Following last year’s review of the Public Works Act, the Government has announced that sweeping reforms are coming to this legislation, which it claims will modernise the Act.
The review of the Act found:
- unnecessary duplication in the system;
- issues with outdated negotiation processes; and
- disjointed government agency practices.
The Government states that it currently takes up to a year on average to acquire land. If compulsory acquisition is required the process generally takes up to two years, and if objections are made to the Environment Court it is usually at least three years. The Government says these time frames cause significant delays to building critical infrastructure.
The Government has announced that a new Act will:
- Delegate land acquisition responsibility: Empower Government agencies like the New Zealand Transport Agency, which regularly use the Public Works Act, to enter into acquisition agreements with landowners. The Minister for Land Information will remain responsible for compulsory acquisition by the Crown.
- Enable collaboration between agencies: Allow Government agencies to work together when acquiring land for connected public projects. Instead of each agency acquiring land separately, they will be able to coordinate acquisition of land as needed to make the process smoother.
- Enable relocation of infrastructure: Allow both the government and local authorities to acquire land when they need to move existing infrastructure (like powerlines or pipes) that are in the way of new public works.
- Refine the role of the Environment Court: Amend the factors that the Environment Court can consider when reviewing objections to land acquisitions for public works (other than for critical infrastructure projects, which the Environment Court will no longer hear – see below), with the Government saying that there will be a renewed focus on individual property rights, removing overlap with the Resource Management Act.
- Require mediation for compensation disputes: Require that parties try to resolve disputes over compensation through mediation or alternative dispute resolution before going to the Land Valuation Tribunal, to avoid lengthy court proceedings where possible.
- Allow Transpower to bypass standard processes: Enable Transpower, the State-Owned Enterprise managing New Zealand’s power grid, to use the Public Works Act to acquire land by agreement. This would streamline their process for building energy infrastructure.
The Government also says it aims to make changes that will address inequities faced by Māori landowners. The Government has acknowledged that the historic confiscation of Māori land remains a deep source of pain for many New Zealanders, and it reaffirmed its commitment that acquiring Māori land for public works is and will remain a last resort. Further, it says that it will ensure that where Māori freehold land is required it must be valued equally, ensuring landowners finally receive fair compensation. Where compulsory acquisition is unavoidable, the process will require the joint approval of both the Minister for Land Information and the Minister responsible for the relevant Māori portfolio.
Further changes will likely be announced before the Public Works Amendment Bill is introduced to Parliament in the middle of 2025.
In the meantime, the Government intends to amend the current legislation to speed up the acquisition of land needed for some public infrastructure projects. The amendments will provide for:
- Incentive payments: To encourage early agreements, landowners who voluntarily sell their land before a Notice of Intention is issued will receive an additional premium payment equal to 15 percent of their land’s value, with a maximum payment of $150,000.
- Recognition payments: All landowners whose land is acquired under the accelerated process will receive a five percent recognition payment, acknowledging the critical role their land plays in delivering essential infrastructure, with a maximum payment of $92,000.
- Replacement objections process: Landowners who object to land acquisition for critical infrastructure projects will no longer go through the Environment Court. They will instead submit their objections directly to the relevant decision-maker, either the Minister for Land Information or the local authority, for faster resolution.
For landowners who agree earlier, this promises to deliver significantly higher payments than at present.
Early commentary has focussed on the proposed shift of many objections to compulsory acquisition processes from being considered by the Environment Court to being considered by the Minister for Land Information or Local Authorities. The concern expressed is that this will see lesser protection and recognition of property rights. The Government has disagreed with this, saying property interests will still have protections while reducing costs and time frames for landowners.
While these proposals will assist the Government’s desire to make the acquisition process more efficient, and fairer to landowners, at this stage there have been no announcements as to the effect of these proposals on existing negotiations with landowners for the many infrastructure projects the Government has already announced – it would be unfair for those landowners to have to make decisions under the existing legislation without knowing whether they have the option of proceeding under the potentially better new compensation provisions now being proposed.
For more information on any of these proposed changes please contact a member of our Property Law team or our Construction and Projects team.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
