WHAT YOU NEED TO KNOW ABOUT THE PROPOSED CHANGES TO DESIGNATIONS
WHEN "WATER" MEANS MORE THAN YOU THINK
THE FINAL PIECE OF THE ENFORCEMENT REGIME COMES INTO FOCUS
MEET THE TEAM: Brandon Watts
What you need to know about the proposed changes to designations
In this article, Brandon and Cordelia outline the main features of designations that will stay the same, and the five key changes the Planning Bill ushers in and what they mean in practice.
The Planning Bill retains the key features of the RMAās designation system but makes it easier for designating authorities to secure strategic projects ahead of detailed design. Outlined below are the key features that remain unchanged, followed by the five central changes the Planning Bill introduces and their practical implications.
Designations are a longstanding feature of planning law, enabling land to be identified for public works. The two fundamental characteristics of designations are that they free a public work from the planning controls that would ordinarily apply, and protect it against the encroachment of incompatible activities.
The Planning Bill proposes retaining designations as a tool that can be used by those entrusted to undertake public works: government ministers, local authorities and certain infrastructure providers. While the Planning Bill broadens the definition of āinfrastructureā, it only provides designation powers to ācore infrastructure operatorsā, a narrower category that is essentially the same as ānetwork utility operatorsā under the RMA.
Under the RMA, designations only exempted a public work from compliance with district plan requirements, not regional plan requirements. This essentially remains the same under the proposed reforms, but the dividing line follows the proposed legislative split rather than the split between district and regional plans: designations can allow activities regulated under the Planning Bill, but not under the Natural Environment Bill (NEB). A related and interesting result of the proposed legislative split is that a proposed designation can only be assessed on the basis of its effects āon the built environmentā, as that is defined in the Planning Bill. While this reflects the limited scope of the Planning Bill and surfaces in many other contexts that require effects to be assessed, we anticipate extensive litigation will arise around this conceptual boundary.
The Planning Bill also retains the RMAās basic designation process. A requiring authority, now re-named as a ādesignating authorityā, gives notice to the territorial authority (TA), and the TA makes a notification decision, potentially followed by submissions and a hearing. The TA then makes a recommendation to the designating authority, and the designating authority itself makes the final decision, subject to appeal rights to the Environment Court.
However, the Planning Bill proposes five significant changes:
1. DESIGNATIONS IN SPATIAL PLANS
Spatial plans are a key feature of the proposed RMA reforms. Spatial plans will provide regional direction about what activities should be enabled in what locations. The Planning Act enables designations to be included in spatial plans. By comparison, the RMA does not require regional spatial planning and has no process for including designations in regional policy statements or regional plans. The opportunity for designating authorities to secure designations at the spatial plan level will be significant, as it will trump the lower-level planning processes.
The process involves a regionās special planning committee (SPC) inviting designating authorities to either request inclusion of a designation in the draft spatial plan, or to provide an indicative location that can be identified in the spatial plan. The criteria for inclusion of designations in a spatial plan are projects of national or regional significance, or projects with regionally significant benefits, or projects that cross TA boundaries. If the SPC declines to include a designation with the draft spatial plan the designating authority can appeal to the new Planning Tribunal. Assuming a designation is included in the draft spatial plan, the independent hearing panel (IHP) tasked with hearing submissions will make a recommendation to the designating authority, with the designating authority making the final decision, subject to Environment Court appeals.
Even if a designation is not included in a spatial plan, the Planning Bill provides that consideration must be given to identifying the indicative location of the designation in the spatial plan. This can dispense with the need for an assessment of the strategic need for a project when it is eventually designated.
2. SHIFT FROM ASSESSING ALTERNATIVES TO ASSESSING STRATEGIC NEEDS
One of the banes of requiring authorities under the RMA is having to demonstrate that āadequate consideration has been given to any alternative sites, routes, or methods of undertaking the workā if significant effects will result, or if designating another partyās land. Uncertainty about whether the effects of project will meet the significance threshold drives requiring authorities towards preparing such assessments in the majority of cases. In practice this results in the production of complex and expensive assessments of alternatives, which often struggle to juggle the competing priorities of the RMA and other local government legislation.
The Planning Bill replaces both the RMAās requirement to assess alternatives and its requirement to demonstrate the designation is āreasonably necessaryā with a new requirement for an āassessment of the strategic need for the project in the location of the designation footprintā. The Planning Bill expressly states that this assessment does not require āan assessment of any alternative sites, routes, or methods of undertaking the project; or consider[ation of] whether the project could have been better provided in any alternative locationā.
We expect that in practice, the strategic need for many designations will have been established at the spatial planning stage, and will be taken as given in lower-level plans and designation processes.
3. EMPHASIS ON CONSTRUCTION PROJECT PLANS IN ORDER TO SIMPLIFY DESIGNATIONS
If you look at older designations, they frequently state the purpose of the designation and contain a few, if any conditions. They resemble a spot-zoning more than a resource consent. By contrast, newer designations typically look much more like a resource consent, with many pages of detailed conditions. The Planning Bill is clearly trying to reverse this trend, which we support. Designations should be able to be approved at a high level, for example to protect future infrastructure corridors, without needing to delve into details that are unnecessary for making that high-level decision.
This intention is already evident in the RMA, which provides the outline plan process for the designating authority and the TA to work through matters of detail. However, in practice, RMA decision-makersā insatiable appetite for greater certainty about the effects of a proposed designation (driven by the RMAās decision-making framework, to be fair) have resulted in designations needing to provide highly detailed proposals in order to progress and secure approval.
The Planning Bill sees the re-prioritisation of the outline plan process, now renamed a āconstruction project planā (CPP) as the answer to this drift. For example, when a TA is making its recommendation about a proposed designation, it is forbidden from having regard to any non-significant adverse effects unless it considers that effect cannot appropriately be managed through a CPP. Further, any effects to which regard
can be given may only be subject to designation conditions if they are āno more onerous than necessaryā and do ānot relate to a matter of detail that would be more appropriately addressed through a [CPP]ā.
4. NEW EFFECTS THRESHOLD
The Planning Bill expressly states that when a TA is making a recommendation about a designation, it is to have regard to any positive effects of confirming the designation, and any significant adverse effects on the built environment, but no other adverse effects unless the TA considers those effects cannot be appropriately managed through a CPP. The general task of avoiding, minimising or remedying adverse effects on the built environment is left to CPPs.
The Planning Bill also shifts the effects threshold for notification of designations. Under the RMA limited notification (renamed ātargetedā notification by the Planning Bill) had to be given to any āaffected personā, defined as somebody for whom the effects of the proposal would be at least minor. Under the Planning Bill targeted notification only needs to be provided to someone if the project will have more than minor adverse effects on them.
5. NEW PROCESS FOR APPLYING TO DESIGNATING AUTHORITIES FOR PERMISSION TO DO SOMETHING THAT MIGHT IMPACT A PUBLIC WORK
Under both the RMA and the Planning Bill, nobody can do anything to land that is subject to a designation if it would prevent or hinder the project to which the designation relates, unless the designating authority expressly provides permission. The Planning Bill provides a formal process for seeking such permission, which did not exist under the RMA.
A person may write to a designating authority requesting its permission, after which the designating authority has 40 working days to grant (with or without conditions) or refuse permission. If the designating authority fails to respond in time, the application must be treated as if it were granted without conditions. Designating authorities will need to be very vigilant about responding within this timeframe as they have no ability to reverse such a deemed approval. It appears that the only remedy available would be to apply to the Environment Court for waiver of a time period specified in the legislation.
On the other hand, if the designating authority declines approval, or imposes conditions, the requestor has a right of objection to the new planning tribunal.
GET IN TOUCH
The reform process is being closely followed by our Local Government team. If you would like to discuss any of the changes implemented through the Planning Bill, or to discuss how the broader RMA reforms may influence you, please contact Simon Rickit, Brandon Watts or Cordelia Woodhouse
The final piece of the enforcement regime comes into focus
In this article, David outlines the key enforcement reforms in the Planning and Natural Environmental Bills, including new remedies, local authority duties, and streamlined court processes.
The MC Local Government team is closely following the Planning and Natural Environmental Bills (Replacement Bills), which passed their first reading in December 2025. This latest phase of reforms to the Resource Management Act 1991 (RMA) contains significant developments in the environmental enforcement regime, which Council legal and compliance teams will need to be across.
The stated objective of the new enforcement toolkit is to retain and strengthen the core compliance and enforcement components of the RMA. Broadly, there are three aspects of the enforcement changes that will be of interest to local authorities:
ā¢ What are the new enforcement remedies?
ā¢ What are the new duties on local authorities in relation to enforcement functions?
ā¢ What changes will be made to existing enforcement processes?
NEW ENFORCEMENT REMEDIES
In essence, the Replacement Bills have re-adopted the enhanced enforcement remedies from the previous RMA reform effort (the repealed Natural and Built Environment Act 2023 (NBEA)). The expanded toolkit will include:
ā¢ enforceable undertakings
ā¢ pecuniary penalties
ā¢ monetary benefit orders and
ā¢ adverse publicity orders
An enforceable undertaking is an out-of-court agreement between the local authority and the person alleged to have breached the Act, in lieu of other enforcement action being taken. It requires the defendant to pay compensation, or take actions to avoid, minimise or remedy actual or likely adverse effects. If the defendant reneges, all bets are off, and the local authority is free to prosecute or pursue other enforcement remedies.
The remaining three remedies (pecuniary penalties, monetary benefit orders, and adverse publicity orders) can be sought by applying for enforcement orders in the Environment Court, or as a supplementary remedy to a sentencing process in the District Court. Unlike a prosecution, these civil remedies do
not result in a conviction, and only require the Council to prove the breach to the lower civil standard of proof (more likely than not).
Pecuniary penalty proceedings are akin to prosecutions in that the primary purpose is deterrence, similar provisions dealing with agency, limitation and defences apply, and significant financial penalties are engaged if the defendant is found liable. The Court has discretion to increase penalties for companies beyond the $10 million maximum, if satisfied that the offending produced a commercial gain. A potential drawback for local authorities is that the collection of fines imposed under a pecuniary penalty may require additional costs for civil debt recovery action, assuming the penalties are not collected by the Ministry of Justice alongside criminal fines.
Monetary benefit orders can be sought against a defendant to claw back any financial benefits derived by the person through the commission of an offence. Adverse publicity orders require the defendant to incur the costs of publicising their non-compliance, any impacts on human health/environment and penalties imposed (if applicable). These orders can be sought through an enforcement order process or as part of sentence following a successful prosecution.
NEW DUTIES ON ENFORCEMENT AGENTS
The Replacement Bills require local authorities to develop a Compliance and Enforcement Strategy in consultation with iwi authorities and groups that represent hapu within the region. The Strategy must take into account relevant Treaty settlements, agreements with local iwi, hapu or MÄori, and must satisfy āprescribed criteriaā, which presumably will be established through regulations. Although some local authorities have already made meaningful progress in engaging with local MÄori on enforcement matters, many have a lot of work to do. This reform process is a further signal
enforcement results (including any enforceable undertakings). This new obligation is likely to shine a light on local authorities who undertake minimal compliance action, and allow for greater comparison between local authority performance.
CHANGES TO EXISTING PROCESSES
One notable change to existing processes is the removal of the bright line that exists between the enforcement jurisdiction of the Environment Court and the District Court. Under the current system, prosecutions in the District Court dealing with the same subject matter as an enforcement order proceeding in the Environment Court cannot be heard together by the same Judge. In practice, this can result in dual tracks, and less efficient use of Court and party resources. The Replacement Bills allow for proceedings such as an abatement notice appeal or enforcement order matter to be transferred to the District Court to be heard together with a related prosecution.
The Replacement Bills empower Environment Judges to issue a declaration on their own initiative during any proceeding, without receiving an application from a party to the proceeding. This could lead to declarations at any time during a range of Court processes, including during a prosecution or civil enforcement proceeding. The reforms also attempt to relieve pressure on the Court, by allowing Environment Commissioners to preside over abatement notice appeals and stay applications.
The reforms include sensible clarifications to investigatory powers, which will be welcomed by local authorities. If the reforms are adopted, Police officers will only need to attend the initial entry phase of a search warrant, and can then be released by the enforcement officer. This reduces the burden
limited in scope to the preparation of a policy statement or plan.
GET IN TOUCH
There is no better time to get in touch if you need assistance with understanding the scope of reforms and how they may impact your local authority. Reach out to David Collins if you require any advice on how to get ready for the Replacement Bills.
When "water" means more than
you
think:
Why your professional indemnity cover might not be there when you need it
In this article, Wade and Lucy explain how insurers are broadening the definition of "water-related" defects in PI policies, potentially leaving councils without cover for claims they expected to be protected against.
You've checked the floor levels. You've applied the required freeboard above the predicted flood zone. The building won't be inundated in a 1-in-50-year event ā you've met the Building Code requirements. But when the claim arrives three years later, your insurer declines cover. Their reason? It's a "water-related defect" ā and therefore excluded from your council's professional indemnity policy.
Welcome to the new reality of professional indemnity (PI) insurance for local authorities.
At the core of the NAF are four key pillars, each supported by targeted actions designed to strengthen resilience to climate change:
ā¢ Risks and response information sharing
ā¢ Roles and responsibilities
ā¢ Investment in risk reduction
ā¢ Cost-sharing pre and post events
THE PROBLEM ISN'T WEATHER-TIGHTNESS ANYMORE
After the leaky building crisis, councils became familiar with PI exclusions for water penetration ā the classic monolithic cladding failures, inadequate flashings, moisture ingress through the building envelope. We all knew what "water-related" meant. Or at least, we thought we did.
That's changing.
Insurers are now interpreting water-related exclusions far more broadly. It's no longer just about leaky buildings. They're arguing that defects connected to flooding, surface water management, ground conditions affected by water, and site inundation risk all fall within the same exclusion clauses.
And here's the catch: even when you've done everything right.
THE PROBLEM ISN'T WEATHER-TIGHTNESS ANYMORE
Think about your standard workflow. A dwelling is being constructed in an area with flood hazard overlay. You've checked the plans ā floor levels look appropriate, freeboard is accounted for. The building progresses.
Then the surveyor's certificate gets delayed. It happens all the time. The homeowner is pressuring you to pass the inspection so they can keep things moving. You make a pragmatic call and pass the inspection subject to receiving the documentation later.
The certificate eventually arrives. But three years down the track, there's a claim. Maybe the surveyor got the levels wrong. Maybe the finished floor is 50mm lower than it should be. The building still complies with the Building Code for the design event. There's been no flooding. But there's a defect.
Suddenly, a pragmatic decision you made to help a homeowner has left your council ā and your ratepayers ā exposed to a claim that could run into six or seven figures.
YOU'RE NOT SET UP FOR THIS RISK
Here's the uncomfortable truth: councils aren't generally equipped to independently verify finished floor levels. You rely on surveyors. Just like you rely on producer statements for ground conditions, geotechnical suitability, foundation design. That reliance is not just common practice, it's necessary.
But if insurers are going to take an increasingly broad view of what counts as "water-related," then that reliance becomes much riskier. What was once a manageable operational issue ātrusting qualified professionals and keeping projects moving āmay now carry significant financial exposure.
And it's not just floor levels. Any defect touching on surface water management, site drainage, or ground conditions affected by moisture could potentially be caught. The boundaries aren't clear yet. The courts haven't ruled on this
WHAT YOU CAN DO
This doesn't mean you should grind every inspection to a halt or demand every piece of paper before you'll make a decision. That's not realistic, and it's not what your communities need.
But it does mean being more strategic about where you take risk:
ā¢ Understand the precise scope of your PI policy exclusions. The water-related exclusions in your council's policy matter more now than they did five years ago ā talk to your risk or finance team if you're unclear on what they actually say.
ā¢ Ensure your inspection and documentation practices are defensible and well-recorded. If you're passing an inspection subject to receiving documentation later, make sure you've recorded why that decision was reasonable in the circumstances.
ā¢ Recognise where reliance on third-party certification is critical. Be explicit about when you're relying on surveyors, engineers, or producer statements ā particularly for anything connected to flooding, ground conditions, or water management.
ā¢ Appreciate that insurer interpretations may differ from long-held sector assumptions. What you understood "water-related" to mean when your policy was negotiated may not be what your insurer argues it means when a claim is made.
THE BOUNDARIES AREN'T SETTLED YET
The courts will eventually clarify where the line sits between traditional weather-tightness exclusions and this broader interpretation insurers are now advancing. But that could take years, and test cases are expensive.
they used to.
Climate-related risks arenāt going away. Flooding is becoming more common. And as it does, "water" in your insurance policy is going to mean more than it once did.
The question is whether you're ready for that shift, or whether you'll only find out what your policy really covers when it's too late to do anything about it.
GET IN TOUCH
If you have questions about your council's PI cover or want to discuss how these issues apply to your specific inspection practices, contact Wade Morris and Lucy Wesley-Smith.
Meet the team: Brandon Watts
Each month weāll spotlight a member of the Meredith Connell team, so you can get to know the people behind our Local Government practice.
This month, we introduce Brandon Watts, a Senior Associate in the Local Government team.
Brandon's career in environmental law began on the other side of the bench. Before entering private practice, he worked as a Hearings Manager in the Environment Court, where he worked for primarily for Judge Newhook and the late Judge Bollard.
"Working in the Court gave me invaluable insight into how different judges and commissioners approach environmental law. It also helped me identify the practitioners whose work I most admired ā and ultimately shaped where I wanted to take my own career."
That experience led Brandon to Cowper Campbell in 2005, a boutique environmental law firm where he spent eight years. His most memorable work was on large-scale renewable energy projects: hydro, windfarms and geothermal developments. The work built his expertise in RMA matters and complex consenting and planning processes ā expertise that has become a cornerstone of his practice.
Since joining Meredith Connell in 2013, Brandon's work has expanded to cover the full spectrum of environmental and local government law, including significant experience in environmental compliance and enforcement matters. His depth of knowledge has made him a go-to resource for the team on technical environmental matters and precedent-setting cases.
"Councils are trying to do a great job for their communities, but are under a great deal of pressure from all sides. I see my job as not just providing correct advice about the law, but using my experience to bring pragmatic and strategic thinking to the table.ā
His institutional knowledge makes a real difference when his clients are dealing with novel or high-stakes matters.
Now firmly established as a senior practitioner, Brandon continues to bring both technical precision and strategic thinking to the environmental challenges facing local government in Aotearoa.
Outside work, Brandon is an avid camper and hiker. The Coromandel is a frequent escape ā a reminder of why the work matters.
GET IN TOUCH
Brandon is based in our Auckland office, supporting various local government clients across New Zealand.
If you have any questions, please donāt hesitate to reach out to Brandon Watts