What is a ‘significant national or regional benefit’ under the NPS-HPL? New Zealand High Court provides guidance

The New Zealand High Court in Valley Residents Against Gravel Extraction Incorporated v Tasman District Council [2026] NZHC 2202 (Valley Residents) has provided guidance on what is of “significant or regional benefit” under the National Policy Statement for Highly Productive Land 2022 (NPS-HPL). The Court stated this will turn on a “significance” threshold and provided commentary on this.

 

Background

The proposal at issue was to develop a 6.73-hectare gravel quarry on highly productive land in Motueka, New Zealand, to supply essential aggregate for local construction. Tasman District Council (Council) had declined to grant consent for the proposal. The applicant, CJ Industries Limited (CJ Industries), successfully appealed that decision to the Environment Court.

Valley Residents Against Gravel Extraction Incorporated (Society) then appealed the Environment Court’s interim and final decisions. The Society raised, among other issues, whether the Environment Court had erred in its interpretation of clause 3.9 of the NPS-HPL.

 

Analysis of clause 3.9(2)(j)(iv) of the NPS-HPL

Clause 3.9(1) provides that territorial authorities “must avoid the inappropriate use or development of highly productive land that is not land-based primary production”. However, clause 3.9(2)(j)(iv) goes on to state that use or development of highly productive land will not be inappropriate where (as it currently is; see below):

…it is associated with one of the following, and there is a functional or operational need for the use or development to be on the highly productive land:

…

(iv) quarrying activities that provide significant national or regional benefit.

The Environment Court had found there was a functional or operational need for the quarry to be located on highly productive land and this was not in dispute on appeal. The issue was whether the quarrying activities proposed provided a “significant national or regional benefit”. The Environment Court had found that:

[301] We accept also that the aggregate resource will have a regionally, if not nationally significant benefit in meeting current demand for this resource, the various uses of which will have positive benefits for the wider public not just the appellant. The proposal involves aggregate extraction that provides significant national or regional public benefit that could not otherwise be achieved using resources within New Zealand.

[302] The uncontested evidence is that there will be positive economic effects for the region in two ways. First, there is a benefit that accrues from the cost of sourcing aggregate from this site rather than a site further afield. Second, the economic assessment assumes aggregate is available from elsewhere, when in fact it is constrained everywhere. This site provides a source of aggregate that is in high demand and short supply. Positive effects accrue to the sectors that use concrete and sealing chip from the supply of those high value products.

The High Court started by stating that:

I am satisfied that it may be said that cl 3.9(2)(j)(iv) provides an exception to the policy in cl 3.9(1) that would otherwise apply, plainly contemplating that the objective of protection of highly productive land is not absolute. Concepts of mitigation and remedy may serve to meet the “avoid” standard by bringing the level of harm down so that material harm is avoided [citing Port Otago Ltd v Environmental Defence Society Inc [2023] NZSC 112, [2023] ELHNZ 245].

The High Court went on to state that, for clause 3.9(2)(j)(vi) to apply, a “significance” threshold has to be met:

…I consider that to provide a significant national benefit, a project need not materially benefit every part of New Zealand. It therefore stands to reason that a project can provide a significant regional benefit even if it does not benefit every part of the region in which it is based. Put another way, a sufficiently substantial localised public benefit can translate to a significant regional benefit.

The High Court also provided commentary on an “alternatives” threshold that needed to be met. Clause 3.9(2)(j)(iv) of the NPS-HPL was amended after the hearing, but before the Court issued its decision, by deleting the words “that could not otherwise be achieved using resources within New Zealand” which used to appear at the end of the clause. The High Court’s “alternatives” commentary is therefore of limited value.

In respect of the proposed quarry, the High Court observed that the Environment Court:

…did not limit itself to a local assessment and rather the Court had evidence demonstrating that carting aggregate from potential sources further afield in the Tasman region would have a smaller regional benefit than the benefit accruing from the Proposal. It was not suggested by the Society that sufficiently proximate locations were overlooked nor that the analysis of individual locations was flawed.

Ultimately, the High Court concluded that the Environment Court had made no error of law in its consideration of clause 3.9(2)(j)(iv).

This case provides useful guidance on what can be considered a “significant national or regional benefit”, how to draw the line between the two and the type of evidence required to establish this threshold.