and/or a limited number of costs and benefits.

The disadvantages of undertaking a comprehensive monetisation of costs and benefits include that:

  • the cost to a council would be high
  • it would take too long given the size and nature of plans and
  • because of the limitations of many valuation methodologies, the results could add to uncertainty and may not form a robust basis for decision-making.

Therefore, a robust evaluation of efficiency should not be regarded as requiring the full and comprehensive monetisation of every cost and every benefit. An evaluation should include a comprehensive and transparent disclosure of the full range and likely scale of costs and benefits that are quantified where possible, though not necessarily monetised. For example, the size of the benefits (eg, the extent of wetland to be protected) should be given even if a dollar value cannot be placed on the value of that wetland. Where quantification is not possible, qualitative and subjective assessment of the scale of the cost and benefit should be provided.

In determining the level of costs, you should:

  • assess costs on an individual basis if they fall unevenly on individuals
  • estimate individual costs based on the number of properties affected if costs are shared
  • always identify the cost to each individual, and the total of those individual costs
  • not include costs related to regulation outside of the RMA (as can happen when there are multiple regulatory regimes applying to a particular issue)
  • count each cost once only - for example if you identify a cost for resource users, do not include it in council or community costs
  • include costs that are flow-on effects. For example, a cost to a resource user of lost production might have the flow-on effect to the community where the loss of production will have a multiplier effect through the local economy.

There are a range of non-monetary techniques for assessing costs and benefits, ranging from simple ranking through to complex scoring and weighting.

One way to measure a cost or benefit in non-monetary terms is to apply value in accordance with a simple rating scale such as, for example, -5 to +5. Consultation with resource users and the community may aid in determining the 'score ' given to different costs and benefits. Alternatively, the highly subjective nature of many of the costs and benefits can be acknowledged by simply rating them on a narrative 'low, medium, high and very high ' spectrum.

Having some costs and benefits monetised and some not is an acceptable approach. In such cases, the monetised values should provide a benchmark for the qualitative and subjective assessments also included. Such an evaluation needs to disclose how it would rate the monetised values, which then needs to be used to 'calibrate ' the subjective assessment.

As a general rule, potentially high economic and social costs will require in-depth analysis of the method 's impact, possibly using a detailed, and more highly monetised cost-benefit analysis. When the costs are likely to be high, the community will also expect a clear explanation - and quantification - of the method 's environmental benefits. The depth of analysis required will also be influenced by the issue 's importance, complexity, and degree of 'newness '. The depth of analysis should be commensurate with the scale of the proposal.

A matrix or table can be a useful approach to demonstrate and compare costs and benefits.

Use the checklist for issues, objectives, policies and methods and the checklist of methods for achieving the purpose of the RMA as tools for assessment and analysis.

6) Identify the risks of acting or not acting

The nature and scale of issues faced by councils will generally be clear. Previous experience and/or research and monitoring data could demonstrate that the issue to be addressed is real, and that its size and significance warrants the attention of proposed plan provisions.

However, in some cases the information will be conflicting, uncertain or simply inadequate to categorically demonstrate the scale and nature of the 'problem ' to be addressed. This may lead to debate about whether councils should do anything or adopt a 'wait and see ' approach.

In these situations the s32 evaluation must consider the risks of acting or not acting, or the 'symmetry ' of risk. For example, if there is low risk associated with acting but high risk associated with not acting, then taking action is clearly the sensible thing to do. The converse applies, which is known as 'asymmetric ' risk.

The concept of risk has two dimensions:

  • the probability of something adverse occurring
  • the consequence of it occurring.

Risk is usually expressed as 'probability times consequence ' and associated with a cost - usually a severe economic, social or environmental cost. Assessing the risk of acting or not acting means assessing the probability of a cost occurring and the size of that potential cost.

Given that by this stage there should be information on actual and potential costs, risk evaluation should involve:

  • determining just how certain and sufficient the information about each issue really is
  • identifying those provisions which relate to any issues about which there is uncertain or insufficient information
  • identifying the costs of the policies and methods proposed in relation to those issues
  • identifying the costs associated with the 'do nothing ' or 'status quo ' option
  • assessing the likelihood of those costs occurring with the provisions proposed and (separately) without the provisions proposed (ie, the cost of the 'do nothing ' option)
  • determining the symmetry of the risk.

The RMA requires that the symmetry of risk is taken into account rather than undertaking a highly quantified risk assessment. A simple methodology such as demonstrated in this example will normally be sufficient to demonstrate compliance with s32(4)(b) of the RMA.

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7) Deciding which policies and methods are the most appropriate

Choosing the most appropriate policies and methods to achieve the objective requires an overall assessment of their efficiency and effectiveness.

Methods for this overall assessment can include:

  • creating a matrix that records the effectiveness and efficiency of the policy and method or package of provisions as appropriate
  • undertaking a relative ranking of the effectiveness and efficiency of each policy and method where a number of policies and methods have been identified as being potentially suitable
  • using rating scores from 1 to 10 or ratings of high, medium or low.

Choosing the appropriate policy and method will be straightforward if:

  • one stands out as both highly efficient and highly effective
  • all of the policies and methods are similarly ranked, except that one obtains a higher ranking in one particular area, such as providing higher environmental benefits.

In less straightforward cases, the right balance between effectiveness and efficiency will depend on:

  • the significance of the desired environmental outcome
  • the level of risk
  • the amount of information available or its degree of uncertainty
  • the likelihood of the method achieving the desired results.

Effectiveness will have more weight than efficiency if:

  • the level of risk to the environment, due to failure, is high
  • the policy or method is uncertain
  • there is a lack of information.

Efficiency will have more weight than effectiveness if the level of risk is low.

8) Review the objectives

After completing the analysis of the costs and benefits of the proposed policies and methods you should:

  • return to the objectives to ensure that they are the most appropriate way to achieve the purpose of the RMA, using information gained from the analysis of policies and methods
  • review any objectives that are no longer appropriate
  • ensure the policies and methods still achieve any revised or new objective.

Applying section 32 throughout the plan development process

Section 32 applies to the entire policy and plan development and change process from issue identification to decision release. Therefore, s32 is applicable:

A section 32 evaluation should be an iterative process, requiring a regular review of earlier steps and conclusions when necessary.

Applying section 32 at notification

Before deciding to notify proposed provisions, councils must be satisfied that the requirements of s32 have been met. The s32 record (report) must also be publicly available at the time of notification.

Applying section 32 after submissions are received

The officer 's report on submissions must state whether the submissions:

  • contain any credible challenges to the provisions
  • suggest new policies and methods
  • provide additional information on the appropriateness of proposed provisions, including effectiveness.

The officer 's report must also:

  • include a record of any additional work done by the council after submissions were received
  • provide reasons for recommended amendments to proposed plan provisions
  • explain why other submissions did not lead to changes.

The Council's written decisions on submissions must state the issues discussed, and cover the evaluation of alternatives.

Applying section 32 at a hearing and in the decision

Irrespective of whether a hearing is held on a proposed policy statement or plan, the council has an obligation to make a further evaluation under s32(2)(a) as part of the decision-making process. This evaluation should include:

  • the reasons for accepting or rejecting any submissions
  • any consequential alterations arising from submissions
  • any other relevant matters raised in submissions.

In its decision, the council must satisfy itself that the most appropriate methods are being used, after having heard the evidence at the hearing. Most councils will produce s32 material to support any plan appeals to the Environment Court.

Challenge to the section 32 process

Section 32A provides that any challenges to compliance with the requirements of s32 and to an objective, policy, rule or other method must be made within the context of a submission/further submission on a proposed plan.

Monitoring and post-implementation evaluation

The s32 analysis should be designed for and provide the basis upon which subsequent (post implementation) evaluation is undertaken.

Using intervention logic in a s32 evaluation can assist to set out:

  • how policy makers expect policies and methods to be implemented
  • what costs and benefits are projected
  • the assumptions upon which the evaluation conclusions were reached.

This information is critical for subsequently determining whether provisions have been effective and efficient. The evaluator will want to ask questions such as:

  • Have the assumptions held true?
  • Have the costs and benefits been as anticipated?
  • Did we get it right or not?

For more information on monitoring, refer to the policy and plan effectiveness monitoring guidance note.

The importance of consultation

Schedule 1 of the RMA outlines the requirements for consultation in the plan development process. Consultation is important to a s32 analysis as it assists to:

  • identify and assess issues, objectives, policies, and methods
  • gather information from, and, understand the needs of resource users
  • test the s32 analysis against community views and aspirations.

The views of stakeholders should be sought to assist in determining the appropriateness, costs and benefits of proposed provisions.

You should consult early on in the process and consult widely with the relevant stakeholders and wider community. This could include:

  • raising key s32 questions, such as the costs and benefits of alternative methods
  • including a 'relevance to s32' section in each consultation record. For example annotate which part(s) of the s32 record that each individual or group 's comments/views relate to in a consultation database
  • inviting comment on draft plan provisions before notifying them, either through public or invited comment
  • testing the s32 analysis against the community feedback.

Consultation should help establish a mandate for the final plan provisions. For more information on consultation, refer to the consultation process guidance note.

Managing the section 32 process

The s32 process must be managed so that it is coordinated with each stage of the plan or policy statement review or change process. For full plan or policy statement reviews or larger plan changes, it is useful to think of the s32 analysis process as a project that runs parallel to and integral to plan preparation.

A website can assist to keep the public informed of the s32 process. However, it must be well maintained, with relevant documents easily accessible and must be kept up to date. It may be useful to have one person responsible for keeping the website current and user friendly, so that it can be used as an effective communicative tool.

Determining roles and responsibilities

Those responsible for making decisions on the plan provisions are also responsible for ensuring that the Council's duties under s32 are properly discharged. They must be satisfied that s32 requirements have been met when they decide to notify, and when they decide on plan provisions. The decision itself must be made part of the overall s32 process. They are also responsible for ensuring that a s32 record is publicly available when provisions are notified.

Council staff are responsible for managing the s32 process, drafting provisions after consultation and analysis, and providing information and quality policy advice to decision-makers. As part of their responsibilities to decision-makers, council staff should consider:

  • running training or refresher courses for councillors to ensure they remain well informed about s32 requirements
  • running joint councillor/staff workshops to deal with important matters such as identifying and assessing issues, objectives, policies, and methods
  • ensuring that councillors approve issues and objectives early, and remain well informed during the rest of analysis.

Appoint a section 32 champion

It can be useful to appoint a s32 champion to lead and monitor the s32 process for a full plan or policy statements review. The key skill they should demonstrate is rigorous thinking. They should ensure that:

  • financial and staff resources are available for the process
  • work loads are prioritised
  • councillors and senior managers are briefed regularly
  • outputs are achieved within budget and on time
  • there is full and open communication among project team members
  • provisions are confirmed and drafted after the s32 process.

Create a 'project brief '

A good project brief for the s32 process will:

  • scope the project first
  • identify the s32 'champion '
  • identify who is responsible for specific tasks such as recording and managing information, carrying out the analysis and assessment of methods, and producing the s32 report
  • establish the project brief and individual work briefs at an initial team meeting
  • treat the s32 process as a project that runs parallel with plan development
  • state the s32 process objectives, reflecting RMA requirements
  • identify key stakeholders and consultation requirements
  • identify when checks must be made to ensure that s32 requirements have been met
  • decide early what information will be recorded, and how
  • use progress reports to ensure timeframes and objectives are met.

The section 32 report

A s32 report summarises the process of a s32 analysis from issue identification to notification. An effective s32 report should:

  • identify all parties involved
  • summarise the evaluation
  • demonstrate the evaluation undertaken in a simple and clear manner, such as through the use of assessment matrices
  • cross-reference to more detailed background papers and evaluations
  • give reasons for the evaluation
  • encourage more focused submissions
  • for a private plan change, be effective so that the council adopts the plan change
  • assist in later monitoring for appropriateness.

The scale of the s32 report should be relative to the scale and significance of the proposed provisions. Ultimately, the report must answer the question: "Why is this provision in the plan?"

Some key ways to producing a good s32 report include:

  • compiling information throughout the s32 process
  • creating a specific set of s32 files and an identification system for documents
  • making sure reasons for the information kept are included
  • making one person responsible for collecting and filing s32 information
  • making one person responsible for keeping a diary of critical stages in the process
  • making sure the summary report is available when provisions are notified
  • keeping and maintaining records of all discussion and policy papers meetings and consultation summaries of submissions, officers' reports, and council decisions and reasons
  • producing the report in several volumes if many issues are involved.