The Price of Non-Compliance

Madeleine de Young – February 24, 2015

In 2013, South Taranaki District Council found themselves in the midst of an environmental disaster as a plan to safely dispose of 3 million litres of excess buttermilk backfired. By overloading the Eltham Eader, the town of Eltham was overwhelmed by an inescapable, rotting stench for months. In fact, the town still smells today.

To date, this non-compliant botch up has cost South Taranaki District Council, with assistance from Fonterra, $680,000. With an additional $115,000 fine for breaching the RMA from the environment court and now a further $260,000 required to decomission the defunct and putrid Eader, you have to ask – how did an ‘environmentally friendly solution’ go so terribly wrong?

The same question should be asked of Jenners Worldwide Freight.  In 2013, this Auckland company, spilled 1000 litres of purple dye in the Oruarangi stream and estuary and adjoining Manukau Harbour, decimating local wildlife. As a result, all eels and fish in the stream were killed along with just under half of the mud snails, and other species in the estuary. Fishing was banned and various local oyster beds seriously affected.

In response Jenners Worldwide Freight was fined $103,000 and ordered to pay $25,000 in costs by the Auckland District Court. Notably this major loss of both income and wildlife never had to occur. In Judge Harland’s words,

‘The failure by management to even appreciate that there was a relevant rule in a plan that applied to them was also remarkable.’

For those interacting with natural resources, both South Taranaki and Jenners Worldwide Freight can teach a valuable lesson. Sure, compliance has a price but compared to non-compliance, it’s peanuts.

The purpose of the Resource Management Act is to promote the sustainable management of natural and physical resources. It is designed to protect our natural environment and to ensure efficient use of natural and physical resources. Where a breach of the RMA is serious enough to warrant prosecution, the event or series of events will have a tangible impact on our natural environment. In addition it will usually be part of a series of events that will impact negatively, not only on the environment the company operates within but also on the public’s ability to engage with it. It will in many occasions be totally avoidable.

As a result, RMA breaches damage both company reputations and New Zealand’s clean green brand as a whole. An example? As of 26th, February 2015, New Zealand’s dairy industry was one of the key examples on Wikipedia for Agricultural Pollution, this is not something we should be proud of.

The impact of increased environmental degradation as a result of breaches to the RMA could have a dramatic impact on New Zealand’s export value and tourism rates. According to a report from the Ministry of the Environment, we could lose up to $569 million dollars in the dairy industry alone, should our reputation be further tarnished.

New Zealand businesses can make a difference however. The RMA clearly outlines how businesses who work with natural and physical resources should conduct their day to day activities. By working with regional councils to create management plans, staying on top of compliance and ensuring that every member of the team is on the same page, New Zealand businesses can reduce both their own risk as well as their potentially negative impact on the country.

CS-VUE helps New Zealand businesses to get it right. Our Core Compliance software puts resource consent obligations into a workflow with actionable and phase related obligations triggering email alerts. With a traffic light system to instantly observe compliance status and a hierarchy of responsibility, compliance is no longer a confusing mountain of a task.

The impact of non-compliance is immeasurable. It’s effects are random, totally unpredictable and impact on a company’s finances, reputation and the resources that they work with. A company cannot budget for non-compliance, so why would you risk it?

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