The appellant, Trans-Tasman Resources Ltd (TTR), proposed to mine iron sands in a 66 km² area of the seabed in New Zealand’s Exclusive Economic Zone (EEZ), offshore from Taranaki. TTR held a mining permit issued under the Crown Minerals Act 1991 in respect of its proposed seabed mining activities. In order to carry out those activities, TTR also required marine consents and marine discharge consents under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (the Act).

In August 2017, TTR was granted marine consents and marine discharge consents by a Decision-Making Committee (DMC) appointed by the Environmental Protection Authority (the EPA). The four-person DMC was equally divided on whether the consents should be granted: they were granted as a result of the casting vote of the DMC Chair. The consents permitted TTR to extract up to 50 million mt of seabed material per annum, and to process that material on an Integrated Mining Vessel (IMV). Some 10 per cent of the extracted seabed material would be retained to be further processed into iron ore concentrate. The remaining material would be returned to the seabed. The 'plume' of suspended sediment that would result from this discharge from the IMV would amount to a discharge of harmful substances for the purposes of the Act, in respect of which TTR required a marine discharge consent. The likely environmental effects of the sediment plume were a central focus of the DMC's assessment of TTR’s application. Other significant environmental effects would include the direct effect of mining on the seabed floor and benthos in the mining area, and the effect on marine mammals and other fauna of the noise of the mining activities.

The first respondents successfully challenged the DMC decision in the High Court as wrong in law: see Taranaki-Whanganui Conservation Board v Environmental Protection Authority [2018] NZHC 2217, [2019] NZRMA 64 (CMI374). The Court of Appeal dismissed the appellant’s appeal, upholding the High Court's decision to quash the decision of the DMC and refer the matter back for reconsideration: see Trans-Tasman Resources Ltd v Taranaki-Whanganui Conservation Board [2020] NZCA 86 (CMI1599). The appellant was granted leave to appeal to the Supreme Court on the issue of whether the Court of Appeal was correct to dismiss the appeal.

Held: The appeal is dismissed. Although differing on the correct approach to interpreting s 10(1) of the Act, the Supreme Court is agreed that the Court of Appeal was correct to uphold the High Court's decision to quash the DMC’s decision. A majority consider that the matter should be referred back to the DMC for reconsideration.

Per William Young, Ellen France JJ: Section 10(1) of the Act provides as follows:

The purpose of this Act is -

(a) to promote the sustainable management of the natural resources of the exclusive economic zone and the continental shelf; and

(b) in relation to the exclusive economic zone, the continental shelf, and the waters above the continental shelf beyond the outer limits of the exclusive economic zone, to protect the environment from pollution by regulating or prohibiting the discharge of harmful substances and the dumping or incineration of waste or other matter.

Section 10(3) of the Act requires decision-makers to assess specific factors set out in s 59 of the Act. An overall assessment of the s 59 factors was required in this case, but the DMC also needed to address those factors with both s 10(1) purposes in mind. The DMC's approach was to focus on the s 59 factors, albeit acknowledging the need to achieve the purpose of the Act. The DMC undertook what it described as an 'integrated assessment', which worked through those factors in turn. However, it is fair to say, as the Court of Appeal did, that this assessment came to a 'somewhat abrupt end', with no clear indication of the test applied in coming to the conclusion to grant the consents. Further, the DMC took the view that it was not possible to deal with the applications for marine consents separately from the applications for marine discharges because they were linked. That may have been a practical approach to take, but the risk in doing so was that the s 10(1)(b) purpose was overlooked. It appears that this occurred, eg, in relation to environmentally sensitive areas.

Section 11 of the Act provides that it 'continues or enables the implementation of New Zealand’s obligations under various international conventions relating to the marine environment'. Section 11 provides that these Conventions include the United Nations Convention on the Law of the Sea 1982 (UNCLOS); the Convention on Biological Diversity 1992; the International Convention for the Prevention of Pollution from Ships (MARPOL); the Convention on the Prevention of Marine Pollution by Dumping Wastes and Other Matter (the London Convention), and the 1996 Protocol to the London Convention.

UNCLOS applies to activities in the EEZ. Article 55 defines the EEZ and subjects it to the 'specific legal regime' in Pt V of the Convention. Article 56.1.a provides that a coastal State has 'sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living' in the EEZ. Article 56.1.b.iii states that the coastal State has jurisdiction, as provided for in the relevant provisions of the LOSC, with regard to 'the protection and preservation of the marine environment'.

Part XII of UNCLOS deals with the 'protection and preservation of the marine environment'. The '[g]eneral obligation' is set out in art 192 of UNCLOS, under which States 'have the obligation to protect and preserve the marine environment'. Article 193, which provides that 'States have the sovereign right to exploit their natural resources pursuant to their environmental policies and in accordance with their duty to protect and preserve the marine environment', is also relevant. Reference should also be made to art 194, which sets out obligations in relation to measures to prevent, reduce and control pollution of the marine environment. Under art 194.1, States Parties are required to take 'all measures consistent with this Convention that are necessary to prevent, reduce and control pollution of the marine environment from any source, using for this purpose the best practicable means at their disposal and in accordance with their capabilities, and they shall endeavour to harmonize their policies in this connection'. Art 194.3 provides that the measures taken need to deal with all sources of pollution of the marine environment. The measures are to include, among other things, 'those designed to minimize to the fullest possible extent' pollution from various sources, including pollution from seabed activities subject to national jurisdiction.

Finally, art 208.1 of UNCLOS provides for coastal States to 'adopt laws and regulations to prevent, reduce and control pollution of the marine environment arising from or in connection with sea-bed activities subject to their jurisdiction'. Under art 208.3, the national legislation and regulations in this respect are to be 'no less effective' than international rules. Unlike the position for dumping, it seems that international rules on seabed pollution subject to national jurisdiction are not commonplace. The case law and commentary on arts 192-194 of UNCLOS suggest that what is envisaged is a balance between environmental protection and preservation (art 192), and the economic development of resources (art 193), but that the balance is tilted towards environmental protection. That environmental protection has priority over economic development is apparent in the wording of art 193, which provides that States can exploit resources 'in accordance with' their duty to protect and preserve the environment. That something less than absolute protection is envisaged is also reflected in the characterisation of the art 194.1 obligation as one of 'due diligence' rather than strict liability, given the leeway in art 194.1 for States to prevent, reduce and control pollution 'using the best practicable means at their disposal and in accordance with their capabilities'. Further, the International Tribunal for the Law of the Sea (ITLOS) in Responsibilities and Obligations of States Sponsoring Persons and Entities with Respect to Activities in the Area (Advisory Opinion) [2011] ITLOS Reports 10 [117] has said that the obligation of due diligence is a variable standard that changes over time and in relation to the risks, with the standard of due diligence being more severe for riskier activities.

The Act has been enacted with the purpose of giving effect to New Zealand’s international obligations, but has used language which differs from the international texts. In such cases, the legislative purpose was that decision-makers would apply the Act rather than the international text, but resort can be had to the relevant international instruments to clarify the meaning of the Act. Here, neither UNCLOS nor the Convention on Biological Diversity imposes absolute requirements on States Parties to these Conventions. They do nonetheless provide support for the proposition that s 10(1)(b) of the Act imposes a heightened threshold in favour of environmental protection.

The Court of Appeal concluded that the relevant international law instruments (including UNCLOS) do not need to be taken into account separately as 'any other applicable law' under s 59(2)(l) of the Act, given they are considered under s 11. The Court of Appeal said that a separate reference to these instruments as 'applicable law' under s 59(2)(l) 'would not add anything of substance and would result in duplication of analysis and unnecessary complexity'. Some of the first respondents submit that this was an error. This submission is advanced 'for completeness' and can be dismissed shortly. Essentially, the Court of Appeal's analysis of this point is consistent with the statutory scheme and with the approach taken by this Court in Helu v Immigration and Protection Tribunal [2015] NZSC 28, [2016] 1 NZLR 298. There is no need, as TTR submits, to 'strain' the statutory language to require international instruments to be considered again under s 59(2)(l) of the Act.

When all of these features of the statutory scheme are considered, in disagreement with the majority, we do not consider that it would be correct to describe s 10(1)(b) of the Act as creating an environmental bottom line. Harm, even material harm, is not automatically decisive. The ongoing relevance of all but one of the considerations listed in s 59(2) of the Act to marine discharge applications is the strongest pointer against that. But the addition of s 10(1)(b) with its sole focus on protection must be given effect. That is likely to mean that the s 59 balancing exercise may well be tilted in favour of environmental factors, but that is a decision that will need to be made on a case-by-case basis, having considered all of the relevant factors.

Per Glazebrook J (Williams J concurring): Section 10 of the Act provides an overarching framework for decision-making under the Act. This means that s 10(1)(b), which applies to marine discharges and dumping, creates an environmental bottom line in the sense that, if the environment cannot be protected from material harm through regulation, the discharge or dumping activity must be prohibited. The assessment of whether there is material harm requires qualitative, temporal, quantitative, and spatial aspects to be weighed. The s 10(1)(b) requirement is cumulative on the requirement in s 10(1)(a) (which applies to all consent applications) to achieve sustainable management. The operative force of s 10(1) means that the relevant factors in s 59 of the Act must be weighed by the decision-maker in a way that achieves both the s 10(1)(a) and s 10(1)(b) purposes. However, the bottom line in s 10(1)(b) does not mean applicants for discharge consents are limited to showing there is no material harm. Rather, they may also accept conditions that avoid material harm, mitigate the effects of pollution so that harm will not be material, or remedy it so that, taking into account the whole period of harm, overall the harm is not material.

To meet the bottom line, remediation will have to occur within a reasonable time in the circumstances of the case and, in particular, in light of the nature of the harm to the environment, the length of time that harm subsists (that is, the total duration of projected harm until remediation occurs), existing interests, and human health. All else being equal, economic benefit considerations to New Zealand may also have the potential to affect the decision-maker’s approach to remediation timeframes, but only at the margins.

Accordingly, decision-makers must follow a three-step test when assessing applications for marine discharge and dumping consents under the Act:

(a) Is the decision-maker satisfied that there will be no material harm caused by the discharge or dumping? If yes, then step (c) must be undertaken. If not, then step (b) must be undertaken.

(b) Is the decision-maker satisfied that conditions can be imposed that mean: (i) material harm will be avoided; (ii) any harm will be mitigated so that the harm is no longer material; or (iii) any harm will be remedied within a reasonable timeframe so that, taking into account the whole period harm subsists, overall the harm is not material? If not, the consent must be declined. If yes, then step (c) must be undertaken.

(c) If (a) or (b) is answered in the affirmative, the decision-maker should perform a balancing exercise taking into account all the relevant factors under s 59, in light of s 10(1)(a), to determine whether the consent should be granted.

In accordance with s 11 of the Act, art 192 of UNCLOS provides that 'States have the obligation to protect and preserve the marine environment'. Article 194 imposes an obligation on States to use the 'best practicable means' to 'prevent, reduce and control pollution of the marine environment'. It is true that art 193 allows the exploitation of natural resources, but it also provides that this must accord with the duty to protect and preserve the marine environment. UNCLOS is thus consistent with the bottom-line approach of protection from material harm in s 10(1)(b).

Per Winkelmann CJ: Glazebrook J, with whom Williams J agrees, says that, all else being equal, economic benefit considerations to New Zealand may have the potential to affect the decision-maker’s approach to remediation timeframes in respect of discharges, albeit only at the margins. I agree that economic benefit will be relevant in the decision to grant a consent, where the harm the discharge causes the environment is assessed as falling beneath the threshold of material harm. However, I disagree if it is suggested that economic benefits associated with the activity necessitating the harmful discharge affect the assessment of materiality. The decision-maker’s assessment of whether the discharge of a harmful substance will cause material harm cannot be affected by considerations of economic benefit. If the harm cannot be avoided through regulating the discharge or through imposing conditions requiring mitigation or remediation, consent must be refused, regardless of economic considerations. On my view of the legislative scheme, considerations of sustainable management play a part in relation to consents for discharge of harmful substances only where the proposed discharge (with all regulatory, remedial and mitigatory steps) does not cross the threshold of material harm.

This, however, leaves the situation that there is no clear majority within the Court on this critical issue of how applications should be determined. The pragmatic solution is that I should join with Glazebrook and Williams JJ on this point, viewing that as the preferable of two approaches, each of which I disagree with, at least in part. I am therefore content with the three-step approach suggested by Glazebrook J, but make explicit the following point which I see as implicit in the third step. Since s 10(1)(b) of the Act is cumulative on s 10(1)(a), I do not exclude the possibility that a decision-maker would want to impose conditions to mitigate, remedy or avoid adverse effects even though the threshold of material harm will not be met.