Farmers and rural businesses in New Zealand are adjusting to new insurance restrictions following recent amendments to the Resource Management Act (RMA).
The Resource Management (Consenting and Other System Changes) Amendment Bill, now enacted, prohibits insurance cover for fines or infringement fees arising from RMA violations
Insurers, including FMG, have begun informing clients of the updated policy terms.
The legislative update means that individuals and companies found in breach of the RMA – such as through unauthorised discharges or other environmental incidents – will be personally liable for any penalties imposed.
This move is part of a broader government initiative to strengthen environmental compliance and clarify liability within the primary sector.
Mark Hooper, resource management spokesperson for Federated Farmers, noted that the exclusion of insurance for deliberate or commercially motivated breaches aligns with existing industry standards.
“Many insurance policies exclude cover where a crime is committed, so effectively, an insurance company’s own policies achieve the same outcome as the amendment,” he said, as reported by RNZ.
However, Hooper raised concerns about situations where breaches occur without intent or due to reliance on professional advice.
“There are situations in which a farmer or other resource user might be in breach of the RMA through no fault of their own. We think they should be able to insure against fines in such circumstances,” he said.
He cited examples such as contractors relying on landowner assurances or expert recommendations, which may later prove inaccurate.
Hooper also compared the RMA to the Health and Safety at Work Act, noting that while the latter recognises efforts to mitigate risks, the RMA can still impose liability even when reasonable care is exercised.
“Insurance is typically obtained for matters outside’s one control. For this reason, we supported the ability to insure against RMA breach legal and remediation costs,” he said.
The amendment introduces significantly higher penalties for RMA breaches. The maximum fine for individuals has increased from $300,000 to $1 million, while businesses now face a maximum penalty of $10 million, up from $600,000. The maximum prison sentence has been reduced from two years to 18 months.
Patrick Lynch, regional compliance manager at Waikato Regional Council, said the changes are expected to influence behaviour across the sector.
“I think that over time it has to make a difference, in respect of people will have to realise that they just can’t run that risk of breaching the RMA because the repercussions are so big, and there’s no insurance companies to bail them out in respect to paying fines,” he said, as reported by RNZ.
He noted that the council’s compliance efforts remain focused on dairy and forestry operations, where effluent management and earthworks are frequent issues.
The RMA amendment is part of a wider reform agenda aimed at streamlining resource consent processes and supporting economic growth.
RMA Reform Minister Chris Bishop stated that the new law is designed to remove regulatory barriers and facilitate development in areas such as infrastructure, housing, and agriculture.
Additional provisions in the amendment allow authorities to consider an applicant’s compliance history during resource consent reviews and enable more responsive enforcement.
Changes to water discharge regulations and other operational rules are also included, following input from regional councils.
